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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