Arkansas Administrative Code › Agency 138 - Arkansas Natural Resources Commission › Rule 138.00.06-001 - Title XXIII - Rules Governing Water & Wastewater Project Funding through the Arkansas Community and Economic Development Program

Current through Register Vol. 49, No. 6, June, 2024
Rules Governing Water and Wastewater Project Funding
			 through the Arkansas Community and Economic Development Program (2006)
Title XXIII
Preamble To Title 23
The Community Development Block Grant (CDBG) Program was
			 established by Congress in the Housing and Community Development Act of 1974.
			 That Act merged a group of programs into a "block" of flexible community
			 development funds distributed each year to further three national
			 objectives:
1. to benefit low to
		  moderate income persons;
2. to aid
		  in the prevention or elimination of slums or blight; and
3. to address community development needs
		  having a particular urgency.
24 CFR Part
			 570 contains the Federal regulations
			 pertaining to all of the Community Development programs. Arkansas participates
			 in the State Community Development Block Grant Program (24 CFR 570, Subpart I),
			 and created the Arkansas Community and Economic Development Program (ACEDP) to
			 administer the State CDBG Program. Water and Wastewater CDBG grants are made
			 through the ACEDP.
ACEDP Water and Wastewater grants are competitive grants.
			 Applications are rated according to specific criteria designed to ensure that
			 one of the three national objectives of the Housing and Community Development
			 Act are being met. The funds are intended to fill in after all other sources of
			 funding have been exhausted.
ACEDP has been, and generally continues to be, administered by
			 the Arkansas Department of Economic Development (ADED). A Memorandum of
			 Agreement between the Arkansas Natural Resources Commission (the Commission)
			 and ADED partners the two agencies and permits the Commission to take over the
			 ACEDP Water and Wastewater project selection process. This authority covers
			 only Water and Wastewater projects. ADED continues to administer all other
			 ACEDP project types according to that Department's own rules and
			 policies.
Subtitle I
Introductory Provisions
Section 2301.1
General
		  Administration
A. The
		  Arkansas Natural Resources Commission (the Commission) administers Arkansas
		  Community and Economic Development Program (ACEDP) grants for water and
		  wastewater projects.
B. The
		  Commission distributes federal funds under this program. The Commission rates
		  and selects applications for funding according to specific criteria designed to
		  meet one of the three national objectives identified in the Preamble. Projects
		  scoring the highest rating are funded until the available funds are obligated.
		  The funds are intended to fill in after all other sources of funding have been
		  exhausted.
C. The Arkansas
		  Department of Economic Development (ADED) administers ACEDP grants for all
		  other project categories.
Section
		  2301.2
Enabling and Relevant
		  Authorities
A. The
		  Housing and Community Development Act of 1974, as amended, codified at 42 USC
		  5301
et seq
.
B.
		  Title 24 of the Code of Federal Regulations, Part
		  570, Subpart I.
C. Memorandum of Agreement between the
		  Commission and ADED, executed June 10, 2004, in which the Commission agreed to
		  administer ACEDP grants for qualifying water and wastewater projects.
D. Title I, Rules of Organization and General
		  Operation of the Arkansas Natural Resources Commission
		  (2005).
Section 2301.3
Definitions
The following definitions apply to all parts of these rules. If a
			 word or term is not expressly defined in this section, then it is understood to
			 have the common usage meaning to give the most reasonable application to these
			 rules.
1.
ACEDP -
The
		  Arkansas Community and Economic Development Program is the State program
		  through which federal Community Development Block Grant (CDBG) funds are
		  distributed to local communities.
2.
Beneficiary
- Any household
		  benefiting from the water or wastewater project by connecting to the
		  centralized water or wastewater system is considered to be a beneficiary of the
		  project.
3.
Benefit
-
		  Benefit is defined as the availability of water or wastewater service to a
		  household, whether the household chooses to subscribe to the service or
		  not.
4.
Categorical ACEDP
		  grants
- ACEDP grants are classified by ADED as either categorical
		  grants or economic development grants. Categorical grants include water and
		  wastewater system grants, grants for childcare facilities, senior citizen
		  centers, public health facilities, and multi-purpose community centers, while
		  economic development grants are primarily focused on creating jobs for low and
		  moderate-income families.
5.
CDBG Program
- Formally known as "Title 1" of the Housing and
		  Community Development Act of 1974, as amended, the Community Development Block
		  Grant Program is run by the U.S. Department of Housing and Urban Development
		  (HUD) with a primary objective of improving communities by providing "decent
		  housing," a "suitable living environment," and "expanding economic
		  opportunities," all "principally for persons of low and moderate
		  income."
6.
Chief Executive
		  Officer
- This term refers to the Grantee's elected or legally
		  designated official with the primary responsibility for the conduct of
		  governmental affairs. The County Judge of a County and the Mayor of an
		  incorporated municipality are Chief Executive Officers.
