Chapter NR 166

NR 166.135 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 SDWLP financial assistance.

NR 166.135(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 166.135(2)(a) (a) The number of residential users served by the municipality.

NR 166.135(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 166.135(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 166.135(3)(a) (a) A median household income derived by requesting a custom tabulation from the bureau of the census of ACS income data at the census block level.

NR 166.135 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 166.135(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 166.135(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 166.135(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 joint local water authority or sanitary 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 166.135(4) (4) If the service area of the water system 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 sub. (3) (a) and submit the result to the department to use in lieu of the median household income obtained by the department as described in sub. (1).

NR 166.135 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.14 NR 166.14 Financial assistance agreement conditions.

NR 166.14(1) (1) Each financial assistance agreement shall require the recipient to do all of the following:

NR 166.14(1)(a) (a) Maintain system water rates and operating rules in accordance with s. NR 166.10 (7) or (8).

NR 166.14(1)(b) (b) Comply with all pertinent requirements of federal, state, and local environmental laws and regulations.

NR 166.14(1)(c) (c) Comply with the requirements contained in 42 USC 300j-12.

NR 166.14(1)(d) (d) Pay the costs of water system construction that are ineligible for financial assistance under this chapter.

NR 166.14(1)(e) (e) Comply with all state and local laws regarding procurement and public contracts.

NR 166.14(1)(f) (f) Provide department representatives access to the scored project, including construction activities, whenever the project is in preparation or progress, and for a final inspection when the project is complete. For purposes of providing access, the recipient shall do all of the following:

NR 166.14(1)(f)1. 1. In each of its contracts for the scored 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 166.14(1)(f)2. 2. Allow DOA or its agent access to project-related records for audits.

NR 166.14(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 SDWLP 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 166.14(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 166.14(1)(i) (i) Promptly submit to the department a copy of any prime contract or modification of it and any revisions to plans and specifications.

NR 166.14(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 166.14(1)(k) (k) Provide and maintain adequate construction inspection to ensure conformance with the approved plans and specifications, proper construction methods, and the financial assistance agreement.

NR 166.14(1)(L) (L) Notify the department of the substantial completion of the project.

NR 166.14(1)(n) (n) Comply with all applicable provisions of any outstanding SDWLP and clean water fund program financial assistance agreements and interest rate subsidy agreements.

NR 166.14(1)(o) (o) Obtain and maintain full legal right and authority required to own, control, operate, and maintain the project for at least the term of the financial assistance agreement, including assuring that any of the following requirements regarding the land on which the project takes place are met:

NR 166.14(1)(o)1. 1. If the municipality prior to signing a financial assistance agreement owns all of the land on which the project takes place, the municipality shall maintain ownership of the land on which the project is built for at least the term of the financial assistance agreement unless the municipality obtains approval from the department to discontinue operation of, sell, or otherwise dispose of the project.

NR 166.14(1)(o)2. 2. If the municipality prior to signing a financial assistance agreement does not own any of the land on which the project takes place, the municipality shall obtain and maintain for at least the term of the financial assistance agreement all necessary permits, licenses, easements, and approvals required to give the municipality the authorities and permissions needed to construct, operate, and maintain the project on the land on which the project is built unless the municipality obtains approval from the department to discontinue operation of, sell, or otherwise dispose of the project.

NR 166.14(1)(o)3. 3. If the municipality prior to signing a financial assistance agreement owns some but not all of the land on which the project takes place, the municipality shall follow the requirements under subds. 1. and 2. regarding maintaining ownership of or access needed to the land on which the project takes place to allow the municipality to construct, operate, and maintain the project on the land on which the project is built for at least the term of the financial assistance agreement.

NR 166.14(2) (2) Not withstanding sub. (1) (o), municipalities are not required to submit a certification or legal opinion regarding portions of land on which removal of private lead service lines or galvanized pipes takes place.

NR 166.14(3) (3) The financial assistance agreement is not effective until all parties to the financial assistance agreement have signed it.

NR 166.14 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.15 NR 166.15 Financial management. The recipient shall do all of the following:

NR 166.15(1) (1) Maintain project accounts in accordance with generally accepted accounting principles, governmental accounting standards board requirements, or other methods of accounting accepted by the department or required by the federal government.

NR 166.15(2) (2) Maintain a financial management system that meets the requirements, terms, and conditions of the financial assistance agreement and ch. Adm 35.

NR 166.15(3) (3) Comply with any U.S. treasury requirements for maintaining the tax–exempt status of the bonds or notes sold to the SDWLP.

