For water and wastewater systems, securing funding for upgrades is critical to maintaining safe, reliable infrastructure. However, before applying for loans, grants or other funding, systems must ensure all regulatory compliance issues are in order, unless returning to compliance is only contingent on the specific infrastructure project.
Here’s why regulatory compliance is essential for water and wastewater systems seeking infrastructure funding:
1. Increases your eligibility for competitive grants and loans
Many grants and loans are highly competitive. Systems with clean compliance records stand out as investments. This demonstrates that the system has qualified staff to maintain the equipment they are seeking to replace. Additionally, showing that utility rate money coming in is sufficient to maintain current and future operations and maintenance as well as cost the of upgrades is important and strengthens applications.
2. Reduces financial and legal risks
Noncompliance can lead to fines, legal action or loss of operational permits, draining resources that could be used for upgrades. A system facing penalties for improper wastewater treatment may struggle to convince funders of its financial stability. Ensuring compliance up front protects against these risks, presenting a stronger case for approval of the grant or loan application.
3. Builds trust with funders
Funding agencies, whether federal, state or private, prioritize projects that demonstrate accountability. Regulatory compliance signals that a system is well-managed and complies with environmental, safety, and operational standards. Non-compliance, such as unresolved violations of the Clean Water Act or Safe Drinking Water Act, can raise red flags that could jeopardize funding approvals. For example, the EPA’s Clean Water State Revolving Funds (CWSRF) often require proof of compliance to qualify for low interest loans or grants, unless the system requires project funding to address a noncompliance.
4. Avoids costly delays
Unresolved compliance issues can derail project timelines. Agencies may require systems to address violations, such as outdated permits or unaddressed contamination, before releasing funds. Because this can lead to costly delays, resolving issues and being proactive to maintain and address compliance issues will ensure funds are allocated faster for critical upgrades.
5. Supports long-term investment
Upgrades funded by loans or grants, like advanced filtration or more efficient pumps, are more likely to succeed when built on a foundation of regulatory compliance. This alignment conserves time and effort and maximizes the impact of funding, which helps deliver safe water and wastewater management for communities.
Summary
Before applying for loans, grants or other funding, water and wastewater systems must prioritize regulatory compliance. It increases eligibility, decreases risks, builds trust, avoids delays, and supports long-term success. By addressing compliance issues first, systems position themselves as reliable partners of public health and the environment. This will pave the way for successful funding and long-term infrastructure improvements.