8F
Date: September 15, 2026
To: Honorable Mayor and Members of the City Council
From: Alvin Papa, Public Works Director
By: Chuck Schaich, Policy & Resources Specialist | [email protected] Subject: Public Works – Authorize Staff to Proceed with the Metropolitan Water District Local Resources Program Agreement Process. Expenditure: None.
RECOMMENDATION
Recommendation of the Public Works Director that City Council authorize staff to proceed with the Metropolitan Water District of Southern California (MWD) Local Resources Program (LRP) agreement process, subject to future City Council approval of the final agreement.
FUNDING
None required.
DISCUSSION
The Water Replenishment District (WRD) is responsible for groundwater replenishment and management of the Central and West Coast Groundwater Basins. WRD owns the Goldsworthy Desalter, located at the City's Services Facility, which is currently undergoing a major expansion that will increase annual potable water production from approximately 3,000 acre-feet to 7,000 acre-feet. Under a long-standing agreement with WRD, the City of Torrance operates and maintains the Desalter facility and purchases all potable water produced for distribution within the City's municipal water system.
To help offset the cost of the expansion, WRD has applied for supplemental incentive funding through the Metropolitan Water District of Southern California (MWD) Local Resources Program (LRP). The LRP provides financial incentives for qualifying local water supply projects that reduce dependence on imported potable water by developing sustainable local water resources.
Because the City of Torrance is the applicable MWD member agency, the LRP application must be sponsored by the City. The City has previously sponsored WRD LRP applications for the original Goldsworthy Desalter in 2000 and the Albert Robles Center recycled water and stormwater capture project in 2016.
Under the LRP, the Goldsworthy Desalter Expansion Project is eligible to receive incentive payments of up to $305 per acre-foot for the additional potable water produced by the expanded facility, based on a maximum of 4,200 acre-feet per year over a 25-year period. The incentive payments would be based on actual additional water production and are anticipated to exceed $1 million annually, providing a significant funding source to help offset future operating costs of the expanded facility.
1 City Council
September 15, 2026
MWD has requested formal authorization from both the WRD Board of Directors and the Torrance City Council to enter into an LRP agreement. Approval of this authorization will allow MWD to present the project to its Board of Directors for final approval and execute the LRP agreement.
The final agreement will establish the approved incentive rate, not to exceed $305 per acre-foot, and define the eligible annual production of up to 4,200 acre-feet.
The attached draft agreement reflects the standard terms and conditions established by MWD for eligible Local Resources Program projects. Upon receipt of the final agreement from MWD, both WRD and the City of Torrance will return the agreement to their respective governing bodies for final approval and execution.
ATTACHMENT
1. MWD LRP Agreement
2 Torrance & WRD -1- Agreement No. xxxxxx
AGREEMENT NO. XXXXXX
TORRANCE GROUNDWATER DESALTER EXPANSION PROJECT
2014 LOCAL RESOURCES PROGRAM AGREEMENT
AMONG
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
CITY OF TORRANCE,
AND THE WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA
TABLE OF CONTENTS
Section Page
RECITALS ......................................................................................................................................2 Section 1: Definitions................................................................................................................3 Section 2: Representations and Warranties ...............................................................................4 Section 3: Ownership and Responsibilities ...............................................................................5 Section 4: Invoicing Process .....................................................................................................5 Section 5: Assessment Process .................................................................................................6 Section 6: Record Keeping and Audit.......................................................................................7 Section 7: Term and Amendments ............................................................................................7 Section 8: Hold Harmless and Liability ....................................................................................8 Section 9: Notice .......................................................................................................................8 Section 10: Successors and Assigns............................................................................................9 Section 11: Severability ..............................................................................................................9 Section 12: No Third Party Beneficiary ......................................................................................9 Section 13: Integration ..............................................................................................................10 Section 14: Governing Law ......................................................................................................10 Section 15: Non-Waiver............................................................................................................10 Section 16: Joint Drafting .........................................................................................................10 Section 17: Entire Agreement ...................................................................................................10 Exhibits
Exhibit A (Project Description)
Exhibit B (Performance Provisions)
ATTACHMENT 1
3 Torrance & WRD -2- Agreement No. xxxxxx
AGREEMENT NO. XXXXXX
TORRANCE GROUNDWATER DESALTER EXPANSION PROJECT
2014 LOCAL RESOURCES PROGRAM AGREEMENT
AMONG
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
CITY OF TORRANCE,
AND THE WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA THE EFFECTIVE DATE OF THIS AGREEMENT (“Agreement”) is _____________ by and among The Metropolitan Water District of Southern California (“Metropolitan”), the City of Torrance (“Torrance”), and the Water Replenishment District of Southern California (“WRD”).
