Resolution No. 79731
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RESOLUTION NO. 7973
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
MEMORANDUM OF UNDERSTANDING REGARDING RECLAIMED
WATER AND AN AGREEMENT BETWEEN THE CITY OF VERNON
AND CENTRAL BASIN MUNICIPAL WATER DISTRICT
REGARDING THE BUYING AND SELLING OF RECYCLED WATER
WHEREAS, the City of Vernon (,,City") is proceeding at this
time to develop a 134 MW Combined Cycle Power Plant officially named
the Malburg Generating Station (the "Malburg Project") for the purpose
of installing additional generating capacity that will yield an
efficient, cost-effective, and reliable source of electric generation
to the City of Vernon; and
WHEREAS, City staff has determined that the cooling water
supply for the Malburg Project must be provided by reclaimed water that
will require the construction of a pipeline extension as well as a pump
station and associated pressure reducing facilities on the Central
(Basin Municipal Water District ("CBMWD") system; and
WHEREAS, the City and CBMWD have completed negotiation of an
Agreement for the provision of recycled water by CBMWD to the Malburg
Project; and
WHEREAS, the City and CBMWD have completed negotiating the
general parameters for future reclaimed water projects that might serve'
additional reclaimed water users in the future which will be
memorialized in a Memorandum of Understanding between the parties; and
WHEREAS, on May 21, 2002, the Finance Committee recommended
that the City Council approve the recommendation of Bruce V.
Malkenhorst, Director of Finance, dated May 16, 2002, that an
( 1 r _ • I � 1 Y i F f ' 1
1 Agreement and a Memorandum of Understanding be entered into with
2 CBMWD; and
3 WHEREAS, the City Council of the City of Vernon has
4 determined that, pursuant to the provisions of subsection (a) of
5 Section 2.27 of the Vernon City Code, it is in the public interest and
6 necessity to enter into an Agreement and Memorandum of Understanding
7 with CBMWD setting forth the terms and conditions for the
8 reimbursement of construction costs and the general parameters for
9 future reclaimed water projects to enhance services provided to the
10 Vernon community.
11 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
12 CITY OF VERNON AS FOLLOWS:
13 SECTION 1: The City Council of the City of Vernon hereby
14 finds and determines that the recitals contained hereinabove are true
15 and correct.
16 SECTION 2: The City Council of the City of Vernon hereby
17 approves the Agreement Between the City of Vernon and Central Basin
18 Municipal Water District Regarding the Buying and Selling of Recycled
19 Water in substantially the same form attached hereto as Exhibit "A
20 and made a part hereof.
21 SECTION 3 The City Council of the City of Vernon hereby
22 approves a Memorandum of Understanding with CBMWD in substantially the
23 same form attached hereto as Exhibit "B" and made a part hereof.
24 SECTION 3: The City Council of the City of Vernon hereby
25 authorizes the Mayor and the City Clerk to execute the Agreement and
26 Memorandum of Understanding for, and on behalf of, the City of Vernon.
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SECTION 4: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send the fully executed
duplicate originals of the Agreement and Memorandum of Understanding
to:
Central Basin Municipal Water District
Attn. General Manager
17140 S. Avalon Blvd., Ste. 210
Carson, CA 90746-1296
SECTION 5: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 22"d day of May, 2002.
ATTEST:
BRUCE V. MALKENHORST, City Clerk
LEONIS C. MAL8kJRG, Maybr
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STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
ss
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
7973, was duly adopted by the City Council of the City of Vernon at an
adjourned regular meeting of the City Council duly held on Wednesday,
May 22, 2002, and thereafter was duly signed by the Mayor of the City
of Vernon.
(SEAL)
BRUCE V. MALKENHORST, City Clerk
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EXHIBIT
MAY-22-2002-WED 01:34 PM OLIVO & PLASOENCIA
FAX NO. 562 869,1883
P. 01
AGREEMENT BETWEEN THE CITY OF VERNON
AM CENTRAL BASIN MUNICIPAL WATER DISTRICT
REGARDING THE BUYING AND SELLING
OF RECYCLED WATER
THIS AGREEMENT is madc, entered, into and executed in
duplicate originals, arty copy of which may be considered and used as
thc: original hereof for all purposes, as of this - day of May,
2002, in the CiLy of Vernon, County of Los Angeles, California
BY AND BETWEEN THE CITY OF VERNON, a municipal
corporation (hereinafter
referred to as "CITY"),
4305 Santa Fe Avenue
Vernon, CA 90058
AND CENTRAL BASIN MUNICIPAL WATER
DISTRICT (hereinafter
referred to as "DISTRICT"),
17140 S. Avalon Blvd., Ste. 210
Carson, CA 90746-1296
1. RECITALS.
CITY and DISTRICT enter into this Agreement (hereinafter
ref:err_od to a8 the "Agreement") in recognition of, and concurrence in,
the following:
A. CITY owns and operates its own electric and water
disLrJbutiort systems providing electricity and water to all its
costorrLars, with the exception of certain water customers located within.
CITY which are served by the California Water service Company or
Maywood Mutual Water Company.
B. CITY is proposing to build the Malburg Generating Station
Fx:ojoc:t (tho "PROJECT"), an electrical generation facility located at
2715 )0th Street in CITY. The Project will require a firm water
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MAY-22-2002.WED 01,:35 PM OLIVO & PLASCENCIA FAX NO. 562 869 1883 02
Supply of approximatcly 1,500 acre-feet Per year for use in its cooling
tower.,5 by the Project's planned in-service date of fall of 2003.
C. CITY has elected to utilize approximately 1,500 acre-feet
per year of recycled water for the Project in lieu of potable water to
conserve potable water and, in addition, to investigato the potential
use of recycled water by its water customers.
D. DISTRICT owns and ope.tatcs a recycled water distribution
system adjacent to CIA.'Y and intends to have recycled water available to
moot the. CITY'S anticipated Project recycled water needs. DISTRICT has
iiidirzaLed by letter dated November 19, 2001, that it can, with
-improvemunts to its distribution system, provide 1,500 acre-feet of
recycled water annually to the Project.
E. To provide recycled water to the Project, certain
facilities must be constructed. The facilities include approximately
miles of pipeliric from the interscct-lori of Randolph and Newoll
Street in the City of Huntington Park to the Project sate, a booster
p42rnp station and pressure reduction facilities on DISTRICT'S existing
recycled water distribution system. A drawing indicating the route of
the extension of DUTRICTIS existing recycled water 18-inch diameter
pipeline to thE: Project site is attached hereto as Fxhibit "A" and made
a part Hereof as though fully scut forth at length.
F. Under this Agreement, 'the parties Will cooperate to
conserve potable water supplies by providing recycled water to the
Project.
FORTH
NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS SET
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MAY72.2-2002� WED 01: 35 PM OL I VO & PLASCENC I A y. 'FAX NO. 562 869 1883 . , P. 03
DEFINITIONS.
A. CAPITAL COSTS shall mean the costs incurred to design and
construct a facility;
3. 7.OTAL, CAPITAL EXPENDED (TCE) shall mean the total Capital
COSTS incurred by CITY related to the facilities
necessary to provide recycled water to the PROJECT as
dcsc:ribed in Sections 3.B. and 3.C, of this Agreement;
C. NET CAPITAL EXPENDED (NCE) shall mean the TOTAL CAPITAL
RXPENDED logs grant Rinds DISTRICT receives from the
United States Bureau of Reclamation that shall be
forwarded to CITY;
D. POTENTIAL ANNUAL CAPITAL CREDIT EARNED (PACCE) is the
annual amount of payment of the NET CAPITAL EXPENDED
amortized at five and orle-eighth percent, (5-1/8%) ovor a
touitcen (14) year period;
Pl, POTEN'VIAL MONTHLY CAPITAL CREDIT EARNED (PMCCE) is the
POTENTIAL ANNUAL CAPITAL CREDIT EARNED divided by twelve
(12);
F. MONTHLY RECYCLED WATER CONSUMPTION (MRWC) shall mean the
amount of recycled water consumed by the PROJECT monL•hl.y,
as read by the CITY at its recycled water meter;
G. CAPITAL CRF;DIT PER ACRE-FOOT (CCPAF) is the POTENTIAL
MONTHLY CAPITAL CREDIT EARNED divided by MONTHLY RECYCLED
WATER CONSUMPTION and shall not exceed two -hundred
dollars ($200) per acre—foot;
H. ACTUAL MONTHLY CAPITAL CREDIT EARNED (AMCCF,) , ca.lQulated
each month, is the MRwC multiplied by CCPRF;
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. FAX
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869 1883 .P, 04
1. TOTAL CAPITAL CREDIT
EARNED
(TCCE)
shall mean the
curnul.ative} total of AMCCE starting from the: initiation of
recycled water service to PROJECT;
J. REMAIN;ING NET `1'O`1'AL CAPITAL CREDIT OWED (RNTCCO) iS TCCO
minus TCCE; and
K. RECYCLED WATER shall mean wastewater treated to
disinfected tc�rtia,ry recycled water that meets California
Cade of Regulations Title 22 standards.
