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Frequently Asked Questions

 

Small Community Wastewater Grants Program

 

What is the source of funds for grants?

 Grant funds are generated from a fee on the Clean Water State Revolving Fund (CWSRF) loans. This fee is called a grant allocation assessment. To receive a grant, a sponsor must also receive a loan. The grant is a subsidy and is deducted from the required loan repayments.

How much funding is available annually?

Approximately $10 million per year is available from the grant allocation assessments however, the legislature may use some of these funds for other purposes.

What activities are grants used for?

Grants fund the planning, design, and construction of wastewater collection, transmission, treatment, disposal, and reuse facilities. Grants will not fund stormwater facilities or operation and maintenance costs. Top priority projects take precedence.

What is a top priority project?

Top priority projects address the elimination of a public health hazard, DEP-ordered upgrade/rehabilitation of an existing treatment plant that is out of compliance with their permit, or a project that corrects excessive infiltration/inflow.

Can a grant be used to purchase existing facilities?

No.

What are the eligibility requirements to receive a grant?

  1. Municipalities only (no privates, counties or special districts).
  2. Total population and a service area population of 10,000 or less.
  3. Per capita income less than $26,503.

What determines the amount of grant I get?

  1. The grant percentage is based on the type of project and the municipality’s affordability index (ability to repay).
  2. Funding from other state or federal sources is deducted from the total project cost prior to applying the grant percentage.
  3. Grants are limited to 25 percent of the available funds. Note that a municipality can only have one open grant at a time.

What is an affordability index?

The affordability index is an empirical number that is calculated using a computer model that factors in a combination of the most recent median household income, poverty, and unemployment census statistics and is used to determine a sponsor’s ability to repay a loan.

What other funding options are available for utility infrastructure projects?

The Florida Department of Economic Opportunity, the Federal Rural Development Agency, and the Federal Economic Development Agency also offer funding options.

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Clean Water SRF program

 

Why should I get a CWSRF loan?

The CWSRF program offers interest rates well below market rates. The value of the subsidy varies with the individual borrower's economic standing, which is measured by income, unemployment, and poverty. Generally, interest rates vary from 20% of the market rate for a financially disadvantaged community to 80% of the market rate for a more affluent community. Most communities (95%) have qualified for rates below 60% of the market rate. The average is about 55% of market rate. An example may serve to illustrate the SRF savings. A local government with a very good AA bond rating would pay 21% more in total interest on a 5.0%, 20-year marketplace loan as it would on a 3.0% (60% of market rate), 20-year SRF loan! For a one million dollar loan, that is an extra $256,400 in interest that would have to be paid to the bondholders to get marketplace financing. For a loan at 55% of the market rate a local government would pay 22% less in interest and would save $286,700 in interest. The savings available to communities that have less favorable bond ratings (or none at all) would be greater than for the example given. In addition to excellent rates, all loans offer fixed rate financing for the life of the loan.

Who is eligible for a loan?

Eligibility is established in the federal Clean Water Act. Local governments (municipalities, counties, authorities, special districts, and agencies thereof) are eligible for loans to control wastewater and stormwater pollution. Non-governmental parties (basically any entity that can repay a loan) are eligible for loans to control stormwater pollution related to agricultural operations.

What kind of projects are eligible?

Projects eligible for CWSRF loans include wastewater management facilities, reclaimed wastewater reuse facilities, stormwater management facilities, widely accepted pollution control practices (sometimes called "best management practices") associated with agricultural stormwater runoff pollution control activities, and estuary protection activities.

Is there a maximum or minimum loan size?

The maximum amount of funds available to any one sponsor during a fiscal year is 25% of the programs available funds. Normally the maximum amount is established by a segment cap. The segment cap varies depending on the demand for funds, but averages approximately $25 million. When a project sponsor qualifies for funding in excess of the available amount, the project sgenerally is scheduled to receive funding in subsequent fiscal years subject to the segment cap.

While there is no minimum loan amount project sponsors should consider program requirements (like planning, design, permitting and audit requirements) before deciding to proceed with loan funding. It is recommended that the loan amount be a minimum of $250,000.

What are the loan terms?

