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HomeMy WebLinkAboutItem 11a - Interconnection Water Wheeling Agreement DATE: November 5, 2019 TO: Honorable Mayor and City Council FROM: Tom Tait, Public Works Services Director By: Mandy Jiang, Management Analyst SUBJECT: INTERCONNECTION WHEELING AGREEMENT BETWEEN THE CITY OF ARCADIA AND THE CITY OF SIERRA MADRE Recommendation: Approve SUMMARY The City of Arcadia and the City of Sierra Madre (“Sierra Madre”) jointly constructed and maintain a water interconnection between the two cities located within Sierra Madre Boulevard at the west City limits of Arcadia. The interconnection was established as an alternative water source for Sierra Madre to be used in times of emergency. The City of Arcadia has, from time to time, delivered water to Sierra Madre since the establishment of the interconnection in 2002, yet no formal operating agreement exists. The proposed Agreement would formalize this arrangement and set parameters for the delivery of water from the City’s water system to Sierra Madre through the interconnection. It should be noted that the proposed Agreement would not alter the water rights of either City. Further, this Agreement is intended to serve as the precursor to another agreement where the Cities of Arcadia and Sierra Madre propose to jointly establish and operate a well in the Main San Gabriel Basin, to the benefit of both agencies. It is recommended that the City Council approve, and authorize and direct the City Manager to execute the Interconnection Wheeling Agreement between the City of Arcadia and the City of Sierra Madre. BACKGROUND The City of Arcadia’s primary water supply originates from both the Main San Gabriel Basin (the “Main Basin”) and the Raymond Basin, with the former as the primary source of supply. The Main Basin Judgement allows producers to pump in excess of the annual Interconnection Wheeling Agreement November 5, 2019 Page 2 of 4 Operating Safe Yield, subject to a Replacement Water Assessment. The Main Basin uses funds collected from producers’ overproduction to purchase imported water from the Metropolitan Water District (“MWD”), as a supplemental means to recharge the basin. The Raymond Basin is divided into an eastern unit, the Santa Anita Subarea, a central unit, the Pasadena Subarea, and a western unit, the Monk Hill Subarea. The Cities of Arcadia and Sierra Madre are the sole water producers within the Santa Anita Subarea. Due to the Santa Anita Subarea’s longstanding overdraft condition and decline in water levels, the Raymond Basin Management Board has limited annual water production for a number of years, which has impacted both cities’ overall water rights. As the sole water producers in the Santa Anita Subarea, the Cities of Arcadia and Sierra Madre have been working together to improve groundwater levels in the Santa Anita Subarea through a collaboration of methods. These methods include reduced pumping, frequent monitoring of water quality and ground water levels, and enhancements to the Santa Anita Spreading Grounds. Due to the lasting impact of the last drought, the City of Arcadia and Sierra Madre will continue to develop ways to augment groundwater levels in the Santa Anita Subarea. Staff from both cities are working together on a location for joint well in the City of Arcadia. The City of Sierra Madre’s City Council recently approved cost sharing with the City of Arcadia for costs associated with a joint well. At a future City Council meeting, the Public Works Services Department will bring forward a joint well agreement for City Council consideration. Sierra Madre’s primary water source is from wells located in the Santa Anita Subarea. In 2002, the two cities jointly established an interconnection between their respective water distribution systems with the aid of federal grant funding from the United States Environmental Protection Agency. The purpose for establishing the interconnection was to aid Sierra Madre by providing a secondary source of supply, should their wells become inoperable due to mechanical failure or natural disaster. The City of Arcadia has, on occasion, delivered water to Sierra Madre since the establishment of the interconnection. This proposed agreement will formalize and set the terms of water delivery from the City’s water system to Sierra Madre. In more recent years, Sierra Madre established a treated water connection with the Metropolitan Water District to supplement water