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HomeMy WebLinkAbout15 - Reclaimed Water - San Joaquin Reservoir - BIRPAC3&q, �' I�EM 15 C-3400_ awl C -34,W -b C �.1«�ntt� '" 6 E -I :' CCUNCI TO: Members of the Newport Beach City Council ` FROM: Bob Burnham, City Attorney r Dave Kiff, Deputy City Manager o ZvvIA4-.O SUBJECT: Resolution 2001 Relating to Reclaimed Water, the San Joaquin Reservoir (SJR), and the Basic Integrated Re -Use Project Agreement (BIRPA) — Reservoir Operating Criteria Memorandum of Understanding, Transfer of Reservoir Ownership, Collective Defense Agreement RECOMMENDED (1) Adopt Resolution 2001-_ relating to Reclaimed Water, the San Joaquin ACTIONS: Reservoir, and the Basic Integrated Re -Use Project Agreement (BIRPA); (2) Authorize the Mayor to execute the Memorandum of Understanding Regarding Operating Criteria for San Joaquin Reclaimed Water Storage Reservoir with the Irvine Ranch Water District (IRWD); (3) Authorize the City Manager to execute the transfer documents associated with the sale of the San Joaquin Reservoir (SJR); and (4) Authorize the Mayor to enter into a collective defense agreement with the owners of the San Joaquin Reservoir regarding Superior Court Case #01CC01034 (DEFEND THE BAY, plaintiff vs. IRVINE RANCH WATER DISTRICT and CITY OF NEWPORT BEACH et al, defendants). BACKGROUND: IRWD wants the City to sell our 1.18% ownership in the SJR to IRWD so that IRWD can convert the SJR to a reclaimed water reservoir. IRWD needs more wintertime storage for its reclaimed water so that it can avoid wasting it by putting it out to sea. In proposing the SJR conversion, IRWD did a mitigated negative declaration (MND) to satisfy the California Environmental Quality Act (CEQA). The City reviewed the MND and found areas that needed improvement — including the establishment of operating criteria for the SJR to avoid odors and vectors. The City's Environmental Quality Affairs Committee (EQAC) and Defend the Bay, a local non-profit advocacy group, went further. EQAC and DTB think that IRWD should do a full Environmental Impact Report (EIR) instead of a MND. Both EQAC and DTB have asked IRWD to analyze the "growth -inducing impacts" of the SJR's conversion. They argue that more storage for reclaimed water frees up potable water — and that having more potable supplies means that Irvine can grow more. Reclaimed Water & Discharge. Most people agree that storing reclaimed water in the SJR is a good thing. It minimizes the chances that IRWD will try to obtain permission to dispose of its excess wintertime reclaimed water by putting it in San Diego Creek, which drains into Newport Bay. IRWD would much prefer to store the wet season excess reclaimed water and sell it to their customers during the dry Newport Beach City Council r SJR Conversion Staff Report February 27, 2001 Page 2 season than to dispose of the water. IRWD can already indirectly discharge reclaimed water diluted with rainwater into the Creek during large storm events (when more than about 5" of rain falls over a 7 -day period) per a National Pollutant Discharge Elimination System (NPDES) Permit (called "Order 94-22"). This reclaimed water comes out of another reservoir in IRWD's system called Sand Canyon Reservoir (SCR), but only when significantly mixed with rainwater (see Figure A). Figure A HOW DISCHARGES FROM SAND CANYON OCCUR RUNOFF/ INFLOW SPS- SPILLWAY ELEVATION 193.5.0 AVAILABLE FOR RUNOFF STORAGE 74% OF 9TORAGE (534 AF) D 177.0 KORID RECLAWM WATER (20D AF) 26%OFSII7RAGE X 163.0 SAND CANYON RESERVIOR RAINY SEASON STORAGE ELEVATIONS • Releases of reclaimed water from Sand Canyon restricted per Order 94-22 (releases limited to emergency overflows of the SCR during storm events — defined as "rainfall over a 7 -day period or less which is equivalent to that from a 25 -year, 24-hour storm event"). IRWD cannot release any other reclaimed water from SCR — doing so is specifically prohibited under Order No. 94-22. • According to IRWD, overflow (reclaimed water mixed with storm runoff) occurs every 3 to 5 years during wet weather emergency conditions. • IRWD must limit the storage of reclaimed water in SCR to 200 acre feet between October and March of each year. This is 26% of the reservoir's total storage capacity of 784 AF. The quality of the reclaimed water in Sand Canyon Reservoir is treated to essentially drinking water standards as required by the California Department of Health Services. • During a 25 -year, 24-hour storm event, reclaimed water in the SCR (not more than 200AF) mixes initially with at least 584 AF of runoff before any overflow occurs. Subsequently, the diluted RW - Storm Water mix is further diluted with 100s or 1,000s of AF of storm water during the course of the overflow. According to IRWD, "by the time the reservoir overflows, the presence of reclaimed water is all but indistinguishable." These releases are permitted by the RWQCB, in part, because of this high dilution. SJR Conversion Staff Report February 27, 2001 Page 3 Wetlands Water Supply Project (WWSP). Back in 1996, IRWD proposed discharging reclaimed water into San Diego Creek after filtering though a series of ponds (this proposal was called the "Wetlands Water Supply Project"). Newport Beach largely opposed the WWSP, arguing that, at the very least, putting reclaimed water in the Creek would color people's perception of the water quality of the Bay. DTB and others went further, arguing that reclaimed water adds nutrients to an already -impaired water body and that it might add other hard -to -detect toxins (like endocrine disruptors) to the Bay. WWSP never went into effect. Instead, IRWD takes Creek water, irrigates the 300 - acre San Joaquin Marsh (the largest coastal freshwater wetlands in Southern California) with the Creek water, and returns the water to the Creek (see schematic in Attachment B). The Creek water's 10- to 14 -day passage through the Marsh removes nutrients and creates a dynamic habitat for migratory birds. WWSP also caused the City to work with IRWD and the Orange County Water District on alternate uses for excess wintertime reclaimed water. The resulting Basic Integrated Re -Use Project Agreement (BIRPA) sends some of the excess reclaimed water to OCWD while adding to the market for reclaimed water sales within Newport Beach. IRWD has fully complied with its obligations under BIRPA, an action which demonstrates to us IRWD's commitment to and respect for BIRPA. Even with BIRPA, WWSP brewed a debate that remains today — IRWD thinks reclaimed water is safe for the Bay, others disagree. IRWD hasn't proposed a new way to discharge into the Bay beyond what exists in Order 94-22, but some in Newport Beach have asked the City Council to hold off on any agreement to sell the City's 1.18% ownership in the SJR until IRWD promises "never" to discharge reclaimed water into the Bay. IRWD thinks that tying "no -discharge" to the SJR is ill- conceived and runs counter to our previous efforts to finds ways to beneficially use the excess reclaimed water in the wet season. Why SJR's Conversion Makes Sense. Staff believes that the conversion of SJR to a reclaimed water reservoir is good for the City for the following reasons — so long as IRWD properly designs and manages SJR: • The storage capacity in the SJR triples IRWD's overall storage capacity and will significantly reduce, if not eliminate, the potential for IRWD to seek permission to discharge reclaimed water into San Diego Creek. • Newport Beach residents will once again enjoy a blue water view and may save money by using SJR reclaimed water to irrigate common area. • Outside Counsel has told us that BIRPA's "long-term no discharge scenario" is enforceable — if IRWD attempts to discharge in the Bay before BIRPA's 2011 expiration date, the City can litigate under BIRPA. • If the City ever needs to litigate