SR-0 (53)
8S:SES:JRM
MWDGWRP
Council Meeting: March 3, 1992
Santa Monica, California
~o: Mayor and City Council
From: City Staff
Subject: Recommendation to Authorize the City Manager to Negotiate
and Execute a Joint Participation Agreement with the
Metropolitan Water District of Southern California for
the Santa Monica Groundwater Treatment Project
Introduction
This report requests that the City Council authorize the City
Manager to negotiate and execute a Joint Participation Agreement
with the Metropolitan Water District of Southern California for
financial incentive credits toward the purchase of MWD water. The
credits are made possible through a program to encourage member
agencies to develop additional local water resources.
Backqround
Local groundwater currently provides approximately 50 percent of
the City's water supply and the remaining 50 percent is purchased
from Metropolitan Water District(MWD). Because imported water is
becoming less of a reliable source it is desirable to provide
additional groundwater development to reduce the City's dependence
on imported water and enhance the City's water supply.
Based upon a comprehensive water system capital improvement plan,
the City embarked upon a program in the mid- 1980's to increase its
groundwater production through the replacement and addition of
~ells to the city water system. ~nfortunately trichloroethylene
(TCE) contamination was discovered In several wells forcing the
City to become more dependent upon purchased MWD water.
To assess the feasibility of restoring and increasing the
City's groundwater production capability, the City engaged
Kennedy/Jenks/Chilton, Consulting Engineers, to prepare a study.
The study recommended that the City replace two wells to allow for
increased production, and add facilities at the City's Water
Treatment Plant to expand the softening capacity for all wells and
provide for TCE removal. As a result of these recommendations, the
City moved forward with the expansion and upgrades at the Arcadia
Water Treatment Plant and replaced one well. The second well is
planned for replacement within the next year.
During the time the Ci ty has been expanding its local water
?roduction capacity, MWD initiated several programs to encourage
~ts member agencies to develop additional local water resources.
One of these programs is the Groundwater Recovery Program. In this
program MWD provides a financial incentive for its member agencies
to construct facilities to recover additional groundwater. This
incentive is in the form of providing credits to a member agency to
offset the increased cost of producing and treating additional
groundwater as compared to purchasing MWO water.
When a member agency constructs a facility to increase the amount
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ot groundwater produced, the total construct~on and operating cost
ot the project is determined and converted into a cost of water
produced per acre foot. If this cost is higher than purchased MWD
water, MWD will credit the difference between the project cost and
current MWD water rate on a per acre foot basis. This credit by
MWD provides for a lower overall project cost to the member agency,
enhances the reliability of local supply and potentially reduces
demand on the MWD system.
The expansion and upgrade of the Ci tyl s water treatment plant
provides a basis for the City to qualify for credits under the MWD
Ground Water Recovery Program. The City must enter into a 20 year
Joint Participation Agreement with MWD to be eligible for credits
under this program.
Budaet/Financial Imnacts
Once the 20 year Joint Participation Agreement is fully executed
the City will be required to meet certain terms and conditions of
the agreement to receive a credit. The major aspects of the
agreement will include such items as: City commitment to produce
specified additional acre feet of water per year over the 1986-1990
historical production level; development of a cost accounting plan
for cost relating to the treatment plant; and auaits of capital,
operating and maintenance expenses for the treatment plant.
During the first two years of the agreement the City will receive
a credit of $ 42,300 for water produced in FY 1991/92 and $ 77,400
for water produced in FY 1992/93. These funds will be received as
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a credit on the monthly invoices from MWD for purchased water in
fiscal years 1992/93 and 1993/94, respectively. The credit for
1991/92 will be reflected in the Water Division's 1992/93 budget
request.
The 3rd through 20th years of the agreement may not generate any
credit by MWD due to projected increased MWD water cost to the
City. However, should the cost of producing local water remain
above the purchase price of MWO water the City will continue to be
eligible to receive a credit
Recommendation
It is recommended that the City Council authorize the City Manager to
negotiate and execute a Joint Participation Agreement with the
Metropolitan water District of Southern California for the recovery and
utilization of groundwater.
Prepared by: Stan Schall, Director of General Services
John Mundy, Utilities Manager
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