DAR File No. 39512
This rule was published in the August 1, 2015, issue (Vol. 2015, No. 15) of the Utah State Bulletin.
Environmental Quality, Water Quality
Utah Wastewater Project Assistance Program
Notice of Proposed Rule
DAR File No.: 39512
Filed: 07/15/2015 06:49:17 AM
Purpose of the rule or reason for the change:
Maintain compliance with Titles I, II, V, and VI of the Federal Water Pollution Control Act (FWPCA) as it was amended by the Water Resources Reform and Development Act of 2014 (WRRDA). Additional changes are to make the rule similar in format to other division rules, correct citations, and to improve the readability of the rule.
Summary of the rule or change:
The changes consist of: 1) including the maximization of the potential for efficient use, reuse, recapture, and conservation of water and for energy conservation to the maximum extent practicable in the cost effective analysis; 2) including consideration of unemployment data and population growth in determining an affordable sewer rate for a community; 3) alphabetizing the definitions section; 4) removal of "Board" from the definitions section because it is defined in Rule R317-1; 5) addition of "Executive Secretary" to the definitions section; 6) moving the definition of "Cost Effective Analysis" to the definitions section; 7) revising the name "Water Conservation and Management Plan" to "Water Conservation Plan" to be consistent with Utah Code and Division of Water Resources administrative rules; 8) issuing construction permits is now a duty of the director; 9) resolutions to amend sewer ordinance and user fee rate structures are also acceptable forms of these documents; 10) improve the description of how plans of operations relate to hiring qualified staff and the asset management needed to properly operate treatment works and sewerage systems; 11) it is necessary that new facilities have a plan of operation, but existing facilities that are merely expanding, repairing, or replacing systems, already have such management systems in place, but it is not necessary to develop an entirely new manual if the new facilities are merely expanding, repairing, or replacing existing systems when amendments to existing manuals may be an acceptable alternative; 12) requiring applicants for financial assistance for onsite wastewater systems to obtain bids is a best practice; 13) correcting references to sections and subsections of state rules; 14) correcting references to the United States Code; 15) correcting references to the Utah Code; 16) correcting references to definitions, programs, acronyms, and entities; and 17) general improvement of readability.
State statutory or constitutional authorization for this rule:
- FWPCA of 2014, 6 U.S.C. Section 5002
- FWPCA of 2014, 6 U.S.C. Section 602(b)(13)
- Title 19, Chapter 5
- Title 73, Chapter 10C
- Section 11-8-2
Anticipated cost or savings to:
the state budget:
The change that affects the definition of "Cost Effective Analysis" is not anticipated to affect the amount of money that the Water Quality Board (WQB) will either loan or grant to a project. Maximization of efficient use, reuse, recapture, and conservation of water and of energy conservation was already a best engineering practice for the water industry and hence, an implied requirement in the consideration of alternatives for projects. This change makes it an explicit requirement for consideration. The change that requires the inclusion of unemployment data and population growth trends is not anticipated to affect the amount of money that the WQB will either loan or grant to a project. Currently, the WQB considers a community's median adjusted gross household income (MAGI) as the primary metric of an affordable sewer rate, which is used to establish project financing terms. If a community has high unemployment, it is likely that community will also have a low MAGI such that under the proposed rule amendment the community would receive equally favorable financing terms as before. Negative, low, and rapid population growth projections from GOMB data are already considered in the financial models for bonding that the WQB uses. Other changes to the rule have no monetary effect on the state budget.
The change that affects the definition of "Cost Effective Analysis" is not anticipated to affect the amount of money that the WQB will either loan or grant to a project. Maximization of efficient use, reuse, recapture, and conservation of water and of energy conservation was already a best engineering practice for the water industry and hence, an implied requirement in the consideration of alternatives for projects. This change makes it an explicit requirement for consideration. The change that requires the inclusion of unemployment data and population growth trends is not anticipated to affect the amount of money that the WQB will either loan or grant to a project. Currently, the WQB considers a community's MAGI as the primary metric of an affordable sewer rate, which is used to establish project financing terms. If a community has high unemployment, it is likely that community will also have a low MAGI such that under the proposed rule amendment the community would receive equally favorable financing terms as before. Negative, low, and rapid population growth projections from GOMB data are already considered in the financial models for bonding that the WQB uses. Other changes to the rule have no monetary effect on local government.
