ITEM 3: WATER RECYCLING FACILITIES PLANNING GRANT PROGRAM, APPROVAL OF GRANT FOR FACILITIES PLANNING STUDY FOR GROUNDWATER REPLENISHMENT SYSTEM, ORANGE COUNTY WATER DISTRICT

DISCUSSION: The Safe, Clean, Reliable Water Supply Act (1996 Bond Law) established the Water Recycling Subaccount and provided $60 million for low-interest loans for design and construction of water recycling projects and for grants for facilities planning of recycling projects. The Water Recycling Subaccount serves as a revolving fund such that loan repayments are available for new loans but not for planning grants. The 1996 Bond Law also provided that repayments from water reclamation loans under the Clean Water and Water Reclamation Bond Law of 1988 would be deposited in the 1996 Water Recycling Subaccount for new loans and planning grants. The current annual income from repayments from 1988 Bond Law loans is approximately $2.4 million. About $1.9 million in earned interest and repayments to the revolving fund have been received that can be used for planning grants. No funds have been obligated for loans or grants and $1.9 million have been set aside for administration, leaving $60.0 million available for new loans or grants.

In April 1997 the SWRCB approved the Water Recycling Funding Guidelines governing the Water Recycling Loan Program and the Water Recycling Facilities Planning Grant Program (FPGP). Planning grants are authorized to cover 50 percent of eligible costs up to a maximum grant of $75,000.

Orange County Water District (OCWD) has applied for an FPGP grant for the Groundwater Replenishment System facilities planning study. The estimated eligible cost of the study is $800,000 and the grant requested is $75,000. The study will investigate the use of up to 100,000 acre-feet per year of reclaimed water, primarily for groundwater recharge and groundwater injection for protection against seawater intrusion.

The Water Recycling Funding Guidelines provide that costs for planning are not eligible for a grant unless incurred after the date of execution of the grant contract. The Division has concluded that costs should be eligible if incurred after SWRCB approval of the grant commitment. This would allow an agency to begin eligible work about two months earlier. A change in the funding guidelines will be requested the next time that the guidelines are brought before the Board for revision. In the meantime, the Division is requesting that the Board approve funding for the costs incurred after SWRCB approval of the grant commitment for this project.

POLICY ISSUE: Should the SWRCB approve FPGP grant funding in the amount of $75,000 for the Groundwater Replenishment System facilities planning study? Should the SWRCB approve funding for costs incurred after approval of the grant commitment?

RWQCB IMPACT: None

FISCAL IMPACT: A total of $60.0 million is available for water recycling facilities planning grants. The SWRCB's approval of the $75,000 grant will leave a balance of $59.9 million available for additional water reclamation loans or grants.

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving the $75,000 FPGP grant to Orange County Water District for the subject study and authorizing eligibility for costs incurred after approval of the grant commitment.

DRAFT MARCH 2, 1998

WHEREAS:

1. The Safe, Clean, Reliable Water Supply Act (1996 Bond Law) established the Water Recycling Subaccount and provided for the sale of $60 million in bonds for financial assistance for the planning, design, and construction of water recycling projects;
2. The Clean Water and Water Reclamation Bond Law of 1988 (1988 Bond Law) provided for loans for the design and construction of water reclamation projects;
3. The 1996 Bond Law provided that repayments for water recycling loans from the 1988 Bond Law be deposited in the Water Recycling Subaccount for new loans and grants;
4. The State Water Resources Control Board established the Water Recycling Facilities Planning Grant Program by adoption of the Water Recycling Funding Guidelines (WRF Guidelines) on April 17, 1997, which implemented provisions of the 1996 Bond Law as well as other bond laws;
5. A grant application was submitted by Orange County Water District requesting funding for the Groundwater Replenishment System facilities planning study;
6. The Office of Water Recycling staff has reviewed the application, Plan of Study, and other supporting information for the facilities planning study and has determined that the submitted documents comply with the WRF Guidelines; and
7. The WRF Guidelines provide that eligible costs are costs incurred after execution of the grant contract, and the Office of Water Recycling staff has concluded that it is desirable to allow costs incurred after approval of the grant commitment to be eligible.
8. THEREFORE BE IT RESOLVED THAT:
9. The State Water Resources Control Board:
10. Approves an FPGP grant of $75,000 to Orange County Water District for the Groundwater Replenishment System facilities planning study.
11. Approves a special condition requiring submittal of the final facilities planning report by January 31, 1999. The Office of Water Recycling may approve up to a 12 month extension for good cause.
12. Approves funding for costs incurred after March 25, 1998.

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