ITEM 1B: APPROVAL OF A STATE REVOLVING FUND LOAN FOR THE CITY OF AUBURN, WASTEWATER TREATMENT PLANT FACILITIES IMPROVEMENT PROJECT, STATE REVOLVING FUND LOAN PROJECT NO. C-06-4471-110

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 to the City of Auburn (City) for the Wastewater Treatment Plant Facilities Improvement Project, and the City agreed in writing with the approval.

The City is located approximately 35 miles northeast of Sacramento (see attached map). The City serves a population of approximately 12,500 and the treatment plant average flow is about 1.3 million gallons per day.

The City's treatment plant has generally produced a high quality secondary effluent. However, the Regional Water Quality Control Board (RWQCB) Waste Discharge Requirements require the City to begin discharging a tertiary treated effluent beginning January 1, 1998. The proposed project will be constructed in two phases. Phase I of the proposed project will add filters to the treatment process to enable the City to comply with this RWQCB time schedule. Phase II of the proposed project will add treatment facilities to replace and expand the existing treatment plant to a average dry weather flow of 2.5 million gallons per day capacity.

The estimated project cost is $12.99 million, and the estimated loan eligible cost, including allowances, is $9.85 million.

The domestic water supply for the City is provided by the Placer County Water Agency. Water supplies are adequate for the 20-year project life because of several adequate surface water and groundwater sources. On May 15, 1997, the City submitted an acceptable water conservation plan to comply with the SRF Policy water conservation requirements.

The City has provided the Division with a schedule contained in the milestone schedule in the Division's facilities plan approval letter. In accordance with Section IX (J) of the SRF Policy, if the specified tasks are not completed by the expiration dates 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 (SCH #94112054) from October 3, 1996, through November 18, 1996. The public review period was extended to January 15, 1997. The EIR provided project specific analysis of Phase I and II of the project, and program level analysis of Phase III.

During the review period, comment letters were received from nine agencies and nine special interest groups or individuals. A wide array of environmental issues were raised mostly by the Ophir Area Property Owners Association.

In March 1997, the City prepared a Final EIR. The Final EIR included text revisions, a revised mitigation monitoring plan, and written responses to comments received during the review period. The City has adequately addressed the environmental issues raised during the review period. The City Planning Commission certified the Final EIR on May 6, 1997, and filed a Notice of Determination with the Placer County Clerk and the Governor's Office of Planning and Research on May 7, 1997.

On July 7, 1997, a Petition for Writ of Mandate was filed in Superior Court of the State of California in and for the County of Placer, by Ophir Area Property Owners Association and California Sportfishing Protection Alliance, against the City of Auburn, City Council of Auburn, and City of Auburn Department of Public Works, for adopting an allegedly inadequate EIR for the proposed project.

The City requests the SWRCB approve a zero percent interest loan of $9.85 million for this project. To be eligible for the zero percent interest loan, the City will adopt a resolution to provide the required State funding match of $1,641,700, which is equal to 16.667 percent of the loan amount, 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 bids are not opened for Phase I by November 3, 1997, or if biddable plans and specifications are not submitted for Phase II by June 22, 1998, and approved by August 17, 1998?

RWQCB 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 September 1997 are as follows:

	Loan No.	1997	1998	1999
		SRF Account	Repayment	Repayment
Balance:		$59,523,155	$56,794,799	$63,633,739
125% Repayment:			$70,993,499	$79,542,174
Previous commitment:			-$65,339,000	-$61,300,000
City of Colton	4251-110	$8,100,000
Santa Ynez CSD	4357-110	$508,000
City of San Diego	4383-110	$10,900,000
City of Auburn	4471-110	$3,200,000		$6,650,000
Balance after Approval:		$36,815,155	$5,654,499	$11,592,174

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a zero percent interest 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 January 18, 1996, revisions to the SRF Policy, the proposed resolution includes expiration dates for this preliminary loan commitment if the specified tasks are not accomplished.

September 9, 1997 DRAFT

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 Wastewater Treatment Plant Facilities Improvement Project, City of Auburn in Priority Class C;

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

1. The City of Auburn certified an EIR (State Clearinghouse No. 94112054) which has been reviewed and considered, and it has been determined that:

1. As stated in the EIR, the project may result in significant and unavoidable impacts with respect to: (i) short-term construction noise which even with the implementation of the proposed mitigation measures will result in noise levels at nearby residential areas exceeding the Placer County maximum allowable noise level (60 Ldn) for this land use designation; (ii) aesthetics which even with the implementation of proposed mitigation measures will be significantly impacted by construction dust.

The State Water Resources Control Board (SWRCB) hereby adopts the following statement of overriding considerations to address the unavoidable 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) social considerations regarding the accommodation of growth and the beneficial response to nuisances associated with the existing facilities, (2) economic considerations regarding the cost effectiveness of the selected alternative, and (3) environmental considerations regarding reduction in water pollution.

In balancing the project benefits against the potential significant impacts regarding short-term noise and aesthetics impacts, the SWRCB finds that the public benefits of the project outweigh the unavoidable impacts and, therefore, determines that the impacts are acceptable.

1. Changes or alterations have been required in, or incorporated into the proposed project which avoid or reduce to less than significant levels the other potentially significant environmental effects identified in the EIR with respect to: (i) water quality impacts which will be mitigated by testing excavated soils and transporting contaminated soils to a suitable disposal site, using a water quality protection plan, and providing dilution, source control, or advanced treatment facilities to meet water quality criteria; (ii) groundwater impacts which will be mitigated by monitoring leakage from storage ponds and rectifying deficiencies; (iii) public health impacts which will be mitigated by notifying public health authorities and nearby residents of any spill, leaks, or effluent discharges, and providing proper handling and containment of chemicals used at the facilities.

(c) 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:

1. Approves a zero percent interest SRF loan of $9.85 million to the City of Auburn for construction of the Wastewater Treatment Plant Facilities Improvement Project 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 bids are not opened for Phase I by November 3, 1997, or biddable plans and specifications for Phase II are not submitted to the Division of Clean Water Programs by June 22, 1998, and approved by August 17, 1998, unless the Division approves a ninety (90) day extension for good cause.

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