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STATE REVOLVING FUND LOAN PROGRAMS

STATE REVOLVING FUND LOAN PROGRAMS. SRF CALL FOR PROJECTS TRAINING OCTOBER 11, 2010 Bowling Green OCTOBER 12, 2010 Morehead. What Do We Do?. Fund Infrastructure Projects Using Loans and Grants Facilitate Water and Wastewater Planning. Statewide Planning.

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STATE REVOLVING FUND LOAN PROGRAMS

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  1. STATE REVOLVING FUNDLOAN PROGRAMS SRF CALL FOR PROJECTS TRAINING OCTOBER 11, 2010 Bowling Green OCTOBER 12, 2010 Morehead

  2. What Do We Do? Fund Infrastructure Projects Using Loans and Grants Facilitate Water and Wastewater Planning

  3. Statewide Planning • SB409 mandates KIA to perform statewide planning • Role of planning will become more critical • Statewide planning is ready to be taken to the next level • Sound planning requires a wide range of available information

  4. Prioritization of Projects • There are two prioritization process • ADD rankings • SRF rankings • ADD ranking Process • Planning areas • Define need • Rank projects based on planning area needs

  5. Grants • No New Bond Funded Projects • New SSC Projects • 39 Water and Wastewater Projects • $13.2 Million • Open Grant Projects • 26 grants totaling $4.9 million without project identified • 73 grants totaling $21.7 million without AA

  6. KIA Has 4 Loan Programs • Clean Water State Revolving Fund (Fund A) • Infrastructure Revolving Loan/Grant (Fund B) • State Funded • Interest Rates Currently 3%, 2%, and 1% • Repayment Terms from up to 30 Years • Governmental Agencies Program (Fund C) • Bond Funded • Interest Rates from 3% to Market Rate • Repayment Terms from up to 30 Years • Drinking Water State Revolving Fund (Fund F)

  7. Fund B and Fund C • State Funded program for infrastructure projects, primarily water and sewer, broadband and possible financing for brownfields remediation • Low interest rate • Limited availability of funds to loan • Minimal Requirements • WRIS number (WX or SX) • Uniform System of Accounts and Cost Based Rates • E-Clearinghouse • Adequate Revenue to Repay the Loan • Replacement Reserve Requirement • Loan Servicing Fee of 0.2% • Principal and Interest Repaid Monthly • Submit Audited Financial Statements

  8. What is a State Revolving Fund (SRF)? IT’S A LOAN PROGRAM • Created and Funded by the Federal Government • Clean Water Act (Fund A) • Safe Drinking Water Act (Fund F) • Administered by the State • Kentucky Infrastructure Authority (KIA) • KIA receives grant from EPA • KIA provides 20% State Match • Financial and Administrative Responsibility • Division of Water (DOW) • Environmental Responsibility • Technical Responsibility

  9. Eligible Borrowers • Governmental Agency • City • County • Special District • No Federal Agencies • Project MUST BE listed on the SRF Priority List. (Different from Water Management Council Priority List)

  10. Kentucky’s SRF Programs • Fund A • Clean Water State Revolving Fund • Established in the Clean Water Act • Fund F • Drinking Water State Revolving Fund • Established in the Safe Drinking Water Act • Loans for planning and design (A1 or F1) are available to expedite a project, which may be rolled into a construction loan.

  11. 2012 • Green Projects – 20% of the federal funds received will go to “Green” Projects. • Principal Forgiveness - All systems that qualify for 1% interest rate loans will receive principal forgiveness • 30% principal forgiveness will be offered to CWSRF borrowers. • 35% principal forgiveness will be offered to DWSRF borrowers. • Davis-Bacon Act – Federal wage rates could apply • Currently applies to SRF loans • Expires September 30, 2010 • Could be reinstated when Congress passes new federal budget

  12. FUND A CLEAN WATER STATE REVOLVING FUND

  13. Fund A WE HAVE APPROXIMATELY $143 Million for SFY 2011 AVAILABLE IN FUND A FOR LOW INTEREST WASTEWATER INFRASTRUCTURE LOANS. ~ $80 - $90 Million for SFY 2012

  14. ELIGIBLE PROJECTS - CWSRF • Wastewater Collection, Conveyance, & Treatment Facilities • Storm Water Collection, Conveyance, & Treatment Facilities • Implementation of Nonpoint Source Pollution Control Management Programs; • Purchase of Wastewater System

  15. INELIGIBLE PROJECTS - CWSRF • Laboratory Fees and Other Monitoring Expenses • Operation and Maintenance Expenses

  16. FUND F DRINKING WATER STATE REVOLVING FUND

  17. FUND F WE HAVE APPROXIMATELY $43 Million for SFY 2011 AVAILABLE IN FUND F FOR LOW INTEREST DRINKING WATER INFRASTRUCTURE LOANS. ~ $25 - $30 Million for SFY 2012

  18. ELIGIBLE PROJECTS - DWSRF • Replace Inadequate/Aging Infrastructure • Upgrade Treatment Facilities • Install or Upgrade Storage • Rehab Wells or Develop Source Water • Consolidation/Purchase of Water Systems • Extension of Service to Existing Homes to Address Quantity and Quality Issues • Security Measures

  19. INELIGIBLE PROJECTS - DWSRF • Compliance Monitoring • Operation and Maintenance • Reservoirs (raw water) • Dams or Dam Rehabilitation • Water Rights • Growth • Fire Protection

  20. WHERE TO START? • Project Profile • Call for Projects IMPORTANT DATES: October 1, 2010- DW & CW Call by KIA &DOW January 4, 2011 – Call for Projects Closed January 7–14, 2011 – Project Submittal Verification March 31, 2011- DOW Project Ranking Complete June 1, 2011- Draft IUP and Priority List July 1, 2011- Beginning of Funding Cycle

  21. HOW IS THIS DIFFERENT ? • DOW will use the information from the Project Profile to Rank the SRF Projects. • You DO NOT have to complete an SRF Project Questionnaire Form. • You DO have to get your project endorsed by the Water Management Council • A project submittal verification will be completed in January.

