Board approves $25 million swap between Clean Water and Drinking Water SRF programs

The South Dakota Board of Water and Natural Resources on Feb. 26 approved amendments to the 2026 Clean Water and Drinking Water State Revolving Fund (SRF) intended use plans to allow a $25 million transfer of repayment proceeds and a matching replacement with tax‑exempt leveraged bond proceeds.

Andy, a staff presenter, said the change would address the need for taxable borrower funds in the Drinking Water SRF during federal fiscal year 2026 by transferring $25,000,000 of repayment proceeds from the Clean Water SRF to the Drinking Water SRF and then using $25,000,000 of tax‑exempt leveraged bond proceeds from the planned issuance to provide sufficient Clean Water SRF funds — effectively a net $25 million swap. He noted the board has the authority to transfer up to 33% of each year's drinking water capitalization grant amount between programs and reported available transfer balances of about $95,000,000 from Clean Water to Drinking Water and about $91,000,000 from Drinking Water to Clean Water in staff's current analysis.

The board voted to approve the proposed amendments to both intended use plans. Staff said the transfers would not affect the board's transfer authority ceiling under EPA regulations and were proposed to meet program demand without immediate additional taxable bonding.

Board members had no further questions and moved to adjourn following the vote.