What's New with the SRF? - Iowa League of Cities


What's New with the SRF? - Iowa League of Cities

What’s New with theSTATEREVOLVINGFUND?Patti Cale-FinneganDepartment of Natural ResourcesLori BearyIowa Finance Authority

Today’s Topics1. What’s New2. What’s Not Really NewBut That You Might BeInterested In

What’s New: Interest Rates•Current interest rateis 3%.•Interest rate for 20year loans will bereduced to 1.75% onSeptember 28, 2012.

What’s New: Fees•Origination feerecently reduced from1% to 0.5%•Servicing fee 0.25%Only charged onoutstanding balance.Billed twice/year withinterest

What’s New: Savings$5,000,000 20 year SRF loanOLD COSTS NEW COSTS SAVINGS1% origination fee $50,000 .5% origination fee $25,000 $25,0003% interest $1,721,964 1.75% interest $969,213 $752,751servicing fee $156,975 servicing fee $138,459 $18,516$1,928,939 $1,132,672 $796,267

What’s New: Savings$10,000,000 20 year SRF loanOLD COSTS NEW COSTS SAVINGS1% origination fee $100,000 .5% origination fee $50,000 $50,0003% interest $3,604992 1.75% interest $2,032399 $1,572,593servicing fee $338,888 servicing fee $290,343 $48,545$4,043,880 $2,372,742 $1,671,138

What’s New: Extended Financing“As an alternative to the traditional30-year mortgage, we also offer aninterest-only mortgage, balloonmortgage, reverse mortgage, upsidedown mortgage, inside outmortgage, loop-de-loop mortgage,and the spinning double axelmortgage with a triple lutz.”

What’s New: Extended Financing• Up to 30 years based on useful life.•DWSRF – must be disadvantaged based on CDBGcriteria.•CWSRF – available to all projects. Nondisadvantagedcommunity interest rate is 2.75%.•DWSRF and CWSRF – disadvantaged rate is 1.75%.

What’s New: CWSRFDisadvantaged Status•Communities must be determined to be disadvantaged based oncriteria in Iowa Code section 455B.199B, DisadvantagedCommunities Variance, as amended by Senate File 407 on April28, 2011.•DNR currently working on rules to implement the statute.•SRF will use draft forms to establish disadvantaged status forpurposes of allowing reduced interest rate.

What’s New: “WRR” Projects•Water Resource Restoration “sponsoredprojects”•Nonpoint source project (e.g. greeninfrastructure, watershed protection)paired with wastewater loan•City borrows more, repays same amount,gets two projects for the cost of oneServicingFeesInterestPrincipal•Currently doing pilot project, working onapplication processCurrentCWSRF LoanCWSRF Loanwith WRRProject

What’s New: SRF Has Loaned $2Billion to Iowa Communities$2,500,000,000$2,000,000,000$1,500,000,000$1,000,000,000$500,000,000Drinking waterNonpointWastewater$-

What’s Not Really NewSRF BackgroundThe SRF is one of Iowa’sprimary sources offinancing for drinkingwater and wastewaterinfrastructure, stormwater quality, andnonpoint sourceprotection

What’s Not Really NewSRF BackgroundSRF programsauthorized by CleanWater Act and SafeDrinking Water Act andadministered by U.S.EnvironmentalProtection Agency

What’s Not Really NewSRF Background

What’s Not Really NewSRF Background• Iowa Department of Natural Resources– Program planning and prioritization– Project planning and permitting– Environmental review– Federal compliance• Iowa Finance Authority– Financial management– Bond issues– Loan processing– Loan disbursements

State Revolving Fund Organizational Structure -- IowaTerry Branstad,Iowa GovernorBill Northey, IowaSecretaryof AgricultureChuck Gipp,Department of NaturalResources DirectorDavid Jamison,Iowa FinanceAuthority DirectorDepartment ofAgriculture andLand StewardshipAdministrativeServicesDNR GrantsManagerEnvironmentalServicesWater QualityBureauIFA SRF CoordinatorSRF FinanceOfficerProgramSpecialistsLocal WaterProtection, LivestockWater Quality Facilities,Storm Water QualityDNR SRF Coordinator andTeam LeaderNPDESPermittingWastewaterEngineeringWater SupplyOperationsWater SupplyEngineeringOn-SiteWastewaterCWSRF ProjectManagersAdmin.AssistantEnvironmentalReviewDWSRF ProjectManagers

