The new federal $1.2 trillion infrastructure bill will provide significant financial resources for communities. Signed into law in November, it is slowly being allocated to funding programs.
One piece of the infrastructure bill will be an additional $680 million that will be available to Minnesota cities for water and wastewater infrastructure over the next five years. This funding will be administered through the Minnesota Public Facilities Authority (PFA). The federal infrastructure bill funding will result in increased principal forgiveness (grants) for communities.
Of the $680 million in new funds, 56% or $380.8 million will be used for Clean Water (wastewater) and Drinking Water Programs. The primary focus of the federal funding is to replace aging infrastructure. Projects such as watermain and wastewater collection, water storage tanks, water and wastewater treatment facilities, and lead line replacement qualify for the funding. What will change with this federal funding? Almost half of these new funds (49%) are to be used for principal forgiveness (grants), based on affordability.
With the increased funding, PFA will fund projects with a lower score than in previous years. During the next five years, as the infrastructure bill funding is distributed, the list of cities waiting for funding will become shorter and shorter. To benefit from the infrastructure bill funding with more principal forgiveness, cities should start the process now.
If your city has a water or wastewater improvement project coming up in the next few years, follow the regular process for getting your project listed on the Project Priority List (PPL). The deadline for the PPL Clean Water (wastewater) projects is March 4, 2022, and Drinking Water projects is May 6, 2022. Contact your Engineer and Funding Specialist to help complete the PPL request and start the process now to qualify for the additional loan forgiveness.
