State of Illinois
Water Pollution Control Loan Program
Supplemental Intended Use Plan Pursuant to the
American Recovery and Reinvestment Act of 2009
Final Intended Use Plan
A. Introduction
The purpose of this Intended Use Plan (IUP) is to fulfill the requirements of Section 606(c) of
Title VI of the Water Quality Act of 1987 which amends the Federal Clean Water Act (CWA)
and the American Recovery and Reinvestment Act of 2009 (ARRA) as a prerequisite for award
of a federal grant to the Illinois Environmental Protection Agency (Agency) for capitalization of
the State Revolving Fund from funds provided under the ARRA for use in the Water Pollution
Control Loan Program (WPCLP).
The IUP requirements under the ARRA and CWA are as follows:
1. A list of the projects proposed for construction on the State Priority List, including a
description of the project and the expected terms of financial assistance;
2. A description of the short and long term goals associated with ARRA funding, existing
loan funds and the WPCLP;
3. A description of the financial status of State loan funds, along with assurances and
specific proposals for meeting certain requirements of the ARRA and capitalization grant
agreements; and
4. The criteria and methods established for the distribution of funds.
In addition, the ARRA provides that “notwithstanding the priority they would otherwise
receive…..priority for funds appropriated…shall be given to projects on a State priority list that
are ready to proceed to construction within 12 months of the date of enactment of this Act.” In
practice, projects on the State Priority List will be further and primarily prioritized based on
readiness to proceed to construction, with factors influencing the Green Project Reserve and the
provisions included in the Procedures and Requirements for Determining Loan Priorities for
Municipal Wastewater Treatment Works as contained in 35 Ill. Adm. Code Part 366 considered
to the maximum extent practicable.
This IUP will serve as a planning document for explaining the activities that are anticipated for
ARRA funding.
B. Long Term Goals (5-Year Timeframe)
1. To provide a stable and perpetual financing source for POTWs and collection systems in
the State and to commit all available loan resources to these eligible loan applicants;
2. To provide financing for municipal wastewater treatment facilities to attain and maintain
compliance with State and federal wastewater treatment requirements;
3. To provide financial assistance to all types of projects eligible under the Clean Water Act
and the State enabling legislation;
4. To provide financial assistance to local government units at interest rates significantly
below those offered on the open market;
5. To maintain the integrity of the Water Revolving Fund;
6. To continue the development of the Fund as a major financial vehicle for achieving
compliance with State and federal law, to explore the expansion of eligibility to address
issues of water efficiency, energy efficiency, green infrastructure and non-point source
pollution projects and to develop new eligibility requirements to accommodate expanded
eligibilities in the base SRF program; and
7. To contribute to the long-term recovery of the economy by creating and preserving
sustainable jobs in communities across the state.
C. Short Term Goals (ARRA/FY2009)
1. To provide funding to all eligible projects, to the extent that applications are completed
and funds are available;
2. To commit all available loan resources to eligible loan applicants;
3. To provide total additional loan subsidization to loan recipients in an amount not less
than 50% of total supplemental funds provided under the ARRA;
4. To provide support for projects or project components focused on “green infrastructure,
water or energy efficiency improvements or other environmentally innovative activities”,
and to commit not less than 20% of supplemental funds provided under the ARRA to
projects meeting the definitions developed there under; and
5. To manage a program that provides applicants with a streamlined approach to financing
wastewater treatment works projects, consistent with time constraints imposed for the use
of ARRA funds.
6. To provide funding to projects that will maximize job creation and economic benefit in
communities across Illinois.
D. Program Characteristics
1. Water Pollution Control Loan Program – The Illinois program will continue to consist of
loans to units of local government for construction of new wastewater collection and
treatment facilities, upgrade and expansion of existing facilities, replacement, upgrade or
extension of collection systems and interceptors, and separation or upgrade of combined
sewer systems to eliminate surcharges, overflows or flooding.
Monies available through supplemental appropriations provided under the ARRA will be
managed separately as a “program within a program” under emergency rules established
to govern the distribution of those funds. Loan recipients shall repay loans provided at a
fixed loan rate of 0.0%, and 50% of the principal disbursed under the respective loan
agreements will be forgiven, pursuant to additional subsidization requirements contained
in the ARRA. The funding provided under the ARRA to any single entity will be limited
to 50% of eligible project costs, or $10,000,000, whichever is less.
Existing WPCLP loan funds for FY2009 will be utilized in conjunction with loans
provided under the ARRA to provide additional financing opportunities, subject to the
availability of funds, for projects limited by funding eligibility caps established for
ARRA program funds. These existing loan funds will be directed to ARRA projects for
costs over and above ARRA cap levels: (50% of costs up to $10,000,000). Loan
recipients shall repay WPCLP loans committed separate from, or in conjunction with, an
ARRA loan agreement at a fixed loan rate of 0.0% until such time as supplemental funds
provided under the ARRA are exhausted. The IEPA intends to commit all ARRA
funding by September 30, 2009 and expects a transition back to standard interest rates in
the FY 2010 program. There will be no midstream interest rate adjustments in the
ARRA/WPCLP program.
