Chapter NR 162

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.

NR 162.08(4)(a)3. 3. Dividing total project requirements into smaller tasks or quantities, when economically feasible, to permit maximum participation by DBEs in the competitive process.

NR 162.08(4)(a)4. 4. Considering contracting with a consortium of DBEs when a contract is too large for one DBE to handle individually.

NR 162.08(4)(a)5. 5. Using the services and assistance of the federal small business administration and the minority business development agency of the U.S. department of commerce.

NR 162.08(4)(a)6. 6. Using required federal forms when applicable.

NR 162.08(4)(a)7. 7. Including in project bidding documents DBE information prescribed by the department.

NR 162.08(4)(a)8. 8. Soliciting DBEs certified under the unified certification program or by the U.S. environmental protection agency or an agency approved by the U.S. environmental protection agency to certify DBEs, and providing to the department documentation of solicitation efforts made.

NR 162.08 Note Note: The Wisconsin department of transportation unified certification program’s list of certified DBEs is available online at https://wisconsindot.gov/Pages/doing-bus/civil-rights/dbe/certified-firms.aspx.

NR 162.08(4)(a)9. 9. Documenting all participation of DBEs, including MBEs and WBEs, and submitting the documentation in the required form to the department. Documentation of all participation of DBEs under this subdivision includes documenting participation of engineering or other professional services firms, materials suppliers, equipment suppliers and contractors, and construction contractors that are certified DBEs as described in subd. 8.

NR 162.08(4)(b) (b) Failure to comply with par. (a) may result in a sanction of up to 8 percent of the construction costs eligible for subsidy being financed at the market interest rate. This paragraph does not apply to any recipient that awards at least one contract directly related to the project to at least one MBE or WBE selected through proper solicitation methods.

NR 162.08(5) (5) Force account work. The department may approve financial assistance for force account work based on the applicant’s certification that at least one of the following applies:

NR 162.08(5)(a) (a) The applicant’s staff has the necessary competence required to accomplish the work and can accomplish the required tasks more economically as force account work.

NR 162.08(5)(b) (b) Emergency circumstances make force account work necessary.

NR 162.08(6) (6) Contracts for professional services.

NR 162.08(6)(a) (a) The department may review professional services contracts and amendments for the eligibility and reasonableness of costs. The department shall only provide financial assistance for costs that are eligible, necessary, and reasonable for the scored project.

NR 162.08(6)(b) (b) Reasonableness reviews may include a comparison of professional services fees for the project to the range of professional services fees for similar work on similar projects undertaken within the state. The department may consider the scope of work, conditions unique to the project, and any other factors affecting costs.

NR 162.08(6)(c) (c) Professional services contracts shall indicate a maximum estimated cost for a defined scope of work that the contractor may not exceed without a negotiated contract amendment for additional costs.

NR 162.08(6)(d) (d) The department shall disburse funds for professional services costs in excess of the estimated or not-to-exceed amount of a contract only after the applicant submits an amendment to the contract that includes signatures of all parties to the contract, a description of the additional work covered by the amendment, and a revised not-to-exceed amount.

NR 162.08(6)(e) (e) The recipient shall submit each professional services agreement amendment within 90 days of execution of the amendment, or, for amendments executed prior to submittal of the CWFP application, with the application submittal. The department may deny the costs included in the amendment if the recipient does not submit the amendment within the timeframes specified in this paragraph.

NR 162.08(7) (7) Construction contracts and subcontracts.

NR 162.08(7)(a) (a) Applicability. This subsection applies to construction contracts or subcontracts awarded by recipients for any construction activity. The department may only provide CWFP financial assistance for costs of a construction contract if the municipality complies with all applicable procurement laws in obtaining the construction contractor.

NR 162.08(7)(b) (b) Type of contract. The scored project work shall be performed under one or more contracts awarded by the recipient to private firms except for force account work authorized under sub. (5). Unless the department gives advance written approval for the recipient to use some other acceptable type of contract, each contract shall be one of the following types or a combination of these types: lump sum, unit price, or time and expense. A cost–plus–a–percentage–of–cost type contract may not be used in any circumstance.

NR 162.08(7)(c) (c) Contract change orders.

NR 162.08(7)(c)1. 1. The recipient shall secure a fair and reasonable price for each contract change order.

NR 162.08(7)(c)2. 2. The recipient shall promptly and no later than 90 days after execution of the change order submit to the department construction management engineer each change order and all associated backup documentation.

NR 162.08(7)(c)3. 3. If a change order is executed fewer than 90 days but no more than 9 weeks prior to the estimated loan closing date for the project, the recipient shall submit the change order to the department promptly after execution and no later than 9 weeks prior to the loan closing in order to have the impact of the change order on the contract reflected in the financial assistance agreement budget.

NR 162.08(7)(c)4. 4. The department may deny the costs of the change order if the recipient does not submit the change order to the department within the timeframes specified in subds. 2. and 3.

NR 162.08(7)(c)5. 5. If the recipient is in the process of negotiating a change order, has a change order pending execution, or executes a change order less than 9 weeks but no more than 3 weeks prior to the estimated loan closing date, the recipient shall provide information regarding the purpose of and likely cost for the change order in writing to the department construction management engineer or loan project manager for consideration of inclusion in the financial assistance agreement budget.

NR 162.08(7)(c)6. 6. The recipient shall submit for approval by the department all change orders for all contracts included in whole or in part in a project funded under this subchapter or subch. III.

NR 162.08(7)(c)7. 7. The recipient shall receive the department construction management engineer’s approval of the costs included in the change order prior to submitting to the department a request for disbursement of funds for costs of the change order.

NR 162.08 History History: CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 162.09 NR 162.09 Reimbursement and refinancing.

NR 162.09(1) (1) Reimbursement of previously paid debt. The department may reimburse eligible project costs previously paid by the municipality from its internal funds, if the reimbursement is in compliance with applicable U.S. treasury reimbursement regulations in 26 CFR 1.150-2, the project does not reach substantial completion more than 3 years prior to the date the applicant submits a complete application for financial assistance under s. NR 162.05 (4), and the applicant does not already have outstanding long-term affordable debt for its project that reached substantial completion more than 3 years prior to the date on which a complete application was submitted to the department.

NR 162.09(2) (2) Refinancing of interim debt. The department may refinance the eligible portion of a municipality’s interim debt subject to the limits established in s. NR 162.04 (3).

NR 162.09 History History: CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 162.10 NR 162.10 Loan interest rate. The department shall calculate interest rates in accordance with s. 281.58 (12), Stats., and all of the following:

NR 162.10(1) (1) Interest rates.