ITEM 7: APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF RED BLUFF, WASTEWATER TREATMENT PLANT EXPANSION, SRF LOAN PROJECT NO. C-06-4525-110

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 January 18, 1996, 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 schedule.

On February 26, 1998, the Division issued Facilities Plan Approval to the City of Red Bluff (City) for the Wastewater Treatment Facility Expansion, and the City agreed in writing with the approval February 27, 1998.

The City is located 130 miles north of Sacramento and lies within the County of Tehama. The City's present wastewater treatment facilities were originally constructed in the 1950s. The facilities have since been enlarged and/or modified on a number of occasions. The last expansion was completed in 1977 under a Clean Water Grant. The City owns and operates the facility that serves a current population of about 14,000. The current wastewater flow to the facility is about 1.6 million gallons per day (mgd). The facility discharges the treated effluent by gravity into the Sacramento River. The current wastewater flows to the plant have exceeded its design treatment capacity on several occasions resulting in violations of Regional Water Quality Control Boards' (RWQCB) National Pollution Discharge Elimination System Permit requirements.

The City and its engineer have determined that an expansion and upgrade of the existing treatment system is the cost-effective solution for bringing the plant into compliance with RWQCBs' standards. The proposed project would include replacement of existing headworks comminutor, an additional aeration basin, secondary clarifiers, tertiary filters, solids storage basins, a digester boiler, and necessary plant electrical improvements. The proposed project will expand the treatment capacity by 0.50 mgd and provide 12 years of reserve treatment capacity until the year 2010. The estimated SRF loan eligible project cost including engineering and administration is $2.95 million.

The City provides its own water supply from ground water wells and has indicated that it has enough water resources available over the life of the proposed project (20 years). In accordance with the SRF Policy requirements for water conservation, the City submitted a Urban Water Management Plan for local adoption of a water conservation program.

The City has submitted 100 percent plans and specifications and schedule for other milestones of the wastewater treatment 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 SRF Policy, the resolution includes June 3, 1998, as the deadline for initiation of construction. The Division may approve up to a ninety (90) day extension for good cause.

The City prepared a Negative Declaration and supporting Initial Study which were distributed to the public and circulated through the State Clearinghouse (SCH # 96092040) for a 30 day review beginning September 18, 1996, and ending October 18, 1996. During the review period, the City received comment letters from two interested parties concerning noise, odors, and nuisance. The City provided adequate response to all comments received during the review period assuring the interested parties that their concerns would be addressed. On December 23, 1996, the City Council adopted the Negative Declaration. On January 2, 1997, the City filed a Notice of Determination with the Tehama County Clerk. The Division will file an additional Notice of Determination with the Governor's Office of Planning and Research when the project is approved for an SRF loan by the SWRCB.

The USDA Rural Development's Rural Utilities Service will participate in funding and has published a Finding of No Significant Impact for the project pursuant to the National Environmental Policy Act. The Rural Utilities Service complied with all Federal Environmental laws, finding the project to be exempt from review by the State Historic Preservation Officer (SHPO) pursuant to a Programmatic Agreement dated November 1, 1995, between Rural Utilities Service and the SHPO. The U.S. Environmental Protection Agency determined that this exemption does not apply to the SWRCB; therefore, the Division provided cultural resources documents for SHPO review. If SHPO clearance includes any special conditions, such conditions will be contained in the loan contract for this project.

The City requests the SWRCB approve a loan of $2.95 million for this project with a twenty (20) year repayment period and with the first loan repayment due one (1) year after completion of construction.

POLICY ISSUE: Should the SWRCB approve SRF loan funding for the proposed project, including a twenty (20) year repayment period, with the first repayment due one (1) year after completion of construction? 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 construction is not initiated by June 3, 1998? The City has already provided the Division with plans and specifications.

RWQCB IMPACT: None

FISCAL IMPACT: According to SWRCB Resolution No. 97-001 (Approval of a Staff Proposal to Better Manage the SRF Repayment Account), the SWRCB may approve preliminary loan commitments against the current FFY account and against 125 percent of future repayment funds based on scheduled loan dates.

The SRF account balances, anticipated repayment amounts, and project approvals under consideration by the SWRCB in May 1998 are as follows:

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF preliminary loan commitment of $2.95 million for the proposed project, with a repayment period of twenty (20) years, and with the first repayment due one (1) year after completion of construction. In accordance with the Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the date of initiation of construction is not met.

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 revised it on January 18, 1996;

2. The State Water Resources Control Board, on September 18, 1997, adopted the FFY 1998 SRF Loan Program Priority List which included the Wastewater Treatment Facility Expansion for City of Red Bluff (City) in Priority Class C;

3. The Division of Clean Water Programs (Division) has approved the project report, environmental documents, and draft revenue program for the City's project; and

4. The City adopted a Negative Declaration (State Clearinghouse No. 96092040) prepared for the project which has been reviewed and considered and it has been determined that the project will not result in any significant environmental impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Approves a SRF preliminary loan commitment of $2.95 million to the City for the construction of the Wastewater Treatment Facility Expansion, with a repayment period of twenty (20) years, and the first repayment due one (1) year after completion of construction; and

1. Will withdraw this SRF preliminary loan commitment if the City does not initiate project construction by June 3, 1998. The Division may approve up to a ninety (90) days extension for good cause.

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 27, 1998.

Maureen Marché

Administrative Assistant to the Board