AGREEMENT FOR PURCHASE AND SALE OF RECLAIMED WATER
AND RELATED FACILITIES
This Agreement (“Agreement”) is made and entered into this day of Apt il -> 2004 by and between County Sanitation District No. 2 of Los Angeles County, hereinafter referred to as “District” and the City of Pomona, a municipal corporation, hereinafter referred to as “City.” WHEREAS, District is a county sanitation district formed and operating pursuant to the County Sanitation District Act, Chapter 3, Part 3, Division 5 of the Health and Safety Code, $ 4700 &.; WHEREAS, a number of County Sanitation Districts of Los Angeles County are patties to an Amended Joint Outfall Agreement, effective July 1, 1995, which provides, among other things, for the ownership and operation of inland water reclamation plants. These plants currently include the Long Beach Water Reclamation Plant, Los Coyotes Water Reclamation Plant, Whittier Narrows Water Reclamation Plant, Pomona Water Reclamation Plant, San Jose Creek Water Reclamation Plant and La Caiiada Water Reclamation Plant. These water reclamation plants, excluding the La Caiiada Water Reclamation Plant, shall he collectively referred to in this Agreement as the “Inland Reclamation Plants;”
WHEREAS, pursuant to said Amended Joint Outfall Agreement, District operates the Pomona Water Reclamation Plant, hereinafter referred to as “Water Reclamation Plant;” which has a design capacity of fifteen (15) million gallons per day, or sixteen thousand eight hundred and eight (16,808) acre-feet per year, and is expected to discharge approximately eleven and a half (1 1.5) million gallons per day, or twelve thousand nine hundred (12,900) acre-feet per year, of reclaimed water; WHEREAS, District is authorized to sell or otherwise put to beneficial use any reclaimed water recovered from the operation of the Water Reclamation Plant;
WHEREAS, reclaimed water currently discharged from the Water Reclamation Plant is suitable for a number of nonpotable uses including landscape and agricultural irrigation and industrial process water; WHEREAS, City and District, on July 27, 1966, entered into an agreement that provided for the sale to the City of reclaimed water discharged from the Water Reclamation Plant, as therein more fully set forth; WHEREAS, the agreement between District and City for the sale of reclaimed water was amended on February 27,1991, with the amended agreement expiring on February 27,2001; 1 03/25/04
Attachment 2
WHEREAS, City and District desire to continue to provide for the sale of reclaimed water from the Water Reclamation Plant on the terms of this Agreement for one or more suitable uses by the City, including landscape maintenance, agricultural irrigation, and industrial process; WHEREAS, under the prior agreement for the sale of reclaimed water from the Water Reclamation Plant, City has been paying the equivalent of approximately fifty percent (50%) of the unit cost of operation and maintenance of the Inland Reclamation Plants, and District and City, in accordance with the District’s reclaimed water pricing policy, wish to phase this percentage to thirty percent (30%) over the course of five (5) years; and
WHEREAS, the City and District desire to transfer to District the ownership of the reclaimed water gravity line that serves the District’s Spadra Landfill and the Walnut Valley Water District, hereinafter called “Walnut Valley,”
NOW, THEREFORE, it is hereby mutually agreed by and between the parties hereto as follows:
1. Facilities for Deliverv and Distribution of Reclaimed Water and Conveyance
1.1 District agrees to provide, at no cost to City, a point of connection on the site of the Water Reclamation Plant from which reclaimed water may he drawn. The Chief Engineer and General Manager of District (“Chief Engineer”) may from time to time change the location of the point of connection if appropriate to facilitate the operation of the Water Reclamation Plant upon giving City thirty (30) days advanced written notice, as provided under Paragraph 12 of this Agreement.
1.2 City agrees to construct or cause to be constructed at no cost to District, any additional facilities required to deliver and distribute the reclaimed water purchased by City, including pumps, pipelines, meters, controls, and other facilities. City further agrees to bear all operation and maintenance costs of all such delivery and distribution facilities.
1.3 The Chief Engineer may permit some of City’s delivery facilities to be located on the site of the Water Reclamation Plant as a matter of convenience to City. Notwithstanding the grant of prior approval and consent by the Chief Engineer, upon request by the Chief Engineer, City shall, within one hundred and eighty (180) days of receiving notice of such request under Paragraph 12 of this Agreement, relocate any such facilities 2 03/25/04
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either off the District-owned property or if the relocation is proposed to be on District-owned property, then in a manner and at a location acceptable to the Chief Engineer. City shall bear the cost of such relocation.
