ITEM 3: APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE SOUTH COAST WATER DISTRICT (SCWD), CAPACITY PURCHASE AT THE SOUTH EAST REGIONAL RECLAMATION AUTHORITY, AND PUMPING IMPROVE-MENTS AT THE VICTORIA WASTEWATER TREATMENT PLANT (VICTORIA PLANT), SRF LOAN PROJECT NO. C-06-4064-110

DISCUSSION: On October 1, 1998, the Division of Clean Water Programs (Division) issued Facilities Plan Approval to the Capistrano Beach Water District (CBWD). The approval was for the purchase of treatment capacity at the South East Regional Reclamation Authority (SERRA) plant and construction of both an interim and a permanent pumping plant at the Victoria Plant to convey wastewater to the SERRA plant. The CBWD agreed in writing with the approval on October 5, 1998. The State Water Resources Control Board (SWRCB) adopted Resolution No. 98-111 approved a preliminary loan commitment for the project on November 19, 1998.

Construction of the improvements at the Victoria Plant is scheduled for completion in two phases. Phase I (interim pumping plant) is under construction and is scheduled for completion in June 1999. The resolution established a "sunset" date of January 11, 1999, for initiating construction on Phase II.

Effective January 1, 1999, the CBWD consolidated with the SCWD by resolution of the Local Agency Formation Commission (LAFCO) of Orange County. Pursuant to the LAFCO resolution, the SCWD is the successor agency, and assumes all responsibilities of the CBWD.

On March 4, 1999, the SCWD adopted Resolution No. 19-98/99 which designated an authorized representative and which confirmed that the SCWD is aware of the SRF loan program documents submitted to the SWRCB by the prior authorized representative of the CBWD. The SCWD Board of Directors further certifies that the SCWD accepts and will fulfill all assurances made in the SRF program documents. The project approved by the SWRCB in November 1998 has not changed. The resolution is a commitment to complete the project.

Because of the time required for the consolidation, the sunset date for initiation of construction on Phase II could not be met. The SCWD requests an extension of 150 days to June 12, 1999, to begin construction on Phase II.

The SCWD also requests the SWRCB transfer its preliminary loan commitment of $7.61 million from the CBWD to the SCWD for this project. The SCWD agrees to pay back the loan in accordance with the SRF Policy.

POLICY ISSUE:  Should the SWRCB approve the transfer of SRF loan funding for the proposed project, including a 20 year repayment period, with the first repayment due one year after completion of construction? Should the SWRCB approve an extension of 150 days to June 12, 1999, to begin construction of Phase II?

RWQCB IMPACT:  San Diego Regional Water Quality Control Board. Approval of this funding will allow the Victoria Plant to be abandoned. Treatment at the SERRA plant can continue to meet requirements.

FISCAL IMPACT:  The fiscal impact of approving transfer of this loan commitment is negligible. The SWRCB previously approved a preliminary loan commitment of $7.61 million to the CBWD for this project on November 19, 1998.

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan for the proposed project, with a repayment period of 20 years, and with the first repayment due one year after completion of construction. In accordance with the February 1995 SRF policy as amended on June 18, 1998, the proposed resolution includes an expiration date for this preliminary loan commitment if construction on Phase II is not initiated by  June 12, 1999.

WHEREAS:
1.  The State Water Resources Control Board (SWRCB) adopted Resolution No. 98-111 on November 19, 1998, approving a preliminary loan commitment for the Capistrano Beach Water District (CBWD) for wastewater treatment capacity purchase at the South East Regional Reclamation Authority plant, and for pumping improvements at the Victoria Plant;

2.  The SWRCB resolution established a "sunset" date of January 11, 1999, to initiate construction of Phase II of the project, which the CBWD could not meet;

3.  Under the Resolution of the Local Agency Formation Commission of Orange County (LAFCO), the CBWD consolidated with the South Coast Water District (SCWD) effective January 1, 1999. The SCWD is the successor agency;

4.  The project approved by the SWRCB on November 19, 1998, is unchanged;

5.  The SCWD committed to complete the project by adopting Resolution No. 19-98/99 which designated an authorized representative and confirmed that the SCWD is aware of the SRF loan program documents submitted to date. The LAFCO resolution also certifies that the SCWD accepts and will fulfill all assurances made in the SRF loan documents;

6.  The SCWD requests the SWRCB to transfer the preliminary loan commitment from the CBWD to the SCWD; and

7.  The SCWD requests a 150 day time extension to June 12, 1999, to initiate construction on Phase II of the project.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1.  Transfers the preliminary loan commitment from the Capistrano Beach Water District to the South Coast Water District (SCWD) in the amount of $7.61 million for capacity purchase at the South East Regional Reclamation Authority treatment plant and the construction of both an interim and a permanent pump station at the Victoria Plant site. The repayment period shall be 20 years, and the first repayment due one year after completion of construction, and

2.  Approves a 150 day time extension to June 12, 1999, to initiate construction on Phase II of the project, and

3.  Will withdraw the Phase II portion of this $7.61 preliminary SRF loan commitment if the SCWD does not initiate Phase II of construction by June 12, 1999. The Division of Clean Water Programs may approve up to a 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 May 20, 1999.

Maureen Marché
Administrative Assistant to the Board