1. US-Mexico Border Infrastructure Program Drinking Water and Wastewater Projects Javier Torres Regional Project Manager FY2009/2010 BEIF-PDAP Prioritization Process EPA Region 6 Stakeholder Workshop

2.  Welcome and Introductions  Workshop Purpose and Materials  FY09/10 Prioritization Process Summary of Important Modifications Methodology Criteria for Category Placement Ranking Parameters BECC Website – Access to Information Anticipated Process Schedule Prioritization Process Questions & Answers  Agency Stakeholders  Comments, Questions, Discussion  Region 6 Project Application Review Workshop Agenda

3.  Inform Potential Sponsors/Stakeholders and distribute process documents  Review Criteria and Methodology  Describe Anticipated Process Steps/Schedule  Establish Contacts to Support Sponsors through Process  Encourage Early Collaboration with Funding Partners  Provide Opportunity to Review Project Application examples  Workshop Materials: Workshop Purpose and Materials Presentation – Criteria Project Application Instructional Booklet Presentation – Sample Applications Region 6 Prioritization Criteria – Drinking Water and Wastewater Projects

4.  Category Conditions – Category 1  DW – All EPA Primary Water Quality Standard Violations  WW – All Non-compliant, failing on-site treatment systems  Ranking Parameter Scoring  Score Modifications  Project Development and Funding Status  Protecting Water Resources and Increasing Access to Services replaces Transboundary Impact  Degree of Economic Distress – new MHI comparison factor  Institutional Capacity – new sub-parameter: Entity Status  Project Application – minor changes  Documentation Requirements  Aerial Imagery-based Project Map Aerial Imagery-based Project Map  Prioritization Methodology  Category Condition Field Verification during Documentation Process Summary of Important Process Modifications

5.  2-year Funding Cycle – FY2009 and FY2010  All Projects must provide a US-side Benefit  Maximum Construction Cost: $30 million  BEIF contribution is determined, project-by- project, according to an affordability analysis by NADB and can not exceed $8 million.  By-Pass and Schedule Provision  2-year Project Development from Notification  3-year Construction from signing NADB sub-grant  Adequate Provisions for Pretreatment of Industrial/Commercial sewage prior to design or construction financing  Appropriate Cost-effectiveness and Sustainable Building Practices Other Important Process Highlights

6. Prioritization Process Methodology – R6 Adverse Human Health Effect ? Define Project Application & Documentation Focused on Conditions Category 3 Immediate Adverse Environmental Effect or Potential Adverse Human Health Effect? Risk to Human Health or Environment? Category 2 Category Evaluation NO Project is ranked within its category NO YES Category 1 Determine Category requiring Ranking Process. Ranking Parameter Evaluation (project receives a score) - Development & Funding Status- Protecting Water Resources - Cost per Residential Connection and Increasing Access - Utility Institutional Capacity - Impact to BEIF - Degree of Economic Distress - Sustainable Development

7. Category 1 – First Priority Existing Area-Wide Conditions for:  Potable water connections to existing un-served populations where drinking water is unavailable  Microbial contamination in the potable water system resulting in repeated fecal coliform or e-coli bacteria levels above applicable standards  Potable water exceeds maximum contaminant levels (MCLs) for contaminants per US EPA primary drinking water standards, or equivalent Mexican standards (NOM-127-SSA1-1994)  Current drinking water system uses unfiltered surface water or groundwater-under-the-direct-influence-of-surface-water (GWUDI) with microbial contamination and does not meet applicable surface water treatment regulations Alleviate existing adverse human health effects

8. Category 1 – First Priority (cont.) Existing Area-Wide Conditions for:  Untreated sewage discharges due to the absence of WW collection.  Untreated sewage discharges due to the absence or complete failure of centralized wastewater treatment facilities  Non-compliant, failing on-site treatment systems, in at least 2/3 of the project area, experience surface pooling and/or cause a significant threat to the environment  History of cases of acute and/or chronic health problems directly linked to waterborne contaminants in the existing drinking water system or untreated or partially treated wastewater Alleviate existing adverse human health effects

9. Category 2 – Second Priority Existing Area-Wide Conditions for:  Water Outages due to Insufficient Capacity in Water Treatment or Distribution Systems and not attributable to operational issues or lack of fire flow storage  Non-compliant WW Discharges to Impaired US Water Bodies where water quality objectives are not being attained (305(b) report) or in Mexico, water bodies classified by the Mexican Federal Government as a National Water Body where specific discharge requirements, CPD’s, apply.  Non-compliant WW Effluent Discharge Quality Exceeds Acute Aquatic Standards or Impacts Threatened/Endangered species  Major WW Collection or Treatment System Deficiencies not attributable to the lack of maintenance which cause an immediate and significant threat to the environment and/or a potential for human contact/exposure to untreated sewage Correct immediate adverse environmental effects and/or Potential for adverse human health effects

