1998-1204_MOULTON NIGUEL WATER DISTRICT ELAL_Memorandum of UnderstandingA
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MEMORANDUM OF UNDERSTANDING BY AND AMONG
CAPISTRANO VALLEY WATER DISTRICT,
MOULTON NIGUEL WATER DISTRICT,
SANTA MARGARITA WATER DISTRICT,
AND SAN JUAN BASIN AUTHORITY
This Memorandum of Understanding is made effective this
day of
, 1998, by and among Capistrano Valley
Water District, Moulton Niguel Water District, Santa Margarita
Water District (collectively, the "Participating Members"), and
the San Juan Basin Authority.
1. The Participating Members are all of the members of the
San Juan Basin Authority participating in the San Juan Basin
Groundwater Management and Facility Plan, as revised ("Project"),
and the related application to appropriate water from the San
Juan Basin dated April 3, 1992 (Application No. 30123) filed with
the State Water Resources Control Board. The proposed Phase I
Project facilities are depicted in Exhibit "A."
12. The Project will be financed by the issuance of bonds by
the Authority. Therefore, the Participating Members will enter
into Project Lease Agreements prior to the issuance of the bonds
as required by Section 7 of the February 5, 1991, San Juan Basin
Projects Agreement by and among San Juan Basin Authority,
Capistrano Valley Water District, Moulton Niguel Water District,
and Trabuco Canyon Water District (111991 Projects Agreement").
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3. In accordance with Section 8 of the 1991 Projects
Agreement, the San Juan Basin Authority and the Participating
Members are negotiating a groundwater recovery program agreement
("GRP Agreement") with the Metropolitan Water District of
Southern California and the Municipal Water District of Orange
County to subsidize the costs of constructing, operating and
maintaining the Project.
4. The GRP Agreement would require the Project to be
operated at certain levels and for specified durations in order
for the Participating Members to access the subsidy and other
benefits of the GRP Agreement. As a result, compliance with the
GRP Agreement under certain circumstances may interfere with the
extraction of water by the Capistrano Valley Water District for
itself or on behalf of the City of San Juan Capistrano as defined
in the Agreement dated November 21, 1995, by and among the San
Juan Basin Authority, the Capistrano I " — ra=rAr District, and
the City of San Juan Capistrano (11199'
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5. Prior to entering into and a
the GRP Agreement, the Project Lease
agreements related to the Project, tt
Participating Members have entered it
Understanding to allocate among the 1 1
respective financial obligations in
terms and conditions to ensure that cne
conformity with both the GRP Agreement and the 1995 Agreement.
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6. Section 3.6 of the GRP Agreement requires the San Juan
Basin Authority to exercise its best efforts to operate the
Project to its maximum capacity "on a sustained basis." In
implementing the GRP Agreement, the parties to this Memorandum of
Understanding agree that operation of the Project is not "on a
sustained basis" if such operation would interfere with the
extraction of water by Capistrano Valley Water District for
itself or on behalf of the City of San Juan Capistrano, or would
cause the San Juan Basin Authority to breach the terms of its
water right permit or any agreement to which it is a party.
7. In the event that the Project continues to be operated
during periods of Project interference with water extraction by
Capistrano Valley Water District for itself or on behalf of the
City of San Juan Capistrano pursuant to the 1995 Agreement, then
Capistrano Valley Water District in its sole discretion will be
entitled to receive all of the water produced by the Project in
amount sufficient to offset the impairment in accordance with
this Section 7 ("Make -Up Water"). The amount of Make-up Water
that Capistrano Valley Water District is entitled to receive
shall be limited to its Annual Entitlement as defined in the 1995
Agreement totaling 3,325 acre feet per year, minus its allocated
interest in water produced by the Project operations that
contribute to the impairment of its wells. By this Section 7,
each of the Participating Members, including Capistrano Valley
Water District, will be responsible for providing Make-up Water
in proportion to each Participating Member's allocated interest
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in water produced by the Project operations that contribute to
the impairment of Capistrano Valley Water District's groundwater
extractions. Prior to commencing Project construction, each
Participating Member's allocated interest in the Project's water
rights and water supplies will be established by a Project
implementation agreement among the Participating Members and the
Authority. Any Project water exceeding the amount of Make -Up
Water delivered to Capistrano Valley Water District shall be
allocated among the three participating members in accordance
with their allocated interest in Project water. This provision
will not operate to relieve the San Juan Basin Authority of its
obligations under the 1995 Agreement to remedy Project impacts to
extractions by Capistrano Valley Water District for itself and on
behalf of the City of San Juan Capistrano in the event that Make -
Up Water deliveries are not sufficient to remedy the Project
impact.
8. Each Participating Member will be obligated to pay
Project costs in proportion to their respective deliveries of
Project water, excluding any deliveries of Offset Water to
Capistrano Valley Water District. Project costs shall not
include the costs of constructing additional distribution
pipelines and booster station to deliver water to Moulton Niguel
Water District's system and Santa Margarita Water District's
system.
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9. Unless mutually agreed by all of the parties to this
Memorandum of Understanding, no change will be made to the
Project, nor to the points of diversion, place of use, or purpose
of use of water produced pursuant to the Project's water right
application no. 30123 or any permit or license issued on
application no. 30123.
10. It is anticipated that the Project may be implemented
using facilities and/or property of Capistrano Valley Water
District. Any use of Capistrano Valley Water District facilities
or property for Project purposes is contingent upon prior
approval by the Board of Directors of Capistrano Valley Water
District and upon such terms as are agreeable to Capistrano
Valley Water District and San Juan Basin Authority to compensate
Capistrano Valley Water District for the use of its facilities
and property.
11. Except as amended herein, the 1991 Projects Agreement
and the 1995 Agreement, and all of their respective terms and
conditions, shall remain in full force and effect.
12. This Memorandum of Understanding shall not be amended,
terminated or superceded except upon prior written approval of
all of the Participating Members.
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13. Each representative affixing his or her signature below
thereby warrants and represents that he or she has the full legal
authority to bind his or her respective party to all of the
terms, conditions and provisions of this Memorandum of
Understanding, and that no further approvals or consents are
necessary from his or her respective party in connection
therewith.
14. This Memorandum of Understanding may be executed in
counterparts, each of which shall be deemed an original, but all
of which when taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Authority has caused this Memorandum
of Understanding to be executed by the Chairman of the Board of
Directors and attested by the Secretary thereof, and each of the
Participating Members has caused this Memorandum of Understanding
to be executed by its President or Chairman of the Board of
Directors and attested by the Secretary thereof, effective the
date first written above.
