Arizona's clean water revolving fund intended use plan : ... funding cycle

              funding cycle

2006

Water Infrastructure Finance Authority of Arizona

Arizona's Clean Water Revolving Fund
Intended Use Plan
April 20, 2006

www.azwifa.gov

Table of Contents Executive Summary ........................................................................................................... i Intended Use Plan Section 1: Lending Capacity .....................................................................................1 Section 2: Funding Sources and Uses .......................................................................1 Section 3: Goals ........................................................................................................2 Section 4: Method and Criteria for Distributing Arizona's CWRF...........................2 Section 5: Public Review and Comment...................................................................4 Section 6: Assurances ...............................................................................................4 Exhibit A: 2006 Funding Cycle Priority List Exhibit B: 2006 Funding Cycle Fundable Range for Design Exhibit C: 2006 Funding Cycle Fundable Range for Construction Exhibit D: Public Review and Comment

DRAFT

Intended Use Plan

EXECUTIVE SUMMARY The Water Infrastructure Finance Authority of Arizona (WIFA) Board of Directors is pleased to release Arizona's Clean Water Revolving Fund (CWRF) Intended Use Plan (IUP) for the 2006 funding cycle. The CWRF IUP describes WIFA's plan to utilize various sources of funds to finance water reclamation, wastewater, and related water quality infrastructure during the 2006 funding cycle from January 1, 2006 through December 31, 2006. Included as Exhibit A of the CWRF IUP is the 2006 Priority List (PL). The PL shows communities seeking financial assistance from Arizona's CWRF. At the release of this report, communities throughout Arizona submitted 25 applications requesting $258,153,598 in financial assistance. From January 1, 2006 through December 31, 2006, the WIFA Board of Directors will use the PL as a guide to allocate financial assistance from Arizona's CWRF to communities listed in the PL. Each board meeting, the WIFA Board of Directors may revise the PL and modify the fundable range for construction based on project readiness to proceed and other new information. WIFA staff will post the revised PL on the WIFA Web site (www.azwifa.gov). Overall, the financial assistance and related program activities by Arizona's CWRF support the national program goal of Clean and Safe Water and the national objective to protect and improve water quality (EPA IFMS PRC: 202B80E).

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SECTION 1: LENDING CAPACITY During the 2005 funding cycle, the lending capacity of Arizona's CWRF will depend on the: 1. 2. 3. 4. 5. 6. Amount of state contributions to Arizona's CWRF; Amount of federal contributions to Arizona's CWRF; Financing structure needs of communities; Interest rate on the CWRF financial assistance; and WIFA's ability to partner with other funding sources to jointly-finance projects.\ Leveraging capability of fund.

The financial assistance and related program activities by Arizona's CWRF support the national objective to protect and improve water quality (EPA IFMS PRC: 202B80E). SECTION 2: FUNDING SOURCES AND USES Arizona's CWRF is capitalized by state contributions and by contributions appropriated by the U.S. Congress. Once capitalized, Arizona's CWRF provides, in perpetuity, financial assistance to communities throughout Arizona. Through active portfolio and financial management, WIFA's lending capacity could be increased during the funding cycle by leveraging the revolving fund and by issuing water quality bonds. During the 2006 funding cycle, Arizona's CWRF will rely on the funding outlined in Table 1 to provide financial and technical assistance to communities and support WIFA's operations. Each of the intended uses of funding is more fully described after Table 1.
Table 1: Arizona CWRF Sources and Uses for 2006 Funding Cycle

Federal Contributions Funding Sources Financial Assistance Funds** 2006 Funds Total Funding Sources Funding Uses Financial Assistance Loans Administration Total Funding Uses $ $ $

State WIFA Contributions* Loan Accounts -$ 1,231,200 $ 1,231,200 $ 58,000,000 $ -$ 58,000,000 $

