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January 20, 2026
ITEM TITLE
Agreements: A pprove Second Amended and Restated Regional Wastewater Disposal Agreement and Metropolitan Sewerage System Administrative Agreement No. 1 for Unified Management of Industrial Waste Discharge Pretreatment and Enhanced Source Control Programs Report Number: 26-0036
Location: No specific geographic location
Department: Engineering
G.C. § 84308 Regulations Apply: No
Environmental Notice: The proposed action is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt resolutions: A) Approving the Second Amended and Restated Regional Wastewater Disposal Agreement; and B) Approving the M etropolitan Sewerage System Administrative Agreement No. 1 for Unified Management of Industrial Waste Discharge Pretreatment and Enhanced Source Control Programs.
SUMMARY
On September 18, 2018, per Resolution 2018 -187, the City of Chula Vista approved the Amended and Restated Regional Wastewater Disposal Agreement (the “ARA”). In an effort to address the outstanding items of the ARA, City of San Diego and Participating Agencies, including the City of Chula Vista wish to amend and restate the ARA as provided in the Second Amended Restated Regional Wastewater Agreement (the “SARA”).
In this action, the City of San Diego and the Participating Agencies (PA), including the City of Chula Vista agreed to negotiate certain costs relating to the Industrial Pretreatment and Source Control Program to be charged as Metro System Costs to City of San Diego and PA. Administrative Agreement No. 1 will formalize the agreement between City of San Diego and the PA for unified management of Industrial Waste Discharge Pretreatment and Enhanced Source Control Programs.
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ENVIRONMENTAL REVIEW
The proposed action was reviewed for compliance with the California Environmental Quality Act (CEQA) , and it was determined that the activity is not a “Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
A. Second Amended Restated Regional Wastewater Agreement (SARA):
The Point Loma Wastewater Treatment Plant (PLWTP) is a regional facility in the Metropolitan Sewerage System (Metro System) and is permitted to treat 240 million gallons per day (MGD) of regional wastewater to an Advanced Primary Level. Operated by the Ci ty of San Diego, the PLWTP was constructed in 1963 and is the backbone of the Metro System. The City of Chula Vista’s average of 16.7 MGD of wastewater is treated at PLWTP.
The City of Chula Vista is one of 12 PAs that convey wastewater to the PLWTP for treatment. The Metro Wastewater Joint Powers Authority (Metro JPA) is a joint powers agency composed of 12 local public PAs each having the authority to provide and contract for the conveyance, treatment, and disposal of wastewater. The Metro JPA represents over 800,000 sewer rate payers and provides more than $105M a year in contributions to the Metro System. As a result, t he Metro JPA and the City of San Diego are partners in overseeing PLWTP.
The Federal Clean Water Act, passed in 1972, required that all wastewater treatment plants be permitted with a National Pollutant Discharge Elimination System (NPDES) permit. The permitting process in California involves the Environmental Protection Agency, the Regional Water Quality Control Board, the State Water Resources Control Board and the California Coastal Commission.
The Clean Water Act required wastewater treatment plants to treat wastewater to at least a secondary level. The actual treatment requirements vary depending on whether discharging to a lak e, river or ocean as well as specific characteristics of the receiving water body.
Several years after the Clean Water Act was enacted, it was amended to allow a modified permit (waiver of secondary treatment) if the discharger could demonstrate the safe discharge of wastewater to the receiving water. Initially, the City of San Diego app lied for a modified permit for PLWTP, but later withdrew the application and began planning to convert PLWTP to secondary treatment. During this time, the window for applying for modified permits closed and the City of San Diego had not begun the construction to convert PLWTP.
In 1994, the Ocean Pollution Reduction Act (OPRA) was passed by the Federal government modifying the Clean Water Act. OPRA re -opened the window to apply for a modified permit (waiver of secondary treatment) and gave the City of San D iego the opportunity again to apply for a modified permit for PLWTP. In response to the support from the environmental community, the City of San Diego agreed to construct facilities to provide 45 MGD of reclaimed water capacity. This resulted in the con struction of P a g e | 3
the North City Water Reclamation Plant, the South Bay Water Reclamation Plant and the South Bay Ocean Outfall. The City of San Diego was granted the first modified permit for PLWTP in 1994.
Regional Wastewater Disposal Agreement 1998
During this period there were some challenges between the City of San Diego and the PAs. The PAs felt that the City of San Diego was operating the Metro System and making large financial decisions without their input or consideration. The disputes led to the creation of the 1998 Regional Wastewater Disposal Agreement (Attachment s 1 and 2) and the formation of the Metropolitan Wastewater Commission (Metro Commission).
