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(2) After EPA awards grant assistance for a project, the Federal share shall be the same for any grant increase that is within the scope of the project.
(3) The uniform lower Federal share established by the Governor does not apply to projects funded under §35.2024(b).
(e) Training facilities. The Federal share of treatment works required to train and upgrade waste treatment works operations and maintenance personnel may be up to 100 percent of the allowable cost of the project.
(1) Where a grant is made to serve two or more States, the Administrator is authorized to make an additional grant for a supplemental facility in each State. The Federal funds awarded to any State under section 109(b) for all training facilities shall not exceed $500,000.
(2) Any grantee who received a grant under section 109(b) before December 27, 1977, may have the grant increased up to $500,000 by funds made available under the Act, not to exceed 100 percent of the allowable costs.
(Approved by the Office of Management and Budget under control number 2040–0027)
[49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45896, Nov. 4, 1985; 55 FR 27097, June 29, 1990]
§ 35.2200 Grant conditions.
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In addition to the EPA General Grant Conditions (part 30 of this subchapter), each treatment works grant shall be subject to the conditions under §§35.2202 through 35.2218.
§ 35.2202 Step 2+3 projects.
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(a) Prior to initiating action to acquire eligible real property, a Step 2+3 grantee shall submit for Regional Administrator review and written approval the information required under §35.2040(b)(7).
(b) Before initiating procurement action for the building of the project, a Step 2+3 grantee shall submit for the Regional Administrator's review and written approval the information required under §§35.2040(b) (5) and (6), 35.2106, 35.2107, 35.2130 and 35.2140.
§ 35.2203 Step 7 projects.
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(a) Prior to initiating action to acquire real property, a Step 7 grantee shall submit for Regional Administrator review and written approval the information required under §35.2040(b)(7).
(b) Before approving a Step 7 grant amendment under §25.2036, the Regional Administrator shall determine that the applicant and its project have met the requirements of §§35.2040 (b)(6) and (g), 35.2106, 35.2107, and 35.2122.
[55 FR 27097, June 29, 1990]
§ 35.2204 Project changes.
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(a) Minor changes in the project work that are consistent with the objectives of the project and within the scope of the grant agreement do not require the execution of a formal grant amendment before the grantee's implementation of the change. However, the amount of the funding provided by the grant agreement may only be increased by a formal grant amendment.
(b) The grantee must receive from the Regional Administrator a formal grant amendment before implementing changes which:
(1) Alter the project performance standards;
(2) Alter the type of wastewater treatment provided by the project;
(3) Significantly delay or accelerate the project schedule;
(4) Substantially alter the facilities plan, design drawings and specifications, or the location, size, capacity, or quality of any major part of the project; or
(5) Otherwise require a formal grant amendment under part 30 of this subchapter.
(c) Notwithstanding paragraph (a) of this section, changes to Step 7 projects cannot increase the amount of EPA assistance established at the time of the grant amendment.
[49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27097, June 29, 1990]
§ 35.2205 Maximum allowable project cost.
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(a) Grants awarded on or after the effective date of this regulation. Except as provided in paragraph (c) of this section, for Step 2+3 or Step 3 grants awarded on or after the effective date of this regulation, the maximum allowable project cost will be the sum of:
(1) The allowable cost of the following:
(i) The initial award amount of all project subagreements between the grantee and its contractors;
(ii) The initial amounts approved for force account work to be performed on the project;
(iii) The purchase price of eligible real property; and
(iv) The initial amount approved for project costs not included under paragraphs (a)(1)(i) through (a)(1)(iii) of this section, excluding any amounts approved for an allowance under §35.2025 and for contingencies; and
(2) Five percent of the sum of the amounts included under paragraphs (a)(1)(i) through (a)(1)(iv) of this section.
(b) Grants awarded before the effective date of the regulation. Except as provided in paragraph (c) of this section, for Step 2+3 or Step 3 grants awarded before the effective date of this regulation, the maximum allowable increase in the cost for work covered by each subagreement finally advertised or, where there will be no advertisement, each subagreement awarded on or after the effective date of this regulation will be five percent of the initial award amount of the subagreement.
(c) Differing site conditions. In determining whether the maximum allowable project cost or increase in subagreement cost will be exceeded, costs of equitable adjustments for differing site conditions will be exempt, provided the requirements of 40 CFR part 35, subpart I, appendix A, paragraph A.1.g. and all other applicable laws and regulations have been met.
[50 FR 46649, Nov. 12, 1985]
§ 35.2206 Operation and maintenance.
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(a) The grantee must assure economical and effective operation and maintenance (including replacement) of the treatment works.
