The Massachusetts Clean Water Trust is governed by a Board of Trustees. The Treasurer of the Commonwealth serves as Chair, the Secretary of the Executive Office of Administration and Finance (EOAF) serves as Vice Chair, and the Commissioner of the Massachusetts Department of Environmental Protection (MassDEP) is the third Trustee. Each of these Trustees has the authority to send a designee in his/her place. An Executive Director manages the business of the Trust. The Executive Director chairs an Executive Committee including representatives from EOAF and MassDEP, which typically meets weekly and is responsible for reporting to the Board of Trustees. . Including the Trust Treasurer, the Executive Director manages a 8 person staff. The current Executive Director of the Trust is Ms. Susan Perez. In addition, staff of the Trust work very closely with staff of DEP, who approve, oversee and manage the projects that are ultimately financed by the Trust. Please refer to MassDEP's website for non-finance information. Top of Page
If you have financial questions related to your project, contact Ms. Susan Perez, Executive Director. She may be reached at (617) 367-9333 x 816 or via email: firstname.lastname@example.org during the hours of 9:00am to 5:00pm, Monday through Friday. Top of Page
Correspondence may be directed to: Massachusetts Clean Water Trust, 3 Center Plaza, Suite 430 Boston, MA 02108 Top of Page
After a project receives a PAC, DEP submits this document to the Trust. At a meeting of the Board of Trustees, the Trust votes to approve a loan commitment for the project, a copy of the commitment is executed by the Executive Director and transmitted to the borrower along with a loan questionnaire. Following the transmittal of the loan commitment document to the borrower, the completed questionnaire must be returned to the Trust. Additionally, a legal opinion from the borrower's counsel -"green light letter" must be submitted by counsel. The next step is for DEP to issue a Project Regulatory Agreement (PRA). DEP issues a PRA following the solicitation of bids and the award of a contract by the community for construction of the project. DEP submits the PRA to the Trust. At a meeting of the Board of Trustees, the Trust votes to approve a loan to the community for the project. The Trust then mails a loan agreement package to the borrower for execution. If the borrower desires interim funding from the Trust, this documentation (included in the loan agreement package) must be completed and submitted to the Trust along with an origination fee (nominal depending upon the principal amount needed). Following execution of the loan agreement documents and their return to the Trust, assuming everything is in order and there is no threatened or potential litigation that might affect the project's completion, the borrower is eligible for interim funding. Top of Page
This depends on the loan documents, the governmental structure of the borrower and local bylaws, ordinances and authorizing votes. The Treasurer is typically authorized to sign most loan documents. If you are uncertain as to which officials are authorized to sign a particular document, you should consult your local bond counsel. Top of Page
Attached to the loan agreement documents, the Trust includes what is called a draft "Schedule C". This provides an estimate of the total debt service on the principal amount of the loan being issued. When the project is permanently financed with proceeds of bonds issued by the Trust, the Trust provides the borrower with a final Schedule C based upon the actual amount financed and the debt service the Trust is required to pay on the bonds if issued to fund the loan. Top of Page
Following the incurrence of eligible costs associated with the construction of the project, the borrower submits a disbursement request to DEP. DEP reviews this request, approves it and then submits it to the Trust for payment. Once the Trust receives the approved disbursement request from DEP, the payment request is processed on a weekly basis. Top of Page
The Interim Loan Interest Rate as referred to in the Trust's Financing Agreements shall be a rate equally to fifty percent (50%) of the "MMDT Index" published in the MMDT Cash Portfolio using the most recently available rate (commencing January 1 and July 1) in which the Financing Agreement is executed. The "MMDT Index" for January 1, 2015 is 0.18%, fifty percent of which is 0.09%. Top of Page
Before a loan is permanently financed, if the borrower desires an interim loan, the borrower is responsible for payment of an origination fee, charged at the time of the issuance of an Interim Loan - this fee is 1/10 of one percent of the interim loan amount, subject to a minimum of $500 and a maximum of $1,000.
After a loan is permanently financed, aside from the local and allocated costs of issuance, the borrower is responsible for paying an annual administrative fee of 0.15% on the outstanding principal amount of the loan (this amount is paid in two installments at each semi-annual debt service payment date).
In addition, the borrower is responsible for all local costs of issuance; these include any fees incurred for the borrower's bond counsel and financial advisor, for example. The borrower is also responsible for a pro-rata amount of the Trust's cost of issuance at the time the Trust issues bonds to permanently finance the borrower's loan. The costs of issuance typically incurred by the Trust when it issues bonds include, for example, expenses related to legal and financial advisory services provided to the Trust, the underwriter's discount (i.e. fee for underwriting the Trust's bonds), the cost of printing the official statement, fees paid to rating agencies etc. Loan agreements permit the financing of costs of issuance of up to a maximum amount of 2.6% of the borrower's loan obligation. However, the actual costs of issuance charged to borrowers typically has not exceeded 0.75% of the borrower's loan obligation. Top of Page
The Trust issues bonds as needed. If your community has executed loan agreements with the Trust, your project will be permanently financed in the next upcoming bond issue of the Trust, assuming that the construction schedule for work on the project has not been significantly interrupted or delayed. The Trust requires that borrowers expect to complete construction on the project by the two year anniversary of the project's permanent financing. Top of Page
Debt service is due January 15th and July 15th. Several weeks prior to these payment dates, you will receive payment instructions from the Trust identifying the amount you must pay by a date certain at least 5 days in advance of either the upcoming January 15th or July 15th. These payment instructions typically include two letters: one giving you instruction as to the payment of the administrative fee due to the Trust, and the other giving you instruction relating to the debt service payment due and how/where it must be paid. Top of Page
For projects first appearing on DEP's Intended Use Plan in 2002 and forward, the borrower's net debt service is structured to result in the financial equivalent of a loan with an annual interest rate of 2%. Top of Page
The actual debt service on your community's loan depends upon the interest rate received by the Trust on the bonds it issues to permanently finance your community's loan. Since 2002, Trust loans have been set by the Massachusetts Legislature at 2%. The loan subsidy is equal to the difference between the market rate on the bonds and the 2% that borrowers pay. The borrower is legally obligated to repay the total debt service on the loan. Under state law, however, the Trust is required to apply subsidies against a portion of this debt service obligation. The amounts applied by the Trust to subsidize loans come from two sources: (1) the investment of debt service reserve funds pledged to secure the loan (and received originally by the Trust in the form of federal and state matching grants), and (2) contract assistance payments contributed by the Commonwealth via annual appropriation from the Commonwealth's General Fund. Top of Page
Staff of the Trust and DEP conduct presentations annually for new (and returning) borrowers seeking financing from the Trust for eligible projects. In addition, staff of the Trust conduct presentations for borrowers in preparation for closing its annual financing (these usually are scheduled at least a month or two in advance of the closing of the Trust's bond issue).Please call or email staff at the Trust for any questions you may have. Contact us Top of Page