11 Miss. Code. R. 6-5.3

Current through January 14, 2025

Rule 11-6-5.3 - Project Requirements

A. Application for WPCELF Loan

(1) Obtaining a Loan Application. Potential applicants may request a WPCELF loan application package by contacting the Department. The Department will transmit the loan application package to the potential applicant.

(2) Budget Period. Costs for the project must be incurred within the Budget Period established in the loan agreement. When justified and when approved by the Department, the Budget Period may begin prior to loan award but may not begin more than 90 days prior to the issuance of a funding pre-commitment letter or receipt of the loan application by the Department. If project costs are incurred prior to loan offer, the prospective loan recipient agrees that he is proceeding at his own risk and relieves the Commission, the Department, and the Department staff of all responsibility and liability should such costs later be determined unallowable or should such funding not become available for any reason.

The end of the Budget Period will coincide with the 30 day deadline described in Rule 5.3.D.(2) of these regulations.

(3) Contents of Application. All documents listed below must be complete and approvable when submitted to the Department.

An original WPCELF loan application package must be submitted to the Department. When forms are provided by the Department these forms must be used, and these forms may not be altered. The WPCELF loan application may request assistance only for costs that are allowable in accordance with Appendix A of these regulations and may include a construction contingency, as determined by the Department, in the project budget. The application must include in the Project Budget any administration fee charged to the loan recipient by the Department. A complete application must conform to these regulations, including all Appendices, and must include the following:

(a) A completed WPCELF loan application form, which includes the amounts requested for construction, repairs, equipment, supplies, land/easements, testing contracts, contingency, contracts for planning, design, land acquisition, legal, engineering and other professional services during construction and any required administration fees.

(b) A certified copy of a resolution by the loan applicant's governing body which:

(1) declares the existence of an emergency, which meets the definition of an emergency as defined in Rule 5.1.B.(16) of these regulations;

(2) agrees to implement, prior to final disbursement of WPCELF funds, an approved user charge system, as defined in Rule.5.1.B.(51)of these regulations, adequate to completely cover all costs, including repayment of the WPCELF loan;

(3) authorizes and designates an individual or office to serve as the authorized representative, to make application for assistance, and to sign documents required to undertake and complete the project on behalf of the applicant.

(c) A report including a clear description of the emergency, the recommended course of action, and the estimated costs and schedule to remedy the emergency from the certified operator or engineer or other qualified personnel (i.e., contractor, equipment representative, electrician, etc.). If such project must be designed by a registered engineer in accordance with state law and the Rules and Regulations of the Mississippi State Board of Registration for Professional Engineers and Land Surveyors, the report must include the seal of the engineer who prepared the report.

(d) Engineer's plans and specifications, if applicable.

(e) A procurement certification from the loan applicant and the loan applicant's legal counsel, stating that all procurement actions related to the WPCELF loan project have been, and will be, in compliance with state law and Appendix B of these regulations.

(f) A draft user charge system and ordinance. The ordinance implementing this user charge system must be enacted prior to final disbursement of WPCELF loan funds and by the date established in the WPCELF loan agreement.

(g) A statement of the amount of all local funds necessary for the project and a financial certification from the loan applicant which states that all local funds necessary for the project have been secured, or will be secured within 30 days after loan offer, and a statement to this effect from the funding source(s). If all funds for the project are being requested from the WPCELF program, this certification need not be submitted.

(h) A completed financial capability summary.

(i) A legal certification from the loan applicant and the loan applicant's legal counsel, stating that (1) the loan applicant has authority under state laws and regulations to receive WPCELF loan assistance, to collect user charges through an approved user charge ordinance, to enforce the user charge ordinance and sewer use ordinance, to repay the loan under the terms of the loan agreement, to comply with all other terms of the loan agreement, to own, operate, maintain and replace the facilities to be constructed with WPCELF loan funds, and that (2) there are no restrictions under federal or state laws or regulations which may prevent the loan applicant from executing the WPCELF loan agreement and implementing the project.

(j) If new real property or easements are necessary to construct the project, clear site certificates from the loan applicant and the title counsel indicating that the loan applicant has secured all such real property and easements (including power and other utilities).

(k) Completion of the intergovernmental review process as described in Appendix G of these regulations, and submittal of a completed intergovernmental review certification, any intergovernmental review agency comments received, and the action required to address all comments prior to awarding contracts for construction.

(l) All other permits, forms, documents, and supporting information that may be required by the Department.

