HomeMy WebLinkAbout05 APPROVE AMENDMENT NO. 1 TO THE AGREEMENT TO FUND THE PETERS CANYON WALSH CHANNEL CAPTURE AND REUSE PIPELINE• Agenda Item 5
AGENDA REPORT Reviewed
City Manager
Finance Director \ N/A
MEETING DATE: JANUARY 20, 2015
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS /CITY ENGINEER
SUBJECT: APPROVE THE AMENDMENT NO. 1 TO THE AGREEMENT WITH THE CITY
OF IRVINE, IRVINE RANCH WATER DISTRICT, COUNTY OF ORANGE,
ORANGE COUNTY FLOOD CONTROL DISTRICT, AND THE CALIFORNIA
DEPARTMENT OF TRANSPORTATION TO FUND THE PETERS CANYON
WASH CHANNEL WATER CAPTURE AND REUSE PIPELINE
SUMMARY
The cooperative agreement between the County of Orange, the Orange County Flood Control
District (OCFCD), the Irvine Ranch Water District (IRWD), California Department of Transportation
(Caltrans), and the Cities of Irvine and Tustin was approved on November 19, 2013. The
agreement provides for joint funding for the construction of the Peters Canyon Wash Channel
Water Capture and Reuse Pipeline (PCW Pipeline Project). The construction of the pipeline will
enable the City of Tustin to continue to comply with the provisions of the Selenium Total Maximum
Daily Load (TMDL) and the Time Schedule Order No. R8- 2009 -0069, as adopted by the United
States Environmental Protection Agency and the Santa Ana Regional Water Quality Control Board.
Amendment No. 1 will provide a supplemental payment to IRWD to complete Phase 1 of the
project. In addition, the amendment will provide a more flexible schedule for bidding the project
and allow IRWD to advertise a contract for construction upon unanimous approval of all parties.
RECOMMENDATION
It is recommended that the City Council approve the first amendment to the Peters Canyon Wash
Channel Water Capture and Reuse Pipeline Funding Agreement, and authorize the Mayor and City
Clerk to execute the document on behalf of the City.
FISCAL IMPACT
The Agreement divided the estimated project costs into two phases. The cost for Phase 1 was a
concept level estimate of $1,000,000 to fund the development of environmental documents and
engineering design. The City of Tustin's original portion of the cost for Phase 1 was $181,518,
which was funded through MCAS Backbone Fees (Fund 187). A refined cost estimate was
developed during the execution of the environmental and design activities and the total cost has
increased to $1,522,000, which includes a 20% contingency. The City of Tustin's portion has now
increased by $95,004. The adopted budget for the Peters Canyon Wash Water Capture and
Reuse Pipeline Project (CIP 50039) is $450,000 from Fund 189 (Proceeds from Land Held for
Resale). With sufficient funds available, an additional appropriation is not required.
CORRELATION TO STRATEGIC PLAN
The construction of the Peters Canyon Wash Water Capture and Reuse Pipeline contributes to the
fulfillment of the City's Strategic Plan Goal G: Strong Community and Regional Relationships.
First Amendment Peters Canyon Wash Channel Pipeline Funding Agreement
January 20, 2015
Page 2
Specifically, this project implements Strategy #2, which encourages working collaboratively with
agencies outside Tustin on issues of mutual interest and concern to the parties.
BACKGROUND
In 1998, the Santa Ana Regional Water Quality Control Board identified the Newport Bay and San
Diego Creek as impaired water bodies for selenium. As a result, the Environmental Protection
Agency adopted a Total Maximum Daily Load (TMDL) for selenium in the Newport Bay Watershed
that required the development of programs to attain reduction targets. In 2009, the Santa Ana
Regional Water Quality Control Board issued Time Schedule Order for Compliance (TSO) R8-
2009 -0069. Failure to comply with the TMDL and TSO would expose the City to potential minimum
daily fines and third party lawsuits. The Peters Canyon Wash Pipeline will enable the City to
comply with the Santa Ana Regional Board's TMDL and TSO requirements.
