02-A WTP Improvement GrantDRAFT
F:kAttorneykALICEhO. ESWORK\CURRENT\Tx Water Dev Bd - WTP Loan Application Res.wpd
January 26, 2004
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, AUTHORIZING THE PREPARATION, EXECUTION, AND
FILING OF AN APPLICATION WITH THE TEXAS WATER
DEVELOPMENT BOARD FOR A LOAN FROM THE TEXAS DRINKING
WATER STATE REVOLVING FUND (DWSRF) PROGRAM TO FINANCE
NECESSARY IMPROVEMENTS TO THE CITY WATER TREATMENT
PLANT; AUTHORIZING THE SUBMITTAL OF ANY SUPPORTING
DOCUMENTATION NECESSARY IN FURTHERANCE OF COMPLETION
OF SAID APPLICATION; AUTHORIZING THE CITY MANAGER, CITY
ENGINEER, CITY FINANCE DIRECTOR, AND CITY ATTORNEY TO
REVIEW, SIGN, OR SUBMIT DOCUMENTATION AS REQUIRED IN
FURTHERANCE OF SAID APPLICATION; MAKING OTHER FINDINGS
AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN
EFFECTIVE DATE.
WHEREAS, the City Council of the City of Paris, Paris, Texas, has previously authorized
the preparation of a study and report by Freese & Nichols, Inc., Professional Engineers, to determine
the production capability of the City's existing Water Treatment Plant, including the identification,
quantification, and estimated cost of any necessary improvements to said plant; and,
WHEREAS, Freese & Nichols Engineers presented to the City Council a summary of their
findings associated with said study during the course of City Council's January 12, 2004, Council
Meeting; and,
WHEREAS, among other things, the aforesaid report identified deficiencies in the existing
treatment plant which by their nature would limit the production capability of said plant from the
anticipated 32 million gallons per day to only 20 million gallons per day, said deficiencies including
the need for improvements to the City's sedimentation basins and other infrastructure; and,
WHEREAS, Freese & Nichols Engineers, in the substance of said report, likewise
recommended the City undertake the first two of three phases of proposed improvements to said plant
as expeditiously as possible to raise the plant's capabilities consistent with the remainder of its design;
and,
WHEREAS, Freese & Nichols Engineers has advised the City that by virtue of preparing
said report, said report would satisfy State regulatory requirements imposed by the Texas Water
Development Board incident to the City being able to receive loan funding from the Texas Water
Development Board through the Texas Drinking Water State Revolving Fund (DWSRF) Program
to finance the aforesaid necessary improvements to the City's water treatment plant, with said loans
to be given to the City at very favorable interest rates substantially below current market rates; and,
WHEREAS, the City Council desires to pursue the availability of said loan by filing the
necessary application forms with the Texas Water Development Board and by posting same by the
State's deadline of Wednesday, January 28, 2004; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS,
TEXAS:
Section 1. That the findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. That an application with accompanying documentation be made to the Texas
Water Development Board for a loan from the Texas Drinking Water State Revolving Fund
(DWSRF) Program, at such interest rate and on such terms and conditions as the Water Development
Board shall impose, said loan to be in the amount necessary to finance phase one and phase two of
those improvements identified by Freese & Nichols Engineers in a recent study of the City's water
treatment plant.
Section 3. That the City Manager be, and he is hereby, appointed as the authorized official
of said loan application process and is authorized and directed to execute, on behalf of the City of
Paris, all documents incident to the aforesaid loan application under the terms and conditions and in
the form approved by the City Attorney.
Section 4. That the City Engineer be, and he is hereby, appointed as project director and is
hereby authorized to execute and deliver on behalf of the City of Paris, all reports, communications,
assurances, and other documents necessary and incident to the completion of the City's application
for said loan.
Section 5. That the Director of Finance be, and he is hereby, authorized and directed to serve
as the finance officer for said loan and to prepare any and all information or documentation as
required by the Texas Water Development Board incident to the approval of said loan.
Section 6. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 28th day of January, 2004.
Curtis Fendley, Mayor
ATTEST:
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
Larry W. Schenk, City Attorney
Drinking Water State
Revolving Fund
(DWSRF) Program
WHAT IS THE DWSRF PROGRAM AND WHO CAN
APPLY?
The Drinking Water State Revolving Fund (DWSRF) provides loans at interest rates
lower than the market offer to finance projects for public drinking water systems that
facilitate compliance with primary drinking water regulations or otherwise significantly
further the health protection objectives of the federal Safe Drinking Water Act (SDWA).
Applicants may be a political subdivision of the state, a nonprofit water supply
corporation, privately-owned water system and state agencies.
HOW CAN DWSRF LOANS BE USED?
Loans can be used for the planning, design, and construction of projects to upgrade
or replace water supply infrastructure, to correct exceedances of SDWA health
standards, to consolidate water supplies and to purchase capacity in water systems.
DWSRF loan proceeds can also be used to purchase land integral to the project.
Under the Source Water Protection Program, an applicant may apply for a loan to
purchase land or conservation easements, if the purpose of the purchase is to protect
the source water of a public system from contamination and to ensure compliance with
national primary drinking water regulations.
WHAT LOAN TERMS ARE OFFERED THROUGH THE
DWSRF?
The DWSRF offers a net long-term interest lending rate of 1.2 percent below the rate
the borrower would receive in the open market at the time of loan closing. The maximum
repayment period for most DWSRF loans is 20 years from the completion of
construction. A cost-recovery loan origination charge is imposed to cover the
administrative costs of operating the DWSRF, but an interest rate subsidy is offered to
offset the charge.