10. Category 3 – Third Priority Existing Area-Wide Conditions for:  Major Deficiencies of the Drinking Water Treatment and Distribution systems and/or WW Collection and Treatment systems that cause a risk to human health or the environment and a corrective action is required so that the situation is not exacerbated  Drinking Water exceeds Enforceable Secondary Drinking Water Standards, equivalent Mexican standards (NOM-127- SSA1-1994), or other regulatory requirements  Inadequate Water Pressures exist violating an enforceable standard and are not attributable to operational issues or storage capacity requirements such as fire flow storage  Treated WW Effluent Quality does not meet current Effluent Discharge Limits Risk to human health or environment

11. Cost per Connection Project Development and Funding Status Impact to BEIF Protecting Water Resources and increasing access to services Degree of Economic Distress Utility Institutional Capacity 25 Points Total 100 Points Ranking Parameter Evaluation 15 15 Points Billing Efficiency 5 Points Collection Efficiency 5 Points 15 Points 10 Points Sustainable Development 10 Points Summary of FY09/10 Parameters Entity Status 5 Points

12. Project Development and Funding Status – 25 Points Part 1: Advanced Project Development Status provides:  Effective and time-efficient use of funds – Sooner to Construction.  Increased accuracy of project scope and data such as costs and benefited connections.  Improved validity of other ranking parameters Ranking Parameters Project Development Status Application0 Facility Plan - Update Required*2 Facility Plan - Under Development5 Facility Planning – Complete10 EPA NEPA completed15 100% final design completed w/NEPA20 *Documented effort is older than 5 years, the project conditions have changed requiring modification to planning elements such as site, service factors, funding availability, regulatory requirements, and others or the recommended solution requires additional analysis

13. Project Development and Funding Status (cont.) Part 2: Supplemental Points for Funding Status:  Rewards projects with ≥50% Design Funds or final design is complete (with or without NEPA)  Rewards projects with any existing formal funding commitments for any portion of construction funds – BEIF is a “funding of last resort” – every project will eventually require formal funding commitments from sources other than BEIF/PDAP. Ranking Parameters Note: A formal funding commitment can be documented with:  Specific project allocation reserved/committed by governing body in an approved budget.  Notification of Award or funding agreement from funding resource. A commitment for construction funds must be available in a firm amount and for sufficient time to implement the project. Status of Funding (supplemental points)Score Formal Commitment of ≥50% Design Funds or final design is complete (with or without NEPA) 3 Same as above plus a formal commitment for any portion of construction funds 5

14. Ranking Parameters  Measures the value of investment and cost-effectiveness of the project.  Benefited Residential Connections –  connections that will directly receive new or improved service as a result of the project and are not necessarily the total connections served.  Does not include the projected residential connections or population anticipated to benefit from the project. Cost per Residential Connection – 15 Points USMEXICOScore No Data 0 > $25,000> $3,500 0 ≤ $ 25,000 and > $15,000 ≤ $ 3,500 and > $2,000 4 ≤ $15,000 and > $5,000 ≤ $2,000 and > $1,000 8 ≤ $5,000 and > $2,500 ≤ $1,000 and > $500 12 ≤ $2,500 ≤ $500 15 The measure for this parameter is developed separately for each country primarily due to differences in employee wages and design requirements between the two countries, which impact costs associated with construction.

15. Ranking Parameters Impact to BEIF – 15 points Impact to BEIF measured by total construction cost:  Indicates a more effective use of BEIF – greater opportunity to offer the limited resource to more projects.  Rewards projects which require less BEIF because other funding sources are available. Note: Projects with funding commitments that exceed 50% of construction will be considered according to the unfunded costs. Funding commitments must be in a firm amount and for sufficient time to implement the project. Total Construction CostsScore > $20 Million 0 ≤ $20 million and > $15 million 4 ≤ $15 million and > $5 million 8 ≤ $5 million and > $3 million 12 ≤ $3 million 15

