UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Utilities Service

BULLETIN 1780-2 

RD-GD-2013-70

SUBJECT: Preliminary Engineering Reports for the Water and Waste Disposal 

Program

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

EFFECTIVE DATE: Date of approval. 

OFFICE OF PRIMARY INTEREST: Engineering and Environmental Staff, Water 

and Environmental Programs 

INSTRUCTIONS: This bulletin replaces existing RUS Bulletins 1780-2 (September 10, 

2003), 1780-3 (October 2, 2003), 1780-4 (October 2, 2003), and 1780-5 (October 2, 

2003). 

AVAILABILITY: This bulletin and all the exhibits, as well as any Rural Development 

instruction or Rural Utilities Service instructions, regulations, or forms referenced in this 

bulletin are available at any Rural Development State Office. The State Office staff is 

familiar with the use of the documents in their States and can answer specific questions 

on Agency requirements. 

This bulletin is available on the Rural Utilities Service website at 

http://www.rurdev.usda.gov/RDU_Bulletins_Water_and_Environmental.html. 

PURPOSE: This bulletin assists applicants and their consultants with instructions on 

how to prepare a Preliminary Engineering Report as part of an application for funding as 

required by 7 CFR 1780.33(c) and 7 CFR 1780.55. 

MODIFICATIONS: Rural Development State Offices may modify this guidance when 

appropriate to comply with State statutes and regulations in accordance with the 

procedures outlined at Rural Development Instruction 2006-B (2006.55). 

4/4/13 

____________________________________________ __________________ 

JACQUELINE M. PONTI-LAZARUK Date 

Assistant Administrator 

Water and Environmental Programs 

DISCLAIMER: The contents of this guidance document does not have the force and effect of law and is 

not meant to bind the public in any way. This document is intended only to provide clarity to the public 

regarding existing requirements under the law or agency policies. 
Bulletin 1780-2 

Page 2

TABLE OF CONTENTS 

1 GENERAL 

2 PURPOSE 

3 HOW TO USE THE INTERAGENCY TEMPLATE 

Exhibit One Interagency Preliminary Engineering Report Template 

INDEX: 

Application Document 

Preliminary Engineering Report 

Project Planning 

Water and Waste Disposal Facilities 

ABBREVIATIONS 

CDBG – Community Development Block Grant 

CFR – Code of Federal Regulations 

EDU – Equivalent Dwelling Unit 

EPA – Environmental Protection Agency 

GAO – Government Accountability Office 

GPCD – Gallons per Capita per Day 

HUD – Department of Housing and Urban Development 

O & M – Operations and Maintenance 

PER – Preliminary Engineering Report 

RD – Rural Development 

RUS – Rural Utilities Service 

SRF – State Revolving Fund 

USDA – United States Department of Agriculture 

WEP – Water and Environmental Programs 

WWD – Water and Waste Disposal 
Bulletin 1780-2 

Page 3 

1 GENERAL 

A PER is a planning document required by many state and federal agencies as part of the 

process of obtaining financial assistance for development of drinking water, wastewater, 

solid waste, and stormwater projects. An applicant for funding from the WWD program 

must submit a PER as required by 7 CFR 1780.33(c) and 1780.55. The PER describes 

the proposed project from an engineering perspective, analyzes alternatives to the 

proposal, defines project costs, and provides information critical to the underwriting 

process. 

In 2012 the USDA, Rural Development (RD), Rural Utilities Service, Water and 

Environmental Programs formed a working group to develop an interagency template for 

PERs for use by both federal agencies and state administering agencies. The USDA-led 

working group included 36 individuals representing 4 federal agencies, 16 state agencies, 

the Border Environment Cooperation Commission, and the North Carolina Rural Center. 

Also, the effort was supported by the Small Community Water Infrastructure Exchange. 

On January 16, 2013, the principals of the federal participants executed an interagency 

memorandum supporting use of the interagency template, attached as Exhibit One. 

2. PURPOSE 

This bulletin provides information and guidance for applicants and professional 

consultants in developing a PER for submittal with an application for funding. RD State 

Offices should provide a copy of the Bulletin to applicants and consulting engineers upon 

request or refer them to the website listed on the Bulletin’s cover sheet for an electronic 

copy. 

