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HomeMy WebLinkAboutC-3096 - Agreement (for Wetlands Water Supply Project)uc�J AGREEMENT This Agreement is entered into this 17th day of July , 1996, by and between the Orange County Water District (OCWD) , the Irvine Ranch Water District (IRWD), and the City of Newport Beach (City). A. The Parties support projects which beneficially use Reclaimed Water (for purposes of this Agreement, the term "Reclaimed Water" generally means water which fully satisfies Title 22 standards), without adversely impacting the environment and which are cost effective or have positive cost benefit ratios; B. IRWD is the proponent of the Wetlands Water Supply Project (WWSP) which consists of a two (2) year Demonstration Phase (Demonstration Phase) and a subsequent Permanent Phase (Permanent Phase). The Demonstration Phase and the Permanent Phase each contemplate a winter (October 1 through March 31) discharge of a maximum of five (5) million gallons per day (mgd) of Reclaimed Water into waterfowl ponds (Duck Ponds) for a seven (7) day detention period with subsequent discharge into San Diego Creek and a summertime San Diego Creek "low flow" diversion component; C. IRWD's implementation of WWSP will achieve the following objectives (collectively referred to as Project Objectives): 1. Provide a source of water to irrigate the Duck Ponds and marsh mitigation areas (MMA's) consistent with the WWSP Environmental Impact Report (EIR) and 1 OMD DOC. I STAR NO. 3 J /� y • • IRWD's obligations pursuant to the Grant Deed from The Irvine Company (TIC) to IRWD dated December 28th, 1995. 2. Use Reclaimed Water for beneficial purposes. 3. Reduce the amount of nutrients flowing into Newport Bay during the summer 4. Modify the amount of contributions to the County Sanitation District of Orange County ( CSDOC) to more closely correspond with actual IRWD usage of CSDOC facilities. 5. Provide data relative to water quality and existing flora and fauna in Newport Bay that would be useful to the Santa Ana Regional Water Quality Control Board (SARWQCB) in setting standards pursuant to the Clean Water Act to protect and enhance bay water quality. D. On July 1, 1996, SARWQCB approved Orders 96 -2 (the Permit) and 96 -3 which authorized IRWD to implement WWSP subject to certain conditions and restrictions, E. City has been actively seeking measures which would allow the scientific community to better evaluate the potential impacts of WWSP and alleviate concerns expressed by certain members of the public and the scientific community about possible impacts of WWSP on Newport Bay, without interfering with IRWD's ability to achieve all or substantially all of the Project Objectives; E 0 0 F. The Parties have identified a series of actions, projects, and permits (Basic Integrated Reuse Project) pursuant to which some of the Reclaimed Water otherwise used in conjunction with WWSP would be transmitted to OCWD for beneficial use or lawful disposal. G. IRWD and City have identified additional actions or projects which; if implemented, could achieve Project Objectives on an interim basis, and possibly on a permanent basis, with discharge reductions or no discharge of Reclaimed Water into San Diego Creek or Newport Bay H. The Parties desire to establish the terms and conditions pursuant to which they are willing to implement those components of the Basic Integrated Reuse Project, modify the amount of Reclaimed Water to be discharged pursuant to the Permit, establish the criteria that must be satisfied to preclude discharge of Reclaimed Water pursuant to the Permit for the period from October 1, 1996 to March 31, 1997 and to identify the additional issues that must be resolved to achieve, or possibly exceed, Project Objectives without Reclaimed Water discharges. 1. BASIC INTEGRATED REUSE PROJECT: The Basic Integrated Reuse Project consists of the components specified in this Section. The Parties shall perform in accordance with their respective obligations provided all conditions precedent have been satisfied. 