B. Award of WPCELF Loan

(1) Upon determination by the Department that (a) all applicable requirements of these regulations have been met, (b) all documents submitted with the application are approvable, (c) all applicable permits have been issued or will be issued, and (d) funds are available for the amount of the WPCELF loan application, the Executive Director will execute and transmit a WPCELF loan offer (includes an offer letter and loan agreement) to the loan recipient. In addition to the estimated allowable project costs as described in Appendix A of these regulations, the loan offer may include a construction contingency, as determined by the Department, in the project budget.

(2) Upon receipt of the WPCELF loan offer, the loan recipient must execute and return it to the Department, along with a certified copy of a resolution, if not previously submitted, by the loan recipient's governing body authorizing acceptance of the loan offer within the time frame established in the WPCELF loan offer. The loan offer becomes void if not executed and returned within the time frame specified, unless extended by the Executive Director.

(3) Upon return of the executed WPCELF loan agreement to the Department, any administration fee established in the loan agreement will be processed accordingly and such fee will be paid to the appropriate Department administration fund.

C. Construction Phase

(1) Schedule. The following submittals, approvals, and actions will be required during the construction phase of the project. The Department may establish other time frames within the loan agreement when properly justified.

(a) Within 30 days after the original loan offer all local funds necessary for the project must be secured and proof of such must be submitted to the Department.

(b) Within 90 days after the original loan offer, the loan recipient (1) must execute and submit to the Department a copy of all contracts for construction/ equipment/supplies and engineering planning/design and construction phase services, including contracts for land acquisition, legal, and other professional services, and must issue any remaining notices to proceed, begin remaining construction work, begin purchase of any remaining equipment/supplies funded under the loan agreement and transmit a copy of all notices to proceed to the Department, and (2) if any contracts must be bid, the loan recipient must also submit a completed loan agreement amendment request (to reflect as-bid and other executed construction contract amounts, all other executed contract amounts, a construction contingency as determined by the Department, and any original administration fee) to the Department.

The loan recipient will be responsible for assuring that every appropriate procedure and incidental legal requirement is observed in awarding these contracts.

After review, the Department will determine whether a request for an increased loan amount is justified and eligible and whether funds are available. The Department may, if determined necessary and appropriate, transmit to the loan recipient an amended WPCELF loan offer, which includes in the project budget (a) as-bid (if applicable) and other executed construction contract amounts, (b) all other contract amounts, (c) a construction contingency as determined by the Department, and (d) any original administration fee. Upon receipt of an amended WPCELF loan offer, the loan recipient must execute and return the agreement to the Department within the timeframe established in the WPCELF loan offer letter. After execution of the original loan agreement, or if applicable the amended WPCELF loan agreement, the WPCELF loan amount will not amount must be paid by the loan recipient from sources other than WPCELF funds.

(2) Preconstruction Conferences. If determined necessary by the loan recipient, the loan recipient may arrange and hold a preconstruction conference and, if held, must notify and allow attendance and participation by the Department.

(3) Observation During Construction. During all times that construction work is being performed which requires the services of a registered engineer, the loan recipient must provide for full-time observation of the project by the engineer or his staff and must require the engineer's assurance that the work is being performed in a satisfactory manner in accordance with the WPCELF loan agreement and the approved plans, specifications, and contract documents, approved change orders, and in accordance with sound engineering principles and construction practices. Less than full-time observation may be allowed when properly justified and approved by the Department.

The Department is authorized to observe the construction of any project at any time for compliance with the terms of the loan agreement and to determine if the loan recipient is assuring that plans, specifications and contract documents are being followed. A representative may be stationed at the construction site by the Department. Such observation will not subject the Department to any action for damages or other liability. Such observation will not release the contractor from any obligation to perform the work in accordance with the requirements of the contract documents, nor the engineer from determining compliance with the requirements of the contract documents, nor the loan recipient from insuring compliance with the terms of the loan agreement.

The contractor, engineer, and the loan recipient must furnish the Department with every reasonable opportunity and means for observing whether the work as performed appears to be in accordance with the requirements of the loan agreement. The Department is authorized to observe and require submission of daily logs, record drawings, file notes, and any other documents prepared by any party in relation to the WPCELF funded project.

(4) Observation of Materials and Equipment. The Department is also authorized to observe all equipment and materials furnished, including observation of the preparation or manufacture of the equipment and materials to be used.

