(1) Steps involved in obtaining a loan.

Terms Used In Florida Regulations 62-503.300

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Appraisal: A determination of property value.
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Fee simple: Absolute title to property with no limitations or restrictions regarding the person who may inherit it.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
    (a) Request for inclusion. The project sponsor shall submit a Request for Inclusion Form, incorporated by reference in subsection Fla. Admin. Code R. 62-503.200(30), to the Department to establish project ranking on the priority list as outlined in paragraph (1)(e), below, and to determine the financing rate on the loan, as outlined in subsection (5), below:
    1. The Department shall review requests for inclusion to verify eligibility and accuracy of the information provided, such as census tract numbers, service area boundaries, population, public health risk, system boundaries, project costs, and to determine the project scope.
    2. Additional information shall be requested by the Department when the data provided by the project sponsor are incomplete or unclear.
    (b) Documentation required for priority listing. The documentation that must be timely submitted to compete for funding at a priority list meeting varies depending on the type of loan being requested and is known as the readiness-to-proceed criteria. For planning loans, the completed Request for Inclusion form is the only documentation required. For design loans, the Request for Inclusion form and all documentation required in subsection Fla. Admin. Code R. 62-503.700(2), must be submitted and complete. For Inflow and Infiltration (I/I) rehabilitation loans, the Request for Inclusion form, sewer system evaluation study, all documentation referenced in Rule Fla. Admin. Code R. 62-503.751, all required permits and bid documents corresponding to the areas to be rehabilitated must be submitted. For construction loans, the Request for Inclusion form, all documentation referenced in subsections 62-503.700(2) through Fla. Admin. Code R. 62-503.700(5), must be submitted, and the process described in Rule Fla. Admin. Code R. 62-503.751, must be completed.
    (c) Priority List Public Meeting.
    1. Except as provided in subparagraph 2., below, if funds are available for new projects, a priority list public meeting shall be held on the second Wednesday in August, or as otherwise noticed in the Florida Administrative Register at least 60 days in advance of the public meeting.
    2. If the waiting portion from the previous fiscal year exceeds twice the anticipated available funds, no public meeting shall be held, unless it is necessary to add projects to meet federal requirements. If such a public meeting is held, only those projects necessary to comply with the federal requirements shall be considered. For the purposes of this paragraph, anticipated available funds means federal capitalization grants and state matching funds expected to be received during the state fiscal year, loan repayments minus debt service payments to be received during the state fiscal year, any carry over funds from the previous year, and anticipated interest earnings during the fiscal year.
    3. If additional funds are available after the priority list public meeting, one or more priority list management public meetings shall be scheduled to allocate the additional funds.
    (d) Readiness-to-proceed deadline. For a project to appear on the priority list, the sponsor shall have postmarked or delivered to the Department all documentation as required in paragraph (b), above, no later than 45 days before the priority list public meeting at which the project competes for funding. Electronic submittals to the Department are encouraged. The project sponsor must respond to all Department comments related to the required documentation and must submit these responses at least 15 days prior to the public meeting.
    (e) Priority system. Timely submitted projects shall be given priority according to the extent each project is intended to remove, mitigate, or prevent adverse effects on surface or ground water quality and public health. The final priority score for each project shall be determined as described in subparagraphs 1. though 4., below.
    1. Base priority score. Each project shall receive a base priority score (BPS) based on the weighted average of its components or facilities. The BPS shall be determined based on the following formula where CPS means the component priority score and CCC means component construction cost or:
BPS = [CPS1 x CCC1 + . . + CPSn x CCCn ] / Total Construction Cost
Project components shall be assigned component priority scores according to the categories in Table 1.
Table 1
    Project Component
    CPS
    1. Eliminate a documented acute or chronic public health hazard.
    500 points
    2. Implement a project included in, or to be implemented as a direct result of, an adopted Basin Management Action Plan or a Reasonable Assurance Plan approved pursuant to Florida Statutes § 403.067
    450 points
    3a. Protect surface or ground water by reducing a documented source of pollution, pollution reductions necessary to meet regulatory requirements, or
    3b. Projects or activities by local governmental agencies or on-site system management entities, under section 319 of the Act, that correct septic tank contributions to nutrient impaired spring systems.
