EPA Releases Financial Capability Assessment Framework

On Nov. 28, the U.S. Environmental Protection Agency released the “Financial Capability Assessment Framework for Municipal Clean Water Act Requirements.” The framework is designed to help communities develop a more accurate and complete picture of their ability to pay for Clean Water Act obligations, emphasizing factors beyond the 2% threshold for median income.

The new framework builds on the agency’s 1997 “Combined Sewer Overflows—Guidance for Financial Capability Assessment and Schedule Development,” but emphasizes the role of supplemental information. The framework mentions a host of factors that can be used to assess a locality’s financial condition, including poverty rates, income distributions, bond ratings, debt levels, historic water and sewer rates, and more. Additionally, the framework encourages localities to examine all Clean Water Act obligations, from combined sewer overflow consent decree actions, to stormwater permit programs, to wastewater treatment plant upgrades. In this way, the framework also builds on EPA’s 2012 Integrated Planning Framework.

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