AGENDA REPORT
Meeting Date: March 15, 2022
Item Number:
To: Honorable Mayor & City Council
From: Robert Welch, P.E., Utilities General Manager
Vince Damasse, P.E., Water Resources Manager
Subject: AUTHORIZE THE CITY MANAGER TO EXECUTE THE FIRST AMENDMENT TO AGREEMENT NO. 4975 - 1998 BEVERLY
HILLS DESALTER PROJECT JOINT PARTICIPATION
AGREEMENT FOR RECOVERY AND UTILIZATION OF
DEGRADED GROUNDWATER BETWEEN THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA AND THE CITY
OF BEVERLY HILLS
Attachment: 1. First Amendment to Agreement No. 4975 - 1998 Beverly Hills Desalter Project
RECOMMENDATION
It is recommended that City Council move to authorize the City Manager to execute the First Amendment to Agreement No. 4975, 1998 Beverly Hills Desalter Project Joint Participation Agreement for Recovery and Utilization of Degraded Groundwater between the Metropolitan Water District of Southern CA (MWD) and the City of Beverly Hills (Desalter Agreement) and authorize the City Manager to execute the amendment. The Desalter Agreement provides a financial incentive to the City of Beverly Hills to produce local water supplies and to offset MWD imported water.
INTRODUCTION
The City of Beverly Hills has historically obtained financial assistance for the Foothill Water Treatment Plant (FWTP) through the Local Resources Program (LRP) administered by the MWD. The LRP provides financial incentives to public and private water agencies to encourage local development of water recycling, groundwater recovery and seawater desalination.
The City of Beverly Hills requested MWD to reinstate the Desalter Agreement executed in 1998 and terminated in July 2020. Due to unforeseen water quality changes discovered in 2015, the FWTP had to be shut down for an extended period of time. The City requested the Desalter Agreement to be extended and reinstated with an •
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Meeting Date: March 15, 2022
amendment to the original Desalter Agreement, adding additional years to the term of the Desalter Agreement. The LRP incentive (credit) of up to $250 per acre-foot (acre-ft) would remain the same in the reinstated Desalter Agreement as in the original Desalter Agreement.
DISCUSSION
On December 9, 1998, the City entered into a Groundwater Recovery Program (GRP) Joint Participation Agreement No. 4975 for the Beverly Hills Desalter Project to utilize groundwater as an alternative source of supply. The FWTP commenced operation in April 2003; operation was halted in 2015 due to unforeseen changes in the water quality of the Hollywood Basin, which provides raw groundwater for the FWTP to treat. The unforeseen changes in the water quality resulted in continued fouling of the reverse osmosis membranes and eventual shutdown of the FWTP. The City responded by conducting water quality testing and a pilot study to determine the best pretreatment method needed to rehabilitate the FWTP. The City had informed MWD about the plant shutdowns and necessary improvements needed to restart the FWTP operations. In June 2020, the City requested an amendment to the original Desalter Agreement to waive the automatic termination clause of the Desalter Agreement and extend its term due to the Plant shutdown.
However, pursuant to Section 9.4.a of the original Desalter Agreement, it automatically terminated on July 1, 2020.
On October 12, 2021, MWD’s Board of Directors authorized the reinstatement and amendment to the original Desalter Agreement to extend the termination date by three (3) additional years. All performance provisions of the original Desalter Agreement would remain in place and the LRP incentives would not exceed the original maximum authorization provided by the Board.
FISCAL IMPACT
Extending the original Desalter Agreement with MWD will enable the City to receive up to a $250 credit for every acre-ft. of groundwater pumped to offset the use of MWD imported water. The anticipated credit could be potentially in the range of $310,000 to $390,000 per annum.
Shana Epstein, Director of Public Works
Approved By
Attachment 1
Beverly Hills -1- First Amendment to Agreement No. 4975 B0785-0001\2623828v2.doc
FIRST AMENDMENT TO AGREEMENT No. 4975
1998 BEVERLY HILLS DESALTER PROJECT
JOINT PARTICIPATION AGREEMENT FOR RECOVERY AND UTILIZATION OF
DEGRADED GROUNDWATER
BETWEEN
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
AND
THE CITY OF BEVERLY HILLS
Beverly Hills -2- First Amendment to Agreement No. 4975 B0785-0001\2623828v2.doc
FIRST AMENDMENT TO AGREEMENT No. 4975
1998 BEVERLY HILLS DESALTER PROJECT
JOINT PARTICIPATION AGREEMENT FOR RECOVERY AND UTILIZATION OF
DEGRADED GROUNDWATER
BETWEEN
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
AND
THE CITY OF BEVERLY HILLS
THE FIRST AMENDMENT (First Amendment) is made and entered into as of October 12, 2021, by and between The Metropolitan Water District of Southern California (Metropolitan) and City of Beverly Hills (City). Metropolitan and City may be collectively referred to as “Parties” and individually as “Party”.
RECITALS
A. On December 9, 1998, Parties entered into a Groundwater Recovery Program (GRP) Joint Participation Agreement No. 4975 (Agreement), for the Beverly Hills Desalter Project (Project) to recover and utilize up to 2,600 acre-feet per year (AFY) of degraded groundwater for potable use within City’s service area.
