Terms and Conditions for the Construction, Operations, and Maintenance of the Northerly Recycled Water Pipeline
December 27, 2023
General:
A Memorandum of Understanding (MOU) was entered into on July 12, 2023, among the City of Corona (Corona), City of Norco (Norco), Jurupa Community Services District (JCSD), Home Gardens Sanitary District (Home Gardens), Western Municipal Water District (Western Water) and the Western Riverside County Regional Wastewater Authority (WRCRWA), collectively referred to as the Parties, to support the implementation of a recycled water program through WRCRWA. The MOU identified the intent of the Parties to implement recycled water infrastructure projects, identified proposed capacity ownership rights by agency, assigned lead agency responsibilities, and defined and allocated estimated construction costs.
The purpose of this interagency agreement (Agreement) is to formalize the construction, operations, and maintenance requirements for the proposed Northerly Recycled Water Pipeline (Northerly Pipeline) component of the WRCRWA Recycled Water Project, and to address administrative and financial responsibilities and capacity allocations for the proposed Northerly Pipeline. The proposed Northerly Pipeline will convey recycled water from a future recycled water pump station to be located at the WRCRWA Treatment Plant site into JCSD’s service area for potential future sale or other designated beneficial uses.
The proposed Northerly Pipeline is one of two proposed pipelines, that along with one existing recycled water pipeline, the proposed pump station, and an existing treated recycled water storage reservoir comprise the Recycled Water Project described in Definition A. The Northerly Pipeline will provide conveyance capacity on behalf of the WRCRWA member agencies for their designated beneficial uses. The recycled water pump station, storage reservoir and other recycled water pipelines that are part of the recycled project described in Definition A are not a part of this agreement.
Definitions:
A. Recycled Water Project (Recycled Project): Defined as the overall recycled water infrastructure required to deliver WRCRWA recycled water to points of connection for conveying the recycled water to the Parties’ designated beneficial uses. This recycled water infrastructure includes a proposed 10.15 million gallons per day (MGD) recycled water pump station and associated metering and discharge piping (Pump Station) to be built on the WRCRWA Treatment Plant property located at 14634 River Road, Corona, CA, an existing
1.0 million gallon treated recycled water reservoir located on the WRCRWA property that will provide equalization storage during pumping (On-site Reservoir), the proposed 24-inch diameter Northerly Pipeline, a 20-inch diameter recycled water pipeline (Southerly Pipeline), and an interconnection to an existing 12-inch diameter recycled water pipeline owned by Norco (Norco Pipeline). The Pump Station is a combined station that will consist of two banks of pumps; one to supply the Northerly Pipeline and one to supply the Southerly Pipeline and the existing Norco Pipeline, and one standby pump that will serve as a back-up for both banks of pumps.
B. Points of Connection: Defined as the physical locations where the Northerly Pipeline, the Southerly Pipeline, and the Norco Pipeline will be interconnected to the Pump Station’s discharge piping. The points of connection shall be the basis for the delineation of ownership and agency responsibilities for these Northerly Recycled Water Pipeline Project Construction, Operations and Maintenance Agreement December 27, 2023
infrastructure components of the Recycled Project. The Points of Connection are depicted on Exhibits A-1 and A-2, attached hereto. The coordinates for the Points of Connection are as follows:
Facility Northing Easting
Northerly Pipeline 2283399.011 6150769.920
Southerly Pipeline 2283419.744 6150882.666
Norco Pipeline 2283367.415 6150820.257
C. Project Development Costs: Includes costs associated with planning, preliminary design (including survey and geotechnical), program management, and environmental documentation.
D. Project Implementation Costs: Includes costs associated with final design, geotechnical, permits, surveying, right-of-way acquisition, facility agreement and legal services, encroachment permits, community outreach, and program management.
