STATE WATER RESOURCES CONTROL BOARD MEETING

SACRAMENTO, CALIFORNIA

MARCH 20, 1997

ITEM: 3

SUBJECT: APPROVAL OF A STATE REVOLVING FUND LOAN FOR McKINLEYVILLE COMMUNITY SERVICES DISTRICT, DISPOSAL CAPACITY EXPANSION PROJECT, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4259-120.

DISCUSSION:- In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund (SRF) for Construction of Wastewater Treatment Facilities (Policy), adopted on February 16, 1995 and amended 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) the environmental documents; (3) the draft revenue program; and (4) the water conservation plan.

On January 23, 1997, the Division issued Facilities Plan Approval to the McKinleyville Community Services District (District) for the Disposal Capacity Expansion Project. On January 29, 1997, the District agreed, in writing, with the approval.

McKinleyville is a community of approximately 9,600 people located 15 miles north of Eureka in Humboldt County (map attached). Presently, the existing treatment plant capacity is 1.18 million gallons per day (MGD), but the summer time disposal capacity is rated at only 0.69 MGD. The existing treatment plant consists of four treatment ponds, chlorination facilities, summer time percolation ponds, and an effluent discharge pipe to the Mad River. When the District is unable to discharge to the Mad River, wastewater effluent is directed to two percolation ponds and to a limited amount of irrigation facilities on nearby pasture land.

Construction for the treatment capacity was provided by a SRF loan in 1994 and construction occurred during the summer of 1996. Originally, sufficient disposal was proposed at the McKinleyville Airport to bring the disposal capacity up to 1.18 MGD. However, Federal Aviation Administration (FAA) concerns were raised prior to construction of the disposal field at the airport and the District was forced to abandon the concept of disposing of wastewater at that site. The treatment plant upgrades proceeded, but disposal site construction was delayed until a more suitable parcel was located. The District finally decided upon the Lourenco site, which is located approximately two miles south of the District's treatment plant. The District is proceeding with the design for flood irrigation on the upper part of the parcel and spray irrigation on the lower part of the parcel.

Potable water is supplied by the Humboldt Bay Municipal Water District which extracts water from the Mad River. The water supply is capable of meeting the present and future demands. The District is the water purveyor in its service area. The District's 1993 Urban Water Management Plan meets the SRF Policy's water conservation requirements, and was approved by the Division on February 24, 1993.

The City has provided the Division with a schedule for the final plans and specifications and other milestones. These dates are contained in the milestones schedule in the Division's Facility Plan Approval letter. In accordance with Section IX (J) of the SRF Policy, the preliminary loan commitment will expire if biddable plans and specifications are not received by June 1, 1997. 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.

In December of 1991, the District issued an Initial Study and Proposed Negative Declaration. Subject to comments received at the January 9, 1992 public hearing and written comments on the Initial Study/Proposed Negative Declaration, the District determined that an Environmental Impact Report (EIR) would be appropriate for the project. The draft EIR was prepared and circulated through the State Clearinghouse (SCH#91123032) for comments from March 1, 1993 through April 15, 1993. The District's Board of Directors certified the Final EIR for this project on December 15, 1993, and filed a Notice of Determination with the Humboldt County Clerk and the Governor's Office of Planning and Research on December 16, 1993.

An Addendum was prepared, based on the District's decision, due to airport limitations, to select the Lourenco site as the preferred alternative, instead of the previously proposed airport site. The Lourenco site had been considered in the Final EIR as a potential project site and the environmental impacts resulting from irrigation at the site were analyzed. The Addendum was not recirculated through the State Clearinghouse; however, the public was invited to review the Addendum and comment at a public meeting on August 7, 1995. The Addendum was adopted and the Final EIR recertified by the District's Board of Directors on August 10, 1995. A Notice of Determination was filed with the Humboldt County Clerk and with the Governor's Office of Planning and Research on August 14, 1995.

