Section NR 166.07 - Cost eligibility(1) ELIGIBLE COSTS. Allocable project-specific costs that are necessary and reasonable are eligible for financial assistance under this subsection. 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 and reasonable for the efficient operation or integrity of the overall water system: (a)Abandonment. Abandonment of an entire water system or portions of a water system if approved in the plans and specifications of an eligible project or by department staff, including activities such as demolition, re-landscaping, and removal and disposal of debris.(b)Access roads. Construction of roadways necessary to provide appropriate access to water system facilities such as wellhouses, storage tanks, and water treatment plants.(c)Administrative buildings and equipment. Buildings, offices, and office equipment and furnishings used for purposes of operating a water system, such as administration and storage buildings when part of the scope of the scored project and included in the approved plans and specifications or otherwise approved by department staff. The department may prorate costs for buildings, offices, and office equipment and furnishings that are partially used for purposes not related to the water system.(d)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.(e)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 products made in the United States; 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 drinking water facility or project site; audit activities related to the federal single audit act portion of the municipality's annual audit report until the project is complete.
(f)Construction activities. Activities defined in s. NR 166.03 (14) and included in construction contracts or performed by force account, including any of the following: 1. Replacing, repairing, or rehabilitating a water system if identified in the plans and specifications as cost-effective and necessary.2. Repairing or restoring items or areas damaged as a direct result of construction of the project.3. Completing punch list item activities.4. Acquiring, consuming, or expending materials.5. Obtaining products that comply with federal requirements to use products made in the United States in SDWLP projects.6. Incurring other capital costs solely for purposes of the scored project.(g)Demolition. Demolishing existing portions of a water system if the demolition is part of a scored project and at least one of any of the following applies: 1. The demolition will remove an existing building structure located in the space in which a new structure is to be constructed.2. The demolition is necessary for site preparation.3. The demolition is included in abandonment procedures as approved in the plans and specifications of the scored project or when otherwise approved by department staff.4. The demolition entails removal of equipment or materials, or both, from inside an existing water system building or other structure being modified or repurposed as part of the scored project.(h)Easements and rights-of-way. Acquiring easements and rights-of-way if acquisition is from a willing seller. Expenses related to acquisition include purchase cost and administrative and legal expenses.(i)Equipment. Equipment related to the scored project, the costs of which the department may prorate if the municipality intends to use the equipment for multiple purposes rather than solely for the water system. Eligible equipment includes any of the following: 1. Mobile equipment, such as portable stand-by generators, portable emergency pumps, and grounds and maintenance equipment for mowing and snow removal, for the water system.2. Spare parts, if included in the plans and specifications or otherwise approved by the department.3. Machinery for manufacturing or repairing necessary tools or equipment for the water system.4. 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 public water system. 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 subdivision.(j)Fees. Fees paid by the municipality for any of the following: 1. Permits obtained for construction, including building, electrical, and plumbing permits, pit or trench dewatering permits, hydrostatic test water permits, construction site storm water permits, and railroad crossing permits. Note: Permit fees are not required by the department for waterway projects authorized under ch. 30, Stats., that are funded in whole or in part by any federal or state agency. Therefore, under sub. (2) (dm), if a municipality at the time of purchase of a permit under ch 30, Stats., pays a fee for the permit due to not identifying the project as being funded with state or federal funds, the fee is not eligible for reimbursement by the SDWLP.
