HomeMy WebLinkAbout1996-12-03; Municipal Water District; 348; Development & Utilization of Reclaimed WaterCARLSBAD MUNICIPAL WATER DISTRICT -AGENDA BILL
AB# 348 TITLE: Approval of First Amendment to the DEPT. HD-
MTG. m-3-5$ Joint Participation Agreement for the
Development and Utilization of Reclaimed Water
DEPT. CMWD Between the MWD, SDCWA, and CMWD, CMWD CITY MGR.
Proiect No. 91-305
. . t!5 & is a 8
L
RECOMMENDED ACTION:
Adopt Resolution No. 9 6 0 for approval of First Amendment to the Joint Participation
Agreement for the Development and Utilization of Reclaimed Water between the Metropolitan
Water District of Southern California, San Diego County Water Authority, and Carlsbad
Municipal Water District for Encina Basin Water Reclamation Project Phase I, CMWD Project
No. 91-305.
ITEM EXPLANATION:
The Encina Basin Water Reclamation Project Phase I was completed in 1994. Part of the
funding for the Phase I project was obtained through Metropolitan Water District of Southern
California (MWD) Local Projects Program (LPP). This funding contribution is contained in an
agreement between MWD, San Diego County Water Authority (SDCWA) and CMWD dated
January 21, 1993. The agreement calls for MWD to contribute $154/acre-foot and the SDCWA
to contribute $lOO/acre-foot for every acre-foot of reclaimed water we sell over a period of
seven (7) years beginning January 1993.
MWD’s Board of Directors, at its August 22, 1995 meeting, authorized amendment of existing
LPP agreements to incorporate terms of a new program called the Local Resources Program
(LRP). The LRP would change MWD’s contribution to a sliding scale of $0 to a maximum of
$250 per acre-foot over a 25 year period. The sliding scale is based on the summation of the
project unit cost of water and deferred cost minus the sum of MWD’s applicable noninterrupible
treated water rate and the amortized cost of any avoided New Demand Charge.
In the first and second year of the amended agreement the difference in cost has been
calculated to be $21 O/acre-foot for Fiscal Years 1995-96 and 19961997. Thereafter, MWD will
consult with CMWD to determine the estimated LRP contribution based on historic cost data
and expected project activities.
For CMWD, there are four major benefits of the amendment. First, for the remaining four years
of the existing agreement, the MWD contribution will be more than under the current
agreement. For example, the first two years, there will be an additional contribution of
$56/acre-foot. Second, MWD’s contribution will be extended for another 22 years instead of the
remaining 4 years of the existing agreement. We estimate that the extension will provide for
additional contributions. Third, the amendment allows CMWD to recalculate the total Phase I
project cost each year and to include all expenses including engineering, administrative, legal,
construction, and O&M. With this provision, we can add pipelines and other facilities to the
Phase I project provided the increased system does not exceed the capacity of the supply
system. Fourth, we are allowed to include the cost of our existing water storage tanks which
were converted from potable to reclaimed water storage. This conversion cost was not
contained in the original agreement.
. Page 2 of Agenda Bill No. ,3 48
The MWD Board has not adopted the LRP program; therefore, the first amendment will be an
interim agreement until a formal decision is made by the MWD Board. This amendment must
be executed by the end of 1996 to be effective on an interim basis.
FISCAL IMPACT:
For the first and second year, under the first amendment agreement, the CMWD will receive an
additional contribution estimated at $69,720 and $78,400, respectively, above the current
agreement. In the remaining years, the contribution will be calculated based on project costs
and credits provided by CMWD and adjusted annually. This agreement extends the the current
seven-year agreement an additional 22 years.
ENVIRONMENTAL:
There are no environmental impacts.
EXHIBITS:
1. First Amendment Agreement.
2. Resolution No. 9 6 0 approving a First Amendment to the Joint Participation Agreement.
CMWD 91-305
ENCINA BASIN WATER RECLAMATION PROJECT PHASE I
FIRST AMENDMENT TO THE JOINT PARTICIPATION AGREEMENT FOR THE DEVELOPMENT AND UTILIZATION OF RECLAIMED WATER BETWEEN THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, SAN DIEGO COUNTY WATER AUTHORITY, AND CARLSBAD MUNICIPAL WATER DISTRICT
This First Amendment (Amendment) is made and entered into as of September 1, 1995, by and among the Metropolitan Water District of Southern California (MWD), San Diego County Water Authority (SDCWA), and Carlsbad Municipal Water District (CMWD).
