Chapter NR 162

Where:

EM . . . is the amount of project costs eligible for market rate financing only.

TP . . . is the total project cost eligible for CWFP financing.

PC . . . is the parallel cost percentage expressed as a decimal.

NR 162.04(1)(c)3. 3. If the department determines that the project includes other market rate costs as described in par. (b) 5. and 6., the amount of those costs shall be subtracted from the amount eligible for below–market rate financing and added to the amount of market rate costs calculated in subd. 2.

NR 162.04 Note Note: All questions relating to cost eligibility or allocation shall be resolved prior to the execution of the financial assistance agreement in accordance with s. NR 162.15.

NR 162.04(2) (2) Ineligible costs. Costs for items and activities not directly associated with or not necessary for the construction or startup of a scored project are not eligible for financial assistance unless specifically approved by the department as necessary and reasonable for the efficient operation or integrity of the overall treatment works or BMP. Ineligible items and activities include all of the following:

NR 162.04(2)(a) (a) Allowances. Any allowance or contingency amounts built into a bid contract for nonspecific or ineligible items or activities.

NR 162.04(2)(b) (b) Basin planning. Basin or areawide planning not related to the scored project.

NR 162.04(2)(c) (c) BCPL ineligibles. For a project receiving interest rate subsidy under subch. IV, project costs determined to be ineligible for loan assistance from the BCPL.

NR 162.04(2)(d) (d) Bonus payments. Bonus payments not legally required for completion of construction before a contractual completion date.

NR 162.04(2)(e) (e) Buying capacity. Purchase cost of buying capacity in an existing treatment works that is not being expanded.

NR 162.04(2)(f) (f) Certification. Fees for operator certification training.

NR 162.04(2)(g) (g) Conflict of interest. Costs incurred under a contract that creates a real or apparent conflict of interest. An apparent conflict of interest arises when an official or employee of a recipient participates in the selection, award, or administration of a contract supported by the CWFP and any of the following conditions exist:

NR 162.04(2)(g)1. 1. The official or employee or the official’s or employee’s spouse has an ownership interest in the firm selected for the contract.

NR 162.04(2)(g)2. 2. Any person identified in subd. 1. receives any contract, gratuity, or favor from the award of the contract.

NR 162.04(2)(h) (h) Engineering. Engineering costs relatable to ineligible construction costs when the ineligible construction and equipment costs are more than 10 percent of total construction and equipment costs.

NR 162.04(2)(i) (i) Grant administration. Any costs for administering or applying for funding from sources other than the CWFP, such as U.S. department of agriculture’s rural development programs, a community development block grant program, federal state and tribal assistance grants, U.S. army corps of engineers, focus on energy, or other non-CWFP federal or state government loan or grant programs, or other types of financial assistance programs.

NR 162.04(2)(j) (j) Hookup charges. Hookup charges imposed by one municipality on another for hooking into a treatment works or BMP, or transport system to such a facility, unless the charges are based on identifiable capital improvement costs incurred by the municipality imposing the charge, proportional to the capacity to be used by the municipality hooking up, and included in an intermunicipal agreement meeting the requirements of s. NR 162.05 (4) (h).

NR 162.04(2)(k) (k) Industrial facilities. Costs associated with privately-owned pretreatment facilities and monitoring equipment used by industry for sampling discharges to a municipal treatment works.

NR 162.04(2)(L) (L) Interim debt. Interest or principal payments on interim debt paid by the municipality out of its internal funds rather than capitalized funds, unless DOA notifies the department that such payments are eligible under the particular circumstances.

NR 162.04 Note Note: The ineligibility of interest or principal payments in par. (L) is based on U.S. treasury reimbursement regulations 26 CFR 1.150-2.

NR 162.04(2)(m) (m) Late fees. Interest or late fees on payments for services provided to the municipality in relation to the scored project.

NR 162.04(2)(mm) (mm) Laterals. Privately-owned connection laterals that transport wastewater from structures to municipally–owned or privately–owned wastewater systems.

NR 162.04(2)(n) (n) Leases. Costs related to leasing land or buildings.

NR 162.04(2)(nm) (nm) Mismanagement and litigation. Costs of claims against the recipient resulting from mismanagement or caused by the recipient’s vicarious liability for the improper action of others and costs resulting from litigation of contract disputes, liquidated damages, appeals, and other related disputes.

