ITEM 12: APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF VACAVILLE (CITY), WASTEWATER TREATMENT PLANT RENOVATION, SRF LOAN PROJECT NO. C-06-4610-110

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 last amended on June 18, 1998, 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 October 6, 1998, the Division issued Facilities Plan Approval to the City for the Wastewater Treatment Facility Renovation and Expansion projects, and the City agreed in writing with the approval October 6, 1998.

The City is located about 35 miles west of Sacramento, and lies within the County of Solano. The City's present wastewater treatment facilities were originally constructed in 1959, and in the late 1960's and early 1990's some major improvements for additional capacity were completed. The City owns and operates the facility that serves a current population of about 86,000. The current wastewater flow to the facility is about eight million gallons per day (mgd). The facility discharges the treated effluent to Old Alamo Creek along the north boundary of the treatment plant. Old Alamo Creek flows to the east and joins Alamo Creek, which in turn joins Ulatis Creek, Cache Slough, and ultimately the Sacramento-San Joaquin River Delta. The current wastewater flows to the plant during the wet weather have exceeded its design treatment capacity on several occasions and, in addition, the plant is not capable of achieving full nitrification which results in violations of the Regional Water Quality Control Boards' (RWQCB) waste discharge requirements. The proposed project will renovate the existing facilities (Contract 1- approximately $3.8 million construction cost) and add a parallel plant to expand the treatment capacity to 14.7 mgd (Contract 2 - approximately $60 million construction cost) and will provide a reserve treatment capacity for 12 years (till the year 2012).

The City and its engineer have determined that the construction of the proposed project in two separate contracts (renovation & expansion) is the cost-effective solution for bringing the plant into compliance with RWQCBs' standards. The renovation contract (C-06-4610-110) will consist of interim improvements to the existing treatment system that would include improve-ments to the headworks, addition of a new blower system, and secondary clarifier sludge withdrawal facilities. The expansion contract (C-06-4610-120) will provide a parallel treatment plant that would include addition of a new influent pump station, headworks, aeration basins with blowers and mixers, secondary clarifiers, chlorine contact facilities, solids handling facilities, administration and laboratory buildings. The total estimated SRF loan eligible project cost for both contracts including engineering and administration allowances is $68.8 million.

The City receives its water supply from deep water wells within the City from an acquifer which is over 1000 feet below the ground surface, and also from surface water through Solano Irrigation Water District, Putah South Canal, and North Bay Acquaduct. The City has indicated that it has enough water resources available to serve the projected population.

In accordance with the SRF Policy requirements for water conservation, the City has adopted a water conservation program consistent with local ordinances and authorities.

The City has provided the Division with a schedule of submittal dates for 100 percent plans and specifications and other milestones for both construction phases of the proposed 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 September 30, 1999 for renovation, as the deadline for initiation of construction. The Division may approve up to a 90 day extension for good cause.

The City prepared a Draft Environmental Impact Report (EIR) for the proposed project that was distributed for public review and circulated through the State Clearinghouse (SCH #97062009) from October 29, 1997, through December 18, 1997. During the review period, comment letters were received from five agencies and six individuals. A wide variety of environmental issues were raised by the public.

On May 20, 1998, the City prepared a Final EIR that included comments, responses, and text revisions based on comments received. The City has adequately addressed the environmental issues raised during the review period. The City Council certified the Final EIR on June 9, 1998, and filed a Notice of Determination with the Solano County Clerk on June 10, 1998, and the Governor's Office of Planning and Research on June 12, 1998.

The City requests the SWRCB approve a loan of $4.5 million for Contract 1 of this project with a 20 year repayment period and with the first loan repayment due one year after completion of construction.

POLICY ISSUE: Should the SWRCB approve SRF loan funding for Contract 1 of the proposed project, including a 20-year repayment period, with the first repayment due one 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 for Contract list not initiated by September 30, 1999?

REGIONAL BOARD IMPACT: Central Valley Regional Water Quality Control Board. The proposed Contract 1 renovation will provide the capability of meeting the existing Waste Discharge Requirements.