1.4 City hereby sells and conveys to District and District hereby accepts from City without need for further instrument of conveyance, all of City’s remaining interest in the existing non-reinforced concrete gravity reclaimed water pipeline that lies between the Water Reclamation Plant and Walnut Valley’s reclaimed water pump station located at the comer of Valley Boulevard and Grand Avenue in the City of Walnut for a purchase price of four hundred forty-one thousand seven hundred thirty dollars ($441,730). City grants to the District and its designated agents the right to maintain, repair, relocate or replace said gravity line within the boundaries of the City, without cost, and without causing unreasonable delay or denial of this work. City agrees to grant to District, without unreasonable delay or conditions, any easements through City property that may be required to perform such work on said gravity line.
2. Quantitv of Water to be Purchased by City
2.1 District agrees to make available to City on a daily basis during the term hereof, approximately two-thirds of the reclaimed water discharged from the Water Reclamation Plant, based on the hydraulic configuration of the Water Reclamation Plant existing on the date of execution of this Agreement, less any in-plant uses of the reclaimed water, such as reclaimed water that is extracted from the plant’s chlorine contact tanks. This amount is not to exceed ten (10) million gallons per day, or eleven thousand two hundred and six (1 1,206) acre-feet each fiscal year (July 1 through June 30). City may purchase only that portion of the reclaimed water made available to City at the Water Reclamation Plant that, in City’s sole discretion, City determines it can beneficially use. Additional quantities of reclaimed water above this amount may be made available to City at the sole discretion of Chief Engineer.
2.2 The remaining approximately one-third of the Water Reclamation Plant’s daily discharge of reclaimed water, and any quantity above that amount that is not purchased by the City, shall be reserved for use by District at its own facilities or for sale by District to other entities outside of the City’s water service area. Any reclaimed water reserved to the District that is not used or sold by District may be purchased by City on a day-to- day basis.
2.3 If, during the term of this Agreement, deliveries of reclaimed water to the City, as metered by City at its reclaimed water pump stations for three consecutive months, decrease to fifty percent (50%) or less of the total effluent discharged from the Water Reclamation Plant, District agrees to perform a hydraulic analysis to determine the cause of this reduction. Based on the results of this analysis, the District agrees to make its best 03/25/04 3
efforts to restore the agreed amounts of reclaimed water to City.
3. Limitations on Contractual Commitments
3.1 City understands and acknowledges that District is charged with the responsibility to operate its sewerage systems in a manner that the District determines to be most beneficial to its users. The rights of City to reclaimed water under this Agreement pertain only to the reclaimed water that actually is discharged from the Water Reclamation Plant. Nothing in this Agreement shall be construed to limit in my manner District’s right to operate the Water Reclamation Plant at such level as District determines, in its sole and absolute discretion, to he appropriate, or to discontinue the operation of the Water Reclamation Plant. Accordingly, any ability of City to receive reclaimed water pursuant to this Agreement shall be subordinate to and conditioned by the rights, responsibilities, and discretion of District to operate and manage its sewerage system in the best interests of the District, in compliance with all regulatory requirements, and in accordance with the terms of this Agreement.
3.2 The parties recognize the social benefit to be derived from maximizing the beneficial use of reclaimed water. District has in the past and intends in the future to enter into contracts for sale of reclaimed water from the Water Reclamation Plant to City and other parties in quantities that will not cumulatively exceed the plant’s production. However, circumstances beyond the control of District may result in a temporary or permanent decrease in reclaimed water available to City. In the event of such decreases, the Chief Engineer shall allocate the supply of reclaimed water in the following manner. The Chief Engineer shall first insure that the District receives an adequate supply to meet its own needs at the Water Reclamation Plant and at Spadra Landfill and any other District owned or operated facilities. The Chief Engineer shall then allocate the remaining amount of reduced reclaimed water discharge among the City and the other third-party users of reclaimed water in proportion to their actual use during the previous fiscal year. The reduced availability as determined by the Chief Engineer will continue in effect until such time as the Water Reclamation Plant has been restored to previous capacity.
3.3 Any extension of the City’s reclaimed water distribution system must first be approved by both the State Department of Health Services, hereinafter referred to as “Department,” and the California Regional Water Quality Control Board - Los Angeles Region, hereinafter referred to as “Board.” City and District agree to create and submit an appropriate Engineering Report to the Board for such approval, prior to start-up of any reclaimed water sys tem ex tension.
