HomeMy WebLinkAboutCC AG PKT 2011-03-14 #G AGENDA STAFF REPORT
DATE: March 14, 2011
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, Acting City Manager
FROM: Sean Crumby P.E., Director of Public Works
SUBJECT: APPROVAL OF AGREEMENT BETWEEN MUNICIPAL
WATER DISTRICT OF ORANGE COUNTY (MWDOC)
AND ITS MEMBER AGENCIES ON BUDGET,
ACTIVITIES, CHARGES, AND OTHER ISSUES
SUMMARY OF REQUEST:
It is requested that the City Council adopt Resolution No. 6116 authorizing the
City Manager to execute the attached agreement with Municipal Water District of
Orange County and its 27 other Member Agencies which outlines improvements
in the way MWDOC works with its agencies.
BACKGROUND:
The City of Seal Beach serves water to it's residents through a combination of
locally pumped water and imported water. The City of Seal Beach is considered
the retail provider of the water. Imported water is brought to Southern California
by the Metropolitan Water District of Southern California (MET) from the
Colorado River Aqueduct, the Los Angeles Aqueduct, and State Water Project.
In 1951 the Cities within Orange County together formed the Municipal Water
District of Orange County (MWDOC). The Municipal Water District of Orange
(MWDOC) provides wholesale imported water to the City of Seal Beach, and 27
other Member Agencies throughout Orange County. Pooling together with the
other local water agencies has provided numerous advantages for all of the
members. The agencies lobby together for legislation, lobby for representation
on the MET board of directors, and share in funding common services needed by
all of the agencies. MET includes agencies from throughout Southern California
and may not have interests specific to Orange County. MWDOC receives
imported water from the MET, distributes it to the 28 member agencies, and
provides the following services:
• MWDOC is a member agency of MET
o Appoints four member to the MET Board of Directors
Agenda Item G
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o Represents 28 Member Agencies' interest at MET (collectively we pay about
$140 million dollars to MET each year)
• MWDOC also provides regional services for Orange County
o Water use efficiency programs
o Water supply planning activities
o Public affairs
o Governmental affairs
o School education programs
o Emergency preparedness programs through the Water Emergency Response
Organization of Orange County (WEROC)
o Seeks and secures grants each year ranging from about $3 million to about $7
million to help offset local costs or expand services available in Orange County
These services are further detailed within Attachment A. MWDOC's operating
budget to cover staff time and other expenses runs about $5.5 million per year.
Often, grant funding brought into Orange County by MWDOC ranges between $3
million and $7 million per year. The grant funds are used to help implement
various water programs in the County. Including water purchases and debt
service, MWDOC's total budget is about $150 million per year. MWDOC works
extensively with the Orange County Water District (OCWD). The Orange County
Water District manages the water basin that lies within Orange County. Together
these agencies assist the City with ensuring that the residents will have a safe
and reliable water source in the future. Politically, MWDOC is active in looking
out for the best interests of the residents within Orange County and in assisting
MET in pursuing solutions to the State Water Project and Colorado River supply
problems. MWDOC works with its Member Agencies in a cooperative and
collaborative manner in many different forums that are convened on a monthly
basis and open to all agencies.
Over the past several years, MWDOC's activities, budget and service model
were questioned by several of it's Member Agencies. The 28 agencies all have
different needs and challenges. Several of the Member Agencies requested the
ability to opt out of certain services. Questions were also raised about the equity
of MWDOC's rate structure and whether MWDOC's governance structure is
appropriate for the types of services it provides. These concerns were discussed
over several years in a number of forums and are now being resolved via the
attached "settlement agreement" being entered into by MWDOC and its 28
Member Agencies.
The attached agreement addresses the concerns raised and provides for new
policies and opportunities to increase the amount of input and choice in
MWDOC's services, while maintaining MWDOC's role as a wholesale water
provider and regional water planning agency. During the term of this agreement,
MWDOC's Member Agencies will agree not to pursue changes to MWDOC's
governance structure, finances, or a detachment from MWDOC, either through
legislation, or through an application to the Orange County Local Agency
Formation Commission (OCLAFCO) while MWDOC will agree to a number of
changes as outlined below.