    400 points
    4. Address a compliance problem documented in an enforcement action where the Department has issued a notice of violation or entered into a consent order with the project sponsor.
    375 points
    5. Meet the criteria for Innovative/Alternative; correct excessive inflow/infiltration; scheduled rehabilitation, replacement, or repair described in an approved asset management plan; or reuse that replaces an existing or proposed demand on a water supply.
    350 points
    6. Planning and design loans and for rehabilitation, replacement or repair not included in an approved asset management plan.
    340 points
    7. Projects that construct other reclaimed water systems or residuals reuse systems that do not meet the criteria of component 5., above.
    300 points
    8. Ensure compliance with other enforceable standards or requirements.
    200 points
    9. Timely submitted project that otherwise meets the requirements of the Act.
    100 points
    2. Special waters of the state factor. A project base priority score assigned under subparagraph (e)1., above, shall be multiplied by 1.2 if the project is a construction project that will assist in the restoration or protection of Outstanding Florida Waters (pursuant to Florida Statutes § 403.061), a water body identified under the National Estuary Program (pursuant to the Act); a federally designated Wild, Scenic or Recreational River Area; or an impaired water body on the State’s adopted verified list of impaired waters.
    3. Construction projects that result in the elimination of ocean outfalls or are identified in a regional water supply plan developed pursuant to Florida Statutes § 373.709, shall have 15 bonus points added to the priority score after the adjustment under subparagraph (e)2., above.
    4. Economic hardship. The extent of the economic hardship existing in a small community to be served by the project shall be reflected in the priority score. For a sponsor that qualifies as a small community with a financial hardship, points shall be added to the priority score, using the formula 1000 divided by the Affordability Index, after adjustment under subparagraphs (e)2. and (e)3., above.
    (f) Priority List Development. The priority list is developed at the public meeting and includes the fundable, waiting, and planning portions. Projects that meet the requirements of paragraph (b), above, compete for placement on the fundable or waiting portions using a tiered ranking system. Tier 1 includes all projects previously on the fundable portion which require an increase to an existing loan, tier 2 includes new projects that receive a priority score of 350 points or more, and tier 3 includes all other projects. Tier 1 is the highest priority and tier 3 the lowest. Within each tier, projects are ranked in priority score order with the highest score at the top of the tier. Once the segment cap has been determined, the available funds are assigned to projects in tiers 1 and 2 moving down the list until all projects have been assigned funds, up to the lower of the requested amount or the segment cap, or until the available funds are exhausted. The unfunded balance is then placed on the waiting portion, up to a maximum of $50,000,000.00 million, by tier then priority score order. If funds remain available, they are assigned to projects in tier 3 until the funds are exhausted or all projects have been funded. Projects that must be added to meet special provisions of a federal capitalization grant shall be added to the bottom of the fundable portion, bypassing projects that would otherwise be placed on the fundable portion. After the ranking of projects, the proposed list shall be posted on the Department’s website not later than 14 days before the priority list public meeting. Projects from tier 3 that do not receive any funding are placed on the planning portion in alphabetical order. To receive funding, projects on the planning portion must compete for funding at a subsequent priority list public meeting.
