ITEM 11: CONSIDERATION OF APPROVAL OF A RESOLUTION TO PROVIDE A STATE REVOLVING FUND LOAN TO THE WESTLANDS WATER DISTRICT FOR AN IRRIGATION IMPROVEMENT PROJECT (LOAN NO. C-06-6046-110)

DISCUSSION: The Westlands Water District (District) submitted an application for a State Revolving Fund (SRF) loan for an Irrigation Improvement Project (Project). The amount of the loan request is $5 million.

The SRF loan will be used by the District to purchase sprinklers, microirrigation equipment, and tailwater reuse irrigation equipment that will be leased to growers within the District. The lease payments from the growers will provide the revenue source to repay the loan.

The Project will supplement a previous SRF Project approved by the State Water Resources Control Board (SWRCB) on February 16, 1995. This project provided the District with $1 million in SRF funds for the purchase of sprinkler irrigation equipment. The District exhausted this loan, and there is strong demand for additional funds and to expand the Project to different irrigation systems.

The Project will reduce deep percolation within the District. Deep percolation is a major cause of salinity and selenium contamination of ground water in the west side of the San Joaquin Basin. The Project is recommended by the District's Irrigation Improvement Program (IIP). The IIP is a study of more than 750 irrigation systems within the District conducted by independent consultants between 1987 and 1991. The IIP study indicates that fields using sprinkler systems for pre-irrigation had an average annual deep percolation reduction of 21 acre-feet per 160 acres or 0.13 acre-feet/acre. Fields that used sprinklers for the regular season had an additional reduction in deep percolation but had reduced yields.

The Project is also in accordance with the September 1990 final report on the San Joaquin Valley Drainage Program. The final report recommends that the Westlands Subarea "improve on-farm water conservation and source control on all irrigated lands and reduce deep percolation on lands having drainage problems by 0.35 acre-feet per acre per year (on the average) by the year 2000." The February 1998 Status Report for the major progress in implementing source control measures for achieving this goal. The District's deep percolation has reduced from approximately 0.70 acre-feet per acre in 1986 to approximately 0.50 acre-feet per acre in 1994 due to water supply shortages and irrigation improvement programs. This project will help the district farmers further reduce deep San Joaquin Valley Drainage Implementation Program states that the District has achieved percolation.

The Central Valley Regional Water Quality Control Board (CVRWQCB) supports the Project in accordance with the "San Joaquin River Agricultural Subsurface Drainage Policy" (CVRWQCB Resolution No. 88-195 approved by the SWRCB in Resolution No. 89-88) contained in the "Water Quality Control Plan for the Sacramento River-San Joaquin River Basin." The Water Quality Control Plan makes the following recommendations:

• Best management practices, principally water conservation measures, are applicable to the control of agricultural subsurface drainage.
  
• The SWRCB should also consider declaring the drainage problem area in the San Joaquin Basin a priority nonpoint source problem in order to make U.S. Environmental Protection Agency nonpoint source control funding available to the area.

The District has completed a Notice of Exemption under section 15062 of the California Environmental Quality Act regulations.

POLICY ISSUE: Should the SWRCB approve an SRF loan of $5 million to the District for the Project? This approval is contingent upon the District entering into a loan contract agreement with the SWRCB and beginning the Project by July 1999.

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 Federal Fiscal Year (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 July 1998 are as follows:

RWQCB IMPACT: Yes. CVRWQCB.

STAFF RECOMMENDATION: That the SWRCB approve an SRF loan of $5 million to the District for the Project. This approval is contingent upon the District entering into a loan contract agreement with the SWRCB and beginning the Project by July 1999.

JUNE 29, 1998 DRAFT

WHEREAS:

1. The Westlands Water District (District) has requested a $5 million State Revolving Fund (SRF) loan for an Irrigation System Improvement Project (Project).

2. In addition to reducing selenium and salt loading to the ground water basin in the western San Joaquin Valley from deep percolation, the Project will promote irrigation efficiency, improved management, and water conservation practices.

3. The Project is consistent with the Central Valley Regional Water Quality Control Board Resolution No. 88-195 approved by the State Water Resources Control Board (SWRCB) in Resolution No. 89-88 as a best management practice for reducing agricultural subsurface drainage through water conservation.

4. The Project is a method for source control to manage subsurface drainage in the San Joaquin Valley in accordance with "The San Joaquin Valley Drainage Program"
final report.

5. The District has completed a Notice of Exemption from the California Environmental Quality Act requirements.

THEREFORE BE IT RESOLVED THAT:

The SWRCB approves an SRF loan of $5 million to the District for the Project. This approval is contingent upon the District entering into a loan contract agreement with the SWRCB and beginning the Project by July 1999.

The undersigned, Administrative Assistant to the SWRCB, 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 July 23, 1998.

______________________________

Maureen Marché

Administrative Assistant to the Board