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SR 02-14-2017 3H Ci ty Council Report City Council Meeting : February 14, 2017 Agenda Item: 3.H 1 of 4 To: Mayor and City Council From: Susan Cline, Director , Public Works, Water Resources Subject: Authorization to Negotiate Funding for the Santa Monica Sustainable Water Infrastructure Project (SWIP), California Clean Water State Revolving Fund and Propos ition 1 Funding Programs Staff recommends that the City Council: 1. Authorize the negotiation of funding from the C alifornia State Water Resources Control Board (State Water Board) in the amount of approximately $57,050,000; and 2. Adopt a resolution a uthorizing the City Manage r to execute all necessary documents to apply and negotiate for funding and if successful, carry out the City’s responsibilities under the project financing/funding agreement. Executive Summary The attached resolution would autho rize the negotiation of funding agreements between the City and the State of California. The proposed Sustainable Water Infrastructure Project (SWIP) improves drought resiliency, increases water supply for reuse, and enhances flexibility in the management of the City’s water resources by installing a containerized reverse osmosis unit at the Santa Monica Urban Runoff Recycling Facility (SMURRF), constructing a below grade municipal wastewater treatment facility, and installing two below grade stormwater ha rvest tanks. The proposed project cost is approximately $57,050,000. Staff will return to Council for project approval once a funding / financing package is finalized. Background The State Water Board is committed to assisting its stakeholders build re siliency to drought and climate change. Similarly, the City has established among its sustainability goals the objective of reaching water self -sufficiency by the year 2020 (Attachment 1), concurrent with addressing the water conservation requirements mad e necessary by the current drought. The City’s proposed SWIP would align with these objectives, while simultaneously helping to improve drought resiliency, increase water supply for reuse, and enhance flexibility in the management of the City’s water reso urces by allowing for 2 of 4 the treatment and reuse of brackish/saline groundwater, municipal wastewater, and stormwater. City Council previously adopted the project environmental documentation on September 27, 2016 (Attachment 2). On December 6, 2016 City Coun cil adopted a resolution approving pledged revenues and reimbursement of any State Clean Water State Revolving Fund (CWSRF) financing accepted by the City (Attachment 3). Discussion The CWSRF financing program and Proposition 1 grant funding program were promulgated in response to the unprecedented drought conditions that have afflicted California. The preliminary project cost is approximately $57,050,000. The State has allocated over $900 million dollars for various response programs, including grants, an d low interest financing. The State Water Board has indicated strong support for funding of the SWIP project via CWSRF low interest financing for up to the full project cost. As part of the State Water Board funding application and negotiation process, the preliminary costs will be refined and an initial funding agreement for the full amount of financing will be provided by the State Water Board to the City for consideration and finalization. Separate from the CWSRF financing, the City has requested for gr ant funds from round two of Proposition 1, which if successful would reduce the amount of financing required. The results of this application are pending. The State Water Board requires that the agency requesting funding provides a resolution (Attachments 4 and 5) authorizing the negotiation of funding agreements between the Water Board and the applicant agency (City of Santa Monica). Adoption of the resolution would not commit the City to accept any funding. City of Santa Monica Sustainable Water Infrast ructure Project (SWIP ) The SWIP is comprised of three integrated project elements to improve drought resiliency, increase water supply, and enhance flexibility in the management of the City’s water resources. Project Element 1 is the installation of a con tainerized, off -the - shelf saline reverse osmosis unit at the SMURRF. When operational, the reverse osmosis unit would be utilized to advance treat non -potable water resources such as urban and wet weather runoff harvested by the recently funded Clean Beach es Initiative (CBI) Project storage tanks to be constructed at the Deauville Parking Lot. These tanks 3 of 4 will capture runoff from the 90 -acre Pier Drainage Area that would normally be discharged to the ocean at the Pier Outfall. When runoff is scarce, the t anks would be replenished with brackish/saline groundwater from shallow horizontal subdrains installed beneath the CBI stormwater tanks. Project Element 2 includes the construction of a below grade recycled water treatment plant proposed beneath the Civic Center parking lot. The recycled water plant would advance treat approximately 1.0 million gallons/day (MGD) of municipal wastewater for reuse. Project Element 3 consists of two below grade stormwater harvest tanks. One tank would be constructed beneath Memorial Park, and the other adjacent to the below grade recycled water treatment facility. Project elements to be located under the Civic Center parking lot would be constructed to accommodate future development on the site. Benefits provided by the sto rmwater harvest tanks include capturing stormwater and urban runoff for treatment and reuse, improving beach water quality and complying with State Water Board Enhanced Watershed Management Plan (EWMP) requirements. Together, the Project elements would pr oduce approximately 1.5 MGD (1,680 acre -feet/year) of new water for immediate non -potable reuse, and when properly permitted, for indirect potable reuse via aquifer recharge. All treated water would be distributed via the City’s existing purple pipe syste m. The proposed locations of project elements 1, 2, and 3 are shown in Attachment 6. Environmental Analysis California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA) documents for the project were certified by the Santa Mon ica City Council on September 27, 2016 (Attachment 2). Financial Impacts and Budget Actions There are no financial impacts or budget actions required at this time. Staff has determined, however, that the Wastewater Fund has the capacity to accommodate the maximum debt service that may be required. If a proposed funding package is acceptable, staff will return to Council with a separate funding resolution for adoption. 