Loan awards have a maximum term of 20 years from the initiation of operation, with
initial repayments of principal to commence within one year of the initiation of operation
as determined by the terms of each Loan Agreement.
2. Leveraged Bond Proceeds – The resources of the WPCLP may be utilized as security for
the sale of bonds, the proceeds of which would be deposited into the Fund to supplement
State and federal capitalization funds and repayment funds, or to serve as the source for
State matching funds for federal capitalization grants in future years.
E. Assurance of Specific Proposals
Pursuant to Section 606(c)(4) of the CWA, the IEPA has provided the necessary
assurances and certifications as part of the official Operating Agreement between the
IEPA and USEPA and as part of the FY 2009 Intended Use Plan.
Pursuant to the American Recovery and Reinvestment Act of 2009 (ARRA), the IEPA
provides additional certification as follows:
1. The IEPA will enter into binding commitments equal to 100% of the amount of funds
provided under the ARRA within one year of the date of enactment of the ARRA
(February 17, 2010). Binding commitments will be executed at such times as to assure
that projects funded are under contract or construction within 12 months from the date of
enactment of the ARRA (February 17, 2010).
2. The IEPA will utilize not less than 50% of supplemental funds provided under the ARRA
to provide additional loan subsidization, in the form of principal forgiveness terms, to
loan recipients and hereby certifies that State legislation passed by the Illinois General
Assembly on April 28, 2009 (Public Act 96-8), in conjunction with emergency
administrative rules filed by the IEPA and effective on June 2, 2009 (35 IAC, Part 369),
will provide adequate authority to execute such principal forgiveness terms within a
timeframe adequate to implement the terms of assistance under the PWSLP.
3. To the extent that there are sufficient eligible applications, the IEPA will utilize not less
than 20% of supplemental funds provided under the ARRA for the “Green Project
Reserve” as required by the Act, and will provide binding loan commitments to projects
or project components focused on “green infrastructure, water or energy efficiency
improvements or other environmentally innovative activities” under definitions
developed for this purpose by the USEPA. The IEPA is currently evaluating projects on
the State Priority List (Attachment A) and other projects that may gain eligibility for
inclusion on the State Priority List to determine which ones qualify, in whole or in part,
to be included in the Green Project Reserve. This includes the evaluation of stand-alone
applications that have been received to determine eligibility. If the 20% reserve cannot
be accommodated by eligible applications received, the IEPA will continue to solicit
additional applications, as necessary, until the 20% target for the Green Project Reserve
is met.
4. The IEPA will comply with all statutory requirements of the ARRA and with
requirements promulgated through guidance or regulations issued by the USEPA,
including wage requirements and procurement requirements specifying the use of goods
produced in the United States for infrastructure projects financed through the ARRA.
5. The IEPA will expend all monies available under the ARRA and WPCLP in an
expeditious and timely manner.
F. Criteria and Method for Distribution of Funds
1. Financial Assistance Limitation – Under emergency rules established to govern the
distribution of ARRA funding amounts, the State of Illinois will restrict the amount of
ARRA financial assistance provided to any single entity to a maximum of 50% of eligible
project costs, or $10,000,000, whichever is less. This regulation reflects the intent of the
State to fund as many worthwhile projects as practicable from the limited available
resources.
Notwithstanding financial assistance limitations imposed under ARRA regulations,
project costs above those limitations will be eligible for assistance under the existing
WPCLP as funds are available. In those instances where total project needs exceed the
limitations of available funding, applicants will be encouraged to break a project into
multiple segments for phased loan assistance, constructing first those project elements
most significant in attaining or maintaining compliance objectives and reserving
eligibility for future years as loan funds become subsequently available.
2. State Priority List Development - The State Priority List (Attachment A) identifying
eligible applicants for assistance under this Intended Use Plan and the ARRA is
submitted as a component of this IUP. The State Priority List is based on and includes
all projects that appear on the previously established FY2009 Project Priority List (PPL),
plus any project with approved project planning that was added to the FY2009 PPL
pursuant to State rules. All projects currently appearing on the State Priority List have
been ranked and scored in accordance with the provisions of 35 Illinois Administrative
Code Part 366, “Procedures and Requirements for Determining Loan Priorities for
Municipal Wastewater Treatment Works”. The State Priority List scores and ranks
projects within four project categories, including: Service Continuation Projects that
improve, upgrade, rehabilitate, renovate, and/or replace wastewater treatment works;
Service Expansion Projects that propose to expand the capacity of existing wastewater
treatment works; New Service Projects which will provide wastewater collection,
transportation and treatment for an unsewered local government unit; and Combined
Sewer Service Projects involving construction in a combined sewer service area to reduce
or eliminate basement flooding.
