Tenn. Comp. R. & Regs. 0400-46-02-.09 - RELATED GRANT APPLICATION REQUIREMENTS

These requirements exclude SRF Assistance grants. The SRF Assistance grant application requirements shall be in accordance with the loan application procedures under Rule 0400-46-06-.06.

(1) Facilities Planning.

(a) General. Facilities planning consists of those necessary plans and studies which directly relate to treatment works needed to protect water quality and public health. Facilities planning will investigate the need for proposed facilities. Through a systematic evaluation of alternatives that are feasible in light of the unique demographic, topographic, hydrologic and institutional characteristics of the area, it will demonstrate that, except for innovative and alternative technology, the selected alternative is cost effective i.e., is the most economical means of meeting the applicable effluent, water quality and public health requirements over the design life of the facility while recognizing environmental and other non-monetary considerations. For sewered communities with a population of 10,000 or less, consideration must be given to appropriate low cost technologies such as facultative ponds, trickling filters, oxidation ditches, land disposal or overland-flow land treatment; and for the unsewered portions of communities of 10,000 or less, consideration must be given to onsite systems. The facilities plan will also demonstrate that the selected alternative is implementable from legal, institutional, financial and management standpoints.

(b) Facilities Plan contents. A completed facilities plan must include:

1. A description of both the proposed treatment works and the completed waste treatment system of which it is a part;

2. A cost-effective analysis of the feasible conventional, innovative and alternative wastewater treatment works, processes and techniques capable of meeting the applicable effluent, water quality and public health requirements over the design life of the facility while recognizing environmental and other non-monetary considerations. The planning period for the cost-effective analysis shall be 20 years. The monetary costs to be considered must include the present worth or equivalent annual value of all capital costs and operation and maintenance costs. The discount rate established by EPA for the construction grants program shall be used in the cost-effective analysis. A cost effective analysis must include:

(i) The description of the relationship between the capacity of alternatives and the needs to be served, including capacity for future growth expected after the treatment works become operational. This includes letters of intent from significant users and industries intending to increase their flows or relocated in the area, documenting capacity needs and characteristics for existing or projected flows;

(ii) An evaluation of improved effluent quality attainable by upgrading the operation and maintenance and efficiency of existing facilities as an alternative or supplement to building new facilities;

(iii) An evaluation of the alternative methods for the reuse or ultimate disposal of treated wastewater and sludge material resulting from the treatment process;

(iv) A consideration of systems with revenue generating applications;

(v) An evaluation of opportunity to reduce the use of energy or to recover energy; and

(vi) Cost information on total capital costs, and annual operation and maintenance costs, as well as estimated annual or monthly costs to residential and industrial users.

3. Demonstration of the non-existence or possible existence of excessive infiltration/inflow in the sewer system;

4. An analysis of the potential open space and recreation opportunities associated with the project;

5. An evaluation of the environmental impacts of alternatives;

6. An evaluation of the water supply implications of the project;

7. A concise description of the selected alternative with an appropriate level of detail, and at least the following;

(i) Relevant design parameters;

(ii) Estimated capital building and operation and maintenance costs, and a description of the manner in which local costs will be financed;

(iii) Estimated cost of future expansion and long-term needs for reconstruction of facilities following their design life;

(iv) Cost impacts on wastewater system users; and

(v) Institutional and management arrangements necessary for successful implementation.

8. The facilities plan shall be submitted to the Commissioner for review. Potential grant applicants must confer with Department reviewers in the initial stages of the facilities planning process.

(2) Sewer Use Ordinance

(a) The applicant's sewer use ordinance shall prohibit any new connections from inflow sources into the treatment works and shall require that new sewers and connections to the treatment works are properly designed and constructed. The ordinance shall also require that all wastewater introduced into the treatment works not contain toxins or other pollutants in amounts of concentrations that endanger public safety and physical integrity of the treatment works or preclude the selection of the most cost-effective alternative for wastewater treatment sludge disposal.

(b) After July 1, 1984, no Step 3 grant pursuant to the Act shall be made unless the following pretreatment requirements have been satisfied:

1. A sewer use ordinance in accordance with the format prescribed 40 CFR Part 403 must have been submitted and approved by the Commissioner and adopted by the recipient; and

2. The applicant must document to the satisfaction of the Commissioner that pretreatment facilities have been constructed or that legally binding commitments exist between the applicant and any discharger(s) to the recipient's proposed wastewater treatment facilities which ensure that pretreatment will be provided on or before the date of completion of the proposed wastewater treatment facilities. For the purpose of this paragraph pretreatment shall be defined as that level of treatment required by each discharger to the recipient's sewerage system which is necessary to meet the Publicly Owned Treatment Work (POTW) protection criteria for POTW unit operations including the collection system.