Metropolitan, Torrance, and WRD may be collectively referred to as “Parties” and individually as “Party.”
RECITALS
A Metropolitan’s Board of Directors, at its October 2014 meeting, established terms and conditions for the 2014 Local Resources Program (“2014 LRP”) for local resource development projects within Metropolitan’s service area for the purposes of improving regional water supply reliability. The 2014 LRP Program provides three LRP incentive payment structure options to choose from: (1) sliding scale incentives up to $340/AF over 25 years, (2) sliding scale incentives up to $475/AF over 15 years, or (3) fixed incentive up to $305/AF over 25 years. Under option 2, the projects must continue to produce for 25 years, even when LRP payments are reduced to zero after 15 years. If an agency fails to comply with this provision, Metropolitan may, at its sole discretion, require reimbursement for a portion of the previous LRP payments toward the project.
B WRD has chosen option 3 for this Project (defined below).
C Metropolitan is a public agency organized and existing under the Metropolitan Water District Act (“Act”) Statutes 1969, ch.209, as amended, [§§109.1 et seq. of the Appendix to the West’s California Water Code] to transport, store and distribute water in the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura, within the State of California.
D The Act empowers Metropolitan to acquire water and water rights within or without the state; develop, store and transport water; provide, sell and deliver water at wholesale for municipal and domestic uses and purposes; set the rates for water; and acquire, construct, operate and maintain any and all works, facilities, improvements and property necessary or convenient to the exercise of the powers granted by the Act.
E Torrance, as a member public agency of Metropolitan under the Act, is a wholesale purchaser within its service area of water developed, stored, and distributed by Metropolitan.
F WRD is a groundwater management agency authorized under the Water Replenishment District Law (Water Code Section 6000 et seq.) to take any necessary or desirable action 4 Torrance & WRD -3- Agreement No. xxxxxx
to replenish groundwater supplies to prevent contaminants from entering such groundwater supplies.
G Metropolitan’s mission is to provide its service area with adequate and reliable water to meet present and future needs in an environmentally and economically responsible way.
H WRD seeks to enhance its local water supplies and reduce reliance on imported water by increasing use of recovered groundwater in its service area.
I WRD will construct a facility known as the Torrance Groundwater Desalter Expansion Project (Project) to deliver up to 4,200 acre-feet per year of recovered groundwater and requires Metropolitan’s financial incentives to complete and operate the Project.
J Metropolitan, Torrance, and WRD have determined that it is mutually beneficial for local water projects originating in the service area of WRD to be developed as a supplement to Metropolitan’s imported water supplies in order to meet future water needs.
K Metropolitan in accordance with the 2014 LRP desires to assist in increasing use of recovered groundwater by providing a financial incentive to WRD to implement the Project.
L Torrance and WRD believe that Metropolitan’s continued financial contribution toward the cost of the Project will make Project operation economically viable and is committed to implementation of the Project.
M Metropolitan’s 2014 LRP and the provisions for financial incentives are premised upon, and require verification of, actual costs for delivering recovered groundwater from the Project.
N The Parties believe the development of recovered groundwater by the Project will benefit the local community within Torrance, WRD, and the region served by Metropolitan.
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, the Parties do agree as follows:
Section 1: Definitions
The following words and terms, unless otherwise expressly defined in their context, shall be defined to mean:
1.1 “Allowable Yield” shall mean the amount of Recovered Groundwater delivered to End Users by WRD from the Project in a Fiscal Year that is eligible to receive Metropolitan’s financial assistance. Allowable Yield shall not exceed Ultimate Yield and shall exclude Recovered Groundwater that Metropolitan reasonably determines will not reduce Torrance’s or WRD’s demand for Metropolitan’s imported water. Unless otherwise approved in writing by Metropolitan, Allowable Yield shall exclude: (1) Recovered Groundwater provided by existing projects, (2) Allowable Yield from other projects with active or terminated LRP or Groundwater Recovery Program agreements; (3) 5 Torrance & WRD -4- Agreement No. xxxxxx
groundwater, surface water, or potable water deliveries to supplement the Project; (4) The first 2,800 AFY, which is the mutually agreed upon baseline of recovered groundwater produced by the existing desalter. Total Allowable Yield under this Agreement shall not exceed 105,000 acre-feet, which is equal to total anticipated project yield at the time of calculating the LRP Contribution.
