FOR THE COUNCIL MEETING OF AUGUST 20, 2024
COUNCIL AGENDA REPORT
TO: City Council
FROM: Interim City Manager Alex Posada
BY: Director of Utilities Shad S. Springer
SUBJECT: Adoption of a Resolution Designating an Authorized Representative for a Financial Agreement with the State Water Resources Control Board for the Ray Water Company Consolidation
Description:
The City Council will consider adopting a Resolution designating the Director of Utilities as the authorized representative for a financial agreement with the State Water Resources Control Board for the Ray Water Company Consolidation.
Environmental Notice: The City Council approved a mitigated negative declaration and mitigation monitoring program for the proposed project on October 4, 2022. No further environmental review required.
RECOMMENDATION:
Adopt a Resolution designating an Authorized Representative for a Financial Agreement with the State Water Resources Control Board for the Ray Water Company Consolidation.
BACKGROUND:
Ray Water Company (RWC) is a small water company located just outside the city limits of the City of Santa Maria (City), in unincorporated Santa Barbara County, serving properties located south of Mahoney Road at the E Street alignment (Attachment A – Vicinity Map). The properties se rved by RWC are surrounded by City jurisdiction to the north, east, and south. RWC was issued a Santa Barbara County water system permit in 1976 but the water system existed prior to that.
RWC has been governed by various appointed residents of the water system, which have changed over time. Currently, ownership is equally distributed among ten residents.
There are a total of 13 service connections (11 residential, 2 commercial) serving a population of approximately 45 residents. RWC utilizes groundwater as its drinking water source. The capacity of this source is unknown, because RWC does not meter the well or regularly monitor depth to groundwater. In addition, the RWC system uses one steel water storage tank.
Over the years, RWC has had ongoing difficul ties meeting regulatory requirements, primarily due to aging and outdated infrastructure. RWC has received numerous notices of violation from Santa Barbara County dating back to 1980. The most relevant violation 2 includes repeated nitrate concentrations above the maximum contaminant levels (MCL), but also other violations such as coliform bacteria detections, failure to perform required analytical testing, failure to properly inform residents of MCL exceedances, and failure to resolve the nitrate issue. Sant a Barbara County issued RWC an enforcement action Compliance Order on March 6, 2020, due to ongoing nitrate concentrations above the MCL. The Compliance Order required RWC to inform all residents of the elevated nitrate concentrations, submit a progress re port, and submit a corrective action plan to resolve the nitrate issue.
Through a technical assistance grant with the State of California, Weber, Hayes & Associates assisted RWC by preparing an engineering report and assisting in a proposed project to res olve the violations of the Compliance Order. The proposed project is a consolidation of RWC with the City’s water system. In order to serve RWC and connect to the City’s water system, a City water main is proposed to extend approximately 3,400 feet along Betteravia Road, from the intersection of Betteravia Road and A Street to the intersection Mahoney Road and Rayville Lane. At the intersection of Mahoney Road and Rayville Lane, the water main transitions into an 8 -inch water distribution line. This distribution line will connect the City water main to each of the 15 proposed service connections on Rayville Lane. Once construction is complete, the current RWC customers will become City water customers.
At its meeting on October 4, 2022, the City Council adop ted a Mitigated Negative Declaration (MND) and Mitigation Monitoring Program for the proposed project. In addition, the City Council authorized an application to the Santa Barabara Local Agency Formation Commission (LAFCO) as the City’s p rovision of domestic water to properties outside the City boundary requires approval from LAFCO . LAFCO approved an Out -of- Agency Service Agreement at its April 6, 2023 meeting for the City to serve the properties of RWC.
DISCUSSION:
Weber, Hayes & Associates has nearly co mpleted the design of the proposed project, along with necessary easements for the proposed City waterline and service connections to each customer. Those plans have been reviewed by the City’s Public Works Department, Engineering Division for compliance w ith City standards. The next step for the project is submission of the design package and supporting documentation to the State Water Resources Control Board for consideration of funding.
While developing the project, it was discovered that RWC was never formally incorporated. As such, it is not possible for the State Water Resources Control Board to enter agreements with RWC for the construction of the proposed project. In addition, the funding provided will require commitments of the receiving agency for a set period. After consolidation with the City, RWC will no longer exist. Therefore, the State Water Resources Control Board has indicated that it is preferred to have the City submit a financial assistance application and enter the financial agreements for the project.
A requirement of the financial assistance application is a Resolution of the City to designate an authorized representative who may file a financial assistance application .
The authorized representative will also provide the assurances, ce rtifications, and 3 commitments required for the application, including executing a financial assistance agreement with the State Water Resources Control Board. In addition, the authorized representative is designated to represent the City in carrying out the City’s responsibilities under the financing agreement, including certifying disbursement requests on behalf of the City and compliance with applicable state and federal laws.
It is intended that all costs associated with the project will not be the responsibility of the City. The funding will come from the State Water Resources Control Board or any source other than the City. Therefore, the Resolution indicates that the execution of a financial assistance agreement with the State Water Resour ces Control Board is subject to negotiation and approval as to form by the City Attorney and the City Manager.
Should funding be available and the City agree to the terms of a financial assistance agreement, the City will be responsible for constructing the project, which would include the abandonment of the RWC facilities (steel tank and well). Upon completion, the water main, distribution line, and meters will become City -owned and current RWC customers will become City water customers.
Alternatives
1. The City Council may choose to designate someone other than the Director of Utilities as the authorized representative for application to the State Water Resources Control Board. Staff does not recommend this alternative as the Director of Utilities is most familiar with the project.
2. The City Council may choose not to authorize a City representative to submit the application to the State Water Resources Control Board. This will end the City’s involvement in construction of the project. Staff does not recommend this alternative as there is no other entity that can enter agreement with the State Water Resources Control Board and complete the project.
Fiscal Considerations
The costs for the project will be funded by sources other than the City. The requested action will allow the City to pursue funding from the State Water Resources Control Board for the project.
Impact to the Community
The extension of the City’s water system to serve the current customers of the Ray Water Company will allow those customers to receive water that meets the requirements of the Safe Drinking Water Act.
Other Agency Review
The State Water Resources Control Board has reviewed and approved the Resolution as to meeting the needs for submission of a financial assistance application.
ATTACHMENTS
Attachment A – Vicinity Map