HomeMy WebLinkAboutStaff Report 3.H 09/14/2015DATE: September 14, 2015
Agenda Item #3.H
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St. John, F.ASCE — Director, Public Works & Utilities
Leah G. Walker, P.E. — Environmental Services Manager
SUBJECT: Resolution Authorizing the Submittal of a Financial Assistance Application to the
State Water Resources Control Board for the Design and Construction of the
Expansion of the Recycled Water Treatment and Distribution System;
Authorizing the City Manager to Execute All Necessary Application Documents
and to Negotiate and Execute a Financial Assistance Agreement with the State
Water Resources Control Board and Any Amendments or Change Orders
Thereto; and Authorizing the Director Of Public Works and Utilities Department,
or His Assigned Representative, to Administer the Financial Assistance
Agreement, to Submit Invoices For Reimbursement, to Certify Financing
Agreement Disbursements on Behalf of the City of Petaluma, to Certify that the
City of Petaluma Has and Will Comply With All Applicable State and Federal
Statutory and Regulatory Requirements Related to Any Financing or Financial
Assistance Received from the State Water Resources Control Board
RECOMMENDATION
It. is recommended that the City Council adopt the attached Resolution Authorizing the Submittal
of a Financial Assistance Application to the State Water Resources Control Board for the Design
and Construction of the Expansion of the Recycled Water Treatment and Distribution System;
Authorizing the City Manager to Execute All Necessary Application Documents and to
Negotiate and Execute a Financial Assistance Agreement with the State Water Resources
Control Board and Any Amendments or Change Orders Thereto; and Authorizing the Director
Of Public Works and Utilities Department, or His Assigned Representative, to Administer the
Financial Assistance Agreement, to Submit Invoices For Reimbursement, to Certify Financing
Agreement Disbursements on Behalf of the City of Petaluma, to Certify that the City of Petaluma
Has and Will Comply With All Applicable State and Federal Statutory and Regulatory
Requirements Related to Any Financing or Financial Assistance Received from the State Water
Resources Control Board.
BACKGROUND
Following the adoption by the City of Petaluma of the Recycled Water Master Plan in 2004, the
General Plan in 2008, and the certification of the Recycled Water Environmental Impact Report
in 2008, the Public Works and Utilities Department staff and consultants have pursued studies,
engineering, and funding for the next phases of the recycled water expansion program.
The Recycled Water Master Plan and subsequent studies have projected recycled water demands
for urban and agriculture uses that exceed the production capacity of the Ellis Creek Water
Recycling Facility and the existing "purple pipe" distribution system. In order to take advantage
of reuse opportunities, reduce potable water demands, and expand the City's wastewater disposal
options, the recycled water expansion program includes increasing tertiary treatment capacity
and expanding the urban and agricultural "purple pipe" distribution system. The tertiary filtration
and ultraviolet (UV) disinfection system would increase from 4.8 to 7.8 million gallons per day
(mgd); the urban distribution system would extend along the City's eastern boundary and within
the business park adjoining the treatment facility including the Kaiser campus, and expansion of
the agricultural distribution system along Lakeville Highway southeast of the treatment facility.
Refer to Attachment 2 for a diagram of the proposed expansion program.
To assist in funding this expansion,.the City is a member of the North Bay Water Reuse
Authority (NBWRA) to pursue federal funding from the U.S. Bureau of Reclamation (USBR)
Title XVI program along with other regional funding opportunities. The Title XVI program
could provide up to 25% grant funding for construction and related costs. In addition, there are
state funding opportunities. Proposition 1, the Water Quality, Supply, and Infrastructure
Improvement Act of 2014, is intended to provide a more resilient and sustainably managed water
infrastructure. Proposition 1 provides $625 million for grants and low interest loans for water
recycling projects, including, but not limited to, treatment, storage, conveyance, and distribution
facilities. The State Water Resources Control Board (State Water Board) is responsible for
implementing the water recycling funding through its existing Water Recycling Funding
Program (WRFP).
