REQUEST FOR CITY COUNCIL AND
CORONA UTILITY AUTHORITY ACTION
DATE: 03/20/2024
TO: Honorable Mayor and City Council Members
Honorable President and Board Members
FROM: Utilities Department
SUBJECT:
Title
APPROVAL OF TERMS AND CONDITIONS FOR CONSTRUCTION, OPERATIONS, AND MAINTENANCE OF THE NORTHERLY PIPELINE AND THE WESTERN RIVERSIDE COUNTY REGIONAL WASTEWATER AUTHORITY RECYCLED WATER PUMP STATION
End
EXECUTIVE SUMMARY:
This staff report asks the City Council to consider terms and conditions for agreements for the construction, operations, and maintenance of the Western Riverside County Regional Wastewater Authority Recycled Water Pump Station and the Northerly Pipeline and authorize the City Manager to execute agreements based on these terms and conditions. The staff report also requests an appropriation for the first milestone payment for the Recycled Water Pump Station scheduled for Fiscal Year 2024.
RECOMMENDED ACTION:
Recommended action
That the City Council:
a. Approve the Terms and Conditions for the Construction, Operations, and Maintenance of the Northerly Pipeline between the City of Corona, City of Norco, Jurupa Community Services District, Home Gardens Sanitary District, Western Municipal Water District, and the Western Riverside County Regional Wastewater Authority.
b. Approve the Terms and Conditions for the Construction, Operations, and Maintenance of the WRCRWA Recycled Water Pump Station and On-Site Reservoir between the City of Corona, City of Norco, Jurupa Community Services District, Home Gardens Sanitary District, Western Municipal Water District, and the Western Riverside County Regional Wastewater Authority.
c. Authorize the City Manager, or his designee, to execute the Construction, Operations, and Maintenance Agreement of the Northerly Pipeline between the City of Corona, City of Norco, Jurupa Community Services District, Home Gardens Sanitary District, Western Municipal Water District, and the Western Riverside County Regional Wastewater Authority with terms and conditions that are substantially the same as those approved by the City Council and is otherwise consistent with the City Council’s direction.
d. Authorize the City Manager, or his designee, to execute the Construction, Operations, and Maintenance Agreement for the Recycled Water Pump Station and On-Site Reservoir between the City of Corona, City of Norco, Jurupa Community Services District, Home Gardens Sanitary District, Western Municipal Water District, and the Western Riverside County Regional Wastewater Authority with terms and conditions that are substantially the same as those approved by the City Council and is otherwise consistent with the City Council’s direction.
e. Authorize an appropriation in the amount of $300,000 to the WRCRWA Booster Pump Station Capital Improvement Project No. UT-2023-04 from the Reclaimed Water Utility Fund 567.
That the Corona Utility Authority review, ratify, and to the extent necessary, direct the City Council to take the above actions.
Body
BACKGROUND & HISTORY:
The City of Corona is a member of the joint powers authority (JPA) Western Riverside County Regional Wastewater Authority (WRCRWA). The five member agencies of the JPA are the Cities of Corona and Norco, Western Water, Home Gardens Sanitary District, and Jurupa Community Services District. The JPA serves to collect and treat wastewater on a regional basis at the WRCRWA treatment plant located in Eastvale. The City currently owns 2.62 million gallons per day (MGD) of capacity in the treatment plant and the collection conveyance system. The WRCRWA treatment plant currently discharges about 7.77 MGD of water to the Santa Ana River. In 2018, WRCRWA obtained a Change of Use Order that allows WRCRWA to divert the plant discharge (with environmental monitoring) to recycled water use. In determining how the recycled water would be used and allocated, the member agencies wanted a flexible program that could support multiple uses. The WRCRWA Executive Committee has worked steadily for the past two years on the recycled water policy and associated projects required to distribute recycled water. In February 2023, the WRCRWA Board of Directors approved the WRCRWA Recycled Water Policy Memorandum outlining procedures for recycled water agreed upon by the member agencies.
On April 5, 2023, City Council approved the Memorandum of Understanding (MOU) between the City of Corona, City of Norco, Jurupa Community Services District (JCSD), Home Gardens Sanitary District, Western Municipal Water District, and the Western Riverside County Regional Wastewater Authority regarding the Design, Construction, Operations, and Capacity Ownership in Certain Recycled Water Facilities. The MOU outlined the agencies’ expressed capacity interests and discussed how costs would be shared amongst member agencies. The MOU was intended to be the first step in the process to be followed by formal binding agreements regarding the construction, operation, and maintenance of each facility.
