A picture of a board room setup for a meeting

Water/Sewer District INTERCAP Loans

The Montana Legislature authorizes a County Water and/or Sewer District to borrow in accordance with and for purposes listed in 7-13-2218 & 7-13-2221 Montana Code Annotated (MCA).

  • PRELIMINARY ENGINEERING
     
Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
Promissory Note 7-13-2218 & 7-13-2221 3 years interest only w/ option No Revenue Pledge
         

• A registered professional engineer licensed to practice in his or her area(s) of competence and expertise in the State of Montana must prepare the preliminary engineering studies funded through INTERCAP. 
• The loan may have principal deferred for up to three years; however, interest payments will be due semiannually.
• If not taken out by another means after three years, staff may amortize as an ordinary INTERCAP loan for an additional three years.
• Preliminary engineering studies funded through INTERCAP must generally conform to the requirements outlined in the Uniform Preliminary Engineering Report for Montana Public Facility Projects.
• If another state or federal agency provides additional grant or loan funds for a preliminary engineering study financed through INTERCAP, written approval from that agency’s engineer would be required stating the scope of work generally conforms to the requirements outlined in the Uniform Preliminary Engineering Report for Montana Public Facility Projects.
• In the event INTERCAP is the sole source of financing a preliminary engineering study, BOI staff will work with other funding agencies that agreed to assist in reviewing the scope of work to determine if it conforms to the requirements outlined in the Uniform Preliminary Engineering Report for Montana Public Facility Projects.
• For more water & sewer financing options visit the Water, Wastewater & Solid Waste Action Coordinating Team (WASACT) website.


  • CONSTRUCTION, EQUIPMENT & IMPROVEMENTS
Repayment Option Borrowing Statutes Loan Term Vote Req'd? Collateral
General Obligation Bond 7-13-2331 Up to 15 years Yes Full faith, credit & taxing power pledge
Revenue Bond 7-13-2218, 7-13-2221 & 7-13-23 Up to 15 years Case-by-case basis Revenue Pledge

• General Obligation Bonds – Bond Counsel required.
• Revenue Bonds:

  • Rates and charges must be set to generate net revenues to cover debt service by a factor of 1.25. The Board will require a reserve account (one year debt service or 10% of the loan, whichever is less). 
  • Bond Counsel will be required to ensure parity bonds if Borrower has existing outstanding debt with the same revenue pledge.

• Vote requirement considered on a case by case basis.  7-13-2333 Montana Code Annotated (MCA) allows indebtedness without election.  Board staff may require voted deficiency tax per 7-13-2302 MCA requirement depending upon loan review findings.
• Eligible governments must adhere to State law when financing capital projects and cannot finance projects for a longer term than allowed.  Board staff will consider the maximum loan term authorized in statute, as well as the repayment ability of the eligible borrower, when reviewing loan requests.  In addition, loan terms cannot exceed the useful life of the project being financed.
• For more water & sewer financing options visit the Water, Wastewater & Solid Waste Action Coordinating Team (WASACT) website.


  • INTERIM FINANCING & CASH FLOW LOANS
Repayment Option Borrowing Statutes Loan Term Bond Counsel Req'd? Collateral
Bond Anticipation 7-7-109 Up to 3 years Yes Written commitment*
Grant Anticipation 7-7-109 Up to 3 years No Written commitment*

*7-7-109(2)(b) Before the notes are issued, the political subdivision must receive a written commitment for the purchase of the bonds or for the grant or loan in an amount that in the aggregate is not less than the principal amount of the notes and shall by resolution agree to fulfill any conditions of the commitment.


MONTANA BOARD OF INVESTMENTS | MONTANA DEPARTMENT OF COMMERCE
2401 COLONIAL DR, 3RD FLOOR | PO BOX 200126 | HELENA, MT 59620-0126 | P: 406-444-0001 | F: 406-449-6579 | TDD: 406-841-2702