ND, SDCWA, and CMWD are collectively referred to as llPartiest' and individually as "Party".
RECITALS
WHEREAS, there is now in effect a Joint Participation Agreement (Agreement) by and between MWD, SDCWA, and CMWD dated January 21, 1993 for the development and utilization of reclaimed water which provides for the Encina Basin Water Reclamation Project Phase I (Project) to participate in MWD's Local Projects Program (LPP);
WHEREAS, operation of the Project commenced in January 1993;
WHEREAS, MWD's Board of Directors, at its August 22, 1995 meeting, authorized amendment of existing LPP agreements to incorporate draft terms of'a new program to be called the Local Resources Program (LRP) for the purposes of improving regional water supply reliability and changing the LPP Contribution from a set rate of $154 per acre-foot to a sliding scale, from $0 to a maximum of $250 per acre-foot;
WHEREAS, in consideration of the potential increase in the LPP Contribution, both Parties have agreed to extend the term of the Agreement from 7 years to 25 years; and
WHEREAS, the Parties mutually acknowledge that this First Amendment to the Agreement shall be an interim agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Amendment, the parties desire to amend the Agreement with this First Amendment as follows.
Terms of Agreement
The Agreement is amended as follows:
Section 1.6 is revised to read as follows:
1.6: llLPP Contribution" shall mean the dollar amount, on a per acre-foot basis, contributed by MWD to the Project. The LPP Contribution for the Project is established pursuant to a sliding scale, from $0 to a maximum of $250 per acre-foot, and based on the summation of the Project Unit Cost of water and Deferred Cost minus the sum of MWD's applicable noninterruptible treated water rate and the amortized cost of any avoided New Demand Charge. The New Demand Charge will be applied in the formula used to determine the LPP Contribution only at that point in time at which SDCWA would have incurred a New Demand Charge if the yield from the Project were not developed.
Section 1.7 is added as follows:
1.7: "Estimated LPP Contributionlt shall mean the estimated contribution MWD pays to CMWD for the Actual Yield for monthly billing purposes until the LPP Contribution is calculated.
Section 1.8 is added to read as follows:
1.8: ttAnnualized Capital Componentlt shall mean the annualized cost of design, construction, administration of the design and construction, and associated financing costs incurred by CMWD as specified in Exhibit C added by the First Amendment. The Annualized Capital Component will be calculated on a per acre-foot basis based on Recovered Water and used to determine the Project Unit Cost for each Fiscal Year the LPP Contribution for this Agreement is calculated, pursuant to the procedure set forth in Section 7.5 of this Amendment.
Section 1.9 is added to read as follows:
1.9: "Operation and Maintenance Componentt' shall mean the annual operation and maintenance cost incurred by CMWD as specified in Exhibit D added by the First Amendment, for producing each acre-foot of Recovered Water. The Operation and Maintenance Component will be calculated on a per acre-foot basis based on Recovered Water and used to determine the Project Unit Cost for each Fiscal Year the LPP Contribution for this Agreement is calculated, pursuant to the procedure in Section 7.5 of this Amendment.
Section 1.10 is added to read as follows:
1.10: "Annualized Replacement Component" shall mean the annualized cost incurred by CMWD after the effective date of this First Amendment to replace specified Project equipment which has become nonfunctional through use following initiation of Project
-2-
.
operation. The Annualized Rep& ement Component, specified in d Exhibit E added by the First Amendment, will be calculated on a per acre-foot basis based on Recovered Water and 25 year amortization. The Annualized Replacement Component will be used to determine the Project Unit Cost for each Fiscal Year the LPP Contribution for this Agreement is calculated, commencing in the fiscal year of the applicable expenditure and terminating on the termination date of this Agreement, pursuant to the procedure in Section 7.5 of this Amendment.
Section 1.11 is added to read as follows:
1.11: "Project Unit Cost" shall mean the actual cost to produce an acre-foot of Recovered Water by the Project and is comprised of three components: Annualized Capital Component, Operation and Maintenance Component, and Annualized Replacement Component. It shall be computed on a Fiscal Year basis for the purpose of determining the LPP Contribution under this Agreement. The procedure for determining the Project Unit Cost is set forth in Section 7.5.
Section 1.12 is added to read as follows:
1.12: "Fiscal Year" shall mean a MWD Fiscal Year which begins on July 1 and ends on June 30.
