HomeMy WebLinkAbout25O - GROUNDWATERREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JULY 7, 2008
TITLE:
AMENDMENT TO GROUNDWATER STORAGE
PROGRAM FUNDING AGREEMENT
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 1S' Reading
^ Ordinance on 2nd Reading
^ Implementing Resolution
^ Set Public Hearing For
CONTINUED TO
/ C17'Y MANAGER
RECOMMENDED ACTION
Authorize the City Manager
attached third amendment to
with the Metropolitan Water
Water District of Orange Cour.
to non-substantive changes
Attorney.
FILE NUMBER
and Clerk of the Council to execute the
the groundwater storage funding agreement
District of Southern California, Municipal
qty and Orange County Water District, subject
approved by the City Manager and City
DISCUSSION
In Aril 2001, the Metropolitan Water District of Southern California
(MWD) approved funding for a groundwater storage program proposed by the
Municipal Water District of Orange County (MWDOC) and the Orange County
Water District (OCWD). In January of 2004, The City of Santa Ana entered
into an agreement with OCWD and MWDOC to participate in this program.
The ground water storage program allows for up to 60,000 acre feet of
excess MWD surface water to be delivered by MWD and stored during normal
and wet years in the Orange County groundwater basin. Currently,
approximately 48,000 acre feet have been stored under this program.
During drought or emergency periods, as much as 22,000 acre feet per year
could be extracted from the groundwater basin. OCWD and the
participating groundwater agencies, including Santa Ana, will be asked to
pump a total of 22,000 acre feet from storage during fiscal year 2008-09.
The storage program includes
strategically located in the OC4
constructed and are connected to
provide backup pumping capacity.
the eight new wells, Well No. 40
located at the Santa Ana Stadium.
funding for eight new water wells
JD service area. The wells have been
the individual city's water system to
The City of Santa Ana received two of
located at Mabury Park and Well No. 41
250-1
Amendment to Groundwater Storage Program Funding Agreement
July 7, 2008
Page 2
The proposed third amendment to the groundwater storage program funding
agreement is being proposed to remove OCWD from the billing process and
simplify program administration. This will allow Santa Ana to be billed
directly by MWD and not through MWDOC and OCWD.
£sNVIRONMENTAL IMPACT
In accordance with the California
recommended action is not considered
environmental documentation is required.
Environmental Quality Act, the
a CEQA project. Therefore, no
FISCAL IMPACT
There is no fiscal impact associated with this action.
Ja es G'. Ross
E cutive Director
P blic Works Agency
250-2
THIRD AMENDMENT
TO
GROUNDWATER STORAGE PROGRAM FUNDING AGREEMENT
BY AND AMONG
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
ORANGE COUNTY WATER DISTRICT, AND
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY
AND AMENDED TO ADD
CITY OF ANAHEIM AND CITY OF SANTA ANA
FOR THE PURPOSE OF ADJUSTING THE CERTIFICATION AND BILLING PROVISIONS
OF THE GROUNDWATER STORAGE PROGRAM
THIS THIRD AMENDMENT TO THE GROUNDWATER STORAGE PROGRAM
FUNDING AGREEMENT, dated as of June 25, 2003, is entered into on , 2008 by and
among The Metropolitan Water District of Southern California (Metropolitan), a public entity of the
State of California, the Orange County Water District (OCWD or Program Agency), a water district of the
State of California and the Basin Manager for the Orange County Basin, the Municipal Water District of
Orange County, a municipal water district of the State of California, (MWDOC or Member Agency), the
City of Anaheim (Anaheim), and the City of Santa Ana (Santa Ana) (Anaheim and Santa Ana are
described as among the "Operating Parties" under the Agreement).