L. TOTAL CAPITAL CREDIT OWED (TCCO) is the PACCE multiplied
by J. 4 .
3. CITY'S DUTIES AND OBLIGATIONS.
CITY shall be responsible for performing the following:
A. Purchase recycled water for the PROJECT from IISTRICT and
pay :for said recycled water at DISTRICT'S prevailing wholesale recycled
water =Truaodity raLos, as established by DISTRICT, less the Capital
Credit Per Acre-foot to be provided by DISTRICT. If DISTRICT
establiLshes a wholesale recycled water commodity rate for any cu-S omen
tkjat is lest} than (.1j "Y' S rate, CITY shall pay the lesser rate. CITY.
anti,ri.pate.y that tho amount of recycled water that will be purchased
for the: PROJECT will be up to approximately 1,500 acre-feet: per year.
I'he acL.ual amount Purchased by CITY will depend upon the operation of
the the PROJECT;
13, Dosi.gxx, construct, own, operate, and maintain thc:
recycled water distribution systein within CITY wafer department
bok3lxdaric:s as shown onx}yibit A and in compliance with applicable:
$LaL-c guidelines;
c,. Design and construct a recycled water distribution
pipeline extension as shown on Exhibit "A", a booster pump station and
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MAY-22-2002.WED 01:35 PM OLIVO & PLASCENCIA FAX N0, 562 869 1883 1 P. 05
the: pressure reducing facilities that are outside of CITY water_
department's service area in compliance with applicable State
guidelines;
D, Provide DISTRIC".V Frith plans and specifications for design
of pipeline cxtension, booster pump station and tide pressure reducing
fEloi.l. i.ties for DISTRICT review and approval;
E. Pay for power at the booster pump station identified in
Socl:i.on 3.C, until the construction and operation of ,DISTRICT'S
potential recycled water pipeline from the City of Pico Rivera connects
to Lhe pipeline in CITY identified in Section 3.C., also ,referred to as
Lhe Montebello I"oop.
F. Connect CITY'S recycled wager pipeline extension from the
PROJECT sate to DISTRICT'S existing recycled water distribution system
at (-.he intersection of Randolph Street and Newell Street (hereinafter
11 voint:,--of-Connection") ;
G. Instal], a recycled water meter at the PROJECT site at
CITY's cost;
Fi. On a monthly basisf read the recycled water metier sorving
Lhe PRoJMT and provide the reading to DISTRICT by the 21st calendar
clay of the: month following service;
I. CITY may, wi.th DISTRICT approval, add non potable water
into the recycled water distribution system as long as it: (1) does not
negatively impact any recycled water customer downstream of the point
of addition; (2) dads not ricgatively impact water quality so as to
rc.ciuce its commodity value, (3) does not diminish DISTRICT'S rights to
r-ecyclQd water pressure, flow rate or volume; (4) does not cause
additional operation and maintenance costs for DISTRICT.' and; (5) is
appr,ovod by the appropriate regulatory agencies;
MAY-22-2002-WED 01:36 PM OLIVO & PLASCENCIA -FAX NO. 562 869 1883 P. 06
J. Coml.71y with all provisions of the California Regional,
Wator Quality Control Board (RWQCB) Order No. 87-50 and order No. 87-51.
(hereinafter "Orders") and their successors issued to the County
Sanitation District of Los Angeles County, Title 1.7 and 22 of the
Ca]ifEomia Code of Regulations, and regulations of the State: of
California Department of Health Services regarding recycled water;
K. Perform annual visual, inspections and periodic cross -
connection tests at the PROJECT site and provide documentation to
DIS`!.'RICT when requested;
L. Requi-ce PROJECT "on -site supervisors" to sign a document
sim:i.lar to DISTRICT'S "Conditions for the Introduction and Use of
Recycled Water" thereby acknowledging the conditions under which
re,oycled water may be used at the site;
M. Provide a copy of the latest RWQC8 orders to the 'PROJECT
can --site . supervisor as requirod in the orders;
N. Invite DISTRICT to attend meetings regarding design, pre -
bid, award, and construction managomcnt related to work described in
Scc;Lion s 3.13. and 3.C.
o. Sul3ject to approval of the Vernon City Council, provide
letters of support for DISTRICT'S pursuit of additional grant funding
for projects in DISTRICT'S service area.
4. DISTRIC`7'DUTIES AND OBLIGATIONS.
DISTRICT agrees to perform the following:
A. Seal recycled water to CITY at its prevailing wholesale
coirmiodi.ty rates less the Capital Crodit Per Acre --Foot;
D. Operate and maintain its recycled water distribution
systern (not including facilities within CITY Water Department's servico
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MAY-22-2002,WED 01,:36 PM OLIVO & PLASCENCIA
-FAX NO. 562 869 1883
P; 07
area) to provide approximately 1,500 acre --feet per year of recycled
water to the PROJECT;
C. Provide recycled water, except during circumstances
heyond its control, to CITY at the PROJECT site to meet a peak demand
of: one -thousand (11000) gallons per minute and at a minimum of thirty
(30) pounds per square inch. The normal flow is expecLea Lo u� J,LUi«
eight -hundred (800) to nine -hundred (900) gallons per minute. The
actual flow will depend upon the operation of the PROJECT;
D. Provide a Capital Credit Per Acre -Foot of recycled water,
used at 11ROJECT to CITY to repay CITY its capital, costs, plus interest,
to design and r.onsLruct the facilities described in Sections 3.2. and
3.C. that reflects C)ISTRICT'S avoided capital costs of providing
rccycl.ed water to the Project. The Total, Capital. Credit Owed (TCCO) by
DISTRICT to CITY shall. ba equal L-o the Net Capital Expended amortized
at an annual rate of five and one --eighth percent (5 c) over fourteen
(14) years;
E. Forward federal grant funds received for the Project to
CITY to reduce C.ITYFS Total Capital Expended. Federal grant funds
shall be equal, to twenty --five percent (25%) of the Total Capital
F,xperided by CITY in accordance with Grant Agreement No. 1425--4--FG-30-
00210 between DI35'RICT and tho United States Bureau of Reclamation;
F. Provide inspection personnel to monitor construction of
the facilities described in Sections 3.D. and 3.C. and provide
comments, in writing, to CITY'S ropresentative;
G. Revicw and approve plans and specifications for the
dosign of the pipeline exLension, booster pump station and pressure
reducing .Ej1ci1 i.t.i.es outside the CITY Water Department Service area.
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MAY-22-2002•WED 01:36 PM OLIVO & PLASCENCIA ; FAX NO. 562 869 1883 P., 08
I.i. Provide the AMCCE to CITY until CITY receives an amount
egtjal to the Total. Capital Credit Owcd as defined in Section 2 of this
Ag r o emen't ;
I. Invoice CITY monthly in the following itemized fashion:
I., Coirutodity Charges;
2, Power Charges for New Booster Pump Station;
3. Capital Credit; and
4. Cumulative Capital Credit.
J. Assist CITY with regulatory approvals from the State of
California Department of Health Services;
K. Provide CITY with copies of DISTRICT'S Recycled Water
Customer Guide that explains the roles and responsibilities of the
recycled water customer with regard to the use of recycled water; and
L. Support CITY'S application to the California Energy
Commission (hereinafter "CEC") for the proposed Project by providing
exhibits, analyses and documents, when requested by CITY or CEC.
Drafts of exhibits, analyses and documents, if any, will be provided by
DISTRICT to CITY for zeview prior to submittal to C;r,C.
5. I:NVOICING PROCESS.
CITY and DISTRICT agree to use the following process to
dotermine CITY's MoriL•hly Commodity Charges, Monthly Power Charge,
Monthly Capital Credit Larned and Total Capital Credit Account Balance:
A. Corm-aodity Charge
1. Detcrm:i.ne the MRWC by reading the meter located at
the Project site to identify amount of recycled
water taken during the previous month;
2. Multiply the MRWC, by DISTRICT'S prevailing
wholesale recycled water commodity rates;
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MAY-22-2002• WED 0.1; 36 PM OL I VO & PLASCENC I A -FAX N0, 562 869 1883 P,..09
B. Power Charge
1. DISTRICT shall invoice CITY for the power to operato
the booster pump station identified in Section 3.C.
until -the conditions in Section 3,E. of this Agreement
are met. DISTRICT shall. invoice CITY the amount
invoiced from Southern California Edison (SCE) without
mark-up, DISTRICT shall include: a copy of the SCE
invoice wa.th DISTRICT'S invoice to CITY.
C. Capital Credit Earned
1. Calculate the PACCE by amortizing the NCE at five and
one -eighth per-c:cnt (5-118%) over fourteen (14) years;
2. Calculate the PMCCE by dividing PACCE by twelve (12)J
3. Calculate the CCPAF by dividing tho PMC:CE by the MRWC.
If C:CPAF is less than or equal to $200, use the
calculated amount in subsequent calculations. If
CCPAF is greater than $200, use $200 in subsequent
calculations; and
4. Calculatc the AMCCE by multiplying the C:CPAF by the
MRWC.
