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TRANSCRIPT
What’s New
with the SRF?
Lori Beary, Iowa Finance Authority
Patti Cale-Finnegan, Iowa Department of Natural Resources
Iowa League of Cities 2012 Annual Conference & Exhibit
Handouts and presentations are available online at www.iowaleague.org
What’s New with the
STATE
REVOLVING
FUND?
Patti Cale-Finnegan
Department of Natural Resources
Lori Beary
Iowa Finance Authority
1. What’s New
2. What’s Not Really New
But That You Might Be
Interested In
Today’s Topics
What’s New: Interest Rates
•Current interest rate
is 3%.
•Interest rate for 20
year loans will be
reduced to 1.75% on
September 28, 2012.
What’s New: Fees •Origination fee
recently reduced from
1% to 0.5%
•Servicing fee 0.25%
Only charged on
outstanding balance.
Billed twice/year with
interest
What’s New: Savings $1,000,000 20 year SRF loan
OLD COSTS NEW COSTS SAVINGS
1% origination fee $10,000 .5% origination fee $5,000 $5,000
3% interest $344,462 1.75% interest $193,782 $150,680
servicing fee $31,405 servicing fee $27,683 $3,722
$385,867 $226,465 $159,402
What’s New: Savings $5,000,000 20 year SRF loan
OLD COSTS NEW COSTS SAVINGS
1% origination fee $50,000 .5% origination fee $25,000 $25,000
3% interest $1,721,964 1.75% interest $969,213 $752,751
servicing fee $156,975 servicing fee $138,459 $18,516
$1,928,939 $1,132,672 $796,267
What’s New: Savings $10,000,000 20 year SRF loan
OLD COSTS NEW COSTS SAVINGS
1% origination fee $100,000 .5% origination fee $50,000 $50,000
3% interest $3,604992 1.75% interest $2,032399 $1,572,593
servicing fee $338,888 servicing fee $290,343 $48,545
$4,043,880 $2,372,742 $1,671,138
What’s New: Extended Financing
“As an alternative to the traditional
30-year mortgage, we also offer an
interest-only mortgage, balloon
mortgage, reverse mortgage, upside
down mortgage, inside out
mortgage, loop-de-loop mortgage,
and the spinning double axel
mortgage with a triple lutz.”
What’s New: Extended Financing
• Up to 30 years based on useful life.
•DWSRF – must be disadvantaged based on CDBG
criteria.
•CWSRF – available to all projects. Non-
disadvantaged community interest rate is 2.75%.
•DWSRF and CWSRF – disadvantaged rate is 1.75%.
What’s New: CWSRF
Disadvantaged Status
•Communities must be determined to be disadvantaged based on
criteria in Iowa Code section 455B.199B, Disadvantaged
Communities Variance, as amended by Senate File 407 on April
28, 2011.
•DNR currently working on rules to implement the statute.
•SRF will use draft forms to establish disadvantaged status for
purposes of allowing reduced interest rate.
What’s New: “WRR” Projects
•Water Resource Restoration “sponsored
projects”
•Nonpoint source project (e.g. green
infrastructure, watershed protection)
paired with wastewater loan
•City borrows more, repays same amount,
gets two projects for the cost of one
•Currently doing pilot project, working on
application process
CurrentCWSRF Loan
CWSRF Loanwith WRR
Project
ServicingFees
Interest
Principal
What’s New: SRF Has Loaned $2
Billion to Iowa Communities
$-
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
Drinking water
Nonpoint
Wastewater
What’s Not Really New
SRF Background
The SRF is one of Iowa’s primary sources of financing for drinking water and wastewater infrastructure, storm water quality, and nonpoint source protection
SRF programs
authorized by Clean Water Act and Safe Drinking Water Act and administered by U.S. Environmental Protection Agency
What’s Not Really New
SRF Background
What’s Not Really New
SRF Background
• Iowa Department of Natural Resources – Program planning and prioritization
– Project planning and permitting
– Environmental review
– Federal compliance
• Iowa Finance Authority – Financial management
– Bond issues
– Loan processing
– Loan disbursements
What’s Not Really New
SRF Background
Terry Branstad,
Iowa Governor
Chuck Gipp, Department of Natural
Resources Director
Environmental
Services
Administrative
Services
David Jamison,
Iowa Finance
Authority Director
Bill Northey, Iowa
Secretary
of Agriculture
Department of
Agriculture and
Land Stewardship
Water Supply
Engineering
DNR SRF Coordinator and
Team Leader
NPDES
Permitting
Local Water
Protection, Livestock
Water Quality Facilities,
Storm Water Quality
CWSRF Project
Managers
DWSRF Project
Managers
State Revolving Fund Organizational Structure -- Iowa
Admin.
