ITEM 7: APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF LA CAÑADA FLINTRIDGE, SEWER COLLECTION SYSTEM, SRF LOAN PROJECT NO. C-06-4252-310

DISCUSSION: In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund (SRF) for Construction of Wastewater Treat-ment 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 the City of La Cañada Flintridge (City) for the construction of a sewer collection system, and the City agreed in writing with the approval January 6, 1998.

The City is located in southern California in the County of Los Angeles (see attached location and vicinity map), and lies within the County Sanitation Districts of Los Angeles County (CSDLAC), District Nos. 28 and 34. The City is one of the few remaining areas within the greater Los Angeles region which is developed yet still utilizes on-site septic tank leachfield systems for sewage disposal. Many of the systems are aged and failing. Documented failures on record with the local health agency include septic overflows, unpermitted discharges from illegal hookups, and surface discharge of gray water. Sanitary and public health concerns exist because of the possibility of human contact with surface waters, and pollution of local ground-water supplies. The acquifer underlying the City recharges an adjacent potable water basin where nitrate and volatile organic compound levels in excess of State action levels have been reported.

The City and its engineer have determined that a gravity collection system is the cost effective solution for bringing the area into compliance with health and sanitary standards, and for preserving groundwater quality. The proposed project would also include a small lift station and pressure main for sewage collection in a low section of the service area. Approximately 900 services will connect to the new system. Collected wastewater would then be transported via the CSDLAC Joint Outfall System for treatment at the Joint Water Pollution Control Plant in Carson. The estimated SRF loan eligible project cost including engineering and administration is $7.1 million.

The City is served by three local water purveyors which receive most of their supply from the Metropolitan Water District of Southern California (MWDSC). The remaining needs are met by local groundwater supplies. The MWDSC is a signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California". The service area is built out and therefore water supplies are stable beyond the next twenty years. The City and service area, which is within the CSDLAC service area, meets the requirements of the SRF Policy that more than seventy-five percent of the water users are covered by State MOU or equivalent water conservation plan.

The City has provided the Division with a schedule of submittal dates for 100 percent plans and specifications and other milestones for the collection system project. These submittal dates are contained in the milestone schedule in the Division's facility plan approval letter. The 100 percent and As-Advertised plans and specifications were submitted on schedule and approved by the Division.

The City prepared a draft Negative Declaration/Initial Study (ND/IS) which was distributed to the public and circulated through the State Clearinghouse (SCH# 97081013) for review from August 7, 1997, through September 5, 1997. During the review period, the City received three comment letters. The City considered the comments, approved the project and the Negative Declaration, and adopted a Mitigation Monitoring Plan on October 20, 1997. A Notice of Determination was filed with the Los Angeles County Clerk on October 22, 1997, and with the Governor's Office of Planning and Research on October 27, 1997.

The City requests the SWRCB approve a loan of $7.1 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. The City has already provided the Division with plans and specifications.

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 Cañada-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 $7.1 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.

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 revised 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 La Cañada Flintridge - Community Sewer System in priority Class C;

3. The Division of Clean Water Programs (Division) has approved the project report, environ-mental documents, and draft revenue program for the City of La Cañada Flintridge's (City) project;

4. The City is a signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California";

5. The City is requesting a zero interest (local match) loan in accordance with Section V of the SRF Policy, and has provided the Division with an approvable resolution adopted by the City Council authorizing application for a local match loan; and

6. The City has approved a Negative Declaration (State Clearinghouse No. 97081013) which has been reviewed and considered and it has been determined that the project will not result in any significant impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board approves a zero interest SRF loan of $7.1 million to the City of La Cañada Flintridge for the construction of the sewer collection system. The repayment period shall be twenty (20) years, and the first repayment due one (1) year after completion of construction.

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