Wis. Admin. Code Department of Natural Resources NR 162.23

Current through November 25, 2024

Section NR 162.23 - Cost eligibility

(1) ELIGIBLE COSTS.

(a)Eligible at a subsidized rate. Allocable project-specific costs that are necessary and reasonable are eligible for financial assistance. Eligible costs include expenses incurred by the municipality for any of the following items and activities when specific to the scope of a scored project, or when approved by the department as necessary or reasonable for the efficient operation or integrity of the storm water treatment works or BMP:

1. `Abandonment.' Abandonment of storm water treatment works or BMPs if approved in the plans and specifications of a scored project or by department staff, including activities such as demolition, re-landscaping, and removal and disposal of municipal waste or other debris.

2. `Access roads.' Construction of roadways necessary to provide appropriate access to urban runoff facilities or BMPs.

3. `Acquisition of facilities.' Costs associated with acquiring facilities of an existing storm water treatment works or BMP if the municipality will own, operate, and maintain the facilities throughout the term of the financial assistance agreement.

4. `Administrative costs of a commission.' Administrative, legal, and other costs incurred by a commission solely for the scored project if identifiable in a contract or agreement between the member municipalities.

5. `Compliance with state and federal requirements.' Costs incurred for activities associated with complying with state and federal requirements related to the scored project.

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

6. `Construction activities.' Activities defined in s. NR 162.003 (16) and included in construction contracts or performed as force account work, including any of the following:

a. Replacing, repairing, or rehabilitating a storm water treatment works or BMP if identified in the plans and specifications as cost-effective and necessary.

b. Restoring streets and rights-of-way and repairing damage to items such as pavement, sidewalks, and watermains necessary as a result of construction of the scored project.

c. Punch list item activities.

d. Acquiring, consuming, or expending materials.

e. Obtaining products that comply with federal requirements to use American-made products in CWFP projects.

f. Other capital costs incurred solely for purposes of the scored project.

7. `Demolition.' Demolishing existing structures if the demolition is part of a scored project and any of the following apply:

a. The existing structure is part of the storm water treatment works.

b. The existing structure is part of a BMP project.

c. The demolition is necessary for site preparation.

d. The demolition is included in abandonment procedures as approved in the plans and specifications of the scored project or otherwise approved by department staff.

e. The demolition entails removal of equipment or materials, or both, from inside an existing building or other structure that is part of the treatment works being modified or repurposed as part of the scored project.

8. `Discharge monitoring.' The cost of equipment owned or to be owned by the municipality for illicit discharge monitoring of a storm water treatment works or BMP.

9. `Easements and rights-of-way.' Acquisition of easements and rights-of-way, including purchase cost, and administrative and legal expenses.

10. `Equipment.' Equipment, the costs of which the department may prorate if the municipality intends to use these items for multiple purposes rather than solely for the storm water treatment works or BMP. Eligible equipment includes any of the following:

a. Mobile equipment, such as portable stand-by generators, portable emergency pumps, and grounds and maintenance equipment for mowing and snow removal, for the storm water treatment works or BMP.

b. Spare parts, if included in the plans and specifications or otherwise approved by the department.

c. Machinery for manufacturing or repairing necessary tools or equipment for the storm water treatment works or BMP.

d. Computers, tablets, and related equipment, including purchasing, installing, programming, or upgrading computers, printers, control systems, and other computer-related equipment necessary for operating and maintaining the storm water treatment works or BMP. Equipment and systems for accounting, billing, public notification, testing, monitoring, reporting, emergency alerts, communications, geographic information, and supervisory control and data acquisition are included under this subd. 10. d.

11. `Fees.' Fees paid by the municipality for any of the following:

a. Permits obtained for construction, including building, electrical, and plumbing permits, construction site storm water permits, and railroad crossing permits.

b. Legal fees of an attorney that is not an on-staff municipal attorney, including costs of legal reviews of architectural, engineering, or construction contracts, user charge systems and sewer use ordinances, management plans, intermunicipal agreements, and legal work necessary for securing eligible permits.

c. Service fees paid to a state or federal agency, except administrative fees paid annually along with principal and interest payments on a CWFP loan.

12. `Groundwater monitoring.' Installing groundwater monitoring equipment or facilities.

