Chapter NR 162

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.

NR 162.10(1)(a) (a) For costs of projects or portions of projects described in ss. NR 162.03 (1) (a), (b), and (d), 162.03 (2) and (3), 162.04 (1) (b), 162.22, and 162.23 (1) (a) and (b), the interest rate shall be the interest rate specified in s. 281.58 (12) (a), Stats.

NR 162.10(1)(b) (b) For project costs sanctioned under s. NR 162.08 (4) (b) for noncompliance with requirements for solicitation of DBEs, the interest rate shall be the market interest rate.

NR 162.10(1)(c) (c) For project costs under s. NR 162.03 (1) (c), the department shall determine the appropriate interest rate in accordance with s. 281.58 (8) (h) and (12) (a) 4., Stats.

NR 162.10(2) (2) Project interest rate calculation.

NR 162.10(2)(a) (a) If all of the eligible costs of a scored project are described under only one paragraph under sub. (1), the interest rate shall be the rate stated in the applicable section of s. 281.58 (12), Stats. If a scored project contains eligible costs described under more than one paragraph under sub. (1) and s. 281.58 (12), Stats., specifies interest rates for the categories that are different from each other, a composite interest rate shall be computed for the scored project under par. (b).

NR 162.10(2)(b) (b) The composite interest rate shall be computed as follows:

RC = (RT 1)(PR 1) + (RT 2)(PR 2) + (RT 3)(PR 3)

where:

RC . . . is the composite interest rate for the project.

RT 1 . . . is the interest rate stated under s. 281.58 (12) (a) 1. a., b., or c., Stats., for the municipality based on its population as described in s. NR 162.003 (55) and median household income as determined under par. (d).

RT 2 . . . is the market interest rate as defined under s. 281.58 (1) (cg), Stats.

RT 3 . . . is the interest rate established under s. 281.58 (12) (a) 5., Stats., for projects that provide facilities to receive or store septage, or provide treatment capacity for septage, as defined in s. 281.58 (1) (cv), Stats.

PR1 . . . is the percentage of the project under s. NR 162.03 (1) (a), (b), and (d) and (2) that is eligible for a subsidized rate and being financed by the CWFP, and under s. NR 162.03 (1) (c) if the municipality is not a violator of an effluent limitation as defined in s. 281.58 (1) (e), Stats.

PR2 . . . is the percentage of the project being financed by the CWFP that is eligible under s. NR 162.04 (1) (b), and under s. NR 162.03 (c) if the municipality is a violator of an effluent limitation as defined in s. 281.58 (1) (e), Stats.

PR3 . . . is the percentage of the project being financed by the CWFP that is eligible under s. NR 162.03 (1) (a) 1. and eligible for a zero percent interest rate under s. 281.58 (12) (a) 5., Stats.

NR 162.10(2)(c) (c) The interest rate shall be based on the market rate in effect at the time the municipality passes a bond resolution to secure the loan from the CWFP.

NR 162.10(2)(d) (d) The department shall determine median household income for purposes of determining the loan interest rate as established in s. 281.58 (12) (a) 1. a. to c., Stats., as follows:

NR 162.10(2)(d)1. 1. If the municipality is a place, as defined for purposes of data collection by the U.S. bureau of the census, including a city, village, or census designated place, or the municipality is a county or a minor civil division, the department shall obtain the most recent 5-year-data median household income figure published for the municipality by the U.S. bureau of the census prior to the department’s publishing of the annual project priority list.

NR 162.10 Note Note: The department uses U.S. bureau of the census municipal incomes as derived from the American Community Survey and published annually in the 5-year survey data. At the time of writing of this administrative code, the U.S. bureau of the census is not collecting income data during the decennial census. The U.S. bureau of the census does not publish data for all types of municipalities eligible for CWFP financial assistance.

NR 162.10(2)(d)2. 2. The department may require a municipality for which the U.S. bureau of the census does not publish median household income data to provide information to assist the department in determining a median household income for the municipality for purposes of this chapter. The information required and used by the department may include any of the following:

NR 162.10(2)(d)2.a. a. The number of residential users served by the municipality.

NR 162.10(2)(d)2.b. b. A map showing the municipal boundaries, and the number of residential users served by or the population of the municipality within each town or county for municipalities that cross town or county boundaries.

NR 162.10(2)(d)3. 3. If the municipality is a town sanitary district or public inland lake protection and rehabilitation district, the municipality may supply a median household income provided by the U.S. bureau of the census, along with documentation of how the median household income was determined. Whether the median household income is initially determined by the department or supplied by the municipality for the department’s approval, this median household income of the municipality shall be derived from the same ACS data release as that being used by the department for the fiscal year applicable to the funding cycle for which the application is submitted and shall be one of the following:

NR 162.10(2)(d)3.a. a. A median household income derived by requesting a custom tabulation of income data at the census block level from the ACS.

