18518462.18
SOCWA Withdrawal and
Continued Services Agreement
(TCWD-SOCWA)
This SOCWA Withdrawal and Continued Services Agreement (“Agreement”) is dated _____________, 2023 (“Effective Date”) and is between Trabuco Canyon Water District (“TCWD”), the South Orange County Wastewater Authority (“SOCWA”), and each of SOCWA’s other Member Agencies as that term is defined below.
A. Overview. The Joint Exercise of Powers Agreement Creating South Orange County Wastewater Authority (“SOCWA”) dated July 1, 2001 (the “Joint Powers Agreement”) created a joint powers agency made up of several wastewater service providers within the San Juan Creek and/or Aliso Creek watershed. The nine current members of SOCWA are the City of Laguna Beach, the City of San Clemente, El Toro Water District, Emerald Bay Services District, Irvine Ranch Water District, Moulton Niguel Water District, Santa Margarita Water District, South Coast Water District, and TCWD (collectively, the “Member Agencies”). SOCWA owns and operates wastewater treatment facilities, transmission mains, and outfalls on behalf of its Member Agencies, and facilitates a recycled water reuse permit compliance, monitoring, and reporting program.
B. TCWD Project Committee Participation. Where a SOCWA activity, project, or facility involves less than all of SOCWA’s Member Agencies, the affected Member Agencies form a “Project Committee” (or “PC”) that is responsible for overseeing that activity, project, or facility. TCWD is currently a member of PC 12 (formerly known as PC No. 2SO), which handles the activity of joint recycled water permit compliance, monitoring, and reporting for four of the Member Agencies: TCWD, Moulton Niguel Water District, Santa Margarita Water District, and South Coast Water District. The SOCWA recycled water permit, Order No. 97-52, covers TCWD’s Robinson Ranch Water Recycling Plant and related recycled water distribution and use system. TCWD’s recycled water program is the smallest of the members, representing approximately 6% of the total SOCWA-permitted service area recycled water by volume.
C. TCWD Intent to Obtain Independent Recycling Permit. TCWD intends to ultimately obtain and manage its own recycled water permit from state/regional regulators, instead of participating in the joint recycled water permitting services offered by SOCWA1.
TCWD is advised that obtaining an independent permit may take up to 12-18 months.
D. TCWD Withdrawal from SOCWA. Upon obtaining an independent recycled water permit, TCWD will no longer benefit from most SOCWA activities, projects, or facilities. TCWD currently represents less than 1% of the total revenues and budget of SOCWA2. TCWD has determined that, because >99% of the budget of SOCWA is not related to TCWD’s operations, that it would be in the best interests of both SOCWA and TCWD for TCWD to withdraw as a member of SOCWA. TCWD will satisfy its actuarial liability arising out of unfunded pension obligations (“UAL”) and other post-employment benefits (“OPEB”) obligations from its historic participation in PC 12 by making a lump sum payment equivalent to the actuarially-determined liability as provided in this Agreement.
1 Three other SOCWA Member Agencies have independent recycled water permits: the City of San Clemente, El Toro Water District, and Irvine Ranch Water District. The latter two are former members of PC 12. 2 TCWD represented only 0.25% of SOCWA’s budget in 2022-23 ($61,528 out of $23,670,816), and is projected to be only 0.18% of SOCWA’s budget in 2023-34 ($44,780 out of $24,641,183).
Attachment 1
18518462.18
TCWD-SOCWA Withdrawal
& Continued Services Agreement
E. Interim Recycled Water Permitting Services. Given the uncertain time frame for TCWD to obtain an independent recycled water permit, and in order to facilitate the orderly transition from joint recycled water permitting under SOCWA to an independent recycled water permit, the parties intend for TCWD to immediately withdraw from SOCWA, and concurrently provide for SOCWA to continue to provide limited other services including participation in bulk purchasing and a salt and nutrient management plan, and in the medium-term to perform recycled water permit services for TCWD under contract instead of under the JPA until TCWD’s independent permit is issued. This will avoid the potential for TCWD to have obtained an independent permit while still being a SOCWA member.