WHAT IS THE APPLICATION AND APPROVAL
PROCESS?
PRE-APPLICATION:
Prospective loan applicants are asked to submit a brief DWSRF Information Form DW-
006 to the Texas Water Development Board (TWDB) each year for inclusion in an
Intended Use Plan (IUP) developed for that year. For Fiscal Year 2002, the form must be
submitted to the TWDB and must have been postmarked not later than February 5,
2001. The Information Form describes the applicant's existing water facilities, additional
facility needs and the nature of projects being considered for meeting those needs and
project cost estimates. The Texas Commission on Environmental Quality (TCEQ)
prioritizes potential DWSRF loan applicants project using information contained in their
files. Loan funds are distributed based upon the priority rating and an applicant's
readiness to proceed.
TWBD staff will notify prospective applicants of their priority rating and will encourage
them to schedule a pre-planning conference for guidance in preparing the engineering,
planning, environmental, financial and water conservation portions of the DVVSRF
application.
Click HERE to access the Program Guidance Manual, and other forms and guidelines.
Click HERE to access the DWSRF Priority List for FY 2004.
APPLICATION AND COMMITMENT:
The applicant must submit an engineering feasibility report and environmental
information, as well as general, fiscal, and legal application information (Financial
Assistance Application Procedure Guidelines ~) to the appropriate TWDB regional
project manager for staff review. These application materials must be submitted by the
first business day of the month preceding the month during which the applicant desires
Board consideration. The applicant is encouraged to meet with TWDB staff for
assistance in the preparation of the application and to discuss the terms of the loan.
Completed applications for DWSRF loans are considered by the Board usually in Austin
on the third Wednesday of each month, at which time the Board may commit to fund the
project. Tentative Meetinq Schedule
LOAN CLOSING OPTIONS:
Using the TWDB pre-design funding option, an eligible applicant receives a loan
commitment based on preliminary engineering, environmental, economic and social
information. Because the DWSRF program is a reimbursement program due to U.S.
Environmental Protection agency requirements, DWSRF loans are closed in
installments. The interest rate is locked in at the first installment loan closing. Approved
applications typically receive a two-year commitment. The applicant's ability to repay the
loan is the major determining factor in the approval for using the pre-design funding
option. If the pre-design funding option is not used, the applicant must develop plans and
specifications and have them approved, obtain all necessary permits, and open bids
prior to closing the first installment of the loan.
FUNDING AND MONITORING:
Prior to loan closing, the applicant submits a final bond ordinance or resolution to the
TWDB for review and approval. The applicant's bond counsel arranges for the approval
of the debt by the Attorney General's office and the financial adviser schedules a closing
date for the exchange of debt for loan money. The applicant and TWDB staff monitor the
project during the construction process. Loans are monitored by TWDB staff for the life
of the outstanding debt to ensure compliance with the bond indenture requirements and
the maintenance of a sound financial condition.
ARE THERE ANY SPECIAL CONSIDERATIONS?
Applicants for loans greater than $500,000 must adopt a water conservation and drought
contingency plan (a statutory requirement).
A National Environmental Policy Act type environmental review is required by the
SDWA. TWDB staff is available to assist applicants in determining the scope of
investigation required, preparing reports, and coordinating with environmental regulatory
agencies. TWDB archeologists may also assist applicants by conducting necessary
archeological surveys, when appropriate, and securing regulatory agency approval.
WHAT ARE THE SPECIAL TERMS OF FINANCIAL
ASSISTANCE?
Security Instrument: Political Subdivisions will need to issue Bonds. Private and
Nonprofit organizations may issue contract.
Pledge: System revenues and/or tax pledges are typically required. Contract revenue
pledges for river authorities and others are possible.
Length of Loans: The maximum repayment period for a DWSRF loan is 20 years from
the completion of construction. Bonds may not be pre-paid (called) for approximately 10
years (10 year call provisions).
Interest Rates: The DWSRF program can provide funds that are either from State
sources or funds directly made available by Federal capitalization grants. The Federal
Capitalization Grant funds result in an overall lower interest rate but requires additional
planning and procurement requirements. There are two additional choices of loan terms
for borrowers under each source of funds: One (1) a traditional long-term, fixed-rate at
the beginning of construction or (2) a short-term, variable-rate construction period loan
that converts to a long-term, fixed-rate loan within 90 days of the completion of
construction. Borrowers also have an option to convert to long-term, fixed-rate financing
at any time prior to project completion. For loans made with State sources, the borrower
receives a net long-term interest rate of 0.7 percentage points below the rate the
borrower would receive on the open market at the time of loan closing. For loans made
with Federal Capitalization Grants, option, the borrower receives a net long-term interest
rate of 1.20 percentage points below the rate the borrower would receive on the open
market at the time of loan closing. The short-term, variable interest rate will generally be
about 2 percentage points below long-term market rates in effect at the time. An
administrative cost-recovery charge is imposed to cover administrative costs of
operating the CWSRF, but an additional interest rate subsidy of 0.25 basis points is
offered to offset the charge.
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 31 TAC 371.71 and
371.72.
Appficable Rules: 31 TAC 371 Subchapters A through H. To access these rules click
here.
WHERE MAY I GET MORE INFORMATION?
For further information on the Drinking Water State Revolving Fund (DWSRF) Program,
please contact the Texas Water Development Board's Office of Project Finance and
Construction Assistance, Program and Policy Development Division at (512) 463-3119.
Maintained by:
Will Ed Winters
wwi nte rs@TWD B. State. Tx. U S
(512) 463-8499
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