RULES AND REGULATIONS
PART VII. PENNSYLVANIA INFRASTRUCTURE INVESTMENT AUTHORITY
[25 PA. CODE CHS. 962, 963 AND 965]
Water Pollution Control Revolving Fund
[27 Pa.B. 6080] The Board of Directors (Board) of the Pennsylvania Infrastructure Investment Authority (Authority) by this order deletes § 962.1 (relating to value engineering analysis); amends Chapter 963 (relating to Pennsylvania Infrastructure Investment Authority Assistance); and adds Chapter 965 (relating to the Clean Water State Revolving Fund). The amendments set forth the requirements of the Clean Water State Revolving Fund (CWSRF) and provide for a second opinion project review in accordance with sections 5(c)(2) and 6(4) of the Pennsylvania Infrastructure Investment Authority Act (35 P. S. §§ 751.5(c)(2) and 751.6(4)).
A. Effective Date
The amendments are effective upon publication in the Pennsylvania Bulletin.
B. Statutory Authority
The amendments are promulgated under the statutory authority of sections 5(c)(2) and 6(4) of the Pennsylvania Infrastructure Investment Authority Act which grants to the Board the authority to establish the CWSRF; make bylaws for the management and regulation of its affairs make and from time to time adopt, amend and repeal rules and regulations governing the administrative procedures and business of the authority; and accept grants from and enter into contracts or other transactions with any Federal, State or local agency.
C. Purpose and Background
The Authority was created on March 1, 1988, by the Pennsylvania Infrastructure Investment Authority Act (act) (35 P. S. § 751.1--751.20). The Authority is governed by a Board consisting of 13 members. The Authority, acting through its Board awards loans and grants to finance or assist in financing water, sewer and stormwater infrastructure projects to protect the health and safety of the citizens of this Commonwealth and to promote the economic development of this Commonwealth.
The act requires the establishment of a State Revolving Fund in accordance with section 212 of the Water Quality Act of 1987 (33 U.S.C.A. §§ 1251--1387), which provided appropriations necessary for the establishment of the CWSRF through the 1994 Federal fiscal year. Thereafter, the Federal government has provided continuous appropriations even though the Water Quality Act of 1987 has not been reauthorized. The Authority established the CWSRF in compliance with section 212 of the Water Quality Act and closed its first loan funded by the CWSRF on August 15, 1989. Up through June 30 1997, the Authority has disbursed $324.5 million to finance sewerage infrastructure needs throughout this Commonwealth.
These amendments are necessary to set forth the CWSRF program and to clarify certain requirements which have been changed from those previously required by the Water Quality Act of 1987. One provision is the value engineering requirement which these regulations replace with a less onerous requirement, the second opinion project review. Like value engineering, the second opinion project review has the objective of indicating the most cost effective alternative available to the applicant but rather than utilizing an entire value engineering team to conduct the review, it requires as few as one independent design engineer. Also like the value engineering requirement, the second opinion project review is only required for projects with an anticipated cost of construction plus contingency in excess of $10 million. The Authority has determined that value engineering has resulted in sufficient cost savings to warrant the incorporation of a second opinion project review for all projects in Chapter 963.
D. Summary of Comments and Responses on Proposed Rulemaking
Notice of proposed rulemaking was published at 25 Pa. B. 3000 (July 29, 1995). The Authority received comments from the Pennsylvania State Association of Township Supervisors (PSATS) and the Independent Regulatory Review Commission (IRRC). Responses to these comments follow.
IRRC recommended that the Authority's threshold for the value engineering requirement be no greater than the Federal threshold of $10 million and that the parameters that trigger the requirement be more clearly identified. The Authority agrees with IRRC and has changed the threshold for triggering the requirement to a total project construction cost plus contingency in excess of $10 million dollars. Further, the Authority revised the requirement to make the review less costly to perform and has renamed the section to the second opinion project review.
The PSATS commented on the value engineering requirement referring to it as ''simply an unfunded mandate'' and further commenting that ''[i]t makes no sense to add another layer of costs onto an application merely to save costs. PENNVEST is thus asking the applicant to absorb the cost of the study which is designed to save PENNVEST money.''
