20B - AA - AGMT - DELHI DIVERSION

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Cooperative Agreement with the City of Costa Mesa Santa Ana Delhi Diversion April 19, 2016 Page 2 The Delhi Project will divert trash and debris flow from the Santa Ana Delhi Channel into a containment area while conveying dry weather flows into an Orange County Sanitation District (OCSD) trunk sewer main. The OCSD trunk sewer main serves an Orange County Water District (OCWD) advanced water purification system ("Groundwater Replenishment System") which helps replenish OCWD aquifers benefitting the public. OCWD participation in the project will assist in accomplishing its goal to increase flows in the OCSD system and increase source water for groundwater replenishment. In accordance with Section 15074(b) of the California Environmental Quality Act (CEQA), before any action can be taken on a project, the decision -making body of the lead agency must first consider the environmental impacts of the project. Since the City of Santa Ana is the lead agency for the Delhi Project, Council approval of the environmental impact findings is required. A Mitigated Negative Declaration has been prepared for this project (Exhibit 1). The process is summarized in the Environmental Impact section below. The City of Costa Mesa is currently advertising for bids to construct its Bristol Street Median Project within the City of Costa Mesa. The project is scheduled to start in May 2016. However, a portion of the Delhi Project is within the city limits of Costa Mesa and will conflict with the Bristol Street Median Project. The Delhi Project is several months away from advertising and is not scheduled to start until early 2017. To mitigate this conflict, staff recommends building the underground portion of the Delhi Project in conjunction with Costa Mesa's Bristol Street Median Project. By including this work in Costa Mesa's project, the Delhi Project (and, by extension, the City of Santa Ana) will experience significant savings in construction management costs, mobilization costs, street reconstructions costs, traffic control costs, as well as construction time savings. To realize these cost savings and to allow Costa Mesa to complete their time -sensitive, grant - funded Bristol Street Median Project, the City of Santa Ana and the City of Costa Mesa desire to enter into a Cooperative Agreement (Exhibit 2). This agreement outlines a funding exchange in which Santa Ana will provide funds to Costa Mesa, in an amount not to exceed $1,100,000. These funds are to be used exclusively to construct the portion of the Santa Ana Delhi Diversion Project that is in conflict with the Costa Mesa Bristol Street Median Project. The advance is comprised of the City of Santa Ana's share of the construction cost for the Delhi portion ($500,000) and the City of Costa Mesa's share ($600,000). The Cooperative Agreement requires Costa Mesa to reimburse Santa Ana for its $600,000 share by January 31, 2017. The City of Santa Ana's Capital Improvement Program for Fiscal Year 2015-2016 currently identifies a total budget of $343,050 for Preliminary Engineering expenditures. The budget increase of $1,100,000 is needed to fund the cost to construct the portion of the Santa Ana Delhi Diversion Project that will be completed along with the Costa Mesa Bristol Street Median Project. Approval of the appropriation adjustment will allocate the necessary funds for the completion of this portion of the project. 20B-2