Storm Water Grant and Loan Program

PURPOSE: This rule sets forth the requirements and process of application for storm water loans and grants for construction of storm water control facilities and the terms and conditions for receipt of the loan and/or grant as revised. This rule also clarifies the requirements, the types of facilities eligible for funds and the calculation used to determine the amount of loan and grant available for eligible grantees. (1) Applicability. This rule defines the minimum requirements which apply to all recipients of assistance under the state storm water grant and loan program. The recipient must satisfy more stringent requirements if required to do so by the state constitution, state or local statutes, policies, rules, ordinances, or orders. (2) Definitions. (A) Commission. The Missouri Clean Water Commission. (B) Delegated entity. An eligible applicant that has been designated by the department as having sufficient staff and expertise to administer funds to subrecipients within its jurisdiction. (C) Department. The Missouri Department of Natural Resources. (D) Eligible Applicant. 1. Any first class county not served by Metropolitan St. Louis Sewer District (MSD); or 2. The MSD; or 3. Any entitlement city. (E) Eligible Recipient. Any municipality, county, public sewer district, or public water district within the boundaries of the eligible applicant can receive funding if selected by the eligible applicant’s Storm Water Coordinating Committee. (F) Entitlement City. A municipality located in whole or in part in a first class county with a population of at least twenty-five thousand (25,000) based on the most recent decennial census unless that city is within a sewer district established pursuant to Article VI, Section 30(a) of the Missouri Constitution. (G) Force Account. Project planning, design, construction or engineering inspection work performed by the recipient’s regular employees and rented or leased equipment. (H) Letter of Commitment. Initial offer from the department to the eligible storm water funding recipients which details the amount allocated to the recipient and specifies the dates applicable to the receipt of the funds. (I) Storm Water Coordinating Committee (SCC). A local committee or group established by eligible applicants involved in project screening and project selection. In cities over twenty-five thousand (25,000) population, the SCC shall consist of a committee or organizational unit designated by the city. In St. Louis City and County, the SCC shall consist of a committee or organizational unit designated by the executive director of the Metropolitan St. Louis Sewer District. In all eligible counties, except St. Louis County, an SCC must be established which is representative of the county government and incorporated municipalities within the county. (J) Storm Water Loan Revolving Fund. Fund containing repayments and interest from storm water loans originated from storm water control bonds. (3) General Requirements. (A) Jurisdictional Requirements. Storm water funds may be used for storm water projects in any first class county, or city not within a county, or as specified in Article III, Section 37(h) of the Missouri Constitution. (B) Allocation of Bond Fund Proceeds. The department will determine the amount of funds to be allocated to the eligible recipients after Stormwater Control Bonds are issued and are deposited into the Stormwater Control Fund. The funds will be allocated to each first class county and to each sewer district established pursuant to Article VI, Section 30(a) of the Missouri Constitution by a percentage based on the population of the qualifying county or sewer district in relation to the total population of all eligible counties and sewer districts. The most recent federal decennial census will be used for all population statistics. 1. The funds will be further allocated to each entitlement city by a percentage based on the population of the entitlement city in relation to the total population of the first class county(ies) in which the entitlement city is located. 2. The department will send a letter of commitment to each eligible applicant. The notification will include the county, city, or sewer district’s proportionate share of the balance in the Stormwater Control Fund and instructions for applying for the funds. (C) Reallocation of Unused Bond Fund Proceeds. Within sixty (60) days of the date specified in the letter of commitment as the final day for receipt of applications, the department will determine if there are any remaining unused bond fund proceeds. When calculating this amount, the department will include interest that has accrued to the Stormwater Control Fund that was not included in the original calculation and any funds that have not been applied for through the original letter of commitment. The total of these funds will be allocated as described in subsection (3)(B) of this rule except that the calculation will exclude any eligible applicant that has not responded to the initial letter of commitment by the application date. (D) Planning Requirements. 1. All storm water projects must be consistent with a comprehensive storm water management plan. A storm water management plan should contain at a minimum the following components: A. An introduction that defines terms and discusses the purpose, scope, hydrology, and alternatives considered; B. A discussion of the data and methodology used in plan development; C. A description of the existing system (if applicable); D. A list of proposed storm water projects; E. A description of the methodology used to evaluate and establish project priority ranking; F. Estimates of cost for full implementation of the plan; G. A description of the maintenance plan for existing and new systems; H. A geomorphological assessment of the plan area; I. A description of the rainfall/runoff modeling data for the plan area; J. Modeling data, structure data and photographs, public survey response forms; and K. Watershed map, public response map, flood plain map, maps showing project areas. 