HomeMy WebLinkAbout1992-11-03; Municipal Water District; 193; Agreement with San Diego County Water AuthorityCARLSBAD F-.NICIPAL WATER DISTRICT . A’\GENDA BILL
AB# 193 TITLE: CARLSBAD MUNICIPAL WATER
MTG. 11-3- %- AGREEMENT WITH THE
DEPT. CMWD SAN DIEGO COUNTY WATER AUTHORITY C,TY MGR
RECOMMENDED ACTION:
Adopt Resolution No. 8 19 authorizing the Executive Manager to enter to an agreement
with the San Diego County Water Authority to provide Reclaimed Water Development
Funds to the Carlsbad Municipal Water District.
ITEM EXPLANATION:
The first phase of the Encina Basin Water Reclamation Project will yield 2049 acre feet per
year of reclaimed water. Carlsbad Municipal Water District will be purchasing the reclaimed
water from both Vallecitos Water District’s (Vallecitos) existing 2.0 million gallon per day
full Title 22 Meadowlark Water Reclamation Treatment Facility, and commencing in FY
1994, from the Gafner Reclamation Plant owned and operated by the Leucadia County
Water District (Leucadia) and currently being upgraded to produce Title 22 tertiary treated
water.
CMWD will be purchasing the reclaimed water from Vallecitos and Leucadia at a wholesale
rat.e and will purvey it to users in Carlsbad through a distribution system owned and
operated by CMWD. Both Vallecitos and Leucadia have signed a reclaimed water
agreement with CMWD detailing the responsibilities for production and distribution.
CMWD is currently providing reclaimed water, produced at the Meadowlark Water
Reclamation Plant, to the Aviara development through temporary facilities. The Phase 1
capital project consists of developing a permanent pumping and distribution system,
improving the existing Mahr Reclaimed Water Reservoir and converting of two existing
potable reservoirs to reclaimed water. These improvements will be funded through the
$5,000,000 lo w-interest loan from the State Water Resources Control Board (SWRCB).
Users will include landscape and school irrigation at the Aviara development, the Aviara and
LaCosta North golf courses, two agricultural growers (Frazee and Ukegawa) and Caltrans.
Approximately 400 acre feet per year, produced by the Gafner Water Reclamation Plant and
purchased from Leucadia, will be used by the La Costa South Golf Course.
In reviewing CMWD’s application for funding, County Water Authority found that the
required eligibility criteria has been met. CMWD is utilizing a new water supply, which
relieves a demand on the County Water Authority for imported water, and it has
demonstrated a financial need in that the cumulative capital and operating expenses of the
project are in excess of its revenues.
Due to the financial need demonstrated by CMWD and its having met all other eligibility
criteria, the Cdunty Water Authority approved CMWD’s application and authorized its
General Manager to enter into an agreement with CMWD to provide a maximum $100 per
acre-foot incentive for all reclaimed water that is actually used.
Page 2 of Agenda Bin No. 193.
As required by the adopted Reclaimed Water Development Fund guidelines, CMWD will
go through an annual review during which the actual costs and revenues of the past year,
combined with revised projections for the coming year and beyond, will be used in
determining whether CMWD continues to demonstrate a financial need. Depending on the
results of this annual review process, the Water Authority’s contribution may be lowered, set
at the maximum contribution rate, terminated or extended for an additional year.
In addition, CMWD will be required to reimburse the County Water Authority the amount
of $59,346 it received through the Financial Assistance Program (FAP), plus interest, for
preparation of the facilities plan, master plan, and state loan documents. This reimbursable
amount will be deducted from CMWD’s Reclaimed Water Development Funds.
The Water Commission met on October 14,1992 and recommends that the Board authorize
the Executive Manager enter into the agreement with the San Diego County Water
Authority.
FISCAL IMPACT:
This Agreement will allow the San Diego County Water Authority to provide CMWD with
the Reclaimed Water Development Funds of $100 per acre foot for reclaimed water.
These funds will be used to help offset the cost of CMWD’s Water Reclamation program
by providing funds (including funds from the sale of reclaimed and from Metropolitan Water
District’s Local Project Program (LPP) for the repayment of the $5,000,000 low-interest loan
from the State Water Resources Control Board.