B. The Project commenced operation in April 2003 and operation was halted in 2015 due to unforeseeable changes in the water quality of the Hollywood Basin, which provides brackish groundwater for the Project. The unforeseen changes in the water quality resulted in continual clogging of the reverse osmosis membranes and eventual shutdown of the water treatment plant (WTP). The City responded by conducting water quality testing and a pilot study to determine the best pretreatment method needed to rehabilitate the water treatment plant. In July 2018 the City’s Council approved to pursue enhancements to the water treatment plant and construction of a water transmission pipeline to secure treatable groundwater from the La Brea Subarea Basin, rehabilitation of existing wells and construction of the new La Cienega Well No. 1. C. The City had periodically informed Metropolitan about the plant shutdowns and necessary improvements needed to restart Project operation. In June 2020, the City requested an amendment to the Agreement to waive the automatic termination clause of the Agreement and extend the term of the Agreement due to the plant shutdown. However, pursuant to Section 9.4.a of the Agreement, the Agreement automatically terminated on July 1, 2020. D. On October 12, 2021, Metropolitan’s Board of Directors authorized staff to reinstate and amend the Agreement to extend the termination date by three years. All performance provisions of the Agreement remain in place and the LRP incentives will not exceed the original maximum authorization provided by the Board.
Beverly Hills -3- First Amendment to Agreement No. 4975 B0785-0001\2623828v2.doc
E. Hence, Pursuant to Section 9.2 of the Agreement, the Parties desire to mutually reinstate and amend the Agreement with this First Amendment as outlined below, effective October 12, 2021. NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, the Parties do agree to amend the Agreement with the First Amendment as follows:
1. Section 9.1 is revised to read:
“9.1 This Agreement will expire on June 30, 2026.”
2. Section 9.4 is revised to read:
“9.4 Metropolitan may terminate this Agreement, Metropolitan’s obligations under this Agreement shall terminate accordingly, upon occurrence of one the following:
a. A material breach of this Agreement by any party other than Metropolitan; or b. Metropolitan is not required to make payments to the City pursuant to the terms of this Agreement for a five-consecutive year period subsequent to the First Amendment date.
Beverly Hills -4- First Amendment to Agreement No. 4975 B0785-0001\2623828v2.doc
3. Add the following text and map to the Exhibit A:
New Project facilities added under this First Amendment Historically, source water for the City’s WTP was extracted by the City’s Wells 2, 4, 5, & 6 from the Hollywood Basin. In 2015, increased levels of fine sand, manganese and iron sulfide in the Hollywood Basin resulted in fouling of the plants existing reverse osmosis (RO) filters and shutdown of the plant. To get the project back online, the City decided to rehabilitate the plant by constructing a new pre-treatment filtration system, construction of the La Cienega Well No. 1 (LCW-1), construction of 9,900 feet of 16-inch transmission main, and rehabilitating approximately 10,000 feet of 14-18 inch pipeline. The proposed Project facilities are shown on the map below.
Pre-Treatment System
The proposed WTP pre-treatment filtration system will include sand separators, oxidant media filter (OMF) and greensand pre-treatment system prior to RO treatment.
Approximately 2.3 MGD of finished water will be pumped into the City’s Sunset Reservoir and distributed into the City’s potable water distribution system.
The La Cienega Well-1 (LCW-1) will extract raw water from the La Brea Subarea Basin of the unadjudicated Central Basin, which is located on Beverly Hills-owned property in the City of Los Angeles. The new transmission line will convey raw water from LCW-1 to the City’s existing WTP for treatment.
Additional Source Water & Wells
New source water from the La Brea Subarea Basin will be extracted by the proposed LCW-1 and conveyed through the new transmission main. The City will blend raw water from the La Brea Subarea Basin with water from the Hollywood Basin prior to treatment at the WTP.
Concentrated Waste Disposal
A by-product of the reverse osmosis treatment process is highly concentrated brine (concentrate). The concentrate from the treatment process will be discharged into the existing sewer system per the City of Beverly Hills waste discharge permit.
Beverly Hills -5- First Amendment to Agreement No. 4975 B0785-0001\2623828v2.doc
DAYTON WAY
un N WAY
OLYMPIC BLVD.
- PROPOSED WATER TRANSMISSION LINE
e PROPOSED LA CIENAGA Will NO. l
- EXISTING BEVERLY HILLS DESALTER
ALDEN DR.
BURTON WAY
•
u OOUX ROAD
LA CIENAGA BLVD.
GUTHRIE AVE.
BEVERLY BLVD.
BEVERLY HILLS DESALTER PROJECT
Beverly Hills -6- First Amendment to Agreement No. 4975 B0785-0001\2623828v2.doc
This First Amendment modifies the Agreement only as expressly set forth above.
This Amendment does not modify, alter, or amend the Agreement in any other way whatsoever.
All other Agreement terms and conditions not expressly set forth above remain unchanged. \\
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment effective as of the date first hereinabove written.
APPROVED AS TO FORM: THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
Marcia Scully
General Counsel
Adel Hagekhalil
General Manager
By: By:
Setha E. Schlang
Senior Deputy General Council
Brad Coffey
Manager, Water Resource Management
Date: _______________________
APPROVED AS TO FORM: CITY OF BEVERLY HILLS
By: By:
Laurence Wiener
City Attorney
George Chavez
City Manager
Date: _______________________