HomeMy WebLinkAboutMETROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA AND THE MUNICIPAL WATER DISTRICT OF ORANGE COUNTYINSURANCE NOT REQUIRED Return FULLY EXECUTED A-2019-202
copy to COTC M-30
WORK MAY PROCEED Agreement No. A05282
CLERK OF THE Co�"gen Metropolitan Water District of Southern California
City of Santa Ana, and Municipal Water District of Orange County
DATE: for In -Lieu Treated Deliveries to MWDOC-Metropolitan Cyclic Account
This Agreement is effective as of the date of execution of the Agreement by all parties,
G Pw-49919) by and between the METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
CsM'� 2 ("Metropolitan"), a public agency of the State of California, the MUNICIPAL WATER
DISTRICT OF ORANGE COUNTY ("MWDOC"), a public agency of the State of California,
N and the CITY OF SANTA ANA ("City"), a California municipal corporation (collectively, the
0
"Parties").
co Section 1. Purpose of Agreement
0
Cl-
a. Metropolitan is a wholesale provider to its 26 member agencies, created under The
v) Metropolitan Water District Act ("MWD Act"). Wat. Code appen., §§ 109-25, 109-
130.
b. MWDOC is a member public agency of Metropolitan and a wholesale water provider
with a service area that includes lands overlying the Orange County Groundwater
Basin, a large groundwater basin located in Northern and Central Orange County.
MWDOC was created under the Municipal Water District Law of 1911. Cal. Wat.
Code, §§ 71000 et seq.
c. City is a member public agency of Metropolitan and a retail water provider with a
service area overlying the over the Orange County Groundwater Basin.
d. Metropolitan, MWDOC and the Orange County Water District have entered into art
agreement dated August 10, 2017 ("MWDOC-Metropolitan Cyclic Agreement")
incorporated herein by reference that provides for the delivery of water by
Metropolitan to MWDOC in advance of demand for the water by MWDOC through a
cyclic account ("MWDOC-Metropolitan Cyclic Account").
e. Through this Agreement, the Parties intend to provide for a means of delivering water
from Metropolitan through City into the MWDOC-Metropolitan Cyclic Account,
which deliveries are intended to be subject to the specific terms in this In -Lieu
Treated Deliveries Agreements. The Parties intend for the MWDOC-Metropolit:m
Cyclic Agreement to apply with respect to all other terms.
Section 2 Designated In -Lieu Treated Deliveries.
Metropolitan's General Manager has determined that water supply conditions are such that
Metropolitan may not be able to capture all available supplies efficiently in available storage.
Given the recent SWP allocation increase to 75 percent, uncertainties due to increased Article 21
and Colorado River supplies, and continued lower demands, supplies available for storage in
2019 may exceed Metropolitan's ability to store in CY 2019. Accordingly, Metropolitan agrees
to pre -deliver treated water to the City to assist Metropolitan in managing its water resources.
The City agrees to take treated water from Metropolitan pursuant to this Agreement for delivery
into the MWDOC- Metropolitan Cyclic account in the Orange County Groundwater Basin
through in -lieu means (In -Lieu Treated Deliveries).
911706v4 EXHIBIT 1
Agreement
Between Metropolitan Water District of Southern California
City of Santa Ana, and Municipal Water District of Orange County
for In -Lieu Treated Deliveries to MWDOC-Metropolitan Cyclic Account
The amount, location, and timing of the delivery schedule, along with an operating plan,
will be mutually agreed upon prior to delivery by Metropolitan pursuant to a purchase
agreement. The actual amount of in -lieu deliveries credited by Metropolitan may be higher or
lower based on operational conditions and the Certification Procedures For In -Lieu Treated
Deliveries for Cyclic Agreement Between Metropolitan Water District of Southern California,
City of Santa Ana, and Municipal Water District of Orange County referenced in Section 8. In -
Lieu Treated Deliveries will be made upon Metropolitan's written request and City's and
MWDOC's written acceptance of additional treated water deliveries. The City represents and
warrants that In -Lieu Treated Deliveries are in addition to its projected full -service deliveries
(treated or untreated), which would normally occur without this agreement.