4. Oualitv of Water to be Purchased bv Citv, Waivers and Indemnification 4 03/25/04
4.1 District agrees to supply reclaimed water from the Water Reclamation Plant that conforms to the Water Reclamation Requirements (“WRRs”) established from time to time by the Board, or such other regulatory agency as may have authority thereover, so long as such requirements do not require additional treatment processes or more stringent discharge requirements than is necessary to meet the Waste Discharge Requirements (“WDRs”) established by the Board for discharge to the lined portion of the San Jose Creek (“more stringent WRRs”). If at any time the Board imposes more stringent WRRs, City may, at its discretion and at its expense, undertake steps to meet the WRRs and shall indicate to District in writing such intent within ninety (90) days of the adoption by the Board of the more stringent WRRs; provided, however, that Districts shall have no duty to modify any of its facilities, including the Water Reclamation Plant, unless the Chief Engineer agrees to such modification. If City is unwilling to meet the more stringent WRRs, either party may terminate this Agreement by giving written notice in accordance with Paragraph 12.1, which notice shall be effective either thirty (30) days thereafter or on the effective date of the WRRs, whichever shall first occur.
4.2 Both parties recognize that factors beyond the control of District could cause operational difficulties at the Water Reclamation Plant resulting in the production of reclaimed water that does not meet the current WRRs established by the Board or other regulatory agencies for City’s intended use. In such case, the Chief Engineer, in his sole and absolute discretion, may temporarily suspend City’s receipt of reclaimed water from the Water Reclamation Plant under this Agreement. District shall use its best efforts to re-establish the discharge of reclaimed water meeting the requirements of section 4.1 of this Agreement and shall re-establish City’s supply of such water accordingly. City recognizes that a standby water supply will be necessary to prevent any damages that might result from an interruption in the supply of reclaimed water from the Water Reclamation Plant, and hereby waives any right that City might have to recover from District any and all damages of any kind attributable to any such interruption. The City generally and specifically releases District from liability for any such damages.
4.3 City agrees to indemnify and hold harmless District, and each of the County Sanitation Districts of Los Angeles County party to the Amended Joint Outfall Agreement, as amended July 1, 1995, and each city in Los Angeles County whose wastewater is tributary to the Water Reclamation Plant, their officers, directors, agents and employees from and against any and all claims, suits, liability, loss, costs, demands, damages, causes of action (whether legal, equitable or administrative), fees of attorneys and other expenses, which arise out of or are otherwise attributable to the City’s use of reclaimed water from the District that meets the quality standards contained in the WRRs and/or WDRs, as described in Paragraph 4.1 hereof.
The foregoing obligations shall include, but not be limited to, causes of action based on strict liability for defective products, breach of warranty, strict liability for ultrahazardous activities and negligence. 5 03125104
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4.4 The District and City understand that the District, as the entity holding the WRRs for the Water Reclamation Plant, may be subject to monetary fines and/or penalties from the Board for the City’s violations of said WRRs. If the District is the responsible party for an action resulting in a fine and/or penalty, the District agrees to be financially liable for payment. If the District’s Chief Engineer fmds that the City is the party responsible for any action resulting in such a fine and/or penalty, the City agrees to reimburse the District for the total amount of any such fine and/or penalty. If the District’s Chief Engineer finds that a third-party who has purchased reclaimed water from the City is the responsible party for any action resulting in such a fine and/or penalty, the City agrees to join with the District in any legal or other effoit to recover all or a part of the fine and/or penalty levied against the District by the Board for such action. Under no circumstance shall either the District or the City be held financially responsible for the actions of the other party that may result in monetary fines and or penalties levied by the appropriate regulatory agencies.
4.5 District and City each agree to maintain, throughout the duration of the term of this Agreement, liability insurance that covers each party, with each policy designating the other party as an additional named insured. The covered amount of each policy shall be no less than ten million dollars ($10,000,000). Furthermore, each party shall maintain, throughout the duration of the term of this Agreement, automobile liability insurance combined single limit of one million dollars ($1,000,000). Each party shall immediately notify the other party in the event of material changes or cancellation of any coverage. Certificates of insurance and additional insured endorsements shall be furnished by both parties within thirty (30) days following the execution of this Agreement.