CAPISTRANO VALLEY WATER DISTRICT
ones
Chairman of the Board
[signatures continued to next page]
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ATTEST:
Board Clerk
APPROVED AS TO FORM BY:
✓/ /[ilii �..�,�-OgZ2,�
Michele A. Staples
ATTEST:
board Clerk
APPROVED AS TO FORM BY:
attorney name]
ATTEST:
Board Clerk
APPROVED AS TO FORM BY:
[attorney name]
MOULTON NIGUEL WATER DISTRICT
[signatory name]
Chairman of the Board
SANTA MARGARITA WATER DISTRICT
[signatory name]
Chairnan of the Board
[signatures continued to next page]
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SAN JUAN BASIN AUTHORITY
ohn Schat
chairman oz the Board
ATTEST:
Aardq�lerk
APPROVED AS�/ TOO FQORM� BY:
[attor ey name]
A04976
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PS SAN JUAN BASIN DESALTER PROJECT
AGREEMENT BETWEEN
LITAN WATER DISTRICT OF SOUTHERN CALIFORNIA.
IPAL WATER DISTRICT OF ORANGE COUNTY.
AND
THE SAN JUAN BASIN AUTHORITY.
1998 SAN JUAN BASIN DESALTER PROJECT
AGREEMENT BETWEEN
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY,
AND
THE S A N ,RI e N BASIN AUTHORITY.
TABLE Or CONTENTS
Section
Recitals.................................................
Section l: Definitions..............................................................................
Section 2: Warranties.................................................................................
Section 3: Ownershin and Resoonsibilities................................................
Section=':
Billinsz Process..............................................................
Section 5:
Reconciliation Process ..................................................
Section 6:
Coordinating Committee ..............................................
Section 7:
Record Keeping and Audit ...........................................
Section 8:
Interruption of Replenishment Water Supply ...............
Section 9:
Term and Amendments .................................................
Section 10:
Hold Harmless and Liability .......................................
Section 11:
Notice.........................................................................
Section i2:
Successors and Assi_ns..............................................
Section 13:
Severability...............................................................
Section 14:
integration...................................................................
Section 1 �:
Govemina Law..........................................................
EXHIBIT A...........
EXHIBIT B...........
EXHIBIT C...........
EXHIBIT D...........
EXHIBIT E ...........
Pane
.................... A-1
.......................... B-1
.......................... C-1
......................... D-1
.......................... E-1
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1998 SAN JUAN BASIN DESALTER PROJECT
AGREEMENT BETWEEN
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY, AND
THE SAN JUAN BASIN AUTHORITY.
THIS AGREEMENT is made and entered into as of 4/, 1998, by and among
the METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA (hereinafter
"Metropolitan'), the MUNICIPAL WATER DISTRICT OF ORANGE COUNTY (hereinafter
"MWDOC'). and the SAN JUAN BASIN AUTHORITY (hereinafter -'SJBA").
RECITALS `—
A. Metropolitan was incorporated under the Metropolitan Water District Act ("Act") for the
purpose of developing, storing, and distributing water for domestic and municipal purposes.
B. The Act empowers Metropolitan to acquire water and water rights within or without the
State: develop. store, and transport water; provide, sell, and deliver water at wholesale for
domestic and municipal uses and purposes; fir the rates for water; and acquire. construct,
operate, and maintain any and all works, facilities, improvements, and property necessary
or convenient to the exercise of the powers granted by the Act.
C. MWDOC. as a member public agenc} of Metropolitan under the Act, is a wholesale
purchaser within its service area of water developed, stored and distributed by
Metropolitan.
D. SJBA is a Joint Powers Authority, that was formed in 1971 for the purpose of managing
the San Juan Groundwater Basin and jointly funding certain water system facilities to
make water resources available to the areas within the San Juan Creek Watershed
serviced by the SJBA.
E. Metropolitan's water supply and demand projections for its service area, including that
encompassed MWDOC, show that additional sources of supplemental water must be
developed to meet future needs.
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Metropolitan has determined to take all necessary steps to provide its service area with
adequate and reliable supplies of high quality water in the years ahead in an
environmentally and economically responsible way.
G. Certain portions of the Lower San Juan Basin contain significant concentrations of tota;
dissolved solids. iron and manganese exceeding potable water standards thereby
preventing its use as a domestic supply unless treatment is provided.
H. MWDOC and SJBA have determined that it would be more costly to obtain a portion of
its water supply by reclaiming groundwater from the Lower San Juan Basin than to
purchase the equivalent amount from Metropolitan's Treated rull Service from
MWDOC.
I. The SJBA Project Committee No. 4. comprised of Capistrano Valley Water District
(CVWD), Moulton Niguel Water District (NNWD) and Santa tLlargarita Water District
(SM WD), has been formed as an agent of SJB?. to construct and operate the San Juan
Basin Desalter Project.
It is anticipated that the SJBA will execute a separate agreement to implement the San
Juan Basin Desalter Project with CVWD. ANW'D. and SMWD.
K. Metropolitan. MWDOC and SJBA have determined that it is mutually beneficial for
SJBA to increase production from the Lower San Juan Basin by developing and operating
a new treatment facility.
L. Metropolitan, in accordance with its Groundwater Recovery Program, desires to assist
MWDOC and SJBA with the cost of recovering the degraded groundwater that exceeds
the cost of Treated Full Service from Metropolitan.
M. MWDOC and SJBA desire to comply with the provisions of Metropolitan's Groundwater
Recovery Program (hereinafter "GRP) in return for Metropolitan's financial assistance
for the San Juan Basin Desalter Project.
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N. The San Juan Basin Desalter Project will increase regional production for domestic and
municipal use by producing approximately 4,800 acre-feet per year of potable water from
the Lower San Juan Basin.
Therefore in consideration of the promises and covenants hereinafter set forth. the Parties do
agree as follows:
Section l: Definitions
The following words and terms. unless otherwise expressly defined in their context. shall be
defined to mean and shall be operative as specified:
1.1 "Allowable Yield" shall mean the actual amount of Recovered Groundwater measured in
acre -f e*. that is delivered from the Project for domestic and municinal use in any given. vear.
which receives Metropolitan's financial assistance. Allowable yield shall only inciude
Recovered Groundwater produced based on an established water right. Such Allowable
Yield shall be considered to be local water for purposes of Metropolitan shortage allocations.
Agricultural Water Programs and Seasonal Storage Service Calculations.
1.2 "Deferred Cost shall mean that cos:. in dollars per acre-foot. carried for.ard fion::hc
preceding Fiscal Year as calculated in Exhibit E. incorporated herein by this reference.
1.3 "Degraded uroundwatel shall mean ground Rater which does no: n eez. applicatle
water quality standards such as those set forth in Division 4, Environmental Health of Title
22, California Code of Regulations, as amended from time to time, or any successor statute.
1.4 "Estimated GRP contribution' shall mean the advanced financial contribution in dolla-s
per acre-foot Metropolitan pays for Allowable Yield for monthly billing purposes until
the Final GRP Contribution is calculated pursuant to procedures in Sections 4.2 and 5.2,
respectively.
