In April, the U.S. Environmental Protection Agency issued its first-ever loan from the Water Infrastructure Finance and Innovation Act (WIFIA) for $134.5 million to the King County Wastewater Treatment Division to help finance the Georgetown Wet Weather Treatment Station.
Organizations have to be invited to submit an application, and the deadline is tight. Dan Kaplan, WTD financial services administrator, devoted one year to the pursuit of the low-interest loan, which will save ratepayers $32 million in interest payments over the life of the loan.
Dan had to first analyze and determine this was a good source of funding for WTD, and then had the tough task of convincing the EPA that the project was what they were looking for – that we could deliver it on time, and that we were able to engage in the challenging application process.
The WIFIA program supports spending on water and wastewater infrastructure. The Georgetown Wet Weather Treatment Station is designed to significantly reduce the amount of untreated wastewater and stormwater entering the Duwamish River, and will create approximately 1,400 direct and indirect jobs.
Of 44 national projects, only 12 were selected to proceed to the application stage.
Dan, along with Steven Baruso, grant administrator, completed the application package in three months, which required legal, engineering, and financial information from attorneys, project managers, permitting managers and finance staff. The process involved producing 32 pages of narrative, 70 exhibits, a preliminary rating letter from bond rating agencies, and a two-hour video conference presentation.
“Steve has worked on over 35 Department of Ecology loan applications in his career at WTD,” said Dan. “Without his help, I might still be working on that application!”
“The application drew on the expertise within WTD,” said Dan. “I started the application knowing little about Georgetown, project management, environmental regulations or County insurance practices. Will Sroufe, project manager at the time, and Caitlyn Hall, capital budget analyst, were invaluable in helping me to understand and explain to the EPA the rigorous design process for the project. EPA looked closely and asked many questions about our environmental review of Georgetown for which Sue Meyer (environmental permit manager at the time) had all the answers.”
As this was the first loan ever awarded from the WIFIA program, the draft loan agreement included more than 100 pages of technical and legal requirements, which were reviewed in detail. Then the final loan language was negotiated. Dan managed a team of experts, including bond counsel, bond advisor, debt manager, prosecuting attorneys and project managers in developing an agreement that will provide the template for similar loans in the future.
“After selection, the EPA told us that our efforts to secure Envision certification for Georgetown helped distinguish the project from others,” notes Dan. “Hat’s off to Matoya Darby, project manager, for championing that effort and helping me highlight the Envision program in the letter of interest that led to Georgetown’s selection.”
For more information on the project, visit the Georgetown Wet Weather Treatment Station site.