ITEM 3

SUBJECT

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF SAN DIEGO (CITY) FOR CONSTRUCTION OF THE POINT LOMA WASTEWATER TREATMENT PLANT MAINTENANCE BUILDING EXPANSION, SRF LOAN PROJECT NO. C-06-4690-110

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 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.

On April 26, 1999, the Division issued Facilities Plan Approval to the City for the construction of the Point Loma Wastewater Treatment Plant Maintenance Building Expansion, and the City agreed in writing with the approval on May 3, 1999.

The City of San Diego is located in Southern California. The City’s Metropolitan Wastewater Department (MWWD) is responsible for maintaining, upgrading, and expanding the Metropolitan Sewerage System (Metro System). The largest wastewater treatment plant in the Metro System is the Point Loma plant, which treats about 190 million gallons per day.

The Point Loma plant is currently undergoing upgrading and expansion of its treatment processes and support facilities. Additional space is needed for maintenance staff, centralization of the maintenance shop activities, shop records, and reports. The project consists of an approximately 4,300 square foot expansion of the existing maintenance building which was originally constructed in 1964.

The City meets about 75 percent of its water needs through purchases of imported water from the San Diego County Water Authority (Water Authority). The remainder of the water supply demand is provided by local surface water supplies and recycled water. The Water Authority is a member agency of the Metropolitan Water District of Southern California, which imports water from the State Water Project and the Colorado River. Both the Water Authority and the Metropolitan Water District have adopted long term plans designed to ensure the adequacy and reliability of water supplies to their service areas beyond the next twenty years. The City 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 City prepared an Environmental Impact Report (EIR) for the Point Loma Wastewater Treatment Plant Master Plan, that included a program level analysis of the proposed project, which was distributed for public review and circulated through the State Clearinghouse (SCH# 94101024) from October 6, 1995 through November 20, 1995. The City Council held a public hearing on November 20, 1995. During the review period, the City received comments on the Master Plan from two federal agencies, three state agencies, and five individuals. No comments pertaining to the proposed project were received. In February 1996, the City prepared a Final EIR which included comments, responses, and text revisions based on comments received. The City Council certified the Final Master Plan EIR on April 1, 1996.

The City prepared an Addendum to the EIR, addressing the maintenance building expansion in February 1998. The City Council certified the Addendum to the EIR on November 10, 1998, and filed a Notice of Determination with the San Diego County Clerk on November 12, 1998. The Division will file a Notice of Determination with the Governor’s Office of Planning and Research upon SWRCB funding approval.

The estimated SRF loan eligible project cost is $1.15 million. The City requests the SWRCB approve a loan of $1.15 million for this project 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 20 year period for repayment, with the first repayment due one year after completion of construction?

RWQCB IMPACT

San Diego Regional Water Quality Control Board. The project will enable the Point Loma Wastewater Treatment Plant maintenance staff to continue to perform their function as the plant expands and personnel needs increase. The project is necessary for the plant to meet its waste discharge requirements.

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 September 1999 are as follows:
 

	SFY	SFY	SFY	SFY	SFY
	1999-00	2000-01	2001-02	2002-03	2003-04
	___________	__________	__________	_________	_________
Beginning Balance:	$543,088,506	$247,623,915	$68,876,465	$36,327,516	$98,773,519
Est. Repayments*:	75,640,609	93,418,584	113,012,689	133,275,004	137,567,168
Cap Grants**:	55,000,000	0	0	0	0
SMIF Interest:	10,000,000	6,000,000	1,000,000	1,000,000	1,000,000
Est. Disbursements***:	-422,927,700	-246,166,034	-121,561,639	-57,529,000	-0
Previous SFY 2000 commitments:	0
City of Vacaville 4610-120		-25,000,000	-25,000,000	-14,300,000
City of San Diego 4650-110	-6,840,000	-4,560,000
City of San Diego 4650-210	-3,660,000	-2,440,000
City of San Diego 4690-110	-1,150,000
Sacto. Valley Open Space 6055-110	-1,527,500
Balance:	$247,623,915	$68,876,465	****$36,327,516	$98,773,519	$237,340,687

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

** An EPA Capitalization Grant of $55,000,000 for SFY 2000 is anticipated.  However, the federal budget is not approved at this time

*** Estimated disbursements includes disbursements remaining on existing loans as well as disbursements anticipated on loans executed for projects with existing commitments.  The Division will revise the estimated disbursements total each month as cash draw forecasts are updated.

**** To maintain a minimum reserve of $25,000,000, only $11,327,516 remains for commitment to projects that will draw funds prior to FY 2002.  If EPA Capitalization Grants are received in SFY 2001 or SFY 2002, additional commitments may be made.

STAFF RECOMMENDATION

That the SWRCB adopt a resolution approving a SRF loan of $1.15 million for the proposed project, with a period of 20 years, and with the first repayment due one year after completion of construction.

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 City’s South Bay Reclamation Sewer and Pump Station projects in Priority Class B;

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

4.  The City is signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California"; and

5.  The City has certified a Master Plan EIR (State Clearinghouse No. 94101024) and an Addendum to the EIR, both of which have been reviewed and considered, and it has been determined that changes or alterations have been required in, or incorporated into the project which avoid or reduce to less than significant levels potentially significant environmental effects identified in the EIR and Addendum. These changes or alterations are not within the responsibility and jurisdiction of the SWRCB and have been adopted or should be adopted by other agencies.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board approves a SRF loan of $1.15 million to the City of San Diego for the construction of the Point Loma Wastewater Treatment Plant Maintenance Building Expansion project. The repayment period shall be 20 years, and the first repayment due one year after completion of construction.

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 16, 1999.

______________________________
Maureen Marché
Administrative Assistant to the Board