Patrick Denne
Memorial Scholarship Application
WE WANT TO HEAR FROM YOU!
Has an NDRWSA employee helped your system with a problem? Did a
Circuit Rider help you find a water leak? Have you attended one of our
training classes and thought the trainer did an excellent job? Well if
so, we want to hear from you! Take this opportunity to give a "THANKS"
or "GREAT JOB" to an NDRWSA employee. If you would like to show your
appreciation for a job well done, please email comments to our office at:
ndrw@ndrw.org or you can send a letter
to: 2718 Gateway Avenue, Suite 201 Bismarck, ND 58503-0585
2718 Gateway Avenue Suite #201
Bismarck, ND 58503
Financing Options
Bond Sale
Revenue bonds and improvement bonds may be sold at private or public
sale. Typically, because a water district must tell its story (or
explain in detail its financials and history) to a potential purchaser,
bonds are most often negotiated to a particular purchaser. Several
sale options are available and certain purchases have programs
sopecifically geared toward water and wastewater systems.
The following options are those most commonly utilized by water
districts. With each of these programs, a water district may sell
either a revenue bond or an improvement bond. The interest rate on a
revenue bond compared to the interest rate on an improvement bond may or
may not differ, depending on the particular sale option.
- Regional Underwriters. Several regional underwriters
will purchase water district bonds and then resell the bonds to their
investors. The specifics of the bond issue, such as debt service
reserve, the additional bonds test and the rate covenant are all items
that can be negotiated with the underwriter.
- Banks. Local banks are sometimes interested in
purchasing bonds. Water districts may negotiate
and sell bonds directly to a local bank. Bonds sold to banks must
be "bank qualified", that is, the water district must not issue more
than 10 million dollars in bonds in the year in which it sells bonds to
a bank. Also, banks sometimes will not fix the interest rate for
more than 5 years, while other sale options allow the district to fix
the interest rates for much longer term.
- USDA - Rural Development.
USDA administers a water and waste disposal loan and grant program.
The program is to help develop water systems in rural areas and towns
with population not in excess of 10,000. The loan funds are
available to public entities including water districts. Grants may
be made for up to 75 percent of eligible project costs in some cases.
The same types of applicants that are eligible for loans are also
eligible for grants. USDA require interim financing during
construction if such financing is available at reasonable rates.
- North Dakota Public Finance
Authority. The North Dakota Public Finance Authority
together with the North Dakota Department of Health administer the clean
water state revolving fund (SRF) loan program for wastewater projects
and the drinking water state revolving fund loan program for water
projects. Federal grants help keep the interest rates low.
Currently, SRF loans have a fixed interest rate of 2.5% plus 1/2% annual
administrative fee. While revenue bonds may be issued for up to 40
years and improvements bonds for up to 30 years, the SRF program has a
maximum maturity of 20 years.
- Bank of North
Dakota. The Bank of North Dakota administers a community
water facility loan program. This program provides low interest
(3.00%), long term loans in connection with federal funding.
- North Dakota Rural Water Finance
Corporation. The North Dakota Rural Water Finance
Corporation was created by the North Dakota Rural Water Systems
Association in 1998 for the purpose of providing interim financing for
construction projects. Interim financing is available for
communities which have received a permanent loan commitment for USDA.
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E-mail
ndrw@ndrw.org
with questions or comments about this site.
Copyright © 2001 ~ North Dakota
Rural Water Systems Association.
Last modified: ~ Friday, December 21, 2007 |
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