Mo. Code Regs. Ann. tit. 10, § 60-13.020
PURPOSE: This rule sets forth eligibility and application requirements for applicants for loans from the Drinking Water Revolving Fund established in section 640.107, RSMo as a subfund of the Water and Wastewater Loan Fund, and describes the evaluation and priority point award process. The rule establishes requirements for loan recipients, including binding commitments, pre-closing, loan closing, accounting, record keeping, procurement and contract requirements. Eligible and noneligible costs are specified. Criteria for project by-pass, project removal and modification of funding are established. The leveraged loan structure for the Drinking Water Revolving Fund established in section 640.107, RSMo as a subfund of the Water and Wastewater Loan Fund is described.
(1) Application and Eligibility Requirements. This section applies to applicants for loan assistance from the Drinking Water Revolving Fund established in section 640.107, RSMo, as a subfund of the Water and Wastewater Loan Fund. Recipients of assistance under the American Recovery and Reinvestment Act (ARRA) of 2009 are subject to the requirements of this regulation, unless otherwise specified.
(A) Definitions.
60-2.015 apply to the rules in this chapter.
Drinking Water State Revolving Fund (DWSRF) program are defined in this subsection.
Reinvestment Act of 2009 (P.L. 111-5).
obligation by the state to a local recipient that defines the terms and the timing for assistance under the Drinking Water Revolving Fund.
list of all eligible projects for which applications have been received and evaluated.
(DWRF)—The Drinking Water Revolving Fund for loans established as a subfund of the Water and Wastewater Loan Fund by section 640.107, RSMo. The DWRF shall be maintained and accounted for separately, and moneys in the DWRF shall be used only for purposes authorized in the federal Safe Drinking Water Act (SDWA).
Fund (DWSRF)—The entire program established under section 1452 of the federal Safe Drinking Water Act (SDWA), which includes DWRF loans and other activities allowed under that section of the SDWA.
must total the amount equal to the federal capitalization grants and must comply with environmental review requirements and federal cross-cutting authorities.
to receive funding during the fiscal year covered by the intended use plan (IUP).
when the first construction contract is completed and the constructed component is 10 CSR 60-13
capable of being used for its intended purpose.
prepared each year that identifies the intended uses of the funds in the DWSRF and describes how those uses support the goals of the DWSRF.
(B) Eligible Public Water Systems.
for-profit noncommunity water systems located in Missouri that are not federally owned are eligible to apply for DWRF loans. Eligibility to apply does not guarantee assistance or eligibility for assistance.
tems are not eligible to apply for DWRF loans.
(C) Eligible Projects.
expenditures (not including monitoring, operation, and maintenance expenditures) of a type or category which will facilitate compliance with national primary drinking water regulations applicable to the system or otherwise significantly further the health protection objectives of the federal Safe Drinking Water Act (SDWA).
health standards identified in the intended use plan or in the DWRF loan priority point criteria that have been exceeded and projects to prevent future violations of the rules are eligible for funding. These include projects to maintain compliance with existing regulations for contaminants with acute health effects (such as the Surface Water Treatment Rule, the Total Coliform Rule, and nitrate standard) and regulations for contaminants with chronic health effects (such as Lead and Copper Rule, Phases I, II, and V Rules, and safety standards for total trihalomethanes, arsenic, barium, cadmium, chromium, fluoride, mercury, selenium, combined radium-226, -228, and gross alpha particle activity).
SDWA health standards (identified in the annual intended use plan) that have been exceeded or to prevent future violations of the anticipated rules are eligible for funding.
ture are eligible if they are needed to maintain compliance or further the public health protection objectives of the federal SDWA. Examples of these include projects to:
(excluding reservoirs, dams, dam rehabilitation and water rights) to replace contaminated sources;
ties if, in the department’s opinion, the project would improve the quality of drinking water to comply with primary or secondary standards;
ties, including finished water reservoirs, to prevent microbiological contaminants from entering the water system; and
distribution pipes to prevent contamination caused by leaks or breaks in the pipe, or improve water pressure to safe levels.
(for example, when individual homes or other public water supplies have a water supply that is contaminated, or the system is unable to maintain compliance for financial or managerial reasons) are eligible for DWRF loan assistance.
system’s capacity is eligible for a loan if it is the most cost-effective solution.
(D) Application Procedures.
1. Application deadline.
or received by the Water Protection Program by the calendar date established in the annual application package as the application deadline. The deadline will be no sooner than sixty (60) days after the application package is made available. The department may extend this deadline if insufficient applications are received to use all of the funds expected to be available.
will be accepted upon announcement by the department and must meet program guidance and federal law or regulations as appropriate and applicable.
ing state revolving fund (SRF) loan balance must be in compliance with the terms and conditions of their loan agreements to be eligible for additional funding.
2. Applicants shall provide:
vided by the department;
chief operator certified at the appropriate level, or expect to have prior to loan award;
emergency operating plan, or expect to have prior to loan award;
requested by the department for priority point award or project evaluation;
by the department to determine the applicant’s compliance history and technical, managerial, and financial capacity as required under the federal SDWA; and
determination of financial capability of the applicant. This may include but is not limited to: changes in economic growth, changes in population growth, depreciation, existing debt, revenues, project costs, and effects of the project on user charge rates.
funds during a given fiscal year who have completed the requirements in this section (1) shall be considered for funding the next fiscal year and need not reapply.
applicant certifies and warrants that he/she has not, nor will through the DWRF loan amortization period, violate any of his/her bond covenants.