Refusal to submit such certificates shall constitute a material breach of this Agreement subject to any and all remedies at law or in equity, including termination of this Agreement. If proof of insurance required under this Agreement is not delivered as specified or if such insurance is cancelled and not adequately replaced by either party, the remaining party shall have the right but not the duty to obtain replacement insurance and to charge the other party for any premium due for such coverage. With respect to workers compensation, each party is permissibly self-insured in accordance with Section 3700 (b) of the Labor Code.
5. Price of Reclaimed Water
5.1 For the term of this Agreement, excepting those provisions contained in Paragraphs 5.3 and through 5.5 herein, the unit price to be paid by City for reclaimed water provided by District to City under the terms of this Agreement shall be the greater of (a) or (b) below, but not to exceed (c) below:
(a) thirty percent (30%) of the unit cost of operation and maintenance of the Inland Reclamation Plants during the fiscal year in which the reclaimed water was received (hereinafter referred to as “30% O&M’)), rounded to the nearest cent; or
6 03/25/04
(b) one-half of the result determined by subtracting City’s costs, as defined below, during the fiscal year divided by the total amount of reclaimed water delivered during the fiscal year, from the Water Rate, as defied below (hereinafter referred to as “shared savings”). (c) in no event shall the unit price of reclaimed water under Paragraphs 5.1 and 5.4 exceed one hundred percent (100%) of the combined unit cost of operation and maintenance of the Inland Reclamation Plants, as defined herein.
5.2 For the purposes of this Agreement, the alternative water supply for City shall be defined as the blend of the following sources of water:
(a) Metropolitan Water District of Southern California’s (“MWD”) treated water, as purchased from Three Valleys Municipal Water District, and
groundwater pumped from the Six Basins, Chino Basin and Spadra Basin, which costs include, but are not limited to, energy costs, lease costs and replacement water and other fees levied by the respective basin Watermaster or their successors, and surface water from San Antonio Canyon treated at the City’s Pedley Water Treatment Plant. (b)
(C)
The Water Rate shall be calculated by determining the flow-weighted costs of City’s water supply defined in Paragraphs 5.2(a), (b), and (c) above using the relative percentages and unit rates of each water supply used by City during the fiscal year in which the reclaimed water was delivered, with the result of this calculation multiplied by ninety percent (90%). City shall supply this calculated Water Rate to District within ninety (90) days of the end of each District fiscal year.
For the purposes of this Agreement, City costs shall be defined as all costs incurred by City, properly allowable under generally-accepted accounting standards, attributable to the City’s reclaimed water distribution system, including but not limited to: capital costs incurred subsequent to the date of this contract (excluding depreciation), right-of-way acquisition costs, reasonable administration and special program costs related to the use of reclaimed water, pump station, reservoir and pipeline replacement and maintenance costs, energy cost and all economic benefits realized through low interest loans, investment earnings on debt service funds, rebates, grants and other subsidies obtained by the City from external sources to defray the cost of providing reclaimed water and/or constructing reclamation facilities including, but not limited to, revenue received from the MWD Local Resources Program or its successors. A sample determination of the price of reclaimed water pursuant to Paragraphs 5.1 through 5.3 is included in this Agreement as Appendix “A,” 7 03/25/04
For the purposes of this Agreement, the unit cost of operation and maintenance shall be determined on the basis of District’s accounting records and shall be arrived at by dividing the total operation and maintenance costs of the Inland Reclamation Plants by the number of acre-feet of treated effluent therefrom.
5.3 For the first five (5) fiscal years of this Agreement, beginning July 1,2003, the unit price to be paid by City for reclaimed water provided by District to City under the terms of this Agreement shall be forty percent (40%) of the unit cost of operation and maintenance of the Inland Reclamation Plants (“40% O&M’)), as defined in Paragraphs 5.1 and 5.2, during the fiscal year in which the reclaimed water was received, rounded to the nearest cent.
5.4 For the subsequent seven (7) fiscal years of this Agreement, beginning July 1,2008, the unit price to be paid by City for reclaimed water provided by District to City under the terms of this Agreement shall be thirty percent (30%) of the unit cost of operation and maintenance of the Inland Reclamation Plants (“30% O&M), as defined in Paragraphs 5.1 and 5.2, during the fiscal year in which the reclaimed water was received, rounded to the nearest cent.
