§ 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).
(2) Financial condition and audit reports required for financial assistance application.
(3) Administrative costs, including financial reporting costs, generated by the project and specifically included in the financial assistance agreement. These costs include the cost associated with completing the application itself.
(4) Acquisition of property rights, including that of necessary easements or rights-of-way, and equipment that are preliminary to or a necessary part of the project. Acquisition of property rights may include the costs associated with the acquisition, including taxes, fees, surveys, title insurance and relocation fees specifically included in the financial assistance agreement.
(5) Capital contributions to be paid by the applicant for the use of existing treatment, storage, distribution or related capacity. Section 963.17 (relating to funding limitations) applies to the payment of capital contributions. In particular, capital contributions paid prior to approval by the Authority, and in the absence of a letter of no prejudice issued by the Authority, will not be considered eligible costs. Capital contributions are eligible costs only when the following conditions are met:
(i) The use of the capacity by the applicant is either acquired for the life of the capacity or is leased for a sufficiently long period and with rights and privileges as to be tantamount, in the Authority’s judgment, to acquisition.
(ii) The price charged for the capacity does not exceed the sum of the following:
(A) The applicant’s proportionate share of the unpaid principal of a debt incurred to finance construction of the capacity. The applicant’s proportionate share equals the percentage of the existing capacity that the applicant is acquiring or leasing.
(B) Costs incurred by the capacity’s owner to modify the capacity to make it available for the applicant’s use.
(iii) The financing of capital contributions by the authority does not result in rate reductions to existing users beyond those attributable to the mere spreading of common costs over a larger number of users, comprised of existing users and those represented by the applicant.
(iv) If the capacity being acquired or leased is already in use, the evaluation of the project under the criteria in § § 963.8 and 963.9 (relating to wastewater project evaluation criteria; and water project evaluation criteria) is on a net benefit basis. Only benefits that are in excess of the benefits already being generated by use of the capacity shall be counted in evaluating the project.
(v) The financing of capital contributions by the authority neither directly nor indirectly jeopardizes a source of authority funds. In particular, that portion of a capital contribution financed by the Authority equal to the unpaid principal of a tax-exempt debt incurred to finance construction of the capacity shall be used to retire that debt.
(vi) The financing of capital contributions by the authority does not directly or indirectly duplicate the assistance provided by the Authority for a project.
(6) Legal service fees generated by the project.
(7) Permit fees.
(8) Insurance or bonds associated with the construction of the project.
(9) Security bonds, necessary reserves and costs of establishing and securing total financing arrangements for the project.
(10) Interest during construction or financing of the project and allowance for funds used during construction.
(11) Project construction, including labor, materials, machinery, equipment, site preparation and restoration costs associated with the project.
(12) Other costs the Board has determined to be necessary or incident to the project. The applicant shall demonstrate that the activities associated with these costs are integral to the proposed project and that the costs are unavoidable.
(b) Eligible costs incurred prior to an application being considered by the Board may be reimbursed in assistance provided by the Board, except that acquisition and construction costs are not reimbursable unless the applicant obtains a letter of no prejudice under § 963.17(b).
(c) Funds encumbered or advanced for the project which are not used for eligible costs in the project shall be returned to the fund or account from which they originated for reallocation and use in other projects.
Source The provisions of this § 963.11 adopted February 24, 1989, effective February 25, 1989, 19 Pa.B. 771; amended May 3, 1991, effective May 4, 1991, 21 Pa.B. 2006; amended July 7, 1995, effective July 8, 1995, 25 Pa.B. 2720; amended November 21, 1997, effective November 22, 1997, 27 Pa.B. 6080. Immediately preceding text appears at serial pages (197562) to (197564).
Cross References This section cited in 25 Pa. Code § 963.12 (relating to ineligible costs).
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