STATE WATER RESOURCES CONTROL BOARD MEETING

SACRAMENTO, CALIFORNIA

March 20, 1997

ITEM: 1

SUBJECT: WAIVER OF SECTIONS IX.E.2.c. AND XIV OF THE POLICY FOR IMPLEMENTING STATE REVOLVING FUND FOR CONSTRUCTION OF WASTEWATER TREATMENT FACILITIES (SRF POLICY) FOR RUBIDIOUX COMMUNITY SERVICES DISTRICT

DISCUSSION: The Rubidoux Community Services District (RCSD)

project was approved for a State Revolving Fund (SRF) loan by the State Water Resources Control Board on July 22, 1993 for $2.5 million. Because of delays in completing the revenue program for the project, RCSD has not received an SRF loan contract as yet.

The RCSD, however, went ahead and advertised for bids and has obtained a responsible low bidder. The RCSD's Board has approved award of the construction contract but has not officially executed the contract. After the RDSD's approval to award the construction contract, a problem occurred with construction of the pipeline across two stream crossings. The RCSD, after an investigation, decided to do a change order to allow the contractor to utilize a directional bore method to tunnel under the crossings rather than to disturb the streambeds.

A letter was written by the Division of Clean Water Programs to RCSD denying the change order cost of $141,291 because Section IX.E.2.c. of the SRF Policy states that construction change orders and claims are not eligible for SRF assistance. Further, Section XIV states that the loan amount will be based on the lowest acceptable bid plus the engineering allowances. The RCSD has written a letter dated February 19, 1997, appealing the staff decision. A copy of the letter is attached.

When the SRF Policy was drafted, the problem of an applicant approving a change order before issuance of the SRF loan contract was not contemplated. The intent of the SRF Policy was not to become involved in change orders and claim review after the loan contract is written. This was done to eliminate the controversy and administrative costs involved with change order and claim review.

If RCSD were to rebid the contract, the added costs would be eligible. The current wording in Section IX.E.2.c. and XIV leaves the RCSD with the choice of rebidding to make the costs eligible, which they have elected not to do, or to proceed with the change order and lose $141,291 in eligible projects costs. Waiver of these two Sections of the SRF Policy would allow eligibility of the change order. The increase would not cause the total project eligible cost to exceed the 50 percent allowance for increases in the SRF Policy.

POLICY ISSUE: Should the State Water Resources Control Board (SWRCB)

approve a waiver to Sections IX.E.2.c. and XIV of the SRF Policy.

REGIONAL None

BOARD

IMPACT:

FISCAL There is no direct program impact. There is

IMPACT: sufficient State Revolving Fund (SRF) loan monies available to increase eligible project for the RCSD by $141,291.

STAFF That the SWRCB adopt a resolution approving a

RECOMMEN- waiver to Sections IX.E.2.c. and XIV of the SRF

DATION: Policy.

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 97-

WAIVER OF SECTIONS IX.E.2.c. AND XIV OF THE POLICY

FOR IMPLEMENTING THE STATE REVOLVING FUND FOR

CONSTRUCTION OF WASTEWATER TREATMENT

FACILITIES (SRF POLICY) FOR THE

RUBIDOUX COMMUNITY SERVICES DISTRICT

WHEREAS:

1. Sections IX.E.2.c. and XIV of the SRF Policy provide that project change orders and claims are not eligible for funding.

2. The Rubidoux Community Services District (RCSD) wants to issue a change order in the amount of $141,291 prior to issuance of the SRF loan contract.

3. This is a special case not contemplated when the SRF Policy was written.

4. The project change would be eligible for assistance if the project were rebid.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board approves a Waiver of Sections IX.E.2.c. and XIV of the Policy For Implementing The State Revolving Fund.

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