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2008/09/23 City Council Resolution 2008-152RESOLUTION NO. 2008-152 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK AUTHORIZING AND APPROVING THE FIFTH AMENDMENT TO THE AGREEMENT FOR USE OF THE SANTA ROSA SUBREGIONAL SEWERAGE SYSTEM WHEREAS, on April 3, 1975, Santa Rosa and User Agencies executed an Agreement Between City of Santa Rosa and City of Rohnert Park, City of Sebastopol, and South Park County Sanitation District for Use of Santa Rosa Subregional Sewerage System ( "Master Agreement "); WHEREAS, on September 1, 1987, Santa Rosa and User Agencies executed the First Amendment to the Master Agreement regarding the allocation of increased capacity in the treatment plant; WHEREAS, on October 20, 1987, Santa Rosa and User Agencies executed the Second Amendment to the Master Agreement to provide for construction and implementation of advanced wastewater treatment and related improvements to the operation of the Subregional System; WHEREAS, on December 1, 1994, Santa Rosa and User Agencies executed the Third Agreement to the Master Agreement regarding the segregation of capacity between the City of Rohnert Park and the City of Cotati, and designating the City of Cotati as a member of User Agencies; WHEREAS, on September-25, 2001, Santa Rosa and the City of Rohnert Park executed the Agreement for Interim Transfer of Capacity, and on June 10, 2003, Santa Rosa and the City of Rohnert Park executed Amendment No. I to the Agreement for Interim Transfer of Capacity (hereinafter collectively called "Interim Transfer Agreement "). The Interim Transfer Agreement allocated 1.03 million gallons per day (mgd) capacity from Santa Rosa to the City of Rohnert Park until the Subregional System was increased such that the City of Rohnert Park's capacity was increased by 1.03 mgd or more. The proposed Fifth Amendment increases the City of Rohnert Park's capacity by 0.74 mgd, which is less than 1.03 mgd, and Interim Transfer Agreement therefore remains in effect; WHEREAS, on July 1, 2002, Santa Rosa and User Agencies executed the Fourth Amendment to the Master Agreement to allocate 3.34 mgd additional capacity (from 18 to 21.34 mgd) and associated debt service among Santa Rosa and User Agencies; WHEREAS, the Subregional System is developing Incremental Recycled Water Program projects to expand treatment and disposal capacity to 25.86 mgd for Santa Rosa and Rohnert Park; and WHEREAS, the purpose of the Fifth Amendment is to: 1) revise the cost allocation methodology to account for: a) Santa Rosa's, South Park County Sanitation District's and the City of Rohnert Park's expected need for additional capacity at different times, and b) the effect of wet weather flows on capital cost of projects by allocating the cost of treatment and disposal projects driven by wet weather flow based on the wet weather flow contribution of each benefiting agency and by allocating the cost of projects driven by dry weather flow based on the dry weather flow contribution of each benefiting agency; 2) allocate the cost and additional capacity of the GEP; and 3) agree to fund additional projects necessary to expand treatment and reuse capacity to 25.86 mgd. NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of Rohnert Park that the Fifth Amendment to the Agreement for Use of Santa Rosa Subregional Sewerage System is hereby approved and the Mayor is authorized to execute the amendment. DULY AND REGULARLY ADOPTED by the City Council of the City of Rohnert Park this 23rd day of September, 2008. CITY OF ROHNERT PARK �j 4� Mayor BREEZE: AYE SMITH: AYE STAFFORD: ABSENT VIDAK- MARTINEZ: AYE MACKENZIE: AYE AYES: (4) NOES: (0) ABSENT: (1) ABSTAIN: (0) FIFTHAmENDMENT TO THE AGREEMENT FOR USE OF SANTA ROSA SUBREGIONAL SEWERAGE SYSTEM This agreement, dated 2008, is between the. City of Santa Rosa ( "Santa Rosa "), the City of Rohnert Park, City of Sebastopol, City of Cotati and the South Park County Sanitation District ( "User Agencies "). RECITALS A. On April 3, 1975, Santa Rosa and User Agencies executed an Agreement Between City of Santa Rosa and City of Rohnert Park, City of Sebastopol, and South Park County Sanitation District for Use of Santa Rosa Subregional