CITY COUNCIL SPECIAL MEETING CALL AND NOTICE
Wednesday, May 1, 2024, 5:30 p.m.
A JOINT MEETING OF
City of Laguna Beach, Emerald Bay Service District, El Toro Water District, Moulton Niguel Water District, and South Coast Water District Moulton Niguel Water District, Board Room
26161 Gordon Road, Laguna Niguel, CA 92653
TO THE MEMBERS OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH:
PLEASE TAKE NOTICE that the Mayor of the City of Laguna Beach has called a special meeting of the City Council to take place at 5:30 p.m. on May 1, 2024, for the purpose of discussing and taking action on the items listed on the below agenda. In accordance with Government Code section 54954(b)(3), this is a meeting of multiagency significance, which shall occur in the Board Room at Moulton Niguel Water District (26161 Gordon Road, Laguna Niguel, CA 92653).
SPECIAL MEETING AGENDA
1. CALL MEETING TO ORDER -
Board Presidents/Mayor confirm timely notice of the public meeting, quorum and attendees for each District Board of Directors/City Council:
City of Laguna Beach Call to Order and Roll Call
Emerald Bay Service District Call to Order and Roll Call El Toro Water District Call to Order and Roll Call
Moulton Niguel Water District Call to Order and Roll Call South Coast Water District Call to Order and Roll Call
2. PLEDGE OF ALLEGIANCE
3. PUBLIC PARTICIPATION
The City Council and Boards shall consider Public Comments, of up to three minutes each as determined by the Board President, from the audience concerning items not appearing on the agenda. In accordance with the provisions of the Brown Act (Government Code Section 54950 et seq.), no action or discussion may take place by the Council on any item not on the posted agenda. Anyone wishing to address the Council and Board on specific agenda items or matters of general interest should do so at this time. A “Request to Speak” form may be available at the door and can be submitted to the secretary for the meeting in order to call speakers for the efficient administration of public comment.
BOARD OF DIRECTORS MEETING MAY 1, 2024
4. NEW BUSINESS
A. Proposal to Transition the Regional Treatment Plant (RTP) to Moulton Niguel Water District (MNWD) and Facilitate MNWD’s Withdrawal from the South Orange County Wastewater Authority (SOCWA)
Recommended Action: Discussion amongst all Boards and Council and consideration of recommendation to SOCWA Board.
No other business shall be considered at the Special Meeting.
ADA ACCOMMODATIONS
Pursuant to the Americans with Disabilities Act, persons with a disability who require a disabilityrelated modification or accommodation in order to participate in this special meeting, including auxiliary aids or services, may request such modification or accommodation from the City Clerk at (949) 497-0705 (telephone) or (949) 497-0771 (facsimile). Notification by 2 p.m. on the business day prior to the special meeting will enable the City to make reasonable arrangements to assure accessibility to the meeting.
COMPLIANCE WITH GOVERNMENT CODE SECTION 54957.5
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packets are available for public inspection in the City Clerk's Office at 505 Forest Avenue, Laguna Beach, California, during normal business hours.
SOUTH ORANGE COUNTY WASTEWATER AUTHORITY (SOCWA)
PROPOSAL TO TRANSITION THE REGIONAL TREATMENT PLANT (RTP) TO MOULTON NIGUEL WATER DISTRICT (MNWD) & FACILITATE MNWD’S WITHDRAWAL FROM SOCWA Note: This proposal is contingent upon (1) the concurrence of the members of (a) PC-17: Regional Treatment Plant, (b) PC-2: J.B. Latham Treatment Plant, (c) PC-5: San Juan Creek Outfall, (d) PC-15:
Coastal Treatment Plant, (e) PC-21: Effluent Transmission Main and (f) PC-24: Aliso Creek Outfall, and (2) the required unanimous vote of the SOCWA members to authorize MNWD’s withdrawal from SOCWA.
1. Transi�on of full ownership and opera�on of the RTP to MNWD and dissolu�on of SOCWA PC-17
1.1 All physical and real property assets, opera�ons, and all liability for the RTP would be transferred to MNWD on June 30, 2024, or as soon therea�er, when (a) the agreements reflec�ng the terms and condi�ons described herein are executed among the affected par�es, and (b) the SOCWA members have unanimously voted to (i) waive the 120-day no�ce requirement and (ii) approve MNWD’s withdrawal from SOCWA.