demands. The establishment of a joint well with the City of Arcadia would provide a third source, further diversifying their water supply portfolio and system redundancy. The City of Arcadia would benefit from the added redundancy of the joint well, particularly in cost-sharing with Sierra Madre. DISCUSSION The purpose of the proposed agreement is to set parameters and formalize the delivery of water through the City of Arcadia’s water system to Sierra Madre via the 12-inch interconnection. The proposed agreement includes a provision for Sierra Madre to pay Interconnection Wheeling Agreement November 5, 2019 Page 3 of 4 the City of Arcadia $25,000 per year for capacity in our water system that may be used to wheel water for Sierra Madre. The $25,000 is a sort of retainer fee and shall be due and payable whether Sierra Madre asks for water to be delivered or not. Additional key provisions in the agreement include the following:  The Agreement does not create additional water rights than what both cities already possess.  The term of the Agreement is in perpetuity unless and until both cities agree in writing to terminate it, or Sierra Madre individually, establishes a well in the Main Basin.  Sierra Madre agrees to pay the City of Arcadia for costs associated with pumping activities that the City of Arcadia incurs as a result of wheeling water for Sierra Madre; the amount of which will be determined by an independent engineering analysis.  Sierra Madre shall notify the City of Arcadia in writing at least 72 hours prior to the requested delivery and the City of Arcadia agrees to work in good faith to satisfy Sierra Madre’s timely request for water.  In no event will the City of Arcadia become liable for failing to deliver the requested water if, in its sole discretion, the City determines it is unable to do so for any reason.  In the event the City of Arcadia determines, in its sole discretion, that an emergency exists, the City may reduce flows through the interconnection. The City of Arcadia will be fully reimbursed for any costs incurred for wheeling water to Sierra Madre, including staff time, electrical charges, and wear and tear on the system. Sierra Madre will separately be responsible for the cost of the water itself, which will be paid to the appropriate water agencies. In addition, the City of Arcadia will receive $25,000 annually to cover any costs associated with readiness to use the interconnection. There are no liabilities that would be created and the City can cancel the agreement at any time. As such, it is recommended that the City Council approve the proposed Agreement. ENVIRONMENTAL IMPACT The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. FISCAL IMPACT Per the terms of the proposed Agreement, the City of Sierra Madre agrees to pay $25,000 per year to the City of Arcadia for usage of the interconnection. Additional costs associated with pumping and other costs incurred will be billed to Sierra Madre Interconnection Wheeling Agreement November 5, 2019 Page 4 of 4 annually, based on the amount of water wheeled to Sierra Madre through the interconnection. RECOMMENDATION It is recommended that the City Council approve, and authorize and direct the City Manager to execute an Interconnection Wheeling Agreement between the City of Arcadia and the City of Sierra Madre. Attachment: Proposed Interconnection Wheeling Agreement 1 INTERCONNECTION WHEELING AGREEMENT BETWEEN THE CITY OF ARCADIA AND THE CITY OF SIERRA MADRE This Agreement (“Agreement”) is entered into as of the ___ day of ______ 2019 by and between the City of Arcadia (“Arcadia”), a municipal organization organized under the laws of the State of California, and the City of Sierra Madre (“Sierra Madre”), a general law city organized under the laws of the state of California, hereinafter referred to individually as “Party” and collectively as “Parties”. RECITALS WHEREAS, beginning sometime in 2002, Arcadia and Sierra Madre informally agreed that Arcadia would wheel water from its system to Sierra Madre through a 12- inch interconnection near Santa Anita Avenue in Arcadia and Sierra Madre Boulevard in Sierra Madre (“Sierra Madre Boulevard Interconnection”); and WHEREAS, the Parties entered into a written agreement on July 3, 2002 (“2002 Agreement”) to construct the Sierra Madre Boulevard Interconnection, in addition to a 12-inch pipeline from the Sierra Madre Boulevard Interconnection to a settling basin in Sierra Vista Park in Sierra Madre; and