Section 1.13 is added to read as follows:
1.13: "Recovered Water" shall mean all Reclaimed Water delivered for beneficial use by the Project in a fiscal year, measured in acre-feet, unless otherwise approved in writing by MWD. I
Section 1.14 is added to read as follows:
1.14: "Deferred CostI shall mean that portion of Project Unit Costs which exceed the sum of MWD's applicable noninterruptible treated water rate, the amortized cost of any avoided New Demand Charge, plus $250 per acre-foot in a fiscal year and are carried forward for one (1) year only for inclusion in the calculation of the LPP Contribution on an acre-foot basis, for the following fiscal year, as a means of leveling project expenses and MWD contributions pursuant to the criteria and limitations in Exhibit F, incorporated herein by this reference.
Section 6.6 of the Agreement is deleted.
Section 7.2 is revised to read as follows:
7.2: Because the LPP Contribution will be calculated annually and solely for the purposes of facilitating billing and accounting on a monthly basis, the Estimated LPP Contribution for this Agreement is $210 per acre-foot for Fiscal Years 1995-96 and 1996-97. Thereafter, MWD shall consult with CMWD to determine
-3-
the Estimated LPP Contribution based on historic cost data and expected Project activities. MWD's initial purchase price for Actual Yield from the Project shall be the sum of MWD's applicable noninterruptible treated water rate plus the Estimated LPP Contribution. Reconciliation of the Estimated LPP Contribution and LPP Contribution shall be performed by MWD pursuant to Section 7.6.
Section 7.3 is revised to read as follows:
7.3: MWD agrees that it shall sell all of the Actual Yield purchased under Section 7.1 to SDCWA at MWD's applicable noninterruptible treated water rate and SDCWA agrees to purchase all Actual Yield at MWD's applicable noninterruptible treated water rate. SDCWA shall be billed by MWD in accordance with the rules and regulations established from time to time by MWD as reflected in MWD's Administrative Code.
Section 7.4 is revised to read as follows:
7.4: CMWD shall meter each and every connection to its Reclaimed Water System, and read each meter on the appropriate billing cycle. CMWD shall also provide electrical metering devices to accurately measure the energy used for the Project to determine incurred operation and maintenance costs.
CMWD shall determine at the beginning of each billing cycle the quantity of Reclaimed Water billed to its End Users during the preceding billing cycle. CMWD shall invoice MWD monthly for the Actual Yield invoiced to its End Users during the previous month subject to the limitations outlined in Section 7.1.
MWD shall purchase Actual Yield from CMWD pursuant to Sections 7.1 and 7.2 by means of a credit included on the next billing issued to SDCWA. If payment is not made by MWD to SDCWA within 45 days of receipt of the monthly invoice from CMWD, such payment shall thereafter draw interest at a rate equivalent to the average interest MWD earns on its own invested funds during the time period payment is delayed beyond 45 days. Upon issuance of the credit, the Actual Yield shall, solely for purposes of billing and accounting, be deemed sold to MWD.
On the same billing the credit is issued, MWD shall simultaneously resell the Actual Yield to SDCWA pursuant to Section 7.3. Upon such billing, the Actual Yield shall, solely for the purposes of billing and accounting, be deemed sold to SDCWA.
SDCWA agrees to in turn simultaneously resell the Actual Yield to CMWD with SDCWA's purchase of that Actual Yield from MWD; OWD agrees to purchase that Actual Yield from SDCWA.
-4-
Upon receiving the MWD billing, SDCWA shall include the full amount of the Estimated LPP Contribution for the Actual Yield received from MWD as a credit on its next billing to CMWD. On that same billing, SDCWA shall show that the Actual Yield has been resold to CMWD by debiting CMWD for such Actual Yield. Such Actual Yield shall be deemed sold by SDCWA to CMWD as of the date of SDCWA's respective billing. Sale of water to MWD and SDCWA shall not affect CMWD's obligations under Section 11 of the Agreement.
Section 7.5 is revised to read as follows:
7.5: The Project Unit Cost consists of the sum of the Annualized Capital Component, Operation and Maintenance Component and Annualized Replacement Component. Within 180 days after the end of every Fiscal year, CMWD shall provide MWD with records of Recovered Water and Actual Yield and supporting documentation of the actual cost of each component for the Project pursuant to criteria in Exhibits C, D, and E. MWD shall then calculate each cost component for reconciliation of the Estimated LPP Contribution and LPP Contribution for the Fiscal Year pursuant to Section 7.6. Only refinancing changes which lower the Annualized Capital Component shall be included in subsequent Annualized Capital Component determinations.
