OFFICIAL SITE OF THE STATE OF NEW JERSEYWater Bank Program Pathway
This Program Pathway outlines the public financing process and the services available for applicants to navigate the program. Applicants may or may not qualify for all services. For example, early technical assistance is only available to economically disadvantaged communities determined by the DEP while other forms of assistance are available to applicants for various projects. The step-by-step process is summarized below. See the SRF Applicant Guidance for detailed instructions.
Please note that Water Bank has updated certain guidance documents and forms. To avoid delays in application processing, applicants must ensure they are using the most up to date guidance and forms.
What is H2LOans?
H2LOans is a web-based loan system, similar to the SAGE system used by various New Jersey State agencies in their interactions with municipalities. In H2LOans, each project sponsoring organization has an Authorized Official who designates an Authorized Representative for each project. The Authorized Representative then identifies Collaborators for those projects. To get started, follow the steps below or visit the New Jersey Infrastructure Bank (“NJIB” or “I-Bank”) webpage (www.njib.gov) for more information.
- To create an H2LOans account, the project sponsor’s Authorized Official will call the NJIB at 609-219-8601.
- Once an account login and password have been created, the Authorized Official can access the sponsor’s H2LOans an account using the login box at www.h2loans.com.
- Upon login, the Authorized Official will be provided with additional information as to the designation of an Authorized Representative and Collaborators.
Assembling your Team
Putting together a strong and knowledgeable team is crucial for submitting a successful application. The successful team should consist of municipal employees, consultants, and non-profit partners.
Team members who are required in the H2LOans online portal for each project include:
- Authorized Official: Designates the Authorized Representative(s). This team member must be a full-time employee of the applicant’s organization who possesses the legal authority to act on behalf of the organization.
- Authorized Representative: Designates Collaborators and has the ability to submit the required forms and documentation. This team member must be a full-time employee of the applicant’s organization and will act as the internal project manager.
- Bond Counsel: Assists in compliance with Water Bank financial requirements, drafts documents such as financial addendum forms (FAF), provides opinions on the municipal bond and loan interest, and certifies that the project can proceed even if funding falls through.
Team members who are recommended but are optional in the H2LOans online portal include:
- Collaborators and Consultants: Collaborators complement the in-house management team and possess the knowledge and experience to develop a successful Water Bank application. These team members aid in managing the application process and can help smaller municipalities navigate it. Consultants may facilitate the design, construction, financial, or legal work associated with the project.
(Those not eligible for preliminary technical assistance can skip this step.)
Preliminary technical assistance services further the objective of protecting disadvantaged communities while advancing the goals of both the State of New Jersey and the U.S. Environmental Protection Agency (“EPA”). Applicants eligible for preliminary technical assistance are:
- Disadvantaged Communities
- Environmental Justice Communities
The New Jersey Department of Environmental Protection (“NJDEP”) will reach out to communities eligible for preliminary technical assistance, though applicants can check if they qualify by filling out the Technical Assistance Request Form. Services available to communities who qualify for early engagement assistance will receive assistance from consultants selected by DEP for various services:
- Public Outreach and Participation
- Application Assistance
- Reporting
- Permits and Approvals
- Prioritization and Selection of Projects
- Procurement of Design Engineers
- Planning Reports
- Misc. Services
After setting up an account in H2LOans, the next step for the Authorized Representative is to initiate a project application by clicking the “Create Project” button and submitting the project information form. If necessary, a program representative will walk you through the process of entering your project information into H2LOans system during the pre-planning phase of project development.
The Water Bank staff recommends that all applicants participate in a pre-planning meeting after completing a project information form in H2LOans and before beginning any preliminary engineering, in order to learn about the financing program and approvals required, including the new resilience requirements. A pre-planning meeting is open to all applicants and their advisors, as well as relevant state and federal agencies that may be providing permits or funding. Meeting requests should be made directly through H2LOans.
Applicants who qualified for preliminary technical assistance (step 2 above) may also qualify for design technical assistance. States have been given the flexibility to use the BIL set-aside for program implementation. Therefore, the NJDEP will be using these funds towards the I-Bank’s Technical Assistance Program. The focus will be to assist facilities that:
- Serve Disadvantaged Communities with Lead, PFAS, and SDWA compliance issues, CSOs, sewer infrastructure rehab and upgrades, and more.
- May lack sufficient resources to perform full assessment of needs (e.g., LSLIs, AMPs, CIPs)
- May lack financial, managerial, and/or community support for infrastructure projects and require assistance with stakeholder outreach & engagement.
- May not be aware of funding opportunities or lack familiarity and comfort with navigating Water Bank program application processes.
- May need eventual engineering services to assist with planning and design.
Visit the Technical Assistance page to learn more.
(Applicants may skip Step 5 if they plan to wait until the construction phase to close on a short-term loan.)
In general, a short-term loan is a loan that covers the construction period of a project, for up to three (3) State fiscal years, with low interest financing. Generally, short-term Loans are converted into long-term loans once the construction period is over. However, a short-term loan may be closed in advance of construction for planning and design activities that are based on a professional services agreement. Short-term loans closed during the planning phase of a project will be given up to two (2) calendar years to proceed to the construction phase in addition to the three (3) State fiscal years described above. Terms of the short-term loan program are subject to change based on the applicable years Financial Plan (May Report). To close on a Short-Term Loan, applicants must complete the following steps through the H2LOans application:
- Submit a short-term Financial Addendum Form (your Bond Counsel prepares);
- Engage your bond counsel. Have them communicate with the I-Bank’s bond counsel;
- For applicants interested in financing for planning activities prior to the construction phase: Submit Form LP-6A and an Engineering contract. On the form, you will provide the name, contract description, allowable cost and total cost for the project’s contractors.