The City approved the funding agreement with the City of Irvine, IRWD, OCFCD, and Caltrans on
November 19, 2013. Amendment No. 1, to the agreement will revise the schedule and
prerequisites for bidding the project to allow IRWD to seek competitive bids for construction while
environmental documentation, California Environmental Quality Act (CEQA) clearance, regulatory
permits and mitigation efforts are finalized. Amendment No. 1 also authorizes IRWD to invoice the
funding partners for costs incurred while completing the environmental and design phase of the
project.
The City Attorney has reviewed and approved the amendment "as to form ". It is therefore
recommended that the City Council approve the First Amendment to the Peters Canyon Wash
Channel Water Capture and Reuse Pipeline Funding Agreement and authorize the Mayor and City
Clerk to execute the document on behalf of the City.
Stack, P.E.
Public Works /City Engineer
Attachment: Amendment No. 1 to Peters Canyon Wash Channel Water Capture and Reuse Pipeline Agreement
AMENDMENT NO. 1 to
Peters Canyon Wash Channel Water Capture and
Reuse Pipeline Project Agreement
(Including Operations and Maintenance)
City of Irvine
City of Tustin
Orange County Flood Control District
County of Orange
Irvine Ranch Water District
California Department of Transportation
This Amendment No. 1 ( "Amendment') to Peters Canyon Wash Channel Water
Capture and Reuse Pipeline Project Agreement ( "Agreement') is made as of this day of
, 2014, ( "Effective Date ") by and among Irvine Ranch Water District, a body
corporate and politic ( "IRWD "), City of Irvine, a charter city ( "Irvine "), City of Tustin, a
California municipal corporation ( "Tustin'), Orange County Flood Control District, a body
corporate and politic ( "OCFCD "), County of Orange, a political subdivision of the State of
California ( "County"), and California Department of Transportation, an agency of the State
of California ( "Caltrans "), hereinafter sometimes individually referred to as "Party" or
collectively as the "Parties." OCFCD and County are each individually Parties to this
Amendment, but are collectively referred to in this Amendment as OCFCD. Irvine, Tustin,
OCFCD, and Caltrans are providing funds to pay capital costs and are individually referred to as
a "Funding Party ", and are collectively referred to as the "Funding Parties ". OCFCD, IRWD,
Irvine, and Tustin are individually referred to as an "Excess Credit Party", and are collectively
referred to as the "Excess Credit Parties ".
RECITALS
A. The Parties entered into the Agreement as of December 12, 2013 to: (i) set forth their
respective rights and obligations with respect to financing of the Project and completion of the
Project design, at which point, subject to all necessary approvals having been obtained and
compliance with applicable state and federal laws, including CEQA and, if federal funding is
provided for the Project, subject to compliance with the NEPA, the Parties will determine
whether or not to proceed with construction and operation of the Project as provided for in this
Agreement; and (ii) to memorialize the basis for the overall Project development and financing,
including but not limited to obtaining permits from resource agencies and other government
entities, design and construction of the Project, and operation and maintenance of the Pipeline, if
the Parties determine to proceed with the Project. All capitalized terms used in this Amendment
and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
B. The Parties desire to amend the Agreement to update the Project Schedule (Exhibit
"D ") to reflect the currently anticipated Project timeline, to revise Section 4.6 to facilitate
expediting of the solicitation of bids for construction of the Project so that a reliable cost
estimate for the Project can be obtained by bidding, and to increase the funding of Phase 1 costs
at this time without changing the Estimated Project Cost.
C. The Parties already made the First Installment Payment, referenced in Exhibit 1 to
this Amendment, for the funding of Phase 1 of the Project (design, environmental /regulatory
review and approvals, and access acquisition) on or about February 18, 2014. The Parties have
now determined that a supplemental installment payment ( "Supplemental Installment'), as
reflected in Exhibit 1 attached hereto (which amends Exhibit B of the Agreement), is required
for the Parties to timely complete all required work under Phase 1 of the Project in accordance
with pertinent regulatory schedules and grant funding timelines.
AMENDMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated
herein by reference, and the mutual covenants and promises among the Parties hereinafter set
forth, the Parties agree as follows:
Section 1. Project Sequence and Funding Installments.
1.1. Amendment Pertaining to Sequence of Construction Bidding and Award. Section
4.6.1 of the Agreement is hereby amended in its entirety to read as follows:
"4.6.1 Following final approval of the Plans per Section 1.3, and in accordance with the
mutually agreed -upon Project Schedule, IRWD shall advertise a contract for construction
of the Project for formal bids per applicable sections of the California Public Contracts
Code. Notwithstanding the foregoing, the Parties mutually understand and agree that a
contract for construction of the Project may not be awarded until and unless all of the
following have occurred: the Parties have unanimously determined to move forward with
the Project (after compliance with CEQA and /or NEPA (if applicable)), certification and
approval of all necessary environmental documents, approval by all of the Parties of
associated mitigation requirements, receipt of all regulatory agency approvals, and
confirmation that the twenty percent (20 %) contingency built into the Estimated Project
Cost remains in full. The Funding Parties shall have the opportunity to review all bids.
If the lowest responsive and responsible bid would cause the Estimated Project Cost
shown in Exhibit B (which includes the 20% contingency amount) to ,be exceeded, then
the Funding Parties shall meet and confer and mutually agree by unanimous vote whether
(i) IRWD should award a contract for construction of the Project to the lowest responsive
and responsible bidder, (ii) IRWD should reject all bids and re -bid the Project, or (iii) to
terminate this Agreement."
1.2 Increase in Phase 1 Fundi= Supplemental Installment. Notwithstanding
anything to the contrary in Sections 5.2 and 5.3 of the Agreement, IRWD will invoice the
Funding Parties for their respective Project Capital Cost Contribution shares in three
installments, set forth in Exhibit B. The Funding Parties will pay their respective Project Capital
Cost Contribution shares of the Supplemental Installment as provided in this Section. The
Supplemental Installment will fund additional_ Capital Costs of Phase 1 of the Project, in the
amount of $522,000, and will be paid by Irvine, Tustin, and OCFCD /County in the amounts
identified in Exhibit 1 hereto. IRWD shall invoice Irvine, Tustin, and OCFCD /County for the
Supplemental Installment following execution of this Amendment by all of the Parties. The
provisions of the Agreement, including without limitation the provisions of Section 5.3 relating
to holding of funds, provision of statements and accrual of interest and the provisions of Section
5.5 relating to the payment of invoices, will apply to the Supplemental Installment in the same
manner as to the First Installment and the Second Installment.
1.3 Revised Exhibits. The table set forth in Exhibit 1 (Exhibit B -1) attached hereto
and incorporated herein by reference will replace the table attached as Exhibit B to the
Agreement. Any reference to Exhibit B in the Agreement is deemed to be a reference to the
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revised Exhibit B -1. The revised "Project Schedule" set forth in Exhibit 2 (Exhibit D -1) attached
hereto and incorporated herein by reference will replace the table attached as Exhibit D to the
Agreement. Any reference to Exhibit D in the Agreement is deemed to be a reference to the
revised Exhibit D -1.
Section 2. Intent of Amendment. Except as otherwise expressly provided herein, this
Amendment is not intended to affect any Party's rights or obligations under the Agreement,
including, but not limited to, the Parties' respective termination rights under Section 18 of the
Agreement. To the extent not otherwise expressly modified by this Amendment, the terns and
conditions of the Agreement shall remain in full force and effect.
Section 3. Counterparts. This Amendment may be executed in counterparts, each of
which shall be deemed to be an original and all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
Effective Date hereinabove written.
