WEDA Winter Conference
January 11, 2011
Community Programs
Funding FY 2010
WEP
CF
• Direct Loan $7,148,000
$1,820,000
• Grant
2,429,000
97,000
• Guaranteed
891,000
1,280,000
**Match is not required, but leveraging is
encouraged to maximize our allocations.
Funding Example
WWDC Loan
WWDC Grant
MRG
AMG
SRLF
RD Loan
RD Grant
Applicant
Total Cost
$1,048,000
1,248,000
1,000,000
1,887,239
1,406,761
3,000,000
3,000,000
2,130,000
$14,720,000
State Funding = 44.7%
RD Funding = 40.8%
Applicant Funds = 14.5%
Rural Utilities Program
Community Facilities Programs
• Guaranteed Loans
• Direct Loans
• Grants
Community Facilities Programs
What is an essential Community Facility?
• One that is needed for the orderly development of the
community.
• Serves the local community and is a function that is typically
provided by some branch of government.
• This cannot include any private or commercial undertakings.
Community Facilities Programs
WHO MAY RECEIVE ASSISTANCE ?
• Public Bodies:
– Cities, Counties or Special Purpose Districts
• Indian Tribes
• Non-Profit Corporations
• Population Limits:
– Towns up to 20,000 population (2000 Census)
• In Addition, Borrowers must:
– Have the legal authority to borrow and repay loans, to pledge security for
loans, and to construct, operate, and maintain the facility or services.
– Be financially sound and be able to organize and manage the facility
effectively.
– Be unable to obtain needed funds from other sources at reasonable rates
and terms.
Community Facilities Programs
Authorized CF Loan/ Grant
Purposes
• To construct, enlarge, extend, or otherwise
improve essential community facilities
providing essential service primarily to rural
residents.
–
–
–
–
Heath Services
Community, Social, or Cultural Services
Transportation Facilities
Industrial Parks
CF Maximum Loan, Rates, and
Terms
• No maximum dollar amount. Loan based on
applicant’s needs and ability to repay.
• Interest Rates are dependent upon Median
Household Income for the service area - rates are
set quarterly based on the current GO Bond index.
Lowest rate available 4.25%.
• Maximum Term - 40 years, State Statute, or useful
life of facility, whichever is less
CF Grants
*Grant assistance may be available for up to 75%
of project costs. A scale has been developed to
predetermine grant funding limitations based on
population and income. Most communities in
Wyoming only qualify for 15 to 35% grant
assistance.
* Further limited to the minimum amount sufficient
to provide economic feasibility to the proposed
project and either $50,000 or 50 % of a States
annual allocation whichever is greater.
Rural Utilities Programs
• Water and Waste Disposal Loan
and Grant
• Water and Waste Disposal Loan
Guarantee
• Solid Waste Management Grant
Rural Utilities Program
Water and Environmental
Programs (WEP)
•
•
•
•
Water & Waste Disposal Loans/Grants
Solid Waste Management Grants
Technical Assistance & Training Grants
Rural Water Circuit Rider/Technical
Assistance
–
–
Wyoming Association of Rural Water Systems
(WARWS)
Midwest Assistance Program (MAP)
WEP - Eligibility Criteria
• Non-profit Associations, Indian Tribes & Public
Entities - municipalities, counties, special purpose
districts and authorities, joint powers boards
• Rural areas / service area with populations of less
than 10,000
• Be unable to obtain credit elsewhere
WEP - Eligibility Criteria
(Continued)
• Have the legal capacity to borrow and repay
the loan, to pledge security, to own and
operate the proposed system
• Be financially sound and able to manage the
facility effectively.
WEP Authorized Loan/Grant
Purposes
• Construct, repair, improve, expand,
or otherwise modify rural water
supply and distribution including
pipelines, hydrants, pumping
stations, treatment, and storage
• Acquire water supply or water
rights (i.e..: reservoirs, wells)
WEP Authorized Loan/Grant
Purposes (Continued)
• Construct, repair, improve, expand, or
otherwise modify waste collection,
pumping, treatment, or other disposal
facilities
• Related soft costs (i.e.: engineering, legal,
ROWs, land acquisition, bond counsel,
accounting costs)
WEP Maximum Loan, Rates, and
Terms
• No maximum dollar amount. Loan based on
applicant’s needs and ability to repay.
• Interest Rates are dependent upon Median
Household Income for the service area - rates are
set quarterly based on the current GO Bond index.
Lowest rate available 2.50%.
• Maximum Term - 40 years, State Statute, or useful
life of facility, whichever is less
WEP Loan and Grant Limitations
• Grants awarded where necessary to help
achieve reasonable user rates:
–
–
–
Maximum grant consideration is 75% where MHI is
below $30,215 (poverty level) Must alleviate health
and safety issues.
Maximum grant consideration if 45% where MHI is
between $30,215 to $37,769 (intermediate level)
No grant funds where MHI is $37,769 or greater
(market rate)
THE PROCESS
• PRE-APPLICATION PHASE:
» Determine Applicant’s eligibility (review of
organizational documents)
• ENVIRONMENTAL REVIEW PROCESS
Environmental assessment of project location
(30 - 120 days depending on type of Class Action)
Agency prepares for CF and independent consultant
for WEP
• FORMAL APPLICATION PHASE:
» Preliminary Engineering/Architectural Report
(PER) to determine project feasibility
» formalize agreements with architect or engineer
» Financial Feasibility Study
» Public Meeting - Community Consensus
» Funds Obligated, letter of Conditions issued
» Interim financing Arrangements made for
construction period
» loan closed and funds disbursed after final
inspection and acceptance of project
Criticisms of RD Funding
• RD review of project scope,
design, and costs in addition to
DEQ’s approval
• Environmental- Mitigation
measures to protect farmland,
wetlands, and floodplains
• Requirement for Municipal
Bonds for Public Bodies- 10%
Debt Reserve Fund (Revenue
Bond)
Advantages of RD Funding
•
•
•
•
•
•
•
Low interest rates
Longest fixed rate term available
Matching funds for State Grants
Commitment prior to authorizing design
No fees for RUS services
RUS’s commitment to customer service
No pre-payment penalties
Best Practices for RD Funding
 Get RD involved early in the project
development!
Board/ Council needs to be engaged in the
process.
Communication is critical.
Thank you!
• Contact Information:
Alana Cannon
Community Programs Director
USDA Rural Development
PO Box 11005
Cheney Federal Building
Casper, WY 82602
307.233.6709