United States
         Environmental Protection
         "Agency
             Office ol Water
             (WH-550)
EPA/812-R-92-001
May 1992
&EPA
Ah Overview of Existing State
Alternative Financing Programs:
Financing  Drinking Water System
Capital Needs in the 1990's
                                      Printed on Recycled Paper

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                                                 INTRODUCTION


          This report provides an overview of alternative financing programs in twelve states. These programs were desiened
 to provide financial assistance to local entities for the construction, enhancement, and  rehabilitation of drinkina water
 treatment facilities as well as other state infrastructure needs.  Each state outline includes information on the development
 of the program, their specific objectives, criteria for  funding projects, and a description ontoow each program has been
 implemented.

          A lack of available funding has prompted many State Legislatures to create loan and grant programs sponsored by
 state agencies and authorities, in order to meet local drinking water infrastructure needs.  These programs aid localities in
 compliance with Federal and state drinking water standards.  In  1991 Nevada and Oregon became the latest states to pass
 legislation, setting up dedicated infrastructure funds to help systems meet drinking water capital requirements.

          There are a variety of innovative  approaches being taken to establish state sponsored financial proarams. States
 have created loan and bond programs to improve local government access to credit. Three states have given their authorities
 the power to finance private water systems.  Each state program is creatively tailored to meet the particular needs and statutes
 of a State.

          The Map and Current Status table on the following pages outline a variety of methods and fundina sources as well
 as the date of establishment for these drinking water financing programs.                              "          '

          The Comparative Matrix summarizes and compares the principal characteristics of the twelve state assistance
 programs.  Providing more detailed  information, each annotated outline uses the same format to allow easy comparison
 between programs for any particular issue.  Some significant programmatic similarities and differences described in the matrix
 include:


          •        Program capitalization varies from State to State. Legislative appropriations are commonly used to initiate
                  programs, and to  subsidize a lower interest rate on loans.  Bonding authority is often extended to these
                  programs to allow capitalization  through  the  issuance of general obligation and/or revenue bonds.   In
                  several proarams dedicated revenues from a portion of the State sewer and water, excise, real estate, and
                  mineral severance taxes  are also  used.

                  Several of the programs are designed to be self-sustaining, using loan repayments for additional loans and
                  for the retirement of outstanding bonds.  Others receive  periodic infusions of capital from legislative
                  appropriations, revenues, or State bond proceeds.

                  Eligible entities for the majority of the surveyed programs include political subdivisions of the State such
                  as:  municipalities, towns, counties, cities, public authorities, or public service districts.  However, three
                  state programs have the authority to finance drinking water development projects within the private sector.

         *        Several hardship loan and grant programs have been designed to aid small or economically disadvantaced
                  communities unable to fund on their own. State funding programs, in some cases, offer refinancing loans
                  for existing  indebtedness related to water development projects and systems. Other innovative procranis
                  include financing for emergency grants, planning loans, capital improvement planning loans, and research
                  and development  grants.

                  Five of the sun-eyed state assistance programs  are administered jointly by two or more separate agencies
                 within each  state.  Responsibilities for each step of the loan and grant process are delegated among the
                 state agencies according to expertise, with a few performing only an advisory role to the'fundine aaencv.
                 However, the  final approval of loan and grant applications is usually done in conjunction.


         For additional information, please contact the Drinking Water Hotline at (SOO) 426-4791 or contact James Bourne
Office of Ground Water and Drinking Water, at (202) 260-5557-.

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                         Current Status of Surveyed States
State
Date Established
                                          Tvoe of Program . Funding Smtrm





                                          Loans/Grants - Bonds/Appropriations

                                          Loans/Grants - State Bonds


                                          Loans only - Bonds


                                          Loans only - State Bonds


                                          Loans only - State Bonds/Appropriations
                                                                   i
                                          Loans/Grants - Bonds


                                          Loans/Grants - Bonds


                                          Loans/Grants - State Bonds/Appropriations


                                          Loans/Grants - Bonds


                                          Loans only - Dedicated State Revenues


                                          Loans only - Bonds/Appropriations


                                          Loans only - Dedicated State Revenues

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                   Arkansas Soil and Water Conservation Commission

                                        Summary
                                                                 four Ending programs created

          systems.  Most assistance K ^L to ^K^^S^Sf"0^ °f W3tCr SUpply ***

economically depressed communities. Act 496 of 1981 au£orS?he CoT   ^ 3 S^aU amount of g"1"5 lo

Development General Obligation Bond Program to iLue upTsiSS ^SSS^S^^ *"" ReSOUrCCS
million issued in any biennium.                       P        muuon in bonds with no more than $15

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                    Arkansas Soil and Water Conservation Commission
                                 Program Annotated Outline
I.      Program Description
       The Arkansas Soil and Water Conservation Commission administers four funding proerams created
       to provide financial assistance to local entities in the State of Arkansas for construction^ water
       supply and distribution systems.

       A.      Organization

               1.      Scope
                      The Arkansas Soil and Water Conservation Commission is authorized to apply bond
                      proceeds for the purpose of providing or assisting in providing for the acquisition,
                      development, and expansion of water treatment facilities and distribution systems as
                      weU as other necessary projects.  Most assistance is in the form of low-interest loans
                      with a small amount of grants to economically depressed communities.

              2.      Agencies Involved
                      The ASWCC operates several funding programs which include: the Arkansas Water
                      Resources Development General Obligation Bond Program (AWRDBPV the Water
                      Development Fund Program (WDFP);  the Water Resources  Cost Share Revolving
                      Fund Program (WRRF); and the Water, Sewer, and Solid Waste Manaeemem Svstem
                      rrogram (WSSW).

       B.      Establishment

              1.       Options initially considered.
                      A lack of funding prompted the legislature to create loan programs funded by state
                      appropriations and bond issues to adequately finance the needed water development
                      projects within the State of Arkansas.

              2.     '  Political and legal considerations
                      Each financing program was initiated by a separate act under the general laws of the
                      State of Arkansas and the ASWCC. The WSSW was established by Act 274 of 1975
                      and was originally administered by the Dept. of Local  Services. 'Act 764 of  1981
                      transferred the administration of the program to the ASWCC.  The WDFP proeram
                     was established by Act 217 of 1969. The WRRF was established in 1989 by Act 257
                     Act 496 of 1981 established the WRDBP.

              3.      Statutory and constitutional restrictions
                     Act 496 of 1981 authorizes the Commission under the Water Resources Development
                     General Obligation Bond Program to issue up to $100 million in bonds  with no more
                     than $15 million issued in any biennium.

              4.      Subsequent program modifications • None

              5.      Future Picture
                     After the $100 million has been exhausted, it is anticipated that other issues will be
                     requested of the Arkansas voters by referendum.

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II.
Administration
       B.
       Staff size/Skill mix
       Currently there are 8 staff members.  The staff consists of an engineering supervisor a law
       two engineers, two loan coordinators, an accountant, and an adininistrative iS? Mu
       training is required due to the staffs extensive experience with bond issues         Mu"mai

       Administrative costs/Operating budget
       Administrative costs  and  budget are funded mostly from state appropriations   The annual
       operating budget totals approximately $45,000.                     i«««Hujns.  me annual
HI.    Operating Funds
              Fund capitalization
              1.
              3.
              4.
              5.
              6.
              Funds from previous program - None

              Federal funds - None

              State funds - The Water Development Fund Program (WDFP) and the WSSW receive
              approximately $1 million each through state appropriations each biennium.

              Bonds/borrowed funds - Act 4% of 1981 authorized the ASWCC  to issue a
              total of $100 million in general obligation bonds. Two $15 million bond issues were
              made in 1985 and 1989. Another issue of at least $15 million is planned forlateJ991

              Loan repayments/Internal funds - Repayment of loans from the WRDBP funds are
              used to finance other projects and  retire  outstanding bonds,.   The  funds  from the
              repayment of loans under the WDFP and  the WSSW Programs are recycled to the
              revolving fund source.                                             '
                       o                    hanisms - Under the approval standards for applications, the
                     ASWCC considers the feasibility and availability of alternative sources of revenue which
                     could be obtained and utilized for project financing either aparit from or in conjunction
                     with loan assistance.                                                  }

             7.      Leveraging capability - None
      B.     Forms of Assistance

             1.      Loans
                            Program description
                            The Arkansas Soil and Water Conservation Commission (ASWCC) administers
                            several loan programs.  Over the past 18 years, the WSSW and the WDFF have
                            made approximately 325 loans totalling over $23 million. For the last two $15
                            million bond issues in 1985 and 1989, a total of 78 loans were made with
                            approximately $29.1 million hi bond proceeds.

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                T^ Wat«  Resources Development  General  Obligation  Bond
                Program (WRDBP) authorizes the ASWCC to apply bond proceeds
                tor the purpose of providing for the acquisition,  development, and
                expansion of water treatment and storage facilities for the use and
                                                     d°mestic' '^cultural, and
                   «       Devel°Pment  Fund Program (WDFP) authorizes the
                AiWCC to assist/support any water development in cooperation with
                any political subdivision or agency of the state, provided it be made
                a part of the State Water Plan.

                The Water Resources Cost Share Revolving Fund (WRRF) provides
                grants and loans to the State of Arkansas and its political subdivisions
                for the purpose of funding  the non-federal share of water resources
                development projects. This fund has been established, but has not yet
                been implemented in the financing of water projects.
                J^SS^' SeWCr' and SoUd Waste Management Systems Program
                (WSSW) assistsaties, towns, improvement districts, water associations,
                and counties in financing the construction of facilities for water, sewer
                and solid waste svstems.                                       '
b.      Borrower considerations
        1.      Eligibility - Financial assistance is made available for an elieible project
               by any duly constituted and existing political subdivision of the State
               including but not limited to counties, cities, towns and municipalities,'
               any special purpose improvement district, rural development authority
               and any existing public trust or authority.

       2.      Eligibility costs -Applications for financial assistance under the Water
               Resources Dev. General Obligation Bond Proeram (WRDBP) shall
               be accompanied by an application and review fee equal to the greater
               of: 1) $500, or 2) 5% of the amount of financial assistance requested.
       3-& 4'  j^ap'enns/lnterest rates - The Water Dev. Fund Proeram and the
               WSSW offers loans at 5% interest for 10-20 years or deferred loans
               with 10 year deferral and 20 year payment at 5% interest. The Water
               Resources Dev. General Oblg. Bond Program monies are currentlv
               loaned at 7.75% over 30 years. Loans from the Water Resources Cost
               Share Revolving Fund shall be repaid in full at an interest rate up to
               the maximum allowed under Article 19, sec.13 of the State Constitution
               with the repayment term not to exceed fifty years.

       5.       Loan security - The nature and amount of security to be pledged to
               secure the applicant's repayment obligations  to ASWCC include- real
               or personal property and current statement of all outstanding liabilities
               against such properties; an estimate of annual revenues to be
               derived from.the project; and a statement reflectine the availability
               to applicant of reserve or contingency funds which could be used to
               meet actual project costs.

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                               6.       Maximum borrowing amount - The WSSW will not make a loan in
                                       an amount greater than 50% of the total waiter resource development
                                       project cost.

                               7.       Small community exception - None
                                                                        . "•
                               8.       Hardship exception - Under the WDFP lam program, the
                                       ASWCC may approve a loan with no interest charge if the Commission
                                       is convinced that an applicant is financially unable to pay interest.
                                       Eligible applicants   with  "special  needs"  (i.e. high  rates  of:
                                       unemployment,  low  income status, and elderly population)  as
                                       determined by the ASWCC will receive priority consideration in the
                                       application approval process.

                               9.       Refinancing - None

                              10.       Application Process - See IV. Materials available

                              11.       Local financial participation - None required.

                2.      Grants
                       Under the Water Development Fund Program (WDFP) and the Water, Sewer, and
                       Solid Waste Fund (WSSW), the Commission is authorized to make grants for
                       eligible projects demonstrating an exceptional benefit to the State.  Grants may also
                       be approved when the eligible entity cannot, in the Commission's judgement, repay a
                       loan.  The Commission determines  this status through "special needs'' and
                       hardship criteria.

