United states department of agriculture

Rural Utilities Service

# BULLETIN 1780-5

**SUBJECT: [Preliminary Engineering Report -- Storm Water
Facilities]{.underline}**

**TO:** Rural Development State Directors, RUS Program Directors, State
Engineers

**EFFECTIVE DATE:** Date of approval.

**OFFICE OF PRIMARY INTEREST:** Environmental and Engineering Staff,
Water and Environmental Programs.

**INSTRUCTIONS:** This bulletin replaces previous RUS Bulletin 1780-5,
Preliminary Engineering Report -- Storm Waste-Water Disposal

**AVAILABILITY:** This bulletin is available on the Rural Utilities
Services' website at
[www.usda.gov/rus/water](http://www.usda.gov/rus/water/index.htm).

**PURPOSE:** This Bulletin provides applicants and their consultants
with instructions on how to prepare a Preliminary Engineering Report for
Storm Water Management Facilities.

![](media/image1.png){width="3.2423611111111112in"
height="1.304861111111111in"}

*October 2, 2003*

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Gary J. Morgan Date

Assistant Administrator

Water and Environmental Programs

# TABLE OF CONTENTS

1.  GENERAL 3

2.  PROJECT PLANNING AREA 3

3.  EXISTING FACILITIES 3

4.  NEED FOR PROJECT 4

5.  ALTERNATIVES CONSIDERED 4

6.  SELECTION OF AN ALTERNATIVE 5

7.  PROPOSED PROJECT (RECOMMENDED ALTERNATIVE) 6

8.  CONCLUSIONS AND RECOMMENDATIONS 7

INDEX:

Application Document

Preliminary Engineering Report

Project Planning

Storm Water Facility

# ABBREVIATIONS

O&M -- Operations and Maintenance

PER -- Preliminary Engineering Report

RUS -- Rural Utilities Service

## 

1 GENERAL

> A Preliminary Engineering Report (PER) should clearly describe the
> owner\'s present situation, analyze alternatives, and propose a
> specific course of action, from an engineering perspective. The level
> of effort required to prepare the report and the depth of analysis
> within the report are proportional to the size and complexity of the
> proposed project. Rural Utilities Service (RUS) projects must be
> modest in design, size and cost, and be constructed and operated in an
> environmentally responsible manner. Pursuant to\
> 7 CFR Part 1794, guidance in RUS Bulletin 1794A-602, "Guide for
> Preparing the Environmental Report for Water and Waste Projects", and
> the Agency's environmental State Supplement, the applicant shall
> perform the environmental review concurrently with the project
> engineering planning. This document must indicate that environmental
> issues were considered as part of the engineering planning.
> Information provided in the PER will be used to process the funding
> request, therefore completeness and accuracy are essential for timely
> processing of the application. Other outlines may be utilized, but the
> essential information must be readily identifiable. Contact the Rural
> Development office for further guidance. The following should be used
> as a guide for the preparation of PERs for RUS financed storm water
> management systems.

2 PROJECT PLANNING AREA

> Describe the area under consideration. The project planning area may
> be larger than the service area determined to be economically
> feasible. The description should include information on the following:
>
> a [Location]{.underline}. Maps, photographs, and sketches. These
> materials should indicate legal and natural boundaries, major
> obstacles, elevations, etc.
>
> b [Environmental Resources Present]{.underline}. Maps, photographs,
> studies and narrative. This section should provide information on the
> location and significance of important land resources (farmland,
> rangeland, forestland, wetlands and 100/500 year floodplains),
> historic sites, endangered species/critical habitats, etc., that were
> identified in the applicant's environmental information (normally an
> Environmental Report) and that must be considered in project planning.
> A narrative summary with reference to the applicant's environmental
> submittal is adequate.
>
> c [Growth Areas and Population Trends]{.underline}. Specific areas of
> concentrated growth should be identified. Population projections for
> the project planning area and concentrated growth areas should be
> provided for the project design period (typically 20-years). These
> projections should be based on historical records with justification
> from recognized sources.

