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CLERK Of GOUNgL
Well #38 PFAS AGREEMENT
A-2021-146
This Well #38 PFAS AGREEMENT (the "Agreement") is effective on
jVft IS ("Effective Date") and is between the ORANGE COUNTY WATER
DISTRICT, a special governmental district organized and existing pursuant to the Orange County
Water District Act, Chapter 924, Statutes of 1933, as amended ("OCWD") on the one hand, and
the City of Santa Ana ("City") on the other. OCWD and City are each a "Party" and collectively
"Parties" to this Agreement.
A. OCWD manages the Orange County Groundwater Basin ("Basin") in northern and central
Orange County in order to support a variety of beneficial uses, including potable and non -
potable water supply. Much of the potable water supply currently used within northern and
central Orange County is pumped groundwater for use by persons and cities within OCWD's
service area. Inasmuch as Orange County is located in a semi -arid area, it is essential that all
reasonable efforts be put forth by OCWD and City to protect the quality and quantity of
groundwater supplies within OCWD's boundaries.
B. City operates a public water system for the purpose of delivering potable water. City obtains
a portion of its water supply by pumping groundwater from Water Producing Facilities within
the Basin.
C. A group of man-made substances known as per- and polyfluoroalkyl substances ("PFAS")
has been used in numerous consumer and industrial products since the 1940s. Recent testing
in the Basin has revealed that numerous groundwater wells that are sources of drinking water
in the Basin are impacted by PFAS. PFAS compounds create a unique groundwater
contamination issue that impacts many cities. Without any action, PFAS-impacted
groundwater may migrate, affecting other Water Producing Facilities and larger portions of
the Basin.
D. OCWD and City have entered into a PFAS Treatment Facilities and Program Agreement
("Original Agreement") in April 2019. The Original Agreement provides for OCWD to
design and construct PFAS treatment systems for City wells that have detections of PFAS at
or above 80% of an applicable State of California Division of Drinking Water ("DDW")
Response Level ("RL") or State of California or Federal Maximum Contaminant Level
("MCL") ("OCWD Program"). Under the OCWD Program, OCWD will also pay for 50%
of the Operation and Maintenance cost of the PFAS systems up to $75/acre-foot. City
currently has four wells in the OCWD Program.
E. The City has a Well #38 that currently has perfluorooctanoic acid ("PFOA") groundwater
concentrations of approximately 6 to 7 parts per trillion (ppt) which is below 80% of the
current PFOA 10 ppt RL which makes Well #38 ineligible for the OCWD Program. However,
the Well #38 PFOA and perfluorooctane sulfonic acid ("PFOS") groundwater concentrations
are above their respective State of California Notification Levels ("NL") of 5.1 and 6.5 ppt,
which has led the City to discontinue operating the well.
F. In November 2019, the State of California Office of Environmental Health Hazard
Assessment began the process of developing drinking water Public Health Goals ("PHGs")
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for PFOA and PFOS, the first step in the regulatory process leading to DDW setting
enforceable MCLs. As of the Effective Date, DDW projected establishing PHGs for PFOA
and PFOS in 2021, with MCLs projected to be established by the Fall of 2023.
G. The Parties recognize the necessity of and commit to a high level of coordination to
expeditiously design, construct and operate a PEAS treatment system ("Treatment System")
to remove PEAS from groundwater extracted by Well #38.
H. Until a Treatment System is constructed for Well 438, the City will be purchasing greater
amounts of more expensive imported water.
I. OCWD and the City mutually desire to enter into this Agreement pursuant to the OCWD Act
to document the responsibilities of the Parties in the funding, design, construction and
operation of the Well 438 HAS Treatment System.
