Wisconsin Administrative Code
Department of Natural Resources
NR 100-199 - Environmental Protection General
Chapter NR 162 - Clean Water Fund Program
Subchapter II - Financial Assistance Requirements
Section NR 162.04 - Cost eligibility

Universal Citation: WI Admin Code ยง NR 162.04

Current through August 26, 2024

(1) ELIGIBLE COSTS.

(a) Eligible at a subsidized rate. Allocable project-specific costs that are necessary and reasonable are eligible for financial assistance. Eligible costs include expenses incurred by the municipality for any of the following items and activities when specific to the scope of a scored project, or when approved by the department as necessary and reasonable for the efficient operation or integrity of the overall treatment works:
1. `Abandonment.' Abandonment of treatment works if approved in the plans and specifications of a scored project or by department staff, including activities such as demolition, re-landscaping, and removal and disposal of municipal waste or other debris.

2. `Access roads.' Construction of roadways necessary to provide appropriate access to facilities such as lift stations and treatment plants.

3. `Acquisition of facilities.' Costs associated with acquiring facilities of an existing treatment works if the municipality will own, operate, and maintain the facilities throughout the term of the financial assistance agreement.

4. `Administrative buildings and equipment.' Buildings, offices, and office equipment and furnishings used for purposes of operating a treatment works, such as administration and storage buildings, if included in the approved plans and specifications or otherwise approved by department staff. The department may prorate costs for buildings, offices, and office equipment and furnishings that are partially used for purposes not related to the treatment works.

5. `Administrative costs of a commission.' Administrative, legal, and other costs incurred by a commission solely for the scored project if identifiable in a contract or agreement between the member municipalities.

6. `Compliance with state and federal requirements.' Costs incurred for activities associated with complying with state and federal requirements related to the scored project.

Note: Federal and state requirements may include any of the following: Americans with Disabilities Act design and construction; green project reserve documentation; Davis-Bacon and Related Acts administration as required under Section 513 of the Federal Water Pollution Control Act 33 USC 1372 or other activities associated with wage rate requirements; DBE solicitation and documentation; activities associated with the use of products made in the United States; environmental review of project sites and other activities related to ch. NR 150 compliance, including costs of public notices and hearings; historical, architectural, archaeological, and cultural resources work identified during planning, design, or construction of the project and incurred prior to project closeout; signage requirements, including on a website or at a wastewater treatment facility or project site; audit activities related to the federal single audit act portion of the municipality's annual audit report until the project is complete.

7. `Construction activities.' Activities defined in s. NR 162.003 (16) and included in construction contracts or performed as force account work, including any of the following:
a. Replacing, repairing, or rehabilitating a treatment works if identified in the plans and specifications as cost-effective and necessary.

b. Restoring streets and rights-of-way and repairing damage to items such as pavement, sidewalks, watermains, and storm sewers necessary as a direct result of construction of the scored project.

c. Punch list item activities.

d. Acquiring, consuming, or expending materials.

e. Obtaining products that comply with federal requirements to use products made in the United States in CWFP projects.

f. Other capital costs incurred solely for purposes of the scored project.

8. `Demolition.' Demolishing existing structures if the demolition is part of a scored project and any of the following applies:
a. The existing structure is part of the wastewater treatment works.

b. The demolition is necessary for site preparation.

c. The demolition is included in abandonment procedures as approved in the plans and specifications of the scored project or when otherwise approved by department staff.

d. The demolition entails removal of equipment or materials, or both, from inside an existing building or other structure that is part of the treatment works being modified or repurposed as part of the scored project.

9. `Discharge monitoring.' The cost of equipment owned or to be owned by the municipality for monitoring, sampling, and analyzing industrial discharges to a municipal wastewater treatment works.

10. `Easements and rights-of-way.' Acquisition of easements and rights-of-way, including purchase cost and administrative and legal expenses.