3 HOW TO USE THE INTERAGENCY TEMPLATE 

There has been increasing interest throughout the government at both state and federal 

levels to improve coordination between funding agencies in the processes involved in 

applications for infrastructure funding. A recent GAO report, “Rural Water 

Infrastructure: Additional Coordination Can Help Avoid Potentially Duplicative 

Application Requirements” (GAO-13-111), released October 16, 2012, called the effort 

of the working group led by USDA to develop the attached Interagency PER Template 

“encouraging” and stated that it would “help communities”. 

Content of a PER: The attached Interagency PER Template describes the content of a 

PER and should be used without modification, except for items noted below. Often an 

applicant will initially consider only a single funding source and later determine that an 

application to additional funding agencies is necessary. To avoid having to revise the 

PER to meet the additional agencies’ needs, the consulting engineer should provide 
Bulletin 1780-2 

Page 4 

responses to all sections of the PER outline, unless specific sections do not apply to a 

proposed project. 

Short-Lived Assets: The short-lived asset table in Appendix A is a list of examples of 

short-lived assets. Depending on local practices and applicants, some of these items may 

not be considered short-lived assets if they are considered part of O&M or long-term 

capital financing. Consulting engineers and applicants should coordinate with each other 

and with the Agency to determine which items should be considered short-lived assets for 

specific projects. 

Engaging State Partners: State Offices should engage funding partners to encourage statewide adoption of the attached template as a standard for all state leveraging partners. 

Existing state-level agreements resulting from previous coordinated efforts for adopting a 

standard PER outline must be modified or replaced with this template. Efforts underway 

to adopt new state-level PER outlines must use this template. State-level agreements 

implementing this template between various leveraging partners should keep additional 

requirements to a minimum, but should not remove any required sections from the 

template. 

Income Projections for Underwriting Purposes: 

The State Office uses some of the information from the PER, especially Sections 6 (e) 

and (f), for underwriting purposes. Note that for income projection purposes, every effort 

should be made to identify actual data regarding water usage or wastewater generation. 

For metered systems, actual data should be used. 

When financing construction of a new system or improvements to an existing system 

without any existing usage data, water use and wastewater generation approximations for 

income projection purposes should, if at all possible, be based on information from 

surrounding similar communities and systems. The source of data used should be 

documented in the PER. 

The value of 100 GPCD shown in Section 6 is a general value and may not be 

appropriate for many rural systems financed with WWD funds, so in the absence of 

reliable data, a value of 5000 gallons per EDU per month (approximately 67 GPCD or 

167 GPD per EDU) should be used. 

Exhibit One: Interagency Preliminary Engineering Report Template 
 

January 16, 2013 

INTERAGENCY MEMORANDUM 

Attached is a document explaining recommended best practice for the development of 

Preliminary Engineering Reports in support of funding applications for development of drinking 

water, wastewater, stormwater, and solid waste systems. 

The best practice document was developed cooperatively by: 

 US Department of Agriculture, Rural Development, Rural Utilities Service, Water and 

Environmental Programs; 

 US Environmental Protection Agency (EPA), Office of Water, Office of Ground Water 

and Drinking Water and Office of Wastewater Management; 

 US Department of Housing and Urban Development (HUD), Office of Community 

Planning and Development; 

 US Department of Health and Human Services, Indian Health Service (IHS); 

 Small Communities Water Infrastructure Exchange; 

Extensive input from participating state administering agencies was also very important to the 

development of this document. 

Federal agencies that cooperatively developed this document strongly encourage its use by 

funding agencies as part of the application process or project development. State administered 

programs are encouraged to adopt this document but are not required to do so, as it is up to a 

state administering agency’s discretion to adopt it, based on the needs of the state administering 

agency.

A Preliminary Engineering Report (Report) is a planning document required by many state and 

federal funding agencies as part of the process of obtaining financial assistance for development 

of drinking water, wastewater, solid waste, and stormwater facilities. The attached Report 

outline details the requirements that funding agencies have adopted when a Report is required. 

In general the Report should include a description of existing facilities and a description of the 

issues being addressed by the proposed project. It should identify alternatives, present a life 

cycle cost analysis of technically feasible alternatives and propose a specific course of action. 

The Report should also include a detailed current cost estimate of the recommended alternative. 