The Authority does not agree that the value engineering requirement amounts to an unfunded mandate. No one is obligated or mandated to apply to the Authority for financing, therefore an application requirement can not be construed as an unfunded mandate. In any event, the Authority appreciates the concern regarding the increase in cost to the applicant and has revised the requirement to a less costly second opinion project review whereby a single design engineer may evaluate the project rather than a value engineering team and whereby the review is undertaken when the cost of construction plus contingency is greater than $10 million rather than $5 million. Further, any cost incurred by the applicant in conducting the review may be eligible for funding from the Authority.
The Authority does not agree with the PSATS suggestion that the value engineering requirement (reconfigured and renamed the second opinion project review) has been designed to save the Authority costs. Rather, it is the Authority's position that the requirement is designed to save the applicant and ultimately the community excessive project costs. The amount of money the Authority has available to finance infrastructure projects is finite. Therefore, the money not disbursed by the Authority for the funding of a particular project is used to fund some other project. In application, the cost savings of one community may be the funding source for another.
The Authority quantified the cost savings for those projects where value engineering was required and found that the average savings was 5.3 times the cost of the value engineering study. Therefore, it is the opinion of the Authority, that the Authority is being fiscally responsible requiring the second opinion project review and by requiring the applicant to incur an additional application cost only to result in a greater project cost savings for the community.
IRRC recommended the Authority clarify the requirements of the value engineering study and require the study be undertaken earlier in the design phase. The Authority agrees with IRRC and while it revised the value engineering requirement to the less onerous second opinion project review, it clarified the language in the regulation as to what is required. Also at the suggestion of IRRC, the Authority revised § 965.7(b)(1) (relating to second opinion project review) to require completion of the second opinion project review by the time the project design is 20%to 40% complete rather than prior to or at the time the project design is 50% complete.
IRRC suggested the Authority clarify the interrelationship of the Authority and the applicant in various provisions of the regulation regarding the value engineering requirement. To follow are each of IRRC's suggestions and the Authority's respective position: in the proposed rulemaking, IRRC objected to the ambiguity in the requirement that the value engineering team of choice be satisfactory to the Authority. These final-form regulations changed the requirement from a value engineering team to either a single design engineer or a design engineering firm either of which must be independent of the project engineer and the choice of which is no longer subject to the Authority's review and satisfaction. Similarly, IRRC commented that requiring the implementation of the value engineering team's recommendations to the maximum extent possible subject to the Authority's approval needed clarification. The Authority agrees and removes the requirement ''subject to the Authority's approval'' from § 963.20(b)(4) (relating to second opinion project review) and § 965.7(b)(4). IRRC suggested the Authority place a time frame for rejecting the teams recommendation. The Authority agrees and includes in § 963.20(b)(5) and § 965.7(b)(5) the proviso that the applicant submit its proposal to the Authority within 90-calendar days from the completion of the second opinion project review with its reasons, if any, for not incorporating the second opinion project review recommendations. Finally, IRRC suggested clarification on when the Administrative staff may recommend disapproval to the Board for any portion of a project not incorporating a study recommendation as set forth in §§ 963.20(b)(5)(i) and 965.7(b)(5)(i). The section has been changed to state that the administrative staff may not recommend approval to the Board for that portion of the project. IRRC suggested identifying at what Board meeting this would occur. Since projects go to the Board based upon ranking priority, not date of application, the administrative staff would make its recommendation for approval at the meeting which the project ranks high enough to be funded.
IRRC suggested clarification of the phrase ''excessive infiltration/inflow'' as stated in § 965.6(a)(4)(i) (relating to application procedures), of the proposed rulemaking. This was, but is no longer, a requirement of the Water Quality Act of 1987 and it, along with § 965.6(a)(4)(iii) has been removed from the final-form regulations.
IRRC recommended that the Authority change § 965.9(h) (relating to loan conditions) from requiring the borrower to maintain financial records in accordance with government accounting standards to requiring compliance with Generally Accepted Accounting Principles. The Authority requires borrowers, of its funding programs, to comply with the less restrictive government accounting principles and has done so from inception. Having had no problem with this requirement and the borrower's understanding of what is required, the Authority sees no reason to require a more expansive standard than that imposed by the Federal government under the Water Quality Act of 1987.
