Understanding WIFAUnderstanding WIFA
Presented by:Presented by:
Steve WeneSteve Wene
Moyes Sellers & HendricksMoyes Sellers & Hendricks
Overview of WIFAOverview 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
Loans and GrantsLoans 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”
WIFA ProcessWIFA 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
WIFA Financial Keys 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
WIFA Issues to ConsiderWIFA 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
Issues with ACC FinancingIssues 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
QuestionsQuestions
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