3. A subset of the State Priority List (Attachment A) is incorporated as the IUP List
(Attachment B) for purposes of this Intended Use Plan. Projects included on the IUP List
are simply those that have the highest priority rank relative to other eligible projects
within the limits of available funds allocated to each project class and currently
qualifying pre-applications. In accordance with the provisions of 35 Illinois
Administrative Code Part 365, “Procedures for Issuing Loans from the Water Pollution
Control Loan Program”, and the emergency rules established to govern the
implementation of ARRA programs in Illinois (35 IAC, Part 369), loan funds will not be
reserved for projects included on the State Priority List or the IUP List after April 1, 2009
until they are ready to proceed to construction based on the completion of all applicable
loan applicant elements. Funds may be awarded to any project on the State Priority List
that accomplishes a full and complete loan application, and projects will be funded in the
order in which applications are completed, with factors influencing the Green Project
Reserve and provisions included in the Procedures and Requirements for Determining
Loan Priorities for Municipal Wastewater Treatment Works as contained in 35 Ill. Adm.
Code Part 366 considered to the maximum extent practicable in cases where funding
availability may be limited. The IEPA reserves the right to bypass eligible projects as
required to meet the 20% Green Project Reserve requirement as set forth in federal law.
4. Per State rule (35 IAC, Part 366), a project may be added to the State Priority List
(Attachment A) at any time during the year upon obtaining Agency approval of its
Facilities Plan, provided a pre-application was submitted for the project on or before
April 2, 2009 that indicates a construction start date in calendar year 2009. Eligible
projects with approved Facilities Plans will be scored and ranked for priority and added
to the State Priority List from time to time, with up-to-date copies of the priority list
posted on the IEPA website at http://www.epa.state.il.us/water/financial-assistance/
economic-stimulus/index.html and available upon request throughout the year.
These belated additions will be eligible for assistance under the ARRA and the WPCLP
and funds may be awarded to any project on the State Priority List that accomplishes a
full and complete loan application, subject to the availability of funds. Factors
influencing the Green Project Reserve and provisions included in 35 IAC, Part 366 will
be considered to the maximum extent practicable in cases where funding availability may
be limited. The IEPA reserves the right to bypass eligible projects as required to meet the
20% Green Project Reserve requirement as set forth in federal law
5. The IEPA’s “WPCLP ARRA Comprehensive State Funding List” is included for
informational purposes as Attachment C to this IUP. The Comprehensive State Funding
List was developed on the basis of pre-applications submitted to the Agency prior to
April 2, 2009 and as such represents a listing of those entities that have overtly identified
themselves as being potential loan applicants for ARRA and Water Pollution Control
funds in federal fiscal years 2009 and 2010. It is important to note that projects included
on the Comprehensive List will not be eligible for ARRA or PWSLP funding until such
time as they have achieved Project Plan approval and have been scored and ranked for
priority in accordance with the requirements of those programs. At that time they will be
added to the State Priority List (Attachment A), with all projects securing funding drawn
from the State Priority List upon completion of all loan application elements.
6. Letters of Commitment – When an application for loan assistance is completed to the
satisfaction of the IEPA, the IEPA may issue a Letter of Commitment to reserve existing
or anticipated available funds for a project pending completion of the bidding process by
the loan applicant. Letters of Commitment for projects funded from the State Priority
List pursuant to the ARRA shall not extend beyond February 2, 2010.
7. Binding Commitments – Binding commitments for loan awards are entered into at the
time a loan applicant accepts a loan offer and issues a Notice to Proceed on a construction
contract identified in the Loan Agreement. Binding commitments for projects equal to
100% of the ARRA funds provided will be made in such a way as to assure that all
projects funded are either under contract or have initiated construction prior to February
17, 2010.
G. Available Loan Resources
The American Recovery and Reinvestment Act of 2009 (ARRA) contains a supplemental
appropriation of $4.0 billion in federal funds as the national allocation for the Clean
Water State Revolving Fund (CWSRF). The State of Illinois share of that amount based
on the allocation formula applied by Congress is $177,243,100. The standard 20% State
match requirement for the CWSRF is waived by the ARRA, making the total of new
capitalization funds available the State’s funding share of $177,243,100.
In addition, the IEPA will target funds available for FY2009 under the existing WPCLP
program to provide additional funding opportunities for projects limited in FY 2009 by
funding caps established for the purpose of managing project demand under the ARRA.
