With the unanimous approval of up to $15 million in interim financing, Antioch’s planned brackish water desalination plant moves another step forward.
The nearly $70 million project aims to improve the city’s water quality by developing a reliable, drought-resistant water supply that will reduce its dependency on purchased water supplies and allow it to use Sacramento-San Joaquin River Delta water year-round.
Antioch’s current water supply, which mainly comes from the river, serves more than 112,000 residents within 28.8 square miles. But the quantity and quality of the water at the intake is largely impacted by factors outside the city’s control, such as sea level rise, state water operations and other Delta projects, according to city officials.
In his update on Tuesday, City Manager Ron Bernal noted the city is in process of bidding out the contract for the brackish desalination plant and already has secured $92 million in funding it could use for the project.
“This request is to provide $15 million in a line of credit to provide cash flow between when we pay invoices and when we get reimbursed by the state,” he said.
City finance director Dawn Merchant explained that despite state funding and a loan, “there will be a significant amount of time when we’re paying for contractor payments but we won’t have the ability to to draw down on those funds yet.”
These state monies are given on a reimbursement basis, which can take up to 60 days to receive, according to the staff report.
“This is intended to be short-term financial mechanics,” she said, noting it would be paid off by June 2022.
According to the staff report, the city will pay approximately 1% interest on the financial agreement with the Bank of the West.
The main sources of financing for the project include a $27 million state settlement related to the city’s pre-1914 water rights, a $10 million state grant for its design and construction, and $55 million low-interest state revolving fund loan from the Department of Water Resources’ Drinking Water State Revolving Fund.
The financing agreement, called a “drawdown credit facility,” is akin to a commercial line of credit line that will allow the city to access funds when needed and will be repaid by the expected state grant, settlement and loan monies.
Earlier this month, the council approved a $370,000 contract with HB Consulting of Moraga to manage the project, which is expected to take about two years to complete.
Founded in 1850, Antioch has pre-1914 rights to pump water from the Delta. But it cannot do so in the summer and fall, when the river flow is diminished and saltwater intrudes, which has happened more frequently in recent years. That’s when it buys water from the Contra Costa Water District, which it treats itself before delivering.
To avoid this, the city plans to build a plant that will treat and convert 6 million gallons a day of brackish water that it pumps from the…