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Home My WebLink About2023-08-22; Municipal Water District; ; Authorize an Appropriation of $1 million for the Recycled Water Phase III, D-4 Reservoir ProjectCA Review GH Meeting Date: Aug. 22, 2023 To: President and Board Members From: Scott Chadwick, Executive Manager Staff Contact: Dave Padilla, Utilities Engineering Manager dave.padilla@carlsbadca.gov, 442-339-2356 Vicki Quiram, General Manager vicki.quiram@carlsbadca.gov, 442-339-2307 Subject: Authorize an Appropriation of $1 million for the Recycled Water Phase III, D-4 Reservoir Project District: 3 Recommended Action Adopt a resolution authorizing the Deputy City Manager, Administrative Services, or designee to appropriate $1 million from the Recycled Water Connection Fund to the Recycled Water Phase III, D-4 Reservoir Project. Executive Summary The D-4 Reservoir will be the fourth and last water storage tank to be constructed at the Carlsbad Municipal Water District’s water storage facility on Black Rail Road south of Poinsettia Lane and is the last remaining component of the district’s Recycled Water Phase III Plan. The project will add 1.5-million gallons of storage capacity so that the Carlsbad Municipal Water District’s recycled water system can meet estimated recycled water demands. Staff are requesting authorization for the Deputy City Manager, Administrative Services, or designee to appropriate $1 million from the Recycled Water Connection Fund to the Recycled Water Phase III, D-4 Reservoir Project, Capital Improvement Program for the construction of the project. The request includes the following actions: •Authorize the appropriation of $800,000 from the Recycled Water Connection Fund to replace $800,000 of Potable Water Replacement Fund budget that was removed from the project’s budget in the fiscal year 2023-24 Capital Improvement Program Aug. 22, 2023 Item #4 Page 1 of 5 • Authorize the appropriation of $200,000 from the Recycled Water Connection Fund to replace $200,000 that was appropriated to the project budget from the Recycled Water Replacement Fund in the FY 2023-24 Capital Improvement Program 1 These actions are required to ensure the project is funded from the correct funding sources. There is no change in the total project cost presented at the June 6 CMWD Board meeting, or in the total amount of funding appropriated for the project so far. Explanation & Analysis The Carlsbad Municipal Water District Board of Directors awarded the contract for construction of the project, Capital Improvement Project No. 5210, to Houalla Enterprises Ltd. on June 6, 2023. The board also appropriated $2,533,000 from the Recycled Water Connection Fund to the project’s budget. This action assumed $800,000 that had been appropriated from the Potable Water Replacement Fund in prior years would be available for construction. However, the fiscal year 2023-24 Capital Improvement Program budget that the board adopted on June 13, 2023, removed $800,000 from the Potable Water Replacement Fund because a supplemental potable water supply was no longer needed. Because of that change, the budget for the project is now $800,000 short of what is needed for construction, so staff are asking the board to authorize the Deputy City Manager, Administrative Services, or designee, to appropriate $800,000 from the Recycled Water Connection Fund to replace the funding that was removed in June. Additionally, the fiscal year 2023-24 Capital Improvement Program budget inadvertently appropriated $200,000 to the project budget from the Recycled Water Replacement Fund, even though that money should have come from the Recycled Water Connection Fund. Staff are also requesting the board authorize the Deputy City Manager, Administrative Services, or designee to appropriate $200,000 from the Recycled Water Connection Fund to the reservoir project’s budget. With the approval of this resolution, staff will then restore the $200,000 to the Recycled Water Replacement Fund. The project will not use