1. Dollars and Cents: Ways to Save and be More Resourceful
to the Last Drop
Presented by Rochelle Owen

2. Objective
In this presentation, USDA, Rural Development staff will provide information about components to a preliminary engineering report (PER) which can benefit a community and the operation of their system. Highlights will include actions a community can take even before they have hired an engineer and are looking for project funding. Topics will range from energy use and assets to operators and documents communities can leverage to be their own best advocate.

3. Similar System Cost Calculation
Get 4 Figures
Total Gallons sold to Residential Users
Total Gallons sold (Residential & Other)
Total Number of Residential Connections
Total System Revenue
Sales
Taxes & Assessments

4. Similar System Cost Calculation
Total Water Sales to Residential Customers/ Total Number of Residential Customers/ 12 months = Gallons per EDU
Example: 74,797,6000 gallons sold to Residential Customers/ 928 residential customers/ 12 months = 6,717 gallons per EDU

5. Similar System Cost Calculation
Total Water Sales in Gallons/ Gallons per EDU = Total Number of EDUs in the system
Example: 101,861,536 total gallons sold/ 6,717 gallons per EDU/ 12 months = 1,264 EDUs total in the system

6. Similar System Cost Calculation
Total System Revenue/ Total Number of EDUs in the system/ 12 months = Monthly Cost per EDU
Example: $608,843 total system revenue/ 1,264 EDUs total in the system/ 12 months = $40.14 Monthly Cost per EDU

7. Preliminary Engineering Report (PER) RUS Bulletin 1780-2
Section 1 – Project Planning
Community Engagement – How has the community been involved in the project planning? How has the community developed an understanding of the need and funding strategies?
Community Board Meetings
Public Meetings
Information sent with utility bills
Articles in local newspapers
Population Trends – Provide population data for the service area.

8. Preliminary Engineering Report (PER) RUS Bulletin 1780-2
Section 2 – Existing Facilities
Location Map / System Map – Provide a map and a schematic process layout of all existing faculties. Identify what is no longer in use or abandoned. Have photographs of the existing facilities.
History – When was the system constructed, renovated, expanded, or removed from service.
Condition of Existing Facilities / Inventory and Assessment of System Assets – Describe the condition of the entire existing system.
Financial Status – Provide the recent audits or financial statements
Current Rate Schedule Operations & Maintenance
Energy Costs
Debts and Reserve Accounts
*gallons per EDU, # of EDUs, monthly cost per EDU suggested to go here
Water / Energy / Waste Audits – Provide water loss study, energy assessments, or testing results.

9. Preliminary Engineering Report (PER) RUS Bulletin 1780-2
Section 3 – Need for Project
Health, Sanitation, and Security – Describe the concerns and include any regulatory agency information.
Aging Infrastructure – What are the inadequacies of the system?
Reasonable Growth – Describe the reasonable growth capacity that is necessary to meet the needs during the planning period.
Section 4 – Alternative Considered
Description of the alternatives considered. Even technically infeasible options should be mentioned.
Section 5 – Selection of an Alternative
Life Cycle Cost Analysis is used to evaluate the alternatives. Non-monetary factors should also be considered for the recommended alternative.

10. Preliminary Engineering Report (PER) RUS Bulletin 1780-2
Section 6 – Proposed Project
Provide the full description of the recommended alternative.
Total Project Cost Estimate – This should be a detailed cost estimate which includes construction, equipment, land acquisition, legal, engineering, interim financing, refinancing, construction contingency, and other associated costs.
Annual Operating Budget / Maintenance, Repair, and Operation Plan – Provide itemized information for both the existing system and proposed project about income and O&M costs
Reserves
Debt Service Reserve
Short-Lived Asset Reserve – These are assets not covered under O&M.
Pumps • Meters • Hydrants • UV lamps • Back-up generator
Section 7 – Conclusion
Provide additional system recommendations.

11. Asset Management Plans Components within the PER
System Map (Section 2 Existing Facilities)
Inventory and Assessment of System Assets (Section 2 Condition of Existing Facilities)
Maintenance, Repair and Operation Plan (Section 6 Annual O&M, Section 7 Recommendations)
Customer Rate Study (Section 2 Financial Status)
Audit (Section 2 Financial Status and is done during the funding process and life of the loan)

12. Electronic Frontiers RD Apply
Online application intake system for WEP projects
Applicant controls who can access by assigning roles
Service area mapping feature
Non-linear entry and progress at a glance

13. American Iron and Steel Implementation and Compliance
American Iron and Steel (AIS)
WEP projects obligated after May 5, 2017 have AIS requirements
“Primarily iron or steel” is defined as a product made of greater than 50 percent iron or steel, measured by cost.
The requirements do not apply to products not listed in the statute or items that are at the construction site temporarily.
Refer to RUS Bulletin for more information and contract provisions.
Lined or unlined pipe and fittings
Manhole covers and other municipal castings
Hydrants
Tanks
Flanges
Pipe clamps and restraints
Valves
Structural steel
Reinforced precast concrete
Construction materials

14. Water and Waste Disposal Loans & Grants
Objective
Provide water, waste water and storm water financing in rural areas
Purpose and Uses
Build, repair and improve public water systems, and waste collection and treatment systems.
Other related soft costs (engineering, land, legal, etc.)
Applicant
Public Entities
Non-profit Corporations
Water or Sewer Districts
Financing Types
Guarantee (up to 80%)
Direct Loan/Grant
Direct Loan
Revenue, GO, or mix of the two
Loan/Grant
Direct loan & grant
Service areas with MHI below $55,784 may be considered for grant assistance
Term & Interest Rates
Up to 40 Year Term
Market at 3.500% (>$55,784),
Intermed 2.750%,
Poverty 2.125% (<$44,627)
Interest rates for July 2019 quarter
Population
Rural areas and towns of less than 10,000 population

15. WEP Allocation and Obligation

16. WEP Allocation and Obligation

18. Rochelle K. Owen, AICP Director of Community Programs | Indiana
Office:
USDA is an equal opportunity provider, employer, and lender.