1. ACEC Environmental Business &
Indiana Finance Authority State Revolving Fund Loan Program
ACEC Environmental Business &
Funding Sources
Conference
September 19, 2018
State Revolving Fund
100 N. Senate Avenue, Room 1275
Indianapolis, Indiana 46204

2. Below market interest rates 20-year repayment period
SRF Programs Provide
Below market interest rates
20-year repayment period
(35-year for pipe projects)
Disbursements as needed

3. SRF Programs Results as of June 30, 2018
528 Clean Water loans closed
249 Drinking Water loans closed
Over 380 Communities served
Over $4.6 Billion in loan closings
Over $4.2 Billion disbursed to communities
Over past 4 years, $272 Million interest savings

4. Estimated Need: Wastewater
The 2008 EPA CW Needs Congressional Report identifies over $7.8 Billion in CW infrastructure needs over the next 20 years in Indiana. The most substantial needs occur in:
Combined Sewer Overflows
New Collector Sewers
Advanced Treatment
Sewer Rehabilitation
Treatment Plan upgrades

5. Estimated Need: Drinking Water
The 2016 IFA Water Study identifies over $2.3 Billion in immediate infrastructure needs and an additional $815 Million needed annually to maintain utilities into the future. The most substantial needs occur in:
Transmission and Distribution
Treatment
Storage
Source

6. Strategies for Addressing Affordability
Interest Rates
Low Interest Rates
Incentives:
Lead Line Replacement
Green Project Reserve
Nonpoint Source
Additional Subsidy
ETF
DRAFT! (obviously )

7. SRF Interest Rates Wastewater SRF Interest Rates User Rates (Over $50)
SRF Rates July 1, 2018 to September 30, 2018
Wastewater SRF
Interest Rates
User Rates
(Over $50)
($30 to $50)
(Under $30)
Tier III (MHI: under $40,346)
2.00%
2.12%
Tier II (MHI: $40,347 to $50,432)
2.37%
Tier I (MHI over $50,433)
2.62%
Drinking Water SRF
Interest Rates
User Rates
(Over $45)
($25 to $45)
(Under $25)
Tier III (MHI: under $40,346)
2.00%
2.12%
Tier II (MHI: $40,347 to $50,432)
2.37%
Tier I (MHI over $50,433)
2.62%

8. Lead Service Line Replacement Financing
Project Example
Utility develops plan to replace distribution mains and service lines in service area.
Identify lines and secure easements.
Complete lead service lines only (no partials).

9. Loan Structured with Lead Line Rate Reduction
Illustration of SRF Cost Savings
Lead Line Replacement Incentive
Utility ABC’s
Financing Cost
Original
Loan Structured with Lead Line Rate Reduction
Loan
Debt Service
New SRF Loan
$10,000,000
$ 12,500,000
Interest Rate
2.25%
0.00%
$12,500,000
Amount available for lead line project
$ 2,500,000
Interest rate savings will allow Utility to apply $2,500,000 towards costs associated with lead line replacement project at no additional costs to rate payers.
Similar methodology is applied to GPR projects.

10. More information at: https://www.in.gov/ifa/srf/2385.htm
SRF Incentive Programs
More information at:

11. What is the SRF Extended Term Financing Program?
The Indiana SRF can offer Extended Term Financing with loan terms up to 35 years to all water and sewer projects having a useful life equal to the loan term.

12. Why is Extended Term Needed?
Studies conducted showed underinvesting in infrastructure projects leads to a higher risk of deterioration of the quality of service, reliability of service and shifting costs to future generations.

13. Interest Rate Increase
Interest Rate for Extended Term
An SRF project with an extended loan term will experience a slightly higher interest rate as shown:
Loan Term
Interest Rate Increase
21-25
+0.1%
26-30
+0.2%
30-35
+0.3%

14. New Indiana Law
Indiana Code
CW and DW Recipients must demonstrate that they have developed or are in the process of developing an asset management program as defined in the guidelines of the authority.

15. An Asset Management Plan (AMP) is important for the following reasons:
Asset Management Planning
An Asset Management Plan (AMP) is important for the following reasons:
Utility assets provide an essential customer service.
Proper O&M and scheduled replacement of these assets is essential for public health and safety.
These assets represent a major public investment.

16. Asset Management Program Memorandum Asset Management Program Guidance
SRF AMP Guidance
Documents Available:
Asset Management Program Memorandum
Asset Management Program Guidance
Asset Management Program Checklist
Asset Management Program Certification
Asset Management Program Guidelines 

17. More information at: https://www.in.gov/ifa/srf/2376.htm
SRF AMP Guidance
More information at:

18. Questions? Bill Harkins Director 317-234-4862 wharkins@ifa.in.gov