Financial Services

Rural Water Financing Agency

The Rural Water Financing Agency (the "Agency") is dedicated to providing construction funding for water and sewer systems that have already secured a permanent loan commitment from the United States Department of Agriculture - Rural Development (USDA-RD). This program enables communities to access short-term loan funds at favorable interest rates for the construction phase of water and wastewater infrastructure projects.

The financing program is structured to offer short-term loans during the construction period, with repayment occurring through USDA-RD bond funds once the project is completed. After the construction phase, USDA-RD provides permanent financing to support long-term project sustainability. The program operates as a tax-exempt, pooled financing initiative, offering flexible loan terms to meet the unique needs of participating communities.

The Kentucky Rural Water Association (KRWA) administers the program, with the recent transition of the issuing authority from the Kentucky Rural Water Finance Corporation to the Rural Water Financing Agency. The program’s effective borrowing rate is determined by a stated loan rate, minus an interest earnings credit on any undisbursed construction funds.

Additional KRWA Financial Services

Revenue Requirement Analysis
KRWA provides essential analytical services to help utilities determine whether their user rates are sufficient to meet the operational revenue requirements for water and sewer services. This ensures that the utility remains financially sustainable.

Cost of Service Studies
A comprehensive Cost of Service study evaluates the actual and proposed costs associated with providing water and wastewater services to customers. A systematic approach to identifying these costs is crucial for developing cost-based rates that are fair and equitable.

Rate Analysis and Design
Our experts assist utilities in designing customized rate structures that meet their revenue needs while ensuring that costs are distributed fairly among different customer groups. This service ensures rates align with both financial requirements and customer equity.

Tariff Review and Revision
KRWA staff can review and recommend updates to existing tariffs (rules and regulations) filed with the Public Service Commission. We can also prepare new tariffs as needed to reflect changes in utility operations or regulatory requirements.

Purchase Water Adjustments
For utilities experiencing rate increases from wholesale water suppliers, KRWA provides support in preparing purchase water adjustments to ensure that these changes are properly reflected in customer billing structures.

Customer Relations and Satisfaction
We offer guidance in developing customer education programs, improving customer relations, and designing satisfaction surveys to better understand and respond to the needs of utility customers.

Regulatory and Legal Assistance
KRWA monitors legislative and regulatory activities in Kentucky that impact water and wastewater utilities. Our Frankfort office plays an active role in advocating for statewide legal matters that affect the industry. Legal assistance is also available for specific issues, with fees applied based on the scope of the legal services required.

By offering these services, the Rural Water Financing Agency and the Kentucky Rural Water Association are committed to strengthening water and wastewater infrastructure across Kentucky, ensuring communities have the financial resources, technical expertise, and regulatory support necessary for sustainable utility operations.