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HomeMy WebLinkAbout05 APPROVE COOPERATIVE AGMT W/ IRVINE RANCH WATER DISTRICT FOR WELLS 21 & 22 DESALTER PROJECT• Agenda Item 5 :~ ~ AGENDA REPORT Reviewed: Finance Director MEETING DATE: JANUARY 18, 2011 TO: HONORABLE MAYOR AND COUNCIL MEMBERS VIA: DAVID C. BIGGS, CITY MANAGER FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS \CITY ENGINEER SUBJECT: APPROVE COOPERATIVE AGREEMENT WITH THE IRVINE RANCH WATER DISTRICT FOR THE WELLS 21 AND 22 DESALTER PROJECT SUMMARY Staff recommends that the City of Tustin enter into a Cooperative Agreement with the Irvine Ranch Water District (IRWD) for the Wells 21 and 22 Desalter Project. The purpose of this agreement is to establish a framework and methodology to quantify and mitigate the groundwater production impacts on the City of Tustin facilities associated with increased production from Wells 21 and 22. RECOMMENDATION It is recommended that City Council approve a cooperative agreement with the Irvine Ranch Water District for the Wells 21 and 22 Desalter Project, in a form substantially consistent with the attached and subject to approval by the City Attorney. FISCAL IMPACT All costs will be borne by IRWD and will be determined by the extent of impacts from the project determined under the Cooperative Agreement. Additional costs may be incurred if the City Council were to exercise the Option to acquire water supply capacity from the Wells 21 and 22 Desalter Project in the future. However, approval of the attached Agreement will not commit the City to exercise that Option. BACKGROUND/DISCUSSION On October 19, 2010, City Council approved the terms and conditions, and authorized the preparation of a cooperative agreement with the Irvine Ranch Water District (IRWD) for the Wells 21 and 22 Desalter Project (Project). The IRWD is proceeding with the implementation of the Project, which consists of: pumps and wellhead discharge facilities at Wells 21 and 22; an untreated water pipeline to deliver water from the wellheads to the treatment plant; a reverse osmosis treatment plant; a brine disposal pipeline from the groundwater treatment plant to a sewer system; and a finished water pipeline to deliver water from the treatment plant to the IRWD service distribution system. In 2009, IRWD received a federal grant of approximately $11 million toward design and construction of these facilities for the beneficial use of this impaired groundwater. To remain in compliance with federal grant requirements, the majority of funds for this project must be obligated by September 30, 2011. To meet this schedule objective, it will require the aggressive implementation of all project components. The accelerated implementation will require the active Tustin-IRWD Coop Agreement Wells 21 & 22 January 18, 2011 Page 2 cooperation of the City of Tustin, wherein the majority of facilities will be constructed. In an effort to establish a framework for that cooperation, staff negotiated the terms of a Cooperative Agreement with the IRWD staff. The Cooperative Agreement between City of Tustin and IRWD outlines an adaptive management strategy for the Wells 21 and 22 Project to reduce or eliminate related project impacts to Tustin's groundwater supply and production. IRWD and the City will work with Orange County Water District (OCWD) to establish baseline operating conditions for the project, including historical IRWD pumping from the area. OCWD will then model the historic conditions and determine water levels assuming baseline production from City of Tustin's and IRWD's wells under various overdraft conditions. The modeling will incorporate historic production from Wells 21 and 22 (formerly Frances Mutual Wells 17 and 18) in the baseline. The City of Tustin and IRWD will then develop mitigation measures with the help of an independent third-party consultant. The work of the consultant will be managed by OCWD staff in conjunction with the City of Tustin and IRWD. The consultant will review the modeling conducted by OCWD and determine the incremental impacts to Tustin's existing wells attributable to the Wells 21 and 22 Project. Based upon the impacts identified, the consultant will identify mitigation measures to address impacts to any affected City of Tustin wells. OCWD, the City of Tustin and IRWD propose to form a Joint Groundwater Engineering and Management Committee (Joint Committee) made up of representatives from each agency. The purpose of the Joint Committee is to facilitate communication between IRWD and the City of Tustin, and aid in the administration of the Cooperative Agreement. Staff from OCWD, namely the General Manager and Chief Hydrogeologist, were included in the process to develop the Cooperative Agreement with IRWD and has agreed to participate in the tasks described above. Approved for Forwarding By: ~~~~~ G G .Stack, P.E. David C. Biggs, City Manager of Public Works/City Engineer Attachment (s): Tustin/IRWD Cooperative Agreement S:\City Council Items\2011 Council ItemsWpprove IRWD cooperative agreement well 21 & 22.docx AGREEMENT BETWEEN CITY OF TUSTIN AND IRVINE RANCH WATER DISTRICT FOR COOPERATIVE