(b) Except as provided in paragraphs (c) (1) and (2) of this section, the Regional Administrator shall not pay more than 50 percent of the Federal share of any project unless the grantee has furnished and the Regional Administrator has approved the final plan of operation required by §35.2106, and shall not pay more than 90 percent of the Federal share of any project unless the grantee has furnished and the Regional Administrator has approved an operation and maintenance manual.
(c)(1) In projects where segmenting of a proposed treatment works has occurred, the Regional Administrator shall not pay more than 90 percent of the Federal share of the total allowable costs of the proposed treatment works until the grantee has furnished and the Regional Administrator has approved an operation and maintenance manual.
(2) In projects where a component is placed in operation before completion of the entire project, the Regional Administrator shall not make any additional payment on that project until a final operation and maintenance manual for the operating component is furnished and approved.
(Approved by the Office of Management and Budget under control number 2040–0027)
§ 35.2208 Adoption of sewer use ordinance and user charge system.
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The grantee shall adopt its sewer use ordinance and implement its user charge system developed under §§35.2130 and 35.2140 before the treatment works is placed in operation. Further, the grantee shall implement the user charge system and sewer use ordinance for the useful life of the treatment works.
§ 35.2210 Land acquisition.
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The grantee shall not acquire real property determined allowable for grant assistance until the Regional Administrator has determined that applicable provisions of 40 CFR part 4 have been met.
§ 35.2211 Field testing for Innovative and Alternative Technology Report.
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The grantee shall submit a report containing the procedure, cost, results and conclusions of any field testing. The report shall be submitted to the Regional Administrator in accordance with a schedule to be specified in the grant agreement.
(Approved by the Office of Management and Budget under control number 2040–0027)
§ 35.2212 Project initiation.
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(a) The grantee shall expeditiously initiate and complete the project, in accordance with the project schedule contained in the grant application and agreement. Failure to promptly initiate and complete a project may result in the imposition of sanctions under part 30 of this chapter.
(b) The grantee shall initiate procurement action for building the project promptly after award of a Step 3 grant or, after receiving written approval of the information required under §35.2202 under a Step 2+3 grant or, for a Step 7 project, after completing the facilities plan and the preparation of a pre-bid package that is sufficiently detailed to insure that the bids received form the design/build work will be complete, accurate, comparable and will result in a cost-effective operable facility. Public notice of proposed procurement action should be made promptly after Step 3 award or after final approvals for a Step 2+3 grant under §35.2202, or after completing the pre-bid package for the Step 7 award. The grantee shall award the subagreement(s) and issue notice(s) to proceed, where required, for building all significant elements of the project within twelve months of the Step 3 award or final Step 2+3 approvals.
(c) Failure to promptly award all subagreement(s) for building the project will result in a limitation on allowable costs. (See appendixes A, A.2.e.).
(d) The grantee shall notify the Regional Administrator immediately upon award of the subagreement(s) for building all significant elements of the project (see 40 CFR 33.211).
(Approved by the Office of Management and Budget under control number 2040–0027)
[49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27097, June 29, 1990]
§ 35.2214 Grantee responsibilities.
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(a) The grantee shall complete the project in accordance with the grant agreement including: The facilities plan that establishes the need for the project; the design drawings and specifications; the plan of operation under §35.2106 that identifies the basis to determine annual operating costs; the financial management system under §35.2140(d) that adequately accounts for revenues and expenditures; the user charge system under §35.2140 that will generate sufficient revenue to operate and maintain the treatment works; the project schedule; and all other applicable regulations. The grantee shall maintain and operate the project to meet project performance standards including the enforceable requirements of the Act for the design life.
(b) The grantee shall provide the architectural and engineering services and other services necessary to fulfill the obligation in paragraph (a) of this section.
§ 35.2216 Notice of building completion and final inspection.
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The grantee shall notify the Regional Administrator when the building of the project is complete. Final inspection shall be made by the Regional Administrator after receipt of the notice of building completion.
(Approved by the Office of Management and Budget under control number 2040–0027)
§ 35.2218 Project performance.
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(a) The grantee shall notify the Regional Administrator in writing of the actual date of initiation of operation.
(b) Subject to the provisions of 40 CFR part 33, the grantee shall select the engineer or engineering firm principally responsible for either supervising construction or providing architectural and engineering services during construction as the prime engineer to provide the following services during the first year following the initiation of operation:
(1) Direct the operation of the project and revise the operation and maintenance manual as necessary to accommodate actual operating experience;
(2) Train or provide for training of operating personnel and prepare curricula and training material for operating personnel; and
(3) Advise the grantee whether the project is meeting the project performance standards.
