COLONIAS INFRASTRUCTURE BOARD COLONIAS INFRASTRUCTURE PROJECT FUND PROJECT SELECTION AND MANAGEMENT POLICIES

COLONIAS INFRASTRUCTURE BOARD COLONIAS INFRASTRUCTURE PROJECT FUND PROJECT SELECTION AND MANAGEMENT POLICIES I. PURPOSE The purpose of the Colonias Infrastructure Board is to help address inadequate infrastructure in Colonia-recognized communities as provided for in the Colonias Infrastructure Act, NMSA 1978, Sections 6-30-1 6-30-8 that has resulted in poor social, health and economic conditions. Using the resources provided through the Colonias Infrastructure Project Fund, the Colonias Infrastructure Board will support the planning and development of infrastructure in an efficient and cost-effective manner for projects that improve quality of life for Colonia residents and encourage economic development. Working in concert with the Colonias Infrastructure Project Fund Rules, these Project Management Policies set forth the criteria by which the Colonias Infrastructure Board will prioritize projects for financial assistance from the Colonias Infrastructure Project Fund. II. GOALS The goals of these Project Management Policies are to: Foster a coordinated, strategic, long-range approach to community planning, infrastructure, funding and development; Set standards for funding based on need, community impact, and feasibility; Establish criteria for the prioritization of projects based upon health, safety and welfare; and Support the public health and economic vitality of Colonias in New Mexico through comprehensive planning and investment in infrastructure; In developing this comprehensive framework for project prioritization and readiness, the Colonias Infrastructure Board provides guidance to agency staff and applicants regarding suitability for financial assistance from the Colonias Infrastructure Project Fund. III. IMPLEMENTATION These Project Management Policies will be implemented by the Colonias Infrastructure Board as supported by agency staff and may, at times, be waived by the Board if the Board determines in a public meeting that a deviation from its adopted policies is necessary. Such a waiver will be approved by the Board only when necessary to meet the goals of the Colonias Infrastructure Act Adopted January 13, 2012

and only in a manner that remains consistent with the purposes of the Act. Such waiver will be reflected in the agenda and minutes of the public meeting at which the waiver is approved. SECTION 1. PROJECT PRIORITIZATION POLICY Section 1.1 Overview In creating the Colonias Infrastructure Board, the Legislature sought assistance from a diverse group of stakeholders for evaluating and funding a variety of infrastructure projects from limited state funds. Section 1.2 General Considerations The Colonias Infrastructure Board seeks to strategically prioritize and package infrastructure projects that make the best use of local, state, and federal dollars and provide beneficial infrastructure that will have a positive impact on the quality of life for Colonias residents. Section 1.3 Funding Considerations and Guidelines Factors The Colonias Infrastructure Board seeks to make a positive impact with the funding as quickly as possible and will consider the following factors in prioritizing and funding projects: A. Urgent Needs. For purposes of these policies, the Colonias Infrastructure Board defines urgent needs as: 1. Projects that cure regulatory compliance issues cited by the New Mexico Environment Department. 2. Public Health Threats including waterborne disease outbreak, wastewater treatment and inadequate water supply so long as the proposed project addresses the existing or imminent threats. 3. Safe Drinking Water Act Compliance for projects with the following conditions: Acute and chronic risk contaminants and treatment technique requirements will be considered for systems that have violations in the past year and if the proposed project addresses the existing or imminent threats; or Federal regulations compliance will be considered if the system has a certified operator and the proposed project will enable the system to comply with federal regulations. 4. Emergencies brought on by catastrophic events or severe weather conditions. The catastrophic event should require, at a minimum a Governor s Emergency Declaration Adopted January 13, 2012 2

