elected.org webinar: finding funding for infrastructure 3.22.16

8/19/2019 Elected.org Webinar: Finding Funding for Infrastructure 3.22.16

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Finding Funding for Infrastructure

March 22, 2016


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Overview

• Fund procurement is mostly about heightening the probabilsecuring funds and minimizing the possibilities

• Discussion will focus on public infrastructure:• Transportation

• Water/Wastewater

• Stormwater Management• Public-Private Partnerships (3-P)

• Federal, state, local, and private sources• Opportunities and limitations


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Conventional vs. Innovative

Conventionally funded projects

• Limit the community’s ability to address abroader spectrum of community needs

• Potential to defer maintenance orreplacement costs to future dates andincreased costs

• Limited by GO Bond caps and/orcomparatively high interest expense costsassociated with Revenue Bonds

Innovative approaches

• Diversify funding options

• Enables communities to do mshorter period of time

• Attracts external resources threlationships

• Creates opportunities to levesupport


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Leveraging external resources can help but…• Recognize there are strings attached

• Decision making authority is relegated to a third-party• Timing can be an issue

• Grant preparation – grant review – decision – grant agreement – funds to use

• Be aware that grants are often associated with a social and/or physica(e.g., job creation, benefiting low-to-moderate income individuals, greinfrastructure, etc.)

• Gain some perspective about the funding history of a program• Types of projects receiving funds• Total grant award (range) and compare to required funding match

• Know the competitiveness of programs and factors that strengthen yocommunity’s position

• Complete design, secure permits, acquire right-of-way, etc.


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Federal, State, Local, Foundations

Factor/SourceFederal Funds

(Entitlement)

Federal Funds

(Competitive)State Funds Local Funds

Application Varies

Serve a special population

Reporting requirements Varies Varies

Prevailing wage rates

Environmental clearance(s) Varies

Funding match Varies

Grant oversight

Spending period limits


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Funding common to Transportation• Federal DOT

• FHWA: TIGER, FASTLANE

• State DOT funding

• Federal funds that are programmed – Congestion Mitigation and Air Qua

• Road use tax funds

• Toll Road Systems

• Regional Planning Agencies (MPOs, RPCs, and COGs)

• Surface Transportation Program (STP)

• Transportation Alternatives Program (TAP) – formerly known as “Enhancfunding


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Funding common to Water and Wastewater

•The common perception is that water and wastewater systems run on“enterprise” model

• Often this precludes access to “grants.”

• Most common funding options:

• Community Development Block Grants (for entitlement and non-entitlecommunities) – funds must benefit low-to-moderate income (LMI) popu

• State Revolving Fund – long-term loans extended to cities/utilities to connecessary improvements.


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Funding common to Stormwater Managem• Traditional funding sources have been stormwater utilities

• Flat rate approaches

• Performance based approaches that associate rates with land area and permeabilit

soil/infrastructure

• Section 319• Federally funded since 1994

• Targets funds for watershed projects – particularly impaired waters

• Water Resources Restoration Sponsored Projects• Funds Non-Point Source, Best Management Practice projects within common water

conjunction with wastewater facility loans (SRF)

• Allows 10% of loan to be redirected to eligible projects

• Regional Conservation Partnership Program• Authorized under the 2014 Farm Bill

• Provides $100 million per year (2014 – 2018)

• Increases the restoration and sustainable use of soil, water, wildlife, and related natresources

• 1:1 funding match


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Local Funds

• Several options; however, some pose political challenges

• Common sources:• Debt: general obligation debt and revenue bonds• Tax Increment Financing (TIF)• Business Improvement Districts/Self Supported Municipal Improve

Districts

• Local Option Sales Tax• Special Assessments

• Regional Planning Agencies (RPAs)• Transportation

• Transit


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Business Improvement District/Self-Supported Municipal Improvement Districts

• These districts are established as special taxing districts designed to construction of improvements the affect property in the district or are owners of property in the district.

• State code generally specifies the percentage of property owners thanecessary to establish the district. In general, this also includes a thrrepresentation based on assessed value within the district.

• State law may preclude the inclusion of certain types of land uses (e.residential)

• Districts are often associated with central business districts or comme


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Local Option Sales Tax (LOST)

• Over time State legislatures have adopted enabling acts that create opp

cities, counties, school districts, and special taxing districts to impose losales taxes

• Rates may vary between a fraction of a penny on up.