Sewerage System ( "Master Agreement ".). B. Santa Rosa and South Park Sanitation District ( "District ") have previously executed agreements dated April 20, 1982 and February 15, 1983, reallocating capacity from District to Santa Rosa because of annexations and extension of sewer service to properties with failing septic systems lying outside of Santa Rosa's boundaries. C. Santa Rosa and District have previously executed 1) agreements dated June 21, 1982 and September 17, 1985,. providing that District shall allocate plant capacity to Santa Rosa; and 2) agreements dated June 23, 1983, June 24, 1983, November 6, 1985,. September I' 1987, April 18, 1989, June 6, 1994, and August 1, 1995, each of which provided that District shall allocate capacity arising out of the plant expansion to Santa Rosa in consideration for Santa Rosa's agreement to provide.sewer service to certain areas outside City limits but within City urban area that were designated as a hazard to public health by the County of Sonoma Department of Health Services. D. On September 1, 1987, Santa Rosa and User Agencies executed the First Amendment to the Master Agreement regarding the allocation of increased capacity in the treatment plant. E. On October 20, 1987, Santa Rosa and User Agencies executed the Second Amendment to the Master Agreement to provide for construction and implementation of advanced wastewater treatment and related improvements to the operation of the Subregional System. F. On December 1, 1994, Santa Rosa and User Agencies executed the Third Agreement to the Master Agreement regarding the segregation of capacity between the City of Rohnert Park and the City of Cotati, and designating the City of Cotati as a member of User Agencies. G. On September 25, 2001, Santa .Rosa and the City of Rohnert Park executed the Agreement For Interim Transfer of Capacity, and on June 10, 2003, Santa Rosa and the City of Rohnert Park executed Amendment No. 1 to the Agreement For Interim Transfer of Capacity (hereinafter collectively called "Interim Transfer Agreement "). The Interim Transfer Agreement allocated 1.03 million gallons per day (mgd) capacity from Santa Rosa to the City of Rohnert Park until the Agreement for Use of Santa Rosa Subregional Sewerage System is amended to increase the City of Rohnert Park's capacity by 1.03 mgd or more. This Fifth Amendment increases the City of Rohnert Park's capacity by 0.74 mgd (see Table 2), which is less than 1.03 mgd, and Interim Transfer Agreement therefore remains in effect. H. On July 1, 2002, Santa Rosa and User Agencies executed the Fourth Amendment to the Master Agreement to 1) allocate 3.34 mgd additional capacity (from 18 to 21.34 mgd) and associated debt service among Santa, Rosa and User Agencies; 2) acknowledge transfer of capacity from South Park County Sanitation District (District) to Santa Rosa as a result of the Roseland Annexation and in anticipation of consolidating District into Santa Rosa's assets; and 3) acknowledge the terms and conditions of the Agreement for the Dissolution of the South Park Sanitation District and the Transfer of Ownership to the City of Santa Rosa which relate to the Master Agreement including dissolution of the District no later than June 30, 2011 and Santa Rosa's assumption of ownership of District's assets and liabilities. I. As provided for in Section 17D of the Master Agreement, the Subregional System is developing Incremental Recycled Water Program projects to expand treatment and disposal capacity to 25.86 mgd for Santa Rosa and the City of Rohnert Park. For purposes of this Agreement, disposal capacity is the sum of discharge capacity and reuse capacity. J. The 4.52-mgd increase from 21.34 to 25:86 mgd is allocated in the 2004 Incremental Recycled Water Program Master Plan to Santa Rosa (2.64 mgd), the City of Rohnert Park (1_.72 mgd) and South Park County Sanitation District (0.16 mgd). A small portion of the City of Rohnert Park's capacity increase (0.07 mgd) was included to accommodate planned' expansion of Sonoma State University. The City of Rohnert Park has requested that Sonoma State University's 0.07 -mgd portion of the City of Rohnert Park's incremental capacity of 1.72 mgd not be included in the City of