Post on 22-Jun-2020
Accessing Multiple
Sources of Funding
Glenn Barnes
Environmental Finance Center
University of North Carolina at Chapel Hill
919-962-2789
glennbarnes@sog.unc.edu
www.efcnetwork.org
10/22/2014
Smart Management for Small Water Systems *under a Cooperative Agreement with the US EPA
• The EFCN will provide training and technical assistance to small
public water systems in all fifty states and five territories to help local
water systems achieve and maintain compliance with the Safe
Drinking Water Act.
• Workshops and trainings will be provided in these areas:
– Asset Management
– Water Loss Reduction
– Water System Collaboration
– Fiscal Planning and Rate Setting
– Energy Management
– Funding Coordination, and
– Managerial and Financial Leadership
Smart Management for Small Water Systems
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10/22/2014
Ways To Pay
• Pay as you go (current receipts)
• Save in advance and pay
• Pay later (someone loans you money)
• Grants (let someone else pay)
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10/22/2014
Grants Aren’t Completely
Free Money
• Application for the grant can be expensive – staff time and money
• Applications can take months to process
• Often lots of strings attached
• Often require a percentage match
• Lots of competition
• Difficult to sustain
4
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10/22/2014
Quick Thought on Grants
• This presentation is about
sustainable program finance
• Grants are not sustainable finance
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10/22/2014
I Say This A Lot
“Grants are not sustainable
finance”
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10/22/2014
Really, I Say This A Lot
“Grants are not sustainable finance,”
said Glenn Barnes
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10/22/2014
Really, A Lot
Here Lies
GLENN BARNES
Husband, Father, Springsteen Fan
“Grants are not sustainable finance”
www.efcnetwork.org
10/22/2014
$0
$2
$4
$6
$8
$10
$12
$14Total (in 2000 Dollars)
CWSRF
EPA Line Item
Construction Grant
Major Grants Have Disappeared;
Replaced by Loans EPA Wastewater Spending by Type (billions of dollars)
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10/22/2014
Loan & Grant Programs
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10/22/2014
Some Projects Can Be Funded
by a Single Source But Many
Require More Than One Source
of Funding
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10/22/2014
Benefits to Multiple Funding
• Can fund a whole project (if one source is
not capable)
• Can potentially involve better funding
conditions (lower overall interest rates or
possibly some grant portion)
• Can allow for a greater range of activities
within the project
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10/22/2014
Challenges with Multiple
Funding
• Understanding the Funding Restrictions
For Each Source
• Determining the Deadlines and Application
Process for Each Funding Source
• Completing and Submitting Applications
• Navigating the Reimbursement Process
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10/22/2014
The Debt Market
• Why Borrow?
• Water infrastructure has a long useful life.
You may wish to amortize the loan over
the life of the equipment so that the people
who benefit from the system pay for it
www.efcnetwork.org
10/22/2014
When You Need Cash Now:
The Debt Market
• Lenders will look at your creditworthiness,
your ability to repay the debt, in
determining whether to loan to you and
your interest rate
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10/22/2014
The Debt Market
• Two types—Loans and Bonds
– Loans are universally available
– Bonds are typically only available to large
systems with significant revenues and
managerial capacity
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10/22/2014
Loans
• Typically from a bank
• Can be from a government-sponsored
program such as the Drinking Water State
Revolving Fund
17
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10/22/2014
Bonds
• A written promise to repay borrowed
money (on a definite schedule and usually at a
fixed rate of interest for the life of the bond)
• Different types exist:
– General Obligation (GO)
– Revenue
18
Source: bettermondays.com
www.efcnetwork.org
10/22/2014
A Quick Aside On Debt...
• The only way “the bonds” pay for anything
is if one of these people lives in your
community...
Source: picasaweb.google.com/.../fLQy4iWz7ZNrMaDwZG13iA Source: commons.wikimedia.org/wiki/File:20060825_Barr...
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10/22/2014
MONTANA
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10/22/2014
Loan & Grant Programs
www.efcnetwork.org
10/22/2014
We Can Help
• Comprehensive technical assistance
available from Environmental Finance
Centers, free!