SR 07-27-2021 3D
City Council Report
City Council Meeting: July 27, 2021
Agenda Item: 3.D
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To: Mayor and City Council
From: Rick Valte, Acting Public Works Director, Public Works, Engineering and
Street Services
Subject: Approval of the Arcadia Water Treatment Plant Design/Build Guaranteed
Maximum Price Amendment
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a Guaranteed Maximum
Price amendment to Design-Build Agreement No. 10981 (CCS) in an amount not
to exceed $72,443,424 (including 8% contingency) with Walsh Construction
Company II, LLC, for the construction phase of the Olympic Well Field
Restoration and Arcadia Water Treatment Plant Expansion Project for the Public
Works Department for a new total amount not to exceed $78,016,425;
2. Authorize the Director of Public Works to issue any necessary change orders and
contract modifications to complete additional work within the contract authority;
3. Award Request for Proposals #SP2602 to MNS Engineers Inc., for construction
observation services for the Olympic Well Field Restoration and Arcadia Water
Treatment Plant Expansion Project;
4. Authorize the City Manager to negotiate and execute an agreement with MNS
Engineers Inc., in an amount not to exceed $583,390 (including a 10%
contingency);
5. Authorize the Director of Public Works to issue any necessary modifications to
complete additional work within contract authority; and
6. Authorize the budget changes as outlined in the Financial Impacts & Budget
Actions section of this report.
Summary
The City of Santa Monica (City) has supplied safe and reliable water service to its
residents and businesses for more than 100 years. To ensure the continued safety,
reliability and affordability of that service, the City’s Sustainable Water Master Plan
(SWMP) was updated in 2018, with the goal of achieving water self-sufficiency by 2023.
The Olympic Well Field Restoration and Arcadia Water Treatment Plant Expansion
Project (Project) was outlined as a critical project within the SWMP. The Project would
result in increased local water production, and would offset imported water purchases
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by approximately 40 percent, leading to long-term cost benefits for ratepayers,
establishment of a diverse and drought-resilient local water supply, and a reduction in
the City’s water supply energy footprint.
The City awarded a progressive design-build agreement to Walsh Construction
Company II, LLC, (Walsh) in December 2019 in the amount of $5,063,001, to provide
design services for the Project. The City authorized the first modification to this
agreement in November 2020, in the amount of $510,000, to provide additional design-
build services. Walsh Construction subsequently submitted a Guaranteed Maximum
Price (GMP) for construction services. Staff recommends executing a GMP amendment
in an amount not to exceed $72,443,424 (including 8% contingency) for a total contract
amount not to exceed $78,016,425. Staff also recommends MNS Engineers, Inc. to
provide construction observation services for the same project, in an amount not to
exceed $583,390 (including 10% contingency). The Project would be funded by the
City’s Water Fund, Gillette-Boeing Settlement funds, State grant funds, and the
Metropolitan Water District of Southern California Local Resources Program. The City’s
Water Fund is proposing to issue Water revenue bonds to finance a portion of the
project in a separate Council item at the July 27, 2021 meeting.
Discussion
Santa Monica has consistently taken a strategic approach to maintain affordable and
safe water and wastewater services for our community while adequately investing in
long-term water quality, reliability, resiliency, and sustainability. Given the statewide
challenges surrounding a reliable water supply in recent years and the high cost of
imported water, Council directed staff to develop a water self-sufficiency plan with the
goal of delivering 100% of the City’s water demand using local water sources by 2023.
The City Council adopted the 2018 Sustainable Water Master Plan Update (SWMP)
aimed at providing long-term cost benefits for water and wastewater ratepayers and
establishing a diverse, sustainable, and drought-resilient local water supply and
eliminating the City’s dependence on imported water sources (Attachment A).
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Project Details
The Olympic Well Field Restoration and Arcadia Water Treatment Plant Expansion
Project (Project) involves:
1) Constructing a new advanced water treatment facility to treat contaminated
groundwater from the Olympic Well Field; and
2) Implementing production efficiency upgrades at the Arcadia Water Treatment
Plant (WTP).
The Project would restore the Olympic Sub-basin to full production capacity
(approximately 3,000 acre-feet per year or 13% of the City’s water supply) and
maximize local groundwater resources. This portion of the Project is funded using
unrestricted pollution settlement funds.
Production efficiency enhancements and upgrades at the Arcadia Water Treatment
Plant would increase overall production efficiency from 82 percent to 90 percent and
increase treatment capacity from 10 to 13 million gallons per day. These production
efficiency upgrades would be partially funded with a $10 million grant from the State of
California Department of Water Resources (Attachment F) for capital expenditures, as
well as $19.6 million in funding over 25 years from the Metropolitan Water District of
Southern California's Local Resources Program (Attachment G), for operating
expenditures. Construction would tentatively begin this September and would take
approximately 18-24 months to complete.
Public Outreach
Public outreach would be conducted by City staff and Walsh throughout the construction
phase of the Project, and would include notifying adjacent properties and the
surrounding community of the scope of the project, schedule, hours of work, and
potential impacts. The outreach team also would keep neighboring City of Los Angeles
residents and businesses informed of the project schedule and construction impacts.
Environmental Analysis
The California Environmental Quality Act (CEQA) Mitigated Negative Declaration, with
the Mitigation Monitoring and Reporting Plan, for the Project was adopted by Council on
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November 24, 2020, and the Notice of Determination was filed at the State
Clearinghouse on December 1, 2020.
Vendor Selection – Construction Management
The construction management firm would supplement the work of City staff with a
construction observer for the Project. The observer would oversee and inspect the
construction work, start up and commissioning, ensure it adheres to project design
plans and specifications, answer contractor questions in the field, verify quantities on
contractor invoices, prepare daily reports, capture and maintain progress photos,
coordinate work with the City’s water treatment plant staff, distribute construction
notifications, and address questions and concerns from the public.
City staff would provide project and construction management on the project while the
vendor would provide the required full-time field oversight and inspections. City staff
does not have a Public Works inspector available during the timeframe of this project
and, therefore, there is no internal capacity to inspect this project.
MNS Engineers, Inc. was selected to provide construction management services for the
Project from an approved shortlist of construction management firms. The shortlist was
created by way of a Request for Qualifications (RFQ) process. MNS Engineers, Inc.
submitted a proposal as part of the Request for Proposals (RFP) process and was
subsequently selected.
RFQ Information
Prequalified Firms Berg and Associates, Inc., MNS Engineers, Inc., Psomas, TRC Engineers,
Inc., and Willdan Engineering
Evaluation Criteria Training/credentials/experience, competence/skill, capacity/ability to
perform services promptly, sufficiency of financial/other resources,
character/reputation, and price.
Municipal Code SMMC 2.24.190
RFQ Data
Posted On Posted On Advertised In (City Charter &
SMMC)
Vendors
Downloaded
Date Publicly
Opened
9/25/2019 City's Online Santa Monica Daily Press 110 10/24/2019
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Bidding Site
RFP Information
Best Qualified Firm MNS Engineers, Inc.
Evaluation Criteria Technical competence, staffing capability, project approach, past
performance, dispute resolution, quality control, cost control, management
services, customer service, and the ability to meet the required time frame.
Municipal Code SMMC 2.24.190
RFPs Received
MNS Engineering
RFP Data
Posted On Posted On # of Vendors
Downloaded
# of Submittals
Received
Date RFP
Received
5/18/2021 Directly Published to 5
Pre-Qualified Firms
5 1 06/04/2021
Justification to Award
One firm submitted a proposal for construction observation services. Based on the selection criteria set
forth in SMMC 2.24.190, staff recommends MNS Engineers, Inc. as the best qualified firm to provide
construction observation services based on its qualifications, price, the competence and skill of the staff
for the Project, and the firm’s directly related experience providing similar services for municipal agencies
(including several previous City of Santa Monica Capital Improvement Projects).
Past Council Actions and Information Item
Meeting Date Description
11/27/2018 (Attachment A) 2018 Sustainable Water Master Plan Update
05/28/2019 (Attachment B)
Award Professional Services Agreement with Dudek for
the Preparation of an Environmental Study for the
Olympic Well Field Restoration and Arcadia Water
Treatment Plant Expansion Project
06/25/2019 (Attachment C)
Award Professional Services Agreement to Provide
Owner's Engineer Services for the Olympic Well Field
Restoration and Arcadia Water Treatment Plant
Expansion Project
12/17/2019 (Attachment D)
Award Request for Proposal and enter into Agreement
with Walsh Construction Co. ll, LLC for Design-Builder
Services for the Olympic Well Field Restoration and
Arcadia Water Treatment Plant Expansion Project
11/24/2020 (Attachment E) Adoption of a Resolution of Initial Study/Mitigated
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Negative Declaration for
Olympic Well Field Restoration & Arcadia Water
Treatment Plant Expansion Project
2/23/2021 (Attachment F)
Adoption of Resolution to Negotiate and Execute Water
Desalination Grant with the State of California
Department of Water Resources
2/23/2021 (Attachment G)
Adoption of Resolution to Enter Into an Agreement to
Receive Funding from the Metropolitan Water District of
Southern California's Local Resources Program
6/22/2021(Attachment H)
Award Construction Contract to Blois Construction, Inc.
for the Olympic Well Field Well Equipping and Olympic
Transmission Main Project
5/11/2021 (Attachment I) Information Item: Water Revenue Bond for Water Self-
Sufficiency Projects
Financial Impacts and Budget Actions
Approval of the recommended action requires the following:
1. GMP Amendment to Walsh Design Build Agreement
Staff seeks authority to approve funding from the City’s Water Fund and unrestricted
Gillette-Boeing Settlement funds to increase the amount of the design/build contract
with Walsh Construction Company II, LLC for the construction phase of the design/build
services contract. Water revenue bonds of $62,443,424 would finance most of the
construction costs, with an additional $10 million in grant funds awarded from the
Department of Water Resources. This Guaranteed Maximum Price contract amendment
is contingent on Council authorizing the issuance of these revenue bonds. Future year
funding is contingent on Council budget approval.
Agreement Modification Request
Agreement #
Current
Authorized
Amount
FY 2021-22 Budget
Modified
Request Amount
Dept/CIP Account # Total Revised
Contract Amount
10981 (CCS) $2,663,001 $0 C5007750.689000 $2,663,001
10981 (CCS) $2,400,000 $0 C5007740.689000 $2,400,000
10981 (CCS) $510,000 $0 C5007410.689000 $510,000
10981 (CCS) $0 $10,000,000 C2007740.689000 $10,000,000
10981 (CCS) $0 $18,600,000 C5007750.689410 $18,600,000
10981 (CCS) $0 $43,843,424 C5007740.689740 $43,843,424
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$5,573,001 $72,443,424 Total $78,016,425
2. Construction Management Agreement
Staff seeks authority to approve funding from the Water Fund (50) available in the FY
2021-22 Capital Improvement Program budget to award a contract to MNS Engineers,
Inc. for construction observation services. Future year funding is contingent on Council
budget approval.
Contract Request
FY 2021-22 Budget Request
Amount
FY 2021-22 Budget CIP Account # Total Contract Amount
$583,390 C5007740.689740 $583,390
Total Construction Management Contract $583,390
Prepared By: Omeed Pour, Civil Engineer
Approved
Forwarded to Council
Attachments:
A. Attachment A - 2018 Sustainable Water Master Plan Update
B. Attachment B - Award Professional Services Agreement with Dudek for the
Preparation of an Environmental Study
C. Attachment C - Award Professional Services Agreement to Provide Owner's
Engineer Services
D. Attachment D - Award Request for Proposal and enter into Agreement with
Walsh Construction Co. ll, LLC for Design-Builder Services for the Olympic Well
Field Restoration and Arcadia Water Treatment Pl
E. Attachment E - Adoption of a Resolution of Initial Study-Mitigated Negative
Declaration
F. Attachment F - Adoption of Resolution to Negotiate and Execute Water
Desalination Grant
G. Attachment G - Adoption of Resolution to Enter Into an Agreement to receive
funding from the Metropolitan Water District of Southern California's Local
Resources Program
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H. Attachment H - Award Construction Contract to Blois Construction Inc. for the
Olympic Well Field Equipping and Olympic Transmission Main Project
I. Attachment I -Information Item: Water Revenue Bond for Water Self-Sufficiency
Projects
J. Attachment J - Walsh Oaks Form
K. Attachment K - MNS Oaks Form
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City Council Report
City Council Meeting: November 27, 2018
Agenda Item: 8.C
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To: Mayor and City Council
From: Susan Cline, Director, Public Works, Water Resources
Subject: Sustainable Water Master Plan Update and Pathway to Water Self-
Sufficiency
Recommended Action
Staff recommends that the City Council:
1. Provide staff with direction to proceed with water self-sufficiency components.
2. Provide staff with direction regarding funding recommendations to achieve water
self-sufficiency.
3. Authorize budget changes as outlined in the Financial Impacts and Budget
Actions section of this report.
4. Direct staff to return for a public hearing on January 8, 2019, to consider
implementation of 9% water rate increase previously approved by Council on
February 24, 2015 to go into effect on March 1, 2019.
Executive Summary
The City of Santa Monica (City) has historically provided water service to residential and
business customers allowing for bold efforts in securing resiliency and self-sufficiency
for the community. Given the statewide challenges surrounding a safe and reliable
water supply in recent years, Council directed staff to develop a water self-sufficiency
plan with the goal of meeting 100% of Santa Monica’s water demand using local water
sources by 2020. On October 28, 2014, Council adopted the Sustainable Water Master
Plan (SWMP), which outlines a strategy to achieve the City’s water self-sufficiency goal
(Attachment A). Staff initiated a comprehensive update of the SWMP in 2017 to
incorporate new information regarding local groundwater resources and to integrate
new water conservation programs and alternative water supply opportunities. On
January 9, 2018, staff reported to Council that further analysis was needed to assess
whether the City could meet its water self-sufficiency goal by 2020 (Attachment B). The
further analyses have been completed and confirm that achieving water self-sufficiency
that can be maintained into the future is practical and cost effective, but the projected
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date of reaching that goal would be 2023. The delay from the original date is due to new
state drinking water requirements implemented in 2018, permitting requirements for
alternative water supply projects, and results of recently completed feasibility studies
which resulted in longer timelines for project completion relative to previous estimates.
The benefits of becoming water self-sufficient when compared to the alternative of
continuing to meet a portion of local water demand using imported water include: long-
term cost benefits for water ratepayers, establishment of a diverse, sustainable and
drought resilient local water supply, and reduction of the City’s water supply energy
footprint. It should be noted that in the updated plan proposed by staff, water self-
sufficiency equates to approximately 99% locally sourced water, with 1% of the City’s
water supply still being purchased from the Metropolitan Water District of Southern
California (MWD) to maintain the imported water connection for emergency purposes.
The updated proposal to meet water self-sufficiency presented in this staff report
includes an optimized water conservation program together with local water supply
projects, an updated implementation timeline, and recommended funding toward
achieving water self-sufficiency for the City. Following Council direction and approval,
the final components will be included in an updated SWMP that will guide City efforts
toward achieving the goal through 2023. To achieve self-sufficiency by 2023, staff is
proposing to replace imported water purchases with a comprehensive plan consisting
of:
Component 1 - continuing and increasing water conservation efforts to
permanently reduce water demand,
Component 2 - developing sustainable and drought resilient alternative water
supplies, and
Component 3 - expanding local groundwater production within sustainable yield
limits.
The anticipated cost to implement the components required to meet the self-sufficiency
goal is approximately $38 million to increase local water supplies, which includes
capacity expansion of the Arcadia Water Treatment Plant (WTP), implementation of
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production efficiency enhancements, as well as acquiring an additional groundwater
well to enhance resiliency. The $38 million would be funded primarily through the
issuance of a water revenue bond and a contribution from the Wastewater Fund ($3.25
million) to the Water Fund to fund the various projects outlined in this staff report, with
the debt service on the bonds incorporated into water rates in an upcoming rate study.
An additional $64 million from existing water-contamination settlement funds would be
used for restoring the Olympic Sub-basin, which would allow additional water production
from that sub-basin to support achievement of water self-sufficiency. The proposed
water self-sufficiency plan and staff recommendations are based on recently completed
studies (e.g., confirmation of sustainable yield analysis, evaluation of new drinking water
regulations on the Olympic Sub-basin restoration, and feasibility studies to assess new
technologies that increase production efficiency at the Arcadia WTP) in which multiple
scenarios were evaluated for cost, benefits and effectiveness.
Lastly, staff will return to Council on January 8, 2019, for a public hearing and to
recommend a full implementation of the 9% water rate adjustment (within the previously
adopted Council authorization) for calendar year 2019 and effective on water bills
issued on or about March 1, 2019. The recommended water rate adjustment would
ensure a fiscally sustainable comprehensive program for safe, clean, reliable water
supply to our community. It would also help offset increased construction costs to keep
up with the City’s 100-year water main replacement program and fund preliminary
design efforts on the various components required to achieve water self-sufficiency as
contemplated in the 2014 rate study.
Background
On January 25, 2011, City Council directed staff to develop a water self-sufficiency plan
with the goal of meeting 100% of Santa Monica’s water demand using local water
sources by 2020. On October 28, 2014, Council adopted the SWMP which outlines a
comprehensive plan to achieve water self-sufficiency. The SWMP involves a
combination of water demand reduction strategies through various water conservation
and efficiency programs designed to permanently reduce residential and commercial
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water use, along with increased water supply from 1) alternative water sources such as
captured rainwater and treated wastewater; 2) increased efficiency of the City’s water
treatment systems; and 3) additional pumping from existing groundwater wells and new
wells in the local groundwater basin. Implementation of the SWMP has been proceeding
since 2014, with updates provided during Council’s annual consideration of water rate
adjustments. The most recent update was provided on January 9, 2018.
Between 2014 and 2018, other elements of the SWMP progressed, including
completion of a preliminary Sustainable Yield Analysis (SYA) of the Santa Monica
groundwater basin and finalizing plans for the Sustainable Water Infrastructure Project
(SWIP) to support further analysis and refinement of alternatives to reduce reliance on
imported water supply and meet the City’s self-sufficiency goal. Staff initiated a
comprehensive update of the SWMP in 2017 to incorporate new information regarding
local groundwater resources, regulatory updates, and to integrate new water
conservation programs and alternate water supply opportunities.
On January 9, 2018, staff reported to Council that further analysis was needed to
assess whether the City could meet its water self-sufficiency goal by 2020. Additional
work completed since January 2018 included analysis to validate preliminary SYA
estimates of the local groundwater basin, drilling of exploratory water wells in the
Coastal sub-basin to evaluate potential new local water production, technical studies to
evaluate the cost and viability of increasing the production efficiency of the City’s
Arcadia WTP, evaluating the impact of new drinking water regulations (e.g., maximum
contaminant level [MCL] for 1,2,3 TCP) on groundwater extraction from the Olympic
Sub-basin, and evaluating the cost and viability of additional water conservation
programs as requested by the Task Force on the Environment. A timeline summarizing
key events related to the development of the SWMP from 2011 is provided in Figure 1.
Staff currently anticipates that the City would achieve water self-sufficiency in 2023
based on the plan outlined in this report. In addition to the proposed plan to achieve
water self-sufficiency, a Five-Year Rate Study (2020-2024) is also currently underway
and will consider potential rate impacts of water self-sufficiency projects. Results of the
Five Year Rate Study will be presented to Council in the first half of 2019.
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January 25, 2011
City Council directed
staff to develop water
self-sufficiency plan
(100% on local water
supplies)
Council adopts Sustainable
Water Master Plan (Oct ’14)
Plan outlines the City’s strategy to
achieve water self-sufficiency
Olympic Treatment Pilot Project
Initiated (Sept ’14)
Evaluate treatment technologies to
restore pumping capacity at Olympic
Sub Basin
SWMP Update
(Nov ‘18)
Staff to present
strategy to meet
City’s water self-
sufficiency goal
Conservation Plan
Implemented (2015)
Increased conservation
efforts saw a ~20% reduction
in gallon per capita per day
(gpcd) water consumption
SWMP Update
(Jan ‘18)
Staff reported to City
Council that additional
analysis was needed to
determine if self-
sufficiency goal could
be met by 2020
New Contaminant at
Olympic Sub Basin
(May ‘18)
New drinking water
regulations required
additional analysis of
Olympic Sub Basin
treatment strategy
Water Self-
Sufficiency
Achieved (2023)
Figure 1: Self-Sufficiency Timeline
Discussion
Goals and Benefits of Water Self-Sufficiency
The proposed plan to meet the City’s self-sufficiency goal involves a combination of
demand reduction through various water conservation and efficiency programs and the
addition of local water supplies which will also provide the following benefits:
Long-term cost benefits to ratepayers by maximizing local water resources
Provide a more sustainable and drought-resilient water supply through a diversified
water supply portfolio
Reduce the City’s water supply energy footprint through conservation and locally
sourced water supplies
With imported water purchase costs from MWD expected to increase annually from 3 to
7 percent over the next 10 years, the primary focus of the updated SWMP was to
develop water self-sufficiency scenarios that are both sustainable and economical
compared to the continued purchase of imported water from MWD. Development of
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cost-effective local, sustainable, and drought resilient water supplies will provide Santa
Monica water ratepayers with cost benefits over the long-term and provide the City with
greater cost certainty on water rates compared to the continued purchase of imported
water from MWD.
