SR-6-D (86)
JUN 2 9 1999
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EPWM:CP:CP F IEPWMIADMINIWPDOCSISTAFFRPnwlrgarden wpd
Council Meeting: June 29,1999 Santa MOnica, California
TO: Mayor and City Council
FROM City Staff
SUBJECT: Recommendation to Authorize the City Manager to Negotiate and
Execute a Modification to the Sewage and Water Conservation
Comphance Agreement with Water Garden Phase I and II to
Require Use of Reclaimed Stormwater In Lieu of Reclaimed
Wastewater for Non-Potable Extenor and Intenor Water Uses
INTRODUCTION
This report recommends that the City Council authorize the City Manager to negotiate
and execute a modification to the Sewage and Water Conservation Compliance
Agreement with Water Garden Phase I and II to reqUire the use of reclaimed water from
the City's Dry Weather Runoff Reclamation Facility (DWRRF) In lieu of the use of
treated wastewater from an on-sIte sewage treatment facility, and approve various in-
lieu payments to the City'S Wastewater and Stormwater Management funds.
BACKGROUND
At their meeting of March 8, 1988 Council approved a Sewage and Water Conservation
Compliance Agreement (Agreement) for the Water Garden development. Among other
requirements, the Agreement required that all wastewater generated by the project
(with the exception of restaurants) be treated In an on-site treatment system and used
for landscape irrigation, replenishment of the artificial lake and other water features
and for tOilet and urinal flushing In Phase II of the proJect.
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JUN 29 1999
An on-site wastewater treatment and reclamation plant was constructed as a part of the
Phase I Water Garden project and has been operating for approximately eight (8)
years. The treatment capacity of the on-site system IS approxImately 25,000 gallons per
day which has proved to be insufficient to supply all of the landscape imgation and
lake/fountain replenishment needs of the project. The responsibility for operation and
maintenance of the plant rests with the Phase I owner (Tooley & Company) With the
City performing an oversight role in conjunction with the Regional Water Quality
Control Board which issues the operating permits for the plant The Water Garden
Phase II development is now in the early construction phase and, under the terms of
the Agreement, must also provide for on-site treatment of sewage to produce reclaimed
water for use In additional landscaping, water features and tOilet and unnal flushing
within Phase II bUildings
Per the terms of the original Development Agreement, the Phase I AND Phase II
projects have been granted a 90% credit on the Sewer Connection Fee In
consideration of the sewage flow reductions achieved by the on-site treatment plants
DISCUSSION
Over the past several months the developer of Water Garden Phase II. J.H Snyder
Company, and City staff have been discuSSing vanous aspects related to the design of
the off-Site and on-site improvements reqUIred as a part of the final Water Garden
development phase During these diSCUSSions, It became apparent to both the City and
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the J H. Snyder Company that a better approach to reducing the demand for potable
water In the project would be a tie-In WIth the planned DWRRF project located by the
Santa Momca Pier. As more specific discussions on the feasibility of a DWRRF
connection ensued, the City was approached by Tooley & Company, owners of the
Water Garden Phase I, who were also Interested In discussing alternatives to
continued operation of their on-site sewage treatment facility due to technical, safety
and cost issues associated With the plant. The Phase I owners also perceived a tie-in
with the City's DWRRF project as a less problematic and more cost-effective approach
The benefits to the Water Garden Phase I and Phase II owners from a tie-in to the
DWRRF m lieu of on-site sewage treatment are three-fold: 1} use of reclaimed
stormwater will cost less over time than use of reclamled wastewater primarily due to
the elimination of expensive operation, maintenance, repair and compltance testing
costs associated With the on-SIte sewage treatment systems; 2) the on-site sewage
treatment system has proved to be less reliable than anticipated and cannot be cost-
effectively upgraded to meet increased exterior water demand; and 3) the de-
commissioning of the on-site plant Will alleViate many employee and viSitor health and
safety concerns which are outside of the core competency of the project owners
The benefits to the City from a tie-in to the Water Garden project are also three-fold: 1)
less potable water will be used at the site than would be the case With on-site treatment
systems since the DWRRF project will be capable of supplying additional reclaimed
water to meet fluctuating demand and Will have much greater reliability; 2) the tie-In to
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the Phase" tOilets and Urinals will provide an average dally demand for reclaimed
water which is more constant arid stable than landscape irngation demand and will
therefore Improve the profile of the DWRRF's customer base; and 3} the proposed
Agreement modIfications Will result In additional revenues to the Sewer Fund which will
be used for citywide sewer upgrade projects, and additIOnal revenues to the
Stormwater Management Fund which WIll be used to pay for the Clty's costs of
extending the reclaimed water distribution line to the Water Garden site. offset the
City.s on-going DWRRF costs as well as finance additional stormwater mitigation
projects In the community.
Under the terms which staff has negotiated With Water Garden Phase I, a total payment
of $1 million would be made to the City in lieu of continued operation of the on-site
treatment facility. Of this amount, $694,172 represents the remaining 90% balance of
the sewer connection fee which was Originally aVOIded by the project and would be
depoSIted In the Sewer Fund. The remaining $305,828 would be deposited In the
Stormwater Management Fund. These amounts would be paid In three equal
installments as follows: one-third to be paid prior to January 1, 2000; one-third to be
paid prior to January 1, 2001, and one-third to be paid prior to January 1, 2002.
Under the terms which staff has negotiated With Water Garden Phase II, a total
payment of $1,788,000 would be made to the City In lieu ofthe construction and
operation of an on-sIte sewage treatment faCility Of this amount, $558,000 represents
the remaining 90% of the full sewer connection fee which was Originally avoided at the
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time of building permit Issuance and would be deposited In the Sewer Fund. This
amount would be paid In full within 45 days of the execution of the modified Agreement.
The remaining $1,230,000 would be depoSited in the Stormwater Management Fund
and would be paid In three equal installments as follows: $410,000 to be paid prior to
Issuance of a certificate of occupancy for the proJect, $410,000 to be paid WIthin one
year of the Issuance of a certificate of occupancy; and $410,000 to be paid within two
years of the Issuance of a certificate of occupancy for the project
For both Phase I and Phase II, the City would also agree that at no time would the price
of DWRRF reclaimed water supplied to the Water Garden by the City exceed the
prevailing potable water rates charged to the City's water customers.
BUDGET/FISCAL IMPACT
There are no expenditure impacts assOCiated With approval of the proposed
modifications to the Agreement except for the additional cost of extending the proposed
DWRRF reclaimed water line from OlympiC Blvd. and 17*' street, as is currently
planned, to OlympiC Blvd and 26th Street. Since the deSign and bidding process for the
DWRRF distribution system will not be completed until the fall of this year. a
preliminary estimate IS that thiS additional cost should not exceed $200,000 which will
be more than covered by the Increased revenues to the Stormwater Fund which would
result from execution of the modified Agreement
If approved by Council, the modified Agreement would result in additional unrestricted
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Sewer Fund revenues In the amount of $1,252,172 to be deposited In Sewer Fund
account #31-500-661-00000-0263-10000. and additional unrestricted Stormwater
Management Fund revenues in the amount of $1,535,828 to be deposited in
Stormwater Fund account #34-500-661-00000-0295-10000.
RECOMMENDATION
It is recommended that Council Authorize the City Manager to negotiate and execute a
modification to the Sewage and Water Conservation Compliance Agreement with
Water Garden Phase I and Phase II to require the use of reclaimed stormwater in lieu
of reclaimed wastewater for non-potable exterior and interior water uses.
Prepared by: Craig Perkins, Director of Environmental and Public Works
Management
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