The WRRDA changes do not affect small businesses because SRF funds are limited to use for assistance of bodies politic. The only change that could affect small business is the change that requires applicants for financial assistance for onsite wastewater systems to obtain bids. If a small business applying for this type assistance had not received bids for the work, requiring them to solicit for bids could potentially save the small business money. This change ensures the best value and use of state funds for those small businesses receiving financial assistance through this program.
persons other than small businesses, businesses, or local governmental entities:
The WRRDA changes do not affect persons other than small businesses, businesses, or local government entities because SRF funds are limited to use for assistance of bodies politic. The only change that could affect persons other than small businesses, businesses, or local government entities is the change that requires applicants for financial assistance for onsite wastewater systems to obtain bids. If these other persons applying for this type assistance had not received bids for the work, requiring them to solicit for bids could potentially save them money. This change ensures the best value and use of state funds for those other persons receiving assistance through this program.
Compliance costs for affected persons:
There are no anticipated additional compliance costs for the affected persons.
Comments by the department head on the fiscal impact the rule may have on businesses:
The changes to Rule R317-101 are not anticipated to have any fiscal impacts on businesses.
Alan Matheson, Executive Director
The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:Environmental Quality
Water QualityRoom DEQ, Third Floor
195 N 1950 W
SALT LAKE CITY, UT 84116
Direct questions regarding this rule to:
- Judy Etherington at the above address, by phone at 801-536-4344, by FAX at 801-536-4301, or by Internet E-mail at firstname.lastname@example.org
Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:
This rule may become effective on:
Walter Baker, Director
R317. Environmental Quality, Water Quality.
R317-101. Utah Wastewater Project Assistance Program.
R317-101-1. Statutory Authority.
The authority for the Department of
Environmental Quality acting through the Utah Water Quality Board
to issue loans to political subdivisions to finance all or part of
wastewater project costs and to enter into [
"]credit enhancement agreements[ "], [ "]interest buy-down agreements[ "], and Hardship Grants is provided in
[ Title 73, Chapter 10b and Title 73, 10c].
A. Board means Utah Water Quality Board. B. Political Subdivision means any county, city, town,
improvement district, metropolitan water district, water
conservancy district, special service district, drainage
district, irrigation district, separate legal or administrative
entity created under the Interlocal Co-operation Act or any other
entity constituting a political subdivision under the laws of
Utah. C. Wastewater Project means a sewer, storm or sanitary
sewage system, sewage treatment facility, lagoon, sewage
collection facility and system and related pipelines and all
similar systems, works and facilities necessary or desirable to
collect, hold, cleanse or purify any sewage or other polluted
waters of this State; and a study, pollution prevention activity,
or pollution education activity that will protect waters of this
state. D. Project Costs include the cost of acquiring and
constructing any project including, without limitation: the cost
of acquisition and construction of any facility or any
modification, improvement, or extension of such facility; any
cost incident to the acquisition of any necessary property,
easement or right of way; engineering or architectural fees,
legal fees, fiscal agent's and financial advisors' fees;
any cost incurred for any preliminary planning to determine the
economic and engineering feasibility of a proposed project; costs
of economic investigations and studies, surveys, preparation of
designs, plans, working drawings, specifications and the
inspection and supervision of the construction of any facility;
interest accruing on loans made under this program during
acquisition and construction of the project; and any other cost
incurred by the political subdivision, the Board or the
Department of Environmental Quality, in connection with the
issuance of obligation of the political subdivision to evidence
any loan made to it under the law. E. Wastewater Project Obligation means, as appropriate,
any bond, note or other obligation of a political subdivision
issued to finance all or part of the cost of acquiring,
constructing, expanding, upgrading or improving a wastewater
project. F. Credit Enhancement Agreement means any agreement
entered into between the Board, on behalf of the State, and a
political subdivision, for the purpose of providing methods and
assistance to political subdivisions to improve the security for
and marketability of wastewater project obligations. G. Interest Buy-Down Agreement means any agreement
entered into between the Board, on behalf of the State, and a
political subdivision, for the purpose of reducing the cost of
financing incurred by a political subdivision on bonds issued by
the subdivision for project costs. H. Financial Assistance means a project loan, credit
enhancement agreement, interest buy-down agreement or hardship
grant. I. Hardship Grant means a grant of monies to a political
subdivision, individual, corporation, association, state of
federal agency or other private entity that meets the wastewater
project loan considerations or NPS eligibility criteria whose
project is determined by the Board to not be economically
feasible unless grant assistance is provided. A hardship grant
may be authorized in the following forms: 1. A Planning Advance which will be required to be repaid
at a later date, unless deemed otherwise by the Board, to help
meet project costs incident to planning to determine the
economic, engineering and financial feasibility of a proposed
project. 2. A Design Advance which will be required to be repaid
at a later date, to help meet project costs incident to design
including, but not limited to, surveys, preparation of plans,
working drawings, specifications, investigations and
studies. 3. A Project Grant which will not be required to be
repaid. J. Nonpoint Source Project means a facility, system,
practice, study, activity or mechanism that abates, prevents or
reduces the pollution of water of this state by a nonpoint
source. K. Principal Forgiveness means a loan wherein a portion
of the loan amount is "forgiven" upon closing the
R317-101-3. Application and Project Initiation Procedures.