These available funds include prospective capitalization grant funding for FY2009, loan
program repayments and funds carried over as uncommitted from the FY2008 WPCLP
funding period. A summary of total available funding is as follows:
Anticipated Funding Available for ARRA Projects
FY2008 Carry-Over Funds $74,136,947
FY2009 Capitalization Funds* $30,775,900
FY2009 State Match* $ 6,155,180
FY2009 Loan Repayments $125,000,000
Less 5%: For Cost Increases on Subtotal ($11,803,401)
SUBTOTAL $224,264,626
ARRA Capitalization Funds $177,243,100
TOTAL $401,507,726
*Prospective
Administrative funding for the program will be withheld from Fund equity, and will total
$7,089,700 from ARRA funds and $1,231,036 from FY2009 capitalization funds,
amounts that will be factored into the calculation of future available ARRA loan
repayment funding.
The demand for loan funds from supplemental funds provided under the ARRA will
exceed the capitalization funds available and the IEPA will establish restrictions on the
amount of ARRA financial assistance available to any single entity: a maximum of 50%
of eligible project costs, or $10,000,000, whichever is less. This restriction reflects the
intent of the State to fund as many worthwhile projects as practicable from the limited
available resources. In those instances where total project needs exceed the limitation,
applicants will be encouraged to break a project into multiple segments for phased loan
assistance, constructing first those project elements most significant in attaining or
maintaining compliance objectives.
Existing WPCLP loan funds for FY2009 will be utilized in conjunction with loans
provided under the ARRA to provide additional financing opportunities, subject to the
availability of funds, for projects limited by the funding eligibility caps established for
ARRA program funds. Loan recipients shall repay WPCLP loans committed separate
from, or in conjunction with, an ARRA loan agreement at a fixed loan rate of 0.0% until
such time as supplemental funds provided under the ARRA are exhausted. The total of
WPCLP loan funds available for FY2009 was $199,136,947 effective October 1, 2008.
In addition, the IEPA expects to access available capitalization funds totaling
$33,226,000 for FY2009 prior to the end of the fiscal year, providing an additional
$39,871,200 (includes state match) for loans and loan program administration in FY2009
and future years. An application for those capitalization funds will be submitted
following the approval of state bond authorization increases and state matching fund
appropriations required to access those funds. That approval is widely anticipated for
July 13, 2009. The IEPA intends to commit all ARRA funding by September 30, 2009
and expects a transition back to standard interest rates in the FY 2010 program. There
will be no midstream interest rate adjustments in the ARRA/PWSLP program.
H. CWSRF Benefits
The IEPA will report the data required by the USEPA into the Clean Water Benefits
Reporting System for each ARRA project.
I. Reporting Requirements
The IEPA will provide the USEPA on an annual basis with information on units of local
government that receive loans in accordance with Title VI requirements. In addition, the
IEPA will comply with the required frequency for reporting requirements included in
Section 1512 of the ARRA and in guidance provided by the USEPA.
J. Administrative Costs
As noted previously, $7,089,700 from Fund equity will be reserved for program
administration from supplemental funds provided under the ARRA.
K. Public Review and Comment on the Intended Use Plan
The IEPA has sought public participation in the development of ARRA program plans
from the moment it was clear that Congress would pass some form of economic stimulus
package during the 2009 session. Agency technical and financial assistance personnel
have spoken on the provisions of the ARRA and the State’s intent to implement
emergency rules and ARRA procedures at a variety of statewide and local conferences
involving local government leaders and wastewater treatment administrators, and have
invited suggestions from the public. Representatives of professional, governmental, and
trade associations involved with wastewater planning and policy in Illinois have been
very instrumental in formulating proposed State policies regarding this loan assistance
program.
This Intended Use Plan and the accompanying State Priority List, IUP List and WPCLP
ARRA Comprehensive State Funding List were made available on April 6, 2009 on the
IEPA website for public comment through a public notification process, followed by a 21
day comment period. The IEPA website can be accessed through the following link:
http://www.epa.state.il.us/water/financial-assistance/economic-stimulus/index.html
List of Attachments
Attachment A - State Priority List in Rank Order for ARRA/WPCLP Projects
Attachment B - IUP List in Rank Order for ARRA/WPCLP projects
Attachment C - WPCLP ARRA Comprehensive State Funding List in Alpha Order
Attachment D - Glossary of Wastewater Abbreviations for State Priority List
Attachment D
FY 2009 Wastewater State Priority List
Glossary of Wastewater Abbreviations
• STP Sewage treatment plant
• CS Combined Sewer
• CSO Combined Sewer Overflow
• L S Lift Station
• LS & FM Lift Station and Forcemain
• Sludge Handling Sludge Handling Facilities
• Ext Extension
• Rehab Rehabilitation
• Exp Expansion
