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STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR
CALIFORNIA COASTAL COMMISSION
SAN DIEGO DISTRICT OFFICE
7575 METROPOLITAN DRIVE, SUITE 103
SAN DIEGO, CA 92108-4402
VOICE (619) 767-2370
FAX (619) 767-2384
May 8, 2025 SENT VIA EMAIL ONLY
Meagan Openshaw
Community Development Department Director
City of Imperial Beach
825 Imperial Beach Blvd.
Imperial Beach, CA 91932
Re: Certification of City of Imperial Beach LCP Amendment No. LCP-6-IMB-23-0025-2 (Alternative & Temporary Housing; Density Bonus)
Dear Director Openshaw:
On May 7, 2025, the California Coastal Commission approved the above-described Local Coastal Program (LCP) amendment request. In its action, the Commission certified the request to amend the City’s certified City of Imperial Beach LCP implementation plan.
Specifically, the amendment updates the IP to reflect current state housing laws related to permanent supportive housing and low barrier navigation centers and updates density bonus regulations.
Since the amendment request was intended to take effect automatically upon Commission certification, and the Commission certified the amendment as submitted (without any suggested modifications or other terms), there is no further action necessary for the local government. If you have any questions about the Commission’s action, please contact me.
Thank you and the other staff members who worked on this planning effort. We remain available to assist you and your staff in any way possible to continue efforts towards successful implementation of the local coastal program.
Sincerely,
Diana Lilly
Coastal Program Manager
ATTACHMENT 3
P a g e | 1
January 21, 2026
ITEM TITLE: APPROVAL OF RESOLUTION NO. 2026-001 PURSUANT TO PUBLIC CONTRACTS CODE SECTION 22050 FINDING THE CONTINUED EXISTENCE OF AN EMERGENCY DUE TO THE FAILURE OF SEWER PUMPS AT PUMP STATION NO. 8. (0830- 35)
ORIGINATING DEPARTMENT:
Public Works
EXECUTIVE SUMMARY:
Pump Station 8 (PS8) is a wet/dry well facility over 60 years old that has experienced ongoing pump issues in recent years. Staff has been working with Michael Baker International (MBI), the City’s engineering consultant, to develop plans and specifications for a comprehensive rehabilitation project that includes new pumps, plumbing, and electrical upgrades. The design is nearly complete and scheduled to go out to bid in the coming weeks.
PS8 contains three identical pumps, with two typically alternating workloads and the third serving as a standby for emergencies. In early October two pumps failed, and on Saturday, October 11, 2025, the last remaining working pump failed. These pumps are obsolete, and no replacement parts or compatible pumps are available. As a result, the station was gravity bypassing to Pump Station 9 (PS9) which was putting excessive strain on that pump station. A few weeks later, staff was able to procure and install one (1) new pump at PS8 as an interim condition to avoid flows being redirected to PS9. Accelerating the PS8 project is critical to ensure the City has a reliable sewer system.
Public Contract Code Section 20168 provides that the City Council may pass by four-fifths (4/5) vote, a resolution declaring that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property. Upon adoption of such resolution, the City Manager may expend any sum required in the emergency and report the same to the City Council in accordance with Public Contract Code Section 22050. The Council approved the initial emergency resolution on October 15, 2025. This report is to follow-up on actions taken and to request the extension of the emergency pursuant to State law.
RECOMMENDATION:
Adopt Resolution No. 2026-001 to continue the existence of the emergency and ratify actions taken in furtherance of the emergency.
OPTIONS:
Adopt Resolution No. 2026-001;
Provide other direction to the City Manager to take a specific action; or Request additional information and an additional report
P a g e | 2
BACKGROUND/ANALYSIS:
The City of Imperial Beach operates and maintains eleven sanitary pump stations that collect and relay sanitary flows to varying locations in the City’s collection system for ultimate conveyance to the City of San Diego METRO system. The sanitary pump stations are of varying styles and include various types of pumps. Pump Station 8 (PS8), located at 895 Imperial Beach Blvd., adjacent to the Imperial Beach Fire Station, is one of two major pump stations (Pump Station 9 being the other) used by the City of Imperial Beach to convey collected sanitary flows directly to the METRO system (eventually entering the Point Loma Wastewater Treatment Plant for treatment) operated by the City of San Diego.
PS8 is a wet/dry well facility that is over 60 years old. It has had ongoing pump issues over the past few years. Staff has been working with Michael Baker International (MBI), the City’s engineering consultant, to put together plans and specifications for an overall rehabilitation project that includes new pumps, plumbing and electrical upgrades. The design is near completion and would be put out to bid in the coming weeks.
PS8 has three identical pumps. Workload is typically alternated between two of the three pumps.
The third pump is for emergency purposes only. In early October two pumps failed, and on October 11, 2025, the last remaining working pump failed. The three pumps at PS8 are obsolete and no parts or replacement pumps are available. The station was gravity bypassing to PS9 which was putting excessive strain on that pump station. A few weeks later, staff was able to procure and install one (1) new pump at PS8 as an interim condition to avoid flows being redirected to PS9. Accelerating the PS8 project is critical to ensure the City has a reliable sewer system. In the event of a power loss or failure of the pumps, staff has an emergency generator and/or portable pumps that could be installed to keep the pump stations operational.
Pump Station 8 Construction Project has an approved budget of $1,500,000 for FY26 in the current Biennial FY26 & FY27 City of Imperial Beach budget. Funds were appropriated from the Sewer Enterprise Fund.
IBMC section 3.04.120A allows for competitive bidding to be dispensed with when the City Manager determines that an emergency requires an order to be placed with the nearest available source of supply in order to mitigate the threat to public health and safety.
The City Manager, acting pursuant IBMC section 3.04.120A, may determine the existence of a local emergency based on conditions of extreme peril to the safety of persons and property caused by the pump station failure.
Public Contract Code Section 20168 provides that the City Council may pass by four-fifths (4/5) vote, a resolution declaring that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property. Upon adoption of such resolution, the City Manager may expend any sum required in the emergency and report the same to the City Council in accordance with Public Contract Code Section 22050. Such resolution was approved at the October 15, 2025 special Council meeting. On November 5, November 19, and December 3, 2025, the City Council approved resolutions to continue the ongoing emergency.
If such expenditure is ordered, the City Council shall review the emergency action at each regular meeting, to determine if there is a need to continue the action.
Pump Station 8’s failure constitutes an emergency within the terms of Public Contract Code Sections 20168 and 22050, which requires that the City Manager be able to act quickly and without complying with the notice and bidding procedures of the Public Contract Code to repair and protect such public facilities.
Since the last Council meeting on December 3, 2025, the following work has been done:
P a g e | 3
Michael Baker International, Inc. is continuing to review technical specifications and work plans for the PS8 Rehabilitation Project.
The City has received submittals from the pump manufacturer and are currently being reviewed by Michael Baker International, Inc.
Staff recommends Council approve Resolution 2026-001 to continue the emergency and ratify the expenditures and contracts made thus far in furtherance of the emergency.
ENVIRONMENTAL DETERMINATION:
Not a project as defined by CEQA.
FISCAL IMPACT:
Fiscal Year: 26
Budgeted: Yes
Budget Amendment No
Account No(s).: 601-5060-536.2006
Project No(s).: W26101
Fiscal Analysis: $335,000
Current Budget: $335,000
Anticipated Expenditure: $335,000
ATTACHMENTS:
1. Resolution No. 2026-001
ATTACHMENT 1
RESOLUTION NO. 2026-001
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA, PURSUANT TO PUBLIC CONTRACTS CODE SECTION 22050 FINDING THE CONTINUED
EXISTENCE OF AN EMERGENCY DUE TO THE FAILURE OF SEWER PUMPS AT PUMP STATION NO. 8
WHEREAS, as of October 11, 2025, three sanitary pumps located at Pump Station No. 8, one of two major sanitary pump stations located in the City of Imperial Beach, have failed, resulting in the potential for a sanitary system failure in the City, creating a threat to public health and safety; and
WHEREAS, pursuant to Imperial Beach Municipal Code (“IBMC”) section 3.04.120A, competitive bidding can be dispensed with when the City Manager determines that an emergency requires that an order be placed with the nearest available source of supply in order to mitigate the threat to public health and safety; and
WHEREAS, Public Contract Code (PCC) Section 20168 provides that the City Council may pass by four-fifths (4/5) vote, a resolution declaring that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property; and WHEREAS, upon adoption of such resolution, the City Manager may expend any sum required in the emergency and report the same to the City Council in accordance with Public Contract Code Section 22050; and
WHEREAS, if such expenditure is ordered, the City Council shall review the emergency action at each regular meeting, to determine if there is a need to continue the action; and WHEREAS, Pump Station No. 8’s failure and likelihood of a sanitary system failure constitutes an emergency within the terms of PCC Sections 20168 and 22050 which requires that the City Manager be able to act quickly and without complying with the notice and bidding procedures of the Public Contract Code to repair and protect such public facilities; and WHEREAS, in accordance with PCC Sections 20168 and 22050, the City Council may repair or replace a public facility, take any related and immediate action required by that emergency, and procure the necessary equipment, services and supplies for those purposes, without giving notice for bids to let contracts; and
WHEREAS, pursuant to these codes, at the October 15, 2025 City Council meeting, the City Council approved a resolution declaring that the public interest and necessity demanded the immediate expenditure of public money to safeguard life, health or property for the emergency pump station repairs and equipment and has continued the emergency at every regular Council meeting since then; and
WHEREAS, based on that City Council authorization, since the December 3, 2025 City Council meeting, (1) Michael Baker International, Inc. is reviewing technical specifications and work plans for the PS8 Rehabilitation Project (2) City staff has received submittals from the pump manufacturer that are currently under review with Michael Baker International, Inc.; and WHEREAS, the City Council of the City of Imperial Beach has reviewed the need to continue the previously approved emergency action and related repairs; and
Resolution No. 2026-001
WHEREAS, sufficient funds exist in the City’s wastewater treatment operating fund to pay for the emergency repairs and equipment.
NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Imperial Beach hereby finds and declares:
1. The above-listed recitals are true and correct and incorporated herein.
2. Any expenditures made pursuant to such emergency are hereby approved and ratified.
3. The City Council does hereby declare the extension of the period of the emergency through the next regular City Council meeting of February 4, 2026, unless sooner terminated.
4. This Resolution shall become effective immediately upon its adoption.
PASSED, ADOPTED, AND APPROVED by the City Council of the City of Imperial Beach, California, at a regular meeting thereof, this 21st day of January 2026.
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
_________________________
MITCHELL D. MCKAY, MAYOR
ATTEST:
__________________________
JACQUELINE M. KELLY, MMC
CITY CLERK
P a g e | 1
January 21, 2026
ITEM TITLE: APPROVAL OF RESOLUTION NO. 2026-002 PURSUANT TO PUBLIC CONTRACTS CODE SECTION 22050 RATIFYING ACTIONS TAKEN AND TERMINATING THE DECLARATION OF AN EMERGENCY DUE TO AN EMERGENCY SEWER LINE REPAIR. (0830-30)
ORIGINATING DEPARTMENT:
Public Works
EXECUTIVE SUMMARY:
Public Contract Code Section 20168 provides that the City Council may pass by four-fifths (4/5) vote, a resolution declaring that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property. Upon adoption of such resolution, the City Manager may expend any sum required in the emergency and report the same to the City Council in accordance with Public Contract Code Section 22050. The Council approved the initial emergency resolution related to the emergency sewer line repair as an urgency item added to the November 19, 2025 agenda and continued the emergency on December 3, 2025.
This report is to follow-up on actions taken and to request the termination of the emergency pursuant to State law.
RECOMMENDATION:
Adopt Resolution No. 2026-002 to ratify actions taken in furtherance of the emergency and to terminate the emergency declaration as of January 21, 2026.
OPTIONS:
Adopt Resolution No. 2026-002;
Provide other direction to the City Manager to take a specific action; or Request additional information and an additional report BACKGROUND/ANALYSIS:
IBMC section 3.04.120A allows for competitive bidding to be dispensed with when the City Manager determines that an emergency requires an order to be placed with the nearest available source of supply in order to mitigate the threat to public health and safety.
The City Manager, acting pursuant to IBMC section 3.04.120A, may determine the existence of a local emergency based on conditions of extreme peril to the safety of persons and property caused by the pump station failure.
Public Contract Code Section 20168 provides that the City Council may pass by four-fifths (4/5) vote, a resolution declaring that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property. Upon adoption of such
P a g e | 2
resolution, the City Manager may expend any sum required in the emergency and report the same to the City Council in accordance with Public Contract Code Section 22050. Such resolution was approved at the November 19, 2025 regular Council meeting after the Council took action to unanimously add the urgency agenda item to the agenda pursuant to the process under the Brown Act. If any expenditures are made, the City Council shall review the emergency action at each regular meeting, to determine if there is a need to continue the action.
The sewer line repair located in the alley between Ebony Avenue and Imperial Beach Boulevard, east of 13th Street, was an emergency item and emergency repairs were necessary to clear any blockages. The emergency repair constituted an emergency within the terms of Public Contract Code Sections 20168 and 22050, which requires that the City Manager be able to act quickly and without complying with the notice and bidding procedures of the Public Contract Code to repair and protect such public facilities.
Since the last Council meeting on December 3, 2025, the City has taken the following actions
1. Contracted with Ace Excavating and Environmental Services, Inc. in the amount of $67,573 for emergency sewer line repair in the alley east of 13th Street and north of Imperial Beach Boulevard.
At this time, the emergency repairs have been completed and the situation is under control.
Therefore, staff is recommending that Council ratify the prior expenditures and terminate the emergency declaration.
ENVIRONMENTAL DETERMINATION:
Not a project as defined by CEQA.
FISCAL IMPACT:
The City contracted with Ace Excavating and Environmental Services, Inc. for this emergency repair for a total of $67,573.00.
ATTACHMENTS:
1. Resolution No. 2026-002
Attachment 1
RESOLUTION NO. 2026-002
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA, PURSUANT TO PUBLIC CONTRACTS CODE SECTION 22050 RATIFYING ACTIONS TAKEN
AND TERMINATING THE DECLARATION OF AN EMERGENCY DUE TO AN EMERGENCY
SEWER LINE REPAIR
WHEREAS, on or about November 15, 2025, the City became aware of the immediate need for emergency sewer line repair work, creating a potential threat to public health and safety; and
WHEREAS, pursuant to Imperial Beach Municipal Code (“IBMC”) section 3.04.120A, competitive bidding can be dispensed with when the City Manager determines that an emergency requires that an order be placed with the nearest available source of supply in order to mitigate the threat to public health and safety; and
WHEREAS, as a result of the urgent need in the City, the City Manager, acting pursuant IBMC section 3.04.120A, determined the existence of a local emergency based on the urgent sewer line work and potential threats to public health and safety; and WHEREAS, Public Contract Code Section 20168 provides that the City Council may pass by four-fifths (4/5) vote, a resolution declaring that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property and the City Council approved such resolution on November 19, 2025; and
WHEREAS, upon adoption of such resolution, the City Manager may expend any sum required in the emergency and report the same to the City Council in accordance with Public Contract Code Section 22050; and
WHEREAS, if such expenditure is ordered, the City Council shall review the emergency action at each regular meeting, to determine if there is a need to continue the action, and the Council performed that review and approved a resolution on December 3, 3025 to continue the emergency; and
WHEREAS, the urgent need for sewer line repair work constituted an emergency within the terms of Public Contract Code Sections 20168 and 22050 which require that the City Manager be able to act quickly and without complying with the notice and bidding procedures of the Public Contract Code to repair and protect such public facilities; and WHEREAS, the City Council of the City of Imperial Beach has reviewed the need to continue the previously approved emergency action and related repairs and has determined that the emergency can be terminated as of January 21, 2026; and WHEREAS, based on City Council authorization, City Staff contracted with Ace Excavating and Environmental Services, Inc. in the amount of $67,573 for sewer line work in an alley and in a roadway; and
WHEREAS, City’s wastewater fund contains budget allocated towards maintenance and repairs. There are sufficient funds in wastewater fund operating budget to cover this expenditure.
Resolution No. 2026-002
NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Imperial Beach hereby finds and declares:
1. The above-listed recitals are true and correct and incorporated herein.
2. Any expenditures made pursuant to such emergency are hereby approved and ratified.
3. The City Council does hereby declare the termination of the period of the emergency as of January 21, 2026.
4. Authorize the City Manager or designee to amend the contract with Ace Excavating and Environmental Services, Inc.
5. This Resolution shall become effective immediately upon its adoption.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Imperial Beach, California, at a meeting thereof, this 21st day of January 2026.
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
_________________________
MITCHELL D. MCKAY, MAYOR
ATTEST:
__________________________
JACQUELINE M. KELLY,
CITY CLERK
Resolution No. 2026-002
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January 21, 2026
ITEM TITLE: RESOLUTION 2026-006 CONTINUING THE PROCLAMATION OF A STATE OF
LOCAL EMERGENCY RELATING TO IMPACTS FROM CROSS-BORDER POLLUTION IN THE TIJUANA RIVER. (0150-40 & 0210-26)
ORIGINATING DEPARTMENT:
Environmental & Natural Resources
EXECUTIVE SUMMARY:
This resolution maintains the City's declaration of a local state of emergency caused by the effects of cross-border pollution originating from the Tijuana River, including both treated and untreated wastewater. Due to contaminated flows in the river, the stretch of Imperial Beach shoreline between the southern end of Seacoast Drive and the border remains severely impacted, with closures lasting all of 2026 to date, 365 days in 2025, 365 days in 2024, 365 days in 2023, 365 days in 2022, 246 days in 2021, 295 days in 2020, 245 days in 2019, and 101 days in 2018. The persistent impacts of these flows continue to affect the Tijuana River Valley, Estuary, beach water quality, and present an emerging threat to air quality that is currently being monitored and studied by the County Air Pollution Control District and Scripps Institute of Oceanography.
The City requires a local state of emergency to enable it to respond to the unpredictable conditions in the Tijuana River, which pose risks to the health, safety, and welfare of Imperial Beach residents, visitors, and the environment. Unless a continuing resolution is passed, declarations of a state of local emergency will expire within 60 days.
RECOMMENDATION:
Adopt Resolution No. 2026-006 to maintain a state of local emergency related to the cross-border pollution impacts from the Tijuana River and authorize the City Manager, Mayor, and Council members to work with local, State, Federal, and Mexican authorities to advance binational projects to improve conditions in the Tijuana River.
OPTIONS:
Adopt Resolution and recommendation from staff;
Reject Resolution; or
Request additional information and an additional report BACKGROUND/ANALYSIS:
The presence of cross-border pollution in the Tijuana River, combined with the lack of action from federal and state agencies to address this issue, constitutes compelling evidence for the declaration of a local state of emergency within the City. The pollution in the river poses a serious threat to the health and safety of citizens and wildlife in the City of Imperial Beach, with particularly acute effects during and after rain events or illegal discharge events. This pollution has a severe
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impact on the surrounding ecosystem, leading to poor water quality that can persist for days, months, or even years. Furthermore, pollution has a significant impact on recreational activities along the Imperial Beach shoreline, with beach closures causing disruption to residents and visitors alike.
Given these circumstances, the City of Imperial Beach along with the City of Chula Vista, City of Coronado, City of San Diego, County of San Diego, Port of San Diego, South Bay Union School District, Sweetwater Union High School District of San Diego County have issued a state of local emergency resolution for the Tijuana River, which allows for flexible responses to changing conditions. The City Council has the authority to issue a local state of emergency, which would last for 60 days or until the next regularly scheduled City Council meeting unless renewed by a continuing resolution. This declaration would enable the City to take swift and effective action to protect the health, safety, and welfare of all those affected by the pollution in the Tijuana River.
ENVIRONMENTAL DETERMINATION:
Not a project as defined by CEQA.
FISCAL IMPACT:
None
ATTACHMENTS:
1. Resolution No. 2026-006
ATTACHMENT 1
RESOLUTION NO. 2026-006
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA,
CONTINUING THE PROCLAMATION OF A STATE OF LOCAL EMERGENCY RELATING TO
IMPACTS FROM CROSS-BORDER POLLUTION IN THE TIJUANA RIVER WHEREAS, Government Code Section 8630 and Imperial Beach Municipal Code (IBMC) Section 2.52.060 empower the City Manager, acting as the Director of Emergency Services, to request that the City Council proclaim the existence of a local emergency when the City is affected by a public calamity; and
WHEREAS, the City Manager, as Director of Emergency Services of the City of Imperial Beach, does hereby find that continued conditions of extreme peril to safety of persons, property, and environment have arisen within said City, caused by persistent impacts from cross-border pollution in the Tijuana River; and
WHEREAS, the persistent impact of cross-border flows of treated and untreated wastewater in the Tijuana River, excessive discharge of sediment into the Tijuana Estuary during storm events, and the continued impact of trash and waste tires in the Tijuana River Valley maintains a condition of extreme peril in the City; and WHEREAS, transboundary flow events in the Tijuana River impacts water quality along the Imperial Beach shoreline and result in significant beach closure days at Border Field State Park, which include 101 days in 2018; 243 days in 2019; 295 days in 2020, 246 days in 2021, 365 days in 2022, 365 days in 2023, 365 days in 2024, 365 days in 2025, and all of 2026; and WHEREAS, transboundary flows of pollution include untreated sewage, trash, sediment, hazardous chemicals, heavy metals, and toxins continue to impact the Tijuana River, Estuary, coastal waters of the Pacific Ocean, and tributary canyons including Stewart’s Drain, Canon del Sol, Silva Drain, Smuggler’s Gulch, Goat Canyon, and Yogurt Canyon; and WHEREAS, the presence of pollution is creating unsafe conditions for residents and visitors who live, work, or recreate in the Tijuana River Valley and may come in contact with contaminated water; and
WHEREAS, pursuant to Section 8558(c) of the California Government Code, the pollution in the Tijuana River is beyond the control of the services, personnel, equipment and facilities of the City of Imperial Beach; and
WHEREAS, pollutants in the Tijuana River are causing contamination of the Tijuana River Valley, Tijuana Estuary, and the water and beaches of the City of Imperial Beach threatening the health, safety, and welfare of the citizens of Imperial Beach as well as visitors to our beaches; and
WHEREAS, the flow of the contaminants and untreated wastewater continues to escalate due to inadequate wastewater infrastructure in the city of Tijuana and lack of sufficient operation and maintenance of existing infrastructure; and
WHEREAS, this flow is the acknowledged responsibility of the federal governments of the United States and Mexico; and
Resolution No. 2026-006
WHEREAS, researchers at the Scripps Institute of Oceanography are studying the relationship of nearshore ocean currents and aerosolized transmission of contaminates as potential public health concerns for communities impacted by Tijuana River pollution; and WHEREAS, this condition constitutes an economic and public health threat which warrants and necessitates the proclamation and existence of a local emergency; and WHEREAS, after decades of sewage spills polluting the Tijuana River and after decades of talk and no meaningful action by federal agencies, the City of Imperial Beach, Port of San Diego, and City of Chula Vista filed a lawsuit on March 2, 2018 against the International Boundary and Water Commission for violation of the Clean Water Act which helped secure additional federal funding and commitments to the river valley; and
WHEREAS, the renewed federal attention from the Environmental Protection Agency and International Boundary and Water Commission led to a careful assessment of project options to manage pollution and ultimately a recommendation to support “Alternative 2” in the USMCA Programmatic Environmental Impact Statement, which represents the preferred Tijuana River Comprehensive Solution that is supported by the City; and WHEREAS, additional funding and commitments are needed to completely implement the preferred Comprehensive Solution for the Tijuana River; and WHEREAS, the City of San Diego has maintained a continuous local state of emergency for the Tijuana River since September 1993; and
WHEREAS, the County of San Diego issued a Public Health Emergency order for the Tijuana River in February 2021 and Local State of Emergency in June 2023; and WHEREAS, the South Bay Union School District of San Diego County adopted a proclamation for a local emergency in the Tijuana River in February 2024; and WHEREAS, the Sweetwater Union High School District of San Diego County adopted a resolution for a local emergency in the Tijuana River in March 2024; and WHEREAS, the Southern Indian Health Council adopted a proclamation asking for funding and a declaration for a public health emergency in the Tijuana River in April 2024; and WHEREAS, the Port of San Diego adopted a Local State of Emergency in April 2024; and WHEREAS, the City of Chula Vista adopted a Resolution declaring a State of Local Emergency Related to the Impacts of Cross-Border Contamination in November 2024; and WHEREAS, the County Air Pollution Control District and Scripps Institute of Oceanography are monitoring potential impacts to air quality related to the ongoing sewage crisis; and
WHEREAS, the City Council authorizes the Mayor to send letters or other correspondence on the City’s behalf to state, federal, or other local agencies related to the pollution crisis.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Imperial Beach as follows:
1. The above recitals are true and correct.
Resolution No. 2026-006
2. A local emergency exists throughout the City of Imperial Beach.
3. The City Manager, Mayor, and Council members are authorized to work with local, State, Federal, and Mexican authorities and to explore any and all options to improve conditions in the Tijuana River.
4. This proclamation of a local emergency shall expire within the timeframes prescribed by State law unless renewed by the City Council.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Imperial Beach at its meeting held on the 21st day of January 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
MITCHELL D. MCKAY, MAYOR
ATTEST:
JACQUELINE M. KELLY, MMC
CITY CLERK
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January 21, 2026
ITEM TITLE: RESOLUTION NO. 2026-08 SIDE LETTER OF AGREEMENT BETWEEN THE CITY OF IMPERIAL BEACH AND SERVICE EMPLOYEES’ INTERNATIONAL UNION (SEIU), LOCAL 221
ORIGINATING DEPARTMENT:
Human Resources
EXECUTIVE SUMMARY:
Staff recommend that the City Council approve Resolution No. 2026-08, which would approve a Side Letter of Agreement between the City and the Service Employees’ International Union (SEIU), Local 221, to revise the Holiday Benefits specified in Article 12.0 Section 4 of the approved Memorandum of Understanding (MOU) extending holiday benefits to representative full-time employees within the Marine Safety Department.