11. `Equipment.' Equipment related to the scored project, the costs of which the department may prorate if the municipality intends to use the equipment for multiple purposes rather than solely for the treatment works. Eligible equipment includes any of the following:
a. Mobile equipment, such as portable stand-by generators, portable emergency pumps, and grounds and maintenance equipment for mowing and snow removal, for the treatment works.

b. Spare parts if included in the plans and specifications or otherwise approved by the department.

c. Machinery for manufacturing or repairing necessary tools or equipment for the treatment works.

d. Computers, tablets, and related equipment, including purchasing, installing, programming, or upgrading computers, printers, control systems, and other computer-related equipment necessary for operating and maintaining the treatment works. Equipment and systems for accounting, billing, public notification, testing, monitoring, reporting, emergency alerts, communications, geographic information, and supervisory control and data acquisition are included under this subd. 11. d.

12. `Fees.' Fees paid by the municipality for any of the following:
a. Permits obtained for construction, including building, electrical, and plumbing permits, pit or trench dewatering permits, construction site storm water permits, and railroad crossing permits.

Note: Permit fees are not required by the department for waterway projects authorized under ch. 30, Stats., that are funded in whole or in part by any federal or state agency. Therefore, if a municipality at the time of purchase of a permit under ch. 30, Stats., pays a fee for the permit due to not identifying the project as being funded with state or federal funds, the fee is not eligible for reimbursement by the CWFP.

b. Legal fees of an attorney that is not an on-staff municipal attorney, including costs of legal reviews of architectural, engineering, or construction contracts, user charge systems and sewer use ordinances, management plans, intermunicipal agreements, and legal work necessary for securing eligible permits.

c. Service fees paid to a state or federal agency, except administrative fees paid annually along with principal and interest payments on a CWFP loan.

13. `Groundwater monitoring.' Installing groundwater monitoring equipment or facilities.

14. `Insurance.' Purchasing insurance necessary during construction of the scored project, including property, liability, builder's risk, and construction insurance.

15. `Interim debt.' Costs associated with interim debt for the scored project as delineated in sub. (3).

16. `Laboratories.' Laboratory equipment related to initial setup or a significant upgrade or expansion of an on-site laboratory if requested in the financial assistance application.

17. `Land acquisition.' Acquiring land, including purchase cost and administrative and legal expenses if any of the following applies:
a. The land will be used for storage of treated wastewater in land treatment systems before land application.

b. The land will be used for composting or temporary storage of compost residues that result from wastewater treatment if the department has approved a program for use of the compost.

c. The land is property on which the wastewater treatment works, biosolids facility, or lift stations will be located.

d. The land will serve to isolate a treatment facility as required under s. NR 110.15 (3) (d).

e. The land will be used for sludge spreading.

f. The land is the property on which individual systems are or will be located if the systems are publicly owned and maintained.

18. `Lines to public sewer mains.' Pumping units and pressurized lines from the pumping units to the public sanitary sewer main, or holding and septic tanks and their sewer lines to the public sanitary sewer main, that are included in a sewage collection system, are cost-effective, and are owned and maintained by the applicant municipality.

19. `Management plans.' Developing a detailed management plan related to a scored project.

20. `Municipal staff, equipment, and materials.' Municipal expenses incurred solely for the scored project and documented by the municipality as force account work, including any of the following:
a. Salary and benefits of municipal employees, except elected officials or on-staff attorneys, for time spent working directly on the scored project.

b. Expendable material costs incurred by the municipality.

c. Estimated costs incurred using equipment owned by the municipality.

21. `Municipally owned facilities on private property.' Grinder pumps, sewer laterals, service connections, service branches, risers, and riser pipes if located on private property and municipally owned and municipally maintained or if located on municipally owned land.

22. `Pretreatment or toxicity reduction.' Developing a municipal pretreatment or toxicity reduction program and constructing facilities to be used by the municipal treatment works in the program, including monitoring equipment.