Section 7.6 is added to read as follows:
7.6: Within 270 days after the end of every fiscal year, the LPP Contribution shall be calculated by MWD based on supporting documentation of project costs and credits provided by CMWD pursuant to Sections 1.6 and 7.5. The LPP Contribution shall then apply retroactively to all Actual Yield sales to MWD during the term of this Amendment for the applicable Fiscal Year. An adjustment shall be computed by MWD for over or under payment of Actual Yield sales; reimbursement, if appropriate, shall be paid by MWD or CMWD within 90 days after such adjustment.
Section 8 of the Agreement is deleted.
Section 9.1 of the Agreement is deleted.
Section 10 is revised to read as follows:
10.1: The term of this First Amended Agreement shall commence on September 1, 1995. The Amended Agreement shall terminate on the earlier of (i) January 31, 2018 or (ii) the last day of the Option Period referenced in Section 10.2; or (iii) the effective date of a long-term LRP Agreement.
10.2: Upon adoption by MWD*s Board of Directors of the long-term Local Resources Program prior to termination of this First Amended Agreement, SDCWA and CMWD shall have an Option Period (Option Period) during which SDCWA and CMWD shall either (i) execute a new agreement in accordance with the provisions of
-5-
the adopted LRP or (ii) revert to the original LPP Agreement. The Option Period shall commence on the date of the Board Action and terminate on the last day of the month which is one year from the commencement date. This First Amended Agreement shall remain in force for the duration of the Option Period. SDCWA and CMWD shall notify MWD in writing of their election prior to the termination of the Option Period. If SDCWA and CMWD do not provide MWD with written notice of its election pursuant to this Section, the underlying terms of the original LPP Agreement shall automatically, without further action by the Parties, be restored to full force and effect immediately following the last day of the month in which the Option Period terminates.
10.3: Upon termination of the First Amended Agreement, MWD will calculate the LPP Contribution within 270 days after the end of the Fiscal Year pursuant to Sections 1.6 and 7.5 for reconciliation of the LPP Contribution. The LPP Contribution shall then apply retroactively to all Actual Yield sales to MWD during the term of this Amendment for the applicable Fiscal Year. An adjustment shall be computed by MWD for over or under payment for Actual Yield sales; reimbursement, if appropriate, shall be paid by MWD or CMWD within 90 days after such adjustment.
Section 16 is amended to read as follows:
Section 16: Governins Law.
The law governing this agreement shall be the laws of the State of California and the venue of any action brought hereunder shall be in Los Angeles County, California.
Section 17 is added to reah as follows:
Section 17: Coordinatinq Committee.
17.1: ttCoordinating CommitteeI shall mean a committee composed of one participant each from MWD, SDCWA and CMWD. The purpose of the Coordinating Committee is to resolve issues arising during the term of the Agreement as authorized under certain sections of this Agreement. The Coordinating Committee shall meet as needed to make decisions regarding the LPP Contribution, Annualized Capital Component, Operation and Maintenance Component, Annualized Replacement Component, and Project Unit Cost as required by Section 7 of this Agreement and any other issues as deemed appropriate by one or more parties to this Agreement.
17.2: The Coordinating Committee shall be responsible for resolving issues arising during the term of this Agreement to the extent expressly authorized under other provisions of this Agreement. The Coordinating Committee shall, to the extent possible, seek to establish consensus in carrying out its responsibilities. MWD shall have a single vote on the committee
-6-
and the other Parties (SDCWA and CMWD) shall collectively have a single vote on the committee. If by voting the Coordinating Committee cannot resolve a particular matter or matters, a third party shall be mutually appointed to provide a third vote on the Committee, and the Coordinating Committee shall then act by majority vote as to the matter or matters. The Coordinating Committee's decision shall be final and binding on all Parties. If the Parties cannot agree on the third party, then any Party may request a court to appoint the third party pursuant to Code of Civil Procedure, Section 1281.6. costs for the third party shall be paid one-half by MWD and one-half collectively by SDCWA and CMWD, and shall not be included in the Project Unit Cost.
Section 18 is added to read as follows:
Section 18: Record Keeoinq.
