HomeMy WebLinkAbout08 2014 DROUGHT SOLICITATION IMPLEMENTATION GRANT FUNDING CONTRACT StY0
'HZ" � AGENDA REPORT Re�ede'dm
e' City Manager
GST1
Finance DirectorN/A
MEETING DATE: OCTOBER 20, 2015
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
SUBJECT: 2014 DROUGHT SOLICITATION IMPLEMENTATION GRANT FUNDING
CONTRACT
SUMMARY
This Proposition 84 Integrated Regional Water Management Program (IRWMP) 2014 Drought
Solicitation Implementation Grant Funding Contract is made between Santa Ana Watershed
Project Authority (SAWPA) and the City of Tustin. On July 20, 2015, the California Department
of Water Resources (DWR) and SAWPA entered into a Proposition 84 Integrated Regional
Water Management Implementation Grant Agreement providing that SAWPA would serve as
the program manager for IRWMP grant funds to be disbursed to sub-grantees considering and
participating in investigation and possible implementation of a conservation-based water rate
structure.
RECOMMENDATION
It is recommend that the City Council approve the attached Proposition 84 Integrated Regional
Water Management Program 2014 Drought Solicitation Implementation Grant Funding Contract
between the Santa Ana Watershed Project Authority and the City of Tustin, and authorize the
City Manager to execute the Contract on behalf of the City, subject to City Attorney review and
approve as to form.
FISCAL IMPACT
The estimated total reasonable and eligible cost subject to grant approval is up to $215,030.00.
Funding would be provided on a reimbursement basis of the City's expenses. There are no
matching funds required.
CORRELATION TO THE STRATEGIC PLAN
This item contributes to the fulfillment of the City's Strategic Plan Goal G: Strong Community
and Regional Relationships. Specifically, by implementing Strategy 2, which encourages
working collaboratively with agencies outside Tustin on issues of mutual interest and concern to
the parties.
DISCUSSION AND BACKGROUND
The City will soon be studying new water rates in compliance with Proposition 218 of which an
option to study will be a conservation-based rate structure. The Santa Ana Watershed Project
Authority (SAWPA) has applied for and received grant funding through the Department of Water
Resources (DWR) to be disbursed to sub-grantees participating in the consideration and
implantation of a conservation-based rate, consistent with Proposition 84 Integrated Regional
Water Management Program. The City of Tustin will participate in investigation and possible
implementation of a conservation-based water rate structure, subject to full compliance with the
2014 Drought Solicitation Implementation Grant Funding
October 20, 2015
Page 2
provisions of Proposition 218 for the cost of service. The City will embark upon this new five
year water rate study in the coming months.
SAWPA adopted a policy statement that defined adoption of conservation-based water rate
structures as an agency transitioning from a flat or tiered rate structure to a customer-specific
allocation that follows an increasing block rate structure that includes at least three blocks, with
one or more blocks accounting for high or exceeding water use, based on State efficiency
standards or more stringent efficiency standards.
By entering into this contract with SAWPA, the City preserves its opportunity for reimbursement
for all eligible costs should the City ultimately approve, adopt and implement a conservation-
based rate structure subject to Proposition 218. There are no matching funds required. The
estimated total reasonable and eligible cost provided by this agreement is up to $215,030.00.
SAWPA approved this agreement on September 24, 2015.
rou• . Stack, P.E.
Dir: to .f Public Works/City Engineer
Attachment: IRWMP 2014 Drought Solicitation Implementation Grant Funding Contract
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ATTACHMENT 1
PROPOSITION 84 INTEGRATED REGIONAL WATER MANAGEMENT PROGRAM 2014
DROUGHT SOLICITATION IMPLEMENTATION GRANT FUNDING CONTRACT
BETWEEN THE
SANTA ANA WATERSHED PROJECT AUTHORITY
AND
CITY OF TUSTIN
This Proposition 84 Integrated Regional Water Management Program ("IRWMP") 2014 Drought
Solicitation Implementation Grant Funding Contract("Contract") is made between Santa Ana Watershed
Project Authority, acting through the Project Agreement 22 Committee ("SAWPA"), and City of Tustin
(the "Sub-Grantee"). SAWPA and the Sub-Grantee may be individually referred to as "Party", and
collectively referred to as the "Parties".
