Resolution No. 10120RESOLUTION NO. 10,120
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF
AN AMENDMENT TO THE PURCHASE AGREEMENT WITH THE
CENTRAL BASIN MUNICIPAL WATER DISTRICT DECREASING
THE MINIMUM AMOUNT OF IMPORTED WATER 'PROVIDED BY
THE CENTRAL BASIN MUNICIPAL WATER DISTRICT
WHEREAS, the City of Vernon (the "City") is located within
the Central Basin Municipal Water District ("Central Basin"); and
WHEREAS, Central Basin is a member agency of the
Metropolitan Water District ("MWD") and provides water service to the
City through the MWD; and
WHEREAS, on October 2, 2007, the City Council of the City of
Vernon adopted Resolution No. 9426 approving a five (5) year Purchase
Agreement for Imported Water to be Provided by Central Basin (the
"Agreement") to purchase Tier 1 surface water to supplement the City's
water demand requirements, which Agreement will expire on January 1,
2013; and
WHEREAS, since the commencement of the Agreement, the City's
water demand has declined by more than 30%, which trend has remained
stable and is not expected to change within the remaining three (3)
year term of the Agreement; and
WHEREAS, the Agreement has a built in five (5) year minimum
allocation provision requiring the City to take 8,400 acre-feet of
water by January 1, 2013, and if the City were to use less than the
minimum allocation, it would be required to pay for the unused
quantity of water; and
WHEREAS, the Department of Community Services & Water has
analyzed the City's water demand requirements for the next three (3)
years and has determined that the surface water requirements meeting
the needs of the City have decreased from 8,400 acre-feet to 5,362
acre-feet; and
WHEREAS, the City desires to amend the Agreement to decrease
the minimum purchase requirements for the remaining three years of the
Agreement; and
WHEREAS, by memorandum dated December 7, 2009, the Director
of Community Services & Water has recommended that an amendment to the
Agreement with Central Basin be approved and executed.
WHEREAS, the City Council of the City of Vernon has
determined that, pursuant to the provisions of subsections (b)(1) and
(b)(3) of Section 2.27 of the Vernon City Code, it is in the public
interest and necessity to enter into an amendment with Central Basin
to reduce the amount of imported water purchased from Central Basin.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon does
hereby find and determine that the recitals contained hereinabove are
true and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Amendment to the Purchase Agreement with Central Basin
(the "Amendment"), in substantially the form attached hereto as
Exhibit A and incorporated by reference and authorizes the City
Administrator, or his designee, to negotiate with Central Basin
modifications to the Amendment which in the opinion of the City
Attorney will better protect the City.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor or Mayor Pro-Tem to execute the Amendment for,
- 2 -
and on behalf of, the City of Vernon as attached in Exhibit A, or
alternatively, to execute a modified Amendment if the changes
negotiated with Central Basin are approved by the City Attorney, and
the City Clerk, or Deputy City Clerk, is hereby authorized to attest
thereto.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to take whatever
action is deemed necessary or desirable for the purpose of
implementing and carrying out the purposes of this Resolution and the
transactions herein approved or authorized.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or her designee, to send the fully executed
Amendment to Art Aguilar, General Manager of Central Basin.
SECTION 6: The City Clerk of the City of Vernon shall
certify to the passage, approval and adoption of this resolution, and
the City Clerk of the City of Vernon shall cause this resolution and
the City Clerk's certification to be entered in the File of
Resolutions of the Council of this City.
APPROVED AND ADOPTED this 21st day of December, 2009.
ATTEST:
MI xlt�'
ANUELA GIRO—�aN, ity Clerk
Name: Hilario Gonzales
Title: Mayor /;-Mayes-Pr�
- 3 -
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 10,120, was
duly passed, approved and adopted by the City Council of the City of
Vernon at a regular meeting of the City Council duly held on Monday,
December 21, 2009, and thereafter was duly signed by the Mayor or Mayor
Pro-Tem of the City of Vernon.
