The city received a $225,000 Community Development Block Grant and a $227,422 low-interest loan to improve the quality of treated wastewater going from Sioux Rapids into the Little Sioux River.
During certain times of the year, the Little Sioux River exceeds EPA limits for the amount of E. coli found in samples.
"We need to purify the water just a little bit better before it enters the Little Sioux," said Sioux Rapids Mayor Andrew Hasley. "There are many communities around the state that have to do the same thing."
Gov. Chet Culver's office made the announcement and called the federal recovery funding one more step in Iowa's efforts to improve public infrastructure and create good jobs.
"Iowa continues to lead the way in making use of federal recovery funds to meet our infrastructure needs, support good jobs, and work our way out of this economic recession," Culver said. "These funds are going to make a positive difference to communities across our state working to improve water quality."
Other details in the governor's announcement include:
*Funding sources for the projects include Community Development Block Grants and Environmental Protection Agency loans and grants distributed through the State Revolving Fund, a program jointly administered through the Iowa Department of Natural Resources and the Iowa Finance Authority.
*The federal recovery appropriations include $1 billion in community block grants to states and local governments. Eligible projects include sanitary sewer system improvements, water system improvements, water and wastewater treatment facilities, storm sewer projects related to sanitary sewer system improvements and rural water connections.
The American Recovery and Reinvestment Act also appropriated $4 billion for assistance to help communities with water quality and wastewater infrastructure needs and $2 billion for drinking water infrastructure needs. A portion of the funding will be targeted toward green infrastructure, water and energy efficiency, and environmentally innovative projects.
Iowa is expected to receive an estimated $2.5 billion, which will be used to support state programs, such as education, Medicaid and transportation projects.
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