Providing a sustainable and drought-resilient water supply through a diversified water
supply portfolio eliminates the City’s reliance on the purchase of imported water from
MWD and maintains reliable production during routine maintenance and unforeseen
downtimes of treatment equipment.
Lastly, maximizing local water resources instead of purchasing imported water from
MWD also has long-term environmental benefits for the community in terms of reduced
energy use and the associated reduction in greenhouse gas emissions, which support
Council’s goal to achieve carbon neutrality by 2050 or sooner. The addition of
alternative water supplies, expansion of local groundwater supplies, and increased
conservation will result in a 25-30% reduction of total energy footprint from the City’s
water supply compared to continued purchase of imported water from MWD.
Marching Toward Water Self-Sufficiency
The City’s water supply portfolio has progressively transformed since 2011, with the
community making significant strides toward water self-sufficiency and reduced reliance
on the purchase of imported water to supplement local water resources as indicated in
Figure 2. In 2011, after completion of the Charnock Wellfield Restoration Project, the
City was able to meet approximately 51 percent (~6,700 acre-feet per year [AFY]) of its
water supply demand through local groundwater resources and reduce the purchase of
water from MWD, which is imported from Northern California and the Colorado River, to
approximately 48% (~6,400 AFY).
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Figure 2: Overview of City’s Water Supply Portfolio from 2011 through 2017
In 2015, the City and its residents responded to severe drought conditions throughout
California with conservation efforts that resulted in a decrease in the City’s total water
demand of 14,300 AFY in 2014 by about 17% (-2,500 AFY) to approximately 11,800
AFY by 2017. Santa Monica’s population grew by about 1.6% from 92,321 to 93,834
over the same period. Conservation efforts resulted in a decrease in average annual
water consumption, measured in gallons per capita per day (GPCD), from 140 GPCD to
approximately 110 GPCD as indicated in Figure 3 and continues today even after the
governor declared an end to the drought.
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Figure 3: Historical Population Growth versus Per Capita Water Consumption
From 2015 through 2017, the City was meeting approximately 50-56% of its water
supply demand through local water sources (7,400-8,200 AFY) and 26-29% through
water conservation (approximately 2,500 AFY), with the amount of imported water
purchased from MWD dropping to approximately 26-29% (3,700-4,100 AFY). In 2017,
local groundwater supply temporarily decreased due to an extended shutdown
(approximately six months) of one well in the Charnock sub-basin for maintenance and
repair. The loss of a single well from the Charnock Sub-basin over the six-month period
and loss of approximately 800 AFY of groundwater production highlighted the need to
increase resiliency of the local water supply to maintain reliable production as the City
continues its march toward water self-sufficiency.
Refined SWMP Pathway to Achieve Water Self-Sufficiency
Additional analyses of various elements of the SWMP, as outlined at the January 9,
2018 City Council meeting, have been completed, and based on those analyses staff
now estimates that water self-sufficiency can be achieved by 2023. To achieve self-
sufficiency by 2023, staff is proposing to replace the purchase of imported water from
MWD (approximately 50% of the total water supply demand when self-sufficiency efforts
were initiated in 2011) with a comprehensive plan consisting of: 1) Component 1 -
continuing and increasing water conservation efforts to permanently reduce water
demand, 2) Component 2 - developing sustainable and drought resilient alternative
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water supplies, and 3) Component 3 - expanding local groundwater production within
sustainable yield limits.
The delay in achieving the City’s self-sufficiency goal from 2020 to 2023 is due to
several factors, including new regulations established by the State Water Resources
Control Board’s Division of Drinking Water (DDW) that required further analysis to
determine the level of treatment required for the Olympic Sub-basin, the project timeline
and permitting schedule for the SWIP project to recharge local groundwater aquifers
with purified water, and the need to confirm and refine preliminary SYA estimates with
additional data to establish an accurate estimate of the sustainable yield for the Santa
Monica Groundwater Basin.
The remainder of this staff report is organized as follows to provide detailed descriptions
of each component of the updated SWMP and its contribution/benefits toward the City’s
self-sufficiency goal:
Proposed Plan to Achieve Water Self-Sufficiency
SWMP Project Cost and Implementation Schedule
Funding Recommendations
Proposed Plan to Achieve Water Self-Sufficiency
A comprehensive plan was developed through the SWMP and comprises three
components that provide a path for the City to achieve water self-sufficiency by 2023.
The contribution of each proposed component to eliminate reliance on imported water
supply by 2023 is summarized in Figure 4 along with the percent contribution toward
replacing imported water purchases. In total, the three components: 1) conservation, 2)
alternative water supplies - production efficiency, recycled water, and purified water for
recharge, and 3) new local groundwater will contribute approximately 8,057 AFY toward
the City’s total water supply and reduce imported water purchase to only 170 AFY. A
brief description of each of the recommended components is provided below.
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New Local Groundwater,
2,100 AFY, 25%
Imported
Water (MWD),
170 AFY, 2%
Alternative Water Supply -
Purified Water (Recharge),
1,100 AFY
Alternative Water Supply -
Recycled Water , 560 AFYAlternative Water Supply
-Production Efficiency,
1,200 AFY
Conservation, 3,097 AFY, 38%
PROPOSED STRATEGIES TO REPLACE IMPORTED WATER SUPPLY (2023)
New Local Groundwater Imported Water (MWD)
Alternative Water Supply - Purified Water (Recharge)Alternative Water Supply - Recycled Water
Alternative Water Supply - Production Efficiency Conservation
Alternative Water Supply,
2,860 AFY, 35%
Figure 4: Summary of Proposed Components to Replace Imported Water Supply by 2023
Component 1 - Conservation (38% Reduction in Imported Water Purchases)
In 2014, Council authorized the significant expansion of staffing and funding to augment
the City’s water conservation efforts to address the state-wide drought and help the City
meet its self-sufficiency goal. This contributed to a water demand reduction of
approximately 20% over the past three years (2015-2017), which equates to saving
approximately 2,500 AFY. Continued implementation of the existing conservation
programs with the addition of supplemental conservation efforts is expected to continue
this trend of water demand reduction through 2040, with the staff recommended Optimal
conservation plan which is described below. Continuation of existing, and
implementation of proposed, conservation programs are essential for the City to
eliminate reliance on imported water from MWD. The recommended Optimal
conservation plan will contribute approximately 3,100 AFY to the City’s water
supply portfolio in 2023 and reduce imported water purchases by roughly 38%.
Staff modeled three conservation plans (Optimal, Enhanced, and 90 GPCD), which are
presented in gallons per capita per day by 2025 and abbreviated as GPCD. The
Optimal Conservation Plan can be completed using existing budgeted resources and
would reduce the City’s total water demand by approximately 20%, even after factoring
in demand increases associated with expected population growth through 2025.
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Increasing conservation efforts from the Optimal to the Enhanced Plan would cost an
additional $7.2 million in total program cost, on top of the budget already allocated for
the Optimal Conservation Plan, but with a marginal increase in water conserved
(approximately 2% additional reduction in GPCD with the Enhanced Plan). The
enhanced conservation plan would still require approximately 3,500 to 3,700 AFY of
water that would need to be met through the purchase of imported water or from the
development of additional local water resources. With marginal gains from increased
conservation efforts compared to the additional implementation cost required, staff is
recommending continuing with the optimal conservation plan, which costs
approximately $708/AF of water saved.
A third, aggressive conservation plan was also studied following a request by the Task
Force on the Environment to evaluate the cost and feasibility of reducing city-wide water
demand to 90 GPCD by 2025. The assessment of the 90 GPCD Plan conducted by
staff concluded that reducing overall water demand to 90 GPCD would be extremely
costly and may not be feasible for implementation. The overall cost to implement this
plan would exceed $56.6 million, with $40 million of the cost incurred over the first five
years. In addition to the significant cost premium, this scenario would likely require
additional staffing and would be very challenging to achieve by 2025.
Staff met with industry experts to review and receive input on the City staff modeling of
proposed conservation programs. A panel of outside experts supported both the optimal
and enhanced conservation plans and the proposed programs that comprise them. A
summary of the conservation scenarios evaluated is provided in Table 1.
Table 1: Summary of Conservation Scenarios Considered
Description1 Conclusion Cost
Optimal,
108 GPCD
Best Conservation option
Does not achieve self-sufficiency
goal by itself but supports demand
reduction.
Within current operating budget
$708/AF (over 30 years) 2
Enhanced,
106 GPCD
Feasible but expensive compared to
Optimal Plan. Requires 1.5 new
staff for 10 years
$7.2 million increase in program
costs compared to Optimal
(2018-2023)
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Does not achieve self-sufficiency
goal
Not worth the incremental cost for a
2GPCD reduction.
137% increase in budgeted costs
(2018-2013)
$1,078/AF (over 30 years) 2
Aggressive,
90 GPCD
Potentially feasible but very
expensive, requires 2.5+ new staff
for 10 years
Does not achieve self-sufficiency
goal
$40.8M over the first five years;
$58.6 M 2019-2040,
800% increase in costs (2018-
2023) compared to Optimal
Scenario
~$1,280/AF (over 30 years)2
1GPCD based on water conservation efforts achieved as of 2025
2Excluding ongoing conservation staffing cost.
Due to conservation efforts since 2015, the City’s current water demand measured in
gallons per capita per day (GPCD) is approximately 110 GPCD. Staff also conducted a
theoretical exercise to determine what would be required for the City to become water
self-sufficient solely through conservation efforts (assuming no imported water and no
additional local water production). Results of that exercise indicated that the total per
capita water demand would need to be reduced to 64 GPCD. Staff consulted water
conservation experts, analyzed conservation efforts in other cities and evaluated
various local conservation scenarios and determined that attempting to achieve the self-
sufficiency goal through conservation alone (i.e. achieving 64 GPCD in Santa Monica) is
neither financially feasible nor realistic within the time horizon.
However, the community should be commended on the conservation efforts already
taken to reduce water demand and decrease imported water purchased from MWD.
Santa Monica is - and can be - a model for a new ethic of resource self-sufficiency and
environmental sustainability. The Council’s recent adoption of the 100% renewable
default rate for community electric supply represents this ethos of “living within our
means.” Conservation will continue to play a critical role in the City’s march toward
water self-sufficiency by continuing to reduce overall water demand in the face of
continued population growth from new housing and demand from the commercial and
institutional sectors of our local economy.
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Based on the modeling described above, staff recommends pursuing the Optimal
conservation plan, which continues the successful conservation programs initiated over
the past three years and increases water conservation in untapped areas such as:
Funding of retrofits in Santa Monica-Malibu Unified School District facilities and
landscapes
Commercial sector fixture retrofits and enhanced rebates
Coin-operated laundry machine retrofits
Increase in Water Neutrality offsets and direct installs
Rebates for new technologies including gray and black water systems
Enhanced water conservation education and enforcement
Additional sustainable landscape conversions
Outreach to assist customers on how to properly adjust their irrigation timers
New marketing and outreach campaign focusing on instilling permanent
conservation behaviors consistent with the state’s forthcoming framework for
“Making Water Conservation a California Way of Life”
Incorporating limited-term employees as part of the permanent water conservation
team to ensure new state requirements and regulations are met, as well as
maintaining programs at an effective level
In developing the water conservation plan to reach and maintain self-sufficiency, the
City evaluated the potential for further water efficiency and conservation in all customer
sectors. This included an assessment of the current level of water fixtures in the city, as
well as identifying where the greatest opportunity for reducing water consumption
existed. Based on this analysis, a program plan was developed to reach the City’s long-
term objectives via existing and new conservation programs.
Table 2 shows the projects planned over the next five years including the number of
activities for each program such as number of rebates, consultations and direct
installation of water efficient fixtures to replace inefficient fixtures in existing buildings
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throughout the city. The projected number of activities is based on historical
participation, available market of opportunity, and strategic community engagement
campaigns to increase programs over multi-year periods. The table also includes the
estimated water savings and total costs from 2018 through 2023 when water self-
sufficiency is expected to be reached.
Table 2: Summary of Optimal Water Conservation Programs and Results
Measure Customer Class Total Activities
2018-2023
Total Water Savings (AF)
2018-2023
Rebates, Single Family
(i.e. clothes washers, landscape, soil sensors, toilets, irrigation)Single Family 4,660 286
Water Use Consultations, Single Family Single Family 720 58
Graywater System Incentive Single Family 60 1
Direct Installs, Single Family
(i.e. 0.80 gpf toilets, water neutrality) Single Family 0 0
Direct Installs, Multi-Family
(0.80 gpf and 1.06 or less gpf toilets)Multi-Family 3,750 124
Rebates, Multi-Family
(i.e. high-efficiency clothes washers, landscape, toilets)Multi-Family 1,475 94
Water Use Consultations, Multi-Family Multi-Family 750 90
School Education Program Institutional 2,090 14
Direct Installs, Santa Monica Malibu Unified School District
(i.e. 0.80 gpf and 0.125 gpf toilets and urinals, water neutrality) Institutional 537 9
Santa Monica Malibu Unified School District Weather Based
Irrigation Controller Incentive Institutional 22 21
Santa Monica Malibu Unified School District Landscape
Incentive Institutional 9 8
Rebates, Commercial & Institutional
(i.e. ice machines, toilets, urinals, toilets, irrigation)Commercial & Institutional 1,792 260
Direct Installs, Commercial & Institutional
(i.e. toilets and urinals) Commercial & Institutional 3,280 517
Water Use Consultations, Commercial & Institutional Commercial & Institutional 300 45
Performance Pays Commercial & Institutional 4 9
Soil Moisture Sensor Rebates Multi-Family, Commercial &
Institutional 75 7
Water Saving Devices - Faucet Aerators All 9,240 328
Water Saving Devices - Showerheads All 4,200 160
Community Outreach & Education All 16 1
Pilot Projects All 2 2
32,982 2,034Total
The financial summary of the Optimal Conservation Plan is provided in Table 3.
Table 3: Financial Summary of Optimal Water Conservation Plan
Average Water Savings (AFY)
610
Cost of Savings per Unit Volume ($/AF)
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$708
Modeling of the water conservation plan was purposefully conservative and only
includes expected water demand reductions directly related to City efforts. Therefore,
the projected demand reductions do not include the potential savings from efficiency
improvements in California State Plumbing Codes known as “passive conservation.”
Passive water conservation is achievable through non-City sponsored programs, such
as maximizing current plumbing code enforcement, landscape ordinances, natural
fixture replacement rates, as well as future local and state regulations and codes. This
includes the impact and enforcement of the legislation, California SB 407, requiring
noncompliant plumbing fixtures in any single-family residential and multi-family
residential, and commercial properties to be replaced by the property owner with water-
conserving plumbing fixtures.
Through the currently established programs, proposed new programs, and passive
conservation, it is estimated that the City can reach 99 GPCD by 2025 and 96 GPCD by
2030. These efforts would result in an estimated additional annual savings between 680
acre-feet (AF) per year by 2025 and as much as 1,000 AF per year in 2030. The City
allocates funding for conservation within the water fund annual operating budget; no
additional funding would be required to implement the Optimal Conservation Plan. Staff
will return during the Five-Year Rate Study to present long-term staffing options for the
recommended Optimal Conservation Program.
Component 2 - Alternative Water Supplies (35% Reduction in Imported Water
Purchases)
To further diversify the City’s water supply portfolio and increase overall resilience,
three alternative water supply projects are proposed and collectively offset
imported water purchases from MWD by 35 percent (see Figure 4). These projects
include:
Increase recycled water production through the Sustainable Water Infrastructure
Project (SWIP), upgrading the existing Santa Monica Urban Runoff Recycling
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Facility (SMURRF) and constructing a new Advanced Water Purification Facility
(AWPF) that provides a drought resilient, local water supply. The increase in
recycled water production from SMURRF would offset imported water purchases
from MWD by approximately 4% (approximately 560 AFY).
Recharge local groundwater aquifers in the Olympic Sub-basin to maintain
sustainable yield pumping levels with purified water from the SWIP’s AWPF. The
purified water from the AWPF would offset imported water purchases from MWD by
approximately 7% (approximately 1,100 AFY).
Upgrade the City’s Arcadia Water Treatment Plant (WTP) with new technology to
increase overall production. Closed Circuit Reverse Osmosis (CCRO) would be
added to the Arcadia WTP to treat the Reverse Osmosis concentrate waste stream,
which is currently discharged to the sewer system, and increase the overall
treatment efficiency at the Arcadia WTP to approximately 90 percent, or greater. The
addition of CCRO at the Arcadia WTP would offset imported water purchases from
MWD by approximately 8% (approximately 1,200 AFY).
The SWIP project is a major component of the alternative water supply for the City as it
will provide a sustainable and drought resilient water supply by providing purified water
to recharge local groundwater aquifers. In return, the aquifer recharge that will be
provided by the SWIP will allow the City to maximize groundwater pumping, within
sustainable yield limits, from the Olympic Sub-basin.
Component 3 - New Local Groundwater Production (25% Reduction in Imported
Water Purchases)
To offset the remaining imported water purchased from MWD, local groundwater
production would need to be increased to reduce imported water purchases from
MWD by 25% and resiliency measures implemented to maintain reliable production.
Staff developed and analyzed seven scenarios to expand the City’s groundwater
production and carefully vetted each scenario internally and with outside industry
experts. The seven scenarios were compared based on project feasibility, capital, and
operation cost, and are summarized in Attachment C. All scenarios evaluated assume
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that the Optimal Conservation Plan is implemented. Of the seven scenarios evaluated,
Scenario 1 - Expansion of Arcadia WTP with Closed Circuit Reverse Osmosis (CCRO)
combined with a Separate Olympic Sub-basin Pipeline and Treatment at the Arcadia
WTP site is recommended. Scenario 1 combined with the Optimal Conservation Plan is
the most cost-effective solution to achieve self-sufficiency and maximize local water
resources. Scenario 1 includes the following elements:
Expansion of the Arcadia WTP, including CCRO technology (as discussed under
component 2 - alternative water supplies), to increase treatment capacity and
accommodate future 2040 water demands.
Acquisition of a new groundwater well to enhance resiliency.
Olympic Sub-basin Restoration:
o A new pipeline separating Olympic Sub-basin water, conveying it independently
to the Arcadia WTP, thus requiring a smaller treatment facility at the Arcadia
WTP to remove contaminants in the Olympic Sub-basin.
o Separate contamination treatment facility at the Arcadia WTP for the Olympic
basin.
Expansion at Arcadia WTP
To support development of alternative water supplies and restoration of the Olympic
Sub-basin, treatment capacity expansion and plant upgrades are required at the
Arcadia WTP to support an overall increase in water production and enhance resiliency
to achieve water self-sufficiency. The Arcadia WTP is currently capable of treating up to
approximately 11,300 AFY (10 million gallons per day [mgd]) and produce 9,900 AFY
(8.9 mgd) of treated water (approximately 82% recovery or efficiency). The proposed
expansion and addition of new technologies to increase production efficiency at the
Arcadia WTP will increase its treatment capacity to approximately 14,700 AFY (13 mgd)
and produce 13,400 AFY (12 mgd) of treated water (approximately 92% recovery or
efficiency). The proposed improvements for expanding production capacity at the
Arcadia WTP and enhancing water supply resiliency include:
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Acquire an additional groundwater well to enhance resiliency and maintain
production during routine maintenance or unforeseen downtimes of groundwater
wells, while aggressively pumping within the sustainable yield.
Install new CCRO to increase overall plant efficiency to 90 percent or greater (as
discussed previously under component 2 - alternative water supplies).
Expand capacity (e.g., pumps, blowers, cartridge filters, etc.) of the Arcadia WTP to
accommodate increased groundwater production and new technologies (e.g., CCRO
described in Component 2).
Olympic Sub-basin Restoration
The Olympic Sub-basin plays a key role in achieving the City’s water self-sufficiency
goal as it could provide up to 3,200 AFY of groundwater and is also the location where
purified water from the SWIP will be recharged to sustain this pumping rate. However,
the Olympic Sub-basin contains several contaminants that would require additional
treatment to meet drinking water standards. The key contaminants in the Olympic Sub-
basin include: 1,2,3-Trichloropropane (1,2,3-TCP), 1,4-Dioxane, trichloroethylene
(TCE), and tetrachloroethylene (PCE). Drinking water regulations, or maximum
contaminant levels (MCL), have been in place for TCE and PCE prior to January 2018,
and regulations for 1,2,3- TCP were established after January 2018 which required
further treatment analysis. 1,4-Dioxane is currently on the State of California’s drinking
water Notification Level (NL) list, which is a health-based advisory level and not an
MCL. It is anticipated that the NL of 1 microgram per liter (g/L) or part per billion (ppb)
for 1,4-Dioxane will likely become an MCL in the near future (within next 5 years).