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The new framework set forth in this agreement was developed through an
extensive negotiating process. MWDOC is looking to have all 28 of its Member
Agencies consider and approve the document. The agreement will be
considered by MWDOC Board for action after approximately two- thirds of the
Member Agencies (19) have approved the agreement.
Beginning in fiscal year 2011 -12, MWDOC will adopt a new business model in
which individual Member Agencies will have a choice as to whether they
participate in certain MWDOC programs. The "choice" programs will include:
• South Orange Coastal Ocean Desalination Project
• Poseidon Huntington Beach Ocean Desalination
• MWDOC's School Program
• MWDOC's Water Use Efficiency Programs
Each year, MWDOC will develop a budget for these "choice" programs in
collaboration with the Member Agencies and only the Member Agencies that
elect to participate will be charged directly for these services. Going forward,
MWDOC will have the opportunity to develop additional programs or modify
programs through this new service model.
Under the agreement, MWDOC will also realign its rate structure to reflect the
regional nature of MWDOC's services. MWDOC's current rate structure includes
both a fixed retail connection charge and a per acre -foot charge. Approximately
65% of MWDOC's revenues are captured from the per - retail connection charge,
and 35% are captured through the per acre -foot charge. Beginning in fiscal year
2011 -12, MWDOC will transition over a five year period to recovering all of its
revenue from the fixed retail connection charge.
Signatories to the agreement will be given the opportunity to nominate
candidates to be appointed by MWDOC to the MET Board of Directors when
vacancies occur among MWDOC's delegation of four directors appointed to the
MET Board. Following the first vacancy from the MWDOC's MET delegation,
signatories from South County will nominate one candidate. Signatories from
North County will nominate a candidate following the second vacancy. After the
MET directors are appointed, they serve in an "at will" capacity at the pleasure of
the MWDOC Board with input from the respective North and South County
agencies and from the other MWDOC agencies.
Under the agreement, MWDOC will begin holding additional meetings to increase
Member Agency involvement in MWDOC's activities, and in developing water
resource goals and objectives for the region. MWDOC will hold semi - annual
meetings specifically for elected representatives from Orange County water
entities to attend and participate. MWDOC will conduct additional MET director
meetings each year in coordination with the MET Member Agency cities of
Anaheim, Fullerton, and Santa Ana that will be open to all entities in the County.
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The City of Seal Beach has elected to participate in three choice programs as
detailed below:
• Poseidon Huntington Beach Ocean Desalination - $2,182
• MWDOC's School Program — $1,183
• MWDOC's Water Use Efficiency Programs - $3,129
The cost for these choice services total $6,464. The costs for the choice and
mandatory services will be $841 higher next year without executing this
agreement ($45,643 versus $44,802).
FINANCIAL IMPACT:
The City of Seal Beach funds the MWDOC through Water Operations Account
017 - 900 - 45000. Funds have been budgeted in the FY 09 -11 Approved Budget.
•
ANALYSIS:
The City of Seal Beach has benefited from being a member of the MWDOC since
it's formation in 1951. The City benefits from water that is delivered to Orange
County from other parts of California. Keeping the MWDOC together is in the
best interests of the water community and residents of Orange County. Working
together as a unified District will further assure the future water supply reliability
in Orange County at a lower cost for all of its citizens. Therefore, it is
recommended that the attached agreement be approved for execution.
RECOMMENDATION:
It is recommended City Council adopt Resolution No. 6116 authorizing the City
Manager to execute the attached agreement with Municipal Water District of
Orange County and its 27 other Member Agencies which outlines improvements
in the way MWDOC works with its agencies.
