The Texas Water Development Board (TWDB) approved a strategy for expediting water projects and reducing undrawn federal grant funds when they met on January 13. The strategy was developed as a cooperative effort among TWDB, the Texas Commission on Environmental Quality (TCEQ) and the U.S. Environmental Protection Agency (EPA). It will be forwarded to EPA for approval.
TWDB administers the Drinking Water State Revolving Fund (DWSRF), which is funded by annual capitalization grants from Congress through EPA. DWSRF finances infrastructure improvements to drinking water systems with below-market loans and loan forgiveness. Historically, TWDB set an annual capacity for the DWSRF program and committed funding up to that amount for projects. By the time the projects were planned, designed, and constructed, it could take several years to draw down all of the federal funds. This long time frame primarily contributed to the creation of unliquidated obligations (ULOs).
Strategies to address the ULOs include transferring funds to the Clean Water State Revolving Fund to allow the grant funds to be immediately used by active clean water projects until they are needed for future drinking water projects, managing loan capacity of the program based on a cash draw model, incentivizing projects to complete construction quicker and allotting more set-aside funds to TCEQ for capacity development of Texas public water systems.