Montana water pollution control state revolving fund annual report for the state fiscal year ... (July 1, ... through June 30, ...)

168 Pages·2003·5.7 MB·English

by  Montana. Dept. of Environmental Quality

/ 363.7394
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MONTANA
2003
WATER POLLUTION CONTROL
STATE REVOLVING FUND
ANNUAL
REPORT
FOR STATE FISCAL YEAR
2003
(JULY 2002, THROUGH JUNE 30, 2003)
1,
Prepared by
Montana Department of Environmental Quality
and
Montana Department of Natural Resources
and Conservation
Nx
Montana Department of
Environmental Quality
^^^
DOCUMENTS
COLLECTION
EPA
for Region VIII dec
—7 :> 2003
MONTANA
STATE LIBRAPy
November 2003 '""^ ^"-..0
MONTANASTATELIBRARY
3 0864 1002 4192 9
MONTANA
WATER POLLUTION CONTROL STATE REVOLVING FUND (WPCSRF)
ANNUAL REPORT
STATE FISCAL YEAR (SFY) 2003
TABLE OF CONTENTS
INTRODUCTION
I. 1
EXECUTIVE SUMMARY SFY03
II. 1
III. GOALS AND OBJECTIVES OF THE WPCSRF 2
IV. FINANCIAL REPORTS 9
V. DETAILS OF WPCSRF ACTIVITY 9
VI. ^GRANT CONDITIONS AND CERTIFICATIONS 17
VII. CURRENT STATUS AND PROPOSED IMPROVEMENTS 18
VIII. GLOSSARY OF ACRONYMS AND INITIALIZATIONS 19
EXHIBITS
Exhibit 1 : Sources of WPCSRF Funds Through SFY03 20
Exhibit 2: WPCSRF SFY03 Binding Commitments Executed 22
Exhibit 3: WPCSRF Capitalized Grant Closed Loans For SFY03 23
Exhibit 4: WPCSRF Recycled Closed Loans ForSFY03 24
Exhibit 5: WPCSRF Projected Binding Commitments SFY04 25
Exhibit 6: WPCSRF Transferred Recycled Funds For the Drinking Water SRF 26
Exhibit/: History ofWPCSRF Status of 120% Binding Commitments 27
Exhibits: SFY03 Summary ofWPCSRF Federal Loc-Ach Draws 29
Exhibit 9: WPCSRF Loans - MBE/WBE for Contracts Awarded During SFY03 31
APPENDICES
Appendix A: SFY03 WPCSRF State of Montana Cash Flow Model A-1
Appendix B: SFY03 Financial Statements Unaudited with Footnotes B-1
Montana Water Pollution Control State Revolving Fund
Annual Report for EPA
MONTANA
WATER POLLUTION CONTROL STATE REVOLVING FUND (WPCSRF)
ANNUAL REPORT
STATE FISCAL YEAR (SFY) 2003
INTRODUCTION
This annual report adheres to the Operating Agreement negotiated between the State of
Montana and the Environmental Protection Agency (EPA) concerning the administration
of the Water Pollution Control State Revolving Fund (WPCSRF). The annual report
summarizes WPCSRF activities for the state fiscal period beginning July 1 , 2002 and
ending June 30, 2003 (SFY03).
The SRF program v\/as established as a result of the 1987 Amendments to the Federal
Clean Water Act that provided the authority for EPA to make capitalization grants to
states. The grants, in conjunction with state matching funds, are used to provide financial
assistance for the construction ofwater pollution control projects and to support _
administration of the state program.
The 1989 State Legislature, under Title 75, Chapters, Part 11, Montana Code
Annotated, passed the enabling legislation, entitled the Montana Wastewater Treatment
Revolving Fund Act, giving authority to the Montana Department of Environmental
Quality (DEQ) and the Department of Natural Resources and Consen/ation (DNRC) to
adopt administrative rules to implement the program. Legislation also provided ability to
generate state match funds, through the sale of State General Obligation (GO) Bonds.
Amendments to the Wastewater Treatment Revolving Fund Act were passed in the
1991, 1995, 1997, 1999, 2001, and 2003 Legislative Sessions. The 1997 amendments
changed the title of the act from "Wastewater Treatment Revolving Fund Act" to the
"Water Pollution Control State Revolving Fund (WPCSRF) Act" and added non-point
source projects to the project definition. During the 1999 Legislative Session, the 1999
amendment clarified the transfer language between the Drinking Water State Revolving
Fund (DWSRF) and WPCSRF Programs and added GO Bond Authority. During the
2001 Legislative Session the definition of non-point source project was expanded. The
2003 Legislative Session added $10 million to the program bond issuance authority.
EXECUTIVE SUMMARY SFY03
During SFY03 Montana applied and received the 2002 and 2003 capitalization grants in
the amounts of $6,698,265 and $6,467,800.
