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T HE WIFA W AY … A FFORDABLE AND E FFICIENT Angie Valenzuela, Sr. Loan Officer/GADA Program Manager Sara Konrad, Environmental Program Supervisor GFOAZ,

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Presentation on theme: "T HE WIFA W AY … A FFORDABLE AND E FFICIENT Angie Valenzuela, Sr. Loan Officer/GADA Program Manager Sara Konrad, Environmental Program Supervisor GFOAZ,"— Presentation transcript:

1 T HE WIFA W AY … A FFORDABLE AND E FFICIENT Angie Valenzuela, Sr. Loan Officer/GADA Program Manager Sara Konrad, Environmental Program Supervisor GFOAZ, February 21, 2013

2 WIFA T OPICS TO C OVER  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

3 W HO W E A RE  Water Infrastructure Finance Authority of Arizona  Independent State agency  “State Revolving Fund”

4 Arizona (WIFA provides 20% match of Federal Capitalization Grants) Water Infrastructure Finance Authority (State Revolving Fund) Bond Holders (provide additional funds) EPA (Federal Capitalization provides initial funds) Wastewater Loans Drinking Water Loans

5 W HO W E A RE  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

6 W HAT WIFA C AN F UND

7 W HO C AN A PPLY Wastewater  Publicly-owned wastewater facilities Drinking Water  Public water systems owned by political subdivisions  Private ACC-regulated systems Additional eligibility criteria for non- community systems

8 S TREAMLINED A PPLICATION P ROCESS  Financing available year-round  Loans approved at bimonthly board meetings  Three-step application process See flowchart of loan application process

9 S TREAMLINED A PPLICATION P ROCESS 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

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11 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 S TREAMLINED A PPLICATION P ROCESS

12 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 S TREAMLINED A PPLICATION P ROCESS

13  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 S TREAMLINED A PPLICATION P ROCESS

14  No application fees or closing costs  No minimum or maximum loan amount Wastewater Collection System Lake Havasu City Smallest loan amount:$2,968 Largest loan amount: $87.7M Largest multi-loan project: $346M W HAT D OES WIFA O FFER ?

15 All loans subsidized (typically below market interest rates) AAA credit rating = low-interest financial assistance  Public: Average for most recent years under 3.0% B ELOW -M ARKET I NTEREST R ATES

16 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) B ELOW -M ARKET I NTEREST R ATES

17  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% S TANDARD T ERMS

18 P LEDGE /C OVERAGE R EQUIREMENTS Type of PledgeCoverage Requirements General ObligationGeneral Obligation Pledge Enterprise RevenuesNet 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 OtherVaries by source, subject to approval by WIFA Board of Directors

19 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 W HAT D OES WIFA O FFER ?

20 Breaks for Disadvantaged Communities  Longer loan term  Reduced interest and fee rate  Forgivable Principal Solar at Drinking Water Facility City of Somerton

21 Water Efficiency Energy Efficiency Environmentally Innovative Green Stormwater Infrastructure Incentives for Green Projects W HAT D OES WIFA O FFER ?

22 -Feasibility Studies -Rate Studies/Financial Audits -District formation -Capital Improvement Plans -Other planning projects -Preliminary Engineering Reports -Environmental Assessments -Engineering Plans and Specifications -Other design projects Project Construction (Not eligible for grant funding) Planning Pre-design & Design Construction  Plan or design a capital improvement project  Funds used to contract with engineer or other consultant P LANNING AND D ESIGN G RANTS

23  Awards capped at $35,000  Paid as work is completed  18 months to complete  2 cycles per year

24 Cycle 2 Drinking Water Only January 1, 2013 Applications available February 28, 2013 Applications due April 2013 Award Announcements P LANNING AND D ESIGN G RANTS

25 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

26 P LANNING AND D ESIGN G RANTS Match Examples TOTAL COST TRADITIONAL PROJECTSGREEN PROJECTS WIFA (60%)Match (40%)WIFAMatch $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

27 P LANNING AND D ESIGN G RANTS Five Evaluation Criteria 1.Need for project 2.Green components 3.Project tasks and work products 4.Costs and benefits 5.Need for grant funding

