Amendments to Chapter 62-503, F.A.C., are proposed to clarify administrative procedures, delete unnecessary or redundant language, better define allowable and unallowable costs, restructure the priority system, and to improve the methodology for ...

DEPARTMENT OF ENVIRONMENTAL PROTECTION

RULE NOS.:RULE TITLES:

62-503.200Definitions

62-503.300General Program Information

62-503.430Loan Agreements

62-503.500Funds Reserved for Specific Purposes

62-503.600Priority List Information

62-503.700Planning, Design, Construction, and Procurement Requirements

62-503.751Environmental Review

62-503.800Audits Required

62-503.850Exceptions to Program Requirements

PURPOSE AND EFFECT: Amendments to Chapter 62-503, F.A.C., are proposed to clarify administrative procedures, delete unnecessary or redundant language, better define allowable and unallowable costs, restructure the priority system, and to improve the methodology for calculating the financing rate. Changes to the project priority system are being proposed so that projects addressing the Department’s core mission will receive the highest priority. These revisions would align the program’s priority system with the priorities of other Department programs. Changes in the financing rate formula will generally increase the base financing rate slightly, especially at current market rates, however the financing rate reductions proposed for implemented asset management plans, innovative/alternative projects, and new federal requirements for construction projects will frequently result in a net decrease in the financing rate for the average sponsor. The proposed changes will, however, result in an increase in financing rates during times when the bond market rates are somewhat higher that the current rate. This change was requested by the Division of Bond Finance to protect the AAA bond rating the program currently receives. The degree to which a sponsor is financially disadvantaged will remain the primary factor in determining the amount of the subsidy. The allowance for planning and design activities is being deleted and replaced with planning and design loans which will be reimbursed based on invoiced costs. Also, the requirements for an acceptable asset management plan and qualifications for innovative/alternative projects are being incorporated to define what is expected to qualify for the financing rate incentives.

SUMMARY: Rule 62-503.200, F.A.C., is being amended to incorporate new definitions and to revise existing definitions. New definitions for “Inflow/Infiltration project,” “planning loan,” “design loan,” and “construction loan” are proposed to provide clarification on the requirements of each type of loan available. New definitions have also been included for “Asset Management Plan”, “Innovative/Alternative project”, “segment cap”, “septic tank failure”, “waiting portion”, and loan service fee. Rule 62-503.300, F.A.C., establishes new deadlines for project submittals, clarifies allowable and unallowable project costs, and adds separate planning loans and design loans in place of preconstruction loans along with the required submittals to qualify for each type of loan. Proposed changes include a new formula for calculating the financing rate and financing rate incentives for implementing asset management plans and constructing innovative/alternative projects, as well as reductions for new federal requirements. The project priority system was moved to this section and would be changed to align with Department and EPA priorities. Revisions to Rule 62-503.430, F.A.C., include moving the application requirements to this section and various clarifications on the agreement requirements. The proposed changes to Rule 62-503.500, F.A.C., incorporate anticipated federal requirements for the program, allowing principal forgiveness and reserved funds for green projects as required by the federal government. Rule 62-503.600, F.A.C., will be repealed and the language moved to Rule 62-503.300, F.A.C. The proposed changes to Rule 62-503.700, F.A.C., are intended to clarify what is expected in planning and design documents as well as the procurement process for design/build and construction manager at-risk construction contracts. Revisions to Rules 62-503.751, 62-503.800, and 62-503.850, F.A.C., are minor updates and clarifications.

OTHER RULES INCORPORATING THIS RULE: 62-505.200, 62-505.300, and 62-505.350, F.A.C.

EFFECT ON THOSE OTHER RULES: The references to 62-503, F.A.C., that are currently in 62-505, F.A.C., will be amended as necessary to reflect changes in 62-503.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 403.1835(10), 403.1837(9) FS.

LAW IMPLEMENTED: 403.1832, 403.1835, 403.031, 403.1837, 215.97 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: Friday, October 25, 2013, 7:00 a.m. until conclusion, but no later than 11:00 a.m.

PLACE: Department of Environmental Protection, Room 609, 2600 Blair Stone Road, Tallahassee, Florida 32399-2400

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Tim Banks at (850)245-8360 or email timothy.banks@dep.state.fl.us. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Tim Banks at (850)245-8360 or email timothy.banks@dep.state.fl.us

THE FULL TEXT OF THE PROPOSED RULE IS:

CLEAN WATER STATE REVOLVING FUND LOAN PROGRAM

62-503.200 Definitions.

For purposes of this rule chapter:

(1) “Act” means the Ffederal Water Pollution Control Act, 33 USC § 1251 et seq.Pub. L. 92-500, as amended, 1987, also known as the amended Clean Water Act. Sections 212, 319, and 320 and Title VI of the Act pertain to the Clean Water State Revolving Fund, and are hereby adopted and incorporated by reference.

(2) “Affordability Index” The term “Affordability Index” means the empirical number that is generated for a local governmental agency project sponsor using the computer model entitled “Final Report Statistical Wt. – No Sales,” which is based on a combination of median household income, poverty, and unemployment census statistics for local governments – User Manual Affordability Index, March 2003 This computer model can be found in “Updating the Department of Environmental Protection’s Affordability Index, 2011,” August 9, 2011, Economics Department, Florida State University, Tallahassee, Florida, is hereby incorporated by reference. This document is available from the Department’s Clean Water State Revolving Fund Program, 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-2400, or at http://www.flrules.org/Gateway/?????????. and the term “Affordability Index” means the empirical number that is generated for a local government project sponsor using the computer model entitled “Final Report Statistical Wt. – No Sales,” which is based on a combination of the most recent median household income, poverty, and unemployment census statistics for local governments.

(3) “Asset Management Plan” means a systematic management technique for utility systems that focuses on the long-term life cycle of the assets and their sustained performance, rather than on short-term, day-to-day aspects of the assets. This plan includes the identification of and costs for rehabilitating, repairing, or replacing all assets as well as the schedule to do so. Rule 62-503.700(7), F.A.C., provides details on the contents of the plan.

(3) renumbered (4) No change.

(4) “Brownfields” means abandoned, idle, or under-used industrial and commercial sites where expansion or redevelopment is complicated by real or perceived environmental contamination of ground or surface waters.

(5) “Capitalization grant project” means a project for which the project sponsor shall document compliance with specific federal requirements under subsection 62-503.700(1), F.A.C., in addition to the general requirements under subsections 62-503.700(2) through (7)(11), F.A.C., to qualify for a loan. Capitalization grant projects will be identified in an amount corresponding to the annual capitalization grant received by the Department from the United States Environmental Protection Agency (EPA).

(6) through (7) No change.

(8)“Construction loan” means an assistance agreement to fund a wastewater, stormwater, or non-point source construction project or equipment purchase. To be eligible for a construction loan, a planning document and plans and specifications must be accepted by the Department, the environmental review process described in Rule 62-503.751, F.A.C., must be complete, all required Department permits and authorizations must have been obtained, and all necessary site certifications must have been submitted to the Department. For design/build projects, the approval of the procurement process shall be accepted in lieu of the plans, specifications, site certifications, and permits. The requirements for planning documents are described in subsection 62-503.700(2), F.A.C., and the requirements for plans and specifications are described in subsection 62-503.700(3), F.A.C.

(8) renumbered (9) No change.

(9) “Contingency portion” means the portion of a priority list consisting of projects that are qualified to be on the fundable portion but cannot be placed on the fundable portion until there are sufficient funds.

(10) “Department” means the Department of Environmental Protection, Clean Water State Revolving Fund Program, Bureau of Water Facilities Funding, 2600 Blair Stone Road, MS 3505, Tallahassee, FL 32399-2400. For electronic information requests and submittals, email SRF_Reporting@dep.state.fl.us.

