Virginia Resources Authority: Infrastructure Financing Options

1. 1111 E. Main Street Suite 1920 Richmond, VA 23219 804.644.3100 804.644.3109 Fax www.VirginiaResources.org Virginia Resources Authority Infrastructure Financing Options Virginia Municipal League Local Government Roundtable October 2019

2. Virginia Resources Authority Overview

3. To provide innovative, cost-effective and sustainable financial solutions to build vibrant and healthy Virginia communities VRA Mission

4. VRA - History in the Commonwealth • Created by General Assembly in 1984 • 30+ years of underwriting experience • Provides low interest loans to municipalities • Finances municipal facilities, equipment & infrastructure • Since inception, invested over $8.5 billion funding over 1,800 projects across the Commonwealth

5. VRA Assigned Project Areas

6. Existing Financing Products & State Partnerships Virginia Pooled Financing ProgramClean Water Revolving Loan Fund Drinking Water State Revolving FundDam Safety & Flood Prevention Fund Brownfield Assistance Fund Virginia Airports Revolving Fund Tobacco Region Revolving Fund Virginia Tourism Gap Financing Program Virginia Transportation Infrastructure Bank

7. VRA Credit and Security • VRA performs loan underwriting for all programs • Assess general economic conditions • Analysis of system, rates and historical financial data • Evaluate project, revenue projections & debt coverage • Security tailored to project and locality • Revenue pledge • General obligation • Double barrel • Lease-Leaseback • Moral obligation • State-aid intercept • Debt service reserve • Special revenue pledge

8. Virginia Pooled Financing Program

9. Virginia Pooled Financing Program • Eligibility • Available for all VRA-eligible project areas • Governmental borrowers • Interest rates • Natural “AAA”/“AA” rates • Low rates and interest cost savings with VRA’s high credit quality • Loan terms • Up to 30 years • Custom-tailored to meet borrower financial objectives and policies • Locality considerations • Loan security • Project timing • Alternative financing options (bank placement, other federal / state programs, etc.)

10. VPFP – Value Added Benefits for Localities • Affordable capital access in all financial market settings • AAA / AA rates • Economies of scale through shared issuance costs • Flexible amortizations and loan structures • Convenience!!! • VRA team coordinates the logistics of the public bond issuance (bond pricing, rating agency interaction, refunding escrow, verification, etc.) • Frequent program issuance (spring, summer, and fall) • No rating requirements (except for regional jails and material obligors) • No ongoing public, continuing disclosure requirements specific to VPFP debt (except for material obligors) • Ongoing refunding monitoring

11. Application and Approval Process - VPFP Applications available on VRA’s website at: www.VirginiaResources.org

12. Virginia Pooled Financing Program (cont’d) • VRA Fees: • Application Fee: None • VRA Loan Origination Fee: 0.125% of loan par amount paid at closing (does not apply to refundings of existing VRA debt) • Annual Administrative Fee: 0.125% of outstanding principal, paid semi-annually

13. Virginia Pooled Financing Program What are the typical security options? Water / Wastewater Project Funding • Water / sewer treatment plants • Distribution / collection systems • Water storage tanks • Pump stations • Related appurtenances • Water / sewer system revenue pledge • General obligation • Moral obligation pledge (supplements revenue pledge)

14. Virginia Pooled Financing Program Local Gov’t Building Project Funding • Administration buildings • Court facilities • Social service facilities What are the typical security options? • Leasehold interest in collateral / real property • General obligation

15. Virginia Pooled Financing Program What are the typical security options? Public Safety Project Funding • Fire station facilities and vehicles • Rescue station facilities and vehicles • Emergency communications equipment (E911, radio equipment) • Police / sheriff facilities and vehicles • Regional / local jail facilities • General obligation • Leasehold interest in collateral / real property • Equipment lease • Jail facility revenue pledge (regional jail projects)

16. Virginia Pooled Financing Program What are the typical security options? Transportation Project Funding • Road, bridge improvements • Parking garages • Buses, public transit vehicles • Commuter lots • Sidewalk improvements, bike paths • General obligation • Leasehold interest in alternate collateral / real property • Equipment lease • Toll revenue

17. Virginia Pooled Financing Program Energy Project Funding • Building retrofits • HVAC system upgrades • Energy production projects (landfill gas to energy, co-generation facilities) What are the typical security options? • Equipment Lease • Leasehold interest in collateral / real property • General obligation