The attached outline describes these and other sections to be included in the Report. 

Projects utilizing direct federal funding also require an environmental review in accordance with 

the National Environmental Policy Act (NEPA). The Report should indicate that environmental 

issues were considered as part of the engineering planning and include environmental 

information pertinent to engineering planning. 
2 

For state administered funding programs, a determination of whether the outline applies to a 

given program or project is made by the state administering agency. When a program or agency 

adopts this outline, it may adopt a portion or the entire outline as applicable to the program or 

project in question at the discretion of the agency. Some state and federal funding agencies will 

not require the Report for every project or may waive portions of the Report that do not apply to 

their application process, however a Report thoroughly addressing all of the contents of this 

outline will meet the requirements of most agencies that have adopted this outline. 

The detailed outline provides information on what to include in a Report. The level of detail 

required may also vary according to the complexity of the specific project. Reports should 

conform substantially to this detailed outline and otherwise be prepared and presented in a 

professional manner. Many funding agencies require that the document be developed by a 

Professional Engineer registered in the state or other jurisdiction where the project is to be 

constructed unless exempt from this requirement. Please check with applicable funding agencies 

to determine if the agencies require supplementary information beyond the scope of this outline. 

Any preliminary design information must be written in accordance with the regulatory 

requirements of the state or territory where the project will be built. 

Information provided in the Report may be used to process requests for funding. Completeness 

and accuracy are therefore essential for timely processing of an application. Please contact the 

appropriate state or federal funding agencies with any questions about development of the Report 

and applications for funding as early in the process as practicable. 

Questions about this document should be referred to the applicable state administering agency, 

regional office of the applicable federal agency, or to the following federal contacts: 

Agency Contact Email Address Phone

USDA/RUS Benjamin Shuman, PE ben.shuman@wdc.usda.gov 202‐720‐1784

EPA/DWSRF Kirsten Anderer, PE anderer.kirsten@epa.gov 202‐564‐3134

EPA/CWSRF Matt King king.matt@epa.gov 202‐564‐2871

HUD Stephen Rhodeside stephen.m.rhodeside@hud.gov 202‐708‐1322

IHS Dana Baer, PE dana.baer@ihs.gov 301‐443‐1345

 
3 

Attachment 
4 

WORKING GROUP CONTRIBUTORS 

Federal Agency Partners

USDA, Rural Development, Rural Utilities Service (Chair) Benjamin Shuman, PE

EPA, Office of Water, Office of Ground Water and Drinking Water Kirsten Anderer, PE

EPA, Office of Water, Office of Ground Water and Drinking Water CAPT David Harvey, PE