The following procedures must normally be followed to obtain financial assistance from the Board:
A. It is the responsibility of the applicant to obtain the necessary financial, legal and engineering counsel to prepare an effective and appropriate financial assistance agreement, including cost effectiveness evaluations of financing methods and alternatives, for consideration by the Board.
B. A completed application form, project engineering report as appropriate, and financial capability assessment are submitted to the Board. Any comments from the local health department or association of governments should accompany the application.
C. The staff prepares an engineering and financial feasibility report on the project for presentation to the Board.
D. The Board [
"A]uthorizes[ "] financial assistance for the project on
the basis of the feasibility report prepared by the staff,
designates whether a loan, credit enhancement agreement, interest
buy-down agreement, hardship grant or any combination thereof, is
to be entered into, and approves the project schedule [ (]see
R317-101-14[ )]. The Board shall authorize a hardship grant
only if it determines that other financing alternatives are
unavailable or unreasonably expensive to the applicant. If the
applicant seeks financial assistance in the form of a loan of
amounts in the security account established pursuant to Title 73,
Chapter 10c, which loan is intended to provide direct financing of
projects costs, then the Board shall authorize such loan only if it
determines that credit enhancement agreements, interest buy-down
agreements and other financing alternatives are unavailable or
unreasonably expensive to the applicant or that a loan represents
the financing alternative most economically advantageous to the
state and the applicant; provided, that for purposes of this
paragraph and for purposes of Subsection 73-10c-4(2), the term
"loan" shall not include loans issued in connection with
interest buy-down agreements as described in
R317-101-12 hereof or in connection with any other
interest buy-down arrangement.
E. Planning Advance Only - The applicant requesting a Planning Advance must attend a preapplication meeting, complete an application for a Planning Advance, prepare a plan of study, and submit a draft contract for planning services.
F. Design Advance Only - The applicant requesting a design advance must have completed an engineering plan which meets program requirements and submitted a draft contract for design services.
G. The project applicant must demonstrate public support for the project.
H. Political subdivisions which receive assistance for a wastewater project under these rules must agree to participate annually in the Municipal Wastewater Planning Program (MWPP).
I. Political subdivisions which receive
assistance under these rules and which own a culinary water system
must complete and submit a Water Conservation[
and Management] Plan.
J. The project applicant's engineer prepares a preliminary design report, as appropriate, outlining detailed design criteria for submission to the Board.
K. Upon approval of the preliminary design report by the Board, the applicant's engineer completes the plans, specifications, and contract documents for review by the Board.
L. For financial assistance mechanisms
when the applicant's bond is purchased by the Board, the
project applicant's bond documentation, including an opinion
from legal counsel experienced in bond matters that the wastewater
project obligation is a valid and binding obligation of the
political subdivision, must be submitted to the Assistant Attorney
General for preliminary approval and the applicant shall publish a
Notice of Intent to issue bonds in a newspaper of general
circulation pursuant to Section 11-14-
21]. For financial assistance mechanisms when the
applicant's bond is not purchased by the Board, the applicant
shall submit a true and correct copy of an opinion from legal
counsel experienced in bond matters that the wastewater project
obligation is a valid and binding obligation of the political
M. Hardship Grant - The Board executes a grant agreement setting forth the terms and conditions of the grant.
Board] issues a Construction Permit[ /]
Plan Approval for plans and specifications and concurs in bid advertisement.
