State of Georgia Clean Water State Revolving Fund Program 2014 annual report

STATE OF GEORGIA CLEAN WATER STATE REVOLVING FUND PROGRAM
STATE FISCAL YEAR 2014 ANNUAL REPORT
Prepared by the GEORGIA ENVIRONMENTAL FINANCE AUTHORITY
For the U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION IV
September 30, 2014
PLEASE NOTE that this report does not constitute nor is it suitable for use as an official financial statement. This report is not prepared by an independent auditor or accountant, and is provided for informational purposes only.

CLEAN WATER STATE REVOLVING FUND ANNUAL REPORT TABLE OF CONTENTS
STATE FISCAL YEAR 2014
INTRODUCTION ................................................................................................................... 1
EXECUTIVE SUMMARY.......................................................................................................1
ADDITIONAL SUBSIDIZATION PROJECTS ........................................................................2
CITY OF ALMA (CWSRF 12-005)..................................................................................................................................................... 2 CITY OF JESUP (CWSRF 11-001 PHASE 2) ..................................................................................................................................... 2 CITY OF RICHMOND HILL (CWSRF 10-008 PHASE 2) ....................................................................................................................... 2 CITY OF TALLAPOOSA (CWSRF 13-011) ......................................................................................................................................... 2
GREEN PROJECTS .............................................................................................................3
CITY OF SUMMERVILLE (CWSRF 13-005)........................................................................................................................................ 3
BASE CWSRF PROJECTS ..................................................................................................3
CITY OF CALHOUN (CWSRF 13-001) .............................................................................................................................................. 3 TOWN OF CAMAK (CWSRF 12-003) ................................................................................................................................................ 3 CITY OF CANTON (CWSRF 12-012) ................................................................................................................................................ 3 CITY OF CLEVELAND (CWSRF 10-004) ........................................................................................................................................... 3 CITY OF DALLAS (CWSRF 12-011) ................................................................................................................................................. 3 JONES COUNTY (CWSRF 13-002) .................................................................................................................................................. 4 CITY OF LAGRANGE (CWSRF 13-003) ............................................................................................................................................ 4 CITY OF LAGRANGE (CWSRF 13-004) ............................................................................................................................................ 4 MACON WATER AUTHORITY (CWSRF 13-010) ................................................................................................................................ 4 SAINT SIMON'S LAND TRUST (LC2013001) ...................................................................................................................................... 4 CITY OF VALDOSTA (CWSRF 13-006) ............................................................................................................................................. 4
MEETING IUP GOALS AND OBJECTIVES ..........................................................................5
PROGRAM ADMINISTRATION (4 PERCENT).....................................................................5
CWSRF NON-PROGRAM INCOME .....................................................................................6
DBE PARTICIPATION ..........................................................................................................6
CWSRF LOAN DISBURSEMENTS.......................................................................................6
CWSRF STATE MATCH.......................................................................................................7
CWSRF LOAN REPAYMENT ...............................................................................................7
ASSURANCES AND SPECIFIC PROPOSALS.....................................................................7

LIST OF ATTACHMENTS
ATTACHMENT 1: SOURCES AND USES OF FUNDS BY QUARTER............................................................................................................... 9 ATTACHMENT 2: CWSRF REPAYMENT ACCOUNTS................................................................................................................................ 9 ATTACHMENT 3: COMMUNITIES RECEIVING CWSRF FINANCIAL ASSISTANCE........................................................................................ 10 ATTACHMENT 4: BINDING COMMITMENTS BY CATEGORY, POPULATION & DOLLAR VALUE ...................................................................... 11 ATTACHMENT 5: ADMINISTRATIVE EXPENSES BY CATEGORY ................................................................................................................ 12 ATTACHMENT 6: DBE UTILIZATION ..................................................................................................................................................... 13 ATTACHMENT 7: DISBURSEMENT OF CWSRF FUNDS BY QUARTER ...................................................................................................... 14 ATTACHMENT 8: COMPARISON OF PROJECTED VERSUS ACTUAL DISBURSEMENTS ................................................................................ 15 ATTACHMENT 9: PROJECTS INITIATING OPERATION ............................................................................................................................. 16