E. Capital Costs: Includes costs incurred in connection with new capital facility construction, capacity expansion, or facility betterments. For the Northerly Pipeline, capital costs include, but are not limited to, construction costs for the above and below-grade improvements, appurtenances, metering, valves, SCADA, and structures along with all construction related costs and services including bonding, legal services, engineering services during construction, construction geotechnical services, construction surveying, construction/program management, inspection, traffic control, and environmental monitoring and mitigation.
F. Replacement and Refurbishment Costs (R&R Costs): Includes Costs incurred to replace major capital items and facilities and refurbish infrastructure to maintain operation or extend useful service life.
G. Operating Costs: Includes on-going fixed and variable operations and maintenance costs. For the Northerly Pipeline, such costs include routine maintenance, repair, and replacement of perishable capital items and equipment, and administrative overhead costs such as insurance, budgeting, budget tracking, invoicing, and related general management expenses. Perishable items and equipment include but are not limited to items such as gaskets, valve seats, electrical switches and similar items that routinely wear during the use of a facility.
H. Physical Infrastructure Ownership: Legal ownership and physical custody of the various infrastructure components of the Recycled Project, with associated responsibilities. Physical infrastructure ownership of the Northerly Pipeline is specified in Section 2.b of this Agreement.
I. Capacity Ownership: Each Party’s ownership percentage of capacity in the various infrastructure components of the Recycled Project. The total capacity of each component of the infrastructure shall be equal to the sum of the Party’s individual capacity ownership interests. Capacity ownership of the Northerly Pipeline is specified in Section 2.f of this Agreement.
J. Operations and Maintenance Lead Party: The Parties to this Agreement designated as being responsible for the on-going operations and maintenance for each of the various infrastructure components of the Recycled Project. In cases where the operations and maintenance lead Party must access another Party’s Northerly Recycled Water Pipeline Project Construction, Operations and Maintenance Agreement December 27, 2023
property to operate and maintain a component of the Recycled Project infrastructure, the Parties will cooperate to provide access rights for required operations and maintenance activities. For purposes of this Agreement, JCSD is designated as the lead Party for the Northerly Pipeline and will require access rights from WRCRWA for construction, operations, and maintenance of the pipeline.
K. Design and Construction Lead Party: In cases for which new recycled water infrastructure is required to be designed and constructed for the Recycled Project, the design and construction lead Party shall procure and manage design and construction services as required. The design and construction lead Party shall be reimbursed for such services, including Capital Costs, Project Development costs, and Project Implementation Costs as described in this Agreement, or any future amendments agreed to by the parties.
In cases where the design and construction lead Party is not the Party with ultimate physical infrastructure ownership and the infrastructure is located on another Party’s property, the Parties will cooperate to provide access rights for construction activities. For purposes of this Agreement, JCSD is designated as the lead Party for the design and construction of the Northerly Pipeline. JCSD will require and be granted access rights from WRCRWA for construction of the Northerly Pipeline to the Point of Connection with the Pump Station.
L. Recycled Water Cost Center: A specific section in WRCRWA’s annual operating and capital budget that categorizes and tracks all costs for facilities that are specifically applicable to the Recycled Project.
Terms and Conditions:
1. Term and Termination:
a. Term: The term of this Agreement shall commence on _____/_____/2024 (Effective Date) and, unless earlier terminated, shall terminate concurrently with the WRCRWA Joint Exercise of Powers Agreement and addenda thereto.
b. Termination: A Party may terminate its participation in this Agreement by selling its Northerly Pipeline capacity rights in total to another Party or Parties under the procedures set forth in Section 5.c. All of the Parties to this Agreement may terminate the Agreement by unanimous written consent.
2. Recycled Water Infrastructure
a. Recycled Project Infrastructure Description: Infrastructure included in this Agreement is comprised of the 24-inch Northerly Pipeline and related appurtenant facilities that will convey recycled water pumped from the Pump Station located at the WRCRWA Treatment Plant site, to a northerly terminus at American Heroes Park, located at 6608 Hellman Ave., Eastvale, CA 92880. The configuration of the proposed facilities included in the Recycled Project and the Point of Connection to the Northerly Pipeline are shown on Exhibits A-1 and A-2, attached hereto. b. Northerly Pipeline Infrastructure Owner: JCSD shall be the physical infrastructure owner of the Northerly Pipeline.
