Chapter NR 166

NR 166.05(1) (1) Funding policy and project priority list. The department may produce an annual SDWLP funding policy in conjunction with the fiscal year’s project priority list established under s. NR 166.25. The funding policy may be in the form of the SDWLP annual intended use plan and may describe methods for making funding determinations and other policies related to the fiscal year. When the department publishes a funding policy for a given year, it shall provide an opportunity for public comment regarding the funding policy.

NR 166.05(2) (2) Funding list. The department shall prepare an annual funding list in accordance with s. 281.61 (8), Stats., and s. NR 166.25.

NR 166.05 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.06 NR 166.06 Project eligibility.

NR 166.06(1) (1) Eligible projects. Under s. 281.61 (2), Stats., the department and DOA administer a financial assistance program for projects that facilitate compliance with national primary drinking water regulations under 42 USC 300g-1 or otherwise significantly further the health protection objectives of the Safe Drinking Water Act, 42 USC 300f to 300j-26. Under s. 281.61 (2), Stats., a municipality may receive financial assistance under this chapter for a project that has any of the following purposes:

NR 166.06(1)(a) (a) Address safe drinking water act health standards that have been exceeded or prevent future violations of health standards and regulations contained in ch. NR 809. This includes projects to maintain compliance with existing regulations for contaminants with acute health effects and regulations for contaminants with chronic health effects.

NR 166.06(1)(b) (b) Replace or construct infrastructure if necessary to maintain compliance with or further the public health protection goals of the safe drinking water act. This includes projects with any of the following purposes:

NR 166.06(1)(b)1. 1. Rehabilitate or develop sources to replace contaminated sources, excluding open reservoirs, dams, dam rehabilitation, and water rights.

NR 166.06(1)(b)2. 2. Install or upgrade treatment facilities if, in the department’s opinion, the project would improve the quality of drinking water to comply with primary or secondary drinking water standards.

NR 166.06(1)(b)3. 3. Install or upgrade storage facilities, including finished water reservoirs, to prevent microbiological contaminants from entering the public water system.

NR 166.06(1)(b)4. 4. Install, replace, or rehabilitate transmission and distribution pipes to prevent contamination caused by leaks or breaks in the pipe, or improve water pressure to safe levels.

NR 166.06(1)(c) (c) Consolidate existing community water systems that have technical, financial, or managerial difficulties. Projects for consolidating existing systems shall be limited in scope to the service area of the systems being consolidated.

NR 166.06(1)(d) (d) Purchase a portion of another public water system’s capacity if it is the most cost–effective solution.

NR 166.06(1)(e) (e) Restructure a public water system that is in noncompliance with the safe drinking water act requirements or lacks the technical, managerial, and financial capability to maintain the system if the assistance will ensure that the system will return to and maintain compliance with the safe drinking water act requirements.

NR 166.06(1)(f) (f) Create a new community water system or expand an existing community water system that, upon completion, will address an existing public health threat from contaminated drinking water provided by individual wells or surface water sources. Projects to address existing public health threats associated with individual wells or surface water sources shall be limited in scope to the specific geographic area affected by contamination and shall be a cost-effective solution to resolve the problem threatening public health. Projects under this paragraph must meet all of the following criteria:

NR 166.06(1)(f)1. 1. The municipality submits documentation, such as well sampling results, showing that the MCL for a microbiological, nitrate or nitrite, or chronic contaminant is exceeded by 40 percent or more of the individual wells or surface water sources within the affected area; or, for other public health threats, the municipality submits hydrogeological data or other documentation that indicates contamination is imminent.

NR 166.06(1)(f)2. 2. The department determines that a community water system is a necessary and appropriate response to the contamination.

