NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE TRUST

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2 Welcome John Hansbury, Jr., MBA Chief Budget Officer NJ Environmental Infrastructure Trust

3 New Jersey 20-Year Estimated Infrastructure Needs Outlined in New Jersey s State Development & Redevelopment Plan A. Wastewater Disposal 1. Secondary Wastewater Treatment $3.6 billion 2. Advanced Wastewater Treatment $517 million 3A. Infiltration/Inflow Correction $402 million 3B. Sewer Replacement/Rehabilitation $1.1 billion 4A. New Collector Sewers and Appurtenances $809 million 4B. New Interceptor Sewers and Appurtenances $397 million 5. Combined Sewer Overflow Correction $4.2 billion TOTAL: $10.9 billion

4 New Jersey 20-Year Estimated Infrastructure Needs Outlined in New Jersey s State Development & Redevelopment Plan B. Water Supply 1. Transmission/Distribution $4.7 billion 2. Source Development and Rehabilitation $307 million 3. Treatment $1.9 billion 4. Storage $1.1 billion 5. Other $24.7 million TOTAL: $7.9 billion

5 New Jersey 20-Year Estimated Infrastructure Needs Outlined in New Jersey s State Development & Redevelopment Plan C. Stormwater Management 1. Stormwater Management Programs $241 million 2. NPS Pollution Control Projects $9.5 billion 3. Confined Animals Point Source $78 million 4. Mining Point Source $8 million 5. Recycled Water Distribution $73 million TOTAL: GRAND TOTAL: $9.9 billion $28.7 billion

6 Green Stormwater Management Rain and Stormwater Runoff are Major Contributors to Water Pollution Stormwater pollutants increase the costs of treating drinking water supplies Rooftop rainwater capture provides a safe, efficient solution that can increase water supply and decrease water pollution The volume of Rooftop rainfall available for capture is significant New approach to stormwater management - utilizing green infrastructure Manage stormwater on site Reduce pollutant loads to waterbodies View stormwater as a resource

7 CSO Reduction by Using Green Infrastructure Capturing wet weather flow with a combination of green and grey infrastructure approaches is the most cost-effective and environmentally sound solution. EPA is requiring substantial capture (up to 95%) of wet weather flow in some urban cities. Affordable funding mechanisms are needed. Limited grant dollars are available. The NJEIFP is currently the most affordable funding mechanism available to municipalities in New Jersey.

8 NJEIFP Eligible Stormwater Projects Include: Green Roofs, Green Streets, Tree Filters, Rain Gardens, Rain Barrels Porous Pavement, Installation of Packed Media Filters Replacement of existing storm drains with newer designs that incorporate features to remove solids, floatables, oil and grease, and/or other pollutants Purchase or replacement of equipment to reduce solids and/or floatables, such as netting on outfalls and skimmer boats Purchase of maintenance equipment, such as street sweepers, leaf collection equipment, beach cleaning equipment, and aquatic weed harvesters

9 Eligible Stormwater Projects (continued): Rehabilitation of tide gates and existing basins or other stormwater systems, including pump stations Extension and/or stabilization of outfall points Implementation/construction of systems that will result in water quality benefits, such as salt storage structures/runoff control systems, feedlot manure/runoff control systems, and streambank/lake stabilization/restoration projects which are consistent with habitat protection

10 Environmental Infrastructure Financing Program NJ EIFP Local Borrowers NJ DEP NJ EIT Equal Partnership

11 NJEIFP Loan Structure Bond Trustee (MPTA) Contractor Backed by GO s, SA s, etc. $ Debt Service Repayment $ Borrower (Municipality, Authority, etc.) Trust Loan $ Fund Loan $ Bond Investors Bond Proceeds NJEIT DEP Trust Loan Debt Service Fund Loan Debt Service (0.51 yrs. in arrears) SRF / Bond $$ Federal/State

