County Commission approves formal application with $100,000 non-refundable fee
The U.S. Environmental Protection Agency (EPA) has invited Sarasota County staff to submit an application for a low-interest loan up to $132,357,785 for Sarasota County’s Bee Ridge Water Reclamation Facility (WRF) Expansion and Advanced Wastewater Treatment Conversion Project.
As a result, the County Commission this week formally authorized the submittal to the EPA of a Water Infrastructure Finance and Innovation Act application, with a non-refundable fee of $100,000.
The maximum federal funding would be about 49% of the “total eligible project costs,” according to an EPA letter in the May 18 agenda packet.
A separate EPA document in that packet said the estimate for the total eligible project cost is $253,669,407.
On Jan. 8, Greg Rouse, the senior manager in the county’s Utilities Planning Division, received the letter from the EPA that invited the county to submit the application.
“Once we receive your complete application,” the letter said, “the WIFIA [Water Infrastructure Finance and Innovation Act] team will commence underwriting the transaction. Receipt of credit assistance remains subject to negotiation of an agreement on terms and conditions satisfactory to the [EPA] as well as the project’s compliance with Federal requirements,” including the National Environmental Protection Act (NEPA), American Iron and Steel requirements and Flood Plain Management Standards.
A May 18 county staff memo noted that the estimated length of the loan process is seven months from the time the EPA receives the complete application. That timeline “includes an evaluation of the application consisting of financial, technical, and environmental reviews of the project, negotiations of terms and conditions of the loan, an approval period, and the loan closing,” the memo added.
Although the item was part of the board’s May 18 Consent Agenda of routine business matters, Commissioner Ron Cutsinger took a few moments after the vote to, as he phrased it, “call out staff for an excellent job.”
Cutsinger added, “They kept their eyes open and found this incredible financing opportunity …”
Staff informed the commissioners last year “that it would be seeking alternative funding strategies” for the Bee Ridge WRF project, the May 18 staff memo said.
Provided to the commissioners in advance of the meeting, the memo explained that, on Oct. 1, 2020, County Administrator Jonathan Lewis approved staff’s submission of the Water Infrastructure Finance and Innovation Act (WIFIA) letter of interest “to request supplemental credit assistance from the [EPA].”
The memo also pointed out, “The WIFIA loan program offers a low interest rate funding source with flexible financing terms and a longer repayment period than typical for projects [that will cost more than] $20 million, for a community of our size …”
Debt service payments may be deferred for up to five years “after the project reaches substantial completion,” the memo continued. “WIFIA assistance would provide the County a cost-effective funding source to implement this critical improvement project, reducing the financial hardship on our ratepayers.”
Further, the memo pointed out that the federal program offers a lower interest rate. The EPA WIFIA webpages say that that rate “is equal to the US Treasury rate of a similar maturity” on the date of the loan closing.
As of July 2020, the county staff memo noted, that rate was 1.39%.
The EPA website says that over the past four years, “WIFIA has received 223 letters of interest from prospective borrowers for water infrastructure projects across the country. In total, prospective borrowers requested $30.9 billion in WIFIA loans. These letters demonstrate the high need to invest in water infrastructure improvements in communities across the nation and the value that WIFIA financing can offer.”
Further, the website points out that in 2020, the program received 55 letters of interest from municipal government entities — the category that included Sarasota County.
As a result of an August 2019 Consent Order that the County Commission approved with the Florida Department of Environmental Protection (FDEP), the conversion of the Bee Ridge WRF to Advanced Wastewater Treatment status must be completed by the end of 2025.
The facility also was the focus of a federal lawsuit that several environmental groups filed against the county in early 2019, following illegal discharges of millions of gallons of both treated and untreated wastewater. The commission approved that settlement in September 2019.
Along with the conversion to Advanced Wastewater Treatment status, the Bee Ridge WRF’s capacity will be increased by 50% — from 12 million gallons per day to 18 million gallons per day