D. Remairiing Net Capital Credit Owed
1. On each monthly invoice, DISTRICT will track the `1'CCO,
AMCCE and TCCE. TCCO minus the TCCE is the Remaining
Net Capita. Credit Owed Lo CITY. When the remaining
Net Capital Owed reaches zero, the CITY has ,recovered
its capital investmcrit, plus interest, and DISTRICT
will stop providing CITY with the capital credit..
Fxhibit "B" contains an illustration for calculating
the above amounts-
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6. FUTURE RATE INCREASE.
The toL•al increase from year to year for DISTRICT'S wholesale recycled
water commodity rate: charged to CITY shall not, in any case, exceed
three: percent (3%) in any one fiscal year.
7. IJYDRAULIC: CALCULATIONS.
The parties shall use five point zero (5.0) feet peer second
and a roughnoss roeMcient of one -hundred and thirty (130) as the:
standards for calculating flow capacity of the recycled water
di. cL-ribution system.
f3. ANNUAL RECONCILIATION.
CITY and DISTRICT shall meet annually to review recycled
water: deliveries and other matters of mutual interest.
9, `PERM.
The: term of this agreement shall be thirty (30) years. CITY
shall hnvn an automatic right to extend the agreement under the same
terms and conditions for another ton (10) years. Such option shall be
exercised hofore the ;sixtieth (60") day prior to the expiration of the
initial tor:m
10. ATTORNEYS' FEES -
If any action is instituted to enforce this Agreement, 'the
provail.:i.ng party shall be reimbursed all reasonable attorneys' fees,
costs of collection, as well as any other costs and ,expenses incurred
in conoacti_on with the enforcement effort.
11. NOTIC.ES,
A. Notices given pursuant to the provisions of this
Agreement, or necet;sar.y to carry out its provisions, shall be in
writing and del..iverE3d either, (1) personally to the person to whom the
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MAY-22-2002• WIND 01; 37 PM OL I VO & PLASCENC I A . FAX NO. 562 869 1883
notice, is to be given; or (2) faxed and mai:l,ed to such person.
Addresses of I)I:STRZCT and CITY for this purpose shall be:
Central Basin: CENTRAL BASIN MUNICIPAL WATER DISTRICT
ATTN: GENERAI, MANAGER
17140 SOU`1:I[ AVALON BOULEVARD, SUITE 210
CARSON, CA 90746-1296
- with a copy to:
I,EaMIEUX & O' NEILL
2$93 TOWNSGATE ROAD, SUITE 201
WES'I'LAKE VILLAt;E, CA 91361
Ci Ly of Vornon : THE CITY OF VERNON
ATTN : flRUCE V , MALKENHORST
CI'r'Y ADMINISTRATOR
4305 SA'NTA FE AVENUE
VERNON, CA 90058-0805
1.2.. SEVERABI1' ITY.
If any portion of Lhis Agroement shall be held by a court of
competont jurisdiction to be invalid, void, or otherwise unenforceable,
the: ro-inai.ning provisions shall remain enforceable to the fullest extent
permitted by law. furthermore, to the fullest extent possible, the
provisions of thi.e; Agreement, (including, without limitation, each
portion of Lhi„s Agreement containing any provision held to be invalid,
void or otherwise unenforceable, that is not itself invalid, void or
enfor,r.eablo) shall be construed so as to give effect to the intent
mana.f��.yi �ti by the: provision head invalid, void, or unenforceable'.
13. GOVERNING LAW.
The validity, interpretation and performance of this
Agreement shall be controlled and construed under the laws of the StaLe
of Cnlii:ornia as enacted and in force at the time this Agreemont is
.fully executed.
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ENTIRE AGREEMENT,
This Agreement supersedcs any and all. other agreements,
either oral or in writing, between the parties hereto with respect to
tltc subject hereof and contains all of the covenants and agreements
bcLween tho parties with respect to said matter. Each party to this
Agreemont acknowledges that any representations, inducemerit.;, promises,
statements or agreements, orally or otherwise, that have been made by
any party, or anyone acting on behalf of any party, which are not
contained in this Agreement shall_ not be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing ;;iy icd by the party to be charged.
l.`,. Tndemnification.
A. DISTRIC;`3.' shall indemnify, defend, protect and hold CITY
and its officers, agents and employees free and harmless from and
against arty and all claims, demands, losses, damages, liabilities,
fines, charges, penalties, orders, judgments and all. casts and expenses
incurred in connection therewith, including reasonable attorney's fees
and costs of defense arising out of the negligent acts by DISTRICT, its
contractors or agents, in the performance of this Agreement, except to
the: ExtenL. arising From or caused by the negligence or willful
misconduct of CITY, its officers, agents or employees.
B. C.I.'rY shall indemnify, defend, protect and hold DISTRICT
and its officers, agents and employees free and harmless from and
against any and all. claims, demands, losses, damages, liabilities,
fine,, charges, ponaltiews, orders, judgments and all, costs and expenses
incurred in connection therewith, including reasonable attorney's fees
and costs of defenses arising out of the negligent acts by CITY, its
conLractrors or agents, in the performance of this Agreement, except to
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the extacit ar t.9ing from or caused by the negligence or willful
misconduct of DISTRICT, its officers, agents or employees.
J.6. Assignment. and Subcontracting Prohibited.
No party to this Agreement, may assign or subcontract any
right or obligation pursuant to this Agreement except with the express
written consent of the other party. Any other attempted or purported
assignment of any right or obligation pursuant to this Agreement shall
be void and of no affect.
17. Amendments.
This Agreement may be modi„ficd or amended only by a written
document properly executed by both DISTRICT and CITY.
10. Benefit of Agreement.
Thiss Agreement shall bind and benefit the parties hereto and
their heirs, successors, and permitted assigns.
1.3. Forum Selection,
Any action brought relating to this Agreement shall be
b,roughL and held exclusively i n a State Court in the County of Los
Angeles, California.
20. Roc;itaI5 -
All recitals are incorporated by reference.
21. Waiver,
Any waiver at any time by either party of its ra,ghts with
respect to a default under this Agreement, or with respect to any other
matt.e:.rs arising in connection with -this Agreement, shall not be deemed
a waiver with respect to subsequent default or other matter..
22. Force, Maj_eure .
Ne;iLhea. Party shall, be considered in to be in default in any
of i.ts obligations under this Agreement when a failure of performance
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NO.
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--hall be duc to an uncontrollable
force.
The
term
"uncontrollable
force" shall mean any cause beyond the control of the party affected,
including, but noL restricted to, flood, earthquake, storm, fire,
lightening, epideraic, war, riot, civil disturbance or disobedience,
sabotage, or erd)argo(;,s of the UriiLud States Government or any other
government, which by exerciso of due diligence such party could not
reasonably have been expected to avoid and by exercise of due diligence
has- been unable to overcome. Either party rendered -unable to fulfill
,)ray of its obligations under this Agreement by reason of an
uncontrollable forcer shall give writLen notice within five business
days Of Such faCt tn the other party and shall, exercise due diligence
to remove such inability with all reasonable dispatch.
IN WITNESS WHEREOF, the parties to this Agreement have
cxccuted this Agreement by Lheir duly authorized officers effective as
of the day and year first above written.
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CITY OF VERNON
BY
LEONIS C. MALBURG, Mayor
ATTEST:
BY:
Q
,_..—___....,-..._.RST._, _ Cj.tY Clc:_-._..w,�k-
T�I�C,JC�; V. I�iA;C�E�'LrNi•I,
APPRC7VED AS TO FORM;
BY:
1-1156 IR o OLI VO,4ACity Attorney
CENTRAL BASIN MUNICIPAL WATER
DISTRICT
BY
,DARRYL G. MILLER, general Manager
DISTRTCT' S LEGAL COUNSEL
By: _ _ _
.�'i'EVE,N O' NEILL,-fe.mieux & O'Neill
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EXHIBIT A
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EXISTI
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........ . ....... ... .............
...... IT
fZ.... ...... ...... .....
=_`0R0P0SEDj' I
RECWMED�
CATER PIPE .......
(12 inch Diame
CITY VtRN
... ..... PR POSED—
.......... ................. W
. ........... ....•.... .... ...... ... RE LAIMED ,
WATER PIPELI: 5
U
--J. (18 i ich Diameter.1 I
.. . . ........ .............. . . . ........
PELGRAVEAVE
......... ....... Ix
.. ... . ... .• ......
