Political subdivisions shall meet the following requirements before closing. (1) The political subdivision shall submit three copies of plans and specifications, or other appropriate engineering design documents each of which conform to the representations made in the loan application. The plans and specifications must be as detailed as would be required for submission to contractors bidding on the work. In addition, the political subdivision shall submit a draft copy of the construction contract bid documents for each construction contract to be let. (2) If the political subdivision chooses to construct the project using its own employees and material (use force account) the application must certify that: (A) the political subdivision personnel who will perform the work possess the necessary competence required to perform the work and can schedule and accomplish the force account work in a timely manner;
(B) the political subdivision will maintain insurance that is adequate and customary for construction or project work, including, but not limited to, fire and casualty, workers' compensation, liability, and "all risk insurance" as required by local or state law; and (C) the political subdivision either has or will establish a proper recordkeeping system to assure that all materials, supplies, and equipment, and labor costs charged to the project are actually used in connection with the project. (3) The political subdivision shall obtain insurance coverage naming the political subdivision, any other party who is an owner or operator of the facility, and the board as insureds and at a minimum including a comprehensive/commercial general liability insurance policy and a property insurance policy with a multi-peril coverage in an amount deemed appropriate in light of the degree and duration of risks associated with the facility.
This requirement may be waived by the board if such insurance is unavailable to the political subdivision and the political subdivision agrees to establish a reserve fund to pay and satisfy claims relating to environmental risks in an amount which is deemed appropriate in light of the degree of risks associated with the facility. (4) The political subdivision shall submit representations, warranties, agreements, and covenants by the political subdivision relating to or addressing environmental matters and conditions. (5) The political subdivision shall execute agreements to indemnify the board and its staff on all environmental claims arising out of the facility, and shall supply any additional agreements, documents, or instruments necessary to ensure the validity and enforceability of the indemnity.
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