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Fiscal Sustainability Plan (FSP)

Fiscal Sustainability Plan (FSP)

Fiscal Sustainability Plan (FSP) Guidance and FAQs

On June 10, 2014, President Obama signed into law the Water Resources Reform and Development Act of 2014 (WRRDA). Among its provisions are amendments to the Federal Water Pollution Control Act (FWPCA), which includes the administration of the Clean Water State Revolving Fund (SRF) program. The WRRDA requirement to complete and implement a fiscal sustainability plan (FSP) will be a new condition of the SRF loan agreement

Use the search bar to find keywords or read through the headings below to find specific guidance information.

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Guidance

Section 603(d)(1)(E) states that treatment works proposed for repair, replacement, or expansion must develop and implement an FSP that includes at a minimum the following four items:

  1. Inventory of critical assets that are part of the treatment works;
  2. Evaluation of the condition and performance of inventoried assets or asset groupings;
  3. Certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan; and
  4. A plan for maintaining, repairing, funding, and as necessary, replacing the treatment works.

All applicants who submit a Project Plan will need to self-certify they are complying with the FSP requirement or that they are exempt. This FSP Certification form will need to be completed and submitted with the Part III Application.

Prior to final loan disbursement, a review of the FSP will be performed by DEQ staff. The EGLE visit will include a review and discussion of the asset inventory, evaluation of efforts to implement water and energy conservation efforts, and a brief overview of the plan to repair/replace/maintain and funding for those activities. See attachment for some examples of conservation activities.

Frequently Asked Questions

  • No, the FSP can pertain to only those assets that are a part of the SRF-financed project. For example, if the SRF project is on the collection system only, the FSP would only cover the collection system. The FSP does not need to contain treatment plant infrastructure.

  • An FSP is very similar to an Asset Management Plan (AMP) and should be viewed as a "living document" that is regularly reviewed, revised, and expanded. For this reason, there is no final deadline for FSP completion. However, in order to ensure compliance with this new statutory requirement, applicants must certify that they have created and implemented a FSP (containing the minimum components listed above). Applicants must include Items 1and 2 above in their final SRF Project Plan submitted by July 1. Item 4 above should be included in the user charge/rate methodology submittal.

  • Yes, an applicant can request up to $2 million in loan funds to complete an FSP/AMP or to use towards the development/further development of its AMP. If an applicant is receiving SAW funds for AMP development, SRF loan funds cannot be used for the same activities already included in its SAW grant. For example, if condition assessment activities for Districts A and B were included in a SAW grant, those same activities cannot be included in an SRF loan. However, condition assessment activities for District C can be included in the SRF loan. This request of AMP funds should be stated in the applicant’s Project Plan.

  • No, FSPs do not need to be submitted for SRF purposes. DEQ staff may ask to review an applicant’s FSP during a site visit or inspection. If loan funds are being used for the development of an FSP/AMP, Revolving Loan Section staff will ask to review the applicant’s FSP/AMP during their final site visit.

  • An FSP is required for any applicant that is seeking SRF funding for treatment works proposed for repair, replacement, or expansion. FSP’s are not required for new treatment works (there is no existing system) or for nonpoint source projects.

  • You must still complete the certification form and submit it with your SRF Part III Application as well as including the FSP minimum Items 1 and 2 (from the above guidance) with your final Project Plan, and Item 4 with your rate methodology submittal.

  • Yes, loan eligible activities include energy and water assessments and audits.

  • Applicants can find several conservation resources noted in Appendix I Supplemental Information for Implementing Section 603(d)(1)(E)(i)(III)

  • No, the applicant must still have an eligible SRF construction project (i.e., address a water quality problem) to receive the $2 million for asset management program development.

Water and Energy Conservation Examples

Applicant’s that accept SRF assistance must certify that they evaluated and will be implementing water and energy conservation efforts as part of their fiscal sustainability plan. Below are some examples of water and energy conservation efforts that can be evaluated and used to fulfill this requirement.

Additional information can be found by searching for water and energy conservation methods on the Environmental Protection Agency’s website.

    1. Improve efficiency of aeration equipment: Aeration systems in wastewater plants account for about half of a wastewater treatment plant’s energy use. Improved system controls, energy-efficient blowers, and energy-efficient diffuser technologies can reduce costs.
    2. Biogas utilization: Biogas recovered from sludge digesters can be burned to produce electricity and heat buildings at the facility. Biogas can also be used to fuel microturbines – an innovative way to generate power using rotational energy.
    3. Improve pumping efficiency: Ensure that pumps are sized appropriately and install variable frequency drives that allow speed variations to match flow conditions.
    4. Improve efficiency of HVAC and lighting: Replace light fixtures and light bulbs with high efficiency models. Retrofitting HVAC with a more efficient system will have a high initial cost but can reduce energy use by 10-40 percent, generally making it cost-effective over the life of the investment.
    5. Improve efficiency of operations: Installing Supervisory Control and Data Acquisition (SCADA) software can increase the efficiency of process monitoring and operational control.
    1. Plant effluent water system: A plant effluent water system can be utilized to recycle effluent water to wastewater treatment plant systems that normally use treated potable water.
    2. Reclaimed water for irrigation: During the summer months, reclaimed water can be used to irrigate lawns and landscaping rather than potable water.
    3. Reclaimed water for industrial use: Traditionally, pulp and paper facilities, textile facilities, and other facilities using reclaimed water for cooling tower purposes.