I. RECITALS
A. Since execution of the Groundwater Storage Program Funding Agreement by Metropolitan,
OCWD and MWDOC in June 2003, and the effective date of the First Amendment on May 1,
2004, and the effective date of the Second Amendment on November 16, 2005, (the Groundwater
Storage Program Funding Agreement, as amended by the First Amendment and Second
Amendment, is hereby referred to as the "Agreement") the original parties, Metropolitan, OCWD
and MWDOC, have reconsidered the storage, extraction and invoicing procedures for storing
water within and extracting water from the Orange County Basin and correspondingly allocating
such water to and removing such water from the Metropolitan Storage Account. With respect to
storage, the Agreement currently provides for MWDOC to certify all stored water whether
directly stored or stored in-lieu. Metropolitan then credits the water invoice for MWDOC,
referred to as Member Agency under the Agreement, for water allocated to the Metropolitan
Storage Account. With respect to extraction, the Agreement currently provides that the
Metropolitan water invoice for all water extracted from the Metropolitan Storage Account be
billed to MWDOC, with MWDOC paying the invoice and then submitting it to OCWD, the
Program Agency under the Agreement, to collect for reimbursement from the Operating Parties,
which include two other Metropolitan member agencies, Anaheim and Santa Ana. Because
Metropolitan member agencies are among the Operating Parties, administrative difficulties have
arisen with these procedures. As a result, this Third Amendment will modify the certification and
billings procedures under the Agreement to provide that any participating Metropolitan member
agency overlying the Basin may store water in the Metropolitan Storage Account and to provide
for direct billing by Metropolitan to each participating Metropolitan member agency.
B. The City of Anaheim and the City of Santa Ana are added as parties to the Agreement pursuant to
this Third Amendment solely for the purpose of participating in the Agreement with regard to
revised certification and billing procedures for Metropolitan member agencies.
C. This amendment changes the operation of the Program as follows:
250-3
• The Operating Committee remains responsible for agreeing on an Annual Operating Plan,
pursuant to which OCWD directs locations for storage and extraction to further its
management objectives in the Basin.
• Storage and extraction can be accomplished by any overlying Metropolitan member agency
subject to this Agreement, i.e. MWDOC, Santa Ana, or Anaheim, but MWDOC shall be
responsible for coordinating all certifications for storage and extraction.
• When Metropolitan calls for extraction from the Metropolitan Storage Account (Stored Water
Delivery), Metropolitan shall send its water invoice to the participating member agency
(MWDOC, Anaheim, Santa Ana) making the extraction based on the extraction certifications
submitted. The water invoice for Stored Water Delivery will have one set of credits (O&M
and electrical power) for each Metropolitan member agency (MWDOC, Anaheim, Santa
Ana).
• If there is a penalty for non-performance pursuant to Agreement section XIII(B), the penalty
invoice shall be sent by Metropolitan to MWDOC. MWDOC shall pay the penalty invoice
and forward it to OCWD for reimbursement. OCWD shall distribute the penalty to the non-
performing Operating Party(ies), collect the funds, and reimburse MWDOC for its payment
to Metropolitan.
D. By signing this Third Amendment, Anaheim and Santa Ana, which participate in the Program
pursuant to separate Contracts Regarding the Implementation of MWD Long-Term Groundwater
Storage Program, agree to process certifications and billings under the Agreement as set forth in this
Third Amendment.
NOW THEREFORE, it is mutually agreed that the following changes are hereby made to the
Agreement:
In the Agreement, the term "Member Agency" refers solely to MWDOC and the term "Operating
Parties" includes Anaheim and Santa Ana.
1. Section VI. OPERATING COMMITTEE subsection B. Program Agency Obligations,
paragraph 6 is revised to read:
6.
. Program Agency (OCWD) shall be responsible for
prompt payment to Member Agency (MWDOC) to
reimburse Member Agency for any Nonperformance Penalty assessed MWDOC by
Metropolitan pursuant to Section XIII(B).