7.
Competitive negotiation
-
		  Competitive negotiation is the process of awarding a procurement contract by
		  comparing multiple bidders and selecting the proposal most beneficial to the
		  community based on predetermined selection criteria. In competitive
		  negotiation, contractors are required to submit cost proposals that show the
		  elements (e.g., labor, materials) of their proposed costs or prices.
8.
Corrective action
- This
		  term refers to behavior that brings a non-compliant situation back into
		  compliance. For example, corrective action for failing to document a certain
		  activity would be to obtain the documentation; corrective action for failing to
		  post a notice would be to post the notice.
9.
Cost analysis
- Cost analysis
		  is the evaluation of the separate elements (e.g., labor, materials, etc.) that
		  make up a contractor's total cost proposal or price to determine if the element
		  is allowable, directly related to the requirement, and ultimately, reasonable.
		  Cost analysis must be performed when sealed bids are received or in a
		  non-competitive negotiation, or when negotiating a modification (including
		  change orders) to any type of contract.
10.
Cost-plus contracts
-
		  Cost-plus contracts are cost-reimbursement contracts that provide for a fee
		  consisting of a fixed base amount (which may be zero) plus an award amount,
		  based upon a judgmental evaluation, designed to provide motivation for contract
		  performance.
11.
Cost-reimbursement contracts
- Cost-reimbursement contracts
		  provide for payment of allowable incurred costs to the extent prescribed in the
		  contract. These contracts establish an estimate of total cost for the purpose
		  of obligating funds and creating a ceiling that the contractor may not exceed
		  without approval.
12.
Customer
- A customer is a residential household using the water
		  or wastewater utility. Commercial structures and public structures such as
		  churches, schools or community centers cannot be counted as
		  customers.
13.
Disbursements
- Disbursements are checks written to pay for goods
		  or services associated with the Project.
14.
Entitlement community
-
		  Urban counties populated by 200,000 or more persons (excluding the population
		  of entitled cities), metropolitan cities populated by 50,000 or more persons,
		  or a principal city of a Metropolitan Statistical Area (MSA) are entitlement
		  communities and receive CDBG funds directly from HUD instead of the State. The
		  cities of Bentonville, Conway, Fayetteville, Ft. Smith, Hot Springs,
		  Jacksonville, Jonesboro, Little Rock, North Little Rock, Pine Bluff, Rogers,
		  Springdale, Texarkana and West Memphis are all entitlement communities and are
		  ineligible for ACEDP funding.
15.
Environmental Clearance Letter
- The Environmental Clearance
		  Letter is a written determination from the Arkansas Natural Resources
		  Commission of apparent compliance with the environmental review requirements of
		  24 CFR Part
		  58.
16.
Environmental Review
- This
		  process, described in 24 CFR Part
		  58, provides instructions and guidance to
		  Grantees for ensuring compliance with the National Environmental Policy Act
		  (NEPA).
17.
Fixed-price
		  contracts
- Fixed-price contracts provide for a firm price for goods or
		  services or, in appropriate cases, an adjustable price with a fixed
		  ceiling.
18.
Grant
		  agreement
- The grant agreement is the contract between the Arkansas
		  Natural Resources Commission and the Grantee, detailing the provisions and
		  conditions of the ACEDP grant.
19.
Hard Costs
- Hard costs are actual material construction
		  costs.
20.
Low to moderate
		  income (LMI)
- Low to moderate income means income less than or equal to
		  the Section
		  8 low-income limit established by HUD.
		  Note that Section
		  8 refers to "very low" and "low" incomes
		  instead of "low" and "moderate" incomes. In the CDBG program, "low" income
		  equates to Section
		  8 's "very low" income, and "moderate"
		  income equates to Section
		  8 's "low" income.
21.
Median household income
-
		  The median household income is considered by many statisticians to be a better
		  indicator than the average household income, since it is not dramatically
		  affected by unusually high or low values. It is obtained by listing, in
		  numerical order, all household incomes and selecting the income in the middle
		  of the list.
22.
Noncompetitive negotiation
- Noncompetitive negotiation is the
		  process of awarding a procurement contract to a single source without comparing
		  competitive bids.
23.
Open
		  grant
- An ACEDP grant is considered to be open after the grant
		  agreement document has been signed until a closure letter is issued by the
		  Arkansas Natural Resources Commission.
24.
Price analysis
- Price
		  analysis is essentially a price comparison without analyzing any of the
		  separate cost elements. Price analysis is required in competitive negotiations
		  to determine the reasonableness of the proposed contract.
25.
Procurement
- Procurement is
		  the process of obtaining services, supplies, and equipment in conformance with
		  applicable laws and regulations.
26.
Program income
- ACEDP
		  program income is gross income directly generated as a result of the ACEDP
		  grant (i.e., fees for services performed, money from the use, sale, or rental
		  of equipment purchased with project funds, sale of project materials or
		  supplies). Program income is not anticipated in ACEDP water and wastewater
		  projects.
