THE WIFA WAY… AFFORDABLE AND EFFICIENT Angie Valenzuela, Sr. Loan Officer/GADA Program Manager Sara Konrad, Environmental Program Supervisor GFOAZ, February 21, 2013 WIFA TOPICS TO COVER Who we are and what we can fund Who can apply What funding and incentives WIFA offers Other services WIFA provides Highlighted projects Water Reclamation Facility City of Casa Grande WHO WE ARE Water Infrastructure Finance Authority of Arizona Independent State agency “State Revolving Fund” EPA Arizona (Federal Capitalization provides initial funds) (WIFA provides 20% match of Federal Capitalization Grants) Wastewater Loans Water Infrastructure Finance Authority (State Revolving Fund) Bond Holders (provide additional funds) Drinking Water Loans WHO WE ARE Provide loans and grants for drinking water and wastewater infrastructure throughout Arizona Loans: planning, design, improvement, construction, acquisition Grants: planning and design phases More than $1.8B of investment in AZ’s communities since 1992 More than 350 projects Wastewater Drinking Water WHAT WIFA CAN FUND WHO CAN APPLY Wastewater Drinking Water Publicly-owned wastewater by political subdivisions Private ACC-regulated systems facilities Public water systems owned Additional eligibility criteria for noncommunity systems STREAMLINED APPLICATION PROCESS Financing available year-round Loans approved at bimonthly board meetings Three-step application process See flowchart of loan application process STREAMLINED APPLICATION PROCESS 1. Complete online Project Priority List (PPL) application Once submitted, project is assigned to a WIFA project manager System/Project is scored and ranked on WIFA’s Project Priority List STREAMLINED APPLICATION PROCESS 2. Obtain debt authorization Governmental systems with a population of <50,000 resolution of the governing body Governmental systems with a population of >50,000 – bond election Private water companies - ACC financing approval STREAMLINED APPLICATION PROCESS 3. Request and complete Project Finance Application (PFA) PFA Package 1. Project data addendum 2. Financial capability addendum 3. Legal capability addendum 4. Technical capability addendum 5. Managerial capability addendum Optional site visit PFA due 8 weeks prior to Board meeting STREAMLINED APPLICATION PROCESS WIFA staff completes due diligence analysis and makes recommendation to WIFA Board of Directors Loan closes approximately 4 weeks after Board approval Once loan executed, submit disbursement requests for costs incurred WHAT DOES WIFA OFFER? No application fees or closing costs No minimum or maximum loan Smallest loan amount: Largest loan amount: amount Largest multi-loan project: Wastewater Collection System Lake Havasu City $2,968 $87.7M $346M BELOW-MARKET INTEREST RATES All loans subsidized (typically below market interest rates) AAA credit rating = low-interest financial assistance Public: Average for most recent years under 3.0% BELOW-MARKET INTEREST RATES Interest Rate Index Subsidy Rate Index = Combined Interest and Fee Rate (CIFR) Tax-Exempt Interest Rate Index Index for political subdivisions Based on WIFA’s AAA rating (20 year AAA Municipal G.O. bond rate) STANDARD TERMS 20 year repayment term Fixed payments Interest calculated only on funds drawn Debt Service Coverage - depends upon dedicated source of repayment, typically 1.20 on a system revenue pledge Subsidized Combined Interest and Fee Rate (CIFR): 70% 95% PLEDGE/COVERAGE REQUIREMENTS Type of Pledge Coverage Requirements General Obligation General Obligation Pledge Enterprise Revenues Net Revenues = 1.2x Maximum Annual Debt Service State Shared and Locally Collected Sales/Excise Taxes Gross Revenues = 2.0x Maximum Annual Debt Service Special Assessment (usually districts) Full Cash Value of Benefitting Properties = 10x Total Special Assessment Other Varies by source, subject to approval by WIFA Board of Directors WHAT DOES WIFA OFFER? Special program for design