1.5 "Final GRP Contribution' shall mean the financial contribution by Metropolitan to the
Project in dollars per acre-foot of Allowable Yield. The Final GRP Contribution for the
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Project is equal to the sum ofthe Project Unit Cost and Deferred Cost minus
Metropolitan's prevailing full service treated water rate, but shall not exceed
$250 per acre-foot.
.6 .. iscai Year- shall mean a M.-tropolkan riscal year that begins on Juiy l and ends on
June 30.
1.7 "Project' shall mean the San Juan Basin Desalter Project being developed by SJBA to
produce Recovered Groundwater. The Project is described in Exhibit A. incorporated
herein by this reference. The San Juan Basin Authority shall consult with Metropolitan
and obtain Metropolitan's approval prior to making any changes to the Project.
I.8 "Project Capacity" shall mean 4.800 acre-feet per year.
1.9 "Project Unit Cost" shall mean the actual cost to produce an acre-foot of water by the
Project in a Fiscal Year and is comprised of three components: Annualized Capital
Component. Operation and Maintenance Component. and Annualized Replacement
Component, as specified in Exhibits B, C, and D. incorporated herein by this reference.
I. 10 Reco -.red Groundwater" shall mean all Degraded Groundwater recovered and delivered
for beneficial use by the Project in a Fiscal Year, measured in acre-feet.
i. i i Repienlshment Water shall mean imported %%titer obtained fro T. Me:r: po=:gar. ,-nd used
for the purpose of replenishing natural ground�iater basins.
Section 2: Warranties
2.1 MWDOC and SJBA warrant that the Project will increase groundwater production for
potable uses from the Lower San Juan Basin and improve regional water supply,
reliability.
2.2 SJBA warrants that it will acquire the right to distribute and sell Allowable Yield
produced from the Project prior to start of Project operation, and that it will furnish
evidence of that right to Metropolitan.
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2.3 MWDOC and SJBA warrant that they do not discriminate against employees or against
any applicant for employment because of ethnic group identification, religion. age, sex,
color, national origin, or physical disability and further warrant that they require all
contractors and consultants performing work on the Project to comply with all the laws
and regulations prohibiting discrimination against employees or against any applicant for
employment because of ethnic °roup identification, religion. age, sex. color, national
origin. or physical or mental disability.
2.4 SJBA warrants that it has or will comply with the provisions of California Environmental
Quality Act for each and all components of the Project facilities.
Section 3: Ownership and Resnonsibilities
3.1 SJBA shall be the sole owner of all Project facilities. Metropolitan shall have no
ownership right, title, security interest or other interest in an% P rojec,;acinues
3.2 SJBA is solely responsible for all design, environmental compliance, right-cf-way
acquisitions permits, construction, and cost of the Project and all modifications thereof.
3.3 SJBA shat; be soleh responsible for operating and maintaining the Protect in accordance
with all applicable local, state. and federal laws. Metropolitan shall have no rights. duties
or responsibilities for operation and maintenance of the Project.
3.4 SJBA shall install, operate and maintain metering devices for the purpose of measuring
the quantity of Recovered Groundwater and Allowable Yield. SJBA shall also provide
electrical metering devices to accurately measure the energy used for the Project to
determine incurred operation and maintenance costs.
3.5 SJBA shall, at all times during the term of this Agreement, exercise its best efforts to
operate the Project facilities to maximize Allowable Yield on a sustained basis.
3.6 SJBA shall assist Metropolitan in its effort to forecast future Project production and cost.
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Section 4: BillinEz Process
4.1 Metropolitan shall pay the Final GRP Contribution for up to 5,760 acre-feet (120 percent
of Project Capacity) of Allowable Yield in any one Fiscal Year.
4.2 Metropolitan shall consult with SJBA to determine the Estimated GRP Contribution
based on historic cost data and expected Project activities. Reconciliation of the
Estimated GRP Contribution and Final GRP Contribution shall be performed by
Metropolitan pursuant to Section 5.
43 SJBA shall provide written notification to Metropolitan of the initiation of Project
operation no less than 30 days prior to initiation of Project operation.
4.4 SJBA shall invoice Metr000litan monthly for the Allowable Yield delivered during the
previous month subject to the limitations outlined in Section 4.1 and 4.5. Metropolitan
shall pay M)XWC for invoiced Allowable Yield pursuant to Section 4.2 by means of a
credit included on the next billing issued to MWDOC.
4.5 upon receiving the Metropolitan billing. MW -DOC shall either include the full amount of
the Estimated ORP Contribution for the Allotit able Yield received fron-I Aletr000ii,an as u
credit on its next billing to the SJBA or shall make direct payments to the SJBA.
1. iing, Hin_. nd edit process sha!be iaoodco th,1les and'2:apn an
regulations established from time to time by Metropolitan as reflected in Metropolitans
Administrative Code.
Section 5: Reconciliation Process
5.1 By January First of each Fiscal Year, SJBA shall provide Metropolitan with: (a) records
of Recovered Water and Allowable Yield; (b) supporting documentation of the actual
cost of the Project for the previous Fiscal Year required to perform the calculations
prescribed in Exhibits B, C, and D; (c) the terms and schedule of payments of the
Project's financing instrument: and (d) a description of any changes to the Project's
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financing instruments. Metropolitan will suspend its Estimated GRP Contribution if
SJBA fails to provide any of the above -required data by April First of each Fiscal Year.
During the suspension period. SJBA shall continue to invoice Metropolitan for the
Allowable Yield for water accounting purposes. Metropolitan will resume the monthly
Estimated GRP Contribution once complete data is received and conduct the
corresponding reconciliation pursuant to Section 5.2. Failure by SJBA to provide
reconciliation data within 18 months after the end of the Fiscal Year for which a
reconciliation is required shall constitute material breach of the Agreement.
5.2 Within 180 days after Metropolitan receives complete data from SJBA, pursuant to
Section 5.1, Metropolitan shall calculate the Final GRP Contribution for the Fiscal Year.
The Final GRP Contribution shall then apply retroactively to all Allowable Yield for the
applicable Fiscal Year. An adjustment shall be computed b} \ietropohtan for o1 er- or
under -payment for the Allowable Yield and included on the nest bilimg issued to
MV,T)OC. and payments shall be made in accordance with Lletropoiitar's Adminisrrative
Code.
5.3 Parties agree that all contributions other than those derived from within MWDOC's
service area boundaries received prior to ana during the term of this Agreement that
offset eligible Project cost shall be deducted from respective cost components. During the
reconciliation following receipt of such contributions. the parties shall determine the
equitable apportionment of such contributions for capital and/or operational purposes. If
the parties are unable to arrive at an agreement. Section 6 shall apph.
