MEMORANDUM OF UNDERSTANDING
BY AND BETWEEN CITY OF COMMERCE AND
THE WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA
REGARDING TECHNICAL ASSISTANCE FOR
PROPOSITION 68 GROUNDWATER – DRINKING WATER TREATMENT
OPERATIONS AND MAINTENANCE FUNDING PROGRAM
This Memorandum of Understanding, hereinafter (“MOU”), is made and entered by and between the City of Commerce (“Participant”), and the Water Replenishment District of Southern California (“WRD”) or together as (“Parties”).
RECITALS
WHEREAS, the State Water Resources Control Board (SWRCB) Proposition 68 Treatment and Remediation Grant Program funds groundwater contamination treatment projects that serve as a source of drinking water, and/or prevents the migration of contamination to groundwater that serves as a source of drinking water; and
WHEREAS, the SWRCB implemented the Proposition 68 Groundwater – Drinking Water Treatment Operations and Maintenance Funding Program (“Program”) to assist disadvantaged community (DAC) drinking water systems that treat groundwater for direct potable use; and
WHEREAS, under the Program, the City of Commerce Water Department Well 4- L treatment system is eligible to receive funding for eligible operations and maintenance (O&M) costs incurred between July 19, 2022, through December 31, 2025;
WHEREAS, WRD was selected by and received a grant from the SWRCB as a Technical Assistance Provider for this Program to assist the Participant by performing grant administrative tasks including but not limited to preparing and submitting Quarterly Progress Reports for the Participant’s eligible water system to the SWRCB; and
WHEREAS, once WRD receives the funds from the SWRCB, WRD will reimburse the Participant for eligible O&M costs not to exceed a total of $1,299,500; and WHEREAS, Participant authorizes WRD to perform the Technical Assistance Provider tasks for this Program; and
WHEREAS, WRD agrees to provide these services to aid the Participant provided Participant agrees to the terms of this MOU; and
WHEREAS, the SWRCB shall be a third-party beneficiary of this MOU with the Parties and shall have the right to enforce the MOU.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, IT IS UNDERSTOOD AND AGREED BETWEEN THE PARTIES:
Section 1: The above recitals are incorporated herein as provisions of this MOU.
Section 2: Participant hereby requests the assistance of WRD as set forth herein and accepts the conditions of assistance for the Program, acknowledging that upon award WRD will submit quarterly reports and invoices to the SWRCB on behalf of the Participant.
Section 3: Participant agrees to be bound by the terms of this MOU in consideration of the services and assistance of WRD and funding by the SWRCB.
Participant also agrees to comply with all requirements under the Program set forth in Exhibit “A” attached hereto and incorporated herein by this Reference.
Section 4: Participant hereby agrees to provide WRD with the required information for the Quarterly Progress Reports including but not limited to summaries of quarterly O&M activities performed and quarterly eligible O&M costs within 30 days of request.
Section 5: Availability of Records and Audits Upon thirty (30) days written notice, Parties hereto and the SWRCB may examine, inspect, copy, review and audit any documents or records within the custody or control of the Parties to this MOU relating to any and all aspects of services and/or charges or credits incurred or received in relation to this MOU.
Section 6: Amendments This MOU only applies to the terms contained herein and is a fully integrated agreement. Any amendment as to the terms of this MOU requires the written agreement of the Parties in an amendment to this MOU.
Section 7: Notices Any and all notices related to this MOU shall be made in writing and may be given by personal delivery, by mail, or by facsimile. Such notices sent by mail should be sent of the designated contact person for each Party and addressed as follows:
Participant
City of Commerce
Gina Nila, Public Works Director
2535 Commerce Way
Commerce, CA 90040
WRD
Water Replenishment District of Southern California
Aimee Zhao, Water Resources Planner
4040 Paramount Boulevard
Lakewood, CA 90712
Section 8: Authority Each of the Parties hereto represents and warrants to the other that it has full power and authority and has obtained all approvals required by its governing board or governing body necessary to enter into, and perform its obligations under this MOU and that the individual executing this MOU on its behalf has the legal power, rights, and authority to bind such party.
