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MONTEREY REGIONAL WATER

POLLUTION CONTROL AGENCY

* * * AGENDA TRANSMITTAL FORM * * *

MEETING DATE: OCTOBER 26, 2015

AGENDA ITEM: 7 – C

AGENDA TITLE: CONSIDER APPROVING AN AGREEMENT BETWEEN

MRWPCA AND CITY OF SALINAS FOR CONVEYANCE

AND TREATMENT OF AGRICULTURAL PRODUCE WASH

WATER

Consent ( ) Action ( X ) Informational ( )

CONTACT: MIKE MCCULLOUGH, GOV. AFFAIRS

Phone: 372-3367

DEPARTMENT SUMMARY AND REQUESTED BOARD ACTION: The City of Salinas and the MRWPCA have been working together over the past two years to utilize the agricultural wash water for maximum beneficial use. In 2014, approximately 750 Million Gallons of agricultural wash water was recycled. It is anticipated that the same amount will be recycled in 2015. The City and PCA have collaborated on several agreements recently. They include: 1) a solar agreement for energy use at the Salinas Pump Station, and 2) an agricultural wash water utilization agreement, and 3) a cost sharing agreement for the construction of the permanent agricultural wash water diversion facility, and 4) the design of storm water diversion structures for the collection and conveyance of storm water from the Southwest portion of the City. CURRENT STATE: The agreement will accomplish the following: 1) The PCA will take over the operation and maintenance of the industrial waste water facilities and pay the City a $300,000 lease starting in 2017 (with escalator), and 2) The City and the PCA will continue to negotiate terms of the operation and maintenance regarding the terms and improvements to be made at the facilities, and 3) Allow PCA to continue to move forward with the SRF loan application. The agreement also provides a water source for the Pure Water Monterey project. The agreement would extend the rights to the agricultural wash water for 30 years with automatic extension provisions. This agreement is one of many agreements that need approval by the PCA Board to continue the momentum of the Pure Water Monterey project.

FINANCIAL IMPACT: ( X ) Yes ( ) No

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MONTEREY REGIONAL WATER

POLLUTION CONTROL AGENCY

* * * AGENDA TRANSMITTAL FORM * * *

FUNDING SOURCE: N/A

BUDGET RECAP: Total Estimated Cost: N/A

Amt Expended to Date: N/A

Amt Budgeted FY 15/16: N/A

New Funding Required: $0

New Revenue: $0

Revenue Impact: $0

New Personnel? NO

Change in Board Policy? NO

PRIOR BOARD

ACTIONS: None

ALTERNATIVES: N/A

COMMITTEE REVIEW

AND ACTION: N/A

MANAGER

RECOMMENDATION: Recommend approval.

ATTACHMENTS: 1. Draft Agreement for Conveyance and Treatment of

Agricultural Produce Wash Water by and between the City

of Salinas and the Monterey Regional Water Pollution

Control Agency

RECOMMENDED

MOTION: That the Board approve the agreement between the City of

Salinas and MRWPCA for the Conveyance and Treatment of

Agricultural Produce Wash Water.

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AGREEMENT FOR CONVEYANCE AND TREATMENT

OF AGRICULTURAL PRODUCE WASH WATER

BY AND BETWEEN THE CITY OF SALINAS AND

THE MONTEREY REGIONAL WATER POLLUTION CONTROL AGENCY

THIS AGREEMENT is made and entered into on October 27, 2015, by and between the City

of Salinas, a California charter city and municipal corporation (hereinafter referred to as the

“City”), and the Monterey Regional Water Pollution Control Agency, a California joint powers

agency (hereinafter referred to as the “MRWPCA”), sometimes collectively referred to herein as

the “Parties” and individually as “Party,” as follows:

Recitals

A. The City owns and operates an Industrial Wastewater Collection and Conveyance System

(the “IWCCS”) that receives industrial wastewater from approximately 25 agricultural

processing and related businesses operating in the southeast corner of the City, and transports

that water to the City’s Industrial Wastewater Treatment Facility (the “IWTF”) located at South

Davis Road in the City and has the rights and access to and receives for treatment (by aeration)

and disposal (by evaporation and percolation) approximately 4,000 acre feet/year of agricultural

wash water.

B. The MRWPCA has an existing need for source water for 1) to serve its Pure Water

Monterey Groundwater Replenishment Project (the “GWR Project”) and 2) to augment the

existing Castroville Seawater Intrusion Project’s (“CSIP”) crop irrigation supply.

C. In July 2014 the Parties hereto, along with the Monterey County Water Resources

Agency (the “MCWRA”), entered into a short-term Produce Wash Water Utilization Agreement

(the “Utilization Agreement”), whereby agricultural wash water from the IWTF was diverted,

by means of a by-pass shunt to the MRWPCA’s Regional Treatment Plant (the “RTP”), for

treatment to provide additional water for treatment to the MRWPCA/MCWRA Salinas Valley

Reclamation Project, to then be delivered as recycled water to the CSIP service area. That

Utilization Agreement has been extended by the parties thereto for additional periods as deemed

necessary, and it is anticipated by the Parties that it will be extended into 2017.

