Chapter NR 162

NR 162.055 History History: CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23; correction in numbering of (1) made under s. 13.92 (4) (b) 7., Stats., Register October 2023 No. 814.

NR 162.06 NR 162.06 Financial assistance requirements. Before executing a financial assistance agreement for any project under this subchapter, the department shall determine that all of the applicable requirements of s. NR 162.05 are met and that all of the following are satisfied:

NR 162.06(1) (1) All of the following documentation, if applicable to the scored project, is submitted to the department:

NR 162.06(1)(a) (a) Certification for force account work as required by s. NR 162.08 (5).

NR 162.06(1)(b) (b) Initial flow documentation, if the scored project or a portion of the scored project is to construct a sewage collection system in or extend an interceptor to an unsewered area.

NR 162.06(1)(c) (c) A certification or legal opinion regarding land ownership and acquisition of easements and rights-of-way necessary for the project. The certification or legal opinion must include all the applicable information required under s. NR 162.055.

NR 162.06(1)(d) (d) Items related to bids for each prime contract, including all of the following:

NR 162.06(1)(d)1. 1. The proposal of the successful bidder.

NR 162.06(1)(d)2. 2. An engineer’s evaluation of the bids, including bid tabulation and an award recommendation.

NR 162.06(1)(d)3. 3. If an applicant awards a construction or equipment contract to a contractor other than the lowest bidder, any of the following:

NR 162.06(1)(d)3.a. a. Written documentation of the reasons why the lowest bidder is considered nonresponsive or not responsible.

NR 162.06(1)(d)3.b. b. A legal opinion stating that the award to a contractor other than the lowest responsive, responsible bidder meets the requirements of municipal bidding law.

NR 162.06(1)(d)4. 4. Solicitation and utilization information regarding DBEs.

NR 162.06(1)(d)5. 5. Evidence of bid advertisement, including a copy of the affidavit of publication and a copy of the advertisement, which should include appropriate language regarding DBEs submitting bid proposals, American-made product requirements, and wage rates, when applicable.

NR 162.06(1)(d)6. 6. A copy of the bid bond and the performance bond.

NR 162.06(1)(d)7. 7. Evidence of award of the construction contract by the municipality, which may be a notice of award, a municipal resolution, or minutes from the municipal meeting at which the determination of award was made.

NR 162.06(1)(d)8. 8. A complete copy of the executed construction contract with up-to-date copies of all addenda, attachments, appendices, appropriate Davis-Bacon or other wage rate information, and all other applicable documentation that makes the contract complete. If available, the contract submittal should be a copy of the conformed contract.

NR 162.06(1)(d)9. 9. Documentation of the construction start date and expected substantial and final completion dates.

NR 162.06 Note Note: A notice of award and a notice to proceed are preferred but not required for this documentation.

NR 162.06(1)(d)10. 10. All negotiated pending change orders and all executed change orders.

NR 162.06(1)(e) (e) A request for disbursement and required supporting invoices, payoff statements for interim debt, and other applicable documentation of expenditures, including a copy of the title or deed for land purchased for the project if the applicant is requesting financial assistance for land purchase costs, and complete copies of any contract change orders for which costs are included in the request for disbursement, along with a copy of the department construction management engineer’s change order approval.

NR 162.06(1)(f) (f) Evidence that a bond counsel is drafting legal documents related to the authorization and issuance of bonds for action at a municipal meeting prior to the scheduled loan closing.

NR 162.06(1)(g) (g) Completed federal forms, if applicable, and any other required documentation of compliance with federal requirements, which may include certification of compliance with Davis-Bacon wage rate requirements, certification of use of American-made products in the project, and the cost, effectiveness, energy efficiency, and water efficiency of the selected design.

NR 162.06(1)(h) (h) Parallel cost percentage information.

NR 162.06(1)(i) (i) An executed intermunicipal agreement or multiple executed agreements described under s. NR 162.05 (4) (h), if 2 or more municipalities utilize shared or interconnected wastewater treatment works.

NR 162.06(1)(j) (j) Proof that applicable ordinances required under s. NR 162.07 have been adopted by the municipality.

NR 162.06(1)(k) (k) A copy of the adopted user charge system and proof that the municipality adopted the user charge system.

NR 162.06(1)(L) (L) A copy of each executed construction management or other professional services contract associated with the project if funds are requested for services included in the contract.

NR 162.06(1)(m) (m) A completed design life calculation worksheet with any backup documentation required by the department if, after the application submittal, the applicant requested a loan term greater than 20 years. All of the following apply to applicants requesting a loan term greater than 20 years:

NR 162.06(1)(m)1. 1. The applicant shall submit the design life calculation worksheet at least 9 weeks prior to loan closing.