(c) On the date one year after the initiation of operation of the project, the grantee shall certify to the Regional Administrator whether the project meets the project performance standards. If the Regional Administrator or the grantee concludes that the project does not meet the project performance standards, the grantee shall submit the following:
(1) A corrective action report which includes an analysis of the cause of the project's failure to meet the performance standards (including the quantity of infiltration/inflow proposed to be eliminated), and an estimate of the nature, scope and cost of the corrective action necessary to bring the project into compliance;
(2) The schedule for undertaking in a timely manner the corrective action necessary to bring the project into compliance; and
(3) The scheduled date for certifying to the Regional Administrator that the project is meeting the project performance standards.
(d) Except as provided in §35.2032(c) the grantee shall take corrective action necessary to bring a project into compliance with the project performance standards at its own expense. This limitation on Federal funding for corrective actions does not apply to training funds under section 104(g)(1) of the Act.
(e) Nothing in this section:
(1) Prohibits a grantee from requiring more assurances, guarantees, or indemnity or other contractual requirements from any party performing project work; or
(2) Affects EPA's right to take remedial action, including enforcement, against a grantee that fails to carry out its obligations under §35.2214.
(Approved by the Office of Management and Budget under control number 2040–0027)
[49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27098, June 29, 1990]
§ 35.2250 Determination of allowable costs.
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The Regional Administrator will determine the allowable costs of the project based on applicable provisions of laws and regulations, the scope of the approved project, §30.705 of this subchapter, and appendix A of this subpart.
§ 35.2260 Advance purchase of eligible land.
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In the case of grant assistance awarded solely for the acquisition of eligible land, the following provisions are deferred until the award of the ensuing Step 3 assistance for the building of facilities: §§35.2105, 35.2130, 35.2140, 35.2206 and 35.2208.
§ 35.2262 Funding of field testing.
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In the case of grant assistance for field testing of innovative or alternative wastewater process and techniques, the following provisions are deferred until the award of assistance for building the approved facilities: §§35.2105, 35.2106, 35.2122, 35.2130, 35.2140, 35.2206, and 35.2208.
§ 35.2300 Grant payments.
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Except as provided in §35.2206, the Regional Administrator shall pay the Federal share of the allowance under §35.2025 and the allowable project costs incurred to date and currently due and payable by the grantee, as certified in the grantee's most recent payment request.
(a) Adjustment. The Regional Administrator may at any time review and audit requests for payment and payments and make appropriate adjustments as provided in part 30 of this chapter.
(b) Refunds, rebates and credits. The Federal share of any refunds, rebates, credits, or other amounts (including any interest) that accrue to or are received by the grantee for the project, and that are properly allocable to costs for which the grantee has been paid under a grant, must be credited to the current State allotment or paid to the United States. Examples include rebates for prompt payment and sales tax refunds. Reasonable expenses incurred by the grantee securing such refunds, rebates, credits, or other amounts shall be allowable under the grant when approved by the Regional Administrator.
(c) Release. By its acceptance of final payment, the grantee releases and discharges the United States, its officers, agents, and employees from all liabilities, obligations, and claims arising out of the project work or under the grant, subject only to exceptions previously specified in writing between the Regional Administrator and the grantee.
(d) Payment of costs incurred under the Uniform Relocation Assistance and Real Property Acquisition Policies Act. Notwithstanding the provisions of the introductory paragraph of this section, if the Regional Administrator determines it is necessary for the expeditious completion of a project, he may make advance payment after grant award for the Federal share of the eligible cost of any payment of relocation assistance under §4.502(c) of this chapter by the grantee. The requirements in part 30 of this subchapter apply to any advances of funds for assistance payments.
(e) Payment under grants to States for advances of allowance—(1) Advance payment to State. Notwithstanding the provisions of the introductory paragraph of this section, the Regional Administrator, under a State grant for advances of allowance (see §35.2025), may make payments on an advance or letter-of-credit payment method in accordance with the requirements under part 30 of this chapter. The State and the Regional Administrator shall agree to the payment terms.
(2) Assignment. If the State chooses to assign its payments to a potential grant applicant, it shall execute an agreement with the potential grant applicant authorizing direct payment from EPA and establishing appropriate terms for payment. The State shall provide a copy of the agreement to EPA.
(f) Design/build projects. For design/build projects, the Regional Administrator shall not pay more than 95 percent of the grant amount until completion of building and the RA's final project approval (see §35.2036(a)(6)).
(Approved by the Office of Management and Budget under control number 2040–0027)
[49 FR 6234, Feb. 17, 1984, as amended at 55 FR 27098, June 29, 1990]
§ 35.2350 Subagreement enforcement.
