REPORT TO THE CITY COUNCIL
October 19, 2017
FROM: THOMAS C. ESQUEDA, Director
Department of Public Utilities
THROUGH: MICHAEL CARBAJAL, Planning Manager
Department of Public Utilities - Utilities Planning & Engineering
BY: DEJAN PAVIC, Professional Engineer
Department of Public Utilities - Utilities Planning & Engineering
SUBJECT
Title
***RESOLUTION - Authorizing the Director of Public Utilities (Director) or designee to sign financing agreement, amendments, and certifications for funding with the State Water Resource Control Board (SWRCB) from the Cleanup and Abatement Account (CAA); authorizing the Director or designee to approve claims for reimbursement; authorizing the Director or designee to execute budget and expenditure summary; authorizing the Director or designee to sign the final release form; and, authorizing the Director or designee to sign the certification of project completion. (Subject to Mayor’s Veto) (Fresno County; City of Fresno Sphere of Influence)
Body
RECOMMENDATIONS
Staff recommends that City Council adopt the CAA funding Reimbursement Resolution for the Daleville Area Water Project and authorize the Director of Public Utilities, or designee, to sign all documents on behalf of the City.
EXECUTIVE SUMMARY
Council’s approval is sought for this essential project to move forward on a schedule that will provide safe and reliable potable water to the Daleville Area disadvantaged community. Such action will also enable completion of the required CAA grant documents.
BACKGROUND
In August 2015, the Daleville Area Water Project (Project) was initiated by Self-Help Enterprises (SHE) to provide funding through the United States Department of Agriculture (USDA) Rural Development (RD). The Project, located at the northeast corner of the intersection of Cherry and Central Avenues (and just south of Orange Center School), will connect the Daleville community to the City of Fresno water supply system to supply water to properties with dry private wells, and will deliver water that meets the drinking water standards to the residents of this disadvantaged community. The Project includes an 8-inch water distribution pipeline in Daleville and Mary Avenues, and service connections in Daleville Avenue.
The City of Fresno has undertaken this Project and accepted the USDA RD $500,000 Emergency Community Water Assistance Grant (ECWAG) funding with the understanding that there would be no City-rate-payer-funded expenditures associated with the Project. This Project is not a part of the City water users system and was not funded in the current City water rates.
However, the Daleville community is currently proceeding through a process to annex this area to the City pursuant to a requirement of Senate Bill 244 approved in 2012 pertaining to Disadvantaged Unincorporated Communities (DUCs), as the area just east of it (being developed as a future industrial complex) has been annexed to the City recently. Due to the pending potential annexation of the Daleville community to the City, the Project became ineligible for the ECWAG funding through USDA RD, as this type of funding is approved for rural communities only. As a result of this project becoming ineligible for ECWAG/RD funding, the City asked RD to de-obligate the USDA funds awarded to the City for the Project.
The City is committed to providing safe and reliable water to this disadvantaged community. The City has received a commitment from the SWRCB to fund an eligible portion of this Project through CAA in the amount of $293,800, while the reminder of the Project will be funded through the existing Orange Center School (OCS) State Revolving Fund (SRF) financing agreement. Council approved acceptance of a $2,932,600 SRF Low Interest Loan through the SWRCB for construction of the pipeline project to connect OCS and surrounding residences to the City of Fresno’s water distribution system, thereby providing reliable potable water to a disadvantaged community within the City’s Sphere of Influence which is experiencing water quality and quantity issues. This OCS project is fully funded through a SRF low interest loan at zero percent (0%) interest with principal forgiveness from the SWRCB. The off-site portion of the OCS project (14-inch and 16-inch diameter water mains in East, Central, and Cherry Avenues) has been completed in the past several months. CAA letter approving funding for the Project is attached. A table providing a breakdown of funding sources for various components of the Project is attached.
The Funding Agreement Resolution for this Project has been approved as to form by the City Attorney’s Office. Council adoption of this Resolution will enable SWRCB to proceed in issuance of an executed funding agreement.
ENVIRONMENTAL FINDINGS
A Mitigated Negative Declaration (MND) EA No. 14-013 was adopted by the Council on July 30, 2015, for the OCS component of the Project. An analysis has been performed pursuant to CEQA Guidelines §15162 to determine whether subsequent environmental review is required for the Project. Based on this analysis the following findings are made to support the determination that no subsequent environmental review is required:
1. No substantial changes are proposed in the Project which will require major revisions of the previous MND due to the involvement of new significant environmental effects, or a substantial increase in the severity of previously identified significant effects.
2. No substantial changes occur with respect to the circumstances under which the Project is undertaken which will require major revisions of the previous MND due to the involvement of new significant environmental effects, or a substantial increase in the severity of previously identified significant effects.
3. There is no new information which was not known or could not have been known at the time of the previous MND that the Project will have significant effects not discussed in the MND.
Furthermore, the Environmental Report (dated June 30, 2015) for the Project and the RD State Environmental Coordinator Concurrence (dated July 8, 2015), originally prepared for the ECWAG funding, has been deemed sufficient by SWRCB for the purposes of CAA funding. ECWAG funding Environmental Report is attached.
Furthermore, since an MND was previously adopted for this Project, the considerations set forth in CEQA Guidelines §15162(a)(3)(C) and (D), related to the adequacy and feasibility of previously adopted mitigation measures, are not applicable.
Based upon these findings, it has been determined that no further environmental documentation is required for this Project.
LOCAL PREFERENCE
Local preference was not considered because the requested action does not pertain to a bid or an award of a contract.
FISCAL IMPACT
There is no impact to the General Fund or Water Enterprise Fund debt service obligations. No costs will be borne by the City’s water utility rate payers for this project. As the Daleville Area is a severely disadvantaged community, the CAA is providing funding as a grant and the OCS project is funded through SWRCB at zero percent (0%) interest with principal forgiveness. This funding mechanism essentially provides project construction funding in the form of a grant.
Attachments:
Funding Agreement Resolution
Letter of Approval of Funding from SWRCB Cleanup and Abatement Account
Table: Breakdown of Funding Sources for Various Components of the Project
ECWAG Environmental Report and Concurrence