Drinking Water Systems Improvements Revolving Loan Fund Program Regulations DW SRF

STATE OF MISSISSIPPI LOCAL GOVERNMENTS AND RURAL WATER SYSTEMS IMPROVEMENTS BOARD Title 33: Public Health - Local Governments & Rural Water Systems Improvements Board Part 14: Drinking Water Systems Improvements Revolving Loan Fund Program Regulations DW SRF Lead Service Line Replacement Intended Use Plan STATE OF MISSISSIPPI DRINKING WATER SYSTEMS IMPROVEMENTS REVOLVING LOAN FUND PROGRAM BIL LEAD SERVICE LINE REPLACEMENT INTENDED USE PLAN FOR FFY-2022 AMENDED 2026 Approved by the Board 4/24/2026 LOCAL GOVERNMENTS AND RURAL WATER SYSTEMS IMPROVEMENTS BOARD P. O. BOX 1700 SUITE U-232 JACKSON, MISSISSIPPI 39215-1700 (Blank) STATE OF MISSISSIPPI LOCAL GOVERNMENTS AND RURAL WATER SYSTEMS IMPROVEMENTS BOARD Title 33: Public Health - Local Governments & Rural Water Systems Improvements Board Part 14: Drinking Water Systems Improvements Revolving Loan Fund Program Regulations DW SRF Lead Service Line Replacement Intended Use Plan DRINKING WATER SYSTEMS IMPROVEMENTS REVOLVING LOAN FUND BIL LEAD SERVICE LINE REPLACEMENT INTENDED USE PLAN FOR FFY-2022 TABLE OF CONTENTS I. A. B. C. II. GOALS OF MISSISSIPPI’S DRINKING WATER SYSTEMS IMPROVEMENTS A. 1. 2. A. B. 1. 2. C. 1. 2. 3. 4. V. A. B. C. A. 1. 2. 3. C. D. APPENDICES I APPENDIX A FUNDS REPORT ............................................................................................................. II APPENDIX B - PROJECTED SCHEDULE OF OUTLAYS FOR BIL LSLR CAPITALIZATION GRANT SET-ASIDES ............................................................................................................................. III APPENDIX C - PROJECTED PAYMENT (FEDERAL LETTER OF CREDIT) SCHEDULE ..... IV APPENDIX D - PROJECTED SCHEDULE OF DRAWDOWNS AGAINST FEDERAL LETTER OF CREDIT (ACH DRAW SCHEDULE) ............................................................................................. V APPENDIX E – LEAD LINE INVENTORY WORKPLAN ................................................................ VI APPENDIX F - MISSISSIPPI STATE PROGRAM MANAGEMENT SET-ASIDE ANNUAL WORK PLAN VIII APPENDIX H – INFRASTRUCTURE INVESTMENT AND JOBS ACT ......................................... XI Amendment to the FFY-2022 BIL Lead Service Line Replacement Intended Use Plan Since approval of the FFY-2022 Lead Service Line Replacement (LSLR) Intended Use Plan, no projects have advanced to loan execution under the LSLR capitalization grant. The Mississippi State Department of Health (MSDH) has determined that the existing application and priority ranking process described in the FFY-2022 IUP has limited participation in the program, particularly for small and rural water systems seeking assistance with lead service line inventories. To address this issue and facilitate implementation of the FFY-2022 LSLR capitalization grant, the Department is amending this IUP to revise the project application process, expand principal forgiveness incentives for inventory activities, and implement targeted outreach to eligible public water systems. These amendments are intended to support the obligation of available funds and advance the objectives of the Bipartisan Infrastructure Law (BIL) Lead Service Line Replacement program. I. INTRODUCTION A. State of Mississippi’s Drinking Water State Revolving Loan Fund The Safe Drinking Water Act Amendments of 1996 (SDWA) established the national Drinking Water State Revolving Fund (DWSRF) Program. The Bipartisan Infrastructure Law (BIL), also known as the Infrastructure Investment and Jobs Act (IIJA) of 2021, (P.L. 117-8) additionally amended Section 1452 of the SDWA and appropriated funds for Lead Service Line Replacement. This Intended Use Plan identifies the State of Mississippi’s proposed use of Federal Fiscal Year (FFY) 2022 DWSRF Lead Service Line Replacement (LSLR) allotment of $30,518,000. The DWSRF program allows the Environmental Protection Agency (EPA) to make capitalization (Cap) grants to states to, in turn, provide low-cost loans to public water systems to help achieve or maintain compliance with SDWA requirements. Accordingly, the State Legislature (through Section 41-3-16, MS Code of 1972 Annotated) created what is now called the Drinking Water Systems Improvements Revolving Loan Fund (DWSIRLF) Program, to receive the federal DWSRF capitalization grants from EPA, and to provide low-cost loans to the state’s public water systems to finance needed infrastructure improvements. This legislation also allows the DWSIRLF, subject to the authority of State Law, to make loans that may utilize additional subsidization beyond standard DWSIRLF loans as well as setting appropriate criteria to determine eligible recipients. That same legislation created the "Local Governments and Rural Water Systems Improvements Board" (Board), to oversee the administration of the DWSIRLF Program. The Mississippi State Department of Health (Department), as the state’s drinking water primacy agency, supplies the staff and facilities necessary to administer the program. The Board is composed of the following nine (9) members: the State Health Officer, who shall serve as chairman of the Board; the Executive Director of the Mississippi Development Authority; the Executive Director of the Department of Environmental Quality; the Executive Director of the Department of Finance and Administration; the Executive Director of the Mississippi Association of Supervisors; the Executive Director of the Mississippi Municipal League; the Executive Director of the American Council of Engineering Companies; the State Director of the United States Department of Agriculture, Rural Development; and a manager of a rural water system. Each agency director may appoint a designee to serve in his or her place on the Board. The Governor appoints the rural water system manager. In the creation of the Program, it was the intent of the Legislature that the Board endeavor to ensure that the costs of administering the DWSIRLF Program are as low as possible in order to provide the water consumers of Mississippi with safe drinking water at affordable prices. As a condition of receiving the DWSRF Cap grants, the SDWA requires that each state annually prepare an Intended Use Plan (IUP) designed to outline how a state will utilize DWSRF funds to assist in protecting public health. The DWSIRLF BIL LEAD SERVICE LINE REPLACEMENT (LSLR) Fund consists of federal funds. Federal funds are provided to the states in the form of awarded Cap grants. Each state’s allotment of those grants is based on EPA’s Needs Survey that is performed every four years. No State matching funds are required to be deposited into this Fund. B. Program Overview The basic framework under which the DWSIRLF Program operates is established by two documents. The first document is the Drinking Water State Revolving Fund Loan Program Operating Agreement (Operating Agreement) between the Mississippi State Department of Health and the Environmental Protection Agency, Region IV. The current Operating Agreement was agreed to by both parties and approved on March 21, 2022. The Operating Agreement establishes the basic framework of the DWSIRLF that is not expected to change from year-to-year. The second document is the IUP which describes how the State of Mississippi will use the funding received from the EPA Cap grant which is received each year. The original BIL LSLR IUP for FFY-2022 was dated June 29, 2023 and accompanied the Program’s application to EPA for the FFY-2022 LSLR Cap Grant. The amount of the FFY-2022 EPA Cap Grant for the BIL LSLR fund is $30,518,000. The Program intends to apply for set-asides as described in Section V. These funds must be used in the period of July 2023 through June 2026. As a condition of the FFY-2022 Cap Grant the program agrees to comply with DWSRF regulations, the general grant regulations at 40 CFR part 200, and specific conditions of the capitalization grant and to enter data into SRF Data System no less than quarterly. This IUP describes in detail the goals (overall and five-year), the structure, and the financial status of the Program; the role of the set-aside activities within the state; and the distribution of funds toward public water system improvement projects and the criteria used to determine their ranking within the priority system. Those desiring to receive a copy of this document may contact Jonathan Diaz, Program Support Specialist, at (601) 576-7518. C. Public Input, Review, and Comment Procedures To ensure that the public has an ample opportunity to review and comment upon the IUP, the Department and the Board follows the requirements