Section 9: Counterparts This MOU may be executed in two or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement.
Section 10: Governing Law This MOU shall be construed and enforced in accordance with the laws of the State of California, without giving effect to rules governing the conflict of laws.
Section 11: No Assignment Neither party shall assign or otherwise transfer this MOU or its right or interest or any part thereof to any third party, without the prior written consent of the other party. No assignment of this MOU shall relieve the assigning party of its obligations until such obligations have been assumed in writing by the assignee. When duly assigned in accordance with the forgoing, this MOU shall be binding upon and inure to the benefit of the assignee.
Section 12: Attorneys’ Fees If any legal suit, action, or proceeding (collectively, and together with all appeals thereof, each a “Legal Proceeding”) is commenced under this MOU or to enforce this MOU, in addition to any other relief to which the successful or prevailing party or parties are entitled, the successful or prevailing party or parties shall be entitled to recover, and the non-prevailing party or parties shall pay (a) reasonable attorneys’ fees and expenses of the successful or prevailing party or parties, (b) court costs, and (c) other out-of-pocket expenses incurred by the successful or prevailing party or parties in such Legal Proceeding.
Section 13: Reimbursement If Participant fails to meet any of the requirements set forth in this MOU or the Program, Participant agrees to reimburse WRD/or/SWRCB for any associated funds received.
IN WITNESS WHEREOF, the parties thereto have executed this Memorandum of Understanding to be executed by their duly authorized representatives.
PARTICIPANT
By:
Vilko Domic, Assistant City Manager
Date:
WATER REPLENISHMENT DISTRICT
OF SOUTHERN CALIFORNIA
Date: By:
John D.S. Allen, President, Board of Directors
Date: By:
Sergio Calderon, Secretary,Board of Directors
Date: By:
Leal Trejo APC, District Counsel
EXHIBIT A
SWRCB CONDITIONS
The MOU/agreement between the Recipient (WRD) and the Applicant (City of Commerce) shall include the following terms and conditions.
(a) Legally binding. The MOU/agreement shall be legally binding upon the parties. (b) Third Party Beneficiary. The State Water Board shall be a third-party beneficiary of the MOU/agreement with each Applicant and shall have the right to enforce each MOU/agreement.
(c) Representations and Warranties.
(1) Eligibility. The Applicant is eligible under the Guidelines and shall only request reimbursement of costs that are eligible under the Guidelines. (2) Public Purpose. If the Applicant is a mutual water company or a utility regulated by the California Public Utilities Commission, the Applicant represents and warrants that the funding has a clear and definite public purpose, and shall benefit customers of the System, not the investors. (3) The Applicant has not made any untrue statement of a material fact in its application for O&M funding or omitted to state in its application a material fact that makes the statements in its application not misleading. (4) The Applicant agrees to fulfill all assurances, declarations, representations, and commitments in its application, accompanying documents, and communications filed in support of its request for funding under this Agreement.
(5) The receipt of funds by the Applicant under this Agreement, including all incorporated documents, do not violate any provision of any law or regulation in effect as of the date of certification, or result in any breach or default under any contract, obligation, indenture, or other instrument to which the Applicant is a party or by which the Applicant is bound as of the date of certification.
(6) Except as set forth in this paragraph, there are, as of the date of certification, no pending or, to Applicant’s knowledge, threatened actions, claims, investigations, suits, or proceedings before any governmental authority, court, or administrative agency which materially affect the financial condition or operations of the Applicant’s System or the O&M Project funded by this Agreement.
(7) There are no proceedings, actions, or offers by a public entity to acquire by purchase or the power of eminent domain any of the real or personal property related to or necessary for the System or the O&M Project. (8) The Applicant is duly organized and existing and in good standing under the laws of the State of California. The Applicant shall at all times maintain its current legal existence and preserve and keep in full force and effect its legal rights and authority. Within the preceding ten years, the Applicant has not failed to demonstrate compliance with state or federal audit disallowances.