23. `Professional services.' Engineering, architectural, legal, and other professional services and fees, including any of the following:
a. Conducting value engineering studies or analyses during the design phase.

b. Conducting system evaluations and studies.

c. Developing facilities plans and engineering reports.

d. Developing, preparing, and submitting plans and specifications.

e. Preparing, printing, and distributing bidding documents.

f. Gathering documents and information for, completing, and submitting CWFP financial assistance applications or interest rate subsidy applications and other forms required for financial assistance.

g. Developing or revising an operations and maintenance manual.

h. Preparing a plan of operation for the project.

i. Advertising for and conducting bid lettings.

j. Analyzing bids, preparing award recommendations, and preparing contracts.

k. Providing construction management, observation, and inspection.

l. Preparing for and facilitating public education and participation opportunities.

m. Travel, indirect costs, and labor for services provided for the scored project.

n. Developing or updating a user charge system or a sewer use ordinance for wastewater treatment and the sewerage system in the municipality.

o. Preparing environmental assessment reports and evaluations.

p. Conducting archaeological surveys and gathering historical site information.

q. Providing municipal advisor or bond counsel services related to loan closing or the issuance of bonds.

r. Preparing a water conservation plan.

s. Producing record drawings.

t. Updating or upgrading treatment works maps of the areas impacted by the scored project.

u. Monitoring required use of American-made products.

v. Providing administration of activities related to the federal Davis-Bacon and Related Acts or other wage requirements.

Note: Links to the Davis-Bacon and Related Acts can be found on the U.S. department of labor's website at https://www.dol.gov/agencies/whd/government-contracts/construction/laws. The Davis-Bacon Act is found in 40 USC 3141 et seq. with procedures and rules in 29 CFR Parts 1 to 7.

w. Conducting research or energy audits for incorporation of energy and water efficiency and conservation into the planning and design of a project.

Note: When 10 percent or more of the project's construction and equipment costs are deemed ineligible for CWFP financial assistance, the costs associated with engineering for those ineligible construction and equipment costs are also ineligible under sub. (2) (h).

24. `Project site.' Construction-related work activities at the project site of a scored project, including any of the following:
a. Landscaping areas impacted by construction of the scored project.

b. Reconnecting laterals due to the rehabilitation of a publicly-owned treatment works.

c. Relocating watermains or storm sewers if necessary for construction, and replacing pipes with the same size or required minimum size pipe if breakage from construction occurs.

d. Erecting project and treatment works identification signs.

e. Preparing a site for construction, including surveying, staking, and grading.

f. Restoring the construction site to original condition or, when necessary, upgrading the site to meet state and local requirements.

g. Removing, relocating, or replacing utilities, providing temporary utilities, installing new utility equipment, or upgrading utilities if necessary for construction of the scored project and the recipient is legally obligated to pay these costs. This subd. 24. g. does not apply to storm water pipes.

25. `Safety.' Purchasing and installing safety equipment related to the scored project.

26. `Sanitary sewers.' Evaluation, new installation, replacement, and lining and other rehabilitation of sanitary sewer pipes.

27. `Security.' Purchasing and installing security equipment and appurtenances for the treatment works, including surveillance cameras, fencing, security alarms, and motion detectors, and conducting a vulnerability assessment if necessary for determining security needs.

28. `Septage facilities.' Facilities for receiving, storing, or treating septage.

29. `Sludge removal.' Removing sludge when necessary as part of a scored project, including treatment plant upgrades, lagoon abandonment, conversion of a lagoon into an equalization basin, or other capital improvements.

30. `Special assessment fees.' Financial and legal costs associated with the process of preparing and implementing special assessments when the municipality is pledging special assessments toward repayment of its CWFP loan.

31. `Staffing evaluations.' Conducting an evaluation of staffing needs to determine appropriate changes to staffing levels as a result of the scored project.

32. `Startup.' Startup expenses for a treatment works incurred solely because of the scored project, including costs for any of the following:
a. Preparing a startup curriculum and training materials.

b. Initial training of operating personnel on new or modified equipment, laboratory procedures, computers, controls, records management, and treatment processes.

c. Obtaining expert operational assistance for adjustments to the treatment process.

d. Implementing a maintenance management system.

e. Trucking seed sludge for startup of the activated sludge process.

f. Attending off-site formal training programs if necessary for the initial operation of the constructed treatment works.

g. Purchasing the first fuel fill-up for new equipment, such as generators.

h. Obtaining necessary computers, upgrades, and software.

