Village of Saline to Receive Additional $130,000 Loan to Replace Water Treatment Plant

Yesterday, the State Bond Commission met to discuss a host of items including the Village of Saline’s request to supplement their original DEQ loan in the amount of $635,000 that was approved by the State Bond Commission (SBC) on June 18, 2020 (L20-229) with an additional $130,000, bringing the total DEQ loan amount to $765,000. The original DEQ loan in the amount of $635,000 was issued on June 24, 2021. Proceeds are being used for funding the complete replacement of the waste water treatment plant that was originally installed in the 1980’s. Staff has been informed the cost of the project has increased, and DEQ has agreed to loan an additional $130,000 to the Village to cover the cost overruns of the project.

According to the State Bond Commission, “These bonds will be issued under the provisions of the Federal Fiscal Year 2018 Appropriation Act (P.L. 115-141), which provides capitalization grants to clean water revolving funds of Title VI of the Water Quality Act of 1987. The Appropriation Act requires not less than 10% of the amount of capitalization grants shall be in a form that allows “forgiveness” of principal, negative interest loans, or grants and not less than 10% of the amount of capitalization grants shall be used for projects to address green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities.  The grants are to be deposited in the State’s Clean Water Revolving Loan Fund, established pursuant to LA R.S. 30:2301, et seq. However, State regulations do not permit the use of moneys to make grants as a form of subsidization and the Louisiana Clean Water State Revolving Loan (CWSRL) Fund Program, administered by the Louisiana Department of Environmental Quality (LDEQ) under the provisions of R.S. 30:2301, et seq., is not structured to make or administer grants. Therefore, the capitalization grants are being structured as “indebtedness” with the provision that upon approval by LDEQ, the indebtedness can be forgiven.

The LDEQ has formulated program guidelines, which essentially provides traditional loans, partial forgiveness loans, and 100% forgiveness loans. Staff has relied on the LDEQ Administrator to ensure the entity is a qualified applicant and meets all program eligibility requirements. Pursuant to a letter dated June 7, 2021, from LDEQ, the Village meets all program eligibility requirements and has been granted a 100% forgiveness loan. Due to the nature of the transaction, a coverage ratio was not completed.”

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