STATE OF GEORGIA CLEAN WATER STATE REVOLVING FUND PROGRAM
STATE FISCAL YEAR 2014 ANNUAL REPORT

INTRODUCTION
The Clean Water State Revolving Fund (CWSRF) program provides assistance to wastewater and nonpoint source projects for the improvement of water quality in Georgia as aligned with the objectives of the Federal Clean Water Act of 1972, as amended. A broad range of water quality and wastewater treatment projects are covered by this program, such as stormwater and flood control projects, and projects for the construction or expansion of wastewater treatment facilities and installation of sewer lines and sewer rehabilitation. As required by Chapter 40 of the Code of Federal Register, Part 31.3165, Subpart K, Section 606(d), and Chapter 6 of the CWSRF Management Manual of December 1988, the Georgia Environmental Finance Authority (GEFA) submits this annual report for the state fiscal year ending June 30, 2014. This report provides detailed information concerning the management and fiscal integrity of this program, along with any changes to the program, or updates to the program's goals and objectives in relation to the 2013 Intended Use Plan (IUP).
GEFA was created by the Georgia General Assembly in 1986 as the successor agency to the Georgia Development Authority Environmental Facilities Program. GEFA serves as the central state agency for assisting local governments in financing the construction, extension, rehabilitation and replacement and securitization of public works facilities. The governor of Georgia appoints eight members to the GEFA board of directors and three ex-officio members are designated by the Authority's enabling legislation. The Georgia Environmental Protection Division (EPD) provides certain professional services for the CWSRF Program. These services include: project reviews and approvals; planning; project development; information tracking; information gathering and development of the National Needs Survey; issuing Notices of No Significant Impacts (NONSI) and Categorical Exclusions (CE); and assistance with the National Information Management System (NIMS) as well as certain sections of the Clean Water Benefits reporting database.

EXECUTIVE SUMMARY
On February 8, 2013, GEFA submitted an IUP and application for the 2013 CWSRF grant. Also, on February 14, 2014, GEFA submitted an IUP and application for the 2014 CWSRF grant. The 2013 grant was awarded on September 11, 2013, for $22,573,000, while the 2014 grant was awarded on July 9, 2014, for $23,707,000. Funds received to date by Georgia's CWSRF Program from EPA total $727,022,111 with an additional $24,672,170 net transfers from the DWSRF Program. Georgia's required state match to date totals $130,912,017.
Attachment 1 displays the total sources of funds by quarter during state FY 2014 including federal grant funds, state match contributions, repayments from direct federal loans, repayments from state match loans, and interest earnings generated from these accounts. Attachment 1 also shows the closing fees collected by quarter identified as Program Income and Non-Program Income. Georgia reports the collection of Program Income and Non-Program Income separately in accordance with the EPA Fee Guidance released in October 2005. Currently, some Non-Program Income is used to fund portions of EPD's water quality program, including field staff, lab testing, and standards development. Attachment 1 also displays the uses of funds by quarter. Attachment 2 displays the balances within these accounts as of June 30, 2014.