33. `Storm sewers.'
a. Replacing storm sewers of the same size or required minimum size if breakage occurs due to construction of a scored project and the existing storm sewers are in direct conflict with the installation of new sanitary sewer pipes in a new location.

b. Installing new or replacing existing storm sewers or BMPs for controlling on-site runoff at treatment facilities, lift stations, septage receiving facilities and other treatment works facilities and properties.

Note: Storm water control sewers or BMPs described in subd. 33. are considered wastewater treatment projects as they are designed for purposes of controlling storm water around wastewater treatment works facilities, and projects for these sewers or BMPs would be funded under subch. II rather than under subch. III for storm water projects.

34. `Street restoration.' Restoring streets and rights-of-way, and repairing items damaged during construction of the scored project, such as pavement, sidewalks, water mains, and storm sewers. Eligibility of costs may be prorated based on participation by one or more other funding sources, or on the percent of the project attributable to CWFP-eligible activities.

Note: Other funding sources that tend to participate in the types of projects that involve street restoration include the department of transportation, the community development block grant program, and the U.S. department of agriculture rural development community programs. Proration of costs can be due to the other funding source covering a portion of costs that would otherwise be eligible for CWFP funding or because some of the project costs are not eligible, such as watermain costs being ineligible when the project purpose is to replace both watermains and sanitary sewers.

35. `Watermains.' Relocating watermains if necessary for construction, and, if breakage due to construction of a scored project occurs, replacing watermains of the same size or required minimum size.

(b) Eligible at market rate. Costs eligible for market interest rate financing of a scored project include any of the following:
1. The cost of reserve capacity for sewage collection system, interceptor, or individual system projects in unsewered municipalities necessary to serve projected flows beyond the initial flows expected at the project completion date.

2. The cost of reserve capacity for wastewater projects necessary to treat projected flows beyond 10 years from the project completion date.

3. The cost of capacity for present and future flows from industrial wastewater users or from industrial areas regulated under ch. NR 216.

4. The cost for the flow from state and federal facilities if the flow from these facilities exceeds 5 percent of the total flow to the treatment works.

5. The cost of any portion of a project to correct violations of effluent limitations contained in a permit issued under ch. 283, Stats.

6. Costs for providing sewers in a previously unsewered area in accordance with s. 281.58 (8) (c), Stats.

Note: A scored project in an unsewered area is eligible for below-market-rate financing if the department finds that at least two-thirds of the initial flow will be wastewater originating from residences in existence at least 20 years prior to submittal of the financial assistance application. If an unsewered project does not meet the two-thirds rule, s. 281.58 (8) (c), Stats., allows the CWFP to fund the project at market rate only.

7. The amount of project costs determined appropriate for a sanction under s. NR 162.08 (4) (b) for noncompliance with DBE good faith effort requirements established in s. NR 162.08 (4) (a).

(c) Market rate cost calculation.
1. The amount of the costs described in par. (b) 1. to 4. is determined using a parallel cost percentage that is calculated as follows:
a. Determine the total design capacity based on total flows and loadings.

b. Calculate a reduced capacity condition by subtracting the flows and loadings associated with par. (b) 1. to 4. from the total design capacity.

c. Estimate the eligible project costs associated with each of the conditions in subd. 1. a. and b.

d. Divide the cost of the reduced capacity condition by the costs of the total design capacity.

PC = RC/DC

Where:

PC . . . is the parallel cost percentage expressed as a decimal.

RC . . . is the cost associated with the reduced capacity condition.

DC . . . is the cost associated with the total design capacity.

2. The amount of market rate project costs in par. (b) 1. to 4. is calculated as follows:

EM = (TP)(1-PC)

Where:

EM . . . is the amount of project costs eligible for market rate financing only.

TP . . . is the total project cost eligible for CWFP financing.

PC . . . is the parallel cost percentage expressed as a decimal.

3. If the department determines that the project includes other market rate costs as described in par. (b) 5. and 6., the amount of those costs shall be subtracted from the amount eligible for below-market rate financing and added to the amount of market rate costs calculated in subd. 2.

