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03-10-2010 CC Rpt A10 COUNCIL AGENDA STAFF REPORT CITY CLERK USE ONLY ;,,a� RECEIVED =7aMeeting Date: March 23, 2010 Public Hearin o 2010MAR 15 AM 9: 33 envwc°"I's Discussion Item: ❑ / Consent Item: OFFICE OF CITY CLERK CHINO HILLS March 16, 2010 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: CITY MANAGER SUBJECT: RESOLUTION APPROVING AMENDMENT NO. 3 TO THE CHINO BASIN DESALTER AUTHORITY JOINT EXERCISE OF POWER AGREEMENT RECOMMENDATION: Adopt a resolution entitled: A RESOLUTION OF THE CITY OF CHINO HILLS APPROVING AMENDMENT NO. 3 TO JOINT EXERCISE OF POWERS AGREEMENT CREATING THE CHINO BASIN DESALTER AUTHORITY. BACKGROUND/ANALYSIS: The City is a member of the Chino Basin Desalter Authority (CDA), which jointly exercises powers to own, operate and maintain water desalting facilities. Other current members of the CDA include the Jurupa Community Services District (JCSD), Inland Empire Utilities Agency (IEUA), Western Municipal Water District (WMWD), Santa Ana River Water Company (SARWC), and the Cities of Chino, Ontario, and Norco. The Parties are governed by a Joint Exercise of Powers Agreement (the "Agreement"), dated September 25, 2001. The CDA facilities include two treatment plants, twenty one groundwater wells, over thirty miles of pipeline and various product water distribution facilities. Chino Hills currently receives 4,200 acre feet per year of potable water from the CDA. Representatives of the Parties have proposed amending the Agreement to authorize the CDA Board of Directors to amend the timeline and the description of certain implementing agreements set forth in Amendment No. 2 to the Agreement, by resolution, to provide more flexibility in the implementation of the design and construction of the Phase 3 Expansion Project contemplated by Amendment No, 2. A resolution setting forth a revised project timeline and description of implementing agreements will be presented to the CDA Board of Directors for consideration at a later date. Further, the Parties desire to clarify Section R of Amendment No. 2 relating to the melded water cost and increased water allocation resulting from the construction and operation of the Expansion Facilities. Finally, implementation of Amendment No. 2, the Phase 3 Expansion Project, and other administrative tasks require the CDA Board of Directors to meet more frequently than four times per year; therefore an amendment to the Agreement is proposed to authorize compensation to the CDA Directors for attendance at all regular and special meetings of the CDA Board of Directors. Agenda Date: March 23, 2009 Page 2 Subject: RESOLUTION APPROVING AMENDMENT NO. 3 TO THE CHINO BASIN DESALTER AUTHORITY JOINT EXERCISE OF POWER AGREEMENT The CDA Board of Directors approved Amendment No. 3 to the CDA Joint Exercise of Power Agreement ata Special Board Meeting on February 18, 2010. The governing bodies of each of the Parties must approve Amendment No. 3 by resolution in order for it to become effective. REVIEW BY AFFECTED DEPARTMENTS: This agenda item has been reviewed by the City Attorney and the Finance Director, FISCAL IMPACT: Funding for this agreement is included in the approved FY 2009/2010 Water budget. Respectfully submitted, Recommended by: A1A/V\ Michael S. Fleager; Mari- John Mura,kPublic Works Director JM/MM/ss Attachment: Amendment No. 3 RESOLUTION NO. 10- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS APPROVING AMENDMENT NO. 3 TO JOINT EXERCISE OF POWERS AGREEMENT CREATING THE CHINO BASIN DESALTER AUTHORITY. WHEREAS, a Joint Exercise of Powers Agreement ("Original Agreement") creating the Chino Basin Desalter Authority ("CDA"), was made and entered into as of the 25th day of September, 2001 by and among the Jurupa Community Services District ("JCSD"), the Santa Ana River Water Company ("SARWC"), the cities of Chino ("Chino"), Chino Hills ("Chino Hills"), Norco ("Norco") and Ontario ("Ontario") and the Inland Empire Utilities Agency ("IEUA") (collectively the "Original Parties" and individually, an "Original Party"); and WHEREAS, Amendment No. 1 to the Original Agreement ("Amendment No. 1") was entered into by the Original Parties as of December 11, 2001; and WHEREAS, Amendment No. 2 to the Original Agreement ("Amendment No. 2"), dated as of October 30, 2008, was entered into by the Original Parties and Western Municipal Water District, a California water district ("WMWD"; the Original Parties and WMWD are collectively referred to herein as the "Parties"); and WHEREAS, the Original Agreement, as amended by Amendment No. 1 and Amendment No. 2, is referred to herein as the "Agreement"; and WHEREAS, certain deadlines in Amendment No. 2 have passed and other deadlines may require adjustment in the future; thus, the Parties now desire to authorize the CDA