(9) Any financial statements or other financial documentation of the Applicant previously provided to the Recipient and delivered to the State Water Board as of the date(s) set forth in such financial statements or other financial documentation: (a) are materially complete and correct; (b) present fairly the financial condition of the Applicant; and (c) have been prepared in accordance with GAAP. Since the date(s) of such financial statements or other financial documentation, there has been no material adverse change in the financial condition of the Applicant, nor have any O&M Project assets or properties reflected on such financial statements or other financial documentation been sold, transferred, assigned, mortgaged, pledged or encumbered, except as previously disclosed in writing by the Applicant and approved in writing by the State Water Board. (10) The Applicant has no conflicting or material obligations, except as set forth in this paragraph.
(11) Permitting. Applicant is in possession of all public agency approvals, entitlements, or permits required for Project implementation. (12) The Applicant maintains sufficient insurance coverage considering the scope of this Agreement.
(13) The Applicant has sufficient real or personal property rights necessary for the purposes of this Agreement, not subject to third party revocation, which rights extend at least to the Records Retention End Date of this Agreement, except as disclosed to and approved by the State Water Board. The Applicant legally possesses property access rights to any real or personal property necessary for the purposes of this Agreement for which the Applicant does not legally possess all real or personal property rights. The Applicant has disclosed to the Recipient and the State Water Board all proceedings, actions, or offers of which the Applicant has knowledge or belief that may in any way affect the Applicant’s ability to access or legally possess all of the property necessary for the purpose of this Agreement, including any proceedings, actions, or offers to lease, purchase, or acquire by eminent domain any of the real or personal property related to or necessary for the Project. (14) The Applicant and its principals, contractors, and subcontractors to the best of the Applicant’s knowledge and belief, are not presently debarred, suspended, proposed for debarment, declared ineligible, or otherwise excluded from participation in any work overseen, directed, funded, or administered by the State Water Board program for which this grant funding is authorized; nor have they engaged or permitted the performance of services covered by this Agreement from parties that are debarred or suspended or otherwise excluded from or ineligible for participation in any work overseen, directed, funded, or administered by the State Water Board program for which this grant funding is authorized. (15) The Applicant is not a target of economic sanctions imposed in response to Russia’s actions in Ukraine imposed by the United States government or the State of California. The Applicant shall comply with the economic sanctions imposed in response to Russia’s actions in Ukraine, including with respect to, but not limited to, the federal executive orders identified in California Executive Order N-6-22, located at
https://www.gov.ca.gov/wp-content/uploads/2022/03/3.4.22-RussiaUkraine-Executive-Order.pdf and the sanctions identified on the United States Department of the Treasury website
(https://home.treasury.gov/policy-issues/financial-sanctions/sanctionsprograms-and-country-information/ukraine-russia-related-sanctions), to the extent applicable.
(d) Reimbursement Request Requirements.
(1) Project Funds must be requested quarterly via Reimbursement Request for eligible costs paid during the reporting period of the corresponding Progress Report, describing the activities and expenditures for which the reimbursement is being requested. Each Reimbursement Request must be accompanied by a Progress Report. Failure to provide timely Reimbursement Requests may result in such requests not being honored.
(2) The Applicant agrees that it will not submit any Reimbursement Requests to the Recipient that include any Project Costs until such costs have been incurred and paid by the Applicant. The actual payment of such costs by the Applicant is required as a condition of reimbursement. Supporting documentation (e.g., receipts, proof of payment) must be submitted with each Reimbursement Request. The amount requested for personnel costs must include a calculation formula (i.e., hours or days worked times the hourly or daily rate = total amount claimed). The Applicant understands that reimbursement of Project Funds will be provided by the State Water Board only after receipt of a complete, adequately supported, properly documented and accurately addressed Reimbursement Request.
(3) The Applicant will not seek reimbursement of any Project Costs that have been reimbursed from other funding sources.
(4) The Applicant agrees that it will not request a reimbursement unless that cost is allowable, reasonable, allocable, and fully supported by invoices and/or receipts for costs incurred.
(e) Program Requirements.
