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 adjust ....

 

DEPARTMENT OF ENVIRONMENTAL PROTECTION

RULE NOS.:RULE TITLES:

62-503.200Definitions

62-503.300General Program Information

62-503.430Loan Applications and Agreements

62-503.500Funds Reserved for Specific Purposes

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

62-503.751Environmental Review

62-503.800Audits Required

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 adjust how the financing rate and financing rate reductions are applied to loans. Included are changes necessary to reflect changes to the priority ranking of projects made in Section 22 of Ch. 2020-150, Laws of Florida.

SUMMARY: Rule 62-503.200, F.A.C., is being amended to incorporate new definitions and to revise existing definitions. New definitions for “continuing contract,” “cost-effective,” and “fiscal sustainability plan,” have also been included. It includes reference to an amended form RFI 1, Request for Inclusion on the Clean Water Priority List. Rule 62-503.300, F.A.C., clarifies documentation requirements, revises the notice deadline for public meetings, adds Department acceptance of processes for design or construction loans, gives examples of documented acute or chronic public health hazards, extends green projects to include other sanitary sewer overflow projects with respect to priority scoring, includes projects installing wastewater transmission facilities to be constructed concurrently with construction projects occurring within or along a transportation right-a-way for priority scoring, adds land and wastewater system acquisition to timely submitted project for priority scoring, removes unnecessary priority list development requirements, provides more concise language regarding allowable costs, clarifies allowable and ineligible costs, applies a fixed financing rate to amendments of an agreement, and details requirements for financing rate reductions. It includes a revision to make the interest rate "floor" 0.2 percent instead of 0 percent and revise the interest rate reductions for compliance with American Iron and Steel and Davis-Bacon wage rates to a combined total of 0.5 percent. It adds a financing rate reduction for sponsors that fund a nontraditional project. It adds a verification of the debt coverage through a certified public accountant for non-governmental sponsors. Revisions to Rule 62-503.430, F.A.C., include certification of a loan recipient that the loan recipient is not on the governmentwide exclusion list in System for Award Management (SAM), adds details regarding disbursements, sets repayment periods and removes annual certification requirements that are now obsolete. It includes a reference each to amended Form Application 1, State Revolving Fund Loan Program for Point Source Water Pollution Control Loan Application and Form Application 2, State Revolving Fund Loan Program for Nonpoint Source Water Pollution Control Loan Application. The proposed changes to Rule 62-503.500, F.A.C., replace the term innovative/alternative with green. 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 and list requirements for fiscal sustainability plans. Revisions to Rules 62-503.751 and 62-503.800, 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.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The loan program is voluntary and not a regulatory program. Participation is not mandatory. Only local sponsors seeking loans must follow the program requirements. Because these are no adverse impacts and no regulatory costs, a Statement of Estimated Regulatory Costs is not required.

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), F.S.

LAW IMPLEMENTED: 403.1832, 403.1835, 403.031, 403.1837, 215.97, F.S.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

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: Gregory Alfsen at [phone] or email [e-mail].. 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: Gregory Alfsen at [phone] or email [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

62-503.200 Definitions.

For purposes of this rule chapter:

(1) “Act” means the Federal Water Pollution Control Act, 33 USC § 1251 et seq., as amended, June 2014 November 2002, by the Water Resources Reform and Development Act, also known as the amended Clean Water Act. Sections 212 (33 USC § 1292), 319 (33 USC § 1329), and 320 (33 USC § 1330) and Title VI (33 USC § 1381 et seq.) of the Act pertain to the Clean Water State Revolving Fund and are hereby adopted and incorporated by reference. This document is available from the Department’s Clean Water State Revolving Fund Program, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-XXXXX.

(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. 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, and is hereby adopted and incorporated by reference. This document is available from the Department’s Clean Water State Revolving Fund Program, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-04016.

(3) through (7) No change.