18.1: CMWD shall establish and maintain accounting records of all costs incurred and offsets against costs for the construction, operation and maintenance, and replacement parts of the Project as described in Exhibits C, D, and E. Accounting for the Project shall utilize generally accepted accounting practices and be consistent with the terms of this Agreement. CMWD's Project accounting records must clearly distinguish all costs for the Project from CMWD's other water production, treatment, and distribution costs. CMWD's records shall also be adequate to determine Actual Yield and Recovered Water to accomplish all cost calculations contemplated in this Agreement.
18.2: CMWD shall establish and maintain accounting records of all contributions including grants and payments received for water service provided to ‘End Users outside of CMWD that offset eligible Project capital costs, operation and maintenance costs, and/or replacement costs. Records of such transactions shall be reported to MWD within 180 days of the end of every Fiscal Year in which a contribution is received.
18.3: CMWD shall collect Recovered Water and Actual Yield data for each Fiscal year of Project operation and retain records of that data based on the metering plans described in Section 7.4.
Section 19 is added to read as follows:
Section 19: Project Audits.
19.1: MWD and SDCWA shall have the right to conduct an independent audit of all Project costs incurred in any Fiscal Year pursuant to this Agreement. The right to audit shall be for a period of three years following the termination of this Agreement. CMWD shall, within one year of determination, reimburse MWD's financial contributions pursuant to this Agreement which are not required based on the results of the independent audits.
-7-
19.2: CMWD shall make available for inspection to MWD and SDCWA, upon 30 days advance notice, all records, books and other documents, including all billings and costs incurred by contractors, relating to the construction, operation and maintenance of the Project and any offsets as described in Exhibits C, D, and E for a period of three years after occurrence of any Project costs pursuant to the Agreement. Upon 30 days advance notice and at MWD or SDCWA's request, CMWD shall also allow MWD and/or SDCWA's personnel to accompany CMWD staff in inspecting CMWD's contractors' records and books for the purpose of conducting such audits of Project costs.
Section 20 is added to read as follows:
Section 20: General Provisions.
20.1: Exhibits ltCtt, ttDtt, ttEtl, and ltFtl attached to this First Amendment and incorporated herein, are added to the Agreement.
20.2: On and after the effective date of this Agreement, each reference in the Agreement to "this Agreement," lthereunder,tt ttherein,lt or words of like import referring to the Agreement and First Amendment shall mean the Agreement as amended and modified by this First Amendment. The Agreement, as amended and modified by this First Amendment, is and shall continue to be in full force and effect and is hereby ratified and confirmed by the Parties.
20.3: This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which taken together shall constitute one and the same Amendment.
-8-
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment effective as of the date first hereinabove written.
APPROVED AS TO FORM: THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
N. Gregory Taylor John R. Wodraska General Counsel General Manager
By: By: Deputy General Counsel Chief of Planning and Resources
APPROVED AS TO FORM: SAN DIEGO COUNTY WATER AUTHORITY
By: By: General Counsel Director of Water Resources ‘
APPROVED AS TO FORM: CARLSBAD MUNICIPAL WATER DISTRICT
By: BY General Counsel p- y-xl
-9-
EXHIBIT "'2"
1.
ANNUALIZED CAPITAL COMPONENT
The Annualized Capital Component shall be computed
using incurred costs for the following:
a. Design and construction management services.
b. Construction of Project facilities, more
particularly described in Exhibit "A". Additional
capital improvements that are not consistent with
the Project Description outlined in Exhibit A must
be submitted to MWD for review. Written approval
by MWD is required before such costs are
considered eligible for inclusion in the
Annualized Capital Component calculation.
C. Agency administration of the design and
construction, not to exceed three (3) percent of
construction costs, unless otherwise approved in
writing by MWD.
d. Permits, including required background data
collection.
e. Initial Project start-up prior to the production
of Actual Y2eld.
f. Land, right-of-way and easements for the Project
described in Exhibit "A".
g- Environmental documentation and mitigation
measures directly related to the implementation or
operation of the project and required to comply
with applicable environmental laws, including but
not limited to the California Environmental
Quality Act (CEQA), National Environmental Policy
Act (NEPA), and the California and Federal
Endangered Species Acts. Environmental
documentation costs shall commence from the Notice
of Preparation and conclude with the filing of the
Notice of Determination. Any environmental documentation costs incurred prior to the Notice
of Preparation which were directly related tot he
environmental clearance of the project may also be eligible, subject to review and approval of the
Coordinating Committee.
