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Fiscal Sustainability Plan

Effective with State Fiscal Year (SFY) 2022 financing, Fiscal Sustainability Plans (FSPs) are no longer required for Clean Water Fund Program (CWFP) loans. For projects expected to receive a loan from SFY 2021 funding, the FSP requirement applies. Loans funded as part of the SFY 2021 program may close up to eight months after the end of SFY 2021 (June 30, 2021), or through February 2022. If in doubt about which SFY your loan will be funded from, contact your project manager. For more information, see the CWFP SFY 2022 Intended Use Plan.

For SFY 2021 CWFP projects, read on.

Planning to use financial assistance from the CWFP for constructing your municipal wastewater treatment project? Please be aware that modifications to the Clean Water Act which were enacted in 2014 (section 603(d)(1)(E)) require a recipient of a loan for a project that involves the repair, replacement, or expansion of a publicly owned treatment works to develop and implement a FSP or certify that it has developed and implemented such a plan.

Based on this definition, the CWFP is only requiring FSPs for wastewater treatment systems, including collection systems. It is not required for storm water projects.

NOTE: FSPs are not required for new treatment works (unless an existing treatment works is being replaced) or for projects involving an upgrade that does not involve repair/replacement of any components of the treatment works or expansion of the treatment capacity (e.g., adding advanced treatment).

Required FSP components

A Fiscal Sustainability Plan is required, at a minimum, to include the following components:

  • an inventory of critical assets that are part of the treatment works;
  • an evaluation of the condition and performance of the inventoried assets or asset groupings;
  • a certification that the assistance recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan; and
  • a plan for maintaining, repairing and, as necessary, replacing the treatment works and a plan for funding such activities.
FSPs are an asset management plan with some extra attention paid to energy and water efficiency. FSPs should be treated as "living documents" that are regularly reviewed, revised, expanded and implemented as an integral part of the operation and management of the system.

What documentation is required?

For systems that already have the minimum required components of an FSP in place, certification that the requirement has been met is required prior to the loan closing.

For systems that do not already have the minimum required components of an FSP in place, completion of the FSP will be a condition of the Financial Assistance Agreement. A certification agreeing to this condition must be signed prior to loan closing and an additional certification that the FSP has been completed is required prior to the final loan disbursement and project closeout.

Municipalities are not required to submit the FSP to the department for review. However, during site visits Environmental Loan Construction Management Engineers (CMEs) may ask to verify that: the required components of the FSP exist, the FSP contains the appropriate level of depth and complexity, and it is being implemented.

Are there resources available to help with FSP development?

Many municipalities may already have components of an FSP as part of various documents and databases. Some potential existing sources of required components may include:

  • CMOM (Capacity, Management, Operations, and Maintenance) Program documentation;
  • CMAR (Compliance Maintenance Annual Report);
  • existing system maps;
  • replacement fund schedule (Equipment Replacement Fund (ERF));
  • recent Focus on Energy audit; and
  • Capital Improvement Plans.

Asset Management Plan resources

Here are some tools/resources to help with the development of an Asset Management Plan.

  • Asset management information and resources compiled by United States Environmental Protection Agency (EPA).
  • Handbook on Planning for Sustainability for Water and Wastewater Utilities by EPA.
  • Check Up Program for Small Systems (CUPSS) is a free asset management tool for small wastewater utilities. Developed by EPA's Office of Groundwater and Drinking Water (OGWDW).

Energy audit resources

Here are some tools/resources available to help utilities obtain or conduct energy audits.

  • Focus on Energy offers technical assistance and financial incentives to promote energy efficiency.
  • EPA's Energy Use Assessment Tool can be used (by small- to medium-sized systems) to conduct a utility bill & equipment analysis to assess individual baseline energy use and costs.
  • USDA RD's Energy Programs offer funding to complete energy audits, provide renewable energy development assistance, make energy efficiency improvements, and install renewable energy systems.

Water conservation resources

Here are some tools/resources available to help utilities determine how much water is being conserved.

  • EPA's partnership program, WaterSense, offers tools and resources to promote water efficiency.
  • The free Water Audit Software is specifically designed to help utilities perform water audits; quantify and track water losses; and determine areas for efficiency improvements. To access the free software, you must log in or register. Developed by American Water Works Association (AWWA).
  • The Water Conservation Tracking Tool evaluates water savings, costs, and benefits of conservation programs for a specific water utility. Available to AWE members. Developed by Alliance for Water Efficiency (AWE).
  • Many states have sample plans and guidelines to help utilities develop their own Water Conservation Plan (WCP).
    • For example: The Texas Water Development Board has developed a set of guidelines, tutorials, and example plans to help utilities create a water conservation plan that can be adopted & utilized by different entities.

How is “treatment works” defined by the Clean Water Act?

Section 212(2)(A) of the Federal Water Pollution Control Act, as modified by WRRDA on June 10, 2014 defines "treatment works" as follows:

“The term ‘treatment works’ means any devices and systems used in the storage, treatment, recycling, and reclamation of municipal sewage or industrial wastes of a liquid nature to implement section 201 of this act, or necessary to recycle or reuse water at the most economical cost over the estimated life of the works, including intercepting sewers, outfall sewers, sewage collection systems, pumping, power, and other equipment, and their appurtenances; extensions, improvements, remodeling, additions, and alterations thereof; elements essential to provide a reliable recycled supply such as standby treatment units and clear well facilities; and acquisition of the land that will be an integral part of the treatment process (including land use for the storage of treated wastewater in land treatment systems prior to land application) or will be used for ultimate disposal of residues resulting from such treatment, and acquisition of other land, and interests in land, that are necessary for construction.”

Based on this definition, the CWFP is only requiring FSPs for wastewater treatment systems, including collection systems. It is not required for storm water projects.

Contact information
For information on this topic, contact:
Dave Calhoon, FSP specialist

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