(E) Evaluation and Priority Point Award.
points in accordance with the DWRF loan priority point criteria and, in addition, applications seeking ARRA funding shall also be rated in accordance with the ARRA and corresponding guidance. The department shall annually seek public review and comment on the DWRF loan priority point criteria. The commission shall approve the DWRF loan priority point criteria at least sixty (60) days prior to the annual application deadline.
use plan in priority order according to the number of priority points assigned to the project. Projects accumulating the same number of total priority points will be ranked using the tie-breaking criteria in the DWRF loan priority point criteria. In addition, applications seeking ARRA funding shall also be rated in accordance with the ARRA and corresponding guidance.
seek public comment on an annual intended use plan that meets or exceeds federal requirements, including the list of proposed projects. The commission may hold one (1) or more public meetings or public hearings on the intended use plan for loans. Any applicant aggrieved by his/her standing may appeal to the commission during the public comment process.
provided to a public water system that does not have the technical, managerial, and financial (TMF) capacity to ensure compliance with the federal SDWA, unless the owner or operator of the system agrees to undertake feasible and appropriate changes to ensure that the system has TMF capacity.
provided to a public water system that is in significant noncompliance with any requirement of a national primary drinking water regulation or variance unless use of the assistance will ensure compliance.
competition for projects seeking funding whenever appropriate and allowed by federal law.
(2) Requirements for Loan Recipients. This section applies to recipients of loans from the Drinking Water Revolving Fund established in section 640.107, RSMo, as a subfund of the Water and Wastewater Loan Fund. The recipient must satisfy more stringent requirements if required to do so by federal, state, or local statutes, policies, rules, ordinances, guidance, or orders.
(4) apply in addition to the requirements in sections (1)–(3) of this rule.
(B) Fees.
644.106, RSMo, the department may charge an administrative fee on assistance made pursuant to Chapter 644, RSMo, which includes the Water and Wastewater Loan Fund. The Drinking Water Revolving Fund is a subfund of that fund. The department and Clean Water Commission set the administrative fee under their authority in section 644.106, RSMo and the fee does not exceed one percent (1%) of the outstanding loan balance of each DWRF loan.
Additional administrative fees may be assessed by the department, under the authority of section 644.106, RSMo, at the time the administration fee is calculated for failure by a recipient to submit approved documents to the department (for example, operation and maintenance manuals, plan of operation, enacted user charge and water use ordinances, executed contract documents) in accordance with the time frames provided under the program agreement entered into by the recipient. The additional fee will be an additional one-tenth percent (.1%) per month that the document remains delinquent. The additional fee will be collected only during the year in which the document is not submitted.
(E) Public Participation. The public must be allowed an opportunity to exchange ideas with the applicant during project development. Public participation must be preceded by timely distribution of information and must occur sufficiently in advance of decision making to allow the recipient to assimilate public views into action. At a minimum, the recipient must provide the opportunities for public participation listed in this subsection, except that Public Service Commission (PSC)-regulated utilities must proceed through appropriate procedures established by the PSC.
to discuss the alternative engineering solutions. Public notice of the meeting should be published at least thirty (30) days prior to the meeting date in one (1) or more local newspapers, as needed to cover the project service area. The recipient shall prepare a transcript, recording, or other complete record of the proceeding along with proof of publication and submit it to the department and make it available at no more than cost to anyone who requests it. A copy of the record should be available for public review.
charge ordinance, a public meeting shall be conducted to address the proposed user charge rates. Public notice of the meeting should be published at least thirty (30) days prior to the meeting date in one (1) or more local newspapers, as needed to cover the project service area. The recipient shall prepare a transcript, recording, or other complete record of the proceeding along with proof of publication and submit it to the department and make it available at no more than cost to anyone who requests it. A copy of the record should be available for public review.
environmental review are in 10 CSR 60- 13.030.
(F) Binding Commitment. In order for the department to offer to enter into a binding commitment, all documents and information required in this subsection (2)(F) must be submitted to the department at least sixty (60) days prior to the applicant’s binding commitment deadline established by the department.
must submit an engineering report that meets or exceeds the requirements in this subsection and applicable public participation requirements in subsection (2)(E) of this rule.
community water systems must be in accordance with accepted engineering practices. References such as the current “Design Guide for Community Water Systems” and “Ten State Standards” should be considered for design standards.
non-community water systems must be in accordance with accepted engineering practices and the current “Standards for Non- Community Public Water Supplies.”
environmentally sound alternatives for providing safe drinking water must be studied and evaluated.
charge including documentation of the basis of the estimate must be included.
tal conditions and impact of the proposed project on the environment is required.
proposed project budget shall be submitted.
schedule shall be submitted, including, at a minimum:
of issuance of notice to proceed;
environmental review requirements in 10 CSR 60-13.030 must be completed before the department enters into a binding commitment with the applicant.