State FY 2014 CWSRF Annual Report

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The CWSRF Program executed sixteen new loans in state FY 2014 for a total of $116,107,253. This total assistance includes $114,348,253 in low-interest loans and $1,759,000 in principal forgiveness. Additionally, the CWSRF Program funded one project for a total of $1,220,000, which met the qualifications for the Green Project Reserve. Attachment 3 provides a list of all loans executed in state FY 2014. Attachment 4 displays information for these 16 projects in the format of the National Information Management System (NIMS). Lastly, GEFA and EPD have collectively entered all necessary information into the Clean Water Benefits reporting database for all projects funded through state FY 2014.
All commitments were made to qualified local governments or water and sewerage authorities according to the requirements of the Georgia Department of Community Affairs (DCA) or qualified non-profits and land trusts and all recipients possess a verified Service Delivery Strategy approved by DCA. Additionally, all loan recipients have the technical, managerial, and financial capability to operate a sewer system. Each project was also reviewed in accordance with the EPA-approved State Environmental Review Process (SERP) and was issued a NONSI or CE. All CWSRF projects completed a 4700-4 Certification Form and subsequently had that form approved by EPA. Below is a short write-up for each of the projects funded in state FY 2014.
ADDITIONAL SUBSIDIZATION PROJECTS
City of Alma (CWSRF 12-005) On September 18, 2013, Alma signed a $6,000,000 assistance agreement, including $500,000 in principal forgiveness, to rehabilitate and upgrade the city's wastewater treatment facility. This project includes modification of the headworks, expansion of the existing land application system, and construction of associated transfer force mains. As of the end of state FY 2014, Alma has drawn $3,815,470.91 from this commitment.
City of Jesup (CWSRF 11-001 Phase 2) On August 26, 2013, Jesup signed a $5,000,000 assistance agreement, including $500,000 in principal forgiveness, to complete the second phase of the replacement of the city's 2.5 million gallons per day (MGD) wastewater treatment plant. The project includes an influent pump station, headworks, grit removal, aeration basins, blowers, clarifiers, a digester, a belt press, disinfection process, and an emergency generator. As of the end of state FY 2014, Jesup has drawn $3,424,357.80 from this commitment.
City of Richmond Hill (CWSRF 10-008 Phase 2) On September 3, 2013, Richmond Hill signed a $10,000,000 assistance agreement, including $500,000 in principal forgiveness, for Phase 2 of construction of the Sterling Creek Wastewater Reclamation Facility. This project expands the facility from 1.5 to 4.0 MGD and provides 1 MGD for urban reuse. As of the end of state FY 2014, Richmond Hill has not drawn any funds from this phase of the commitment.
City of Tallapoosa (CWSRF 13-011) On April 8, 2014, Tallapoosa signed a $3,100,000 assistance agreement, including $137,000 in principal forgiveness. This project includes improvements at the city's existing water pollution control plant, extension of sanitary sewer to a residential area of the city not presently served, and the rehabilitation of the Arbacoochee Road pump station and sections of the collection system in the same area. As of the end of state FY 2014, Tallapoosa has drawn $326,042.35 from this commitment.

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GREEN PROJECTS
City of Summerville (CWSRF 13-005) On May 16, 2014, Summerville signed a $1,220,000 assistance agreement, including $122,000 in principal forgiveness, to replace aging meters with new meters, eliminating the need for meter readers to manually read water meters. As of the end of state FY 2014, Summerville has not drawn any funds from this commitment.

BASE CWSRF PROJECTS

City of Calhoun (CWSRF 13-001) On December 2, 2013, Canton signed a $2,121,643 assistance agreement to update two clarifiers at the city's wastewater treatment plant, making piping configuration changes between the aeration basins and final clarifiers at the city's plant, and to rehabilitate aging sewer systems in the King Street, Pisgah, and Redbud Road areas of the city. As of the end of state FY 2014, Calhoun has drawn $356,540.18 from this commitment.

Town of Camak (CWSRF 12-003) On February 3, 2014, Camak signed a $250,000 assistance agreement for the first phase of construction of a new sewage collection system, serving about one-third of the town's population of 138. Significant public health issues including sewage overflows were present in the town due to the failure of existing septic systems. This project will convey sewage to the city of Warrenton, four miles away, for treatment. This project was jointly funded with a $500,000 Community Development Block Grant. As of the end of state FY 2014, Camak has drawn $61,000.51 from this commitment.

City of Canton (CWSRF 12-012) On March 31, 2014, Canton signed an $8,000,000 assistance agreement to make improvements to the city's wastewater treatment facility that will allow the city to achieve compliance with EPD consent order. These improvements include modifications to the biological treatment system to improve BOD removal, the addition of a nutrient removal process to improve phosphorus and ammonia removal, modifications to the effluent filters and chlorine addition to reuse water to improve disinfection. As of the end of state FY 2014, Canton has not drawn any funds from this commitment.