(11) “Design/build” means a contracting procedure whereby a firm or other single entity contracts with the project sponsor for a fixed price or a cost-plus-a-fixed-fee with a guaranteed maximum price, for the work and is responsible for both design and construction of the project. The procurement process must be competitive best value or competitive qualifications based. For a competitive best value selection, the most advantageous proposal to the project sponsor is selected based on criteria that include price and other factors. For competitive qualifications based procurement, the qualifications of the responsible vendor are the primary consideration in the selection process and the responsible vendor shall use open book accounting for this process.

(12) “Design loan” means an assistance agreement to fund design activities that will result in biddable, permittable plans and specifications for an eligible construction project. Design/build projects are not eligible for a design loan. Additionally, a planning document defining the scope of the project to be funded must have been accepted by the Department. The requirements for an acceptable planning document are described in subsection 62-503.700(2), F.A.C.

(12) “Direct loan” means a loan from the state revolving fund monies other than proceeds from tax exempt bonds.

(13) “EPA” means the U.S. Environmental Protection Agency.

(14)renumbered (13) No change.

(14)(15) “Financing rate” means the semiannual compounding rate at which charges are imposed on the unpaid principal, including capitalized interest, of a State Revolving Fund (SRF) loan as described in subsection 62-503.300(5) 62-503.300(9), F.A.C., hereby incorporated by reference. The financing rate has a loan interest rate component and, for non-capitalization grant project loans made after June 30, 1997, a grant allocation assessment rate component.

(16) renumbered (15) No change.

(17)“Florida Water Pollution Control Financing Corporation” means the nonprofit public-benefit corporation created for the purpose of financing or refinancing the costs of water pollution control projects and activities authorized under Section 403.1835, F.S.

(18) through (19) renumbered (16) through (17) No change.

(18)(20)“Grant allocation assessment” means that portion of each repayment of each non-capitalization grant project loan made after June 30, 1997, used solely for the purpose of making wastewater grants to financially disadvantaged small communities under Section 403.1838, F.S. The grant allocation assessment is in addition to the principal and interest portions of each non-capitalization grant project loan repayment and is included as a component of the financing rate.

(19) “Inflow/infiltration or I/I project” means a project to reduce excessive inflow or infiltration into the collection system. Infiltration is considered excessive when the total flow exceeds 120 gallons per capita per day during periods of dry weather. Inflow is considered excessive when the total flow exceeds 275 gallons per capita per day during a rain event. Documentation shall include influent flow rates, rainfall records and the population of units connected to the treatment system or lift station.

(20) “Innovative/Alternative project” means a project that demonstrates water or energy efficiency, uses an environmentally innovative approach to treat wastewater or stormwater, or a stormwater project that restores the natural hydrology. The requirements for meeting one or more of these categories are provided in Attachment 2 of EPA’s “Procedures for Implementing Certain Provisions of EPA’s Fiscal Year 2012 Appropriation Affecting the Clean Water and Drinking Water State Revolving Fund Programs”, March 2012, hereby incorporated and adopted as a reference. This document is available from the Department’s Clean Water State Revolving Fund Program, 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-2400, or at http://www.flrules.org/Gateway/?????????. For energy efficiency projects the recipient shall provide a certification. The certification must state that the accepted project was designed to maximize energy efficiency. Certifications by a certified energy manager (CEM) or a certified energy auditor (CEA) are acceptable. CEMs and CEAs must be certified by the Association of Energy Engineers or equivalent national or international organization. Information on these certifications is available at: http://www.aeecenter.org/i4a/pages/index.cfm?pageid=3330.

(21) “Leveraged loan” means a loan from the proceeds of bonds issued by the Florida Water Pollution Control Financing Corporation (FWPCFC).

(22) “Loan interest rate” means a percentage of the financing rate as determined under subsection 62-503.300(8), F.A.C.

(22) “Loan Service Fee” means a fee paid by the project sponsor of two percent of the total loan amount less the portion of the loan for capitalized interest and shall not be included in the principal of the loan. The loan service fee 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 available repayments following the final amendment.

(23) “Local government” means a municipality, county, district, or authority, or any agency thereof, or a combination of two or more of the foregoing acting jointly in connection with a project and having jurisdiction over collection, transmission, treatment, or disposal of wastewater, stormwater, industrial wastes, or other wastes. It includes a district or authority, the principal responsibility of which is to provide airport, industrial or research park, or port facilities to the public.

(23)(24) “Planning portion” means the portion of the priority list consisting of projects that do not qualify for the fundable or waitingcontingency portion.

(24) “Planning loan” means an assistance agreement to perform the initial planning and administration for a project. The deliverable for this loan shall be a planning document or a sewer system evaluation study. The requirements for the planning document are described in subsection 62-503.700(2), F.A.C. A planning loan shall not be used to acquire any interest in real property.

(25) “Pledged revenue” means revenue specifically approved by the Department and pledged or dedicated to the repayment of the loan.

(26)“Priority list” means the annual listing of fundable, waiting contingency, and planning portion projects.

(27) “Project” means as follows:

(a) For funding as a result of section 212 of the Act, devices and systems associated with wastewater, reclaimed water or stormwater management; and

(b) For funding as a result of either section 319 or section 320 of the Act, devices and systems or implementation of best management practices associated with nonpoint source water pollution control or implementation of a remedial action plan associated with brownfields.

(28) through (29) No change.

(30) “Request for Iinclusion” means completed Form 62-503.900(1), Request for Inclusion, effective (effective date of rule) (7-29-04), which is hereby incorporated by reference. This form is available from the Department’s Clean Water State Revolving Fund Program, 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-2400, or at http://www.flrules.org/Gateway/?????????.

(31) “Segment cap” means the maximum amount available to any one sponsor during a fiscal year. The segment cap amount shall be established at a public meeting approving the list and shall be less than 25 percent of the funds available. Adjustments to the segment cap amount shall be made at a list management public meeting if additional funds become available and all projects eligible for placement on the fundable portion of the priority list at the most recent list approval or list management public meeting have been funded.

(31) “Segmented project” means a project for which the allowable costs exceed, in a given fiscal year, the amount that the Department commits to provide under paragraph 62-503.600(2)(b), F.A.C..

(32) “Septic tank failure” means a condition existing within an onsite sewage treatment and disposal system that prohibits the system from functioning in a sanitary manner and that results in the discharge of untreated or partially treated wastewater onto the surface of the ground, into surface water, into ground water, or that results in the failure of building plumbing to discharge properly. However, for the purposes of this rule, failures resulting from improper maintenance of the system or lack of maintenance shall not be considered a septic tank failure.

(33)(32) “Service Area” means that area currently served by the project sponsor and any additional the area proposed to be served by the sponsor’s project sponsor.

(34)(33) “Small community” means a municipality or unincorporated community with a total population of 10,00020,000 or less as of the most recent decennial census.

(35) “Waiting portion” means the portion of a priority list consisting of projects that are qualified to be on the fundable portion but cannot be placed on the fundable portion until there are sufficient funds.

(34) renumbered (36) No change.

(37) The following terms and phrases used throughout this Rule Chapter have the meaning given these words in Sections 287.012, 403.1835, 403.1837 or 403.031, Florida Statutes: best value, FWPCFC, and local governmental agencies.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1832 403.1822(3), 403.1835, 403.031, 403.1837 FS. History–New 4-17-89. Amended 12-4-91, 2-23-94, Formerly 17-503.200, Amended 1-4-98, 7-1-99, 2-6-02, 7-29-04,_________.

62-503.300 General Program Information.

(1) Steps involved in obtaining a pre-construction or construction loan.

(a) Request for Inclusion. The project sponsor shall submit a Rrequest for Iinclusion Form, incorporated by reference in 62-503.200(30), F.A.C., on the priority list to the Department to establish project ranking on the priority list as outlined in paragraph (1)(e) below Rule 62-503.600, F.A.C., and to determine the financing rate on the loan, as outlined in subsection (5)(9), below.

