HomeMy WebLinkAboutCC AG PKT 2009-12-14 #OIli 1 [ 11 1! �il 1 192M - 14:161=1i
DATE: December 14, 2009
TO: Honorable Mayor and City Council
THRU: David Carmany, City Manager
FROM: Vince Mastrosimone, Director of Public Works
SUBJECT: RESOLUTION OF THE SEAL BEACH CITY COUNCIL
DIRECTING THE CITY MANAGER TO TAKE ALL
NECESSARY STEPS TO ADD THE CITY OF SEAL
BEACH TO THE LIST OF PARTICIPATING RETAIL
AGENCIES IN A MEMORANDUM OF
UNDERSTANDING BETWEEN POSEIDON
RESOURCES (SURFSIDE) LLC THE MUNICIPAL
WATER DISTRICT OF ORANGE COUNTY, AND
PARTICIPATING RETAIL AGENCIES
SUMMARY OF REQUEST:
The City Council is asked to adopt Resolution No. 5952 directing the City
Manager to take all necessary steps to add the City to the list of Participating
Retail Agencies in a memorandum of understanding between Poseidon
resources (surfside) LLC the Municipal Water District of Orange County and
Participating Retail Agencies
BACKGROUND:
Staff has been working with Municipal Water District of Orange County
( MWDOC) and several other Orange County water agencies on the purchase of
desalinated water from Poseidon produced from their proposed project in
Huntington Beach. In May of 2008, MWDOC and 10 other Participating Retail
Agencies executed a Memorandum of Understanding with Poseidon to define
how they will interact with each other and with outside parties in connection
discussion and negotiation of a long -term water purchase agreement through
which some or all of them may purchase water from Poseidon.
The current list of Participating Retail Agencies include:
® City of Anaheim Public Utilities Department
Agenda Item 0
Page 2
•
El Toro Water District
• Irvine Ranch Water District
• Laguna Beach County Water District
• Mesa Consolidated Water District
• Moulton Niguel Water District
• City of Santa Ana Public Works Agency
• Santa Margarita Water District
• Trabuco Canyon Water District
The MOU does not obligate any party to the MOU to enter into a water purchase
agreement with any other party to the MOU and does not provide Poseidon or
the other agencies with exclusive negotiating rights or obligations.
The MOU provides:
• All Participating Retail Agencies will receive the same information from
Poseidon
o Poseidon agrees not to negotiate with any elected officials
0 Subject to the Public Records Act, preliminary deal points nor details of
negotiations between the parties shall be released to the media or any
other persons
Poseidon agrees to reimburse the Participating Retail Agencies for certain
third party due diligence costs
Poseidon agrees to offer the Participating Retail Agencies no less
favorable terms and conditions than any additional water arrangement
entered into at any time
Poseidon has approached the City of Seal Beach with the possibility of the City
joining the list of Participating Retail Agencies under the MOU. Becoming a
Participating Retail Agency would not obligate the City to purchase water in the
future, but it would allow the City to access important information needed to
explore the feasibility of purchasing desalinated water in the future. To become a
Participating Retail Agency, the City Staff would have to execute several
documents, including a confidentiality agreement with Poseidon.
FINANCIAL IMPACT:
There is no direct fiscal impact.
RECOMMENDATION:
It is respectfully requested that the City Council adopt Resolution No. 5952
directing the City Manager, or his designee, to take all necessary steps to add
the City to the list of Participating Retail Agencies in the MOU.