Further analysis of treatment options for the Olympic Sub-basin was required due to a
recently established drinking water regulation that established a MCL for 1,2,3 TCP at 5
parts per trillion (ppt), and additional data on 1,4 Dioxane was available to refine the
treatment analysis to determine if the current 1 ppb NL (anticipated future MCL) could
be met once full production of the Olympic Sub-basin is restored. The Olympic Sub-
basin treatment analysis was performed by an outside consultant, Black & Veatch. Key
findings of the treatment analysis are listed below:
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1,2,3-TCP was only detected at one well, SM-4, and the MCL of 5 ppt could be met
through blending with other wells at full production capacity.
1,4-Dioxane is present in all three wells (two existing and one future) and could limit
groundwater production from the Olympic Sub-basin to 845 AFY or approximately
25% of the basin’s total sustainable yield.
Other contaminants, TCE and PCE, do not impact groundwater production from the
Olympic Sub-basin as they would be removed through existing treatment processes
at the Arcadia WTP.
To maximize groundwater production from the Olympic Sub-basin and comply with
regulation on the key contaminants of concern, the following improvements are
recommended:
Increase groundwater pumping from existing wells (SM-3 and SM-4), complete
equipping and permitting of one recently installed new well (SM-8) and install a
replacement well (SM-9) to increase local production from this sub-basin to ~3,200
AFY within sustainable yield levels. Please note that purified water from the SWIP
will be used to recharge the Olympic Sub-basin that helps maintain the sustainable
yield levels by supplementing naturally available groundwater within the sub-basin.
Design and procurement efforts are currently underway, and the well projects were
previously approved by Council in the FY 19-20 Capital Improvement Budget.
Construct a new pipeline to separate Olympic Sub-basin groundwater from
Charnock wellfield groundwater for separate treatment at the Arcadia WTP, primarily
to target removal of 1,4 Dioxane. This reduces the amount of water needing
treatment since only the Olympic Sub-basin flows (3,200 AFY) contain 1,4 Dioxane.
If the flows are not separated, 14,700 AFY (Olympic + Charnock) would need to be
treated.
Construct a new contamination treatment facility for only the Olympic Sub-basin
flows to remove 1,4 Dioxane, 1,2,3-TCP, TCE, and PCE at the Arcadia WTP site.
The proposed treatment train consists of the ultraviolet light advanced oxidation
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process and granular activated carbon. With the new contamination treatment facility
and increased production efficiency (90-92% recovery) at the Arcadia WTP,
approximately 2,900 AFY of treated water will be produced from the 3,200 AFY
extracted from the Olympic Sub-basin. The new contamination treatment facility will
provide high-quality drinking water that meets current and future regulatory
standards.
Sustainable Yield Update
The sustainable yield from the Santa Monica Groundwater Basin is a critical component
to ensure overall groundwater production is within sustainable limits of the basin and
could support the proposed projects described above on an ongoing basis. A
preliminary Sustainable Yield Analysis, (SYA), prepared by Richard C. Slade &
Associates (Slade) in 2017, was presented to Council in January 2018. Since then,
additional work was performed to refine and update the SYA. Additional work included
the Coastal Sub-basin Exploratory Boring Program and a digital elevation mapping
study that analyzed the potential recharge from the nearby mountain front. The updated
report contains findings from this recently completed work as well as 2017 data
regarding rainfall, geology, static water levels in key wells, and groundwater withdrawals
from active City wells and other known private well owners (Attachment D). The
updated SYA estimate from Slade’s analysis for the Santa Monica Basin is between
11,800 and 14,725 AFY.
To substantiate the assessment conducted by Slade, City staff contracted with
consultants from ICF to perform a separate estimate of the sustainable yield using a
water-balance approach. This method compares the amount of water that recharges
into a basin (inflow) from a wide range of sources (natural and anthropogenic), with the
amount of water leaving the basin (outflow) from losses caused by pumping,
evapotranspiration, basin outflow, etc. ICF’s assessment also considered findings from
both the digital elevation mapping and Differential Interferometric Synthetic Aperture
Radar Study (DInSAR) studies, presented to Council in January 2018. Based on ICF’s
water-balance approach, average sustainable yield was estimated to be between
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11,416 AFY to 13,722 AFY. The similarity of the sustainable yield estimates developed
by Slade and ICF using different modeling methods provide a strong level of confidence
that the City can use local groundwater resources in an ongoing manner into the future
without negatively impacting the basin or creating overdraft conditions.
It should be noted that the estimates developed by Slade and ICF are conservative and
do not include a sustainable yield estimate for the Crestal Sub-basin. In addition, all
estimates of sustainable yield are transitory due to myriad associated climatic and
hydrogeologic factors that are constantly in flux. The State legislature enacted the
Sustainable Groundwater Management Act (Water Code sections 10720 et
seq.)("SGMA"), which became effective on January 1, 2015. A portion of the 50-square
mile Santa Monica Basin that underlies Santa Monica has been designated by the
Department of Water Resources as a "medium-priority" groundwater basin. Any
groundwater basin designated as medium-priority must be managed under a
groundwater sustainability plan (“GSP”) adopted by a local groundwater sustainability
agency and approved by the Department, by January 31, 2022. In light of SGMA,
further analysis will be required to determine if future demand will exceed what could be
sustainably pumped from the basin. If it is determined that the City’s plans to extract
more groundwater is not supported in the approved draft of the GSP, then the City may
be precluded from withdrawing groundwater in excess of the then-projected sustainable
yield and the City would need to continue purchasing imported water from MWD to meet
its potable water demand. The potential limitations on future groundwater withdrawals
from the City’s active sub-basins indicate that the City’s approach of pursuing
nonconventional resources, indirect potable reuse via aquifer recharge, additional water
supply wells in the Coastal sub-basin, replacement of underperforming wells, increasing
treatment efficiency at the Arcadia Water Treatment Plant, and continuing conservation
efforts are necessary for the City to achieve and sustain its long-term objective of
independence from imported water. Future updates of the SYA and numerical models
will further refine the sustainable yield for the basin. Going forward, the City is planning
to update the SYA approximately every two to three years. Future updates will include
additional findings from work being conducted jointly with the US Geological Survey
(USGS) and an ongoing climate stress test evaluation by the Rand Corporation. The
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City plans to produce groundwater within the upper limit of the estimated sustainable
yield, while taking into consideration two irrigation pumpers in the Arcadia Sub-basin
and one in the Crestal in addition to one diminutive residential irrigation well.
Summary of Proposed Plan to Achieve Water Self-Sufficiency
The three components proposed in the SWMP will help the City achieve water self-
sufficiency by 2023 and eliminate the City’s reliance on imported water purchases from
the MWD. The projected makeup of the City’s water supply portfolio is summarized in
Figure 5, and contribution from each component to the City’s total water supply is
provided in Table 4. The location for each of the three components is provided in Figure
6, and the synergy and inter-relationship between each component is illustrated in
Figure 7. Achieving water self-sufficiency through a diversified water supply portfolio
also provides the City with greater cost control over water rates as compared to the
continued purchase of imported water from the MWD. As noted previously,
approximately 1 percent of the water supply would continue to be made up of imported
water purchased from the MWD as periodic circulation is required to maintain the supply
line as an emergency backup for the City.
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New Local
Groundwater
13%
Imported Water
(MWD)
1%Alternative Water
Supply -Purified
Water (Recharge)
Alternative
Water Supply -
Recycled Water
Alternative Water Supply -
Production Efficiency
Conservation
20%
Local Groundwater
47%
WATER SELF-SUFFICIENCY BY 2023
New Local Groundwater Imported Water (MWD)
Alternative Water Supply - Purified Water (Recharge)Alternative Water Supply - Recycled Water
Alternative Water Supply - Production Efficiency Conservation
Local Groundwater
Alternative
Water Supply
19%
Figure 5: A Sustainable and Drought Resilient Water Supply Portfolio Achieved through Self
Sufficiency
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Table 4: Summary of Water Supply Contribution from Each Self-Sufficiency Component
Water Self Sufficiency Component Estimated
Water Supply
Contribution
by 2023 (AFY)
%
Reduction
in Imported
Water
Estimated
$/AFY
Component 1 - Conservation
Optimal Conservation Plan 3,100 38% $708
Component 2 – Alternative Water Supplies
Recycled Water from SMURRF 560 7% $4201
Purified Water from SWIP to
Recharge Olympic Sub-basin
1,100 13% $1,0171
Increase Production Efficiency at
Arcadia WTP
1,200 15% $1,0711
Component 3 – New Local Groundwater Production
Arcadia WTP Expansion and
Resiliency Enhancement2
N/A N/A $7051
Olympic Sub-basin Restoration 2,100 26% N/A3
Subtotal 8,060 99%
Existing Water Resources
Existing Local Groundwater
(2023 projected costs)
7,330 $1,100
Imported Water from MWD
(to maintain for emergency use, 2023
projected costs)
170 $1,248
Subtotal 7,500
TOTAL WATER
RESOURCES (2023)
15,560
1Estimated year 1 cost when project is complete and includes savings from avoided imported water
purchase cost
2Aracadia WTP upgrades to accommodate increase in production efficiency and Olympic Sub-basin
Restoration
3Olympic Sub-basin Restoration will be paid for through settlement funds
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•Olympic Sub-Basin Restoration
•Recharge with SWIP
•Production Efficiency and Capacity
Expansion at Arcadia WTP
•Separate Olympic Pipeline +
New Treatment
•CBI Tank
•SWIP
Well Acquisition to
Enhance Resiliency
Figure 6: Project Locations of Proposed SWMP Component Toward Self-Sufficiency
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Figure 7: Synergy between Proposed Water Supply Components to Achieve Self-Sufficiency
SWMP Cost Summary and Implementation Schedule
A cost summary for the proposed SWMP components to achieve self-sufficiency by
2023 is provided in Table 5. The funding required to complete the capital projects
increasing local water supplies and enhance water supply resiliency is $38 million. A
Five-Year Rate Study (2020-2024) is currently underway and will present funding
solutions to cover these costs. It is projected that the components of the proposed
SWMP may be funded primarily through the issuance of water revenue bonds
(approximately $34.75 million), with the debt service on the bonds incorporated into
water rates, and from a contribution from the Wastewater Fund (approximately $3.25
million). Staff will return to Council in spring 2019 for a rate study session. An additional
$64 million from existing water-contamination settlement funds would be used for
restoring the Olympic Sub-basin, which would allow additional water production from
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that sub-basin to support water self-sufficiency. The Olympic Sub-basin restoration cost
includes an approximate, one-time $20 million capital expenditure for treatment systems
and 30 years of ongoing operation and maintenance for an additional $20 million. Based
on current modeling projections by ICF, over 80% of the Olympic Sub-basin will be
remediated within the first 30 years; however, the Sub-basin may not be completely
restored. Thus, the remaining balance in the settlement fund ($24 million) should be
reserved to address any contamination that may still be present after 30 years or any
new regulations that may impact use of the Olympic Sub-basin. A more detailed
discussion on recommended budget appropriations is provided below.
Table 5: SWMP Cost Summary for Proposed Components to Achieve Self-Sufficiency
Unfunded Projects Additional Cost
Arcadia WTP: Expand Capacity and Production Efficiency
Enhancement
$30M
Additional Well and Improvements: Increase Resiliency and
Ground Water Production
$8M
Olympic Sub-basin Restoration, Capital Improvements and 30
years of Operations and Maintenance
$40M
Olympic Sub-basin Restoration Reliability Reserve $24M
Total: $102M
Implementing the SWMP and reaching water self-sufficiency by 2023 entails numerous
capital projects that are interrelated. An overview of the proposed implementation
schedule is provided in Figure 8. Several well projects (SM-8, SM-9 and injection well)
were approved by Council on July 11, 2017 and on June 12, 2018 and are on track to
be completed by 2021 (Attachments E and F, respectively). A portion of the projects are
in the City of Los Angeles and require installation of pipelines. Construction and
permitting of pipelines in the City of Los Angeles will take time and was considered in
the schedule. The design, construction, and permitting of improvements at the Arcadia
WTP, including efficiency upgrades, are expected to be completed in 2023 if
procurement starts in December 2018. A schedule contingency of approximately six
months has been included to account for unforeseen conditions or new regulations that
could impact the plan implementation.
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Figure 8: Proposed Implementation Schedule to Achieve Self-Sufficiency by 2023
Alternatives to Water Self-Sufficiency
The proposed SWMP components summarized above are a considerable investment
towards the City’s future resiliency and achieving water self-sufficiency by 2023. In
consideration of the capital investment and impacts to water rates, staff has also
evaluated potential alternatives to reduce capital expenditures to potentially provide
relief to potential water rate increases (to be confirmed in the Five-Year Rate Study for
2020-2024). A summary of potential alternatives that may reduce upfront capital
investment compared to the proposed water self-sufficiency plan is provided in Table 6.
The capital cost summarized in Table 6 for each alternative is the capital cost that
needs to be funded and does not include the $64 million in settlement funds that will be
used for the Olympic Sub-basin restoration. For all alternatives, it is assumed that the
Olympic Sub-basin restoration will be implemented. A brief description on which
component is implemented and its associated capital cost to be funded is provided.
Staff also considered delaying self-sufficiency goal to beyond 2023 and delaying capital
expenditures to ease rate increase over the next five years. However, delaying
implementation may result in increasing overall project cost due to inflation and negate
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any potential up front capital savings. The alternatives summarized in Table 6 only
consider reduction in upfront capital cost and do not include projected increase of
imported water purchase from MWD (estimated to be at 5% annual increase), which will
ultimately be more expensive than locally produced water.
Table 6: Summary of Alternatives Considered for Self-Sufficiency
Alt. No. Alternatives
Description
Capital
Cost3
Locally Sourced
Water +
Conservation
Imported
Water
Purchase
from MWD
Staff
Recommended
Plan
99% water self-
sufficiency1 Component
1 - Conservation
Component 2 -
Alternative Water
Supplies Component 3 -
New Local Groundwater
$38M 11,730 AFY
(Existing Arcadia
WTP + Olympic)
3,100 AFY
(Conservation)
560 AFY
(Recycled
Water)2
170 AFY
1 87% water self-
sufficiency1 Implement
only SWIP and Olympic
Sub-Basin Restoration.
Acquire new well to
enhance resiliency at
Arcadia WTP. No
expansion and
production efficiency
enhancements at Arcadia
WTP
$8M 9,900 AFY
(Existing Arcadia
WTP + Olympic)
3,100 AFY
(Conservation)
560 AFY
(Recycled
Water)2
2,000 AFY
2 90% water self-
sufficiency1 Implement
SWIP, Olympic
restoration, and
expansion at Arcadia
WTP. No production
efficiency enhancements
at Arcadia WTP. Results
in loss and negative
impact to treatment
resiliency.
$21M 10,500 AFY
(Existing Arcadia
WTP + Olympic)
3,100 AFY
(Conservation)
560 AFY
(Recycled
Water)2
1,400 AFY
3 94% water self-
sufficiency1 Implement
SWIP, Olympic
Restoration, expansion
$30M 10,900 AFY
(Arcadia WTP +
Olympic) 3,100
AFY
1,000 AFY
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and production efficiency
upgrades at Arcadia
WTP. Do not acquire a
new well to enhance
resiliency.
(Conservation)
560 AFY
(Recycled
Water)2
1Percentages are based on year 2023 projected demand. 2560AFY of recycled water to be available in
2023, but actual usage of full capacity may not be until 2040. 3Excluding Olympic Sub-Basin restoration cost,
which is funded through settlement funds and SWIP capital costs as it is already funded through a low
interest loan from the State of California.
The alternatives evaluated by staff are simply presented as scenarios to reduce capital
expenditures over the next five years but does not provide a complete solution to
achieve the City’s water self-sufficiency goal.
Funding Recommendations to Achieve Water Self-Sufficiency
A financial analysis for the plan outlined in this report to achieve water self-sufficiency
was conducted by staff. The financial analysis includes comparing the future cost of
imported water to the projected cost of locally produced water over a 30-year period.
This analysis excluded the Olympic Sub-basin restoration costs, as the recommended
funding source would be from groundwater settlement funds received by the City from
outside sources to cover the costs for remediating the contaminants in that sub-basin. In
summary, locally produced water from the recommended SWMP components outlined
in this report is projected to cost between $400/AFY to $1,100/AFY, which is less than
the expected cost to purchase imported water from the MWD at $1248/AFY in 2023.
Please refer to Table 5, presented previously, for a detailed breakdown on the cost per
acre-foot for each local water supply component. A comparison of the projected cost
differential between the purchase of imported water from the MWD and production of
locally produced water is provided in Table 7. With locally produced water cheaper than
imported water costs, the components outlined in the SWMP to achieve water self-
sufficiency by 2023 are a positive investment toward the future of the City. Ratepayers
will benefit from the implementation of these projects, thus keeping local water costs low
compared to the ongoing cost increases for imported water. Not only does the proposed
SWMP provide a sustainable and drought resilient water supply for the City, it would
also benefit the ratepayers with greater control over future water rates compared with
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imported water rates that are projected to increase at a higher rate and are outside the
City’s control.
Table 7: Future Estimated Imported Water Cost (increased at 5%) Compared to Projected
Locally Produced Water Cost. Assuming Efficiency (CCRO) technology is installed and
2,800AFY is produced.
As noted previously, staff recommends a combination of bonding and use of settlement
funds to fund the capital projects supporting water self-sufficiency and the Olympic Sub-
basin restoration.
Water Revenue Bond: A rate study is currently being conducted through October 2019
to set water and wastewater rates for calendar years 2020 to 2024. The rate study will
address options to support the costs of this plan. A possible funding solution, to be
confirmed in the rate study, is the issuing of a 30-year water revenue bond totaling
approximately $34.75 million to increase local water supplies and enhance resiliency as
outlined in the SWMP. The remaining $3.25 million would be contributed from the
Wastewater Fund due to joint property use. The $34.75 million in bonds would cover
new well acquisition, treatment capacity expansion and implementation of new
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technologies to enhance production efficiency at the Arcadia WTP, and other supporting
infrastructure upgrades. The Water Fund would need to cover an annual payment of
approximately $2.2 million over the next 30 years to fund the projects outlined in the
SWMP. Assuming a bond is issued, Figure 9 illustrates projected annual savings from
avoiding imported water purchases and estimated annual bond repayments. In year
2036, where the two lines cross, the City will start saving money for rate payers on an
annual basis. This analysis assumes imported water cost from MWD will increase at an
annual rate of 5%. The total money borrowed is estimated to be offset by cumulative
savings in the year 2048.
Figure 9: City’s Projected Annual Savings due to Local Water Production in lieu of Import
Water Purchases, compared to the Payments (debt service) for a 30 Year Bond.
Settlement Funds Usage - The current balance of Gillette/Boeing funds available to
program is $64.1 million. This balance includes $11.1 million transferred and currently
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available in the Water Fund as authorized by Council on January 9, 2018 and $53.0
million in the General Fund. Staff recommends transferring $53.0 million from the
General Fund to the Water Fund to be used to restore the Olympic Sub-basin.
Additionally, to satisfy the settlement agreement, Boeing still owes the City three
payments totaling $11.0 million. Staff recommends depositing these funds directly into
the Water Fund.
Approximately $20 million would be used to construct a new treatment facility to remove
the contaminants currently present in the sub-basin and $20 million would be reserved
for operation and maintenance costs of the treatment facility related to restoration of the
Olympic Sub-basin over a 30-year period. Due to uncertainty with the Olympic Sub-
basin restoration after 30 years, staff recommends setting aside the remaining $24
million of Gillette/Boeing funds as a reliability reserve. The remaining $11.0 million that
has been previously transferred to the Water Fund, is currently being used for
groundwater modeling, monitoring, and reporting in support of Olympic Sub-basin
remediation.
With the proposed injection of advanced purified water from the SWIP into the Olympic
Sub-basin, staff will revisit this timeframe and report back to Council in the future once
recharge operation begins.
Grants - Staff will identify and apply for state and/or federal grants to help offset the $38
million capital investment and return to Council in early 2019 with resolutions required
for grant applications if available for the proposed projects. Staff has engaged a grant
consultant to assist in the process. Grants being considered are:
MWD, Local Resources Program
California Department of Water Resources, Water Quality, Supply, and
Infrastructure Improvement Act of 2014 (Proposition 1).
Previously Authorized Water Rate Increase
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On February 24, 2015, the City Council adopted Resolution Number 10867 (CCS) to
authorize water rate increases over a five-year period, beginning March 1, 2015.
The five-year water increase schedule was adopted after Council’s consideration of a
rate study conducted by Kennedy Jenks Consultants. Resolution Number 10867 (CCS)
also contained a provision, giving Council flexibility to approve a suspension of each
annual increase, in whole or part, beginning with the 9% scheduled increase for January
1, 2016. This resolution was adopted without a majority protest, following a noticed
public hearing in accordance with Proposition 218. Since adoption of this resolution,
Council has partially suspended the full increases authorized for 2016-2018, and
instead approved 5% increases for each of those years due to:
Actual water sales revenues exceeded expectations during 2015 to 2017.