O. If a project is designated to be
financed by a loan or an interest buy-down agreement as described
Sewer Use Ordinance
rate structure] must be submitted to the
[ Board] for review and approval to insure adequate
provisions for debt retirement [ and/or ]operation and maintenance
Q. A plan of operation
, including] adequate staffing, with an operator
certified at the appropriate level in accordance with
R317-10, training, and start up procedures to assure
efficient operation and maintenance of the facilities
[ , is] submitted by the applicant in draft at
initiation of construction and approved in final form prior to 50%
of construction completion.
[ m]aintenance [ (O and M) ][ m]anual
which provides long-term guidance for efficient
[ O and M ]is submitted by the applicant and
approved in draft and final form prior to, respectively, 50% and
90% of project construction completion.
S. The applicant's contract with its engineer must be submitted to the Board for review to determine that there will be adequate engineering involvement, including project supervision and inspection, to successfully complete the project.
T. The applicant's attorney must provide an opinion to the Board regarding legal incorporation of the applicant, valid legal title to rights-of-way and the project site, and adequacy of bidding and contract documents.
U. Credit Enhancement Agreement and
Interest Buy-Down Agreement Only - The Board issues the credit
enhancement agreement or interest buy-down agreement setting forth
the terms and conditions of the security or other forms of
assistance provided by the agreement and notifies the applicant to
sell the bonds
R317-101-11 [ and ]
V. Credit Enhancement Agreement and Interest Buy-Down Agreement Only - The applicant sells the bonds on the open market and notifies the Board of the terms of sale. If a credit enhancement agreement is being utilized, the bonds sold on the open market shall contain the legend required by Subsection 73-10c-6(2)(a). If an interest buy-down agreement is being utilized, the bonds sold on the open market shall bear a legend which makes reference to the interest buy-down agreement and states that such agreement does not constitute a pledge of or charge against the general revenues, credit or taxing powers of the state and that the holder of any such bond may look only to the applicant and the funds and revenues pledged by the applicant for the payment of interest and principal on the bonds.
W. The applicant opens bids for the project.
X. Loan Only - The Board gives final
approval to purchase the bonds and execute the loan contract[
Y. Loan Only - The final closing of the loan is conducted.
Z. The Board gives approval to award the contract to the low responsive and responsible bidder.
AA. A preconstruction conference is held.
BB. The applicant issues a written notice to proceed to the contractor.
R317-101-4. Loan, Credit Enhancement, Interest Buy-Down, and Hardship Grant Consideration Policy.
A. Water Quality Board Priority Determination
In determining the priority for financial assistance the Board shall consider:
T]he ability of the political subdivision to
obtain funds for the wastewater project from other sources or to
finance such project from its own resources;
T]he ability of the political subdivision to repay
the loan or other project obligations;
W]hether a good faith effort to secure all or part
of the services needed from the private sector through
privatization has been made; and
W]hether the wastewater project:
M]eets a critical local or state need;
I]s cost effective;
W]ill protect against present or potential health
I]s needed to comply with minimum standards of the
Federal Water Pollution Control Act
[ , Chapter 26, Title 33, United States Code], or
any similar or successor statute;
I]s needed to comply with the minimum standards of
[ the] Utah Water
[ Pollution Control] Act, [ Chapter 5, Title 19, ]or any similar or successor
I]s designed to reduce or prevent the pollution of
the waters of this state;
F]urthers the concept of regionalized sewer
T]he priority point total for the project as
determined by the Board from application of the current Utah State
Project Priority System [ (] R317-100[ )];
T]he overall financial impact of the proposed
project on the citizens of the community including direct and
overlapping indebtedness, tax levies, user charges, impact or
connection fees, special assessments, etc., resulting from the
project, and anticipated operation and maintenance costs versus the
median adjusted gross household income of the community;
T]he readiness of the project to proceed;
8. Consistency with other funding source commitments that may have been obtained for the project;
O]ther criteria that the Board may deem
B. Water Quality Board Financial Assistance Determination. The amount and type of assistance offered will be based on the following considerations:
F]or loan consideration
the estimated annual cost of sewer service to the average
residential user should not exceed 1.4% of the median adjusted
gross household income from the most recent available State Tax
For hardship grant
consideration, exclusive of advances for planning and design, the
estimated annual cost of sewer service for the average residential
user should exceed 1.4% of the median adjusted gross household
income from the most recent available State Tax Commission records.
The Board will also consider the applicant's level of
contribution to the project[ .]
T]he estimated, average residential cost [ (]as a percent of median adjusted gross household
income[ )] for the proposed project should be compared to the average
user charge [ (]as a percent of median adjusted gross household
income[ )] for recently constructed projects in the State of Utah[ .]
