Original Notice.

Preproposal statement of inquiry was filed as WSR 021-005 [00-21-005].

Title of Rule: 1. Organization and operation of the Public Works Board, WAC 399-10-010.

2. Loan and financing guarantee applications, WAC 399-30-030, 399-30-042, and 399-30-050 [399-30-040].

3. Disclosure of recusal, WAC 399-50-040.

Statutory Authority for Adoption: RCW 43.155.040(4).

Statute Being Implemented: Chapter 43.155 RCW.

Summary: These WAC changes will provide for updated public information access; clarify eligible costs; clarify the board's intent to consider past management practices; and eliminate outmoded language in the board's ethics code.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Pete Butkus, P.O. Box 48319, Olympia, WA 98504-8319, (360) 725-5003.

Name of Proponent: Public Works Board, governmental.

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

Explanation of Rule, its Purpose, and Anticipated Effects: WAC 399-10-010, update contact numbers for the public.

WAC 399-30-030, 399-30-042 and 399-30-050 [399-30-040], add eligible costs concerning public communication and value engineering; clarify that past management practices can be considered by the board when making loan or financing guarantee decisions.

WAC 399-50-040, remove outmoded language from the board's ethics code.

Proposal Changes the Following Existing Rules: Language as noted above is added to the specific WAC sections with the exception of WAC 399-50-050 [399-50-040], which removes language.

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 March 6, 2001, at 8:30 a.m.

Assistance for Persons with Disabilities: Contact the receptionist by February 23, 2001, TDD (360) 586-4224.

Submit Written Comments to: Pete Butkus, Public Works Board, P.O. Box 48319, Olympia, WA 98504-8319, fax (360) 664-3029, by February 23, 2001.

Date of Intended Adoption: March 6, 2001.

January 24, 2001

Pete Butkus

Executive Director

OTS-4598.1

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

WAC 399-10-010   Organization and operation of the public works board.   (1) The public works board is a thirteen-member board appointed by the governor under RCW 43.155.030.

(2) The governor appoints one of the general public members as chair. The board may elect other officers for terms deemed necessary.

(3) The department of community, trade, and economic development provides staff support and office space to the board at P.O. Box 48319, Olympia, Washington 98504-8319; phone (360) ((753-2200)) 725-5000.

((The board's Internet site is: WWW.CRAB.WA.GOV/PWTF))

[Statutory Authority: RCW 43.155.040 (4) and (5). 98-24-010, 399-10-010, filed 11/19/98, effective 12/20/98. Statutory Authority: RCW 43.155.040(4). 95-11-093, 399-10-010, filed 5/19/95, effective 6/19/95; 93-22-014, 399-10-010, filed 10/26/93, effective 11/26/93. Statutory Authority: 1985 c 446 10. 85-24-072 (Order 85-17), 399-10-010, filed 12/4/85.]

OTS-4599.1

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 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) Public communication plans and activities;

(ii) Telephone charges;

(((ii))) (iii) Reproduction and photogrammetry costs;

(((iii))) (iv) Video and photography for project documentation;

(((iv))) (v) Computer usage; ((and

(v))) (vi) Printing and advertising; and

(vii) Value engineering and performance audits.

(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.]

(2) Applications will be evaluated and prioritized in accordance with the following procedures:

(a) Staff will log in all applications as received.

(b) Staff will review all applications for compliance with the minimum qualification requirements of WAC 399-30-030(2). Jurisdictions whose applications do not meet the minimum qualification requirements will be notified in writing of the disqualification.

(c) Staff will perform an evaluation of all applications which meet the requirements of WAC 399-30-030(2). Applications will be scored according to the number of points awarded for responses provided in the statements of local management efforts and project need.

(i) Not less than sixty points, of a one hundred point total, will be assigned to responses to questions identified in the application as relating to local management effort.

(ii) The remaining forty points will be assigned to responses to questions identified in the application as relating to project need.

(d) Staff will provide the board with evaluation and scoring of the applications. All application materials will be available to the board for their deliberations. The board will approve a ranked list of projects based on the information provided to them by the staff and the applications.