2. Section VI. OPERATING COMMITTEE subsection C. Member Agency Obligations is revised
to read:
M W DOC hereby agrees to:
l . Process all performance certifications for storage and extraction in accordance with
Exhibits F and G. Coordinate all certifications for storage and extraction accomplished
by MWDOC, Anaheim and/or Santa Ana MWDOC to process all certifications and to
receive and pay the Metropolitan water invoice for storage and/or extraction
accomplished for the Pro ram by any non-Operating Party that is asub-agency of
M W DOC.
2. Receive and pay the Metropolitan water bill for all Stored Water Deliveries under this
program, except Stored Water Deliveries to Anaheim or Santa Ana, in accordance with
Metropolitan Administrative Code Section 4507. Metropolitan shall send its monthly
250-4
water invoice for any Stored Water Delivery for Anaheim or Santa Ana directly to
Anaheim or Santa Ana.
Receive and pay any Metropolitan invoice for Basin Nonperformance Penalty. Submit
any penalty water bill to the Program Agency for transmittal to appropriate Operating
Parties. Program Agency shall be responsible for prompt payment to MWDOC €e~
to reimburse MWDOC for an Nonperformance Penalty
assessed MWDOC by Metropolitan pursuant to Section XI[I(B).
3. Section VL OPERATING COMMITTEE subsection D. Metropolitan Obligations is revised to
read:
In accordance with the procedures set forth in clause (E) below, Metropolitan hereby agrees to:
Pay costs of operating and maintaining the Prop.l3 funded extraction Facilities at the
unit rate (dollars per AF of Stored Water Deliveries) determined by the Operating
Committee for the Operating Party(ies) and for comparable per AF costs for
performance by non-Operating Parties identified in the Annual Operating Plan and
agreed to b ty he Operating Committee that extracted water as adjusted when and as
required by Section VI(A)(4)(e) (the "Operation and Maintenance Costs");
2. Pay the Electrical Costs as determined in Section VI(A)(4)(f) to extract water from the
basin, if any, equal to Stored Water Deliveries (as defined in Section V[1(C) below) for
the applicable period for the Operating Party(ies) and for comparable per AF costs for
performance by non-Operating Parties identified in the Annual Operating Plan and
agreed to b ty he Operating Committee that extracted the water; and
3. Commencing on the first July 1st after water is initially stored in the Program Basin on
Metropolitan's behalf, and on July 1 of each subsequent year, Metropolitan shall pay an
administrative fee in an annual amount of $80,000 to the Program Agency (as such
amount is adjusted on each anniversary of the execution of this Agreement by the lesser
of 2.5% or the Urcc~mTConsumer Price Index for the ~'~y=Los Angeles-Riverside-
Orange County area published by the Bureau of Labor
E _^'•'°°°"'°'`'°"~~ ° °° a), for the incremental costs and expenses of administering the
Program during such year.
4. Section VI. OPERATING COMMITTEE subsection E. Payment of Operation and Maintenance
Costs and Electrical Costs is revised to read:
Amounts owing by Metropolitan pursuant to Section VI(D) for Operation and Maintenance Costs and
Electrical Costs shall be paid through a credit to Metropolitan's monthly invoice for the Stored Water
Delivery ~~y pursuant to Section VI[(D). Metropolitan shall send a water invoice to
MWDOC. Anaheim and/or Santa Ana as appropriate consistent with certifications for Stored Water
Delivery. The Metropolitan water invoice shall provide one set of unit rates (,dollars per acre-foot of
Stored Water Delivery) to credit Operation and Maintenance and Electrical costs to each Metropolitan
member a enc~ The Operating Committee shall review the credits at the end of the call period to to
ensure that the credits reasonably reflect actual O&M and Electrical Costs to extract stored water Upon
the credit to Metropolitan's invoice for the Operation and Maintenance Costs and Electrical Costs,
Metropolitan will have satisfied its funding obligations with respect thereto.