Optimizing] return on the security account while
still allowing the project to proceed[ .]
L]ocal political and economic conditions[ .]
C]ost effectiveness evaluation of financing
A]vailability of funds in the security account[ .]
E]nvironmental need[ .]
criteria the Board may deem appropriate.
C. The Executive Secretary may not execute
financial assistance for
Non-point Source] projects totaling more than
$1,000,000 per fiscal year unless directed by the Board.
R317-101-5. Financial Assistance For
] Wastewater Systems.
A. Replacement or repair of
On-site] Wastewater Systems (OWS), as defined in
[ 1.45], are eligible for funding if they have
malfunctioned or are in non-compliance with state administrative
rules or local regulations governing the same.
1. Funding will only be made for the repair or replacement of existing malfunctioning OWS when the malfunction is not attributable to inadequate system operation and maintenance.
2. The Executive Secretary, [
and/]or another whom the Board may designate, will
authorize and execute OWS grant agreements and loan agreement
with the applicant for a wastewater project as defined by
3. OWS funding recipients must have a total household income no greater than 150% of the state median adjusted household income, as determined from the Utah Tax Commission's most recently published data or other means testing as approved by the Executive Secretary.
4. Eligible activities under the OWS Financial Assistance program include:
C]onventional or alternative OWS
C]onnection of the residence to an existing
centralized sewer system, including connection or hook-up fees, if
this is determined to be the best means of resolving the failure of
an OWS[ .]
C]osts for construction, permits, legal work,
engineering, and administration.
5. Ineligible project components include:
b. interior plumbing components[
c. impact fees, if connecting to a centralized sewer system is determined to be the best means of resolving the failure of an OWS;
d. OWS for new homes or developments;
e. OWS operation and maintenance.
6. The local health department will
certify the completion of the project to the Division[
of Water Quality].
7. To be reimbursed for project
expenditures the borrower must
maintain and submit invoices,
financial records, or receipts
which] document the expenditures or costs.
B. The following procedures apply to OWS loans:
1. OWS loan applications will be received
by the local health department which will evaluate the need,
priority, eligibility and technical feasibility of each project.
The local health department will issue a certificate of
qualification (COQ) for projects which qualify for a
OSW] loan. The COQ and completed loan application
will be forwarded to the Division[ of Water Quality] for its review[ .]
T]he maximum term of the
[ OSW] loan will be 10 years[ .]
T]he interest rate of
[ OSW] loans may be
[ zero percent or up to]
[ percent] of the interest rate on a 30-year U.S.
Treasury bill[ .]
[ OSW] [ L]oans
T]he borrower must adequately secure the loan with
real property or other appropriate security[ .]
T]he ratio of the loan amount to the value of the
pledged security must not be greater than 70[ percent.]
5. OWS loan recipients will be billed for
monthly payments of principal and interest beginning 60 days after
execution of the loan agreement[
T]he OWS loan must be paid in full at the time the
property served by the project is sold or transferred[ .]
T]he [ Utah ]Division[ of Water Quality], or its designee, will evaluate
the financial aspects of the project and the credit worthiness of
C. The following procedures apply to OWS grants:
OWS grants may be made to recipients that
are unable to secure a loan but are otherwise eligible for funding
as identified in
R317-101-6. Financial Assistance for Large Underground Wastewater Disposal Systems.
A. Large Underground Wastewater Disposal
Systems (LUWDS) projects, as defined in
UAC] 73-10c-2(9), may be eligible for funding from
[ SRF] and from the Hardship Grant Program.
Application and project initiation procedures including loans,
credit enhancement, interest buy-down and hardship grant
consideration policies for LUWDS are defined in
R317-101-3 [ and] R317-101-4 except as otherwise stated.
B. The following procedures apply to LUWDS project loans:
1. Projects will be prioritized according to criteria established in R317-100-4, Utah State Project Priority System for the Utah Wastewater Project Assistance Program.
2. The maximum term of LUWDS project loans will be twenty years but not beyond a term exceeding the depreciable life of the project.
3. The interest rate on LUWDS project loans will be determined by the Board.
C. The following procedures apply to LUWDS project grants. Hardship Grants may be considered for LUWDS projects that meet criteria established in R317-101-4 and that:
es] a critical water quality need or health
2. would otherwise not be economically feasible;
s] provisions of TMDLs.
