STATE WATER RESOURCES CONTROL BOARD MEETING

SACRAMENTO, CALIFORNIA

NOVEMBER 18, 1997

ITEM 6: APPROVAL OF A STATE REVOLVING FUND LOAN FOR THE CITY OF SACRAMENTO, COMBINED SEWER SYSTEM IMPROVEMENTS, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4441

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 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 on October 17, 1997 to the City of Sacramento (City) for the Combined Sewer System Improvements, and the City agreed in writing on October 17, 1997 with the approval.

The City serves approximately 98,000 residents in the Downtown, East Sacramento, and Land Park areas. About 7,000 acres of the service area uses a combined sewer system, and an additional 2,200 acres in East Sacramento uses a separate sanitary sewer system. The average dry weather flow is about 25 million gallons per day.

The City has an agreement with Sacramento Regional County Sanitation District that allows the City to send up to 60 million gallons per day (mgd) to the Sacramento County Regional Wastewater Treatment Plant near Freeport. When the flow exceeds 60 mgd, which occurs during large storm events, the City must treat and store the wastewater. When the flow exceeds the City's capacity for treatment and storage, the City currently must bypass untreated effluent to the Sacramento River and the lower areas of the collection system experience outflows of untreated wastewater in the streets. The Regional Water Quality Control Board is requiring the City to decrease the bypass of untreated waste and minimize outflows to the system.

The project consists of adding disinfection facilities to Pioneer Reservoir, increasing the pumping capacity of Sump 1/1A, and increased capacity and improved flow hydraulics modifications to Sump 2.

The estimated project cost is $56 million, and the estimated loan eligible cost is $52 million.

In accordance with the SRF Policy requirements for water conservation, the City of Sacramento is a signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California".

The City has provided the Division with a milestone schedule contained in the Division's facilities plan approval letter. In accordance with Section IX (J) of the SRF Policy, if final plans and specifications are not submitted by the expiration date of the preliminary loan commitment, the Division may approve up to a ninety (90) day extension for good cause.

The City prepared a Draft Environmental Impact Report (EIR) for the proposed project which was distributed for public review and circulated through the State Clearinghouse (SH#96082013) from November 7, 1996, through December 23, 1996. The EIR covers Phase I of the project (the portion to be funded) at a project specific level while Phase II of the project is covered at a more general programmatic level.

During the review period, comment letters were received from four agencies and one private organization. In February 1997, the City prepared a Final EIR which included written responses to comments received during the review period. The City has adequately addressed the environmental issues raised during the review period. The City Council certified the Final EIR on March 11, 1997, and filed a Notice of Determination with the Sacramento County Clerk and the Governor's Office of Planning and Research on March 13, 1997.

The City requests the SWRCB approve a loan of $52 million for this project and agrees to pay back the loan in accordance with the SRF Policy.

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 expiration of the preliminary loan commitment if final plans and specifications are not submitted by February 27, 1998, unless the Division approves a ninety (90) day extension for good cause.

RWQCB IMPACT: NONE

FISCAL IMPACT: According to SWRCB Resolution No. 97-001 (Approval of a Staff Proposal toBetter Manage the SRF Repayment Account), the SWRCB may approve preliminary loan commitments against the current FFY account and against 125 percent of future repayment funds based on construction periods.

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



1998 1999 2000

Loan No. SRF Account Repayment Repayment
FFY 97 Carryover:
$30,067,202

Est. FFY 98 Cap. Funds:
$92,500,000

Repayments:
$69,915,181 $67,186,299 $68,475,875
125% Repayments:

$83,982,874 $85,594,844
Previous commitments:
-$77,602,000 -$61,300,000 -$50,000,000
1996 Bond Funds:
___________ $67,520,976 $315,156
Subtotal:
$114,880,383 $90,203,850 $35,910,000





San Luis Obispo County 4014-110 $47,000,000 -$22,000,000 -$25,000,000
City of San Jose 4220-xxx -$40,000,000

City of San Diego 4119-xxx -$13,201,000 -$43,525,000 -$10,910,000
City of San Diego 4542-110 -$7,342,470 -$678,850
City of Sacramento 4441-xxx -$28,000,000 -$24,000,000 ___________





Balance after Approval:
$73,336,913 -0- -0-

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan for the proposed project, with a repayment period of twenty (20) years, and with the first repayment due one (1) year after completion of construction. In accordance with the February 16, 1995, revisions to the SRF Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the date for final plans and specifications submittal is not met.


