Elected.org Webinar: Finding Funding for Infrastructure 3.22.16
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Transcript of Elected.org Webinar: Finding Funding for Infrastructure 3.22.16
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Finding Funding for Infrastructure
March 22, 2016
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Overview
• Fund procurement is mostly about heightening the probabilsecuring funds and minimizing the possibilities
• Discussion will focus on public infrastructure:• Transportation
• Water/Wastewater
• Stormwater Management• Public-Private Partnerships (3-P)
• Federal, state, local, and private sources• Opportunities and limitations
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Conventional vs. Innovative
Conventionally funded projects
• Limit the community’s ability to address abroader spectrum of community needs
• Potential to defer maintenance orreplacement costs to future dates andincreased costs
• Limited by GO Bond caps and/orcomparatively high interest expense costsassociated with Revenue Bonds
Innovative approaches
• Diversify funding options
• Enables communities to do mshorter period of time
• Attracts external resources threlationships
• Creates opportunities to levesupport
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Leveraging external resources can help but…• Recognize there are strings attached
• Decision making authority is relegated to a third-party• Timing can be an issue
• Grant preparation – grant review – decision – grant agreement – funds to use
• Be aware that grants are often associated with a social and/or physica(e.g., job creation, benefiting low-to-moderate income individuals, greinfrastructure, etc.)
• Gain some perspective about the funding history of a program• Types of projects receiving funds• Total grant award (range) and compare to required funding match
• Know the competitiveness of programs and factors that strengthen yocommunity’s position
• Complete design, secure permits, acquire right-of-way, etc.
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Federal, State, Local, Foundations
Factor/SourceFederal Funds
(Entitlement)
Federal Funds
(Competitive)State Funds Local Funds
Application Varies
Serve a special population
Reporting requirements Varies Varies
Prevailing wage rates
Environmental clearance(s) Varies
Funding match Varies
Grant oversight
Spending period limits
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Funding common to Transportation• Federal DOT
• FHWA: TIGER, FASTLANE
• State DOT funding
• Federal funds that are programmed – Congestion Mitigation and Air Qua
• Road use tax funds
• Toll Road Systems
• Regional Planning Agencies (MPOs, RPCs, and COGs)
• Surface Transportation Program (STP)
• Transportation Alternatives Program (TAP) – formerly known as “Enhancfunding
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Funding common to Water and Wastewater
•The common perception is that water and wastewater systems run on“enterprise” model
• Often this precludes access to “grants.”
• Most common funding options:
• Community Development Block Grants (for entitlement and non-entitlecommunities) – funds must benefit low-to-moderate income (LMI) popu
• State Revolving Fund – long-term loans extended to cities/utilities to connecessary improvements.
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Funding common to Stormwater Managem• Traditional funding sources have been stormwater utilities
• Flat rate approaches
• Performance based approaches that associate rates with land area and permeabilit
soil/infrastructure
• Section 319• Federally funded since 1994
• Targets funds for watershed projects – particularly impaired waters
• Water Resources Restoration Sponsored Projects• Funds Non-Point Source, Best Management Practice projects within common water
conjunction with wastewater facility loans (SRF)
• Allows 10% of loan to be redirected to eligible projects
• Regional Conservation Partnership Program• Authorized under the 2014 Farm Bill
• Provides $100 million per year (2014 – 2018)
• Increases the restoration and sustainable use of soil, water, wildlife, and related natresources
• 1:1 funding match
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Local Funds
• Several options; however, some pose political challenges
• Common sources:• Debt: general obligation debt and revenue bonds• Tax Increment Financing (TIF)• Business Improvement Districts/Self Supported Municipal Improve
Districts
• Local Option Sales Tax• Special Assessments
• Regional Planning Agencies (RPAs)• Transportation
• Transit
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Business Improvement District/Self-Supported Municipal Improvement Districts
• These districts are established as special taxing districts designed to construction of improvements the affect property in the district or are owners of property in the district.
• State code generally specifies the percentage of property owners thanecessary to establish the district. In general, this also includes a thrrepresentation based on assessed value within the district.