IMPLEMENTATION OF IRWD WELL 21 & 22 GROUNDWATER TREATMENT PROJECT THIS AGREEMENT ("Agreement"), dated this day of , 2011 ("Effective Date"), is made and entered into by and between the CITY OF TUSTIN, a municipal corporation ("CITY") and IRVINE RANCH WATER DISTRICT, a California water district formed under and existing pursuant to Section 34000 et seq. of the California Water Code ("IRWD"), each sometimes individually referred to as a "Party" and together as "Parties." RECITALS: WHEREAS, IRWD constructed its wells IRWD-21 and IRWD-22 in 1992, on the sites of the former wells 17 and 18, which were operated by Frances Mutual Water Company ("FMWC") until they were acquired by IRWD as part of the FMWC assets when IRWD acquired FMWC in 1970, and thereafter were operated by IRWD until 1985; and WHEREAS, as a result of the high cost of treatment of elevated nitrate and total dissolved solids (TDS) in the water produced by IRWD-21 and IRWD-22, IRWD did not put them into production. In 2008-09, IRWD rehabilitated and retested the wells and determined that the water produced remained unsuitable for potable uses without treatment; and WHEREAS, IRWD has obtained federal grant funding for designing and constructing groundwater production, conveyance and treatment facilities incorporating IRWD-21 and IRWD-22, for the beneficial use of the impaired groundwater as a domestic water supply to improve reliability for IRWD customers (the ``Wells 21 & 22 Project" or "Project"). The federal grant requirements specify that the majority of funding must be obligated by September 30, 201 I ;and WHEREAS, CITY has identified concerns relating to the potential for the increased production from the Wells 21 & 22 Project to result in increased drawdown and resultant production losses and/or constraints upon the production capability of CITY's existing domestic water wells; and WHEREAS, while not intending to displace the objective of engineering the Wells 21 & 22 Project to limit the operational impacts of the resultant increased production on CITY's ongoing groundwater supply program, the Parties desire to enter into this Agreement in order to provide a framework and methodology for cooperation between the Parties in the quantification and adaptive management of such impacts; NOW, THEREFORE, in consideration of the promises and covenants herein contained, the Parties agree as follows: 746656.2 AGREEMENT: Section 1. General. 1.1 Implementation. The Parties agree to cooperatively implement the approach set forth in this Agreement for the quantification and adaptive management of impacts to CITY's existing production wells. L2 Orange County Water District. Although it is acknowledged that the Orange County Water District ("OCWD") is not a party to this Agreement, the Parties have agreed to enlist OCWD's assistance and cooperation, and OCWD has indicated its willingness to support the Parties' activities as described herein in accordance with and subject to its statutory role as the manager of the Orange County Groundwater Basin. Wherever there is a reference to OCWD activities herein, it is intended to be construed as including an agreement of the Parties to request such OCWD involvement. Section 2. Establishment of Baseline Operating Conditions. 2.1 Modelingput. The Parties agree to determine, in consultation with OCWD, a production and water level baseline condition ("Baseline Condition") for modeling purposes. The Baseline Condition will be derived from the following information: 2.1.1 Existing production by CITY from CITY's wells existing in its service area on the Effective Date including those that produce water treated by CITY treatment facilities ("CITY Existing Wells"); 2.1.2 Assumed active production from FMWG17 and FMWG18 at the combined annual amount of 1,500 acre feet ("AFY"); 2.1.3 Water levels (without the Project) in the vicinity of CITY Existing Wells; and 2.1.4 Overdraft conditions in the Orange County groundwater basin as recommended by the OCWD Chief Hydrologist on the Effective Date. 2.2 Modeling of Baseline Condition. The Parties will request that OCWD model the Baseline Condition production from CITY Existing Wells under various overdraft conditions. Section 3. Quantification of Impacts. 3.1 Modeling of Pro~ec~ t Impacts. The Parties will request that OCWD use the Baseline Condition and an assumed Project production of 7,100 AFY (4,500 gpm combined production rate) to model awith-Project condition that determines the water levels in the CITY Existing Wells (the "With-Project Condition") and any net adverse difference in such levels between the Baseline Condition and the With-Project Condition directly attributable to the Wells 21 & 22 Project ("Impacts"). 3.2 Overdraft Conditions. As part of the modeling requested pursuant to Paragraph 2 746656.2 3.1, the Parties will also request that OCWD determine the Impacts under overdraft conditions corresponding to the overdraft conditions used for modeling the Baseline Condition pursuant to Paragraph 2.2. 3.3 Non-Project Related Factors. The determination of Impacts will isolate the effects of other factors that may adversely affect the capacity of the CITY Existing Wells, including maintenance status and well capacity deterioration due to aging factors such as corrosion, plugging and sanding. 