2. 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 water system ordinances, management plans, intermunicipal agreements, and legal work necessary for securing eligible permits.3. Service fees paid to a state or federal agency, except administrative fees paid annually along with principal and interest payments on a SDWLP loan.(k)Galvanized pipe. Removal of galvanized pipe that was or is downstream of lead pipe, a lead gooseneck, or other appurtenances containing lead if the municipality has approval from the public service commission for a lead service line replacement program or is pledging general obligation bonds to the SDWLP.(L)Groundwater monitoring. Installing groundwater monitoring equipment or facilities.(m)Insurance. Purchasing insurance necessary during construction of the project, including property, liability, builder's risk, and construction insurance.(n)Interim debt. Costs associated with interim debt for the scored project as delineated in sub. (3).(o)Laboratories. Laboratory equipment related to initial setup or a significant upgrade or expansion of an on-site laboratory if requested in the financial assistance application.(p)Land acquisition. Acquiring land, including purchase cost and administrative and legal expenses if all of the following apply: 1. The land is integral to the project, including land needed to locate a treatment facility, transmission line, storage tank, pump station, or well.2. The land is acquired from a willing seller.(q)Lead service lines. Costs for removal and replacement of private service lines that are made of lead or galvanized materials if the municipality has public service commission approval for a lead service line replacement program or is pledging general obligation bonds to the SDWLP.(r)Municipal staff, equipment, and materials. Municipal expenses incurred solely for the scored project and documented by the municipality as force account, including any of the following:1. Salary and benefits of municipal employees, except elected officials or on-staff attorneys, for time spent working directly on the scored project.2. Expendable material costs incurred by the municipality outside of a construction contract.3. Estimated costs incurred using equipment owned by the municipality.(s)Professional services. Service fees and costs of engineering, architectural, legal, and other professional services provided for the project that are not force account work, including any of the following: 1. Conducting value engineering studies or analyses during the design phase.2. Conducting system evaluations and studies, including well site investigations.3. Developing, preparing, and submitting engineering reports and plans and specifications.4. Preparing, printing, and distributing bidding documents.5. Gathering documents and information for, completing, and submitting the SDWLP financial assistance application and other forms and information required for financial assistance.6. Developing or revising an operations and maintenance manual.7. Preparing a plan of operation for the project.8. Advertising for and conducting bid lettings.9. Analyzing bids, preparing award recommendations, and preparing contracts.10. Providing construction management, observation, and inspection.11. Preparing for and facilitating public education and participation opportunities.12. Labor for services provided for the scored project, travel related to the project, and indirect costs charged as part of a contract by the service provider for their overhead, administrative, office equipment, and other similar costs not attributable specifically to the scored project.13. Preparing a user charge system, including associated attorney fees and completing and submitting application documents to the public service commission for a water rate increase and developing or updating water system related ordinances.14. Preparing environmental assessment reports and evaluations.15. Conducting archaeological surveys and gathering historical site information.16. Providing municipal advisor or bond counsel services related to loan closing or the issuance of bonds.17. Preparing a water conservation or wellhead protection plan.18. Producing record drawings.19. Updating or upgrading water system maps of the areas impacted by the scored project.20. Providing administration of activities related to the federal Davis-Bacon and Related Acts or other wage rate requirements. Note: Links to the Davis-Bacon and Related Acts can be found on the U.S. department of labor's website at https://www.dol.gov/agencies/whd/government-contracts/construction/laws. The Davis-Bacon Act is found in 40 USC 3141 et seq. with procedures and rules in 29 CFR parts 1 to 7.