13. `Insurance.' Purchasing insurance necessary during construction of the scored project, including property, liability, builder's risk, and construction insurance.

14. `Interim debt.' Costs associated with interim debt for the scored project as delineated in s. NR 162.04 (3).

15. `Land Acquisition.' Acquiring land, including purchase cost and administrative and legal expenses if any of the following applies:

a. The land is property on which the storm water treatment works or BMP will be located, including urban corridors needed to support integrated systems of a storm water treatment works or BMP for urban runoff.

b. The land is the property on which individual systems are or will be located if the systems are publicly-owned and maintained.

16. `Management plans.' Developing a detailed management plan for a scored project.

17. `Municipal staff, equipment, and materials.' Municipal expenses incurred solely for the scored project and documented by the municipality as force account work, including any of the following:

a. Salary and benefits of municipal employees, except elected officials or on-staff attorneys, for time spent working directly on the scored project.

b. Expendable material costs incurred by the municipality.

c. Estimated costs incurred using equipment owned by the municipality.

18. `Pretreatment or toxicity reduction.' Developing a municipal pretreatment or toxicity reduction program and constructing facilities to be used by the storm water treatment works or BMP in the program, including monitoring equipment.

19. `Professional services.' Engineering, architectural, legal, and other professional services and fees, including any of the following:

a. Conducting value engineering studies or analyses during the design phase.

b. Conducting system evaluations and studies.

c. Developing facilities plans and engineering reports.

d. Preparing and submitting plans and specifications.

e. Preparing, printing, and distributing bidding documents.

f. Gathering documents and information for, and completing, the CWFP financial assistance application, and other forms required for financial assistance.

g. Developing or revising an operations and maintenance manual.

h. Advertising for and conducting bid lettings.

i. Analyzing bids, preparing award recommendations, and preparing contracts.

j. Providing construction management, observation, and inspection.

k. Preparing for and facilitating public education and participation opportunities.

L. Travel, indirect costs, and labor included in contracts for services related to the scored project.

m. Preparing a user charge system or an ordinance related to storm water management.

n. Preparing environmental assessment reports and evaluations.

o. Conducting archaeological surveys and gathering historical site information.

p. Providing municipal advisor or bond counsel services related to loan closing or the issuance of bonds.

q. Producing record drawings.

r. Updating or upgrading storm water treatment works maps of the areas impacted by the scored project.

s. Monitoring use of American-made products.

t. Providing administration of activities related to Davis-Bacon and related acts or other wage requirements.

u. Conducting research or energy audits for incorporation of energy and water efficiency and conservation into the planning and design of a project.

20. `Project site.' Construction-related work activities at the project site of a scored project, including any of the following:

a. Landscaping areas impacted by construction of the scored project.

b. Relocating sanitary sewers or watermains if necessary for construction and replacing mains with the same size or required minimum size pipe if breakage from construction occurs.

c. Erecting project and storm water treatment works or BMP identification signs.

d. Preparing a site for construction, including surveying, staking, and grading.

e. Restoring the construction site to original condition or upgrading the site to meet state and local requirements.

f. Removing, relocating, or replacing utilities, providing temporary utilities, installing new utility equipment, or upgrading utilities, if the recipient is legally obligated to pay these costs.

21. `Safety.' Purchasing and installing safety equipment to be used in the operation and maintenance of the storm water treatment works or BMP.

22. `Storm sewers that lead to treatment.' Evaluation, new installation, replacement, and lining and other rehabilitation of storm water conveyance that leads to treatment.

23. `Security.' Purchasing and installing security equipment for the treatment works or BMP, including surveillance cameras, fencing, security alarms, and motion detectors, and conducting a vulnerability assessment if necessary for determining security needs.

24. `Special assessment fees.' Financial and legal costs associated with the process of preparing and implementing special assessments when the municipality is pledging special assessments as part of repayment of its CWFP loan.

25. `Startup.' Startup expenses for a storm water treatment works or BMP incurred solely because of the scored project, including costs for any of the following:

a. Preparing a startup curriculum and training materials.

b. Initial training of operating personnel related to the scored project.

c. Implementing a maintenance management system.

d. Purchasing the first fuel fill-up for new equipment, such as generators.

26. `Storm sewers and other conveyance.' Storm water conveyance that carries storm water runoff to an eligible treatment device or facility.