NR 162.04(2)(o) (o) Negligence. Costs incurred due to negligence or error of a party contracted by the municipality.

NR 162.04(2)(om) (om) No construction. All costs of a project if the municipality does not finance some construction costs through the CWFP, unless the department is cooperating with another governmental funding agency to provide an affordable financing package for the project, the other funding agency is financing the construction costs, and the department receives acceptable documentation of the other agency’s commitment.

NR 162.04(2)(p) (p) O&M. Operations and maintenance expenses as defined in s. NR 162.003 (50) and (40), respectively.

NR 162.04(2)(pm) (pm) Ordinary municipal operating expenses. Ordinary operating expenses of a municipality, such as salaries and expenses of elected officials and on-staff attorneys, postage, utility bills, and annual financial audits.

NR 162.04(2)(q) (q) Other funding. Costs for which payment has been or will be received from another funding source, including costs for which funds from the U.S. department of agriculture’s rural development program or a community development block grant program are committed or costs covered by a focus on energy grant. If the municipality does not receive the funds expected from the other source, the department may consider the costs of the work that was to be funded through the other source to be eligible for CWFP financial assistance unless the costs are considered ineligible under another paragraph in this subsection. This paragraph does not apply to a municipality receiving a loan from the BCPL for a scored project receiving interest subsidy under subch. IV.

NR 162.04(2)(qm) (qm) Outside of scope. Costs outside the scope of the scored project unless the department approves the costs as necessary and reasonable to improve the overall integrity, operation, or functionality of the treatment works or BMP.

NR 162.04(2)(r) (r) Personal injury. Personal injury compensation or damages arising out of the project, whether determined by adjudication, arbitration, negotiation, or otherwise.

NR 162.04(2)(rm) (rm) Post-closeout. Expenses incurred after the project completion date of the scored project.

NR 162.04(2)(s) (s) Private septic payments. Credits or payments to private septic owners made as a result of complying with s. 60.726, Stats.

NR 162.04(2)(sm) (sm) Sludge removal. Removing sludge from a wastewater facility unless it is part of the activities necessary for a scored project.

NR 162.04(2)(t) (t) Special devices. Waste-generating fixtures and associated plumbing from a residence or commercial establishment to a treatment unit, and modifications to homes or other buildings for installation of special devices.

NR 162.04(2)(tm) (tm) Special districts. Costs of establishing special purpose districts or commissions, such as sanitary districts, utility districts, and joint commissions.

NR 162.04(2)(u) (u) Storm water pipes. Storm sewer pipes unless the pipes are carrying water to treatment. Portions of storm sewer pipe construction may be eligible in a scored project if the pipes need repair or replacement due to breakage during construction of the scored project, as determined by the department.

NR 162.04(2)(um) (um) Violation penalties. Fines and penalties due to violations of, or failure to comply with, federal, state, or local laws.

NR 162.04(2)(v) (v) Warranty inspections after construction completion. Costs related to post-construction warranty inspections, including costs of a consulting engineer or a third-party inspector, and costs of extended warranties or service contracts that go beyond construction completion.

NR 162.04(2)(vm) (vm) Watermains. Watermain construction, replacement, or repair unless the watermain is needed to carry water to a part of the treatment works, or the watermain work is necessary as a direct result of work performed for a scored project, such as moving a watermain to allow appropriate distance between it and a sanitary sewer pipe being constructed in the scored project or repairing or replacing a watermain damaged during construction of the scored project.

NR 162.04(2)(w) (w) Wisconsin fund facilities. The acquisition of a treatment works built with Wisconsin fund grant program monies.

NR 162.04 Note Note: The Wisconsin fund grant program was created to fund municipal wastewater treatment facility projects required to achieve the federal goal of “fishable and swimmable” for the state’s waters. The grant program was administered under ch. NR 128, which was created in 1978. Final grant closeouts of Wisconsin fund projects occurred during the 1990s. This grant program preceded the CWFP which was created in 1987 Wisconsin Act 399.

NR 162.04(2)(x) (x) WPDES permit fees. The cost of a WPDES permit unless it is a special permit specific to the project construction.

NR 162.04(3) (3) Limitation on eligibility of interim debt costs.

NR 162.04(3)(a) (a) Net interest expense. Interim debt interest expenses shall be offset with any interest earnings from the investment of the proceeds from the interim debt to determine the amount eligible for CWFP financial assistance.

