ITEM 3: PROPOSED FEDERAL FISCAL YEAR (FFY) 1998 STATE REVOLVING FUND (SRF) LOAN PROGRAM PROJECT PRIORITY LIST
DISCUSSION: Staff of the Division of Clean Water Programs (Division) has published, revised and updated the draft FFY 1998 SRF Loan Program Priority List in accordance with the Clean Water Act and federal regulations. The revised list contained in Exhibit A (the list was mailed initially to the public on June 20, 1997) reflects requests submitted by all of the Regional Water Quality Control Boards.
Congress is expected to appropriate $1.075 billion in FFY 1998 (October 1, 1997 to September 30, 1998) nationally for loans for wastewater treatment facilities, water reclamation, nonpoint source and stormwater pollution correction, and estuary enhancement projects. California can expect to have as much as $128 million in funds available in FFY 1998.
Because it is difficult to predict how many projects will be ready in any given year, we are proposing that Priority Classes A through D be placed on the fundable portion of the list. All projects scheduled for loans in FFY 1998 will compete on a first-come, first-served basis until the State Water Resources Control Board (SWRCB) has made preliminary loan commitments for all the available funds. A project must appear on the Priority List to qualify for loan assistance. Though a project may be identified on the fundable portion of the Priority List, this is not a commitment to provide loan assistance.
A number of key issues were identified in the Public Hearing announcement regarding the development of the FFY 1998 List. Exhibit B is a summary of written comments received to date on the List.
The following is a discussion of the key issues taking into consideration all the input received to date:
I. Funding Cap - The SWRCB, on January 23, 1997, adopted new procedures for making new preliminary loan commitments and also raised the cap on the amount of loan assistance per agency to $50 million per year. It is proposed to continue the funding cap at $50 million for FFY 1998.
II. Funding for Major Sewer Rehabilitation - Major sewer rehabilitation projects may be funded from the regular allotment. Since the current Priority List contains over $1 billion in rehabilitation projects that could be funded in FFY 1998, the staff recommends that the SWRCB continue its funding deferral of major sewer rehabilitation projects. Staff believes the money is better spent on the other eligible projects.
III. Adoption of the FFY 1998 SRF Loan Program Project Priority List - The staff recommends that the SWRCB adopt the FFY 1998 SRF Loan Program Project Priority List.
POLICY ISSUE: Should the final FFY 1998 SRF Project Priority List be adopted?
FISCAL IMPACT: The development and adoption of the Priority List is a requirement of the Federal Clean Water Act and regulations. The staff effort required to administer loans for projects on the fundable portion of the list is funded by the SRF Capitalization Grant (up to four percent of each Capitalization Grant can be used for SRF administration). Staffing levels approved for the Division of Clean Water Programs for State Fiscal Year 1997 - 1998 are sufficient to review and process projects from the fundable portion of the list which are expected to submit documents for reviews.
RWQCB IMPACT:- All regions.
STAFF RECOMMENDATION: That the SWRCB adopt the final FFY 1998 SRF Project Priority List and authorize the Division to retain the funding cap at $50 million for FFY 1998.
[Priority List not available electronically but can be obtained by calling Eric Torguson at
September 9, 1997 DRAFT
1. The Division of Clean Water Programs (Division) has developed the FFY 1998 SRF Loan Program Priority List based on Regional Board and public input consistent with the Federal Clean Water Act;
2. The availability of funds under the SRF Loan program and the interest expressed for developing and implementing nonpoint source pollution correction, water reclamation, storm drainage pollution correction, and estuary enhancement programs and projects support funding Priority Classes A through D in FFY 1998;
3. It is expected that the FFY 1998 appropriations bill will allow the States to fund major sewer system rehabilitation (Needs Category IIIB), new collection system (Needs Category IVA), and combined sewer overflow projects (Needs Category V) projects without limitation;
4. The SWRCB has historically deferred funding for major sewer system rehabilitation (Needs Category IIIB);
5. The SWRCB established a $50 million cap for projects on January 23, 1997, and the need exists to continue the cap for FFY 1998 to assume a reasonable distribution of the available funds; and
6. Up to four percent of the FFY 1998 federal Capitalization Grant is available for state administration.
THEREFORE BE IT RESOLVED THAT:
The State Water Resources Control Board:
1. Approves the placement of Priority Classes A through D on the fundable portion of the FFY 1998 Priority List;
2. Approves funding in FFY 1998 for new collection system and combined sewer overflow projects and defers funding for major sewer rehabilitation projects for FFY 1998 and directs that funding for major sewer rehabilitation projects be deferred and the projects placed on the unscheduled portion of the list;
3. Approves a $50 million funding cap on the amount of loan assistance per agency for
4. Approves the set-aside of four percent of the FFY 1998 Capitalization Grant amount for SRF Loan Program administration; and
5. Adopts the Final FFY 1998 SRF Loan Program Project Priority List.
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.
Administrative Assistant to the Board