27.
Project
- This term refers to the construction plan identified by the applicant and may
		  be the installation of, modification of or addition to a centralized water
		  distribution system or wastewater collection system.
28.
Project Administrator
- The
		  Project Administrator is an individual hired by the Grantee to ensure that the
		  Project is conducted in accordance with all applicable Federal, State and
		  agency requirements. Project Administrators are required for ACEDP grants
		  because the Responsible Party for the grant (the Chief Executive Officer of the
		  Grantee) will likely not have expertise in all required areas.
29.
Project close-out
-
		  Close-out is the process through which all applicable administrative activities
		  and required work of the grant agreement are certified as complete, with no
		  unmitigated findings of noncompliance.
30.
Reasonable access
-
		  Reasonable access means there are no significant geographic, economic or social
		  barriers created by government to limit access by citizens during normal
		  working hours.
31.
Records
- Project records are data or information of any kind and
		  in any form, created or received and accumulated in the application for,
		  receipt of, administration of or use of ACEDP grants associated with a
		  particular project.
32.
Residential
-Residential means a structure where one or more
		  persons live.
33.
Seasonal
		  residents
- Persons who own a residence within the project area and
		  reside there for at least 1 day each year, but less than 180 days each
		  year.
34.
Simplified
		  procurement
- In simplified procurement, goods or services are purchased
		  by comparing a list of prices and choosing the least expensive
		  provider.
35.
Soft
		  Costs
- Soft costs are non-construction costs (engineering fees,
		  abstracting service costs, surveys, administration fees)
.
36.
State Water Plan
- The Arkansas State Water Plan is a comprehensive state-wide plan dealing with
		  water systems, water supplies, water rights allocation, flood plain management,
		  non-point source pollution abatement, dam safety, and wetlands mitigation
		  banking. The goal of the State Water Plan is for every individual in the State
		  to have all of the water they need for any beneficial purpose.
37.
Uninhabitable residences
-
		  Residential structures are considered to be "uninhabitable" if they fail to
		  meet any local or state construction or health code for residential
		  structures.
38.
WWAC
-
		  The Water/Wastewater Advisory Committee was organized to streamline,
		  consolidate, simplify and improve the method by which communities access the
		  state funding system for water and wastewater projects. It provides project
		  development guidance and recommends project financing to communities through
		  one single preliminary application process.
Subtitle II
Eligibility
Section
		  2302.1
Eligible Projects
To be eligible for ACEDP grants through the Commission, Grantees
			 must demonstrate that:
A. Projects
		  satisfy one of the following criteria:
1. 51%
		  or more of the project beneficiaries must be low to moderate income (LMI)
		  persons, or
2. The project must be
		  recognized by the Commission as particularly urgent to address a serious and
		  immediate threat to the health or welfare of the community.
B. Projects eligible under §
										2302.1(A)(1)
		  provide water service or wastewater system service to at least one new
		  customer, resulting in 300 or more total service customers, unless specifically
		  exempted from this requirement by the Executive Director of the
		  Commission;
C. ACEDP grants will
		  not be used to reduce annual water or wastewater rates below those resulting in
		  annual bills of 1% of the beneficiary median household income, assuming an
		  average of 4,000 gallons per month usage;
D. Projects are of such a scope that
		  completed construction can be reasonably expected within three years of signing
		  the grant agreement; and
E.
		  Projects comply with the State Water Plan (if applicable).
Section 2302.2
Open Grant
		  Limitation
A. ACEDP
		  grants are classified by ADED as either
categorical grants
,
		  including grants to fund the construction of water and wastewater systems,
		  childcare facilities, senior citizen centers, public health facilities, and
		  multi-purpose community centers, general assistance purposes, or
economic development grants
for projects primarily focused on
		  creating jobs for low and moderate-income families.
B. Incorporated municipality Grantees may
		  have only a single
categorical
ACEDP grant, for any purpose
		  and from any agency, open at any given time. Grants classified as
economic development grants
are not included in this
		  limitation.
C. County Grantees may
		  have a total of two open
categorica
l ACEDP grants, for any
		  purpose and from any agency, issued to the county at any given time. Grants
		  classified as
economic development grants
are not included in
		  this limitation.
D. The Commission
		  must close ACEDP grants within one year following completed
		  construction.
Section
		  2302.3
Eligible Applicants
Any general unit of local government within the state may be the
			 recipient of ACEDP funding for an eligible project, provided that the applicant
			 is not an entitlement community.
Section
		  2302.4
Eligible Applications
Any application submitted by an eligible applicant for an
			 eligible project will be considered by the Commission, so long as the
			 application complies with all other provisions of this
			 Title.
Subtitle
		  III
Application and
		  Selection
Section 2303.1
Water/Wastewater Advisory Committee
		  Pre-Application
A.