EPA, Office of Water, Office of Wastewater Management Matt King

EPA, Office of Water, Office of Wastewater Management Joyce Hudson

EPA, Region 1 Carolyn Hayek

EPA, Region 9 Abimbola Odusoga

HUD, Office of Community Planning and Development Stephen M. Rhodeside

HUD, Office of Community Planning and Development Eva Fontheim

Indian Health Service CAPT Dana Baer, PE

Indian Health Service LCDR Charissa Williar, PE

USDA, Rural Development, Florida State Office Michael Langston

USDA, Rural Development, Florida State Office Steve Morris, PE

   
5 

State Agency and Interagency Partners    

Arizona Water Infrastructure Finance Authority Dean Moulis, PE

Border Environment Cooperation Commission Joel Mora, PE

Colorado Department of Local Affairs Barry Cress

Colorado Department of Public Health & Environment Michael Beck

Colorado Department of Public Health & Environment Bret Icenogle, PE

Georgia Office of Community Development Steed Robinson

Idaho, Department of Environmental Quality Tim Wendland

Indiana Finance Authority Emma Kottlowski

Indiana Finance Authority Shelley Love

Indiana Finance Authority Amanda Rickard, PE

Kentucky Division of Water Shafiq Amawi

Kentucky Department of Local Government Jennifer Peters

Louisiana Department of Environmental Quality Jonathan McFarland, PE

Maine Department of Health and Human Services Norm Lamie, PE

Minnesota Pollution Control Agency Amy Douville

Minnesota Pollution Control Agency Corey Mathisen, PE

Missouri Department of Natural Resources Cynthia Smith

Montana Department of Commerce Kate Miller, PE

North Carolina Department of Commerce Olivia Collier

North Carolina Rural Center Keith Krzywicki, PE

North Carolina Department of Commerce Vickie Miller, CPM

Rhode Island Department of Health Gary Chobanian, PE

Rhode Island Department of Health Geoffrey Marchant

   
6 

ABBREVIATIONS 

NEPA – National Environmental Policy Act 

NPV – Net Present Value 

O&M – Operations and Maintenance 

OMB – Office of Management and Budget 

Report – Preliminary Engineering Report 

SPPW – Single Payment Present Worth 

USPW – Uniform Series Present Worth 

 
7 

GENERAL OUTLINE OF A PRELIMINARY ENGINEERING REPORT 

1) PROJECT PLANNING 

a) Location 

b) Environmental Resources Present 

c) Population Trends 

d) Community Engagement 

2) EXISTING FACILITIES 

a) Location Map 

b) History 

c) Condition of Existing Facilities 

d) Financial Status of any Existing Facilities 

e) Water/Energy/Waste Audits 

3) NEED FOR PROJECT 

a) Health, Sanitation, and Security 

b) Aging Infrastructure 

c) Reasonable Growth 

4) ALTERNATIVES CONSIDERED 

a) Description 

b) Design Criteria 

c) Map 

d) Environmental Impacts 

e) Land Requirements 

f) Potential Construction Problems 

g) Sustainability Considerations 

i) Water and Energy Efficiency 

ii) Green Infrastructure 

iii) Other 

h) Cost Estimates 

5) SELECTION OF AN ALTERNATIVE 

a) Life Cycle Cost Analysis 

b) Non-Monetary Factors 

6) PROPOSED PROJECT (RECOMMENDED ALTERNATIVE) 

a) Preliminary Project Design 

b) Project Schedule 

c) Permit Requirements 

d) Sustainability Considerations 

i) Water and Energy Efficiency 

ii) Green Infrastructure 

 
8 

iii) Other 

e) Total Project Cost Estimate (Engineer’s Opinion of Probable Cost) 

f) Annual Operating Budget 

i) Income 

ii) Annual O&M Costs 

iii) Debt Repayments 

iv) Reserves 

7) CONCLUSIONS AND RECOMMENDATIONS 

 
9 

DETAILED OUTLINE OF A PRELIMINARY ENGINEERING REPORT 

1) PROJECT PLANNING 

Describe the area under consideration. Service may be provided by a combination of 

central, cluster, and/or centrally managed individual facilities. The description should 

include information on the following: 

a) Location. Provide scale maps and photographs of the project planning area and 

any existing service areas. Include legal and natural boundaries and a 

topographical map of the service area. 

b) Environmental Resources Present. Provide maps, photographs, and/or a narrative 

description of environmental resources present in the project planning area that 

affect design of the project. Environmental review information that has already 

been developed to meet requirements of NEPA or a state equivalent review 

process can be used here. 

c) Population Trends. Provide U.S. Census or other population data (including 

references) for the service area for at least the past two decades if available. 

Population projections for the project planning area and concentrated growth 

areas should be provided for the project design period. Base projections on 

historical records with justification from recognized sources. 

d) Community Engagement. Describe the utility’s approach used (or proposed for 

use) to engage the community in the project planning process. The project 

planning process should help the community develop an understanding of the 

need for the project, the utility operational service levels required, funding and 

revenue strategies to meet these requirements, along with other considerations. 

2) EXISTING FACILITIES 

Describe each part (e.g. processing unit) of the existing facility and include the following 

information: 

a) Location Map. Provide a map and a schematic process layout of all existing 

facilities. Identify facilities that are no longer in use or abandoned. Include 

photographs of existing facilities. 

b) History. Indicate when major system components were constructed, renovated, 

expanded, or removed from service. Discuss any component failures and the 

cause for the failure. Provide a history of any applicable violations of regulatory 

requirements. 

c) Condition of Existing Facilities. Describe present condition; suitability for 

continued use; adequacy of current facilities; and their conveyance, treatment, 

storage, and disposal capabilities. Describe the existing capacity of each 

component. Describe and reference compliance with applicable federal, state, and 

local laws. Include a brief analysis of overall current energy consumption. 

