Lead Service Line Replacement Funding
New Hampshire’s public water systems (PWSs) have been busy over the last year to ensure compliance with USEPA’s Lead and Copper Rule Revision (LCRR). Community (C) and non-transient non-community (NTNC) water systems have been compiling data through a records review process and field investigations to develop a service line inventory. The federal deadline is fast approaching – by October 16, approximately 1,200 New Hampshire PWSs are required to submit an initial inventory of their service lines to NHDES. In addition to the inventory requirement, by 2037 USEPA is requiring that all service lines identified as lead or galvanized requiring replacement (GRR) be removed and replaced with a non-lead material on both sides of the curb stop. This may be a challenging task for PWSs as it will require homeowner consent to complete the work on the customer-owned portion. Fortunately, funding is available to assist eligible PWSs for the replacement of lead/GRR service lines, regardless of ownership.
The Drinking Water State Revolving Loan Fund (DWSRF) Lead Service Line Replacement (LSLR) funding is available for both inventory and construction activities associated with the full replacement of service lines identified as lead or GRR. This program was created as a result of the 2021 Bipartisan Infrastructure Law (BIL), which allocated billions of additional monies for lead service line replacements. Currently NHDES has approximately $59 million available to fund activities such as locating and mapping service lines, performing potholing, hiring consultants to continue with the records review process, removal and replacement of lead/GRR service lines and lead connectors, site restoration and more with an additional $28 million expected annually until 2026. For additional examples of eligible projects please visit Bipartisan Infrastructure Law SRF Memorandum. Funding is administered by the NHDES DWSRF program. NHDES encourages eligible applicants to submit a DWSRF LSLR application soon to take advantage of the historic level of funding combined with significant principal forgiveness (currently 70%) and low interest rates. In addition, GRR is eligible under the current funding, however GRR will not be eligible for future funding.
The best time to apply depends on the level of completeness of the initial service line inventory. USEPA’s LCRR requires all C and NTNC water systems to conduct a records review process by reviewing documentation from meter replacements, water main repairs, work orders, water system rules, regulations, ordinances and codes, and other similar documents to designate the service line material. It is acceptable for the service line inventory to contain “unknown” material, and the DWSRF LSLR funding can be used to eliminate those unknowns by continuing the records review process as well as digging test pits and potholing. The cost to identify a service line through potholing can range from $1,500 to $2,000 for each service. For example, a PWS with 700 unknowns would borrow about $1 million, but would only be required to repay approximately $300,000 due to the significant amount of principal forgiveness currently available, not including a 1% interest during construction.
Applying for funding under the DWSRF LSLR program is similar to the regular SRF application but faster because no pre-application is required. Like the regular SRF application process, C and non-profit NTNC water systems are eligible to apply. Applications are accepted on a rolling basis and funding is awarded on a first come, first served basis. As this is a loan, applicants must obtain authority to borrow ahead of time. Depending on the entity, the governing body may meet once a month, or once a year, so be mindful of this timeline when applying. There is 71% principal forgiveness available. Additionally, if the funds are to be used for construction activities, the project is subject to an environmental review and federal crosscutters including Davis Bacon, American Iron and Steel and the Build America, Buy America Act. For information on the federal requirements, current principal forgiveness and interest rates please visit the NHDES DWSRF webpage. If a PWS is ready to apply, submit a final application.
Replacement projects must result in the complete replacement of a service line to be eligible for this funding, so engaging homeowners will be a critical part of the project. Note that the customer may choose to either not have their lead/GRR service line replaced or pursue a customer-initiated replacement. The PWS loan recipient should develop funding programs to incentivize homeowner participation. The intent of the principal forgiveness is to encourage participation in the replacement program by offsetting the homeowner costs. NHDES recommends engaging homeowners and being creative when determining a funding mechanism or payment plan for private service line replacements.
NHDES encourages eligible applicants to apply as soon as they are ready to take advantage of the significant funding opportunity currently available. If you have any questions or need more information on funding information please visit NHDES LCRR webpage, dwlead@des.nh.gov or contact Stephanie Frechette at stephanie.h.frechette@des.nh.gov or (603) 271-2315.