SECTION 375.93. Disbursement of Funds

(a) Escrow of funds. The executive administrator may deposit funds into an escrow account at the time of closing of the financial assistance. Releases from an escrow account shall occur on a reimbursement method as described in subsection (b), sequentially based on milestones as described in subsection (c) of this section, or in accordance with phasing required for the applicable project. The Applicant must submit outlays for all expenses incurred.

(b) Method of release of funds to construction account. There are two methods for the release of funds from the escrow account to the construction account depending on whether there is a principal forgiveness component. If there is no principal forgiveness, then the funds are released from the escrow account to the construction account when the Applicant has achieved the project milestones described in subsection (c) of this section or has completed the phases as approved by the Board, and requests in writing a release of funds. If there is a principal forgiveness component, then funds are released on a reimbursement method. The executive administrator may issue a written authorization for the release of funds from an escrow account based on the receipt of outlay reports supported by detailed invoices of expenditures. The outlays and the releases from an escrow account must be consistent with the approved project schedule. In addition, for all financial assistance the executive administrator may approve the deposit of funds for certain costs into the construction account at the time of closing on the financial assistance.

(c) Sequence of availability of funds. Financial assistance shall be available for disbursement in the following sequence:

(1) for planning and permitting costs, after receipt of executed contracts for the planning or permitting phase, and after approval of a water conservation plan and a project schedule;

(2) for design costs, after receipt of executed contracts for the design, after approval of an engineering feasibility report, and after completion of the environmental review; and

(3) for construction costs, after issuance of any applicable permits, after acquisition documents and contract documents (including plans and specifications) are approved and executed, and after the executive administrator has approved the issuance of a Notice to Proceed.

(d) Outlay reports. Applicants shall submit outlay reports supported by detailed invoices for incurred costs as the project progresses in accordance with the project schedule. Applicants shall submit outlay reports, in a form determined by the executive administrator, as follows:

(1) for financial assistance for planning, acquisition, and design, quarterly; and

(2) for financial assistance for construction, monthly.

(e) Consistency for project schedules and outlays. The executive administrator shall require that projects proceed in accordance with approved project schedules as closely as possible, and that outlays are submitted as required in subsection (d) of this section.

Source Note: The provisions of this §375.93 adopted to be effective July 4, 2016, 41 TexReg 4853