3.4 Retention of Consultant. IRWD will retain, at its sole expense, an independent third-party registered engineer and hydrogeologist, who shall be mutually acceptable to CITY, IRWD and OCWD (the "Consultant"), to perform an analysis of the Impacts and provide recommendations as to adaptive management measures to reduce or eliminate the Impacts. The Consultant's scope of work is attached hereto as Exhibit A and incorporated herein by this reference. The Parties will request that OCWD, in consultation with the Parties, manage and direct the Consultant's work. The Consultant will: 3.4.1 Develop information to assess, determine and quantify the non-Project related factors described in Paragraph 3.3 in order to isolate the effects of such factors from the effects of the Project; 3.4.2 Review the modeling performed by OCWD as specified in Paragraphs 2.2, 3.1 and 3.2, the information specified in Paragraph 3.4.1 and such other information as determined to be pertinent by Consultant in Consultant's professional judgment; and 3.4.3 Determine the Impacts to CITY Existing Wells and provide a written technical memorandum on such determination to the Parties and OCWD. Section 4. Adaptive Management Measures. 4.1 Primary Measures. In the event sustained Impacts are determined by the Consultant to result in a loss of water production capacity in CITY Existing Wells, the Parties shall mutually determine to implement one or a combination of adaptive management measures that may include, but will not be limited to, the following: 4.1.1 Compensation by IRWD of CITY's increased electrical costs resulting from the Impacts, as determined by the Committee (defined below) using theoretical drawdown, power costs and plant efficiency; 4.1.2 Physical modifications to CITY Existing Wells, such as lowering of pump bowls or other modifications to offset Impacts to their production capacity; and 4.1.3 Financial participation by IRWD to incorporate in CITY Existing Well replacement projects design features that offset Impacts to their production capacity. 3 746656.2 The specific selection, procedures and methodology for implementation of the adaptive management measures shall be as determined from time to time by the Committee (defined below). 4.2 Replacement Water Measure. In the event that there are sustained Impacts for which the primary adaptive management measures cannot be reasonably implemented in a cost- effective manner pursuant to Paragraph 4.1, IRWD will, in consultation with CITY, provide water to CITY from the Wells 21 & 22 Project or other sources as determined by IRWD, in an amount equivalent to the increment of water that would have been produced from the CITY Existing Wells but for the loss of production capacity determined to have been sustained due to the Impacts (the "Replacement Water"). IRWD shall bear responsibility for the following costs of the Replacement Water: 4.2.1 The cost of the Replacement Water production and transmission thereof to CITY's distribution system, net of the cost equivalent to CITY's production and transmission costs that would have been incurred by CITY to produce the water from the CITY Existing Wells but for the loss of production capacity due to the Impacts; and 42.2 The cost to construct interconnection capacity between IRWD's and CITY's systems, as necessary to enable IRWD to deliver the Replacement Water to CITY in a comparable pressure zone and at delivery point(s) mutually determined by the Parties. 4.2.3 The City BEA and BPP shall not be negatively impacted by the utilization of Replacement Water Section 5. Capacity Acquisition Option. 5.1 Option Granted. As a matter separate and apart from the adaptive management measures provided for in Section 4, CITY shall have an option, exercisable from the Effective Date and expiring on the fifth (St") year anniversary of the Effective Date, to purchase up to 1,000 AFY of capacity on a pro-rata basis in the Wells 21 & 22 Project. If the option is timely exercised by the CITY, the right to purchase the capacity on the terms set forth herein shall be a perpetual right which shall not expire on the fifth year anniversary of the Effective Date. 5.2 Manner of Exercise. CITY shall give IRWD one hundred eighty (180) days' written notice of its exercise of the option. During such one hundred eighty (180) day period, the Parties shall enter into an operating agreement, as described in Paragraph 5.3.3. 5.3 Terms of Exercise. The option shall be subject to the following terms: 5.3.1 The option price, if the option is exercised, shall be (i) the proportional share, equal to the exercised capacity amount divided by the total operating capacity of the Wells 21 & 22 Project, of the cost of wells, treatment facilities, real property and raw water conveyance pipelines, plus (ii) the applicable proportional amount of cost, on the basis of the respective shares of capacity, in the treated water 4 746656.2 conveyance facilities required to deliver the water from the treatment plant to CITY's distribution system, minus (iii) any grant funding utilized to offset the total cost of the Project. 