SUBMITTED BY: NOTED AND APPROVED:
_ . 0 �1,1R • 7tfli
Sean Crumby, P.E. I II R. Ingram
Director of Public Works Acting City Manager
Prepared by: Michael Ho, City Engineer
Attachments:
A. MWDOC Services /Activities
B. Resolution No. 6116
C. Agreements
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Attachment "A"
MWDOC Services /Activities
Core Activities Choice Activities Overhead Costs
Board Compensation & Benefit Water Use Efficiency Salary charged to
Retiree Costs • Residential clothes overhead function
Legal Costs washers (vacation, sick leave
Board Elections • Sprinkler nozzles and holidays)
Accounting and General Admin • SmarTimers Personnel development
MET Representation • CII Plumbing Fixtures Legal costs charged to
• MET Director Support • Synthetic Turf overhead function
• MET policy analysis, programs and special • Hotel Program Employee benefits
projects Personnel /staff • Industrial Program
• MET operations, water rates and accounting • Landscape Certification development
Staff time for MWDOC's Water Use Efficiency Program Information technology
Programs Manager Includes marketing materials Conference employee
Governmental Affairs for WUE activities, staff time, Travel &
• In -house staff for legislative info overhead and grant funds Accommodations
• WACO, ISDOC and other support (MET and other) employee
• Federal lobbyist for countywide funding Governmental Relations Automotive /Mileage/Toll
• State lobbyist for countywide legislative, grant • Federal lobbying for Office maintenance
and policy access Rents & Leases
funding P Y SOCODP — Barker Office supplies
• Local lobbyist for Board of Supervisors • Federal lobbying for Insurance expenses
Public Affairs SOCODP — Townsend Utilities — telephone
• Coordination with MET, other regional and local • Any project or program Miscellaneous
retailers legislative or grant support expenses
• Basic communications functions -media on choice activities — Professional fees for
outreach and inquiries, water information and Townsend Public Affairs overhead activities
messaging, MWDOC website Specific Programs Software support
• MWDOC newsletter (e- currents) • School program Computers /software
• Countywide surveys as appropriate • South Orange Coastal
• Countywide water awareness in coordination Ocean Desal Project 1 Estimate overhead to
with retail agencies • Support for Poseidon vary from 65 -75% of
Research — support for Center for Demographic Desal Project salaries based upon
Research • Other Project specific variable activities.
Water Supply Planning studies
• Coordination among agencies • Non - countywide issue
• Water use tracking and projections studies
• Water supply analysis
• Regulatory compliance issues
• Water trends analysis
• Countywide studies
Water Emergency Response Organization of
Orange County (WEROC) — MWDOC contribution
RESOLUTION NUMBER 6116
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
APPROVING THE AGREEMENT BETWEEN MUNICIPAL WATER
DISTRICT OF ORANGE COUNTY (MWDOC) AND ITS MEMBER
AGENCIES ON BUDGET, ACTIVITIES, CHARGES, AND OTHER
ISSUES
THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:
Section 1. The City Council hereby approves the Agreement between the City
of Seal Beach and the Municipal Water District of Orange County and its 27
other Member Agencies.
Section 2. The Council hereby authorizes the City Manager to execute the
Agreement.
PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a
regular meeting held on the 14th day of March , 2011 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 the City of Seal Beach, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 6116 on file in
the office of the City Clerk, passed, approved, and adopted by the City Council at
a regular meeting held on the 14th day of March , 2011.
City Clerk
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AGREEMENT BETWEEN MWDOC AND ITS MEMBER AGENCIES ON
BUDGET, ACTIVITIES, CHARGES, AND OTHER ISSUES
This Agreement is made by and between the Municipal Water District of
Orange County ( "MWDOC ") and those of its 28 Member Agencies that have
signed below (referred to collectively as "Member Agency Parties" and
individually as "Member Agency Party "). Signatories to this Agreement are also
referred to herein collectively as "Parties" and individually as "Party." This
Agreement is effective as of the Effective Date established pursuant to Section
12.1 below.