5.5 For the subsequent five (5) fiscal years of this Agreement, beginning July 1,2015, the unit price to be paid by City for the reclaimed water shall be determined using the provisions in Paragraph 5.1 herein. If, at any time during this five (5) year transition period, the unit price is subject to the “shared savings” provisions in Paragraph 5.l(b), then the unit price to be paid by the City shall be based on the “30% O&M unit price plus an incremental increase each fiscal year for the remaining years of this five (5) year transition period. The incremental increase shall be based on the difference between the “shared savings” unit price and the “30% O&M unit price, divided by the number of years remaining in the five (5) year transition period. This calculated incremental increase shall be added to the unit price for reclaimed water for the previous fiscal year in order to determine the unit price for the subject fiscal year, through year seventeen (17) of the contract. This incremental increase and the unit price for the reclaimed water subject to these provisions are determined by the following calculation, an example of which is attached as Appendix “B”:
(a) the unit price for the reclaimed water determined for that fiscal year using the “30% O&M’ provisions in Paragraph 5.l(a) shall be subtracted from the lesser of either (i) the unit price for that fiscal year using the “shared savings” provisions in Paragraph 5.l(b) or (ii) one hundred percent (100%) of the unit cost of operation and maintenance of the Inland Reclamation Plants, as defined above, during the fiscal year in which the reclaimed water was received, rounded to the nearest cent,
the resulting amount from Paragraph 5.4(a) shall be divided by the number of years remaining until the eighteenth year (FY 2021-22),
(b)
8 03/25/04
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(C) the resulting amount from Paragraph 5.4(b) shall be added to the reclaimed water rate in effect during the preceding fiscal year, and this shall be the reclaimed water rate for the current fiscal year,
(4 for each subsequent year through and including the seventeenth year (FY 2020-21), the incremental increase calculated in Paragraph 5.4(b) above, shall be added to the preceding fiscal year’s reclaimed water unit price.
(e) if at any time during this five (5) year transition period, the unit price of the reclaimed water reverts to being subject to the “30% O&M’ pricing provisions, then the unit price for that fiscal year shall be calculated based on the provisions in Paragraph S.l(a), and if, in any subsequent years, the pricing calculations for the remaining years in this five (5) year transition period shall once again be subject to the “shared savings” pricing provisions, the unit price shall be once again calculated based on the provisions in this Paragraph.5.6. City costs shall be determined based on the City’s books, accounts and records in accordance with generally-accepted accounting practices. District shall have the right to audit the relevant books, accounts and records of City during normal business hours upon at least forty-eight (48) hours prior notice to City. District’s operation and maintenance costs shall be determined based on the District’s books, accounts and records in accordance with generally-accepted accounting practices. City shall have the right to audit the relevant books, accounts, and records of District during normal business hours upon at least forty-eight (48) hours prior notice to District.
5.7 The City shall pay to District the operation and maintenance costs of the reclaimed water delivery and distribution facilities located on District’s property that are operated or maintained by District on behalf of City. The operation and maintenance costs shall be based on the District’s books, accounts and records, and determined in accordance with generally-accepted accounting practices.
6. Pavment for Reclaimed Water
6.1 District shall invoice City for the cost of the reclaimed water purchased by City and for all pump station operation and maintenance costs incurred by District on behalf of City as specified in Section 5 hereof within ninety (90) days after the close of each District fiscal year. Said invoices shall be paid within thirty (30) days after presentation thereof by District.
6.2 In the event of non-payment for sixty (60) days after mailing of invoice, District may disconnect City’s facilities at point of connection, and upon written notification by Chief Engineer, may promptly remove all of the City’s facilities from District property. This remedy is in addition to all other remedies provided by law. 9 03/25/04
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I. Metering and Measurement of Flows
7.1 City agrees to install at its own expense a meter or meters of appropriate size and type for the purpose of measuring the quantity of reclaimed water delivered pursuant to the terms of this Agreement from the Water Reclamation Plant to each location of use by City. City agrees to inform District in writing of the total quantity of reclaimed water delivered each month at each location of use and the purposes for which said quantity of reclaimed water was used. Such written notice shall be provided by the end of the month following the month for which the report is being made.
7.2 City hereby agrees that District may enter upon the property whereon reclaimed water is used at any time for purposes of verifying the quantity of reclaimed water delivered to City and shall have, upon request, full access to all City meters and records that measure and register reclaimed water flow.
8. Limitation of Use
8.1 City understands and agrees that reclaimed water delivered from the Water Reclamation Plant pursuant to the terms hereof has limited uses, and City agrees to use said reclaimed water for only those uses or purposes which are legally permissible under the laws of the State and the directions of Department andlor other appropriate regulatory agencies.