WHEREAS, on July 20, 2015,the California Department of Water Resources ("DWR")and SAWPA
entered into a Proposition 84 Integrated Regional Water Management Implementation Grant Agreement
("Grant Agreement") providing that SAWPA would serve as the program manager for the$12,860,110 in
IRWMP grant funds to be disbursed to sub-grantees, consistent with IRWMP requirements, and ensuring
that the maximum benefit of such funds are realized in the Santa Ana River and the Upper Santa
Margarita Watersheds; and
WHEREAS,the Sub-Grantee is participating in the Implementation of Conservation Based Rate
Structures Project("Project"); and
WHEREAS, at the time of the request, SAWPA adopted a policy statement that defined adoption of
conservation-based water rate structures as an agency transitioning from a flat or tiered rate structure to a
customer-specific allocation that follows an increasing block rate structure that includes at least three
blocks, with one or more blocks accounting for high or exceeding water use, based on State efficiency
standards or more stringent efficiency standards. The policy statement specified that the customer class
for which the rate applies shall comprise at least 50 percent of the agency's potable water demand.
THEREFORE, based on the foregoing incorporated recitals and in consideration of the mutual covenants
and conditions set forth in this Contract, the Parties hereby agree to the following:
SECTION 1. PROJECT DESCRIPTION
The Sub-Grantee participates in investigation and possible implementation of conservation-based water
rates structure. The Sub-Grantee will receive IRWMP grant funds in two phases.
Phase 1
This phase will occur after invoicing is completed for work needed to prepare an agency to possibly
implement and prepare a governing board to possibly adopt a conservation-based water rate structure
("Phase 1").
Phase 2
This phase will occur after invoicing of the Sub-Grantee's costs for implementation of a conservation-
based water rate structure after adoption by the Sub-Grantee's elected governing board("Phase 2"). If
adopted,the Sub-Grantee will maintain its conservation-based water rate structure in accordance with the
policy statement for three years after the date of adoption of a conservation-based water rate structure by
the Sub-Grantee's elected governing board.
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SECTION 2. CONTRACT DOCUMENTS; ORDER OF PRECEDENCE; SUB-GRANTEE
GENERAL COMMITMENT
This Contract incorporates and includes as part of its terms and conditions the Grant Agreement between
DWR and SAWPA, Agreement No. 4600010903, attached hereto as Attachment"A".
In the event of any inconsistency between this Contract and the Grant Agreement, except as otherwise
specifically provided, the inconsistency shall be resolved by giving precedence to the Grant Agreement.
The Sub-Grantee shall comply with all terms, provisions, conditions, and commitments of this Contract
and the Grant Agreement(as the Grant Agreement pertains to the Grantee). Such compliance shall
include providing SAWPA with all deliverables, budget detail, reports and all other documents required
by the Grant Agreement(as the Grant Agreement pertains to the Grantee).
On behalf of and for the benefit of SAWPA, Sub-Grantee shall comply with all of the obligations and
requirements of the Grant Agreement as if the Sub-Grantee were the "Grantee" under the terms of the
Grant Agreement(as the Grant Agreement pertains to the Grantee). Such compliance shall be to the
extent reasonably necessary and as may be reasonably required by SAWPA in order to enable SAWPA to
comply with the Grant Agreement as "Grantee."