Northerly Recycled Water Pipeline Project Construction, Operations and Maintenance Agreement December 27, 2023
c. Northerly Pipeline Operations and Maintenance: JCSD shall be the operations and maintenance lead Party and shall be responsible for operations and maintenance of the Northerly Pipeline in a manner consistent with industry standards and in accordance with Section 5. d. Northerly Pipeline Design and Construction: JCSD shall be the design and construction lead Party for the Northerly Pipeline. The Parties agree that the pipeline shall be designed and constructed in a manner generally consistent with the report commissioned by JCSD entitled: “Recycled Water Pipeline and Pump Station Preliminary Design Report,” prepared by Albert A. Webb and Associates, dated April 2022 (PDR), and in accordance with JCSD’s design and operational standards. JCSD shall coordinate with the Parties on final design, pre-bid, and construction of the Northerly Pipeline and obtain required approvals from the Parties as described in Section 2.e. e. Project Coordination and Approvals: JCSD shall coordinate with WRCRWA and the Parties with capacity ownership throughout the final design, pre-bid, and construction award phases of the Northerly Pipeline project to ensure the facility is designed and constructed in accordance with applicable design and operational standards and any grant funding material specification requirements, such as “Buy American” provisions. JCSD shall schedule and convene quarterly coordination meetings of the Parties to discuss construction related items, provide project construction and schedule updates, and to consider approval of Capital Costs as described below.
In the initial quarterly coordination meeting, which shall occur no later than forty-five (45) days prior to the scheduled JCSD Board action to award the Northerly Pipeline construction contract, the representatives of the Parties with capacity ownership shall have obtained from their individual governing boards or councils, as needed, the authority to approve in the meeting the following:
i. Initial Capital Costs for the Northerly Pipeline and related appurtenant facilities plus a ten percent (10%) Capital Cost contingency.
In subsequent quarterly coordination meetings throughout construction and final acceptance of the project, the representatives of the Parties with capacity ownership shall have obtained from their individual governing boards or councils, as needed, the authority to approve in the meeting the following additional Capital Costs:
ii. Issuance of any construction change orders cumulatively exceeding ten percent (10%) of the original Northerly Pipeline construction contract amount. iii. Issuance of professional service contracts amendments cumulatively exceeding ten percent (10%) of each original contract amount.
Items placed on the agenda of the quarterly coordination meetings by JCSD that require approval of the Parties will be provided to the Parties no less than forty-five (45) days in advance of the quarterly meeting date. Approval of the initial Capital Costs as described in Section 2.e.i,shall require unanimous consent of the Parties. Approval of additional Capital Costs as described in Section 2.e.ii, and Section
2.e.iii, shall require the majority consent of the Parties. JCSD may schedule coordination meetings of the Parties more frequently than quarterly, if needed. The quarterly coordination meetings shall terminate after issuance of the Notice of Completion for the Northerly Pipeline project by JCSD.
Northerly Recycled Water Pipeline Project Construction, Operations and Maintenance Agreement December 27, 2023
f. Capacity Ownership of Project: The Northerly Pipeline shall be designed to deliver approximately
10.15 MGD. Capacity ownership of the Northerly Pipeline shall be allocated based upon daily flows in MGD. Initial capacity ownership in the Northerly Pipeline shall be allocated in accordance with Table 1, below.
Table 1 – Northerly Pipeline Capacity Ownership
Agency Capacity (MGD) Percentage (%)
Corona 1.50 14.78%
Home Gardens 0.56 5.52%
Norco 1.70 16.75%
Western Water 1.54 15.17%
JCSD 4.85 47.78%
Total 10.15 100.00%
The sum of the individual capacity ownership percentages equates to approximately the nominal operating capacity of the Northerly Pipeline. No change in the percentage of capacity ownership by a Party shall occur by reason of any variance between actual and the nominal capacity of the Northerly Pipeline, except by amendment of this Agreement.
