All government programs have rules, policies, and other requirements; and this one is certainly no exception. There are three categories of program requirements for the CWSRF program, Financial, Environmental, and Engineering; and these are designed to ensure the following:
- that the borrower has the financial and managerial capability to construct the project, operate and maintain the facilities for their design life, and to repay the loan within the repayment period;
- that the project is planned, designed, and constructed to meet the needs of the borrower's community for its design life; and,
- that the construction, operation, and maintenance of the project will not result in any adverse environmental impacts.
The items listed below are required parts of the program. Documents listed here must be prepared by the borrower and submitted to DEQ for review. Guidance for preparation of most documents is available.
Borrowers must demonstrate fiscal responsibility through a review of the last three years of audited financial statements and must obtain permission to make the proposed loan from the State Bond Commission. Borrowers must establish a user charge system that will provide sufficient revenue to operate and maintain the system throughout the life of the facility. Borrowers must have or establish a dedicated revenue source sufficient to repay the loan (including principal, interest and administrative fees) within the prescribed repayment period. Dedicated revenue sources include one or more of the following: user fee, sales tax, ad valorem (fixed), general obligation, or front foot assessment. The department must have first lien or equal parity on material revenue debt with reasonable revenue coverage requirements as follows: revenue coverage requirements are set by state law and include 133% for sales tax, 100% with an allowance for bad debt for General Obligation and 125% for all others. Debt service reserves not exceeding the smaller of ten percent of the loan or the highest yearâ¬"s principal and interest is also required. A maximum of twenty-two years is allowed for repayment of the loan, two of which are for construction. (Note that the maximum repayment period allowed on front foot assessments is 10 years.)
The Environmental Information Document is an analysis of the effects on the environment of the action recommended in the Facility Plan. The Environmental Information Document must demonstrate that the project will not result in any adverse environmental impacts and is in compliance with the National Environmental Policy Act.
A Facility Plan is prepared first. This is a comprehensive study of existing conditions in the community, an evaluation of any existing facilities currently in use, and a projection of future needs for the twenty year planning period. The Facility Plan will include a recommendation for the construction of any facilities that will be needed by the community during the planning period. Documents that are often submitted separately but are considered part of the Facility Plan may include an Infiltration/Inflow Analysis (if required) and an Intermunicipal Agreement (if more than one entity is involved in a project).
Plans and Specifications are prepared for the construction of any facilities recommended in the Facilities Plan. Plans and Specifications are often prepared as two or more contracts, depending on how much construction is needed and how the construction is to be scheduled.
Bid Documents are prepared to demonstrate that the bidders (especially the successful bidder) has complied with program requirements regarding contracting and subcontracting.
Addenda and Change Orders are prepared as necessary to make corrections to the design or the construction contracts.
Construction Inspections are performed by DEQ to verify that construction is on schedule and conforms with the approved design. A final inspection is performed when construction is complete.
An Operation and Maintenance Manual is prepared so the operations personnel will have the information needed to properly operate and maintain the facilities.
A Sewer Use Ordinance and User Charge System are needed to regulate the use of the system and so the community will have sufficient funds to properly operate and maintain the system.