ITEM 3: CONSIDERATION OF APPROVAL OF A RESOLUTION TO PROVIDE A STATE REVOLVING FUND (SRF) LOAN TO THE SAN LUIS WATER DISTRICT FOR THE IRRIGATION SYSTEM IMPROVEMENT PROJECT (LOAN NO. C-06-6014-11)

DISCUSSION: The San Luis Water District (District) was approved for a $5.9 million SRF loan on February 22, 1996 (State Water Resources Control Board [SWRCB] Resolution No. 96-12) for an Irrigation System Improvement Project (Project). A contract for only $5 million was executed with the District because of the funding cap in Federal Fiscal Year (FFY) 1996. The District has exhausted all of these loan funds and has applied for an additional $2.5 million SRF loan.

The loan will provide funds for the purchase of irrigation equipment that will include gated pipe, drip systems, tailwater return systems, and sprinkler systems. The equipment will be leased to the growers for conversion from furrow and siphon tube irrigation systems. The lease payments will be the revenue to repay the loan. The Project has received strong support among the growers in the District.

The Project will provide water conservation, reclamation, and irrigation efficiency benefits. The irrigation equipment will also decrease the volume of subsurface drainage on lands high in selenium and salinity concentrations.

The Project will also help the Charleston Drainage District, which is part of San Luis Water District and is a member of the San Luis and Delta-Mendota Water Authority (Authority). The Authority entered into a Use Agreement with the U.S. Bureau of Reclamation on November 3, 1995 for interim use of the San Luis Drain to discharge subsurface drainage water into the San Joaquin River. A condition of the Use Agreement is that the Authority meets specific monthly load values for selenium and salinity in the San Joaquin River. The reduction in volume of subsurface drainage flows will help the Authority manage selenium and salinity loading to the San Joaquin River.

The Project is exempt from the California Environmental Quality Act under Section 15302(c) of Title 14 of the California Code of Regulations.

POLICY ISSUE: Should the SWRCB approve an SRF loan for $2.5 million to the District for the Project to increase the total loan amount to $7.5 million for the Project?

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 January 1999 are as follows:

* Minimum Cap. Grant expected for FFY 99, based on anticipated Federal Budget.

RWQCB IMPACT: Yes, Central Valley Regional Water Quality Control Board.

STAFF RECOMMENDATION: That the SWRCB approve an SRF loan for $2.5 million to the District for the Project to increase the total loan amount to $7.5 million for the Project.

December 28, 1998

WHEREAS:

1. The San Luis Water District (District) was previously approved for a $5.9 million SRF loan for an Irrigation System Improvement Project (Project) under State Water Resources Control Board (SWRCB) Resolution No. 96-12.

2. Due to a $5 million cap on SRF loans for Federal Fiscal Year 1996, the contract was executed for $5 million.

3. The District has exhausted the $5 million loan for the project and has requested an additional $2.5 million.

4. The Project will promote irrigation efficiency, improved management, and water reclamation and conservation practices for the entire San Luis Water District.

5. The Project will reduce the volume of drainage water high in selenium and salinity concentrations in the Charleston Drainage District, a member of the San Luis and Delta-Mendota Water Authority (Authority). This drainage water reduction will provide the Authority greater flexibility in managing drainage flows. This flexibility may help the Authority meet the monthly standards for selenium and salinity loading to the San Joaquin River stipulated by the Use Agreement with the U.S. Bureau of Reclamation for interim use of the San Luis Drain.

6. The SWRCB finds that the Project is exempt from the provisions of the California Environmental Quality Act Guidelines under Section 15302(c) of Title 14 of the California Code of Regulations.

THEREFORE BE IT RESOLVED THAT:

The SWRCB approves an SRF loan for $2.5 million to the District for the Project to increase the total loan amount to $7.5 million for the Project.

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 January 21, 1999.

______________________________

Maureen Marché

Administrative Assistant to the Board