Document ID: EPA-HQ-OW-2016-0178-0020
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2019-04-23T04:00Z

ICR Supporting Statement
Information Collection Request for EPA Application Materials for the Water Infrastructure Finance and Innovation Act
OMB Control No. 2040-RENEWAL, EPA ICR No. 2549.02

A.  Justification.

       Explain the circumstances that make the collection of information necessary.  Identify any legal or administrative requirements that necessitate the collection. 

      The collection of information is necessary to receive applications for credit assistance pursuant to section 5024 of the Water Infrastructure Finance and Innovation Act (WIFIA) of 2014, 33 USC 3903. The purpose of the WIFIA program is to provide Federal credit assistance in the form of direct loans and loan guarantees to eligible clean water and drinking water projects. In addition, America's Water Infrastructure Act of 2018 passed on October 10, 2018 reauthorized the WIFIA program and created a separate loan program specifically for State Revolving Fund (SRF) programs. Therefore, the collection of information is necessary to receive applications for the SRF WIFIA (SWIFIA) program currently under development, pending appropriation.

      WIFIA requires that an eligible entity shall submit to the Administrator an application at such time, in such manner, and containing such information, as the Secretary or the Administrator may require to receive assistance under WIFIA. To satisfy these requirements, EPA must collect a Letter of Interest (LOI) and an application from entities seeking funding. The relevant section of WIFIA is attached hereto as Exhibit A. EPA is publishing this notice to give entities an opportunity to submit application materials upon appropriation of funding for the WIFIA program and/or the SWIFIA program. This collection is necessary to determine whether each proposed project meets creditworthiness and other Federal requirements to receive WIFIA credit assistance.
      

 2.	Indicate how, by whom, and for what purpose the information is to be used.  Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.

      The LOI and the application for the base WIFIA program and SWIFIA program (attached as Exhibits B, C, D, and E) collected from prospective borrowers through this solicitation will be used to evaluate applications for credit assistance under the WIFIA eligibility requirements and selection criteria as outlined in the annual Notice of Funding Availability (NOFA).
      
3.	Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden.  

	The LOI form is available electronically. To reduce burden and reduce the number of copies required, the LOI and supporting documents are submitted via WIFIA's SharePoint site or e-mail. The application is available electronically. It is also submitted electronically via WIFIA's SharePoint site.   
       
 4.	Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purpose(s) described in item 2 above.
            
      The LOIs and applications will generally be project specific and the information is not available elsewhere. Applicants may reference documents that already exist and submit the documents as attachments as part of the LOI and application process. 

 5.	If the collection of information impacts small businesses or other small entities (item 5 of the OMB form 83-1), describe the methods used to minimize burden.

      Eligible applicants under WIFIA include corporations, partnerships, joint ventures, trusts, Federal, State, or local governmental entities, agencies, or instrumentalities, tribal governments or consortium of tribal governments, and state infrastructure financing authorities, which could include small entities. LOIs and applications are voluntary. EPA cannot minimize the burden to small entities, because WIFIA requires all eligible entities to submit an application in order to receive credit assistance. The relevant section of WIFIA is attached hereto as Exhibit A.

 6.	Describe the consequence to federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.

      If the collection is not conducted, EPA will be unable to satisfy the statutory mandate to require the submission of applications. Therefore, WIFIA credit assistance will not be available. To provide credit assistance to eligible projects, which is the purpose of the program, EPA must collect letters of interest and applications that respond to the eligibility requirements and selection criteria.

 7.	Explain any special circumstances that would cause an information collection to be conducted in a manner inconsistent with 5 CFR 1320.6:  

      There are no special circumstances. The collection of information is conducted in a manner consistent with the guidelines in 5 CFR 1320.6.    
            
8.	Efforts to consult with persons outside the agency to obtain their views

      On DATE OF PUBLICATION (Month, day, and year), Vol. No. _____, pages __________ to __________, the Agency published the notice of information collection and request for comments in the Federal Register. The solicitation is attached as Exhibit D. ________ comments were received.
      
      EPA will consult with persons outside the Agency to obtain their views on the availability of data, frequency of recordkeeping, disclosure, or reporting format, and on the data elements to be recorded, disclosed, or reported. 

 9.	Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.  

       No payments or gifts are provided to respondents.

10.	Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

      EPA cannot offer an assurance of confidentiality to any applicant. The applicant is directed to state if any information submitted in its LOI, application, or any supplementary material may not be released by the Agency upon request from a member of the public or otherwise made publicly available. The applicant must identify the confidential business information and provide reasons why such information is confidential business information and should not be released, including particulars as to any competitive harm which would potentially result from the release of such information. The Agency will handle requests from the public for release of information under its standard Freedom of Information Act procedures. 