4 of 4 Prepared By: Thomas Watson, Water Resources Protection Programs Coordinator Approved Forwarded to Council Attachments: A. Attachment 1 - March 8, 2011 Staff Report B. Attachment 2 - September 27, 2016 Staff Report C. Attachment 3 - December 6, 2016 Staff Report D. Attachment 4 - Resolution E. Attachment 5 - State Water Board Financial Assistance Form F4 (Authorizing Resolution) F. Attachment 6 - Project Location 1 City Council Meeting : February 14, 2017 Santa Monica, California RESOLUTION NUMBER _________ (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA TO AUTHORIZE FUNDING NEGOTIATION FOR THE SUSTAINABLE WATER INFRASTRUCTURE PROJECT (SWIP) FROM THE CALIFORNIA CLEAN WATER STATE REVOLVING FUND AND PROPOSITION 1 FUNDING PROGRAMS WHEREAS, t he California Water Action Plan and the City of Santa Monica’s (Ci ty) Sustainable Water Master Plan recognize that drought resiliency and a sustainable and secure water fut u re must include the reuse of all locally available water resources , including non -traditional resources such as municipal waste water, brackish /saline groundwater, and urban and storm water runoff; and WHEREAS, the City has established among its sustainability goals the objective of reaching water self -sufficiency by the year 2020, concurrent with addressing the water conservation requirements made necessary by the current drought; and WHEREAS, in response to the current drought, the City has adopted a Water Shortage Response Plan, declared a Stage 2 Water Supply S hortage, and set a deadline of December 31, 2016 to achieve a 20% reduction in water use; and WHEREAS, the City seeks funding to construct certain public facilities and improvements relating to its water and wastewater system as part of the Sustainable 2 Wat er Infrastructure Project (SWIP), including certain treatment facilities, pipel ines, and other infrastructure; and WHEREAS, the City seeks grants or low interest financing provided by the State of California acting by and through the California State Water Resources Control Board f or its Sustainable Water Infrastructure Project . NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The City Manager or his designee (s) is hereby authorized and directed to sign and file, for and on behalf of the City , a Financial Assistance Application for a financing agreement from the State Water Resources Control Board for the planning, design, and construction of the Sustainable Water In frastructure Project (“the Project”). SECTION 2. Th e City Manager , or his designee (s), is designated to provide the assurances, certifications, and commitments required for the financial assistance application, including executing a financial assistance a greement from the State Water Resources Control Board and any amendments or changes thereto. SECTION 3. The City Manager , or his designee (s), is designated to represent the City in carrying out the City ’s responsibilities under the financing agreement, in cluding certifying disbursement requests on behalf of the City and compliance with applicable state and federal laws. 3 SECTION 4. If the City is awarded financial assistance, staff shall return to the City Council for approval to enter into any final agree ment with the State Water Resources Control Board . SECTION 5. The City Clerk shall certify to the adoption of this Resolution, and henceforth and thereafter the same shall be in full force and effect . APPROVED AS TO FORM: _________________________ Joseph Lawrence Interim City Attorney 4 CERTIFICATION I do hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the Santa Monica City Council held on February 14, 2017. ______________________________ Denise Anderson -Warren , City Clerk Financial Assistance Application Page 9 of 11 Financial Security Package (Rev. 0 8 /201 5 ) Attachment F4 AUTHORIZING RESOLUTION/ORDINANCE RESOLUTION NO: _____________________ WHEREAS __________________________RESOLVED BY THE ___________________________________ (insert appropriate findings) (insert name of Governing Board of the Entity) OF THE ________________________________________ (the “Entity”), AS FOLLOWS: (insert Entity name) The ________________________________________ (the “Authorized Representative”) or designee is (insert Title of Authorized Representative) hereby authorized and directed to sign and file, for and on behalf of the Entity, a Financial Assistance Application for a financing agreement from the State Water Resources Control Board for the planning, design, and construction of ____________________________________________________________ (the “Project”). (insert Project Name) This Authorized Representative, or his/her designee, is designated to provide the assurances, certifications, and commitments required for the financial assistance application, including executing a financial assistance agreement from the State Water Resources Control Board and any amendments or changes thereto. The Authorized Representative, or his/her designee, is designated to represent the Entity in carrying out the Entity’s responsibilities under the financing agreement, including certifying disbursement requests on behalf of the Entity and compliance with applicable state and federal laws. CERTIFICATION I do hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the __________________________________________ held (insert name of Governing Board of the Entity) on ______________________. (Date) (Name, Signature, and Seal of the Clerk or Authorized Record Keeper of the Governing Board of the Agency) SWIP Project Elements SWIP Element 1 SWIP Element 3 SWIP Element 2 Pico -Kenter Outfall Reference:       Resolution  No. 11021   (CCS)