The Missouri Public Service Commission regulates investor-owned electric, steam, natural gas, water and sewer and telephone companies. Its mission is to ensure Missouri consumers have access to safe, reliable and reasonably priced utility service while allowing those utility companies under our jurisdiction an opportunity to earn a reasonable return on their investment. The PSC also regulates manufacturers and retail dealers who sell new and used manufactured homes and modular units. The commission was established in 1913. The PSC is comprised of five commissioners, who are appointed by the governor.

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Appendix A - Water

APPENDIX A

OPERATING PROCEDURES

FOR THE

SMALL WATER AND SEWER COMPANY REVOLVING LOAN PROGRAM

Small Water and Sewer Companies seeking to participate in the Program shall submit a financing application to the PSC in accordance with 4 C.S.R. 240-2.060 together with the Program's Supplemental Application. If required, a Rate Filing shall be filed with the PSC to support the financing.
The PSC's staff shall assign the submitted applications for investigation within two weeks of receipt thereof.
If rate relief is requested by the applicant, the PSC staff will make a recommendation for approval or disapproval of such rate relief within 150 days of the date of the Application. Such rate relief will be adequate to provide for the payment of expenses, including debt repayments.
The PSC shall submit a recommendation for approval or disapproval of the loan to the Authority and the Custodian. The criteria for recommending such approval or disapproval shall be as follows:
1. The Company must have fewer than 500 Customers.
2. The loan must be used for improvements in the water or sewer system facilities that are necessary for the Company to provide safe and adequate service, and must be limited to replacing or improving facilities to meet the needs of the Company's customers at the time the loan application is made.
3. Loans will not be available for expansion of facilities for growth because limited funds are available.
4. The owner(s) of the Company would be expected to establish and maintain at least a 30-35% equity position in the Company, or the equity position would be expected to grow to the previously indicated percentage within a relatively short period of time (generally less than 5 years).
5. The loan will be for a period of five years with prinicipal and interest being repaid monthly or quarterly unless the Company desires to pay off the loan earlier. There will be no prepayment penalties.
6. The Company will agree to submit bills for payments for equipment or contractors to the PSC Water and Sewer Department which will review and forward the same within two weeks to the Custodian so that funds from the loan may be drawn down.
7. The Company must receive PSC approval for its finance application regarding this revolving loan fund.
8. The Company must have rates approved by the PSC that will provide revenues sufficient to demonstrate an ability to make loan payments. If the Company does not have sufficient rates to provide sufficient revenue, then the Company must file for the necessary rates.
9. The minimum and maximum amount of a loan will be $2,500 and $80,000, respectively.
10. Except for Companies in receivership, the Company must demonstrate (based on its own credit) that it cannot borrow funds by any other means at a reasonable interest rate.
11. The Company should be current with all payments of taxes or governmental assessments except in the case of receivership.

The Authority and the PSC shall review the loans on a first-come first-serve basis, provided however, a priority be granted to, and amounts in the Revolving Loan Fund may be reserved for, Companies in receivership, and Companies who apply for a loan on an emergency basis. All loans must be approved by the Authority, provided however, if a company applies for a loan on an emergency basis, the Director of the Authority, after receiving a recommendation of approval from the PSC, may authorize and approve the disbursement of up to $5,000 for such emergency loans.
The Company shall provide to the PSC, the Authority and the Custodian a certificate stating that the proceeds of the loan shall be used to finance costs of engineering, purchase of equipment and construction of needed facilities, improvements and additions to their existing water and sewer systems in compliance with applicable Federal and State laws.
The Authority shall, following receipt of all requisite recommendations regarding the loan and copies of executed loan documents, either approve or disapprove the loan and authorize the Custodian to disburse funds to the borrower in accordance with the Loan Documents.
The Custodian will within Five (5) business days following the receipt of the notice from the Authority, disburse funds to the Borrower in accordance with the Loan Documents.
The Custodian will pay interest on funds in the Revolving Loan Fund and credit such amount to the Fund balance.