21. Evaluating construction materials and equipment for compliance with applicable domestic preference requirements.22. Conducting research or energy audits for incorporation of energy and water efficiency and conservation into the planning and design of a project.(t)Project site. Construction-related work activities at the project site of a scored project, including any of the following: 1. Landscaping areas impacted by construction of the scored project.2. Reconnecting water service lines due to the rehabilitation of a water system.3. Relocating storm water or wastewater sewer pipes if necessary for construction and replacing sewer pipes with the same size or required minimum size pipe if breakage from construction occurs.4. Erecting project and water system identification signs.5. Preparing a site for construction, including surveying, staking, and grading.6. Restoring the construction site to original condition or, when necessary, upgrading the site to meet state and local requirements.7. Removing, relocating, or replacing utilities, providing temporary utilities, installing new utility equipment, or upgrading utilities, if necessary for construction of the scored project and the recipient is legally obligated to pay these costs.(u)Safety. Purchasing and installing safety equipment related to the scored project, the costs of which the department may prorate if the municipality intends to use the equipment for multiple purposes rather than solely for the water system.(v)Security. Purchasing and installing security equipment and appurtenances for the water system, including surveillance cameras, fencing, security alarms, and motion detectors, and conducting a vulnerability assessment if necessary for determining security needs, the costs of which the department may prorate if the municipality intends to use the equipment for multiple purposes rather than solely for the water system.(w)Sewers on site. Storm sewers and sanitary sewers necessary for controlling storm water runoff and wastewater on water system sites, such as at a wellhouse or water treatment plant site.(x)Special assessment fees. Financial and legal costs associated with the process of preparing and implementing special assessments, except when the tasks are performed by an on-staff attorney, when the municipality is pledging special assessments toward repayment of its SDWLP loan.(y)Staffing evaluations. Conducting an evaluation of staffing needs to determine appropriate changes to staffing levels as a result of the scored project.(z)Startup. Startup expenses for a water system incurred solely because of the scored project, including costs for any of the following: 1. Preparing a startup curriculum and training materials.2. Initial training of operating personnel on new or modified equipment, laboratory procedures, computers, controls, records management, and treatment processes.3. Obtaining expert operational assistance for adjustments to the treatment process or other significant portions of the water system.4. Implementing a maintenance management system.5. Obtaining necessary computers, upgrades, and software, the costs of which the department may prorate if the municipality intends to use the equipment for multiple purposes rather than solely for the water system.6. Attending off-site formal training programs if necessary for the initial operation of the constructed water system.7. Purchasing the first fuel fill-up for new equipment, such as generators.(zm)Street restoration. Restoring streets and rights-of-way to preconstruction condition, and repairing items damaged during construction of the scored project, such as pavement, sidewalks, sanitary sewers, and storm sewers. 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 SDWLP-eligible 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 may be due to the other funding source covering a portion of costs that would otherwise be eligible for SDWLP funding or because some of the project costs are not eligible for SDWLP funding, such as wastewater or storm water pipe costs being ineligible when the overall project purpose is to replace both watermains and sanitary sewers.
(2) INELIGIBLE COSTS. Costs for items and activities not specific to 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 water system. Ineligible items and activities include all of the following: (a)Allowances. Any contingency or allowance 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)Bonus payments. Bonus payments not legally required for completion of construction before a contractual completion date.(d)Certification. Fees for operator certification training.(dm)Chapter 30 permit fees. Chapter 30 permit fees if a municipality at the time of purchase of a permit under ch. 30, Stats., pays a fee for the permit due to not identifying the project as being funded with state or federal funds. Note: Permit fees are not required by the department for waterway projects authorized under ch. 30, Stats., that are funded in whole or in part by any federal or state agency.