J. OCWD has the authority to "construct, purchase, lease, or otherwise acquire, and to operate
and maintain necessary waterworks and other works, machinery, [and] facilities ... useful or
necessary to ... protect the quality of the common water supplies of [OCWD] and purposes
incidental thereto." OCWD may also perform groundwater cleanup, abatement, or remedial
work in cooperation with any other governmental agency, and may initiate cost recovery
actions against persons responsible for causing contamination of the Basin, and for its costs
in cleaning up or containing contamination or pollution of the Basin. OCWD is also
authorized under Section 2(6)(1.) of the OCWD Act to protect and improve water quality
within the Basin by entering into contracts with Producers to produce more groundwater from
the Basin, while taking less water from alternative non -tributary sources, where OCWD
determines that such increased production of groundwater will result in removal of
contaminants or pollutants from the Basin that otherwise would not be removed. Specifically,
OCWD has authority, "for the common benefit of the district and for the purpose of managing
the groundwater basin and managing, replenishing, regulating, and protecting the
groundwater supplies within the district" to enter into an agreement with Producers to increase
the production of groundwater in lieu of water from an alternative non -tributary source for
the purpose of removing contaminants or pollutants from the Basin. OCWD may also "pay
from district funds that portion of the cost of the groundwater production as will encourage
the production for beneficial use of polluted or contaminated groundwater, as long as that
pollution or contamination is impairing the quality of the water supplies within the district
and the quality of the water supplies within the district will be improved by that production."
K. Well #38 is very important to the City's operations to provide reliable water supplies to its
service area. Given OCWD's ongoing implementation of the design and construction of
PFAS treatment facilities at other City wells under the OCWD Program, the City has
requested that OCWD design and construct necessary PFAS .treatment facilities as quickly as
possible for this well under the terms of this Agreement.
The Parties therefore agree as follows:
1. The Recitals above are deemed true and correct and are hereby incorporated in this
Agreement as though fully set forth herein. The Parties agree that the actions that will be taken
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pursuant to this Agreement are reasonable and necessary to accomplish the goals and objectives
of the OCWD Act.
2. PURPOSE.
2.1 Facilitation of Well #38 Treatment. OCWD and the City intend to facilitate
treatment for PFAS. OCWD will coordinate, design and construct a PFAS Treatment System for
Well #38 as directed and approved by City and subject to the provisions of this Agreement.
2.2 HAS Compounds and Reopener. The Parties recognize the necessity of
and commit to a high level of coordination to expeditiously design, construct and operate a Well
#38 PFAS Treatment System to remove PFAS from the groundwater where PFAS has been
detected. The Parties acknowledge that compounds within the HAS family in addition to PFOA
and PFOS may become regulated during the term of this Agreement. To the extent the Treatment
System developed under this Agreement requires modification to treat for additional HAS that
becomes regulated after the Effective Date, the Parties will, where necessary and requested by
City, amend this Agreement to provide for treatment of additional compounds in the PFAS family.
3. PLANNING.
3.1 Treatment Systems. With input from OCWD, City shall determine the type
and final design of the Treatment System to treat HAS contamination in the groundwater
produced by Well #38 to levels below the NL or a future MCL. If City desires, a Treatment System
that can remove PFAS contamination down to non -detect concentrations will be designed and
constructed.
4. DESIGN AND CONSTRUCTION OF PFAS TREATMENT FACILITIES.
4.1 Funding. City shall reimburse OCWD for all reasonable costs and expenses
incurred by OCWD to design and construct the Treatment System regardless of the Agreement
Effective Date. City shall reimburse OCWD within 45 days of receiving an invoice for any such
costs and expenses. Reimbursement from City to OCWD shall not exceed $6 million without
approval from the Santa Ana City Council.
4.2 Design Approval. City shall approve the Treatment System final design
and the City Public Works Director, City Engineer and Water Resources Manager shall affix their
signatures to the final set of contract drawings.
4.3 Consultant Selection. City shall be entitled to approve (1) the consultant
selected by OCWD to provide the final design and (2) the estimated consultant design fee. The
consultant selected must be currently under contract with OCWD.
4.4 Project Cost Estimate. OCWD and the selected design consultant shall
prepare a Treatment System cost estimate once 90% design drawings are approved by City. If the
90% cost estimate or the construction contract bid amount causes the project cost estimate to
exceed the reimbursement amount specified in Section 4.1, OCWD's General Manager may elect
to not proceed with construction until the City and OCWD agree to revised funding reimbursement
terms in writing.
