A. Application for
WPCELF Loan
(1) Obtaining a Loan Application.
Potential applicants may request a WPCELF loan application package by
contacting the Department. The Department will transmit the loan application
package to the potential applicant.
(2) Budget Period. Costs for the project must
be incurred within the Budget Period established in the loan agreement. When
justified and when approved by the Department, the Budget Period may begin
prior to loan award but may not begin more than 90 days prior to the issuance
of a funding pre-commitment letter or receipt of the loan application by the
Department. If project costs are incurred prior to loan offer, the prospective
loan recipient agrees that he is proceeding at his own risk and relieves the
Commission, the Department, and the Department staff of all responsibility and
liability should such costs later be determined unallowable or should such
funding not become available for any reason.
The end of the Budget Period will coincide with the 30 day
deadline described in Rule 5.3.D.(2) of these regulations.
(3) Contents of Application. All documents
listed below must be complete and approvable when submitted to the Department.
An original WPCELF loan application package must be submitted
to the Department. When forms are provided by the Department these forms must
be used, and these forms may not be altered. The WPCELF loan application may
request assistance only for costs that are allowable in accordance with
Appendix A of these regulations and may include a construction contingency, as
determined by the Department, in the project budget. The application must
include in the Project Budget any administration fee charged to the loan
recipient by the Department. A complete application must conform to these
regulations, including all Appendices, and must include the following:
(a) A completed WPCELF loan application form,
which includes the amounts requested for construction, repairs, equipment,
supplies, land/easements, testing contracts, contingency, contracts for
planning, design, land acquisition, legal, engineering and other professional
services during construction and any required administration fees.
(b) A certified copy of a resolution by the
loan applicant's governing body which:
(1)
declares the existence of an emergency, which meets the definition of an
emergency as defined in Rule 5.1.B.(16) of these regulations;
(2) agrees to implement, prior to final
disbursement of WPCELF funds, an approved user charge system, as defined in
Rule.5.1.B.(51)of these regulations, adequate to completely cover all costs,
including repayment of the WPCELF loan;
(3) authorizes and designates an individual
or office to serve as the authorized representative, to make application for
assistance, and to sign documents required to undertake and complete the
project on behalf of the applicant.
(c) A report including a clear description of
the emergency, the recommended course of action, and the estimated costs and
schedule to remedy the emergency from the certified operator or engineer or
other qualified personnel (i.e., contractor, equipment representative,
electrician, etc.). If such project must be designed by a registered engineer
in accordance with state law and the Rules and Regulations of the Mississippi
State Board of Registration for Professional Engineers and Land Surveyors, the
report must include the seal of the engineer who prepared the report.
(d) Engineer's plans and specifications, if
applicable.
(e) A procurement
certification from the loan applicant and the loan applicant's legal counsel,
stating that all procurement actions related to the WPCELF loan project have
been, and will be, in compliance with state law and Appendix B of these
regulations.
(f) A draft user
charge system and ordinance. The ordinance implementing this user charge system
must be enacted prior to final disbursement of WPCELF loan funds and by the
date established in the WPCELF loan agreement.
(g) A statement of the amount of all local
funds necessary for the project and a financial certification from the loan
applicant which states that all local funds necessary for the project have been
secured, or will be secured within 30 days after loan offer, and a statement to
this effect from the funding source(s). If all funds for the project are being
requested from the WPCELF program, this certification need not be
submitted.
(h) A completed
financial capability summary.
(i) A
legal certification from the loan applicant and the loan applicant's legal
counsel, stating that (1) the loan applicant has authority under state laws and
regulations to receive WPCELF loan assistance, to collect user charges through
an approved user charge ordinance, to enforce the user charge ordinance and
sewer use ordinance, to repay the loan under the terms of the loan agreement,
to comply with all other terms of the loan agreement, to own, operate, maintain
and replace the facilities to be constructed with WPCELF loan funds, and that
(2) there are no restrictions under federal or state laws or regulations which
may prevent the loan applicant from executing the WPCELF loan agreement and
implementing the project.
(j) If
new real property or easements are necessary to construct the project, clear
site certificates from the loan applicant and the title counsel indicating that
the loan applicant has secured all such real property and easements (including
power and other utilities).
(k)
Completion of the intergovernmental review process as described in Appendix G
of these regulations, and submittal of a completed intergovernmental review
certification, any intergovernmental review agency comments received, and the
action required to address all comments prior to awarding contracts for
construction.
(l) All other
permits, forms, documents, and supporting information that may be required by
the Department.