NR 162.06(1)(m)2. 2. The applicant shall pledge system revenues to secure the CWFP loan.

NR 162.06(1)(m)3. 3. A loan term greater than 20 years is not available for projects for which the applicant pledges general obligation bonds to secure the loan.

NR 162.06 Note Note: The design life calculation worksheet is an excel spreadsheet that is available on the department’s website at https://dnr.wisconsin.gov/aid/documents/EIF/Forms/forms.html#cwform. The department strongly encourages applicants to submit the design life calculation worksheet with the rest of its application submittal in order to allow enough review and response time for the worksheet contents. Later submittal of the design life calculation worksheet may delay a loan closing.

NR 162.06(2) (2) The department has done all of the following, if applicable to the scored project:

NR 162.06(2)(a) (a) Complied with the Wisconsin environmental policy act requirements pursuant to the procedures in ch. NR 150.

NR 162.06(2)(b) (b) Reviewed and approved the plans and specifications.

NR 162.06(2)(c) (c) Reviewed and concurred with the parallel cost percentage provided by the applicant.

NR 162.06(2)(d) (d) Reviewed and concurred with the design life calculation for the scored project if the applicant is requesting a loan term greater than 20 years.

NR 162.06(3) (3) The scored project has met the priority requirements of subch. V.

NR 162.06(4) (4) The applicant has the legal, institutional, managerial, technical, and financial capability to ensure adequate construction, operations, and maintenance of the wastewater treatment works throughout the applicant’s jurisdiction.

NR 162.06(5) (5) DOA finds that the municipality is likely to be able to meet the terms and conditions for receiving financial assistance under ch. Adm 35 and s. 281.59, Stats.

NR 162.06(6) (6) The applicant has received or applied for permits required by the department for the scored project, including those under chs. 30 and 283, Stats.

NR 162.06 History History: CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23; correction in (1) (c) made under s. 35.17, Stats., Register October 2023 No. 814.

NR 162.07 NR 162.07 Requirements for a user charge system and sewer use ordinance.

NR 162.07(1) (1) General. Any user charge system and applicable ordinances adopted by a recipient shall be maintained in accordance with s. 281.58 (14) (b) 7., Stats., for the useful life of a wastewater treatment works. The applicant shall submit user charge information to the department and shall certify to the department that the user charge system meets all the applicable requirements in this section.

NR 162.07(2) (2) Applicability. A user charge system and sewer use ordinance is required of the applicant receiving financial assistance under this subchapter for any wastewater treatment works project.

NR 162.07(3) (3) User charge system requirements. Any user charge system under this section shall do all of the following:

NR 162.07(3)(a) (a) Require that each user or user class pays its proportionate share of operation and maintenance costs, including replacement costs, of the wastewater treatment works within the recipient’s service area.

NR 162.07(3)(b) (b) Provide that the costs of operation and maintenance for all flow not directly attributable to users be distributed proportionally among all users of the recipient’s wastewater treatment works.

NR 162.07(3)(c) (c) Require that the charges for users or user classes generate sufficient revenue to pay costs identified in par. (e) 2. and 3.

NR 162.07(3)(d) (d) Require that the recipient establish an equipment replacement fund, maintain the equipment replacement fund as a separate fund of the municipality, and make deposits to this fund on an annual basis or maintain a balance acceptable to the department. This fund is to be used for the costs of replacing equipment related to the wastewater treatment works. The municipality may also use the equipment replacement fund for unexpected, unbudgeted costs incurred for continuing effective operations of the treatment works. The municipality shall periodically make appropriate adjustments to the equipment replacement fund deposit schedule or balance, including adjustments needed to restore the fund balance following an expenditure from the fund.

NR 162.07(3)(e) (e) Establish a financial management system that accounts for all of the following:

NR 162.07(3)(e)1. 1. Revenues generated.

NR 162.07(3)(e)2. 2. Costs of operations and maintenance of the wastewater treatment works, including an appropriate amount of money to be deposited annually into the equipment replacement fund.

NR 162.07(3)(e)3. 3. Debt service costs, including debt service reserves and debt coverage requirements. In this subdivision, “debt coverage” means the ratio of net revenue available for debt service to the average annual debt service requirements of an issue of revenue bonds.

NR 162.07(3)(f) (f) Require the review, at least once every 2 years, of the wastewater contribution of users and user classes, the total costs of operations and maintenance of the wastewater treatment works, and the overall user charge system.

NR 162.07(3)(g) (g) Require that each user that discharges any toxic pollutants or high strength wastes to a wastewater treatment works pay for any increased costs associated with the discharge.

NR 162.07(3)(h) (h) Provide that each user is notified, at least annually, in conjunction with a regular bill, of the rate of charge attributable to service provided by the wastewater treatment works.

