CLEAN WATER STATE REVOLVING FUND PROGRAMS

2 0 0 8 A N N U A L R E P O R T

Cleaning Our Waters,

Renewing Our Communities,

Creating Jobs
C W S R F P R O G R A M H I G H L I G H T S :

• $68.8 billion in cumulative assistance provided 1

• 69% of assistance funds projects that protect human health 2

• 115 million people affected living in 2,262 communities 2

• 600,000 construction jobs and 116,000 additional jobs

created between 1987 and 2005 3

• Average savings of 20% of total project costs for 20-year loan 1

• Fund utilization rate of 98% 1

• 2.41 times cumulative return on federal investment 1

1 National Information Management System

2 CWSRF Benefits Reporting System

3 Council of Infrastructure Financing Authorities (CIFA). The Clean Water State Revolving Fund (CWSRF): State Report 2005.
T A B L E O F C O N T E N T S

CWSRF Programs: Cleaning our Waters, Renewing our Communities, Creating Jobs 2

Strategic Management: A Continued Commitment to Meeting Needs 6

2008 CWSRF PISCES Awards: Performance and Innovation in the SRF 11

State Agencies that Manage CWSRF Programs 14

New CWSRF Initiatives for 2009 15

CWSRF 2008 Performance Highlights 17

2008 Financial Performance Overview 20

CWSRF At-A-Glance 24

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

1
The Clean Water State Revolving Fund (CWSRF) provides attractive low-cost funding for projects that improve

water quality, renew infrastructure, and support local

economies. Initiated by Congress in 1987 and implemented

by EPA and states, the CWSRF reflects a national commitment to the protection and restoration of rivers, lakes,

and estuaries that are essential to communities and wildlife.

Through 2008, the CWSRF has provided $69 billion in cumulative assistance for wastewater infrastructure, nonpoint

source, and estuary projects. It has also brought significant

cost savings to assistance recipients. By using the CWSRF

in 2008, borrowers saved 20 percent over the life of a typical 20-year loan when compared to conventional financing.

It takes billions of dollars each year to protect and improve

the quality of water in our rivers, lakes, and streams. The

CWSRF is widely recognized as a critical source of funding

that enables communities to renew aging municipal infrastructure and restore at-risk aquatic ecosystems. Performance tracking reports show that more than one-hundred million people have benefited from CWSRF funded projects.

CWSRF assistance also supports local economies through

job creation during project construction and by helping to

ensure that water resources are available for use by businesses.

The CWSRF is comprised of 51 independent revolving

loan funds in all 50 states and Puerto Rico.These programs

are unique because they represent a collaborative partnership at the federal and state level. To date, the federal government has contributed more than $26 billion and states

have added another $5.6 billion in required matching

funds. Although there is EPA oversight, the states have the

lead role in structuring and managing the programs. States

have used this flexibility to create unparalleled environmental and economic benefits.

By providing assistance to a wide variety of eligible water

quality projects in the form of low interest loans, CWSRF

programs function as environmental infrastructure banks. As principal and interest

repayments are recycled back into individual programs, they become available to

fund additional projects. This revolving

structure means that the programs not

only replenish themselves over time, but

grow in financial capacity as loan repayments are made. States can also choose to

issue bonds backed by CWSRF assets to

provide additional assistance. To date, 27

states have done so, raising an additional

$22.4 billion to help meet the environmental needs of communities. Figure 1 illustrates how the programs operate.

C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

C W S R F P R O G R A M S : C L E A N I N G O U R WAT E R S , R E N E W I N G O U R C O M M U N I T I E S , C R E AT I N G J O B S

2

C L E A N W AT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

F I G U R E 1 | How the CWSRF Program Works (Optional) Bond Proceeds Bond Repayments

State

Match Loan

Repayment

Low-Interests

Loans

Payments

for Services

Capitalization

Grant

STATE

GOVERNMENT

EPA

CLEAN WATER

STATE REVOLVING

FUND

ASSISTANCE

RECIPIENTS

CONTRACTORS

AND

VENDORS

BOND HOLDERS

Cleaning our Waters,

Renewing our Communities, Creating Jobs
Responsible fiscal management and the programs’ ability to

revolve over time have resulted in a remarkable return on

federal investment. As of 2008, for every federal dollar contributed, $2.41 has been provided in assistance (see Figure

2). This return is expected to increase as loan repayments

are used to fund new projects, and states maintain strong,

directed program management. Increased funding

capacity is important because of rising needs,

due both to construction cost inflation

and the number of existing plants that

are reaching the end of their useful

life. The continued growth of the

programs ensures that funding will

be available for projects that improve and maintain water quality

well into the future.

There are many factors that make

the CWSRF programs stable funding sources for environmental protection. Wastewater infrastructure is one of

the safest investments due to the financial

strength of local communities and the dependability of water and sewer revenues. Fitch Ratings estimates show that during the time period between 1979 and

1999, which included several recessions, the default rate on

municipal water and sewer bonds was only 0.04 percent1.

Adding to this is a proven track record of federal and state

financial oversight. For example, states conduct reviews of

assistance recipients during the application process to evaluate their financial condition and to ascertain whether they

have established a dedicated revenue source for loan repayment. This means that future lending capacity is extremely

secure, and CWSRF funding will be available

even when access to other financing sources

may be limited. This also permits states

that choose to raise additional funds by

issuing bonds to retain high credit

ratings, allowing them to receive the

most favorable interest rates offered

in the credit markets.

The revolving nature of the

CWSRF programs means that

when a community repays a loan it

has received, it is supplying funding

that will be used to help another community clean its waters and revitalize its

infrastructure. Each project ultimately helps

improve water quality across the state and country. By choosing CWSRF funding, communities are improving their own water quality while simultaneously

sharing in a commitment to renew neighboring communities and protect shared water resources.

C W S R F P R O G R A M S : C L E A N I N G O U R WAT E R S , R E N E W I N G O U R C O M M U N I T I E S , C R E AT I N G J O B S

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

3

1 Fitch Ratings. Financial Guaranties Special Report: Bond Insurers Transcend Municipal Market. 1999.

F I G U R E 2 | CWSRFs Return 2.41 Times the Federal Investment as of 2008

Federal Outlays are the amount of cash drawn from the U.S. Treasury into the CWSRF.

CWSRF Disbursements are the actual cash paid out from the CWSRF to assistance recipients Federal Outlays CWSRF Disbursements

0

10

20

30

40

50

60

70

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Billions of Dollars (cumulative)

$59.7

$25.1
Flexibility is a hallmark of the CWSRF programs. The

Clean Water Act gives states a broad array of financing options beyond traditional and very popular low-interest

CWSRF loans. CWSRF programs may also offer local debt

guarantees or insurance for local debt and even provide guarantees for local borrowing that is used to create “sub-state”

revolving funds. States can use a combination of these assistance options to maximize the impact of available funds.