There are four facilities associated with the WRCRWA recycled water distribution:
• Norco Pipeline
o 12” pipeline to Norco
o Owned, operated, constructed, and maintained by the City of Norco
• Southerly Pipeline
o 20” waterline along River Road from WRCRWA to the City of Corona
o Owned, operated, constructed, and maintained by the City of Corona
o Currently under construction - Project UT-2023-01
o Partially funded by United States Bureau of Reclamation Title XVI funding
• Northerly Pipeline
o 24” waterline north to JCSD’s service area for direct use as recycled water and potential use for outside sales
o Design and construction by JCSD (reimbursable by member agencies)
o Maintenance by JCSD
• Recycled Water Pump Station
o 9.9 MGD capacity
o Located onsite at WRCRWA treatment plant
o Dual pumping banks to pump north and south
o Design and construction by JCSD (reimbursable by member agencies)
o Operation and maintenance by WRCRWA
This Council action relates to agreements for the construction, operation, and maintenance of the Northerly Pipeline and Recycled Water Pump Station.
ANALYSIS:
WRCRWA Executive Committee, including City staff, established comprehensive terms and conditions that form the basis of the agreements for the Northerly Pipeline and the Recycled Water Pump Station. The terms and conditions are attached to this report and a summary of the terms and conditions is provided.
Northerly Pipeline Terms and Conditions
• Definitions including coordinates of official points of connection.
• Designates JCSD as the design and construction lead agency.
• Identifies capacity ownership:
|
Agency |
Capacity (MGD) |
Percentage |
|
Corona |
1.50 |
14.78% |
|
Home Gardens |
0.56 |
5.52% |
|
Norco |
1.70 |
16.75% |
|
Western Water |
1.54 |
15.17% |
|
JCSD |
4.85 |
47.78% |
|
Total |
10.15 |
100.00% |
• The estimated cost of the Northerly Pipeline including all costs associated with the project (design, project development, etc.) and a 15% contingency is $17.4 million as of October 9, 2023.
• Designates the City of Corona’s portion of this cost at 14.78%, or approximately $2.58 million.
• JCSD has secured Clean Water State Revolving Fund (CWSRF) financing for this project and will pass the loan terms onto the member agencies; therefore, the City’s portion will be repaid at 0.8% interest over 30 years.
• City’s estimated annual payment is approximately $100,000.
• City will receive an invoice for Project Development and Project Implementation costs 60 days after JCSD’s Board of Directors approves the construction contract, but this payment will be reimbursed to the member agencies once the loan funds are dispersed to JCSD by CWSRF.
The Northerly Pipeline offers the City of Corona the opportunity to sell up to 1.5 million gallons of recycled water per day as direct revenue to the City’s Reclaimed Water Utility Fund (567) with a low upfront cost and low annual cost. WRCRWA is currently in talks with several agencies to the north regarding the sale of recycled water for either direct use or beneficial use as groundwater recharge.
Recycled Water Pump Station Terms and Conditions
• Includes definitions, such as coordinates of official points of connection.
• Designates JCSD as the design and construction lead agency.
• Designates WRCRWA as the physical infrastructure owner after construction is completed.
• Designates WRCRWA as the lead agency for operations and maintenance of the pump station and the existing 1.0-million-gallon On-Site Reservoir.
• Identifies capacity ownership of the Recycled Water Pump Station:
|
AgencyCapacity (MGD)Percentage |
|
|
|
Corona |
2.62 |
25.81% |
|
Home Gardens |
0.56 |
5.52% |
|
Norco |
1.70 |
16.75% |
|
Western Water |
1.54 |
15.17% |
|
JCSD |
3.73 |
36.75% |
|
Total |
10.15 |
100.00% |
• Identifies capacity ownership of the existing On-Site Reservoir which is based upon capacity ownership in the WRCRWA Treatment Plant (there are currently no additional costs associated with the On-Site Reservoir). Operations and maintenance of the WRCRWA Treatment Plant, including the On-Site Reservoir, are included as part of the annual WRCRWA budget):
|
Agency |
WRCRWA Treatment Plant Capacity (MGD) |
Percentage Ownership |
On-Site Reservoir Capacity (MG) |
|
Corona |
2.62 |
18.71% |
0.187 |
|
Home Gardens |
0.75 |
5.36% |
0.054 |
|
Norco |
2.70 |
19.29% |
0.193 |
|
Western Water |
1.93 |
13.78% |
0.138 |
|
JCSD |
6.00 |
42.86% |
0.428 |
|
Total |
14.00 |
100.00% |
1.00 |
• Indicates that future storage needs beyond the On-Site Reservoir will be determined by the member agencies based on operational monitoring by WRCRWA.
