The Division of Local Government Services recently issued Local Finance Notice 2017-16, “Environmental Infrastructure Trust: the “WISE” Act and Recent Program Changes” jointly with the New Jersey Environmental Infrastructure Trust (EIT) summarizing recent EIT related legislation along with new requirements when financing environmental infrastructure projects.
In May, Governor Christie signed the “WISE” Act (P.L. 2017, c.71) which made changes to both the EIT program as well as implementing new requirements for municipalities financing environmental infrastructure projects. Beginning November 7, 2017, any local government unit financing $1 million or greater for any environmental infrastructure project (or project component) without using the EIT Program must first complete an EIT Financial Cost Estimate by using EIT’s WISE Calculator. A pdf of the Cost Estimate must be included with the local unit’s emailed Supplemental Debt Statement. If the local unit is submitting an application with the Local Finance Board for financing their project, then a printed Cost Estimate must be included with their application. The Local Finance Board has reserved the right to request a printed Cost Estimate for applications submitted prior to November 7.
EIT’s Wise Calculator Cost Estimate will compare the cost of financing environmental infrastructure project through an independent bond issuance versus EIT. “Utilizing independent financial data and the borrower’s submitted information, the Calculator immediately generates a Cost Estimate report detailing annual cash flow projections and total estimated debt savings over the life of the loan.”
For questions regarding the WISE Calculator contact the EIT at 609-219-8600.
Recent EIT Program Revisions
The New Jersey Environmental Infrastructure Program (NJEIFP) is a low-interest financing program offered jointly by the Department of Environmental Protection (DEP) and EIT. The following recent changes have been made to the program to enhance flexibility and attractiveness of EIT financing to local governments.
- Maximum loan terms have been extended to 30 years, but not to exceed the useful life of a project, to reduce annual debt service payments.
- Applicants can apply for and receive short-term project financing from EIT anytime throughout the year, subject to DEP project certification.
- Submission and review process is available online through the H2Loans portal.
- Expedited Review of Equipment Loan applications for such equipment as a street sweeper, sewer flushing, and dump trucks in under 60 days.
- NJEIFP loan applications will be approved by DLGS Director instead of the Local Finance Board.
- Elimination of Local Finance Board approval for non-conforming maturity schedules for NJEIFP loan.
- Automatic statutory waiver of the 5% down payment requirement for bond ordinances that exclusively fund EIT projects.
- Short-Term Construction Loans, up to 3 full fiscal years, to allow for the completion of a project. Acts like a line of credit wherein a borrower receives funds for eligible project expenses upon approval of submitted invoices and only pays interest on funds drawn.
- “SAIL” Program provides quick access to short-term funding in the aftermath of a declared disaster.
We suggest you review this notice with your Chief Financial Officer and local bond counsel.
Contact: Lori Buckelew, Senior Legislative Analyst, email@example.com, 609-695-3481 x112.