December 17, 2024
Public Works
DATE: December 17, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Daniel Chavarria, PE, Director of Public Works
Robert Armijo, PE, Deputy Director of Public Works / City Engineer
Mary Phelps, Water Resource Division Manager
Subject:
Resolution to terminate West County Agency Joint Powers Agreement (JPA) and approve operating agreements
between City of Richmond and West County Wastewater.
FINANCIAL IMPACT: Together, the Dissolution Agreement and Operating Agreement clarify facility ownership of the small subset of WCA-owned facilities and allocate costs between the
parties for the continued operation and management of
these assets. The cost savings would be approximately
$65,000/year based on joint use costs. An annual cost of $1,943,966 may apply for contracting with West County
Wastewater District to treat and dispose of Richmond’s
biosolids, which includes facility-related expenses and biosolid treatment enhancements. (Account String:
40322731-400202).
PREVIOUS COUNCIL
ACTION:
None
STATEMENT OF THE
ISSUE:
Staff is seeking City Council approval of a Resolution
terminating the West County Agency Joint Powers
Agreement as all joint capital improvement projects have been completed, so there is no need to continue the
existence of the West County Agency, which has
operated as a Joint Powers Agreement since the late
1970’s.
AGENDA
REPORT
December 17, 2024
RECOMMENDED ACTION:
ADOPT a resolution agreeing to terminate the West
County Agency Joint Powers Agreement and APPROVE
the operating agreements between the City of Richmond
and West County Wastewater for the operation and
maintenance of assets owned by each agency. (Public
Works – Daniel Chavarria 510-620-5478/Robert Armijo
510-620-5477)
DISCUSSION:
I. Background
West County Wastewater District ("WCW"), the City of Richmond ("City"), and the Richmond Municipal Sewer District ("RMSD") are members of the West County Agency (“WCA” or the “JPA”), a Joint Powers Authority established pursuant to Government Code Section 6500 et. seq. (the “Joint Exercise of Powers Act”).
The WCA was formed by the West County Agency Joint Exercise of Powers Agreement (the "JPA Agreement"), executed on February 15, 1977; amended on August 11, 1981; amended and restated on June 15, 1984; and further amended on April 2, 1990, November 23, 1992, December 21, 1993, August 6, 1996, and July 21, 2020. The Parties executed an Amended and Restated Joint Powers Agreement on June 20, 2024.
The WCA was created to finance and construct wastewater disposal facilities for the City, RMSD, and WCW. Since its formation, the WCA has completed several construction projects supported by eleven separate clean water grants. The agency has paid off bonded indebtedness for its construction projects and has fulfilled its original purposes.
In June of 2023, the WCA Board voted to pursue the dissolution of the JPA. The JPA members are now taking actions to terminate the JPA Agreement and dissolve WCA effective December 31, 2024.
II. National Pollutant Discharge Elimination System (NPDES) Permit
After discussions among the agencies earlier this year with the California State Waterboard, the parties decided to continue with the existing NPDES permit structure.
Representatives from the state agency explained it would be simpler to have a combined permit since West County Wastewater and the Richmond Municipal Sewer
December 17, 2024
District have a combined outfall. However certain water quality requirements were broken out for separate monitoring by the individual treatment plants. Staff received the final reissued NPDES permit from the RWQCB which became effective on August 1, 2024. Any changes to the historical NPDES permitting structure (for example separate permits for each agency) will be negotiated during the current 5-year permit cycle. The parties have provided notice to the Regional Board of the change of operator effective December 31, 2024.
III. Dissolution and Operating Agreements
The WCW and the City (collectively, the “Parties”) have negotiated the West County Agency Dissolution Agreement (“Dissolution Agreement”) which provides the terms and conditions of the dissolution of the WCA, the termination of the JPA Agreement, and the allocation of WCA assets between the Parties. As part of the termination of the JPA Agreement and dissolution of the JPA, WCA would assign to the City or WCW all of the JPA contracts, all of the real property interests including fixtures/equipment owned by the JPA, and all personal property (including money and assets) owned by the JPA, as further described in the Dissolution Agreement.
Beginning in 2025, solids handling costs are anticipated to increase significantly due to WCW's implementation of Class A biosolids production under its new treatment process. This is projected to result in costs as high as $1.9 million annually compared to the current cost of approximately $300,000 annually. While not a direct cost of the dissolution, this increase is a related impact stemming from WCW's enhanced treatment process. Staff is exploring potential cost-saving measures, such as the City processing its solids to Class A biosolids standards, which may provide more cost-effective alternatives. These options are in the early stages of consideration and will be evaluated for feasibility.
Concurrently with the Dissolution Agreement, the Parties intend to execute the Operating Agreement (WCW and City of Richmond Joint Assets) (the “Operating Agreement”), which provides for the continued operation, maintenance, and joint use of the WCA assets.
IV. Dissolution Process and Timeline
The Dissolution Agreement delegates authority to the parties’ representatives to carry out the legal and logistical steps to wind down the agency. Following dissolution of the JPA on December 31, 2024, City of Richmond staff will take all actions necessary to liquidate and distribute the JPA’s financial assets. City of Richmond staff will file any
December 17, 2024
required notices regarding the dissolution with the California Secretary of State and Local Area Formation Commission (LAFCO) and will handle the transfer of the JPA’s records to the City of Richmond. The parties have agreed to cooperate and execute any documents that may be necessary to effectuate the terms of the Dissolution Agreement and facilitate the transfer of property rights contemplated therein.
Staff is requesting the City Council adopt the Resolution approving the termination of the Joint Powers Agreement and dissolution of the West County Agency and approve the Operating Agreement between the City and WCW.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution to dissolve West County Agency Joint Powers Agreement Attachment 2 – Dissolution Agreement
Attachment 3 – Operating Agreement