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(a) Regional Administrator authority. At the grantee's request the Regional Administrator may provide technical and legal assistance in the administration and enforcement of any subagreement related to treatment works for which an EPA grant was made and to intervene in any civil action involving the enforcement of such subagreements, including subagreement disputes which are the subject of either arbitration or court action.
(b) Privity of subagreement. The Regional Administrator's technical or legal involvement in any subagreement dispute will not make EPA a party to any subagreement entered into by the grantee.
(c) Grantee responsibilities. The provision of technical or legal assistance under this section in no way releases the grantee from its obligations under §35.2214, or affects EPA's right to take remedial action, including enforcement, against a grantee that fails to carry out those obligations.
Appendix A to Subpart I of Part 35—Determination of Allowable Costs
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(a) Purpose. The information in this appendix represents Agency policies and procedures for determining the allowability of project costs based on the Clean Water Act, EPA policy, appropriate Federal cost principles under part 30 of this subchapter and reasonableness.
(b) Applicability. This cost information applies to grant assistance awarded on or after the effective date of this regulation. Project cost determinations under this subpart are not limited to the items listed in this appendix. Additional cost determinations based on applicable law and regulations must of course be made on a project-by-project basis. Those cost items not previously included in program requirements are not mandatory for decisions under grants awarded before the effective date. They are only to be used as guidance in those cases.
A. Costs Related to Subagreements
1. Allowable costs related to sub- agreements include:
a. The costs of subagreements for building the project.
b. The costs of complying with the procurement requirements of part 33 of this subchapter, other than the costs of self-certification under §33.110.
c. The cost of legal and engineering services incurred by grantees in deciding procurement protests and defending their decisions in protest appeals under subpart G of 40 CFR part 33.
d. The costs for establishing or using minority and women's business liaison services.
e. The costs of services incurred during the building of a project to ensure that it is built in conformance with the design drawings and specifications.
f. The costs (including legal, technical, and administrative costs) of assessing the merits of or negotiating the settlement of a claim by or against a grantee under a subagreement provided:
(1) The claim arises from work within the scope of the grant;
(2) A formal grant amendment is executed specifically covering the costs before they are incurred;
(3) The costs are not incurred to prepare documentation that should be prepared by the contractor to support a claim against the grantee; and
(4) The Regional Administrator determines that there is a significant Federal interest in the issues involved in the claim.
g. Change orders and the costs of meritorious contractor claims for increased costs under subagreements as follows:
(1) Change orders and the costs of meritorious contractor claims provided the costs are:
(i) Within the scope of the project;
(ii) Not caused by the grantee's mismanagement; and
(iii) Not caused by the grantee's vicarious liability for the improper actions of others.
(2) Provided the requirements of paragraph g(1) are met, the following are examples of allowable change orders and contractor claim costs:
(i) Building costs resulting from defects in the plans, design drawings and specifications, or other subagreement documents only to the extent that the costs would have been incurred if the subagreement documents on which the bids were based had been free of the defects, and excluding the costs of any rework, delay, acceleration, or disruption caused by such defects;
(ii) Costs of equitable adjustments under Clause 4, Differing Site Conditions, of the model subagreement clauses required under §33.1030 of this subchapter.
(3) Settlements, arbitration awards, and court judgments which resolve contractor claims shall be reviewed by the grant award official and shall be allowable only to the extent that they meet the requirements of paragraph g(1), are reasonable, and do not attempt to pass on to EPA the cost of events that were the responsibility of the grantee, the contractor, or others.
h. The costs of the services of the prime engineer required by §35.2218 during the first year following initiation of operation of the project.
i. The cost of development of a plan of operation including an operation and maintenance manual required by §35.2106.
j. Start-up services for onsite training of operating personnel in operation and control of specific treatment processes, laboratory procedures, and maintenance and records management.
k. The specific and unique costs of field testing an innovative or alternative process or technique, which may include equipment leasing costs, personnel costs, and utility costs necessary for constructing, conducting, and reporting the results of the field test.
2. Unallowable costs related to sub- agreements include:
a. The costs of architectural or engineering services incurred in preparing a facilities plan and the design drawings and specifications for a project. This provision does not apply to planning and design costs incurred in the modification or replacement of an innovative or alternative project funded under §35.2032(c).
b. Except as provided in 1.g. above, architectural or engineering services or other services necessary to correct defects in a facilities plan, design drawings and specifications, or other subagreement documents.
c. The costs (including legal, technical and administrative) of defending against a contractor claim for increased costs under a subagreement or of prosecuting a claim to enforce any subagreement unless:
(1) The claim arises from work within the scope of the grant;
(2) A formal grant amendment is executed specifically covering the costs before they are incurred;
(3) The claim cannot be settled without arbitration or litigation;
(4) The claim does not result from the grantee's mismanagement;
(5) The Regional Administrator determines that there is a significant Federal interest in the issues involved in the claim; and
(6) In the case of defending against a contractor claim, the claim does not result from the grantee's responsibility for the improper action of others.
d. Bonus payments, not legally required, for completion of building before a contractual completion date.
e. All incremental costs due to the award of any subagreements for building significant elements of the project more than 12 months after the Step 3 grant award or final Step 2+3 approvals unless specified in the project schedule approved by the Regional Administrator at the time of grant award.