Note: All questions relating to cost eligibility or allocation shall be resolved prior to the execution of the financial assistance agreement in accordance with s. NR 162.15.

(2) INELIGIBLE COSTS. Costs for items and activities not directly associated with or not necessary for the construction or startup of a scored project are not eligible for financial assistance unless specifically approved by the department as necessary and reasonable for the efficient operation or integrity of the overall treatment works or BMP. Ineligible items and activities include all of the following:

(a) Allowances. Any allowance or contingency amounts built into a bid contract for nonspecific or ineligible items or activities.

(b) Basin planning. Basin or areawide planning not related to the scored project.

(c) BCPL ineligibles. For a project receiving interest rate subsidy under subch. IV, project costs determined to be ineligible for loan assistance from the BCPL.

(d) Bonus payments. Bonus payments not legally required for completion of construction before a contractual completion date.

(e) Buying capacity. Purchase cost of buying capacity in an existing treatment works that is not being expanded.

(f) Certification. Fees for operator certification training.

(g) Conflict of interest. Costs incurred under a contract that creates a real or apparent conflict of interest. An apparent conflict of interest arises when an official or employee of a recipient participates in the selection, award, or administration of a contract supported by the CWFP and any of the following conditions exist:
1. The official or employee or the official's or employee's spouse has an ownership interest in the firm selected for the contract.

2. Any person identified in subd. 1. receives any contract, gratuity, or favor from the award of the contract.

(h) Engineering. Engineering costs relatable to ineligible construction costs when the ineligible construction and equipment costs are more than 10 percent of total construction and equipment costs.

(i) Grant administration. Any costs for administering or applying for funding from sources other than the CWFP, such as U.S. department of agriculture's rural development programs, a community development block grant program, federal state and tribal assistance grants, U.S. army corps of engineers, focus on energy, or other non-CWFP federal or state government loan or grant programs, or other types of financial assistance programs.

(j) Hookup charges. Hookup charges imposed by one municipality on another for hooking into a treatment works or BMP, or transport system to such a facility, unless the charges are based on identifiable capital improvement costs incurred by the municipality imposing the charge, proportional to the capacity to be used by the municipality hooking up, and included in an intermunicipal agreement meeting the requirements of s. NR 162.05 (4) (h).

(k) Industrial facilities. Costs associated with privately-owned pretreatment facilities and monitoring equipment used by industry for sampling discharges to a municipal treatment works.

(L) Interim debt. Interest or principal payments on interim debt paid by the municipality out of its internal funds rather than capitalized funds, unless DOA notifies the department that such payments are eligible under the particular circumstances.

Note: The ineligibility of interest or principal payments in par. (L) is based on U.S. treasury reimbursement regulations 26 CFR 1.150-2.

(m) Late fees. Interest or late fees on payments for services provided to the municipality in relation to the scored project.

(mm) Laterals. Privately-owned connection laterals that transport wastewater from structures to municipally-owned or privately-owned wastewater systems.

(n) Leases. Costs related to leasing land or buildings.

(nm) Mismanagement and litigation. Costs of claims against the recipient resulting from mismanagement or caused by the recipient's vicarious liability for the improper action of others and costs resulting from litigation of contract disputes, liquidated damages, appeals, and other related disputes.

(o) Negligence. Costs incurred due to negligence or error of a party contracted by the municipality.

(om) No construction. All costs of a project if the municipality does not finance some construction costs through the CWFP, unless the department is cooperating with another governmental funding agency to provide an affordable financing package for the project, the other funding agency is financing the construction costs, and the department receives acceptable documentation of the other agency's commitment.

(p) O&M. Operations and maintenance expenses as defined in s. NR 162.003 (50) and (40), respectively.

(pm) Ordinary municipal operating expenses. Ordinary operating expenses of a municipality, such as salaries and expenses of elected officials and on-staff attorneys, postage, utility bills, and annual financial audits.

