Governor’s Workshops for Local Leaders

MD Dept of Environment Stimulus overview (State revolving loan fund specifics)
- Jag Khuman, Water Quality Financing Administration

March  4, 2009

Mr. Patoka:  You know, really, I have to say this, as I see people filter in the room that do such great work for Baltimore, it really is nice to be back  in Baltimore City, so many friends here. 

Our next speaker is from the Maryland Department of the Environment and he'll speak on the State Revolving Loan Fund and other specifics and that's Jag Khuman. 

Mr. Khuman:   Good evening.  Very similar to the Department of Transportation, our program is pretty much going to be infrastructure.  We were fortunate to get a national appropriation of $6 billion for water and sewer infrastructure, essentially for building sewage plants and drinking water facilities.  And Maryland is going to be receiving $122 million.

We are also a little bit ahead of the curve in terms of allocation.  We know what we are going to be receiving and we also have the applications that -- applications already in, in terms of selecting projects that will be funded. 

The application  period actually ended last Friday and within two weeks we will have on our website entities that are going to be getting grants and/or loans. 

The selection process has not newly been developed, it's been the existing selection process, so it's very easy to go in, look at our existing State priorities, which is primarily  cleaning up the Chesapeake Bay, combining sewer overflows to cut down on sewage overflows,  drinking water compliance and some I and I reduction, which is all this water that comes into the sewer system.

All the existing systems are being applied.  But the good news is in the past most of the money was low interest rate loans.  The State is estimating that half the money -- at least half the money would go out in the form of grants.  And these grants to local municipalities will require no match. 

Interest rates -- we are further lowering our interest rates, since we got this additional stimulus money,  we are going to have interest rates on infrastructure at zero percent to one percent, depending on the affordability of the community. 

Twenty percent of the monies must go to what we call green infrastructure; water and energy efficiency type of projects, and environmentally innovative projects.  This was never in our charter initially, this is an add-on at the Federal level.  It's going to be interesting to see what kind of project applications we received. 

And to ease the pain for everybody, we -- the projects that get selected will get 100 percent grant money and we don't want to go through any process of them having inability to pay back those monies.

But still 80 percent of the money, more or less, will go for traditional wastewater and sewage facilities. 

We already have a disadvantaged community criteria defined, which is again not new.  There are certain communities that will qualify for grants and others will not.  It's based on  median household income of the community and also what your water and sewer rates are, relative to the income of the community. 

There's a lot of information on our program at our website and it's being updated as we get new information.  And the latest update also indicates that we will have a funding list posted by March 13th. 

Without getting into too much micro details, what I will do is wait until any specific questions come up related to water and sewer infrastructure. 

But the program is pretty much laid out.  We have to get our grant application to EPA by mid-March.  We expect to have the Federal money awarded to us no later than mid-April.  The caveat is these projects must go to construction within 12 months, so we put a deadline that any project that is not in construction by December 2009 will be bypassed with other projects that may be on the waiting list.  

It's a use it or lose it proposition from the Feds.  If the monies are not given to a project that's not under construction within 12 months those monies go to other States.  And we certainly don't want to be in that position.

We are telling most of our clients -- applicants, that as we make the selection for projects, we want to see biddable -- very similar to MDOT -- biddable plans and specifications, hopefully by mid-year, June, July, otherwise you're never going to make the notice to proceed by December 31st.  It's a very tight timeline, but whoever is shovel-ready has a good chance. 

And I'll stop here.  And I'll take any questions at the end.   (Applause.)

Mr. Patoka:  Thanks, Jag. 

 

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