Fill ...............EE
jh
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LEGEND
MALBURG GENERATING STATION PROJECT BOUNDARY
STREETS
.. ...... RAILROAD PAR -SONS
CITY BOUNDARY I
01 10W 2000' 4000' Figure 7.34
Reclaimed Water Pipelir
SCALE IN FEET Malburg Generating Stal
Vernon, California
MAY722-2002 WED 01:38 PM OLIVO & PLASCENCIA FAX NO, 562 869 1883 ,P. •16
EXHIBIT B
The following sample illustrates L-he methodology that
DISTRICT will use to doLermine tho amount of capital credit CITY sha.l.l.
receive;
Total Capital Expended JCE) - $3, 500, 000 (assumed)
Net Capital. Expended (NCE) - TCE x 75% _ $2, 625, 000
Potential Annual Capital Credit Earned (PACCE) = the annual.
payment of the NCE amortized at 5T1./0 o for 14 years = $267, 312
Potential Monthly Capital Credit Earned (PMCCE) = PACCE/12
$2 2, 2.76
Monthly Recycled Water Consumed (MRWC) = 100 acre-feet
Capital Credit Per Acrc -Foot (CCPAY) = PMCCE/MRWC m
$22, 276/1.00 = $222 .16. If CCPAF > $200, use $200 in subsequent
calculalions.
Actual Monthly Capital. Credit }yarned (AMCCE) = MRWC x CCPAF -
1.00 a $200 -- $200000.
Total Capital Credit Owed (TCCO) = NCE amortized at 5--1/8% for
14 years times 14 years = $3, 742, 361
Remaining Net Total Capital Credit Owed (RNTCCO) = TCCO
AMCCE = $3, 742, 361 -- $20, 000 = $3, 722, 361. The RTCCO will become the
`!'C:CO in ti c. subsequent invoice.
B -- l
EXHIBIT
0
MAY-22-2002 WED 12:35 PM OLIVO & PLASCENCIA FAX NO, 562 869 1883 ,P..01
e
Memorandum of Understanding
Between
tho City of Vernon and Central Basin Municipal Water District Regarding
the Devolopment of Recycled Water Customers in the City of Vernon Water
Department's Service Area
Purpose
This Memorandum of Understanding ("MOU") is entered into as of the
day of May, 2002, between the City of Vernon (hereinafter, "CITY") and the
Central Basin Municipal Water District (hereinafter, "CBMWD") and is intended to
clarify the roles of the CITY and CBMWD regarding their joint effort to explore the
use of recycled water by businesses and industries in the CITY Water
Department's service area. Generally, this effort includes locating potential
customers, determining the potential recycled water at the site, assessing the
retrofit costs and obtaining commitments from potential "end users." This effort
has been divided into two phases to reflect the timeline associated with the
customer development effort and its relationship to the design and construction
of the recycled water pipelines into CITY.
MAY-22-2002 WED 12:35 PM OLIVO & PLASCENCIA, FAX NO. 562 869 1883 ,P,,02
Phase One
Phase One is the joint effort to locate and assess potential recycled water
customers in and around the proposed recycled water pipeline from the existing
pipeline in the City of Huntington Park to the proposed Malburg Generating
Station located near the intersection of 50ffi Street and Seville Avenue in CITY.
Such efforts shall not, in any way, jeopardize or impact the supply of reclaimed
water to be supplied by CBMWD to CITY for the Malburg Generating Station
Project.
Vernon will:
I.A. Establish appropriate recycled water rates and charges in order to
provide an incentive for potential recycled water customers to use
recycled water. .B. Consider the adoption of an ordinance
or resolution to encourage potential recycled water customers to
use recycled water;
I.C. Identify CITY'S representative for all matters relating to recycled
water including providing information and attending meetings with
potential customers,
I.D. Provide potable water consumption histories for customers that
purchase at least ten (10) acre-feet per year (AFY) of CITY'S
MAY-22-2002 WED 12:36 PM OLIVO & PLABCENCIA
FAX NO. 562 869 1883 P. , 03
potable water, Those potential customers shall be generally south
of 50t" Street; and
11. Allow CBMWD the ability to meet with potential customers identified
in Item IR to assoss the customers' interest and economic viability
for all parties. CBMWD shall invite the CITY representative to all
meetings with potential customers..
CBMWD and/or its _designees will:
IS. Use the data provided by CITY and its experience in customer
development, to determine which potential customers identified in
Item I.E. are worth pursuing;
I.G. Arrange for meetings between CITY, the potential customers and
CBMWD to introduce the potential customer to recycled water,
perform initial site assessments, and assessthe economic viability
of serving recycled water to the sites;
I.H. Pursue "Letters of Commitment", after providing CITY with the
opportunity to review and comment on the "Letters of Commitment",
from interested recycled water customers. The commitments may
impact the size of the future recycled water pipeline from the City of
Huntington Park to the Malburg Generating Station, but shall in no
way interrupt, interefere with or delay the supply of recycled water
MAY-22-2002 WED 12 : 36 PM OL I VO & PLASCENC I A FAX NO, 562 869 1883 P, , 04
to be supplied by CBMWD to CITY for the Malburg Generation
Station; and
I.I. Not atternpt to enforce the requirements of CBMWD Resolution No.
4-01-633 which requires customers in CITY Water department's
service area to use recycled water and which imposes a fifty -
percent (50%) surcharge on potable water consumption if potential
recycled water customers elect not to use recycled water.I.J. CITY
may waive subsection 1.1 above on a case -by -case basis. Such
waiver by CITY must be provided in writing to CBMWD prior to its
enforcement of Resolution No, 401-633.
Phase Two
Phase Two is the joint effort to locate and assess potential recycled water
customers in the CITY Water Department service area other than those identified
in Phase One that would generally be served by potential recycled water
pipelines from Bast Los Angeles. The exact pipeline size and alignment will be
established based on recycled water use, customer interest, economic viability
for CITY and CBMWD, ease and cost of construction as well as other factors.
Vernon will:
iI.A. Provide potable water consumption histories for customers that
purchase at least ten (10) acre-feet per year (AFY) of CITY'S
MAY-22-2002 WED 12:36 PM OLIVO & PLASCENCIA . FAX NO. 562 869 1883 .P.,O5
Potable water. Those potential customers shall be within the CITY
Water Department's service area generally north of 501h Street;
II.B. Allow CBMWD and/or its designees the ability to meet with
potential customers identified in Item II.A. to assess the customers'
interest and economic viability for all parties. CBMWD shall invite
the CITY representative to all meetings with potential customers;
II.C. Design and construct the recycled water pipeline(s) necessary to
provide recycled water to the CITY Water Department's recycled
water customers in sufficient quantity and pressure to meet the
needs of customers that have signed "Letters of Commitment. The
CBMWD will reimburse CITY for all costs, plus interest, incurred in
connection with such design and construction. Such
reimbursement shall be offset by any federal or state grants that
are made available to City to cover such costs;" and
II.D. Review and approve the design and construction of recycled water
improvements in the CITY, including improvements in California
Water Service Company's or Maywood Mutual Water Company's
service areas.
CBMWD and/or its deli nees wild;
MAY-22-2002 WED 12:36 PM OLIVO & PLASCENCIA, FAX NO, 562 869 1883 P.,06
II.C. Use the data provided by CITY and its experience in customer
development, to determine which potential customers identified in
Item II.A. are worth pursuing;
ll,F. Arrange for meeting between CITY, the potential customers, and
CBMWD or its designee to introduce the potential customers to
recycled water, perform initial site assessments, and determine the
economic viability of serving recycled water to the sites;
II.G. Pursue "Letters of Commitment", after providing CITY with the
opportunity to review and comment on the "Letters of Commitment",
from interested recycled water customers;
II.H. Not attempt to enforce the requirements of CBMWD Resolution No.
4-01-633 which requires customers in CITY Water Department's
service area to use recycled water and which imposes a fifty -
percent (50%) surcharge on potable water consumption if potential
recycled water customers elect not to use recycled water,
11.1, The CITY may waive subsection II.M, above on a case -by -case
basis, ;such waiver by CITY must be provided in writing to CBMWD
prior to District's enforcement of Resolution No. 4-01-633.
11,J. Design and construct the recycled water pipeline(s) necessary to
provide recycled water to the CITY Water Department's service
boundary in sufficient quantity and pressure to meet the needs of
customers that have signed "Letters of Commitment."
MAY-22=20&2 WED 12:36 PM OLIVO & PLASCENCIA . FAX NO. 562 869 1883 P,,07
.
In witness whereof, the parties hereto have caused this MOU to be executed the
date first written above.
