ITEM 9: APPROVAL OF A STATE REVOLVING FUND LOAN FOR THE CITY OF BENICIA, WASTEWATER TREATMENT PLANT IMPROVEMENTS, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4528 -110

DISCUSSION: In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund (SRF) for Construction of Wastewater Treatment Facilities (Policy), adopted on February 16, 1995 and amended on January 18, 1996, projects on the adopted priority list need SWRCB approval to receive a SRF loan. Loans can be approved by the SWRCB after the Division of Clean Water Programs (Division) has approved the facilities plan, including (1) the project report; (2) environmental documents; (3) the draft revenue program; and (4) the water conservation plan.

On December 31, 1997, the Division issued Facilities Plan Approval to City of Benicia (City) for the improvements of the existing wastewater treatment plant, and the City agreed in writing with the approval on December 31, 1997.

The City is located in Solano County. The City serves a population of 28,000 and the treatment plant's average dry weather flow is about 2.7 million gallons per day (mgd). The plant has a design capacity of 4.5 mgd and uses Rotating Biological Contactors (RBCs) for secondary treatment. The performance of the RBCs was below expectation and the equipment is failing mechanically at the plant. The reliable capacity of the plant is roughly 1.9 mgd. It is necessary to improve plant equipment to meet the San Francisco Regional Water Quality Control Board's waste discharge requirements.

The estimated project cost is roughly $27 million and the estimated loan eligible cost is roughly $26 million. This project is to construct aeration basins, secondary clarifiers, disinfection systems, digesters, thickeners, pump stations, operation and maintenance building, flood protection berm, etc.

The domestic water supply for the service area is provided by the City. Water supplies are adequate for the next 20-years because this is an improvement project and not an expansion project. The City has submitted a water conservation plan to this Division and that has been approved.

The City has provided the Division with a schedule for the final plans and specifications and other milestones. These dates are contained in the milestone schedule in the Division's facilities plan approval letter. In accordance with Section VIII (J) of the SRF Policy, the Division will add eight (8) weeks to complete its review and approval process. The Division may approve up to a ninety (90) day extension for good cause.

The City prepared a Mitigated Negative Declaration/Initial Study which was distributed to the public and circulated through the State Clearinghouse (SCH# 95113002) for a 30-day review period on November 1, 1995. The City Council approved the Mitigated Negative Declaration on February 20, 1996, and filed a Notice of Determination with the Solano County Clerk and the Governor's Office of Planning and Research on August 29, 1996.

In August 1996, the City prepared a Subsequent Mitigated Negative Declaration/ Initial Study to address changes in the project. The changes included a new pipeline, a new sheet pile wall, new staging areas, and new locations for proposed facilities. The City distributed the document to the public and circulated it through the State Clearinghouse (SCH# 95113002) for a 30-day review period on August 26, 1996. The City Council approved the Subsequent Mitigated Negative Declaration on November 19, 1996, and filed a Notice of Determination with the Solano County Clerk and the Governor's Office of Planning and Research on December 5, 1996. During the comment periods, the City received comments regarding endangered species, wetlands, groundwater quality, air quality, aesthetics, land use, and public access. The City responded to all comments before approving the Subsequent Mitigated Negative Declaration.

The City requests the SWRCB to approve a loan of $26 million for this project and agrees to pay back the loan in accordance with the SRF Policy.

POLICY ISSUE: Should the SWRCB approve SRF loan funding for the proposed project, including a twenty (20) year repayment period, with the first repayment due one (1) year after completion of construction? Should the SWRCB, in accordance with Section IX (J) of the SRF Policy, condition this approval by requiring expiration of the preliminary loan commitment if biddable plans and specifications are not approved by April 1, 1998.

RWQCB IMPACT: None

FISCAL IMPACT: According to SWRCB Resolution No. 97-001 (Approval of a Staff Proposal to Better Manage the SRF Repayment Account), the SWRCB may approve preliminary loan commitments against the current FFY account and against 125 percent of future repayment funds based on scheduled loan dates.

The SRF account balances, anticipated repayment amounts, and project approvals under consideration by the SWRCB in February 1998 are as follows:

	Loan No.	1998	1999	2000
		SRF Account	Repayment	Repayment
Repayments:		$69,327,530	$68,384,074	$68,994,744
125% Repayments:			$85,480,092	$86,243,430
FFY 97 Carryover:		$28,689,092
FFY 98 Fed. Cap. Grant:		$77,774,121	$14,679,936
1996 Bond Funds:			$47,292,822
Previous Commitments:		-$141,356,982	-$147,452,850	-$84,895,000
Subtotal:		$34,433,761	-0-	$1,348,430
City of Escondido	4156-110	+$8,500,000
City of Alameda	4007-410	-$2,300,000
La Canada-Flintridge	4252-310	-$7,100,000
City of Benicia	4528-110	-$26,000,000	___________	___________
Balance:		$7,533,761	-0-	$1,348,430

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan of $26 million for the proposed project, with a repayment period of twenty (20) years, and with the first repayment due one (1) year after completion of construction. In accordance with the February 16, 1995, revisions to the SRF Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the approval date of plans and specifications for facility construction is not met.

DRAFT 1/26/98

WHEREAS:

1. The State Water Resources Control Board, on February 16, 1995, adopted the "Policy for Implementing the State Revolving Fund (SRF) for Construction of Wastewater Treatment Facilities," and amended it on January 18, 1996;

2. The State Water Resources Control Board, on September 18, 1997, adopted the FFY 1998 SRF Loan Program Priority List which included the treatment plant improvement project, City of Benicia (City) in Priority Class C;

3. The Division of Clean Water Programs (Division) has approved the project report, environmental documents, draft revenue program, and water conservation plan for the City's Project; and

4. The City adopted a Mitigated Negative Declaration and a Subsequent Mitigated Negative Declaration (State Clearinghouse No. 95113002) prepared for the project, which have been reviewed and considered and it has been determined that the project will not result in any significant environmental impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board

1. Approves a SRF loan of $26 million to the City for construction of the Wastewater Treatment Plant Improvements, with a repayment period of twenty (20) years, and the first repayment due one (1) year after completion of construction; and

2. Will withdraw this preliminary SRF loan commitment if biddable plans and specifications are not approved by the Division of Clean Water Programs by April 1, 1998. The Division may approve up to a ninety (90) day extension for good cause.

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 February 19,1998.

Maureen Marché

Administrative Assistant to the Board