Board of Directors to amend the project timeline, as well as the description of certain implementing agreements to provide more flexibility in the implementation of the design and construction of the Expansion Facilities (defined in Amendment No. 2); and WHEREAS, the Parties desire to clarify Section R of Amendment No. 2 relating to the melded water cost and increased water allocation resulting from the construction and operation of the Expansion Facilities; and WHEREAS, the Parties anticipate that the implementation of Amendment No. 2 will require the CDA Board of Directors to meet more frequently than four times per year and therefore desire to amend the Agreement to authorize compensation to the CDA Directors for attendance at all regular and special meetings of the CDA Board of Directors; and WHEREAS, the Parties now desire to enter into this Amendment No. 3 to Joint Exercise of Powers Agreement creating the Chino Basin Desalter Authority ("Amendment No. 3") to (1) authorize the CDA Board of Directors to amend the timeline and description of implementing agreements set forth in Amendment No. 2, (2) clarify the provisions of Amendment No. 2 relating to the melded water cost and the increased water allocation to JCSD, Ontario, and WMWD resulting from the expansion of CDA facilities contemplated by Amendment No. 2, and (3) amend the Original Agreement to permit 1 of 3 members of the CDA Board of Directors to be compensated for attending all regular and special meetings of the CDA Board of Directors, all as more particularly described below. NOW THEREFORE, the City Council of the City of Chino Hills does hereby resolve, determine, find, and order as follows: SECTION 1. The recitals set forth above are true and correct. SECTION 2. Amendment No. 3 to the Original Agreement is hereby approved in substantially the form on file with CDA and is made a part hereof as though set forth in full herein. SECTION 3. The City Manager is hereby authorized and directed to make such non-substantive revisions to Amendment No. 3 that he deems necessary and appropriate to the execution of Amendment No. 3. SECTION 4. Unless the context otherwise clearly requires, all terms used herein and not otherwise defined shall have the meanings given such terms in Amendment No. 3. SECTION 5. The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED AND ADOPTED this 23rd day of March 2010, W.C. "BILL" KRUGER, MAYOR ATTEST: MARY McDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY 2 of 3 AMENDMENT NO. 3 to JOINT EXERCISE OF POWERS AGREEMENT creating the CHINO BASIN DESALTER AUTHORITY WHEREAS, a Joint Exercise of Powers Agreement ("Original Agreement") creating the Chine Basin Desalter Authority ("CDA"), was made and entered into as of the 25th day of September, 2001 by and among the Jurupa Community Services District ("JCSD"), the Santa Ma River Water Company ("SARWC"), the cities of Chino ("Chino"), Chino Hills ("Chino Hills"),Norco ("Norco") and Ontario ("Ontario") and the Inland Empire Utilities Agency ("IEUA") (collectively the "Original Parties" and individually, an"Original Party"); and WHEREAS, Amendment No. 1 to the Original Agreement ("Amendment No. 1")was entered into by the Original Parties as of December 11, 2001; and WHEREAS, Amendment No. 2 to the Original Agreement ("Amendment No. 2"), dated as of October 30, 2008, was entered into by the Original Parties and Western Municipal Water District, a California water district ("WMWD"; the Original Parties and WMWD are collectively referred to herein as the"Parties"); and WHEREAS, the Original Agreement, as amended by Amendment No. 1 and Amendment No. 2, is referred to herein as the"Agreement"; and WHEREAS, certain deadlines in Amendment No. 2 have passed and other deadlines may require adjustment in the future; thus, the Parties now desire to authorize the CDA Board of Directors to amend the project timeline, as well as the description of certain implementing agreements to provide more flexibility in the implementation of the design and construction of the Expansion Facilities (defined in Amendment No. 2); and WHEREAS, the Parties desire to clarify Section R of Amendment No. 2 to more accurately state the intent of the parties with respect to the melded water cost and increased water allocation resulting from the construction and operation of the Expansion Facilities; and WHEREAS, the Parties anticipate that the implementation of Amendment No. 2 will require the CDA Board of Directors to meet more frequently than four times per year and therefore desire to amend the Agreement to authorize compensation to the CDA Directors for attendance at all regular and special meetings of the CDA Board of Directors as well as ad-hoc and serial meetings of committees comprised of two (2) or more CDA Directors, subject to a limitation on