APPROVE AN INTERAGENCY COST SHARING AGREEMENT WITH WESTERN MUNICIPAL WATER DISTRICT AND JURUPA COMMUNITY SERVICES DISTRICT

SUBJECT:

APPROVE INTERAGENCY COST SHARING AGREEMENT AMENDMENT NO. 1 WITH WESTERN MUNICIPAL WATER DISTRICT AND JURUPA COMMUNITY SERVICES DISTRICT

RECOMMENDATION: That the City Council approve Interagency Cost Sharing Agreement Amendment No. 1 with Western Municipal Water District (WMWD) and Jurupa Community Services District (JCSD), subject to non substantive changes, and authorize the City Manager to execute said agreement (on file with Records Management).

COUNCIL GOALS: Develop Strategies And Take Actions To Minimize The Negative Impacts Of The Global Financial Downturn On Ontario’s Economy And The City’s Fiscal Health

Invest In The City’s Infrastructure (Water, Streets, Sewers, Parks, Storm Drains And Public Facilities)

Pursue City’s Goals And Objectives By Working With Other Governmental Agencies

FISCAL IMPACT: The Desalter Expansion project is included in the adopted FY 2008-09 Capital Improvement Plan for water. This Cost Sharing Agreement is for preparation of a Preliminary Design Report, geohydrologic services for groundwater modeling, well site investigation, program management of the Desalter Expansion project, and is to be shared one third by each participating agency. Ontario’s share is $309,329. Ontario and its project partners negotiated a 10% reduction in the consulting fee for the services provided under this amendment.

The total Desalter Expansion project cost is estimated at $110 million and will be completed in multiple phases anticipated over the next three to five years. Project costs on subsequent phases of the project could be offset by multiple grants including a recently awarded State Proposition 50 Grant in the amount of $20 million (awarded to IEUA for the Desalter Expansion project). Ontario’s total project share is about one-third of the project cost less grants. This action does not commit the City to construction. Those future decisions will be based on the preliminary design report and an economic study of costs and benefits, final design, and construction bids.

BACKGROUND: The Chino Basin Watermaster’s (CBWM) Court ordered Optimum Basin Management Program (OBMP) requires additional desalting and basin hydraulic control facilities. Absent these proposed facilities, the basin will lose water to outflow to the Prado Basin/Santa Ana River.

This can impact downstream uses, and could result in the State Regional Water Quality Control Board eliminating the ability to use and recharge recycled water. The ability to use recycled water is critical to Ontario’s water supply plans.

Developing additional desalting was agreed to in the CBWM “Peace Agreement” process and Ontario is a signatory to that agreement. The Desalter Expansion project is an outcome of that process and the “Peace II” process recently negotiated. By participating regionally with WMWD and JCSD as partners, Ontario will be able to expand ultimate water supply and meet the needs for recycled water use.

The Desalter Expansion project includes expanding both Desalter I and Desalter II treatment plants in terms of capacity and treatment technology, expanding the raw water well fields and adding additional product water delivery facilities. Completion of the project will increase the total Desalter water production from 24,600 to 35,200 acre-feet per year. The City’s desalter water deliveries will increase from 5,000 to 8,533 acre-feet per year.

The State Urban Water Management Planning Act (Water Code Section 10610 et. Seq.) mandates that every urban water supplier providing water for municipal purposes to more than 3,000 customers prepare an Urban Water Management Plan (UWMP) to specify long-term water resource planning objectives and ensure adequate water supplies to meet existing and future demands. The City’s 2010 UWMP update, and related Water Supply Availability Assessments in compliance with State Senate Bill 610 and verification of water supply availability in accordance with Senate Bill 221, will be able to include the City’s increased desalter water supply. In addition, the draft Environmental Impact Report for the City’s General Plan update will be able to include the increased desalter water in demonstrating adequate water supply availability.

On July 3, 2007, City Council entered into a cost sharing agreement with JCSD and WMWD in the amount of $410,400 (Ontario’s share was $136,800) for an alternatives evaluation on the Desalter Phase III project which has since been completed. On December 16, 2008, City Council adopted a resolution to approve Amendment No. 2 to the Chino Basin Desalter Authority (CDA) Joint Exercise of Powers Agreement to add Western Municipal Water District (WMWD) as a new member.

STAFF MEMBER PRESENTING: Ken Jeske, Utilities General Manager