(G) Additional Preclosing Requirements. After the department has entered into a binding commitment with the applicant, the following requirements must be met before loan closing can occur. All documents and information necessary to provide assistance must be submitted to the department in sufficient time to allow adequate time for review and must be approved sixty (60) days prior to the loan closing date established by the department. The department may extend deadlines if justified.
lowing documents must be submitted to and approved by the department:
rized representative by name. Applicants for assistance under the DWRF shall provide a resolution by the governing body designating a representative authorized to file the appli- 10 CSR 60-13
cation for assistance, reimbursement requests and act in behalf of the applicant in all matters related to the project;
posed project schedule;
described in subsection (2)(L) of this rule;
by a registered professional engineer licensed in Missouri;
property acquisition. Recipients of assistance under the DWRF loan program shall have obtained title or option to the property or easements for the project prior to loan closing;
ordinances as described in paragraph (2)(G)3. of this rule; and
tion deemed necessary by the applicant or the department to ensure the proper expenditure of DWRF funds.
tems. Prior to closing, if the project serves two (2) or more public water systems, the applicant shall submit executed agreements or contracts between the public water systems for the financing, construction, and operation of the proposed facilities. At a minimum, the agreement or contract shall include:
responsibilities of each party upon which the costs are allocated;
allocated; and
allocated.
3. User charge (water rate) ordinance.
A. For non-PSC-regulated utilities:
maintain, for the useful life of the project, user charge ordinances approved by the department. User charge ordinances, at a minimum, shall be adopted prior to financing and implemented by the initiation of operation of the financed project. A copy of the enacted ordinances shall be submitted prior to initiation of operation;
designed to produce adequate revenues required for the operation and maintenance, including a reserve for equipment replacement. A one hundred ten percent (110%) debt service reserve may be required. Each user charge system shall:
management system that will accurately account for revenues generated by the system, debt service and loan fee costs, and expenditures for operation and maintenance, including replacement based on an adequate budget identifying the basis for determining the annual operation and maintenance costs and the costs of personnel, material, energy, and administration; and
of charges; and
to the department, for review and approval, the methodology used for determining user rates.
ply with the requirements of the PSC in developing and implementing their user charge ordinances but shall ensure that sufficient rates and charges are in effect to satisfy bond covenants throughout the term of the loan.
dependent on user fees for debt payment or operation and maintenance expenses shall have in place an enforceable water use ordinance prior to loan closure. The water use ordinance shall address water system responsibilities and customer responsibility relating to installation and maintenance of water meters and water lines; easements; alternative sources of water; and provisions for breach of contract and liquidated damages. The water use ordinance is intended to be an effective business tool for the efficient management of the water system.
owned public water systems. Privately-owned public water systems must provide documentation from the Missouri Department of Economic Development showing an allocation under Missouri’s private activity bond cap and must obtain any necessary approvals from the Public Service Commission.
(H) Operation and Maintenance.
1. Plan of operation.
recipient of assistance for construction of public water systems must make provision satisfactory to the department for the development of a plan of operation designed to assure operational efficiency be achieved as quickly as possible. A plan of operation must be submitted by fifty percent (50%) construction completion and approved by ninety percent (90%) construction completion.
schedule of tasks as outlined in the approved plan of operation is implemented and completed in accordance with the schedules and prior to final inspection of the project. Plan of operations must be approved by the official project start-up date.
The recipient must make provision satisfactory to the department for assuring effective operation and maintenance of the constructed project throughout its design life. If required by the department, recipients of assistance for construction of mechanical facilities must make provision satisfactory to the department to develop for approval an operation and maintenance manual. The operation and maintenance manual, if required, must be submitted by eighty percent (80%) construction completion.
(50%) construction completion, a start-up training proposal (if required) and proposed follow-up services contract must be submitted. This contract must be approved by ninety percent (90%) construction completion.
make provision satisfactory to the department for assuring that certified operator(s) and maintenance personnel are hired in accordance with an approved schedule.
after initiation of operation of the constructed public water system, the recipient shall certify to the department whether or not the public water system meets the project performance standards. Any statement of noncompliance must be accompanied by a corrective action report containing an analysis of the cause of the project’s inability to meet performance standards, actions necessary to bring it into compliance, and reasonably scheduled date for positive certification of the project. Timely corrective action shall be executed by the recipient.
(I) Accounting and Audits. Applicants are required to have a dedicated source for repayment of any loans and an adequate financial management system and audit procedure for the project which provides efficient and effective accountability and control of all property, funds, and assets related to the project. The applicant’s financial system is subject to state or federal audits to assure fiscal integrity of public funds.
adequate accounting system for the project which provides efficient and effective accountability and control of all property, funds, and assets.
maintaining a financial management system which will adequately provide for an accurate, current, and complete disclosure of the financial results of each loan project. The proprietary fund (business-related fund) accounting will be in accordance with generally accepted government accounting principles and practices, regardless of the source of funds.