5. Section VII. GROUNDWATER STORAGE AND EXTRACTION is revised to read as follows:
250-5
A. Metropolitan's Storage Account Rights
During any fiscal year of the term of this Agreement, Metropolitan may deliver up to
15,000 AF of Program Water for storage in the Program Basin with an equivalent
amount to be accounted for in the Metropolitan Storage Account pursuant hereto;
provided, however, that total Program Water stored on behalf of Metropolitan in the
Program Basin, pursuant to this Agreement, shall never exceed the Maximum Storage
Amount unless approved by the Program Agency. Deliveries shall be subject to the
prior approval of the Program Agency pursuant to the policies described in subsection 5
below. Metropolitan shall not be obligated to pay any fees associated with basin
utilization.
2. Metropolitan may make such deliveries to MWDOC, Anaheim and/or Santa Ana as
provided in the Annual Operating Plan adopted by the Operating Committee on fifteen
(15) days advance notice to both Member Agency and Program Agency. Program
Agency will credit the Metropolitan Storage Account by the amount of Program Water
delivered to MWDOC, Anaheim and/or Santa Ana.
Upon notification by Metropolitan pursuant to Section VII(A)(2), Program Agency will
either: (a) directly store the amount of any such delivery of Program Water in the
Program Basin (e.g., by injection or spreading); or (b) store the amount of any such
delivery of Program Water in the Program Basin by in lieu storage, i.e., by reducing
pumping from the Program Basin by the amount of such delivery.
4. The quantity of Program Water delivered to the Metropolitan Storage Account in any
given month shall be determined in accordance with the accounting methodology set
forth in Exhibit F.
5. Metropolitan hereby acknowledges and agrees that (i) the Program Basin is not an
adjudicated basin and this Agreement does not create any storage rights with respect to
the Program Basin, and (ii) the Parties will not treat this Agreement as creating any
storage right with respect to the Program Basin.
B. Certification of Deliveries to Metropolitan Storage Account
Metropolitan shall deliver available Program Water to MWDOC, Anaheim and/or Santa
Ana at the appropriate service connection(s) for storage in the Metropolitan Storage
fitter Account. MWDOC shall be responsible to coordinate submittal of all
certifications for storage in the Basin and to certify the facts concerning the quantities
of such deliveries to MWDOC. Anaheim and Santa Ana shall copy MWDOC on all
certifications of water stored the Metropolitan Storage Account.All certifications of
service connection deliveries to the Metropolitan Storage Account shall be provided to
Metropolitan in writing or electronically in a format satisfactory to Metropolitan by a
responsible officer of MWDOC, Anaheim, and Santa Ana. *"° ""°~"°~ ^ ~-°~°~~
2. Metropolitan will credit the MWDOC, Anaheim and/or Santa Ana invoice at the
applicable rate for each acre-foot of water certified by each respective agency t#e
"=e::"°v`. T °° ~ for that service connection.
250-6
3. Certifications of Program Water for a given billing period must be received by
Metropolitan before 3:30 p.m. on the third working day after the end of the month to
receive credit on the bill for that billing period or any preceding billing period.
4. No certification received after six months following the end of any month in which a
credit for Program Water is claimed will be accepted.
5. When receiving in-lieu supplies that are being stored in the Metropolitan Storage
Account, and after certification, Anaheim and Santa Ana will pay OCWD the applicable
replenishment assessment and their avoided well ener~y cost.
