ARPA Funding for Water & Sewer Infrastructure

The American Rescue Plan Act (ARPA), the latest Covid relief bill passed in March 2021, includes aid for state and local governments. Vermont will receive more than $1.25 billion of Coronavirus State and Local Fiscal Recovery Funding from ARPA.

If your utility wants to benefit from this funding, now is the time to be considering whether you are eligible for a state-funded project and asking your town’s officials to include water/sewer projects in their ARPA fund planning. Here’s a toolkit to help you advocate for funding.

Read our FAQs about ARPA funding for water and wastewater systems (updated 1/28/2022)

Funding for Municipalities

Vermont’s cities, towns, and villages will receive about $200 million in total. City councils and selectboards will have discretion over how to spend their allocations. Towns will receive funds in 2021 and 2022 and have until December 31, 2026 to spend the money. This spreadsheet shows how much funding your town will receive.

Below are further details about how municipal funding can benefit water/wastewater systems.

Guidelines for Water & Sewer Projects

Eligible uses of municipal ARPA funds include making necessary investments in water or sewer infrastructure and stormwater projects with water quality benefits. Project eligibility follows the same guidelines as those for EPA’s Clean Water State Revolving Fund and Drinking Water State Revolving Fund.

View EPA Clean Water Fund Eligibilities

View EPA Drinking Water Fund Handbook

In addition, ARPA funds to be spent on a few types of projects not included in CWSRF/DWSRF eligibility guidance, such as drinking water expansion projects to support future population growth; rehabilitation of dams and reservoirs for drinking water supply; and stormwater infrastructure projects, regardless of whether they have a water quality benefit.

Contact your Regional Planning Commission for help determining which projects are eligible and for help with project development. Each RPC has an expert to help with ARPA questions.

A town may transfer funds to special-purpose units of government, such as fire districts or water districts. This should be done through a sub-grant or contract that includes a written agreement of the amount of funding, payment schedule, and pass-through requirements such as reporting.

ARPA funds may be pooled for regional projects provided that the project is an eligible use of funds.


Towns will receive the funds in August/September 2021 and August/September 2022.

Funds must be obligated by the end of 2024 and spent by the end of 2026. 

State Funding for Water Quality Initiatives

The State of Vermont received more than $1 billion of ARPA funding. The Agency of Natural Resources has been allocated about $100 million of this on a variety of water quality initiatives. See information about ARPA funding from ANR.

Here’s a list of projects that may be beneficial to water/wastewater systems, with a link to the description and eligibility criteria.

   CSO Abatement

    • $25 million to help Vermont municipalities fast-track planned sewer overflow (CSO) abatement projects that will reduce pollution in streams and lakes.
    • Applications will be through SRF, and funding will be given as 100% grants (not loans).
    • More info from ANR

   Wastewater Pretreatment

    • $10 million to invest in wastewater pretreatment systems that will allow business/industry to send high-strength waste to municipal wastewater treatment facilities.
    • A second round of funding is now available. Proposals are due 7/21/23.
    • More info from ANR

   Village Water/Wastewater

    • $30 million to help villages develop or expand public drinking water systems and community wastewater disposal systems. Funding can be used for engineering design and construction.
    • More info from ANR

   Manufactured Home Communities

    • $15 million to provide technical and financial assistance to mobile home parks for drinking water, wastewater, and stormwater projects. Funding can be used for a needs assessment and construction.
    • More info from ANR

Funding Criteria

The Agency of Natural Resources is currently developing funding criteria. Once the criteria have been established in the coming months, guidance and applications will be released.