ITEM 2: REQUEST FOR SET ASIDE OF SMALL COMMUNITY GRANT FUNDS FOR CLASS A PROJECTS

DISCUSSION: In a February 14, 1998 Memorandum (Attachment 1), Harold Singer, Executive Officer, Lahontan Regional Water Quality Control Board, requested that the State Water Resources Control Board (SWRCB) reserve $15 million for all five (5) of the Class A (existing or potential public health problems) Small Community Grant (SCG) projects for a period of 18 months. His request is based on the concern that the Class B (existing or potential water pollution problems) projects will use all of the funds before all of the five Class A projects get their design and construction grants. Mr. Singer's concern is valid.

There are six (6) Class A projects on the Priority List with an eligible cost of $15.6 million and 53 Class B projects with an eligible cost of $68.1 million. One Class A project, Goshen CSD, has been funded ($3,000,000) and is under construction.

The status of the remaining five Class A projects is:

The current schedule shows the grant funds running out in August 1998. Clearlake Oaks CWD is the only Class A project that would be ready for a Step 3 (construction) grant by that date if it stays on its schedule. There is a possibility if other project schedules slip, that Sonoma Co. (Mirabel Heights) could receive a Step 3 grant if it stays on schedule.

A brief history of these projects follows:

Sonoma Co. (Camp Meeker)

This project was on the 1988 SCG Priority List but failed to move forward.

Sonoma Co. (Mirabel Heights)

This project was on the 1988 SCG Priority List but failed to move forward.

Davenport CSD

This is a new project.

Clearlake Oaks

This project was on the 1988 SCG Priority List and the 1988 Construction Grant Priority List and failed to move forward.

Spalding CSD

This project was on the 1988 Construction Grants Priority List but failed to move forward.

The advantage to reserving funds for these five Class A projects is that they will solve a public health problem.

The disadvantages are (1) that four of the five have a long history of not moving forward and could delay other projects, (2) had other projects known that funds would be reserved for Class A projects, they would have tried to raise their classification from B to A, (3) considerable staff time has been spent on the Class B projects that might not get a grant and staff funds are limited to 3% of the $30 million, and (4) the projects that stay on schedule would finish construction of their projects before some of the Class A's complete the design of theirs, thus providing a water quality benefit sooner.

Even if these five projects receive no Small Community Grant Funds, it is possible for them to receive grants from the U.S. Department of Agriculture - Rural Development or the California Department of Housing and Community Development.

POLICY ISSUE: Should the SWRCB reserve $12.6 million of SCG funds for the five Class A projects for a period of 18 months.

RWQCB IMPACT: None

FISCAL IMPACT: There is a possibility that delaying issuance of these funds will result in a shortage of funds to administer the program.

STAFF RECOMMENDATION: That the SWRCB deny the request but direct staff to work closely with, and expedite where possible, the remaining Class A projects.

[February 14, 1998 memo not available electronically but can be obtained by calling Jim Putman at (916) 227-4355.]

DRAFT March 23, 1998

WHEREAS:

1. Harold Singer, Executive Officer, Lahontan Regional Water Quality Control Board, requested that $15 million be set aside for 18 months for the five (5) Class A projects;

2. The Small Community Grant funds may run out before all of the Class A projects receive a Step 2 (design) and Step 3 (construction) grant; and

3. Four of the five projects have been on previous priority lists but failed to make any progress.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Denies the request; and

2. Directs staff to work closely with, and expedite where possible, the remaining Class A projects.

The undersigned, Administrative Assistant to the Board, does hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the State Water Resources Control Board held on April 16, 1998

_________________________________

Maureen Marché

Administrative Assistant to the Board