(e)Conflict of interest. Costs incurred under 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 SDWLP and any of the following conditions exist: 1. The official or employee, the official's or employee's spouse, or the official's or employee's partner 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.(f)DBE noncompliance. The amount of project costs determined by the department to be appropriate for a sanction under s. NR 166.11 (4) (b) for noncompliance with DBE good faith effort requirements.(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 SDWLP, 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-SDWLP 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 up to a water system, unless the charges are based on identifiable capital improvement costs incurred by the municipality imposing the charge, proportional to the capacity to be used by the municipality hooking up, and included in a written agreement signed by both municipalities.(j)Interim debt. Interest or principal payments on interim debt paid by the municipality out of its internal funds rather than capitalized funds, unless DOA notifies the department that such payments are eligible under the particular circumstances. 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)Lab fees. Laboratory fees incurred for activities related to monitoring, except when the monitoring is project specific.(L)Late fees. Interest or late fees on payments for services provided to the municipality in relation to the scored project.(m)Leases. Costs related to leasing land or buildings.(n)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.(o)Negligence. Costs incurred due to negligence or error of a party contracted by the municipality.(p)No construction. All costs of a project if the municipality does not finance some construction costs through the SDWLP, unless the department is cooperating with another governmental funding agency to provide an affordable financing package for the project, the other agency is financing the construction costs, and the department receives acceptable documentation of the other agency's commitment.(q)Operations and maintenance. Operations and maintenance expenses as defined in s. NR 166.03 (38) and (29), respectively.(r)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.(s)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 SDWLP financial assistance unless the costs are considered ineligible under another paragraph in this subsection.(t)Outside of scope. Costs outside the scope of the scored project unless the department approves the costs as necessary and reasonable to improve the overall integrity, operation, or functionality of the water system.(u)Personal injury. Personal injury compensation or damages arising out of the project, whether determined by adjudication, arbitration, negotiation, or otherwise.(v)Post-closeout. Expenses incurred after the project completion date of the scored project.(w)Private service lines. Removal or replacement of private service lines that are not made of lead or galvanized materials.(x)Sewer pipes. Storm sewer or wastewater sewer pipe construction, replacement, or repair, unless the work is necessary as a direct result of work performed for a scored project, such as moving a wastewater pipe to allow appropriate distance between it and a watermain being constructed or repairing or replacing a sewer pipe damaged during construction of the scored project.(xm)Site acquisition. Site acquisition expenses other than those meeting the criteria established under sub. (1) (h) and (p).(y)Source water protection. Land acquisition or easement costs incurred for land used for source water protection.(ym)Special districts. Costs of establishing special purpose districts or commissions, such as sanitary districts, utility districts, public inland lake protection and rehabilitation districts, joint local water authorities created under s. 66.0823, Stats., municipal water districts, and joint commissions.(z)Violation penalties. Fines and penalties due to violations of, or failure to comply with, federal, state, or local laws.(zm)Warranty inspections after construction completion. Costs related to post-construction warranty inspections, including costs of a consulting engineer or a third-party inspector, and costs of extended warranties or service contracts that go beyond construction completion.(3) LIMITATION ON ELIGIBILITY OF INTERIM DEBT COSTS. (a)Net interest expense. Interim debt interest expenses shall be offset with any interest earnings from the investment of the proceeds from the interim debt to determine the amount eligible for SDWLP financial assistance.(b)Interim debt issuance costs. The amount of interim debt issuance costs eligible for financial assistance is limited to $15,000 plus 0.5 percent of the total eligible face amount of the interim debt. If interim debt is rolled over or renewed, the face amount may not be counted multiple times in calculating the eligible face amount of interim debt for purposes of this limit.(c)Interim debt interest costs. The period of time for which interest on interim debt is eligible for financial assistance shall run from no earlier than 18 months prior to the start of construction to the earliest of the following: 1. The date of the first disbursement of the financial assistance.2. One year following substantial completion of the project.(d)Cost proration. If the term of the interim debt exceeds the limit in par. (c), the interim debt costs shall be prorated using the length of the eligible term divided by the total time that the interim debt is outstanding. If the interim debt is not exclusively for the SDWLP scored project, costs shall be prorated according to the proportion of the total debt that is for the scored project.(e)Maximum principal. The amount of interim debt principal that may be refinanced with SDWLP financial assistance may not exceed the total amount of the interim debt that was spent on eligible project costs.Wis. Admin. Code Department of Natural Resources NR 166.07
CR 06-023: cr. Register May 2007 No. 617, eff. 6-1-07; CR 13-022: am. (1) (a) 3. Register March 2014 No. 699, eff. 4-1-14.Amended by, CR 14-044: cr. Register June 2015 No. 714, eff. 7-1-15; correction in (1) (w) 7. made under s. 35.17Register June 2015 No. 714, eff.7/1/2015.Adopted by, CR 22-068: cr. Register October 2023 No. 814, eff. 11/1/2023