18. Virginia Airports Revolving Loan Fund

19. Virginia Airports Revolving Fund (VARF) • Established by General Assembly in 2000 with initial $25 million appropriation • Below-market interest rate loan program (0.50% subsidy) • Supports publicly-owned, public-use airports • Enhances economic opportunities & economic vitality across Commonwealth • Total investment FY01 – Present: over $90 million in loans for airport projects across the Commonwealth

20. Administration • Engineering (Planning, Design and Construction) • Legal and Financing Fees • Construction Costs • Equipment • Land • Cost of interim financing • Administration • Engineering (Planning, Design and Construction) • Legal and Financing Fees • Construction Costs • Equipment • Land • Cost of interim financing Virginia Airports Revolving Fund Richmond Executive – Chesterfield County Airport W79 Tappahannock-Essex County Airport KMTV Blue Ridge Airport KOKV Winchester Regional Airport KOFP Hanover County Airport KPTB Dinwiddie County Airport • KPHF Newport News / Williamsburg International Airport W96 New Kent County Airport KHEF Manassas Regional Airport

21. Virginia Airports Revolving Fund • Eligible projects include: • Terminal buildings & other passenger or cargo-related facilities • Machinery & equipment • Appurtenances, lands, rights-in-land, aviation rights, water rights, rights-of-way • Runways • Fuel facilities • Parking garages • Roadways and utilities • Hangars • Debt refinancing

22. Virginia Airports Revolving Fund • Eligible expenses include: • Administration • Engineering (planning, design, & construction) • Legal & financing fees • Construction costs • Equipment • Land • Cost of interim financing

23. Application Process • Submit applications to both VRA & Virginia Aviation Board (VAB) • Accepted on a rolling basis • Prioritized by VAB • Ranked based on loan size, airport role & project type • Credit analysis & loan closing completed by VRA

24. Virginia Clean Water Revolving Loan Fund

25. Clean Water Revolving Loan Fund • Eligibility • Traditional focus: High Water Quality Impact Wastewater Projects • Also eligible: Stormwater, brownfield remediation and land conservation • Governmental borrowers (with a few exceptions) • Interest rates • At least 1% below prevailing market rates • 0% loans available based on criteria & demographics • Wastewater Loan terms • Up to 25 years for treatment plants and pump stations • Up to 30 years for sewer lines • No issuance costs beyond local bond counsel • Federal requirements (e.g. Davis-Bacon and American Iron & Steel)

26. Application Process - CWRLF • Submit applications to DEQ • Accepted annually (usually July) • Projects prioritized and approved by DEQ • Credit analysis & loan closing completed by VRA • Project bids and other DEQ conditions satisfied prior to loan closing

27. Drinking Water State Revolving Fund Program

28. Drinking Water State Revolving Fund Program • Eligibility • Projects to correct health and compliance issues • Governmental borrowers (with a few exceptions) • Interest rates • Market minus 1.00% • Grant funding available based on criteria & demographics • Loan terms • Up to 30 years • Payment waiver during construction • No issuance costs beyond local bond counsel

29. Application Process - DWSRF • Submit applications to VDH • Accepted annually (usually April) • Projects prioritized and approved by VDH • Credit analysis & loan closing completed by VRA • Project bids and other VDH conditions satisfied prior to loan closing

30. Other Programs

31. Other Programs • Dam Safety and Flood Protection Fund • VRA partners with the Department of Conservation and Recreation to provide grants to local governments and private entities to fund dam break mapping, flood hazard plans, studies and mapping and other flood hazard mitigation and reduction activities • Virginia Tourism Gap Financing Program • 2011 General Assembly established a financing program through the Virginia Tourism Corporation for qualified Virginia tourism development projects • Purpose of the program is to provide gap financing for projects in partnership with developers, localities, financial institutions and the Commonwealth • Virginia Transportation Infrastructure Bank • Revolving loan fund created to make loans and other financial assistance to localities, certain private entities, and other eligible borrowers • Encourages the investment of both public and private funds in the development of transportation projects • Virginia Tobacco Region Revolving Fund • 41 tobacco-dependent localities in Southwest and Southside Virginia are eligible for below-market loans up to 20 year terms • Commission recommends application for loan status given an identifiable revenue stream

32. VRA Team

33. VRA Team – Experience and Dedication • Superb customer service • Immediate response • Continuous communication • Long-term relationships • Exceptional expertise Stephanie Hamlett Executive Director Jean Bass Policy Advisor Shawn Crumlish Director of Financial Services Peter D’Alema Director of Program Management Curtis Doughtie Director of Finance and Administration Tracy Gordon Senior Policy Analyst Stephanie Jones Senior Program Manager / Compliance Officer

34. www.VirginiaResources.org (804) 644-3100