U.S. Department of Agriculture Rural Development MWEA/AWWA Joint Expo Infrastructure Project Financing & Revenue February 8, 2011
Rural Development has two programs for rural communities: Community Facilities (town halls, fire halls, DPW buildings, fire trucks, police cars, libraries, etc.) Water & Waste (water & sewer projects) Website - http://www.rurdev.usda.gov/mi/
In 2010, for all programs, USDA Rural Development invested approximately $1.4 billion in Rural Michigan. Programs include: Water & Waste Community Facilities Loans and Grants Telecommunications, Distance Learning Grants, Broadband SFH Direct & Guaranteed Home Loans Home Repair Grants & Loans MFH Direct & Guaranteed Loans MFH Rental Assistance MFH Housing Preservation Grants Guaranteed Business and Industry Loans Renewable Energy Grants
Community Facilities: eligible entities include: Public bodies, non-profits, & tribes located in communities or a service area less than 20,000 population. Water & Waste: eligible applicants include: Public bodies, tribes, non-profits located in communities or a service area less than 10,000 population.
WEP ARRA $79,131,000 Loan/$20,654,000 Grant WEP Regular $41,975,000 Loan/$13,201,000 Grant WEP 306C (Tribal) $1,453,000 Grant WEP Predevelopment Planning $24,000 Grant WEP Solid Waste Management $87,197 Grant WEP Household Water Well $250,000 Grant
2010 Community Facilities Funding CF ARRA $6,898,000 Loan/ $1,605,000 Grant CF Regular $9,809,000 Loan/ $576,000 Grant CF Guaranteed Loan $2,500,000 CF Know Your Foods $95,000 Grant CF Childcare Initiative $146,000 Grant CF Economic Impact Initiative $389,000 Grant CF Disaster Funding $614,000 Loan/ $191,000 Grant CF Library Initiative $3,200,000 Loan/ $567,000 Grant CF Tribal College Initiative $196,500 Grant
Loan - $144,127,000 Grant - $39,434,697 TOTAL - $183,561,697 Water & Waste approximately 68,382 residents benefitted from 61 projects Community Facilities 97 equipment and/or construction projects in over 80 communities.
Water & Waste 2010 (includes ARRA) Initial Allocation Actual Obligation $50,345,000 $156,775,197 Water & Waste 2009 (includes ARRA) Initial Allocation Actual Obligation $46,366,000 $204,703,000 Water & Waste 2008 (includes Farm Bill) Initial Allocation Actual Obligation $41,259,080 $97,723,245 ($26,766,464 farm bill & $29,552,456 reserve funds) Water & Waste 2007: Initial Allocation Actual Obligation $40,925,000 $51,980,000
Community Facilities 2010 (includes ARRA) Initial Allocation Actual Obligation $10,549,000 $26,786,500 Community Facilities 2009 (includes ARRA) Initial Allocation Actual Obligation $10,330,810 $24,094,810 Community Facilities 2008 Initial Allocation Actual Obligation $9,257,000 $10,953,350
2011 Levels of Funding: Expected Water & Waste 2011 Regular Allocation : Loan: $37,584,000 Grant: $12,744,000 So far $11,442,000 obligated or 26% of loan & 12% of grant Community Facilities 2011 Regular Allocation: UNKNOWN!! Nationwide competitive funding on expected state allocation. Loan: $9,983,000? Grant $566,000? Guaranteed Loan $5,243,000?
Due to nationwide backlog of CF and WEP projects, loan and grant funds are extremely limited. MI application backlog - $204,987,000 Water & Sewer - $173,296,500 Comm Facilities WEP Nationwide application backlog - $6,709,760,683 1,940 projects!!!!!! Much pressure on the states to get ARRA funded projects under construction and the money expended by 9/30/15!!