RECOMMENDATION:
Staff recommend approval of Resolution No. 2026-08, which would approve a Side Letter of Agreement with Service Employees International Union (SEIU), Local 221.
OPTIONS:
Adopt Resolution No. 2026-08 as proposed; or
Provide direction to the City Manager to take specific action BACKGROUND/ANALYSIS:
The Service Employees’ International Union (SEIU) and the City entered into a Memorandum of Understanding (MOU) effective July 1, 2025 through June 30, 2027 that was approved by the City Council on September 3, 2025, by Resolution No. 2025-046.
The Side Letter of Agreement (Attachment 2) between the City and SEIU seeks to amend the Holiday Benefits outlined in Article 12.0 Section 4 of the ratified MOU, thereby extending holiday benefits to full-time represented employees in the Marine Safety Department. This amendment aims to offer greater flexibility to full-time represented employees within the Marine Safety Department. In instances where a holiday coincides with an employee’s regularly scheduled day off, and with supervisory consent, the employee may opt to observe the City-designated holiday on a different day that is mutually agreed upon, provided it falls within the same pay period as the original holiday. It is crucial to highlight that this benefit was previously established and made available to employees in the Public Works and Parks, Recreation & Community Services Departments.
ENVIRONMENTAL DETERMINATION:
Not a project as defined by CEQA.
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FISCAL IMPACT:
No fiscal impact.
ATTACHMENTS:
1. Resolution No. 2026-08
2. Side Letter of Agreement between the City and SEIU
ATTACHMENT 1
RESOLUTION NO. 2026-08
A RESOLUTION OF THE CITY COUNCIL OF IMPERIAL BEACH, APPROVING AND
ADOPTING A SIDE LETTER OF AGREEMENT BETWEEN THE CITY OF IMPERIAL BEACH AND SERVICE EMPLOYEES’ INTERNATIONAL UNION (SEIU), LOCAL 221.
WHEREAS, Employer-Employee Relations for the City of Imperial Beach (hereinafter, “City”) are governed by California Government Code section 3500 through 3511, known as the MeyersMilias-Brown Act (“MMBA”); and WHEREAS, the Service Employees’ International Union (“SEIU”), Local 221 is the exclusive bargaining agent and representative of the City’s miscellaneous employees; and WHEREAS, the City and SEIU entered into a Memorandum of Understanding (“MOU”) effective July 1, 2025, through June 30, 2027; and
WHEREAS, the parties agree to Article 12.0 on holiday benefits and desire to amend the current MOU; and
WHEREAS, this agreement shall serve as a Side Letter Agreement to the MOU for July 1, 2025 through June 30, 2027.
NOW THEREFORE, BE IT RESOLVED, by the Council of the City of Imperial Beach, as follows:
1. The recitals set forth above are true and correct and incorporated herein by this reference.
2. The City Council hereby approves and adopts the Side Letter of Agreement between the City of Imperial Beach and Service Employees’ International Union, Local 221 to amend the Holiday Benefits outlined in Article 12.0 Section 4 of the ratified Memorandum of Understanding (MOU), thereby extending holiday benefits to fulltime represented employees in the Marine Safety Department.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Imperial Beach at its meeting held on the 21st day of January 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
MITCHELL D. MCKAY, MAYOR
ATTEST:
JACQUELINE M. KELLY, MMC
CITY CLERK
SIDE LETTER OF AGREEMENT
between the City of Imperial Beach and
Service Employees’ International Union (SEIU), Local 221 WHEREAS, Employer-Employee Relations for the City of Imperial Beach (hereinafter, “City”) are governed by California Government Code section 3500 through 3511, known as the Meyers-Milias-Brown Act (“MMBA”); and
WHEREAS, the Service Employees’ International Union (“SEIU”), Local 221 is the exclusive bargaining agent and representative of the City’s miscellaneous employees; and WHEREAS, the City and SEIU entered into a Memorandum of Understanding (“MOU”) effective July 1, 2025 through June 30, 2027; and
WHEREAS, the parties agree to Article 12.0 on holiday benefits and desire to amend the current MOU;
WHEREAS, this agreement shall serve as a Side Letter Agreement to the MOU for July 1, 2025, through June 30, 2027.
NOW THEREFORE, the City and SEIU mutually agree as follows:
Article 12.0 Holiday Benefits
1. Holidays: It is agreed that holiday benefits for each probationary and regular employee in the CITY shall be authorized as follows:
a. New Year’s Day January 1
b. Martin Luther King, Jr. Day 3
rd Monday in January
c. Washington’s Birthday 3
rd Monday in February
d. Cesar Chavez Day 31st of March
e. Memorial Day Last Monday in May
f. Juneteenth June 19
g. Independence Day July 4
h. Labor Day 1
st Monday in September
i. Veteran’s Day November 11
j. Thanksgiving 4
th Thursday in November
Attachment 2
k. Friday after Thanksgiving 4
th Friday in November
l. Christmas Eve December 24
m. Christmas Day December 25
n. New Year’s Eve December 31
2. Sunday Holiday: City Hall will be closed on holidays listed above in section 1. When a holiday listed herein falls on a Sunday, the following Monday shall be observed as a holiday. All City administrative offices and departments will be closed except fire suppression and lifeguard services.
3. Saturday Holiday: When a holiday listed herein falls on a Saturday, the preceding Friday will be observed as a Holiday. All City administrative offices and departments will be closed except fire suppression and lifeguard services.
4. Holiday Pay & Holiday Off Definitions for Full-Time Employees: For the purposes of this Article, Holiday Pay shall be defined as enumerated in Section 1, in which the employee is not scheduled to work and receives holiday benefits equivalent to the employee's workday at their hourly rate of pay. Holiday Off shall be defined as an enumerated day listed in Section 1, in which the employee is normally scheduled and receives holiday benefits equivalent to the employee's workday at their hourly rate of pay.
To provide flexibility to the classifications in the Parks, Recreation & Community Services, and Public Works Department's staff, the following practice will be followed:
a. The following is a list of classifications within the departments aforementioned:
i. Community Services Coordinator
ii. Community Response Crew Member
iii. Community Response Crew Leader
iv. Maintenance Worker I
v. Maintenance Worker II
vi. Lead Maintenance Worker
vii. Streets Supervisor
viii. Sewer Supervisor
ix. Tidelands Supervisor
x. Fleet Mechanic
xi. Fleet Supervisor
xii. Facilities Supervisor
b. If a holiday falls on an employee's regular scheduled day off, with supervisory approval, the employee may take the City-designated holiday on a mutually agreed-upon different day within the same pay period in which the holiday occurred.
The following conditions apply to this alternate option:
i. The holiday pay is computed at an individual staff member's base hourly rate of pay. ii. Employees should take the holiday leave hours all at once on the same day. E.g. 9 hours of holiday time off.
iii. Holidays will not be carried over. If the time is not taken off within the time defined above, the holiday will expire and will not be eligible for cash out or added to employee leave accruals. Instead of time off, the employee will receive Holiday Pay as defined in Section b of the MOU above.
iv. Holidays should not exceed the number of recognized holidays identified under Article
12.0, Section 1.
c. To provide flexibility for the classifications in the Marine Safety Department the following practice will be followed for the Full-Time Ocean Lifeguard II and Marine Safety Sergeant employees:
i. If a holiday falls on an employee's regular scheduled day off, with supervisory approval, the employee may take the City-designated holiday on a mutually agreed-upon different day within the same pay period in which the holiday occurred. Employees who choose to take the leave in lieu of the holiday pay must provide notice of their decision to the department head four (4) weeks in advance for consideration. All leave approvals are subject to staffing levels review. ii. The absence of an employee who chooses to take the holiday leave instead of the pay shall and will not incur backfill and/or overtime pay. iii. The holiday pay is computed at an individual staff member's base hourly rate of pay.
iv. Employees must take the holiday leave hours all at once on the same day. E.g. 10 hours of holiday time off.
v. Holidays will not be carried over. If the time is not taken off within the time defined above, the holiday will expire and will not be eligible for cash out or added to employee leave accruals. Instead of time off, the employee will receive Holiday Pay as defined in Section b of the MOU above.
vi. Holidays should not exceed the number of recognized holidays identified under Article 12.0, Section 1.
d. It is the responsibility of the employee and supervisor to ensure that the hours are taken
within as defined under Article 12.0, Section 1, and that the employee doesn't take more hours or days than the in lieu of the recognized holiday identified under Article 12.0, Section 1.
Executed in Imperial Beach, California by:
SEIU LOCAL 221: CITY OF IMPERIAL BEACH:
___________________________ _________ ___________________________ _________ Roslyn Cassidy Date Nadia Smith Date
SEIU 221 Senior organizing Rep. Human Resources Director
___________________________ _________ ___________________________ _________ Crystal Celis Date Tyler Foltz Date
President City Manager
P a g e | 1
January 21, 2026
ITEM TITLE: RESOLUTION NO. 2026-011 AMENDING THE SPECIAL EVENT FEE WAIVER AND SPONSORSHIP POLICY.
ORIGINATING DEPARTMENT:
Parks & Recreation
EXECUTIVE SUMMARY:
At the November 1, 2023, regular meeting, City Council approved and adopted Resolution No. 2023-92 establishing a Special Event Fee Waiver and Sponsorship Policy. The policy sets forth parameters for waiving or reducing fees associated with special events and establishes a standardized process for awarding fee waivers, fee reductions, and sponsorship to qualifying local non-profit community organizations, youth athletic groups or organizations, educational groups or organizations.
The policy is intended to support events and activities that provide a public benefit for the City of Imperial Beach and its residents by activating public spaces and increasing economic opportunities through visitors and tourism.
Currently, the policy excludes applicants from obtaining a fee waiver or fee reduction during the high-event season, defined as Memorial Day through Labor Day. This exclusion may be modified.
RECOMMENDATION:
Staff recommends that the City Council approve and adopt Resolution No. 2026-011 to amend the Special Event Fee Waiver and Sponsorship Policy to modify the seasonal exclusion period.
OPTIONS:
Adopt Resolution 2026-011; or
Modify the proposed policy amendment; or
Do not adopt Resolution 2026-011 and provide direction to the City Manager.
BACKGROUND/ANALYSIS:
At the November 1, 2023 regular meeting, City Council approved and adopted Resolution No. 2023-92 establishing a Special Event Fee Waiver and Sponsorship Policy. The policy provides a consistent framework for waiving or reducing fees and awarding sponsorships to qualifying local non-profit community organizations, youth athletic organizations, educational organizations hosting events that offer a public benefit by activating public spaces and supporting tourism and economic activity.
Sponsorship determinations are made by a majority of the City Council. The number of special events sponsored each year is dependent on available budgetary resources and operating impacts and may vary annually.
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Under the policy, the Special Event Application fee and direct costs, including but not limited to staff time, are not eligible for waiver or reduction.
The current policy excludes applicants from obtaining a waiver and fee reduction during the high event season from Memorial Day to Labor Day. Staff proposes modifying this exclusion as follows:
No fee waivers or fee reductions will be authorized during the week of Memorial Day or the week of Labor Day.
This modification would allow organizations to host events during the summer while still being eligible to apply for a fee waiver or reduction. All other provisions of the policy would remain unchanged.
ENVIRONMENTAL DETERMINATION:
Not a project as defined by CEQA.
FISCAL IMPACT: None.
ATTACHMENTS:
ATT 1 – Resolution No. 2026-011
ATT 2 – Revised Special Event Fee Waiver and Sponsorship Policy
ATTACHMENT 1
RESOLUTION NO. 2026-011
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA,
AMENDING THE SPECIAL EVENT FEE WAIVER AND SPONSORSHIP POLICY WHEREAS, On November 1, 2023, the City Council adopted Resolution No. 2023-92 establishing a Special Event Fee Waiver and Sponsorship Policy to provide a standardized process for awarding fee waivers, fee reductions, and sponsorships for qualifying special events; and
WHEREAS, the Special Event Fee Waiver and Sponsorship Policy is intended to support local nonprofit community organizations, youth athletic organizations, and educational organizations hosting events that provide a public benefit to the City and its residents by activating public spaces and supporting economic activity through visitors and tourism; and WHEREAS, the policy currently excludes applicants from receiving a fee waiver or fee reduction during the high-event season defined as Memorial Day through Labor Day; and WHEREAS, the proposed amendment would prohibit fee waivers and fee reductions only during the week of Memorial Day and the week of Labor Day, while leaving all other provisions of the policy unchanged.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Imperial Beach as follows:
1. The above recitals are true and correct and are incorporated herein by this reference.
2. The City Council hereby approves an amendment to the Special Event Fee Waiver and Sponsorship Policy modifying the high-event season exclusion to read as follows:
a) No fee waivers or fee reductions shall be authorized during the week of Memorial Day or the week of Labor Day.
3. All other terms, conditions, and provisions of the Special Event Fee Waiver and Sponsorship Policy shall remain in full force and effect.
4. The City Manager, or designee, is authorized and directed to implement the amended policy consistent with this resolution.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Imperial Beach at its meeting held on the 21st day of January 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
MITCHELL D. MCKAY, MAYOR
ATTEST:
JACQUELINE M. KELLY, MMC
CITY CLERK
AƩachment 2
Adopted ResoluƟon No. 2023-92
Revised ResoluƟon No. 2026-011
City of Imperial Beach
Special Event Fee Waiver and Sponsorship Policy
Purpose
This policy establishes parameters for waiving fees associated with special events and establishes a standardized process to award fee waivers, fee reducƟons and sponsorship to qualifying local non-profit community organizaƟons, youth athleƟc groups or organizaƟons, educaƟonal groups or organizaƟons for events and acƟviƟes that provide a public benefit for the City of Imperial Beach and its residents by acƟvaƟng public space and increasing economic opportuniƟes through visitors and tourism.
Responsibility
The majority of the City Council is determined to authorize fee reducƟons, waivers and special consideraƟon per procedures set forth in this policy.
Sponsorship is determined by the majority of the City Council. The number of special events the City sponsors will depend on budget and operaƟng impacts and will vary annually. All events must occur within the fiscal year they are budgeted to occur.
Policy
Fee reducƟons, waivers, and sponsorship may be available to a variety of events including fesƟvals, sporƟng, tourism, cultural, general, and major community events. Funding is awarded annually to champion community celebraƟons that aƩract residents and visitors, strengthen Imperial Beach’s cultural idenƟty and economic vitality, and promote the small beach town community atmosphere.
The purpose of this policy is to provide an equitable opportunity for local community organizaƟons:
1. To obtain access to fee reducƟons and fee waivers.
2. To establish mutually beneficial partnerships between the City and the community.
3. To effecƟvely control the manner in which the City provides event sponsorship to the community.
Excluded costs from fee waivers or reducƟons:
1. Special Event ApplicaƟon fee is not eligible for a fee waiver or fee reducƟon under this policy.
2. Direct costs including but not limited to staff Ɵme are not eligible for fee waiver or reducƟon under this policy.
Eligibility Criteria
In addiƟon to a Ɵmely and complete applicaƟon, the applicant must demonstrate that the event or acƟvity being funded by the City’s fee waiver and sponsorship policy will saƟsfy all the following criteria:
1. OrganizaƟon applying must be a local not-for-profit organizaƟon or a non-profit enƟty serving primarily the City of Imperial Beach that has must meet the following requirements:
a. Documented federal 501(c)(3) status in good standing, or a similar non-profit status under state law.
b. Have an acƟve Employer IdenƟficaƟon Number (EIN).
AƩachment 2
Adopted ResoluƟon No. 2023-92
Revised ResoluƟon No. 2026-011
c. Current on annual filing and forms with the Internal Revenue Service (IRS) including Form 990.
d. A list of the board of directors and the roles and responsibiliƟes of each board member. e. Up to date financial statements including sources of funding. f. Have a public website or portal available to the public.
2. Provides a benefit to Imperial Beach residents and is of significant value to the community.
3. Contributes posiƟvely to the recogniƟon and image of the City of Imperial Beach.
4. Raises the profile of Imperial Beach through prominent acknowledgement of its support and assistance in all event markeƟng materials, at the event itself and be listed as an event sponsor.
5. If the fee waiver or sponsorship is for an event, then the event will be open to the public, will not charge a fee for entrance and does not discriminate on the basis of race, gender, religion, sexual orientaƟon, or any other protected characterisƟc under state or federal law.
6. Aligns with current established Council goals.
7. Fee waivers or sponsorship will not be used for events that are for poliƟcal or religious purposes.
8. If the event or acƟvity is a fundraising event, the proceeds from the fundraising acƟvity will support programs, services, or events for residents of the City of Imperial Beach.
9. If the fee waiver or sponsorship is for an event or acƟvity, then the applicant must demonstrate that the event or acƟvity being funded by the City’s grant will be held within the City of Imperial Beach.
10. An applicant or organizaƟon that is not delinquent on city permits or fees and has no acƟve code enforcement violaƟons.
AddiƟonal Criteria
Exclusion from obtaining a waiver and fee reducƟon:
1. OrganizaƟons based outside the Imperial Beach City limits.
2. Recipients of any other financial or other type of assistance from the City within the same calendar year.
3. Fee waivers will not be considered for new events; a special event must be a recurring event.
4. During the high event season from Memorial Day to Labor Day to not interfere with regular City staff duƟes and to maintain adequate staffing levels during the City’s peak season. No fee waiver or fee reducƟon shall be authorized during the week of Memorial Day or the week of Labor Day.
5. Projects or organizaƟons who have not saƟsfactorily fulfilled their obligaƟons following previous fee reducƟons, waivers, or Imperial Beach City Council sponsorships.
Other ObligaƟons:
Direct costs including but not limited to staff Ɵme are not eligible for fee waiver or reducƟon under this policy. To receive fee waivers, fee reducƟons, or sponsorship fully completed applicaƟons must be submiƩed at least ninety (90) days and no more than six (6) months before the planned event/acƟvity. A completed applicaƟon includes the date(s) of the event, Ɵme(s) of the event, a map of the locaƟon, descripƟon of fee waivers, fee reducƟons, or sponsorship descripƟon and reason for such request and that it meets all eligibility requirements.
AƩachment 2
Adopted ResoluƟon No. 2023-92
Revised ResoluƟon No. 2026-011
Any reducƟon in or waiver of fees will not affect the obligaƟon of a permiƩee to comply with the remaining qualificaƟons, restricƟons, and criteria of this policy or to pay other costs or to provide insurance as required by this policy or by ordinance. Business license, health permit, fire permit, and liquor license fees will not be waived or reduced. AddiƟonally, applicants must be able to fully fund their event should they not receive a fee waiver, fee reducƟon or sponsorship and may not be dependent on the fee waivers or sponsorship to determine their ability to hold the event. All recipients of fee reducƟons, waivers, and/or sponsorships shall acknowledge the City’s support in all publicity relaƟng to the event or acƟvity. City shall be included as a sponsor this includes logos and statements in all adverƟsing and promoƟonal material, media releases and in other promoƟonal contexts. PromoƟonal opportuniƟes should be detailed in the event applicaƟon.
All recipients also agree to provide the City of Imperial Beach with a booth space during special events free of charge.
Submission of an applicaƟon in no way commits the City to grant a fee waiver, fee reducƟon or sponsorship and the City reserves the right to reject any or all applicaƟons, wholly or in part, at any Ɵme, without penalty. In all cases, the City reserves the right to reject any and all applicaƟons in the event the City Council idenƟfies a potenƟal conflict of interest or the appearance of a conflict of interest.
Special Event Fee Waiver and Sponsorship ApplicaƟon
ApplicaƟons for Special Event Fee Waiver and Sponsorship shall include a secƟon where applicants will be requested to demonstrate the following:
A financial need or other economic jusƟficaƟon to be considered for a Fee Waiver or sponsorship.
A posiƟve community benefit through the organizaƟon or its event by meeƟng at least two of the following criteria:
o The organizaƟon and/or event serves, involves, and/or promotes Imperial Beach, its residents, schools, and/or businesses.
o The organizaƟon and/or event can demonstrate broad community support and sponsorship.
o The event appeals to a wide segment of community members. o The organizaƟon and/or event enhances the quality of life of the Imperial Beach community, offering recreaƟonal, cultural, social, and or and/or educaƟonal acƟviƟes of interest to the community.
o The organizaƟon can demonstrate a commitment to supporƟng the City’s acƟve and healthy lifestyle as a result of the event; and/or
o The organizaƟon/and or event addresses an unmet community need.
OrganizaƟon receiving grant funding through the Special Event Fee Waiver and Sponsorship program will be required to complete the following:
1. Submission of a Final Report within 30 days following the event.
AƩachment 2
Adopted ResoluƟon No. 2023-92
Revised ResoluƟon No. 2026-011
2. A formal presentaƟon to the City Council at one of its regular meeƟngs no more than 60 days following the event. The presentaƟon shall include discussion of the following items if applicable:
Number of aƩendees.
EsƟmated resident aƩendance.
Benefit to the community.
A posiƟve economic impact as a result of the event (exp. esƟmated room nights and spending generated by event)
Beneficiary of funds raised by the event (if applicable). Overview of event budget and financial outlook for future years.
Procedures:
1. The City Council may approve an annual budget item for Community Event Sponsorship.
2. Complete and submit a special event applicaƟon along with a fee waiver, fee reducƟon or sponsorship to the Parks, RecreaƟon and Community Services Department (PRCSD) no later than ninety (90) days and no more than six (6) months before the planned event/acƟvity.
3. PRCSD reviews applicaƟon for completeness and eligibility criteria.
4. PRCSD will consult with the City Manager or Chief AdministraƟve Officer for secondary review.
5. Staff may seek addiƟonal informaƟon from applicants as necessary.
6. PRCSD reviews the requested amount and availability of current funds and determines if funds are available and if the applicaƟon is complete and ready to be presented to the City Council for consideraƟon.
7. The PRCSD will contact the applicant to inform them of the date of the City Council meeƟng which the applicant(s) must aƩend to answer any quesƟons. Special event fee waivers and sponsorship applicaƟons may be placed under consent for City Council consideraƟon; however, the item may be pulled for a full City Council discussion.
8. PRCSD will also contact applicant(s) requesƟng a special event fee waiver and sponsorship to noƟfy them that funds have been depleted or if the request is not eligible under the policy criteria. The PRCSD shall noƟfy the applicant in wriƟng.
9. Once the event and event fee waiver and sponsorship are approved by the City Council, applicants would have to enter into a wriƩen agreement that includes a guarantee of recipient’s uses of funds for stated purpose, agreement to report use of funds back to the City, hold harmless provisions and other City stated clauses. This agreement would be separate from the special event permit.
10. If the applicant has received a fee waiver, fee reducƟon or sponsorship then applicant shall submit to PRCSD staff proof that the funds have been spent in the manner and for the purposes stated on the applicaƟon within thirty (30) days aŌer the event/acƟvity.
11. The applicant will contact the PRCSD to schedule a formal presentaƟon to the City Council at one of its regular meeƟngs no more than 60 days following the event.
12. If an applicant makes a fee waiver, fee reducƟon or sponsorship request directly to a City Councilmember, whether individually or as a group, the Councilmember shall refer the
AƩachment 2
Adopted ResoluƟon No. 2023-92
Revised ResoluƟon No. 2026-011
applicant to the Parks, RecreaƟon and Community Services Department for applicaƟon and review in accordance with this policy.
13. Staff shall report any distribuƟons in accordance with applicable tax law.
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January 21, 2026
ITEM TITLE: ORDINANCE. NO. 2025-1257 AUTHORIZING AMENDMENT TO THE
RETIREMENT CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CalPERS) & THE CITY OF IMPERIAL BEACH, CALIFORNIA. (0520-70)
ORIGINATING DEPARTMENT:
Human Resources
EXECUTIVE SUMMARY:
Staff is recommending that the City Council conduct the second reading and adopt Ordinance No. 2025-1257 by title only authorizing an amendment to the retirement contract to include additional cost sharing for classic local miscellaneous members, classic local fire members, and classic local ocean beach lifeguard members. The percentages included in the amendment to the contract would continue to equate to approximately fifty (50%) percent of the total Normal Cost Rate as permitted under Government Code §20516(f).
RECOMMENDATION:
Staff is recommending that the City Council conduct the second reading and adopt Ordinance No. 2025-1257 by title only, waiving further reading.
OPTIONS:
Conduct the second reading and adoption of Ordinance No. 2025-1257 authorizing an amendment to the retirement contract to include cost sharing for classic local miscellaneous members, classic local fire members, and classic local ocean beach lifeguard members.
Provide direction to the City Manager to take a specific action. Request additional information and an additional report.
BACKGROUND/ANALYSIS:
The City of Imperial Beach is a member of the California Public Employees’ Retirement System (CalPERS). In accordance with California Government Code Section 20516, the City is seeking to amend its retirement contract with CalPERS to include cost sharing for classic local miscellaneous members, classic local fire members, and classic local ocean beach lifeguard members.
On August 20, 2025, the City Council approved the Memorandum of Understanding (MOU) with Imperial Beach Firefighters’ Association, Local 4692 (IBFA). The MOU included a change to retirement benefits to include cost sharing for Fire Classic – Tier 1 & Tier 2 members. In addition to approving the MOU, Council approved the City’s Appointive Management & Confidential Benefits Summary, which also included a change to the retirement benefits to include cost sharing
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for Classic Tier 1 & Tier 2 Members of the unrepresented groups. Later, on September 3, 2025, the City Council approved the Memorandum of Understanding (MOU) with Service Employees International Union (SEIU), Local 221, which also included a change to retirement benefits to include cost sharing for Miscellaneous Classic – Tier 1 & Tier 2 members.
The changes to the retirement benefits require a contract amendment with CalPERS. The process requires the City Council to adopt a Resolution of Intention and an Ordinance to approve an amendment to the contract. The Ordinance would become effective 30 days after the final reading and, according to CalPERS regulations, the effective date of the contract amendment would be the first day of the payroll period following the effective date of the final Ordinance, which is anticipated to be March 6, 2026.
On December 3, 2025, City Council introduced Ordinance No. 2025-1257 by title only and adopted Resolution No. 2025-063 providing notice to the Board of Administration of the California Public Employees’ Retirement System (CalPERS) of its intent to approve an amendment. The City Council would consider the final reading of the Ordinance under this item.