D. In 2015 the City and the MRWPCA entered into a further agreement, set forth and

memorialized in mutual resolutions and minute actions of the governing bodies of each Party, to

share the costs of design and construction of the permanent diversion facilities necessary to

permit the redirection of the agricultural wash water from the IWTF to the municipal

wastewater system for conveyance to the RTP. The permanent diversion facilities are as

depicted and described in Attachment A, consisting of two pages, attached hereto and

incorporated herein by this reference.

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E. The purpose and intent of this Agreement, therefore, is for the Parties to set forth the

terms and conditions by which they will continue the transfer, conveyance, treatment and use of

the agricultural wash water, utilizing the permanent diversion facilities, to the mutual benefit of

the Parties and the communities served by the GWR Project and the CSIP.

F. This Agreement implements the Pure Water Monterey Groundwater Replenishment

Project (“GWR”) that the MRWPCA Board approved on October 8, 2015. The MRWPCA

Board certified the Environmental Impact Report (“EIR”) for the GWR Project as complete and

in compliance with the California Environmental Quality Act (“CEQA”), and adopted the

findings required by CEQA on October 8, 2015 . This Agreement does not change the GWR

Project and no change of circumstances or new information shows the GWR Project would

result in new or substantially more severe environmental impacts such that major revisions to

the certified EIR would be required. This Agreement is approved based on the EIR as certified.

Terms and Conditions

In consideration of the foregoing recitals, and the mutual promises, conditions and

covenants made herein, the Parties agree to the following terms and conditions:

1. Source and Conveyance of Produce Water.

a. The City currently operates and maintains an agricultural wash water, collection,

conveyance and treatment system, the IWCCS, described in Recital A, above.

For the term and any extended term of this Agreement, City agrees to continue

to operate that system, or contract for operation of the system in a manner

consistent with this agreement and, agrees unless otherwise directed by

MRWPCA, to convey all wash water collected in IWCCS to the permanent

diversion facilities described in Recital D, to MRWPCA via its Salinas pump

station and other facilities to the RTP for treatment and distribution for the

uses described in Recital B, above.

b. For the term of this Agreement, City will provide MRWPCA access and rights to

the agricultural wash water for a period of time (30 years per the length of the

SRF loan) in order for the MRWPCA to use the agricultural wash water in a

manner that is beneficial and consistent with the uses described in Recital B,

above consistent with to the recitals and the terms and conditions listed in this

Section.

c. For purposes of this Agreement, the point of transfer of agricultural wash water

described hereinabove from the City to the MRWPCA is the permanent shunt

jointly installed by the Parties located ahead of the IWTF, as depicted in

Attachment A. The volume of flows from the City to the MRWPCA will be

determined by the MRWPCA at the point of transfer by a flow meter installed

in the shunt.

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d. As of the date of execution of this Agreement, City confirms that it is aware

that approximately 25 wash water producers deliver wash water to the City’s

agricultural wash water system described hereinabove, the IWCCS, with those

producers and amounts they delivered in the years noted and listed in

Attachment B, consisting of two pages, attached hereto and incorporated

herein by this reference. All wash water from all producers listed in

Attachment B, and all wash water from producers added to the agricultural

wash water system subsequent to the execution of this Agreement, shall be

directed and conveyed as provided by this Section 1.

e. City agrees to cooperate with MRWPCA’s Source Control division to ensure

that all water quality characteristics, described herein below are complied with.

Non-compliant water quality may be caused by the processors and the City

and/or MRWPCA will respond in a timely and responsible manner. Disruption

of service caused by but not limited to, acts of God, acts of war, or criminal

acts of others, water shortages, fires, floods, earthquakes, epidemics,

quarantine restrictions, strikes, or failure or breakdown of transmission or other

facilities may result in damages. The harm caused by these events may delay or

suspend delivery of the agricultural wash water until such time a reasonable

effort is made to restore the water quality into acceptable parameters. If the

water quality is not responding to corrective action, then the flows may be

diverted to the IWTF until the situation is corrected. Neither City nor

MRWPCA shall incur any liability for delays of deliveries from the processing

facilities.