1. The Department shall review requests for inclusion shall be reviewed to verify eligibility and accuracy of the information provided, such as census tract numbers, service area boundaries, population, public health risk, system boundaries, and project costs, and to determine the project scope.

2. Additional information shall be requested by the Department when the data provided by the project sponsor are incomplete or unclear. Data remaining incomplete or unclear after thirty (30) days from receipt of the Department’s written request for additional information shall result in the minimum priority score.

(b) Documentation required for priority listing. The sponsor shall have postmarked or delivered to the Department all required documentation on or before June 1 preceding the first priority list hearing for the upcoming fiscal year. To be added to the priority list at a subsequent hearing for that year, documentation shall be submitted at least thirty (30) days prior to the hearing. All documentation must be complete as required by this chapter fifteen(15) days prior to the hearing date. The documentation that must be timely submitted to compete for funding at a priority list meeting varies depending on the type of loan being requested and is known as the readiness-to-proceed criteria. For planning loanspreconstruction projects, the completed Request for Inclusion form is the only documentation required. For design loans, the Request for Inclusion form and all documentation required in subsection 62-503.700(2), F.A.C., must be submitted and complete. For Inflow and Infiltration (I/I) rehabilitation loans, the Request for Inclusion form, sewer system evaluation study, all documentation referenced in Rule 62-503.751, F.A.C., all required permits and bid documents corresponding to the areas to be rehabilitated must be submitted. For construction loansprojects, the Request for Inclusion form, all documentation required under Rule referenced in subsections 62-503.700(2) through 62-503.700(5), F.A.C., must is also required to be submitted, and the process described in Rule 62-503.751, F.A.C., must be completed.

1. Except as provided in subparagraph 2. below, if funds are available for new projects, a priority list public meeting shall be held on the second Wednesday in August, or as otherwise noticed in the Florida Administrative Register at least 60 days in advance of the public meeting.

2. If the waiting portion from the previous fiscal year exceeds twice the anticipated available funds, no public meeting shall be held, unless it is necessary to add projects to meet federal requirements. If such a public meeting is held, only those projects necessary to comply with the federal requirements shall be considered. For the purposes of this paragraph, anticipated available funds means federal capitalization grants and state matching funds expected to be received during the state fiscal year, loan repayments minus debt service payments to be received during the state fiscal year, any carry over funds from the previous year, and anticipated interest earnings during the fiscal year.

3. If additional funds are available after the priority list public meeting, one or more priority list management public meetings shall be scheduled to allocate the additional funds.

(d) Readiness-to-proceed deadline. List project on priority list. For a project to appear on the priority list, the sponsor shall have postmarked or delivered to the Department all documentation as required in paragraph (b) above no later than 45 days before the priority list public meeting at which the project competes for funding. Electronic submittals to the Department are encouraged. The project sponsor must respond to all Department comments related to the required documentation and must submit these responses at least 15 days prior to the public meeting.

(e) Priority system. Timely submitted projects shall be given priority according to the extent each project is intended to remove, mitigate, or prevent adverse effects on surface or ground water quality and public health. The final priority score for each project shall be determined as described in subparagraphs 1 though 4 below.

1. Base priority score. Each project shall receive a base priority score (BPS) based on the weighted average of its components or facilities. The BPS shall be determined based on the following formula where CPS means the component priority score and CCC means component construction cost or:

Project components shall be assigned component priority scores according to the categories in Table 1.

Table 1

Project Component	CPS
1. Eliminate a documented acute or chronic public health hazard	500 points
2. Implement a project included in, or to be implemented as a direct result of, an adopted Basin Management Action Plan or a Reasonable Assurance Plan approved pursuant to section 403.067, F.S.	450 points
3a. Protect surface or ground water by reducing a documented source of pollution, pollution reductions necessary to meet regulatory requirements, or; 3b. Projects or activities by local governmental agencies or on-site system management entities, under section 319 of the Act, that correct septic tank contributions to nutrient impaired spring systems	400 points
4. Address a compliance problem documented in an enforcement action where the Department has issued a notice of violation or entered into a consent order with the project sponsor	375 points
5. Meet the criteria for Innovative/Alternative; correct excessive inflow/infiltration; scheduled rehabilitation, replacement, or repair described in an approved asset management plan; or reuse that replaces an existing or proposed demand on a water supply	350 points
6. Planning and design loans and for rehabilitation, replacement or repair not included in an approved asset management plan	340 points
7. Projects that construct other reclaimed water systems or residuals reuse systems that do not meet the criteria of component 5. above	300 points
8. Ensure compliance with other enforceable standards or requirements	200 points
9. Timely submitted project that otherwise meets the requirements of the Act	100 points

2. Special waters of the state factor. A project base priority score assigned under subparagraph (e)1. above, shall be multiplied by 1.2 if the project is a construction project that will assist in the restoration or protection of Outstanding Florida Waters (pursuant to Section 403.061, F.S.), a water body identified under the National Estuary Program (pursuant to the Act); a federally designated Wild, Scenic or Recreational River Area; or an impaired water body on the State’s adopted verified list of impaired waters.

3. Construction projects that result in the elimination of ocean outfalls or are identified in a regional water supply plan developed pursuant to Section 373.709, F.S., shall have 15 bonus points added to the priority score after the adjustment under subparagraph (e)2. above.

4. Economic hardship. The extent of the economic hardship existing in a small community to be served by the project shall be reflected in the priority score. For a sponsor that qualifies as a small community with a financial hardship, points shall be added to the priority score, using the formula 1000 divided by the Affordability Index, after adjustment under subparagraphs (e)2. and (e)3., above.

(f) Priority List Development. The priority list is developed at the public meeting and includes the fundable, waiting, and planning portions. Projects that meet the requirements of paragraph (b) above compete for placement on the fundable or waiting portions using a tiered ranking system. Tier 1 includes all projects previously on the fundable portion which require an increase to an existing loan, tier 2 includes new projects that receive a priority score of 350 points or more, and tier 3 includes all other projects. Tier 1 is the highest priority and tier 3 the lowest. Within each tier, projects are ranked in priority score order with the highest score at the top of the tier. Once the segment cap has been determined, the available funds are assigned to projects in tiers 1 and 2 moving down the list until all projects have been assigned funds, up to the lower of the requested amount or the segment cap, or until the available funds are exhausted. The unfunded balance is then placed on the waiting portion, up to a maximum of $50 million, by tier then priority score order. If funds remain available, they are assigned to projects in tier 3 until the funds are exhausted or all projects have been funded. Projects that must be added to meet special provisions of a federal capitalization grant shall be added to the bottom of the fundable portion, bypassing projects that would otherwise be placed on the fundable portion. After the ranking of projects, the proposed list shall be posted on the Department’s website not later than 14 days before the priority list public meeting. Projects from tier 3 that do not receive any funding are placed on the planning portion in alphabetical order. To receive funding, projects on the planning portion must compete for funding at a subsequent priority list public meeting.

(d) Loan Application.

1. A complete loan application, Form 62-503.900(2), State Revolving Loan Program for Point Source Water Pollution Control Loan Application, effective (7-29-04), or Form 62-503.900(3), State Revolving Loan Program for Non-Point Source Water Pollution Control Loan Application, effective (7-29-04), hereby incorporated by reference, shall be submitted to the Department within 120 days after the project is listed on the fundable portion of the priority list. The project sponsor may incorporate into the loan application, by reference, any information previously submitted to the Department.

2. If no loan application is received within this 120-day period, the project is subject to removal from the priority list at the next scheduled hearing.

(e) Loan Agreement. A more detailed discussion is located in Rule 62-503.430, F.A.C.

1. In order to receive consideration for a loan, the project sponsor must achieve a fundable portion listing for the project, satisfy the appropriate requirements under Rules 62-503.700 and 62-503.751, F.A.C., and submit a complete loan application to the Department.