The City’s retirement formulas are as follows:
Miscellaneous Employees (including represented, confidential, mid-management, and management employees)
Employees hired prior to March 9, 2012, Miscellaneous Employees (Classic Member – Tier 1): The CalPERS formula for members is 2.7% @ 55 with the use of average of the employee’s highest-one-year salary.
Employees hired on or after March 9, 2012, Miscellaneous Employees (Classic Member – Tier 2): The CalPERS formula for members is 2% @ 60 with the use of average of the employee’s highest-three-year salary.
Employees hired after January 1, 2013, Miscellaneous Employees (PEPRA Member): The CalPERS formula for members is 2% @ 62 with the use of average of the employee’s highest-three-year salary.
The following are the changes to the employee cost sharing retirement contract amendment with CalPERS:
Employees hired prior to March 9, 2012, Miscellaneous (Classic Member – Tier 1):
Currently, employees/members contribute 8% of the normal employee rate with a 2.8% modifier. Upon the effective date of the contract amendment with CalPERS, members/employees would pick up an additional modifier of 2% on top of the existing
2.8% for a total modifier of 4.8% making the employees/members cost approximately
12.8%. As stated in the MOU, if the employer costs increase, employees may be responsible for up to 50% cost sharing.
Employees hired on or after March 9, 2012, Miscellaneous (Classic Member – Tier 2): Currently, employees/members contribute 7% of the normal employee rate with a .6% modifier. Upon the effective date of the contract amendment with CalPERS, members/employees would pick up an additional modifier of 2% on top of the existing .6% for a total modifier of 2.6% making the employees/members cost approximately 9.6%. As stated in the MOU, if the employer costs increase, employees may be responsible for up to 50% cost sharing.
Employees hired after January 1, 2013, Miscellaneous Employees (PEPRA Member): Effective January 1, 2013, new members already pay 50% of the normal cost contribution as defined by the Public Employees’ Pension Reform Act (PEPRA).
Employees under this retirement tier would not have a change in retirement benefits.
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Fire Employees
Employees hired prior to March 9, 2012, Safety Fire Employees (Classic Member – Tier 1): The CalPERS formula for members is 3% @ 50 with the use of average of the employee’s highest-one-year salary.
Employees hired on or after March 9, 2012, Safety Fire Employees (Classic Member – Tier 2): The CalPERS formula for members is 2% @ 50 with the use of average of the employee’s highest-three-year salary.
Employees hired after January 1, 2013, Safety Fire Employees (PEPRA Member):
The CalPERS formula for members is 2.7% @ 57 with the use of average of the employee’s highest-three-year salary.
The following are the changes to the employee cost sharing retirement contract amendment with CalPERS:
Employees hired prior to March 9, 2012, Safety Fire Employees (Classic Member– Tier 1): Currently, employees/members contribute 9% of the normal employee rate with a
6.78% modifier. Upon the effective date of the contract amendment with CalPERS, members/employees would pick up an additional modifier of 3% on top of the existing
6.78% for a total modifier of 9.78% making the employees/members cost approximately
18.78%. As stated in the MOU, if the employer costs increase, employees may be responsible for up to 50% cost sharing.
Employees hired on or after March 9, 2012, Safety Fire Employees (Classic Member – Tier 2): Currently, employees/members contribute 9% of the normal employee rate with a 3% modifier. Upon the effective date of the contract amendment with CalPERS, members/employees would pick up an additional modifier of 3% on top of the existing 3% for a total modifier of 6% making the employees/members cost approximately 15%. As stated in the MOU, if the employer costs increase, employees may be responsible for up to 50% cost sharing.
Employees hired after January 1, 2013, Safety Fire Employees (PEPRA Member):
Effective January 1, 2013, new members already pay 50% of the normal cost contribution as defined by the Public Employees’ Pension Reform Act (PEPRA). Employees under this retirement tier would not have a change in retirement benefits.
Safety Other - Lifeguard Employees
Employees hired prior to March 9, 2012 Safety – Other Lifeguard Employees (Classic Member – Tier 1): The CalPERS formula for members is 2% @ 50 with the use of average of the employee’s highest-one-year salary.
Employees hired on or after March 9, 2012, Safety – Other Lifeguard Employees (Classic Member – Tier 2): The CalPERS formula for members is 2% @ 50 with the use of average of the employee’s highest-three-year salary.
Employees hired after January 1, 2013, Safety – Other Lifeguard Employees (PEPRA Member): The CalPERS formula for members is 2.7% @ 57 with the use of average of the employee’s highest-three-year salary.
The following are the changes to the employee cost sharing retirement contract amendment with CalPERS:
Employees hired prior to March 9, 2012, Safety – Other Lifeguard Employees (Classic Member–Tier 1): Currently, employees/members contribute 9% of the normal employee rate with a 4.4% modifier. Upon the effective date of the contract amendment
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with CalPERS, members/employees would pick up an additional modifier of 2% on top of the existing 4.4% for a total modifier of 6.4% making the employees/members cost approximately 15.4%. As stated in the MOU, if the employer costs increase, employees may be responsible for up to 50% cost sharing.
Employees hired on or after March 9, 2012, Safety – Other Lifeguard Employees (Classic Member – Tier 2): Currently, employees/members contribute 9% of the normal employee rate with a 3.9% modifier. Upon the effective date of the contract amendment with CalPERS, members/employees would pick up an additional modifier of 2% on top of the existing 3.9% for a total modifier of 5.9% making the employees/members cost approximately 14.9%. As stated in the MOU, if the employer costs increase, employees may be responsible for up to 50% cost sharing.
Employees hired after January 1, 2013, Safety – Other Lifeguard Employees (PEPRA Member): Effective January 1, 2013, new members already pay 50% of the normal cost contribution as defined by the Public Employees’ Pension Reform Act (PEPRA).
Employees under this retirement tier would not have a change in retirement benefits.
Per the CalPERS contract, the portion of the employer’s contribution that the member agrees to contribute from their compensation, over and above the member/employee normal contribution (“cost sharing percentage”), may not exceed the Employer Normal Cost Rate.
ENVIRONMENTAL DETERMINATION:
Not a project as defined by CEQA.
FISCAL IMPACT:
Pursuant to labor negotiations, the City Council approved salary adjustments to every group effective July 1, 2025. The CalPERS employee sharing additional cost increases the employee contribution to the CalPERS retirement and thus decreases the employer’s retirement costs.
Employee CalPERS deductions would be made on a pre-tax basis under the Internal Revenue Code (IRC) Section 414(h) (2).
ATTACHMENTS:
1. Ordinance No. 2025-1257
2. Contract Amendment Draft
ATTACHMENT 1
ORDINANCE NO. 2025-1257
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA,
AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY OF IMPERIAL
BEACH AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS)
WHEREAS, the City of Imperial Beach is a member of the California Public Employees’ Retirement System (CalPERS); and
WHEREAS, in accordance with California Government Code Section 20516, the City is seeking to amend its retirement contract with CalPERS to include additional cost sharing for classic local miscellaneous members, classic local fire members, and classic local ocean beach lifeguard members; and
WHEREAS, the amendment shall include an additional Employee Cost Sharing of 2% for classic local miscellaneous members; 3% for classic local fire members; and 2% for classic local ocean beach lifeguards.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH DOES ORDAIN AS FOLLOWS:
Section 1. That the recitals above are true and correct and incorporated herein as though set forth in full.
Section 2. That an amendment to the contract between the City of Imperial Beach and the Board of Administration of the California Public Employees’ Retirement System is hereby authorized, a copy of said amendment is attached to the staff report as Attachment 2, and by such reference made a part of hereof as though set out in full.
Section 3. The City Manager or Chief Administrative Officer of the City of Imperial Beach is hereby authorized, empowered, and directed to execute said amendment for and on behalf of said Agency.
Section 4. This Ordinance shall take effect 30 days after the date of its adoption, and the City Clerk is directed to prepare and have published in the Imperial Beach Eagle & Times, a newspaper of general circulation in the City of Imperial Beach, a summary of this Ordinance no less than five days prior to the consideration of its adoption, and again within fifteen days following adoption, indicating votes cast.
Ordinance No. 2025-1257
INTRODUCED AND FIRST READ at a regular meeting of the City Council of the City of Imperial Beach, held on the 3rd day of December, 2025; and PASSED AND ADOPTED at a regular meeting of the City of Imperial Beach, California, held on the 21st day of January, 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
MITCHELL D. MCKAY, MAYOR
ATTEST:
JACQUELINE M. KELLY, MMC
CITY CLERK
APPROVED AS TO FORM
JENNIFER LYON
CITY ATTORNEY
ATTACHMENT
2
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January 21, 2026
ITEM TITLE: APPROVAL OF RESOLUTION NO. 2026-004 AND RESOLUTION NO. 2026-005
APPROVING SECOND AMENDED AND RESTATED REGIONAL WASTEWATER DISPOSAL AGREEMENT (SARA) AND ADMINISTRATIVE AGREEMENT NO. 1 WITH THE CITY OF SAN DIEGO
ORIGINATING DEPARTMENT:
Public Works
EXECUTIVE SUMMARY:
The City of Imperial Beach (City) is in a long-standing Agreement with the City of San Diego (San Diego) and various local Participating Agencies (PAs) for service capacity in the Metropolitan Sewerage System (Metro System), a regional wastewater collection, treatment, and disposal system. The operation and administration of the system is currently governed by the 2021 Amended and Restated Regional Wastewater Disposal Agreement (ARA) between San Diego and PAs. Under the ARA, San Diego acts as one party, while the Metro Joint Powers Authority (Metro JPA), founded by the PAs in 2000, represents and acts on their collective behalf.
During the development of the 2021 ARA, six (6) items were deferred for future negotiation to expedite approval of the ARA. The Second Amended and Restated Regional Wastewater Disposal Agreement (SARA) and the accompanying Administrative Agreement No. 1 (AA-1) now before the Parties are intended to resolve those items, pending approval by each PAs governing body. The SARA and AA-1 have been rigorously reviewed and recommended for PAs approval by the Metro JPA and San Diego.
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 2026-004 approving the Second Amended and Restated Regional Wastewater Disposal Agreement and adopt Resolution No. 2026-005 approving Metropolitan Sewerage System Administrative Agreement No. 1 for unified management of industrial waste discharge pretreatment and enhanced source control.
OPTIONS:
Adopt Resolution No. 2026-004 and Resolution No. 2026-005; Provide other direction to the City Manager to take a specific action; or Request additional information and an additional report BACKGROUND/ANALYSIS:
The City operates an independent city-owned and maintained wastewater system consisting of gravity sewer pipes, pump stations and force mains serving City residents and businesses. Within the City, sewage flows are conveyed from west to east, with the transfer points of City sewage to
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the METRO System being at the eastern City limits with San Diego and ultimately sent to the Point Loma Wastewater Treatment Plant for treatment and disposal.
Historically, the City has been a party to various agreements with the City of San Diego in order to handle the sewage that residents and businesses produce. These agreements evolved over the decades but have always been based around the premise that San Diego’s advanced infrastructure handles City sewage flows, and the City pays treatment and transmission charges to the City of San Diego. The City does not treat any sewage or own any treatment infrastructure.
In the period from 1986 to 2002 a series of pollution related legal rulings precipitated upgrades to the major treatment facilities within the City of San Diego. In 1998 it was decided that the major facilities in San Diego should be “Regional” facilities and managed as such. The City of San Diego would own and maintain the “Regional” facilities, and the Metro Participating Agencies would lease capacity and provide operating and maintenance funding.
In 1998, a Regional Wastewater Disposal Agreement was negotiated between the City of San Diego and the Metro Participating Agencies. This agreement outlined roles and responsibilities of the parties, a billing structure, and gave the Metro Participating Agencies an advisory role through the creation of the Metro Commission (a Commission of the City of San Diego, with each Participating Agency having one appointed representative). The 1998 Regional Wastewater Disposal Agreement included language that outlines the City of San Diego’s responsibility to allow Metro Commission to conduct due diligence and review shared costs related to the “Regional” facilities, which were then renamed to “Metro” facilities.
In 2000, the Participating Agencies formed the Metro JPA as a separate legal entity with the authority and responsibility to take actions and make decisions pertaining to the 1998 Regional Wastewater Disposal Agreement in the Participating Agencies’ mutual interests. The Metro JPA and the Metro Commission are the same group of appointed representatives and are treated as one and the same entity.
Metro JPA currently has twelve Participating Agencies (including the City) that use the Metro Wastewater System. The JPA meets monthly in a publicly noticed meeting with City of San Diego to approve costs, present updates, and discuss regional wastewater matters. The City is an original member of the Metro JPA and has had an appointed Councilmember/Mayor represent the City on the Metro JPA Board, currently Mayor Mitchell D. McKay. The City has consistently played an active role in the Metro JPA/Commission, including representation by former Councilmember Ed Spriggs during the development of the current ARA and the early negotiations of SARA.
Members of the Metro JPA represent approximately 35% of the sewage flow into the Metro System. Imperial Beach has a maximum allowable system flow of 6.95 million gallons a day (MGD) out of 415.3 MGD of Metro System contractual capacity. The City has anticipated average flows of 2.29 MGD in Fiscal Year 2026.
Several years ago, City of San Diego and the Metro JPA determined the need to modernize the previous version of the 1998 Regional Wastewater Disposal Agreement. The old agreement was deemed not sufficient to adequately address the new needs of the system.
In 2021, the City of San Diego and the Metro Participating Agencies amended the Regional Wastewater Agreement, but it was a temporary fix. The 2021 Amended Agreement left six items (referred to as the “Parking Lot Items”) that would need to be resolved through good faith negotiations and one or more amendments in the future.
Over the past four years, the City representative to the Metro JPA worked through negotiations on the goals, objectives, and final agreement language, to arrive at SARA, which is presented for
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City Council approval. All Metro JPA members will present SARA to their respective City Councils and Boards.
Pure Water San Diego Considerations
The Pure Water San Diego project is a dual use potable water/wastewater improvement project designed to offload sewer flows currently routed to the Point Loma Treatment Plant, as well as provide a new regional potable water source. The 2021 Amended Agreement was determined to be inadequate to address all the concerns of the JPA and the City of San Diego related to repurified water for Phase 1 of the Project. SARA expands the ARA to include Phase 2 of the Pure Water Program and any subsequent phases.
SARA Agreement
The SARA (Attachments 4 and 5) amends the 2021 Amended Agreement between the City of San Diego and the twelve Participating Agencies that use the Metro Wastewater System. The SARA will replace the Amended Agreement and be in place for the next forty (40) years, through 2065. Major components include:
SARA updates the legal document that governs our regional cooperation on wastewater treatment and recycled/repurified water planning.
SARA reorganizes the old agreement and modernizes the agreement language. SARA resolves the six previously tabled “Parking Lot Items” from 2021. SARA provides more flexibility for future adjustments to keep the document relevant.
Attachment 3 provides a simplified guide to SARA.
Considering the City’s decades-long reliance and participation in the Metro System, lack of Cityowned treatment and discharge facilities, geographic proximity to the regional wastewater system, and the cost efficiencies of San Diego’s scale, continued participation in the Metro System remains essential.
The SARA preserves the City’s wastewater service sustainability, reliably, and without interruption. It renews the cooperative framework between the Metro JPA and San Diego, ensuring the City’s representation, treatment capacity, and advisory role for the next forty (40) years.
Administrative Agreement No. 1
As part of the SARA process, a new framework was established for specific programmatic or ministerial type changes to be accomplished through Administrative Agreements. This prevents the future need to alter the SARA because of program changes. Each Administrative Agreement may be approved individually by a Participating Agency through a delegation of authority to that Participating Agency’s Metro Commissioner/Metro JPA Board member and provided the approval threshold is reached, shall become part of the approved SARA.
Administrative Agreement No. 1 (Attachment 6) addresses the pretreatment program conducted by the City of San Diego. The pretreatment program involves the inspection and permitting of facilities within a range of commercial and industrial classifications which have a wastewater discharge. The inspection and permitting has historically been conducted by City of San Diego.
Changes under the Administrative Agreement No. 1 include:
Inspection and Permitting billing will now be administered by the City of San Diego.
Previously the City was billed by the City of San Diego and obligated to recoup costs from business owners. Now, the City of San Diego will directly bill the business owners. Legal language was clarified related to the responsibility of City of San Diego and each Participating Agency related to pretreatment.
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ENVIRONMENTAL DETERMINATION:
Not a project as defined by CEQA.
FISCAL IMPACT:
SARA includes a transition from the current outdated strength-based billing (SBB) methodology to functional allocated billing (FAB). This change is intended to better align cost allocation with each agency’s use of the Metro system and to shift a portion of cost recovery from variable to fixed charges to enhance revenue stability. The estimated cost impact to the City is less than $100,000.
ATTACHMENTS:
ATT 1 – Resolution No. 2026-004
ATT 2 – Resolution No. 2026-005
ATT 3 – Understanding the Second Amended and Restated Agreement ATT 4 – SARA Final for Metro JPA
ATT 5 – SARA Exhibits A – H
ATT 6 – Administrative Agreement No. 1
ATTACHMENT 1
RESOLUTION NO. 2026-004
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA,
APPROVING THE SECOND AMENDED AND RESTATED REGIONAL WASTEWATER
DISPOSAL AGREEMENT BETWEEN THE CITY OF SAN DIEGO AND PARTICIPATING
AGRENICES IN THE METROPOLITAN SEWERAGE SYSTEM AND AUTHORIZING THE
MAYOR TO SIGN THE AGREEMENT
WHEREAS, the 1998 Regional Wastewater Disposal Agreement between the City of San Diego and the participating agencies (“Agreement”) previously set planning, capacity rights and cost allocations of wastewater facilities in the regional the Metropolitan Sewerage System which the City of San Diego owns, operates and maintains for the purpose of treating and disposing of sewage for San Diego and certain other municipalities and districts including participating agencies like the City of Imperial Beach (“City”) within the San Diego region; and WHEREAS, effective on or around August 22, 2021, the City of San Diego and the participating agencies, including the City, amended the 1998 Agreement by executing an Amended and Restated Regional Wastewater Disposal Agreement (the “ARA”) which addressed amendments to the Agreement related to the Pure Water Program and allocation of costs and financial protection of wastewater rate payers; and
WHEREAS, further necessary modifications to the ARA precipitated the Second Amended and Restated Wastewater Disposal Agreement (the “SARA”) which clarifies and expands items relating to the wastewater billing methodology, agency roles and responsibilities, and cost-sharing approaches for Phase 1 and Phase 2 of the Pure Water Program; and WHEREAS, the SARA was considered and approved by the Metropolitan Wastewater Joint Powers Authority/Metropolitan Commission on October 2, 2025, with a vote of 11-1, and WHEREAS, each participating agency and the City of San Diego are required to approve the SARA independently, with the implementation date to be July 1st following the last participating agency approval.
NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Imperial Beach hereby finds and declares:
1. The above-listed recitals are true and correct and incorporated herein.
2. The City Council hereby approves the Second Amended and Restated Regional Wastewater Disposal Agreement and authorizes the Mayor to sign the Second Amended and Restated Regional Wastewater Disposal Agreement.
3. If the Second Amended and Restated Regional Wastewater Disposal Agreement is modified and the modifications are non-substantive or administrative agreements with non-substantive impacts to the City of Imperial Beach, then the Mayor is authorized to sign such modified agreement.
Resolution No. 2026-004
PASSED, ADOPTED, AND APPROVED by the City Council of the City of Imperial Beach, California, at a regular meeting thereof, this 21st day of January 2026.
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
_________________________
MITCHELL D. MCKAY, MAYOR
ATTEST:
__________________________
JACQUELINE M. KELLY, MMC
CITY CLERK
ATTACHMENT 2
RESOLUTION NO. 2026-005
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA, APPROVING METROPOLITAN SEWERAGE SYSTEM ADMINISTRATIVE AGREEMENT NO. 1 FOR UNIFIED MANAGEMENT OF INDUSTRIAL WASTE DISCHARGE PRETREATMENT
AND ENHANCED SOURCE CONTROL PROGRAMS
WHEREAS, the 1998 Regional Wastewater Disposal Agreement between the City of San Diego and the participating agencies (“Agreement”) previously set planning, capacity rights and cost allocations of wastewater facilities in the regional the Metropolitan Sewerage System which the City of San Diego owns, operates and maintains for the purpose of treating and disposing of sewage for San Diego and certain other municipalities and districts including participating agencies like the City of Imperial Beach (“City”) within the San Diego region; and WHEREAS, effective on or around August 22, 2021, the City of San Diego and the participating agencies, including the City, amended the 1998 Agreement by executing an Amended and Restated Regional Wastewater Disposal Agreement (the “ARA”) which addressed amendments to the Agreement related to the Pure Water Program and allocation of costs and financial protection of wastewater rate payers; and
WHEREAS, further necessary modifications to the ARA precipitated the Second Amended and Restated Wastewater Disposal Agreement (the “SARA”) which clarifies and expands items relating to the wastewater billing methodology, agency roles and responsibilities, and cost-sharing approaches for Phase 1 and Phase 2 of the Pure Water Program and the City Council of Imperial Beach approved the SARA on January 21, 2026; and
WHEREAS, the SARA created a process for developing amending and terminating Administrative Agreements to address technical or operational matters without renegotiating the main agreement; and
WHEREAS, Administrative Agreement No. 1 to the Second Amended and Restated Regional Wastewater Disposal Agreement addresses specific programmatic details related to the Industrial Waste Discharge Pretreatment and Enhanced Source Control Program, which is coordinated by City of San Diego, and includes permitting, inspection, compliance monitoring, source control mechanisms, laboratory work, enforcement, program administration and overhead, and claims management.
NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Imperial Beach hereby finds and declares:
1. The above-listed recitals are true and correct and incorporated herein.
2. The City Council hereby approves Administrative Agreement No. 1 to the Second Amended and Restated Regional Wastewater Disposal Agreement and authorizes the Mayor to sign the Administrative Agreement.
3. The Mayor is authorized to sign any future Metropolitan Sewerage Administrative Agreements with non-substantive impacts to the City of Imperial Beach.
Resolution No. 2026-005
PASSED, ADOPTED, AND APPROVED by the City Council of the City of Imperial Beach, California, at a regular meeting thereof, this 21st day of January 2026.
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
_________________________
MITCHELL D. MCKAY, MAYOR
ATTEST:
__________________________
JACQUELINE M. KELLY, MMC
CITY CLERK
4918-9486-5265
Understanding the Second Amended and Restated Agreement (SARA) What is SARA?
• The Second Amended and Restated Agreement (SARA) amends the current operating agreement between the City of San Diego and the twelve Participating Agencies (PAs) that use the regional Metro Wastewater System.
• SARA is the result of over four years of negotiations between the PAs and the City of San Diego. It’s the work product of hundreds of hours of research and negotiation from the staffs of the JPA and the City of San Diego, with additional layers of review from the PA’s legal team, its Technical Advisory Committee, and the JPA Board members.
What does SARA do?
• Updates the legal document that governs our regional cooperation on wastewater treatment and recycled/repurified water planning, particularly related to the City’s Pure Water Project. • Reorganizes the document and modernizes the language. • Establishes the JPA’s standing and streamlines authority to handle administrative, technical and operational issues.
• Resolves six specific “Parking lot Items” issues that were left unresolved in 2021. • Provides more flexibility for future adjustments to keep the document relevant.
Key Updates in SARA:
• Establishes cost-sharing approaches for Phases 1 and 2 of the City’s Pure Water Program. • Introduces a new billing method (Functional Allocated Billing) to allocate Metro System costs more accurately based on how each agency uses the Metro System. • Establishes the Uniform Enforcement of the Pretreatment Program by the City of San Diego. • Outlines how future regional water reuse projects may be included in capital cost calculations.
• Provides a sample formula for calculating revenue from repurified water. • Includes provisions for the treatment and billing of wastewater from military bases.
Key Structural and Operational Improvements in SARA:
• Clarifies how fines, penalties, and regulatory enforcement actions are allocated among the parties.
• Creates a process for developing, amending, and terminating Administrative Agreements to address technical or operational matters without renegotiating the main agreement. • Establishes four approval paths to update SARA in the future, allowing for more tailored and efficient decision-making.
Approval Process:
• On Oct 2, 2025, SARA was approved, on an advisory vote, by the PA representatives on the Metro JPA. It is now sitting with each PA for formal review and approval. • San Diego will agendize SARA for approval after a majority or most of the PA’s have approved the agreement.
• After San Diego and all thirteen PAs approve, it will replace the current agreement for the next forty years (through 2065).