CITY OF VERNON
I_conis Malburg, Mayor
Attest:
Bruce V. Malkenhorst,
City Clerk
Approve as to farm:
Edwrdo Oliva,
City Attorney
CENTRAL BASIN MUNICIPAL WATER DISTRICT
Darryl G. Miller, General Manager
SUPPORTING
DOCUMENTS
S�
AGREEMENT BETWEEN THE CITY OF VERNON
AND CENTRAL BASIN MUNICIPAL WATER DISTRICT
REGARDING THE BUYING AND SELLING
OF RECYCLED WATER
THIS AGREEMENT is made, entered into and executed in
duplicate originals, any copy of which may be considered and used as
the` original hereof for all purposes, as of this /6�day of -86-p,
2002, in the City of Vernon, County of Los Angeles, California
THE CITY OF VERNON, a municipal
corporation (hereinafter
referred to as "CITY"),
4305 Santa Fe Avenue
Vernon, CA 90058
CENTRAL BASIN MUNICIPAL WATER
DISTRICT (hereinafter
referred to as "DISTRICT"),
17140 S. Avalon Blvd., Ste. 210
Carson, CA 90746-1296
1. RECITALS_
CITY and DISTRICT enter into chic Agreement (hereinafter
referred to as the "Agreement") in recognition of, and concurrence in,
the following:
A. CITY owns and operates its own electric and water
distribution systems providing electricity and water to all its
customers, with the exception of certain water customers located within
CITY which are served by the California. Water Service Company or
Maywood Mutual Water Company.
B. CITY is proposing to build the Malburg Generating Station
Project (the "PROJECT"), an electrical generation facility located at
2715 East 50th Street in CITY. The Project will require a firm water
- 1 -
4
supply of approximately 1,500 acre-feet per year for use in its cooling
towers by the Project's planned in-service date of fall of 2003.
C. CITY has elected to utilize approximately 1,500 acre-feet
per year of recycled water for the Project in lieu of potable water to
conserve potable water and, in addition, to investigate the potential
use of recycled water by its water customers.
D. DISTRICT owns and operates a recycled water distribution
system adjacent to CITY and intends to have recycled water available to
meet the CITY'S anticipated Project recycled water needs. DISTRICT has
indicated by letter dated November 19, 2001, that it can, with
improvements to its distribution system, provide 1,500 acre-feet of
recycled water annually to the Project.
E. To provide recycled water to the Project, certain
facilities must be constructed. The facilities include approximately
1.8 miles of pipeline from the intersection of Randolph and Newell
Street in the City of Huntington Park to the Project site, a booster
pump station and pressure reduction facilities on DISTRICT'S existing
recycled water distribution system. A drawing indicating the route of
the extension of DISTRICT'S existing recycled water 18-inch diameter
pipeline to the Project site is attached hereto as Exhibit "A" and made
a part hereof as though fully set forth at length.
F. Under this Agreement, the parties will cooperate to
conserve potable water supplies by providing recycled water to the
Project.
NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS SET
FORTH HEREIN:
2 -
2. DEFINITIONS.
A. CAPITAL COSTS shall mean the costs incurred to design and
construct a facility;
B. TOTAL CAPITAL EXPENDED (TCE) shall mean the total Capital
COSTS incurred by CITY related to the facilities
necessary to provide recycled water to the PROJECT as
described in Sections 3.B. and 3.C. of this Agreement;
C. NET CAPITAL EXPENDED (NCE) shall mean the TOTAL CAPITAL
EXPENDED less grant funds DISTRICT receives from the
United States Bureau of Reclamation that shall be
forwarded to CITY;
D. POTENTIAL ANNUAL CAPITAL CREDIT EARNED (PACCE) is the
annual amount of payment of the NET CAPITAL EXPENDED
amortized at five and one -eighth percent (5-1/8%) over a
fourteen (14) year period;
E. POTENTIAL MONTHLY CAPITAL CREDIT EARNED (PMCCE) is the
POTENTIAL ANNUAL CAPITAL CREDIT EARNED divided by twelve
(12);
F. MONTHLY RECYCLED WATER CONSUMPTION (MRWC) shall mean the
amount of recycled water consumed by the PROJECT monthly,
as read by the CITY at its recycled water meter;
G. CAPITAL CREDIT PER ACRE-FOOT (CCPAF) is the POTENTIAL
MONTHLY CAPITAL CREDIT EARNED divided by MONTHLY RECYCLED
WATER CONSUMPTION and shall not exceed two -hundred
dollars ($200) per acre-foot;
H. ACTUAL MONTHLY CAPITAL CREDIT EARNED (AMCCE), calculated
each month, is the MRWC multiplied by CCPAF;
- 3 -
I. TOTAL CAPITAL CREDIT EARNED (TCCE) shall mean the
cumulative total of AMCCE starting from the initiation of
recycled water service to PROJECT;
J. REMAINING NET TOTAL CAPITAL CREDIT OWED (RNTCCO) is TCCO
minus TCCE; and
K. RECYCLED WATER shall mean wastewater treated to
disinfected tertiary recycled water that meets California
Code of Regulations Title 22 standards.
L. TOTAL CAPITAL CREDIT OWED (TCCO) is the PACCE multiplied
by 14.
3. CITY'S DUTIES AND OBLIGATIONS.
CITY shall be responsible for performing the following:
A. Purchase recycled water for the PROJECT from DISTRICT and
pay for said recycled water at DISTRICT'S prevailing wholesale recycled
water commodity rates, as established by DISTRICT, less the Capital
Credit Per Acre -Foot to be provided by DISTRICT. If DISTRICT
establishes a wholesale recycled water commodity rate for any customer
that is less than CITY'S rate, CITY shall pay the lesser rate. CITY
anticipates that the amount of recycled water that will be purchased
for the PROJECT will be up to approximately 1,500 acre-feet per year.
The actual amount purchased by CITY will depend upon the operation of
the the PROJECT;
B. Design, construct, own, operate, and maintain the
recycled water distribution system within CITY water department
boundaries as shown on Exhibit A and in compliance with applicable
State guidelines;
C. Design and construct a recycled water distribution
pipeline extension as shown on Exhibit "A", a booster pump station and
- 4 -
the pressure reducing facilities that are outside of CITY water
department's service area in compliance with applicable State
guidelines;
D. Provide DISTRICT with plans and specifications for design
of pipeline extension, booster pump station and the pressure reducing
facilities for DISTRICT review and approval;
E. Pay for power at the booster pump station identified in
Section 3.C. until the construction and operation of DISTRICT'S
potential recycled water pipeline from the City of Pico Rivera connects
to the pipeline in CITY identified in Section 3.C., also referred to as
the Montebello Loop.
F. Connect CITY'S recycled water pipeline extension from the
PROJECT site to DISTRICT'S existing recycled water distribution system
at the intersection of Randolph Street and Newell Street (hereinafter
"Point -of -Connection");
G. Install a recycled water meter at the PROJECT site at
CITY'S cost;
H. On a monthly basis, read the recycled water meter serving
the PROJECT and provide the reading to 'DISTRICT by the 21st calendar
day of the month following service;
I. CITY may, with DISTRICT approval, add non -potable water
into the recycled water distribution system as long as it: (1) does not
negatively impact any recycled water customer downstream of the point
of addition; (2) does not negatively impact water quality so as to
reduce its commodity value, (3) does not diminish DISTRICT'S rights to
recycled water pressure, flow rate or volume; (4) does not cause
additional operation and maintenance costs for DISTRICT and; (5) is
approved by the appropriate regulatory agencies;
- 5 -
J. Comply with all provisions of the California Regional
Water Quality Control Board (RWQCB) Order No. 87-50 and Order No. 87-51
(hereinafter "Orders") and their successors issued to the County
Sanitation District of Los Angeles County, Title 17 and 22 of the
California Code of Regulations, and regulations of the State of
California Department of Health Services regarding recycled water;
K. Perform annual visual inspections and periodic cross -
connection tests at the PROJECT site and provide documentation to
DISTRICT when requested;
L. Require PROJECT "on -site supervisors" to sign a document
similar to DISTRICT'S "Conditions for the Introduction and Use of
Recycled Water" thereby acknowledging the conditions under which
recycled water may be used at the site;
M. Provide a copy of the latest RWQCB Orders to the PROJECT
on -site supervisor as required in the Orders;
N. Invite DISTRICT to attend meetings regarding design, pre -
bid, award, and construction management related to work described in
Sections 3.B. and 3.C.
O. Subject to approval of the Vernon City Council, provide
letters of support for DISTRICT'S pursuit of additional grant funding
for projects in DISTRICT'S service area.
