Federal Funding for Municipal Capacity Building USDA RD Overview & Community Programs

Central Massachusetts Regional Planning Commission

Regional Economic Development Series

December 7, 2016

Scott J. SoaresState Director, MA, CT & RI

USDA Rural Development

One of 17 Agencies and 18 Offices in USDA

“Committed to the future of rural communities”

What is USDA Rural Development?

USDA Rural Development (RD) operates over fifty financial assistance programs for a variety of rural applications.

2016 Investment in Mass.

RD ‘Southern New England’ Nation’s only three state jurisdiction comprised of Connecticut, Massachusetts and Rhode Island

Jurisdiction wide direct loans, guaranteed loans and grants totaled more than $461 Million in FY16

USDA Rural Development investments in rural Massachusetts totaled over $219 Million in FY16.

The Central State office is located in Amherst, MA and Massachusetts Area Offices are located in Hadley, Holden and West Wareham, MA.

TOTAL: $199,315,452

$155,771,962

$8,114,617

$21,125,889

$11,250,000

$500,000$2,552,985

2016 USDA Rural Development Loans

SINGLE FAMILY HOUSING GUARANTEED

SINGLE FAMILY HOUSING DIRECT

COMMUNITY FACILITY

WATER &ENVIRONMENTAL PROGRAMS

BUSINESS PROGRAMS

MULTI FAMILY HOUSING DIRECT

$129,754.48 $777,529.00

$3,187,000.00

$1,657,312.00

$13,956,923

2016 USDA Rural Development Grants

SINGLE FAMILY HOUSINGDIRECT

COMMUNITY FACILITY

WATER &ENVIRONMENTALPROGRAMS

BUSINESS PROGRAMS

RENTAL ASSISTANCE

TOTAL: $19,708,518

Strategic Economic and Community Development (SECD)

• FY 2016 Farm Bill set aside $417 million of appropriated funds

• Will Prioritize projects that support multi-jurisdictional plans

• Encourage community to think holistically and encourages outcomes based on a region

• Take Home: programs, eligibility and/or emphasis may change from year to year

Section 6025

WEP Guaranteed Loan

WEP Direct Loan

WEP Grant Business &Industry Guaranteed Loan

Community Facilities Guaranteed Loan

Community Facilities Direct Loan

CommunityFacilities Grant

Rural Business DevelopmentGrant

$5 million $120 million $16.4 million $46 million $7.3 million $110 million $1.2 million $975 thousand

Projects serving a ‘critical community need’

• Community Facilities (CF) - Direct Loan- Guaranteed Loan- Grant

• Water and Waste (WEP)- Direct Loan- Guaranteed Loan- Grant

Community Programs

FY 2016 $ amount % of total funding (MA)

Community Facility Loan $21,125,889 9.6%

Community Facility Grant $777,529 0.4%

Water & Environmental Loan $11,250,000 5.1%

Water & Environmental Grant $3,187,000 1.5%

Total $36,340,418 16.6%

Community Facilities Programs(CF)

An overview of USDA Rural Development’s Loan and Grant Programs which benefit rural communities

www.rd.usda.gov/files/RDCFIToolkit_Jan2016.pdf

Community Facilities Programs(CF) – eligibility

Eligibility Drivers

• Population• Median Household Income• Need

eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Community Facilities Programs(CF) – eligibility

eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Community Facilities Direct Loans & Grants

Eligible Entities: ○ Public bodies, tribal entities, and non-profit organizationsIncluding towns & special purpose municipal districts

○ Applicant must be unable to obtain commercial or guaranteed credit at rates & terms sufficient to finance the project successfully

Eligible Rural Areas: ○ Project must serve a town or village with a population of less than 20,000 (as determined by the 2010 census)

Community Facilities Direct Loans & Grants

Financial Assistance: ○ Grants are available for up to 75%, 60%, 55%, 35%, 15% or 0%, depending upon the MHI of the servicing area and location of the facility as compared with the SNMHIGrant funding is subject to available appropriated funds