(e) The board may adjust the ranked list in consideration of the following factors:

(i) Geographical balance;

(ii) Economic distress;

(iii) Type of projects;

(iv) Type of jurisdiction;

(v) Past management practices of the applicant, including, but not limited to, late loan payments, loan defaults, audit findings, or inability to complete projects within the time allowed by loan agreement;

(vi) Other criteria that the board considers advisable.

(f) Staff will verify critical information on each project as required by the board.

(g) In order to ensure fairness to all jurisdictions with applications pending before the board, the board will not accept oral or written testimony from any applicant while deliberating loan priorities, other than specific responses to information requests initiated by the board as provided in (h) of this subsection.

(h) The board may consult with officials of jurisdictions having projects submitted for funding on any issue it wishes to address.

(3) Applicants will be notified in writing of board decisions.

[Statutory Authority: RCW 43.155.040 (4) and (5). 98-24-010, 399-30-040, filed 11/19/98, effective 12/20/98. Statutory Authority: RCW 43.155.040(4). 95-11-093, 399-30-040, filed 5/19/95, effective 6/19/95; 93-22-015, 399-30-040, filed 10/26/93, effective 11/26/93; 92-03-052, 399-30-040, filed 1/13/92, effective 2/13/92. Statutory Authority: RCW 43.155.040. 88-10-009 (Order 88-02), 399-30-040, filed 4/22/88; 87-17-013 (Order 87-16), 399-30-040, filed 8/10/87; 86-18-009 (Resolution No. 86-12), 399-30-040, filed 8/21/86. Statutory Authority: 1985 c 446 10. 86-03-051 (Resolution No. 85-17), 399-30-040, filed 1/15/86.]

(2) All applications will be evaluated in accordance with the following procedures:

(a) Staff will log in all applications as received.

(b) Staff will review all applications for compliance with the minimum qualification requirements of WAC 399-30-030(2). Jurisdictions whose applications do not meet the minimum requirements will be notified in writing of the disqualification.

(c) Staff will perform an evaluation of applications which meet the requirements of WAC 399-30-030(2) to determine if the application is consistent with the policies contained in the capital planning support loan application.

(d) Those applications found to be consistent with board policies may be recommended to the board for funding. All application materials will be available to the board for its deliberations. The board will approve a list of projects based on the information provided to it by the staff and the applications.

(e) The board may then adjust the list in consideration of the following factors:

(i) Geographical balance;

(ii) Economic distress;

(iii) Past management practices of the applicant, including, but not limited to, late loan payments, loan defaults, audit findings, or inability to complete projects within the time allowed by loan agreement;

(iv) Other criteria that the board considers advisable.

(f) Staff will verify critical information on each project as required by the board.

(g) The board may consult on any issue it wishes to address, with officials of jurisdictions having projects submitted for funding.

(3) Applicants will be notified in writing of board decisions.

[Statutory Authority: RCW 43.155.040 (4) and (5). 98-24-010, 399-30-042, filed 11/19/98, effective 12/20/98. Statutory Authority: RCW 43.155.040(4). 92-03-052, 399-30-042, filed 1/13/92, effective 2/13/92. Statutory Authority: RCW 43.155.040. 88-17-080 (Order 88-03), 399-30-042, filed 8/22/88.]

OTS-4600.1

AMENDATORY SECTION(Amending WSR 00-11-021, filed 5/9/00, effective 6/9/00)

WAC 399-50-040   Disclosure of recusal.   A board member shall disclose to the public the reasons for his or her recusal from any board action at the time of the recusal. A board member shall disclose to the public the nature of any interest the member has in a project on the annual construction roster or other aggregated list or roster of ((ten or more)) contracts, projects, or loans at the time the roster or list is considered by the board. Board staff shall record each such recusal or disclosure and the basis therefor.

[Statutory Authority: Chapter 42.52 RCW and RCW 43.155.040(4). 00-11-021, 399-50-040, filed 5/9/00, effective 6/9/00.]

Washington State Code Reviser's Office