MEETING THE CHALLENGES OF LOCAL INFRASTRUCTURE FINANCING

New Mexico Finance Authority

Community Development Block Grant Workshop Las Cruces, NM - October 5, 2011

NMFA Mission Statement2

We are dedicated to improving the lives of New Mexicans by planning and financing

infrastructure, strengthening the economy through public/private partnerships and

setting the standard for superior, diverse, innovative and solution-driven financing.

2009 Highlands University Student Union Building in Las Vegas $14,000,000

A Little Bit About the NMFA…3

The NMFA is a governmental instrumentality established in 1992 and administers 16 Programs.

1994 Public Project Revolving Fund

1994 Primary Care Capital Fund

1995 Stand Alone Bond Programs

1997 Drinking Water State Revolving Fund

1999 Water and Wastewater Grant Fund

2001 Water Project Fund

2002 Local Government Planning Fund

2003 Child Care Revolving Loan Fund

More information available at nmfa.net

2003 Statewide Economic Development Finance Act (Smart Money Loan Participation Program)

2004 Behavioral Health Capital Fund

2004 Governor Richardson’s Investment Partnership

2005 Local Infrastructure Transportation

Fund

2005 Energy Efficiency & Renewable

Bonding Act

2007 Local Government Transportation

Fund

2007 New Markets Tax Credit Program

2011 Las Colonias Infrastructure

Fund

NMFA Client Services 4

Who we are? NMFA financial advisors and analysts travel statewide to assist

communities with their financial needs.What we do?

We are here to help New Mexicans by assisting in both planning for the future and in developing and improving community’s sustainability.

How we do it? By meeting with communities to determine their needs.

We have partnerships with 104 Municipalities 33 Counties 91 Special Districts 72 Executive Agencies

The Authority has financed over 1,606 projects totaling over $2.418 billion.

Highlighting NMFA Programs

nmfa.net

5 Public Project Revolving

Loan Fund (PPRF) Local Government Planning

Fund (Planning Grants) Water Trust Board/Water

Project Fund Drinking Water Revolving

Loan Fund Energy Efficiency &

Renewable Energy Bonds Stand Alone Bonding Innovative Bonding such as

BABs, Recovery Zone, Qualified School Construction Bonds, etc.

The Public Project Revolving FundOur “flagship” program

6

Reaching all of New Mexico with our largest and most diverse program. Infrastructure Buildings Equipment Refinancing

Requires Legislative Authorization for projects over $1 millionNMFA is the state benchmark for bond/loan

issuance Comparing our pricing to a private bank can give you

negotiating leverage to lower your overall cost.

PPRF Refundings7

With current low interest rates and various structuring possibilities, Local Governments have taken advantage of refunding debt obligations through the PPRF to:

Capitalize on current interest rates to create economic savings. Shorten the term of the debt outstanding. Consolidate multiple debt obligations into one structure. Refund for technical reasons, such as security and revenue

realignment, better cash flow management, and/or for other long term financial strategies.

*Refundings for economic savings must have a minimum 3% net present value savings

Water Programs8

Local Government Planning Fund (Planning Grants) Need Based Program based on rates and median household income Limited to PERs, feasibility studies and master plans (can be used for

economic development)Water Trust Board/Water Project Fund

Since its creation, the WTB has recommended more than $197 million of funding for 195 projects statewide

16 Member Board empowered to assist the New Mexico Legislature in prioritization and funding statewide water projects

Makes loans/grants to qualified entities for projects annually Drinking Water Revolving Loan Fund

Federal program with advantageous interest rates over 20 years Two year construction period with interest only payments. Can qualify for some loan forgiveness.

More information available on nmfa.net.

Water Trust Board Funding Cycle-2012

9 Application Cycle Opens

October 3, 2011Applications

DueNovember 4,

2011 Project Management Team

& Legal Review for Eligibility,

Project Readiness, & Applicant Readiness

Water Trust Board Meeting

Jan 11, 2012Recommendation

for Legislative Authorization

Legislative Session

Jan 17 – Feb 16, 2012

Project Authorization

Water Trust Board Public

PresentationsMar 28, 2012

Water Trust Board Meeting

Apr 25, 2012

Funding Determination

New Mexico FinanceAuthority Board Meeting

May 24, 2012

Approval on Funding Structure & Terms

Tier I Review-60%

Tier II Review

NMFA Leverages Federal Dollars10

The NMFA has taken the lead to try to leverage every Federal and State dollar possible in order to serve all the communities in New Mexico

Bringing all Federal programs to the table to try to work collectively to utilize multiple sources to fund projects.

Putting communities in touch with all the available federal and state Planning Grants and helping the communities move forward on their projects.

NMFA Leverages Federal Dollars11

Many Federal programs have a match component. Entities can use the NMFA to meet this match

Some Federal programs are on a reimbursement basis. Entities can fund their project upfront then collect

reimbursement at a future date

NMFA Leverages Federal Dollars12

Example of Federal Leveraging Colonias Dollars for FY11

USDA – $10 millionCDBG – $2 millionBECC – $10 millionColonias Infrastructure fund – $13 million

(est.)