Reference an asset management plan if applicable. 
10 

d) Financial Status of any Existing Facilities. (Note: Some agencies require the 

owner to submit the most recent audit or financial statement as part of the 

application package.) Provide information regarding current rate schedules, 

annual O&M cost (with a breakout of current energy costs), 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 required 

reserve accounts. 

e) Water/Energy/Waste Audits. If applicable to the project, discuss any water, 

energy, and/or waste audits which have been conducted and the main outcomes. 

3) NEED FOR PROJECT 

Describe the needs in the following order of priority: 

a) Health, Sanitation, and Security. Describe concerns and include relevant 

regulations and correspondence from/to federal and state regulatory agencies. 

Include copies of such correspondence as an attachment to the Report. 

b) Aging Infrastructure. Describe the concerns and indicate those with the greatest 

impact. Describe water loss, inflow and infiltration, treatment or storage needs, 

management adequacy, inefficient designs, and other problems. Describe any 

safety concerns. 

c) Reasonable Growth. 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. 

4) ALTERNATIVES CONSIDERED 

This section should contain a description of the alternatives that were considered in 

planning a solution to meet the identified needs. Documentation of alternatives 

considered is often a Report weakness. Alternative approaches to ownership and 

management, system design (including resource efficient or green alternatives), and 

sharing of services, including various forms of partnerships, should be considered. In 

addition, the following alternatives should be considered, if practicable: building new 

centralized facilities, optimizing the current facilities (no construction), developing 

centrally managed decentralized systems, including small cluster or individual systems, 

and developing an optimum combination of centralized and decentralized systems. 

Alternatives should be consistent with those considered in the NEPA, or state equivalent, 

environmental review. Technically infeasible alternatives that were considered should be 

mentioned briefly along with an explanation of why they are infeasible, but do not 

require full analysis. For each technically feasible alternative, the description should 

include the following information: 

a) Description. Describe the facilities associated with every technically feasible 

alternative. Describe source, conveyance, treatment, storage and distribution 
11 

facilities for each alternative. A feasible system may include a combination of 

centralized and decentralized (on-site or cluster) facilities. 

b) Design Criteria. State the design parameters used for evaluation purposes. These 

parameters should comply with federal, state, and agency design policies and 

regulatory requirements. 

c) Map. Provide a schematic layout map to scale and a process diagram if 

applicable. If applicable, include future expansion of the facility.

d) Environmental Impacts. Provide information about how the specific alternative 

may impact the environment. 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 each 

specific alternative evaluated. Include generation and management of residuals 

and wastes. 

e) Land Requirements. Identify sites and easements required. Further specify 

whether these properties are currently owned, to be acquired, leased, or have 

access agreements. 

f) Potential Construction Problems. Discuss concerns such as subsurface rock, high 

water table, limited access, existing resource or site impairment, or other 

conditions which may affect cost of construction or operation of facility. 

g) Sustainability Considerations. Sustainable utility management practices include 

environmental, social, and economic benefits that aid in creating a resilient utility. 

i) Water and Energy Efficiency. Discuss water reuse, water efficiency, water 

conservation, energy efficient design (i.e. reduction in electrical demand), 

and/or renewable generation of energy, and/or minimization of carbon 

footprint, if applicable to the alternative. Alternatively, discuss the water and 

energy usage for this option as compared to other alternatives. 

ii) Green Infrastructure. Discuss aspects of project that preserve or mimic 

natural processes to manage stormwater, if applicable to the alternative. 

Address management of runoff volume and peak flows through infiltration, 

evapotranspiration, and/or harvest and use, if applicable. 

iii) Other. Discuss any other aspects of sustainability (such as resiliency or 

operational simplicity) that are incorporated into the alternative, if applicable. 

h) Cost Estimates. Provide cost estimates for each alternative, including a 

breakdown of the following costs associated with the project: construction, nonconstruction, and annual O&M costs. A construction contingency should be 

included as a non-construction cost. Cost estimates should be included with the 

descriptions of each technically feasible alternative. O&M costs should include a 

rough breakdown by O&M category (see example below) and not just a value for 

each alternative. Information from other sources, such as the recipient’s 

accountant or other known technical service providers, can be incorporated to 

assist in the development of this section. The cost derived will be used in the life 

cycle cost analysis described in Section 5 a. 