3 0 • A. GREEN ACRES PHASE II (GAP 11). GAP II is a water pipeline with a nominal capacity of 7.8 mgd to be constructed from the current terminus of OCWD's "Phase I" facility to the point of intersection with the Intertie as determined in the ASL Study and then extended to Newport Beach to serve End - users. OCWD shall pay the entire cost of GAP II. OCWD shall commence the design of GAP II when City has contributed $500,000 toward End -user retrofits which will increase the cost - benefit ratio of GAP II to 1.5 or more, and shall commence construction of GAP II when City has complied with its obligation to obtain End -user Agreements; B. INTERTIE. The Intertie is a water pipeline with a nominal capacity of 7.8 mgd to be constructed between the Michelson Water Reclamation Plant (MWRP) and GAP 11. IRWD shall pay the entire cost of designing and constructing the Intertie. IRWD shall commence the design of the Intertie when City has contributed $500,000 to OCWD for GAP 11 and shall authorize OCWD to commence construction of the Intertie when City has complied with its obligation to obtain End -user Agreements. C. OCWD FLOW ACCEPTANCE COMMITMENTS. OCWD shall accept at least 4.6 mgd, and up to 7.8 mgd, of Reclaimed Water from IRWD (the additional 3.2 mgd is sometimes referred to as Excess Flows) during the period from October 1 through March 31. These commitments are subject to the following conditions: (1) Completion of GAP II and the Intertie; (2) The execution of a written agreement between CSDOC and OCWD pursuant to which CSDOC commits to accept from OCWD at least 4.2 mgd of Reclaimed M 0 9 Water during the period from October 1 through March 31 for a period of fifteen (15) years, and to pay OCWD for the Reclaimed Water at a rate per acre foot equal to OCWD's cost to treat secondary water to a tertiary standard; (3) IRWD's commitment to supply 4.6 mgd of Reclaimed Water on a continuous basis for the fifteen (15) year term of this Agreement; (4) IRWD's commitment to supply a total of 7.8 mgd of Reclaimed Water (the 4.6 mgd described in 1.C(3) and an additional 3.2 mgd) on a basis to permit peaking by OCWD up to 7.8 mgd for up to fifteen percent (15 %) of any twenty -four (24) hour period for the fifteen (15) year term of this Agreement; ( 5) IRWD's commitment to sell at least 4.6 mgd of Reclaimed Water for no more than fifty percent (50 %) of the price CSDOC pays OCWD for the Reclaimed Water and to receive no consideration for any Reclaimed Water in excess of 4.6 mgd except to the extent that OCWD receives consideration for the sale of some or all of the Excess Flows to any third party and, as appropriate, the framework for determining that consideration; (6) IRWD's commitment to resolve, in good faith, issues related to water subsidies for Reclaimed Water, and Reclaimed Water transmission rates during peak period of demand; and D. IRWD's FLOW TRANSMISSION COMMITMENTS. IRWD shall transmit at least 4.6 mgd of Reclaimed Waiter to OCWD during the period from October 1 through March 31 subject to the following: 5 0 0 (1) Completion of GAP II and the Intertie; (2) Satisfaction of the conditions precedent to OCWD's Flow Acceptance Commitments; (3) OCWD's payment for at least 4.6 mgd of Reclaimed Water at a rate not to exceed fifty percent (50 %) of the price CSDOC pays OCWD for the Reclaimed Water; E. CITY COMMITMENTS. City commits to do the following; (1) Obtain fully executed End -user Agreements with Major Purchasers of Reclaimed Water within the corporate limits of City (Big Canyon Country Club and Newport Beach Country Club are among the End -users considered to be Major Purchasers and agreements with them are essential). City shall use its best efforts to obtain these agreements on or before October 1, 1996. OCWD and City shall amend the Green Acres Agreement to allow for the sale of Reclaimed Water above the current price ceiling. (2) City shall contribute $500,000 towards End -user retrofits which will increase the cost benefit ratio of GAP II to 1.5 or more. IRWD will loan City the $500,000 at a rate of interest equal to 6.4% , with the loan to be repaid over fifteen (15) years in annual payments beginning twelve (12) months after the receipt of the loan. The loan proceeds will be available within thirty (30) days after a written request of IRWD submitted by City at any time subsequent to the effective date of this Agreement. 5 0 0 2. CONSTRUCTION OF BASIC INTEGRATED REUSE PROJECT: A. The Parties agree that OCWD will be designated as the lead agency for the construction of GAP II and the Intertie. The Parties agree to use their best efforts to ensure that GAP II and the Interne are constructed and installed on or before October 1, 1997. Toward that end, the Parties agree to do the following: (1) OCWD agrees to phase the construction of GAP II such that the initial portion of the facility to be constructed is the pipeline from the current terminus of Phase I to the point of connection with the Interne (generally at the intersection of University and Jamboree); (2) OCWD agrees to consolidate the construction of the Interne and GAP II under the same contract, with the same construction management; (3) The Parties agree