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DEPARTMENT OF ENVIRONMENTAL QUALITY
DIVISION 81
STATE FINANCIAL ASSISTANCE TO PUBLIC AGENCIES FOR WATER POLLUTION CONTROL FACILITIES
340-081-0005
Purpose
The purpose of these rules is to prescribe procedures and requirements for obtaining state financial assistance for the construction of water pollution control facilities pursuant to Article XI-H of the Oregon Constitution and ORS 468.195 et seq.
Stat. Auth.: ORS 468
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 25, f. & ef. 2-11-71; DEQ 30-1981, f. & ef. 10-19-81; DEQ 2-1983, f. & ef. 3-11-83
340-081-0010
Definitions
As used in these rules, unless otherwise required by context:
(1) "Commission" means the Environmental Quality Commission.
(2) "Department" means the Department of Environmental Quality. Department actions shall be taken by the Director as defined herein.
(3) "Director" means the Director of the Department of Environmental Quality as defined in ORS 468.040 and 468.045.
(4) "Loan" means any advance of funds from the Pollution Control Fund to a public agency pursuant to a signed agreement wherein the public agency obligates itself to repay the funds received in full together with accumulated interest in accordance with a schedule to be set forth in the agreement.
(5) "Public Agency" means a municipal corporation, city, county, or agency of the State of Oregon, or combinations thereof, applying or contracting for state financial assistance under these rules.
(6) "Sewerage Facilities" means facilities for the collection, conveyance, treatment, and ultimate disposal of sewage and includes collective sewers installed in public right-of-way, interceptor sewers, pumping stations and force mains, treatment works, outfall sewers, land treatment and disposal systems, sludge treatment, conditioning and disposal facilities, projects necessary to remove inflow and infiltration from sewer systems, and such other appurtenances as may be necessary to achieve an operable system for sewage treatment and disposal.
Stat. Auth.: ORS 468
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 25, f. & ef. 2-11-71; DEQ 30-1981, f. & ef. 10-19-81; DEQ 2-1983, f. & ef. 3-11-83
Water Pollution Control Facilities
340-081-0015
Eligible Projects
Projects eligible to receive financial assistance under these rules shall be:
(1) Sewerage facilities as defined in OAR 340-081-0010 unless otherwise provided by law; and
(2) Self supporting and self liquidating from revenues, gifts, grants from the federal government, user charges, assessments, and other fees.
Stat. Auth.: ORS 468
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 25, f. & ef. 2-11-71; DEQ 30-1981, f. & ef. 10-19-81; DEQ 2-1983, f. & ef. 3-11-83
340-081-0020
Eligible Costs
Costs for planning, design, implementation, construction, essential land acquisition, financing and loan issuance costs, and related fiscal and legal costs may be included as eligible costs for projects receiving financial assistance unless otherwise provided by law. Costs shall be limited to those reasonable and necessary to complete an operable facility that will serve the projected population during the design life of the facility, consistent with the applicable Land Use Plan.
Stat. Auth.: ORS 468.195 - ORS 468.220
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 25, f. & ef. 2-11-71; DEQ 30-1981, f. & ef. 10-19-81; DEQ 19-1982(Temp), f. & ef. 9-2-82; DEQ 2-1983, f. & ef. 3-11-83; DEQ 37-1990(Temp), f. & cert. ef. 8-29-90; DEQ 3-1991, f. & cert. ef. 2-15-91
340-081-0026
Nature and Limitations of Financial Assistance
(1) Unless otherwise approved by the Legislature, Legislative Ways and Means Committee or Legislative Emergency Board, financial assistance shall be limited to loans.
(2) Loans secured by means other than sale of General Obligation Bonds by the public agency shall be subject to approval by the Environmental Quality Commission.
(3) Loans shall not exceed 100 percent of the eligible project cost. In the event the project receives grant or loan assistance from any other sources, the total of such assistance and any loan provided from the Pollution Control Fund shall not exceed 100 percent of eligible costs.
(4) The loan interest rate paid by the public agency shall be equal to the interest rate on the state bonds from which the loan is made, except as provided in sections (5) and (6) of this rule.
(5) The Department shall charge fees, purchase loans at a discount, or add to the rate of interest otherwise to be charged on loans a surcharge, in an amount reasonably calculated to permit the Department to recover its costs in issuing General Obligation Bonds to fund the loans, and its costs in acquiring the loans and administering the loans and the Pollution Control Fund.
(6) The public agency must retire its debt obligation to the state at least as rapidly as the state bonds from which the loan funds are derived are to be retired; except that special debt service requirements on the public agency's loan may be established by the Department when:
(a) A debt requirement schedule longer than the state's bond repayment schedule is legally required; or
(b) Other special circumstances are present.
(7) Interest and principal payments shall be due at least thirty days prior to the interest and principal payment dates established for the state bonds from which the loan is advanced.
(8) Any excess loan funds held by the public agency following completion of the project for which funds are advanced shall be used for prepayment of loan principal and interest.
