Minnesota Public Facilities Authority

Technical Amendments Bill (SF 613 / HF 819) Clean Water Legacy Fund Programs • Total Maximum Daily Load (TMDL) Grant Program [MS 446A.073] o TMDL process is required under the federal Clean Water Act to address impaired waterbodies. TMDL implementation plans can result in municipalities having to meet permit requirements to provide additional levels of treatment to reduce specific pollutant discharges. o Current Program: The TMDL grant program provides grants for 50% of eligible costs up to $3,000,000 to help municipalities implement wastewater and stormwater projects required by a TMDL implementation plan. o Proposed changes:  Expand eligibility criteria to include all projects where municipalities are required through their permit to implement more stringent than secondary ww treatment limits, whether or not they are part of a TMDL implementation plan. • Includes phosphorus reduction projects, eliminating the need for a separate phosphorus reduction program. • Includes nitrogen limits for land based treatment systems.  Proposed program name change: Point Source Implementation Grants Phosphorus Reduction Grant Program [MS 446A.074] o Current Program: The Phosphorus Reduction grant program provides 50% grants up to $500,000 to help municipalities implement projects to meet permit requirements to reduce phosphorus discharges to 1 milligram per liter or less. o Proposed change:  Eliminate as a separate program and include phosphorus projects in the expanded eligibility criteria for Point Source Implementation Grants program as described above. Small Community Wastewater Treatment Program [MS 446A.075] o Minnesota has a limited number of very small communities with serious environmental and public health problems from failing septic systems. In many of these communities individual private systems are not feasible or affordable due to small lots, poor soils, and limited financial capacity. o The Small Community program provides technical assistance grants for site evaluations and feasibility studies and construction loans and grants for new individual and cluster subsurface sewage treatment systems (SSTS) that will be publicly owned and operated.
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o Current program:  Technical assistance grants up to $40,000 ($10,000 base plus $500 per household) to hire a consulting engineer or other qualified organization.  Construction funding up to $500,000 per year for up to three years. Loans at 1% interest, with 50% grants if the community has below average MHI. o Proposed changes:  Increase technical assistance grants to $60,000 and make counties eligible to receive technical assistance funds for specific project work.  Increase maximum construction award to $2,000,000 and establish a grant formula based on per household affordability criteria similar to the WIF program (grant percentages will vary from 0 to 80%). Wastewater Infrastructure Funding (WIF) Program • WIF program provides supplemental assistance funding for high cost, high priority wastewater projects based on affordability criteria in MS 446A.072, subdivision 5a(b). o Prior to 2005, WIF assistance was provided in the form of grants that were packaged with 20 year Clean Water Revolving Fund loans or as a match to USDA Rural Development funding. o From 2005 to 2010 WIF statutes were changed to provide assistance in the form of 0% deferred loans in order to allow PFA to provide longer term financing for consistency with funding from USDA Rural Development. Payments on the WIF loans are deferred until after the CWRF loan is repaid. Sixteen WIF deferred loans were made totaling $28 million. o In 2011 WIF assistance was changed back to grants after federal changes allowed Clean Water Revolving Fund loan terms up to 30 years. The proposed initiative would allow municipalities that received deferred loans from 20052010 to have some or all of WIF loans to be converted to grants based on the current affordability criteria. Repayment of any remaining loan principal would continue within the scheduled loan term. Based on current information, the following 11 WIF loan recipients would be eligible to have some or all of their WIF loan converted to grant.
Recipient Alborn Township Alexandria LASR Brooten Hudson Township Kandiyohi County M adelia M urray County Richmond Saint Hilaire Sturgeon Lake Willmar Total Project Cost 760,571 5,811,079 2,311,543 3,538,741 4,970,000 4,822,400 14,158,287 8,316,162 1,490,216 6,943,786 81,516,873 134,639,659 WIF Loan 480,000 842,770 419,503 513,315 1,208,124 89,587 3,589,451 1,051,299 282,304 2,447,828 7,000,000 17,924,181

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