The CWSRF programs can also fund a wide range of project types, including those that contain sustainable, low-impact, and climate change mitigation design components.

EPA encourages innovation across CWSRF programs.The

annual Performance and Innovation in the SRF Creating Environmental Success (PISCES) Awards recognize projects

and programs that creatively and effectively use CWSRF

funding to meet the environmental needs of communities.

This latitude allows states to direct CWSRF funding to the

most deserving projects, which are evaluated according to

state-defined priority ranking systems that may be altered

to reflect new priorities and new project types. Many states

have modified their priority setting process over time and

now have integrated priority systems that include evaluation criteria to assess all types of projects. New priorities

such as green infrastructure, energy conservation, and climate change impact can be incorporated into state

CWSRF priority systems as states respond to new funding opportunities.

As Figure 3 demonstrates, states have proven to be extremely successful at structuring their programs so funds

are directed towards pressing environmental problems.

Through 2008, the CWSRF programs have committed

over 98 percent of the $70 billion in cumulative funds

available. This exceptional rate of fund utilization demonstrates continued strong demand for CWSRF financing,

and is a direct result of the large number of important

needs, the attractiveness of below market interest rates,

the flexibility of financing options, and sound state program management.

C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

C W S R F P R O G R A M S : C L E A N I N G O U R WAT E R S , R E N E W I N G O U R C O M M U N I T I E S , C R E AT I N G J O B S

4

F I G U R E 3 | 98% of CWSRF Funds Committed to Projects as of 2008

Cumulative Assistance Provided

0

10

20

30

40

50

60

70

80

Billions of Dollars

Cumulative Funds Available

$70.1 98% $68.8

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
In addition to their significant environmental contributions, the CWSRF programs play an important role in improving local economies. Numerous jobs across multiple

sectors are created through the construction and renovation of wastewater infrastructure. Many are directly related

to the projects being funded, covering planning, design,

and construction. Others are indirect, resulting from

spending associated with project implementation, such as

the production of raw materials like steel and concrete.

Several private and public studies conducted over the past

several years estimate that 20,000 – 60,000 jobs are

created for every $1 billion in federal investment in wastewater infrastructure.2 This

number is likely low for the CWSRF

programs, because unlike standard

grant-based federal infrastructure investment programs, CWSRF dollars are spent repeatedly as loan

repayments are recycled back

through the program.The Council

of Infrastructure Financing Authorities estimated in 2005 that

600,000 construction jobs and

116,000 additional jobs resulted from

CWSRF funding over the programs’

first seventeen years.3

Once projects are completed, economic benefits

continue, as water is an important resource and commodity for businesses across the country. In 2000, the agriculture industry used more than fifty trillion gallons of water

for irrigation of fields and another two trillion gallons to

support livestock and aquaculture.4 Another seven trillion

gallons of fresh water were used for industrial purposes

such as fabricating a product or cooling during manufacturing. Water is also essential for industries including the

$50 billion/year water-based recreation industry and the

$300 billion/year coastal tourism industry.5 CWSRF

funded projects greatly aid these substantial components of

the national economy by protecting and restoring the

water that they need to operate.

The economic impact of CWSRF funding is enhanced

through partnerships between assistance recipients

and local businesses. Some communities work

with sources of industrial waste, such as

local manufacturing, to figure out ways

to most effectively deal with waste

streams. For example, Le Center,

Minnesota made a landmark deal

with a local manufacturing company, which agreed to install an

oil/water separator and monitoring

station if the city would expand its

treatment facility to accept the resulting wastewater. Le Center received a CWSRF loan for this

expansion. Other communities find that

local businesses can make use of effluent

instead of drawing from stressed public water

supplies. Eastern Idaho Regional Wastewater Authority received a CWSRF loan to build a new treatment facility and the effluent from the plant will be supplied to a

manufacturing company for reuse.This will protect the local

aquifer while simultaneously supporting local business.

C W S R F P R O G R A M S : C L E A N I N G O U R WAT E R S , R E N E W I N G O U R C O M M U N I T I E S , C R E AT I N G J O B S

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

5

2 Council of Infrastructure Financing Authorities (CIFA). The Clean Water State Revolving Fund (CWSRF): State Report 2005. 2005; Federal Highway Administration. Highway Infrastructure Investment and Job Generation. 1996; National Utility Contractors Association. A Report on Clean Water Investment and Job Creation. 1992; Natural

Resources Defense Council. All Dried Up: How Clean Water is Threatened by Budget Cuts. September 2004; RTI International/Global Insight, Inc. Estimating Employment

Impacts of Water Infrastructure Funding, A Report to Congress. September 2004.

3 Council of Infrastructure Financing Authorities (CIFA). The Clean Water State Revolving Fund (CWSRF): State Report 2005.

4 United States Geological Survey. Estimated Use of Water in the United States in 2000.

5 Water Infrastructure Network. Water Infrastructure Now: Recommendations for Clean and Safe Water in the 21st Century. February 2001.
C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

S T R AT E G I C M A N A G E M E N T: A C O N T I N U E D C O M M I T M E N T T O M E E T I N G N E E D S

6

Strategic Management

A Continued Commitment to Meeting Needs

Since being established, the CWSRF programs have been very successful in reaching and serving communities across the country. More than 22,000 loans have been made, with 66% going to communities with a population of fewer than 10,000 people. Recognizing the importance of addressing newly identified or unmet

needs, states have directed CWSRF funding towards a variety of traditional and innovative water quality projects. States are also engaging in better planning that considers new eligibilities, financial assistance terms,

and repayment sources.

EPA is actively exploring and promoting strategic management to assist CWSRF programs as they continue to clean

our water and renew our communities. During the past year,

EPA has encouraged states to take a fresh look at program

eligibilities and consider what new funding solutions might

be implemented to respond to new and continuing water

quality issues. Concurrent with state efforts, EPA has undertaken a comprehensive re-examination of financing options and project eligibilities allowed by the Clean Water

Act with the draft white paper “The Clean Water State Revolving Fund Program: Tapping its Untapped Potential.”

Together, these strategic management efforts enhance the

ability of the CWSRF to meet current and future needs.

STRATEGIC PLANNING

Many CWSRF programs periodically evaluate their structure to ensure funds are being used efficiently over time.

States across the country, including California, Texas, Missouri, New Mexico, Arizona, and Hawaii, have undertaken

strategic management and planning assessments with EPA

support. These and other states, such as Ohio, are examining their program mission and objectives, reaching out to

communities with the greatest financial needs, and streamlining processes to reduce the time and effort it takes to

fund a project through the CWSRF.