Stat. Auth.: ORS 468.195 - ORS 468.220
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 2-1983, f. & ef. 3-11-83; DEQ 37-1990(Temp), f. & cert. ef. 8-29-90; DEQ 3-1991, f. & cert. ef. 2-15-91
340-081-0031
Preliminary Request for Financial Assistance
(1) Public agencies desiring to receive financial assistance from the Department shall file a preliminary application. This application will set forth:
(a) A description of the project for which funding assistance is desired;
(b) A description of the pollution control problem that the project will assist in resolving;
(c) The estimated cost of the project;
(d) The schedule for the project including the schedule for a bond election if one is necessary;
(e) The funding sources for the project;
(f) The method for securing the loan being requested from the Department;
(g) Such other information as the Department deems necessary.
(2) Preliminary applications may be filed with the Department at any time.
(3) The Department may give notice of intent to receive preliminary applications by a date certain in order to prepare a priority list if such lists becomes necessary to allocate anticipated available funds.
(4) This section shall not apply to financial assistance which the Department provides pursuant to a long-term, written agreement with a public agency.
Stat. Auth.: ORS 468.195 - ORS 468.220
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 2-1983, f. & ef. 3-11-83; DEQ 37-1990(Temp), f. & cert. ef. 8-29-90; DEQ 3-1991, f. & cert. ef. 2-15-91
340-081-0036
Prioritization of Preliminary Applications
(1) If it appears that the potential requests for financial assistance may exceed the funds available, the Department shall notify potential applicants of the deadline for submitting preliminary applications to receive consideration in the prioritization process. Such prioritization will generally occur no more frequently than once per year. To the extent possible, the prioritization process will be completed in February in order to mesh with local budget processes and facilitate project initiation during favorable construction weather.
(2) The process for prioritization shall be as follows:
(a) Each project shall be assigned points based on the schedule contained in OAR 340-081-0041;
(b) Projects shall be ranked by point total from highest to lowest with the project receiving the highest points being the highest priority for funding assistance. A fundable list shall then be established based on available funds;
(c) The Department shall notify each public agency within the fundable range on the list and forward a draft loan agreement for review, completion, and execution;
(d) If the loan agreement is not completed, executed, and returned to the Department within 60 days of notification, the public agency's priority position for funding assistance during that year shall be forfeited, and the funds made available in order of priority to projects below the fundable line on the list. The 60-day time limit may be extended by the Department upon request of the applicant with a demonstration of need to complete required legal and administrative processes.
(3) If funds remain after all qualifying applications on the list are funded, the Department may fund new requests from qualifying applicants on a first-come, first-serve basis.
(4) This section shall not apply to financial assistance which the Department provides pursuant to a long-term, written agreement with a public agency.
Stat. Auth.: ORS 468.195 - ORS 468.220
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 2-1983, f. & ef. 3-11-83; DEQ 37-1990(Temp), f. & cert. ef. 8-29-90; DEQ 3-1991, f. & cert. ef. 2-15-91
340-081-0041
Priority Point Schedule
The priority points for each project shall be the total of the points assigned as follows:
(1) Water pollution control regulatory emphasis -- priority points will be the point value for regulatory emphasis as set forth in OAR 340-053-0015 (Table 1).
(2) Sewerage Facility Costs -- priority points will be calculated by totaling the:
(a) Current year's budgeted payment for debt service for sewerage facility bonds as reflected in the public agency's adopted budget;
(b) Current year's budgeted expenditures for operation of sewerage facilities as reflected in the public agency's adopted budget;
(c) The equivalent annual cost for the project proposed to be constructed. The interest rate to be used by all projects deriving this cost will be determined by the Department.
(d) And dividing the total by the population presently served by the public agency's sewerage facilities.
[ED. NOTE: The Table(s) referenced in this rule is not printed in the OAR Compilation. Copies are available from the agency.]
Stat. Auth.: ORS 468
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 2-1983, f. & ef. 3-11-83
340-081-0046
Execution of Loan Agreement
The loan agreement shall at a minimum specify:
(1) The specific purpose for which funds are advanced.
(2) The security to be provided.
(3) The schedule for payment of interest and principal.
(4) The source of funds to be pledged for repayment of the loan.
(5) The additional approvals that must be obtained from the Department prior to advance of funds or start of construction.
Stat. Auth.: ORS 468.195 - ORS 468.220
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 2-1983, f. & ef. 3-11-83; DEQ 37-1990(Temp), f. & cert. ef. 8-29-90; DEQ 3-1991, f. & cert. ef. 2-15-91
340-081-0051
Loan Closing
(1) Upon final signature of the loan agreement by both the public agency and the Department, funds will be advanced in accordance with the terms of the loan agreement.
(2) The Department may schedule final signature and advancement of funds as necessary to coordinate with the schedule for state bond sales.
Stat. Auth.: ORS 468
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 2-1983, f. & ef. 3-11-83
340-081-0100
Rejection of Applications
(1) The Department may reject any loan application if:
(a) The security proposed is judged to be inadequate to protect the state's interest, or the project does not appear to be conservatively self-supporting and self-liquidating from revenues, gifts, grants from the federal government, user charges, assessments, and other fees;
(b) The project does not comply with the requirements of ORS Chapters 454 and 468 and rules adopted by the Environmental Quality Commission pursuant to these chapters.
