WHEREAS:

1.  The State Water Resources Control Board (SWRCB) has approved $86.557 million in local match (formerly referred to as zero-interest) loans for three projects for the City of San Diego (City) to upgrade and expand its wastewater treatment system. These projects include five loan contracts;

2.  The City's charter prevents it from entering into the SWRCB's standard loan contract without seeking voter approval;

3.  The City does not wish to seek voter approval, but is proposing changes to the SWRCB's standard loan contract which will eliminate the need for voter approval;

4.  The changes to the State Revolving Fund (SRF) loan contract would:

• specify that the SRF loan is subordinate to existing City debt,
• authorize the City to sell future debt secured by "Net System Revenues" of its wastewater system which is senior to the SRF loan in exchange for the City accepting local match loans, maintaining an "A" or better rating on the senior debt and maintaining 1.1 coverage for the SRF loan,
• approve the City's "Net System Revenues" of its wastewater system as the dedicated source for repayment of the SRF loan,
• authorize the SWRCB to take action in court directly against the City in the event of a default in making repayments under the loan contract, and
• provide that no prepayment penalty will be assessed if the City repays all or part of full amount due under the loan at any time before final payment is due; and

THEREFORE BE IT RESOLVED:

That the State Water Resources Control Board:

1.  Continues its commitment to provide SRF loans to the City of San Diego as set forth in Resolution Nos. 97-028, 97-079, 97-104, and 97-105; and

2.  Approves modifications to the SRF loan contracts for the City of San Diego as provided by this resolution.

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 17, 1999.

/s/

Maureen Marché
Administrative Assistant to the Board