Actual operating and capital expenditures lower than expected. Resulting savings
were applied to conservation programs, water main replacements and partially
suspending planned 9% annual rate increases to more modest 5% increases.
State of the Water Fund and Forthcoming 2019 Rate Adjustment Justification
Staff will return to Council on January 8, 2019 for a public hearing and to obtain
authorization for the full 9% water rate increase previously approved by Council on
February 24, 2015 for calendar year 2019. If approved this would result in a monthly
increase of $4.33 to average single-family customer. This is the final year of a five-year
rate adjustment cycle approved via resolution as mentioned above.
A summary of rate increases from 2015 is provided in Table 8.
Table 8: Rate Increase History
Calendar
Year
2015 2016 2017 2018 2019
Effective Date March 1,
2015
January
1, 2016
January 1,
2017
January 1,
2018
January 1,
2019
Maximum
Authorized
Increase
9% 9% 9% 9% 9%
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Actual
Increase*
9% 5% 5% 5% 9%**
Date Actual
Increase
Authorized
February
24, 2015
February
23, 2016
November 22,
2016
January 9,
2018
**public
hearing on
January 8,
2019
The full implementation of the 9% previously authorized adjustment would be sufficient
to allow the City to:
A) Deliver potable water to Santa Monica customers reliably, safely and sustainably
in compliance with federal and state regulations.
B) Fund operating and capital budgets that are necessary to implement the City's
self-sufficiency goals to encourage water conservation and sustainability, as
contemplated in the City's 2014 water rate analysis.
C) Continue to implement infrastructure improvements associated with replacing
aging existing infrastructure facilities comprised of water mainlines that are
approaching the end of their useful lives.
The 9% rate increase would provide sufficient funding to complete the following capital
projects as contemplated in the City's 2014 water rate analysis and to continue progress
toward the City’s water self-sufficiency goal:
1. Additional capacity improvements, which include Preliminary Design for the
Arcadia Treatment Capacity Expansion and Enhancement Project - $3.18 million
in FY 2018-19. As noted in the prior section, the design would upgrade pumps,
blowers, cartridge filters, and other equipment at the treatment plant to
accommodate increased groundwater production and new technologies. The
design would also incorporate a new process (CCRO) to increase overall plant
efficiency to 90% or greater (as discussed previously under component 2 -
alternative water supplies.
2. New Groundwater Resiliency Well - $6,825,000 in FY 2018-19 for acquisition of a
new groundwater well to enhance resiliency. Also limit future exposure to
imported water.
3. Water Main Replacement Cost Escalation - an increase of $2,000,000 starting in
FY 19-20. The rate increase is necessary to fund the sharp increase observed in
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water main replacement construction costs. Water main contract awards in 2017
and 2018 have returned bids of $600 to $700 per linear foot in the current high-
cost construction environment. These costs have increased from a prior $400 per
linear foot estimate. The budget was established at $4 million per year. However,
staff is now estimating a need of $6 million per year to implement the
recommended 100-year water main replacement cycle (2 miles replaced per year
for the City’s 205-mile water main system. Maintaining a $4 million per year
budget would only yield replacement of 1.1 to 1.25 miles of pipeline per year,
thus increasing the replacement cycle from 100 years to approximately 160 to
190 years. Staff recommends staying on a 100-year replacement cycle to
maintain operational reliably.
Council approval of the full 9% rate increase would also help fund the following
ongoing operational expenditures:
1) Metropolitan Water District (MWD) of Southern California - $5 million per year
from FY 2020-21 to FY 2022-23 (additional $8.7 million) to ensure sufficient
funding for imported water deliveries prior to achieving water self-sufficiency.
2) City Yards Master Plan - Required contribution from the Water Fund for
upgrades to City Yards - $4 million modeled, actual costs to be determined.
As noted above, staff will return to Council on January 8, 2019 with a recommendation
that Council adopt the full 9% rate increase for calendar year 2019 as previously
authorized in 2015. The staff report will include a detailed justification for the 9% rate
increase as well as a 10-year fund forecast, cost comparison with other water agencies
and an analysis of impacts to ratepayers.
Funding Summary
Table 9 provides a summary of funding recommendations to implement the SWMP. As
noted above, staff also recommends that Council approve funding for three Capital
Improvement Program (CIP) projects, which would commence in FY 2018-19:
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Arcadia Capacity Expansion and Enhancement Project, Preliminary Design
($3,180,000)
New Groundwater Resiliency Well ($6,825,000)
Olympic Wellfield Restoration Design ($1,800,000).
Table 9: Funding Summary
Settlement
Funds
Available for
current
remediation
and O&M for
next 30 years
Settlement
Funds
Available for
Future Reserve
(Olympic sub-
basin
Restoration)
Water
Bond
Amount
(pending
ongoing rate
study)
Est. Annual
Bond Payment
(30 yrs):
$40 million $24 million $34.75 million $2.2 million
Task Force on the Environment and Water Advisory Committee Actions
Findings of the Sustainable Yield Analysis, Sustainable Water Master Plan Update and
proposed projects, cost and schedules were presented to the Task Force on the
Environment on March 19, June 18, and October 15 and to the Task Force on the
Environment Water Subcommittee on November 19, 2018. Similar updates were
presented to the Water Advisory Committee on March 5, May 7, June 4, September 5
and November 5, 2018.
Rate Adjustment recommendations were presented to the Water Advisory Committee
on November 5, 2018 and at a Task Force on the Environment Water Subcommittee on
November 19, 2018. The Water Subcommittee strongly supports the Sustainable Water
Master Plan Update and staff’s recommendations.
Financial Impacts and Budget Actions
Approval of the recommended action requires the following:
1. Appropriations to the FY 2018-19 Capital Improvement Program in the Water
Fund:
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Account Number Amount
C5007740.689000 - Arcadia Capacity Expansion and
Enhancement Project, Preliminary Design
$3,180,000
C5007750.689000 - Olympic Wellfield Restoration Design $1,800,000
C5007760.689000 - New Groundwater Resiliency Well $3,575,000
Total $8,555,000
2. An appropriation to the FY 2018-19 Capital Improvement Program in the
Wastewater Fund
C5107760.689000 - New Groundwater Resiliency Well, Property
Joint Use.
$3,250,000
Total $3,250,000
3. $53 million cash transfer of Gillette/Boeing settlement funds from the General
Fund to the Water Fund and the corresponding release of the remaining fund
balance in General Fund account 1.380237. The cash will be recorded in an
interest earning restricted cash account in the Water Fund, Olympic Wellfield
Remediation account 50.102442.
4. Transfer of two remediation capital projects, appropriated in previous fiscal years
and funded with Gillette/Boeing funds, from the General Fund to the Water Fund
to consolidate all budgeted Olympic restoration projects in the Water Fund.
General Fund Account Number Proposed Water Fund
Account
Amount
C019045.589000 Olympic Sub-basin
Remediation
C5005880.689000 $1,909,732
C019067.589000 Olympic Sub-basin Well
Hydrology
C5006050.689000 $1,946,407
5. The following budget items related to Gillette/Boeing water mediation settlement
funds were previously taken by Council:
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On January 9, 2018, Council authorized staff to make an $11,100,000
transfer of Gillette/Boeing settlement funds from the General Fund to the
Water Fund for ongoing and future remediation costs associated with polluted
groundwater in the Olympic Wellfield (Attachment B). Staff transferred these
funds to account 25695.570080 in FY 2017-18.
On June 12, 2018, Council approved a FY 2018-19 transfer of $2,300,000 of
Gillette/Boeing water mediation settlement funds from the General Fund to
the Water Fund (Attachment F). This transfer was to fund the projects for the
Olympic Wellfield remediation appropriated in the FY 2018-19 Capital
Improvement Program.
Account Number Amount
C5007460.689410 City / USGS Monitoring Well & Numerical Flow
Model
$1,800,000
C5007260.689410 Redrill Santa Monica Well #3 $500,000
Total $2,300,000
6. Future Gillette/Boeing settlement funds are to be deposited in the Water Fund,
and a corresponding receivable shall be established. The liability associated with
current and future pollution remediation utilizing Gillette/Boeing funds will be
recorded in the Water Fund.
Prepared By: Alex Nazarchuk, Interim Water Resources Manager
Approved
Forwarded to Council
Attachments:
A. October 28, 2014 Staff Report (Web Link)
B. January 9, 2018 Staff Report
C. Summary of Water Self-Sufficiency Scenarios to Expand Groundwater
Production
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D. Updated Preliminary Sustainable Yield Analysis
E. July 11, 2017 Staff Report (Web Link)
F. June 12, 2018 Staff Report (Web Link)
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City Council Report
City Council Meeting: May 28, 2019
Agenda Item: 3.C
1 of 4
To: Mayor and City Council
From: Susan Cline, Director, Public Works, Water Resources
Subject: Award Professional Services Agreement with Dudek for the Preparation of an
Environmental Study for the Olympic Well Field Restoration and Arcadia
Water Treatment Plant Expansion Project
Recommended Action
Staff recommends that the City Council:
1. Award RFP for the Preparation of an Environmental Study for the Olympic Well
Field Restoration and Arcadia Water Treatment Plant Expansion Project to
Dudek, a California-based company, for the Preparation of an Environmental
Study for the Olympic Well Field Restoration and Arcadia Water Treatment Plant
Expansion Project for the Water Resources Division;
2. Authorize the City Manager to negotiate and execute an agreement with Dudek,
in an amount not to exceed $313,955 (including a $50,000 contingency) for two
years with future year funding contingent on Council budget approval.
Summary
The City of Santa Monica strives to achieve water self-sufficiency by 2023, which will
lead to long-term cost benefits for ratepayers, establishment of a diverse and drought-
resilient local water supply, and a reduction in the City’s water supply energy footprint.
Staff recently updated the City’s Sustainable Water Master Plan (SWMP), which
outlined key projects including the Olympic Well Field Restoration and Arcadia Water
Treatment Plant Expansion Project. This project involves constructing a new advanced
water treatment facility to treat contaminated groundwater from the Olympic Well Field,
implementing production efficiency upgrades at the Arcadia Water Treatment Plant
(WTP), and installing a new pipeline to convey water from the Olympic Well Field to the
Arcadia WTP. An environmental study for the project is necessary to comply with the
California Environmental Quality Act (CEQA). Staff recommends Dudek as the best
qualified firm to prepare the study for the project.
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Discussion
On November 27, 2018, staff from the Water Resources Division presented the City
Council with an updated SWMP and proposed a refined pathway to reach the City’s
goal of water self-sufficiency by 2023 (Attachment A). The refined pathway outlined in
the SWMP included the following three components:
• Component 1 - continuing and increasing water conservation efforts to
permanently reduce water demand;
• Component 2 - developing sustainable and drought-resilient alternative water
supplies; and
• Component 3 - expanding local groundwater production within sustainable yield
limits.
The Olympic Well Field Restoration and Arcadia WTP Expansion Project contains
elements of components 2 and 3 of the SWMP. The project will upgrade the existing
Arcadia WTP with new treatment technology to increase production efficiency and
produce additional potable water. The project will also restore the Olympic Well Field to
its full production capacity by providing advanced treatment for the contaminated
groundwater in the Olympic Sub-basin, which in turn will allow the City to expand its
local groundwater production. In addition, the project will include a new pipeline to
separate Olympic Well Field groundwater from Charnock Well Field groundwater for
treatment at the Arcadia WTP, which will help reduce overall treatment costs for the
contaminated groundwater.
Vendor Selection
Dudek was selected to prepare an environmental study for this project from an
approved shortlist of environmental consulting firms. A shortlist good for five years was
created by way of the Request for Qualifications (RFQ) process. A Request for Proposal
(RFP) was sent to six of the 10 pre-qualified firms that have relevant infrastructure
experience. Dudek was selected as best bidder from the four proposals received.
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RFQual Data
RFQaul
Posting Date
RFQual
Posted On
RFQual Advertised
In (City Charter &
Municipal Code)
# of
Vendors
Downloaded
# of
Submittals
Received
Date
Publicly
Opened
10/27/2015 City’s Online
Bidding Site
Santa Monica Daily
Press
123 24 1/18/2016
Pre-qualified List (for Environmental Consulting Services)
AMEC Earth & Environmental/ Wood
Environment & Infrastructure Solutions, Inc.
Ascent Environmental CAJA Environmental
Services, LLC
Dudek Ecotierra Envicom Corporation ICF International
LSA Associates, Inc. Michael Baker PCR Services
Corporation/ESA
Rincon Consultants, Inc
Vendor Selection Recommendation
Municipal Code SMMC 2.24.073
Evaluation Criteria Past experience, adequacy of response, records of past performance,
and demonstrated thoroughness in work approach.
Justification to Short-List
Responding vendor proposals were evaluated and scored based on the above criteria and the
top eleven were recommended as best qualified firms for environmental consulting services.
RFP Data
RFP Sent Date RFP Sent To # of Submittals
Received
Date Publicly Opened
2/26/2019 RFP sent to 6 pre-
qualified firms on short list
4 3/13/2019
RFPs Received
Ascent Environmental Dudek
Rincon Consultants, Inc. Wood Environment & Infrastructure Solutions, Inc.
Vendor Selection Recommendation
Municipal Code SMMC 2.24.073
Evaluation Criteria Past experience, adequacy of response, records of past performance,
and demonstrated thoroughness in work approach.
Justification to Award
A three-person review committee from the Department of Public Works, Water Resources
Division and the Planning Division evaluated the four proposals based on price, previous
experience, project approach/technical competence, ability to meet the work plan, and
timeliness. Based on the evaluations, the committee recommends awarding the RFP to Dudek
as the best qualified firm. Dudek’s proposal was the best qualified based on having the most
comprehensive scope of work that will ensure the project is completed on time and the City
achieves its water self-sufficiency goal. Dudek’s key team members (e.g., project manager)
have more direct experience with water/wastewater treatment projects, including previous
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experience working with the City.
Financial Impacts and Budget Actions
Staff seeks authority to award a Professional Services Agreement with Dudek for the
preparation of an environmental study for the Olympic Well Field Restoration and
Arcadia Water Treatment Plant Expansion Project.
Agreement Request
Request Amount FY 2018-19 Budget
CIP Account #
Total Contract
Amount
$156,977.50 C5007740.689000 - Arcadia Capacity Expansion $156,977.50
$156,977.50 C5007750.689000 - Olympic Wellfield Restoration $156,977.50
Total $313,955
Prepared By: Sunny Wang, Principal Civil Engineer
Approved
Forwarded to Council
Attachments:
A. November 27, 2018 Staff Report (Web Link)
B. Dudek Oaks Initiative Disclosure Form
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City Council Report
City Council Meeting: June 25, 2019
Agenda Item: 3.P
1 of 4
To: Mayor and City Council
From: Susan Cline, Director, Public Works, Water Resources
Subject: Award Professional Services Agreement to Provide Owner's Engineer
Services for the Olympic Wellfield Restoration and Arcadia Water Treatment
Plant Expansion Project
Staff recommends that the City Council:
1. Award RFP# SP2602 Owner’s Engineer Services to GHD Inc. to provide
technical and engineering support for the Olympic Wellfield Restoration and
Arcadia Water Treatment Plant Expansion Project for the Public Works
Department.
2. Authorize the City Manager to negotiate and execute a Professional Services
Agreement with GHD in an amount not to exceed $1,251,100 (including 5%
contingency) for five years, with future year funding contingent on Council budget
approval.
Summary
The City of Santa Monica is on track to achieve water self-sufficiency by 2023, leading
to long-term cost benefits for ratepayers, establishment of a diverse and drought-
resilient local water supply, and a reduction in the City’s water supply energy footprint.
In the City’s recently updated Sustainable Water Master Plan (SWMP), the Olympic
Wellfield Restoration and Arcadia Water Treatment Plant Expansion Project was
outlined as a critical project. This project would offset imported water purchase by
approximately 40 percent. Staff is retaining professional engineering services, for an
Owner’s Engineer, to provide technical and engineering support for design and
construction of the project. The Owner’s Engineer would assist the City with various
aspects related to project implementation including engineering design review, value
engineering, regulatory permitting, project coordination, field testing, and construction
support services. Staff recommends GHD as the best qualified firm to provide Owner’s
Engineer services for the project with contract authorization of up to $1,251,100 over
the course of the project.
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Discussion
This proposed project involves constructing a new advanced water treatment facility to
treat contaminated groundwater from the Olympic Wellfield, implementing production
efficiency upgrades at the Arcadia Water Treatment Plant (WTP), and installing a new
pipeline to convey water from the Olympic Wellfield to the Arcadia WTP. The new
Olympic Wellfield advanced water treatment facility will restore the Olympic Sub-basin
to full production capacity (approximately 3,000 acre-feet per year or 13% of the City’s
water supply) and maximize local groundwater resources. Production efficiency
enhancements and upgrades at the Arcadia Water Treatment Plant will increase overall
production efficiency from 82 percent to 90 percent and increase treatment capacity
from 10 to 13 million gallons per day.
The updated SWMP presents a refined pathway to achieve water self-sufficiency by
2023. The pathway outlined in the updated SWMP includes the following three
components:
• Component 1 - continuing and increasing water conservation efforts to
permanently reduce water demand;
• Component 2 - developing sustainable and drought-resilient alternative water
supplies; and
• Component 3 - expanding local groundwater production within sustainable yield
limits.
The project contains elements of components 2 and 3 of the SWMP. The project will
upgrade the existing Arcadia WTP with new treatment technology to increase
production efficiency and produce additional potable water. The project will also restore
the Olympic Wellfield to its full production capacity by providing advanced treatment for
the contaminated groundwater in the Olympic Sub-basin, which in turn will allow the City
to expand its local groundwater production. In addition, the project will include a new
pipeline to separate Olympic Wellfield groundwater from Charnock Wellfield
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groundwater for treatment at the Arcadia WTP, which will help reduce overall treatment
costs for the contaminated groundwater.
Past Council Actions
November 27, 2018
(Attachment A)
Sustainable Water Master Plan Update and Pathway to Water
Self-Sufficiency
Vendor Selection
RFP Data
RFP
Posting
Date
RFP Posted on
RFP Advertised In (City
Charter & Municipal
Code)
# of Vendors
Downloaded
# of
Submittals
Received
Date
Publicly
Opened
3/8/2019 City’s Online
Bidding Site
Santa Monica Daily
Press 95 5 4/11/2019
RFPs Received Selection Criteria
Arcadis Municipal Code SMMC 2.24.190
GHD Evaluation Criteria Past experience, technical competence, ability to
meet project requirements, adequacy of response,
records of past performance, and demonstrated
thoroughness in work approach.
Vanir
CDM Smith
Stantec
Justification to Award
A five-person committee composed of staff from the Water Resources and Civil
Engineering divisions of the Public Works Department evaluated the five proposals
based on price, previous experience, technical competence, ability to complete the work
plan on schedule, cost of services, and past record of performance (references). Based
on the evaluations, staff recommends GHD as the best qualified firm. GHD has the
most direct technical experience with all proposed treatment technologies for the
project, a cohesive team that has worked together in a similar capacity for several other
municipalities in Southern California, including the Water Replenishment District of
Southern California, South Coast Water District, and Poseidon Water, and the most
comprehensive understanding of the project and proposed timeline that will ensure the
project is completed on time and the City achieves its water self-sufficiency goal.
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Financial Impacts and Budget Actions
Staff seeks authority to award a Professional Services Agreement with GHD to provide
technical and engineering support as the Owner’s Engineer for the Olympic Wellfield
Restoration and Arcadia Water Treatment Plant Expansion Project.
Agreement Request
Request Amount FY 2018-19 Budget
CIP Account #
Total Contract
Amount
$454,560 C5007740.689000 $454,560
$303,040 C5007750.689000 $303,040
$493,500 C5007370.689000 $493,500
$1,251,100 Total $1,251,100
Prepared By: Chris Aguillon, Water Resources Protection Specialist
Approved
Forwarded to Council
Attachments:
A. November 27, 2018 Staff Report
B. GHD Inc. Oaks Initiative Disclosure Form
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City Council Report
City Council Meeting: December 17, 2019
Agenda Item: 3.A
1 of 6
To: Mayor and City Council
From: Susan Cline, Director, Public Works, Engineering and Street Services
Subject: Award Request for Proposal and enter into Agreement with Walsh
Construction Co. ll, LLC for Design-Builder Services for the Olympic Well
Field Restoration and Arcadia Water Treatment Plant Expansion Project
Recommended Action
Staff recommends that the City Council:
1. Award RFP #SP2602 to Walsh Construction Company II, LLC, an Illinois-
based company, for design-build services for the Olympic Well Field
Restoration and Arcadia Water Treatment Plant Expansion Project;
2. Authorize the City Manager to negotiate and execute a design-build services
agreement with Walsh Construction Company II, LLC in an amount not to
exceed $5,063,001 to provide design services for the Olympic Well Field
Restoration and Arcadia Water Treatment Plant Expansion Project, including
engineering, permitting, preparation of construction documents, and submittal
of a guaranteed maximum price for construction services;
3. Authorize the Director of Public Works to issue any necessary change orders
to complete additional work within contract authority; and
4. Authorize budget changes as outlined in the Financial Impacts and Budget
Actions section of this report.