3 EXISTING FACILITIES

Describe the existing facilities including at least the following
information:

a [Location Map]{.underline}. Provide a schematic layout and general
service area map (may be identified on project planning area maps).

b [History]{.underline}. Provide a brief description of when major
system components were constructed or renovated.

c [Condition of Facilities]{.underline}. Describe present condition;
suitability for continued use; adequacy of current facilities; and the
treatment, storage, and disposal capabilities of any existing
facilities. Also, describe compliance with Clean Water Act and any other
applicable Federal and State requirements.

d [Financial Status of any Existing Facilities]{.underline}. (Note:
Owner will be submitting most recent audit or financial statement as
part of the application package.) Provide information regarding current
rate schedules, annual operations and maintenance (O&M) cost, other
capital improvement programs, and tabulation of users by monthly usage
categories for the most recent typical fiscal year. Give status of
existing debts and any required reserve accounts.

4 NEED FOR PROJECT

Describe the needs in the following order of priority:

a [Health, Sanitation, and Security]{.underline}. Describe concerns and
include relevant regulations and correspondence from/to Federal, and
State regulatory agencies.

b [System O&M]{.underline}. Describe the concerns and indicate those
with the greatest impact. Investigate existing infrastructure problems
such as treatment or storage needs or combined sewers. Consider
management adequacy, inefficient designs, and problem elimination prior
to adding additional capacity.

c [Growth]{.underline}. Describe the reasonable growth capacity that is
necessary to meet needs during the planning period. Facilities proposed
to be constructed to meet future growth needs should generally be
supported by additional revenues. Consideration should be given to
designing for phased capacity increases. Provide number of new customers
committed to this project.

5 ALTERNATIVES CONSIDERED

> This section should contain a description of the reasonable
> alternatives that were considered in planning a solution to meet the
> identified need. Documentation of alternatives considered is often a
> PER weakness. The following alternatives should be considered, if
> practicable: (1) building new facilities or (2) optimizing the current
> facilities (no construction). These alternatives should be consistent
> with those considered in the environmental review. Mitigation measures
> necessary to avoid or minimize any adverse environmental effects must
> be integrated into project design. The description should include the
> following information on each alternative:

a [Description]{.underline}. Describe the facilities associated with the
alternative. Describe all feasible storm water treatment technologies
and provide a comparison of them. Also, describe collection and storage
facilities.

b [Design Criteria]{.underline}. State the design parameters used for
evaluation purposes. These parameters must comply with RUS design
policies (7 CFR 1780.57) and state regulatory requirements.

c [Map]{.underline}. Schematic layout.

d [Environmental Impacts]{.underline}. Do not duplicate the information
in the applicant\'s submittal of environmental information. Describe
only those unique direct and indirect impacts on floodplains, wetlands,
other important land resources, endangered species, historical and
archaeological properties, etc., as they relate to a specific
alternative. RUS must conduct an environmental assessment prior to
project approval.

e [Land Requirements]{.underline}. Identify sites and easements
required. Further specify whether these properties are currently owned,
to be acquired, or leased.

f [Construction Problems]{.underline}. Discuss concerns such as
subsurface rock, high water table, limited access, or other conditions
which may affect cost of construction or operation of facility.

g [Cost Estimates]{.underline}. Provide cost estimates for each
alternative, including a breakdown of the following costs:

> \(1\) Construction.

\(2\) Non‑Construction.

> \(3\) Annual Operations and Maintenance.

h [Advantages/Disadvantages]{.underline}. Describe how the specific
alternative meets the owner\'s needs with respect to financial,
managerial, and operational resources. Explain how the proposal complies
with regulatory requirements and existing comprehensive area-wide
development plans. Explain how the proposal satisfies public and
environmental concerns.