Lease for Operation and Maintenance of IWTF

f. Upon execution of this Agreement, the parties will negotiate and endeavor in

good faith to enter into an agreement whereby MRWPCA would assume

responsibility for the operation and maintenance of the IWTF ponds starting in

2017. The annual lease payment shall be $300,000 a year, payable as

negotiated, with an escalation factor to be negotiated as well.

g. The parties shall negotiate terms regarding the City’s obligation to repair,

maintain, reimburse or contract out in order to uphold their responsibility as the

lessor of the Industrial Waste Treatment Facility Ponds to MRWPCA the

lessee. These items include but are not limited to recommended rate of

treatment which would include capital and reserve allocations, infrastructure

improvements, water quality parameters, electricity, roads, costs associated

with removal of sludge, etc.

h. As conditions of the lease agreement, the parties shall negotiate the level of

MRWPCA’s commitment to provide infrastructure improvements to the IWTF

during the term of this lease to include MRWPCA consulting with the City

regarding improvements required for the ponds to remain a productive and

efficient means for treating, storing and reusing agricultural wash water and

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storm water. MRWPCA reserves the right to determine the best method for

which the infrastructure improvements are allocated. MRWPCA may employ a

variety of options in order to meet the required infrastructure improvement

figure. Options for securing the resources necessary to improve the pond

infrastructure may include but are not limited to low interest loans, grants,

public/private partnerships, in-kind labor by MRWPCA or other partner

agencies.

2. Payment for Treatment.

a. City agrees to pay to MRWPCA all costs of treatment of the agricultural wash

water conveyed to MRPWCA and measured by meter pursuant to Section 1

above. As determined by a rate study prepared by MRWPCA and agreed to by

City, the initial rate for treatment is currently $179.00/acre foot. If and as costs

of treatment change, either as provided in the rate study or by other means,

MRWPCA shall, by written notice given no later than 45 days prior to a rate

change, notify City of such rate change, to include an explanation and

accounting of the costs requiring the change. City shall, upon the effective date

of a rate change, pay for costs at the new rate. MRWPCA shall make no more

than one rate change in any twelve-month period, unless otherwise provided in

the rate study. MRWPCA invoices for treatment costs shall be rendered

monthly and paid by City within 45 days of receipt.

b. If City contests an invoice submitted under this Section, it shall give

MRWPCA notice of the dispute at least 10 days prior to the day payment is

due. To the extent MRWPCA finds City’s contentions correct, it shall revise

the statement accordingly and City shall make payment of the revised amount

within 45 days of notice of the revised amount. If MRWPCA rejects City’s

contentions or where time is not available for review of the contentions prior to

the due date, City shall make payment of the invoiced amount on or before the

due date and make the contested part of such payment under protest and seek

to recover the amount thereof from MRWPCA.

c. Upon the improvements to the IWTF system, agricultural wash water or storm

water that is stored at the IWTF site and returned to the Salinas Pump Station for

the treatment and reuse at the Regional Treatment Plant (RTP), it is anticipated

that the intended user of the water will pay for the cost of conveyance and

treatment of water. The rates for treating this stored water will be in accordance to

the Interruptible Rate table as calculated by the MRWPCA.

3. Source Control Monitoring. Source control monitoring of the City’s agricultural wash

water processing facilities by MRWPCA shall continue pursuant to existing agreements

between City and MRWPCA.

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4. Non-Compliant Discharge. City shall notify the MRWPCA immediately when the

City becomes aware of any non-compliant discharge from any of the producers.

MRWPCA may reject non-compliant discharge and shall direct such rejected discharge

to the IWTF. Non-compliant wash water means water delivered pursuant to Section

1above, that does not meet applicable legal standards or standards agreed to by the

Parties by separate agreement, and that therefore is not suitable for delivery to

MRWPCA. Attached hereto as Attachment C, and incorporated herein by this

reference, is the Interruptible Rate Schedule, including Parties’ agreed upon handling of

non-compliant wash water; in case of conflict between Attachment C and this

Agreement, provisions of this Agreement shall apply.

5. Interruption of Service. MRWPCA may close the permanent diversion facility to

allow the agricultural wash water to flow to the City’s IWTF. MRWPCA will notify

the appropriate City personnel within 24 hours regarding the reasons for diversion.

Interruption of service shall be according to the Interruptible Rate schedule set out in

Attachment C, attached hereto and incorporated herein by this reference. Other

reasons for diversion may include but are not limited to the flooding of the Salinas

River, high flows at the pump station, agricultural wash water is not needed at the

regional treatment plant, a spill or some type of toxic compound is in the wastewater,

etc.

6. Term. The effective date of this Agreement is January 1, 2016. Unless earlier

terminated or extended in writing by mutual agreement of the Parties, this Agreement

shall remain in effect for a period of thirty (30) years from the effective date hereof.

This Agreement shall be automatically extended for two successive five year terms

after the initial thirty (30) year term unless either Party gives written notice of

termination no later than two years before the end of the initial term or later term as

extended per this Section.