                3.      Rate subsidies -  None

                •4.      Bond insurance - None

                5.      Loan guarantees • None

                6.      Other credit enhancement - None

                7.      Technical assistance • None

        C.      Fund accounts
                For every bond issue, two large accounts  are  formed.  One account, the Construction Fund
                Account, is the large account from which each loan is made. The second account, the Collection
                Account, is set up to receive interest and repayments from outstanding loans used to retire the
                bonds to the state.

        D.      Evaluation of program effectiveness
                The ASWCC submits evaluation reports detailing the program's projects and loan and grant
                recipients to the legislature for the biennial session. The ASWCC must submit legislative audits
                each year for review.

        E.      Private sector participation
                Thus far, two projects have involved the upgrading of privately owned water distribution systems.
                The ASWCC  gains  ownership of the facility, provides funds  for  the construction, and
                subsequently transfers the systems to the city/county jurisdiction.

        F.      Program issues or problems • None

IV.     Relation to  Federal Programs and Legislative Proposals - None

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 V.      Recommendations to Other States
VI.     Materials Available

        A.      Enabling legislation

        B.      Rules and regulations

        C.      Application package

        D.      Annual report

        E.      Other

MI.     State Contact

        Mr. David G. Meador
        Chief, Water Resources Development
        Arkansas Soil and Water Conservation Commission
        101 E. Capitol. Suite 350
        Little Rock, AR 72201
        (501) 682-3978  FAX (501) 682-3991

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                              California Department of Water Resources
                                            Summary
The California Department of Water Resources administers the California Safe Drinkine War^
Program which prowdes state loans and grants for the construction, improvement, or rXuitation

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                              California Department of Water Resources
                                     Program Annotated Outline
I-      Program Description
       The California Department of Water Resources administers the California
              Organization

              1.      Scope
                      The California Department of Water Resources (DWR't offers state loan* fhm,,»», 5rc
                      loan programs to eligible entities for the financing of domesticwater«££,?£^
                      comph'ance with federal and state drinking watef stand" i       ***** '° CDSUre
              2.      Agencies involved
                            o               pan
      B.      Establishment
              1.      Options initially considered
                     The CSDWBL of 1976 was enacted in response to anticipated need for the State
             2.      Political and legal considerations

                     SeSSS? S!fC D??dng T^ B°Dd UW (CSDWBL) is established under the
                     general terms and conditions of the State General Obligation Bond Law.

             3.      Statutory and constitutional restrictions
                           Regulations and the 1986 Tax Reform Act.

             4.      Subsequent program modifications
                    The program initially made loans up to $1.5 million per entitv The CSDWBI nf IORA
                    revised the program to allow up to $5 million in loL to SibTe eSkfe^A
                    modification ,« the proposed 1992 Bond Law would restrict sfate funding to S5 000 ner
                    service connection.  Currently, there is no limit to funding per connection.      ^

             5.      Future picture
                    The State's ability to issue and service general obligation bonds is limited If aooroverf
                    £e California Safe Drinkmg Water Bond Law of 1992 would provide « SddtSfiS
                    mdhon for purposes of financing safe drinking water and drought  relief >ograms

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 IK
Administration

A.
               Staff size/SUH mix
               The CSDWBL program is administered within the Bond Financing and Administration >
               in the DWR, which is staffed by 12 full-time equivalent employees. DHSSSTdivided
               ^Tnwi?111"1"^ ^"^Jrtemplpyees from a small headquarters Enancial AssLance Unit
               The DWR provides central financial, administrative, and legal support to the proeram  DHS
               provides for engineering, water quality, and related technical support,,              "

        B.     Administration costs/Operating budget
               T^e DWR Bond Laws limit the State administrative costs to a specified percentage ranguw from
               3% to 5% of bond proceeds authorized by the most recent bond law.  This amount ^shared
               equally between the DWR and the DHS.                                         auurcu

HI.     Operations

        A.      Fund capitalization'

               1.      Funds from previous program - None

               2.      Federal funds - None

               3.      State funds - None
              4.
              5.


              6.
              Bonds/Borrowed funds - The entire assistance program is funded solely through the
              sale of state general obligation bonds. From Bond Laws of 1916,1984.1986 anefl988
              a total of $425 million in bond proceeds has been available for loans and grants    '
              Unused funds from the 1976,1984,1986, and 1988 bond acts are used underine terms
              and conditions of the most recent bond issue.

              Loan repayments/Internal funds - The program does not operate as a revolving fund
              Loan principal repaid and interest  charged is deposited in the State General Fund.  '

              Alternative financing mechanisms - Alternative financing mechanisms, such as statewide
              water use tax and loan portfolio management, are under consideration but are currently
              not in use.
       B.
      7.      Leveraging capability - None

      Forms of Assistance

      1.      Loans

              a.      Program description
                     The DWR's Loan Program offers State loans to eligible entities to finance the
                     construction,  improvement, or rehabilitation of domestic water systems to
                     ensure compliance with federal and state drinking water standards.
                     As of August 2,1991,292 loans totalling approximately $320 million have been
                     made under the CSDWBL programs.

             b.      Borrower considerations
                             1.
                            Eligibility - Eligible applicants must own or operate a public or private
                            domestic water system and be subject to State or county enforcement
                            (a minimum of fifteen service connections).

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                                       .     ap?licant ^ enters mto a contract or a o
                               charged an administrative fee in the amount of 4% of the
                        requested Joan.

                 3.      Loan terms- The maximum term of a loan is 35 years  The term is
                        not to exceed the useful life of the project.            rnetennis

                 4.      Interest rates - Beginning in 1984, interest rates for loan applicants
                        Loan security - Loan security is mainly in the form of dedicated
                        revenues from user fees.  Privately owned systems also record the
                        States hen against real property.  Investor owned utilities need
                        authorization from the California  Public Utilities CommissioT

                6-
                7.      Small community exception - There is no stated exception for small

                                   to!TBr> "* DWR ***** smaa Communities who would
                                                 with the recently enacted drinking water
                8.      Midship exception - The DWR makes no special provisions for
                       hardship cases.  However, if an applicant is determined to be of
                       hardship status, the grant program becomes available.

                9.      Refinancing - None

              10.       Application process - See VI. Materials available.

              11.       Local financial participation - None required

 2.     Grants

        a.      Program description
                All applicants for the CSDWBL program applv for the needed  financial
                assistance in loans. The DWR and the DHS determine the affbriSuSrfSS
                proposed project and economic status of the applicant. Public agencies unabk

                ^SSSSiff     e requeste,d loan finan*ng' may be eu^ble £S£
                up to $400,000. Improvement and assessment districts mav apply sepamelv
                from the parent Astnet Terms, exceptions, and legulaticM- JJ5252
                same as those for loans. As of August 2, 1991, the DWR has made a totalof
                176 grants under the CSDWBL programs totalling approximately $105 Son.

3.      Rate subsidies

        s£e" tSm21g£f STSt ™te °D  *£"* W3S 100% Of the true interest «»t for the
        bt Se IS Ge^haieFrdmtereSt "^ *" ^^ * 5°

4.      Bond insurance - None

5.      Loan guarantees - None

6-      Other credit enhancement - None

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Technical assistance •
The State provides no direct technical assistance through this program   However

     '355'5131106 ma                    "investiSative study" 'oans and grants 'up
                 7.
         C.      Fund accounts
                 There is only one fund administered by the DWR, the California Saife Drinking Water Fund
                 All proceeds from the sale of bonds are deposited into this large general fund for purposes of
                 administering the program.   There are no separate accounts within the  fund, since loan
                 repayments are deposited directly in the State General Treasury.

         D.      Evaluation of program effectiveness
                 The Legislature provides oversight of the program through the enactment of bills authorizing
                 grants to specific public agency applicants, submission of annual reports bv the DWR and
                 periodic review by the Legislative Analyst's Office.                     "          1

         E.      Private sector participation
                 Privately owned water systems are  eligible for financial loan assistance.

         F.      Program issues or problems
                 The State's ability to issue and service general obligation bonds is limited. Demand for
                 assistance far exceeds the availability of funding.  Federal and State enforcement pressures are
                 clearly rising, while the ability of small communities to afford upgrades to compliance anuears
                 to be diminishing.                                                              «*•*"-«" a

 IV.      Relation to federal programs and legislative proposals
         There is no relation of the CSDWBL programs to federal programs or  proposals.

 V.       Recommendations to other states
         The California Safe Drinking Water Bond Law loan and grant program is unique in that there is a
         division of responsibilities between two separate but equal state agencies.  The agencies have maintained
         good relations and have served each other in advisory roles for the scope of their respective affairs.

 VI.      Materials Available

        A.      Enabling legislation

        B.      Rules and Regulations

        C.      Application Package - Available from DHS.

        D.      Annual Report - Available from DWR.
MI.    State Contacts

        Barbara L. Cross, Chief
        Bond Financing and Administration Office
        Department of Water Resources
        1416 Ninth Street
        P.O. Box 942836
        Sacramento, CA 94236-0001
        (916) 653-9497
                                     Peter A. Rogers, Chief
                                     Office of Drinking Water
                                     Department of Hesdth Services
                                     601 N. 7th Street
                                     P.O. Box 942732
                                     Sacramento, CA 94234-7320
                                     (916) 323-6111

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                     Colorado Water Resources and Power Development Authority
                                            Summary

The Colorado Water Resources and Power Development Authority provides financing through
for water supply and treatment facilities, stream flow improvement; dams, reservoir! ^nfa
water wells, and pumping station facilities.  The Authority, established in 1981, receives funds for the bat
programs from the issuance of tax-exempt revenue bonds.  Since the implementation of the Water Suodv
Program in 1988, the Authority has made eleven loans totalling approximately $15 8 million

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                       Colorado Water Resources and Power Development Authority
                                      Program Annotated Outline
         Program Description
         The Colorado Water Resources and Power Development Authority was created ito provide the State with
         a mechanism to finance the construction, maintenance, reparation, and operation of water proiects for
         the protection, preservation, conservation, and utilization of the water resources of Colorado
                 1.      Scope
                        The Colorado Water Resources and Power Development Authority provides financing
                        through loans to localities for water supply and treatment  facilities,   stream   flow
                        improvement, dams, reservoirs, water transmission lines, water wells, and Dumoine
                        station facilities.                                                       r   r  e

                2.      Agency involved
                        The Colorado Water Resources and Power Development Authority
II.
 B.      Establishment

         1.      Options initially considered
                The Authority was created by the General Assembly in 1981 as a political subdivision
                of the State to provide Colorado with a mechanism to finance water projects through
                the issuance of revenue bonds.  The loan program for the financing of water facilities
                was implemented in 1989, and  in 1990, the Water Supply Program initiated the" first
                loans for water development  projects.

        2.      Political and legal considerations
                Projects greater than $10 million funded by the Authority must have the approval of
                the Legislature.

        3.      Statutory and constitutional  restrictions • None

        4.      Subsequent program modifications
                Since the passage of the Safe  Drinking Water Act of 1986, emphasis has shifted from
                financing large water development projects to the greater coordination and utilization
                of existing resources and to the  renovation of the existing water supply infrastructure.

        5.      Future picture
                In the next five years of operation, the Authority expects appratixnately $50 million in
                loan requests for water project financing through the program.

Administration

A.      Staff size/Skill mix
        The Governor  appoints nine  persons,  one from each major river basin in Colorado and one
        from the City and County of Denver,  to serve on the Board of Directors for the Authority
        These appointees are approved by the Senate.  Currently, there are six full-time employees
        including an executive director, who staff the Authority.

B.      Administrative costs/Operating budget
        Operating  expenses for the administration of the  Water Supply Proeriun for the fiscal year
        ending December 31, 1990, were approximately $225,000.

