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ICYMI: EPA chief travels to Indy, gives state $436 million loan to bring cleaner water to Hoosiers

Indianapolis Star
By Sarah Bowman
October 9, 2019

Indiana is receiving a $436 million loan, including the largest initial payment, from a federal program that will help finance projects to bring cleaner water to residents across the state.

Andrew Wheeler, administrator of the U.S. Environmental Protection Agency, traveled to Indianapolis to make the announcement with Gov. Eric Holcomb Wednesday afternoon. The loan will help save the Indiana Finance Authority roughly $20 million over having to seek traditional bond financing for a wide variety of infrastructure projects.

“I am excited to be here to announce one of the largest and most consequential water infrastructure loans that EPA has ever awarded,” Wheeler said. “Indiana is using a first-of-its-kind innovative approach that we hope will become a model for other states.”

Indiana, unlike other states, bundled together more than 20 projects from across the state, including in small and rural communities, when applying for the loan.

Proceeds from the loan, made available by the EPA’s Water Infrastructure Finance and Innovation Act, will go to the Finance Authority in the state’s revolving fund. With state dollars and the loan proceeds, Indiana’s revolving fund will be able to lend nearly $900 million to support water infrastructure projects throughout the state.

The biggest project being financed through the program is the DigIndy tunnel system – an underground tunnel being constructed by Citizens Energy Group through downtown Indianapolis to help prevent raw sewage from being dumped into the White River. It will receive $547.5 million of the total.

Sewage overflows have long been a problem plaguing the health of the White River. This announcement comes nearly two weeks after an IndyStar investigation revealed that levels of contaminants and bacteria in the White River – the major waterway running through Indianapolis – make it unsafe for many types of recreation. Although that tunnel will offer major improvements, the series found that infrastructure concerns will leave the river polluted for years to come if additional changes aren’t made.

While this loan, which the state has been working on since 2017, is unrelated to the IndyStar’s series, Holcomb said the coverage shows the importance of protecting our water.

“The White River is a huge asset not just for the city of Indianapolis, our capital city, but for the state of Indiana as a whole. And it’s been there the whole time,” Holcomb said. “The beauty of having that river right outside our window is why we need to make sure we care for it.”

Other recipients of this loan include the cities of Lawrence, Evansville, Greenwood, Crown Point and Delphi, among others. Nearly half of the approved projects will be in rural communities.

This is the first time funds from WIFIA program will be used in rural communities, Wheeler said. EPA has now issued 13 loans through WIFIA, totaling more than $3.5 billion. The program is only a few years old and Congress continues to award additional funding each year, according to an EPA spokeswoman. Wheeler said he plans to talk about Indiana’s approach as he travels to other states, he added, and encourage them to follow suit.

Projects on the drinking water front in Indiana include improvements to water treatment plants, storage tanks, distribution systems, wells and pump stations. Also on the list are features to make the systems more resilient and measures to help conserve water.

Other projects will focus on the wastewater side, such as increasing the capacity for treatment plants and constructing tunnels to prevent sewage from flowing into waterways.

As a result of these efforts, Holcomb said, Hoosiers will benefit from improved drinking water and having fewer pollutants going into Indiana waterways.

The price tag for water infrastructure improvements needed across the state is nearly $2 billion, according to Jim McGoff, director of Environmental Programs for the Indiana Finance Authority. And it grows every year, he added.

Construction and operation of these projects are also expected to create more than 3,000 jobs, officials said at the announcement.

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