Can We Get That Project Funded?

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1 Can We Get That Project Funded? County Economic Development Symposium June 25, 2015 Hyatt Regency Columbus Presented by Thomas Fishbaugh

2 Ohio RCAP Part of the Great Lakes RCAP Administered by WSOS CAC, Inc. Project Development Management & Finance Energy Audits Rate Analysis Asset Management CMOM Planning Ohio RCAP is funded by Training for Local Officials GIS Data Collection & Mapping Division of Drinking and Groundwater Environmental Reports Grant Writing & Administration Community Planning: Land Use, Economic Development, Downtown Revitalization

3 Free Help and Resources 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 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 for more info.

4 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. Communities need to be strategic which projects they seek to fund out-of-pocket and which they will fund with loans and grants.

5 Community Water and Sewer Funders Ohio Water Development Authority (OWDA) Ohio EPA Water Supply Revolving Loan Account (WSRLA) Ohio EPA Water Pollution Control Loan Fund (WPCLF) USDA Rural Development Ohio Public Works Commission (OPWC) Community Development Block Grants (CDBG) Appalachian Regional Commission (ARC Counties only) US Army Corps of Engineers Section 594, obtained via federal appropriation State and Tribal Assistance Grants (STAG) via federal appropriation Ohio Department of Development (various economic development programs) Economic Development Administration (EDA) RCAP Safe Water Fund (loans under $200,000) Local Property Assessments

6 Free Help and Resources 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 under How We Can Help on the Ohio RCAP Website

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8 Preparing to Apply For most programs, at least some preliminary engineering is needed to be considered for funding. Even for federal appropriation requests, some idea of the total project cost is required. Environmental Assessments or Reports are required for federally funded programs. These will delay project funding (or for CDBG the Release of Funds) until they are finished and Public Notice periods are over. ER s typically take 3-5 months, and longer if agencies request additional information or studies before issuing a concurrence letter. For some programs (WPCLF, USDA, CDBG), an income survey may be warranted or required. These typically take 3-5 months to complete.

9 Funding Cycles OWDA Applications submitted by the 15 th of each month, funds approved two weeks later, funds available three weeks after approval, construction applications submitted after bids are received. EPA WSRLA (water) Must be on EPA Project Priority List, pre-apps usually due March 1st, funding application and Capacity Assurance Plan submitted before loan approval, environmental report completed by EPA DEFA. EPA WPCLF (sewer) Must be on EPA Project Priority List, nomination forms due late summer/early fall, funding application submitted before loan approval, environmental report completed by DEFA. Army Corps Section 594 or STAG Submit appropriation requests to Senators and/or Congressional offices in January/February, if project is included in a federal spending bill funds not allocated until following December/January, then 6-12 more months to meet specific agency application and environmental requirements. USDA Rural Development - Anytime Ohio Public Works Commission (OPWC) - Late Summer Community Development Block Grants (CDBG) - Anytime Appalachian Regional Commission (ARC)

10 Developing a Funding Strategy 1. Determine the projects eligibility for the various funders. 2. Make sure the minimum and maximum rates to qualify are considered. 3. Consider funding cycles. 4. Develop best-case through worst-case scenarios (RCAP s Funding Scenarios Spreadsheet is one tool). 5. Determine which scenarios result in an acceptable annual debt service. 6. Develop funding strategy and project schedule.

11 Developing a Funding Strategy FUNDING SCENARIOS Project: Smalltown, OH Sewer Project Date: July 1, 2010 Scenario Scenario Scenario Scenario Scenario Scenario Scenario CUSTOMERS (EDU) TOTAL PROJECT COST $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,040,000 $ 1,000,000 $ 1,010,000 TOTAL ANNUAL OMR $ - $ - $ - $ - $ - $ - $ - FINANCING ARC Grant $ - $ - $ - $ - $ - $ - $ 100,000 Army Corps or STAG $ - $ - $ - $ - $ - $ - $ - CDBG W&S Grant $ - $ - $ - $ - $ - $ - $ 300,000 CDBG Formula Grant $ - $ - $ - $ - $ - $ - $ - OPWC Grant $ - $ - $ - $ - $ - $ - $ 200,000 OPWC Credit Enh (Interest) $ - $ - $ - $ - $ - $ - $ - USDA Grant $ - $ - $ - $ - $ 312,000 $ - $ - Local Funds (Cash, Tap Fees, Etc.) $ - $ - $ - $ - $ - $ - $ 50,000 OWDA Market % $ 1,003,500 $ - $ - $ - $ - $ - $ - OEPA WPCLF % $ - $ 1,003,500 $ - $ - $ - $ - $ - OPWC Loan % $ - $ - $ 1,000,000 $ - $ - $ - $ - OWDA Community Asst % $ - $ - $ - $ 1,003,500 $ - $ - $ 360,000 USDA Loan % $ - $ - $ - $ - $ 728,000 $ - $ - Total Financing $ 1,003,500 $ 1,003,500 $ 1,000,000 $ 1,003,500 $ 1,040,000 $ - $ 1,010,000 ANNUAL DEBT Annual Private Bank Payment $ 76,013 $ - $ - $ - $ - $ - $ - Annual Ohio EPA Payment $ - $ 50,175 $ - $ - $ - $ - $ - Annual OPWC Payment $ - $ - $ 33,333 $ - $ - $ - $ - Annual OWDA Payment $ - $ - $ - $ 41,785 $ - $ - $ 14,990 Annual USDA Payment $ - $ - $ - $ - $ 29,001 $ - $ - USDA Reserve $ - $ - $ - $ - $ 2,900 $ - $ - ANNUAL DEBT & OMR $ 76,013 $ 50,175 $ 33,333 $ 41,785 $ 31,901 $ - $ 14,990 Total Future Av. Mo. Cost Per Customer Total Private Bank Payback Total Ohio EPA Payback Total OPWC Payback Total OWDA Payback $ $ $ $ $ $ $ 1,520,260 $ - $ - $ - $ - $ - $ - $ - $ 1,003,500 $ - $ - $ - $ - $ - $ - $ - $ 1,000,000 $ - $ - $ - $ - $ - $ - $ - $ 1,253,548 $ - $ - $ 449,703 $ - $ - $ - $ - $ 1,160,031 $ - $ - Total USDA Payback *Blue font indicates formula cell. ** Loan terms and interest rates can be changed and payments/payback will change accordingly. *** Please note that OWDA's loan fee is included where applicable. For OWDA and WPCLF loans, a 0.35% fee is charged. The WPCLF Loan Fee for $ 1,000,000 is $ 3,500

12 Pitfalls to Avoid! Starting too late. If you want grants, start developing funding strategy early. Somethings don t happen overnight! Being unrealistic about grants and delaying projects too long. Waiting for someone to swoop in with grants will often result in higher project costs due to inflation. Paying for General Plans, or worse design engineering, when the project is very unlikely to happen. OR, moving forward with design when there is no realistic funding strategy in place. The result is paying on planning and design loans for projects that may end up being reengineered if they ever happen.

13 Pitfalls to Avoid! Not reading preliminary engineering studies, and not questioning the proposed funding scenarios. Signing a consulting engineer s contract for planning, design and services during construction up front, before the planning is finished. Especially if it is the first time working with the firm and/or a large project, it s better to get through planning, and then sign a second contract for the design and construction phases.

14 Questions? OhioRCAP.org