September 30, 2015

The largest federal aid program for improving the nation’s drinking water systems has struggled to spend money in a timely fashion despite demand for assistance that far exceeds the amount available, a review by The Associated Press shows.

Project delays, poor management by some states and structural problems have contributed to nearly $1.1 billion in congressional appropriations sitting unspent in Drinking Water State Revolving Fund accounts as of Aug. 1. The backlog is smaller than it once was, but federal data show that many states are not on track to meet a goal set by the U.S. Environmental Protection Agency, which wants any money dating back to 2013 to be spent by next year.

In addition, states are using an increasing share of money on other drinking water services instead of investing in infrastructure. About 1 in 5 dollars in recent years has gone to purposes such as paying the salaries of state employees and contractors. Those expenses are allowable but leave less for the repair and replacement of leaky pipes, deteriorating treatment plants and century-old storage tanks.

Congress established the revolving fund in 1996 as a way to provide low-interest loans to cities, counties and utilities to help pay for maintaining aging water systems. In recent years, lawmakers have approved $900 million annually for the program, but they are considering a deep cut for next year.

When loans are not issued and grant money isn’t spent, “needed drinking water improvements are not implemented, communities do not receive the intended health benefits and states miss opportunities to infuse funds into the state’s economy and create jobs,” the agency’s inspector general warned last year. The warning came in a report that singled out some states for giving out too few loans and leaving too much unspent.

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