WEDA Winter ConferenceJanuary 11, 2011

Community ProgramsFunding FY 2010

WEP CF• Direct Loan $7,148,000

$1,820,000• Grant 2,429,000

97,000• Guaranteed 891,000

1,280,000

**Match is not required, but leveraging is encouraged to maximize our allocations.

Funding ExampleWWDC Loan $1,048,000WWDC Grant 1,248,000 State Funding = 44.7%

MRG 1,000,000AMG 1,887,239 RD Funding = 40.8%

SRLF 1,406,761RD Loan 3,000,000 Applicant Funds = 14.5%

RD Grant 3,000,000Applicant 2,130,000Total Cost $14,720,000

Rural Utilities Program

Community Facilities Programs

• Guaranteed Loans• Direct Loans• Grants

Community Facilities Programs

What is an essential Community Facility?

• One that is needed for the orderly development of the community.

• Serves the local community and is a function that is typically provided by some branch of government.

• This cannot include any private or commercial undertakings.

Community Facilities Programs

WHO MAY RECEIVE ASSISTANCE ?

• Public Bodies: – Cities, Counties or Special Purpose Districts

• Indian Tribes• Non-Profit Corporations• Population Limits:

– Towns up to 20,000 population (2000 Census)• In Addition, Borrowers must:

– Have the legal authority to borrow and repay loans, to pledge security for loans, and to construct, operate, and maintain the facility or services.

– Be financially sound and be able to organize and manage the facility effectively.

– Be unable to obtain needed funds from other sources at reasonable rates and terms.

Community Facilities Programs

Authorized CF Loan/ Grant Purposes

• To construct, enlarge, extend, or otherwise improve essential community facilities providing essential service primarily to rural residents. – Heath Services– Community, Social, or Cultural Services– Transportation Facilities– Industrial Parks

CF Maximum Loan, Rates, and Terms

• No maximum dollar amount. Loan based on applicant’s needs and ability to repay.

• Interest Rates are dependent upon Median Household Income for the service area - rates are set quarterly based on the current GO Bond index. Lowest rate available 4.25%.

• Maximum Term - 40 years, State Statute, or useful life of facility, whichever is less

CF Grants *Grant assistance may be available for up to 75%

of project costs. A scale has been developed to predetermine grant funding limitations based on population and income. Most communities in Wyoming only qualify for 15 to 35% grant assistance.

* Further limited to the minimum amount sufficient to provide economic feasibility to the proposed project and either $50,000 or 50 % of a States annual allocation whichever is greater.

Rural Utilities Programs

• Water and Waste Disposal Loan and Grant

• Water and Waste Disposal Loan Guarantee

• Solid Waste Management Grant

Rural Utilities Program

Water and Environmental Programs (WEP)

• Water & Waste Disposal Loans/Grants• Solid Waste Management Grants • Technical Assistance & Training Grants• Rural Water Circuit Rider/Technical

Assistance– Wyoming Association of Rural Water Systems

(WARWS)– Midwest Assistance Program (MAP)

WEP - Eligibility Criteria

• Non-profit Associations, Indian Tribes & Public Entities - municipalities, counties, special purpose districts and authorities, joint powers boards

• Rural areas / service area with populations of less than 10,000

• Be unable to obtain credit elsewhere

WEP - Eligibility Criteria (Continued)

• Have the legal capacity to borrow and repay the loan, to pledge security, to own and operate the proposed system

• Be financially sound and able to manage the facility effectively.

WEP Authorized Loan/Grant Purposes

• Construct, repair, improve, expand, or otherwise modify rural water supply and distribution including pipelines, hydrants, pumping stations, treatment, and storage

• Acquire water supply or water rights (i.e..: reservoirs, wells)

WEP Authorized Loan/Grant Purposes (Continued)

• Construct, repair, improve, expand, or otherwise modify waste collection, pumping, treatment, or other disposal facilities

• Related soft costs (i.e.: engineering, legal, ROWs, land acquisition, bond counsel, accounting costs)

WEP Maximum Loan, Rates, and Terms

• No maximum dollar amount. Loan based on applicant’s needs and ability to repay.

• Interest Rates are dependent upon Median Household Income for the service area - rates are set quarterly based on the current GO Bond index. Lowest rate available 2.50%.

• Maximum Term - 40 years, State Statute, or useful life of facility, whichever is less

WEP Loan and Grant Limitations• Grants awarded where necessary to help

achieve reasonable user rates:

– Maximum grant consideration is 75% where MHI is below $30,215 (poverty level) Must alleviate health and safety issues.

– Maximum grant consideration if 45% where MHI is between $30,215 to $37,769 (intermediate level)

– No grant funds where MHI is $37,769 or greater (market rate)

THE PROCESS• PRE-APPLICATION PHASE:

» Determine Applicant’s eligibility (review of organizational documents)

• ENVIRONMENTAL REVIEW PROCESS

Environmental assessment of project location

(30 - 120 days depending on type of Class Action)

Agency prepares for CF and independent consultant

for WEP

• FORMAL APPLICATION PHASE:» Preliminary Engineering/Architectural Report

(PER) to determine project feasibility » formalize agreements with architect or engineer» Financial Feasibility Study» Public Meeting - Community Consensus» Funds Obligated, letter of Conditions issued» Interim financing Arrangements made for

construction period» loan closed and funds disbursed after final

inspection and acceptance of project

Criticisms of RD Funding• RD review of project scope,

design, and costs in addition to DEQ’s approval

• Environmental- Mitigation measures to protect farmland, wetlands, and floodplains

• Requirement for Municipal Bonds for Public Bodies- 10% Debt Reserve Fund (Revenue Bond)

Advantages of RD Funding• Low interest rates• Longest fixed rate term available• Matching funds for State Grants• Commitment prior to authorizing design• No fees for RUS services• RUS’s commitment to customer service• No pre-payment penalties

Best Practices for RD Funding

Get RD involved early in the project development!

Board/ Council needs to be engaged in the process.

Communication is critical.

Thank you!

• Contact Information: Alana CannonCommunity Programs DirectorUSDA Rural DevelopmentPO Box 11005Cheney Federal BuildingCasper, WY 82602307.233.6709