City of Cleveland (CWSRF 10-004) On July 12, 2013, Cleveland signed a $2,100,828 assistance agreement to make sewer system improvements along Truelove Road. The project replaces gravity sewer and force main and installs a new pump station, lift station and generator. This project relieves capacity constraints experienced by the system. This project is jointly funded with the OneGeorgia Authority, Appalachian Regional Commission, and the U.S. Department of Commerce Economic Development Administration. As of the end of state FY 2014, Cleveland has drawn $783,842.43 from this commitment.

City of Dallas (CWSRF 12-011) On October 9, 2013, Dallas signed an $18,500,000 assistance agreement to construct a new wastewater treatment plant to replace the existing Dallas North Wastewater Treatment Plant. This project decommissions the existing Dallas West Wastewater Treatment Plant and conveys flows to the new Dallas North plant. As of the end of state FY 2014, Dallas has drawn $2,504,942.37 from the total commitment.

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Jones County (CWSRF 13-002) On October 16, 2013, Jones County signed a $1,326,319 assistance agreement to rehabilitate nine sewage pump stations in the River North area of the county. A self-taxing special service district was created in the affected area to finance this work. As of the end of state FY 2014, Jones County has not drawn any funds from this commitment.
City of LaGrange (CWSRF 13-003) On September 3, 2013, LaGrange signed a $7,791,500 assistance agreement to construct improvements at the city's Long Cane Creek Water Pollution Control Plant. This work includes replacement of equipment at the effluent pump station, installation of one new emergency generator and installation of two new generators, installation of a shutoff valve on the effluent force main and the construction of a new pump control room and electrical building. As of the end of state FY 2014, LaGrange has drawn $2,073,487.58 from this commitment.
City of LaGrange (CWSRF 13-004) On October 1, 2013, LaGrange signed a $6,255,515 assistance agreement to replace the existing Yellow Jacket Creek Pump Station, including installing five submersible pumps, constructing two influent collection junction boxes and constructing a new electrical building. Approximately 16,000 linear feet of 14-inch force main will be installed along with upsizing two sections of 24-inch sanitary sewer. Also included in the scope of work is the decommissioning and demolition of the Cherokee Road Pump Station, along with construction of 900 linear feet of associated gravity sewer line required to divert existing flows. As of the end of state FY 2014, LaGrange has drawn $1,865,460.97 from this commitment.
Macon Water Authority (CWSRF 13-010) On May 12, 2014, the Macon Water Authority signed a $5,500,000 assistance agreement to address inflow and infiltration in the authority's collection system. This work will include the replacement of several large diameter gravity sewers. As of the end of state FY 2014, the Macon Water Authority has not drawn any funds from this commitment.
Saint Simon's Land Trust (LC2013001) On September 18, 2013, Saint Simon's Land Trust signed a $2,160,000 assistance agreement for the 21acre Fort Frederica project in Glynn County. Saint Simon's Land Trust is an eligible borrower of Clean Water State Revolving Fund dollars under Section 4c of the Georgia Land Conservation Act (O.C.G.A. 126A). Saint Simon's Land Trust used the loan proceeds to fully repay GEFA loan LC2007008 on behalf of Glynn County. The purpose of this loan was to preserve 21 acres of salt marsh and maritime forest on St. Simon's Island. As of the end of state FY 2014, all funds committed to Saint Simon's Land Trust were disbursed.
City of Valdosta (CWSRF 13-006) On April 29, 2014, Valdosta signed a $36,781,448 assistance agreement to construct three new pump stations, a new force main, a new headworks structure with bar screens and grit removal system and a 4.0 million gallon equalization basin. This work will relocate the existing Withlacoochee Wastewater Treatment Plant to a new site on 70 acres outside of the Withlacoochee River floodplain. The existing 54-inch gravity sewer is prone to inflow and infiltration especially when the Withlacoochee River floods and will be replaced with 32-inch and 40-inch force mains located outside of the floodplain. As of the end of state FY 2014, Valdosta has not drawn any funds from this commitment.