WHEREAS, the purpose of the Sierra Madre Boulevard Interconnection is to provide Sierra Madre with a secondary source of water in case of earthquakes and other emergencies; and WHEREAS, in the 2002 Agreement, each Party agreed to maintain that portion of the Sierra Madre Boulevard Interconnection within its incorporated area in accordance with that Party’s ordinances, regulations, policies, and procedures; and WHEREAS, the Parties now desire to formalize in writing their informal wheeling agreement from 2002, as well as provide a general framework for Arcadia to wheel water to Sierra Madre from the Sierra Madre Boulevard Interconnection made available by a shared well that the Parties may develop and operate in the future. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL OBLIGATIONS SET FORTH HEREIN, THE PARTIES AGREE AS FOLLOWS: 1. PROVISION OF WATER. By and under the terms of this Agreement, Arcadia agrees to wheel water through its water system to be delivered to Sierra 2 Madre at the Sierra Madre Boulevard Interconnection during the term of this Agreement in an amount not to exceed 1,200 gallons per minute (“GPM”), subject to those limitations set forth in Sections 7, 8, and 12 of this Agreement. All such water delivered shall come into the possession of Sierra Madre on the Sierra Madre side of the Sierra Madre Boulevard Interconnection. 2. WATER RIGHTS. The Parties agree that this Agreement does not create any additional rights to water than the Parties already possess. To the extent either Party is exercising any of its water rights by operation of this Agreement, the wheeling of the water associated with such water rights will be subject to this Agreement. 3. DEFINITIONS. When used in this Agreement, the following terms have the meanings set forth below: (a) “Emergency” will mean any condition that will result in Arcadia being unable to serve its respective customers. Conditions that may constitute an emergency include, but are not limited to, facility failure, drought conditions, contractual cutbacks of water supplies, or water quality failures. (b) “Maintenance” is the regular/predicted exercising, flushing and/or minor repairs of the Sierra Madre Boulevard Interconnection. (c) “Sierra Madre Boulevard Interconnection ” means the pipeline interconnection, valves, meters and related facilities at Sierra Madre Boulevard in Sierra Madre near Santa Anita Avenue in Arcadia as described in greater detail in Exhibit “A” to this Agreement. (d) “Party Representative” means the person (and alternates) designated from time to time by Arcadia or Sierra Madre authorized to take actions under the Agreement, to the extent permitted by the governing body. (e) “Year” will mean the twelve-month period from July 1 through June 30, both dates inclusive. 4. TERM. The Agreement will be effective upon execution by both Parties and will last in perpetuity unless and until the Parties agree in writing to terminate it, or causes beyond the control of either Party render(s) it impractical or impossible for either Party to carry out their respective obligations under the Agreement, or until such a time that both parties jointly, or Sierra Madre individually, establish and operate a well in the Main San Gabriel Basin. The Parties agree to revisit this Agreement sometime on or before 2044. 3 5. PAYMENT. Sierra Madre agrees to pay $25,000 per year to Arcadia for capacity in Arcadia’s water system that may be used to wheel water for Sierra Madre, and which water may be delivered through the Sierra Madre Boulevard Interconnection. Sierra Madre will pay the full amount of $25,000 within 30 days following the first day of each Year, which payment will apply to the capacity of Arcadia’s water system, if any, for that Year. 6. COSTS. In addition to the payment set forth in Section 5 of this Agreement, Sierra Madre will pay Arcadia for costs associated with pumping activities (“Pumping Costs”) that Arcadia incurs as a result of wheeling water for Sierra Madre during the Year, which amount will be determined by an engineering analysis that the Parties agree in good faith to have prepared in a fair and equitable manner. Consistent with the California Water Wheeling Statutes, Sierra Madre will also pay Arcadia for other costs Arcadia incurs as described in Water Code, section 1811(c) as determined in the sole but reasonable discretion of Arcadia (“Other Costs”). Arcadia will send Sierra Madre a written bill on or around the last day of each Year generally describing the Pumping Costs and Other Costs Arcadia incurred throughout the Year as a result of wheeling water for Sierra Madre, and Sierra Madre will pay Arcadia the amount stated within 30 days of receiving the bill. Sierra Madre will bear all costs it incurs relating to water delivered under this Agreement, unless otherwise specified herein. 