B. Award of WPCELF Loan
(1) Upon determination by the Department that
(a) all applicable requirements of these regulations have been met, (b) all
documents submitted with the application are approvable, (c) all applicable
permits have been issued or will be issued, and (d) funds are available for the
amount of the WPCELF loan application, the Executive Director will execute and
transmit a WPCELF loan offer (includes an offer letter and loan agreement) to
the loan recipient. In addition to the estimated allowable project costs as
described in Appendix A of these regulations, the loan offer may include a
construction contingency, as determined by the Department, in the project
budget.
(2) Upon receipt of the
WPCELF loan offer, the loan recipient must execute and return it to the
Department, along with a certified copy of a resolution, if not previously
submitted, by the loan recipient's governing body authorizing acceptance of the
loan offer within the time frame established in the WPCELF loan offer. The loan
offer becomes void if not executed and returned within the time frame
specified, unless extended by the Executive Director.
(3) Upon return of the executed WPCELF loan
agreement to the Department, any administration fee established in the loan
agreement will be processed accordingly and such fee will be paid to the
appropriate Department administration fund.
C. Construction Phase
(1) Schedule. The following submittals,
approvals, and actions will be required during the construction phase of the
project. The Department may establish other time frames within the loan
agreement when properly justified.
(a) Within
30 days after the original loan offer all local funds necessary for the project
must be secured and proof of such must be submitted to the
Department.
(b) Within 90 days
after the original loan offer, the loan recipient (1) must execute and submit
to the Department a copy of all contracts for construction/ equipment/supplies
and engineering planning/design and construction phase services, including
contracts for land acquisition, legal, and other professional services, and
must issue any remaining notices to proceed, begin remaining construction work,
begin purchase of any remaining equipment/supplies funded under the loan
agreement and transmit a copy of all notices to proceed to the Department, and
(2) if any contracts must be bid, the loan recipient must also submit a
completed loan agreement amendment request (to reflect as-bid and other
executed construction contract amounts, all other executed contract amounts, a
construction contingency as determined by the Department, and any original
administration fee) to the Department.
The loan recipient will be responsible for assuring that
every appropriate procedure and incidental legal requirement is observed in
awarding these contracts.
After review, the Department will determine whether a request
for an increased loan amount is justified and eligible and whether funds are
available. The Department may, if determined necessary and appropriate,
transmit to the loan recipient an amended WPCELF loan offer, which includes in
the project budget (a) as-bid (if applicable) and other executed construction
contract amounts, (b) all other contract amounts, (c) a construction
contingency as determined by the Department, and (d) any original
administration fee. Upon receipt of an amended WPCELF loan offer, the loan
recipient must execute and return the agreement to the Department within the
timeframe established in the WPCELF loan offer letter. After execution of
the original loan agreement, or if applicable the amended WPCELF loan
agreement, the WPCELF loan amount will not amount must be paid by the loan
recipient from sources other than WPCELF funds.
(2) Preconstruction Conferences.
If determined necessary by the loan recipient, the loan recipient may arrange
and hold a preconstruction conference and, if held, must notify and allow
attendance and participation by the Department.
(3) Observation During Construction. During
all times that construction work is being performed which requires the services
of a registered engineer, the loan recipient must provide for full-time
observation of the project by the engineer or his staff and must require the
engineer's assurance that the work is being performed in a satisfactory manner
in accordance with the WPCELF loan agreement and the approved plans,
specifications, and contract documents, approved change orders, and in
accordance with sound engineering principles and construction practices. Less
than full-time observation may be allowed when properly justified and approved
by the Department.
The Department is authorized to observe the construction of
any project at any time for compliance with the terms of the loan agreement and
to determine if the loan recipient is assuring that plans, specifications and
contract documents are being followed. A representative may be stationed at the
construction site by the Department. Such observation will not subject the
Department to any action for damages or other liability. Such observation will
not release the contractor from any obligation to perform the work in
accordance with the requirements of the contract documents, nor the engineer
from determining compliance with the requirements of the contract documents,
nor the loan recipient from insuring compliance with the terms of the loan
agreement.
The contractor, engineer, and the loan recipient must furnish
the Department with every reasonable opportunity and means for observing
whether the work as performed appears to be in accordance with the requirements
of the loan agreement. The Department is authorized to observe and require
submission of daily logs, record drawings, file notes, and any other documents
prepared by any party in relation to the WPCELF funded project.
(4) Observation of Materials and
Equipment. The Department is also authorized to observe all equipment and
materials furnished, including observation of the preparation or manufacture of
the equipment and materials to be used.