EXHIBITS:
1. Resolution. NO.
2. Joint Participation Agreement for Development of Local Reclaimed Water Supplies
Between the San Diego County Water Authority and Carlsbad Municipal Water
District.
RESOLUTION NO. 819 1
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A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CARLSBAD MUNICIPAL WATER DISTRICT
AUTHORIZING THE EXECUTIVE MANAGER TO ENTER INTO
AN AGREEMENT WITH THE SAN DIEGO COUNTY WATER AUTHORITY
TO PROVIDE RECLAIMED WATER DEVELOPMENT FUNDS TO THE
CARLSBAD MUNICIPAL WATER DISTRICT
WHEREAS, the Board of Directors of the Carlsbad Municipal Water District approved
the Reclaimed Water Master Plan; and
WHEREAS, Phase I of the Reclaimed Water Master Plan includes improvements to the
Mahr Reclaimed Water Reservoir, development of a permanent pumping and distribution system,
and conversion of two existing reservoirs to reclaimed water; and
WHEREAS, these improvements will be funded through the $5,000,000 low-interest loan
from the State Water Resources Control Board and
WHEREAS, the San Diego County Water Authority has approved the Carlsbad Municipal
Water District’s application for funding and has authorized the Authority’s General Manager to
enter into an agreement with the District to provide a maximum $100 per acre foot incentive for
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all reclaimed water that is used; and
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WHEREAS, this incentive will be used to offset the District’s costs for the Water
21 Reclamation program and assist with the repayment of the $S,OOO,OOO low-interest loan from the
22 II State Water Resources Control Board.
23 NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Municipal Water District
24 Board of Directors as follows:
above recitations are true and correct.
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2. That the Board hereby authorizes the Executive Manager to enter into an
agreement with the San Diego County Water Authority to provide Reclaimed Water Development
Funds to the Carlsbad Municipal Water District.
PASSED, APPROVED AND ADOPTED at a meeting of the Carlsbad Municipal Water
District held on the 3rd day of NOVEMBER , 1992, by the following vote to wit:
AYES: Board Members Lewis, Kulchin, Larson, Stanton, Nygaard
NOES: None
ABSENT: None
ATTEST:
ALETHA L. RAUTENKRANZ, Secre
(SEAL)
JOINT PARTICIPATION AGREEMENT FOR
DEVELOPMENT OF LOCAL RECLAIMED WATER SUPPLIES
BETWEEN
, THE SAN DIEGO COUNTY WATER AUTHORITY
AND
CARLSBAD MUNICIPAL WATER DISTRICT
THIS AGREEMENT is made this 3 day of October, 1992, between the San Diego
County Water Authority, hereinafter referred to as “Authority” and Carlsbad Municipal
Water District, hereinafter referred to as “Agency,” with respect to the following facts:
RECITALS
1. Authority is empowered under the County Water Authority Act (“Act”) to
develop, store, transport, provide, sell and deliver water for beneficial uses and purposes.
2. Agency as a member public agency of Authority under the Act, is a wholesale
purchaser of water distributed by Authority, and a seller of water for beneficial use.
3. Authority’s water supply and demand projections for its service area, including
that encompassed by Agency, show that additional sources of water must be developed
to meet future needs;
4. Authority and Agency have determined that it is mutually beneficial for
cost-effective local water reclamation projects to be developed to reduce reliance on
Authority’s imported water supplies
5. Authority has adopted a plan and programs designed to encourage
development of an additional 100,000 acre feet per year of beneficial use wastewater
throughout its service area over the next 20 years, thereby reducing the need for
additional water that otherwise must be delivered from Authority’s water supply system;
6. The parties agree that the development and delivery of reclaimed water for
beneficial uses within the service areas of Agency and Authority will benefit the entire
Agency and the region served by Authority;
7. Authority desires to assist in increasing production and distribution of
reclaimed water by contracting with Agency to contribute all or a portion of Authority’s
estimated avoided cost of procuring additional water supplies on a periodic basis to the
extent necessary to make the production of reclaimed water financially feasible. I
8. The reclaimed water project planned within the service area of the Agency will
correspondingly reduce demand of Agency for water supply from Authority;
NOW, THEREFORE, in consideration these facts, the parties agree as follows:
Article 1: Definitions.
