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Water: Fed FUNDS

Overview of Federal Disaster Funding Programs

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Below are short descriptions of federal disaster funding programs from the Federal Emergency Management Agency (FEMA), United States Department of Agriculture (USDA), Environmental Protection Agency (EPA), Department of Housing and Urban Development (HUD), and Small Business Administration (SBA). The descriptions are followed by a table of eligible uses for each funding program, including planning, construction, operations and maintenance.

East Valley Water District

East Valley Water District in California obtained reimbursement of more than $400,000 from FEMA Public Assistance Grants for disaster response to the Old Fire in the San Bernardino National Forest in October 2003.

FEMA Public Assistance (PA) Grant Program
Following a Presidentially-Declared Disaster, FEMA's Public Assistance Grant Program provides supplemental federal disaster grant assistance for emergency and permanent repair, replacement, or restoration of disaster-damaged facilities. Emergency work includes debris removal and disposal and removal and demolition of unsafe structures. Permanent work includes repair, replacement, or restoration of disaster-damaged facilities to pre-disaster design. The program applies to publicly owned water and wastewater utilities or private nonprofit utilities (e.g., cooperatives), but does not cover private, for-profit drinking water or wastewater utilities.

The Public Assistance Grant Program requires matching funds from local and state governments. The federal share of assistance is not less than 75% of the eligible cost for emergency measures and permanent restoration. The grantee (usually the state) determines how the non-federal share (up to 25%) is split with the subgrantees (eligible applicants such as utilities).

As part of the Public Assistance Grant Program, FEMA would consider hazard mitigation proposals that would eliminate or reduce future damages similar to those that occurred during the current Presidentially-Declared Disaster. For example, for a Presidentially-Declared Disaster that flooded a culvert and washed out a road, FEMA would consider funding various mitigation measures including upsizing the culvert, increasing pipe capacity, or projects to redirect stormwater flow. Mitigation is a special consideration for permanent work projects in the Public Assistance Grant Program.

FEMA Hazard Mitigation Assistance (HMA) Program
FEMA's Hazard Mitigation Assistance (HMA) grant programs provide funding for eligible mitigation activities that reduce disaster losses and protect life and property from future disaster damages. Currently, FEMA administers the following HMA grant programs:

Portland Water Bureau
Portland Water Bureau

Portland Water Bureau obtained a $3 million mitigation grant from FEMA to make conduits more secure from landslides.

The HMGP provides grants to states and local governments to implement long-term hazard mitigation measures. The purpose of the program is to reduce the loss of life and property due to natural disasters and to enable mitigation measures to be implemented during the immediate recovery from a disaster declaration. Funds may be used to fund projects that will reduce or eliminate the losses from future disasters. Projects must provide a long-term solution to a problem.

The HMGP also requires matching funds from local and state governments. The federal share of assistance can fund up to 75% of the eligible project cost.

For a list of actual hazard mitigation projects that water and wastewater utilities have submitted and received hazard mitigation funding for from FEMA see Successful Mitigation Projects Submitted by Water/Wastewater Utilities.

Rebuilding a Damaged Water Tower
Rebuilding a Damaged Water Tower

When a tornado damaged a water tower in a rural community, USDA's Emergency Community Water Assistance Grants provided money to rebuild the tower.

USDA Rural Development Emergency Community Water Assistance Grants (ECWAG)
The Department of Agriculture can provide from $150,000 to $500,000 to assist a rural community that has experienced a significant decline in quantity or quality of drinking water due to an emergency, or in which such decline is considered imminent, to obtain or maintain adequate quantities of water that meets the standards set by the Safe Drinking Water Act. This emergency is considered an occurrence of an incident such as, but not limited to, a drought, earthquake, flood, tornado, hurricane, disease outbreak or chemical spill, leakage or seepage.

Repairing Hurricane Damage
Repairing Hurricane Damage

In 2009, the City of Galveston, Texas received a grant through EPA's DWSRF, which was used to finance repairs to the White Sands elevated storage tank, damaged by Hurricane Ike.

EPA Drinking Water State Revolving Fund (DWSRF)
EPA provides grants to states to support the Drinking Water State Revolving Fund, which provides low-interest loans to water systems for infrastructure improvements needed to protect public health and ensure compliance with the Safe Drinking Water Act. States may also reserve a portion of their grants (i.e., set-asides) to finance technical assistance to help utilities recover from disasters. Assistance could include assessing damages, identifying restoration needs, and locating/monitoring pollution sources. Funds have been used in flood and drought situations.

Flood Mitigation
Flood Mitigation

The City of Linwood, New Jersey will receive $2,183,362 through EPA's CWSRF to fund major stormwater drainage improvements, which will alleviate significant flooding in two watershed locations and ensure that storm water run-off discharging into the Patcong Creek is cleaner.