(5) Construction Deficiencies
(a) In the event construction procedures,
materials or equipment appear to the Department to be substandard, otherwise
unsatisfactory, and/or not in conformity with these regulations or the loan
agreement, the Department may determine such work unallowable for WPCELF loan
participation, unless the loan recipient takes such action, through the
engineer if applicable, in the manner provided for in the construction contract
to correct any such deficiencies.
(b) The Department may immediately begin
withholding WPCELF loan payments should such substandard or unsatisfactory
construction work, materials, or equipment become apparent and may require the
loan recipient to repay any previously paid amounts related to such work,
within 30 days of such notification. Interest may be charged on such delinquent
repayments after expiration of the 30-day period at the rate established in
Rule 5.3.E.(6) of these regulations. Alternatively, the Department may withhold
such amounts from subsequent payment requests.
(c) In addition to normal testing procedures
required of the loan recipient, should questions arise concerning the
construction work, materials, or equipment, for WPCELF loan allowability
purposes the Department may request the loan recipient to perform reasonable
additional tests of construction materials, equipment, or processes which the
Department determines to be necessary to answer such questions during or after
the construction of the project. All tests, whether for the Department or the
engineer, must conform to current American Water Works Association, American
Association of State Highway and Transportation Officials, or American Society
of Testing and Materials published procedures, or similar acceptable criteria.
The Department will specify which tests are applicable, if not described in the
plans, specifications, and contract documents for WPCELF loan allowability
purposes. Samples for such testing must be furnished free of cost to the
Department upon request.
(6) Change Orders
(a) General. In the event a determination is
made by a loan recipient after a construction contract is let that changes or
modifications to the original contract are necessary or would better serve the
purpose of the loan recipient, the loan recipient may, at its discretion,
execute such change orders pertaining to the construction that are necessary
under the circumstances, as provided in the contract documents and when in
accordance with state purchasing law. Change orders must not change, vary, or
alter the basic purpose or effect of the project unless allowed by the
Department. Changes must be technically adequate, the costs and time extensions
must be necessary and reasonable, and allowable/unallowable costs must be
appropriately separated.
(b) Change
Order Submittals. After completion of the claims resolution and/or change order
negotiation process between the loan recipient and the contractor, such changes
on appropriate fully executed documents must be submitted to the Department in
order to obtain a WPCELF loan eligibility/allowability determination.
All change order submittals shall include sufficient
documentation for the Department's eligibility/allowability and technical
review, as determined by the Department.
If any change order is submitted to the Department that is
not complete and fully executed by the loan recipient, and the contractor and
the engineer when appropriate, the Department may return such change order
without review. However, unilateral change orders executed by the loan
recipient and the engineer when appropriate, and identified as such, that are
issued in accordance with the contract documents may be submitted to the
Department in order to obtain a WPCELF loan eligibility/allowability
determination.
The loan recipient may submit a complete and fully executed
change order which has been executed conditional upon a positive WPCELF loan
eligibility/allowability determination by the Department.
If possible, the allowability determination of a change order
should be secured from the Department before the work is started, particularly
for change orders requesting time extensions as per Rule 5.3.C.(6)(c) below.
This determination may also be secured after the work is started; however, the
loan recipient must bear the cost if the work is determined to be ineligible or
unallowable.
When the eligible cost of a project will be significantly
reduced by a change order or change orders, the Department may issue an
amendment to the loan agreement decreasing the loan amount, and the loan
recipient must execute such amendment within the time frame established by the
Department.
(c) Time
Extensions. Change orders which include time extensions and/or documentation
that the loan recipient is implementing all legal remedies provided in the
contract documents for failure to complete construction when required, must be
submitted to the Department prior to the date of the Department's final
construction observation, as specified in Rule 5.3.D.(1) of these regulations.
Otherwise, construction and construction-related work which occurs after the
current allowable contract completion date will be unallowable. Justification
for contract time extensions included in a change order must be prepared, but
need not be submitted to the Department unless the total time extensions for
the contract exceed 25% of the original contract time, in which case
justification for all time extensions must be submitted to the Department for
an allowability determination.
Construction and construction-related work which occurs after
the date representing a 25% time extension to the original contract time are
allowable only to the extent determined as such by the Department, pursuant to
review of the justification for all time extension change orders.
Construction and construction-related work which occurs after
the date representing a 25% time extension to the original contract time, and
for which a time extension change order cannot be adequately justified by the
loan recipient and determined allowable by the Department, is not allowable
unless the Department determines that the loan recipient is implementing all
legal remedies provided in the contract documents for failure to complete
construction when required.