F. Purposes. The Parties intend by this Agreement to provide for (i) TCWD’s withdrawal as a member agency from SOCWA; (ii) TCWD’s payment of all UAL/OPEB liabilities associated with TCWD’s historic membership in SOCWA; (iii) SOCWA’s temporary continued provision of recycled water permitting services; and (iv) SOCWA’s continued provision of certain other special services on a contract basis.
The Parties therefore agree as follows:
1. JPA Withdrawal.
1.1 As of the Effective Date, TCWD is no longer a member of SOCWA and therefore no longer a member of the SOCWA Board of Directors, Project Committee 12, or any other committee. The remaining Member Agencies consent to this withdrawal according to the terms and conditions of this Agreement.
1.2 The JPA is hereby amended to remove TCWD as a member of SOCWA or a party to the JPA.
1.3 TCWD shall pay to SOCWA all amounts owing to SOCWA that were incurred during its membership in SOCWA within 45 days after receipt of a closing invoice from SOCWA, subject to Section 9 (Liability; Indemnity).
2. Effective Date. This Agreement will become effective on the last date this Agreement is executed by SOCWA and the Member Agencies. Regardless of the Effective Date, TCWD shall pay its SOCWA fourth quarter invoice for fiscal year 2022-23.
3. Interim Recycled Water Permitting Services. Concurrently with TCWD’s withdrawal, SOCWA shall provide recycled water permit compliance, monitoring, and reporting services (“RW Services”) to TCWD pursuant to this Agreement. SOCWA shall perform the RW Services to the same level, to the same extent, and using the same standard of care as those RW Services were provided to TCWD prior to TCWD’s withdrawal. SOCWA shall provide the RW Services from the Effective Date until TCWD gives 30 days’ notice to SOCWA that TCWD no longer requires SOCWA’s RW Services.
4. Salt and Nutrient Management Plan Services. Concurrently with TCWD’s withdrawal, SOCWA shall provide services related to development and approval of a Salt and Nutrient Management Plan (“SNMP”) or other special studies related to production and distribution of recycled water3(“SNMP Services”). SOCWA shall provide the SNMP Services 3 For example, State Water Resources Control Board 13-267 investigative orders.
TCWD-SOCWA Withdrawal
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from the Effective Date until TCWD and SOCWA mutually agree in writing that SOCWA shall no longer provide SNMP Services.
5. Costs, Invoicing and Payment. All general references to “Services” in this Agreement include both RW Services and SNMP Services. SOCWA shall invoice TCWD, on no less than a quarterly basis, for all of SOCWA’s costs to provide the Services to TCWD. The costs will be allocated to TCWD based on SOCWA’s budgeted direct costs, and on a time and materials basis according to the rates set forth in Exhibit 1 (these rates include reasonable overhead and administrative costs). The rates set forth in Exhibit 1 may be reviewed annually and revised to reflect increases in labor or other costs. If SOCWA desires to revise or increase its rates, SOCWA shall deliver with 30 days’ notice a proposed revised Exhibit 1; which notice must identify the effective date of the new rates. TCWD will have 30 days from the date notice is delivered to object to the rate increase; if TCWD does not object, the new rates will become effective. If TCWD objects to the proposed new rates, TCWD and SOCWA shall meet and confer to discuss further. The Parties shall negotiate in good faith and TCWD shall not unreasonably refuse to increase time and materials contract service rates. In no event will SOCWA be prevented from increasing its time and material contract service rates by five percent (5%) or less annually. In no event will SOCWA be allowed to increase its time and material contract service rates by more than five percent (5%) without TCWD’s consent. TCWD shall pay SOCWA’s invoices for all Services under this Agreement by no later than 30 days’ after receipt of SOCWA’s invoice.