5. Flood and drainage issues resulting from non-existent, inadequate or poorly designed infrastructure causing health and safety issues. 6. Dam Safety projects that restore to a safe condition impending failures in dam structures. 7. The Colonias Infrastructure Board may accept lesser levels of organizational readiness and application standards for projects determined to be urgent. B. Readiness. Projects with approved plans and specifications in place that are ready to begin construction as in Section 4.3A. C. Leveraging of other funds. Projects that leverage local, state and federal funds, as outlined in Section 4.3A8. In these instances, project will be defined as the current phase of a larger multi-phase project, if applicable. D. Regionalization. The Colonias Infrastructure Board supports infrastructure management projects that demonstrate appropriate geographic cooperative efforts and prevent the proliferation of unsustainable independent systems. Towards that end, the Colonias Infrastructure Board provides the following definition of regionalization. 1. The Colonias Infrastructure Board defines regionalization as a process through which multiple communities or existing systems collaborate to consolidate physical infrastructure and/or management and operations, including other shared resources to achieve efficiency and economies of scale. This definition includes regionalization that occurs at different scales depending on the geographic context. The Colonias Infrastructure Board recognizes that regionalization is not universally feasible for all projects and therefore does not preclude consideration of funding individual systems unable to regionalize. 2. The Colonias Infrastructure Board encourages regional projects to collaborate in order to self-prioritize the timing sequence of their federal and state funding requests and support state and federal authorizing legislation for multi-phase projects. E. Project Design and Implementation. The Colonias Infrastructure Board supports planned and well-designed projects that will be ready for implementation upon award and will prioritize applications based upon the following: 1. Applicants that best demonstrate financial, managerial and technical capacity as outlined in Section Three of these Project Management Policies. Adopted January 13, 2012 3

2. Applicants that evidence project readiness as outlined in Section Four of these Project Management Policies. F Cost/Benefit. The Colonias Infrastructure Board supports projects that address the needs of the greatest population in a cost-effective manner. This priority should not however rule out meeting the critical health and safety needs of smaller populations. Section 1.4 Annual Percentages to Project Types In establishing the Colonias Infrastructure Act, the Legislature recognized that these designated communities lack a variety of basic infrastructure that exposes the residents to a variety of health and safety concerns and hinders effective economic development. As a result, the Legislature has authorized the Colonias Infrastructure Board to fund water and wastewater systems, solid waste disposal facilities, flood and drainage control projects, roads, and housing infrastructure. Given the demand for the diverse infrastructure needs, and recognizing that the urgency of the needs may fluctuate annually based upon weather or catastrophic events, the Colonias Infrastructure Board may annually decide on funding targets ranges across the eligible project types. This dedication will occur through official Board action before the opening of any annual application round. The annual decision on funding targets will be included in any application announcement. Section 1.5 Project Continuations A. To encourage timely completion of projects and to maximize participation, the Colonias Infrastructure Board requires all non-municipal and non-county applicants that have received prior Colonias Infrastructure Project Fund awards to certify completion of all projects prior to approval of the new award for funding, unless the new project will cure a condition considered urgent and the Colonias Infrastructure Board has determined the non-municipal and non-county applicant has the operational capacity to oversee the development of the additional project without impairing either the existing or new project. B. As a project progresses into additional phases, the Colonias Infrastructure Board may require greater levels of organizational management and contributions toward the project. SECTION 2 LOCAL SUPPORT POLICY Section 2.1 Overview The Colonias Infrastructure Board seeks to distribute the limited resources provided through the Colonias Infrastructure Project Fund geographically and across infrastructure types the limited resources provided through the Colonias Infrastructure Project Fund. The Colonias Infrastructure Board must ensure that funds are awarded to those entities with demonstrated strong local support and financial commitment. The Local Support Policy provides guidance to the Colonias Infrastructure Board and its applicants on the definitions of and minimum requirements for local support and contribution. Adopted January 13, 2012 4

Section 2.2 General Considerations To ensure efficient and full leveraging of all available local, state and federal dollars directed towards the needs of Colonias, the Colonias Infrastructure Board will require leveraging of funds, multi-agency collaboration and local participation for all projects. Section 2.3 Public Participation The Colonias Infrastructure Board requires applicants to submit evidence that their proposed projects and applications for financial assistance received adequate public participation and complete disclosure, including where applicable: A. Demonstration of Adequate Public Notice, including: 1. Open Meetings Resolution; 2. Public Hearing Notice; 3. Minutes of Public Hearing; 4. Application Resolution; and 5. Minutes from meeting where Resolution was approved. B. Environmental Information Document or previously issued Environmental Assessment or Environmental Impact Statement that demonstrates public participation. Section 2.4 Financial Assistance Awards Local support and contribution are vital to the success of any infrastructure project and will ensure the long-term solvency of the Colonias Infrastructure Project Fund by providing annual streams of revenue available to fund additional projects. A. As demonstration of the Applicant s commitment towards the project, the Colonias Infrastructure Board will require that each funding package contain a loan component equal to 10% of the awarded amount, with the remainder delivered as a grant. 1 The loan will be structured with an interest-free loan for a term that is not greater than the useful life of the project, and in any event not to exceed 30 years. 2 The loan may contain provisions to petition the New Mexico Finance Authority to waive annual loan payments if the Borrower has encountered an unforeseeable hardship, as determined by the New Mexico Finance Authority and the Department of Finance and Administration. Adopted January 13, 2012 5