Summary
The City of Santa Monica has supplied safe and reliable water service to its residents
and businesses for more than 100 years. To ensure the continued safety, reliability and
affordability of that service, the City’s Sustainable Water Master Plan (SWMP) was
updated in 2018 with the goal of achieving water self-sufficiency by 2023. The Olympic
Wellfield Restoration and Arcadia Water Treatment Plant Expansion Project (Project)
was outlined as critical within the SWMP. Potential site layouts and technical aspects of
the scope of the Project are included in Attachment A. This project would decrease the
City’s reliance on imported water by approximately 40 percent, leading to long-term cost
benefits for ratepayers, establishment of a diverse and drought-resilient local water
supply, and a reduction in the City’s water supply energy footprint. Staff recommends
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awarding a progressive design-build services agreement to Walsh Construction
Company II, LLC (Walsh) in an amount not to exceed $5,063,001, to provide design and
engineering services for the Project.
Discussion
The proposed project involves constructing a new Olympic Advanced Water Treatment
Facility (Olympic AWTF) to treat contaminated groundwater from the Olympic Wellfield
and implementing production efficiency upgrades at the Arcadia Water Treatment Plant
(Arcadia WTP). The new Olympic AWTF will allow the Olympic Subbasin to be restored
to full production capacity (approximately 3,000 acre-feet per year or 13 percent of the
City’s water supply) and maximize local groundwater resources, within the sustainable
yield. Sustainable yield is the rate at which groundwater can be pumped from an aquifer
without depleting it. Production efficiency enhancements and upgrades at the Arcadia
WTP will increase overall production efficiency from 82 to 90 percent and increase
treatment capacity from 10 to 13 million gallons per day.
The updated SWMP presents a refined pathway to achieve water self-sufficiency by
2023. The pathway outlined in the updated SWMP includes the following three
components:
• Component 1 - continuing and increasing water conservation efforts to
permanently reduce water demand;
• Component 2 - developing sustainable and drought-resilient alternative water
supplies; and
• Component 3 - expanding local groundwater production within sustainable yield
limits.
The Project contains elements of components 2 and 3 of the SWMP. Once the design
phase is between 30% and 60% completed, staff would return to the City Council for
approval of the Guaranteed Maximum Price (GMP) amendment to complete the
construction phase.
Environmental Analysis
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Awarding of the contract does not commit the City to construction of the project. As
mandated by CEQA, the City is currently undertaking environmental review to analyze
the potential environmental impacts of the project. Project construction would be
contingent on completion of environmental review.
Design-Builder Selection
Selection Criteria
Evaluation Criteria
Previous experience, financial stability, safety record,
qualifications of the key personnel and project understanding.
Municipal Code SMMC 2.24.190
RFQual Data
Date Posted Posted On
Advertised In
(City Charter & SMMC)
Vendors
Downloaded
Submittals
Received
Date Publicly
Opened
3/11/2019 City's Online
Bidding Site
Santa Monica
Daily Press 145 5 04/18/2019
Justification to Short-List
Staff from the Engineering and Street Services and Water Resources divisions evaluated
the statements of qualification (SOQs) based on the criteria in SMMC 2.24.190, including
references, experience and qualifications of key personnel, project understanding,
financial stability, safety record and knowledge and prior experience on design-build
water treatment projects. Based on these criteria, the vendors are recommended as best
qualified persons or firms.
Bidder Recommendation
Best Qualified Firm Walsh Construction Company II, LLC
Evaluation Criteria
Training/credentials/experience, competence/skill, capacity/ability to
perform services promptly, sufficiency of financial/other resources,
character/reputation, ability to provide future services as needed and
price. Specifically, team qualifications, project approach, technical
approach, procurement and construction approach,
startup/testing/commissioning approach, and pricing proposal.
Municipal Code SMMC 2.24.190
RFPs Received
Black & Veatch
Construction, Inc.
JR Filanc Construction
Company, Inc.
Walsh Construction
Company II, LLC
Pre-Qualified Vendors
Black & Veatch
Construction, Inc.
JR Filanc Construction
Company, Inc.
Walsh Construction
Company II, LLC
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RFP Data
Posted On Posted On
Advertised In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
07/09/2019 City's Online
Bidding Site Santa Monica Daily Press 3 09/19/2019
Justification to Award
Staff from the Engineering and Street Services and Water Resources divisions
interviewed the three shortlisted firms. Based on this criteria and criteria in SMMC
2.24.190, staff recommends Walsh Construction Company II, LLC in association with
Brown and Caldwell, as the best qualified firm to provide the pre-construction design and
engineering services for a fee of $5,063,001, based on the following criteria: fee,
qualifications, skills and ability of proposed team members, team cohesiveness, ability of
the team to manage the complexity of the project, quality and variety of design, technical
and management services offered, sophistication of the organization and team, ability
and methodology to successfully design and construct according to a given design
program within budget and under time constraints, character, integrity, reputation,
demonstrated good judgment, training, experience, and efficiency of the team.
The focus of the evaluation committee was to identify the most qualified and cohesive
team with the strongest proposal and understanding of the project, while also being the
best fit and would provide the highest value to the Project. Based on the evaluation
criteria and interview results, the committee recommends the team of Walsh
Construction Company II, LLC in association with Brown and Caldwell as the best
qualified firm to provide design and engineering services for the Project. The
recommended team submitted a bid estimate with the lowest pre-construction phase fee
and lowest construction phase design-builder contingency. Team qualifications and a
cost comparison table are provided in Attachment B.
As part of the selection process, the design-builders submitted indicative cost estimates.
These estimates are used to update staff’s projected total Project cost. Based on the
cost information received from Walsh and other bidders, the total Project cost is
estimated at approximately $55.6 million, which would exceed the initial budget by
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approximately $8.8 million. The California Department of Water Resources has
authorized the Project a $10.0 million Water Desalination Grant (Proposition 1). The
Proposition 1 grant funds will offset the projected budget overage. The updated Project
budget is $56.8 million, which includes an additional $1.2 million in contingency.
Past Council Actions:
Meeting Date Description
11/27/2018 (Attachment C) Update Sustainable Water Master Plan
05/28/2019 (Attachment D)
Award Professional Services Agreement with Dudek for
the Preparation of an Environmental Study for the
Olympic Well Field Restoration and Arcadia Water
Treatment Plant Expansion Project
06/25/2019 (Attachment E)
Award Professional Services Agreement to Provide
Owner's Engineer Services for the Olympic Wellfield
Restoration and Arcadia Water Treatment Plant
Expansion Project
Financial Impacts and Budget Actions:
Staff seeks authority to approve funding from the Water Fund to award an agreement to
Walsh Construction Company II, LLC. for design and engineering services.
FY 2019-20 Budget Changes
Release Funds Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
Water Fund $1,700,000 C5007750.689000 $1,700,000
Total $1,700,000 Total $1,700,000
Agreement Request
Request Amount FY 2019-20 Budget CIP Account # Total Contract Amount
$2,663,001 C5007750.689000 $2,663,001
$2,400,000 C5007740.689000 $2,400,000
Total $5,063,001
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Prepared By: Omeed Pour, Civil Engineer
Approved
Forwarded to Council
Attachments:
a Project Description and Site Layouts
b Qualifications of the Walsh and BC Team
c November 27, 2018 Staff Report
d May 28, 2019 Staff Report
e June 25, 2019 Staff Report
f WALSH Oaks Initiative Form
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City Council Report
City Council Meeting: November 24, 2020
Agenda Item: 3.B
1 of 7
To: Mayor and City Council
From: Susan Cline, Director, Public Works, Engineering and Street Services
Subject: Adoption of a Resolution of Initial Study/Mitigated Negative Declaration for
Olympic Wellfield Restoration & Arcadia Water Treatment Plant Expansion
Project
Recommend Action
Staff recommends that the City Council:
1. Adopt the attached resolution (Attachment A) for the Initial Study/Mitigated
Negative Declaration and Mitigation Monitoring and Reporting Program for the
environmental review phase of the City of Santa Monica’s proposed Olympic
Well Field Restoration and Arcadia Water Treatment Plant Expansion Project
(Project);
2. Approve the Project with the conditions that staff will return to council for well
location approval if no alternative to placing the well at Ishihara Park can be
identified; and
3. Authorize the City Manager to negotiate and execute a first modification to
agreement #10981 (CCS) in the amount of $510,000 with Walsh Construction
Company II, LLC, for design-build services in support of the Project for the Public
Works Department. This would result in a three-year amended agreement with a
new total amount not to exceed $5,573,001, with future year funding contingent
on Council budget approval.
Summary
The Olympic Wellfield Restoration and Arcadia Water Treatment Plant Expansion
Project, as outlined in the City’s Sustainable Water Master Plan, would decrease the
City’s reliance on imported water by approximately 40 percent. Consistent with the
California Environmental Quality Act (CEQA) guidelines, staff conducted an
environmental evaluation, and prepared an Initial Study/Mitigated Negative Declaration
(IS/MND, Attachment B). The IS/MND determined the Project would not have a
significant impact on the environment with the implementation of certain mitigation
measures. The Arcadia Water Treatment Plan also requires critically important
maintenance and repairs for operational needs and continued regulatory compliance.
Staff recommends that the City Council adopt the resolution for the final IS/MND,
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approve the Project, and authorize a first modification to the design-build agreement
with Walsh Construction Company II, LLC (Walsh) to facilitate the required repairs.
Discussion
The City of Santa Monica has supplied safe and reliable water service to its residents
and businesses for more than 100 years. To ensure the continued safety, reliability and
affordability of that service, the City’s Sustainable Water Master Plan (SWMP) was
updated in 2018 with the goal of achieving water self-sufficiency by 2023. The Olympic
Wellfield Restoration and Arcadia Water Treatment Plant Expansion Project (Project) is
a critical component of the SWMP, reducing the City’s reliance on imported water by an
estimated 40 percent, leading to long-term cost benefits for ratepayers, establishment of
a diverse and drought-resilient local water supply, and a reduction in the City’s water
supply energy footprint.
The Project involves constructing a new Olympic Advanced Water Treatment Facility
(Olympic AWTF) to treat contaminated groundwater from the Olympic Wellfield and
implementing production efficiency upgrades at the Arcadia Water Treatment Plant
(Arcadia WTP). The Olympic AWTF would be located at the existing Arcadia WTP. The
new Olympic AWTF would allow the Olympic Subbasin to be restored to full production
capacity (approximately 3,000 acre-feet per year or 13 percent of the City’s water
supply) and maximize local groundwater resources, within the sustainable yield.
Sustainable yield is the rate at which groundwater can be pumped from an aquifer
without depleting it. Production efficiency enhancements and upgrades at the Arcadia
WTP would increase overall production efficiency from 82 to 90 percent and increase
treatment capacity from 10 to 13 million gallons per day.
For the purposes of CEQA, the environmental document prepared for the Project
includes all associated improvements required to convey, treat, and improve the plant’s
efficiency as outlined in the SWMP. The Project as defined by the CEQA document
(Attachment C) includes the following five components:
1. Olympic Wellfield: Equipping four wells and decommissioning one well within the
Olympic Subbasin.
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2. Recycled Water Pipeline: The construction of approximately 1,500 linear feet of
recycled watermain pipeline to connect to the potential new injection well within
Ishihara Park.
3. Olympic Pipeline: The construction of approximately 6,600 linear feet of
transmission mainline to carry extracted water from the Olympic Subbasin in the
City of Santa Monica to the Arcadia WTP in the City of Los Angeles.
4. Olympic AWTF: The construction of the Olympic AWTF, which would remove
1,4-Dioxane, 1,2,3-TCP, TCE, and PCE contamination from the Olympic Well
Field water.
5. Arcadia WTP Expansion: To accommodate the additional volume of water from
the Olympic Subbasin, the treatment capacity of the plant would be expanded,
using new concentrate treatment technology, as well as the construction of
additional efficiency-related improvements.
An Initial Study and Mitigated Negative Declaration (IS/MND) for the Project was
prepared pursuant to Sections 15063(c) and 15070 of the California Environmental
Quality Act Guidelines to address the potential environmental effects of the proposed
Project. The IS/MND analyzed environmental impacts that would be potentially affected
by the Project and determined that the Project, with mitigation measures, would result in
no impacts or less than significant impacts for all environmental issue areas. Mitigation
measures for the impacts are located within the Mitigation Monitoring and Reporting
Program.
Public Outreach
To accommodate the impacts of the COVID-19 pandemic, the draft IS/MND was
circulated for a 60-day public review period, double the CEQA-required 30 days, from
July 6, 2020 to September 4, 2020. Public notification included the following: a printed
announcement in the Santa Monica Daily Press on July 6, 2020 (Attachment D); posting
of the draft CEQA document to the City’s Engineering & Street Services Division
website; posted notices at the proposed well sites, and along Texas Avenue from Bundy
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Drive to Centinela Avenue within the City of Los Angeles; mailed notifications to the
State Clearinghouse, relevant agencies, and all City of Los Angeles owners/occupants
contiguous to the water treatment plant. Several comment letters and e-mails were
received from the public. The final IS/MND includes the responses prepared by staff.
On August 13, 2020, staff attended the Pico Neighborhood Association meeting. Staff
provided an overview of the environmental document, and provided answers to the
board members’ questions, specifically about the injection well proposed in Ishihara
Park. Additionally, staff attended the Recreation and Parks Commission meeting on
October 29, 2020 to discuss the potential need for an injection well in Ishihara Park. The
Commission expressed concerns related to potential negative impacts on the park’s
design and usage, and its functionality as a visual buffer to the adjacent neighborhood
mitigating Expo Maintenance Yard operations.
The City is currently constructing the first injection well along the Olympic Boulevard
median near 26th Street. A second potential injection well may be required for
resiliency. The project team investigated over 50 injection sites and determined that a
potential location in Ishihara Park would be best considering hydrogeological computer
modeling of the groundwater aquifer. Modeling was conducted for the top potential
injection sites, results concluded that the Ishihara Park location was significantly more
conducive to groundwater recharge. Alternative injection well locations would not be as
effective to recharge the aquifer and would result in reduced groundwater recharge and
potentially the construction of additional wells, resulting in additional costs. A specific
location for the potential well within the park would be determined in the future based on
community input and in consultation with the Pico Neighborhood Association. If
construction of the well is deemed necessary, staff would seek to work with the original
designer of the park and would continue coordinating with the Recreation and Parks
Commission and the local community during design.
Environmental Document Conclusion and Proposed Mitigation Measures
The final IS/MND determined that the proposed Project would not result in significant
impacts to the environment with the incorporation and implementation of mitigation
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measures in the areas of Air Quality, Biological Resources, Cultural Resources,
Geology and Soil, Hazards and Hazardous Materials, Noise, Transportation, and
Mandatory Findings of Significance. Mitigation measures include the use of
archeological/paleontological monitors during earth disturbing activities, and biological
resource monitoring for birds during construction. Construction effects would be
mitigated by adherence to the Santa Monica Municipal Code and to authorities having
jurisdiction pertaining to work hours. Less than significant or no impacts would occur
with respect to Aesthetics, Agriculture and Forestry Resources, Energy, Greenhouse
Gas Emissions, Hydrology and Water Quality, Land Use and Planning, Mineral
Resources, Population and Housing, Public Services, Recreation, Tribal Cultural
Resources, Utilities and Service Systems, and Wildfire. To ensure mitigation measures
are properly implemented, a Mitigation Monitoring and Reporting Program has been
prepared and would be enforced during construction and operation of the Project. The
proposed mitigation measures are provided in the final IS/MND.
Modification to Design-Build Agreement
On December 17, 2019, Council authorized a design-build services agreement with
Walsh Construction Company II, LLC (Walsh) in an amount not to exceed $5,063,001,
to provide design-build services for the Project. With the design progressing on
schedule, an opportunity to perform critical maintenance on the Arcadia Water
Treatment Plant infrastructure has presented itself. The improvements would provide
both operational benefits and ensure regulatory compliance. The City has previously
programmed the Arcadia Vapor Phase Granular Activated Carbon System Project
within the biennial Capital Improvement Program budget. A smaller scoped version of
this critical project can be more efficiently completed by the current design-builder,
saving the City time and money. For this reason, staff seeks authorization to modify the
agreement with Walsh in an amount of $510,000.
The design phase of the Project is fully funded. Staff is investigating additional funding
sources for the future construction phase of the Project. Staff will return to Council prior
to beginning the construction phase to present a funding plan.
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Past Council Actions
Meeting Date Description
11/27/2018 (Attachment E) Update Sustainable Water Master Plan
05/28/2019 (Attachment F) Award Professional Services Agreement with Dudek for the
Preparation of an Environmental Study for the Olympic Well
Field Restoration and Arcadia Water Treatment Plant
Expansion Project
06/25/2019 (Attachment G) Award Professional Services Agreement to Provide Owner's
Engineer Services for the Olympic Wellfield Restoration and
Arcadia Water Treatment Plant Expansion Project
12/17/2019 (Attachment H)
Award Request for Proposal and enter into Agreement with
Walsh Construction Company ll, LLC for Design-Builder
Services for the Olympic Well Field Restoration and Arcadia
Water Treatment Plant Expansion Project
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Water Fund (50) available in the FY
2020-21 Capital Improvement Program budget to increase the amount of the design-
build contract with Walsh by $510,000 to facilitate the required repairs.
Agreement Modification Request
Agreement #
Current
Authorized
Amount
FY 2020-21 Budget
Modified Request
Amount
Dept/CIP Account # Total Revised
Contract Amount
10981 (CCS) $2,663,001 $0 C5007750.689000 $2,663,001
10981 (CCS) $2,400,000 $0 C5007740.689000 $2,400,000
10981 (CCS) $0 $510,000 C5007410.689000 $510,000
$5,063,001 $510,000 Total $5,573,001
The City is currently seeking a combination of State grant money and low interest
Federal financing to fund the construction phase of the project. The total project cost
remains approximately $56 million, and staff would return to Council prior to
construction to present funding options. There is no immediate financial impact or
budget action necessary as a result of the adoption of the CEQA document. Future year
funding is contingent on Council budget approval.
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Prepared By: Omeed Pour, Civil Engineer
Approved
Forwarded to Council
Attachments:
A. Resolution IS/MND
B. Olympic Wellfield Arcadia WTP Final ISMND_2020_1012
C. CEQA PROJECT ELEMENTS
D. NOTICE OF INTENT TO ADOPT MITIGATED NEGATIVE DECLARATION
E. SUSTAINABLE WATER MASTER PLAN - Staff Report 11-27-2018
F. AWARD PSA FOR ENVIRONMENTAL STUDY - Staff Report 5-28-2019
G. AWARD PSA FOR OWNER'S ENGINEER SERVICES - Staff Report 6-25-2019
H. AWARD RFP FOR DESIGN-BUILD SERVICES (WALSH) - Staff Report 12-17-
2019
I. WALSH OAKS INITIATIVE
J. Written Comments
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City Council Report
City Council Meeting: February 23, 2021
Agenda Item: 3.B
1 of 5
To: Mayor and City Council
From: Rick Valte, Acting Public Works Director, Public Works, Water Resources
Subject: Adoption of Resolution to Negotiate and Execute Water Desalination Grant
with the State of California Department of Water Resources
Recommended Action
Staff recommends that the City Council:
1. Adopt the amended resolution to authorize the City Manager to execute all
necessary documents to accept a $10 million water desalination grant from the
California Department of Water Resources’ Water Desalination Grant Program
for the Arcadia Water Treatment Plant Production Efficiency Enhancement
Project and accept all grant renewals; and
2. Authorize budget changes as outlined in the Financial Impacts & Budget Actions
section of this report.
Summary
The City of Santa Monica has consistently taken a strategic approach to keeping water
and wastewater services affordable to our community while adequately investing in
long-term water quality, reliability, resiliency, and sustainability. The City Council
adopted the 2018 Sustainable Water Master Plan Update aimed to provide long-term
cost benefits for water ratepayers and establish a diverse, sustainable and drought
resilient local water supply. To support the goal of providing long-term cost benefits to
the City’s water ratepayers, the Water Resources Division applied for and received $10
million in grant funding from the California Department of Water Resources’ Water
Desalination Grant Program for the Arcadia Water Treatment Plant Production
Efficiency Enhancement Project (Component 2 of the 2018 Sustainable Water Master
Plan Update). The Water Resources Division is requesting to amend the resolution
adopted previously by the City Council to update the project name in the resolution
(Attachment A), to accept the grant funds, and appropriate the grant funds to the
budget.
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Discussion
On November 27, 2018, the City Council adopted the Sustainable Water Master Plan
Update and directed staff to proceed with implementing water self-sufficiency projects
as well as pursue state and/or federal funding opportunities to help offset capital costs.
