Contact(s): Robin Schmidt, DNR environmental loans section chief, Robin.Schmidt@wisconsin.gov, 608-266-3915; Jennifer Sereno, DNR communications, Jennifer.Sereno@wisconsin.gov, 608-770-8084
August 9, 2016
MADISON - A first-of-its kind program to replace lead service lines on qualifying private properties is being expanded to ensure funds are available for all 38 communities that requested assistance through the Wisconsin Department of Natural Resources.
The DNR conceived the funding program earlier this year following a decision by the U.S. Environmental Protection Agency to allow the state greater flexibility in allocating loan funds for water infrastructure projects.
DNR initially received approval from the EPA to make $11.8 million available to disadvantaged municipalities to help remove old lead service lines that bring drinking water into homes. However, when the number and size of requests submitted by the June 30 deadline exceeded the initial financing authority, DNR sought and received approval from EPA to increase the funding to $14.5 million, fully funding all municipalities that applied for the first year of the two-year program. Under the program, municipalities determine how to distribute the funds.
"This is another example of Wisconsin's innovative leadership to deliver the services we all depend on more effectively and reliably," said Gov. Scott Walker. "Replacing old lead service lines is a high public health priority and we are pleased to announce an expansion of the funding available this year to assist communities across the state from Milwaukee to Ashland."
The Lead Service Line Replacement Funding program reflects DNR's commitment to safe drinking water and addresses the financial barriers facing communities where lead service lines continue to deliver drinking water to residences, schools and licensed daycare centers. These service lines extend from the main street pipes owned by local utilities onto private property and into homes, schools and day care centers.
"These aging lead service lines have been in place for decades and we are pleased to be working cooperatively with local and federal governments toward an effective solution," said DNR Sec. Cathy Stepp. "We took to heart the public comments we received as the program was being developed and moved quickly to make adjustments that extended the benefits available to daycares and schools while reaching more residents in our largest urban areas. We are particularly pleased that through cooperation with EPA we are able to support projects in additional communities."
The additional $2.7 million comes from re-opening past grants to fully award "principal forgiveness" - a feature of some loan programs that allows DNR to reduce the amount of principal that has to be repaid, in effect decreasing what the borrower owes. Wisconsin had used principal forgiveness sparingly and EPA concurred that this additional allocation of principal forgiveness funding would not jeopardize the state's requirement to maintain the fund in perpetuity for future water infrastructure projects.
As a result, providing the additional principal forgiveness funding does not jeopardize the stability of the fund and ensures that all municipalities that submitted applications this first year will be fully funded based on their application requests. The first round of financial assistance agreements are expected to be signed in mid-September.
The city of Milwaukee will receive the largest total, with eligibility for $2.6 million in funding to cover homes, schools and licensed day cares. A complete list of applicants [PDF] and eligibility can be found by searching the DNR website dnr.wi.gov for "lead service line funding."
Robin Schmidt, DNR environmental loans section chief, said department staff members have just completed meetings with all of the municipalities who applied to assist them in ensuring compliance with applicable federal and state requirements. About a dozen municipalities anticipate using the funds this fall, many in conjunction with street or utility maintenance projects already underway.
Lead service lines were gradually phased out of new construction during the 1940s and '50s but remain in some areas developed before that time. Lead service lines may deliver drinking water with elevated lead levels at the tap and even low levels of lead in the blood have been shown to affect IQ, the ability to pay attention and academic achievement.
Homeowners are typically responsible for repair and replacement of service lines extending from the public right of way across their property and into the residence while municipal water utilities bear responsibility for replacing the main lines. However, many private property owners are unable to pay for the replacements, which average about $3,000 per home.
Water utilities in Wisconsin are not allowed to expend user rates to pay for work on private property, leaving a gap in the ability to get the lead service lines out. Despite the cost, full replacement of lead service lines is recommended because a partial replacement can increase the amount of lead being released into the water.
To learn more about the Safe Drinking Water Loan Program Intended Use Plan, visit the DNR website, dnr.wi.gov, and search "environmental loans."