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SECOND AMENDED AND RESTATED
REGIONAL WASTEWATER DISPOSAL AGREEMENT
BETWEEN
THE CITY OF SAN DIEGO
AND
THE PARTICIPATING AGENCIES
IN
THE METROPOLITAN SEWERAGE SYSTEM
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TABLE OF CONTENTS
Page
1. DEFINITIONS ....................................................................................................................3
2. OWNERSHIP AND OPERATION OF THE METRO SYSTEM......................................9
2.1 Rights of the Parties.................................................................................................9
2.2 Metro System Services ............................................................................................9
2.3 Flow Commitment.................................................................................................10
2.4 Funding Obligations ..............................................................................................10
2.5 Limitations on Types and Condition of Wastewater .............................................11
2.6 Enforcement Actions .............................................................................................11
2.7 Right of First Refusal.............................................................................................13
2.8 Uniform Enforcement of Pretreatment Program by City ......................................14
2.9 Wastewater Generated at Military Bases...............................................................16
3. CAPACITY RIGHTS........................................................................................................16
3.1 Contract Capacity ..................................................................................................16
3.2 Inter-Agency Transfers of Contract Capacity........................................................16
3.3 New Contract Capacity..........................................................................................17
3.4 Reductions in Metro System Capacity ..................................................................18
3.5 Restrictions on Veto of Transfers and Acquisitions of Capacity ..........................18
3.6 Amendments to Exhibits B....................................................................................18
3.7 The South Bay Ocean Outfall................................................................................18
4. FINANCE, BUDGETING, AND ACCOUNTING: PAYMENT AND MONITORING PROVISIONS....................................................................................................................18
4.1 Payment for Metro System Facilities ....................................................................18
4.2 Payment for Additional Metro System Facilities ..................................................19
4.3 Payment for Operation and Maintenance ..............................................................19
4.4 Charges Based on Flow, Strength and Fixed Capacity: Exception .......................19
4.5 Monitoring Flow and Strength...............................................................................21
5. FINANCE, BUDGETING, AND ACCOUNTING: SYSTEM OF CHARGES...............22
5.1 Charges Authorized ...............................................................................................22
5.2 Functional Allocated Billing (FAB) ......................................................................22
5.3 Metro System Costs...............................................................................................23
5.4 Excluded Costs ......................................................................................................23
5.5 Metro System Revenues and Allocations ..............................................................23
5.6 Excluded Revenue .................................................................................................24
5.7 Estimate and Billing Schedule and Year End Adjustment ....................................24
5.8 Financial Statements..............................................................................................25
5.9 Debt Financing.......................................................................................................25
5.10 Allocation of Operating Reserves and Debt Service Coverage.............................26
5.11 Amending the System of Charges .........................................................................26 Attachment 4
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6. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 1 ..............................................................26
6.1 North City Water Reclamation Plant Modification ...............................................26
6.2 New, Expanded or Modified Metro System Facilities ..........................................26
6.3 Costs Excluded from Metro System Costs – Phase 1............................................26
6.4 North City Water Reclamation Plant Improvement Costs Included as Metro System Costs..........................................................................................................27
6.5 Reallocation of PWP Costs incurred since FY 2014 .............................................27
6.6 Revenue Sharing for Repurified Water .................................................................28
6.7 Capital Expense Rate.............................................................................................30
6.8 Amending Pure Water Program Cost Allocation and Revenues – Phase 1...........32
7. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 2 ..............................................................32
7.1 Pure Water Program – Phase 2 ..............................................................................32
7.2 Costs Excluded As Metro System Costs ...............................................................32
7.3 Revenue Sharing for Repurified Water – Phase 2 .................................................33
7.4 Capital Expense Rate – Phase 2.............................................................................33
8. FUTURE NEGOTIATIONS AND COOPERATION ......................................................34
9. THE METRO COMMISSION..........................................................................................34
9.2 Advisory Responsibilities of Metro JPA ...............................................................34
9.3 Delegation of Decision-Making Authority of the Metro JPA ...............................35
9.4 Standing .................................................................................................................35
10. DISPUTE RESOLUTION.................................................................................................35
10.1 Mandatory Non-Binding Mediation ......................................................................35
10.2 Selection of Mediator ............................................................................................35
10.3 Mediation Expenses...............................................................................................35
10.4 Conduct of Mediation ............................................................................................35
10.5 Mediation Results ..................................................................................................36
10.6 Performance Required During Dispute .................................................................36
11. INSURANCE ....................................................................................................................36
11.1 City Shall Maintain All Required Insurance .........................................................36
11.2 Substantially Equivalent Coverage........................................................................36
12. INTERRUPTION OF SERVICE ......................................................................................36
13. NOTICES REQUIRED UNDER AGREEMENT.............................................................37
14. EFFECTIVE DATE AND EXPIRATION........................................................................37
14.1 Effective Date ........................................................................................................37
14.2 Expiration ..............................................................................................................37
14.3 Contract Capacity Rights Survive Expiration........................................................37
14.4 Abandonment.........................................................................................................38 Attachment 4
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15. ADMINISTRATIVE AGREEMENTS .............................................................................38
15.1 Use and Process for Administrative Agreements ..................................................38
16. GENERAL.........................................................................................................................39
16.1 Exhibits ..................................................................................................................39
16.2 Electronic Exhibits and Attachments.....................................................................39
16.3 Amendments to Agreement ...................................................................................40
16.4 Construction of Agreement....................................................................................43
16.5 Declarations Re: Agreement..................................................................................44
16.6 Right to Make Other Agreements..........................................................................44
16.7 Statute of Limitations to Resolve Billing Issues....................................................44
16.8 Counterparts and Electronic Signatures.................................................................45
16.9 Transparency..........................................................................................................45
16.10 Incorporation of Recitals .......................................................................................45
16.11 Joint Exercise of Power .........................................................................................45 ACRONYM LIST:
ARA Amended and Restated Regional Wastewater Disposal Agreement COD Chemical Oxygen Demand
CIP Capital Improvement Project(s)
CPM Construction Project Management
CWA San Diego County Water Authority
ECAWP JPA East County Advanced Water Purification Joint Powers Authority FAB Functional Allocated Billing
MBC Metropolitan Biosolids Center
MGD Millions of Gallons per Day
NCWRP North City Water Reclamation Plant
NPDES National Pollutant Discharge Elimination System
PLWTP Point Loma Wastewater Treatment Plant
PWP Pure Water Program
RSDP Reject Stream from Demineralization Process
SBOO South Bay Ocean Outfall
SBWRP South Bay Water Reclamation Plant
TSS Total Suspended Solids
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SECOND AMENDED AND RESTATED REGIONAL WASTEWATER DISPOSAL
AGREEMENT
THIS SECOND AMENDED AND RESTATED REGIONAL WASTEWATER
DISPOSAL AGREEMENT (“Agreement”) is made and entered into this ___ day of ______________, 20___, by and between the CITY OF SAN DIEGO, a municipal corporation (the “City”), on the one hand; and the CITY OF CHULA VISTA, a municipal corporation; the CITY OF CORONADO, a municipal corporation; the CITY OF DEL MAR, a municipal corporation; the CITY OF EL CAJON, a municipal corporation; the CITY OF IMPERIAL BEACH, a municipal corporation; the CITY OF LA MESA, a municipal corporation; the LEMON GROVE SANITATION DISTRICT, a political subdivision of the State of California; the CITY OF NATIONAL CITY, a municipal corporation; the CITY OF POWAY, a municipal corporation; the OTAY WATER DISTRICT, a political subdivision of the State of California; the PADRE DAM MUNICIPAL WATER DISTRICT, a political subdivision of the State of California; and the SAN DIEGO COUNTY SANITATION DISTRICT, a political subdivision of the State of California (collectively, the “Participating Agencies”), on the other hand. The City and the Participating Agencies may be referred to herein individually as a “Party,” and collectively as the “Parties.”
RECITALS
WHEREAS, the City and the Participating Agencies (or their predecessors in interest) entered into that certain 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 and the Participating Agencies; and
WHEREAS, the purposes of the 1998 Agreement were: (1) to replace the prior-existing sewage disposal agreements between the City and the Participating Agencies; (2) to provide certain contract rights to capacity in the Metro System to the Participating Agencies; (3) to establish a mechanism to fund the planning, design, construction, operation and maintenance of the Metro System by the City and the Participating Agencies 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 are necessary solely to provide for new capacity on a fair and equitable basis; and WHEREAS, on April 29, 2014 the San Diego City Council gave its approval and support for the Pure Water San Diego program by adoption of Resolution No. R-308906, which approved and supported the City’s efforts to develop an implementation strategy to offload wastewater flow from the Point Loma Wastewater Treatment Plant through implementation of potable reuse, resulting in effluent discharged to the Pacific Ocean being equivalent to what would be achieved by upgrading the Point Loma Wastewater Treatment Plant to a secondary treatment plant (secondary equivalency); and
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WHEREAS, the City is implementing a phased, multi-year program designed to achieve compliance with the Clean Water Act and regionally produce up to 83 million gallons per day 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; and
WHEREAS, the Pure Water Program will not only benefit the City by producing repurified water, but also the Participating Agencies and their wastewater customers, especially if secondary equivalency is recognized through federal legislation amending the Clean Water Act. Specifically, implementation of the Pure Water Program will reduce wastewater discharges to the Point Loma Wastewater Treatment Plant, part of the Metro System where a large portion of the Participating Agencies’ wastewater is currently treated and disposed by discharging it into the Pacific Ocean.
By diverting wastewater from the Point Loma Wastewater Treatment Plant and reducing the effluent discharged into the Pacific Ocean, the City and the Participating Agencies will potentially avoid billions of dollars in unnecessary capital, financing, energy, 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; and
WHEREAS, on or around November 2019, the East County Advanced Water Purification Joint Powers Authority (the “ECAWP JPA”) was created to implement a potable reuse program to improve local and regional water supply reliability to supply advanced treated recycled water to East San Diego County through the East County Advanced Water Purification Project (the “ECAWP Project”). The ECAWP Project is planned to capture and treat approximately 15 million gallons per day of wastewater that would otherwise be disposed of in the Metro System to produce an annual average supply of approximately 11.5 million gallons per day of new local drinking water. By diverting some wastewater and wastewater content away from the Metro System, the ECAWP Project has the ability to aid and contribute towards the City and region’s efforts to produce a regional annual average of up to 83 million gallons per day of water suitable for potable reuse by December 31, 2035, as described in the Cooperative Agreement in Support of Pure Water San Diego executed by the City and certain environmental stakeholders on December 9, 2014. The ECAWP Project includes a residuals bypass system that will convey RSDP (as defined herein) from the advanced water purification facility, and Centrate from the solids dewatering process of the solids handling facility, to an existing regional sewage gravity pipeline owned and operated by the City for treatment and disposal; and
WHEREAS, effective on or around August 22, 2021, the City and the Participating Agencies amended the 1998 Agreement by executing an Amended and Restated Regional Wastewater Disposal Agreement (the “ARA”) to address the costs and revenues associated with Phase 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 million gallons per day of Repurified Water (“Phase 1”).
The ARA provided that within one year of its effective date, the Parties intended to 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; and Attachment 4
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WHEREAS, Section 14.2 of the ARA provided that the Parties may amend the ARA by a written agreement between the City and all Participating Agencies stating the Parties’ intent to amend or supplement the agreement; and
WHEREAS, 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 and Participating Agencies wish to amend and restate the ARA as provided herein.
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, the City and the Participating Agencies restate and amend the ARA and agree as follows:
1. DEFINITIONS
1.1 Administrative Agreement shall refer to a formal binding contract, approved under the process set forth in Section 15 of this Agreement, which implements technical, administrative, operational, and/or procedural details of this Agreement.
1.2 Administrative Approval is an approval mechanism authorized by this Agreement that refers to a City administrative process by which the subject of a particular action is presented to the City’s Director of the Public Utilities Department or their designee for approval, based on discussion and evaluation according to sound engineering standards if applicable, and any additional requirements related to review for the action requiring the City’s Administrative Approval as set forth in this Agreement.
1.3 Annual Average Daily Flow is the number, in millions of gallons of wastewater per day (“MGD”), calculated by dividing total Flow on a fiscal year basis by the number of days in the applicable year, which is a term used for billing purposes.
1.4 ARA shall mean the Amended and Restated Regional Wastewater Disposal Agreement between the City and the Participating Agencies effective August 22, 2021.
1.5 Capital Expense Rate shall mean the same as the term is defined in Section 6.7.2.
1.6 Capital Improvement Costs means all costs of the planning, design, financing, construction, and/or replacement necessary to render a capital project facility fully operational, including upgrades and reconstruction, consistent with the City’s policies and procedures. This includes costs for planning and environmental work; procurement of consultants or contractors to perform such work; construction management; investigative studies and pre-design work; labor and materials; inspection and testing; and financing cost including interest on financial instruments.
1.7 Centrate shall mean the liquid byproduct that results from the dewatering of digested solids as part of wastewater treatment processes.
1.8 Chemical Oxygen Demand or COD means the measure of the chemically decomposable material in wastewater, as determined by the procedures specified in the most Attachment 4
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current edition of “Standard Methods for the Examination for Water and Wastewater,” or any successor publication which establishes the industry standard.
1.9 City shall mean and refer to the City of San Diego.
1.10 City’s Water Utility shall mean any and all facilities, properties, improvements and works at any time owned, controlled or operated by the City as part of the public utility system of the City for water purposes, for the development, obtaining, conservation, production, storage, treatment, transmission, furnishing and distribution of water and its other commodities or byproducts for public and private use (whether located within or without the City), and any related or incidental operations designated by the City as part of the Water System, including reclaimed and re-purified water.
1.11 City Water Utility PWP Costs are those Pure Water Program costs allocated to the City’s Water Utility and therefore excluded as Metro System Costs under Section 6.3 of this Agreement.
1.12 Contract Capacity is the contractual right possessed by each Participating Agency to discharge wastewater into the Metro System pursuant to this Agreement up to the limits set forth in Exhibit B, Distribution of Wastewater System Capacity Rights, attached hereto.
1.13 Contract Capacity Transfers shall refer to the capacity transfers initiated based on Metered Flow and Strength data using the methodology set forth in Exhibit E, Methodology for Contract Capacity Transfers, which change a Participating Agency’s Contract Capacity, as set forth more fully in Section 4.4.3.1 and 4.4.3.2. These changes will generally be made to a single Participating Agency’s annual Contract Capacity to correct capacity exceedances but can also be made to reduce a Participating Agency’s Contract Capacity.
1.14 CWA shall mean the San Diego County Water Authority.
1.15 ECAWP JPA shall mean the East County Advanced Water Purification Joint Powers Authority. The ECAWP JPA itself is not a Participating Agency or a Party to this Agreement.
1.16 ECAWP JPA Agencies shall mean collectively the City of El Cajon, the Padre Dam Municipal Water District, and the San Diego County Sanitation District.
1.17 ECAWP Project shall mean the ECAWP JPA’s project to capture and treat wastewater that would otherwise be disposed of in the Metro System to produce an annual average supply of approximately 11.5 MGD of new local drinking water, as well as other byproducts such as recycled water and energy recovery facilities.
1.18 Fixed Capacity shall mean the capacities for Monthly Average Daily Flow, Incremental Peak Flow, RSDP, COD and TSS for each agency as set forth in Exhibit B.
1.19 Fixed Capacity Charge shall mean the charges set forth in Exhibit B that are identified as “Fixed Capacity Charges” that represent the Parties’ proportional charges for Attachment 4
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maintaining the Metro System. Items such as debt service are also included in the Fixed Capacity Charges.
1.20 Flow shall refer to the flow of wastewater discharged by the City and/or one or more Participating Agency/ies into the Metro System.
1.21 Functional Allocated Billing or FAB shall mean the method for distributing all capital, operations, and maintenance Metro System Costs and Revenues on an annual basis by grouping expenses according to their purposes and the current approved Functional-Design Methodology.
1.22 Functional-Design Methodology shall mean the process of allocating fixed and variable Operation and Maintenance Costs and Capital Improvement Costs to Flow, RSDP and Strength parameters recognizing the benefits of both the design criteria and the primary function of a unit process.
1.23 Incremental Peak Flow shall mean the Peak Flow minus the Monthly Average Daily Flow.
1.24 Industrial Wastewater means all wastewater, excluding domestic wastewater, and shall include all wastewater from any producing, manufacturing, processing, institutional, commercial, service, agricultural, or other operation. These may also include wastes of human origin similar to domestic wastewater.
1.25 Industrial User means a discharger of Industrial Wastewater to a public sewer. A Participating Agency may be an Industrial User.
1.26 Joint Administrative Approval Process is an approval process authorized by this Agreement by which an Administrative Agreement may be created, revised, supplemented, replaced or terminated, subject to the review and approval process set forth more fully in Section 15.
1.27 MBC Return shall mean and refer to Centrate created at the Metropolitan Biosolids Center, 5240 Convoy St, San Diego, CA 92111. MBC Return shall contain Metered Flow, TSS and COD.
1.28 Metered Flow shall mean the amount or volume of wastewater captured by meters that exist throughout the Metro System, estimates from unit count areas, or agreed upon estimates of flows where unit counts are not appropriate. When meters are out of service, estimates can be used to fill in data gaps. These meters, which may or may not be owned by the City, are further defined in Exhibit F, Metro System Flow Formulas and Sampling Locations, which may be amended from time to time.
1.29 Metro Commission or Metro JPA is the advisory body described under Section 9.
1.30 Metro System Costs shall mean, at a minimum, those costs set forth in Section 5.3 and as otherwise set forth in this Agreement.
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1.31 Metro System Revenues are those revenues set forth in Section 5.5.
1.32 Metropolitan Sewerage System or Metro System shall mean and consist of those facilities which are listed, shown and/or described in Exhibit A, Metro Facilities (Electronic Exhibit); file name: [Enter]; time stamp of file, software used to open and view file including version; included herewith as CD-ROM/DVD-ROM, including any amendments thereto authorized by this Agreement. Exhibit A includes current constructed facilities and proposed future facilities.
1.33 Monthly Average Daily Flow is the number, in MGD, calculated by dividing total Flow on a monthly basis by the number of days in that month.
1.34 Municipal System shall mean the City’s wastewater collection system, consisting of pipelines and pump stations, which collects wastewater within the City of San Diego and conveys it to the Metropolitan Sewerage System for treatment and disposal.
1.35 New Contract Capacity shall mean capacity in excess of the Contract Capacity set forth in Exhibit B and authorized subject to Section 3.3.
1.36 North City Water Reclamation Plant or NCWRP is the wastewater treatment facility located at 4949 Eastgate Mall in San Diego, which includes four major processes: primary treatment, secondary treatment, tertiary treatment, and disinfection.
1.37 Operation and Maintenance Costs are the costs to operate, maintain, manage, repair, and keep the Metro System conveyance, disposal, treatment, and reuse facilities functioning in accordance with all applicable laws, rules, and regulations.
1.38 Participating Agencies shall mean all the local governments and agencies that executed this Agreement other than the City.
1.39 Peak Flow represents the wastewater flow in millions of gallons of wastewater per day that is captured in the highest 1-hour period in a fiscal year.
1.40 Point Loma Wastewater Treatment Plant or PLWTP is the main City wastewater treatment plant with a Monthly Average Daily Flow capacity of 240 million gallons per day and a peak flow capacity of 432 million gallons per day (as of the date of this Agreement).
It is an advanced primary treatment plant which includes four major processes: screening, grit removal, chemically enhanced sedimentation, and digestion.
1.41 Pooled Capacity shall refer to the capacity in the Metro system greater than that which has been designated in Exhibit B. Pooled Capacity amounts are shown in Exhibit E, Methodology for Contract Capacity Transfers, and may be recalculated from time to time as set forth more fully in this Agreement.
1.42 Postage Stamp Methodology is a methodology that can allocate a single uniform cost to any of the annual Contract Capacity cost parameters identified in Exhibit B. This methodology assumes that even though a particular discharger may not utilize all of the infrastructure, all dischargers into the Metro System benefit from the shared infrastructure.
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1.43 Projected Future Strength and Flow Amounts are the five (5) values described below:
1.43.1 Projected Future Metro Flow is the estimated amount of Monthly Average Daily Flow, stated in millions of gallons per day (MGD), that the City and each Participating Agency are projected to have in a designated future year – currently, the 2050 fiscal year. Projected Future Metro Flow for each Party is stated in Exhibit B.
1.43.2 Projected Future Incremental Peak Flow is the estimated amount of Annual Incremental Peak Flow, stated in millions of gallons per day (MGD), that the City and each Participating Agency are projected to have in a designated future year – currently, the 2050 fiscal year. Projected Future Incremental Peak Metro Flow for each Party is stated in Exhibit B.
1.43.3 Projected Future RSDP Flow is the estimated amount of RSDP Flow, stated in millions of gallons per day (MGD), that the City and each Participating Agency are projected to have in a designated future year – currently, the 2050 fiscal year. Projected Future RSDP Flow for each Party is stated in Exhibit B.
1.43.4 Projected Future COD Flows is the estimated amount of Chemical Oxygen Demand (COD), stated in pounds per day, that the City and each Participating Agency are projected to have in a designated fiscal year – currently, the 2050 fiscal year. Projected Future COD Flows for each Party are stated in Exhibit B.
1.43.5 Projected Future TSS Flows is the estimated amount of Total Suspended Solids (TSS) stated in pounds per day, that the City and each Participating Agency are projected to have in a designated fiscal year – currently, the 2050 fiscal year. Projected Future TSS Flows for each Party are stated in Exhibit B.
1.44 Pure Water Capital Melded Percentage is the proportionate share stated in Column 7 of Exhibit B (formerly Column 12 of Exhibit G of the ARA), by which Pure Water Program Capital Improvement Costs, Repurified Water Revenue, and the Capital Expense Rate will be allocated among the City and the Participating Agencies. The Pure Water Capital Melded Percentage is based on each Party’s proportionate share of Projected Future Metro Flow, Projected Future TSS Flows, and Projected Future COD Flows, which proportions are weighted as described in Footnote 5 of Exhibit B.
1.45 Pure Water Program or PWP is the City’s phased, multi-year program designed to produce up to 83 million gallons per day of Repurified Water using new, expanded, or modified facilities, some of which will include Metro System facilities.
1.46 PWP Phase 1 or Phase 1 shall mean the first phase of the Pure Water Program, which modifies/constructs Metro System and Water Repurification System facilities and is designed to produce an annual average of 30 million gallons per day of Repurified Water.
1.47 PWP Phase 2 or Phase 2 shall mean the second phase of the Pure Water Program which modifies/constructs Metro System and Water Repurification System facilities and is designed to produce up to an additional annual average of 53 million gallons per day of Repurified Water.
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1.48 Recycled Water shall have the definition set forth in Title 22, Division 4 of the California Code of Regulations and shall mean water which, as a result of treatment of wastewater, is suitable for a direct beneficial use or a controlled use that otherwise could not occur.
1.49 Reject Stream from Demineralization Process or RSDP is a flow reject stream and treatment byproduct from a demineralization process at a potable reuse facility. Separately conveyed, it bypasses all secondary wastewater treatment processes. This flow primarily contains liquid and salts.
1.50 Repurified Water shall mean water which, as a result of advanced treatment of Recycled Water, is suitable for use as a source of domestic (or potable) water supply.
1.51 Repurified Water Revenue is the cost savings that will be realized when the City’s Water Utility’s annual costs per-acre foot for Repurified Water, including City Water Utility PW Costs, are less than the purchase costs per-acre foot for comparable water from the San Diego County Water Authority, as further described in Section 6.
1.52 Residuals shall mean RSDP and Centrate. In the future, Residuals may include other waste byproducts if the Parties agree in writing that other byproducts may be discharged into the Metro System.
1.53 South Bay Ocean Outfall or SBOO is the facility that is jointly owned by the International Boundary & Water Commission (U.S. Section IBWC) and the City. The outfall conveys and discharges treated effluent from the IBWC’s International Wastewater Treatment Plant and treated effluent from the City’s South Bay Water Reclamation Plant. As of the date of this Agreement, the outfall has a current Average Daily Flow Capacity of 174 million gallons per day. As of the date of this Agreement, the City owns 39.94% of the capacity of the outfall and the balance of the capacity is owned by the IBWC.
1.54 South Bay Water Reclamation Plant or SBWRP is the wastewater treatment facility located at 2411 Dairy Mart Road in San Diego, which includes four major processes:
primary treatment, secondary treatment, tertiary treatment, and disinfection.
1.55 Strength means the measurement of Total Suspended Solids and Chemical Oxygen Demand within the Flow and any other measurement required by law after the date of this Agreement or necessary for the Functional Design Methodology.
1.56 Total Suspended Solids or TSS means the insoluble solid matter in wastewater that is separable by laboratory filtration, as determined by the procedures specified in the most current edition of “Standard Methods for the Examination of Water and Wastewater,” or any successor publication which establishes the industry standard.
1.57 Tertiary Component is that portion of the wastewater treatment process that currently filters the secondary treated wastewater effluent through fine sand and/or anthracite coal to remove fine suspended solids and disinfects it to meet the requirements of the California Administrative Code, Title 22, or its successor for filtered and disinfected wastewater used for recycled and repurified water.
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1.58 Two-Party Approval is an approval mechanism under this Agreement that requires the City’s Administrative Approval and a two-thirds (2/3) vote or greater of the Metro JPA Directors present at a duly noticed Metro JPA public meeting as described more particularly in Section 16.
1.59 Variable Costs shall refer to the portion of the Functional Design Methodology costs that are allocated based on Metered Flow and Strength.
1.60 Water Repurification System shall mean any facilities, including treatment and conveyance facilities, the purpose of which is the production or conveyance of Repurified Water.
Water Repurification System includes, but is not limited to: the Tertiary Component of the North City Water Reclamation Plant to the extent being used to produce Repurified Water, the North City Pure Water Facility; the Repurified Water conveyance system, which will transport Repurified Water from the North City Pure Water Facility and/or other facilities to the Miramar Reservoir or other alternative location(s) as determined by the City; and any other Repurified Water treatment or conveyance facilities which are part of the Pure Water Program. These facilities are constructed and maintained at the expense of the City water utility and are excluded Metro System Costs under this Agreement.
2. OWNERSHIP AND OPERATION OF THE METRO SYSTEM
2.1 Rights of the Parties. The City is the owner of the Metro System, and any additions to the Metro System or other facilities constructed pursuant to this Agreement. As more particularly set forth in this Agreement, and subject to the terms and conditions of this Agreement, the rights of the Parties generally include the following:
2.1.1 All decisions with respect to the planning, design, construction, operation and maintenance of the Metro System shall rest with the City, in consultation with the Metro JPA.
2.1.2 The Participating Agencies shall have a contractual right to use the Metro System and to participate in its operation.
2.1.3 The City may transfer ownership of all or part of the Metro System at any time. In the event of a transfer, including a sale under Section 2.7, the City’s successor shall be bound by the terms of this Agreement, and the Participating Agencies rights under this Agreement shall not be affected by such a transfer.
2.1.4 Any Participating Agency may transfer or assign its rights and obligations under this Agreement. Any transfer shall first be approved by the City. No transfer may occur if the City reasonably determines, after consultation with the Participating Agencies involved, that the proposed transfer will imbalance or adversely impact the City’s ability to operate the Metro System.
2.2 Metro System Services.
2.2.1 The City shall provide wastewater conveyance, treatment and disposal services to the Participating Agencies through the Metro System, under the terms set forth in this Agreement.
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2.2.2 The City shall operate the Metro System in an efficient and economical manner, maintaining it in good repair and working order, all in accordance with recognized sound engineering and management practices.
