City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 2, 2025
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution No. 2025-68 Approve $6M Amendment Agreement to the State Revolving Fund Loan for the Industrial Wastewater System
RECOMMENDATION
Staff recommend that the City Council consider and adopt Resolution No. 2025-68, A Resolution of the City Council of the City of Gonzales Authorizing Execution of a $6.0M Amendment Agreement to the $28.8M State Revolving Fund Loan for the Industrial Wastewater System.
BACKGROUND
The construction documents (plans, technical specifications, and cost estimate) for the Industrial Wastewater Treatment Facility were prepared by Dudek Consulting. The project was issued for public bid on January 15, 2025. On February 26, 2025, the City received bids from six contractors. After the bid opening for the IW Treatment Facility, staff estimated there was a funding gap of approximately $6,000,000 to complete the project. The following table provides a breakdown of the estimated costs and funding for the IW System:
AGENDA
ITEM
9 Project Costs and Funding
CONSTRUCTION
Collection System $7,991,000 (1)
IWTF $23,584,000 (2)
Ancillary Work $175,000
Subtotal = $31,750,000
CONSULTANT COSTS - Planning/Design Phase
Pretreatment Program $20,000
Finalize Design $60,000
Engineering Services During Bidding/Award Phase $220,000 Easements for IW Pipeline $260,000
CONSULTANT COSTS - Construction Phase
Engineering Services During Construction $1,472,000
Program Management $400,000
Construction Management $2,860,000
Environmental $350,000
Subtotal = $5,642,000
Legal and Financial Costs $200,000
TOTAL = $37,592,000
FUNDING
SRF Loan $28,884,000
Sewer Impact Fees $2,750,000
DEFICIT = $5,958,000
(1) Includes 5.0% Contingency
(2) Includes 7.5% Contingency
On March 18, 2025, a $6M loan amendment request was submitted to the State Water Resources Control Board (SWRCB) to supplement the City’s $29M State Revolving Fund (SRF) loan to cover the increased costs of the project. The $6M increase will be repaid by City sewer rates.
The City’s $6M loan amendment request was reviewed by SWRCB financial staff based on updated financial reports provided by the City Finance Director. On May 30, 2025 SWRCB staff emailed City staff that the financial review was completed and the $6M loan amendment was approved. SWRCB staff advised City staff to issue the Notice to Proceed with Construction to Gateway Pacific in parallel with SWRCB staff preparing the SFR Amendment agreement which will take three to four months. At the June 16, 2025 Council Meeting, the City Council authorized the issuance of the Notice to Proceed to Gateway Pacific.
On August 13, 2025 City staff received the SFR Amendment agreement via email. Staff recommends that the City Council authorize the City Manager to execute the $6M SRF Amendment Agreement.
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.
Explain: This project supports our vision by making improvements to the wastewater system to increase its capacity for residential and industrial development.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: Maintaining and improving the wastewater treatment plant enhances the community’s quality of life by providing for treatment and safe disposal of the City’s wastewater.
City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: See Vision above.
ALTERNATIVES
None.
BUDGET IMPACT
This contract will be funded with the Sewer Rates and Sewer Impact funds.
CONCLUSIONS
Staff recommend that the City Council consider and adopt Resolution No. 2025-68, A Resolution of the City Council of the City of Gonzales Authorizing Execution of a $6.0M Amendment Agreement to the $28.8M State Revolving Fund Loan for the Industrial Wastewater System.
Attachments:
1. Resolution No. 2025-68
2. State Revolving Fund Amendment