of the “Mississippi Administrative Procedures Law” prior to final submission of the IUP to EPA. A public notice period of at least twenty-five (25) days allows for review and comment before an oral proceeding. After adoption by the Board, a second filing with the Secretary of State’s Office occurs; if no additional comments are received the IUP becomes law 30 days after the second filing. Public notice will be given in The Clarion Ledger, a newspaper of statewide circulation, for written and oral comments on this IUP. An oral proceeding is scheduled for 9:00 a.m. on July 28, 2023. A transcript of the oral proceeding, recording any comments and recommended solutions, will be submitted to the EPA along with the Final IUP. Those desiring to receive a copy of the oral proceeding transcript should contact Jonathan Diaz, Program Support Specialist, at (601) 576-7518. A copy of the “Mississippi Administrative Procedures Law” may be obtained from the Mississippi Secretary of State’s Office and can also be found on the Mississippi State Department of Health’s website at www.healthyms.com/dwsrf. II. Goals of Mississippi’s Drinking Water Systems Improvements Revolving Loan Fund (DWSIRLF) Program – LSLR Fund The LSLR Fund was created by the BIL to provide funding through the DWSIRLF Program for a five-year duration. Overall and Five-Year Goals for the LSLR Fund include: A. Overall Goal: Improve public health by providing funding and technical support to public water systems in Mississippi for the removal of lead materials in drinking water service lines and related activities. B. Five-Year Goals: 1. Improve public health by providing technical support to small (less than 10,000 population) public water systems in Mississippi for the completion of lead service line inventories. This goal can lead into providing capital project funding for the removal of lead service lines identified during these inventories. 2. Provide funding and technical support to public water systems in Mississippi in planning for full, not partial, lead service line replacement. This helps to address the equity challenge that for some property owners, the cost to replace their portion of lead service lines is prohibitively high1. 3. Improve program participation by reducing administrative and technical barriers for public water systems, particularly small and rural systems, seeking assistance for lead service line inventory and replacement activities. 4. Facilitate implementation of lead service line inventory and replacement activities by allowing flexible funding approaches that align with system capacity while maintaining compliance with federal and state requirements. III. Structure of the Mississippi DWSIRLF The Mississippi DWSIRLF BIL LSLR is structured around one fund. The portion of the fund designated for projects will consist of 49% principal forgiveness. The balance of the 1 USEPA, Combined SRF Implementation of BIL Memo, March 8, 2022 project fund will be repaid. This will sustain the Base DWSIRLF program and help it to achieve its respective goals. The funds are broken down further into designated accounts, each having a specific function. A. DWSIRLF BIL LSLR Loan/Operations Fund Monies in the Fund support a majority of the functions of the DWSIRLF LSLR. These functions include program administration, set-aside operations, and most importantly provide disbursements to public water systems for eligible projects. The DWSIRLF LSLR is a reimbursement program, meaning that after the loan is awarded, costs associated with planning, designing, and constructing the project are reimbursed to the recipient. Cap grants from EPA will be deposited into this Fund’s account. 1. Types of Eligible Projects: Lead Service Line Replacement projects and associated activities directly connected to the identification, planning, design, and replacement of lead service lines are eligible for funding by the Program. 100% of lead service lines must be replaced for lead service line projects, including privately and publicly-owned portions of the line. Eligible activities may include lead service line inventory, planning, design, and full replacement of lead service lines. The Department may implement multiple funding approaches for these activities in order to improve participation by public water systems and facilitate completion of program objectives. Public water systems that have identified known lead service lines or galvanized requiring replacement (GRR) through prior reporting shall prioritize projects that include full replacement of those service lines. Inventory activities may be included as part of such projects where necessary to support final project scope and implementation. 100% of the service line replaced is defined by replacing pipes up to the point of premise plumbing. The portion of the service line that is DWSIRLF-eligible (refer to Figure 1) is the entire service line from the public water main to the point at which it connects with premise plumbing. Premise plumbing is defined as piping on the other side of the isolation valve. That connection may be inside or outside of homes and buildings. Note that premise plumbing is not eligible for DWSIRLF funding. The DWSIRLF Program could consider whether reasonable cost for repair to the private-owned structure, if damaged during privately-owned LSL replacement, is eligible for DWSIRLF funding. Source: EPA, Addressing Lead in Drinking Water with the DWSRF, 816-F-18-005, March 2019. 2. Set-aside Accounts: The set-aside accounts reside under the umbrella of the Fund and are distinctly designated by reporting categories. A listing of the set-asides taken by Mississippi includes the following as part of the FFY-2022 IUP: a. Administrative Set-aside: Provides financial support to administer the LSLR loan Program and other non-project-related activities. b. Small System Technical Assistance Set-aside: Provides technical assistance to small water systems. c. State Program Management Set-aside: Provides additional financial support to MSDH – Bureau of Public Water Supply for Public Water System Supervision Program – Lead and Copper Revised Rule. d. Local Assistance and Other State Programs: Provides funding for small systems to inventory their systems in support of identifying potential lead service lines for replacement. IV. Financial Status of the DWSIRLF This section outlines all sources of funding available to the DWSIRLF LSLR Program and indicates intended uses. This section also describes the financial assistance terms available through the Program. A. Source and Use of Funds Using the FFY-2022 BIL LSLR Capitalization Grant allotment for Mississippi of $30,518,000 to provide for both loans and set-aside activities. The “set-asides” use for the FFY-2022 BIL LSLR Cap grant are outlined in Section V of this IUP. Necessary work plans showing utilization of these funds are found in the appendices of this IUP. B. Financial Planning Process In accordance with the goals of the LSLR fund of the DWSIRLF Program, the Board has made the following financial decisions regarding the Fund: 1. Application for the Full Amount of the BIL LSLR Cap Grant The Board intends that the MSDH apply for the full amount of the State LSLR Cap grant allotment under the federal DWSRF, including the set-asides described in Section V below. No State match is required for the FFY-2022 LSLR Cap grant. 2. Interest Rate Determination It is the Board’s decision to offer 0% interest on DWSIRLF loans from the BIL LSLR fund. C. Financial Terms of Loans The following terms will be used for the purpose of making loans to the public water systems within the State of Mississippi. 1. Funding Limit Under state law, the Board has the discretion to set the maximum amount for DWSIRLF loans. For FFY-2022 IUP, the Board has set a maximum loan amount of $5,000,000 per borrower. The Board may allow (on a case-by-case basis if requested by the borrower and the need has been justified) the maximum loan limit to be exceeded by a vote of the Board. Furthermore no more than one loan per borrower will be allowed. At the end of the fiscal year, if funds are available, systems previously receiving an award may obtain an additional award(s) or an increase to a previous award, if no other eligible systems are evident. 2. Interest Rate Terms for BIL LSLR loans will be 0% interest rate, with repayment periods as follows: 1. For Lead Service Line Inventory project loans, a standard five-year repayment term, with the maximum repayment term of 10 years. The reason for the shorter repayment terms is that these projects are not capital projects and do not improve or build a physical asset owned by the water system. 