department of environmental quality water infrastructure november 17, 2015 water infrastructure...
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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
Department of Environmental Quality
• Clean Water State Revolving Fund• Drinking Water State Revolving Fund• Community Development Block Grants – Infrastructure• State Programs
4
Funding Programs
Department of Environmental Quality
• 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
Department of Environmental Quality
• 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
Department of Environmental Quality
• 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
Department of Environmental Quality
• 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
Department of Environmental Quality
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
9
Funding Program Changes - 2013
Department of Environmental Quality
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
10
State Water Infrastructure Authority
Department of Environmental Quality
• 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
11
Statutory Changes
Department of Environmental Quality
• 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
12
Asset Inventory and Assessment Grant
Department of Environmental Quality
• 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
13
Merger / Regionalization Grant
Department of Environmental Quality
• 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
14
Affordability
Department of Environmental Quality
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.
15
Enterprise System
Department of Environmental Quality
• 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
16
Affordability
Department of Environmental Quality
• Factors beyond control of Local Government Unit (LGU)• Income levels• Unemployment
• Factors specific to the utility (LGU can control)• Debt• Rates• Operating Ratio
17
Water and Sewer Debt
Department of Environmental Quality
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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Water and Sewer Debt
Department of Environmental Quality
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
19
Water and Sewer Debt
Department of Environmental Quality
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
20
Rates v. Operating Ratio
Department of Environmental Quality
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
21
Rates v. Operating Ratio
Department of Environmental Quality
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
22
Rates v. Operating Ratio
Department of Environmental Quality
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
23
Next Steps
Department of Environmental Quality
• 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
24
Connect North Carolina Bonds
Department of Environmental Quality
• $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
25
Contact Information
Department of Environmental Quality
Division of Water Infrastructure Homepage: http://portal.ncdenr.org/web/wi/
Phone: 919-707-9160
Kim H. Colson, P.E.919-707-9177
kim.colson@ncdenr.gov
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