under BIRPA, BIRPA itself binds us to use our "best efforts" to help IRWD avoid discharges. If we block IRWD's use of the SJR for reclaimed water storage, we may invalidate BIRPA on our own. • IRWD has told us that they have no plans to discharge into the Bay beyond what's allowed in Order 94-22. • There is a legal and public process to regulate discharges that is administered by the Regional Board per the Board's enforcement of the Clean Water Act and SJR Conversion Staff Report February 27, 2001 Page 4 NPDES Order (94-22). The Regional Board is the proper forum to deal with future discharges and other issues related to water quality. MOU for Reservoir Operations. Our other major concern was the operation of the SJR itself — we wanted IRWD to tell us exactly how they would operate the SJR so that odors and vectors do not impact surrounding areas. IRWD has a strong incentive to ensure that SJR water quality is good because they will not be able to sell poor quality water to their customers. IRWD has agreed to enter into a Memorandum of Understanding (MOU) with the City that describes how IRWD will design and operate the SJR. We summarize the MOU in Figure B. Figure B WHAT'S IN THE PROPOSED MOU Problem.. Low dissolved oxygen levels, Install an aeration system and IRWD odors operate a full water circulations stem Seepage Install a collection system IRWD from toe of Reservoir at toe of Reservoir Preservation of downstream Have a biologist monitor habitat, IRWD habitat supplement w/potable water flows Excessive algae, vectors (flies, Monitoring for problems + IRWD frogs, mosquitos) implement remedial actions after coordination with Ci Observe CA Division of Safety of Dams Seismic Safety drawdown criteria IRWD Host "hotline" for residents, Complaints from meet and confer with residents annually, IRWD/City area residents meetPconfer with City annually as requested by City. Need to clean & draw down Conduct drawdown and cleaning per MND, but IRWD reservoir maintain 400' o erational level. with City support) Reclaimed Water No discharge from SJR, unless life safety or IRWD Discharge from Reservoir property afetV impaired. Fi �M.wV, •• 1. ,~+ `6 7- Al Xlom FRO i4 +` �; t• rP Collection �. Seepage ; System Monitoring by Biologist SJR Conversion Staff Report February 27, 2001 Page 5 3rd Party Review. We asked Mr. James Matthews of Pacific Advanced Civil Engineering (PACE), whose firm conducted a prior study of the Project, to review the MND's Mitigation Monitoring Plan. PACE is a Huntington Beach firm with expertise in reservoir management that the City and nearby residents retained in 1998 to make recommendations on SJR design and operation that would avoid any odor or aesthetic problems. Mr. Matthews talked to IRWD staff and told us that IRWD's proposal — as memorialized in the proposed MOU — is sound and should protect area residents from any problems associated with the Reservoir's operations. We are especially pleased with IRWD's commitment to retain no less than 500 acre- feet of water in SJR (pool elevation 400') — a commitment that will help ensure good water quality and a year-round blue water view. Mr. Matthews will be available at the Council meeting on 2-27 to answer any questions about his review of the SJR's proposed design and operation. Where We Are Today. IRWD has purchased ownership rights to the reservoir from all eight owners except Newport Beach. On December 18, 2000, IRWD adopted the MND for the Project. On January 9, 2001, Newport Beach, as a responsible agency under CEQA, complied with our CEQA obligations by considering (and deciding against) litigation as to the MND's adequacy. As noted, DTB filed suit against IRWD and the City on January 17, 2001, alleging that CEQA requires a full EIR for the SJR conversion project. The lawsuit asks (among other things): • That the parties complete an EIR; • That the court issue a restraining order stopping "further implementation of the Project..."; and • For DTB's attorney's fees & costs of the proceeding. Staff has reviewed DTB's allegations (which are similar to those raised by EQAC). We believe that the MOU addresses any concern of EQAC and DTB that the MND did not clearly identify all of the mitigation measures necessary to protect residences around SJR from potential odor and related problems. We do not agree with EQAC and DTB in alleging that "growth -inducing impacts" of the conversion must be addressed in any environmental document. We consulted with Shute Mihaly and Weinberger (SMW) — a nationally recognized environmental and land use law firm that specializes in representing environmental organizations — regarding this issue AND regarding the benefits to the City of litigating the adequacy of the MND. SMW concluded that litigation — even litigation that forced preparation of an EIR for the Project- would not help the City achieve any of its objectives. They agreed with staff's position that litigation would potentially delay conversion of SJR and potentially increase the potential for reclaimed water discharges. Collective Defense Agreement. As noted, the City is a named defendant in the DTB lawsuit. IRWD has offered to coordinate the Reservoir owners' defense of DTB's lawsuit via a collective defense agreement (CDA) and has asked if the City is interested in participating in this CDA. Under the proposed CDA, IRWD would cover all defense costs and would use IRWD's existing contract law firm — Bowie, Arneson, Wiles, and Giannone — to provide the collective representation. \ SJR Conversion Staff Report February 27, 2001 Page 6 WHERE TO FIND Additional background information is available from several earlier staff reports OUT MORE: (available on the City's website at www.city newport-beach.ca.us). The following Council meetings contained discussions about the SJR: • September 29, 2000 • October 24, 2000 • January 23, 2001 THIS AGENDA This Agenda Item asks the Council to adopt a resolution re -affirming the City's ITEM: faith in and obligations under BIRPA. It authorizes the Mayor to enter into the MOU establishing the SJR's operating protocols. It authorizes the City Manager to execute all documents associated with the sale of the Reservoir to IRWD and to enter into a collective defense agreement associated with the DTB lawsuit. ATTACHMENTS: Attachment A — Resolution 2001-_ relating to BIRPA Attachment B — IRWD's Reclaimed Water System Graphic Attachment C — Proposed MOU (SJR Operating Criteria) Attachment D — Proposed Collective Defense Agreement ATTACHMENT A SJR Conversion Staff Report February 27, 2001 Page 7 RESOLUTION 2001- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH RELATING TO RECLAIMED WATER, THE SAN JOAQUIN RESERVOIR, AND THE BASIC INTEGRATED RE -USE PROJECT AGREEMENT (BIRPA) WHEREAS, the City of Newport Beach opposes the discharge of reclaimed water into San Diego Creek and Newport Bay unless large storm events dictate that such discharges are essential under an existing National Pollutant Discharge Elimination System (NPDES) Order (#94-22); and WHEREAS, in the mid-1990s, the Irvine Ranch Water District (IRWD) proposed the Wetlands Water Supply Project (WWSP) which proposed discharging reclaimed water into San Diego Creek after the reclaimed water had traveled through wetlands near the IRWD's Michelson Wastewater Reclamation Plant (MWRP); and WHEREAS, the City opposed the WWSP; and WHEREAS, in order to achieve the WWSP's objectives without the discharge of reclaimed water into San Diego Creek, the City worked with IRWD, the Orange County Water District (OCWD), area end-users like the Big Canyon Country Club and the Eastbluff Community Association to provide additional markets for reclaimed water during wet winter months; and WHEREAS, these efforts brought about the development and July 17, 1996 execution of the Basic Integrated Re -Use Project Agreement (BIRPA), which outlined the responsibilities of the IRWD, the City, and the OCWD associated with addressing excess reclaimed water supply during winter months; and WHEREAS, BIRPA envisioned a series of actions relating to end user agreements, pipeline construction, and related activities that would lead to a "long-term no discharge scenario" which envisioned a period of time (through 2011) where no reclaimed water would need to be discharged into the Creek as long as each action was attained; and WHEREAS, BIRPA directed all parties to use their "best efforts" to complete each action and therefore attain this no -discharge scenario; and WHEREAS, IRWD has proposed converting the San Joaquin Reservoir into a reclaimed water storage facility to store excess wintertime reclaimed water ("Project") and has completed and, on December 18, 2000 adopted, a mitigated negative declaration under the California Environmental Quality Act (CEQA) associated with this Project; and WHEREAS, the City, as a responsible agency under CEQA, reviewed the Project's mitigated negative declaration and, by virtue of not challenging the document within 30 days, has fulfilled its obligations as a responsible agency under CEQA; and WHEREAS, the City's willingness to consent to IRWD's plans to convert the San Joaquin Reservoir to a reclaimed water storage facility is consistent with the City's use of its "best efforts" to continue the no - discharge scenario; now, therefore be it SJR Conversion Staff Report February 27, 2001 Page 8 RESOLVED by the City Council of the City of Newport Beach that it hereby reaffirms and supports the July 17, 1996 Basic Integrated Re -Use Project Agreement (BIRPA) by consenting to the transfer of the San Joaquin Reservoir to the Irvine Ranch Water District for a reclaimed water storage facility; and be it also RESOLVED by the City Council of the City of Newport Beach that it hereby finds and declares that all parties to BIRPA have met their obligations under BIRPA and therefore the "long-term no -discharge scenario" envisioned by BIRPA is in effect; and be it also RESOLVED by the City Council of the City of Newport Beach that, if any discharge beyond what is permitted as of the date of this Resolution occurs, it hereby authorizes City staff to protect and defend BIRPA's "long-term no discharge scenario" by bringing before the Council an action which authorizes litigation against the discharger. ADOPTED this 27th day of February, 2001 Garold Adams MAYOR ATTEST: LaVonne Harkless CITY CLERK ATTACHMENT B RATTLESNAKE CANYON RESERVOIR Capacity = 700 acre feet (about 1.5 MGD) Status = In use for Reclaimed Water Storage Location = North of Irvine, east of Tustin/Orange MICHELSON WATER RECLAMATION PLANT (MWRP) RW Production Capacity= 18 MGD (mlllion gallonstday) RW Capacity at Buildout = 27 to 33 MGD During wintertime, IRWD has more RW than It can sell, so It: -- Produces only about 15 MGD -- Sells up to 5 MGD to area users -- Puts 4.6 MDG to 7.8 MGD Into GAP II/Intertle (see EIRP) -- Stores up to 3.5 MGD In Sand Canyon and Rattlesnake Cyn. This leaves an excess of from —0- MGD to 1.9 MGD today. The San Joaquin Reservoir can hold from 7-10 MGD or 3,000 of r' SJR Conversion Staff Report February 27, 2001 Page 9 SAND CANYON RESERVOIR Capacity = 900 acre feet. Set at 200 of at end of dry season (-0- MGD when full) Status = In use for Reclaimed Water Storage (mix w/ralnfall) -- Has a watershed that causes It to overflow In certain storm events. -- Releases excess water Into Sand Canyon Wash (which enters San Diego Creek) according to provisions of Order 94-22. — Located near Michelson and University at Strawberry Farms Golf Course. 1\�,� A-Ircallow Upper Newport Bay GAP II Pipe (part of BIRPj BASIC INTEGRATED RE -USE PROJECT AGREEMENT(BIRPA) Term = 1996 to 2011 Parties are City, IRWD, and OCWD. -- GAP If. Connects OCWD to City of NB with a 7.8 MGD pipe -- Intertle. Connects MWRP to GAP II with a 7.8 MGD pipe. -- OCWD agrees to accept 4.6 - 7.8 MGD from 10/1 to 3/31 of each year through 2011 if: • GAP II and Intertle completed; • OCSD accepts at least 4.2 MGD from 10/1 to 3/31; -- City commits to obtain "end-user agreements" (Big Cyn CC, NBCC) plus contributes $500K to Intertle/GAP II pipes. -- Long -Term No -Discharge Scenario. IRWD and City agree to use "best efforts" to agree on ways to achieve BIRP objectives without any discharge of RW. , In -Creek (Reduces _ ORDER 94-22 Intertie Pipe Issued by the Regional Board as a part of (p art Of BIRPA IRWD's National Pollutant Discharge O_ Elimination Permit (NPDES). Applies to IRWD's RW system. io -- Allows discharge out of Sand Canyon during 25 -year storm event (5" of rain) over a 7 -day period. VIN, -- Order has expired, but IRWD tried to 1 ?O\� `1A renew it Regional Board needs to update Basin Plan before Regional Board will consider a renewal. BONITA CYNNrr9 - CARESERVOIRNY INEX. RW PIPE PROP. RW PIPE \ `` Node: Pa,tioo, o(Nv oap arc coM+�a�d vd eepadicsd ��P��..�e.�dby THOMAS egos MAPS SAN JOAQUIN RESERVVIR SAN JOAQUIN RESERVOIR Capacity = 2,500 of useable, 3,000 of ultimate capacity Status = Empty -- No watershed (unlike Sand Canyon), therefore no overflow and no need to discharge. •- City owns 1.18% of the Reservoir along with seven other owners (IRWD, MWD, City of Huntington Beach, Laguna Beach County Water District, South Coast Water District, and The Irvine Company) -- Would more than triple IRWD's RW wintertime storage capacity (from 900 a.f. to 3,400 a.f. If SJ Reservoir on-line). C� ATTACHMENT C SJR Conversion Staff Report February 27, 2001 Page 10 MEMORANDUM OF UNDERSTANDING REGARDING OPERATING CRITERIA FOR SAN JOAQUIN RECLAIMED WATER STORAGE RESERVOIR This Memorandum of Understanding ("MOU") is made and entered into this day of 2001, by and between the IRVINE RANCH WATER DISTRICT ("IRWD") and the CITY OF NEWPORT BEACH (the "City'). WITNESSETH: WHEREAS, IRWD and the City, along with other parties, as owners of interests in the San Joaquin Reservoir ("Reservoir"), have entered into, or intend to enter into subject to execution by any of the parties thereto which have not yet signed, an agreement providing for the sale to IRWD by such owners of all of their respective undivided ownership and capacity interests and all of their rights, title and interest in and to the Reservoir ("Sale Agreement'); and WHEREAS, IRWD has approved a project for the conversion of the Reservoir to reclaimed water storage and in conjunction with such approval, has prepared and certified a mitigated negative declaration and adopted a mitigation and monitoring program pursuant to the California Environmental Quality Act (CEQA) (collectively, the "CEQA Documents"); and WHEREAS, the Reservoir will be designed for seasonal storage of up to 2,500 acre feet of non - potable water, including reclaimed water produced by IRWD at its Michelson Wastewater Reclamation Plant in accordance with State of California requirements for tertiary treated reclaimed water ("reclaimed water"); and SIR Conversion Staff Report February 27, 2001 Page 11 • WHEREAS, City and IRWD desire to further clarify the intended manner and timing of implementation of certain design and operational features referred to in the CEQA documents, with the goal of assuring optimum operation, avoiding complaints by surrounding residents and providing prompt attention and resolution of any complaints that might occur. NOW, THEREFORE, in consideration of the circumstances as recited above and mutual covenants and conditions set forth herein, the parties to this MOU do hereby set forth their mutual understanding as follows: Design and Operation of the Reservoir. IRWD agrees and confirms that pursuant to the CEQA Documents, it will: a. Install an aeration system in the Reservoir; • b. Install a downstream collection system at the toe of the Reservoir dam, to collect Reservoir