Section 6: Coordinating Committee
6.1 The Coordinating Committee is composed of one participant each from Metropolitan and
SJBA. The Coordinating Committee shall meet as needed to resolve issues regarding the
GRP Contribution, Annualized Capital Component, Operation and Maintenance
Component, Annualized Replacement Component and Project Unit Cost. Coordinating
Committee's responsibilities exclude renegotiating the terms of this agreement.
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6? The Coordinating Committee shall, to the extent possible. seek to establish consensus in
carrying out its responsibilities. Metropolitan and SJBA shall each have a single vote on
the Committee. If, by voting, the Coordinating Committee cannot resolve a particular
matter or matters, a third party shall be appointed by the parties to represent a third vote
on the Committee, and the Coordinating Committee shall then act by majority vote as to
the matter or matters. The Coordinating Committee's decision shall be final and binding
on the parties. If the parties cannot agree on the third party, then any party to this
Agreement may request a court to appoint the third party pursuant to Code of Civil
Procedures, Section 128 1.6. Costs for the third party shall be shared equally by
Metropolitan and SJBA and shall not be included in Project Uiiit Cost.
Section 7: Record Keeping and Audit
7.1 SJBA shall establish and maintain accounting records of all costs incurred for
construction. operation and maintenance. and replacement parts of the Project as
described in Exhibits B. C and D and all contributions described in Section 5.3.
Accounting for the Project shall utilize generally accepted accounting practices and be
consistent with the terms of this .Agreement. SJBA's Project accounting records must
clearly distinguish all costs for the Project from SJBA's other water production.
treatment. and distribution costs. SJBA's records shall also be adequate to determine
Allowable Yield and Recovered Groundwater to accomplish all cost calculations
described in this Agreement.
7.2 SJBA shall establish and maintain accounting records of all contributions including
grants that offset eligible Project capital costs. operation and maintenance costs, and/or
replacement costs. as outlined in Section 5.3.
7.3 SJBA shall collect Recovered Water and Allowable Yield data for each Fiscal Year of
Project operation and retain records of that data based on the metering requirements in
Section 3.4.
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7.4 Metropolitan shall have the right to audit the Project costs and other data relevant to the
terms of this Agreement for a period of three Fiscal Years following the termination of
the Agreement. Metropolitan may elect to have such audits conducted by its staff or by
others, including independent accountants, as designated by Metropolitan. SJBA shall
make available for inspection to Metropolitan or its designee, upon 30 days advanced
notice, all records. books and other documents, indudinL billings and costs incurred b%
contractors, relating to the construction, operation and maintenance of the Project: any
grants and contributions, as described in Exhibits B, C. and D: and capital cost financing.
Upon 30 days advance notice and at Metropolitan's request, SJBA shall also allow
Metropolitan's personnel or its designee to accompany SJBA staff in inspecting SJBA's
contractors' records and books for the purpose of conducting such audits of Project costs.
7.5 In lieu of conducting its own audigs), Metropoli,an snail have the right to direct SJBA to
have an independent audit conducted of all Project costs incurred in an} Fiscal Year(s)
pursuant to this Agreement. SJBA shall then ha%e an audit performer' for said Fiscal
Year(s) b., an independent ecrtifie- public accounting firm and provide Metropolitan
copies of the audit report within six months after the date the audit was requested. The
cost of any independent audit performed under this Agreement shall be paid by SJBA and
is an allowable Project operation and maintenance cost pursuant to Exhibit C. Based on
the results of any independent audit, an adjustment for over or under payment of
Allowable Yield for each appiicabie Fiscal Year shall be reflected Dy Metropolitan in
subsequent billing to MWDOC.
7.6 With the first submittal of Project data as required by Section 5, SJBA shall provide
Metropolitan with an audit of costs pursuant to Section 75 and a certification from an
independent certified public accounting firm indicating that SJBA has established an
accounting system to record Project water deliveries, and costs pursuant to Section 7. 1,
7.2, and 7.3.
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Section 8: Interruption of Replenishment Water Supply
8.1 This section shall become applicable only upon SJBA's initial purchase of
Replenishment Water for the Project from Metropolitan and shall remain operative
thereafter for the term of this Agreement.
8.2 MWDOC and SJBA agree (to the extent tha: each has the authorit)) to diligently prepare
for and operate the Project during interruption of Metropolitan's Replenishment Water
deliveries pursuant to Sections 8.3 and 8.4.
8.3 During water shortage conditions, Metropolitan may suspend for up to and including
three continuous years delivery to SJBA of Replenishment Water equal to the last three-
year average of replenishment water required to support Project's Allowable Yield.
Metropolitan may also otherwise suspend delivery to ivl'V�DOC of Repienisiunent Water
to the extent required by law or by rules enacted by Metropolitan's Board of Directors,
which are generally applicable to Metropolitan's member public agencies. Failure by
SJBA to cause the Project to operate c. reduce replenishrnent deliveries during such
shortages shall constitute material breach of the agreement effective the first day of the
Fiscal Year in which the breach occurs.
8.4 Subsequent to restoration of Metropolitan deliveries of Replenishment Water, MWDOC
and SJBA shall diligently renienish Lower San Juan Basin to sustain another three years
of interruption of Metropolitan Replenishment Water.
Section 9: Term and Amendments
9.1 The term of this Agreement shall be twent) (20) years from the date of the initial
production of Allowable Yield.
9.2 This Agreement may be amended at any time by written mutual agreement of the Parties.
9.3 SJBA may terminate this Agreement upon 30 days prior notice.
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9.4 This Agreement shall automatically terminate. and Metropolitan's obligations under this
Agreement shall terminate accordingly, upon occurrence of any of the following:
a. payments are not required to be made under this Agreement by Metropolitan to
MWDOC for s Eve consecutive -ye period subsequent to the initiation ofoperation;
b. construction has not cor. r enced nithir. four }'ears following e.,ecution of this
agreement;
C. no Allowable Yield is produced within five years following execution of this
Agreement; or
d. material breach of this Agreement by any party other than Metropolitan.
Section 10: Hold Harmiess and Liabiinv
SJBA agrees at its sole cost and expense to defend and hold Metropolitan and MWDOC
harmless from any claim and any and all liability (including but not limited to, liability due to
water quality) which may arise out of SJBA's approval of and subsequent construction and
operation of, the Project or out of the ownership of the Project, and will save and defend
Metropolitan and MWDOC and its o`ficers, agents, and employees free from any claims for
injury, including death or damage to propert}-. or injury (including death or damage) due to water
quality, COnSirUCtl0n, Operatln^ prnuT, rSh tr -- rhe - eC__ Such lndemn'.t.' shall include all
loss related to any claim made, whether or not a court action is filed, and shall include attorneys
fees, administrative and overhead costs, engineering and consulting fees and all other costs
related to or arising out of such claim of liability. Such indemnity to MWDOC shall not apply in
the event MWODC assumes responsibility for operation of the Project.
