Central Coast Blue Cost Sharing
Agreement and SRF Loan Authorization
March 1, 2022
By: Benjamin A. Fine, P.E.
Director of Public Works/City Engineer
&
Nadia Feeser
Administrative Services Director
Item 12.C
Recommendation
•Council authorize the City Manager to:
•Enter into a cost-sharing agreement
•File a financial assistance application wit the Clean Water State Revolving Fund for Central Coast Blue
2 Background
•Central Coast Blue
•Regional recycled water project
•Arroyo Grande
•Grover Beach
•Pismo Beach
•Phase I –Pismo Flows
•Phase II –SSLOCSD Flows
3 Awards and Funding
•2021 Helen Putnam Award –Regional Collaboration
•2019 WateReuse California –Education and Outreach
Project of the Year
•2019 WateReuse National –Education and Outreach
Project of the Year
•Five Grants –$4.5M
4 Background
•February 16, 2021 Council Certified EIR
•March 16, 2021 Council adopted:
•CEQA findings
•Statement of Overriding Considerations
•Mitigation Monitoring
•Reporting Program and
•Directed the City Clerk to file the Notice of Determination •Reaffirmed City Manager’s authority to enter into an Operating Agreement
5 Background
•Draft MOA presented to partner agencies
•Pismo Beach –December 3, 2019
•Grover Beach –January 21, 2022
•Arroyo Grande –January 28, 2020
•Feedback received and MOA revised
•Joint Council meeting –March 2020
•Canceled due to COVID
6 Background
•2020 now
•City Managers continued to negotiate points in the MOA •Continued to receive input from their respective Councils •New Framework presented in August 2021
•November 16, 2021 Pismo’s Council increased
participation
•20% 39%
•Making the project fully subscribed
7 Background
•Arroyo Grande drafted a revised agreement
•Each agency provided input
•Arroyo Grande Approved MOA –January 25, 2022
•Grover Beach Approved MOA –February 15, 2022
8 Revised Project Delivery and Governance
•Pismo Beach remains lead agency through project construction and completion of infrastructure of Phase 1 •Costs will be shared by the three cities in proportion to their share of the benefits •Grover Beach and Arroyo Grande will reimburse Pismo Beach for their respective shares of the costs of the Project, including all pre-construction and construction costs. Ongoing pre-construction costs will be split between Arroyo Grande and Grover Beach until each party reaches its total contribution amount for its share of pre-construction costs. •Benefits from the project will be shared as follows:
•Grover Beach –36%
•Arroyo Grande –25%
•Pismo Beach –39%
9 Revised Project Delivery and Governance
•Cities will form a Joint Powers Authority
•JPA to own and operate the project
•JPA Board –one member from each agency
•JPA will own all project assets
•JPA employ or contract employees
•The revised framework indicated that the JPA would become effective upon completion of construction and commissioning of the Project.
•Agreement calls for the JPA to be formed earlier in order to ensure that the JPA is able to obtain financing for the Project.
10 Revised Project Delivery and Governance
•Joint meetings of the three City Councils
•At least once a year through construction
•Transparency
•Project updates
•Discuss policy issues as needed
•Technical Advisory Committee
•Tomorrow
•Each City Council
•Review and approve scope, budget, contingency and procurement through construction •Costs in excess of agreed budge + 20% contingency require approval from all three City Councils 11 Revised Project Delivery and Governance
•Agreement does not impose pumping limits
•Project water will not be transported out of the NCMA
without written approval of all parties
•Opt-out clause to allow exit prior to the award of
construction
•Current costs to date must be paid
•JPA to obtain title of the Project site
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Authorizing Resolution
Clean Water State Revolving Fund Loan
CWSRF Loan –Low interest loan for construction costs.
Cities to pay back loan by net water revenues for Arroyo Grande and Grover Beach and net water and wastewater revenues for Pismo Beach
Timing of CWSRF loan: over 1 year to secure financing if project is approved for financing Water Board reviews applications each year based on submissions through December 31st of the prior year
Project construction may start 2022 or 2023. JPA to own and operate facility.
CWSRF loan application submitted December 2021 for funding in 2023 (AG, GB, PB, JPA all submitted applications)
Authorizing Resolution
Water Board
requires the
governing board of
each entity
submitting the SRF
application to
submit an
Authorizing
Resolution.
Authorizing
Resolution states
that the Authorized
Representative or
designee is
authorized to sign,
file, carry out, and
implement the SFR
application and
resulting financing
agreement.
Draft Authorizing
Resolution
approved by Water
Board, ready for
Council review and
approval.
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Fiscal Impact
Cost-Sharing Agreement -Financial
Addresses pre-construction and construction costs
Commits Pismo Beach to 39% of these costs, Grover Beach: 36%, Arroyo Grande:
25%
Pre-construction costs –Pismo Beach contracts and pays upfront, then seeks reimbursement from Grover Beach & Arroyo Grande
Construction costs supported with Clean Water State Revolving Fund (CWSRF) low interest financing over 30 years
Annual Costs will decrease if more grants are awarded
Cost-Sharing Agreement -Financial
$13,507,007 Pre-construction costs
4,496,094 Grants or Contributions to date
9,010,913 Pre-construction costs not supported by grants 43,407,577 Construction costs
$52,418,490 Total
$20,443,211 39% Pismo Beach
$3,779,123 Annual Debt Service & O&M
1,473,858 39% Pismo Beach
Net Project Expenditures -Estimates
Total Pismo Beach Expenditures 6,237,683$
Total Arroyo Grande Exenditures 215,423
Total Grover Beach Expenditures 230,039
Land Purchase 1,794,331
Expenditures less Land 4,888,814$
Prop 1 Grant Funding 2,000,000$
Title XVI Grant Funds 796,094
2,796,094$
Expenditures less land and grants 2,092,720$
Revenues received to date 630,930
Net Expenditures 1,461,790$
Expenditures and Amounts Owed by Partner
Agencies -Estimates
Allocation of Expenditures less grants 3,256,121$ Paid to date Remaining Due Pismo Beach 39%1,269,887$ 2,711,555$ (1,441,668)$ Grover Beach 36%1,172,204 279,591 892,612 Arroyo Grande 25%814,030 264,975 549,055 100%3,256,121$ 3,256,121$ -$
Allocation of Expenditures less land and grants 1,461,790$ Paid to date Remaining Due Pismo Beach 39%570,098$ 917,224$ (347,126)$ Grover Beach 36%526,244 279,591 246,653 Arroyo Grande 25%365,447 264,975 100,473 100%1,461,790$ 1,461,790$ 0$
Environmental Review
•Pismo Beach –Lead Agency
•City Council certified and EIR –February 16, 2021
•Adopted findings
•Adopted a statement of overriding considerations
•No additional CEQA findings or amendments to the EIR
are necessary at this time
•If project components change in the future additional
environmental review will be conducted at that time
21 Summary of Central Coast Blue
Central Coast Blue
•Address the threat of seawater intrusion
•Phase 1 between 900–1,000 acre-feet
•351–390 acre-feet per year of reliable groundwater for the City.
22 Staff Recommendation
•Council authorize the City Manager:
•Enter into a cost sharing agreement
•File a financial assistance application with the Clean Water State Revolving Fund
23 Questions?
Central Coast Blue Cost Sharing Agreement and SRF Loan Authorization