Resolution No. 2011-193RESOLUTION NO. 2011-193
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON AUTHORIZING THE ISSUANCE OF A NOTICE
INVITING BIDS TO LEASE WATER RIGHTS FOR FISCAL YEAR
2011-2012
WHEREAS, the City of Vernon is interested in obtaining bids
to lease 1,200 acre-feet of water rights with flex as part of the
City's water right allocation for the period of July 1, 2011 to
June 30, 2012; and
WHEREAS, by memorandum dated November 1, 2011, the Director
of Community Services & Water has requested that the City Council of
the City of Vernon approve the issuance of a notice inviting bids to
lease 1,200 acre-feet of water rights with flex; and
WHEREAS, the City Council of the City of Vernon has
determined that it is in the best interest of the City of Vernon that
such notice be issued in accordance with the formal contract procedure
set forth in Section 2.29-4 of the Vernon City Code.
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 hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
directs the City Administrator, or his designee, to issue in
accordance with Vernon City Code Section 2.29-4, the written notice
inviting sealed bids to lease 1,200 acre-feet of water rights with
flex for fiscal year 2011-2012, a copy of which is attached hereto as
Exhibit A.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to make
modifications to the notice as he deems necessary that are consistent
with the intent of this Resolution.
SECTION 4: The City Council of the City of Vernon hereby
directs City staff to comply with Section 2.29-4 of the Vernon City
Code in the solicitation, receipt, opening, and rejection of bids.
SECTION 5: 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 15th day of November, 2011.
Name: Hilario Gonzales
Title
AT ST:
Wi and G. am g chi ity Clerk
2
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2011-193, 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 Tuesday, November 15, 2011, and thereafter was duly signed by
the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this /% day of November,. 2011, at Vernon, California.
(SEAL)
ity Clerk
3
EXHIBIT A
COMMUNITY SERVICES & WATER DEPARTMENT
Samuel Kevin Wilson, Director of Community Services & Water
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811 Fax (323)826-1435
November 1, 2011
RE: Lease of 1200 A.F. of Water Rights with Flex
To All Interested Parties:
The City of Vernon is inviting bids for the lease of 1200 acre feet of water rights with flex. These
water rights are part of the City's water right allocation for the period of July 1, 2011 to June 30,
2012.
All bids should be received in the Department of Community Services and Water on Thursday,
January 5, 2012 at 2:00 p.m. Please seal all bids and indicate on the outside of your bid "sealed
bid -lease of water rights".
Should you have any questions, please do not hesitate to contact me at (323) 583-8811.
Sincerely,
Samuel Kevin Wilson, P.E.
Director of Community Services and Water
Ex�cfusive( Industricd
CITY OF VERNON
LEASE OF 1200 ACRE-FEET OF WATER RIGHTS
WITH FLEX
Dated:
Name of
City/Agency/Company:
M.
Name
Printed:
Title:
Address:
Telephone:
E-Mail:
Total Bid Amount:
F'3m'S"MY Isa=MUax2011-20MWYc R*W 2011.2012 Bid Pu do
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: November 17, 2011
TO: Kevin Wilson, Director of Community Services & Water
FROM: Willard Yamaguchi, City Clerk
RE: Resolution No. 2011-193 — A Resolution of the City Council of the City of Vernon
Authorizing the Issuance of a Notice Inviting Bids to Lease Water Rights for Fiscal Year
2011-2012
Transmitted herewith is a copy of Resolution No. 2011-193 referenced above, which was approved by City
Council on November 15, 2011.
Thank you.
WY:dj
Attachment
c: Resolution No. 2011-193
C Cd
RECEIVE® RECEIVED
NOV 0 7 2011 NOV 0 3 2011
CITY CLERK'S OFFICE CITY ADMINISTRATION
STAFF REPORT
COMMUNITY SERVICES & WATER DEPARTMENT
DATE: November 1, 2011
TO: Honorable Mayor and ity Council
FROM: Samuel Kevin Wilson, Director of Community Services & Water
RE: Lease Water Rights for Fiscal Year 2011-2012
The Department of Community Services and Water (Department) performed an operational
analysis to determine its water resource strategy for fiscal year 2011-2012. The City of Vernon (City)
currently has adjudicated water rights to extract 8,039 acre-feet of water from groundwater aquifers in the
Central Water Basin. In addition, the City has a contract with the Central Basin Municipal Water District
(CBMWD) to purchase surface water on order to augment the City's water demand requirements. It is
estimated that the City will use approximately 7,800 acre-feet of water for 2011-2012 fiscal year. Of this,
approximately 6,800 acre-feet will be extracted utilizing the above -mentioned adjudicated water rights.