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III.    Operations

       A.      Fund Capitalization

               1.      Funds from previous program - None

               2.      Federal funds - None

               3.
        State funds - At the inception of the Water Supply Program, the Leeislature authorized
        the Authority to utilize up to $9 million of Authority fesources There hav^ bee^o
        additional state funds used in the program.        '
        £5 fo TWCd ?rt ' ^ AUth°rity i™ies Aaa/AAA insured, tax-exempt revenue"
        bonds for the combined amount requested by the pool of borrowers  As of 1QQ1 thl
                                           * ""^ w»»
5
              6.      Alternative financing mechanisms - None

              7.      Leveraging capability -  The Authority currently has a leveraging ratio in -he Water
                     Supply Program of approximately 10 to 1 in terms of loans to^ebt se^a rie^S
      B.      Forms of Assistance

              1.      Loans

                     a.      Program description

                            !,ni^,!;faeAut^ri*e-xec^
                            under the new Financing Program for Small Water Resources Projects  The
                                            01    » 1989 *** tfa*
                                                                       roecs    e
                                    » 1989 *** tfa* Pilose of financing the expansion
                 vn      t   »    MStmg W3ter SUpply facUilies-  The Authorirv hi^fade
              eleven loans totaUing approximately $15.8 miUion for the financing of water
              development projects.                                       s   waicr

       b.      Borrower considerations
                            1.      Ehgibihty - All governmental entities with a population greater than
                                   1000  or a customer  base  greater than 650  are  eligible for the
                                   Authority's loan programs, including  cities/counties,  towns,  and
                                   districts.            -                                   ' -

                            2.      Eligibility costs - Each applicant's pro rata share of the cost of
                                   issuance and bond insurance of the respective bond issue is deposited
                                   into a Cost of Issuance fund. These costs are presently capped at2 9%
                                   of the loan amount with the Authority paying for cost's above this cap!

                            3.      Loan terms - Loan terms range from one year to the life of the facility
                                   Thejnaximum loan 'era is 30 years. Standard loans are usually 20


                                   Interest  rates  - Interest rates on water supply  loans are set at  the
                                   market rate received on the bond issue.
             4.

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                        5.      Loan security - Applicants must pledge either their unlimited taxing
                               power (general obligation) or the revenues from the water system."

                        6.      Maximum borrowing amount - The Authority is authorized to finance
                               water resource projects of up to $10 million in construction costs, witn
                               {he minimum borrowing amount set at $30(3,000.

                        7.      Small community exception -  None

                        8.      Hardship exception - None

                        9.      Refinancing - Refinancing  is offered by the Authority in an amount
                               of up to 50% of the loan request.

                       10.      Application process - See VI. Materials available.

                       11.      Local financial participation - None required.

        2.      Grants - None

        3.      Rate subsidies
                There are two methods in which the Authority provides subsidies for applicants. The
                Authority provides the required debt service reserve fund for the bond which reduces
                the cost of issuance. In addition, the Authority limits the  cost of issuance plus bond
                insurance to no more than 2.9% of the loan amount.

        4.      Bond insurance
                Bond insurance  is provided through  Financial Guaranty  Insurance Corp.  which
                unconditionally guarantees the payment of that  portion of the principal and interest
                which has become due for payment, but has  not been paid  by the Authority by reason
                of default.

        5.      Loan guarantees - None

        6.      Other credit enhancement - None

        7.      Technical assistance
                The Authority offers limited technical assistance to applicants, but assists in the financial
                advisory aspects to the borrower's staff, councils, and boards. This is particularly helpful
                to small entities who rarely issue debt in the bond markets, and who may benefit from
                complimentary loan/grant programs of the state or federal government.

C.      Fund Accounts
        With each bond resolution, the Authority sets up various funds for the administration of the loan
        programs. These funds include the Project Fund, Revenue Fund. Cosl; of Issuance Fund, Debt
        Service Fund, Debt Service Reserve Fund, and the General Fund.

D.      Evaluation of Program Effectiveness
        The financing programs of the Authority are subject to state- annual audit procedures. The
        Authority is required by the legislature to submit an annual report.

E.      Private Sector Participation • None

F.      Program Issues or Problems
        Making local governments more aware of the loan programs offered by the Authority and the
        benefits  under these programs has been one problem the Authority has encountered.

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IV.    Relation to federal programs and legislative proposals
         -"•— ——- ^SWjjg-E1 ?:%pTct"—l~« <=•*»-* » ** »
                         K^SSs^J^-i!?^,?.^^^^*,^
                                ^^
 V.    Recommendations to other States
      subsidized calculation of arbitrage Yebatt

VI.    Materials available


      A.     Enabling legislation


      B.     Rules and regulations


      C.     Application package


      D.     Annual Report


VII.    State contact


      Lester A. Willson
      Finance  Manager
     Colorado Water Resources & Power Development Authority
     Logan Tower Bldg., Suite 620                    '
     1580 Logan Street
     Denver. CO 80203
     (303) 830-1550

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I
                                          Honda State Bond Loan Program

                                       Department of Environmental Regulation
                                                  Summary
                 Honda's State Bond Loan Program, jointly administered by the Department of Environmental
                 the Dmsum of Bond Rnanting, offers funding to local governmental agenciebSteSSSSi
                 SETS rJ^ ^fa
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                                  Florida State Bond Loan Program
                               Department of Environmental Regulation
                                     Program Annotated Outline
I.       Program Description
        The purpose of the State Bond Loan Program is to assist local governmental aeencies in financine the
        construction  of water supply and distribution facilities, storm water control air and water oollution
        control and abatement, and solid waste disposal facilities.                                pvmuuuu

        A.      Organization

               1.       Scope
                       The Department of Environmental Regulation (DER) and the Division of Bond Finance
                       of the Department of General Services (DBF), in conjunction with each other are
                       authorized to make loans to any municipality, county, district, or public authority to
                       finance or refinance the construction of water supply and distribution facilities water
                       treatment facilities, water pollution abatement, and other eligible facilities.

               2.       Agencies involved
                       Three State agencies participate in the approval of each State Bond Loan  The DER
                       has the authority to approve or reject the proposed projects. The Division of Bond
                       Finance (DBF) of the Department of General Services determines the amount of the
                       loan to be  made and the issuance  of State bonds to supply this amount  The State
                       Board of Administration determines the sufficiency of each proposed bond issue and
                      administers debt service on the bonds.

       B.       Establishment

               1.      Options initially considered
                      The State Bond Loan Program was established in 1970 in order to complement the
                      current federal construction grants  program.

              2.      Political and legal considerations
                      The State  Board of Administration,  consisting of the Governor. Treasurer  and
                      Comptroller, gives the formal approval of the loan and executes the State Bond'Loan
                      Agreement  to issue bonds to fund the projects.

              3.      Statutory and constitutional restrictions
                      Current legislation specifies that the two State agencies administering the proeram the
                      DER and DBF, may issue up to but not exceeding $300 million  of Pollution Control
                      Bonds to finance water and other eligible projects in each fiscal  year.

              4.       Subsequent program modifications
                      After the establishment of the program in 1970. the  scope of elieible  projects was
                      expanded to include drinking water and storm water facilities. The annual funding limit
                      has been raised from $200 million to $300 million per  fiscal year.

              5.       Future picture
                      Funding sources for State  construction projects have been diminishing in the last
                      several years. It is expected that as the sources become limited, requests for state loan
                      assistance will increase.

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1
                      II.     Administration
                             B.
 Staff size/Skill mix
 The Department of Environmental Regulation (DER) and the Division of Bond Finance
 Department of General Services (DBF) jointly employ approximately ij»
 permitting, compliance, engineering,  environmental, bond  development, and
 support. However, only about five full time employees are required to administe
 progTciin.

 Administrative costs/Operating budget
 Approximately $200,000 to  $300,000  is incurred in operating expenses  per year in the
 administration of the State Bond Loan Program.                             y
                     HI.     Operations

                             A,     Fund Capitalization

                                    1.      Funds from previous program - None

                                    2.      Federal funds - None

                                    3.      State funds • None

                                    4.      Bonds/Borrowed funds - The entire loan program is funded throueh the issuance of
                                            State Bonds. A total of $485 million in bonds have been issued since the inception of
                                            the program. In 1983 the Series N $45 million bond issue was used solelv for stable
                                            w?1t.(rr P"?"1 loans:  At,th? end of flscal year 1991, the Series X bond "issue of $45
                                            million will be used solely for water system improvements.

                                    5.      Loan repayments/Internal funds -  Semi-annual loan repayments  are made by each
                                            loan applicant directly to the State through an escrow account as the bonds mature.

                                    6.      Alternative financing mechanisms - None
                            B.
7.       Leveraging capability - None

Forms of assistance
                                    1.
        Loans
                                           a.
               Program description
               The State Bond Loan Program assists in the financing or refinancing of the
               construction of water supply and distribution facilities, water treatment facilities
               and other eligible projects. At the end of fiscal year 1991, the State Bond Loan
               Program will have funded over $90 million in potable water projects and water
               system improvements.

                       Eligibility - Eligible entities for loan assistance include any Honda
                       municipality, county, district, authority, or agency.

                       Eligibility costs - In each fiscal year, each approved applicant will pay
                       a proportional share of the administrative expense incurred by the
                       DER and DBF while administering and sen/icine the State Bond
                       Program. This amount is not to exce~ed .25% of the~initial loan of the
                       applicant.
                                                   1.

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4-
5.
                                                                       _

                                       Loan security -For loan security, applicants must pledge revenues in
                                       an amount sufficient to maintain a 133% coverage of the estimated
                                       debt service on the proposed loan in each and every year the loan
                                       remains outstanding.

                               6.       Maximum borrowing amount - The annual amount of new loans to
                                       all applicants is limited to a total of $300 million.

                               7.       Small community exception - None

                               8.       Hardship exception - None


                                                          B°°d ^^ PrOgram offers "financing loans

                             10.      Application process - See VI. Materials Available.

                             11.      Local financial participation - None required
               2.      Grants - None

               3.      Rate Subsidies - None

               4.      Bond Insurance - None

               5.      Rate Subsidies - None

               6.      Other credit enhancement - None

               7.      Technical assistance - None
        C.     Fund Accounts
               Immediately upon the sale of the State bonds, the several funds and accounts are established
               and maintamed in the Treasury of the State of Florida for loan distribution. TheselnSSbfe
               ind rh J r? ^tru.ctlo° Trust Fund- B°"
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I
                     V.      Recommendations to Other States
                             Due to decreasing funding available at the federal level for the financing of state infrastructure each
                             state should consider implementing a bond loan program.  These programs fund needed projects at
                             reasonable rates to communities which may not be able to acquire funding at reasonable rates on their
                             own. In addition, limiting the bureaucratic review process for approval of the loans would expedite the
                             funding process and add  a greater incentive for communities to utilize these funding programs.

                     VI.     Materials Available

                             A.     Enabling Legislation

                             B.     Rules and Regulations

                             C.     Application Package


                     VII.     State Contact

                             Mr. Don Berryhill
                             Bureau of Local Government Wastewater Financial Assistance
                             Florida Department of Environmental Regulation
                            2600 Blair Stone Road
                            Tallahassee, FL 32399-2400
                            (904) 488-8163

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                         Georgia Environmental Facilities Authority
                           Water and Wastewater Loan Program
                                          Summary
The Georgia Environmental Facilities Authority (GEFA) was organized in 1986 under the Official Code of
Georgia Annotated with the stated purpose "to assist local governments in constructing, extending, rehabilitatine.
repairing and renewmg environmental facilities and to assist in the financing of such needs by providing fon&
 hrough loans, bonds and other assistance of local governments". The Authority currently manages a $170000 000
tarn fund which makes low cost capital available to cities, counties, and water and sewer authorities throughout

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                         Georgia Environmental Facilities Authority
                            Water and Wastewater Loan Program
                                 Program Annotated Outline
I.  Program Description

    A.  Organization

         1.   Scope
             The Georgia Environmental Facilities Authority  (GEFA) is an agency  of Georgia state
             government with the responsibility of providing financial assistance for all types of water supply
             and wastewater projects for local governments.