MWDOC represents and warrants that an amount equivalent to the In -Lieu Treated
Deliveries will be credited to Metropolitan as stored water in the Orange County Basin, pursuant
to an intentional reduction in groundwater production by the City, certified and reconciled
according to Section 8, until such time as the water is purchased by MWDOC pursuant to the
terms of the MWDOC-Metropolitan Cyclic Agreement and Section 9 of this Agreement.
Section 3. Term.
This Agreement is effective as of the date of execution of the Agreement by all parties
and shall continue until July 1, 2027, or until the termination of the MWDOC-Metropolitan
Cyclic Agreement, and is applicable only to In -Lieu Treated Deliveries, as certified and
reconciled according to Section 8. Metropolitan, at its sole discretion, can interrupt the program
authorizing In -Lieu Treated Deliveries by providing 15 days' notice to the City and MWDOC,
Pursuant to Metropolitan's Board's action on April 10, 2019, Metropolitan's General
Manager may make a determination regarding water supply conditions and Metropolitan's
ability to capture all available supplies at any time during the term of this Agreement. When
such determination is made and MWDOC and City agree to accept water pursuant to this
Agreement, MWDOC will enter into a purchase agreement in accordance with Section 2.
Section 4. Treatment Surcharge Pa, anent.
The City agrees to pay Metropolitan the Treatment Surcharge effective at the time of the
In -Lieu Treated Delivery, which for calendar year 2019 is $319 per acre-foot and in calendar
year 2020 is $323 per acre-foot.
Section 5. Cost -offset Credit Term.
In exchange for the City's acceptance of In -Lieu Treated Deliveries, Metropolitan agrees
to pay the City a cost -offset credit of up to $225 per acre-foot, as determined by Metropolitan
pursuant to Section 6. On January 1st of 2020, and every following January 1st, the maximum
$225 per acre-foot amount will be increased by the Consumer Price Index for Urban Wage
Earners and Clerical Workers for Los Angeles -Long Beach -Anaheim All Items (CPI-U)
calculated as the November Prior Year/November 2018 CPI-U increase rounded to the nearest
44117060
Agreement
Between Metropolitan Water District of Southern California
City of Santa Ana, and .Municipal Water District of Orange County
for In -Lieu `Created Deliveries to MWDOC-Metropolitan Cyclic Account
dollar. For example, if [lie November 2019 CPI-U was 269.005 and the November 2018 CPI-U
was 259.064, then the increase for January 1, 2020 would be 3.84% or up to $234 per acre-foot.
Section 6. Determination of Cost -offset Credit Term.
Metropolitan, at its sole discretion, will determine the Cost -offset Credit Term.
Metropolitan will make such determination based on an estimate of costs incurred by the City as
a result of taking In -Lieu Treated Deliveries of additional treated water at Metropolitan's request
that the City would not otherwise have taken, minus the costs that the City would have incurred
if it produced an equivalent amount of water from the Orange County Groundwater Basin. The
City will submit its avoided cost estimates to Metropolitan, which Metropolitan will review in
addition to historical production cost estimates. Metropolitan will determine the cost -offset credit
term and speci Cy the amount in each purchase agreement.
The City may, at any time prior to reconciliation and certification described in Section 8,
request a redetermination of the Cost -Offset Credit Tern, by submitting documentation that its
groundwater production costs have changed. Metropolitan may, in its sole discretion, change the
Cost -Offset Credit Term upon review of any such additional documentation and confirmation of
changes in costs.
Section 7. Billing Procedures.
Metropolitan will bill the City the Treatment Surcharge in effect at the time the City
certifies the In -Lieu Treated Deliveries, in the same manner as Metropolitan bills the City for all
other water sales. Metropolitan will pay the City the Cost -Offset Credit Term for In -Lieu Treated
Deliveries by applying a credit to the City's meter invoiced amounts, which credit is subject to
the certification and reconciliation process described in Section 8.
Section 8. Certification and Reconciliation of In -Lieu Treated Deliveries.