2. For Lead Service Line Replacement project loans, a standard 20-year repayment term. The maximum loan amortization allowable will be 30 years, or 40 years for disadvantaged communities. These maximums may not, however, exceed the design life of the project. Interest will accrue based on the current loan agreement in conjunction with the DWSIRLF Regulations. 3. FFY-2022 BIL LSLR Cap Grant Special Provisions The FFY-2022 BIL LSLR Cap Grant requires 49% subsidization of the BIL LSLR Cap Grant Amount. This subsidization is expected to be in the form of “principal forgiveness”, “negative interest rates,” or a combination of the two. 4. Other Related Issues a. Type of Assistance Provided: The assistance to be provided under the DWSIRLF Program will be loans to public, tax-exempt entities which are authorized under state law to collect, treat, store, and distribute piped water for human consumption; able to enter into a DWSIRLF loan agreement; and have the ability to repay the DWSIRLF loan. With the funds provided through the FFY-2022 BIL LSLR Cap Grant, the DWSIRLF program will be able to make loans that will have an amount of “principal forgiveness.” The amount of principal forgiveness for the BIL LSLR FFY-2022 Cap Grant is 49% of the total Cap Grant. The Board has set a limit of 70% of the requested loan amount which a loan recipient may receive in subsidy for one loan. Once the limit of the appropriation subsidy funds has been reached for the FFY-2022 Cap Grant, loans will return to the DWSIRLF’s standard terms without principal forgiveness. In all cases, loans will be LSLR projects and associated activities directly connected to the identification, planning, design, and replacement of LSLs. b. Project Costs Eligibility: Eligible/allowable project costs will include those costs that are eligible, reasonable, necessary, and allocable to the project, within the established project scope and budget, in conformance with the DWSIRLF regulations and approved by MSDH. c. Loan Participation: DWSIRLF loan participation will be at 100% of eligible project costs, less any funding made available from other agencies for these same eligible project costs. d. Pre-Award Costs: Project costs incurred prior to loan award will be DWSIRLF loan eligible provided: i. The debt is for work that has begun after the DWSIRLF loan award date. ii. The project is in compliance with all applicable DWSIRLF Program regulations and obtains MSDH approval of all applicable documents prior to award of the DWSIRLF loan. iii. The prospective loan recipient agrees that by incurring costs prior to loan award, it proceeds at its own risk and relieves the Board, the Department, and the Department’s staff of all responsibility and liability should such costs later be determined unallowable for any reason or should such funding not become available for any reason. iv. The prospective loan recipient agrees that by incurring costs prior to loan award, no future commitment of funding a refinanced project is provided. e. Priority List: The LSLR Priority List for the FFY-2022 IUP expires on January 2, 2024. Projects listed in the FFY-2022 LSLR Priority List that did not receive funding by this date may be reconsidered for funding through the revised application and selection processes described in this IUP. Because the Priority List expired on January 2, 2024 and no projects have been funded under the FFY-2022 LSLR capitalization grant, the Department may add additional projects to the planning portion of the Priority List through the revised application process described in Section VI.E. Projects identified through this process may be added to the Priority List and funded to ensure the obligation of available funds and achievement of the program objectives. 5. Principal Forgiveness for Lead Service Line Inventory Projects The Department has determined that limited participation in the LSLR program has prevented the obligation of FFY-2022 LSLR funds. To encourage participation by eligible water systems, the Department may prioritize principal forgiveness for lead service line inventory projects. Inventory projects may receive principal forgiveness up to 100 percent of eligible project costs, particularly for small systems and disadvantaged communities, in order to encourage participation in the program and improve the accuracy of lead service line inventories statewide. The Department may implement varying approaches to providing principal forgiveness for inventory activities based on system size, project scope, and program priorities. Principal forgiveness for construction projects involving lead service line replacement will continue to follow the methodology currently outlined in this IUP, with a maximum principal forgiveness of 70 percent of eligible project costs based on the median household income (MHI) of the service area. Public water systems with known lead service lines or galvanized requiring replacement (GRR) are expected to prioritize replacement activities consistent with program requirements. The Department will administer principal forgiveness in a manner that maintains compliance with the federal requirement that at least 49 percent of the capitalization grant be provided as additional subsidy. V. Set-Aside Activities The SDWA allows each state to set-aside up to 31 percent of its federal Cap grant to support non-project-related drinking water programs which includes administration of the loan program, technical assistance to public water systems, state program management, and other special activities. The FFY-2022 LSLR Capitalization Grant amount of $30,518,000, the state plans to use $5,523,060 of the FFY-2022 LSLR Capitalization grant to support set-aside activities, further defined in the following Sections A through D. These non- project-related programs will be operated by MSDH within the agency itself or through contracts with other agencies or organizations. Contracts between the MSDH and other agencies or organizations will be approved by the Board. Work plans showing how the set-asides funds will be expended are included as appendices within this LSLR IUP; additionally, progress reports will be included in the Annual Report. A. Administration The SDWA-DWSRF amendments in the 2017 Water Infrastructure Improvements for the Nation Act (Pub. L. 114-332) (2017 WIIN Act – EPA memorandum dated June 6, 2017) states that the Administrative Set-Asides that can be taken the greatest of: $400,000, 1/5 percent of the current valuation of the fund, or an amount equal to 4 percent of all grant awards to the fund for the fiscal year. The EPA Combined SRF BIL Implementation Memo dated March 8, 2022 states that set-asides for the LSLR Cap Grant are consistent with the DWSRF regulations. The State plans to use the maximum allowable (4%) for "Administrative" purposes from the FFY- 2022 LSLR Cap Grant. The state will continue to exercise its right to reserve the administrative amounts from previous Cap Grants. Reserving previous years’ 4% administrative set-aside can ensure that the Program will continue to operate with an adequate DWSIRLF staff for proper management of the Program. B. Small System Technical Assistance The state will use the Small Systems Technical Assistance (up to 2%) set-aside from the BIL LSLR FFY-2022 Cap Grant to provide funding for LSL inventories to small water systems. With approval by the Board, the state may use this set-aside to support lead service line inventory activities for small systems, including those that require assistance to complete or update inventory information. The Department may implement targeted approaches to assist small systems, including the use of standardized scopes of work, procurement documents, and technical requirements to facilitate completion of lead service line inventories, consistent with applicable state and federal procurement requirements. This assistance will be made available in a manner determined by the Department to best support participation by small and disadvantaged systems, consistent with federal program objectives and program requirements. More detail is provided in the State of Mississippi’s Set-Aside Work Plan included as Appendix E to this IUP. C. State Program Management The state intends to use the full 10% set-aside from the FFY-2022 LSLR Cap grant, as authorized by Section 1452(g) (2) of the Safe Drinking Water Act of 1996 for State Program Management related to LCRR and LSLR. The funds will be used for Public Water System Supervision (PWSS) activities conducted under Section 1443(a) of the Act. However, a work plan for these