Enhanced Financial Assistance for Disaster Recovery and Flood Prevention

Written by  Peter lake, Director TWDB Board Member


WHEN DISASTER STRIKES, YOU can always count on Texans to step up and help one another. This rang especially true during and after Hurricane Harvey, when flood waters devastated homes and businesses across much of coastal Texas. People throughout the state immediately organized relief efforts to help affected communities, and the Texas Water Development Board (TWDB) asked, “What can we do?” By working with the Environmental Protection Agency (EPA) and other stakeholders, we are pleased to have a clear path forward to assist affected communities through enhanced financial assistance.

This enhanced financial assistance will come through the TWDB’s Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF) programs. Through these programs communities can finance recovery and increased resiliency for water and wastewater infrastructure, including emergency and urgent projects. The CWSRF also funds stormwater projects.

Generally, the CWSRF offers low-cost financing for planning, acquisition, design, and construction costs of stormwater, wastewater, reuse, and other pollution control projects. In Fiscal Year 2018, $525 million is available through the CWSRF program. In response to Hurricane Harvey, the TWDB amended the CWSRF by allocating $53 million in zero-interest loans through the Emergency Relief program for projects impacted by a disaster. The additional reduction in the interest rate will further help offset recovery costs for communities. Additionally, $5 million in principal forgiveness will be available with a maximum of $800,000 per project. The TWDB will reserve 20 percent (or $10.6 million) of the overall zero-interest loan funds and 50 percent (or $2.5 million) of the total principal forgiveness for disadvantaged, small, or rural communities.

Eligible projects for CWSRF Emergency Relief funding must be in areas included in a governor-issued or presidential disaster declaration, and the entity must demonstrate imminent threat to health, safety, environment, or welfare. Projects can include wastewater and stormwater management facilities.

Financial assistance through the CWSRF is also available to help entities take proactive steps to prevent future flooding. Potential flood-hardening and resiliency projects at treatment facilities may include physical hardening, such as waterproofing electrical components, dry flood proofing or sealing structures to prevent floodwater penetration, and installing wind-resistant features; relocation or elevation of treatment plants; physical flood barriers; flood prevention at publicly owned facilities; backup generators; and redundant equipment or infrastructure.

One example of CWSRF funds being put to work is in Houston. The City of Houston, hit hard by the 2015 Memorial Day and 2016 Tax Day floods, as well as Hurricane Harvey and its after affects, is working with the Harris County Flood Control District and the U.S. Army Corps of Engineers on Project Brays to manage stormwater and reduce the risk of future flooding. Project Brays is an ongoing project that consists of more than 75 individual projects throughout the 31 miles of Brays Bayou. In mid-October, the TWDB approved a zero-interest loan to the City of Houston for $47,195,000 through the CWSRF Emergency Relief fund. With this financial assistance, the City intends to fund the replacement or extension of eight bridges to reduce obstructions and allow additional stormwater flow in the area. The City could save approximately $25 million over the life of the loan.

In fall 2016, the City of Lubbock was approved for a $35 million loan through the CWSRF program to complete a project that will improve stormwater management and mitigate flooding. The City has historically experienced flooding in the northern and northwestern portions of the city. The loan will allow the City to reduce the risk of flooding by constructing a stormwater drainage network. By using the CWSRF, the City could save approximately $6.8 million over the life of the loan.

Another community proactively working to solve a recurring flood problem is the City of San Marcos. In January 2017, the City received approval for financial assistance for $1,961,821, consisting of a $1 million loan and $961,821 in principal forgiveness, from the CWSRF. The City will use the assistance to finance a flood mitigation planning study to address repeated flooding of homes and infrastructure from the San Marcos and Blanco rivers. Based on the results of the study, the City will also create an engineering feasibility report to potentially move forward with an infrastructure solution.

The TWDB’s DWSRF is also open for business. Projects that facilitate compliance with primary drinking water standards or further the health protection objectives of the Safe Drinking Water Act may be eligible for funding through the DWSRF. Approximately $250 million in low-interest loans and principal forgiveness is available in Fiscal Year 2018 under the DWSRF.

To help meet the needs of communities affected by Hurricane Harvey and other recent disasters, the TWDB allocated a total of $7 million in principal forgiveness through the DWSRF’s Urgent Need program. Of the $7 million, 50 percent is reserved for disadvantaged, small, and rural communities. The agency is also allocating $25 million in zero-interest loans for disaster recovery projects. Of that amount, 20 percent is reserved for disadvantaged, small, and rural communities. The funding cap of $500,000 per project remains in place, but disadvantaged communities may be eligible to receive up to $800,000.

In order to be eligible for DWSRF’s Urgent Need funding, a project must support recovery from disasters and other catastrophic events resulting in the loss of a substantial portion of the water supply or severe flood damage to water supply facilities. Projects may also qualify if they mitigate an unanticipated reduction of adequate water supply. The reduced supply could result from prolonged drought or situations that require immediate attention to address a substantial, imminent public health issue affecting a significant portion of the water supply to customers, including widespread contamination in the water supply.

Last year, the TWDB provided $500,000 in principal forgiveness through the DWSRF’s Urgent Need fund to help the City of Cisco recover from severe damage to its water treatment plant that resulted from the 2016 Memorial Day floods. The City used the funds for planning and design of a replacement water treatment plant and anticipates utilizing the DWSRF program for long-term financing to cover much of the construction costs for the new plant.

In addition to the CWSRF and DWSRF, low-cost financing for flood control projects is also available through the Texas Water Development Fund (DFund). The DFund is a streamlined state loan program that provides financing for various types of infrastructure projects and enables the TWDB to be as flexible as possible when structuring loans.

My colleagues and I at the TWDB stand ready to help communities impacted by Hurricane Harvey recover as quickly as possible and take proactive steps to prevent future flooding. Additional information can be found on our website, and as always, our staff is available to discuss these and other financial assistance options to meet your community’s water supply and infrastructure needs.

Peter Lake
Peter Lake was appointed to the Texas Water Development Board by Governor Greg Abbott in December 2015. A native of Tyler, Texas, Lake currently resides in Austin.

The Texas Water Development Board’s mission is to provide leadership, information, education, and support for planning, financial assistance, and outreach for the conservation and responsible development of water for Texas.

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