The following words and terms, unless otherwise expressly defined in their context;
shall be defined to mean:
1 .I “Yield” shall mean the actual amount of Reclaimed Water which is delivered to
End Users by a Project in any given year. “Yield” shall exclude any Reclaimed Water
which does not reduce Agency’s demand for supply of water from Authority.
1.2 “Project” shall mean the project for the production of reclaimed water,
developed under this Agreement, as described in Exhibit A.
1.3 “Project Costs” shall mean the capital, operational and maintenance costs of
the Project, more specifically identified in Exhibit B, hereto. Project Costs may include the
costs of retrofitting private water systems to the extent necessary to permit the attainment
of Project Yield incurred by Agency in connection with the Project.
1.4 “Reclaimed Water” shall mean subpotable water reclaimed from effluent which
is not usable for human consumption, but is usable for limited special purposes, such as
agricultural and landscape irrigation.
1.5 “End User” shall mean each of the ultimate users of Reclaimed Water produced
by the Project.
Article 2: Development and Operation of the Project.
2.1 Elements of Project The Project shall include all or a portion of the following
elements: transmission, storage, tertiary treatment, pumping and other facilities necessary
for the production, storage and delivery of reclaimed water, as described in the “Project
Description,” attached hereto as Exhibit A.
2.2 Firm Source of Water Agency warrants that it has a firm source of Reclaimed
Water to operate the Project described herein.
2.3 Authority Over Sewer Service Agency warrants that it has the authority to
provide sewer, water or other services as necessary to carry out the Project, or has a
contract with the provider of sewer service, in areas tributary to the Project, to obtain
effluent from which Reclaimed Water will be produced. Agency further warrants that the
residences, businesses, and industries in the area from which Reclaimed Water is to be
derived are or can be required to discharge wastewater for treatment.
2.4 Riqht to Sell Water Agency warrants that it is able and has a right to sell such
Yield as is produced by the Project.
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2.5 Construction, Design and Costs Agency shall be solely responsible for the
design, environmental proceedings, right-of-way acquisitions, permits, construction and’
any capital costs of the. Project or any modifications thereof. Authority shall have no
responsibilities, obligations or liabilities regarding the design, environmental proceedings,
right-of-way acquisitions permits or construction of the Project or any modifications
thereof. Nor shall Authority be responsible for any capital costs of the Project.
2.6 Owner of Project Agency shall be designated as the sole and exclusive owner
of all Project facilities, except for those portions, if any, constituting a portion of Authority’s
distribution system (as described in Exhibit A) or installed within the boundaries of End
Users’ properties. Authority shall have no ownership right, title, security interest, or other
interest in any Project facilities, nor any rights, duties, or responsibilities for operation and
maintenance thereof. The sole obligation of Authority shall be to pay the Contribution
Rate for the Yield generated by the Project.
2.7 Operation of Project Agency shall be solely responsible for the operation and
maintenance of all components of the Project, including providing or obtaining an
adequate wastewater supply and distributing and delivering Reclaimed Water to all End
Users.
2.8 Meters Required Metering devices shall be installed and owned, operated and
maintained by Agency for the purpose of measuring the Yield. Each meter shall be read
every month for purposes of billing and accounting between the parties to determine at
the beginning of each month the quantity of Reclaimed Water billed to End Users during
the preceding month.
2.9 Maintenance of Project Agency agrees to properly operate, maintain, replace
as necessary, and inspect the facilities comprising the Project, regularly and in
accordance with all applicable state and federal laws, rules, regulations, and guidelines
for the term of this Agreement.
2.10 Operatinq Principles Agency agrees that, at all times during the term of this
Agreement, to use best efforts to operate the Project facilities in accordance with
generally accepted professional standards and maintenance and operation principles and
in such manner as to provide service to existing and future End Users on a fair and
equitable basis.
