Section 470 - Contract Provisions(a) The following provisions apply to loan contracts and loan-grant contracts: (1) Entities other than public agencies shall agree to provide security for repayment of the loan. This may include a provision for a lien on the domestic water system and associated facilities and improvements.(2) Every supplier receiving a loan shall retain a Fiscal Agent to collect principal and interest payments from the supplier and transmit them to the State when due. The services of the Fiscal Agent shall be continued until the loan has been fully repaid.(3) The term of the loan shall be as short as possible considering the ability of the supplier and its customers to repay the loan. If the supplier is a regulated public utility and the impact of the loan on water rates would be significant, consideration may be given in setting the term of the loan to the estimated useful life of the plant to be financed with the loan proceeds.(4) The contract shall provide for accumulation of necessary reserves to assure that funds will be available to make the semi-annual payments when due. A reserve of two semi-annual payments shall be accumulated during the first ten-year period for all repayment methods except those based on the quantity of water used, for which a reserve of four semi-annual payments shall be accumulated during the first ten years. Half of the required reserve balance shall be on deposit by the end of the first five years of the repayment period, and the full required reserve balance shall be on deposit by the end of the second five years. Reserves shall be maintained at these levels thereafter until the loan is repaid in full.(b) The following provisions shall apply to loan contracts, grant contracts, and loan and grant contracts: (1) When the project costs exceed the loan, grant or loan-grant commitment, funds will not be disbursed until supplier demonstrates acquisition of sufficient funds to complete the project. Safe Drinking Water funds will not be disbursed until all other sources of funding are exhausted. If a supplier has received both a loan and a grant, loan funds shall be disbursed before grant funds.(2) If a contract is not fully executed within one year after the Department transmits a letter of commitment of funds, the letter of commitment and associated contract may be withdrawn and the letter of commitment and contract renegotiated.(3) The supplier shall use the competitive bidding process for all contracts exceeding $10,000 unless an exception in writing has been obtained from the Department.(4) No funds will be disbursed pursuant to the contract until all conditions in the Department's letter of commitment and in the water permit issued by the Department of Health have been met.(5) Funds withheld pending completion of project items and contracts will not be disbursed until the Department has received a certification that the specific item or contract has been completed in accordance with the plans and specifications approved by the Department of Health.(6) The Department of Health will certify that the project has been completed in accordance with approved plans and specifications.Cal. Code Regs. Tit. 23, § 470
1. Renumbering and amendment of former Section 470 to Section 469 and renumbering and amendment of former Section 472 to Section 470 filed 8-11-83; effective thirtieth day thereafter (Register 83, No. 37). For prior history, see Register 80, No. 7. Note: Authority cited: Sections 13868 and 13892, Water Code. Reference: Sections 13861 and 13882, Water Code.
1. Renumbering and amendment of former Section 470 to Section 469 and renumbering and amendment of former Section 472 to Section 470 filed 8-11-83; effective thirtieth day thereafter (Register 83, No. 37). For prior history, see Register 80, No. 7.