2014 DRINKING AND CLEAN WATER STATE REVOLVING FUND PRE-

APPLICATION WEB CONFERENCE

2

Introduction

• Welcome• Project Oversight– Luis Farias, DWSRF Project Coordinator: (512) 475-4816– Mark Evans, CWSRF Project Coordinator: (512) 463-8510– Scot Foltz, Director: (512) 475-2070

3

Introduction

• Webinar Information– All participants microphones and

telephones are muted.– You can ask questions via the questions

menu option on the GoToWebinar Menu.– If we are not able to answer your question

during the presentation we will follow-up with a Q & A document to all participants.

Additional questions may be sent to the e-mail address below and will be answered following the webinar.Pre_Application_Conference_Requests@twdb.texas.gov

4

Introduction

• Agenda– General Information• State Revolving Fund Program Information • Application Process/Closing

– Drinking Water SRF Program Information– TCEQ FMT Requirements/Assistance– Clean Water SRF Program Information– Application Requirements & Components– Additional Resources

STATE REVOLVING FUND GENERAL INFORMATION

6

General Information

• State Revolving Fund Program Information– Invitation Process - First-come/First-served• Applications received between noon August 15 and

noon August 30, 2013 will be considered in rank order.

– Invited Projects List– Readiness to Proceed (RTP)• updated RTP form can be sent to

rtp_updates@twdb.texas.gov

7

General Information

• Application Process– Applications will be accepted beginning August 15, 2013 at 12:00

PM– Processing of applications will begin August 30, 2013 at 12:00 PM– Application must be administratively complete to begin the

technical review– Technical Review: approx. 60 days, then scheduled for a Board

meeting

• Closing Process– Document review 60-90 days from Board commitment– All funds escrowed; interest begins to accrue

2014 DRINKING WATER STATE REVOLVING FUND

9

DWSRF Program

• Funding Options– Planning, Acquisition and Design Funding (PAD)– Construction Funding– Pre-design Funding

• Loan Terms– 10 Years maximum for PAD– 30 Years maximum for Disadvantaged

Communities– 20 Years maximum for all others

10

DWSRF Program • Loan Origination Fee– 2.25%– Origination assessed only on loan amount

• Interest Rates– Thomson-Reuters Municipal Market Data (MMD) scale– 1.25% below market

Example for July 19, 2013 Maturities Average Market Rate

Average TWDB Rate

Drinking Water SRF(AA rated) 20 3.41% 2.16%

Drinking Water SRF(Non-rated) 20 4.47% 3.22%

Actual rates will vary depending on length, time of closing and structure. Rates are for illustrative purposes only. Contact TWDB staff at (512) 463-6690 for lending rate scale or other inquiries.

11

DWSRF Program

• Additional Subsidy– Disadvantaged Communities - up to 30%, 50%, or

70% Loan Principal Forgiveness– Green Projects or Green Project Components - up

to 15% Loan Principal Forgiveness– Very Small Systems (up to 1,000 persons) - up to

100% Loan Principal Forgiveness (maximum of $200,000)

12

DWSRF Program

• Outlay Reporting Process– Release of funds for costs incurred– Required outlays• PAD (Quarterly)• Construction (monthly)

– Invoices

13

DWSRF Program

• Special Funding Conditions– Davis-Bacon Act– Compliance with Crosscutting Authorities• Environmental - National Environmental Policy Act (NEPA)• Social policy - Disadvantaged Business Enterprises (DBE)• Economic - Contract with debarred or suspended firms

– Financial, Managerial and Technical (FMT) Assessment

– State Water Plan Consistency (New Water Source)

14

DWSRF PROGRAMQUESTION & ANSWER

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

FMTREQUIREMENTS & ASSISTANCE

16

TCEQ FMT

• Additional Requirements for Application– Financial, Managerial and Technical (FMT) Assessment

Report by TCEQ– FMT report is required to close the loan– Need some help?