October 27, 1997 DRAFT

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 97-

APPROVAL OF A STATE REVOLVING FUND LOAN

FOR COMBINED SEWER SYSTEM IMPROVEMENTS CITY OF SACRAMENTO

STATE REVOLVING FUND LOAN PROJECT NO. C-06-4441

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 18, 1997, adopted the FFY 1998 SRF Loan Program Priority List which included the Combined Sewer System Improvement, City of Sacramento in Priority Class B;

3. The Division of Clean Water Programs (Division) has approved the project report, environmental documents, and draft revenue program for the City of Sacramento'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 Sacramento certified an Environmental Impact Report (EIR), State Clearinghouse No. 96082013, which has been reviewed and considered, and it has been determined that:

  1. As stated in the EIR, (1) the project may result in a significant and unavoidable cumulative impact with respect to water quality by contributing to mercury levels in the Sacramento River which often exceed water quality standards and even with implementation of specific mercury-control measures that could be developed as a result of the proposed project, or implementation of the Sacramento River Toxic Pollutant Control Program, the impact may still be significant; and (2) the project had a potential for a significant and unavoidable impact with respect to historical resources but since project effects will be confined to an alteration of the setting of one historically significant structure (Pump Station #2) and design elements of new construction will complement and enhance the historical integrity of the structure, the proposed project will have no adverse effect upon resources determined eligible for the National Register of Historic Places.

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

Implementation of the wastewater treatment facilities improvement project would result in the following benefits: (1) reduction or elimination of outflows that are considered a possible threat to public health; (2) flow reduction and quality improvement for the Combined Sewer System overflows to the Sacramento River where they are considered a potential threat to the beneficial uses of the receiving water and the "fishable/swimming" goals of the Federal Clean Water Act; (3) compliance with the requirements of the U.S. Environmental Protection Agency's "Combined System Overflow Control Policy" and "Nine Minimum Controls", the National Pollution Discharge Elimination System Permit, and the Clean Water Act; and (4) reduction of neighborhood street flooding problems where it is economically feasible. In balancing the project benefits against the potential significant cumulative impact regarding water quality, the SWRCB finds that the public benefits of the project outweigh the unavoidable cumulative impact and, therefore, determines that the impact is acceptable.

(b) Changes or alterations have been required in or incorporated into the proposed project which avoid or reduce to less than significant levels other potentially significant impacts identified in the EIR with respect to historic resources which (although not expected) will be mitigated by undertaking archaeological monitoring near areas where records indicate sites may exist and in the event that cultural materials are exposed during ground-disturbing activities, notifying the City's Historic Preservation Director as well as the Division of Clean Water Programs' Cultural Resources Officer, and stopping work in the vicinity of the find until such time as a professional archaeologist evaluates the nature and significance of the material and develops and completes any mitigation measures required for compliance with Section 106 of the National Historic Preservation Act and applicable state laws.

THEREFORE BE IT RESOLVED THAT

The State Water Resources Control Board:

1. Approves a SRF loan of $52 million to the City of Sacramento for construction of the Combined Sewer System Improvement project, with a repayment period of twenty (20) years, and the first repayment due one (1) year after completion of construction; and

2. Will withdraw this preliminary SRF loan commitment if final plans and specifications are not submitted to the Division of Clean Water Programs by February 27, 1998. The Division may approve up to 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 November 18, 1997.

Maureen Marché

Administrative Assistant to the Board