Water Infrastructure Financing Programs

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• Water Infrastructure Financing Programs
• Jeff Freeman
• Deputy Director
• www.positivelyminnesota.com/community/assistance/p
  fa.htm

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PFA Water Programs

• Clean Water State Revolving Fund
• Drinking Water State Revolving Fund
• Wastewater Infrastructure Fund (WIF)
• Small Community Wastewater Treatment program
• Total Maximum Daily Load (TMDL) grant program
• Phosphorus Reduction grant program

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CW and DW Revolving Funds

• States primary water infrastructure financing
  programs
• Over 550 wastewater and drinking water loans for
  2.4 billion
• Total interest savings to borrowers 552
  million
• Base interest rate discount 1.5 below market
  rate.
• Communities under 2,500 may receive additional
  discounts
• Funding priorities follow the Health Dept (dw) or
  MPCA (ww and sw) Project Priority Lists (PPL).
• Projects must be listed in fundable range on
  PFAs annual Intended Use Plan (IUP).

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CWRF and DWRF Loans

• Borrower (city, county, township, or sanitary
  district) must issue a general obligation revenue
  bond to PFA as security for the loan.
• Requires use of bond counsel but no other costs
  of issuance.
• Can finance 100 of eligible project costs.
• As-bid construction costs, engineering,
  inspection, legal.
• Funds disbursed monthly based on incurred costs.
• Loan terms up to 30 years.
• Semi-annual repayments (February and August).

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Program Responsibilities

• Health Dept (DW) / MPCA (WW)
• Review projects for eligibility and determine
  priorities. (Project Priority List - PPL)
• Review facility plans (ww projects only) and
  plans and specifications.
• Ensure environmental reviews are properly done.
• Certify approved projects to PFA.
• Public Facilities Authority
• Prepare annual funding list.
• (Intended Use Plan - IUP)
• Review loan applications.
• Set interest rates and award loans.
• Disburse loan funds and collect loan repayments.

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CWRF or DWRF Loans Preliminary Steps

• Submit request to MPCA (ww) or Health (dw) to get
  project ranked on PPL.
• Submit facility plan to MPCA (ww only).
• Submit IUP request to PFA.
• In spring prior to the state fiscal year when
  construction is expected to start.
• IUP follows state fiscal year July 1 to June 30.
• WW projects must have an approved facility plan
  to be eligible for the IUP.

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CWRF and DWRF Loans After IUP Approval

• Submit required documents within 6 months after
  IUP approval date.
• Plans specs, other required items to
  MPCA/Health
• Loan application to PFA
• PFA review will focus on dedicated revenues for
  debt service, OM.
• User charges (current and planned increases)
• Special assessments, SAC/WAC charges, other
• MPCA/Health certifies project to PFA.
• Applicant takes bids, submit as-bid costs to PFA.

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Federal Stimulus Funds (ARRA)

• Will be awarded first come first serve as
  projects on the IUPs are ready to proceed
• Ready to proceed
• Approved/certified by PCA/MDH
• As-bid costs submitted to PFA
• Expect to start awarding ARRA funds by mid-May to
  projects on amended 2009 IUPs
• Will continue to award ARRA funds to projects on
  2010 IUPs to the extent funds are available

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ARRA Principal Forgiveness

• Base grant 20 of project costs, up to 2
  million
• Supplemental grant up to 80 of system costs
  over 1.4 MHI, up to 4 million
• Green infrastructure grant 25 of green
  eligible project costs, up to 2 million
• For eligible projects, balance of funding will be
  provided as a loan at regular SRF rates

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ARRA Requirements

• Buy American iron, steel, and manufactured
  goods
• Davis-Bacon federal wage rates
• Additional reporting requirements regarding jobs
  created and retained

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2010 PPL/IUP Schedule(approximate)
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Wastewater Infrastructure Fund (WIF)

• WIF provides supplemental assistance for high
  cost, high priority wastewater projects
• WIF can provide grants to match with USDA Rural
  Development for small rural communities, or
• For non-RD projects WIF provides zero interest
  loans for up to 40 years, with payments deferred
  for first 20 years while SRF loan is repaid
• WIF loan amount determined based on eligible
  project costs over 5 of the market value of
  the project area
• All WIF projects must be ranked on the PPL
• Projects seeking WIF matching grants with RD are
  not required to be on IUP

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Small Community Wastewater Treatment Program

• Loans and grants to help small communities
  replace failing septic systems (ISTS) with new
  ISTS systems, including small clusters and
  mounds.
• Loans at 1 for 100 of eligible costs. 50
  grants for communities with below average median
  income
• New systems must be publicly-owned
• Property owners that want to participate must
  grant a utility easement
• Up-front grants for site evaluation and technical
  assistance
• Applicants must first be ranked on MPCA priority
  list.

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2009 Legislative Session

• Clean Water Dedicated Funds
• Governors budget request for point source
  infrastructure
• Small Community WWT Program - 2.875
• Total Max. Daily Load (TMDL) grants - 15.0
• Phosphorus Reduction grants - 7.5