Comments submitted by AMWA last week in response to EPA’s information collection request (ICR) on draft Water Infrastructure Finance and Innovation Act (WIFIA) application materials praised the application process laid out by the agency, but strongly objected to nonrefundable application fees that EPA proposes to collect along with every WIFIA application starting next year.
Developed with the input of AMWA members, the association’s comments expressed support for the framework of EPA’s proposed two-step application process. As outlined in the ICR, potential applicants would complete an initial “letter of interest” that EPA would use to screen projects for WIFIA eligibility and to rank proposed projects against selection criteria mandated by Congress and developed by the agency. EPA would then invite the sponsors of selected projects to submit a formal WIFIA application.
“AMWA believes that the structure of this process as outlined is reasonable, and we appreciate that no application fee or other payment would be required at the time of submission of a preliminary letter of interest,” the association’s comments said.
But AMWA’s comments went on to express concerns about mandatory, nonrefundable application and credit processing fees totaling roughly $300,000 that EPA intends to collect from each WIFIA applicant to offset costs associated with administering the WIFIA program. AMWA noted in response that the ICR forecasts EPA to spend roughly $1,765,782 per year to run the WIFIA program, but the agency has sought $5 million from Congress to cover WIFIA administrative costs in FY17.
“Given that EPA’s FY17 budget request for WIFIA administrative costs was nearly three times larger than the ICR’s estimate of the program’s annual operating expenses,” AMWA commented, “we question whether it is necessary for the agency to further collect application and credit processing fees of approximately $300,000 per applicant … [which] could deter many public water systems from considering WIFIA as an affordable infrastructure financing option.”
At a minimum, AMWA urged EPA to make the application and credit processing fees refundable to utilities that do not ultimately obtain a WIFIA loan, or to grant successful WIFIA applicants the option to repay their fees over the course of the loan repayment period.
EPA is expected to issue a proposed rule for WIFIA implementation by this fall, and the program is anticipated to begin soliciting loan applications during the 2017 fiscal year.