Through the WRFP, the State Water Board offers loans and grants from Proposition 1, as well as
loans through the Clean Water State Revolving Fund ( CWSRF), which is a federal funding
program. Eligible projects may receive a Proposition 1 grant, a Proposition 1 or CWSRF loan, or
a combination of grant and loan. The loan terms include a subsidized rate that is generally one-
half the State of California's most recent general obligation bond rate, currently set at 1.6 %, and
a repayment term up to 30 years.
DISCUSSION
The Proposition 1 funding provides an ideal opportunity for the City to finance part of the
expansion of the recycled water facilities by leveraging local and federal funds. Proposition 1
grants can be used to fund up to 35% of eligible construction costs up to a maximum of $15
million, including construction allowances. At least 50% local cost share match must be
provided. Local cost share may be provided by CWSRF financing or other sources, including the
applicant's own cash reserves or federal programs. Thus, there is the opportunity to receive 25%
grant from federal funds, and 35% grant from state funds, with the remainder provided by a
combination of low interest loans and the City's Wastewater Enterprise fiends.
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Funding limitations and program requirements could affect the financing and phasing of the
recycled water expansion program. Proposition 1 grant funds may be limited due to high
demand. Half the available funds have been budgeted for grants and the remainder will be
distributed as loans. Proposition 1 funding priority is based on the applicant's "readiness to
proceed ". This includes completed design and environmental clearances, and the ability to start
construction quickly with an existing local match in hand.
To balance the "readiness to proceed" criteria for Proposition 1 and the limitation on starting
construction for Title XVI projects not expected to be approved before mid -2016, the Proposition
1 project includes the next phase of the urban distribution system expansion and the tertiary
treatment expansion. This portion of the urban distribution system is currently in design and is
expected to go to bid in spring 2016. The design of the tertiary treatment expansion is underway
and is expected to be ready to bid in fall 2016. Both of these projects are included within the
existing Water Recycling Expansion Program Environmental Impact Report (EIR). The Title
XVI project would include any remaining unfinished elements of the tertiary expansion project,
the urban distribution system, and the agricultural distribution system. All of these projects have
a construction start date after the expected award of federal funds.
Proposition 1 funding applications will be evaluated for cost effectiveness, taking into
consideration energy efficiency, and reduction of greenhouse gas emissions. Projects will be
prioritized as follows: projects that benefit a severely disadvantaged community, Direct Potable
Reuse projects, Indirect Potable Reuse (IPR) projects, Recycled Water Distribution Systems,
Groundwater Recharge (GWR) Facilities, and Recycled Water Treatment Facilities. Because
large funding requests are expected for IPR and GWR projects, it is to the City's advantage to
submit an application for a "ready to proceed" project as soon as possible.
The total funding request from Proposition 1 is $4,305,995. Of this, $3,175,946 is requested as a
grant and $1,130,049 as a loan. The total project cost, including the later elements that are
expected to be funded partially by USBR Title XVI grant, is $9,746,274, which includes a Title
XVI grant of $1,586,567 and City funding from resources or other sources of $3,853,713.
In order to expedite the Proposition 1 funding process, Council is asked to authorize the City
Manager to sign all required application materials. Such application materials include:
• General Information Package (Attachment 3)
• Technical Application Package
• Financial Application Package (Note: further Council action may be required to fulfill all
financial application requirements.)
• Environmental Application Package
Council is also asked to authorize the City Manager to execute a financial assistance agreement
from the State Water Resources Control Board and any amendments or change orders thereto.
The City may choose to accept a low loan amount, or no loan at all, and to use Wastewater
Enterprise funds as the local match. This authorization provides the City Manager flexibility to
negotiate the terms that best match the City's needs, while allowing the funding process to be
expedited.