3 Loans made on planning projects may be converted to grants if the Borrower agrees to and completes technical assistance for managerial, technical and financial capacity as provided by the Colonias Infrastructure Board. 4 Borrowers funded for construction projects may substitute a soft match as defined in Section 2.5 B 2 of these Project Management Policies for the mandatory loan component if the value of the soft match is equal to at least the amount of the required loan component. B. To ensure a fair allocation of funding for all qualified entities, the Colonias Infrastructure Board will impose the following limitations on funding of applications: 1 No single project may receive more than 15% of the available funds in any given funding cycle; 2 No single benefiting entity may receive more than 20% of the available funds in any given funding cycle; 3 Applicants applying for one or more projects in a given application cycle, may not receive more than 50% of the available funds in that funding cycle; and 4 All the applicants within a county may not receive, in the aggregate, more than 50% of the available funds in any funding cycle. Section 2.5 Funding Match Obligation Local support and contribution are vital to the success of any infrastructure project and the Colonias Infrastructure Board will require entities to demonstrate commitment to the project in the form of a local match. A. The Colonias Infrastructure Board will require that each funding package contain a local match component equal to at least 10% of the awarded amount. B. Definition of local match: 1 The Colonias Infrastructure Board recognizes a hard match as actual dollars expended on the project other than Colonias Infrastructure Board funds for the specified scope of work. The hard match may be provided in the form of non-colonias Infrastructure Board loans, local cash contributions, private donations or federal funds. 2 The Colonias Infrastructure Board recognizes a soft match as labor and/or equipment donated for the scope of work on the proposed project at fair market rates as determined locally within the state. Adopted January 13, 2012 6

The value of labor costs may not be greater than the schedules provided by the state department of labor for costs of services. The value of equipment may not be greater than fair market value as determined by the Colonias Infrastructure Board. SECTION 3 FINANCIAL, MANAGERIAL AND TECHNICAL CAPACITY Section 3.1 Overview The Colonias Infrastructure Board is the guardian of limited state Colonias Infrastructure Project Funds and will ensure that the selected entities have the capacity to implement the projects. This Financial, Managerial and Technical Capacity Policy provides guidance to the Colonias Infrastructure Board and its applicants on the information required to reach a determination regarding completeness and readiness of Colonias Infrastructure Board applications. Section 3.2 General Considerations As part of its fiduciary responsibility, the Colonias Infrastructure Board must ensure that the entities receiving funding are able to plan, complete and maintain the project to allow for the intended useful life of the project. To aid in that determination, the Colonias Infrastructure Board will require entities to demonstrate financial and managerial readiness prior to undertaking the project. Section 3.3 Project Governance The Colonias Infrastructure Board must ensure that recipients of Colonias Infrastructure Project Funds have adequate governance structures in place prior to undertaking projects. The Colonias Infrastructure Board will require its applicants to demonstrate that they have in place as part of a complete application: A. Planning sufficient to support project development and ensure reliable operation of the project over the intended life of the project; Colonias should submit an Infrastructure Capital Improvement Plan (ICIP) that includes the operating costs of the system to be developed; B. Fully functioning governing body, with technical assistance, if applicable, capable of managing, directing and overseeing the proposed project and ensuring that the applicant and its projects meet all applicable state laws and regulations, including as applicable: 1. Up-to-date articles, by-laws and other governance documents that have been filed with appropriate regulatory agencies; 2. Adequate legal representation; Adopted January 13, 2012 7

