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Staff Report to the Mayor and City Council <br />State Revolving Fund Loan Amendment <br />September 21, 2010 <br />Page 2 <br />ISSUES/ANALYSIS <br />Administration charges are paid by Federal Capitalization Grants, every year the Federal Grant <br />decreases. To continue to fund administration charges, Assembly Bill 1742, Chaptered October 12, <br />2007, allows the State Water Resources Control Board (CWSRF) to assess an annual charge for <br />loan services, not to exceed I% of the outstanding principal loan balance. <br />The loan service charge does not increase the existing annual principal and interest payment nor <br />does it change the outstanding principal balance. A portion of the funds that would have gone to <br />interest will be directed to the loan service charge fund. The State Water Resources Control Board <br />is amending the loan to include the Service Charge language. No other language will be added to <br />the loan agreement. <br />Per Resolution No. R-115-93 states that the City Manager of the City of Colton is hereby authorized <br />to execute the resultant loan agreement and any amendments thereto for the purpose of securing the <br />loan funds. <br />FISCAL IMPACTS <br />The Wastewater Department budgets $558,004 annually in accounts 522-8200-8200-2500 and <br />522-8200-8200-2510 for principal and interest payments. The principal and interest accounts <br />have unencumbered funds in the amount of $1,333,012 and $404,058. <br />ALTERNATIVES <br />Provide alternative direction to staff. <br />ATTACHMENTS <br />Standard Amendment Agreement (Letter dated April 8, 2010 & State Revolving Fund <br />Payment Schedule) <br />2. Letter dated January 25, 1994 and Reso #R-115-93 <br />