• Imposing LOST requires a referendum – sometimes requiring a super maffirmative vote (60% or more)

• Referenda includes specific provisions:

• Purpose• How funds will be used

• Duration – when the tax will sunset

• Has been used to fund property tax relief, school expansions, aquatic clibraries, economic development, etc.


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Special Assessment

• Probably one of the least popular funding options because it imposes the property owner based on a unit cost

• There are generally caps on the amount of taxable property subject toassessment – i.e., 25% of the gross value of the property

• The process is very regimented and strict

• Commonly used for street, sidewalk, stormwater, and related r-o-w pr


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Regional Resources – Transportation Improvement Plan

• A committee, such as the Transportation Technical Committee reviewsformulates recommendations on proposals submitted

• TTC’s are generally comprised of technical staff

• These recommendations are voted on by the Commission; however, sbylaws allow Executive Committees to approve, disapprove, and ame

• Commissioners are generally comprised of both elected and appointed

• Voting and appointments are usually based on population – most popula

have the largest number of representatives or voting authority


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Foundations

• National and Community-based

• Can provide capital for select infrastructure projects – facilities such alibraries, parks, trails, etc.

• Funding is not generally available for roads or utility improvements

• Research foundations – particularly those in your community or servelarger region

• Types of projects receiving funding

• Amounts of awards• Funding cycles

• Funding match requirements

• Foundations that participate in capital projects can be an initial large and attract others


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Developing a Funding Strategy


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Things to Consider

• Conceptual design should be completed and include an Opinion of Probable

• Final design is more important for programs that emphasize shovel-ready projects

• Associate capital needs with prospective sources

• Sources and Uses of Funds Matrices are very helpful in the development of a fundin

• Identify and vet sources (local match requirements, funding history, funding cycles,

• Be creative – a sidewalk project may also be a main point of access to a school or pasystem; including public art could leverage transportation funding for aesthetic trea

• Develop an implementation schedule – funding does not appear when the a

is submitted• Application deadline

• Review

• Notice of award

• Grant agreement

• Funding is available (determine if the program(s) operate on a reimbursement basis


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Sources and Uses of Funds

Project Task Task Budget

Sources Local Match Options

RISE Local Match TIF Stormwater Utility

Earthwork $66,860 $33,430 $33,430 $16,715

Storm Sewer $207,000 $103,500 $103,500 $51,750 $51,750.0

Inlets $120,000 $60,000 $60,000 $30,000 $30,000.0

Pavement $333,300 $166,650 $166,650 $83,325

Sidewalk $111,111 $55,556 $55,556 $27,778

Pavement Markings $5,000 $2,500 $2,500 $1,250

Sub-Total Constriction Costs $843,271 $421,636 $421,636 $210,818 $81,750

Mobilization (5%) $42,164 $21,082 $21,082 $10,541 $4,088

Contingency (50%) $421,636 $210,818 $210,818 $105,409 $40,875

Engineering (15%) $196,061 $98,030 $98,030 $49,015 $19,007

Total Project Cost $1,503,131 $751,565 $751,565 $375,783 $145,719


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Start Complete Project Estimated Cost Hoven/FHWA MPO

Teton

TIF RISE ICAA

FY 2002 FY 2003 Soil Cost and City Staff Time $ 771,000 $ 771,000

FY 2003 FY 2004 Softball Fields $ 2,600,000 $ 2,600,000

FY 2004 FY 2005 BNSF Bridge and Shoofly $ 4,000,000 $ 3,500,000

FY 2004 FY 2004 Outer Drive East $ 3,000,000 $ 1,500,000 $1,500,0

FY 2004 FY 2005 US 75 Reconstruction $ 3,100,000 $ 1,400,000 $ 620,000

FY 2004 FY 2005 CN/IC Relocation $ 4,300,000 $ 860,000

FY 2004 FY 2005 Terminal Drive $ 1,400,000 $ 700,000 $ 700,000

FY 2005 FY 2006 Outer Drive West $ 2,255,000 $ 275,000

FY 2005 FY 2006

Floyd/Outer Drive

Intersection $ 1,400,000 $ 280,000

FY 2007 FY 2008 Floyd River Bridge $ 6,600,000 $ 1,320,000

Total Source $29,426,000 $ 6,400,000 $ - $ 7,426,000 $ 700,000 $1,500,0


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Case Studies


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Transportation – local road

• Project involved design and

replacement of roads, utilities,streetscape, and sidewalk

• Purpose: Replace failinginfrastructure, improve retail/servicemix, and enhance community pride