3. Regular board meetings of the governing body that are held in compliance with the Open Meetings, the Inspection of Public Records Acts and other law or policy applicable to the governing body; and 4. Selection of members of the governing body by election or other procedures applicable to the governing body and evidence of management with training provided by the technical assistance provider sufficient to oversee the project. C. Managerial capacity to manage the project over the long term, as appropriate for the type of project proposed: 1. Adequate business management tools for ongoing financial planning, water accounting (if applicable), asset management, that have been established and are reviewed and updated regularly; 2. Personnel policies and procedures are in place; 3. Appropriately certified water system operator(s) employed or contracted; 4. Audit requirements have been met according to State Auditor and, if any findings or other deficiencies are noted in the audit, a plan is in place to address those deficiencies; and 5. Policies and procedures are in place to assure successful fiscal and operational management including: (c) Internal controls (dual check signatory authority; budget adoption procedures, expenditure decisions; audits); Billing, new service connection charges, and failure to pay policy; and Where a utility system is being developed, adequate fees will be charged to any users of the system. Section 3.4 Application Criteria An application not meeting these thresholds may be directed to technical assistance providers, funded for a smaller planning project that helps the entity develop its planning for future applications, or directed to another funding source. Staff will report back to the Colonias Infrastructure Board on the status of all applications not meeting the application criteria. Section 3.5 Financial Planning for Enterprise Fund Systems The Colonias Infrastructure Board will use its funding to encourage Enterprise Fund backed projects to establish and maintain financial planning that ensure the systems abilities to operate reliably their projects while maintaining the other functions and assets of their systems. Towards Adopted January 13, 2012 8

that goal, the Colonias Infrastructure Board will require these Enterprise Fund systems to put in place a financial plan with the following elements: A. Revenues, including service revenues (with a maximum of 5% uncollected fees for service), lease payments, new service connection charges, adequate user fees, etc; B. Operations and maintenance budget, including: 1. Management/personnel costs and benefits; 2. Debt service on any existing loans as well as any Colonias Infrastructure Project Fund loans that may be required; and 3. Administration and operations costs including billing, accounting, insurance, utilities, general supplies, treatment supplies, professional services, current audits, etc. C. Payments into reserve funds for emergencies, operating, anticipated repairs/replacement, and capital improvements, etc. D. The Plan should be a rolling five-year plan presented in an auditable format with annual updates approved by the Board. Applicants with urgent projects may be allowed to submit plans that cover fewer years. Section 3.6 Adequate Rate Structures for Enterprise Fund Systems To ensure that an applicant is financially able to reliably operate the project and maintain the infrastructure for maximum lifespan, the Colonias Infrastructure Board will examine the rate structures of its Enterprise Fund system applicants to determine if the rate structures support sustainability. The Colonias Infrastructure Board supports projects that are supported by rate structures that are reviewed annually and include the following elements: A. A tiered structure that rewards conservation, if applicable; B. Funding for all fixed and variable operations and maintenance costs, including full compliance with all state and federal laws and regulations; C. Funding for cash contributions to reserve funds for operations, emergencies, contingencies, and anticipated repairs and replacement of assets including meters; and D. Contributions to a Capital Improvement Fund to cover the cost of anticipated system replacement and upgrades as required by the Asset Management Plan Section 3.7 Water Accounting System with Full Metering The Colonias Infrastructure Board encourages the implementation of a full water accounting system to ensure water system efficiency, minimize non-revenue (unaccounted) water delivery Adopted January 13, 2012 9

and thereby decrease treatment costs, and to extend the lifetime of the resource as well as minimize the need for acquisition of additional water rights. Additional benefits of water accounting systems include the identification of demand management opportunities that target conservation initiatives to different water user groups and to individual users, as well as to support leak detection, repair and maintenance programs and capital improvement planning. The Colonias Infrastructure Board will look for the following elements in water system applicants water accounting systems: A. A perpetual system for accurately quantifying the system s input, output, authorized use and water losses; B. A methodology to quantify: 1. Authorized use, e.g., what is billed and what is not billed? 2. Unauthorized use, e.g., where it is occurring and how to eliminate it? 3. Water losses: percentage due to leakage and overflows or metering inaccuracies, etc. 4. Usage by different user categories, e.g., residential, commercial/industrial, etc. C. Supply and Demand projections Section 3.8 Asset Management Plan An asset management plan allows Colonias Infrastructure Project Fund recipient to operate, maintain, rehabilitate and replace infrastructure in the most cost effective manner to ensure a sustained level of service at the lowest life cycle cost. Additionally, an effective asset management plan provides the basis for a financial plan, operational plan and an appropriate rate structure. To ensure that the Colonias Infrastructure Board s infrastructure investments are protected and maintained for optimum longevity, water system applicants may be required to implement asset management plans for the proposed projects that include the following established and regularly updated elements: A. Required metering of all diversions and users (if applicable); B. Asset inventory, noting current condition, mapped locations, anticipated useful life and value; C. Defined level of service required to meet state and federal regulations and customer demands; Adopted January 13, 2012 10

