Correspondence among

Hi Liane, This is a follow up on your discussion with Jennifer Crooks - she asked me to confirm that the DWSRF loan funds used for lead service line replacement are eligible for loan (principal) forgiveness. That is correct. The last Capitalization Grant Award has the relevant Terms and Conditions copied below. The method of distributing principal forgiveness (e.g. based on green, disadvantaged status, etc) for communities applying for an SRF loan is up to the state and it must be explained in that year’s IUP. Please let me know if you have other questions. Thank you. Laura 3. Additional Subsidization a. The recipient agrees to provide additional subsidization in the form of principal forgiveness, negative interest rate loans, or grants to recipients of eligible Drinking Water State Revolving loans in accordance with the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235), and shall be so used by the recipient only where such funds are provided as initial financing or to buy, refinance, or restructure debt obligations only where such debt was incurred on or after the date of enactment of P.L. 113-235. b. Priority for additional subsidies should be given to communities that could not otherwise afford such projects or that are defined by the State as disadvantaged. To further ensure sustainability of eligible projects receiving additional subsidies, these subsidies should be directed to: 1) repair, replacement, and upgrade of infrastructure in existing communities; 2) investigations, studies, or plans that improve the technical, financial and managerial capacity of the assistance recipient to operate, maintain, and replace financed infrastructure; and/or 3) preliminary planning, alternatives assessment and eligible capital projects that reflect the full life cycle costs of infrastructure assets, conservation of natural resources, and alternative approaches to integrate natural or “green” systems into the built environment. The recipient agrees to provide in its Annual Report an explanation as to how they did or did not address this provision. xxxEND_PAGE:deq21_b245_0802_0802_1

Date: Wednesday, October 07, 2015 5:11:40 PM Hi Liane, This is a follow up on your discussion with Jennifer Crooks - she asked me to confirm that the DWSREF loan funds used for lead service line replacement are eligible for loan (principal) forgiveness. That is correct. The last Capitalization Grant Award has the relevant Terms and Conditions copied below. The method of distributing principal forgiveness (e.g. based on green, disadvantaged status, etc) for communities applying for an SRF loan is up to the state and it must be explained in that year’s IUP. Please let me know if you have other questions. Thank you. Laura 3. Additional Subsidization a. The recipient agrees to provide additional subsidization in the form of principal forgiveness, negative interest rate loans, or grants to recipients of eligible Drinking Water State Revolving loans in accordance with the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235), and shall be so used by the recipient only where such funds are provided as initial financing or to buy, refinance, or restructure debt obligations only where such debt was incurred on or after the date of enactment of P.L. 113-235. b. Priority for additional subsidies should be given to communities that could not otherwise afford such projects or that are defined by the State as disadvantaged. To further ensure sustainability of eligible projects receiving additional subsidies, these subsidies should be directed to: 1) repair, replacement, and upgrade of infrastructure in existing communities; 2) investigations, studies, or plans that improve the technical, financial and managerial capacity of the assistance recipient to operate, maintain, and replace financed infrastructure; and/or 3) preliminary planning, alternatives assessment and eligible capital projects that reflect the full life cycle costs of infrastructure assets, conservation of natural resources, and alternative approaches to integrate natural or “green” systems into the built environment. The recipient agrees to provide in its Annual Report an explanation as to how they did or did not address this provision. xxxEND_PAGE:deq04_b071_1935_1935_1

Hi Liane, This is a follow up on your discussion with Jennifer Crooks - she asked me to confirm that the DWSRF loan funds used for lead service line replacement are eligible for loan (principal) forgiveness. That is correct. The last Capitalization Grant Award has the relevant Terms and Conditions copied below. The method of distributing principal forgiveness (e.g. based on green, disadvantaged status, etc) for communities applying for an SRF loan is up to the state and it must be explained in that year’s IUP. Please let me know if you have other questions. Thank you. Laura 3. Additional Subsidization a. The recipient agrees to provide additional subsidization in the form of principal forgiveness, negative interest rate loans, or grants to recipients of eligible Drinking Water State Revolving loans in accordance with the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235), and shall be so used by the recipient only where such funds are provided as initial financing or to buy, refinance, or restructure debt obligations only where such debt was incurred on or after the date of enactment of P.L. 113-235. Fe EE OE TA ET OE EE RE TE OL EEE ean TE UOT EER OE EE SEE OEE b. Priority tot addibonel subsidies should fie communities (hal could nol otherwice afford (uch SE ee ee ea Re Ra: . we es . projects or that ere defined by jthe State as dicadvanta ietf, To further ensure sustainability of eligible projects receiving additional subsidies, these subsidies should be directed to: 1) repair, replacement, and upgrade of infrastructure in existing communities; 2) investigations, studies, or plans that improve the technical, financial and managerial capacity of the assistance recipient to operate, maintain, and replace financed infrastructure; 1 = = ee = 2 EOES Pee as Ses xxxEND_PAGE:deq21_b246_0803_0804_1 and/or 3) preliminary planning, alternatives assessment and eligible capital projects that reflect the full life cycle costs of infrastructure assets, conservation of natural resources, and alternative approaches to integrate natural or “green” systems into the built environment. The recipient agrees to provide in its Annual Report an explanation as to how they did or did not address this provision. xxxEND_PAGE:deq21_b246_0803_0804_2