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Can We Get That Project Funded? 2012 Community Development Conference. Presented by Pam Ewing Rural Development Specialist. Ohio Rural Community Assistance Program Administered by W.S.O.S. CAC, Inc. 219 S. Front Street, P.O. Box 590 Fremont, Ohio 43420 1-800-775-9767.
Presented by Pam Ewing
Rural Development Specialist
Administered by W.S.O.S. CAC, Inc.
219 S. Front Street, P.O. Box 590
Fremont, Ohio 43420
Ohio RCAP provides free technical assistance to communities under 10,000 population. We assist with project planning, development and funding. Often, we work with communities to evaluate their rate structures and financial capacity. In addition to working with individual communities, we also offer several classes each year to local officials and operators.
Division of Drinking and Groundwaters
Funding water and sewer projects in small communities is often more challenging because the ‘economies of scale’ are not in their favor.
With smaller customer bases, and often fewer customers per mile of pipe as compared with larger urban systems, it is simply more expensive to install, operate and maintain infrastructure.
Similar to many larger, urban communities in Ohio, the loss of population, income and jobs is making capital project funding and public support for projects more difficult.
Funding for projects is becoming more competitive, and debt capacity is shrinking.
Small communities can dramatically increase their odds of maximizing grant and low-interest loan opportunities if they plan ahead.
It usually takes a minimum of two, and sometime up to four years or longer to secure and release all of the necessary funding for a major project, before a shovel is ever put in the ground.
Small communities need to be strategic which projects they seek to fund out-of-pocket, with loans and with grants.
Village of Carrollton WWTP
Water and sewer systems in general do not save enough. The loss of potential revenue over time by failing to keep up with inflation can be significant.
‘Making up for lost time’ by implementing significant rate increases for a large project will ultimately decrease their future borrowing capacity for the next project.
Plant the seeds early!
Identify all capital projects – do an asset management plan!
Develop strategies for each.
Begin saving for them now.
Allow enough time to plan the project and secure funding!
Implement annual rate increases.
Contaminated or collapsing wells
WTP Upgrades that will address a compliance concern
Pump station rehab/replacements
New above ground storage replacing in-ground tanks or addressing inadequate pressure or storage
WWTP Upgrade/ Expansion projects to address NPDES Violations
Projects addressing sewage back-ups into basements
CSO Separation Projects
Pump station rehab/replacementsExamples of Projects That Are Generally Easier to Fund
Village of Adena
Water tower painting
‘Run of the mill’ waterline replacements
Some waterline extensions
New water systems
Unsewered area projects
Sewerline replacements (unless there is a compliance issue, will help with NPDES violations)Examples of Projects That Are Generally Harder to Fund
Village of Polk
On large capital projects that will receive grant and low-interest loans, we recommend communities try to pay 10-20% out-of-pocket, particularly for planning, design, surveying, legal services, advertising, and other soft costs.
We strongly discourage communities from waiting until F&O’s are in place to move forward with a project. They should at the first sign of a major compliance problem begin project planning, including developing a funding strategy. Nonetheless, projects that will address a current or near future compliance concern can be easier to fund. On the flip side, those that are not addressing a serious compliance or public health concern can be more difficult to fund.A Fact of Life – F & O’s Yield Points for Applicants
Funders often do not share the same priorities or sense of urgency as regulators do, and they will not ‘bend any rules’ to accommodate or hasten funding projects that are deemed to have a critical compliance or public health issue.Another Fact of Life – Funding Agencies Have Different Priorities
For small communities, there are generally better loan options through OWDA or other funders than to try and issue bonds or go through a private bank.
The Small Communities Environmental Infrastructure Group (SCEIG) Financing Committee has a representative from every major funder in Ohio.
Communities pre-register to present their projects to the committee. Each funder will in turn explain whether or not their program is a potential fit for the project.
In addition to meeting quarterly, the committee usually offers 2-3 round-tables in other locations around the state each year.
Visit www.sceig.org for more info.
Developing funding strategies, and helping communities through the funding process, is one of RCAP’s primary services. For most small communities, our services are free-of-charge.
Project development services include funding analysis, rate studies, income surveys, public interest surveys, Capability Assurance Plans, Vulnerability Assessments, grant writing and loan application assistance, environmental reviews (for a fee), CDBG administration (for a fee).
Visit www.glrcap.org/ohio for more info.
For basic information about all water and sewer funding programs in Ohio, download the RCAP Funding Grid, which is updates several times per year. The link can be found at the bottom of the Ohio RCAP Website Homepage www.glrcap.org/ohio .
Community A was “Crying the Blues” that it couldn’t afford the project, and delayed it for over a year, but in reality, the Village had (and continues to have) lots of debt capacity, and lots of room to restructure and raise rates in order to increase revenues. They were easily able to obtain funding for the project.
Community B legitimately should “Cry the Blues”. It really can’t afford the project. The Village has to try and pursue grant sources that are long shots and hope one of them comes through. This will probably take at least three years to fund.
At the end of the day, regardless of the compliance or public health issues at hand, under most funding programs the overriding factor in receiving a loan is a community’s ability to pay it back.
OEPA’s WSRLA program for drinking water has also been known to make exceptions. OPWC does not require proof of the ability to pay before awarding a loan, but the local fiscal officer is required to sign a form certifying that they will collect enough revenues to pay back it back before funds are released.
Small communities can chart their own course! There will be set-backs, program changes, and other factors that may delay a project, but having a plan the some flexibility can dramatically increase the odds of maximizing grant and low-interest loan opportunities if realistic funding strategies are developed well in advance.
The ones that have capacity to raise rates and save money need to do so now, and should implement small annual rate increases to keep up with inflation.
Does anyone have a project to discuss?