(8) “Construction loan” means an assistance agreement to fund a wastewater, stormwater, or nonpoint non- point source construction project, or equipment purchase, or wastewater system acquisition. 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. Plans, specifications, construction permits, and site certifications are not required for a wastewater system acquisition. For design/build projects using a best value procurement process, the approval of the procurement process shall be accepted in lieu of the plans, specifications, site certifications, and permits unless any portion of these documents are available at that time. 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.

(9) No change.

(10) “Continuing contract” shall have the same meaning as provided in the Consultants’ Competitive Negotiation Act (CCNA), Section 287.055, F.S.

(11) “Cost-effective” means the lowest present worth (or equivalent annual value) of the implementable and environmentally acceptable alternatives to achieve the project sponsor’s objectives considering capital costs as well as operation and maintenance costs.

(12)(10) “Department” means the Department of Environmental Protection, Clean Water State Revolving Fund Program, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, FL 32399-3000 2400. For electronic information requests and submittals, email [e-mail].

(13)(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 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 firm vendor are the primary consideration in the selection process and the responsible firm vendor shall use open book accounting for this process.

(14)(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 using a best value procurement process 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.

(13) renumbered (15) No change.

(16)(14) “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), F.A.C., hereby incorporated by reference. The financing rate has a loan interest rate component and, for

non-capitalization grant project loans, a grant allocation assessment rate component.

(17) Fiscal Sustainability Plan (FSP) means a plan to be implemented by the project sponsor to perform an initial and continued inventory and evaluation of treatment works proposed for repair, replacement, or expansion in accordance with Section 603 of the Act (33 USC § 1383).

(15) through (18) renumbered (18) through (21) No change.

(22)(20) “Green 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, and Change to the Clean Water State Revolving Fund Green Project Reserve Guidance, February 2017, hereby adopted and incorporated by and adopted as a reference. This document is available from the Department’s Clean Water State Revolving Fund Program, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-03910 and at http://www.flrules.org/gateway/reference.asp?No=Ref-XXXXX. 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/certifcations http://www.aeecenter.org/i4a/pages/index.cfm?pageid=3330.

(19) renumbered (23) No change.

(21) renumbered (24) No change.

(25)(22) “Loan Service Fee” means a fee paid by the project sponsor in an amount that ranges from of two to four 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) through (27) renumbered (26) through (30) No change.

(31)(28) “Project costs” means costs for planning, design and construction, procurement of equipment and materials, contingency, demolition, legal and technical services, land acquisition, wastewater system acquisition, and capitalized interest.

(32)(29) “Project sponsor” means a local government, nonprofit utility, or not-for-profit utility eligible under the Act or other entity eligible as a result of sections 319 and 320 of the Act to receive a loan. An eligible project for          a nonprofit or not-for-profit utility is limited to projects that support water conservation, energy efficiency, and reuse as defined in Section 603 of the Act (33 USC § 1383).

(33)(30) “Request for Inclusion” means completed Form RFI 1, Request for Inclusion on the Clean Water CWSRF Priority List, effective [DATE] 4-22-14, which is hereby adopted and incorporated by reference. This form is available from the Department’s Clean Water State Revolving Fund Program, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-XXXXX.

(34)(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 priority 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.

(32) through (37) renumbered (35) through (40) No change.

Rulemaking Authority 403.1835(10) FS. Law Implemented 403.1832, 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, 4-22-14,               .

 

62-503.300 General Program Information.

(1) Steps involved in obtaining a loan.

(a) Request for inclusion. The project sponsor shall submit a Request for Inclusion Form, incorporated by reference in subsection 62-503.200(33)(30), F.A.C., to the Department to establish project ranking on the priority list as outlined in paragraph (1)(e) below and to determine the financing rate on the loan, as outlined in subsection (5), below:

1. through 2. No change

(b) Documentation required for priority listing. 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 loans, the completed Request for Inclusion form and its necessary attachments are 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 loans, the Request for Inclusion form, all documentation referenced in subsections 62-503.700(2) through 62-503.700(5), F.A.C., must be submitted, and the process described in Rule 62-503.751, F.A.C., must be completed.

(c) Priority List Public Meeting.

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. through 3. No change.