The estimated loan eligible project cost for the disposal expansion is $440,000. Loan repayment will be through dedicated sewer service charges. The repayment period will be established for a twenty (20) year period, commencing one (1) year after project completion.

POLICY ISSUE: Should the SWRCB approve SRF loan funding for the proposed project including a 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 an expiration of the preliminary loan commitment if biddable plans and specifications are not received by June 1, 1997?

REGIONAL BOARD IMPACT: None

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 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 RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan of $440,000 for the - proposed project, with a repayment period of twenty (20) years, with the first repayment duerepayment due one (1) year after completion of construction. In accordance with the SRF Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the biddable plans and specifications receival date is not met.

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 97-

APPROVAL OF A STATE REVOLVING FUND LOAN FOR McKINLEYVILLE COMMUNITY SERVICES DISTRICT, DISPOSAL CAPACITY EXPANSION PROJECT, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4259-120.

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" (SRF Policy), 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 McKinleyville Community Services District's Disposal Facilities Project in Priority Class D;

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

4. The McKinleyville Community Services District Board of Directors approved an Addendum to the Final EIR and re-certified the Final EIR (State Clearinghouse No. 911232032) which had been reviewed and considered and it has been determined that:

(a) All significant adverse environmental impacts occurring as a primary result of physical improvements to the wastewater treatment facility, irrigation with treated wastewater, or installation of pipelines and irrigation systems will be eliminated or substantially lessened with implementation of the identified mitigation measures which are adopted as part of the proposed project.

(b) As stated in the EIR, the project may result in population growth. This growth may result in significant and unavoidable growth inducing secondary impacts with respect to: (i) traffic - increased population will result in traffic congestion at several intersections; (ii) biology - The Coastal Terrace prairie community will be reduced and habitat destruction will adversely impact various plant and animal species and the individual biological impacts will be cumulative on a regional basis; (iii) visual aesthetics - development will fill open areas of the community, degrading the aesthetic environment; and (iv) utilities and services - schools will become overcrowded as development occurs.

The SWRCB hereby adopts the following statement of overriding considerations to address the unmitigable impacts within its jurisdiction that may potentially occur from approval of the project:

1. Upon due consideration of the restrictions and hardships imposed on the community due to a District sewer hook-up moratorium in response to a pending cease and desist order from the RWQCB, of the capacity limitations of the current wastewater treatment system, and of the imminent danger of NPDES violations, the SWRCB finds that implementation of the Sewer Capacity Expansion Project will result in sufficient additional effluent disposal capacity to meet the needs of planned growth, will negate the need for a sewer hook-up moratorium, and will lessen potential violations of the NPDES permit; and

2. In balancing the project benefits against the potential significant secondary impacts regarding traffic, biology, visual aesthetics, and utilities and services, the SWRCB finds the public benefits of the project outweigh the unavoidable impacts and, therefore, determines that the impacts are acceptable.

(c) Changes or alterations have been required in, or incorporated into the project which avoid or substantially lessen the other potentially significant environmental impacts identified in the EIR with respect to the following aspects of the project; (i) wetland impacts which will be mitigated by requiring a 30-foot grading setback from any identified wetlands and trenching, if required, only during the summer with backfill restored to pre-project conditions; (ii) cultural resource impacts which will be mitigated by halting construction activities in the area of the find and by consulting an archaeologist; (iii) erosion impacts which will be mitigated by constructing a 50-foot irrigation setback from the bluff edge, adjacent to the Mad River; and (iv) water quality impacts which will be mitigated by appointing a water reclamation supervisor to monitor operation of all irrigation systems using reclaimed water, complying with regulatory requirements, and setting application rates to prevent crop nutrient overloading.

(d) With respect to other potentially significant environmental impacts identified in the EIR, appropriate changes or alterations are within the jurisdiction of other public agencies. Such other changes or alterations have been adopted or should be adopted by such other agencies.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board approves a SRF loan of $440,000 to the McKinleyville CSD for the construction of the Disposal Capacity 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

June 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