EDA grant termination: opportunity or loss

Lauren Steinheimer

Reactions to the termination of Mount Shasta’s $3 million EDA grant are varied. Some see the situation as an opportunity for change, while others express despair at the loss of funding and project setback.

The city is in the process of applying for loans to pay for the wastewater treatment plant upgrades and attempting to recover hundreds of thousands of dollars that were spent in the past two years on engineering and planning for the two projects it hoped the EDA would help fund.

On Feb. 11, 2016, the EDA sent a termination letter to the City of Mount Shasta, stating they determined an Environmental Impact Statement must be prepared and considered for the upgrade of the Mount Shasta wastewater treatment plant.

“Because of the length of time required for such a review, EDA has determined that the award must be terminated,” the letter states.

The $3 million loss could mean Mount Shasta’s rate payers will be charged about $2,000 per connection to cover the costs.

Opportunity for change

“I think it’s an amazing letter,” said citizen Vicki Gold of Water Flows Free, one of the groups campaigning for environmental review of the bottling plant. “I don’t see this as a victory, but I do see it as an opportunity.”

Gold said she sees it as an opportunity for the city and county to prepare for the next time a similar situation arises. “It’s an opportunity for awareness about fiduciary responsibility to the citizens from day one,” she said.

“Mount Shasta is a progressive beacon to the world and we need to set an example. Production of plastic bottles is an idea whose time has passed. We need to consider the air and water quality because we are Mount Shasta. That’s why people come here,” she said.

Disappointing loss

“This is a huge loss for the City of Mount Shasta,” said council member Geoff Harkness.

He explained that Mount Shasta water rate payers will likely have to pick up the $3 million tab. With approximately 1,800 connections, that’s roughly $2,000 per water customer, a cost that would be spread out over time.

On behalf of the WATER group, Bruce Hillman said, “We would like to state that we’re very sad the grant was terminated.

“However,” he continued, “even the EDA thinks there should be environmental review.”

On behalf of Crystal Geyser, representative Steve Burns said, “We have submitted our generator and wastewater permit applications and are waiting to hear a determination from the city and the county. We have stated and continue to say we would fully support the CEQA process if the city or county makes a determination that the permit is discretionary.”

Financial and

environmental effects

During an informational presentation about the wastewater treatment plant in December, Paul Reuter of PACE Engineering said the increase would probably be something like $5 per month for rate payers.

Harkness points out that without the EDA grant the city won’t be able to upgrade the wastewater treatment plant in time to meet the state’s deadline of June, 2017 for new requirements regarding copper, zinc and ammonia.

City finance director Muriel Terrell confirmed that the city is in the process of applying for loans to fund the wastewater treatment plant in the 3% to 6% interest range.

Construction will be delayed until funding is procured.

Harkness added that the delay in improvements to the wastewater treatment plant will have its own environmental impact since the city’s effluent will continue to be dumped into the Sacramento River for a longer period of time.

City manager Paul Eckert pointed out that the city has spent a lot of time and money preparing two projects based on the EDA grant award.

The total amount spent on the two EDA projects is approximately $335,000, according to Terrell.

EDA’s letter requested the city submit proof of project costs, which Terrell said may be a way to recover the allowable grant cost that the city has incurred on behalf of the projects.


The grant was initially awarded to the City of Mount Shasta in September, 2013 for a sewer interceptor line improvement project. Crystal Geyser was listed as the project beneficiary and had agreed to match the $3 million with its own funds.

In January 2014, the EDA pulled that funding from the interceptor line upgrade because “EDA learned that the city planned to use award funds to prepare the EIR,” according to the EDA’s termination letter. Award funds must be used for construction projects, not environmental review.

The city had to re-apply for the grant and amend it in order to apply that award to the wastewater treatment plant upgrade instead. The EDA approved the amendment in January, 2015.

The city’s wastewater treatment plant is in need of an upgrade to meet state requirements by 2017, so the city developed a separate portion of that upgrade to use the EDA funds and meet construction deadlines dictated by the grant. The EDA-funded plant upgrade included UV treatment and filtration.

Harkness said EDA was notified that Crystal Geyser was no longer the beneficiary and no longer involved.

“Once the grant changed to the wastewater treatment plant upgrade, Crystal Geyser was no longer in the picture,” said company representative Steve Burns. He added, “like many citizens of Mount Shasta, we’re disappointed with the loss of the EDA grant.”

Gold said Crystal Geyser never should have been listed as a beneficiary and that the city should have tried harder to annex that property after Coca-Cola left. She said she has been warning the city of “a tsunami of public opinion” coming their way from the very beginning.

EIR battle

The EDA’s letter points to the need for potentially lengthy environmental review, which Harkness said could take anywhere from six months to four years.

Mount Shasta issued a Proposed Mitigated Negative Declaration and Initial Study for the plant in November, 2015. The EDA letter notes “significantly, although anticipating the need for increased capacity at the WWTP from the Crystal Geyser facility, the MND/IS did not address any of the effects of the facility on the environment.”

Members of Mount Shasta City Council have said they were aware many concerned citizens were submitting comments to the EDA regarding Crystal Geyser’s involvement in the project and submitted clarifying comments of their own.

City Manager Paul Eckert said they requested all public comments regarding the project from the EDA through the freedom of information act in order to get a better idea of why this happened. In an email, Eckert said the city was trying to “offset what appeared to be extreme and ungrounded comment.”

In an interview, Harkness added that citizens concerned about Crystal Geyser need to act more strategically and referred to their campaign as “a shotgun approach.”

Council member Tim Stearns sent out a mass email pointing to Vicki Gold as a catalyst for the grant termination, saying “Please ‘thank’ Vicki for all of her misguided efforts to help kill the Mt. Shasta community by causing the City to lose much needed money to improve our sewage treatment facility.”

The ongoing EIR campaign from citizens has been directed at the City of Mount Shasta, but Crystal Geyser is located on property outside the city limits and under the jurisdiction of Siskiyou County.

Mount Shasta’s connection to Crystal Geyser is through the sewer system, and the application to connect was submitted Feb. 9, two days before grant termination.

Bruce Hillman of the WATER group said he feels that the fact that Crystal Geyser waited so long to submit their permit application seems to indicate that the company has been trying to avoid anything that would trigger an EIR.

“We hope that, with the recent application for Crystal Geyser to hook up to the city sewer will be an opportunity for an EIR,” Hillman said. “This is not anti-business, but pro Mount Shasta for all.”

Raven Stevens of the Gateway Neighborhood Association, a group of 74 home owners surrounding the plant, said, “We are saddened by the ‘blaming attitude’ that is coming out once again. The ‘us vs. them’ paradigm is long past its time.

“We are in agreement with the EDA that an EIR is necessary and have been respectfully saying that for 28 months. We see careful and thoughtful planning for growth as pro-business and pro-community.”

Harkness pointed out that the city was preparing to do an EIR on the sewer interceptor line project before the grant funding was pulled the first time, in 2014.

City clerk John Kennedy, a member of a recently formed pro-business coalition in Mount Shasta, said “The EIR thing has gotten a lot of us upset. The stickers imply that Crystal Geyser is against an EIR.”

Kennedy said he feels the company is in favor of doing an EIR, and has met every stipulation that the county determined needed to be addressed.