Section 11: Notice
Any notice, payment, or instrument required or permitted to be given hereunder shall be deemed
received upon personal delivery or 24 hours after deposit in any United States post office, first
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class postage prepaid and addressed to the Party to this Agreement for whom intended, as
follows:
If to Metropolitan: The Metropolitan Water District of Southern California
P.O. Box 54153
Los Angeles, California 90054-0153
Attention: General Manage,-
If
anager
If to MWDOC: Municipal Water District of Orange County
10500 Ellis Avenue
P.O. Box 20895
Fountain Valley, California 92728
Attention: General Manager
If to SJBA: San Juan Basin Authority
27500 La Paz Road
Laguna Niguel, California 93656
Attention: General tVianage:
Any Party to this Agreement may change such address by notification given to the other Parties
as provided in this section.
Section 12: Successors and
This Agreement shall inure to the benefit o= anc be binding upon any successor agency and
assigns of the parties hereto. Except as provided herein, this Agreement and any portion thereof
shall not be assigned or transferred to any entity not an original party to this Agreement, nor shall
any of the duties be delegated, without express written consent of all parties. Any attempt to
assign or delegate this Agreement without the express written consent of all parties shall be void
and of no force or effect. Except as otherwise noted above, and provided that MWDOC provide
all other parties to this Agreement with written acceptance of the ownership, obligations or
responsibilities to be transferred, the SJBA is authorized to delegate or assign any or all of its
obligations and responsibilities pursuant to this Agreement to MWDOC without express written
consent of Metropolitan, and SJBA is also authorized to transfer ownership of the Project and all
obligations and responsibilities pursuant to this Agreement to MWDOC without express consent
of Metropolitan.
-12-
Section 13: Severability
The partial or total invalidity of one or more sections of this Agreement shall not affect the
validity of this Agreement.
Section 14: Integration
This Agreement comprises the entire integrated understanding between the parties concerning the
San Juan Basin Desalter Project, and supersedes all other negotiations, representations, or
agreements.
Section 15: Governing Law
The laws governing this Agreement shall be the laws of the State of California and the venue of
any action brought hereunder shall oe Los Angeles Countv, California.
-13-
0
IN WITNESS WHEREOF. the Parties hereto have executed this Agreement effective as of the
date first herein above written.
ACCEPTED
APPROVED AS TO FORM: THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
N. Greeorv_ Taylor. General Counsel Edward G. Means, III.
Deputy General Manager
By:l�trr
Signatory / Debra C. Man, Chief
Deputy General Counsel Planning and Resources
Date: Date: J?�/A%$
ACCEPTED:
APPROVED AS TO FORivi.
iv:`1�:IPAL WA iEKD11'STRIC . Or
ORANGE COUNTY
By : %/" bluo�aG By: � �2
Jan t Mominas r 'Stanley E. S _ue
General Counsel General Manager
Date:
ACCEPTED:
APPROVED AS TO FORM:
By:
Fritz StAdling
General Counsel
Date:
o1contract\agree\jvsjuan.doc
-14-
Date: )1,/, /o ss
SAN JUAN BASIN AUTHORITY
Date:
John Schatz
President
0 0
EXHIBIT A
PROJECT DESCRIPTION
San Juan Basin Desalter
uvervieu
The San Juan Basin Desalter Project will pump and treat groundwater from the Lower San Juan
Basin and deliver it to the Capistrano Valley Water District's (CVWD) distribution system. The
Lower San Juan Basin is located in south Orange County. The proposed facilities are to be
completed in phases. Phase I project facilities will consist of a four million gallon per day
desalter to treat brackish groundwater, groundwater extraction wells with 5.7 million gallons per
day (MGD) of production capacity, collection pipelines to convey pumped groundwater to the
treatment plant, a pump station, product water pipeline to convey treated water to CV WD's water
delivery system and brine disposal pipeline. The Phase I facilities will capture and desalt the
unused sustained yield of the lower basins of about 5.800 acre-feet per year. producing a potable
%vate- -.800 acre-fec* annua!ly. Operation of Phase I of the Project kill
not require replenishment water. Phase I is being developed by the SJBA Project Committee
No. 4, which consists of CV WD, Moulton Niguel Water District (NINWD), and Santa Margarita
Water District (SMWD). The proposed Phase I Project facilities are shown in Figure I.
Subsequent chased construction would include the construction of additional distribution
pipelines and booster station to deliver water to NINWD's and SMWD's systems, expansion of
the desalter capacity to 8 MGD and construction of additional extraction wells. recharge
facilities, product water ipelin=s. and pumping facilities. Facilities other than Phase I facilities
are not considered as par o the Project as defined in Section I of this Agreement except that
cost of Recovered Groundwater produced by subsequent phases may be taken into account in
determining Metropolitans contribution to the Phase I of the Project. Subsequent phases will
finally be sized and developed based on the operating and groundwater management -experience
pained from Phase I operation.
Phase I Treatment Facilities
The proposed Phase I desalter facility will include a 4 -MGD reverse osmosis plant, a
10,000 -square -feet building to house the desalter, a pump station with associated building. and
parking areas. Approximately three acres are needed to accommodate the desalter facilirv. The
proposed treatment process will include pre-treatment to remove or stabilize iron and manganese,
hardness and adjust the pH. Primary treatment will be by reverse osmosis process, followed by
post treatment. Post treatment will consist of aeration, pH adjustment and disinfection. Raw
water entering the treatment plant from the well field will split into two streams. The main
stream, approximately 85 to 88 percent of pumped groundwater, will be delivered to the reverse
osmosis treatment process. The second stream will bypass the primary treatment and will be
blended with treated water prior to the post-treatment process. Figure 2 illustrates the treatment
process schematically.
M
0 0
1-5
\v
7
CONNECTION TO 7��
EXISTING
MSTRIBUTION
SYSTEM
SAN JUAN'
WELLFIELD
DANA
POINT
HARBOR
J
EXISTING 57"�
SERRA OCEAN
OUTFALL
DANA
POINT
PACIF/C OCA H
MISSION
VIEJO EXISTING
T.J. MEADOWS
RESERVOIR
P �,IGN`N�V
EXISTING
PIPELINE
� Fo
f JP�G
P
s 24" PRODUCT
WATER
DISTRIBUTION
LINE
DISCHARGE LINE
SAN JUAN
CAP ST ANO
EXISTING 42" DIAM.
CHIQUITA LAND
OUTFALL
Co NOT TO SCALE
�SPc,.
Figure 1
A -z
E
Phase I WeL Collection. Distribution and Brine Disoosal Facilities
Phase I will include approximately 7.000 feet of 18 -inch and 7,500 feet of 24 -inch -diameter
pipeline to collect and convey raw groundwater from the well sites to the desalter facility for
treatment. Approximately 5,000 feet of 24 -inch diameter pipeline will be required to deliver
treated water from the desalter to a pipeline connected to an existing reservoir in CVWD's
system (425 -foot Pressure Zone) located near Ortega Highway and Rancho Viejo Road. Brine
will be disposed to the Chiquita Land Outfall by gravity flow through approximately 700 feet of
12 -inch diameter pipeime.
