20100524Application, State Revolving Loan.pdf

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1000 Riverwa1 Drive, Suite 200
PO Box 50130
Idaho Falls, Idao 83405
Tel: [phone]
Fax: [phone]
ww.holdenlega.com
E-mail: rharis(?holdenlegal.com
May 20, 2010 ~~~p
Idaho Dep ent of Environmental Quality
ATTN: cy Bowser
1410 . ilton
Boi ,ID 83706
RE: Complete Application for State Revolving Loan.
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Dear Ms. Bowser:
Enclosed please find a completed Form 2(a) Application for State Revolving Loan submitted
on behalf of Morng View Water Company of Rigby, Idaho. We have completed the application
and attached the attachments as best as we understand the application. Additionally, we felt that it
may be usefu to have ths cover letter with some explanatory inormation for some of the items
requested in the loan application. If you have any questions concernng any of the items we have
provided, please let us know and we will respond immediately.
As an initial matter, we previously sent to you a letter of interest form with a number of
attachments outlining the issues surounding the Mornng View Water Company. Afer reviewing
the loan application, it appears that it will be usefu to attach the letter of interest documents, along
with my cover letter, to the form. To the extent it contains information that is requested in the loan
application, I will refer to it in ths cover letter.
, Additionally, Mornng View submitted an application to the Public Utilities Commission
requesting authority to borrow fuds in order to perform upgrades to its water system and to comply
with IDEQ standards. We recently received Order No. 31061, dated April 22, 2010. A copy of ths
order is also enclosed for your reference and review.
Paragraphs A though H have been filled out with the appropriate inormation. We would
note that Morning View has not hired a bond attorney, and did not pursue one as it is not a
muncipality.
Paragraph J (1) of the application requests a proj ect description. This is best described in the
PUC Order attached to this letter. As stated in that Order, we requested authority to borrow fuds
"in order to perform upgrades on its water system and ensure compliance with certain. Idao
Deparent ofEnvIronmental Quality stadards." If granted, the loan proceeds will be used to fud
various projects associated with the water system, including installation of variable speed drives,
Established in 1896
,
Nancy Bowser
Idao Deparent of Envionmental Quality
May 20, 2010
Page 2 of4
installation of water meters on every lot, pump testing of two existing pumps, installation of the
backup generator, and the driling a new muncipal well to curent IDEQ standards.
Paragraph J(2). Whle we have filled in the amounts on ths paricular par of the application,
we would also refer you to page 1 of the PUC order, which outlines the projects and their anticipated
costs.
Paragraph J(4) requests the applicant to explain why the project is needed and/or what
benefits would be derived from the project. In the documents associated with our letter of interest
form, I discussed the benefits that would derived from the project in my letter dated Januar 13,
2010, at page 2 beging at the paragraph entitled "Step 2".
Paragraph J (5) requests that we explain what public health regulation and enforcement action
will be addressed by the project. Attched is the amended consent order executed between IDEQ
and Mornng View from Janua 2010.
Paragraph J(6). Mornng View attempted to obtain fmancing from both public and private
entities. Intially, Morng View was actually inormed that it would not qualify under DEQ's
revolvig drnkng water state revolving fud, and we therefore looked elsewhere. Mornng View
inquired with the Rural Development Alliance, but afer discussing the specific needs of Morning
View, was informed by RDA staf that Mornng View would not quaify for fuding under their
guidelines. Mornng View thereafer tued to private financing possibilties, but was unsuccessful
in receiving private fmancing from a number of commercial bans. It was only afer informing
attorneys for the State of Idaho that the ability to obtain financing appeared to have ended, fuher
inquiry was made into the State's drinng water state revolving fud, and it was determined that
Mornng View may qualify for the proceeds for such a loan.
