Colorado's Drinking Water Revolving Fund
The 1996 amendments to the federal Safe Drinking Water Act (SDWA) allowed for states to create federally-funded State Revolving Fund (SRF) programs for financing drinking water projects. Colorado was the first state in EPA's Region VIII to develop a Drinking Water Revolving Fund program (DWRF), and request funds from EPA.
The DWRF is structured in a fashion similar to the existing Water Pollution Control Revolving Fund (WPCRF) and is jointly administered by the Colorado Water Resources and Power Development Authority (the Authority), the Department of Public Health and Environment Water Quality Control Division (WQCD), and the Department of Local Affairs Division of Local Government (DLG).
Local governments in Colorado are eligible for "direct loans" up to $1,000,000 with a fixed interest rate of 3.5 percent, or "leveraged loans" for more than $1,000,000 with interest rates calculated at 80 percent of the Authority's municipal bond rate. The terms for these loans are up to 20 years. To be eligible for funding, projects must be included on the Drinking Water Project Eligibility List (PDF) which is developed annually for the Colorado Board of Health, and adopted in a joint resolution by the General Assembly.
For disadvantaged communities, a new loan program was started January 1st, 2005. This program provides 1.75% or 0% interest interest rate loans, depending on a community's median household income. See the attached fact sheet for more information.
In addition to making construction loans, the state has been using "set-aside" funds designated for certain activities related to drinking water protection. These activities include technical assistance for small systems, source water assessment and delineation, and technical, managerial and financial capacity development services for small systems. Specific use of the set-asides have been identified in the "Intended Use Plan" (IUP) which outlines the goals for the DWRF.