2.2.3 The City shall convey, treat, and dispose of or reuse all wastewater received under this Agreement in such a manner as to comply with all applicable laws, rules and regulations.
2.3 Flow Commitment.
2.3.1 Subject to the provisions of this Agreement and absent a separate agreement of the Parties, all Flow within the capacity limits set forth in Exhibit B or any amendments or changes thereto shall remain in the Metro System.
2.3.2 This Agreement shall not preclude any Party from diverting Flow as a result of the construction of reclamation/reuse facilities or New Capacity outside of the Metro System.
2.3.3 Any Participating Agency may negotiate an agreement with the City to reduce all or part of their Contract Capacity. If a Participating Agency reduces its Contract Capacity to zero, that Participating Agency’s rights shall terminate under this Agreement and that Participating Agency shall no longer be considered a member of the Metro JPA. However, the agreement between the City and Participating Agency shall provide that the Participating Agency pays its proportionate share of Capital Improvement Costs for the remainder of the useful life of the facility(ies) constructed during the time the Participating Agency possessed Contract Capacity in the Metro System. This shall include, but is not limited to, any remaining portions of outstanding debt that was incurred for capital facilities during the time the Participating Agency had the right to send Flow into the Metro System, and the cost to disconnect the Participating Agency’s system from the Metro System. Any Contract Capacity that a Participating Agency chooses to relinquish under this section shall be treated as Pooled Capacity after the effective date of an agreement between the City and that Participating Agency. This section does not apply to Inter-Agency transfers of Contract Capacity, which involve the relinquished Contract Capacity being assigned to and assumed by another Participating Agency or the City. Inter-Agency transfers are governed by Section 3.2
2.3.4 Flow Projections. Currently, the Projected Future Strength and Flow Amounts are projected to the year 2050 in order to allow the Parties time to plan for future development and growth. However, these projections may be amended from time to time through the Exhibit B amendment processes in this Agreement to more fairly align with actual flow and strength data. The parties shall begin discussion to recalculate the Projected Future Strength and Flow Amounts set forth in Exhibit B by no later than January 1, 2040.
2.4 Funding Obligations. The City shall fund the acquisition, construction, maintenance and/or operation of the Metro System from monies in (or sewer revenues which populate) the Sewer Revenue Fund for the Metro System, and/or from construction funds derived from the sale of duly authorized sewer revenue bonds for the Metro System. Nothing in this Section or Agreement shall (i) obligate the City to make any payment for the acquisition, construction, maintenance or operation of the Metro System from monies derived from taxes or any other income or revenue of the City; (ii) be construed to obligate the City or any Participating Attachment 4
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Agency to pay from its annual income and revenues any sum which would create an indebtedness, obligation or liability within the meaning of the provisions of Section 18 of Article XVI of the Constitution of the State of California and, in the City’s case, San Diego Charter Section 99; or (iii) prevent the City, in its discretion, from using tax revenues or any other available revenues or funds of the City for any purpose for which the City is empowered to expend moneys under this Agreement. For the avoidance of doubt, subsections (i) and (ii) shall not relieve the City from its obligations to fund the Metro System as provided in this Section 2.4.
2.5 Limitations on Types and Condition of Wastewater.
2.5.1 Each Participating Agency shall minimize to the maximum extent practicable, the infiltration and inflow of surface, ground or stormwaters into its respective wastewater systems.
2.5.2 Each Participating Agency will ensure that all Industrial Users of its wastewater system are regulated by and comply with the City’s industrial pretreatment program.
City shall not require the Participating Agencies to take any actions against such Industrial Users beyond that which are (1) required under applicable laws, rules and regulations, (2) taken by the City, or (3) that can be taken, but are not being taken by the City.
2.5.3 City and the Participating Agencies agree that the Interjurisdictional Pretreatment Agreements executed by and between the City and each Participating Agency, as applicable, shall terminate effective upon the date of this Agreement. However, the separate transportation agreements that are currently in effect between or among the City and the Participating Agencies shall remain in effect in accordance with their terms. Each Participating Agency will not discharge wastewater originating outside its respective boundaries into the Metro System without the approval of the City, which shall not be unreasonably withheld.
2.5.4 Each Participating Agency shall be responsible for the violation of any applicable laws, rules or regulations associated with its respective discharge of wastewater into the Metro System. Nothing in this Agreement shall affect or prohibit the ability of any Participating Agency to hold third parties responsible for such violations. However, City shall be responsible for enforcement actions related to the violation of any applicable laws, rules, or regulations associated with industrial waste dischargers regulated by City, though each Participating Agency shall collaborate with City when necessary, on any enforcement response for pretreatment violations within a Participating Agency’s jurisdiction. However, the City shall not be responsible for enforcement or monitoring related to a Participating Agency’s compliance with its own NPDES Permit.
2.5.5 Food establishments and dischargers of fats, oils, and grease (FOG) are regulated and monitored by individual Participating Agencies within their jurisdiction.
Participating Agencies are responsible for the provision of FOG programs, services, and enforcement within their jurisdiction. The City will not provide FOG-related services or programs outside of the City’s jurisdiction.
2.6 Enforcement Actions. In the event a regulatory agency, imposes any penalty or fine, or takes other enforcement action, or a private citizen brings a citizen enforcement action to enforce Attachment 4
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regulatory requirements, (collectively, “Enforcement Actions”) relating to the conveyance, treatment, or disposal of wastewater in or from the Metro System or operation of the Metro System, the City shall determine as part of its investigation and response to the notice of violation whether the City or a Participating Agency or Agencies caused or contributed to the violation for reasons which may include, without limitation, exceeding their Contract Capacity, the contents of their wastewater, or the failure to maintain or operate the Metro System or a Participating Agency’s system. Any costs associated with an Enforcement Action including but not limited to fines, penalties, corrective measures, and costs of defense (collectively, “Penalty(ies)”) shall be shared by the Participating Agencies and the City proportionately based on Fixed Capacity as set forth in the then current Exhibit B, unless the City determines, based on verifiable facts, that the violation for which the Penalty is imposed was caused by, or was the result of, gross negligence or willful misconduct of the City or a Participating Agency.
2.6.1 For any Enforcement Actions (1) related to sanitary sewer overflows of 10,000,000 gallons or more from the Metro System occurring after the effective date of this Agreement, or (2) that the City reasonably anticipates will result in the Participating Agencies’ collective responsibility for the Penalties imposed to exceed 10% of the Metro Participating Agencies combined annual operations and maintenance budget for the Metro System for the fiscal year in which the Penalty is imposed (“Threshold Amount”), the City’s determination will be subject to review by the Metro JPA as set forth in 2.6.1.1 through 2.6.1.8 below. The scope of the Metro JPA’s review shall be limited to whether the violation for which the Penalty is imposed was caused by, or was the result of, gross negligence or willful misconduct of the City or a Participating Agency, and if so, how the Penalty should be fairly allocated. For all other Enforcement Actions, the City’s determination related to the allocation of Penalty shall be final.
2.6.1.1 The City will provide a copy of any report submitted to a regulatory agency in response to an Enforcement Action to the Metro JPA within 30 days of submitting that report to the regulatory agency. In that same communication, the City will also provide a summary of the City’s findings regarding causation and preliminary determination regarding the allocation of any Penalties. If these determinations have not been made, the City will provide an anticipated date that the information will be provided.
2.6.1.2 If the Metro JPA disputes the City’s determination as to the allocation, as evidenced by a vote approved by two-thirds of the Metro JPA Directors present at a duly noticed meeting, it shall notify the City in writing of the same within 90 days of receiving the City’s preliminary allocation determination.
2.6.1.3 The City and representatives of the Metro JPA shall meet and confer to discuss the matter and try to reach an agreement on the appropriate allocation. To facilitate resolution, the meet and confer process shall be treated as a settlement discussion under the California Evidence Code and shall be a confidential process. The meet and confer process shall focus on whether the violation for which the Penalties are being imposed is the result, in whole or in part, of the gross negligence or willful misconduct of the City or a Participating Agency, and if so, how the Penalties shall be allocated.
2.6.1.4 If through the meet and confer process, the City determines that the Participating Agencies’ collective responsibility for the Penalties imposed will be less than the Attachment 4
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Threshold Amount, then the City will inform the Metro JPA of this determination and allocate the Penalty as such, and no further action by the Metro JPA is required.
2.6.1.5 If through the meet and confer process, the City and representatives of the Metro JPA reach an agreement, and the Participating Agencies’ collective responsibility for the Penalties imposed will be equal to or greater than the Threshold Amount, then that agreement shall be subject to the Two-Party Approval process. The City and representatives of the Metro JPA shall have an opportunity to present the proposed agreement to the Metro JPA before a vote on the determination.
2.6.1.6 If the City and representatives of the Metro JPA are unable to reach an agreement and Participating Agencies’ collective responsibility for the Penalties imposed is equal to or exceeds the Threshold Amount, the City will make a final determination regarding allocation of the Penalty and present the determination to the Metro Commission.
2.6.1.7 In the event that Two Party Approval is required but is not achieved, each Participating Agency shall pay the portion of the Penalty allocated to them at the time that it is invoiced, however, such payment may be made under protest. The Parties shall engage in the dispute resolution procedures under this Agreement to resolve the issue, prior to any Party having the right to initiate litigation.
2.6.1.8 Penalties in excess of the Threshold Amount shall be separated out in the reconciliation billing and notated as a spill penalty with reference to the first day of the spill associated with the penalty.
2.7 Right of First Refusal.
2.7.1 The City shall not sell or agree to sell the Metro System without first offering it to the Participating Agencies. For the purposes of this section, “Participating Agencies” shall mean a Participating Agency, a group of Participating Agencies, or a third party representing one or more Participating Agencies. The term “sell” shall include any transfer or conveyance of the Metro System or of any individual treatment, collection, or reclamation facility or outfall within the Metro System.
2.7.2 The City and the Participating Agencies recognize that transfer of ownership of the Metro System is currently restricted by Sections 6.04 and 6.20 of the Installment Purchase Agreement between the City and the Public Facilities Financing Authority of the City, which inter alia restricts the transfer of ownership to the Metropolitan Wastewater Sewage District or other governmental agency whose primary purpose is to provide wastewater treatment. The City shall not seek to impose on bond holders a waiver of Section 6.04 or 6.20. Absent such a restriction, before the City sells or agrees to sell the Metro System, or any portion of it, the City shall offer to sell the Metro System to the Participating Agencies (the “Offer”) on the terms and at a price equal to that proposed for the sale of the Metro System to a third party. The City shall provide all Participating Agencies with written notice of the Offer per Section 13 . The Participating Agencies shall have ninety (90) days from the date of mailing of the Offer (the “Intent to Respond Period”) in which to notify the City of their intent to respond to the Offer. If a Participating Agency or Agencies notify the City of their intent to respond to the Offer, that Participating Agency or those Attachment 4
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Agencies shall have five months from the expiration of the Intent to Respond Period in which to accept or reject the Offer. The Offer shall contain the name of the proposed purchaser, the proposed sale price, the terms of payment, the required deposit, the time and place for the close of escrow, and any other material terms and conditions on which the sale is to be consummated. If no Participating Agency or Agencies notifies the City of its (or their) intent to respond to the Offer within the Intent to Respond Period, the City may move forward with the sale of the Metro System without further notice to the Participating Agency in accordance with Section 2.7.3 below.
2.7.3 If the Participating Agencies give timely notice of their intent to respond and timely notice of their acceptance of the Offer, then the City shall be obligated to sell and the Participating Agencies shall be obligated to purchase the Metro System or any individual treatment, collection or reclamation facility or outfall within the Metro System, as applicable, at the price and on the terms and conditions of the Offer. If the Participating Agencies do not give timely notice of their intent to respond or their acceptance of the Offer, or do not submit an offer on the same terms and conditions as the Offer, the City may, following the end of the Offer period, sell the Metro System, or any portion of it, at a price and on terms and conditions no less favorable to the City than those in the Offer. The City shall not sell the Metro System to any third party on terms or at a price less favorable to the City from the terms and price contained in the Offer absent compliance with the terms of this Section. The City’s sale of the Metro System under Section 2.7, is a transfer of ownership subject to Section 2.1.3.
2.7.4 Nothing herein shall prevent the City from entering into a financing agreement which may impose limits on the City’s power to sell the Metro System to the Participating Agencies pursuant to Section 2.7.1 if the City reasonably believes that such a financing agreement is in the City’s best interest. Neither the entry into such a financing agreement by the City nor the performance thereof by the City shall constitute a breach or default by the City hereunder.
2.8 Uniform Enforcement of Pretreatment Program by City. The Parties have determined that it is in their best interests for a single agency to be responsible for management of the pretreatment program for the Metro System in order to: (a) Ensure protection of the entire Metro System, including the successful operation of the Pure Water Program; (b) Provide consistent and uniform regulation of Industrial Users, including those subject to pretreatment requirements; (c) Provide for transparent and fair cost recovery from all dischargers; and (d) Promote efficiency and accountability in the administration of the Metro System. For these reasons, the Parties are delegating pretreatment responsibilities to the City, except regulation of Food Establishments and FOG dischargers, as more fully set forth in this Agreement and in Administrative Agreement #1 Between City of San Diego and Participating Agencies for the Unified Management of Industrial Waste Discharge Pretreatment and Enhanced Source Control Programs (“Administrative Agreement #1”). Notwithstanding the above, the City may enter into supplementary agreements with an individual Participating Agency, or a group of Participating Agencies, relating to industrial waste discharge pretreatment and enhanced source control programs unique to such Participating Agency(ies), so long as the supplementary agreement incorporates a separate cost proportional to the participation of such Participating Agency or group of Participating Agencies that is the sole responsibility of such Participating Agency(ies).
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2.8.1 Delegation of Authority. Each Participating Agency shall and hereby does delegate to City full authority and responsibility to operate, manage, and enforce an effective pretreatment program throughout the Metro System to ensure that all Industrial Users are subject to uniform rules and regulations, with direct billing to Industrial Users by the City to begin on the first July 1 following execution of this Agreement.
2.8.2 Operations and Maintenance. Procedures relating to the operation, management, enforcement, and cost recovery for the pretreatment program are set forth in Administrative Agreement #1.
2.8.3 Amending Pretreatment Program Procedures. Administrative Agreement #1 may be amended from time to time as set forth in Section 15. In the event of any conflict between this Agreement and Administrative Agreement #1, the terms of this Agreement shall control.
2.8.4 Adoption of Local Ordinances. By no later than June 30 following the Effective Date of this Agreement, every Participating Agency shall adopt a local ordinance conforming with the sample ordinance contained in Administrative Agreement #1 and the City’s pretreatment ordinance, each as amended from time to time, to ensure consistency throughout the Metro System.
2.8.5 Identification of New Industrial Users. Participating Agencies shall notify the City of any identified potential new Industrial Users within their respective boundaries while the City will bear responsibility for inventory assessments on a regular basis as set forth in Administrative Agreement #1.
2.8.6 Permitting and Permit Compliance. Nothing in this Agreement shall be construed to relieve any discharger to the Metro System of the responsibility to obtain and comply with any required permits for, and to comply with rules and regulations applicable to, dischargers to the Metro System. If the City determines that an Industrial Wastewater Control Program Permit is required, it shall issue the permit subject to the City’s permit requirements. The City’s approval or denial of any application for, or revocation of, an Industrial User Permit shall be in accordance with Chapter 6, Article 4 of the San Diego Municipal Code as well as any other applicable federal, state or local regulations, any published City guidance related to the Industrial Wastewater Control Program, and the City’s Enforcement Response Plan, all as may be amended, renumbered, or renamed from time to time. The City and any Participating Agency may elect to coordinate and combine issuing their wastewater discharge permits to Industrial Users when deemed appropriate by both parties. Any agreement between the City and the Participating Agencies related to permitting under the Industrial Wastewater Control Program, shall not transfer responsibility to City for any other type of permitting outside of the City’s jurisdiction, or subject any local agency as that term is defined in California Government Code section 53090, to local building and zoning ordinances that the local agency is not otherwise legally subject to.
2.8.7 Inventory of Industrial Users. City shall create and maintain an inventory of all Industrial User within the Metro System as soon as reasonably practicable following execution of this Agreement. The Participating Agencies shall review the inventory and shall notify the City Attachment 4
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of an Industrial User(s) in its jurisdiction that is not identified on the inventory as set forth in Administrative Agreement #1.
2.8.8 Evaluation, Monitoring, Enforcement and Program Review. Upon the effective date of this Agreement, it shall be the City’s right and obligation to carry out pretreatment evaluation, permitting, monitoring and/or enforcement throughout the Metro System consistent with the procedures set forth in Administrative Agreement #1. The City’s pretreatment program review shall occur as necessary, but no less than once every five (5) years. Nothing herein shall be construed as prohibiting any Participating Agency from enforcement of its own pretreatment ordinance within its jurisdiction.
2.8.9 City’s Direct Billing of Industrial Users. The City shall directly bill Industrial User throughout the Metro System to recover costs associated with the pretreatment program as set forth in Administrative Agreement #1. The City Council shall set and approve such costs in a publicly noticed meeting pursuant to the procedures set forth in Administrative Agreement #1.
2.9 Wastewater Generated at Military Bases. The City may contract directly with federal military bases that are connected to the Metro System for wastewater services and capacity subject to the terms of this Section 2.9. If a United States military base is located within a Participating Agency’s jurisdiction, the Participating Agency may request that the City bill that military base directly as a separate and distinct customer. In the event the City agrees to accept the military’s wastewater and bill the military base as a separate and distinct customer, then (1) the Participating Agency shall have no billing obligations with respect to the military base; (2) each Participating Agency whose sewage line conveys the military base’s wastewater reserves the right to negotiate and charge the federal government a conveyance or transportation fee for use of that Participating Agency’s sewer line; (3) the City shall require that the military base comply with the applicable City pretreatment rules; and (4) the City agrees that the wastewater generated by the military base shall not be considered wastewater of the Participating Agency with respect to capacity once the City enters into an agreement with the military base. Any transfers of capacity that are appropriate or necessary to accommodate flow from military bases, if needed, would be governed by Section 3.2 herein, “Inter-Agency Transfers of Contract Capacity.”
3. CAPACITY RIGHTS
3.1 Contract Capacity. Each Participating Agency shall have the contractual right to discharge wastewater to the Metro System up to the limits set forth in Exhibit B (“Contract Capacity”). Each Party’s Contract Capacity as stated in Exhibit B, is used for the purpose of allocating the Metro System’s Pure Water Program Capital Improvement Costs, Repurified Water Revenue, and the Capital Expense Rate under this Agreement.
3.2 Inter-Agency Transfers of Contract Capacity. The Participating Agencies and the City may buy, transfer, sell or exchange all or part of their Contract Capacity among themselves on such terms as they may agree upon, subject to the following:
3.2.1 Any Party requesting to buy, transfer, sell, or exchange all or part of their Contract Capacity (“Inter-Agency Transfer”) shall provide a written proposal to the City Attachment 4
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including the proposed terms of such Inter-Agency Transfer. The Party requesting the InterAgency Transfer shall also provide notice to all other Participating Agencies under Section 13 concurrently with submitting the proposal to the City.
3.2.2 All Participating Agencies will have 45 days to provide any technical input to the City regarding the proposed Inter-Agency Transfer. Any Participating Agency providing technical input shall provide a copy of such input to all other Participating Agencies under Section 13 concurrently with submitting the input to the City.
3.2.3 Upon receipt of a request for an Inter-Agency Transfer, the City will review the request, consult with the affected Participating Agencies, and consider any technical input provided by other Participating Agencies.
3.2.4 All proposed purchases, transfers, sales or exchanges of Contract Capacity require the City’s Administrative Approval prior to becoming effective. No Contract Capacity may be transferred if the City determines that said transfer will imbalance, or will otherwise adversely impact the City’s ability to operate the Metro System. Provided, however, that the Participating Agency seeking the transfer may offer to cure such imbalance at its own expense. If the Participating Agency makes such an offer, the City may not unreasonably withhold Administrative Approval.
3.2.5 If the City approves the offer as proposed, the City shall adjust the Contract Capacity set forth in Exhibit B per Section 3.6 to reflect the approved changes. If the City determines, after taking the steps in Section 3.2.3 that an Inter-Agency Transfer may be approved if the request is modified, the City will provide a written notice to all Participating Agencies of the modified Inter-Agency Transfer under Section 13 no less than 30 days prior to the Inter-Agency Transfer becoming effective. Such modified Inter-Agency Transfer will become effective 30 days following the written notice being provided, and the City will prove an updated Exhibit B per Section 3.6 reflecting the approved changes.
3.2.6 If a Participating Agency reduces its Contract Capacity to zero through an Inter-Agency Transfer, that Participating Agency’s rights under this Agreement shall terminate and that Participating Agency shall no longer be a member of the Metro JPA. The Participating Agency shall remain responsible for all outstanding financial obligations under this Agreement, unless the Inter-Agency Transfer Agreement assigns those obligations to the Participating Agency accepting the transfer and that agency assumes those obligations. Outstanding financial obligations include, but are not limited to, a Participating Agency’s proportionate share of Capital Improvement Costs for the remainder of the useful life of the facility(ies) constructed during the time the Participating Agency possessed Contract Capacity in the Metro System, including any remaining portions of outstanding debt incurred for capital facilities during the time the Participating Agency had the right to send Flow into the Metro System, and the cost to disconnect the Participating Agency’s system from the Metro System.
3.3 New Contract Capacity. The Parties recognize that the Metro System may be modified to create capacity in the Metro System beyond that set forth in Exhibit B as a result of the construction of additional facilities, acquisition of facilities, increased flows, or as required by regulatory or similar such action. If capacity in excess of the Contract Capacity (“New Contract Attachment 4
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Capacity”) is required or requested by a Party, the Parties shall negotiate in good faith to provide the needed or requested capacity. If the Parties agree to provide New Contract Capacity, they shall memorialize the agreement for New Contract Capacity in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. If the parties execute an Administrative Agreement for New Contract Capacity, Exhibit B shall also be adjusted pursuant to Section 3.6 to reflect the New Contract Capacity.
3.4 Reductions in Metro System Capacity. The Parties further recognize that Metro System Capacity may be reduced to comply with, or in response to, applicable permit conditions, or related regulatory action, or sound engineering principles. In the event that the capacity of the Metro System is re-rated to levels below the numbers reflected in the Totals Line set forth in Exhibit B, then the Contract Capacity shall be reallocated proportionately among the Parties based on the percentages of fixed ownership set forth in Exhibit B at that point in time, subject to the City’s Administrative Approval and amendment of Exhibit B.
3.5 Restrictions on Veto of Transfers and Acquisitions of Capacity. Each Party understands and agrees that no Participating Agency has a right to veto or prevent the transfer of capacity between other Participating Agencies or the City, nor the creation or acquisition of new capacity for another Participating Agency or Agencies. By signing this Agreement, each Participating Agency is expressly preapproving such actions. The sole right of a Participating Agency to object to any of the foregoing shall be through expression of its opinion to the Metro JPA and, where applicable, through exercise of its rights under the dispute resolution provisions of this Agreement.
3.6 Amendments to Exhibits B. If the City determines that an amendment to Exhibit B is required for any reason other than a request from a Participating Agency under Sections 2.3.3 and Sections 3.2, and that reason only requires the City’s Administrative Approval, the City shall prepare and circulate to all Participating Agencies the proposed amendment to Exhibit B within 60 days of determining such an amendment is necessary. The Participating Agencies will have sixty (60) days to provide comments to the City, and all comments submitted to the City by a Participating Agency shall also concurrently be submitted to all other Participating Agencies. The City will review all comments received, prepare final amendments to Exhibit B to reflect adjustments in Contract Capacity, and circulate the final amended Exhibit B by no later than sixty (60) days after the City’s Administrative Approval. If the amendment to Exhibit B requires an approval process other than the City’s Administrative Approval, the Parties will follow the required approval process, and once that is completed, the City will prepare and provide the final version of Exhibit B within 60 days of the completion of the approval process. The City shall note each amendment and amendment date in the Exhibit List and shall keep an updated version of Exhibit B on file with the City Public Utilities Department at all times. An amendment to Exhibit B shall not be retroactive, except as provided in Section 4.4.3.3.
3.7 The South Bay Ocean Outfall. Nothing in this Agreement shall limit the City’s right to transfer capacity rights in assets that are not a part of the Metro System, including without limitation that portion of the South Bay Ocean Outfall which is not part of the Metro System.
Attachment 4
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4. FINANCE, BUDGETING, AND ACCOUNTING: PAYMENT AND
MONITORING PROVISIONS
4.1 Payment for Metro System Facilities. Through the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the costs of planning, design and construction of all of the Metro System facilities which are identified in Exhibit A .
4.2 Payment for Additional Metro System Facilities. Through the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the costs of acquisition, planning, design and construction of such facilities, in addition to those set forth on Exhibit A, as are necessary to (a) convey, treat, dispose, and reuse wastewater in the Metro System; (b) provide the Contract Capacity set forth in Exhibit B; and (c) maintain hydraulic capacity as otherwise required by sound engineering principles. Each Participating Agency shall pay its share of the costs necessary to ensure the Metro System maintains compliance with applicable laws, rules and regulations, including the Ocean Pollution Reduction Act of 1994 and its successor(s), as well as present and future waivers of applicable treatment standards at any Metro System treatment facility. Exhibit A may be amended to reflect replaced or rehabilitated facilities, or changes in facilities, subject to the City’s Administrative Approval; however, if the City proposes to add a new Metro facility to Exhibit A, or convert a City facility to a Metro facility that will be added to Exhibit A, then each such amendment shall be (1) subject to the City’s Administrative Approval, in its sole discretion, when the addition or conversion is for the purpose of complying with applicable laws, rules, or regulations; or (2) supported by an independent third-party study setting forth the benefits to the Metro System of each new facility, including a cost allocation for capital and projected annual maintenance costs if the addition or conversion is for any other purpose. For any new Metro facility or conversion of a City facility to a Metro facility proposed to be added or converted under (2) above, any such proposal must be memorialized in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. Once approved, the City shall amend Exhibit A accordingly and shall give notice of any amendments to all Participating Agencies. The City shall keep an updated version of Exhibit A on file with the City Public Utilities Department. Exhibit A may be amended to reflect other changes to the Metro System only as expressly provided in this Agreement.