 
12 

Example O&M Cost Estimate

Personnel (i.e. Salary, Benefits, Payroll Tax, 

Insurance, Training)

Administrative Costs (e.g. office supplies, printing, 

etc.)

Water Purchase or Waste Treatment Costs

Insurance 

Energy Cost (Fuel and/or Electrical)

Process Chemical 

Monitoring & Testing

Short Lived Asset Maintenance/Replacement*

Professional Services

Residuals Disposal 

Miscellaneous 

Total 

* See Appendix A for example list 

5) SELECTION OF AN ALTERNATIVE 

Selection of an alternative is the process by which data from the previous section, 

“Alternatives Considered” is analyzed in a systematic manner to identify a recommended 

alternative. The analysis should include consideration of both life cycle costs and nonmonetary factors (i.e. triple bottom line analysis: financial, social, and environmental). If 

water reuse or conservation, energy efficient design, and/or renewable generation of 

energy components are included in the proposal provide an explanation of their cost 

effectiveness in this section. 

a) Life Cycle Cost Analysis. A life cycle present worth cost analysis (an 

engineering economics technique to evaluate present and future costs for 

comparison of alternatives) should be completed to compare the technically 

feasible alternatives. Do not leave out alternatives because of anticipated costs; 

let the life cycle cost analysis show whether an alternative may have an 

acceptable cost. This analysis should meet the following requirements and should 

be repeated for each technically feasible alternative. Several analyses may be 

required if the project has different aspects, such as one analysis for different 

types of collection systems and another for different types of treatment. 

1. The analysis should convert all costs to present day dollars; 

2. The planning period to be used is recommended to be 20 years, but may be any 

period determined reasonable by the engineer and concurred on by the state or 

federal agency; 

3. The discount rate to be used should be the “real” discount rate taken from 

Appendix C of OMB circular A-94 and found at 

(www.whitehouse.gov/omb/circulars/a094/a94_appx-c.html); 

4. The total capital cost (construction plus non-construction costs) should be 

included; 
13 

5. Annual O&M costs should be converted to present day dollars using a uniform 

series present worth (USPW) calculation; 

6. The salvage value of the constructed project should be estimated using the 

anticipated life expectancy of the constructed items using straight line 

depreciation calculated at the end of the planning period and converted to 

present day dollars; 

7. The present worth of the salvage value should be subtracted from the present 

worth costs; 

8. The net present value (NPV) is then calculated for each technically feasible 

alternative as the sum of the capital cost (C) plus the present worth of the 

uniform series of annual O&M (USPW (O&M)) costs minus the single payment 

present worth of the salvage value (SPPW(S)): 

NPV = C + USPW (O&M) – SPPW (S) 

9. A table showing the capital cost, annual O&M cost, salvage value, present 

worth of each of these values, and the NPV should be developed for state or 

federal agency review. All factors (major and minor components), discount 

rates, and planning periods used should be shown within the table; 

10. Short lived asset costs (See Appendix A for examples) should also be included 

in the life cycle cost analysis if determined appropriate by the consulting 

engineer or agency. Life cycles of short lived assets should be tailored to the 

facilities being constructed and be based on generally accepted design life. 

Different features in the system may have varied life cycles. 

b) Non-Monetary Factors. Non-monetary factors, including social and 

environmental aspects (e.g. sustainability considerations, operator training 

requirements, permit issues, community objections, reduction of greenhouse gas 

emissions, wetland relocation) should also be considered in determining which 

alternative is recommended and may be factored into the calculations. 

6) PROPOSED PROJECT (RECOMMENDED ALTERNATIVE) 

The engineer should include a recommendation for which alternative(s) should be 

implemented. This section should contain a fully developed description of the proposed 

project based on the preliminary description under the evaluation of alternatives. Include 

a schematic for any treatment processes, a layout of the system, and a location map of the 

proposed facilities. At least the following information should be included as applicable 

to the specific project: 

a) Preliminary Project Design. 

i) Drinking Water: 

Water Supply. Include requirements for quality and quantity. Describe 

recommended source, including site and allocation allowed. 
14 

Treatment. Describe process in detail (including whether adding, 

replacing, or rehabilitating a process) and identify location of plant and 

site of any process discharges. Identify capacity of treatment plant (i.e. 

