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VIEWS: 27 PAGES: 29

									Intergovernmental Partnership

               STATE REVOLVING FUND
 Water Pollution Abatement Trust                Department of
                                   Team
         (State Treasurer)                 Environmental Protection

Administration & Loan Management      Project Development & Management

     LOCAL TREASURER               Team   LOCAL PROJECT MANAGER
    Steps to Financing

•   Intended Use Plan - DONE
•   Local Authorization- by June 30, 2007
•   Final Application- by October 15, 2007
•   Project Approval Certificate
•   Loan Commitment- WPAT
•   Procurement Process
•   Project Regulatory Agreement
•   Loan Agreement- WPAT
•   Loan Closing
        • Short Term Loans (Interim loans)
        • Permanent Loans
        Local Authorization
Town Meeting/City Council Vote:
 Must be voted by Saturday, June 30, 2007
• General Obligation Pledged as Security
• Authorization to Borrow
     • Use suggested language written by Trust Bond Counsel
• Appropriation
     • Make sure you ask for enough. Include:
        •   Eligible + Ineligible costs
        •   Construction Management Fees
        •   Police Details
        •   Inflation
 SUGGESTED FORM OF TOWN MEETING ARTICLE AND VOTE

                                                       Article

To see if the Town will vote to appropriate a sum of money for the [construction] [planning] of (insert
description of the water pollution abatement project); to determine whether this appropriation shall be raised by
borrowing from the Massachusetts Water Pollution Abatement Trust or otherwise; and to take any other action
relative thereto.

                                                        Vote

Voted: that $               is appropriated for the purpose of financing the [construction] [planning] of (insert
description of the water pollution abatement project) including without limitation all costs thereof as defined in
Section 1 of Chapter 29C of the General Laws, as most recently amended by St. 1998, c.78; that to meet this
appropriation the Treasurer with the approval of the Selectmen is authorized to borrow $                     and issue
bonds or notes therefore under (Chapter 44 of the General Laws or insert reference to other applicable general or
special law governing the issuance of local bonds) and/or Chapter 29C of the General Laws, as most recently
amended by St. 1998, c.78; that such bonds or notes shall be general obligations of the Town unless the
Treasurer with the approval of the Selectmen determines that they should be issued as limited obligations and
may be secured by local system revenues as defined in Section 1 of Chapter 29C, as most recently amended by
St. 1998, c.78; that the Treasurer with the approval of the Selectmen is authorized to borrow all or a portion of
such amount from the Massachusetts Water Pollution Abatement Trust established pursuant to Chapter 29C, as
most recently amended by St. 1998, c.78; and in connection therewith to enter into a loan agreement and/or
security agreement with the Trust and otherwise to contract with the Trust and the Department of Environmental
Protection with respect to such loan and for any federal or state aid available for the project or for the financing
thereof; that the (Board of Selectmen, Board of Public Works or other appropriate local body or official) is
authorized to enter into a project regulatory agreement with the Department of Environmental Protection, to
expend all funds available for the project and to take any other action necessary to carry out the project.
     SUGGESTED FORM OF CITY COUNCIL LOAN ORDER


Ordered: that $                is appropriated for the purpose of financing the [construction] [planning] of
(insert description of the water pollution abatement project) including without limitation all costs thereof
as defined in Section 1 of Chapter 29C of the General Laws, as most recently amended by St. 1998, c.78;
that to meet this appropriation the Treasurer with the approval of the (Mayor or Manager) and the
(Auditor, Finance Committee or other appropriate local body or official) is authorized to borrow $
and issue bonds or notes therefore under (Chapter 44 of the General Laws or insert reference to other
applicable general or special law governing the issuance of local bonds) and/or Chapter 29C of the
General Laws, as most recently amended by St. 1998, c.78; that such bonds or notes shall be general
obligations of the City unless the Treasurer with the approval of the (Mayor or Manager) and the (Auditor,
Finance Committee or other appropriate local body or official) determines that they should be issued as
limited obligations and may be secured by local system revenues as defined in Section 1 of Chapter 29C,
as most recently amended by St. 1998, c.78; that the Treasurer with the approval of the (Mayor or
Manager) [and the (Auditor, Finance Committee or other appropriate local body or official)] is authorized
to borrow all or a portion of such amount from the Massachusetts Water Pollution Abatement Trust
established pursuant to Chapter 29C, as most recently amended by St. 1998, c.78; and in connection
therewith to enter into a loan agreement and/or a security agreement with the Trust and otherwise to
contract with the Trust and the Department of Environmental Protection with respect to such loan and for
any federal or state aid available for the project or for the financing thereof; that the (Mayor or Manager)
is authorized to enter into a project regulatory agreement with the Department of Environmental
Protection, to expend all funds available for the project and to take any other action necessary to carry out
the project.
        Borrower
        Loan Application