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4.5 CEQA. For the purpose of complying with the California Environmental
Quality Act ("CEQA"), City will serve as lead agency for a CEQA project, OCWD shall serve as
a Responsible Agency. City is responsible for costs associated with CEQA studies, document
preparation, compliance, and related activities.
4.6 Proiect Schedule. OCWD shall make all reasonable efforts to design and
construct the Treatment System for Well 938 within 18 months of Effective Date. This time frame
is dependent upon the type of Treatment System city requires and assumes receiving timely
comments and direction from City as necessary during the preparation of the design drawings and
during the construction of the Treatment System. OCWD will not incur any cost or penalties for
exceeding this time frame.
4.7 Property Acquisition, Entitlements.
A. Land and Rights of Way. City shall secure at its expense any land
and/or right of way necessary to construct the Treatment System.
B. Entitlements. City shall obtain at its expense all land use
entitlements necessary to construct the Treatment System.
C. Property Rights. City shall provide OCWD with temporary property
rights over any site necessary for construction, staging, and laydown for the Treatment System
project. These temporary property rights shall be in the form of a license or temporary construction
easement, or other property right sufficient to provide for OCWD's control of the site during
construction.
D. Advertising and Award of Construction Contracts. OCWD shall
advertise, where required by the OCWD Act, and award a construction contract for construction
of the Treatment System. City shall approve of the selected contractor and support and assist
OCWD in these efforts, and shall expeditiously provide any documents necessary for construction.
E. Administration and Inspection. OCWD will administer the
necessary contracts to construct the Treatment System, including reviewing and responding to
contractor requests for information or requests for clarification, reviewing and approving shop
drawings, and filing a Notice of Completion. OCWD shall provide all construction and inspection
for the Treatment System.
F. Transfer of Treatment System. Upon filing the Notice of
Completion for the Treatment System, OCWD shall transfer the constructed and operating
Treatment System to the City with an appropriate legal instrument and a quitclaim of any property
rights previously obtained. OCWD shall provide the City with copies of all applicable O&M
manuals and record drawings for the Treatment System in OCWD's possession. Upon the City's
receipt of the legal instrument and quitclaim of property rights, City shall be solely responsible for
ensuring the proper operation, maintenance and repair of the Treatment System. The City may
arrange for extended warranties on any component of the Treatment System, which additional cost
may be paid for by the City, and which extended warranty will be transferred to the City together
with the transfer documents.
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G. Warranty, Post -Construction Remedies. OCWD shall make
construction warranty repairs and modifications not attributable to the negligence or willful
misconduct of City for one year after the date of filing of the Treatment System Notice of
Completion. The Parties will also, to the extent they deem prudent, jointly pursue any statutory
construction defect remedies against third -party designers and contractors.
H. DDW Permit Assistance. OCWD will support and assist the City
with technical information in modifying the City's DDW operating permit to account for and
authorize the new Treatment System as part of the City's public water system.
5. FINANCIAL.
5.1 Records Retention, Audit. The Parties shall keep and maintain all records,
accounts and reports relating to this Agreement for a period of at least 3 years after notice of
completion of project is filed. The Parties will have access to these records at any time during
normal business hours upon 10 calendar days' notice. At its cost, any Party may audit the books,
records and accounts of the Party relating to its performance of this Agreement, and the audited
Party shall provide reasonable cooperation to the auditing Party in this regard.
6. RISK ALLOCATION.
6.1 Insurance.
A. Construction Activities. In the hiring of consultants and contractors
to design and build the Treatment System, OCWD shall have the City included as an additional
indemnitee and additional insured on the same basis and with the same limits in all contracts.
OCWD shall provide the City with proof of insurance, including additional insured endorsements.
