What is the CWSRF Program?
The Clean Water State Revolving Fund (CWSRF) provides
loans at interest
rates lower than the market to political
subdivisions with the authority to own and operate a
wastewater system. The CWSRF also includes Federal (Tier
III) and Disadvantaged Communities funds that provide
even lower interest rates for those meeting the respective
criteria.
Who Can Apply?
Although nonprofit water supply corporations are considered
political subdivisions for various other TWDB programs,
they are not eligible to receive assistance from the
CWSRF.
How Can CWSRF Loans Be
Used?
| Loans can be used for planning, design, and
construction of : |
- wastewater treatment facilities,
|
- wastewater recycling and reuse facilities,
|
|
- stormwater pollution control projects; and
|
- nonpoint source pollution control projects
|
What Loan Terms are offered through the CWSRF?
The CWSRF offers fixed and variable rate loans at subsidized
interest rates. The maximum repayment period for a CWSRF
loan is 20 years from the completion of project construction.
A cost-recovery loan origination charge of 1.85% is
imposed to cover administrative costs of operating the
CWSRF. Applicants have the option to finance the origination
charge in their loan or to pay it at closing. An additional
interest rate subsidy is offered to those financing
the origination charge. Total loan amounts are limited
to $75,000,000 for the first nine months of the fiscal
year.
Interest rates vary according to the type of financing
selected and are locked in at closing:
- Fixed rate loans offer net long-term interest rates
at 0.95% below market rates for those applicants financing
the origination charge. For applicants who pay for
the origination charge from other sources, the interest
rate is 0.70% below market rates.
- Short-term, variable rate loans are also available.
Variable rates are available during the construction
period but must convert to a long-term, fixed rate
loan within 90 days of the completion of project construction.
The variable interest rates are generally about 2%
below the above-described fixed rates, or up to 2.95%
below market rates. Borrowers have the option to convert
to long-term, fixed rate financing at any time prior
to project completion.
- Federal funds offer an additional subsidy of 1.0%.
Interest rates are up to 1.95% below market rates.
- Disadvantaged Communities funds will offer loans
to eligible communities with populations under 25,000
at interest rates of 0% and 1%.
What is the Application
and Approval Process?
Pre-Application: |
Each year the TWDB notifies all potential entities
of the availability of funding and timelines
for the upcoming cycle. Prospective loan applicants
are asked to submit a CWSRF Intended Use Plan
(IUP) Information Form for inclusion in the
IUP. The Information Form describes the applicant’s
existing wastewater facilities, facility needs,
the nature of the project being considered and
project cost estimates. This information is
used to rate each proposed project and place
them in priority order on the IUP. Projects
are ranked in priority order in one of seven
different categories: six population groups
and one nonpoint source/bays and estuaries group.
Available funds are distributed among these
categories and funding lines are drawn. Entities
above the funding lines are invited to submit
applications. All applicants are encouraged
to schedule a pre-application conference that
will guide them through the CWSRF application
process. Funding lines are redrawn as necessary
and subsequent invitations are sent to prospective
applicants.
|
Application
and Commitment: |
Applications consist of an engineering feasibility
report and environmental information, as well
as general, fiscal and legal information. The
timeframe for submittal of an application is
the first business day of the month preceding
the month during which the applicant desires
TWDB Board consideration (e.g., due November
1 for Board consideration in December). Applications
for loans are considered for approval by the
TWDB Board at its monthly public meetings that
are generally held on the third Tuesday of each
month.
|
Loan Closing
Options: |
The CWSRF offers a pre-design funding option,
whereby an eligible applicant may receive a
loan commitment based on preliminary engineering,
environmental, economic and social information.
Pre-design funding allows for the release of
funds for completion of detailed planning and
environmental studies at closing. Funds for
design, preparation of final plans and specifications,
and construction are placed in escrow at closing
to be released when applicable.
If the pre-design option is not used, prior
to closing the applicant must develop plans
and specifications, obtain all necessary permits
and bid the project in order to determine the
exact amount needed for funding.