Staff applied for grant funding from the California Department of Water Resources’
Water Desalination Grant Program for the City’s Sustainable Water Infrastructure
Project (SWIP) and the Arcadia Water Treatment Plant Production Efficiency
Enhancement Project (or the Closed-Circuit Reverse Osmosis Project). The Water
Desalination Grant Program is funded through Proposition 1, approved by California
voters in November 2014 as part of the Water Quality, Supply, and Infrastructure
Improvement Act of 2014. A resolution was adopted by the City Council on December
18, 2018 to authorize the City Manager to negotiate and enter into a grant program
agreement with the California State Department of Water Resources for the SWIP and
the Closed-Circuit Reverse Osmosis Project.
The grant application for the SWIP was not successful. On December 6, 2019, however,
the City of Santa Monica was awarded $10 million in grant funding from the California
Department of Water Resources for the Closed-Circuit Reverse Osmosis Project
(Attachment C). The grant requires a 50% match from the City and has a ceiling of $10
million for grants to fund construction costs. Qualifying matching funds must satisfy the
criteria outlined by the Department of Water Resources and be directly related to the
project. The matching funds would be from the Olympic Well Field Restoration Project,
which includes two groundwater wells and the Olympic Pipeline as well as other
improvements at the Arcadia Water Treatment Plant. The required matching funds are
available and already budgeted. The project aims to reduce reverse osmosis
concentrate waste discharge and increase overall production efficiency and treatment
capacity at the Arcadia Water Treatment Plant.
The Arcadia Water Treatment Plant’s multi-barrier treatment process includes the use of
reverse osmosis filtration to produce high-quality potable water for the community. The
current reverse osmosis filtration process has a production efficiency of approximately
82 percent. In other words, for every 100 gallons of water treated through the reverse
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osmosis filtration process, 82 gallons of drinking water is produced and approximately
18 gallons of concentrated waste stream is discharged to the sewer system. The
Closed-Circuit Reverse Osmosis Project would increase the overall production
efficiency to 90 percent or greater and would offset imported water purchases from
Metropolitan Water District by up to 1,200 acre-feet per year or roughly 8 percent of the
City’s water supply.
Concurrently with preparing the grant application, the Water Resources Division
conducted pilot testing of the closed-circuit reverse osmosis technology and an
alternative technology, flow reversal reverse osmosis to compare capital and life-cycle
costs between the two technologies to increase the production efficiency at the Arcadia
Water Treatment Plant. Due to the proprietary nature of the two technologies, the City,
in discussion with the California Department of Water Resources, requested to change
the Water Desalination Grant Program funded project name from the “Closed-Circuit
Reverse Osmosis Project” to the “City of Santa Monica Brackish Desalter Production
Efficiency Enhancement Project.” The proposed new project name is generic and does
not directly endorse a proprietary technology and is also consistent with language used
in the City’s 2018 Sustainable Water Master Plan Update and environmental
documents.
The grant would fully fund phase one of the Olympic Well Field Restoration and Arcadia
WTP Expansion Project to increase local water supplies for the City. Phase one of the
project includes restoration of the Olympic Well Field (two groundwater wells, Olympic
Pipeline, and new Olympic Advanced Water Treatment Facility) and retrofitting two out
of the four reverse osmosis system at the Arcadia Water Treatment Plant. Phase two of
the project would retrofit the remaining reverse osmosis systems and expand overall
production capacity of the Arcadia Water Treatment Plant. Phase two is pending
additional outside funding that the Water Resources Division is pursuing.
This project is one of many investments being made to enhance sustainability, drought
resiliency, and long-term cost benefits to rate payers. The Water Resources Division will
be returning to Council soon to request authorization to apply for the United States
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Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act
(U.S. EPA WIFIA) Loan to fund phase two of the project. The City was one of 55
cities/municipalities across the United States that were invited to apply for the low
interest US EPA WIFIA loan.
Past Council Actions
Meeting Date Description
11/27/2018 (Attachment B) City Council directed staff to proceed with the
Sustainable Water Master Plan Update and pursue
outside grant funding for water self-sufficiency projects.
12/18/2018 (Attachment C) City Council authorized the City Manager to negotiate
and enter into a grant funding agreement, if awarded,
with the California State Department of Water
Resources for the SWIP and Closed-Circuit Reverse
Osmosis Project.
Financial Impacts and Budget Actions
Staff seeks authority to accept a grant from the California Department of Water
Resources appropriate funding and recommends the following budget changes. Existing
CIP budgets for the Olympic Wells Equipping Project and Olympic Well Field
Restoration Project would fund the required 50% local match.
FY 2021- 2022 Grant Budget Changes
Establish Revenue Budget Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
20500008.416190 $10,000,000 C2007740.689000 $10,000,000
Total $10,000,000 Total $10,000,000
Prepared By: Chris Aguillon, Water Resources Protection Specialist
Approved
Forwarded to Council
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Attachments:
A. November 27, 2018 Staff Report (Web Link)
B. December 18, 2018 Staff Report (Web Link)
C. December 6, 2019 Department of Water Resources Desalination Grant Award
Announcement (Web Link)
D. Proposed Resolution
E. Written Comments
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City Council Report
City Council Meeting: February 23, 2021
Agenda Item: 3.F
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To: Mayor and City Council
From: Rick Valte, Acting Public Works Director, Public Works, Water Resources
Subject: Adoption of Resolution to Enter Into an Agreement to receive funding from the
Metropolitan Water District of Southern California's Local Resources Program
Recommended Action
Staff recommends that the City Council:
1. Adopt the attached resolution to authorize the City Manager to execute all
necessary documents to receive funding from Metropolitan Water District of
Southern California’s Local Resources Program;
2. Authorize the City Manager to execute an addendum to the Initial Study and
Mitigated Negative Declaration for the Sustainable Water Infrastructure Project to
add Metropolitan Water District of Southern California as a project partner; and
3. Authorize the City Manager to execute an addendum to Initial Study and
Mitigated Negative Declaration for the Olympic Well Field Restoration and
Arcadia Water Treatment Plant Expansion Project to add Metropolitan Water
District of Southern California as a project partner.
Summary
The City of Santa Monica has consistently taken a strategic approach in keeping water
and wastewater services affordable to our community while adequately investing in
long-term water quality, reliability, resiliency, and sustainability. The City Council
adopted the 2018 Sustainable Water Master Plan Update aimed to provide long-term
cost benefits for water ratepayers and establishment of a diverse, sustainable and
drought resilient local water supply.
To support the goal of providing long-term cost benefits to the City’s water ratepayers,
including developing local water supplies and pursuing outside funding support for
water/wastewater infrastructure, the Water Resources Division is applying for funding
from the Metropolitan Water District of Southern California’s (MWD) Local Resources
Program (LRP) for the Sustainable Water Infrastructure Project (SWIP) and the Arcadia
Water Treatment Plant Production Efficiency Enhancement Project (Component 2 of the
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2018 Sustainable Water Master Plan Update). The MWD LRP grant funding could
provide up to $782,000 per year, for 25 years, for production of local water supplies that
would reduce demand on imported water supplies. As part of the funding application
submittal, MWD requires the City’s governing body to authorize the City Manager to file
an application for funding and amend the Initial Study and Mitigated Negative
Declaration for the Sustainable Water Infrastructure Project and the Olympic Well Field
Restoration and Arcadia Water Treatment Plant Expansion Project to include MWD as a
project partner. If awarded, the City Manager would be authorized to negotiate and
enter into an agreement with MWD.
Discussion
On November 27, 2018, the City Council adopted the Sustainable Water Master Plan
Update and directed staff to proceed with implementing water self-sufficiency projects
as well as pursue state and/or federal funding opportunities to help offset capital costs
(Attachment A). Staff is seeking funding support from MWD’s Local Resources Program
for the SWIP and the Arcadia Water Treatment Plant Expansion and Production
Efficiency Enhancement Project.
MWD’s Local Resources Program provides grant funding for the development of water
recycling and groundwater recovery supplies that replace an existing demand on
MWD’s imported water supplies either through direct replacement of potable water or
increased regional groundwater production. MWD’s Local Resources Program provides
funding up to $340 per acre-feet over 25 years for water produced locally. Funding
reimbursement through the program is calculated based on water produced each year
to offset imported water demand. To be eligible to receive funding through MWD’s Local
Resources Program, the City would also need to add MWD as a project partner in the
Initial Study and Mitigated Negative Declaration for the SWIP and the Olympic Well
Field Restoration and Arcadia Water Treatment Plant Expansion Project.
The SWIP and Arcadia Water Treatment Plant Expansion and Production Efficiency
Enhancement Projects are outlined in Component 2 of the 2018 Sustainable Water
Master Plan Update to develop a sustainable and drought resilient alternative water
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supply for the City. Element 2 of the SWIP includes the construction of a new advanced
water treatment facility to expand the City’s recycled water supply for non-potable uses
(e.g., irrigation and toilet flushing) as well as future potable reuse to replenish the local
groundwater supply. The new SWIP advanced water treatment facility would produce
on average 1 million gallons per day, or approximately 1,100 acre-feet per year (AFY),
of advanced treated recycled water that would offset purchase of imported water
supplies and account for roughly seven percent of the City’s water supply. Funding
through MWD’s Local Resources Program could provide up to $374,000 per year over
the 25-year period for water produced locally by the SWIP. Element 1 of the SWIP,
upgrades to the Santa Monica Urban Runoff Recycling Facility (SMURFF), is not
eligible for funding through MWD’s Local Resources Program as it previously received
funding through this program.
The Arcadia Water Treatment Plant Expansion and Production Efficiency Enhancement
Project aims to expand the City’s drinking water treatment facility, increase overall
production efficiency, and reduce concentrate waste discharge. The Arcadia Water
Treatment Plant’s multi-barrier treatment process includes the use of reverse osmosis
filtration to produce high-quality potable water for the community. The current reverse
osmosis filtration process has a production efficiency of approximately 82 percent. In
other words, for every 100 gallons of water treated through the reverse osmosis filtration
process, 82 gallons of drinking water is produced and approximately 18 gallons of
concentrated waste stream is discharged to the sewer system. The project would seek
to upgrade the existing reverse osmosis system to achieve a production efficiency of 90
percent or greater. The project would produce up to 1,200 AFY of locally sourced water
or approximately eight percent of the City’s water supply. Funding through MWD’s Local
Resources Program could provide up to $408,000 per year for 25 years for water
produced locally by the Arcadia Water Treatment Plant Expansion and Production
Efficiency Enhancement Project.
Past Council Actions
9/27/2016 (Attachment A) Council adopted the Initial Study and Mitigated Negative
Declaration for the Sustainable Water Infrastructure
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Project (SWIP)
11/27/2018 (Attachment B) Council directed staff to proceed with Sustainable Water
Master Plan Update and to pursue outside grant funding
for water self-sufficiency projects.
11/27/2018 (Attachment C) Council adopted an Addendum to the Initial Study and
Mitigated Negative Declaration for the SWIP
11/24/2020 (Attachment D) Council adopted the Initial Study and Mitigated Negative
Declaration for the Olympic Wellfield Restoration and
Arcadia Water Treatment Plan Expansion.
Financial Impacts and Budget Actions
Staff seeks authority to apply for a grant from MWD’s Local Resources Program. There
is no immediate financial impact or budget action necessary as a result of
recommended action. However, if awarded, the City could receive up to $782,000
annually, which would result in savings to the Water Fund’s operating budget through a
credit on the City’s MWD invoices. Funding is anticipated to begin in FY 2023-2024.
Staff will return to Council if specific budget actions are required in the future.
Prepared By: Chris Aguillon, Water Resources Protection Specialist
Approved
Forwarded to Council
Attachments:
A. September 27, 2016 SWIP IS/MND Staff Report (Web Link)
B. November 27, 2018 Sustainable Water Master Plan Staff Report (Web Link)
C. November 27, 2018 Addendum to SWIP IS/MND Staff Report (Web Link)
D. November 24, 2020 IS/MND for the Arcadia Water Treatment Plant Expansion
Project Staff Report (Web Link)
E. MWD CEQA Addendum for SWIP MND
F. MWD CEQA Addendum for Arcadia WTP MND
G. Proposed Resolution
H. Written Comments
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City Council Report
City Council Meeting: June 22, 2021
Agenda Item: 3.G
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To: Mayor and City Council
From: Rick Valte, Acting Public Works Director, Public Works, Engineering and
Street Services
Rick Valte, Acting Public Works Director, Public Works Department
Subject: Award Bids #SP2608 and #SP2639 for Olympic Water Transmission Main
Expansion and Olympic Well Equipping
Recommended Action
Staff recommends that the City Council:
1. Award bids #SP2608 and #SP2639 to Blois Construction, Inc. to provide
construction services for Olympic Water Transmission Main Expansion and
Olympic Well Equipping Projects for the Public Works Department;
2. Authorize the City Manager to negotiate and execute a contract with Blois
Construction, Inc. in an amount not to exceed $13,417,355 (including 15%
contingency);
3. Authorize the Director of Public Works to issue any necessary change orders to
complete additional work within the contract authority;
4. Award Request for Proposals #SP2608 and #SP2639 to Willdan Engineering, for
construction observation services for the Olympic Water Transmission Main
Expansion and Olympic Well Equipping Projects;
5. Authorize the City Manager to negotiate and execute an agreement with Willdan
Engineering, in an amount not to exceed $521,795; and
6. Authorize budget changes as outlined in the Financial Impacts & Budget Actions
section of this report.
Summary
The 2018 Sustainable Water Master Plan (SWMP) update outlined several water
infrastructure projects to support the goal of achieving water self-sufficiency by 2023,
including the Olympic Water Transmission Main Expansion and the Olympic Well
Equipping Project to remediate and restore the Olympic Well Field to full production
capacity (Component 3 of the 2018 SWMP - Expand Local Groundwater Production).
Staff recommends Blois Construction, Inc. to provide construction services for the
Olympic Water Transmission Main Expansion and Olympic Well Equipping Projects (the
Projects) in an amount not to exceed $13,417,355 (including a 15% contingency). Staff
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also recommends Willdan Engineering to provide construction observation services for
the same projects, in an amount not to exceed $521,795. These projects would be
funded by the City’s Water Fund and Gillette-Boeing Settlement Fund.
Discussion
The City of Santa Monica has consistently taken a strategic approach to maintain
affordable water and wastewater services for our community while adequately investing
in long-term water quality, reliability, resiliency, and sustainability. Given the statewide
challenges surrounding a reliable water supply in recent years and the high cost of
imported water, Council directed staff to develop a water self-sufficiency plan with the
goal of delivering 100% of the City’s water demand using local water sources by 2023.
The City Council adopted the 2018 Sustainable Water Master Plan Update (SWMP)
aimed at providing long-term cost benefits for water and wastewater ratepayers and
establishing a diverse, sustainable, and drought-resilient local water supply and
eliminating the City’s dependence on imported water sources.
Olympic Well Equipping Project
The Olympic Well Equipping Project would equip three wells: SM-8 and SM-9 and the
new Sustainable Water Infrastructure Project (SWIP) groundwater recharge well, SM-
10i, by installing mechanical, electrical, piping, an artistic fence that would serve as the
well enclosure, and civil improvements to make them fully operational. All three wells
are located within the median along Olympic Boulevard.
Olympic Water Transmission Main Expansion Project
The Olympic Water Transmission Main Expansion Project would convey the
groundwater pumped from the newly equipped SM-8 and SM-9 wells and existing SM-4
well through approximately 7,330 linear feet of water transmission pipes to the new
Olympic Advanced Water Treatment Facility (Olympic AWTF) that is co-located at the
Arcadia Water Treatment Plant for treatment and ultimately distribution to water
customers.
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Vendor Selection - Construction
Bidder Recommendation
Best Bidder Blois Construction, Inc.
Evaluation Criteria Price; the ability, capacity, and skill of the bidder to perform the
services; the capacity of the bidder to perform the contract within
the time specified; the sufficiency of the bidder’s financial
resources; the reputation and experience of the bidder.
Municipal Code SMMC 2.24.180
Submittals Received
Blois Construction, Inc. $11,357,882 Caliagua, inc. $11,902,578
Colich and Sons, LP $11,934,162 Teichert Energy $11,494,885
Bid Data
Date
Posted
Posted On Advertise In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
02/25/2021 City's Online
Bidding Site
Santa Monica Daily
Press
97 04/19/2021
Best Bidder Justification
Staff recommends Blois Construction Inc., as the best bidder based on the price and
completion of past projects for the City of Santa Monica, Los Angeles, Camarillo, Thousand
Oaks, Sony Studios, and Culver City. The recommended bidder has demonstrated the ability
to perform quality work on general building and engineering projects.
Vendor Selection - Construction Management
The construction management firm would provide construction management and
observation services for the Projects that would include construction management;
continuous observation of the contractor’s work; verification and management of field
changes and unforeseen conditions; monitoring and mitigating impacts resulting from
construction activities; attending the contractor’s safety meetings; facilitating weekly
progress meetings; maintaining records of all necessary observation documentation
relevant to the work performed during construction; providing accurate and timely
responses to inquiries from the public and resolve problems; and conducting public
outreach. City staff does not have the capacity to observe and inspect this large-scale
construction project, which requires full-time field oversight.
Willdan Engineering was selected for the Projects from an approved shortlist of
construction management firms. The shortlist was created by way of the Request for
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Qualifications (RFQ) process; three vendors submitted proposals as part of the Request
for Proposals (RFP) process and Willdan was subsequently selected.
RFQ Information
Prequalified Firms Berg and Associates, Inc., MNS Engineers, Inc., Psomas, TRC
Engineers, Inc., and Willdan Engineering
Evaluation Criteria Training/credentials/experience, competence/skill, capacity/ability to
perform services promptly, sufficiency of financial/other resources,
character/reputation, and price.
Municipal Code SMMC 2.24.190
RFQ Data
Posted On Posted On Advertised In (City Charter
& SMMC)
Vendors
Downloaded
Date Publicly
Opened
9/25/2019 City's Online
Bidding Site
Santa Monica Daily Press 110 10/24/2019
RFP Information
Best Qualified Firm Willdan Engineering
Evaluation Criteria Technical competence, staffing capability, project approach, past
performance, dispute resolution, quality control, cost control,
management services, customer service, and the ability to meet the
required time frame.
Municipal Code SMMC 2.24.190
RFPs Received
Arcadis MNS Engineering Willdan Engineering
RFP Data
Posted On Posted On # of Vendors
Downloaded
# of Submittals
Received
Date Publicly
Opened
3/05/2021 Directly Published to
5 Pre-Qualified Firms
5 3 04/20/2021
Justification to Award
Three firms submitted a proposal for construction management and observation services.
Based on the selection criteria set forth in SMMC 2.24.190, staff recommends Willdan
Engineering as the best qualified firm to provide construction management and observation
services based on its qualifications, price, the competence, and skill of the staff to this project,
and its directly related experience providing similar services for municipal agencies.
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Public Outreach
Public outreach during construction of the Projects would be provided by Willdan
Engineering, the City’s recommended construction management firm. Public outreach
would include notifications distributed to adjacent properties and the surrounding
community on the scope of the Projects, potential impacts including night work and
schedule, with monthly updates on the City’s “Know Before You Go” (KBUG) website,
and monthly in the Monday editions of the Santa Monica Daily Press. Major updates
regarding the Projects would be provided on the City’s website and various social media
channels.
Properties impacted by the Projects would receive two construction notices. The first
general notice would be delivered to properties adjacent to the proposed work site two
weeks prior to the start of construction. The second, two-day notice would be
subsequently hand-delivered to each adjacent property with detailed information
regarding the planned construction activity, potential impacts, and contact information.
The notices would be prepared by the construction management firm and Public Works
staff and distributed by the contractor.
Past Council Actions
11/27/2018 (Attachment A) Council Direction to Sustainable Water Master Plan
Update and Pathway to Water Self-Sufficiency
06/25/2019 (Attachment B) Award RFP #2608 to Cannon Corp., to Design Water
Transmission Pipeline for Olympic Wellfield restoration
and Arcadia Water Treatment Plan Expansion Project
10/15/2019 (Attachment C)
Award Bid #SP2606 to Yellow Jacket Drilling Services to
Construct Well SM-9 and Abandon SM-3
Financial Impact and Budget Actions
Staff seeks authority to approve funding from the City’s Water Fund and Gillette-Boeing
Settlement Fund to award contracts to Blois Construction Inc. and Willdan Engineering
for construction and construction observation services, respectively, for the Projects.
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The Projects would require an appropriation of $39,150 from the Water Demand
Mitigation Fund Balance. Future year funding is contingent on Council budget approval.