NR 162.10 Note Note: To obtain a custom tabulation, the municipality will likely need to compare a map showing the boundaries of the municipality to a census block map and determine which census blocks contain any portion of the municipality. The municipality would then submit the appropriate census block numbers to the U.S. bureau of the census (see https://www.census.gov/programs-surveys/acs/data/custom-tables.html) with a request for a custom tabulation of a median household income figure for that set of identified blocks only.

NR 162.10(2)(d)3.b. b. The median household income of the census tract or block group that encompasses the municipality. If the municipality falls within 2 or more census tracts or block groups, the median household income shall be weighted by the population of the municipality that resides within each census tract or block group.

NR 162.10(2)(d)3.c. c. The median household income of the minor civil division within which the municipality is located. If the municipality falls within 2 or more minor civil divisions, the median household income shall be weighted by the population of the municipality that resides within each minor civil division.

NR 162.10(2)(d)3.d. d. An average median household income calculated by: determining the published median household income of each member municipality if the applicant municipality, such as a sanitary district or metropolitan sewerage district, is made up of multiple municipalities, such as cities, villages, and census designated places; weighting each of those median household incomes by the percentage that the population of the individual municipality is of the total population; summing the individual weighted median household incomes; and dividing the sum by the total number of municipalities that are members of the applicant municipality.

NR 162.10(2)(d)4. 4. If the sewer service area of the treatment works within the boundaries of the municipality is different than the municipality’s boundaries, the municipality may choose to follow the custom tabulation procedure as described under subd. 3. a. and submit the result to the department to use in lieu of the median household income obtained by the department as described under subd. 1.

NR 162.10 History History: CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 162.11 NR 162.11 Financial assistance agreement conditions.

NR 162.11(1) (1) Each financial assistance agreement shall require the recipient to do all of the following:

NR 162.11(1)(a) (a) Maintain a system of user charges and a sewer use ordinance in accordance with s. NR 162.07 for the useful life of the treatment works or BMP.

NR 162.11(1)(b) (b) Comply with all pertinent requirements of federal, state, and local environmental laws and regulations.

NR 162.11(1)(c) (c) For financial assistance provided directly from a federal capitalization grant, comply with the requirements contained in 33 USC 1251 to 1274 and 33 USC 1381 to 1387 if required by the terms of the capitalization grant.

NR 162.11(1)(d) (d) Provide timely sewerage service to all users of the treatment works within the delineated service area except in areas where annexation is refused under s. 281.43 (1m), Stats.

NR 162.11(1)(e) (e) Comply with all state and local laws regarding procurement and public contracts.

NR 162.11(1)(f) (f) Provide department representatives access to the scored project, including all construction activities, whenever the project is in preparation or progress. For purposes of providing access, the recipient shall do all of the following:

NR 162.11(1)(f)1. 1. The recipient shall in each of its contracts for the project include a provision that requires the recipient and its contractors to allow the department access to records of contractors and subcontractors pertinent to the project for the purpose of making inspections, examinations, excerpts, copies, and transcriptions.

NR 162.11(1)(f)2. 2. The recipient shall allow DOA or its agent access to records for audits.

NR 162.11(1)(g) (g) Expeditiously initiate and complete the project in accordance with the financial assistance agreement and application, including construction of and payments for the portions ineligible for CWFP financial assistance and any project schedule approved by the department. Failure of the recipient to promptly initiate project work may be deemed a breach of the financial assistance agreement.

NR 162.11(1)(h) (h) Promptly notify the department of changes to the project, including notifying a department plan reviewer and the department construction management engineer when plans and specifications are being revised.

NR 162.11(1)(i) (i) Promptly submit to the department a copy of any prime contract or modification to it and any revisions to plans and specifications.

NR 162.11(1)(j) (j) Begin repayment of the principal balance of the loan no later than 12 months after the substantial completion date of the project as specified in the financial assistance agreement, and make the final principal payment no later than 20 years after the date of the financial assistance agreement unless the financial assistance agreement term is greater than 20 years but not more than 30 years. If the loan term is greater than 20 years, the municipality shall make the final principal payment no later than 30 years after the date of the financial assistance agreement.

NR 162.11(1)(k) (k) Make available an operations and maintenance manual for the treatment works. All of the following apply to the provision of an operations and maintenance manual: