(1)
General Requirements.
(A) The department may
make direct loans to public water systems by purchasing the general obligation
bonds, revenue bonds, short-term notes, or other acceptable obligation of any
qualified recipient for the planning, design or construction, or any
combination of these, of an eligible project.
(B) In addition to the requirements of this
rule, the department may require the recipient to include those assurances and
clauses in the loan agreements and bond resolutions as deemed necessary to
protect the interest of the state and comply with applicable state and federal
requirements.
(C) If at any time
during the term of the loan a recipient desires to sell, lease, mortgage or
otherwise dispose of the infrastructure financed under this rule, the loan
becomes due and payable upon transfer unless otherwise approved by the
department.
(D) This rule sets out
the general format for loans from state funds. The department shall have the
authority to make specific refinements, variations, or additional requirements
as may be necessary or desirable in connection with the efficient operation of
the loan process.
(8) Requirements for Loan Recipients.
(A) Engineering Report and Project Design.
Engineering report and design of eligible projects for community water systems
shall conform with
10 CSR 60-3.010 and
10 CSR
60-10.010.
(B) Loan Closing. All documents and information must
be submitted to the department in sufficient time to allow adequate time for
review and must be approved sixty (60) days prior to the loan closing date
established by the department. The department may extend deadlines if
justified.
1. Final document submittal. The
following documents must be submitted to and approved by the department:
A. Resolution identifying the authorized
representative by name. Recipients for assistance shall provide a resolution by
the governing body designating a representative authorized to file the
application for assistance, reimbursement requests, and act in behalf of the
recipient in all matters related to the project;
B. Proposed project schedule. The following
represents the minimum requirements for the project schedule:
(I) Construction start defined as date of
issuance of notice to proceed;
(II)
Construction Completion;
(III)
Initiation of operation; and
(IV)
Project completion;
C.
Executed engineering contract as described in this rule and the appropriate
procurement documentation as described in paragraph (8)(G)1.;
D. Engineering report and plans and
specifications certified by a registered professional engineer licensed in
Missouri;
E. Certification of
easements and real property acquisition. Recipients of assistance shall have
obtained title or option to the property or easements for the project prior to
loan closing;
F. Draft user charge
and water use ordinances as described in this rule; and
G. Other information or documentation deemed
necessary by the recipient or the department to ensure the proper expenditure
of loan funds.
2.
Projects serving multiple water systems. Prior to closing, if the project
serves two (2) or more public water systems, the recipient shall submit
executed agreements or contracts between the public water systems for the
financing, construction and operation of the proposed facilities.
3. User charge (water rate) ordinance.
A. Loan recipients are required to maintain,
for the useful life of the project, user charge ordinances approved by the
department. User charge ordinances, at a minimum, shall be adopted prior to
financing and implemented by the initiation of operation of the financed
project.
B. The user charge system
shall be designed to produce adequate revenues required for the operation and
maintenance, including a reserve for equipment replacement. It shall be
proportional and based upon actual use. A one hundred ten percent (110%) debt
service reserve may be required. Each user charge system shall include an
adequate financial management system that will accurately account for revenues
generated by the system, debt service, and loan fee costs and expenditures for
operation and maintenance, including replacement based on an adequate budget
identifying the basis for determining the annual operation and maintenance
costs and the costs of personnel, material, energy, and administration. The
user charge system shall provide that the costs of operation and maintenance
not directly attributable to users be distributed equally among the users. The
system shall provide for an annual review of charges.
4. Additional requirements for
privately-owned public water systems. Privately-owned public water systems must
provide documentation from the Missouri Department of Economic Development
showing an allocation under Missouri's private activity bond cap and must
obtain any necessary approvals from the Public Service Commission.
(C) Operation and Maintenance.
1. Operation and maintenance manual. The
recipient must make provision satisfactory to the department for assuring
operational efficiency be achieved as quickly as possible and effective
operation and maintenance of the constructed project throughout its design
life. If required by the department, recipients will develop an operation and
maintenance manual in accordance with departmental guidelines. A draft
operation and maintenance manual must be reviewed by final approval.
2. Start-up training. At construction
completion, a start-up training proposal (if required) and proposed follow-up
services contract must be submitted.
3. Personnel. The recipient must make provision
satisfactory to the department for assuring that operator(s) and maintenance
personnel are hired in accordance with an approved schedule.