• State law may preclude the inclusion of certain types of land uses (e.residential)
• Districts are often associated with central business districts or comme
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Local Option Sales Tax (LOST)
• Over time State legislatures have adopted enabling acts that create opp
cities, counties, school districts, and special taxing districts to impose losales taxes
• Rates may vary between a fraction of a penny on up.
• Imposing LOST requires a referendum – sometimes requiring a super maffirmative vote (60% or more)
• Referenda includes specific provisions:
• Purpose• How funds will be used
• Duration – when the tax will sunset
• Has been used to fund property tax relief, school expansions, aquatic clibraries, economic development, etc.
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Special Assessment
• Probably one of the least popular funding options because it imposes the property owner based on a unit cost
• There are generally caps on the amount of taxable property subject toassessment – i.e., 25% of the gross value of the property
• The process is very regimented and strict
• Commonly used for street, sidewalk, stormwater, and related r-o-w pr
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Regional Resources – Transportation Improvement Plan
• A committee, such as the Transportation Technical Committee reviewsformulates recommendations on proposals submitted
• TTC’s are generally comprised of technical staff
• These recommendations are voted on by the Commission; however, sbylaws allow Executive Committees to approve, disapprove, and ame
• Commissioners are generally comprised of both elected and appointed
• Voting and appointments are usually based on population – most popula
have the largest number of representatives or voting authority
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Foundations
• National and Community-based
• Can provide capital for select infrastructure projects – facilities such alibraries, parks, trails, etc.
• Funding is not generally available for roads or utility improvements
• Research foundations – particularly those in your community or servelarger region
• Types of projects receiving funding
• Amounts of awards• Funding cycles
• Funding match requirements
• Foundations that participate in capital projects can be an initial large and attract others
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Developing a Funding Strategy
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Things to Consider
• Conceptual design should be completed and include an Opinion of Probable
• Final design is more important for programs that emphasize shovel-ready projects
• Associate capital needs with prospective sources
• Sources and Uses of Funds Matrices are very helpful in the development of a fundin
• Identify and vet sources (local match requirements, funding history, funding cycles,
• Be creative – a sidewalk project may also be a main point of access to a school or pasystem; including public art could leverage transportation funding for aesthetic trea
• Develop an implementation schedule – funding does not appear when the a
is submitted• Application deadline
• Review
• Notice of award
• Grant agreement
• Funding is available (determine if the program(s) operate on a reimbursement basis
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Sources and Uses of Funds
Project Task Task Budget
Sources Local Match Options
RISE Local Match TIF Stormwater Utility
Earthwork $66,860 $33,430 $33,430 $16,715
Storm Sewer $207,000 $103,500 $103,500 $51,750 $51,750.0
Inlets $120,000 $60,000 $60,000 $30,000 $30,000.0
Pavement $333,300 $166,650 $166,650 $83,325
Sidewalk $111,111 $55,556 $55,556 $27,778
Pavement Markings $5,000 $2,500 $2,500 $1,250
Sub-Total Constriction Costs $843,271 $421,636 $421,636 $210,818 $81,750
Mobilization (5%) $42,164 $21,082 $21,082 $10,541 $4,088
Contingency (50%) $421,636 $210,818 $210,818 $105,409 $40,875
Engineering (15%) $196,061 $98,030 $98,030 $49,015 $19,007
Total Project Cost $1,503,131 $751,565 $751,565 $375,783 $145,719
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Start Complete Project Estimated Cost Hoven/FHWA MPO
Teton
TIF RISE ICAA
FY 2002 FY 2003 Soil Cost and City Staff Time $ 771,000 $ 771,000
FY 2003 FY 2004 Softball Fields $ 2,600,000 $ 2,600,000
FY 2004 FY 2005 BNSF Bridge and Shoofly $ 4,000,000 $ 3,500,000
FY 2004 FY 2004 Outer Drive East $ 3,000,000 $ 1,500,000 $1,500,0
FY 2004 FY 2005 US 75 Reconstruction $ 3,100,000 $ 1,400,000 $ 620,000
FY 2004 FY 2005 CN/IC Relocation $ 4,300,000 $ 860,000
FY 2004 FY 2005 Terminal Drive $ 1,400,000 $ 700,000 $ 700,000
FY 2005 FY 2006 Outer Drive West $ 2,255,000 $ 275,000