NR 166.15 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.16 NR 166.16 Financial assistance disbursements.

NR 166.16(1) (1) Requests for disbursement. The recipient shall submit to the department requests for disbursement for eligible costs in the format specified by the department.

NR 166.16(2) (2) Adjustment. Before the final disbursement under the financial assistance agreement, the department may recommend to DOA that any request for disbursement be reviewed or audited.

NR 166.16(3) (3) Withholding of funds. The department may withhold funds on the basis of any of the following:

NR 166.16(3)(a) (a) The department may direct DOA to withhold financial assistance disbursements if the department determines that a recipient has failed to comply with project objectives or the terms, conditions, or reporting requirements of the financial assistance agreement.

NR 166.16(3)(b) (b) The department may withhold 5 percent of the principal amount of a loan until all of the project closeout requirements under sub. (4) (b) are completed.

NR 166.16(3)(c) (c) The department may withhold payment of costs that fall outside of the beginning or end dates of a contract or that are in excess of the estimated not-to-exceed amount in the contract until the recipient amends the contract.

NR 166.16(3)(d) (d) The department may withhold payment of costs of a contract until the recipient submits the required documentation for the costs, including a copy of the department construction management engineer’s approval letter for any change order for which payment is requested and any amendments to engineering or other professional services contracts for which disbursement of financial assistance for costs of the contract will be requested.

NR 166.16(4) (4) Final disbursement and project closeout.

NR 166.16(4)(a) (a) The recipient shall submit the final request for disbursement as soon as is practicable after final completion of project construction.

NR 166.16(4)(b) (b) All of the following project closeout procedures shall occur prior to the final disbursement or as soon as is practicable after final completion of project construction if the recipient determines it will not be requesting any additional funds but did not previously label a request for disbursement as the final request:

NR 166.16(4)(b)1. 1. The department shall complete a final inspection and sign off on the scored project.

NR 166.16(4)(b)2. 2. The recipient shall submit to the department for review all change orders and amendments for all contracts associated with the project that the recipient did not submit before or during construction of the project.

NR 166.16(4)(b)3. 3. The recipient shall certify its acceptance of the project from its contractors and engineers on a form provided by the department.

NR 166.16 Note Note: A project acceptance certification form is available on the Environmental Improvement Fund website at https://dnr.wisconsin.gov/aid/documents/EIF/Forms/forms.html or in paper form from the Bureau of Community Financial Assistance, Department of Natural Resources, Box 7921, Madison WI 53707-7921.

NR 166.16(4)(b)4. 4. The recipient shall document final utilization of MBEs and WBEs on a form provided by the department.

NR 166.16 Note Note: An MBE/WBE utilization form is available on the Environmental Improvement Fund website at https://dnr.wisconsin.gov/aid/documents/EIF/Forms/forms.html or in paper form from the Bureau of Community Financial Assistance, Department of Natural Resources, Box 7921, Madison WI 53707-7921. This form is also provided in the financial assistance agreement as an exhibit.

NR 166.16(4)(b)5. 5. The recipient shall certify its compliance with federal requirements as detailed in the financial assistance agreement.

NR 166.16(4)(b)6. 6. The department shall inform DOA of the recipient’s compliance with all applicable requirements of this chapter and the financial assistance agreement.

NR 166.16(4)(b)7. 7. After the department determines that the project closeout requirements under subds. 1. to 6. are completed, the department shall notify the recipient that the project is closed out, or, if there is a final disbursement yet to be sent to the recipient, the department shall notify the recipient of the date and amount of the final disbursement and that the project will be closed out on the date of the final disbursement.

NR 166.16(4)(c) (c) If construction of a project is complete prior to the SDWLP loan closing for the project, the recipient shall submit project closeout documents within 90 days of the loan closing date.

NR 166.16(4)(d) (d) If the recipient does not provide the required documents for project closeout of a completed project to the department for any SDWLP financial assistance agreement or any other financial assistance from the environmental improvement fund and applies for funding from the environmental improvement fund for another project, the department may deny financial assistance for the new project until the previous project is closed out according to requirements under this chapter.

NR 166.16 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.17 NR 166.17 Amendments to a financial assistance agreement.

NR 166.17(1) (1) Additional funding.

NR 166.17(1)(a) (a) General.

NR 166.17(1)(a)1. 1. ‘Additional assistance at end of project.’ The department may issue an amendment to a financial assistance agreement to provide additional financial assistance for eligible project costs incurred beyond the amount specified in the original financial assistance agreement. The department may process a request to provide additional financial assistance for a project only after the total remaining costs to complete the project can be reasonably determined.

