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The WIFA Way… Affordable and Efficient

The WIFA Way… Affordable and Efficient. Angie Valenzuela, Sr. Loan Officer/GADA Program Manager Sara Konrad, Environmental Program Supervisor GFOAZ, February 21, 2013. WIFA Topics to Cover. Who we are and what we can fund Who can apply What funding and incentives WIFA offers

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The WIFA Way… Affordable and Efficient

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  1. The WIFA Way…Affordable and Efficient Angie Valenzuela, Sr. Loan Officer/GADA Program Manager Sara Konrad, Environmental Program Supervisor GFOAZ, February 21, 2013

  2. WIFA Topics to Cover • Who we are and what we can fund • Who can apply • What funding and incentives WIFA offers • Other services WIFA provides • Highlighted projects Water Reclamation Facility City of Casa Grande

  3. Who We Are • Water Infrastructure Finance Authority of Arizona • Independent State agency • “State Revolving Fund”

  4. EPA(Federal Capitalization provides initial funds) Wastewater Loans Arizona (WIFA provides 20% match of Federal Capitalization Grants) Low interest loans Water Infrastructure Finance Authority (State Revolving Fund) Loan repayments Low interest loans Drinking Water Loans Bond proceeds Bond Holders (provide additional funds) Loan repayments Bond repayments

  5. Who We Are • Provide loans and grants for drinking water and wastewater infrastructure throughout Arizona • Loans: planning, design, improvement, construction, acquisition • Grants: planning and design phases • More than $1.8B of investment in AZ’s communities since 1992 • More than 350 projects Drinking Water Wastewater

  6. What WIFA Can Fund

  7. Who Can Apply Wastewater • Publicly-owned wastewater facilities Drinking Water • Public water systems owned by political subdivisions • Private ACC-regulated systems Additional eligibility criteria for non-community systems

  8. Streamlined Application Process • Financing available year-round • Loans approved at bimonthly board meetings • Three-step application process See flowchart of loan application process

  9. Streamlined Application Process • Complete online Project Priority List (PPL) application • Once submitted, project is assigned to a WIFA project manager • System/Project is scored and ranked on WIFA’s Project Priority List

  10. www.azwifa.gov

  11. Streamlined Application Process 2. Obtain debt authorization • Governmental systems with a population of <50,000-resolution of the governing body • Governmental systems with a population of >50,000– bond election • Private water companies - ACC financing approval

  12. Streamlined Application Process 3. Request and complete Project Finance Application (PFA) PFA Package 1. Project data addendum 2. Financial capability addendum 3. Legal capability addendum 4. Technical capability addendum 5. Managerial capability addendum • Optional site visit • PFA due 8 weeks prior to Board meeting

  13. Streamlined Application Process • WIFA staff completes due diligence analysis and makes recommendation to WIFA Board of Directors • Loan closes approximately 4 weeks after Board approval • Once loan executed, submit disbursement requests for costs incurred

  14. What Does WIFA Offer? • No application fees or closing costs • No minimum or maximum loan amount • Smallest loan amount: $2,968 • Largest loan amount: $87.7M • Largest multi-loan project: $346M Wastewater Collection System Lake Havasu City

  15. Below-Market Interest Rates All loans subsidized (typically below market interest rates) AAA credit rating = low-interest financial assistance • Public:Average for most recent years under 3.0%

  16. Below-Market Interest Rates Interest Rate Index  Subsidy Rate Index = Combined Interest and Fee Rate (CIFR) Tax-Exempt Interest Rate Index • Index for political subdivisions • Based on WIFA’s AAA rating (20 year AAA Municipal G.O. bond rate)

  17. Standard Terms • 20 year repayment term • Fixed payments • Interest calculated only on funds drawn • Debt Service Coverage - depends upon dedicated source of repayment, typically 1.20 on a system revenue pledge • Subsidized Combined Interest and Fee Rate (CIFR): 70% - 95%

  18. Pledge/Coverage Requirements

  19. What Does WIFA Offer? Special program for design loans • 1% interest rate • Interest only payments for 3 years • Principal is rolled into construction loan at end of 3 years

  20. What Does WIFA Offer? Breaks for Disadvantaged Communities • Longer loan term • Reduced interest and fee rate • Forgivable Principal Solar at Drinking Water Facility City of Somerton

  21. What Does WIFA Offer? Incentives for Green Projects

  22. Planning and Design Grants -Feasibility Studies -Rate Studies/Financial Audits -District formation -Capital Improvement Plans -Other planning projects Planning • Plan or design a capital improvement project • Funds used to contract with engineer or other consultant -Preliminary Engineering Reports -Environmental Assessments -Engineering Plans and Specifications -Other design projects Pre-design & Design Construction Project Construction (Not eligible for grant funding)