loans 1% interest rate Interest only payments for 3 years Principal is rolled into construction loan at end of 3 years WHAT DOES WIFA OFFER? Breaks for Disadvantaged Communities Longer loan term Reduced interest and fee rate Forgivable Principal Solar at Drinking Water Facility City of Somerton WHAT DOES WIFA OFFER? Incentives for Green Projects Water Efficiency Energy Efficiency Environmentally Innovative Green Stormwater Infrastructure PLANNING AND DESIGN GRANTS Plan or design a capital improvement project Funds used to contract with engineer or other consultant -Feasibility Studies -Rate Studies/Financial Audits -District formation -Capital Improvement Plans -Other planning projects Planning -Preliminary Engineering Reports -Environmental Assessments -Engineering Plans and Specifications -Other design projects Pre-design & Design Project Construction (Not eligible for grant funding) Construction PLANNING AND DESIGN GRANTS Awards capped at $35,000 Paid as work is completed 18 months to complete 2 cycles per year PLANNING AND DESIGN GRANTS Cycle 2 Drinking Water Only January 1, 2013 Applications available February 28, 2013 Applications due April 2013 Award Announcements PLANNING AND DESIGN GRANTS Project Funding and Local Match Grant funding – 60% of total planning/design project cost (up to $35,000) Local match funding – at least 40% of total project cost Cash In-kind services Green Projects - Local match waived or reduced Primary purpose must be green Green determination based on EPA GPR guidance PLANNING AND DESIGN GRANTS Match Examples TOTAL COST TRADITIONAL PROJECTS GREEN PROJECTS WIFA (60%) Match (40%) WIFA Match $35,000 $21,000 $14,000 $35,000 $0 $50,000 $30,000 $20,000 $35,000 $15,000 $65,000 $35,000 $30,000 $35,000 $30,000 WIFA funding cap = $35,000 PLANNING AND DESIGN GRANTS Five Evaluation Criteria 1. 2. 3. 4. 5. Need for project Green components Project tasks and work products Costs and benefits Need for grant funding OTHER WIFA SERVICES Annual Residential Rate Survey FINANCING ALTERNATIVES COMPARISON TOOL (FACT) Compares the costs associated with various financing options for water infrastructure projects. Produces a comprehensive analysis that incorporates financing, regulatory, and other important costs. Key Features: Pre-loaded with eight different sources of financing,- most common for water infrastructure projects. Setup financing options using multiple funding sources Use “Typical Values” for unknown financing and annual costs. Can include customized costs that may occur with specific analyses (“Other”). http://water.epa.gov/grants_funding/cwsrf/fact.cfm RECENT WIFA LOANS Borrower Project Name Loan Amount Clarkdale, Town of Twin 5s Water Main Replacement $1,600,000 Clarkdale, Town of Broadway Water Reclamation Facility $5,500,000 Eagar, Town of Kennedy Well Purchase $350,000 El Mirage, City of Water Reclamation Facility Efficiencies $500,000 El Mirage, City of Automated Meter Reading & Line Replacement $4,550,000 Eloy, City of Houser/Toltec Waterline Improvements $2,000,000 Gila Bend, Town of Solar and R/O Facility Improvements $2,050,000 Payson, Town of Payson Cragin Project Phase II $6,250,000 Prescott, City of Zone 12, 19 and 27 Water Infrastructure Improvements Show Low, City of Private Water Companies Acquisition $2,000,000 Somerton, City of 208 kW Solar - Wastewater Treatment Facility $1,187,080 Somerton, City of 272 kW Solar - Water Treatment Facility $2,046,854 Tucson, City of SAVSARP Collector Pipelines $4,000,000 Tucson, City of SAVSARP Reservoir, Booster, and Interconnect Pipeline Winslow, City of Replacement Well # 7 $15,921,582 $16,000,000 $1,583,750 CITY OF PRESCOTT – ZONE 12, 19 AND 27 INFRASTRUCTURE IMPROVEMENTS Loan Amount Pledge Term $15,921,582 Revenue 20yrs Project Description: Replace and enhance various aging facilities to bolster the pressures and to provide additional storage capacity CITY OF EL MIRAGE – AUTOMATED METER READING & LINE REPLACEMENT Loan Amount Pledge Term $4,550,000 Revenue 20yrs Project Description: Replace 11,000 old, inaccurate meters with Automated Meter Reading (AMR) meters. Replace up to 17,600 feet of existing lines with new lines CITY OF FLAGSTAFF – SINAGUA AND FORT TUTHILL WELL PROJECTS (2 LOANS) Loan Amount Pledge Term $1,000,000 Revenue 20yrs $775,000 Revenue 20yrs Project Descriptions: Fort Tuthill Infrastructure upgrades and improvements to connect the wellsite to the water distribution system. Replace 898 water lines, provide adequate water for fire protection and a looped water distribution system for redundancy Sinagua Combine two wells into one well house (water transmission line and expansion of an existing well house) CITY OF SOMERTON – 272 KW SOLAR - WATER TREATMENT FACILITY Loan Amount Pledge Term $2,046,854 Revenue 20yrs Project Description: Install a solar array to provide power to the City’s water treatment plant and well. The solar array will generate 65% of the facility’s electric demand. The overall savings from the solar project are estimated at $75,000 per year and $2 million over 30 years. CITY OF WINSLOW– REPLACEMENT WELL # 7 Loan Amount Pledge Term $1,583,750 Revenue 20yrs Project Description: Replace well with a new production well in a location to address water quality issues CITY OF TUCSON – SAVSARP COLLECTOR PIPELINES, RESERVOIR, BOOSTER, AND INTERCONNECT PIPELINE (2 LOANS) Loan Amount Pledge Term $4,000,000 Revenue 20yrs $16,000,000 Revenue 20yrs Project Description: Design and construct an 8.5 million gallon forebay reservoir and a 40 million gallons per day booster station to recover and distribute City’s full allocation of Colorado River Water TOWN OF PAYSON– CRAGIN PROJECT PHASE II Loan Amount Pledge Term $6,250,000 Revenue 20yrs Project Description: Continuation of previous loan for $8M (Phase I). Construct water pipeline from the Cragin reservoir to water treatment plant and from water treatment plant to the distribution system. Construct water treatment plant TOWN OF CLARKDALE – TWIN 5S WATER MAIN REPLACEMENT Loan Amount Pledge Term $1,600,000 Excise Taxes 20yrs Project Description: Replace and relocate water mains that pose security, operational and maintenance issues TOWN OF CLARKDALE – BROADWAY WATER RECLAMATION FACILITY Loan Amount Pledge Term $5,500,000 Revenue 20yrs Project Description: Replace an outdated and technologically limited municipal wastewater facility with a recycled and refurbished mechanical wastewater treatment facility producing Class A+ effluent CITY OF KINGMAN – DOWNTOWN WWTP UPGRADE AND SOLAR Loan Amount Pledge Term $18,541,667 Revenue 20yrs Project Description: Construct new 0.62 MGD Wastewater Treatment Plant with solar and other energy efficiency elements. Used WIFA funds for every phase of project: 2004 - planning and design grant for Location and Process Selection Study 2009 - 3-yr loan for the design 2011- design loan rolled into construction loan CITY OF PRESCOTT – AIRPORT WWTP UPGRADES - 3.75 MGD Loan Amount Pledge Term $45,802,753 Revenues 20yrs Project Description: Expand to a treatment capacity of 3.75 mgd to accommodate current flows. Approximately 28% of the project costs, $12,864,000, are for green components which result in a higher class (cleaner) effluent; also results in an increased volume of reclaimed water produced by the WWTP. CITY OF FLAGSTAFF – ENERGY AUDIT PLANNING AND DESIGN GRANT Grant Amount: $35,000 match waived (green project) Project Description: Identify and develop energy efficiencies in drinking water system. Energy costs are about 50% of the water production budget. The drinking water system energy audit provided valuable information to update an antiquated system that has expanded in the past 20 years from serving 40,000 to 65,000 people CONTACT US Water Infrastructure Finance Authority of Arizona Phone: (602) 364-1310 Fax: (602) 364-1327 Toll-Free: (877) 298-0425 www.azwifa.gov