         2.   Agencies Involved

             a.   Georgia Environmental Facilities Authority
                  The GEFA is governed by an eleven member board, eight of whom are appointed by the
                  Governor and three who serve ex-offitio. Three of the eight appointees must be municipal
                  officials, three must be county officials and two are appointed from the state at large.  The
                  three ex-officio members are the Commissioner of the Georgia Department of Industry and
                  Trade, the Commissioner of the Georgia Department of Community Affairs, and the State
                  Auditor.                                                    '              —

             b.   Georgia Department of Natural Resources, Environmental Protection Division (EPD)
                  The EPD  performs all environmental project reviews, assesses  significant points in the
                  Authority's Rating and Selection System for applicants, and performs all project construction
                  inspections on behalf of the Authority.

    B.   Establishment

         1. & 2. Options initially considered/political and legal considerations
             In 1983 Governor Joe Frank Harris and the Georgia General Assembly, acting on the 1982
             recommendations of the Environmental Facilities Study Commission, created the Environmental
             Facilities Program and placed it in an existing agency - the Georgia Development Authority. The
             findings of  the study commission identified the widening gap  between local environmental
             infrastructure  needs and the necessary financial resources.   The Georgia General Assembly
             created the GEFA in 1986 and transferred all of the environmental facilities program assets  and
             functions from the Georgia Development Authority to the GEFA.

             Statutory and constitutional restrictions
             In 1986 voters approved in  a statewide referendum the ability of the state  to sell general
             obligation bonds and use the proceeds to make loans to local governments. Statutory restrictions
             limit the use of the bond proceeds for the funding of water/sewer projects only.  Bond funding
            began in the third year of the program.  During the first two years the programs of the GEFA
            were funded by cash appropriations.

        4.   Subsequent  program modifications
            A rating and selection system and a comprehensive credit analysis system were implemented hi
            the second year of the program.

        5.   Future picture
            The  GEFA has received a commitment from the Governor of Georgia, that, starting in August,
            1992, the Authority will receive the proceeds from four $50 million state guaranteed revenue bond
            issues.
3.

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 II.  Administration

     A. Staff size/Skill mix
        The Authority employs eight full-time staff members which include-
        1.  Executive Director
        2.  Assistant Executive Director/Chief Financial Officer
        3.  Principal Accountant
        4.  Accountant
        5.  Project Development Manager (water & wastewater programs)
        6.  Project Development Specialist (solid waste programs)
        7.  Administrative Secretary
        8.  Secretary/Receptionist
        All engineering analysis and inspection of projects are done by the EPD staff.

     B.  Administrative Costs/Operating Budget
        The annual operating budget for the Authority is approximately $550 000  ThP ««;„    „•    «•  u
        operatmg budget is funded by appropriations from the Geo5aSa?LImbly J  ***** °f "*
III.  Operating Funds

    A. Fund capitalization

       1.  Funds from previous program - None

       2.  Federal funds - None

       3. State Funds - The Authority was appropriated a total of $40,000,000 in fiscal vears 1985 and 1986
                                                                                             the


      '
      6.  Alternative financing mechanisms - None
      7.  Leveraging capability - None

   B. Forms of Assistance
      1.  Loans
         a.  Program description

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b. Borrower considerations

   1.  Eligibility - All cities, counties, and water/wastcwater authorities are eligible for fundine
      regardless of project or community size.                   '                     iunumg

   2. Eligibility costs - No application fees or costs were charged  in the first six years of the
      E10?^0^ of.ls&?an<*™*1 1* Proportionately shared by the borrowers of the revenue
      bond funds bennnmcr in 10O5                                                •tvsuue
           bond funds beginning in 1992.

        3. Loan terms
                        Loan Amount          Loan Term

                        $0 - $100,000           Ten Years
                        $100,000 - $500,000     Fifteen Years
                        $500,000 - loan cap     Twenty Years

        4.  Interest rates - Rates have ranged from 53% to 6.8% depending on the interest rate on the
           bond issue furnishing the capital for that year's program. The Authority is committed to
           providing a rate as close to the actual cost of funds as possible. All borrowers are chareed
           the same rate.                                                              vu«uScu

        5.  Loan security - The Authority has no.set loan security requirement, however, all applicants
           are subjected to a comprehensive credit and financial analysis based on projected revenues
           Irom the proposed project and ability to meet the loan schedule.

        6.  Maximum borrowing amount - The maximum loan is $2,000,000.

        7.  Small community exceptions - None

        8.  Hardship exceptions - None

        9. Refinancing - None

       10. Application Process - The Authority has completed six loan application and commitment cycles
          since its beginning. A rigorous multistage process is in place to evaluate loan applications and
          make loan awards. (See IV. Materials available).

       11. Local financial participation - None required.


2. Grants - None

3. Rate subsidies -  None

4. Bond insurance - None

5. Loan guarantees - None

6. Other credit enhancement - None

7. Technical assistance
   The Authority provides technical assistance to borrowers and potential borrowers in the areas of
   system management and financial management. The Authority also provides iaformation concerning
   rates from a comprehensive water and sewer rate data base.

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      C. Fund Accounts
      D. Evaluation of Program EfTectiveness
     E. Private Sector Participation - None


     F. Program Issues or Problems

 IV. Relation to Federal Programs and Legislative Proposals
     --"S^^^
 V.   Recommendations to Other States
VI. Materials available

    A. Enabling legislation - Official Code of Georgia Annotated 50-23.

    B. Program policies

    C. Application package

    D. Annual financial report

VII. State Contact

    Timothy J. Grogg
    Assistant Executive Director
    Georgia Environmental Facilities Authority
    Suite 2015, The Equitable Building
    100 Peachtree Street. NW
    Atlanta. GA 30303-1901
    (404) 656-0938  FAX (404) 656-9792

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                                 Ohio Water Development Authority
                                             Summary
The Ohio Water Development Authority (OWDA) administers loans to Ohio communities for the construction
and enhancement of drinking water treatment facilities, conveyance systems, and water supply facilities. The loan
programs of the OWDA are funded through the issuance of revenue bonds. In 1989 and 1990, the OWDA made
25 loans for water projects through the regular loan program and two loans through the hardship drinking water
program totalling $40.5 million and $138 million, respectively. The OWDA also made twelve planning loans
totalling approximately $2.1 million in the same period.

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                                  Ohio Water Development Authority
                                     Program Annotated Outline
 I.      Program Description
        The Ohio Water Development Authority (OWDA) provides financing to Ohio communities for the
        establishment and enhancement of drinking water and water supply facilities.     ramumues r?r me
e                                            •                                               t
        A.     Organization

               1.      Scope
                      The Ohio Water Development Authority administers loans to local governments
                      for the construction of drinking water treatment facilities, conveyance
                      systems, and water supply facilities.

               2.      Agencies involved
                      All applicants for OWDA's loan and grant  programs must receive technical and
                      enwonmental approval by the Ohio EPA. The Hardship Drinking Water Pr^^anfS
                      jointly administered by the OWDA and the Ohio EPA.                "ogram is

       B.      Establishment

               1.      Options initially considered
                      The OWDA was created in 1968 by the Ohio General Assembly to loan funds to local
                      governments. The program was originally created to provide  the match for federal
                      wastewater treatment grants and was designed largely to aid small communitiesunable
                      to fund on their own.  The initial program was modified in 1974 to include drinkine
                      water projects. The program is now termed the Safe Water Program.      "

              2.      Political and legal considerations
                      The OWDA does not  have the authority to finance projects for a township because
                      townships in Ohio do not have the authority to levy Taxes for  water and
                      thereby not meeting OWDA's eligibility requirements.

              3.       Statutory and constitutional restrictions
                                                                of a bond
              4.      Subsequent program modifications
                     In 1980 the OWDA established planning loans to finance the planning and design of
                     T  «J£atvr ^?Fply and distribution facilities as well as wastewater treatment facilities
                     WAI?!! rr^ est.ablisned the Hardship Drinking Water Program with the Ohio
                     tFA which offers low-interest loans to economically disadvaiitaged communities.

              5.      Future picture
                     In the Spring of 1992, a bond issue in the amount of $50 to S75 million is proposed to
                     fund the regular OWDA loan programs.                               "H^wi 10

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 II.     Administration

        A.      Staff size/Skill mix
        B.      Administrative costs/Operating budget
               The operating budget for the OWDA for 1990 was approximately $987,000.

HI.     Operations
               Fund Capitalization

               1.      Funds from previous program - None

               2.      Federal funds - None

              5
              6.      Alternative financing mechanisms - None
      B.      Forms of Assistance

             1.      Loans

                     a-      Program description
                            proves regular loans at market rates, and the Hardship Drintog Water
                            Program which provides low-interest loans for economically distressed
                            communmes.  In 1989 and 1990, 25 loans for water projects were approved
                            X ^ loj* P^g™ ^tailing approximately $40.5 million.

                            $              P          3ter Pr°JeCtS WCre made t0talHng a

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                 The OWDA  also administers a planning loan program  that assists Ohio
                 communities in financing the planning and design of infrastructure.  In 1989
                 and 1990, twelve planning loans were approved touidling approximately $21
                 million.       •   .      •

         b.       Borrower considerations

                 1.      Eligibility - Eligible entities for loan assistance are local government
                        agencies, cities, counties, and special districts.

                 2.      Eligibility costs - Eligible applicants are subject to an administrative
                        fee of 35% of the construction cost amount

                 3.      Loan terms - The loan terms for the regular and hardship construction
                        loan programs range from 10 to 25 years. The planning loans must
                        be paid within five years or they may be refinanced with construction
                        loans.

                 4.      Interest rates - Interest rates for the regular loan program are set at
                        the market rate obtained at the issuance.  Based on an  economic
                        analysis, hardship loans receive a blended rate between the market
                        rate and the 2% minimum.  All planning loams are set at the market
                        rate.

                5.      Loan  security - As part of the loan agreement, the applicant pledges
                        to maintain user charge rates sufficient to operate the project and
                        repay the loan amount.

                6.      Maximum borrowing amount - The maximum loan offered to any one
                        local government agency by the OWDA is S75 million.

                7.      Small community exception - None

                8.      Hardship  exception  -  For economically distressed  communities,
                        hardship loans are available.

                9.      Refinancing - Refinancing is not available once the applicant has signed
                        the loan agreement.  However, with prior agreement, the OWDA will
                        allow the applicant to finance short term debt and arrange for long
                        term financing after  the construction process is complete.

              10.      Application process - The application process for the OWDA is unique
                       in that, once the project is planned, approved, and ready to' proceed,
                       the applicant signs a "letter of agreement" which  serves as  the loan
                       contract.

              11.      Local financial participation - None required;

2.      Grants
        The OWDA has made  small grants up to $450,000 through the Hardship
        Loan Program for research and development projects to aid Ohio  communities. The
        OWDA has no defined grant program as such and has made  only two small
        research grants for drinking water projects thus far.

