STATE WATER RESOURCES CONTROL BOARD

WORKSHOP SESSION -- DIVISION OF CLEAN WATER PROGRAMS

MARCH 5 & 6, 1997

ITEM: 5

SUBJECT: APPROVAL OF A STATE REVOLVING FUND LOAN FOR THE CITY OF CHICO, WATER POLLUTION CONTROL PLANT EXPANSION, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4504-110

DIS- In accordance with the State Water Resources Control Board's (SWRCB) Policy for

CUSSION: Implementing the State Revolving Fund (SRF) for Construction of Wastewater Treatment Facilities (Policy), adopted on February 16, 1995, and amended on

January 18, 1996, 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.

The Division issued Facilities Plan Approval to the City of Chico (City) for the City's Water Pollution Control Plant Expansion, and the City agreed in writing with the approval.

The City is located in Butte County and is approximately 92 miles north of Sacramento (see attached map). The City serves a population of 59,900 and the treatment plant average flow is about 6 million gallons per day (mgd).

The City's current treatment plant consists of primary clarifiers followed by aeration tanks and then secondary clarifiers. The plant is currently operating at it's design capacity and the expansion is necessary to reliably meet the Waste Discharge Requirements (WDR) today and as the City grows. The City's expansion project will increase the treatment plant capacity to 9 mgd and includes constructing additional clarifiers, aeration tanks, disinfection facilities, and digesters.

The estimated project cost is $32,000,000. The project includes facilities to perform nitrification. Nitrification is not required by the current WDR and, therefore, is not eligible for SRF loan. The estimated loan eligible cost is $25,300,000.

The domestic water supply for the City is provided by a local water purveyor. Water supplies are adequate for the 20-year project life because groundwater levels indicate a stable source of water. In accordance with the SRF Policy requirements for water conservation, the City's water purveyor is a signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California".

The City has provided the Division with a schedule for the final plans and specifications and other milestones. These dates are contained in the milestone schedule in the Division's facilities plan approval letter. In accordance with Section IX (J) of the SRF Policy, the Division will add eight (8) weeks to complete its review and approval process. The Division may approve up to a ninety (90) day extension for good cause.

The City prepared a Draft EIR for the proposed project which was distributed for public review and circulated through the State Clearinghouse (SCH #94112054) from July 14, 1995, through August 28, 1995. During the review period, comments were received from ten local, state and federal agencies. The City also received six comment letters from the public. In November 1995, the City prepared a Final EIR. The Final EIR included text revisions, a revised mitigation monitoring plan, and written responses in its reply to comments received during the review period. In addition, the project has been changed to include the nitrification process. The City has adequately addressed the environmental issues raised during the review period. The City Council certified the Final EIR on March 5, 1996, and filed a Notice of Determination with the Butte County Clerk and the Governor's Office of Planning and Research on March 14, 1996.

The City requests the SWRCB approve a loan of $25,300,000 million for this project and agrees to pay back the loan in accordance with the SRF Policy. Construction will start in FFY 1997 and continue through 1999; therefore, part of the loan commitment may be made against future SRF repayment monies.

POLICY Should the SWRCB approve SRF loan funding for the proposed project, including a

ISSUE: twenty (20) year repayment period, with the first repayment due one (1) 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 biddable plans and specifications are not submitted by July 1, 1997.

REGIONAL None

BOARD

IMPACT:

FISCAL According to SWRCB Resolution No. 97-001 (Approval of a Staff Proposal to

IMPACT: 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 monies based on scheduled loan dates.

The SRF account balances, anticipated repayment amounts, and project approvals under consideration by the SWRCB in March 1997 are as follows:

STAFF That the SWRCB adopt a resolution approving a SRF loan for the proposed project,

RECOMMEN- with a repayment period of twenty (20) years, and with the first repayment due

DATION: one (1) year after completion of construction. In accordance with the January 18, 1996, revisions to the SRF Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the submittal of final plans and specifications is not met.

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 97-

APPROVAL OF A STATE REVOLVING FUND LOAN

FOR WATER POLLUTION CONTROL PLANT EXPANSION,

CITY OF CHICO

STATE REVOLVING FUND LOAN PROJECT NO. C-06-4504-110

WHEREAS:

1. The State Water Resources Control Board, on February 16, 1995, adopted the "Policy for Implementing the State Revolving Fund (SRF) for Construction of Wastewater Treatment Facilities", and amended it on January 18, 1996;

2. The State Water Resources Control Board, on September 19, 1996, adopted the FFY 1997 SRF Loan Program Priority List which included the Water Pollution Control Plant Expansion project, City of Chico, in Priority Class A;

3. The Division of Clean Water Programs (Division) has approved the project report, environmental documents, and draft revenue program for the City of Chico's project;

4. The water purveyors for the service area are signatories to the "Memorandum of Understanding Regarding Urban Water Conservation in California"; and

5. The City of Chico certified a final EIR (State Clearinghouse No. 94112054) prepared for the project, which has been reviewed and considered and it has been determined that:

1. Changes or alterations have been required in, or incorporated into the proposed project which avoid or reduce to less than significant levels potentially significant environmental effects identified in the EIR with respect to: (i) Erosion impacts which will be mitigated by the use of an Erosion and Sediment Control Plan including measures for covering graded areas and stockpiled soils, avoiding soil and vegetation disturbances, and revegetating; (ii) hazardous materials impacts which will be mitigated by using a Hazardous Materials Control and Spill Response Plan and a Risk Management Plan including measures for preventing soil and water contamination, establishing a spill prevention and countermeasure plan, cleaning up spills, notifying the Department of Fish and Game of spill events, and providing staging and storage areas for possible contaminants; (iii) water quality impacts which will be mitigated by a streambed alteration agreement from Department of Fish and Game governing vegetation disturbance and siltation, and a Section 404 permit from the Army Corps of Engineers; (iv) threatened and endangered species impacts which will be mitigated by waiting until ditches are dry for a least seven days before performing pipeline excavations near them; and (v) cultural resources impacts which will be mitigated by following the guidelines set forth in Appendix K of the State CEQA Guidelines.

(b) With respect to other potentially significant environmental impacts identified in the environmental document, appropriate changes or alterations are not within the responsibility and jurisdiction of the SWRCB. Such other changes or alterations have been adopted or should be adopted by other agencies.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board

Approves a SRF loan of $25.3 million to the City of Chico for construction of the Water Pollution Control Plant Expansion project, with the following provisions:

a) the repayment period is twenty (20) years;

b) the first repayment is due one (1) year after completion of construction; and

c) this preliminary loan commitment will expire if biddable plans and specifications are not received by July 1, 1997, unless the Division approves a ninety (90) day extension for good cause.

CERTIFICATION

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 20, 1997.

Maureen Marché

Administrative Assistant to the Board