An important aspect of strategic planning is the periodic

assessment of the project priority setting system to ensure

that it adapts to changing state water quality priorities.

States have the flexibility to structure priority setting criteria so that they address state-specified water quality

goals. A well conceived priority system is an important

step in ensuring that program funding reaches both regionally important projects and small, disadvantaged communities. States may also consider how best to partner

CWSRF assistance with other federal or state funding
programs to create the most attractive funding solution for

loan applicants.

Another important step in CWSRF strategic planning and

management is streamlining the loan process to

make it as efficient as possible. Many small

and disadvantaged communities find financial and environmental requirements complicated, so working to

reduce the number of steps in

the application process is a key

to reaching these types of borrowers. For example, some

states have worked with other

public lenders to create a common application, making it easier for communities to find the

funding source that is right for

them. Others have assigned state

staff to assist borrowers as they move

through the loan process. Making the programs easier for communities to navigate helps ensure

that those with the greatest need are able to apply for and

receive assistance.

CWSRF programs are also interested in getting communities to start planning well in advance of construction, in

order to facilitate a continuous pipeline of new projects

ready to receive funding. Many states provide planning and

design loans to help with pre-construction costs. Communities are then encouraged to apply for CWSRF financing

when they are ready to begin

construction. A project

pipeline helps to ensure

that states have high priority projects ready to

go each year that will

take full advantage of

program assistance.

EPA SUPPORT OF STATE EFFORTS TO

REEXAMINE EXISTING ELIGIBILITIES

By identifying water quality needs and priorities, states can

pursue projects that will best address water quality

concerns. To support these efforts, the draft

white paper lists many types of water

quality and infrastructure projects eligible for CWSRF assistance. The

white paper includes several new

project types which have yet to

be funded (see box below). It

also explores the forms of financial assistance that may be

offered by CWSRF programs

in addition to traditional loans,

including guarantees, insurance,

and the purchase of local bonds.

To incorporate comments from stakeholders, a second draft of the white paper is

being developed. The new draft will include additional financial innovations that can augment the amount of

CWSRF funding available to protect and restore our waS T R AT E G I C M A N A G E M E N T: A C O N T I N U E D C O M M I T M E N T T O M E E T I N G N E E D S

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

7

Project types identified in the white paper that

are yet to be funded by a CWSRF include:

• Energy audit of public wastewater treatment

facility or system.

• Generation of pollution control credits.

• Control of source of atmospheric deposition

that adversely affects water quality.

• Estuary projects outside of current National

Estuary Program (NEP) study areas but within

estuarial watershed (requires expansion of NEP

study areas).
ters. Information on eligibilities is being restructured so

that states can easily evaluate whether a proposed project

can receive CWSRF financing. Finally, the new version of

the white paper will have a greater emphasis on strategic

management, demonstrating that the environmental impact of the programs can be maximized when various project eligibilities are coordinated with the possible financial

innovations.

EPA is seeking feedback from a variety of sources to ensure that the draft white paper is a truly useful document.

The paper will continue to be discussed at EPA sponsored

regional training workshops, biannual EPA/State Workgroup meetings, and regional roundtables. Many of the

programs’ best ideas and innovations have been developed

at the state and regional level and EPA is committed to including them in the new draft of the white paper.

FOCUS ON ALTERNATIVE

PROJECTS

Many of the alternative project types identified in the draft

white paper have already been funded by states. Several

programs are focusing on sustainable infrastructure and

projects that use low impact development practices because

these types of projects can provide effective solutions that

responsibly address long-term environmental needs. Other

states are funding projects which contribute to national efforts to promote climate change mitigation and adaptation.

Effective management of water resources will require the

CWSRF programs to seriously consider these innovative

areas while maintaining their commitment to traditional

pipe and plant projects. Several examples include:

• Sustainable infrastructure projects. Sustainable infrastructure projects include green infrastructure, water

reclamation, and water reuse projects and have been

funded by states throughout the country. Orange

County, California and Madison, Wisconsin have

funded projects specifically designed to recharge the

water supply in depleted aquifers and watersheds.

Other assistance recipients, such as Grand Lake, Oklahoma, plan to use effluent from new wastewater treatment facilities for other purposes, including the

irrigation of local recreational areas.

• Low-impact projects. A number of states have focused

on ways to lessen the impact of wastewater treatment

facilities on the environment as well as the surrounding

community. For example, an Arizona community used

CWSRF funds to convert underused oxidation ditches

into highly efficient sludge processors, and a community in Maine constructed a new treatment facility on

the site of old, derelict buildings that had become community eyesores. Seattle, Washington received a

CWSRF loan to implement low-impact urban

stormwater management projects, including rain gardens and porous pavement, in order to protect water

quality in an urban creek with an endangered salmon

population.

• Climate change projects. Projects that aim to lessen the

impact of climate change often have additional benefits, such as long-term cost savings when compared to

traditional alternatives. A township in Michigan reC L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

S T R AT E G I C M A N A G E M E N T: A C O N T I N U E D C O M M I T M E N T T O M E E T I N G N E E D S

8
ceived a CWSRF loan to add methane capture energy

production to its solid waste treatment facility, which

will save the municipality approximately $30,000 a year

in energy costs. In Arkansas, a community funded a

project to restructure its collection system, replacing

several pump stations with gravity lines, reducing its

carbon emissions and saving the community significant

energy and maintenance costs.

TARGETED OUTREACH

CWSRF programs are only as effective as the projects they

fund, so outreach to prospective borrowers has become an

increasingly important part of strategic management efforts. Several states, including Iowa and Missouri, are reexamining their outreach strategies to ensure that projects

they target help achieve state water quality goals. Outreach

efforts often go hand in hand with strategic planning.

States first contact current and potential borrowers, collecting information on how those communities

perceive the CWSRF as well as how municipalities make financial decisions.

Gathered through interviews and

focus groups, this information

helps programs identify places

where improvements can be

made. States then work with

experienced communication

professionals to determine ways

to improve the impressions communities have of the CWSRF

programs. EPA then assists states in

using this information to develop and

execute marketing plans.

Iowa exemplifies these efforts as it begins implementing its

2008 outreach plan. Activities highlighted include the creation of a set of ads for magazines that target government

employees, the production of a new brochure that will be

distributed at industry events, and the development of a

new website that will make it easier for communities to

learn about the CWSRF. EPA will be working with Iowa

to monitor the success of these new outreach tools.