RECITALS
WHEREAS, MWDOC is a wholesale water provider to 28 Member Agencies in
Orange County, California; and
WHEREAS, MWDOC is a member agency of the Metropolitan Water District of
Southern California ( "MET ") and appoints four (4) directors to METs Board of
Directors, and
Whereas, MWDOC was formed in 1951 by Orange County voters to provide
imported water from MET into Orange County; and
Whereas, MWDOC has been performing this function and many other functions
since its formation in support of Member Agencies within its service area; and
Whereas, MWDOC was formed and operates pursuant to the Municipal Water
District Law of 1911 (Water Code Section 71000 et seq.) and is governed by a
seven - member publicly elected Board of Directors; and,
Whereas, an essential area of MWDOC's authority includes the setting of rates
for water commodities and services, and while rates may be different for
different classes or conditions of service, they shall be uniform for like classes
and conditions of service (Water Code § 71614); and,
Whereas, an essential area of MWDOC's authority includes representing the
Member Agencies at MET to ensure that the approximately $140 million paid to
MET each year by MWDOC is used effectively and efficiently; and,
Whereas, in addition to its role at MET, MWDOC's regional services to its
Member Agencies currently include water use efficiency programs, water supply
planning activities to improve reliability and emergency preparedness, the Water
Emergency Response Organization of Orange County ( "WEROC "), the school
education program, and numerous other programs; and
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Whereas, in support of these services to its Member Agencies, MWDOC
seeks grant funding for its programs, engages lobbyists on the Federal, State
and local levels, and operates a public affairs department that serves its
Member Agencies and their customers; and
Whereas, MWDOC's budget and rates have been the subject of discussion
between MWDOC and some of its Member Agencies over the past several
years, and these Member Agencies have raised concerns over whether the
rate structure is equitable and whether a Member Agency should be able to opt
out of certain services if it provides those services; and
Whereas, in conjunction with the preparation by the Orange County Local
Agency Formation Commission ( "OCLAFCO ") of its 2007 Municipal Services
Review and Sphere of Influence for MWDOC, MWDOC and several of its
Member Agencies from southern Orange County participated in a series of
"stakeholder" discussions facilitated by OCLAFCO in an attempt to resolve
these and other concerns; and
Whereas, following approval by Orange County LAFCO of the 2007 Municipal
Services Review and Sphere of Influence for MWDOC, OCLAFCO retained
a consultant to conduct a study of "governance options" for MWDOC
( "Governance Study "), which Study was funded 50% by MWDOC and 50% by
six of its Member Agencies from southern Orange County; and
Whereas, the same six Member Agencies, namely El Toro Water District,
Trabuco Canyon Water District, Santa Margarita Water District, Irvine Ranch
Water District, Moulton Niguel Water District and South Coast Water District,
have issued a' White Paper" regarding the formation of a "South Orange
County Water Authority" that discusses issues associated with formation of
such an agency if certain changes in MWDOC's operations are not made; and
Whereas, the Governance Study recommended the addition of three Member
Agencies into the Study effort -- the City of San Clemente, the City of San
Juan Capistrano and Laguna Beach County Water District, thereby bringing the
total number of "South County Agencies" to nine; and
Whereas, the other Member Agencies of MWDOC are the City of Brea, City
of Buena Park, City of Fountain Valley, City of Garden Grove, City of
Huntington Beach, City of La Habra, City of La Palma, City of Newport Beach,
City of Orange, City of Seal Beach, City of Tustin, City of Westminster, East
Orange County Water District, Emerald Bay Services District, Golden State
Water Company ( "GSWC "), Mesa Consolidated Water District, Orange
County Water District, Serrano Water District, and Yorba Linda Water District.
Whereas, Emerald Bay Services District boundaries are located in the
southern Orange County area and has requested to be included as a South
County Agency, as hereinafter defined for purposes of this agreement; and
Whereas, the Parties signing below have reached a comprehensive
agreement, memorialized herein ( "Agreement "), that accommodates the
interests of all
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Parties, maintains MWDOC as the wholesale regional planning agency and
promotes a cooperative and collaborative partnership between MWDOC and its
Member Agencies;
NOW, THEREFORE, THE PARTIES ACKNOWLEDGE AND AGREE AS
FOLLOWS:
1. DEFINITIONS
1.1 "South County Agencies," as referenced in the recitals above,
refers collectively to City of San Clemente, City of San Juan
Capistrano, El Toro Water District, Irvine Ranch Water District,
Laguna Beach County Water District, Moulton Niguel Water
District, Santa Margarita Water District, South Coast Water
District, Trabuco Canyon Water District and Emerald Bay
Services District.
1.2 "Member Agencies" refers to any and all entities, public or private,
that purchase water from MWDOC. "Member Agency Parties"
refers to Member Agencies who have signed this Agreement.
