62-554.400. Loan Application and Agreements

(1) General.

(a) To receive a loan, a project sponsor must submit a complete loan application, provide reasonable assurance that it has the financial capability to complete the project and repay the loan, and enter into a written loan agreement. A complete loan application, Water Storage Facility Loan Program, Loan Application, Form 2, effective 7-19-18, adopted and incorporated by reference shall be submitted to the Department within 120 days after the after the project sponsor receives confirmation of award. The project sponsor may incorporate into the loan application, by reference, any information previously submitted to the Department. This form is available from the Department’s Drinking Water State Revolving Fund Program, 3900 Commonwealth Blvd., Tallahassee, Florida 32399-3000, or at http://www.flrules.org/Gateway/reference.asp?No=Ref-09537.

(b) If a project sponsor does not submit a complete loan application within 120 days, or a loan agreement is not executed within 210 days after sponsor receives confirmation of award, the notice of award will be rescinded and the next highest priority project that did not receive complete requested funding will be awarded those funds; unless the project sponsor can show good cause prior to that meeting documenting why the application was not submitted or why the agreement was not executed by the appropriate deadline. For the purpose of this paragraph, good cause shall mean unforeseen circumstances outside of the sponsor’s control or a showing that the sponsor is making a diligent effort to complete or execute the loan application or loan agreement.

(c) Project sponsors shall provide financial assurance that project activities will be completed, including requirements for service providers and equipment suppliers or manufacturers to provide performance guarantees, insurance covering workers’ compensation, comprehensive general liability, vehicle liability, and property damage to the extent that coverage is available for project activities.

(d) A loan service fee between two and four percent of the total loan amount less capitalized interest shall be estimated at the time of execution of the loan agreement, revised with any increase or decrease amendment, and shall be finalized in the final loan amendment based on the total loan disbursed. The loan recipient shall pay the loan service fee from the first repayment(s) following the final amendment. The Loan Service Fee shall not be included in the principal of the loan.

(e) Before approval of a loan, the local government or water supply entity must, at a minimum, submit all the following to the department:

1. A proposed repayment schedule.

2. Evidence that all required permits have been obtained, or written documentation from the applicable permitting authorities that the project will be permitted, or that a permit is not required.

3. Plans and specifications, biddable contract documents, or other documentation of appropriate procurement of goods and services.

4. Written assurance that records will be kept using generally accepted accounting principles and that the department or its agents and the Auditor General will have access to all records pertaining to the loan.

5. If the facility is primarily for the purpose of water supply for consumptive use as provided in paragraph 373.475(4)(e), F.S., documentation that it will be self-supporting.

6. Documentation that the water management district’s governing board within whose boundaries the facility will be located has approved the facility. If the facility crosses jurisdictional boundaries, approval from each applicable district must be documented and provided to the department.

7. Survey of property to be mortgaged and title opinion, as applicable.

(2) Interest Rate. The interest rate shall be 60% of the market rate as established using the Thomson Publishing Corporation’s “Bond Buyer” 20-Bond GO Index and shall not exceed that paid on the last bonds sold pursuant to s. 14, Art. VII, State Constitution. The market rate is established by the Department as of January 1, April 1, July 1, and October 1 of each year and it is the average weekly yield during the three (3) months immediately preceding the date of determination. The average weekly yield is derived from the yields reported in the “Bond Buyer” for the full weeks occurring during the three-month period. Once established in the loan agreement, the interest rate shall be fixed for the principal amount of the loan.

(3) Pledged Revenues. The loan recipient shall make deposits of pledged revenues to a restricted or assigned debt service account and shall be responsible for the maintenance of that account.

(a) Pledged revenues for projects sponsored by a local government shall be a minimum of 1.15 times the amount required to make each semiannual loan repayment unless the project sponsor establishes a restricted or assigned reserve account in an amount not less than the equivalent of two semiannual loan repayments. The pledged revenue coverage for the loan from the Department shall not be transferred or derived from coverage required by senior lien debt instruments.

(b) Pledged revenues for projects sponsored by other than a local governmental agency shall be a minimum of 1.15 times the amount required to make each semiannual loan repayment and shall be secured with collateral having an appraised market value not less than 125% of the total of both the dollar amount owed on the property and the dollar amount of the loan principal. The appraisal report must be less than 12 months old at the time the loan application is received. The loan applicant must own the real property in fee simple without any encumbrances on the title that would prevent sale of the property in case of default on the loan.

(4) Legal Affirmation. When a loan agreement executed by a project sponsor is submitted to the Department for execution, it shall include an affirmation by the project sponsor’s legal counsel that:

(a) The loan agreement constitutes a valid and legal obligation of the borrower;

(b) The loan agreement specifies the revenues pledged to the repayment of the loan; and,

(c) The pledge is valid and enforceable.

(5) Security. The Department shall have no lien on or security interest in or claim on any monies or property except as expressly provided in the loan agreement and, for projects sponsored by other than a local government, the security interest agreement and mortgage, as applicable.

(6) Assurance of Compliance. The project sponsor shall provide assurance that:

(a) Records will be kept using generally accepted accounting principles. The Department, the Auditor General, and their agents shall have access to all records pertaining to the loan.

(b) Project facilities will be properly operated and maintained and best management practices shall be continued, as appropriate.

(c) Loan funds will not be used for the purpose of lobbying.

(7) Disbursements. Disbursements to the project sponsor shall be for allowable invoiced costs, unless the project sponsor qualifies and is approved for advanced payments in accordance with subsection 216.181(16), F.S. Disbursements shall be subject to the following requirements:

(a) Requests for disbursements for construction, technical services, and for planning and design costs shall be accompanied by itemized summaries of the materials, labor, or services to identify the nature of the work performed. The disbursement package shall also include a statement that the construction or other services for which payment or reimbursement is sought has been satisfactorily performed;

(b) The materials, labor, and services shall be part of the approved project scope; and,

(c) The disbursement shall be due under the terms of the loan agreement, and there shall be money available under the loan agreement for payment.

(8) Repayments. The project sponsor shall begin repaying a loan no later than the date scheduled under the loan agreement.

(9) Loan Repayment Term. Loan repayment periods for construction projects sponsored by a water supply entity shall not exceed thirty (30) years.

(10) Loan Certification. If requested in writing by the Department, the project sponsor’s authorized representative or its chief financial officer shall submit a certification that:

(a) Pledged revenue collections satisfy the rate coverage requirement;

(b) The debt service account contains the funds required;

(c) The restricted or assigned pledged revenue account contains the funds required, if applicable; and,

(d) The revenue generation system is in conformance with subparagraph 62-554.200(6)(d)3., F.A.C.

(11) Remedies for Defaults. Remedies for delinquent loan repayment and other events of default shall be limited to those set forth in the loan agreement. Events of default shall include non-compliance with any of the terms of the loan agreement. No delay or omission to exercise any right or power accruing upon an event of default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein.

Rulemaking Authority 373.475 FS. Law Implemented 373.475 FS. History–New 7-19-18.