subdrainage flow. Reservoir subdrainage flow consists of subdrainage from the Reservoir and drainage from adjacent properties ( "subdrainage "). C. Retain a qualified biologist to monitor the condition of downstream riparian habitat, and determine and make appropriate subdrainage flow releases to preserve such habitat; d. Operate a water disbursement system in the Reservoir to ensure appropriate Reservoir mixing and turnover; e. Monitor the Reservoir for algae, odors, and other undesirable conditions consistent with the CEQA Documents, and coordinate with the CITY on the implementation of remedial actions; f. Observe California Division of Safety of Dams (DSOD) drawdown criteria and maintain a minimum pool elevation of 400 feet; g. Maintain an information telephone number for homeowners to inform IRWD of any concerns about the Reservoir operation; h. Not release reclaimed water stored in the Reservoir, other than into the IRWD reclaimed water system, except in the case of an emergency affecting life or property. • 2. City Cooperation. The City agrees that concurrently with execution of this MOU, it will execute and deliver the Sale Agreement to IRWD in substantially the form of the draft existing on the date SIR Conversion Staff Report February 27, 2001 Page 12 hereof. The City further agrees that it will publicly support the necessity of using the Reservoir to maximize • the benefit of seasonal and operational storage of reclaimed water, which will include, without limitation, annual fill and drawdown, periodic draining of the Reservoir for cleaning, and storage and utilization of chlorine, subject to and pursuant to the CEQA Documents. 3. Remedies. (a) IRWD will meet and confer with adjacent interested homeowners annually for the first five (5) years of operation of the Reservoir to verify compliance with the CEQA Documents and the foregoing requirements and address any issues. (b) IRWD will also meet and confer with the City annually if the City so requests, to verify compliance with the CEQA Documents and the foregoing requirements and address any issues. The parties agree to exert their best efforts to reach a good -faith resolution as to the appropriate manner of remedying any asserted noncompliance or issue. Should the meet and confer process be unsuccessful, the parties retain all rights at law or in equity with reference to such noncompliance or issue. • 4. Counterparts. This MOU may be executed in one or more counterparts. Each will be deemed an original and all, taken together, will constitute one and the same instrument. 5. Notices. Any notice, request, demand, consent, approval or other communication required or permitted hereunder or by law shall be validly given or made only if in writing and delivered in person or seventy -two (72) hours after deposit in the United States mail, duly certified or registered (return receipt requested), postage prepaid, and delivered (in the case of personal delivery) or addressed (in the case of mail delivery) to the party for whom intended, as follows: If to IRWD: IRVINE RANCH WATER DISTRICT 15600 Sand Canyon Avenue P.O. Box 57000 Irvine, CA 92619 -7000 Attention: General Manager • SIR Conversion Staff Report February 27, 2001 Page 13 • If to the City: CITY OF NEWPORT BEACH 3300 Newport Boulevard P.O. Box 1768 Newport Beach, CA 92658 Attention: City Manager Either party may substitute a different address for its above - stated address by giving written notice to the other in the manner herein provided. 6. Effective Date. The effectiveness of this MOU shall be subject to the execution and delivery of the Sale Agreement by all parties thereto. The effective date of the MOU shall be the dated date of the Sale Agreement. Entire Aqreement. This MOU constitutes the entire agreement between the parties concerning the subject matter hereof. All prior agreements, representations, negotiations and understandings • of the parties are superseded and merged in this MOU. This MOU shall be amended only in writing executed by both parties. 8. No Third Partv Beneficiaries. Nothing in this MOU is intended or shall be construed to give any person, other than the parties and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this MOU or any provision hereof, this MOU and each condition and provision hereof being intended to be for the sole and exclusive benefit of the parties and their respective successors and assigns, and for the benefit of no other person. SIR Conversion Staff Report February 27, 2001 Page 14 IN WITNESS WHEREOF, the parties hereto have executed this MOU the day and year first written above. APPROVED AS TO FORM: City Attorney APPROVED AS TO FORM: CITY OF NEWPORT BEACH By Mayor By City Clerk (SEAL) IRVINE RANCH WATER DISTRICT By President By Secretary (SEAL) • • Counsel for IRWD • 72141/020901 SIR Conversion Staff Report February 27, 2001 ATTACHMENT D Page 15 0 DRAFT COLLECTIVE DEFENSE AGREEMENT This Collective Defense Agreement ( "Agreement ") is made and entered into as of this day of 2001, by and among the IRVINE RANCH WATER DISTRICT, a California water district formed and existing pursuant to the California Water District Law ( "IRWD "), and any of the following listed parties who have executed both this Agreement and that certain agreement entitled "AGREEMENT FOR SALE OF SAN JOAQUIN RESERVOIR CAPACITY RIGHTS AND UNDIVIDED REAL PROPERTY INTERESTS AND TERMINATION OF TRUST AGREEMENT" in substantially the form attached hereto as Exhibit "A" ( "Sale Agreement'), unless the execution of the Sale Agreement has been enjoined or stayed by a court of appropriate jurisdiction and such injunction or stay remains in effect (collectively, "Sellers "): THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA ( "METROPOLITAN" herein), • organized and existing pursuant to the Metropolitan Water District Act (Slats. 1969, Ch. 209, as amended); u CITY OF HUNTINGTON BEACH ( "HUNTINGTON BEACH" herein), a municipal corporation of the State of California; CITY OF NEWPORT BEACH ( "NEWPORT BEACH" herein), a municipal corporation of the State of California; MESA CONSOLIDATED WATER DISTRICT ( "MESA" herein), organized, aad existing and operating pursuant to the Costa Mesa Merger Law (Water Code §33200 et seq.) and the County Water District Law (Water Code §30000 et seq.); LAGUNA BEACH COUNTY WATER DISTRICT ( "LAGUNA" herein), organized and existing pursuant to the County Water District Law (Water Code §30000 et seq.); SOUTH COAST WATER DISTRICT ( "SOUTH COAST" herein), organized and existing pursuant to the County Water District Law (Water Code §30000 et seq.) (successor to South Coast County Water District); and THE IRVINE COMPANY ('TIC" herein), a Delaware corporation (successor in interest to The Irvine Company, a Michigan corporation, successor in interest to The Irvine Company, a West Virginia corporation); RECITALS: SIR Conversion Staff Report February 27, 2001 Page 16 0 A. IRWD and the Sellers, as owners of interests in the San Joaquin Reservoir (`Reservoir"), have entered into, or have executed, iRtPRd ' eF We subject to execution by any of the parties thereto which have not yet signed, the Sale Agreement, providing for the sale to IRWD by the Sellers of all of their respective undivided ownership and capacity interests and all of their rights, title and interest in and to the Reservoir. B. On December 18, 2000, IRWD approved the execution of the Sale Agreement, approved a project to convert the Reservoir to a reclaimed water storage reservoir and adopted certain proceedings relating to such approvals under the California Environmental Quality Act (CEQA). C. On or about January 22, 2001, a petition for writ of mandate and complaint for declaratory and injunctive relief was filed in the Superior Court entitled DEFEND THE BAY, Petitioner and Plaintiff, v. IRVINE RANCH WATER DISTRICT et al., Respondents