ITEM 5 : APPROVAL OF A STATE REVOLVING FUND LOAN FOR THE CITY OF SOUTH SAN FRANCISCO (CITY), WASTEWATER TREATMENT PLANT IMPROVEMENT PROJECT, STATE REVOLVING FUND (SRF) LOAN PROJECT NO. C-06-4614-110

DISCUSSION: In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund 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 April 10, 1998, the Division issued Facilities Plan Approval to the City for the South San Francisco/San Bruno Water Quality Control Plant Improvement Project, and the City agreed in writing with the approval on April 13, 1998.

The South San Francisco/San Bruno Water Quality Control Plant (Plant) is located in the City of South San Francisco and serves the Cities of South San Francisco, San Bruno, and Colma. These service areas are within the County of San Mateo which is located in the San Francisco Peninsula. The population within the service area is at 90,000 now and is projected to increase to 97,000 in the Year 2010. The Plant's average dry weather flow (ADWF) capacity is presently at 9.3 million gallons per day (mgd) and it is determined that an ADWF treatment capacity of 13 mgd (includes industrial flow projected to be 5 mgd) is needed by the Year 2010. The Regional Water Quality Control Board, San Francisco Region, also determined that the Plant needs to have a wet weather treatment and disposal capacity of 62 mgd to eliminate overflows of untreated sewage from the manholes to Colma Creek. It is necessary to expand the capacity at the treatment plant now to eliminate overflows in the wet weather and to handle the projected dry weather flows by the year 2010.

The scope of this project is to construct new headworks, primary clarifiers, aerations basins, secondary clarifiers, digesters, thickeners, pump stations, and disinfection systems. The estimated loan eligible cost is $39 million. The City requests the SWRCB to approve a loan of $39 million for this project and agrees to pay back the loan in accordance with the SRF Policy.

The domestic water supply for the Cities of South San Francisco, San Bruno, and Colma is provided by California Water and the City of San Francisco Public Utilities Commission. Water supplies are adequate for the 20-year project life. In accordance with the SRF Policy requirements for water conservation, the water purveyors for the service area are signatories to the "Memorandum of Understanding Regarding Urban Water Conservation in California".

The City has provided the Division with a schedule for the submittal of final plans and specifications (P&S) and other 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 Policy, the resolution specifies September 1, 1998 as the date for submittal of final P&S. The Division may approve up to a ninety (90) day extension for good cause.

The City prepared a Mitigated Negative Declaration/Initial Study (MND/IS) which was distributed to the public and circulated through the State Clearinghouse (SCH# 97092100) for review from September 29 through October 30, 1997. During the review period, comment letters were received from four agencies. The City provided adequate responses to the written comments. The City Council approved the project and adopted the MND/IS on December 10, 1997. A Notice of Determination was filed with the San Mateo County Clerk's Office and the Governor's Office of Planning and Research on December 16, 1997.

Because inadequate public notification was provided for the first public hearing, the City Council held a second public hearing on March 11, 1998, which was noticed on February 21, 1998, to reapprove the project and readopt the MND/IS and a Mitigation Monitoring Plan.

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 P&S are not submitted by September 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 June 1998 are as follows:

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan 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 Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the submittal date for biddable P&S for facility construction is not met.

DRAFT May 22, 1998

WHEREAS:

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

2. The SWRCB, on September 18, 1997, adopted the FFY 1998 SRF Loan Program Priority List which included the Wastewater Treatment Plant Improvement Project, City of South San Francisco (City) in Priority Class A;

3. The Division of Clean Water Programs (Division) has approved the project report, environmental documents, and the draft revenue program for the project;

4. The water purveyors for the service area are signatories to the "Memorandum of Understanding Regarding Urban Water Conservation in California"; and

5. The City adopted a Mitigated Negative Declaration for the proposed project (State Clearinghouse No. 97092100) which has been reviewed and considered and it has been determined that the proposed project will not result in significant negative environmental impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Approves a SRF loan of $39 million to the City for construction of the Wastewater Treatment Plant Improvement Project, 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 submitted to the Division of Clean Water Programs by September 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 June 18, 1998.

Maureen Marché

Administrative Assistant to the Board