activities is still being developed. D. Local Assistance and Other State Programs The state intends to use the Local Assistance and Other State Programs set-aside from the FFY-2022 BIL LSLR Cap grant to provide funding for lead service line inventory activities for eligible public water systems. The Department may implement multiple approaches for providing this assistance, including targeted assistance for small systems and broader funding opportunities for other eligible systems. These approaches may include grouping of similar activities where appropriate, use of standardized procurement and contract documents, and varying procurement methods based on project size and scope, consistent with applicable state and federal procurement requirements. Assistance may be provided through contracts, direct support, system-procured services, or other mechanisms determined by the Department to facilitate timely and effective completion of lead service line inventories. Systems that have identified known lead service lines or galvanized requiring replacement (GRR) are expected to pursue projects that include replacement activities, although inventory updates may be included as necessary to support those projects. This assistance will be made available in a manner determined by the Department to best support participation, equitable distribution of funds, and completion of program objectives. The State of Mississippi’s Set-aside Work Plan is included as Appendix E VI. Priority System The SDWA provides the state with the flexibility to determine how to best utilize the LSLR Cap grant. To meet the goals of public water systems in the State of Mississippi and this FFY-2024 LSLR IUP, the Department may utilize multiple approaches to identify and fund eligible projects. Projects which meet the following will be given priority: 1. Address the most serious risk to human health related to lead in service lines and associated activities directly connected to the identification, planning, design and replacement of lead service lines. 2. Assist systems most in need, on a per household basis. A. Funding and Ranking Rationale Projects will be placed on the fundable portion of the Priority List according to both priority ranking and readiness to proceed. The term “ready to proceed” means that all loan application requirements established in the Program regulations are met, and all documents necessary for loan award are approved. If a project cannot reasonably be expected to meet the Priority System deadlines, then the project will not be placed on the current year’s Priority List but will be placed on the Planning List. It is the Board’s judgment with input from the DWSIRLF staff as to when a project is ready to proceed. Loans will be awarded to projects (within available funds) that are above the funding line on the current year’s Priority List, that have met all Priority System deadlines and are ready to proceed. Additionally, when potential loan recipients are deciding on the needs for their public water supplies, they should ensure that all public health and state safe drinking water laws are followed. The Department may implement different evaluation and selection approaches for eligible projects depending on project type, including lead service line inventory activities and lead service line replacement projects. For inventory-focused projects, evaluation may consider factors such as the number of service lines with unknown material, the proportion of unknown service lines within the system, median household income, and readiness to proceed. In evaluating projects, the Department may consider lead service line inventory data available at the time of application or project development, including the number and proportion of service lines with unknown material or identified lead or galvanized requiring replacement. Public water systems that have identified known lead service lines or galvanized requiring replacement (GRR) are expected to pursue projects that include replacement activities. Inventory work for such systems may be included where necessary to support project development and implementation 1. Funding Lists and Bypass Procedure Should any projects on the FFY-2024 LSLR Priority List (which are above the funding line) fail to comply with the deadlines in Section D, the project shall be bypassed, and the funds reserved for said project will be released. Released funds will first be made available to listed projects, to ensure that all projects above the funding line meeting priority system deadlines are funded. Any remaining funds will be made available to the highest-ranking project(s) shown below the funding line that is ready for loan award at the time funds become available. If no projects above the funding line are ready for loan award at the time funds become available, projects shown below the funding line will be funded on a first-come, first-served basis as they become ready for loan award and until the released funds are awarded. This same process will continue as each deadline passes and released funds become available. 2. Loan Decreases Any funds recovered from loan decreases during the year will be used: a) first to fund bid overruns, if funds from the loan increase reserve are not sufficient to cover the bid overruns; b) then to ensure that all projects above the funding line meeting the priority system deadlines are funded (for at least the amount shown on the priority list); and c) then to fund other loans and/or increases on a first-come, first-served basis. Any funds not obligated for these purposes may be made available for new loan awards ready to proceed on a first-come, first-served basis. 3. Subsidization from FFY-2022 LSLR Cap Grant 49% of the FFY-2022 LSLR Cap Grant will be subsidized. Based on the Grant of $30,518,000, the required amount of subsidization is $14,953,820. The DWSIRLF’s subsidization will be in the form of “Principal Forgiveness” (PF) to individual public water supplies that are considered disadvantaged communities, and which received reimbursements with Federal LSLR Cap Grant funds during the lifetime of the project, from loan initiation through loan closeout. If the amount of PF which a project is eligible exceeds the amount of Federal LSLR Cap grant funds which it received, the amount of PF extended will be limited to the amount of Federal Cap grant funds used for reimbursement. Subsidization may be used over a two-year period. Subsidization remaining from a previous year may be awarded to loans which are eligible for PF over a two-year period. Subsidization for FFY-2024 LSLR Priority List projects may be awarded to projects eligible for PF in FFY-2025 and FFY-2026. Disadvantaged Community Program a. DWSRF LSLR Capitalization Grant Funds During FFY-2024, the following Principal Forgiveness (PF) methodology will be used to meet the requirements of the BIL (P.L. 117-8) for providing subsidy for disadvantaged systems. For the LSLR fund, 49% will be subsidized. The FFY-2022 LSLR federal appropriation for the Program is $30,518,000. The principal forgiveness (49%) allowable to eligible borrowers is $14,953,820. The amount of PF for which a potential “Loan Recipient” (LR) may be eligible will be determined by calculating the percentage of the “Median Household Income” (MHI) of the potential LR versus the MHI of the State of Mississippi ($54,915) as a whole. 90% < LR MHI < 100% - 49% Principal Forgiveness 80% < LR MHI < 90% - 56% Principal Forgiveness 70% < LR MHI < 80% - 63% Principal Forgiveness LR MHI < 70% - 70% Principal Forgiveness PF will be extended to projects until all mandated subsidy funds are obligated. Due to the limited amount of PF funds, the maximum amount of PF funds a loan recipient may receive for a project will be 70% of the project budget, which is capped at $5,000,000. The amount of PF given will be assigned at loan award. Once subsidy funds are depleted, only standard loans will be made with DWSIRLF funds. In the event that a LR declines their loan that includes PF, the released PF may be reallocated to other projects for the present fiscal year that are eligible for PF, or the PF may be carried over to projects for the next fiscal year. If returned PF funds are reallocated to projects awarded during the existing fiscal year. The reallocation of PF will be given first to projects which did not receive their full allowable amount based on the above table up to the maximum allowed limit. In all cases, the amount of PF which is awarded to a project may not exceed the amount of Federal Cap grant funds which the project was reimbursed during the construction of the project. B. Priority System Categories DWSRF LSLR Priority System Project Categories applicable to the DWSRF Base/Supplemental IUP that have been eliminated from this LSLR IUP because they are not applicable are Categories I through II and IV through XII. Projects for the LSLR Priority List will be ranked from Categories III through XIII in priority order; that is, all Category III projects are ranked higher than subsequent category projects, etc. Ranking is established in like manner for the remaining categories. Adjustments are made as necessary to comply with the set-aside provisions of the Federal SDWA and as established by the Board [Section 1542(a) (2) of SDWA]. As stated previously, the order of Categories III - XIII is intended to give highest priority to those projects that address the most serious risks to human health. Projects within each category will be ranked as described in Section C. All projects must meet the requirement of the LSLR Cap Grant appropriation; that they are lead service line replacement projects or project activities directly connected to the identification, planning, design, and replacement of lead service; for example, lead service line inventory projects. 