2.11 Staffinq Agency shall provide sufficient qualified personnel to properly operate
and maintain the Project facilities. Such personnel shall meet applicable certification
requirements of pertinent regulatory agencies.
2.12 Compliance with Laws Agency shall insure that all Reclaimed Water produced
and delivered by the Project is used in compliance with all applicable Federal, state and
local statutes, ordinances, regulations and other requirements, and shall further insure
that connections to the Reclaimed Water system are properly designed and constructed.
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2.13 Inspection of Records Agency shall make available for inspection by Authority,
upon reasonable advance notice, all records, books and other documents relating to the
operation of the Project.
2.14 Multiple Aoencies Notwithstanding any other provision of this Agreement,
“Agency,” as used herein, may refer to one or more public agencies, one of whom is a
member of the Authority, which shall be jointly and severally liable for the obligations of
Agency, unless otherwise specifically provided herein.
Article 3: Contribution for Yield.
3.1 Authoritv to Contribute Authority shall pay the Contribution Rate for Yield
supplied by the Project; provided that unless agreed otherwise in writing, Authority shall
not be obligated to make a contribution for Yield in excess of 2,100 acre-feet in any one
Authority fiscal year, nor shall Authority be obligated to contribute for any reclaimed water
in advance of its delivery to End Users.
3.2 Billinq Agency shall invoice Authority monthly for the Yield, based upon the
quantities billed to End Users during the previous month. Billings shall be based upon
meters at each and every connection of the Project to an End User. Authority shall pay
Agency for such Yield within 45 days of receipt of such invoice through Agency by means
of a credit included on the next billing issued to Agency. If payment is not made by
Authority to Agency within said 45 days, it shall thereafter draw interest at a rate
equivalent to the average interest Authority earns on its own invested funds during the
time period payment is delayed beyond 45 days. Agency shall be billed by Authority in
accordance with the rules and regulations established from time-to-time by Authority as
reflected in Authority’s Administrative Code
3.3 Nothing contained herein shall be deemed to modify Authority obligations, if
any, established by law or contract to supply water to Agency for domestic and municipal
use within Authority’s service area.
Article 4: Project Water Rates.
4.1 “Reclaimed Water Sale Price” shall be the lower of: (a) the Agency’s average
rate for retail potable water service during the quarter preceding the effective date of this
agreement or (b) the minimum potable water rate (other than any below-cost “lifeline” rate)
charged to the class of users to whom the Reclaimed Water produced by the Project is
delivered whichever is lower, as determined by Authority. After the first year, the
Reclaimed Water Sale Price utilized in calculating Project Revenue in section 4.3 shall be
adjusted annually as described in section 4.1 herein. For the purpose of future multi-year
cash flow projections, increases in the “Reclaimed Water Sale Price” shall be determined
by Authority.
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4.2 “The Maximum Contribution Amount” for an acre foot of Yield shall be not less
than $100 per acre foot, and may be adjusted, from time to time by the Board of Directors
of the Authority at its sole discretion.
4.3 “Project Revenue” shall include revenues from all reclaimed water sales based
upon the Reclaimed Water Sale Price, and any and all other revenue received by or
generated by Agency which in any way offsets Project Costs, including the capital,
operating or maintenance costs of producing or distributing reclaimed water, as
determined by the Authority, excluding any Authority Contributions under this Agreement.
4.4 “Cumulative Net Balance” shall mean the amount derived by subtracting the
estimated cumulative Project Cost through the following year from the estimated
cumulative Project Revenue through the following year. In computing the Cumulative Net
Balance (“CNB”), there shall be added to Project Costs the cost of funds to the Agency
(based upon Authority’s actual cost of funds, as determined by the Authority), for carrying
any negative CNB for the project to date, exclusive of the following year. In computing
the Cumulative Net Balance (“CNB”), there shall be added to Project Revenue the
estimated earnings of Agency on any positive CNB, based upon the Authority’s actual
rate of return on its unencumbered funds, as determined by the Authority, for the project
to date.
