State Water Board adopts drinking water SRF intended-use plan prioritizing failing and at-risk systems

SACRAMENTO — The State Water Resources Control Board voted unanimously Tuesday to adopt its fiscal-year 2025–26 Drinking Water State Revolving Fund intended-use plan, a staff-led document that outlines how roughly $1.04 billion in available drinking-water funding will be prioritized and spent.

The board approved the IUP after a prolonged staff presentation and discussion about how to balance scarce federal and state funds against a large backlog of small-system needs. Board member Nicole Morgan moved adoption of the staff-recommended approach and the board approved it 5–0.

The plan directs Division of Financial Assistance staff to focus grant and principal-forgiveness dollars on systems identified as "failing" or "at risk" under the SAFER program and to continue prioritizing consolidation projects. Staff said the approach is intended to target limited dollars toward systems most likely to leave customers without safe water.

Board staff and presenters outlined the financial and program details behind the plan. Joe Karkovsky, deputy director of the Division of Financial Assistance, told members the division has been managing a heavy workload: about 99 new project agreements in the prior year totaling a little over $700 million, and more than 300 projects still under active management. Karkovsky and other presenters said about $1.04 billion is available for projects in 2025–26, and staff proposed a target of $300 million in repayable loans for the year.

Mike Downey, who leads the loans and grants branch, said staff recommend keeping existing…