2. Projects that qualify for funding under section 212 of the Act may be eligible for direct loans or leveraged loans. However, a project sponsor that has previously financed any stormwater project or wastewater project using tax-exempt bond proceeds shall not qualify for a direct loan for construction as long as the net proceeds of bonds issued by the Florida Water Pollution Control Financing Corporation are available and sufficient.

3. Projects that qualify for funding under section 319 or 320 of the Act shall be eligible for direct loans only.

4. A preconstruction loan agreement shall provide for an amendment to fund the construction activities when the preconstruction activities are completed as required under the loan agreement. Preconstruction loan recipients shall complete the requirements under Rules 62-503.700, and 62-503.751, F.A.C., no later than the time set forth in the loan agreement.

(2) Allowable project costs. Costs incurred before execution of a loan agreement shall be ineligible for reimbursement upon execution of the agreement unless the project sponsor receives prior written authorization from the Department to incur such costs. The Department shall issue an authorization to incur costs only after the requirements of Rules 62-503.700 (except for land purchase) and 62-503.751, F.A.C., have been met. Categories of allowable project costs include the following water pollution control activities subject to such limitations for leveraged loans as are necessary to maintain the tax-exempt status of bonds issued by the FWPCFC Florida Water Pollution Control Financing Corporation:

(a) Land that will be used for the ultimate disposal of wastewater or stormwater. Funding shall be limited to the fair market value of the acreage, in fee simple, of land necessary for and integral to the treatment process, including the zone of discharge. If additional land is acquired, the eligible amount shall be the acreage of land necessary for treatment divided by the total area purchased times the purchase price;

(b) Construction and related procurement and other arrangements used to implement planned activities (such as a best management practice or brownfield remedial action plan);

(e) Legal and Ttechnical services after bid opening or award receipt of proposals for design/build projects, and legal services resulting directly from the requirements of the Department supplied supplementary conditions that are included in the bid documents to comply with federal requirements, or legal services resulting from contractor non-compliance with the construction contract;

(f) Allowable Ccosts associated with interim financing for project sponsors that proceed without sufficient loan funds from the Department, when a project sponsor has financed construction through other means prior to availability of funding from the Department and for which the sponsor has received prior written authorization from the Department;

(g) No change.

(h) Allowance for costs under subsection 62-503.300(5), F.A.C. The purchase of a domestic wastewater facility being acquired if the Department has issued a notice of violation because the facility exceeds permit limits for nutrients and the non-compliance will be corrected as a result of the project,

(i) Technical services for specialized field studies and tests such as soil and hydrogeological tests, geotechnical evaluations, sewer system evaluations, archaeological surveys and value engineering services performed by a SAVE International Certified Value Specialist. See the SAVE International web site at http://www.value-eng.org/ for more information. surveys, wetland delineations, environmental impact statements, and appraisals for eligible land;

(j) Costs for planning and design under design/build procurement; and

(k) Project costs, excluding operational costs, to implement best management practices for agricultural nonpoint source water pollution control;.

(l) For sewer system evaluation studies, technical services for generating a sewer system evaluation survey, inflow corrections including replacing clean out caps, installing seals and dishes for manholes, and the televising/cleaning of lines including point repairs as necessary;

(m) For I/I rehabilitation loans, construction and related procurement used to implement the Department approved planned activities for an I/I rehabilitation project;

(n) Preparation and implementation of an asset management plan. To be eligible for reimbursement, the asset management plan must meet the requirements of subsection 62-503.700(7), F.A.C.; and

(o) Constructed wetlands to be used for the treatment of domestic wastewater.

(3) Ineligible Unallowable project costs.

(a) Acquiring all or part of existing stormwater, wastewater, or water pollution control management systems, except as allowed in paragraph 62-503.300(2)(h), F.A.C.;

(b) Project facilities or activities not included within the Department approved project scope;

(d) Costs, such as for pending construction claims, yet to be incurred at after the project closeout has been conducted time of the on-site administrative action taken by the Department to document project completion, final project costs, and adequacy of sponsor’s project files;

(e) No change;

(f) Water pollution control systems or components thereof, under a leveraged loan, that service a private use to the extent that the tax status of bonds issued by the FWPCFC Florida Water Pollution Financing Corporation is jeopardized; and

(g) Site Aacquisition of sewer rights-of-way, sewage treatment plant sites, sanitary landfills, and other site acquisition that is not necessary for and integral to the treatment process as described in section 212(2)(A) of the Act; residuals disposal areas.

(h) Service connections on private property unless the project qualifies for funding as a result of section 319 of the Act;

(i) Costs incurred before execution of a loan agreement unless the Department has provided written authorization to incur costs;

(j) Any portion of a project funded by an executed agreement from any regional, state, or federal funding agency; and

(k)(h) Any other cost not listed as allowable under subsection (2) above.

(4) No change.

(5) Allowance.

(a) An allowance for project administration, planning, and engineering costs shall be included in the approved project cost. The allowance is initially based on estimated costs of construction and shall be adjusted to as-bid costs after all contracts are bid. For design/build projects, the allowance shall be thirty percent of the allowance calculated under paragraph 62-503.300(5)(c), F.A.C., below.

(b) Sponsors shall not be eligible to receive an allowance for the same work funded as an allowance under other federal and state grants or appropriations.

(c) The maximum allowance shall be established as follows: (25.00 – Natural Logarithm of construction costs) times the construction costs divided by 100.

(d) An allowance shall be disbursed on request of the sponsor as follows:

1. For a construction funding agreement under a direct loan or an allowance agreement under a leveraged loan, the allowance shall be disbursed in two (2) draws. Up to seventy percent (70%) of the estimated allowance shall be disbursed after a loan agreement is signed. The remainder of the allowance shall be disbursed after all procurement contracts are executed and shall be adjusted to reflect as-bid costs. For direct loans, if the sponsor agrees to an allowance adjustment once all contracts have been bid, the Department shall disburse the entire estimated allowance after a loan agreement is signed.

2. For a preconstruction funding agreement, the allowance shall be disbursed in three draws. Up to twenty percent (20%) shall be disbursed after a loan agreement is signed. Up to fifty percent (50%) of the allowance shall be disbursed after the planning documentation under Rules 62-503.700, and 62-503.751, F.A.C., has been completed and accepted. The remainder of the allowance shall be disbursed after all procurement contracts are executed and shall be adjusted to reflect as-bid costs. For preconstruction loans that are being rolled into a direct loan for construction, if the sponsor agrees to an allowance adjustment once all contracts have been bid the Department shall disburse the entire estimated allowance amount after acceptance of the plans and specifications or completion of the request for proposals.

(6) Loan Service Fee. A loan service fee shall be paid by the project sponsor in an amount not to exceed two percent of the total loan amount less the portion of the loan for capitalized interest. The fee percentage shall be determined for each fiscal year upon adoption of the intended use plan at a public hearing held by the Department. The loan service fee shall not be included in the principal of the loan. The loan service fee shall be estimated at the time of execution of the loan agreement and shall be revised with any increase or decrease amendment. The loan service fee shall be based on actual project costs and assessed in the final loan amendment. The loan recipient shall pay the loan service fee from the first available repayments following the final amendment.

(7) Refinancing. The Department shall not refinance a State Revolving Fund loan.

(5)(8) Financing rate.

(a) The financing rate shall be calculated as follows except that the minimum financing rate shall be 0 percent and the maximum financing rate shall be the market rate:

FR = MR – 4 + (4/(1+(100/AI)3)) – 1/Log(P)

Where:

FR = financing rate

MR = Market Rate

AI = Affordability Index

P = Population served or to be served by the sponsor

(affordability index divided by 200) times When bond proceeds are available for leveraged loans, the market rate shall be the most recent rate at which bonds were sold by the FWPCFC. When bond proceeds are not available, the market rate for interest shall be as established using the Thomson Publishing Corporation’s “Bond Buyer” 20-Bond GO Index The maximum financing rate shall be limited to eighty percent the market rate. The market rate (20-Bond GO Index), 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.