4.5 The Contribution Rate for Agency’s Project shall not exceed the Maximum
Contribution Amount, and shall be set each year through an Annual Review by the
Authority based upon the CNB. The Contribution Rate shall be established in such a
manner as to maintain, insofar as possible, a Cumulative Net Balance equal to $0,
consistent with the viability of the Project, it being the policy of the Authority not to provide
contributions for projects that can maintain a positive Cumulative Net Balance without an
Authority Contribution. In the event Agency shows a positive CNB for any given year,
nothing in this Article will limit Agency from receiving contributions in future years where
a subsequent Annual Review indicates that a negative CNB will occur for the following
year; nor shall anything herein require the Authority to make a contribution to avoid a
negative CNB for future years beyond those considered in calculating the CNB.
4.6 In the event that Agency has a positive CNB at the conclusion of any year,
Agency shall return to the Authority, at the end of such year, the amount of any
contributions made during that year so as to achieve a CNB of $0 through the following
year, as determined by Authority.
4.7 Agency shall provide such information regarding past and estimated future
Project costs and Project Revenue during each year of this Agreement as the Authority
may reasonably require as part of the Annual Review. Notwithstanding the formulae
described above, the Contribution Rate for any year may be adjusted: (a) to reflect the
results of any audit by the Authority of the actual Project Costs and Project Revenue
during the previous year; and (b) to reduce Project Costs by an amount equal to the
Agency’s obligation to repay any sum owed to Authority under the Financial Assistance
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Program for reclamation planning studies for the Project. In the event that for any year
the Contribution Rate equals zero or less, this Agreement shall not be terminated, and no
funds shall be owed to,Authority by Agency, it being the purpose of this agreement that
the contributions made to Agency shall reflect the financial need of the Project.
4.8 Authority shall have the right to review the accounting and Project records of
Agency to verify reported and estimated future Project Costs and Project Revenue, and
may request an independent audit of Agency’s Project Costs or Project Revenue, upon
reasonable notice, in connection with the establishment of the Contribution Rate under
this agreement. The costs of any independent audit shall be equally divided between the
parties.
Article 5: Term and Amendments:
5.1 Term of Contribution Obliqation The term of this Agreement shall be twenty-
five (25) years from the date the Project commences delivery of Reclaimed Water to an
End User.
5.2 Amendments This Agreement may be amended at any time by the written
mutual agreement of the parties.
Article 6: Hold Harmless and Liabilitv.
Agency agrees to hold Authority harmless from any and all liability, including but not
limited to, liability due to water quality, which may arise out of Agency’s participation in
the construction and operation of the Project or out of any ownership interest it may
acquire in the Project, and will save and defend Authority and its officers, agents, and
employees free from any claims for injury, including death or damage to property or injury
(including death or damage) due to water quality arising out of the Agency’s role in the
construction, operation, or ownership of the Project. Such indemnity shall include all loss
related to any claim made, whether or not a court action is filed, and shall include attorney
fees, administrative and overhead costs, engineering and consulting fees and all other
costs related to or arising out of such claim of liability. These obligations shall not be
affected by any sale of water to Authority under this agreement.
Article 7: Notice.
Any notice, payment or instrument required or permitted to be given hereunder shall
be deemed received upon personal delivery or 24 hours after deposit in any United States
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post office, first class postage prepaid and addressed to the party for whom intended, as
follows:
If to Authority: San Diego County Water Authority
3211 Fifth Avenue
San Diego, California 92103
Attn: General Manager
If to Agency: Carlsbad Municipal Water District 5950 El Camino Real Carlsbad, CA 92008
Attn: General Manager
Any party may change such address by notice given to each of the other parties as
provided in this section.
Article 8: Successors and Assiqns.
This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the parties hereto.
Article 9: Severabilitv.
The partial or total invalidity of one or more sections of this Agreement shall not
affect the validity of this Agreement. ‘_’
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of the date first hereinabove written.
APPROVED AS TO FORM: SAN DIEGO COUNTY WATER AUTHORITY
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APPROVED AS TO FORM: CARLSBAD MUNICIPAL WATER DISTRICT v%wCY)
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