Total 58,000,000 7,387,200 65,387,200

-$ 6,156,000 $ 6,156,000 $

$ $ $

5,909,760 $ 246,240 $ 6,156,000 $

1,231,200 $ -$ 1,231,200 $

58,000,000 $ -$ 58,000,000 $

65,140,960 246,240 65,387,200

* State match can be either WIFA bonds or state general fund monies. ** During the funding cycle, WIFA may sell water quality revenue bonds of which the proceeds will used to increase WIFA's lending capacity

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The sources and uses for the 2006 funding cycle shown in Table 1 are based on the FY 2006 federal and state budgets. The federal appropriation for the CWRF in 2006 is $900 million of which .684 percent is available to WIFA. Financial Assistance: $65,387,200 WIFA will provide cash funded loans for financial assistance. Administration: $264,000 WIFA intends to use four percent (4%) of the 2006 federal contributions to offset the costs of administering Arizona's CWRF and assist communities to conceive, develop, expedite, construct, and finance technically sound and sustainable water reclamation, wastewater and related water quality infrastructure. SECTION 3: GOALS WIFA adopts an annual strategic plan listing goals, ongoing objectives, and annual objectives. The goals listed below are taken directly from the WIFA 2005-2006 Strategic Plan. For additional detail on goals, ongoing objectives and annual objectives, please request a copy of the 2005-2006 WIFA Strategic Plan from WIFA's Communications Director, (602) 364-1314. Goal 1: Award WIFA's resources in accordance with the needs of Arizona's citizens. Goal 2: Maintain the fiscal integrity of WIFA's funds and assure continuous enhancement for future generations. Goal 3: Facilitate access to and efficiently deliver financial and technical assistance. Goal 4: Coordinate with other funding sources, technical resources, and regulatory authorities, and private sector legal and financial counterparts. Goal 5: Actively pursue a leadership role in water infrastructure finance. Goal 6: Efficiently administer WIFA within a positive work environment. Goal 7: Facilitate and encourage board of directors' involvement in WIFA. SECTION 4: METHOD AND CRITERIA FOR DISTRIBUTING ARIZONA'S CWRF Lending Capacity for 2006 Funding Cycle   If there are insufficient projects ready to proceed during the 2006 funding cycle, WIFA will apply funds to the FY 2007 funding cycle project priority list. If additional funding becomes available during the fiscal year, WIFA will expand the fundable range of the 2006 funding cycle project priority list. Each board meeting, the WIFA Board of Directors may update the CWRF PL, fundable range for design and fundable range for construction based on project readiness to proceed, refined project cost estimates, availability of other funding sources, and other new information affecting the expansion and contraction of the PL and fundable ranges. The WIFA Board of Directors will adopt the updated CWRF PL and
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fundable ranges at public meetings and will distribute the updates to all CWRF PL applicants and other interested parties via WIFA's Web site. Priority List, Exhibit A   On Thursday, Nov. 3, 2005, WIFA staff convened a scoring committee including members from the Arizona Department of Environmental Quality, Arizona Department of Water Resources, Arizona Corporation Commission and U.S. Department of Agriculture Rural Development. The committee scored and ranked priority list applications submitted by communities pursuant to WIFA's CWRF award criteria. All eligible applications received appear on the 2006 funding cycle priority list. Fundable Range for Design, Exhibit B   Includes the highest ranking applicants ready to receive design assistance during the funding cycle. Fundable Range for Construction, Exhibit C   Includes the highest ranking applicants ready to receive construction assistance. Market Loan Rate   The WIFA Board of Directors has established a target interest rate ranging between 70 percent and 100 percent of tax-exempt interest rates. The WIFA Board of Directors will set interest rates/subsidies on individual loans pursuant to the: Priority of the project; Local fiscal capacity of the area served by the system requesting assistance; and, Lending capacity of Arizona's CWRF. Local fiscal capacity will be measured by the area's median household income, user rates and charges, and the community's outstanding debt. Binding Commitments   The WIFA Board of Directors will allocate financial assistance in accordance with CWRF funds available, the CWRF PL, financial assistance requested, a community's financial capacity, and project readiness to proceed. Once on the CWRF PL, an applicant will submit a project finance application to request financial assistance. WIFA staff will review the project finance application, analyze the applicant's legal, technical, managerial, and financial capability, and provide recommendations to the WIFA Board of Directors. If the WIFA Board of Directors approves an applicant's financial assistance request, WIFA staff will prepare and circulate financial assistance documents to evidence the binding commitment in accordance with applicable federal requirements.