Finally, IRRC recommended deleting the Authority's statement of policy in § 962.1. The Authority agrees and is reserving the section.
E. Compliance with Executive Order 1996-1, Regulatory Review and Promulgation.
The Authority reviewed these amendments and considered their purpose and likely impact upon the public and the regulated population under the directives of Executive Order 1996-1, Regulatory Review and Promulgation. These amendments address a compelling public health interest in setting forth the requirements for obtaining affordable financing from the CWSRF for the construction or rehabilitation of community sewerage systems in this Commonwealth. These amendments offer communities a cost effective way to address environmental concerns, some of which would not be addressed without the CWSRF financing.
F. Fiscal Impact and Paperwork Requirements.
These amendments will not have a negative fiscal impact on the Commonwealth, or political subdivisions or the private sector. In fact, cost savings can be anticipated for the applicant through the incorporation of the second opinion project review requirement.
These amendments will not cost the Commonwealth any new money. The CWSRF has been operational since 1989. The funding for the CWSRF comes from Federal appropriations under the Water Quality Act of 1987 and a 20% match in State funding. The Water Quality Act of 1987 only authorized appropriations up through the 1994 Federal Fiscal year. In any event, the Commonwealth has applied for and received continuous appropriations for the CWSRF from the Federal government up through the 1997 Federal fiscal year and has no reason to believe it won't receive another appropriation in 1998, despite the fact that the Water Quality Act of 1987 has not been reauthorized. The State match money required by the CWSRF comes from loan repayments of principal and interest and interest earned on investments of the Authority, as well as, certain previously authorized Commonwealth General Obligation Bond proceeds.
Since inception, the CWSRF has required value engineering for projects with costs exceeding $10 million. The value engineering analysis involves hiring a team to conduct an extensive review of the proposed project. These amendments reduce that requirement to a less extensive and less expensive requirement, the second opinion project review. Like the value engineering analysis, the second opinion project review is designed to save the applicant money on its project costs. In addition, it will reduce the cost of the requirement.
The amendments will not affect the paperwork requirements in this Commonwealth or political subdivisions or the private sector except that less paperwork from the applicant will be required as a result of the elimination of § 965.6(a)(4)(i) and (iii), Davis Bacon Wage Rates as set forth in the Davis-Bacon Act (40 U.S.C.A. § 276(a)--276 (a)(5)) and certain other Title II requirements of the Water Quality Act of 1987, deleted from the Appendix and the final-form regulations.
The application forms are provided by the Authority as well as all loan documents. Additional documents and information required by these regulations are routinely generated in the course of sound business and engineering practice. The reporting requirements are reduced to the minimum necessary to validate disbursements and record the progress of the project and status of the loan and to comply with Federal requirements. In most instances, the annual financial report of the facility or system can be used rather than a special budget report. The paperwork requirements are minimized to the extent possible consistent with prudent management of the Commonwealth and Federal funds.
G. Sunset Date
These final-form regulations will be reviewed periodically by the Authority. In addition, the administrative staff of the Authority will continuously monitor the program for backlogs and unnecessary delays in processing financial assistance applications and advise the Board of unnecessary administrative burdens on applicants. Accordingly, no sunset date is being established for the regulations at this tine.
H. Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), the Authority submitted a copy of the notice of proposed rulemaking published at 25 Pa.B. 3000 to IRRC and to the Chairpersons of the Senate Committee on Environmental Resources and Energy and the House Committee on Appropriations (Committees). In addition to the proposed rulemaking, IRRC and the Committees were provided a copy of the regulatory analysis form prepared by the Authority in compliance with the then applicable Executive Order 1982-2 ''Improving Government Regulations.'' Further, the Authority provided IRRC and the Committees with copies of the comments received on the proposed rulemaking as is required by section 5(b.1) of the Regulatory Review Act.
