water resources development commission recommendation committee water resources development...
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WATER RESOURCES DEVELOPMENT COMMISSION
RECOMMENDATION COMMITTEEWATER RESOURCES
DEVELOPMENT REVOLVING FUND
CONCEPTUAL REVENUE SOURCESMay 16, 2011
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
HB 2692 Passed in 2007
Authorized the establishment of water resource development revolving fund to be administered by the Water Infrastructure Finance Authority (WIFA)
Authorized the formation of Water Resource Development Fund Committee within WIFA
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
RULES ADOPTED BY WIFA October 2010
Article 4 Water Supply Development Fund (R18-15-401 through R18-15-408) and
Article 5 Technical Assistance, R18-15-505
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Committee Consists 13 Members
1. Director of ADWR Chairs Committee2. Director of ADEQ Vice Chair of Committee3. Chairman of ACC4. State Treasurer 9 MEMBERS APPOINTED BY GOVERNOR1. 1 member representing municipalities with population ≥ 50,000, and <100,000.2. 1 member representing municipalities with a population <50,000 from a county with a population
<500,000.3. 1 member representing counties with populations <200,000.4. 1 member representing counties with populations ≥200,000, and <1,000,000.5. 1 member representing counties with populations ≥ 1,000,000.6. 1 member representing cities with populations of > 100,000 from counties with populations
>1,000,000.7. 1 member from a public service corporation that serves 1,850 people or more.8. 1 member from a public water system that serves < 1,850 people.9. 1 member representing Indian Tribes.
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Water Development Fund Financial Provisions Bonds Appropriations Federal Government Loan Payments, Interest and Penalties Investment Income Gifts, Grants and Donations
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Who is Eligible to Apply? A.R.S. § 49-1273 C, Monies in the water supply
development revolving fund CANNOT be used to provide financial assistance to a water provider, other than an Indian tribe, unless :
The water provider is located inside an AMA, OR The water provider is located in a City or County
outside of an AMA that has adopted the mandatory adequate water supply requirement for new subdivisions
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
MONIES IN THE WATER SUPPLY DEVELOPMENT REVOLVING FUND MAY ONLY BE USED FOR:
Making loans to water providers for water supply development purposes.
Making grants or loans up to $100K to water providers for the planning or design of water supply development projects.
Purchasing or refinancing debt obligations of water providers if the debt obligation was issued for a water supply development purpose.
Providing financial assistance to water providers with bonding authority to purchase insurance for local bond obligations incurred by them for water supply development purposes.
Providing linked deposit guarantees through third party lenders by depositing monies with the lender.
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Length of Term for Loans?
30 Years
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Problem Statement/Questions How Can the Water Resources Development
Fund be Funded? Bonds, Appropriations, Federal Grants, Gifts Other?
How Much Money is Necessary for an Adequate Revolving Loan Fund? Will Statutory Provisions Be Enough?
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Considerations The Sources of Revenue must be:
Matched to the Size of the Fund Matched to the Timing of Loans
If a large number of projects are expected over a long period, the revenue should be permanent, dependable and sufficient for a long period.
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Conceptual Principles For Revenue Sources
Dependability and Predictability
Adequate Funding
Mix of Sources
Beneficiaries Need to Contribute
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Potential Alternative Revenue Sources Ad Valorem Taxes Water Withdrawal Fees Transaction Privilege Tax Bottle Water Tax Impact Fees
Building Permits Well Permits
General Fund Appropriations Other?
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Conceptual Funding Sources Transaction Privilege Tax
5 to 10 Cents per Thousand Gallons (Estimate: $24 to $48 million per year)
Impact Fees $250 to $500 per new Building Permit (Estimate:
$1.5 to $3 million per year) Well Impact Fees: $50 for New Wells $10 Annual
Fee for Existing (New Wells $150K & Existing Wells $1.5M)
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Conceptual Funding Sources General Fund Appropriation
$100,000,000 AWBA Interstate Fund (Estimate: $10 million per year originally planned for between 2009 and 2018 currently on hold)
Bottle Water Tax 2¢ and 5¢ per bottle (Estimate: $15.2 Million to
$38 Million annually)
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Revenue Assuming 3% ReturnLow Projections
Revenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
*Well Impact Fee $ 19 M $ 62 M $ 192 M $ 1.0 B
Transaction Privilege Tax
(5¢ per 1kgal)$ 285 M $ 907 M $ 2.8 B $ 15 B
Impact Fee($250 per lot & 6K lots)
$18 M $ 56 M $ 174 M $ 938 M
Bottle Water Tax 2¢ per bottle
$188 M $ 599 M $ 1.9 B $ 10 B
*$50 per new well & $10 per well annually
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Revenue Assuming 3% ReturnLow Projections
Revenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
General Fund $ 118 M $ 376 M $ 1.2 B $ 6.3 B
Total $ 628 M $ 2.0 B $ 6.2 B $ 33.3 B
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Revenue Assuming 3% ReturnHigh Projections
Revenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
Well Impact Fee $ 39 M $ 124 M $ 383 M $ 2.1 B
Transaction Privilege Tax
(10¢ per 1kgal)$ 570 M $ 1.8 B $ 5.6 B $ 30.2 B
Impact Fee($500 per lot & 6K lots)
$35 M $ 113 M $ 349 M $ 1.9 B
Bottle Water Tax
(5¢ per bottle)
$449 M $ 1.4 B $ 4.4 B $ 23.8 B
*$100 per new well & $20 per well annually
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Revenue Assuming 3% ReturnHigh Projections
Revenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
General Fund $ 118 M $ 375.5 M $ 1.2 B $ 6.3 B
Total $1.2 B $ 3.9 B $ 11.9 B $ 64.3 B
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Impact to Individual/Family Low Projections
Revenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
Well Impact Fee($10 annually)
$100 $250 $500 $1000
Transaction* Privilege Tax
(5¢ per 1kgal)$60 $150 $300 $600
Impact Fee($250 per lot & 6K lots)
$250 $250 $250 $250
**Bottle Water Tax (2¢ per bottle)
$23/$92 $58/$230 $115/$460 $230/$920
*10,000 gallons per month per family of 4
**115 bottles per person annually per family of 4
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Impact to Family of 4 Low Projections
Revenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
General Fund $ 0 $0 $0 $0
Total $502 $ 880 $ 1,510 $ 2,770
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Impact to Individual/Family High Projections
Revenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
Well Impact Fee($20 annually)
$200 $500 $1000 $2000
Transaction* Privilege Tax(10¢ per 1kgal)
$120 $300 $600 $1,200
Impact Fee($500 per lot & 6K lots)
$500 $500 $500 $500
**Bottle Water Tax (5¢ per bottle)
$58/$230 $144/$576 $288/$1,152 $576/$2,304
*10,000 gallons per month per family of 4
**115 bottles per person annually per family of 4
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSION
FINANCE WORK GROUP Projected Impact to Family of 4
Low ProjectionsRevenue Source
10 years
(2021)
25 years
(2036)
50 years
(2061)
100 years
(2111)
General Fund $ 0 $0 $0 $0
Total $1,050 $1,876 $3,252 $ 6,004
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May 16, 2011
WATER RESOURCES DEVELOPMENT COMMISSIONFINANCE WORK GROUP
Projected Percentage Mix of Projected Total Revenue Generation
Low Projections High Projections
Well Impact Fee 3% 3%
Transaction Privilege Tax 45% 47%
Impact Fee 3% 3%
Bottle Water Tax 30% 37%
General Fund 19% 10%
Total 100% 100%