ITEM 9

SUBJECT

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF RIVERBANK (CITY), WASTEWATER TREATMENT PLANT UPGRADE AND EXPANSION, SRF LOAN PROJECT NO. C-06-4521-110

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 last 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 March 29, 2000, the Division issued Facilities Plan Approval to the City for the Wastewater Treatment Plant Upgrade and Expansion project, and the City agreed in writing with the approval March 31, 2000.

The City is located five miles north of City of Modesto and south of the Stanislaus River, and lies within the County of Stanislaus. The City’s present wastewater treatment facilities were originally constructed in 1971, and in late 1974 and early 1975 some major improvements for additional capacity were completed with Clean Water Grant Funds. The City owns and operates the facility that serves a current population of about 14,800. The current wastewater flow to the facility is a combination of domestic and seasonal high strength wastewater amounting to about 1.71 million gallons per day (mgd) domestic and 2.25 mgd seasonal. The facility discharges the treated effluent to a series of holding ponds for additional polishing prior to disposal via percolation. The current wastewater flows to the plant have exceeded its design treatment capacity on several occasions and, in addition, the plant is not capable of achieving dissolved oxygen (DO) requirements in the disposal ponds. Failure to meet DO content in the ponds results in violations of the Central Valley Regional Water Quality Control Boards’ (CVRWQCB) waste discharge requirements. The proposed project will add new piping, surface aerators, a new motor control center and necessary modifications to the disposal ponds. The total estimated SRF loan eligible project cost for this contract including engineering and administration allowances is $0.7 million. Due to the limit for disposal capacity on the site, the proposed project provides a reserve treatment capacity for 12 years from the date of initiation of construction.

The City and its engineer have determined that the construction of the proposed project is the cost-effective solution to meet the future growth needs in the community and to comply with CVRWQCB Waste Discharge Requirements.

The City receives its water supply from seven municipal water wells within the City. Groundwater is chlorinated periodically prior to distribution. Static groundwater levels are typically at 60 to 70 feet with pumping depths between 150 to 175 feet. As potable water demands increase in the future, the City plans additional wells. The City has indicated that it has enough water resources available to serve the projected population.

In accordance with the Policy requirements for water conservation, the City is a signatory to the “Memorandum of Understanding Regarding Urban Water Conservation in California”.

The City prepared an Initial Study/Negative Declaration (IS/ND) for the proposed project dated November 21, 1996, which was distributed to the public and circulated through the State Clearinghouse (SCH# 1996112074) for review from November 22, 1996, through January 6, 1997. During the review period the City received three comment letters. The City provided adequate responses to the comments in the Final IS/ND. The City approved the project and adopted the IS/ND on February 24, 1997. The City filed a Notice of Determination with the Riverbank City Clerk and the Governor’s Office of Planning and Research on March 25, 1997.

The City has provided the Division with a schedule of submittal dates for 100 percent plans and specifications and other milestones for the construction phase of the proposed project. These submittal dates are contained in the milestone schedule in the Division’s facility plan approval letter. In accordance with Section IX (J) of the Policy, the draft resolution includes March 10, 2001, as the deadline for initiation of construction. The Division may approve up to a 90-day extension for good cause.

The City requests the SWRCB approve a loan commitment of $0.7 million for this project with a 20 year repayment period and with the first 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 (J) of the Policy, condition this approval by requiring expiration of the preliminary loan commitment if construction is not initiated by March 10, 2001?

RWQCB IMPACT

CVRWQCB. The proposed upgrade and expansion will provide the capability for meeting the Waste Discharge Requirements, WDR Order No. 94-100.

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 $0.7 million for the 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 16, 1995, SRF Policy, amended on June 18, 1998, the proposed resolution includes an expiration date for this preliminary loan commitment if the date of initiation of construction 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 RIVERBANK (CITY), WASTEWATER TREATMENT

PLANT UPGRADE AND EXPANSION

SRF LOAN PROJECT NO. C-06-4521-110

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 17, 1999, adopted the State Fiscal Year 2000 SRF Loan Program Priority List which included the City’s Wastewater Treatment Plant Upgrade and Expansion in Priority Class D;

3. The Division of Clean Water Programs has approved the facilities plan for the City’s project; and

4. The City adopted a Negative Declaration (State Clearinghouse No. 1996112074) 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 commitment of $0.7 million to the City of Riverbank for the construction of the Wastewater Treatment Plant Upgrade and Expansion, 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 of Riverbank does not initiate project construction by March 10, 2001. 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.