○ Loans are available with interest rates determined according to service area MHI for terms of up to 40 years, depending upon the useful life of the securityBased upon repayment ability & outstanding indebtedness

Current Market Rate ( through 12/31/16) - 2.375%

Community Facilities Loan Guarantees

Eligible Entities: ○ Public bodies, tribal entities, and non-profit organizationsIncluding towns & special purpose municipal districts

○ Applicant must be unable to obtain commercial credit at rates & terms sufficient to finance the project successfully without a guarantee

Eligible Rural Areas: ○ Project must serve a town or village with a population of less than 20,000 (as determined by the 2010 census)

Community Facilities Loan Guarantees

Financial Assistance: ○ Guarantee of up to 90% of the loan made by a qualifying lender

○ Qualifying lenders include any bank, thrift or credit union chartered by a state or federal agency as well as “non-traditional” lenders with sufficient experience to make and service the proposed loan

○ One-time, 1% Guarantee fee at closing

○ Rate may be fixed, variable or mixed

○ Term may be as long as 40 years, or the useful life of the financed security

Community Facilities

Eligible Projects and Expenditures:

○ Health Care: hospitals,clinics, etc.

○ Public Safety: police/fire stations, vehicles,communications, etc.

○ Education: schools, charter schools, etc.

○ Public Services ○ Transportation○ Energy Improvements:

solar, wind, efficiency improvements

○ Construction○ Expansion○ Rehabilitation○ Land acquisition○ Legal fees○ Engineering/Architectural fees○ Capitalized interest (NP Only)○ Equipment○ Initial operation○ Maintenance costs○ Project contingencies○ Equipment leases or rentals○ Refinance existing debt (Guar)

Community Facilities Direct Loan Projects

Town of Whately, MA

$810,000 Community Facility loan Existing building to be used for town offices. 40 year term loan $5,000 town contribution to project cost. Town now has a fully accessible facility in which

to conduct business.

Food Bank of Western MA

$46,000 Community Facility grant Equipment to store and process food related to

their local food distribution program

Community Facilities Direct Loan and Grant Projects

Franklin County Agricultural SocietyGreenfield, MA

$57,250 Community Facility grant Building Restoration Historic roundhouse building at the Franklin

County Fairgrounds, which is used as an exhibit hall.

Note: Partnerships!The project also partners with a lender, the state of Massachusetts and a contribution from the grantee.

Community Facilities Direct Loan and Grant Projects

Tully Fire Station, Orange, MA

$1,335,000 Community Facility loan $100,000 Community Facility grant Construct a new fire station in the northern section

of town.

Town of Wendell, MA

$1,242,474 Community Facility loan Construct a new 4,800 square foot town office

building and rehabilitation of existing town building for a new library.

State funds and the town also contributed to the project cost.

Community Facilities Guaranteed Loan Projects

Community Health of Franklin County $250,000 Community Facility Guaranteed loan

Through Greenfield Cooperative Bank.

Guarantee is for 90% of the loan amount

Used for leasehold improvements at 489 Bernardston Road, Greenfield, MA.

Rehabilitation included interior upgrades as the health organization moved to this new location due to the demand of services in Greenfield, MA.

Greenfield Center School $700,000 Community Facility Guaranteed loan

Through Greenfield Savings Bank.

Guarantee is for 90% of the loan amount

Used to purchase and rehabilitate the building the school was leasing at 71 Montague Road, Greenfield, MA .

Rehabilitation included upgrades to the HVAC system and the addition of new partitions to increase classroom space.

Eligible Entities: Public bodies, tribal entities, and non-profit organizations, Including towns & special purpose municipal districts. Projects must pertain to a public, regulated system.

