WHEREAS:

1. The State Water Resources Control Board (SWRCB), 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 SWRCB has approved the South Bay Water Recycling Program for the City of San Jose (City) that has an estimated cost of $130 million and provided $55 in loan funds from the SRF loan account;

3. The South Bay Water Recycling Program has 11 separate projects which have been assigned project numbers C-06-4220-110 through -190, -310, and -320;

4. The City requests funding for costs incurred prior to plans and specifications (P&S) approval for the Santa Clara Pipeline, Pump Stations/Reservoir, and Milpitas Pipeline projects (Nos. C-06-4220-130, 310, and 320) because it needed to proceed with construction after submitting the P&S in order to meet the compliance schedule stated in the "Action Plan" issued by the SFRWQCB and accepted by the SWRCB;

5. The City requests approval to sell future debt which is on parity with, or senior to, any SRF loan debt, and offers the following enhancements to offset its request for subordinate status of its SRF loans:

a. An "A" or higher rating by at least two nationally known rating agencies, and

b. A coverage ratio of 1.1 times current year SRF debt service; and

6. Approval was given to the City of San Diego on March 20, 1997, to sell future debt which is on parity with, or senior to, any SRF loan debt, based on same conditions as mentioned above.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board

1. Approves an additional $40 million in SRF loan funds to the City of San Jose for construction for the South Bay Water Recycling Program projects, with a repayment period of twenty (20) years, and the first repayment due one (1) year after completion of construction;

2. Approves the reallocation of funding committed to the South Bay Water Recycling Program, Project No C-06-4220-110 to any of the projects, as needed, within the South Bay Water Recycling Program, project numbers C-06-4220-110, -120, -130, -140, -150, -160, -170, -180 -190, -310, and -320;

3. Approves SRF funding for construction costs incurred prior to plans and specification approval for Santa Clara Pipeline, Pump Stations/Reservoir, and Milpitas Pipeline projects Nos. C-06-4220-130, 310, and 320; and

4. Approves the request of the City of San Jose to sell future local debt that is on parity with, or senior to, any SRF debt it may acquire.

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 November 18, 1997.

/s/

Maureen Marché

Administrative Assistant to the Board