R317-101-7. Financial Assistance for
Non-point Source Pollution (]NPS[ )] Projects, as defined in
[ UAC] 73-10c-2(9), are eligible for funding from
[ SRF] and from the Hardship Grant Program.
1. Funding to [
the ]individuals in amounts in excess of $150,000
will be presented to and authorized funding by the Board. Funding
of less than $150,000 will be considered and authorized funding by
the Executive Secretary.
2. The Executive Secretary, [
and/]or another whom the Board may designate, will
authorize and execute NPS project loan agreements
[ and /or ]grant agreements
with the applicant.
3. Eligible projects under the NPS project funding programs include projects that:
a. abate or reduce raw sewage discharges;
b. repair or replace failing individual on-site wastewater disposal systems;
c. reduce untreated or uncontrolled runoff;
d. improve critical aquatic habitat resources;
e. conserve soil, water, or other natural resources;
f. protect and improve ground water quality;
g. preserve and protect the beneficial uses of water of the state;
h. reduce the number of water bodies not achieving water quality standards;
i. improve watershed management;
j. prepare and implement total maximum daily load (TMDL) assessments;
k. are a study, activity, or mechanism that abates, prevents or reduces water pollution; or
l. supports educational activities that promotes water quality improvement.
B. The following procedures apply to NPS project loans:
1. Projects will be prioritized according to criteria established in R317-100-4, Utah State Project Priority System for the Utah Wastewater Project Assistance Program.
2. The maximum term of NPS program loans will be twenty years but not beyond a term exceeding the depreciable life of the project.
3. The interest rate on NPS project loans will be determined by the Board.
4. NPS project loans are exempt from
environmental reviews under the National Environmental Policy Act
(NEPA) as long as the funding of these projects is identified in
Non-point Source] Pollution Management Plan.
5. Security of NPS project loans.
a. NPS project loans to individuals in amounts greater than $15,000 will be secured by the borrower with water stock or real estate. Loans less than $15,000 may be secured with other assets.
b. For NPS project loans to individuals
the ratio of the loan amount to the value of the pledged security
must not be greater than 70[
c. NPS loans to political subdivisions of the state will be secured by a revenue bond, general obligation bond or some other acceptable instrument of debt.
6. The Division[
of Water Quality] will determine project
eligibility and priority. Periodic payments will be made to the
or consultants for work relating to the planning, design
and construction of the project. The borrower must
maintain and submit the financial records that document
expenditures or costs.
7. The Division[
of Water Quality], or its designee, will perform
periodic project inspections. Final payment on the NPS loan project
will not occur until a final inspection has occurred and an
acceptance letter issued for the completed project.
8. NPS project loan recipients will be billed periodically for payments of principal and interest as agreed to in the executed loan agreements or bond documents.
9. The [
Utah ]Division[ of Water Quality], or its designee, will evaluate
the financial aspects of the NPS project and the credit worthiness
of the applicant.
C. The following procedures apply to NPS project grants. Hardship Grants may be considered for a NPS project that:
1. addresses a critical water quality need or health hazard;
2. remediates water quality degradation resulting from natural sources damage including fires, floods, or other disasters;
3. would otherwise not be economically feasible;
4. provides financial assistance for a study, pollution prevention activity, or educational activity; or
5. implements provisions of TMDLs.
R317-101-8. Loans For Storm Water Projects.
Storm water projects are eligible for
funding through the Utah Wastewater Project Assistance Program, as
UCA] 73-10c-2(12). In addition to other rules
R317-101 which may apply, the following particular
rules apply to storm water project loans:
A. Loans will only be made to political subdivisions of the state.
B. The interest rate charged on storm water project loans will be equal to 60% of the interest rate on a 30-year U.S. Treasury bill.
C. Storm water project loans will be made
twice per year. Projects will be prioritized so that the limited
funds which are available are allocated first to the highest
priority projects in accordance with
Utah State Project Priority System
for the Utah Wastewater Project Assistance Program.
D. Storm water projects are eligible for funding provided a significant portion of the project is for the purpose of improving water quality.
R317-101-9. Planning Advance.
A. A Planning Advance can only be made to
a political subdivision which demonstrates a financial hardship[
which prevents the completion of project
B. A Planning Advance is made to a political subdivision with the intent to provide interim financial assistance for project planning until the long-term project financing can be secured. Once the long-term project financing has been secured, the Planning Advance must be expeditiously repaid the Board.