7. CALL FOR WATER. If Sierra Madre desires to receive water wheeled through Arcadia’s water system at the Sierra Madre Boulevard Interconnection, it will provide Arcadia with written notice at least 72 hours before the requested delivery. The timely written notice must provide the amount of water Sierra Madre desires to have delivered through the Sierra Madre Boulevard Interconnection in GPM, not exceeding 1,200 GPM, and must specify the duration of the delivery. Arcadia agrees to work diligently and in good faith to satisfy Sierra Madre’s timely requests for water under this Agreement, but in no event will Arcadia become liable for failing to deliver the requested water if, in its sole discretion, Arcadia determines it is unable to do so for any reason. Arcadia will have no obligation to obtain or procure alternative water supplies to meet Sierra Madre’s requests other than a reasonable amount that Arcadia’s water system is able to make available at the time Sierra Madre provides Arcadia with written notice of its request, and provided that Arcadia determines, in its sole discretion, that it is able to meet Sierra Madre’s request. Within a reasonable time following receipt of a written request for water from Sierra Madre under this Agreement, Arcadia will provide Sierra Madre with notice that it will or will not be able to meet Sierra Madre’s request. In no event will Arcadia be liable for any damage or injuries sustained by Sierra Madre or any other person, business, or entity as a result of not delivering water requested by Sierra Madre, or reducing flow through or shutting off the Sierra Madre Boulevard Interconnection. Sierra Madre agrees that if Arcadia determines it can deliver water to Sierra Madre through the Sierra Madre Boulevard Interconnection, it may elect to do so only during off-peak periods of demand, as determined solely by Arcadia. 4 Sierra Madre also agrees that it will generally not seek wheeled water deliveries under this Agreement during the summer months, from June 1 to September 1 in any Year, unless otherwise agreed to by the Parties. 8. EMERGENCIES. In the event Arcadia determines, in its sole discretion, that an Emergency exists, Arcadia may reduce flows through the Sierra Madre Boulevard Interconnection, or may shut off the Sierra Madre Boulevard Interconnection completely. In no event will Arcadia be liable for any damage or injuries sustained by Sierra Madre or any other person, business, or entity as a result of reducing flow through or shutting off the Sierra Madre Boulevard Interconnection during an Emergency. 9. MEASUREMENT. The Parties agree that the meter measuring water flows through the Sierra Madre Boulevard Interconnection will be tested on or around [July 1] of each Year, and either Party may request to have the 8” meter tested, in addition to the annual meter test, at their own cost, provided the Party informs the other Party of their intent to do so in a timely manner. 10. MAINTENANCE. Each Party agrees that it will maintain, at its own cost and expense, the portion of the Sierra Madre Boulevard Interconnection within that Party’s incorporated area in accordance with its ordinances, regulations, policies, and procedures. 11. WATER QUALITY. Arcadia agrees to operate its pipelines in such a manner that any water which Arcadia delivers to Sierra Madre pursuant to this Agreement will not be diminished in quality as a result of being delivered. The Parties agree that the water delivered by Arcadia to Sierra Madre will meet, at a minimum, the State of California's Department of Drinking Water standards for domestic use. 12. RESPONSIBILITIES FOR DELIVERY AND DISTRIBUTION OF WATER. Neither Arcadia nor its officers, agents or employees will be liable for the control, carriage, handling, use, disposal, or distribution of the water outside of facilities then being operated or maintained by Arcadia. 