includes books and records showing all financial transactions related to the construction project. The system must document all receipt and disbursement transactions. It also must group them by type of account (for example, asset, revenue, expense, etc.) and by individual expense account (for example, personnel salaries and wages, subcontract costs, etc.) The recipient shall maintain books, records, documents, and other evidence and accounting procedures and practices, sufficient to reflect properly the amount, receipt, and disposition by the recipient for all assistance received for the project and the total costs of the project of whatever nature incurred for the performance of the project for which the assistance was awarded. Some of the minimum standards for an adequate accounting system are:
be on a double entry basis with a general ledger in which all transactions are recorded in detail or in summary from subordinate accounts;
taining to the construction project should be all inclusive, timely, verifiable, and supported by documentation;
receipt and use of all funds received in support of the project;
funds must be placed with either a project manager or trust agent;
and control must be segregated from project operations. The accounting system and related procedures should be documented for consistent application;
the modified accrual or accrual basis of accounting as it provides an effective measure of costs and expenditures;
equipment should be maintained in subordinate records controlled by the general ledger and should be verified by physical inventory at least biennially; (VIII) The accounting system must identify all project costs and differentiate between eligible and ineligible costs;
way to identify each organizational unit, function, or task providing services to the construction project;
ment objective of the system is the derivation of information regarding actual versus budgeted costs by project task and performing organization; and
prepared monthly to provide project managers with a timely, accurate status of the construction project and costs incurred.
2. Annual audits.
of the system for the preceeding fiscal year to be made by a certified public accountant or firm of certified public accountants employed for that purpose.
reasonable detail the operation of the proprietary system during the fiscal year.
(180) days after the end of the recipient’s fiscal year, a copy of the annual audit will be submitted to the department.
required as long as the recipient is in loan repayment status.
recipient must comply with the provisions of OMB Circular A-133 governing the audit of state and local governments.
the recipient receives five hundred thousand dollars ($500,000) or more in the aggregate during any fiscal year from disbursements from federal sources, including the SRF program, the recipient will complete an audit of its system records for the fiscal year.
al audit, including all written comments and recommendations of the accountant, will be furnished to the department within the time period as provided in OMB Circular A-133.
(J) Record Retention Requirements.
minimum, the recipient must retain all financial, technical, and administrative records related to the planning, design, and construction of the project for a minimum period of seven (7) years following receipt of the final construction payment from DWRF loan program associated assistance or the recipient’s acceptance of construction, whichever is later. Records shall be available to state, federal officials, or both, for audit purposes during normal business hours during that period.
At a minimum, the recipient must retain all financial and administrative records related to post-construction project financing for a minimum period of seven (7) years following full repayment of any assistance on the DWRF loan program project.
(K) Minimum Requirements for Architectural or Engineering Contracts.
ments. The subagreement must:
ed to the accomplishment of the project;
fee contract in the form of a bilaterally executed written agreement;
gift;
mance;
exceeded except by amendment; and
to be performed during construction should include, but not be limited to, the following:
required by the department that meets the requirements of paragraph (2)(H)1. of this rule;
nance manual if required by the department that meets the requirements of paragraph (2)(H)2. of this rule;
bids;
ing and analyzing construction bids and making recommendations for award;
ensure conformance with the construction contract documents unless waived by the department; and
purposes of certifying that the facility is operating properly one (1) year after start-up.
mittal. The final approved executed engineering contract must be submitted prior to the first reimbursement request.
(M) Specifications. The construction specifications must contain the following:
specifications a clear and accurate description of the technical requirements for the material, product, or service to be procured. The description, in competitive procurement, shall not contain features which unduly restrict competition unless the features are necessary to test or demonstrate a specific thing or to provide for interchangeability of parts and equipment. The description shall include a statement of the qualitative nature of the material, product, or service to be procured and, when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use; 10 CSR 60-13
detailed product specifications if at all possible;
ent, it is impractical or uneconomical to make a clear and accurate description of the technical requirements, recipients may use a brand name as a means to define the performance or other salient requirements of an item to be procured. The recipient need not establish the existence of any source other than the named brand. Recipients must state clearly in the specification the salient requirements of the named brand which must be met by offerers and that other brands may be accepted;
tion shall not require the use of structures, materials, equipment, or processes which are known to be available only from a sole source, unless the department determines that the recipient’s engineer has adequately justified in writing to the department that the proposed use meets the particular project’s minimum needs;
general use of experience clauses requiring equipment manufacturers to have a record of satisfactory operation for a specified period of time or of bonds or deposits to guarantee replacement in the event of failure is restricted to special cases where the recipient’s engineer adequately justifies any such requirement in writing. Where this justification has been made, submission of a bond or deposit shall be permitted instead of a specified experience period. The period of time for which the bond or deposit is required shall not exceed the experience period specified;
In accordance with sections 34.350–34.359, RSMo, the bid documents shall require all manufactured goods or commodities used or supplied in the performance of any contract or subcontract awarded on a loan project to be manufactured, assembled, or produced in the United States, unless obtaining American-made products would increase the cost of the contract by more than ten percent (10%);
exceeding one hundred thousand dollars ($100,000), the bid documents shall require each bidder to furnish a bid guarantee equivalent to five percent (5%) of the bid price. In addition, the bid documents must require the successful bidder to furnish performance and payment bonds, each of which shall be in an amount not less than one hundred percent (100%) of the contract price;
documents shall contain the current prevailing wage determination issued by the Missouri Department of Labor and Industrial Relations, Division of Labor Standards, if otherwise required by law;
surplus area businesses.
steps and the bid documents shall require the bidders to take affirmative steps to assure that small, minority, and women’s businesses are used when possible as sources of supplies, construction, and services.
ments, then the contractor is required to take the affirmative steps in this paragraph (2)(M)9.