Page 3
SUBMITTED BY:
NOTED AND APPROVED:
U °�7D
Vince Mewosimone David Carmany
Director of Public Works City Manager
Attachments:
A. Resolution No. 5952
B. Memorandum of Understanding
C. Draft First Amendment to the MOU
RESOLUTION NUMBER 5952
RESOLUTION OF THE SEAL BEACH CITY COUNCIL
DIRECTING THE CITY MANAGER TO TAKE ALL
NECESSARY STEPS TO ADD THE CITY OF SEAL
BEACH TO THE LIST OF PARTICIPATING RETAIL
AGENCIES IN A MEMORANDUM OF UNDERSTANDING
BETWEEN POSEIDON RESOURCES (SURFSIDE) LLC
THE MUNICIPAL WATER DISTRICT OF ORANGE
COUNTY, AND PARTICIPATING RETAIL AGENCIES
WHEREAS, there exists a Memorandum of Understanding ( "Memorandum of
Understanding ") between Poseidon Resources (Surfside) LLC ( "Poseidon "), the
Municipal Water District of Orange County and 10 other Participating Retail
Agencies regarding the discussion and negotiation of long -term purchases of
desalinated water from Poseidon;
THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY
RESOLVE:
Section 1. The Council hereby authorizes and directs the City Manager or his
designee to do any and all things, and to take any and all actions, and execute
and deliver any and all documents that he or his designee deems necessary or
advisable in order to add the City of Seal Beach to the list of Participating Retail
Agencies in the Memorandum of Understanding and to give effect to or comply
with the terms and intent of the Memorandum of Understanding.
PASSED, APPROVED AND ADOPTED by the City Council of Seal Beach, at a
meeting hereof held on the 14th day of December , 2009 by the following vote:
AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of Seal Beach, California, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 5952 on file
in the office of the City Clerk, passed, approved, and adopted by the City Council
of the City of Seal Beach, at a regular meeting thereof held on the 14th
day of December , 2009.
City Clerk
First Amendment to
Memorandum of Understanding
THIS FIRST AMENDMENT ( "First Amendment ") TO THE MEMORANDUM OF
UNDERSTANDING dated May 22, 2008 ( "MOU ") is made by and between all the original
signatories to the MOU, to wit, Poseidon Resources (Surfside) LLC and its affiliates
(collectively, "Poseidon "), the City of Anaheim Public Utilities Department, El Toro Water
District, Irvine Ranch Water District, Laguna Beach County Water District, Mesa Consolidated
Water District, Moulton Niguel Water District, City of Santa Ana Public Works Agency, Santa
Margarita Water District, South Coast Water District, Trabuco Canyon Water District
(collectively "MOU Retail Agencies "), and the Municipal Water District of Orange County
( "MWDOC ").
WHEREAS, Poseidon, the MOU Retail Agencies and MWDOC previously executed the
MOU to define how they will interact with each other and with outside parties in connection with
discussion and negotiation of a long -term water purchase agreement or multiple long -term water
purchase agreements through which some or all of them may purchase water from Poseidon's
Huntington Beach Desalination Project ( "Project "); and
WHEREAS, numerous other public and private water retailers have developed an interest in
joining these discussions and negotiations with Poseidon on an equal basis with the MOU Retail
Agencies; and
WHEREAS, the MOU (1) does not obligate any party to the MOU to enter into a water
purchase agreement with any other party to the MOU, and (2) does not provide Poseidon, the MOU
Retail Agencies or MWDOC with exclusive negotiating rights or obligations; and
WHEREAS, currently the interests of all parties to the MOU appear to be served by
expanding the number of MOU Retail Agencies under the MOU, which will expand the potential
market for Project water, increase efficiency in the dissemination and analysis of Project information
by and among Orange County water retailers, and spread certain fixed costs of the negotiation
process among a greater number of potential participants; and
WHEREAS, in the interest of avoiding the cost, delay and inefficiency of repeated written
amendments signed by all parties, as currently required by Section XI(b) of the MOU, the
undersigned wish to amend the MOU to allow additional potential water purchasers to join the MOU
by a simple amendment approved and executed only by Poseidon and the potential water purchaser,
with notice to all other parties and subject to objection by any party within 30 days;
NOW, THEREFORE, in consideration of the foregoing recitals and the terms, covenants and
conditions contained herein, Poseidon, the MOU Retail Agencies, and MWDOC agree as follows:
FIRST AMENDMENT TO POSEIDON MOU Page 1
I . The introductory paragraph of the MOU is hereby amended as follows, with all new
text underscored:
Poseidon Resources (Surfside), LLC and its affiliates
(collectively "Poseidon "), the Participating Retail Agencies, and
MWDOC (each hereinafter referred to as a "Party" and
collectively the "Parties ") desire to enter into this Memorandum
of Understanding (the "MOU ") to define how the Parties will
interact with each other and with outside parties in connection
with discussion and negotiation of a long -term water purchase
agreement or multiple long -term water purchase agreements.