• The estimated cost of the Recycled Water Pump Station including all costs associated with the project (design, project development, etc.) and a 15% contingency is $19.84 million as of October 9, 2023.
• City’s portion of this cost will be 25.81% or approximately $5.1 million, estimated to be paid during Fiscal Year 2025 and Fiscal Year 2026, with final reconciliation payments occurring in Fiscal Year 2027. The City’s portion for FY2025 and FY2026 are estimated to be $2.5 million each year.
• JCSD will invoice member agencies for the Milestone 1 payment which includes Project Development and Project Implementation costs including final design. The City’s Milestone 1 payment is estimated at $300,000. Approval of the recommended actions will result in an appropriation of $300,000 from the Reclaimed Water Utility Fund to the WRCRWA Booster Pump Station project to fund the Milestone 1 payment.
• JCSD has secured grant funding in the amount of $3.2 million which will be used to offset the member agencies’ costs proportionate to the agency’s ownership. The City’s portion of this grant funding is 25.81% or approximately $825,920.
The Recycled Water Pump Station is a critical asset to the City. Without the pump station, the City has no mechanism to move recycled water from WRCRWA into the City’s recycled water distribution system. The City is in construction now on the Southerly Pipeline and without the Recycled Water Pump Station the Southerly Pipeline will become a stranded asset.
Agreements
The Construction, Operations, and Maintenance Agreement for the Northerly Pipeline and the Construction, Operations, and Maintenance Agreement for the Recycled Water Pump Station will be finalized once JCSD has received and awarded the construction bids for these projects.
Staff recommends City Council approve the Terms and Conditions for the Northerly Pipeline and the Terms and Conditions for the Recycled Water Pump Station and On-Site Reservoir and authorize the City Manager to execute the final agreements based on these terms and conditions. If there are substantive changes to the agreement(s), then this action will be brought back to the City Council for consideration.
Acknowledgment
Tonight’s Council action is another step in a long process toward the beneficial use of recycled water in this region. This action would not have been possible without the significant efforts of the WRCRWA Board of Directors and all member agencies, and the grant and loan funding extended by JCSD.
FINANCIAL IMPACT:
Approval of the recommended actions will result in an appropriation from the Reclaimed Water Utility Fund 567 to the WRCRWA Booster Pump Station Capital Improvement Project No. UT-2023-04. There is sufficient working capital in the Reclaimed Water Utility Fund 567 for the recommended actions. Future payments have been included in the proposed FY2025 Capital Improvement Plan and Operating Budgets, but estimates are noted here:
|
Project |
Estimated Financial Impact |
|
UT-2023-04 WRCRWA Booster Pump Station |
FY2024: $300,000, FY2025: $2.5 million, FY2026: $2.5 million |
|
Northerly Pipeline |
FY2025 - FY 2055: $100,000/year |
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (CEQA), which states that a project is exempt from CEQA if the activity is covered by the commonsense exemption that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This action merely approves the terms and conditions for future agreements concerning the City’s financial contribution for the construction of recycled water improvements and there is no possibility that this action will have a significant effect on the environment. The design and construction of the recycled water improvements will be subject to environmental review under CEQA. Therefore, no environmental analysis is required at this time.
PREPARED BY: KATIE HOCKETT, ASSISTANT DIRECTOR OF UTILITIES
REVIEWED BY: TOM MOODY, DIRECTOR OF UTILITIES
Attachments:
1. Exhibit 1 - Terms and Conditions Recycled Water Pump Station and On-Site Reservoir
2. Exhibit 2 - Terms and Conditions Northerly Pipeline
3. Exhibit 3 - Memorandum of Understanding