1. Water Infrastructure Finance Authority of Arizona
Sara Konrad
Western States Water Council Spring Meeting
March 2019
WATER INFRASTRUCTURE FINANCE AUTHORITY

2. Topics Clean Water State Revolving Fund
Drinking Water State Revolving Fund
Technical Assistance
Small Drinking Water System Fund
Water Supply Development Fund
Thank you so much for having me here today. I know you’ll be hearing a lot more about Arizona’s programs from Tom Buschakse and Trevor Baggiore on Thursday, so I’ll be brief.
I work for the Water Infrastructure Finance Authority of Arizona, aka WIFA, a separate agency – not part of ADEQ or ADWR.
Our primary function is to administer both the CW and DW state revolving funds but we do administer a couple smaller programs too.
I’m assuming you’re all familiar with the state revolving fund programs, so I’ll just mention a few areas where Arizona’s SRF is unusual compared to other states, and then I will speak briefly on the technical assistance and other funds we administer.

3. Arizona’s Revolving Funds
Receive annual capitalization grants from EPA
$10 million Clean Water
$20 million Drinking Water
WIFA provides 20% match
(no state appropriation)
Leveraged program
Borrow money (issue bonds) at the best rates available (AAA rated)
Arizona gets a $20M DW cap grant and $10M CW cap grant
No state appropriation
Leverage – about half of states leverage
Because of this, we have a lot of funds available to lend, and our borrowers are not in competition against each for our funding.

4. State revolving funds offer
Low interest rates
Forgivable principal available for disadvantaged communities
Financing available year-round
No application deadlines
No competition
No minimum or maximum loan amount
No application fees or closing costs
To that point, there is no competition, and there is no maximum loan amount. We have plenty of cash on hand, and if needed we can go out to the bond market to get more.
Another thing at only a portion of state revolving funds do, is– board meets every two months to approve new loans and to add projects to the Project Priority List., No annual deadline
It means borrowers have multiple opportunities throughout the year to obtain funding. - flexibility

5. Eligible borrowers
Cities, towns, tribal entities and special districts:
Own a public water system
Own a wastewater facility
County, state and federal entities are NOT eligible
ACC-regulated private water companies
For profit and nonprofit
Nonprofit and private wastewater companies not eligible for AZ’s Clean Water SRF
First state revolving fund in the country to lend to a tribe
To date, four loans to tribal entities
Two more loans set to close within a few weeks
As far as eligibility criteria for who can borrow from the SRF, we have
Differences from other states:
Private water companies - Define ACC as public utilities commission
Although federal law now allows private and nonprofit entities to borrow from the CWSRF in certain circumstance, Arizona’s statutes say that only public entities for wastewater

6. ADEQ Technical assistance
Portion of DWSRF set-asides goes to ADEQ’s Capacity Development Program
Free technical, managerial and financial assistance
Small public water systems (<10,000 population)
Selection criteria based on system’s technical, managerial and financial capabilities and identifies where they may need assistance
Alternately, the water system can request technical assistance
ADEQ hires third party contractors to prepare:
Planning for Consolidation, Acquisition and/or Regionalization
System Evaluation
Treatment Selection & Design
Operations Optimization
Management & Financial Planning
Permitting Documentation
Switching gears from SRF loans to the TA that WIFA offers
We partner a lot with ADEQ.
ADEQ provides free technical, managerial and financial assistance to small public water systems using skilled professionals. Help can be provided by experienced ADEQ staff and/or third party contractors.
On-site Assistance
Below is a partial list of the assistance services that can be provided to small public water systems
System Evaluation (e.g., TMF review of the entire water system with recommendations for improvements)
Treatment Selection & Design (e.g., arsenic, nitrate or radionuclide treatment design)
Operations Optimization
Management & Financial Planning (e.g., budget prep, rate analysis, board training, asset management)
Preparing Permitting Documentation (e.g, Approval to Construct, Design Report, Approval of Construction)
Planning for Consolidation, Acquisition &/or Regionalization
Who’s Eligible?
Any community or non-profit, non-transient/non-community water system, serving 10,000 or fewer persons are eligible for TA services
How does the Program Work?
There are two ways water systems can be identified for technical assistance.
Each spring, ADEQ develops its Master Priority List (link to FY19 MPL) of public water systems to target for technical assistance using criteria (link to criteria) that help measure the system’s technical, managerial and financial capabilities and identify where they may need assistance.
Alternately, the water system can request technical assistance by contacting the technical assistance program or through their compliance assistance coordinator (link to map or CAC cheat sheet)
Drinking water technical assistance is provided either by experienced ADEQ staff or through 3rd party contractors.
A scope of work is developed for the water system
Service is provided on pre-arranged dates or on nights or weekends depending on the system’s availability
Deliverables vary from a system evaluation and recommendations for operational improvements to design of a needed treatment system and permitting applications
Is there a Cost of this Service?
There is no cost for providing TMF assistance services. However, in order to improve the system’s operations, some expenditures may result from implementation of program recommendations. ADEQ staff can provide assistance with potential funding opportunities.