3.      Rate subsidies
        The Hardship Loan Program offers below market rate loans to hardship communities.

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                 4.      Bond insurance - None

                 5.      Loan guarantees - None

                 6.      Other credit enhancement • None

                 7.      Technical assistance • None
         C.      Fund Accounts
                                                                          *          ™* a *•
         D.     Evaluation of program effectiveness
         E.      Private Sector Participation
                No privatization projects have been funded by the OWDA.

         f •      Program Issues or Problems





 IV.     Relation to Federal Programs or Legislative Proposals - None

 V.      Recommendations to Other States - None at this time.

 VI.     Materials Available

        A.      Enabling legislation

        B.      Rules and Regulations

        C.     Annual Report

        D.     Application Package


VII.     State Contact

        Ronald M. Shankman
        Controller
        OVVDA
        Suite 1425 Le Veque Tower
       50 West Broad Street
       Columbus, OH 43215
       (614) 466-5822

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                                  Oklahoma Water Resources Board
                                              Summary
The mission of the Oklahoma Water Resources Board
loans and grants from bond proceeds to qualified entiti
or to refinance : existing indebtedness related to
84 loans and 241 grants totalling $90,139,540 and $14,898,195, respectiwly

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                                Oklahoma Water Resources Board
                                   Program Annotated Outline
I-      Program Description
       (FAP) administered by the Oklahoma Water RcsonirceTBoard.3  ****  -mancial ^^ance Program

       A-     Organization

              1.      Scope



                     exisung indebtedness related to water systems. The Board's maS accoun?
                     £ I«±? f       Development Revolving Fund, provides the sounSof funds for
                     the Board s loan programs and emergency grants.
                    Agency involved
                    The Oklahoma Water Resources Board
      B.     Establishment
                    Opt'ons initially considered/Political and legal considerations
                    ^"foSS^ P"""6 of to6 Board's Financial Assistance Program (FAP) was formed
                    in 1979 with the passage of SB 215. This bill authorized the OWRB toTuel^mS
                    ass                       -** - -
             3.      Statutory and constitutional restrictions
                    The OWRB can not lend financial assistance to cities in Oklahoma
                    statutes. Applicants eligible for assistance are counties. iwtJr^
                    public works authorities, school districts, rural water, sewer and

             •1.      Subsequent program modifications
            5.     Future picture
                   After the available funds from the $50 million bond issue in 1989 have been exhausted.
                                             ^ ^ be requested- Aaatbef t— £S£t

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1
                            Administration

                            A.      Staff size/Skill mix
                                    The. OWRB's Board consists of 9 members appointed by the Governor for a 7-year term with
                                    the advice and consent of the Senate. One member is appointed to renrewnr ~£L
                                                .
               the Congressional Districts as they existed in 1957, with
               staff of seven administers the OWRBFAP
               within the agency. The staff consists of
               extensive experience in water and sewer projects as well aTin the financial!

        B.      Administrative costs/Operating budget
               For fiscal year 1991, the OWRB's actual expenditures in the Planning
               were approximately $605,061. TTese funds were generated «JSSK

HI.     Operating Funds

        A.      Fund capitalization

               1.      Funds from previous program - None

               2.      Federal funds - None


               3'
                                          fn^lSS" I* " ^ m *?£* investme,.nt m sccuring Oklahoma's water development future
                                          in 1982 the Second Session of the 38th Legislature appropriated $25 million from

                                          JHSUrt T  *? ^^  StatCWide  Water  ^elopment  RevolvVng
                                          SWDRF^'        g       8nm Pr0gram COmCS fr°m the interest Darned on
                                  4.      Bonds/borrowed funds
                                          There have been three major OWRB bond issues since the program's inception-  two

                                                          011     ^ 1985' 3nd N°VCmber 14' 1989< m(1 » $41'65           °
              5"
                                          J^Tf5™611!:57111116"1^1 ^A' L°an  reP"y»«its are  in the form of revenues
                                          collected from the operation of the projects. These payments are used to
                                          retire the bonds of the respective bond issue.
                                  6.      Alternative financing mechanisms - None

                                  7.      Leveraging capability
                                         The OWRB currentiy applies leveraging to its bond programs.

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B.     Forms of assistance

       1.      Loans

               a.      Program description
              b.     Borrower considerations
                     1.     Eligibility - Eligible projects for financing include anv project related
                            to water system improvements or refinancing of the^pro^i such
                            Sd  ™rr ^ 'eservoirs' Borage tanks, water treatment system^
                            and  water  dismbution systems.  Eligible  entities are  political

                                                                 towns' «
                     2.      Eligibility costs - Loan applications for the water programs

                            £1^*5^SS?SS£'"""Bomi"""

                     3.      Loan terms - Currently, loan terms range from 6 months to 28 years.

                     4.      Interest rates -  Each loan applicant has the option of either a fixed
                            or variable rate loan.  The interest rate for loJos are determinedby
                            the current 6 month period, as bonds are being re-marketed every 6
                            months.  Loans may  also be closed at a fixed rate of interest or
                            converted to a fixed rate subsequent to closing. Interest rates onloads
                            have averaged approximately 5.997% since Sept. 1,1986. The currenl
                            interest rate for the 6  month period ending February 29, 1992,


                    5.       Loan security - The borrower is required to capitalize, at loan closing.
                            a debt service reserve of approximately 10% of the total loan amount!
                            In addiuon^ project revenues  and other forms of operational revenues
                            are pledged as security. A mortgage may also be obtained as security.

                    6.      Maximum borrowing amount - There is no limit on the amount of a
                           loan per applicant.

                    7.      Small community exception - None

                    8.      Hardship  exception - None

                    9.      Refinancing - None at this tune.

                  10.      Application process - See VI. Materials available.

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       11.       Local financial participation - In order to achieve the maximum benefit
                from the funds avadab e, the Board encourages applicants to provide
                the largest amount of local participation possible, so that the
                Board can help a greater number of applicjints.
Grants
a.
                 Program description
                 Many smaller entities with aging water and sewer system simplv cannot afford
                 the costs associated with replacement or renovation. The OWRB Emeraencv
                 Grant Program is designed to rescue the state's small communities from
                 financial crises posed by dilapidated systems, advense weather, and a weak
                 economy The OWRB has been authorized to make grants to eligible projects
                 5S-S51, * £ August 10j  1?S?41 **"* totauine  iUiSS
                 $14,898195 have been approved.  Funding comes from interest earned on
                 monies in the Water Development Fund.                      c«micu un
       2.

       3.


       4.


       5.

       6.
         b.      Grantee considerations

                1.      Eligibility - Qualified entities include all political subdivisions of the
                        state, special purpose districts, public trusts, and water and sewer
                        districts.

                        Eligibility costs - None

                        Grant terms - All applicants must comply with OWRB Rules and
                        Regulations.

                        Grant monetary limits - No more than $100,000 may go to a qualified
                        applicant during any fiscal year.

                        Small community exception • None

                        Hardship exception - There is no stated hardsliip exception, however
                        in order to administer  the Emergency Grant Program, the Board
                        adopted a grant priority system based on hardship. The basis of the
                        priority formula has been developed from the enacting legislation. The
                        two primary statutory criteria are: first, a grant can only be approved
                        in case of an emergency, which is defined as a life, health, or property
                        threatening situation; second, a grant can only be awarded when the
                        applicant cannot reasonably finance the project with  out assistance
                        from the state.

                       Application process - See VI. Materials available

                       Local participation  -  Local participation is not  required,  but
                       encouraged. The amount of funds available for grants is limited, thus
                       more priority points are awarded to the applicant with the smallest
                       grant amount requested.

3.      Rate subsidies - None

4.      Bond insurance - None

5.      Loan guarantees  - None
      7.

      8.

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                 6.      Other credit enhancement • None

                 7.      Technical assistance - None

         C.      Fund Accounts
                 There is one main fund account, the Statewide Water Development Revolving Fund,

         D.      Evaluation of program effectiveness
                 Under the provisions of 82 O.S. Supp. 1986  the OWRB » M.  . j
                 OkUnon* Ugi^ a proposa, JJfS SS^              "*"*'" ""

         E.      Private sector participation - None

         F.      Program issues or problems - None at this time.

 IV.     Relation to federal programs and legislative proposals
                  *•"   4      	™ ••»-• • vr*««r*vu *TQfcbi L/J 1
               r supply storage contracts between the
        are necessitated by the declining federal role

 V.      Recommendation to other states - None at this time.

 VI.     Materials available

        A.     Enacting legislation

        B.     Rules and regulations

        C.     Application package

        D.     Other

VII.     State Contact

        Walid T. Maher. Chief
        Planning & Development Division
        OWRB
       600 N. Harvey Ave.
       P.O. Box ISO'
       Oklahoma City, OK 73101-0150
       (405) 231-2621

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                          PENNVEST
       Pennsylvania Infrastructure Investment Authority
                           Summary
1^2ta!tt9S* Mrasl^auze  Investment Authority (PENNVEST)
created in 1988 to  provide loan assistance to  Pennsylvania wat" su
systems, both public and private.  Initially capitalized^^ Son doEs
m appropriations and loans,  PENNVEST has made loans totattb
nulhon through fiscal year 1990.  As lenders to water supply

            to provide nearly **
r^m^r pwas 10 provwe nearly soo million in revolving funds at subsided
interest rates of one to six percent. Additionally, PENNVEST operate!;!
small grants program for economically disadvantaged commSties^

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                                         PENNVEST
                     Pennsylvania Infrastructure Investment Authority
                                Program Annotated Outline

I.   Program Description
    The Pennsylvania Infrastructure Investment Authority (PENNVEST) is a r»«r.i«n« it.,
       Organization
       1.  Scope
         ,:^^^Tis ,an indePendent state agency with the responsibilitv of
                : through
       systems.
      -.  Agencies Involved
            Office of the Budget          •  Department of Community Affairs
                                       *  Department of General Services
  B.  Establishment

      1.  Options initially considered
         135 outstanding loans have been absorbed by PENNVEST.                 eliminated and the

     2.  Political and legal considerations
     3.  Statutory and constitutional restrictions
     4.  Subsequent program modifications
         There have been no major modifications to the program since 1988.

     5.  Future picture
         The authority plans to spend the initial $1 billion in funding in about six wan thn. .   »•

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 H.  Administration
A.  Staff size/Skill mix
    Pennvest's current staff size is 19. There are 4 Project Specialists with
    government finance. Top officiak have extensive t^^S
    have skills  in finance, government operations, andrelated fiekfc
    performed by the State Controller, Tr^asurerand the Bu^et Office

B.  Administrative Costs/Operating budget

                                                              *«
                                                                                     A  L  •
                                                                                     Au^onty
III.  Operating Funds


   A.  Fund capitalization

        Pennyest began in 1988 with anticipated funding of over $990 million with sources including
    appropriations, grants and relocations, and voter approved bonds.                  including


       1.  Funds from previous program

          $?SlmmioinbOIld aUthorization from ^ Water FadUties ^an Board, the previous program, totaled
                                                                    the
       2.  State funds

          Direct state appropriation to the program was $25 million.  In
          totaled $150 million.  Grants are funded through general fund
   3.
          Bonds/Borrowed funds
                                                  najio° h siate
      4.  Loan repayments/Internal funds
          The PENNVEST Fund includes repayments of revolving loans, appropriations from the
                               SSr1 on revp^ *r? investnient !-««.««« the irof
                               RedemP»°° Fund includes payments of non-revolving loans and
      5.  Alternative financing mechanisms - None


      6.  Leveraging capability

         Leveraging capability consists of revenue bonds for state loan programs.

  B.  Forms of assistance

      1.  Loans

         a.  Program description

             The first loans were approved in June, 1988. Through the end of fiscal vear 1991 the tot- d lnan
             amount was $436 miUion for 259 water supply systems.  Projects withCpkted Ta

                    "^!i? 3t — 0f/OUr yeafly Board mcetinss- FundinS » Provided b^=d on a
                    on the priority list developed by the staff.

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      b.  Borrower considerations


          (1) for fondbg^ OWDCr °f OPCrat0r °f "* drinking W3ter System' Public or P^ate, is eligible


          (2) SSSS? " *pplicants « fsfcfc for UP to 10°% of project costs, including planning
             and engineering, however, no refinancing or repayment of previous expensesTp^ISttei

          (3) Loan terms - The maximum life of most loans is twenty years.


