April 2012, Vol. 24, No.4

Small Communities

State revolving loan funds repair and replace failing home wastewater systems

Rebecca Fugitt

Approximately 25% of homes in the United States use an individual onsite home wastewater treatment system or small-community cluster system to manage wastewater. These household treatment systems are located primarily in rural and suburban areas not served by public wastewater treatment facilities. Although the U.S. Environmental Protection Agency (U.S. EPA) has recognized that properly designed and managed decentralized wastewater systems are a cost-effective and sustainable option to ensure protection of public health and the environment, the use of onsite home wastewater treatment systems for sustainable wastewater treatment presents some unique challenges.

More than half of the home systems existing today were installed prior to the implementation of modern state or local wastewater regulations. Therefore, some system designs may be substandard. Other systems may be at or near their design life spans. The responsibility for management, maintenance, and replacement of individual home wastewater systems is the responsibility of the system owner, who usually is not well educated on how to properly care for the system and who must personally finance the replacement of the system if and when it fails. When homeowners do not have the financial ability to replace a failed wastewater system, public-health nuisance conditions often occur, affecting neighbors and local water quality.


Condition assessment 

A 2007 survey conducted by the Ohio Department of Health (based on data from county health districts) showed that 23% of nearly 1 million home wastewater treatment systems in the state were failing. An additional 13% were predicted to fail in the next 5 years. (See the QR code and link on p. 57 to download the full survey report.) For purposes of this survey, failure was identified in seven ways:

  1. breakout or surfacing of wastewater on the ground,
  2. wastewater backup into the home,
  3. positive dye-test of the system,
  4. structural failure of the system,
  5. suspected or known groundwater contamination,
  6. discharges exceeding state public-health nuisance standards or household discharge permit limits, and
  7. identified impaired streams or waterways.

The primary reasons cited for failure were improper system design for the soil type and insufficient operation and maintenance. Many county health districts identified that homeowners did not have the funds to repair or replace these failing systems, especially given current economic conditions. The average cost of home wastewater system replacement in Ohio is approximately $8200 but can range from about $6000 up to $25,000, depending on site-specific conditions and daily design-flow rates.


Finding the funds 

To meet the need for system repairs and upgrades, the Ohio Department of Health partnered with the Ohio Environmental Protection Agency (Ohio EPA) Division of Environmental and Financial Assistance to develop a program to help fund repairs or replacement of failing home wastewater systems for low-income homeowners. This program uses the state Water Pollution Control Loan Fund (WPCLF).

The program is based on a successful American Recovery and Reinvestment Act (ARRA) funding project implemented in 2009 and 2010. The ARRA project provided $3.2 million in funding for the repair and/or replacement of 470 home wastewater systems across Ohio. It used ARRA’s Green Project Reserve fund allocations; decentralized system upgrades fall in the Environmentally Innovative Green Project Reserve category.

WPCLF funding historically has been used to fund public water and wastewater projects; the ARRA project was innovative because it was the first time a state had used this type of funding to assist homeowners in rural and suburban areas with the repair and replacement of individual home systems.

In February 2010 — on the first anniversary of the ARRA project funding — U.S. EPA Administrator Lisa Jackson recognized Ohio for the successful implementation of the project and innovative approach.

Building on the success of the ARRA project, Ohio EPA and the Ohio Department of Health set aside $6 million from the WPCLF in 2011 to fund the repair and replacement of failing home wastewater systems. This year, approximately $2 million will be set aside.

The funds are provided as zero-interest, principal-forgiveness loans to a county or city (water and sewer districts also are eligible) that applies for funds to repair or replace an identified number of wastewater systems in its jurisdiction. After receiving an award, the county or city then typically designates the county housing improvement program or a similar local agency to conduct the work of accepting and reviewing local applications, securing bids and local contracts, overseeing system installations, and fulfilling reporting requirements to the state.

The work is bid out to local contractors by the county agency, which then pays the contractor after successful installation and inspection of the system. Local health districts coordinate with the county agency on the identification and certification of the failing home wastewater systems, as well as the subsequent design, permitting, inspection, and final approval of the treatment systems’ repair or replacement installation.


Choosing the recipients 

Low-income homeowners have been targeted for assistance during the initial implementation of this program. Homeowners with income levels up to 100% of poverty guidelines are eligible to receive 100% funding for replacement costs, including all permit costs. Homeowners with income levels between 100% and 200% of poverty guidelines are eligible to receive 85% of all system costs, with a 15% local match (which can be provided by the homeowner or other organizations or programs). The Ohio Department of Health hopes to expand the scope of the project by offering assistance to homeowners with progressively higher income levels.

For the 2011 project year, 49 counties and one city applied for funding. Project awards ranged from $40,000 to $160,000 per county. After the funding is awarded, up to 18 months is allowed for the completion of all system installations within the county or city. This period allows for system installations to span two construction seasons and better ensure that all applicable system repairs or replacements are completed. Ohio EPA anticipates offering this funding each year while Green Project Reserve projects are authorized under WPCLF federal funding.


Rebecca Fugitt is program manager of the residential water and sewage program at the Bureau of Environmental Health in the Ohio Department of Health. 


Download the Ohio Department of Health report
Survey of Household Sewage Treatment Systems Operation and Failure Rates in Ohio.



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