and Defendants, and MESA CONSOLIDATED WATER DISTRICT; METROPOLITAN WATER DISTRICT, CITY OF HUNTINGTON BEACH; LAGUNA • BEACH COUNTY WATER DISTRICT; THE IRVINE COMPANY; SOUTH COAST WATER DISTRICT; CITY OF NEWPORT BEACH, et al., Real Parties in Interest, Case Number OCSC 01CC01034 (the "Action "). The Action seeks review of the above - described approvals on the grounds of noncompliance with CEQA. D. The parties signatory to this Agreement acknowledge that they have a common interest in completing the transaction for the sale of the Reservoir and a common interest in defending the Action. The Sellers signatory to this Agreement have a common interest in avoiding or minimizing the expense of defending the Action. The signatory parties are not aware of a basis for a conflict of interest in participating in a collective defense of the Action. E. The parties signatory to the Agreement have considered their potential individual exposure, defense costs and other matters and have concluded that it is in their individual best interests to enter into this Agreement for the collective defense of the Action. • SIR Conversion Staff Report February 27, 2001 Page 17 • NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and covenants hereinafter set forth, DO AGREE AS FOLLOWS: SECTION 1. Additional Parties. The parties hereto agree that any entity listed as a prospective Seller above, who has not signed this Agreement, may become a party hereto by executing this Agreement and, unless precluded as described in the preamble to this Agreement, by executing the Sale Agreement. SECTION 2. Confidentiality. Each of the parties hereto agrees to maintain in strict confidence any nonpublic information, including, but not limited to, any information related to this Agreement and protected by the work product or attorney - client privileges, it receives in any form relating to the subject matter of this Agreement or the Action. Each of the parties desires to maintain all information distributed to and among the parties and the parties and counsel as confidential and protected by the attorney - client and official information • privileges. SECTION 3. Defense. IRW D agrees to defend each party who has become a "Seller" in the manner described hereinabove, in the Action, including any appeal thereof or any related actions filed with respect to additional CEQA proceedings taken by IRW D if the same are ordered in the Action. IRW D shall have the right to determine the theories on which it will provide the defense of the Action, to pursue or not pursue any substantive or procedural matter in the Action, including any appeal thereof or any related actions filed with respect to additional CEQA proceedings taken by IRWD that may be ordered in the Action, and to approve or not approve any settlement of the Action. The foregoing notwithstanding,-any party shall have the right to withdraw from this Agreement, at any time and for any reason, and, in that event, the withdrawing party shall no longer be included in the collective defense. SECTION 4. Costs and Expenses. All costs and expenses related to this defense, • including the expense of satisfying or complying with any relief ordered against Sellers in the Action, and any attorneys' fees incurred by IRW D in the legal representation of Sellers pursuant to this Agreement, shall be SIR Conversion Staff Report February 27, 2001 Page 18 paid by IRW D. IRW D shall also bear all costs and expenses of preparing any additional CEQA • documentation that may be required pursuant to the Action. SECTION 5. Legal Counsel. The parties hereto recognize and acknowledge that the law firm of Bowie, Arneson, Wiles & Giannone has been retained by IRW D to provide the collective representation under this Agreement. The parties further acknowledge that under the rules of professional conduct of attorneys, counsel may not represent two or more parties whose interests conflict or are adverse or may become adverse, without the consent of each such party. Each of the parties hereto hereby expressly represents that it has made such investigation of potential conflicts of interest and sought such independent legal advice as it deems necessary in order to make an informed decision concerning any actual or potential adverse effects of joint representation of it by counsel retained by IRW D. Each of the parties hereto expressly consents to its representation by legal counsel designated by IRW D. In giving such consent, each of the parties acknowledges and understands that counsel retained by IRW D to provide the collective defense may have • represented, or may currently or in the future represent, IRW D or other parties with interests adverse to such consenting party's interests in other matters not involved in the Action. Each of the parties hereby further agrees and consents to the continued representation by said legal counsel designated by IRW D notwithstanding such party's withdrawal pursuant to Section 3 hereof, and hereby waives any right to disqualify said counsel from continuing to provide the collective defense for the remaining parties. This consent is conditioned upon IRWD's reasonable efforts to keep counsel designated by the signatory parties sufficiently informed to enable such counsel to advise their respective client signatory parties regarding the existence and scope of any conflicts of interest that may arise among signatory parties. SECTION 6. Execution. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. Each signing party has caused this Agreement to be executed on its behalf by its duly authorized officers and represents and warrants that the officers so executing have been duly authorized to enter into this Agreement on behalf • of the party for whom they execute. This Agreement shall be effective as of the date when it has been signed SIR Conversion Staff Report February 27, 2001 Page 19 by IRW D and any one or more of the other parties listed in the preamble hereof who have also executed the Sale Agreement unless execution of the Sale Agreement is precluded in the manner described in said preamble. IN WITNESS WHEREOF, the parties have executed this Agreement. IRVINE RANCH WATER DISTRICT By President By Secretary APPROVED AS TO FORM: • (SEAL) Counsel for IRWD �J APPROVED AS TO FORM: City Attorney CITY OF NEWPORT BEACH By Mayor By City Clerk (SEAL) SIR Conversion Staff Report February 27, 2001 Page 20 • Agenda Item #_15 CITY OF NEWPORT BEACH MEMORANDUM TO: Mayor Adams and Members of the City Council FROM: Dave Kiff, Deputy City Manager DATE: February 23, 2001 RE: Supplement to San Joaquin Reservoir (SJR) Agenda Item ( #_) 1- Proposed Revisions to Memorandum of Understanding 2 — Proposed Revision to Resolution 2001 -_ 3 — Comments on EQAC's Role in the SJR Mitigated Negative Declaration 1- Proposed Revisions to MOU. City Attorney Burnham and I met with IRWD staff on Tuesday regarding the San Joaquin Reservoir Operating Criteria MOU that was included in your packet on Wednesday. As a result of that meeting, IRWD has agreed to add the following to the MOU: - A provision that only Reclaimed Water that meets California Title 22 Standards can be stored in the SJR (along with groundwater). - A provision that allows IRWD and the City to seek 3rd Party Review of any dispute relating to operating criteria after a meet and confer; - The City's entitlement of specific performance as to IRWD's installation of an aeration system and the Reservoir's minimum pool elevation (400'). We believe that these changes are important additions to the MOU and have integrated them into the Revised MOU attached to this memo. 2 - Proposed Revision to Resolution 2001 -_. As you will see by reading the proposed Resolution in your Wednesday packet (A RESOLUTION... RELATING TO RECLAIMED WATER, THE SAN JOAQUIN RESERVOIR, AND THE BASIC INTEGRATED RE -USE PROJECT AGREEMENT...), three "Resolveds" complete the Resolution. The final "Resolved" refers to actions that the City Council might take to protect and enforce the Basic Integrated Re -Use Project Agreement (BIRPA). After discussing the 3m "Resolved" with Dr. Jack Skinner and Council Member Bromberg, both Dr. Skinner and Council Member Bromberg endorsed stronger language for this 3m "Resolved." City Attorney Burnham has reviewed the suggestion and supports it. As such, your Council will be asked to make the following changes on Tuesday night to the proposed Resolution: To STRIKE OUT the 3m "Resolved" which reads: RESOLVED by t4e disel!ar-ge beyead _. pem-iitted as of the date of this n,...slut o;; , it L..