1.3 "North County Agencies" as referenced in the Recitals above refer
collectively to Member Agencies (other than the South County
Agencies), including the City of Brea, City of Buena Park, City of
Fountain Valley, City of Garden Grove, City of Huntington Beach,
City of La Habra, City of La Palma, City of Newport Beach, City of
Orange, City of Seal Beach, City of Tustin, City of Westminster,
East Orange County Water District, District, Golden State Water
Company, Mesa Consolidated Water District, Orange County Water
District, Serrano Water District, and Yorba Linda Water District.
2. MWDOC BUDGET
2.1 Core and Choice Services. Commencing in Fiscal Year 2011-
2012, MWDOC will organize its budget according to "Core"
services and "Choice" services. (See Section 4 below regarding
designation of specific services as Core and Choice.)
2.1.1 The Core services budget shall include services identified by
MWDOC as services that are both essential to its mission
and carried out on behalf of the entire MWDOC service area
for all 28 Member Agencies. The Core services also include
services that MWDOC determines cannot practicably or
efficiently be budgeted and charged to individual Member
Agencies on an agency -by- agency basis.
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2.1.2 Choice services shall be budgeted, described, and priced in
a manner that is intended to allow individual Member
Agencies to decide whether to receive such services from
MWDOC. MWDOC's costs for Choice services provided,
including related Overhead costs, will be recovered only
from the MWDOC Member Agencies electing to receive the
service.
2.1.3 Once Core and Choice services are established for the
purpose of the Fiscal Year 2011 -2012 budget, those
designations and their associated cost allocations shall
thereinafter be presumed reasonable and appropriate; and
such designations and cost allocations will be used by
MWDOC in its budgeting in subsequent years, subject to
Paragraph 5.3 below. The designation of any new or
different services to be offered by MWDOC as Core or
Choice will be made at the time the services are considered
for approval by the MWDOC Board and will be subject to
input from the Member Agencies during the review process
described below.
2.2 Review of Budget. MWDOC will continue its practice of soliciting
and considering review and input on its budget from all MWDOC
Member Agencies commencing in December and developing a
conceptual draft budget for Member Agency review the following
January. On or before March 1 of each calendar year, MWDOC
shall publish its draft budget and shall solicit comments from
Member Agencies. Each Member Agency shall indicate to
MWDOC in writing by March 15th of each year if any changes in
the Choice Services they will be participating in are being
considered or are to be deleted as a Choice Service (some
services, such as the South Orange Coastal Ocean Desalination
Project, have existing contractual commitments that differ from
fiscal year commitments). In the absence of such timely notification
of changes by the Member Agencies, the Member Agencies will be
deemed to be participating without change in those Choice services
in the following budget year to the same extent that the Member
Agencies are participating in such Choice Services as of March 15.
Member Agencies desiring to submit formal comments on the
budget shall deliver such formal comments to MWDOC before April
15 (See Section 6.1 below, "Elected Officials 'Meeting. ") These
comments will be considered in preparation of the final Budget and
will be presented to the MWDOC Board in May. The Parties
acknowledge that the MWDOC Board is solely responsible for final
approval and establishment of the MWDOC Budget and all rates
and charges.
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3. MWDOC'S RESERVES
3.1 Purpose. MWDOC's Reserves allow it to meet operating and
emergency financial requirements for operation of the District,
including cash flow for managing grants and such expenses as
future building improvements, Other Post Employment Benefits
(OPEB), unforeseen emergencies, potential litigation, and MWDOC
elections.
3.2 Reserve Line Items. MWDOC adopted a Reserve Policy on June
16, 2010, as outlined in the chart below. MWDOC will segregate its
reserves into these categories and will report on the levels each
year during the budget preparation process:
MWDOC Proposed Reserves as of June 30, 2010
Reserve Category Proposed Amount
General Reserves $1,850,000
(Unrestricted Reserve)
Grant/WUE Cash flow $1,000,000
(Designated Reserve)
Election Expense (Designated $ 500,000
Reserve)
Building Repair /Replacement $ 350.000
(Designated Reserve)
Total Designated or $3,700,000
Unrestricted
OPEB Reserve $500,000
(Irrevocable Trust --
Restricted)
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4. MWDOC CHOICE SERVICES
MWDOC shall institute a budgeting process in accordance with Section 2 above
based on a designation of certain MWDOC services as Core services and other
MWDOC services as Choice services. For the purposes of this Agreement and
the MWDOC 2011 -2012 Budget, the designation of Core and Choice services
and Overhead costs are identified in Table A, attached. (See 5.3 below.) Input
to any proposed changes in the designations shall be solicited from the Member
Agencies in the annual budget preparation process in accordance with Section
2.2 above.