USING CWSRF ENVIRONMENTAL

RESULTS DATA

EPA is supporting states as they develop tools to assist in

planning and outreach efforts, often taking advantage of

data that states input into the CWSRF Benefits Reporting

(CBR) system. Some states use this data to enhance outreach, while others use it to evaluate their success in addressing state water quality priorities. One example of using

CBR data for management and outreach purposes is to use

CBR data entries when developing maps that include

CWSRF funded project information.

Several states including Iowa, Maryland, New

York, Ohio, and Oklahoma have begun to develop state mapping capabilities. While

each state’s mapping system is different,

they all display the locations of projects funded by the CWSRF together

with other environmental and economic information for the state.

Oklahoma’s maps show the location

of projects within specific watersheds, counties, and congressional

districts (see Figure 4). Iowa’s system

focuses on comparing the location of

funded nonpoint source projects to priority

areas within the state, for example showing agricultural best management practice projects on the same

map as the location of open feedlots. Maps are an accessible way for CWSRF managers to demonstrate the cumuS T R AT E G I C M A N A G E M E N T: A C O N T I N U E D C O M M I T M E N T T O M E E T I N G N E E D S

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

9
lative, long-term positive effects that years of CWSRF

funding have had on local water bodies.

Efforts have also been undertaken to combine the information collected by the CBR system with other national

water quality data. The CBR data has been added to the

Office of Water’s Watershed Assessment, Tracking & Environmental ResultS (WATERS), which is a publicly available EPA platform for storing and viewing national

information on nutrient criteria, water quality standards,

and impaired waters. Through the Expert Query tool, the

WATERS platform allows users to search for and sort

through projects based on loan and project details. WATERS also includes a mapping application, EnviroMapper, which can display CWSRF project locations on maps

together with information from other EPA datasets, such

as 303(d) listed impaired water bodies. WATERS can be

accessed online at http://www.epa.gov/waters.

C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

S T R AT E G I C M A N A G E M E N T: A C O N T I N U E D C O M M I T M E N T T O M E E T I N G N E E D S

10

F I G U R E 4 | Oklahoma CBR Mapping

Lake

Eufaula

Map showing CWSRF project locations, rivers, and counties within the Lake Eufaula watershed in Oklahoma.
The CWSRF programs are dedicated to

funding projects that protect and improve

the environment without burdening the

financial capacity of local communities.

The 2008 PISCES Awards (Performance

and Innovation in the SRF Creating

Environmental Success) recognize assistance

recipients across the county that have

showed exemplary leadership and

innovation in project planning, design, and

implementation to further EPA water

quality protection goals.

In 2008, states identified 34 outstanding assistance recipients to receive PISCES Awards. Each state had the opportunity to nominate one or more projects that demonstrated

high-quality performance, financial integrity, and Clean

Water Act compliance. Nominees also had to demonstrate

performance in at least one of seven key areas:

Better management practices

Full-cost pricing

Efficient water use

Watershed-based planning

Innovation in financing

Innovation in project implementation

Creative use of partnerships

One recipient from each state was selected to receive the

Award. Winners were announced at the national meeting

of the Council of Infrastructure Financing Authorities

(CIFA) in Providence, RI in October 2008.

The recipients of the Fourth Annual PISCES Awards are

examples of the types of projects that best represent the

CWSRF’s commitment to innovative and sustainable water

quality financing.

In effectively meeting local and state water quality goals,

they demonstrate that creative planning and design can balance environmental needs with fiscal responsibility.

T H E 2 0 0 8 P I S C E S AWA R D S : P E R F O R M A N C E A N D I N N O VAT I O N I N T H E C W S R F

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

11

P ER F O RM A N CE A N D IN N OVAT IO N

IN T H E S R F
C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

T H E 2 0 0 8 P I S C E S AWA R D S : P E R F O R M A N C E A N D I N N O VAT I O N I N T H E C W S R F

12

Fox Metro Water Reclamation District,

Illinois:Installed energy saving systems, including a heat exchange system and a sludge

drier, to improve treatment plan efficiency.

Peru, Indiana: Doubled treatment plant

capacity by converting the existing anaerobic

digestion process to aerobic/anaerobic

sequencing digestion.

Delhi Charter Township, Michigan:

Rehabilitated a wastewater treatment plant

REGION 5

Beebe, Arkansas: Replaced several pump

stations in its wastewater system with energy

and maintenance saving gravity lines.

Lafourche Sewer District No. 1,

Louisiana: Upgraded the local wastewater

system to meet advanced treatment criteria.

Grand Lake Public Works Authority,

REGION 6

Charles City, Iowa:Expanded and

upgraded the existing water pollution

control plan to address capacity needs.

Hutchinson, Kansas: Constructed a

facility to pump water from a contaminated

local aquifer and treat it before returning it

to the aquifer.

REGION 7

Sioux Falls, South Dakota: Funded a

cost share contribution to the Central Big

Sioux River Watershed Restoration project

in addition to the construction of a new

sanitary sewer.

Alpine, Wyoming:Replaced an existing

wastewater treatment facility with a new,

larger facility and a new sewage collection

system.

REGION 8

Prescott Valley, Arizona: Converted

underused oxidation ditches to activated

sludge processors, replacing existing, lesser

quality filters.

Orange County, California:Implemented

a groundwater replenishment system

designed to return highly treated wastewater to the County’s groundwater supply

through a series of recharge basins.

Hawaii, Hawaii:Replaced existing

cesspools at publicly owned facilities with

onsite wastewater systems.

REGION 9

Eastern Idaho Regional Wastewater

Authority, Idaho: Connected four cities to

a new wastewater treatment facility which

will produce effluent to be supplied to local

industry for reuse.

Community of Rieth, Umatilla County,

Oregon: Constructed a new collection

system, pump, and sewer line to connect

wastewater to a neighboring sewer system.

REGION 10
T H E 2 0 0 8 P I S C E S AWA R D S : P E R F O R M A N C E A N D I N N O VAT I O N I N T H E C W S R F

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

13

Point O'Woods Association,

Connecticut: Replaced onsite septic

systems and a seasonal water system with

sanitary sewer and year-round water

distribution systems.

Bucksport, Maine: Constructed a new

combined sewer overflow treatment

facility utilizing low-energy swirl

concentrator technology.

Cohasset, Massachusetts:Implemented a

low impact stormwater runoff management

system, including forty rain gardens, to

protect drinking water supply.

Middletown, Rhode Island: Purchased

forty-five acres of agricultural land in

order to prevent it from being developed,

thereby protecting the local drinking

water reservoir.

Colchester, Vermont: Capitalized a local

homeowner septic system revolving fund.

REGION 1

Lewes, Delaware: Expanded the city’s

wastewater treatment plant to meet

additional system capacity needs.