following:
minority, and women’s businesses on solicitation lists;
and women’s businesses are solicited whenever they are potential sources;
when economically feasible, into small tasks or quantities to permit maximum participation of small, minority, and women’s businesses;
ules, where the requirements of the work permit, which will encourage participation by small, minority, and women’s businesses; and
tance of the Small Business Administration and the Office of Minority Business Enterprise of the United States Department of Commerce as appropriate;
ent agrees to deny participation in services, supplies, or equipment to be procured for this project to any debarred or suspended firms or affiliates in accordance with Executive Order 12549. The recipient acknowledges that doing business with any party listed on the List of Debarred, Suspended, or Voluntarily Excluded Persons may result in disallowance of project costs under the assistance agreement;
shall be provided for representatives of the department, Environmental Improvement and Energy Resources Authority (EIERA), and U.S. Environmental Protection Agency so they may have access to the work wherever it is in preparation or progress;
following statement: “The owner shall make payment to the contractor in accordance with section 34.057, RSMo”;
jects must comply with the Davis-Bacon Act (40 U.S.C. 276a–276a-7). The current Davis-Bacon wage rate from the United States Department of Labor must be incorporated in the bid documents; and
ARRA-funded projects, the specifications must include the following statement or a similar statement in accordance with federal guidance: “All iron, steel, and manufactured goods used in this project must be produced in the United States unless a) a waiver is provided to the owner by the Environmental Protection Agency or b) compliance would be inconsistent with United States obligations under international agreements.”
(N) Construction Equipment and Supplies Procurement. This section describes the minimum procurement requirements which the recipient must use under the loan program.
the procurement of materials, supplies, and services when the aggregate amount involved in any one (1) transaction does not exceed one hundred thousand dollars ($100,000). The small purchase limitation of one hundred thousand dollars ($100,000) applies to the aggregate total of an order, including all estimated handling and freight charges, overhead, and profit to be paid under the order. In arriving at the aggregate amount involved in any one (1) transaction, all items which should properly be grouped together must be included. Department approval and a minimum of three (3) quotes must be obtained prior to purchase.
applies to procurement of construction equipment, supplies, and construction services in excess of one hundred thousand dollars ($100,000) awarded by the recipient for any project. No contract shall be awarded until the department has approved the formal advertising and bidding.
A. Formal advertising.
recipient will cause adequate notice to be given of the solicitation by publication in newspapers of general circulation beyond the recipient’s locality (preferable statewide), construction trade journals, or plan rooms, inviting bids on the project work and stating the method by which bidding documents may be obtained or examined.
bids. A minimum of thirty (30) days shall be allowed between the date when public notice, publication, insertion, or document availability in a plan room is first published and the date by which bids must be submitted. ARRA-funded projects must allow a minimum of twenty-one (21) days between the date when public notice, publication, insertion, or document availability in a plan room is first published and the date by which bids must be submitted. Bidding documents shall be available to prospective bidders from the date when the notice is first published or provided. Recipients are encouraged to directly solicit bids from prospective bidders.
procedure.
reasonable number of bidding documents (Invitations for Bids) and shall furnish them upon request on a first-come, first-served basis. The recipient shall maintain a complete set of bidding documents and shall make them available for inspection and copying by any party. The bidding documents shall include, at a minimum:
work to be performed or equipment to be supplied and the required completion schedule;
the contract to be awarded;
method of bidding and the method of evaluation of bid prices and the basis and method for award of the contract or rejection of all bids;
and criteria which will be employed in evaluating bidders;
for bidding by sealed bid and for the safeguarding of bids received until public opening;
any part of the bidding documents during the period when bids are being prepared, addenda shall be communicated in writing to all firms which have obtained bidding documents in time to be considered before the bid opening time. All addenda must be approved by the department prior to award of the contract;
bid shall be allowed to modify or withdraw its bid before the time of bid opening;
for a public opening of bids at the place, date, and time announced in the bidding documents. Bids received after the announced opening time shall be returned unopened;
responsive, responsible bidder. After bids are opened, the recipient shall evaluate them in accordance with the methods and criteria set forth in the bidding documents. The recipient shall award contracts only to responsible contractors that possess the potential ability to perform successfully under the terms and conditions of a proposed contract. A responsible contractor is one that has financial resources, technical qualifications, experience, organization, and facilities adequate to carry out the contract or a demonstrated ability to obtain these. The recipient may reserve the right to reject all bids. Unless all bids are rejected for good cause, award shall be made to the lowest responsive, responsible bidder. The recipient shall have established protest provisions in the specifications. These provisions shall not include the department as a participant in the protest procedures. If the recipient intends to make the award to a firm which did not submit the lowest bid, the recipient shall prepare a written statement before any award, explaining why each lower bidder was deemed nonresponsible or nonresponsive and shall retain the statements in its files. The recipient shall not reject a bid as nonresponsive for failure to list or otherwise indicate the selection of subcontractor(s) or equipment unless the recipient has clearly stated in the solicitation documents that the failure to list shall render a bid nonresponsive and shall cause rejection of a bid;
though not required to use the model specification clauses developed by the department; and
with contract award must be obtained prior to actual contract award. Recipients shall notify the department in writing of each proposed construction contract which has an aggregate value over one hundred thousand dollars ($100,000). The recipient shall notify the department within ten (10) calendar days after the bid opening for each construction subagreement. The notice shall include:
bidder that the recipient wishes to accept, including justification if the recommended successful bidder is not also the lowest bidder;
award;
ted previously and bidder acknowledgment of all addenda;
specifications;
Certification;
ity worksheet and certification if bids exceed prebid estimates by more than fifteen percent (15%);
proposed contractor(s) positive efforts, MBE/WBE utilization, or both, have been reviewed and meet regulatory requirements;
previously submitted; and
jects, Certification of Nonsegregated Facilities.