4.1 Designation of Choice Services.
The Choice categories identified at this time are described below.
During the first half of fiscal year 2010 -11, MWDOC Staff and the
Member Agencies will work together to develop the concept,
structure, budget and participation terms for the following services
and any others identified for implementation beginning July 1, 2011
These will be developed in such a way as to be offered to the
Member Agencies for participation and will be incorporated into the
proposed budget for 2011 -12.
4.1.1 Proiect Participation Committees
4.1.1.1 South Orange Coastal Ocean Desalination Project
will continue to be organized in a Project
Participation format with five agencies participating
on an equal cost - sharing basis. The participating
agencies will ultimately determine all institutional,
financing and delivery issues for the project.
4.1.1.2 Poseidon Huntington Beach Ocean Desalination
Proiect is currently organized in a Project
Participation format with 23 agencies participating
on an equal cost - sharing basis. The costs to date
for outside consulting have been paid for by
Poseidon, so no local costs have been paid by the
agencies.
4.1.2 MWDOC - Member Agency Agreements
4.1.2.1 School Program will be organized with each
Member Agency participating and paying its share
of costs on a per student basis, and this Program
also includes as participants the non - Member
Agency cities of Anaheim, Fullerton, and Santa
Ana.
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4.1.2.2 Water Use Efficiency Program will be developed as a
pay -as- you -go or a pay- for - participation basis instead of
a "choice" basis. Functionally, however, there will be
"choice" programs offered to all Member Agencies by
agreement or through direct participation by retail
consumers or others in the water service area. The
Parties anticipate that the terms for the agreements
between MWDOC and the Member Agencies will range
between 3 and 5 years. The eight programs currently in
operation include:
• Residential clothes washers
• Sprinkler nozzles
• SmarTimers
• CII Plumbing Fixtures
• Synthetic Turf
• Hotel Program
• Industrial Program
• Landscape Certification Program
4.2 Right to Submit Proposal. If a Member Agency Party does not
participate in a MWDOC Choice Service pursuant to the
provisions of this Agreement, including Section 2 above, and
desires to participate in a substantially similar Service from
another Member Agency Party, as set forth in a written proposal,
such Member Agency Party shall deliver to MWDOC, no later
than March 15 of each year, a copy of the written proposal to
receive such Service. MWDOC shall have thirty (30) days from
receipt of such proposal to submit a scope and cost to provide
the Service, for the Member Agency Party's consideration.
4.3 Core Programs shall be those listed in Table A. Any funding
brought in via MWDOC efforts from its State or Federal advocacy
efforts, except for those specifically being funded through a Project
Participation Agreement, shall be available to all MWDOC Member
Agencies via Core or Choice Programs, e.g., such as the Water
Use Efficiency Program.
4.4 Overhead Costs shall be those listed in Table A. The
Overhead costs are allocated over all Core and Choice services.
Subject to Paragraph 5.3, if activities are ever added to or
removed from the
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list of Core or Choice services, the commensurate proportion of
Overhead costs will also be allocated accordingly. The
determination of the Overhead cost percentage applicable to each
Core and Choice service for any particular year shall be made
during the budget preparation process and fixed for the entire
budget year.
5. REVENUE COLLECTION
The Parties agree that MWDOC should transition its current rate structure, which
includes both a per retail connection charge and a per acre -foot charge, to a
structure that includes only a per retail connection charge. Currently, MWDOC's
revenue from water rate charges is approximately 65% on the per retail
connection charge and 35% on the per acre -foot charge. As described below,
MWDOC shall increase the percentage on the per retail connection charge
gradually, reaching 100% in fiscal year 2015 -16.
5.1 Fixed Charges. Commencing in fiscal year 2011 -2012,
MWDOC will begin transitioning to a 100% fixed charge. In the
first year of this process, 80% of MWDOC's water rate charges
for its operating budget will be fixed, and 20% will be water
charges. Each year for the next four years, MWDOC will increase
the amount on fixed charges by 5 %.
