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Escalon staff: $10 million shortfall leaves surface‑water conveyance and wastewater upgrades unfinished
Summary
City Manager told the council the surface water conveyance project and a phased $40 million wastewater plant face a roughly $10 million funding gap after unsuccessful grant bids and a misread of a 2019 rate study; staff said they will pursue leases of surface‑water allocation, additional grants and loans while phasing the wastewater work.
City Manager gave the council a quarterly infrastructure update, saying two highest strategic priorities — a surface‑water conveyance project and a long‑planned wastewater treatment plant — remain years from full funding. "We have about a $10,000,000 delta," the City Manager said, summarizing the difference between current funds and estimated project costs.
The city applied for several grants, the manager said, and was unsuccessful for a $3,000,000 WaterSMART Drought Resiliency grant from the Bureau of Reclamation and a $2,000,000 congressional earmark submitted through U.S. Senator Padilla's office. Staff said they have been told an $1,100,000 award is pending congressional budget adoption and would raise the city's available project funds to roughly $4,000,000 if it reaches the federal budget.
Council members pressed staff for clarity on timing and the legal drivers of the project. The City Manager said state law prohibits overdrafting basins and aquifers but does not set a single deadline to move to surface water; he noted both quantity and increasingly stringent water‑quality standards (for constituents such as arsenic and PFOS) are pushing many jurisdictions to diversify sources. Public Works staff said well lifespans vary by site and projected that the city may need to rehabilitate or deepen wells roughly every 7–10 years.
On wastewater, staff described a conceptual roughly $40,000,000 plant and said a phased approach is necessary. They noted the city has addressed many prior notices and a cease‑and‑desist order to reach a more compliant operational state, which has bought time to plan phasing. Staff also signaled a desire to ensure local industry bears an appropriate share of operating costs, estimating industry accounts for about half the plant’s current load.
Staff outlined short‑term options: continue pursuing grants and low‑interest state loans, explore leasing the city’s surface‑water allocation to other entities to create a revenue stream while the city delays construction, or pursue additional borrowing. Council members emphasized caution about passing large loans to ratepayers and requested that staff return with options that minimize direct rate impacts.
The council did not take a formal vote on a funding path at the meeting; staff said they will return with additional financial options and any changes to project phasing when more grant or budget certainty exists.