8.2 City agrees to oversee any and all sites that receive reclaimed water from City, in order to ensure, by agreement, ordinance or other such administrative mandate, that each site using reclaimed water from the Water Reclamation Plant does so in accordance with the rules, regulations, guidelines and any other pertinent criteria for such use mandated by the Department and/or other appropriate regulatory agencies, and that.the aesthetic acceptability of any property using reclaimed water is maintained. City further agrees to perform or cause to be performed periodic inspections of these sites, in accordance with the California Water Code, the California Code of Regulations, Title 22 and directives from the appropriate regulatory agencies. City shall supply copies of such inspection reports to District.
8.3 City agrees to notify both the proper regulatory authorities and the District in the event that City experiences a spill of reclaimed water that exceeds fifty thousand (50,000) gallons, as required by California Water Code 513529.2.
03/25/04 10
9. Walnut Valley Water District Contracts
9.1. Within thirty (30) days of the execution of this Agreement and at the written request of Walnut Valley, City shall terminate its agreement with Walnut Valley for the resale of reclaimed water produced at the Water Reclamation Plant. District shall then have the right to contract directly with Walnut Valley for the sale of reclaimed water from the portion of the Water Reclamation Plant discharge that is not being utilized by City or District.
10. 10.1 With the exception of Paragraph 1.4 which will be effective upon execution of this contract, the term of this Agreement shall be twenty (20) years, beginning on July 1,2003, provided that this Agreement may be terminated at any time by mutual agreement of the parties hereto. The parties do hereby agree that my portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto.
10.2 District grants to City a one-time option to extend the term of this Agreement for twenty (20) years from the termination date contained herein. The extended term of this Agreement shall be subject to the pricing policy, rate structure or other method employed by the District to determine the price of its reclaimed water in existence at the time the City exercises its option. To exercise this option, City must not be in default of any of the provisions of this Agreement and must deliver written notice of its exercise of the option to the Chief Engineer in the manner specified in Section 13 hereof not earlier than two (2) years nor later than one (1) year prior to the expiration of the term hereof. If the City exercises its option to extend the term of this Agreement, the City shall maintain its entitlement to reclaimed water produced at the Water Reclamation Plant, as set forth in Paragraph 2.1 herein. Any and all of the remaining terms and conditions of this Agreement may be renegotiated with the consent of both parties. Such negotiations shall be conducted reasonably and in good faith.
11. Assignments
11.1 City may not transfer or assign any of its rights under this Agreement without the prior written consent of the Chief Engineer.
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12.1 All notices given pursuant to this Agreement shall be addressed to District or City as set forth below or as District or City may hereafter designate in writing, and shall be sent through the United States Mail, duly registered or certified, return receipt requested with postage prepaid thereon, or by any other method providing positive proof of delivery
TO DISTRICT
Chief Engineer, General Manager
County Sanitation Districts of Los Angeles County
Post Office Box 4998
Whittier, CA 90601-4998
TO CITY of POMONA
City Manager
City of Pomona
505 South Garey Avenue
Post Office Box 660
Pomona, CA 91769
13. Integrated Ameement
13.1 This Agreement, together with Appendices “A” and “B,” supercede any and all other agreements, either oral or in writing, between the parties with respect to the subject matter herein. Each party to this Agreement acknowledges that no representation by any party, which is not embodied herein, nor any other agreement, statement or promise contained in this Agreement, shall be valid and binding. Any modification of the Agreement shall he effective only if it is in writing and signed by all parties. 12 03/25/04
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year above set forth.
