August 27, 1997

STATE WATER RESOURCES CONTROL BOARD

WORKSHOP SESSION -- DIVISION OF CLEAN WATER PROGRAMS

SEPTEMBER 3 , 1997

ITEM: 3

SUBJECT: CONSIDERATION OF STATE REVOLVING FUND (SRF) LOAN ELIGIBILITY FOR REPLACEMENT OF PREVIOUSLY GRANT FUNDED FACILITIES; TRANCAS WASTEWATER TREATMENT PLANT IMPROVEMENT PROJECT; LOS ANGELES COUNTY DEPARTMENT OF PUBLIC WORKS, SRF LOAN PROJECT NO. C-06-4499-110

DISCUSSION:

The Trancas Wastewater Treatment Plant is located in the City of Malibu and is owned and operated by Los Angeles County (County). The plant is a tertiary facility with a treatment system consisting of primary clarification, rotating biological contactors (RBC's), secondary clarification, filtration, and disposal of effluent to leachfields. The solids train consists of aerobic digestion with the digested biosolids hauled to a disposal point in the City of Los Angeles sewer system.

The Trancas plant is designed to treat a maximum flow of 100,000 gallons per day (GPD). Flows typically average about 65,000 GPD. The plant is a "previously grant funded" facility as it was upgraded and improved with an EPA/State construction grant awarded in August 1977.

According to an engineering report prepared for the County in 1995, the plant is in need of repair. The proposed improvements include in general: (1) cleaning and recoating of corroded surfaces and mechanical fittings, (2) replacement of the comminutor, tertiary sand filters, RBC unit drive system, broken air diffusers, and (3) installation of a second redundant RBC. The estimated construction cost of the proposed improvements is $543,200. The total project cost is estimated at $706,200.

The Los Angeles County Department of Public Works has requested a SRF loan on behalf of the Trancas service area for the proposed improvements at the Trancas plant.

There are two issues regarding eligibility of this proposed project. The County (see April 1, 1997, and May 22, 1997, letters), and two homeowners associations, the Winter Canyon Condominium Council (see June 30, 1997, letter), and the Malibu West Board of Directors (see January 21, 1997) are citing unique circumstances and request special consideration from the SWRCB for eligibility.

The first issue is previously grant funded facilities. Section IX.E.2.k. of the Policy For Implementing the State Revolving Fund for Construction of Wastewater Treatment Facilities adopted in February 1995 and amended on January 16, 1996 (SRF Policy) states that the replacement of previously grant funded facilities is ineligible. The SWRCB may consider granting an exception in the event that, after examining the circumstances, a finding is made that the petitioner suffers a severe hardship or unique circumstances. The County is claiming a financial hardship and unique circumstances because it did not establish a capital replacement fund at the time of the EPA grant award in 1977 nor any time thereafter. An eventual shortage of maintenance funds resulted, and hence the current problems with the plant.

There may be project components that were not previously grant funded. These may be eligible for SRF loans, although more review is required before eligibility can be determined.

The County deemed a capital replacement fund unwarranted at the time the EPA grant was awarded because a regional treatment system was expected to be in place and operational before the end of the Trancas plant's useful life. The regional treatment system plans were pursued by the County during the 1980's but abandoned due to opposition by the local residents. It was never constructed.

The second issue is the eligibility of the RBC's. In accordance with 40 CFR Part 35.2035, RBC's have officially been deemed a failed technology by the EPA. Problems with RBC's included lack of mechanical reliability, inability to meet design performance specifications, and significantly increased operating and maintenance costs. The County states that these restrictions should not apply in their case because the existing relatively narrow 15 foot RBC facility is not subject to deflection of its main shaft, a problem of larger units.

There are, however, other problems with the Trancas RBC unit. For example, the County is requesting replacement of the drive motor, bearings, and drive unit. Also, it is uncertain whether the existing RBC, or the treatment system in general, is performing adequately and meeting its design performance specifications as the Waste Discharge Requirements only require monitoring for flow, pH, and groundwater level and priority pollutants on an annual basis

The Regional Water Quality Control Board has indicated that the current discharge requirements will be modified to include a more stringent effluent monitoring program. The new requirements are expected to include total nitrogen and ammonia limitations which cannot be met with RBC's alone.

Approving this project for eligibility would set the following precedents: (1) waivers of the SRF Policy may be granted for previously grant funded facilities with broken down equipment even where an account was not established for the anticipated normal replacement of equipment, and/or when appropriate maintenance was not conducted, and (2) SRF loans may be awarded to fund proven failed technologies.

POLICY ISSUE:

Should the SWRCB: (1) qualify this previously grant funded project for SRF loan eligibility due to severe financial hardship and unique circumstances exceptions under Section IX.E.2.k. of the SRF Policy, and (2) consider SRF funding for the existing RBC maintenance and the addition of a second RBC an eligible project cost.

RWQCB IMPACT: None

FISCAL IMPACT: None at this time. If the project eventually receives preliminary SRF loan commitment, its estimated cost impact would be around $1 million.

STAFF RECOMMENDATION:

That the SWRCB deny SRF loan eligibility for the components of the proposed project that were previously grant funded.

[Attachment not available electronically but can be obtained by calling Dan Little at (916) 227- 4475.]



STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 97-

CONSIDERATION OF STATE REVOLVING FUND (SRF) LOAN FUNDING

ELIGIBILITY FOR REPLACEMENT OF PREVIOUSLY GRANT FUNDED FACILITIES; TRANCAS WASTEWATER TREATMENT PLANT IMPROVEMENT PROJECT; LOS ANGELES COUNTY DEPARTMENT OF PUBLIC WORKS, SRF LOAN NO. C-06-4499-110

WHEREAS:

1. The County of Los Angeles (County) owns and operates the Trancas Wastewater Treatment Plant in the City of Malibu, and the County Department of Public Works is acting on behalf of the Trancas service area in its application for a SRF loan;

2. The Trancas Wastewater Treatment Plant is in need of repairs and was previously grant funded in 1977 with an EPA construction grant;

3. A capital replacement fund was not established for the Trancas plant resulting in a lack of adequate maintenance;

4. In accordance with the Policy For Implementing the State Revolving Fund for Construction of Wastewater Treatment Facilities (SRF Policy), previously grant funded facilities are ineligible for SRF loan assistance unless a severe financial hardship or unique circumstance exists;

5. The County is requesting repair of an existing Rotating Biological Contactor (RBC) and installation of a second RBC for redundancy;

6. RBC's are deemed a failed technology by EPA pursuant to 40 CFR 35.2035; and

7. If this project is approved for SRF loan eligibility, two precedents would be established. These precedents are: (1) previously grant funded facilities where a capital replacement fund was not established for the replacement of worn out equipment, and where adequate maintenance was not conducted would be eligible, and (2) failed technologies such as RBC's would be eligible.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board finds that the eligibility of this project is limited to components which were not previously grant funded.

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 September 18, 1997.


Maureen Marché

Administrative Assistant to the Board