1.2 SOCWA PC-17 would be concurrently dissolved with the transfer of RTP to MNWD.
1.3 MNWD would absorb SOCWA’s current RTP opera�ons staff and provide comparable posi�ons and compensa�on. MNWD and SOCWA members acknowledge that (a) certain RTP staff are periodically used to support func�ons at other SOCWA facili�es and (b) SOCWA has opera�ons staff assigned to support mul�ple facili�es, including the RTP. SOCWA and MNWD willcommit to working in good faith to equitably resolve the disposi�on and sharing of costs for these overlapping staff posi�ons so current levels of service are maintained for SOCWA facili�es.
1.4 Lab Opera�ons at the RTP would con�nue to be operated and managed by SOCWA. MNWD and SOCWA will work in good faith to develop an opera�ng agreement that will allow SOCWA staff to con�nue to perform all necessary lab opera�ons for SOCWA facility opera�ons and regional permit compliance.
1.5 All CalPERS obliga�ons, including Unfunded Accrued Liability (UAL), and Other Post Employment Benefits (OPEB) for the RTP opera�ons staff and opera�ons staff posi�ons described above would be transferred to MNWD.
1.6 MNWD would make transi�onal payments to SOCWA for general Administra�ve Overhead costs that are propor�onally atributable to the RTP. Administra�ve Overhead costs include insurance, u�li�es, supplies, administra�ve building maintenance, legal fees, outside professional services, execu�ve and professional
services staff, administra�ve and office support staff, and related costs allocated in SOCWA’s budget for the general administra�ve func�ons of SOCWA. Such payments would con�nue for a period of five (5) years and decrease by 20% per year through the five-year transi�on. A�er those five years , MNWD would have no further obliga�on for Administra�ve Overhead costs. Payments would be due each year on the anniversary date of MNWD’s withdrawal from SOCWA.
2. Solids Treatment and Handling Services at RTP for PC-17 Members
2.1 MNWD would agree to provide solids treatment and handling services (“Solids Agreement”) at the RTP to the former PC-17 members on a contractual basis under the following terms and condi�ons:
2.1.1 Opera�ng costs would be allocated to the former PC-17 members using a methodology consistent with the methodology described in the PC-17 agreement.
2.1.2 Administra�ve Overhead costs charged by MNWD would be fixed at 6.5% in accordance with MNWD’s June 6, 2023, opera�ng proposal.
2.1.3 Rehabilita�on & Replacement (R&R) costs, defined as costs for capital improvements required to maintain the solids handling facili�es in working order and to extend the useful life thereof, would be propor�onately charged to the former PC-17 members based upon their percentage of capacity ownership in the solids handling facili�es under PC-17.
2.1.4 Major Capital Improvement Program (CIP) costs, defined as costs for new construc�on projects benefi�ng the former PC-17 members, which are undertaken for (a) system beterment, (b) capacity enhancement, and (c) major technology changes, would be assessed (i) by MNWD in an annual amor�zed CIP assessment (ii) to the former PC-17 members (iii) based upon their percentage of capacity ownership in the solids handling facili�es under PC-17. The annual assessment would be (1) based upon 30-year amor�zed capital costs of any given Major CIP project at the BVAL Municipal AA bond published rate, adjusted annually, and (2) assessed for as long as the Solids Agreement is in effect. Former PC-17 members would not be assessed for Major CIP costs associated with capacity enhancement projects that are exclusively for MNWD’s benefit.
2.1.5 The term of the Solids Agreement would be for 10 years. Former PC-17 members may terminate the Solids Agreement before 10 years under no further obliga�on with one (1) year writen no�ce.
2.1.6 The Solids Agreement will be amended to extend beyond a 10 year term upon the request of the former PC-17 members.
2.2 Upon transfer of the RTP to MNWD, termina�on of PC-17, and the execu�on of the Solids Agreement, the RTP would be under the full control and governance of MNWD.
3. MNWD withdrawal from SOCWA upon transfer of Regional Treatment Plant
3.1 MNWD would withdraw from SOCWA on June 30, 2024, or as soon therea�er, when (a) the agreements reflec�ng the terms and condi�ons described herein are executed among the affected par�es, and (b) the SOCWA members have unanimously voted to (i) waive the 120-day no�ce requirement and (ii) approve MNWD’s withdrawal from SOCWA.
