80A - JOINT - ACQUISITION 1126-1146 WASHINGTON

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Joint Public Hearing —Agreement and Escrow Instructions for Acquisition of Real Property at 1126 -1146 E. Washington Avenue July 5, 2016 Page 2 2. Authorize the Executive Director and Recording Secretary to execute the Purchase and Sale Agreement and all required documents for the acquisition of real property, by and between the Housing Authority of the City of Santa and the City of Santa Ana, located at 1126 -1146 East Washington Avenue (APN 398 - 092 -14) in the amount of $3,490,000 plus closing costs and escrow fees, subject to nonsubstantive changes approved by the Executive Director and Authority General Counsel. DISCUSSION The City's Water Resources Division (Division) provides water and sewer services to over 43,000 ratepayers. This effort involves substantial maintenance and construction activity, and requires approximately 40,000 acre -feet (AF) of potable water annually. The Division needs land to construct a new groundwater well and related facilities to augment capacity and replace aging wells that no longer produce high - quality water efficiently. By constructing a new well, the Division can keep water commodity costs low and stable, improve water pressure and system performance, and enable greater energy efficiency. In addition, the Division is seeking a staging location for construction and maintenance activities to accelerate project delivery and achieve greater efficiency of operations. This location is well suited for the envisioned use because of its placement relative to the water system's hydraulics; it is located in the high end of the main pressure zone in an area which experiences some of the lowest water system pressures in Santa Ana (Exhibit 1). Additionally, this site is in an industrial area, adjacent to the Interstate 5 freeway, has limited accessibility, and will likely experience significant impacts from a future grade separation project at Santa Ana Boulevard, making it an unlikely area for other types of development. Moreover, its proximity to the freeway and major arterials facilitates receiving deliveries, and dispatching personnel, equipment, and materials easily throughout the city. The proposed site is also near an elevated water tank, high capacity main infrastructure, and storm drain facilities. Groundwater wells produce between 70 -75 percent of the City's water supply from local resources. The balance of the water demand is met by purchasing imported water from the Metropolitan Water District (MWD). The cost to produce water locally from groundwater wells is approximately $380 per acre -foot, or about 40 percent of the cost to purchase imported water from MWD at approximately $930 per acre -foot. Having an adequate and redundant well field will ensure a sufficient water supply for a growing community at the lowest cost to the ratepayers. Besides the cost benefits, an additional groundwater well at this site will provide service benefits by supplementing pressure in a historically low- pressure area at the northern (top) end of the distribution zone (includes Station District Development). Pumping water down the slope is more efficient than pumping it up, resulting in less pressure loss from friction and requiring less energy 80A -2