NEW YORK STATE DRINKING WATER STATE REVOLVING FUND
(Statutory Authority: Public Health Law, sections 1161 and 1162)
53.1 Purpose, scope and applicability
53.3 Pre-application procedure
53.4 Priority ranking system scoring criteria
53.5 Priority ranking and intended use plan
53.6 General project requirements
Section 53.1 Purpose, scope and applicability.
(a) The purpose of this Part is to provide rules and procedures for the New York State Department of Health to provide financial assistance to public water systems from the New York State Drinking Water State Revolving Fund created by Chapter 413 of the Laws of 1996 of the State of New York. This is a cooperative program in conjunction with the New York State Environmental Facilities Corporation. That agency's regulations can be found in 21 NYCRR, Part 2604.
(b) This Part applies to all public water systems in New York State seeking or receiving financing from the Fund and to the activities of the Department in the discharge of its duties related to the Fund.
(a) Terms used in this Part or to be used in complying with this Part have the following meanings:
(1) Act means Title XIV of the Public Health Service Act (commonly known as the "Safe Drinking Water Act") 42 USC section 300-f et. seq.
(2) Administrator means the administrator of the United States Environmental Protection Agency or the chief executive officer of such agency or any successor agency or department or any authorized representatives of the administrator.
(3) Allowable costs means all costs of a project which the Department and/or Corporation determines:
(i) are properly allocable to that project; and
(ii) are not annual facility operation costs, including, but not limited to, those for maintenance, or replacement and repair of minor equipment.
(4) Annual fund resources means the funds available for project assistance within an annual funding cycle.
(5) Annual funding cycle means the period of time covered by a single Intended Use Plan.
(6) Commissioner means the Commissioner of the New York State Department of Health.
(7) Comptroller means the Comptroller of New York State.
(8) Construction means the erection, building, acquisition, alteration, reconstruction, improvement, enlargement or extension of a project; the inspection and supervision thereof; and the engineering, architectural, legal, fiscal, and economic investigations and studies, surveys, designs, plans, working drawings, specifications, procedures, and other actions necessary thereto.
(9) CT disinfection means the product of the free residual disinfectant concentration (C) in milligrams per liter determined before or at the first customer, and corresponding disinfectant contact time (T) in minutes, expressed by the formula (C) x (T) = CT.
(10) Corporation means the New York State Environmental Facilities Corporation or its successor.
(11) Department means the New York State Department of Health.
(12) Design means necessary design calculations and decisions and the preparation of construction drawings and specifications.
(13) Disadvantaged system means a public water system which has been qualified by the Corporation as being eligible for financial hardship assistance.
(14) DWSRF or fund means the New York State Drinking Water State Revolving Fund, established pursuant to Chapter 413 of the Laws of 1996.
(15) DWSRF assistance or fund assistance means financial assistance from the DWSRF, or other available sources, provided by the corporation to a recipient for an eligible project, including, without limitation, loans or hardship assistance.
(16) E. coli means Escherichia coli, a species of coliform bacteria that is indicative of fecal pollution and the possible presence of enteric pathogens.
(17) Eligible project means a project for construction of a water supply facility which is intended to improve drinking water facilities, including a project that would be eligible for financing under or designed to comply with the requirements of the Act, which the Commissioner has certified, in writing:
(i) is necessary for the objectives and goals of the State Sanitary Code or the Act to assure safe public drinking water;
(ii) represents a reasonable effort to develop a viable water supply that can consistently meet drinking water standards;
(iii) takes into consideration the water resources management strategy pursuant to Title 29 of Article 15 of the Environmental Conservation Law; and
(iv) is a project for which financial assistance is available from the Fund.
(18) Emergency means a situation that results in an imminent threat to public health. Imminent threats to public health include situations that result in the unavailability of a source of potable drinking water for an extended period of time.
(19) Engineering report means the document or documents incorporating the results of preliminary project planning and technical and fiscal studies to determine the technical and economic feasibility of the project.
(20) Federal capitalization funds are funds deposited in the DWSRF pursuant to a Federal capitalization grant according to the provisions of the Act or any lesser amount which the administrator shall determine is subject to the limitations imposed by the Act.
(21) Hardship assistance or financial hardship assistance means DWSRF assistance, including, without limitation, an additional reduced interest rate loan, a principal subsidy, and/or State assistance payments, provided by the Corporation to a recipient in those instances where the Corporation, in its discretion, determines financial hardship exists.