3.2 Prior to the transfer of the RTP and MNWD’s withdrawal from SOCWA:
3.2.1 MNWD would vote to extend the term of the PC-2 agreement to February 2030;
3.2.2 MNWD will transfer its capacity ownership in J.B. Latham to SCWD; and
3.2.3 MNWD’s ou�all ownership capacity rights will be propor�onately distributed to the respec�ve, remaining ou�all agencies.
4. MNWD On-going Contractual Services from SOCWA
4.1 MNWD would enter into separate agreements with SOCWA for (a) needed wastewater treatment at the J.B Latham facility, (b) effluent conveyance through the Effluent Transmission Main, and (c) ou�all services through the San Juan Creek Ou�all and the Aliso Creek Ou�all (“Treatment, Conveyance, and Ou�all Agreements”) under the following terms and condi�ons:
4.1.1 Opera�ng and Administra�ve Overhead costs would be charged to MNWD in a manner consistent with the current cost alloca�on described in the PC-2, PC-5, PC-8, PC-10, PC-2SO, PC-21, and PC-24 agreements.
4.1.2 Replacement and Refurbishment (R&R) costs, defined as costs for capital improvements required to maintain the treatment, conveyance, and ou�all facili�es in working order and to extend useful life thereof, would be charged to MNWD based upon its current capacity ownership in the facili�es included in PC-2, PC-5, PC-10, PC-21, and PC-24.
4.1.3 Major Capital Improvement Program (CIP) costs, defined as costs for new construc�on projects undertaken for (a) system beterment, (b) capacity enhancement benefi�ng MNWD, and (c) major technology changes, would be (i) assessed by SOCWA in an annual amor�zed CIP assessment (ii) to MNWD (iii) based upon its exis�ng percentage of capacity ownership in the
PC-2, PC-5, PC-10, PC-21, and PC-24 facili�es. The annual assessment would be (1) based upon 30-year amor�zed capital costs of any given Major CIP project at the BVAL Municipal AA bond published rate, adjusted annually, and (2) assessed for as long as the Treatment, Conveyance, and Ou�all Agreements were in effect. MNWD would not be assessed for Major CIP costs associated with capacity enhancement projects that are exclusively for the remaining PC-2, PC-5, PC-10, PC-21, and PC-24 members’ benefit.
4.1.4 The terms of the Treatment, Conveyance and Ou�all Agreements are proposed to be:
A. 10 years for wastewater treatment at the J.B. Latham facility.
B. 20 years for (i) conveyance through the Effluent Transmission Main, and (ii) ou�all services through the San Juan Creek Ou�all and Aliso Creek Ou�all.
4.1.5 MNWD may terminate the Treatment, Conveyance, and Ou�all Agreements with no further obliga�on with one (1) year writen no�ce and will be responsible for paying their above defined share of Major CIP costs for the remaining dura�on of their debt obliga�on
4.1.6 The wastewater services agreement for the J.B. Latham facility may be extended beyond 10 years, and the ou�all services and effluent transmission agreements may be extended beyond 20 years, by mutual agreement of MNWD and the PC-2, PC-5, PC-10, PC-21, and PC-24 members of SOCWA, respec�vely.
4.1.7 MNWD would have no governance authority under the Treatment, Conveyance, and Ou�all Agreements.
4.2 Should SOCWA or the PC-2, PC-5, PC-8, PC-10, PC-2SO, PC-21, PC-24 agreements be terminated during the term of the Treatment, Conveyance, and Ou�all Agreements with MNWD, the successor(s) to those PCs shall be obligated to provide service to MNWD under the same terms and condi�ons and for the same dura�on as the Treatment, Conveyance, and Ou�all Agreements proposed in this sec�on.
5. MNWD Buyout to exit SOCWA
5.1 Upon the transfer of the RTP to MNWD and its withdrawal from SOCWA, MNWD would make a buyout payment to SOCWA for applica�on towards future PC 15 capital improvements in the amount of $20,000,000.
6. Other MNWD Obliga�ons – Pretreatment Program, Recycling and Discharge Permits
6.1 During the term of the wastewater services agreement with SOCWA, MNWD shall be obligated to pay a propor�onate share of the costs for the Pretreatment Program and Discharge Permit atributable to the J.B Latham Plant and the San Juan Creek Ou�all, propor�onate share of costs atributable to water recycling permi�ng, and propor�onate share of the costs of the Discharge Permit atributable to the Aliso Creek Ou�all.