Phase I Wells
The Project will include the construction of approximately five wells, requiring about
2,000 square feet of land for each. Depending on the final design, the wells may be housed in
underground vaults, above ground buildings or fenced enclosures. Atotal well capacity of
approximately 4.000 gallons per minute (gpm) will be required to provide feedwater to the
Project. Wells are anticipated to have a capacity range from 450 gpm each in the northern end to
1.000 gpm in the southern end of the system, and will discharge into a manifold pipe system.
with dtameters ranging from 1 U to 2u inches.
Phase I Points of Connection
The Project product water pipeline will terminate at a connection to an existing pipeline located
near the intersection of Ortega High« -a% and Rancho Viejo Road. which is connected to
CVW'D's existing reservoir, and the reject brine pipeline will terminate at a connection to the
Chiquita Land Outfall.
A-3
FEEDWATER
SOURCE
(WELLFIELD)
PRODUCT WATER
TO STORAGE
OR DISTRIBUTION
4.67 MGD
(4,800 AFY)
0
HIGH
PRESSURE
PUMP
PRETREATMENT
HANDLING
BLEND
POST
TREATED
PRODUCT
DISINFEC i ION
R/O UNIT
POST TREATMENT
SAN JUAN BASIN DESALTER
DESALTING PROCESS DIAGRAM
Figure 2
A-4
LU
Z
c
m
V
LU
LU
OCEAN
OUTFALL
OCEAN
EXHIBIT B
ANNUALIZED CAPITAL COMPONENT
The Annualized Capital Component shall be computed using only the following incurred
costs by SJB L. fo- the Project:
a. Final design and construction management services.
b. Construction of Project facilities, more particularly described in Exhibit A.
Additional capital improvements that are not consistent with the Project
Description outlined in Exhibit A must be submitted to Metropolitan for review.
Written approval by Metropolitan is required before such costs are considered
eligible for inclusion in the Annualized Capital Component Calculation.
c. Agency administration of the design, construction, and start-up not to exceed
three percent of the eligible construction costs. unless approved in writing by
Metropolitan.
d. Permits, including required data collection.
e. Land. rights-of-way and easements for the Project described in Exhibit A.
f. Concentrate Waste Disposal Connection Fee.
g All contributions as outlined in Section 5.3 of this Agreement shall be treated as
negative capital cost values for the purpose of computing the Annualized Capital
Component.
h. Capital costs similar to those above for Phase II facilities if the unit cost of the
combined production of all Recovered Groundwater reduces Yletropoli.an"s net
contribution for Allowable Yield.
2. Costs of the follow=ing items shall not be used to calculate the Annualized Capital
Component:
a. Distribution and concentrated waste disposal facilities beyond the Project's points
of connection.
Environmental planning, documentation and mitigation measures required to
comply with the California Environmental Quality Act (CEQA).
C. Existing water systems, facilities, land, rights-of-way, and easements owned by
SJBA, or members of the SJBA Project Committee No. 4.
d. Feasibility studies.
0
0
Deposit of any reserve funds required as a condition of financing.
All others not specified in Section 1 of this Exhibit.
Annualized Capital Cost (ACCost) in dollars per year shall be computed using the
following procedure:
a. For fixed -interest rate financing with uniform payments:
ACCost = CRF, x P, + CRF, x P, +...+CRFJ x P,
Where:
Pi is each portion of the incurred capital cost for Project with a distinct financing
arrangement.
CRF , is the capital recovery factor for each distinct financing arrangement, as
follows:
CRF =[ix(1-i)"j/[�!—i)'-i]
i is the interest rate
n is the term of financing (in years) commencing in the first Fiscal Year of
Project operation
j is the number of each separate financing element
in the firs, Fiscal Year and Fiscal Year n+l of production of Allowable Yield.
each amortization for the calculation of ACCost shall be prorated by the number
of days needed to achieve exacti} n years of amortization following the first day
of production of Allowable Yield.
b. For variable -interest rate financing, annual payments shall be computed based on
the actual payments made in applicable Fiscal Year according to SJBA's
financing documents. Any principal payments toward Project capital cost before
the Project operation will be treated as cash. SJBA shall provide Metropolitan
with the accumulated paid principal pursuant to Section 5.1.
C. For fixed -interest rate financing with a non-uniform annual payment schedule, an
economically -equivalent uniform annual payment schedule shall be calculated
based on "Internal Rate of Return" analysis to establish the annualized capital cost.
d. If the Project capital cost is part of a broad financing arrangement that includes
other costs, annual payments shall be calculated by prorating the annual payments
of the broad financing using the ratio of the Project capital cost to total principles
of the financing instrument.
0
e. Project capital costs not covered by a financing arrangement described above and
all grants and contributions as defined in Section 5.3 shall be amortized over
20 years at an interest rate equal to the lesser of: (i) Metropolitan's most recent
weighted cost of long-term debt on June 30 in the year the capital expenditure
occurred; or (ii) the Fiscal Year average of the 25 -bond Revenue Bond Index
(RBI), as published in the Bond Buyer. in the year the capital expenditure
occurred.
All grants or contributions shall be amortized as negative capital cost values
beginning in the year the money was received.
o. After the first Fiscal Year of operation, only refinancing changes that lower the
Annualized Capital Component shall be included in the Annualized Capital
Component calculation of each subsequent Fiscal Year.
h. For all capital financing, cash expenditures, and grants and contributions received
after the Project operation, annual payments shall be calculated, using above
process, beginning in the Fiscal Year the costs occur.
4. The Annualized Capital Component (ACCom) in dollars per acre-foot for purposes of
determining the Project Unit Cost each Fiscal Year shall be calculated using the
follo«im formula:
ACCom = (ACCost) i Recovered Groundwater
Recovered Groundwater shall not be less than 80 percent of Project Capacity in any year
subsequent to initial production of Allowable Yield. Project Capacity in the first
Fiscal Year of production of Allowable Yield shall be prorated based on the number of
days of production of Allowable Yield.
B-3
0
EXHIBIT C
L
OPERATION AND MAINTENANCE COMPONENT
The Operation and Maintenance Component shall be computed using the costs incurred
during the appiicabie Fiscai Year for the fichowing:
a. Professional consulting services for Project operation, maintenance and audits,
excluding daily project operation.
b. SJBA labor costs equal to $205,075 x (Maximum hourly rate for CV WD Utility
Supervisor / $30.88) where $30.88 is maximum hourly rate for CV WD Utility
Supervisor for Fiscal Year 1998-1999. Between July 1 and December 30
following the fifth full Fiscal Year of operation and evA�Q, fifth Fiscal Year
thereafter, any party may request the Coordinating Committee to revise the
allowable labor cost. Labor cost in the first Fiscal Year of production of
Allowable Yield shall be prorated based on the number of days of production of
Allowable
C. Chemicals and supplies for Project operation, maintenance and repair to maintain
reliable system operation and achieve regulatory compliance.
d. Electrical energy use for Proje t facilities:
Project supply wells and treatment plant.