  22. Basic Process • Environmental Review • Includes E-Clearinghouse • Plans Review • Financial Administration

  23. SRF Process Flowchart KIA Board Approval & Binding Commitment Invitation Application Plans and Specs Review Environmental Review KIA Board Approval & Binding Commitment Bid Opening Pre-Construction Conference Start Construction/ Construction Contract Enter into Assistance Agreement Initial Pay Request Construction Complete Closeout

  24. E-CLEARINGHOUSE REVIEW • Obtain E-Clearinghouse Comments • US Fish & Wildlife Comments • State Historic Preservation Office (SHPO) Comments • Natural Resources Conservation Service (NRCS) Comments

  25. DOW - ENVIRONMENTAL REVIEW A project will require a “SERP” (State Environmental Review Process) and a DOW FONSI: • Categorical Exclusion (CE) • Environmental Assessment (EA) • Environmental Impact Statement (EIS) The National Environmental Policy Act (NEPA) requires agencies that receive federal funds to integrate environmental values into their decision making processes by considering the environmental impacts of their proposed actions and reasonable alternatives to those actions.

  26. DOW - PLANS REVIEW • Issue plans approval • Issue permits • Approve change orders • Conduct construction inspections • Supplemental General Conditions must accompany all plans for SRF projects

  27. KIA - FINANCIAL ADMINISTRATION • Invite the high ranking projects to apply for SRF • Process loan application • Examine the financial credibility of the applicant • Ensures that the contracts and engineering services are procured correctly • Ensure compliance with federal “crosscutters” • Distribution of funds

  28. Federal Cross Cutters ENVIRONMENTAL AUTHORITIES National Environmental Policy Act National Historic Preservation Act Archeological and Historic Preservation Act Protection of Wetlands  Flood Plain Management Farmland Protection Policy Act Coastal Zone Management Act Coastal Barriers Resources Act Wild and Scenic Rivers Act Endangered Species Act Clean Air Act Safe Drinking Water Act SOCIAL AUTHORITIES Anti-Discrimination Provisions: Civil Rights Act of 1964 Section 13 of the Federal Water Pollution Control Act Amendments of 1972 Rehabilitation Act of 1973 Age Discrimination Act of 1975 Environmental Justice Equal Employment Opportunity Minority/Women/Small Businesses

  29. Federal Cross Cutters • ECONOMIC AND MISCELLANEOUS AUTHORITIES • Effective Administration • Clean Air Act • Clean Water Act • Debarment and Suspension • Demonstration Cities and Metropolitan Development Act • Uniform Relocation Assistance and Real Property Acquisition Act • Lobbying Disclosure

  30. FINANCIAL ADMINISTRATION THREE AREAS • Before Construction • During Construction • After Project Closeout

  31. Before Construction • Obtain and submit loan application to KIA • Satisfy DOW environmental requirements • Satisfy DOW technical requirements • KIA prepares credit review • Obtain loan commitment from KIA Board • Borrower accepts Commitment Letter • Obtain construction bids • Submit Final Documentation • Execute the Loan Assistance Agreement

  32. During Construction • Send the Draw Request to KIA and DOW • Include Supporting Invoices • Submit by 5th of month to receive funds by 19th • Change Orders have to be approved by DOW • DOW sets Initiation of Operations • All funds must be expended within 6 months of I/O date. • KIA bills interest June / Dec on funds drawn

  33. After Project Closeout • Certificates of Completion are signed • Final Loan amount is established • Final Amortization Schedule is prepared • Exhibit F is executed by Borrower and KIA • Principal and Interest Repayments are due each June 1 and December 1 • Borrower submits annual audited financial statements to KIA

  34. CURRENT SRF RATES Interest Rate set annually by the KIA Board. • Standard Rate is 3.0% (MHI at or above $33,672) • Non-Standard Rate (a) is 2.0% (MHI between $33,672 & $26,938) • Non-Standard Rate (b) is 1.0% (MHI at or below $26,938) • Criteria for Non-standard Rates based on: • MHI of Jurisdiction • MHI of service area • Regionalization • Orders or Judgments • Public Health or Safety Issues • Environmental Concerns • Financial Considerations

  35. REPAYMENTS TERMS Repayment Period CWSRF – 20 Years DWSRF – 20 Years (may be 30 years if hardship community) Financing Expenses CWSRF – 0.2% Servicing Fee DWSRF – 0.25% Servicing Fee Debt Service Reserve: None Replacement Reserve: 2.5% of project amount funded over 10 years

  36. AGENCY CONTACTS DOW Shafiq Amawi Water Infrastructure Branch Branch Manager Buddy Griffin Program Administration Section Supervisor Amanda Yeary DWSRF Coordinator Anshu Singh CWSRF Coordinator Phone 502-564-3410 KIA John Covington Executive Director Sandy Williams Financial Analyst Kasi White Financial Analyst Phone 502-573-0260

  37. For more information contact: Kentucky Infrastructure Authority 1024 Capital Center Drive, Suite 340 Frankfort, KY 40601 (502) 573-0260 www.kia.ky.gov

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