(5) Construction Deficiencies

(a) In the event construction procedures, materials or equipment appear to the Department to be substandard, otherwise unsatisfactory, and/or not in conformity with these regulations or the loan agreement, the Department may determine such work unallowable for WPCELF loan participation, unless the loan recipient takes such action, through the engineer if applicable, in the manner provided for in the construction contract to correct any such deficiencies.

(b) The Department may immediately begin withholding WPCELF loan payments should such substandard or unsatisfactory construction work, materials, or equipment become apparent and may require the loan recipient to repay any previously paid amounts related to such work, within 30 days of such notification. Interest may be charged on such delinquent repayments after expiration of the 30-day period at the rate established in Rule 5.3.E.(6) of these regulations. Alternatively, the Department may withhold such amounts from subsequent payment requests.

(c) In addition to normal testing procedures required of the loan recipient, should questions arise concerning the construction work, materials, or equipment, for WPCELF loan allowability purposes the Department may request the loan recipient to perform reasonable additional tests of construction materials, equipment, or processes which the Department determines to be necessary to answer such questions during or after the construction of the project. All tests, whether for the Department or the engineer, must conform to current American Water Works Association, American Association of State Highway and Transportation Officials, or American Society of Testing and Materials published procedures, or similar acceptable criteria. The Department will specify which tests are applicable, if not described in the plans, specifications, and contract documents for WPCELF loan allowability purposes. Samples for such testing must be furnished free of cost to the Department upon request.

(6) Change Orders

(a) General. In the event a determination is made by a loan recipient after a construction contract is let that changes or modifications to the original contract are necessary or would better serve the purpose of the loan recipient, the loan recipient may, at its discretion, execute such change orders pertaining to the construction that are necessary under the circumstances, as provided in the contract documents and when in accordance with state purchasing law. Change orders must not change, vary, or alter the basic purpose or effect of the project unless allowed by the Department. Changes must be technically adequate, the costs and time extensions must be necessary and reasonable, and allowable/unallowable costs must be appropriately separated.

(b) Change Order Submittals. After completion of the claims resolution and/or change order negotiation process between the loan recipient and the contractor, such changes on appropriate fully executed documents must be submitted to the Department in order to obtain a WPCELF loan eligibility/allowability determination.

All change order submittals shall include sufficient documentation for the Department's eligibility/allowability and technical review, as determined by the Department.

If any change order is submitted to the Department that is not complete and fully executed by the loan recipient, and the contractor and the engineer when appropriate, the Department may return such change order without review. However, unilateral change orders executed by the loan recipient and the engineer when appropriate, and identified as such, that are issued in accordance with the contract documents may be submitted to the Department in order to obtain a WPCELF loan eligibility/allowability determination.

The loan recipient may submit a complete and fully executed change order which has been executed conditional upon a positive WPCELF loan eligibility/allowability determination by the Department.

If possible, the allowability determination of a change order should be secured from the Department before the work is started, particularly for change orders requesting time extensions as per Rule 5.3.C.(6)(c) below. This determination may also be secured after the work is started; however, the loan recipient must bear the cost if the work is determined to be ineligible or unallowable.

When the eligible cost of a project will be significantly reduced by a change order or change orders, the Department may issue an amendment to the loan agreement decreasing the loan amount, and the loan recipient must execute such amendment within the time frame established by the Department.

(c) Time Extensions. Change orders which include time extensions and/or documentation that the loan recipient is implementing all legal remedies provided in the contract documents for failure to complete construction when required, must be submitted to the Department prior to the date of the Department's final construction observation, as specified in Rule 5.3.D.(1) of these regulations. Otherwise, construction and construction-related work which occurs after the current allowable contract completion date will be unallowable. Justification for contract time extensions included in a change order must be prepared, but need not be submitted to the Department unless the total time extensions for the contract exceed 25% of the original contract time, in which case justification for all time extensions must be submitted to the Department for an allowability determination.

Construction and construction-related work which occurs after the date representing a 25% time extension to the original contract time are allowable only to the extent determined as such by the Department, pursuant to review of the justification for all time extension change orders.

Construction and construction-related work which occurs after the date representing a 25% time extension to the original contract time, and for which a time extension change order cannot be adequately justified by the loan recipient and determined allowable by the Department, is not allowable unless the Department determines that the loan recipient is implementing all legal remedies provided in the contract documents for failure to complete construction when required.