(b) The financing rate shall be fixed for the principal amount of the loan and for the duration of the loan repayment period. The financing rate shall be established separately for each amendment resulting from a project cost increase or new segment. The Affordability Index shall be adjusted when a design loan is rolled over to a construction loan to account for changes in project service area or for changes in the census data, but shall remain the same for all construction amendments. The financing rate shall be further adjusted by each of the following for which the project qualifies:

1. Projects with a Department accepted and implemented asset management plan that meets all requirements in subsection 62-503.700(7), F.A.C., shall be eligible for a reduction in the financing rate if implementation has been verified at least three (3) months prior to the first scheduled repayment. The financing rate shall be as calculated in paragraph 62-503.300(5)(a), F.A.C., minus 0.1.

2. Projects that qualify as Innovative/Alternative projects as defined in subsection 62-503.200(20), F.A.C., shall also be eligible for a reduction in the financing rate. For projects that are entirely Innovative/Alternative projects, the financing rate shall be as calculated in paragraph 62-503.300(5)(a), F.A.C., minus 0.1. For projects with components that do not qualify as Innovative/Alternative projects, the financing rate reduction shall be 0.1 times the Innovative/Alternative projects component cost divided by the total as-bid construction cost. For these projects the financing rate reduction shall be applied only after the project has been bid.

3. Projects that include a requirement for Davis Bacon wage rates as required in 29 C.F.R. Part 5, Subpart A (7-3-2013 Edition), hereby incorporated by reference, shall be eligible for a reduction in the financing rate of 0.25.

4. Projects that include a requirement for Buy American as required in 40 C.F.R. Part 35, Subpart E or 2 C.F.R. Part 176, Subpart B (7-3-2013 Edition), hereby incorporated by reference, shall be eligible for a reduction in the financing rate of 0.75.

(b) For non-capitalization grant project loans made after June 30, 1997, the financing rate has two parts, a loan interest rate component and a grant allocation assessment rate component. The Department shall determine the proportions of the components annually.

(c) The financing rate for a non-governmental sponsor of a project that qualifies for funding as a result of section 319 or 320 of the Act shall be fifty (50%) percent of the market rate as established in paragraph (5)(a), above.

(9) renumbered (6) No change.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 4-17-89, Amended 12-4-91, 2-23-94, Formerly 17-503.300, Amended 1-4-98, 7-1-99, 2-6-02, 7-29-04,_________.

62-503.430 Loan Applications and Agreements.

(1) General.

(a) A complete loan application, Form 62-503.900(2), State Revolving Fund Loan Program for Point Source Water Pollution Control Loan Application, effective (effective date of rule), or Form 62-503.900(3), State Revolving Fund Loan Program for Non-Point Source Water Pollution Control Loan Application, effective (effective date of rule), shall be submitted to the Department within 120 days after the project is listed on the fundable portion of the priority list. Both of these forms are hereby incorporated by reference. The project sponsor may incorporate into the loan application, by reference, any information previously submitted to the Department. These forms are available from the Department’s Clean Water State Revolving Fund Program, 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-2400, or at http://www.flrules.org/Gateway/?????????.

(b)(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 negotiated written agreement. Loan agreements shall be offered to project sponsors for projects listed on the fundable portion in the order of receipt of a complete loan application irrespective of priority score, project rank, or qualification for the small-community reserve funds.

(c)(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 a project is added to the fundable portion, the project shall be removed from the priority list at the next scheduled public meeting, unless mitigating circumstances are presented to the Department by the beginning of that meeting that document why the application was not submitted or why the agreement was not executed by the appropriate deadline. shall be subject to placement on the bottom of the contingency portion at the next priority list management hearing.

(d) For loans to implement preconstruction projects, all loan agreement prerequisites shall be met upon submittal of a complete loan application.

(e) Financial hardship loans shall not be available for loan agreements awarded with funds from the FWPCFC using bond proceeds.

(f) The Department shall have the primary responsibility for drafting the loan agreement and setting settling its terms. The loan agreement shall have reasonable and necessary terms to meet program requirements. Loan agreement covenants may vary for direct and leveraged loans. Projects being funded as a result of different sections of the Act or as a result of different sources of pledged revenues may have different loan agreement provisions covenants.

(2) Financing Rate.

(a) The financing rate shall be fixed for the principal amount of the loan and for the duration of the loan repayment period. For segmented projects the financing rate shall be established separately for each amendment in accordance with subsection 62-503.300(8), F.A.C.

(b) The affordability index shall remain the same for all construction amendments. The affordability index may be adjusted when a loan is rolled over from preconstruction to construction to account for changes in project service area.

(2)(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) No change.

(b) Pledged revenues for projects sponsored by other than a local governmental agency local government 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 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 mortgages, liens or other encumbrances on the title to the property that would limit the Department’s ability to sell the property in case of default on the loan.

(4) renumbered (3) No change.

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

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

(a) through (b) No change.

(6)(7) Disbursements. Disbursements to the project sponsor shall be for allowable invoiced costs. For direct loans, disbursements shall be for costs paid or incurred and an allowance. For loans made from bond proceeds, disbursements shall be only for costs paid or incurred. Disbursements shall be subject to the following requirements:

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

(b) through (c) No change.

(d) Disbursements draws shall be subject to the limitations imposed by paragraph 62-503.300(5)(d), F.A.C.

(7)(8) Repayments. The project sponsor shall begin repaying a loan no later than the date scheduled under the loan agreement. The scheduled date shall be six (6) months after the estimated completion date or, for projects using interim financing to complete the project prior to receiving a SRF loan refinancing loans or segmented projects, six (6) months after the first available interim loan payoff date estimated for the final disbursement by the Department.

(8)(9) Loan Repayment Term.

(a) Construction loan and preconstruction Lloan repayment periods for projects sponsored by a local governmental agency local government shall be limited to twenty (20) years or the useful life of the project, whichever is less. Loan repayment periods shall be extended to a maximum of thirty (30) years as allowed under the Act and Section 403.1835, F.S., for projects to benefit a small community with a financial hardship.

(b) Repayment periods for loans sponsored by other than a local governmental agency local government shall be limited to twenty (20) ten (10) years or the useful life of the project, whichever is less.

(9)(10) Annual Certification. No later than three (3) months prior to the first loan repayment and annually thereafter until the final loan repayment is made, the project sponsor’s authorized representative or its chief financial officer shall submit a certification that:

(a) through (b) No change.

(d) For loans awarded after (effective date of rule), that the revenue generation system is in conformance with subparagraph 62-503.700(2)(h)3., F.A.C, hereby incorporated by reference. Insurance, including that issued through the National Flood Insurance Program authorized under 42 U.S.C. secs. 4001-4128, when applicable, in effect for the facilities generating the pledged revenues, adequately covers the customary risks to the extent that such insurance is available.

(10)(11) Remedies for Defaults. Remedies for delinquent loan repayment and other events of default shall be limited to those set forth in loan agreements. Events of default shall include noncompliance with any of the terms of a 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, and every such right and power may be exercised as often as may be deemed expedient.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 4-17-89, Amended 12-4-91, 6-21-93, 2-23-94, Formerly 17-503.430, Amended 1-4-98, 7-1-99, 2-6-02, 7-29-04,__________.

62-503.500 Funds Reserved for Specific Purposes.

(1) No change.

(2) Service fee. Service fees collected for loan program administration under Rule 62-503.400, F.A.C., shall be deposited in the Department's Grants Trust Fund. Fee proceeds, including investment earnings, shall be reserved to pay for the administration of the financial assistance programs of the Bureau of Water Facilities Funding.

(2)(3) Grant allocation assessment. Grant allocation assessments shall be deposited in the Grants and Donations Trust Fund. Grant allocation assessments and earnings that have been released from any lien securing any bonds thereon shall be used solely for making wastewater management project grants to financially disadvantaged small communities under sSection 403.1838, F.S.