the number of meetings for which CDA Directors will be eligible to receive compensation, described below; and WHEREAS, the Parties now desire to enter into this Amendment No 3 to Joint Exercise of Powers Agreement creating the Chino Basin Desalter Authority ("Amendment No. 3") to (1) authorize the CDA Board of Directors to amend the timeline and description of implementing agreements set forth in Amendment No.2, (2) clarify the provisions of Amendment No. 2 relating to the melded water cost and the increased -1- DOCSOC!13 64296v61024429-0030 water allocation to JCSD, Ontario, and WMWD resulting from the expansion of CDA facilities contemplated by Amendment No. 2, and (3)amend the Original Agreement to permit members of the CDA Board of Directors to be compensated for attending all regular and special meetings of the CDA Board of Directors, all as more particularly described below. NOW THEREFORE, the Parties hereto agree that the Agreement shall be amended as follows; 1. The Agreement is hereby amended to provide that the project timeline described in Amendment No. 2, including the deadline set forth in Section 2.7(b)(2) for the calculation of per acre foot water costs and the deadlines set forth in Sections T and U of Amendment No. 2 for the completion of various agreements, may be revised by resolution of the CDA Board of Directors. 2. The Agreement is hereby amended to provide that the description of the various agreements required for project implementation contained in Sections 'I' and U of Amendment No.2 may be revised by resolution of the CDA Board of Directors. The CDA Board of Directors may, by resolution, eliminate the requirement for certain agreements listed in Sections T and U of Amendment No. 2 and may require additional agreements, as the CDA Board of Directors deems appropriate. 3. Section R of Amendment No. 2 is hereby amended to read as follows: The Parties hereby agree, pursuant to Section 7.3 of the Original Agreement, that with the sole exception of the Shared Facilities Costs, the capital costs of the Expansion Facilities described in the PDR (see Section "S", below) shall be allocated entirely to Ontario, JCSD and WMWD, and such parties shall execute water purchase agreements with the CDA with respect to the increased allocation of desalted product water such parties will be entitled to receive as a result of completion of the Expansion Facilities. 4. Section 2.6 of the Original Agreement is hereby amended to read as follows: The CDA shall pay a stipend to the Members of the Board, including its ex-officio Member, in the amount of$150.00, for attendance at each regular and special meeting of the CDA Board of Directors and each ad-hoc or serial meeting of a committee comprised of two (2) or more CDA Directors; provided that a CDA Director shall not receive compensation for attendance at more than four (4)meetings in any one (1) month. In addition, a Director or alternate Director shall be reimbursed for reasonable expenses incurred in the conduct of the business of the CDA. -2- DOCSO C/1364296v6/024429.0030 5. Except as expressly set forth in herein, nothing in this Amendment No. 3 shall constitute an amendment to any other provision of the Agreement. IN WITNESS WHEREOF, the Parties have executed this Amendment No. 3 to Joint Exercise of Powers Agreement creating the Chino Basin Desalter Authority as of the dates set forth below. -3- D O CS O C/13 64 296x6/0244 29-003 0 CITY OF CHINO HILLS DATED: BY: MAYOR DATED; ATTESTED: CITY CLERIC APPROVED AS TO FORM D O C S OC/13 64296 v6/024 42 9-003 0 CITY OF ONTARIO DATED: BY: CITY MANAGER DATED: ATTESTED: CITY CLERK APPROVED AS TO FORM DOCSOC/1361296v6/024429-0030 JURUPA COMMUNITY SERVICES DISTRICT DATED: BY: PRESIDENT DATED: ATTESTED: SECRETARY APPROVED AS TO FORM DOCS O C/1364296 v6/024429-003 0 CITY OF CHINO DATED: BY: MAYOR DATED: ATTESTED: CITY CLERK APPROVED AS TO FORM DOCSOC/1364296v6/024429-0030 CITY OF NORCO DATED: BY: MAYOR DATED: ATTESTED: CITY CLERK APPROVED AS TO FORM DOCSO C/1364296x6/024429-0030 SANTA ANA RIVER WATER COMPANY DATED: BY: PRESIDENT DATED: ATTESTED: SECRETARY APPROVED AS TO FORM D O CSOGI 364296v6/024429-0030 INLAND EMPIRE UTILITIES AGENCY DATED: BY: PRESIDENT DATED: ATTESTED: SECRETARY APPROVED AS TO FORM DOCSOC/1364296v6/024429-0030 WESTERN MUNICIPAL WATER DISTRICT DATED: BY: PRESIDENT DATED: ATTESTED: SECRETARY APPROVED AS TO FORM DOCSOC/13 64296v6/024429-0030 STA 1'h OF CALIFORNIA ) ) SS. COUNTY OF SAN BERNARDINO ) I , Secretary of the Board of Directors of the Chino Basin Desalter Authority, do hereby certify that the above and foregoing is a full, true and correct copy of the Amendment No. 3 to Joint Exercise of Powers Agreement creating the Chino Basin Desalter Authority dated Dated: (SEAL) Secretary of the Board of Directors D0C80C/1364296v6/024429-0030