DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT 
Water Quality Control Commission
5 CCR 1002-55
WATER QUALITY IMPROVEMENT FUND
REGULATION NO. 55
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55.8	NUTRIENTS MANAGEMENT GRANT FUND
(1)	Entity Eligibility
Eligibility is for facilities subject to section 85.5(1)(a)(iii), not including those facilities that are eligible for an exception under 85.5(3)(b).  Domestic Wastewater Treatment Works with capacity greater than two million gallons per day that are owned or operated by a local government and discharge to a high-priority watershed as designated by the Division are eligible to apply for a Nutrients Management Grant under this section. 
(2)	Project Eligibility
Projects for planning, design, construction, and/or improvement of domestic wastewater treatment works to comply with the effluent limitations in 85.5(1)(a)(iii) are eligible for grants.  
(3)	Project Prioritization 
The Division shall rank each project based on the priority score of each project. Projects will be funded in priority order from highest to lowest. The Division shall consider the following categories to determine the priority score of each Nutrient Management Grant project proposal:
(a)	The Division shall evaluate the financial and affordability needs of the proposed project.  Financial need shall be determined using a points system that ranks projects based on the median household income of the service area, estimated existing monthly sewer user charges as a percentage of median household income, and the amount of total sewer debt per connection. For eligible facilities that have more than one ownership entity, the Division will use an average for the combined service area for each of the applicable scoring elements. In the case of Special Districts, the Division will use census block data, if available, to determine the median household income for the area in which the District is located.  If census block data is not available, the Division will defer to the median household income for the County in which the District is located. 
A local match component of twenty percent (20%) of the total grant award will be applied to Planning Grants only.  Local commitment to the proposed planning project shall be determined using a points system that ranks projects based on the percentage of match in the form of  liquid capital, or funding from other sources that an applicant has committed to the project based on the estimated total project costs.  
Points shall be assigned based on the following criteria: 
i)	Median Household Income (MHI) of service area
 <75% of State MHI					20 points
Between 75% and 85% of State MHI			15 points
Between 86% and 95% of State MHI			10 points
Between  96% and 100% of State MHI			  5 points
>100% of State MHI					  0 points
ii)	User Fees (existing sewer fees/area MHI)
Rates are > 2.0% of the service area’s MHI		20 points
Rates are >1.5% and ≤2.0%of the service
 area’s MHI						15 points
Rates are >1.0% and ≤1.5% of the
 service area’s MHI					10 points
Rates are ≤1.0% of the service
 area’s MHI						  5 points
iii)	Total Sewer Debt per Connection (existing debt/number of connections)
> $1,500 per connection					20 points
Between $1,000 - $1,500 per connection		15 points
Between $500-$999 per connection			10 points
< $500 per connection				  	 5 points
iv)	Percent of Local Match Contribution (for Planning Grants only)
> 50% 							20 points
Between 35% and 50%					15 points
Between 20% and 34%					10 points
< 20%						  	 0 points
(b)	The Division shall evaluate the degree to which the project improves or protects surface water quality by assessing the characteristics of the stream receiving effluent discharge.  This includes determining whether the receiving stream has been classified as a cold water stream, a warm water stream, and the dilution rate of the receiving stream. 
Points for the receiving stream characteristics shall be assigned based on the following criteria:
i)	Receiving Stream Characteristics
Cold water stream					15 points
Warm water stream					10 points
ii)	Dilution Rates
Dilution rates <2:1 are considered “low”			15 points
Dilution rates <10:1 but ≥ 2:1 are 
considered “intermediate”				10 points
Dilution rates <50:1 but ≥10:1 are
considered “high”					  5 points
Dilution rates ≥ 50:1 are considered “very high”		  0 points
(c )	The Division shall also consider whether an entity has elected to incorporate a watershed approach to nutrient management that addresses the protection of surface and/or groundwater resources through either the planning and/or development of non-point source or agricultural BMPs both upstream and downstream from the facility; or the entity has elected to participate in or facilitate Community Action Partnerships, project sponsorship, or conduit financing mechanisms to enable other community stakeholders who will undertake nutrient, non-point source, or agricultural monitoring efforts both upstream and downstream of the facility.  Applicants that incorporate such efforts, in addition to their treatment facility upgrade and adaptations, shall be awarded 10 points. 