(d) Readiness-to-proceed deadline. 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 and shall have the Department’s acceptance of its planning and environmental review process for a design or construction loan 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:

BPS = [CPS1

x

CCC1

+

.

.

+ CPSn

x

CCCn

]

/ Total

Construction

Cost

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. Examples include elimination of failing septic tanks, failing package plants, or sanitary sewer overflows.

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 preventing or 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 failures in springsheds of first- magnitude springs; or correct septic tank contributions to nutrient impaired spring systems.

400 points

4. No change.

No change.

5. Meet the criteria for a Green Project Innovative/Alternative; correct excessive inflow/infiltration or other issues within the collection and transmission system that cause sanitary sewer overflows; 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; projects for the installation of wastewater transmission facilities to be constructed concurrently with other construction projects occurring within or along a transportation facility right-of-way; or and for rehabilitation, replacement or repair not included in an approved asset management plan.

340 points

7. through 8.

No change

No change

9. Timely submitted project that otherwise meets the requirements of the Act, including land or wastewater system acquisition.

100 points

2. through 4. No change.

(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 total 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$50,000,000.00 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.

(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. 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:

(a) Land purchased as necessary for construction of water pollution control infrastructure. Land necessary for and integral to the treatment process and for the ultimate disposal of wastewater or stormwater, including the zone of discharge. Funding shall be limited to the appraised fair market value of the acreage, in fee simple, of the fee simple interest of the qualifying acreage of land to be purchased. The appraisal report must be less than 12 months old at the time the construction loan application is received. If additional land is acquired that is not necessary for construction, then the eligible funding amount shall be the acreage of necessary the qualifying land divided by the total acreage area purchased times the purchase price;

(b) No Change.

(c) Demolition and removal of existing structures related to the project;

(d) No change.

(e) Technical services after bid opening or award of design/build or construction manager at risk 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) Costs associated with interim financing for a project sponsor sponsors that whose project was adopted on the fundable or waiting portion of the priority list, but proceeded proceed without sufficient loan funds from the Department, for which the sponsor has received prior written authorization from the Department;

(g) Capitalized interest;

(g)(h) The purchase of a domestic wastewater facility and its associated infrastructure, excluding the value of land that is not necessary for operation of the facility. The project sponsor shall demonstrate a substantial benefit to the community and environment to be eligible for funding. Funding of a system acquisition shall be limited to the system’s fair market value does not meet the requirements of subsection 62-503.300(2)(a), F.A.C. In addition, an appraisal is required to identify the land costs that must be excluded;

(h)(i) Technical services for soil and hydrogeological tests, geotechnical evaluations, sewer system evaluations, archaeological surveys, land surveys, and any other technical service deemed necessary for the planning, design, and construction of a project. 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;

(i)(j) Costs for project administration, planning, or engineering under a planning or and design loan;

(k) through (m) renumbered (j) through (l) No change.

(m)(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

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

(o)Project bidding/procurement costs incurred under a design loan or construction loan; and

(p) The refinancing of unretired debt principal for a qualifying sponsor whose project meets the environmental review and procurement process of these rules, and only if in conjunction with a construction project being funded by SRF; however, a project that is financed with a loan from the Department shall not be refinanced by the Department at a lower interest rate

(3) Ineligible project costs.

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

(b) No change.

(c) Costs for the use of the projects sponsor’s personnel or equipment in the planning, design, or construction of constructing project facilities or implementing of agricultural best management or conservation practices

(d) through (f) No change.

(g) Acquisition of sewer rights-of-way and easements, 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;

(h) No change.

(i) Costs incurred before the adoption of the project on the fundable or waiting portion of the priority list execution of a loan agreement unless the Department has provided written authorization to incur costs;

(j) through (k) No change.

(4) Project contingency.

(a) At the time of loan approval and when actual costs are unknown, Pproject contingency shall not exceed 10% of the estimated sum of the construction costs and costs for allowable land. The contingency shall be adjusted by the Department to not more than 5% after procurement contracts have been executed. There shall be no contingency for land when the costs are known.