100% of lead service lines must be replaced for lead service line projects, including privately and publicly-owned portions of the line. 1. Category III – Primary Drinking Water Standards This category includes projects to facilitate compliance with Primary Drinking Water Standards. To qualify for this category, projects must correct deficiencies resulting in non-compliance with the primary drinking water standards. 2. Category XIII – Other This category includes projects that do not meet the criteria of any other listed category and have been determined LSLR loan eligible in accordance with the DWSIRLF program regulations. C. Priority Ranking Criteria For certain project types, including lead service line inventory projects and projects identified through the revised application process described in Section VI.E, the Department may apply alternative evaluation methods that do not rely solely on the Priority Ranking Criteria described in this section. These alternative methods may consider factors such as the number and proportion of service lines with unknown material, the presence of known lead or galvanized requiring replacement (GRR), system capacity, and readiness to proceed The criteria for ranking projects within each category is intended to give priority to projects that: (1) benefit the most people per dollar expended; (2) assist systems most in need on a per household affordability basis as required by the SDWA; (3) encourage participation in short-term and long-term technical assistance programs; and (4) encourage certifying and providing support for a system’s Asset Management Plan. These considerations are addressed by the Priority Ranking Criteria in the following manner: 1. Benefit/Cost Benefit/Cost points assigned to each project will be determined using the following formula: Benefit/Cost Points = Number of benefiting connections Total eligible cost of improvements (in $1.0 millions) The number of benefiting connections must be included in the facilities plan submitted by the applicant; be defined as the sum of individual connections currently experiencing deficiencies that will be corrected by the improvement; and include only existing residences, businesses, and public buildings. Applicants must furnish information (including hydraulic analysis, if necessary) to support their estimate of the number of benefiting connections. The total eligible cost is in millions of dollars (i.e., $800,000 = $0.8 M). 2. Affordability Factor An affordability factor will be assigned to each project to reflect the relative needs of applicants on a per household basis. The Benefit/Cost points calculated in Section C.1. will be adjusted using the affordability factor in the following formula: Adjusted Benefit/Cost Points = (Affordability Factor) x (Benefit/Cost Points) The affordability factor used in the calculation is defined as the ratio of the “Median Household Income” (MHI) for the State of Mississippi ($54,915) to the MHI for the affected community. The affordability factor used in the calculation will be no less than 1.0 and no greater than 1.5. 3. Participation in Short-Term & Long-Term Assistance Programs The MSDH, with the Board’s approval, has contracted with Mississippi State University Extension Service to provide both short-term and long-term assistance to designated water systems in the state based on their scores on the latest Capacity Assessment Form (CAF). This assistance is provided at no cost to the water systems. Participation by the water systems in these assistance programs is voluntary; however, any water system that has participated in either of these assistance programs within the past two years will be eligible to receive additional priority points equal to 5% of their Adjusted Benefit/Cost Points. Water systems that have implemented all the recommendations made by Mississippi State University Extension Service will receive additional priority points equal to 5% of their Adjusted Benefit/Cost Points for a total of 10%. Documentation of participation in either of these assistance programs and implementation of the recommendations made by Mississippi State University Extension Service must be included in the facilities plan before additional priority points will be granted. Assistance Points = ** x (Adjusted Benefit/Cost Points) ** 5% if the water system participates in the assistance, or 10% if the water system participates in the assistance and implements all recommendations 4. Asset Management Plan Any water system certifying and providing support of their Asset Management Plan’s implementation or maintenance to MSDH will be eligible to receive additional priority points equal to 10% of their Adjusted Benefit/Cost Points. Asset Management Plan = 0.10 x (Adjusted Benefit/Cost Points) 7. Ranking Within Each Category Within each category, projects will be ranked in order based on the total points assigned the project using the following formula: Total Priority Points = Adjusted Benefit/Cost Points + Affordability Points + Assistance Program Points + Asset Management Plan Points Projects receiving the most priority points will be given the highest ranking on the Priority List. In case of a tie in the number of priority points, projects with the lowest median household income will receive the highest ranking. D. Priority System Deadlines 1. Those that have submitted Request for Ranking: by January 2, 2024, a complete DWSIRLF facilities plan, prepared in accordance with the DWSIRLF loan program regulations, must be submitted to MSDH. A complete DWSIRLF facilities plan includes: all Intergovernmental Review (IGR) agency comments; proof of publication of advertisement for public hearing; a transcript of the public hearing comments; copies of any comments received from the public; and a summary of how each comment was addressed. The loan applicant should provide a copy of the facilities plan to USDA - Rural Utilities Service (RUS); if the loan applicant has an existing debt with RUS, their approval to incur the additional debt must be obtained and provided as part of the plan. Any significant changes made to the facilities plan (i.e., changes in the chosen alternative location of the facility, cost increases that substantially affect the financial capability of the loan recipient) after this date will be considered a first submittal of the facilities plan. The loan applicant will then be in violation of the Priority System deadline and the project will be placed on the planning portion of the priority list. If the change is made after adoption of the IUP, funds reserved for this project may be released and made available to other projects. 