§ 488. Contract Provisions.
23 CA ADC § 488BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS
23 CCR § 488
§ 488. Contract Provisions.
(a) The following provisions apply to loan contracts and loan-grant contracts:
(1) Suppliers other than public agencies shall 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, and liens on other real and personal property belonging to the supplier.
(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. A public agency may employ the services of its county controller or treasurer as Fiscal Agent.
(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 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 project to be financed with the loan proceeds.
(4) The contract shall require the supplier to deposit with its Fiscal Agent sufficient reserves to assure that funds will be available to make the semiannual payments when due. A reserve of two semiannual 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 semiannual payments shall be accumulated during the first ten years. Half of the 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-grant contracts:
(1) Except as otherwise authorized by the Department, when the project costs exceed the loan, grant, or loan-grant commitment, no State funds shall be disbursed until the supplier demonstrates acquisition of sufficient funds to complete the project. No State funds shall be disbursed until all other sources of funds have been exhausted. If a supplier has received both a loan and a grant, all 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. A supplier seeking a waiver of the contractual competitive bidding requirement shall make a written request to the Department which sets forth the reasons for the request and demonstrates that no statute or ordinance imposing competitive bidding requirements on the supplier will be violated if the waiver is granted. In addition, applicants shall obtain the written consent of the Department of Health Services before using the services of their own employees to perform engineering or construction work on the project.
(4) No funds will be disbursed pursuant to the contract until all conditions in the Department's commitment and in the water permit issued by the Department of Health Services have been met.
(5) Funds withheld pending completion of project items and contracts will not be disbursed until the Department has received written certification that the specific item or contract has been completed in accordance with the plans and specifications approved by the Department of Health Services.
Note: Authority cited: Section 13834, Water Code. Reference: Sections 13819 and 13820, Water Code.
This database is current through 6/17/22 Register 2022, No. 24
23 CCR § 488, 23 CA ADC § 488
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