The OSL water system does not have adequate source of treatment capacity. In addition, the distribution system is unable to adequately distribute treated water and meet summer water demands. To prevent water outages, Hillview utilizes two sources that do not meet the primary drinking water standard for uranium. One of the two wells is treated; however, the existing treatment system cannot effectively remove the uranium to meet the drinking water standard. The distribution system does not have enough hydraulic capacity to efficiently distribute the treated water. Hillview has implemented mandatory water conservation measures.

The OSL System lacks adequate production, treatment, and distribution capacity, which have produced severe water shortages and the failure to meet certain safe drinking water standards. The water system pumps groundwater from 10 hard rock wells with a capacity of about 780 gpm. The water is treated at two locations (Sierra Lakes and Forest Ridge) to remove iron and manganese. At the Sierra Lakes location the water is treated to remove uranium as well. Treated water and water not needing treatment are distributed through 13 pressure zones and 18 storage tanks.

On May 2002, Hillview submitted to the Merced District Office of the Drinking Water Field Operations Branch a revised engineering report for the proposed project and the focused environmental impact report. There are significant waste disposal issues associated with the uranium removal treatment process for the Sierra Lakes Treatment Plant upgrades that could not be satisfactorily resolved. Therefore, the project was revised to delete the uranium removal improvements and add the construction of five more wells to replace the source capacity of Sierra Lakes Well No. 4.

Hillview 's revised project as presented in its Revised Technical Project Report consists of:

New Wells

Includes the construction of ten new wells due to the elimination of the uranium treatment improvements. The wells would be constructed in an area that has not been previously utilized by Hillview. It has been confirmed that the area has the potential to produce good water. Hillview has drilled a test hole and obtained easements for at least five of the well sites and the transmission line from the well sites to the Sierra Lakes Treatment Plant. It is anticipated that the new wells will produce between 50 and 100 gpm each. The additional production capacity provided by the new wells is needed to meet current demands.

Raw Water Transmission Line

Sierra Lakes Treatment Plant Upgrades

New Storage Tank

Treated Water Transmission Line

Forest Ridge Treatment Plant Upgrades

1. The focused EIR, new wells, new raw water transmission line, new storage tank, new treated water transmission line, and related project costs (i.e., land, easements, legal, administration, engineering, and contingencies) are the highest priority project components and must be funded and completed before the following lower priority project components are funded. The total estimated cost of the high priority project components is $2,293,741.

2. The Sierra Lakes Treatment Plant upgrades ($1,727,000) and the Forest Ridge Treatment Plant upgrades ($62,500) should be funded as prioritized below if funding is available after completion of the highest priority project components specified in Recommendation 2.a.

a. Installation of additional filters at the Sierra Lakes Plant as needed based on the production and water quality of the new wells.

b. Installation of a 100,000-gallon reclamation tank, sludge press, and booster pumps at the Sierra Lakes Plant.

c. Installation of two standby generators at the Sierra Lakes Plant.

d. Installation of a telemetry system at the Sierra Lakes Plant.

e. Installation of an automatic chlorination system at the Forest Ridge Plant.

f. Installation of a standby generator at the Forest Ridge Plant.

Total Estimate

Due to the financial status of the OSL water system, DHS has set a maximum loan amount for Hillview of $3,408,447. Therefore, the project components as stated previously, are to be prioritized since the estimated cost of the proposed project is over $4.0 million.

Environmental Impact

Because Hillview is a private utility, DHS is the lead agency for compliance with environmental impact regulations. DHS has completed an initial study for the project and recommended the completion of a focused environmental impact report. DHS completed a Notice of Preparation of a Draft Environmental Impact report and an Administrative Draft EIR is now under review and comment.

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