    (2) Allowable project costs. Costs incurred before execution of a loan agreement shall be ineligible for reimbursement upon execution of the agreement unless the project sponsor receives prior written authorization from the Department to incur such costs. Categories of allowable project costs include the following water pollution control activities subject to such limitations for leveraged loans as are necessary to maintain the tax-exempt status of bonds issued by the FWPCFC:
    (a) Land necessary for and integral to the treatment process and for the ultimate disposal of wastewater or stormwater, including the zone of discharge. Funding shall be limited to the fair market value of the acreage, in fee simple, of the qualifying land. If additional land is acquired, the eligible amount shall be the acreage of the qualifying land divided by the total area purchased times the purchase price;
    (b) Construction and related procurement and other arrangements used to implement planned activities (such as a best management practice);
    (c) Demolition and removal of existing structures;
    (d) Contingency for project cost overruns under subsection Fla. Admin. Code R. 62-503.300(4);
    (e) Technical services after bid opening or award of design/build projects, and legal services resulting directly from the requirements of the Department supplied supplementary conditions that are included in the bid documents to comply with federal requirements, or legal services resulting from contractor non-compliance with the construction contract;
    (f) Costs associated with interim financing for project sponsors that proceed without sufficient loan funds from the Department, for which the sponsor has received prior written authorization from the Department;
    (g) Capitalized interest;
    (h) The purchase of a domestic wastewater facility, excluding the value of land that does not meet the requirements of paragraph Fla. Admin. Code R. 62-503.300(2)(a) In addition, an appraisal is required to identify the land costs that must be excluded;
    (i) Technical services for soil and hydrogeological tests, geotechnical evaluations, sewer system evaluations, archaeological surveys and value engineering services performed by a SAVE International Certified Value Specialist. See the SAVE International web site at http://www.value-eng.org/ for more information;
    (j) Costs for planning and design;
    (k) Project costs, excluding operational costs, to implement best management practices for agricultural nonpoint source water pollution control;
    (l) For sewer system evaluation studies, technical services for generating a sewer system evaluation survey, inflow corrections including replacing clean out caps, installing seals and dishes for manholes, and the televising/cleaning of lines including point repairs as necessary;
    (m) For I/I rehabilitation loans, construction and related procurement used to implement the Department approved planned activities for an I/I rehabilitation project;
    (n) Preparation and implementation of an asset management plan. To be eligible for reimbursement, the asset management plan must meet the requirements of subsection Fla. Admin. Code R. 62-503.700(7); and,
    (o) Constructed wetlands to be used for the treatment of domestic wastewater.
    (3) Ineligible project costs.
    (a) Acquiring all or part of existing stormwater, wastewater, or water pollution control management systems, except as allowed in paragraph Fla. Admin. Code R. 62-503.300(2)(h);
    (b) Project facilities or activities not included within the Department approved project scope;
    (c) Costs for the projects sponsor’s personnel in constructing project facilities or implementing of agricultural best management or conservation practices;
    (d) Costs incurred after the project closeout has been conducted by the Department to document project completion, final project costs, and adequacy of sponsor’s project files;
    (e) Project facilities or services for which the planning, design, construction and procurement requirements of Rule Fla. Admin. Code R. 62-503.700, are not met;
    (f) Water pollution control systems or components thereof, under a leveraged loan, that service a private use to the extent that the tax status of bonds issued by the FWPFC is jeopardized;
    (g) Acquisition of sewer rights-of-way, sewage treatment plant sites, sanitary landfills, and other site acquisition that is not necessary for and integral to the treatment process as described in section 212(2)(A) of the Act;
    (h) Service connections on private property unless the project qualifies for funding as a result of section 319 of the Act;
    (i) Costs incurred before execution of a loan agreement unless the Department has provided written authorization to incur costs;
    (j) Any portion of a project funded by an executed agreement from any regional, state, or federal funding agency; and,
    (k) Any other cost not listed as allowable under subsection (2), above.
    (4) Project contingency.
    (a) At the time of loan approval and when actual costs are unknown, project contingency shall not exceed 10% of the estimated sum of the construction costs and costs for allowable land. The contingency shall be adjusted by the Department to not more than 5% after procurement contracts have been executed. There shall be no contingency for land when the costs are known.
    (b) The contingency remaining after accounting for contract change orders shall be eliminated by the Department when project closeout occurs.
    (c) Contingency funds shall not be used to purchase equipment or pay for construction work or other activities not described in the loan agreement.
    (5) Financing rate.
