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Reso 0726-06/1985 RESOLUTION NO. 726 RESOLUTION OF THE BOARD OF DIRECTORS OF THE SAN MARCOS COUNTY WATER DISTRICT AUTHORIZING SIGNATURE OF THE 27TH AMENEMENT TO THE BASIC AGREEMENT OF THE ENCINA JOINT POWERS WHEREAS, it is in the best interest of all ENCiNA members to have a mutual understanding with respect to accomnodation of the operation of the Joint System and reclamation and reuse of water. WHEREAS, the CITY OF CARLSBAD, LEUCADIA COUNTY WATER DISTRICT, BUENA SANITATION DISTRICT and SAN MARCOS COUNTY WATER DISTRICT currently have cumpleted, or have operational, reclamation plants within their service areas. WHEREAS, the ENCINA members, in the 27th Supplement, recognize that ENCINA operation requires a miniturin of 10 million gallons per day of sewage effluent and that each agency must contribute their fair share of that flow based on proportional ownership of the Joint System. WHEREAS, both public policy and the water dynamics of San Diego County favor reclamation and reuse of effluent, and negating reclamation and reuse for no legitimate purpose would violate public policy and be unenforceable. WHEREAS, public policy precludes a member agency from abrogating the authority or responsibility for operation of its separate sewage system. WHEREAS, the basic (ENCINA) Agreement identifies the Joint System as Units A through J pursuant to Section 2 of said Agreement. WHEREAS, budgets to date prepared for the ENCINA Joint System relate solely to Units A tbrough J. NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE SAN MARCOS COUNTY WATER DISTRICT DOES FIND, DETERMINE AND RESOLVE AS FOLLOWS: Section 1: Subject to the foregoing recitals and the following interpretation, the Board authorizes signature of the 27th ~nendment to the Basic Agreement of the ENCINA JOINT POWERS, copy attached (Exhibit "A") . Section 2: The 27th Supplement applies to reclaiming water only from the Joint System (Units A through J) and not to other sewage originating within a member agency service area. Each member must contribute a proportionate share of sewage, based on relative ownership, to the Joint System. The by-product of recl~mstion may be sent to the Joint System provided it meets applicable quality and quantity standards. M~mhers must bear their proportionate share of the cost of operation of the Joint System but are not required to subsidize the operation of otber agencies. Resolution No. 776 Page 2 Section 3: Subject to the foregoing understanding, SAN MARCOS COUNTY WATER DISTRICT supports water reclanation and reuse by member agencies and will reclaim water from the sewage originating within the District (not in the Joint System). Section 4: The Secretary of the SAN MARCOS COUNTY WATER DISTRICT is directed to provide a certified copy of this resolution to member agencies and the ENCINA Manager to promote a conmon understanding of the 27th Supplement. PASSED, ADOPTED AND APPROVED at a Regular Meeting of the Board of Directors held this 17th day of June, 1985, by the following roll call vote: AYES: Directors: Rutherford, Ferguson, Newport NOES: Directors: Mason, Mahr ABSTAIN: Directors: None ABSENT: Directors: None Board of Directors San Marcos County Water District AITE,ST: Board of Directors San Marcos County Water District TWENTY-SEVENTH SUPPLEMENT TO BASIC AGREEMENT TO PROVIDE FOR AMENDMENT OF SECTION 32 AND AMENDMENT OF SECTIONS 17.3(b) AND 17.3(c) RE COST OF OPERATION AND MAINTENANCE This Twenty-Seventh Supplement is made and entered into this day of , 1985, by and among: THE CITY OF VISTA, (VISTA), a General Law City; CITY OF CARLSBAD (CARLSBAD), a General Law City; SAN MARCOS COUNTY WATER DISTRICT (SAN MARCOS), a County Water District; BUENA SANITATION DISTRICT (BUENA), a County Sanitation District; ENCINITAS SANITARY DISTRICT (ENCINI- TAS), a Sanitary District; and LEUCADIA COUNTY WATER DISTRICT (LEUCADIA), a County Water District. Recitals A. On or about July 13, 1961, the CITY OF CARLSBAD, a gen- eral law city, and the VISTA SANITATION DISTRICT entered into a written Joint Powers Agreement for acquisition, construction, ownership, and operation of a joint sewer system, commonly known as the Encina Water Pollution Control Facility (EWPCF)~ said joint powers agreement is commonly known as the "Basic Agreement.''[~ B. The aforesaid Basic Agreement has been modified and supplemented from time to time by written agreements signed by the parties to said Basic Agreement. C. BUENA became a party to the Basic Agreement by virtue of the Second Supplement thereto dated January 6, 1964. D. SAN MARCOS became a party to the Basic Agreement by virtue of the Third Supplement thereto dated March 22, 1965.. E. LEUCADIA and ENCINITAS became parties to the Basic Agreement by virtue of the Fifth Supplement thereto dated Septem- ber 17, 1971. F. At all times since July 13, 1961, the Basic Agreement, as modified and supplement, has been and still is in full force and effect. G. On or about September 1~, 1983, the VISTA SANITATION DISTRICT was dissolved and the functions theretofore performed by said District was assumed by the CITY OF VISTA. H. Section 32 of the Basic Agreement for the ownership and operation of the Encina Joint Sewer System provides as follows: "Any party to this Basic Agreement, at