6 SELECTION OF AN ALTERNATIVE

> a Present Worth (life cycle) cost analysis (an engineering economics
> technique to evaluate present and future costs for comparison of
> alternatives) should be completed to compare the feasible
> alternatives. All of the items from the cost estimate should be
> included in the analysis. The "real" federal discount rate from
> Appendix C of OMB Circular A-94 should be used for determining the
> present worth of the uniform series of O & M values (in today's
> dollars) and the salvage value. This rate may be found at:\
> [www.whitehouse.gov/omb/circulars/a094/a94_appx-c.html](http://www.whitehouse.gov/omb/circulars/a094/a94_appx-c.html).
>
> b A matrix rating system could be useful in displaying the information
> on each alternative.
>
> c Note that if the range of present worth values is small, then
> non-monetary factors should be considered in determining which
> alternative should be selected.

7 PROPOSED PROJECT (RECOMMENDED ALTERNATIVE)

> This section should contain a fully developed description of the
> proposed project based on the preliminary description under the
> evaluation of alternatives. At least the following information should
> be included:

a [Project Design]{.underline}.

> \(1\) [Collection System Layout]{.underline}. Identify general
> location of line improvements: lengths, sizes, and key components.
>
> \(2\) [Pumping Stations]{.underline}. Identify size, type, location,
> and any special power requirements.
>
> \(3\) [Treatment]{.underline}. Describe treatment process in detail.
> Identify location of treatment facilities and process discharges.
> Capacity of treatment process should also be addressed.

\(4\) [Storage]{.underline}. Identify size, type, and location.

\(5\) [Disposal]{.underline}. Describe type of disposal facilities and
location.

> b [Total Project Cost Estimate]{.underline}. Provide an itemized
> estimate of the project cost based on the stated period of
> construction. Include development and construction, land and rights,
> legal, engineering, interest, equipment, contingencies, refinancing,
> and other costs associated with the proposed project. The engineer may
> rely on the owner for estimates of cost for items other than
> construction, equipment, and engineering. (For projects containing
> both wastewater and storm water, such as combined sewer separation,
> provide a separate cost estimate for each system).

c [Annual Operating Budget]{.underline}. Provide itemized annual
operating budget information. The owner has primary responsibility for
the annual operating budget, however, there are other parties that
provide assistance. This information will be used to evaluate the
financial capacity of the system. The engineer will incorporate
information from the owner's accountant and other known technical
service providers.

> \(1\) [Income]{.underline}. Income sources may vary depending on how
> the storm water utility is managed. Project income realistically.
>
> \(2\) [Operations and Maintenance (O&M) Costs]{.underline}. Project
> costs realistically. Provide actual costs for existing systems and
> projected costs for operating the system as improved. In the absence
> of other reliable data, base on actual costs of other existing
> facilities of similar size and complexity. Include facts in the report
> to substantiate operation and maintenance cost estimates. Include
> salaries, benefits, taxes, accounting and auditing fees, legal fees,
> interest, utilities, oil and fuel, insurance, annual repairs and
> maintenance, supplies, chemicals, office supplies, printing, and
> miscellaneous.
>
> \(3\) [Debt repayments]{.underline}. Describe existing and proposed
> financing from all sources. All estimates of RUS funding should be
> based on loans, not grants. RUS will evaluate the proposed project for
> the possible inclusion of RUS grant funds.
>
> \(4\) [Reserves]{.underline}. Describe the existing and proposed loan
> obligation reserve requirements for the following:

5.  

-   [Debt Service Reserve]{.underline} - Unless otherwise required by
    State statute the debt service reserve should be established at
    one-tenth (1/10) of annual debt repayment requirement (amount of
    debt that must be repaid to government in a given fiscal year).

-   [Short-Lived Asset Reserve]{.underline} - Additional reserve amounts
    may be needed to provide for timely replacement of short-lived
    assets. Prepare a schedule of short-lived assets and a recommended
    annual reserve deposit recommended to fund replacement of
    short-lived assets. Examples of short-lived assets include
    pump/motor overhaul or replacement, and small equipment replacement.
    Short-lived assets include those items not included under O&M,
    however, it should not include long-lived assets, such as storm
    sewer replacement, that should be funded with long-term financing.

8.  CONCLUSIONS AND RECOMMENDATIONS

Provide any additional findings and recommendations that should be
considered in development of the project. This may include
recommendations for special studies, highlighting of the need for
special coordination, a recommended plan of action to expedite project
development, etc.