5.3.2 IRWD has prepared and adopted a mitigated negative declaration for the Project pursuant to the California Environmental Quality Act ("CEQA"). CITY shall be responsible for any CEQA compliance that is necessary for its exercise of the option; 5.3.3 The Parties shall enter into an operating agreement, including provisions for proportional allocation of operation and maintenance and replacement costs for the exercised amount of the option capacity. If the Parties fail to agree to the terms of an operating agreement, CITY may revoke its notice of exercise of the option; 5.3.4 Water delivered to CITY shall be included in CITY's basin production percentage calculated by OCWD; 5.3.5 Amended basin equity assessment agreements shall be entered into between IRWD and OCWD and between CITY and OCWD, to exclude the exercised option capacity from IRWD's exempt production amount and add it to CITY's exempt production amount; and 5.3.6 CITY shall own an undivided ownership interest in its exercised amount of the production capacity of the Wells 21 & 22 Project. IRWD shall remain the sole owner and operator of the lands, rights-of--way and facilities comprising the Wells 21 & 22 Project. Section 6. Joint Management and Review Committee. 6.1 Composition. A Joint Management and Review Committee (``Committee") shall be appointed, consisting of one representative selected by each Party and one representative selected by OCWD. The OCWD representative shall be a nonvoting, advisory member of the Project Committee. Each Party and OCWD shall also select an alternate representative to serve in the absence of its Project Committee representative. 6.2 Tasks. The primary purpose of the Committee shall be to facilitate communication among the Parties and OCWD and aid in the administration of this Agreement. The Parties shall give full consideration to all recommendations of the Committee. The Committee shall meet periodically as needed, but at least once a year, to perform the following tasks as may be assigned to it from time to time by the Parties: 6.2.1 Update the quantification of Impacts and other local groundwater production changes, if and to the extent determined by the Committee to be necessary; 6.2.2 Determine specific selection, procedures and methodology for implementation of the adaptive management measures pursuant to Section 4; 5 746656.2 6.2.3 Review the effect of the adaptive management measures implemented pursuant to Section 4; 6.2.4 Suggest additional or improved adaptive management measures if necessary; 6.2.5 Select third-party experts if and to the extent determined by the Committee to be necessary to assist in additional analysis of Impacts and development of adaptive management measures; 6.2.6 Resolve disagreements between the Parties regarding the implementation of this Agreement; and 6.2.7 Perform such other tasks as may be assigned to it from time to time by the Parties. Section 7. Term. 7.1 Term of this Agreement. This Agreement shall have a term of twenty (20) years from the Effective Date or as long as Wells 2I and 22 are being pumped. 7.2 Term of Operating Agreement. In the event of the exercise of the option under Section 5, the operating agreement referenced in Paragraph 5.3.3 shall make separate provisions regarding its term, provided that the right to purchase water pursuant to the terms of the option hereunder shall be perpetual. Section 8. Interpretation. This Agreement shall not be construed against the Party preparing it, but shall be construed as if all of the Parties prepared it. Section 9. Successors and Assigns; No Third Party Beneficiaries; Relationship. This Agreement shall be binding upon and shall inure to the benefit of each of the Parties, and each of their respective successors and assigns. All the covenants contained in this Agreement are for the express benefit of each of the Parties. This Agreement is not intended to benefit any third parties. This Agreement does not create, and shall not be construed or deemed to create, any agency, partnership, joint venture, landlord-tenant or other relationship between IRWD and CITY. Section 10. Severability. Should any provision of this Agreement be held invalid or illegal, such invalidity or illegality shall not invalidate the whole of this Agreement, but, rather, the Agreement shall be construed as if it did not contain the invalid or illegal part, and the rights and obligations of the 6 746656.2 Parties shall be construed and enforced accordingly. Section 11. Governing Law. This Agreement shall be construed and enforced pursuant to the laws of the State of California. Section 12. Amendments. Except as provided in this Agreement, this Agreement may be amended or supplemented only by a written agreement among the Parties. Section 13. Entire Agreement. Each Party represents, warrants and agree that no promise or agreement not expressed herein has been made to them, that this Agreement contains the entire agreement between them, that this Agreement supersedes any and all prior agreements or understandings between them unless otherwise provided herein, and