ITEM 11: SUBJECT: ADOPTION OF THE SMALL COMMUNITY GRANT PROJECT PRIORITY LIST, AND AUTHORIZATION TO ISSUE PLANNING AND DESIGN GRANTS FOR ELIGIBLE PROJECTS

DISCUSSION: The State Water Resources Control Board (SWRCB) adopted the Small Community Grant (SCG) Policy on January 23, 1997. A copy of the draft Small Community Grant Priority List of projects eligible for funding under the SCG Program was mailed to the public for comment on March 10, and March 24, 1997.

1. SMALL COMMUNITY GRANT PRIORITY LIST

The list was discussed at the Workshop on April 2, 1997, and the SWRCB, because of concerns of adequate notification for recommendations made by the Division of Clean Water Programs (DCWP), directed that information be mailed to all communities in Tables 1 and 2 of the Project Priority List notifying them of the requirements for upgrading their projects. The notification of a second Workshop for April 30, 1997, was mailed on April 8, 1997, and is contained in Exhibit I (Exhibit I is not available electronically -- contact Eric Torguson at (916) 227-4449)

The draft Priority List (not available electronically -- contact Eric Torguson at (916) 227-4449) is based on input received from all of the Regional Water Quality Control Boards and is consistent with the adopted SCG Policy. The eligible project cost column indicates the estimated grant amount based on the sliding scale percentages, the 1996 MHI, and the estimated project cost.

Because the costs of projects being requested by the Regional Water Quality Control Boards far exceed the $30 million in available grant funding, the DCWP proposes that a line be drawn at the bottom of Priority Class B. Those projects above the line would be allowed to compete for funding. The cutoff level at about $75 million was selected based on the DCWP's experience that it takes about 2 1/2 times the dollar volume of projects to assure expenditure of the available funds in a reasonable period of time.

The proposed SCG Priority List is composed of two parts. The portion above the funding line (Classes A and B) will be eligible for assistance. Projects below the funding line (Class C) will not be eligible for assistance. Exhibit II is a copy of the proposed List.

It is proposed that communities with MHI's in excess of $31,999, that are in Priority Classes A and B on Tables 1 or 2, and are not a Census Designated Place, a city or a town, be allowed to conduct an income survey which could result in additional requests for placement on the Priority List. The DCWP, therefore proposes to bring an additional list of projects to the SWRCB for consideration in September 1997. Only projects where an income survey indicates a MHI of less than $32,000 will be considered for addition to the list. It is proposed that no new projects be added to the list presented at the April 2, 1997, Workshop. It is further proposed that no pollution study projects be placed on the fundable portion of the list because there are sufficient projects already on the list to use the available funds.

2. BLANKET AUTHORIZATION TO ISSUE PLANNING AND DESIGN GRANTS

Because the expected number of planning and design grants is much greater than under the previous SCG Program, the Division is proposing that the SWRCB issue a blanket authorization to the Division to process planning and design grants on a first-come, first-served basis to communities on the fundable portion of the Priority List. This action is expected to save significant applicant and staff time as well as Workshop and Board meeting time.

POLICY ISSUE: Should the SWRCB 1) adopt the Small Community Grant Project Priority List and 2) authorize the Division of Clean Water Programs to issue planning and design loans to eligible projects?

FISCAL IMPACT: The Safe, Clean, Reliable Water Supply Act allows up to 3 percent ($900,000) for program administration. This amount is estimated to be sufficient to administer a program with about $75 million in projects competing for the available funding.

REGIONAL BOARD IMPACT: All of the communities on the draft Priority List represent actual or potential public health hazards, water quality problems, or permit violations. Funding of projects to correct these problems will help the Regional Water Quality Control Boards meet statewide water quality goals.

STAFF RECOMMENDATION: That the SWRCB adopt a resolution 1) approving the - Small Community Grant Program Project Priority List, and 2) approving a blanket authorization to the Division of Clean Water Programs to issue planning and design grants to eligible small communities.

WHEREAS:

1. The Division of Clean Water Programs has prepared a draft Small Community Grant Program Project Priority List in conformance with the Small Community Grant Program Policy adopted by the State Water Resources Control Board on January 23, 1997, which was discussed at Workshops on April 2, and April 30, 1997;

2. The Division of Clean Water Programs, based on historical experience, has determined that a line should be drawn at Priority Class B which allows about $75 million in projects to compete for the available funds;

3. Communities with Median Household incomes above $31,999, in Classes A and B, that are not a Census Designated Place, a city, or a town, may conduct income surveys that may result in the need to add additional projects to the fundable portion of the list;

4. A time limit to complete income surveys needs to be set to finalize the Priority List within a reasonable time period;

5. There is no need to develop additional projects for addition to the Priority List through pollution study grants; and

6. Due to the larger number of eligible communities, the necessity to take each planning and design grant to the SWRCB for approval is unnecessarily time consuming for both the SWRCB and the local community.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Adopts the Small Communities Grant Program Project Priority List, with a funding line drawn at the bottom of Priority Class B;

2. Directs the Division of Clean Water Programs to bring back to the State Water Resources Control Board for consideration in September 1997, any Priority Class A and B projects that might be eligible for addition to the Small Community Grant Project Priority List as a result of an income survey; and

3. Approves a blanket authorization allowing the Division of Clean Water Programs to write and issue planning and design grants for eligible Small Community Grant projects.

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 May 14, 1997.