STATE WATER RESOURCES CONTROL BOARD

WORKSHOP SESSION--DIVISION OF WATER QUALITY

APRIL 14, 1999

ITEM 10: CONSIDERATION OF APPROVAL OF A RESOLUTION TO PROVIDE A STATE REVOLVING FUND LOAN OF $34 MILLION OVER FIVE FISCAL YEARS TO THE NAPA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT FOR THE NAPA RIVER/NAPA CREEK FLOOD PROTECTION AND ESTUARY RESTORATION PROJECT (LOAN NO. C-06-6061-110)

DISCUSSION: The Napa County Flood Control and Water Conservation District (District) applied for a State Revolving Fund (SRF) loan for the Napa River/Napa Creek Flood Protection and Estuary Restoration Project (Project). The goal of the Project is to implement an innovative alternative to traditional flood protection that will include water quality and estuary enhancement benefits. The Project will replace the existing system of levees, floodwalls, and riprap with a meandering river and estuary with tidal marshes and wetlands.

The Project will encompass approximately seven miles of river valley from Trancas Street north of the City of Napa (City) to Highway 29 to the south. The Project will also focus on Napa Creek which drains into the Napa River (River) near the oxbow in the City. From this point downstream to San Pablo Bay is the River estuary. Upstream from this point, the River is fresh water.

The District proposes to buy out and remove homes and businesses in the floodplain to allow the River to widen or meander during high flows, thus creating a more natural riverine system. Most of the City's levees will be removed or set back. The District intends to own all of the land within the Project boundaries. These lands will be preserved as is or converted into wetlands, tidal or tiered marshes, and riparian habitat.

The River has been classified as an impaired water body due to excessive sedimentation, nutrients, and bacteria. The Project will enhance water quality by returning the River, Napa Creek, and the estuary to a more natural state. This will increase the quantity and quality of wetlands and improve the riparian vegetation. The wetlands will create a more efficient system of nutrient removal, and the riparian vegetation will help stabilize the river banks. In addition, dry weather runoff and the first flush from storm events from the urban area will be filtered through wetlands or tiered marshes, thus removing significant concentrations of pollutants before reaching the River. The estuary will be enhanced and expanded by removing the existing system of levees that separate the River channel from its floodplains and marshlands and managing the estuary for habitat development. Staff has determined that the water quality and estuary enhancement portions of the Project qualify for SRF loan funding as nonpoint source and estuary enhancement projects.

The Project is consistent with the Comprehensive Conservation and Management Plan (CCMP) of the San Francisco Estuary Project. Actions called for in the CCMP that are supported by the Project include:

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 Federal Fiscal Year (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 April 1999 are as follows:
 
FFY FFY FFY FFY FFY FFY
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04
SRF Account Repayment Repayment Repayment Repayment Repayment
Repayments per Res. 99-011: $67,037,595 $76,374,255 $85,349,780 $85,351,354 $85,351,354 $85,351,354
125% Repayments: 95,467,819 106,687,225 106,689,193 106,689,193 106,689,193
FFY 98 Carryover: 28,133,901
FFY 98 Fed. Cap. Grant: 22,146,937
FFY 99 Fed. Cap. Grant:  92,461,850
CWG funds trans. per Res. 99-011: 8,161,062
WQCF funds trans. per Res. 99-011 1,632,212
1996 Bond Funds: 39,825,821
SMIF Interest (Estimated) 12,000,000
Local Match equivalent: 15,837,226
Previous Commitments: 255,337,180 93,280,341 74,135,205 65,810,000 48,036,000 0
Subtotal: $31,899,423 2,187,478 32,552,020 40,879,193 58,653,193 106,689,193
Santa Ana River W. P. A. 4452-110 $5,000,000 $01 $10,000,000 $6,700,000
Adopt-a-Watershed 6059-110 $600,000
Napa River F.C. & W.C.D. 6061-110 $7,000,000 $02 17,000,000 $5,000,000 $5,000,000
Balance: $19,299,423 $2,187,478 $5,552,020 $29,179,193 $53,653,193 106,689,193

1.Construction schedule for Reaches I, II, III, and V will require a commitment of funds during FFY 1999-00. Adequate funds are not currently available from projected repayments during that FFY. However, the Division is working on a plan to make funding needed for construction available during this time. The amount needed in FFY 1999-00 will be funded either from these additional funds if they become available, or, from the Capitalization Grant expected to be received from the USEPA. An equal amount will be deducted from the FFY 2000-01 and 2001-02 repayment commitments shown in this schedule.

