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SR-505-008 (16) EPWM:CP:BJ:NS:/Prop40PhaseII MontanaGrant Council Meeting: January 24, 2006 Santa Monica, California TO: Mayor and City Council FROM: City Staff SUBJECT: Authorize the City Manager to Negotiate and Execute a Grant Agreement with the State of California; to Adopt a Resolution to Receive a Grant to Support the Montana Avenue Urban Runoff Treatment Project; and Authorize the Appropriation of Grant Funds Introduction This report recommends that the City Council authorize the City Manager to negotiate and execute a grant agreement with the State Water Resources Control Board (Board) to fund an urban runoff improvement project with Proposition 40 funds. The proposed project is comprised of the construction of a sub-surface urban runoff treatment system at the intersection of Montana Avenue and Ocean Avenue in the City?s Montana Avenue Watershed, adjacent to Palisades Park. The report also requests that the Council adopt a resolution to receive the grant award and authorize the appropriation of the grant funds. Background Federal, state and local regulations require the City to reduce urban runoff pollution from storm drain discharges into the Santa Monica Bay. Recent changes in these regulations and standards have shifted the management strategy for urban runoff control from an end-of-pipe approach to a sustainable watershed approach, where the entire watershed or storm drainage area is evaluated for stormwater management opportunities. The watershed approach is considered a best management practice (BMP) and promotes reduction of 1 runoff volume and prevention of urban runoff pollution as guiding principles. The project is intended to help restore water quality and maintain the beneficial uses of the Santa Monica Bay. In addition, the project will assist the City in complying with regulatory requirements imposed by the National Pollution Discharge Elimination System and Total Maximum Daily Loads mandates. Discussion The construction of the Montana Avenue Urban Runoff Project, with an estimated total cost of $1.6 million, is being funded in part by the State?s Propositions 13 and 40. This grant award from Proposition 40 funds in the amount of $600,000 is expected to cover about 37% of the construction costs. The proposed treatment system includes the installation of a primary screening-separation treatment device and a sanitary sewer diversion, thereby removing a variety of soluble pollutants and preventing them from reaching the Bay during dry weather and most storm events. The Project will be located within the intersection of Ocean and Montana Avenues. All structures will be underground as part of the existing storm drain system, except for a small electrical panel located on Montana in a parkway. A prior staff report dated May 13, 2003 accepted a first grant award from Proposition 13 in the amount of $962,000. This is a second grant to help complete funding for the project. It is anticipated that the remaining $38,000 project budget need will be funded from the Stormwater CIP fund. Staff will 2 return in the early part of 2006 for final budget and project approval. Budget/Financial Impact The following budget changes are needed to record receipt of the grant award and make it available for program use: 1) Establish a revenue budget in the amount of $600,000 at account number 20662.403940. 2) Appropriate $600,000 in capital improvement program account number C200352.589000 (Montana BMP, Prop 40 Ph 2). On-going maintenance costs, estimated at $5,000 per year, are anticipated to be included in the existing operating budget of the Water Resources Division. Recommendation Staff recommends that the City Council authorize the City Manager to negotiate and execute a grant agreement with the State Water Resources Control Board, adopt the attached resolution in support of installation of an urban runoff treatment system in the City?s Montana Avenue Drainage Basin adjacent to Palisades Park, and appropriate grant funds as identified in the above budget changes. Prepared by: Craig Perkins, Director, Environmental and Public Works Management Anthony Antich, P.E., City Engineer Gil Borboa, P.E., Water Resources Manager Brian Johnson, Environmental Programs Manager Neal Shapiro, Senior Administrative Analyst Reference Contract No. 8550 (CCS) See Adopted Resolution No. 10106 (CCS) 3