Ability To Pay Index

Clean, affordable drinking water and wastewater systems are critical for people in ALL communities. Developing and maintaining this critical infrastructure can be costly. So how do small and financially distressed communities afford updates to, and maintenance of their water and wastewater infrastructure? Many of these communities utilize funds provided by the State through the State Revolving Loan (SRF) fund program. In turn, SRF evaluates each community’s unique circumstances to determine their ability to pay back these loans, and if, and when a community should be granted principal forgiveness.

The economic health of a community can be described in many ways. The Ability To Pay Index (ATPI) and Indicators of Economic Health represent a database of information and analysis developed by the University of Tennessee's Institute of Agriculture for use by the TN Department of Environment and Conservation State Revolving Fund (SRF) loan program. The development and use of the ATPI is required for the administration of SRF loans by the Water Resources Reform and Development Act (WRRDA) of 2014, 33 U.S.C.A. §§ 2201 to 2355.

This database combines a community's unique socio-economic and financial data to determine their economic health and fiscal capacity in order to receive loans through the SRF program. The Ability To Pay Index, or ATPI, is determined using a simple average of nine (9) factors unique to each community. Together, these factors: median household income, unemployment, food stamp dependence, families in poverty, community assets, revenues, debt, and expenditures, and change in population determine a community’s ATPI value. These values have been calculated for all 95 counties and 347 cities and towns across the state. SRF uses this information to set interest rates for loan applicants and award additional subsidies through loan forgiveness, for communities considered economically disadvantaged. Information can change rapidly. Therefore, SRF intends to update the ATPI annually to capture the most current fiscal capacity, changes, and economic trends of communities across the state.

To learn more about your community’s ATPI and Indicators of Economic Health specific to your community, visit the ATPI Dashboard. The dashboard has detailed information about each county and city along with yearly trends of each economic variable used to build an ATPI value.