1.2 “End User” shall mean each user that purchases Allowable Yield furnished by this Project within WRD’s and Torrance’s service area.
1.3 “Fiscal Year” shall mean a Metropolitan Fiscal Year, which begins on July 1 and ends on June 30 of the following calendar year.
1.4 “LRP Contribution” shall mean the financial contribution in dollar per acre-foot Metropolitan pays for Allowable Yield to WRD through Torrance for monthly billing purposes and shall be equal to $___ per acre-foot. LRP Contribution shall be reduced by
0.0003 cents per each one dollar in grants above $___ million that WRD receives toward the Project’s construction and/or operation and maintenance costs. Such grants include, but are not limited to, grants provided by the U.S. Bureau of Reclamation and funding by private parties.
1.5 “Project” shall mean the Torrance Groundwater Desalter Expansion Project, as defined in Exhibit A attached hereto and incorporated herein by this reference, being developed by WRD to deliver the Ultimate Yield. WRD shall notify Metropolitan prior to making any changes to the Project. Metropolitan shall inform WRD of Metropolitan’s decision to include or exclude the Project change to this Agreement.
1.6 “Recovered Groundwater” shall mean all treated groundwater, which subject to regulatory requirements, is suitable for beneficial uses.
1.7 “Recovered Water” shall mean all types of water including groundwater, or other water delivered for beneficial use to any users by the Project in a Fiscal Year.
1.8 “Ultimate Yield” is 4,200 acre-feet per Fiscal Year and subject to reduction provisions outlined in Exhibit B, incorporated herein by this reference.
Section 2: Representations and Warranties
2.1 WRD warrants that it is able and has a right to sell Allowable Yield from the Project.
2.2 WRD warrants that neither it nor any of its agents discriminate against employees or against any applicant for employment because of ancestry, creed, religion, age, sex, color, national origin, denial of family and medical care leave, marital status, medical condition, mental or physical disability (including HIV and AIDS), and further warrants that it requires all contractors and consultants performing work on the Project to comply with all laws and regulations prohibiting discrimination against employees or against any applicant for employment because of ancestry, creed, religion, age, sex, color, national origin, denial of family and medical care leave, marital status, medical condition, mental or physical disability (including HIV and AIDS).
6 Torrance & WRD -5- Agreement No. xxxxxx
2.3 WRD warrants that it has or will comply with the provisions of the California Environmental Quality Act for each and all components of the Project.
2.4 WRD represents and warrants that both 1) WRD and 2) to WRD’s knowledge, its directors, officers, employees, subsidiaries and sub-consultants, are not engaged in any business transactions or other activities prohibited by any laws, regulations or executive orders relating to terrorism, trade embargoes or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), the Patriot Act, and the regulations administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury, including those parties named on OFAC’s Specially Designated Nationals and Blocked Persons List. WRD is in compliance with the regulations administered by OFAC and any other Anti-Terrorism Laws, including the Executive Order and the Patriot Act. In the event of any violation of this section, Metropolitan shall be entitled to immediately terminate this Agreement and take such other actions as are permitted or required to be taken under law or in equity.
Section 3: Ownership and Responsibilities
3.1 WRD shall be the sole owner of Project. Metropolitan and Torrance shall have no ownership right, title, security interest, or other interest in the Project.
3.2 WRD shall be solely responsible for all design, environmental compliance, right-of-way acquisitions, permits, construction, and cost of the Project and all modifications thereof.
3.3 WRD shall be solely responsible for operating and maintaining the Project, in accordance with all applicable local, state, and federal laws. Metropolitan and Torrance shall have no rights, duties or responsibilities for operation and maintenance of the Project.
3.4 WRD shall install, operate, and maintain metering devices for the purpose of measuring the quantity of Allowable Yield and Recovered Water delivered to each End User.
3.5 WRD shall at all times during the term of this Agreement use its best efforts to operate the Project to maximize Allowable Yield on a sustained basis.