Through SFY03 Montana has been awarded fifteen capitalization grants for a total of
$102,445,265. These federal grant funds were appropriated by Congress to the State of
Montana from FFY89 through FFY03 (See Exhibit 1).
Since the inception of the WPCSRF, Montana has issued seven GO Bonds and two
Bond Anticipation Notes (BAN), the proceeds ofwhich are used as state match for loans
and program administration. Montana issued its first GO bond on June 1, 1991 (SFY91),
second GO bond August 15, 1995 (SFY95), its third GO bond on June 15, 1996 (SFY96)
itsfourth GO bond on March 15, 1998 (SFY98), its fifth GO bond on April 26, 2000, sixth
GO bond on June 15, 2001, and its seventh GO Bond on June 26, 2003. The total
amounts of bonds issued to date total $19,815,000. A summary of these bond issues is
provided in Exhibit 1 . Montana is planning for its eighth GO Bond in calendar year 2004.
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Montana Water Pollution Control State Revolving Fund
Annual Report for EPA
Exhibit 1, Sources ofWPCSRF Funds Through SFY03, provides a complete tabulation
of capitalization grant awards received through June 30, 2003, projected state match,
binding commitments for loan projects and program administration for SFY91 through
SFY03, and GO bonds and BANs issued for state match. The combination of
capitalization grants and bond proceeds provide the needed funds for WPCSRF projects
and program administration during SFY03. In addition, DNRC has provided a portion of
their program administration services as an in-kind contribution. In SFY03, DNRC had $0
in-kind contribution.
During SFY03, the WPCSRF program executed fourteen project binding commitment
agreements totaling $33,770,315 and increased two prior year commitments in the
amount of $1 ,904,000. Our total commitment of funds was $35,674,315 for the period
(See Exhibit 2). The program closed seventeen WPCSRF loans in SFY03 (See Exhibits
3 and 4) for $26,305,315. Relevant dates and project information has been entered into
the National Information Management System and the aggregate information submitted
to Clean Water On-line.
There were ten projects listed on the SFY03 Intended Use Plan (lUP) and Project Priority
List (PPL), which were targeted to sign binding commitments during SFY03. Sixteen
WPCSRF
projects executed binding commitments, which includes two increases. Exhibit
5, WPCSRF Projected Binding Commitments SFY04, provides a summary of projected
SFY04 binding commitments. WPCSRF project activity continues with the review of
facility plans for potential projects. In SFY03, we received approximately ten facility plans.
We
anticipate several of the projects that are completing the facility-planning phase to
commit to WPCSRF loans in SFY04.
In SFY03, the WPCSRF transferred $0 to the State Drinking Water SRF program (See
Exhibit 6). The DWSRF may transfer funds back, if needed, in the future.
WPCSRF
Detailed information concerning use of funds, accomplishments of the
program and adherence with the stated goals of the program is provided on the following
pages.
GOALS AND OBJECTIVES OF THE WPCSRF
III.
The lUP prepared for the WPCSRF identifies the long and short-term goals and
objectives of the State in managing the program. The State continued to achieve
satisfactory progress toward meeting these goals and objectives during SFY03.
A. Long-term Goals:
A. The long-term goal ofthe State Water Pollution Control Revolving Fund is to maintain,
restore and enhance the chemical, physical and biological integrity of the State's waters
for the benefit of the overall environment and the protection of public health;
Projects Provided Funding SFY03
The SFY03 WPCSRF projects, as described in the following paragraphs, assist Montana
in achieving this goal.
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Montana Water Pollution Control State Revolving Fund
Annual Report for EPA
The City of Augusta project activity includes the construction of new total retention
ponds. The new treatment ponds are replacing the District's previous single facultative
pond, which requires drainage and proper reclamation. The project has assisted the
State of Montana in meeting its lUP goals by replacing an old leaking lagoon with a
complete retention treatment facility and replacing substandard collection lines that
clogged and backed up, both which were threatening public health.
The Big Sky Water and Sewer District #363 project consists of construction of a new
Sequencing Batch Reactor (SBR) mechanical wastewater treatment facility along with
two new booster pump stations and a forcemain to Yellowstone Club's storage ponds.