 Due no later than Monday October 15, 2007
  (earlier submission encouraged)
• Loan Application has three parts
   Applicant Information - Authorized Representative,
    Local Appropriation etc.
   Project Requirements - Plans and Specifications,
    Cost, Schedule, etc.
   Supplemental Requirements - Permits, Planning,
    Professional Services Agreement, etc.
       MassDEP Project
       Approval Certificate (PAC)

• PAC Issued by MassDEP to the MWPAT
• A copy is sent to Community
• PAC certifies project eligibility, costs, and
  lists conditions
     WPAT Loan
     Commitment Package

• Board Vote creates Commitment to Borrower
• Includes Requirements Letter outlining the
  step by step process to close the loan
  • Loan Questionnaire – ensures WPAT has all
    necessary information to comply with bond rules
     • Loan Questionnaire is available on our website.
  • Green Light Letter – from local counsel
Return Signed Commitment and
 Questionnaire to WPAT
     Borrower Bond Counsel

Issues “Green Light Letter” to WPAT
  certifying the local vote is legal.
Prepares local bond for delivery to WPAT for
  interim and permanent loan.
• WPAT does not finance local costs for bond
  counsel.
       Borrower
       Procurement Process

• Before the start of bidding, MassDEP must give
  borrower permission to advertise.
• Contracts must comply with SRF requirements.
• Bid Specifications must be approved in writing
  by MassDEP.
• MassDEP Civil Rights Section reviews and
  approves MBE/WBE participation.
• MassDEP reviews bid results and authorizes the
  award of the contract.
    MassDEP Project
    Regulatory Agreement (PRA)

• Contract between MassDEP and Borrower
• Establishes MassDEP control over project
  Outlines project eligibility and funding
  Establishes disbursement procedures
  Loan closeout process
  Legal requirements of Borrower
  Discusses project defaults and how to remedy
       WPAT
       Loan Agreement

• Contract Between WPAT and Borrower
• Outlines WPAT and Borrower’s responsibilities
• States how a loan default can occur and how to
  cure the default
• Loan defaults do affect the project funding.
• Bond Counsel Issues Bond to WPAT

 Sign and Return Project Regulatory Agreement
  (PRA) and Loan Agreement to WPAT.
          Interim Financing
• Preferable to BANs
       • Lower interest rate
       • Easier compliance
•   Interest rate = ½ Market (currently 1.76%)
•   Loan origination fee of $500 - $1000
•   Become permanently financed within one year
•   Only pay interest on amount used
•   Interest payment due at close of permanent loan

 Contact WPAT and local bond counsel
       Permanent Financing
• Funded by WPAT bonds- Fall 2008
  • Clean water loans are amortized for up to 30
    years with engineers’ certification
  • Drinking water loans are amortized for up to 20
    years only
• All interim loans, active projects will be
  financed.
• DEP/WPAT will contact each borrower in
  summer regarding schedule
         Loan Terms/Fees

                   Clean Water      Drinking Water   Interim Loan
                   2% (20 years)                      1/2 market
Loan Rate         2.3% (30 years)        2%            (1.76%)


Max. Term            30 years          20 years         1 year


Admin Fee             0.15%             0.15%             0
Effective Loan
Rate                  2.15%             2.15%
Origination Fee
(one-time)          7.50/$1000        7.50/$1000     $500-$1,000
       Disbursements

• Receiving the Funds
  • Proceeds of the loan – interim or permanent – are
    forwarded to the community on a reimbursement
    basis
  • “Drawdown Request” is completed by the community
    and forwarded to MassDEP with the appropriate
    documentation
  • MassDEP reviews the request and approves all
    eligible costs
  • MassDEP forwards the request to the WPAT
  • WPAT wires to borrower within 48 hours
               Debt Service Schedule
               (Schedule C)
Massachusetts Water Pollution Abatement Trust                                                                       Schedule C
Water Pollution Abatement and Drinking Water Revenue Bonds
Pool Program Bonds, Pool 14
Preliminary Structuring Analysis
                                                                                             Loan Term (in Years)            20
BORROWER NAME Yourtown                                                                          Borrowed Amount      $5,000,000
LOAN NUMBER          CW07-0001                                                                         Loan Rate             2%


                                Schedule of Loan Repayments*                Administrative      Loan Origination           Total
            Date            Principal             Interest            Total   Fee (0.15%)        Fee ($7.5/1000)            Due
        01-Oct-08