(1) Remediation Costs Limited. (Pub. Resources Code, § 80141.) O&M Project Funds shall not be used to pay any share of the costs of remediation recovered from parties responsible for the contamination of a groundwater storage aquifer, but may be used to pay costs that cannot be recovered from responsible parties. Parties that receive funding for remediating groundwater storage aquifers shall exercise reasonable efforts to recover the costs of groundwater cleanup from the parties responsible for the contamination. Funds recovered from responsible parties may only be used to fund treatment and remediation activities including operations and maintenance.
(2) The Applicant certifies that it shall not submit costs for reimbursement that have been, or will be, paid by other parties, and that it shall disclose to the Recipient and the Division any recovery of funds arising out of groundwater contamination relevant to Agreement. The Applicant agrees to exercise reasonable efforts to recover the costs of groundwater treatment relevant to the Agreement from parties responsible for the contamination, if any.
(f) Other Requirements.
(1) The Applicant must, to the extent permitted by law, fix, prescribe and collect rates, fees and charges for the Applicant’s System during each Fiscal Year which are reasonable, fair, and nondiscriminatory and which will be sufficient to generate revenues in the amounts necessary to cover the operations and maintenance costs of the System. The Applicant may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates, fees and charges then in effect unless the net revenues from such reduced rates, fees, and charges will at all times be sufficient to meet the requirements of this section.
(2) The Applicant shall sufficiently and properly staff, operate, and maintain the O&M Project throughout the term of this Agreement, consistent with the purposes of this Agreement.
(3) Notice. Upon the occurrence of any of the following events, the Applicant must notify the Division’s Deputy Director and Project Manager by phone and email within the time specified below:
(4) The Applicant must notify the Division and Party Contacts by phone and by email within twenty-four (24) hours of any discovery of any potential tribal cultural resource and/or archaeological or historical resource.
Should a potential tribal cultural resource and/or archaeological or historical resource be discovered during the O&M Project, the Applicant must ensure that all work in the area of the find will cease until a qualified archaeologist has evaluated the situation and made recommendations regarding preservation of the resource, and the Division has determined what actions should be taken to protect and preserve the resource. The Applicant must implement appropriate actions as directed by the Division. (5) The Applicant must notify the Division and Party Contacts promptly of the occurrence of any of the following events:
• Bankruptcy, insolvency, receivership or similar event of the Applicant, or actions taken in anticipation of any of the foregoing; • Change of ownership of the O&M Project (no change of ownership may occur without written consent of the Division);
• Loss, theft, damage, or impairment to the O&M Project; • Events of Default, except as otherwise set forth in this section; • A proceeding or action by a public entity to acquire the O&M Project by power of eminent domain;
• Any litigation pending or threatened with respect to the O&M Project or the Applicant’s technical, managerial or financial capacity or the System’s continued existence;
• Consideration of dissolution, or disincorporation;
• Enforcement actions by or brought on behalf of the State Water Board or Regional Water Board;
• The discovery of a false statement of fact or representation made in the application for this financial assistance, or in any certification, report, or request for reimbursement made pursuant to this Agreement, by the Applicant, its employees, agents, or contractors; • Any substantial change in scope of the O&M Project. The Applicant must undertake no substantial change in the scope of the O&M Project until prompt written notice of the proposed change has been provided to the Division and the Division has given written approval for the change;
• Any circumstance, combination of circumstances, or condition, which is expected to or does delay operation of the O&M Project for a period of ninety (90) days or more;
• Any O&M Project monitoring, demonstration, or other implementation activities required in this Agreement;
• Any public or media event publicizing the accomplishments and/or results of this Agreement and provide the opportunity for attendance and participation by state representatives with at least ten (10) working days’ notice to the Division;
• Any event requiring notice to the Division pursuant to any other provision of this Agreement;
• Failure to observe or perform any covenant or comply with any condition required by this Agreement;
• An offer from a public entity to purchase the O&M Project or any portion thereof, or any of the real or personal property related to or necessary for the O&M Project; or
• Adverse tax opinions, the issuance by the Internal Revenue Service or proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices of
determinations with respect to the tax status of any tax-exempt bonds. (g) State Cross-Cutters. The Applicant represents that, as applicable, it complies and covenants to maintain compliance with the following for the term of the Agreement:
• The California Environmental Quality Act (CEQA), as set forth in Public Resources Code 21000 et seq. and in the CEQA Guidelines at Title 14, Division 6, Chapter 3, Section 15000 et seq.