27. `Street restoration.' Restoring streets and rights-of-way, and repairing damage to items such as pavement, sidewalks, and sanitary sewers necessary as a result of construction of the scored project. Eligibility of costs may be prorated based on participation by one or more other funding sources, or on the percent of the project attributable to CWFP-eligible or project-specific activities.

Note: Other funding sources that tend to participate in the types of projects that involve street restoration include the department of transportation, the community development block grant program, and the U.S. department of agriculture rural development community programs. Proration of costs can be due to the other funding source covering a portion of costs that would otherwise be eligible for CWFP funding or because some of the project costs are not eligible.

28. `Watermains.' Relocating watermains if necessary for construction, and replacing watermains of the same size or required minimum size if breakage due to construction of a scored project occurs.

(b)Eligible at market rate. Costs eligible for market interest rate financing of a scored project include any of the following:

1. The cost for the flow from state and federal facilities if the flow from these facilities exceeds 5 percent of the total flow to a storm water treatment works or BMP.

2. The cost of any portion of a project to correct violations of effluent limitations contained in a permit issued under ch. 283, Stats., or violations of performance standards.

3. The cost for any portion of a project designed solely for flood control and not required to meet WPDES storm water permit requirements or performance standards.

4. The cost for any portion of a storm water project that exclusively serves development not in existence as of the date of the application. These costs are eligible for funding only if the project furthers the local comprehensive planning goals identified in s. 1.13 (2), Stats., and, beginning January 1, 2010, is consistent with a comprehensive plan prepared pursuant to s. 66.1001, Stats.

5. The amount of project costs determined appropriate for a sanction under s. NR 162.08 (4) (b) for noncompliance with DBE good faith effort requirements established in s. NR 162.08 (4) (a).

(c)Market rate cost calculation.

1. The amount of the costs described in par. (b) 1. to 4. is determined using a parallel cost percentage that is calculated as follows:

a. Determine the total design capacity based on total flows and loadings.

b. Calculate a reduced capacity condition by subtracting the flows and loadings associated with par. (b) 1. to 4. from the total design capacity.

c. Estimate the eligible project costs associated with each of the conditions in subd. 1. a. and b.

d. Divide the cost of the reduced capacity condition by the costs of the total design capacity.

PC = RC/DC

Where:

PC . . . is the parallel cost percentage expressed as a decimal.

RC . . . is the cost associated with the reduced capacity condition.

DC . . . is the cost associated with the total design capacity.

2. The amount of market rate project costs in par. (b) 1. to 4. is calculated as follows:

EM = (TP)(1-PC)

Where:

EM . . . is the amount of project costs eligible for market rate financing only.

TP . . . is the total project cost eligible for CWFP financing.

PC . . . is the parallel cost percentage expressed as a decimal.

3. If the department determines that the project includes other market rate costs as described in par. (b) 5., the amount of those costs shall be subtracted from the amount eligible for below-market rate financing and added to the amount of market rate costs calculated in subd. 2.

Note: All questions relating to cost eligibility or allocation shall be resolved prior to the execution of the financial assistance agreement in accordance with s. NR 162.15.

(2) INELIGIBLE COSTS. Costs for items and activities not directly associated with or not necessary for the construction or startup of a scored project are not eligible for financial assistance unless specifically approved by the department as necessary and reasonable for the efficient operation or integrity of the overall storm water treatment works or BMP. Ineligible items and activities include all of the following:

(a)Allowances. Any allowance or contingency amounts built into a bid contract for nonspecific or ineligible items or activities.

(b)Basin planning. Basin or areawide planning not related to the scored project.

(c)BCPL ineligibles. For a project receiving interest rate subsidy under subch. IV, project costs determined to be ineligible for loan assistance from the BCPL.

(d)Bonus payments. Bonus payments not legally required for completion of construction before a contractual completion date.

(e)Buying capacity. Purchase cost of buying capacity in an existing storm water treatment works or BMP that is not being expanded.

(f)Conflict of interest. Costs incurred in a contract that creates a real or apparent conflict of interest. An apparent conflict of interest arises when an official or employee of a recipient participates in the selection, award, or administration of a contract supported by the CWFP and any of the following conditions exist:

1. The official or employee or the official's or employee's spouse has an ownership interest in the firm selected for the contract.