Executed this �s day of December, 2009, at Vernon, California.
(SEAL)
MANUELA GIRON, tity Clerk
- 4 -
EXHIBIT A
AMENDMENT
TO
PURCHASE AGREEMENT FOR IMPORTED WATER TO BE PROVIDED BY
CENTRAL BASIN MUNICIPAL WATER DISTRICT
PURCHASER: City of Vernon
BASE ALLOCATION: 1,112 acre-feet (AF)
TIER 1 ANNUAL MAXIMUM (90% of Base Allocation): 1,000 AF
PURCHASE COMMITMENT (60% of 2,800 AF Base Allocation x 2 years + 60%
of 1,112 AF Base Allocation x 3 years): 5,362 AF
TERM: 5 years from January 1, 2008
EFFECTIVE DATE of AMENDMENT: January 1, 2010
THIS AMENDMENT TO THE PURCHASE AGREEMENT FOR IMPORTED
WATER TO BE PROVIDED BY CENTRAL BASIN MUNICIPAL WATER
DISTRICT, is entered into on December 21, 2009 between Central Basin
Municipal Water District and City of Vernon.
It is mutually agreed that the following changes and additions are hereby made to
the Agreement:
A. Base Allocation is decreased from 2,800 AF to 1,112 AF, as shown above
under "BASE ALLOCATION"
B. Tier 1 Annual Maximum is decreased from 2,520 AF to 1,112 AF, as shown
above under "TIER 1 ANNUAL MAXIMUM (90% of Base Allocation)"
C. Purchase Commitment is decreased from 8,400 AF to 5,362 AF, as shown
above under "PURCHASE COMMITMENT"
D. Term is five (5) years from January 1, 2008, as shown above under "TERM"
to clarify that the term of the original agreement has not changed.
E. Effective date of the decreases in Base Allocation, Tier 1 Annual Maximum
and Purchase Commitment is January 1, 2010, as shown above under
"EFFECTIVE DATE".
CENTRAL BASIN MUNICIPAL
WATER DISTRICT
IC
Art Aguilar
General Manager
Date:
City of Vernon
By:_
Date:
Hilario L. Gonzales
Mayor
ATTEST:
1-3
Manuela Giron, City Clerk
APPROVED AS TO FORM:
Laurence S. Wiener, City Attorney
EXHIBIT I
Exhibit 1
Imported Water Purchase Agreement
DEFINITIONS
"Base Allocation" means the Purchaser's share of the District's base amount
with Metropolitan (defined as the "Initial Base Demand" in the District's purchase
order with Metropolitan). The Purchaser's Base Allocation is used to calculate
both the Tier 1 Annual Maximum (90% of Base Allocation) and the Purchase
Commitment (60% of Base Allocation times five). Initially, the Base Allocation is
determined as the five-year average of Purchaser's non -surplus imported water
purchases from District, from fiscal years ending 1997 through 2001, plus a
prorated adjustment to account for the District's Initial Base Demand. As
described in the Adjustments and Renewals section above, Base Allocation may
be increased or decreased if the District can accommodate a Purchaser's request.
"Imported Water" means imported water supplied by Metropolitan and sold by the
District to Purchaser. Imported Water does not include Long -Term Seasonal
Storage Service and other surplus categories of supplies.
"Purchaser" means a customer of Central Basin MWD that has entered into a
Purchase Agreement.
"Purchase Commitment" means the amount of Imported Water that Purchaser
agrees to purchase from Central Basin MWD. Purchase Commitment must be at
least 60% of the Base Allocation times five. Deliveries of surplus imported water
supplies, including but not limited to Long -Term Seasonal Storage Service, will not
count towards the Purchase Commitment.
"Term" means the term of this Purchase Agreement as specified above.
"Tier 1 Annual Maximum" means an amount equal to 90% of the Base
Allocation.
"Tier 1 Rate" means the current price charged by Central Basin for deliveries of
Imported Water to Purchaser in an amount up to the Tier 1 Annual Maximum.