B. Mitigation
1. Allowable costs include:
a. Costs necessary to mitigate only direct, adverse, physical impacts resulting from building of the treatment works.
b. The costs of site screening necessary to comply with NEPA related studies and facilities plans, or necessary to screen adjacent properties.
c. The cost of groundwater monitoring facilities necessary to determine the possibility of groundwater deterioration, depletion or modification resulting from building the project.
2. Unallowable costs include:
a. The costs of solutions to aesthetic problems, including design details which require expensive building techniques and architectural features and hardware, that are unreasonable or substantially higher in cost than approvable alternatives and that neither enhance the function or appearance of the treatment works nor reflect regional architectural tradition.
b. The cost of land acquired for the mitigation of adverse environmental effects identified pursuant to an environmental review under NEPA.
C. Privately or Publicly Owned Small and Onsite Systems
1. Allowable costs for small and onsite systems serving residences and small commercial establishments inhabited on or before December 27, 1977, include a. through e. below. Alternatively, the two-thirds rule at 40 CFR §35.2116(b) may be used to determine allowable residential flows to be served by publicly owned small and alternative wastewater systems, including a. through e. below:
a. The cost of major rehabilitation, upgrading, enlarging and installing small and onsite systems, but in the case of privately owned systems, only for principal residences.
b. Conveyance pipes from property line to offsite treatment unit which serves a cluster of buildings.
c. Treatment and treatment residue disposal portions of toilets with composting tanks, oil flush mechanisms, or similar in-house devices.
d. Treatment or pumping units from the incoming flange when located on private property and conveyance pipes, if any, to the collector sewer.
e. The cost of restoring individual system building sites to their original condition.
2. Unallowable costs for small and onsite systems include:
a. Modification to physical structure of homes or commercial establishments.
b. Conveyance pipes from the house to the treatment unit located on user's property or from the house to the property line if the treatment unit is not located on that user's property.
c. Wastewater generating fixtures such as commodes, sinks, tubs, and drains.
D. Real Property
1. Allowable costs for land and rights-of-way include:
a. The cost (including associated legal, administrative and engineering costs) of land acquired in fee simple or by lease or easement under grants awarded after October 17, 1972, that will be an integral part of the treatment process or that will be used for the ultimate disposal of residues resulting from such treatment provided the Regional Administrator approves it in the grant agreement. These costs include:
(1) The cost of a reasonable amount of land, considering irregularities in application patterns, and the need for buffer areas, berms, and dikes;
(2) The cost of land acquired for a soil absorption system for a group of two or more homes;
(3) The cost of land acquired for composting or temporary storage of compost residues which result from wastewater treatment;
(4) The cost of land acquired for storage of treated wastewater in land treatment systems before land application. The total land area for construction of a pond for both treatment and storage of wastewater is allowable if the volume necessary for storage is greater then the volume necessary for treatment. Otherwise, the allowable cost will be determined by the ratio of the storage volume to the total volume of the pond.
b. The cost of complying with the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4621 et seq., 4651 et seq.), under part 4 of this chapter for land necessary for the building of treatment works.
c. The cost of contracting with another public agency or qualified private contractor for part or all of the required acquisition and/or relocation services.
d. The cost associated with the preparation of the treatment works site before, during and, to the extent agreed on in the grant agreement, after building. These costs include:
(1) The cost of demolition of existing structures on the treatment works site (including rights-of-way) if building cannot be undertaken without such demolition;
(2) The cost (considering such factors as betterment, cost of contracting and useful life) of removal, relocation or replacement of utilities, provided the grantee is legally obligated to pay under state or local law; and
(3) The cost of restoring streets and rights-of-way to their original condition. The need for such restoration must result directly from the construction and is generally limited to repaving the width of trench.
e. The cost of acquiring all or part of an existing publicly or privately owned wastewater treatment works provided all the following criteria are met:
(1) The acquisition, in and of itself, considered apart from any upgrade, expansion or rehabilitation, provides new pollution control benefits;
(2) The acquired treatment works was not built with previous Federal or State financial assistance;
(3) The primary purpose of the acquisition is not the reduction, elimination, or redistribution of public or private debt; and
(4) The acquisition does not circumvent the requirements of the Act, these regulations, or other Federal, State or local requirements.