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MEETING IUP GOALS AND OBJECTIVES
The 2013 CWSRF IUP listed two goals for the program.
The first goal listed in the 2013 IUP was: The CWSRF Program will work toward increasing its pace in comparison to the national average. According to the FY 2012 NIMS database, Georgia's CWSRF Program had an 84 percent rate for the pace indicator of "SRF Disbursements as a Percent of Funds Available." GEFA is currently implementing a new loan servicing software through Northbridge Consulting. This software will allow GEFA to better utilize the first-in first-out methodology on each project, thus allowing for the faster disbursement of grant funds.
Status: Binding commitments in state FY 2014 were more than $116.1 million, which far exceeds that of state FY 2012 and 2013, which were $92.9 million and $30.7 million, respectively. Unfortunately, the metric of "SRF Disbursements as a percent of Funds Available" decreased from FY 2012 to FY 2013 moving from 84 percent to 79 percent. As the $116.1 million in binding commitments from FY 2014 begin to draw, the 79 percent metric should begin to increase. GEFA will continue to work toward increasing this metric to above the national average.
The second goal listed in the 2013 IUP was: The CWSRF Program will work toward reducing the unliquidated obligations of the CWSRF Program and work to close the 2011 grant by June 30, 2013, and the 2012 grant by December 31, 2013.
Status: GEFA has put forth a major effort to reduce unliquidated obligations in the CWSRF program. Utilizing first-in-firstout has resulted in the closure of the 2011 grant in March 2013, closure of the 2012 grant in May 201, 4 and GEFA recently submitted paperwork in August 2014, to close the 2013 grant. GEFA is operating with only one grant open at one time and has reduced its unliquidated obligation to almost zero.
PROGRAM ADMINISTRATION (4 PERCENT)
In state FY 2014, GEFA spent $1, 023,353.33 on program administration of the CWSRF Program while EPD charged $580,221.55 to the program operations contract with GEFA. Attachment 5 displays expenditures associated with program administration broken down by object category.
During state FY 2014, the Construction Management Unit (CMU) processed 108 CWSRF project draw requests and performed 195 project inspections. EPD's Construction Management Unit was transferred to the GEFA Water Resources Division effective February 2014. This transfer will allow GEFA's program managers and construction managers to foster a closer working relationship resulting in more effective management of the CWSRF program.

State FY 2014 CWSRF Annual Report

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CWSRF NON-PROGRAM INCOME
In state FY 2014, GEFA spent $392,091.18 in CWSRF Non-Program Income in support of the state's water quality monitoring, testing, and standards development efforts. Attachment 5 shows the breakout of these dollars.
DBE PARTICIPATION
As a part of GEFA's loan agreement, all loan recipients are required to encourage the participation of small minority- and women-owned businesses in all project subcontracts. The state's CWSRF Program percentage goals through September 30, 2016, are 4 percent for Minority Business Enterprises (MBE) and 4 percent for Women Business Enterprises (WBE). A summary of the DBE utilization is displayed in Attachment 6. Due to the reporting change of the DBE numbers to EPA from semi-annually to annual reporting, the data provided in Attachment 6 is for the reporting period of October 1, 2012, through September 30, 2013, which represents the most recent full fiscal year of data reported.
GEFA staff has made a tremendous effort to comply with the EPA's Six Good Faith Efforts. Telephone calls and emails are regularly made to DBE subcontractors to encourage their participation in both the Clean Water and Drinking Water SRF programs. DBE's are alerted to GEFA's approved projects as soon as they appear in our database, allowing subcontractors to inquire and prepare for these projects prior to the bid date. Subcontractors are additionally urged to pursue EPA/DOT/SBA certification. GEFA staff have made themselves available to answer questions and assist subcontractors in the application process. GEFA also maintains an in-house bidder's list of certified DBE prime and subcontractors. The data for the bidders list is collected and forwarded to loan recipients with compliance approval. The bidder list also serves as a database of Minority Business Enterprises (MBE) and Women Business Enterprises (WBE) and non-MBE/WBE prime and subcontractors. In considering whether firms could subcontract with DBEs, GEFA encourages prime contractors to follow the Six Good Faith Efforts to solicit the services of minority and women-owned businesses, and will withhold approval for a project if there is insufficient documentation that the efforts were met. Prime contractors are also provided with an example of an EPA-approved newspaper advertisement and an example of a solicitation letter in efforts to eliminate generic newspaper advertisements and poorly-written letters. Prime contractors are A link for the available DBEs on the Georgia DOT website and the Bidders list are also available to prime contractors, as well as the names, addresses and telephone numbers of contacts in the Small Business Administration, the Minority Business Development Agency, the Department of Commerce and other related agencies and associations throughout the state. Guidance is also provided in all related construction contracts to encourage prime contractors to divide work when feasible.

