1. Understanding WIFA Presented by: Steve Wene Moyes Sellers & Hendricks

2. Overview of WIFA State agency Finances construction or rehabilitation –Drinking water –Wastewater reclamation Must by publicly owned Governed by a Board of Directors –7 to 12 members

3. Loans and Grants Clean Water Revolving Fund Loans Drinking Water Revolving Fund Loans Technical Assistance Grants –$35,000 per project –Usually requires local match funding (40%) –Exception for “Green Projects”

4. WIFA Process File a Project Priority List Application Secure debt authorization –Public via resolution or bond election –Private ACC finance application approval File a Project Finance Application WIFA Project Finance Committee reviews WIFA Board acts WIFA and Borrower close loan

5. WIFA Financial Keys Debt Service Coverage –Ensures enough cash flow to pay Principal Interest Fees Reserves of 20% –First 5 years is debt reserve –Years 6 to 20 is repair and replacement reserve

6. WIFA Issues to Consider Subordination Security – all property Davis Bacon –Labor must be paid “prevailing local wages” Timing –Public bodies 6 months –Private bodies 18 months Assumes a rate and finance case is needed

7. Issues with ACC Financing Usually need rate and finance application –18 month process How will debt service get paid? –Through authorized rates Using depreciation and operating cash flow –Through surcharge Reserve payment may not be covered May not let company rate base plant

8. Questions