For City Council and Rialto Utility Authority Meeting [September 14, 2021]
TO: Honorable Mayor and City Council
APPROVAL: Marcus Fuller, City Manager
FROM: Thomas J. Crowley, P.E., Utilities Manager
Title
Request City Council/Rialto Utility Authority Board to Approve the Water Replacement Order Agreement Extending the Agreement Between the City of Rialto and San Bernardino County for an Additional Two Years, Authorizing County to Continue Utilizing Up to 1,600 Acre-Feet of Water of the City of Rialto’s Water Rights, and Authorizing the City Manager to Execute the Agreement and any Related Documents.
(ACTION)
Body
BACKGROUND
The City of Rialto, (Rialto) and the County of San Bernardino (County) previously entered into an agreement, dated May 20, 2000, wherein the County agreed to pay Rialto in consideration for the grant of water rights by Rialto to Fontana Union Water Company (FUWC) to pump 1,600 acre-feet of water in the Rialto/Colton Groundwater Basin. This action was necessary for the County to comply with Order No. 99-86 Revising Clean-up and Abatement Order No. 98-96 issued by the Regional Water Quality Control Board, Santa Ana Region (“Regional Board Order”). Rialto then entered into a Standby Water Lease with FUWC for the lease of 1,600 acre-feet of water in the Rialto/Colton Groundwater Basin dated May 9, 2000.
The agreement between Rialto and the County expired on May 20, 2020, and the County is requesting a two-year extension of the agreement to be terminated on December 31, 2022. The purpose of this extension is to allow the County to continue utilizing up to 1,600 acre-feet of water for compliance with the Regional Board Order for the current water year, commencing October 1, 2020, through September 30, 2021, and the subsequent water year, commencing October 1, 2021, through September 30, 2022, and to reimburse Rialto for such use of the water as set forth in the agreement. The proposed extension would provide the County with enough time to engage in good faith discussions with FUWC and the Regional Board regarding whether the 1,600 acre-feet per year is still necessary to be pumped.
In February of 2019, the Standby Water Lease Agreement between Rialto and FUWC was extended for another 20-year period. Rialto and FUWC agreed to jointly pursue the County to pay a Consumer Price Index (CPI) adjustment to the rates that were identified in the original agreement between the Rialto and the County. If for some reason, Rialto and FUWC were to be unable to get the County to agree to paying the CPI adjustment amount, FUWC agreed to pay the difference. It should be noted, the adjustments were based upon the accumulative CPI from the beginning of the agreements.
ANALYSIS/DISCUSSION
Starting on October 1, 2020, the increased amount would be $13.08 per acre foot on top of $40 per acre-foot ($53.08 per acre-foot for 1,600 acre-feet) charge for making the water available for that water year. For the actual water used, the adjustment would be $32.70 per acre-foot on top of the $100.00 per acre-foot ($132.70 per acre-foot) charge for water used in that water year.
As consideration for the approving the extension for the agreement with the County, they shall make payment to Rialto in the amount of $53.08 per acre-foot charged for making water rights available ($84,928) and an additional payment of $132.70 per acre-foot for each acre-foot of water drawn from or produced pursuant to such standby water rights (up to $212,320) for a total of $297,248 for the 2020/2021 Water Year. For the 2021/2022 Water Year, the County shall make payment to Rialto the amount of $53.87 per acre-foot charged for making water rights available ($86,192) and an additional payment of $134.69 per acre-foot for each acre-foot of water drawn from or produced pursuant to such standby water rights (up to $215,504) for a total of $301,696. For water year 2020/21, FUWC has already pumped the 1,600 acre-feet. This extension will allow for the County to pay Rialto for the use of the water by FUWC.
The County will inform Rialto in writing within 30 days of the start of the water year that the County intends to utilize the standby water rights for water year 2021/22. For both water years, the County will pay the respective amount per acre foot charge for making water rights available regardless of whether it utilizes the 1,600 acre-feet of standby water rights. The County shall make the required payments within sixty (60) days of receipt of an invoice from Rialto indicating the amount of water produced pursuant to the standby water rights.
Staff presented the agreement to the Water Subcommittee on August 12, 2021. It was then brought to the Utilities Commission on August 17, 2021, who recommended the agreement be presented to the City Council/Rialto Utility Authority Board of Directors for approval. A copy of the agreement is included as Attachment 1.
ENVIRONMENTAL IMPACT
This request is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
The proposed action is consistent with Guiding Principle 3 in the General Plan:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
Approval of the proposed action also complies with the following City of Rialto Goals and Policies:
Goal 2-28: Protect and enhance Rialto’s surface waters and groundwater basins.
Policy 2-28.1: Work with local water agencies and the State and Federal governments to clean up and mitigate perchlorate contamination within the basin.
Policy 2-28.5: Apply methodologies and assign responsibility to protect the quality of groundwater from pollution by landfills and industrial uses.
LEGAL REVIEW
The City Attorney has reviewed and supports the staff report.
FINANCIAL IMPACT:
Operating Budget Impact
For Water Year 2020/21, Rialto will receive $297,248 ($84,928 for making the 1,600 acre-feet available and up to $212,320 for the use of 1,600 acre-feet). For Water Year 2021/22, Rialto will receive $301,696 ($86,192 for making the 1,600 acre-feet available and up to $215,504 for the use of 1,600 acre-feet). These funds will be deposited into Water Fund Account No. 670-400-7960-7667 for the Municipal Water Sales.
Capital Improvement Budget Impact
The Capital Improvement Budget will not be impacted by the proposed action.
Licensing
A business license application and Business License tax is not required with the proposed action.
RECOMMENDATION
Staff recommends that the City Council/Rialto Utility Authority Board:
• Approve the Water Replacement Order Agreement extending the agreement between the City of Rialto and San Bernardino County for an additional two years,
• Authorize San Bernardino County to continue utilizing up to 1,600 acre-feet of water of the City of Rialto’s water rights, and
• Authorize the City Manager to execute the agreement and any related documents.