C. The applicant must demonstrate that all funds necessary to complete project planning will be available prior to commencing the planning effort. The Planning Advance will be deposited with these other funds into a supervised escrow account at the time the grant agreement between the applicant and Board is executed.
D. Failure on the part of the recipient of a Planning Advance to implement the construction project may authorize the Board to seek repayment of the Advance on such terms and conditions as it may determine.
E. The recipient of a Planning Advance must first receive written approval for any cost increases or changes to the scope of work.
R317-101-10. Design Advance.
A. A Design Advance can only be made to a
political subdivision which demonstrates a financial hardship[
which prevents the completion of project
B. A Design Advance is made to a political subdivision with the intent to provide interim financial assistance for the completion of the project design until the long-term project financing can be secured. Once the long-term project financing has been secured, the Project Design Advance must be expeditiously repaid to the Board.
C. The applicant must demonstrate that all funds necessary to complete the project design will be available prior to commencing the design effort. The Design Advance will be deposited with these other funds into a supervised escrow account at the time the grant agreement between the applicant and Board is executed.
D. Failure on the part of the recipient of
a Design Advance to implement the construction project may
authorize] the Board [ to ]seek repayment of the Advance on such terms and conditions as
it [ may ]determine.
E. The recipient of a Design Advance must first receive written approval for any cost increases or changes to the scope of work.
R317-101-11. Credit Enhancement Agreements.
The Board will determine whether a project may receive all or part of a loan, hardship grant, credit enhancement agreement or interest buy-down agreement subject to the criteria in R317-101-4. To provide security for project obligations the Board may agree to purchase project obligations of political subdivisions or make loans to the political subdivisions to prevent defaults in payments on project obligations. The Board may also consider making loans to the political subdivisions to pay the cost of obtaining letters of credit from various financial institutions, municipal bond insurance, or other forms of insurance or security for project obligations. In addition, the Board may consider other methods and assistance to political subdivisions to properly enhance the marketability of or security for project obligations.
R317-101-12. Interest Buy-Down Agreement.
Interest buy-down agreements may consist of:
1]. A financing agreement between the Board and
political subdivision whereby a specified sum is loaned or granted
to the political subdivision to be placed in a trust account. The
trust account shall be used exclusively to reduce the cost of
financing for the project.
2]. A financing agreement between the Board and
the political subdivision whereby the proceeds of bonds purchased
by the Board is combined with proceeds from publicly issued bonds
to finance the project. The rate of interest on bonds purchased by
the Board may carry an interest rate lower than the interest rate
on the publicly issued bonds, which when blended together will
provide a reduced annual debt service for the project.
3]. Any other legal method of financing which
reduces the annual payment amount on locally issued bonds. After
credit enhancement agreements have been evaluated by the Board and
it is determined that this method is not feasible or additional
assistance is required, interest buy-down agreements and loans may
be considered. Once the level of financial assistance required to
make the project financially feasible is determined, a cost
effective evaluation of interest buy-down options and loans must be
completed. The financing alternative chosen should be the one most
economically advantageous for the state and the applicant.
The Board may make loans to finance all or part of a wastewater project only after credit enhancement agreements and interest buy-down agreements have been evaluated and found either unavailable or unreasonably expensive. The financing alternative chosen should be the one most economically advantageous for the state and its political subdivision.
R317-101-14. Project Authorization.
A project may be [
"A]uthorized[ "] for a loan, credit enhancement agreement,
interest buy-down agreement or hardship grant in writing by the
Board following submission and favorable review of an application
form, engineering report
[ (]if required[ )], financial capability assessment and Staff
feasibility report. The engineering report must include the
preparation of a cost effective analysis
[ of feasible project alternatives capable of meeting State
and Federal water quality and public health requirements. It shall
include consideration of monetary costs including the present worth
or equivalent annual value of all capital costs, operation,
maintenance, and replacement costs. The alternative selected must
be the most economical means of meeting applicable State and
Federal effluent and water quality or public health requirements
over the useful life of the facility while recognizing
environmental and other nonmonetary considerations.] If it
is anticipated that a project will be a candidate for financial
assistance from the Board, the Staff should be contacted, and the
plan of study for the engineering report
[ (]if required
[ )] should be approved before the planning is
Once the application form, plan of study,
engineering report, and financial capability assessment are
reviewed, the staff will prepare a project feasibility report for
the Board's consideration in [
A]uthorizing a project. The project feasibility report will
include a detailed evaluation of the project with regard to the
Board's funding priority criteria, and will contain
recommendations for the type of financial assistance which may be
[ (]i.e., [ for ]a loan, credit enhancement agreement,
interest buy-down agreement or hardship grant[ )].