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SECTION 5: PUBLIC REVIEW AND COMMENT WIFA solicited public review and comment on the draft 2006 CWRF IUP and PL according to the following schedule of activities: November 9, 2005 November 29, 2005 November 29, 2005 December 21, 2005 January 1, 2006 Distribution and Web posting of the draft CWRF IUP and PL to all interested parties. Public Hearing   1110 West Washington, Room #145, Phoenix, Arizona 85007 at 1 p.m. Deadline for public comments on the draft CWRF IUP and PL. The WIFA Board of Directors adopts the final CWRF IUP and PL. Final CWRF IUP and PL become effective. Distribution and Web posting of Final CWRF IUP and PL. SECTION 6: ASSURANCES Files and Records Retention   WIFA will receive and review project documents from financial assistance applicants. These documents will be filed in official project files maintained by WIFA. The project files and other CWRF records will be made available in accordance with the Arizona public records law. WIFA will retain the official project files and other CWRF files in accordance with 40 CFR Part 31. Expeditious and Timely Expenditures   In accordance with 40 CFR 35-3135 (d), WIFA will expend CWRF funds in a timely and expeditious manner. First Use of Funds   In accordance with 40 CFR 35-3135 (e), WIFA has satisfied all applicable first use requirements. Environmental Review Requirements   In accordance with 40 CFR 35-3140, WIFA will continue to conduct environmental reviews pursuant to applicable federal and state statutes and rules.

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Exhibit A: 2006 Fund Cycle Priority List Arizona's Clean Water Revolving Fund

Arizona's Clean Water Revolving Fund 2006 Funding Cycle   Priority List for Clean Water Revolving Fund April 20, 2006
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Applicant Fawn Brook Domestic Wastewater District Yuma County Town of Clarkdale Town of Chino Valley City of Kingman Pima County Wastewater Management Dept. City of Williams City of Holbrook Pima County Wastewater Management Dept. Delta City Improvement District Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Pinetop-Lakeside Sanitary District Pinetop-Lakeside Sanitary District City of Tucson Fort McDowell Yavapai Nation City of Peoria City of Tucson City of Holbrook Pima County Wastewater Management Dept. Town of Oro Valley Pima County Wastewater Management Dept. Fort McDowell Yavapai Nation Pima County Wastewater Management Dept. Pinetop-Lakeside Sanitary District Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Town of Cave Creek City of Holbrook Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Population 350 5 ,000 2,150 4,137 14,000 933,000 3,000 5,100 933,000 1,000 933,000 933,000 933,000 16,100 16,100 690,000 1 ,000 119,000 690,000 5,100 933,000 47,000 933,000 1,000 933,000 16,000 933,000 933,000 933,000 3,500 5,100 667,000 933,000 Project Title Sewering Project Avenue B/C Colonia Sewer Collection & Conveyance System Water Reclamation Facility Upgrades Chino Meadow Sewer Project System Upgrade Roger Road WWTP: Rehabilitation Wastewater Treatment Plant Upgrades Retention Pond Expansion Ina Road Central Plant and Electrical Upgrade Wastewater Connections Ina Road WPCF: Denitrification New Marana WWTP Expansion Marana Regional Airport Sewer Connection Pinetop CC Vista Sewer Improvement District Richardson Lane Sewer Improvement District Irvington Landfill Closure North Area Sewer System Butler Drive Water Reclamation Facility Los Reales Landfill Groundwater Remediation Hill Sewer Expansion Project Ina Road WPCF: Laboratory and Office Building Reclaimed Water System Phase II Mount Lemmon Sewage System Wastewater Screen and Evaporation Pond Tanque Verde Interceptor - Craycroft to Tucson Country Club Jacques Marsh Expansion Roger Road WWTP to Ina Road WPCF: Plant Interconnect Miscellaneous Water Reclamation Facilities Miscellaneous Conveyance System Rehabilitation and Repair Phase I Sewer Project: Land Acquisition and Design Heavy Industrial Park Infrastructure Arivaca Junction WWTF Sewer Extension Santa Cruz Interceptor:Prince to Franklin Project # 028 2006 007 2006 027 2006 029 2006 001 2006 019 2006 024 2006 005 2006 011 2006 021 2006 013 2006 014 2006 015 2006 032 2006 033 2006 022 2006 030 2006 002 2006 023 2006 004 2006 012 2006 003 2006 017 2006 031 2006 020 2006 026 2006 018 2006 010 2006 016 2006 025 2006 006 2006 008 2006 009 2006 Requested Rate Index $ 2,500,000 70% $ 5,000,000 70% $ 1,500,000 70% $ 1,580,000 70% $ 9,000,000 70% $ 20,000,000 75% $ 6,050,000 75% $ 300,000 70% $ 12,000,000 75% $ 250,000 70% $ 17,000,000 75% $ 11,464,612 75% $ 2,800,000 75% $ 285,000 75% $ 347,000 75% $ 700,000 80% $ 7,250,000 85% $ 57,500,136 80% $ 300,000 80% $ 1,400,000 75% $ 9,000,000 80% $ 13,800,000 80% $ 7,200,000 80% $ 500,000 80% $ 8,520,000 80% $ 350,000 75% $ 23,000,000 85% $ 4,000,000 85% $ 15,000,000 85% $ 7,000,000 90% $ 958,750 80% $ 422,600 85% $ 25,487,500 85%