The City shall submit monthly certifications of Iii-Lieu Treated Deliveries pursuant to
this Agreement consistent with Metropolitan's Administrative Code, sections 4506 to 4507, Such
certifications will be made pursuant to the Certification Procedures For In -Lieu Treated
Deliveries,for Cyclic Agreement Between Metropolitan Water District of Southern California,
City of Santa Ann, and Municipal Water District of Orange County, attached hereto and
incorporated herein as Attachment 1. On a monthly basis Metropolitan will review these
certifications for conformance with the operating plans submitted pursuant to the Certification
Procedures For In -Lieu Treated Deliveries,for Cyclic Agreement Between Metropolitan Kite, -
District of Southern California, City ofSania Ana, and Municipal Water District of Orange
County. Metropolitan will process certifications of these deliveries made pursuant to this
Agreement in accordance with the agreed -upon operating plan in order to ensure In -Lieu Treated
Deliveries were made in addition to normal Full -Service deliveries and as a result of actions to
reduce groundwater pumping.
411706v4
Agreement
Between Metropolitan Water District of Southern California
City of Santa Ana, and Municipal Water District of Orange County
for In -Lieu Treated Deliveries to MWDOC-Metropolitan Cyclic Account
Metropolitan will void any credits given for water deliveries that Metropolitan is unable
to determine that are qualifying In -Lieu Treated Deliveries under this Agreement, which will
result in an equivalent charge to the City's water invoice plus the applicable untreated Full -
Service rates and charges. The total amount of all voided credits shall be billed in the next
month following the end -of -year reconciliation.
Metropolitan staff will, in collaboration with City staff, perform an annual reconciliation
of In -Lieu Treated Deliveries within six months following such time that City's final
groundwater production numbers are finalized and provided to Metropolitan staff, in accordance
with Attachment 1.
Section 9. Purchase of Water Out of Cyclic Account.
MWDOC agrees to purchase the In -Lieu Treated Deliveries out of the Cyclic account
according to the signed purchase agreement. Billing and payment procedures shall be the same
as other purchases from the Cyclic account.
Approved as to form:
By:
o ep r Byrne
General Counsel
Date: V / 7 12?
Approved as to form:
Sonia R. Carvalho, City Attorney
By: JMqCU rC• PK211 hd ,
Laura A. Rossini
Senior Assistant City Attorney
Date: M,21119
N117060
Municipal Water District of Orange County
By:
Harvey De La Torre, Ass''stant General Mgr
on behalf of
Robert Hunter General Manager
Date:/i�oZZ
City of Santa Ana
By:
Kristine Kidge
City Manager
Date: ?-2—Z,2i
Agreement
Between Metropolitan Water District of Southern California
City of Santa Ana, and Municipal Water District of Orange County
for In -Lieu Treated Deliveries to MWDOC-Metropolitan Cyclic Account
Attest:
Recommended for approval:
By: A� By:
Daisy Gomez Nabil Saba
,f.r Clerk of the City Council Executive Director, Public Works Agency
Date: I I I I *,A-
Approved as to fonn:
BY
Marcia L. Scully
General Counsel
Date: Cl, / 24 / `7A ZZ
#11706v4
Date: `(/ 7/ZZ
The Metropolitan Water District
of Southern California
ma
Adel Hagekhalil
General Manager
LL
Date: fp
Attachment I
Certification Procedures
For In -Dieu Treated Deliveries for Cyclic Agreement
Between Metropolitan Water District of Southern California
City of Santa Ana, and Municipal Water District of ®range County
1, Introduction
The purpose of this Attachment I is to assist the City of Santa Ana (Santa Ana) in its
certification of In -Lieu Treated Deliveries for its participation in the Agreement Between
Metropolitan Water District of Southern California (Metropolitan), The City of Santa Ana (Santa
Ana), and Municipal Water District of Orange County (MWDOC) for the Addendum to Cyclic
Agreement for In -Lieu Treated Deliveries (Agreement). Pursuant to the Agreement, Santa Ana
is eligible to receive a cost -offset credit in accordance withsections4 and 5 of the Agreement
(Cost -offset Credit). To qualify for the Cost -offset Credit, Santa Ana must meet the
requirements contained in these In -Lieu Treated Deliveries Certification Procedures and in
Metropolitan's Administrative Code Section 4507.