2. By May 1, 2024, a completed DWSIRLF loan application and all associated documents as described in the DWSIRLF regulations must be submitted to the Department. Prior to preparing these documents, the potential applicant and/or its registered engineer must request and receive a DWSIRLF application and guidance. It is recommended that they request a pre-application conference with DWSIRLF staff as early in the application process as practical. This deadline also applies to all projects competing for released funds during FFY-2024 and to be able to qualify for the Previous Year Certified Projects Category in the FFY-2024 IUP. 3. By August 1, 2024, all approvable documents and responses to comments necessary for loan award must be submitted to the Department for its review and approval. E. Revised Application Process for LSLR Projects Since approval of the FFY-2022 LSLR Intended Use Plan, no projects have advanced to loan execution under the existing Priority System. The Department has determined that the standard DWSIRLF facilities plan and loan application process has limited participation in lead service line inventory and replacement activities, particularly for small and rural water systems. To address this issue and facilitate implementation of the FFY-2022 LSLR capitalization grant, the Department may implement a revised application process for LSLR projects. For lead service line inventory projects, the Department may waive or modify certain application requirements, including the submission of a full facilities plan, where appropriate. Applications may be submitted through an alternative or simplified process developed by the Department. Inventory project applications may be evaluated based on factors including the number of service lines with unknown material, the proportion of unknown service lines, median household income, and readiness to proceed. Public water systems that have identified known lead service lines or galvanized requiring replacement (GRR) are expected to pursue projects that include replacement activities. Inventory updates may be included as part of such projects where necessary. Projects funded through this process must meet all eligibility requirements established by the Safe Drinking Water Act and the Bipartisan Infrastructure Law. VII. FFY-2022 LSLR PRIORITY LIST Implementation of Priority List: The FFY-2022 LSLR Priority List remains part of this Intended Use Plan. However, due to limited participation under the original application and ranking process, the Department may utilize revised application and funding approaches as described in this IUP to identify and fund additional eligible projects. Projects not included on the original Priority List may be added to the planning portion of the Priority List and funded, as necessary, to support program implementation and achieve the objectives of the FFY-2022 LSLR capitalization grant, in accordance with applicable state and federal requirements. Fiscal Year - 2022 Mississippi Drinking Water Systems Improvements Revolving Loan Fund Program Priority List – BIL Lead Service Line Replacement Project Project Description Zip Code Priority Points Service Area Population Eligible PF Amount Loan Amount Request Statewide Cum. $ Category XIII: Other Waveland, City of Survey and Identify Lead Service Lines 39576 26250 $90,000 $200,000 $200,000 Bay St. Louis, City of Survey and Identify Lead Service Lines 39520 12316 $37,500 $250,000 $450,000 Kiln Utility and Fire District Survey and Identify Lead Service Lines 39556 $22,500 $150,000 $600,000 FMH Water Assoc. Surveying & Inventory of Lead Service Lines 38756 $72,000 $160,000 $760,000 Lorman Waterworks Assoc. Surveying & Inventory of Lead Service Lines 39096 $56,250 $125,000 $885,000 CS&I Water Assoc. Surveying & Inventory of Lead Service Lines 39150 $24,750 $55,000 $940,000 McNair-Stampley Waterworks Surveying & Inventory of Lead Service Lines 39069 $72,000 $160,000 $1,100,000 Renshaw Water Assoc. Surveying & Inventory of Lead Service Lines 39194 $11,700 $26,000 $1,126,000 Ebenezer Water Assoc. Surveying & Inventory of Lead Service Lines 39095 $18,000 $40,000 $1,166,000 South Holmes Water Assoc. Surveying & Inventory of Lead Service Lines 39146 $29,250 $65,000 $1,231,000 South Sunflower Water Assoc. Surveying and Inventorying Lead Service Line 38753 $31,500 $70,000 $1,301,000 Hermanville Community Water Surveying & Inventory of Lead Service Lines 39086 $31,500 $70,000 $1,371,000 Midway Community Water Surveying & Inventory of Lead Service Lines 39039 $56,250 $0 $1,496,000 Romola Water Assoc. Surveying & Inventory of Lead Service Lines 39150 $18,000 $40,000 $1,536,000 Pilgrim Rest Water Assoc. Surveying & Inventory of Lead Service Lines 39232 $11,250 $25,000 $1,561,000 Project Project Description Zip Code Priority Points Service Area Population Eligible PF Amount Loan Amount Request Statewide Cum. $ Category XIII: Other Greenville, City of Replacement of Lead Service Lines 38701 30000 $500,000 $2,266,275 $3,827,275 Acona Water Assoc. Surveying & Inventory of Lead Service Lines 39095 $45,000 $100,000 $3,927,275 Pearl, City of Surveying & Inventory of Lead Service Lines 39288 $0 $1,500,000 $5,427,275 Natchez Waterworks Surveying & Inventory of Lead Service Lines 39120 $500,000 $1,350,000 $6,777,275 Copiah Water Assoc. Surveying & Inventory of Lead Service Lines 39083 $131,250 $375,000 $7,152,275 Union Church Waterworks Assoc. Surveying & Inventory of Lead Service Lines 39668 $36,000 $0 $7,232,275 Double Ponds Water Assoc. Surveying & Inventory of Lead Service Lines 39474 $72,000 $160,000 $7,392,275 Black Bayou Water Assoc. Surveying & Inventory of Lead Service Lines 38756 $191,250 $425,000 $7,817,275 L&F Water Assoc. Surveying & Inventory of Lead Service Lines 39117 $40,500 $90,000 $7,907,275 ACL Water Assoc. Surveying & Inventory of Lead Service Lines 39145 $0 $160,000 $8,067,275 North Hinds Water Assoc. Surveying & Inventory of Lead Service Lines 39071 $0 $500,000 $8,567,275 Central Yazoo Water Assoc. Surveying & Inventory of Lead Service Lines 39194 $148,750 $425,000 $8,992,275 Southeast Rankin Water Assoc. Surveying and Inventorying Lead Service Line 39051 $0 $250,000 $9,242,275 Providence Water Assoc. Surveying & Inventory of Lead Service Lines 39090 $45,500 $130,000 $9,372,275 Evergreen Water Assoc. Surveying & Inventory of Lead Service Lines 39043 $0 $175,000 $9,547,275 Taylorsville Water Assoc. Surveying and Inventorying Lead Service Line 39043 $0 $100,000 $9,647,275 Eagle Lake Water District Surveying & Inventory of Lead Service Lines 39812 $35,000 $100,000 $9,747,275 C & C Water Assoc. Surveying & Inventory of Lead Service Lines 39094 $35,000 $100,000 $9,847,275 Hwy 28 Water Assoc. Surveying & Inventory of Lead Service Lines 39111 $31,500 $90,000 $9,937,275 H&H Water Assoc. Surveying & Inventory of Lead Service Lines 39080 $61,250 $175,000 $10,112,275 East Madison Water Assoc. Surveying & Inventory of Lead Service Lines 39046 $157,500 $450,000 $10,562,275 Taylorsville, Town of Surveying and Inventorying Lead Service Line 39168 $43,750 $125,000 $10,687,275 Port Gibson, Town of Survey & Inventory Lead Service Lines 39150 $135,414 $300,920 $10,988,195 Pisgah Water Assoc. Surveying & Inventory of Lead Service Lines 39161 $0 $150,000 $11,138,195 Willow Grove Water Assoc. Surveying and Inventorying Lead Service Line 39428 $31,250 $125,000 $11,263,195 Topisaw Creek Water Assoc. Surveying and Inventorying Lead Service Line 39662 $41,250 $275,000 $11,538,195 Southern Rankin Water Assoc. Surveying and Inventorying Lead Service Line 39073 $52,500 $210,000 $11,748,195 Mize, Town of Surveying & Inventory of Lead Service Lines 39116 $14,000 $40,000 $11,788,195 Lake City Water Assoc. Surveying & Inventory of Lead Service Lines 39071 $31,250 $125,000 $11,913,195 Yokena Jeff Davis Surveying and Inventorying Lead Service Line 39180 $35,000 $140,000 $12,053,195 Project Project Description Zip Code Priority Points Service Area Population Eligible PF Amount Loan Amount Request Statewide Cum. $ Category XIII: Other Union Water Assoc. Surveying and Inventorying Lead Service Line 39151 $600 $40,000 $12,093,195 Star Water Company Surveying and Inventorying Lead Service Line 39167 $0 $75,000 $12,168,195 Sylvarena Water Assoc. Surveying and Inventorying Lead Service Line 39153 $17,500 $50,000 $12,218,195 Braxton, Town of Surveying & Inventory of Lead Service Lines 39044 $22,500 $50,000 $12,268,195 Goshen Water Assoc. Surveying & Inventory of Lead Service Lines 39051 $0 $25,000 $12,293,195 Vicksburg, City of Survey & Inventory Lead Service Lines 38701 29238 $190,895 $2,483,640 $14,776,835 Puckett, Town of Surveying & Inventory of Lead Service Lines 39151 $12,500 $50,000 $14,826,835 Winterville Water Assoc. Surveying and Inventorying Lead Service Line 38703 $11,250 $25,000 $14,851,835 Senatobia Lakes Estates Surveying & Inventory of Lead Service Lines 38668 $8,750 $25,000 $14,876,835 Bay Springs, Town of Surveying & Inventory of Lead Service Lines 39422 $450,000 $1,000,000 $15,876,835 Wiggins, City of Inventory Lead Service Lines 39577 $250,000 $1,000,000 $16,876,835 Clarkdale Water Assoc. Replacement of Lead Service Lines 39301 $500,000 $2,066,000 $18,942,835 Harland Creek Water Assoc. Replacement of Lead Service Lines 39095 $500,000 $2,484,300 $21,427,135 Jackson, City of Replacement of Lead Service Lines 39216 150000 $500,000 $5,000,000 $26,427,135 Mount Olive, Town of Surveying and Inventorying