(3) Innovative/Alternative project reserve. If required in the federal capitalization grant, funds shall be reserved for Innovative/Alternative projects as defined in subsection 62-503.200(20), F.A.C., hereby incorporated by reference, if sufficient Innovative/Alternative projects are submitted to use the funds.

(4) Funds reserved for principal forgiveness. If required in the federal capitalization grant, funds shall be reserved for providing loan principal forgiveness to projects that qualify for grants under section 403.1838, F.S. The percentage of the loan principal forgiven shall be determined as described in subsection 62-505.350(5), F.A.C., hereby incorporated by reference, and shall be applied at the time each disbursement is made.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 4-17-89, Amended 12-4-91, 2-23-94, Formerly 17-503.500, Amended 1-4-98, 7-1-99, 2-6-02, 7-29-04,_________.

62-503.600 Priority List Information.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 4-17-89, Amended 12-4-91, 2-23-94, Formerly 17-503.600, Amended 12-26-96, 1-4-98, 7-1-99, 2-6-02, 7-29-04, Repealed_________.

62-503.700 Planning, Design, Construction, and Procurement Requirements.

(1) General. The requirements of subsections (2) through (6) below, where applicable, shall be met for all projects.

(a) Federal regulations incorporated by reference shall be read so that the terms "United States," "federal," "EPA," and "officials of EPA" mean "the Department state" unless the context clearly indicates otherwise. These federal regulations also shall be read so that "grants" means "loans."

(b) Capitalization grant projects shall be subject to the requirements of specific federal cross-cutting authorities identified in the loan application Form 62-503.900(2), F.A.C.

(2) Project planning documentation shall include the following:

(a) No change.

(b) A description of the existing and recommended facilities, estimated capital costs, and estimated operation and maintenance costs, if applicable.

(d) A cost comparison of at least three two alternatives, except for projects in paragraph (e), below. Alternatives may include no action.

(e) For projects qualifying for funding as a result of section 319 or section 320 of the Act, documentation of conformance with the Act, as incorporated by reference in subsection 62-503.200(1), F.A.C., is required. Acceptable documentation includes at least one of the following:

1. Conservation practices listed in the USDA Natural Resource Conservation Service’s “Field Office Technical Guide, Section IV.” These conservation practices are available on the internet at http://efotg.sc.egov.usda.gov/efotg_locator.aspx and are specific to the county in which the work is to be accomplished.

2. Best management practices established in Florida statute or rule.

3. Best management practices and related activities addressed in the Department’s “Florida Nonpoint Source Management Program Update.”

3.4. Agricultural practices implemented to carry out a nutrient management plan prepared by the USDA National Resource Conservation Service or a Florida licensed Professional Engineer.

5. Remedial action plan for brownfield clean-up.

(f) No change.

(g) The public participation process used to explain the project and the financial impacts to the public affected parties.

1. When a project is eligible for funding as a result of section 212 of the Act, the public participation process shall include the project sponsor’s public meeting held before the project sponsor’s acceptance of the planning recommendations. The public meeting shall provide for public participation in the evaluation of project alternatives and shall inform the public of the capital cost of the proposed project and the long term financial impacts on the customers. Notice of the public meeting shall be in accordance with local requirements or 14 days whichever is greater.

2. When an agricultural practice identified in subparagraphs (e)1. through 4. above, is selected for implementation on the project sponsor’s property and it is eligible for funding as a result of section 319 or section 320 of the Act, the public participation requirement shall be deemed to have been met as a result of the environmental review process in Rule 62-503.751, F.A.C.

3. No change.

(h) Financial feasibility information addressing the following:

1. The sources and amounts of revenues to be dedicated to repaying the loan and the expenses, charges, and liens against or to be paid from such dedicated funds or revenues. The information shall demonstrate the ability to repay the loan with a margin of safety. Examples of a margin of safety are as follows:

a. Pledged revenue coverage ratio of at least 1.15 for projects sponsored by a local government agency;

b. A current term debt and capital lease coverage ratio of at least 1.15, as explained in subsection 62-503.300(6) 62.503.300(10), F.A.C., for projects sponsored by other than a local government agency.

2. Capital improvements that will be financed from the same funds or revenues dedicated to repaying the loan. For projects qualifying for funding as a result of section 212 of the Act, information must include capital improvements that will be implemented over at least a two-year period commencing with the first semiannual loan repayment.

3. The proposed system of charges, rates, fees, and other collections that will generate the revenues to be dedicated to loan repayment. The rate structure of the revenue generation system shall be approved at least six months before the first State Revolving Fund loan repayment is due or before the project closeout, whichever occurs first. The rate structure shall be implemented timely to ensure the generation of sufficient revenues dedicated to loan repayment and may be implemented in phases to the extent timely and sufficient revenue generation will be accomplished. The revenue generation system shall be revised, as necessary, to satisfy the pledged revenue requirements of the loan.

(i) An updated Rrequest for Iinclusion to include the schedule, scope, and costs for implementing the recommended facilities or activities and any changes to the census tracts to account for project changes if necessary.

(j) An adopting resolution or other action establishing a commitment to implement the planning recommendations.;

(k) For a project, or its components, that is to be listed as an Innovative/Alternative project, documentation of how the project is categorically Innovative/Alternative or a business case detailing how the project or its components meet the federal requirements for Innovative/Alternative projects in Attachment 2 of EPA’s “Procedures for Implementing Certain Provisions of EPA’s Fiscal Year 2012 Appropriation Affecting the Clean Water and Drinking Water State Revolving Fund Programs”, March 2012.

(l) The electronic submittal of planning documentation is encouraged.

(3) Plans and Specifications. The project sponsor shall submit biddable plans and specifications conforming to the planning documentation described in subsection 62-503.700(2), F.A.C., for projects involving construction. For design/build projects the sponsor shall submit a copy of the request for qualifications, or requests for proposals, and the preliminary design report submitted for permitting. Final permitted plans and specifications shall be submitted for each component of the project. Electronic submittals are encouraged.

(4) No change.

(5) Permit. The project sponsor shall submit 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. one or more of the following permitting related conditions, as necessary, exist for the project:

(a) The use of a general permit under Rule 62-620.705, F.A.C., has been authorized;

(b) An intent to issue a permit under Rule 62-620.510, F.A.C., has been established;

(d) The Department has determined that its authorization is not required prior to construction or.

(e) An intent to issue a permit for construction under Part IV, Chapter 373, F.S., has been established.

(6) Procurement must be in conformance with 40 CFR 31.36, (July 1, 2011), hereby adopted and incorporated by reference. (Reference: 40 CFR 31.36). When procuring property and services under a SRF loan, a project sponsor shall follow the policies and procedures it uses for procurements from its non-SRF funds provided that the procurement conforms to applicable federal, State and local laws and regulations, and the following requirements:

(a) All procurement transactions shall be conducted in a manner providing full and open competition. The use of statutorily or administratively imposed in-State or local geographical preferences in the evaluation of bids or proposals is prohibited. For small purchases that do not cost more than $100,000, price or rate quotations shall be obtained from a minimum of two qualified sources.

(b) Construction contractors shall be selected according to a recognized procurement method such as formal advertised competitive bidding, competitive best value or competitive qualifications based proposals, or noncompetitive proposals., Delivery methods shall be design/bid/build, design/build agreements or construction manager at risk agreements.

(d) Competitive proposals shall be solicited from an adequate number of qualified sources to ensure open competition. The loan recipients shall have a method for conducting technical evaluations of the proposals received and for selecting awardees.

1. For the competitive best value selection method of procurement, awards shall be made to the responsible firm whose proposal is most advantageous to the loan recipient, with price and other factors considered.

2. For the competitive qualifications based selection method of procurement, statements of qualifications shall be solicited from an adequate number of sources. Statements of qualifications received from at least three responsible vendors shall be considered adequate unless it is determined by the loan recipient that it is in its best interest to proceed with the procurement having received less than three proposals. Statements of qualifications shall be evaluated based on the request for qualifications. Awards shall be made to the responsive and responsible vendor whose statement of qualifications is deemed to be most advantageous by the loan recipient.

