HomeMy WebLinkAboutAgenda Statement 1983/06/07 Item 08
COUNCIL AGENDA STATEMENT
Item 8
Meeting Date 6/7/83
Resolution ;,1;(~/, Approving
District Relating to Transfer
C apac ity
SUBMITTED BY: City Engineer \r~.
REVIEWED BY: City Manager i~'~~
ITEM TITLE:
Agreement with Otay Water
of Me,tropo 1 i tan Sewerage System
(4/5ths Vote: Yes___No~)
In a 1978 report to Council the City Engineer recommended that the City reduce
its total capacity right in the Metropolitan Sewerage System by up to 5
mill ion gallons per day (MGD). Such recommendation was based on long range
projections of the City's probable capacity needs. The City Council in
January of 1979 authorized the City Engineer to seek purchasers for such
surplus capacity.
To date, 2.7 MGD has been sold and/or committed. Thus, of the 5 MGD
originally authorized for consideration some 2.3 I~GD is still available. The
Otay Water District desires to purchase 1.2 MGD. Engineering staff has
conducted negotiations with District staff and, as a result, a proposed
agreement stipulating the terms of the purchase has been prepared. That
agreement is scheduled for approval by the District Board on June 6, 1983.
A sense of urgency prevails in this matter due to certain requirements of the
Regional Water Quality Control Board to significantly reduce and/or eliminate
use of the District's wastewater reclamation facility. The District is
currently utilizing a costly "emergency" connection to the Spring Valley
Sanitation District facilities.
RECOMMENDATION: It is recommended that Council approve the resolution
authorizing the Mayor to execute the subject agreement in behalf of the City.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The price per MGD ($57,266) upon which this agreement is based is that which
the City of San Diego would currently charge for Metro capacity. Such a price
must generally be regarded as a practical maximum which Chula Vista could
achieve under competitive conditions.
Any sale of Chula Vista capacity must carry a continuing obligation on the
part of the buyer for annual payments of $12,098/MGD/year through the life of
the Metro agreement (2003). Thus, the annual amount due Chula Vista under
12, {I d G ?
Page 2, Item 8
Meeting Date 6/7/83
this agreement will be $45,168/MGD/year ($57,266 - $12,098 = $45,168). At the
request of the District, an alternative cash payment is also specified in the
agreement but such an alternative is not likely to be selected according to
Di stri ct staff.
The actual purchase is in the amount of 1.2 MGD and so the actual amounts to
be paid per the agreement are as follows:
A.
B.
C.
Annual payment to San Diego
Annual payment to Chula Vista
Alternative lump sum to Chula Vista
= $ 14,517.60
= $ 54,200.00
= $532,170.00
Any transfer of capacity rights in the Metro System is per agreement subject
to approval by the City of San Diego. San Diego staff personnel have
indicated that they see no practical reason for denial of the proposed
transfer.
Upon approval of this agreement the City will have sold
MGD of the 5.0 MGD originally contemplated for disposal
cons i der the capac i ty requirement study conducted
Department in 1978 to be valid.
and/or committed 3.9
as surplus. I still
by the Engineering
Sale of Metro capacity in the amount of 1.2 MGD at the price stipulated in the
proposed agreement is recommended.
FISCAL IMPACT: Direct income to the City will be either $54,200 per year
for 20 years or a lump sum payment of $532,170. Billing and record keeping
expenses are projected to be ins i gn ifi cant. The money deri ved wi 11 be placed
in a special fund pending final determination by council for use of those
funds in the future.
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