-lO-
h. Contributions, including grants (other than those
derived from within SDCWA's service area boundaries), that offset eligible Project capital
costs shall be treated as negative capital cost values for the purpose of computing the Annualized Capital Component.
2. Cost of the following items shall not be used to calculate the Annualized Capital Component:
a.
b.
C.
d.
e.
f.
g.
Storm drains, sewer collection systems, and
treatment and distribution facilities beyond the
Project's points of connection.
Existing facilities, land, right-of-way, and
easements, except as described in Exhibit A.
Feasibility studies.
Facilities necessary to meet the National
Pollution Discharge Elimination System (NPDES) and
California Waste Discharge requirements.
Deposit of any reserve funds required as a
condition of financing.
Payments to offset reduced sales of potable water.
All other items not specified in Section 1 of this
Exhibit.
3. Annualized Capital Cost (Accost) in dollars per year
shall be computed using the following procedure:
ACCost=[(CRF)l * Pl]+[(CRF)2 -or P2]+..+[(CRF)x * Px]
Where:
P, shall mean each portion of incurred capital cost for
Project with a distinct financing arrangement.
CRF is the capital recovery factor for each distinct
financing arrangement, as follows:
i[(l+i)n]
CRF, = --------s--m
[(l+i)"]-1
i is the interest rate percentage
n is the number of payments in years
-ll-
x is the number of each separate financing element
a. CMWD capital costs not covered by a specific
financing arrangement shall be amortized over
25 years at an interest rate equal to the
lessor of: (i) MWD's most recent weighted
cost of long-term debt on June 30 for each
applicable fiscal year; or (ii) the fiscal
year average of the 25-bond Revenue Bond Index
(RBI), as published in the Bond Buyer, in the
year of execution of this First Amendment.
4. The Annualized Capital Component (ACCom) in dollars per
acre-foot for purposes of determining the Project Unit
Cost each Fiscal Year shall be calculated using the following formula:
ACCom = (Accost) (D) / (365) (Q)
Where:
Q = Recovered Water from the project for the fiscal year
D = the number of days, not to exceed 365, in a Fiscal
Year following the initial start of operation and
prior to the termination of the agreement.
-12-
EXHIBIT "D"
OPERATION AND MAINTENANCE COMPONENT
1. The Operation and Maintenance Component shall be computed
using incurred costs for the following:
a. Professional consulting services for Project
operation, maintenance and audit.
b. Employee salary and corresponding overhead costs for
the hours worked by CMWD's staff specifically
pertaining to the operation and maintenance of the
Project. Overhead costs are limited to CMWD's
normal employee benefits plus its general costs of
conducting business which are assessed uniformly to
the salary of its work force for comparable
services. Overhead rates exceeding 65 percent must
be approved by the Coordinating Committee.
C. Chemicals and supplies for Project operation and
maintenance.
d. Net electrical energy (recovered energy shall be deducted from energy purchased) for Project
operations.
e. Contractor services and supplies for Project
facilities, operation, maintenance and repair to
maintain reliable system operation and achieve
regulatory compliance.
f. Monitoring required by waste discharge permits,
including water quality sampling and analysis of
reclaimed water produced by the Project.
g- Replacement parts for Project facilities costing less
than or equal to $100,000.
h. Ongoing environmental mitigation measures, approved in
advance by MWD in writing, that are necessary to
operate the Project.
1. Contributions, including grants (other than those
derived from within SDCWA's service area
boundaries), that offset eligible Project operation and maintenance costs shall be treated
as negative operations and maintenance cost values
for the purpose of computing the Operation and
Maintenance Component.
-13-
j. Purchase of recycled water for beneficial use from
Leucadia County Water District's (LCWD) Gafner Water
Reclamation Plant and Vallecitos Water District's
(VWD) Meadowlark Water Reclamation Plant for the
Project. The sum of recycled water purchased from
LCWD and VWD shall not exceed 2,050 acre-feet in any
given fiscal year.
For the purposes of calculating the amount of recycled water
purchased from LCWD's Gafner Water Reclamation Plant and
delivered to the La Costa Golf Course (South Lake), eligible
recycled water purchase costs are calculated as follows:
Water Purchase Costs from Gafner (WPG) = (F) x (G)
Where:
F is the lesser of:
i.) 99 percent of CMWD's retail potable water price charged
to residential users within CMWD's service area; or
ii.) $732/AF * (CPIcurrent /CPIFY 1994-95)
G = the amount of recycled water produced by GWRP and used
by the La Costa Golf Course at South Lake for
beneficial use, not to exceed 394 afy.