Easton, Maryland: Capped nutrient

load discharge to the Chesapeake Bay

through the installation of enhanced

nutrient removal technologies in the

existing wastewater system.

Schuylkill Valley Sewer Authority, Pennsylvania: Built a regional wastewater treatment facility to replace direct discharge of

residential sewage and stormwater runoff.

Abingdon, Virginia: Upgraded a reclamation facility to include capacity to treat

septic tank wastewater, grease, and other

special wastes.

Morgantown, West Virginia:Reconstructed

an existing wetland to improve stormwater

detention and implemented natural stream

restoration to stabilize stream banks.

REGION 3

Marathon, Florida:Implemented a comprehensive approach to wastewater management,

including the construction of an innovative

vacuum wastewater collection system.

Gainesville, Georgia:Expanded reclamation facilities to include energy efficient

membrane filtration as part of a watershedwide water quality plan.

Brunswick County, North Carolina:

Constructed a regional tertiary wastewater

reclamation system capable of producing

reuse-quality effluent.

Lexington County, South Carolina:

Replaced septic tanks with a sewer

connection to an existing treatment system.

REGION 4

so that the biosolids it produces can be used

for methane capture energy production.

Le Center, Minnesota: Partnered with local

industry to ensure that increasing levels of

waste will be effectively processed.

Madison Metropolitan Sewerage

District, Wisconsin: Constructed an

effluent force main to return treated wastewater to the Sugar River basin to augment

stream flows.

Oklahoma: Protected Grand Lake by

replacing a large number of residential

septic systems with a new secondary

treatment facility.

Eagle Pass, Texas: Expanded regional

wastewater treatment capacity to treat

waste from previously un-served areas of

Maverick County.

Rahway Valley Sewerage Authority, New

Jersey: Upgraded the city’s wastewater

treatment facility, including the installation

of a new UV disinfection system.

Rockland County Sewer District No.1,New

York:Replaced septic systems with a new

collection system and advanced treatment plant

designed to protect the local aquifer.

REGION 2
EPA Region 1 – Boston, Massachusetts

Connecticut Department of Environmental Protection

Connecticut Office of the Treasurer

Maine Municipal Bond Bank

Maine Department of Environmental Protection

Massachusetts Water Pollution Abatement Trust

Massachusetts Department of Environmental Protection

New Hampshire Department of Environmental Services

Rhode Island Clean Water Finance Agency

Rhode Island Department of Environmental Management

Vermont Department of Environmental Conservation

Vermont Municipal Bond Bank

EPA Region 2 – New York, New York

New Jersey Department of Environmental Protection

New Jersey Environmental Infrastructure Trust

New York State Environmental Facilities Corporation

New York Department of Environmental Conservation

Puerto Rico Environmental Quality Board

Puerto Rico Infrastructure Financing Authority

EPA Region 3 – Philadelphia, Pennsylvania

Delaware Department of Natural Resources

and Environmental Control

Maryland Department of the Environment

Pennsylvania Infrastructure Investment Authority

Pennsylvania Department of Environmental Protection

Virginia Department of Environmental Quality

Virginia Resources Authority

West Virginia Department of Environmental Protection

West Virginia Water Development Authority

EPA Region 4 – Atlanta, Georgia

Alabama Department of Environmental Management

Florida Department of Environmental Protection

Georgia Environmental Facilities Authority

Kentucky Infrastructure Authority

Kentucky Division of Water

Mississippi Department of Environmental Quality

North Carolina Department of Environment

and Natural Resources

South Carolina Department of Health

and Environmental Control

South Carolina Budget and Control Board

Tennessee Department of Environment and Conservation

Tennessee Comptroller of the Treasury

EPA Region 5 – Chicago, Illinois

Illinois Environmental Protection Agency

Indiana Department of Environmental Management

Indiana State Budget Agency

Indiana Finance Authority

Michigan Department of Environmental Quality

Michigan Municipal Bond Authority

Minnesota Public Facilities Authority

Minnesota Pollution Control Agency

Minnesota Department of Agriculture

Ohio Environmental Protection Agency

Ohio Water Development Authority

Wisconsin Department of Natural Resources

Wisconsin Department of Administration

EPA Region 6 – Dallas, Texas

Arkansas Soil and Water Conservation Commission

Arkansas Development Finance Authority

Louisiana Department of Environmental Quality

New Mexico Environment Department

Oklahoma Water Resources Board

Texas Water Development Board

EPA Region 7 – Kansas City, Missouri

Iowa Department of Natural Resources

Iowa Finance Authority

Kansas Department of Health and Environment

Kansas Department of Administration

Kansas Rural Water Finance Authority

Kansas Development Finance Authority

Missouri Department of Natural Resources

Missouri Environmental Improvement

and Energy Resources Authority

Nebraska Department of Environmental Quality

Nebraska Investment Finance Authority

EPA Region 8 – Denver, Colorado

Colorado Water Resources and Power Development Authority

Colorado Department of Public Health and Environment

Colorado Department of Local Affairs

Montana Department of Environmental Quality

Montana Department of Natural Resources and Conservation

North Dakota Department of Health

North Dakota Public Finance Authority

South Dakota Department of Environment

and Natural Resources

Utah Department of Environmental Quality

Wyoming Department of Environmental Quality

Wyoming Office of State Lands and Investments

EPA Region 9 – San Francisco, California

Arizona Water Infrastructure Finance Authority

California State Water Resources Control Board

Hawaii Department of Health

Nevada Department of Conservation and Natural Resources

EPA Region 10 – Seattle, Washington

Alaska Department of Environmental Conservation

Idaho Department of Environmental Quality

Oregon Department of Environmental Quality

Washington Department of Ecology

C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

S TAT E A G E N C I E S T H AT M A N A G E C W S R F P R O G R A M S

14

STATE AGENCIES THAT MANAGE CWSRF PROGRAMS
EPA will pursue many activities during

2009 that focus on professional development, promoting effective management

and oversight, and expanding marketing

and outreach. Designed to provide CWSRF

staff with the resources they need to maximize program performance and to document and share best management

practices, these initiatives show EPA’s

commitment to the continued improvement

of the CWSRF programs.

O N G O I N G C W S R F I N I T I AT I V E S I N 2 0 0 8

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

15

New CWSRF

Initiatives

for 2009

PROFESSIONAL DEVELOPMENT

EPA is committed to providing CWSRF staff with the resources necessary for effective program management. In addition to holding

training workshops in five regions, EPA will implement several new

training tools in 2009:

New Employee Training Workshop

EPA is conducting a three-day training workshop for new federal employees, covering basic oversight of the CWSRF programs. Participants will be shown how to review core CWSRF documents,

including intended use plans and annual reports.The proper procedure

for conducting annual onsite reviews will also be covered. The training workshop will be held in Chicago, Illinois from May 5 - 7, 2009.