funds from the Recycled Water Replacement Fund. Fiscal Analysis Funding for the requested $1 million appropriation from the Recycled Water Connection Fund is available. The primary source for the Recycled Water Connection Fund is a 2014 low-interest State Revolving Fund loan the district obtained for the Phase III Recycled Water Project. Staff also obtained two grants to use for the project. Each grant is approximately $900,000, for a total of $1.8 million. One came from the U.S. Bureau of Reclamation’s Title XVI Water Reclamation and Reuse program, the other from the State of California’s Proposition 1, Round 2 funding through the San Diego Integrated Regional Water Management planning group. The 30-year 1% interest loan is expected to spread the cost of the project across all ratepayers and over time.2 1 If the appropriation is authorized, staff will remove $200,000 in Recycled Water Replacement Fund budget, which does not require a Resolution. 2 The loan payback period stated in the June 6 staff report was inaccurately mentioned as 20 years. Aug. 22, 2023 Item #4 Page 2 of 5 The total project cost stated at the June 6, 2023, CMWD Board meeting is unchanged, at $6,342,164. The recommended action would: • Appropriate $800,000 from the Recycled Water Connection Fund, enabling staff to restore the same amount back into the Potable Water Replacement Fund • Appropriate $200,000 from the Recycled Water Connection Fund to replace the FY 2023-24 Capital Improvement Program appropriation for the same amount from the Recycled Water Replacement Fund 000 that was appropriated to the project budget from the Recycled Water Replacement Fund in the FY 2023-24 Capital Improvement Program Next Steps With the board’s approval, the Deputy City Manager, Administrative Services, or designee will appropriate $1 million from the Recycled Water Connection Fund to the D-4 Reservoir Project budget. Environmental Evaluation The board approved the project’s initial study/mitigated negative declaration and mitigation monitoring and reporting program in 2012. (Resolution No. 1455, EIA 12-02, State Clearing House SCH# 2012091049). This reservoir project is a component of the Phase III Recycled Water Project and is subject to the mitigation measures that are identified in that mitigation monitoring and reporting program. An addendum to that declaration and program document was approved by the board in 2018. Resolution No. 1601) It included an evaluation of potential environmental impacts associated with moving the reservoir 150 feet east of the original location. that had been studied in the 2012 initial study/mitigated negative declaration. The Planning Commission determined on July 20, 2022, that the proposed project is within the scope of the prior environmental documents and that no further environmental documentation is required under California Environmental Quality Act Guidelines Section 15162 (Resolution No. 7457). The re-allocation of funding does not change the scope of the project, which remains within the scope of the approved mitigated negative declaration. Exhibit 1. CMWD Board resolution Aug. 22, 2023 Item #4 Page 3 of 5 RESOLUTION NO. 1715 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE DEPUTY CITY MANAGER, ADMINISTRATIVE SERVICES, OR DESIGNEE, TO APPROPRIATE $1 MILLION FROM THE RECYCLED WATER CONNECTION FUND TO THE RECYCLED WATER PHASE Ill, D-4 RESERVOIR PROJECT WHEREAS, the Carlsbad Municipal Water District of the City of Carlsbad, California, or CMWD, Board has determined that the expansion of recycled water use provides a renewable, local and drought-proof supply of water for irrigation and other uses; and WHEREAS, on June 6, 2023, the CMWD Board adopted Resolution No. 1708, accepting bids, awarding a contract to Houalla Enterprises Ltd. dba Metro Builders & Engineers Group Ltd. for construction of the Recycled Water Phase Ill, D-4 Reservoir and appropriating $2,533,000 in additional funds from the Recycled Water Connection Fund to Capital Improvement Program, or