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Governor Cuomo Announces Interest-Free Loans to Fund Wastewater Infrastructure Projects

On Thursday, the NYS Environmental Facilities Corporation announced it would provide 30-year, zero-interest loans for clean water infrastructure to communities of 300,000 residents or fewer, if its residents’ household incomes are below the statewide median. Eleven of the 12 counties that comprise the Adirondack Park (not Saratoga) have median incomes below the state average.

Below is a statement from Adirondack Council Executive Director William Janeway regarding the EFC’s announcement:

“The new hardship policy from the Environmental Facilities Corporation is welcome news for municipalities with fewer than 300,000 residents. In the Adirondack Park, our communities have an average of only 1,000 year-round residents, but our drinking water and waste-water treatment infrastructure must support 10 million annual visitors. Park communities need zero-interest, long-term loans like these. They also need the state to consider loan-forgiveness for Adirondack communities whose taxpayers cannot afford to repay loans at all.”

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Governor Andrew Cuomo - Press Release

January 15, 2015
Governor.ny.gov

Governor Cuomo Announces Interest-Free Loans to Fund Wastewater Infrastructure Projects
At Least 57 Wastewater Projects Worth $288 Million Now Eligible For Zero-Percent Loans; Olean and Malone First to Take Advantage of New Simplified Process

Governor Andrew M. Cuomo today announced that New York State is making it easier for municipalities with fewer than 300,000 people to obtain interest-free financing for up to 30 years to improve wastewater collection and treatment systems. The Environmental Facilities Corporation’s Board of Directors approved the policy at its board meeting today.

“New York does more than any other state to finance local wastewater infrastructure projects that protect the environment and support jobs,” Governor Cuomo said. “Today we are making it easier for hundreds of communities across the state to get interest-free loans, which means reduced project costs and significant savings for taxpayers.”

The first communities to take advantage of the new hardship program are the City of Olean in Cattaraugus County and the Village of Malone in Franklin County. The EFC Board of Directors today approved a $12.7 million no-interest loan to upgrade the Village of Malone’s wastewater treatment plant, along with a $19 million loan package for the City of Olean, including $18 million interest-free, to expand and upgrade that city’s wastewater treatment plant. With this zero-interest financing from EFC, Olean will save $425,000 and Malone $300,000 over the cost of financing these projects on their own.

“With more communities eligible for interest-free financing, we will kick-start projects that had been held up,” said EFC President and CEO Matthew Driscoll. “Interest-free loans can be a great incentive for municipalities to move forward on projects that will not only protect the environment but also could spur new opportunities for economic development. With a hardship designation, a community is also eligible to extend this interest-free financing into a long-term loan of up to 30 years, resulting in even-more savings for ratepayers.”

“Building on EFC’s success as the nation’s largest investor in water-quality infrastructure, the new rules being adopted will help more local governments take advantage of zero-interest financing through EFC’s Hardship loan program,” said Department of Environmental Conservation Commissioner and EFC Board Chair Joe Martens. “These new rules will encourage more communities to seek out financing from EFC and proceed with infrastructure projects that protect the environment and public health, create jobs and help foster new economic development opportunities across New York State.”

Under this new hardship policy, EFC is streamlining its application procedures and providing local governments with an additional month, until March 2, to apply for Clean Water loans. Now municipalities at or below the state’s Median Household Income level of $55,603 based on the 2010 census automatically qualify for a hardship, zero-interest loan. Previously, municipalities had to demonstrate hardship status by submitting numerous financial and income measurements, in addition to the MHI, as well as design factors that calculate the hydraulic and organic loading rates in a proposed treatment system.

For eligible communities with a population of 300,000 or less and that are below the state’s Median Household Income, hardship financing will now be available. The financing can be used by qualifying local governments for projects with total costs up to $25 million, with the first $18 million in EFC financing at a zero-interest rate, and repayment of up to 30 years. For communities of this size in New York State, a typical Clean Water project usually costs far less than $25 million. Statewide, there are a total of 994 cities, towns and villages that would qualify under the new policy.

Proposed projects submitted by qualifying municipalities are scored in a points system based on the severity of a pollution problem among other factors. The new policy affects new projects that are pursuing loan agreements closed after October 1, 2014.

The new hardship policy follows other changes instituted by EFC to encourage more communities to seek financing for clean-water infrastructure improvements. For the past two years, EFC has offered subsidized financing to projects with historically lower scores as long as engineering reports and other information are filed on time.

With these changes, EFC broke a single-year record with more than $2.3 billion in direct financings and refinancings during the 2014 federal fiscal year (Oct. 1 through Sept. 30) for wastewater and drinking water infrastructure in 130 communities across the state. Likewise, the latest figures from the federal government’s National Information Management System show EFC provided more than $924 million to wastewater infrastructure projects between July 1, 2013 and June 30, 2014, which is the most of any state and more than twice as much as the second-leading state, California, that had $400 million.

EFC provides low-cost financing to help local governments afford major improvements to wastewater and drinking water infrastructure. Funding for the Olean and Malone wastewater projects comes from New York’s Clean Water State Revolving Fund, which is jointly administered by EFC and the New York State Department of Environmental Conservation (DEC).

In the projects approved for financing today, Malone will replace equipment to improve its wastewater treatment operations to comply with state environmental regulations. Olean will improve the reliability of its treatment plant and reduce the risk of inadequately treated wastewater being discharged into the Allegheny River during wet weather.

For more information on how to apply for a zero-interest loan, visit: http://www.efc.ny.gov/CleanWaterLoans.

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