(d) 	The Division shall evaluate the impacts of operational cost for Design/ Construction Projects and for Planning Projects with separate criteria. 
The operational costs for Design/Construction projects will evaluate nutrient treatment upgrades and adaptations to existing Domestic Wastewater Treatment facilities based on cost per million gallons treated. Operational cost estimates are based on broad technology types available for nutrient removal and benchmarks are based on national cost averages published in the U.S. EPA (2008) Municipal Nutrient Removal Technologies Reference Document Volume I; Chapter 4, Cost Factors, which is incorporated herein by reference. This incorporation does not apply to later amendments or editions of the document, and is available via internet: http://water.epa.gov/scitech/wastetech/upload/mnrt-volume1.pdf,  or from the Water Quality Control Commission Office, 4300 Cherry Creek Drive South, Denver, CO 80246, 303-692-3463.
Points for Design/Construction projects shall be assigned based on the following criteria:
i)	Estimated Operational Cost per million gallons (MG) treated
<$75 per MG treated				  	 5 points
Between $75 - $200 per MG treated			10 points
Between $199 and $500 per MG treated			15 points
>$500 per MG treated					20 points
ii)	The Division shall evaluate the costs associated with Planning projects that incorporate one or more of the following nutrient management planning methodologies. For each of the following methodologies that are included, five points will be awarded.
Water Quality Monitoring Plan Development		5 points
Operational Optimization Study				5 points
Operations Pilot Testing of Nutrient Removal
Technology						5 points
Carbon Planning for Biological Nutrient Removal (BNR) 
Technology						5 points
(e) 	The Division shall determine the level of environmental impacts as a result of nutrient loading based on the number of Single Family Equivalent (SFE) units located within the service area. Points shall be assigned based on the following criteria:
i)	Environmental impact based on number of SFE’s in Service Area 
<10,000						  5 points
Between 10,000 and 30,000				10 points
Between 30,001 and 50,000				15 points
Over 50,000						20 points
(f) 	The Division shall evaluate whether the applicant has a Utility Management Plan in place that includes one or more of the criteria referenced below.  For each of the following criteria that are met, 5 points shall be assigned:
i)	Secures a replacement fund for the rehabilitation and replacement of infrastructure as needed.
ii)	Includes provisions addressing the proper training, licensing, and certification of operators required to adequately operate and maintain the selected wastewater treatment technology.
iii)	Includes provisions ensuring that the facility has adequate in-house staffing, long-term management contracts, or partnerships with third-party providers to properly operate and maintain the facility.
iv)	Provides sufficient revenue to meet operations and maintenance capital needs (operating revenue divided by the operating expense).
v)	Includes mechanisms to protect infrastructure investments to ensure longevity and ongoing functionality of non-point source BMPs.
(g)	The Division shall determine whether the project is ready to proceed with funding based on the following indicators specific to Design/Construction projects.  For each of the following criteria that are met, 5 points shall be assigned:
i)	Site Application has been submitted.
ii)	Process Design Report has been submitted.
iii)	Technical Plans and Specifications have been submitted.
(h) 	The Division shall determine whether the project is ready to proceed with funding based on the following indicators specific to Planning projects.  For each of the following criteria that are met, 5 points shall be assigned:
i)	Applicant has the required twenty percent (20%) local match secured and held in cash reserve.
ii)	Engineer/Consultant(s) has been selected.
iii)	Agreements with selected Engineer/Consultant(s) are in place.
(i) 	In the event that two or more projects have the same priority score and rank, the Division shall give priority to the project that is most ready to proceed with moving forward with financial assistance based on the readiness to proceed indicators specified in subsection 3(g) and (3)(h) above.  If projects remain tied, priority will be given to the applicant that demonstrates the highest financial need pursuant to subsection 3(a).
(4)	Funding Allocation and Awarding Process
The Colorado General Assembly created a Nutrients Management Grant fund to assist eligible applicants with the costs associated with implementation of the Nutrients Management Control Regulation #85. Funding is contingent upon final appropriation by the Colorado General Assembly. Pending appropriation, the Division will develop a Request for Application (RFA) to solicit projects for funding. If there are more requests than available funds, the Division will prioritize projects based on the above criteria and will notify all applicants of their funding status after the establishment of a fundable list.  The fundable list will be posted on the Division website to identify the recipients of funds and the amount of each award.