CWSRF LOAN DISBURSEMENTS

The CWSRF Program disbursed funds to 23 active projects during state FY 2014. Attachment 7 shows the projects which received funds by quarter in state FY 2014. The CWSRF Program disbursed a total of $37,275,995.53 in state FY 2014. Attachment 8 compares the projected disbursement schedules indicated within the 2012, 2013 and 2014 IUPs for state FY 2014 against the actual disbursements made in state FY 2014. The CWSRF Program disbursed 60 percent of what it projected it would disburse in state FY 2014.

State FY 2014 CWSRF Annual Report

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CWSRF STATE MATCH
During state FY 2014, all projects which received federal capitalization grant dollars were funded with 83.33 percent federal dollars and 16.67 percent state match dollars. GEFA has re-visited this state match process and is currently considering implementing a new process whereby state match funds are disbursed before federal funds. With the implementation of a new loan servicing software, this new approach will closely align with EPA's suggested methodology. GEFA received sufficient general obligation bond funds from the state to match the CWSRF program at 20 percent. These bond funds were deposited into the same CWSRF fund in which grant payments are made. Attachment 1 shows the amount of state match funds provided during state FY 2014 by quarter.

CWSRF LOAN REPAYMENT

Seven CWSRF projects initiated operation during state FY 2014 (Attachment 9). The total dollar value awarded to these seven projects equaled $28,127,653.00 of which $27,249,271.56, or 97 percent, was disbursed. The total amount of repayments credited to the CWSRF fund during state FY 2014 from all sources was $77,855,065.88 and can be found within Attachment 1 (total of federal and state-match repayments). These sources of repayment include principal and interest payments and late fee payments. To maintain the self-perpetuating nature of the CWSRF fund, all repayments including the principal, interest and fees are credited to the CWSRF Program. Attachment 1 also shows that $535,516.48 in closing fees (Program Income and Non-Program Income) were collected during the state fiscal year. GEFA directed these fees into the Program Income and Non-Program Income accounts according to EPA policy.
ASSURANCES AND SPECIFIC PROPOSALS

The CWSRF Program will adhere to all the certifications covered in the Act as well as those within Georgia's Operating Agreement with the Regional EPA office. The specific certifications are:

A. Introduction and General Program Management Assurances B. Clean Water State Revolving Loan Fund - An Instrumentality of the State
a. State Law b. Interagency Agreements C. Capitalization Grant Acceptance D. Payment Schedule E. State Matching Funds F. Commitment of 120 percent in One Year G. All Funds - Timely Expenditure H. Enforceable Requirements of the Act I. Cross Cutting Issues J. State Law and Procedures K. State Accounting and Auditing Procedures L. Recipient Accounting and Auditing Procedures

State FY 2014 CWSRF Annual Report

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M. Annual Report N. Limitations on Eligibility O. Maintain the Fund P. Perpetuity Q. Types of Assistance R. Limitation of Double Benefits S. Consistency with Planning Requirements T. Priority List U. Annual Audit V. Annual Federal Oversight Review and Technical Assistance W. Dispute Resolution X. Transfer of Funds between SRF Programs
A copy of GEFA's FY 2014 audited financial data is provided under separate cover.

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Attachment 1: Sources of Funds by Quarter Attachment 2: CWSRF Repayment Accounts

State FY 2014 CWSRF Annual Report

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Attachment 3: Communities Receiving CWSRF Financial Assistance

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Attachment 4: Binding Commitments by Category, Population & Dollar Value

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Attachment 5: Administrative Expenses by Category

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Attachment 6: DBE Utilization

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Attachment 7: Disbursement of CWSRF Funds by Quarter

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Attachment 8: Comparison of Projected Versus Actual Disbursements

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Attachment 9: Projects Initiating Operation

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