Description of Initiative:
In 2009, the Iowa Legislature authorized the use of sewer utility revenues to finance a new category of projects, called “Water Resource Restoration Sponsored Projects.” Sponsored projects were defined as locally directed, watershed-based efforts to address water quality problems, inside or outside the corporate limits.
Iowa has implemented the sponsored projects effort through the Clean Water State Revolving Fund (CWSRF). On a typical CWSRF loan, the utility borrows principal and repays principal plus interest and fees. On a CWSRF loan with a sponsored project, the utility borrows for both the wastewater improvement project and the sponsored project. Through an interest rate reduction, the utility’s ratepayers do not pay any more than they would have for just the wastewater improvements. Instead, two water quality projects are completed for the cost of one.
Sponsored projects can be located within a sub-watershed entirely inside municipal boundaries, or in an upstream area. Applicants are required to work with local water quality organizations, such as Watershed Management Authorities, Soil and Water Conservation Districts, County Conservation Boards, or others. Project plans must include an assessment of the impacted waterbody and its watershed with data that supports the identification of the water quality problems to be addressed.
Practices being funded under Iowa’s sponsored project program are primarily focused on restoring the natural hydrology of the watershed in which they’re located. Included are bioswales and biocells, permeable paving, rain gardens, wetland restoration, and other retention and infiltration practices that address nonpoint source runoff issues. While other benefits such as flood control, stormwater management, or habitat restoration may also be achieved, the practices must result in improved water quality.
Results to Date:
The first sponsored project in Iowa is with the City of Dubuque, initiated in 2013 as a pilot to test the financing mechanism. Dubuque executed a $64 million CWSRF loan to upgrade its wastewater treatment plant. Dubuque is also financing through the CWSRF a $29 million urban watershed plan for restoration of the Bee Branch Creek. The sponsored project allowed Dubuque to borrow an additional $9.4 million for installation of permeable pavers in 73 alleys in the Bee Branch watershed, and repay the same amount as it would have for the watershed project alone. The permeable alleys will allow stormwater to infiltrate, providing water quality benefits and protecting the restored stream corridor from erosion.
Following the pilot project, the program was opened up to other communities. Since 2014, applications have been taken twice each year, and a total of $23 million in additional commitments for 37 more projects have been made. The sponsored projects effort provides an incentive for communities to look beyond what is required under wastewater permits and to explore other water quality issues in their areas. While many applicants are focusing on urban stormwater, others are partnering with groups outside the city limits to address agricultural best management practices and lend support to watershed protection for regional lakes.
Going through the process encourages community leaders to consider the value of local water resources and how they can contribute to protection or restoration. The program is promoting improved relationships between urban and rural interest; cities and watershed organizations; and local, state, and federal resources.
The program is also helping build the technical expertise of Iowa’s engineering and design community to address nonpoint source issues.
Some example projects:
- City of Monona (Northeast Iowa): Installed permeable paving in aquatic center parking lot to avoid runoff into stream leading to Silver Creek.
- City of Fort Dodge (North Central Iowa): Contributed funding to the Badger Lake Watershed Project to improve water quality in lake used by city residents.
- City of Sioux City (Northwest Iowa): Restored native prairie and oak savanna in a city park, and stabilized eroding stream banks on creek leading to Missouri River.
- City of Donnellson (Southeast Iowa): Used a portion of funds for urban practices, provided remainder to Soil and Water Conservation District for cost-share on agricultural soil erosion practices.
The Iowa Department of Natural Resources and the Iowa Finance Authority operate the Clean Water SRF programs, with assistance on green infrastructure projects from the Iowa Department of Agriculture and Land Stewardship.
Iowa Department of Natural Resources