Paragraph J(7). A public meeting was held on June 9, 2009, at 6:30 p.m. at the Rigby City
Library to discuss the pressure issues that were facing Morng View Water Company. Due to a
miscommuncation from myselfto Mr. Greg Eager of the DEQ offce in Idaho Falls, he was not able
to attend, but Mornng View, myself, and Ryan Loftus of Aspin Engineerig met to discuss the
challenges facing the Morng View system and how we intended to move forward to bring the
system into compliance. We discussed in that meeting that there were a number of possibilties,
including an attempt to receive a loan or grant to improve the system, which could lead to a rate
increase in the futue. The meeting provided an opportty for patrons to ask questions, make their
own recommendations for improvement, and to lodge complaints with the system's operation.
Paragraph J(8). Mornng View is not a muncipality, and therefore did not seek a bond
election, nor did it attempt to form a local improvement distrct.
Paragraph J(9)(b). Attached to the LOI was a final facility plan dated April 13, 2009. The
plan appeared to generally comport with DEQ standards, although it did not contan a time line, and
Nancy Bowser
Idao Deparent of Environmental Quality
May 20, 2010
Page 3 of4
therefore was deemed slightly deficient by DEQ staff. The fmal facilty plan will be updated and
submitted toDEQ on June 1,2010.
Paragraph J(10). Morning View is in the process of reviewig an environmental
clearance/determnation. We will provide it to you as soon as we receive it. Preliminarly, there is
a fmding of no significant impact.
Paragraph J(11). The anticipated amounts are set fort in the application. However, as a
narative to how Mornng View intends to move forward, we hope to instal the meters and variable
speed drves imediately. We anticipate that ths could be done between July 1 and August 31,
2010, but this work may continue into the four quaer of 20 1 O. Additionally, assumng the loan
is granted, we intend to move forward with the driling of the new well as soon as possible. We
therefore would anticipate that with the meters, drillng of the new well, and installation of varable
speed drives, we would anticipate drawing out $210,000.00 by the end of 2010. We anticipate
instalation of the backup generator and followup work to be finished by June 30, 2011, where we
would withdraw up to the final $65,000.00, if necessar.
Paragraph K(1). Attached you wil find financial statements from Morning View.
Paragraph K(2). Attached you will find the financial statement from Morning View which
shows the capital budget.
Paragraph K(3). Attached is a sumar of user rate charges prepared by Mornng View.
Paragraph K(4). The engineering report is attached to the Letter ofInterest documentation
attched hereto.
Paragraph K(5). Mornng View curently does not have any other loans, and therefore we
have not provided any repayment schedule.
Paragraph K(6). This requests an operation and maitenance manual, which is best
sumarzed by the engineering report attached to Letter ofInterest form and provided hereto.
Paragraph K(7). Morng View Water Company does not have board members, and
therefore this is not applicable.
Paragraph K(8). As stated above, Mornng View Water Company does not have board
members, and therefore does not have board governance policy.
Paragraph K(9). Morning View does not curently have a personnel policy, as it only
curently has one par-time employee and one full-time employee, Mr. Nolan Gneiting. It is
,
Nancy Bowser
Idaho Deparent of Environmental Quality
May 20, 2010
Page 4 of4
anticipated that once the Morng View system comes into compliance, personnel policy will be
prepared for Mornng View.
Paragraph K(lO). The curent operating and emergency plan is the engineerig report
attached to the Letter of Interest documentation.
Paragraph K(11). Mornng View does not curently have a safety and/or risk management
plan, but will endeavor to prepare such a plan once the Morning View water system is in and
approved status.
Paragraph K(12). Mornng View does not curently have a wrtten customer service policy,
however, its office is open on weekdays from 8:00 a.m to 5 :00 p.m., and there is a 24 hour answering
service for any emergencies. Mornng View intends to prepare such a customer service policy in the
near futue.
If you have any questions or concerns regarding the above information, please let us know,
and we will endeavor to respond as promptly as we can. We appreciate your kid assistance in ths
matter, and are hopefu that Mornng View will receive the requested loan.
