Water Pollution Control Loan Program Factsheet

Fact Sheet - January 2006

BACKGROUND

The federal Water Quality Act (Clean Water Act amendments) of 1987 changed the way in which federal assistance for public wastewater projects would be provided. The legislation authorized federal grants to state governments for establishment of loan programs, with the condition that each state provide a 20 percent match to each federal dollar appropriated for the program.

PROGRAM FUNDING

Since the inception of the WPCLP program, more than $1.8B in federal capitalization, state matching funds and loan repayments have been committed to fund eligible loan projects. To provide additional funding, the Agency has decided to convert from a direct loan program to a leveraged loan program through the sale of revenue bonds.

ELIGIBILITY

Local government units (city, village or sanitary district) with the following types of projects are eligible to receive a loan: (1) construction of new wastewater collection and treatment facilities, or upgrading and expanding of existing facilities; (2) replacement, rehabilitation or extension of collection systems and interceptors; and (3) separation of combined sewers or upgrading combined systems to eliminate overflows, surcharging or flooding.

TERMS OF LOAN

All wastewater loans will carry a loan rate which is established at one-half the market interest rate. The simple interest rate for loans has averaged approximately 3 percent. The maximum term of a WPCLP loan will be 20 years.

LOAN APPLICATION REQUIREMENTS

Loan applicants for financial assistance, during any federal fiscal year commencing October 1, must file a new pre-application annually on or before the preceding March 31. Once the Illinois EPA has determined priorities for awarding loan funding assistance to projects, a loan applicant must complete a loan application before the Agency can offer a loan. Some of the key elements of a loan application that must be submitted by the applicant and approved by the Illinois EPA include: (1) a facilities plan; (2) design plans and specifications; (3) a user charge system and sewer use ordinance, and a dedicated source of revenue for repayment of the loan; and (4) a summary of the bids received on the project, along with a recommendation to award a contract to the low responsive, responsible bidder. Additional application requirements can be determined by contacting the Illinois EPA as indicated below.

CONTACT

For further information on the WPCLP, please contact the Infrastructure Financial Assistance Section, Bureau of Water, at 217/782-2027, TDD 217/782-9143.