201 S. Anaheim Blvd.
Suite #1101
Anaheim, CA 92805
Tel: (714) 765-5173
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
PUBLIC UTILITIES DEPARTMENT
DATE: APRIL 26, 2022
FROM: PUBLIC UTILITIES DEPARTMENT
SUBJECT: AUTHORIZATION TO APPLY FOR AND, IF AWARDED,
ENTER INTO AN AGREEMENT WITH THE STATE WATER
RESOURCES CONTROL BOARD FOR FUNDING FROM THE
DRINKING WATER STATE REVOLVING FUND TO OFFSET
COSTS OF THE GROUNDWATER TREATMENT PROJECT
ATTACHMENT (Y/N): YES ITEM # 20
RECOMMENDATION:
That the City Council, by two (2) Resolutions:
1) Authorize the Public Utilities General Manager, or his designee, to submit an application for and on behalf of the City of Anaheim (City) to the State Water Resources Control Board (SWRCB) for Drinking Water State Revolving Fund (DWSRF) funding to offset the cost of design and construction of Anaheim’s Groundwater Treatment Project (Project);
2) Designate the General Manager as the City’s authorized representative for all Project purposes and authorize the General Manager, or his designee, on behalf of the City, to take such actions and execute any such agreements, certificates and/or assurances, reports, plans, payment requests, or other documents, including but not limited to a Financial Assistance Agreement, with any revisions that are in substantial conformance with those documents, as may be necessary for the purpose of obtaining DWSRF funding;
3) If awarded, authorize the acceptance of the DWSRF funding on behalf of the City and increase budget appropriations by a commensurate amount in the annual budget of the City of Anaheim, Public Utilities Department (APU) in the applicable fiscal year; and
4) State by separate Resolution, the City’s intent to construct certain water treatment systems with DWSRF funding, and that the City will be in compliance with Treasury Regulation §1.150-2 and regulations relating to the qualification for reimbursement of Project costs.
Authorization to Apply for and, if Awarded, Enter into an Agreement with the State Water Resources Control Board for Funding from the Drinking Water State Revolving Fund to Offset Costs of the Groundwater Treatment Project April 26, 2022
DISCUSSION:
APU is currently in the process of the design and construction of a series of groundwater treatment facilities across nine well sites to address perfluoroalkyl and polyfluoroalkyl substances (PFAS) that originated from industrial applications and have since made their way into the Orange County Groundwater Basin. Across the nine well sites, 14 impacted groundwater wells have been taken offline until groundwater treatment facilities are in operation in the 2023 timeframe. Although City Council authorized a reimbursement agreement with the Orange County Water District (OCWD) in June 2020 to recover the majority of capital costs and about half of the maintenance costs, the long term financial impacts will result in increased costs to access groundwater. As such, APU is seeking external funding to help reduce the long term financial impacts of removing PFAS from groundwater supplies.
The State has two funding sources for grant opportunities that could offset up to $85 million of the $147 million in capital costs. The SWRCB is the agency that is administering both state and federal funding from the Infrastructure Investment and Jobs Act for which PFAS-related treatment projects qualify.
The two Resolutions for City Council consideration are formatted to comply with strict guidelines set forth in the DWSRF application. The first Resolution establishes the City’s Authorized Representative for all purposes related to the DWSRF funding (including the application, Financial Assistance Agreement, and disbursement of funds). The second Resolution acknowledges that APU may incur project costs and advance its own restricted enterprise funds to pay for these costs prior to the approval of DWSRF financing and that some of these costs may be reimbursed to APU from the DWSRF financing. This Resolution is a required part of the DWSRF application to ensure compliance with Federal Treasury Regulations in the event the SWRCB seeks public financing for the DWSRF funding.
IMPACT ON BUDGET:
If the DWSRF funding is awarded by the SWRCB, budget appropriations will be increased by a commensurate amount in the applicable fiscal year. Funds to construct the Project are included in APU’s FY 2021/22 Water Capital Improvement Program budget.
Respectfully submitted,
Dukku Lee
Public Utilities General Manager
Attachments:
1. Resolution - Drinking Water State Revolving Fund Authorization
2. Resolution - Drinking Water State Revolving Fund Reimbursement