2. Unallowable costs for land and rights-of-way include:
a. The costs of acquisition (including associated legal, administrative and engineering etc.) of sewer rights-of-way, waste treatment plant sites (including small system sites), sanitary landfill sites and sludge disposal areas except as provided in paragraphs 1. a. and b. of this section.
b. Any amount paid by the grantee for eligible land in excess of just compensation, based on the appraised value, the grantee's record of negotiation or any condemnation proceeding, as determined by the Regional Administrator.
c. Removal, relocation or replacement of utilities located on land by privilege, such as franchise.
E. Equipment, Materials and Supplies
1. Allowable costs of equipment, materials and supplies include:
a. The cost of a reasonable inventory of laboratory chemicals and supplies necessary to initiate plant operations and laboratory items necessary to conduct tests required for plant operation.
b. The costs for purchase and/or transportation of biological seeding materials required for expeditiously initiating the treatment process operation.
c. Cost of shop equipment installed at the treatment works necessary to the operation of the works.
d. The costs of necessary safety equipment, provided the equipment meets applicable Federal, State, local or industry safety requirements.
e. A portion of the costs of collection system maintenance equipment. The portion of allowable costs shall be the total equipment cost less the cost attributable to the equipment's anticipated use on existing collection sewers not funded on the grant. This calculation shall be based on: (1) The portion of the total collection system paid for by the grant, (2) a demonstrable frequency of need, and (3) the need for the equipment to preclude the discharge or bypassing of untreated wastewater.
f. The cost of mobile equipment necessary for the operation of the overall wastewater treatment facility, transmission of wastewater or sludge, or for the maintenance of equipment. These items include:
(1) Portable stand-by generators;
(2) Large portable emergency pumps to provide “pump-around” capability in the event of pump station failure or pipeline breaks; and
(3) Sludge or septage tankers, trailers, and other vehicles having as their sole purpose the transportation of liquid or dewatered wastes from the collector point (including individual or on-site systems) to the treatment facility or disposal site.
g. Replacement parts identified and approved in advance by the Regional Administrator as necessary to assure uninterrupted operation of the facility, provided they are critical parts or major systems components which are:
(1) Not immediately available and/or whose procurement involves an extended “lead-time;”
(2) Identified as critical by the equipment supplier(s); or
(3) Critical but not included in the inventory provided by the equipment supplier(s).
2. Unallowable costs of equipment, materials and supplies include:
a. The costs of equipment or material procured in violation of the procurement requirements of 40 CFR part 33.
b. The cost of furnishings including draperies, furniture and office equipment.
c. The cost of ordinary site and building maintenance equipment such as lawnmowers and snowblowers.
d. The cost of vehicles for the transportation of the grantees' employees.
e. Items of routine “programmed” maintenance such as ordinary piping, air filters, couplings, hose, bolts, etc.
F. Industrial and Federal Users
1. Except as provided in paragraph F.2.a., allowable costs for treatment works serving industrial and Federal facilities include development of a municipal pretreatment program approvable under part 403 of this chapter, and purchase of monitoring equipment and construction of facilities to be used by the municipal treatment works in the pretreatment program.
2. Unallowable costs for treatment works serving industrial and Federal facilities include:
a. The cost of developing an approvable municipal pretreatment program when performed solely for the purpose of seeking an allowance for removal of pollutants under part 403 of this chapter.
b. The cost of monitoring equipment used by industry for sampling and analysis of industrial discharges to municipal treatment works.
c. All incremental costs for sludge management incurred as a result of the grantee providing removal credits to industrial users under 40 CFR 403.7 beyond those sludge management costs that would otherwise be incurred in the absence of such removal credits.
G. Infiltration/Inflow
1. Allowable costs include:
a. The cost of treatment works capacity adequate to transport and treat nonexcessive infiltration/inflow under §35.2120.
b. The costs of sewer system rehabilitation necessary to eliminate excessive infiltration/inflow as determined in a sewer system study under §35.2120.
2. Unallowable costs include:
a. When the Regional Administrator determines that the flow rate is not significantly more than 120 gallons per capita per day under §35.2120(c)(2)(ii), the incremental cost of treatment works capacity which is more than 120 gallons per capita per day.