(2) Any action by the Department to deny an application may be appealed to the Environmental Quality Commission.
Stat. Auth.: ORS 468
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 2-1983, f. & ef. 3-11-83
340-081-0110
Assessment Deferral Loan Program Revolving Fund
Purpose. The Department will establish and administer an Assessment Deferral Loan Program Revolving Fund for the purpose of providing assistance to property owners who will experience extreme financial hardship from payment of sewer assessments. Assessment deferrals will be made available to qualifying property owners from approved assessment deferral loan program administered by public agencies:
(1) Loans from the Assessment Deferral Loan Program Revolving Fund may be made to provide funds for assessment deferral loan programs administered by public agencies that meet all of the following conditions:
(a) The public agency is required by federal grant agreement or by an order issued by the Commission or the Oregon Health Division to construct a sewage collection system, and sewer assessments or charges in lieu of assessments levied against some benefitted properties will subject property owners to extreme financial hardship;
(b) The public agency has adopted an assessment deferral loan program and the Commission has approved the program; and
(c) The sewage collection system meets the requirement of Section 2 Article XI-H of the Oregon Constitution regarding eligibility of pollution control bond funds.
(2) Any public agency requesting funding for its assessment deferral loan program from the Assessment Deferral Loan Program Revolving Fund shall submit a proposed program and application to the Department on a form provided by the Department. Applications for loans and the proposed program shall be submitted by the following dates:
(a) By no later then February 1, 1988 for loans to be issued in the 1987-89 biennium;
(b) The subsequent bienniums, by no later than February 1 of odd numbered years preceding the biennium.
(3) Any public agency administering funds from the Assessment Deferral Loan Program Revolving Fund shall have an assessment deferral loan program approved by the Department:
(a) The proposed program submitted to the Department shall contain the following:
(A) The number of sewer connections to be made as required by grant agreement or state order;
(B) An analysis of the income level and cost of sewer assessments for affected property owners;
(C) A description of how the public agency intends to allocate loan funds among potentially eligible property owners, including the following:
(i) Eligibility criteria;
(ii) Basis of choosing the eligibility criteria;
(iii) How funds will be distributed for assessment deferrals, among eligible property owners.
(D) A schedule for construction or collector sewers;
(E) A description of how the public agency intends to administer the assessment deferral program, including placing liens on property, repayment procedures, and accounting and record keeping procedures;
(F) Assurance that the public was afforded adequate opportunity for comment on the proposed program, and that public comments were considered prior to adoption of the proposed program by the public agency; and
(G) A resolution that the public agency has adopted the program.
(b) The Department shall review proposed programs submitted by public agencies within 30 days of receipt. The Department shall use the following criteria in reviewing submitted programs:
(A) The degree to which the public agency and its proposed program will meet the intent of the Assessment Deferral Loan Program Revolving Fund as specified in subsection (1)(a) of this rule; and
(B) Whether the required sewers will be constructed and made available to affected property owners within the biennium for which funds are being requested.
(c) The Department shall submit to the Commission recommendations for approval or disapproval of all submitted applica-tions and proposed assessment deferral loan programs.
(4) All public agencies meeting the requirements of section (1) of this rule shall receive an allocation of up to the amount of funds available based on the following criteria:
(a) The number of sewer connections to be made, as described in the approved program;
(b) The percentage of households within the area described in the program that are at or below 200 percent of the federal poverty level as published by the U.S. Bureau of Census;
(c) The allocation of available funds for qualifying public agencies shall be determined as follows:
(A) Calculate the number of connections to low income households for each public agency:
(total number of sewer connections) x (% of households in project area where household income in project area is at or below 200 percent of the federal poverty level) = number of connections to low income households.
(B) Add the total number of connections to low income households for all qualifying public agencies;
(C) Calculate a percentage of the total sewer connections to low income households for each qualifying agency divide paragraph (A) of this subsection by paragraph (B) of this subsection;
(D) Multiply the percentage calculated in paragraph (C) of this subsection by the total funds available.
(5) Within 60 days of Commission approval of the application and allocation of loan funds, the Department shall offer the public agency funds from the Assessment Deferral Loan Program Revolving Fund through a loan agreement that includes terms and conditions that:
(a) Require the public agency to secure the loan with assessment deferral loan program financing liens;
(b) Require the public agency to maintain adequate records and follow accepted accounting procedure;
(c) Contain a repayment program and schedule for the loan principal and simple annual interest. The interest rate shall be 5%;
(d) Require an annual status report from the public agency on the assessment deferral loan program;
(e) Conform with the terms and conditions listed in OAR 340-081-0046;
(f) Other conditions as deemed appropriate by the Commission.
Stat. Auth.: ORS 468.970 - ORS 468.983
Stats. Implemented: ORS 468.423 - ORS 468.440
Hist.: DEQ 22-1987, f. & ef. 12-16-87; DEQ 23-1989(Temp), f. & cert. ef. 10-3-89; DEQ 1-1990, f. & cert. ef. 1-3-90
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