The City of San Diego and the PAs, entered into the Regional Wastewater Disposal Agreement dated May 18, 1998 (the “1998 Agreement”), which provided, among other things, for certain contract rights to capacity in the Metropolitan Sewerage System, a system of wastewater conveyance, treatment, and disposal facilities (“Metro System”) and the establishment of a mechanism to fund the planning, design, construction, operation, and maintenance of the Metro System by the City of San Diego and the PAs.
The purposes of the 1998 Agreement were: (1) to replace the prior-existing sewage disposal agreements between the City of San Diego and the PAs; (2) to provide certain contract rights to capacity in the Metro System to the PAs; (3) to establish a mechanism to fund the planning, design, construction, operation and maintenance of the Metro System by the City and the PAs as necessary to provide hydraulic capacity, and to comply with applicable law and with generally accepted engineering practices; and (4) to establish a system of charges which allocates the costs of the planning, design and construction of such new wastewater conveyance, treatment and disposal facilities as necessary solely to provide for new capacity on a fair and equitable basis.
Pure Water
On April 29, 2014, the City of San Diego City Council approved the Pure Water San Diego program by adoption of Resolution No. R-308906, which approved and supported the City of San Diego’s efforts to develop an implementation strategy to offload wastewater flow from the PLWTP through implementation of potable reuse, resulting in effluent discharged to the Pacific Ocean being equivalent to what would be achieved by upgrading the P LWTP to a secondary treatment plant (secondary equivalency).
The City of San Diego is implementing a phased, multi-year program designed to achieve compliance with the Clean Water Act and r egionally produce up to 83 MGD of safe, reliable potable water using new, expanded, or modified facilities, some of which will include Metro System facilities, in order to achieve secondary equivalency at the Point Loma Wastewater Treatment Plant.
Currently, the Pure Water Program will not only benefit the City of San Diego by producing repurified water, but also the PAs, and their wastewater customers, especially if secondary equivalency is recognized through federal legislation amending the Clean Water Act. Specifically, the implementation of the Pure Water Program will reduce wastewater discharges to the P LWTP, part of the Metro System where a large portion of the PAs’ wastewater is currently treated and disposed of by discharging it into the Pacific Ocean. By diverting wastewater from the P LWTP and reducing the effluent discharged into the Pacific Ocean, the City of San Diego and the PAs will potentially avoid billions of dollars in P a g e | 4
unnecessary capital and operating costs to upgrade the Point Loma plant to secondary treatment at full capacity. Avoiding such costs would result in significant savings for regional wastewater customers and achieve environmental benefits by reducing ocean discharge.
Amended and Restated Regional Wastewater Disposal Agreement (ARA) Effective on or around August 22, 2021, the City of San Diego and the PAs, amended the 1998 Agreement by executing an Amended and Restated Regional Wastewater Disposal Agreement (the “ARA”) to address the costs and revenues associated with Phas e 1 of the Pure Water Program, including specific cost allocations related to the construction, expansion, and/or modification of Metro System facilities and Water Repurification System facilities designed to produce up to 30 MGD of Repurified Water (“Phase 1”; Attachments 3 and 4). The ARA provided that within one year of its effective date, the Parties would meet and negotiate in good faith regarding one or more amendments to the ARA or to its Exhibits to address multiple outstanding items described in Section 2.9 of the ARA.
In an effort to address in good faith the outstanding items described in Section 2.9 of the ARA, and comprehensively and equitably address the costs, revenues, and billing system associated with the Pure Water Program and the related construction, expansion, and/or modification of Metro System facilities beyond Phase 1, the City of San Diego and PAs, including the City of Chula Vista wish to approve a second amendment and restate the ARA as provided herein (Attachment 5).
B. Administrative Agreement No. 1
As noted earlier, t he City of San Diego operates the Metro System, a regional wastewater system that collects, treats and disposes of wastewater generated from within City of San Diego boundaries and from within the service areas of the PAs, in accordance with NPDES Permit No. CA107409 and California Waste Discharge Requirements.
The City of San Diego desires to carry out a uniform industrial waste disposal, pretreatment and enhanced source control program (“Industrial Pretreatment and Source Control Program,” as defined in Attachment 6) on behalf of itself and the PAs in the Metro System throughout the Metro System service area; and to help ensure that the City of San Diego can meet the requirements of its NPDES permits, including implementation of both indirect potable reuse under Phase 1 of Pure Water San Diego and a potential future direct potable reuse (“DPR”) program.