4.3 Payment for Operation and Maintenance. Through the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the Operation and Maintenance Costs of all Metro System facilities. The Participating Agencies shall not pay for the Operation and Maintenance Costs of the Water Repurification System, which are City Water Utility PW Costs.
4.4 Charges Based on Flow, Strength and Fixed Capacity: Exception.
4.4.1 Except as otherwise described in this Section 4.4, a Participating Agency’s share of the charges in this Section 4 shall be based on its proportionate Flow, Strength, and Fixed Capacities as set forth in Exhibit B, as described more fully in Section 5.
4.4.2 Notwithstanding Section 4.4.1, or any other provision of this Agreement, a Participating Agency’s share of PWP Phase 1 Capital Improvement Costs, PWP Phase 1 Repurified Water Revenue, and Pure Water Program Capital Expense Rate attributable to the Attachment 4
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Metro System as described in Sections 6.6 and 6.7 shall be assessed or credited based on the Parties’ proportionate share of the Pure Water Capital Melded Percentages set forth in Column 7 of Exhibit B. The City shall annually allocate the estimated and actual PWP Phase 1 Capital Improvement Costs and revenues which are attributable to the Metro System in proportion to each Party’s Pure Water Capital Melded Percentages as set forth in Column 7 of Exhibit B when estimating quarterly payments and conducting year-end adjustments.
4.4.3 Each Party recognizes that operation within respective Projected Future Strength and Flow Amounts is essential to the accurate allocation of costs and revenues under the Pure Water Program. In recognition of same, the Parties agree as follows:
4.4.3.1 Contract Capacity Transfers – Increases in Fixed Capacity Components. Beginning in the next fiscal year after the effective date of this Agreement, if a Party exceeds their Capacity Rights or any individual component of the Capacity Rights set forth in Exhibit B, by any one of the following triggers based upon data available at the completion of a fiscal year: (1) Three percent (3%) in a fiscal year for any two consecutive fiscal years, (2) One MGD in a fiscal year for any two consecutive fiscal years, or (3) The equivalent Strength of one MGD in a fiscal year for any two consecutive fiscal years; then, the City shall prepare an amendment to Exhibit B that reflects a Contract Capacity Transfer for that Party based on the available information about such Party’s exceedance(s) and the methodology set forth in Exhibit E.
After Phase 2 is completed, if, due to contract capacity transfers or reductions in capacity, the Pooled Capacity drops to less than two percent (2%) of the total Contract Capacity, a capacity study shall be initiated to evaluate existing facilities for new capacity. The City shall thereafter amend Exhibit B under the process set forth in Section 3.6 to reflect the new Contract Capacity for all Parties. Any changes to the methodology in Exhibit E shall be made pursuant to an Administrative Agreement subject to the Joint Administrative Approval Process described in Section 15.
4.4.3.2 Contract Capacity Transfers – Decreases in Fixed Capacity Components. Beginning in the next fiscal year after the effective date of this Agreement, if a Party can show through an independent report that its Monthly Average Daily Flow, annual average pounds per day of COD, annual average pounds per day of TSS, Incremental Peak Flow, or RSDP is projected to decrease ten percent (10%) or more below their Projected Future Strength and Flow Amounts using data from a minimum of three (3) consecutive prior fiscal years as support, then City shall prepare a proposed amendment to Exhibit B that reflects the new Projected Future Strength and Flow Amounts for all Parties based on such Party’s decrease and other relevant information using sound engineering principles and the guidelines set forth in Exhibit E. The City’s proposed amendment shall be subject to the Two-Party Approval Process. If approved, the City shall thereafter amend Exhibit B using the process set forth in Section 3.6.
4.4.3.3 If Exhibit B is amended to update one or more Parties’ Projected Future Strength and Flow Amounts pursuant to Section 4.4.3.1 or 4.4.3.2, the change in Projected Future Strength and Flow Amounts shall be effective retroactively to the beginning of that fiscal year, and the City shall use the updated amounts in estimating quarterly payments and conducting year-end adjustments for Pure Water Program costs and revenues. Therefore, any Party that underpaid based on prior Exhibit B Fixed Capacity amounts (which were based on prior Projected Future Strength and Flow Amounts) shall pay the retroactive amount due in quarterly installments Attachment 4
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in its quarterly payments the following fiscal year; any Party that overpaid based on previous Exhibit B Fixed Capacity amounts shall receive a credit in quarterly installments in its quarterly payments the following fiscal year. Notwithstanding the preceding sentence, if the retroactive amount due exceeds 20% of a Party’s average annual Metro System payments for the previous four (4) fiscal years, such Party may elect to pay the retroactive amount due in its quarterly payments over the subsequent four (4) fiscal years, with interest, based on the most recent quarterly earnings rate of the City’s Treasurer’s Pooled Rate of Return; any Party that overpaid in an amount that exceeds 20% of their annual average Metro System payments for the previous four (4) fiscal years based shall receive a credit in its quarterly payments spread over the following four (4) fiscal years.
4.5 Monitoring Flow and Strength.
4.5.1 The City shall monitor Flow and Strength. The City shall own and operate as part of the Metro System monitoring devices which will measure the amount of Flow discharged into the Metro System, unless otherwise agreed by the City and a Participating Agency. These devices shall be installed at locations appropriate to accurately monitor Flow and Strength. The City may also monitor Flow and Strength at other locations as it deems appropriate. For all currently unmetered areas, unit counts or agreed upon flow estimates where unit counts are not appropriate shall be used. For adding or subtracting unit count areas, the average current Metro Flow per unit shall be used consistently for all Parties. These unmetered unit counts will be updated at least once every five (5) years. If the flow in an unmetered area is over 0.5 MGD at a specific connection point, then a meter shall be added for that area, if possible. Exhibit F provides the Flow formulas that shall be used to determine the payment obligation for each Party, or a grouping or subgrouping of Parties, as applicable. Exhibit F shall be distributed to all Parties with the budget estimates that are sent annually pursuant to Section 5.7.1. The City currently provides all Participating Agencies with access to their data from the Flow metering devices, including providing access to their raw data, and will continue to do so according to the Parties’ established practices on the Effective Date of this Agreement. Changes to Exhibit F may be made upon the City’s Administrative Approval.
4.5.2 In measuring Strength, the frequency and nature of the monitoring shall not be more stringent for the Participating Agencies than it is for the City. The frequency, nature, and locations of Strength measurements, as well as the procedures used to determine Strength, shall be reviewed at least once every five (5) years and if changes are appropriate or required, the City may change the Strength measurements subject to the Two-Party Approval process. When conducting sampling within a Participating Agency’s service area, the City shall follow appropriate safety and security measures. The City and Participating Agencies will coordinate with the Participating Agency’s operations staff to ensure facilities are not negatively impacted by inspections.
4.5.3 The City shall report Strength data to the Participating Agencies at least quarterly.
4.5.4 The City shall notify the Metro JPA’s Executive Director and any directly affected Participating Agency within 24 hours of any unpermitted or unlawful discharge or release of effluent from the Metro System which may be reportable to the Regional Board, or any other regulatory agency, and which may result in civil or criminal penalties or administrative Attachment 4
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enforcement proceedings pursuant to Water Code sections 13261, et seq., section 13300, et seq., Government Code section 54740 et seq., or other provisions of law. Upon request from the Metro JPA or a Participating Agency, City shall provide the Metro JPA or affected Participating Agencies with copies of all non-privileged related correspondence to and from the Regional Board. The City shall endeavor to confer with Metro JPA staff during the report preparation process and before any report is submitted to a regulatory or enforcement agency.
5. FINANCE, BUDGETING, AND ACCOUNTING: SYSTEM OF CHARGES
5.1 Charges Authorized. The City agrees to implement, and the Parties agree to abide by a system of charges called Functional Allocated Billing (FAB). This system allows the City to equitably recover from all Participating Agencies their proportional share of the net Metro System Costs described in this section:
5.2 Functional Allocated Billing (FAB). The City shall annually determine the FAB rate based on the projected Metro System Costs (as defined below) for the forthcoming fiscal year, less all Metro System Revenues (as defined below).
5.2.1 Calculation of FAB Rates.
5.2.1.1 The City shall determine the unit FAB rates by allocating net costs (Metro System Costs less Metro System Revenues) between the fixed and measured variable parameters of Capacity Rights, such as Monthly Average Daily Flow, Incremental Peak Flow, COD, TSS, and RSDP as set forth in Exhibit B. These allocations are based on the approved Functional-Design Methodology analyses for sewer system components and estimated Operation and Maintenance (O&M) Costs allocated to each parameter.
5.2.1.2 Beginning one (1) year after substantial completion of the final project of Phase 1 of the Pure Water Program for which sewer revenue funds were used, the City shall have the FAB, which includes the Functional Design Methodology, professionally reviewed at least once every five (5) years.
5.2.1.3 After conducting a professionally developed independent thirdparty report, the City may propose to change the FAB, including the Functional Design Methodology, to include any other parameter, or modify any term governed by this Section 5.2.1, by way of an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. However, the City may revise the FAB, including the Functional Design Methodology at any time to include any other measurement required by law after the effective date of this Agreement subject to the City’s Administrative Approval, in its sole discretion. City will notify all Participating Agencies of any such review or revision no later than sixty (60) days after City’s Administrative Approval. Once approved, the FAB resulting from any review or revision under this Section will become the current approved version until it is revised by a future professional independent third-party study or a change in law.
5.2.1.4 Each of the parameters will have a fixed and variable O&M charge between 0% and 100%. Fixed Capacity Charges will be based on the Contract Capacity in Exhibit B. Variable charges will be based on measured parameters such as Metered Flow, Strength and RSDP.
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5.2.1.5 Costs for capital improvements, capital replacement, and rehabilitation costs including financing shall be based on the approved Functional-Design Methodology and the Contract Capacity in Exhibit B.
5.2.1.6 The net cost allocated to each of the parameters shall be divided by the total Metro System quantity for that parameter to determine the unit rates for each parameter.
These unit rates shall apply uniformly to all Parties.
5.3 Metro System Costs. The following shall at a minimum be considered Metro System Costs for purposes of calculating the annual FAB rate:
5.3.1 Except as provided in Section 5.4 (Excluded Costs), the annual Operation and Maintenance Costs and annual costs associated with administration, replacement, annual debt service costs and other periodic financing costs and charges, capital improvement, insurance premiums, claims payments and claims administration costs of the Metro System, including projected overhead, shall be calculated using generally accepted accounting practices to reflect the costs of the Metro System.
5.3.2 Fines or penalties imposed on the City as a result of the operation of the Metro System, unless the fine/penalty is allocated to the City or a Participating Agency as provided in Section 2.5.5.
5.4 Excluded Costs. The following items shall not be considered Metro System Costs for purposes of calculating the annual FAB rate:
5.4.1 Costs related to the City of San Diego’s municipal sewer, water (including City Water Utility PWP Costs), and/or stormwater systems as determined by City’s reasonable calculations consistent with sound engineering and best management practices.;
5.4.2 Right-of-way charges for the use of public streets of the City or any Participating Agency. The City and the Participating Agencies agree not to impose a right-of- way charge for the use of its public rights-of-way for Metro System purposes;
5.4.3 Capital Improvement Costs or Operations and Maintenance Costs of any non-Metro System facility not included in Exhibit A, including, but not limited to, any costs associated with the ECAWP Project;
5.4.4 Those costs otherwise identified as excluded costs in Section 6.3.
5.5 Metro System Revenues and Allocations. The following revenues shall be at a minimum considered Metro System Revenues for purposes of determining the annual FAB rate:
5.5.1 Any grant or loan receipts or any other receipts that are attributable to the Metro System or Metro System components of the Pure Water Program, including, but not limited to, all compensation or receipts from the sale, lease, or other conveyance or transfer of any asset of the Metro System or Metro System components of the Pure Water Program. Any such receipts attributable to the Metro System components of the Pure Water Program shall be allocated among Attachment 4
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the City and the Participating Agencies in the proportions set forth in Exhibit B Fixed Capacity amounts.
5.5.2 All compensation or receipts from the sale or other conveyance or transfer of any Metro System byproducts, including, but not limited to, gas, electrical energy, sludge products, and Recycled Water produced at the NCWRP and SBWRP and the future Central Area Plant.
5.5.3 Payments by the City’s Water Utility for the Capital Expense Rate, as calculated under provisions in Section 6.7. These proceeds shall be allocated among the City and Participating Agencies in the proportions set forth in Exhibit B Fixed Capacity amounts.
5.5.4 Those portions of Repurified Water Revenue attributable to the Metro System, as calculated under provisions in Section 6.6.3. These revenues shall be allocated among the City and Participating Agencies in the proportions set forth in Exhibit B Fixed Capacity amounts.
5.5.5 Any other non-operating revenues, including, but not limited to interest income included in the income credit portion of the annual audit.
5.6 Excluded Revenue. The following revenues shall be excluded from Metro System Revenues for purposes of determining the annual FAB rate:
5.6.1 Proceeds from the issuance of debt for Metro System projects.
5.7 Estimate and Billing Schedule and Year End Adjustment.
5.7.1 The City shall estimate the FAB rates on an annual basis prior to January 15 and provide budget estimates for the upcoming fiscal year to all Parties. The City shall quantify the FAB rates by estimating the quantity of Flow, Strength, and Fixed Capacity Charges for each Party, based on that Party’s Metered Flow for the past year and the cumulative data of sampling for Strength constituents such as COD and TSS over the preceding five years and Fixed Capacities set forth in Exhibit B. If the cumulative five-year Strength data is no longer indicative of discharge from a Party, and a Contract Capacity Transfer has been approved pursuant to Sections 4.4.3.1,
4.4.3.2, or 3.2, then the City may eliminate the previous higher readings subject to the City’s Administrative Approval.
5.7.2 Prior to March 1 of each year the City will provide a mid-year review of the current year’s Metro System Capital Improvement Costs and Operations and Maintenance Costs and offsetting non-operating revenues such as grant or loan proceeds, including fiscal year-end projections and provide such reviews to the Participating Agencies.
5.7.3 The City shall determine the volume of MBC Return on an annual basis and for billing purposes only. The costs of treating MBC Return shall be allocated to the Parties in proportion to their Metered Flow and Strength. If a Party’s Monthly Average Daily Flow plus MBC Return exceeds their Contract Capacity set forth in Exhibit B, it shall not be treated as an exceedance pursuant to Section 4.4.3.1.
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5.7.4 The City shall bill the Participating Agencies quarterly, invoicing on August 1, November 1, February 1 and May 1. Each bill shall be paid within thirty (30) days of mailing. Quarterly payments will consist of the total estimated cost for each Participating Agency, based on their estimated Flow, Strength, and Fixed Capacity Charges, divided by four.
5.7.5 At the end of each fiscal year, the City shall determine the actual Metro System Costs and the actual Metered Flow as well as the cumulative Strength data for the City and each of the Participating Agencies. The City shall make any necessary adjustments to the unit rates for Flow and Strength such as COD, TSS and Fixed Capacity Charges based on actual costs for the year as determined through the annual audit process in Section 5.8.2 of this Agreement. The City shall then recalculate the FAB rate for the year using actual audited costs for the year, actual Metered Flow, Residuals, MBC Return, cumulative Strength factors, and Fixed Capacity Charges for the City and for each Participating Agency. The City shall credit any future charges or bill for any additional amounts due against the quarter after the prior year costs have been audited.
5.8 Financial Statements.
5.8.1 The City shall keep records and accounts of all costs and expenses relating to conveyance, treatment, disposal, and reuse of wastewater, and production of Repurified Water, and the acquisition, planning, design, construction, administration, monitoring, operation and maintenance of the Metro System and Water Repurification System, and any grants, loans, or other revenues received therefor. The City shall keep such records and accounts for at least four (4) years after the completed audit, or for any longer period required by law or outside funding sources.
5.8.2 Annual Audit. Said records and accounts shall be subject to reasonable inspection by any authorized representative of any Participating Agency at its expense. Further, said accounts and records shall be audited annually by an independent certified public accounting firm appointed by the City. A copy of said report shall be available to any Participating Agency.
As part of said audit, the actual amount of City Water Utility’s PW Costs, Pure Water Program costs attributable to the Metro System, Repurified Water Revenue, and the Capital Expense Rate shall be determined and audited by the City’s external auditors and Participating Agency representatives, and a cumulative and annual summary of such amounts shall be included as a footnote or attached to the audit of the Metro System. Cost summaries shall include separate lines for Capital Improvement Costs and Operation and Maintenance Costs.
5.8.3 The City shall make a good faith effort to complete the annual audit, and any related adjustments under this Agreement as described in Section 5.8.2, by the end of the following fiscal year.
5.9 Debt Financing. The City retains the sole right to determine the timing and amount of debt financing required to provide Metro System Facilities. The annual debt service plus inprogress Capital Improvement Costs to maintain capacity in and of the Metro System shall be allocated to the Participating Agencies consistent with the Exhibit B Contract Capacity allocations effective on the date the debt is issued. If a Participating Agency wishes to prepay Capital Improvement Costs, and the City is able to accommodate such a request, then a Participating Agency may prepay their proportional share of Capital Improvement Projects. If a Participating Agency wishes to withdraw or reduce their Flows and/or Strengths from the Metro System per Attachment 4
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Section 2.3.3 of this Agreement, such agency will remain responsible for its pro-rata share of all outstanding debt incurred at the time the debt was issued until it is satisfied, irrespective of withdrawal, reduction in Flows and/or Strengths, or Agreement expiration. If the City refunds debt, it shall allocate such refunds consistent with the Exhibit B Contract Capacity allocations effective on the date the debt was issued.
5.10 Allocation of Operating Reserves and Debt Service Coverage. The Parties shall continue to comply with the protocol set forth in Exhibit C, Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies, which exhibit may be amended from time to time consistent with Section 5.11.
5.11 Amending the System of Charges. Except as otherwise provided in Section 5.2.1.6, the Parties may amend any provision in this Section 5 regarding the Finance, Budgeting, and Accounting System of Charges in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15.
6. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 1
6.1 North City Water Reclamation Plant Modification. As part of Phase 1 of the Pure Water Program, the City intends to modify the North City Water Reclamation Plant (a Metro System facility) and expand its capacity to 52 MGD. In addition, the City intends to construct the North City Pure Water Facility on a nearby site to produce Repurified Water. This Section sets forth the costs and revenues associated with the Pure Water Program attributable to the Metro System. Exhibit A includes current constructed Metro System facilities and existing and proposed future Phase 1 facilities.
6.2 New, Expanded or Modified Metro System Facilities. Each new, expanded, or modified Metro System facility, which is part of the Pure Water Program, and is used in relation to the production of Repurified Water (in addition to the modification and expansion of the North City Water Reclamation Plant) shall be governed by this Section.
6.3 Costs Excluded from Metro System Costs – Phase 1. All of the following Pure Water Program costs, including Capital Improvement Costs, Operation and Maintenance Costs, and other related costs (including administration, insurance, claims, and overhead) shall be excluded from Metro System Costs for purposes of calculating the annual FAB rate.
6.3.1 General Exclusions:
6.3.1.1 Costs of the Water Repurification System and any Metro System facilities to the extent constructed, modified, expanded, or used for the purpose of treating wastewater beyond secondary treatment (ocean discharge standard under current law). This shall include costs for preliminary treatment, primary treatment, and secondary treatment to the extent such costs are higher than they would otherwise be due to the production of Repurified Water.
6.3.1.2 Costs for fail-safe disposal, if necessary, for design capacity for Repurified Water, including, but not limited to, any costs associated with the reservation of capacity at the Point Loma Wastewater Treatment Plant.
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6.3.1.3 Costs for the demolition or replacement of existing Metro System facilities with similar facilities for the purpose of making space available for Water Repurification System facilities. Such costs may consider the current asset value or market value of the existing Metro System facility.
6.3.2 Cost Exclusions Specific to North City Water Reclamation Plant Improvements:
6.3.2.1 Costs for increased aeration tank volume to the extent the new volume exceeds the amount necessary to provide 52 MGD capacity. Determination of sizing to provide 52 MGD capacity shall be based on the current tank volume necessary to provide 30 MGD capacity.
6.3.2.2 Costs for the methanol feed system.
6.3.2.3 Costs for RSDP disposal, including, but not limited to, pump stations, pipelines, retreatment, ocean outfall, and monitoring.
6.3.2.4 Costs for the use of existing tertiary water filters for Repurified Water purposes. Such costs may consider the depreciated value of such filters or use such other appropriate valuation methods as agreed by the City and authorized representatives of the Metro JPA. Costs under this section shall be reimbursed or credited by City’s Water Utility to the Metro System.
6.4 North City Water Reclamation Plant Improvement Costs Included as Metro System Costs. Notwithstanding the above exclusions, the City and the Participating Agencies have specifically agreed that the following Capital Improvement Costs and Operation and Maintenance Costs related to North City Water Reclamation Plant improvements shall be included as Metro System Costs for purposes of calculating the annual FAB rate (and therefore not qualify as City Water Utility PW Costs):
6.4.1 Costs for chemically enhanced primary treatment for up to 52 MGD capacity.
6.4.2 Costs for primary effluent equalization for up to 52 MGD capacity.
6.4.3 Costs for increased volume of aeration tanks that will provide up to, but not exceeding, 52 MGD capacity.
6.4.4 Costs to add secondary clarifier tanks sufficient for up to 52 MGD capacity.
6.4.5 Costs for wastewater conveyance facilities to provide wastewater for replacement of Centrate flows that cannot be treated at the North City Water Reclamation Plant due to the production of Repurified Water.
6.4.6 Costs for treatment and conveyance of all MBC Return (micro-filtration and tertiary backwash) based on Flow, COD, and TSS.
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6.5 Reallocation of PWP Costs incurred since FY 2014.
6.5.1 The allocation of Pure Water Program costs, retroactive to June 30, 2014, will be calculated the year the Agreement goes into effect, will be completed no less than two fiscal years following the production of 30 MGD by Phase 1 of the Pure Water Program.
6.5.1.1 All the O&M task orders, or costs that cannot be directly assigned to a PWP Phase 1 capital improvement project such as program management, environmental documents, etc., will be reallocated by the final water/wastewater cost split, and will include interest accruing since June 2014 at the interest rate earned by the City of San Diego for each applicable fiscal year as shown by the sample interest calculation included in Exhibit G, Sample of Interest Calculation. This postpones the reconciliation of costs until the substantial completion of all construction projects for Phase 1 (City Water Utility PW Costs and Metro). This reconciliation will be performed during the audit of the fiscal year in which substantial completion of all projects occurs.
6.5.1.2 All Phase 1 PWP CIP projects were bid and awarded by October 2022 which is FY2023. All shared Phase 1 CIP projects will be reallocated to the actual construction cost split once the project is awarded, and the cost loaded CPM is completed and negotiated between the City and the Participating Agencies during the FY2023 audit. All CIP soft costs incurred since 2014 will be reallocated like the O&M task orders during the audit of the year of substantial completion of the actual Phase 1 CIP projects. If interest is owed to the Metro System for soft costs starting in FY 2014, such interest shall be considered Metro System Revenues consistent with Section 5.5.5.
6.6 Revenue Sharing for Repurified Water.
6.6.1 Background. Initially, the Parties anticipate that the cost per acre foot associated with the production of Repurified Water will be more expensive than the cost per acre foot of untreated imported water. However, it is anticipated that Repurified Water produced under Phase 1 will be less expensive than untreated imported water sometime in the future. Once Repurified Water produced under Phase 1 becomes less expensive than the cost of untreated imported water, the Parties agree that there will be revenue from the Pure Water Program.
6.6.2 Calculation. Revenue sharing shall occur in each fiscal year during which the annual cost per acre foot associated with the production of Repurified Water is less than the cost of untreated water per acre foot from the San Diego County Water Authority (“CWA”). The annual cost difference shall be known as “Repurified Water Revenue.” Repurified Water Revenue shall be determined as follows:
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Annual cost per acre foot of CWA untreated water purchased by the City for delivery at Miramar Reservoir (which shall be determined based on the total costs for water actually billed to the City by CWA for water delivered at Miramar Reservoir in a fiscal year, divided by the number of acre-feet of CWA water delivered at Miramar Reservoir that year)
less
Annual cost per acre-foot of City Water Utility PW Costs (which shall be determined based on total annual City Water Utility PW Costs divided by the number of acre-feet of Repurified Water actually produced in that year) the result of which is multiplied by
The number of acre feet of Repurified Water produced by Pure Water Program facilities during the applicable fiscal year.
Exhibit H, Summary of Billings from County Water Authority Showing Costs for Untreated Water, is a summary of the most recent CWA rate structure and cost allocations to the City of San Diego for untreated water. The Parties agree that Exhibit H shall be referred to by the Parties in the future in determining how costs for water delivered at Miramar Reservoir are calculated. If no untreated water is delivered at Miramar Reservoir in a given year, then the closest point of delivery of untreated water to the City shall be used. The City shall annually update Exhibit H to reflect the most recent CWA rate structure and cost allocations to the City of San Diego.
The City shall estimate whether there will be Repurified Water Revenue in the upcoming fiscal year prior to January 15 of each year, and these amounts shall be incorporated into the budget estimates for the upcoming fiscal year to all Parties.
6.6.3 Revenue Sharing. Repurified Water Revenue shall initially be shared between the City’s Water Utility and the Metro System based on the relative actual Capital Improvement Costs for the Pure Water Program contributed by City’s Water Utility and the Metro System. Such Capital Improvement Cost contributions are currently estimated as 62% City’s Water Utility and 38% Metro System. The Metro System’s portion of the Repurified Water Revenue shall be applied to debt attributable to the Metro System first, until the debt attributable to the Metro System is fully paid.
Following full payment of debt attributable to the Metro System, Repurified Water Revenue shall be shared based on the relative actual Operation and Maintenance Costs for Pure Water Program facilities contributed by City’s Water Utility and the Metro System, calculated annually. Such Operation and Maintenance Costs are currently estimated as 76% City’s Water Utility and 24% Metro System on an annual basis.
