REPORT TO THE CITY COUNCIL
March 23, 2017
FROM: THOMAS C. ESQUEDA, Director
Department of Public Utilities
THROUGH: MICHAEL CARBAJAL, Planning Manager
Department of Public Utilities - Water Division
BY: GLENN A. KNAPP, PE, Professional Engineer
Department of Public Utilities - Water Division
SUBJECT
Title
RESOLUTION authorizing submission of a State Revolving Fund Low Interest Loan funding application, to the State Water Resources Control Board in the amount of $12,000,000 for construction of a 6-million gallon finished water reservoir at the City of Fresno’s Northeast Surface Water Treatment Facility (Council District 6)
Body
RECOMMENDATION
Staff Recommends that the City Council:
1. Adopt Resolution authorizing a State Revolving Fund Low Interest Loan funding application to the State Water Resources Control Board for construction of a 6-million gallon finished water reservoir at the City of Fresno’s Northeast Surface Water Treatment Facility;
2. Authorize the Director of Public Utilities or designee(s) to execute all application documents on behalf of the City.
EXECUTIVE SUMMARY
The long-term over-pumping of our groundwater aquifer and effects of recent multi-year drought conditions warrant continued and aggressive action in meeting the City of Fresno’s (City’s) goals for restoration of aquifer groundwater levels, and achievement of a balanced water resource portfolio by 2025.
Council adoption of a Resolution to submit a funding application to the State Water Resources Control Board (SWRCB) will provide a viable and effective low cost avenue to initialize construction of a 6-million gallon (6MG) finished water reservoir at the City’s 30-million gallon per day (30MGD) Northeast Surface Water Treatment Facility (NESWTF). This new finished water reservoir will provide greater operational flexibility including year-round operation capabilities, aid in stabilizing water chemistry, maintain fire flow protection requirements, and provide for future site build-out to its ultimate capacity of 60MGD to meet the City’s long-term water resource goals.
BACKGROUND
The Federal Safe Drinking Water Act Amendments of 1996 authorized the creation of a drinking water state revolving fund program. The Safe Drinking Water State Revolving Fund (Fund) program provides financial assistance in the form of federal capitalization grants to states that in turn provide low interest loans and other assistance to a public water system. Program goals include both federal and state legislative intent to provide funding for the construction of technically sound drinking water infrastructure projects which encourage energy efficiency and water conservation measures.
On January 1, 2015, Fund policy changes by the Board were implemented and now provide for potential funding of additional water infrastructure projects which include water storage, transmission, and supply pipelines. Additional changes in annual application processes include opportunities to submit water infrastructure construction funding applications on an ongoing (rolling) basis throughout the year.
Due to the aforementioned policy changes, submittal of construction funding applications at this time for a new 6MG finished water reservoir at the City’s Facility will provide the best opportunity in placing this project on the Board’s current project listing for consideration of funding.
The estimated total construction amount for this project is $12,000,000. Compared to an average standard bond interest rate of 5.5%, a typical Fund interest rate of 1.6% would result in a rate payer savings of approximately $9,411,118 over 30 years.
The Application Resolution for this project has been approved as to form by the City Attorney’s Office. Adoption of this Resolution and identification of those personnel authorized to execute the project funding agreement is necessary to proceed.
ENVIRONMENTAL FINDINGS
Authorization to submit an application for a Fund loan is not a “project” for the purposes of California Environmental Quality Act (CEQA), as it is a funding mechanism or other government fiscal activity, and does not involve commitment to any specific project which may result in a potentially significant physical impact on the environment as contemplated by CEQA Guidelines Section 15378(b).
LOCAL PREFERENCE
Local Preference was not implemented because this action does not include a bid or an award of a City construction contract.
FISCAL IMPACT
There is no impact to the General Fund. There is sufficient fiscal capacity remaining in the five-year utility rate plan that was approved by City Council on February 26, 2015, to pay for the debt service costs for this project. All future fiscal year budgets will be developed and proposed to ensure that adequate debt coverage ratios and reserve funds are maintained for all existing and additional debt that is incurred.
Attachment:
Funding Application Resolution