In preparing the final-form regulations, the Authority considered the comments received from IRRC, the Committees, the public and the informal comments received from the Department of Environmental Protection.
Under section 5(b.4) of the Regulatory Review Act, the Authority submitted the regulations as final-form rulemaking on August 21, 1997, to IRRC and the Committees. In addition to the final-form rulemaking, the Authority provided IRRC and the Committees with a regulatory analysis form prepared by the Authority in compliance with the Executive Order 1996-1, ''Regulatory Review and Promulgation,'' and the Regulatory Review Act. A copy of this material is available to the public upon request. On September 10, 1997, the Authority submitted a written request to IRRC to toll the regulatory review period, under section 5.1(g) of the Regulatory Review Act (71 P. S. § 745.5a(g)), to revise certain typographical errors in the regulations. IRRC did not object to the request for tolling and the Authority submitted the revised final-form regulations on September 18, 1997, to IRRC and the Committees.
The final-form regulations were deemed approved by the Committees on September 28, 1997, and approved at public meeting by IRRC on October 9, 1997, in accordance with section 5(c) of the Regulatory Review Act.
I. Contact Person
Further information may be obtained by contacting Jayne B. Blake, Assistant Counsel, Pennsylvania Infrastructure Investment Authority, Keystone Building, 22 South Third Street, Harrisburg, PA 17101 (717) 783-6776. Email address: jblake@pennvest.pa.state.us.
J. Findings
The Board finds that:
(1) Public notice of proposed rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations promulgated thereunder at 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and all comments were considered.
(3) These amendments do not enlarge the purpose of the proposed rulemaking published at 25 Pa. B. 3000.
(4) These amendments are necessary and appropriate for administration and enforcement of the authorizing act identified in Part B of this Preamble.
K. Order
The Authority, acting under its authorizing statute orders that:
(a) The regulations of the Authority, 25 Pa. Code Chapters 962, 963 and 965, are amended by amending §§ 963.1 and 963.11; by deleting § 962.1; and by adding §§ 963.20 and 965.1--965.10 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Authority shall submit this order and Annex A to the Office of General Counsel and the Office of Attorney General as required by law.
(c) The Authority shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall take effect upon publication in the Pennsylvania Bulletin.
PAUL K. MARCHETTI,
Executive Director(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 27 Pa.B. 5561 (October 25, 1997).)
Fiscal Note: 101-003. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 25. ENVIRONMENTAL PROTECTION
PART VII. PENNSYLVANIA INFRASTRUCTURE INVESTMENT AUTHORITY ASSISTANCE
CHAPTER 962. (Reserved) § 962.1. (Reserved).
CHAPTER 963. PENNSYLVANIA INFRASTRUCTURE INVESTMENT AUTHORITY ASSISTANCE § 963.1. Definitions.
The following words and terms, when used in this part, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Applicant--An owner or operator of a facility or system for the collection, treatment or disposal of wastewater, including industrial wastewater, or for the collection, treatment, storage or distribution of drinking water or of nonpoint source projects or estuary protection projects that submits a written application requesting financial assistance.
Approved applicant--An applicant whose application for financial assistance has been approved by the Board.
* * * * * Binding commitment--A legal obligation between the Authority and an approved applicant that defines the terms and conditions for financial assistance from the Authority including assistance from the Clean Water State Revolving Fund.
* * * * * Borrower--An approved applicant who has entered into a binding commitment with the Authority.
Clean Streams Law--The Clean Streams Law (35 P. S. §§ 691.1--691.1001).
Clean Water Act--The Federal Water Pollution Control Act of 1977, as amended by the Water Quality Act of 1987 (33 U.S.C.A. §§ 1251--1387).
* * * * * Construction--Actions necessary for the erection, building, acquisition, alteration, remodeling, improvement or expansion of drinking water or sewerage facilities or nonpoint source projects or estuary protection projects.
* * * * * EPA--The United States Environmental Protection Agency.
* * * * * Estuary protection project--A project necessary for development and implementation of an estuary conservation and management plan under section 320 of the Clean Water Act (33 U.S.C.A. § 1330).
