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FAQ: Overburdened Criteria

  • All data from the American Community Survey (US Census) 5-Year estimates are estimates. EGLE is using a combination of Census information, state information, and system information.

    The state information comes directly from the Michigan Department of Treasury and is not an estimate. This combination of the most used census data, state-specific data, and local system cost data gives a more balanced result than just using Census data estimates.

  • EGLE received some excellent academic research showing that poverty percentage can sometimes be a better indicator to use than median annual household income (MAHI). When EGLE applied this data to the hundreds of systems that applied to the SRF programs over the last three years, there were no clear breaks in the poverty percentage that could be used to set limits for significantly overburdened and overburdened status. Using just the poverty percentage with the systems that applied to the SRF programs would result in nearly all systems qualifying or almost none.

    EGLE did find using the current criteria and the proposed criteria that the poverty percentage thresholds suggested in the public comments lined up within 1% of each other. This was confirmation that the current criteria are achieving the outcomes the commenters were asking for, even if not being used the way that was suggested.

  • EGLE ensures this by recognizing the intermunicipal service agreements in place that regional systems have applied to their users.

    If a community within a system comes in for a project and indicates only that community’s users are paying the project debt, EGLE does not include the rest of the regional municipalities in the calculations.

  • EGLE posted the timeline and data used on a webpage designed specifically for overburdened criteria for seven months.

    Additionally, the two public meetings and a public hearing notification were posted and available to watch as soon as they were completed.

  • EGLE looked at additional indicators but is trying to keep the form and application process as simple as possible.

    When additional indicators were added they followed in line with the outcomes produced by using median annual household income (MAHI), taxable value per capita (TVPC), and system cost of service per residential equivalency unit (REU). This reinforced the continued use of the current criteria with only changes to the threshold and percentage of income.

  • EGLE used the project data that was submitted for FY23, FY24, and FY25. This information was used to run different scenarios to see how the numbers would change when different statics were added or tweaked.

    It was also compared against the Climate and Economic Justice Screening Tool to see how the results compared to the former federal tool.

  • EGLE decided on the 80% median annual household income (MAHI) threshold along with the annual user cost exceeding 1.5% of system MAHI after running many options using different statistics.

    The 1.5% of MAHI was taken from an EPA report to congress from December of 2024 as the lowest threshold to use to determine a user’s high water/wastewater cost.

    These criteria would have reduced the number of overburdened and significantly overburdened applicants over the last couple of years to about 58% instead of 87%. EGLE, along with many public comments, believe if too many systems qualify it negatively impacts those most in need.

    This updated criteria mimicked what the Climate and Economic Justice Screening Tool showed it would have labeled systems over that same period.

  • Principle forgiveness is determined each year based on the rules set in federal legislation for the specific funding available. This process is independent of the criteria to be defined as overburdened or significantly overburdened for the SRF programs.

  • CEJST will not be able to be used in future updates to criteria as it was removed from the federal website in January of 2025 and will not be updated. EGLE is hopeful that a similar tool will be available in future years to compare its numbers to.