Assistant
Program
Specialists
Water Quality
Bureau
Water Supply
Operations
Wastewater
Engineering
Environmental
Review
IFA SRF Coordinator
SRF Finance
Officer
On-Site
Wastewater
DNR Grants
Manager
LOW-INTEREST LOANS
FOR
Water and wastewater
infrastructure only
1989 - 2002
2003 - Present
Water and
Wastewater Planning and Design
Urban Stormwater
Soil, Sediment, and Nutrient
Management
Onsite
Septic
Systems
Source
Water
Protection
Brownfield Cleanup
Landfill Closure
Lake and Wetland Restoration
Energy and Water Efficiency
Loan
Forgiveness
Drinking Water SRF • Loans for:
– Improvements to public water supply systems
– Consolidations and connections
– Source water protection
• DWSRF set-asides fund technical assistance, capacity development, state drinking water program, SWP
Clean Water SRF • Loans for:
– Publicly owned wastewater treatment facilities
– Sewer system rehabilitation
– New systems for unsewered communities
– Stormwater management for water quality
– Nonpoint source pollution control
Types of Loans
• Planning & design
• Construction
• Source water
protection
• Stormwater BMPs
• Watershed protection
Planning & Design
• 0% financing for up to 3 years
• Can be rolled into SRF loans or paid off with
other permanent financing
• Get projects ready for applications to CDBG,
Rural Development, or other funding
Construction Loans
• Cities and
counties
• Community water
supplies
• No reserve
requirement
Environmental Review
• Environmental
review specialist
assists with ER
process
• SRF pays for
preliminary
archeology
Source Water Protection
• 0% interest rate
• Up to 20 year term
• For purchase of land or easements, or to fund SWP practices
• Based on approved SWP plan
Stormwater BMPs
• For public or private
• Must protect or restore water quality
• Must be for non-permitted practices
• No Davis-Bacon or environmental review required
Other Nonpoint Source
• Brownfield clean-up
• Landfill closure
• Wetland restoration
• Lake restoration
• Other
Agriculture Loans
• Work with local Soil and Water
Conservation Districts and
IDALS
• Financing through participating
lenders
• Soil and sediment control,
manure management
• Can be used with cost-share,
EQIP, other grants
On-Site Wastewater Loans
•Help rural homeowners
replace inadequate septic
systems
•Projects reviewed by
county sanitarians
•Loans through
participating lenders
Special Requirements • Changes from base SRF
programs started with ARRA in
2009
• Green projects, loan
forgiveness, Davis-Bacon
carried over through FFY 2010 -
FY 2012 appropriations
• Not sure what FY 2013 will allow
Green Projects • Energy efficiency, water
efficiency, green storm water
infrastructure, environmentally
innovative
– Goal is to go above and beyond
traditional or regulated
approaches to gain more
environmental sustainability
• Eligibility determined through
EPA guidance
Green Projects • Equivalent of at least 20% of
capitalization grant amounts
must be used for green
projects
• Offered loan forgiveness to all
green projects
• Can still fund green projects
but may not have loan
forgiveness
Loan Forgiveness • 20% to 30% of federal grant equivalent
• Three categories
– Disadvantaged communities
– Green projects
– Public health (DWSRF)
• Individual communities receiving 20% to
60% of SRF amount as loan forgiveness
How the SRF Helps • “The SRF allowed the City of
Stacyville to make the
necessary improvements to
our infrastructure when it was
needed. ”
Harlan Bisbee
City Clerk, Stacyville
How the SRF Helps
• “The SRF provided the lowest
rates available for the City of
Shenandoah to finance
improvements to the Waste
Water Treatment Facility. ”
Marcia McKay, City
Clerk/Treasurer
Shenandoah
How the SRF Helps • “The City of Ankeny really
appreciated being able to
use SRF funding for our
brownfield cleanup project,
as well as the guidance
provided by the DNR and
IFA staff.”
Jolee Belzung
Director of Municipal Utilities,
Ankeny
How the SRF Helps • “The low-interest loan made
a huge difference in my
livestock water quality
project. The people I worked
with were helpful and the
paperwork was simple. ”
Justin Rozeboom
Sioux County
How the SRF Helps
• “This was our first experience
with the SRF. We appreciated
all the assistance we received
for our many questions!”
Lyon-Sioux Rural Water
For more information
Patti Cale-Finnegan
Iowa Department of Natural Resources
515-725-0498
Lori Beary
Iowa Finance Authority
515-725-4965