DATE:
April 19, 2022
TO:
Mayor and Council Members
Chair and Board Members, Hesperia Water District
FROM:
Nils Bentsen, City Manager
SUBJECT:
Agreement With Victor Valley Wastewater Reclamation Authority (VVWRA)
RECOMMENDED ACTION
It is recommended the City Council direct the City Manager (General Manager Hesperia Water District) to officially notify Victor Valley Wastewater Reclamation Authority (VVWRA) that the City of Hesperia will fully exercise its rights under the approved Settlement Agreement between the City of Hesperia and VVWRA dated September 16, 2021. The City of Hesperia is officially giving its three-year notice of its intent to build its own wastewater plant, divert flow and utilize all rights consistent with the agreement.
BACKGROUND
Hesperia is one of four members of the joint powers authority that make up VVWRA. The other members are The County of San Bernardino, Apple Valley and Victorville. More than ten years ago The City of Victorville began the process of designing and constructing their own wastewater plant that would eventually serve industrial users and roughly half of its residential customers. VVWRA as a whole and Hesperia opposed Victorville’s construction of its own wastewater plant. The VVWRA attorney wrote an opinion that Victorville’s actions were illegal and violated a number of existing agreements. Despite the opposition, Victorville constructed its own plant and diverted existing wastewater flow from VVWRA to its own plant. Victorville’s diversion of flow and retaining connection fees caused a financial crisis for VVWRA. Eventually VVWRA was forced to lay off staff and increase rates to all its members to make up for the lost revenue from Victorville’s actions. During this time Victorville’s Council also voted to give notice to VVWRA that it was exiting the joint powers authority. That process requires a 30-year exit notice.
Over this time the VVWRA Board could not agree on an action to remedy the dispute caused by Victorville. After a number of years, in response to VVWRA’s inaction and Victorville’s violation of existing agreements, Hesperia began withholding connection fees from VVWRA just as Victorville was doing. Hesperia’s action eventually caused VVWRA to make settlement agreements with Victorville and Hesperia. Hesperia was able to force a settlement that gave Hesperia the same rights as Victorville. Hesperia is authorized to retain connection fees, build its own wastewater plant and divert existing flow along with other rights.
FISCAL IMPACT
The Settlement Agreement allows Hesperia to keep connection fees for a majority of the City in perpetuity. This amounts to many millions of dollars from prior years and going forward. The connection fees must be used for wastewater related facilities or expansion.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENTS
None
Page PAGE 2 of NUMPAGES 2
Staff Report to the Mayor and City Council
VVWRA
April 19, 2022
City of Hesperia
STAFF REPORT