3.6 WRD shall assist Metropolitan in its effort to forecast future Project production and cost.
3.7 WRD shall notify and provide Metropolitan with a copy of relevant agreements and payments if WRD decides to convey water using the Project to any party that is not an End User.
Section 4: Invoicing Process
4.1 WRD shall notify Metropolitan in writing not less than 30 days prior to the start of Project operation. Before the first invoice Torrance, WRD, and Metropolitan shall meet to coordinate the agreement administration requirements. 7 Torrance & WRD -6- Agreement No. xxxxxx
4.2 After the start of Project operation, WRD shall invoice Metropolitan monthly for the LRP Contribution based upon Allowable Yield delivered during the previous month.
Metropolitan shall pay WRD for invoiced LRP Contribution by means of a credit included on the next monthly water service invoice issued to Torrance in accordance with Metropolitan’s Administrative Code.
4.3 Pursuant to Metropolitan’s Administrative Code, invoices for LRP Contribution must be received by Metropolitan before 3:30 p.m. on the third working day after the end of the month to receive credit for any preceding month on the next monthly water service invoices issued to Torrance. Metropolitan will not pay for any invoiced LRP Contribution received more than six months following the end of any month in which a credit is claimed, and the Recycled Water claimed in any such late invoice shall not be included in the Allowable Yield.
4.4 Metropolitan, Torrance, and WRD have entered into agreements for development of local water resources projects in addition to this Agreement. Each agreement contains specific terms and conditions to determine project yield, payment process, and project performance and any adjustments to contractual yield and incentive payments. Unless approved in writing by Metropolitan, these agreements are independent from each other and, therefore, the yield produced under one agreement shall not be used to fulfill the performance requirements under other agreements. These provisions shall also apply to all future incentive agreements between Metropolitan, Torrance, and WRD.
Section 5: Assessment Process
5.1 After the start of Project operation and by December 31 of each year, WRD shall provide Metropolitan with the records of Allowable Yield and Recovered Water for the previous Fiscal Year.
5.2 If assessment data is not submitted by December 31 in accordance with Section 5.1, Metropolitan will assess a late penalty charge to WRD as prescribed in Metropolitan’s Administration Code, as amended currently set at $2,500 in Section 4507. Metropolitan may suspend its payment of the LRP Contribution if WRD fails to provide production assessment data by the ensuing April 1. During the suspension period, WRD shall continue to invoice Metropolitan for the LRP Contribution based upon the Allowable Yield for water accounting purposes. Metropolitan will resume payment of the monthly LRP Contribution once complete data is received and the corresponding production assessment is complete pursuant to Section 5.3. In the event WRD fails to provide complete data by December 31 of the following Fiscal Year, which is 18 months after the end of the Fiscal Year for which an assessment is required, this Agreement shall automatically terminate without notice or action by any Party and WRD shall repay Metropolitan all LRP Contributions for which no assessment data was provided within 90 days of termination.
5.3 Within 180 days after Metropolitan receives complete data from WRD, pursuant to Section
5.1, Metropolitan shall complete the assessment process for the applicable Fiscal Year. An 8 Torrance & WRD -7- Agreement No. xxxxxx
adjustment shall be computed by Metropolitan for over- or under-payment for the Allowable Yield and included on the next invoice issued to Torrance.
Section 6: Record Keeping and Audit
6.1 WRD shall establish and maintain accounting records of Recovered Water and Allowable Yield data for each Fiscal Year of Project operation and retain records of that data based on the metering requirements in Section 3.4. In addition, WRD shall collect and retain records of the total annual amount of water conveyed outside of WRD’s service area using Project facilities. Accounting for the Project shall utilize generally accepted accounting practices and be consistent with the terms of this Agreement.
6.2 WRD shall establish and maintain accounting records of all grants and contributions that offset Project costs, as outlined in Section 1.4.
6.3 Metropolitan shall have the right to audit records of grants, Recovered Water, Allowable Yield, Project production, and other data relevant to the terms of this Agreement both during the Agreement term and for a period of three years following the termination of this Agreement. Metropolitan may elect to have such audits conducted by its staff or by others, including independent accountants, designated by Metropolitan. WRD shall make available for inspection to Metropolitan or its designee, upon 30 days advance notice, all requested records, books and other documents. Based on the results of the audit and adjustment for over- or under-payment for Allowable yield for each applicable Fiscal Year shall be paid by Metropolitan or WRD within one year of conclusion of audit.