* * * * * Nonpoint source project--A project which does not have a discernable or confined discrete conveyance, and which is necessary for the implementation of a nonpoint source pollution control program under section 319 of the Clean Water Act (33 U.S.C.A. § 1329).
Operation/maintenance costs--Costs associated with activities required to assure the dependable, efficient and economical function of wastewater or drinking water facilities, nonpoint source projects and estuary protection projects or costs associated with the preservation of the functional integrity and efficiency of equipment and structures, including preventative maintenance and replacement equipment.
Part I Permit--A National Pollutant Discharge Elimination System (NPDES) permit issued by the Department under section 5 of The Clean Streams Law (35 P. S. § 691.5) and section 402 of the Clean Water Act (33 U.S.C.A. § 1342).
Part II permit--A Water Quality Management permit issued by the Department under section 5 of The Clean Streams Law.
Project--The eligible costs associated with the acquisition, construction, improvement, expansion, extension, repair or rehabilitation of all or part of any system or facility, whether publicly or privately owned:
(i) For the collection, treatment or disposal of wastewater, including industrial waste, or for nonpoint source projects or estuary protection projects.
(ii) For the supply, treatment, storage or distribution of drinking water.
(iii) In a public system or facility for the control of stormwater, which may include, the transport, storage and infiltration of stormwater, or costs for the best management practices to address point or nonpoint source pollution associated with stormwater runoff, or other innovative techniques identified in the county-prepared watershed plan under the Storm Water Management Act.
* * * * * Second opinion project review--A review and evaluation of a project engineering design which shall include the analysis of the basic functions of a facility, system or process and shall identify alternatives, if any, for achieving these basic functions at lower costs or increased revenues. The evaluation shall be conducted by a design engineer or design engineering firm, at the discretion of the applicant. The design engineer or design engineering firm chosen by the applicant shall be independent of the project engineer and shall be a professional engineer licensed by the Commonwealth.
* * * * * Sewage Facilities Act--The Pennsylvania Sewage Facilities Act (35 P. S. §§ 750.1--750.20).
* * * * * Useful life--The period of time for which a facility operates and serves its intended purpose.
User--A single connection to a system.
* * * * * § 963.11. Eligible costs.
(a) In addition to the costs eligible for assistance enumerated in the act, eligible project costs considered by the Board include the following:
(1) Project design and engineering incorporated in the final project, including the development of prefeasibility, feasibility and planning studies, plans, specifications, cost estimates, surveys, project inspection and management and costs associated with the completion of a second opinion project review required under § 963.20 or § 965.7 (relating to second opinion project review).
* * * * * § 963.20. Second opinion project review.
(a) If the total estimated construction cost plus any amount allocated for contingency for a project is greater than $10 million, the applicant shall have a second opinion project review completed.
(1) Prior to project design, an applicant shall participate in a project consultation with the Department and, if required by this section, shall make plans for a second opinion project review.
(2) An applicant shall provide the Department with a time line indicating the anticipated beginning and end dates of the second opinion project review if a review is required by this section.
(b) An applicant shall meet the following requirements when undertaking a second opinion project review:
(1) The second opinion project review shall be planned for and completed by the time the project design is 20% to 40% complete, unless the applicant requests in writing from the Authority an extension of time due to some reasonable and unforeseen circumstance.
(2) The second opinion project review shall focus primarily on the treatment facilities but shall also include an analysis of the total project design. In either case, the review shall include an evaluation of cost effectiveness, complexity and impact of the project on the community.
(3) Upon completion of the second opinion project review, the reviewer shall provide a written report to the applicant which summarizes findings and describes proposed implementation of recommendations. The written report of the second opinion project review shall be issued under seal of a professional engineer licensed to practice in this Commonwealth.
(4) The applicant shall cause the implementation of the reported recommendations to the maximum extent feasible.
(5) A copy of the second opinion project review shall be submitted to the Authority along with a proposal addressing each recommendation and their incorporation into the project design unless to do so would not be cost effective, reliable or reasonable based upon the delay it would cause in the project or because to do so would cause an unreasonable burden upon a factor critical to the treatment or collection system and the environmental impact of the project. The copy of the second opinion project review and the applicant's proposal shall be submitted to the Authority within 90-calendar days from the completion of the review.
