Dat Tran, P .E., Chief Drinking Wat er Technical Assist ance S ect ion Division of Financial Assist ance
• Introduction • Funding Process • Application and Requirements • Eligibility • Definitions • Median Household Income • Economically Distressed Area • Prioritization of Proj ects • DWS RF Categories • Grant Limits • Financing Package • Example • Timeline • How to Apply • Contact Information 2 of 25
• S afe Drinking Water S tate Revolving Fund (DWS RF)- $83.221 million for Federal Fiscal Y ear (FFY) 2015 • Proposition 1 - Chapter 5, S ection 79724 - $260 million shall be available for grants and loans for public water system infrastructure improvements and related actions to meet safe drinking water standards, ensure affordable drinking water, or both. • Two funding sources (Drinking Water S RF/ Prop1) • One program, One process 3 of 25
• Ut ilize t he DWS RF Policy, applicable federal and st at e st at ut es, regulat ions, and guidance as described in t he Draft S FY 2015-2016 DWS RF Int ended Use Plan (IUP) t o administ er DWS RF and Prop 1 funds as one program • S implifies t he funding process and allows t he best possible financing package t o be provided t o applicant s t hat are eligible for funds from t he DWS RF , Prop 1, and ot her st at e sources 4 of 25
• One Applicat ion for Drinking Wat er Funding • Four different packages (General, Technical, Environmental, and Financial) • S ubmit Application through Financial Assistance Application S ubmittal Tool (F AAS T) • All Applicant s must comply wit h federal cross cut t ers • All Applicant s must demonst rat e Technical, Managerial and Financial (TMF) capacit y 5 of 25
• Eligible Applicant s • Public agencies • Nonprofit organizations • Public utilities • Mutual Water Companies • Federally recognized Indian tribes and S tate Indian tribes listed on the Native American Heritage Commission’s California Trial Consultation List • Eligible Proj ect s • Planning, Design, Construction of public water system infrastructure improvements and related actions to meet safe drinking water standards 6 of 25
• Grant – Prop 1 • Principle Forgiveness – DWS RF Grant • Median Household Income (MHI) - the household income that represents the median value for the service area of a public water system • Loans - any repayable financing instrument, including a loan, bond, installment sale agreement, note, or other evidence of indebtedness • Disadvantaged Community (DAC) - the entire service area of a community water system in which the MHI is less than 80% of the statewide MHI • Severely Disadvantaged Community (SDAC) - the entire service area of a community water system in which the MHI is less than 60% of the statewide MHI 7 of 25
2015 California S tatewide MHI $61,094 Disadvantaged Community (DAC) MHI $48,874 (Less than 80% of the S tatewide MHI) S everely Disadvant aged Communit y (S DAC) MHI $36,655 (Less than 60% of the S tatewide MHI) S tate Water Board, DF A, utilizes the American Community S urvey to determine MHI. 8 of 25
Economically Distressed Area (Prop 1) Population < 20,000 persons MHI < 85% of S tatewide MHI Financial Hardship (Average Water Rate exceeds 1.5% of MHI) And one or more of the following conditions: 1. Unemployment rate must be at least 2 percentage points above the statewide average 2. Low population density (<20 individuals per square mile) 9 of 25
• Eligible proj ect s are funded in t he order applicat ions are complet ed and approved • Priorit y given t o • DWS RF Categories • Proj ect benefiting a small community water system in a DAC or S DAC • Proj ect that provides shared solutions for at least three communities with one being a DAC or S DAC • Proj ect will result in consolidation of water system(s) 10 of 25
• Category A – Immediate Health Risk • Category B – Untreated or At-Risk S ources • Category C – Compliance or S hortage Problems • Category D – Inadequate Reliability • Category E – S econdary Risks • Category F – Other Proj ects 11 of 25
• Up t o $500,000 Grant / Principle Forgiveness per Planning Proj ect • Up t o $5 Million Grant / Principle Forgiveness per Const ruct ion Proj ect • $25,000 per service connection maximum • Up t o $20 Million maximum Grant / Principle Forgiveness funding amount for regional proj ect , where at least one ent it y is DAC • $50,000 per service connection maximum for regional proj ects 12 of 25