As required by the State Water Board for the financing agreement, Council is asked to authorize
the Director of Public Works and Utilities, or his assigned appointee, to administer the financial
assistance agreement, to submit invoices for reimbursement, to certify financing agreement
disbursements on behalf of the City of Petaluma, and to certify that the City of Petaluma has or
will comply with all applicable state and federal statutory and regulatory requirements related to
any financing or financial assistance received from the State Water Resources Control Board,
including:
• California Environmental Quality Act compliance
• Minimum Use Requirements (at least 25% of the eligible project capacity must be
delivered within first year of operation; total eligible project capacity must be delivered
within 5 years of operation)
• Recycled Water Market Assurances User Connection Schedule (no more than 50% of the
volume of recycled water can be allocated to future users)
• Annual report for up to five years on recycled water use data
It should be noted that by requesting a CWSRF loan in addition to Proposition 1 funding, the
City would have to demonstrate compliance with the numerous federal requirements including
Davis -Bacon federal wage and Buy American purchasing requirements. To expedite the funding
request and avoid these substantial federal requirements, it is recommended that only the State
Proposition 1 funds be pursued at this time. The federal requirements will necessarily be
addressed when Title XVI funding is awarded.
FINANCIAL IMPACTS
The current action authorizes submittal of the application and support documents. If successful,
the grant and loan will be up to $4,305,995 in support to the current CIP projects, C66401415
and C66401416. The current CIP anticipated total Proposition 1 or some similar grants of
$4,851,000 through FY 18/19. It is anticipated that the future USBR Title XVI grant funds will
make up the difference.
ATTACHMENTS
1. Resolution
2. Project Map
3. General Information Package
4
Attachment 1
RESOLUTION AUTHORIZING THE SUBMITTAL OF A FINANCIAL ASSISTANCE
APPLICATION TO THE STATE WATER RESOURCES CONTROL BOARD FOR THE
DESIGN AND CONSTRUCTION OF THE EXPANSION OF THE RECYCLED WATER
TREATMENT AND DISTRIBUTION SYSTEM; AUTHORIZING THE CITY
MANAGER TO EXECUTE ALL NECESSARY APPLICATION DOCUMENTS AND TO
NEGOTIATE AND EXECUTE A FINANCIAL ASSISTANCE AGREEMENT WITH
THE STATE WATER RESOURCES CONTROL BOARD AND ANY AMENDMENTS
OR CHANGE ORDERS THERETO; AND AUTHORIZING THE DIRECTOR OF
PUBLIC WORKS AND UTILITIES DEPARTMENT, OR HIS ASSIGNED
REPRESENTATIVE, TO ADMINISTER THE FINANCIAL ASSISTANCE
AGREEMENT, TO SUBMIT INVOICES FOR REIMBURSEMENT, TO CERTIFY
FINANCING AGREEMENT DISBURSEMENTS ON BEHALF OF THE CITY OF
PETALUMA, TO CERTIFY THAT THE CITY OF PETALUMA HAS AND WILL
COMPLY WITH ALL APPLICABLE STATE AND FEDERAL STATUTORY AND
REGULATORY REQUIREMENTS RELATED TO ANY FINANCING OR FINANCIAL
ASSISTANCE RECEIVED FROM THE STATE WATER RESOURCES CONTROL
BOARD
WHEREAS, the City of Petaluma desires to expand its recycled water system to serve
additional urban properties to offset potable water use; and
WHEREAS, the City of Petaluma desires to expand tertiary treatment capacity to reduce
wastewater discharges and provide additional recycled water for urban and agricultural uses; and
WHEREAS, the expansion of the recycled water treatment and distribution system
project (the Project) includes the expansion of the tertiary treatment facilities at the Ellis Creek
Water Recycling Facility and the extension of the urban distribution system for delivery of
recycled water; and
WHEREAS, the City of Petaluma General Plan 2025 recognizes the use of recycled
water as a potable water offset and to meet regulatory requirements for wastewater discharge;
and
WHEREAS, the State Water Resources Control Board (SWRCB) has announced the
availability of funds for water recycling projects from Proposition 1, the Water Quality, Supply,
and Infrastructure Improvement Act of 2014; and
WHEREAS, said funding is intended to provide a more resilient and sustainably
managed water infrastructure; and
WHEREAS, said funding is available for water recycling projects, including, but not
limited to, treatment, storage, conveyance, and distribution facilities for potable and non - potable
recycling projects; and
WHEREAS, said funding includes grants and loans at reasonable rates and terms; and
WHEREAS, the City of Petaluma will comply with all applicable laws and regulations
relating to the project, including the California Environmental Quality Act (CEQA) prior to
implementation of the Project; and
WHEREAS, various documents are required to be filed with the State Water Resources
Control Board related to the Proposition 1 funding associated with the Project.
