33 Miss. Code. R. 14-IV - Financial Status of the DWSIRLF

This section outlines all sources of funding available to the DWSIRLF LSLR Program and indicates intended uses. This section also describes the financial assistance terms available through the Program.

A. Source and Use of Funds

Using the FFY-2022 BIL LSLR Capitalization Grant allotment for Mississippi of $30,518,000 to provide for both loans and set-aside activities.

The "set-asides" use for the FFY-2022 BIL LSLR Cap grant are outlined in Section V of this IUP. Necessary work plans showing utilization of these funds are found in the appendices of this IUP.

B. Financial Planning Process

In accordance with the goals of the LSLR fund of the DWSIRLF Program, the Board has made the following financial decisions regarding the Fund:

1. Application for the Full Amount of the BIL LSLR Cap Grant

The Board intends that the MSDH apply for the full amount of the State LSLR Cap grant allotment under the federal DWSRF, including the set-asides described in Section V below. No State match is required for the FFY-2022 LSLR Cap grant.

2. Interest Rate Determination

It is the Board's decision to offer 0% interest on DWSIRLF loans from the BIL LSLR fund.

C. Financial Terms of Loans

The following terms will be used for the purpose of making loans to the public water systems within the State of Mississippi.

1. Funding Limit

Under state law, the Board has the discretion to set the maximum amount for DWSIRLF loans. For FFY-2022 IUP, the Board has set a maximum loan amount of $5,000,000 per borrower. The Board may allow (on a case-by-case basis if requested by the borrower and the need has been justified) the maximum loan limit to be exceeded by a vote of the Board. Furthermore no more than one loan per borrower will be allowed. At the end of the fiscal year, if funds are available, systems previously receiving an award may obtain an additional award(s) or an increase to a previous award, if no other eligible systems are evident.

2. Interest Rate

Terms for BIL LSLR loans will be 0% interest rate, with repayment periods as follows:

1. For Lead Service Line Inventory project loans, a standard five-year repayment term, with the maximum repayment term of 10 years. The reason for the shorter repayment terms is that these projects are not capital projects and do not improve or build a physical asset owned by the water system.

2. For Lead Service Line Replacement project loans, a standard 20-year repayment term. The maximum loan amortization allowable will be 30 years, or 40 years for disadvantaged communities. These maximums may not, however, exceed the design life of the project.

Interest will accrue based on the current loan agreement in conjunction with the DWSIRLF Regulations.

3. FFY-2022 BIL LSLR Cap Grant Special Provisions

The FFY-2022 BIL LSLR Cap Grant requires 49% subsidization of the BIL LSLR Cap Grant Amount. This subsidization is expected to be in the form of "principal forgiveness", "negative interest rates," or a combination of the two.

4. Other Related Issues

a. Type of Assistance Provided: The assistance to be provided under the DWSIRLF Program will be loans to public, tax-exempt entities which are authorized under state law to collect, treat, store, and distribute piped water for human consumption; able to enter into a DWSIRLF loan agreement; and have the ability to repay the DWSIRLF loan. With the funds provided through the FFY-2022 BIL LSLR Cap Grant, the DWSIRLF program will be able to make loans that will have an amount of "principal forgiveness." The amount of principal forgiveness for the BIL LSLR FFY-2022 Cap Grant is 49% of the total Cap Grant. The Board has set a limit of 70% of the requested loan amount which a loan recipient may receive in subsidy for one loan. Once the limit of the appropriation subsidy funds has been reached for the FFY-2022 Cap Grant, loans will return to the DWSIRLF's standard terms without principal forgiveness. In all cases, loans will be LSLR projects and associated activities directly connected to the identification, planning, design, and replacement of LSLs.

b. Project Costs Eligibility: Eligible/allowable project costs will include those costs that are eligible, reasonable, necessary, and allocable to the project, within the established project scope and budget, in conformance with the DWSIRLF regulations and approved by MSDH.

c. Loan Participation: DWSIRLF loan participation will be at 100% of eligible project costs, less any funding made available from other agencies for these same eligible project costs.

d. Pre-Award Costs: Project costs incurred prior to loan award will be DWSIRLF loan eligible provided:

i. The debt is for work that has begun after the DWSIRLF loan award date.

ii. The project is in compliance with all applicable DWSIRLF Program regulations and obtains MSDH approval of all applicable documents prior to award of the DWSIRLF loan.

iii. The prospective loan recipient agrees that by incurring costs prior to loan award, it proceeds at its own risk and relieves the Board, the Department, and the Department's staff of all responsibility and liability should such costs later be determined unallowable for any reason or should such funding not become available for any reason.

iv. The prospective loan recipient agrees that by incurring costs prior to loan award, no future commitment of funding a refinanced project is provided.

e. Priority List: The LSLR Priority List for the FFY-2022 IUP expires on January 2, 2024. Projects listed in the FFY-2022 LSLR Priority List that do not receive funding by this date will not be funded under the FFY-2022 LSLR IUP and will be subject to the requirements of subsequent IUPs and Priority Lists. Detailed information for the FFY-2022 LSLR projects is shown in Section VIII of this IUP. To facilitate the use of federally appropriated funds from the FFY-2022 BIL LSLR Cap Grant, the priority list may be adjusted to allow funds to be disbursed according to the federal requirements.

Notes

33 Miss. Code. R. 14-IV

Adopted 9/4/2023