SECTION 3. ESTIMATED ELIGIBLE COSTS; PHASE I AND 2 ALLOCATIONS; GRANT
AMOUNT
The estimated total reasonable and eligible cost of Phase 1 and Phase 2 at the time of SAWPA and
DWR's approval of the Grant Agreement is up to $215,030.00. Funding will be provided on a
reimbursement basis of the Sub-Grantee's expenses. There are no matching funds required although only
eligible costs are covered as described in this Section. The amount of eligible costs for reimbursement by
IRWMP grant funds for Phase I is up to $107,515.00. The amount of eligible costs for reimbursement for
Phase 2 is up to $107,515.00 although any portion of Phase l's allocation not utilized by the Sub-Grantee
is also eligible for reimbursement for the second phase. The Sub-Grantee is eligible for Phase 2's
allocation once it provides SAWPA with a resolution of adoption of conservation-based water rates
structures by the Sub-Grantee's elected governing board. In addition, to be eligible to receive IRWMP
grant funds for Phase 2, the Sub-Grantee shall provide updated customer water use data for a period of
time that SAWPA will specify before conservation-based water rates were adopted in order to establish a
water usage baseline by customer class. For the reporting required described in Section 12 and 14 of this
Contract, the Sub-Grantee shall report on water savings by customer class in order to provide an effective
comparison to the established baseline.
' Subject to all of the terms, provisions, and conditions of this Contract, and subject to the availability of
the grant funds, SAWPA shall disburse such grant funds in an amount not to exceed the Sub-Grantee's
estimated reasonable costs. However, SAWPA's actual grant disbursements to the Sub-Grantee under
this Contract shall not exceed payments received from DWR.
After Phase 2, if the Sub-Grantee fails or refuses to maintain its conservation-based water rates structure
for three(3) years after adoption, SAWPA shall consider such failure or refusal to be a material violation
and breach of this Contract. SAWPA's sole right and remedy for violation of this section is to require
any monies received by Sub-Grantee from SAWPA for Phase 2 to be returned with interest calculated at
the State of California general obligation bond interest rate in effect at the time of the breach. Sub-
Grantee will not be in violation of this section for failure to maintain the conservation-based rates due to
the establishment or change of law or ruling on the part of a court which provides that conservation-
based water rates are not allowed by law.
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If actual costs exceed the estimated reasonable cost, SAWPA shall have no obligation to provide grant
funds for such exceedance.
Eligible project costs include the reasonable costs of a water rates consultant, a rate design study, aerial
imagery and global information system data, legal review, consultant fees for training board members,
temporary customer service during the initial implementation of the work, Proposition 218 notices, bill
design and shadowing and initial equipment needed during the implementation of the conservation based
water rate structure.
Costs not eligible for reimbursement or eligible to be counted as local match include, but are not limited
to:
• Costs incurred before the dates specified below.
• Operation and maintenance costs, including post monitoring costs.
• Purchase of equipment that is not an integral part of the project.
• Establishing a reserve fund.
• Purchase of water supply.
• Replacement of existing funding sources for on-going programs.
• Monitoring and assessment costs for efforts required after project construction is complete.
• Support of existing agency requirements and/or mandates in response to negligent behavior.
• Purchase of land in excess of the minimum required acreage necessary to operate as an integral
part of a project.
• Payment of principal or interest of existing indebtedness or any interest payments unless the debt
is incurred after execution of this Grant Agreement.
• Overhead not directly related to project costs.
• Travel and per diem costs.
Work performed after January 1, 2010, is eligible to be counted as local match. Work performed on or
after January 17, 2014, is eligible for reimbursement.
SECTION 4. DISBURSEMENT
IRWMP grant funds will be disbursed in accordance with the disbursement provisions of the Grant
Agreement. Disbursement will follow the invoicing received by SAWPA and transmitted to DWR in
accordance with Section 10 and the allocations in accordance with Section 1.
SECTION 5. FISCAL MANAGEMENT SYSTEMS AND ACCOUNTING STANDARDS
The Sub-Grantee agrees that, at a minimum, its fiscal control and accounting procedures shall be
sufficient to permit tracking of grant funds to a level of expenditure adequate to establish that such funds
have not been used in violation of State law or this Contract. The Sub-Grantee shall maintain separate
Project accounts in accordance with generally accepted government accounting standards and the
conditions outlined in Exhibit D.