7. Water and wastewater Rates dashboard
Interactive rates and financial benchmarking tool
Created by University of North Carolina’s Environmental Finance Center
Designed for utility managers, finance directors, board members, general public/ratepayers
Allows comparison of user rates
Presents cost recovery ratio
Updated every other year
WIFA uses some of the set-aside
In process of updating dashboard. Will be updated in Aug/Sept
dashboards.efc.sog.unc.edu/az

8. Water loss control audit
Partnership between WIFA and ADWR
Based on the American Water Works Association’s (AWWA) Manual for Water Audits and Loss Control Programs (M36)
Contract with consultant with expertise on M36 and training (Cavanaugh)
Provide free technical assistance to complete
the water audit using free M36 software
Pilot in FY18
6 small to medium systems
Phase 2 in FY19
25 small to medium systems
Finishing up Phase 2 – expecting final report in April

9. WIFA Technical assistance
Funding Available for FY2019
Drinking water: $300,000
Wastewater and stormwater: $150,000
Up to $50,000 per project available
WIFA construction loan requirement
Water Infrastructure Finance Authority

10. Types of Technical Assistance
Project Design
Support for Federal Requirements
Requirements
Service population of ≤10,000, OR
Meets WIFA’s criteria as a disadvantaged community
No population requirement
Only available if required as a condition of WIFA funding
Types of Assistance
Design of an infrastructure project
Selection of design alternative
Environmental Assessment
Cost and Effectiveness Analysis
Fiscal Sustainability Plan
1. Because we are continuing to prioritize resource allocation to communities with the greatest need, the Project Design type of TA is limited to small or disadvantaged communities.
2. Fed – these are requirements that come down from Congress, because our funds are from the federal government. We recognize that these requirements can be burdensome for any borrower, so there is no population limit
We’ll be talking about Disadvantaged community status later on in the presentation.

11. Small Drinking Water Systems Fund
Grants for repairs, replacement or upgrades related to compliance issues
Small drinking water systems (10,000 or less)
Multi-agency partnership:
WIFA administers funds
ADEQ recommends system/project
ACC concurs
FY17 $500,000 appropriated
6 projects
FY20 $500,000 expected
Separate from SRF
Two funds established in statute.
In DEQ’s statute
From $9K to $178K
Still $12K from FY17 appropriation

12. Water supply development Fund
Loans to water providers for water supply development
Acquisition of water/water rights
Contracts for water to augment the water supply
Development of facilities for:
Conveyance, storage or recovery of water
Reclamation and reuse of water
Replenishment of groundwater
Grants for planning and design (up to $100,000)
Established in 2007 but to date unfunded
Can fund growth which DWSRF cannot

13. Rural water infrastructure committee
Informal partnership of federal and state agencies that provides loans, grants and technical assistance
Serves as a “One-Stop Shop” for rural communities (population of less than 10,000)
Drinking water or wastewater needs
Water quality compliance
Water quantity problems
Infrastructure
Quarterly meetings
Project sponsors present briefly with project specifics
Funding and technical assistance agencies respond how they can assist

14. Sara Konrad skonrad@azwifa.gov 602-364-1319
Thank You
Sara Konrad