2. The project specific drainage basin plan must be submitted in conjunction with the applicant’s storm water application to the department. The geographical extent of the planning area may be determined by the department or the delegated entity. Projects which are solely for bank stabilization or erosion control, or other projects as determined by the department or the delegated entity, need only provide the items listed in subparagraphs (3)(D)2.B., D., and E. The drainage basin plan should include, but is not limited to: A. A detailed map of the project drainage area showing computed drainage acreage; B. A narrative, a plan layout, and estimated construction costs for the proposed project; C. Tabulated storm water conceptual design parameters for the drainage area, that is, upstream acres, runoff coefficients, time of concentration, return frequencies, and so forth. Computer modeling information may be submitted; D. A determination of the flood elevation changes resulting from the project, unless the Corps of Engineers has committed to remap the area; and E. An evaluation of limited structural approaches to storm water control. The plan must analyze the use of applied geomorphology and bioengineering techniques to manage storm water. Combinations of measures can be employed to manage storm water and retain important stream functions. “Bioengineering” combines mechanical, biological, and ecological concepts to prevent slope failures and erosion. Bioengineering techniques may use bare root stock, stems, branches, or trunks of living plants on eroded slopes. Plantings may be incorporated into such configurations as a live stakings, live fascines, or living cribwall. Vegetative plantings and cuttings may be combined with structural elements such as gabion baskets or rock surface armoring. However, the intent should be to minimize hard structural solutions and allow the rooted plantings to do much of the work to hold the soil in place and retain the natural function of streams to convey storm water. Other storm water management options include environmental easements and land acquisition. Projects that are only rehabilitation or replacement of existing structures will require an evaluation that addresses reasonable geomorphological alternatives and, if this approach is not taken, a brief discussion why not. For more complex projects, the evaluation should address the root causes of flooding, bed and bank erosion, and sediment deposition. The plan should not exacerbate these problems by: (I) Modifications to stream systems that increase bed and bank erosion in modified stream sections; (II) Cause these impacts in sections that are upstream or downstream of the storm management project; (III) Remove or degrade aquatic habitat; (IV) Remove the pollutant removal benefits of vegetated stream corridors; or (V) Lead to increased flooding upstream or downstream of the storm water management project. (4) Required Documents. Prior to grant award and/or loan closing, the applicant must submit a completed storm water grant/loan application to the department. The following documents must be submitted and approved by the department or delegated entity prior to construction advertising. Some documents may be waived by the department or delegated entity on a case-by-case basis if it is determined they are not needed for that project: (A) The following documents are required for a project which includes design and construction: 1. Construction plans, specifications, and design criteria; 2. Certification by the recipient that— A. The facilities, when completed, will be owned, operated, and maintained by a political subdivision eligible under subsection (3)(A) of this rule; or B. Evidence of a permanent easement and legal authority to ensure operation and maintenance of the facility; 3. Certification by the recipient that contract documents and construction bidding will conform to relevant local and state laws; 4. Certification by the recipient that all necessary easements and land have been or will be obtained prior to construction start; and 5. Certification by the recipient that the recipient will construct the project or cause it to be constructed to final completion in accordance with the certified plans and specifications; and (B) The following documents must be submitted for all storm water grant/loan projects including grants/loans for planning: 1. Certification by the recipient that all state storm water funds will be expended solely for carrying out the approved project; 2. Certification by the recipient that a registered professional engineer has been selected and will perform the services required in section (9) of this rule; 3. Certification by the recipient that the local match is available; and 4. Certification by the recipient that any required section 404 dredge and fill permits from the United States Army Corps of Engineers or land disturbance permits from the department will be obtained prior to construction. (5) Eligible Project Costs. The information in this section represents policies and procedures for determining the eligibility of project costs for assistance under the Storm Water Grant and Loan Program. (A) General. It is the policy of the commission that all project costs will be eligible if they meet the following tests: 1. Reasonable and cost effective; 2. Necessary for the construction of an operable storm water facility or for the completion of a comprehensive storm water master plan; and 3. Included in the scope of the project as described in the application and engineering submittals. (B) Eligible Costs. Eligible costs include at a minimum: 1. Costs for development of a comprehensive storm water control plan meeting the requirements of subsection (3)(D); 2. Engineering services for planning and design based on invoiced amounts for a contracted engineering consultant. A copy of the approved engineering agreement must be submitted to the department or delegated entity when engineering services are to be reimbursed with grant or loan funds. The contract should be a lump sum or cost plus fixed fee contract in the form of a bilaterally executed written agreement. 