		  Applicants seeking to qualify for an ACEDP grant on the basis that 51% or
		  greater of the beneficiaries are LMI must obtain Water/Wastewater Advisory
		  Committee (WWAC) approval of the project before applying to the Commission for
		  the ACEDP grant.
B. The WWAC meets
		  monthly to review pre-applications. Applicants must submit new projects to the
		  WWAC no later than December 15th, for review at the January WWAC meeting.
		  Applicants must also submit LMI information with the WWAC pre-application
		  packet.
C. Applicants must submit
		  WWAC pre-applications on forms supplied by the WWAC. The WWAC will review
		  submissions monthly according to WWAC policies and
		  schedules.
Section 2303.2
Commission Application
A. Applicants must submit new projects to the
		  Commission on the form supplied by the Commission and must include all
		  information and documentation required by the form.
B. Applicants must submit completed
		  applications for ACEDP grants to the Commission no later than February
		  1st.
C. The Commission will not
		  charge a fee for processing or considering any application for an ACEDP
		  grant.
D. Applicants must ensure
		  all estimated project costs are current to within 12 months of the submission
		  date, and are encouraged to submit the most up-to-date costs
		  available.
E. Applicants must
		  ensure all other data submitted with the application, or used to generate
		  figures submitted with the application, must be directly relevant to the
		  project. Any time the scope of the project changes, the data must be revised
		  accordingly.
Section
		  2303.3
Applications Based on
		  LMI
A. Applicants must
		  demonstrate LMI beneficiary percentages of 51% or greater, based on
1. a survey of 100% of the households
		  affected by the project, current to within 36 months;
2. data from the most recent US Census;
		  or
3. specific project clientele
		  (including elderly persons, severely disabled adults, illiterate adults and
		  migrant farm workers) classified as LMI regardless of income.
B. Applicants must adhere to the
		  following guidelines when conducting LMI surveys:
1. Only residential households may be counted
		  as beneficiaries.
2. If the
		  property is rental, the renter counts as the beneficiary for LMI determination
		  purposes.
3. Seasonal residents who
		  receive service for any part of the year are counted as
		  beneficiaries.
4. Vacant lots and
		  uninhabitable residences do not count as beneficiaries.
5. Vacant, inhabitable residences count as
		  Non-LMI beneficiaries.
6. Residents
		  who do not respond in an income eligibility survey count as Non-LMI
		  beneficiaries.
C.
		  Applicants who fail to document 51 percent or more of the beneficiaries are LMI
		  at the close of the project will be disqualified from ACEDP funding. In such
		  cases the Commission will pursue Remedies per Section
		  2305.1
		  of this Title.
Section
		  2303.4
Imminent Threat to Health and
		  Safety
A. In particularly
		  urgent situations posing a serious and immediate threat to the health or safety
		  of a community, the Commission may solicit an ACEDP application concurrent with
		  a WWAC pre-application.
B. The
		  Commission may solicit an ACEDP application for an imminent threat water
		  project when a public water supply sample or at least one private well water
		  sample has been identified by an appropriately certified testing laboratory as
		  failing to meet any primary drinking water standard of the 1974 Safe Drinking
		  Water Act, as amended.
C. The
		  Commission may solicit an ACEDP application for an imminent threat wastewater
		  project when the Arkansas Department of Environmental Quality identifies a
		  wastewater treatment system as insufficient or malfunctioning, or when the
		  Arkansas Department of Health and Human Services County Sanitarian reports a
		  private septic system to be malfunctioning.
D. The Commission will neither solicit nor
		  award non-LMI ACEDP grants in a manner inconsistent with federal aggregate
		  grant percentage requirements.
Section
		  2303.5
Project Resubmission
Applicants may resubmit unfunded projects for consideration,
			 provided that:
1. The scope of the
		  project has not changed since the previous application;
2. The cost estimate for the project is
		  current to within 12 months;
3. The
		  non-cost data submitted, or used to prepare the application, are current to
		  within 36 months;
4. The project
		  had been approved by the WWAC prior to the previous submission; and
5. A new State Clearinghouse Application
		  Supplement Form (CH-2) and new Application for Federal Assistance Form
		  (Standard Form 424) are submitted.
Section 2303.6
Commission
		  Review and Selection Criteria
A. Commission staff will review applications
		  in a timely manner, and corrections will be permitted up until the February 1st
		  submission deadline.
B. Commission
		  staff will select eligible projects for ACEDP grants from eligible applicants,
		  subject to funding availability, based on two general criteria:
1. Readiness to Proceed
a) The Commission will award 75 points to applicants
		  who provide a document, current to within 12 months, from an approved funding
		  source which indicates the approved funding source expects to extend funds to
		  the project during the current calendar year.
b) The Commission will award 50 points to
		  applicants who provide a document, current to within 12 months, from an
		  approved funding source which indicates the approved funding source does not
		  expect funds to be available for the project during the current calendar year,
		  although funding may be available the following year.
c) The Commission will award 25 points to
		  applicants who provide a document, current to within 12 months, from an
		  approved funding source acknowledging receipt of the application and
		  considering the project for funding.