B. City's Coverage. City shall take out and maintain in effect at all
times during the operation of the Treatment System comprehensive general liability insurance in
an amount not less than $2 million per occurrence, for bodily injury, death and property damage
associated with the operation and maintenance of the Treatment Facilities and Impacted Wells,
naming OCWD as an additional insured under such policy. An endorsement evidencing this
insurance coverage shall be furnished to OCWD prior to OCWD commencing construction on a
Treatment System. If the City is, or becomes, partially or fully self -insured for its public liabilities,
a letter executed by the City's Chief Executive stating the City's self -insured status and
acknowledging its responsibility to indemnify OCWD as required in this Agreement, may be
furnished in lieu of the insurance endorsement otherwise required herein. The City shall provide
written notice to OCWD of any change in the City's insured or self -insured status within 30 days
of the date of such change.
6.2 Indemnity.
A. By City:
(1) City shall defend, indemnify and hold OCWD, harmless
from and against any and all actions, suits, claims, demands, judgments, attorney's fees, costs,
damages to person or property, losses, penalties, obligations, expenses or liabilities (collectively,
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"Claims") that may be asserted or claimed by any third party arising out of the negligent or
reckless performance or implementation of this Agreement by City
B. By OCWD:
(1) OCWD shall defend, indemnify and hold City harmless from
and against any and all actions, suits, claims, demands
judgments, attorney's fees, costs, damages to person or
property, losses, penalties, obligations, expenses or
liabilities that may be asserted or claimed by any third party
arising out of the negligent or reckless performance or
implementation of this Agreement by OCWD.
7. FUTURE WATER QUALITY TESTING AND REIMBUSEMENT BY OCWD
7.1 OCWD will reimburse to City the money paid by City to OCWD for design
and construction of the Well #38 Treatment System within 120 days of confirmation of the
following condition: If routine testing undertaken by OCWD shows that, for two consecutive
quarters, a future Well #38 PFAS compound groundwater concentration is at or above 80% of a
future state or federal MCL or at or above 80% of a current of future state Response Level.
7.2 Effective as of the date of cost reimbursement by OCWD to the City in the
event that the condition described in Section 7.1 is confirmed by OCWD, the Well #38 Treatment
System O&M and associated construction costs shall automatically be governed by the terms of
the Original Agreement without the necessity of formally amending that Agreement Upon that
occurrence, the terms and conditions of the Original Agreement shall be deemed to apply to
Well#38 and shall be incorporated herein as if set forth in full hereat.
8. LEGAL SERVICES AGREEMENT. OCWD and City shall jointly and
cooperatively work together in accounting for the Well #38 Treatment System cost and any impact
it may have with the PFAS Legal Services Agreement both Parties have executed.
9. EXPIRATION AND TERMINATION. Notwithstanding Paragraph 7.2, this
Agreement expires thirty years from the Effective Date.
10. NOTICE. Any notice, instrument, payment or document required to be given or
delivered under this Agreement shall be given or delivered by personal delivery or by depositing
the same in a United States Mail depository, first class postage prepaid, and addressed as set forth
below. Notice under this Agreement may also be provided to such other address as any Party may
direct in writing to the other. Service of any instrument or document given by mail will be deemed
complete upon receipt if delivered personally, or forty eight (48) hours after deposit of such
instrument or document in a United States mail depository, first class postage prepaid, and
addressed as set forth above.
Orange County Water District
P.O. Box 8300
18700 Ward Street
Fountain Valley, CA 92708
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Attn: General Manager
Mike Markus
City of Santa Ana
20 Civic Center Plaza (M-21)
Santa Ana, CA 92701
Attn: Executive Director
Public Works Agency
II. MISCELLANEOUS.
11.1 Further Assurances. The Parties shall execute and deliver any documents
and cooperate in performing any acts necessary to further the intent of this Agreement.
11.2 Time is of the Essence. Time is of the essence in performing all obligations
under this Agreement.
11.3 Force Majeure. Upon written notice by a Party, the respective duties and
obligations of the Parties will be suspended for the time period that performance by the Party is
prevented or substantially impeded by workforce strikes; riots; fire; flood; federal, state or county
regulatory action; pandemics, war; or terrorism.