11.	Provide additional justification for any questions of a sensitive nature.

      Questions of a sensitive nature are not found in this information collection.
            
12.		Provide estimates of the hour burden of the collection of information.  
      Based on respondent numbers and burden data from the WIFIA's 2017 and 2018 rounds of collecting LOIs and applications, EPA is estimating the burden below.
       
      LOI (Base Program & SWIFIA):
                              LOI Burden per LOI
Function
Legal
Manager
Technical
Clerical
Read LOI guidelines
                                                                               
                                                                              1
                                                                              1
                                                                              1
Gather Information
 
 
                                                                              8
                                                                              3
Complete basic LOI form
 
 
 
                                                                              1
Complete narrative
 
 
                                                                             18
 
Review LOI
                                                                              5
                                                                              5
 
 
Compile LOI
 
 
 
                                                                              2
TOTAL
                                                                              5
                                                                              6
                                                                             27
                                                                              7
 Total number of unduplicated respondents: 60
 Frequency of response: one per respondent
 Annual hour burden per application: 45
 Total annual burden hours: 2,700

	Application for Borrowers (Base Program & SWIFIA):
                      Application Burden per Application
 
Legal
Manager
Technical
Clerical
Read application guidelines
                                                                               
                                                                              1
                                                                              1
                                                                              1
Gather Information
 
 
                                                                             25
                                                                              5
Complete application form
 
 
 
                                                                              1
Complete narrative
 
 
                                                                            100
 
Review Application
                                                                              4
                                                                             10
 
 
Compile Application
 
 
 
                                                                              2
TOTAL
                                                                              4
                                                                             11
                                                                            126
                                                                              9

 Total number of unduplicated respondents:  40
 Frequency of response: one per respondent
 Annual hour burden per application: 150
 Total annual burden hours: 6,000

13.		Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information.  
      
      EPA estimates that the total annual cost burden to respondents will be $15,109,113.40. The tables below show the breakdown in these costs for the LOIs, Applications, and other Application Costs. The numbers in blue in the tables below add up to the total annual cost of $15,109,113.40. This estimate includes the following:
      
      LOIs (Base Program & SWIFIA)
      
      For the LOI, EPA estimates 2,700 annual burden hours and the annualized cost of those hours is $110,727. 
      
Number of Collections per year
Hours per Collection
Total Hours per Collection
Total Cost per year
60
45
2,700
$110,727
      
      Applications (Base Program & SWIFIA)
      
      For the application, EPA estimates 6,000 annual burden hours and the annualized cost of those hours is $248,386.40.
      
Number of Collections per year
Hours per Collection
Total Hours per Collection
Total Cost per year
40
150
6,000
$248,386.40
      
      Note: EPA used the following median hourly wages from the May 2017 National Occupational Employment and Wage Estimates United States (http://www.bls.gov/oes/current/oes_nat.htm) from the U.S. Bureau of Labor Statistics to calculate the cost of the estimated burden hours:
 Lawyers= $57.33
 Management= $50.77
 Engineers= $41.73
 Office and Administrative Support= $18.21
      
      Application Costs  -  Other
      
      	In addition, applicants will be charged two fees. An application fee will be due upon submission of the application. For applications for projects serving small communities (population of not more than 25,000 people), this application fee will be $25,000. For all other applicants, this application fee will be $100,000. A credit processing fee will be due upon loan closing, to reimburse costs incurred by the EPA due to legal, financial, and other expert contractor help. Due to the nature of this fee, the amount is expected to vary between applicants. However, EPA estimates these costs based on the FY 2017 borrowers as approximately $275,000 per applicant, a portion of which may be waived at the discretion of the EPA. The application fee is considered a down payment to the credit processing fees. The total fees, given the down payment of the application fee (per borrower) would be $350,000. The total for 40 borrowers, estimating 3 small community borrowers, 32 large community borrowers, and 5 SWIFIA borrowers is $11,000,000.
      
      By statute, applicants to the base WIFIA program are required to submit a preliminary rating letter at the time of application and two (2) final rating letters at the time of closing that indicate that the senior obligation of the project has an investment grade rating. The cost of these rating letters vary based on the size and complexity of the project. Based on bond rating agency estimates and industry research, EPA estimates that the final rating letters will cost approximately $50,000 per letter and that the initial preliminary rating letter is included in the cost of one of the final letters. The total cost for 35 applicants (3 small community borrowers and 32 large community borrowers) is $3,500,000. Applicants to the SWIFIA program are required to submit a preliminary rating letter at the time of application and one (1) final rating letters at the time of closing that indicate that the senior obligation of the project has an investment grade rating. These rating letters must be from a bond rating agency identified by the Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization. The total cost for 5 applicants will be $250,000.
      
