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Wohlford Dam project put on hold due to insufficient funds

ESCONDIDO — Rehabilitation of the Wohlford Dam is on hold.

The city of Escondido was alerted to language “deep” into the State Revolving Fund (SRF) loan program, which federal guidelines prohibit the money from being used for dams or the rehabilitation of dams, according to Public Utilities Director Chris McKinney.

The project was slated for completion by the end of 2017.

The City Council previously approved the utility department’s application for $25 million in SRF loan funding.

However, after reviewing the application, the California Department of Water Resources notified the city the project was ineligible for funding.

“We were hoping to cover some of the rising costs with the State Revolving Fund,” McKinney said. “After we got the application submitted, we learned that deep in the language of the federal authorization for this money … there is a prohibition on dams. That leaves us in a bit of a lurch.”

Much of the money for the SRF program comes from federal sources and the state administers the funds to qualifying projects.

The total project cost is projected to be between $45 million and $50 million, although the cost has rise by nearly $20 million since the city identified the project about five years ago.

Although the city was awarded $15 million in matching grant funds from the state and budgeted about $9 million of available funds for the project, there is insufficient money to move forward with the project. An additional $21 million to $26 million is needed, according to a press release from the city.

“The cost of the dam has gone up through the design as we learned what the federal requirements, state requirements and also the site conditions dictate on the design,” McKinney said. “We are trying to fill that gap.”

Pending permits needed from San Diego County, staff had planned to bid the first phase of project (realignment of Oakvale Road) later this summer.

However, additional sources of potential federal funding are presently scheduled for appropriation in one year or later. McKinney said the one-year timeline is because the project would need congressional approval, if funding were secured through those measures.

“We are trying to find other sources of funding,” he added. “Assuming that we are deemed a good project to fund, and congress approves funding, we are looking at a year.”

One of the most promising sources of federal funding is a program administered by the Department of Agriculture to fund dam rehabilitation. McKinney said another option is through the Army Corps of Engineers.

City staff, meanwhile, has been in communication concerning the $15 million in matching grant from the state, according to the city’s release. This grant requires project completion by the end of 2017, which is now not possible.

The grant administrators in the Department of Water Resources, however, have shown a willingness to extend the term of the agreement as necessary to complete the project. Staff in the Division of Safety of Dams, a division of the Department of Water Resources, also supports this extension so the outlook for the state grant funding remains optimistic. 

In 2010, the water level of the lake was lowered by half because a dam assessment showed that the upper portion of the dam wasn’t earthquake proof and could lead to catastrophic flooding of the city.

McKinney said those low levels will remain in place. However, since the lower levels produce less water, the city will generate less power from its 1.5-megawatt hydroelectric generator on the pipeline. In addition, it will cost more to treat the water, but McKinney said the cost is not significant.

“Having the water level lower means there is more of a treatment load,” he explained. “It costs a little bit more to treat the water. It costs some energy abilities.”

Last year, the city received a state grant from the Department of Water Resources to fund half of the project although it came with stipulations.

The city couldn’t receive any other state funds for the project, so McKinney said it took a lot of convincing of the state to become eligible for the loan.

Staff had to argue that the loan wasn’t a form of funding, since it is going to be paid back.

The state loan is much cheaper than bond alternatives, which is why it was important to qualify for the loan, McKinney told the council in 2015.

Another point city staff made to the state was the SRF is largely funded by federal money, so Escondido wouldn’t really be getting additional state funding.