(q) Other funding. Costs for which payment has been or will be received from another funding source, including costs for which funds from the U.S. department of agriculture's rural development program or a community development block grant program are committed or costs covered by a focus on energy grant. If the municipality does not receive the funds expected from the other source, the department may consider the costs of the work that was to be funded through the other source to be eligible for CWFP financial assistance unless the costs are considered ineligible under another paragraph in this subsection. This paragraph does not apply to a municipality receiving a loan from the BCPL for a scored project receiving interest subsidy under subch. IV.

(qm) Outside of scope. Costs outside the scope of the scored project unless the department approves the costs as necessary and reasonable to improve the overall integrity, operation, or functionality of the treatment works or BMP.

(r) Personal injury. Personal injury compensation or damages arising out of the project, whether determined by adjudication, arbitration, negotiation, or otherwise.

(rm) Post-closeout. Expenses incurred after the project completion date of the scored project.

(s) Private septic payments. Credits or payments to private septic owners made as a result of complying with s. 60.726, Stats.

(sm) Sludge removal. Removing sludge from a wastewater facility unless it is part of the activities necessary for a scored project.

(t) Special devices. Waste-generating fixtures and associated plumbing from a residence or commercial establishment to a treatment unit, and modifications to homes or other buildings for installation of special devices.

(tm) Special districts. Costs of establishing special purpose districts or commissions, such as sanitary districts, utility districts, and joint commissions.

(u) Storm water pipes. Storm sewer pipes unless the pipes are carrying water to treatment. Portions of storm sewer pipe construction may be eligible in a scored project if the pipes need repair or replacement due to breakage during construction of the scored project, as determined by the department.

(um) Violation penalties. Fines and penalties due to violations of, or failure to comply with, federal, state, or local laws.

(v) Warranty inspections after construction completion. Costs related to post-construction warranty inspections, including costs of a consulting engineer or a third-party inspector, and costs of extended warranties or service contracts that go beyond construction completion.

(vm) Watermains. Watermain construction, replacement, or repair unless the watermain is needed to carry water to a part of the treatment works, or the watermain work is necessary as a direct result of work performed for a scored project, such as moving a watermain to allow appropriate distance between it and a sanitary sewer pipe being constructed in the scored project or repairing or replacing a watermain damaged during construction of the scored project.

(w) Wisconsin fund facilities. The acquisition of a treatment works built with Wisconsin fund grant program monies.

Note: The Wisconsin fund grant program was created to fund municipal wastewater treatment facility projects required to achieve the federal goal of "fishable and swimmable" for the state's waters. The grant program was administered under ch. NR 128, which was created in 1978. Final grant closeouts of Wisconsin fund projects occurred during the 1990s. This grant program preceded the CWFP which was created in 1987 Wisconsin Act 399.

(x) WPDES permit fees. The cost of a WPDES permit unless it is a special permit specific to the project construction.

(3) LIMITATION ON ELIGIBILITY OF INTERIM DEBT COSTS.

(a) Net interest expense. Interim debt interest expenses shall be offset with any interest earnings from the investment of the proceeds from the interim debt to determine the amount eligible for CWFP financial assistance.

(b) Interim debt issuance costs. The amount of interim debt issuance costs eligible for financial assistance is limited to $15,000 plus 0.5 percent of the total eligible face amount of the interim debt. If interim debt is rolled over or renewed, the face amount may not be counted multiple times in calculating the eligible face amount of interim debt for purposes of this limit.

(c) Interim interest costs. The period of time for which interest on interim debt is eligible for financial assistance shall run from no earlier than 18 months prior to the start of construction to the earliest of the following:
1. The date of the first disbursement of the financial assistance.

2. One year following substantial completion of the project.

(d) Cost proration. If the term of the interim debt exceeds the limit in par. (c), the interim debt costs shall be prorated using the length of the eligible term divided by the total time that the interim debt is outstanding. If the interim debt is not exclusively for the CWFP scored project, costs shall be prorated according to the proportion of the total debt that is for the scored project.

(e) Maximum principal. The amount of interim debt principal that may be refinanced with CWFP financial assistance shall not exceed the total amount of the interim debt that was spent on eligible project costs.

Disclaimer: These regulations may not be the most recent version. Wisconsin may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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