7. Disputes.

a. If any dispute under this Agreement arises, the Parties shall first meet and

confer in an attempt to resolve the matter between themselves. Each Party shall

make all reasonable efforts to provide to the other Party all the information in

its possession that is relevant to the dispute, so that both Parties have ample

information with which to reach a decision.

b. In the event a dispute involving the enforcement or interpretation of this

Agreement is not resolved by the meet and confer process described in

subsection a. of this Section, it must be submitted to non-binding mediation

before suit is filed. Upon request by either Party, the Parties will within ten

(10) days of submission to such arbitration, select a single mediator to mediate

the dispute. If the Parties are unable to agree on a mediator within ten (10) days

of the request to select, then either Party may ask the then presiding judge of

the Monterey County Superior Court to select a mediator. If a dispute is not

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resolved within 45 days of selection, however selected, either Party may file

suit specifically to enforce or interpret this Agreement and to seek any

damages to which the Party may be entitled.

8. Insurance/Self-Insurance. Each Party is either insured or self-insured as to any

requirements under this Agreement. No policies or bonds are required of either Party as

to any provisions of this Agreement. The Parties are aware of and shall comply with the

requirements of Section 3700 of the California Labor Code at their own cost and

expense and, further, neither Party nor its insurer shall be entitled to recover from the

other any costs, settlements, or expenses of Workers’ Compensation claims arising out

of this agreement.

9. Indemnification and Hold Harmless. Each Party hereto agrees that it shall indemnify,

defend, and hold harmless the other Party, including Party’s officers, agents and

employees, from and against any and all claims, liabilities, and losses whatsoever

occurring or resulting to any person, firm, corporation, or other entity for foreseeable

consequential damage, property damage, injury, or death arising out of or connected a

Party’s negligence or non-performance of its obligations under this Agreement. The

provisions of this Section 7 shall survive the expiration of the term or termination of

this Agreement.

10. Miscellaneous.

a. Each Party represents that it has read all terms set out herein and each fully

understands and accepts all terms of this Agreement.

b. The Parties acknowledge that each has reviewed this Agreement and that the usual

rule of construction that ambiguities are to be resolved against the drafting party

shall not be employed in the interpretation of this Agreement

c. This Agreement sets for the entire understanding of the Parties with respect to the

subject matter hereof. Neither Party has made any statement or inducement for the

other to enter into this Agreement, except as expressly set forth herein or

incorporated herein by reference. The Parties agree that this Agreement shall not be

altered, amended, modified, or otherwise changed except in writing by mutual

consent of the Parties.

d. This Agreement shall be governed by the laws of the State of California. Venue for

any legal action relating to this Agreement is Monterey County.

e. If any part of this Agreement is for any reason ruled unenforceable by a court of

competent jurisdiction, the remainder shall remain in full force and effect unless the

unenforceable part is a material consideration to a Party.

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f. In the event of any claim, controversy or dispute that results in litigation or binding

arbitration, the prevailing Party shall be entitled to recover from the losing party

reasonable expenses, attorney fees, and costs.

g. All parties shall cooperate fully to execute any and all documents, and to take any

actions necessary and appropriate to give full force and effect to this Agreement,

and which are not inconsistent with its terms.

h. The individuals whose signatures appear herein below represent, warrant and

guarantee that they have the authority to execute this Agreement on behalf of the

Party on whose behalf they purport to sign and execute.

i. It is expressly understood that this Agreement is intended by the Parties to be

between two independent contractors and that no agency, employment, partnership,

joint venture, or other relationship is established by this Agreement.

j. The Parties agree that neither Party shall be considered or deemed to have waived,

released, or altered in any manner any or all rights which it would otherwise have

pursuant to law with regard to any other matter not dealt with or affected by this

Agreement.

11. Counterparts. This Agreement may be executed in two counterparts, each of which

shall be deemed an original, but each of which shall be deemed to constitute one and

same document.

12. Notices. All notices or other writings in this Agreement provided to be given or made

or sent, or which may be given or made or sent, by one Party hereto or another, shall be

deemed to have been fully given or made or sent with made in writing and deposited in

the United States mail, registered, certified or first class, postage paid, and addressed as

follows:

To MRWPCA: General Manager

Monterey Regional Water Pollution Control Agency

5 Harris Court, Building D

Monterey, CA 93940

To City of Salinas: City Manager

City of Salinas City Hall

200 Lincoln Ave.

Salinas, CA 93901

With a copy provided to the City Attorney.

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The address to which any notice or other writing may be given or made or sent to either

Party may be changed upon written notice given by such Party as provided above.

IN WITNESS WHEREOF, the Monterey Regional Water Pollution Control Agency and

the City of Salinas have entered into this Agreement as of the date first written above.

MONTEREY REGIONAL WATER POLLUTION CONTROL AGENCY

By_____________________________

Its_____________________________

Approved as to Form:_____________________________

CITY OF SALINAS

By___________________________

Its___________________________

Approved as to Form:_______________________________

Christopher Callihan, City Attorney