ITEM 1: PUBLIC HEARING AND WORKSHOP ON THE PROPOSED STATE FISCAL YEAR (SFY) 1999/00 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 SFY 1999/00 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 April 26, 1999) reflects requests submitted by all of the Regional Water Quality Control Boards. The State Water Resources Control Board (SWRCB) will hold a public hearing on the draft priority list. After the close of the hearing, the SWRCB may discuss the draft list in a Workshop setting.

It is estimated that about $800 million will be appropriated by Congress nationally for FFY 2000 for SRF loans. California is expected to receive 7.24 percent of this or $55 million, as a Capitalization grant for the SRF. With the 20 percent State match, the total will be $66 million. These monies can be used for construction of wastewater treatment and water reclamation facilities, correction of nonpoint source and stormwater pollution problems, and implementation of estuary enhancement activities. The adopted SFY 1999/00 Project Priority List will be used to determine the projects that can compete for loan assistance in SFY 1999/00.

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 list. All projects scheduled for loans in SFY 1999/00 will compete on a first-come, first-served basis to obtain a preliminary loan commitment until the available funds are committed. The amount of funding available for preliminary loan commitments will be based on the cash flow system and is estimated to be at least $140 million at this time. A project must appear on the Priority List to qualify for loan assistance. Though a project may be identified on the Priority List, this is not a commitment to provide loan assistance, except for projects on the fundable portion (first year) of the list.

The fundable portion of the Statewide List includes only those projects which have received a preliminary loan commitment from the SWRCB and are scheduled for loan assistance during the first year of the five-year planning period.

Projects that become ready for construction in SFY 1999/00, but are not on the fundable portion of the list, will be moved to the fundable portion after the preliminary loan commitment is issued. A number of key issues were identified in the Public Hearing announcement regarding the development of the SFY 1999/00 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 estimates that about $140 million will be available in SFY 1999/00 for commitment by the SWRCB. The cap for SFY 1999/00 has been set at $25 million by the SWRCB in action taken on May 20, 1999. This cap would only apply to projects brought before the SWRCB for a preliminary loan commitment in SFY 1999/00.

    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 SFY 1999/00, 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 SFY 1999/00 SRF Loan Program Project Priority List - The staff recommends that the SWRCB adopt the SFY 1999/00 SRF Loan Program Project Priority List.

POLICY ISSUE: Should the final SFY 1999/00 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 for State Fiscal Year 1999/00 will be sufficient to review and process projects from the fundable portion of the list which are expected to submit documents for review.

RWQCB IMPACT: All regions.

STAFF RECOMMENDATION: That, after consideration of comments received at the hearing, the SWRCB adopt the final SFY 1999/00 SRF Project Priority List.

[Exhibits not available electronically but can be obtained by calling Gus Atkins at
(916) 227-4475]

WHEREAS:

1. The Division of Clean Water Programs (Division) has developed the SFY 1999/00 SRF Loan Program Priority List based on Regional Water Quality Control Board and public input consistent with the Federal Clean Water Act;

2. The State Water Resources Control Board held a public hearing on the proposed priority list on June 2, 1999, and considered all comments received.

3. The availability of funds under the SRF Loan Program and the interest expressed for developing and implementing wastewater treatment and water recycling, nonpoint source and storm drainage pollution correction, and estuary enhancement programs and projects support funding Priority Classes A through D in SFY 1999/00;

4. It is expected that the federal appropriations bill for Federal Fiscal Year (FFY) 2000 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;

5. The SWRCB has historically deferred funding for major sewer system rehabilitation (Needs Category IIIB);

6. The SWRCB adopted a $25 million cap for SFY 1999/00 in action taken on May 20, 1999; and

7. Up to four percent of the FFY 2000 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 SFY 1999/00 Priority List;

2. Approves placement of new collection system and combined sewer overflow projects on the SFY 1999/00 Priority List and directs that funding for major sewer rehabilitation projects be deferred and the projects placed on the unscheduled portion of the SFY 1999/00 list;

3. Approves the set-aside of four percent of the FFY 1999 Capitalization Grant amount for SRF Loan Program administration; and

4. Adopts the Final SFY 1999/00 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 June 17, 1999.

Maureen Marché
Administrative Assistant to the Board

1) Glenn E. Prentice, Water Utilities Director, City of Corona

Comments:

Requests that the Temescal Desalter Project for the City of Corona be moved up in priority.

Staff response:

The staff agrees and moved project to Priority Class B (Pollution of an Impaired Water Body).

2) Paul F. Wagner, City Grants Manager for the City of Weed, Great Northern Corporation

Comments:

Requests that the treatment plant upgrade/expansion for the City of Weed be moved up to Priority Class A.

Staff response:

The staff is working with the Regional Board to determine if the latest information submitted justifies moving the project to Class A.

3.) Theodore J. Walker, Project Manager, Sonoma County (Monte Rio).

Comments:

Requests that the Monte Rio Wastewater Pollution Project be moved up to Priority Class B.

Staff response:

The staff agrees and moved project to Priority Class B (Pollution of an Impaired Water Body).