Department of Environmental Quality Water Infrastructure November 17, 2015 Water Infrastructure...

Department of Environmental QualityWater Infrastructure

November 17, 2015

Water Infrastructure Funding to Financing

2

Overview

Department of Environmental Quality

• Program information• Fundamental changes in grants• Connect NC Bonds

3

Funding Programs


• Clean Water State Revolving Fund• Drinking Water State Revolving Fund• Community Development Block Grants – Infrastructure• State Programs

4

Funding Programs


• Clean Water State Revolving Fund• Largest funding program (>$100 million / year)• Capitalized over 20 years• Loans at ½ market rate; 0% also available• Principal forgiveness available

• Drinking Water State Revolving Fund• Community Development Block Grants – Infrastructure• State Programs

5

Funding Programs


• Clean Water State Revolving Fund• Drinking Water State Revolving Fund

• Similar to CWSRF• Approximately $50 million / year• Loans at ½ market rate; 0% also available• Some principal forgiveness available

• Community Development Block Grants – Infrastructure• State Programs

6

Funding Programs


• Clean Water State Revolving Fund• Drinking Water State Revolving Fund• Community Development Block Grants – Infrastructure

• Grant program for low- and moderate-income people• Non-entitlement local government units only• Approximately $26 million available

• State Programs

7

Funding Programs


• Clean Water State Revolving Fund• Drinking Water State Revolving Fund• Community Development Block Grants – Infrastructure• State Programs – Drinking Water and Wastewater

• Revolving loans – similar to SRFs• Grants – $12.4 million FY 2015-16; $15 million FY 2016-17• Significant changes this year

8

Funding Program Changes - 2013


Golden LEAF

Rural Economic

Development Center

Clean WaterManagemen

tTrust Fund

Dept. ofEnvironment and NaturalResources

Dept. ofCommerce

• Capacity/ Planning Grant• Supplemental

Grants• Economic

Infrastructure Grants

• Wastewater Infrastructure Grants

Public Water Supply

• Drinking Water State Revolving Fund Loans

• General Revolving Loans

• Technical Assistance Grants

• Emergency Loans

• High Unit Cost Grants

Infrastructure Finance Section

• Clean Water State Revolving Fund Loans

• General Revolving Loans

• Technical Assistance Grants

• Emergency Loans

• High Unit Cost Grants

Division of Community Assistance• CDBG

Infrastructure Funds

Commerce Finance Center• CDBG

Economic Development Funds

• Industrial Development Fund

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Funding Program Changes - 2013


Golden LEAFClean WaterManagemen

tTrust Fund

Dept. ofCommerceGolden LEAF

Rural Economic

Development Center

Clean WaterManagemen

tTrust Fund

Dept. ofEnvironment and NaturalResources

Dept. ofCommerce

• Capacity/ Planning Grant• Supplemental

Grants• Economic

Infrastructure Grants

• Wastewater Infrastructure Grants

Water and Wastewater Infrastructure Funding

FEDERAL FUNDS• State Revolving Fund (SRF)

Loans• Community Development Block

Grant-Infrastructure (CDBG-I) Grants

STATE FUNDS• General Revolving Loans• Emergency Loans• Technical Assistance Grants• High Unit Cost Grants

Division of Water Infrastructure

Division of Community Assistance• CDBG

Infrastructure Funds

Commerce Finance Center• CDBG

Economic Development Funds

• Industrial Development Fund

NEW

Appropriation

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State Water Infrastructure Authority


• 9 member board• Main areas

• Distribute loan and grant funds• Define water infrastructure needs and funding• Assess emerging practices in utility planning and funding• Assess need for “troubled system” protocol• Master plan

• Annual report• Suggested statutory changes• Demand for funding

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Statutory Changes


• New Grant Types• Asset Inventory and Assessment• Merger / Regionalization

• Affordability• Replaces High-Unit Cost threshold (Rates 1.5% of MHI)• Qualifications for grants• Percent of grant versus loan

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Asset Inventory and Assessment Grant


• Assist utilities in beginning an asset management program to help them move from reactive to proactive work strategies

• Better develop capital, operating, and life cycle costs • To enable utilities to apply to the Division funding programs

with capital improvement projects that meet the most critical needs of the system

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Merger / Regionalization Grant


• Merger – consolidation of two or more systems into one system with common ownership, management and operation

• Regionalization – physical interconnection of water and/or wastewater system for regional treatment or regional water supply

• Must consider multiple options • Allows informed local decision

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Affordability


N.C.G.S. 159G-20.(1)

The relative affordability of a project for a community compared to other communities in North Carolina based on factors that shall include, at a minimum, water and sewer service rates, median household income, poverty rates, employment rates, the population of the served community, and past expenditures by the community on water infrastructure compared to that community's capacity for financing of water infrastructure improvements.

