The federal recovery program requires states to allocate these funds for projects on the state's priority project list.  In Michigan, the process is handled through the State Revolving Fund (SRF) program for sewer projects and the Drinking Water Revolving Fund (DWRF) for drinking water projects.  These existing programs annually provide low-interest loans to communities across the state for infrastructure projects.

Recovery funds will be distributed in the form of principal loan forgiveness, allowing the state to allocate money through its traditional loan program with recipients required to repay only a percentage of the original loan amount.  For communities receiving the funding, it is the equivalent of receiving a grant for that portion of the project.

Projects that were submitted last year and are currently on the Fiscal Year 2009 priority list will be eligible to receive an equitable share of 75 percent of the available ARRA funds in both the SRF and DWRF programs.  The projects on this list are the projects in Michigan that have been carefully reviewed and will be shovel-ready once all contract requirements are met and funding is made available.

The remaining 25 percent of the funding is being held for projects that are or become eligible for funding in the first quarter of FY 2010. 

Governor Granholm noted the ARRA requirement that 20 percent of the funding be spent on "green" projects, and while Michigan has eligible "green" DWRF projects already on the priority list, it will be seeking additional SRF projects that meet the "green" criteria under the act.  U.S. Environmental Protection Agency guidance on what is considered a "green" project is available online at: http://www.epa.gov/water/eparecovery/
 
"This funding is not the solution to all our infrastructure needs, but it's a tremendous help not only for these communities but for those looking to create jobs and improve their systems in the near future," said Granholm.  "While it is a one-time source of money, it will ultimately aid our efforts to revitalize our communities and our economy for years to come."

The Department of Environmental Quality will work with eligible communities to finalize contract requirements required by the ARRA.  Projects receiving funding must comply with the federal Davis-Bacon Act prevailing wage requirements as well as requirements that all the steel, iron, and manufactured goods used in the project be produced in the United States.