EPA National Small Flows Clearinghouse
        258 Stewart Street    P.O. Box 6064
           Morgantown, WV 26506-6064
             Toll-free: I-800-624-8301

Your EPA Regional Office
(Small-community outreach coordinators)
D Boston      (CT, MA, ME, NH, Rl, VT)
              JFK Federal Bldg.; Boston, MA 02203
              617-565-3564

0 New York   (NJ, NY, PR, VI)
              26 Federal Plaza; New York, NY 10278
              212-264-5670

B Philadelphia (DE, MD, PA, VA, WV, DC)
              841 Chestnut St.; Philadelphia, PA 19107
              215-597-8224

D Atlanta      (AL, GA, FL, MS, NC, SC, TN, KY)
              345 Courtland St., NE; Atlanta, GA 30365
              404-347-4491

0 Chicago     (IL. IN, OH, Ml, MN, Wl)
              230 S. Dearborn St., Chicago, IL 60604
              312-886-0216

0 Dallas       (AR, LA, OK, TX. NM)
              1445 Ross Ave., Suite 1200; Dallas, TX 75202
              214-655-7130

B Kansas City  (IA, KS, MO, NE)
              726 Minnesota Ave.; Kansas City, KS 66101
              913-236-2813

0 Denver      (CO. UT. WY, MT. ND. SD)
              One Denver Place; 999  18th St., Suite 500
              Denver. CO 80202
              303-293-1551

El San Francisco (AZ, CA, Guam, HI,  NV, Amer. Samoa, Trust
              Territories of the Pacific)
              215 Fremont St.; San Francisco, CA 94105
              415-974-8266

23 Seattle      (AK, ID. OR, WA)
              1200 Sixth Ave.; Seattle, WA 98101
              206-442-8575
xvEPA
United States             May 1989
Environmental Protection
Agency
Office of Water (WH-546)

Touching All
The Bases
Financial  Management
For Your Wastewater
Treatment Project
                                                                                                                 Taking The  Field
Financing a wastewater treatment system is a lot
like scoring a run in baseball. Even before the first
ball is thrown out you need a sound game plan,
an experienced line-up, and a clear understanding
of the rules.

So, remember to keep your eyes on the pitcher as
you step up to the plate. Even a rookie knows that
anticipating the next pitch is a key to getting a hit.

As you hustle around the bases, this brochure will
help you touch them all. And that will help you in
your plan to build and operate a wastewater
treatment system that meets your community's
needs.
                                                            In The Bullpen
                                                           This brochure is a condensed version of the EPA
                                                           handbook Touching All The Bases. You can use
                                                           the handbook to answer many of your financial
                                                           management questions. It will make your job easier
                                                           by providing a clear and complete rundown of the
                                                           financial events involved in construction. See inside
                                                           for details on ordering Touching All The Bases.

                                                           The Ground Rules
                                                           The way you pay for wastewater treatment is
                                                           changing. The last funding authorization for the
                                                           construction grants program is in the year 1990.

                                                           The construction grants program is being replaced by
                                                           State revolving loan funds (SRF's), capitalized in part by
                                                           Federal grants. Under the new SRF's, States will make
                                                           loans and provide other forms of assistance (but not
                                                           grants). States will also have more flexibility to set
                                                           priorities for their SRF's than in the past. Repayments on
                                                           loans will be used to fund subsequent assistance.

                                                           To find out who  manages your State's SRF  program
                                                           contact your State Water Control Board.

                                                           Pay particular attention to all budgeting, purchasing,
                                                           bonding, and cash management  requirements. They
                                                           may differ from state to state.

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Making it to first base takes planning. You can begin by drawing up a capital
plan for your, project. It is a  multi-year program of all spending for capital
projects. A capital plan should include:
* what, exactly, you need to build;
* a budget for the project;
* a schedule for constructing your project;
* possible funding sources; and,
* your borrowing strategy.

Estimating your expenses is an important part of getting on
base. What capital costs  or costs of building and/or
upgrading the facility  will you face? What
operating costs  or costs of running,
maintaining, and replacing equip-
ment  can you expect to
pay? Are these expenses
reasonable for your                         /  '
community?                        *"
                                                                                                                         The Project Completion  Phase
To keep frorr: getting tagged out at the plate, make plans to pay for the
ongoing operation of your system and  long-term  financing for the
construction costs.
You will nee  a user charge system to pay for your facility's operation,
maintenance, ,ind equipment replacement costs  plus the debt service costs
on bond issue:  Citizens should pay based on how much they use the system.
Adopt  an  or : nance  that sets the rates users will  pay for  wastewater
services. Mak- sure you involve the public in the rate-setting process. Notify
       custc ners of new rates in advance of the first bill charging those
            rates.  Review and update  rates every year to make sure
                 they keep pace with operational costs.
                      Having  already taken steps during  pre-
                           construction phase to secure  long-term
                               financing, work must be completed on:
                                  *  preparing a financial statement;
                           r.        * obtaining a bond rating;
                                       advertising for investors;
                                      * awarding the bonds to the
                                          lowest bidders;
                                          printing the bonds; and,
                                          *  establishing a payment
                                             schedule.
                                                                                                                        O
  The Pre-Construction Phase
  Of Financial Management