H. Miscellaneous Costs
1. Allowable costs include:
a. The costs of salaries, benefits and expendable materials the grantee incurs for the project.
b. Unless otherwise specified in this regulation, the costs of meeting specific Federal statutory procedures.
c. Costs for necessary travel directly related to accomplishment of project objectives. Travel not directly related to a specific project, such as travel to professional meetings, symposia, technology transfer seminars, lectures, etc., may be recovered only under an indirect cost agreement.
d. The costs of additions to a treatment works that was assisted under the Federal Water Pollution Control Act of 1956 (Pub. L. 84–660), or its amendments, and that fails to meet its project performance standards provided:
(1) The project is identified on the State priority list as a project for additions to a treatment works that has received previous Federal funds;
(2) The grant application for the additions includes an analysis of why the treatment works cannot meet its project performance standards; and
(3) The additions could have been included in the original grant award and:
(a) Are the result of one of the following:
(i) A change in the project performance standards required by EPA or the State;
(ii) A written understanding between the Regional Administrator and grantee prior to or included in the original grant award;
(iii) A written direction by the Regional Administrator to delay building part of the treatment works; or
(iv) A major change in the treatment works' design criteria that the grantee cannot control; or
(b) Meet all the following conditions:
(i) If the original grant award was made after December 28, 1981, the treatment works has not completed its first full year of operation;
(ii) The additions are not caused by the grantee's mismanagement or the improper actions of others;
(iii) The costs of rework, delay, acceleration or disruption that are a result of building the additions are not included in the grant; and
(iv) The grant does not include an allowance for facilities planning or design of the additions.
(4) This provision applies to failures that occur either before or after the initiation of operation. This provision does not cover a treatment works that fails at the end of its design life.
e. Costs of royalties for the use of or rights in a patented process or product with the prior approval of the Regional Administrator.
f. Costs allocable to the water pollution control purpose of multiple purpose projects as determined by applying the Alternative Justifiable Expenditure (AJE) method described in the CG series. Multiple purpose projects that combine wastewater treatment with recreation do not need to use the AJE method, but can be funded at the level of the most cost-effective single-purpose alternative.
g. Costs of grantee employees attending training workshops/seminars that are necessary to provide instruction in administrative, fiscal or contracting procedures required to complete the construction of the treatment works, if approved in advance by the Regional Administrator.
2. Unallowable costs include:
a. Ordinary operating expenses of the grantee including salaries and expenses of elected and appointed officials and preparation of routine financial reports and studies.
b. Preparation of applications and permits required by Federal, State or local regulations or procedures.
c. Administrative, engineering and legal activities associated with the establishment of special departments, agencies, commissions, regions, districts or other units of government.
d. Approval, preparation, issuance and sale of bonds or other forms of indebtedness required to finance the project and the interest on them.
e. The costs of replacing, through reconstruction or substitution, a treatment works that was assisted under the Federal Water Pollution Control Act of 1956 (Pub. L. 84–660), or its amendments, and that fails to meet its project performance standards. This provision applies to failures that occur either before or after the initiation of operation. This provision does not apply to an innovative and alternative treatment works eligible for funding under §35.2032(c) or a treatment works that fails at the end of its design life or to a failed rotating biological contactor eligible for funding under §35.2035.
f. Personal injury compensation or damages arising out of the project.
g. Fines and penalties due to violations of, or failure to comply with, Federal, State or local laws, regulations or procedures.
h. Costs outside the scope of the approved project.
i. Costs for which grant payment has been or will be received from another Federal agency.
j. Costs of treatment works for control of pollutant discharges from a separate storm sewer system.
k. The cost of treatment works that would provide capacity for new habitation or other establishments to be located on environmentally sensitive land such as wetlands or floodplains.
l. The costs of preparing a corrective action report required by §35.2218(c).
I. Design/Build Project Grants
1. Allowable costs include:
a. The costs of supplementing the facilities plan to prepare the pre-bid package including the cost of preliminary boring and site plans, concept and layout drawings, schematic, general material and major equipment lists and specifications, instructions to builders, general and special conditions, project performance standards and permit limits, applicable State or other design standards, any requirements to go into bid analyses, and other contract documents, schedules, forms and certificates.
b. The costs for building the project, including:
(1) Project costs based on the lowest responsive, responsible competitive design/build project bid.
(2) Construction management services including detailed plans and specifications review and approval, change order review and approval, resident inspection, shop drawing approval and preparation of an O & M manual and of user charge and sewer use ordinance systems.
(3) Any adjustments to reflect the actual reasonable and necessary costs for preparing the pre-bid package.
(4) Post-construction activities required by project performance certification requirements.
(5) Contract and project administration activities including the review of contractor vouchers and payment requests, preparation of monitoring reports, grant administration and accounting services, routine legal costs, cost of eligible real property.
(6) Contingencies.
2. Unallowable costs include:
a. All costs in excess of the maximum agreed Federal share.
b. Costs of facilities planning where the grantee has received a Step 1 grant.