• TCEQ currently contracts with Texas Rural Water Association to provide water and waste water utilities FMT assistance

– Assistance is free and on site– Wide variety of assistance available

17

TCEQ FMT

• F is for Financial – Rate setting– Funding sources– Budgets

• T is for Technical – Water loss– Disinfection– Sampling

• M for Management – Hiring – Planning– Paperwork

18

TCEQ FMT

• How Does It Work? To make a referral:– Fill out the request form, its on line, and/or• www.tceq.texas.gov/utilities/fmt

– Call, write, or email TCEQ’s Stacy Foster• Phone (512) 239-3105 • Email stacy.foster@tceq.texas.gov• Address P.O. Box 13087, MC-153

Austin, Texas 78701-3087

19

TCEQ FMTQUESTION & ANSWER

2014 CLEAN WATER STATE REVOLVING FUND

21

CWSRF Program

• Program Changes to CWSRF in 2014– Increase in amount of interest rate subsidy• 155 basis points for equivalency projects (Federal

funds)• 120 basis points for non-equivalency projects (State

funds)

22

CWSRF Program

• Funding Options– Planning, Acquisition and Design Funding (PAD)

• In the CWSRF, funding for land acquisition is eligible only if land purchased is integral to the treatment process or used for the ultimate disposal of residues resulting from such treatment. This includes land that is used specifically to treat water (e.g., effluent disposal fields, facultative lagoons, etc.) and excludes land for WWTP sites, easements, etc.

– Construction Funding– Pre-design Funding

• Loan Terms– 10 years maximum for PAD– 30 years maximum for Construction (no disadvantaged status

requirement)

23

CWSRF Program

• Equivalency vs. Non-Equivalency– Equivalency projects

o Receive funding from the Federal capitalization granto Lower interest rates (1.55% below market rate)o Disadvantaged subsidy in form of loan forgivenesso Follow Federal process including Disadvantaged Business Enterprise (DBE),

Federal crosscutters and Federal forms, additional planning and design requirements

– Non-equivalency projectso State fundso Interest rate of 1.20% below market rateo No DBE, Federal crosscutters

24

CWSRF Program

• Additional Subsidy– Disadvantaged Communities - up to 30%, 50%, or

70% Loan Principal Forgiveness– Green Projects or Green Project Components - up

to 15% Loan Principal Forgiveness

25

CWSRF Program

• Loan Origination Fee– 1.85%– Origination assessed only on loan amount

• Interest Rates– Thomson-Reuters Municipal Market Data (MMD) scale– 1.55% (equivalency) or 1.20% (non-equivalency) below

market

26

CWSRF Program

Example for July 19, 2013 Maturities Average Market Rate

Average TWDB Rate

Clean Water SRF Non-Equivalency (AA rated) 20 3.41% 2.21%

Clean Water SRF Non-Equivalency (Non-Rated) 20 4.47% 3.27%

Clean Water SRF Equivalency (AA rated) 20 3.41% 1.86%

Clean Water SRF Equivalency (Non-rated) 20 4.47% 2.92%

Actual rates will vary depending on length, time of closing and structure. Rates are for illustrative purposes only. Contact TWDB staff at (512) 463-6690 for lending rate scale or other inquiries.

27

CWSRF Program

• Outlay Reporting Process– Release of funds for costs incurred (reimbursement,

for equivalency projects)– Release of funds for milestone (non-equivalency

projects)– Required outlays

• PAD (Quarterly)• Construction (monthly)• Invoices

28

CWSRF PROGRAMQUESTION & ANSWER

Application Requirements & Components

30

Application Requirements

• Two Hard Copies– Double Sided– One Marked Original

• One Electronic Copy– CD/DVD– Flash/Thumb Drive

31

Application Requirements

• Applications will be accepted beginning August 15, 2013 at 12:00 PM CT

• Applications will not be accepted by E-mail

32

Application

• Standard Application Form– Used for all funding programs– Skip questions specific to other funding programs

http://www.twdb.texas.gov/financial/applications

33

Application Components

• Part A - General– A7g: Applicant’s PRIMARY contact– A11: Additional funds chart– A12: DUNS number and System for Award

