Adopt resolution authorizing the Director of Community Services to sign the Financing Agreement, Amendments and Certifications required for a State Revolving Fund loan to finance the North Davis Meadows Water System Consolidation Project, and adopt a second addendum to the Initial Study/Negative Declaration for the project pursuant to California Environmental Quality Act. (No general fund impact) (Echiburu/Villa)

Background
Since 2009, the North Davis Meadows County Service Area (CSA) has been working toward a permanent solution for mitigation of water quality concerns in the community's public water system, most notably nitrate, hexavalent chromium, aluminum and iron in excess of maximum contaminant levels (MCLs). Absent progress toward a viable solution, the community is at risk for $1,000 fines per day, per constituent over the MCL (currently $3,000 per day absent an MCL for hexavalent chromium).

After assessing a variety of options for providing a potable water supply that meets all drinking water standards, including treatment at the well-head and drilling deep wells, the North Davis Meadows CSA Advisory Committee and the community concluded that consolidating with the City of Davis public water system was the most reliable and cost-effective method to comply with California drinking water regulations and to ensure the health and safety, including fire protection, for the residents of North Davis Meadows ("the Project").

On September 27, 2016, the Board of Supervisors approved an agreement for the Project design work related to extending City of Davis water to the North Davis Meadows community, following the adoption of the Initial Study/Negative Declaration. An addendum to the Negative Declaration was later adopted by the Board of Supervisors on March 20, 2018.  Also on March 20, 2018, the Board approved water rate increases to pay for the Project and approved various resolutions required by the State Water Resources Control Board (SWRCB) to secure favorable Project financing through the State Revolving Fund (SRF) program.  

Project Update
The project was paused in 2018 due to litigation.  In 2021, after the litigation was resolved in the County's favor, County staff revived efforts to obtain funding through the SRF program.  Staff secured a grant in the amount of $7.6 Million for the Project ($80,000 per parcel) from the SWRCB.  The completed financial agreement, including the grant funding and remaining SRF financing, is anticipated to be brought to the Board for approval in early 2023.   Staff is requesting adoption of the resolution identifying the "authorized representative" on behalf of the County who may sign the SRF financing agreement and other Project documents on behalf of the County, as required by the SWRCB.  The initial authorizing resolution identified the County Administrator as the "authorized representative" (Resolution No. 18-30).  The proposed resolution updates the prior authorization to designate the Director of Community Services as the County's "authorized representative" in order to streamline the signature process once the SRF financing agreement review process is completed.

At the State's request, a second addendum (Addendum #2, Attachment D) to the Initial Study/Negative Declaration was prepared and is being presented for the Board's approval that addresses minor changes to the Project including the pipeline connections and installation of new water meters at each service connection to address water pressure requirements to provide enhanced fire protection to the community. Addendum #2 also clarifies the required decommissioning of the North Davis Meadows wells #1 and #2 and water storage tank.  The decommissioning of the wells was part of the Project approved by the Board on March 20, 2018, as reflected in items such as the Engineer's Report prepared by Bartle Wells Associates, which specified the well decommissioning Project costs, as well as the notice sent to property owners regarding the March 20, 2018 public hearing, which noted that "[t]he total proposed water fee is expected to decrease once the consolidation project is complete and CSA wells are decommissioned."  Based upon the information provided in Addendum #2, the minor changes to the Project and Project description described therein will not result in new significant impacts or substantially increase the severity of impacts previously identified in the IS/ND, and there are no previously infeasible alternatives that are now feasible. None of the other factors set forth in CEQA Guidelines Section 15162(a)(3) are present. Therefore, the second addendum to the NDM Water Consolidation Project IS/ND and first addendum is appropriate pursuant to Section 15164 of the CEQA Guidelines.  An addendum to an IS/ND "need not be circulated for public review and comment." (14 Cal. Code Regs. §15164(c).)  The IS/ND and Addendum #1 are also attached for reference (Attachments B and C). 

Recommendation
Staff recommends the approval of a resolution authorizing the Director of Community Services to sign the SRF financing agreement, all corresponding amendments, and certifications required by the SWRCB, and the approval of the second addendum to the IS/ND previously approved for this Project pursuant to the California Environmental Quality Act. 

North Davis Meadows Community Services Advisory Committee, County Counsel, Planning Division of Community Services, California State Water Board, Ponticello Engineering