• Water Conservation requirements, including regulations in Division 3 of Title 23 of the California Code of Regulations.
• Monthly Water Diversion Reporting requirements, including requirements set forth in Water Code section 5103.
• Public Works Contractor Registration with Department of Industrial Relations requirements, including requirements set forth in Sections 1725.5 and 1771.1 of the Labor Code.
• Volumetric Pricing & Water Meters requirements, including the requirements of Water Code sections 526 and 527.
• Urban Water Management Plan requirements, including the Urban Water Management Planning Act (Water Code, § 10610 et seq.). • Urban Water Demand Management requirements, including the requirements of Section 10608.56 of the Water Code.
• Delta Plan Consistency Findings requirements, including the requirements of Water Code section 85225 and California Code of Regulations, title 23, section 5002.
• Agricultural Water Management Plan Consistency requirements, including the requirements of Water Code section 10852. • Charter City Project Labor Requirements, including the requirements of Labor Code section 1782 and Public Contract Code section 2503. • Directives or orders issued pursuant to Division 7 of the Water Code. • Requirements for groundwater monitoring and reporting of groundwater elevations. (Wat. Code, § 10920.)
• Sustainable Groundwater Management Act (SGMA) requirements. (Wat. Code, § 10720-10737.8.) To the extent required under SGMA, the Applicant shall comply with the following:
o If, after July 1, 2017, the O&M Project is or will be located in a non-adjudicated high- or medium-priority California Statewide Groundwater Elevation Monitoring (CASGEM) basin, the
Applicant shall ensure that a Groundwater Sustainability Agency (GSA) has formed or an alternative has been
submitted to DWR. (Wat. Code, § 10735.2 (a)(1).)
o If, after January 31, 2020, the O&M Project is or will be located in a non-adjudicated high- or medium-priority CASGEM basin that is subject to critical conditions of overdraft, the Applicant shall ensure that the O&M Project is consistent with an adopted Groundwater Sustainability Plan (GSP).
o If, after January 31, 2022, the O&M Project is or will be located in a non-adjudicated high- or medium-priority CASGEM basin that is not subject to critical conditions of overdraft, the Applicant shall ensure that the O&M Project is consistent with an adopted GSP.
• Regulations in Division 4 of Title 22 of the California Code of Regulations, including but not limited to California Waterworks Standards in Chapter 16, and Lead and Copper regulations in Chapter
17.5. (h) General Terms and Conditions. The General Terms and Conditions stated in Exhibit B hereto shall apply to each Applicant.
(i) Fraud, Waste, and Abuse. The Applicant shall prevent fraud, waste, and the abuse of Project Funds, and shall cooperate in any investigation of such activities that are suspected in connection with this Agreement. The Applicant understands that discovery of any evidence of misrepresentation or fraud related to Reimbursement Requests, invoices, proof of payment of invoices, or other supporting information, including but not limited to double or multiple billing for time, services, or any other eligible cost, may result in an administrative action by the State Water Board and/or referral to the Attorney General’s Office or the applicable District Attorney’s Office for appropriate action. The Applicant further understands that any suspected occurrences of false claims, misrepresentation, fraud, forgery, theft or any other misuse of Project Funds may result in withholding of reimbursements and/or the termination of this Agreement requiring the immediate repayment of all Project Funds disbursed hereunder. A person who knowingly makes or causes to be made any false statement, material misrepresentation, or false certification in any submittal may be subject to a civil penalty, criminal fine, or imprisonment. (Wat. Code, § 13490 et seq.)
EXHIBIT B
SWRCB GENERAL TERMS AND CONDITIONS 2019-NOV
GENERAL TERMS AND CONDITIONS 2019-NOV is incorporated by reference and is posted at https://www.waterboards.ca.gov/water_issues/programs/grants_loans/general_terms.html.