The U.S. Department of Agriculture is giving $5.6 million in grants and loans to the Norway, Michigan, to fund improvements to its water and sewer systems. Falling under the latest version of the Farm Bill, the funding will come from the USDA’s rural development program for wastewater improvements and another grant to support sewer projects.
The U.S. Department of Agriculture’s water and waste disposal loan and grant program was established to help communities improve the quality of life for residents while promoting economic development in more rural regions of the country in towns of less than 10,000 people. The majority of the projects funded by the program focus on:
- Restoring a deteriorating water supply
- Modifying a water facility
- Merging small facilities to increase efficiency
- Supporting low-income communities with water needs
- Acquiring a water supply or right
- Modifying waste collection
- Developing new water facilities
- Managing solid waste
The grants may cover up to 75 percent of total project costs. In lower-income communities with limited access to resources, funds may also be used to deploy technical assistance and training programs. These projects will provide residents with education on how to plan and implement programs to improve water and wastewater systems.
Types of Funding
The USDA’s water and environmental program offers a variety of funding options for rural communities in need, specifically in the form of utilities assistance, including:
- Direct loans and grants
- Guaranteed loans
- Emergency community water assistance grants
- Pre-development planning grants
- Loans for smaller projects
The USDA has created a water and waste revolving loan fund grants program to help communities start and maintain longer-term projects. These funds will be granted to private nonprofit organizations that will lend the money to qualified organizations such as developers or government agencies. The funds must be used to establish a revolving loan fund to finance pre-development costs of water and wastewater projects. No loan can be worth more than $100,000 and must be paid back to the provider within 10 years. At that point, the loan could be renewed and put back into the project for another cycle. The lender of the funds must provide proof of tax exempt status to qualify for the program.
In addition, the USDA provides loans and grants for Native American Indian tribes to support environmental projects, technical assistance and education, waste management and overcoming other financial disparities.
Furthermore, the USDA, Environmental Protection Agency and the Rural Utilities Service have signed a five-year agreement to collaborate on rural water and wastewater systems across the country. The focus of these joint partnerships will be on:
- Long-term sustainability of rural systems
- Partnerships within communities to enhance engagement
- Workforce support to promote skills in environmental jobs
- Compliance of rural drinking water with clean water regulations
The USDA’s rural water and environmental programs place a strong emphasis on the importance and value of public-private partnerships. While some of the funding is designed to be awarded to nonprofit organizations, the projects should include involvement of private companies able to boost rural infrastructure development and overall economic activity.