CIP, Project No. 5210;and WHEREAS, on June 13, 2023, the CMWD Board adopted Resolution No. 1710, approving the fiscal year, or FY, 2023-24 CIP Program, including removal of $800,000 from the Potable Water Replacement Fund source for the reservoir project; and WHEREAS, an appropriation of $800,000 is needed from the Recycled Water Connection Fund to the project budget to replace the Potable Water Replacement Fund that was removed; and WHEREAS, an appropriation of $200,000 is also needed from the Recycled Water Connection Fund to the project budget to replace the appropriation from the Recycled Water Replacement Fund approved in the FY 2023-24 CIP Program. NOW, THEREFORE, BE IT RESOLVED by the CMWD Board of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That the Board authorizes the Deputy City Manager, Administrative Services, or designee, to appropriate $1 million from the Recycled Water Connection Fund to the Recycled Water Phase Ill, D-4 Reservoir, CIP Project No. 5210. Exhibit 1 Aug. 22, 2023 Item #4 Page 4 of 5 PASSED, APPROVED AND ADOPTED at a Special Meeting of the Carlsbad Municipal Water District Board of the City of Carlsbad, California, on the 22nd day of August, 2023, by the following vote, to wit: AYES: NAYS: ABSTAIN: ABSENT: Blackburn, Bhat-Patel, Acosta, Burkholder, Luna. None. None. None. URN, President ft;r SHERRY FREISINGER, Secretary (SEAL) \\\''"''''' ,,, c"Al. ,, .,' �•'( ......... •-1>-';; ::' ... ·•�\) IIN1 �:•. � ... � :: �/� T • .• --,. �• �:c3 ��Q -:m:ca: �:;;= ;-v,:.o :'.°"I : :. �-... C. , ... :'lti:: � �••. ◄tlFO'-._. .,.:;r � .... ., � ·····•········ ,,,, ,, I IJ ,, '''"'"''\\ Aug. 22, 2023 Item #4 Page 5 of 5 Authorize Appropriation of $1 million for the Recycled Water Phase III D-4 Reservoir Project Vicki Quiram, General Manager Dave Padilla, District Engineer August 22, 2023 1 RECOMMENDED ACTION Adopt a resolution authorizing the Deputy City Manager, Administrative Services, or designee to appropriate $1 million from the Recycled Water Connection Fund to the Recycled Water Phase III, D-4 Reservoir Project ITEM 4: D-4 Reservoir 2 EXECUTIVE SUMMARY ITEM 4: D-4 Reservoir 3 $800,000 from the Recycled Water Connection Fund to replace $800,000 of Potable Water Replacement Fund budget that was removed from the project’s budget in the fiscal year 2023-24 Capital Improvement Program $200,000 from the Recycled Water Connection Fund to replace $200,000 that was appropriated to the project budget from the Recycled Water Replacement Fund in the FY 2023-24 Capital Improvement Program $1 million EXECUTIVE SUMMARY •CMWD Board approved the project on June 6, 2023. •No increase in project cost. •Recycled Water Connection fund collects revenue from new customer connection charges. •Low interest (1%) State Revolving Fund loan helps pay for new recycled construction while the connection fund builds up balance. The loan creates equity for customers over time. ITEM 4: D-4 Reservoir 4 EXECUTIVE SUMMARY •$800,000 grant –U.S. Dept. of the Interior •$1 million grant –CA DWR’s Integrated Regional Water Management program –funded by Proposition 1 dollars •Fourth reservoir and last remaining component of the Recycled Water Phase III Plan. ITEM 4: D-4 Reservoir 5 MILESTONES November 2019 Recycled Water Master Plan update November 8, 2022 Board authorizes bidding September 24, 2020 Stakeholder Outreach, Early Public Notice mailed to neighboring residents April 13, 2023 Bids received July 20, 2022 Planning Commission hearing, CUP and CDP permit amendmentsOct. 5, 2020 Public notice posted Nov. 6, 2020 Informational mailer sent to neighboring residents ITEM 4: D-4 Reservoir 6 June 6, 2023 Contract approved August 22, 2023 Appropriation request June 13, 2023 FY 24 CIP Budget approved RECOMMENDED ACTION Adopt a resolution authorizing the Deputy City Manager, Administrative Services, or designee to appropriate $1 million from the Recycled Water Connection Fund to the Recycled Water Phase III, D-4 Reservoir Project ITEM 4: D-4 Reservoir 7 QUESTIONS? ITEM 4: D-4 Reservoir 8