__i y i -1ach ...:zes br-inging befere the Geand!ia htigatien the ,7:,...1.....,.,.. aet}„n Guth agak:Bt And to INSERT the following "Resolved" in its place: RESOLVED by the City Council of the City of Newport Beach that it shall be a standing policy of the Council that any action by my My of BIRPA to discharge legal action sponsored, funded, and supported by the City. 3 - Comments from EQAC on the Mitigated Negative Declaration. Finally, I believe that my staff report has misrepresented EQAC's role in the review of the Mitigated Negative Declaration (MND). EQAC spent a great deal of time working on the MND - many of EQAC's suggestions were, in fact, the basis of the Operating Criteria MOU. Further, on October 24, 2000, your City Council did adopt EQAC's comments (including EQAC's suggestion that IRWD pursue a full Environmental Impact Report) as the City's comments. And while your City Council ultimately decided not to challenge IRWD's decision to prepare an MND, that did not negate the sincerity of the EQAC /City comments on the Reservoir's conversion. Attachment Revised MOU MEMORANDUM OF UNDERSTANDING REGARDING OPERATING CRITERIA FOR SAN JOAQUIN RECLAIMED WATER STORAGE RESERVOIR This Memorandum of Understanding ( "MOU ") is made and entered into this day of 2001, by and between the IRVINE RANCH WATER DISTRICT ( "IRWD ") and the CITY OF NEWPORT BEACH (the "City'). WITNESSETH: WHEREAS, IRWD and the City, along with other parties, as owners of interests in the San Joaquin Reservoir ( "Reservoir"), have entered into, or intend to enter into subject to execution by any of the parties thereto which have not yet signed, an agreement providing for the sale to IRWD by such owners of all of their respective undivided ownership and capacity interests and all of their rights, title and interest in and to the Reservoir ( "Sale Agreement"); and WHEREAS, IRWD has approved a project for the conversion of the Reservoir to reclaimed water storage and in conjunction with such approval, has prepared and certified a mitigated negative declaration and adopted a mitigation and monitoring program pursuant to the California Environmental Quality Act (CEQA) (collectively, the "CEQA Documents "); and WHEREAS, the Reservoir will be designed for seasonal storage of up to 2,500 acre feet of non - potable water, including reclaimed water produced by IRWD at its Michelson Wastewater Reclamation Plant in accordance with State of California requirements, specified in Title 22 of the Code of Administrative Regulations, for tertiary treated reclaimed water ( "reclaimed water"); and WHEREAS, City and IRWD desire to further clarify the intended manner and timing of implementation of certain design and operational features referred to in the CEQA documents, with the goal of assuring optimum operation, avoiding complaints by surrounding residents and providing prompt attention and resolution of any complaints that might occur. NOW, THEREFORE, in consideration of the circumstances as recited above and mutual covenants and conditions set forth herein, the parties to this MOU do hereby set forth their mutual understanding as follows: Desiqn and Operation of the Reservoir. IRWD agrees and confirms that pursuant to the CEQA Documents, it will: a. Install an aeration system in the Reservoir, to maintain dissolved oxygen levels within the stored water as described in the CEQA Documents; b. Install a downstream collection system at the toe of the Reservoir dam, to collect Reservoir subdrainage flow. Reservoir subdrainage flow consists of subdrainage from the Reservoir and drainage from adjacent properties ( "subdrainage "). C. Retain a qualified biologist to monitor the condition of downstream riparian habitat, and determine and make appropriate subdrainage flow releases to preserve such habitat; d. Operate a water disbursement system in the Reservoir to ensure appropriate Reservoir mixing and turnover; e. Monitor the Reservoir for algae, odors, and other undesirable conditions consistent with the CEQA Documents, and coordinate with the CITY on the implementation of remedial actions; f. Observe California Division of Safety of Dams (DSOD) drawdown criteria and maintain a minimum pool elevation of 400 feet; g. Maintain an information telephone number for homeowners to inform IRWD of any concerns about the Reservoir operation; h. Not release reclaimed water stored in the Reservoir, other than into the IRWD reclaimed water system, except in the case of an emergency affecting life or property. 2. City Cooperation. The City agrees that concurrently with execution of this MOU, it will execute and deliver the Sale Agreement to IRWD in substantially the form of the draft existing on the date hereof. The City further agrees that it will publicly support the necessity of using the Reservoir to maximize the benefit of seasonal and operational storage of reclaimed water, which will include, without limitation, annual fill and drawdown, periodic draining of the Reservoir for cleaning, and storage and utilization of chlorine, subject to and pursuant to the CEQA Documents. 3. Remedies. (a) IRWD will meet and confer with adjacent interested homeowners annually for the first five (5) years of operation of the Reservoir to verify compliance with the CEQA Documents and the foregoing requirements and address any issues. (b) IRWD will also meet and confer with the City annually if the City so requests, to verify compliance with the CEQA Documents and the foregoing requirements and address any issues. The parties agree to exert their best efforts to reach a good -faith resolution as to the appropriate manner of remedying any asserted noncompliance or issue. As part of the meet and confer process, the parties will consider retaining a mutually acceptable third party expert to render factual findings, opinions and /or recommendations as requested. Should the meet and confer process be unsuccessful, the parties retain all rights at law or in equity with reference to such noncompliance or issue. (c) The parties agree that City has no adequate remedy at law for the breach of the obligations set forth in Sections 1(a) and 1(f) hereof, and that City shall be entitled to speck performance thereof except as prohibited by law. 4. Counterparts. This MOU may be executed in one or more counterparts. Each will be deemed an original and all, taken together, will constitute one and the same instrument. 5. Notices. Any notice, request, demand, consent, approval or other communication required or permitted hereunder or by law shall be validly given or made only if in writing and delivered in person or seventy -two (72) hours after deposit in the United States mail, duly certified or registered (return receipt requested), postage prepaid, and delivered (in the case of personal delivery) or addressed (in the case of mail delivery) to the party for whom intended, as follows: If to IRWD: IRVINE RANCH WATER DISTRICT 15600 Sand Canyon Avenue P.O. Box 57000 Irvine, CA 92619 -7000 Attention: General Manager If to the City: CITY OF NEWPORT BEACH 3300 Newport Boulevard P.O. Box 1768 Newport Beach, CA 92659 -1768 Attention: City Manager Either party may substitute a different address for its above - stated address by giving written notice to the other in the manner herein provided. 