         15-Jul-09           161,786            83,333.33        245,119.63       3,750.00             37,500.00      286,369.63
        15-Jan-10                               48,382.14         48,382.14       3,628.66                             52,010.80
         15-Jul-10           198,725            48,382.14        247,106.88       3,628.66                            250,735.54
        15-Jan-11                               46,394.89         46,394.89       3,479.62                             49,874.51
         15-Jul-11           202,739            46,394.89        249,134.28       3,479.62                            252,613.89
        15-Jan-12                               44,367.50         44,367.50       3,327.56                             47,695.06
        15-Jan-28                                5,754.37          5,754.37         431.58                              6,185.95
         15-Jul-28           284,841             5,754.37        290,595.81         431.58                            291,027.39
        15-Jan-29                                2,905.96          2,905.96         217.95                              3,123.90
         15-Jul-29           290,596             2,905.96        293,501.77         217.95                            293,719.72
                           5,000,000         1,163,537.21      6,163,537.21      84,765.29             37,500.00    6,285,802.50
     Loan Repayment
• Due July 15 and January 15
  • The Trust will send an invoice 30 days in
    advance
  • Invoice will include wire instructions
• Debt Service Payments
• Administrative Fee Payments
• Origination Fee Payment – only at first
  payment
         Things to Remember

• WPAT cannot close your loan until   all documents and
  fees are received
• Fill out the Loan Questionnaire completely (even if
  you already have for this project)
• If you have questions
   • Financial – Scott Jordan 617-367-9333, x579 or
      Teresa Altavesta 617-367-9333 x508
   • Program – Steve McCurdy 617-292-5779 or
      Joe Delaney 617-292-5808
• If we cannot help by phone, we will visit.
   Website Addresses

• MassDEP :
  www.mass.gov/dep/water/srf.htm

• MWPAT :
  www.state.ma.us/treasury/wpat
Energy Considerations




Renewable Energy/Energy
 Conservation Projects
  Applicability to SRF
        Potential SRF Eligibility

• Energy Projects may be eligible for SRF
  financing if:
  It is done in conjunction with an SRF funded
   project (i.e., not a stand alone project);
  The energy is to be used at the facility; and
  Excess revenues generated by the project are
   used to offset rates.
       Types of Eligible Projects

•   Green Building (LEED Certification)
•   New energy efficient equipment
•   Energy conservation retrofits
•   Renewable energy sources such as:
    Wind power
    Photovoltaic cells
    Fuel cells
    Digester gas use for power and/or heat
     Water and wastewater
     systems are energy intensive

• 35% of municipal energy use
• 30% of total (O&M) costs of WWTPs
• Electricity demand at WWTPs estimated to
  grow by ~ 20% over the next 15 years

• OPPORTUNITIES
  • Energy conservation and efficiency
  • Clean energy (renewable technology)
     Energy efficiency can improve
     operations and reduce costs
     Consortium for Energy Efficiency http://www.cee1.org/ind/mot-sys/ww/ww.php3




• Motor systems
  Pumps (~20%), compressed air (~17%), fans
   (~5%), drives (~15-50%)
• Process opportunities
  • Water: Filtration, control strategies, use of
    backup generators (~10-20%)
  • Wastewater: Aeration, sludge management,
    process monitoring (~10-20%)
            Utility companies have
            “energy conservation”
            resources to assist you
• First stop – Go through your Municipal Account
  Representatives
• National Grid (nationalgridus.com)
   • Kevin Keena, Technical Assistance Audits kevin.keena@us.ngrid.com, (508) 421-
     7279
   • Anita Hagspiel, Building Energy Efficiency anita.hagspiel@us.ngrid.com, (508)
     421-7221
• NSTAR (www.nstar.com)
   • Nelson Medeiros, Technical Assistance Audits,
     nelson_medeiros@nstaronline.com, (781)441-8703
   • Brett Feldman, Building Energy Efficiency brett_feldman@nstaronline.com, (781)
     441-8344
• Unitil (www.unitil.com)
   •   Ed Mailloux, (603) 773-6541
• Western MA Electric (http://www.wmeco.com/)
   • Ron Johnson, johnsyx@nu.com, (413) 787-4732
• Cape Light Compact (www.capelightcompact.org)
   • John Burns, (508) 375-6829, burnsje@cape.com
       The Massachusetts
       Renewable Energy Trust is
       assisting MA communities
• Clean Energy program
  (http://www.mtpc.org/renewableenergy/cleanenergy.htm)
   Community Wind Collaborative
      • Wind Turbine Site Survey
        http://www.mtpc.org/renewableenergy/Community_Wind/CWC_sit
        e_survey.html
      - This survey helps municipalities identify locations which may be
        appropriate for a wind project.
      - Small on-site projects, with large electric loads (e.g., a wastewater
        treatment plants) may be feasible to pursue.
• Some additional EPA NE energy resources
      • EPA: http://www.epa.gov/region01/eco/energy/index.html
          • http://www.epa.gov/ne/eco/energy/assets/pdfs/ne-energy-
            brochure-200609.pdf

								
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