[49 FR 6234, Feb. 17, 1984, as amended at 50 FR 45896, Nov. 4, 1985; 55 FR 27098, June 29, 1990]
Appendix B to Subpart I of Part 35—Allowance for Facilities Planning and Design
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1. This appendix provides the method EPA will use to determine both the estimated and the final allowance under §35.2025 for facilities planning and design. The Step 2+3, Step 3 and Step 7 grant agreements will include an estimate of the allowance.
2. The Federal share of the allowance is determined by applying the applicable grant percentage in §35.2152 to the allowance.
3. The allowance is not intended to reimburse the grantee for costs actually incurred for facilities planning or design. Rather, the allowance is intended to assist in defraying those costs. Under this procedure, questions of equity (i.e., reimbursement on a dollar-for-dollar basis) will not be appropriate.
4. The estimated and final allowance will be determined in accordance with this appendix and tables 1, 2 and 3. Table 2 is to be used in the event the grantee received a grant for facilities planning. Table 3 is to be used to determine the facilities planning allowance for a Step 7 grant if the grantee did not receive a Step 1 grant. The amount of the allowance is computed by applying the resulting allowance percentage to the initial allowable building cost.
5. The initial allowable building cost is the initial allowable cost of erecting, altering, remodeling, improving, or extending a treatment works, whether accomplished through subagreement or force account. Specifically, the initial allowable building cost is the allowable cost of the following:
a. The initial award amount of all prime subagreements for building the project.
b. The initial amounts approved for force account work performed in lieu of awarding a subagreement for building the project.
c. The purchase price of eligible real property.
6. The estimated allowance is to be based on the estimate of the initial allowable building cost.
7. The final allowance will be determined one time only for each project, based on the initial allowable building cost, and will not be adjusted for subsequent cost increases or decreases.
8. For a Step 3 or Step 7 project, the grantee may request payment of 50 percent of the Federal share of the estimated allowance immediately after grant award. Final payment of the Federal share of the allowance may be requested in the first payment after the grantee has awarded all prime subagreements for building the project, received the Regional Administrator's approval for force account work, and completed the acquisition of all eligible real property.
9. For a Step 2+3 project, if the grantee has not received a grant for facilities planning, the grantee may request payment of 30 percent of the Federal share of the estimated allowance immediately after the grant award. Half of the remaining estimated allowance may be requested when design of the project is 50 percent complete. If the grantee has received a grant for facilities planning, the grantee may request half of the Federal share of the estimated allowance when design of the project is 50 percent complete. Final payment of the Federal share of the allowance may be requested in the first payment after the grantee has awarded all prime subagreements for building the project, received the Regional Administrator's approval for force account work, and completed the acquisition of all eligible real property.
10. The allowance does not include architect or engineering services provided during the building of the project, e.g., reviewing bids, checking shop drawings, reviewing change orders, making periodic visits to job sites, etc. Architect or engineering services during the building of the project are allowable costs subject to this regulation and 40 CFR part 33.
11. The State will determine the amount and conditions of any advance under §35.2025(b), not to exceed the Federal share of the estimated allowance.
12. EPA will reduce the Federal share of the allowance by the amount of any advances the grantee received under §35.2025(b).
Table 1_Allowance for Facilities Planning and Design
------------------------------------------------------------------------
Allowance as a
Building cost percentage of
building cost*
------------------------------------------------------------------------
$100,000 or less...................................... 14.4945
120,000............................................... 14.1146
150,000............................................... 13.6631
175,000............................................... 13.3597
200,000............................................... 13.1023
250,000............................................... 12.6832
300,000............................................... 12.3507
350,000............................................... 12.0764
400,000............................................... 11.8438
500,000............................................... 11.4649
600,000............................................... 11.1644
700,000............................................... 10.9165
800,000............................................... 10.7062
900,000............................................... 10.5240
1,000,000............................................. 10.3637
1,200,000............................................. 10.0920
1,500,000............................................. 9.7692
1,750,000............................................. 9.5523
2,000,000............................................. 9.3682
2,500,000............................................. 9.0686
3,000,000............................................. 8.8309
3,500,000............................................. 8.6348
4,000,000............................................. 8.4684
5,000,000............................................. 8.1975
6,000,000............................................. 7.9827
7,000,000............................................. 7.8054
8,000,000............................................. 7.6550
9,000,000............................................. 7.5248
10,000,000............................................ 7.4101
12,000,000............................................ 7.2159
15,000,000............................................ 6.9851
17,500,000............................................ 6.8300
20,000,000............................................ 6.6984
25,000,000............................................ 6.4841
30,000,000............................................ 6.3142
35,000,000............................................ 6.1739
40,000,000............................................ 6.0550
50,000,000............................................ 5.8613
60,000,000............................................ 5.7077
70,000,000............................................ 5.5809 (continued)