( "WPA" and "WPAs" respectively) through which some or all
of the Participating Retail Agencies may purchase water from
Poseidon's Huntington Beach Desalination Project ( "Project ").
Other potential purchasers of Project water may join the list of
Participating Retail Agencies at any time with full rights and
obligations under the MOU, without written approval of other
Participating Retail Agencies or MWDOC, by executing an
"Amendment to List of Participating Retail Agencies" in the
form attached hereto as Exhibit A and giving written notice to all
Parties. This right is subject to objection by any existing
Participating Retail Agency as provided herein,
2. Section I of the MOU is hereby amended as follows, with all new text underscored:
I. Term
aa) The term of this MOU (the "Term ") begins on the date the MOU
is executed by the Parties and terminates on June 30, 2011,
unless otherwise terminated pursuant to the terms herein or
extended by mutual written agreement of the Parties.
b) The Term for any new Participating Retail Agency Joining this
MOU by execution of an Amendment (see Exhibit A) shall
commence 30 days after the last date written notice of the
Amendment is received by any existing Participating Retail
Agency. Within the 30 -day period following receipt of such
written notice of the Amendment, any existing Participating
Retail Agency may deliver a written Notice of Objection to the
Amendment to MWDOC, which shall forward it to all
Participating Retail Agencies and the agency submitting the
Amendment. The Notice of Objection shall state a reason for
the objection, and upon receipt by MWDOC it shall immediately
render the Amendment null and void. For purposes of this
section, written notice of the Amendment and of any Objection
must be made through an overnight delivery service.
FIRST AMENDMENT TO POSEIDON MOU Page 2
Section X of the MOU is hereby amended as follows, with all new text underscored:
Nothing in this MOU establishes or implies an exclusive
arrangement between Poseidon and the Parties, or any of them.
This MOU does not prohibit any Party from reviewing,
participating in or developing other potential water supply
projects, nor does it prohibit Poseidon from discussing and
negotiating with other potential purchasers of water from the
Project in addition to Participating Retail Agencies and
MWDOC. Poseidon shall provide a copy of the MOU to other
such potential purchasers of water from the Project and notify,
them in writing that they may become a signatory to the MOU
subject to the right of each then existing Participating Retail
Agency to object as provided herein Prior to entering into any
binding arrangements or WPA with such parties ( "Additional
Water Arrangements "), Poseidon will notify the Participating
Retail Agencies and MWDOC of the terms and conditions of
such Additional Water Arrangement and the identities of such
potential purchasers of water from the Project. Poseidon agrees
to offer the Participating Retail Agencies no less favorable terms
and conditions than any Additional Water Arrangement entered
into at any time. It is mutually understood by the Parties that this
provision excludes up to 3,360 acre feet per year of water sold to
the City of Huntington Beach as agreed to in the City of
Huntington Beach entitlement process in 2006.
4. Section XI(b) of the MOU is hereby amended as follows, with all new text
underscored:
b) This MOU shall be governed by the laws of the State of
California, United States of America, and may only be amended
in a writing signed by all Parties except as expressly provided in
this MOU, as amended Any legal action filed to enforce this
MOU shall be brought in state or federal court, as appropriate, in
the State of California.
5. Upon full execution of an "Amendment to List of Participating Retail Agencies,"
notice to all Parties, and expiration of all rights to object to the Amendment, Poseidon
shall provide all new Participating Retail Agencies with copies of any and all
materials previously distributed to the Participating Retail Agencies under Section IV
of the MOU, "Uniform Disclosure of Project Information."