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 Think about your borrowing options before you
 make a mad dash for second. You may need to pay
 for the construction of your wastewater treatment sy^-.jm
 with both short-term and long-term loans.
 Short-term financing generates the cash flow you need to pay
 the bills during construction.  Long-term  financing  provides  permanent
 funding for your project. One of the most common financing options is to
 issue bonds. Remember to talk to your bond  counsel before taking any
 borrowing action.
 Now is the time to contact your state to obtain information about its SRF
 program.
 As you move closer to scoring position, you must look at your line-up to
 develop construction contracts.
 At the same time, you must begin your  operating  plan and cash flow
 forecast.
 To make sure you  have long-term strength for operation and maintenance
 of your team, you need to design a user charge system that sets rates to
 cover future costs.
 Now you're ready to round third.
                                                             As you slide into third base, concentrate on
                                                          managing the financial activities of your project.
                                                      One of the most important decisions you will have to
                                                   make, if you use short term loans, will  be  how to invest
                                               those funds during construction. Be sure to check with your tax
                                           attorney on tax  requirements.
                                      Some comn  n investment alternatives include U.S. Treasury Securities, U.S.
                                      Government /.gency Issues, and Certificates of Deposit (CDs).

                                      Keep in mine, the need to:
                                      * appoint  a  construction  manager to closely  monitor your building
                                        contracts. The construction manager represents you in dealings with the
                                        contractor a>:d the engineer.
                                      * establish a  sound accounting system and record transactions.

                                      The construi  on manager and the engineer need to review work on the
                                      project at leas once a week. The engineer should give you a written report
                                      every month  Carefully consider all change orders. Approve only those
                                      needed  to coi-ect design oversights and unforeseen conditions.
The Post-Game Wrap-Up
Just as in baseball, when you're planning to pay
for a wastewater treatment project you must round
the bases one at a time. This allows you to address
all of the financial issues required to successfully
build and operate a wastewater treatment facility.
So swing the bat and start running  and
remember to touch all the bases. It's the only way
to score.
Want More  Details?
This foldout summarizes the 84-page EPA
handbook Touching All The Bases. This handy
booklet contains a wealth of practical information
on wastewater financing and technology for small
communities. You can order it from the U.S. EPA
Small Flows Clearinghouse. Use the form at right or
call toll-free 1-800-624-8301.
Please send me the EPA handbook Touching All The
Bases (EF-7):
No. of copies

Name	
(a $5.20 ea. = S
Street
City
State
Zip
              n Local official/staff
              D Citizen
              D Professional

Make check payable  to WEST VIRGINIA UNIVERSITY
and mail to:
       USEPA Small Flows Clearinghouse
       P.O. Box 6064
       Morgantown, WV 26506-6064
We're  Here To Help
U.S. EPA Small-community Outreach and
Education (SCORE) Program. Your first inform-
ation source is your State. Check to see if it has a
small-community program. If not, EPA's outreach
program can help you. It provides information on:
financing options, the latest technology, the kind of
team you need to assemble, and organizations that
may give you assistance.
                                      Check with your U.S. EPA regional office small-
                                      community outreach coordinator or the EPA
                                      National Small Flows Clearinghouse. Their
                                      addresses and phone numbers are listed on the
                                      back panel of this brochure.

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Chief Administrator
Project Manager
Finance Officer
Budget Officer
Attorney
Engineer
Planner
Bond Counsel
Financial Adviser
Underwriter
Purchasing Agent
Operating Manager
Construction Manager
Legislative Body
                                                                     Pre-Construction  Phase
                   Construction
tion
 Legend:
    The individual performing this function should take the lead role in this activity
    The individual performing this function should have a review/approval role in this activity
    The individual performing this function should participate in this activity
Three Strikes And You're Out
Failure to establish and follow through with sound financial
management practices can lead to serious financial health
problems for your wastewater treatment facility and can even
affect your community's overall financial stability.

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