(b) The contingency remaining after accounting for contract change orders shall be retained eliminated by the Department when project closeout occurs.

(c) Contingency funds shall not be used to purchase equipment or pay for construction work or other activities not described in the loan agreement.

(5) Financing rate.

(a) The financing rate shall be calculated as follows except that the minimum financing rate shall be 0.2 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

 

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 established using the Thomson Publishing Corporation’s “Bond Buyer” 20-Bond GO Index. 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 months (3) 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 a planning, design, or construction loan including any amendments and for the duration of the loan repayment period. A planning loan may be rolled into a design loan, but the financing rate remains fixed. A design loan cannot be rolled into a construction loan 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, but the adjustments shall not reduce the financing rate below 0.2 percent:

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 when the final disbursement request is received or at least three (3) months prior to the first scheduled repayment, whichever comes first. 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 a Green Innovative/Alternative Pprojects as defined in subsection

62-503.200(22)(20), F.A.C., shall also be eligible for a reduction in the financing rate. For projects that are entirely a Green Innovative/Alternative Pprojects, 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 a Green Innovative/Alternative Pprojects, the financing rate reduction shall be 0.1 times the Green Innovative/Alternative Pprojects 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 American Iron and Steel in accordance with Section 608 of the Act (33 USC § 1388) and pProjects that include a requirement for Davis-Bacon wage rates as required in 29 CFR C.F.R. Part 5, Subpart A (7-1-201319 Edition), hereby incorporated by reference, shall be eligible for a total reduction in the financing rate of 0.5 0.25. The document 29 CFR Part 5, Subpart A This document is available from the Department’s Clean Water State Revolving Fund Program, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-XXXXX, and is hereby adopted and incorporated by reference.

4. Project sponsors that agree to fund a nontraditional project that is eligible under the Act but does not receive a Clean Water State Revolving Fund loan, shall receive a financing rate reduction such that the present worth of the savings is equivalent to the cost of the project, up to a reduction in the financing rate of 0.5. Projects that include a requirement for Buy American as required in 40 C.F.R. Part 35, Subpart E (7-1-2013 Edition), or 2 C.F.R. Part 176, Subpart B (1-1-2013 Edition), hereby incorporated by reference, shall be eligible for a reduction in the financing rate of 0.75. This document is available from the Department’s Clean Water State Revolving Fund Program, MS 3505, Tallahassee, Florida 32399-2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref- 03913 and http://www.flrules.org/gateway/reference.asp?No=Ref-03914.

(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 current market rate as established in paragraph (5)(a) above.

(6) Debt coverage for non-governmental sponsors. A non-governmental sponsor of a project that qualifies for funding as a result of section 319 or 320 of the Act shall document that it has a current term debt and capital lease coverage ratio of at least 1.15. This ratio shall have, as its numerator, net operations income plus non-operating income plus depreciation plus interest on term debt (multi-year debt) minus payroll and income taxes minus owner withdrawals; and, as its denominator, the sum of scheduled payments on term debt and long-term leases. This information shall be verified by the sponsor through a certified public accountant (CPA).

Rulemaking 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, 4-22-14,.

 

62-503.430 Loan Applications and Agreements.

(1) General.

(a) A complete loan application, Form Application 1, State Revolving Fund Loan Program for Point Source Water Pollution Control Loan Application, effective [DATE] 4-22-14, or Form Application 2, State Revolving Fund Loan Program for Nonpoint Non-Point Source Water Pollution Control Loan Application, effective [DATE] 4-22- 14, 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 adopted and 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, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-XXXXX and at http://www.flrules.org/gateway/reference.asp?No=Ref-XXXXX.

(b) through (e) No change.

(f) The Department shall have the primary responsibility for drafting the loan agreement and setting its terms. The loan agreement shall have terms to meet program requirements. Loan agreement covenants may vary for direct and leveraged loans. Projects being funded under (or pursuant to) 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.

(g) The loan recipient shall certify that it is not listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.”.

(2) through (5) No change.     