(22) HUD means the United States Department of Housing and Urban Development.
(23) Intended Use Plan (IUP) means a plan identifying the intended uses of the amounts available in the Fund, including but not limited to: a list of potentially eligible projects; a description of the short-term and long-term goals and objectives of the Fund; and information on the activities to be supported including a description of project categories, terms of Fund assistance, recipients, and the criteria and methods established for the distribution of funds.
(24) Median Household Income (MHI) means the MHI published by the U .S .Department of Commerce, Bureau of the Census, as adjusted to the most recent biennium for which income data is available from the Bureau of the Census. For special districts and other areas for which accurate census data is not available, other income data may be considered by the Corporation.
(25) Maximum Contaminant Level (MCL) means the maximum permissible level of a contaminant in water which is delivered to any user of a public water system as specified in Subpart 5-1 of this Title.
(26) Nephelometric Turbidity Unit (NTU) means the unit in which measured turbidity is reported.
(27) Planning means the orderly development of a project concept from the original statement of need or purpose through the evaluation of alternatives to a final recommendation on a course of action and measures to implement the selected alternative.
(28) Principal Organic Contaminant (POC) means any organic chemical compound belonging to specific chemical classes as described in Subpart 5-1 of this Title.
(29) Project Financing and Loan Agreement (PFLA) means an agreement, or agreements, between the Corporation and one or more recipients with respect to the financing of an eligible project or projects.
(30) Project plans and specifications means any technical data, information, designs, plans, analyses, engineering reports or other material required to be submitted by an applicant for approval by the Department prior to installation or construction of a public water system or any addition or deletion or modification of a public water system.
(31) Public water system means any water system as defined in Section 5-1.1 of this Title.
(32) Segment of a project, project component or project phase means one or more construction contracts and associated costs that the Department and Corporation determine constitute a discrete portion of a project which may be financed and constructed separately from other project segments.
(33) State Act means Chapter 413 of the Laws of 1996 of the State of New York.
(34) State Sanitary Code means Parts 1 through 24 of this Title.
(35) Surface Water Treatment Rule means Parts 141 and 142 of Title 40 of the Code of Federal Regulations which require that all surface water be treated in accordance with Section 5-1.30 of the State Sanitary Code.
(36) Unspecified Organic Contaminant (UOC) means any organic chemical compound not otherwise specified in Subpart 5-1 of this Title.
53.3 Pre-application procedure.
(a) Prospective applicants seeking financial assistance from the Fund must first submit a pre-application to the Department in the format required by the Department. Information required for the pre-application includes:
(1) a written request from an individual with sufficient authority to act on behalf of the applicant that the project be listed in the Intended Use Plan;
(2) a description of the project, including a discussion of the existing deficiencies of the public water system and the corrective effect the proposed project will have on that system's drinking water quality;
(3) a project schedule and project cost estimate; and
(4) such other information and material as the pre-applicant deems necessary for the Department to determine a project's eligibility for assistance from the Fund.
(b) An applicant will receive written notification from the Department if it fails to submit sufficient information for the Department to process the pre-application. The Department will identify any such deficiency and the applicant may submit supplemental material to complete the pre-application.
(c) A project may not be eligible for Fund assistance in a given annual funding cycle if the applicant has failed to complete its pre-application within the time prescribed by the Department.
53.4 Priority ranking system scoring criteria.
(a) The total numerical score for the project or project segment being scored shall be the sum of the scores for technical and non-technical criteria as well as any additional points awarded pursuant to subdivision (d) of this section.
(1) The technical criteria are:
(i) MCL/Treatment technique violations;
(ii) other sanitary code violations; and
(iii) system reliability and dependability issues.
(2) The non-technical criteria are:
(i) governmental needs; and
(ii) financial needs.
(b) Eligible projects or project segments shall be scored on the basis of the following:
(3) Tie Breaking In the event of a tie score for projects, the higher total score under Technical Factors (paragraph 1) will be used as a tie breaker. If this still results in a tie score, the size of the population served by the system will be used as a tie breaker. The larger population will be given preference.
(c) The Department has the sole authority to determine the existence of an emergency. Projects designed to address emergencies shall receive the highest priority ranking.
(d) Additional points may be awarded to an eligible project in the following manner:
(1) A phased project for which additional Fund assistance has been conditionally committed in an executed Project Financing and Loan Agreement for long-term financing will be assigned 2,000 points in addition to its total project priority ranking system score.
