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STATE REVOLVING

FUND FY 2014 Intended Use Plans

Patti Cale-Finnegan, Iowa Department of Natural Resources

Background

The SRF is Iowa’s primary source of financing for drinking water and wastewater infrastructure, storm water quality, and nonpoint source protection

Background

SRF programs authorized by Clean Water Act and Safe Drinking Water Act and administered by U.S. Environmental Protection Agency

Background

Background

Program frameworks and eligibility set by federal law, but each state can set its own priorities for use of funds

Background • Iowa Code

– 455B.291-299 (DNR)

– 16.131-133A (IFA)

• Iowa Administrative Code – 567 Chapters 40 and 44 – DWSRF (adopted by EPC)

– 567 Chapters 90-93 – CWSRF (adopted by EPC)

– 265 Chapter 16 – SRF (adopted by Iowa Finance Authority Board)

• “The program shall be a joint and cooperative

undertaking of the department and the

authority.”

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

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

Sponsored

Projects

GOVERNOR

Iowa Department of Natural

Resources Director

Environmental

Services

Division

Administrative

Services

Division

Iowa Finance

Authority Director

SECRETARY OF

AGRICULTURE

Iowa Department of

Agriculture and

Land Stewardship

Water Supply

Engineering

DNR SRF

Coordinator

Wastewater

Permitting

DNR Grant

Manager

Local Water Protection

Livestock Water Quality

Facilities

Storm Water BMP Loans

CWSRF Project

Managers

DWSRF Project

Managers

General Non-Point

Source Program

State Revolving Fund Organizational Structure -- Iowa

Administrative

Assistant

SRF Program

Specialists

Water Quality

Bureau

Water Supply

Operations

Environmental

Review

Specialists

IFA SRF

Coordinator

SRF Finance

Officer

SRF Linked

Deposit

Administrator

On-Site

Wastewater

Program

Wastewater

Engineering

Chief Financial

Officer Comptroller

SRF Accountants

Growth of SRF

$-

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

Drinking water

Nonpoint

Wastewater

Intended Use Plans • EPA requirement

• Outlines funding available and proposed uses

• Sets goals and objectives

• Sets program policies such as interest rates and terms, disadvantaged community criteria

• Public review and comment

• Approval by EPC

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

Drinking Water SRF Applicant Project Request

New Hartford Water meter upgrade $80,000

Libertyville Planning and design loan to investigate solutions

to water main breaks

$95,000

Winneshiek County Install public water supply in Frankville to

replace contaminated private wells

$762,000

Columbus Junction Relocate water treatment plant out of 100-year

flood plain

$1,206,000

Mahaska Rural Water New wells, backup power, water treatment

upgrade, emergency connection

$3,609,000

Ames New LEED-certified water treatment facility $51,000,000

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

Clean Water SRF Applicant Project Request

Oxford Planning and design loan to investigate

inflow/infiltration into sanitary sewers

$67,000

Buffalo Upgrade wastewater disinfection system $360,000

Ottumwa Combined sewer separation $3,636,000

Denver Convert lagoons to mechanical plant, add

disinfection, to meet permit limits

$6,153,000

Dubuque Daylighting of buried storm sewer to improve

water quality and prevent neighborhood flooding

$14,767,000

Sioux City Relocation of sewers due to I-29 expansion $23,000,000

Loan Types

• Planning and design

– 0% financing for up to 3 years

• Water and wastewater construction

– 1.75% interest rate

– Terms up to 30 years for some projects

• Source water protection

– 0% interest for 20 years

Environmental Review

• Environmental review

specialists assist with

ER process

• Brick sewers, historic

water towers, pioneer

cemeteries, Native

American sites, Indiana

bats, Topeka Shiner, flood

plains, wetlands, etc.