(O) Conflict of Interest.
recipient shall participate in the selection, award, or administration of a subagreement supported by state or federal funds if a conflict of interest, real or apparent, would be involved. This conflict would arise when—
the recipient, any member of their immediate families, or their partners have a financial or other interest in the firm selected for a contract; or
or has been awarded a subagreement employs, or is about to employ, any person listed in subparagraph (2)(O)1.A. of this rule.
or agents shall neither solicit nor accept gratuities, favors, or anything of substantial monetary value from contractors, potential contractors, or other parties to subagreements.
(P) Changes in Contract Price or Time. The contract price or time may be changed only by a change order. The value of any work covered by a change order or of any claim for increase or decrease in the contract price shall be determined by the methods set forth in the following:
1. Unit prices.
are acceptable for pricing changes of original bid items. However, when changes in quantities exceed fifteen percent (15%) of the original bid quantity and the total dollar change of that bid item is greater than twenty-five thousand dollars ($25,000), the recipient shall review the unit price to determine if a new unit price should be negotiated.
negotiated;
for labor, direct overhead, materials, supplies, equipment, and other services necessary to complete the work plus an amount to cover the cost of general overhead and profit.
(Q) Progress Payments to Contractors.
progress payments to prime contractors and prime contractors should make prompt progress payments to subcontractors and sup- 10 CSR 60-13
pliers for eligible construction, supplies, and equipment costs.
progress payments are defined as follows:
and
equipment which have been delivered to the construction site or which are stockpiled in the vicinity of the construction site in accordance with the terms of the contract, when conditional or final acceptance is made by or for the recipient. The recipient shall assure that items for which progress payments have been made are adequately insured and are protected through appropriate security measures.
progress payments must be included in each contract and subcontract.
The recipient may retain a portion of the amount otherwise due the contractor. The amount the recipient retains shall be in accordance with section 34.057, RSMo.
(R) Classification of Costs. The information in this section represents policies and procedures for determining the eligibility of project costs for assistance under programs supported by the loan program.
they meet the following tests:
including required mitigation; and
of the federal Safe Drinking Water Act.
2. Eligible costs include, at a minimum:
services incurred in planning and in preparing the design drawings and specifications for the project. These services and their related expenses can be reimbursed based on actual invoices to be submitted after loan closing or by means of an allowance. For invoice reimbursement, the department must have a copy of the executed engineering contract for planning and design of the project;
services incurred during the building and initial operation phase of the project to ensure that it is built in conformance with the design drawings and specifications. A registered professional engineer licensed in Missouri or a person under the direction and continuing supervision of a registered professional engineer licensed in Missouri must provide inspection of construction for the purpose of ensuring and certifying compliance with the approved plans and specifications. Eligible construction phase and initial operation phase service are limited to:
manual;
cost of start-up training for operators of mechanical facilities constructed by the project to the extent that these costs are incurred prior to this department’s final inspection. Costs shall be limited to on-site operator training tailored to the facilities constructed or onor off-site training may be provided by the equipment manufacturer if this training is properly procured; (VIII) User charge ordinance; and
and necessary cost of abandoning drinking water facilities no longer in use. Generally, these costs will be limited to the demolition and disposal of the structures, and abandoning unused wells in accordance with 10 CSR 23-3.110, and final grading and seeding of the site;
meritorious contractor claims for increased costs under subagreements as follows:
the project;
due to differing site conditions; and
awards, and court judgments which resolve contractor claims shall be allowable only to the extent that they are not due to the mismanagement of the recipient;
direct, adverse, physical impacts resulting from building of the treatment works;
sary to comply with environmental studies and facilities plans or necessary to screen adjacent properties;
plies.
tory of laboratory chemicals and supplies necessary to initiate plant operations and laboratory items necessary to conduct tests required for plant operation.
installed at the public water system necessary to the operation of the works.
equipment, provided the equipment meets applicable federal, state, local, or industry safety requirements.
necessary for the operation of the overall public water system, or for the maintenance of equipment. These items include: portable standby generators; large portable emergency pumps; trailers and other vehicles having as their purpose the transportation or application, or both, of liquid or dewatered water treatment plant residuals; and replacement parts identified and approved in advance;
rights in a patented process or product with the prior approval of the department;
sition of real property or interests therein is integral to a project authorized by section 1452(a)(2) of the federal Safe Drinking Water Act and the purchase is from a willing seller. Land must be purchased in accordance with the Uniform Relocation and Real Property Acquisition Policies Act of 1970, P.L. 91- 646, as amended, and certification by the recipient of compliance with the Uniform Relocation and Real Property Acquisition Policies Act is required;
tion oversight and engineering planning and design. If force account is used for planning and design, all engineering services during construction must be provided through force account;
mental impact statement if required under 10 CSR 60-13.030;
interest, EIERA application fees, and contracted project administration costs; and
limited to:
building maintenance equipment such as lawnmowers and snowblowers;
cles for the transportation of the recipient’s employees;
(2)(R)2.I. of this rule that are in excess of just compensation based on the appraised value;
recipient including salaries and expenses of elected and appointed officials and preparation of routine financial reports and studies, and any permit fees necessary for the normal operation of the constructed facility;
permits required by federal, state, or local regulations or procedures;
legal activities associated with the establishment of special departments, agencies, commissions, regions, districts, or other units of government;
damages arising out of the project;
tions of, or failure to comply with, federal, state, or local laws, regulations, or procedures;
approved project;
ment have been or will be received from another state or federal agency;
listed in subparagraph (2)(R)2.J. of this rule; and
of easements and land except that listed in subparagraph (2)(R)2.I.