Booster pumps. Energy cost to pump Recovered Groundwater from
Project to CV WD's 425 -foot pressure zone. Supporting data shall be
provided indicating the energy utilized to deliver Recovered Groundwater
to 425 -foot pressure zone. The energy amounts utilized shall be
reasonable and practical regarding said delivery. Electrical energy for
booster pumping shall not exceed 650 kilowatt hours for each acre-foot of
Recovered Groundwater.
Project lighting and general electric needs.
e. Water quality sampling and analysis for the Project.
f, Concentrate waste disposal costs.
g. All contributions as outlined in Section 5.3 of this Agreement shall be treated as
negative values for the purpose of computing Operation and Maintenance
Component.
C-1
h, Replacement parts costs. which are less than or equal to the following amount per
unit:
100,000 x (ENRCCI / 6.694)
Where ENRCCI is the Engineering News Record Construction Cost Index for
Los Angeles area for July of each applicable Fiscal Year. ENRCCI for July 1998
is 6,694.
Operating costs for Phase II facilities and future delivery system and booster
pumping for delivery of product water to MNWD and SMWD. if the unit cost of
the combined production of all Recovered Groundwater reduces Metropolitan's
net contribution for Allowable Yield.
Costs of the following items shall not be used to calculate the-Dperation and Maintenance
Component:
a, Operation and maintenance of distribution and concentrate waste disposal systems
beyond the Project's point of connection.
b. MWDOC'sproject participation.
Replacement parts pursuant to Exhibit D.
d. Payments made to another department or element or member of SJBA other than
for contracted operation of the Project.
e, Leases of land. rights-of-way. water systems. and facilities owned by SJBA. or
members of the SJBA Project Committee No. 4.
Payment by SJBA to any party for Project operation labor costs except as noted in
I b.
e All other operation and maintenance items not specified in Section 1 of this
Exhibit.
3. The Operation and Maintenance Component (O&MC) in dollars per acre-foot for
purposes of determining the actual Project unit Cost each Fiscal Year shall be calculated
using the following formula:
(O&MC) _ (Actual Annual Cost of O&M) / (Recovered Groundwater)
C-2
0
EXHIBIT D
ANNUALIZED REPLACEMENT COMPONENT
The Annualized Replacement Component shall be computed using incurred costs for the
following:
a. Membrane replacement.
Replacement of major parts costing more than the following amounts per unit:
100,000 x (ENRCCI / 6,694)
Where ENRCCI is the Engineering News Record Construction Cost Index for
Los Angeles area for July of each applicable Fiscal Year. ENRCCI for July 1998
is 6,694.
All contributions as outlined in Section 5.3 of this Agreement shall be treated as
negative values for the purpose of computing Annualized Replacement
Component.
Salvage of replaced pans shall be a negative replacement cost.
Replacement costs for Phase II facilities and future delivers system and booster
pumping for delivery of product water to MNWD and SMWD if the unit cost of
the combined production of all Recovered Groundwater reduces Metropolitans
net contribution for Allowable Yield.
Costs of the following items shall not be used to calculate the Annualized Replacement
Component:
a. Replacement of distribution and concentrate waste disposal systems beyond the
Project's points of connection.
b. MWDOC's Project participation.
Any capital or operation and maintenance as previously defined in Exhibits B
and C, respectively.
d. Reserve funds.
D-1
The Annualized Replacement Cost (ARCost) regarding each replacement occurrence
defined in this Exhibit D shall be calculated using the following procedure:
ARCost = (CRF) X (M) + (CRF,) X (R) + ..... CRF;) X (R)
Where:
• CRF is the capital recovery factor used for n years using Metropolitan's default
interest rate.
CRF =[iX(I+i)"]/[(I+i)"-I]
• n is the number of years determined as follows: for membrane replacement, n is
the number of years the replaced membranes were in service; for all other
replacement costs, n is 20 years.
• R is the sum of all costs of replacing major Project parts other than membranes in
a Fiscal Year.
• M is the incurred membrane replacement cost pursuant to this Exhibit D.
• i is Metropolitan's default interest rate and shall be equal to the lesser of:
(a) Metropolitan's most recent cost of long term debt on June 30 for -each
applicable Fiscal Year; or
(b) the Fiscal Year average of the 25 -bond Revenue Bond Index (RBI), as
published by the Bond Buyer. for the Fiscal Year in which the replacement costs
are incurred by SJBA.
j is the Fiscal Year in which a replacement cost is incurred.
The Annualized Replacement Component (ARCom) for each replacement occurrence in
dollars per acre-foot shall be calculated using the following procedure:
ARCom = ARcost / Recovered Groundwater
For purposes of this calculation, Recovered Groundwater shall not be less than 80 percent
of Project Capacity in any, year.
D-2
0
EXHIBIT E
DEFERRED COST
0
Deferred Cost (DC) applicable to the determination of Final GRP contribution for the next Fiscal
Year is computed as follows:
DC = AYP x (PUCP — RateP-250) / RW
Where:
AYP = Allowable Yield in the previous Fiscal Year (AF)
PUCP = Project Unit Cost in the previous Fiscal Year (S/AF) as defined in Section 1.19
RateP = Metropolitan's applicable full service treated water rate in the previous Fiscal
Year (S/AF)
250 = Maximum Final GRP Contribution (S/AF). and
RW= Recovered Water in the Fiscal Year that the reconciliation is performed for
There shall be no DC value carryover upon Agreement termination
If DC is calculated as a negative number using the above equation. DC will be zero.
o:lcon[racnasreeyvijuan.doc
E -I
•
;::. , MWD
r� METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
,.dice 01 Ile General ;Y'aneger
December 9, 1998
Mr. Don Martinson
General Manager
San Juan Basin Authority
27500 La Paz Road
Laguna Niguel, CA 92656
Dear Mr. Martinson:
CAPISTRANO VALLEY
WATER DISTRICT
.UM C/.>
ENG CC -3 0 9'.999 dri
')EC rLJ
RECOMMENDATION FILE
AMON COMh".ENTS INFO
Groundwater Recovery program Agreement for the San Juan Basin Desalter Project
Enclosed for your records is one fully -executed original of the "1998 San Juan Basin Desalter
Project Groundwater Recovery Program Agreement Between the Metropolitan Water District of
Southern California, Municipal Water District of Orange County, and the San Juan Basin
Authority."
