ITEM 11: APPROVAL OF A STATE REVOLVING FUND (SRF) LOAN FOR THE CITY OF BANNING (CITY), WASTEWATER TREATMENT FACILITY UPGRADE SRF LOAN PROJECT NO. C-06-4529-110.

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.

The Division issued Facilities Plan Approval on October 6, 1998, to the City for the Wastewater Treatment Facility Expansion. The City agreed in writing with the approval on October 6, 1998.

The City owns and operates a wastewater treatment facility that serves the City with a current population of about 27,000. The current wastewater flow to the facility is about 2.2 million gallons per day (mgd). The existing facility uses two trickling filters for biological treatment. The trickling filters have a total design treatment capacity of 3.6 mgd. However, some process units such as the primary clarifiers and sludge digester have design capacities lower than 3.6 mgd. This has resulted in the overall design treatment capacity of the facility to be rated at 2 mgd. The proposed project will bring up the overall design treatment capacity to 3.6 mgd and will provide a reserve treatment capacity of about ten years (till the year 2010). The project site is located in the City of Banning, Riverside County. The City is about 20 miles west of Palm Springs along the Interstate 10 corridor.

The estimated total loan eligible cost of the project is $6.1 million.

The City provides its own potable water supply from its groundwater wells and has indicated that it has more than enough water resources available to last over the life of the proposed project (ten years). In accordance with the SRF Policy requirements for water conservation, the City submitted an adopted water conservation plan which was approved by the Division.

The City has provided the Division with a schedule containing project milestones. These dates are included in the Division's facilities plan approval letter. In accordance with Section IX (I) of the SRF Policy, the draft resolution includes April 8, 1999, as the deadline for initiation of construction. The Division may approve up to a 90-day extension for good cause.

The City prepared a Mitigated Negative Declaration and Supporting Initial Study that were distributed to the public and circulated through the State Clearinghouse (SCH# 98061047) for the review period beginning June 12, 1998, and ending July 18, 1998. During the review period the City received comments from the South Coast Air Quality Management District regarding analysis of potential adverse air quality impacts. The City provided adequate responses to the comments. On July 28, 1998, the City Council adopted the Mitigated Negative Declaration and on July 29, the City filed a Notice of Determination with the Riverside County Clerk and the Governor's Office of Planning and Research.

The City requests the SWRCB approve a loan of $6.1 million for this project, with a 20-year repayment period and with the first SRF loan repayment due one year after completion of construction.

POLICY ISSUE: Should the SWRCB approve SRF loan funding for the proposed project, including a 20-year repayment period, with the first repayment due one year after completion of construction? Should the SWRCB, in accordance with Section IX (I) of the SRF Policy, condition this approval by requiring expiration of the preliminary loan commitment if construction is not initiated by April 8, 1999?

RWQCB IMPACT: Colorado River Basin RWQCB. The proposed project will ensure continued compliance with waste discharge requirements to protect the beneficial uses of the groundwater basin receiving the effluent discharge from the wastewater treatment plant

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 November 1998 are as follows:

* Minimum Cap. Grant expected for FFY 98-99, based on anticipated Federal Budget.

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving a SRF loan of $6.1 million from the FFY 1999 account for the proposed project, with a repayment period of 20 years, and with the first repayment due one year after completion of construction. In accordance with the February 16, 1995, revisions to the SRF Policy, the proposed resolution includes an expiration date for this preliminary loan commitment if the date of initiation of construction is not met.

DRAFT 26 October 1998

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 18, 1998, adopted the state fiscal year 1998/99 SRF Loan Program Priority List which included the Wastewater Treatment Facility Upgrade for the City in Priority Class D;

3. The Division of Clean Water Programs has approved the Facility Plan for the City's Project; and

4. The City adopted a Negative Declaration (State Clearinghouse No. 98061047) 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 of $6.1 million from the federal fiscal year 1999 account, to the City of Banning for construction of the Wastewater Treatment Facility Upgrade, with a repayment period of 20 years, and the first repayment due one year after completion of construction; and

2. Will withdraw this preliminary SRF loan commitment if the City of Banning does not initiate project construction by April 8, 1999. The Division may approve up to a 90 day 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 November 19, 1998.

Maureen Marché

Administrative Assistant to the Board