Management (SAM) Registration

34

PART A - GENERALQUESTION & ANSWER

35

Application Components

• Part B - Financial– B2: Five year comparative system operating

statement– B3: Current average residential usage and rate

information– B15 Proforma; Three different options depending

on proposed repayment

36

B2 – Five-year Operating Statement Illustration

2011 2010 2009 2008 2007

Revenues

Customer Charges $647,644

Miscellaneous Revenues $7,002

Total Revenues $654,646

Expenses

Salaries $125,407

Payroll Taxes and Retirement $20,001

Office Supplies and Expense $4,931

Total Expenses $506,095

Net Revenues $148,551

Water customers 731 745 758 770 762

Wastewater customers 673 689 699 714 703

1. Five years of information.2. Include only revenues that are pledged for repayment.3. Don’t include non-cash expenses, like depreciation.4. Don’t include developer’s contributions and transfers from other funds.

37

B15 – Pro forma IllustrationYear Net Revenues Existing Debt

ServiceProposed Debt

ServiceRevenues After

Debt Service2013 $148,551 ($73,160) $75,391

2014 $148,551 ($73,285) ($35,100) $40,166

2015 $148,551 ($72,365) ($50,100) $26,086

2016 $148,551 ($72,445) ($49,515) $26,591

2044

1. Include every year from loan closing until final payment.2. Net revenues same as the most recent in B2 table.3. Net revenues only increase in a year due to rate increase, footnote increase amount.4. This is illustrative, interest rates and principal amounts change.

38

PART B – FINANCIALQUESTION & ANSWER

39

Application Components

• Part C - Legal– C1 & C2: Legal citations of applicable laws– C3: Provide a clear statement of pledge– C5: Make approved application amount “up to” a

certain dollar level

40

Application Components

• Part C - Legal– C8: List ALL consultants

• Draft contracts are required prior to commitment/Executed contracts prior to closing.

• Contracts must be awarded according to Disadvantaged Business Enterprises (DBE) rules.

– C12: Attach a Site Certificate (ED-101) documenting ownership interest if all necessary land and easements for the project have already been acquired. If acquisition of property is still needed, provide a certification of the legal power and authority to acquire the property and whether TWDB funding is being requested for acquisition costs.

41

PART C – LEGALQUESTION & ANSWER

42

Application Components

• Part D - Engineering– D1: Preliminary Engineering Feasibility Data

a) A description and purpose of the project, including existing facilities.

b) A map of the service area and drawings as necessary to locate and describe the project.

c) A project schedule including proposed timing of funding needs for phases of the project. Schedule should include:i. Closingii. Planning Complete (Environmental and Engineering)iii. Construction Start First Contractiv. Construction End Last Contractv. No. of Proposed Contractsvi. DWSRF applicants must complete a Projected Draw Schedule

43

Application Components

• Part D - Engineering– D1: Preliminary Engineering Feasibility Data

d) A copy of current and future populations and projected water use or wastewater flows.

e) A description of alternatives the applicant has considered (or to be considered during detailed planning) and reasons for the selection of the project proposed.

44

Application Components

• Part D – Engineering (cont)– D1: Preliminary Engineering Feasibility Data

f) Construction Funding - Provide Engineering Feasibility Report in accordance with guidance TWDB-0555 (DWSRF) or TWDB-0556 (CWSRF)

– D2: Budget• Budget form TWDB-1201

45

Application Components

• Part D – Engineering (CWSRF only)– D11: The applicant must be a Designated

Management Agency (DMA) for wastewater collection and treatment.• Form WRD-210• Required as per Section 208 of the Federal Water

Pollution Control Act, as amended, and submitted to TCEQ for inclusion in the Texas Water Quality Management Plan

– D12: List all major permits necessary for project

46

PART D – ENGINEERINGQUESTION & ANSWER

47

Application Components

– Part E - Environmental• E5: If an environmental determination has already been

issued for the project, attach a copy of the determination and all supporting documents to E5.