Maximum Daily Demand). 

Storage. Identify size, type and location. 

Pumping Stations. Identify size, type, location and any special power 

requirements. For rehabilitation projects, include description of 

components upgraded. 

Distribution Layout. Identify general location of new pipe, replacement, 

or rehabilitation: lengths, sizes and key components. 

ii) Wastewater/Reuse: 

Collection System/Reclaimed Water System Layout. Identify general 

location of new pipe, replacement or rehabilitation: lengths, sizes, and key 

components. 

Pumping Stations. Identify size, type, site location, and any special power 

requirements. For rehabilitation projects, include description of 

components upgraded. 

Storage. Identify size, type, location and frequency of operation. 

Treatment. Describe process in detail (including whether adding, 

replacing, or rehabilitating a process) and identify location of any 

treatment units and site of any discharges (end use for reclaimed water). 

Identify capacity of treatment plant (i.e. Average Daily Flow). 

iii) Solid Waste: Collection. Describe process in detail and identify quantities of material 

(in both volume and weight), length of transport, location and type of 

transfer facilities, and any special handling requirements. 

Storage. If any, describe capacity, type, and site location. 

Processing. If any, describe capacity, type, and site location. 

Disposal. Describe process in detail and identify permit requirements, 

quantities of material, recycling processes, location of plant, and site of 

any process discharges. 

iv) Stormwater: 

 Collection System Layout. Identify general location of new pipe, 

replacement or rehabilitation: lengths, sizes, and key components. 

Pumping Stations. Identify size, type, location, and any special power 

requirements. 
15 

Treatment. Describe treatment process in detail. Identify location of 

treatment facilities and process discharges. Capacity of treatment process 

should also be addressed. 

Storage. Identify size, type, location and frequency of operation. 

 Disposal. Describe type of disposal facilities and location. 

Green Infrastructure. Provide the following information for green 

infrastructure alternatives: 

 Control Measures Selected. Identify types of control measures 

selected (e.g., vegetated areas, planter boxes, permeable pavement, 

rainwater cisterns).  Layout: Identify placement of green infrastructure control measures, 

flow paths, and drainage area for each control measure.  Sizing: Identify surface area and water storage volume for each green 

infrastructure control measure. Where applicable, soil infiltration rate, 

evapotranspiration rate, and use rate (for rainwater harvesting) should 

also be addressed.  Overflow: Describe overflow structures and locations for conveyance 

of larger precipitation events. 

b) Project Schedule. Identify proposed dates for submittal and anticipated approval 

of all required documents, land and easement acquisition, permit applications, 

advertisement for bids, loan closing, contract award, initiation of construction, 

substantial completion, final completion, and initiation of operation. 

c) Permit Requirements. Identify any construction, discharge and capacity permits 

that will/may be required as a result of the project. 

d) Sustainability Considerations (if applicable). 

i) Water and Energy Efficiency. Describe aspects of the proposed project 

addressing water reuse, water efficiency, and water conservation, energy 

efficient design, and/or renewable generation of energy, if incorporated into 

the selected alternative. 

ii) Green Infrastructure. Describe aspects of project that preserve or mimic 

natural processes to manage stormwater, if applicable to the selected 

alternative. Address management of runoff volume and peak flows through 

infiltration, evapotranspiration, and/or harvest and use, if applicable. 

iii) Other. Describe other aspects of sustainability (such as resiliency or 

operational simplicity) that are incorporated into the selected alternative, if 

incorporated into the selected alternative. 

e) Total Project Cost Estimate (Engineer’s Opinion of Probable Cost). Provide an 

itemized estimate of the project cost based on the stated period of construction. 

Include construction, land and right-of-ways, legal, engineering, construction 

program management, funds administration, interest, equipment, construction 

contingency, refinancing, and other costs associated with the proposed project. 

The construction subtotal should be separated out from the non-construction 

costs. The non-construction subtotal should be included and added to the 
16 

construction subtotal to establish the total project cost. An appropriate 

construction contingency should be added as part of the non-construction subtotal. 