"Tier 2 Rate" means the current price charged by Central Basin for deliveries of
Imported Water to Purchaser in an amount greater than the Tier 1 Annual
Maximum.
"Tier 1 Supply Rate" means Metropolitan Water District's current per acre-foot
Tier 1 Supply Rate, as determined from time to time by Metropolitan's Board of
Directors.
"Tier 2 Supply Rate" means Metropolitan Water District's current per acre-foot
Tier 2 Supply Rate, as determined from time to time by Metropolitan's Board of
Directors.
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: January 19, 2010
TO: S. Kevin Wilson, Director of Community Services & Water
F M: Nelly Giron, City Clerk
RE: Resolution No. 10,120 - A Resolution of the City Council of
the City of Vernon Approving and Authorizing the Execution of
an Amendment to the Purchase Agreement with the Central Basin
Municipal Water District Decreasing the Minimum Amount of
Imported Water Provided by the Central Basin Municipal Water
District
Transmitted herewith is a copy of the fully executed agreement and
Resolution No. 10,120 referenced above, which was approved by City
Council on December 21, 2009.
Thank you.
NG : dj
c: Resolution No. 10,120
Agreement File No. 09-154
Central Basin
Municipal Water District
6252 Telegraph Rd.
City of Commerce; CA 90040
Ph: 310.217.2222 Fax: 323,201.5554
DOCUMENT TRANSMITTAL
Date: January 7, 2010
To: Nelly Giron
City Clerk
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
SUBJECT: Fully Executed Agreement
O For your information O
Original document requiring
your signature
O Per your request (X)
Fully executed agreement for
your files
O For your review O
Draft document for your
comment
O Please sign and return - O
- For your files
one copy for our records
Remarks:
If you have any question please contact David Hill at 323.201.5501
15eat
Gail Eng./Ops. Administrative Assistant
Central Basin MIND
AMENDMENT
TO
PURCHASE AGREEMENT FOR IMPORTED WATER TO BE PROVIDED BY
CENTRAL BASIN MUNICIPAL WATER DISTRICT
PURCHASER: City of Vernon
BASE ALLOCATION: 1,112 acre-feet (AF)
TIER 1 ANNUAL MAXIMUM (90% of Base Allocation): 1,000 AF
PURCHASE COMMITMENT (60% of 2,800 AF Base Allocation x 2 years + 60%
of 1,112 AF Base Allocation x 3 years): 5,362 AF
TERM: 5 years from January 1, 2008
EFFECTIVE DATE of AMENDMENT: January 1, 2010
THIS AMENDMENT TO THE PURCHASE AGREEMENT FOR IMPORTED
WATER TO BE PROVIDED BY CENTRAL BASIN MUNICIPAL WATER
DISTRICT, is entered into on December 21, 2009 between Central Basin
Municipal Water District and City of Vernon.
It is mutually agreed that the following changes and additions are hereby made to
the Agreement:
A. Base Allocation is decreased from 2,800 AF to 1,112 AF, as shown above
under `BASE ALLOCATION"
B. Tier 1 Annual Maximum is decreased from 2,520 AF to 1,112 AF, as shown
above under "TIER 1 ANNUAL MAXIMUM (90% of Base Allocation)"
C. Purchase Commitment is decreased from 8,400 AF to 5,362 AF, as shown
above under "PURCHASE COMMITMENT"
D. Term is five (5) years from January 1, 2008, as shown above under "TERM"
to clarify that the term of the original agreement has not changed.
E. Effective date of the decreases in Base Allocation, Tier 1 Annual Maximum
and Purchase Commitment is January 1, 2010, as shown above under
"EFFECTIVE DATE".