4. DISTRICT'DUTIES AND OBLIGATIONS.
DISTRICT agrees to perform the following:
A. Sell recycled water to CITY at its prevailing wholesale
commodity rates less the Capital Credit Per Acre -Foot;
B. Operate and maintain its recycled water distribution
system (not including facilities within CITY Water Department's service
- 6 -
area) to provide approximately 1,500 acre-feet per year of recycled
water to the PROJECT;
C. Provide recycled water, except during circumstances
beyond its control, to CITY at the PROJECT site to meet a peak demand
of one -thousand (1,000) gallons per minute and at a minimum of thirty
(30) pounds per square inch. The normal flow is expected to be from
eight -hundred (800) to nine -hundred (900) gallons per minute. The
actual flow will depend upon the operation of the PROJECT,
D. Provide a Capital Credit Per Acre -Foot of recycled water
used at PROJECT to CITY to repay CITY its capital costs, plus interest,
to design and construct the facilities described in Sections 3.B. and
3.C. that reflects DISTRICT'S avoided capital costs of providing
recycled water to the Project. The Total Capital Credit Owed (TCCO) by
DISTRICT to CITY shall be equal to the Net Capital Expended amortized
at an annual rate of five and one -eighth percent (54%) over fourteen
(14) years;
E. Forward federal grant funds received for the Project to
CITY to reduce CITY'S Total Capital Expended. Federal grant funds
shall be equal to twenty-five percent (25%) of the Total Capital
Expended by CITY in accordance with Grant Agreement No. 1425-4-FG-30-
00210 between DISTRICT and the•United States Bureau of Reclamation;
F. Provide inspection personnel to monitor construction of
the facilities described in Sections 3.13. and 3.C. and provide
comments, in writing, to CITY'S representative;
G. Review and approve plans and specifications for the
design of the pipeline extension, booster pump station and pressure
reducing facilities outside the CITY Water Department Service area.
- 7 -
H. Provide the AMCCE to CITY until CITY receives an amount
equal to the Total Capital Credit Owed as defined in Section 2 of this
Agreement;
I. Invoice CITY monthly in the following itemized fashion:
1. Commodity Charges;
2. Power Charges for New Booster Pump Station;
3. Capital Credit; and
4. Cumulative Capital Credit.
J. Assist CITY with regulatory approvals from the State of
California Department of Health Services;
K. Provide CITY with copies of DISTRICT'S Recycled Water
Customer Guide that explains the roles and responsibilities of the
recycled water customer with regard to the use of recycled water; and
L. Support CITY'S application to the California Energy
Commission (hereinafter "CEC") for the proposed Project by providing
exhibits, analyses and documents, when requested by CITY or CEC.
Drafts of exhibits, analyses and documents, if any, will be provided by
DISTRICT to CITY for review prior to submittal to CEC.
5. INVOICTNC PROCFRR_
CITY and DISTRICT agree to use the following process to
determine CITY's Monthly Commodity Charges, Monthly Power Charge,
Monthly Capital Credit Earned and Total Capital Credit Account Balance:
A. Commodity Charge
1. Determine the MRWC by reading the meter located at
the Project site to identify amount of recycled
water taken during the previous month;
2. Multiply the MRWC by DISTRICT'S prevailing
wholesale recycled water commodity rates;
- 8 -
B. Power Charge
1. DISTRICT shall invoice CITY for the power to operate
the booster pump station identified in Section 3.C.
until the conditions in Section 3.E. of this Agreement
are met. DISTRICT shall invoice CITY the amount
invoiced from Southern California Edison (SCE) without
mark-up. DISTRICT shall include a copy of the SCE
invoice with DISTRICT'S invoice to CITY.
C. Capital Credit Earned
1. Calculate the PACCE by amortizing the NCE at five and
one -eighth percent (5-1/8%) over fourteen (14) years;
2. Calculate the PMCCE by dividing PACCE by twelve (12);
3. Calculate the CCPAF by dividing the PMCCE by the MRWC.
If CCPAF is less than or equal to $200, use the
calculated amount in subsequent calculations. If
CCPAF is greater than $200, use $200 in subsequent
calculations; and
4. Calculate the AMCCE by multiplying the CCPAF by the
MRWC.
D. Remaining Net Capital Credit Owed
1. On each monthly invoice, DISTRICT will track the TCCO,
AMCCE and TCCE. TCCO minus the TCCE is the Remaining
Net Capital Credit Owed to CITY. When the Remaining
Net Capital Owed reaches zero, the CITY has recovered
its capital investment, plus interest, and DISTRICT
will stop providing CITY with the capital credit.
Exhibit "B" contains an illustration for calculating
the above amounts.
- 9 -
6. FUTURE RATE INCREASE.
The total increase from year to year for DISTRICT'S wholesale recycled
water commodity rate charged to CITY shall not, in any case, exceed
three percent (3%) in any one fiscal year.
7. HYDRAULIC CALCULATIONS.
The parties shall use five point zero (5.0) feet per second
and a roughness coefficient of one -hundred and thirty (130) as the
standards for calculating flow capacity of the recycled water
distribution system.
8. ANNUAL RECONCILIATION.
CITY and DISTRICT shall meet annually to review recycled
water deliveries and other matters of mutual interest.
9 TERM.
The term of this agreement shall be thirty (30) years. CITY
shall have an automatic right to extend the agreement under the same
terms and conditions for another ten (10) years. Such option shall be
exercised before the sixtieth (60th) day prior to the expiration of the
initial term.
10. ATTORNEYS' FEES.
If any action is instituted to enforce this Agreement, the
prevailing party shall be reimbursed all reasonable attorneys' fees,
costs of collection, as well as any other costs and expenses incurred
in connection with the enforcement effort.
11. NOTICES.
A. Notices given pursuant to the provisions of this
Agreement, or necessary to carry out its provisions, shall be in
writing and delivered either: (1) personally to the person to whom the
notice is to be given; or (2) faxed and mailed to such person.
Addresses of DISTRICT and CITY for this purpose shall be:
Central Basin: CENTRAL BASIN MUNICIPAL WATER DISTRICT
ATTN: GENERAL MANAGER
17140 SOUTH AVALON BOULEVARD, SUITE 210
CARSON, CA 90746-1296
- with a copy to:
LEMIEUX & O`NEILL
2393 TOWNSGATE ROAD, SUITE 201
WESTLAKE VILLAGE, CA 91361
City of Vernon: THE CITY OF VERNON
ATTN: BRUCE V. MALKENHORST
CITY ADMINISTRATOR
4305 SANTA FE AVENUE
VERNON, CA 90058-0805
12. SEVERABILITY.
If any portion of this Agreement shall be held by a court of
competent jurisdiction to be invalid, void, or otherwise unenforceable,
the remaining provisions shall remain enforceable to the fullest extent
permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each
portion of this Agreement containing any provision held to be invalid,
void or otherwise unenforceable, that is not itself invalid, void or
enforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, void, or unenforceable.
13. GOVERNING LAW.
The validity, interpretation and performance of this
Agreement shall be controlled and construed under the laws of the State
of California as enacted and in force at the time this Agreement is
fully executed.
14. ENTIRE AGREEMENT.
This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
the subject hereof and contains all of the covenants and agreements
between the parties with respect to said matter. Each party to this
Agreement acknowledges that any representations, inducements, promises,
statements or agreements, orally or otherwise, that have been made by
any party, or anyone acting on behalf of any party, which are not
contained in this Agreement shall not be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
15. Indemnification.
A. DISTRICT shall indemnify, defend, protect and hold CITY
and its officers, agents and employees free and harmless from and
against any and all claims, demands, losses, damages, liabilities,
fines, charges, penalties, orders, judgments and all costs and expenses
incurred in connection therewith, including reasonable attorney's fees
and costs of defense arising out of the negligent acts by DISTRICT, its
contractors or agents, in the performance of this Agreement, except to
the extent arising from or caused by the negligence or willful
misconduct of CITY, its officers, agents or employees.
B. CITY shall indemnify, defend, protect and hold DISTRICT
and its officers, agents and employees free and harmless from and
against any and all claims, demands, losses, damages, liabilities,
fines, charges, penalties, orders, judgments and all costs and expenses
incurred in connection therewith, including reasonable attorney's fees
and costs of defense arising out of the negligent acts by CITY,,its
contractors or agents, in the performance of this Agreement, except to
- 12 -
the extent arising from or caused by the negligence or willful
misconduct of DISTRICT, its officers, agents or employees.
16. Assignment and Subcontracting Prohibited.
No party to this Agreement may assignor subcontract any
right or obligation pursuant to this Agreement except with the express
written consent of the other party. Any other attempted or purported
assignment of any right or obligation pursuant to this Agreement shall
be void and of no effect.
17. Amendments.
This Agreement may be modified or amended only by a written
document properly executed by both DISTRICT and CITY.
18. Benefit of Agreement
This Agreement shall bind and benefit the parties hereto and
their heirs, successors, and permitted assigns.
19. Forum Selection.
Any action brought relating to this Agreement shall be
brought and held exclusively in a State Court in the County of Los
Angeles, California.
20. Recitals.
All recitals are incorporated by reference.
21. Waiver.
Any waiver at any time by either party of its rights with
respect to a default under this Agreement, or with respect to any other
matters arising in connection with this Agreement, shall not be deemed
a waiver with respect to subsequent default or other matter.
22. Force Majeure.
Neither Party shall be considered in to be in default in any
of its obligations under this Agreement when a failure of performance
- 13 -
shall be due to an uncontrollable force. The term "uncontrollable
force" shall mean any cause beyond the control of the party affected,
including, but not restricted to, flood, earthquake, storm, fire,
lightening, epidemic, war, riot, civil disturbance or disobedience,
sabotage, or embargoes of the United States Government or any other
government, which by exercise of due diligence such party could not
reasonably have been expected to avoid and by exercise of due diligence
has been unable to overcome. Either party rendered unable to fulfill
any of its obligations under this Agreement by reason of an
uncontrollable force, shall give written notice within five business
days of such fact to the other party and shall exercise due diligence
to remove such inability with all reasonable dispatch.