• Grant s and/ or Principle Forgiveness are given t o S DAC, DAC, Economically Dist ressed Area, and S chools as shown in Tables 1 and 2 • Local Cost S hare Requirement shown in Tables 3 and 4 • Loans are available 13 of 25
Table 1 – DWSRF and Prop 1 Principal Forgiveness and Grant Criteria for PWSs Serving Disadvantaged Communities Maximum Principal Forgiveness, Grant PWS Affordability Criteria or Combination from DWSRF and Prop 1 Average Residential Type of Community Maximum Amount Percentage of Water Rate as Total Eligible Project Cost (Planning/Construction) Served by PWS Percent of MHI Proposed Financing will WMHI < 1.5% Raise Rates to ≥ 1.5% 1.5% ≤ WMHI < 2% $500K/ $5Mil up to 65% DAC 2% ≤ WMHI < 2.5% up to 70% $500K/ $5Mil WMHI ≥ 2.5% up to 80% $500K/ $5Mil SDAC NA up to 100% $500K/ $5Mil 14 of 25
Table 2 – Prop 1 Grant Criteria for PWS Serving an Economically Distressed Area Maximum Principal Forgiveness, PWS Affordability Criteria Grant, or Combination from DWSRF and Prop 1 Average Residential Type of Community Maximum Amount Percentage of Total Eligible Water Rate as Project Cost (Planning/Construction) Served by PWS Percent of MHI Proposed Financing will WMHI < 1.5% Raise Rates to ≥ 1.5% Economically 1.5% ≤ WMHI < 2% up to 65% $500K/ $5Mil Distressed Area 2% ≤ WMHI < 2.5% $500K/ $5Mil up to 70% WMHI ≥ 2.5% up to 80% $500K/ $5Mil 15 of 25
• Prop 1 Local Cost S hare • Minimum Local Cost S hare for DAC and Economically Distressed Area shown in Tables 3 and 4 • Local Cost S hare may be in the form of • DWS RF repayable financing • Prop 1 Loan • Non-S tate funding 16 of 25
Minimum Prop 1 Local Cost Share Criteria for PWS Serving DAC Table 3 – Type of Community Average Residential Water Minimum Local Cost S hare Rate as Percent of MHI (percentage of total proj ect cost) Served by PWS WMHI < 1.5% 100% 1.5% ≤ WMHI < 2% 35% DAC 2% ≤ WMHI < 2.5% 30% WMHI ≥ 2.5% 20% SDAC NA 0% 17 of 25
Table 4 – Minimum Prop 1 Local Cost Share Criteria For PWS Serving Economically Distressed Area Type of Area Average Residential Water Minimum Local Cost S hare Served by Rate as Percent of MHI (percentage of total proj ect cost) PWS 1.5% ≤ WMHI < 2% 35% Economically 2% ≤ WMHI < 2.5% 30% Distressed Area WMHI ≥ 2.5% 20% 18 of 25
• Loans are available at very low rates • Interest rate at 50% of general obligation bond rate (2015 Interest Rate is 1.663% ) • 5 year term for Planning Loans • Maximum of 20 year term for Construction Loan for Non-DAC • Up to 30 year term for Construction Loan for DAC/ S DAC • Loans are available at 0% interest rate for DAC/ S DAC that meets the following criteria: • Classified as a small community water system, and • Whose average residential water rates meet or exceed the target consumer rate of 1.5% 19 of 25
ABC Water Company’s service area has 150 service connections, a MHI of $48,000 and water rates of $81 per month. The proposed proj ect cost is $6 Million. How much grant, principle forgiveness, loan are they eligible for? S tep 1: Are they a DAC? MHI is less than $48,874 so yes they are a DAC. S tep 2: Are they a S DAC? MHI is more than $36,655 so they are not a S DAC. 20 of 25
ABC Wat er Company’s service area has 150 service connect ions, a MHI of $48,000 and wat er rat es of $81 per mont h. The proposed proj ect cost is $6 Million. How much grant , principle forgiveness, loan are t hey eligible for? S t ep 3: What is t he wat er rat e as a percent age of MHI? Mont hly Wat er Bill x 12 = $81 per mont h x 12 S ervice Area MHI $48,000 = 0.02025 x 100 = 2.025% 21 of 25
ABC Water Company’s service area has 150 service connections, a MHI of $48,000 and water rates of $81 per mont h. The proposed proj ect cost is $6 Million. How much grant, principle forgiveness, loan are they eligible for? S tep 4: Go to Chart DAC, Water Rate is 2.025% of MHI is eligible for Up to 70% grant, not to exceed $25,000 per connect ion =0.70 x $6 Million =$4,200,000 S tep 5: Check against connection cap =$25,000 x 150 connections =$3,750,000 Proj ect is eligible for $3.75 Million grant and $2.25 Million in loan/ local cost share 22 of 25
• Written comments on the Draft S FY 2015-16 DWS RF IUP/ Prop 1 must be received by 12:00 noon on Tuesday, June 30, 2015 DrinkingWaterS RF@ waterboards.ca.gov • Comments will be addressed • The Draft S FY 2015-16 DWS RF IUP/ Prop 1 will be finalized and presented to the Board for adoption in August 2015 • DWS RF IUP/ Prop 1 Financing Agreements may be issued immediately following Board adoption 23 of 25
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