CENTRAL BASIN MUNICIPAL
WATER DISTRICT /�—`} City of Vernon
I0
Iet'T9
By: 4; r
Hilario-L—. Gonzale
Mayor
Date: f 146 w Date:
ATTEST:
By: lt&,txz X�"�- �
Manuela Giron, City Olerk
APPROVED A5. TO FORM:
Laurence S. Wiener, City Attorney
EXHIBIT 1
Exhibit 1
Imported Water Purchase Agreement
DEFINITIONS
"Base Allocation" means the Purchaser's share of the District's base amount
with Metropolitan (defined as the "Initial Base Demand" in the District's purchase
order with Metropolitan). The Purchaser's Base Allocation is used to calculate
both the Tier 1 Annual Maximum (90% of Base Allocation) and the Purchase
Commitment (60% of Base Allocation times five). Initially, the Base Allocation is
determined as the five-year average of Purchaser's non -surplus imported water
purchases from District, from fiscal years ending 1997 through 2001, plus a
prorated adjustment to account for the District's Initial Base Demand. As
described in the Adjustments and Renewals section above, Base Allocation may
be increased or decreased if the District can accommodate a Purchaser's request.
"Imported Water" means imported water supplied by Metropolitan and sold by the
District to Purchaser. Imported Water does not include Long -Term Seasonal
Storage Service and other surplus categories of supplies.
"Purchaser" means a customer of Central Basin MWD that has entered into a
Purchase Agreement.
"Purchase Commitment" means the amount of Imported Water that Purchaser
agrees to purchase from Central Basin MWD. Purchase Commitment must be at
least 60% of the Base Allocation times five. Deliveries of surplus imported water
supplies, including but not limited to Long -Term Seasonal Storage Service, will not
count towards the Purchase Commitment.
"Term" means the term of this Purchase Agreement as specified above.
"Tier 1 Annual Maximum" means an amount equal to 90% of the Base
Allocation.
"Tier 1 Rate" means the current price charged by Central Basin for deliveries of
Imported Water to Purchaser in an amount up to the Tier 1 Annual Maximum.
"Tier 2 Rate" means the current price charged by Central Basin for deliveries of
Imported Water to Purchaser in an amount greater than the Tier 1 Annual
Maximum.
"Tier 1 Supply Rate" means Metropolitan Water District's current per acre-foot
Tier 1 Supply Rate, as determined from time to time by Metropolitan's Board of
Directors.
"Tier 2 Supply Rate" means Metropolitan Water District's current per acre-foot
Tier 2 Supply Rate, as determined from time to time by Metropolitan's Board of
Directors.
OFFICE OF THE CITY CLERK
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
December 30, 2009
Central Basin Municipal Water District
Attn: Art Aguilar, General Manager
6252 Telegraph Road
Commerce, CA 90040-2512
Re: Imported Water Purchase Amendment to Agreement
Dear Mr. Aguilar:
For your signature, transmitted herewith are two partially executed amendments approved by
City Council on December 21, 2009, through Resolution No. 10, 120.
Please ensure that a fully executed original amendment is returned to the attention of the
undersigned.
If you have any questions regarding this matter, please call Mr. S. Kevin Wilson, at (323) 583-
8811 ext. 245.
Very truly yours,
d
Nelly G o
City Clerk
NG:dj
c: S. Kevin Wilson
Resolution No. 10,120
Agreement No. 09-154
E Ccfusivefy Industrial
C 4 Z009
Cily CLERWs OFFICE
SVELY 19""" APPROVED DEC 21.'CITY COUNCIL
STAFF REPORT
COMMUNITY SERVICES & WATER DEPARTMENT
DATE: December 8, 2009
TO: Mayor and City Council
FROM: Samuel Kevin Wilson, Director of Community Services and Water
RE: Amendment to Purchase Agreement for Imported Water Provided by Central
Basin Municipal Water District
The City of Vernon (City) entered into a 5-year Agreement with Central Basin Municipal Water District
(CBMWD) in 2008 to purchase Tier I surface water to supplement the�City's short and longterm water demand
requirements. Since the commencement of the existing Agreement, the City's water demand has declined by
nearly 30-percent. This trend has remained constant for the past twelve months and is not expected to change until
the economy has fully recovered. The existing Agreement has a built in 5-year minimum allocation provision that
requires the City to extract a minimum of 8,400 acre-feet of water by the end of the 5-year term. If the City was to
use less than the above -mentioned minimum extraction requirement, it would have to pay full price for the unused
quantity of water.