6. Effective Date. The effectiveness of this MOU shall be subject to the execution and delivery of the Sale Agreement by all parties thereto. The effective date of the MOU shall be the dated date of the Sale Agreement. Entire Agreement. This MOU constitutes the entire agreement between the parties concerning the subject matter hereof. All prior agreements, representations, negotiations and understandings of the parties are superseded and merged in this MOU. This MOU shall be amended only in writing executed by both parties. 8. blo Third Party Beneficiaries. Nothing in this MOU is intended or shall be construed to give any person, other than the parties and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this MOU or any provision hereof, this MOU and each condition and provision hereof being intended to be for the sole and exclusive benefit of the parties and their respective successors and assigns, and for the benefit of no other person. IN WITNESS WHEREOF, the parties hereto have executed this MOU the day and year first written above. CITY OF NEWPORT BEACH M M APPROVED AS TO FORM: Robert Burnham, City Attorney Garold Adams, Mayor LaVonne Harkless, City Clerk (SEAL) IRVINE RANCH WATER DISTRICT By By APPROVED AS TO FORM: Counsel for IRWD 72141 President Secretary (SEAL) y FES-26 -01 05:24 PM Orange Co. Coast Keererll 9496757091 P.02 ORANGE COUNTY COASTKrCPBR 441 Old Newport Blvd. Suite 103 Newport Beach, California 92663 Office: (949) 723 -5424 Fax: (949) 675 -7091 Email: coastkeeperl @earthiink.net http://www.coastkeeper.org _.,P al) ARE AGEHA =L:° _A� 15 1 DI _ February 26, 2001 Mayor and City Council Members City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 RE: San Joaquin Reservoir for reclaimed water storage Dear Members of the City Council The Orange County CoastKeeper has previously gone on record In supporting the plan to include the San Joaquin Reservoir to the Irvine Ranch Water District's reclaimed water system. By using the reservoir for the winter storage of reclaimed water, thus almost tripling the storage capacity, the plan reduces the likelihood of discharges Into the upper bay beyond what Is allowed under the current NPDES order 94 -22. we endorse the ultimate "long -term no discharge scenario" of reclaimed water Into San Diego Creek. Since reclaimed water has a beneficial use and water is a limited resource, the concept of storing excess supply in winter for use In hotter summer months only makes sense. We would hope that in time, the City and the District take whatever actions are practicable to Increase the year -round demand for reclaimed water within the respective service areas. In reviewing the proposed resolution, precautions are included that would ensure that residents In dose proximity to the reservoir are protected from associated problems, such as odors and algae that are Identified In the Mltlgated Negative Declaration. It I5 Important that the City state In the strongest language possible that it Is ready to enforce through litigation, If necessary, the policy of no- discharge beyond what Is currently permitted. The proposed resolution also reaffirms this policy to the Irvine Ranch Water District. Fee -26 -2001 17:02 93% ° n' F`EB -26 -01 05:25 PM Orange Co. Coast Keer+erll 9496757091 P.03 There are many challenges ahead to stem the tide on storm -water and urban runoff related pollution Issues. Some are much more difficult than others to solve. This appears to be an effective and timely solution. Your action to approve the resolution Is most appreciated. J n, K irector FES -26 -2001 17:02 93Y P.03 FEB 27 01 (TUE) 16 50 JOHNSON A. EDWARDS Transmitted on: Pages: To: Telecopier No.: Document(s): From: Client/File: Our File No: Operator: Message: 6i9 FACE: 1/6 "1"TECcI1I B Arm B JOHNSON 8r EDWARDS LLP A REGISTERED LIMITED LIABILITY PARTNERSHIP R E n V E' V E D INCLUDING A PROFESSIONAL LAW CORPORATION ATTORNEYS AT LAW 402 WEST BROADWAY, SUITE 1 140 � SAN DIEGO, CALIFORNIA 02 10 1 -85 1 3 *01 FEB 27 P5:18 TELEPHONE (61 0) 606-621 1 TELECOPIER (6 101 606 -75 16 OFFICE OF THE CITY CLERK CITY OF VVE IPORT BEACH TEL1~COPIER TRANSMISSION FORM February 27, 2001 6 (includes cover page) Mayor Gary A. Adams and City Council Members City of Newport Beach (949) 644 -3039 February 27, 2001 correspondence Kevin K. Johnson Johnson & Edwards LLP Defend the Bay -- San Joaquin Reservoir Project DEF.467 Kathy ORIGINAL TO FOLLOW BY MAIL X_ ORIGINAL WILL NOT FOLLOW BY MAIL PLEASE CONFIRM RECEIPT OF TH15 TRANSM155ION VIA TELEPHONE: YES NO ATTENTION: '' NOTICE* ' THE INFORMATION CONTAINED IN THIS FACSIMILE MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDMDUAL NAMED ABOVE AND THE PRIVILEGES ARE NOT WAIVED BY VIRTUE OF THIS HAVING BEEN SENT BY FACSIMILE, IF THE PERSON ACTUALLY RECEIVING THIS FACSIMILE OR ANY OTHER READER OF THE FACSIMILE IS NOT THE NAMED RECIPIENT OR THE EMPLOYEE OR AGENT RESPONSIBLE TO DELIVER R TO THE NAMED RECIPIENT, ANY USE, DISSEMINATION, DISTRIBUTION OR COPYING OF THE COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR. PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE AND RETURN THE ORIGINAL MESSAGE TO US AT THE ABOVE ADDRE33 VIA THE U.S. POSTAL SERVICE. FEB 27 '01 (TUE) 16 50 JOHNSON & EDWARDS 619 696 7516 PACE 2/6 XEVINY JOHNSON' JOHN EDWARDS DAVID D. CROSS HEiDI E. BROWN JEANNRL4 M.eKTNNON 1AREO R HANSON 1 •n�11M[.II4MKNw' LONdUTOM 'NlOilpMfl ®gNIDUNn JOHNSON & EDWARDS LLP A REGISTERED LIMITED LIABILITY PARTNERSHIP INCLUDING A PROFESSIONAL LAW CORPORATION ATTORNEYS AT LAW 402 WEST BROADWAY, SUITE 1140 SAN DIEGO. CALIFORNIA 92101 -8513 TELEPHONE (619) 696.6211 FAX (619) 696.7516 February 27, 2001 Mayor Gary A. Adams and City Council Members City of Newport Beach 3300 Newport Boulevard Newport Beach, California 92663 SACRAMENTO OFFICE 10064TH STRr=. 6TH I'LOCR SACRA ITM,CA 95514 IHLEPHONE (916) 4924435 FAX(916) 4924530 Re: San Joaquin Reservoir Project and Proposed Council Action for February 27, 2001 Ladies and Gentlemen: There are a number of observations in the Staff Report which Defend the Bay ( "DTB ") either disagrees with or feels need clarification, First, on page 2 of the report, the representation of IRNYD that overflow occurs every three to five years is not correct. DTB has previously submitted directly to the council records of overflow releases which have occurred dozens of times per year over the last several years. The representation that the reclaimed water is treated "essentially" to drinking water standards is also highly questionable, and the notion that somehow the presence of reclaimed water is "all but indistinguishable" by the time the reservoir overflows is not a representation that the City can accept without further evaluation. In fact, DTB believes that the overflows are, regardless of the dilution, an ongoing risk to the Upper Newport Bay ecosystem. One important factor with respect to impacts on the bay is the velocity of the water that runs through the creek and into the bay. if the velocity is not extremely high, it will not flush through the bay into the ocean. Accordingly, any nutrients that are left in the creek or the bay are "pollutants" in the impaired water body, GCACOAMENT6.LTR FEH 27 01 (TUE) 16 51 JOHNSON & EDWARDS 6i9 696 7516 PACE J16 Mayor Gary A. Adams and City Council Members City of Newport Beach February 27, 2001 Page 2 At page 3 of the t eport, nuddlc paragraph, there is a statement suggesting, at least indircetly, that DTB's position is that IRWD must promise to never discharge reclaimed water into the bay. This is not DTB's position. The organization has requested that any "deal" struck with IRWD must commit TRWD to operating its entire reclaimed water system to avoid discharges