Best Regards,~?~
Robert L. Hars
HOLDEN, KIDWELL, HAHN & CRAPO, P .L.L.C.
c: Nolan Gneiting
Greg Eager, Engineering Manager, DEQ
/ Terr Carlock, Public Utilities Commission
G:\WPDATAIR9348-06 Gneiting\Nancy Bowsr lir 052010.wpd:cdv
1-Idaho Department of Environmental Quality Drinking Water State Revolving Fund
Form2-A
Application for State Revolving Loan
Pre-Application Meeting Date ¡January 20, 2010 c.:-i?-::¡C'--))'rr,,,(OfOe: 1')n;: -
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Project Identification and Description
A. APPLICANT Public Water System Number IID7260063
Name and Title ~Orning View Water Company
Address ~ E. 200 N.
City IRi9bY
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State EI Zip Code §442+'
Phone, Email, & Fax [phone], morningviewhomes(§qwestoffce.net;208-745
B. PRESIDING OFFICIAL Public Water System Number 1107260063
Name and TItle INolan Gneiting
Address ¡PO Box 598
City ¡RigbY State EI Zip Code 183442
Phone, Email, & Fax [phone]; morningviewhomes(§q~~
Public Water System Number ~
J
C. CONTACT PERSON
Name and Title C
Address
J
D. CLERKIREASURER
State D Zip Code C( iPhone, Email, & Fax i___~___._~____~__~____~_~_____--
Name and Title IDenise Kynoch ~__~____~
Public Water System Number IID7260063________J
E. CONSULTING ENGINEER Name and TItle IRyan Loftus, PE, Aspen Engineering, Inc. I______________._._____.____-1
Address §~~~~~~~_~_~.:_._._____________~_______~__~_J
Iidaho Falls State EI Zip Code 183401
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I______JCity
City
-.Phone, Email, & Fax [phone]; ryan(§aspeneng.net; 208-542-1922
Form 2-A Application for Revolving Loan 1
-Idaho Department of Environmental Quality
Public Water System Number
Name and TItle ~A
Address I
City L -- State D Zip Code L J
Phone, Email, & Fax I I~~--~~-_._--~~----------~-~~-'
I. DESCRIPTION OF PROJECT SETING
Location of Project 13996 E.200 N., Rigby, 10 83442 I countylJeffrson
F. FINANCIAL
CONSULTANT
G. LEGAL ADVISOR
H. BOND ATTORNEY
Dnnking Water State Revolving Fund
Public Water System Number 1107260063
Name and Title I
Address L
City I J State D Zip Code I
Phone, Email, & Fax L
Public Water System Number 1107260063 ~
Name and Title Robert L Harris; Attorney; Holden, Kidwell, Hahn & Crapo, PLLC
Address ~ 50130
City Iidaho Falls State EJ Zip Code 183405-0130 I
IPhone, Email, & Fax [phone]; rharrisigholdenlegal.com; 208-523-9518 !--
J. GENERAL PROJECT OVERVIEW AND BENEFITS REPORTING
i. Prjec desption t
See attched cover letter.
a ) Year constrction wil be initiated
b ) Year constrction wil be completed
2. Constrction cost estimate (use curent dollar value):
a) Treatment plant
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12010
lEnd of2011
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b) Trasmission and distribution system
c) Storage
d) Land acquisition
e) Source development
Form2-A
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Application for Revolving Loan 2
-Idaho Department of Environmental Quality Drinking Water State Revolving Fund
t) Purchase of existing systems
g) Restrctung
h) Other
i) Total cost
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3. Financing the new facilties
a) Total cost §7S,O~~_~
b) Are fuds already available for the project? 0 y ~ N
c) List other expected fuding (specify agency and status of funds)
INone
ON/A
I._----------~~------._------------ ------------~~~-~-------~d) Amount to be financed §,ooo __~_~_ J
Amount to be fmanced = Total cost - fuds already available for the project - other