to use their best efforts to expedite permit issuance, permit review, or plan check, including the assignment of personnel capable and willing to expedite, review or approve necessary plans or permits. B. City, OCWD, and IRWD each agree to pay up to one third of the cost, not to exceed $30,000 each, of retaining engineering consultant who shall act as a Project Manager to implement and coordinate the timely completion of all components of the Basic Integrated Reuse Project. • • 3. FLOW CONSIDERATIONS A. IRWD and OCWD agree to meet and confer to develop mutually acceptable adjustments to the flow commitments specified in this Agreement in the event of any change in winter Reclaimed Water demand, provided, however, IRWD will not initiate discharge of any Reclaimed Water into San Diego Creek as a result of any flow commitment modification implemented pursuant to this subsection. B. In the event IRWD's ability to deliver 4.6 mgd of Reclaimed Water is interrupted or reduced due to operational conditions or other circumstances; and it is necessary for OCWD to supply Reclaimed Water from another source, IRWD will pay OCWD at one -half the CSDOC rate for the Reclaimed Water supplied by OCWD during such period. 4. WWSP DISCHARGE REDUCTIONS A. In consideration of City's commitments pursuant to Subsection 4.13 (1) -(4) and Section 5, IRWD agrees not to discharge more than 3.2 mgd of Reclaimed Water pursuant to the Permit. B. In consideration of IRWD's commitment to reduce WWSP discharges, City agrees; LW (1) Not to file an appeal of the Permit; (2) Not to file or support any legal challenge to the Permit or the WWSP 0 0 0 (3) To request modification of AB 3344 to facilitate implementation of some or all of the provisions of this Agreement. (4) To support amendment of IRWD's consolidated NPDES permit to authorize use of reclaimed water in the MMA's for irrigation of vegetation in a manner that does not result in any discharge of Reclaimed Water to San Diego Creek. 5. INTERIM WWSP DISCHARGE RESTRICTIONS IRWD agrees not to discharge Reclaimed Water pursuant to the Permit during the period from October I, 1996 through and including March 31, 1997 subject to satisfaction of the following: A. CSDOC agrees, on or before October 1, 1996, to calculate IRWD flows to CSDOC for the purpose of determining Capital Outlay Revolving Fund and Annual Equity Adjustment as if IRWD was exercising the Permit pursuant to provisions of this Agreement (discharging 3.2 mgd of reclaimed water into San Diego Creek); B. SARWQCB acknowledges that the additional modeling and monitoring as determined pursuant to Subsection C will, if used with the data derived from a simulated two month operation of the VWVSP (actual operation except for discharge) satisfy the first year of the Demonstration Phase; C. City and IRWD shall, on or before September 1, 1996 agree on any modifications to the intemal monitoring program, the external monitoring program, and the model used to analyze the potential impacts of the discharge necessary or appropriate to 0 0 • ensure the most accurate scientific evaluation of the Demonstration Phase of WWSP. City and IRWD shall cooperate with SARWQCB staff in evaluating modifications to the monitoring program required by the Permit to ensure scientific accuracy of the Demonstration Phase without increasing the costs of monitoring above those required to evaluate WWSP in accordance with the Permit. City shall fund the initial costs associated with the additional or modified monitoring or modeling up to a maximum of $15,000. IRWD shall fund additional costs in excess of the City's initial contribution up to a maximum of $30,000 ($15,000 from City and $15,000 from IRWD). City and IRWD shall attempt to reach agreement regarding any additional costs in excess of $30,000 . D. City has obtained fully executed End -user Agreements with the Major Purchasers; E. In the event the preconditions to "no discharge" (A,B,C and . D of this Section) have not been satisfied on or before October 1, 1996, IRWD shall be entitled to discharge up to 3.2 mgd of Reclaimed Water only if it has received all necessary permits, approvals and authorizations, provided, however, IRWD shall cease discharge of Reclaimed Water pursuant to the Permit if all preconditions to "no discharge" have been satisfied on or before December 1, 1996, the cessation of discharges will not prejudice IRWD and the City pays for any costs associated with the cessation of discharges. F. In the event the preconditions to "no discharge" are fully satisfied on or before October 1, 1996, and subsequent to the simulated operation of WWSP as