4. System certification. If required by the
department, one (1) year after initiation of operation of the constructed
public water system, the recipient shall certify to the department whether or
not the public water system meets the project performance standards. Any
statement of noncompliance must be accompanied by a corrective action report
containing an analysis of the cause of the project's inability to meet
performance standards, actions necessary to bring it into compliance, and
reasonably scheduled date for positive certification of the project. Timely
corrective action shall be executed by the recipient.
(D) Accounting and Audits. Recipients are
required to have a dedicated source for repayment of any loans and an adequate
financial management system and audit procedure for the project which provides
efficient and effective accountability and control of all property, funds, and
assets related to the project. The recipient's financial system is subject to
state or federal audits to assure fiscal integrity of public funds.
1. Each recipient is expected to have an
adequate accounting system for the project which provides efficient and
effective accountability and control of all property, funds, and
assets.
2. The recipient is
responsible for maintaining a financial management system which will adequately
provide for an accurate, current, and complete disclosure of the financial
results of each loan project. Accounting for project funds will be in
accordance with generally accepted government accounting principles and
practices, consistently applied, regardless of the source of funds.
3. An acceptable accounting system includes
books and records showing all financial transactions related to the
construction project. The system must document all receipt and disbursement
transactions and group them by type of account (for example, asset, revenue,
expense, etc.) and by individual expense account (for example, personnel
salaries and wages, subcontract costs, etc.). The recipient shall maintain
books, records, documents and other evidence and accounting procedures and
practices, sufficient to reflect properly the amount, receipt, and disposition
by the recipient for all assistance received for the project and the total
costs of the project of whatever nature incurred for the performance of the
project for which the assistance was awarded.
(E) Record Retention Requirements.
The recipient must retain all records according to the
retention schedules established by Chapter 109, RSMo. A longer retention period
may be required under the loan documentation.
(F) Minimum Requirements for Architectural or
Engineering Contracts.
1. The agreement must-
A. Be necessary for and directly related to
the accomplishment of the eligible project;
B. Be a lump sum or cost plus fixed fee
contract in the form of a bilaterally executed written agreement;
C. Be for monetary consideration;
D. Not be in the nature of a grant or
gift;
E. State a time frame for
performance;
F. State a cost which
cannot be exceeded except by amendment; and
G. State provisions for payment.
2. The nature, scope and extent of
work to be performed during construction should include, but not be limited to,
the following:
A. Preparing an operation and
maintenance manual if required by the department that meets the requirements of
this rule;
B. Assisting the
recipient in letting bids;
C.
Assisting the recipient in reviewing and analyzing construction bids and making
recommendations for award;
D.
Inspecting during construction to ensure conformance with the construction
contract documents unless waived by the department; and
E. If required by the department, assisting with
facility operation for purposes of certifying that the facility is operating
properly one (1) year after start-up.
3. The final approved executed engineering
contract must be submitted prior to the first reimbursement
request.
(G) Procurement
of Engineering Services.
1. Procurement of
engineering services shall be in accordance with sections
8.285
through
8.291,
RSMo or subsection (8)(J) of this rule.
(H) Specifications. The construction specifications
must contain the following:
1. Recipients
must incorporate in their specifications a clear and accurate description of
the technical requirements for the material, product, or service to be
procured. The description, in competitive procurement, shall not contain
features which unduly restrict competition unless the features are necessary to
test or demonstrate a specific thing or to provide for interchangeability of
parts and equipment. The description shall include a statement of the
qualitative nature of the material, product, or service to be procured and,
when necessary, shall set forth those minimum essential characteristics and
standards to which it must conform if it is to satisfy its intended
use;
2. The recipient shall avoid
the use of detailed product specifications if at all possible;
3. When in the judgment of the recipient it
is impractical or uneconomical to make a clear and accurate description of the
technical requirements, recipients may use a brand name or equal description as
a means to define the performance or other salient requirements of a
procurement. The recipient need not establish the existence of any source other
than the named brand. Recipients must state clearly in the specification the
salient requirements of the named brand which must be met by
offerers.
4. Sole source
restriction. A specification shall not require the use of structures,
materials, equipment, or processes which are known to be available only from a
sole source, unless the department determines that the recipient's engineer has
adequately justified in writing to the department that the proposed use meets
the particular project's minimum needs;
5. Experience clause restriction. The general
use of experience clauses requiring equipment manufacturers to have a record of
satisfactory operation for a specified period of time or of bonds or deposits
to guarantee replacement in the event of failure is restricted to special cases
where the recipient's engineer adequately justifies any such requirement in
writing. Where this justification has been made, submission of a bond or
deposit shall be permitted instead of a specified experience period. The period
of time for which the bond or deposit is required shall not exceed the
experience period specified;
6.