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In all instances referred to in this Section 6.6.3, the Metro System portion of the Repurified Water Revenue shall be allocated among the City and the Participating Agencies consistent with Section 4.4.2.
6.6.4 Year-End Adjustment. At the end of each fiscal year during which there is Repurified Water Revenue, the City shall determine the actual cost per acre foot of CWA untreated water purchased by the City, the actual cost per acre foot of City Water Utility PW Costs, and the actual amount of Repurified Water produced at Pure Water Program facilities.
Based on the actual cost and production information, the City will recalculate the Repurified Water Revenue for the prior fiscal year. The City will credit any future charges or bill for any additional amounts due the quarter after the prior year costs have been audited.
6.6.5 Change in Potable Reuse Method. The Parties acknowledge that the Pure Water Program Phase 1 will initially use indirect potable reuse surface water augmentation. The use of CWA untreated water costs in calculating Repurified Water Revenue is intended to provide an appropriate point of comparison to costs for producing Repurified Water that will be introduced into surface water. The Parties agree that if the City desires to implement direct potable reuse (in which Repurified Water would be introduced directly into a water supply pipeline or facility), the Parties shall meet and negotiate in good faith regarding an amendment to this Section 6.6, to appropriately update the formula for Repurified Water Revenue, which form of amendment shall occur via an Administrative Agreement and shall be subject to the Joint Administrative Approval Process set forth in Section 15.
6.7 Capital Expense Rate.
6.7.1 Background. The Point Loma Wastewater Treatment Plant operates under a National Pollutant Discharge Elimination System (“NPDES”) permit modified under section 301(h) & (j)(5) of the Clean Water Act. If such modified permit were ever revoked or not renewed, the Parties agree that, under current law, the City would have an obligation to upgrade the PLWTP to secondary treatment. The Parties further agree that $1.8 billion is a fair and comprehensive estimation of the costs that could be incurred by the Metro System to meet the legal requirements related to the Metro System under current law. The estimate of $1.8 billion is based on the net present value of the capital cost to develop 180 MGD of secondary treatment at PLWTP as of November 15, 2018.
Therefore, the Parties agree that $1.8 billion represents the maximum amount of Capital Improvement Costs that the Metro System should be obligated to contribute to the Pure Water Program, the purpose of which is not solely the disposal of wastewater, but also the production of Repurified Water. The Parties agree that this $1.8 billion maximum contribution should apply whether or not the PLWTP is actually upgraded to secondary treatment to meet legal requirements in the future because, as of the date of the Agreement, the Parties have the option of upgrading the PLWTP to full secondary treatment for the cost of approximately $1.8 billion.
In light of the above, the Parties have agreed that if Metro System costs related to the Pure Water Program exceed the $1.8 billion, City’s Water Utility will pay a charge for each acre foot Attachment 4
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of secondary treated effluent produced by Metro System facilities and used for the production of Repurified Water.
6.7.2 Capital Expense Rate. Under the circumstances described in this Section 6.7, City’s Water Utility shall pay a charge (“Capital Expense Rate”) for each acre-foot of secondary treated effluent produced by Metro System facilities and used for the production of Repurified Water. The Capital Expense Rate costs or revenues attributable to the Metro System shall be assessed or credited consistent with Section 4.4.2. City’s Water Utility shall pay the Capital Expense Rate if the following costs alone, or in combination, exceed $1.8 billion (which amount shall be adjusted for inflation):
6.7.2.1 The sum of all Capital Improvement Costs and associated debt attributable to the Metro System components of the Pure Water Program under this Section 6.7.2; and/or
6.7.2.2 The sum of all Capital Improvement Costs and associated debt for the full or partial upgrading of the PLWTP to secondary treatment.
Notwithstanding the above, the Capital Expense Rate shall not apply if the PLWTP is actually upgraded to secondary treatment (or beyond) due to: (a) a change in federal or state statutory law making it necessary to upgrade the PLWTP to comply with such new discharge standard; or (b) a final decision by a state or federal court or a federal administrative agency of competent jurisdiction that an NPDES permit modified under section 301(h) & G)(5) of the Clean Water Act is thereby revoked or denied renewal due to a finding that the discharge from the PLWTP violates anti-degradation rules or regulations promulgated under section 403 of the Clean Water Act.
6.7.3 Calculation of Capital Expense Rate. The amount per acre-foot of the Capital Expense Rate shall be determined as follows:
The sum of all Capital Improvement Costs and associated debt attributable to (i) the Metro System components of the Pure Water Program under this Section 6 and (ii) upgrading of the PLWTP to secondary treatment (if any) less
$1.8 billion, as adjusted for inflation each July 1 (starting on July 1, 2019) to reflect the annual percentage change in the Engineering News Records – Los Angeles construction cost index
the result of which is multiplied by
1.42 (which estimates the total interest on a 30-year State Revolving Fund loan with an interest rate of 2.5%)
the result of which is divided by
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The total number of acre feet per year of secondary treated effluent that is expected to be produced by Metro System facilities for the production of Repurified Water over a period of thirty (30) years.
The City shall estimate whether the Capital Expense Rate shall apply to the upcoming fiscal year (and its amount) prior to January 15 of each year, and the estimated amount of the Capital Expense Rate shall be effective on July 1 of the upcoming fiscal year.
For purposes of this Section 6.7.3, Capital Improvement Costs and associated debt shall include such costs and revenue incurred by the Metro System prior to the effective date of the Agreement.
6.7.4 Year-End Adjustment. At the end of each fiscal year during which the Capital Expense Rate applies, the City shall determine the actual Capital Improvement Costs and associated debt attributable to the Metro System components of the Pure Water Program under this Section 6 and any upgrading of the PLWTP to secondary treatment, and the actual amount of secondary treated effluent produced by Metro System facilities and used for the production of Repurified Water.
Based on the actual cost, interest, and effluent information, the City will recalculate the Capital Expense Rate for the prior fiscal year. The City will credit any future charges or bill for any additional amounts due the quarter after the prior year costs have been audited.
6.7.5 Duration; Expiration. The Capital Expense Rate shall continue until the cost difference between (a) the actual sum of Pure Water Program Capital Improvement Costs and associated debt attributable to the Metro System under Section 6.7 and/or the costs to upgrade the PLWTP and (b) $1.8 billion (as adjusted for inflation), has been fully paid, or the Agreement expires, whichever is sooner. Notwithstanding, it is the express intent and desire of the City and the Participating Agencies that if the Agreement expires before the cost difference has been paid through the Capital Expense Rate, that the Capital Expense Rate continue in any extension of this Agreement negotiated by the Parties pursuant to Section 14.2 until the cost difference has been fully paid.
6.8 Amending Pure Water Program Cost Allocation and Revenues – Phase 1. Except as otherwise provided in Section 6.6.2, the Parties may amend any provision in this Section 6 regarding the Finance, Budgeting, and Accounting for the Pure Water Program Cost Allocation and Revenues for Phase 1 in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15.
7. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 2
7.1 Pure Water Program – Phase 2. The Second Phase of the Pure Water Program (“Phase 2”) shall create up to an additional 53 MGD of Repurified Water at Phase 2 facilities. The Parties agree to incorporate all terms relating to Phase 2 into this Agreement through an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15, subject to the requirements set forth in this Section 7 below.
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7.2 Costs Excluded As Metro System Costs.
Costs Excluded from Metro System Costs for Phase 2 shall be identified in an Administrative Agreement subject to the Joint Administrative Approval Process and approvals set forth in Section 15. However, the Administrative Agreement must reflect that all of the following PWP Phase 2 costs, including Capital Improvement Costs, Operation and Maintenance Costs, and other related costs (including administration, insurance, claims, and overhead) shall be excluded from Metro System Costs for the purposes of calculating the annual Phase 2 FAB rate, and shall be City Water Utility PW Costs:
7.2.1 Costs of the Phase 2 Water Repurification System and any Metro System facilities to the extent constructed, modified, expanded, or used for the purpose of treating water beyond secondary treatment (ocean discharge standard under current law). This shall include costs for preliminary treatment, primary treatment, and secondary treatment to the extent such costs are higher than they would otherwise be due to the production of Phase 2 Repurified Water.
7.2.2 Costs for fail-safe disposal, if necessary, for design capacity for Phase 2 Repurified Water, including, but not limited to, any costs associated with the reservation of capacity at the Point Loma Wastewater Treatment Plant.
7.2.3 Costs for the demolition or replacement of existing Metro System facilities with similar facilities for the purpose of making space available for Phase 2 Water Repurification System facilities. Such costs may take into account the current asset value or market value of the existing Metro System facility.
7.2.4 Costs for the Phase 2 methanol feed system.
7.2.5 Costs for Phase 2 RSDP disposal including, but not limited to, pump stations, pipelines, retreatment, ocean outfall, and monitoring.
7.2.6 50% of the costs for the MBR Tanks and system for Phase 2.
7.2.7 All membrane integrity monitoring systems for Phase 2.
7.2.8 All Phase 2 systems downstream of MBR’s.
7.3 Revenue Sharing for Repurified Water – Phase 2. Terms regarding revenue sharing for Repurified Water for Phase 2 shall be identified in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. However, this Administrative Agreement must reflect terms related to Phase 2 revenue sharing for Repurified Water that conceptually mimic those terms set forth in Section 6.6. The Metro System portion of the Repurified Water Revenue for Phase 2 shall be allocated among the City and the Participating Agencies consistent with Section 4.4.2, as may be amended or updated to account for changes in PWP Phase 2.
7.4 Capital Expense Rate – Phase 2. Terms regarding the Capital Expense Rate for Phase 2 shall be identified in an Administrative Agreement subject to the Joint Administrative Approval Process and approvals set forth in Section 15. However, this Administrative Agreement Attachment 4
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must reflect terms that conceptually mimic the terms in Section 6.7, reflecting a continuation of the Capital Expense Rate through Phase 2 up until the PWP achieves up to 83 MGD of Repurified Water, taking into account production of water suitable for potable reuse occurring at all treatment processes for wastewater upstream from and at the PLWTP. The Pure Water Program Capital Expense Rate costs or revenues attributable to the Metro System shall be assessed or credited consistently with Section 4.4.2, as may be amended or updated to account for changes in PWP Phase 2.
8. FUTURE NEGOTIATIONS AND COOPERATION
This Agreement specifically contemplates Phase 1 and Phase 2 of the Pure Water Program, which consists of new, expanded, or modified Metro System and Water Repurification System facilities projected to produce up to 83 million gallons per day of Repurified Water. The Parties intend to meet and negotiate in good faith regarding the referenced Administrative Agreements identified in this Agreement. All items outside the scope of the Joint Administrative Approval Process shall be negotiated by the Parties through the amendment processes described in Section 16.3, if necessary.
9. THE METRO COMMISSION
9.1 Establishment and Membership. The 1998 Agreement created and established (and the ARA reestablished) the Metro Commission as a commission consisting of one representative from each Participating Agency. On October 25, 2000, the Participating Agencies entered into a Joint Exercise of Power Agreement which created a separate public entity, the Metro Wastewater Joint Powers Authority (“Metro JPA”), for the purpose, among others, of taking responsibility, actions, and making decisions pertaining to the 1998 Agreement on behalf of the Participating Agencies. The Metro Commission and the Metro JPA are and shall hereinafter be treated as one and the same entity for all intents and purposes under this Agreement, including for the purpose of accepting and executing the responsibilities delegated to the Metro JPA in this Agreement. Each Participating Agency shall have the right to appoint a representative of its choice to the Metro Commission/Metro JPA, and the Participating Agency’s appointee to the Metro Commission shall also serve as that Participating Agency’s representative on the Metro JPA Board of Directors. If a Participating Agency is a dependent district whose governing body is that of another independent public agency, that Participating Agency shall be represented on the Metro Commission/Metro JPA by a representative appointed by the governing body which shall have no more than one representative no matter how many Participating Agencies it governs. Each member has one vote in any matter considered by the Metro Commission/Metro JPA. The Metro Commission/Metro JPA shall establish its own meeting schedule and rules of conduct. The City may participate in the Metro Commission on an ex officio, non-voting basis. To the extent this Agreement expands or amends the powers or purposes set forth in the Metro JPA Joint Exercise of Powers Agreement, the Participating Agencies expressly agree to such expansion or amendment consistent with the terms of this Agreement.
9.2 Advisory Responsibilities of Metro JPA.
9.2.1 The Metro JPA shall act as an advisory body to the Mayor and City Council on policy issues and matters affecting and relating to the Metro System and shall be included in Attachment 4
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the City’s list of boards and commissions on the City’s website. The City shall present the position of the majority of the Metro JPA to the City’s governing body in written staff reports. The Metro JPA may prepare and submit materials in advance and may appear at any City hearings on Metro System matters and present its position to the governing body of the City.
9.2.2 The Metro JPA may advise the City of its position on any issue relevant to the Metro System.
9.3 Delegation of Decision-Making Authority of the Metro JPA. The Participating Agencies hereby delegate to the Metro JPA the authority to take certain actions pursuant to the approval processes provided in this Agreement, as permitted by law, including but not limited to Government Code 6506. The Participating Agencies agree that the Metro JPA has delegated authority to approve Administrative Agreements on behalf of each Participating Agency pursuant to the process set forth in Section 15. The Participating Agencies agree and acknowledge that the Metro JPA has authority to bind each Participating Agency to Administrative Agreements through the Joint Administrative Approval Process. All Participating Agencies agree to promptly execute Administrative Agreements after approval by the Metro JPA. By signing this Agreement, each Participating Agency is expressly preapproving such actions.
9.4 Standing. If a dispute arises among the Parties relating to or arising from a Party’s obligation under this Agreement or an associated Administrative Agreement, the Metro JPA shall have standing to enforce the terms of this Agreement against the City on behalf of two or more Participating Agencies if a majority of the Metro JPA votes to take action relating to this Agreement on behalf of two or more Participating Agencies.
10. DISPUTE RESOLUTION
This Section governs all disputes arising out of this Agreement and any associated Administrative Agreements.
10.1 Mandatory Non-Binding Mediation. If a dispute arises among the Parties relating to or arising from a Party’s obligations under this Agreement or an associated Administrative Agreement that cannot be resolved through informal discussions and meetings, the Parties involved in the dispute shall first endeavor to settle the dispute in an amicable manner, using mandatory non-binding mediation under the rules of JAMS, AAA, or any other neutral organization agreed upon by the Parties before having recourse in a court of law. Mediation shall be commenced by sending a Notice of Demand for Mediation to the other Party or Parties to the dispute. A copy of the notice shall be sent to the City, all other Participating Agencies, and the Metro JPA.
10.2 Selection of Mediator. A single mediator that is acceptable to the Parties involved in the dispute shall be used to mediate. The mediator will be knowledgeable in the subject matter of this Agreement, if possible, and chosen from lists furnished by JAMS, AAA, or any other agreed upon mediator.
10.3 Mediation Expenses. The expenses of witnesses for either side shall be paid by the Party producing such witnesses. All mediation costs, including required travel and other expenses Attachment 4
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of the mediator, and the cost of any expert advice produced at the direct request of the mediator, shall be Metro System costs.
10.4 Conduct of Mediation. Mediation hearings will be conducted in an informal manner.
Discovery shall not be allowed. The discussions, statements, writings and admissions and any offers to compromise during the proceedings will be confidential to the proceedings (pursuant to California Evidence Code sections 1115 - 1128 and 1152) and will not be used for any other purpose unless otherwise agreed by the Parties in writing. The Parties may agree to exchange any information they deem necessary. The Parties involved in the dispute shall have representatives attend the mediation who are authorized to settle the dispute, though a recommendation of settlement may be subject to the approval of each agency’s boards or legislative bodies. Either Party may have attorneys, witnesses or experts present.
10.5 Mediation Results. Any resultant agreements from mediation shall be documented in writing. The results of the mediation shall not be final or binding unless otherwise agreed to in writing by the Parties. Mediators shall not be subject to any subpoena or liability and their actions shall not be subject to discovery.
10.6 Performance Required During Dispute. Nothing in this Section shall relieve the City and the Participating Agencies from performing their obligations under this Agreement. The City and the Participating Agencies shall be required to comply with this Agreement, including the performance of all disputed activity and disputed payments, pending the resolution of any dispute under this Agreement.
11. INSURANCE
11.1 City Shall Maintain All Required Insurance.
11.1.1 Throughout the term of this Agreement the City shall procure and maintain in effect liability insurance covering Metro System assets and operations in the same manner, and to the same extent, as the City insures similar assets and operations of the City. Such insurance may be provided through separate policies for the Metro System, or by consolidating the Metro System with other City assets and operations for insurance purposes. If the Metro System is insured separately, policy limits, deductibles, and self-insured retentions shall be equivalent to what the City procures for other similar City assets and operations. The City shall maintain all insurance required by law, including workers’ compensation insurance, and may self-insure for certain losses when allowed by law. The proportionate cost of insurance for the Metro System shall be included in the computation of the FAB.
11.1.2 If the Metro System is insured separately, any policy or policies of liability insurance carried by the City for the Metro System shall name the Participating Agencies as additional insureds with evidence of same supplied to each upon request.
11.1.3 Upon request by the Metro JPA or a Participating Agency, the City shall promptly provide written coverage and policy information, including, but not limited to, the scope of coverage, policy limits, deductibles, and self-insured retentions, including information on any claims made against the policies and remaining limits and deductibles.
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11.2 Substantially Equivalent Coverage. In the event of a transfer of the Metro System to a nonpublic entity pursuant to Section 2.1, coverage substantially equivalent to all the above provisions shall be maintained by any successor in interest.
12. INTERRUPTION OF SERVICE
Should the Metro System services to the Participating Agencies be interrupted as a result of a major disaster, by operation of federal or state law, or other causes beyond the City’s control, the Participating Agencies shall continue all payments required under this Agreement during the period of interruption.
13. NOTICES REQUIRED UNDER AGREEMENT
The City and each Participating Agency shall give notice when required by this Agreement.
All notices required by this Agreement must be in writing and must be sent via email and either served personally or mailed via first class U.S. mail. The notices shall be sent to the officer listed for each Party, at the address and email address listed for each Party in Exhibit D, Notice Listing, in accordance with this Section. If a Party wishes to change the officer and/or address to which notices are given, the Party shall notify all other Parties in accordance with this Section. Upon such notice, the City shall amend Exhibit D to reflect the changes. The amendment shall be made within sixty (60) days after receipt of the Party’s notice regarding the change in officer and/or address.
The City shall keep an updated version of Exhibit D, notated with the most recent amendment date, on file with the City Public Utilities Department. The City shall provide a copy of the amended Exhibit D to all Parties by no later than sixty (60) days after amending Exhibit D.
14. EFFECTIVE DATE AND EXPIRATION
14.1 Effective Date. This Agreement shall be effective on July 1 of the fiscal year commencing after execution by the City and all of the Participating Agencies and shall be dated as of the signature date of the last executing Party. For example, irrespective of whether the last executing Party signs this Agreement on September 1, 2025, January 1, 2026, or June 30, 2026, the effective date of the Agreement would be July 1, 2026.
14.2 Expiration. Subject to the rights and obligations set forth in Section 14.3, unless amended, replaced, or terminated earlier by mutual consent of all the Parties, this Agreement shall expire on June 30, 2065. This Agreement is subject to extension by agreement of the Parties. The Parties shall commence discussions on an agreement to provide wastewater treatment services beyond the year 2065 on or before December 31, 2055, or at such time, if any, that the PLWTP is required to be upgraded to secondary treatment. The Parties may create, amend or terminate any associated Administrative Agreements addressing implementation of this Agreement, as provided in this Agreement.
14.3 Contract Capacity Rights Survive Expiration. The Participating Agencies’ Contract Capacity rights and rights to obtain wastewater treatment services from the facilities referred to in, or constructed pursuant to this Agreement shall survive the expiration of the Agreement. Provided, however, for any Participating Agency to exercise such rights, the Participating Agency shall comply with all the following requirements: (a) provide at least six months’ written notice prior to the expiration of this Agreement; (b) upon expiration of this Agreement, pay their proportional Attachment 4
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share of Metro System Costs according to the billing methodologies set forth in this Agreement in order to maintain their right(s) to such wastewater treatment services; and (c) agree to recalculate and pay proportional share of future Metro System Costs based on the City’s and all remaining Participating Agencies’ proportionate shares. In the event this Agreement expires and one or more Participating Agency(ies) continue to pay their proportional share of all Metro System Costs, the City shall have the right to continue managing, operating, and expanding the Metro System subject to the same terms set forth in this Agreement, unless otherwise agreed to in writing by and between the City and a Participating Agency. In the event one or more Participating Agency(ies) exercise its/their right(s) to maintain Contract Capacity and wastewater treatment services, such Participating Agency(ies) shall also maintain the right to continue receiving any and all revenues contemplated by this Agreement, including, but not limited to, Metro System Revenues.
14.4 Abandonment. After June 30, 2065, the City may abandon operation of the Metro System upon delivery of notice to the Participating Agencies ten (10) years in advance of said abandonment. Upon notice by the City to abandon the Metro System, the Parties shall meet and confer over the nature and conditions of such abandonment. In the event the Parties cannot reach agreement, the matter shall be submitted to mediation under Section 10. In the event of abandonment, the City shall retain ownership of all Metro System assets free of any claim of the Participating Agencies. Abandonment by the City with continued operation by a different entity shall not terminate or affect a Contract Capacity rights of a Participating Agency so long as that Participating Agency has continued to pay their proportional share of Capital Improvement Costs and Operation and Maintenance Costs according to the billing methodologies set forth in this Agreement. Nothing in this language shall be construed to require the City to continue as operator of the Metro System after the ten-year (10) notice period has run.
15. ADMINISTRATIVE AGREEMENTS
15.1 Use and Process for Administrative Agreements.
15.1.1 Purpose. Administrative Agreements are intended to implement the intent of the Parties in an efficient and effective manner without reopening or renegotiating the terms of this Agreement. Administrative Agreements are limited to addressing issues that are authorized by this Agreement. Administrative Agreements are separate and distinct from Exhibits to this Agreement, and are designed to address procedural, operational, technical, and administrative issues. Terms in this Agreement may only be modified through the Joint Administrative Approval Process if this Agreement expressly authorizes the use of an Administrative Agreement.
15.1.2 Amendments, Supplements, or Successors to Administrative Agreements.
Where this Agreement refers to an Administrative Agreement, such reference shall include any amendment(s) to that Administrative Agreement or supplemental or successor Administrative Agreement(s).
15.1.3 Function. Administrative Agreements are made among all the Parties but deal with a specific function or group of like functions, for the benefit of regional wastewater treatment within the Metro System, or for the implementation of this Agreement.
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15.1.4 Current Agreements. The Administrative Agreements which are approved and executed simultaneously with the execution of this Agreement are listed Exhibit I, List of Administrative Agreements. The City shall update Exhibit I each time an Administrative Agreement is approved, amended, revised or terminated pursuant to this Agreement.
15.1.5 Development and Joint Administrative Approval Process. Any Party can present an Administrative Agreement, or an amendment or supplement thereto, or termination thereof, to the City for approval by way of the Joint Administrative Approval Process set forth in this Section. The City will endeavor in good faith to respond within 60 days of submission of a proposed Administrative Agreement. If the City needs additional time to evaluate the proposed Administrative Agreement, it will advise all Participating Agencies in writing of the anticipated review time. Once an Administrative Agreement receives City’s Administrative Approval, then, with respect to the Participating Agencies, the proposed Administrative Agreement may be presented to the Metro JPA at a duly noticed meeting for review and a first reading. Sixty (60) days or more after the first reading, after the Metro JPA Directors have had opportunity to consult with their respective agency staff and governing boards, the Administrative Agreement may be presented at a duly noticed meeting for a second reading and approved upon an affirmative vote by no less than two-thirds of the members of the Metro JPA during a duly noticed public meeting (in other words, upon the affirmative vote of at least eight or more of the twelve members of the Metro JPA, irrespective of how many Metro JPA Directors are present at the meeting, unless the number of Participating Agencies changes). If the second reading does not occur within One Hundred and Twenty (120) days after the first reading, the proposed Administrative Agreement shall no longer be taken into consideration, unless the City and the Metro JPA Directors agree to a different timeline. An Administrative Agreement, amendment thereto, or termination thereof, must receive City’s Administrative Approval and at least a two-third affirmative vote by the Metro JPA Directors before it can become effective. Administrative Agreements are binding contracts as against the City and all Participating Agencies, irrespective of whether or not any Participating Agency’s particular Metro JPA Director voted to approve the agreement or not, or was absent or abstained. The Metro JPA has the authority to bind the Participating Agencies to Administrative Agreements pursuant to the delegated authority provided to the Metro JPA in Section 9.3 herein.
16. GENERAL
16.1 Exhibits.
16.1.1 Exhibit List. This Agreement references Exhibits A through J. Each exhibit is attached to this Agreement and is incorporated herein by reference. All exhibits to this agreement shall be listed in Exhibit J, Exhibit List. The City shall update the Exhibit List from time to time each time an Exhibit is amended or revised pursuant to this Agreement.
16.2 Electronic Exhibits and Attachments. Acknowledgement and Acceptance: The Parties hereby acknowledge and agree that the exhibit(s) and attachment(s) related to this Agreement, or any of its associated Administrative Agreements, indicated as an Electronic Exhibits above (collectively, the “Electronic Exhibits”) may be in an electronic format that cannot be readily or accurately converted into a physical or printed form. The Parties expressly agree that such Electronic Exhibits shall nonetheless be deemed to be valid and enforceable attachments to this Agreement and shall be incorporated by reference as if fully set forth herein.
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16.2.1 Identification and Access: All Electronic Exhibits shall bear the same Exhibit identifier and name (i.e., Exhibit A – Metro Facilities) set forth in the Exhibit List, and shall be clearly identified as an Electronic Exhibit in the Exhibit List, including a file name, a time stamp of file, and a note indicating the software used to open and view the file, including version.