IN WITNESS WHEREOF, the parties to this Agreement have
executed this Agreement by their duly authorized officers effective as
of the day and year first above written.
- 14 -
CITY OF VERNON
BY:
EONIS C. MAtAURG, M yor
;r
ATTEST:A
BRUCE V. MALKENHORST, City Clerk
APPROVED AS TO FORM:
BY:— 7C, ^� 't,
EDUARDO OLIVO, City torney
CENTRAL BASIN MUNICIPAL WATER
DISTRICT
BY:
DARRY MILLER, General Manager
DIST ICLEGAL COUNSEL
A% BY:
STEVEN O'N �__,_Lemieux & O'Neill
- 15 -
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EXHIBIT A
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EXHIBIT B
The following sample illustrates the methodology that
DISTRICT will use to determine the amount of capital credit CITY shall
receive:
Total Capital Expended (TCE) _ $3,500,000 (assumed)
Net Capital Expended (NCE) = TCE x 75% _ $2,625,000
Potential Annual Capital Credit Earned (PACCE) = the annual
payment of the NCE amortized at 5-1/8% for 14 years = $267,312
Potential Monthly Capital Credit Earned (PMCCE) = PACCE/12 =
$22,276
Monthly Recycled Water Consumed (MRWC) = 100 acre-feet
Capital Credit Per Acre -Foot (CCPAF) = PMCCE/MRWC
$22,276/100 = $222.76. If CCPAF > $200, use $200 in subsequent
calculations.
Actual Monthly Capital Credit Earned (AMCCE) = MRWC x CCPAF =
100 x $200 = $20,000.
Total Capital Credit Owed (TCCO)= NCE amortized at 5-1/8% for
14 years times 14 years = $3,742,361
Remaining Net Total Capital Credit Owed (RNTCCO) = TCCO -
AMCCE _ $3,742,361 - $20,000 = $3,722,361. The RTCCO will become the
TCCO in the subsequent invoice.
B - 1
SUPPORTING
DOCUMENTS
MEMORANDUM OF UNDERSTANDING
between
THE CITY OF VERNON
and
CENTRAL BASIN MUNICIPAL WATER DISTRICT
regarding
DEVELOPMENT OF RECYCLED WATER CUSTOMERS
In the
CITY OF VERNON WATER DEPARTMENT'S SERVICE AREA
Purpose
This Memorandum of Understanding ("MOU") is entered into as of
Jub,i 1 S" 2002, between the City of Vernon (hereinafter, "CITY") and the
Central Basin Municipal Water District (hereinafter, "CBMWD") and is intended to
clarify the roles of the CITY and CBMWD regarding their joint effort to explore the
use of recycled water by businesses and industries in the CITY Water
Department's service area. Generally, this effort includes locating potential
customers, determining the potential for recycled water at the site, assessing the
retrofit costs and obtaining commitments from potential "end users. This effort
has been divided into two phases to reflect the timeline associated with the
customer development effort and its relationship to the design and construction
of the recycled water pipelines into CITY.
Phase One
Phase One is the joint effort to locate and assess potential recycled water
customers in and around the proposed recycled water pipeline from the existing
pipeline in the City of Huntington Park to the proposed Malburg Generating
Page 1 of 7
Station located near the intersection of 50th Street and Seville Avenue in CITY.
Such efforts shall not, in any way, jeopardize or impact the supply of reclaimed
water to be supplied by CBMWD to CITY for the Malburg Generating Station
Project.
Vernon will:
I.A. Establish appropriate recycled water rates and charges in order to
provide an incentive for potential recycled water customers to use
recycled water;
I.B. Consider the adoption of an ordinance or resolution to encourage
potential recycled water customers to use recycled water;
I.C. Identify CITY'S representative for all matters relating to recycled
water including providing information and attending meetings with
potential customers;
I.D. Provide potable water consumption histories for customers that
purchase at least ten (10) acre-feet per year (AFY) of CITY'S
potable water. Those potential customers shall be generally south
of 50t" Street; and
I.E. Allow CBMWD the ability to meet with potential customers identified
in Item I.D. to assess the customers' interest and economic viability
for all parties. CBMWD shall invite the CITY representative to all
meetings with potential customers.
Page 2 of 7
CBMWD and/or its designees will:
I.F. Use the data provided by CITY and its experience in customer
development, to determine which potential customers identified in
Item I.D. are worth pursuing;
I.G. Arrange for meetings between CITY, the potential customers and
CBMWD to introduce the potential customer to recycled water,
perform initial site assessments, and assess the economic viability
of serving recycled water to the sites;
I.H. Pursue "Letters of Commitment", after providing CITY with the
opportunity to review and comment on the "Letters of Commitment"
from interested recycled water customers. The commitments may
impact the size of the future recycled water pipeline from the City of
Huntington Park to the Malburg Generating Station, but shall in no
way interrupt, interfere with or delay the supply of recycled water to
be supplied by CBMWD to CITY for the Malburg Generation
Station; and
I.I. Not attempt to enforce the requirements of CBMWD Resolution No.
4-01-633 which requires customers in CITY Water Department's
service area to use recycled water and which imposes a fifty -
percent (50%) surcharge on potable water consumption if potential
recycled water customers elect not to use recycled water that has
Page 3 of 7
been made legally available to that customer. CITY may waive
this subsection on a case -by -case basis. Such waiver by CITY
must be provided in writing to CBMWD prior to its enforcement of
Resolution No. 4-01-633.
Phase Two
Phase Two is the joint effort to locate and assess potential recycled water
customers in the CITY Water Department service area other than those identified
in Phase One that would generally be served by potential recycled water
pipelines from East Los Angeles. The exact pipeline size and alignment will be
established based on recycled water use, customer interest, economic viability
for CITY and CBMWD, ease and cost of construction as well as other factors.
Vernon will:
II.A. Provide potable water consumption histories for customers that
purchase at least ten (10) acre-feet per year (AFY) of CITY'S
potable water. Those potential customers shall be within the CITY
Water Department's service area generally north of 50th Street;
II.B. Allow CBMWD and/or its designees the ability to meet with
potential customers identified in Item II.A. to assess the customers'
interest and economic viability for all parties. CBMWD shall invite
the CITY representative to all meetings with potential customers;
Page 4 of 7
II.C. Design and construct the recycled water pipeline(s) necessary to
provide recycled water to the CITY Water Department's recycled
water customers in sufficient quantity and pressure to meet the
needs of customers that have signed "Letters of Commitment."
II.D. Review and approve the design and construction of recycled water
improvements in the CITY, including improvements in California
Water Service Company's or Maywood Mutual Water Company's
service areas.
CBMWD and/or its designees will:
II.E. Use the data provided by CITY and its experience in customer
development, to determine which potential customers identified in
Item II.A. are worth pursuing;
II.F. Arrange for meeting between CITY, the potential customers, and
CBMWD or its designee to introduce the potential customers to
recycled water, perform initial site assessments, and determine the
economic viability of serving recycled water to the sites;
II.G. Pursue "Letters of Commitment", after providing CITY with the
opportunity to review and comment on the "Letters of Commitment"
from interested recycled water customers;
II.H. Not attempt to enforce the requirements of CBMWD Resolution No.
4-01-633 which requires customers in CITY Water Department's
Page 5 of 7
service area to use recycled water and which imposes a fifty -
percent (50%) surcharge on potable water consumption if potential
recycled water customers elect not to use recycled water that has
been made legally available to that customer. The CITY may Waive
this subsection on a case -by -case basis. Such waiver by CITY
must be provided in writing to CBMWD prior to District's
enforcement of Resolution No. 4-01-633.
11.1. Design and construct the recycled water pipeline(s) necessary to
provide recycled water to the CITY Water Department's service
boundary in sufficient quantity and pressure to meet the needs of
customers that have signed "Letters of Commitment."
In witness whereof, the parties hereto have caused this MOU to be
executed the date first written above
CITY OF VERNON
Leonis Malburg, Mayor
Attest:
Bruce V. Malkenhorst,
City Clerk
Page 6 of 7
Approve as to form:
Eduardo Olivo,
City Attorney
CENT AL BASIN MUNICIPAL WATER DISTRICT
r
Darryl G,,,Vffler, General Manager
APPROVED AS TO FORM:
By
Lemi ux anbWeill, District Counsel
Page 7 of 7
SUPPORTING
DOCUMENTS
A
IN -LIEU REPLENISHMENT AGREEMENT
(CENTRAL BASIN AND WEST COAST BASIN: July 1, 2001 - June 30, 2002)
THIS AGREEMENT is entered into as of VI H 1 0 1 by and between
WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA, a public entity
hereinafter "WRD") and CITY of VERNON (hereinafter
"Producer").
