Governor McDonnell Announces Significant Investment in Chesapeake Bay Clean-Up
– Over $116 million in bond proceeds directed toward infrastructure projects and job creation across Virginia –
RICHMOND – Governor Bob McDonnell today announced the Virginia Resources Authority's (VRA) issuance of Series 2010A and 2010B Clean Water Revolving Loan Fund (CWRLF) Bonds to finance $116,385,056 in wastewater treatment and sewer system construction and upgrades for projects across the Commonwealth. VRA achieved an all-in total interest cost of 3.93% on the 22-year Series 2010B bonds, the lowest interest rate in the Clean Water program's history. A principal focus of the 2010 projects is to provide system upgrades to reduce nutrient pollution being discharged into tributaries that feed the Chesapeake Bay.
"The Chesapeake Bay is one of Virginia's great treasures, and the dollars generated by these bonds will have a meaningful impact on protecting this wonderful resource for our children, grandchildren and many generations to come," said Governor McDonnell. "As our Administration works hard to attract more jobs to Virginia, the critical capital improvements funded by these bond proceeds will give these localities an advantage in the stiff competition with other states and countries for those jobs. In these unprecedented economic times, the anticipated jobs created by these infrastructure projects will help thousands of Virginians take care of their families. I am excited about the impact that will be produced by the hundreds of millions of dollars in investment expected to be generated by these projects."
"A cleaner Chesapeake Bay improves the quality of life for all Virginians, but it especially benefits the many watermen in Tidewater and along the Middle Peninsula and Northern Neck who depend on its harvests to support their families," said Lieutenant Governor Bill Bolling, who also serves as Virginia's Chief Jobs Creation Officer. "A healthier Bay is also a magnet to countless visitors, and their crucial tourist dollars, who are attracted to its inspiring beauty and many sporting opportunities."
"In issuing the Series 2010A and 2010B bonds, the VRA is building on Virginia's long-standing commitment to help restore the health and vitality of the Chesapeake Bay," said Secretary of Commerce and Trade Jim Cheng. "The dollars that we are investing will help create jobs in those communities, both in the short term and for the long term. These investments will support the top priority of Governor McDonnell's Administration to create jobs and bring more opportunity to every region of Virginia. "
This $116 million of bond funding is the key component of a larger total investment planned for the Clean Water program this year. During 2010, VRA plans to direct an aggregate of nearly $200 million from the CWRLF toward 19 wastewater treatment and sewer system projects, plus several additional projects under consideration, all at discounted loan rates well below VRA's borrowing costs for the local communities.
The economic activities associated with the 2010 projects are projected by Chmura Economics and Analytics to result in a one-time construction direct impact of over $186 million in spending and 1,756 jobs across Virginia.
The total bond funding includes $8,392,900 in Clean Water State Match Revenue Bonds that will fund the state match requirement in order to access over $40 million in additional federal grant funds for Virginia's CWRLF program in 2010. The CWRLF has received annual grants from the U.S. Environmental Protection Agency (EPA) since 1987 along with the required 20% state match, which, in the past, has been funded with State General Fund appropriations. VRA worked with the Virginia Department of Environmental Quality (DEQ) to gain approval from the EPA to issue bonds for funding the state match, the first time such approval was granted in EPA Region 3.
"We recognized the state budget challenges and began working diligently to develop a strategy to fund the state match in the summer of 2009," said VRA Executive Director Dr. Sheryl Bailey. "In these tight budget times we knew we needed to be creative to help the state bridge the budget gap and keep this vital program going. This innovative approach allowed the Commonwealth to take full advantage of the available federal grant for the Clean Water program, while saving the state budget $8.4 million."
The low borrowing rates, coupled with the flexible loan structuring, help make these funds available to the participating jurisdictions at a time when budget dollars from other sources may be unavailable. These low borrowing rates result directly from recognition by the financial services industry of the VRA's 25-year track-record of strong financial management and careful oversight.
"As a former County Administrator who partnered with the VRA, I can say first-hand that there were projects to protect the health, safety and welfare of our community that we could not have completed without the low-cost and below-market financing that the VRA provides to localities throughout the Commonwealth," said Mr. William G. O'Brien, Chairman of the VRA Board of Directors.
In 2010, the CWRLF will finance 19 projects in 15 communities across Virginia. These bonds will support enhancements to wastewater treatment plants and associated infrastructure owned and operated by the Cities of Charlottesville, Newport News, Norfolk, Richmond, Lynchburg and Covington, Arlington County, the Towns of Mineral, Cape Charles, New Market and Richlands, the Wise County Public Service Authority, the Hampton Roads Sanitation Authority, the Meadowview Biological Research Station, and the Rivanna Water & Sewer Authority.
The CWRLF is jointly administered by VRA and DEQ. VRA serves as the financial manager, underwriting and closing all loans, managing the extensive loan portfolio and performing all fiscal agency functions. DEQ serves as the program administrator, overseeing applications, project eligibility criteria and engineering management of the projects.
About the Virginia Resources Authority: VRA provides innovative, cost-effective and sustainable financial solutions to local governments and other public bodies for projects that build vibrant and healthy Virginia communities. Since 1984, VRA has funded more than 955 critical projects across the Commonwealth representing nearly $5 billion of investment in Virginia's localities with over $2.2 billion of funding provided since 2006 For more information on the Virginia Resources Authority, visit their web site at www.virginiaresources.org.
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