NR 166.06(2) (2) Ineligible projects. The department may determine that an entire project or a portion of a project is ineligible for SDWLP financial assistance. If the department determines that a portion of a project is ineligible, it shall specifically identify the ineligible portion and the associated costs or prorate the amount of financial assistance provided to reflect the appropriate proportion of eligible to ineligible project costs, or both, in the financial assistance agreement. The following types of projects or portions of projects are not eligible for financial assistance under this chapter:

NR 166.06(2)(a) (a) Building or rehabilitating a dam.

NR 166.06(2)(b) (b) Purchasing or selling water rights, except if the water rights are owned by a public water system that is being purchased through consolidation as part of a capacity development strategy.

NR 166.06(2)(c) (c) Developing an open reservoir unless the reservoir is part of the treatment process and is located on the property on which the water treatment facility is located.

NR 166.06 Note Note: A finished water reservoir or a reservoir that is part of the treatment process and located on the property where the treatment facility is located is eligible under sub. (1) (b) 3.

NR 166.06(2)(d) (d) A project or a portion of a project needed primarily for fire protection.

NR 166.06(2)(e) (e) A project for a public water system that lacks adequate technical, managerial, and financial capability, unless assistance will ensure compliance.

NR 166.06(2)(f) (f) A project for a water system determined to be a significant noncomplier unless funding will ensure compliance with safe drinking water act requirements.

NR 166.06(2)(g) (g) A project or a portion of a project primarily intended to serve future growth.

NR 166.06(2)(h) (h) A project or a portion of a project for water systems owned by state or federal agencies.

NR 166.06(2)(i) (i) A project not reasonably necessary and appropriate to address a public health concern.

NR 166.06(2)(j) (j) Any portion of a project that is not reasonably necessary and appropriate to address a public health concern within the scope of the scored project, except when approved by the department as eligible and necessary for the efficient operation or integrity of the overall water system.

NR 166.06(2)(k) (k) Except for a project for which the project type falls under sub. (1) (c) or (d), any project from which no construction costs are to be funded through the SDWLP, unless another governmental agency is providing financing for the construction costs and the department receives acceptable documentation of the other agency’s commitment, as determined by the department.

NR 166.06(2)(L) (L) Any project that will serve 2 or more municipalities and to which any of the following applies, unless the applicant provides documentation that meets the requirements described under s. NR 166.08 (4) (i):

NR 166.06(2)(L)1. 1. The applicant will obtain water from another municipality’s water facilities.

NR 166.06(2)(L)2. 2. The applicant is providing water to another municipality.

NR 166.06(2)(m) (m) Projects of a municipality that is failing to substantially comply with conditions or requirements of s. 281.58 or 281.59, Stats., ch. Adm 35, this chapter, an existing financial assistance agreement with the SDWLP or the clean water fund program, or the terms of a federal or state grant used to pay the costs to plan, design, or construct a water system.

NR 166.06 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.07 NR 166.07 Cost eligibility.

NR 166.07(1) (1) Eligible costs. Allocable project-specific costs that are necessary and reasonable are eligible for financial assistance under this subsection. Eligible costs include expenses incurred by the municipality for any of the following items and activities when specific to the scope of a scored project, or when approved by the department as necessary and reasonable for the efficient operation or integrity of the overall water system:

NR 166.07(1)(a) (a) Abandonment. Abandonment of an entire water system or portions of a water system if approved in the plans and specifications of an eligible project or by department staff, including activities such as demolition, re-landscaping, and removal and disposal of debris.

NR 166.07(1)(b) (b) Access roads. Construction of roadways necessary to provide appropriate access to water system facilities such as wellhouses, storage tanks, and water treatment plants.

NR 166.07(1)(c) (c) Administrative buildings and equipment. Buildings, offices, and office equipment and furnishings used for purposes of operating a water system, such as administration and storage buildings when part of the scope of the scored project and included in the approved plans and specifications or otherwise approved by department staff. The department may prorate costs for buildings, offices, and office equipment and furnishings that are partially used for purposes not related to the water system.