CITY OF POMONA COUNTY SANITATION DISTRICT
N0.2 OF LOS ANGELES COUNTY
ATTEST ATTEST
BY:-, By:
/ "
."y '' J 7 City Clerk, City of Pomona Secretary
c
APPROVED AS TO FORM: APPROVED AS TO FORM
LEWIS, BRISBOIS, BISGAARD AND SMITH
13 03/25/04
APPENDIX A
Pomona Water Department Reclaimed Water Pricing Estimate Phase-in from 30% 0 M Incrementally beginning in 2016
Estimated AFY increase in usage"'
Estimated Usage (Ag 6250 6250 6250 6250 6250 6250 6250 6250 6250 6250 6250 6250 6250 6250 Capital and O&M costs for Reclaimed
Water System
Amortized Capital ($1 (3
Annual O&M ($IAF)"' 70 72 74 76 78 80 82 84 86 88 90 92 95 97 RW Personnel Costs ($) 259,925 266,423 273,084 279,911 286,909 294,081 301,433 308,969 316,693 324,611 332,726 341,044 349,570 358,309 Operating Costs ($1 45,106 46,234 47,389 48,574 49,789 51,033 52,309 53,617 54,957 56.331 57,739 59,183 60,663 62,179 Required Casts ($1 0 0 0 0 0 0 0 0 n n n n n n
Utility Costs ($1 134,986 140,385 143,895 147,492 151,180 154,959 158.833 162,804 166,874 171,046 175,322 179,705 184,198 188.803 MWD Subsidy ($lAF]@' 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Subtotal ($IAF) 70 72 74 76 78 80 82 84 86 88 90 92 95 97 Carryover Deficit 0 0 0 0 0 0 0 0 0 0 0 0 0 0
70 72 74 76 78 80 82 84 86 88 90 92 95 97 Total (WAF)
Alternative Water Sopply
Weighted Water Rate ($IAF)@)(" 309 312 315 319 322 325 328 331 335 338 342 345 348 352 278 281 284 287 290 292 295 298 301 304 307 310 314 317 Percent Discount"' 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% (WAF1 208 209 210 211 212 213 214 215 218 216 217 218 219 220 Total (BIAF]
System Cost and Alt. Water Supply
Price for reclaimed water
Existing Contract Provision
Shared Savings
Price FIOOP'
Initial Phase-in 68 70 72 74 75
Price ~ei~ing"""
Phase in from 30% O&Mt3)
85 89 94 100 108 110 113 116 119 122 125 128 131 134
51 53 54 55 57 58 59 61 62 64 66 67 69 71
NA NA NA NA NA NA NA NA NA NA NA NA NA NA
68 70 72 74 75 58 59 61 62 " 64 66 67 69 71
104 104 105 105 106 106 107 107 108 108 109 109 109 110 Total (BIAF]
Total Reclaimed Water Cost to Pomona
(O&M and Water Purchase) ($/An
Total Savings to Pomona ($/An
139 142 146 149 153 138 141 145 148 152 156 160 164 168 170 170 170 169 169 187 187 187 187 186 186 185 185 184 51 53 54 55 57 58 59 61 62 64 66 67 69 71
171 175 180 184 189 193 198 203 208 213 219 224 230 236 545 559 573 587 602 61 7 632 648 664 681 698 715 733 751 Price Fioor(OO% O&M)(') ($/AF)
Price Ceiling (100% O&M)"' ($/AF)
Pomona 08M (WdGj
Annual Payment (phase-in plan] $427,252 $437,933 $448,881 $460.103 $471,606 $362,547 $371,611 $380,901 $390,423 $400,184 $410,189 $420,443 $430,954 $441,728 Annual Payment (shared savings plan) $649,532 $652.727 $655,872 $658,963 $661,999 $664,977 $667,892 $670,744 $673,529 $676,243 $678,684 $681,449 $683,933 $686,334 Annual Payment (exising calcuiation) $531,250 $556,250 $587,500 $625,000 $672,735 $689.554 $706,793 $724,462 $742,574 $761,138 $780,167 $799,671 $819,663 $840,154 :
r:\conwav\ieuse\co\cost nrilAnnendix A 2n03-04.xls.Pricino-3O% O&M. Swer "haw. in. 312512004
APPENDIX A
Pomona Water Department Reclaimed Water Pricing Estimate Phase-in from 30% 0 M Incrementally beginning in 2016
Estimated AFY increase in usage"'
Estimated Usage (An 6250 6250 6250 6250 6250 6250
Capifal and O&M costs for Reclaimed
Water System
Amollized Capital ($)
Annual O&M ($IAF)('' 99 102 105 107 110 113
RW Personnei Costs ($) 367,267 376,449 385,860 395,507 405,394 415.529 Operating Costs (9) 63,734 65,327 66,960 68,634 70,350 72.109 Utility Costs ($) 193,523 198.361 203,320 208,403 213,613 218,953 Required Costs (5) 0 0 0 0 0 0