2. Any person identified in subd. 1. receives any contract, gratuity, or favor from the award of the contract.

(g)Engineering. Engineering costs relatable to ineligible construction costs when the ineligible construction and equipment costs are more than 10 percent of total construction and equipment costs.

(h)Grant administration. Any costs for administering or applying for funding from sources other than the CWFP, such as U.S. department of agriculture's rural development programs, a community development block grant program, federal state and tribal assistance grants, U.S. army corps of engineers, focus on energy, or other non-CWFP federal or state government loan or grant programs, or other types of financial assistance programs.

(i)Hookup charges. Hookup charges imposed by one municipality on another for hooking into a storm water treatment works or BMP, or transport system to such a facility, unless the charges are based on identifiable capital improvement costs incurred by the municipality imposing the charge, and are included in an intermunicipal agreement meeting the requirements of s. NR 162.05 (4) (h).

(j)Interim financing. Interest or principal payments on interim debt paid by the municipality out of its internal funds rather than capitalized funds.

Note: The ineligibility of interest or principal payments in par. (j) is based on U.S. treasury reimbursement regulations 26 CFR 1.150-2.

(k)Late fees. Interest or late fees charged to a municipality for delayed payments related to the project.

(L)Leases. Costs related to leasing land.

(m)Mismanagement and litigation. Costs of claims against the recipient resulting from mismanagement or caused by the recipient's vicarious liability for the improper action of others, and costs resulting from litigation of contract disputes, liquidated damages, appeals, and other related disputes.

(n)Negligence. Costs incurred due to negligence or error of a party contracted by the municipality.

(o)No construction. All costs of a project if the municipality does not finance some construction costs through the CWFP, unless another governmental agency or another program in the department is providing financing for the construction costs and department CWFP staff receive acceptable documentation of the other agency's or other program's commitment.

(p)Operations and maintenance. Operations and maintenance expenses as defined in s. NR 162.003 (50) and (40), respectively.

(q)Ordinary municipal operating expenses. Ordinary operating expenses of a municipality, such as salaries and expenses of elected officials and on-staff attorneys, postage, utility bills, and annual financial audits.

(r)Other funding. Costs for which payment has been or will be received from another funding source, including costs for which funds from the U.S. department of agriculture's rural development program or a community development block grant program are committed, or costs covered by a focus on energy grant. If the municipality does not receive the funds expected from the other source, the department may consider the costs of the work that was to be funded through the other source to be eligible for CWFP financial assistance unless the costs are considered ineligible under another paragraph in this subsection. This paragraph does not apply to a municipality receiving a loan from the BCPL for a scored project receiving interest subsidy under subch. IV.

(s)Outside of scope. Costs outside the scope of the scored project unless the department approves the costs as necessary to improve the overall integrity, operation, or functionality of the storm water treatment works or BMP.

(t)Personal injury. Personal injury compensation or damages arising out of the project, whether determined by adjudication, arbitration, negotiation, or otherwise.

(u)Post-closeout. Costs incurred after the project completion date of the scored project.

(v)Special districts. Costs of establishing special purpose districts or commissions, such as sanitary districts, utility districts, and joint commissions.

(w)Violation penalties. Fines and penalties due to violations of, or failure to comply with, federal, state, or local laws.

(x)Watermains. Watermain construction, replacement, or repair unless the watermain is needed to carry water to a part of the storm water treatment works or BMP or the watermain work is necessary as a direct result of work performed for a scored project, such as repairing or replacing a watermain damaged during construction of the scored project.

(y)WPDES permit fees. The cost of a WPDES permit unless it is a WPDES construction site permit specific to the project construction.

Wis. Admin. Code Department of Natural Resources NR 162.23

Adopted by, CR 14-043: cr. Register June 2015 No. 714, eff.7/1/2015.

Adopted by, CR 22-045: cr. Register October 2023 No. 814, eff. 11-1-23; correction in (1) (a) 10. d., (c) 1. c. made under s. 35.17, Stats., Register October 2023 No. 814, eff. 11/1/2023

Amended by, correction in (2) (j) (Note) made under s. 13.92 (4) (b), Stats., Register November 2023 No. 815, eff. 12/1/2023