NOW, THEREFORE, BE IT RESOLVED:
1. That the City Council authorizes the submittal of a financial assistance application for a
financial assistance agreement with the State Water Resources Control Board for the
design and construction of the expansion of the expansion of the recycled water treatment
and distribution system project (the Project).
2. That the City Manager is authorized to sign all necessary Project application documents
and to negotiate and execute a financial assistance agreement from the State Water
Resources Control Board and any amendments or change orders thereto.
3. That the Director of Public Works and Utilities Department, or his assigned
representative, is authorized to administer the financial assistance agreement, to submit
invoices for reimbursement, and to certify financing agreement disbursements on behalf
of the City of Petaluma.
4. That the Director of Public Works and Utilities Department, or his assigned
representative, is authorized to certify that the City of Petaluma has and will comply with
all applicable state and federal statutory and regulatory requirements related to any
financing or financial assistance received from the State Water Resources Control Board.
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Attachment 2
PROPOSITION 1 'PRO
JEST
r \ r
Urban Recycled
Water Expansion .'
re A
g
w •
Pe alu
Ellis Creek WRF Capacity vYW
• Expand Tertiary Filters
• UV Disinfection
ii
Petaluma Seasonal Storage Option 1 -
New Ponds Southeast of ECWRF { l Waric ural Reocn cled
ult
ter Expansi
• Coastal Conservancy support for `
Legend .... Kaiser Pipeline habitat
OWater Recycling Plant _
® Existing Pipeline
Phase 1 Pipeline
1 � l
\_i
I I I Potentially in Phase 1 Funding ;,•��,�• _ .i� \�� ✓�
! o Potentially Deleted From Phase 1
Phase 2 Pipeline
Potential Phase 2 Pipeline s�
Potential Phase 2 Project Area - - -��
North Bay Water Reuse Program Feasibility Study
Groundwater Depression -
Petaluma Projects
N 0 4.000
* F® ..;Source.,.Esri, DigltalGlobe - -, GeDEYe'�i-qubed,,, � NORTH BAY WATER 146564 Figure
REUSE PROGRAM e X
U�GS�, ;AE'; Getmapping. AeroriNGg , 8/20/2015
7
Attachment 3
Prir►t=
GENERAL INFORMATION PACKAGE
I. TYPE OF ASSISTANCE REQUESTED
Amount of Assistance Requested: $4,305,994.85
Proposed Security: ❑✓ Wastewater revenues and fund ❑Water revenues and fund ❑Other:
Project Type(s): ❑ Wastewater ✓❑ Water Recycling ❑ Estuary ❑ Nonpoint Source
II. APPLICANT INFORMATION
Applicant Name: City Of Petaluma
Street Address3890 Cypress Dr
city: Petaluma
State: CA
Zi +4 Code: 94954
Applicant Type: ❑✓ Public ❑ Indian Tribe Non rofit ❑ Other: Specify
Charter City /County: 0 Yes ❑ No
Mailing Address: 3890 Cypress Dr
I city: Petaluma
State: CA
[Zip+4 Code: 94954
Congressional District(s): Second and Fifth
State Senate District(s): Second
State Assembly District(s): Second, Fourth, and Tenth
County: Sonoma
I Federal Tax ID No.: 94- 6000392
Data Universal Numbering System DUNS No.: 020021978
R ' nal Water Board where the-project will take lace: (North Coast) (San Francisco Bay)
Q8 (Central Coast) ❑ 4 (Los Angeles) J 5 (Centro Valley) � 6 (Lahontan) F-]7 (Colorado River)
❑ 8 (Santa Ana) ❑ 9 (San Diego)
Authorized Representative Name, Title: Dan St. John, Director of Public Works and Utilities
Phone No.: 707 ) 778 -4546
Email Address: Dst'ohn ci. petal u ma. ca. us
Contact Person Name:Leah Walker
Phone No.: 707 778 -4583
Email Address: Lwalker ci. etalu ma. ca. us
Local Counsel Name: Eric Danly
Phone No.: 707 778 -4362
Email Address: Edanly @ci.petaluma.ca.us
III. PROJECT INFORMATION AND PROPOSED SCHEDULES
Project Description: (Enter a brief description of the project)
The project will increase the tertiary capacity of Petaluma's Ellis Creek Water Recycling Facility from 4.8 to 7.8 mgd, providing 1,100 AFY for expanding urban and agricultural
irrigation. This includes the installation of a second sand filter module and addition of a third channel of ultraviolet lights for disinfection. The project includes expansion of the
urban recycled water distribution to serve schools, parks, and greenbelts by extending a 16" pipeline 1.6 miles in northeastern Petaluma. This project will provide an additional
51 AFY of potable water offset. Currently, the majority of agricultural users that would benefit are dependent upon strained surface water resources (local reservoirs). Expansion
of production capacity would allow the City to serve additional vineyards and dairies that have played a vital role in the local economy for over 150 years.