6. UAL/OPEB Liability. In recognition of TCWD's duty to pay to SOCWA the proportional amount of any UAL/OPEB public retirement system liability allocable to TCWD as of the Effective Date, TCWD shall pay to SOCWA within 45 days after the Effective Date the total amount of $20,813, as the amount of such liability calculated by SOCWA’s actuaries through June 30, 2023 as the anticipated Effective Date, or such amount as re-calculated for a later Effective Date, in full and final settlement of all outstanding UAL/OPEB liability to SOCWA, and upon receipt of that payment, TCWD will be deemed to have satisfied its UAL/OPEB obligations and SOCWA will be deemed to have released and discharged TCWD from any further liability for SOCWA's UAL/OPEB obligations.
7. No JPA Costs. After the Effective Date, TCWD will not have any responsibility to contribute toward any operational, maintenance, capital, or general fund costs incurred by SOCWA or its Member Agencies, except those costs directly arising out of or relating to the Services, which will be proportional to the services received and identified in the annual use audit as part of the PC 12 costs (and include reasonable overhead and administration costs). If SOCWA does not adopt an annual use audit or budget, then the previous year's annual use audit figures will be used and later reconciled upon adoption of a use audit or budget.
8. SOCWA Bulk Purchases. TCWD is currently a party to multiple contracts with SOCWA and other Member Agencies for bulk purchasing of services and supplies. SOCWA shall make best efforts to continue to allow for TCWD to participate in joint purchasing agreements offered to Member Agencies for chemicals, solids hauling, and other services that SOCWA negotiates with third party vendors. TCWD shall pay to SOCWA its proportional share of the estimated procurement costs for any such contract, based on the formula described in Exhibit 1.
9. Liability; Indemnity.
9.1 SOCWA shall indemnify, defend, and hold harmless TCWD from:
18518462.18
TCWD-SOCWA Withdrawal
& Continued Services Agreement
A. Any claims, legal, regulatory, enforcement, or administrative actions (“Claims”) arising out of or relating to the debts, liabilities, operations, obligations, or facilities owned or operated by SOCWA or any of its Project Committees (except PC 12) that arise on or after the Effective Date. The parties do not intend to release TCWD from its proportional liability for any Claims relating to TCWD’s participation in SOCWA or PC 12 prior to the Effective Date.
B. Any Claims arising out of or related to SOCWA’s Services on or after the Effective Date, except such Claims arising out of any acts or omissions of TCWD.
9.2 TCWD shall indemnify, defend, and hold harmless SOCWA from:
A. Any Claims that are directly attributable to TCWD’s participation in PC 12 prior to the Effective Date.
B. Any Claims that are the result of TCWD's own acts or omissions that arise on or after the Effective Date.
C. TCWD’s share of any Claims that arise while TCWD is a permittee under the SOCWA recycled use permit and that are shared liabilities deemed the responsibility of all permittees, except those Claims related to SOCWA Services under Section
9.1(B) above.
10. Effect on Prior Rights. The terms of this Agreement govern the parties and supersede all contrary terms in prior agreements between the parties, including but not limited to the Joint Powers Agreement.
11. Miscellaneous.
11.1 Integration, Amendment. This Agreement represents the entire understanding of the parties as to TCWD’s withdrawal from SOCWA and concurrent interim contracting for the Services. To the extent that it contradicts or varies from this Agreement, no prior oral or written understanding will be of any force or effect with respect to the matters covered by this Agreement. This Agreement cannot be modified except in a writing approved and executed by all applicable parties.
11.2 Governing Law. This Agreement is governed by the laws of the State of California and will be construed as if drafted by all parties.
11.3 Third Parties. This Agreement does not create any third-party beneficiary or any rights in any person or party other than the parties.
11.4 Signing Authority. Each Party represents and warrants that each person or persons executing this Agreement on its behalf is duly authorized to do so by the respective Party and that this Agreement binds the parties.
11.5 Notices. Any written notice required by this Agreement must be made by U.S. mail or by reliable overnight courier and delivered to the following address, together with a courtesy copy by email:
TCWD-SOCWA Withdrawal
& Continued Services Agreement
18518462.18
To TCWD: Trabuco Canyon Water District
32003 Dove Canyon Dr.
Trabuco Canyon, CA 92679
Attn: General Manager
cc: by email to [email protected]
With a Courtesy Copy by email to:
[email protected]
To SOCWA and the other Member Agencies:
South Orange County Wastewater Authority
34156 Del Obispo Street
Dana Point CA 92629
Attn: General Manager
Any party may, by written notice to the others, designate a different address or addressee, which will be substituted immediately for that specified above.
