Millions remain unspent in federal water-system loan program

The largest federal aid program for improving the nation's drinking water systems has struggled to spend money in a timely fashion despite demand for assistance that far exceeds the amount available, a review by The Associated Press shows.

Project delays, poor management by some states and structural problems have contributed to nearly $1.1 billion in congressional appropriations sitting unspent in Drinking Water State Revolving Fund accounts as of Aug. 1.

Congress established the revolving fund in 1996 as a way to provide low-interest loans to cities, counties and utilities to help pay for maintaining aging water systems.

When loans are not issued and grant money isn't spent, "needed drinking water improvements are not implemented, communities do not receive the intended health benefits and states miss opportunities to infuse funds into the state's economy and create jobs," the agency's inspector general warned last year.

Peter Grevatt, director of the EPA's office of groundwater and drinking water, said states have made "a very significant improvement" in reducing their unspent money and would continue making strides.

The program is also helping to build a $76 million water-treatment plant in Ames, Iowa.

Since the fund's inception, more than 11,500 projects have received assistance totaling $28 billion.