6.4 WRD shall keep all Project records for at least ten consecutive years prior to each audit per Section 6. WRD shall maintain audited records for three years after the audit. WRD shall keep unaudited Project records for at least three years following the termination of this Agreement.
Section 7: Term and Amendments
7.1 The Agreement shall commence on the effective date of this Agreement and, except for the reconciliation and audit provisions, shall terminate 25 years after the date WRD notifies Metropolitan that the Project has begun operation, subject to provisions outlined in Exhibit B. The provisions regarding reconciliation and audit shall remain in effect until three years after termination of the other terms of this Agreement.
7.2 This Agreement may be amended at any time by the written mutual agreement executed by each of the Parties.
7.3 In addition to the termination provisions provided for in Section 5.2 and Exhibit B, Metropolitan may terminate this Agreement, upon thirty (30) day notice to WRD on the occurrence of one the following:
a. A material breach of this Agreement by any party other than Metropolitan provided that such other party shall have the opportunity to cure or commence to 9 Torrance & WRD -8- Agreement No. xxxxxx
cure such breach within thirty (30) days’ of written notice of the breach from Metropolitan to the breaching party; or
b. Metropolitan is not required to make payments to WRD pursuant to the terms of this Agreement for a five-consecutive year period subsequent to Project operation.
7.4 Each Party represents that it is represented by legal counsel, that it has reviewed this Agreement and agrees that this Agreement is legally enforceable.
Section 8: Hold Harmless and Liability
8.1 Except for the sole negligence or willful misconduct of Metropolitan, WRD agrees at its sole cost and expense to protect, indemnify, defend, and hold harmless Metropolitan and its Board of Directors, officers, representatives, agents and employees from and against any and all claims and liability of any kind (including, but not limited to, any claims or liability for injury or death to any person, damage to property, natural resources or the environment, or water quality problems) that arise out of or relate to: (a) WRD’s approval, construction, operation, repair or ownership of the Project, including any use, sale, exchange or distribution of Project water; or (b) acts or omissions related to the Project by any consultant or contractor of WRD. Such indemnity shall include all damages and losses related to any claim made, whether or not a court action is filed, and shall include attorney fees, administrative and overhead costs, engineering and consulting fees and all other costs related to or arising out of such claim of liability, but shall exclude damages and losses that arise from the sole negligence or willful misconduct of Metropolitan.
8.2 WRD shall include the following language in any agreement with any consultant or contractor retained to work on the Project:
“Except for the sole negligence or willful misconduct of Metropolitan, (Consultant) agrees at its sole cost and expense to protect, indemnify, defend, and hold harmless Metropolitan and its Board of Directors, officers, representatives, agents and employees from and against any and all claims and liability of any kind (including, but not limited to, any claims or liability for injury or death to any person, damage to property, natural resources or the environment, or water quality problems) that arise out of or relate to (Consultant’s) acts or omissions related to the Project. Such indemnity shall include all damages and losses related to any claim made, whether or not a court action is filed, and shall include attorney fees, administrative and overhead costs, engineering and consulting fees and all other costs related to or arising out of such claim of liability, but shall exclude damages and losses that arise from the sole negligence or willful misconduct of Metropolitan.” Section 9: Notice
Any notice, payment or instrument required or permitted to be given hereunder shall be deemed received upon personal delivery or 24 hours after deposit in any United States post-office, first- class postage prepaid and addressed to the Party for whom intended, with an email copy, as follows:
10 Torrance & WRD -9- Agreement No. xxxxxx
If to Metropolitan:
The Metropolitan Water District of Southern California
Post Office Box 54153
Los Angeles, California 90054-0153
Attention: Manager, Water Resource Management
Email: __________
If to Torrance:
City of Torrance
street number
city, CA zip code
Attention: ____________ (e.g. General Manager)
Email: __________
If to WRD:
The Water Replenishment District of Southern California street number
city, CA zip code
Attention: ____________ (e.g. Director of Public Utilities) Email: ___________
Any Party may change such address by notice given to each of the other Parties as provided in this section.