expected funding
4. Explain why the project is needed and/or what benefits wil be derived from the project.
Examples would include, but not be limited to the following:
-Reduction of health risk(s). (If so, specify the health risk(s) averted and how many
people are affected.) Exaples of health risks addressed by such actions as the
development of new sources, treatment, or other methodologies might include:
-Elimination of primar inorganic chemical risk (for example, antimony, arsenic,
asbestos, barium, beryllum, cadmium, chromium, copper, cyanide, fluoride, lead,
mercur, nickel, nitrte, nitrite, selenium, thallum)
-Elimination of primar chemical risks (for example, trihlomethanes,
radionuclides, organic chemicals)
-Elimination of infitration or intrsion of seconda pollutants (for example,
chloride, fluoride, iron, manganese, silver, sodium, sulfate, zinc)
-Installation of security measures.
-Installation ofbackfow prevention devices.
-Lower operating costs. (If so, how much money is estimated to be saved anually?)
-Abilty to provide safe drnking water to those not curently served by a community
system. (If so, how many additional people wil be served?)
- Water conservation. (If so, what is the estimate of water savings?) Examples of measures
taken to conserve water would include installation of meterig, dual distribution,
improvement of the distrbution system, or installation of pressure reduction devices.
-Oter benefits might include the installation of treatment plant discharge
improvements or a new distribution reservoir.
Form2-A Application fõr Revolving Loan 3
-~Idaho Department of Environmental Quality Drinking Water State Revolving Fund
See attached documents.
5. Explain what public health regulation or enforcement action wil be addrssed by the project.
See attached documents.
6. Explain what good-faith effort have been taen to secure all or par of the project costs from
other fuding agencies.
See attached documents.
7. Describe public paricipation leading up to the loan application. (Meetings, fact sheets, etc.)
I
I~~______~_~~~_~____--
See Attached meeting.
8. Public support for the project:
a) Bond election date E___~_~~_____j
Bond type I
I--------___~---_-.
Passed: IJYes IJNo
b) Local Improvement Distrct (LID)
EA_ _ ___ ____ ___
Date Formed L
Form 2-A Application for Revolving Loan 4
1_-Idaho Department of Environmental Quality Drinking Water State Revolving Fund
c) Date of judicial decision to proceed with "Ordinar and Necessar" determination
INA ¡-.
9. Type of planing document prepared (facilty plan, engineering report, etc.)
E0~~~~~ty ~lan~~_______________________J
a) Planing document date I I
April 13, 2009 ______J
b) Enclose a copy of the curent planning document if it has not already been submittd to
the Deparent of Environmental Quality (DEQ).
10. Type of environmental clearance/determinationa) Categorical exclusion 0
b) Finding of no significant impact IZ
c) Environmental impact statement 0d) Date of determination 0
e) Agency rendering the environmental clearance/determination 0
11. Estimated schedule of cash draws against the loan
Quarter Ending (give date)Cash Draw Amount
December 31,2010
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1$60,000.00
iJune 30, 2011 i
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Form 2-A Application for Revolving Loan 5
Idaho Departent of Environmental Quality Drinking Water State Revolving Fund
K. PLEASE ATTACH COPIES OF THE FOLLOWING:
1. Audited financial statements for the three previous years.
An independent audit provides expert testimony regarding an entity's internal controls,
integrity of financial statements, and adherence to generally accepted accounting stadards.
Periodic financial audits produce verifiable inormation that can be easily examined by the
Applicant's management team, as well as financial assistace providers and regulatory
agencies. In terms of the anual business cycle, periodic financial audits contrbute valuable
inormation for analysis puroses.
If your system has not been required to have audited financial statements (or to prepare
financial statements in accordance with generally accepted accounting principles), then
provide sumrized statements of anual expenses and revenues, along with anual
statements of assets (what you own) and liabilties (what you owe).