(i) If the Authority disagrees with the reason set forth by the applicant for not adopting a second opinion project review recommendation, the administrative staff may not recommend approval of financial assistance to the Board for that portion of the project.
(ii) An applicant may appeal the administrative staff's recommendation to the Board, in accordance with 1 Pa. Code Part II (relating to general rules of administrative practice and procedure).
(c) The second opinion project review report may be used by the administrative staff in the cost effectiveness evaluation performed during the application review process.
CHAPTER 965. CLEAN WATER STATE REVOLVING FUND Sec.
965.1. Definitions. 965.2. Applicability. 965.3. Eligibility. 965.4. Eligible costs. 965.5. Preapplication procedures. 965.6. Application procedures. 965.7. Second opinion project review. 965.8. Terms of financial assistance. 965.9. Loan conditions. 965.10. Statutory and procurement requirements. § 965.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Ad valorem tax--A tax based on the value of real property.
Affirmative performance certificate--A certification by the borrower 1 year following the date of initiation of operation stating that the wastewater treatment portion of the project is capable of meeting the design specifications and effluent limitations in the NPDES Part I Permit.
CWSRF--Clean Water State Revolving Fund--The funding account established in accordance with the requirements of both the act and the Water Quality Act for the purpose of establishing an environmental infrastructure revolving loan program.
Capital financing plan--A 10-year plan which projects future requirements for wastewater treatment service within the applicant's jurisdiction which includes a description of necessary future expansions or reconstruction for wastewater treatment services, or both, and how this future expansion or reconstruction will be financed.
Corrective action report--A report submitted by the borrower if an affirmative performance certification cannot be provided following the 1-year performance period containing an analysis of the causes of the inability to certify, a schedule for the necessary corrective actions and a date that an affirmative performance certification is expected.
General facilities plan--The plans and studies which directly relate to sewerage facilities which are needed to comply with the Water Quality Act and The Clean Streams Law.
IUP--Intended Use Plan--A plan identifying the intended uses of the moneys in the CWSRF and describing how those uses support the goals of the CWSRF.
Infiltration--Groundwater entering a sewer system through broken pipes, defective pipe joints or illegal connections of foundation drains.
Inflow--Surface water runoff that enters a sewer system through manhole covers; exposed, broken and defective pipe joints; cross connections between storm sewers and sanitary sewers; and illegal connections of roof leaders, cellar drains, yard drains or catch basins.
Initiation of operation--The date specified by the borrower when the project begins operation for the use for which it was planned, designed and built. The term includes only essential facilities considered functional and does not include nonoperational facilities such as landscaping which may not have been completed.
NEPA--The National Environmental Policy Act of 1969 (42 U.S.C.A. §§ 4321--4347)
NPDES permit--A National Pollutant Discharge Elimination System permit. A permit issued by the Department of Environmental Protection under section 5 of The Clean Streams Law (35 P. S. § 691.5) and section 402 of the Clean Water Act (33 U.S.C.A. § 1342).
Project priority list--The list of identified public sewerage project needs in this Commonwealth established in accordance with Chapter 103 (relating to financial assistance).
SERP--State Environmental Review Processes--Processes based upon adopted State regulations set forth in Chapters 71, 109, 963 and 965 which include procedures substantially equivalent to a NEPA review, as described by 40 CFR Part 6, Subparts A--E.
Sewer use ordinance--An ordinance or resolution adopted by a governmental unit establishing the requirements for the users of the sewerage facilities. The requirements include:
(i) The prohibition of new connections from inflow sources.
(ii) The design and construction of new connections in accordance with local municipal plumbing codes.
(iii) Wastewater may not contain toxics or pollutants in amounts which endanger public safety or the physical integrity of the sewerage facilities as determined by criteria in 40 CFR Part 403 (relating to general pretreatment regulations for existing and new sources of pollution).
(iv) The prohibition against violations of effluent limits or water quality limits as outlined in the NPDES permit.