Rohnert Park's capacity right expansion addressed in this amendment to the Agreement. Therefore, this amendment expands the City of Rohnert Park's capacity right by 1.65 mgd. K. The 2004 Incremental Recycled Water Program Master Plan (and as amended through 2007) specifies that discharge shall remain at or below the level that would have occurred at 21.34 mgd (4,500 million gallons per year (MGY) in the wettest year on record) and the volume of water associated with growth from 21.34 mgd to 25.86 mgd (2,200 MGY) by Santa Rosa and the City of Rohnert Park shall be reused and not discharged. Subsequent studies indicate that the 4,500 -MGY discharge would likely need to be relocated from the Laguna de Santa Rosa to the Russian River at great cost due to environmental regulations. L. The Second Amendment to Construction and Operating Agreement Santa Rosa Geysers Recharge Project ( "Second Amendment to Geysers Agreement ") became effective on August 14, 2007. The Second Amendment to the Geysers Agreement 2 implements the Geysers Expansion Project ( "GEP ") and increases recycled water delivery to the Geysers Power Company by 3,209 MGY. M. In recognition of the desire to avoid relocating the discharge, the Second Amendment to Geysers Agreement specifies delivery of water to the steamfield such that discharge is reduced by 2,259 MGY, and the 950 -MGY balance (3,209 MGY — 2,259 MGY) is allocated to offset the 2,200 MGY growth by Santa Rosa and the City of Rohnert Park. The balance of the 2,200 -MGY growth for which reuse projects need to be identified is 1,250 MGY (2,200 MGY — 950 MGY). N. The GEP increases disposal capacity of the Subregional System from 21.34 to 23.28 mgd (an increase of 1.94 mgd), which is calculated as follows: 23.28 mgd = 21.34 mgd + (25.86 mgd — 21.34 mgd) x 950 MGY /2,200 MGY Where 2,200 MGY is the annual quantity of water represented by the increase in flow from 21.34 to 25.86 mgd adwf and 950 MGY is the portion of the 2,200 MGY that the GEP would provide, as described in paragraph M above. O. The purpose of this amendment is to 1) revise the cost allocation methodology to account for a) Santa Rosa's, South Park County Sanitation District's . and the City of Rohnert Park's expected need for additional capacity at different times and b) the effect of wet weather flows on capital cost of projects by allocating the cost of treatment and disposal projects driven by wet weather flow based on the wet weather flow contribution of each benefiting agency and by allocating the cost of projects driven by dry weather flow based on the dry weather flow contribution of each benefiting agency; 2) allocate ' the cost and additional capacity of the GEP; and 3) agree to fund additional projects necessary to expand treatment and reuses capacity to 25.79 mgd adwf. . AGREEMENT 1. Santa Rosa and User Agencies agree that the increased capacity from 21.34 to 25.79 mgd and capacity right shall be allocated as it is developed as described in Table 1. ' This `refers only to reuse projects and not discharge projects because discharge projects are capacity maintenance projects under the IRWP Master Plan and therefore authorized in the MasterAgreement. Table 1. Capacity Right Allocation Entity Share of 21.34 mgd I Share of 4.45 mgd Ex ansion Share of 25.79 mgd mgd Percent mgd I Percent mgd Percent Santa Rosa 15.61 73.15 2.64 59.33 18.25 70.76 SPCSD 0.70 3.28 0.16- 3.60 0.86 3.33 Rohnert Park 3.43 16.07 1.65 37.07 5.08 19.70 Sebastopol 0.84 3.94 0 0 0.84 3.26 Cotati 0.76 3.56 0 0 0.76 2.95 Total 21.34 100.00 4.45 100.00 25.86 100.00 2. Disposal capacity is increased. by 1.94 mgd resulting from the GEP, and this additional disposal capacity is allocated in Table 2. according to the values in the "Share of 4.45 mgd. expansion, percent" column from Table 1. Table 2. Share of Added Disposal Capacitya Entity Share of 21.34 mgd Share of Disposal Share of Current Ca aci i Expansion Disposal Capacity' mgd Percent mgd Percent mgd Percent Santa Rosa 15.61 73.15 1.15 59.33 16.76 71.99 SPCSD 0.70 3.28 0.07 3.60 0.77 3.31 Rohnert Park 3.43 16.07 0.72 37.07 4.15 17.83 Sebastopol 0.84 3.94 0 0 0.84 3.61 Cotati 0.76 3.56 0 0. 