RECITALS
Pursuant to the judgment in the case of Central and West Basin Water
Replenishment District. et al. vs Charles E. Adams et al Los Angeles Superior Court
No. 786656, ("Central Basin Adjudication") or the case of California Water Service
Company et al. v. City of Compton et al., Los Angeles Superior Court Case No.
506806, ("West Coast Basin Adjudication"), Producer is entitled to pump a certain
amount of groundwater from the Central Basin or the West Coast Basin. The amount
which Producer is entitled to pump varies from year to year and is referred to as
"Current Allocated Pumping Rights" ("CAPR") for the purposes of this Agreement. The
Department of Water Resources of the State of California was appointed by the court to
act as Watermaster for both the West and Central Basins. Watermaster is required to
assist the court in the administration and enforcement of the judgment.
This In -lieu Replenishment Agreement is authorized by California Water Code
§60230(p). In order to limit Producer's extraction of groundwater from the Central Basin
or the West Coast Basin, as the case may be, WRD wishes to retire all or a portion of
Producer's unused CAPR and Producer is willing to retire such rights pursuant to the
terms of this Agreement.
Producer must participate in MWD's Seasonal Storage Program and must qualify
for Seasonal Storage Service Water to be eligible to participate in the In -Lieu
Replenishment Program. The amount of rights retired eligible for In -Lieu payment shall
not exceed one hundred and twenty percent (120%) of the long-term credits certified
under the MWD Seasonal Storage Program by Producer.
AGREEMENTS
The parties agree as follows:
1. Reduction in Pumping. Producer agrees to use its best efforts to increase
purchases of imported water above what it would otherwise purchase during the
Seasonal Storage period as set by MWD and thereby decrease the amount of water it
pumps from the groundwater basins. However, Producer shall not become liable to
WRD for failing to increase its imported water purchases and decrease its groundwater
Page 2
extractions from the groundwater basins, except to the extent of payments made to
Producer by WRD pursuant to this Agreement.
2. Producer's Statement of Rights to be Retired. An estimate of the amount of
Producer's CAPR to be retired under this Agreement for each quarter during the current
administrative year is contained in Attachment A. This estimate may be revised
thereafter only with the written approval of WRD. WRD shall rely on such statement in
making payments hereunder during the current administrative year.
3. Entitlement to In -Lieu Payment. To be finally entitled to payments from WRD
under this Agreement for unused CAPR in a particular basin, Producer must have
pumped, transferred to others, or otherwise retired less than all of its CAPR in that basin
during the current administrative year: Prior to becoming eligible for payments
hereunder, producer must have received Seasonal Storage Service Cumulative Long -
Term Credits in such basin from Metropolitan Water District for the current
administrative year. WRD will pay Producer the rate of payment defined below for each
acre-foot of CAPR not pumped, transferred to others (whether by lease or otherwise), or
otherwise retired that was certified for Seasonal Storage Service Long -Term credit. The
maximum quantity of Producer's CAPR which will be paid for pursuant to this
Agreement will be the lessor of the sum of the quarterly amounts set forth in Producers
statement pursuant to Paragraph 2 above or one hundred twenty percent (120%) of the
Seasonal Storage Service Cumulative Long -Term credits certified.
4. Rate of Payment. Payments to producers in the Central Basin under this
contract shall be made by WRD at the rate of one hundred sixty-two dollars ($162) per
acre-foot. Payments to producers in the West Coast Basin under this contract shall be
made by WRD at the rate of two hundred nineteen dollars ($219) per acre-foot.
5. Additional Documentation. At any time during the term of this Agreement, WRD
may determine that further data or investigation is needed to support the claim of
Producer for payment under this Agreement, and may request that Producer provide
such further data or allow such further investigation. WRD shall have the right to
withhold payment until any such additional data is provided or any necessary
investigation is completed, and until WRD is satisfied that Producer is entitled to
payment hereunder. Nothing herein shall prevent WRD from recovering any amounts
paid under this Agreement from Producer which WRD contends were not properly due
and owing to Producer, whether such payments were made by reason of mistake or
otherwise.
6. Watermaster Data Conclusive. Payments hereunder are contingent upon
Producers providing all required reports of production to Watermaster and upon
Producers full compliance with the applicable basin adjudication order. Any payments
made hereunder by WRD shall be finally determined based on the data determined by
Watermaster in its annual report under the relevant basin adjudication for the current
administrative year. Any discrepancies shall be immediately rectified and any amounts
owing between WRD and Producer shall be promptly paid.
Page 3
7. Quarterly Estimated In -Lieu Payments Estimated payments under this
Agreement shall, unless otherwise agreed, be made to Producer by WRD on a quarterly
basis. Each quarterly payment shall be calculated by multiplying the Producer's rights to
be retired for that quarter pursuant to Producer's statement of CAPR (given pursuant to
Paragraph 2) by the in -lieu payment amount pursuant to Paragraph 4). Payment shall
be due within ninety (90) days following the end of a quarter, unless otherwise agreed.
To the extent that quarterly payments made pursuant to this Agreement fail to
compensate for all unused CAPR for the current administrative year (subject to the cap
provided in Paragraph 3), WRD shall make payment for any such rights within 90 days
of receipt of Watermaster's final report of production for such year.
8. Retirement of Pumping Rights. For all CAPR paid for by WRD pursuant to this
Agreement, this Agreement shall constitute a retirement of rights, effective as of the
date of such payment, of such water rights, and Watermaster is expressly authorized to
deduct such quantity as if it had been pumped or extracted from the applicable
groundwater basin by Producer during the current administrative year. Each quarterly
payment, when made, shall be deemed to be in lieu of all of the estimated production
for that quarter given pursuant to Paragraph 2, above, and shall immediately cause the
retirement of such rights. Producer expressly acknowledges that any payments made
hereunder are received in lieu of the exercise of such rights, and that such rights are
irrevocably retired for such year upon receipt of payment.
9. Termination. This Agreement is subject to termination with or without cause by
WRD or Producer upon five (5) days written notice, such notice to be deemed effective
upon personal delivery or two days after mailing to the appropriate address as listed in
Paragraph 10 below. This Agreement is effective for the current administrative year
only and shall automatically terminate at the end of such year.
10. Notices. All notices under this Agreement may be sent by first class U.S. Mail,
with postage prepaid, addressed to the appropriate addressee as follows:
TO: WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA
12621 East 166th Street
Cerritos, CA 90703
ATTN: MELINDA SPERRY
TO: Producer: CITY OF VERNON
4305 SANTA FE AVENUE
VERNON, CALIFORNIA 90058
ATTN: SAMUEL KEVIN WILSON
Page 4
11. Attorneys' Fees. If any action at law or in equity is brought to enforce or interpret
the provisions of this Agreement, the prevailing party shall be entitled to its reasonable
attorneys' fees.
12. Iniunctive Relief. The parties acknowledge and agree that monetary damages
would be inadequate to compensate WRD for loss of groundwater recharge in the event
of Producer's breach. Accordingly, it is agreed that injunctive relief shall be available to
enforce the provisions of this Agreement, whether such action is brought under the
court's continuing jurisdiction pursuant to the applicable basin judgment, or in a
separate action brought for that purpose.
13. Authority to Execute. Each person executing the Agreement below hereby
declares that he or she has appropriate authority to enter into this Agreement on behalf
of the party that person represents.
14. Governing Law. This Agreement shall be interpreted and enforced under the
laws of the State of California.
The following attachment is hereby made a part of this AGREEMENT..
Attachment A - Estimate of Rights to be Retired.
WHEREFORE, the parties have executed this Agreement as of the date
appearing opposite their signatures. /)
DATED: s
1d,A3,/®
DATED: /
DATED:
WATERtREWENI
SOUTI-JERP4 CALI
IA
Leo J./ Vander Lans, President
By:
i and H. urr y, Jr., e etary
(Titles and capacities of Persons executing
on behalf of Producer should be set forth.)
SEE NEXT PAGE
Print Name, Title
IN LIEU REPLENISHMENT AGREEMENT
(CENTRAL BASIN AND WEST COAST BASIN: JULY 1, 2001— JUNE 30, 2002)
CITY OF VERNON
yt'd
Thomas A. Ybarra, Mayor Pro Tem
ATTEST:
BRUCE V. MALKENHORST, City Clerk
APPROVED AS TO F
(�2- ck �- t.. C�(-�,
EDUARDO OLIVO, City Attorney
I �. 11 . ,
c
Agency
Contact
Phone #
Fax #
Estimate of Rights to be Retired
2001-2002 WRD In -Lieu Replenishment Program
01P VEtt�uO�
323 $26 - %4'S V
Estimate of Rights to be retired:
Central Basin West Basin
Oct - Dec 2001
wl %
Jan - March 2002
IDS-)
April - June 2002
�12
Total Estimate
'Z.'► �'7 AF
g.14-01
Date -
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