Board adopts Clean Water SRF intended use plan amid Prop 4 uncertainty; Quartz Valley tribe seeks loan forgiveness for headwaters acquisition

The State Water Resources Control Board on Aug. 5 adopted the fiscal year 2025–26 Clean Water State Revolving Fund Intended Use Plan, approving a fundable list of loan and grant projects and a modest change sheet the board accepted before the vote.

Division of Financial Assistance Director Lisa Hong told the board the package balances federal capitalization allotments, proposed state Prop 4 (water and environmental bond) appropriations under discussion with the administration and legislature, and an in‑house project demand of roughly $3.8 billion against an estimated funding capacity of about $1.7 billion for the year. Staff said the largest single near‑term source for water‑recycling construction grants would be Proposition 4 appropriations — $150 million had been included in the administration’s May revision — but the enacted budget had not yet finalized those line items, and the administration and legislature were still negotiating a comprehensive Prop 4 expenditure plan.

The board approved staff’s proposed loan list and a revised scenario that added one additional project (the Town of Windsor) to the loan fundable list. The IUP restores a $15 million per‑project maximum for water‑recycling construction grants (previously reduced during budget uncertainty) and proposes a $50 million maximum principal‑forgiveness or grant level for disadvantaged community wastewater projects addressing violations or septic‑to‑sewer conversions. Staff recommended that 10% of anticipated Prop 4 wastewater funds be reserved for technical assistance and noted the Clean Water SRF administrative allowance would continue to fund staff performing program work. The resolution adopted a change sheet reflecting a small textual update and formalized fundable lists.

During public comment, representatives of the Quartz Valley Indian Reservation, Trust for Public Land and other partners urged significant principal forgiveness if a Clean Water SRF loan is used to help the tribe acquire nearly 40,000 acres in the Scott River headwaters for tribal stewardship and restoration. County and city applicants, wastewater agencies and nonprofit advocates supported the IUP and urged continued prioritization of septic‑to‑sewer, small community wastewater and recycling projects. Several commenters requested more technical assistance funding for disadvantaged and small systems; staff said administrative allowances and the proposed 10% Prop 4 set‑aside would be used for TA and that staff would continue to coordinate outreach.

Board members supported the IUP and emphasized the need to push for Proposition 4 appropriations in the final state budget. The roll‑call vote to adopt the intended use plan and change sheet was unanimous.