Table Of ContentBROADWATER, JUDY
13^373.9011 PLANNING AND
C18PF FINANCING
1997 COMMUNITY WATER
AND SEWER SYS^TEMSNNING AND
IN MONTANA
COMMUNITY
FINANCING
WATER AND SEWER
MONTANA.
SYSTEMS
IN
STATE DCCUMCITS COLLECTION
Fourth Edition 130/
««< iSBsrf :ntana state library
1515 E. 6th AVE.
HELE.\A, MONTANA 59520
iVIONTANA DEPARTIVIENT OF COMMERCE
LOCAL GOVERNMENT ASSISTANCE PROGRAM
AND NORTHERN MONTANA COLLEGE
MONTANASTATELIBRARY
3 0864 0010 1858 2
PLANNING AND FINANCING COMMUNITY
WATER AND SEWER SYSTEMS MONTANA
IN
FOURTH EDITION
July 1997
CONSULTANTS
Doris Roberts, Montana State University - Northern
Barbara Coffman, Montana Environmental Training Center
EDITOR
Judy Broadwater, Montana Department of Commerce
ORIGINAL RESEARCH BY
Robert Peccia and Associates, Helena, Montana
Robert M. Murdo, Helena, Montana
PUBLISHED BY
Montana Department of Commerce
Treasure State Endowment Program
FUNDING FOR PUBLICATION OF THE FOURTH EDITION WAS PROVIDED
BY THE MONTANA DEPARTMENT OF COMMERCE.
TREASURE STATE ENDOWMENT PROGRAM
Li5 (A ^H - .^'^: " -i ^
PROJECT PARTICIPANTS
Fourth Edition Consultants:
Doris Roberts, Montana State University/Northern
Barbara Coffman, Montana Environmental Training Center
For the Montana Department of Commerce:
Peter Blouke, Director
Robb Mc Cracken, Treasure State Endowment Program
Newell Anderson, Montana Coal Board
Judy Broadwater, Treasure State Endowment Program
Jim Edgcomb, Treasure State Endowment Program
Gus Byrom, Community Development Block Grant Program
For the Montana Department of Environmental Quality:
Barbara Neuwerth, State Revolving Fund Loan Programs
Tom Slovarp, Planning, Prevention and Assistance Division
For the U.S. Department of Agriculture, Rural Development:
Mitchell R. Copp, Water and Wastewater Loan and Grant Program
For the Montana Department of Natural Resources and Conservation:
Anna Miller, Renewable Resource Grant and Loan Programs
John Tubbs, Renewable Resource Grant and Loan Programs
For the Montana Board of Investments
David Ewer, Intermediate Term Capital Program
For the U.S. Department of Commerce
John Rogers, Economic Development Administration
For the U.S. Department of Housing and Urban Development
J. Robert Harris, Indian Community Development Block Grants
TABLE OF CONTENTS
PREFACE
Preface P-1
INTRODUCTION
I.
A. Introduction 1
B. Water and Sewer Needs 1
C. Purpose 2
D. Use of Workbook 2
THE PLANNING PROCESS
n.
A. General 3
B. Professional Assistance 3
C. Recommended Planning Procedures 5
IMPLEMENTATION
in.
A. Introduction 15
B. Selecting an Engineer 15
C. Design Plans and Specifications 17
D. Construction Bids 18
E. Construction 19
F. Start-up and Final Inspection 19
G. Summary of Implementation 20
IV. FINANCIAL PROGRAM PROCESS
A. General 21
B. Financial Program Steps for Major Improvements 22
1. Finalize Project Cost Estimates 22
2. Evaluate Financing Options and Make Decisions 24
to Proceed
3. Finalize Financial Program 25
4. Conduct Final Engineering, and Plans 27
and Specifications
5. Conduct Preliminary User Fee Study 27
6. Selling of Bonds 28
7. Review and Adjust User Fee Structure 29
TABLE OF CONTENTS
(Continued)
LOAN AND GRANT PROGRAMS
V.
A. Introduction 31
B. Water and/or Sewer Programs 32
1. USDA Rural Development, Rural Utilities Service 32
Agency, Water and Wastewater Loan and Grant
Program
2. Indian Community Development Block Grant 34
Program
3. Public Works and Development Facilities 38
Assistance (Title I)
4a. DNRC Renewable Resource Grant and Loan 41
Program
DNRC Water Development Program 44
4b.
5. DEQ State Revolving Fund (SFR) Loan Programs 49
5a. DEQ Water Pollution Control SRF Program 49
5b. DEQ Safe Drinking Water SRF Program 53
Montana Coal Board Grant Program 58
6.
Community Development Block Grant Program 62
7.
8. Montana Board of Investments Intermediate Term 68
Capital Program (INTERCAP)
9. Treasure State Endowment Program 69
C. Summary of Federal and State Programs for Water 75
and Wastewater Projects
1. Summary Table 76
VI. BASICS OF LOCAL GOVERNMENT HNANCING METHODS
A. Introduction 77
B. Long-Term Financing 78
1. Types of Municipal Bond Offerings 78
2. Description of a Municipal Bond 79
3. Other Bond Provisions 81
4. Bond Underwriting and Marketing 82
5. Servicing the Bond Issue 83
6. Required Time Frame for Bond Issues 84
Required Documentation 84
7.
8. Professional Assistance 85
TABLE OF CONTENTS
(Continued)
VI. BASICS OF LOCAL GOVERNMENT FINANCING METHODS (cont.)
C. Use of Municipal Bonds 87
1. General Obligation Bonds 87
2. Revenue Bonds 92
3. Special Assessment Bonds (SID's & RID's) 95
4. Refunding Bonds 96
5. Pooling Smaller Local Government Bonds 98
6. Summary of Bond Types 98
a. Summary Table 99
D. Other Long-Term Financing Methods 100
1. Capital Improvements Planning and Financing 100
2. Non-voted, Non-revenue Debt 102
E. Short-Term or Interim Financing 103
General 103
1.
2. Methods of Short-Term Financing 104
F. Local Revenue Sources 105
General 105
1.
2. User Fees 105
3. Improvement Districts (SID's and RID's) 109
4. County Water and/or Sewer Districts 123
5. Taxation for Funding Water and Sewer Systems 129
Appendix A: Glossary of Basic Financing Terms A-1
Appendix B: Preventive Maintenance B-1
Appendix C: Publications C-1
LIST OF FIGURES
Number Title
1 Financial Program Process for Major Improvements 23
2 DNRC Renewable Resource Grant and Loan Program 45
Application Procedures
3 Montana State Revolving Fund (SRF) Programs 57
Process
4 Montana Coal Board Grant Program Application 61
Procedures
5 Community Development Block Grant Program 67
Application Procedures
6 Treasure State Endowment Program 74
Application Procedures
7 General Obligation Bond Issuing Process 91
8 Revenue Bond Issuing Process 94
LIST OFTABLES
Number Title
1 Summary of Financial Options for Water and 76
Wastewater Projects for Communities
2 Summary of Municipal Bond Features 99
3 Formation and Operation of Special Improvement 112
Districts for Municipal Governments
4 Formation and Operation of Rural Improvement 119
Districts for County Governments
5 Formation and Operation of County Water and/or 125
Sewer Districts
Wastewater Plant Maintenance B-1