FY 2021-22 CIP Budget Changes
Release Fund Balance Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
50.335018 $39,150 C5008060.689520 $39,150
Total $39,150
Contract Request - Construction
FY2021-22 Request
Amount
CIP Account # Total Contract Amount
$2,478,205 C5008060.689000 $2,478,205
$1,600,000 C5008060.689740 $1,600,000
$1,500,000 C5007330.689000 $1,500,000
$ 900,000 C5007330.689740 $ 900,000
$3,000,000 C5007750.689410 $3,000,000
$3,900,000 C5007750.689740 $3,900,000
$ 39,150 C5008060.689520 $ 39,150
Total Construction $13,417,355
Contract Request - Construction Management
FY2021-22 Request
Amount
CIP Account # Total Contract Amount
$521,795 C5008060.689000 $521,795
Total Construction Management $521,795
Prepared By: Tom Shahbazi, Civil Engineer
Approved
Forwarded to Council
Attachments:
A. November 27, 2018 Staff Report
B. June 25, 2019 Staff Report
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C. October 15, 2019 Staff Report
D. Oaks Initiative Disclosure - Blois Construction
E. Oaks Initiative Disclosure - Willdan Engineering
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Date: May 11, 2021
To: Mayor and City Council
From: Rick Valte, Acting Director of Public Works
Subject: Water Revenue Bond for Water Self-Sufficiency Projects
Introduction
This information item summarizes the analysis completed by staff on issuing a
revenue bond as an alternative to applying for the United States Environmental
Protection Agency’s (U.S. EPA) Water Infrastructure Finance and Innovation Act
(WIFIA) loan program to close the funding gap for water self-sufficiency projects. In
total, a financing package of approximately $84 million is needed to close the funding
gap resulting from the COVID-19 pandemic and to advance future capital
improvement projects to enhance resiliency and water use efficiency. The analysis
was completed as part of the recommended action adopted by City Council on March
23, 2021 (Attachment A) to ensure the most favorable financing package.
Background
The City of Santa Monica has consistently taken a strategic approach to keeping
water and wastewater services affordable to our community while adequately
investing in long-term water quality, reliability, resiliency, and sustainability. The City
Council adopted the 2018 Sustainable Water Master Plan Update (SWMP) aimed to
provide long-term cost benefits for water ratepayers and establish a diverse,
sustainable and drought resilient local water supply.
To support the goal of providing long-term cost benefits to the City’s water
ratepayers, the Water Resources Division has been actively seeking outside funding
Information Item
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assistance (e.g., grants and state/federal low interest loans) to implement water self-
sufficiency projects. To date, the Water Resources and Engineering Divisions have
worked together to secure more than $20 million in grants and $75 million in low
interest loans to fund the suite of water self-sufficiency projects that total over $197
million. However, a few projects that comprise the SWMP remain under-funded as a
direct impact of the COVID-19 pandemic, and staff has been working to identify and
secure additional outside financial assistance. The two outside financial assistance
packages being considered are 1) U.S. EPA WIFIA Program and 2) revenue bonds.
Per Council direction on March 23, 2021, staff conducted an analysis to compare the
two outside financing packages. A brief overview of each financing package is
provided below.
U.S. EPA WIFIA Loan
The U.S. EPA WIFIA loan program was established by the Water Infrastructure
Finance and Innovation Act of 2014 with the intent to accelerate investment in our
nation’s water infrastructure by providing long-term, low-cost supplemental loans for
regionally and nationally significant projects. The WIFIA program funds up to 49% of
the total project cost. Key features and requirements of the WIFIA program include:
• The applicant would need to provide a funding match of at least 51% of the total
project cost.
• A single fixed interest rate established at closing that is equal to the U.S.
Treasury rate of similar maturity period (the interest rate at the time of this
information item preparation is approximately 2.3%).
• The loan is disbursed on a reimbursement basis where the applicant would need
to submit requests for reimbursement on a monthly or quarterly basis.
• Repayment schedules could be customized by the borrower (e.g., deferral of
payment up to five years after project completion, front or back loading
payments, etc.).
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• The minimum project size must be greater than $20 million with a maximum
repayment term of 35 years and repayment could be deferred up to 5 years after
project completion.
• The projects must follow federal guidelines for procurement, which includes
meeting American Iron and Steel requirements, Davis-Bacon Act, and allowing
for inclusive and diverse contractors.
The WIFIA loan also requires a $100,000 minimum application fee to be paid at the
time of the loan application submission and that is applied towards the credit
processing fee for closing the loan (maximum fee of $300,000, depending on the size
of the loan). An annual maintenance fee of approximately $20,000 would be paid to
the U.S. EPA to administer the loan through the end of the 35-year repayment term.
Water Revenue Bond
As an alternative to the WIFIA loan, a revenue bond supported by a steady revenue
stream generated by the projects it is funding and, in this case,, the water rate
revenues in the Water Enterprise Fund, would be utilized to finance the water self-
sufficiency projects. Key features and requirements of the revenue bond are listed
below:
• The entire bond proceeds would be available up front to fund the various projects
in the SWMP.
• Approximately 85% of the bond proceeds would need to be expended within
three years of bond issuance.
• Interest rates for the bond would be based on market conditions as well as the
applicant’s credit rating.
• Repayment of the bond typically would be over a 20- or 30-year period.
• Annual reporting of the Water Fund’s financial information, including rates and
customer base, would be required.
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Discussion
Staff worked with the Finance Department and the City’s financial advisor, Public
Resources Advisory Group (PRAG), to conduct a comparison between the U.S.
EPA’s WIFIA Loan Program and a revenue bond. Based on the financial analysis
prepared by PRAG, the interest rates offered by the U.S. EPA and those for the
revenue bonds are essentially the same. In other words, one funding package does
not offer any significant financial savings to the City over the other in terms of interest
rate, debt service or annual repayment, and total overall cost over the life of the loan
or bond. However, the revenue bond does offer a few advantages over the U.S. EPA
WIFIA loan that may indirectly provide time or cost savings to the City. The
advantages of a revenue bond are listed below:
• A revenue bond could be secured almost six months sooner than the WIFIA
loan. The revenue bond could be secured in July of 2021 compared to January
2022, at the earliest, for the WIFIA loan. Given recent market volatility and
rapid increase in interest rates, locking in the interest rate sooner would
minimize the City’s risk with respect to market volatility on interest rates.
• Securing the revenue bonds in July 2021 would also allow construction on the
Arcadia Water Treatment Plant Production Efficiency Enhancement and
Expansion Project to begin in September 2021, which could save
approximately $1.5 to $2 million in inflation cost compared to starting
construction in February of 2022.
• A revenue bond would provide the City with greater control over terms, timing,
use of funds, and structure. The City will be able to dictate the financing terms
of its bonds, including the ability to issue additional bonds in the future. Taking
on the WIFIA loan may impact the Water Enterprise Fund’s availability to
pursue any future bonds during the 35-year life of the loan. The City would
also be able to control timing and type of water system projects that are
financed and dictate the amortization of bond principal.
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•A revenue bond does not require the City to adhere to federal procurement
requirements which add another variable in market volatility risk that may
impact project costs.
•A revenue bond would provide greater cash flow stability and efficiency for the
City and the Water Fund given its upfront funding nature, compared to the
WIFIA loan that would require the City to pay project costs upfront and then
request reimbursement.
•The WIFIA loan requires several layers of reporting and an annual
maintenance fee of approximately $20,000 for U.S. EPA’s staff time. The bond
option reduces the City’s ongoing administrative effort and staff time (e.g., a
bond would require annual reporting compared to the WIFIA Loan that would
require quarterly reporting).
Based on the financial analysis prepared by PRAG and comparison of time and cost
impacts conducted by staff, a revenue bond is more favorable to the City as it allows
the projects to stay on schedule and provide greater cash flow stability. Staff is
proceeding with preparing issuance of a revenue bond for the water self-sufficiency
projects and will be bring this item to Council for approval in July 2021.
Prepared By: Sunny Wang, P.E.,
Water Resources Manager
Department of Public Works – Water Resources Division
Attachments: A. March 23, 2021 Staff Report
B. Summary of Water Self-Sufficiency Projects
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City Council Report
City Council Meeting: March 23, 2021
Agenda Item: 8.B
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To: Mayor and City Council
From: Rick Valte, Acting Public Works Director, Public Works, Water Resources
Subject: Adoption of Resolution to Apply for Financial Assistance through the U.S.
EPA's Water Infrastructure Finance and Innovation Act (WIFIA) Program and
First Modification to Agreement 3664 with PRAG
Recommended Action
Staff recommends that the City Council:
1.Adopt the attached resolution authorizing the City Manager to submit an
application for credit assistance for up to $84,520,000 through the U.S. EPA’s
Water Infrastructure Finance and Innovation Act (WIFIA) Program;
2.Authorize the City Manager or designee to negotiate and execute all documents
necessary for the credit assistance agreement with the U.S. EPA;
3.Authorize the Procurement Manager to issue a purchase order with the U.S. EPA
for closing costs in an amount not to exceed $300,000;
4.Direct staff to proceed with an analysis of a revenue bond as an alternative to the
WIFIA loan and to return to Council for authorization to issue such a bond if it is
determined to be more favorable than the WIFIA loan; and
5.Authorize budget changes as outlined in the Financial Impacts & Budgets Actions
section of this report.
Executive Summary
The City of Santa Monica has consistently taken a strategic approach to keeping water
and wastewater services affordable to our community while adequately investing in
long-term water quality, reliability, resiliency, and sustainability. The City Council
adopted the 2018 Sustainable Water Master Plan Update (SWMP) aimed to provide
long-term cost benefits for water ratepayers and establish a diverse, sustainable and
drought resilient local water supply.
To support the goal of providing long-term cost benefits to the City’s water ratepayers,
the Water Resources Division has been actively seeking outside funding assistance
(e.g., grants and state/federal low interest loans) to implement the water self-sufficiency
projects. To date, the Water Resources and Engineering Divisions have worked
ATTACHMENT A 3.D.i
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together to secure over $20 million in grants and over $75 million in low interest loans to
fund the suite of water self-sufficiency projects that total over $197 million. However, a
few projects that comprise the SWMP remain under funded as a direct impact of the
COVID-19 pandemic, and staff has been working to identify and secure additional
outside financial assistance. The two outside financial assistance packages being
considered are 1) United States Environmental Protection Agency’s (U.S. EPA) Water
Infrastructure Finance and Innovation Act (WIFIA) program and 2) revenue bonds.
The Water Resources Division proposes applying for a federal low interest loan through
the U.S. EPA WIFIA program to close the funding gap resulting from the COVID-19
pandemic, as well as advance future capital improvement projects to enhance water
use efficiency. The City is one of 55 cities and municipalities across the United States
that was invited to apply for the WIFIA loan in an amount not to exceed $84 million. The
WIFIA credit assistance program would reduce the burden on future water rates by
spreading repayment of the capital investment over a 35-year period, resulting in lower
water costs and savings for Santa Monica water customers. The WIFIA credit
assistance program, along with the grants and state revolving fund loans, could reduce
the original projected average local water production costs by as much as 20% or
savings of roughly $300 per acre-feet of water produced locally.
Staff is also analyzing the potential of issuing a revenue bond as an alternative
financing mechanism. Once the analysis is complete and if it is beneficial to the City and
the Water Fund to pursue a bond issuance rather than the WIFIA loan, staff will return
to Council for authority to issue a bond instead.
Discussion
On November 27, 2018, the City Council adopted the SWMP Update and directed staff
to proceed with implementing water self-sufficiency projects as well as pursue state
and/or federal funding opportunities to help offset capital costs and reduce overall water
production costs. The suite of water self-sufficiency projects, as well as how the projects
are inter-connected, is shown in Figure 1 and listed below:
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• Groundwater resiliency well for the Charnock Well Field
• Sustainable Water Infrastructure Project (SWIP) and SWIP injection well (SM-
10i)
• Olympic Well Field Restoration, which includes groundwater wells SM-8 and SM-
9, new Olympic Pipeline, and a new Olympic Advanced Water Treatment Facility
• Production Efficiency Enhancement and Expansion of the Arcadia Water
Treatment Plant
Component 1 –Conservation
Component 2 –Alternative Water Supply
Component 3 –New Local Groundwater
Charnock
Arcadia WTP
Potable Water Wastewater To City of
Los
Angeles
Olympic Well Field
Restoration
Clean Beaches
Initiative Tank
SMURRF
+ SWIP
Recycled
Water
(560 AFY)
1,100 AFY from
SWIP AWTF to Olympic
3,100 AFY to
Olympic AWTF
@ Arcadia WTP
Replace Aging
Charnock 13 and 18
(Resiliency for 3,900 AFY)Olympic PipelineProduction Efficiency
Enhancement (1,200 AFY)
Expand Arcadia WTP to treat
additional flows from
Olympic Well Field Optimal Conservation Plan
Figure 1: Summary of Sustainable Water Master Plan Projects
The projects approved in the 2018 SWMP Update support an overall water
infrastructure that works together to achieve the Council’s goals of water self-
sufficiency, protection of the Santa Monica Bay from urban runoff and stormwater
pollutions, creates a drought resilient water supply for Santa Monica, and provides local
cost control of Santa Monica’s water supply. To date, staff have applied for and secured
several financial assistance packages to support water self-sufficiency projects aimed to
diversify local water supplies, reduce overall water production costs for the City, comply
with regulatory requirements (e.g., stormwater capture to reduce discharges to Santa
Monica Bay), and provide long-term cost benefits to the City’s ratepayers. A summary of
various grants and loans secured to date for water self-sufficiency projects is provided
in Table 1.
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Table 1: Summary of Funding Activity to Support Water Self-Sufficiency Projects
Project Grant/Loan Amount Funding Source Notes
AWARDED
Clean Beaches
Project $3.7 million grant Proposition 40 grant
Awarded to fund clean
beaches tank to
capture additional
stormwater for
SMURRF
Sustainable Water
Infrastructure
Project
$75 million loan at an
interest rate of 1.8%
State Water
Resources Control
Board - Clean Water
State Revolving Fund
Loan
Awarded to fund entire
project
Production
Efficiency
Enhancement of
the Arcadia Water
Treatment Plant
(WTP) $10 million grant
Department of Water
Resources Water
Desalination Program
(Proposition 1)
Awarded to fund
reverse osmosis
system enhancements
IN PROGRESS
Sustainable Water
Infrastructure
Project $8.77 million grant
State Water
Resources Control
Board – Proposition 1
Storm Water Grant
Program
Awarded and
completing
supplemental
documentation request
to fund SWIP
stormwater harvesting
tank (see attachment
E)
SWIP and
Production
Efficiency
Enhancement of
Arcadia WTP
Grant of $340 per
acre-foot of water
produced locally (or
approximately
$782,000 per year
over 25 years or a
present value of $15.3
million)1
Metropolitan Water
District’s Local
Resources Program
Resolution approved
by Council on
2/23/2021 and is
scheduled for March
MWD Board Meeting
1Estimated assuming an interest rate of 2% over the 25-year period
Even with the successful pursuit of grants and loans listed in the table above, a funding
gap of approximately $53 million for water self-sufficiency projects exists as a result of
impacts of the COVID-19 pandemic, including declining revenues in the Water and
Wastewater Funds, potential supply chain issue that may increase the project cost, and
the transfer of $24 million in unrestricted Gillette and Boeing settlement funds to the
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General Fund to assist with the strain placed on the General Fund operating budget as
a result of the COVID-19 pandemic. The $24 million unrestricted settlement funds were
originally planned for funding water self-sufficiency projects. Please refer to Attachment
I for additional information on each water self-sufficiency project, project costs, and how
the projects are connected to one another to diversify the City’s water supply portfolio
and increase local water supplies.
In an effort to maintain the City’s water self-sufficiency goal and keep its commitments
to the ratepayers, staff began positioning for the U.S. EPA’s WIFIA program to close the
funding gap. The WIFIA program was established by the Water Infrastructure Finance
and Innovation Act of 2014 with the intent to accelerate investment in our nation’s water
infrastructure by providing long-term, low-cost supplemental loans for regionally and
nationally significant projects. The WIFIA program funds up to 49% of the total project
cost. Key features and requirements of the WIFIA program include:
• A single fixed interest rate established at closing that is equal to the US Treasury
rate of similar maturity period (the interest rate at the time of this staff report
preparation is approximately 1.9%);
• Repayment schedules customized by the borrower (e.g., deferral of payment up
to 5 years after project completion, front or back loading payments, etc.); and
• The minimum project size must be greater than $20 million with a maximum
repayment term of 35 years; and
• The projects must follow federal guidelines for procurement, which includes
meeting American Iron and Steel requirement, Davis-Bacon Act, and allowing for
Inclusive and Diverse contractors.
The WIFIA loan also requires a $100,000 application fee to be paid at the time of the
loan application submission and is applied towards the credit processing fee for closing
the loan (maximum fee of $300,000, depending on the size of the loan). To apply for
and close the loan, staff would require the assistance of consultants to obtain two credit
ratings for the Water Fund, prepare financial statements, and negotiate terms and
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conditions of the loan package. The outside consultants include The Ferguson Group,
Public Resources Advisory Group (financial advisors), and Orrick, Herrington & Sutcliffe
(Bond Counsel), with whom the City currently contracts with for financing projects.
Consultant fees are anticipated to cost up to $325,000 in total for the financing, whether
it is the WIFIA loan or a revenue bond issuance. These fees would be paid from bond
proceeds if the City chose to pursue a bond issuance, while the WIFIA loan would
require the fees to be advanced by the City and may not be subject to reimbursement.
With the help of consultants from The Ferguson Group, staff met with the U.S. EPA on
multiple occasions to discuss project eligibility and funding needs for the entire water
self-sufficiency project portfolio (Sustainable Water Supply Program). Not only would
the WIFIA loan help the City close the $53 million funding gap for water self-sufficiency
projects, it would also help finance and accelerate future capital improvement projects
to further enhance resiliency and water use efficiency within the current rate structure.
These future capital improvement projects are groundwater resiliency improvements at
the Charnock Well Field (up to $12 million for drilling and equipping two replacement
wells along with site improvements) and deployment of Advanced Metering
Infrastructure (AMI) or smart water meters that provide real-time tracking of water use
(approximately $15 million).
Staff submitted a Letter of Interest to the WIFIA program on October 15, 2020
requesting a loan of approximately $84 million (including contingency). The Letter of
Interest was evaluated through a competitive scoring process and resulted in the City
being one of 55 municipalities in the United States invited to apply for the WIFIA loan
(Attachment J). One of the key factors for the City’s selection is project readiness where
the City has an overarching plan in place (2018 SWMP Update) and nearly all projects
already underway (e.g., in design development or design completed and ready to bid).
Project readiness is a key factor for the U.S. EPA this year as expediting shovel ready
construction projects would help local and regional economies recover from the
pandemic. Successful close of the WIFIA loan would enable the City to deliver water
self-sufficiency by 2023.
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By achieving water self-sufficiency, the City would provide long-term cost benefits for
the ratepayers and a more sustainable, drought resilient water supply. When the Water
Resources Division updated the SWMP in 2018, it was projected that the City would
start seeing a return on its water self-sufficiency investments, where the average local
water production cost per acre-foot of water is lower than imported water costs, six
years after completion in 2023 (Figure 2). One acre-foot of water is approximately
325,851 gallons of water and comparable to the amount of water three single family
homes use, on average, in one year in Santa Monica. Initially, the local water
production unit cost in 2023 would be higher than imported water cost. However, with
increased local water supplies, the City is able to have greater cost control of its water
supply (projected annual average increase of 2-3% for local water supplies) compared
to imported water costs (projected annual average increase of 5-7%) where in 2029 the
City would start seeing a return on its investment where the local water production unit
cost is lower than the imported water cost.
With the WIFIA loan package to close the funding gap, along with other various outside
financial packages secured, the City would complete the water self-sufficiency projects
on schedule and also improve its original financial projections where the average local
water production cost would be lower than imported water costs immediately in 2023
(Figure 3). In comparing against the original timeline of 2029 when a return on
investment is projected, the updated average water production unit cost for the City with
external funding (blue bar) is nearly 20% lower than the original projections.
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Figure 2: Average Water Production Cost Comparison Between Water Produced Locally Versus Imported
Water Purchased from 2018 SWMP Update
Figure 3: Updated Average Water Production Cost Comparison Between Water Produced Locally Versus Imported
Water Purchased with Outside Funding Assistance Packages
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As noted above, the WIFIA loan would also help the City accelerate future capital
improvement projects while minimizing the burden on future water rates by spreading
repayment of the investment over the life of the loan. The WIFIA loan would also help
finance groundwater resiliency enhancements at the Charnock Well Field and full
deployment of AMI smart water meters throughout the City to improve water use
efficiency. During Fiscal Year 2020-2021, two groundwater wells at the Charnock Well
Field (Charnock 13 and Charnock 18) were out of service for unforeseen repairs that
resulted in the City losing approximately 35% of its local groundwater supply. The
extended outage of Charnock 13 and 18 resulted in an increase in imported water
purchase expenditures of $1.5 million for FY2020-21. In addition, a future budget
increase of approximately $800,000 per year for imported water purchase is needed to
account for increased downtime from aging wells as well as lost production capacity
from the well repairs (note a groundwater well could lose up to 50% of its pumping
capacity, depending on type of repair needed, as experienced in well Santa Monica 3 in
the Olympic Well Field). Both groundwater wells are beyond their useful lives and need
replacement. Replacing these two wells would improve overall resiliency as new wells
would have less down time and maintain higher production rates. Leveraging the WIFIA
loan would allow the City to replace these two wells now, without any impacts to the
water rates, instead of waiting until the next rate study period (2024 and beyond).