(6) 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 Section 216.181(16), F.S. Disbursements shall be subject to the following requirements:

(a) Requests for disbursements for construction and engineering services 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 service for which payment or reimbursement is sought has been satisfactorily performed. Plans, specifications, site certifications, and permits for any portion of construction completed under a design/build project that used a best value procurement process must be submitted to the department prior to disbursement of construction funds for that portion of construction completed;

(b) through (c) No change.

(7) 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 an a SRF loan, six (6) months after the first available interim loan payoff date.

(8) Loan repayment term.

(a) through (b) No change.

(c) Repayment periods for planning and design loans shall be limited to ten (10) years.(9) 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) Pledged revenue collections satisfy the rate coverage requirement;

(b) The restricted or assigned pledged revenue account contains the funds required;

(c) The debt service account contains the funds required, if applicable; and

(d) For loans awarded after 4-22-14, that the revenue generation system is in conformance with subparagraph 62-503.700(2)(h)3., F.A.C.

(9)(10) Remedies for defaults. Remedies for delinquent loan repayment and other events of default shall be limited to those set forth in the loan agreements. Events of default shall include noncompliance with any of the terms of the 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.

Rulemaking 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, 4-22-14,              .

 

62-503.500 Funds Reserved for Specific Purposes.

(1) through (2) No change.

(3) Green Innovative/Alternative project reserve. If required in the federal capitalization grant, funds shall be reserved for a Green Innovative/Alternative project as defined in subsection 62-503.200(22)(20), F.A.C., if sufficient Green 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., and shall be applied at the time each disbursement is made.

Rulemaking 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, 4-22-14,.

 

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

(1) No change.

(2) Project planning documentation shall include the following:

(a) through (c) No change.

(d) A cost comparison of at least three alternatives, unless it can be demonstrated that fewer alternatives are available, except for projects in paragraph (e), below. The project sponsor shall demonstrate that several cost- effective alternatives were considered for the proposed project.

(e) For projects qualifying for funding as a result of section 319 or 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. through 3. renumbered 1. through 2. No change.

(f) No change.

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

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 prior to the public meeting, whichever is greater.

2. When an agricultural practice identified in subparagraphs (e)1. through 24. above, is selected for implementation on the project sponsor’s property and it is eligible for funding as a result of section 319 or 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. When an agricultural practice identified in subparagraphs (e)1. through 24., above, is selected for implementation on property the project sponsor will acquire, and it is eligible for funding as a result of section 319 or 320 of the Act, the public participation requirement shall be as described in subparagraph (g)1., above.

(h) through (j) No change.

(k) For a project, or its components, that is to be listed as a Green an Innovative/Alternative project, documentation of how the project is categorically Innovative/Alternative or a business case detailing how the project or its components meets meet the federal requirements for a Green an Innovative/Alternative project shall be 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. as outlined in the guidance documents adopted in subsection 62-503.200(22), F.A.C.

(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 using a best value procurement process, the sponsor shall submit a copy of the request for qualifications or requests for proposals, and the a design criteria package that meets the requirements of the Consultants’ Competitive Negotiation Act, Section 287.055, F.S. 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) through (5) No change.

(6) Procurement must be in conformance with 40 CFR C.F.R. 31.36, (July 1, 2011), hereby adopted and incorporated by reference. This document is available from the Department’s Clean Water State Revolving Fund Program, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-03917. 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.: The procurement of professional services for planning, design, and construction shall meet CCNA requirements and shall not exceed the monetary limits of a continuing contract.

(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 $35,000 100,000 or less, a 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 or construction manager at risk.

(c) Requirements for the formal advertised competitive bidding method of procurement shall be as follows:

1. All solicitations shall incorporate a clear and accurate description of the technical requirements for the materials, products, or services to be procured.

a. through b. No change.

c. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equal” description may be used as a means to define the performance or other salient requirements of a procurement. The specific features of the named brand which must be met by bidders offerors shall be clearly stated.

d. All requirements that the bidders offerors must fulfill and all other factors to be used in evaluating bids or proposals shall be identified.