Generally, loans are to be repaid over 20 years or the useful life of the project whichever is less. The loan repayment period can be extended to a maximum of 30 years or useful life of the project for projects to benefit a small community with a financial hardship. Preconstruction loans and loans for the costs associated with pollution control associated with agricultural runoff have shorter loan repayment periods (generally 10 years). The interest rate is below market. An interest rate write-down (subsidy) is available to both governmental and non-governmental borrowers. Once established, the rate does not change over the life of the loan. Repayment begins six months after project work is scheduled for completion. Payback consists of equal semiannual repayments. A dedicated revenue source to repay the loan is required. Excess revenue, debt service reserve and other loan security features may vary depending on the source and predictability of the dedicated revenue.

How is the market rate determined?

The market rate for interest is established using the Thomson Publishing Corporation's "Bond Buyer" 20-Bond GO Index. It is established by the Department as of January 1, April 1, July 1, and October 1 of each year and it is the average weekly yield during the three months immediately preceding the date of determination. The average weekly yield is derived from the yields reported in the "Bond Buyer" for the full weeks occurring during the three-month period.

How is my financing rate determined?

The financing rate shall be (affordability index divided by 200) times the market rate. The maximum financing rate shall be limited to eighty percent of the market rate. The financing rate for a non-governmental sponsor of a project that qualifies for funding as a result of Section 319 or 320 of the Act shall be fifty percent of the market rate.

Are there fees associated with the loan?

All loans are charged a loan service fee of 2%. The fee is based on actual project costs so it only applies to funds used. There are no other fees.

What is the affordability index?

The "Affordability Index" is the empirical number that is generated for a project sponsor using a computer model entitled "Final Report Statistical Wt. – No Sales," which is based on a combination of the most recent median household income, poverty, and unemployment census statistics for local governments. The model was developed for the program in March 2003, by the Economics Department at Florida State University, Tallahassee, Florida. It is available for your use and it is located in the Water Pollution Control Manual under publications.

What is the timeline for getting funds?

The process can be initiated upon request of a project sponsor at any time. However, the availability of funds is the greatest at the beginning of the State fiscal year. A hearing is held quarterly to allocate funds. Potential SRF program participants are encouraged to contact the State Revolving Fund Program for further information. The hearings are normally held in January, April, July and October on the second Wednesday of that month.

Is there a deadline to be added to the fundable list at the meetings?

The sponsor shall have postmarked or delivered to the Department all required documentation at least 45 days prior to the public meeting.  All documentation must be complete as required by this chapter, fifteen days prior to the meeting date. For planning loans, the Request for Inclusion form is the only documentation required and for design loans, the Request for Inclusion form must be submitted and the planning process must be complete. For construction projects, the documentation required under Rule 62-503.700, F.A.C., is also required to be submitted.  

What if I’m late and don’t make the deadline?

If a sponsor is late submitting the required documentation, the project may still be added to the fundable listing provided funds are available and the Department has the time to review and accept project documentation. This project will not compete for funding with those that met the deadline but will be added to the bottom of the list.

What are the steps in obtaining a loan?

First, project information is provided on a Request for Inclusion Form to establish the project sponsor, a project description, priority score, and estimated project cost. For preconstruction loans this is the only documentation required to be put on the Department’s project priority list. If pursuing a construction loan, completion of a planning, design, permitting and site certification process is needed next. The Department will then add the project to its project priority list at a public hearing. Once it is placed on the fundable portion of the priority list for a preconstruction or construction loan a completed Loan Application Form is sent to the State Revolving Fund Program. Finally, a Loan Agreement drafted by the Department is executed by both parties to the loan. All forms are available on the Department’s Water Pollution Control Manual web page.

Are loans limited to construction financing?

No, loans can be for the planning and engineering costs necessary to get ready for construction. Such loans are described as “preconstruction loans.” Preconstruction loans are available to the sponsors of any project that will result in construction of stormwater or wastewater management facilities. Of course, loans and loan amendments can be made to finance construction. When a project involves the control of agricultural runoff, a loan also may be for the costs associated with widely accepted pollution control practices that include technical services and the purchase of equipment. In summary, loans can be for just about any activity associated with water pollution control.

What assistance is available for small communities?

At the beginning of each year, small communities having populations less than 20,000 are entitled to priority use of 15% of all loan funds. In addition, small communities qualify for loans from the unreserved 85% funds. All projects are prioritized for funding according to a system that favors small projects regardless of who the project sponsor is. Over the years, small communities have accounted for 30% of all loans.

Does the CWSRF program fund stormwater and non-point source projects?

Yes.

If I have questions whom can I contact or where can I go for information?

