STATE WATER RESOURCES CONTROL BOARD
BOARD MEETING SESSION – DIVISION OF CLEAN WATER PROGRAMS
SEPTEMBER 16, 1999

ITEM 4

SUBJECT

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF SAN DIEGO (CITY) FOR CONSTRUCTION OF THE SOUTH BAY RECLAMATION SEWER AND PUMP STATION, SRF LOAN PROJECT NOS. C-06-4650-110 AND C-06-4650-210

DISCUSSION

In accordance with the State Water Resources Control Board's (SWRCB) Policy for Implementing the State Revolving Fund for Construction of Wastewater Treatment Facilities (Policy), adopted on February 16, 1995, and amended on June 18, 1998, 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.

On December 30, 1998, the Division issued Facilities Plan Approval to the City for the construction of the South Bay Reclamation Sewer and Pump Station and the City agreed in writing with the approval on January 27, 1999.

The City of San Diego is located in Southern California. The City’s Metropolitan Wastewater Department (MWWD) is responsible for maintaining, upgrading, and expanding the Metropolitan Sewerage System (Metro System). The Metro System treats approximately 190 million gallons per day of wastewater generated by a service area population of about 1.9 million.

In 1989, the MWWD prepared a framework report which studied alternatives for upgrades to the Metro System. The selected alternative project produced by this study included a new treatment plant in the South Bay. At the time, the City was applying for a waiver from the secondary treatment requirement at the Point Loma Wastewater Treatment Plant, under Section 301(h) of the Federal Clean Water Act. The framework report assumed that the Point Loma plant might be required to upgrade to full secondary treatment, thereby reducing treatment capacity and requiring construction of several other treatment plants throughout the Metro System service area including the South Bay.

In 1992, under the direction of the City Council, the MWWD suspended work on this plan and developed the "Consumers Alternative" which assumed that Point Loma Plant would be retained at advanced primary treatment.

With the uncertainty of the Section 301(h) waiver application outcome and the need to accommodate inevitable growth in the South Bay, the MWWD conducted a detailed capacity analysis of the South Metro Interceptor (SMI) which conveys wastewater to Point Loma. The analysis determined that the SMI would require improvements to increase conveyance capacity, and that it was more cost-effective to construct a new plant in the South Bay and divert flow from the SMI than to construct the needed improvements.

The SWRCB has already approved a SRF loan for the construction of the South Bay Water Reclamation Plant (SBWRP). The City now requests a preliminary loan commitment for the South Bay Reclamation Sewer and Pump Station project. This project consists of construction of a pump station at Grove Avenue and Oro Vista Road in the southern metropolitan area, and a pressure main influent pipeline to the SBWRP. The pump station and pipeline would transport diverted raw wastewater flow from the SMI and route it south to the SBWRP for treatment and disposal. The project would relieve the SMI and the Point Loma plant of the need to transport and treat future flows beyond their capability.

The City meets about 75 percent of its water needs through purchases of imported water from the San Diego County Water Authority (Water Authority). The remainder of the water supply demand is provided by local surface water supplies and recycled water. The Water Authority is a member agency of the Metropolitan Water District of Southern California, which imports water from the State Water Project and the Colorado River. Both the Water Authority and the Metropolitan Water District have adopted long term plans designed to ensure the adequacy and reliability of water supplies to their service areas beyond the next 20 years. The City is a signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California", and therefore meets the SRF Policy requirements for water conservation.

The City prepared a Mitigated Negative Declaration/Initial Study which was distributed to the public and circulated through the State Clearinghouse (SCH# 97091084) for review from September 29, 1997, through October 29, 1997. During the review period, the City received comment letters from local, state, and federal agencies, and three individuals. The City provided adequate responses to all comments received and made revisions to the Mitigated Negative Declaration/Initial Study. The City approved the Mitigated Negative Declaration/Initial Study December 2, 1997. The City filed a Notice of Determination with the San Diego County Clerk and the Governor’s Office of Planning and Research on December 3, 1997.

The estimated SRF loan eligible project cost is $17.5 million. The City requests the SWRCB approve a loan of $17.5 million for this project and agrees to pay back the loan in accordance with the SRF Policy.

POLICY ISSUE

Should the SWRCB approve SRF loan funding for the proposed project, including a 20 year period for repayment, with the first repayment due one year after completion of construction?

