AASHTO – Standing committee on water transportation: Arkansas waterways commission Deidre smith, director February 27, 2018

WATER INFRASTRUCTURE FINANCE & INNOVATION ACT (WIFIA) BACKGROUND • Passed as part of Water Resources Reform and Development Act (WRRDA) of 2014 EPA Implemented Guidelines for Investment in the Nation’s Water and Wastewater Infrastructure • Congress appropriated $25 million for credit subsidy for FY 2017 which allowed EPA to select its first 12 projects Provides Long-term, Low-cost, Supplemental Credit Assistance Loans $25 Million in Appropriations $2.3 Billion in Loans $5.1 Billion in Infrastructure Investment Leverages federal funding since Congress only needs to appropriate money to cover estimated losses and the remainder of the funding is borrowed from and repaid to Treasury A small amount of federal funds can support a larger amount of infrastructure investment

Eligibility $5 Million $20 Million Eligible Borrowers: Eligible Project Size: Loan Scope: Minimum for Small Communities $5 Million Minimum for Large Communities $20 Million A project consists of all construction necessary to complete the building or work regardless of the number of contracts or assistance agreements involved All contracts and assistance agreements awarded must be closely related in purpose, time and place Generally, must involve new construction or work WIFIA can fund a combination of projects through each loan, given the projects: o Share a common security pledge o Serve a common purpose Have similar construction time frames Local, state, tribal and federal government entities Partnerships and joint ventures Corporations and trusts

CREDIT TERMS CREDIT WORTHINESS Criteria that will be examined: Projects applying for WIFIA loans must be creditworthy and demonstrate a reasonable assurance of repayment of the loan over the term of the loan 5 Years = Maximum time that repayment may be deferred after substantial completion of the project 35 Years = Maximum final maturity date from substantial completion 49% = Maximum portion of eligible project costs that WIFIA can fund Interest rate will be equal to or greater than the U.S. Treasury rate of a similar maturity Projects must be creditworthy Criteria that will be examined: The terms, conditions, financial structure and security features of the proposed financing The dedicated revenue source that will secure or fund the project obligation The financial assumptions upon which the project is based The financial soundness, credit history, and outlook of the prospective borrower

Steps needed USACE AASHTO / SCOWT CONGRESS INDUSTRY STATE LEGISLATION Develop Implementation Guidelines Compile a list of 30 projects from various states having waterborne commerce that may utilize WIFIA. WRDA: Extend the Water Infrastructure Finance Innovation Act (WIFIA) past 2019 or make permanent Decide if they want to assess a fee on shipments or use an existing tax for repayment purposes. Create a coalition or group comprised of state or other public entities and private industries to apply for loan and oversee the collection and disbursement of monies collected. Create the legislative authority of the coalition or group comprised of state or other public entities and private industries to accept state funding when/if available. Administer the WIFIA Loan Program Create By-Laws / Rules / Policies concerning coalition or group and vote on Officers to oversee account. Appropriate funds for the WIFIA Program

How can you help? Contact your Congressional Delegates: Support WIFIA language in WRDA 2018 to make permanent or extend current Bill Secure Appropriations for WIFIA Funding AASHTO Standing Committee on Water Transportation Send a list of projects that could be eligible for WIFIA Financing Include project scope and approximate $ of project Educate stakeholders and industry leaders Federal funding is not keeping up with demand Fix as fails is becoming failure to fix deidre.smith@arkansas.gov Deidre Smith (501) 682-1173 or (501) 690-3655