The Electronic Exhibit shall be loaded on to a CD-ROM, DVD-ROM, or other electronic storage medium that is a write-once medium without the ability to further edit. Each Party shall receive an identical copy of the Electronic Exhibit(s) via identical storage mediums. The City shall ensure that all Participating Agencies have full and unrestricted access to Electronic Exhibits for the duration of the Agreement and any applicable retention period thereafter, including by providing access to any necessary software, applications, or systems required to view, interact with, or manipulate the Electronic Exhibits in their native format; such as through website access via the GIS Online platform: https://sandiego.maps.arcgis.com. No interaction or manipulation of any Electronic Exhibit shall in any way constitute a bona fide change or amendment to the Electronic Exhibit.
16.2.2 Storage and Security: Each Party shall be responsible for securely storing and maintaining the integrity of the Electronic Exhibits in their possession or control. This includes, but is not limited to, implementing and maintaining reasonable and appropriate technical, administrative, and physical safeguards to protect the confidentiality, availability, and integrity of the Electronic Exhibits, and to prevent unauthorized access, disclosure, alteration, or destruction thereof.
16.2.3 Authentication and Admissibility: The Parties hereby stipulate and agree that the Electronic Exhibits shall be deemed to be original documents and authentic for all purposes under applicable law, and that the Parties may rely upon and introduce such Electronic Exhibits as evidence in any proceeding arising out of or relating to this Agreement, without the need for further foundation, authentication, or certification.
16.2.4 Receipt and Completeness: Each Party hereby acknowledges and confirms that they have received, reviewed, and had a reasonable opportunity to inspect all Electronic Exhibits that are attached to and incorporated into this Agreement as of the Effective Date. By executing this Agreement, each Party represents and warrants that, to the best of their knowledge, the Electronic Exhibits are complete, accurate, and free from material errors, omissions, or defects.
The Parties further agree to notify the other Party promptly upon discovering any discrepancies or inaccuracies in the Electronic Exhibits, and to cooperate in good faith to resolve any such issues in a timely manner.
16.2.5 Amendments and Modifications to Electronic Exhibits: Any amendments or modifications to the Electronic Exhibits shall be made in accordance with the procedures set forth in this Agreement for amending or modifying the terms and conditions hereof, and any such amended or modified Electronic Exhibits shall be deemed to replace and supersede any prior version thereof. Amended Electronic Exhibits shall also be loaded onto a new and separate CDROM, DVD-ROM, or other electronic storage medium that is a write-once medium without the ability to further edit. Each Party shall receive identical copies of the Electronic Exhibits via identical storage mediums. Amended Electronic Exhibits shall bear identical Exhibit Identifiers as their predecessor exhibits, but with a different suffix (for example, Exhibit A, when amended, shall be identified as Exhibit A-1, a subsequent amendment shall be identified as Exhibit A-2, etc.).
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16.3 Amendments to Agreement. There shall be four (4) ways to amend, modify, and/or change the terms set forth in this Agreement:
16.3.1 Amendments. Except as set forth in Sections 16.3.2, 16.3.3, and 16.3.4, amendments to this Agreement require the approval of all Parties. Such amendments must be in writing and signed by a duly authorized representative from each Party. Unless specifically referenced as being subject to one of the approval mechanisms set forth in Sections 16.3.2, 16.3.3, or 16.3.4 below, any amendment, modification, and/or changes to the terms of this Agreement must occur pursuant to this Section 16.3.1. This provision controls over all other provisions in this Agreement.
16.3.2 Joint Administrative Approval Process. As set forth in this Agreement, the Joint Administrative Approval Process requires the approval described in Section 15.1.5. The following actions may be taken subject to the Joint Administrative Approval Process:
(a) Agreements for New Contract Capacity as specifically set forth in Section 3.3
(b) Addition of new Metro Facilities or conversion of City facility to a Metro facility as specifically set forth in Section 4.2 (c) Changes to Exhibit E (Methodology for Contract Capacity Transfers)
(d) Revisions to FAB as specifically set forth in Section 5.2.1.3, except as provided therein
(e) Changes to Finance, Budgeting, and Accounting System of Charges as specifically set forth in Section 5.11
(f) Changes to Costs Excluded from Metro System Costs – Phase 1 as specifically set forth in Section 6.3
(g) Amending the formula for Repurified Water Revenue as specifically set forth in Section 6.6.2
(h) Changes to Finance, Budgeting, and Accounting for the Pure Water Program Cost Allocation and Revenues for Phase 1 as specifically set forth in Section 6.8
(i) Certain terms relating to Phase 2 as specifically set forth in Section 7.1
(j) Changes to Costs Excluded from Metro System Costs – Phase 2 as specifically set forth in Section 7.2
(k) Terms regarding revenue sharing for Repurified Water for Phase 2 as specifically set forth in Section 7.3
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(l) Terms regarding the Capital Expense Rate for Phase 2 as specifically set forth in Section 7.4
(m) Creation, changes, amendments, modifications to, or terminations of any Administrative Agreements as specifically set forth in Article 15.
16.3.3 Two-Party Approval. As set forth in this Agreement, Two-Party Approval requires the City’s Administrative Approval and a two-thirds (2/3) vote or greater of the Metro JPA Directors present at a duly noticed Metro JPA public meeting. The following actions may be taken subject to Two-Party Approval:
(a) Determinations regarding liability as specifically set forth in Section 2.5.5
(b) Contract Capacity Transfers – Decreases as specifically set forth in Section 4.4.3.2
(c) Changes to Strength measurements as specifically set forth in Section 4.5.2
16.3.4 City Administrative Approval. As set forth in this Agreement, the City’s Administrative Approval requires discussion, evaluation, and approval by the Director of the City of San Diego’s Public Utilities Department or their designee. The City may, in the City’s sole discretion, refer a decision subject to the City’s Administrative Approval to the City Council for a recommendation, approval, or other action. No action is required on the part of a Participating Agency. The following actions may be taken subject to the City’s Administrative Approval:
(a) Transfers of Contract Capacity as specifically set forth in Section 3.2
(b) Reductions in Metro System Capacity as specifically set forth in Section 3.4
(c) Amending Exhibit B as specifically set forth in Section 3.6 (d) Amending Exhibit A as specifically set forth in Section 4.2 (e) Contract Capacity Transfers – Increases as specifically set forth in Section 4.4.3.1
(f) Changes to Exhibit F (Metro System Flow Formulas and Sampling Locations) as specifically set forth in Section 4.5.1
(g) Changes to FAB to include measurements required by law as specifically set forth in Section 5.2.1.3
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(h) Changes to Exhibit H if CWA changes their rate structure as specifically set forth in Section 6.6.2
(i) Changes to Exhibit D (Notice) as specifically set forth in Section 13.
16.4 Construction of Agreement.
16.4.1 Drafting of Agreement. It is acknowledged that the City and the Participating Agencies, with the assistance of competent counsel, have participated in the drafting of this Agreement and that no ambiguity should be construed for or against the City or any Participating Agency on account of such drafting.
16.4.2 Entire Agreement. The City and each Participating Agency represent, warrant and agree that no promise or agreement not expressed herein has been made to them, that this Agreement contains the entire agreement between the Parties, that this Agreement supersedes any and all prior agreements or understandings between the Parties unless otherwise provided herein, and that the terms of this Agreement are contractual and not a mere recital; that in executing this Agreement, no Party is relying on any statement or representation made by the other Party, or the other Party’s representatives concerning the subject matter, basis or effect of this Agreement other than as set forth herein; and that each Party is relying solely on its own judgement and knowledge.
16.4.3 Agreement Binding on All; No Third-Party Beneficiaries. This Agreement shall be binding upon and shall inure to the benefit of each of the Parties, and each of their respective successors, assigns, trustees or receivers. All the covenants contained in this Agreement are for the express benefit of each and all such Parties. This Agreement is not intended to benefit any third parties, and any such third-party beneficiaries are expressly disclaimed.
16.4.4 Severability.
16.4.4.1 Should any provision of this Agreement or any associated Administrative Agreement be held invalid or illegal, such invalidity or illegality shall not invalidate the whole of the Agreement, but, rather, the Agreement shall be construed as if it did not contain the invalid or illegal part, and the rights and obligations of the Parties shall be construed and enforced accordingly except to the extent that enforcement of the Agreement without the invalidated provision would materially and adversely frustrate either the City’s or a Participating Agency’s essential objectives set forth in this Agreement or the applicable Administrative Agreement.
16.4.4.2 Should a court determine that one or more components of the allocation of costs set forth in this Agreement or any associated Administrative Agreement places the City or a Participating Agency in violation of Article XIII D, Section 6 of the California Constitution with respect to their ratepayers, such components shall no longer be of force or effect.
In such an event, the City and the Participating Agencies shall promptly meet to renegotiate the violative component of the cost allocation to comply with Article XIII D, Section 6 of the California Constitution, and use the dispute resolution process in Section 10 of this Agreement if an agreement cannot be reached through direct negotiation.
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16.4.4.3 Should a state or federal agency provide a final, written determination that the method of allocating Pure Water Program Capital Improvement Costs under this Agreement violates the requirements of state or federal grants or loans which are, or will be, used to fund the wastewater components of the Pure Water Program, such allocation method will no longer be of any force or effect. In such an event, the allocation of Repurified Water Revenue and the Capital Expense Rate will continue to be based on the Parties’ actual payments to fund the Pure Water Program Capital Improvement Costs attributable to the Metro System. The City and the Participating Agencies shall also promptly meet to negotiate an alternative cost allocation method that would comply with such grant or loan funding requirements.
16.4.5 Choice of Law. This Agreement and any of its associated Administrative Agreements shall be construed and enforced pursuant to the laws of the State of California.
16.4.6 Recognition of San Diego Sanitation District as Successor to Certain Parties.
The Parties hereby acknowledge and agree that the San Diego County Sanitation District is a Participating Agency under this Agreement as the successor in interest to the Alpine Sanitation District, East Otay Mesa Sewer Maintenance District, Lakeside Sanitation District, Spring Valley Sanitation District, and Winter Gardens Sewer Maintenance District.
16.5 Declarations Re: Agreement.
16.5.1 Understanding of Intent and Effect of Agreement. The Parties expressly declare and represent that they have read the Agreement and that they have consulted with their respective counsel regarding the meaning of the terms and conditions contained herein. The Parties further expressly declare and represent that they fully understand the content and effect of this Agreement and they approve and accept the terms and conditions contained herein, and that this Agreement is executed freely and voluntarily.
16.5.2 Warranty Regarding Obligation and Authority to Enter Into This Agreement. Each Party represents and warrants that its respective obligations herein are legal and binding obligations of such Party, that each Party is fully authorized to enter into this Agreement, and that the person signing this Agreement hereinafter for each Party has been duly authorized to sign this Agreement on behalf of said Party.
16.6 Right to Make Other Agreements. Nothing in this Agreement limits or restricts the right of the City or the Participating Agencies to make separate agreements among themselves, including through joint powers agreements, without the need to amend this Agreement, provided that such agreements are consistent with this Agreement. Nothing in this Agreement or Section 6 limits or restricts the right of the City or the Participating Agencies to enter into separate agreements regarding the industrial pretreatment program, or for the purchase or sale of Repurified Water produced by the Water Repurification System, or sharing in City Water Utility PW Costs; however, such agreements shall not affect the cost allocation and Metro System revenues delineated in Section 5.
16.7 Statute of Limitations to Resolve Billing Issues. Notwithstanding any longer statute of limitations in State law, if the City or a Participating Agency wishes to dispute a bill (including, but not limited to, an audited bill or an audit reconciliation) on the basis of an alleged overpayment Attachment 4
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or underpayment arising under this Agreement, the Party alleging the dispute must provide written notice regarding the disputed bill to all Parties to this Agreement promptly upon discovery of such a billing issue. The written notice shall invoke or reference this Section. The Parties agree that such refunds or collections shall not accrue for more than three (3) years from the date that such billing is received by the Participating Agency, or one (1) year from the date that an audited reconciliation is received by the Participating Agency, whichever date is later. The City and the Participating Agencies hereby waive any applicable statute of limitations available under State law that exceed the time frames set forth in this Section 16.7. Upon receipt of the written notice regarding the billing dispute, any Participating Agency wishing to participate in the resolution of the dispute shall be allowed to do so and to present evidence to all Parties in support of their position. The involved Parties’ determination regarding the outcome of the billing dispute, including any related adjustments to each Participating Agency’s share of net Metro System costs or revenues resulting from the resolution of such billing issues, shall be final. Nothing in this section relieves a Participating Agency from its obligations to make timely payments under this Agreement irrespective of whether or not a bill is being disputed. If the Parties are unable to resolve a billing dispute, the Parties shall utilize the dispute resolution processes in this Agreement.
16.8 Counterparts and Electronic Signatures. This Agreement may be executed in counterparts. This Agreement shall become operative as soon as one counterpart hereof has been executed by each Party. The counterparts so executed shall constitute one Agreement notwithstanding that the signatures of all Parties do not appear on the same page. A faxed, .pdf, or other electronic copy of the fully executed original version of this Agreement shall have the same legal effect as an executed original for all purposes. Electronic signatures (including but not limited to signatures via DocuSign) shall be acceptable, enforceable, and shall have the same legal effect as an original signature.
16.9 Transparency. Upon request, the City shall promptly provide each Participating Agency with access to all records and information reflecting Flow and Strength of sewage in the Metro System, including, but not limited to, Flow data from all Metro System meters, worksheets or calculations that are used by City to develop cost information for any costs contemplated by this Agreement, and any Strength or other data utilized by the City when calculating annual sewage Flow and/or other costs imposed pursuant to this Agreement (including, but not limited to, pretreatment costs). The Parties shall work in good faith together to ensure the Participating Agencies have reasonable and full transparency under this Agreement.
16.10 Incorporation of Recitals. All of the recitals set forth in this Agreement, and all of the exhibits attached to this Agreement, are by this reference incorporated in and made a part of this Agreement as though fully set forth herein.
16.11 Joint Exercise of Power. It is the intent of the Parties that this Agreement is intended to exercise the governmental authority granted pursuant to Gov. Code Section 6500 et seq. which provides for the joint exercise of governmental powers.
Attachment 4
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IN WITNESS WHEREOF, the Parties have executed this Second Amendment and Restated Regional Wastewater Disposal Agreement and the associated Administrative Agreements(s) identified herein as of the date first set forth above.
CITY OF CHULA VISTA
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF CORONADO
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF DEL MAR
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF EL CAJON
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF IMPERIAL BEACH
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF LA MESA
Name:
Title:
Approved as to Form:
Name:
Title:
Attachment 4
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4907-3419-6844
LEMON GROVE SANITATION DISTRICT
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF NATIONAL CITY
Name:
Title:
Approved as to Form:
Name:
Title:
OTAY WATER DISTRICT
Name:
Title:
Approved as to Form:
Name:
Title:
PADRE DAM MUNICIPAL WATER
DISTRICT
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF POWAY
Name:
Title:
Approved as to Form:
Name:
Title:
CITY OF SAN DIEGO
Name:
Title:
Approved as to Form:
Name:
Title:
SAN DIEGO COUNTY SANITATION
DISTRICT
Name:
Title:
Approved as to Form:
Name:
Title:
Attachment 4
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EXHIBIT I
LIST OF ADMINISTRATIVE AGREEMENTS
NO. TITLE EFFECTIVE
DATE
AMENDMEN
T DATE
1. Agreement Between City of San Diego and
Participating Agencies in the Metropolitan Sewerage
System for Unified Management of Industrial Waste
Discharge Pretreatment and Enhanced Source
Control Programs
2. Attachment 4
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EXHIBIT J
EXHIBIT LIST
Exhibit Name Amended Date
A
Metro Facilities (Electronic Exhibit); file name: 2025-10_Exhibit A Metro Facilities.aprx; time stamp of file: 10/23/2025 3:38 PM, software used to open and view file including version: ArcGIS Pro 3.5.0; included herewith as CD-ROM/DVD-ROM
B Distribution of Wastewater System Capacity Rights
C
Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies
D Notice Listing
E Methodology for Contract Capacity Transfers
F Metro System Flow Formulas and Sampling Locations
G Sample of Interest Calculation
H
Summary of Billings from County Water Authority Showing Costs for Untreated Water
I List of Administrative Agreements
J Exhibit List
Attachment 4
SARA EXHIBITS A-H
Accompanying SARA 10/23/25
Attachment 5
Exhibit A: Listing of Metro Facilities as of 10/23/2025 Metro Facilities (Electronic Exhibit);
file name: 2025-10_Exhibit A Metro Facilities.aprx
time stamp of file: 10/23/2025 3:38 PM
software used to open and view file including version:
ArcGIS Pro 3.5.
Attachment 5
1 The South Bay Land/Ocean Outfall is jointly owned by the International Boundary and Water Commission, U.S. Section (60.06%) and the City of San Diego (39.94%). The capacity of the City's portion of the outfall as of the date of this Agreement is 74 MGD average dry weather flow, of which the Metro System has a capacity right to 69.2 MGD and the City as an exclusive right to 4.8 MGD 2 Gravity pipeline connection between NCWRP and the North Metro Interceptor 3 Included separately from rest of treatment plant to acknowledge role in sludge treatment process.
EXHIBIT A
METRO FACILITIES AS OF 10/23/2025
TREATMENT FACILITIES
Point Loma Facilities (PLWWTP)
• Advanced Primary Treatment Plant
• Ocean Outfall
• Access Road
• Power Generation Facility
North City
• Water Reclamation Plant (NCWRP)
South Bay
• Water Reclamation Plant (SBWRP)
• South Bay Land/Ocean Outfall1
SLUDGE TREATMENT CONVEYANCE FACILITIES
• Metro Biosolids Center (MBC)
• Point Loma Digesters3
• Digested Sludge Pipeline: Point Loma to MBC
• Raw sludge pipeline: NCWRP to MBC
• Centrate Pipeline: MBC to NCWRP
• Raw sludge pipeline: SBWRP to South Metro Interceptor
CONVEYANCE
• Pump Station 1
• Pump Station 1 Force Main
• Pump Station 2
Attachment 5
1 The South Bay Land/Ocean Outfall is jointly owned by the International Boundary and Water Commission, U.S. Section (60.06%) and the City of San Diego (39.94%). The capacity of the City's portion of the outfall as of the date of this Agreement is 74 MGD average dry weather flow, of which the Metro System has a capacity right to 69.2 MGD and the City as an exclusive right to 4.8 MGD 2 Gravity pipeline connection between NCWRP and the North Metro Interceptor 3 Included separately from rest of treatment plant to acknowledge role in sludge treatment process. • Pump Station 2 Force Mains
• Pump Station 2 Backup Power Generation Facility
• South Metro Interceptor
• North Metro Interceptor
• Grove Avenue Pump Station
• Grove Avenue Pump Station Force Main
• Rose Canyon Parallel Trunk Sewer 2
• Second Rose Canyon Trunk Sewer 2
• East Mission Bay Trunk Sewer 2
• Morena Blvd. Interceptor 2
• Metro System Meters (including 88 billing meters and 14 operational meters) • North City Tunnel Connector
• West Point Loma Interceptor
OTHER FACILITIES
• Environmental Monitoring and Technical Services Laboratory (95% Metro Ownership)
• Metro Operation Center aka MOC (17% Metro Ownership)
• Dairy Mart Road & Bridge
FUTURE METRO FACILITIES
Phase 1 Pure Water (Under Construction – Percent ownership will be assigned after audit) • Expand NCWRP
• Morena Pump Station
• Morena Pump Station Force Main
• Centrate/RSDP Line (From NCWRP to North Metro Interceptor) • East Mission Gorge / East County residuals line (Water, Muni, and Metro combined assets)
Attachment 5
1 The South Bay Land/Ocean Outfall is jointly owned by the International Boundary and Water Commission, U.S. Section (60.06%) and the City of San Diego (39.94%). The capacity of the City's portion of the outfall as of the date of this Agreement is 74 MGD average dry weather flow, of which the Metro System has a capacity right to 69.2 MGD and the City as an exclusive right to 4.8 MGD 2 Gravity pipeline connection between NCWRP and the North Metro Interceptor 3 Included separately from rest of treatment plant to acknowledge role in sludge treatment process.
Phase 2 Pure Water Planned
• Phase 2 Pure Water (TBD)
• Phase 2 Pure Water Centrate Line (TBD)
Reserved Rights- Other Future Facilities
The facilities listed in this category will potentially be required as part of the Metro System for hydraulic capacity, good engineering practices and/or compliance with applicable law, rules or regulations, including compliance with OPRA, and continuation and maintaining the City’s Waiver of applicable treatment standards at the Point Loma Wastewater Treatment Plant (“Waiver”).
• South Bay Secondary Treatment Plant (21-28 MGD)
• South Bay Secondary Sewers & Pump Station (Sweetwater River) • South Bay Sludge Processing Facility
• Wet Weather Storage Facilities
Attachment 5
Attachment 5
Exhibit B
Distribution of Wastewater System Capacity Rights
Attachment 5
1 2 3 4 5 6 7
Average Flow2,
MGD
Incremental
Peak Flow3,
MGD
RSPD4, MGD
Total Allowable
Flow3,
MGD
TSS2,
1,000 lbs.
COD2,
1,000 lbs. Pure Water Phase 15
18.33 19.52 0 37.85 22,082 38,419 11.699%
1.90 3.03 0 4.93 2,089 3,336 1.152%
0.00 0.30 0 0.30 0 0 0.020%
1.79 3.48 0 5.27 1,915 3,336 1.096%
1.29 19.93 0.602 21.82 2,196 3,052 0.497%
2.47 4.48 0 6.95 2,045 3,844 1.411%
5.29 23.90 0 29.19 4,668 9,636 2.823%
0.07 1.67 0.310 2.05 238 293 0.153%
2.40 4.51 0 6.91 2,289 4,387 1.395%
4.65 3.07 0 7.72 4,562 9,161 2.852%
0.38 0.57 0 0.95 984 835 0.457%
0.44 6.54 0.364 7.34 632 890 0.444%
3.10 8.80 0 11.90 3,113 5,073 1.869%
5.74 5.05 0 10.79 6,039 10,597 3.765%
0.02 1.08 0.080 1.18 65 80 0.044%
47.9 105.9 1.356 155.1 52,916 92,938 29.677%
124.05 136.16 0 260.21 130,032 252,818 70.323%
0 0 14.3 0.00 0 0 0
124.1 136.2 14.3 260.2 130,032 252,818 70.323%
- 82 - 82 - - -
171.9 324.1 15.7 497.4 182,948 345,756 100%
2. Based on monthly average flow and strength.
3. Based on hourly average flow.
ANNUAL FIXED CAPACITY RIGHTS1
DISTRIBUTION OF WASTEWATER SYSTEM CAPACITY RIGHTS
Lakeside/Alpine
AGENCY
Chula Vista
Coronado
Del Mar
East Otay Mesa
El Cajon
Imperial Beach
La Mesa
SUBTOTAL
Lemon Grove
National City
Otay
Padre Dam
Poway
Spring Valley
Wintergardens
SUBTOTAL
5. Pure Water Phase 1 Capital Melded Percentages as established in Exhibit G of the "Amended and Restated Regional Wastewater Disposal Agreement Between the City of San Diego and the Participating Agencies in the Metropolitan Sewerage System" memorialized here only for use in billing Pure Water Phase 1 capital expenses. The following fractions were used to calculate the Melded Percentage (Based on 5 year average and not subject to change except by agreement of the parties.)
FLOW SS COD
0.482 0.257 0.243
4. Reject Stream from Demineralization Process
1. Currently based on 2050 projected flows and strengths.
EXHIBIT B
Metro I&I
San Diego
Wastewater
Water
TOTAL
7/18/2025
Attachment 5
Exhibit C
Administrative Protocol on Allocation of Operating
Reserves and Debt Service Coverage to Participating
Agencies
Attachment 5
Attachment 5
Attachment 5
Attachment 5
Attachment 5
Attachment 5
Exhibit D
Notice Listing
Attachment 5
4914-3650-2326
EXHIBIT D
NOTICE LISTING
Maria Kachadoorian
City Manager
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91919
Phone: (619) 691 5031
mkachadoorian@chulavista
ca.gov
Tina Friend
City Manager
City of Coronado
1825 Strand Way
Coronado, CA 92113
Phone: (619) 522-7335
[email protected]
Ashley Jones
City Manager
City of Del Mar
1050 Camino Del Mar
Del Mar, CA 92014
Phone: 755-9313 ext. 25
[email protected]
Graham Mitchell
City Manager
City of El Cajon
200 Civic Center Way
El Cajon CA 92020
Phone: (619) 441-1716
[email protected]
Tyler Foltz
Greg Humora
City Manager
City of La Mesa
8130 Allison Avenue
La Mesa, CA 91942
Phone: (619) 667-1101
[email protected]
Lydia Romero
City Manager
City of Lemon Grove
3232 Main Street
Lemon Grove, CA 91945
Phone: (619) 464-6934
[email protected]
Scott Huth
Acting City Manager
City of National City
1243 National City Blvd.
National City, CA 91950
Phone: (619) 336-4240
[email protected]
Chris Hazeltine
City Manager
City of Poway
13325 Civic Center Drive
Poway, CA 92064
Phone: (858) 679-4200
[email protected]
Mayor Todd Gloria
Chief Operating Officer
City of San Diego
202 "C" Street
San Diego, CA 92101
Phone: (619) 236-5949
[email protected]
Ebony Shelton
Chief Administrative Officer County
of San Diego
1600 Pacific Highway, Rm. 209
San Diego, CA 92101
Phone: (619) 531-5250
[email protected]
Jose Martinez
General Manager
Otay Water District
2554 Sweetwater Springs Blvd.
Spring Valley, CA 91977
Phone: (619) 670-2210
[email protected]
Kyle Swanson
CEO/General Manager
Padre Dam Municipal Water
District
9300 Fanita Pkwy
Santee, CA 92071
Phone: (619) 258-4673
[email protected]
City Manager
City of Imperial Beach
825 Imperial Beach Blvd.
Imperial Beach, CA 91932
Phone: (619) 423-8300 ext. 7
[email protected]
Attachment 5