ITEM 5

SUBJECT

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE COUNTY OF LOS ANGELES DEPARTMENT OF PUBLIC WORKS (COUNTY) FOR THE MALIBU WATER POLLUTION CONTROL PLANT REHABILITATION PROJECT, SRF LOAN PROJECT

NO. C-06-4498-110

DISCUSSION

In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund for Construction of Wastewater Treatment Facilities (Policy), adopted on February 16, 1995, and amended on June 18, 1998, projects on the adopted Statewide priority list need SWRCB approval to receive a SRF loan. Pursuant to SRF Policy Section IV.E.3, the Statewide priority list may be adjusted or amended by the SWRCB at any time for good cause subject to approval by Environmental Protection Agency. 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.

On August 27, 1999, the Division issued Facilities Plan Approval to the County for construction of the Malibu Water Pollution Control Plant Rehabilitation Project, and the County agreed in writing with the approval on September 27, 1999.

The Malibu Water Pollution Control Plant (MWPCP) is located in the City of Malibu on the coast of the Pacific Ocean in the County of Los Angeles. The MWPCP is operated by the County for the Malibu Zone of the Consolidated Sewer Maintenance District. The MWPCP currently serves a 169 condominium unit complex and has a design capacity of 37,500 gallons per day . The plant effluent is disposed in seepage pits and the waste sludge is hauled to the City of Los Angeles or the County Sanitation Districts of Los Angeles County for treatment and disposal.

The MWPCP is over 30 years old and in need of major rehabilitation. The plant has been out of compliance with its Waste Discharge Requirements (WDR’s) because it has exceeded its design flow and because the minimum vertical separation between the bottom of the seepage pits and groundwater table cannot be maintained during wet weather season. Additionally, 75 percent of the plant’s seepage pit capacity has been taken out of service due to high groundwater and plugging problems.

On November 2, 1998, the Los Angeles Regional Water Quality Control Board (LARWQCB) issued new WDR’s which require more stringent treatment and a revised monitoring and reporting program.

The County’s design engineer has determined that the cost effective project to address these problems consists of replacement of the headworks, a new extended aeration package plant, new filters, electrical system upgrade, a disinfection system, four new seepage pits, effluent monitoring equipment, and operator facilities. In addition to the rehabilitation and upgrade project, the plant will be expanded to accommodate a new 22 unit condominium complex.

The new plant would be able to accommodate the average and peak flows of the expanded service area and would meet the requirements of the LARWQCB WDR’s for improved treatment. Because the effluent will be filtered and disinfected, the minimum vertical separation to groundwater will no longer be required, and the plugging problem in the seepage pits should be eliminated.

The County has provided the Division with a milestone schedule containing a submittal date for the biddable Plans and Specifications (P&S) of January 4, 2000. In accordance with the SRF Policy Section IX.(I), the sunset date for biddable P&S submittal is hereby established as January 4, 2000. The Division may approve up to a 90 day time extension of this date for good cause.

Domestic water to the service area is provided by the Los Angeles County Waterworks District No. 29. The District purchases 100 percent of its water supply from the Metropolitan Water District of Southern California through the West Basin Municipal Water District. The water supply is a blend of Colorado River Aqueduct and California Aqueduct. The same water source will continue to supply potable water to all users within District No. 29. The Los Angeles County Waterworks Districts, a Division of the Los Angeles County Department of Public Works is a signatory to the “Memorandum of Understanding Regarding Urban Water Conservation in California”, and therefore meets the SRF Policy requirements for water conservation.

The County prepared a Negative Declaration/Initial Study for the proposed project which was distributed to the public and circulated through the State Clearinghouse (SCH #99041082) for review from April 20, 1999, through May 20, 1999. During the review period, the County received comments from two public agencies. The County Board of Supervisors considered the comments, approved the project, and adopted the Negative Declaration on June 22, 1999. The County filed a Notice of Determination with the Los Angeles County Clerk and Governor’s Office of Planning and Research on June 30, 1999.

The estimated SRF loan eligible project cost is $860,000. The County requests the SWRCB approve a loan of $860,000 for this project and agrees to pay back the loan in accordance with the SRF Policy.

POLICY ISSUE

1. Should the SWRCB approve SRF loan funding for the proposed project, including a 20 year period for repayment, with the first repayment due one year after completion of construction?

2. Should the SWRCB condition this approval by requiring expiration of the preliminary loan commitment if biddable P&S are not submitted by January 4, 2000?

RWQCB IMPACT

LARWQCB. The project will enable the County to meet the new LARWQCB discharge requirements by providing expanded and upgraded facilities, and advanced treatment of effluent. The new WDR’s are consistent with the LAWRQCB basin plan.