2. High Percentage of Low to Moderate Income
		  Beneficiaries
Applicants will receive from 13 to 25 points based upon the % of
			 LMI beneficiaries. The exact number of points is determined by multiplying the
			 percentage of the project's beneficiaries who are LMI by 25.
a) For this calculation, the LMI will be
		  expressed as a decimal with 3 decimal places.
b) Fractional results of this calculation
		  greater than or equal to 0.500 will be rounded up to the next higher whole
		  number. Fractional results of this calculation less than 0.500 will be
		  dropped.
C. The
		  Commission may award an ACEDP grant on a non-competitive basis and without
		  regard to the criteria cited in (B) above in order to address an imminent
		  threat to the health or safety of a community.
Section 2303.7
Ties
If two applications at the bottom of the funding list receive an
			 equal rating and the Commission only has funding for one of the projects, the
			 project with the highest percentage of LMI beneficiaries will be funded.
Section 2303.8
ACEDP Recipient Requirements
Prior to the awarding of the grant, applicants selected by the
			 Commission to receive ACEDP monies must accept and agree to abide by all
			 Federal and State requirements and by the policies contained in the
			 Commission's ACEDP Policy Manual throughout the duration of the project.
			 Subsequent changes to the Commission's ACEDP Policy Manual will not be binding
			 upon ACEDP agreements entered into prior to a
			 revision.
Subtitle
		  IV
Administrative Procedures
Section 2304.1
Project
		  Administration
The Commission requires Grantees to hire regional Planning and
			 Development District personnel, or a private grants management firm with
			 expertise in water or wastewater project management, to administer ACEDP
			 projects. The Commission does not permit Grantees to administer their own
			 project, regardless of their level of expertise.
Section 2304.2
Public
		  Participation
A. Grantees
		  must prepare and follow a written plan to encourage citizen participation in
		  funded projects.
1. A citizen participation
		  plan should allow for the receipt of written grievances from citizens and
		  provide timely responses to those grievances.
2. The needs of non-English speaking
		  residents should also be considered and an interpreter should be provided at
		  public hearings where non-English speaking residents are expected to
		  attend.
B. Citizens must
		  be given reasonable and timely access to local meetings, information, and
		  records related to the Grantee's proposed and actual use of funds.
C. A minimum of two public hearings are
		  required on a standard project.
1. One public
		  hearing must be held during the initial planning phase of the project to
		  discuss the need for the project with the citizens.
2. Another public hearing must be held at the
		  end of the project to review what the project has done to address the needs of
		  the community.
Section
		  2304.3
Project Records
A. All records pertaining to the project
		  application, receipt of the grant, administration and use of the ACEDP grant
		  must be maintained in accordance with the recordkeeping requirements of 24 CFR
		  Part
		  570, Subpart I and in a manner
		  acceptable to the Commission.
B. A
		  complete set of records must be maintained on the premises of
1. The Project Administrator, if the Project
		  Administrator is a Planning and Development District employee, or
2. The Chief Executive Officer for the
		  Grantee, if the Project Administrator is a private consulting firm.
C. All records must be maintained
		  for a minimum of four years after the Commission has closed the
		  project.
D. Representatives of HUD,
		  the Inspector General, the General Accounting Office and the Commission must be
		  allowed reasonable access to all project records for review and audit
		  purposes.
E. Citizens must be
		  allowed reasonable access to all project records.
Section 2304.4
Environmental Review
A. Grant monies may not be expended on
		  activities other than eligible administrative costs, engineering design, or
		  Environmental Review consistent with the requirements of 24 CFR Part
		  58.
B. Upon completion of the Environmental
		  Review, the Grantee must request an Environmental Clearance Letter from the
		  Commission and file a Request for Release of Funds ("RRF")
		  form.
Section 2304.5
General Requirements for All Procurements
A. Grantees procuring goods or services using
		  ACEDP grant funds must take all necessary affirmative steps to assure that
		  minority firms, women's business enterprises, and labor surplus area firms
		  listed as relevant vendors by ADED are used when possible. Affirmative steps
		  include:
1. Before requesting or advertising
		  for bids, Grantees must advise the ADED Small and Minority Business Unit of the
		  project, the bid date, and where to obtain bid specifications in order to allow
		  that office to notify small and minority businesses and women's business
		  enterprises which are potential sources;
2. Grantees must divide total requirements,
		  when economically feasible, into smaller tasks or quantities to permit maximum
		  participation by small and minority business, and women's business
		  enterprises;
3. Grantees must
		  establish delivery schedules, where the requirement permits, which encourage
		  participation by small and minority business, and women's business enterprises;
		  and
4. Grantees must specifically
		  require the prime contractor to take all of these same affirmative steps
		  whenever letting a subcontract.
