SUBJECT

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF SACRAMENTO (CITY) TAHOE PARK/BROADWAY PARALLEL SEWER PROJECT; SRF LOAN PROJECT NO. C-06-4653-110

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 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) draft revenue program; and (4) water conservation plan.

The Division issued Facilities Plan Approval on March 28, 2000, to the City for the Tahoe Park/ Broadway Parallel Sewer Project. The City agreed in writing with the approval on March 29, 2000.

The City’s Combined Sewer System (CSS) encompasses approximately 7,000 acres including Downtown, East Sacramento, and Land Park. The CSS does not have sufficient hydraulic capacity. During moderate and heavy rainfall events, areas of the CSS experience outflows of combined wastewater and localized flooding. Due to outflows, there is a possible public health threat through contact with the combined wastewater. This project will enable the CSS to better handle such rainfall events and reduce or prevent overflows.

The Central Valley Regional Water Quality Control Board (CVRWQCB) adopted Waste Discharge Requirements (WDR) Order No. 96-090 for the City on March 22, 1996. The City is also currently subject to the requirements of Cease and Desist Order No. 90-198 which directs the City to undertake a plan of action to prevent outflows and localized flooding.

The proposed project will provide additional pipeline capacity, and storage for wet weather flows within the CSS, along various routes in the Tahoe Park/Broadway area of the City. The proposed project will consist of the replacement of some existing sewers and the construction of some parallel sewers, whichever is more cost-effective to gain transmission and storage capacity in the system. The estimated construction cost of the project is $5.282 million. The estimated total eligible construction cost including allowances is $6.2 million.

The City prepared an Initial Study and tiered Mitigated Negative Declaration (IS/MND), which was distributed to the public and circulated through the State Clearinghouse (SCH# 1999082105) for review from August 30, 1999, through September 29, 1999. The MND is tiered from the City’s CSS Rehabilitation and Improvement Project and 1996 Program EIR. During the review period the City received two comment letters. The City provided adequate responses to the comments and revised mitigation measures in the Final IS/MND. The City approved the project and adopted the IS/MND and a Mitigation Monitoring Plan on October 26, 1999. A Notice of Determination was filed with the Sacramento County Clerk and the Governor’s Office of Planning and Research on November 2, 1999.

A schedule containing project milestone dates is included in the Division’s facilities plan approval letter. In accordance with Section IX (I) of the SRF Policy, the draft resolution includes the date of June 20, 2000, as the deadline for initiation of construction. The Division may approve up to a 90-day extension for good cause.

The City has applied for the full estimated eligible SRF loan amount of $6.2 million for the project with a 20-year repayment period and with the first SRF loan repayment due one year after completion of construction.

POLICY ISSUE

Should the SWRCB approve 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, in accordance with Section IX (I) of the SRF Policy, condition this approval by requiring expiration of the preliminary loan commitment if construction of the project is not initiated by June 20, 2000?

RWQCB IMPACT

The CVRWQCB has prescribed WDR Order No. 96-090 for the City and the proposed project is another step to eliminating overflows and flooding within the CSS and toward compliance with the 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 March 2000 are as follows:

	SFY	SFY	SFY	SFY	SFY
	1999-00	2000-01	2001-02	2002-03	2003-04
	___________	__________	__________	_________	_________
Beginning Balance:	$518,269,168	$332,032,613	$111,838,184	$83,080,440	$113,761,167
Est. Repayments:[1]	74,687,038	92,051,848	104,374,575	127,481,852	151,166,163
Cap Grants:[2]	111,339,383	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]	-382,262,977	-359,146,277	-197,932,319	-97,801,125	-6,601,507
Subtotal:	$332,032,613	$134,738,184	$83,080,440	$113,761,167	$259,325,822

City of Riverbank 4521-110		-700,000
City of Sacramento 4653-110		-6,200,000
Cal St Coastal Conservancy 6065-110		-16,000,000


Balance:	$332,032,613	$111,838,184	$83,080,440[5]	$113,761,167	$259,325,822

STAFF RECOMMENDATION

That the SWRCB adopt a resolution approving a SRF loan of $6.2 million for the City’s project, with a repayment period of 20 years, and with the first repayment due one year after completion of construction. In accordance with the SRF Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the date of initiation of construction of the project is not met.

DRAFT April 24, 2000

STATE WATER RESOURCES CONTROL BOARD

RESOLUTION NO. 2000 -

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN

FOR THE CITY OF SACRAMENTO (CITY)

TAHOE PARK/BROADWAY PARALLEL SEWER PROJECT

SRF LOAN PROJECT NO. C-06-4653-110

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 18, 1999, adopted the State Fiscal Year 1999/2000 SRF Loan Program Priority List which included the Tahoe Park/Broadway Parallel Sewer Project for the City in Priority Class B;

3. The Division of Clean Water Programs (Division) has approved the Facility Plan for the City’s Project; and

4. The City adopted a Mitigated Negative Declaration (State Clearinghouse No. 1999082105) for the proposed project which has been reviewed and considered, and it has been determined that the project will not result in any significant negative environmental impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Approves a SRF loan of $6.2 million for the City’s Tahoe Park/Broadway Parallel Sewer Project, with a repayment period of up to 20 years, and the first repayment due one year after completion of construction; and

2. Will withdraw this preliminary SRF loan commitment if the City does not initiate construction of the project by June 20, 2000. The Division may approve up to 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 May 18, 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 $95,982,227 for SFY 2000 is anticipated plus State match funds of $19,196,445. $3,839,289 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 as 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.

[5] The cash balance on June 30, 2002, is estimated to be $58,080,440 above the level needed to maintain a $25,000,000 reserve.