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Enterprise System


• Revenues (charges for use) covers expenses• Transfers from enterprise fund

• G.S. 159G-37(b) prohibits a local government from receiving assistance if transfers are made from enterprise fund

• It does not apply to legitimate reimbursements of the general fund• See Coates’ Cannons Blog by Kara Millonzi

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Affordability


• Factors beyond control of Local Government Unit (LGU)• Income levels• Unemployment

• Factors specific to the utility (LGU can control)• Debt• Rates• Operating Ratio

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Water and Sewer Debt


Rates

<=$50 $50-$65 $65-$80 $80-$95 $95-$110 $110-$200

Residential Debt

$0 3 8 8 1 1 2

$1-$250 9 11 4 4 1 0

$250-$500 2 9 6 0 2 1

$500-$1000 1 12 9 8 3 0

$1000-$2000 3 7 8 6 3 2

$2000-$15000 1 6 6 2 4 3

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Rates

<=$50 $50-$65 $65-$80 $80-$95 $95-$110 $110-$200

Residential Debt

$0 3 8 8 1 1 2

$1-$250 9 11 4 4 1 0

$250-$500 2 9 6 0 2 1

$500-$1000 1 12 9 8 3 0

$1000-$2000 3 7 8 6 3 2

$2000-$15000 1 6 6 2 4 3

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Rates

<=$50 $50-$65 $65-$80 $80-$95 $95-$110 $110-$200

Residential Debt

$0 3 8 8 1 1 2

$1-$250 9 11 4 4 1 0

$250-$500 2 9 6 0 2 1

$500-$1000 1 12 9 8 3 0

$1000-$2000 3 7 8 6 3 2

$2000-$15000 1 6 6 2 4 3

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Rates v. Operating Ratio


Rates

Count of OR <1 $0 - 50 $50 - 65 $65 - 80 $80 - 95 $95 - 110 $110 - 200

Connections

0 - 500 3 6 6 3 3 1

500 - 1000 0 1 3 0 2 3

1000 - 3000 3 7 0 7 1 0

3000 - 10000 1 5 4 1 1 1

10000 - 50000 0 0 0 0 N/A N/A

50000 - 300000 0 0 0 N/A N/A N/A

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Rates

Count of OR <1 $0 - 50 $50 - 65 $65 - 80 $80 - 95 $95 - 110 $110 - 200

Connections

0 - 500 3 6 6 3 3 1

500 - 1000 0 1 3 0 2 3

1000 - 3000 3 7 0 7 1 0

3000 - 10000 1 5 4 1 1 1

10000 - 50000 0 0 0 0 N/A N/A

50000 - 300000 0 0 0 N/A N/A N/A

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Rates

Count of OR <1 $0 - 50 $50 - 65 $65 - 80 $80 - 95 $95 - 110 $110 - 200

Connections

0 - 500 3 6 6 3 3 1

500 - 1000 0 1 3 0 2 3

1000 - 3000 3 7 0 7 1 0

3000 - 10000 1 5 4 1 1 1

10000 - 50000 0 0 0 0 N/A N/A

50000 - 300000 0 0 0 N/A N/A N/A

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Next Steps


• Division developing recommendations to the Authority• Affordability• Asset Inventory and Assessment• Merger / Regionalization

• Implementation with grant cycle Spring, 2016• Authority

• Master Plan – focus on viability • Utility management issues

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Connect North Carolina Bonds


• $2 billion bonds • $309.5 million for water and sewer

• $209.5 million loans• $100 million grants

• Split evenly between Drinking Water and Wastewater• Voter approval in March 2016

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Contact Information


Division of Water Infrastructure Homepage: http://portal.ncdenr.org/web/wi/

Phone: 919-707-9160

Kim H. Colson, P.E.919-707-9177

[email protected]

http://portal.ncdenr.org/web/wi/

Department of Environmental Quality Water Infrastructure November 17, 2015 Water Infrastructure...

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