ITEM 5 :APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF ARVIN (CITY), WASTEWATER TREATMENT PLANT EXPANSION, SRF LOAN PROJECT NO. C-06-4408-110

DISCUSSION: In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund (SRF) for Construction of Wastewater Treat-ment 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 June 2, 1998, the Division issued Facilities Plan Approval to the City for the Wastewater Treatment Facility Expansion, and the City agreed in writing with the approval June 3, 1998.

The City is located southeast of Bakersfield, and lies within the County of Kern. The City's present wastewater treatment facilities were originally constructed in 1984 using state and federal grants funds. The City owns and operates the facility that serves a current population of about 11,000. The current wastewater flow to the facility is about 0.96 million gallons per day (mgd). The facility discharges the treated effluent by irrigating feed and fodder crops on 377 acres of land of which 100 acres belongs to the City and 277 acres are privately owned. The current wastewater flows to the plant have exceeded its design treatment capacity on several occasions resulting in violation of the Regional Water Quality Control Boards' (RWQCB) waste discharge requirements. The proposed project will expand the treatment capacity by 0.86 mgd and will provide a reserve treatment capacity for 12 years (till the year 2010).

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 also include improvements to the headworks, an additional oxidation ditch, a secondary clarifier, improved effluent pumping facilities, and additions to the laboratory and administration building. The estimated SRF loan eligible project cost including engineering and administration is $4.8 million.

The City receives its water supply from Arvin Community Services District (ACSD), a privately-held utility company which pumps water from four wells into above-ground storage tanks within the City. The City has indicated that it has enough water resources available to serve the projected population.

In accordance with the SRF Policy requirements for water conservation, the City has submitted a schedule of compliance with a due date of July 15, 1998.

The City has provided the Division with a schedule of submittal dates for 100 percent plans and specifications and other milestones for 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 draft resolution includes October 20, 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/Initial Study (ND/IS) that was distributed to the public and circulated through the State Clearinghouse (SCH# 97121116) for a 30-day review beginning December 30, 1997, and ending January 29, 1998. During the review period, the City received one comment from the Division regarding the project's conformity with the State Implementation Plan for Air Quality. The City provided an adequate response to the comment and made revisions to the ND/IS. On February 17, 1998, the City Council adopted the Negative Declaration and filed a Notice of Determination with the Kern County Clerk and the Governor's Office of Planning and Research.

The City requests the SWRCB approve a loan of $4.8 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 October 20, 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 July 1998 are as follows:

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan of $4.8 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 February 16, 1995, SRF Policy, amended on January 18, 1996, the proposed resolution includes an expiration date for this preliminary loan commitment if the date of initiation of construction is not met.

DRAFT June 29, 1998

WHEREAS:

1. The State Water Resources Control Board, on February 16, 1995, adopted the "Policy for Implementing the State Revolving Fund 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 Arvin in Priority Class C;
   
3. The Division of Clean Water Programs has approved the project report, environmental documents, and draft revenue program for the City of Arvin's project; and
   
4. The City adopted a Negative Declaration (State Clearinghouse No. 97121116) prepared for the project, which has been reviewed and considered and it has been determined that the project will not result in any significant impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board:

1. Approves a SRF loan commitment of $4.8 million to the City of Arvin 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
   
2. Will withdraw this preliminary SRF loan commitment if the City of Arvin does not initiate project construction by October 20, 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 July 23, 1998.

Maureen Marché

Administrative Assistant to the Board