12 Why Borrow Through NJEIT? AAA / Aaa Loan Rate Comparisons 9.0% 8.0% 7.0% Below Market Rate = Blend of 0% DEP Fund Loan and AAA Market Trust Loan 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 20 yr. savings on $1mm Borrowed: ~ $120,000 / each 1% saved NJEIT 50% / 50% NJEIT 75% / 25% AAA New Jersey Municipal Bond Rate

13 SFY-2013 Rate Structure / Allocation GENERAL LOAN PROGRAM 75% - Fund Loan (0% rate DEP loan) + 25% - Trust Loan (AAA Market-rate loan) PRINCIPAL FORGIVENESS PROGRAM: up to $20MM Green projects (expanded) in Barnegat Bay Watershed 25% - Principal Forgiveness (max. of $2MM, no principal repayment due upon completion) + 50% - Fund Loan (0% rate DEP loan) + 25% - Trust Loan (AAA Market-rate loan)

14 Upfront and Ongoing Loan Costs DEP Fund Loan Fee - Origination Fee - 2% of the total Program Loan - 1% paid upfront from Trust Loan proceeds - 1% paid in 8 equal installments billed semiannually over first 4 years EIT Trust Loan Fees - Underwriting/Closing Costs - Origination fee of 0.10% of Trust Loan paid upfront, does not cover entire cost; EIT subsidizes shortfall - Annual Administrative Fee % per annum on Trust Loan only (covers servicing costs, compliance for IRS, EPA and State, bond covenants, Custodial and Trustee fees)

15 Interim Financing Program (IFP) In addition to the five (5) General Program, Long-Term Financing Program requirements listed below; 1. Initial Submission package (LOI, Env. Planning) 2. Loan Application 3. Engineering Design docs 4. Preaward Approval / Project Certification 5. Financial Addendum Form (FAF) IFP Applicant s must also submit 1. IFP FAF IFP Borrowing Rates: Local Government Unit Rate = 0% Private Entities / Utilities Rates = 2%

16 Remaining Steps to Financing Finish Application Process Financial Addendum Form LFB/BPU Approval Project Certification Escrow Closing Bond Sale $$$

17 2012 SFY-2014 Schedule & Deadline Oct 3, 2012 Letter of Intent and Planning Documents 2013 March 2013 Applications and Design Documents (for projects submitting LOIs in Oct. 2012) March 2013 Financial Addendum Forms due(fafs) June 2013 Deadline to file with BPU and LFB

18 SFY-2014 Schedule & Deadline 2014 Jan. [x] Feb. 6 March 12 March 14 April 2 April 11 Last LFB Approval NJDEP Project Certification Commence Escrow Closing Trust Board Project Certification End Escrow Closing Trust Board Bond Resolution

19 What s New in 2014 Application/process entirely on-line a. All docs and info uploaded via web LOI; Application; Environmental Docs; and Engineering Specs b. User Interface mimics SAGE process used by DCA and DOT Authorized Officials and Authorized Reps Bond Counsel, Financial Advisor; and Consulting Engineer c. FAF & IFP-FAF form completed on-line All information submitted is aggregated: + increased transparency, efficiency and accuracy - reduced completion time, costs, manual input errors

20 Requisition Process What s New in 2014 Automated process by which applicants request and receive payments for eligible program expenses; On-line process utilizing Project # s; data captured in the application process; Recognize projects, approved contractors, and duplicate requests; Post balances; Alert processors, managers and applicants of status; and Will greatly reduce the time it takes to disburse funds to the requesting entities. Project Status Will provide applicants with application review status Currently provides Authorization to Award and Authorization to Advertise

21 What s New in 2014 Credit Policy (envisioned) Comprehensive review of credit and risk underwriting standards Portfolio risk metrics (diversity = better) True de minimis safe harbor change Stay Tuned!

22 Contact List David Zimmer Executive Director, NJEIT Geoffrey Stewart Financial Advisor, Public Financial Management Richard Nolan Bond Counsel, McCarter & English Karla Martin DEP Office of Equal Opportunity and Lydia Harper Public Contract Assistance Gene Chebra Acting Assistant Director, DEP Office of Municipal Finance Terry Caruso DEP Green Acres,

23 Questions?