KENTUCKY INFRASTRUCTURE AUTHORITY

GOVERNOR’S LOCAL ISSUES CONFERENCE

August 17 - 19, 2011

What Do We Do?

Facilitate Water and

Wastewater Planning

Fund Infrastructure Projects

Using Loans and Grants

Statewide Planning

• KIA coordinates drinking water and wastewater planning in cooperation with the ADDs

• Role of planning will become more critical

• Sound planning requires a wide range of information and participation

Project Rankings

Two Ranking Processes

• SRF Rankings– Clean Water Act– Safe Drinking Water Act

• Area Water Management Council Rankings

Prioritization of Projects by AWMC

• AWMC rankings are based on local needs

• Consideration will be given to projects…..

– involving regionalization of systems (physical or management)

– with the highest impact in numbers of households served

– with the lowest average cost per customer– where the Median Household Income is less than

the state average

Grants

• No new in the current biennium

• Close out existing grants

• Grant funds can only be used for the purpose in the budget line item

• Reauthorization

KIA Has 4 Loan Programs

• Federally Funded– Clean Water State Revolving Fund (Fund A)– Drinking Water State Revolving Fund (Fund F)

• State Funded– Infrastructure Revolving Loan/Grant (Fund B)– Governmental Agencies Program (Fund C)

State Funded Loan Programs (B and C)

• State Funded programs for governmental entities for the construction of infrastructure projects, primarily water and sewer, broadband and possible financing for brownfields remediation

• 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– Principal and Interest Repaid Monthly– Submit Audited Financial Statements

Funds B & C Terms

• Below Market Interest Rates– Fund B Rates are 3%, 2% and 1%– Fund C Rates range from 3% to Market Rate

• Flexible Maturities– Fund B Repayment Terms from 5 to 30 years– Fund C Repayment Terms from 20 to 30 years

• Funds Availability– Limited availability of funds to loan– Fund C may be bond funded

State Revolving Funds (SRF)

• Created and Funded by the Federal Government– Clean Water Act (Fund A)– Safe Drinking Water Act (Fund F)

• Administered jointly by– 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

Eligible Borrowers

• Governmental Agency– City– County– Special District

• No Federal Agencies

• Project MUST BE on the SRF Priority List. (Different from Area Water Management Council Priority List)

REQUIREMENTS FOR 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– Tiered principal forgiveness will be offered to CWSRF borrowers

• 30% for borrowers’ whose Median Household Income <=$20,599• 10% for borrowers’ whose Median Household Income between

$20,599 & $32,959• No project can receive more than $1,200,000 in forgiveness

– 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, 2011– Could be reinstated when Congress passes new federal budget

FUND A

CLEAN WATER STATE REVOLVING FUND

2012 Funds Availability ~ $132,475,385

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

Loans for planning and design are available to expedite a project, which may be rolled into a construction loan.

INELIGIBLE PROJECTS - CWSRF

• Laboratory Fees and Other Monitoring Expenses

• Operation and Maintenance Expenses

FUND F

DRINKING WATER STATE REVOLVING FUND

2012 Funds Availability ~ $38,373,772

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

Loans for planning and design are available to expedite a project, which may be rolled into a construction loan.

INELIGIBLE PROJECTS - DWSRF

• Compliance Monitoring

• Operation and Maintenance

• Reservoirs (raw water)

• Dams or Dam Rehabilitation

• Water Rights

• Growth

• Fire Protection

CURRENT SRF RATES

Interest Rate set annually by the KIA Board.• Standard Rate is 3.0% (MHI at or above $41,197)

• Non-Standard Rate (a) is 2.0% (MHI between $32,958 & $41,197)

• Non-Standard Rate (b) is 1.0% (MHI at or below $32,958)

• 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

REPAYMENTS TERMS Repayment Period

CWSRF – 20 YearsDWSRF – 20 Years (may be 30 years if

hardship community)

Financing Expenses

CWSRF – 0.2% Servicing FeeDWSRF – 0.25% Servicing Fee

Debt Service Reserve: None

Replacement Reserve: 2.5% of project amount funded over 10 years

SRF Basic Process

1. Environmental Review

• Includes E-Clearinghouse

2. Plans Review

3. Financial Administration

• Eligible projects will be “invited”

to apply

SRF Process FlowchartKIA Board Approval & Binding Commitment

InvitationApplication

Environmental Review(includes E-Clearinghouse)

Plans and Specs Review

Bid Opening

Pre-Construction Conference

Start Construction/ Construction Contract

Enter into Assistance Agreement

Initial Pay Request

Construction Complete

Closeout

KIA Board Approval & Binding Commitment

WHERE TO START?

• Project Profile• Call for Projects

IMPORTANT DATES:

October 1, 2011 - DW & CW Call by KIA & DOW

December 31, 2011 - Call for Projects Closed

March 31, 2012 - DOW Project Ranking Complete

June 1, 2012 - Draft IUP and Priority List

July 1, 2012 - Beginning of Funding Cycle

PROCESS IMPROVEMENTS…

• 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

• You DO have to let DOW know which WX or SX numbers you wish to have considered for SRF funding.

AGENCY CONTACTSDOW

Shafiq AmawiWater Infrastructure Branch

Branch Manager

Buddy GriffinProgram Administration Section

Supervisor

Amanda YearyDWSRF Coordinator

Anshu SinghCWSRF Coordinator

Phone 502-564-3410

KIA

John CovingtonExecutive Director

Kasi WhiteFinancial Analyst

Sandy Williams Financial Analyst

Phone 502-573-0260

WRIS and Project Profile

For more information contact:

Kentucky Infrastructure Authority1024 Capital Center Drive, Suite 340

Frankfort, KY 40601(502) 573-0260

kia.ky.gov