Financial Services

Thursday, January 01, 2009
Iris Connection has made water system upgrading SIMPLE and EASY with Iris Financial Services.  With Iris Financial Services, funding your project can be as easy as a ONE Page application and project approval in as little as 24 hours.

The Iris Financial Services program offers customers flexible payment options and terms, and can include all hard and soft costs, and requires no real estate collateral or other credit enhancements. Iris Financial Services is available for complete system upgrades or minor renovations; and everything in between. Iris Financial Services customizes its financing packages to meet the varying needs of each Public Water System looking for a seamless and simple way to say yes to a new Watchman System and service upgrades specific to your needs.

Iris Connection has partnered with a leading lender in the financial industry to create Iris Financial Services. This lender has provided financial services for hundreds of projects, just like yours. Our credit officers have a great deal of experience working with various water systems, Home Owner Associations and Public Entities as well as individual ownership structures, and are only a phone call away to find the financing solution that meets your specific needs.

Program Features

Term - Terms are tailored to meet the cash flow and/or tax objectives of the specific water system. The term on control components is up to seven years.

Advance Payment - Advance payments are not required. A water system can pre-pay as much or as little of the transaction as they choose.

Sequence of Payments – You may delay the start of their payments to facilitate installation. Payments that match the historical cash flow of the water system are available.

Residuals – Water Systems have straight financing with no residual, or any fixed residual to meet cash flow objectives.

Rate – Rates are bank-direct and based on the size of the transaction, the strength of the credit and the structure of the transaction. Call Iris Financial Services for customized pricing for your project.

Getting Started is Easy

  1. Work with your Authorized Iris Dealer to determine the general dollar amount of your Watchman System project and the approximate timing of installation.
  2. Discuss Iris Financial Services with your Authorized Iris Dealer and learn about the flexible and convenient options available for your project.
  3. With your permission, Iris Financials lending partner will contact the appropriate people within your organization to obtain the required financial information. Iris and Iris Financial Services are also available to discuss these financing options directly with the appropriate owners or board members.

With Public Water Systems feeling more and more pressure from regulators to deliver higher quality water and in a more sustainable, systematic approach, Iris is committed to making the best solution available to EVERY water system. Everything we do revolves around making water systems perform more efficiently, sustainably, safer and reliably. When you partner with Iris Connection and Iris Financial Services, it is understood that we know Public Water Systems, their challenges and we understand how to help.

To find out more about Iris Financial Services, please contact your Authorized Iris Dealer, or fill out our online Information Request Form, or call us at (866) 680-IRIS (4747).

Examples of some Possible Comparison Financing Options

The Following are three examples of what customers of Iris Connection could expect if they use Iris Financial Services and are credit qualified for similar projects costs.

Example 1
A homeowner association required a control upgrade for a project total of $54,853.  There were 285 homeowners who elected to finance this project and selected a 72 month term.  The payments were $3.66 per homeowner per month.  They elected this rather than depleting their capital reserves or assessing the homeowners.

Example 2
A large association of 1960 members needed a new pump and control/software upgrade.  The total cost was $180,332.  The association selected a 72 month term and they were able to secure financing for $1.66 per homeowner per month.  This was a monthly increase of less than 1%.

Example 3
A mutual cooperative in the Northwest needed to upgrade their water control system.  The cost was $101, 050. The Board preferred to finance this improvement rather than assess the 160 members.  The cost per month for 72 months was $11.50 per month per household.  The assessment would have been $632 per homeowner.

It’s all about Options
 
For Iris Connection, this is about providing our customers with options – options that will help them get their projects completed quickly and efficiently.

Our financing solution is fixed-rate and fixed term equipment financing that can include both hard and soft costs.  When a water system finances its project, the installation and any new system upgrade costs can be included in the package.  In short, we will be able to finance the “whole deal” through Iris Financial Services.  This is a tremendous benefit to those customers juggling a fixed sum of money while still trying to accomplish all of the water system goals.

Iris Financial Solutions can be “customized” by creating terms that meet individual system needs.  If seasonality is an issue, the payment schedule can be altered to reflect the months of the systems highest use.  If a member-owned water system wants to assess some members while offering a monthly payment plan to others, this too can be accommodated.    Every Public Water System is different and has varying financial and homeowner circumstances.  We will try to tailor the terms to meet these varying circumstances.

Our ultimate goal is to simplify the purchase process for our customers.   Iris Connection has always strived to be the customer’s best choice and we are going to continue to search for ways in which we feel we can do this.  Offering our customers products that meet their water system needs as well as a flexible and convenient way in which to purchase these products is simply our  mission.

For most Public Water Systems, four options are available to pay for your system upgrades and controls.  Each option has benefits, but each option also raises some additional questions.  The options are:  1) pay cash, 2) assess the members, 3) borrow at a local bank with a mortgage backed financing, or 4) utilize a manufacturer-supplied program of specialty financing.

Cash
Saving enough cash to pay for system upgrades is an elusive goal for most water systems.  Many water systems are not-for-profit corporations which make it additionally difficult to reserve enough capital for basic maintenance or upgrades and not create a tax liability.  Most Public Water Systems typically have more capital improvement projects on their planning schedules than they have available capital.  Even if a water system has enough money set aside to pay for a renovation or upgrade, the Water System Board or Manager should ask, “Is this the best use of capital?”
 
Certainly there is an opportunity cost of capital.  If you have plans to expand your delivery system you will have calculated what your potential return on that investment should be.  If this ROI is greater than the interest expense of financing your current upgrades, you should finance.  A water delivery system has a long-term useful life and a shorter, but still significant-term, technical life.  With depreciating assets, it is usually more fiscally prudent to pay for the asset as you use the asset rather than as a cash purchase. 

Assess the home owners
A public water system has the option of assessing home owners to pay for a renovation.  The willingness to do this depends on many factors such as recent assessments and the ability for homeowners to pay the assessment. There are many factors that play into whether a homeowner assessment is workable for your particular water system upgrade purchase.

Borrow from the local Bank
Most public water systems will have one board member affiliated with a local bank. The advantages of local bank financing are convenience and lower borrowing rates if the development pledges the real estate as collateral. The rate differential narrows when additional costs in mortgage- backed borrowing are considered.   In reality, a public water system should ask, “If we have to pledge the real estate to do this deal, will the homeowners agree?”     

Specialty financing programs
Recently, Iris Financial began providing financial solutions for our customers.  We have realized that public water systems must be provided with viable financial alternatives to paying cash, assessing members or mortgaging property.  The ideal specialty financing program provides fixed-rate, fixed-term, uncollateralized borrowing for all the hard and soft costs of the water system project.  If a public water system is to qualify for such ideal financing, they should have strong cash flow and credit history. The best programs have flexible terms with payments that are customized to the cash flow of the water system. Specialty financing programs can also provide progress payments to vendors as products and services are provided. 

As your Public Water System begins to consider upgrading, make sure to review all of these financial options.  If you understand the benefits and risks of each of these major choices you can make a faster and more informed decision. Weighing these options can make your financial decisions in the beginning stages of planning a system renovation pay off in the long run.