The online RCAP Resources Library has a variety of resources that are useful to small, rural drinking water and wastewater systems.

What to Expect When Seeking Funding for Your Utility

As communities assess their water system’s needs for replacing or building new infrastructure, the reality quickly sets in: It’s going to be expensive. The burden of obtaining financing is often greater for small communities because they cannot access or raise large amounts of capital as easily as larger towns and cities that have broader customer bases.

Getting outside help is always a possibility, but you need to keep in mind that money is not freely handed out. With government resources at all levels – federal, state and local – shrinking, the competition for funds is getting tougher. Government agencies assisting community water systems are making a big push toward sustainability these days, which communities should take to mean in one way that they need to become more self-supporting in a financial sense.

This is not a comprehensive guide to all sources of funding for communities needing financing for water infrastructure but is to help you understand what to expect when seeking funding.

Loans and grants are available for critical and urgent capital projects and for treatment upgrades. Utilities should consider grant funds as a bonus, not as a substitute for good management skills.

Some federal funding sources for small water and wastewater treatment systems include the following:

As you seek out and pursue funding sources, also keep in mind that government agencies providing loans and grants have many requirements as part of their application processes. These can include:

  • income surveys to determine the ability of rate payers to support a loan
  • employing professionals, such as an attorney and an engineer, to perform certain tasks or reviews
  • completing an environmental review

Note that meeting many of these requirements takes time and themselves also come with a cost. Lining up various funding sources to come to fruition at the same time and the right time is a challenge in itself. Another major requirement for government loan programs is that applicants be financially sound. The lender wants to be sure you can pay your taxes, handle operating costs and pay back the loan.

In short, you should expect to put forth a lot of work and effort if you hope to secure any outside funding. Fortunately, there are assistance providers like RCAP that can help communities in the complex process of securing funds. Find RCAP assistance in your area. Someone with the knowledge of government agencies and experience in preparing communities to approach them for funding can help you navigate the process and avoid pitfalls.