28 Annual Residential Rate Survey O THER WIFA S ERVICES

29 F INANCING A LTERNATIVES C OMPARISON T OOL (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”).

30 R ECENT WIFA L OANS BorrowerProject NameLoan Amount Clarkdale, Town ofTwin 5s Water Main Replacement $1,600,000 Clarkdale, Town ofBroadway Water Reclamation Facility $5,500,000 Eagar, Town ofKennedy Well Purchase $350,000 El Mirage, City ofWater Reclamation Facility Efficiencies $500,000 El Mirage, City ofAutomated Meter Reading & Line Replacement $4,550,000 Eloy, City ofHouser/Toltec Waterline Improvements $2,000,000 Gila Bend, Town ofSolar and R/O Facility Improvements $2,050,000 Payson, Town ofPayson Cragin Project Phase II $6,250,000 Prescott, City ofZone 12, 19 and 27 Water Infrastructure Improvements $15,921,582 Show Low, City ofPrivate Water Companies Acquisition $2,000,000 Somerton, City of208 kW Solar - Wastewater Treatment Facility $1,187,080 Somerton, City of272 kW Solar - Water Treatment Facility $2,046,854 Tucson, City ofSAVSARP Collector Pipelines $4,000,000 Tucson, City ofSAVSARP Reservoir, Booster, and Interconnect Pipeline $16,000,000 Winslow, City ofReplacement Well # 7 $1,583,750

31 C ITY OF P RESCOTT – Z ONE 12, 19 AND 27 I NFRASTRUCTURE I MPROVEMENTS  Project Description: Replace and enhance various aging facilities to bolster the pressures and to provide additional storage capacity Loan AmountPledgeTerm $15,921,582Revenue20yrs

32 C ITY OF E L M IRAGE – A UTOMATED M ETER R EADING & L INE R EPLACEMENT  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 Loan AmountPledgeTerm $4,550,000Revenue20yrs

33  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) C ITY OF F LAGSTAFF – S INAGUA AND F ORT T UTHILL W ELL P ROJECTS (2 LOANS ) Loan AmountPledgeTerm $1,000,000Revenue20yrs $775,000Revenue20yrs

34 C ITY OF S OMERTON – 272 K W S OLAR - W ATER T REATMENT F ACILITY  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. Loan AmountPledgeTerm $2,046,854Revenue20yrs

35 C ITY OF W INSLOW – R EPLACEMENT W ELL # 7  Project Description: Replace well with a new production well in a location to address water quality issues Loan AmountPledgeTerm $1,583,750Revenue20yrs

36 C ITY OF T UCSON – SAVSARP C OLLECTOR P IPELINES, R ESERVOIR, B OOSTER, AND I NTERCONNECT P IPELINE (2 LOANS )  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 Loan AmountPledgeTerm $4,000,000Revenue20yrs $16,000,000Revenue20yrs

37 T OWN OF P AYSON – C RAGIN P ROJECT P HASE II  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 Loan AmountPledgeTerm $6,250,000Revenue20yrs

38 T OWN OF C LARKDALE – T WIN 5 S W ATER M AIN R EPLACEMENT  Project Description: Replace and relocate water mains that pose security, operational and maintenance issues Loan AmountPledgeTerm $1,600,000Excise Taxes20yrs

39 T OWN OF C LARKDALE – B ROADWAY W ATER R ECLAMATION F ACILITY  Project Description: Replace an outdated and technologically limited municipal wastewater facility with a recycled and refurbished mechanical wastewater treatment facility producing Class A+ effluent Loan AmountPledgeTerm $5,500,000Revenue20yrs

40 C ITY OF K INGMAN – D OWNTOWN WWTP U PGRADE AND S OLAR  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:  planning and design grant for Location and Process Selection Study  yr loan for the design  design loan rolled into construction loan Loan AmountPledgeTerm $18,541,667Revenue20yrs

41 C ITY OF P RESCOTT – A IRPORT WWTP U PGRADES MGD  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. Loan AmountPledgeTerm $45,802,753Revenues20yrs

42  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 C ITY OF F LAGSTAFF – E NERGY A UDIT P LANNING AND D ESIGN G RANT

43 C ONTACT U S Phone: (602) Fax: (602) Toll-Free: (877) Water Infrastructure Finance Authority of Arizona


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