Domestic products procurement law requirements in accordance with sections
34.350-34.359, RSMo;
7. Bonding on
construction contracts exceeding one hundred fifty thousand dollars ($150,000),
the bid documents shall require each bidder to furnish a bid guarantee
equivalent to five percent (5%) of the bid price. In addition, the bid
documents must require the successful bidder to furnish performance and payment
bonds, each of which shall be in an amount not less than one hundred percent
(100%) of the contract price;
8.
State wage determination in accordance with sections 290.210-290.340, RSMo and
8 CSR 30 Chapter 3;
9. Right of
entry to the project site shall be provided for representatives of the
department, the Environmental Improvement and Energy Resources Authority, and
the Missouri State Auditor so they may have access to the work wherever it is
in preparation or progress; and
10.
The following statement: "The owner shall make payment to the contractor in
accordance with section
34.057,
RSMo."
(I) Construction
Equipment and Supplies Procurement. This section describes the minimum
procurement requirements which the recipient must use unless the recipient
elects to use the design/build option described in subsection (8)(J) of this
rule.
1. Small purchases. A small purchase is
the procurement of materials, supplies, and services when the aggregate amount
involved in any one (1) transaction does not exceed one hundred fifty thousand
dollars ($150,000). The small purchase limitation of one hundred fifty thousand
dollars ($150,000) applies to the aggregate total of an order, including all
estimated handling and freight charges, overhead and profit to be paid under
the order. In arriving at the aggregate amount involved in any one (1)
transaction, all items which should properly be grouped together must be
included. Department concurrence and a minimum of three (3) quotes must be
obtained prior to purchase.
2.
Bidding requirements. This paragraph applies to procurement of construction
equipment, supplies, and construction services in excess of one hundred fifty
thousand dollars ($150,000) awarded by the recipient. No contract shall be
awarded until the department has approved the formal advertising and bidding.
A. Formal advertising.
(I) Adequate public notice. The recipient
will cause adequate notice to be given of the solicitation by publication in
newspapers of general circulation beyond the recipient's locality (preferable
statewide), construction trade journals or plan rooms, inviting bids on the
project work and stating the method by which bidding documents may be obtained
or examined.
(II) Adequate time for
preparing bids. A minimum of thirty (30) days shall be allowed between the date
when public notice, publication, insertion, or document availability in a plan
room is first published and the date by which bids must be submitted. Bidding
documents shall be available to prospective bidders from the date when the
notice is first published or provided.
B. Bid document requirements and procedure.
(I) The recipient shall prepare a reasonable
number of bidding documents (Invitations for Bids) and shall furnish them upon
request on a first-come, first-served basis. The recipient shall maintain a
complete set of bidding documents and shall make them available for inspection
and copying by any party. The bidding documents shall include, at a minimum:
(a) A completed statement of the work to be
performed or equipment to be supplied and the required completion
schedule;
(b) The terms and
conditions of the contract to be awarded;
(c) A clear explanation of the method of
bidding and the method of evaluation of bid prices and the basis and method for
award of the contract or rejection of all bids;
(d) Responsibility requirements and criteria
which will be employed in evaluating bidders;
(e) The recipient shall provide for bidding
by sealed bid and for the safeguarding of bids received until public
opening;
(f) If a recipient desires
to amend any part of the bidding documents during the period when bids are
being prepared, addenda shall be communicated in writing to all firms which
have obtained bidding documents in time to be considered before the bid opening
time. All addenda must be approved by the department prior to award of the
contract;
(g) A firm which has
submitted a bid shall be allowed to modify or withdraw its bid before the time
of bid opening;
(h) The recipient
shall provide for a public opening of bids at the place, date, and time
announced in the bidding documents. Bids received after the announced opening
time shall be returned unopened;
(i) Award shall be to the lowest, responsive,
responsible bidder. After bids are opened, the recipient shall evaluate them in
accordance with the methods and criteria set forth in the bidding documents.