D. Risk analysis of asset performance based on likelihood of failure and level of consequence; E. Operations and maintenance strategic plan and an Infrastructure Capital Improvement Plan(ICIP) that addresses all costs for managing the asset over time; and F. Funding strategy for inclusion in Financial Plan. G. Entities securing Colonias Infrastructure Project funds may be allowed to develop the Asset Management Plans over several years provided the entity commits in its funding agreement to meeting certain milestones and provides the reports required under Section 6.3 C of these Project Management Policies. Section 3.9 Best Management Practices The Colonias Infrastructure Board will support applications that demonstrate sound management and development to ensure that its infrastructure investments are protected and maintained for optimum longevity. As such, the Colonias Infrastructure Board may require housing projects, flood control projects and road projects to commit to best management practices for their projects similar, but not necessarily identical, to those identified for Enterprise Fund-backed projects in Sections 3.4 3.7 above, taking into account in each case the specific nature of the proposed project. SECTION 4 PROJECT READINESS Section 4.1 Overview The Colonias Infrastructure Board recognizes that the cost of infrastructure has risen dramatically in the past several years and that the piecemeal approach to funding is lessening the state s buying power. This Project Readiness Policy provides guidance to the Colonias Infrastructure Board and its applicants on the information required to reach a determination regarding completeness of application and project readiness. Section 4.2 General Considerations It is the goal of Colonias Infrastructure Board to quickly implement project funding while ensuring that selected projects get completed and are able to be fully utilized by the benefiting communities. Section 4.3 Application Standards A. The Colonias Infrastructure Board requires the following elements as part of the application evidencing project readiness, including: 1. Determination of Qualified Entity & Qualified Project Evidence of good standing; if applicable; Adopted January 13, 2012 11

(c) Verification of Complete Project Description; and Certification of Colonia designation by the county or municipality in which the project resides. 2. Description and analysis of Project Need and Benefit (c) (d) Extent of service area, including population estimates Overall degree of benefit; Attention to human health and safety concerns; and Attention to environmental analysis, when required. 3. Reliable Project Costs Estimated final construction, engineering and other costs, provided by an engineer or other qualified expert, as applicable; and Breakdown of all other expenses for the project, including, as appropriate: i. planning, designing, permitting, constructing, improving or expanding a qualified project; ii. iii. iv. costs of acquiring land, water rights, easements or rights of way; developing engineering feasibility reports for qualified projects; completing environmental assessments and archeological clearances and other surveys for qualified projects; v. inspecting construction of qualified projects; vi. vii. viii. providing for other professional services as necessary for each project; and legal fees and fiscal agent fees associated with the development of qualified projects; secure or legal possession of water rights if applicable 4. Right of Way Acquisition Documentation, including Public Domain Documentation; Adopted January 13, 2012 12

(c) Verification of Land Ownership; and Map of Service Area, Area Map and/or Site Map denoting easements 5. Applicable Permits & Licenses, including but not limited to water rights sufficient to support the project or current phase of the project. 6. Financial health (c) Three most recent years of audits or other financial statements as directed under the State Audit Act; Current Financials (unaudited), including current aging report; and Current Fiscal Year Budget 7. Evidence of existing debt (c) Debt Documents, including Loan agreements; Debt Default Summary; and Pending Litigation Summary 8. Verification of Other Funding Sources Local matching funds including any private donations or in-kind services; and Federal matching funds including any the terms and status of all federal funding; B. Exceptions to the application requirements may be allowed for projects that are determined to be urgent and related to health and safety concerns or newly created entities. C. An application not meeting these thresholds may be directed to technical assistance providers, funded for a smaller planning project that helps the entity develop its planning for future applications, or directed to another funding source. Staff will report back to the Colonias Infrastructure Board on the status of all applications not meeting the application criteria. SECTION 5 COMPLIANCE POLICY Adopted January 13, 2012 13