2. Administration
Annual (➢ueratine Plan
For Santa Ana to participate in this Agreement, Santa Ana shall submit an Operating Plan to
Metropolitan's Water System Operations Group (WSO) for review prior to the beginning of the
operating period. WSO staff will review the operating plan and work with agency staff to
resolve issues and questions related to the operating plan. Operating plans for In -Lieu Treated
Deliveries shall follow the form as outlined on the Excel worksheet provided by Metropolitan's
WSO staff.
Certificatimr of In -Lieu Treated Deliveries
In order to obtain the Cost -offset Credit, Santa Ana shall certify the amount of In -Lieu Deliveries
purchased from Metropolitan on the fortis provided by Metropolitan. Metropolitan WSO staff
will perform a cursory review of the certifications for mathematical accuracy upon their receipt.
Such a review does not preclude Metropolitan from correcting errors discovered as a result of
Metropolitan's annual reconciliation of the In -Lieu Treated Deliveries under this Agreement.
Annual Reconciliation
Metropolitan WSO staff will complete an Annual Reconciliation of Santa Ana's In -Lieu Treated
Deliveries certifications within six months following receipt of final documentation from the
agency staff. During this period Metropolitan staff will work with Santa Ana staff to reconcile
any differences; If differences cannot be resolved, the Resolution of Differences section below
shall apply.
Santa Aria shall submit final documentation within six months after the end of the Fiscal Year
operating period. If final documentation is not submitted, Metropolitan will assume that the
water had been used for Full Service purposes. Santa Ana shall be obligated to pay the amount
#11707v1
of the credit that had been applied to the in -Lieu Treated Deliveries and all other rates and
charges associated with Frill Service Treated deliveries.
Listed below is the documentation that Santa Ana should maintain to support the Annual
Reconciliation. Metropolitan reserves the right to review original documentation.
• Original monthly groundwater production records for the previous three years.
• Original monthly production records from other local sources
• Monthly Metropolitan deliveries.
• Monthly demands, excluding recycled water.
• Annual local water rights, preferably groundwater basin manager report.
• If a sub -agency, monthly water bill from member agency.
Resolution of Differences
If an impasse exists on the interpretation of the Agreement between the Santa Ana and
Metropolitan staff, Metropolitan's Water System Operations' Group Manager has the
responsibility to consult with Santa Ana and make a final ruling subject to the General
Manager/Chief Executive Officer's oversight. If the ruling on the issue is unsatisfactory to the
agency, it canoe appealed to the Water Planning and Stewardship Committee of Metropolitan's
Board of Directors. The Water Planning and Stewardship Committee shall consider such appeals
and make recommendations to the Board. The Board shall act upon such recommendations and
its decision shall be final.
3. Documentation for Planning, Traelcing, Measuring and Certifying In -
Lieu Treated Deliveries under the Cyclic Agreement
'Iris Section 3. "Documentation for Plarraing, Tracking, Measuring and Certifying In -Lieu
Deliveries under the Cyclic Agreement augments the Rate Handbook and, where applicable,
govern deliveries made under this Agreement. All forms are formatted as Excel worksheets.
Worksheet 1, Operating Plan, consists of three sections: Section A, Historic Groundwater
Production; Section B, Planned Annual Operating Plan; and Section C, Actual -to -Date and
Planned Operations. Worksheet 2, Monthly Certification, is used to certify monthly In -Lieu
Treated Deliveries, Agencies should use the Monthly Certification worksheet to certify In -Lieu
Treated Deliveries made through a connection having more than one designated use,
It is Santa Ana's responsibility to submit Sections A and B of the Operaling Plan prior to the
beginning of the upcoming operating period, and to update Section C of the Operating Plan, as
needed, to reflect actual -to -date operations and any changes in planned operations. In order to
receive the cost -offset credit on In -Lieu Treated deliveries under the Cyclic Agreement, Santa
Ana must also submit a Monthly Certification to Metropolitan for each month that Stich
deliveries occurred. All certified water also would be subject to Certification and Billing
Procedures outlined in the Rate Handbook and subject to Administrative Code, Section 4507.
Lines on the forms requiring data input are highlighted in green. All other lines are calculated.
