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SR 12-18-2018 3K City Council Report City Council Meeting: December 18, 2018 Agenda Item: 3.K 1 of 3 To: Mayor and City Council From: Susan Cline, Director, Public Works, Water Resources Subject: Application for Grant Funds from the California State Department of Water Resources Proposition 1 Grant Program for the Santa Monica Sustainable Water Infrastructure Project and Closed Circuit Reverse Osmosis Project Recommended Action Staff recommends that the City Council: 1. Adopt the attached resolution authorizing the application for grant funds in the amount of $2,800,000 for the Sustainable Water Infrastructure Project and up to $10,000,000 for the Closed-Circuit Reverse Osmosis Project from the California State Department of Water Resources. 2. Authorize the City Manager to execute all necessary documents to apply for the grant, accept the grant, if awarded, and accept all grant renewals, if awarded. 3. Authorize budget changes as outlined in the Financial Impacts and Budget Actions section of this report, in the event that the grant is awarded. Summary The Sustainable Water Infrastructure Project (SWIP) and Arcadia Water Treatment Plant Closed Circuit Reverse Osmosis (CCRO) Project support the City’s goal of achieving water self-sufficiency by 2023. Both the SWIP and CCRO Project include elements that qualify for grant funding from the California Department of Water Resources’ Desalination Grant Program. As part of the grant application submittal, the Department of Water Resources requires the City’s governing body to authorize the City Manager to file an application for funding. If awarded, the City Manager would be authorized to negotiate and enter into an agreement with the California Department of Water Resources. Discussion On January 25, 2011, the City Council directed staff to develop a plan to achieve 100% self-sufficiency from local water sources (Attachment A). To help achieve this goal, City Council approved the SWIP and CCRO Project. CCRO is a technical name for 2 of 3 Component 2 of the Sustainable Water Master Plan, incorporating alternative water supply and increasing production efficiencies. Council directed staff to proceed with funding strategies on November 27, 2018. As part of the SWIP, the existing Santa Monica Urban Runoff Recycling Facility (SMURRF) will be upgraded with a reverse osmosis treatment system to treat shallow brackish (salty) groundwater that will be collected at the nearby Clean Beaches storage tank. The upgrades at SMURRF will provide consistent recycled water production of up to 560 acre-feet per year (AFY) for non-potable reuse such as irrigation and toilet flushing, which is estimated to be approximately 4% of the City’s total water supply in 2023. SWIP is estimated to be completed in 2020. The CCRO Project would upgrade the existing Arcadia Water Treatment Plant with a closed-circuit reverse osmosis system that will enable the City to treat the reverse osmosis concentrate that is left over after the water is treated and currently discharged to the sewer. This project would increase the amount of potable water produced from the same amount of groundwater by approximately 10%, by increasing plant efficiency from the current 82% to approximately 92%. Completion of the CCRO Project is estimated to be in 2023. The SWIP Project budget is $69 million, and the CCRO Project is estimated to cost $30 million. To help offset cost to the City, staff is actively pursuing state and federal funding to help pay for these projects. One of these funding sources is the California Department of Water Resources, which provides funding to support brackish water projects. If successful, the City could obtain up to $2.8 million to help fund the SWIP and up to $10 million for the CCRO Project. The grant requires a 50% match from the City and has a ceiling of $10 million for grants to fund construction costs. Past Council Actions 01/25/11 (Attachment A) City Council directs staff to develop a plan to reach water self-sufficiency 09/12/17 (Attachment B) City Council authorizes the City Manager to accept a funding agreement from the California Water Resources Control Board’s Clean Water State Revolving Fund Program for the Sustainable Water Infrastructure Project (SWIP) 3 of 3 11/27/18 (Attachment C) City Council directs staff to proceed with an update to the Sustainable Water Master Plan and the recommended a pathway to water self-sufficiency Financial Impacts and Budget Actions Staff seeks authority to apply for grants from the California Department of Water Resources. If any grant is awarded through this funding program, a 50% match is required from the City. The SWIP project is currently budgeted in the CIP. Any grant funds received would result in savings to the receiving CIP project budget. Prepared By: Sunny Wang, Principal Civil Engineer Approved Forwarded to Council Attachments: A. January 25, 2011 Staff Report (Web Link) B. September 12, 2017 Staff Report (Web Link) C. November 27, 2018 Staff Report - Sustainable Water Master Plan Update and Pathway to Water Self Sufficiency (Item 8.C) D. Resolution - PW - Water Resources - Desalination Grants - 12182018 1 City Council Meeting: December 18, 2018 Santa Monica, California RESOLUTION NUMBER (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND ENTER INTO CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES WATER DESALINATION GRANT PROGRAM AGREEMENTS FOR THE SANTA MONICA SUSTAINABLE WATER INFRASTRUCTURE PROJECT AND CLOSED CIRCUIT REVERSE OSMOSIS PROJECT WHEREAS, on January 25, 2011, the City Council directed staff to develop a plan to achieve 100% self-sufficiency on local water sources; and WHEREAS, the City recognizes that a sustainable and secure water future must include the coordinated and conjunctive reuse of all locally available water resources including traditionally non-potable sources such as brackish groundwater and wastewater; and WHEREAS, pursuant and subject to all of the terms and provisions of the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Proposition 1, California Water Code Section 79700 et seq.), the California Department of Water Resources is sponsoring Round 4 funding of the Water Desalination Grant Program; and WHEREAS, such grants provide much needed funding to carry out activities, such as construction of desalination projects that help meet the water resources needs of the state. 2 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The City Council of the City of Santa Monica hereby authorizes the City Manager or his or her designee, on behalf of the City of Santa Monica, to sign and file an application for funding from the Department of Water Resources for an amount not to exceed $2,800,000 for the Sustainable Water Infrastructure Project, and for an amount not to exceed $10,000,000 for the Closed Circuit Reverse Osmosis Project, under the terms and provisions of the Water Desalination Grant Program . SECTION 2. The City of Santa Monica hereby agrees and further does authorize the aforementioned representative or his or her designee to certify that the City of Santa Monica has and will comply with all applicable state and federal statutory and regulatory requirements related to any federal and state funds received. SECTION 3. The City Manager or his or her designee is hereby authorized to negotiate and execute a funding agreement and any amendments or change orders thereto, and to certify funding disbursement on behalf of the City of Santa Monica. SECTION 4. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: _________________________ LANE DILG City Attorney REFERENCE: Resolution No. 11156 (CCS)