CP1current = the current fiscal year Consumer Price Index
for all items for the San Diego area.
CPIFY 1994-95 = the June 1995 Consumer Price Index for all
items for the San Diego area; June 1995 CPI = 156.3.
For the purposes of calculating the amount of recycled water
purchased from VWD's Meadowlark Water Reclamation Plant
(MWRP) and delivered for beneficial use to CMWD, eligible
recycled water purchase costs are calculated as follows:
Water Purchase Costs from Meadowlark (WPM) = (F') x (M)
Where:
F' is the lesser of:
i.) VWD's reclaimed water price for the current fiscal year
sold to CMWD; or
ii. 1 $262/AF * (CPIcurrent /CPIFy 1994-95)
M = the amount of recycled water produced by MWRP and used
by CMWD for beneficial use.
-14-
CP1current = the current fiscal year Consumer Price Index
for all items for the San Diego area.
CPIFY 1994-95 = the June 1995 Consumer Price Index for all
items for the San Diego area; June 1995 CPI = 156.3.
2. Costs of the following items shall not be used to calculate
the Operation and Maintenance Component:
a. Operation, maintenance, and treatment of distribution
and sewer collection systems beyond the Project's
points of connection.
b. Operation and maintenance of facilities necessary to
meet National Pollution Discharge Elimination System
(NPDES) and California Waste Discharge requirements.
C. Replacement parts as specified in Exhibit "El',
Annualized Replacement Component.
d. All others not specified in Section 1 of this Exhibit.
e. Payments made to another department or element of CMWD
or between CMWD and SDCWA.
3. The Annualized Operation and Maintenance (O&MC) in dollars
per acre-foot for, purposes of determining the actual Project
Unit Cost each Fiscal Year shall be calculated using the
following formula:
(O&MC) = (Actual Annual Cost of O&M) / (Recovered Water)
-15-
EXHIBIT "E"
ANNUALIZED REPLACEMENT COMPONENT
1. The Annualized Replacement Component shall be computed
using incurred costs for the following:
a. Replacement of major Project parts exceeding
$100,000 per unit for facilities described in
Exhibit "A", Project Description.
b. Salvage value of replaced parts shall be a
negative replacement cost.
C. Contributions, including grants (other than those
derived from within SDCWA's service area boundaries),
that offset eligible Project replacement costs shall
be treated as negative replacement cost values for the
purpose of computing the Annualized Replacement
Component.
2. Costs of the following items shall not be used to
calculate the Annualized Replacement Component:
a. Replacement of treatment, distribution, or sewer
collection systems beyond the Project's points of
connection.
b. Any capital or operation and maintenance cost as
previously defined in Exhibits C and D, Annualized
Capital Component and Operation and Maintenance
Component, respectively.
C. Reserve funds.
3. The Annualized Replacement Cost (ARCost) regarding each
replacement occurrence defined in this Exhibit "E"
shall be calculated using the following procedure:
ARCost=[(CRF)l * Rl]+[(CRF)2 * R2]+..+[(CRF)x * Rx]
Where:
Rx shall mean the eligible replacement cost of the
Project incurred in each fiscal year.
CRF is equal to the capital recovery factor used to
amortize incurred replacement costs over 25 years
using an interest rate equal the lessor of:
-16-
(i) MWD's most recent weighted cost of long-term
debt on June 30 for each applicable fiscal year; or
(ii) the fiscal year average of the 25-bond Revenue Bond Index (RBI), as published in the Bond Buyer, in
which eligible replacement costs are incurred.
4. The Annualized Replacement Component (ARCom) for
each replacement occurrence in dollars per acre-foot
shall be calculated using the following procedure:
ARCom = ARCost/Q
Where:
Q is the Recovered Water of the Project
-17-
EXHIBIT "F"
DEFERRED COST
Deferred Cost (DC) applicable to the determination of
the LPP Contribution for the next fiscal year is computed as
follows:
DC = (EPC) / (Recovered Water)
Where:
1. EPC is the Excess Project Cost incurred in a fiscal
year and calculated using the following formula:
EPC = [(Project Unit Cost) - (MWD's applicable
noninterruptible treated water rate + the
amortized cost of any avoided New Demand Charge +
$250/AF)] * (Actual Yield)
The EPC value for a given fiscal year shall be used
only in the calculation of DC for the next fiscal year
and shall be considered zero thereafter. There shall be no DC value carryover upon Agreement termination.
