Plan It, Fund It, Build It: Navigating Infrastructure Funding Sources in Iowa

Plan It, Fund It, Build It: Navigating Infrastructure Funding Sources in Iowa

Finding and applying for the correct infrastructure funding sources is crucial for successful projects. It might seem intimidating, but we’ve broken down the process into three easy phases.  

Plan It

Planning for future community needs is vital to long-term success

Looking ahead allows a community to identify its infrastructure, transportation, and emergency service needs as it grows and changes. This prioritizes thoughtful consideration and allows for budgeting adjustments to achieve the desired outcomes.  

The goals of the planning process are to 

  • Engage stakeholders to learn the community’s long-term desires on growth and development, community character, housing, transportation, and unique infrastructure needs  
  • Evaluate existing conditions and use data to identify and set goals to achieve the community’s vision 
  • Develop a plan to implement the identified goals 

In many cases, showing previous project consideration results in a more favorable application evaluation. Advanced planning demonstrates collaborating and consensus building to arrive at the best solution for each situation. This also allows for intentional project phasing and, in some cases, the ability to leverage multiple infrastructure funding sources. 

Each funding source may have different requirements for the documentation types used to demonstrate previous consideration. Helpful documents include comprehensive or long-range plans, capital improvement programs, master or strategic plans, and visioning exercises. 

Fund It 

The project has been planned, now it’s time to apply. 

In Iowa, the four most popular infrastructure funding opportunities and programs are USDA Rural Development, Community Development Block Grant (CDBG), Iowa’s State Revolving Fund (SRF), and Iowa DOT. Each source has unique requirements and timelines, making it critical to review each closely before applying to determine the best course of action.  

USDA Rural Development’s Water & Waste Disposal Loan & Grant Program is a possible funding source for communities with populations under 10,000. This program provides low-interest loans for an extended period depending on the project’s useful life. USDA will conduct an affordability calculation to determine if the community has maxed out their affordability and will need grant funding to cover the gap. USDA will consider offering a loan and a grant, if necessary. Program applications are accepted anytime. 

The CDBG Water and Sewer Fund program is another great option for communities to obtain infrastructure funding. To qualify, a community’s population must be at least 51 percent low-to-moderate income. The funds awarded are grant dollars and the amount available for each community is based on their population. Applications are accepted quarterly with awards being announced roughly two months later. Prior to applying, you may need to go through a procurement process for your engineer, which can take a few months, as well as set and hold a public hearing. With this program, your projects cannot go out for bid until a release of funds has been issued, which occurs after awards are announced.  

The SRF programs are a great resource for funding clean water or drinking water projects. The most common SRF programs include Planning & Design Loan and Construction Loan. The Planning & Design Loan is zero percent interest for up to three years and can be rolled into your Construction Loan—another low interest loan option to help cover a project’s construction phase. Once your Preliminary Engineering Report or Facility Plan is completed, it is time apply for the Intended Use Plan. It is very important to get on the Intended Use Plan with your project to not miss the quarterly deadlines. 

When funding street, airport, railway, bridge, transit, or trail projects, it’s best to look at programs offered by the Iowa DOT. Every Iowa DOT program has different application requirements and timelines. The best source of information for funding a transportation project is the Iowa DOT’s Guide to Transportation Funding Programs. This online guide summarizes each available program, who is eligible to apply, how much is available, and how to apply.  

If a community is considering funding a project by increasing water or sewer utility funds, it is crucial to involve their municipal advisor. A rate study will be conducted, and the municipal advisor can help determine the best course of action. In most communities, a slow rate increase is preferred over time, so start these discussions early.  

Build It  

Take the project from concept to construction. 

Once planning is complete and funding has been secured, it’s time to bring the project to life. Each project step is crucial, so keep ahead of any major milestones you must complete, including keeping up with Davis Bacon requirements, submitting quarterly or annual reports, and project completion dates.  

The window of opportunity is small when applying for funding, but if done right, can be successful. Knowing where to look, when to look, and who to involve in the discussions are critical for a community to see its greatest potential.  

As published in Iowa League of Cities CityScape Magazine, written by Bolton & Menk funding professionals

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