NRWA Statement on Administration Position that RUS Loan Program is Duplicative

DUNCAN, Okla. – The National Rural Water Association applauds the President’s focus on the nation’s infrastructure including water and wastewater systems that are the first line of defense in public health and environmental protection. The USDA Water and Waste Program has a proven and effective delivery mechanism in place to deliver these infrastructure results. Since FY 1940 USDA’s Water Program has made 96,724 loans and grants totaling $54.6 billion. Today, the program provides approximately $1.6 billion per year in loans and grants to build new and improved water and waste disposal infrastructure. However, the administration’s proposed budget zeros out all funding for the USDA Water and Waste Disposal Program, a program that has been providing needed, affordable funding to rural communities for 72 years. The justification for its elimination is that it is duplicative to the State Revolving Loan Fund. This justification does not hold water when the data is examined.

The USDA program is supposedly a duplication of the EPA’s State Revolving Loan Fund, except that the USDA program started decades earlier and is dedicated to serving rural communities, where SRF funds primarily benefit large systems. The USDA water and waste disposal program was established in 1946 by what was then the Farmers Home Administration. The Drinking Water State Revolving Loan Fund was not established until 1996, during the reauthorization of the Safe Drinking Water Act.

The USDA has dedicated 100% of available loan and grant funds to rural and small communities for seven decades. Their records show that 85% of the projects funded serve populations of 5,000 or less; a staggering 41% serves populations of 1,000 or less. EPA records show that 77% of Clean Water Funds and 72% of Drinking Water Funds for FY-15 went to systems serving populations of over 10,000.

The fact is that 92% (46,456) of the 50,496 community water supplies in the United States serve less than 10,000 population and 81% (41,216) serve populations of 3,300 population or less. One of the reasons these smaller communities can provide high quality drinking water and wastewater service to their communities is that USDA loans and grants make it affordable to expand service, upgrade equipment and maintain regulatory compliance without the support of a large consumer base.

The USDA also has the immeasurable benefit of a long history as a supporter and partner of rural utilities. Unfortunately, a single source of funding from a regulatory agency with a regulatory enforcement mission creates inherent problems, problems that limit our combined objective to protect the public health and environment. While NRWA supports both the USDA and SRF programs and their different missions, it should be clear that the sole source of funding for water utilities should not come from their regulator.

The USDA Water and Waste Disposal Program achieves all these benefits while being one of the highest-quality federal programs and often called “the best money spent in government.” The latest Office of Management and Budget assessment of the USDA awarded the Water and Waste Disposal Program with its highest possible rating. The OMB findings stated that the program: “set ambitious goals, achieved results, is well managed and improves efficiency.” Far from being wasteful or duplicative, the USDA Water and Waste Disposal Program is critical for supporting the health, economic development, environmental protection and quality of life for the hard-working citizens of Rural America.

Learn more about the impact of USDA’s Rural Utilities Service