Lead Service Lines 39119 $450,000 $1,000,000 $27,427,135 Fayette, City of Surveying & Inventory of Lead Service Lines 39069 $56,250 $125,000 $27,552,135 Collins, City of Surveying and Inventorying Lead Service Lines 39428 $175,000 $500,000 $28,052,135 VIII. EXPECTED PUBLIC HEALTH OUTCOMES & PERFORMANCE MEASURES The objective of this program is to disperse all available loan and grant funds in a timely manner to achieve the public health protection benefits resulting from the projects identified in the FFY-2022 LSLR IUP, and to ensure compliance with loan agreements, as required by state and federal laws and regulations. Because no projects have yet been funded under the FFY-2022 LSLR capitalization grant, the Department will track additional performance indicators to evaluate program implementation. These measures include: • number of public water systems applying for lead service line inventory funding • number of assistance agreements executed for LSLR projects • amount of FFY-2022 LSLR funds obligated • number of service lines with unknown material identified and/or resolved through inventory activities • number of lead service lines and galvanized requiring replacement (GRR) addressed through funded projects The success of the DWSIRLF Program will be defined by the ability of the MSDH to successfully meet commitments in the FFY-2022 LSLR IUP and Set-Aside Work Plan. Additionally, the majority of the projects as proposed should have minimal impact on the environment due to the nature of their design. Where necessary, appropriate environmental reviews will occur and proper permitting through the Mississippi Department of Environmental Quality will be required to ensure minimal impact on the environment. APPENDICES APPENDIX A DRINKING WATER SYSTEMS IMPROVEMENTS REVOLVING LOAN FUND PROGRAM - LEAD LINE REPLACEMENT ANTICIPATED FUNDS REPORT - June 1, 2023 FFY-2022 Funding (Federal and State) National Title I DWSRF Appropriation - Mississippi's Allotment + $30,518,000 State Match Required (20% of Mississippi's Allotment) + $0 2022 Capitalization Grant for BIL LSLR = $30,518,000 State Match Status State Match Required + $0 2023 Legislated State Match - $0 Remaining State Match Required = $0 2022 Cap Grant Set-Asides DWSRF Administration [SDWA Sec. 1452(g)(2) - either $400,000, 1/5 % of the fund's current valuation, or up to 4% of the award] + $135,000 Small Systems Technical Assistance [SDWA Sec. 1452(g)(2) - 2%] + $610,360 Local Assistance and Other State Program [SDWA Sec. 1452(k)(2) - 15%] + $4,577,700 State Program Management [SDWA Sec. 1452(g)(2) -10%] + $0 Total 2022 Cap Grant Set-Asides = $5,323,060 2022 Cap Grant Funds Available for Loan Obligation 2022 DWSRF Capitalization & BIL Supplemental Grants + $30,518,000 2022 Cap Grant Set-asides - ($5,323,060) Total Cap Grant Funds Available for Loan Obligation = $25,194,940 Funds Anticipated to be Available for Loan Awards Cap Grant Federal and State Funds Anticipated to be Available for Loan Obligation + $25,194,940. Unobligated Funds Carried Over + $0.00 Loan Increase Reserve - $0.00 Total Funds Anticipated to be Available for Loan Awards = $25,194,940 Funds Needed for Projects on the FFY-2022 Priority List & FFY-2023 & After Planning List Funds Needed for Projects on the Priority List and FFY-2023 & After Planning List + $28,052,135 Funds Anticipated to be Available for Loan Awards - ($25,194,940) Total Fund Need Remaining for Projects on the Priority List and FFY-2023 & After Planning List = $2,857,195 APPENDIX B - PROJECTED SCHEDULE OF OUTLAYS FOR BIL LSLR CAPITALIZATION GRANT SET-ASIDES FFY 2024 BIL LSLR Cap Grant Federal Set-Asides FFY 2024 Q1 FFY 2024 Q2 FFY 2024 Q3 FFY 2024 Q4 Totals Administrative $33,750 $33,750 $33,750 $33,750 $135,000 Small System Tech Assist. $152,590 $152,590 $152,590 $152,590 $610,360 State Program Management. $1,144,425 $1,144,425 $1,144,425 $1,144,425 $4,577,700 Local Asst. & Other St. Programs $0 $0 $0 $0 $0 Total: $1,330,765 $1,330,765 $1,330,765 $1,330,765 $5,323,060 Appendix C - Projected Payment (Federal Letter of Credit) Schedule (Schedule of Increases to ACH Ceiling) FFY-2024 FFY-2022 Cap Grant No. 1 of 4 1st Quarter FFY-2024 $7,629,500 $7,629,500 FFY-2022 Cap Grant No. 2 of 4 2nd Quarter FFY-2024 $7,629,500 $15,259,000 FFY-2022 Cap Grant No. 3 of 4 3rd Quarter FFY-2024 $7,629,500 $22,888,500 FFY-2022 Cap Grant No. 4 of 4 4th Quarter FFY-2024 $7,629,500 $30,518,000 APPENDIX D - PROJECTED SCHEDULE OF DRAWDOWNS AGAINST FEDERAL LETTER OF CREDIT (ACH DRAW SCHEDULE) FFY-2024 Outlay Quarter Federal Outlay Amount Cumulative Outlay Amount 1st Quarter $7,629,500 $7,629,500 2nd Quarter $7,629,500 $15,259,000 3rd Quarter $7,629,500 $22,888,500 4th Quarter $7,629,500 $30,518,000 APPENDIX E – Lead ServiceLine Inventory Workplan INTRODUCTION The Mississippi State Department of Health (MSDH), Bureau of Public Water Supply (Department), will use the Small System Technical Assistance Set-Aside & Local Assistance and Other State Programs Set-aside of the DWSRF LSLR in a Lead Service Line Inventory Program. The program will be surveying the State’s drinking water system to identify, plan, and assist water systems in inventorying their service line to identify lead service lines for replacement projects. SELECTION PROCESS The contract for coordination of the program will run on a State Fiscal Year Basis. A contract is currently being developed in accordance with State contracting requirements. A Request for Qualifications will be advertised statewide. Qualifications received will be reviewed by the Department to select the best qualified candidate for the agency. Recommendations for award of a contract will be presented to the Board at their regularly scheduled Board meeting; following authorization by the Board, the coordination contract will be awarded. PROGRAM ACTIVITIES The state will use the Small Systems Technical Assistance and Local Assistance and Other State Programs set-asides from the BIL LSLR FFY-2022 Cap Grant to support lead service line inventory activities for eligible public water systems. The Department may implement multiple approaches to deliver inventory services based on system needs, project scope, and program priorities. These approaches may include the use of Department-procured contracts, system-procured services, or other delivery methods determined appropriate by the Department. To facilitate efficient implementation, the Department may develop standardized scopes of work, technical requirements, procurement documents, and reporting formats for use by participating systems and contractors, consistent with applicable state and federal procurement requirements. The Department may group similar inventory activities into project packages where appropriate to improve efficiency and cost-effectiveness. Project packages may vary in size and complexity depending on system characteristics and inventory needs. Funding levels for inventory activities may be developed using planning-level estimates, including per-connection or per-meter cost assumptions, with final funding based on eligible costs and procurement results. Systems that have identified known lead service lines or galvanized requiring replacement (GRR) are expected to pursue projects that include replacement activities. Inventory updates may be included as necessary to support development and implementation of those projects. The activities described herein will be accomplished through a structured process that may include identification of eligible systems, coordination with public water systems, development of inventory plans, execution of field activities, and submission of required data and reporting consistent with program requirements. Identification – The contractor will survey our priority list and/or communication with the Program’s Project Management Staff or the Department’s Regional Engineers while identifying the proper set-aside category to fund the potential inventory. Communication – Staff from the contractor will meet with system officials to inform them of the program, explain what Lead Line Inventories looks like for their system, and encourage them to take advantage of funding through our program. Mobilization – Once the communication phase has been completed and the system request to move forward, staff of the contractor will mobilize to the selected site and commence with the plan and inventory of the System’s service lines. Acceptable methods of inventory will be determined and outlined by the Department to the contractor. Confirmation – Staff of the contractor will provide the Program’s Project Management staff with results and recommendations for a Lead Service Line Replacement Project. SCHEDULE FOR COMPLETING ACTIVITIES The schedule for completing Lead Line Inventory Program activities under this work plan will be the schedule established by set contractual dates. AGENCY RESPONSIBILITIES The Program will be monitoring contractors throughout the process to ensure effective completion of contractual assignments. EVALUATION PROCESS TO ASSESS THE SUCCESS OF SET-ASIDE ACTIVITIES The success of these set-asides will be defined by the ability of the MSDH through the solicited contractor(s) to identify, plan, and assist water systems in Lead Line Inventories that lead to Lead Line Replacement Projects to create safer drinking water for all consumers of Mississippi’s drinking water. APPENDIX F - MISSISSIPPI STATE PROGRAM MANAGEMENT SET-ASIDE ANNUAL WORK PLAN Section 1452(g)(2) - Safe Drinking Water Act Amendments of 1996 In Development Appendix G - Certifications In addition to the ten (10) assurances included below, the state acknowledges that there are six (6) additional assurances that the state has agreed to in either the Operating Agreement between the State and EPA Region IV or the annual capitalization grants. These two documents are hereby incorporated into this IUP by reference. 