0.76 .3.26 Total' 21.34 100.00 1.94 100.00 23.28 100.00. a Current disposal system capacity is 21.34 + 1.94 mgd or 23.28 mgd. Table 2 shall be updated by Santa Rosa as disposal capacity is increased .pursuant to the Agreement. The values in the "Share of Current Disposal Capacity, percent" column shall be used to determine debt service for projects intended to maintain current reuse capacity. This addresses.reuse projects only and not discharge projects because discharge projects are capacity maintenance projects under the IRWP Master Plan and therefore authorized in the Master Agreement. 3. Santa Rosa and User Agencies agree that debt service for projects intended to maintain existing reuse capacity shall be allocated according to the "Share of Current Disposal Capacity, percent" column in Table 2. Santa Rosa shall update Table 2 as disposal capacity is added and the updated table shall be used to determine debt service for projects intended to maintain existing reuse capacity. Santa Rosa shall inform User Agencies of any and all Table 2 updates. 4. Santa Rosa and User Agencies agree that debt service for dry weather flow projects intended to maintain existing treatment capacity shall be allocated according to the "Share of Current Treatment Capacity, percent" column in Table 3. Santa Rosa shall update Table 3 as treatment capacity is added and the updated table shall be used to determine debt service for dry weather flow treatment plant projects intended to maintain existing treatment capacity. Santa Rosa shall inform User Agencies of any and all Table 3 updates. 51 Table 3. Share of Treatment Capacitya Entity Share of 21.34 mgd Share of Treatment Capacity Expansion Share of Current . Treatment Capacity' mgd Percent mgd Percent mgd Percent Santa Rosa 15.61 73.15 0 - 15.61 73.15 SPCSD 0.70 3.28 0 - 0:70 3.28 Rohnert Park 3.43 16.07 0 - 3.43 16.07 Sebastopol 0.84 3.94 0 - 0.84 3.94 Cotati 0.76 3.56 0 - 0.76 3.56 Total 21.34 100.00 1 0 - 21.34 100.00. a Current treatment system capacity is 21.34 mgd. Table 3 shall be updated by Santa Rosa as treatment capacity is increased pursuant to the Agreement. The values in the "Share of Current Treatment Capacity, percent" column shall be used to determine debt service for projects intended to maintain current treatment capacity. 5. Santa. Rosa and User Agencies agree that debt service for all discharge- related projects not involving construction of additional storage and wet weather treatment projects to maintain current treatment capacity described in Table 3 shall be allocated as shown in Table 4. Table 4 shall be updated by Santa Rosa prior to bond sales to fund wet weather treatment projects.. Santa Rosa shall inform User Agencies of the revised values, and Santa Rosa shall use such revised values to calculate debt service for each User Agency. Table 4. Allocation of Discharge and Wet Weather Treatment Plant Project Costs to Maintain Existing Capacity(Percene) Entity Treatment Discharge' Plant Santa Rosa 67.60 76.00 SPCSD 3.51 3.94 Rohnert Park 19.53 14.37 Sebastopol 6.85 3.16 Cotati 2.52 2.53 Total 100.00 100.00 a Santa Rosa shall update this table prior to bond sales to fund wet weather treatment projects, and Santa Rosa shall use such revised values to calculate debt service for each User Agency b based on 95`h percentile hourly flows for wet weather events from December 2004- February 2008. based on 95`h percentile daily flows for wet weather events from December 2004 - February 2008. 6. Santa Rosa and User Agencies agree that debt service for all projects intended to expand treatment capacity from current treatment capacity defined in Table 3 to or approaching 25.86 mgd shall be determined by allocating the debt service into two portions: portion attributable to expanding dry weather capacity and the portion attributable to expanding wet weather capacity. Debt service attributable to dry 5 weather capacity expansion shall be allocated according to the "Share of 4.52 mgd expansion, percent" column in Table 1. Debt service attributable to wet weather capacity expansion shall.be allocated according to the "Treatment Plant" column in Table 4. 