NR 166.07(1)(d) (d) Administrative costs of a commission. Administrative, legal, and other costs incurred by a commission solely for the scored project if identifiable in a contract or agreement between the member municipalities.

NR 166.07(1)(e) (e) Compliance with state and federal requirements. Costs incurred for activities associated with complying with state and federal requirements related to the scored project.

NR 166.07 Note Note: State and federal requirements may include any of the following: Americans with Disabilities Act design and construction; green project reserve documentation; Davis-Bacon and Related Acts administration or other activities associated with wage rate requirements; DBE solicitation and documentation; activities associated with the use of products made in the United States; environmental review of project sites and other activities related to ch. NR 150 compliance, including costs of public notices and hearings; historical, architectural, archaeological, and cultural resources work identified during planning, design, or construction of the project and incurred prior to project closeout; signage requirements, including on a website or at a drinking water facility or project site; audit activities related to the federal single audit act portion of the municipality’s annual audit report until the project is complete.

NR 166.07(1)(f) (f) Construction activities. Activities defined in s. NR 166.03 (14) and included in construction contracts or performed by force account, including any of the following:

NR 166.07(1)(f)1. 1. Replacing, repairing, or rehabilitating a water system if identified in the plans and specifications as cost-effective and necessary.

NR 166.07(1)(f)2. 2. Repairing or restoring items or areas damaged as a direct result of construction of the project.

NR 166.07(1)(f)3. 3. Completing punch list item activities.

NR 166.07(1)(f)4. 4. Acquiring, consuming, or expending materials.

NR 166.07(1)(f)5. 5. Obtaining products that comply with federal requirements to use products made in the United States in SDWLP projects.

NR 166.07(1)(f)6. 6. Incurring other capital costs solely for purposes of the scored project.

NR 166.07(1)(g) (g) Demolition. Demolishing existing portions of a water system if the demolition is part of a scored project and at least one of any of the following applies:

NR 166.07(1)(g)1. 1. The demolition will remove an existing building structure located in the space in which a new structure is to be constructed.

NR 166.07(1)(g)2. 2. The demolition is necessary for site preparation.

NR 166.07(1)(g)3. 3. The demolition is included in abandonment procedures as approved in the plans and specifications of the scored project or when otherwise approved by department staff.

NR 166.07(1)(g)4. 4. The demolition entails removal of equipment or materials, or both, from inside an existing water system building or other structure being modified or repurposed as part of the scored project.

NR 166.07(1)(h) (h) Easements and rights-of-way. Acquiring easements and rights-of-way if acquisition is from a willing seller. Expenses related to acquisition include purchase cost and administrative and legal expenses.

NR 166.07(1)(i) (i) Equipment. Equipment related to the scored project, the costs of which the department may prorate if the municipality intends to use the equipment for multiple purposes rather than solely for the water system. Eligible equipment includes any of the following:

NR 166.07(1)(i)1. 1. Mobile equipment, such as portable stand-by generators, portable emergency pumps, and grounds and maintenance equipment for mowing and snow removal, for the water system.

NR 166.07(1)(i)2. 2. Spare parts, if included in the plans and specifications or otherwise approved by the department.

NR 166.07(1)(i)3. 3. Machinery for manufacturing or repairing necessary tools or equipment for the water system.

NR 166.07(1)(i)4. 4. Computers, tablets, and related equipment, including purchasing, installing, programming, or upgrading computers, printers, control systems, and other computer-related equipment necessary for operating and maintaining the public water system. Equipment and systems for accounting, billing, public notification, testing, monitoring, reporting, emergency alerts, communications, geographic information, and supervisory control and data acquisition are included under this subdivision.

NR 166.07(1)(j) (j) Fees. Fees paid by the municipality for any of the following:

NR 166.07(1)(j)1. 1. Permits obtained for construction, including building, electrical, and plumbing permits, pit or trench dewatering permits, hydrostatic test water permits, construction site storm water permits, and railroad crossing permits.