11.4 Dispute Resolution. If a dispute arises between the Parties in connection
with this Agreement, the Parties shall engage in a mediation before a third -party neutral.
11.5 Successors and Assiens. All of the terms, conditions and provisions of this
Agreement inure to the benefit of and will be binding upon OCWD, the Producer, and their
respective successors and assigns.
11.6 No Implied Waivers. If any term, condition or provision of this Agreement
is breached by either Party and thereafter waived by the other Party, that waiver will be limited to
the specific breach so waived, and will not be deemed either to be a continual waiver or to waive
any other breach under this Agreement.
11.7 No Obligation to Third Parties. The approval, execution and performance
of this Agreement does not confer any rights upon any person or entity other than OCWD and the
City. There are no third -party beneficiaries to this Agreement.
11.8 Nature of Relationship. This Agreement does not create, and will not be
construed or deemed to create, any agency, partnership, joint venture, landlord -tenant or other
relationship between OCWD and any Producer except as specified in this Agreement.
11.9 Intel4ration, Construction and Amendment. This Agreement represents the
entire understanding of OCWD and each Producer as to the design and construction of PFAS
treatment facilities for the Impacted Wells. No prior oral or written understanding will be of any
force or effect with respect to those matters covered by this Agreement. This Agreement will be
construed as if drafted by both OCWD and each Producer.
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11.10 Modification, Variance and Most Favored Nation Provisions. Unless
specifically authorized herein, this Agreement may not be modified, altered or amended unless in
writing signed by authorized representatives of both OCWD and City.
11.11 Severability. Each provision of this Agreement is severable from the whole.
If any provision of this Agreement is found contrary to law, the remainder of this Agreement will
continue in full force.
11.12 Authority. By entering into this Agreement, each Party represents that it,
and to the best of its understanding the other Parties to this Agreement, have proper legal authority
to enter into this Agreement and to fund the work described herein. Each person executing this
Agreement on behalf of a Party warrants that they are: (1) duly authorized to execute and deliver
this Agreement on behalf of that Party, (2) by executing this Agreement, that Party is formally
bound to the provisions of this Agreement, and (3) entering into this Agreement does not violate
any provision of any other Agreement to which that Party is bound. No individual signing this
Agreement shall have individual liability under this Agreement. As a condition of entering this
Agreement, all Parties expressly waive any future challenge to the legal authority of the other
Parties to enter into this Agreement, or to the authority of any other Party to fund the programs
described in this Agreement.
11.13 Construction and Amendment. The terms of this Agreement will be
construed in accordance with the plain meaning of the language used and will not be construed for
or against any Party by reason of the authorship of this Agreement or any other rule of construction
which might otherwise apply. The headings of sections and paragraphs of this Agreement are for
convenience or reference only and will not be construed to limit or extend the meaning of the
terms, covenants and conditions of this Agreement. This Agreement may only be amended by the
mutual consent of the Parties by an instrument in writing.
It.W Effective Date and Binding Effect. The date OCWD executes this
Agreement shall be the Effective Date of this Agreement.
11.15 Electronic Signatures. Any Party may execute this Agreement using an
"electronic signature," as that term is defined in California Civil Code Section 1633.2, or a "digital
signature," as defined by California Government Code Section 16.5. An electronic or digital
signature will have full legal effect and enforceability. Nothing in this Agreement requires any
Party to use or accept the submission of any subsequent or related document containing an
electronic or digital signature where written notice is otherwise required by this Agreement.
[SIGNATURES FOLLOW]
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APPROVED AS TO FORM:
By: ,
Co sel, C D
ATTEST:
airy Gomez
lerk of the Council
APPROVED AS TO FORM
SONIA R. CARVALHO, City Attorney
By: aM 7
A6 M.Funk
Assistant City Attorney
ORANGE COUNTY WATER DISTRICT
M.
General Manager
CITY OF SANTA ANA
By: N V- -ice
Kristine Ridge
City Manager
RECOMMENDED FOR APPROVAL
Nabil Saba
Executive Director
Public Works Agency
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