State Revolving Fund Loan Process
The following list outlines items required at the various stages of a State Revolving Fund (SRF) loan process.
Table of Contents
- Application Requirements…
- Planning and Design
- Construction Loan Requirements…
- Contract Submittal…
- Disbursement Requests and Supporting Invoices
- Project Performance…
- Project Closeout…
After a project questionnaire has been submitted, and the proposed project has been included on the Project Priority List, a loan application may be submitted through the DEC Water Online Application System (OASys). Access to OASys is provided through myAlaska, the State of Alaska's system for Secure Single Sign-on. Loan applications will not be processed until all required documents have been submitted. Loan application requirements differ slightly between Clean Water and Drinking Water projects. The key steps in the application process are discussed below:
An environmental review is required for all construction projects receiving funding from the SRF Program. Additional information about the environmental review process is provided in the Environmental and Cultural Reviews Summary (PDF). To initiate the environmental review process for a project, submit the Environmental Review Checklist (DOCX).
Financial Capacity Assessment (FCA)
The SRF Program completes a Financial Capacity Assessment for each applicant prior to executing a loan agreement. This assessment must demonstrate that the borrower has the financial capability to properly operate the utility and to repay the loan. To initiate the financial capacity review process, borrowers should contact the SRF Program project engineer assigned to their community. Information needed to begin the review process includes audited financial statements for the last three years, the current year budget, and projections of operating revenues and expenses over the next five years. The Financial Capacity Assessment process must be completed prior to executing a loan agreement.
Key Items Needed for Application Submission
Several key items must be submitted with the online loan application. The Loan Application Checklist (PDF) provides guidance on the application requirements.
- An adopted ordinance or resolution must demonstrate that the local governing body has authorized an appropriate official to apply for and execute the loan document. Note: In come instances, a borrower may require one ordinance to apply for a loan and a second to accept the loan offer. Example language and details are shown in the Sample Resolution (PDF).
- Attorney Certification
- An attorney must certify that the borrower has the legal authority to incur debt for this specific project for the dollar amount of the loan. The Attorney Certificate Example (PDF) provides example language for a letter.
- Lobbying Certification / Disclosure of Lobbying Activities
- EPA Form 6600-06 (PDF) must be submitted. If a borrower engages in any lobbying activities, a Disclosure of Lobbying Activities (PDF) is required as well.
- Useful Life Certification
- The Clean Water Useful Life Certification (PDF) and Drinking Water Useful Life Certification (PDF) forms are used to identify the minimum useful life of construction improvements and must be signed by an Alaska registered professional engineer.
- Engineering Cost Estimate
- A cost estimate must support the dollar amount requested for construction as part of the loan project cost summary. The Engineering Cost Estimate Template (XLSX) provides the expected level of detail.
- Current User Rates/Ordinance
- Borrowers must provide current user rates and enacting ordinance for the utility receiving the loan funding. An example Model Sewer Ordinance (PDF) and a Sample Water Ordinance (PDF) are provided if user rates are not already established.
- Cost and Effectiveness Certification (Clean Water loans only)
- The Cost and Effectiveness Form (PDF) requires an authorized signature from the borrower and a certification from the Professional Engineer for the project. The certification must be provided by the borrower before proceeding with final design and/or construction.
- Fiscal Sustainability Plan (Clean Water loans only)
- All publicly owned treatment works projects funded with a Clean Water State Revolving Fund (CWSRF) loan require the borrower to have a Fiscal Sustainability Plan (FSP). Borrowers must submit a FSP Certification Form (PDF) with a loan application. The Fiscal Sustainability Plan Guidance (PDF) may be a helpful resource.
- Technical, Managerial, and Financial (TMF) Capacity Assessment (Drinking Water systems only)
- Systems eligible for funding through the Alaska Drinking Water Fund must submit the Capacity Assessment Worksheet (PDF) for review by the SRF Program. The Capacity Assessment provides information regarding the borrower's ability to operate and maintain the utility in the long term. Systems that lack capacity may still be eligible if the loan will address non-compliance or the borrower commits to improving capacity.
