Current through Register Vol. 35, No. 18, September 24, 2024
A. Loan agreement.
(1) An interim loan agreement will be
prepared by NMED and executed by the borrower for the project which can be
financed with available loan funds and which has completed requirements set by
NMED pursuant to the Clean Water Act, as amended, and the New Mexico Wastewater
Facility Construction Loan Act. Projects which are not ready to proceed to the
interim loan agreement stage within six months of allocation of available loan
funds may be bypassed by projects lower on the priority list which are ready to
proceed.
(2) The interim loan
agreement contains several conditions and certifications including:
(a) certification that the borrower is a
legal entity with authority to execute a loan agreement by ordinance;
certification that a resolution designating signatory authority has been
passed;
(b) copies of all executed
contracts, subcontracts, agreements, and related amendments entered into by the
borrower prior to the interim loan agreement, but related to this
project;
(c) request for proposals
(RFP) documentation and an engineering agreement, or letter of certificate if
employing staff engineers.
B. Security interest.
(1) Upon execution of an interim loan
agreement with NMED for a construction project and before any proceeds of the
loan are paid out to the borrower, the borrower shall execute a promissory note
for the principal amount of the interim loan agreement plus interest and
administrative fee on the unpaid balance at the appropriate rate per annum, and
may transfer title to the property upon which the facilities are to be
constructed to NMED. In lieu of, or in addition to, the transfer of title
requirement, the borrower may transfer whatever interest it possesses in the
property upon which facilities are to be constructed, to NMED. In either case,
the value of such property or interest so transferred shall be at least equal
to the amount of the loan. All such titles and interest transferred to NMED
shall be secured by title insurance, if applicable, the cost of which shall be
paid by the borrower. NMED shall be named as primary beneficiary of all such
title insurance policies. If title insurance for the property is not applicable
or is not reasonably available, as determined by NMED, then the borrower shall
provide a title company's opinion on the abstract of title to the property up
to the time the property was acquired by the borrower for use as a wastewater
facility.
(2) Upon repayment of the
loan, such interest or title shall be reconveyed to the borrower. Where the
transfer of title or interest in the property would preclude the obtaining of
federal grants, or where such transfer of title or interest is inappropriate or
is prohibited by or would be in violation of existing grant-in-aid agreements,
NMED may waive the requirements of transfer of title or transfer of any
interest in the property, and substitute therefore such other security of
sufficient value it deems necessary such as an irrevocable pledge of revenue
covenant by the borrower.
(3) After
the borrower transfers title or its interest in the property to NMED as
security, the borrower shall:
(a) continue to
insure the property;
(b) be liable
for all taxes and assessments; and
(c) refrain from making major alterations
that destroy the value of the security, unless NMED gives prior
approval.
C.
Allowable and unallowable costs.
(1)
Allowable costs shall be limited to those costs which are necessary,
reasonable, and directly related to the efficient achievement of the objectives
of the project. Costs incurred by the borrower for work performed on the
project prior to execution of the interim loan agreement, but which received
NMED prior approval, may be considered as allowable costs. The borrower must
justify all expenditures for which it requests a disbursement of loan funds
according to accepted NMED criteria and procedures. NMED may withhold
disbursement of funds and may reclaim improperly documented disbursements until
the borrower provides sufficient justification.
(2) All unallowable costs, including but not
limited to overhead charges, administrative expenses, indirect costs, and all
costs of borrower's employed inspectors and noneligible construction costs
shall be paid by the borrower. The administrative fee shall not be included as
principal in the loans and therefore considered an unallowable cost.
(3) The borrower agrees that it will
implement, in all respects, the project outlined in the interim loan
agreement.
(4) The borrower agrees
to make no change in the project description without first submitting a written
request to NMED and obtaining NMED approval of the required change.
D. Accounting. Funds received by
the borrower from NMED and those funds which are contributed by the borrower
shall be deposited in separate bank accounts or in a separate, identifiable
ledger account. In addition, the borrower shall establish and maintain
accounting procedures which will ensure strict accountability for all funds
received and disbursements made by the borrower in connection with the interim
loan agreement. NMED shall be responsible for examining the borrower's audited
financial statements in accordance with the most recent circular on audits of
states, local governments and non-profit organizations as published by the U.S.
office of management and budget.
E.
Records. The borrower shall maintain books, records, documents, and other
evidence sufficient to reflect properly all costs of whatever nature claimed to
have been incurred for the performance of this interim loan agreement. Such
books, records, documents, ledgers, and other evidence shall be preserved and
made available to NMED, state auditor, U.S. governmental accounting office, and
U.S.E.P.A. office of the inspector general during the loan agreement period and
for a period of six years from date of final repayment. If upon termination of
the interim loan agreement, questions exist concerning proper expenditure of
funds, then the borrower shall preserve and make available all books, records,
documents, ledgers and other evidence relating to the interim loan agreement
until such questions are settled and the borrower has received written
notification to that effect from NMED.
F. Audit and inspection. The project sites
and borrower facilities which are in any part the subject of the loan
agreement, and borrower records as defined elsewhere herein, shall be subject
at all reasonable times to inspection and audit by NMED, state auditor, U.S.
governmental accounting office, and U.S.E.P.A. office of the inspector general
during the period of the loan agreement and for a period of six years following
final payment hereunder. All subcontracts let by the borrower, the cost of
which are included in the interim loan agreement, shall include the substance
of this audit and inspection clause.
G. Occupational health and safety. The
borrower covenants that it will take affirmative action to ensure that the
project shall be conducted in conformance with federal and state laws and
regulations relating to occupational health and safety. In addition, the
borrower shall assure that any contract entered into by the borrower for the
performance of work on this project shall contain language by which the
contractor and the borrower agree that authorized representatives of NMED
occupational health and safety bureau shall have free access to the project
site, and shall not be impeded in any way from performance of their
duties.
H. Nondiscrimination.
(1) During the performance of the interim
loan agreement, the borrower shall not discriminate against any employee or
applicant for employment because of race, color, age, religion, sex, or
national origin. The borrower shall take affirmative action to ensure
nondiscrimination in employee recruitment advertising, hiring, upgrading,
promotion, and selection for training (including apprenticeship).
(2) The borrower agrees to post in
conspicuous places, available to employees and applicants for employment,
notices setting forth the provisions of this clause. All solicitation or
advertisement for employees placed by or on behalf of the borrower shall state
that all qualified applicants will receive consideration without regard to
race, color, age, religion, sex, sexual preference, or national origin. The
borrower shall comply with all provisions of Title VI of the Civil Rights Act
of 1964, Executive Order 11246, dated September 24, 1965, and all relevant
rules, regulations, and orders of the U.S. secretary of labor. The borrower
shall include the provisions of the clause in all project
subcontracts.
I.
Termination. NMED shall have the right to terminate the interim loan agreement
if at any time in the judgement of NMED, the terms of the interim loan
agreement have been violated or the activities described in the project
description are not progressing satisfactorily. The borrower may terminate the
interim loan agreement with sufficient reason. In either case, NMED shall
establish following negotiations with the borrower a repayment schedule for the
funds disbursed to the borrower. Such termination must be in writing.
J. Procurement. Sections
13-1-28 through
13-1-199 NMSA 1978 of, The
Procurement Code, imposes civil and criminal penalties for its violation. In
addition, New Mexico criminal statutes impose felony penalties for illegal
bribes, gratuities, and kick-backs.