Projects will be funded in priority order, highest to lowest, until all funds have been allocated. The Division will determine the amount of funding to be made available for Design/Construction projects and the amount to be made available for Planning projects.  The Division will have the authority to transfer funds between Design/Construction projects and Planning projects as needed to sufficiently meet the demand indicated by the number of Nutrient Management Grant applications that are received.  In the event that funds remain unallocated subsequent to a transfer of funds between project types, the Division has the authority to increase the amount of grant awards in priority order, highest to lowest, until all of the funds have been allocated.
55.9 - 55.10	RESERVED
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55.14	STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY, AND PURPOSE, MAY 13, 2013 RULEMAKING, EFFECTIVE JUNE 30, 2013
The provisions of Sections 25-8-202, 25-8-308, and 25-8-608, C.R.S. provide the specific statutory authority for adoption of the attached regulations. The Commission, in compliance with section 24-4-103(4), C.R.S., has adopted the following statement of basis and purpose.
BASIS AND PURPOSE
During the 2013 legislative session the General Assembly created a new program under HB-13-1191 entitled the Nutrient Grant Fund. HB-13-1191 requires the Commission to promulgate rules necessary to administer the program as an amendment to Regulation #55, the Water Quality Improvement Fund. In order to assist parties submitting a Request for Applications, and in order to provide a transparent process for allocation and award of the funds the Commission created section 55.8, Nutrients Management Grant Fund. This section established four subsections for administering the program; Entity Eligibility, Project Eligibility, Project Prioritization, and Funding Allocation and Awarding Process. 
Entities eligible for funding under this section are those Domestic Wastewater Treatment Works owned and operated by local governments and subject to the first phase implementation of Regulation #85. Funds can be used for projects to plan, design, construct, or improve a wastewater treatment works in order to comply with the effluent limits of Regulation #85. 
The Project Prioritization criteria that were developed for the Nutrient Management Grants were designed to reflect language contained in HB-13-1191 which emphasized priority to be given to eligible applicants who would be the most financially burdened by the costs associated with incorporating the necessary improvements or adaptations to their domestic wastewater treatment facilities necessary to achieve compliance with Regulation #85. The priority system is comprised of five sections (affordability, water quality, operational costs/environmental impact, managerial capability, and readiness to proceed) with the majority of total points available to capture financial need of eligible applicants. Some sections have multiple criteria for scoring. The priority system evaluates the environmental impacts associated with nutrient loads to surface waters, the anticipated operational costs associated with implementing nutrient management controls, and the ability of eligible applicants to properly operate, maintain, and ensure the longevity and integrity of infrastructure investments.  The priority system also provides points for eligible applicants who work cooperatively with community partners in efforts to address nutrient management on a watershed basis by incorporating non-point source monitoring and best management practices both upstream and downstream of the domestic wastewater treatment facility.  
The Commission felt that a local match commitment of twenty percent (20%) for Planning grants was important to show applicant commitment and so will award 5 points for those meeting the twenty percent match with cash funds. Applicants with Planning projects who elect to contribute an amount greater than twenty percent of the grant award will receive additional points for their demonstration of local commitment. The Commission also determined that applicants with Design/Construction projects would ultimately contribute an amount greater than twenty percent of the grant award due to the level of cost associated with design and construction, therefore nullifying the need to apply a local match requirement for Design/Construction projects. 
The development of Readiness to Proceed criteria for both Design/Construction and for Planning projects is an important criteria that will assist in ensuring that all funds will be allocated and expended within a three-year timeframe pursuant to HB-13-1191.  The amount made available for Design/Construction projects and for Planning projects will be determined and identified at the time the Request for Applications has been noticed. In order to properly address the variability in demand for funding of Design/Construction and/or Planning, the Commission has provided the ability to transfer funds between Design/Construction and Planning projects to satisfactorily accommodate the demand indicated by the number and type of project applications. The Commission has also determined that it may be necessary to increase the amount of individual Nutrient Management Grant awards to ensure that all funds have been allocated to eligible entities.