(7) Contract Claims. The Department is not a
party to any contract between the WPCELF loan recipient and the construction
contractor(s), the consulting engineer(s), the attorney(s), the equipment
supplier(s), the subcontractor(s) or any other parties.
Upon execution of any contract between the loan recipient and
any other party in regard to a WPCELF funded project, the Department does not
assume any authorities, duties, responsibilities, or liabilities under such a
contract.
The Department does not have any authority, duty,
responsibility, or liability in contract claims identification, negotiation,
resolution, or any other actions regarding contract claims under the
contract(s) between the loan recipient and any other party.
No actions taken by the Department, either directly or
indirectly, in regard to the WPCELF loan funded project constitute or establish
any determinations, authority, duty, responsibility, or liability under the
contract(s) between the loan recipient and any other party.
The loan recipient and the contracting party must resolve all
claims and contract disputes by negotiation, arbitration, litigation, or other
means as provided in the contract documents and state law, prior to submission
of any change order or other documents to the Department, in order to obtain a
WPCELF loan eligibility/allowability determination.
(8) Contractor's Bankruptcy or Default. In
the event of a contractor's bankruptcy or default, any proposed agreements with
the bonding company (other than the bonding company serving as general
contractor or fully bonding another contractor acting as their agent) must be
submitted for WPCELF loan allowability determination by the Department prior to
execution. If the loan recipient determines that re-award of the construction
contract, or a portion thereof, is necessary due to contractor bankruptcy or
default, such proposed re-award contracts must be submitted for WPCELF loan
allowability determination by the Department prior to execution. The loan
recipient will be responsible for assuring that every appropriate procedure and
incidental legal requirement is observed in advertising for bids or otherwise
re-awarding a construction contract if this course of action is
taken.
D. Post
Construction Phase
(1) Within 10 days after
construction completion of each construction contract, the loan recipient must
submit a determination of construction completion and must request a final
construction observation by the Department.
All change orders which include time extensions and/or
documentation that the loan recipient is implementing all legal remedies
provided in the contract documents for failure to complete construction when
required must be submitted to the Department prior to the date of the
Department's final construction observation; otherwise, construction and
construction-related work which occurs after the current allowable contract
completion date will be unallowable.
The final construction observation may be delayed by no more
than 30 days after the current construction completion date, unless further
delayed by the Department pursuant to review of the loan recipient's request
and justification for such delay. Should the Department staff decide that the
determination of construction completion and request for final construction
observation are being unreasonably delayed, a final construction observation
may be immediately performed by the Department.
(2) Within 30 days after the final
construction observation performed by the Department, the loan recipient must
submit: the final payment request; summary change order(s), if applicable, for
all construction contracts; a complete set of record drawings for any and all
other new construction work requiring design by a registered engineer and, if
applicable, a certification from the engineer, or other qualified personnel
when applicable, that the project has been constructed substantially in
accordance with the design; final construction phase services contract
amendments, if any; and all other administrative forms and documents required
by the loan agreement and the Department. Payment requests submitted after this
date are not allowable, regardless of when the costs were incurred.
(3) Any other submittals or actions required
by the loan agreement must be performed when so required and are subject to
review and approval by the Department.
(4) Following receipt of the final payment
request from the loan recipient, or upon expiration of the deadline established
in Rule 5.3.D.(2) above, the Department or other designated parties may perform
an audit of the WPCELF loan project for the purpose of determining compliance
with the WPCELF loan agreement and to determine final allowable costs, payments
made to date, and any additional payments due the loan recipient or repayment
due the Department.
(5) Upon
completion of the WPCELF audit, or if an audit is not performed, following
expiration of the deadline established in Rule 5.3.D.(2) above, the Department
will transmit to the loan recipient a copy of the audit, if performed, a final
determination of allowable costs and payments due the loan recipient or
repayments due the state, and a final loan agreement. The final determination
will establish a 30-day appeal deadline, as required by Rule 5.3.D.(6) below,
and will require repayment of any overpayment with an interest penalty to begin
accruing on the appeal deadline. The interest penalty will be as established in
Rule 5.3.E.(6) of these regulations.
(6) Within 30 days after the date of the
above final determination of allowable costs, the loan recipient may submit a
written appeal of the final determination including a written justification of
the reason for the appeal, and supporting documentation for any disputed costs
of the final determination; otherwise, the final determination of allowable
costs will become the final allowable costs for purposes of WPCELF loan
payments and the WPCELF loan repayment agreement.
(7) Should an appeal be submitted in
accordance with Rule 5.3.D.(6)
above, the disputes procedures established in Appendix D of
these regulations will be followed in order to resolve the dispute and
establish the final allowable costs.