Free Money – Gone with the Wind13

• Capital Outlay – None last session, none in 2009 or 2010, unlikely in 2012

• CDBG – Still there, requires local match, capped at $500,000, competition is stiff and only low MHI qualify

• EPA STAG – aka “earmarks”, a dying breed• Water Trust Board – Now requires loan and

match components

In the Future Project must Promote Sustainability14

• EPA and the State expect projects to promote sustainability

• All applicants will be reviewed for minimum criteria to determine their level of compliance with applicable regulations and their capacity for sustainability

What are the Sustainability Criteria?15

• Human Health & Safety• Compliance with regulations• Appropriate planning – ICIP, PER, EID• Asset Management & Rate Analysis• O&M plan and funding• Green Projects• Conservation, Reuse, and Accountability• Adequate Governance• Regionalization• Leveraging• Readiness to proceed – plans & specs

How to find Water/Wastewater Money16

• Water Infrastructure Portal (WIP) – Gateway to the funding world

• One Project Interest Form (PIF) to access a variety of funding sources via SWIM

• http://www.nmenv.state.nm.us/ (Click on the money)

Sustainable Water Infrastructure Management (SWIM) Process

17

Project Interest Form (PIF) Evaluation18

NMED-DWB

Partners DFA

OSE

Others

PIF Evaluation Outcomes19

After evaluating the proposed project information submitted by the community along with all other supporting compliance, capacity and long-term sustainability information generated the Community Services Group recommends:

Infrastructure Funding System The community be informed that having met basic funding criteria there is the

likelihood of possible funding for the proposed project from one or more funders. As a result, the proposed project will be logged into the Infrastructure Funding System (IFS) with a view to further consideration and review by funding agencies

Sustainability Action System The community be informed that it does not appear at this stage to have met

basic funding criteria and that the likelihood of funding for the proposed project at this time is not high. As a result, the proposed project will be logged into the Sustainability Action System (SAS) with a view to the Community Services Group developing an Action Checklist (AC) of steps that the community may consider taking to increase the likelihood of funding in the future.

How to Get to the Head of Line?20

• Consider sustainability in project planning and Green components

• Use SWIM to access public funding• Observe the funding evaluation criteria and

plan for it• Enlist help of NMED-CPB Community

Service Unit – Graham Knowles 505-222-9537 graham.knowles@state.nm.us

NMFA is Here to Serve You21

NMFA offers services at reduced costs with more interest savings.

NMFA is your partner in building a sustainable future.

Here are some recent examples of great projects we have done across the state…

Where: Kewa Pueblo

Project: Safety Complex

Type of Project: PPRF Building

Project Description: In 2003, Governor Chavez put together a twenty year plan to better Kewa Pueblo in many respects. Part of this plan was to build a safety complex to benefit all community members as well as visitors.

The total Complex cost was $3.5MM. NMFA helped complete the project with a $1.1MM low-interest loan secured by pledge of their gasoline sharing agreement with the state.

22 Kewa Pueblo Safety Complex 2010

Community Benefit: Kewa had worked for years to find funds to complete the project. They received most of the funding from State Capital Outlay as well as the Tribal Infrastructure Fund. The NMFA is proud to have provided the final piece. The structure is available to state and county police. The Pueblo hopes to soon start its own Fire Department as well.

Where: Carlsbad

Type of Project: Water Trust Board/ Water Project Fund

Project Description: This project incorporates the planning a design of the Double Eagle Waterline Improvements.

The Water Trust Board awarded the City with a $1.5MM loan/grant combination to support planning and design. The City has also enacted its Capital Outlay GRT and will be contributing $12MM. The total project cost is estimated at $26,729,565.

23

Carlsbad Waterline Project 2010

Community Benefit: This will be the main source of water over a vast region that will include; Carlsbad, Otis, happy Valley, La Huerta, Loving, Malaga as well as supply water to the local oil and gas industry, ranchers and the US Department of Energy WIPP site.

Pecos River Flume

Where: Columbus

Type of Project: PPRF Water Infrastructure

Project Description: A New water distribution project. This project was a PPRF loan for $175,000 that included the installation of water pipe, service connections, electronic read meters, and a new hydro-pneumatic pump station to increase volume and water pressure for fire flow.

24Columbus Water Distribution

Project 2009

Community Benefit: The new system was very much needed and will help improve the health and safety of the nearby residential neighborhood as well as the new Columbus Elementary School by increasing flow for fire protection.

New Pump Station

Where: Glorieta, Glorieta Estates, and East Glorieta

Type of Project: Local Government Planning Fund

Project Description: All three communities are pooling funds to create a regional preliminary engineering report that will address their individual issues as well as the feasibility of a regionalization effort.

The PER will cost $50,000.

25

Glorieta Regional Planning 2010

Community Benefit: Each community needs to address pressing issues. Glorieta Estates has a uranium issue, Glorieta East has old and outdated infrastructure, and Glorieta needs to find a new solution for its wastewater.

The three communities have been meeting for over a year to help eachother find solutions to these and other problems. Over time, the communities plan on becoming one system and even inviting new neighbors to join.

Where: Farmington

Type of Project: ARRA Drinking Water Loan Fund

Project Description: The project consisted of upgrading water and sewer lines from the 1950’s population boom.

The NMFA provided ARRA funds in the amount of $2,109,688. 50% of that amount was a subsidy from the ARRA Drinking Water Funds. The normal drinking water program did not include a subsidy, however it has been continued in 2012.

26 Farmington Waterline Project 2009

Community Benefit: This project will help improve both the water quality and public safety in a one-year time frame and will save the community a lot of funding for future projects with the federal subsidy.

Farmington Riverwalk

NEW MEXICO FINANCE AUTHORITY207 SHELBY STREETSANTA FE, NM 87501

(505) 984-1454TOLL FREE 1 -877 ASK NMFAFACSIMILE (505) 992-9635

WWW.NMFA.NET

¡Believing in New Mexico!