(2) A project for which additional Fund assistance has been conditionally committed in an executed Project Financing and Loan Agreement for short-term financing will be assigned 1,000 points in addition to its total project priority ranking system score.
53.5 Priority ranking and Intended Use Plan.
(a) All completed pre-applications received by the Department will be evaluated and assigned a score based on the priority ranking scoring system described in section 53.4 of this Part, provided, however, that:
(1) the Department will not assign a score to any project it has determined to be ineligible for assistance; and
(2) after review of a pre-application the Department may determine that one or more proposed project components are not essential to addressing critical public water system deficiencies. In that event, the Department will sever any non-essential components from the essential project component and score them as separate projects.
(b) Projects receiving scores will additionally be assigned to one of three categories:
(1) Category A: Public water systems serving a population of ten thousand (10,000) or fewer.
(2) Category B: Public water systems serving a population exceeding ten thousand (10,000).
(3) Category C: Public water systems which have been qualified by the Corporation for financial hardship assistance.
(c) The Department shall prepare annually an Intended Use Plan that describes how the Department and the Corporation intend to allocate Fund resources available for that annual funding cycle. The Intended Use Plan will list all potentially eligible projects for assistance from the Fund. A project must be listed in an Intended Use Plan to be eligible for Fund assistance. The Intended Use Plan will also include the following:
(1) Multi-Year List: The Multi-Year List shall include all proposed projects which have been reviewed by the Department and received a numerical score pursuant to subdivision (a) of this section. New projects may be added to this list on a continuous basis.
(2) Project Readiness List: The Project Readiness List shall include all projects from the Multi-Year List which the Department has determined are sufficiently developed to proceed with long-term Fund assistance during the funding cycle covered by the Intended Use Plan. Applicants for these projects are expected to make applications for Fund assistance to the Corporation during that annual funding cycle. Projects shall be listed in descending order of their priority ranking system score.
(3) Funding List: The Funding List shall include all projects from the Project Readiness List and all projects from the Hardship List expected to qualify for long-term loans within the annual funding cycle covered by the Intended Use Plan.
(4) Hardship List: Upon written confirmation from the Corporation that a project qualifies for financial hardship assistance, that project will be placed on the Hardship List. Such written confirmation shall remain valid for two consecutive annual funding cycles. If a project has not received funding during this period, it shall be removed from the Hardship List and re-listed on the Multi-Year List unless the project receives another written confirmation from the Corporation that the project qualifies for financial hardship.
(d) The Department and the Corporation will annually publish a Draft Intended Use Plan which contains the Department's initial plan for the allocation of annual Fund resources and the project priority ranking system scores of each eligible project. The Department will specify a period for review and comment after the publication of the Draft Intended Use Plan during which the public may submit written comments directly to the Department or provide oral statements at public hearings held jointly by the Department and the Corporation. Notice of the hearings and availability of the Draft Intended Use Plan will be published in the State Register. Project applicants may use this opportunity to address any concerns they have regarding project scores and advance any reasonable arguments in support of having their respective scores adjusted. Such plan may, after a public comment period, be amended After the close of the comment and review period the Department will issue the Intended Use Plan.
(e) The Department shall develop the Intended Use Plan subject to the following requirements:
(1) A minimum of fifteen percent (15%) of the annual federal capitalization funds credited to the Fund in any fixed year, shall be allocated to public water systems serving populations of ten thousand
(10,000) or fewer. The actual Fund assistance rendered to such systems will occur to the extent there are sufficient allowable project costs to finance in a given annual funding cycle.
(2) No more than thirty percent (30%) of the annual federal capitalization funds shall be used to give loan subsidies to disadvantaged systems as determined by the Corporation.
(3) No more than fifty percent (50%) of Fund resources shall be received annually by a particular applicant. In addition, the Corporation may, on its own initiative or at the direction of the Department, limit Fund assistance to the demonstrated annual cash flow needs of any single applicant.
(f) Projects shall be selected for placement on the Funding List in the following manner:
(1) Any Category C project which receives a score greater than or equal to the project with the lowest score (excluding additional points awarded pursuant to section 53.4 of this Part) receiving Fund assistance in the annual funding cycle in which the Category C project received its current financial hardship qualification shall be placed on the Funding List.