  23. Planning and Design Grants • Awards capped at $35,000 • Paid as work is completed • 18 months to complete • 2 cycles per year

  24. Planning and Design Grants

  25. Planning and Design Grants Project Funding and Local Match • Grant funding – 60% of total planning/design project cost (up to $35,000) • Local match funding – at least 40% of total project cost • Cash • In-kind services Green Projects - Local match waived or reduced • Primary purpose must be green • Green determination based on EPA GPR guidance

  26. Planning and Design Grants Match Examples WIFA funding cap = $35,000

  27. Planning and Design Grants Five Evaluation Criteria • Need for project • Green components • Project tasks and work products • Costs and benefits • Need for grant funding

  28. Other WIFA Services Annual Residential Rate Survey

  29. Financing Alternatives Comparison Tool (FACT) • Compares the costs associated with various financing options for water infrastructure projects. • Produces a comprehensive analysis that incorporates financing, regulatory, and other important costs. Key Features: • Pre-loaded with eight different sources of financing,- most common for water infrastructure projects. • Setup financing options using multiple funding sources • Use “Typical Values” for unknown financing and annual costs. • Can include customized costs that may occur with specific analyses(“Other”). http://water.epa.gov/grants_funding/cwsrf/fact.cfm

  30. Recent WIFA Loans

  31. City of Prescott – Zone 12, 19 and 27 Infrastructure Improvements • Project Description: Replace and enhance various aging facilities to bolster the pressures and to provide additional storage capacity

  32. City of El Mirage – Automated Meter Reading & Line Replacement • Project Description: Replace 11,000 old, inaccurate meters with Automated Meter Reading (AMR) meters. Replace up to 17,600 feet of existing lines with new lines

  33. City of Flagstaff –Sinagua and Fort Tuthill Well Projects (2 loans) • Project Descriptions: • Fort Tuthill Infrastructure upgrades and improvements to connect the wellsite to the water distribution system. Replace 898 water lines, provide adequate water for fire protection and a looped water distribution system for redundancy • Sinagua Combine two wells into one well house (water transmission line and expansion of an existing well house)

  34. City of Somerton – 272 kW Solar - Water Treatment Facility • Project Description: Install a solar array to provide power to the City’s water treatment plant and well. The solar array will generate 65% of the facility’s electric demand. The overall savings from the solar project are estimated at $75,000 per year and $2 million over 30 years.

  35. City of Winslow– Replacement Well # 7 • Project Description: Replace well with a new production well in a location to address water quality issues

  36. City of Tucson – SAVSARP Collector Pipelines, Reservoir, Booster, and Interconnect Pipeline (2 loans) • Project Description: Design and construct an 8.5 million gallon forebay reservoir and a 40 million gallons per day booster station to recover and distribute City’s full allocation of Colorado River Water

  37. Town of Payson–Cragin Project Phase II • Project Description: Continuation of previous loan for $8M (Phase I). Construct water pipeline from the Cragin reservoir to water treatment plant and from water treatment plant to the distribution system. Construct water treatment plant

  38. Town of Clarkdale – Twin 5s Water Main Replacement • Project Description: Replace and relocate water mains that pose security, operational and maintenance issues

  39. Town of Clarkdale – Broadway Water Reclamation Facility • Project Description: Replace an outdated and technologically limited municipal wastewater facility with a recycled and refurbished mechanical wastewater treatment facility producing Class A+ effluent

  40. City of Kingman –Downtown WWTP Upgrade and Solar • Project Description: Construct new 0.62 MGD Wastewater Treatment Plant with solar and other energy efficiency elements. • Used WIFA funds for every phase of project: • 2004 - planning and design grant for Location and Process Selection Study • 2009 - 3-yr loan for the design • 2011- design loan rolled into construction loan

  41. City of Prescott –Airport WWTP Upgrades - 3.75 MGD • Project Description: Expand to a treatment capacity of 3.75 mgd to accommodate current flows. Approximately 28% of the project costs, $12,864,000, are for green components which result in a higher class (cleaner) effluent; also results in an increased volume of reclaimed water produced by the WWTP.

  42. City of Flagstaff –Energy Audit Planning and Design Grant • Grant Amount: $35,000 • match waived (green project) • Project Description: Identify and develop energy efficiencies in drinking water system. Energy costs are about 50% of the water production budget. The drinking water system energy audit provided valuable information to update an antiquated system that has expanded in the past 20 years from serving 40,000 to 65,000 people

  43. Contact Us Water Infrastructure Finance Authority of Arizona Phone: (602) 364-1310 Fax: (602) 364-1327 Toll-Free: (877) 298-0425 www.azwifa.gov

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