alaska clean & drinking water funds financial capacity assessment mike lewis program manager
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Asset Management; Grants and Loans Sustained Compliance for Public Water Systems – Chapter 2 September 29 – 30, 2011 Anchorage, Alaska. Alaska Clean & Drinking Water Funds Financial Capacity Assessment Mike Lewis Program Manager Municipal Grants & Loans - PowerPoint PPT PresentationTRANSCRIPT
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Alaska Clean & Drinking Water Funds Financial Capacity
Assessment
Mike LewisProgram Manager
Municipal Grants & Loans
Alaska Department of Environmental Conservation
Asset Management; Grants and Loans
Sustained Compliance for Public Water Systems – Chapter 2September 29 – 30, 2011
Anchorage, Alaska
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Alaska Clean & Drinking Water Funds Financial Capacity Assessment
Topics of Discussion
• Matching Grants & Loans Services• Alaska Clean Water & Drinking Water Programs• Loan Program Eligible Project Types• Loan Program Funding Timeline Process• Financial Capacity Process – Input & Output• Financial Capacity Analysis Report• Presentation Review
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Municipal Grants & Loans Serves (MG&L)...
• 1st Class• 2nd Class • Home Rule Cities• Organized Boroughs• Eligible Private Utilities
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Potential MG&L Projects
• Drinking Water • Wastewater • Solid Waste• Water Quality Enhancement• Non-Point Source Pollution
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Programs
Municipal Matching Grants
Alaska Clean Water Fund
Alaska Drinking Water Fund
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Loan Programs - Financing
• No Up Front Fees
• Interest Only on Used Funds
• Low-interest• 1.5% for 5 - 20 year term
• 1% for under 5 year term
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Alaska Clean Water Fund Loan Projects
Point Source• wastewater – studies, design, collection,
treatment and discharge
Non-Point Source• solid waste - closures, leachate collection &
treatment• water quality enhancement
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Alaska Drinking Water Fund Loan Projects
• drinking water – studies, design, source, treatment, distribution and storage
• some private water systems are eligible to receive funding. These systems must be economically regulated by the Regulatory Commission of Alaska
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MG&L Loan Timeline
January MG&L mails or begins accepting electronic questionnaires
February questionnaires are due and scored March-April each loan programs’ Intended Use
Plan (IUP) is public noticedMay-June upon completion of the public notice,
each IUP is finalized and priority listed projects are then eligible to receive a loan
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Loan Questionnaire Criteria
• Submit eligible projects, check with MG&L• Fund advance planning / design• ACWF key criteria (PS) – public health, water quality,
local initiative, and funding coordination• ACWF key criteria (NPS) – prevention, restoration,
stewardship, local initiative, NPS strategy • ADWF key criteria – public health, compliance,
affordability, and other considerations
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Financial Assessment Overview• Financial Assessment of a potential borrower begins with a loan
application.• A preliminary assessment by MGL is done to decide if adequate
financial capacity exists or a more thorough evaluation is needed. • MGL will initially look at last financial capacity assessment
completed, ratio’s from past and current financial statements, single audit report for any findings and total debt of the community.
• For a thorough or comprehensive evaluation , MGL has an agreement with the Division of Community & Regional Affairs (DCRA) to do these type of assessments.
• If upon completing an assessment, if DCRA finds questionable items with the borrowers finances that could impact loan repayment, MGL may seek additional advice through contracted financial expert.
• The financial expert is an individual with many years of experience in doing these type of reviews and can offer recommendations for special loan conditions to ensure adequate loan security.
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Comprehensive Financial Assessment - Input
• Upon MGL direction to DCRA to perform a comprehensive assessment, DCRA will contact the borrower and request the following (but not limited to) information:
• Community Information – population, residential customers, medium household income, poverty rate, and unemployment rate.
• Financial Management Information – audited financials statements, annual & capital budgets, capital improvement plan, bond rating, billing cycle, user charges, and rate setting.
• Loan Information – description of project, loan amount, loan term, and interest rate.
• Other Items – current and proposed user rates, user rate ordinance.
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Comprehensive Financial Assessment - Output• Once all data is collected to do the comprehensive assessment, the
data is put in to a computer model titled “State of Alaska Water/Wastewater Revolving Fund Financial Capacity Analysis.” The output of this model is broken down into five main areas:
• Current financial condition and affordability• Financial trends and future affordability• Financial management criteria• Economic factors• Project overview
• From the output of the model, DCRA will put together a draft report to the borrower and MGL for review and comment. Once all comments are collected a final report will be issued.
• Based on findings and recommendations made in the report, MGL will either draft a loan offer agreement or follow up with the financial expert to offer further guidance.
•
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Example Financial Analysis Report
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Example Financial Analysis Report (Cont’d)
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Alaska Clean & Drinking Water Funds Financial Capacity Assessment
Presentation Review:
• MGL provides three funding programs: Municipal Matching Grant, and the Alaska Clean & Drinking Water Fund loan programs.
• MGL loan fund programs provide an inexpensive alternative for project financing.
• Financial capacity assessments are key for consideration of MGL making a loan offer to a potential borrower.
• Financial capacity assessments are also a good tool for a borrower to address weak areas in how it utilizes it’s financial operations.
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CONTACT USMG&L Web Page Links:
Municipal Loan Program:http://www.dec.state.ak.us/water/muniloan/index.htm
Municipal Grants Program:http://www.dec.state.ak.us/water/munigrant/index.htm
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Mike LewisProgram Manager, MGL
Anchorage, Alaska
Frank TothProject Engineer, MGL
Juneau, Alaska
Susan StartProject Engineer, MGL
Anchorage, Alaska
Beth VerrelliProject Engineer, MGL
Anchorage, Alaska