1989 - 2002LOW-INTEREST LOANSFORWater and wastewaterinfrastructure only

2003 - PresentPlanning and DesignWater andWastewaterOnsiteSepticSystemsSoil, Sediment, and NutrientManagementLake and Wetland RestorationBrownfield CleanupEnergy and Water EfficiencyUrban StormwaterLandfill ClosureSourceWaterProtectionLoanForgiveness

Drinking Water SRF• Loans for:– Improvements to publicwater supply systems– Consolidations andconnections– Source water protection• DWSRF set-asides fundtechnical assistance,capacity development,state drinking waterprogram, SWP

Clean Water SRF• Loans for:– Publicly owned wastewatertreatment facilities– Sewer system rehabilitation– New systems for unseweredcommunities– Stormwater management forwater quality– Nonpoint source pollutioncontrol

Types of Loans• Planning & design• Construction• Source waterprotection• Stormwater BMPs• Watershed protection

Planning & Design• 0% financing for up to 3 years• Can be rolled into SRF loans or paid off withother permanent financing• Get projects ready for applications to CDBG,Rural Development, or other funding

Construction Loans• Cities andcounties• Community watersupplies• No reserverequirement

Environmental Review• Environmentalreview specialistassists with ERprocess• SRF pays forpreliminaryarcheology

Source Water Protection• 0% interest rate• Up to 20 year term• For purchase of landor easements, or tofund SWP practices• Based on approvedSWP plan

Stormwater BMPs• For public or private• Must protect or restorewater quality• Must be for non-permittedpractices• No Davis-Bacon orenvironmental reviewrequired

Other Nonpoint Source• Brownfield clean-up• Landfill closure• Wetland restoration• Lake restoration• Other

Agriculture Loans• Work with local Soil and WaterConservation Districts andIDALS• Financing through participatinglenders• Soil and sediment control,manure management• Can be used with cost-share,EQIP, other grants

On-Site Wastewater Loans•Help rural homeownersreplace inadequate septicsystems•Projects reviewed bycounty sanitarians•Loans throughparticipating lenders

Special Requirements• Changes from base SRFprograms started with ARRA in2009• Green projects, loanforgiveness, Davis-Baconcarried over through FFY 2010 -FY 2012 appropriations• Not sure what FY 2013 will allow

Green Projects• Energy efficiency, waterefficiency, green storm waterinfrastructure, environmentallyinnovative– Goal is to go above and beyondtraditional or regulatedapproaches to gain moreenvironmental sustainability• Eligibility determined throughEPA guidance

Green Projects• Equivalent of at least 20% ofcapitalization grant amountsmust be used for greenprojects• Offered loan forgiveness to allgreen projects• Can still fund green projectsbut may not have loanforgiveness

Loan Forgiveness• 20% to 30% of federal grant equivalent• Three categories– Disadvantaged communities– Green projects– Public health (DWSRF)• Individual communities receiving 20% to60% of SRF amount as loan forgiveness

How the SRF Helps• “The SRF allowed the City ofStacyville to make thenecessary improvements toour infrastructure when it wasneeded. ”Harlan BisbeeCity Clerk, Stacyville

How the SRF Helps• “The SRF provided the lowestrates available for the City ofShenandoah to financeimprovements to the WasteWater Treatment Facility. ”Marcia McKay, CityClerk/TreasurerShenandoah

How the SRF Helps• “The City of Ankeny reallyappreciated being able touse SRF funding for ourbrownfield cleanup project,as well as the guidanceprovided by the DNR andIFA staff.”Jolee BelzungDirector of Municipal Utilities,Ankeny

How the SRF Helps• “The low-interest loan madea huge difference in mylivestock water qualityproject. The people I workedwith were helpful and thepaperwork was simple. ”Justin RozeboomSioux County

How the SRF Helps• “This was our first experiencewith the SRF. We appreciatedall the assistance we receivedfor our many questions!”Lyon-Sioux Rural Water

For more informationPatti Cale-FinneganIowa Department of Natural Resources515-725-0498Patti.cale-finnegan@dnr.iowa.govLori BearyIowa Finance Authority515-725-4965Lori.beary@iowa.gov

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