How to Use the
Drinking Water
State Revolving Fund
SRF Overview
Planning
Intended Use Plan Application
Environmental Review
Bidding and Construction
Construction Financing
Loan Disbursements
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SRF Overview
•The State Revolving Fund is one of Iowa’s primary sources of
financing for water system upgrades and water quality projects.
Loans are available for planning and design and construction.
•The SRF is jointly administered by the Iowa Department of Natural
Resources and the Iowa Finance Authority.
•The Drinking Water SRF finances water system improvements and
source water protection for eligible public water supplies. The Clean
Water SRF finances publicly owned wastewater and sewer projects, as
well as nonpoint source control practices.
•All uses of SRF dollars are outlined in Intended Use Plans (IUPs),
including specific projects identified for funding. Applications are
taken year-round, with quarterly updates to the IUPs. Iowa’s SRF is
currently able to fund all eligible projects.
•For more information, contact Patti Cale-Finnegan, 515-725-0498;
patti.cale-finnegan@dnr.iowa.gov.
Planning
•All drinking water construction projects must follow the Department of
Natural Resources’ water supply construction permitting process. For
more information contact Jennifer Bunton.
•Planning and Design (P&D) loans are available to use for upfront
engineering and other costs. Interest rate is 0% for up to three years. P&D
loans can be rolled into SRF construction loans or paid off through other
permanent financing.
•The applicant/owner and consulting engineer prepare a preliminary
engineering report (PER). A complete and approvable PER must be
submitted before an SRF Intended Use Plan application will be considered.
•Drinking Water SRF applicants must also complete a Viability SelfAssessment.
Intended Use Plan Application
•The IUP application is used to apply for inclusion on the project
priority list of the Drinking Water SRF Intended Use Plan (IUP). IUPs
are developed on an annual basis with quarterly updates.
•The Drinking Water SRF senior engineer assigns the project to a DNR
project manager, who evaluates the application for eligibility and
scores it.
•If the project is eligible, it is placed on the project priority list. If the
applicant is not expected to finalize a loan agreement within the current
fiscal year, the project may be listed as contingency.
•Each quarter the IUP is published for public comment and presented
to the Iowa Environmental Protection Commission for approval.
•Projects must be on an approved IUP and meet other SRF
requirements to be eligible for a loan.
Environmental Review
•Assessment of the potential impact on natural and cultural resources is
required for all SRF water projects. An SRF environmental review (ER)
specialist will work closely with you to perform the assessment.
•When the preliminary engineering report is submitted, please attach the
information requested in the Environmental Review Checklist (Exhibit 4).
Keep the ER specialist apprised of any changes in the project to avoid
delays.
•The ER specialist will determine whether a Categorical Exclusion (CX)
can be used or if a full review is needed to reach a Finding of No
Significant Impact (FNSI).
•If the FNSI path is required, the ER specialist will gather the needed
clearances, advise the applicant on flood plain or other permits needed,
prepare an Environmental Information Document (EID), and coordinate
with the applicant to schedule a public hearing.
•No construction shall begin before the CX or FNSI are completed,
including any public notice or review periods.
Bidding and Construction
•SRF front-end specifications must be included in the plans and
specifications submitted as part of the construction permit application.
SRF recommends simply inserting the Exhibit 7A: SRF Required FrontEnd Specifications (available in PDF or Word format) for ease of review
by the DNR project manager.
•Currently SRF drinking water project requirements include DavisBacon prevailing wages. Contact Lori Beary.
•Exhibit 7A includes several forms that must be filled out by the bidders
and returned with the bids. Applicants should pay close attention to
the Disadvantaged Business Enterprise requirements and forms.
•When the applicant identifies the lowest responsive bidder, a packet of
bid documents must be submitted to SRF staff for review of eligible
costs and concurrence with the bid award. The packet materials are
identified in Exhibit 9.
•Award concurrence will not be issued until the environmental review is
completed and the construction permit is issued.
Construction Financing
•At any time after the PER is approved, the applicant may begin the
process for an SRF construction loan. The loan application must be
submitted to the Iowa Finance Authority (IFA). This application is
separate from the Intended Use Plan application and requests
information on user rates, outstanding debt, and system financial data.
•IFA either approves the loan application or contacts the applicant to
work toward approval.
•The applicant works with bond counsel to schedule and hold a public
hearing and pass a bond resolution. IFA will provide a debt service
schedule.
•Typically the loan is not executed until after bidding is completed and
final project costs are known.
•Current interest rate is 3%, with a 0.5% origination fee and .25% annual
servicing fee on outstanding principal. Pending approval, the interest
rate for 20 year loans will be reduced to 1.75% on September 28, 2012.
Loan Disbursements
•Disbursements will continue to be made weekly; generally the funds
will be disbursed on Friday. The deadline for submitting disbursement
requests will be Monday to receive the funds on Friday of the same
week.
•The borrower will send the disbursement request to IFA.
Disbursement requests can be scanned and emailed, faxed to 515-7254901, or mailed.
•IFA reviews disbursement requests. Disbursements are checked
against eligible expenses. If there is a discrepancy or questions arise,
IFA will contact the DNR project manager and the borrower.
•Quarterly, the SRF Clerk-Specialist will ask the borrower about DBE
subcontractors.
•Change orders must be submitted to the DNR project manager who
will verify acceptable expenses and notify IFA of the change.
For More Information on Iowa’s
State Revolving Fund
Click Here