Section 10: Successors and Assigns
The benefits and obligations of this Agreement are specific to the Parties and are not assignable without the express written consent of Metropolitan. Any attempt to assign or delegate this Agreement or any of the obligations or benefits of this Agreement without the express written consent of Metropolitan shall be void and of no force or effect.
Section 11: Severability
The partial or total invalidity of one or more sections of this Agreement shall not affect the validity of this Agreement.
Section 12: No Third Party Beneficiary
This Agreement does not create, and shall not be construed to create any rights enforceable by any person, partnership, corporation, joint venture, limited liability company, or any other form of organization or association of any kind that is not a party to this Agreement. 11 Torrance & WRD -10- Agreement No. xxxxxx
Section 13: Integration
This Agreement comprises the entire integrated understanding between the Parties concerning the Project, and supersedes all prior negotiations, representations, or agreements.
Section 14: Governing Law
The law governing this Agreement shall be the laws of the State of California and the venue of any action brought hereunder shall be in Los Angeles County, California. All parties shall bear their own costs and attorneys' fees in the event of any such action.
Section 15: Non-Waiver
No delay or failure by any Party to exercise or enforce at any time any right or provision of this Agreement shall be considered a waiver thereof or of such Party’s right thereafter to exercise or enforce each and every right and provision of this Agreement. A waiver to be valid shall be in writing and need not be supported by consideration. No single waiver shall constitute a continuing or subsequent waiver.
Section 16: Joint Drafting
All parties have participated in the drafting of this Agreement and have been represented by counsel at all times. The rule of construction that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
Section 17: Entire Agreement
This writing contains the entire agreement of the Parties relating to the subject matter hereof; and the Parties have made no agreements, representations, or warranties either written or oral relating to the subject matter hereof which are not set forth herein. ///
///
///
///
///
///
///
///
///
///
12 Torrance & WRD -11- Agreement No. xxxxxx
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first hereinabove written.
APPROVED AS TO FORM: THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
Marcia L. Scully
General Counsel
Shivaji Deshmukh
General Manager
By: By:
Deputy General Counsel John Bednarski
Executive Officer and Assistant General
Manager
Date: _______________________
CITY OF TORRANCE
a municipal corporation
Sharon Kalani, Mayor
ATTEST:
Rebecca Poirier, MMC
City Clerk
APPROVED AS TO FORM:
PATRICK Q. SULLIVAN
City Attorney
By:
Jennifer Vicente Guerrero
Deputy City Attorney
Date: _______________________
13 Torrance & WRD -12- Agreement No. xxxxxx
By:
APPROVED AS TO FORM:
General Consul
By:
THE WATER REPLENISHMENT
DISTRICT OF SOUTHERN CALIFORNIA
Name
Title
Date:
14 Torrance & WRD -13- Agreement No. xxxxxx
EXHIBIT A
TORRANCE GROUNDWATER DESALTER EXPANSION PROJECT
Project Description
Overview
The Torrance Groundwater Desalter Expansion Project (“Project”) will be owned and operated by the Water Replenishment District of Southern California (WRD). The Project is located in the City of Torrance, California, within the West Coast Basin. The facility overlies a saline plume of contaminated groundwater and is designed to recover and treat this groundwater for beneficial use within the WRD service area.
The Project will provide up to 4,200 acre-feet per year (AFY) of recovered groundwater.
An existing Local Resources Program (LRP) agreement for the Robert W. Goldsworthy Desalter (“Desalter”) established a production capacity of 2,400 AFY; that agreement expired in June 2022. Following expiration, a first expansion of the Desalter was completed and is currently producing approximately 2,800 AFY of potable water. WRD and the City of Torrance did not seek LRP funding for the first expansion.
The Project constitutes the second expansion of the Desalter and will increase the facility’s total anticipated production capacity to approximately 7,000 AFY. Only the facilities constructed, and production generated under this second expansion shall be eligible under this Agreement.
Project Facilities
The Desalter currently treats approximately 2,800 AFY. The proposed Project will provide up to 4,200 AFY of recovered groundwater. The Project includes construction of:
Up to four new groundwater wells (SILV-01, SILV-02, SILV-03, SILV-04) and a connection to a fifth existing well (Brewer well).
Expansion of the existing Desalter treatment capacity with chemical pretreatment, automatic backwash strainers, two additional reverse osmosis (RO) trains, upgrades to chemical post-treatment, upsized treated clearwell, and RO process bypass flow chemical treatment.