6. Each party to this First Amendment represents and warrants that (a) it is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and is qualified to do business in all jurisdictions
where it is required to be qualified; (b) it has the necessary power and authority to
enter into and perform its obligations under this First Amendment and the MOU, as
FIRST AMENDMENT TO POSEIDON MOU Page 3
amended; (c) the person(s) signing this First Amendment is duly authorized to
execute this First Amendment on behalf of the party represented; (d) upon execution,
this First Amendment and the MOU, as amended, will be enforceable against each
party in accordance with its terms, except as such enforceability may be inconsistent
with applicable laws concerning bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors rights generally; and (e) the execution and
delivery of this First Amendment and performance by the executing party under this
First Amendment and the MOU, as amended, is not known to conflict with any
agreement, law, rule, regulation, order, judicial decree or administrative code to
which such party is subject.
ACKNOWLEDGED AND AGREED:
Poseidon Resources (Surfside) LLC
By:
Name:
Title:
City of Anaheim Public Utilities.
By:
Name:
Title:
Laguna Beach County Water
Authority
By:
Name:
Title:
Mesa Consolidated Water District
By:
Name:
Title:
El Toro Water District
By:
Name:
Title:
Irvine Ranch Water District
By:
Name:
Title:
Moulton Niguel Water District
By:
Name:
Title:
FIRST AMENDMENT TO POSEIDON MOU Page 4
Santa Margarita Water District
By:
Name:
Title:
Trabuco Canyon Water District
By:
Name:
Title:
Municipal Water District of Orange
County
By:
Name:
Title:
South Coast Water District
By:
Name:
Title:
City of Santa Ana Public Works Agency
By:
Name:
Title:
FIRST AMENDMENT TO POSEIDON MOU Page 5
EXHIBIT A
AMENDMENT TO LIST OF PARTICIPATING RETAIL AGENCIES
THIS AMENDMENT TO THE LIST OF "PARTICIPATING RETAIL AGENCIES"
DEFINED IN THE MEMORANDUM OF UNDERSTANDING DATED May 22, 2008
( "MOU "), AS AMENDED, is made by and between Poseidon Resources (Surfside) LLC and its
affiliates (collectively, "Poseidon ") and
1. Pursuant to the First Amendment to the MOU, executed by all original Parties to
the MOU, [Name I is hereby added as a full "Participating
Retail Agency" under the MOU, as amended. No express approval or
authorization by the governing boards of the previously existing Participating
Retail Agencies is required.
2. [Name ] shall be responsible for sending written notice and a
photocopy of this Amendment to all previously existing Participating Retail
Agencies within 10 days of the date of final execution of this Amendment. [Name
_ ] shall request an updated list of Participating Retail Agencies from the
Municipal Water District of Orange County.
3. [Name ] understands and agrees that within 30 days of receipt of
such written notice, any of the existing Participating Retail Agencies may assert
an objection to this Amendment pursuant to the terms of the MOU, and that upon
timely objection this Amendment shall be null and void.
4. Each party to this Amendment represents and warrants that (a) it is an entity duly
organized, validly existing and in good standing under the laws of the jurisdiction
in which it is organized and is qualified to do business in all jurisdictions where it
is required to be qualified; (b) it has the necessary power and authority to enter
into and perform its obligations under this Amendment and the MOU, as
amended; (c) the person(s) signing this Amendment is duly authorized to execute
this Amendment on behalf of the party represented; (d) upon execution, this
Amendment and the MOU, as amended, will be enforceable against each party in
accordance with its terms, except as such enforceability may be inconsistent with
applicable laws concerning bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors rights generally; and (e) the execution
and delivery of this Amendment and performance by the executing party under
the MOU, as amended, is not known to conflict with any agreement, law, rule,
regulation, order, judicial decree or administrative code to which such party is
subj ect.
FIRST AMENDMENT TO POSEIDON MOU Page 6
ACKNOWLEDGED AND AGREED:
Poseidon Resources (Surfside) LLC [RETAIL AGENCY]
By:
By:
Name:
Name:
Title:
Title:
FIRST AMENDMENT TO POSEIDON MOU Page 7