NR 166.07 Note Note: Permit fees are not required by the department for waterway projects authorized under ch. 30, Stats., that are funded in whole or in part by any federal or state agency. Therefore, under sub. (2) (dm), if a municipality at the time of purchase of a permit under ch. 30, Stats., pays a fee for the permit due to not identifying the project as being funded with state or federal funds, the fee is not eligible for reimbursement by the SDWLP.

NR 166.07(1)(j)2. 2. Legal fees of an attorney that is not an on-staff municipal attorney, including costs of legal reviews of architectural, engineering, or construction contracts, user charge systems and water system ordinances, management plans, intermunicipal agreements, and legal work necessary for securing eligible permits.

NR 166.07(1)(j)3. 3. Service fees paid to a state or federal agency, except administrative fees paid annually along with principal and interest payments on a SDWLP loan.

NR 166.07(1)(k) (k) Galvanized pipe. Removal of galvanized pipe that was or is downstream of lead pipe, a lead gooseneck, or other appurtenances containing lead if the municipality has approval from the public service commission for a lead service line replacement program or is pledging general obligation bonds to the SDWLP.

NR 166.07(1)(L) (L) Groundwater monitoring. Installing groundwater monitoring equipment or facilities.

NR 166.07(1)(m) (m) Insurance. Purchasing insurance necessary during construction of the project, including property, liability, builder’s risk, and construction insurance.

NR 166.07(1)(n) (n) Interim debt. Costs associated with interim debt for the scored project as delineated in sub. (3).

NR 166.07(1)(o) (o) Laboratories. Laboratory equipment related to initial setup or a significant upgrade or expansion of an on-site laboratory if requested in the financial assistance application.

NR 166.07(1)(p) (p) Land acquisition. Acquiring land, including purchase cost and administrative and legal expenses if all of the following apply:

NR 166.07(1)(p)1. 1. The land is integral to the project, including land needed to locate a treatment facility, transmission line, storage tank, pump station, or well.

NR 166.07(1)(p)2. 2. The land is acquired from a willing seller.

NR 166.07(1)(q) (q) Lead service lines. Costs for removal and replacement of private service lines that are made of lead or galvanized materials if the municipality has public service commission approval for a lead service line replacement program or is pledging general obligation bonds to the SDWLP.

NR 166.07(1)(r) (r) Municipal staff, equipment, and materials. Municipal expenses incurred solely for the scored project and documented by the municipality as force account, including any of the following:

NR 166.07(1)(r)1. 1. Salary and benefits of municipal employees, except elected officials or on-staff attorneys, for time spent working directly on the scored project.

NR 166.07(1)(r)2. 2. Expendable material costs incurred by the municipality outside of a construction contract.

NR 166.07(1)(r)3. 3. Estimated costs incurred using equipment owned by the municipality.

NR 166.07(1)(s) (s) Professional services. Service fees and costs of engineering, architectural, legal, and other professional services provided for the project that are not force account work, including any of the following:

NR 166.07(1)(s)1. 1. Conducting value engineering studies or analyses during the design phase.

NR 166.07(1)(s)2. 2. Conducting system evaluations and studies, including well site investigations.

NR 166.07(1)(s)3. 3. Developing, preparing, and submitting engineering reports and plans and specifications.

NR 166.07(1)(s)4. 4. Preparing, printing, and distributing bidding documents.

NR 166.07(1)(s)5. 5. Gathering documents and information for, completing, and submitting the SDWLP financial assistance application and other forms and information required for financial assistance.

NR 166.07(1)(s)6. 6. Developing or revising an operations and maintenance manual.

NR 166.07(1)(s)7. 7. Preparing a plan of operation for the project.

NR 166.07(1)(s)8. 8. Advertising for and conducting bid lettings.

NR 166.07(1)(s)9. 9. Analyzing bids, preparing award recommendations, and preparing contracts.