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Publication

May 20, 2009Client Alert

Update #2 on Use of Federal Stimulus Funds for Clean Water Fund Program and Safe Drinking Water Loan Program

In mid-April 2009, the Wisconsin Department of Natural Resources (“DNR”) announced that it would use a portion of federal stimulus funds provided by the American Recovery and Reinvestment Act of 2009 (“The Act”) for grants under the Safe Drinking Water Loan Program (“SDWLP”) and Clean Water Fund Program (“CWFP”). Recent client alerts discussing this announcement and an update following the announcement can be found at http://www.michaelbest.com/Wisconsin-DNR-Announces-Federal-Stimulus-for-SDWLP-and-CWFP and http://www.michaelbest.com/Update-on-Use-of-Federal-Stimulus-Funds-for-SDWLP-and-CWFP.

DNR has provided updated information regarding the granting of funds under these two programs.

Allocation of Funds

DNR will allocate at least 25% of the funds available under The Act to counties with unemployment rates higher than the state’s unemployment rate, and at least 20% of the funds to “green” projects. Additionally, DNR will fund a minimum of one project in each DNR region. All Financial Assistance Agreements (“FAAs”) related to funds from The Act must be closed by December 2009. Projects that received grants under other programs can still receive funding from The Act. The amount of funds available in such situations will be based on the portion of the project not covered by another grant. Finally, DNR will only allocate funds to projects that are ready to proceed, meaning that construction contracts for the project can be awarded by early fall.

Refinancing

Certain expenses paid for with internal funds or with other debt and incurred after October 1, 2008 are eligible for refinancing under The Act. DNR will refinance CWFP FAAs that closed after February 17, 2009, but it will not refinance SDWLP FAAs.

Applications for refinancing under CWFP must be submitted to DNR by June 30, 2009. Refinancing applications for SDWLP were due by April 30, 2009. Those seeking refinancing must comply with the Davis-Bacon and Buy America provisions of The Act.

Applications under CWFP

To be eligible for funds under CWFP, applicants must, by June 30, 2009: (1) submit an application for such funds; (2) submit approvable construction plans and specifications; and (3) have received DNR approval of a wastewater facility planning report.

  • Construction Plans and Specifications

The construction plans and specifications submitted to DNR must be sufficiently complete in that they could be used to obtain bids from contractors. The submission must include a design report and plan drawings and specifications for major elements of the project, such as treatment process facilities. Given the short timeframe for completing construction plans, DNR will be lenient with respect to the detail provided for non-process facilities, such as office facilities.

DNR will conduct its normal review process of such plans and specifications. If DNR determines that the submission is not substantially complete, it will notify the applicant in writing. Additional guidance regarding the submission of facility plans can be found at http://dnr.wi.gov/org/water/wm/glwsp/facilities/muni.htm.

  • Facility Planning Report

Applicants must receive DNR approval of their facility planning reports by the June 30, 2009 deadline. DNR review of facility planning reports involves a two-week public comment period. Accordingly, applicants must submit their facility plans to DNR no later than early June in order to meet the June 30 approval deadline.

This client alert is one of a series designed to provide summaries of The Act and information and guidance regarding opportunities and relief made available through The Act. All of The Act client alerts are available on Michael Best's Stimulus and Economic Recovery Team publications page. For additional information on this topic, please feel free to contact one of the authors of this alert or your Michael Best attorney.

If you are interested in learning about other provisions included in The Act, the Michael Best Stimulus and Economic Recovery Team is prepared to assist you in understanding the implications and in developing and implementing a strategy to secure the benefits of this unprecedented legislation. Specifically, we will assist you to identify opportunities, prepare appropriate proposals and make targeted contacts to secure funds. We will also work with you to ensure that your applications are tailored to meet your needs and that your funded projects proceed in compliance with award requirements and applicable laws.

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