REFINANCING EXISTING DEBT-Limited to 50% of total project. Refinancing previous debt is an eligible for loan funds only. However, refinancing projects does not provide new environmental/public health benefits to water quality. If a portion of your project includes refinancing, you will receive two expected funding timeframes one without refinancing and one with refinancing.
LEVERAGING Funds from other sources including: CDBG SRF/DWRF MDOT DDA Applicant s general and/or enterprise funds The level of leveraging may give your project priority over another project by assigning additional priority points!
Davis Bacon Buy American ARRA Recipient Reporting
Up to maximum 40 year loans, dependent upon the life of facility, State/Local laws, or Repayment ability CF Equipment and/or vehicle loans are normally 15 years or less when using Act 99 Installment Purchase Agreement very dependent upon the useful life of the equipment being purchased. Capital Improvement Bonds has a 30 year limit. Revenue, Junior Lien Revenue & Special Assessment bonds have a 40 year limit.
Poverty Interest Rate MHI of less than $36,614 with a third-party documented violation of a health or sanitary standard 2.375% Intermediate MHI between 36,615 - $45,768 3.250% Market MHI over $45,769 4.000% You will always get the best interest rate at the time of loan closing!
The monthly user rate must be at least 1.5% of MHI (median household income). Example: Three communities with 500 EDUs with identical projects but with different MHIs. O&M, Repair, Replacement & Improvement reserve, bond reserve, and debt repayment total $270,000/year or $45 user rate/month. Community #1 MHI is $27,461(x 1.5% /12) = $34.33 monthly user rate - Grant eligible. Community #2 MHI is $35,500 (x1.5%/12) = $44.38 monthly user rate Grant eligible. Dependent upon grant funds availability. We may urge the community to fund the project as a loan only to expedite funding of the project. Community #3 MHI is $38,500 (x.15%/12) -$48.13 monthly user rate - Not eligible for grant funds.
Poverty Interest Rate MHI of less than $36,614 with a third-party documented health or safety issue 4.500% Intermediate MHI between 36,615 - $45,768 4.375% Market MHI over $45,679 4.250%
MHI Population Legal % Grant less than of or less than Maximum Recommended HHS Poverty Level $20,650 5000 75% 70% 60% of state MHI $27,461 5000 75% 55% 70% of state MHI $32,037 12000 55% 40% 80% of state MHI $36,614 20000 35% 25% 90% of state MHI $41,191 20000 15% 10% State MHI $45,768
Funding Limit -$25,000 or 75% of the project cost, whichever is less. Available to communities under population of 10,000 Restricted to communities with MHI below 80% of SNMHI or $36,614 Grant pays for the costs associated with developing a complete application (Preliminary Engineering Report, Environmental Report, draft Engineering Agreement, and other application documents) for a proposed project AND must be agreed to and accepted by the Agency prior to disbursement. Applicants must prove that they are unable to pay these development costs on their own. PPG funds cannot be used to pay for work already completed. Costs incurred prior to grant approval will not be considered eligible. If the Agency does not provide additional funds for any portion of the proposed project, the grant will not require repayment.
Program parameters are the same as the PPG except: Only available to communities under population of 2,500 Funding Limit -$30,000 or 100% Grant funding, whichever is less
Rural Development accepts applications year round and can fund projects any time, subject to funding availability and approval of the federal budget. If project is not selected for funding, the project remains on our application list until withdrawn by the applicant. For those pending applications, it is strongly suggested that either the applicant or the engineer keep us informed on any changes of project scope and amount of funds needed. Rural Development projects funded with our regular allocation are not required to comply with Davis Bacon.
TUSCOLA COUNTY VILLAGE OF AKRON STORM SEWER PROJECT - $400,000
St Clair County Village of Avoca/ Kenockee Twp Sewer Project
Grant WWTP Project
City of Essexville - $7,485,000 Hampton Township $18,000,000 Separate/joint sewer improvement project
Harbor Beach Area District Library Building Addition
Village of Bangor Police Vehicle
Boyne EMS Rescue Vehicle