NR 162.04(3)(b) (b) Interim debt issuance costs. The amount of interim debt issuance costs eligible for financial assistance is limited to $15,000 plus 0.5 percent of the total eligible face amount of the interim debt. If interim debt is rolled over or renewed, the face amount may not be counted multiple times in calculating the eligible face amount of interim debt for purposes of this limit.

NR 162.04(3)(c) (c) Interim interest costs. The period of time for which interest on interim debt is eligible for financial assistance shall run from no earlier than 18 months prior to the start of construction to the earliest of the following:

NR 162.04(3)(c)1. 1. The date of the first disbursement of the financial assistance.

NR 162.04(3)(c)2. 2. One year following substantial completion of the project.

NR 162.04(3)(d) (d) Cost proration. If the term of the interim debt exceeds the limit in par. (c), the interim debt costs shall be prorated using the length of the eligible term divided by the total time that the interim debt is outstanding. If the interim debt is not exclusively for the CWFP scored project, costs shall be prorated according to the proportion of the total debt that is for the scored project.

NR 162.04(3)(e) (e) Maximum principal. The amount of interim debt principal that may be refinanced with CWFP financial assistance shall not exceed the total amount of the interim debt that was spent on eligible project costs.

NR 162.04 History History: CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23; correction in (1) (a) 11. d., 24. g. made under s. 35.17, Stats., Register October 2023 No. 814.

NR 162.05 NR 162.05 Application process.

NR 162.05(1) (1) Notice of intent to apply submittal. If required by the department, a municipality shall submit notice of its intent to apply for financial assistance via the department’s online application systems by any applicable deadline set in the CWFP annual intended use plan under s. NR 162.02 (1). The municipality or its designated representatives shall complete the requirements established by the department for gaining access to and submitting information through the department’s online application systems. The department may require the municipality to submit through the online systems any of the following:

NR 162.05 Note Note: Instructions regarding the online application systems are available on the Environmental Improvement Fund website at dnr.wi.gov/Aid/EIF.html.

NR 162.05(1)(a) (a) A clear, concise, and comprehensive project description that includes the problem or concern being addressed, the general solution proposed through a single project, and detailed information regarding what structures are to be constructed, what equipment is to be purchased and installed, and project location, including detailed information for purposes of eligibility determinations regarding storm sewer or watermain construction being done at the same time as sanitary sewer construction on the same block of a street or in the same intersection.

NR 162.05(1)(b) (b) Contact information.

NR 162.05(1)(c) (c) An estimate of the total project cost and what amount of the cost is likely to be requested from the CWFP.

NR 162.05(1)(d) (d) Estimated or actual dates related to the bidding and construction timeline of the project.

NR 162.05(1)(dm) (dm) Date and number of the department approval of plans and specifications for each set of plans and specifications associated with the project, if available at time of intent to apply or priority evaluation and ranking information submittal.

NR 162.05(1)(e) (e) Any other information required to complete the submission in the department’s online application systems.

NR 162.05(2) (2) Facilities plan. A municipality shall submit a facilities plan or other applicable plan to the department for approval. The municipality shall receive approval of the facilities plan or other applicable plan prior to submitting an application for financial assistance under this subchapter.

NR 162.05(3) (3) Application procedures. A municipality shall apply for financial assistance in accordance with s. 281.58 (9), Stats. All applicants must submit the required information and documentation through the department’s online application system.

NR 162.05 Note Note: Directions regarding online submittal are available on the Environmental Improvement Fund website at https://dnr.wisconsin.gov/aid/EIF.html. An interest rate subsidy application is a different form and must be submitted in accordance with s. NR 162.40.

NR 162.05(4) (4) Contents of application. The applicant shall submit a complete application, including each of the following items, if applicable to the project:

NR 162.05(4)(a) (a) Evidence of compliance with sub. (2).

NR 162.05(4)(b) (b) Construction plans and specifications submitted to the department in accordance with chs. NR 108 and 110 that are approvable under ch. 281, Stats. An applicant may be denied funding if the applicant does not provide appropriately complete project plans and specifications to the department prior to or with the application. The applicant shall submit a copy of approvable plans and specifications with the application in addition to the plans and specifications submitted to the department for plan review under chs. NR 108 and 110.