5.2 Method of Fixed Charges. MWDOC will continue to use the
methodology in effect as of the Effective Date to define retail
service connections independent of size as the method of passing
charges to the Member Agencies on a fixed charge basis.
5.3 Designation of Core, Choice, and Overhead Services. The
designations of services and activities set forth in (i) Section 2.1
and Table A for Core and Choice Service, in (ii) Paragraph 4.4 and
Table A for Overhead Costs, and in (iii) Paragraph 5.2 for Method
of Fixed Charges, shall carry a presumption of reasonableness
and, therefore, shall remain unchanged for the term of this
Agreement, unless changed by amendment in accordance with the
provisions of Section 15.
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6. INTERACTION OF ELECTED OFFICIALS
6.1 Elected Officials' Meeting. MWDOC will hold a semi - annual
meeting for elected representatives of the Member Agencies and a
GSWC officer or the officer's designee in October and April
( "Elected Officials' Meeting ") in addition to any other meetings,
workshops, or assemblies open to those officials. The meetings
shall be chaired by the President of the MWDOC Board and it is the
intent of the Parties that the primary attendees shall be members of
their respective governing bodies. The forum will be used to
discuss:
• MWDOC activities, policies, and budget (including reserves)
• MET activities and policies
• Statewide water resource issues
• Strategies to increase Orange County's water supply
reliability and to minimize Orange County water costs
• Other topics of significant interest to the Orange County
water community
Beginning in March 2011 and each year thereafter, upon
completion of the first DRAFT of the MWDOC Budget for the
upcoming year, MWDOC will formally request comments on the
budget from all 28 Member Agencies, as described in Section 2.2
above. MWDOC will report on the budget comments received from
the Member Agencies at the Elected Officials' Meeting described
herein.
6.2 Public Meetings. The Elected Officials' Meetings shall be noticed
public meetings of MWDOC's Board. Each Member Agency
participating in these meetings shall be responsible for compliance
with the Brown Act by its own legislative body. (Government Code
§ 54950 etseq.)
7. SELECTION OF MET DIRECTORS
7.1 Recommended Appointments by MWDOC Member Agency
Parties.
Commencing with the first vacant MWDOC MET Director position
following the Effective Date, the MWDOC Board will institute and
follow the procedure set forth in this Section 7 for appointing MET
Directors.
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7.1.1 The MWDOC Administrative Code provides that the Board President
shall nominate and the Board shall approve MET Directors.
7.1.2 Under the conditions and procedures established in this Agreement, the
MWDOC Board will delegate limited nominating power to the MWDOC
Member Agencies for two of MWDOC's MET Director positions.
7.1.3 When the first MET Director vacancy occurs following the Effective Date,
the South County Agencies that are Member Agency Parties ( "South
County Parties ") may nominate a candidate of their choosing ( "MET
Candidate ") through a process to which they all agree, directly to the
MWDOC President and Board. In the absence of agreement among
the South County Parties, the nomination(s) shall be determined by a
"one agency, one vote" process among the South County Parties.
Nominations shall be stated in a letter to the MWDOC Board President
signed by authorized elected representatives of the South County
Parties. Once filled, that seat will be designated, pursuant to this
Agreement, as the "South County Seat ".
7.1.4 When the second MET Director vacancy occurs following the Effective
Date, the North County Agencies that are Member Agency Parties
( "North County Parties ") may nominate a MET Candidate of their
choosing, through a process to which they all agree, directly to the
MWDOC President and Board. In the absence of agreement among
the North County Parties, the nomination(s) shall be determined by a
"one agency, one vote" process among the North County Parties.
Nominations shall be stated in a letter to the MWDOC Board President
signed by authorized elected representatives of the North County
Parties. Once filled, that seat will be designated, pursuant to this
Agreement, as the "North County Seat ".
7.2 The MWDOC Board shall consider each nominated MET Candidate seriously,
in good faith and in the spirit of this Agreement and can only reject said MET
Candidate for cause. The remaining MET Director seats shall continue tote
filled pursuant to MWDOC's Administrative Code. MWDOC shall continue its
practice of advising the Member Agencies when a vacancy occurs and soliciting
potential candidates and input from all Member Agencies for filling these seats.