C. Extraction of Stored Water
In lieu of providing all or some of its regular surface water deliveries to MWDOC, Anaheim
and/or Santa Ana, Metropolitan may, on fifteen (15) days advance notice, deliver water to
MWDOC, Anaheim and/or Santa Ana as provided in the Annual Operating Plan adopted by the
Operating Committee on the first of the following month by requesting Program Agency to debit
the Metropolitan Storage Account (each such delivery being a "Stored Water Delivery");
provided, however, that unless permitted by Program Agency in its capacity as basin manager,
such Stored Water Deliveries shall not, in any fiscal year exceed the lesser of (a) 20,000 AF or (b)
the amount then remaining in the Metropolitan Storage Account. Metropolitan's regular surface
water deliveries to MWDOC, Anaheim and/or Santa Ana will be reduced by the amount of such
Stored Water Delivery to each agency. During an emergency or unforeseen operational
condition, Program Agency will use its best efforts in responding to Metropolitan's request for a
Stored Water Delivery. [Joel, the Annual Operating Plan outlines how many acre-feet are to be
extracted by each agency. For every of taken from the Met Storage Acct by each M W DOC,
Anaheim and Santa Ana, one of less should be taken at that agency's service connections]
If Metropolitan selects the option pursuant to Section VII(C), Program Agency shall cause to be
pumped the amount of the Stored Water Delivery from the Program Basin in lieu of receiving
"~"~~"=geHS~'-s regular surface water deliveries.
D. Payment for Extraction of Stored Water
Upon call by Metropolitan for Stored Water Delivery, Metropolitan shall invoice MWDOC,
Anaheim and/or Santa Ana for the amount(s) certified as extracted by each agency, repet~ec~-as
and each 1~4e~tb~
shall pay to Metropolitan, in accordance with Metropolitan Administrative Code Section 4507,
the then applicable full-service rate (or its equivalent, as determined by Metropolitan in its
reasonable discretion) as if such Stored Water Deliveries were surface water deliveries through
their respective Mender ~4ge+~e~s service connections. ",Icm"°r ^'-°~°•~ ~"~~~ ~~°•~~~° *"°
n~-i~- The invoice from Metropolitan to MWDOC, Anaheim and/or Santa Ana shall include
credits for the Operation and Maintenance Costs and the Electrical Costs associated with the
Stored Water Delivery. Anaheim and Santa Ana shall copy MWDOC on all certifications of
water extracted from the Metropolitan Storage Account.
6. Miscellaneous
250-7
A. The Agreement is, and shall continue to be, in full force and effect, except as specifically amended by
this Third Amendment. This Third Amendment shall not be construed to be a waiver of any provision of
the Agreement, or a consent to any failure to comply with the Agreement.
B. Except as otherwise expressly provided herein, the Agreement is in all respects ratified and confirmed,
and nothing contained in this Third Amendment shall, or shall be construed to, modify, invalidate or
otherwise affect any provision of the Agreement or any right of the parties arising thereunder.
C. This Third Amendment may be executed in as many counterparts as may be deemed necessary or
convenient and by the different parties hereto on separate counterparts, each of which, when so executed,
shall be deemed to be an original, but all such counterparts shall constitute but one and the same
agreement.
D. This Third Amendment shall be governed by and construed in accordance with the laws of the State of
California.
E. Copies of the Agreement and First and Second Amendments are attached to this Third Amendment as
Exhibit J.
250-8
IN WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to the Agreement to be
executed as of the date first set forth above:
THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
Jeffrey Kightlinger
By:
Stephen N. Arakawa, Manager
Water Resource Management
Signature Date:
APPROVED AS TO FORM:
Karen Tachiki, General Counsel
By:
Senior Deputy General Counsel
ORANGE COUNTY WATER DISTRICT
By:
General Manager
Signature Date:
APPROVED AS TO FORM:
By:
General Counsel
MUNICIPAL WATER DISTRICT OF ORANGE
COUNTY
By:
Kevin Hunt
General Manager
Signature Date:
APPROVED AS TO FORM:
By:
General Counsel
250-9
CITY OF ANAHEIM
By:
General Manager
Signature Date:
APPROVED AS TO FORM:
By:
General Counsel
The "City"
City of Santa Ana
A Charter City
By:
Attest:
By:
David N. Ream
City Manager
Patricia E. Healy
Clerk of the Council
Approved as to Form:
By:
Jose Sandoval
Managing Senior Assistant City Attorney
250-10
EXHIBIT J
Groundwater Storage Agreement and First and Second Amendments
250-11
250-12