ITEM 6: APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE HILMAR COUNTY WATER DISTRICT (DISTRICT), HILMAR WASTEWATER TREAT-MENT FACILITY IMPROVEMENTS, SRF PROJECT NO. C-06-4596-110

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 (SRF Policy), adopted on February 16, 1995, and amended on June 18, 1998, projects on the adopted SRF priority list need SWRCB approval to receive a SRF loan for construction. 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) the environmental documents; (3) the draft revenue program; and (4) the water conservation plan.

On January 28, 1999, the Division approved the Facilities Plan for the District. The District is located on the north edge of Merced County, in the San Joaquin Valley, 39 miles south of the City of Stockton. The District serves a population of approximately 4,500 and the 1996 median household income is $30,103. The treatment plant average flow is about 434,000 gallons per day.

The District's treatment plant consists of a lift station, an aerated pond containing three surface aerators, and two stabilization ponds. Effluent is currently disposed in evaporation/percolation ponds on an adjacent site. There is no longer adequate separation to groundwater in the disposal area which poses a threat of groundwater contamination. The treatment plant has also reached the permitted capacity of the facilities. The Central Valley Regional Water Quality Control Board (CVRWQCB) issued Cease and Desist Order No. 97-103 requiring the District remedy these problems. The proposed project will increase the treatment capacity and correct the disposal inadequacies.

The estimated project cost is $4,359,391. The District has received a Small Communities Grant (SCG) for Planning of $49,609 and an SCG Design Grant of $109,782. The SRF loan will be for the balance of the project costs.

The District prepared a Mitigated Negative Declaration/Initial Study (MND/IS) which was distributed to the public and circulated through the State Clearinghouse (SCH# 97102046) for review from October 15, 1997, through November 14, 1997. During the review period, the District received four comment letters. The District's Board of Directors considered the comments, approved the project, and adopted the MND/IS and a Mitigation Monitoring and Reporting Program on May 5, 1998. A Notice of Determination was filed with the Merced County Clerk and the Governor's Office of Planning and Research.

The District requests the SWRCB approve a SRF loan of $4.2 million for this project.

POLICY ISSUES: Should the SWRCB approve a SRF loan commitment for the proposed project, including a 20 year repayment period, with the first repayment due one year after completion of construction, and 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 this project does not receive plans and specifications approval by November 30, 1999, unless the Division approves a 90-day extension for good cause?

RWQCB IMPACT: Approval of the loan will allow the District to comply with the Central Valley Regional Water Quality Control Board, Cease and Desist Order No. 97-103.

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 1999 are as follows:
 

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

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan for construction of the proposed project. The loan shall have a repayment period of 20 years, with the first repayment due one year after completion of construction. In accordance with the February 16, 1995, revisions to the SRF Policy, the proposed resolution includes an expiration date for the preliminary loan commitment if the date for plans and specifications approval is not met.

WHEREAS:

1. The State Water Resources Control Board, on February 16, 1995, adopted the Policy for Implementing the State Revolving Fund for construction of Wastewater Treatment Facilities, and amended it on June 18, 1998;

2. The State Water Resources Control Board, on June 18, 1998, adopted the FFY 1998/99 SRF Loan Program Priority List which included the Hilmar Wastewater Treatment Facility Improvements, Hilmar County Water District in Priority Class D;

3. The Division of Clean Water Programs has approved the project report, environmental documents, draft revenue program, and the water conservation plan for the Hilmar County Water District project; and

4. The District adopted a Mitigated Negative Declaration (State Clearinghouse No. 97102046) prepared for the proposed project, which has been reviewed and considered and it has been determined that the project will not result in significant negative environmental impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board approves a preliminary SRF loan commitment of $4.2 million to the Hilmar County Water District for construction of the Hilmar Wastewater Treatment Facility Improve-ments project, the repayment period is 20 years, the first payment due one year after completion of construction; and will withdraw this preliminary loan commitment if plans and specifications approval is not given before November 30, 1999, unless the Division approves 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 March 18, 1999.

Maureen Marché
Administrative Assistant to the Board