1. The state certifies that all drinking water facility projects in this IUP identified in Section VII as being subject to the federal cross-cutting requirements are or will be in compliance with all such requirements prior to the state entering into an assistance agreement with the recipient. 2. The state certifies that it will make an annual report to the Regional Administrator on the actual uses of the funds and how the state has met the goals and objectives for the previous two fiscal years as identified in the IUPs; and to annually have conducted an independent audit of the funds to be conducted in accordance with generally accepted government accounting standards. 3. The state certifies that this IUP will be subjected to public review and comment prior to final submission to EPA. The state certifies that it will follow the “Mississippi Administrative Procedures Law” in seeking public review and comments on this IUP. A copy of the “Mississippi Administrative Procedures Law” can be obtained from the Mississippi Secretary of State’s Office and can be found on the Mississippi State Department of Health’s website at www.healthyms.com/dwsrf. An oral proceeding will be held to receive written and oral comments on this IUP. A transcript of the public hearing recording the comments and recommended solutions will be submitted to EPA along with the Final IUP. Anyone desiring to receive a copy of the oral proceeding transcript should contact Jonathan Diaz, Program Support Specialist, at (601) 576-7518 to request copies. 4. The state certifies that all drinking water facility projects in this IUP are on the project Priority List developed pursuant to the requirements of Section 1452(b)(3)(B), SDWA. 5. The state certifies that it will enter into binding commitments for 120% of the amount of each payment (LOC) under the capitalization grant within one year after receipt of each payment (LOC). 6. The state certifies that it will commit and expend all Drinking Water Systems Improvements Revolving Loan Fund (DWSIRLF) Program monies as efficiently as possible, and to disburse the funds in a timely and expeditious manner. 7. The state certifies that it will conduct environmental reviews on all DWSIRLF cross- cutter equivalency projects in accordance with the State Environmental Review Process (SERP). 8. The state certifies that prior to adding any new projects to the “FFY-2022 and After Planning List” for the purpose of funding such a project during FFY-2022 that the state will follow the “Mississippi Administrative Procedures Law” in amending this IUP to allow for public review and comments. 9. The state certifies that it has developed and implemented a Capacity Development (CD) strategy to assist public water systems in acquiring and maintaining technical, managerial, and financial capacity as required in Section 1420(c) of the 1996 Amendments to the SDWA. This CD program is currently approved by EPA. 10. The state certifies the State’s Operator Certification Program is currently approved by EPA. APPENDIX H – INFRASTRUCTURE INVESTMENT AND JOBS ACT Sections of the Infrastructure Investment and Jobs Act (H.R. 3684) that impact the Drinking Water SRFs: I. Funding The bill appropriates $30.713 billion for the Drinking Water State Revolving Funds (SRFs) over five years. (This is actual funding.) (See Division J – Appropriations, Title VI Department of Interior, Environment and Related Agencies, State and Tribal Assistance Grants: Starts on page 2,565 of the bill.) II. Reauthorization & Policy The bill includes The Drinking Water and Wastewater Infrastructure Act (S. 914) which reauthorizes funding levels for the SRFs and amends SRF provisions in the Clean Water Act and the Safe Drinking Water Act. (See Division E – Drinking Water and Wastewater Infrastructure: Starts with Section 50001 on page 1,887 of the bill.) III. Buy America / Buy American The bill expands domestic preference procurement provisions for programs across government, including the SRFs. (See Division G – Other Authorizations, Title IX Build America, Buy America: Starts with 70901 on page 2,303 of the bill.) I. Funding The bill provides three pots of funding for SRFs over the next five years: • Any Eligible Project: o $11,713,000,000 for the Drinking Water SRF for any eligible project. • Lead Remediation: o $15 billion for the Drinking Water SRF for lead service line replacement, including planning, identification, and design (includes inventories). • Emerging Contaminants Remediation: o $4 billion for remediation of emerging contaminants with a focus on PFAS/PFOA for the Drinking Water SRF. Key points for this supplemental appropriation: • Funding is intended to be in addition to annual appropriations. • Funding is available “until expended.” • State match is not required for appropriations dedicated to lead service line replacement and remediation of emerging contaminants. • State match is 10% for 2022-2023 and 20% for 2024-2026 for appropriations for any eligible project. • 100% of the capitalization grant for emerging contaminants must be used for additional subsidy. A flat 49% of the annual capitalization grant for any eligible project and lead service line replacement must be used for additional subsidy. • Additional subsidy must be provided in the form of assistance agreements with 100% principal forgiveness or grants. Year Drinking Water SRF Any Eligible Project State Match Mandated Additional Subsidy $1,902,000,000 10% 49% $2,202,000,000 10% 49% $2,403,000,000 20% 49% $2,603,000,000 20% 49% $2,603,000,000 20% 49% Total $11,713,000,000 Year Drinking Water SRF Emerging Contaminants State Match Mandated Additional Subsidy $800,000,000 0% 100% $800,000,000 0% 100% $800,000,000 0% 100% $800,000,000 0% 100% $800,000,000 0% 100% Total $4,000,000,000 Year Drinking Water SRF Lead State Match Mandated Additional Subsidy $3,000,000,000 0% 49% $3,000,000,000 0% 49% $3,000,000,000 0% 49% $3,000,000,000 0% 49% $3,000,000,000 0% 49% Total $15,000,000,000 Total $30,713,000,000 II. Reauthorization & Policy The bill includes The Drinking Water and Wastewater Infrastructure Act of 2021 (S. 914) which passed the U.S. Senate on Thursday, April 29, by a vote of 89 – 2 (9 not voting). The bill contained the following provisions. (Policy provisions apply to annual appropriations, not supplemental appropriations in the bill.) Funding • Reauthorizes Drinking Water SRFs at the same levels for the next five years: o 2022: $2.4 billion o 2023: $2.75 billion o 2024: $3 billion o 2025 and 2026: $3.25 billion • Reauthorizes SWIFIA: $5 million annually for the next five years, 2022 through 2026. Additional Subsidy • Defines additional subsidization as “forgiveness of principal, grants, negative interest loans, other loan forgiveness, and through buying, refinancing, or restructuring debt” for both SRFs and excludes loans with 0% or higher interest are not additional from being considered additional subsidy. • Mandates minimum additional subsidy for as long as there are eligible applications: o Drinking Water SRFs: Increases additional subsidy from 6% to 12% of the capitalization grant for additional subsidy for disadvantaged communities. III. Buy America / Buy American The legislation also expands domestic preference procurement requirements for SRF projects from American Iron and Steel to construction materials and manufactured products.