RWQCB IMPACT

San Diego Regional Water Quality Control Board. The project will relieve the SMI system and the Point Loma treatment plant which are nearing their design capacity. This project is therefore consistent with the local water quality management plan in that it enables the City to meet its waste discharge requirements.

FISCAL IMPACT

The SWRCB adopted Resolution No. 99-40 on May 20, 1999, which changed the method for determining the amount of funding available for new loans to a system based on the availability of cash to make disbursements to the project under consideration by the SWRCB. A minimum cash balance of $25,000,000 will be maintained. The SRF account balances, anticipated repayment amounts, and project approvals under consideration by the SWRCB in September 1999 are as follows:
 
 
SFY
SFY
SFY
SFY
SFY
 
1999-00
2000-01
2001-02
2002-03
2003-04
 
___________
__________
__________
_________
_________
Beginning Balance:
$543,088,506
$247,623,915
$68,876,465
$36,327,516
$98,773,519
Est. Repayments*:
75,640,609
93,418,584
113,012,689
133,275,004
137,567,168
Cap Grants**:
55,000,000
0
0
0
0
SMIF Interest:
10,000,000
6,000,000
1,000,000
1,000,000
1,000,000
Est. Disbursements***:
-422,927,700
-246,166,034
-121,561,639
-57,529,000
-0
Previous SFY 2000 commitments:
0
City of Vacaville 4610-120  
-25,000,000
-25,000,000
-14,300,000
 
City of San Diego 4650-110
-6,840,000
-4,560,000
     
City of San Diego 4650-210
-3,660,000
-2,440,000
     
City of San Diego 4690-110
-1,150,000
       
Sacto. Valley Open Space 6055-110
-1,527,500
       
Balance:
$247,623,915
$68,876,465
****$36,327,516
$98,773,519
$237,340,687

 * Est. repayments include repayments from existing loans and from loans expected to be executed in the next few years for projects with existing commitments.

** An EPA Capitalization Grant of $55,000,000 for SFY 2000 is anticipated.  However, the federal budget is not approved at this time

*** Estimated disbursements includes disbursements remaining on existing loans as well as disbursements anticipated on loans executed for projects with existing commitments.  The Division will revise the estimated disbursements total each month as cash draw forecasts are updated.

**** To maintain a minimum reserve of $25,000,000, only $11,327,516 remains for commitment to projects that will draw funds prior to FY 2002.  If EPA Capitalization Grants are received in SFY 2001 or SFY 2002, additional commitments may be made.

STAFF RECOMMENDATION

That the SWRCB adopt a resolution approving a SRF loan of $17.5 million for the proposed project, with a period of 20 years, and with the first repayment due one year after completion of construction.



DRAFT August 23, 1999
 
 


STATE WATER RESOURCES CONTROL BOARD
RESOLUTION NO. 99-___

APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF SAN DIEGO (CITY) FOR CONSTRUCTION OF THE SOUTH BAY RECLAMATION SEWER AND PUMP STATION, SRF LOAN PROJECT NOS. C-06-4650-110 AND C-06-4650-210


 






WHEREAS:

1.  The State Water Resources Control Board (SWRCB), on February 16, 1995, adopted the "Policy for Implementing the State Revolving Fund for Construction of Wastewater Treatment Facilities," and revised it on June 18, 1998;

2.  The SWRCB, on June 2, 1999, adopted the Federal Fiscal Year (FFY) 1999/2000 SRF Loan Program Priority List which included the City’s South Bay Reclamation Sewer and Pump Station projects in Priority Class B;

3.  The Division of Clean Water Programs (Division) has approved the facilities plan;

4.  The City is signatory to the "Memorandum of Understanding Regarding Urban Water Conservation in California"; and

5.  The City adopted a Mitigated Negative Declaration (State Clearinghouse No. 97091084) prepared for the project, which has been reviewed and considered and it has been determined that the project will not result in significant impacts.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board approves a SRF loan of $17.5 million to the City of San Diego for the construction of the South Bay Reclamation Sewer and Pump Station. The repayment period shall be 20 years, and the first repayment due one year after completion of construction.
 
 


CERTIFICATION


 






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 September 16, 1999.

______________________________
Maureen Marché
Administrative Assistant to the Board