Public Works Agency
www.santa-ana.org/public-works
Item # 25
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
December 19, 2023
TOPIC: Water Well 32 Project
AGENDA TITLE
Adopt a Reimbursement Resolution Approving an Updated Construction Installment Sale Agreement with the California State Water Resources Control Board for Financing of the Well 32 Nitrate Treatment Project (Non-General Fund)
RECOMMENDED ACTION
Adopt a Reimbursement Resolution with the California State Water Resources Control Board for financing of the Well 32 Nitrate Treatment Project, in an amount up to $13,761,712.
RESOLUTION NO. 2023-XXX entitled A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF SANTA ANA AUTHORIZING THE REIMBURSEMENT OF FUNDING FOR THE WELL 32 NITRATE TREATMENT AND REHABILITATION PROJECT FROM
THE STATE WATER RESOURCES CONTROL BOARD
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
The Public Works Agency’s Water Resources Division (Water Resources Division) oversees and maintains the daily operations of the City’s water and sanitary sewer systems. In an effort to find cost-effective solutions to maintain and improve the City’s water system infrastructure, the Water Resources Division has sought out funding mechanisms such as the California State Water Resources Control Board’s (SWRCB) Drinking Water State Revolving Fund (SRF). The SRF assists public water systems in financing the cost of drinking water infrastructure projects needed to achieve or maintain compliance with Safe Drinking Water Act (SDWA) requirements. The City was originally awarded a SRF loan in the amount of $5,290,000 to complete the Well 32 Nitrate Treatment Project (Project).
The Well 32 Nitrate Treatment Project will rehabilitate Well 32, located in Morrison Park, which has been inactive for over 15 years due to low operating efficiencies and nitrate levels above the state threshold. The Project will construct approximately 3,600 feet of new pipeline to convey the well’s flow to the Garthe Reservoir where the water will be blended with other water sources to reduce the nitrate levels to well below the state
Water Well 32 Project
December 19, 2023
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threshold for drinking water. It is estimated that the project will provide the City with an additional 4,000 acre feet (1,303,600,000 gallons) of water per year. Placing Well 32 back in the City’s water system will improve system efficiency and reduce the burden on other water-producing facilities.
After the conclusion of a competitive bidding process, the City Council awarded a construction contract to Pacific Hydrotech Corp. in the amount of $12,795,865 and a total estimated project delivery cost $16,634,625 to complete the Project. Due to the low-interest nature of the SRF loan, Staff has requested an increased loan amount of $13,761,712, from the previously-approved $5,290,000, to help fund the project.
Approval of the Reimbursement Resolution (Exhibit 1) will allow Staff to satisfy SWRCB requirements for consideration of the requested loan increase. Staff will return to Council for approval of any amendment to the funding agreement, should the request be approved by SWRCB.
FISCAL IMPACT
Funds are available in the current fiscal year, FY 2023-24, to pay estimated administrative and grant fund fees in Water Debt Service, Contract Services- Professional expenditure account (No. 06017020-62300). Principal and interest payments are due annually beginning one year after construction completion date of June 30, 2025. Funds for debt servicing will be budgeted in Water Debt Service, Principal-Debt Services expenditure account (No. 06017020-67100) and Interest-Debt Services expenditure account (No. 06017020-67110) for FY 2025-26 through FY 2054-
55. Loan reimbursement disbursements will be recorded in Water Fund, Notes/Loan Payable account (No. 06001001-27000). The project costs are estimated at $16,634,625 and Staff continues to seek funding to fully fund the delivery of this project.
EXHIBIT(S)
1. Reimbursement Resolution
Submitted By: Nabil Saba, Executive Director Public Works Approved By: Tom Hatch, Interim City Manager