For projects containing both water and waste disposal systems, provide a separate 

cost estimate for each system as well as a grand total. If applicable, the cost 

estimate should be itemized to reflect cost sharing including apportionment 

between funding sources. The engineer may rely on the owner for estimates of 

cost for items other than construction, equipment, and engineering. 

f) Annual Operating Budget. Provide itemized annual operating budget 

information. The owner has primary responsibility for the annual operating 

budget, however, there are other parties that may provide technical 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. 

i) Income. Provide information about all sources of income for the system 

including a proposed rate schedule. Project income realistically for existing 

and proposed new users separately, based on existing user billings, water 

treatment contracts, and other sources of income. In the absence of historic 

data or other reliable information, for budget purposes, base water use on 100 

gallons per capita per day. Water use per residential connection may then be 

calculated based on the most recent U.S. Census, American Community 

Survey, or other data for the state or county of the average household size. 

When large agricultural or commercial users are projected, the Report should 

identify those users and include facts to substantiate such projections and 

evaluate the impact of such users on the economic viability of the project. 

ii) Annual O&M Costs. Provide an itemized list by expense category and project 

costs realistically. Provide 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 O&M cost estimates. Include personnel costs, administrative 

costs, water purchase or treatment costs, accounting and auditing fees, legal 

fees, interest, utilities, energy costs, insurance, annual repairs and 

maintenance, monitoring and testing, supplies, chemicals, residuals disposal, 

office supplies, printing, professional services, and miscellaneous as 

applicable. Any income from renewable energy generation which is sold back 

to the electric utility should also be included, if applicable. If applicable, note 

the operator grade needed. 

iii) Debt Repayments. Describe existing and proposed financing with the 

estimated amount of annual debt repayments from all sources. All estimates 

of funding should be based on loans, not grants. 

iv) Reserves. Describe the existing and proposed loan obligation reserve 

requirements for the following: 

Debt Service Reserve – For specific debt service reserve requirements 

consult with individual funding sources. If General Obligation bonds are 

proposed to be used as loan security, this section may be omitted, but this 

should be clearly stated if it is the case. 
17 

Short-Lived Asset Reserve – A table of short lived assets should be 

included for the system (See Appendix A for examples). The table should 

include the asset, the expected year of replacement, and the anticipated 

cost of each. Prepare a recommended annual reserve deposit to fund 

replacement of short-lived assets, such as pumps, paint, and small 

equipment. Short-lived assets include those items not covered under 

O&M, however, this does not include facilities such as a water tank or 

treatment facility replacement that are usually funded with long-term 

capital financing. 

7. 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, and any other necessary considerations.
18 

Appendix A: Example List of Short-Lived Asset Infrastructure 

Estimated Repair, Rehab, Replacement Expenses by Item within up to 20 Years from Installation)

Drinking Water Utilities Wastewater Utilities

Source Related Treatment Related

Pumps Pump

Pump Controls Pump Controls

Pump Motors Pump Motors

Telemetry   Chemical feed pumps

Intake/ Well screens Membrane Filters Fibers

Water Level Sensors Field & Process Instrumentation Equipment

Pressure Transducers UV lamps

Treatment Related Centrifuges

Chemical feed pumps   Aeration blowers

Altitude Valves Aeration diffusers and nozzles

Valve Actuators Trickling filters, RBCs, etc.

Field & Process Instrumentation Equipment Belt presses & driers

Granular filter media Sludge Collecting and Dewatering Equipment

Air compressors & control units Level Sensors

Pumps Pressure Transducers

Pump Motors Pump Controls

Pump Controls Back‐up power generator

Water Level Sensors Chemical Leak Detection Equipment

Pressure Transducers Flow meters

Sludge Collection & Dewatering   SCADA Systems

UV Lamps Collection System Related

Membranes Pump

Back‐up power generators Pump Controls

Chemical Leak Detection Equipment Pump Motors

Flow meters   Trash racks/bar screens

SCADA Systems Sewer line rodding equipment

Distribution System Related Air compressors

Residential and Small Commercial Meters Vaults, lids, and access hatches

Meter boxes Security devices and fencing

Hydrants & Blow offs Alarms & Telemetry

Pressure reducing valves Chemical Leak Detection Equipment

Cross connection control devices

Altitude valves

Alarms & Telemetry

Vaults, lids, and access hatches

Security devices and fencing

Storage reservoir painting/patching