3. Capital Costs and Funding
a. Northerly Pipeline Costs: The MOU between the Parties included an estimated Capital Cost for the Northerly Pipeline of $16.01 million. This cost estimate was based upon information derived from the PDR and the most recent design cost estimates at that time, escalated to the projected mid-point of construction, and included a 20% contingency plus proportionate Project Development Costs and Project Implementation Costs. As of October 9, 2023, the estimated costs for the Northerly Pipeline, including Project Development Costs, Project Implementation Costs, and Capital Costs, plus a 15% Capital Cost Contingency was $17.39 million. As the Northerly Pipeline project proceeds, project approvals and cost reconciliation shall be performed pursuant to Section 2.e and Section 3.c. b. Financing: JCSD shall seek Clean Water State Revolving Fund (CWSRF) financing for eligible Project Development Costs, Project Implementation Costs, and Capital Costs associated with the Northerly Pipeline. CWSRF funding is a low interest water infrastructure loan program administered on behalf of the State of California through the California State Water Resources Control Board. The CWSRF provides financing for recycled water and other clean water projects. The CWSRF program derives its funding from the United States Environmental Protection Agency. The Parties acquiring capacity in the Northerly Pipeline and seeking CWSRF financing through JCSD acknowledge that financing payments shall be subject to the terms and conditions of JCSD’s CWSRF financing agreement with the State. JCSD shall be responsible for making all CWSRF repayments to the State and the Parties with capacity ownership in the Northerly Pipeline shall proportionately reimburse JCSD for such repayments based upon each Party’s capacity ownership shown in Table 1.
Northerly Recycled Water Pipeline Project Construction, Operations and Maintenance Agreement December 27, 2023
c. Funding for Project Development and Project Implementation Costs and Completion of Project: Upon the Effective Date of this agreement, each Party shall be obligated to make a series of payments correlating to project milestones for their share of project costs based upon their percentage of capacity ownership in the Northerly Pipeline as shown in Table 1. Payments shall be made in accordance with the following milestones and shall be due and payable on the schedule indicated.
Forty-five (45) days prior to each milestone payment due date, JCSD shall prepare and submit an itemized invoice to each Party for payment to JCSD or for reimbursement from JCSD. Project milestones and required payments and reimbursements are as follows:
i. Milestone No. 1 – Completion of Project Development Activities, Project Implementation Activities, and Final Design
1. Payment includes all Project Development and Project Implementation activities including final design.
2. Due date: sixty (60) days after JCSD Board action to award the Northerly Pipeline construction contract.
ii. Milestone No. 2 – Reconciliation and Reimbursement of Eligible CWSRF Costs
1. JCSD shall prepare a final reconciliation of all Project Development Costs, Project Implementation Costs and Capital Costs that are eligible for financing under JCSD’s CWSRF agreement with the State of California.
2. Any costs paid by the Parties under Milestone No. 1 that are eligible for financing under the CWSRF will be reimbursed by JCSD to the Partiesfrom CWSRF proceeds.
3. Due Date: Thirty (30) days after JCSD’s receipt of loan proceeds from the state for eligible Project Development Costs and Project Implementation Costs. iii. Milestone No. 3 – Commencement of SRF Reimbursement Payments
1. Payment includes proportionate reimbursement to JCSD for CWSRF loan repayments made by JCSD for the thirty (30) year term of the CWSRF to the State of California.
2. Due date: Annual payments, due sixty (60) days prior to the due date of JCSD’s annual CWSRF loan repayments to the State.
4. Operating and Capital Cost Allocations
a. Northerly Pipeline Operating Costs: The allocation of all operating costs for the Northerly Pipeline among the parties shall be based upon each Party’s capacity ownership as expressed in Table 1. b. Capital and R&R Costs: Capital and R&R Costs shall be based upon each Party’s capacity ownership in the Northerly Pipeline based upon each Party’s capacity ownership as expressed in Table 1.