B. Grantees are responsible for advising
		  contractors of their equal opportunity responsibilities, particularly at the
		  pre-construction conference, and for maintaining equal opportunity compliance
		  documentation. Equal opportunity provisions must be included in all bid
		  packages and construction contracts. Specific language and sample bid packages
		  are available from the Commission upon request.
C. Grantees may award only fixed-price or
		  cost-reimbursement contracts using ACEDP grant funds. Cost-plus contracts are
		  not acceptable.
Section
		  2304.6
Specific Procurement
		  Procedures
A. Grantees
		  may use any of four types of procurement, as appropriate for a given
		  procurement situation:
1. Simplified
		  procurement is an informal method of securing services or supplies by obtaining
		  price quotes from an adequate number of qualified sources. For the purposes of
		  this Title, three price quotes are adequate. Grantees may use simplified
		  procurement whenever a good or service costs less than the simplified
		  acquisition threshold fixed at 41 U.S.C. 403(11).
2. Procurement by sealed bids is a formal
		  method of securing services or supplies by publicly soliciting bids and
		  awarding the contract to the responsible bidder whose bid, conforming with all
		  the material terms and conditions of the invitation for bids, is the lowest in
		  price.
a) Grantees should use procurement by
		  sealed bids for procuring construction as long as:
i) A complete, adequate, and realistic
		  specification or purchase description is available;
ii) Two or more responsible bidders are
		  willing and able to compete effectively for the business; and
iii) The procurement lends itself to a firm
		  fixed price contract and the selection of the successful bidder can be made
		  principally on the basis of price.
b) Grantees must comply with the following
		  requirements whenever procuring goods or services by sealed bids:
i) Grantees must solicit bids by advertising
		  for a thirty-day period in the Arkansas Democrat-Gazette (or the Northwest
		  edition of that paper, as appropriate for the project region);
(1) The advertisement must appear twice, at a
		  minimum.
(2) The first publication
		  of the advertisement begins the thirty-day period.
(3) The second publication of the
		  advertisement must occur one calendar week before the end of the thirty-day
		  period.
(4) If the second
		  publication is delayed for any reason, the public notice period must be
		  extended to one calendar week after the second publication.
ii) Grantees must identify all factors to be
		  used in evaluating submitted proposals, including the importance of price or
		  cost, in the invitation for bids;
iii) Grantees must publicly open all bids at
		  the time and place specified in the advertisement;
iv) Grantees must evaluate all submitted
		  bids;
v) Grantees must, in writing,
		  award the contract to the responsive bidder who best satisfies all of the
		  selection factors. If all other factors are equally met, the lowest responsive
		  bidder will be selected;
vi)
		  Grantees must also notify, in writing, all unsuccessful bidders; and
vii) Grantees may reject any or all bids if
		  there is a sound documented reason.
3. Procurement through competitive
		  negotiation is another formal method of securing services or supplies by
		  publicly soliciting bids. Grantees may use competitive negotiation for
		  qualifications-based procurement of engineering professional services where the
		  contract is awarded to the most qualified competitors, subject to negotiation
		  of fair and reasonable compensation.
a) The
		  requirements of (b)(i) through (b)(iv), (b)(vi) and (b)(vii) above also apply
		  to competitive negotiations.
b)
		  Grantees may award contracts to the submitted proposal most advantageous to the
		  Grantee, considering only the factors specified in the published
		  advertisement.
c) Grantees may only
		  use this procurement method, where price is not the determining factor, in
		  procurement of engineering professional services. Competitive negotiation
		  cannot be used to purchase any other types of services or
		  goods.
4. Procurement
		  through non-competitive negotiation is solicitation of a proposal from only one
		  source, or the finding of inadequate competition after soliciting bids from a
		  number of sources. Grantees may use non-competitive negotiation only if the
		  award of a contract by simplified procurement, sealed bids or competitive
		  negotiation is not possible and one of the following circumstances applies:
a) A published Request for Proposals results
		  in only one proposal;
b) The items
		  or services required are available only from one source;
c) Sole-sourcing of the contract has been
		  approved by the Commission; or
d)
		  A public emergency will not permit a delay beyond the time needed to employ the
		  competitive negotiation method.
B. Grantees must perform a cost or price
		  analysis in connection with every procurement action, including contract
		  modifications. The method and degree of analysis is dependent on the facts
		  surrounding the particular procurement situation, but as a starting point
		  Grantees must make independent estimates before receiving bids or proposals.
1. Grantees must perform a cost analysis when
		  procurement is made through sealed bids and the bidder is required to submit
		  the elements of the estimated cost (a common requirement for professional,
		  consulting, and architectural engineering services contracts).
