Section 33-15-IV - Financial Status of the DWSIRLFThis section outlines all sources of funding available to the DWSIRLF EC Program and indicates intended uses. This section also describes the financial assistance terms available through the Program.
A.Source and Use of FundsUsing the FFY-2022 EPA BIL EC Capitalization Grant allotment for Mississippi of $8,133,000 to provide for both loans and set-aside activities.
The FFY-2022 "Set-aside" use for the BIL EC 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 ProcessIn accordance with the Board's desire to maintain a financially sound DWSIRLF loan Fund in perpetuity, while at the same time meeting a substantial portion of the drinking water needs pertaining to projects that address emerging contaminants in drinking water in the state within a reasonable period of time, the following financial decisions were made regarding the Fund:
1. Application for the Full Amount of the BIL EC Cap Grant The Board intends that the MSDH apply for the full amount of the State EC 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 EC Cap grant.
2. Interest Rate Determination The EC Cap Grant project portion requires 100% principal forgiveness to loan recipients. There may be a small amount of interest accrued before principal forgiveness is applied. It is the Board's decision to offer 0% interest on DWSIRLF loans from the BIL EC fund.
C.Financial Terms of LoansThe 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-2024 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, during FFY-2022, 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 during FFY-2022 may obtain an additional award(s) or an increase to a previous FFY-2022 award, if no other eligible systems are evident.
2. Interest Rate Terms for BIL EC loans (There may be a small amount of interest accrued before 100% principal forgiveness is applied) will be 0% interest rate, with a repayment period of five years for all projects.
Interest will accrue based on the current loan agreement in conjunction with the DWSIRLF Regulations.
3. FFY-2022 BIL EC Cap Grant Special Provisions The FF Y-2022 BIL EC Cap Grant requires 100% subsidization of the BIL EC Cap Grant amount available for projects. 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 EC 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 EC projects is 100%. In all cases, loans will be DWSIRLF-eligible projects to address ECs in drinking water, with a focus on PFAS.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 EC Priority List for the FFY-2024 IUP expires on January 2, 2024. Projects listed in the FFY-2024 EC Priority List that do not receive funding by this date will not be funded under the FFY-2024 EC IUP and will be subject to the requirements of subsequent IUPs and Priority Lists. Detailed information for the FFY-2024 EC projects is shown in Section VIII of this IUP. To facilitate the use of federally appropriated funds from the FFY-2022 BIL EC Cap Grant, the priority list may be adjusted to allow funds to be disbursed according to the federal requirements.