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Rate Changes Announced for Wisconsin DNR and BCPL Funds

Thea Carroll | with 0 Comments

Rate Changes Announced for Wisconsin DNR and BCPL Funds

The Wisconsin Department of Natural Resources recently announced a lower market rate base for Safe Drinking Water Fund and Clean Water Fund program subsidies.  This is great news for communities.  Here is what it means to you.
These interest rate changes mean that, if your community is pursuing a project that is slated to cost $1,000,000, you could save is between $27,800 and $65,500 of interest over 20 years, depending on the WI DNR project type.  This can mean big things for communities:
  • Less of a sewer/water rate increase required to support the loan for the project.
  • More project for less money; i.e. possible increase in scope.
  • If rates have already been increased, less revenue will be needed to support the loan.  This means that your Utility may have more funds to do other much-needed work within the sewer/water system, or the ability to pay down debt more quickly.
Additionally, Principal Forgiveness is like a grant and is used to reduce the total loan amount for high-scoring projects and communitites by up to $500,000. This funding cycle, the amount of available Principal Forgiveness for Clean Water Fund loans stands at $11,388,000 which is approximately triple over the last year and will help fund many more projects. Safe Drinking Water has approximately the same amount of Principal Forgiveness compared to last year with $4,627500 available. Applications must be received by the deadlines listed to be eligible for Principal Forgiveness.

The Board of Commissioners of Public Lands State Trust Fund (STF) announced an interest rate drop in December of 2014.  The STF can issue loans using revenue (water or sewer) as collateral, as well as General Obligation loans.  If local banks are not an option for financing a project until WI DNR funds can be made available, State Trust Fund is an easily accessible option for interim financing.
The last time WI DNR rates were modified was July 26, 2012.  MSA’s Municipal Funding Team  believes now is a great time to start projects.  Open bond market interest rates may start trending higher in 2015 and beyond as project financing demand increases at the national level.  “If the Wisconsin SRF and STF program rates remain at these levels as anticipated for one, if not two cycles, there may be a greater advantage to using these funding sources in the next few years,” says Sornsin.
MSA’s funding team has helped a number of clients secure funding for projects.  Contact our funding specialists for assistance with funding your project.

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