A line: -by-line explanation of the forms follows with the symbol, "1,61" designating a user input,
and the ")P" symbol designating a calculated value:
#11707v1
Worl(sheet 1 — QegLydt! r Plan
Section A - Historic Groundwater Production: Section A calculates an Adjusted Baseline that
is the basis against which monthly In -Lieu Cyclic Treated Deliveries will be measured. The
Adjusted Baseline should reflect the monthly pumping pattern Santa Ana world follow if it were
not planning to certify in -lieu deliveries from Metropolitan. The Adjusted Baseline is based on
historic groundwater production patterns; however, Santa Ana may adjust these patterns to
reflect anticipated system or operational changes during the coming operating year,
6) Lines Al, A2, Sa A3 - FY Groundwater Production: Santa Ana inputs previous three
years monthly groundwater' production data beginning one-year prior to the end of the
last full operating period. For example, for an agency preparing its FY 2019-20
operating plan, the three years prior would include FY's 201748, 2016-17, and 2015-16.
Monthly groundwater production data includes actual pumped groundwater and imported
in -lieu deliveries.
Q Line A4 - 3-Year Ii'istorical Baseline: Spreadsheet calculates Santa Ana's average
monthly groundwater production from the past three years.
i Line A5 - Adjustments to Baseline: Santa Ana inputs anticipated increases and/or
decreases in total monthly production due to factors such as new production wells
coming online, wells taken out of service, and/or other justifiable alterations in
production patterns.
Line A6 - Adjusted Baseline: Spreadsheet calculates Santa Ana's Adjusted Baseline for
the coming operating year, i.e., 3-Year Historical Baseline with Adjustments to Baseline
(positive or negative).
As indicated above, Lines Al, A2, A3, and A5 are user inputs to be provided by Santa Ana
prior to the beginning of the; operating year for review by Metropolitan. This review may
require Santa Ana provide Metropolitan with records documenting historic well production
and rationale for Adjustments of Baseline.
.Section 8 — Planned Annual Operating flan: Section B is Santa Ana's projection of monthly
imported water deliveries, groundwater production, and other local supplies that will be used to
meet its retail demand. The Section functions as a planning tool for Santa Ana and Metropolitan.
It also calculates projected In -Lieu Treated ]deliveries eligible for certification as Cyclic Delivery
based on projected groundwater production. Although only an initial estimate, once completed,
Section B should remain static throughout the operating year and utilized as the baseline with
which to evaluate the year's actual progress.
4 Line B1 - Adjusted Baseline: This line carries forward Santa Ana.'s Adjusted Baseline
calculated in Line A6.
i Line B2 - Monthly Production -Capability: Santa Ana projects the well capability
available for each month of the operating year. Available capability refers to the
911707v1
operational status of facilities in place to extract groundwater for retail water use. For
example, the total capacity of Santa Ana's well Field might be 50 cfs, but four wells are
out service due to factors such as mechanical problems or diminished water quality. Au a
result, only 38 cfs of the well field's 50 cfs capacity is actually available for production,
and 38 c£s would be considered Santa Ana's Monthly Production Capability.
Line B3 - Baseline: Spreadsheet calculates monthly Actual Baseline, i.e., the lesser of
the Adjusted Baseline or Monthly Production Capability. In -lieu water certified by Santa
Ana may not exceed its production capability for that month.
0 Line B4 - Planned Groundwater Production: Santa Ana inputs amount of
groundwater it plans to produce each month to meet retail demand,
i � Line BS --All Other Local Sources: Santa Ana inputs quantities ofwater it expects to
produce from all other local sources other than the groundwater basin to meet retail
demand. These sources include recycled, recovered groundwater, local runoff, imported
transfers, etc.
k) Line B6 - Planned Cnxport: Santa Ana inputs amount of water it expects to purchase
from Metropolitan to meet retail demand.
Line B7 —Total Retail Demand: Spreadsheet calculates Santa Ana's entire retail
demand, i.e., Planned Groundwater Production, plus All Other Local Sources, plus
Planned Import.
Line B8 — Estimated Monthly In -lieu Credit (Underproduction): Spreadsbeet
calculates planned monthly groundwater underproduction, i.e., Baseline less Planned
Groundwater Production. If positive, indicates water being stored. If negative, indicates
water being taken out of storage (overproduction).