(7) Contract Claims. The Department is not a party to any contract between the WPCELF loan recipient and the construction contractor(s), the consulting engineer(s), the attorney(s), the equipment supplier(s), the subcontractor(s) or any other parties.

Upon execution of any contract between the loan recipient and any other party in regard to a WPCELF funded project, the Department does not assume any authorities, duties, responsibilities, or liabilities under such a contract.

The Department does not have any authority, duty, responsibility, or liability in contract claims identification, negotiation, resolution, or any other actions regarding contract claims under the contract(s) between the loan recipient and any other party.

No actions taken by the Department, either directly or indirectly, in regard to the WPCELF loan funded project constitute or establish any determinations, authority, duty, responsibility, or liability under the contract(s) between the loan recipient and any other party.

The loan recipient and the contracting party must resolve all claims and contract disputes by negotiation, arbitration, litigation, or other means as provided in the contract documents and state law, prior to submission of any change order or other documents to the Department, in order to obtain a WPCELF loan eligibility/allowability determination.

(8) Contractor's Bankruptcy or Default. In the event of a contractor's bankruptcy or default, any proposed agreements with the bonding company (other than the bonding company serving as general contractor or fully bonding another contractor acting as their agent) must be submitted for WPCELF loan allowability determination by the Department prior to execution. If the loan recipient determines that re-award of the construction contract, or a portion thereof, is necessary due to contractor bankruptcy or default, such proposed re-award contracts must be submitted for WPCELF loan allowability determination by the Department prior to execution. The loan recipient will be responsible for assuring that every appropriate procedure and incidental legal requirement is observed in advertising for bids or otherwise re-awarding a construction contract if this course of action is taken.

D. Post Construction Phase

(1) Within 10 days after construction completion of each construction contract, the loan recipient must submit a determination of construction completion and must request a final construction observation by the Department.

All change orders which include time extensions and/or documentation that the loan recipient is implementing all legal remedies provided in the contract documents for failure to complete construction when required must be submitted to the Department prior to the date of the Department's final construction observation; otherwise, construction and construction-related work which occurs after the current allowable contract completion date will be unallowable.

The final construction observation may be delayed by no more than 30 days after the current construction completion date, unless further delayed by the Department pursuant to review of the loan recipient's request and justification for such delay. Should the Department staff decide that the determination of construction completion and request for final construction observation are being unreasonably delayed, a final construction observation may be immediately performed by the Department.

(2) Within 30 days after the final construction observation performed by the Department, the loan recipient must submit: the final payment request; summary change order(s), if applicable, for all construction contracts; a complete set of record drawings for any and all other new construction work requiring design by a registered engineer and, if applicable, a certification from the engineer, or other qualified personnel when applicable, that the project has been constructed substantially in accordance with the design; final construction phase services contract amendments, if any; and all other administrative forms and documents required by the loan agreement and the Department. Payment requests submitted after this date are not allowable, regardless of when the costs were incurred.

(3) Any other submittals or actions required by the loan agreement must be performed when so required and are subject to review and approval by the Department.

(4) Following receipt of the final payment request from the loan recipient, or upon expiration of the deadline established in Rule 5.3.D.(2) above, the Department or other designated parties may perform an audit of the WPCELF loan project for the purpose of determining compliance with the WPCELF loan agreement and to determine final allowable costs, payments made to date, and any additional payments due the loan recipient or repayment due the Department.

(5) Upon completion of the WPCELF audit, or if an audit is not performed, following expiration of the deadline established in Rule 5.3.D.(2) above, the Department will transmit to the loan recipient a copy of the audit, if performed, a final determination of allowable costs and payments due the loan recipient or repayments due the state, and a final loan agreement. The final determination will establish a 30-day appeal deadline, as required by Rule 5.3.D.(6) below, and will require repayment of any overpayment with an interest penalty to begin accruing on the appeal deadline. The interest penalty will be as established in Rule 5.3.E.(6) of these regulations.

(6) Within 30 days after the date of the above final determination of allowable costs, the loan recipient may submit a written appeal of the final determination including a written justification of the reason for the appeal, and supporting documentation for any disputed costs of the final determination; otherwise, the final determination of allowable costs will become the final allowable costs for purposes of WPCELF loan payments and the WPCELF loan repayment agreement.

(7) Should an appeal be submitted in accordance with Rule 5.3.D.(6)

above, the disputes procedures established in Appendix D of these regulations will be followed in order to resolve the dispute and establish the final allowable costs.

