00-1107_SOUTH COAST WATER DISTRICT_CVWD_C1_Agenda Report0
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AGENDA ITEM November 7, 2000
To: George Scarborough, General Manager
From: Amy Amirani, Director of Public Works
Subject: Consideration of Approval of Water Service Agreement to Lease Capacity
Rights in the Del Obispo Connection (South Coast Water District)
RECOMMENDATION:
By motion, authorize the General Manager to execute the Water Service Agreement
and Lease of Capacity Rights Re. Del Obsipo Connection and authorize initial payment
of $300,000 from the Capital Improvement Fund Reserves to
CIP # 12-XXXXX-4754-784.
SITUATION
Since 1996, the Capistrano Valley Water District has been drawing imported water into
its domestic water system from a service connection to the Joint Transmission Main on
Del Obispo. The Joint Transmission Main extends in seven reaches from the Coastal
Junction in Irvine, to the Brandt Reservoir in San Clemente. Capistrano Valley Water
District owns capacity in the first two reaches where it supplies the Eastern
Transmission Main, the major source of supply for the District.
In the past, the District paid a water service charge to the Tri -Cities Municipal Water
District (TCMWD) for use of the Del Obispo Connection. However, the District has
never purchased or leased capacity in the Joint Transmission Main. The South Coast
Water District (SCWD) replaced TCMWD as the operator of the Joint Transmission
Main, effective March 31, 2000.
The parties that hold capacity rights in the Joint Transmission Main have invested
capital for design and construction of the Pipeline's facilities. Staff has determined that
it is preferable for the District to continue to use the pipeline capacity and formalize its
use with a lease of the needed capacity. Upon execution of the agreement, the
following payments are required:
A one-time payment of $240,000 to reimburse SCWD for the value of the
District's use of Pipeline capacity in the past, up to and including June 30, 2000.
An annual payment of $60,000 per fiscal year to lease up to 1.5 cubic feet per
second of capacity in the Joint Transmission Main.
A water delivery charge for the actual metered volume of water supply delivered.
The water delivery charge will be equivalent to the rates, fees and charges
established by the Metropolitan Water District. /�
FOR CIN COUNCIL AGENDA�L. t� V GUD
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Agenda Item • • November 7, 2000
Water Service Agreement with JRWSS — Del Obispo Connection Page 2 of 3
Staff has reviewed the attached agreement and recommends authorization of the
District's General Manager to execute the agreement.
COMMISSION REVIEW AND RECOMMENDATION
Not applicable.
FINANCIAL CONSIDERATIONS
The District will incur a one-time cost of $240,000 to reimburse SCWD for the value of
District's previous use for the period from July 1, 1996 through June 30, 2000. The
District will also incur annual costs of $60,000 per year to lease pipeline capacity and a
water delivery charge equivalent to the rates, fees and charges established by the
Metropolitan Water District.
The $60,000 annual lease payment was derived by South Coast Water District based
on the costs to construct the original pipeline and connection and current costs to
maintain that facility. These costs total approximately $50,000 per cfs. Since we are not
purchasing permanent capacity this was reduced to $40,000 per cfs and pro rata to
$60,000 for 1.5 cfs. To make further comparisons, this pipeline is an extension of the
South County (SC -04) pipeline. The capacity charge for SC -04 is $1.1 million per cfs.
The $60,000 we are paying for 1.5 cfs would amortize this cost over 27.5 years.
The lease funding was not budgeted. As this payment represents a payment in -lieu of
acquiring capacity in this pipeline, the funds would appropriately come from the Capital
Improvement Fund reserves. District Capital Improvement Fund reserves will fund the
initial payment with future annual payments to be included in the annual budget. Staff
will review the impact of this item on budgeted projects and propose recommended
adjustments, if necessary at mid -year.
NOTIFICATION
South Coast Water District
ALTERNATE ACTIONS
1. By motion, authorize the General Manager to execute the Water Service
Agreement and Lease of Capacity Rights Re: Del Obispo Connection and
authorize initial payment of $300,000 from the Capital Improvement Fund
Reserves to CIP# 12-XXXXX-4754-784.
2. Request additional information from the Staff.
P1Public Works\pw shared\WATERWgenda Item for Del Obispo Agreement.doc
Agenda Item • • November 7, 2000
Water Service Agreement with JRWSS — Del Obispo Connection Page 3 of 3
RECOMMENDATION:
By motion, authorize the General Manager to execute the Water Service Agreement
and Lease of Capacity Rights Re. Del Obispo Connection and authorize initial payment
of $300,000 from the Capital Improvement Fund Reserves to CIP # 12-XXXXX-4754-
784.
Respectfully submitted,
a^lriVV Q-Nyv�kaiA'
Amy Amirani
Director of Public Works
Attachments (1): Agreement
Location Map
Prepared by:
Lonnie R. Curtis
Water Services Manager
PAPublic Works\pw shared\WATERWgenda Item for Del Obispo Agreement.doc
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