1. The State Water Resources Control Board is delegated authority by the Operating Agreement to administer the SRF Loan Program.

2. Water pollution control efforts are best served by efficiently managing the use of monies in the SRF.

3. The United States Environmental Protection Agency (USEPA) has expressed concern over the buildup of large cash reserves in the states' repayment funds.

4. As of December 31, 1998, the SRF Repayment Account had a cash balance of $275.2 million and undrawn federal Capitalization Grant and State Match monies totaled $249.9 million.

5. The USEPA has issued guidance directing the states to issue SRF loans from the Repayment Account within one year of receipt of funds.

6. The Division of Clean Water Programs has evaluated alternatives and concluded that implementation of a cash flow system based on a conservative estimate of future federal financing would achieve compliance with USEPA requirements and result in greater pollution control benefits as a consequence of recycling funds at a faster pace.

7. Tri-TAC has reviewed the cash flow proposal and expressed their support for the cash flow system and the proposed raise in the funding cap to $25 million for SFY 1998/99 and 1999/00.

1. Approves the implementation of a cash flow system based on conservative estimates of future federal funding (Alternative B.1.);

2. Approves the maintenance of a minimum cash reserve of $25 million; and

3. Approves raising the funding cap to $25 million for SFY 1998/99 and 1999/2000.