Requirements for the competitive proposals method of procurement shall be as follows:

1. Proposals shall be solicited from an adequate number of qualified sources to assure open competition.

2. Loan recipients shall have a method for conducting technical evaluations of the proposals received and for selecting awardees;

3. Awards shall be made to the responsible firm whose proposal is most advantageous to the loan recipient, with price and other factors considered.

(e) No change.

(f) Design/build and construction manager at risk (CMR) procurement:

1. Competitive best value or competitive qualifications based selection shall be used as the selection process for design/build procurement. Requests for proposals shall be used in the selection process.

a. Requests for competitive best value or competitive qualifications based selection proposals shall be submitted to the Department prior to advertising for a determination of compliance with loan program requirements.

b. The proposal solicitation shall describe the work eligible for a loan, the requirements with which the successful respondent shall comply, and the evaluation process to be used in selecting the successful respondent.

c. Advertising shall include announcement in a publication having general circulation on a statewide basis, in a construction trade journal, in a professional journal, or in an electronic plan room.

d. The time allowed for development of proposals shall be commensurate with the complexity and extent of the work and with the extent of the conceptual documents provided with the request for proposals.

e. The project sponsor shall demonstrate that the competition solicited is sufficient for the complexity and extent of the work.

f. The design/build team will be identified as part of awarding the contract. If the construction contractor is not identified as part of the award, procurement shall follow steps to ensure a competitive process as described in paragraphs 62-503.700(6)(a) through 62-503.700(6)(d), F.A.C.

2. Requests for proposals shall be used in the selection process for CMR procurement. The request for proposals shall describe the work eligible for a loan, the requirements with which the successful respondent shall comply, and the evaluation process to be used in selecting the successful respondent.

a.3. Advertising shall include announcement in a publication having general circulation on a statewide basis, in a construction trade journal, in a professional journal, or in an the electronic plan room.

4. through 7 renumbered b. through e. No change.

f. Work performed directly by the CMR shall be limited to no more than 50% of the guaranteed maximum price unless a higher percentage is requested and approved by the Department. For any construction work that will be performed by the CMR, bids or request for proposals shall be submitted to and reviewed by the sponsor or any other neutral party as determined by the sponsor to avoid a conflict of interest.

(g) through (h) No change.

(i) Loan recipients are encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost. Loan recipients are also encouraged to complete water efficiency and energy audits to minimize operational costs.

(j) No change.

(k) Loan recipients shall maintain records sufficient to detail the significant history of a procurement. These records shall include the following: Rrationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.

(l) Loan recipients alone shall be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements.

(m) Retention of all required records for five (5) three (3) years after loan recipients or subloan recipients make final payments and all other pending matters are closed.

(n) For construction or facility improvement contracts or subcontracts exceeding the simplified acquisition threshold, the Department shall will accept the bonding policy and requirements of the loan recipient when the Department has made a determination that the Department’s interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows:

1. through 3. No change.

(o) A loan recipient’s contracts shall contain provisions for:

1. Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms;

2. Such sanctions and penalties as may be appropriate; and

3. Termination for cause and for convenience by the loan recipient including the manner by which it shall be effected and the basis for settlement.

4. Access by the loan recipient, the Department, or any of their duly authorized representatives to any books, documents, papers, and records of the contractor that are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions.

5. Incorporating the Department’s Supplementary Conditions into its bid or request for proposals documents. These Supplementary Conditions include, but are not limited to, conditions contain the following provisions:

a. Equal Employment Opportunity compliance;

b. Compliance with all applicable standards, orders, or requirements issued under section 306 of the Clean Air Act, section 508 of the Clean Water Act, and Executive Order 11738; and

c. Contracting with small and minority firms, women’s business enterprise, and labor surplus area firms (if applicable).

(7) Asset Management Plans. Loan recipients are encouraged to implement an asset management plan to promote long term sustainability of the system. To be accepted for the financing rate adjustment and to be eligible for reimbursement, an asset management plan must be adopted by ordinance or resolution and written procedures must be in place to implement the plan and it shall be implemented timely. The plan must include each of the following:

(a) Identification of all assets within the project sponsor’s system;

(b) An evaluation of the current age, condition, and anticipated useful life of each asset;

(d) The cost to operate and maintain all assets;

(e) A capital improvement plan based on a survey of industry standards, life expectancy, life cycle analysis, and remaining useful life;

(f)An analysis of funding needs;

(g)An analysis of population growth and wastewater or stormwater flow projections, as applicable, for the sponsor’s planning area, and a model, if applicable, for impact fees; commercial, industrial and residential rate structures; and industrial pretreatment fees and parameters;

(h) The establishment of an adequate funding rate structure;

(i) A threshold rate set to ensure the proper operation of the utility, if the sponsor transfers any of the utility proceeds to other funds, the rates must be set higher than the threshold rate to facilitate the transfer and proper operation of the utility; and

(j) A plan to preserve the assets; renewal, replacement, and repair of the assets as necessary, and a risk-benefit analysis to determine the optimum renewal or replacement time.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 4-17-89, Amended 8-1-90, 12-4-91, 6-21-93, 2-23-94, Formerly 17-503.700, Amended 1-4-98, 7-1-99, 2-6-02, 7-29-04,_________.

62-503.751 Environmental Review.

(1) General.

(a) The Department shall perform an environmental review for each project to be funded. The environmental review shall evaluate establish the environmental significance of a proposed project and whether the planning of the project meets the requirements of this chapter rule. The environmental review also shall establish the Department’s intention to make funding available for a project after the project sponsor has met the applicable requirements of this rule. The results of the Department’s environmental review for each project shall be issued as an environmental information document which shall be valid for five (5) years from the date of issue, after such time, the document is no longer valid unless a Florida Reaffirmation Notice, pursuant to subsection 62-503.751(5), F.A.C. is written by the Department. The different environmental information documents are described in subsections (2) through (5) below. A notice of availability of an environmental information document shall be published in the Florida Administrative Register on the Department’s website www.dep.state.fl.us (under “Official Notices” or similar link) to announce the results of the Department’s environmental review. The notice of availability shall include instructions about the procedures for accessing the project information and the Department’s findings. The Department shall provide a thirty (30) day period, commencing as of the date of the notice of availability, for public comment about the environmental impacts of proposed projects. Written comments from the public shall be considered by the Department before approving a project for funding if postmarked or delivered within the thirty (30) day comment period to the Department.

(b) No change.

(2) Florida Categorical Exclusion Notice (FCEN). The Department shall issue aA FCEN shall be used for certain projects that are not expected to generate controversy over potential environmental effects. A FCEN shall not be used when there are documented environmental objections to a project before the local governmental agencygovernment adopted the planning recommendations provided that such objections have a basis in statute, regulation, or ordinance.

(a) No change.

(b) Projects potentially eligible for categorical exclusion are:

1. Rehabilitation of existing water pollution control system components or replacement of structures, materials or equipment;

2. Water pollution control systems that do not change the existing discharge point or permitted pollutant concentration limits and that do not involve acquisition of undisturbed land;

3. Water pollution control systems that serve less than 10,000 people in unsewered communities that involve self-contained individual or cluster systems providing both treatment and disposal of wastewater that will take place near the buildings from which the wastewater is to be discharged;

4. Water pollution control systems in areas where streets have been established, underground utilities installed, or building sites excavated; and

5. Treatment plant upgrades that are solely to enable reclaimed water reuse if the treatment level enables unrestricted public access reuse.