- Green Project Assessment Forms (if applicable)
- If a project has an identified Green Project component, a Green Project Assessment form (PDF) must be submitted. Further information can be found on the EPA - Green Infrastructure Web Site. Here are some Green Project Examples for reference.
- Force Account Labor Worksheet
- Required only for force account construction projects and/or if administrative staff time is charged to the loan. If a project will use in-house labor, details noted in the Force Account Labor Worksheet (PDF) must be submitted to capture the wage and benefit details. Generally this form should be updated annually.
Planning and Design
If a community wants loan reimbursement for engineering planning or design costs, the related procurement and accounting documents must be submitted for review and concurrence. In addition a final report, study, or planning / design document(s) must be submitted for acceptance.↑
Construction Loan Requirements
Plans & Specifications Review
If the project involves construction, the borrower must submit plans and specifications to the Engineering Support and Plan Review Program (for the Alaska Clean Water Fund or the Drinking Water Engineering Program (for drinking water loans) prior construction. Construction initiated prior to receipt of an Approval to Construct is not eligible for SRF funding.
Invitation to Bid Packet
The borrower must submit the Invitation to Bid packet, including signed copies of all documents for the selected contractor, to the SRF Program for concurrence on all bids. The bid packet documents must include but are not limited to, Invitation to Bid, Bid Form, Bid Bond, Performance Bond, Notice of Award and the EPA debarment certification form.
The SRF Program has specific loan requirements that must be included in the Invitation to Bid and subsequent contract documents for the work to be loan eligible:
Davis-Bacon Wage Rates
Invitation to Bid documents need to include both Federal and State Department of Labor (DOL) Davis Bacon wage rates, with the higher of the two wages paid for related work completed. The Alaska Davis Bacon Wages need to be referenced bid documents for the work to be loan eligible. Additional guidance is available on the Special Davis-Bacon Construction Contract Language Requirements summary webpage.
American Iron & Steel
Use of iron and steel products produced in the United States is required for all construction projects. Additional guidance and requirements can be found on the EPA AIS Guidance Website. An example of AIS construction contract language (PDF) is provided for reference. In addition, a De Minimis tracking list template (PDF) is available for use. The American Iron and Steel Policy and Documentation provides additional resources.
Disadvantaged Business Enterprises (DBE) Forms
SRF borrowes and their contractors are required to make good faith efforts to utilize businesses classified as DBEs for construction associated with SRF financed projects. Background information is available in the Program Summary - Handout (PDF) (Revised, November 2016). The recently updated DBE Forms - Contract Forms (PDF) (Revised, November 2019) includes Equal Employment Opportunity (EEO) Statement, DBE Subcontractor Participation and Performance Forms. In addition, the SRF Loan DBE Utilization Form (PDF) is available to prepare for online reporting. A DBE Directory is provided through the Alaska Unified Certification Program. Annual reports are required by the SRF Program to document utilization of Minority Business Enterprises (MBE) and Woman-owned Business Enterprises (WBE). Annual reports are due by October 15 and must be submitted through OASys.
Prime contractors must submit a Debarment Certification (EPA Debarment Form 5700-49 (PDF)) certifying that they are not presently debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participating in a contract using federal funds. In turn, prime contractors will require subcontractors whose contract amount is expected to equal or exceed $25,000 to also submit a Debarment Certification. The SRF Program will check each firm's status on the US System for Award Management, SAM.gov.
Contract and/or material procurements exceeding $100,000 must be awarded through a competitive bidding process, or an appropriate alternative method that has been approved by the SRF Program. Procurements $100,000 or less may be negotiated if the SRF Program approved the solicitation and negotiation procedures. An example equipment RFP (PDF) is provided for reference.
Professional Service Contract:
The engineering and/or design contract, including all amendments, must be submitted for eligibility review and concurrence. Disbursement of loan funds is contingent upon SRF Program approval of the contract. Submittal of Request for Proposal documents, including subsequent award and contract documents, to SRF Program before solicitation is recommended. Here is an Example RFP Document (PDF) and an Example Professional Design Services Agreement (PDF) for reference.
