HomeMy WebLinkAbout02/11/1991 Item #F-3brrg 1 1 1991
TO: CITY COUNCIL
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February 11, 1991
CITY COUNCIL AGENDA
ITEM NO. F"3(b)
FROM: Utilities Department C _ Z�s3
SUBJECT: NEWPORT BEACH GROUNDWATER DEVELOPMENT PROJECT
PIPELINE LEASE AGREEMENT WITH ORANGE COUNTY WATER
DISTRICT (OCWD)
RECOMMENDATIONS:
Approve a Lease Agreement with the OCWD for lease of the
District's "Seawater Intake Pipeline" for water transmission
purposes.
DISCUSSION:
The City, as a part of its Groundwater Development Project
requires wells and water transmission facilities to convey water from the
groundwater source to the City's water consumers. The proposed project
consists of several high capacity wells in the vicinity of Mile Square Park in
Fountain Valley and a 30 -inch diameter water transmission pipeline from
the wells to the City's 16th Street Reservoir site in West Newport.
The City has been working cooperatively in the planning and
design of the project with OCWD for several years. During the course of the
discussions with OCWD about project development and groundwater
modeling, the District offered to negotiate a lease for an existing, unused
water pipeline owned by the District. Groundwater modeling performed by
OCWD confirms that a groundwater extraction must be inland of the
District's injection well barrier along Ellis Avenue. The District's pipeline
is located such that it would provide Newport Beach with a substantial
portion of the required water transmission main between the current
proposed extraction sites and the delivery point.
The pipe was originally installed by OCWD in 1972 to study
the feasibility of desalinating seawater under a federal grant fund program.
The pipeline and a small treatment facility was operated for only nine
months before it was concluded that desalinating costs were infeasible.
The pipe is 30 -inches in diameter and is constructed of asbestos -cement
material; one the City uses as a matter of practice. The size is nearly ideal
for the quantity of water the City proposes to convey.
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OCWD Pipeline Lease AgreAt
Febmary 11, 1991
The City entered into an Agreement (approved by the City
Council June 26th, 1989) with OCWD to test the pipelines hydraulic and
pressure capacity. The City has completed tests and believes the line to be
in a usable condition with minor repairs.
The portion of the pipeline which the City desires to lease runs
from the intersection of the Talbert Flood Control Channel at Hamilton Avenue
west of Bushard Avenue in Huntington Beach northerly to the Intersection of
Ward Street and Ellis Avenue in Fountain Valley. This reach of pipeline is
approximately 21,000 feet (3.97 miles) long. An equivalent length pipeline of a
similar design would cost on the order of $3,500,000 to construct.
The principal terms of the Lease Agreement under consideration
are as follows:
1. City leases pipe from OCWD for a 25 year term.
2. City's lease payment in year #1 is zero.
3. City's lease payment in years #2 thru #15 is $100,000 per year.
4. City's lease payment in years #16 thru #25 is $1.
5. City & District can renew the lease for an additional 25 years.
6. OCWD conveys its rights-of-ways,hcenses and permits for the
pipeline to City.
7. OCWD can terminate the lease upon 4 years advance notice.
8. City can terminate the lease upon 30 days notice.
9. City pays all costs required to bring pipe up to City operating
standards.
The costs of the lease can be paid for out of the Utilities
Department Capital Projects budget under the "wells & transmission pipeline
project" fund.
The project concept, the Lease Agreement and their benefits to
the City have been reviewed and recommended by the Utilities Committee at
the meeting of February 4th, 1991.
G l
Robert J. Dixon
Utilities Director
Js: sdi
Attachments: Exhibit "A": Pipeline Lease Agreement
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