CWSRF Training Videos

EPA is developing a series of videos presenting basic programmatic information as well as more advanced topics. Basic CWSRF program

overview and CWSRF Benefits Reporting System training videos

were released in 2008. Additional videos planned for 2009 will cover

program structures, requirements, and documentation, as well as

strategic marketing.

CWSRF Financial Accreditation Program: Module II

The CWSRF Financial Accreditation Program is designed to ensure

that personnel are familiar with financial and statutory topics essential to the proper oversight and management of the CWSRF programs. Through a series of open book exams, the Accreditation

Program allows staff to enhance their skills as they relate to the financial requirements of the programs and practices commonly found

in the municipal finance industry. Module I was released in late 2007

and the intermediate level Module II is currently being developed.

Module II will include more advanced questions on cash draw rules

and reporting and auditing requirements, as well as subjects such as
municipal bond issuance and financial management and

planning. Module I and updates on the status of Module II

of the Accreditation Program can be found on the CWSRF

discussion forum at http://cwsrf.invisionzone.com.

EFFECTIVE MANAGEMENT AND OVERSIGHT

It is important to not only highlight examples of strategic

management and other best practices throughout the

CWSRF community, but to also provide effective oversight

of the programs. To this extent, EPA is developing:

CWSRF Standard Operating Procedures

EPA is creating a series of Standard Operating Procedures

(SOPs) which will outline the various components of the

annual EPA Regional review of state programs. The first

SOP, “Transaction Testing for Erroneous Payments,” was

released in 2008, and additional SOPs are expected in 2009.

SOPs are intended to streamline the review process for regional staff by establishing a clear set of guidelines for reviews. Additionally, SOPs will clearly explain to state

programs what is expected of them. Both measures will

make the annual review process more efficient, help ensure

state programs conform to CWSRF statute, and maximize

the use of program resources.

2009 CWSRF Conference

The CWSRF’s 2009 National Conference, “Strategic

Management of the Clean Water State Revolving Fund

Programs: The Next 20 Years,” is scheduled to be held in

Chicago, Illinois from July 14 - 15, 2009. The conference

will bring managers and senior staff from throughout the

country together to discuss CWSRF program strategic

management in an interactive discussion format. The conference will address management of CWSRF environmental and financial performance, and present practices

and solutions to enhance state efforts to address the nation’s current and future water quality problems. Meeting

materials will be made available as a resource for states to

use when considering the implementation of new management strategies. Potential topics to be discussed include:

• Major trends affecting the strategic direction of the

CWSRF programs.

• Progress and opportunities presented by stimulus funding.

• Opportunities in managing financial resources to meet

long-term water quality and public health goals.

• Positioning the CWSRF to play an effective role in integrated water quality planning and management.

• Utilizing data management and communication for

improved CWSRF outreach and marketing.

• Funding green infrastructure projects with the CWSRF.

• Issues and opportunities presented by potential CWSRF

reauthorization.

Updated information on the Conference, including registration details, can be found at: http://www.cwsrfconference.net.

EXPANDING MARKETING AND OUTREACH

Marketing and outreach are very important for the continued success of the CWSRF programs. For 2009, EPA will

assist these efforts by producing the following:

SRF’s Up Newsletter

SRF’s Up is a biannual newsletter presenting up-to-date program news and examples of state innovation. It is designed to

highlight new and creative practices, allowing states to learn

about what other CWSRF programs are doing. It is also a

great way to showcase the programs’ achievements in a format accessible to the general public. In 2008, two issues of

SRF’s Up were published, addressing the draft white paper,

program marketing, and strategic management and planning.

Additional issues are planned for 2009, with information on

topics such as the American Recovery and Reinvestment Act

of 2009 and the 2009 CWSRF Conference.

Activity Updates

CWSRF Activity Updates focus on financial or programmatic innovations being implemented in the CWSRF programs, and each includes several specific examples of states

that have successfully adopted these new strategies. They

are great resources for states that are looking to learn from

the successes of other CWSRF programs. Several new Activity Updates are planned for 2009, including one on mapping data in the CWSRF Benefits Reporting system.

FACT-Lite

The Financing Alternatives Comparison Tool (FACT) allows users to compare the annual and cumulative costs of

different financing options. In response to feedback, EPA

is improving FACT by adding Fact-Lite, an analysis option that simplifies this tool by reducing the amount of information users must enter to conduct a comparison. A

comprehensive user guide is also being developed.The new

version of FACT will be more accessible to small communities and will serve as an effective marketing tool by

demonstrating the cost savings of pursuing CWSRF financing when compared to funding alternatives. It is

scheduled to be released in the spring of 2009.

C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

O N G O I N G C W S R F I N I T I AT I V E S I N 2 0 0 8

16
A Continued Source of Project Financing

In 2008, the CWSRF programs funded over $5.8 billion in

projects, raising cumulative assistance to nearly $69 billion

over the last 21 years. This number is projected to continue

growing in the coming years, as interest earnings and repayments of outstanding loan principal increase, and states

with high demand continue to leverage by issuing revenue

and general obligation bonds.

Saving Communities Money

According to a popular municipal borrowing index, the average municipal borrowing rate was 4.6 percent in 2008.The

average CWSRF loan received a rate of 2.2 percent. This

means that communities that borrowed from the CWSRF in

2008 will save an average of 20 percent over the life of a typical 20-year loan. SRF interest rates continue to provide significant subsidies to communities across the country.

C W S R F 2 0 0 8 P E R F O R M A N C E H I G H L I G H T S

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

17

F I G U R E 6 | CWSRF Loans Save Communities 20 Percent

Market Rate*

0%

10%

20%

30%

40%

50%

60%

70%

80%

CWSRF Interest Rate

2.2%

4.6%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

* Market Rate is measured as the Bond Buyer Index for 20 Year, AA-Rated GO Bonds

F I G U R E 5 | CWSRF Cumulative Assistance Reached $68.8 billion through 2008

Cumulative Assistance

0

10

20

30

40

50

60

70

80

Billions of Dollars

Annual Assistance

$5.8

$68.8

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

CWSRF 2008 PERFORMANCE HIGHLIGHTS
Funding a Broad Range of Project Types

The CWSRF was designed to allow state programs the

flexibility to fund projects based on state water quality priorities. As a result, the CWSRF programs fund a wide

range of project types each year. In 2008, this included $2.7

billion for secondary and advanced treatment facilities, $2.9

billion for sewer construction, as well as more than $220

million for nonpoint source projects such as sanitary landfill and brownfield rehabilitation, hydromodification, urban

stormwater runoff management, onsite systems, and agricultural best management practices.