North and South Raw Water Pipelines
Source of Water
Source water will be extracted brackish groundwater plume located in the West Coast Basin. 15 Torrance & WRD -14- Agreement No. xxxxxx
End Users
The treated product water from the Project will be purchased by the City of Torrance and blended in the potable water distribution system.
Points of Connection
Project facilities begin at the connection to four new wells and end at the following points of connection to:
Treatment plant outlet facilities
Sewer, storm drain, channel, and potable system interties 16 Torrance & WRD -15- Agreement No. xxxxxx
( Map is temporary. TO BE UPDATED )
17 Torrance & WRD -16- Agreement No. xxxxxx
EXHIBIT B
PERFORMANCE PROVISIONS
1. The following performance provisions apply:
a. Metropolitan will terminate this Agreement if construction has not commenced by July 1, 2029. Metropolitan will provide ninety (90) days’ advance written notice prior to the effective date of such termination. As opposed to Provision 1b below, there is no established appeal process for this outcome. b. Metropolitan will terminate this Agreement if Allowable Yield is not delivered by July 1, 2031. Metropolitan will provide ninety (90) days’ advance written notice prior to the effective date of such termination. The Project sponsor may appeal this decision to Metropolitan’s Board of Directors.
c. If the Allowable Yield during Fiscal Years 2030-2031 through 2033-2034 does not reach the target yield of 50% of the Ultimate Yield, then Metropolitan will reduce the Ultimate Yield by the target shortfall using the highest Allowable Yield produced in that four year period. For example, the Ultimate Yield of a project with the following performance will be revised from 7,000 AFY to 5,500 AFY for Scenario 1 while there would be no adjustment under Scenario 2:
Project Ultimate Yield = 7,000 AFY
Scenario 1 Scenario 2
Fiscal Year Allowable
Yield (AFY)
Allowable
Yield (AFY)
2030-2031 1,000 1,000
2031-2032 2,000 2,000
2032-2033 2,000 2,000
2033-2034 2,000 2,500
50% of the Ultimate Yield = 0.50 x 4,200 = 2,100 AFY.
Scenario 1: Shortfall = 2,100 – 2,000 = 100 AFY
Revised Ultimate Yield = 4,200 – 100 = 4,100 AFY
Scenario 2: Since, the Allowable Yield in the Fiscal Year 2033-2034 is greater than 2,100 AFY, no adjustment is required. Ultimate Yield remains at 4,200 AFY.
d. If the Allowable Yield during Fiscal Years 2034-2035 through 2037-2038 does not reach the target yield of 75 percent of the Ultimate Yield (or the Revised Ultimate Yield), then Metropolitan will reduce the Ultimate Yield (or the Revised Ultimate Yield) by the target shortfall using the highest Allowable Yield produced in that period. For Example, the Ultimate Yield of the project in this 18 Torrance & WRD -17- Agreement No. xxxxxx
example with the following performance will be reduced to 850 AFY for Scenario 1 and while there would be no adjustment under Scenario 2:
Scenario 1 Scenario 2
Fiscal Year Allowable
Yield (AFY)
Allowable
Yield (AFY)
2034-2035 3,000 4,000
2035-2036 3,500 4,000
2036-2037 4,000 4,500
2037-2038 4,000 4,500
Scenario 1: Revised Ultimate Yield = 4,100 AFY (see above calculations in 1c) 75% of Ultimate Yield = 0.75 x 4,100 = 3,075 AFY
Shortfall = 4,100 – 4,000 = 100 AFY
Revised Ultimate Yield = 4,100 – 100 = 4,000 AFY
Scenario 2: Ultimate Yield = 4,200 AFY
75% of ultimate Yield = 0.75 x 4,200= 3,150 AFY
Since, the Allowable Yield in the Fiscal Year 2036-2037 is greater than 4,200 AFY, no adjustment is required.
e. If the Allowable Yield during Fiscal Years 2038-2039 through 2055-2056 (and every four-year period thereafter) does not reach the target yield of 75 percent of the Ultimate Yield (or revised Ultimate Yield), then Metropolitan will reduce the Ultimate Yield (or the Revised Ultimate Yield) by the target shortfall using the highest Allowable Yield produced in that period. The adjustment will be made using the same methodology shown in the above examples. 19