Project Title: Expansion of Petaluma Recycled Water Treatment Capacity and Urban Distribution System
NPDES Permit or WDR Order No. if applicOU2
Current Year Estimated Population Served:
State Use Only
CWSRF Project #
Project Manager
Date Received
Consultation with Other Agencies
Please list other Federal and State agencies that have been involved in this project (e.g. planning, CEQA /NEPA
consultation, funding, etc.), their contact information if known, and estimated dates for resolution of any issues.
The Tertiary Capacity Expansion Project is part of an adopted Environmental Impact Report for the
City of Petaluma's recycled water program. The pipeline portion is covered under the City's
Recycled Water Master Plan. No consultation with other agencies is anticipated.
Partnering Agencies
Please list all other agencies that have an interest in this project. Provide contact information if known.
North Bay Water Reuse Authority. www.NBWRA.org
404 Aviation Blvd., Santa Rosa, CA 95403
707 - 235 -8965
IV. ESTIMATED PROJECT CAPITAL COSTS AND FUNDING SUMMARY
Cost Classification Total Project Costs Other Funding ftanested Financing
A. Facilities Planning (a)
B. Facilities Design (a)
C. Construction Management (a)
D. Value Engineering (a)
E. Administration (a)
F. Facilities Construction Total
G. Contingency
H. Pre - Purchase Material /Equipment
I. Land and Right -of -Way
J. Other Costs
$ 415,577.00
$ 250,,000.00
$ 75�9?1= 1zFT10-
$
$
$ 0.00
$ 9,746,274.00
$ 41 x,577 -00
$ 0.109,000.00
$3 , 9Rl:278.57
$ 675,000.00
$ 0.00
$
$ 0.00
$i7i000.00
V.,754,559.23
4@6
$n nn
Explain: 5,4 40,279.5-7 4,305,994.85
K. Total Project Costs $ $ $
(a) Soft costs maybe provided for planning, design, value engineering, construction management, and administration costs.
08%6,274.00
Portion of the Total Project Costs that will serve existing facilities and /or existing communities $
Portion of the Total Project Costs that will serve new development $
9
Estimated or Actual Date
Estimated Project
Schedule: Complete Construction Application
12/15/2015
1) General Information Package
2) Technical Package
12/15/2015
3) Environmental Package
12/15/2015
4) Financial Security Package
12/15/2015
Complete Project Plans and Specifications
4/1/2016
Advertise Bids
6/1/2016
Issue Notice to Proceed
8/11/2016
Complete Construction
10/31/2018
Consultation with Other Agencies
Please list other Federal and State agencies that have been involved in this project (e.g. planning, CEQA /NEPA
consultation, funding, etc.), their contact information if known, and estimated dates for resolution of any issues.
The Tertiary Capacity Expansion Project is part of an adopted Environmental Impact Report for the
City of Petaluma's recycled water program. The pipeline portion is covered under the City's
Recycled Water Master Plan. No consultation with other agencies is anticipated.
