Utilizing EPIC Resources to Strengthen Texas SRF Analysis
At EPIC, we are always looking for ways to transform fragmented data into actionable insights for more informed water infrastructure policy and investments. Over the past year, we have paired two EPIC projects—our Drinking Water State Revolving Fund (SRF) Funding Tracker and the Texas Community Water System Prioritization Tool—to generate deeper analysis and sharper, evidence-based public comments to the Texas Water Development Board (TWDB) on Texas’ Draft Drinking Water State Revolving Fund (DWSRF) SFY 2026 Intended Use Plan.
Bringing Two EPIC Resources Together
DWSRF Funding Tracker: provides systematic analysis of Intended Use Plans (IUPs) and associated project lists (fundable lists and comprehensive lists) across states. For Texas, we analyzed five years of IUPs (SFY22–SFY26), highlighting trends in leveraging, project demand, and state-defined Disadvantaged Community representation. EPIC will be publishing our Findings and Recommendations from this work later this Fall.
Texas Prioritization Tool: consolidates 50+ variables from 11 state and federal datasets, including: EPA’s Safe Drinking Water Information System, US Census data, Duke University’s Water Affordability Dashboard, the Environmental Defense Fund’s Climate Vulnerability Index, and more to deliver service-area level insights. This multi-view approach enables users to examine regulatory compliance, affordability, climate vulnerability, and other indicators of water system risk side-by-side.
Together, these tools created a powerful analytical foundation: the Funding Tracker reveals SRF program-wide trends and capacity, while the Prioritization Tool allows us to zoom in on the community level and test how SRF policies play out for specific systems.
Key Findings for Texas
Using these complementary tools, we identified several important dynamics shaping Texas’ SRF program:
Leveraging expands capacity, but demand is still outpacing supply. From SFY23–SFY25, Texas leveraged over $717 million—more than the total it received in federal capitalization grants over the same period. But our analysis also showed demand continues to rise sharply, leaving many strong projects unfunded.
Small systems dominate applications but continue to face structural disadvantages in accessing funds. Across SFYs 2023-2026, during which states receive supplemental DWSRF funds through the federal Infrastructure Investment and Jobs Act (IIJA), 67–85% of projects on fundable lists came from small systems. Yet the state’s ranking criteria reward larger systems, and caps on principal forgiveness remain too low to make projects affordable for very small applicants.
Disadvantaged communities are much better represented post-IIJA. On average, 52% of applicants (and 72% of those on fundable lists) serve disadvantaged communities, compared to just 6% and 19% respectively in the pre-IIJA year.
Affordability strain is visible, especially for very small systems. Using the Prioritization Tool, we estimated that 3–6% of very small, small, and medium systems face affordability concerns when applying a 3% water rate burden threshold. These systems could benefit from targeted prioritization criteria to ensure access to financing that does not exacerbate existing affordability concerns.
Thresholds for very small system eligibility need refinement. By analyzing Annual Median Household Income (AMHI) tiers with our tool, we showed that need is most acute among systems at or below 125% of statewide AMHI, rather than the 150% threshold currently used by TWDB.
Recommendations for Texas
Based on these findings, our comments to TWDB called for:
Lowering the AMHI threshold for very small system subsidy eligibility to 125% of the statewide AMHI.
Increasing principal forgiveness caps and prioritization points for smaller systems.
Adding affordability criteria to project ranking frameworks.
Continuing and expanding leveraging practices to meet rising demand.
Raising the allocation of Disadvantaged Community principal forgiveness from the state’s SRF Base grant closer to the statutorily allowed maximum of 35%.
Improving transparency around available funds carried over year-to-year and readiness-to-proceed requirements.
Allowing cross-program eligibility so that high-ranking applications to the LSLR or EC programs can automatically be considered under the General Activities program without a separate application.
Why This Matters
Texas has one of the largest SRF programs in the country. The way it allocates funds—whether to very small systems, state-defined DACs, or large urban systems—has implications not only for program accessibility and affordability but also for how federal water dollars are utilized nationwide. By combining our Funding Tracker with the Texas Prioritization Tool, EPIC is demonstrating what robust, data-driven policy recommendations can look like: evidence that is both system-specific and program-wide, actionable for policymakers, and transparent for the public.
This is just the beginning. As we continue to expand the Funding Tracker to 15 focus states and refine the Texas Prioritization Tool while also building a National Drinking Water Explorer Tool, we will be able to generate even more powerful insights into how SRF resources can better deliver on their promise of safe, reliable, affordable drinking water for all.