EPA Clean Water State Revolving Fund (CWSRF)
EPA also provides grants to the states in support of Clean Water Act requirements through low-interest loans or other assistance to publicly owned wastewater collection and treatment systems, stormwater systems, and nonpoint source pollution control and estuary management projects.

HUD CDBG and Section 108 Guaranteed Loans
Housing and Urban Development (HUD) Community Development Block Grants (CDBGs) are formula grants for entitlement communities. Also, CDBGs are provided to states for distribution to non-entitlement communities. Recipient communities must spend at least 70% of their funds for activities that benefit low- and moderate-income persons. Utilities have used these block grants to develop new water sources, improve treatment, and replace distribution system pipes. Communities can also receive aggregate loan guarantees equal to five times their CDBG entitlement amount.

SBA Disaster Loans
Through its Office of Disaster Assistance, the U.S. Small Business Administration (SBA) can provide low-interest, long-term loans to businesses and private nonprofits of all sizes following a disaster. This includes infrastructure assistance to private for-profit and private nonprofit drinking water and wastewater utilities to return infrastructure to its pre-disaster operability. These subsidized loans may be offered at below-market rates for a term of up to 30 years.

For examples of utility applications and forms related to federal disaster funding, see the Utility Examples Web page under the Utility Examples, Training, and Assistance button.

Each federal funding program will cover different uses, including planning, construction, operations and maintenance. The following table provides a quick look at the eligible uses under various federal disaster funding programs. Click the following link to access a printable copy of Eligible Uses of Selected Federal Disaster Funding for Response, Recovery, and Mitigation Efforts (PDF) (1 pg, 21K, About PDF).

Eligible Uses of Selected Federal Disaster Funding for Response, Recovery, and Mitigation Efforts
Program Emergency Repairs
(M, R)1
Planning and Design
Construction / Capitalization
(M, R)
Operation and Maintenance
Technical Assistance2
(M, R)
Applicable to Private-for-profit Systems
(M, R)
FEMA PA checkmark checkmark checkmark      
FEMA HMGP   checkmark     checkmark checkmark
EPA DWSRF checkmark checkmark checkmark   checkmark  
EPA CWSRF checkmark checkmark checkmark      
EDA Economic Assistance Programs   checkmark checkmark      
HUD CDGB checkmark   checkmark   checkmark  
HUD Section 108 Loan Guarantee     checkmark   checkmark  
SBA Disaster Loans checkmark   checkmark checkmark   checkmark
USDA ECWAG checkmark checkmark checkmark checkmark checkmark  
WRDA 92, Section 219   checkmark checkmark   checkmark  

1M = Activity is related to Mitigation; R = Activity is related to Response/Recovery

2Technical Assistance = May include activities undertaken to help utilities recover from disasters (e.g., providing assistance to assess damages and identify restoration needs).

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Additional Programs

Commerce EDA Economic Assistance Programs
The Department of Commerce's Economic Development Administration (EDA) offers assistance to rural and urban areas where unemployment is high and incomes are low, with a mission to "enhance community success in attracting private capital investment and lucrative job opportunities." EDA assistance can help communities that are in economic decline upgrade their physical infrastructure, including drinking water and wastewater facilities.

FEMA Special Community Disaster Loan Program (SCDL)
FEMA operates the Special Community Disaster Loan Program, which is available to local governments that must provide for the operation of essential public services (e.g., public water/wastewater utilities). The program provides funds to any eligible jurisdiction in a designated disaster area that has suffered a substantial loss of tax and other revenue. A state's Governor requests a Presidential declaration of an emergency or major disaster through the FEMA Regional Director. An applicant should consult the office or official designated as the single point of contact in the state for more information on the process the state requires to be followed to apply for assistance. Upon declaration of an emergency or major disaster, one may apply for assistance through the Governor's authorized representative.

Flood Control, USACE and USDA Natural Resource Conservation Service (NRCS)
Permanent repair of flood control works is the responsibility of the U.S. Army Corps of Engineers (USACE) and the NRCS. The NRCS provides technical and financial assistance to resource owners who implement conservation practices and management strategies, including the restoration and protection of wetlands, that benefit water quality and improve water management.

Water Resources Department
Section 219 of the Water Resources Development Act of 1992 (WRDA92), Environmental Infrastructure, as amended, authorizes the Secretary of the Army to provide assistance to non-federal interests for carrying out water-related environmental infrastructure and resource protection and development projects, including wastewater treatment and related facilities, water supply, storage, treatment, and distribution facilities. Such assistance may be in the form of technical, planning, and design assistance as well as construction assistance for defined projects and locations with specific amounts authorized for each location. A non-federal cost share of not less than 25% is required for all assistance under Section 219.

Internal Revenue Service (IRS)
Special tax law provisions may help businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. Depending on the circumstances, the Internal Revenue Service may grant additional time to file returns and pay taxes. Below are several IRS publications that businesses should review for information related to tax relief provisions provided by the IRS.

For more information related to disaster recovery and IRS assistance, please contact the IRS or a licensed tax professional.

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