Eligible Rural Areas:Project must serve a town or village with a population of less than 10,000 (as determined by the 2010 census)

Water & Waste Loans & Grants

Financial Assistance: Grants up to 75% if MHI is 80% or less of SNMHI AND the proposed project is intended to alleviate health/sanitary problem, 45% if community between 80% and 100% SNMHI

Grant funding is subject to available appropriated fundsGrants are meant to subsidize the users’ monthly expenses

Loans: available with interest rates determined according to MHI for up to 40 years, depending upon the useful life of the security. (currently 1.275%, 1.875% and 2.375%)Based upon repayment ability, outstanding indebtedness & the cost of similar systems

Water & Waste Loans & Grants

Water SystemsSewer Systems Solid Waste Disposal Storm Drainage

Water & Waste Loans & Grants

ConstructionExpansionRehabilitationLand acquisitionLegal feesEngineering feesEquipmentInitial operationMaintenance costsProject contingenciesUtility hook-up fees

Eligible Projects and Expenditures:

Pre Development Planning Grant (PPG):Max Assistance $25,000 or75% of project cost,whichever is less• Public Body/Non-Profit• MHI of Below $65,702• Financial Need limited to

projects agency will fund

Water & Waste Loans & Grant

Preliminary Eng. Report

Environmental Report

Special Evaluation Assistance For Rural Communities and Households (SEARCH):Max Assistance $30,000 or100% of project cost,whichever is less, • Public Body/Non-Profit• MHI of Below $65,702• Financial Need • Populations of 2,500 or less

Water & Waste Loans & Grant

Feasibility Study

Design & Technical Assistance

Town of Monroe, MA Provided Water & Waste Loan and Grant $1,070,000 loan assistance $2,385,400 grant assistance sewer upgrades per a MADEP consent order. Includes PPG assistance.

Water & Waste Loans & Grant Projects

Town of Montague, MA Provided Water & Waste Loan and Grant two phases Phase I was for combined sewer overflow reduction Phase II was for upgrades to the water pollution control facility $1,982,000 loan assistance $864,064 in Grant assistance. and. required to be corrected per a MADEP consent order. State Revolving loan funds were also used in partnership. Included PPG

assistance.

Town of Gill, MA $25,350 SEARCH Grant Engineering report to study the school district’s water system.

Water & Waste Loans & Grant Projects

Brookside Mobile Home Park Tenant’s Association, Orange, MA $22,800 PPG Preliminary engineering & environmental reports Evaluation of the water supply infrastructure at the mobile home

park. Applicant contributed $7,500 to the total project cost. It is anticipated that a USDA application will be submitted to move

forward with the project.

Wagon Wheel Mobile Home Park- Brookfield, MA $1,060,000 Direct Loan- 2.125% for 40 years $3,179,000 Grant Residents waste disposal system failed and residents were

due to lose their homes without this intervention

Water & Waste Loans & Grant Projects

Pascoag Utility District- Pascoag, RI $480,000 Grant $1,920,000 Direct Loan- 2.125% for 40 years First full application conducted through RD Apply Supports Affordable Housing developments in Pascoag, RI

What:

RD Apply is an application intake system that allows you to apply for loans and grants for Rural Utility Services (RUS) Programs. Instead of asking you to mail in a paper application, a process that can be slow and unwieldly, you can now log online and create applications in just a few minutes.

Why:

Convenience - 24 hours a day and 7 days a week access.

Identity Security - Unique User ID/password and only authorized USDA employees can access the information.

Reduced Paper Consumption - Over time, RD Apply will save paper, which benefits the environment.

RD Apply – Electronic Application Process

www.rd.usda.gov/programs-services/rd-apply

Lyndon S. NicholsRural Development

Area DirectorLyndon.nichols@ma.usda.govOffice: 413.585.1000 ext. 125

508.829.4477 ext. 7031

Leonard ShuzdakRural Development

Program DirectorLen.shuzdak@ma.usda.gov

Office: 413.253.4318

Joanne DemarsRural Development

Community Economic DevelopmentJoanne.Demars@ri.usda.gov

Office: 413.585.1000 ext. 124

USDA is an equal opportunity lender, provider and employer.

Scott J. SoaresRural Development

State DirectorScott.Soares@ma.usda.gov

Office: 413.253.4301