unless they simply cannot be avoided -- for example, in the event of a 100 year storm. We believe it obvious that IRWD will. discharge whenever they feel it is economically convenient and whenever they feel it will not obviously be found in violation of the NPDES Permit. (Order 94 -22). Also on page 3, there is a statement that any storage capacity through SJR will significantly reduce "if not eliminate" the potential for future discharges. This is a statement that is correct only in the short-term. As the-system expands and there is more demand for water, there will be less room to store runoff and, therefore, this will require a new cycle of releases. Also, at the bottom of page 3, there is a reference to an apparent "legal" observation that blocking IRWD's use of the SJR could result in invalidation ofBIRPA, No one is suggesting that the City block the use of SJR for reclaimed water. DTB is only asking that very specific and thoughtful restraints be placed upon the operation of the reservoir. The first paragraph of this resolution calls out a discharge standard which is weak, in the opinion of Defend the Bay, and unjustifiable both in terms of past operating practices and future operating practices. The current NPDES Permit standard has resulted in (as previously mentioned) dozens of discharges of reclaimed water in recent years. There is no reason to believe that IRWD cannot do better. Furthermore, it is not a satisfactory response that somehow this is the responsibility of the Regional Water Quality Control Board. it is also the responsibility of the City of Newport Beach, As a number of council members have observed in recent hearings and study group sessions, the City certainly "can do better." In addition, the last paragraph on page 8 of the Staff Report (page 2 of the Resolution), dealing with the issue of possible litigation against the discharger, should be more specific in terms of what types of circumstances the council would be prepared to react to with respect to what would actually constitute a violation of BIRPA and what would be of sufficient seriousness to justify legal action, SC.ACOMMENTS.ITR FE 07 ( ) 16 51 JOHNSON $, EDWARD6 619 696 9516 FACE 4/6 Mayor Crary A. Adams and City Council Members City of Newport Beach February 27, 2001 Page 3 M-110mil We would like to acknowledge that this Memorandum of Understanding represents some significant progress with respect to mitigating•the anticipated problems at the project. However, the document has a number of deficiencies and, most fundamentally, has "no teeth," We would recommend that a project of this size and uniqueness (remember there is no similarly sized reclamation reservoir in Southern California that we are aware of), there should be a performance bond required for this project to go forward. Please be assured that, if there are problems at this reservoir, the problems will very likely be large and expensive to correct. There needs to be a source of funds set up through a performance bond that will secure IRWD's responsibility to take care of these problems in a prompt, long -term and effective fashion. In this regard, even if there is a performance bond, there needs to be standards set as to what is and what is not acceptable for the area. Looking at the list of tasks identified at page 2 of Attachment C under paragraph 1, we have the following questions: 1. What will be the type and expected impacts of the aeration system? 2. What will be the performance Standards for the downstream collection system and how will they be monitored? Do they anticipate capturing 50% or more of the subdrainage flow? 3, Will the "qualified biologists" hired to monitor the condition of the downstream riparian habitat be working for the City of Newport Beach or for IRWD? 4. What are the standards of performance for the water distribution system and what steps will be taken if the original design is not working? 5. With respect to monitoring the reservoir, how olien will this occur and what action plan will be in place to deal with the problems? At what point will IRWD's response be considered too slow? 6. With respect to the minimum pool elevation of 400 feet, it is unclear as to how many acre feet of surface water will be visible to the neighborhood. 7. The 400 feet minimum elevation needs to be related to the surface size, which is a relatively easy calculation but does not appear anywhere as back up to the Memorandum of Understanding. 8C:1CONWENTSITR FEE 27 01 (TUE) 16 52 JOHNRON & H"WARDR 619 696 7516 PAGE 5/6 Mayor Gary A. Adams and City Council Members City of Newport Beach February 27, 2001 Page 4 8. Also, with respect to the 400 feet minimum pool elevation, it should be clear to everyone that IRWD cannot clean the bottom of the reservoir without it being empty. Accordingly, there needs to be an identification of the time period that will be necessary to, clean the bottom of the reservoir and when that cleaning will occur. Related concerns are how often IRWD predicts that cleaning will occur and what will be done if the cleaning has to occur more often, as has been suggested by experts commenting on this issue in connection with the Mitigated Negative Declaration. Consultation with neighbors and the City should be on a regular basis, meaning at least quarterly during the initial two years of operation. Thereafter, there should be evaluations continuing during the life of the operation of the reservoir, lransidoning from bi- quarterly to once annually. 9. What does it mean exactly to say that there will be no release of reclaimed water other than into the IRWD reclaimed water system except in a case of an emergency affecting life or property? To further comment on the issue of remedies, as the issue is addressed in paragraph 3 on page 3 of Attachment C, the City needs to have a very precise and expedited dispute resolution process with IRWD. In the event of a disagreement with IRWD, there should be, for example, a 60 -day arbitration provision which requires the matter to be resolved by a neutral arbitrator immediately. Our experience has been that once projects of this size, such as land fills and the like, are in place, the operators will not do anything unless they are absolutely and clearly required to do so. WOUWAOT We do want to emphasize that DTB very much appreciates the progress that has been made in terms of addressing a number of the real impact /mitigation issues associated with this unique and precedent - setting project. DTB strongly recommends, however, that additional work be done in terms of more fully defining the mitigation measures that will be taken and adopting, at the onset, performance standards which will become an objective basis for enforcement actions. Fqually important is that there be an enforceable dispute resolution mechanism which is backed up by the availability of financial resources through, for example, a sizeable performance bond. We would recommend that the bond be in the range of $1,000,000 to $10,000,000. It is unclear from our copy of the Joint Defense Agreement whether the City is giving up control of the strategic handling of the subject litigation. We would respectfully suggest that the Cily may want to maintain more flexibility in this regard depending upon the result of the litigation. For SC.=WaNTS.LTR FEB 27 '01 (TUE) 16 52 JOHNSON & EDWARDS 615 696 7516 PACE 616 Mayor Gary A. Adams and City Council Members City of Newport Beach February 27, 2001 Page 5 example, a victory by DTB might result in different remedy options for the court, and the City of Newport Beach may want to reserve the right to take a different position than IRWD. Thank you for your consideration of these very important issues. very truly yours, JOHHNSSOON' & EDWARDS LLP e� Kevin K. Johnson KKJ:kmm cc: Defend the Bay Robert Burnham, City Attorney 6C:1C0WMNTS.L1 R