The treatment facility consists of a new headworks building with screening and grit
removal, SBR treatment basins, aerobic digesters, a composting facility and various
equipment and site improvements. The District is currently under a DEQ compliance
order and upgrading the facility will allow the District to comply with State rules and
regulations.
The City of Belgrade (Phase II) project included the conversion of the four-cell
facultative lagoon system to a two-cell aerated lagoon system with an aerated storage
cell. Three sets of infiltration/percolation cells and a spray irrigation system, including a
turf runway for the adjacent Gallatin Field airport. The project will result in improved
treatment performance within the new lagoons and a reduction in groundwater pollution
by spraying the treated effluent at agronomic rates.
The City of Big Timber project replaced the old aerated lagoon, which leaked
excessively to the local groundwater and had occasional MPDES permit violations. The
new four-cell aerated wastewater treatment system will be lined to protect groundwater
and has the operational flexibility to eliminate permit violations, protecting the water
quality of the Boulder River.
The City of Choteau project (second phase) consisted of replacement of gravity sewer
mains. The project should help eliminate inflow and infiltration in this area of high
groundwater, reduce hydraulic loading to the treatment system and improve treatment
efficiency.
The City of Colstrip Collection System Improvements (Phase II) project included the
replacement of over 3,600 lineal feet of 8-inch, 10-inch, and 15-inch diameter sewer
main with conventional gravity main, slip-lining an additional 2,000 lineal feet of 8-inch
and 10-inch diameter sewer main, and the replacement oftwenty-three manholes. This is
the second phase of construction to replace a large portion of a badly deteriorated
wastewater collection system. The project assists the State of Montana in meeting its
lUP goals by rehabilitating and replacing old leaking collection mains and reducing
impacts to groundwater.
The DNRC/RDB III DNRC/RDB IV, DNRC/RDB V, and DRNC/RDB VI projects consist
of constructing water quality related projects that fall under Montana's 319 Non-point
Source Management Plan. The majority ofthese projects have consisted ofthe
installation of center pivot irrigation systems. These projects benefit water quality by
reducing or eliminating stream diversions; eliminating return flows; reducing erosion; and
reducing water usage.
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Montana Water Pollution Control State Revolving Fund
Annual Report for EPA
The City of East Helena project includes the construction of an activated sludge
extended aeration treatment facility with sludge stabilization, thickening and dewatering
as well as ultraviolet disinfection. The project will assist the State of Montana in meetings
its lUP goals by removing ammonia from the East Helena discharge to Prickly Pear
Creek thus preventing ammonia toxicity in this receiving stream.
The Town of Geraldine project included the construction of a new two-cell accelerated
facultative lagoon treatment system to replace a single cell facultative lagoon, which over
several years had experienced numerous discharge violations. The project involved the
installation of two wind-driven mixers, a synthetic liner, new piping and discharge
structures. The project has assisted the State of Montana in meeting its lUP goals by
improving treatment and eliminating discharge violations.
The City of Helena project activity includes the construction of improvements to the
existing wastewater treatment plant and upgrading to an advanced secondary treatment
plant. This project has assisted the State of Montana in meeting its lUP goals by
replacing outdated, failing equipment that may directly impact effluent quality and
upgrading the plant to an advanced secondary treatment system that will meet MPDES
permit effluent toxicity requirements.
The City of Great Falls project includes the construction oftwo anaerobic digesters,
.
new digester control building, new centrifuges for sludge dewatering and the
replacement of nonpotable water piping throughout the plant. The new sludge processes
replace the existing high pressure, high temperature Zempro stabilization process and
some old vacuum filter presses. The improvements should help provide reliable sludge
stabilization and dewatering processes and should improve effluent quality by removing a
significant soluble BOD load to the treatment facility from the Zempro process.
The Town of Kevin project included pre-design activities forthe construction of a new lift
station and three-cell facultative lagoon equipped with mixers. Specific activities include
engineering costs associated with the preparation of grant applications, the purchase
and installation of an influent flow meter, the refinancing of an existing loan, and
administrative costs. This project has assisted the State of Montana in meeting its lUP
goals by enabling the Town to proceed with the design and construction of a new
wastewater treatment facility. Improved treatment by the new system should eliminate
permit violations.
The Town of Lavina project includes the replacement of collection mains that are
susceptible to infiltration during the high groundwater season, and the construction of a
new lift station, force main and three-cell facultative lagoon. The existing single-cell
facultative lagoon is undersized for current flows and leaks marginally treated wastewater
to the groundwater. The project has assisted the State of Montana in meeting its lUP
goals by eliminating a leaking lagoon and improving treatment.