(3) Florida Finding of No Significant Impact (FFONSI). The Department shall issue aA FFONSI shall be used when a project sponsor proposes a project not categorically excluded from a detailed environmental review and not requiring a Florida Environmental Impact Statement. In issuing a FFONSI, the Department shall:

(a) Record the basis for the decision to provide financial assistance for the project, addressing:

1. The environmental consequences of the project;

2. The purpose and the need for the project;

3. The alternatives, including no action, and the cost considerations for the project;

4. Any environmental enhancement measures to be implemented;

5. The public participation process;

6. The results, if available, of the State Clearinghouse Review; and

7. Compliance with relevant rules of the Department.

(b) Consider public comments about environmental impacts of a project if the comments are received within 30 days after the date of posting of the notice of availability on the Department’s website.

1. No information is received about previously unconsidered adverse environmental impacts;

2. Information is received about previously unconsidered adverse environmental impacts and one of the following occurs:

a. The objections are either without a basis in statute, regulation, or ordinance or the objections are resolved;

b. A re-evaluation of the project is made as a result of the comments and the Department confirms the original decision or requires environmental enhancement measures before implementing the project; or

c. The FFONSI is rescinded.

(4) Florida Environmental Impact Statement (FEIS). A FEIS and a Florida Record of Decision (FROD), as required in 40 CFR Part 35 Subparts K & L, shall be used for a project for which there is an adverse direct or indirect impact on land use and population patterns, the quality of the environment, cultural or environmental resource areas, or the habitats of endangered or threatened species. A FEIS and FROD also shall be used when there is unresolved public objection controversy over the environmental impacts of a project provided that the objections to the project have a basis in statute, regulation, or ordinance. A FEIS shall be prepared by the Department or, at the direction of the Department and in accordance with the Consultants’ Competitive Negotiation Act, sSection 287.055, F.S., by others with no conflicting interest in the outcome. In completing the environmental review, the Department shall:

(a) through (f) No change.

(g) Announce the funding eligibilities using a FROD and consider public comments about environmental impacts if received during the thirty (30) day period beginning on the date of posting of the notice of availability in the Florida Administrative Register on the Department’s website; and

(h) No change.

(5) Florida Reaffirmation Notice (FRAN). A FRAN shall be used to establish the Department’s continuing intention to make funds available for unimplemented projects, the planning for which was previously documented as accepted by the Department in a FCEN, FFONSI, FROD, or analogous documents issued by EPA, or amendments to any of the foregoing that are no longer valid after five (5) years have elapsed since issuance. In issuing a FRAN, the Department shall:

(a) No change.

(b) Consider public comments about changed conditions altering the environmental impacts since the previous FCEN, FFONSI, FROD, or analogous documents issued by EPA, or amendments to any of the foregoing. Comments shall be considered if received during the thirty (30) day period beginning on the date of posting of the notice of availability of the FRAN in the Florida Administrative Register on the Department’s website.

(6) No change.

(7) Project Revision Memoranda (PRM). For a project that requires modifications to the selected alternative that do not alter its environmental effects, a PRM shall be written by the Department to document the changes.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 7-29-04, Amended________.

62-503.800 Audits Required.

(1) Federal or State Audit Required.

(a) In the event that the project sponsor expends $500,000 or more in federal awards in its fiscal year, the project sponsor must have a single or program-specific audit conducted in accordance with the provisions of OMB Circular A-133, as published in the Federal Register, June 26, 2007, hereby adopted and incorporated by reference. This document is available from the Department’s Clean Water State Revolving Fund Program, 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-2400,or electronic versions are available at http://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2007.pdf or http://www.flrules. org/Gateway/?????????. Beginning with the fiscal year in which an agreement for a loan is executed and continuing for each year thereafter until the loan is retired, the local government shall submit annual audit reports to the Department. Audits shall address the local government's financial condition; accounts of water and sewer systems or other sources generating the pledged revenues; loan disbursements received, if any; project expenditures, if any; and compliance with loan agreement covenants. The local government shall cause its auditor to notify the Department immediately if anything comes to the auditor's attention during the annual examination of the local government's records that would constitute a default under the loan agreement. Reports shall be submitted within one year after the end of each audited fiscal year.

(b) Section 215.97, F.S., and the rules adopted pursuant to that section by the Department of Financial Services or Auditor General impose audit requirements on the project sponsor and sub-recipients based on designated thresholds for expenditures. Each agreement entered into pursuant to this rule chapter shall include the audit requirements applicable to the project at the time the agreement is executed.

(2) Within the later of 12 months after the effective date of a loan agreement amendment establishing final project costs or the date upon which deposits of pledged revenues under subsection 62-503.430(3), F.A.C., are first required, the project sponsor shall submit to the Department a report for a state project-specific audit of the loan related revenues and expenditures. Audits of both direct loans and leveraged loans shall address the project sponsor’s financial condition; accounts of the sources generating the pledged revenues; loan disbursements received, and project expenditures; and compliance with loan agreement covenants. The project sponsor shall cause its auditor to notify the Department immediately if anything comes to the auditor's attention during the examination of the records that would constitute a default under the loan agreement. The audit findings shall set aside or question any costs that are unallowable under this rule chapter. A final determination of whether such costs are allowed shall be made by the Department. The above-described state project-specific audit shall be required unless the only disbursements under the loan agreement are for allowances, loan service fee, and loan repayment reserve under a preconstruction loan. The definition of a state project-specific audit may be found in Section 215.97, F.S.

(2)(3) For your information, pursuant to Section 215.97, F.S., the State is authorized to The Department may conduct an audit within five (5) three years following project closeout close-out if loan covenant compliance problems have been noted; record keeping deficiencies are noted during close-out; the project involves unusual or questioned costs; or other justification for conducting the audit becomes apparent.

(a) The Department shall give the project sponsor advance notice of any audit.

(b) The Department shall prepare a written report on each audit and shall provide a copy of the report to the project sponsor. The project sponsor must respond, in writing, to the findings and recommendations within 30 days after receipt of a written request from the Department.

Rulemaking Specific Authority 403.1835(10), 403.1837(9) FS. Law Implemented 403.1835, 215.97 FS. History–New 4-17-89, Amended 12-4-91, 2-23-94, Formerly 17-503.800, Amended 1-4-98, 2-6-02, 7-29-04,_________.

62-503.850 Exceptions to Program Requirements.

(1) The Department shall consider a requests for an exceptions to the requirements of this chapter rule if the exception does not conflict with state or federal law or federal regulations.

(2) No change.

Rulemaking Specific Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 4-17-89, Formerly 17-503.850, Amended 7-29-04,_________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Mark Thomasson, Director, Division of Water Resource Management

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Herschel T. Vinyard Jr., Secretary, Department of Environmental Protection

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 28, 2013

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: July 20, 2012

Document Information

Comments Open:: 10/2/2013
Summary:: Rule 62-503.200, F.A.C., is being amended to incorporate new definitions and to revise existing definitions. New definitions for “Inflow/Infiltration project,” “planning loan,” “design loan,” and “construction loan” are proposed to provide clarification on the requirements of each type of loan available. New definitions have also been included for “Asset Management Plan”, “Innovative/Alternative project”, “segment cap”, “septic tank failure”, “waiting portion”, and loan service fee. Rule 62-...
Purpose:: Amendments to Chapter 62-503, F.A.C., are proposed to clarify administrative procedures, delete unnecessary or redundant language, better define allowable and unallowable costs, restructure the priority system, and to improve the methodology for calculating the financing rate. Changes to the project priority system are being proposed so that projects addressing the Department’s core mission will receive the highest priority. These revisions would align the program’s priority system with the ...
Rulemaking Authority:: 403.1835(10) and 403.1837(9) FS.
Law:: 403.1832, 403.1835, 403.031, 403.1837, and 215.97 FS.
Contact:: Tim Banks at 850-245-8360 or email timothy.banks@dep.state.fl.us
Related Rules: (9): 62-503.200. Definitions; 62-503.300. General Program Information; 62-503.430. Loan Agreements; 62-503.500. Funds Reserved for Specific Purposes; 62-503.600. Priority List Information; More ...