13. INDEMNIFICATION. Each Party will defend, indemnify, and hold harmless the other Party, its officers, agents, employees, and volunteers from and against all claims, damages, losses, and expenses, including attorney fees arising out of the performance of the work described herein, caused in whole or in part by any intentional or negligent act or omission of the other Party, save and except those matters arising from the sole, active negligence, or willful misconduct of that party or agent of that Party. This indemnity specifically includes, but is not limited to, claims or damages arising from or related to the quality, type, or character of the water delivered for wheeling, or the control, handling, carriage, use, distribution, 5 disposal, or consumption of the water delivered to the applicable delivery point, or the construction or maintenance of the pipelines. The Parties intend that this paragraph be broadly construed to effectuate its purpose. 14. REMEDIES NOT EXCLUSIVE. The use by either Party of any remedy specified for the enforcement of this Agreement is not exclusive and does not deprive the Party using such remedy of, or limit the application of, any other remedy provided by California or federal law. 15. DISPUTE RESOLUTION. Any controversy or dispute between or among Arcadia and Sierra Madre concerning implementation, interpretation, application, performance or lack of performance of this Agreement or its breach will be addressed in joint consultation and negotiation with duly appointed representatives of Arcadia and Sierra Madre and approved by the City Councils for Arcadia and Sierra Madre. 16. MEDIATION AND ARBITRATION. (a) Any controversy or dispute between or among Arcadia and Sierra Madre concerning implementation, interpretation, application, performance or lack of performance of this Agreement, and any claim arising out of this Agreement or its breach that cannot be resolved pursuant to Section 15 above, will be resolved under this Section. Arcadia and/or Sierra Madre will provide each other with written notice of a demand for arbitration within ninety (90) days from the date of the occurrence giving rise to the controversy, dispute or claim that is the basis for the demand. The notice will state the facts that give rise to the demand for arbitration, the date of the occurrence, the parties to the arbitration and the remedy sought. The Parties will facilitate an effort to resolve the dispute through informal mediation on a voluntary basis during the thirty-day period following the demand for arbitration. Thereafter, if Arcadia and/or Sierra Madre have not agreed to a resolution of the dispute or an extension of time, the dispute will be resolved by binding arbitration under the California Arbitration Act (Code of Civil Procedure sections 1280 through 1294.2), except as otherwise provided herein. The Parties in the arbitration will select a single neutral arbitrator. If they cannot agree on one arbitrator, or an alternative selection process, Parties will request the presiding judge of the Los Angeles County Superior Court to select an arbitrator, under Section 1281.6 of the Code of Civil Procedure. (b) A hearing on the matter to be arbitrated will take place before the arbitrator in the County of Los Angeles at a time and place selected by the arbitrator. However, the hearing will take place no later than thirty days after selection of the arbitrator, unless the parties unanimously agree to extend this time. The arbitrator will select the time and place for the hearing and will give each party written notice of the time and place at least twenty days before the date of the hearing. At the hearing, any relevant evidence may be presented by any party and the formal rules of evidence 6 applicable to judicial proceedings will not apply. Evidence may be admitted or excluded in the sole discretion of the arbitrator. The arbitrator will hear and determine the matter, and will resolve in writing the dispute among the parties. The decision of the arbitrator will be binding and conclusive. (c) The ongoing costs of the arbitration, including the arbitrator's fees, and reasonable costs incurred by Arcadia and/or Sierra Madre to facilitate the mediation and the arbitration, will be borne equally by the Parties. At the conclusion of the arbitration, the prevailing party will be entitled to recover from the losing party the costs of arbitration (but not mediation costs), in addition to reasonable attorney's fees, expert witness fees and other costs as part of the arbitrator's decision. 17. CHOICE OF LAW. This Agreement and the rights of the Parties hereunder will be governed by and construed in accordance with the laws of the State of California, exclusive of conflict or choice of law rules. 