The Town of Manhattan project, completed early in SFY02, included the replacement of
several thousand feet of leaking collection line and the removal of sludge from their
lagoon. Treatment performance should improve due to the reduction in infiltration in the
collection system and the increased detention time in the lagoons from the removal of the
sludge. Some project expenses were carried over into SFY03. The next phase of the
project will include conversion of the existing facultative cells to aerated cells, adding a
storage cell, spray irrigation and UV disinfection.
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Montana Water Pollution Control State Revolving Fund
Annual Report for EPA
The City of Missoula, SID #524 - South Storm Drain project activity includes the ^
construction of a storm drain system to serve tine south area of the city. The project C
assisted the State of Montana in meeting its lUP goals by protecting the City's sole-
source aquifer and public health.
The City of Missoula - 39"^ St./SW Higgins-Bellevue Interceptor project activity
includes the construction of STEP and gravity sewer lines. Increasing the number of
properties hooked-up to the sewer system is a high priority ofthe City. This project is an
important component ofthe process of protecting Missoula's sole-source aquifer and the
water quality of the Clark Fork and Bitterroot Rivers.
The Missoula County RSID 8473 (Lolo) project, completed in early SFY03, included the
construction of a new secondary clarifier, aerobic digester and the modification and
expansion ofthe aeration basin and aeration system. The project will expand the
treatment plant capacity to accommodate rapid growth in the area and improve treatment
efficiency.
The Nashua project included alteration ofthe existing two-cell lagoon to a three-cell
alangdoornepwliatcheamennetwoflisneormaendsepwiepirngl.inAesl.soThiinsclpurdoejedcwterreeplraecceodnsatrluecatkiionngolfaagonoonldleliaftksitnagtion
sewer collection lines and an old lift station. The project assisted the State of Montana in
meeting lUP goals by replacing a leaking lagoon and leaking sewer collection lines and
an old lift station, which have impacted surface and groundwater.
The North Montana Joint Refuse Disposal District project consists of refinancing
some of the current debt for the District. The District constructed a landfill and related (
equipment in the early 1990's. The reduction in interest rate will result in a cost savings to
the users in the District. The Refuse Disposal District serves some communities
in
Glacier, Pondera, and Teton Counties.
The Park City County Water and Sewer District project consists of construction ofa
three-cell aerated treatment lagoon and an open channel UV system, upgrades to the
community's central lift station, and replacement ofthe existing lift station at the lagoon
site with a new package lift station. The project has assisted the State of Montana in
meeting its lUP goals by eliminating excessive leakage to groundwater and improvinq
treatment. ^
The Phillips CountyWhitewaterWater and Sewer
District project includes the
construction of a central wastewater collection and treatment system to replace individual
on-site septic tanks and drainfields. Specific activities included the construction ofa
standard gravity collection system, a lift station, force main, and a two-cell total retention
treatment lagoon. The project has assisted the State of Montana in meeting its lUP goals
by eliminating the discharges from the on-site treatment systems to the shallow
groundwater aquifer that the residents of Whitewater utilize for their potable water Some
of the wells in the area have experienced bacteriological contamination as well as nitrate
levels in the 2 to 5 mg/l range. In past years, nitrate levels in the school well have
exceeded 10 mg/l. The Whitewater school system is currently required by DEQ to treat
water supplied to the school drinking fountain because of high nitrate levels A reverse
osmosis filter has been installed to comply with this order.
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Montana Water Pollution Control State Revolving Fund
Annual Report for EPA
The South Hills/City of Billings project consisted of paying fees assessed to the
residents of the Briarwood Subdivision in the South Hills planning area to compensate for
costs associated with hookups to the City sewer system. The project has assisted the
State of Montana in meeting its lUP goals by enabling the City to provide service to local
users by replacing an inadequate on-site treatment plant and abandon septic tanks that
may contribute to the degradation of local groundwater.
The Sweet Grass Water and Sewer District project included the construction of a two-
cell facultative lagoon treatment system to replace a single-cell facultative lagoon, which
is leaking significantly. The project will involve the installation of a divider dike, a synthetic
liner, new piping and discharge structures. The project has assisted the State of Montana
in meeting its lUP goals by eliminating a leaking lagoon and improving treatment.