NR 166.17(1)(a)2. 2. ‘Consistent with scope.’ To be eligible for additional financial assistance, any changes in the project necessitating the amendment must be consistent with the objectives and scope of the project as described in the original financial assistance agreement. Changes that necessitate an amendment must be due to unforeseen circumstances or approvable change orders to a project construction contract.

NR 166.17(1)(a)3. 3. ‘Plans and specifications approval.’ If there are changes in the project that require department approval of plans and specifications, the municipality shall obtain department approval prior to the amendment loan closing.

NR 166.17(1)(a)4. 4. ‘New financial assistance agreement.’ An amendment shall be in the form of a new financial assistance agreement tied to the original project through the budget and project description. The department and the DOA shall determine the appropriate interest rate for the amendment based on the market interest rate in effect on the date of the municipality’s meeting at which they pass the related bond resolution.

NR 166.17(1)(a)5. 5. ‘Debt coverage requirements.’ The municipality must meet debt coverage requirements for the additional financial assistance.

NR 166.17(1)(b) (b) Applicability. Additional financial assistance under par. (a) for a scored project is subject to all of the following:

NR 166.17(1)(b)1. 1. ‘Availability of funds.’ If there are sufficient loan funds available, as determined under s. 281.59, Stats., a municipality may receive loan funds for additional project costs incurred that cause the total eligible project costs to be greater than the amount provided in the original financial assistance agreement. The loan interest rate and loan maturity date shall be determined by the department and DOA.

NR 166.17(1)(b)2. 2. ‘No principal forgiveness.’ The department may not provide additional principal forgiveness funds in the amendment to the financial assistance agreement.

NR 166.17(1)(c) (c) Requesting funds. A municipality may request financial assistance for additional project costs using one of the following options:

NR 166.17(1)(c)1. 1. ‘Request in writing.’ The municipality shall submit a written request to the department that justifies the need for additional financial assistance and details the additional eligible costs. A revised budget shall be submitted with the request indicating in one column the line-item totals in the financial assistance agreement, in a second column the requested additional costs, and in a third column the total project costs requested to be funded through the SDWLP via an amendment to the original financial assistance agreement. If there are other funding sources participating in the project, the revised budget shall indicate all funding changes applicable to the additional financial assistance being requested. All costs in the revised budget shall be assigned to the appropriate budget line items from which disbursement will be requested.

NR 166.17(1)(c)2. 2. ‘Electronic submittal.’ The department may require the written request for an amendment to be submitted as an email message with an attachment, as input into the department’s online application system, or by other appropriate means determined by the department.

NR 166.17(1)(d) (d) Plans and specifications. A municipality shall submit to the department any plans and specifications required for changes in the project that necessitate the amendment to the financial assistance agreement. The department shall issue an amendment for the additional project costs only after the department approves any engineering reports or plans and specifications required for the work related to the additional costs.

NR 166.17(1)(e) (e) Notice of intent to apply. A new notice of intent to apply for funding as described under s. NR 166.08 (1) is not required for purposes of requesting a financial assistance agreement amendment.

NR 166.17(2) (2) Effective date. A financial assistance agreement amendment is effective when executed by all parties to the agreement.

NR 166.17 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.18 NR 166.18 Disputes.

NR 166.18(1) (1) Decision of the department. Except as otherwise provided by law, any dispute arising under this chapter prior to the execution of a financial assistance agreement shall be decided in writing by the department. The department shall serve a copy of the decision on the applicant by mail.

NR 166.18(2) (2) Review of the decision. A final decision of the department may be reviewed under subch. III of ch. 227, Stats., and ch. NR 2.

NR 166.18 History History: CR 22-068: cr. Register October 2023 No. 814, eff. 11-1-23.

NR 166.19 NR 166.19 Records and records retention.

NR 166.19(1) (1) Requirements. The recipient shall maintain SDWLP project-related books, documents, papers, records, and accounting procedures in accordance with generally accepted accounting principles, governmental accounting standards board requirements, or another method of accounting accepted by the department or required by the federal government and authorized under the financial assistance agreement and ch. Adm 35 and retain them in accordance with subch. II of ch. 19, Stats. The recipient shall require contractors, including contractors for professional services, to maintain SDWLP project-related books, documents, papers, and records related to the project that are necessary for the recipient’s compliance with this section.

NR 166.19(2) (2) Inspection. The department or its agents may, during normal business hours, inspect and copy the recipient’s SDWLP project-related records and the project-related records of its contractors.