Transcript Understanding WIFA

Understanding WIFA
Presented by:
Steve Wene
Moyes Sellers & Hendricks
Overview of WIFA
• State agency
• Finances construction or rehabilitation
– Drinking water
– Wastewater reclamation
• Must by publicly owned
• Governed by a Board of Directors
– 7 to 12 members
Loans and Grants
• Clean Water Revolving Fund Loans
• Drinking Water Revolving Fund Loans
• Technical Assistance Grants
– $35,000 per project
– Usually requires local match funding (40%)
– Exception for “Green Projects”
WIFA Process
• File a Project Priority List Application
• Secure debt authorization
– Public via resolution or bond election
– Private ACC finance application approval
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File a Project Finance Application
WIFA Project Finance Committee reviews
WIFA Board acts
WIFA and Borrower close loan
WIFA Financial Keys
• Debt Service Coverage
– Ensures enough cash flow to pay
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Principal
Interest
Fees
Reserves of 20%
– First 5 years is debt reserve
– Years 6 to 20 is repair and replacement reserve
WIFA Issues to Consider
• Subordination
• Security – all property
• Davis Bacon
– Labor must be paid “prevailing local wages”
• Timing
– Public bodies 6 months
– Private bodies 18 months
• Assumes a rate and finance case is needed
Issues with ACC Financing
• Usually need rate and finance application
– 18 month process
• How will debt service get paid?
– Through authorized rates
• Using depreciation and operating cash flow
– Through surcharge
• Reserve payment may not be covered
• May not let company rate base plant
Questions