STATE WATER RESOURCES CONTROL BOARD

BOARD MEETING - DIVISION OF CLEAN WATER PROGRAMS

FEBRUARY 19, 1998

ITEM 5: PROPOSAL TO AMEND LOAN COMMITMENT FOR THE CITY OF ESCONDIDO, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4156-110, AND APPROVE A WATER RECYCLING LOAN FOR A PORTION OF THE PROJECT

DISCUSSION: There is a need to make available additional State Revolving Fund (SRF) funds to provide money for projects ready for loan commitments and scheduled to start construction in the summer of 1998. Approximately $60 million is available from the Water Recycling Loan Program (WRLP) provided by the Safe, Clean, Reliable Water Supply Act (Proposition 204). To provide the needed funds, SRF projects involving water supply-type recycling could have their loan commitments reduced to reflect current eligible cost estimates, and a portion of their previously approved SRF loan commitment funded as a loan commitment from the WRLP.

The City of Escondido (City) falls in this category. On July 22, 1993, the State Water Resources Control Board (SWRCB) approved $20 million for the City's water reclamation project. On October 19, 1993, the SWRCB approved an increase of $10 million, on October 20, 1994, another increase of $5 million, and on May 15, 1995, a third increase of $1.5 million for a total of $36.5 million, the amount estimated to be eligible at that time. The City currently estimates the eligible cost of their reclamation project to be $28 million, of which $16 million dollars is for the tertiary treatment facilities and $12 million dollars is for the reclaimed water distribution system. Construction is scheduled to begin in spring of 1999.

By amending the existing SRF loan commitment to reflect the current estimated eligible construction costs and by shifting the loan amount of the reclaimed water distribution system to the WRLP, $20.5 million dollars will become available for SRF loans to other projects.


Both the SRF and WRLP impose "sunset" clauses on loan commitments as part of their respective guidelines. The City's project should have a sunset clause added to their commitment based on the latest schedule. This sunset date will be if Plans and Specification Approvals have not been issued by specified dates: SRF eligible tertiary treatment plant facilities approved by January 29, 1999; WRLP eligible reclaimed water distribution system approved by April 30, 1999.

The City has been contacted about these loan commitment modifications and they have no objection.

POLICY ISSUE: Should the SWRCB amend its loan commitment to the City and split the reclamation project between the SRF and the WRLP? Should a sunset clause be included as part of the revised loan commitments?

RWQCB IMPACT: None

FISCAL IMPACT: Sufficient money is available in the WRLP to enable this project to be split funded, thus freeing up SRF funds for additional projects.

STAFF RECOMMENDATION: The SWRCB by resolution amend the SRF loan commitment to the City by reducing the amount from $36.5 million to $16 million and approve a WRLP loan for the City in the amount of $12 million.

DRAFT 1/26/98

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 98 -

PROPOSAL TO AMEND LOAN COMMITMENTS FOR THE CITY OF ESCONDIDO, PROJECT NO C-06-4156-110, AND ISSUE A WATER RECLAMATION LOAN

WHEREAS:

1. There is a need to make available additional State Revolving Fund (SRF) loan funds to provide money for projects ready for loan funds this Federal Fiscal Year (FFY).

2. The Water Reclamation Loan Program (WRLP) has sufficient funds to cover portions of specified water recycling projects; and

3. The City of Escondido (Project No. C-06-4156-110) has received a SRF loan commitment of $36.5 million, but the estimated eligible costs have decreased to $28 million and the schedule for start of construction has slipped to the spring of 1999.

THEREFORE BE IT RESOLVED THAT:

1. The State Water Resources Control Board (SWRCB) amends its SRF loan commitment of $36.5 million against FFY 1997 funds for the City of Escondido (Project No. C-06-4156-110) to a SRF loan commitment of $16 million for eligible tertiary treatment facilities and approves a WRLP loan commitment of $12 million for the reclaimed water distribution system. The loans will have a repayment period of twenty (20) years with the first loan repayment for the SRF loan due one year after completion of construction of the reclamation treatment facility and the first loan repayment of the WRLP loan due two years after the loan is executed for the water distribution system.

2. The SWRCB approves a special condition requiring expiration of the preliminary loan commitment(s) if Plans and Specifications Approvals have not been issued by specified dates: SRF eligible tertiary treatment plant facilities approved by January 29, 1999; WRLP eligible reclaimed water distribution system approved by April 30, 1999. The Division of Clean Water Programs may approve up to a 90-day extension for good cause.

CERTIFICATION

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