                          ^
                            County Unemployment
                                 as percent of      First Five Years    Remaining Term
                             Statewide Unemployment
>140%
100%-140%
,<100%
Bond Issue Rate
*m.w* waL
30%BIR
60%BIR
interest
25%ofBIR*
60%BIR
75%BIR
(5)
                     1^ " ^ t*^? * established d*00^ a Joan agreement between PENNVEST
             en n0mTg "^ However, PENNVEST may require additional securirv &Sm^
            hen on user charge revenues, guaranty of municipality, or municipal taxing powe?
            For multi-community applications, the loan agreement will be with a single borrower bnt
            inter-junsdicuonal agreements must be in place prior to loan approval    °°"OWet' bnt

        (6) Maximum borrowing amount - Loans are limited to $11 million per project   When two
            communities are involved the cap is raised to $20 million and  o/wTlT8 " PEN*VEST ^ not Pr™de refinancing for projects under construction
            a -taJ^S!    • l?e'*m fmandng *C*dy arranged ^ Board mav hoSS
            loi L app°oveTJ      m CmergeDCy SUUaUOnS l° aU°W constructi°n '0 begin befor

        (10)Apph'c?tion process - See  VI.  Materials available

        (ll)LocaJ I financial participation - Up to 100% of project financing is available  however
            Board may also require local financial participation from communities !a!55S
2.  Grants
    a.  Program description
       The first grants were made in fiscal year 1989. Through fiscal year 1990, 83 grants t
       mdhon have been made._ pperations 'are available only on a hardship basis.
       funded by direct appropriations by the state legislature

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          b.   Grantee considerations

              (1) Eligibility - Grants are available to economically depressed cpmmwnides with no reasonable
                 expectations of repaying a loan.  The  Board may examine such featuresL'   meS
                 household income, existing and anticipated user fees, financial condition of the'atrolicanL
                 5?±r±± CCOn°miC C°nditi0nS °f "* «•*«• "d «* of aPPU«"< ^«cure
             (2) Eligible costs - The grant may cover up to 50% of project costs.

             (3) Grant terms - None

             (4) Grant monetary limits - The maximum grant award is $500,000 or 50% of project costs
                 whichever is lower.                                                   i»vicw costs,

             (5) Small community exception - None

             (6) Hardship exception - The grant program is available only to hardship communities

             (7) Application process - See VI.  Materials available

             (8) Local participation - None required

     3.  Rate subsidies - None

     4.  Bond insurance - None

     5.  Loan guarantees - None

     6.  Other credit enhancement - None

     7.  Technical assistance • None

 B.  Fund accounts

    1.   Fund description
        PENNVEST individual funds follow the original source of revenues with relevant restrictions
       applied.

    2. Interaction between accounts
       Inter-fund borrowing is allowed for cash-flow needs.

C. Evaluation of program effectiveness
    PENNVEST is seen as a highly effective, very popular program especially among small communities.
E. Private sector participation
   $40.6 million in funding was provided for 63 private projects, involving privately owned drinking water
    faohties and water distribution companies. Private investment in 13 PENNVEST projects has totaled
    X766 million. Other government aid to these projects totaled $11.7 million.
F.  Program issues or problems
    At the end of the Authority's 25 year planned fife, $2.4 billion in identified infrastructure needs will
    oe unfunded. Additional money now would help fund those needs.

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  ™- ReJ?Jf ?n *° federaj Programs and legislative proposals
  V.  Recommendation to other states


 VI. Materials available
     A.  Enabling legislation
         Pennsylvania Infrastructure Investment Authority Act, Act. No. 1988-16.
     B.  Rules and regulations
         Ch^erlg ^"^ <— °< A«hority Fmanclal Assistance:  Regulations Title 25, Pan VI,
     C.  Application package
         Pennsylvania Infrastructure Investment Authority Financial Assistance Application
     D.  Annual report
         PENNVEST: Clean Water for a Better Pennsylvania  1989-90 Annual Report.
    E.   Other
VII. State contact
    Tom Kelchner
    Public Information Officer
    PENNVEST
    22 S. Third Street
    Harrisburg, PA  17101   (717) 787-8137

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Texas Water Development Board
          Summary
     fron""Waler ••"* Accom of *

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                              Texas Water Development Board
                                Program Annotated Outline
I.      Program Description

       A.     Organization

              1.      Scope                                            ''
                     The Texas Water Development Board (TWDB) has two principal functions-  1)  to
                     provide financial assistance for the planning, design, and construction of water soppfe
                     and regional water faoUties, and 2) to collect basic hydrologic data, perform SS,
                     ofwater resources of the state, and plan for the long-term water resourced?*


              2.      Agencies involved
                     The Texas Water Development Board

       B.      Establishment

              1.      Options initially considered
                     The State's  plan for an agency  that would oversee the development of its water

                     B^nd g* * TK W^dCgislative 3Ct «-ttd the Texas Water l££££
                     Board and I authored the TWDB to administer a Water Development Fund ofS200
                     SS £ ,  Pn ? i commumu" devel°P ™« Applies.  The amendment created the
                                                        31 revolviag *- to
                    Political and legal considerations
                    The Texas legislature must approve additional bond authorizations in the form of an
                               *Dtata- Fou°wtag "•'**•
             3.      Statutory and legal constrictions
                                                        **
             4.      Subsequent program modifications

                    rnrS«r-f ^T ^"^ WCrC extended  to  ™lude non-profit  Water Supply
                    Corporations and abond msurance program was established.  In 1987 legislation^
                    passed to give the TWDB authority to issue revenue bonds. In 1989 the TWDB wit
                    given  the audionty  to finance retail water  distribution  lines  and estabush ti£
                    Economically Distressed Areas Program (EDAP).                  esiaousn tne

             f-      Future picture
                    Major goals of the TWDB include: to finance 75% of all of Texas' annual water
                    SSCfStl° ^^ fand?8 °D rCSearch Which enhances operation of water systems!
                    and to develop comprehensive  management  information svstems which provide
                    managers with appropriate  data on research and development for better decision

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II.
Administration
        B.
        Staff size/Skill mix
        The  TWDB  is  composed  of  260  individuals,  of  which  26  are  engineers.  29 are
        hydrologists/geologists, eight are financiers, three are attorneys, and eight arelccountanti  The
        remaining personnel consist of executive and support staff.  Generally the fields of exnertise
        represented include: engineering, hydrology, geology, economics, finance, law, and accounting
        New employees are trained by the Board Staff.                *                v^.,*..^.

        Administrative costs/Opemtiog budget
        For 1991, the operating budget totals  $11,400,018.  This budget  is funded in part by state
III.
Operations
               Fund capitalization
               1.

               2.

               3.



              4.


              5.



              6.

              7.
               Funds from previous program - None

               Federal funds - None

               State funds - The TWDB administers the Water Assistance Fund (WAF), which was
               created in 1981, with an initial appropriation of $40 million.  The Economically
               Distressed Areas Program (EDAP) had an original appropriation of $10 million.   '

               Bonds/borrowed funds - Since 1957, seven amendments have been approved authorizine
               the issuance of up to $2.48 billion in Texas Water Development bonds.        -^

               Loan repayments/Internal funds - Loan repayments in the Water Assistance Fund are
               used to make additional loans. Loan repayments in the Water Development Fund
               are used to pay debt service on Water Development  Bonds.

              Alternative financing mechanisms - None

              Leveraging capability - The TWDB has the authority to apply leveraging to its revenue
              bond programs and is currently studying the feasibility of doing so.
      B.      Forms of Assistance
              1.
              Loans
                     a.
                     Program description
                     The TWDB manages several major funds that offer fbancial assistance to
                     localities for the planning, design, and construction of water supply and regional
                     water facilities. Two of these funds are the Texas Water Development Fund
                     and the Water Assistance Fund. Under the WAF, the TWDB administers the
                     subfund, the Water Loan Assistance Fund which is used to finance construction
                     of the same water supply projects the Board has traditionally financed from
                     the Water Development Fund. Another subfund was created within the WAF
                     in order to fund water projects for hardship cases, the Economically Distressed
                     Areas Program (EDAP).  As of June 1,1991, the TWDB has made 15 WAF
                     loans totalling $15,809,000, and 360 loans totalling $501,782.013 from the Water
                     Supply Account within the Texas Water Development Fund.

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  b.      Borrower considerations
         1.      Ehgibdity- All applicants must be either political subdivisions or non-
                 profit Water Supply Corporations of the State of Texas. Applicants
                 to the Water Assistance Fund and the Water Supply Account must
                 quahfyunder one of the  following conditions:  the applicant is a
                 hardship issuer; the project involves ti?e conversion from ground to
                 surface water; or the project is regional in nature. EDAP applicants
                 must be located in an affected county in an economically distressed
Grants
                 area.

                 Eligibility costs - None
         3.      Loan terms - The maximum loan period allowed by law is 50 vears.
                However, the Board of the TWDB generally limits loans terras to
                twenty years.
         4"      ^™l rates " The mterest rate « based uP°n ike  rate that the
                TWDB attains when it issues bonds, plus fiftv basis points- subiect to
                change at the discretion of the TWDB.     '

         5.      Loan security - Applicants must offer a security pledee in the form
                of taxes,  system revenues,  a combination of both, "or contracted
                revenues.

         6.      Maximum borrowing amount - 100 % of eligible  project costs.

         7.      Small community exception - None

         8.      Hardship exception - For the Water Supply and WAF, an applicant
                may apply based on the assertion that it  could not borrow project
                funds at a reasonable interest rate without TWDB  assistance. EDAP
                applicants arc assigned an interest rate based on their ability to repay
                the loan amount.

        9.      Refinancing  - The TWDB's water loan  programs can be used to
                refinance debt where there is a substantial benefit to the applicant.
        10.     Application process - See VI. Materials available.

        11-     Local financial participation - EDAP applicants must offer •<
               match of the costs of the facility engineering plans, of which
               be cash and the remaining 50% may be in-kind services.
a.      Program description
        Under the Water Assistance Fund, the TWDB created a subfund, the Research
        and Planning Fund, which was established to provide 50% grant funding for
        water research and regional water supply plans. The TWDB's grant program
        involves both matching funds and solely grant assistance to help qualified local
        governments, utilities,  and  research entities in the development of regional
        water feasibility studies-and water-related research studies. The grant program
        has operated since December 15, 1982.  As of May 1, 1991, there have been
        48 water-related research grants totalling $7,782.019, and 81 regional water and
        wastewater feasibility study grants totalling $6,214,070.

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          b.      Grantee considerations
                          EhgibElity - Applicants for Regional Water Feasibility Grants must
                          demonstrate a need for funds, must have legal auSorirTto Sal
                          develop and operate the regional utility, and mi invoke one or more*   -
                          political jurisdictions or service areas. Applets for Water ?.*—
                          Research Grants must also demonstrate a need  for fund.
                          contribute to the enhancement of practical knowledge i
                         going relevant studies.
                         5S?*JSf" ; FM *" TWDB gmit pr°8riluns' •« r^vant study,
                         travel, and materials costs, except those abated with pemS
                                                        ro
                 3-
                         provide 50%  matching  local funds  or in-ldwd services, except for
                         hardshiPcases,developandimplementwater«mervationanSouJh[
                         management plans, and must notify neighboring political jurisdictions

                         the TWDB provides up to 100% of funding.        *""    """*'

                 4.       Grant monetary limits - None, except  two biennial spending caps
                         unposed the by Texas Legislature, which are typically in the^aS
                         $2 million over the biennium.                             *

                 5.       Small community exceptions - None

                 6.       Hardship exceptions - The Board may approve up to 75% of total
                         regional planning costs if all of the foUo\wng provisions are me°  S
                         unemployment rate exceeds 50% of state average,  and  per capita
                         income for the last reporting period is less than 60% of statVaverage.

                 7.      Application process - See VI. Materials available.

                 8.      Local participation - Research and Planning Grants are 50-50 matehine
                        grants where the applicant must provide the second half.


 3.      Rate subsidies

        S nDE? PfovidK"rale subsidies J°EDAP applicants that can demonstrate that they
        do not have the ability to pay for their proposed loan at the TWDB's standard rite
        The applicant is assigned a lower interest rate that reflects an  annual debTseSce
        payment that residents are capable of paying.

