(a) General.

1. (1)

   1. (A) The 1987 amendments to the Act created and provided federal funding for state water pollution control revolving loan programs.
   2. (B) These programs are intended to be perpetual funds providing low interest loan assistance for the construction of wastewater facilities.
   3. (C) Through capitalization grants from the United States Environmental Protection Agency and twenty percent (20%) state matching funds, the CWRLF has been established.

2. (2)

   1. (A) Project costs eligible for funding under the CWRLF are determined based on applicable laws and rules and are made on a project-by-project basis.
   2. (B) The Arkansas Natural Resources Commission staff shall make these determinations based on the requirements of 15 CAR § 26-1001 et seq.

(b) Lending rate.

1. (1) It is the policy of the CWRLF program to provide loans with a subsidized interest rate to public entities in the State of Arkansas.
2. (2) The intent is to provide loans with a lending rate one percent (1%) to two percent (2%) less than the current open market municipal bond rate for the same loan repayment period as contemplated on the borrower’s loan.

(d) Order of funding.

1. (1) Projects will be funded according to:

   1. (A) The priority list;
   2. (B) The time frames established in the applicable intended use plan; and
   3. (C) Conditions outlined in this part.

2. (2) Commitments by the commission staff to a project will follow this pattern:

   1. (A)

(i) The interest rate, finance fee, administration fee, and the submittal date penalty will be set by the Director of the Arkansas Natural Resources Commission and fixed when the memorandum of agreement is executed by both parties.

1. (ii) These items will be those fees and rates in effect then; and

   1. (B) When the bond purchase agreement is executed by all parties, the funds needed for that project will be committed by the commission staff.

(e) Application of other federal authorities.

1. (1) There are many other federal laws and federal authorities that have applied to traditional construction grants projects but that are not included among the authorities listed in Section 602(b)(6) of the Act.
2. (2) These other federal laws and authorities apply to activities supported with funds "directly made available by" capitalization grants and the state use of such funds in the administration of the program.
3. (3) Appendix A of this part contains a list of such federal laws and authorities.

(f) Force account.

1. (1) It is the policy of the CWRLF program that the majority of projects are constructed through competitive bidding.

2. (2)

   1. (A) The CWRLF program will allow force account work on a limited basis.
   2. (B) This is done to make financially sound, marketable loans to large communities.
3. (3) Normally, these communities must already use the force account method for the type of work proposed.
4. (4) These communities would likely not use the CWRLF if competitive bidding were required and would use force account whatever the funding source.

5. (5) General rules for force account construction:

   1. (A)

      1. (i) The borrower must prove that it has successfully done past projects of a similar nature and difficulty of the type proposed for force account work.
      2. (ii) Supervisory and other key personnel must be experienced in the type of work proposed and be full-time employees of the borrower;
   2. (B) The borrower must routinely use the major equipment necessary to do the proposed force account work;
   3. (C) The force account work must be finished in the time a contractor obtained through competitive bidding would need;

   4. (D)

      1. (i) A work crew must be dedicated to performing the force account work on a minimum forty (40) hours per week basis.
      2. (ii) The borrower must prove that sufficient staff and equipment are available to do all ongoing utility operations without interrupting force account work; and
   5. (E) The borrower must prove that it has sufficient accounting and record keeping expertise and staff to keep daily detailed records of the time and material expended on force account work.