MWD Subsidy ($IAF)@' 0 0 0 0 0 0
Carryover Deficit 0 0 0 0 0 0
Subtotal (WAF) 99 102 105 107 110 113
Total (SIAF) 99 102 105 107 110 113
Alternative Water Supply
Weighted Water Rate ($IAF)"(" 355 359 363 366 370 374
Percent DiscounP' 10% 10% 10% 10% 10% 10%
Total ($IN) 320 323 326 330 333 336
System Cost and Alt. Water Supply
(8IAF) 220 221 222 222 223 224
Price for reclaimed water
Existing Contract Provision 138 141 145 148 152 156
Price Floori4) NA NA NA NA NA NA
Initial Phase-in
price Ceiling(')"' NA NA NA NA NA NA
Shared Savings 110 111 111 111 112 112
Phase in from 30% 08M") 80 89 97 105 112
Total (WAF) 80 89 97 105 112 112
Total Reclaimed Water Cost to Pomona
(OO&M and Water PurchaseJ ($/An 179 191 201 212 221 224 Total Savings to Pomona ($/A9 176 168 161 154 148 149
Price Floor 130% O&MI"' WAF1 72 74 76 7R Rn R7 ~. .- __ __ Price Cei/inn$ (100% oSnnji7l &AFJ 241 248 254 260 267 273 Pomona O&M ($/MGJ 770 789 809 829 850 871
Annual Payment (phase.in pian) S4b9 947 S554.803 9608.078 S353.543 1696 061 s6da.783 Annual Payment (snared savings plan) SS88 346 566L.872 SG93 00: 5635.032 StiJb.061 Sd9d.783 Annual Payment (ex~smg c~lcuiat'on) SdF' 1% $882,687 S904.754 3927,373 S050.557 S974.321 Notes:
(1)
(2) NO subsidy included.
(3) Phase-in from 30% O&M is in 5% increments each year. (4) Reflects 30% O&M of upstream WRPs based on FY0102
(5) Reflects 100% O&M of upstream WRPS based on FYOI-02 (6) 10% discount for direct reuse.
(7) 0% capital finance rate.
(8) 1.0% reflects per annum inflation rate foraiternative watersupply (9) Based an 30% MWD, 65% groundwater and 5% surface water
2.5% is used as the yearly inflation rate. except for electiicity which will use 4.0% Total Payments Phase-in Savings
$9,564,870
$13,526,377 $3,961,507
$15,337,761 $5,772,891
APPENDIX B
Sample Calculation of Reclaimed Water Rate during five-year “transition” period of Agreement (note: based on the assumptions, the numbers contained herein may not exactly match those in Appendix A).
Assume the following:
Thirteenth year of contract (i.e., four years remaining in “transition” period) Flow-weighted O&M of Inland Plants = $241/AF
Minimum Reclaimed Water Unit Price (30% O&M) = $72/AF
Reclaimed Water Unit Price in Preceding Fiscal Year (year 12) = $71/AF Unit rate for MWD water = $498/AF
Amount of MWD water used = 30%
Unit rate for pumped groundwater = $237/AF
Amount of groundwater used = 70%
Unit cost of operating reclaimed water system = $107/AF Alternative Water Supplv for Pomona:
(MWD Rate * MWD percentage) + (Groundwater Rate * Groundwater percentage) + (Surface Water Rate * Surface Water percentage) * 90% =
($498/AF * 0.30) + ($237/AF * 0.65) +($50/AF * 0.05) * 0.90 = ($149.40 + $154.05 + $2.50) * 0.90 = $275.36/AF
Shared Savings Calculation:
(Alternative Water Rate - Reclaimed Water System Costs) / 2 = ($275.36/AF - $107/AF) / 2 = $84.18/AF
Calculation of Reclaimed Water Rate from Paramaph 5.3:
Shared Savings Rate - 30% O&M Rate = $84.lS/AF -$72/AF = $12.18/AF Step increase over remaining 4 years in “transition” period = $12.18/AF / 4 years = $3.05/AF Preceding FY Reclaimed Water Rate + Step Increase = $71/AF + $3.05/AF = $74.05/AF (year 13 R.W.
Year 14 Reclaimed Water Rate = $74.05/AF
Year 15 Reclaimed Water Rate = $74.05/AF + $3.05/AF = $77.10/AF Year 16 Reclaimed Water Rate = $77.10/AF + $3.05/AF = $80.15/AF Year 17 Reclaimed Water Rate = $80.15/AF + $3.05/AF = $83.20/AF Year 18 Reclaimed Water Rate = Shared Savings Pricing Provision L\WP5I\CONTRAC~C\DOCUME-l~G~LI-1\LOCAIOMONA RECLAIMED WATER AGREEMENTI 3 23 REVIS1ONS.DOC