Section C — Actual -to -Date and Planned Operations: Initially completed with the identical
information as ,Section B — Planned Annual Operating Plan, Section C calculates actual In -Lien
Treated Deliveries, updates projections shown in Section with actual operational data, and is
used to revise projected operations; as needed, based on actual operations to date. Monthly In -
lieu Treated Delivery credit is applied to the volume difference between the Santa Ana's
Baseline and actual Groundwater Production.
Santa Ana is expected to update thisfirin whenever In -Lieu Treated Deliveries are certified.
Updates should include actual deliveries of groundwater, other local supplies and imported
deliveries that have occurred during the operating period. Updates should also include any
anticipated changes in projected groundwater production, local supply production, imported
water deliveries, and retail demands as a result of actual operations to date. When certifying
Monthly In -lieu Treated Deliveries Credit, please mark any box(es) above the trionth(s) where
adjustments have been made to planned operations in. Litres (C4), (C5), or (C6). In addition,
mark any box(cs) below the Monthly In -Lieu Credit where Actuals to Date have been
determined
III 1707v1
Line C1 - Adjusted Baseline: This line carries forward Santa Ana's Adjusted Baseline
calculated in Line A6.
Wi Line C2 - Actual Monthly Production Capability: Santa Ana specifies the.aetual well
capability available for the month being certified and, as needed, updates projected well
capability for the remainder of the operating period.
Q Line C3 - Baseline: Spreadsheet calculates monthly Baseline, i.e., the lesser of the
Adjusted Baseline or Monthly Production Capability,
Fq Line C4 - Groundwater Production: Santa Ana inputs amount of groundwater actually
produced during the operating period and; as needed, updates projected groundwater
production for the remainder of the operating period.
4: Line C5 — All Other Local Sources: Santa Ana inputs local supplies actually produced
during the operating period and, as needed, updates local supplies projected for the
remainder of the operating period.
nw Line C6 - Import: Santa Ana inputs imported water purchased from Metropolitan to
meet retail demand during the operating period and, as needed, updates imported water
projected for the remainder of the operating period.
Line C7 — Total Retail Demand: Spreadsheet calculates Santa Ana's retail demand,
i.e., Groundwater Production plus Other Local Sources plus Import.
'' Line CS - Monthly Underproduction: Spreadsheet calculates monthly groundwater
underproduction, i.e., Baseline less Groundwater Production.. If positive, indicates water
being stored. If negative, indicates water being taken out of storage (overproduction).
C1 Line C9 - Cumulative Underproduction: Spreadsheet sums monthly underproduction
through each month of the operating period beginning at the end of the operating period
(June).
Line CIO - Monthly In -lieu Credit: Spreadsheet calculates amount of monthly In-lie�r
Treated Deliveries to be certified limited by Monthly Production Capability and Imported
water,
Worksheet 2 - Monthly Certification for Delivery of Ira -Lieu Cyclic Water
Workslieet 2 must be submitted by Santa, Ana for each month that it wishes to certify In -Lieu
Treated Deliveries, On each certification, Santa Ana must indicate their name, the identity of the
retail agency delivering the water, if applicable, and the month in which the operation occurred.
In addition, Santa Ana must sign and date each certification submitted to Metropolitan,
fit 1707vI
Santa Ana should use Worksheet 2 to certify In -Lieu Treated Deliveries. In addition, for billing
and crediting purposes, Santa Ana should also certify the service connections through which the
delivery was made and the amount ofwater to be certified as on each service connection.
Individual lines on this form should be completed as follows:
Line C3 -Baseline: Santa Ana inputs Baseline value shown in line C3 of Worksheet 1.
: Line C4 - Groundwater Production: Santa Ana inputs value shown in C4 of
Worksheet 1.
Line C8 — Actual Underproduction: Spreadsheet calculates underproduction occurring
in the month being certified.
Line C2 -- Monthly Production Capability: Santa Ana inputs Production Capability
shown in line C2 of Workshcot 1.
Of Line C6 — Monthly Actual Imported Deliveries: Santa Ana inputs Monthly Actual
imported Deliveries shown in lino CS of Worksheet 1. The sum of volumes certified by
service connection shall be equal to the input for Monthly Actual imported Deliveries on
Line C6.
M 707v t