NR 162.07(3)(i) (i) Be based on actual or estimated use except as provided for under s. 281.58 (14) (b) 7., Stats.

NR 162.07(4) (4) Municipal responsibilities. The municipality shall do all of the following:

NR 162.07(4)(a) (a) Incorporate the user charge system in one or more municipal ordinances or other legislative enactments and make reference to the user charge system or systems in intermunicipal agreements if the project serves more than one municipality.

NR 162.07(4)(b) (b) Terminate any term or condition of any pre-existing agreement or contract between the recipient and a user that is inconsistent with the requirements of this section.

NR 162.07(4)(c) (c) Maintain records to document compliance with this section.

NR 162.07(4)(d) (d) For a wastewater treatment works, enact and enforce a sewer use ordinance that does all of the following:

NR 162.07(4)(d)1. 1. Prohibits any new connections from sources that will add substantial infiltration or inflow into the sanitary sewer system.

NR 162.07(4)(d)2. 2. Requires that new sewers and connections to the sewer system be properly designed and constructed.

NR 162.07(4)(d)3. 3. Requires that wastewater introduced into the treatment works not do any of the following:

NR 162.07(4)(d)3.a. a. Endanger public safety or the environment.

NR 162.07(4)(d)3.b. b. Jeopardize the physical integrity of the treatment works.

NR 162.07(4)(d)3.c. c. Cause substantial upset to the treatment process.

NR 162.07(4)(d)3.d. d. Cause a violation of effluent or water quality limitations.

NR 162.07(4)(d)4. 4. Defines normal domestic strength of the wastewater.

NR 162.07(4)(d)5. 5. Controls and monitors industrial discharges by requiring control manholes, pretreatment, and grease, oil, and sand interceptors.

NR 162.07(4)(d)6. 6. Provides a methodology for establishing sewer use rates that complies with sub. (3). A municipality may include an optional class of low-income residential users, with incomes below a level established by the municipality, who are charged at a lower rate than other residential users.

NR 162.07(4)(d)7. 7. Defines violations and penalties for violators.

NR 162.07(5) (5) Department review. The department may annually review a recipient’s user charge system to ensure that it continues to meet the requirements of this section.

NR 162.07 History History: CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 162.08 NR 162.08 Procurement.

NR 162.08(1) (1) Applicability. Procurement of professional services and construction contracts by financial assistance recipients under this chapter shall be in accordance with local, state, and federal laws applicable to the CWFP project. No contract may be awarded to any person or organization that does not operate in conformance with state and federal civil rights and equal opportunity laws.

NR 162.08(2) (2) Financial assistance recipient responsibility. The recipient is responsible for the administration and successful completion of the project as well as acceptance of the terms of the financial assistance agreement received under this subchapter or subch. III or the interest rate subsidy agreement received under subch. IV.

NR 162.08 Note Note: See ss. 60.47, 60.77 (6) (a), 61.54, 62.15, 66.0131, and 66.0901, Stats.

NR 162.08(3) (3) Profits. Contractors may earn only fair and reasonable profits under contracts for projects receiving CWFP assistance. Profit included in a formally advertised, competitively bid, fixed price or unit price construction contract is presumed to be reasonable.

NR 162.08(4) (4) Solicitation of disadvantaged business enterprises.

NR 162.08(4)(a) (a) Whenever a recipient or its prime contractor is procuring construction, equipment, raw materials, or supplies for a project funded wholly or in part with CWFP financial assistance, the recipient or contactor shall make a good faith effort to provide DBEs opportunities to compete for participation in the project. Recipients and their prime contractors shall comply with DBE regulations contained in 40 CFR part 33, as modified by memoranda and exceptions, in the manner required by the department. Failure to comply with DBE regulations and requirements may result in a sanction as provided under par. (b). Recipient and contractor efforts under this subsection may include any of the following activities:

NR 162.08(4)(a)1. 1. Using outreach and recruitment activities to make DBEs aware of contracting opportunities, including any of the following activities:

NR 162.08(4)(a)1.a. a. Including a sentence in bid advertisements that encourages DBEs to submit bids or proposals and submitting a copy of the advertisement to the department with evidence of publishing.

NR 162.08(4)(a)1.b. b. Contacting DBEs via telephone, faxed or mailed letter, e-mail, or other methods of correspondence, informing the DBEs of the project and encouraging their participation, and submitting documentation of those contacts to the department.

NR 162.08(4)(a)1.c. c. Advertising the project in trade publications, and submitting a copy of the advertisement and evidence of publishing to the department.

NR 162.08(4)(a)2. 2. Arranging timeframes for contracts and establishing delivery schedules when possible in a way that encourages and facilitates participation by DBEs in the competitive process, including posting solicitations for bids or proposals for at least 30 calendar days before the bid or proposal closing date, when possible.