7. Santa Rosa and User Agencies agree that debt service for projects to expand reuse capacity from current disposal capacity defined in Table 2 to or approaching 25.86 mgd shall be allocated according to the "Share of 4.52 mgd expansion, percent" column in Table 1. Such projects shall be undertaken subject to the following: a. If one entity needs additional reuse capacity prior to other entities: i. . The entity first requesting additional reuse capacity shall identify its preferred capacity expansion project in consultation with Santa Rosa and be solely responsible for debt service costs associated with such project. Santa Rosa shall undertake the agreed upon capacity expansion project to ,provide such additional capacity as described in Sections 7 and 171 of the Master Agreement. ii. At such time that a second or subsequent entity shall request additional reuse capacity, the entity having secured additional capacity per paragraph 7.a.i may, .at its option, offer to the second or subsequent entity a portion of its project's capacity up to but not exceeding the second or subsequent entity's percentage of capacity right increase shown in the "Share of 4.52 mgd upgrade, percent" column of Table 1. If the second or subsequent entity requests additional reuse capacity and additional reuse capacity is offered, the second or subsequent entity shall purchase such additional capacity. The second or subsequent entity shall pay actual project.cost in proportion to the share of the project's capacity that it purchases escalated per Engineering News Record Construction Cost Index for San Francisco. If additional reuse capacity is not offered, the second or subsequent entity shall' identify its preferred reuse capacity expansion project in consultation with Santa Rosa and be solely responsible for debt service .costs associated with such project. Santa Rosa shall undertake the agreed upon reuse capacity expansion project to provide such additional capacity as described in Sections 7 and 17D, except projects developed pursuant to this paragraph are not subject to the project cost sharing provisions in the third and last paragraph of Section 7 of the Master Agreement. b. If more than one entity needs additional . reuse capacity simultaneously or additional capacity is needed beyond that offered pursuant to paragraph 7.a.i, Santa Rosa shall identify and undertake capacity expansion to provide such additional capacity as described in Sections 7 and 17D of the Master Agreement. 8. GEP capacity shall be allocated 29.6 percent to capacity expansion (950 MGY /3,209 MGY) and the remainder (70.4 percent or 2,259 MGY /3,209 MGY) shall be allocated 6 to maintenance of existing capacity. GEP cost shall be allocated as described in Table 5. Table 5. Allocation of GEP Cost Entity Capacity Expansion (29.6 percent of GEP cost Capacity Maintenance (70.4 percent of GEP Cost Total ° (percent PWWF Ca acit Percent of Expansion' Percent of GEP Cost Percent of Maintenance Percent of GEP Cost of GEP_ Cost) Santa Rosa 59.33 17.56 76.00 53.50 71.06 SPCSD 3.60 1.07 3.94 2.78 3.84 Rohnert Park 37.07 10.97 14.37 10.11 21.09 Sebastopol 0 0 3.16 2.23 2.23 Cotati 0 0 2.53 1.78 1.78 Total 100.00 29.60 100.00 70.40 100.00 a from Table 2 b from Table 4 Example calculation: Santa Rosa's total of 64.88 percent is based on (29.6% x 59.33 %) + (70.4% x 76.00 %) = 17.566/0 + 53.50% = 71.06% 9. Table 1 in Section 14 on page 13 of the Master Agreement is amended to read as follows: Table 1. Capacity Service Entity Section 1, West College Avenue Laguna Interceptor 'Capacity Service Treatment Plant Capacity Service PWWF Ca acit Percent ADWF (m d ) BOD (lb /d SS lb /da Percent Santa Rosa 41.3 93.9 18.25 44,556 47,635 70.76 SPCSD 0.86 2,100 2,245 3.33 Rohnert Park 5.08 12,402 13,259 19.70 Sebastopol 2.7 6.1 0.84 2,051 2,193 3.26. Cotati 0.76 1,855 1,984 2.95 Total 44.0 100.0 25:79 62,964 67,315 100.00 10. Except as amended herein and as amended previously as set forth in Recitals, all terms of the Master Agreement remain in .effect..In the event of any inconsistency between the provisions of this Fifth Amendment and the Master Agreement or any previous amendments thereto, the provisions of this Fifth Amendment shall control. 7 ATTEST: CITY OF SANTA ROSA By: ATTEST: CITY OF ROHNERT PARK ATTEST: ATTEST: By: CITY OF SEBASTOPOL By: CITY OF COTATI By: ATTEST: SOUTH PARK COUNTY SANITATION DISTRICT 8