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January 2017 Featured Article
Updates to the USDA’s Rural Utilities Service Loans
In August 2015 the featured article on this webpage discussed the benefits of the USDA’s Rural Utilities Service (RUS) and its role in helping communities become more resilient. The program achieves this objective by aiding in investments in critical services including water and waste treatment, electric power and telecommunications services. The USDA recently announced changes to the contractual process for acquiring the equipment necessary in these upgrades. In an effort to enhance the success of its applicants the procurement process for equipment was streamlined.
The RUS program was established to help create competitive advantages for rural municipalities to compete in the global economy, while also enhancing the overall quality of life for area residents. However, some of the administrative requirements for the program were preventing the communities that it was intended to serve from participating. In response, a new unified equipment contract has been created, enabling municipalities to worry less about working with different equipment contracts for its projects. These amendments also include both contracts for acquiring the necessary equipment, as well as any associated loan close-out documents. Consolidation of this paperwork can reduce construction standards paperwork as well.
There are currently three types of RUS programs available for which local governments and their non-profits can apply. According to the USDA, the RUS programs enable municipalities to strengthen their local economy in the following ways:
- Increasing access to broadband and current telecommunication services;
- Funding sustainable renewable energy development and conservation;
- Financing reliable and affordable electric systems;
- Working to integrate electric smart grid technologies; and,
- Developing reliable and affordable rural water and wastewater systems.
The Water and Environmental Program (WEB) was established for financing drinking water, sanitary sewer, solid waste and storm drainage facilities construction and upgrades. Cities, boroughs and townships are as equally eligible as rural municipalities as long as their population is 10,000 or less.
Electric Programs offer capital and leadership in the construction or improvement of electric distribution, transmission and generation facilities. In addition, this program can also fund demand-side management, energy efficiency and conservation programs, as well as on-and off-grid renewable energy systems. Cooperatives, corporations, states, territories, subdivisions, municipalities, utility districts and non-profit organizations are all eligible.
Telecommunication Programs provide capital for the deployment of rural telecommunication infrastructure. The intent of this service is to help local governments acquire access to affordable, reliable, advanced telecommunications services that are comparable with the rest of the nation. The intent of this program is to improve education, health care, safety and security as well as employment opportunities for all.
The RUS is becoming an easier source for municipalities to take advantage of in bridging funding gaps for critical investments. Strengthening local infrastructure is achievable at the local level when considering a more diverse array of funding sources and types.
Published January 2017.