WATER INFRASTRUCTURE FINANCING PROGRAMS

Overview
* The Public Facilities Authority (PFA) administers state programs to fund wastewater, drinking water, and stormwater treatment projects for cities throughout the State.
o Programs are administered in conjunction with Pollution Control Agency (wastewater and stormwater) and Health Department (drinking water)
* PFA - financial review and fund management
* PCA/MDH - technical review and project priorities
* Eligible projects include rehabilitation, replacement and upgrade of municipal wastewater and drinking water treatment facilities, sanitary sewer collection systems, watermain distribution systems, wells, and water towers.
* All PFA programs follow project priority lists prepared by the Pollution Control Agency (wastewater and stormwater projects) and Health Department (drinking water projects)
o Projects are ranked based on age and condition of existing infrastructure and water quality and public health criteria
* The PFA funding framework is based on low interest loans that are available to cities of all sizes and targeted grants focused on affordability needs and specific water resource protection and restoration goals.
* The PFA works closely with other state and federal agencies to coordinate funding, including USDA Rural Development and the DEED Small Cities Development Program.
Clean Water and Drinking Water Revolving Funds
* Low interest loans for municipal wastewater and drinking water projects.  Loan repayments revolve back to make new loans, providing a permanent source of capital to help cities finance water infrastructure construction projects.	
o Clean water (wastewater) loans, 1990 to date:  533 for $2.9 billion
o Drinking water loans,  1999 to date:  395 loans for $802 million
o $838 million in interest savings to local governments and their taxpayers
* Program support provided by annual federal capitalization grants and 20% state match.  PFA leverages federal and state funds by issuing its AAA rated revenue bonds to generate additional loan funds.
o To date, each $1 in state matching funds has generated over $16 in project construction and more than $3 in interest savings
* Current average annual lending capacity  
o Clean Water Revolving Fund:  $94 million/year
o Drinking Water Revolving Fund:  $40 million/year

Water Infrastructure Funding (WIF) Program
* Supplemental grants up to 80% based on affordability criteria for high cost water infrastructure projects. 
* WIF grants are packaged with CWRF/DWRF loans or provided as match with USDA Rural Development funding.
o Projects receiving CWRF or DWRF loans are eligible for WIF grants if O&M and debt service costs per household exceed affordability criteria 
* Wastewater - 1.4% of MHI ($48/mo. for avg non-metro MHI)
* Drinking Water - 1.2% of MHI ($41/mo. for avg non-metro MHI)
o Projects receiving RD funding can receive a WIF matching grant for up to 65% of the grant need based on RD affordability criteria.
* 2017 legislation made drinking water projects eligible for WIF and increased the maximum grant to $5,000,000.
Point Source Implementation Grant (PSIG) Program
* Grants to help cities upgrade treatment facilities to reduce discharge of specific pollutants to in order to meet more stringent treatment requirements.
* 2017 legislation increased the grant percentage to 80% of eligible costs and the maximum grant to $7,000,000.
Small Community Wastewater Treatment Program
* Grants and loans to help small unsewered communities address problems from failing and noncomplying septic systems.
o Technical assistance grants up to $60,000 for site evaluations and feasibility studies
o Construction loans and grants up to $2 million to failing septic systems with community subsurface sewage treatment systems


Nov 2017