Serving Communities of All Sizes

The CWSRF programs provide funding to environmentally critical projects in small, medium, and large communities. In 2008, 62 percent of all assistance agreements were

made with communities of fewer than 3,500 people and

nearly $1.2 billion went to communities with populations

below 10,000. Large communities also received considerable funding, including nearly $2.5 billion for projects in

communities with populations of more than 100,000.

C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

C W S R F 2 0 0 8 P E R F O R M A N C E H I G H L I G H T S

18

F I G U R E 8 | Communities Served by CWSRFs in 2008

Dollar Amount of Assistance ($5.8 Billion) Number of Assistance Agreements (2,033)

37% 42%

11% 10%

100,000 and Above

10,000 to 99,999

3,500 to 9,999

Less than 3,500

11% 62%

19%

8%

F I G U R E 7 | CWSRFs Provide $68.8 Billion Clean Water Financing through 2008

Nonpoint Source and Estuary

4%

POTW

96%

1%

Stormwater/ Recycled Water

CSO

15%

Advanced

Treatment

18%

Secondary

Treatment

41%

SSO

12%

New Sewers

18%

POTW: Publicly Owned Treatment Works; SSO: Sanitary Sewer Overflow; CSO: Combined Sewer Overflow

Note: Chart on the right represents various POTW categories
Improving the Environment

Projected environmental benefits information is available for

$19.8 billion in CWSRF funded projects. This information

shows that these projects contribute significantly to the protection and restoration of rivers, lakes, and streams throughout the country. For example, over $13 billion went to projects

that positively affect aquatic life and wildlife, and nearly $6

billion funded projects that help provide clean water for industry, agriculture, and public drinking water supply.

Impacting Millions of Americans

The CWSRF Benefits Reporting System demonstrates that

CWSRF funded projects have improved water quality for

millions of Americans. This includes improved access to

water for recreational purposes for over 95 million people,

improvements to water that supports fish and shellfish for

consumption for 45 million people, and improved access to

clean drinking water for more than 33 million people.

C W S R F 2 0 0 8 P E R F O R M A N C E H I G H L I G H T S

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

19

F I G U R E 9 | Linking CWSRF Financing to the Protection and Restoration of our Nation’s Waters

Based on initial reporting of recent projects that account for approximately 29% of cumulative CWSRF financing.

$19.8 Billion in

CWSRF Loans

$7.0 Billion of

Cost Savings...

115 Million

People Served

Funding for Clean Water Act Goals

$14.1 Billion to improve water quality

$10.2 Billion to achieve compliance

$13.8 Billion to protect and restore aquatic

life and wildlife

$3.0 Billion to protect and restore drinking

water sources

$14.2 Billion to protect and restore

recreational uses

5,538 projects

financed

...to 2,262

communities

46.5 Billion

gallons per day

treated
Statement of Fund Activities

This statement provides an overview of major indicators of

fund activity, including the capitalization grant levels, project commitments, and project disbursements. Both annual

and cumulative data are given.

Statement of Revenues, Expenses, and Earnings

This statement describes the overall performance of the

CWSRF fund over the reporting period.

Statement of Cash Flows

This statement provides a detailed accounting of the actual

flow of cash into and out of the CWSRF fund.

Statement of Net Assets

This statement describes a fund’s assets and liabilities

through the end of the fiscal year. Assets include financial

assets and capital assets; liabilities include both current and

long-term liabilities. CWSRF fund assets include grant

funds that have been drawn from the federal treasury to

date, but do not include total grant awards.

Because the 51 constituent CWSRF programs are independent state-level entities, no nationally audited CWSRF

program financial reports are available. However, using

EPA’s National Information Management System, national

aggregate financial statements have been developed and are

included in the following pages. The statements are best

viewed as non-audited, cash flow-based financial reports.

C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

2 0 0 8 F I N A N C I A L P E R F O R M A N C E O V E RV I E W

20

FINANCIAL STATEMENT HIGHLIGHTS

• Total assets increased by $2.9 billion, a 5.3%

increase from 2007.

• CWSRF program equity (net assets) totals

$33.9, a 5.8% increase from 2007.

• Total program revenues exceeded expenses by

$1.9 billion, with interest earnings from loans

and investments totaling almost $1.7 billion.

• Loan principal repayments to the CWSRF were

$2.3 billion.

• Leveraged bond proceeds added more than $1.9

billion to program cash flow.

2008 Financial Performance Overview

The Clean Water Act requires an annual financial audit of the 51 state-level CWSRF programs. Each state and

Puerto Rico conducts these audits according to the generally accepted auditing standards established by the

Governmental Accounting Standards Board (GASB). States often define their CWSRF programs as ongoing enterprise funds under the GASB definitions of funds. The standardized financial statements used for CWSRF programs

include the following:
2 0 0 8 F I N A N C I A L P E R F O R M A N C E O V E RV I E W

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

21

CWSRF NATIONAL PERFORMANCE SUMMARY (Millions of Dollars)

Fund Activity 2008 2007

Annual Fund Activity

Federal Capitalization Grants 1,164.9 776.7

State Matching Funds 265.5 159.7

New Funds Available for Assistance 5,014.9 4,193.8

Project Commitments (Executed Loan Agreements) 5,835.7 5,336.3

Project Disbursements 5,525.6 5,095.4

Cash Draws from Federal Capitalization Grants 1,176.2 1,421.2

Cumulative Fund Activity

Federal Capitalization Grants 26,132.4 24,967.5

State Matching Funds 5,572.8 5,307.3

Funds Available for Assistance 70,135.8 65,120.9

Project Commitments (Executed Loan Agreements) 68,781.1 62,945.4

Project Disbursements 59,685.4 54,159.9

Cash Draws from Federal Capitalization Grants 24,791.6 23,615.4

Revenue, Expenses, and Earnings 2008 2007

Operating Revenues

Interest on Investments 733.1 765.3

Interest on Loans 956.8 919.3

Total Operating Revenues 1,690.0 1,684.6

Operating Expenses

Bond Interest Expense 1,010.1 980.3

CWSRF Funds Used for Refunding 135.5 117.1

Amortized Bond Issuance Expense 14.4 16.2

Administrative Expenses 44.0 43.0

Total Expenses 1,204.0 1,156.6

Nonoperating Revenues and Expenses

Federal Contribution 1,176.2 1,421.2

State Contributions 206.9 119.1

Transfers from (to) DWSRF (11.4) (12.7)