The City of San Diego and the PAs determined that the centralized operation of an Industrial Pretreatment and Source Control Program provides certain General Benefits (as defined in Attachment 6) to all users of the Metro System. Absent an Industrial Pretreatment and Source Control Program providing these General Benefits, the increased costs would be incurred as gener al treatment and disposal costs of the Metro System. Additionally, any PA with industrial users in their jurisdiction would also incur the costs of operating their own program.
Pursuant to Government Code Sections 6502 and 6513, the PAs may delegate to the City of San Diego full authority to carry out a common Industrial Pretreatment and Source Control Program, on behalf of the City of San Diego and the PAs, which meets the requirements of federal and state law, including City of P a g e | 5
San Diego’s required permi ts, and is consistent with the Industrial Pretreatment and Source Control Program ordinances enacted by the City of San Diego and each PA, as amended from time to time.
Pursuant to such delegation, the City of San Diego may issue industrial user permits or discharge authorizations to Industrial Users, levy and collect industrial waste discharge, pretreatment, and permitting fees, fines and penalties, and recover other cos ts of monitoring and enforcement from industrial and other users discharging to the Metro System on behalf of the PAs.
Currently, the costs related to the industrial discharges inspection, monitoring, and enforcement program within the City of San Diego’s boundaries, including related administrative and laboratory costs, are excluded from the amounts charged by the City of San Diego as Metro System Costs to City of San Diego and the PAs pursuant to section 5.2.1.2.3 of the Amended and Restated Regional Wa stewater Disposal Agreement (“ARA” as defined further herein).
The City of San Diego and the PAs agreed, pursuant to section 2.9.1.3 of the ARA, to negotiate in good faith to allow certain costs relating to the Industrial Pretreatment and Source Control P rogram to be charged as Metro System Costs to City of San Diego and PAs in recognition of the General Benefits that the program provides to the Metro System.
Based on the above, the PAs agree to delegate to the City of San Diego, as the agent of each PA, and the City of San Diego agrees to accept, the authority and responsibility for diligently inspecting, monitoring and enforcing the City of San Diego’s Industrial Pretreatment and Source Control Program ordinances on behalf of the PAs within their respect ive boundaries through administrative or legal proceedings, with the PAs working in coordination with the City of San Diego as necessary in enforcement efforts. However, to be clear, t he City of San Diego shall not be responsible for, and does not accept authority or responsibility to inspect, monitor or enforce any source control program requirements for any PA’s NPDES permits.
The City of San Diego and the PAs intend for all costs relating to the Industrial Pretreatment and Source Control Program be recovered, to the maximum extent permissible by law, through fees, costs, charges, and fines billed directly to Industrial Users subject to the Industrial Pretreatment and Source Control Program, and for such fees, costs, charges, and fines to be reviewed and updated periodically to ensure maximum cost recovery. These costs include, but are not limited to, costs of permitting, inspection, compliance monitoring, setting of local limits, source control, and enforcement.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of th e City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal Gov’t Code §87100, et seq.) Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
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There is no additional fiscal impact to the City’s Sewer Enterprise Fund in the current fiscal year as a result of this acti on. Existing sewer rates generate sufficient revenue to fund ongoing operations, maintenance, repair, rehabilitation , system expansion, and treatment costs. The Sewer Enterprise Fund is primarily supported by user fees, and the current rate plan generates sufficient revenue to meet the financial obligations for wastewater service and equitably recover costs from customers. The current rate plan expires on June 30, 2026, and will be updated to incorporate the pro-rata share of the Pure Water Program costs as determined by the Metro JPA.
ONGOING FISCAL IMPACT
The five-year financial plan adopted by the City Council for the period of fiscal year 2021-22 through fiscal year 20 25-26 was developed using a robust and dynamic cash flow model that mirrors the utility’s accounting structure and operational requirements. The model anticipated potential changes in operating costs, including increases in wastewater treatment costs associated with the upgrade of City of San Diego’s Point Loma Wastewater Treatment Plant (PLWTP). To address future cost impacts beyond the current rate plan, the Department of Engineering & Capital Projects will initiate an updated sewer rate study in fiscal year 2025-26 to support adoption of a new sewer rate effective July 1, 2026.
ATTACHMENTS
1. Master Wastewater Disposal Agreement 1998
2. Council Resolution 18968
3. Amended and Restated Regional Wastewater Disposal Agreement
4. Council Resolution 2018-187
5. Second Amended and Restated Regional Wastewater Disposal Agreement
6. Administrative Agreement No. 1
Staff Contact: Eddie Flores, Assistant Director of Engineering and Capital Projects Patrick Moneda, Principal Civil Engineer
Michael Benoza, Senior Civil Engineer