Drinking Water Infrastructure Improvement Presentation to the Cabinet Committee on State Planning Issues February 2007 Delware Health and Social Services Division of Public Health Health Systems Protection DHSS/DPH Programs • Drinking Water State Revolving Fund (DWSRF) • 21st Century Drinking Water Management Account (WMA) DWSRF General Information • Drinking Water State Revolving Fund (DWSRF) • Program started in Delaware in 1998 • 21 projects have been funded • $63.7M has been allocated Funding Sources • Annual Capitalization Grant from EPA • 20% match from the 21stCentury Fund Funding Uses-Set Asides 2% Technical Assistance to Small Water Systems • Delaware Tech –Licensing and Continuing Education • Delaware Rural Water Association –On Site Technical Assistance Funding Uses-Set Asides 4% Program Administration • Office of Drinking Water • DNREC Accounting Section Funding Uses-Set Asides 10% Program Management • Underground Injection Control (DNREC) • Public Water Supply Supervision (DHSS) 10% Program Management cont. • Operator Certification (DHSS) • Capacity Development -new systems and DWSRF applicant assistance (DHSS) Funding Uses-Set Asides 15% Local Assistance • Source water assessments (DNREC) • Well head protection (DNREC) 15% Local Assistance cont. • Capacity Development-existing systems (DHSS) • Non-regulatory program that offers systems assistance in technical, managerial and financial capacity to meet requirements of the Safe Drinking Water Act. Funding Uses-Projects Projects • Remaining money used to fund projects • Generally about $7.5M Project Descriptions • Finished water reservoir covering • Main replacements • Storage tanks • Arsenic removal • Nitrate removal • Treatment plant upgrades Loan Terms • 20 year loans • Interest rates are determined 10 days prior to loan closing according to financial publication reporting • 2005 average interest rates for municipalities was 2.42% Cont. • DHSS charges a 1% administrative fee on loans. Due at the time of closing and cannot be part of the loan Disadvantaged Communities • Serves residents whose MHI* is less than 100% of the county wide MHI, based on the most recent census; and • Has or will have user rates exceeding 1.5 % of the system or town MHI; or resulting combined water and sewer user rates exceeding 3.0% of the system or town MHI; and • Has submitted a loan application primarily for resolution of a health or compliance problem. Application Consideration • Borrowing limits • Charter requirements • Agreement of elected officials • Payment schedules • Interim financing • Readiness to proceed • Impact on user rates • Strategies for State Policies and Spending Application Process Pre-Applications • August 15–mailed out to all eligible water systems • September 15–due back to ODW • October 1–reviewed and ranked • The review process will now include a representative of the Office of State Planning Coordination * MHI = Median Household Income Application Process Definitions • Project Priority List-the list of pre-applications in order of points given through the review process Definitions • Intended Use Plan-a plan required by EPA that provides the framework for funding sources and uses Definitions • Funding Line -the dollar amount allocated to projects and determined on the Project Priority List after the Set-Asides amounts are determined Application Process Public Workshop • Held in mid-October • EPA requires states to conduct a public hearing to present the Project Priority List and the Intended Use Plan • Written comment is accepted for two weeks after the public workshop Application Process Full Applications • October 15 –mailed out to applicants above the funding line • January 15 –due back to ODW Water Management Account Funding Source is the 21stCentury Fund Water Management Account uses • To supplement DWSRF loans to make projects affordable • To provide funding to projects below the funding line • Funds may also be used for emergency situations • Funding is via grants and loans Water Management Account process • Projects must be on the DWSRF Project Priority List • Review process is the same as DWSRF projects Funding Process Full Applications Are reviewed by ODW staff for: • Environmental Assessments • Capacity Development Cont. • Financial Reviews are completed by DNREC staff. • They are then forwarded to ODW for inclusion in packet Funding Process Reviews are then compiled in a report that is presented to the Cabinet Committee for State Planning Issues (CCSPI). Upon CCSPI approval, the Secretary of Finance signs a resolution that allows the funds to be loaned by the state Binding Commitments Applicant is agreeing to accept the money they have applied for and are given two weeks to sign binding commitments Current Issues New Language in Binding Commitments has been included because some projects have been slow to proceed. Loan Closing • Occur when municipalities have met all charter requirements • Items that are taken into consideration are the need for public hearings, special town sessions or meetings, and referendums Current Issues Full Application “Proposed Schedule” • Should be achievable and realistic. • Projects should be ready to proceed at the time of loan closing. • Financial penalties may be imposed if projects do not progress in a timely fashion. Current Issues Interim Financing Applicants will have to provide proof of interim financing at time of Notice to Proceed. Ineligible Projects • Dams or rehabilitation of dams • Water rights • Raw water reservoirs • Projects needed primarily for fire protection • Projects needed to primarily serve future population growth Growth DHSS is working to determine a definition of ‘reasonable growth’ Examples of language that indicates growth are: • Proposed/planned developments • New annexations • Projected growth • To serve residential growth Growth cont. All projects in Level 4 of the “State Strategies for Policies and Spending”will be reviewed to determine if growth is an element of the project. Only projects that address a public health issue in Level 4 areas will be eligible for funding. Ineligible Project-Related Costs • Laboratory fees for routine compliance sampling • Operation and maintenance expenses • Contracts for operation and maintenance Questions? Contact Information Heather Warren DWSRF Program Manager Heather.Warren@state.de.us 302-741-8585 Doug Lodge, PE Engineer Doug.Lodge@state.de.us 302-741-8588 Ed Hallock ODW Program Administrator Edward.Hallock@state.de.us 302-741-8590