Chapter 09. Water Supply Construction Financial Assistance Regulations

“Applicant” means any State or local governmental entity.

“Construction” means the physical installation of any new water supply facility, or the upgrading or rehabilitation of any existing water supply facility.

“Department” means the Department of the Environment.

“Financial assistance” means State grants, loans, or loan guarantees.

“Local governmental entity” includes a county, municipality, sanitary commission, and local or regional water authority.

“Secretary” means the Secretary of the Environment.

“Significant change order” means one which introduces a new element or goal in the approved water facility project. It may consist of a change in treatment capacity or flow capacity, a different area to be served, the purchase of equipment not contemplated in the original contract, or the substitution of a piece of equipment by another which has a capability greater or less than that originally specified. The dollar amount of the change may not be the sole determining factor as to whether or not a change order significantly alters the project.

Funds available under this program are intended to be used as a last resort measure to assist regional and local governmental agencies in solving water supply system inadequacies, when it can be demonstrated that the applicant has insufficient or limited financial capability to proceed with necessary construction projects.

Financial assistance is limited to State and local governmental entities. Eligible project costs are determined by the Department using principles set forth in Regulation .05 of this chapter.

The Department shall use a project priority system in determining which projects will receive financial assistance.

Financial assistance may only be provided up to a maximum of 87-1/2 percent of the eligible costs of the project.

Project applications shall consist of a pre-application and final application, including documentation of need and such other information as may be required by the Department.

A water facility construction permit, as required by the Environment Article, §9-204, Annotated Code of Maryland, shall be required before the Board of Public Works' consideration of financial assistance for construction of the project.

The proposed project is subject to State Clearinghouse review procedures.

The applicant shall follow all local bidding requirements. When local bidding requirements do not exist, bidding procedures satisfactory to the Board of Public Works shall be followed.

A governmental entity receiving financial assistance under this chapter may not award a contract on a “cost-plus” basis.

Any project for which State financial assistance is granted shall comply with all applicable State Law.

The documents listed below are incorporated by reference. Each is available for public inspection at the appropriate office in each county, and in Baltimore City. The documents are:

Before the award of State financial assistance for construction, the need for facility construction or improvement shall be identified, and a project to meet that need shall be contained in the approved County Comprehensive Water and Sewerage Plan. The Department may also require a public hearing on the project, in addition to the public hearing required pursuant to adoption of the county water and sewerage plan.

A water appropriation and use permit, as required by Natural Resources Article, §8-811, Annotated Code of Maryland, shall be required before the Board of Public Work's approval of financial assistance for construction of the project.

Financial assistance may be approved by the Board of Public Works for community associations if the assistance is passed through a governmental entity. In these cases, a governmental entity shall be the responsible applicant. The Department shall require that the community association be incorporated and be responsible for financial and ownership requirements as are found necessary to assure continued, efficient, and effective operation of the system. The governmental entity shall agree to act as the agent for the community association in applying for financial assistance and shall be jointly responsible for complying with the terms of the grant or loan agreement.

An applicant shall submit a pre-application which includes sufficient information for the Department to determine:

Final Application. The Department shall require the applicant to submit, within 1 year, a final application when the project falls within the fundable range on the annual priority list. The Department may, at its discretion, extend the application deadline. The application shall contain any additional information the Department may require including:

If the Department determines that under Regulation .05E, of this chapter, feasibility studies, planning, and plans and specifications are eligible for funding, the Department may petition the Board of Public Works for these funds before determining the extent to which the State may participate in providing financial assistance for construction.

The award of financial assistance may not cause a project to be funded at a level exceeding 100 percent of the total project costs.

State financial assistance may not exceed 87-1/2 percent of the eligible cost of a project, except that in the case of a project to be undertaken by the Maryland Environmental Service, pursuant to an order issued by the Secretary, the State financial assistance may equal the total cost of the project less the amount of any federal grant application to project costs.

The total amount of a State grant for any project may not exceed $1,500,000.

Project Costs Eligible for Financial Assistance. Project costs which are eligible for financial assistance under this chapter may include:

The Department shall annually rank applications for grant and loan assistance.

The Department shall hold a public hearing, following public notification in the Maryland Register and the Department's web site regarding the annual priority list.

Following the public hearing, the Department may change the rankings of projects based on public input.

Projects Not on Annual Priority List. The Board of Public Works may award financial assistance for projects not included on the annual priority list, if it determines that:

Priority System.

The Department annually shall establish a reserve fund to be used for grant and loan amendments in order to meet change orders, cost overruns, and emergency projects.

Financial assistance provided under this chapter may not be applied to projects whose construction was initiated before approval by the Board of Public Works.

State Loans.

State Loan Guarantees. A loan guarantee of the principal of, or interest on, any commercial loan or obligation to finance an eligible project may be made under the following conditions:

Terms of Financial Agreement. The financial agreement required by the Board of Public Works as a condition of financial assistance shall include terms which:

Financial agreements may also include any special conditions or requirements recommended by the Department and approved by the Board of Public Works.