There are several stipulations which must be met in order to qualify under this program. Studies are required to evaluate potential projects. Each project selected must be economically justified -- that is, the benefits resulting from constructing a project must exceed the cost incurred to construct the project. It also must be environmentally acceptable and complete within itself. In addition, each separate project is limited to a total federal cost of not more than $7 million, including studies, plans and specifications, and construction.
A single planning (feasibility) phase leads to the preparation of plans and specifications. The feasibility study comprises an initial federally-funded portion up to $100,000, and a cost-shared portion in which feasibility costs in excess of $100,000 will be shared 50/50 with the non-federal sponsor. Costs for plans and specifications are cost-shared at the same proportion as construction (35 percent non-federal.
Once a project is approved and funded for construction, the non-federal sponsor is required to contribute 35 percent up-front financing for construction. At least 5 percent of the total cost must be contributed in cash. The remainder can include credit for those items spelled out below in the items of local cooperation. Should those costs exceed 35 percent of the total cost, the sponsor would still be required to pay for all of these items, in addition to the 5 percent cash contribution.