Borrowers must submit construction contracts, including all change orders, for approval. Disbursement of loan funds is contingent upon SRF Program approval of the contract. Submittal of Invitation to Bid documents, including subsequent award and contract documents to SRF Program before solicitation is recommended. A fully signed copy of the construction contract, along with any change orders, bid tabulations, and winning bid packet, must be submitted to the SRF Program for eligibility review and concurrence.
Notice of Award
Upon receiving the Notice of Construction Award, the local governing body must authorize an appropriate official to execute the loan document. This can be done by separate ordinances or resolutions than was used to apply for the loan.
Notice to Proceed
The Notice to Proceed must be issued to the contractor by the borrower after the DEC Approval to Construct is issued, or the eligibility of the project could be jeopardized. Example NTP Letter (PDF)
Executed change orders with supporting documentation must be submitted to the SRF Program for approval. The SRF Program is willing to review draft documentation if eligibility of the work is a concern.
Disbursement Requests and Supporting Invoices
All Disbursement Requests must be submitted online through OASys. Supporting documentation is required for the Disbursement Request. Supporting documentation includes invoices, contractor pay estimates, any force account labor and equipment charges (if applicable), and any other expense being sought reimbursement. Invoices and proof of payment which support all costs must be submitted along with Disbursement Requests. An invoice tracking template (XLSX) is provided for reference. All contract work must be approved by the SRF Program project engineer.
Project Performance Criteria
The borrower and the SRF Program will mutually agree on specific Project Performance Criteria for the SRF funded project. The criteria must be submitted to the SRF Program for review approved prior to Initiation of Operation. The criteria should at a minimum correlate with permit conditions (if applicable) and/or other performance standards found to satisfy this requirement. An example letter from a loan recipient that proposes Project Performance Criteria is provided for reference. Project Performance Criteria Sewer Example (PDF) and Project Performance Criteria Drinking Water Example (PDF).
Approval to Operate
The borrower must obtain a regulatory Final Approval to Operate or an Interim Approval to Operate from the the Engineering Support and Plan Review Program (for clean water loans) or the Drinking Water Program (for drinking water loans) upon project completion and prior to facility operation.
Initiation of Operation
A one year project performance period is provided once construction is complete to verify if the project is operating according to the established performance criteria. The performance period begins on the date of Initiation of Operation, and ends exactly one year later. A determination date of Initiation of Operation is issued when the project is considered sufficiently complete to put into operation. Initiation of Operation and Project Performance Example Letter (PDF)
Project Performance Certification
During the one year period from the Initiation of Operations date the borrower will verify the facility’s performance. On or before the anniversary date, the borrower must complete a Project Performance Certificate for the project, affirming that the project either did or did not meet the project performance criteria. The form must be signed by the engineer with oversight during project construction. Clean Water projects for wastewater treatment plants, collection and landfill projects can use the Project Performance Certification Form - CW (PDF). Water treatment and distribution lines can use the Project Performance Certification Form - DW (PDF). The following items need to be submitted to the SRF Program before or with the Project Performance Certification:
- Project Performance Criteria
- DEC Final Approval to Operate
- Record drawings
- Operation & Maintenance Manual(s)
- Initiation of Operation Date Designation
For construction projects, an electronic copy of Record Drawings must be submitted to the SRF Program upon project completion. These drawings must also be submitted to the Engineering Support and Plan Review Program (for clean water loans) or the Drinking Water Program (for drinking water loans) for an Approval to Operate.
Operations & Maintenance (O&M) Manual Docs
O&M documents must be submitted with a cover letter outlining the included manual or manual updates.
Final Disbursement Request
The final disbursement request is made electronically through OASYS by selecting the "Final Pay Request" box. The following documentation is recommended to process the final disbursement request:
|Planning and Design Project||Construction Projects|
If not already provided, the most recent User Rate and Ordinance should be submitted for review.
Loan Repayment Schedule
Following the final loan disbursement, a Loan Repayment Schedule will be prepared by the SRF Program to reflect the repayment of principal, interest, and fees due in accordance with the loan agreement. Loan repayments are due on an annual basis and must begin one year after the Initiation of Operation date or earlier.