18. WAIVER OF RIGHTS. Any waiver at any time by either Party of its rights with respect to a breach or default, or any other matter arising in connection with this Agreement, will not be deemed to be a waiver with respect to any other breach, default or matter. 19. CONTROLLING AGREEMENT. This Agreement supersedes any previous written, verbal, or other agreement, formal or informal, governing the Parties’ conduct and obligations with respect to Arcadia wheeling water through its water system for Sierra Madre to be delivered to Sierra Madre through the Sierra Madre Boulevard Interconnection. 20. ASSIGNMENT. The provisions of this Agreement will apply to and bind the successors and assigns of the respective Parties, but no assignment or transfer of this Agreement, or any part hereof or interest herein, will be valid until and unless approved by both Parties. 21. OPINIONS AND DETERMINATIONS. Where the terms of this Agreement provide for action to be based upon judgment, approval, review, or determination of either Party, such terms are not intended to be and will never be construed as permitting such opinion, judgment, approval, review, or determination to be arbitrary, capricious, or unreasonable. 22. NOTICES. All written notices that are required either expressly or by implication to be given by any Party to the other under this Agreement will only be signed by authorized personnel of the notifying Party. Except written calls for water, as set forth in Section 7 of this Agreement, any written notices to Parties required by this Agreement will be delivered or mailed, U.S. first class postage prepaid, addressed as follows: 7 City of Sierra Madre (Sierra Madre) City of Arcadia (Arcadia) Jose Reynoso Tom Tait Utilities Director Public Works Services Director City of Sierra Madre City of Arcadia 232 W. Sierra Madre Boulevard 11800 Goldring Road Sierra Madrea, CA 91024 Arcadia, CA 91006 jreynoso@cityofsierramadre.com ttait@ArcadiaCA.gov Either Party may amend its address for notice by sending written notice to the other Party. 23. INSPECTION OF BOOKS AND RECORDS. The proper officers or agents of each Party will have full and free access at all reasonable times to the account books and official records of the other Party insofar as they pertain to the matters and things provided for in this Agreement, with the right at any time during office hours to make copies thereof at that Party’s expense. 24. INTEGRATION. This is an integrated Agreement and contains all of the terms, considerations, understanding and promises of the Parties. It will be read as a whole. 25. SEVERABILITY. The invalidity or unenforceability of any provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect. 26. ATTORNEY'S FEES. In any action brought by either Party to enforce the terms of this Agreement, the prevailing party will be entitled to recover its reasonable attorney's fees. 27. COUNTERPARTS. This Agreement may be executed in counterparts. 8 SIGNATURE PAGE TO INTERCONNECTION AGREEMENT I HEREBY CERTIFY that the foregoing Agreement was duly executed pursuant to authorization by THE CITY OF SIERRA MADRE City Council, at a regular meeting thereof held on the _________________day of ______________________ 2019. ____________________________________ ______________________________ Title Date City Council ATTEST: ____________________________________ ______________________________ Title Date APPROVED AS TO FORM: ____________________________________ ______________________________ Title Date 9 SIGNATURE PAGE TO INTERCONNECTION AGREEMENT I HEREBY CERTIFY that the foregoing Agreement was duly executed pursuant to authorization by CITY OF ARCADIA City Council, at a regular meeting thereof held on the ___________________ day of ________________________ 2019. By Dominic Lazzaretto City Manager Date: ______________________ ATTEST: ___________________________ City Clerk APPROVED AS TO FORM: ___________________________ Stephen P. Deitsch City Attorney CONCUR: ___________________________ Tom Tait Public Works Services Director 10 “ATTACHMENT A” WATER SYSTEM INTERCONNECTION POINT AT SANTA ANITA AVENUE AND SIERRA MADRE BOULEVARD The installation of a new 12-inch waterline with an 8-inch water meter in a vault within Sierra Madre Boulevard that is to provide a secondary source of water from the City of Arcadia’s water distribution system to the City of Sierra Madre’s water system near Sierra Vista Park.