 4.      Bond insurance
        The TWDB is authorized to pledge up to $250 million of the full faith and credit of the
        state to insure up to $500 million of bonds issued by political 5 ubdivisions. The amoum
        of insurance extended by the TWDB is limited to $100 million  per fiscal year  ThTSf
        is in the process of implementing the program.

5.      Loan guarantees - None

6.      Other credit enhancement • None

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              Technical assistance
                7.
                                    10
C.     Fond Accounts
                       SET** bfo™au°° 10 S ^ ph3T4S3SSS5
        D-     Evaluation of Program Effectiveness
               Periodically the TWDB is subject to Sunset review by the Texas Legislature.

        E.     Private Sector Participation
        F-      Program Issues or Problems
                                                              bonds I0
 rV'.     Relation to Federal Programs - None

 V.      Recommendations to Other States
                                                                     to o- '   conventional
VI.    Materials Available

       A.     Enabling Legislation/Rules and Regulations

       B.     Application Package

       C.     Annual Report

       D.     The Agency's Strategic Plan and TWDB brochure

VII.    State Contact

       Craig D. Pedersen
       Executive Administrator
       TWDB
       1700 N.  Congress Ave
       P.O. Box 13231 Capitol Station
       Austin. TX  78711-3231
       (512) 463-7847

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i

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          Washington State
      Public Works Trust Fund
             Summary
of low-toes, sUtt k                              SyaCm' '



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 II. Administration

    A.  Staff Size/Skill Mix
        The thirteen members of the Public Works Board possess a wide ranee of exnerienc,   A »  ,    •
        functions are provided by the DCD.            ^^        acvwopment, and technical  assistance

    B.  Administrative Costs/ Operating Budget

        IS*™ hST"* *"* aVaJU"*° "" IO" P'°gran" 80K — * — a-tai^radv. cosu

III. Operating Funds

    A.  Fund capitalization

       1.   Funds from previous program - None

       2.   Federal funds - None

       3.   State funds -  All three loan programs receive their funding from the Public Works Trim
           Trust Fund is capitalized with dedicated revenues from taxes on water sewer and 2f»
           and from a portion of the real estate tax. These revenues are collec ed StosSSfa
           Worte Assistance Account which is managed by the State Treasurer. Durine fS
           PWTB received approximately $353 million in dedicated revenues.              *

      4.   Bonds/borrowed funds - None

      5.   Loan repayments/Internal  funds - Repayments of past trust fund loans are recvded to fund
                                                                 revM1KS

      6.  Alternative financing mechanisms - None

      7.  Leveraging capability - None

  B.  Forms of Assistance

      1.  Loans

          a.   Program description
              The Public Works Trust  Fund  (PWTF) consists of three  types of loan
              Construction Loan Program, 2) Capital Improvement Loan ProgVam, tJy

              SES  1°  f   St fiVC 10aD C|dcs (yCars) °f Pr0gram
              offered to local governments totaling over $135 million

             **  Construction Loan Program - This is the standard loan program that offers low intere
                 JSc %£%£? laCement' rehabilitation' — tru'ctio?, or improvfm^f SgTb
                 Sa£a- Impr.ov5?cnt Plaani°g - As an incentive to local jurisdictions to expand the use
                 nrJS   C3P "   ""P™""6?' Planning. ^e  Board has recently adopted a propose
                        .«f°. .mt.erest  oans for long-term capital planning.  These loans are kvauaWe to

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                                       Washington State
                                   Public Works Trust Fund
                                  Program Annotated  Outline
I.  Program Description
   The Washington State Public Works Trust Fund (PWTF) is a multipurpose infrastructure funding program
     It emphasizes local government self-sufficiency, comprehensive planning, and allomion according ro local
     management effort as well as severity of need.

    A. Organization

       1.   Scope
            The PWTF offers low-interest loans for the repair, replacement, rehabilitation, reconstruction, or
            improvement of eligible public works systems to meet current standards and to adequately serve
            the needs of the existing population.  Eligible project categories cover most public works systems,
            including domestic water.

       2.  Agencies Involved

           a.  The PWTF consists of a thirteen member Public Works Board (PWB) which directs the
               offering of loans from this state revolving loan fund.

           b.  The Washington State Department of Community Development (DCD) annually  invites all
               Washington cities, counties, and special purpose districts to apply for low interest loans drawn
               from the PWTF.   Applications are reviewed by the DCD, PWTF, and the Washington
               Legislature  for approval.

   B.  Establishment (1985)

       1.& 2. Options initially considered/political & legal considerations
           The PWTF grew out of a 1982-3 statewide survey of Washington State infrastructure needs
           that pointed to serious gaps in the state's financing of infrastructure.  These findings prompted
           the Legislature to direct the Department of Community Development (DCD) to       preparea
           plan for replacing and repairing local public works holdings. DCD's subsequent report
           •Financing Public Works: Strategies for Increasing Public Investment", provided the deskn for
           the PWTF in 1985.                                                            ^^

       3.   Statutory and constitutional restrictions
           In order  to  prove its commitment to capital financing, a local government must  meet two
           requirements before it can be considered for a loan.  First, the locality must levy at least a 0.25
           percent real estate excise tax earmarked for infrastructure spending.  Second, it must develop its
           own Capital Improvement Plan (CIP) for the specific infrastructure category for which the loan is
           being sought.                                                        '

       4.   Subsequent program modifications
          There have been several policy changes in the PWTF since 1985.  The jurisdictions must have a CIP
          or equivalent for all eligible systems under ownership.  In 1992, each jurisdiction is eligible for up
          to $3.5 million in construction loans. This is a rise in the previous cap of $2.5 million.  The loan
          may be for a single project or more than one project in separate categories.

      5.  Future picture
          The PWTF has added solid waste projects'to its funding programs, which include domestic water
          bridge, road,  and sanitary and storm sewer.  Within six years the PWB projects it will begin  to
          phase out the CIP loan programs, as the PWTF has brought the vast majority of local governments
          into compliance with CIP standards.

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          3.  Rate subsidies - None

          4.  Bond insurance • None

          5.  Loan guarantees • None

          6.  Other credit enhancement» None

          7.  Technical assistance
                                                                               is
        governments to help plan, apply, and qualify
        for, finance, acquire, construct, repair, and maintain public fadiiitfe!!

C.  Fund Accounts
    The Washington State Public Works Board  administers funds for
                                                                                              priority

                                                                                              ?
                                                                                              to
      D. Evaluation of Program Effectiveness

         of loan applicants must receive final approval from the StaS legSature   ?        ^   ' evaluatlon
     E.  Private Sector Participation
                                                                       —
     F.  Program Issues or Problems
                                             ^
 IV.  Relation to Federal Programs or Legislative Proposals - None

 V.   Materials Available

     A.  1992 Application Package

     B.  Enabling legislation and rules and regulations

     C.  1991 Annual Report

     D.  Capital Improvement Planning Manual

VI.  State Contact
    Pete A. Butkus
    Public Works Manager
    Dept. of Community Development
    9th and Columbia Bldg.
    MS/GH-51
    Olympia, WA 98504-4151

    (206) 493-2886  FAX (206) 493-9445

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               Emergency Loans - In 1988, the Legislature amended Chapter 4"4 1
               Public Works Board with emergency loan authority. ^pro
               ass* eligible communities experiencing the loss of critical publkworks services orSies
               oue to an emergency.
       b.   Borrower considerations

           1.   Eligibility - Jurisdictions eligible to apply for loans from the PWTF include: counties, cities,

               which provide eligible services but are not special purpose districts  are not^faible "for
               funding. Eligible projects cover most public works systems, including domesticlrater.

           2.   Eligibility costs -Forconstruction loans the jurisdictions must commit a minimum of 10%
               of project costs from locally generated revenues. Also, a local match is required for Capital
               Improvement Planning Loans, consisting of one dollar for every three PWTF dollars of
               local cash or eligible in-kind contribution.                                  «uu«u» ui

          3.   Loan terms - For construction and emergency loans the useful life of the public works
               imnrovement tc tnr> ln->n t*m u^tk •> _*..»:_.._ _«• tn	 *^  •  ..     r       »••«•
          4.   Interest rates - The interest rates for construction loans by the PWTF in the loan cvde
                     °m 1 ' 3%' Individual loan rates m de'ennined by the percentage of local funds
                          Trust Fund Loan
                          Interest Rates
                                 3%
                                 2%
                             .   1%
Level of Local
Participation
    10%
    20%
    30%
         5.  Loan security - None

         6.  Maximum borrowing amount - Each jurisdiction  is eligible  for up to $25 milMon  in
             construction loans, $15,000 per capital improvement plan, and $250,000 per emergency loan.

         7.  Small community exception - None

         8.  Hardship exception - The PWB has adopted a definition of economic distress established
             by the Legislature in 1985. To receive the economic distress designation, a jurisdiction's
             project must be located within a county that has a high unemployment rate of 20%
             above the statewide average for the previous three years.  The Board considers  this
             information an indicator of economic distress when approving the final priority list of
             projects sent for legislative action.                                           3

         9.   Refinancing - not permitted

         10.  Application process - See VI. Materials available

         11.  Local financial participation - None
2.  Grants - None

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                             West Virginia Water Development Authority
                                            Summary
The West Virginia Water Development Authority funds the construction and acquisition of water development
projects from the issuance of water development bonds and state appropriations.  Since inception of the loan
program in 1974, the Authority has made 13 loans through both  the Construction Loan Program and the
Supplemental Loan Program for $18,621,977 and $2,938,558, respectively

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                               West Virginia Water Development Authority
                                       Program Annotated Outline
I.       Program Description
        The West Virginia Water Development Authority is authorized to issue water development bonds in
        order to finance the construction or acquisition of water development projects through loans to eSribS
        local overnments and  overnment aenci   i                                            eugiDie
         local governments and government agencies in West Virginia.

                 Organization

                 1.   '   Scope
                        ""!? £?!? r Devel°Pmenut Authority makes loans from Legislatively appropriated funds
                        and bond proceeds in the financing of water development projects to municipalities
                        local governments, and public service districts.
                2.      Agency involved
                        West Virginia Water Development Authority

         B.     Establishment

                1.      Options initially considered
                        The Authority was established in 1972, forming the foundation for its programs for
                        sewer systems to cities, towns, and public service districts.  The loan programs-began
                        operation in 1974.  These programs provide financial assistance to local governmental
                        entities in meeting the requirements of State and federal water pollution control laws.

                2.      Political and legal considerations
                        The initial legislation authorizing the program was modeled aifter                 4*
                        Ohio Water Development Authority's legislation.

                3.      Statutory and constitutional restrictions •  None

                4.      Subsequent program modifications
                        In 1981, the Legislature expanded the powers of the Authority to include drinking water
                        systems as eligible projects. The number of active Board members also increased from
                        5 to 7 members, all appointed by the governor. In 1989, the Legislature increased the
                        authorized limit on bonding by the Authority from $100 million to $200 million  It also
                        authorized the authority to refinance local governmental agencies' existing water project
                        development debt,  provided that the refinancing does not exceed fifty percent of the
                       Authority's loan.                                               "

                S.      Future picture
                       On August 27, 1991,  the Authority closed its Series A bonds for $14,960,000.  In the
                       future, the Authority plans to make additional bond issuances  as needed.
II.      Administration
               Staff size/Skill mix
               The governing Board of the West Virginia Water Development Authority consists of seven
               members, including three ex-officio members: the Director of the Division of Natural Resources-
               the Director of the Bureau of Public Health; and a State Officer appointed by the  Governor
               most responsible for economic and community development. The remaining four members are
               appointed by the Governor for six year terms.  The staff of the Authority consists of four
               members: the Director; a certified public accountant; an Administrative Assistant, and; a
               Secretary. The Authority retains experts for consulting purposes when necessary.

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        B.      Administrative costs/Operating budget
               The total operating expenses for fiscal year 1991 were approximately $250.000. The operating
               budget and expenses are funded from earnings of the revenue bond program.