Exhibit B: 2006 Fund Cycle Fundable Range for Design Arizona's Clean Water Revolving Fund

Arizona's Clean Water Revolving Fund 2006 Funding Cycle   Fundable Range for Design Financial Assistance April 20, 2006

No borrowers requested design assistance for their projects as of the date of this report.

Exhibit C: 2006 Fund Cycle Fundable Range for Construction Arizona's Clean Water Revolving Fund

Arizona's Clean Water Revolving Fund 2006 Funding Cycle -- Fundable Range for Construction Financial Assistance April 20, 2006
Fundable Range Rank Rank 1 4 2 5 3 7 4 8 5 9 6 10 Applicant Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. Pima County Wastewater Management Dept. City of Tucson Project Title Roger Road WWTP: Rehabilitation Ina Road Central Plant and Electrical Upgrade Ina Road WPCF: Denitrification New Marana WWTP Expansion Marana Regional Airport Sewer Connection Irvington Landfill Closure Project # 2 0 0 6 19 2 0 0 6 11 2 0 0 6 13 2 0 0 6 14 2006 15 2 0 0 6 22 Amount Requested $2 0 , 0 0 0 , 0 0 0 $1 2 , 0 0 0 , 0 0 0 $1 7 , 0 0 0 , 0 0 0 $1 1 , 4 6 4 , 6 1 2 $2,800,000 $7 0 0 , 0 0 0

Exhibit D: Public Review and Comment Summary Arizona's Clean Water Revolving Fund

Exhibit D 2006 Funding Cycle   Public Review and Comment April 20, 2006

Public comment was conducted November 9, 2005 thru November 29, 2005. The public review and written comment period was advertised November 16th, 17th, and 18th in Arizona's three major newspapers. A public hearing was held in Phoenix on Tuesday, November 29, 2005 at the Arizona Department of Environmental Quality, 1110 W. Washington Street, Room 145, Phoenix, AZ 85007 from 10:00 a.m. to 12:00 p.m. No public comment was received at the hearing. No public comments were submitted during the public comment period. On Tuesday, November 29, 2005, WIFA staff made several technical corrections to the narrative section of the IUP. The final TA IUP and PPLs were adopted by the Board on December 21, 2005 and became effective on January 1, 2006.