The West Yellowstone National Park/Hebgen Basin Solid Waste District project
consists of the construction of a solid waste handling and composting plant for Gallatin
County and the West Yellowstone National Park area. The District will accept solid waste
and biosolids from Yellowstone National Park facilities and the West Yellowstone
National Park area. It is estimated that approximately 50% of the incoming waste will be
composted for reuse, which will increase the life ofthe current landfill and reduce hauling
costs considerably.
The City of Whiteflsh project consisted of removal of a large amount of biological and
chemical sludge from the wastewater treatment lagoons and replacement ofthe blowers
and aeration system for the aerated lagoon cells. These upgrades will help Montana
meet its lUP goals by improving treatment efficiency, reliability and effluent quality, thus
reducing the pollutant load to the Whitefish River.
B. Long-term Objectives:
1 Provide affordable financial assistance for eligible applicants concurrent with the
WPCSRF
objective of maintaining a long-term, self-sustaining Program;
Projects funded this fiscal year met all program requirements governing financial
capability to assume debt, and eleven of sixteen commitments received an interest rate
of4.0% (well below market rates) and five of the sixteen commitments received an
interest rate of 3.0% (interim financing commitments or disadvantaged communities).
These factors illustrate that the assistance is affordable. A copy of the cash flow with all
the activity through SFY03 is included in the report as Appendix A. The cash flow
We
spreadsheets are updated on a monthly basis to track the activity ofthe program.
continue to look at the program variables to determine the impact they would have on the
long-term fiscal health of the WPCSRF. Some ofthe variables identified were:
lowering interest rates
providing small grants from second-round funds
receiving prepayments of Special Improvement District (SID) Bond and Rural
Special Improvement District (RSID) Bond loans.
2. Fulfill the requirements of pertinent federal, state and local laws and regulations
governing water pollution control activities, while providing the state and local project
sponsors with maximum flexibility and decision-making authority regarding such
^
activities.
The WPCSRF Handbook of Procedures and Montana's Operating Agreement, updated
in SFYOO, is used as a guide to ensure that all state and federal laws governing the
technical aspects of each project are satisfied.
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Montana Water Pollution Control State Revolving Fund
Annual Report for EPA
The input ofthe state's bond counsel and the local borrowers' counsel is used to ensure
that laws regarding the acquisition of debt have been satisfied.
C. Short-term Goal:
1. The short-term goal of the WPCSRF is to continue to improve the quality ofthe state's
waters (surface and groundwater), meet the wastewater treatment needs ofthe state,
and eliminate any public health hazards related to the discharge of inadequately treated
wastewater.
This goal is addressed by the types ofwastewater and non-point source projects that the
WPCSRF
has financed. Details of these projects are discussed in the long-term goals of
the program (refer to Goals Section III.A.1). Project construction and projects in operation
move the WPCSRF toward attaining this goal, one project at a time.
D. Short-term Objectives:
WPCSRF
1 Maintain and promote the Program, which provides low interest financing (up
to 100 percent loans) for municipal wastewater facilities and eligible non-point source
projects.
Program stafffrom DEQ and DNRC continued holding bi-monthly meetings in SFY03.
From the inception of the WPCSRF through the end of SFY03, the WPCSRF has
executed one hundred sixteen loan binding commitment agreements and closed one
hundred nine loans at "below market interest rates." The WPCSRF Loan Program has
developed affordability and hardship criteria. It uses a target rate analysis for making
infrastructure projects affordable thatwas developed by other Montana funding agencies.
It was implemented in SFY98.
Enclosed is a copy ofthe cash flow model. Appendix A, this report show the bonds
issued and all loans closed through June 30, 2003.
WPCSRF WPCSRF
Staff presented loan information at six infrastructure conferences,
the joint water and wastewater conference, the water school as well as meetings one-on-
one with community leaders. With the addition of nonpoint source projects, interim
financing, and the DWSRF, the Program funds a diverse group of projects. A brochure
has been developed for the program along with a display board. In SFY01 a video was
developed to feature all of Montana funding agencies including WPCSRF. Our marketing
has been successful as we have commitment agreements in the amount of 199%. In
SFY04, WPCSRF staffwill work with other agencies to develop anothervideo on capitol
improvement planning and financing.
WPCSRF
2. Ensure the technical integrity of projects through the review of planning,
design plans and specifications, construction activities and development of a sound
operation and maintenance program.
The trained technical staff of the Planning, Prevention and Assistance Division (PPAD)
continues to use the WPCSRF Handbook of Procedures and knowledge gained from ten
years ofoperating the WPCSRF Program to ensure that this objective is met.
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