SECTION 6. TERM
This Contract shall not be effective until it has been executed by the Parties. The Term of this Contract
shall be the same as the Term of the Grant Agreement, unless sooner terminated pursuant to the
provisions of this Contract or the Grant Agreement. Notwithstanding the foregoing, the obligations of
this Contract and the Grant Agreement shall continue through the life of the Grant Agreement.
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SECTION 7. COVENANT TO MAINTAIN RATE STRUCTURE PROGRAM
Under Phase 2, the Sub-Grantee shall maintain and implement its conservation-based water rates structure
for three(3)years following adoption, provided that Sub-Grantee may change its rates during such three(3)
year period provided that the changed rates are conservation-based rates. The Parties understand and agree
that this covenant shall survive the expiration or termination of this Contract. The Parties agree that
reporting on the benefits of the rate structure implementation is required until June 30,2028.
SECTION 8. COMPLIANCE WITH GRANT REQUIREMENTS, LAWS AND REGULATIONS
Before IRWMP grant funds are provided for the adoption of conservation-based water rates, the Sub-
Grantee shall:
(I) Provide SAWPA with documentation showing the adoption of the Santa Ana Funding Area's
IRWM Plan, the One Water One Watershed 2.0 Plan which is available on SAWPA's website.
(2) Provide documentation from DWR that verifies the supplier's 2010 Urban Water Management
Plan (UWMP)addresses the requirements of the California Water Code(CWC).
(3) Self-certify their compliance with the requirements contained in AB 1420.
(4) Self-certify their compliance with the water metering requirements contained in CWC Section
525 et. seq.
(5) If applicable, provide their surface water diversion reports surface water diversion reports in
compliance with requirements outlined in Part 5.1 (commencing with Section 5100) of Division
2 of the CWC.
The Sub-Grantee agrees that it shall, at all times, comply with and require its consultants, contractors and
subcontractors to comply with all applicable federal and state laws, rules, regulations and guidelines as
described in the Grant Agreement, including Exhibit D. To maintain eligibility, the Sub-Grantee, as an
urban water supplier, must meet the following ongoing requirements to receive IRMWP grant funds:
Maintain compliance with the Urban Water Management Planning Act and Sustainable Water Use and
Demand Reduction, Part 2.55 of Division 6. By June 28, 2016, submit documentation to SAWPA that
demonstrates the Sub-Grantee is meeting the 2015 interim gallons per capita per day(GPCD)target. If
not meeting the interim target, also include a schedule, financing plan, and budget for achieving the
GPCD. Subsequently, if not meeting the 2015 GPCD target, submit annual reports that include a
schedule, financing plan, and budget for achieving the GPCD every year by June 28, starting in 2017.
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SECTION 9. WITHHOLDING OF GRANT DISBURSEMENTS
SAWPA may withhold all or any portion of the grant funds provided for by this Contract in the event
that:
(1) The Sub-Grantee has violated any term, provision, condition, or commitment of this
Contract;
(2) The Sub-Grantee fails to maintain its conservation-based water rates structure per
Section 3 of this Contract; or
(3) DWR directs SAWPA to withhold any such grant funds.
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SECTION 10. INVOICING
(A) Invoices shall be completed on a State-provided invoice form and shall meet the following
format requirements:
(I) Invoices must contain the date of the invoice, the time period covered by the invoice, and
the total amount due.
(2) Invoices must be itemized. Refer to Attachment C.
(3) Sufficient evidence of funding documentation must be provided for all costs included in
the invoice.
(4) Each invoice shall clearly delineate those costs claimed for reimbursement from the
State's grant.
(B) Invoices also shall include the following information:
(I) Appropriate receipts and reports for all costs incurred.