well as at least two months of the summertime low flow diversion, City and IRWD shall meet and IE 0 • confer relative to preparation of, and then issue, a joint report on the data received during monitoring and, to the extent that science will permit, any conclusions that can reasonably be drawn from the data. This report, which shall be presented to the Newport Beach City Council, the IRWD Board of Directors and the SARWQCB shall address, at a minimum, the following: (1) Nutrient and other constituent reductions achieved in the Duck Ponds during the winter and summer; (2) The extent to which WWSP discharges would impact nutrient and other constituent levels in Newport Bay during the winter and summer, (3) The extent to which the discharges would function to stimulate or arrest the growth of algae and other plant - life; (4) The location and extent of salinity dilution as well as the likely impact, if any, on flora and fauna in and around Newport Bay; and (5) The public health risks, if any, posed by the discharges. G. In the event there is no discharge of Reclaimed Water pursuant to the Permit during the period from October 1, 1996 through March 31, 1997, then the initial discharge pursuant to the Permit shall commence on October 1, 1997 at the rate of 3.2 mgd subject to further reduction or elimination pursuant to Section 6. 11 6. LONG TERM "NO DISCHARGE" SCENARIO A. City and IRWD agree to use their best efforts to reach agreement on ways to fully achieve Project Objectives without the discharge of Reclaimed Water into San Diego Creek or Newport Bay. City and IRWD acknowledge that development of a long term "no- discharge" scenario requires the resolution of the issues identified in this section. B. OCWD has expressed a willingness to accept 7.8 mgd of Reclaimed Water from IRWD on a continuous basis during the period from October 1 through March 31 if it has the ability to beneficially use, or lawfully dispose of, excess flows. The Parties have been advised that disposal of excess flows directly into the outfall facility maintained by CSDOC is feasible and is estimated to cost approximately $100,000. Accordingly, by January, 1997, there must be an agreement between the City and IRWD regarding the preparation of, and payment for, all necessary environmental documents, the processing and approval of all necessary permits, the design and construction of any physical facility necessary to discharge, and payment of all costs related to the actual discharge or transmission of, that portion of the excess flows that OCWD is unable to beneficially use. C. To satisfy Project Objectives and its obligations pursuant to the Grant Deed, IRWD must have a reliable source of water to irrigate the Duck Ponds and the MMA's from October 1 through March 31. Possible sources of irrigation water include San Diego Creek and Reclaimed Water which is retreated and distributed to IRWD's customers. Diversion of flows from San Diego Creek during the winter will involve the FIB% ! 0 construction of an instream facility which may require environmental documentation and mitigation. The cost of construction is uncertain as is the source of funding. IRWD is uncertain about operational feasibility issues, including the cost to retreat Reclaimed Water used to irrigate the Duck Ponds and MMA's. City and IRWD shall discuss, in good faith, the irrigation alternatives, the responsibility for implementing the preferred alternative and the funding of any costs associated with the preferred atemative. D. WVVSP has the potential to significantly reduce nutrients in Newport Bay during the summer. The external monitoring program and the baseline characterization studies will provide the SARWQCB with information helpful to establishment of standards pursuant to the Clean Water Act and other actions which will improve bay water quality. City and IRWD will attempt, in good faith, to reach agreement on continued summertime creek diversions, monitoring, and other activity important to improvement in bay water quality in the event IRWD is not obligated to do so because it is not discharging pursuant to the Permit. 13 (7) TERM. The term of this Agreement shall expire at the end of the fifteen year period described in Section 1 (C) (2) Approved as to Form: Counsel Approved as to Form: By EA!�— General Counsel Orange County Water District Approved as to Form: Irvine Ranch Water District By ti Presi nt, Boa_ Directors By Secretary Orange County Water District President, Board of Directors By:lj—), '&J'aw 4/�&Jw General Manager City of Newport Beach By BY ity Attorney City ager FAcat\burnham\irwdocw2. doc 7/16/96 14