Total Nonoperating Revenues (Expenses) 1,371.6 1,527.6

Increase (Decrease) in Net Assets 1,857.6 2,055.6

Net Assets

Beginning of Year 32,088.2 30,032.6

End of Year 33,945.8 32,088.2

Note: Statement presents a compilation of reporting from 51 state programs and is not audited. Sum of individual values may not exactly equal the total due to

rounding error. 2007 data was revised from the 2007 Annual Report to incorporate updated state information. Source: EPA’s CWSRF National Information Management System (June 30, 2008).
C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

2 0 0 8 F I N A N C I A L P E R F O R M A N C E O V E RV I E W

22

Net Assets 2008 2007

Assets

Cash and Cash Equivalents 9,107.9 9,575.2

Debt Service Reserve - Leveraged Bonds 7,186.5 7,095.4

Loans Outstanding 39,799.9 36,573.8

Unamortized Bond Issuance Expenses* 293.2 288.5

Total Assets 56,387.6 53,532.8

Liabilities

Match Bonds Outstanding 572.5 582.7

Leveraged Bonds Outstanding 21,869.3 20,861.9

Total Liabilities 22,441.8 21,444.6

Net Assets

Federal Contributions 24,791.6 23,615.4

State Contributions 4,236.3 4,029.4

Transfers - Other SRF Funds (398.9) (387.5)

Other Net Assets 5,316.7 4,830.8

Total Net Assets 33,945.8 32,088.2

Total Liabilities & Net Assets 56,387.6 53,532.8

F I G U R E 1 0 | Net Worth of the CWSRF is increasing as Net Assets Grow Faster

Liabilities

0

10

20

30

40

50

60

Billions of Dollars

Net Assets

$33.9

$22.4

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Note: Statement presents a compilation of reporting from 51 state programs and is not audited. Sum of individual values may not exactly equal the total due to

rounding error. 2007 data was revised from the 2007 Annual Report to incorporate updated state information. Source: EPA’s CWSRF National Information Management System (June 30, 2008).

*Unamortized bond issuance costs that have been incurred but have not been fully recognized (amortized).

These costs will be recognized (amortized) over time over the remaining life of the bonds outstanding, similar to a pre-paid expense, and consistent with GAAP.
2 0 0 8 F I N A N C I A L P E R F O R M A N C E O V E RV I E W

2 0 0 8 A N N U A L R E P O RT C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S

23

Cash Flows 2008 2007

Operating Activities

Cash Draws from Federal Capitalization Grants 1,176.2 1,421.2

Contributions from States 206.9 119.1

Loan Disbursements Made to Borrowers (5,525.6) (5,095.4)

Loan Principal Repayments 2,299.4 2,364.2

Interest Received on Loans 956.8 919.3

Administrative Expenses (44.0) (43.0)

Total Cash Flows from Operating Activities (930.3) (314.6)

Noncapital Financing Activities

Gross Leveraged Bond Proceeds 1,966.5 1,931.7

Bond Issuance Expense (19.2) (18.3)

State Match Bond Proceeds 58.6 40.6

Cash Received from Transfers with DWSRF (11.4) (12.7)

Interest Paid on Leveraged and State Match Bonds (1,010.1) (980.3)

CWSRF Funds Used for Refunding (135.5) (117.1)

Principal Repayment of Leveraged Bonds (959.1) (1,180.4)

Principal Repayment of State Match Bonds (68.8) (81.9)

Net Cash Provided by Noncapital Financing Activities (179.0) (418.4)

Cash Flows from Capital and Related Financing Activities 0.0 0.0

Investing Activities

Interest Received on Investments 733.1 765.3

Deposits to Debt Service Reserve for Leveraged Bonds (91.2) (348.4)

Net Cash Provided by Investing Activities 642.0 416.9

Net Increase (Decrease) in Cash and Cash Equivalents (467.3) (316.1)

Beginning Balance - Cash and Cash Equivalents 9,575.2 9,891.3

Ending Balance - Cash and Cash Equivalents 9,107.9 9,575.2

Note: Statement presents a compilation of reporting from 51 state programs and is not audited. Sum of individual values may not exactly equal the total due to

rounding error. 2007 data was revised from the 2007 Annual Report to incorporate updated state information. Source: EPA’s CWSRF National Information Management System (June 30, 2008).
C L E A N WAT E R S TAT E R E V O LV I N G F U N D P R O G R A M S 2 0 0 8 A N N U A L R E P O RT

C W S R F AT A G L A N C E

24

CWSRF AT A GLANCE

2008 1988-2008

Total Funds 5.0 70.1

Federal Cap Grants 1.2 26.1

State Match 0.3 5.6

Net Leveraged Bonds 1.8 22.4

Net Loan Principal Repaid 1.3 11.7

Net Interest Earnings 0.5 5.7

Net Transfers with DWSRF (0.01) (0.4)

Less Administration (0.05) (1.1)

Number of Loans in 2008 = 2,030; Total = 22,700

Interest Rate in 2008 = 2.2% (Market = 4.6%)

As of 2008

Return on Federal Investment = 2.41 Times

SRF Assistance as % of Funds Available = 98%

27 States Leverage; 21 Issue Match Bonds

40 States Fund Nonpoint Source Projects

30 States Use Integrated Priority Setting Systems

48 States Conduct Separate Audits

40 States Fund Separate Grant/Loan Programs

Funds Available for Projects (Billions of Dollars)

2008 1988-2008

Total, Project Type 5.8 68.8

Wastewater Treatment 5.58 65.3

Nonpoint Source 0.22 2.9

Not Classified 0 0.6

Total, Population Served 5.8 68.8

< 3,500 0.58 7.3

3,500 – 9,999 0.62 8.2

10,000 – 99,999 2.14 23.2

100,000 and Above 2.50 30.1

Wastewater Treatment 5.6 65.3

Secondary Treatment 1.75 26.3

Advanced Treatment 0.93 11.8

SSO Correction 0.98 7.8

New Sewers 0.93 12.0

CSO Sewers 0.86 6.7

Storm Sewers 0.05 0.4

Recycled Water 0.08 0.3

Assistance Provided to Projects
For more information on the Clean Water State Revolving Fund Please Contact:

Clean Water State Revolving Fund Branch

U.S. Environmental Protection Agency

1201 Constitution Avenue, NW (Mailcode 4204M)

Washington, DC 20004

(202) 564-0752 Tel

(202) 501-2403 Fax

B E R C E S D E S I G N | w w w. b e r c e s d e s i g n . c o m

http://www.epa.gov/owm/cwfinance/cwsrf
OFFICE OF WATER | MARCH 2009 | EPA-832-09-001