A]uthorization is not a contractual commitment and is
conditioned upon the availability of funds at the time of loan
closing, or signing of the credit enhancement, interest buy-down,
or grant agreement and upon adherence to the project schedule
approved at that time. If the project is not proceeding according
to the project schedule the Board may withdraw the project [ A]uthorization so that projects
[ which] are ready to proceed can obtain necessary
funding. Extensions to the project schedule may be considered by
the Board, but any extension requested must be fully justified.
R317-101-15. Financial Evaluations.
A. The Board considers it a proper function to assist and give direction to project applicants in obtaining funding from such State, Federal or private financing sources as may be available to achieve the most effective utilization of resources in meeting the needs of the State. This may also include joint financing arrangements with several funding agencies to complete a total project.
B. Hardship Grants will be evidenced by a grant agreement.
C. Loans will be evidenced by the sale of
any legal instrument which meets the legal requirements of the
Utah Municipal Bond Act (Chapter 14, Title 11)] to
D. The Board will consider the financial
feasibility and cost effectiveness evaluation of the project in
detail. The financial capability assessment must be completed as a
basis for the review. The Board will generally use these reports to
determine whether a project will be [
A]uthorized to receive a loan, credit enhancement agreement,
interest buy-down agreement or hardship grant
[ (Reference] R317-101-5 through
9[ )]. If a project is [ A]uthorized to receive a loan, the Board will establish the
portion of the construction cost to be included in the loan and
will set the terms for the loan. The Board will require the
applicants to repay the loan as rapidly as is reasonably consistent
with the financial capability of the applicant. It is the
Board's intent to avoid repayment schedules which would exceed
the design life of the project facilities.
E. In order to support costs associated with the administration of the loan program, the Board may charge a loan origination fee. A recipient may use loan proceeds to pay the loan origination fee. The loan origination fee shall be due at the recipient's scheduled loan closing.
F. The Board shall determine the date on which annual repayment will be made. In fixing this date, all possible contingencies shall be considered, and the Board may allow the system user one year of actual use of the project facilities before the first repayment is required.
G. The applicant shall furnish the Board with acceptable evidence that the applicant is capable of paying its share of the construction costs during the construction period.
H. Loans and Interest Buy-Down Agreements Only - The Board may require, as part of the loan or interest buy-down agreement, that any local funds which are to be used in financing the project be committed to construction prior to or concurrent with the committal of State funds.
I. The Board will not forgive the applicant of any payment after the payment is due.
R317-101-16. Committal of Funds and Approval of Agreements.
After the Board has approved the plans and
specifications by the issuance of a Construction Permit[
/] Plan Approval
and has received the appropriate legal documents and other
items listed in the authorization letter, the project will be
considered by the Board for final approval. The Board will
determine whether the project loan, interest buy-down agreement or
grant agreement is in proper order on the basis of the Board's
authorization. The Executive Secretary may then close the loan,
credit enhancement or grant agreement if representations to the
Board or other aspects of the project have not changed
significantly since the Board's funding authorization, provided
all conditions imposed by the Board have been met. If significant
changes have occurred, the Board will then review the project and,
if satisfied, will then commit funds, approve the signing of the
contract, credit enhancement agreement, interest buy-down or grant
agreement, and instruct the Executive Secretary to submit a copy of
the signed contract agreement to the Division of Finance.
of Water Quality] staff may conduct inspections
and will report to the applicant. Contract change orders must be
properly negotiated with the contractor and approved in writing.
Change orders in excess of $10,000 must receive prior written
approval by the Division[ of Water Quality] staff before execution. Upon
successful completion of the project and recommendation of the
applicant's engineer, the applicant will request the Division[ of Water Quality] to conduct a final inspection.
When the project is complete to the satisfaction of the
applicant's engineer, the Division [ of Water Quality ]staff
and the applicant, written approval will be issued by the
[ Executive Secretary] to commence using the project
KEY: wastewater, water quality, loans, sewage treatment
Date of Enactment or Last Substantive Amendment: [
June 11, 2009]
Notice of Continuation: March 28, 2013
Authorizing, and Implemented or Interpreted Law: 19-5
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