Section 5.1 Overview The Colonias Infrastructure Board recognizes that infrastructure must be developed in a manner that protects public health and helps ensure the economic vitality of southern New Mexico. Evidence of regulatory compliance is critical to evidencing the long-term stewardship of the project. Section 5.2 General Considerations The Colonias Infrastructure Board seeks to support infrastructure projects that are sustainable and meet state and federal statutory and regulatory requirements. The Colonias Infrastructure Board requires entities to substantiate their compliance with all federal and state laws and regulations. Section 5.3 Water Rights Policy The Colonias Infrastructure Board supports the State Engineer s readiness to proceed criteria that require the proposed project s water rights are in good standing and if necessary, the water rights transfer process will provide for timely and efficient transfer of water between uses without lessening protections for the customs, culture, environment, and economic health and stability of the state s communities. For water-related construction projects, the Colonias Infrastructure Board will require verification of water rights at the time of application. Section 5.4 Regulatory Compliance Public health is paramount in determining suitability for infrastructure funding. In addition to complying with all applicable local ordinances and regulations, Colonias Infrastructure Board applicants must demonstrate regulatory compliance: A. The Colonias Infrastructure Board accepts applications for water system projects that are in full compliance or will provide for full compliance with the Safe Drinking Water Act and all New Mexico Environment Department regulatory requirements. B. The Colonias Infrastructure Board accepts applications for wastewater projects from systems that are in full compliance or will provide for full compliance with EPA and New Mexico Environment Department regulatory requirements. C. The Colonias Infrastructure Board accepts applications for housing, road, flood control and solid waste projects that are in full compliance with or will provide for full compliance with applicable state and federal regulators. D. For those applications for which the Colonias Infrastructure Project Fund financial assistance will cure a regulatory deficiency, the Colonias Infrastructure Board will require verification from the applicable regulator that the proposed project is expected to cure the deficiency as outlined. SECTION 6 ELIGIBILITY, USE OF FUNDS, AND REPORTING Section 6.1 Overview Adopted January 13, 2012 14

The Colonias Infrastructure Board recognizes that it cannot be the sole source of funding for infrastructure projects in New Mexico and that it must direct funds to projects as incentive to adopt certain management practices, to regionalize or to reach other state and federal goals. The Eligibility Policy provides guidance to the Colonias Infrastructure Board and its applicants on the eligibility of certain projects and expenses. Section 6.2 General Considerations The Colonias Infrastructure Act has authorized the Colonias Infrastructure Board to provide funding to broad categories of infrastructure projects and also outlines eligible expenses from the Colonias Infrastructure Project Fund. These policies supplement the Colonias Infrastructure Act and the rules and regulations governing the Colonias Infrastructure Project Fund. Section 6.3 Quantifying Support Data for Project Reports Funding Agreements require Colonias Infrastructure Project Fund recipients to submit quarterly project reports to the Colonias Infrastructure Board for review by staff and the Board to determine if the project is proceeding as expected. The reports should include: A. A description of the status of the Project, including a financial comparison of actual and anticipated costs; B. A description of completion of Project tasks; and C. A timeline of milestones relating to the operations and management of the system, including for water and waste water projects those criteria identified in Sections 3.4 through 3.7 of these Project Management Policies. D. Joint Powers Agreement and Memorandum of Understanding Section 6.4 Eligible Use of Proceeds A. Legal Fees. The Colonias Infrastructure Board recognizes that adequate legal representation is an important component of managerial capacity and sets the following guidelines for funding from the Colonias Infrastructure Project Fund Financial Assistance under the following guidance: 1. The Colonias Infrastructure Board defines legal fees as those services rendered by legal counsel on behalf of the entity for the transaction of the project and those directly associated with development of the qualified projects; and 2. No more than 10% of the Colonias Infrastructure Project Fund financial assistance may be used for legal services. B. Fiscal Agent Fees. The Colonias Infrastructure Board defines a fiscal agent as an eligible entity that administers the fiscal aspects of a project on behalf of one or more Adopted January 13, 2012 15

eligible entities. The fees incurred in the administration of funds, including the collection and reporting of project information as required by the Colonias Infrastructure Project Fund financial assistance agreements are considered appropriate fiscal agent fees and is considered an eligible cost under the following conditions: 1. That fiscal agent fees comprise no more than 5% of a Colonias Infrastructure Project Fund financial assistance; and 2. That appropriate documentation of hours spent reporting be submitted with reimbursement requisitions. C. Architectural Engineering and Construction Management Fees: The Colonias Infrastructure Board believes that competent engineering and construction of an infrastructure project are important to ensuring that the public project meets the desired outcome. As such, the Colonias Infrastructure Board will allow up to 12% of the Colonias Infrastructure Project Fund financial assistance to be used to pay for construction project management fees. D. Fees for Other Professional Services: The Applicant may seek funding for other professional services necessary to the completion of the infrastructure project including, but not limited to, services provided by accounting and auditing firms, hydrologists and surveyors. Such fees may not exceed 5% of the Colonias Infrastructure Project Fund financial assistance. E. Applications solely for planning will not be subject to the above limitations. Adopted January 13, 2012 16