STATE REVOLVING FUND PROGRAMS Mike Perkovich, P.E. Department of - PowerPoint PPT Presentation

STATE REVOLVING FUND PROGRAMS Mike Perkovich, P.E. Department of Environment and Natural Resources Water & Waste Funding Program Administrator

Presentation Overview  Introduction to the State Revolving Fund Programs  Eligible Applicants and Projects  Interest Rates  Principal Forgiveness  SRF Statistic  Questions

State Revolving Fund Programs  Clean Water SRF  Established in 1989  First loan to Huron for $1,656,000  Drinking Water SRF  Established in 1997  First loan to Sturgis for $700,000

State Revolving Fund Programs  Low-interest loan programs  Governed by EPA  Federal/State partnership  Programs require state matching funds  Annual capitalization grants from EPA  State must match on a 5:1 basis  Match primarily generated through the issuance of bonds

SRF Sources of Funds  Federal capitalization grants  Issuance of bonds  State Match  Leveraged  Repayments from borrowers  Interest earned on un-loaned funds  Transfers between SRF programs

Eligible Applicants  Municipalities  Counties  Special Use Districts  Sanitary Districts  Water User Districts  Non-profits organized to provide water services (non-profits not eligible for CWSRF program)

CWSRF Eligible Projects  All publicly owned wastewater treatment and conveyance  Storm water  Nonpoint source (NPS) pollution Bank stabilization  Certain components  of landfill projects Agricultural BMP’s 

DWSRF Eligible Projects  Most water storage, treatment, distribution, and source development  Domestic use; not industrial use  Cannot fund projects primarily for future growth or fire protection

SRF Interest Rates  Base Rates  1.875% for loans up to 10 years  2.0% for loans up to 20 years  2.125% for loans up to 30 years  Project must have a useful life of 30 years or more  Interim Financing Rate  2.00% for 5 years

DWSRF Disadvantaged Assistance Interest Rates  MHI > 80% of State MHI and < 100% 1.875% for 30 years  MHI between 60% and 80% of State MHI 1.625% for 30 years or 1.0% for 10 years for water meter projects  MHI < 60% of State MHI 0% for 30 years

Additional Subsidy  Since American Recovery and Reinvestment Act (ARRA), states can provide additional subsidization  Grants  Principal Forgiveness  Negative interest rates  South Dakota chose principal forgiveness

Additional Subsidy Requirements  Clean Water SRF  no less than 10% of cap grant, but no more than 40%  Only for communities that meet affordability criteria (based on median household income, population trends, and unemployment)

Additional Subsidy Requirements  Drinking Water SRF  no less than 20% of cap grant, but no more than 30% for any borrower  Up to 30% for disadvantaged communities (based on median househoe income)

Principal Forgiveness  Your community is awarded a $1,000,000 loan with 20% principal forgiveness not to exceed $200,000. What does this mean?

Principal Forgiveness  20% of the final loan amount will be “forgiven” when repayment starts  If $1,000,000 drawn, principal to be repaid is $800,000 and interest payments are based on that amount  If $600,000 drawn PF = $600,000 X 0.2 = $120,000;  Amount repaid is $480,000   Principal Forgiveness is a grant

CWSRF Awards by Year

CWSRF Awards  Through December 31, 2019  $896.9 million awarded  459 loans awarded  170 different borrowers  2020 Awards  $44,994,600  20 loans

DWSRF Awards by Year

DWSRF Awards  Through December 31, 2019  $592.3 million awarded  331 loans awarded  159 different borrowers  2020 Awards  $24,644,500  16 loans

The Board of Water and Natural Resources has awarded nearly $1.56 Billion for infrastructure in South Dakota

Water & Waste Funding Program Mike Perkovich mike.perkovich@state.sd.us 605-773-4216 Additional information can be found at http://denr.sd.gov/dfta/wwf/wwf.aspx