SECTION 11. RECORDS AND REPORTS
(A) Without limitation on the requirement that the work be maintained in accordance with generally
accepted government accounting standards, the Sub-Grantee shall comply with the records and reporting
requirements imposed by the Grant Agreement, and shall also:
(1) Establish an official Project file that documents all significant actions relative to the
Project;
(2) Establish an accounting system that adequately and accurately itemizes and describes
final total costs of the work;
(3) Establish such accounts and maintain such records as may be necessary for the State,
DWR and SAWPA to fulfill federal reporting requirements, including any and all
reporting requirements under federal tax statutes or regulations; and
(B) The Sub-Grantee shall maintain its books, records and other material concerning the work in
accordance with generally accepted government accounting standards and as required by the
Grant Agreement.
(C) The Sub-Grantee agrees to expeditiously provide, during implementation phase and for three(3)
years after the termination of the Grant Agreement, such reports,data, information and
certifications as may be reasonably required by SAWPA or DWR. Such documents and
information shall be provided in electronic format.
SECTION 12. QUARTERLY PROGRESS REPORTS
Quarterly Progress Reports shall be completed using the templates provided as shown in Attachment B.
Quarterly Progress Reports shall provide a brief description of the work performed, activities, milestones
achieved,any accomplishments as well as any problems encountered in the performance of the work. The
first quarterly report shall cover the period between August 1,2015, and October 31, 2015,and be submitted
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no later than November 15, 2015, to SAWPA, with future reports due in successive 3-month increments.
Future quarterly reports shall cover the periods February-April (due May 15), May-July(due August 15),
August-October(due November 15),and November-January(due February 15). Quarterly Progress Reports
are required until the Project Closeout Documentation is received and submitted to the State.
SECTION 13. PROJECT REVIEW AND EVALUATION; FINAL REPORTS AND AUDIT
(A) SAWPA may perform a project review or otherwise evaluate the project to determine compliance
with the contract documents at any time or if questions about the proper use or management of the
funds arise. SAWPA may review or evaluate the contractor or vendor for compliance with the
terms and conditions of the contract document. The work review and evaluation may be performed
by SAWPA or may be contracted to a responsible third party. Any findings and recommendations
of the work review and evaluation shall be addressed by the Sub-Grantee within sixty(60)days of
the date such findings and recommendations are provided to the Sub-Grantee and before the next
invoice is paid by SAWPA.
(B) SAWPA may call for an audit of financial information relative to the work at any time during the
term of this Contract and for three years after project completion or final payment, whichever is
later,where SAWPA determines that an audit is desirable to assure program integrity or where
such an audit becomes necessary because of federal or state requirements. Where such an audit is
called for,the audit shall be performed by a Certified Public Accountant independent of the Sub-
Grantee and at the cost of the Sub-Grantee. The audit shall be in the form required by SAWPA.
SECTION 14. POST-PERFORMANCE REPORTS
Post-Performance Reports shall be submitted to SAWPA within seventy-five(75) calendar days after the
first operational year of a project has elapsed. This record keeping and reporting process shall be
repeated annually until June 30, 2028.
SECTION 15. TERMINATION; IMMEDIATE REPAYMENT; INTEREST
(A) SAWPA may terminate this Contract at any time prior to completion of the work for Sub-
Grantee's violation of any provision of this Contract upon written notice by SAWPA of the
violation and failure of Sub-Grantee to come into compliance within five days of the notification.
(B) In the event of such termination, the Sub-Grantee agrees, upon demand, to immediately repay to
SAWPA an amount equal to the amount of grant funds disbursed to the Sub-Grantee prior to
such termination with interest, which shall be equal to the State of California general obligation
bond interest rate in effect at the time of SAW PA's notice of termination.
(C) SAWPA may terminate this Contract should DWR terminate SAWPA as program manager,
terminate funding for this Contract, or terminate the Grant Agreement. Upon such DWR-caused
termination, SAWPA shall not be liable to Sub-Grantee for any damages, costs or expenses
resulting from such termination. If the State so declares, Sub-Grantee shall be required to return
any monies previously distributed to Sub-Grantee pursuant to the terms of the Grant Agreement.