Establishment of an R&R fund and contributions to the fund shall be included in the annual budgeting process described in Section 5.d.
Northerly Recycled Water Pipeline Project Construction, Operations and Maintenance Agreement December 27, 2023
5. Administration
a. Governance: Upon issuance of the Notice of Completion by JCSD and commencement of operations of the Northerly Pipeline, JCSD shall coordinate with the WRCRWA Administrator and provide Operating Costs, Capital Costs, and R&R Costs associated with the Northerly Pipeline for inclusion in the Recycled Water Cost Center portion of WRCRWA’s annual budget. For administrative efficiency, approval by the Parties of the Recycled Water Cost Center portion of the WRCRWA budget and expenses related to the Northerly Pipeline, along with any applicable operating policy decisions, will be conducted by members of the WRCRWA Board of Directors representing Parties with capacity ownership in the Recycled Project. All voting shall be in accordance with the requirements of the WRCRWA Joint Exercise of Powers Agreement, applicable addenda, and adopted WRCRWA policies and procedures.
b. Operations: Upon issuance of the Notice of Completion by JCSD and commencement of operations of the Northerly Pipeline, JCSD shall assume physical control of the facility and be responsible for all operations and maintenance decisions and regulatory compliance for the Northerly Pipeline. Project related updates shall be provided by JCSD to the Parties, as needed, during WRCRWA regular meetings. c. Capacity Ownership Adjustments and Transfers: If a Party determines that it wishes to adjust its capacity ownership in the Northerly Pipeline, the Party may buy, sell, or enter a leasing arrangement with another Party or Parties to make such adjustments. Such a transaction may only occur among WRCRWA member agencies. In addition, Parties may wish to selectively participate in future capital projects. In such cases where an ownership transfer changes capacity ownership, the allocation of Capital Costs, R&R Costs and Operating Costs would be adjusted, accordingly. Should a Party or Parties sell all their capacity in the Northerly Pipeline to another WRCRWA Party or Parties, the Party or Parties selling all their capacity ownership in the Northerly Pipeline shall have no further financial obligations or authority under this Agreement. All transactions that result in a change in capacity of the facilities shall be promptly reported to JCSD and WRCRWA in writing for accounting, budgeting, and cost allocation purposes, and the Parties agree to amend this Agreement to reflect such changes in capacity ownership interests as soon as practical following such changes. d. Budget Administration: One hundred eighty (180) days prior to the Recycled Project becoming operational, JCSD shall prepare a draft annual operating, capital, and R&R budget for the Northerly Pipeline. The proposed draft budget shall be incorporated into the Recycled Water Cost Center portion of WRCRWA’s budget for categorizing and tracking all costs associated with the Northerly Pipeline portion of the Recycled Project. The draft budget shall include all costs for operations and maintenance and R&R funding and shall be organized in a manner that aligns with accounting, financial reporting, and budgeting practices and policies applicable to the Recycled Project assets for which WRCRWA is responsible.
i. Each Party shall be financially responsible for its allocation of costs for the operations and maintenance, R&R, and capital expansions of the Northerly Pipeline that are specifically applicable to the Recycled Project in accordance with Section 4 of this Agreement.
Northerly Recycled Water Pipeline Project Construction, Operations and Maintenance Agreement December 27, 2023
ii. JCSD shall coordinate with WRCRWA and provide on a quarterly basis all operations and maintenance, R&R, and capital expansion expenses incurred during the prior quarter for the Northerly Pipeline for incorporation into WRCRWA’s invoicing of the Parties for the Recycled Project.
iii. Each Party shall be invoiced by WRCRWA for the Recycled Project costs not paid under Section 3.c, above, including those attributable to the Northerly Pipeline, in the same manner, timing, and terms as WRCRWA’s normal invoicing for costs related to the WRCRWA Treatment Plant and collection system. WRCRWA will include Northerly Pipeline costs described in Section 4 in its invoicing and will remit any amounts to JCSD within thirty (30) days of receipt of such payments.
6. Miscellaneous
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