2. Grantees must always perform a cost
		  analysis when procurement is made through non-competitive negotiations, unless
		  price reasonableness can be established on the basis of a catalog or market
		  price of a commercial product sold in substantial quantities to the general
		  public or based on prices set by law or regulation.
3. Grantees must perform a price analysis in
		  all other instances to determine the reasonableness of the proposed contract
		  price.
Section
		  2304.7
Timing of Costs
A. Grantees may not hire, purchase, or
		  otherwise obligate payment for any non-construction materials or professional
		  services (soft costs) related to the project with an expectation of
		  reimbursement from this program until receipt of the grant award notification
		  letter from the State.
B. Grantees
		  may not purchase materials or begin construction (hard costs) until the
		  Commission issues an Environmental Clearance Letter for the Project.
C. If a Grantee purchases materials or begins
		  construction before the Commission issues an Environmental Clearance Letter for
		  the project, the Commission will terminate the grant, de-obligate the funds and
		  subject the Grantee to the provisions of Section
		  2305.1
		  of this Title if disbursements have been made.
Section 2304.8
Requests for
		  Payment
A. The Commission
		  will accept a Request for Payment (RFP) only after issuing an Environmental
		  Clearance Letter for the project.
B. Grantees must submit an RFP on a form
		  provided by the Commission.
C.
		  Grantees must submit copies of invoices for all items claimed on the
		  RFP.
D. An authorized person must
		  sign each RFP submitted to the Commission.
1.
		  Persons authorized to submit an RFP must be listed, with signatures, on the
		  Request for Payment Signature Form.
2. Persons authorized to submit an RFP are
		  prohibited from disbursing payments and must not be authorized to do so on the
		  Bank Designation and Check Signature Form.
3. Persons authorized to submit an RFP must
		  not have any financial interest in the Project.
Section 2304.9
Bank Account
		  and Check Writing Procedures
A. Grantees must provide a dedicated,
		  FDIC-insured, non-interest bearing checking account to receive ACEDP funds by
		  electronic direct deposit.
1. Grantees may not
		  use an existing account held by the Grantee for general use.
2. Grantees must not deposit any funds other
		  than ACEDP Grant funds into this account. Grantees must use this account solely
		  to receive and expend ACEDP grant funds.
3. Grantees must ensure the checking account
		  features numbered checks that are preprinted with the project name as well as
		  the ACEDP Grant Control ID number and require a countersignature for
		  issuance.
B. Unless the
		  Grantee's method of appropriating funds has been approved by the Commission, a
		  minimum of two persons, whose signatures appear on the Bank Designation and
		  Check Signature Form, must be authorized to sign and countersign disbursement
		  checks.
1. At least one person authorized to
		  sign checks on the ACEDP Grant account must be an employee of the Grantee and
		  must be bonded under the Grantee's public employee blanket performance
		  bond.
2. Persons authorized to sign
		  checks on the ACEDP Grant account are prohibited from signing any RFP and must
		  not be authorized to do so on the Request for Payment Signature Form.
3. Persons authorized to sign checks on the
		  ACEDP Grant account must not have any financial interest in the
		  Project.
C. Grantees may
		  only issue disbursement checks for eligible expenditures.
Section 2304.10
Eligible
		  Expenditures
The following items are eligible for repayment with ACEDP grant
			 funds:
1.
Construction
		  Costs.
Grantees may submit invoices for construction activities
		  specified in the grant agreement after the work has been performed. The Project
		  Engineer must certify that each construction invoice is accurate as to the work
		  that has been performed.
2.
Equipment.
Grantees may submit invoices for equipment after
		  installation of the equipment. Grantees may also request partial payments for
		  uninstalled equipment as long as the amount requested is for the material cost
		  of the equipment and not for any labor that is to be performed.
3.
Design Services and Engineering
		  Fees.
Grantees may submit invoices for Design Services and Engineering
		  Fees on a
pro rata
basis, according to fee payment schedules
		  established in the individual professional services contracts. Grantees may
		  seek to increase Design Services and Engineering Fees only for additional
		  services provided and subject to prior approval by the Commission.
4.
Acquisition.
Grantees may
		  submit invoices for activities related to acquisition (such as appraisals,
		  surveys, legal condemnation costs, abstractor fees, filing/recording fees, and
		  associated postage and publication costs).
5.
Permits, Fees, Testing.
Grantees may submit invoices for the cost of any permit, regulatory fee or
		  laboratory testing required by the project.
6.
Hook-up Fees.
The Commission
		  will determine the eligibility of hook-up fees on a project-by-project basis,
		  according to the scope of work defined in the grant agreement.
7.
Contract Administration.
Grantees may submit invoices for contract administration services on a
pro rata
basis, according to fee payment schedules established
		  in the individual Contract for Administrative Services. Grantees cannot
		  increase contract administration fees.
8.
General Administration.
Grantees may submit invoices for general administration fees for reasonable
		  expenditures directly attributable to grant expenses such as check printing
		  costs, advertisement fees, costs for files, postage, printing and other
		  grant-related activities.
