ITEM 4: APPROVAL OF A STATE REVOLVING FUND LOAN FOR THE CITY OF GUSTINE, WASTEWATER TREATMENT FACILITY EXPANSION PROJECT, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4488-110
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 1, 1997, the Division issued Facilities Plan Approval to the City of Gustine (City) for their Wastewater Treatment Facility Expansion Project, and the City agreed in writing with the approval on December 2, 1997.
The City of Gustine is located in Merced County and is approximately 25 miles south of the City of Modesto. The City serves a population of 4,405 and the treatment plant average flow is about 1.0 million gallons per day. The City also treats industrial flows of approximately 0.6 million gallons per day from several milk processors located within the community.
The City's facility is currently at capacity and is not meeting Waste Discharge Requirements (WDR). The Central Valley Regional Water Quality Control Board has issued Cease and Desist Order No. 96-194 requiring the City to be in compliance with their WDR by November 1, 1998. The City's project will expand the facilities capacity to 1.4 million gallons per day and change from a surface water discharge to dedicated land disposal.
The estimated project cost is $4.6 million, and the estimated loan eligible cost is $2 million. The City derives its domestic water supply from local groundwater. Water supplies are considered adequate for the 20-year project life as the groundwater supply is not considered to be in overdraft. In accordance with the SRF Policy requirements for water conservation, the City is a signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California".
The City has provided the Division with a schedule of project milestones. These dates are contained in the milestone schedule in the Division's facilities plan approval letter. In accordance with Section IX (J) of the SRF Policy, the loan commitment will expire if construction has not begun by the date specified by the project milestones. The Division may approve up to a ninety (90) day extension for good cause.
The U.S. EPA and the City prepared a Finding of No Significant Impact/Negative Declaration (FONSI/ND) and supporting Environmental Assessment/Initial Study (EA/IS) which were distributed to the public and circulated through the State Clearinghouse (SCH # 95092006) for a 30-day review period ending on October 6, 1995. During the review period, the District received comments from five public agencies and one private consulting firm. Environmental issues were raised regarding impacts to endangered and other listed species, loss of farmland, reclaimed water use, maintenance of conservation lands, waterfowl diseases, pond and underdrain construction, and airport safety hazards. The City and the EPA considered the comments, adopted the FONSI/ND and a Mitigation Monitoring and Reporting Program, and approved the project on August 19, 1996. The Division will file a Notice of Determination with the Governor's Office of Planning and Research upon funding approval.
The SWRCB's Office of Operator Certification (OOC) is currently investigating a complaint that the City is not in compliance with operator certification requirements. Division staff expects to issue plans and specification approval on March 15, 1998, and the loan contract would be issued thereafter. The OOC investigation may not be completed by March 15, 1998. The Division recommends that plans and specifications approval be withheld until such time the OOC investigation is completed and the City is determined to be in compliance with the operator certification requirements.
The City requests the SWRCB approve a loan of $2.0 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 construction has not begun by July 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 January 1998 are as follows:
| Loan No. | 1998 | 1999 | 2000 | |
| SRF Account | Repayment | Repayment | ||
| Repayments: | $69,327,530 | $68,384,074 | $68,994,744Cursor_Loc1 | |
| 125% Repayments: | $85,480,092 | $86,243,430 | ||
| FFY 97 Carryover: | $28,688,539 | |||
| FFY 98 Fed. Cap. Grant: | $77,774,121 | $14,679,936 | ||
| 1996 Bond Funds: | $47,292,822 | |||
| Previous Commitments: | -$110,588,323 | -$147,452,850 | -$84,895,000 | |
| Subtotal: | $65,201,867 | -0- | $1,348,430 | |
| City of Gustine | 4488-110 | -$2,000,000 | ||
| City of Rialto | 4686-110 | -$24,000,000 | ||
| Charleston Drainage Dist. | 6053-110 | -$400,000 | __________ | __________ |
| Balance: | $38,806,867 | -0- | $1,348,430 |
STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan of $2.0 million from the FFY 98 account 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 initiation of construction date is not met and includes a provision that the Division's plan and specification approval be withheld until such time that the City is determined to be in compliance with the operator certification requirements.
12/22/97 DRAFT
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 Wastewater Facility Expansion Project, City of Gustine in Priority Class B;
3. The Division of Clean Water Programs (Division) has approved the project report, environmental documents, (and) draft revenue program, for the City of Gustine's Project;
4. The City of Gustine is a signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California"; and
5. The City of Gustine has approved and adopted a Negative Declaration (State Clearinghouse No. 95092006) 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
1. Approves a SRF loan of $2.0 million from the FFY 98 account to the City of Gustine for construction of the Wastewater Treatment Facility Expansion, with a repayment period of 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 January 22, 1998.
Maureen Marché
Administrative Assistant to the Board