that in executing this Agreement, each is relying solely on its own judgment and knowledge and is not relying on any statement or representation made by the other Party or its representatives concerning the subject matter, basis or effect of this Agreement other than as set forth herein. Section 14. Notices. All notices that may or are required to be given pursuant to this Agreement shall be deemed sufficiently given if in writing and if either served personally upon the recipient or mailed by certified or registered mail to: If to CITY: City of Tustin 300 Centennial Way Tustin, CA 92780 Attn: City Manager If to IRWD: Irvine Ranch Water District 15600 Sand Canyon Ave. P.O. Box 57000 Irvine, CA 92619-7000 Attn: General Manager 7 746656.2 IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first hereinabove written. APPROVED AS TO FORM: By City Attorney APPROVED AS TO FORM: By General Counsel CITY OF TUSTIN By Attest: By Mayor Jerry Amante Clerk IRVINE RANCH WATER DISTRICT By General Manager By Secretary 8 7466562 EXHIBIT A Scope of work Wells 21 & 22 Groundwater Treatment Project Impact Analysis and Mitigation Plan -Consultant Services January 2011 1) Review and Analysis of Current Operating Conditions: a. The Consultant shall review current operating conditions and data for Tustin's production wells. This review will be developed considering: i. Historic production by the City of Tustin from currently existing wells; ii. Historic production levels in Wells 21 & 22 when being actively produced by IRWD; iii. Water levels in the area of Tustin's wells and Wells 21 & 22, particularly as they compare to historical conditions of varying basin accumulated overdraft; and iv. Well construction and operational data, including well age, diameter, screen depth, pump/motor specifications, pump setting, operational flow rate range, specific capacity, static and pumping water levels, maintenance status (including historical rehabilitation events and results) and well capacity deterioration due to aging (corrosion, plugging, sanding, etc.). 2) The Consultant shall review and validate the OCWD modeling results of the estimated drawdown associated with the proposed production from Wells 21 and 22. 3) Analysis and Determination of Impacts Associated with the Project: a. Based on the results of the basin modeling performed by OCWD, indicating water level declines at Tustin's wells, the Consultant will determine the drawdown impacts to Tustin's wells directly attributable to the Wells 21 & 22 Treatment Plant Project. These impacts will include descriptions, on a well-by-well basis, of the degree to which production capacity would be affected by the Well 21 & 22 Project. Per-well impacts would include, but not be limited to, additional energy usage and quantification of loss of production on an instantaneous (e.g., gallons per minute) and annual (e.g., acre-feet per year) basis. The Consultant will provide four (4) copies each of the draft technical memorandum on drawdown impacts to Tustin, IRWD and OCWD. b. Each agency will review and provide comments on the draft technical memorandum, which comments will be incorporated into a final technical memorandum by the Consultant. The Consultant will provide ten (10) copies each of the final technical memorandum to Tustin, IRWD and OCWD. Page ~2 4) Analysis and Determination of Mitigation Measures: a. Based upon the impacts identified and documented in the final technical memorandum, the consultant shall identify and evaluate potential mitigation measures to address impacts to each affected Tustin well. These mitigation measures may include, but not be limited to, the following alternatives: i. Compensation for increased electrical costs associated with pumping using model-estimated dawdown, power cost and plant efficiency; ii. Physical modifications to Tustin's wells, such as lowering pump bowls or other modifications to maintain the well(s) in service; iii. Physical modifications to increase flows at Tustin's wells (where feasible) to offset loss of flows at other wells where modifications may not be feasible; iv. Construction of replacement well(s) to offset estimated loss of production from Tustin's wells; and v. Substitution of an alternative water source such as the Wells 21 & 22 Project. b. The Consultant will work with Tustin, IRWD and OCWD to determine the most cost-effective combination of mitigation measures to be implemented by IRWD that result in no increase in water supply cost to Tustin. c. The Consultant shall prepare a draft Drawdown Mitigation Report detailing the proposed mitigation measures, ranking them for cost effectiveness, and estimating their cost of implementation. The Consultant shall recommend which mitigation measures to implement. The Consultant will provide four (4) copies each of the draft Drawdown Mitigation Report to Tustin, IRWD and OCWD. d. Each agency will review and provide comments on the draft Drawdown Mitigation Report, which comments will be incorporated into a final Drawdown Mitigation Report by the Consultant. The Consultant will provide ten (10) copies each of the final Drawdown Mitigation Report to Tustin, IRWD and OCWD.