IRVINE RANCH WATER DISTRICT, a
body corporate and politic
By:_
Name:
Title:
CITY OF IRVINE, a charter city
By:
Nat
CITY OF TUSTIN, a California municipal
corporation
By:
Name:
Title:
ORANGE COUNTY FLOOD CONTROL
DISTRICT, a body corporate and politic
By:
Name:
Title:
COUNTY OF ORANGE, a political
subdivision of the state of California
By:_
Name:
CALIFORNIA DEPARTMENT OF
TRANSPORTATION, an agency of the State
of California
Name:
Title:
CERTIFIED AS TO FUNDS FOR THE
CALIFORNIA DEPARTMENT OF
TRANSPORTATION:
S
0
Neda Saber Ansari
District Budget Manager
Exhibit 1 to Amendment No. 1
17►�111:3YY1:3'il
Estimated Project Cost, Project Capital Cost Contribution, IRWD O &M Contribution, Flow -based Percentages, and Installment Payments
'Taken from the Feasibility Study.
2Project Capital Cost Contributions are not -to- exceed amounts.
.' The IRWD O &M Contribution is the estimated present value of $60,000 /year escalated annually using a 2.5% inflation rate and a 4% discount rate. The actual
IRWD O &M Contribution shall be calculated annually pursuant to Section 1.5 of this Agreement. The actual amount of IRWD's O &M Contribution calculated
under Section 1.5 of the Agreement may be different than this estimate.
° Caltrans share of the O &M Costs for the budget year shall at no instance exceed $12,000 without an amendment to this Agreement.
5 Caltrans, Irvine, Tustin, OCFCD and IRWD are all partners in the OWOW Grant.
6 Irvine, Tustin, OCFCD and IRWD are partners in the OCTA Grant. Caltrans is not eligible to benefit from the OCTA Grant.
Estimated
.
Estimated
Project Capital
First
Second
Project
Cost
IRWD O &M
Flow -based
Total Project
Installment
Supplemental Installment
Party/Grant Source
Cost'
Contribution
Contribution'
Percentage
Contribution
Payment
Installment Payment
Caltrans
$ 2,223,726
$ -
29 %'
$ 2,223,726
$ -
$ - $2,223,726
$ 294,342
Count /OCFCD
$ 973,222
$ -
32%
$ 973,222
$ 446,068
$ 232,812 52q4-54
$ 245,928
City of Irvine
$ 812,526
$ -
26%
$ 812,526
$ 372,414
$ 194,184 444,44-2
$ 119,511
City of Tustin
$ 396,033
$ -
13%
$ 396,033
$ 181,518
$ 95,004 24 ,3-K
Irvine Ranch Water District
$ -
$ 1,008,627
0
$ 1,008,627
n/a
n/a n/a
Proposition 84 Grants
$ 1,000,000
n/a
n/a
$ 1,000,000
$ -
$ - $1,000,000
Orange County Transportation
AgencyGrant6
$ 3,273,105
n/a
n/a
$3,273,105
$ -
$ - $3,273,105
$7,156,611
Total
$8,678,611
$ 8,678,611
$ 1,008,627
100
$ 9,687,238
$1,000,000
$ 522,000 76 ,
'Taken from the Feasibility Study.
2Project Capital Cost Contributions are not -to- exceed amounts.
.' The IRWD O &M Contribution is the estimated present value of $60,000 /year escalated annually using a 2.5% inflation rate and a 4% discount rate. The actual
IRWD O &M Contribution shall be calculated annually pursuant to Section 1.5 of this Agreement. The actual amount of IRWD's O &M Contribution calculated
under Section 1.5 of the Agreement may be different than this estimate.
° Caltrans share of the O &M Costs for the budget year shall at no instance exceed $12,000 without an amendment to this Agreement.
5 Caltrans, Irvine, Tustin, OCFCD and IRWD are all partners in the OWOW Grant.
6 Irvine, Tustin, OCFCD and IRWD are partners in the OCTA Grant. Caltrans is not eligible to benefit from the OCTA Grant.
Exhibit 2 to Amendment No. 1
18/4 oil.] 01111151
Anticipated Schedule for Project Work
Task
Date
Award of Project Design Contract
January 2014
Phase 1 - Completion of design
January 2015
Phase 1— Advertise Project
February 2015
Phase 1— Approval of CEQA and
Award Construction Contract
June 2015
Phase 2 - Construction of Project
July 2015- November 2016
Operations and Maintenance
December 2016 -June 2036