Environmental Progress - Winter 2005

State Low-Interest Revolving Loan Programs for Drinking Water and Wastewater Facility Upgrades Top $2 Billion Milestone

Nearly 600 loans have assisted communities across Illinois

Two programs administered by the Illinois Environmental Protection Agency, that have provided low-interest loans to assist hundreds of communities across the state in upgrading or expanding their drinking water and wastewater treatment facilities, have now passed the $2 billion mark.

"Safe and reliable drinking water supplies and meeting all standards for sewage treatment are essential to the quality of life across our state, and the loan programs continue to be a popular and vital tool," said Illinois EPA Director Renee Cipriano.

"Governor Blagojevich's Opportunity Returns regional economic development initiative recognizes the importance of these loan programs for building the infrastructure that underlies future economic growth and quality of life for our citizens, and we anticipate continued strong demand," added Director Cipriano.

Communities have used the loan money to significantly reduce the costs to their customers for complying with new regulations to protect the environment and public health, such as radium from drinking water. In addition, the loans have been used for new or expanded treatment, distribution and storage facilities to serve increased customers.

Among the communities receiving large loans in 2004 were the Metropolitan Water Reclamation District of Greater Chicago, Batavia, Oswego, Kankakee, Galena, Peoria, Urbana-Champaign, Bloomington-Normal, Lake of Egypt, Breese, and Forsyth.

Since the Wastewater Revolving Loan Program was started in 1989 and the Drinking Water loan program in 1997, there have been 409 loans for wastewater facilities, totaling $1.69 billion, and 187 loans for drinking water infrastructure, totaling $312 million.

During 2004, a total of $139.2 million in new loan awards were made in the two programs. That included $87.8 million in the Wastewater Revolving Fund program, with seven new awards and 22 amendments to previous loans. The Drinking Water Loan Program provided $51.4 million in loans in 2004, with 27 new loans and 28 amendments.

The loan programs are funded by 80 percent federal and 20 percent state match funding. The loans are provided to communities at half the market interest rate, and the repayments over a 20-year period are returned to the funds to support other loans. Director Cipriano has urged Illinois' congressional delegation to ensure there is adequate federal funding for the loan programs.