1. KENTUCKY INFRASTRUCTURE AUTHORITY GOVERNOR’S LOCAL ISSUES CONFERENCE August 17 - 19, 2011

2. What Do We Do? Facilitate Water and Wastewater Planning Fund Infrastructure Projects Using Loans and Grants

3. 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

4. Project Rankings Two Ranking Processes SRF Rankings –Clean Water Act –Safe Drinking Water Act Area Water Management Council Rankings

5. 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

6. 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

7. 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)

8. 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

9. 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

10. 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

11. 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)

12. 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

13. FUND A CLEAN WATER STATE REVOLVING FUND 2012 Funds Availability ~ $132,475,385

14. 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.

15. INELIGIBLE PROJECTS - CWSRF Laboratory Fees and Other Monitoring Expenses Operation and Maintenance Expenses

16. FUND F DRINKING WATER STATE REVOLVING FUND 2012 Funds Availability ~ $38,373,772

17. 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.

18. INELIGIBLE PROJECTS - DWSRF Compliance Monitoring Operation and Maintenance Reservoirs (raw water) Dams or Dam Rehabilitation Water Rights Growth Fire Protection

19. 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

20. REPAYMENTS TERMS Repayment Period CWSRF – 20 Years DWSRF – 20 Years (may be 30 years if hardship community) Financing Expenses CWSRF – 0.2% Servicing Fee DWSRF – 0.25% Servicing Fee Debt Service Reserve: None Replacement Reserve: 2.5% of project amount funded over 10 years

21. SRF Basic Process 1.Environmental Review Includes E-Clearinghouse 2.Plans Review 3.Financial Administration Eligible projects will be “invited ” to apply

22. SRF Process Flowchart KIA Board Approval & Binding CommitmentKIA Board Approval & Binding Commitment Invitation Application 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

23. 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

24. 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.

25. AGENCY CONTACTS DOW Shafiq Amawi Water Infrastructure Branch Branch Manager Buddy Griffin Program Administration Section Supervisor Amanda Yeary DWSRF Coordinator Anshu Singh CWSRF Coordinator Phone 502-564-3410 KIA John Covington Executive Director Kasi White Financial Analyst Sandy Williams Financial Analyst Phone 502-573-0260

26. WRIS and Project Profile

27. For more information contact: Kentucky Infrastructure Authority 1024 Capital Center Drive, Suite 340 Frankfort, KY 40601 (502) 573-0260 kia.ky.gov