User charge system--The method by which charges are levied on users of sewerage systems, or that portion of the ad valorem taxes paid by a user, for the user's proportionate share of the cost of debt service, operation and maintenance (including replacement) of that system. The user's proportionate share shall be based on the ratio of the user's contribution to the total wastewater loading from all users. The user charge system shall also include the following:
(i) A provision that each user will receive annual written notice of the user rate which may be in the form of a bill or a form satisfactory to the Authority.
(ii) A provision for a financial management system which will accurately account for revenues and expenditures of the sewer system.
Water Quality Act--The Water Quality Act of 1987 (33 U.S.C.A. §§ 1251--1387).
§ 965.2. Applicability.
(a) This chapter applies to governmental units which own sewerage facilities and which apply for financial assistance for sewerage projects and governmental units or private individuals who are constructing or maintaining nonpoint source projects or estuary protection projects.
(b) Chapter 963 (relating to Pennsylvania Infrastructure Investment Authority Assistance) also applies to this chapter except to the extent it is inconsistent with this chapter.
§ 965.3. Eligiblity.
Eligible applicants are governmental units which own or will own sewerage facilities or governmental units and private individuals who are constructing or maintaining nonpoint source projects or estuary protection projects.
§ 965.4. Eligible costs.
Eligible costs include:
(1) Costs approved by the Board which are necessary for construction of public sewerage facilities.
(2) Costs approved by the Board which are necessary for construction associated with secondary treatment or advanced treatment, or both.
(3) Costs approved by the Board which are necessary for construction associated with cost-effective alternatives to secondary treatment or advanced treatment, or both.
(4) Costs approved by the Board which are necessary for the construction of interceptor sewers.
(5) Costs approved by the Board which are necessary for construction associated with the correction of an infiltration/inflow problem.
(6) Costs approved by the Board which are necessary for construction associated with the rehabilitation or replacement of collector sewer systems only when the applicant demonstrates that the collector sewer system is necessary to assure the total integrity of the sewerage system.
(7) Costs approved by the Board which are necessary for construction of new collector systems only when the applicant demonstrates that sufficient treatment capacity exists.
(8) Costs associated with the completion of the second opinion project review required under § 965.7 (relating to second opinion project review).
(9) Other eligible costs as defined under § 963.1 (relating to definitions) which are approved by the Board, except that costs associated with the purchase of land for rights of way or easements under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C.A. §§ 4601--4655), are not eligible.
(10) Costs associated with the refinancing of local debt incurred after March 5, 1985, only when the applicant demonstrates the following:
(i) The construction started after March 5, 1985, but before March 1, 1988.
(ii) The original debt was incurred to comply with a State or Federal compliance schedule.
(iii) The project has met the requirements of the Water Quality Act.
(iv) The project has undergone an environmental review as required by the Department.
(11) Costs associated with the refinancing of local debt incurred after March 1, 1988, only when the applicant demonstrates that it meets the requirements of § 963.17 (relating to funding limitations).
(12) Costs approved by the Board which are necessary for the implementation of a nonpoint source project or estuary protection project.
§ 965.5. Preapplication procedures.
An applicant may be required to attend a preapplication conference during which financial assistance documents will be identified and explained. This conference will not be considered as part of the formal application procedure and verbal statements made during the conference will not bind the Authority, the Department or the applicant.
§ 965.6. Application procedures.
(a) In addition to the requirements under Chapter 963 (relating to Pennsylvania Infrastructure Investment Authority Assistance), an applicant for sewerage facilities shall also include the following information in the application:
(1) An ordinance or resolution passed by the governmental unit authorizing the filing of the application and identifying the individuals authorized to sign the application and act on behalf of the governmental unit.
(2) Two separate ordinances or resolutions authorizing the governmental units to file an application and designate the governmental unit to be the lead applicant and a draft of an intermunicipal agreement, if two or more governmental units are filing one application.
(3) A written statement that the applicant will comply with applicable Federal and State laws and regulations required for projects funded by the CWSRF.
