Drinking Water State Revolving Fund

Ashraf Gabour Program Manager CERO/SERO

MassDEP Municipal Services

Water Pollution Abatement TrustSue Perez

Nate Keenan

Heather Saxelby

O’Donnell

MassDEPSteven McCurdy

Joe Delaney

John Felix

Jointly Administered

•The Safe Drinking Water Act,as amended in 1996, established the Drinking Water State Revolving Fund to make funds available to drinking water systems to finance infrastructure improvements.

• App. $80 Million in financing offered to communities yearly.

DWSRF Purpose

Traditional DWSRF projects

•Water Treatment Plant improvements

•Distribution System improvements

•Water Storage facilities

NOTE: DWSRF is a financing source, not a regulatory program. If a project is permissible under statutes or regulations, it can be financed with DWSRF.

Non-traditional DWSRF projects

•Energy efficiency within system

•Renewable Energy at WTF

•Water System Planning

NOTE:DWSRF is principally concerned with public health, but CWSRF can finance any water quality improvement project. CWSRF is therefore often a better solution for issues like recharge, stormwater management, etc.

DWRSF ScheduleTwo year time line

• Project Evaluation Form (PEF): August 15 2014

• Projects are ranked by Mass DEP: Fall 2014

• Mass DEP publishes Intended Use Plan (IUP): March, 2015

• Local Authorization (Town Meeting/City Council): June

30, 2015

• Submitting Loan Application to DEP: October 15, 2015

• Project Approval Certificate (PAC) MassDEP: December

30, 2015

• Commence of Construction: June 30, 2016

Ranking of Projects (PEF)

Rank Description

Tier 1 Projects that are proposing to correct a serious existing problem with the water supply or addresses water supply issues that are showing evidence of becoming serious and will likely exceed a standard or compromise the use of a water supply if not corrected. Exceedance of an MCL, TT, MRDL, Action Level, and/or MassDEP ORSG Level.

Tier 2 Projects that are being undertaken to prevent a potential serious threat to a major water system component.

Tier 3 Projects are those undertaken to address exceedances of Secondary Maximum Contaminant Levels (SMCL) that compromise the potability of a water supply.

Tier 4 Projects that are proposing to upgrade/rehab/replace water supply infrastructure components that are approaching or have passed their planned useful life-cycle

Tier 5 Infrastructure components that have an indirect connection to providing safe drinking water (fencing, meters, etc.)

Why Borrow From the Trust

Benefits of Using the Trust• What does the 2% rate mean for

your community?

• On an average $5m loan the community would save $738,144 over the life of the loan (using current market rates)

• Equates to a 40% interest subsidy

• Savings generated through economy of scale

• Underwriters fees

• FA fees

• Bond Counsel fees

2% Loan vs Market Rate

Loan Terms and FeesClean Water

Drinking Water

Interim Loan

Loan Rate2% (20 Years)

Calculated (30Years)*2%

½ MMDT Rate (0.10%)

Max. Term 30 years 20 years 1 year

Admin Fee 0.15% 0.15% N/A

Effective Loan rate

2.15% (20 Years)2.15% N/A

Origination Fee (one-time)

Approx. $7.50/$1,000**

Approx. $7.50/$1,000

$500-$1,000

* Rate calculated at time of bond sale, estimated between 2.4-2.9%** To be determined at time of bond sale to offset costs

Borrower Loan Application• Due to MassDEP October 15, 2015

• Loan Application has three parts1. Applicant Information - Authorized

Representative, Local Appropriation etc.

2. Project Requirements - Plans and Specifications, Cost, Schedule, etc.

3. Supplemental Requirements - Permits, Planning, Professional Services Agreement, etc.

Application Requirements•Certificate of Title

•MEPA

•Historic Preservation

•Conservation Commission

•Flood Insurance

•DW Permits

MassDEP Project Approval Certificate (PAC)

• PAC Issued by MassDEP to the

MWPAT

• A copy is sent to Community

• PAC certifies project eligibility,

costs, and lists conditions

• Before bidding, MassDEP must give “Permission

to Advertise”

• Bid Specs/Contracts must be approved by

MassDEP

• MassDEP Civil Rights Section reviews and

approves DBE participation

• MassDEP reviews bid results and issues

“Authorization to Award”

MassDEP Project Regulatory Agreement (PRA)

• Contract between MassDEP and Borrower

• Establishes MassDEP control over project

• Outlines project eligibility and funding

• Establishes disbursement procedures

• Loan closeout process

• Legal requirements of Borrower

• Discusses project defaults and how to remedy

Disbursements• Proceeds of the loan are generally disbursed to the

community monthly

• “Payment Requisition” is completed by the community and

forwarded to MassDEP with the appropriate documentation

• MassDEP reviews the request and approves eligible costs

• MassDEP forwards the request to the MWPAT

• MWPAT wires to borrower every Thursday with funds often

available the next day

DWSRF Contact information http://www.mass.gov/dep/water/wastewater/wastewat.htm#dwsrfFinancial•Sue Perez 617-367-9333 x816•Nate Keenan 617-367-9333 x508 •Heather Saxelby O’Donnell 617-367-9333 x584

Program•Steve McCurdy 617-292-5779•Joe Delaney 617-292-5808 •John Felix 617-292-5523•Ashraf Gabour 617-556-1076