USDA Is Helping Iowa's Rural Water Districts

USDA Is Helping Iowa's Rural Water Districts

USDA's Rural Development Agency and Xenia Rural Water District In Central Iowa Announce Restructuring.

USDA Rural Development and Iowa's Xenia Rural Water District in early April announced an agreement that will set the rural water utility on a path to financial viability, while continuing to provide clean water for its 9,400 customers. Xenia, a rural water utility serving  central and north- central Iowa, was built through a series of loans totaling $128 million from two primary lenders, the Department of Agriculture and private bondholders. Xenia's current debt to the department exceeds $45 million. 

PROVIDING RURAL WATER: USDA Rural Development Agency is providing funds to help central Iowa's financially-troubled Xenia Rural Water Association restructure its debt. USDA also recently announced loans and grants to assist West Central Iowa Rural Water Association manage decreases in well levels as a result of last year's drought to provide system improvements to help assure a future water supply for residents in that part of the state.

During the last three-and-a-half years, the Department of Agriculture has worked closely with Xenia in an effort to improve the water company's operations and ensure access to provide clean water for its rural customers. 

"USDA Rural Development's focus has been, and continues to be, the continuation of service for those who live and work in the rural communities that Xenia serves," said John Padalino, acting administrator of USDA's Rural Utilities Service, which provided a portion of the funding for the water system. Padalino noted that the agreement was a successful solution for all parties, who worked hard to keep the system operational while implementing a solution to address financial shortfalls and which ultimately will benefit the entire region.

Rural Development has moved forward with restructuring Xenia's debt

A recent repayment agreement between Xenia and the bond insurer representing bondholders cleared the way for USDA Rural Development to move forward with its restructuring of Xenia's debt. The actions by both the Department of Agriculture and the bond insurer include measures that reduce monthly debt service and help ensure continued service at the most affordable rate possible, while assuring financial stability. RUS will continue its close oversight of the District, its operations and its finances.~~~PAGE_BREAK_HERE~~~

The Department of Agriculture, through its Rural Development mission area, has a portfolio of programs designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.

"USDA has made a concerted effort to deliver results for the American people, even as USDA implements sequestration  -- the across-the-board budget reductions mandated under terms of the Budget Control Act," says U.S. Secretary of Agriculture Tom Vilsack. "USDA has already undertaken historic efforts since 2009 to save more than $700 million in taxpayer funds through targeted, common-sense budget reductions. These reductions have put USDA in a better position to carry out its mission, while implementing sequester budget reductions in a fair manner that causes as little disruption as possible."

Department of Agriculture funds are also helping West Central Iowa Rural Water Association

On April 19 an announcement was made by Bill Menner, USDA Rural Development state director in Iowa, that West Central Iowa Rural Water Association is receiving $3,712,000 in Department of Agriculture loans and grants to help make system improvements and offset costs and water shortages as a result of last summer's drought. There is one part of the Department of Agriculture's efforts to strengthen the rural economy, he said.

"We are pleased to be assisting West Central Iowa Rural Water Association as it continues to deal with ongoing effects from last summer's drought," Menner said. "These funds will help ensure an adequate supply of quality potable water is available to thousands of rural Iowans in the future."~~~PAGE_BREAK_HERE~~~

West Central Iowa Rural Water Association is receiving $500,000 through USDA Rural Development's Emergency Community Water Assistance Grant, or ECWAG program which provides assistance to rural community water systems that have experienced a dramatic decline in the quantity or quality of drinking water due to a specifically defined emergency such as drought, earthquake or flood.  

Funds will be used to make improvements, help ensure future water supply 

The ECWAG funds will be used to obtain additional water supply from the City of Denison and to drill a new well, or wells, in the Nishnabotna aquifer. Extreme drought

conditions this past year have caused dramatic decreases in well levels throughout the water association's service area which includes parts of Audubon, Carroll, Crawford, Guthrie and Shelby counties in western Iowa. Approximately 1,400 rural residents and businesses will benefit from the new water supply.

West Central Rural Water Association was just one of two entities nationwide receiving funds from the USDA's Emergency Community Water Assistance program this year.

The rural water association is also receiving a $3,212,000 USDA loan to make line upgrades, pump station alterations, and construct an elevated water storage tank benefiting approximately 3,000 rural residents and businesses.

About Rural Development: This past year USDA Rural Development's investment in Iowa helped create or retain more than 1,600 jobs, aided 2,400 families in buying their own homes and assisted more than 60 communities as they made improvements to their facilities, services and infrastructure. 

Rural Development has 11 offices across the state to serve the 1.7 million Iowans living in rural communities and areas.  Office locations include a state office in Des Moines, along with area offices in Albia, Atlantic, Humboldt, Indianola, Iowa Falls, Le Mars, Mount Pleasant, Storm Lake, Tipton and Waverly. For information on finance programs available call 515-284-4663 or visit USDA Rural Development online.

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