3. Costs for construction-related engineering when invoiced per an acceptable two (2)-party engineering agreement; 4. Construction costs including construction permits as issued by the department; 5. Land purchase or permanent easement costs required for storm water holding basins, grass-lined channels, or for other limited structural storm water control projects, or buy-outs if the land purchased is restricted such that no permanent structure except for structures allowed under the Missouri Statewide Comprehensive Outdoor Recreation Plan (SCORP) may be constructed within the easement or purchase area. Construction costs related to holding basins on private land are eligible if the eligible recipient retains a permanent easement, is legally responsible for operation and maintenance of the facility, and the basin constructed is clearly for storm water control and not recreational use; 6. Costs of force account work for planning, design, construction, construction engineering, and costs of rented or leased equipment. It does not include the costs of recipient-owned equipment or the costs of administration for grants and loans. Engineering performed by force account must meet the requirements of 10 CSR 20-4.061(9) which state that storm water plan preparation, design, and inspection must be provided by a registered professional engineer or by a person under the direct and continuing supervision of a registered professional engineer. To be considered for force account, the following information must be submitted for review and approval by the department prior to beginning on the project: A. Which project(s) they intend to do with city employees; B. The names of the employees who will be working on the project; C. A specific time code must be assigned to each project. The letter should state the time code number; D. For engineering work, the letter must contain an assurance that the employee is a registered professional engineer or the name of the professional engineer who directly supervises this person; E. The hourly wage for each individual must be given. If the person is salaried, this is the total annual salary divided by two thousand and eighty (2,080) hours. The hourly wage cannot include fringe or indirect costs; and F. A copy of the time card that will be used. The time card must list the employee name, project time code, hours worked, and the signature of the employee and the supervisor. Should there be a change in employees, salary, or engineering supervisor during the course of the project, the recipient must amend/update the information in the original letter before that salary and/or employee cost can be reimbursed; 7. Demolition costs of structures located within storm water control areas provided future development of permanent structures in the storm water control area is restricted; 8. Local cost of issuance and capitalized interest incurred on loans administered under this rule; 9. Up to five (5) sequential years of grant and/or loan funding may be used for the same project if it meets the following criteria: A. The contract is awarded within the time frame necessary to receive the first grant and/or loan of the sequence; B. The recipient certifies that there are adequate funds committed from other sources to complete the construction; C. The recipient commits to the original funding combination for the entire sequence of grants and/or loans; and D. The recipient certifies that the project will be completed with or without the subsequent years’ grant/loan funds. 10. Costs associated with minimizing storm water damage to sink holes; and 11. The reasonable costs of administrative fees incurred by a delegated entity in connection with each grant. (6) Ineligible Project Costs. Ineligible costs include, but are not limited to, the following: (A) Projects which divert storm water to sinkholes or which modify sinkholes to increase storm water capacity; (B) Local government administration or legal costs, including appraisals; (C) Land purchase or easement costs other than those listed in paragraph (5)(B)5.; (D) Permits required for the ongoing operation of the constructed facility(ies); (E) Construction costs incurred prior to the letter of commitment; and (F) Ordinary upkeep and maintenance of existing facilities. (7) Grant Amount. The maximum grant is limited to fifty percent (50%) of the total eligible project costs or available funds, whichever is less. The recipient must provide the remaining amount needed to complete the project through a storm water loan administered by the department or other acceptable source of funds. Grants may be matched with other state or federal grants up to one hundred percent (100%) of the eligible project costs. (8) Loan Amount. Loans will be available in an amount up to one hundred percent (100%) of eligible project costs. Loans may be matched with state or federal grants. However, in no case will the total government assistance exceed one hundred percent (100%) of eligible project costs. (9) Engineering Requirements. (A) A registered professional engineer must prepare the project specific drainage basin plan and design all construction plans and specifications for competitive bidding and compliance with generally accepted storm water design criteria. The documents must have the professional engineer’s seal when they are submitted to the department or delegated entity. (B) A registered professional engineer or a person under the direction and continuing supervision of a registered professional engineer must provide inspection of construction for the purpose of assuring compliance with the approved plans and specifications. (10) Bidding Requirements. (A) This subsection applies to procurement of construction equipment, supplies, and construction services in excess of one hundred thousand dollars ($100,000) awarded by the recipient for any storm water project. 