9.
Audit Administration.
Grantees may submit invoices for the
pro rata
share of audit costs attributable to an audit of
		  ACEDP funds if the Commission has approved conducting the audit. Grantees are
		  not limited by a maximum individual audit cost, but the total amount of audit
		  expenditures cannot exceed the amount specified in the audit line item of the
		  grant agreement.
10.
Force
		  Account Work.
Grantees may submit invoices for force account labor,
		  materials and supply costs only if these items are specified in the grant
		  agreement.
11.
Connection
		  Fees.
Grantees may submit invoices for costs incurred modifying existing
		  utility systems as needed to serve the project after the Grantee enters into a
		  signed agreement with the entity charging the connection fee and construction
		  has begun.
12.
Other
		  Costs.
Grantees may submit invoices for an unbudgeted cost only if:
a. the Grantee provides written justification
		  for the expense;
b. the Commission
		  agrees that the expense is eligible; and
c. the Commission and the Grantee amend the
		  grant agreement.
Section
		  2304.11
Ineligible
		  Expenditures
The following items are not eligible for repayment with ACEDP
			 grant funds:
1.
Legal Fees.
Except for condemnation filing, which is covered as an acquisition fee,
		  Grantees may not submit invoices for legal fees.
2.
Operation and Maintenance.
Grantees may not submit invoices for operation and maintenance
		  costs.
Section 2304.12
Acquisition
A. Grantees acquiring property associated
		  with ACEDP projects must comply with all applicable Federal and State laws,
		  including but not necessarily limited to the Uniform Relocation Assistance and
		  Real Property Acquisition Policies Act (URA) of 1970; Section
		  104(d) of the Housing
		  and Community Development Act of 1974; DOT regulations published in 49 CFR 24;
		  HUD regulations published in
		  24
		  CFR 570.488; and A.C.A.
		  18-15-101
et seq
.
B.
		  Although this issue is not tracked by the Commission, Grantees are advised that
		  IRS Form 1099 is required for acquisition payments of $600 or
		  greater.
Section 2304.13
Program Income
The Commission does not expect Water and Wastewater projects to
			 produce any program income.
Section
		  2304.14
Audits and
		  Inspections
A. Grantees
		  are subject to Federal or State audits and inspections at any time in the grant
		  application process, the planning/design phase, the pre-construction phase, the
		  construction phase, the post-construction phase, or up to four years following
		  the closure of the project.
B.
		  Grantees must provide citizens with reasonable public access to records
		  regarding the project.
Section
		  2304.15
Project Closure
A. The Commission will close ACEDP projects
		  after determining that all administrative and construction activities required
		  under the grant agreement have been satisfactorily completed and that
		  outstanding compliance issues, if any, have been resolved.
B. Projects are not closed until the
		  Commission issues a closure letter.
Subtitle V
Enforcement
		  Provisions
Section 2305.1
Failure to comply
A. The Commission may institute corrective
		  action against a Grantee who fails to comply with any of the terms agreed upon
		  in the grant agreement.
B. The
		  Commission, after unsuccessfully attempting to resolve compliance issues
		  through a corrective action, may withhold, reduce, or de-obligate Grantee's
		  ACEDP grant monies.
C. The
		  Commission may take other action as appropriate to recapture ACEDP grant monies
		  expended in contravention to this Title or the requirements of 24 CFR Part
		  570.
D. The Commission may not seek to recapture
		  ACEDP funds legally expended on eligible activities.
Section 2305.2
Federal
		  Remedies
Remedies available to the Federal government against both the
			 Commission and the ACEDP grant recipient are detailed in 24 CFR 570, subpart I,
			 §570.496.
Subtitle
		  VI
Miscellaneous Provisions
Section 2306.1
Modifications to a Funded Project
A. The Commission must approve proposed
		  changes before any project may be modified.
B. The Commission will not consider any
		  request to modify a project unless the Grantee provides revised LMI beneficiary
		  and utility rate figures with the request.
C. The Commission may approve project
		  modifications if:
1. the modification does not
		  result in a failure to meet any of the Federal LMI benefit standards or State
		  selection criteria which initially qualified the project for ACEDP funding;
		  and
2. at least one public meeting
		  has been held to discuss the need for the modification and to solicit public
		  comment.
D. If an
		  approved modification results in a reduction of the total project costs and
		  excess funding, the Commission will de-obligate the excess ACEDP grant monies
		  and use the funds for other funded or eligible unfunded
		  projects.
Section 2306.2
Approved Funding Sources
The United States Department of Agriculture - Rural Development
			 is an approved funding source for the purposes of the ACEDP project selection
			 criteria found in Section
			 2303.6(B)(1).
Section 2306.3
Exceptions
The Executive Director of the Commission may set aside any
			 requirement of this Title not expressly required by Federal or State
			 law.