(3) User Charge System

(a) General. Unless a grant is solely for the acquisition of eligible land, the applicant for a basic State grant or a supplemental State grant must obtain the Commissioner's approval for its user charge system. If the applicant has a user charge system in effect at the time of the application, the applicant shall demonstrate that it meets the provisions of this paragraph or amend it as required by these provisions.

(b) Scope of the user charge. The user charge system shall provide that each user which discharges pollutants that cause an increase in the cost of managing the effluent or sludge from the facility shall pay for such increased cost. The user charge system must be designed to produce adequate revenues to provide for the following expenditures:

1. Operation and maintenance expenses;

2. Debt retirement; and

3. Depreciation of the wastewater treatment works over its useful life, unless the generally accepted accounting principles do not require such.

(c) Actual use. A recipient's user charge system shall be based on actual use, or estimated use, of wastewater treatment services. Each user or user class must pay its proportionate share of the costs described in the subparagraph (b) of this paragraph incurred in the recipient's service area, based on the user's proportionate contribution to the total wastewater loading from all users or user classes.

(d) Notification. Each user charge system must provide that each user be notified, at least annually, in conjunction with a regular bill or other means acceptable to the Commissioner, of the rate and that portion of the user charge that is attributable to wastewater treatment services.

(e) Financial Management System. Each user charge system must include a financial management system that will accurately account for revenues generated by the system and expenditures for the items in subparagraph (b) of this paragraph. This financial management system shall be based on an adequate budget identifying the basis for determining the annual operation and maintenance expenses, debt retirement, depreciation of the wastewater treatment works, and reserve account contributions.

(f) Charges for operation and maintenance for infiltration/inflow. The user charge system shall provide that the costs of operation and maintenance for all flow not directly attributable to users, be distributed among all users based upon either of the following:

1. In the same manner that it distributes the costs for their actual use; or

2. Under a system which uses one of any combination of the following factors on a reasonable basis:

(i) Flow volume of users;

(ii) Land area of the user, and ad valorem; or

(iii) Number of hookups or discharges of the users.

(g) Use of revenue. After completion of a project, revenue from the project including but not limited to, sale of a treatment-related-by-products; lease of the land; or sale of crops grown on the land purchased under the grant agreement, shall proportionately reduce all user charges.

(h) Adoption of system. The user charge system must be legislatively enacted by the recipient. If the project will serve two or more municipalities, the recipient shall submit the executed intermunicipal agreements, contracts or other legally binding instruments necessary for the financing, building and operation of the proposed treatment works. At a minimum they must include the basis upon which cost are allocated, the formula by which costs are allocated and the manner in which the cost allocation system will be administered. The Department may waive this requirement provided the applicant can demonstrate:

1. That such an agreement is already in place; or

2. Evidence of historic service relationships for water supply, wastewater or the other services among the affected communities regardless of the existence of formal agreements; and

3. That the financial strength of the supplier agency is adequate to continue the project even if one or more of the proposed customer agencies fail to participate.

(i) Inconsistent agreements. The user charge system shall take precedence over any terms or conditions of agreements or contracts which are inconsistent with the requirements of these provisions.

(j) Previous debt. The reserve account required under this rule shall be not be used toward offsetting debts incurred prior to the funding of the project.

(k) Approval of user charge system. Plans and specifications for the project will not be approved until the recipient has developed an approvable user charge system. If the project is for Step 3 grant assistance, unless it is solely for acquisition of eligible land, the recipient must obtain the Commissioner's approval of its user charge system. If the recipient has a user charge system in effect, the recipient shall demonstrate to the Commissioner's satisfaction that it meets the requirements of this provision.

(4) Easements. The recipient must own easements and/or land, or have taken condemnation proceedings needed to construct the project before plans and specifications will be approved by the Commissioner.

(5) Plans and Specifications. All plans and specifications must be in accordance with the Facilities Plan/Engineering Report as approved by the Department, and should be consistent with the State Design Criteria for Sewage Works.

Notes

Tenn. Comp. R. & Regs. 0400-46-02-.09

Original rule filed September 16, 2013; effective December 15, 2013. Rule originally numbered1200-22-02.

Authority: T.C.A. §§ 68-221-801 et seq., 68-221-1001 et seq., and 4-5-201 et seq.