2. The construction schedule for this project will require a commitment of $10 million during FFY 1999-00. Adequate funds are not currently available from projected repayments during that FFY. The amount needed in FFY 1999-00 will be funded from the Capitalization Grant expected to be received from the USEPA and an equal amount will be deducted from the FFY 2000-01 repayment commitments shown in this schedule.

RWQCB IMPACT: Yes, San Francisco Regional Water Quality Control Board.

STAFF RECOMMENDATION: That the SWRCB:

1. Approve updating the statewide SRF Project Priority List for the: FY 1998-99 to include the Project and

2. Approve an SRF loan of $34 million over five FYs for the Project with approval of $10 million in FY 1999-00 subject to SWRCB receiving a Federal Capitalization Grant or another source of funds becoming available for that fiscal year.

That the approvals should be contingent upon:

  1. The District entering into an SRF loan agreement with the SWRCB by April 2000;
  2. The District adopting and certifying the CEQA documentation prior to loan agreement; and
  3. The SRF loan agreement containing a condition that the District indemnifies the SWRCB from any liability resulting from contaminated soils on any parcels purchased with SRF funds.
  4. The District providing an annual report to the SWRCB evaluating the effectiveness of the Project in removing sediments, nutrients, and other nonpoint source pollutants caused by urban runoff and upstream agricultural activities.
This report shall meet the following criteria:

APRIL 5, 1999 DRAFT

STATE WATER RESOURCES CONTROL BOARD
RESOLUTION NO. 99-
APPROVAL OF A RESOLUTION TO PROVIDE A STATE REVOLVING FUND LOAN OF $34 MILLION OVER FIVE FISCAL YEARS TO THE NAPA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT FOR THE NAPA RIVER/NAPA CREEK FLOOD PROTECTION AND ESTUARY RESTORATION PROJECT
(LOAN NO. C-06-6061-110)

WHEREAS:

1. The Napa County Flood Control and Water Conservation District (District) has requested a State Revolving Fund (SRF) loan of $34 million over five fiscal years (FYs) for the Napa River/Napa Creek Flood Protection and Estuary Restoration Project (Project).

2. The Project will enhance water quality by improving sediment transport and nutrient removal in the Napa River system.

3. The Project will create over 700 acres of habitat for a variety of aquatic plants, animals, and waterfowl.

4. The District is scheduled to complete a Final Environmental Impact Report to comply with the California Environmental Quality Act (CEQA) in April 1999.

5. The Project qualifies for an SRF loan under both sections 319 and 320 of the Federal Clean Water Act.

6. The Project is not currently on the SRF Project Priority List for FY 1998-99.

7. There may be soil contamination on some parcels purchased through the SRF.

THEREFORE, BE IT RESOLVED THAT:

The State Water Resources Control Board (SWRCB):

1. Approves updating the statewide SRF Project Priority List for the FY 1998-99 to include the Project and

2. Approves an SRF loan of $34 million over five FYs for the Project with approval of $10 million in FY 1999-00 subject to SWRCB receiving a Federal Capitalization Grant or another source of funds becoming available for that fiscal year.

The approvals are contingent upon:

1. The District entering into an SRF loan agreement with the SWRCB by April 2000;

2. The District adopting and certifying the CEQA documentation prior to loan agreement; and

  1. The SRF loan agreement containing a condition that the District indemnifies the SWRCB from any liability resulting from contaminated soils on any parcels purchased with SRF funds.
  2. The District providing an annual report to the SWRCB evaluating the effectiveness of the Project in removing sediments, nutrients, and other nonpoint source pollutants caused by urban runoff and upstream agricultural activities.
This report shall meet the following criteria:

CERTIFICATION

The undersigned, Administrative Assistant to the SWRCB, 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 April 29, 1999.

Maureen Marché

Administrative Assistant to the Board