Table Of Content

BROADWATER, JUDY 13^373.9011 PLANNING AND C18PF FINANCING 1997 COMMUNITY WATER AND SEWER SYS^TEMSNNING AND IN MONTANA COMMUNITY FINANCING WATER AND SEWER MONTANA. SYSTEMS IN STATE DCCUMCITS COLLECTION Fourth Edition 130/ ««< iSBsrf :ntana state library 1515 E. 6th AVE. HELE.\A, MONTANA 59520 iVIONTANA DEPARTIVIENT OF COMMERCE LOCAL GOVERNMENT ASSISTANCE PROGRAM AND NORTHERN MONTANA COLLEGE MONTANASTATELIBRARY 3 0864 0010 1858 2 PLANNING AND FINANCING COMMUNITY WATER AND SEWER SYSTEMS MONTANA IN FOURTH EDITION July 1997 CONSULTANTS Doris Roberts, Montana State University - Northern Barbara Coffman, Montana Environmental Training Center EDITOR Judy Broadwater, Montana Department of Commerce ORIGINAL RESEARCH BY Robert Peccia and Associates, Helena, Montana Robert M. Murdo, Helena, Montana PUBLISHED BY Montana Department of Commerce Treasure State Endowment Program FUNDING FOR PUBLICATION OF THE FOURTH EDITION WAS PROVIDED BY THE MONTANA DEPARTMENT OF COMMERCE. TREASURE STATE ENDOWMENT PROGRAM Li5 (A ^H - .^'^: " -i ^ PROJECT PARTICIPANTS Fourth Edition Consultants: Doris Roberts, Montana State University/Northern Barbara Coffman, Montana Environmental Training Center For the Montana Department of Commerce: Peter Blouke, Director Robb Mc Cracken, Treasure State Endowment Program Newell Anderson, Montana Coal Board Judy Broadwater, Treasure State Endowment Program Jim Edgcomb, Treasure State Endowment Program Gus Byrom, Community Development Block Grant Program For the Montana Department of Environmental Quality: Barbara Neuwerth, State Revolving Fund Loan Programs Tom Slovarp, Planning, Prevention and Assistance Division For the U.S. Department of Agriculture, Rural Development: Mitchell R. Copp, Water and Wastewater Loan and Grant Program For the Montana Department of Natural Resources and Conservation: Anna Miller, Renewable Resource Grant and Loan Programs John Tubbs, Renewable Resource Grant and Loan Programs For the Montana Board of Investments David Ewer, Intermediate Term Capital Program For the U.S. Department of Commerce John Rogers, Economic Development Administration For the U.S. Department of Housing and Urban Development J. Robert Harris, Indian Community Development Block Grants TABLE OF CONTENTS PREFACE Preface P-1 INTRODUCTION I. A. Introduction 1 B. Water and Sewer Needs 1 C. Purpose 2 D. Use of Workbook 2 THE PLANNING PROCESS n. A. General 3 B. Professional Assistance 3 C. Recommended Planning Procedures 5 IMPLEMENTATION in. A. Introduction 15 B. Selecting an Engineer 15 C. Design Plans and Specifications 17 D. Construction Bids 18 E. Construction 19 F. Start-up and Final Inspection 19 G. Summary of Implementation 20 IV. FINANCIAL PROGRAM PROCESS A. General 21 B. Financial Program Steps for Major Improvements 22 1. Finalize Project Cost Estimates 22 2. Evaluate Financing Options and Make Decisions 24 to Proceed 3. Finalize Financial Program 25 4. Conduct Final Engineering, and Plans 27 and Specifications 5. Conduct Preliminary User Fee Study 27 6. Selling of Bonds 28 7. Review and Adjust User Fee Structure 29 TABLE OF CONTENTS (Continued) LOAN AND GRANT PROGRAMS V. A. Introduction 31 B. Water and/or Sewer Programs 32 1. USDA Rural Development, Rural Utilities Service 32 Agency, Water and Wastewater Loan and Grant Program 2. Indian Community Development Block Grant 34 Program 3. Public Works and Development Facilities 38 Assistance (Title I) 4a. DNRC Renewable Resource Grant and Loan 41 Program DNRC Water Development Program 44 4b. 5. DEQ State Revolving Fund (SFR) Loan Programs 49 5a. DEQ Water Pollution Control SRF Program 49 5b. DEQ Safe Drinking Water SRF Program 53 Montana Coal Board Grant Program 58 6. Community Development Block Grant Program 62 7. 8. Montana Board of Investments Intermediate Term 68 Capital Program (INTERCAP) 9. Treasure State Endowment Program 69 C. Summary of Federal and State Programs for Water 75 and Wastewater Projects 1. Summary Table 76 VI. BASICS OF LOCAL GOVERNMENT HNANCING METHODS A. Introduction 77 B. Long-Term Financing 78 1. Types of Municipal Bond Offerings 78 2. Description of a Municipal Bond 79 3. Other Bond Provisions 81 4. Bond Underwriting and Marketing 82 5. Servicing the Bond Issue 83 6. Required Time Frame for Bond Issues 84 Required Documentation 84 7. 8. Professional Assistance 85 TABLE OF CONTENTS (Continued) VI. BASICS OF LOCAL GOVERNMENT FINANCING METHODS (cont.) C. Use of Municipal Bonds 87 1. General Obligation Bonds 87 2. Revenue Bonds 92 3. Special Assessment Bonds (SID's & RID's) 95 4. Refunding Bonds 96 5. Pooling Smaller Local Government Bonds 98 6. Summary of Bond Types 98 a. Summary Table 99 D. Other Long-Term Financing Methods 100 1. Capital Improvements Planning and Financing 100 2. Non-voted, Non-revenue Debt 102 E. Short-Term or Interim Financing 103 General 103 1. 2. Methods of Short-Term Financing 104 F. Local Revenue Sources 105 General 105 1. 2. User Fees 105 3. Improvement Districts (SID's and RID's) 109 4. County Water and/or Sewer Districts 123 5. Taxation for Funding Water and Sewer Systems 129 Appendix A: Glossary of Basic Financing Terms A-1 Appendix B: Preventive Maintenance B-1 Appendix C: Publications C-1 LIST OF FIGURES Number Title 1 Financial Program Process for Major Improvements 23 2 DNRC Renewable Resource Grant and Loan Program 45 Application Procedures 3 Montana State Revolving Fund (SRF) Programs 57 Process 4 Montana Coal Board Grant Program Application 61 Procedures 5 Community Development Block Grant Program 67 Application Procedures 6 Treasure State Endowment Program 74 Application Procedures 7 General Obligation Bond Issuing Process 91 8 Revenue Bond Issuing Process 94 LIST OFTABLES Number Title 1 Summary of Financial Options for Water and 76 Wastewater Projects for Communities 2 Summary of Municipal Bond Features 99 3 Formation and Operation of Special Improvement 112 Districts for Municipal Governments 4 Formation and Operation of Rural Improvement 119 Districts for County Governments 5 Formation and Operation of County Water and/or 125 Sewer Districts Wastewater Plant Maintenance B-1