If you have any questions concerning the attached agreement, please call Mr. Jose Vergara at
(213) 217-6548.
Very truly oujl�.- .
a Andrew Sienkiewich
Principal Engineer
JPA
o:'mmac,c Vvunjul.doc
Enclosure
0
I. APPROVAL OF BUDGET AyIENDMENT RELATING TO STATE HIGHWAY
UTILITY AGREEMENT NO. 12570 - ORTEG.A HIGHWAY OVERLAY (SR74)
Ass tbrth in the Report dated December 1. 1998. from the Director of Engineering and
Buildin. the Budget Amendment to reimburse Caltrans for removal/replacement and
adjustment f water valve covers in conjunction with the Ortega Highway pavement
rehabilitation oject, at a total cost of $18,318.13, appropriated from Account 50-62434-
4461, was approv
;andaff was authorized to process the Budget Amendment on behalf
of the District. Thproject extended from 1,400 feet east of the I-5 freeway to 1,500
feet east of Aveni
3. APPROVAL UPCONS IKUUINNAUKEEMENI-
4.
As set forth in the Report and Memorandum, oth dated December 1, 1998, from the Public
Works Director, the agreement for recoating of bwMission Hills Reservoir was awarded to
Robison-Prezioso, Inc., at $99.960. The Chairma vas authorized to sign the agreement
following receipt of all insurance, bonds and documen ion.
('DIEHL EVANS)(600.70)
As set forth in the Report dated December 1, 1998, from the Admimative Services
Director, a one-year agreement for annual audit services was approved with Nl, Evans &
Company to perform the 1997-98 fiscal year audit at a cost of $5,500.
BOARD ACTIONS
�L APPROVAL OF MEMORANDUM OF UNDERSTANDING WITH THE SAN
JUAN BASIN AUTHORITY AND RECEIVE AND FILE THE GROUNDWATER
RECOVERY PROGRAM AGREEMENT (600.70)
Written Communications:
Report dated December 1, 1998. from the Public Works Director, advising that the San Juan
Basin Authority's Desalter Project had been approved by the Metropolitan Water District as
a qualifying Groundwater Recovery Program project. However, compliance with the
Groundwater Recovery Program agreement could interfere with the extraction of water by
the Capistrano Valley Water District. The Groundwater Recovery Program Agreement had
been approved by the San Juan Basin Authority in October: items in the Agreement that
required further clarification were addressed through a Memorandum of Understanding with
participating agencies. The Memorandum of Understanding allocated financial obligations
and established terms and conditions that would ensure that the operations of the Desalter
Project would be maintained in compliance with the Groundwater Recovery Program
CVWD Minutes -'--
12/1,98
Agreement. It also ensured cumplianc: vrith a 11l9> agreement bemeen the District, the
Basin :Authoritt and Citv «hich ser tbrth a process to remedy any impairment of the
Districts Lioundwatar extraction caused h\ operation of the Desalter Project. Che Report
recommended that the Memorandum of I nderstanding be approved and the Groundwater
Recovery Program Agreement for the Desalter Project be received and tiled.
Amy Amirani. Public Works Director, madc an oral presentation highlighting various
conditions of the 2dlemorandum of Understanding.
Approval of Memorandum of Understanding/Receive and File Groundwater
Recovery Program Agreement:
It was moved by Director Jones, seconded by Director Campbell and unanimously carried
that the Memorandum of Understanding by and among the Moulton Niguel Water District,
the Santa Margarita Water District and the San Juan Basin Authority be approved. The
Groundwater Recovery Program Agreement was ordered received and filed.
AT BEGINNING OF CITY COUNCIL MEETING)
Report dated Ncember 1, 1998, from the Clerk of the Board.
Mayor Greiner openedurinations for Chairman of the Capistrano Valley Water District.
Director Campbell no min ed Director Greiner for Chairman. There being no further
nominations, it was moved Director Campbell, seconded by Director Swerdlin, and
unanimously carried that Dirce r Greiner be selected as Chairman for a one -year -term
ending December 7, 1999. At the c elusion of the City Council meeting, it was moved by
Director Campbell, seconded by Dir -tor Swerdlin and unanimously carried to rescind
previous selection and to select Director J es to serve as Chairman of the Water District for
the one-year term.
Selection of Vice Chairman (Greiner):
Chairman Greiner opened nominations for Vice Chat an. Director Jones nominated
Director Swerdlin for Vice Chairman. There being no furth nominations, it was moved by
Director Jones, seconded by Director Campbell and unanim sly carried that Director
Swerdlin be selected as Vice Chairman for a one-year term endin ecember 7, 1999. At
the conclusion of the City Council meeting. it was moved by Director ampbell, seconded
by Director Swerdlin and unanimously carried to rescind previous selec n and to select
Director Greiner to serve as Vice -Chairman of the Water District for the one- ear term.
C V W D Minutes -3- 12/1
0
E
AGENDA ITEM December 1, 1998
TO: George Scarborough, General Manager
FROM: Amy Amirani, Public Works Director
SUBJECT: Consideration of Memorandum of Understanding with the San Juan Basin
Authority and the Groundwater Recovery Program Agreement
RECOMMENDATION
By motion,
1. Approve the attached Memorandum of Understanding (MOU) by and among the Moulton
Niguel Water District, the Santa Margarita Water District and the San Juan Basin Authority.
2. Receive and file the Groundwater Recovery Program Agreement by and among the San Juan
Basin Authority, Metropolitan Water District of Southern California (MWD) and the
Municipal Water District of Orange County (MWDOC).
BACKGROUND
The MWD implemented the Groundwater Recovery Program (GRP) in 1991 to encourage local
agencies to treat and make use of degraded groundwater resources. Under this program,
qualifying projects would receive a financial contribution from MWD equal to the difference
between the cost of producing treated groundwater and the cost of purchasing import water from
MWD, up to a maximum of $250 per acre foot. Eligible project costs include pumping, design,
new construction, right of way acquisition. Eligible costs also include operation and maintenance
of project facilities. The term of the agreement is 20 years.
MWD has replaced this program with a new Local Resources Program (LRP) which is much
more difficult to qualify for. In order to participate in the current GRP, a participation agreement
with MWD needs to be approved by the end of 1998.
The San Juan Basin Authority (SJBA) Desalter project has been approved by MWD as a
qualifying project for the GRP. The GRP agreement was approved by the San Juan Basin
Authority on October 21, 1998 and is attached for your information. The GRP Agreement has
conditions that required further legal clarification. These items have been addressed through the
attached Memorandum of Understanding and is complete and ready for submittal.
DESCRIPTION OF THE DESALTER PROJECT
The SJBA currently has an application before the State Water Resources Control Board for the
water rights for this project. The current application requires an environmental evaluation
(CEQA requirements) of the project to be completed. The Envirg4i&nental Impact Report (EIR)
FOR CIN COUNCIL AGE C V WD
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