16. Ranking Parameters Utility Institutional Capacity – 15 points (cumulative) Recognizes Utilities for:  Operational efficiencies, indicating improved opportunities for long-term stability.  The ability to maintain sufficient cash flow.  Establishing the legal authority to develop the proposed project, obtain and manage project financing sources, and own and operate the constructed infrastructure. Billing Efficiency US MeasureMeasureScore At or Above 85%At or Above 65%5 At or Above 70%At or Above 55%3 Below 70%Below 55%0 Collection Efficiency US MeasureMeasureScore At or Above 90%At or Above 80%5 At or Above 70%At or Above 65%3 Below 70%Below 65%0 Entity Status Score Fully Established Entity5 Established Entity with pending legal tasks3 No Established Entity0

17. Ranking Parameters Protecting Water Resources and Increasing Access to Services– 10 points (cumulative)  Recognizes projects which target or include components that are aligned with EPA's National Strategic Plan  Access to Safe Drinking Water and Adequate Wastewater Services through New Connections  Protection of Transboundary Surface Water Quality Impacts to Impaired Surface Water*Score >1 MGD5 ≤1MGD and >0.5 MGD3 ≤0.25 MGD1 New connections** >1,000 new connections5 ≤1,000 and >5003 ≤5001 *Discharges/flows are calculated based on 280 gpd per connection in the US and 206 gpd per connection for projects in Mexico. **For combined water and wastewater projects, the number of new connections for each shall be aggregated and evaluated in total.

18. Ranking Parameters Degree of Economic Distress – 10 points  Measure of Financial Need relative to other communities in the Region 6 Border States  Supports the intent of BEIF to make projects affordable.  Compares community’s MHI to the highest eligible US County MHI or eligible Municipio MHI in Mexico, as applicable.  US – Sutton County, Texas @ $44,721  Mexico – Juarez Municipio @ $10,761 The MHI for each State is presented in Exhibit C.  For the US, the state MHI is obtained by the 2000 US Census.  For Mexico, the MHI has been calculated based on the average income earned by the economically active population during 2000 as published by INEGI. % of “Top” County/Municipio MHIScore <50 %10 >50% and < 60%8 > 60% and < 70%6 > 70% and < 80%4 > 80% and < 90%2 > or = 90%0

19. Ranking Parameters Sustainable Development – 10 points (cumulative) Rewarded sustainable development activities:  shall consist of physically constructed facilities,  shall be implemented as part of the proposed project, and  shall be directly related to the proposed project. Projects which incorporate sustainable development measures such as:  Reduction in Energy Consumption: Use of Renewable Energy Sources or Notable Energy Efficiencies as a result of project.  Reduction in Potable Water Use: Water Conservation or Reuse, including water reuse for aquifer recharge and irrigation. Sustainable DevelopmentScore Sustainable Development Element Included (other than water reuse) 5 Water Reuse Element Included5 No Sustainable Development Element0

20. www.cocef.org

22. Anticipated Process Schedule  FY09/10 Process Announcement August 25General Publication Sept 10-18Regional Workshops (BECC, EPA, C.N.A., NADB) Sept-OctSponsor Support and Follow-up Meetings  Application Review and Prioritization Oct 15 Step 1 – Receipt of Applications (BECC) Oct Step 2 – Application Review: Completeness/Eligibility (BECC, EPA, C.N.A., NADB) Nov Step 3 – Evaluation: Category Placement (BECC/EPA) Nov-Dec Step 4 – Documentation/Field Verification (BECC) Dec Step 5 – Ranking Parameter Evaluation (BECC) Dec-Jan Step 6 – Preliminary Ranking Review (BECC/EPA) Jan-Mar Step 7 – Final Ranking and Project Selection (BECC, EPA, C.N.A., NADB) General Overview

23. Project Application submission periodAug 25 - Oct 15 Attn:Armando Carrasco Email: acarrasco@cocef.org Address:PO Box 221648 El Paso, TX 79913 US Fax: (915) 975-8280 Documentation/Verification MeetingsNov - Dec 2008 Publication of Prioritization ListSpring 2009 Anticipated Process Schedule Important Project Sponsor Dates

24. BECC:1-877-277-1703 Javier Torres, Regional Project Manager jtorres@cocef.org jtorres@cocef.org NADB:210-231-8000 Jose Ruiz, Senior Officer jruiz@nadb.org jruiz@nadb.org EPA:Gilbert Tellez, Infrastructure Coordinator Tellez.Gilbert@epa.gov Tellez.Gilbert@epa.gov Jose Rodriguez, Environmental Engineer Rodriguez.Jose@epa.gov Rodriguez.Jose@epa.gov Project Sponsor Support Contact Information

25. Questions and Answers

26. SAMPLE PROJECT: BORDER CITY Current Service Area City Limits Contaminated Wells Un-served Area