FISCAL IMPACT

The SWRCB adopted Resolution No. 99-40 on May 20, 1999, which changed the method for determining the amount of funding available for new loans to a system based on the availability of cash to make disbursements to the project under consideration by the SWRCB. A minimum cash balance of $25,000,000 will be maintained. The SRF account balances, anticipated repayment amounts, and project approvals under consideration by the SWRCB in November 1999 are as follows:

	SFY	SFY	SFY	SFY	SFY
	1999-00	2000-01	2001-02	2002-03	2003-04
	___________	__________	__________	_________	_________
Beginning Balance:	$517,428,413	$318,201,877	$123,383,215	$62,771,438	$111,822,255
Est. Repayments:[1]	73,959,359	92,267,142	102,320,609	118,288,293	145,490,205
Cap Grants:[2]	112,520,000	0	0	0	0
Est. SMIF Interest:	10,000,000	6,000,000	1,000,000	1,000,000	1,000,000
Est. Disbursements:[3]	-389,505,895	-279,325,804	-161,532,386	-70,237,476	-0
Subtotal:	$324,401,877	$137,143,215	$65,171,438	$111,822,255	$258,312,460
L.A. County – Malibu Tmt 4498-110		-860,000
City of American Canyon 4666-110	-2,400,000	-7,200,000	-2,400,000
Town of Windsor 4704-110	-3,800,000	-5,700,000



Balance:	$318,201,877	$123,383,215	$62,771,438[4]	$111,822,255	$258,312,460

[1] Est. repayments include repayments from existing loans and from loans expected to be executed in the next few years for projects with existing commitments.

[1] An EPA Capitalization Grant of $97,000,000 for SFY 2000 is anticipated (the federal budget is not approved at this time) plus State match funds of $19,400,000. $3,880,000 is deducted for administrative costs.

[1] Estimated disbursements includes disbursements remaining on existing loans as well as disbursements anticipated on loans executed for projects with existing commitments (including FY2000 commitments). The Division will revise the estimated disbursements total each month as cash draw forecasts are updated.

[1] The cash balance on June 30, 2002, is estimated to be $37,771,438 above the level needed to maintain a $25,000,000 reserve.

STAFF RECOMMENDATION

That the SWRCB adopt a resolution approving a SRF loan of $860,000 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 Section IX.(I) the February 16, 1995, SRF Policy amended on June 18, 1998, the proposed resolution includes an expiration date for this preliminary loan commitment if biddable P&S are not submitted by January 4, 2000.

_______________________________________________________________________________________________

DRAFT October 25, 1999

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 99-__

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE COUNTY

OF LOS ANGELES DEPARTMENT OF PUBLIC WORKS (COUNTY) FOR THE

MALIBU WATER POLLUTION CONTROL PLANT REHABILITATION PROJECT,

SRF LOAN PROJECT NO. C-06-4498-110

WHEREAS:

1. The State Water Resources Control Board (SWRCB), on February 16, 1995, adopted the “Policy for Implementing the State Revolving Fund for Construction of Wastewater Treatment Facilities,” and revised it on June 18, 1998;

2. The SWRCB, on June 2, 1999, adopted the Federal Fiscal Year (FFY) 1999/2000 SRF Loan Program Priority List, which included the Upgrades at Malibu Treatment Plant project in Priority Class B;

3. The Division of Clean Water Programs (Division) has approved the facilities plan;

4. The County is signatory to the “Memorandum of Understanding Regarding Urban Water Conservation in California”; and

5. The County adopted a Negative Declaration for the proposed project (State Clearinghouse No. 99041082) which has been reviewed and considered, and it has been determined that the proposed project will not result in significant negative environmental impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Approves a SRF loan of $860,000 to the County of Los Angeles Department of Public Works for the construction of the Malibu Water Pollution Control Plant Rehabilitation Project. The repayment period shall be 20 years, and the first repayment due one year after completion of construction, and

2. Will withdraw this preliminary SRF loan commitment if biddable Plans and Specifications are not submitted by January 4, 2000. The Division may approve up to a 90 day time extension for good cause.

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 November 18, 1999.

Maureen Marché

Administrative Assistant to the Board

[1] Est. repayments include repayments from existing loans and from loans expected to be executed in the next few years for projects with existing commitments.

[2] An EPA Capitalization Grant of $97,000,000 for SFY 2000 is anticipated (the federal budget is not approved at this time) plus State match funds of $19,400,000. $3,880,000 is deducted for administrative costs.

[3] Estimated disbursements includes disbursements remaining on existing loans as well as disbursements anticipated on loans executed for projects with existing commitments (including FY2000 commitments). The Division will revise the estimated disbursements total each month as cash draw forecasts are updated.

[4] The cash balance on June 30, 2002, is estimated to be $37,771,438 above the level needed to maintain a $25,000,000 reserve.