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September 1, 2026
ITEM TITLE
Wastewater Disposal Agreement: Approval of the Revised “Second Amended and Restated Regional Wastewater Disposal Agreement” (SARA)
Report Number: 26-0246
Location: No specific geographic location
Department: Engineering & Capital Projects
G.C. § 84308 Regulations Apply: No
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the State California Environmental Quality Act (CEQA) Guidelines. Therefore, pursuant to State CEQA Guidelines Section 15060(c)(3), no environmental review is required.
Recommended Action
Adopt a resolution approving the revised version of the Second Amended and Restated Regional Wastewater Disposal Agreement (SARA).
SUMMARY
On January 20, 2026, the Chula Vista City Council approved the original version of the SARA through Resolution No. 2026 -009. Following Council approval, unforeseen comments from a Participating Agency prevented the agreement from being fully executed. In response, the Metro JPA (Joint Powers Authority) revised the SARA to address all identified concerns. Staff therefore recommend approval of the revised SARA, dated June 12, 2026.
ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environmental Quality Act (CEQA), and it has been 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.
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BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
On October 23, 2025, the original version of the S ARA was approved by the Metro JPA (Attachment 1), initiating the approval process by the Participating Agencies . On January 20, 2026, the City of Chula Vista approved the original version of the SARA via Resolution No. 2026 -009 (Attachment 2) . Participating Agencies (PA), with the exception Padre Dam Municipal Water District, also approved the original version of the SARA. Since all PA s need to approve the revised SARA prior to implementation, the agreement has not yet gone into effect.
To address all Participating Agency (PA) concerns, the Metro JPA Executive Team, in collaboration with staff and legal counsel from the City of San Diego and Padre Dam Municipal Water District (MWD), worked diligently to negotiate and prepare a revised version of the SARA. The revised agreement was developed to address the concerns of the City of San Diego, Padre Dam MWD, and the Metro Pure Water SARA Ad Hoc Committee. These collaborative efforts resulted in a mutually acceptable draft, which is being presented for consideration at today's meeting. The revised SARA, including all exhibits, is included as Attachment 3 to the agenda packet.
The key revisions to SARA include:
(1) Addition of Section 2.5.6 to address residuals flow.
(2) Revision to Section 5.2, to include an illustrative example calculation of the FAB (Functional Allocated Billing) methodology, per Exhibit J.
(3) Revision to Section 14.1 to provide that the SARA shall have an effective date of July 1, 2026, regardless of the date on which the final Participating Agency approves and executes the revised SARA. Although the revised SARA will not become operative until it has been approved and executed by all required parties, upon such final approval and execution, its effect ive date shall be deemed retroactive to July 1, 2026, for all purposes, including billing and cost allocation purposes. (4) Revision to Section 15.1.5 to change the required voting threshold from two-thirds (2/3) to three-fourths (3/4) for approval of changes affecting billing under the FAB methodology. To incorporate the foregoing revisions and to comprehensively and equitably address the allocation of costs, revenues, and billing obligations associated with the Pure Water Program, including the constructi on, expansion, and/or modification of Metro System facilities beyond Phase 1, the City of San Diego and the Participating Agencies, including the City of Chula Vista, desire to approve and adopt the SARA in the form presented herein.
The background and technical discussion regarding SARA are contained in the staff report presented to City Council on January 20, 2026 (Attachment 4). The revised SARA recommended for approval this evening is provided as Attachment 3.
DECISION-MAKER CONFLICT
Staff has reviewed Councilmembers’ property holdings and has determined that the effect of the decision contemplated by this action on public officials’ interest in real property would also affect 10% or more of all P a g e | 3
property owners in the public officials’ jurisdiction, or 5 ,000 property owners in the jurisdiction of the officials’ agency, in substantially the same manner. Therefore, pursuant to California Code of Regulations (§18707, §18707.1), the Public Generally Exception applies.
CURRENT-YEAR FISCAL IMPACT
The City’s sewer enterprise fund is self -supporting and funds the operations, maintenance, repair, rehabilitation and expansion of the system, and treatment. There is no fiscal impact as a result of this action.
Funding is available based on current-year budget appropriations. The utility is primarily supported by user fees, which provide a sustainable annual funding source. The current rate plan generates sufficient revenue to fund the financial obligations for wastewater service and equitably recover cost s from customers. The current rate plan expired 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 C ouncil for the period of fiscal year 2021-22 through fiscal year 2025-26 was developed using a robust and dynamic cash flow model that mirrors the utility’s accounting and operations. The model contemplate d potential changes in operating costs, including increases in treatment costs associated with the upgrade of City of San Diego’s Point Loma Wastewater Treatment Plant (PLWTP). The Engineering & Capital Projects Department is currently administering an updated sewer rate report that will be completed in ti me to support the adoption of the new sewer rate by the July 1, 2027 deadline. These expenses will be considered as part of the annual budget development process in future years.
ATTACHMENTS
1. Original SARA, dated January 20, 2026
2. City Council Resolution No. 2026-009
3. Proposed Revised Second Amended and Restated Regional Wastewater Disposal Agreement
4. Original SARA Staff Report dated January 20, 2026
Staff Contact: Luis Schaar, Director of Engineering and Capital Projects/City Engineer Patrick Moneda, Principal Civil Engineer
Michael Benoza, Senior Civil Engineer