NR 162.05(4)(c) (c) Completion of the required fields in and upload of required documentation to the department’s online application system, including all of the following:

NR 162.05(4)(c)1. 1. A clear, concise, and comprehensive project description, including any modifications to the project description previously provided in the online application systems.

NR 162.05(4)(c)2. 2. Estimated or actual construction costs.

NR 162.05(4)(c)3. 3. Identification of known ineligible costs included within the total budget provided in the online application.

NR 162.05(4)(c)4. 4. Information regarding assistance received or expected from another funding source.

NR 162.05 Note Note: The project description may already be included in the online application as it should transfer over to the application if previously provided with intent to apply or priority evaluation and ranking information. When that transfer of information is successful, the applicant must only provide information regarding any modifications to the project description that is already included in the application rather than providing an additional complete project description.

NR 162.05 Note Note: Under s. NR 162.04 (2) (om), the CWFP shall not provide any financial assistance for a project if construction costs are not included as part of the project costs to be funded by the CWFP, with the exception of certain situations in which other funding sources are also participating in the financing of the project or the project is the purchase of a package wastewater treatment plant or solely the purchase of equipment in a phase of a multi-phase project.

NR 162.05(4)(d) (d) Items or information for compliance with federal regulations identified by the department in the online application system as required for a complete application; these items may include documentation of compliance with wage rate laws, completed federal forms, and information regarding green project components, cost and effectiveness of the project, or procuring American-made products for use in the project.

NR 162.05(4)(e) (e) A copy of each executed engineering contract and any associated existing contract amendments for planning and design of the project if funds are requested for planning and design in the application project budget.

NR 162.05(4)(f) (f) A copy of each executed engineering contract and any associated contract amendments for construction management if funds are requested for construction management in the application project budget and the contract or amendment is available at the time of application submittal.

NR 162.05(4)(g) (g) A copy of each executed non-engineering professional services contract related to the project and any associated amendments if funds are requested in the application project budget for services included in the contract and the contract or amendment is available at the time of application submittal.

NR 162.05(4)(h) (h) A proposed or an executed intermunicipal agreement for each municipality served by the project when 2 or more municipalities utilize shared or interconnected wastewater treatment works. This paragraph does not apply to a metropolitan sewerage district in which all municipalities being served have been annexed into the sewerage district or to a situation in which the intermunicipal exception established in sub. (5) has been met. This paragraph does apply to biosolids or other treatment facilities when the applicant has ownership in the facility or has purchased capacity in the facility. Prior to receiving financial assistance, the applicant shall ensure that each required intermunicipal agreement does all of the following that are applicable to the project:

NR 162.05(4)(h)1. 1. Identify ownership for each individual portion of the wastewater treatment works, including wastewater treatment plants, interceptors, sewage collection systems, lift stations, biosolids facilities, and privately-owned treatment works.

NR 162.05(4)(h)2. 2. Establish the term of the intermunicipal agreement unless it is effective in perpetuity. If the intermunicipal agreement is new or being negotiated specifically for the project for which financial assistance is being requested, the term shall be for at least the term of the loan. If there is an existing intermunicipal agreement in place that meets the requirements of this paragraph but expires during the term of the loan, the municipality shall renegotiate or extend the existing agreement prior to the end of its term and maintain the intermunicipal agreement throughout the term of the loan.

NR 162.05(4)(h)3. 3. Demonstrate the basis for generating revenue for operation, maintenance, and replacement costs based on actual use or another equitable method, and state the parties that are responsible for paying these charges.

NR 162.05(4)(h)4. 4. Indicate the method for generating revenue for capital costs and indicate who is responsible for payment.

NR 162.05(4)(h)5. 5. Indicate that the owner of the regional facility shall accept the applicant’s wastewater and identify the boundary from which the applicant’s discharge originates.

NR 162.05(4)(i) (i) Financial information required by DOA to be used in determining the affordability of the proposed project, the financial capability of the municipality, and the adequacy of the pledge of revenues to repay the obligation securing the proposed financial assistance.

NR 162.05(4)(j) (j) A copy of the existing user charge system and sewer use ordinance, and information regarding the proposed user charge system and sewer use ordinance if they are new or if the existing user charge system or sewer use ordinance will be revised for the CWFP project.

NR 162.05(4)(k) (k) Any existing or proposed contracts with users of the wastewater treatment works.