The Community Services Department (Department) evaluated the City's water demand requirements for
the next three years and has revised the surface water requirements to more closely match the water needs of the
City. The Amended Agreement (Agreement) will insure that the City will utilize the minimum required extraction
and eliminate the possibility of having to pay full price for unused water. In addition, the Agreement will provide
for a more balanced water portfolio by allowing staff to more efficiently blend ground and surface water supplies
to meet daily water demand conditions. The table below reflects the current and proposed minimum and
maximum allocations.
Current Purchase Agreement
(AFY)
Proposed Amended
Agreement
Base Allocation
2,800
1,112
Tier 1 Maximum 90% of Base (AFY)
2,520
1,000
Minimum Annual Extraction
1,680
667.2
5-Year Purchase Commitment
8,400
5,362
The City Attorney has reviewed the Agreement and approved as to form. The Agreement must be signed
by Mayor Gonzales in order, for it to be officially ratified. The Agreement will be effective January 1, 2010 with
Councils approval. It is my recommendation that the Agreement be approved at the December 21, 2009 City
Council Meeting.
SKW/sr
Enclosures
` OF VP
•-� ot,, POIIA. A�
s
S�VELY INOJ
COMMUNITY SERVICES & WATER DEPARTMENT
OFFICE MEMORANDUM
TO: Donal O'Callaghan, City Administrator��
FROM: Samuel Kevin Wilson, Director of Community Services & Water
DATE: December 8, 2009
SUBJECT: Central Basin Municipal Water District — Amended Purchase Agreement
The City of Vernon (City) entered into a 5-year Agreement with Central Basin Municipal Water
District (CBMWD) in 2008 to purchase Tier I surface water to supplement the City's water demand
requirements. Since the commencement of the subject Agreement, the City's water demand has declined by
nearly 30-percent. In review of the existing Agreement, it becomes evident that the City no longer requires the
quantities of surface water stipulated in the subject Agreement. With this determined, I contacted Dave Hill of
CBMWD in order to renegotiate the Agreement. Mr. Hill advised me that the Agreement could be renegotiated,
but that it had to be executed at the beginning of the calendar year. Upon receipt of the Amended Agreement
(Agreement), I forwarded a copy to the City Attorney so that he may review the Agreement as to form. The City
Attorney approved the Agreement as to form.
A Staff Report and copy of the Agreement have been attached for your review. It is my
recommendation that the subject Agreement be placed on the agenda and approved at the December 21, 2009
City Council meeting. Thank you.
SKW/sr
Enclosures
0 2009
sy•_ �a:a5
FAScott\Scott\My Documents\Central Basin MWD\CBMWD Purchase Agreement Donal.doc
Arellano, Claudia
From: James L. Markman [JMarkman@rwglaw.com]
Sent: Thursday, December 10, 2009 9:26 AM
To: Arellano, Claudia
Subject: FW: Proposed amendment to Imported Water Purchase Agreement with Central Basin
Municipal Water District
> -----Original Message -----
> From: James L. Markman
> Sent: Thursday, December 10, 2009 9:24 AM
> To: 'earrellano@ci.vernon.ca.us'
> Cc: Laurence S. Wiener
> Subject: Proposed amendment to Imported Water Purchase Agreement with Central Basin Municipal Water
District
> At Larry's request, I have reviewed the proposed amendment. It looks fine and ready to process.
NOTICE: This communication may contain privileged or other confidential information. If you are not the intended
recipient of this communication, or an employee or agent responsible for delivering this communication to the intended
recipient, please advise the sender by reply email and immediately delete the message and any attachments without
copying or disclosing the contents. Thank you.