1. Drinking Water Funding Faces a Looming Fiscal Cliff — Current Eligibility Held Steady for Now The board unanimously approved the 2026-27 Drinking Water State Revolving Fund Intended Use Plan, maintaining current grant and principal forgiveness eligibility criteria. However, staff projected a $1.1 billion funding gap over the next three fiscal years for construction and planning projects as federal Bipartisan Infrastructure Law funds wind down and state surpluses shrink. Staff stated they plan to hold stakeholder workshops in early 2027 to address how the program will respond to anticipated funding shortfalls and potential future prioritization needs when less money is available — a decision that could directly affect rural and agricultural community water system upgrades. Over the past year, the Division of Financial Assistance executed 83 new agreements totaling over $900 million, but staff emphasized that pace will be difficult to sustain.
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