WSR 06-22-073



[ Filed October 31, 2006, 10:48 a.m. ]

The department of ecology (ecology) has decided to withdraw CR-101, WSR 02-23-009, dated November 7, 2002, at 4:28 p.m. (AO 02-15).

In 2002, the water quality program proposed the use of a pilot-rule project as a means to potentially amend chapter 173-98 WAC, Uses and limitations of the water pollution control revolving fund, (SRF). Several public bodies requested us to initiate the pilot-rule project to allow them to use the "service agreement" concept per chapter 70.150 RCW, Water Quality Joint Development Act to receive low interest loans awarded under chapter 173-98 WAC for completion of wastewater facilities.

Through the pilot-rule process, we expanded the project to include provisions of chapter 39.10 RCW, Alternative public works contracting procedures, and chapter 35.58 RCW, Powers of metropolitan municipal corporations. The pilot-rule project provisions to allow for SRF loans to be issued are referred to as alternative contracting/service agreement (AC/SA), in Appendix L to the Guidelines for the FY 2006 Water Quality Program Funding Cycle, at

We held a public meeting on July 12, 2006, to explain our intentions to end the pilot-rule project. We are being responsive to the expressed concerns of public bodies that may eventually proceed with AC/SA.

Numerous issues were identified during the pilot-rule project that needs to be addressed as we attempt to prepare for and administer AC/SA loans under chapter 173-98 WAC. Also identified were issues that public bodies need to address as they proceed with AC/SA projects. These issues are outlined with further background information in the pilot-rule report available on ecology's web site.

As our staff proposed at the July 12 public meeting, we will:

1. Discontinue the pilot-rule project at this time so we will not be encumbered with new agreements as it continues to develop the formal rule under chapter 173-98 WAC;

2. Defer any new AC/SA's loan requests; and

3. Implement changes to a new AC/SA process through formal rule making for the FY 2009 funding cycle, scheduled to begin in September 2007.

The water quality program will continue to manage existing AC/SA - SRF loans issued to several public bodies in accordance with the pilot-rule process outlined in program guidelines for SRF.

The final pilot-rule report entitled, Alternative Contracting/Service Agreement - Pilot Rule Project Final Report Relating to Chapter 173-98 WAC Uses and Limitations of the Water Pollution Control Revolving Fund (SRF) is available on the agency web site at It provides an overview of our experiences and rationale for our decision.

David C. Peeler

Water Quality Program Manager

Washington State Code Reviser's Office