2. No change.

3. The invitation for bids shall be publicly advertised and bids shall be solicited from an adequate number of known suppliers to assure open competition, providing them sufficient time prior to the date set for opening the bids. It is recommended that the invitation to bid be advertised in an electronic plan room.

4.through 7. No change.

(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. No change.

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 firms 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 firm vendor whose statement of qualifications is deemed to be most advantageous by the loan recipient.

(e) No change.

(f) Design/build and construction manager at risk (CMR) procurement shall meet the requirements of the Consultants’ Competitive Negotiation Act, Section 287.055, F.S.

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

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. No change.

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. It is recommended that the announcement be advertised in an electronic plan room.

d. through f. No change.

2. Competitive qualifications-based selection Requests for proposals shall be used in the selection process for CMR procurement. The request for proposals qualifications 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. 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. It is recommended that the announcement be advertised in an electronic plan room

b. The time allowed for development of qualifications 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 qualifications proposals.

c. Both the qualifications of the respondents and the price for completing the advertised work shall be considered in the selection process.

d. renumbered c. No change

d.e. Requests for proposals qualifications shall be submitted to the Department prior to advertising for a determination of compliance with loan program requirements

f. renumbered e. No change.

(g) through (n) No change.

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

1. through 4. No change.

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

a. through c. No change.

(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) through (j) No Change.

(k) A plan to evaluate and implement water and energy conservation efforts that meet the requirements set forth in Section 602 of the Act (33 USC § 1382).

(8) Fiscal Sustainability Plan. Loan recipients are required to develop and implement a fiscal sustainability plan to promote long term sustainability for treatment works proposed for repair, replacement, or expansion in accordance with Section 603 of the Act (33 USC § 1383). Implementation of an asset management plan as outlined above would meet the requirements of a fiscal sustainability plan. The fiscal sustainability plan must be received and approved by the Department, and written procedures must be in place to implement the plan prior to the Department’s approval of the final disbursement request. The plan must include each of the following:

(a) An inventory of critical assets that are part of the treatment works;

(b) An evaluation of the condition and performance of the inventoried assets or asset groupings;

(c) A certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan; and

(d) A plan for maintaining, repairing, and as necessary, replacing the treatment works and plan for funding such activities.

Rulemaking 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, 4-22-14,              .

 

62-503.751 Environmental Review.

(1) through (5) No Change.

(6) State Clearinghouse. Project planning documentation shall be submitted to the State Clearinghouse for review in accordance with Section 403.061(42), F.S. a multi-disciplined intergovernmental review. All comments resulting from this review shall be addressed by the Department prior to its approval of the planning documentation. Projects that meet FCEN criteria, as given in paragraph 62-503.751(2)(b), F.A.C. above, shall be exempt from a planning document review by the State Clearinghouse.

(7) No Change.

Rulemaking Authority 403.1835(10) FS. Law Implemented 403.1835 FS. History–New 7-29-04, Amended 4-22-14,                 

 

62-503.800 Audits Required.

(1) Federal or State Audit Required.

(a) In the event that the project sponsor expends $500,000 or more than the federal audit threshold 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 2 CFR Part 200, Subpart F, Appendix XI Compliance Supplement, June 2019 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, 3900 Commonwealth Blvd. 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-3000 2400 or electronic versions are available at http://www.whitehouse.gov/wp-content/uploads/2019/07/2-CFR_Part-200_Appendix-XI_Compliance- Supplement_2019_FINAL_07.01.19.pdf http://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2007.pdf or at http://www.flrules.org/gateway/reference.asp?No=Ref-XXXXX.

(b) Section 215.97, Florida Statutes; applicable rules of the Department of Financial Services; and Chapters 10.550 (local governmental entities) or 10.650 (nonprofit and for-profit organizations), Rules of the Auditor General F.S., imposes 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) For your information, Ppursuant to Section 215.97, F.S., the State is authorized to conduct an audit within five (5) years following project closeout if loan 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) through (b) No change.

Rulemaking 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, 4-22-14,.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Gregory Alfsen

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Shawn Hamilton

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: November 29, 2021

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: February 3, 2021