Blog  /  September 2017  /  Top 10 Sources of Disaster Recovery Funding for Water Utilities

Blog Post Teaser

Harvey and Irma set the stage for a busy, catastrophic hurricane season.  The cost to repair the damage from just these two hurricanes is predicted to exceed $300 billion.  Dealmakers in Washington paved the way for the first phase of emergency funding and relief last week.  This article profiles the main sources of Federal disaster funding for drinking water and wastewater systems, offers examples of bridging programs, and highlights a few online tools to find additional resources to fund water infrastructure rehab.

 

Government Funding Sources:

There are five (5) main government sources of disaster funding to rebuild drinking water and wastewater systems.  All are funded in the annual appropriations cycle.  It is important to note that utilities will need to compete with other programs for access to these grants. And most of these grants will be allocated at the state level.

  1. The Federal Emergency Management Agency (FEMA) has two programs that are applicable: Public Assistance grants that are part of the $4.7 billion in the 2017 Omnibus Budget Act and Pre-Disaster Mitigation grants, which received $90 million.
  1. The Environmental Protection Agency (EPA) has about $2.2 billion in its Clean Water and Drinking Water State Revolving Funds to support utilities rebuilding after disasters.
  1. The US Department of Housing and Urban Development (HUD) received $400 million for Community Development Block Grants for disaster recovery for events occurring in 2015, 2016, and 2017.
  1. The Small Business Administration (SBA) received $186 million this year to provide disaster loans to businesses of all sizes. This is the only Federal program that private-for-profit utilities have access to.
  1. The US Department of Agriculture (USDA) received $392 million this year for water and wastewater grants.  Congress also approved an additional $28.7 million specifically for farmers and ranchers to repair damage to farmlands from natural disasters.

The process to apply for grants and loans from the government can sometimes take a long time.  The EPA has published a guide for water utilities on how to prepare their organization to apply for Federal funds after a disaster.

 

Bridging Funding Solutions: 

After a disaster strikes and damage is assessed it takes time to apply for and receive federal recovery funds.  Most agencies have strict compliance procedures, requirements, and timelines to apply for these grants.  If a utility’s cash reserves are not sufficient to meet the immediate need to quickly get operations up and running following a disaster, a bridge loan can fill the gap.  Securing a market rate loan from a commercial or development bank is a popular option.  Here are three (3) more bridge loan sources to jump start recovery projects.

  1. In response to the damage created by Superstorm Sandy, David Zimmer, the Executive Director of the New Jersey Environmental Infrastructure Trust, created the Statewide Assistance Infrastructure Loan (SAIL) program.  SAIL is a short-term disaster relief loan program that is basically an advance on FEMA payments. The program provides bridge loans for up to three (3) years.  So far, the program has funded 13 projects totaling $700 million.  This is a best practice solution other communities can follow in order to provide ready cash following a disaster.
  1. The National Rural Water Association has a revolving loan fund for its member utilities.  “The Rural Water Loan Fund (RWLF) is a funding program specifically designed to meet the unique needs of small water and wastewater utilities.”  It provides low-cost loans for small capital projects, equipment replacement, energy efficiency, and disaster recovery.
  1. Infrashares.com, the crowd-financing platform for public infrastructure, enables short-term debt or donation solutions for utilities seeking bridge financing ahead of federal recovery grants.  This platform connects project owners and utility stakeholders to accredited investors and donors for direct investment or sponsorship.  The platform provides financial and social rewards since the donations can be used right away for immediate relief needs.

 

Other Funding Sources:

For those utilities that are looking for other sources of money for their capital improvement projects, here are two repositories of several options.

  1. SplashLink has hosted over $10 billion in capital opportunities from both traditional and atypical funding sources.  With daily updates from a wide range of international sources, SplashLink is able to bring together money from federal, regional, state, and local government, non-profits, private foundations, NGOs, banks, and investors of all kinds.  In fact, all of the other options on this list can be accessed through the SplashLink portal.
  1. This summer, the EPA Water Infrastructure Finance and Resiliency Center launched the Water Finance Clearinghouse.  The Water Finance Clearinghouse has searchable information and resources for planning and funding a community’s drinking water, wastewater, and stormwater infrastructure needs.

For more information about the programs highlighted in this summary of Disaster Recovery Money for Water Utilities please follow the links below.  The best way to recover from a disaster is to plan for it.  Please also check out the list of disaster planning and preparedness guidance for water and wastewater utilities.

Be safe America. And make good choices.

Disaster Preparedness and Response Information:

 

Disaster Recovery Funding for Water Utilities

 

References:

2017 Omnibus Appropriations Act:

Federal Programs for Disaster Recovery:

Hurricane Damage Estimates:

Acknowledgements:

  • James Gebhardt, EPA Water Infrastructure Finance and Resiliency Center
  • Bryant Jenkins, Sperry Capital
  • Brian Ross, Infrashares
  • Jason Wuliger, SplashLink

 

About Arthine Cossey van Duyne

Arthine is a Managing Partner at WaterFunder, LLC and Mid-Market Securities. She has an MBA from IMD in Switzerland and has 15+ years experience helping Internet and Fintech companies plan and execute their global growth strategies.

In 2007, following a growing passion for keen innovations in water, she began mentoring water technology companies with nanomaterial solutions for wastewater treatment and desalination. She guided these teams through early-stage fundraising and pilots.  As the landscape for US clean tech investment shifted, she included Project Finance pathways for these startups.

In 2015, Arthine launched WaterFunder, LLC, an advisory and consulting firm aimed at closing the development and investment gap in North American and Caribbean water infrastructure.  Currently she is helping water and sewer utilities accelerate capital improvement projects with design-build delivery and affordable direct investment from impact investors.