- Division of Local Government Services (“DLGS”) Submission and Approval
- Creditworthiness Submission and Approval
Following a short-term loan during the planning and design phase, applicants will be allowed to submit periodic loan requisition requests through H2LOans for reimbursement of allowable costs incurred and proceed to utilize engineering consultants to prepare the environmental planning document and engineering design.
The applicant is responsible for submitting all documents via H2LOans in order to maintain the projected project schedule. They may be submitted any time throughout the calendar year. Planning and design activities may include:
- Permit approvals
- Public participation
- Completing the Project Planning Document
- Completing the Technical Documents
Guidance documents for completing planning and design activities. Applicants must ensure that they are using the most up to date version of any guidance and forms.
All projects funded through the Water Bank must undergo programmatic review in order to ensure the project meets all requirements of the Water Bank financing program. Review letters will be issued by the NJDEP, which may ask for additional steps to be taken, and an Environmental Decision Document (“EDD”) will ultimately be issued and communicated to all interested parties. When all steps have been satisfied, the project will be given Authorization to Advertise. The project review process includes:
- Environmental Review
- Engineering Review
- Review of Resilience Requirements
- Cultural Resources Survey
- Socially and Economically Disadvantaged (“SED”) Review
Learn more about each review. Any contract in excess of $12.5M will also require an Office of State Comptroller (OSC) Review in advance of procurement.
The project sponsor must obtain NJ Water Bank approvals for project planning and design activities, construction contracts, and professional services agreements; and will obtain all permits and approvals necessary for construction.
Required items:
- Project Information Form
- Financial Addendum Form
- Letter of Intent Form (Environmental Planning Document)
- Preliminary Engineering and Resilience Requirements
- Project Planning including NJDEP Issuance of the Environmental Decision Document
- Loan Application (Engineering Design and Specifications)
- Construction Contract Documents
- Professional Services Agreements for Construction Management
- Project Sponsor Receipt of all Necessary Permits and Approvals for Construction including Socially and Economically Disadvantaged Business Utilization Approvals
As outlined in Step 5 above, short-term loans are loans that cover the construction period up to 3 full state fiscal years with low interest rates. Generally, short-term loans are then converted into long-term loans once the construction period is over. To close on a short-term loan at the start of construction, the following steps must be completed:
- Receive Authorization to Advertise the construction contract prior to the advertisement of the related project.
- Submit a short-term Financial Addendum Form (your Bond Counsel prepares);
- Engage your bond counsel. Have them communicate with the I-Bank’s bond counsel;
- Upon bid opening, upload a complete bid package and Authorization to Award Request: This must be done in H2LOans.
- NJDEP Review and Authorization: The NJDEP will review the package and, if everything is in order, issue an Authorization to Award the construction contract.
- NJDEP Certification: After a thorough review of the project’s compliance with all program requirements, the NJDEP will certify that the project is eligible to close on a loan.
- Draft Loan Exhibits Preparation and Circulation: NJDEP will prepare the draft loan exhibits and circulate them to the project sponsor for review and comments.
- Finalization of Loan Exhibits: Once all comments and revisions have been incorporated, NJDEP will finalize the loan exhibits.
Other Required items:
- SED Participation During Planning and Design for Contracting Agencies Submission
- Short-Term Financial Addendum Form Submission
- Division of Local Government Services (“DLGS”) Submission and Approval
- Creditworthiness Submission and Approval
The Construction Oversight phase consists of the following roles and responsibilities:
- The NJDEP ensures compliance with program construction requirements during the preconstruction meeting prior to issuance of notice to proceed.
- The NJDEP monitors construction progress and compliance through quarterly on-site construction inspections.
- The Project Sponsor submits periodic loan requisition requests through H2LOans for reimbursement of allowable costs incurred during the construction period.
Generally, the short-term loan will be converted into a long-term loan at the end of construction. In order to convert to a long-term loan, the following must be met:
- Project Completion Notification: The project sponsor informs the DEP that the project is complete and is ready for a final inspection.
- Final Inspections: DEP performs a final inspection to ensure the project has been completed in line with the proposed plan. Additionally, a final project performance inspection is conducted to evaluate if the project meets the required standards and operational expectations.
- Final Loan Requisition: Once the project has passed all inspections, the project sponsor submits the final loan requisition, which provides the necessary documentation for cost reimbursements related to the project’s construction phase.
- Long-Term Financial Addendum Form Submission: The project sponsor submits a long-term financial addendum form, which serves as an updated statement of the sponsor’s financial health and capacity to service the long-term loan.
- Drafting of Long-Term Loan Exhibits: the NJDEP then prepares long-term loan exhibits, which detail the final allowable project costs.
- Upon satisfaction of the above, the I-Bank will add the project to its loan conversion schedule. I-Bank loan conversions typically occur twice a year.
- Terms and Conditions as well as the repayment schedule inclusive of fees and interest will be determined upon long-term closing.
* Early Engagement Assistance and Technical Assistance are contingent upon applicate needs and eligibility.
Questions, Comments?
Contact us.