    (a) The financing rate shall be calculated as follows except that the minimum financing rate shall be 0 percent and the maximum financing rate shall be the market rate:
FR = MR — 4 + (4/(1+(100/AI)3)) — 1/Log(P)
Where:
FR = financing rate
MR = Market Rate
AI = Affordability Index
P = Population served or to be served by the sponsor
When bond proceeds are available for leveraged loans, the market rate shall be the most recent rate at which bonds were sold by the FWPCFC. When bond proceeds are not available, the market rate for interest shall be established using the Thomson Publishing Corporation‘s “Bond Buyer” 20-Bond GO Index. The market rate, is established by the Department as of January 1, April 1, July 1, and October 1 of each year and it is the average weekly yield during the three months (3) immediately preceding the date of determination. The average weekly yield is derived from the yields reported in the “Bond Buyer” for the full weeks occurring during the three-month period.
    (b) The financing rate shall be fixed for the principal amount of the loan and for the duration of the loan repayment period. The financing rate shall be established separately for each amendment resulting from a project cost increase or new segment. The Affordability Index shall be adjusted when a design loan is rolled over to a construction loan to account for changes in project service area or for changes in the census data, but shall remain the same for all construction amendments. The financing rate shall be further adjusted by each of the following for which the project qualifies:
    1. Projects with a Department accepted and implemented asset management plan that meets all requirements in subsection Fla. Admin. Code R. 62-503.700(7), shall be eligible for a reduction in the financing rate if implementation has been verified at least three (3) months prior to the first scheduled repayment. The financing rate shall be as calculated in paragraph Fla. Admin. Code R. 62-503.300(5)(a), minus 0.1.
    2. Projects that qualify as Innovative/Alternative projects as defined in subsection Fla. Admin. Code R. 62-503.200(20), shall also be eligible for a reduction in the financing rate. For projects that are entirely Innovative/Alternative projects, the financing rate shall be as calculated in paragraph Fla. Admin. Code R. 62-503.300(5)(a), minus 0.1. For projects with components that do not qualify as Innovative/Alternative projects, the financing rate reduction shall be 0.1 times the Innovative/Alternative projects component cost divided by the total as-bid construction cost. For these projects the financing rate reduction shall be applied only after the project has been bid.
    3. Projects that include a requirement for Davis Bacon wage rates as required in 29 C.F.R. Part 5, Subpart A (7-1-2013 Edition), hereby incorporated by reference, shall be eligible for a reduction in the financing rate of 0.25. This document is available from the Department’s Clean Water State Revolving Fund Program, 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-03912.
    4. Projects that include a requirement for Buy American as required in 40 C.F.R. Part 35, Subpart E (7-1-2013 Edition), or 2 C.F.R. Part 176, Subpart B (1-1-2013 Edition), hereby incorporated by reference, shall be eligible for a reduction in the financing rate of 0.75. This document is available from the Department’s Clean Water State Revolving Fund Program, 2600 Blair Stone Road, MS 3505, Tallahassee, Florida 32399-2400, or at http://www.flrules.org/gateway/reference.asp?No=Ref-03913, and http://www.flrules.org/gateway/reference.asp?No=Ref-03914.
    (c) The financing rate for a non-governmental sponsor of a project that qualifies for funding as a result of section 319 or 320 of the Act shall be fifty (50%) percent of the market rate as established in paragraph (5)(a), above.
    (6) Debt coverage for non-governmental sponsors. A non-governmental sponsor of a project that qualifies for funding as a result of section 319 or 320 of the Act shall document that it has a current term debt and capital lease coverage ratio of at least 1.15. This ratio shall have, as its numerator, net operations income plus non-operating income plus depreciation plus interest on term debt (multi-year debt) minus payroll and income taxes minus owner withdrawals; and, as its denominator, the sum of scheduled payments on term debt and long-term leases.
Rulemaking Authority Florida Statutes § 403.1835(10). Law Implemented Florida Statutes § 403.1835. History—New 4-17-89, Amended 12-4-91, 2-23-94, Formerly 17-503.300, Amended 1-4-98, 7-1-99, 2-6-02, 7-29-04, 4-22-14.