WSR 00-08-010



[ Filed March 23, 2000, 9:28 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 00-04-096.

Title of Rule: Loan and financing guarantee applications, WAC 399-30-030.

Purpose: To add to the list of direct costs eligible for public works loans, specifically, costs to establish an assessment district or the costs of elections required for a specific project.

Other Identifying Information: NOTE: This proposal is the same as an emergency WAC filed as WSR 00-04-097.

Statutory Authority for Adoption: RCW 43.155.040(4).

Statute Being Implemented: Chapter 43.155 RCW.

Summary: This WAC will expand the list of direct costs eligible for public works loans.

Reasons Supporting Proposal: Initiative 695, as passed by the voters on November 2, 1999, raises the possibility that some local government customers of the board will need to obtain voter approval of project financing. The board is considering the addition of "election costs" as an eligible direct cost item.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Pete Butkus, P.O. Box 48319, Olympia, WA 98504-8319, (360) 586-7186.

Name of Proponent: Public Works Board, governmental.

Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: The emergency WAC has not caused any negative impacts to board operations or budget.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: This rule will allow the costs to develop an assessment district (Examples: ULID, LID, RID, and business improvement district) or the costs to conduct an election to be eligible for public works loans.

Proposal Changes the Following Existing Rules: Language as noted above is added to WAC 399-30-030.

No small business economic impact statement has been prepared under chapter 19.85 RCW. There is no small business impact, all customers are local governments.

Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption.

Hearing Location: Wyndham Gardens Hotel, 18118 Pacific Highway South (International Boulevard), SeaTac, WA, on June 6, 2000, at 8:30 a.m.

Assistance for Persons with Disabilities: Contact Receptionist by May 23, 2000, TDD (360) 586-4224, or (360) 586-4172.

Submit Written Comments to: Pete Butkus, Public Works Board, P.O. Box 48319, Olympia, WA 98504-8319, fax (360) 664-3029, by May 23, 2000.

Date of Intended Adoption: June 6, 2000.

March 23, 2000

Pete Butkus

Executive Director


AMENDATORY SECTION(Amending WSR 98-24-010, filed 11/19/98, effective 12/20/98)

WAC 399-30-030
Loan and financing guarantee applications.

(1) Any local government in the state of Washington may apply for a loan or financing guarantee to assist in financing critical public works projects.

(2) All applicants must meet the following conditions:

(a) Applicant cities and counties must be imposing a real estate excise tax under RCW 82.46.010(2) at a rate of at least one-quarter of one percent;

(b) Applicant local governments must have developed a long-term plan for financing public works needs as further described in the loan application package under "capital facilities planning."

(3) Direct costs eligible for public works loans are those costs directly attributable to a specific project and include:

(a) Work done by employees of the applicant, or by other government employees under an inter-local agreement or contract limited to: Engineering, environmental review, design activities, acquisition of rights of way or property, construction inspection activities, roadway seal coating (if bids from private sector contractors have been solicited and compared with the inter-local agreement proposal), and the cleaning, sterilization, or bacteriological testing of water system components prior to public use.

(i) Salaries and wages (at actual or average rates) covering productive labor hours of the local government employees (excluding the administrative organization of the operating unit involved). The cost of services rendered by employees generally classified as administrative are considered a direct cost only when such employees are assigned for short periods of time to perform on a full-time basis the types of services described above and when similar procedures are followed;

(ii) Employee benefits relating to direct labor are considered a direct cost of construction projects. The following items may be included as employee benefits:

(A) F.I.C.A. (Social Security) - employer's share;

(B) Retirement benefits;

(C) Hospital, health, dental, and other welfare insurance;

(D) Life insurance;

(E) Industrial and medical insurance;

(F) Vacation;

(G) Holiday;

(H) Sick leave; and

(I) Military leave and jury duty.

Employee benefits must be calculated as a percentage of direct labor dollars. The computation of predetermined percentage rates to be applied to current labor costs must be based on the average of total employee benefits and total labor costs for the prior fiscal year and adjusted by known current year variations.

(b) Contract engineering, planning, legal, and financial planning services. The board reserves the right to declare ineligible legal costs that are unreasonable and disproportionate to the project.

(c) Right-of-way acquisition costs including:

(i) Purchase of land and easements acquired for and devoted to the project;

(ii) Purchase of improvements;

(iii) Adjustment or reestablishment of improvements;

(iv) Salaries, expenses or fees of appraisers, negotiators or attorneys;

(v) Removal or demolition of improvement;

(vi) Other direct costs in connection with the acquisition. Amounts received from the sale of excess real property or improvements and from any rentals will be reduced from the direct cost.

(d) Contract construction work.

(e) Direct vehicle and equipment charges at the actual rental cost paid for the equipment or, in the case of city or county-owned equipment, at the rental rates established by the local government's "equipment rental and revolving fund" following the methods prescribed by the division of municipal corporations. However, such costs must be charged on a uniform basis to equipment used for all projects regardless of the source of funding. Cities with a population of eight thousand or less not using type of fund are allowed the same rates as used by the department of transportation.

(f) Direct materials and supplies.

(i) An overhead rate or "loading factor" is not considered an appropriate additive to the actual cost of materials and supplies used on construction projects unless the factor is readily and properly supportable by the governmental unit's accounting records.

(ii) The cost, or reasonable estimate thereof, of materials paid for as contract estimate items, but not used, will be considered a reduction of direct costs. Any material that is salvaged in connection with a project will be assigned a reasonable value and considered a reduction of direct costs.

(iii) Wetland plants and other materials used for wetland planting, wildlife habitat, or fish habitat may be provided to a public or nonprofit organization without a reduction of direct costs.

(g) Interdepartmental charges for work performed by the local government for the benefit of specific construction projects is limited to direct costs plus an allocation of indirect costs based on ten percent of direct labor dollars, excluding employee benefits.

(h) Other direct costs incurred for materials ((or)), services ((acquired)), establishment of assessment districts, or elections required for a specific project are eligible for participation by public works loan funds and may include, but are not limited to such items as:

(i) Telephone charges;

(ii) Reproduction and photogrammetry costs;

(iii) Video and photography for project documentation;

(iv) Computer usage; ((and))

(v) Printing and advertising; and

(vi) Election costs necessary to provide authority to incur debt or to establish a mechanism for debt repayment.

(4) Other than work identified in subsection (3)(a) of this section, no government employee labor related costs, including force account work, are eligible for financing assistance or to be considered as local match under this chapter.

(5) Applications must be submitted in writing, on forms provided by the board for the current funding cycle.

(6) A responsible official of the applicant jurisdiction must sign and verify each application for financial assistance. The official must also provide the board with additional materials or information in support of the application when requested by the board or its staff.

[Statutory Authority: RCW 43.155.040 (4) and (5). 98-24-010, 399-30-030, filed 11/19/98, effective 12/20/98. Statutory Authority: RCW 43.155.040(4). 92-03-052, 399-30-030, filed 1/13/92, effective 2/13/92. Statutory Authority: 1985 c 446 10. 85-24-072 (Order 85-17), 399-30-030, filed 12/4/85.]

Washington State Code Reviser's Office