SECTION 16. ARBITRATION
Any dispute which may arise under this Contract by and between the SAWPA and the Sub-Grantee,
including the Sub-Grantee's subcontractors, shall be submitted to binding arbitration. The arbitrator shall
decide each and every dispute in accordance with the laws of the State of California, and all other
applicable laws. Unless the Parties stipulate in writing to the contrary, prior to the appointment of the
arbitrator, all disputes shall first be submitted to non-binding mediation.
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SECTION 17. COSTS AND ATTORNEY FEES
In the event of arbitration or litigation between the parties hereto arising from this Contract, it is agreed
that the prevailing party shall be entitled to recover reasonable costs and attorney fees.
SECTION 18. WAIVER
Any waiver of any rights or obligations under this Contract or the Grant Agreement shall be in writing
and signed by the Party making such waiver, and approved by SAWPA.
SECTION 19. AMENDMENT
This Contract may'be amended at any time by mutual written agreement of the Parties.
SECTION 20. SAWPA REVIEWS; SUB-GRANTEE AS INDEPENDENT CONTRACTOR
(A) The Parties agree that review or approval of the Project by SAWPA is for administrative and
eligibility purposes only and does not relieve the Sub-Grantee of its responsibility to properly
develop, adopt, implement, and maintain its conservation-based water rates structure. As
between SAWPA and the Sub-Grantee, the Sub-Grantee agrees that it has sole responsibility for
proper development, adoption, implementation, and maintenance of its conservation-based water
rates structure.
(B) The Sub-Grantee is an independent contractor exclusively responsible for the work funded by
this Grant Funding Contract and that the Sub-Grantee is not acting as SAWPA's agent, nor is
SAWPA acting as an agent of the Sub-Grantee.
SECTION 21. INDEMNIFICATION
The Sub-Grantee shall defend, indemnify, and hold harmless SAWPA and its directors, commissioners,
officers, employees, agents, and assigns against any and all losses, claims, damages or liabilities,joint or
several, including attorneys fees and expenses incurred in connection therewith, to which SAWPA may
become liable in connection with or arising from this Contract. Sub-Grantee shall reimburse SAWPA for
any legal or other expenses incurred by it in connection with investigating any claims against it and
defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of or related
to this Contract. Sub-Grantee shall indemnify and save SAWPA harmless from and against any claims,
losses, damages, attorneys fees and expenses arising from any and all other contracts, contractors,
subcontractors, suppliers, laborers, and any other person, entity or corporation furnishing or supplying
such services, materials or supplies in connection with Sub-Grantee's work funded, in part, by this
Contract. Sub-Grantee shall indemnify and save SAWPA harmless from any and all claims, losses,
damages, attorneys fees and expenses that may arise from any breach or default by Sub-Grantee in the
performance of its obligations under this Contract, or any act of negligence by the Sub-Grantee or any of
its agents, contractors, subcontractors, servants, employees or licensees concerning the subject matter of
this Contract. Sub-Grantee shall indemnify and hold SAWPA harmless from any and all claims, losses,
damages, attorneys' fees and expenses arising out of the completion of the work or the authorization of
payment of work costs or by the Sub-Grantee. No indemnification is required under this Section for
claims, losses or damages arising out of the sole and exclusive misconduct or negligence under this
Contract by SAWPA.
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SECTION 22. PROJECT AND INFORMATION ACCESS
The Sub-Grantee agrees to ensure that SAWPA, DWR, or any authorized representative thereof, shall have
reasonable access to supporting conservation rate structure information at all reasonable times during the
term of the Grant Agreement, and thereafter for the useful life of this Contract.
IN WITNESS THEREOF, the parties have executed this Contract on the dates set forth below.
SANTA ANA WATERSHED PROJECT AUTHORITY
Dated: By:
Celeste Cantu, General Manager
CITY OF TUSTIN
Sub-Grantee
Dated: By:
City Manager
Typed Name