its own expense, may, and shall have the right to, reclaim water from any sewage in the Joint System and to install at any place approved by the parties to said Basic Agreement facilities for the reclamation of water from sewage. Any such reclamation shall.not reduce the M & O expenses payable by any party and such M & O expenses shall be charged and paid as though there had been no such reclamation. In the event the requests to reclaim water exceed the available supply, each party shall be entitled to reclaim water from that portion of the total sewage entering the Joint System that is equal to the proportion of capacity of the treatment (Unit I) owned by such party as shown in Exhibit "C" hereto attached." I. Section 17.3(b) of the Basic Agreement provides as follows: "All administration, maintenance, and operation expense (in- cluding overhead) of the Joint System, (except Units "A", "B", and "C"), hereafter sometimes referred to as M & 0 expense, shall be paid by each party in an amount equal to that portion of the total M & 0 expenses which the actual amount of sewage received that fiscal year from such party (pius its share of inflow from leakage as provided in Section 18) bears to the total actual quantity of sewage handled and treated that fiscal year by the Joint System. This amount shall be determined in accordance with recog- nized accounting principals." -2- J. Section .17.3(c) of the Basic Agreement provides as follows: "Not later than May 1st in any year the Administrator shall estimate the amount of money required to maintain and oper- ate the Joint System during the ensuing fiscal year, and the proportionate amount to be paid by each party to this Basic Agreement. Such estimate shall be based on the cost, main- tenance, and operation during the current fiscal year as such proportion of the sewage developed and originating within the jursidiction of each of the parties bears to the total amount of sewage developed and originating in the jurisdictions of all parties; provided, however, at the com- mencement of operation of the Joint System the Administrator shall estimate such costs for the balance of the current fiscal year based upon estimates of the sewage to develop and originate within the jurisdiction of each of the parties and be handled and treated by the Joint System. It shall be the duty of each party to include the sum for maintenance and operating expense in its budget or other program of expenditures but in any event to make payments promptly at the time the same become due." K. That as a precondition to a state and federal grant for Phase III Upgrading and Enlargement of the Encina Water Pollution Control Facility, the Joint Powers agreed to implement a Finan- cial and Revenue Program providing for a "user charge system." L. That the requirements of the Financial and Revenue Pro- gram required by the state and federal governments conflict with the provisions of Sections 17.3(b) and 17o3(c) and Section 32 of the Basic Agreement. M. That it is necessary and in the best interest of all members of the Encina Joint Powers to amend Section 32 and amend Section 17.3(b) and 17.3(c) of the Basic Agreement to provide that all future M & 0 expenses shall be based on ownership and usage in accordance with the Financial and RevenUe Program imple- mented by the Encina Joint Powers and submitted to the State of Calfornia, and any revisions thereof or amendments thereto. -3- NOW,. THEREFORE, the parties hereto agree as follows: 1. From and after the effective date of this Twenty-Seventh Supplement, the provisions of Section 32 of the Basic Agreement shall be hereby amended as follows: "(a) Any party to this Basic Agreement, at its own expense, may, and shall have the right to, reclaim water from any sewage in the Joint System which emanates within the jurisdiction of the respective reclaiming party. And, subject to the limitations hereafter stated, each party shall have the right to install facilities for the reclamation of water from sewage. Provided, how- ever, no party hereto shall have the right to reclaim water unless the average daily sewage flow from such party's jurisdiction that is entering Unit I of the Joint System is in the same percentage of 10 MGD as is such party's percentage of capacity-ownership right in said Unit I. Further provided, that any reclamation shall require the approval of all the parties hereto in the event that such reclamation facility, or proposed reclamation facility, is so designed and/or constructed that any solids or non-treated effluent from any such facility may be discharged into Unit I of the Joint System. Provided, however, such approval shall not be unreasonably withheld. Approval of such use or pro- posed use of a reclamation facility shall not be with- held unless the use of such facility will adversely affect one or more of the non-proposing parties hereto, and the reclaimer cannot reasonably mitigate the · adverse impact. Nothing in this Section 32 shall be construed so as to require approval by the parties hereto as to the geographic location of a reclamation facility constructed solely within the boundaries of any party hereto. (b) Approval of all parties hereto shall be required prior to the construction of any reclamation facility that is so designed and/or