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 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 November 1998 are as follows:

* Minimum Cap. Grant expected for FFY 98-99, based on anticipated Federal Budget.

STAFF RECOMMENDTION: That the SWRCB adopt a resolution approving a SRF loan of $4.5 million for Contract 1 of the proposed project, with a repayment period of 20 years, and with the first repayment due one year after completion of construction. In accordance with the February 16, 1995, SRF Policy, amended on June 18, 1998, the proposed resolution includes an expiration date for this preliminary loan commitment if the date of initiation of construction is not met.

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 June 18, 1998;

2. The State Water Resources Control Board, on June 18, 1998, adopted the FFY 1999 SRF Loan Program Priority List which included the Wastewater Treatment Facility Renovation and Expansion for the City in Priority Class D;

3. The Division of Clean Water Programs has approved the facilities plan for the City's project; and

4. The City of Vacaville has certified an EIR (State Clearinghouse No. 97062009) which has been reviewed and considered, and its has been determined that:

a) The project could result in the following significant and unavoidable direct impacts and indirect impacts resulting from growth inducement related to the construction of residential and commercial developments throughout the City service area accommodated by the proposed plant expansion:

Air quality impacts from short-term emissions during construction;

Air quality impacts from potential nuisance odor problems;

Noise impacts from short-term construction noise;

Noise impacts from short-duration noise events during operation;

Indirect transportation and circulation impacts from increased traffic volumes beyond the existing capacity of Interstate 80;

Indirect air quality impacts involving ozone from increased vehicle emissions;

Indirect noise impacts from generation of excessive noise levels in residential communities along major transportation routes;

Indirect water supply and distribution impacts from an increased demand that exceeds entitlements;

Indirect wastewater collection and treatment impacts from increased flows;

Indirect visual quality and community image impacts from development resulting in a change in the community's visual character;

Indirect open space and agricultural land impacts from the loss of prime farmland and conversion of visual open space separators; and

Indirect biotic resource impacts from the loss of open space and agricultural land.

The project will result in the following benefits:

Providing adequate wastewater treatment facilities for future anticipated growth, through the year 2012, as described in the City's 1990 General Plan;

Promoting the protection of water quality and public health by reducing peak wet weather flows and by upgrading other treatment processes to comply with applicable regulations;

Reducing the current odor and noise impacts on local area residents and plant employees; and

Strengthening and diversifying the local economy, advancing social goals, and promoting coordinated balanced growth, consistent with the City's 1990 General Plan.

Having balanced the benefits of the project against its unavoidable environmental impacts it has been determined that the benefits of the project outweigh the unavoidable adverse environmental effects and the project is therefore acceptable.

b) Changes or alterations have been required in, or incorporated into the proposed project which avoid or reduce to less than significant levels the other potentially significant environmental effects identified in the EIR with respect to: (1) water quality impacts which will be mitigated by designing the WWTP to meet RWQCB standards; (2) threatened and endangered species impacts which will mitigated by avoiding impacts to the Valley elderberry longhorn beetle and dedicating vernal pool credits within an approved wetland mitigation bank; (3) soil erosion impacts which will be mitigated by covering or watering all exposed soils and maintaining two feet of freeboard or covering all haul/dump trucks; and (4) cultural resources impacts which will be mitigated by using qualified archeologists and Native American representatives to identify and treat any cultural resources that are encountered, stopping work, notifying the County Coroner if human bones or bones of unknown origin are encountered, and notifying the Native American Heritage Commission if remains are encountered.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Approves a SRF loan commitment of $4.5 million to the City of Vacaville for the construction of the Contract 1 Wastewater Treatment Facility Renovation, with a repayment period of 20 years, and the first repayment due one year after completion of construction; and

2. Will withdraw this preliminary SRF loan commitment if the City of Vacaville does not initiate project construction by September 30, 1999. The Division may approve up to a 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 November 19, 1998.

Maureen Marché

Administrative Assistant to the Board