The second project that would be accelerated through the WIFIA loan is deployment of
AMI smart water meters to improve water use efficiency in the City’s service area. The
AMI project has been deferred through two rate study periods (10 years) as water
treatment and distribution infrastructure upgrades often take a higher priority when
balancing capital expenditures and proposed rate increases. Leveraging the WIFIA loan
to fund the AMI project would not have any impact on current water rates and would
minimize impacts on future rates as the project cost would be spread over 30 to 35
years.
The key benefit of AMI smart water meters is allowing the City to monitor water usage
citywide and for individual customers to be able to track their own water usage in real
time. The current meter reading process involves the manual reading of 18,226 meters
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every other month, which allows for up to 60 days before a potential leak is identified
due to high water consumption. An immediate benefit of this project is improved leak
detection which would significantly enhance the City’s water conservation efforts. In two
recent studies conducted by utilities in California (one large water utility with over
85,000 customers and one small, mid-size utility similar to the City of Santa Monica), a
five to seven percent water savings from residential water leaks was quantified with the
use of AMI smart water meters. A five percent water savings for Santa Monica would
be approximately 500 to 600 acre-feet per year of water, which equates to
approximately how much water is used by 1,400 single family homes or 4,500 multi-
family units each year. Additional long-term benefits with AMI smart water meters are
more efficient billing and improved accuracy in meter reads.
In parallel with preparing the WIFIA loan application, staff would also conduct a
comparison between the WIFIA loan and potential issuance of a revenue bond to
finance the projects. The comparison would ensure that the City selected the most
beneficial financing that also took into consideration the Water Fund’s long-term capital
project programming flexibility. Should this analysis determine bond issuance would be
more favorable for the City, staff would return to Council at a later date to hold a public
hearing and adopt a resolution for bond issuance.
Past Council Actions
11/27/18 (Attachment A) City Council directed staff to proceed with the
Sustainable Water Master Plan Update and pursue
outside grant funding for water self-sufficiency
projects.
11/27/18 (Attachment B) Resolution Adopting the California Environmental
Quality Act (CEQA) Addendum for SWIP IS/MND
9/10/2019 (Attachment C) Approval of Sustainable Water Infrastructure
Project (SWIP) Design/Build Guaranteed Maximum
Price Amendment
2/23/2021 (Attachments D & E) Adoption of Resolution to Negotiate and Execute
Water Desalination Grant with the State of
California Department of Water Resources
2/23/2021 (Attachment F) Adoption of Resolution to Enter Into an Agreement
to receive funding from the Metropolitan Water
District of Southern California’s Local Resources
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Program
12/17/2019 (Attachment G) Award Request for Proposal and enter into
Agreement with Walsh Construction for Design-
Builder Services for the Olympic Well Field
Restoration and Arcadia WTP Expansion
12/24/2020 (Attachment H) Adopt IS/MND for the Arcadia Water Treatment
Plant Expansion Project Staff Report
Financial Impacts and Budget Actions
Staff seeks authority to apply for a loan up to $84 million from the U.S. EPA’s WIFIA
Program. Between the two financing options, should WIFIA Loan be the better financial
option for the City, staff is requesting to appropriate the following funds for the WIFIA
Loan application and credit processing fees.
FY 2020-21 Budget Changes
Funding Source Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
Water Fund Balance $300,000 50500001.550010 $300,000
Total $300,000 Total $300,000
If staff determines that a revenue bond is more favorable than the WIFIA Loan, then this
budget action will not be necessary. Additional budget changes will be included in
subsequent year budgets, contingent on Council budget approval.
Prepared By: Sunny Wang, Water Resources Manager
Approved
Forwarded to Council
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Attachments:
A.November 27. 2018 Sustainable Water Master Plan Update Staff Report (Web
Link)
B.November 27, 2018 Resolution Adopting the California Environmental Quality Act
(CEQA) Addendum for SWIP IS/MND (Web Link)
C.September 10, 2019 Approval of Sustainable Water Infrastructure Project (SWIP)
Design/Build Guaranteed Maximum Price Amendment (Web Link)
D.February 23, 2021 Adoption of Resolution to Negotiate and Execute Water
Desalination Grant with the State of California Department of Water Resources
(Web Link)
E.State Water Resources Control Board Prop 1 Stormwater Grant Program
Preliminary Award List (Web Link)
F.February 23, 2021 Adoption of Resolution to Enter Into an Agreement to receive
funding from the Metropolitan Water District of Southern California’s Local
Resources Program (Web Link)
G.December 17, 2019 Award Request for Proposal and enter into Agreement with
Walsh Construction for Design-Builder Services for the Olympic Well Field
Restoration and Arcadia WTP Expansion (Web Link)
H.November 24, 2020 IS/MND for the Arcadia Water Treatment Plant Expansion
Project Staff Report (Web Link)
I.Summary of Water Self-Sufficiency Projects
J.WIFIA Selection Notification_Santa Monica
K.Proposed Resolution - WIFIA Application
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City of Santa Monica
Sustainable Water Supply Program
ATTACHMENT B 3.D.i
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City of Santa Monica – Water Resources Division
93,000+residents
2,700+ commercial
customers
Drinking water and
fire protection surface water (MWD)
groundwater (local)
9 million gallons
of high-quality drinking
water daily
14 million gallons
of wastewater captured
and delivered for treatment
each day
77,000 gallons
per day of recycled
water
4 water storage
reservoirs
totaling 40 million gallons
Sewer collection and
recycled water
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Sustainable Water Master Plan
1%
The City of Santa Monica has consistently taken a strategic
approach to keeping water and wastewater services
affordable to our community while adequately investing in
long-term water quality, reliability, resiliency, and
sustainability. The City Council adopted the 2018
Sustainable Water Master Plan Update (SWMP) aimed to:
•Provide long-term cost benefits for water ratepayers
•Establish a diverse, sustainable and drought
resilient local water supply to support a sustainable
community
•Reduce the City’s energy footprint
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Supporting a Sustainable Community with Water Self-Sufficiency
2011 20232017
Local Groundwater
Imported Water
Conservation
Alternative Water Supply
1%
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Santa Monica’s Current Water Supply Portfolio
Current Water Supply Portfolio.The City
currently meets 60-70% of its water demand
through local groundwater supplies and
supplements the rest through imported water
from the Metropolitan Water District of
Southern California. The existing Santa Monica
Urban Runoff Recycling Facility (SMURRF)
produces non-potable water for irrigation and
toilet flushing that offsets about 1% of the City’s
potable water demand.
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Component 1 – Conservation
Component 2 – Alternative Water Supply
Component 3 – New Local Groundwater
Strategy to Achieve Water Self-Sufficiency
Charnock
Arcadia WTP
Potable Water Wastewater To City of
Los
Angeles
Olympic Well Field
Restoration
Clean Beaches
Initiative Tank
SMURRF
+ SWIP
Recycled
Water
(560 AFY)
1,100 AFY from
SWIP AWTF to Olympic
3,100 AFY to
Olympic AWTF
@ Arcadia WTP
Charnock Groundwater
Resiliency - Replace Aging
Charnock Wells 13 and 18 Olympic PipelineProduction Efficiency
Enhancement (1,200 AFY)
Expand Arcadia WTP to treat
additional flows from
Olympic Well Field Optimal Conservation Plan
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Key Water Self-Sufficiency Projects
• Component 2 – Alternative Water
Supplies
• Sustainable Water Infrastructure Project (SWIP)
• SWIP Injection Well SM-10i
• Production Efficiency Enhancement at Arcadia
Water Treatment Plant
• Component 3 – New Local
Groundwater
• New Olympic Wells, SM-9 and SM-8
• New Olympic Pipeline and Olympic AWTF
• Expansion of Arcadia Water Treatment Plant
• Groundwater resiliency at Charnock Well Field
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Sustainable Water Infrastructure Project (SWIP)
• Overview of SWIP
• Element 1 – upgrade existing Santa Monica Urban Recycling Facility
(SMURRF) to maintain consistent recycled water production
• Element 2 – new SWIP Advanced Water Treatment Facility to capture
wastewater and stormwater that will be treated for non-potable use
and groundwater recharge
• Element 3 – new stormwater harvest tank to capture urban runoff and
stormwater for beneficial reuse.
• The SWIP will add 1,100 acre-feet per year of drought resilient water
supply (10% of the City’s water supply), replenish local groundwater
supplies, and improve water quality in the Santa Monica Bay
• SWIP Injection Well SM-10i
• The SWIP Injection Well will be located in the Olympic Well Field and
recharge the Olympic Sub-basin with water from SWIP
• The water being recharged through the SWIP Injection Well SM-10i
will help maintain 3,100 acre-feet per year of pumping from the
Olympic Well Field or approximately 20% of the total water supply
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Production Efficiency Enhancement at Arcadia WTP
• Overview of Arcadia Water Treatment Plant
• The Arcadia Water Treatment Plant was upgraded in 2010 as part
of the Charnock Well Field Restoration Project and provides multi-
barrier treatment for the City’s drinking water supply
• The existing Arcadia Water Treatment Plant operates around 80%
efficiency due to the reverse osmosis treatment technology used
to produce high-quality drinking water.
• Production Efficiency Enhancement
• The existing reverse osmosis system will be upgraded with new
technology to increase the plant’s overall recovery to 90% or
greater and reduce concentrate waste being discharged into the
sewer system.
• The production efficiency enhancement would produce up to
1,200 acre-feet per year (~8% of the total water supply) of potable
water without having to extract any additional groundwater for it.
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Olympic Well Field Restoration
• Overview of Olympic Well Field
• The Olympic Well Field is the City’s second largest well field and
provides up to 20% (3,100 acre-feet per year) of the City’s
groundwater supply
• Production at the Olympic Well Field has been limited to
approximately 40-50% of the total capacity due to groundwater
contamination and new regulations for the contaminants
• Olympic Well Field Restoration
• Two new groundwater wells (SM-8 and SM-9) will be constructed
to replace aging wells and to restore the well field to full pumping
capacity of 3,100 acre-feet per year
• A new Olympic Pipeline will be constructed to send water from the
Olympic Well Field to a new well head treatment facility
• A new Olympic Advanced Water Treatment Facility will be
constructed (through settlement funds) to remove the
contaminants and restore Olympic Well Field to full production
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Arcadia Water Treatment Plant Expansion
• Overview of Arcadia WTP
• The Arcadia Water Treatment Plant was upgraded in 2010 as part
of the Charnock Well Field Restoration Project and provides multi-
barrier treatment for the City’s drinking water supply
• The existing raw groundwater treatment capacity is approximately
10 million gallons per day
• Expansion of Arcadia WTP
• The Arcadia WTP will be expanded to treat up to 13 million gallons
per day of local groundwater.
• Upgrades and expansion are needed to accommodate additional
groundwater flows from the Olympic Well Field (providing
additional treatment after the new Olympic Advanced Water
Treatment Facility) and support additional production from the
production efficiency enhancement project
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Packet Pg. 143 Attachment: Attachment I -Information Item: Water Revenue Bond for Water Self-Sufficiency Projects
12
Groundwater Resiliency at Charnock Well Field
• Overview of Charnock Well Field
• The Charnock Well Field is the City’s largest well field and
provides over 70% of the City’s groundwater supply or over 50% of
the total water supply
• Consist of five wells, four of which have been in service since the
1980s and have operated beyond its typical asset life
• Groundwater Resiliency Improvement
• The original groundwater resiliency well project is being replaced
in favor of replacing Charnock Wells 13 and 18 as it is near the
end of its asset life and has lost significant pumping capacity over
time due to major repairs
• Charnock Wells 13 and 18 accounts for approximately 35% of the
City’s total groundwater supply and was not scheduled for
replacement until after 2024. Replacing the aging wells now will
not only restore pumping capacity but reduce outages for
maintenance and repairs.
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Packet Pg. 144 Attachment: Attachment I -Information Item: Water Revenue Bond for Water Self-Sufficiency Projects
13
Advanced Metering Infrastructure (AMI) Smart Water Meters
• Current Water Meter Infrastructure
• The City’s current water meters, over 18,000 accounts, are read
manually every other month, which allows for up to 60 days before
a potential leak is identified from high water consumption.
• AMI Smart Water Meter Infrastructure
• Future Capital Project that could be accelerated and financed
through the WIFIA Loan as it would increase water use efficiency
throughout the City as AMI Smart Water Meters could provide real
time water consumption readings to both the customer and to the
City, resulting in water leaks detected within 24 hours.
• Deployment of AMI Smart Water Meters could potentially provide
5-7% (500-600 acre-feet per year of water) in water savings from
reduced residential water leaks.
• The AMI Smart Water Meters would also provide more efficient
billing process, customer self-usage monitoring, and improved
accuracy in meter reads.
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Packet Pg. 145 Attachment: Attachment I -Information Item: Water Revenue Bond for Water Self-Sufficiency Projects
Funding Assistance
Brown and Caldwell 14
• State Water Resources Control Board: Clean Water SRF
$75 million loan for SWIP
• Department of Water Resources: Water Desalination Grant
Program - $10 million construction grant for the Production
Efficiency Enhancement at Arcadia WTP
• State Water Resources Control Board: Prop 1 Stormwater
Grant - $8.77 million for SWIP stormwater tank
• Metropolitan Water District of Southern California: Local
Resources Program for up to $782,000 per year for water
produced by SWIP and the Production Efficiency
Enhancement Project.
• Invited to apply for U.S. EPA WIFIA Loan – up to $84 million
for the City’s Sustainable Water Supply Program
To support the goal of providing long-term cost
benefits to the City’s water ratepayers, the Water
Resources Division has been actively seeking
outside funding assistance (e.g., grants and
state/federal low interest loans) to implement the
water self-sufficiency projects. To date the Water
Resources Division has secured outside
assistance from the agencies listed to the right.
The U.S. EPA WIFIA Loan would help bridge the
funding gap (see attached table), as a result of
the COVID-19 pandemic, to complete the water
self-sufficiency projects as well as accelerate
future capital projects to enhance water
efficiency.
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Packet Pg. 146 Attachment: Attachment I -Information Item: Water Revenue Bond for Water Self-Sufficiency Projects
Summary of Water Self-Sufficiency Project Cost and Funding Gaps
Project Name
Water
Production
(%Water Supply)
Total Cost Amount
Funded WIFIA Loan Notes
Groundwater Resiliency Well
Improvements at Charnock
Well Field
3,900 AFY
(25%) $11,700,000 - $11,700,000
· Original property acquisition for resiliency well
abandoned as it does not qualify for outside
funding assistance
· Replaced original groundwater resiliency well to
accelerate future CIP and replace aging Charnock
Wells 13 and 18
· Charnock Wells 13 and 18 account for about 35%
of the City’s current total groundwater pumping
capacity
Sustainable Water
Infrastructure Project (SWIP)
1,660 AFY
(10%)
$96,000,000 $96,000,000 -
· Captures stormwater, urban runoff, and municipal
wastewater to provide a drought resilient water
supply for the City
· Fully funded by Wastewater Funds, Measure V
(Stormwater) Funds, and low interest loan from the
Clean Water State Revolving Fund
· Produces advanced treated recycled water to
increase recycled water use in the City and for
groundwater recharge at the Olympic Well Field
· Part of the Sustainable Water Supply Program in
the City’s WIFIA Loan application that is used as
matching cost
SWIP Injection Well (SM-
10i) $2,500,000 $1,500,000 $1,000,000
· Required to support SWIP and inject advanced
treated recycled water back into the groundwater
basin
· Recharges up to 1,100 AFY in Olympic Well Field
and ultimately extracted by Olympic Well SM-4
Groundwater Well (SM-9)
Equip.
2,100 AFY
(14%) $2,400,000 $1,500,000 $900,000
· Partially funded by Water Fund
· To restore 1/3 of Olympic Well Field’s pumping
capacity by replacing existing Olympic Well SM-3
(1050 AFY)
· SM-3 lost 50% production capacity due to age and
re-casing of well
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Packet Pg. 147 Attachment: Attachment I -Information Item: Water Revenue Bond for Water Self-Sufficiency Projects
Project Name
Water
Production
(%Water Supply)
Total Cost Amount
Funded WIFIA Loan Notes
Groundwater Well (SM-8)
Equip. $2,500,000 $1,500,000 $1,000,000
· Partially funded by Water Fund
· To restore 1/3 of Olympic Well Field’s pumping
capacity by replacing existing Olympic Well SM-7
(1050 AFY) due to age and decline in production
Olympic Pipeline $6,800,000 $3,000,000 $3,800,000
· To convey groundwater from new SM-9, new SM-
8, and existing SM-4 wells to new remediation
treatment facility
· Partially funded by Gillette-Boeing settlement
funds
Olympic Well Field
Restoration (new Olympic
Advanced Water Treatment
Facility)
$18,600,000 $18,600,000 -
· Fully funded through Gillette-Boeing settlement
funds
· Provides well head remediation treatment to
restore Olympic Well Field to full production
capacity (3,100 AFY total)
Arcadia WTP Expansion
1,200 AFY
(10%)
$39,800,000 - $39,800,000
· Expansion needed to treat additional 2,100 AFY
(from the Olympic Well Field
· Will increase overall plant efficiency from 80 to
90%, producing additional potable water without
having to increase groundwater pumping
· Partially funded through $10M Prop 1 Desal Grant
to fund partial scope
Arcadia WTP Production
Efficiency Enhancement $17,200,000 $10,000,000 $7,200,000
AMI Smart Water Meter N/A $15,000,000 - $15,000,000
· Future CIP that is accelerated and reduces burden
on future water rates
· Increase water use efficiency citywide through
real-time water use monitoring
· Potentially reduce water loss by up to 5-7%
system wide
TOTAL $212,500,000 $132,100,000 $80,400,000
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Packet Pg. 148 Attachment: Attachment I -Information Item: Water Revenue Bond for Water Self-Sufficiency Projects
CITY OF SANTA MONICA
OAKS INITIATIVE NOTICE
NOTICE TO APPLICANTS, BIDDERS, PROPOSERS
AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS,
OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA
Santa Monica’s voters adopted a City Charter amendment commonly known as
the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and
information about the Initiative’s requirements. You may obtain a full copy of the Initiative’s
text from the City Clerk.
This information is required by City Charter Article XXII—Taxpayer Protection. It
prohibits a public official from receiving, and a person or entity from conferring, specified
personal benefits or campaign advantages from a person or entity after the official votes,
or otherwise takes official action, to award a “public benefit” to that person or entity. The
prohibition applies within and outside of the geographical boundaries of Santa Monica.
All persons or entities applying or receiving public benefits from the City of Santa
Monica shall provide the names of trustees, directors, partners, and officers, and names
of persons with more than a 10% equity, participation or revenue interest. An exception
exists for persons serving in those capacities as volunteers, without compensation, for
organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the
Internal Revenue Code. However, this exception does not apply if the organization is a
political committee or controls political committees. Examples of a “public benefit” include
public contracts to provide goods or services worth more than $25,000 or a land use
approval worth more than $25,000 over a 12-month period.
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an
entity, rather than an individual person, the information includes the name of every person
who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent
interest in the entity. Therefore, if you are seeking a “public benefit” covered by the Oaks
Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This
information must be updated and supplied every 12 months.
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Packet Pg. 149 Attachment: Attachment J - Walsh Oaks Form (4613 : Arcadia Design/Build GMP Amendment)
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Packet Pg. 150 Attachment: Attachment J - Walsh Oaks Form (4613 : Arcadia Design/Build GMP Amendment)
CITY OF SANTA MONICA
OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a “public benefit.” If the “public benefit” is sought by
an entity, rather than an individual person, the information includes the name of every
person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten
percent interest in the entity.
Public benefits include:
1. Personal services contracts in excess of $25,000 over any 12-month period;
2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-
month period;
3. Purchase, sale or lease of real property to or from the City in excess of $25,000
over a 12- month period;
4. Non-competitive franchise awards with gross revenue of $50,000 or more in any
12-month period;
5. Land use variance, special use permit, or other exception to an established land
use plan, where the decision has a value in excess of $25,000;
6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12-
month period; or
7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12-
month period.
Name(s) of persons or entities receiving public benefit:
Name(s) of trustees, directors, partners, and officers:
Name(s) of persons with more than a 10% equity, participation, or revenue interest:
Prepared by: ____________________________Title: __________________________
Signature: ______________________________________ Date: ________________
Email: ____________________________________ Phone: ____________________
FOR CITY USE ONLY:
Bid/PO/Contract # ____________________________ Permit # ___________________________
y______________
__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Greg Chelini, PE Vice President
5/21/2021
gchelini@mnsengineers.com 805.896.9474
MNS Engineers, Inc.
Jim Salvito, CEO/President; Mark Reinhardt, Treasurer; Miranda Patton, Secretary
Jim Salvito and Greg Chelini
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Packet Pg. 151 Attachment: Attachment K - MNS Oaks Form (4613 : Arcadia Design/Build GMP Amendment)