HI.     Operations

        A.      Fund capitalization

               1.      Funds from previous program - None

               2.      Federal funds • None

               3.      State funds - The Authority received State appropriations in the past, which partially
                      funded water development projects through the loan programs. From 1974 to 1983 the
                      Authority received approximately $55 million in State appropriations for both sewer and
                      water systems.                                                   uuuiacwwanu

              4.      Bonds/Borrowed funds - The Authority closed its first revenue bond issue in December
                      1978 for $8,105,000.  Since that time the Authority has made eight additional bond
                      issuances totalling approximately  $223.6 million.  The most recent bond issue was
                      August 27,1991, for $14,960,000. Portions of the bond issues were used for refundine
                      and retiring outstanding bonds. The Authority currently has $1553 million in revenue
                      bonds outstanding.

              5.      Loan repayments/Internal funds - Loan repayments are used to retire outstanding
                      bonds and to fund the Supplemental Loan Program. Currently, the Supplemental Loan
                      Program funds are used to buy down interest rates on the loans.

              6.      Alternative financing mechanisms  - None

              7.      Leveraging capability - The Authority has not used its leveraging  capability in the
                      Revenue Bond Loan Program.

      B.      Forms of assistance

              1.       Loans

                     a.      Program description
                             The Authority's loan program provides loans for eligible water development
                             projects to governmental agencies through the purchase of their local bonds.
                             The Authority's Revenue  Bond Loan Program has two  loan programs, the
                             Construction Loan Program and the Supplemental Loan Program, which are
                             financed through the issuance of revenue bonds and state appropriations. The
                             Supplemental Loan Program blends low-interest State loan funds with bond
                             proceeds to reduce the bterest rate for loan recipients. As of August 31,1991
                             the Construction Loan Program  has provided 13 totalling $18,621,971  The
                             Supplemental Loan Program has also provided 13 loans  totalling $2,938458
                             for the same period for drinking water systems.

                             1.       Eligibility- Eligible applicants include counties, municipalities, sanitary
                                     districts, public service districts, and any other governmental agencv
                                    entity, political subdivision, having the authority to acquire, construct!
                                    or operate water development projects within the state.

                                    Eligibility costs - The Authority has the power to charge administrative
                                    fees for loan applicants, but to date, the Authority has not initiated
                                    a charge.
2.

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                         3.      Loan terms - Loan terms are generally set by the applicant, and can
                                range up to a maximum of 40 years.

                         4.      Interest rates - The Supplemental Loan Program loans carry below
                                market interest while the Construction Loan Program loans are at the
                                market rate.  Currently, these loans provided by the Authority are at
                                7.5% interest.                      v

                         5.      Loan security - Each  applicant is required to fund a debt service
                                reserve equivalent to one year's repayment on principal and interest.


                         6.      Maximum borrowing amount - Currently, there is no limit on the size
                                of a loan. Thus far, the Authority's loans have ranged from  $100 000
                                to $7 million.                                             '

                         7.      Small community exception - None

                         8.      Hardship exception - None

                         9.      Refinancing - None

                       10.      Application process - See VI. Materials available.

                       11.      Local financial participation - None required

         2.      Grants - None

         3.      Rate subsidies - None, with the exception of the Supplemental Loan Program.

         4.      Bond insurance - None

         5.      Loan guarantees -  None

         6.      Other credit enhancement - The Authority holds pre-established reserves provided by
                the Authority equivalent to one year's debt service. This amount is maintained in an
                account as a reserve on the bonds to ensure payment by the Authority.

         7.      Technical assistance - The Authority provides no technical assistance  to the applicant
                in the project construction process. Financial guidance and advice is offered
                to the applicant throughout the loan term.

 C.       Fund accounts
         The Authority maintains four operating funds in  the  administration of its  loan and grant
         programs. These include the Loan Fund, General Fund, Debt Service Fund, and the Rebate
         Fund.  In addition, with each bond issue, two special reserve funds, the Capital Reserve Fund
         and Special Reserve Fund, are set up as debt service reserves for the reiirement of outstanding
         bonds and as a reserve for the main accounts within the Authority.

 D.      Evaluation of Program Effectiveness
        The Authority must submit an annual report to the Legislature and is audited annually by
        independent CPA's. The Authority is also subject to be called before the Legislature for review
        during the year.

E.      Private Sector Participation -  None

F.      Program Issues or Problems - None at this time.

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 IV.     Relation to Federal Programs or Legislative Proposals - None

 V.      Recommendations to Other States
        modifications.                             '        t""sr«un nas needed few major  changes

 VI.     Materials available

        A.      Enabling Legislation

        B.      Rules and Regulations

        C.      Annual Report

        D.      Application Package

VII.     State Contact

        Daniel B. Yonkosky
        Director
        West Virginia Water Development Authority
        1201 Dunbar Avenue
        Diiabar,  WV 25064
        (304) 348-3612

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I

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                             Wyoming Water Development Program
                                          Summary
                                                                       for tne _.

 and resources. The Wyomiag Water De^lopmem ComSn!tta£ed m 19^°^ T" ^J
from state appropriations and revenue. Since the inceptiolof Se proSams!^ cSS^t kT,"!?
70 and 80 loans and grants for construction totalling approSna^v^muEo^^mmuKzon has made between

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I

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i
                                                   Wyoming Water Development Program
                                                        Program Annotated Outline
                           Program Description
                           The Wyoming Water Development Program was established to
                                  Organization

                                  1.      Scope
                                         The Wyoming Water Development Program administers three funding Droerams for
                                         the construction and development of water facilities, which included? E^

                                         pZSS?"*  °gram' ** Rehabaitation *«***• *>d the Water Resoura Planning
                                         Agencies involved
                                         The Wyoming Water Development Commission
                          B.      Establishment
                                 1.      Options initially considered
                                         The Wyoming Water Development Program was established in 1982 to serve
                                         Political and legal considerations
3.      Statutory and constitutional restrictions

        ?^J?°?lmiSSiSn.is D0t au^orized to administer grants to private industries or
        corporations.  Private entities can not receive subsidies from the State.

4.      Subsequent program modifications
        There have been no significant modifications to the program since its inception in 1982.

5.      Future picture
        As additional and more stringent regulations are enforced bv the EPA and the federal

                   ™     dmkl  WatCr ^ SUrfaCC Wa            '
                                                                                  Water Standards- '*
                                                                     prognkms ^ ^ under
                  II.     Administration

                         A.     Staff size/Syil mix
                                The Wyoming Water Development Commission consists of ten members, eight of whom
                                represent the four water divisions of the State, one representative of the ioinTTribai

                                S f^^Sn^^rmb^at'1T>TheIStaff °f ^ Water Dev^Pn>«t CommSS consists
                                and Develo       members' who Cecily oversee Water Resource Projects        "^SISB


                         B.      Administrative costs/Operating budget
                                The_ Commission's annual administrative costs and operating budget total approximately Si

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III.     Operations

        A.      Fund Capitalization

               1.      Funds from previous program - At the start of the program the Commission nxeived
                       General Fund appropriations totalling $117.6 million for the administration of die New
                       Development Program and the Planning Program

               2.      Federal funds - None.

               3.      State funds - The Commission receives a 15% excise tax on coal which aids in financing
                       the New Development Program and the Planning Program. In addition, the
                       Commission receives revenues from a 0.167% severance tax on oil and gas which aids
                       in the financing of the Rehabilitation Program. These State funds total approximately
                       $20 million per year.                                                         '

               4.      Bonds/Borrowed funds - None

               5.      Loan repayments/Internal funds - Loan repayments are returned to the fund accounts
                       for additional loans and grants,

               6.      Alternative financing mechanisms - None

               7.      Leveraging capability - None

       B.      Forms of Assistance

               1.       Loans

                       a.      Program description

                              The Wyoming Water Development Commission administers three funding
                              programs in the utilization and preservation of State waters.

                              * • The New Development Program develops presently mused/unappropriated
                              waters of Wyoming. These projects can proceed as either sponsored projects
                              by municipalities, irrigation districts, or other assessment districts, or ait state
                              projects which serve to benefit more than one entity and are multipurpose in
                              nature.

                              * * The Rehabilitation Program provides funding assistance for the improvement
                              of water projects completed and hi use for at least 15 years. This program can
                              be used to improve an existing municipal water supply system or an agricultural
                              storage facility or conveyance system.

                              ** The Water Resource Planning Program funds the planning aspects of the
                              framework for development strategies which serve to identify and resolve water
                              related issues. There are three types of plans for water development that the
                              Water Development Commission funds:  Basin Wide Plans, Master Plans, and
                              Research Plans.

                             Since the start of the program in 1982, the Commission has made between 70
                             and 80 loans for construction totalling approximately $230 million.

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          b.      Borrower considerations

                  1.      Eligibility - Eligible applicants for the loan programs of the
                         Commission include municipalities, irrigation districts, assessment
                         districts, and other government agencies' and entities.

                  2.      Eligibility costs - None

                  3.      Loan terms - The loan term is set according to the economic life of
                         the faculty and the ability to pay by the applicants. The maximum loan
                         term is 50 years.

                 4.      Interest rates - Interest rates are currently set at 4%.

                 5.      Loan security - Loan security is determined bv the amount of the loan
                         and is set by the Attorney General.        "           « UK wan

                 6.      Maximum borrowing amount - There is no maximum limit on loans.

                 7.      Small community exception - None

                 8.       Hardship exception - The Commission offers grants of up to 75% for
                         hardship cases.

                 9.       Refinancing - None

               10.      Application process - See VI. Materials available.

               11.      Local financial participation - None required.

 2.       Grants

         a.      Program description
                The Commission offers grants to eligible public entities for the financing of
                water supply projects.  There is no limit on the amount of a grant, but the
                Commission is hmited to financing up to 75% of the total costs of the project.
                The remaming 25% can be financed through the regular loan program.  The
                standard grant consists of a 50% grant share and a 50% loan a^ement for
                 he applicant. The  grant program is also used to provide the state match
                needs'       ^ funded Water suppiy pr°Jects such « dam*> and rehabilitation


3.      Rate subsidies •  None

4.      Bond insurance - None

5.      Loan guarantees - None

6.      Other credit enhancement -  None

7.      Technical assistance - The Commission performs a feasibility studv on each water
        SCt aHPphcaj10n; The PlanniBg P"*™*is ^ded and sponsored bv the ComnTissTon
        which aids in developing master and basin-wide plans for water projects       KSlon

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         C.     Fund Accounts
                The Commission operates two main accounts in the administration of the loan oroerams  The
                Water Development Account No. 1 finances the New Development Program andtJie Water
                Planning Program.  The Water Development Account No. 2 finances the Rehabilitation
                Program.

         D.     Evaluation of Program Effectiveness
                The Wyoming Water Development Commission is required to submit a legislative report to the
                General Assembly each year. The Commission is also subject to an iumuai State audit.

         E.     Private Sector Participation • None

         F.      Program Issues or Problems
                With the more stringent regulations and standards enforced by the EPA and federal government
                domestic water supply and rural water systems have come under pressure for compliance  As
                a result, the Commission receives more applications than it can fund each  fiscal year.

 IV.      Relation to Federal Programs or Legislative Proposals
         For water resources projects that are eligible for state and federal funding through the Farmer's Home
        Administration and the Bureau of Reclamation's Rehabilitation and Betterment Program  the
        .Commission will on occasion provide a 50% matching fund in the financing of the project.

 V.       Recommendations to Other States
        The existing programs of the Commission have worked remarkably well. The Commission's investments
        in state infrastructure are seen as good investments for the future.

 VI.     Materials Available

        A.     Legislative Report

        B.      Application Package

        C.      Rules and Regulations

        D.     Other

VII.     State Contact

        Michael K. Purcell
        Administrator
        Wyoming Water Development Commission
        Herschler Building
        Cheyenne, WY 82202                                   "

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