(4) A comprehensive official sewage plan or update revision developed in accordance with the Pennsylvania Sewage Facilities Act (35 P. S. §§ 750.1--750.20) and Chapter 71 (relating to Administration of Sewage Facilities Planning Program) and which includes the following requirements of projects funded by the CWSRF:
(i) A written certification that innovative and alternative technologies were considered and evaluated when developing solutions to the applicant's needs.
(ii) A written certification that the applicant had one public hearing before the adoption of its comprehensive official sewage plan.
(5) A written certification that the project is included in the governmental unit's official sewage plan or revision approved by the Department under the Pennsylvania Sewage Facilities Act.
(6) A written certification that the project will comply with the CWSRF program and will undergo the SERP as required by the Department and the Authority.
(7) A copy of permits or approvals necessary for the completion of the project as designed except for permits or approvals which cannot be obtained until construction is started.
(8) A copy of a draft sewer ordinance and a draft ordinance establishing a user charge system.
(9) A copy of a draft engineering agreement for building services.
(10) A copy of the Capital Financing Plan.
(11) Other information which may be required by the Authority to demonstrate the applicant's compliance with the laws of the Commonwealth and to effectuate the purposes of the act and the CWSRF.
(b) In addition to the requirements under Chapter 963, applicants for nonpoint source projects or estuary protection projects shall also include a written certification that the applicant will comply with applicable Federal and State laws and regulations required for projects funded by the CWSRF.
(c) An applicant is not required to supply duplicate copies of information when satisfying the application requirement of this section. The applicant may meet this requirement by referencing another part of the application where this information is being supplied.
(d) The IUP will be prepared by the Authority based upon a proposed annual budget and the project priority list and will contain proposed fundable projects. The IUP will consist of those projects which are expected to be funded. A project on the IUP may be bypassed when the Authority determines that the project on the approved IUP list is not ready to proceed, the applicant has other funds available at reasonable rates, or the project is ineligible under the act or this chapter. A project from the project priority list may replace a project from the IUP. These projects shall be ready to proceed and also meet the requirements of this chapter.
(e) The IUP may be amended to remove projects which are ineligible or add projects from project priority list.
§ 965.7. Second opinion project review.
(a) If the total estimated construction cost plus any amount allocated for contingency for a project is greater than $10 million, the applicant shall have a second opinion project review completed.
(1) Prior to project design, the applicant shall participate in a project consultation with the Department and, if required by this section, shall make plans for a second opinion project review.
(2) When a second opinion project review is required, applicant shall provide the Department with a time line indicating the anticipated beginning and end dates for the review
(b) An applicant shall meet the following requirements when undertaking a second opinion project review:
(1) The second opinion project review shall be planned for and completed by the time the project design is 20% to 40% complete, unless the applicant requests from the Authority in writing an extension of time due to some reasonable and unforeseen circumstance.
(2) The second opinion project review shall focus primarily on the treatment facilities but shall also include an analysis of the total project design and shall include an evaluation of the cost effectiveness, complexity and impact of the project on the community.
(3) Upon completion of the second opinion project review, the reviewer shall provide a written report to the applicant which summarizes findings and describes proposed implementation of recommendations. The second opinion project review report shall be issued under seal of a professional engineer licensed to practice in this Commonwealth.
(4) The applicant shall cause the implementation of the reported recommendations to the maximum extent feasible.
(5) A copy of the second opinion project review report shall be submitted to the Authority along with a proposal submitted by applicant discussing each recommendation and its incorporation in the project design except when to do so would be cost ineffective or unreliable or would cause unreasonable delay in the project or would result in some other unreasonable burden upon a factor critical to the treatment or collection system and the environmental impact of the project. The second opinion project review and the proposal shall be submitted by the applicant to the Authority within 90-calendar days following the completion of the second opinion project review.
(i) If the Authority disagrees with the reason set forth by the applicant for not adopting a second opinion project review recommendation, the administrative staff may not recommend approval of financial assistance to the Board for that portion of the project.
(ii) An applicant may appeal the Board recommendation of the administrative staff to the Board in accordance with 1 Pa. Code Part II (relating to general rules of administrative practice and procedure).
(c) The second opinion project review report may be used by the administrative staff in the cost effectiveness evaluation performed during the application review process.
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