Applicants generally receive a two-year loan
commitment. All TWDB loans are monitored for
the life of the outstanding debt to ensure compliance
with all requirements and the maintenance of
a sound financial condition.
|
Are There Any Special Requirements?
- Applicants for loans greater than $500,000 must
adopt a water conservation and drought contingency
plan (a statutory requirement).
- Loans from the Federal funds (Tier III) portion
require compliance with various federal cross-cutter
requirements. Included in these requirements are:
a National Environmental Policy Act-type environmental
review, and compliance with the Board’s Small,
Minority, and Women-Owned Business Enterprise (SMWBE)
program, which requires applicants and prime contractors
to follow six affirmative steps in procurement. These
steps require loan recipients and prime contractors
to:
- include qualified SMWBE’s on solicitation
lists;
- Solicit potential SMWBE’s, whenever they
are potential sources;
- Reduce contract size/quantities, when economically
feasible, to permit maximum participation of SMWBE’s;
- Establish delivery schedules to encourage participation
by SMWBE’s;
- Use the services and assistance of the Small
Business Administration, Minority Business Development
Agency, and the U.S. Department of Commerce, as
appropriate; and
- Require all prime contractors to follow steps
1-5 when awarding subcontracts or sub-agreements.
- The document entitled “SMWBE State Revolving
Fund Program Guidance Document for the Utilization
of Small, Minority, and Women-Owned Business Enterprises
in Procurement” describes the program in detail
and is available online at: www.twdb.state.tx.us/publications/forms_manuals/SRF-052.pdf.
If you don’t have access to the Internet or
for specific questions regarding the required procurement
steps, please contact the Board’s SMWBE coordinator: (512) 463-1878. TWDB
staff is available to assist applicants in determining
the scope of investigation required, preparing reports
and coordinating with environmental regulatory agencies.
What Are the Special Terms
of Financial Assistance?
Security Instrument: Bonds
Pledge: System revenues and/or tax pledges are
typically required. Contract revenue pledges for river
authorities and others are possible.
Length of Loans: As of February, 2007, the maximum repayment period
for a CWSRF loan is 30 years from the completion of
construction. Bonds may not be pre-paid (called) for
approximately 10 years (10 year call provisions).
Interest Rates: The CWSRF offers fixed rate
loans and variable rate loans at subsidized interest
rates. A cost-recovery loan origination charge of 1.85%
is imposed to cover administrative costs of operating
the CWSRF. Applicants have the option to finance the
origination charge in their loan or to pay it at closing.
An additional interest rate subsidy is offered to those
financing the origination charge.
Interest rates vary according to the type of financing
selected and are locked in at closing:
-
Fixed rate loans offer net long-term interest rates
at 0.95% below market rates for those applicants
financing the origination charge. For applicants
who pay for the origination charge from other sources,
the interest rate is 0.70% below market rates.
-
Short-term, variable rate loans are also available.
Variable rates are available during the construction
period but must convert to a long-term, fixed rate
loan within 90 days of the completion of project
construction. The variable interest rates are generally
about 2% below the above-described fixed rates,
or up to 2.95% below market rates. Borrowers
have the option to convert to long-term, fixed rate
financing at any time prior to project completion.
-
Federal funds offer an additional subsidy of 1%.
Interest rates are up to 1.95% below market rates.
-
Disadvantaged Communities funds will offer loans
to eligible communities with populations of 25,000 or less
at interest rates of 0% and 1%.
Conditions to Close: Environmental Review and
Water Conservation Plans are in addition to financial
conditions. Upon Board commitment, a letter is provided
detailing all special conditions. General closing conditions
are in Board rules 30 TAC 375.71 through 363.73.
Applicable
Rules:
30 TAC 375. Subchapters A and B.
Where Can I Get More Information?
For further information on the Clean
Water State Revolving Fund (CWSRF) Program: 512-463-8510. |
