Tapping into Lead Service Line Funding Opportunities
Replacing a single lead service line (LSL) typically costs between $5,000-10,000 for both the public and private side. Costs quickly escalate when including other aspects of LSL replacement programs like distributing filters, implementing corrosion control, and community outreach. Removing LSLs requires a strategic combination of private, federal, and local funding sources—especially because many public funds cannot be used to offset costs on the private side of the service line depending on what state your utility is in.
Below are some key funding and financing resources to help get you started.
There are several federal funding sources for LSL-related projects available, learn more about the top funding sources below. We will keep this section updated as new infrastructure bills or federal programs are announced.
Community Development Block Grants (CDBG) are administered through the U.S. Department of Housing and Urban Development (HUD). These grants are distributed on a national level to municipalities and organizations, especially those with low to moderate income.
The federal Water Infrastructure Improvements for the Nation (WIIN) includes grant funding for reducing lead in drinking water in disadvantaged communities under the Reducing Lead in Drinking Water Grant Program. The 2020 grants have already been announced, including initiatives for schools and childcare facilities. Additional grants are anticipated to be available in 2021 and working on your grant application now is a good idea to help make your case for funding.
The Assistance for Small and Disadvantaged Communities Drinking Water Grant Program is also administered under the WIIN Act. States are able to apply for this program on behalf of underserved communities. EPA will award approximately $42.8M in grant funding on a rolling basis to eligible entries before June 30, 2021.
The EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) was established in 2014 and has funded $7.2 billion in credit assistance to fund water infrastructure projects. Reducing exposure to lead is currently one of the key focuses. These loans have long repayment windows and can be combined with other bonds, grants, and loans.
In 2020, the $5.5B funding total included up to $1B for state water infrastructure projects under the new state infrastructure financing authority WIFIA (SWIFIA) program. The SWIFIA program provides long-term, low-cost supplemental loans for regionally and nationally significant projects with a minimum cost of $20M for most communities and $5M for communities with a population of 25,000 or less. WIFIA loans can finance up to 49% of the total project cost. WIFIA is not currently offering grants at this time.
Healthy Communities Grant Program (Region 1: New England only)
Launched in 2003, the EPA’s Healthy Communities Grant Program was established to protect and improve human and environmental health in New England. Eligible applicants include state and local governments, public nonprofit institutions/organizations, private nonprofit institutions/organizations, quasipublic nonprofit institutions/organizations, federally recognized tribal governments, K-12 schools or school districts, and non-profit organizations. Funding is available on an annual basis and is capped at $35,000 per project.
USDA Rural Development Program
The U.S. Department of Agriculture (USDA) Rural Development Water & Waste Disposal Loan and Grant Program provides rural communities with populations under 10,000 people financing to support drinking water, sewage, solid waste, and stormwater infrastructure projects including LSLR.
EDA Public Works and Economic Adjustment Assistance Programs
The U.S. Department of Commerce Economic Development Administration (EDA) offers Public Works and Economic Adjustment Assistance Programs to support both economic development infrastructure improvements in distressed communities. These programs include CARES Act Funding which is accepting rolling applications until September 2022 with awards ranging from $100k to $30M. Contact your respective EDA Regional Office representatives to discuss their need and availability of funding.
Drinking Water State Revolving Fund (DWSRF) established by EPA has provided states with $20B in funding since its inception. The DWSRF program offers low interest loans with an extended payback period that can be applied to LSLR programs. These programs typically have funding specific for lead service line replacements with incentives such as principal forgiveness for a percentage of the loan.Specific programsSeveral states across the U.S. have specific programs to help fund lead-related projects—below are some examples. Other states may not have specific or official LSLR grant programs, but that does not mean there is not funding available.
- Minnesota modified its existing Drinking Water Revolving Fund Program to allow for principal forgiveness grants for LSL replacement on private property.
- In 2018, Michigan's Department of Environment, Great Lakes, and Energy (EGLE) revised the state's Lead and Copper Rule to accelerate replacements across the state and also awarded 18 communities $9.5 million in grants to develop LSL inventories and replacement plans.
- New Jersey's Governor proposed an updated statewide plan to combat lead exposure which included a $500 million bond in 2019.
- In 2017, New York’s Governor released a state LSL replacement grant program backed with $20 million in funding and announced a second round of funding for $10 million two years later.
- Pennsylvania enacted legislation in 2017, which gave municipalities the authority to replace or remediate private water lines using public funds.
- The Indiana Finance Authority, launched a Lead Line Replacement Incentive to support full replacement of LSLs and galvanized pipe service lines in 2018.
- The Massachusetts Clean Water Trust and the Department of Environmental Protection, announced the Incentivized Lead Service Line Replacement Program in 2018 which includes replacing LSLs on private property and reducing interest rates to as low as 0%.
- In February 2018, Wisconsin released a Private Lead Service Line Program that allowed municipalities and water utilities to provide financial assistance to property owners to replace LSLs on private property.
- Using state funding, the Virginia Department of Health established a LSL Replacement Rebate Program for full removal of LSLs in 2017.
In addition, once you know the scope and cost of your program, consider reaching out to local foundations to request donations or grants. Since lead in drinking water is a high-profile concern, locally focused foundations may be interested in providing funding and supporting community efforts. Systems can also be developed to allow for individual donations. For example, Springfield, Illinois has a program that allows residents to round up their water bills to fund LSLR for low-income properties and Cincinnati, OH has a “Thirsty Thursday” program where local breweries donate a portion of their proceeds to fund LSLR projects.
More than Funding
There's more to funding than submitting applications and receiving awards. It's important to first calculate order-of-magnitude costs for replacements and establish an accurate inventory of lead service lines before developing a funding strategy. Additionally many funding agencies have extensive conditional requirements tied to grants and financing options.
Having successfully supported 200+ communities in securing more than $3.4 billion in grants and SRF loans, we're available to help guide you through the process, prepare the full application and work directly with the funding agencies. Assisting with the funding and financing process also allows us to maximize time and resources to keep your project on or even ahead of schedule. Contact us today.