Clean Water State Revolving Fund

Program Criteria: How projects are selected
Total Stimulus Appropriation: $4 Billion [1]
New Jersey’s Portion: $160,146,855 [2]
Allocation Method: New Jersey received its share based on a Federal Formula.

[1] Estimate from the Federal Funds Estimate for States
[2] Estimate from the Federal Funds Estimate for States

Program Overview
The Clean Water State Revolving Fund provides loans to finance a wide variety of projects that help to protect, maintain and improve water quality in New Jersey. The loans are generally awarded to municipalities, counties and utility authorities for actions related to improving water quality in the State. The stimulus funds represent a 500% increase over direct funding typically received and will create approximately 6000 jobs.

Financing is provided from two sources, the New Jersey Department of Environmental Protection and the New Jersey Environmental Infrastructure Trust (the Trust). Under the traditional Program structure, the Department provides loans at 0% interest for approximately 20 years for either one-half or three-quarters of the allowable project costs. The Trust sells bonds and offers loans at the market rate or less for the remaining allowable project costs, also for a 20‑year term. Between these two funding sources, the interest rate on the loans is essentially one-quarter to half the market rate, saving towns and utility authorities millions of dollars a year. Projects that qualify for the ARRA Program can receive grant-like funding for up to 50% of the project costs, an interest-free loan for up to 25% of the projects costs, with the remainder financed at market rate through the sale of Trust bonds.

Federal Requirements and Restrictions
Funds can be redistributed by the U.S. Environmental Protection Agency (EPA) if projects are not under contract or construction within one year.

Priority shall be given to projects on a State project list that are ready to proceed to construction within 12 months of the date of enactment of the American Recovery and Reinvestment Act.

Each State shall use at least 50 percent of the funds to provide additional subsidization in the form of forgiveness of principal, negative interest loans, grants, or any combination thereof.

Not less than 20 percent of the Funds should be available for projects consisting of green infrastructure; water or energy efficiency improvements or other environmentally innovative activities (to the extent that such projects are available for funding).

No funds may be used to purchase land or easements.

Funds may be used to buy, refinance or restructure debt obligations of eligible recipients only where such debt was incurred on or after October, 1 2008.

Project Prioritization
Initially, projects using federal stimulus dollars were prioritized by readiness to proceed and ranked in accordance with the current NJDEP’s Priority System ranking methodology. Projects receive points under several categories and are certified for funding based on list rank, amount of available funds, and compliance with requirements and deadlines for planning, design and application. Such categories include the type of project discharge (combined sewer overflow, sewage treatment plant, stormwater, landfill closure, etc), state plan designation, population and other factors. The more traditional wastewater treatment plant improvement projects receive the highest points. These criteria are established each year through a public process with prospective borrowers (mainly municipalities, counties and authorities).
Important Program Dates
December 2008 - The DEP issued a “Call for Projects” in anticipation of the approval of some form of economic recovery package at the federal level. Prior to the issuance of the “Call for Projects”, the DEP was already working with nearly 100 projects following the traditional schedule for 2009 financing that submitted information to us in October 2008. The response to the “Call for Projects” has been overwhelming with more than 200 additional projects seeking to be qualified under a potential economic recovery act.

March 16, 2009 - Projects that wished to be considered for stimulus dollars were asked to submit all planning, design and application information no later than March 16th, 2009 to ensure timely review and submittal of the required project list to EPA.

May 14, 2009 -The Department submitted its grant application for $160,146,855 to

USEPA for review and approval.

May 28, 2009 -The Department begins posting weekly status of projects reviews on its web pages.

June 17, 2009 - The Department issues its first Authorization to Advertise for ARRA Clean Water projects.

July 10, 2009 - The Department submitted a Project List and a final Intended Use Plan for ARRA funds to EPA for approval.

August 2009 -– Governor Corzine signs the Program legislation to provide principal forgiveness loans with CWSRF monies, to authorize the receipt of the federal ARRA funds and to allocate ARRA monies to projects.

February 17, 2010 - All funds awarded to the State must be committed to projects under contract or construction. Otherwise, the EPA Administrator has the authority re-appropriate the funds.

For more detailed information please visit the New Jersey Department of Environmental Protection’s website at:

Frequently Asked Questions
Q1. What is the Environmental Infrastructure Financing Program (EIFP)?
A1. The EIFP includes the Clean Water State Revolving Fund (SRF) and Drinking Water SRF Programs, and other funds established under State bond acts. Through these programs, borrowers can receive low-cost financing for projects that protect water quality and improve drinking water facilities.  Borrowers participating in the traditional program generally receive their loan in two equal parts: Approximately half comes from the Clean Water or Drinking Water Funds maintained by the Department of Environmental Protection. The other half comes from the proceeds of highly rated tax-exempt revenue bonds sold by the Trust. The DEP loan is interest-free - the Trust loan carries the same interest rate the Trust obtains when it sells its bonds. The result to the borrower is a loan with half the interest rate of traditional financing.

Q2. How much funding does NJ expect to receive from the ARRA?
A2. The ARRA provides $4 Billion for the Clean Water SRF Program and $2 Billion for the Drinking Water SRF Program nationally.   New Jersey anticipates receiving approximately $160 million for CWSRF activities and about $43 million for DWSRF activities.

Q3. What types of projects are eligible for ARRA funding?
A3. The following types of projects are eligible for ARRA funding:
  • Drinking Water - public and privately owned drinking water systems and nonprofit, noncommunity water systems.
  • Clean Water - publicly owned wastewater treatment projects, nonpoint source pollution control projects, and brownfields remediation.

Q4. How will projects be selected for funding from the ARRA?
A4. AARA requires that the funded projects have contracts awarded or be under construction by February 17, 2010.  Thus, only projects that can meet this deadline will be considered.  All such ready projects will them be ranked in accordance with the existing priority system used for the traditional SRF funding program.

Q5. Who is eligible?
A5. Financing program eligibility is limited to municipal and county governing bodies; municipal, county and regional water, sewer and utility authorities; county improvement authorities, certain state authorities and private water purveyors.

Q6. Does the Program offer any grants?
A6. Historically, the EIFP has only provided financial assistance in the form of loans.  The ARRA requires states to use at least 50% of the ARRA to provide additional subsidy in the form of grants, principal forgiveness or negative interest loans.  Grants or grant-like financial assistance will be available for projects that qualify for ARRA monies.

Q7. What is the application deadline to be considered for ARRA funding?
A7. Sponsors of projects listed or eligible for listing on the Clean Water or Drinking Water Priority Lists must submit complete planning, design and loan application no later than March 16, 2009 to be considered for ARRA financing.