For more information or to arrange a meeting, please contact:

Program Administrator of the Clean Water State Revolving Fund Program

Or visit the State Revolving Fund home page.

How can an auditor (Certified Public Accountants/Recipients) request a Financial Statement for Auditor Report?

Auditors can request a Financial Statement for Auditor Report by emailing their request to SRF_Reporting@dep.state.fl.us.

 

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Drinking Water SRF Program

 

Who is eligible for a loan?

Cities, counties, authorities, special districts and other privately owned, investor-owned, or cooperatively held public water systems that are legally responsible for public water services are eligible for loans.

How are projects prioritized?   

The priority system takes into account public health considerations, compliance with the Safe Drinking Water Act or other enforceable requirements relating to drinking water systems, and affordability. Affordability includes the evaluation of median household income, population affected, and consolidation of very small public water systems which serve a population of 500 people or fewer.

Are loans and grants for preconstruction activities available?   

Yes, preconstruction loans and grants are available. The project sponsor must be classified as a small community water system, and for a grant, the sponsor must also be financially disadvantaged system. The project must also have an associated public health risk component.

Is there a maximum or minimum loan size?

The maximum amount of funds available to any one sponsor during a fiscal year is 25% of the programs available funds. Normally the maximum amount is established by a segment cap.  The segment cap varies depending on the demand for funds, but averages approximately $40 million. When a project sponsor qualifies for funding in excess of the available amount, the project sgenerally is scheduled to receive funding in subsequent fiscal years subject to the segment cap.

While there is no minimum loan amount project sponsors should consider program requirements (like planning, design, permitting and audit requirements) before deciding to proceed with loan funding. It is recommended that the loan amount be a minimum of $75,000.

   What are the loan terms?

Generally, low interest loans are to be repaid over 20 years or the useful life of the project whichever is less. The loan repayment period can be extended to a maximum of 30 years for financially disadvantaged communities. Assistance is available to small communities with populations of 10,000 or less.

What’s the first step to get a loan?   

Submit a "Request for Inclusion on the Drinking Water Priority List" form. This form can be downloaded from the drinking water manual or obtained by contacting the Project Coordinator in the Drinking Water State Revolving Fund Program.

After we sign the loan agreement, do we have to do anything else to get the money?   

Yes, a disbursement request form must be submitted. When a construction loan or grant is signed a sponsor can immediately request the administrative and engineering allowances. Other costs are provided on a reimbursement basis. A copy of invoiced costs (along with the disbursement request) has to be submitted prior to payment. For a pre-construction loan or grant, one-half of each of the administrative and the planning allowances shall be disbursed on request of the project sponsor after a financial assistance agreement is signed. The remaining one-half of each of the administrative and the planning allowances and one-half of the engineering allowance shall be disbursed on request of the project sponsor after the environmental review has been completed. The remaining one-half of the engineering allowance shall be disbursed upon request of the project sponsor after completion of the plans and specifications.

How long does it take to receive a disbursement?   

Approximately two weeks.

Will our first loan repayment be reduced if we haven’t drawn all of our loan money?   

No. Repayment amounts and dates are set by the loan agreement. The amount of the repayment will not change until an amendment to the agreement is executed. The repayment will not go down unless the loan amount is decreased. When the project is completed and all loan proceeds are disbursed, a final loan repayment amount and amortization schedule will be calculated.

Who should we contact about the status of a disbursement request if payment has not been received within the stated timeframe?   

You may contact the Contracts and Disbursement Section in the Bureau of Finance and Accounting at (850) 488-6439.

Can I get grant funding to correct a compliance problem?   

Only if it is associated with a public health problem and only if funds are available after funding all other sponsors project components which have a public health risk.

If I qualify for a grant how much money will I receive?  

For preconstruction grants the sponsor will receive 85% of the available allowances based on the estimated project cost.  For construction grants the amount received is limited to 65% or 85% (based on eligibility) of the cost to correct the public health component of the project.

When is the certification by the State Health Officer required?    

This form is only to be submitted when the project is for the treatment of chemical or microbiological contamination for which a maximum contaminant level has not been established.  For example chemicals such as MtBE, Bromail, or Microbiologicals such as Cryptosporidium.

How can an auditor (Certified Public Accountants/Recipients) request a Financial Statement for Auditor Report?

Auditors can request a Financial Statement for Auditor Report by emailing their request to SRF_Reporting@dep.state.fl.us.

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Last updated: July 18, 2016

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