(2) Category A projects from the Project Readiness List shall be selected in priority order and placed on the Funding List until fifteen percent (15%) of funds available for the period covered by the IUP have been allocated.
(3) All remaining projects on the Project Readiness List shall be selected in priority order and placed on the Funding List until all remaining annual Fund resources have been encumbered. Final project funding selection is subject to the restrictions and project by-pass criteria in subparagraph (g) of this section.
(g) Projects on the Project Readiness List may be by-passed, upon written notice to the applicant from the Department or the Corporation, if any of the following occurs:
(1) the Department or Corporation receives written notice from the applicant that the project is withdrawn;
(2) the applicant fails to fulfill expectations, perform duties, or conform to deadlines or conditions established in the project schedule; or
(3) the applicant has reached the fifty percent (50%) annual Fund resources cap for fundable projects on the Project Readiness List. All projects of an applicant that would cause the applicant to exceed the fifty percent cap will be by-passed for that annual funding cycle.
(h) Projects must be placed on the Multi-Year List to be eligible for any available short-term loans made by the Fund. Short-term loan availability shall be limited to those projects listed on the Multi-Year List which have a numerical project priority ranking score greater than or equal to the project with the lowest score (excluding points awarded pursuant to section 53.4 of this Part) on the funding list.
53.6 General project requirements.
(a) Each recipient shall ensure that any project for which it receives assistance from the Fund:
(1) achieves or maintains compliance with the requirements of Part 5 of this Title;
(2) employs sound and appropriate management practices; and
(3) otherwise complies with all applicable requirements of the Act, the State Act, this Part, the Project Financing and Loan Agreement and all instructions issued by the Department and the Corporation.
(b) The Department and the Corporation may conduct such reviews, inspections and investigations as each may determine necessary to ensure project compliance pursuant to subdivision (a) of this section.
(c) The Department or the Corporation may permit a recipient to certify in writing that specified project requirements have been fulfilled where the recipient can show that such certifications are permitted by State laws and regulations. Acceptance by the Department or the Corporation of such a certification shall not constitute a conclusive statement by either that such certification is accurate nor shall any such acceptance preclude the Department or the Corporation from conducting inspection and verification of the recipient's compliance with project requirements.
(d) All contracts between the recipient and parties carrying out construction and other Fund assisted activities shall provide that representatives of the Department, the Office of the State Comptroller, and the Corporation shall have access to the project worksite at any stage of preparation or progress and shall permit extracts and copies of project records to be made by them.
(e) All change orders shall be submitted to the Department within thirty (30) days following the date they are ordered. Any proposed change which deviates from the approved project plans and specifications for any treatment process shall require prior approval by the Department. The Department will notify the Corporation of any approved change orders at the same time it notifies the recipient.
(f) Each recipient shall arrange for inspection of project construction under the direction of a professional engineer licensed in New York State who shall be responsible for determining whether such work has been performed in accordance with the approved project plans and specifications. Following project completion, the professional engineer shall certify to the recipient, the Department, and the Corporation that the construction is in accordance with the approved project plans and specifications and any approved amendments thereto.
(g) The recipient shall have or acquire such title, estate or interest in the site of the project, including, without limitation, necessary easements and rights-of-way, to ensure undisturbed use and possession during construction of the project and for the estimated operational life thereof.
(h) A recipient shall take any appropriate corrective action necessary to bring its project into compliance with the project performance standards contained in the approved engineering report for the project. A recipient may receive Fund assistance, to the extent such assistance is available, for corrective action where such action is not required due to fraud, mismanagement or failure to comply with the requirements set forth in the Project Financing and Loan Agreement.
(a) If the Department or the Corporation determines that the project or the recipient is not in compliance with the terms of the Project Financing and Loan Agreement, and, following written notice to the recipient, the project is not brought into compliance, the Corporation may, on its own or at the Department's direction, refuse to approve Fund disbursement requests until the project is brought into compliance.
(b) Nothing in this section shall be construed to limit the rights of the Department or the Corporation to take actions including, but not limited to, administrative enforcement actions and actions for breach of contract against a recipient which fails to carry out its obligations under this Part or the Project Financing and Loan Agreement.
53.8 Severability. If any provisions of this Part or the application thereof to any person or circumstance is adjudged invalid by a court of competent jurisdiction, such judgment shall not affect or impair the validity of the other provisions of this Part or the application thereof to other persons and circumstances.
Send questions or comments to:
Revised: August 1999