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1 RiversideCA.gov1
RiversideCA.gov
PALMYRITA PFAS WATER TREATMENT PLANT: FUNDING STRATEGY & DWSRFAPPLICATIONCity CouncilDecember 16, 2025Riverside Public Utilities RiversideCA.gov2
BACKGROUND1. Designed to repel oil and water 2. Known as “forever chemicals”3. Bioaccumulate in living organisms4. Potential to cause adverse human and ecological health effects Per- and Polyfluoroalkyl Substances (PFAS) are human-made chemical compounds, a group of more than 12,000 substances of emerging contaminants of concern.1 2 11/21/2025
2 RiversideCA.gov3
BACKGROUNDRegulatory limits for PFAS have decreased over the last decade. •Over 60% of the City's wells are over the new regulatory limits.•Additional treatment will be required.•State Notification and Response Levels were further reduced on October 29, 2025, which are reflected in the table above.•Federal Maximum Contaminant Level compliance is required by 2031.
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BACKGROUNDPFAS Water Treatment Plant•60% design of the first PFAS treatment plant received•Ion exchange technology•Treatment of the effluent of the existing PalmyritaGAC treatment Plant, and four additional wells. •Project estimate increase to $43.7M•Construction to start in 2026. 3 4
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3 RiversideCA.gov5
ESTIMATED COSTS1. Compliance with the Federal PFAS MCLs is estimated to cost:O&M/Personnel Costs *Updated Capital Cost EstimatesOriginal Capital Cost EstimatesYear in ServiceTreatmentPlant$4,431,000$43,670,451$27,000,000FY 2028/29 Plant #1$2,727,000$15,000,000$15,000,000FY 2029/30Plant #2$11,914,000$55,200,000$55,200,000FY 2030/31Plant #3$19,072,000$113,870,451$97,200,000Total*- Cost in FY 2030/31 when all 3 plants are online.
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1. California’s Drinking Water State Revolving Fund (DWSRF)a. Created under Safe Drinking Water Actb. Managed by the State Water Resources Control Boardc. Administers the Drinking Water State Revolving Fund (DWSRF) Loan and Emerging Contaminants (EC) Grant/Principal Forgiveness2. DWSRF Loana. Financing infrastructure projects to mitigate drinking water risks and support human right to waterb. Up to $50M per project, $100M per utilityc. Interest rate set at 50% of California’s average general obligation bond ratei. 1.90% for calendar year 20253. EC Grant or Forgivable Loana. Funded by the Federal Infrastructure Investment and Jobs Actb. Projects focused on PFAS testing, treatment, and cleanupc. Up to 50% of project costs and up to $25M per utility 4. Single application for both loan and grant/principal forgivenessDWSRF & EC FUNDING OPPORTUNITIES5 6 11/21/2025
4 RiversideCA.gov7
PFAS SETTLEMENT PROCEEDS1. RPU's low water rates are a result of the City's success in mitigating higher treatment costs by successfully holding polluters responsible for groundwater contamination. Over the last 30 years, this effort has provided funding for five of the six water treatment plants to reduce contamination. 2. Currently, RPU expects to receive $39.6M in PFAS settlement proceeds manufacturers of PFAS over the next 8 years. A small portion of the settlement is pending final Court approval and may be adjusted when finalized.3. Established a Water Treatment Designated Reserve for settlement proceeds to fund water treatment operating and capital costs.Estimated Settlement ProceedsFiscal Year$23,325,332FY 2025/26$8,127,588FY 2026/27$2,760,321FY 2027/28$1,521,195FY 2028/29$1,034,412FY 2029/30$1,034,412FY 2030/31$912,717FY 2031/32$851,869FY 2032/33$39,567,846Total RiversideCA.gov8
FUNDING SOURCES1. Palmyrita RFAS Water Treatment Plant estimated costs and funding sources:TotalConstruction & Construction ManagementDesignPlant #1 - Palmyrita PFAS Water Treatment Plant$43,670,451$42,000,000$ 1,670,451Estimated CostsEstimated Funding Sources$959,752$959,752EPA Grant$710,699$710,699Settlement Proceeds(Including Matching)$21,000,000$21,000,000EC Grant/Principal Forgiveness$21,000,000$21,000,000Settlement Proceeds orDWSRF Loan$43,670,451$42,000,000$1,670,451Total Estimated Funding Sources 7 8
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5 RiversideCA.gov9
FUNDING CONSIDERATION1. Submit DWSRF Loan and EC Grant application2. Accept EC Grant if awarded3. Return to Board and City Council with further analysis of DWSRF Loan prior to acceptance4. Consider combining grants, settlement proceeds, and loan to begin funding PFAS Water Treatment Plants to keep rate impacts as low as possible5. Uphold the commitment to the highest quality water service at the lowest possible rates to benefit the community RiversideCA.gov10
Prior to acceptance of DWSRF Loan, additional analysis and due diligence is necessary1. Eligibility and Timing2. Environmental and Regulatory Compliance3. Financial Analysis4. Legal and Contractual Review5. Internal Coordination6. Peer AnalysisADDITIONAL ANALYSIS9 10 11/21/2025
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That the City Council:1. Authorize application to the State Water Resources Control Board forDrinking Water State Revolving Fund Loan and Emerging ContaminantsGrant or Principal Forgiveness Program funding for the Riverside PublicUtilities Department’s Palmyrita PFAS Water Treatment Plant Project;2. Approve the resolution authorizing City Manager, or designee, to file afinancial assistance application for the Financial Agreement with theState Water Resources Control Board for the construction of theRiverside Public Utilities Department’s Palmyrita PFAS Water TreatmentPlant Project;RECOMMENDATIONS RiversideCA.gov12
3. Approve the resolution authorizing the advance of funds forconstruction of the Riverside Public Utilities Department’s Palmyrita PFASWater Treatment Plant Project subject to later reimbursement of Cityexpenditures by the State Water Resources Control Board;4. Authorize the City to receive fifty percent of the Riverside Public UtilitiesDepartment’s Palmyrita PFAS Water Treatment Plant project costs up to$25 million from the Emerging Contaminants Grant or PrincipalForgiveness Program for the Riverside Public Utilities Department’sPalmyrita PFAS Water Treatment Plant upon the grant and/or principalforgiveness award;RECOMMENDATIONS11 12 11/21/2025
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5. With five affirmative votes, authorize the Chief Financial Officer, or his designee, to record an increase in estimated revenues and a corresponding supplemental appropriation in the amount of the actual Emerging Contaminant Grant or Principal Forgiveness Program award in the Water Fund Federal Grants revenue and DWSRF Emerging Contaminant Grant - Palmyrita PFAS Construction Project expenditure accounts; RECOMMENDATIONS RiversideCA.gov14
6. Authorize the City Manager, or designee, to sign all necessary documents for the application to the loan and grant and/or principal forgiveness funding program including application materials, contracts, extensions, and other necessary documents related to the application of the loan and application and acceptance of the grant and/or principal forgiveness funding, including making minor and non-substantive changes, corrections, and amendments, as needed; and7. Recommend staff return to the Board of Public Utilities to provide an update on the State Water Resources Control Board for Drinking Water State Revolving Fund Loan application and application and acceptance of the Emerging Contaminants Grant and/or Principal Forgiveness Program funding. RECOMMENDATIONS13 14