Utilities in Indiana and across the nation are faced with an impending infrastructure crisis. Many are already presented with the need to replace hundreds of millions of dollars of infrastructure assets, and more will follow in the decades to come. What solutions are there for utilities to properly plan for and fund future infrastructure replacements and improvements?
Indiana’s State Revolving Fund (SRF) Loan Program has a proposed solution. Nearly 400 Indiana communities have utilized SRF’s low-interest financing since 1991 to improve wastewater and drinking water infrastructure. While utilities are familiar with SRF loans, going forward there are new requirements to the Asset Management Program (AMP). To secure necessary project funding, utilities should be prepared to update existing documentation regarding their AMPs.
Indiana’s General Assembly passed the new AMP requirements and going forward any utility that plans to finance infrastructure improvement projects through SRF will need to meet new requirements. These requirements include:
Based on our extensive experience assisting utilities across Indiana and the Midwest with AMPs, Baker Tilly played a key role assisting SRF in the development of this new guidance. Specifically, Baker Tilly helped define the financial guidance for AMPs used in SRF loans. Under the new financial requirements, utilities are required to have a long-term funding strategy for the necessary water and sewer system capital plans as well as current audits.
Water and Sewer infrastructure represents a very large investment in public assets. AMPs are a valuable management tool whether a utility finances its project through SRF or other sources. A well prepared AMP helps drive long-term project success and sustainability. It is always a good idea to engage a registered Municipal Advisor as MAs are uniquely qualified to help determine how to most effectively pay for AMP identified project improvements as mostly commonly debt issuances (bonds) will be part of the funding solution.
For more information on this topic, or to learn how Baker Tilly municipal specialists can help, contact our team.
Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP, an accounting firm.