FY 2005 FY 2006
Floyd/Outer Drive
Intersection $ 1,400,000 $ 280,000
FY 2007 FY 2008 Floyd River Bridge $ 6,600,000 $ 1,320,000
Total Source $29,426,000 $ 6,400,000 $ - $ 7,426,000 $ 700,000 $1,500,0
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Case Studies
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Transportation – local road
• Project involved design and
replacement of roads, utilities,streetscape, and sidewalk
• Purpose: Replace failinginfrastructure, improve retail/servicemix, and enhance community pride
• Overall project cost: $4.5 million
• GO Bond – 31%• TIF - 31%
• SRF/Utility rate increase – 17%
• Special Assessment – 20%
• State Grant – 22%
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Transportation – regional improvement
• Reconstruct two US Highways,
realign two major railroadalignments, construct a bridge, andnew road to serve an industrial area
• Purpose: improve roadway safety,encourage new investment and
jobs, create intermodalconnections, and improve trafficcirculation
• Total Project Cost: $35 million• TIF: 19%
• State DOT: 6%
• STP (RPA): 25%
• Federal Funding: 50%
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Water Treatment
• Design and construct a new 5
MGD (expandable to 8 MGD)Water Treatment Plant
• Original facility wasconstructed in 1916 and wascited for various treatmentviolations
• Total Project Cost: $14 million• CDBG – ARRA: 7%• Federal Appropriation: 3%
• SRF Forgivable Loan: 14%
• State IJOBS: 18%
• Rate Payers: 58%
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Stormwater Project
• Project was prompted because of a failureof previous efforts to stabilize bank andevidence of bank erosion throughresidential area
• Funded by Water Resource RestorationSponsored Projects
• Wastewater Project: Gravity sewers,submersible pump station and force main;SRF loan request $3,865,422
• Translated into $387,000 for stormwaterimprovements
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3P (Public-Private-Partnership) Project• WWTP Alternative Wind Energy
• 50kW + 5 kW = 55kW Capacity
• Estimated 150,000 kWh Power Per Year Generated
• Realizing up to 50% savings in monthly utility costs• Participant Roles:• City: Lease land; enter into a power purchasing agreement with
the utility; & lease wind turbine with goal of purchasing
• HR Green: secure financing, purchase wind turbine, constructand maintain the facility over the lease term
• Energy Company: provide long-term interconnection/powerpurchase agreement with the City
• Financing:• Private lender: $274,000• Alternative Energy RLF: $137,000
• US Treasury Reimbursement (1603 Grant): $82,200
• Property tax exemption: 100% for first five years
• Accelerated depreciation of facility
• Federal & State Tax Credits: 3.7 cents per kWh credited toCorporate Income tax for first 10 years
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Successful 3-P Projects
• Prompted by two main realities:• Underinvestment in the maintenance of infrastructure
• Less grants available• Tightening budgets
• Design-Build is the first step of a public-private partnership• DB transfers greater risk to the private sector, which can create long-term efficie
innovative approaches, and improved performance
• Other contributing factors:• Project is critically needed or part of a capital plan
• Project has a financing shortfall• Project goals included accelerated delivery, reduced costs, and increased perfor• The project is complex and entails risk• PPP legislation has been enacted• A dedicated revenue stream exists to finance the project• Project has political support
Source: AECOM, U.S. Infrastructure: Ignore the Need or Retake the Lead?, ACEC Annual Convention and
Legislative Summit, March 30 – April 2, 2011
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Final Thoughts• Leveraging public funds general requires that a disadvantaged group b
or the project appeals to a policy goal (green infrastructure)
• Anyone can write a grant but the goal is to secure funds• Local funding match is a necessity
• Build relationships with leveraging partners
• Look beyond the scope of the project – are there ancillary factors thainfluence an outcome and/or identify alternative sources
• Natural disasters
• Environmental concerns/blighting conditions• Safer pedestrian routes for children to school
• Be mindful of funding situations that are not necessarily programmed• Federal Highway Administration issued a Guidance Memorandum concerning R
Earmarks FY 2016
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Thank you/Q & A
Jim Halverson
Principal & Vice President
HR Green, Inc.
(319) 841-4382 (direct)
(319) 573-9937 (mobile)