ITEM 3

SUBJECT

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF WESTMORLAND (CITY), WESTMORLAND WASTEWATER TREATMENT PLANT, SRF PROJECT NO. C-06-4705-110

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 (SRF Policy), adopted on February 16, 1995, and amended on June 18, 1998, projects on the adopted SRF priority list need SWRCB approval to receive a SRF loan for construction. 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) the environmental documents; (3) the draft revenue program; and (4) the water conservation plan.

The estimated project cost is $5.2 million. The City has received a Small Communities Grant (SCG) for Planning of $117,291 and a SCG Design Grant of $139,929. The City is scheduled to receive construction funding from NadBank and the U.S. Department of Agriculture. This requested SRF loan is to provide the last portion of funding to complete their project.

The City requested a waiver of the Water Conservation Requirements of the SRF Policy. The Urban Water Management Planning Act does not require communities with populations less than 3,000 to prepare an urban water management plan. Costs to prepare a document to satisfy the SRF Policy requirements appear to be burdensome to the City in light of the benefits derived from the plan. The City does have a reliable water source which will provide adequate water supply through the design year. On December 9, 1999, the Division approved the Facilities Plan for the City.

The City is located in Imperial County, ten miles south of the Salton Sea and 23 miles north of El Centro. The City serves a population of approximately 2300 and the treatment plant average flow is about 300,000 gallons per day.

The City’s current wastewater treatment facilities consists of an influent pump station followed by six wastewater treatment ponds which are operated in two parallel trains, each train with three ponds. The first pond in each treatment train is aerated and followed by stabilization ponds, which discharge to the Trifolium drain.

The Colorado River Basin Regional Water Quality Control Board (CRBRWQCB) has issued two orders concerning the City’s wastewater treatment facility. The first one is Administrative Civil Liabilities Order No. 94-093 and is the result of discharge of raw sewage to the Trifolium drain from the influent pump station. The second one is Time Schedule Order (TSO) No. 99-074, which superseded TSO No. 97-110, and concerns leakage from the wastewater treatment ponds. The proposed project will increase the treatment capacity and correct the problems identified in the CRBRWQCB Orders.

The City prepared a Negative Declaration/Initial Study (ND/IS) which was distributed to the public and circulated through the State Clearinghouse (SCH# 98031046) for review from March 10, 1998, through April 9, 1998. During the review period, the City received two comment letters. The City provided adequate responses to the written comments. The City Council approved the project and adopted the ND/IS on April 15, 1998. A Notice of Determination was filed with the Imperial County Clerk and the Governor’s Office of Planning and Research on April 20, 1998.

The U.S. Environmental Protection Agency and the U.S. Department of Agriculture, Rural Development Agency prepared a Finding of No Significant Impact/Environmental Assessment for this same project, which was distributed to the public and circulated through the State Clearinghouse (SCH# 99051081) for review from May 24, 1999, through June 22, 1999. A Notice of Determination was filed with the Governor’s Office of Planning and Research on July 12, 1999.

The City requests the SWRCB approve a SRF loan of $2.1 million for this project.

POLICY ISSUES

Should the SWRCB approve a SRF loan commitment for the proposed project, including a

20-year repayment period, with the first repayment due one year after completion of construction, and should the SWRCB, in accordance with Section IX (J) of the SRF Policy, condition this approval by requiring expiration of the preliminary loan commitment if the City does not commence construction of the project by July 15, 2000, unless the Division approves a 90-day extension for good cause?

RWQCB IMPACT

CRBRWQCB. The City will be able to comply with CRBRWQCB Administrative Civil Liabilities Order No. 94-093 and Time Schedule Order No. 99-074.

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 February 2000 are as follows:

	SFY	SFY	SFY	SFY	SFY
	1999-00	2000-01	2001-02	2002-03	2003-04
	___________	__________	__________	_________	_________
Beginning Balance:	$517,435,127	$302,775,117	$132,694,161	$115,392,944	$170,666,449
Est. Repayments:[1]	74,109,438	91,176,831	101,709,851	120,022,664	145,926,377
Cap Grants:[2]	111,300,181	63,800,000[3]	63,800,000	0	0
Est. SMIF Interest:	10,000,000	6,000,000	1,000,000	1,000,000	1,000,000
Est. Disbursements:[4]	-400,869,629	-313,157,787	-174,111,068	-65,749,159	-0
Subtotal:	$311,975,117	$150,594,161	$125,092,944	$170,666,449	$317,592,826
City of Thousand Oaks 4429-120	-7,100,000	-13,000,000	-9,700,000
Templeton Comm Serv Dist 4486-110		-2,500,000
Stege Sanitary District 4665-110		-2,400,000
City of Westmorland 4705-110	-2,100,000


Balance:	$302,775,117	$132,694,161	$115,392,944	$170,666,449	$317,592,826

STAFF RECOMMENDATION

That the SWRCB adopt a resolution approving a SRF loan for construction of the proposed project. The loan shall have a repayment period of 20 years, with the first repayment due one year after completion of construction. In accordance with the February 16, 1995, revisions to the SRF Policy, the proposed resolution includes an expiration date for the preliminary loan commitment if the date for commencement of construction is not met.

_________________________________________________________________________

DRAFT January 21, 2000

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 2000- __

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

CITY OF WESTMORLAND (CITY), WESTMORLAND WASTEWATER TREATMENT PLANT, SRF PROJECT NO. C-06-4705-110

WHEREAS:

1. The State Water Resources Control Board, on February 16, 1995, adopted the Policy for Implementing the State

Revolving Fund (SRF) for construction of Wastewater Treatment Facilities, and amended it on June 18, 1998;

2. The State Water Resources Control Board, on June 17, 1999, adopted the State Fiscal Year 1999/2000 SRF Loan Program Priority List which included the Westmorland Wastewater Treatment Plant, City of Westmorland in Priority Class B;

3. The Division of Clean Water Programs has approved the project report, environmental documents, and draft revenue

program for the City project; and

4. The City adopted a Negative Declaration for the proposed project (State Clearinghouse No. 98031046) 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 approves a preliminary SRF loan commitment of $2.1 million to the City of Westmorland for construction of the Westmorland Wastewater Treatment Plant project, the repayment period is 20 years, the first payment due one year after completion of construction; and will withdraw this preliminary loan commitment if construction does not commence by July 15, 2000, unless the Division approves a 90-day 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 February 17, 2000.

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 $95,948,432 for SFY 2000 is anticipated (the final 0.38% reduction in the federal budget is not approved at this time) plus State match funds of $19,189,686. $3,837,937 is deducted for administrative costs.

[3] An EPA Capitalization Grant of $55,000,000 for SFY’s 2001 and 2002 is forecast. The 20% state match is added and the 4% administrative allowance is deducted

[4] Estimated disbursements include 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.