constructed that such facility may utilize Unit J of the Joint System for discharge of reclaimed water. Provided, however, such approval shall not be unreasonably withheld. Provided, however, approval of any such facility shall not be withheld unless the use or proposed use of such reclamation facility will adversely affect one or more of the non- proposing parties hereto, and the reclaimer cannot reasonably mitigate the adverse impact. (c) Subsection (a) and (b) above pertain to all future reclamation facilities. Currently constructed facil- ities may be operated to their current c~Jacity without o further action by owners. The current reclamation facilities and capacities are as follows: -4- Reclamation Entity Facility Capacity City of Carlsbad Calavera Hills 1.2 MGD LCWD Gaffnet 0.75 MGD SMCWD Medowlark 2.0 MGD Buena Sanitation District Shadowridge 1.0 MGD (d) Because of the uncertainties associated with the pend- ing 301(H) Waiver and possible benefits of water recla- mation, a good faith review will be held by the parties hereto within three (3) years in order to consider equitable adjustments to reclamation entitlement as set forth above herein. 2. Section 17.3(b) of 'the Basic Agreement is hereby amended to read as follows: "(1) All administration, maintenance, and operation expenses (including overhead) of and for Unit I of the Joint System here after sometimes referred to as M & O expen- ses, shall be paid by each party based on each party's percentage of ownership and usage of Unit I. For the purposes of this Section 17.3(b)(1), the following definitions shall.apply: "usage" shall mean the costs for power, chemicals, maintenance, and other sewage treatment, solids handling and disposal process which results from sewage entering Unit I; "ownership" shall mean the costs for insurance, administration expenses, laboratory expenses, plant operations, services, and maintenance, and other sewage collection and treatment, solids handling and effluent disposal costs which are incurred irrespective of the amount of sewage which enters Unit I. (2) Except for Units I, B, and C of the Joint System, which units are otherwise provided for in this Basic Agree- ment), all administration, maintenance, and operation expense of the Joint System shall be paid by each party in an amount equal to that portion of the total M & O expenses of said system, which the actual amount of sewage received that fiscal year from such party (plus its share of inflow from leakage as provided in Section 18) bears to the total actual quantity of sewage handled and treated that fiscal year by the Joint System. This amount for all units of the Joint System (except Units I, B, and C) shall.be determined in accordance with recognized accounting principles. -5- (3) Each party hereto shall pay its proportional share of the administration, operation, and maintenance expenses provided for in Sections 17.3(b}(1) and 17.3{b)(2) above pursuant to and in accordance with the Revenue and Financial Plan as incorporated in the annual budget for the Joint System as adopted by all members of the Encina Joint Powers." 3. Section 17.3(c) of the Basic Agreement is hereby amended to read as follows: "Not later than May 1st in any year, the Administrator shall estimate the amount of money required to maintain and oper- ate the Joint System during the ensuing fiscal year, and the proportionate amount to be paid by each party to this Basic Agreement. Such estimate shall be based on the total main- tenance and operation costs (M & 0 expenses) during the current fiscal year as such costs are set forth in the cur- rent Revenue'and Financial Plan incorporated in the current approved budget for the Encina Joint Sewer System; and each party shall pay that portion 'of said total M & 0 expenses as determined pursuant to and in accordance with Sections 17.3(b)(1) and 17.3(b)(2) of this Basic Agreement. It shall be the duty of each party to include the sum for M & 0 ex- penses in its budget or program of expenditures, but in any event to make payments promptly at the time they become due." 4. As expressly modified by this Supplement, the Basic Agreement as heretofore supplemented and modified in writing shall remain in full force and effect until further modified or supplemented in writing si~ned by all the.parties hereto. 5. This Twenty-Seventh Supplement may be executed in counterparts and upon execution thereof by all parties set forth on Page 1 hereof, each such counterpart shall be deemed to con- stitute the original of this Agreement. 6. This Twenty-Seventh Supplement shall become effective on the last date that a party hereto adopts a resolution author- izing execution hereof. ·; IN WITNESS WHEREOF, each party hereto has caused this Agree- ment to be signed by its respective officials heretofore duly authorized by the legislative bodies thereof. Approved by Resolution CITY OF VISTA, No. on , 1985. By , Mayor Approved by Resolution CITY OF CARLSBAD, No. on , 1985. By , Mayor Approved by Resolution LEUCADIA COUNTY WATER DISTRICT No. on , 1985. By Approved by Resolution SAN MARCOS COUNTY WATER No. 726 on DISTRICT, June 17 , 1985. B~~~ Approved by Resolution BUENA SANITATION DISTRICT, No. on , 1985 ..... By Approved by Resolution ENCINITAS SANITARY DISTRICT, No. on , 1985. By -7-