TO: Board of Supervisors
FROM: Steven Lederer - Director of Public Works
REPORT BY: Sarah Geiss - Staff Services Analyst II
SUBJECT: Napa County Community Facilities District 2012-1 MST FY 2024-25 Budget
RECOMMENDATION
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PUBLIC HEARING 2:00 PM - Fiscal Year 2024-25 Milliken-Sarco-Tulocay (MST) Budget
Conduct a Public Hearing to consider testimony on the Fiscal Year 2024-25 Recommended Budget for a total appropriation of $575,726. (Fiscal Impact $96,850 net expense; MST Fund; Discretionary)
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BACKGROUND
The Milliken-Sarco-Tulocay (MST) basin has been designated as a groundwater deficient area for over 20 years. The County, in conjunction with Napa Sanitation District (NSD), participated in the planning and construction of recycled water pipelines to help alleviate the problem. Construction of the initial MST Recycled Water Pipeline Project was completed in 2016. The construction budget, which was the basis for a 1% State Revolving Fund (SRF) loan and formation of the Community Facilities District (CFD), was $13.2 million, partially offset by a 25% Water Smart grant from the Bureau of Reclamation. During construction, approximately $5 million in additional funding (via grant) was approved by the State, resulting in the final debt amount of $6,889,339 to be repaid over 20 years. Loan repayment commenced one year after project completion, in late 2016. CFD revenue has been collected since 2014 and is being used to repay the loan.
With the project now completed, the CFD special taxes have been recalculated based on the total project costs and current debt levels. Effective Fiscal Year 2022-23 sufficient funding was forecast to meet financial obligations of the CFD, such that no additional base special taxes are anticipated to be collected from CFD members, except for those members who owe catch up taxes based on joining the CFD late. One final round of annexations in Fiscal Year 2023-24 resulted in adequate funding commitments to fully retire the debt service once all catchup taxes have been paid no later than Fiscal Year 2028.
Each new property added to the recycled water system requires a physical connection. NSD has been making these connections and funding the costs using remaining grant revenues from expansion project construction. At this point NSD has used all awarded grant funds and to continue to make the physical connections for new annexations, an amendment to the Agreement with NSD was approved by the Board to reimburse NSD for the cost of connections for any final connections that are made through annexation to the CFD.
The ending balance of the SRF loan as of June 30, 2024 is $1,632,328.33. The final payment of the loan is due on December 31, 2028.
Procedural Requirements:
1. Open Public Hearing.
2. Staff reports.
3. Public comment.
4. Close Public Hearing.
5. Continue item to Tuesday, June 25, 2024 consent calendar.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
No |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
Appropriations will be budgeted accordingly in future fiscal years for the receipt of the approved taxes and repayment of the loans over a total of twenty years. First payment of the loan was made on December 31, 2016. |
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Is the general fund affected? |
No |
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Consequences if not approved: |
The Community Facilities District will not have appropriate expenditure authority to repay the loans incurred. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The Napa County Board of Supervisors, acting as a responsible
agency pursuant to the California Environmental Quality Act (CEQA) and State CEQA Guidelines , Section
15096, has considered the environmental effects of the Project both in a comprehensive Environmental Impact
Report (EIR) - in December 2009 - and in a subsequent Addendum (November 2013). The Federal (NEPA)
aspect of this Project has also been addressed - through both documents - and has been certified by the North
Bay Water Reuse Authority - of which both the County and NSD are members - and its lead agency, the
Sonoma County Water Agency.