The recipient shall award contracts only to responsible contractors that
possess the potential ability to perform successfully under the terms and
conditions of a proposed contract. A responsible contractor is one that has
financial resources, technical qualifications, experience, organization, and
facilities adequate to carry out the contract or a demonstrated ability to
obtain these. The recipient may reserve the right to reject all bids. Unless
all bids are rejected for good cause, award shall be made to the lowest,
responsive, responsible bidder. The recipient shall have established protest
provisions in the specifications. These provisions shall not include the
department as a participant in the protest procedures. If the recipient intends
to make the award to a firm which did not submit the lowest bid, the recipient
shall prepare a written statement before any award, explaining why each lower
bidder was deemed nonresponsible or nonresponsive and shall retain the
statements in its files. The recipient shall not reject a bid as nonresponsive
for failure to list or otherwise indicate the selection of subcontractor(s) or
equipment unless the recipient has clearly stated in the solicitation documents
that the failure to list shall render a bid nonresponsive and shall cause
rejection of a bid; and
(j)
Departmental concurrence with contract award must be obtained prior to actual
contract award. Recipients shall notify the department in writing of each
proposed construction contract which has an aggregate value over one hundred
fifty thousand dollars ($150,000). The recipient shall notify the department
within ten (10) calendar days after the bid opening for each construction
subagreement. The notice shall include:
I.
Proof of advertising;
II.
Tabulation of bids;
III. The bid
proposal from the bidder that the recipient wishes to accept, including
justification if the recommended successful bidder is not also the lowest
bidder;
IV. Recommendation of
award;
V. Any addenda not submitted
previously and bidder acknowledgment of all addenda;
VI. Copy of the bid bond;
VII. One (1) set of as-bid
specifications;
VIII. Revised
financial capability worksheet and certification if bids exceed prebid
estimates by more than fifteen percent (15%); and
IX. Site certification, if not previously
submitted.
(J) Procurement of Design-build Services.
The procurement of design-build services shall be in accordance with section
67.5060,
RSMo. Recipients that are exempt from section
67.5060,
RSMo may also utilize design-build services if local ordinances or policies
allow design-build and the procurement of the design-build team considers both
the qualifications of the team. Recipients seeking funds for a project
utilizing design-build services must notify the department with the recipient's
application. Recipients that utilize design-build services shall coordinate
procurement activities with the department to ensure compliance.
(K) Conflict of Interest.
1. No employee, officer, or agent of the
recipient shall participate in the selection, award or administration of a
subagreement supported by state or federal funds if a conflict of interest,
real or apparent, would be involved. This conflict would arise when-
A. Any employee, officer or agent of the
recipient, any member of their immediate families or their partners have a
financial or other interest in the firm selected for a contract; or
B. An organization which may receive or has
been awarded a subagreement employs, or is about to employ, any employee,
officer or agent of the recipient, any member of their immediate families or
their partners.
2. The
recipient's officers, employees, or agents shall neither solicit nor accept
gratuities, favors, or anything of substantial monetary value from contractors,
potential contractors, or other parties to subagreements.
(L) Changes in Contract Price or Time. The
contract price or time may be changed only by a change order. The value of any
work covered by a change order or of any claim for increase or decrease in the
contract price shall be determined by the methods set forth in the following:
1. Unit prices.
A. Unit prices previously approved are
acceptable for pricing changes of original bid items. However, when changes in
quantities exceed fifteen percent (15%) of the original bid quantity and the
total dollar change of that bid item is greater than twenty-five thousand
dollars ($25,000), the recipient shall review the unit price to determine if a
new unit price should be negotiated.
B. Unit prices of new items shall be
negotiated;
2. A lump sum
to be negotiated; and
3. Cost
reimbursement. The actual cost for labor, direct overhead, materials, supplies,
equipment, and other services necessary to complete the work plus an amount to
cover the cost of general overhead and profit.
(M) Progress Payments to Contractors.
1. Recipients should make prompt progress
payments to prime contractors and prime contractors should make prompt progress
payments to subcontractors and suppliers for eligible construction, supplies,
and equipment costs in accordance with section
34.057,
RSMo.
2. Retention from progress
payments. The amount the recipient retains should be in accordance with section
34.057,
RSMo.
(N) Trustee or
Paying Agent. The department may require the recipient to contract with a
trustee or paying agent to provide the services listed below, along with other
such services as detailed in the participants escrow agreement:
1. Maintain separate trust funds and accounts
for recipients;
2. Disburse funds
to recipients;
3. Collect principal
and interest quarterly payments from recipients; and
4. Provide monthly financial reports to
recipients.