Public Works Director Graham Wadsworth will ask the City Council on Tuesday to support applications for Federal Bureau of Reclamation and State Water Resources Control Board grants that could initiate a major recycled water project at Valero Benicia Refinery.

“As part of its effort to ensure an adequate and sustainable water supply, city staff is pursuing federal and state grant funding for a feasibility study of and facility planning report for a recycled water project that would treat and deliver 2.2 million gallons per day year-round of recycled water from the city’s wastewater treatment plant to the Valero Oil Refinery (Project),” Wadsworth wrote.

He wrote that the feasibility study may cost $303,576, an expense that might be underwritten by a Federal Bureau of Reclamation Title XVI Water Reclamation and Reuse Program WaterSMART grant and one of California’s own Water Resources Control Board Water Recycling Funding Program Water Facilities Planning grants.

“The city applied for the WaterSmart grant on March 3,” he wrote, “and is in the process of preparing an application for the SRWCB planning grant.”

Should Benicia get both grants, $150,000 from the federal grant and $75,000 from the state grant would be applied to the cost, he wrote, with Benicia’s Wastewater Connection Fee Fund picking up the remaining $78,576.

He wrote that the Wastewater Connection Fee Fund has $9 million and could underwrite the city’s portion of the cost.

California’s Sustainable Water Use and Demand Reduction Act requires Benicia to reduce water demand by 20 percent by 2020, Wadsworth wrote. Should the city fail to meet that goal, it would be ineligible for state water grants or loans after July 1, 2016.

“The Valero Refinery uses approximately 50 percent of the water purchased by the city,” he wrote. “The project would recycle year-round up to 2.2 million gallons per day of treated wastewater effluent and deliver it to the Valero refinery to be used for cooling tower makeup water. The project would make a more than 20 percent reduction in water demand.”

Moreover, “The project could save the city 2,500 acre-feet per year, which is about 25 percent of the city’s typical demand, and would provide significant relief to the city’s water problems.”

Benicia has looked at this project for several years, he noted. In 2007 the cost for the project to come on line would have been $31.5 million, but “While there are significant costs, there are also significant benefits,” Wadsworth wrote.

City and Valero staff also have discussed options to reduce the cost, such as adding filtration and ammonia removal treatment to the secondary wastewater treatment at the city plant; adding a conveyance pump station; and building a 2.5-mile pipeline to the refinery.

“If 75 percent of the cost could be paid for by grants and 25 percent of the capital and operating costs could be paid by the wastewater connection fees, Valero and sewer rate payers, then the project is both feasible and cost effective,” Wadsworth wrote.

Should Benicia fail to get the grants, Wadsworth recommends the city pursue the initial study and pay for it through wastewater connection fee money, as “city staff sees the urgent nature of connecting the Valero Refinery with recycled water.”

The Council will meet at 7 p.m. Tuesday in the Council Chamber of City Hall, 250 East L St.

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