2. Operating budget and capital budget.
Effective operation of a water system requires use of an anual budget. A system's budget
should forecast planned revenues and expenditues for the coming year based on anticipated
activities. The budget is then used to control activities and evaluate performance of the
system.
An example of a good budgeting technique would be a water system that keeps a cash
reserve of one and one-half the monthly operational expenses. Such a system would be
conscious of the need to be prepared for emergencies, payment delinquencies, and other
short-term cash flow problems. The cash budget goal of one and one-half the monthly
operational expenses is suggested because many small water systems may not be able to
quickly assemble their board of directors to deal with cash-flow problems. Until the
governing board can be convened, the costs of operation would be covered.
The use of a multi-year capital budget is a positive indicator of financial management and
supports the assessment of finacial capacity conditions. A capital budget is an indication
that the water system is aware of the need for fmancing infrastrctue upgrde and/or
replacement.
3. User rate charges (and ordinance, if applicable).
4. Engineering report.
5. Repayment schedule(s) for any other loan(s).
6. Operations and maintenance manuaL.
An operations and maintenance (O&M) manual provides technical guidance on how the
water system is operated and is likely to be the system's most detailed guidance document.
O&M manuals also include guidance for monitorig and reporting of water samples and
testing results, and help ensure continuity of quality service in the event of staff tuover.
7. List of board members.
8. Board governance policy.
The board governance policy reflects the protocols for the governing board's activities. This
policy includes qualifications for election of board members, the number of members who
may serve and their terms of offce, rules regarding the conduct of meetings, etc.
Form 2-A Application for Revolving Loan 6
Idaho Department of Environmental Quality Drinking Water State Revolving Fund
Establishing board protocols can improve the effciency of board meetings and result in
effective use of offcers' time.
9. Personnel policy.
The personnel policy tyically includes guidance regarding hiring, probation, dismissal, and
disciplina procedures; provides detail on employee compensation and frnge benefits;
establishes requirements for conduct and performance; describes job descriptions and
expectations; and explains procedures for employee evaluation.
10. Operating emergency plan.
Every public water system should plan for natul disasters and other emergencies.
Specifcally, the water system management team should indicate what steps are to be taen
and what actions are to be accomplished, given a variety of theats to service delivery.
11. Safety and/or risk management plan.
Accidents can cause significant disruptions of water service and create unexpected financial
liabilties. A safety and risk management policy attmpts to confine the scope of authority of
employees and managers in order to reduce the risk of such negative financial exposur. A
water system's insurnce provider can offer assistace in establishing risk management
guidelines to limit liabilty.
12. Customer service policy.
A water system is in the business of providing safe drnking water to its customers. By
clarfying how the water system will relate to its customers, a customer service policy
strengthens the relationship between the two paries. The customer service policy should
include public information guidance, complaint resolution procedures, problem response
requirements, biling and other notification rules, and other actions the system can tae to
assure customers that the water system is being ru in the most professional maner
possible.
NOTE: Water systems with limited staff capacity to create these policies can borrow and
adapt sample policies, which may be available from the following organiztions:
-Rural Community Assistace Corporation
-Idao Rural Water Association
-U.S. Environmental Protection Agency
-American Water Works Association
Other water systems of comparble size may be good sources of sample policies.
Please keep in mind that your written policies and procedures need only be as complex as
the size and natue of your system.
Form2-A Application for Revolving Loan 7
~1_1_.
Idaho Department of Environmental Quality Drinking Water State Revolving Fund
L. APPLICATION AUTHORIZATION
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Signature of person responsi e for completing this form
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Printed name of person resp
~Date I /1/ ?etJ(
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Printed name and title of a thorized representative
~1 t"ý "ZpDate
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Signature of Wi ess to signing 0 authorized representative
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Printed name of witness
J1ff IClc2()Date
Form 2-A Application for Revolving Loan 8