11.6 Severability. If any provision of this Agreement, for any reason, is held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provision of this Agreement, but this Agreement will be construed as if the invalid, illegal, or unenforceable provision had never been set forth, and the remainder will be enforceable to the fullest extent permitted by law to effectuate the original intent of the Parties.
11.7 Successors & Assigns. The terms of this Agreement are binding upon and will inure to the benefit of and be enforceable by the respective successors and assigns of the parties.
11.8 Counterparts. This Agreement may be executed in counterparts, each of which is an original, but all of which together will constitute one and the same instrument.
The parties are signing this Agreement as of the Effective Date.
TRABUCO CANYON WATER DISTRICT
Dated: ______________________ By:
Fernando Paludi, General Manager
Approved as to Form:
Hanson Bridgett, LLP
By: ________________________
District Counsel
[additional signature pages follow]
April 4, 2023
TCWD-SOCWA Withdrawal
& Continued Services Agreement
18518462.18
SOUTH ORANGE COUNTY WASTEWATER
AUTHORITY
Dated: ______________________ By:
Print Name:
Title:
Approved as to Form:
By: ________________________
Authority Counsel
[member agency consents follow]
TCWD-SOCWA Withdrawal
& Continued Services Agreement
18518462.18
SOCWA MEMBER AGENCIES’ CONSENT
The Member Agencies of SOCWA hereby consent to the SOCWA Withdrawal and Continued Services Agreement. This consent is expressly conditioned upon and subject to the condition that such consent is not and shall not be construed as a waiver or release of any liability, obligation or contribution to which TCWD would otherwise be obligated if it had not withdrawn from SOCWA or any project committee of SOCWA and which arise out of, or relate in any way to any and all acts and/or failures to act preceding the date of TCWD’s withdrawal from SOCWA. This consent is given on the express condition that TCWD accepts and agrees to this condition.
City of Laguna Beach
Dated: ______________________ By: Print Name:
Title:
Approved as to Form:
By: ________________________
City Attorney
City of San Clemente
Dated: ______________________ By:
Print Name:
Title:
Approved as to Form:
By: ________________________
City Attorney
El Toro Water District
Dated: ______________________ By:
Dennis Cafferty, General Manager
Approved as to Form:
By: ________________________
District Counsel
TCWD-SOCWA Withdrawal
& Continued Services Agreement
18518462.18
South Coast Water District
Dated: ______________________ By:
Rick Shintaku, General Manager
Approved as to Form:
By: ________________________
District Counsel
Accepted
Trabuco Canyon Water District
Dated: ______________________ By:
Fernando Paludi, General Manager
April 4, 2023
TCWD-SOCWA Withdrawal
& Continued Services Agreement
18518462.18
Exhibit 1
Non-SOCWA Agencies’ Proposed Contract Participation
This includes staff labor (fully burdened) and legal counsel costs Staff activities include:
Preparing/updating the RFP documents (including getting updated agency information, updating sections for new laws, reviewing and updating contract conditions, and/or adding more specificity to address vendor management issues)
Activities during the proposal period (job walks, responding to questions, interviews, proposal reviews, documenting the RFP process, BOFA’s, etc.)
Preparing and presenting SOCWA Board materials
Executing contracts
No bid protest costs assumed
No individual procurement cost tracking by SOCWA staff No Use Audit proposed for true up
CPI LA-OC inflation adjustment from year 0 date
SOCWA staff has estimated the cost for each major contract procurement at $10,000 $10,000 would be divided by the number of RFP participants For example:
$10,000 with 8 participants (similar to the bleach RFP) Each agency’s costs would be $1,250 ($10,000 / 8)
Non-SOCWA agencies would be billed $1,250