H2O PA – Water Supply, Sanitary Sewer and Storm Water Projects

The H2O PA – Water Supply, Sanitary Sewer and Storm Water Projects Program is administered by the Pennsylvania Department of Community and Economic Development (DCED) through the Commonwealth Financing Authority (CFA). The program was established under the H2O PA Act (Act of July 9, 2008, P.L. 908, No. 63) to support infrastructure projects that improve the provision of essential water and wastewater services. This state-funded initiative is designed to provide single-year or multi-year grants to municipalities and municipal authorities to assist with the construction and enhancement of drinking water, sanitary sewer, and storm sewer systems. The overarching objective of the H2O PA program is to promote the health, safety, and welfare of residents by enabling the development, repair, or expansion of critical water infrastructure. Eligible projects include not only the construction of new systems but also the improvement, expansion, rehabilitation, or consolidation of existing infrastructure. Projects that facilitate regionalization of systems or support collaborative infrastructure solutions among multiple municipalities are strongly encouraged, with at least 50% of available funds reserved for such efforts. Eligible costs under this program include design, construction, land acquisition, security measures, inspection fees, permit and bond costs, and limited administrative overhead. To be eligible, applicants must be municipalities or municipal authorities that own and will maintain the proposed infrastructure. All projects must have commenced construction after January 1, 2007. Additionally, applicants must demonstrate that the project aligns with regional, county, and local comprehensive plans, evidenced by a planning letter from the appropriate agency. A 50% cash match is required, and may come from other funding sources such as PENNVEST or federal programs. Ineligible expenses include refinancing, interest, lobbying, or any costs incurred before the grant approval. Applications must be submitted using the online Single Application for Assistance system. Applicants are required to submit numerous supplemental exhibits including a detailed project description, ownership letter, cost estimate, matching funds commitment, planning compliance letter, zoning map, and permits. The grant evaluation process involves a review by DCED, the Department of Environmental Protection, and PENNVEST, and considers project readiness, economic impact, sustainability practices, and cost-effectiveness. Priority is given to projects under a federal or state mandate such as a consent decree or permit discharge requirements issued after January 1, 2007. The grant range spans from a minimum of $500,000 to a maximum of $20,000,000, with a performance window of up to six years. Applications incur a $100 non-refundable fee. After approval, a commitment letter and grant agreement will be issued electronically, and the recipient must finalize documentation within 45 days. Project costs must be incurred within the period specified in the grant agreement to be eligible for reimbursement. For inquiries, applicants may contact the DCED Site Development Office by phone at (717) 787-6245 or by email at [email protected]. All required forms and guidelines, including this one dated September 2019, are available at dced.pa.gov. Although no future application deadline is currently specified, the program appears to operate on a recurring basis as long as funds remain authorized by the state legislature.

Priority given to system consolidation and projects under federal/state mandates after 2007; include clear cost-effectiveness and planning alignment.