There are a number of State and Federal grant and loan opportunities that provide funding for infrastructure projects. Grant and low-interest loan programs can help reduce the financial burden of large construction projects. Each funding agency has specific requirements, and some opportunities will fit a project better than others.
The following funding has been awarded for the Clancy Water Project:
Treasure State Endowment Program (TSEP, Since Modified to MCEP)
TSEP is a state funded grant program administered by the Montana Department of Commerce (MDOC). TSEP provides financial assistance to local governments for infrastructure improvements. TSEP grant recipients are required to match the grant dollar for dollar, but the match may come from a variety of sources including other grants, loans, or cash contributions. Water projects are eligible for TSEP funds. The proposed project would increase the user rates in Clancy to 151.7% of the target rate, based on an MHI of $48,266.50 determined by the income in 2018. The District was eligible for a TSEP grant of $750,000, which has been awarded.
Water Resources Development Act Grant (WRDA):
WRDA is authorizing legislation that provides funding to implement authorized studies, projects, and activities separately through an annual appropriations budgetary process. WRDA grants are administered through the U.S. Army Corps of Engineers and require a 25% match from non-federal sources. The District received notice on February 28, 2019 that they have been awarded a $200,000 WRDA grant for their water project $200,000 of which will be available for project costs.
Community Development Block Grant (CDBG)
CDBG is a federally funded program that is also administered by the Montana Department of Commerce (MDOC). The primary purpose of CDBG funds is to benefit low to moderate income (LMI) families. Hence, a municipality must have an LMI of 51% or greater. This is usually determined by the current Census. At the time the District applied for and was awarded CDBG funds, the maximum grant amount was $450,000. The use of CDBG funds requires a 25% local match that can be provided through cash funds, loans, or a combination thereof.
ARPA Minimum Allocation & Competitive Grant Funding
The Competitive Grant program is open to state and local governments as defined by HB 632 § 2(3). Applications are ranked and recommended to the Legislature’s Infrastructure Advisory Commission (IAC) and the Governor for approval. The Minimum Allocation Grant program established $150 million for grants to local governments based on the gas tax breakdown in § 15-70-101, MCA, and does not have a ranking process. Both of these programs appropriate ARPA § 602 funds.
The Minimum Allocation Grant program requires a local government to pledge the lesser of one-to-one matching funds or 25% of the amount the local government received in coronavirus local fiscal recovery funds provided for in ARPA § 603. A local government may use coronavirus local fiscal recovery funds as matching funds. The district applied for and was awarded a $2,000,000 ARPA Competitive Grant, and Jefferson County awarded the District a $250,000 Minimum Allocation Grant. This project is being supported, in whole or in part, by federal award number SLFRP1747 awarded to State of Montana by the U.S. Department of Treasury.
Department of Natural Resources (DNRC) Renewable Resource Grant
The District was awarded an RRGL grant for $125,000 in the 2021 Biennium for hydrogeologic investigation and geotechnical evaluation related to the proposed water system improvements. The District was awarded for an additional $125,000 RRGL grant in the 2025 biennium in May 2022 that will support water system construction costs.
The following funding will be established once the final project costs are determined:
Drinking Water State Revolving Fund (DWSRF):
SRF provides low-interest loan funds for both water and wastewater projects through the Drinking Water State Revolving Fund (DWSRF) and the Water Pollution Control State Revolving Fund (WPCSRF), respectively. The SRF program is administered by the Montana Department of Environmental Quality. Current loan terms include an interest rate of 2.5% for a 30-year hardship loan. SRF also has a limited amount of “principal forgiveness” funds available for projects. For water projects, 50% of the SRF funding for a project, up to $500,000 may be obtained, depending on the availability of the funds.
The following is a breakdown of the percentage of the project costs incurred by each program and is intended to demonstrate that the matching requirements for each program are satisfied.
| Grant Type | Amount | Percentage |
|---|---|---|
| TSEP Grant | $750,000 | 15% |
| WRDA Grant | $200,000 | 4% |
| CDBG Grant | $450,000 | 9% |
| RRGL (2021) Grant | $125,000 | 2% |
| RRGL (2025) Grant | $125,000 | 2% |
| Jefferson County ARPA Grant | $250,000 | 5% |
| Competitive ARPA Grant | $2,000,000 | 40% |
| SRF Loan Forgiveness | $500,000 | 10% |
| SRF Loan | $648,600 | 13% |