Partnering Agencies
Please list all other agencies that have an interest in this project. Provide contact information if known.
North Bay Water Reuse Authority. www.NBWRA.org
404 Aviation Blvd., Santa Rosa, CA 95403
707 - 235 -8965
IV. ESTIMATED PROJECT CAPITAL COSTS AND FUNDING SUMMARY
Cost Classification Total Project Costs Other Funding ftanested Financing
A. Facilities Planning (a)
B. Facilities Design (a)
C. Construction Management (a)
D. Value Engineering (a)
E. Administration (a)
F. Facilities Construction Total
G. Contingency
H. Pre - Purchase Material /Equipment
I. Land and Right -of -Way
J. Other Costs
$ 415,577.00
$ 250,,000.00
$ 75�9?1= 1zFT10-
$
$
$ 0.00
$ 9,746,274.00
$ 41 x,577 -00
$ 0.109,000.00
$3 , 9Rl:278.57
$ 675,000.00
$ 0.00
$
$ 0.00
$i7i000.00
V.,754,559.23
4@6
$n nn
Explain: 5,4 40,279.5-7 4,305,994.85
K. Total Project Costs $ $ $
(a) Soft costs maybe provided for planning, design, value engineering, construction management, and administration costs.
08%6,274.00
Portion of the Total Project Costs that will serve existing facilities and /or existing communities $
Portion of the Total Project Costs that will serve new development $
9
VI. SUSTAINABILITY
A project that supports or incorporates one or more of the following sustainability goals receives one priority point for each
area addressed.
Label the requested documents as Attachment G1, G2, G3, etc.
The project supports infill development or results in the reuse or redevelopment of land in an area presently
served by transit, streets, water, sewer and other essential services.
G1 – Provide a map highlighting the infill or redevelopment areas.
The applicant maintains a Capital Improvement Plan, an Asset Management Plan, or has performed a full -cost
❑
pricing analysis, or the project incorporates climate change adaption.
G2 – Provide copies or links to these plan or analysis.
The project protects environmental or agricultural resources such as farm, range and forest lends; wetlands and
wildlife habitats; recreational lands such as parks, trails, and greenbelts; or landscapes with locally unique
features or areas identified by the state as deserving special protection.
G3 – Provide a map highlighting the areas that will be protected.
❑
The project is cited in one or more regional environmental management plans.
G4 – Provide copies or links to these plans.
The project incorporates wastewater or storm water /urban runoff recycling, water conservation, energy
F-1
conservation, low impact development, or reduced use of other vital resources.
G5 – Explain the reason for the energy savings and the expected energy savings.
❑
The project uses low- impact treatment for lower lifecycle operating costs through reduced energy, chemical, or
other inputs.
G6 – Explain the reason(s) for the reduced operating costs.
CERTIFICATION AND SIGNATURE; OF AUTHORIZED REPRESENTATIVE
To the best of my knowledge and belief, I certify that I am authorized to submit this application; the information provided in
this application is true and correct; the documentation has been duly authorized by the governing body of the applicant;
and the entity possesses the legal authority to apply for the financing and enter into a financing agreement with the State
Water Resources Control Board and to finance and construct the proposed facilities.
Name of Authorized Representative: Title:
Signature of Authorized Representative: Date:
HOW DID YOU HEAR ABOUT THE CWSRF PROGRAM?
❑ California Financing Coordinating Committee (CFCC) Funding Fair ❑ Colleague ❑ State Water Board Letter
❑ Conference/Trade Show/Workshop (Specify): ❑ Employer /Employee
❑ Consultant ❑ Internet ❑ Publication El Other (Specify):
m0
Attachment G2
Link to City of Petaluma 2016 Budget that includes Capital Improvement Program 2016 -2020
with the projects in this application.
Project C66401415 Recycled Water Pipeline System Extensions (Page 77)
Project C66401416 Tertiary Filtration System Expansion (Page 70).
http: / /cityofpetaluma. net / finance/ pdf/ 2016budget /2016PrelimBudget.pdf
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