ITEM 1: APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF WASCO, WASTEWATER TREATMENT PLANT EXPANSION, SRF LOAN PROJECT NO. C-06-4243-110

DISCUSSION: In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund (SRF) for Construction of Wastewater 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 schedule.

On February 2, 1998, the Division issued Facilities Plan Approval to the City of Wasco (City) for the Wastewater Treatment Facility Expansion, and the City agreed in writing with the approval February 2, 1998.

The City is located northwest of Bakersfield and lies within the County of Kern. The City's present wastewater treatment facilities were originally constructed in 1937. The facilities have since been enlarged and/or modified on a number of occasions. The last two expansions were completed in 1978 under a Clean Water Grant and in 1988 under a Farmers Home Administration loan. The City owns and operates the facility that serves a current population of about 18,500. The current wastewater flow to the facility is about 2.1 million gallons per day (mgd). The facility discharges the treated effluent by irrigating feed and fodder crops on 465 acres of land owned by the City. The current wastewater flows to the plant have exceeded its design treatment capacity on several occasions resulting in violation of the Regional Water Quality Control Boards' (RWQCB) waste discharge requirements. The proposed project will expand the treatment capacity by 0.55 mgd and will provide a reserve treatment capacity for 12 years (till the year 2010).

The City and its engineer have determined that an expansion and upgrade of the existing treatment system is the cost effective solution for bringing the plant into compliance with RWQCBs' standards. The proposed project would also include an influent pump station, primary and secondary clarifiers, digester rehabilitation, and additions to the laboratory and administration building. The estimated SRF loan eligible project cost including engineering and administration is $5.1 million.

The City provides its own water supply from its ground water wells and has indicated that it has enough water resources available over the life of the proposed project (12 years). In accordance with the SRF Policy requirements for water conservation, the City submitted a specific time schedule for local adoption of a water conservation program.

The City has provided the Division with a schedule of submittal dates for 100 percent plans and specifications and other milestones for the wastewater treatment project. These submittal dates are contained in the milestone schedule in the Division's facility plan approval letter. In accordance with Section IX (J) of the SRF Policy, the draft resolution includes June 30, 1998, as the deadline for initiation of construction. 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 # 97011021) for review from January 13 through February 13, 1997. During the review period, comment letters were received from six agencies and one law firm. The City provided adequate responses to the written comments. The City Council approved the project and adopted the MND/IS on April 15, 1997. A Notice of Determination was filed with the Kern County Clerk's Office on August 7, 1997.

Because substantial changes were required in the MND, the City published a second Notice of Public Hearing on December 11, 1997, to consider the readoption of the MND. Proposed changes included incorporation of information required by the U.S. Fish and Wildlife Service, an analysis of project alternatives, including the "No Project" alternative, and a Mitigation Monitoring Program. The public hearing was held on January 20, 1998. The City readopted the MND and filed a Notice of Determination with the Kern County Clerk and the Governor's Office of Planning and Research on January 20, 1998.

The City requests the SWRCB approve a loan of $5.1 million for this project with a twenty (20) year repayment period and with the first loan repayment due one (1) year after completion of construction.

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 is not initiated by June 30, 1998? 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 March 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:		$32,466,561
FFY 98 Fed. Cap. Grant:		$77,774,121	$14,679,936
1996 Bond Funds:			$47,292,822
Previous Commitments:		-$168,256,982	-$147,452,850	-$84,895,000
Subtotal:		$11,311,230	-0-	$1,348,430
City of Wasco	4243-110	-$5,100,000
City of Nipomo	4501-110	-$1,500,000
Balance:		$4,711,230	-0-	$1,348,430

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan of $5.1 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. In accordance with the February 16, 1995, SRF Policy, amended on January 18, 1996, the proposed resolution includes an expiration date for this preliminary loan commitment if the date of initiation of construction is not met.

DRAFT March 2, 1998

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 Treatment Facility Expansion for City of Wasco 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 Wasco's project; and

4. The City of Wasco adopted a Mitigated Negative Declaration (State Clearinghouse No. 97011021) prepared for the project which has been reviewed and considered and it has been determined that the project will not result in any significant environmental impacts

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board

1. Approves a SRF loan commitment of $5.1 million to the City of Wasco for the 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; and

2. Will withdraw this preliminary SRF loan commitment if the City of Wasco does not initiate project construction by June 30, 1998. The Division may approve up to a ninety (90) days 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 March 25, 1998.

Maureen Marché

Administrative Assistant to the Board