Drinking Water Revolving Fund Frequently Asked Questions - EH: Minnesota Department of Health

Drinking Water Revolving Fund
Frequently Asked Questions

Who can I directly talk to, to find out about the Minnesota Drinking Water Revolving Fund (DWRF) program?

Who can I directly talk to, to find out about the Minnesota Drinking Water Revolving Fund program?

If you have financial questions please contact the Public Facilities Authority loan officer for your region:

If you have specific technical questions please contact your department of health district engineer:

For general program questions:

For questions about administering the revolving fund and state reporting to the U.S. Environmental Protection Agency, please contact:

Go to > top

What is the current interest rate?

Typical rates are 1 - 3 percent. A maximum interest rate is set for each calendar quarter. It is 1/2 percent below a national bond index for the four weeks preceding the quarter. Each loan is then eligible for potential discounts based on demographic factors. Your Public Facilities Authority loan officer will be able to answer your specific questions.

Go to > top

How do I obtain a loan?

A two-step process must be followed before a project qualifies for a loan. The first step is to request, through the department of health, that the project be placed on the Project Priority List (PPL). The second step is to request, through the Public Facilities Authority, that it be placed on the Intended Use Plan (IUP). This second step should take place when financing and construction are expected to start between July of the current year and June of the following year. The Public Facilities Authority will mail a loan application to you if your project is within the funding range on the IUP. You must then fill out the application and fulfill several other requirements to receive the loan. Using the Drinking Water Revolving Fund Dates to Know, and Project Priority List Instructions will help in the loan process.

Go to > top

Should I bother placing a project on the Project Priority List if I hope to get a grant or loan elsewhere?

Keep you options open. List the project if you hope to obtain a government grant or below market rate loan, no matter what agency you hope to get it from. The best financial package may not be initially apparent. In addition, the government grant and loan agencies in Minnesota work cooperatively with one another and jointly coordinate their activities. They all refer to the Project Priority List. A system owner might be at a disadvantage if the project is not listed. You can find information on other grant and loan programs that are available for public water system infrastructure at MRWA: MN Loan and Grant Funding Options.

Go to > top

Should a consultant write the proposal to place a project on the Project Priority List?

Community personnel can easily write the proposal. Advance planning, data gathering, and decision making are required, however, so communities frequently obtain outside assistance. Most communities have a consultant engineer write the proposal because they typically have the experience and will be involved with the project through to completion.

Some communities utilize a grant consultant to write a proposal, again because of their experience. Other communities have done an excellent job writing their own proposal.

Go to > top

How much detail must be in a Project Priority List proposal?

Proposals should be specific and to the point. The Example of an Application (Word Document) will show you what information should be included. There is no set format, so you can incorporate existing documents. For example, preliminary engineering reports are sometimes included.

Go to > top

Can a loan be obtained for a new public water system?

A loan may be used to create or extend a public water system for established homes or businesses that are presently served by contaminated private wells. A loan may not be used to create a system for a new community or development.

Go to > top

Can loans be made to private owners of public water systems?

Loans can be made to most publicly owned water systems, and also to private owners of community water systems (manufactured home parks, apartment complexes, townhouses), and nonprofit owners of noncommunity water systems (private schools, day care centers, retreat centers, camps, and churches). Generally though, a loan is not cost effective for a private or nonprofit system owner. (See the answer to the next question, “How much is a typical loan?”)

Go to > top

How much money is available? How much is a typical loan?

The amount of money available for loans varies each year, but the program goal is to provide an average of 40 million dollars annually. Loans have recently ranged from over $100,000 to over $37 million. The average loan is $1.5 million. Loans have recently ranged from $111,000 to $25 million.

Go to > top

What is an environmental review?

The Environmental Review is a process to determine a project's potential environmental consequences and to take steps to prevent unacceptable consequences from occurring. It consists of project analysis and public notification and is required for all projects that receive federal funds. It takes at least 2 1/2 to 3 months to complete because of mandatory comment periods. An environmental review must be completed before a loan can be secured.

Go to > top

What is a Water Supply Plan?

It is a plan to conserve water, allocate priorities, and identify emergency alternative water sources. The Minnesota Department of Natural Resources requires a plan for every public water system that serves more than 1000 people. January 1, 1996 was the deadline for submitting a plan to the department for approval. An update must be submitted every ten years. A system, serving more than 1000 people must have their plan implemented to be eligible to have a project placed on the Project Priority List.

Go to > top

What are the DWRF requirements for having a certified water system operator?

A system must have an appropriately certified operator to secure a loan. Occasionally a loan will be for a project that will require a certification classification that is higher than what the operator has attained. In these instances the department of health and system owner enter into a bilateral compliance agreement to have the operator appropriately certified when the upgraded system goes on line. Training is provided so the operator will be able to pass an examination and attain that certification.

Go to > top

What should be done if a project changes somewhat from when the description was submitted for the Project Priority List (PPL) and when the project will be designed?

Verbally inform the department of health engineers, and follow-up with a succinct written description. Department staff are responsible for verifying that final projects match initial proposals so a written update is required.

One of the purposes for the PPL proposal process is to have system owners identify their water system problems, carefully consider options, and choose the best course of action. These decisions should carry through to design and implementation. Conditions do change, however, and sometimes further analysis reveals information that was not known at the PPL stage. The key to approving the change is whether the final solution is consistent with the initial proposal. (For example, an alternative treatment process may ultimately be better; a well may be rehabilitated rather than being replaced.) The department does not accept substituting water main replacement projects, however. Also, at some point changes are significant enough that they lead to a new project, and a new PPL proposal must be submitted.

Go to > top

Updated Wednesday, 17-Nov-2021 14:26:29 CST