2. The Recovered Water term used in the calculation of DC
in this exhibit shall mean all Reclaimed Water,
measured in acre-feet, delivered for beneficial use by
the Project in the following fiscal year.
encina/agree
-18-
November 12, 1996
TO: KAREN KUNDTZ, DEPUTY CITY CLERK
FROM: William E. Plummer, District Engineer
JOINT PARTICIPATION AGREEMENT FOR THE DEVELOPMENT AND
UTILIZATION OF RECLAIMED WATER BETWEEN THE MWD, SDCWA, AND
CMWD, CMWD PROJECT NO. 91-305
Attached are three original copies of the subject agreement. Upon approval of the
Board of Directors, please obtain signatures of Executive Manager (Ray Patchett) and
General Counsel. Please return all three original copies to William E. Plummer, District
Engineer for further processing with the Metropolitan Water District of Southern
California.
If you have any comments or require any additional information, please contact me at
ext. 105.
RJG:sjs
attachment (3)
CMWD 91-305
..,, ir,%:,, _
?
1
2
3
4
5
6
7
a
9
RESOLUTION NO. 960
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CARLSBAD MUNICIPAL WATER DISTRICT OF THE CITY OF
CARLSBAD, CALIFORNIA, APPROVING THE FIRST
AMENDMENT TO THE JOINT PARTICIPATION AGREEMENT
FOR THE DEVELOPMENT AND UTILIZATION OF RECLAIMED
WATER BETWEEN THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA, SAN DIEGO COUNTY WATER
AUTHORITY, AND CARLSBAD MUNICIPAL WATER DISTRICT FOR THE ENCINA BASIN WATER RECLAMATION PROJECT
PHASE I, CMWD PROJECT NO 91-305
WHEREAS, there is now in effect a Joint Participation Agreement (Agreement) by and
10 between MWD, SDCWA, and CMWD dated January 21, 1993 for the development and utilization
11 of reclaimed water which provided for the Encina Basin Water Reclamation Project Phase I
12 (Project) to participate in MWD’s Local Projects Program (LPP); and
13 WHEREAS, operation of the Project commenced in January 1993; and
14 WHEREAS, ‘MWD’s Board of Directors, at its August 22, 1995 meeting, authorized
15 amendment of existing LPP agreements to incorporate draft terms of a new program to be called
IL6 the Local Resources Program (LRP) for the purposes of improving regional water supply
17 reliability and changing the LPP Contribution from a set rate of $154 per acre-foot to a sliding
ia scale, from $0 to a maximum of $250 per acre-foot; and
WHEREAS, in consideration of the potential increase in the LPP Contribution, both
Parties have agreed to extend the term of the Agreement from 7 years to 25 years.
WHEREAS, the Parties mutually acknowledge that this First Amendment to the
23 Agreement shall be an interim agreement. Development of Reclaimed Water between MWD,
24 SDCWA, and CMWD for the Encina Basin Water Reclamation Project, Phase I, is incorporated
25 hereby reference, and is accepted; and
26 WHEREAS, there is now in effect a Joint Participation Agreement (agreement) by and
between MWD, SDCWA, and CMWD dated January 21, 1993 for the development and utilization
28
t 4
1 of reclaimed water which provides for the Encina Basin Water Reclamation Project Phase I
2 II (project to participate in MWD’s Local Projects Program (LPP). I
3
4 NOW , THEREFORE, BE IT RESOLVED by the Board of Directors of the Carisbad
3 Municipal Water District as follows:
6 1. That the above recitations are true and correct.
7
8 2. That the First Amendment to the Joint Participation Agreement for the
9 Development of Reclaimed Water between MWD, SDCWA, and CMWD for the Encina Basin
10 Water Reclamation Project, Phase I, is incorporated hereby reference, and is accepted.
11
12 3. That the Executive Manager and the Secretary are authorized to execute the First
13
/I
Amendment to the agreement.
14 PASSED, APPROVED AND ADOPTED at a special meeting of the Carlsbad Municipal
15 Water District held on 3rd day of December 19=, by the following vote to
16 wit:
17
18 AYES: Board Members Lewis, Nygaard, Kulchin, Hall and Finnila
19 I
20
21
22
NOES: None
ABSENT: None
23 ATTEST:
24
25
26 ALETHA L. RAUTENKRANZ, Secretary I
27 (SEAL)
28
CMWD 91-305