(3) Project By-Pass, Project Removal and Modification of Funding. This section applies to loan applicants on the fundable priority list. In order to assure best use of the loan funds in a reasonably expeditious manner, projects may be by-passed or removed from the fundable priority list or loan amounts may be modified. The department will confer and negotiate with affected applicants prior to making or recommending decisions on project by-pass, project removal or modification of loan amounts.
(A) Project By-Pass.
Drinking Water Commission (the commission) may by-pass any project on the fundable priority list which is not, in the opinion of the commission, making satisfactory progress toward satisfying requirements for drinking water revolving fund (DWRF) assistance.
project should be by-passed the commission shall use the criteria listed in this subsection.
ority list may be by-passed if the applicant fails to submit the documents required for DWRF assistance at least sixty (60) days prior to the beginning of the quarter for which the assistance is anticipated.
ual schedules developed by the department to determine whether a DWRF project is making satisfactory progress during the fiscal year. A project may be by-passed for failure to meet the schedule.
3. By-pass procedures.
moved from the fundable priority list and, if the application is still valid, will be placed on a project list, in priority order, for funding consideration in the next federal fiscal year.
by-pass will be considered uncommitted and available for distribution to the next priority project in accordance with the requirements of section 640.107, RSMo.
(C) Modification of Funding.
aggregate funds available to the state for drinking water infrastructure improvements, the commission may remove projects or modify funding amounts upon a finding by the department that the applicant is eligible for funding from other government programs (such as USDA Rural Development, the Department of Economic Development’s Community Development Block Grant program, or the Environmental Improvement and Energy Resources Authority). The department will coordinate with the other funding agencies to arrive at equitable and workable funding options for the applicant.
limit the maximum loan amount awarded. If utilized, the amount of the maximum loan limit will be addressed in the annual intended use plan and will be open for public comment.
(4) Leveraged Loans.
(B) General Description.
for the leveraged loan program. The commission, the department and the Environmental Improvement and Energy Resources Authority (EIERA) shall have the authority to make specific refinements, variations or additional requirements as may be necessary or desirable in connection with the efficient operation of the leveraged loan program.
designed to maximize the funding available to make loans to recipients for the planning, design and construction of eligible projects. The EIERA will participate in the leveraged loan program by issuing its bonds or notes in accordance with its governing statute. The determination as to whether a recipient shall receive a leveraged loan under this rule shall be made in accordance with 10 CSR 60-13 and shall be subject to the approval of the EIERA.
the recipient must obtain construction funds and any needed financing from EIERA. The recipient will receive a loan from the Drinking Water Revolving Fund which will be placed in a debt service reserve fund to secure the construction loan. The interest earnings on the debt service reserve fund will provide a subsidy by paying a portion of the interest costs of the EIERA bonds or notes used to provide the construction loan. The principal amount of the loan will be repaid to the DWRF.
(C) Target Interest Rate. The target interest rate (TIR) shall be established by the department in consultation with the EIERA based upon current economic factors, projected fund utilization, deposits in the subfund, and actual or anticipated federal capitalization grants. The department will use the Twenty- Five Bond Revenue Index as published in The Bond Buyer (or any successor publication) as the basis for determining the TIR. The department reserves the right to refinance, assign, pledge, or leverage any loans originated under this subsection.
under the leveraged loan program shall not be less than thirty percent (30%) of the weekly Twenty-Five Bond Revenue Index as published in The Bond Buyer (or any successor publication) the week preceding funding, rounded up to the nearest one one hundredth (0.01) of one percent (1%). The Safe Drinking Water Commission (SDWC) shall not undertake project-by-project revisions.
under section (5), DWRF Direct Loans, shall not be less than thirty percent (30%) of the weekly Twenty-Five Bond Revenue Index as published in The Bond Buyer (or any successor publication) the week preceding funding, rounded up to the nearest one one hundredth (0.01) of one percent (1%). The commission may reduce the interest rate to meet the needs of the applicant. In order to reduce the interest rate, the commission must determine that unique or unusual circumstances exist. In addition, the commission may reduce the interest rate for projects impacting enterprise zones as authorized under state law.
receive a further reduction in the TIR as determined by the SDWC. A disadvantaged community is defined, for the purpose of reducing the TIR, as an applicant that:
three hundred (3,300) or less based on the most recent decennial census; 10 CSR 60-13
or below seventy-five percent (75%) of the state average median household income as determined by the most recent decennial census; and
for five thousand (5,000) gallons that is at least two percent (2%) of the median household income of the applicant.
the Safe Drinking Water Act as amended, or any subsequent federal act, additional subsidization (such as principal forgiveness, negative interest loans, grants, or the like) may be provided as federal law requires or allows.