Environmental Review

• Master contracts with

archeology and/or

architectural history

firms reduce delays and

problems

• SRF pays for needed

surveys out of fees paid

by applicants

Nonpoint Source Loans

• Low-cost financing for

nonpoint source projects

• Project approval by

environmental agency

• Financing approval by

participating lender

• Interest rate max 3%

• Can be used with cost-share,

EQIP, other grants

• On-Site Wastewater

Systems

– Helps homeowners

replace inadequate

septic systems

– Contact county

sanitarian

– All 99 counties

participate

• Iowa Department of Agriculture and Land

Stewardship agreement

Partnership with IDALS

• Soil and Water

Conservation Districts

• Natural Resources

Conservation Service

• Ag Best Practices – Soil erosion

– Manure management

– Non-CAFO size livestock operations

– IDALS administers through contract with DNR

– Apply through Soil and Water Conservation Districts

– NRCS technical help

• LWPP participants had smaller

operations but invested more in

conservation than farmers that used

cost-share only

• LWQ participants spent an average of

$80,000 or 50% more than livestock

producers that used EQIP only

• “Overall the study results indicate

that the loan programs are leading

to significant benefits for Iowa’s

lands and waters. The loans appear

to be complementing traditional

conservation programs and helping

landowners to get more practices

on the landscape more quickly than

they would have otherwise.”

• Green Infrastructure – Water quality benefit in

lowering volume and treating stormwater

– Use Iowa Stormwater Management Manual standards

– Review by SWCDs and IDALS Urban Conservationists

– Both public and private borrowers

• Land Quality

‒ Brownfield

cleanup

‒ Landfill closure

‒ Apply to DNR

‒ Review by DNR

Contaminated

Sites staff or

Solid Waste

engineers

– INHF gets loan from local

bank which uses SRF

funds

– INHF holds properties for

3-5 years while government

agency assembles funding

– Land turned over to public

ownership

• Land Preservation / Wetland Restoration – Partnerships between Iowa Natural Heritage

Foundation, DNR, County Conservation Boards, etc.

Agricultural BMPs 62%

Onsite Wastewater

9%

Urban BMPs 15%

Land Preservation

14%

Sponsored Projects • Allows wastewater

utilities to address

nonpoint source

problems

• $15 million set-aside

for first year

• Applications due July

19

$-

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

$1,200,000.00

$1 million CWSRF

loan

$1 million loan with

sponsored project

Loan Costs (interest and fees)

Sponsored project principal

Wastewater principal

Loan Forgiveness • Started with federal stimulus

• Attached to annual capitalization grants

• Must provide certain percentage of cap

grant amount as “additional subsidization”

• Have committed loan forgiveness to help

disadvantaged communities, promote

solutions to public health problems, and

incentivize green projects

Program Income Fee Description Uses

Origination fee 0.5% of loan

amount added

to the loan

amount

“Program income” – can only be used to

administer the SRF programs. This

includes water supply and wastewater

engineering section project managers,

environmental review, nonpoint source

program administrators,financial officers,

loan coordinators, program managers, and

financial and legal advisors.

Servicing fee

(first 1-3 years

of loan)

0.25% annual

fee on

outstanding

principal

Non-Program Income Fee Description Uses

Servicing fee

(final 19 – 30

years of loan)

0.25% annual

fee on

outstanding

principal

CWSRF:

• Utility management organization

contracts

• DNR wastewater field staff

• DNR Water Quality Bureau staff

DWSRF:

• State match for Public Water Program

set-aside

Coming up in FY 2014 • Taking applications year-round

• Quarterly updates of the IUPs in September, December, March

• Sponsored project application review and recommendations

• Allocate remainder of loan forgiveness

• Anticipated disbursements: – CWSRF: $282 million

– DWSRF: $150 million

Questions?

Patti Cale-Finnegan

Iowa Department of Natural Resources

515-725-0498

Patti.cale-finnegan@dnr.iowa.gov

Lori Beary

Iowa Finance Authority

515-725-4965

Lori.beary@iowa.gov