• E3: Requesting a Categorical Exclusion? Please see:– DWSRF: See 31 Texas Administrative Code 371.42.– CWSRF Equivalency: 31 TAC 375.62– CWSRF Non-equivalency: 31 TAC 375.52

• E1: If E3 – E5 do not apply, please provide a discussion of any known permitting, social, or environmental issues that may affect the evaluation of the project alternatives or implementation of the chosen project.

48

Application Components

– Part E – Environmental – Timing and Budget• PAD: Planning, Acquisition, Design Funding

– Planning phase: Environmental Review must be completed before funds can be released for Acquisition & Design.

• Construction Funding– If PAD through TWDB then Environmental Review is already

complete

• Pre-Design Funding (Planning through Construction)– Is project CE-able? Finding from another agency? Can you

provide a complete environmental report?

49

PART E – ENVIRONMENTALQUESTION & ANSWER

50

Application Components

• Part F - Planning and Water Conservation– F1: Water Conservation Plan and Utility Profile (

TWDB-1965) • 5 & 10 year targets in gallons per capita per day (GPCD)

– Total GPCD, Residential GPCD, and Water Loss in GPCD

• Plans should be developed after and based on completed Utility Profile and Water Loss Audit

51

Application Components

• Part F - Planning and Water Conservation (cont)– F4: Water Loss Audits (WLA)

• Need to have the current required WLA on file• Additional information may be requested based on certain

water loss issues

– F3: Water Use Survey• Need to have submitted an annual water use survey for the

three years prior to the application date

– Consistency Review• Is the project consistent with approved regional and state

water plans

52

PART F PLANNING & WATER CONSERVATIONQUESTION & ANSWER

53

Application Components

• Part G: Green Projects and Green Project Components– Green Subsidy for DWSRF: $802,755– Green Subsidy for CWSRF: $915,315– Categorical or Business Case– Green worksheets can be submitted prior to the application– Green Categories: Energy Efficiency, Water Efficiency,

Environmentally Innovative, Green Infrastructure– Green Guidance: TWDB-0161– Green Worksheets:

• DWSRF – TWDB-0163• CWSRF – TWDB-0162

54

PART G – GREEN PROJECTS & GREEN PROJECT COMPONENTSQUESTION & ANSWER

55

Application Components• Part H: Disadvantaged Business Enterprise

Requirements– Applies to DWSRF and CWSRF Equivalency Only– DBE Coordinator: Rene Gonzalez (512) 463-2634,

rene.gonzalez@twdb.texas.gov – Six affirmative steps– Publication requirements– Applies to project consultants as well as

contractors/subcontractors– Instructions and guidance available on TWDB

website

56

Application Components• Part H: Disadvantaged Business Enterprise

Requirements– TWDB-0215: Entity’s acknowledgement of Good Faith

Efforts and Fair Share Goals. THIS FORM IS REQUIRED WITH YOUR APPLICATION.

– TWDB-0216: Entity’s Documentation of Good Faith Efforts

– TWDB-0217: Consultant/Prime Consultant/Prime Contractor’s acknowledgement of Good Faith Efforts and Fair Share Goals

– TWDB-0373: List of awarded contracts for the project

57

PART H – DISADVANTAGED BUSINESS ENTERPRISE REQUIREMENTSQUESTION & ANSWER

Additional Resources

Clean Water State Revolving Fund Application TutorialDrinking Water State Revolving Fund Application Tutorial

Separate meetings should be scheduled to discuss project specifics and answer questions.

Questions and AnswersAdditional questions can be e-mailed to:

Pre_Application_Conference_Requests@twdb.texas.govLuis Farias, DWSRF Project Coordinator: (512) 475-4816Mark Evans, CWSRF Project Coordinator : (512) 463-8510Scot Foltz, Director: (512) 475-2070