(D) Additional Application Requirements.
shall provide upon request any detailed financial information as may be required to determine the applicant’s eligibility for the leveraged loan program.
application requirements in this rule, leveraged loan recipients must provide a description of the proposed method of obtaining any necessary financing for costs not being financed by the DWRF loan program, including information regarding the applicant’s progress toward obtaining the funds and assistance.
(E) DWRF Leveraged Loan Structure.
loan from the DWRF will be used to fund a debt service reserve. The loan from the DWRF will be paid in one (1) or more installments by deposit to the debt service reserve fund on behalf of the recipient. Interest earnings on the debt service reserve fund will pay a portion of the interest costs of the EIERA bonds or notes used to provide the construction loan. DWRF loans deposited to the debt service reserve fund shall bear an interest rate of zero percent (0%).
the loan in accordance with section 644.106, RSMo and a subsidized interest rate.
estimated subsidy adequate to reduce the net interest cost of the EIERA loan to the target interest rate (TIR).
(I) Disbursement from Loan Proceeds. The recipient shall request payments from the construction loan fund, which shall include the information listed in this subsection (4)(I) and other information deemed necessary and approved by the EIERA to ensure proper project management and expenditure of public funds.
form.
the construction contractor, the recipient, and the resident inspector, if applicable.
equipment, and supplies for the project.
under the provisions of the trust indenture.
(K) Loan Repayment.
to the DWRF loan program will be made by the release of money from the debt service reserve fund. If funds for these payments are not available in the debt service reserve, then the payment shall be made from other funds of the recipient.
on the EIERA bonds or notes will be paid from revenues of the user charge system or from another dedicated source of revenue as may be designated in the applicable bond resolutions or loan agreements.
(5) DWRF Direct Loans.
(A) General.
requirements for direct loans awarded under this rule. All other requirements also apply, including administrative fees in subsection (2)(B) of this rule, except for subsection (2)(A) and section (4) of this rule which pertain to leveraged loans.
for the direct loan program. The commission and the department shall have the authority to make specific refinements, variations, or additional requirements as may be necessary or desirable in connection with the efficient operation of the direct loan program.
loans by purchasing the general obligation bonds, revenue bonds, short-term notes, or other acceptable obligation of any qualified applicant for the planning, design, and/or construction of an eligible project. These loans shall not exceed the total eligible project costs described in subsection (2)(R) of this rule less any amounts finalized by any means other than through the direct loan program. The department is not required to offer direct loans to Drinking Water Revolving Fund Loan Program applicants.
(C) Construction Loans. The department may award construction loans to qualified applicants in order to provide interim financing during construction of their project. Construction loans may contain clauses and provisions determined by the department to be necessary to protect the interests of the state.
funds, the construction loan will remain in force throughout the construction period. However, it must be paid in full no later than the closing deadline provided in the construction loan agreement.
term financing under this rule, then the construction loan must contain an agreement by the department and the recipient that the department will purchase the recipient’s general obligation bonds, revenue bonds, or other acceptable debt obligation after construction is completed. If a construction loan is awarded, the permanent financing amount will be limited in amount to the sum of the payments drawn from the construction loan for eligible project costs plus interest accrued on the construction loan plus the reasonable costs of issuance which can be financed under Missouri statutes.
loan documents, the recipient may request construction loan payments no more often than monthly. The maximum construction advance shall be the sum of all eligible costs incurred to date. Each payment request shall include the following information:
form;
by the construction contractor, the recipient, and the resident inspector, if applicable;
equipment, and supplies for the project; and
necessary by the department to ensure proper project management and expenditure of public funds.
payment request accurately reflects the eligible cost incurred to date on the project, the department will request that a state payment check be issued to the recipient.
(D) The department may require the recipient to contract with a trustee or paying agent to provide all or part of the following services:
recipients and their contractors;
released to those recipient’s whose contractors have a project contract approved by the department;
contractors receive more in assistance payments than approved by the department; and
and debits for the construction project.
(F) Amortization Schedules. The department shall use the following guidelines to establish amortization schedules for obligations purchased under this rule:
gations shall be fully amortized in no more than twenty (20) years after initiation of operation;
obligations shall be no less than annual with the first payment no later than one (1) year after the initiation of operation;
be straight line or declining schedules for the term of the debt obligation; and
not later than one (1) year after initiation of operation.
AUTHORITY: section 640.100, RSMo Supp. 2008 and section 640.107, HB 661, Ninetyfifth General Assembly 2009.* Emergency rule filed July 15, 1998, effective July 25, 1998, expired Feb. 25, 1999. Original rule filed Aug. 17, 1998, effective April 30, 1999. Amended: Filed Jan. 19, 2001, effective Sept. 30, 2001. Emergency amendment filed May 20, 2009, effective May 30, 2009, expired Feb. 25, 2010. Amended: Filed June 24, 2009, effective Jan. 30, 2010. *Original authority: 640.100, RSMo 1939, amended 1978, 1981, 1982, 1988, 1989, 1992, 1993, 1995, 1996, 1998, 1999, 2002, 2006 and 640.107, RSMo 1998, amended 2009.