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TDEC says it is adopting EPA recommendations to speed SRF loans, improve documentation and staffing
Summary
TDEC SRF staff told the TLDA Audit Committee on June 23 that EPA's program evaluation contained no findings but recommended operational changes including lowering cash balances relative to disbursement needs, raising staff salary grades, clarifying intended-use plans, and improving data and contract documentation.
TDEC State Revolving Fund (SRF) staff told the Tennessee Local Development Authority Audit Committee on June 23 that the U.S. Environmental Protection Agency's program evaluation for state fiscal year 2023 (federal fiscal year 2024) contained no findings or required actions but offered multiple recommendations to improve program operations.
Veena Jones, identified as TDEC SRF staff, summarized the recommendations and TDEC's responses. Jones said EPA recommended evaluating ways to reduce the SRF cash-to-average-annual-disbursement ratio below two years; TDEC said it has revised readiness-to-proceed and rankability criteria to move shovel-ready projects more quickly into loan processing.
Jones said EPA also recommended higher salary grades for SRF staffing. "We appreciated that recommendation," she said, and stated the SRF has expanded from about five staff to about 23, with one additional account position expected to start next week.
On systems and process improvements, TDEC said it is migrating SRF work into the SmartSimple grant-management system and will issue a request for proposals for a loan-specific database to better manage the loan lifecycle. TDEC reported it has overhauled applicant phases and timelines to make the process more transparent and that it submits federally required data to EPA quarterly; EPA requested monthly entries into a new EPA database, and TDEC said it will consider monthly submission when resources allow.
Other EPA recommendations and TDEC responses included: - Considering an applicant engineer's certification on useful life for financed infrastructure; TDEC said it will evaluate incorporating this during ongoing business process improvements. - Establishing or refining a checklist for Green Project Reserve eligibility; TDEC said it will look at incorporating a checklist and already maintains a version the EPA reviewed. - Adding documentation (a BABA waiver) for projects eligible for design waivers and requesting BABA-specific training from EPA headquarters; TDEC said federal BABA implementation and training has been inconsistent and asked for clearer guidance. - Reviewing contracts and updating standard templates to ensure compliance with federal prohibitions on certain telecommunications and video surveillance equipment and recent executive orders; TDEC said its office of general counsel is reviewing contracts to meet federal requirements. - Updating signage templates and SOPs, including American Iron and Steel certification letters, and continuing to ensure compliance with the federal flood risk management standard; TDEC said it has been updating templates but that EPA has changed signage requirements several times.
Jones told the committee the clean water and drinking water SRF recommendations are largely identical and said SFY2022 follow-up recommendations were similar to those for SFY2023. Committee members asked few substantive questions during the presentation.
TDEC characterized its responses as either accepted, in-progress, or under consideration, and requested EPA headquarters provide targeted training where federal guidance remains unclear. No formal committee action was taken; the presentation was informational.