The remaining 1,000 acre-feet will be purchased from the CBMWD. There has been a significant
reduction in water sales over the last four years due to conservation measures enacted by the City in 2009,
and a continued decline in economic activity in the City. The City has seen a 28.0 percent reduction in
water use over a four year period.
Moreover, with exceedingly low water demand requirements, and Well No. 19 out -of -service, the
City has been hard-pressed to pump its adjudicated pumping allocation of 8,039 acre -feet -year. As a
result, the City may lose 1,239 acre-feet of carryover water. California Water Law provisions do allow
water purveyors to carryover 20 percent of their adjudicated water rights. However, the City's water
account is full with fiscal year 2010-2011 carryover water occupying the entire account. The Department
can off -set a portion of the lost water costs by leasing the unused water rights to an agency that needs the
water to augment their water demand requirements. A market analysis found that available water is
currently being leasing at approximately $140/acre-foot.
The City has the option of leasing out the water "with flex" or "without flex". The "without flex"
option allows the City to retain its full carryover rights. The "with flex" option would require the City to
relinquish its full carryover rights. Staff is recommending that the City lease -out the subject water "with
flex." Leasing out the water "with flex" will potentially gamer a higher bid on the open market with the
lessee having the flexibility to carryover the leased water rights.
It is my recommendation that the City Council authorized the Department of Community
Services and Water to seek bids to lease 1,200 acre-feet of water rights for fiscal year 2011-2012 at the
November,15, 2011 meeting. Thank you.
SKW/sr
Enclosures
COMMUNITY SERVICES & WATER DEPARTMENT
Samuel Kevin Wilson, Director of Community Services & Water
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811 Fax (323)826-1435
November 1, 2011
RE: Lease of 1200 A.F. of Water Rights with Flex
To All Interested Parties:
The City of Vernon is inviting bids for the lease of 1200 acre feet of water rights with flex. These
water rights are part of the City's water right allocation for the period of July 1, 2011 to June 30,
2012.
All bids should be received in the Department of Community Services and Water on Thursday,
January 5, 2012 at 2:00 p.m. Please seal all bids and indicate on the outside of your bid "sealed
bid -lease of water rights".
Should you have any questions, please do not hesitate to contact me at (323) 583-8811.
Sincerely,
Samuel Kevin Wilson, P.E.
Director of Community Services and Water
Exc(usivefy Industfiaf
CITY OF VERNON
LEASE OF 1200 ACRE-FEET OF WATER RIGHTS
WITH FLEX
Dated:
Name of
City/Agency/Company:
UN
Name
Printed:
Title:
Address:
Telephone:
E-Mail:
Total Bid Amount:
F,�Sr S=\My DMUR Wu . Ve 201I-XI 2\Wva P.ighu 2011.2012 bid F midx
COMMUNITY SERVICES & WATER DEPARTMENT
OFFICE MEMORANDUM
TO: Mark Whitworth, City Administrator
_1✓
FROM: Samuel Kevin Wilson, Director of Community Services and Water
DATE: November 1, 2011
SUBJECT: Lease Water Rights for Fiscal Year 2011-2012
The Department of Community Services and Water (Department) performed an operational analysis to
determine its water resource strategy for fiscal year 2011-2012. The results of the analysis found that with a
continued reduction in water demand, and Well No. 19 out -of -service, the Department has been unable to pump
its full adjudicated pumping allocation of 8,039 acre -feet -year. As a result, the City may lose 1,239 acre-feet of
carryover water. California Water Law provisions do allow water purveyors to carryover 20 percenkof their
unused adjudicated water rights to the next fiscal year. However, the City's water account is full with cariyover
water from previous fiscal years occupying the above -mentioned account. Still, the Department can.off-set a
portion of the lost water costs by leasing the unused water rights to an agency that needs the water to augment
their water demand requirements. A market analysis found that available water is currently being leasing at
approximately $140/acre-foot.
The City does have the option of leasing out the water "with flex" or "without flex". The "without flex"
option allows the City to retain its full carryover rights. The "with flex" option would require the City to
relinquish its full carryover rights. Staff is recommending that the City lease -out the subject water "with flex."
Leasing out the water "with flex" will potentially gamer a higher bid on the open market with the lessee having
the flexibility to carryover the leased water rights.
A Staff Report is herein attached recommending the City Council authorized the Department of
Community Services and Water to seek bids to lease 1,200 acre-feet of water rights for fiscal year 2011-2012 at
the November 15, 2011 meeting. Thank you.
SKW/sr
Enclosures
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