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Board authorizes disaster‑relief clean‑water loans (principal forgiveness) for three Southwest Virginia projects
Summary
DEQ will execute loan agreements that function as principal‑forgiveness grants totaling roughly $9.3 million in federal disaster funds; three high‑need projects in Buchanan County and two towns were prioritized for immediate funding to repair sewer infrastructure damaged by recent hurricanes and wildfires.
The State Water Control Board authorized DEQ staff to execute loan agreements using federal disaster supplemental funding administered through Virginia’s Clean Water Revolving Loan Fund to address wastewater infrastructure damage in Southwest Virginia.
Megan Mayfield, director of DEQ’s Office of Clean Water Finance, said the American Rescue Act (Title 7) made supplemental funding available to state revolving funds and that Virginia’s allocation is "just over $9,300,000." DEQ used a targeted, expedited process rather than the standard competitive solicitation to prioritize projects that reduce flood or fire damage risk and support resiliency for wastewater treatment works located in FEMA‑designated areas updated in October 2024.
Staff proposed principal‑forgiveness loans for three projects: the town of Freeze (request and proposed funding of $890,900) to rehabilitate two damaged sewage lift stations and install generators; the town of Chilhowey (request and proposed funding of $2,280,000) to replace aerial sewer crossings and repair gravity lines; and a set of Buchanan County repairs (applicant requested $8.9 million; DEQ proposed funding $6.1 million) to fix dozens of manholes and laterals damaged by flooding. Mayfield said the loans are structured as 100% principal forgiveness to avoid adding debt burdens to small localities.
Board members asked how the remaining gap for Buchanan County might be filled; Mayfield said the county will pursue engineering planning, possible traditional revolving‑loan financing, and other emergency funds through the Virginia Resources Authority and state emergency programs.
The board voted to authorize loan execution for the three listed projects following a staff recommendation. DEQ said it will coordinate disbursement and continue outreach with affected localities and the governor’s transformation team to ensure timely use of funds.