      
Large Community
Cost
# of Applications

Application Fee + Credit Processing Fee
 $275,000 
                                                                             32
 $8,800,000
Two Rating Letters
 $100,000
                                                                             32
 $3,200,000 
Annual Total per borrower
$375,000
 Annual Total 
 $12,000,000 
      
Small Community
Cost
# of Applications

Application Fee + Credit Processing Fee
 $275,000 
                                                                              3
 $825,000
Two Rating Letters
 $50,000
                                                                              3
 $300,000 
Annual Total per borrower
$325,000
 Annual Total 
 $1,125,000
      
SWIFIA
Cost
# of Applications

Application Fee + Credit Processing Fee
 $275,000 
                                                                              5
 $1,375,000 
One Rating Letter
 $50,000
                                                                              5
 $250,000
Annual Total per borrower
$325,000
 Annual Total 
 $1,625,000
      
14.	Provide estimates of annualized cost to the federal government.  
	The estimated cost to the Federal government of this request for letters of interest and applications is $3,512,217.76. This cost reflects three components:

 EPA follows an evaluation process to review each LOI and application and to determine which projects will receive WIFIA funding. This process includes technical, financial, and management review of the letters of interest. Then, additional technical, financial, and management review of the applications. EPA estimates that this process will take 65% of the 26 FTE's time employed by WIFIA. 
      
      The estimated average annual cost for EPA personnel is $129,869 based on the General Schedule (GS) 14, Step 05 level from the 2018 GS salary table. The annual cost was then multiplied by the standard government benefits multiplication factor of 1.6 to calculate an estimated annual pay including benefits per FTE of $207,790.40. Therefore, the estimated annualized cost for the evaluation team is $3,511,657.76. 
      
 EPA will hire legal, financial, and other expert contractor support for credit processing. These costs are estimated to be $275,000 per application and are expected to be reimbursed in full by the applicants. The net estimated annualized cost to the Federal Government for credit processing is $0.

 EPA will print application materials. EPA does not expect to need any special equipment or support, other than printing. As noted above in item 12, EPA expects 60 letters of interest and 40 applications. If each LOI is 25 pages and each application is 50 pages, as requested in the solicitation, EPA may need to print as many as 3,500 pages for staff involved in the evaluation process. EPA estimates up to 8 staff may need materials which adds up to a total of 28,000 pages of printing. EPA's printing costs are approximately 2 cents per page, which adds up to a total printing cost of $560.  
	 
       Explain the reason for any program changes or adjustments reported in items 13 or 14 of the OMB form 83-1.  
      
      For the respondent burden in item 13, the annual cost increased compared to the previous submission of OMB form 83-1. Since program inception, EPA received more LOIS and applications than it originally estimated. EPA estimated the program would receive 20 LOIs and 5 applications. This was based on the amount of budget authority initially authorized for WIFIA. However, in 2017, the program received 43 LOIs and invited 12 prospective borrowers to apply. In 2018, the program received 62 LOIs and invited 39 prospective borrowers to apply. In addition, EPA is including the newly authorized State Revolving Fund WIFIA (SWIFIA) program as part of this ICR renewal. EPA estimates that WIFIA will receive 5 LOIs and 5 applications through SWIFIA.
      
      For the cost to the federal government, EPA's annual cost increased for the same reason as for item 13. It received more LOIs and applications then initially anticipated. Due to the large number of LOIs and applications, EPA has since hired more WIFIA staff to meet the burden of these reviews. Due to the nature of the work, the majority of WIFIA staff are legal, financial and technical experts with salaries that are high on the GS scale. This also increases the cost.
       For collections of information whose results will be published, outline plans for tabulation, and publication.  

      The letters of interest and applications collected for the WIFIA program will not be published. EPA will maintain a publicly available list of projects that have submitted letters of interest and applications to the WIFIA program. The current lists are available at https://www.epa.gov/wifia/wifia-financing-requests. 
17.	If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.  

      The Agency plans to display the expiration date for OMB approval of the information collection on all instruments.
              

18.	Explain each exception to the certification statement identified in item 19, "certification for paperwork reduction act submissions," of OMB form 83-1. 

      The Agency is able to certify compliance with all provisions under Item 19 of OMB Form 83-I."