(8) If an appeal is not submitted prior to expiration of the final determination appeal period, the loan recipient must execute and submit the final loan agreement to the Department within the deadline established by the Department.

(9) Upon receipt of the executed final loan agreement from the loan recipient, the Department will transmit it to the State Tax Commission for execution and return to the Department.

(10) Upon receipt of the executed final loan agreement from the State Tax Commission, the Department will transmit a copy to the loan recipient, and repayment of the WPCELF loan will commence under the terms of the loan agreement.

E. Payments to WPCELF Loan Recipients. Payments from the WPCELF may be made to WPCELF loan recipients under the following conditions:

(1) Payments may be requested by and may be made only to loan recipients, in accordance with the WPCELF loan agreement and the loan recipient's contracts for eligible and allowable services and construction for work performed within the project scope and budget period.

(2) Excluding the payment request for the administration fee, payments may be requested no more often than on a monthly basis, except as required by state law. Payment requests cannot include costs incurred during two different state fiscal years; therefore, two payment requests may be submitted in July: one for costs incurred through June 30th and a second for costs incurred after June 30th.

(3) The loan recipient must deduct from all WPCELF payment requests the amount of funds provided or to be provided from all other state and federal agency funding sources for allowable WPCELF project costs.

(4) Payment requests must be submitted by the loan recipient to the Department and must include the following:

(a) Completed WPCELF payment request form;

(b) Cumulative invoices, which clearly identify scope, time period and the particular project or contract, for all allowable costs for which payment is requested, except that invoices need not be submitted for any administration fee included in the loan agreement; and

(c) Any other documents required by the loan agreement;

(5) The timing of WPCELF payments will be as follows, provided the loan recipient is in compliance with the requirements of these regulations and all provisions of the WPCELF loan agreement.

(a) Payment for the administration fee must be the first payment request submitted and will be paid to the appropriate Department administration fund.

(b) Payments for design and construction phase services may be requested and paid based upon incurred allowable costs. Such requested payment amounts are subject to verification by the Department.

(c) Payments for allowable construction work may be requested and paid based upon in-place work or delivered materials and equipment as specified in the construction contract(s), and as supported by invoices and verified as accurate by the consulting engineer, if applicable, and the loan recipient, less the retainage withheld by the loan recipient. Such requested payment amounts are subject to verification by the Department.

(d) Payments for allowable land may be requested and paid immediately after loan agreement execution, provided the Department has approved the purchase price and proof of the purchase price has been submitted with the payment request.

(e) The final loan payment will not be made until submission of all documents required by Rule 5.3.D.(2), enactment of the user charge ordinance as required by Rule 5.3.A.(3)(f), and determination that the loan recipient is in compliance with all other applicable provisions of the WPCELF loan agreement.

(6) Any payments made to the loan recipient, which are at any time determined by Department to be for costs not in accordance with the WPCELF loan agreement, for ineligible or unallowable costs, or for costs related to waste, fraud, abuse or illegal acts under state or federal law, must be repaid to the WPCELF fund within 30 days of such notification by the Department. Interest may be charged on such delinquent repayments after expiration of the 30-day period at a rate of ten (10) percent per annum, compounded monthly. Alternatively, the Department may withhold such amounts from subsequent payment requests.

F. WPCELF Loan Repayment Requirements. All WPCELF loan repayments are subject to the following requirements:

(1) Interest on amounts paid to the loan recipient will commence on the original construction contract completion date.

(2) The amount of interest accrued between the original construction contract completion date and the initiation of the repayment process will be added to the final allowable project costs to determine the principal amount to be repaid by the loan recipient.

(3) The repayment period will be from the time of transmittal of the final loan repayment agreement to the loan recipient to the date not later than ten (10) years after project completion, or sooner, if so requested by the loan recipient.

(4) Repayments are to be made by counties on a semi-annual basis through homestead exemption annual tax loss reimbursement with holdings, by municipalities on a monthly basis through state sales tax with holdings if adequate to provide such repayments, and by all other loan recipients through submission of monthly payments in accordance with state law, and must commence no sooner than 90 days after and no later than one year after project completion.

(5) The repayment interest rate will be established in the WPCELF loan agreement and repayment agreement, in accordance with the appropriate Notice of Funds availability.

(6) Interest will be compounded monthly.

11 Miss. Code. R. 6-5.3

Miss. Code Ann. §§ 49-17-81 through 49-17-89, 49-2-1, et seq. and 49-17-1, et seq.