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​​​​Executing a Contract (Legal Questions)

What are the requirements for MBE/WBE?
The Department of Environmental Protection (DEP) is responsible for administrating the MBE/WBE requirements. Information on DEP's Disadvantaged Business Enterprises solicitation requirements are available at https://www.dep.pa.gov/Business/Water/CleanWater/InfrastructureFinance/Pages/DisadvantagedBusiness.aspx. PENNVEST must have a copy of the DEP approval letter of the MBE/WBE effort, to close the loan.​

Does anyone other than the legal office review items on the Outstanding Items list?
Yes, upon receipt, the legal office forwards to the project specialist the following items for review:
    • Organizational and Management Plan
    • Total Cost Breakdown
    • Funding Schedule
    • Estimated Allocation of Cost (Federal Funded Projects only)

Operator’s Five Year Continuing Education Plan(Construction Sewer and Water only)
Note: The project specialist needs to sign off on the exhibits before closing. Project specialist would like these items 30 days, prior to closing.

What items on the Outstanding Items list does PENNVEST need before closing?
All items on the Outstanding Items list need to be completed before the day of closing so PENNVEST may review the documentation and make suggestions for possible revisions.​

What kind of evidence is needed for the Borrower’s equity contribution/other loan?
If the Borrower has another lender contributing in the project, PENNVEST will need evidence that that other loan has closed, prior to the PENNVEST Loan Closing. If Borrower has CDBG/DEP/DCED money in the project, PENNVEST will need a copy of the respective approval letter. If the Borrower is contributing their own funds to the project, PENNVEST will need a bank statement or some evidence that shows those funds are available to the Borrower.

Can PENNVEST funds be used for land costs with regards to sewer projects?
No, all land and associated costs are to be borne by the borrower.

As a Municipal Authority, do I need to extend my Articles of Incorporation before closing?
Yes, if the life of the Borrower is less than the term of the PENNVEST loan. This action must be taken prior to closing.

Can I use the loan proceeds to pay for easement and land costs?
The acquisition of property rights that are a necessary part of the project are an eligible use of the proceeds of the PENNVEST funding award, subject to the following limitations:
    • For wastewater projects, only costs associated with the purchase of land that is a component of the collection process or the physical, biological, or chemical treatment process are eligible for reimbursement, and
    • For drinking water projects, only costs associated with the purchase of land that is a component of the collection, treatment, or distribution process and which is acquired from a willing seller, are eligible for reimbursement.​

Why do I need all easements/right of ways in order to close?
PENNVEST must have evidence that the Borrower has the ability to construct the project on the property evidenced by the easement or fee. If condemnations have been filed the 30 day appeal period must have run prior to loan closing with no preliminary objections having been filed. PENNVEST will not disburse funds to a Borrower that may not be able to complete a project due to right of way issues.

Must construction contracts be awarded prior to closing?
Yes, PENNVEST must have sign a copy of signed contracts to close the loan as well as copies of the payment and performance bonds, labor and materials bonds and the contractors liability insurance.

Who should attend closing?
Normally, two people authorized to sign on behalf of and bind the Borrower (usually the President or Chairman to bind and the Secretary to attest and affix the seal), Legal Counsel and the Engineer.

How do I get a letter of no prejudice?
Contact the Project Specialist within your region.

Who do I contact to schedule a Loan closing or ask about draft documents/Outstanding Items?
For more information contact:
What are the requirements for the Local Government Unit Debt Act?
Information and requirements for the Local Government Unit Debt Act is available on the Web at www.inventpa.com. PENNVEST must have a copy of the entire approved DCED package in order to close the Loan.