1. Each contract shall be awarded after formal advertising. The project advertisement must be published in a newspaper at least one (1) time thirty (30) days prior to the bid opening or five (5) consecutive days two (2) weeks prior to bid opening or in accordance with the local government’s procurement ordinances. 2. Contract award shall be to the lowest responsive and responsible bidder. 3. Departmental concurrence or concurrence from the delegated entity with contract award must be obtained prior to the actual contract award if fewer than three (3) bidders submit bids or if the recipient wishes to award the contract to other than the low bidder. The recipient shall forward the tabulation of bids and a recommendation of contract award to the department or delegated entity for review. 4. Executed contract documents must be submitted prior to the first grant payment if payments are made monthly. If the grant is paid into an escrow account, the executed contract documents must be submitted with the first statement that indicates construction costs were paid with grant funds. (B) Small Purchase Contract. A small purchase is the procurement of materials, supplies, and services when the aggregate amount involved in any one (1) transaction does not exceed one hundred thousand dollars ($100,000). The small purchase limitation of one hundred thousand dollars ($100,000) applies to the aggregate total of an order, including all estimated handling and freight charges, overhead, and profit to be paid under the order. In arriving at the aggregate amount involved in any one (1) transaction, all items which should properly be grouped together must be included. A minimum of three (3) quotes must be obtained and approved by the department or delegated entity. (11) Grant Payments. (A) Prior to the grant award, the department will notify the grantee how funds will be disbursed under the grant. 1. No funds may be drawn from the grant until the following conditions have been met: A. For construction projects, the grantee must submit to the department: (I) Construction plans and specifications prepared in accordance with subsection (9)(A) of this rule; and (II) Executed contract documents. B. For planning projects, the grantee must have the department’s concurrence for all major consulting contracts, and a copy of the consulting contracts must be on file with the department; and C. The grantee has documented it has secured matching funds for the grant. 2. Projects administered through a delegated entity will be paid in accordance with the delegated entity’s procedure on file with the department. (B) An audit to verify eligible project costs and inspection of the project may be made by the department. Any funds found not expended for purposes listed in section (5) of this rule will be recovered in addition to any applicable penalties. (12) Loan Requirements. (A) Loans shall be administered in accordance with the provisions in 10 CSR 204.041 except that the loan shall not be subject to requirements unique to wastewater treatment projects. When the storm water loan is funded through storm water control bonds, the loan shall not be subject to requirements specific to federal funding. (B) Loans must be secured with an acceptable debt instrument including revenue or general obligation bonds. Other financing securities will be reviewed on a case-by-case basis. Repayment must begin within one (1) year of project completion. (C) The commission may direct that existing and/or future loans be leveraged through the Environmental Improvement and Energy Resources Authority. (D) If at any time during the loan period the facility(ies) financed under this rule is sold, either outright or on contract for deed, to other than a political subdivision of the state, the loan becomes due and payable upon transfer. (13) Repayment of Grant. A portion of the grant will be required to be repaid if the facilities constructed with grant funds are sold or transferred to private ownership. The grantee shall notify the department at least ninety (90) days prior to any such transfer. The amount of grant funds to be repaid will be based on a straight-line depreciation schedule based on the useful life of the project, but in no event exceeding a thirty (30)-year depreciation schedule. (14) Storm Water Loan Revolving Fund. Storm water grants and loans may be awarded from the storm water loan revolving fund as funds are available. Eligible applicants must be a municipality, county, public sewer district, public water district, or a combination of the same. Except for subsections (3)(A)–(C), all provisions of this regulation apply to grants and loans made from the storm water loan revolving fund. AUTHORITY: sections 644.026 and 644.570, RSMo 2016.* Original rule filed June 9, 1999, effective March 30, 2000. Emergency amendment filed Feb. 1, 2007, effective March 4, 2007, expired Aug. 30, 2007. Amended: Filed March 14, 2007, effective Oct. 30, 2007. Amended: Filed March 16, 2009, effective Dec. 30, 2009. Amended: Filed June 13, 2018, effective Feb. 28, 2019. *Original authority: 644.026, RSMo 1972, amended 1973, 1987, 1993, 1995, 2000, 2012, 2014 and 644.570, RSMo 1999, amended 2008.