Tenn. Comp. R. & Regs. 0400-46-06-.06 - APPLICATION PROCEDURE

(1) Applicants for SRF loans must submit an application on forms furnished by the Department.

(2) The Department shall review the loan application to ensure that it is complete and shall inform the applicant in writing of the determination and/or other information required.

(3) The Department shall submit recommendations for loans to the Authority.

(4) A facilities plan must be submitted and approved by the Department before approval of any loans which do not include planning. Potential loan applicants should confer with Departmental reviewers in the initial stages of the facilities planning process. A facilities plan shall contain the following information:

(a) identification of the planning area boundaries and characteristics, the existing problems and needs and problems for the next 30 or more years;

(b) demonstration that each sewer system is not or will not be subject to excessive infiltration/inflow;

(c) systematic identification, screening, study, evaluation, and cost-effective analysis of conventional technologies, as well as innovative, and alternative technologies;

(d) adequate evaluation of the environmental impacts of alternatives to support the cost-effective analysis;

(e) if collection lines are included, establishment of whether they are for replacement or major rehabilitation necessary to the total integrity and performance of the wastewater treatment works servicing the community, or they are for a new collection system in an existing or planned wastewater treatment capacity;

(f) documentation on the project's consistency with the approved elements of any applicable water quality management plan approved under Section 208 or 303(e) of the Clean Water Act; and,

(g) a concise description of the selected alternative with an appropriate level of detail.

(5) User charge system.

(a) General. The borrower of an SRF loan must obtain the Department's approval of its user charge system. If the borrower has a user charge system in effect at the time of the application, the borrower shall demonstrate that it meets the provisions of this paragraph or amend it as required.

(b) Rates. The user charge rate must produce adequate revenues to provide for the following expenditures:

1. Operation and maintenance expenses;

2. Interest; and

3. Depreciation or principal payment, whichever is greater.

These costs shall be reviewed by the borrower on an annual basis as a part of the budget process and the rates adjusted accordingly for the life of the loan.

(c) Operating deficits. The user charge system wilI require maintenance of user rate structures necessary to fund the current expenditures in subparagraph (b) of this paragraph, and to liquidate any retained earnings deficit over a period of time to be determined by the Department.

(d) Rate resolution.

1. Prior to loan approval, the applicant shall provide the Department with an adopted resolution which proposes a user rate that meets the requirements of the user charge system described in subparagraph (b) of this paragraph.

2. Prior to ninety percent payment of loan proceeds, the local government shall submit for Departmental approval the enacted user rate which meets the requirements described in subparagraph (b) of this paragraph.

(6) Intermunicipal agreements. If the project will serve two or more local governments, the borrower shall obtain Department approval of executed intermunicipal agreements prior to loan approval. These agreements may be in the form of contracts or other legally binding instruments necessary for the financing, construction, operation and maintenance of the proposed treatment works. At a minimum, it must include the basis upon which costs are allocated.

(7) Plans and Specifications.

(a) 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. The borrower must own easements and/or land, or have taken condemnation proceedings needed to construct the project before plans and specifications for a construction loan will be approved by the Department.

(b) Sewer Use Ordinance. All borrowers who do not have a Sewer Use Ordinance (SUO) in effect at the time of application are required to obtain the Department's approval of an enacted SUO prior to the approval of plans and specifications for the project. The SUO must protect the technical and financial integrity of the collection and treatment system including provisions for the control of inflow/infiltration, toxicity, and maximum system use by all eligible customers.

(c) Pretreatment Program. If the borrower does not have a pretreatment program approved by the Department and the proposed project will result in the discharge of industrial wastes into the collection system, then an industrial survey in accordance with 40 CFR 403.8(f)(2)(i) (as amended) must be conducted. Results of the survey are to be submitted to the Division of Water Resources to determine if a pretreatment program must be developed.

Notes

Tenn. Comp. R. & Regs. 0400-46-06-.06

Original rule filed September 16, 2013; effective December 15, 2013. Rule originally numbered 1200-22-06. Amendment filed April 17, 2015; effective 7/16/2015.

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