Public Agency:

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Bond, Consulting or Both:

Practice Areas:

NHA Contributions: NHA was brought in to serve as a project manager and advisor after the City had a winning bidder. The City desired to award the contract but was unable to until adequate funding was secured. To meet the accelerated timeline, NHA created a comprehensive funding and construction draw-down schedule that helped enable all parties to stay coordinated and meet key deadlines.

Due to project delays, the USDA loan application had been in progress for five years and required a funding extension. NHA managed the process of applying for an extension and submitted the 611-page application for extension on behalf of the City. The application was approved by USDA without complication.
Securing SRF or USDA funding was contingent upon securing a loan from the other agency. NHA worked with the City’s grants consultant to ensure that both agencies were kept aware of the status of the other agency’s loan.

To meet each agency’s requirements regarding acceptable uses of funding and deadlines to utilize grant and loan funds, NHA developed an analytical model that allocated funding to project costs in line with each loan’s stipulations and prioritized use of funds from each source that helped the City to draw down funds prior to the respective deadlines.

Finally, NHA worked with the City to secure a $2M line of credit to help ensure that the City would have adequate liquidity to pay construction invoices while waiting for reimbursement from SRF and USDA.

Project Completion: August 2018

NHA Contact: Eric Scriven, Mark Northcross and Christian Sprunger

Farmersville Wastewater Treatment Plant

Unique Characteristics of Project: Holistic financing approach leveraged three revenue sources and a line of credit for interim funding needs in order to fund a new $23.6 million wastewater treatment plant, the largest capital project ever completed by the City. The approach required significant coordination between Clean Water SRF and USDA.

Executive Summary: NHA worked with the City to secure financing from multiple alternative sources for their wastewater treatment plant upgrades. Local median income and poverty rates in this heavily agricultural community meant that financing the $23.6 million plant improvements through a traditional bond offering would necessitate drastic rate increases. Instead, the financing plan aimed to acquire below-market rate loans through Clean Water SRF and USDA to minimize these required rate increases. The City’s demographic profile met SRF’s “Disadvantaged Community” definition, and City hoped to take advantage of SRF grants and SRF loan forgiveness programs in addition to a loan.

The final funding package was a combination of City reserves, USDA loan, SRF loan, SRF principal forgiveness loan, and SRF disadvantaged community grant. These five sources of project funding were successfully secured in time to enable the City to sign a contract with the winning bidder prior to the project’s bid expiration deadline.