• Overall project cost: $4.5 million

• GO Bond – 31%• TIF - 31%

• SRF/Utility rate increase – 17%

• Special Assessment – 20%

• State Grant – 22%


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Transportation – regional improvement

• Reconstruct two US Highways,

realign two major railroadalignments, construct a bridge, andnew road to serve an industrial area

• Purpose: improve roadway safety,encourage new investment and

jobs, create intermodalconnections, and improve trafficcirculation

• Total Project Cost: $35 million• TIF: 19%

• State DOT: 6%

• STP (RPA): 25%

• Federal Funding: 50%


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Water Treatment

• Design and construct a new 5

MGD (expandable to 8 MGD)Water Treatment Plant

• Original facility wasconstructed in 1916 and wascited for various treatmentviolations

• Total Project Cost: $14 million• CDBG – ARRA: 7%• Federal Appropriation: 3%

• SRF Forgivable Loan: 14%

• State IJOBS: 18%

• Rate Payers: 58%


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Stormwater Project

• Project was prompted because of a failureof previous efforts to stabilize bank andevidence of bank erosion throughresidential area

• Funded by Water Resource RestorationSponsored Projects

• Wastewater Project: Gravity sewers,submersible pump station and force main;SRF loan request $3,865,422

• Translated into $387,000 for stormwaterimprovements


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3P (Public-Private-Partnership) Project• WWTP Alternative Wind Energy

• 50kW + 5 kW = 55kW Capacity

• Estimated 150,000 kWh Power Per Year Generated

• Realizing up to 50% savings in monthly utility costs• Participant Roles:• City: Lease land; enter into a power purchasing agreement with

the utility; & lease wind turbine with goal of purchasing

• HR Green: secure financing, purchase wind turbine, constructand maintain the facility over the lease term

• Energy Company: provide long-term interconnection/powerpurchase agreement with the City

• Financing:• Private lender: $274,000• Alternative Energy RLF: $137,000

• US Treasury Reimbursement (1603 Grant): $82,200

• Property tax exemption: 100% for first five years

• Accelerated depreciation of facility

• Federal & State Tax Credits: 3.7 cents per kWh credited toCorporate Income tax for first 10 years


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Successful 3-P Projects

• Prompted by two main realities:• Underinvestment in the maintenance of infrastructure

• Less grants available• Tightening budgets

• Design-Build is the first step of a public-private partnership• DB transfers greater risk to the private sector, which can create long-term efficie

innovative approaches, and improved performance

• Other contributing factors:• Project is critically needed or part of a capital plan

• Project has a financing shortfall• Project goals included accelerated delivery, reduced costs, and increased perfor• The project is complex and entails risk• PPP legislation has been enacted• A dedicated revenue stream exists to finance the project• Project has political support

Source: AECOM, U.S. Infrastructure: Ignore the Need or Retake the Lead?, ACEC Annual Convention and

Legislative Summit, March 30 – April 2, 2011


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Final Thoughts• Leveraging public funds general requires that a disadvantaged group b

or the project appeals to a policy goal (green infrastructure)

• Anyone can write a grant but the goal is to secure funds• Local funding match is a necessity

• Build relationships with leveraging partners

• Look beyond the scope of the project – are there ancillary factors thainfluence an outcome and/or identify alternative sources

• Natural disasters

• Environmental concerns/blighting conditions• Safer pedestrian routes for children to school

• Be mindful of funding situations that are not necessarily programmed• Federal Highway Administration issued a Guidance Memorandum concerning R

Earmarks FY 2016


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Thank you/Q & A

Jim Halverson

Principal & Vice President

HR Green, Inc.

(319) 841-4382 (direct)

(319) 573-9937 (mobile)

[email protected]

elected.org webinar: finding funding for infrastructure 3.22.16

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