(8) If an appeal is not submitted prior to
expiration of the final determination appeal period, the loan recipient must
execute and submit the final loan agreement to the Department within the
deadline established by the Department.
(9) Upon receipt of the executed final loan
agreement from the loan recipient, the Department will transmit it to the State
Tax Commission for execution and return to the Department.
(10) Upon receipt of the executed final loan
agreement from the State Tax Commission, the Department will transmit a copy to
the loan recipient, and repayment of the WPCELF loan will commence under the
terms of the loan agreement.
E. Payments to WPCELF Loan Recipients.
Payments from the WPCELF may be made to WPCELF loan recipients under the
following conditions:
(1) Payments may be
requested by and may be made only to loan recipients, in accordance with the
WPCELF loan agreement and the loan recipient's contracts for eligible and
allowable services and construction for work performed within the project scope
and budget period.
(2) Excluding
the payment request for the administration fee, payments may be requested no
more often than on a monthly basis, except as required by state law. Payment
requests cannot include costs incurred during two different state fiscal years;
therefore, two payment requests may be submitted in July: one for costs
incurred through June 30th and a second for costs incurred after June
30th.
(3) The loan recipient must
deduct from all WPCELF payment requests the amount of funds provided or to be
provided from all other state and federal agency funding sources for allowable
WPCELF project costs.
(4) Payment
requests must be submitted by the loan recipient to the Department and must
include the following:
(a) Completed WPCELF
payment request form;
(b)
Cumulative invoices, which clearly identify scope, time period and the
particular project or contract, for all allowable costs for which payment is
requested, except that invoices need not be submitted for any administration
fee included in the loan agreement; and
(c) Any other documents required by the loan
agreement;
(5) The
timing of WPCELF payments will be as follows, provided the loan recipient is in
compliance with the requirements of these regulations and all provisions of the
WPCELF loan agreement.
(a) Payment for the
administration fee must be the first payment request submitted and will be paid
to the appropriate Department administration fund.
(b) Payments for design and construction
phase services may be requested and paid based upon incurred allowable costs.
Such requested payment amounts are subject to verification by the
Department.
(c) Payments for
allowable construction work may be requested and paid based upon in-place work
or delivered materials and equipment as specified in the construction
contract(s), and as supported by invoices and verified as accurate by the
consulting engineer, if applicable, and the loan recipient, less the retainage
withheld by the loan recipient. Such requested payment amounts are subject to
verification by the Department.
(d)
Payments for allowable land may be requested and paid immediately after loan
agreement execution, provided the Department has approved the purchase price
and proof of the purchase price has been submitted with the payment
request.
(e) The final loan payment
will not be made until submission of all documents required by Rule 5.3.D.(2),
enactment of the user charge ordinance as required by Rule 5.3.A.(3)(f), and
determination that the loan recipient is in compliance with all other
applicable provisions of the WPCELF loan agreement.
(6) Any payments made to the loan recipient,
which are at any time determined by Department to be for costs not in
accordance with the WPCELF loan agreement, for ineligible or unallowable costs,
or for costs related to waste, fraud, abuse or illegal acts under state or
federal law, must be repaid to the WPCELF fund within 30 days of such
notification by the Department. Interest may be charged on such delinquent
repayments after expiration of the 30-day period at a rate of ten (10) percent
per annum, compounded monthly. Alternatively, the Department may withhold such
amounts from subsequent payment requests.
F. WPCELF Loan Repayment Requirements. All
WPCELF loan repayments are subject to the following requirements:
(1) Interest on amounts paid to the loan
recipient will commence on the original construction contract completion
date.
(2) The amount of interest
accrued between the original construction contract completion date and the
initiation of the repayment process will be added to the final allowable
project costs to determine the principal amount to be repaid by the loan
recipient.
(3) The repayment period
will be from the time of transmittal of the final loan repayment agreement to
the loan recipient to the date not later than ten (10) years after project
completion, or sooner, if so requested by the loan recipient.
(4) Repayments are to be made by counties on
a semi-annual basis through homestead exemption annual tax loss reimbursement
with holdings, by municipalities on a monthly basis through state sales tax
with holdings if adequate to provide such repayments, and by all other loan
recipients through submission of monthly payments in accordance with state law,
and must commence no sooner than 90 days after and no later than one year after
project completion.
(5) The
repayment interest rate will be established in the WPCELF loan agreement and
repayment agreement, in accordance with the appropriate Notice of Funds
availability.
(6) Interest will be
compounded monthly.