7.3 All MWDOC MET Directors shall serve for an indefinite term
pursuant to the MWDOC Administrative Code; provided, however,
a MWDOC MET Director holding the North County Seat or the
South County Seat may be removed by MWDOC only after
MWDOC has convened an ad hoc committee to review that
MWDOC MET Director's performance and the ad hoc committee
has solicited and considered the input of the respective
nominating area as provided below. If a vacancy occurs in the
North County Seat or the South County Seat, the North or South
County Parties, as established herein, may make subsequent
nominations to fill the vacancy in accordance with Sections 7.1.3
and 7.1.4, as applicable. The MWDOC Board President shall
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consider appointment of an ad hoc committee to review the
performance of MWDOC's MET Directors upon request of any
MWDOC Board Member or Member Agency, or upon the MWDOC
President's own determination. Such review, if any, may be
conducted no more than once annually. If appointed, the ad hoc
committee shall solicit input from the respective nominating areas
on the performance of the North County and South County
nominated MET Directors. Should the North County Parties or
South County Parties deem it appropriate to remove their selected
MET Director, they can make their request for removal to the
MWDOC Board. The MWDOC Board will not unreasonably
withhold action on such request(s).
8. COMPLIANCE WITH MWDOC ADMINISTRATIVE CODE
Any MET Candidate nominated and appointed as provided herein must be
familiar with MWDOC's Administrative Code and express a willingness to comply
with it. This includes, without limitation, meeting the criteria for a MWDOC MET
Director established in Section 1500 of the MWDOC Administrative Code.
9. COMPLIANCE WITH LAW
The nomination and appointment of any MET Candidate, as provided herein,
must comply with applicable statutory and case law.
10. MET DIRECTOR ORANGE COUNTY CAUCUS
MWDOC will schedule and conduct at its offices regular meetings of the MET
Directors representing MET Member Agencies in Orange County. Meetings will
be scheduled at least three (3) times per year to be determined by the Orange
County MET Directors at the first meeting each year. The purpose of the
meetings is to provide special access by all Member Agencies to the MET
Directors representing Orange County.
11. REMEDIES AND ENFORCEMENT
11.1 Remedies in General. Except as set forth below, each Party shall
have all remedies otherwise available to enforce the terms of the
Agreement and to seek remedies for any breach hereof, including
but not limited to the remedies set forth in Sections 11.2.3,11.5 and
11.6 of this Agreement.
11.2 Breach of the Agreement.
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11.2.1 Any material breach or material violation of the Agreement
shall be deemed a default under this Agreement.
11.2.2 In the event of an alleged material breach or material
violation of the Agreement, the Parties agree to work
together in good faith to resolve any disagreement using the
following dispute resolution process:
11.2.2.1 The Party alleging a breach shall notify the
other Parties of the basis for the allegation
and the requested cure for the breach.
11.2.2.2 The alleged breaching Party receiving notice
of breach shall have 15 calendar days to
respond. If the response acknowledges that
a breach has occurred, the breaching Party
shall have 30 days to cure such breach,
provided that if such breach cannot be
reasonably capable of being cured within said
30 -day period, then the breaching Party shall
not be in default of this Agreement provided
that the breaching Party is diligently
continuing to cure such default.
11.2.2.3 If the Party alleging a breach and the alleged
breaching Party disagree with respect to
whether a breach has occurred, they shall
meet and confer in good faith toward a
mutually satisfactory solution. The meet and
confer shall be open to all Parties.
11.2.2.4 If the dispute cannot be resolved through the
meet and confer process within 60 calendar
days after the first meeting, the Party alleging
a breach and the alleged breaching Party,
along with any other Party that wishes to
participate, shall engage in third party
mediation, with the participating Parties to
equally share mediation costs. Said mediation
shall end no later than 90 calendar days after
the completion of the original meet and
confer process. No Party may file a lawsuit
concerning the alleged breach until the
mediation has ended.
11.2.2.5 In the event a lawsuit is filed after completion
of the mediation conceming the alleged
breach, the Parties' rights and obligations
under this Agreement shall continue until one
of three actions occurs: (1) the agreement
continues as drafted; (2) the agreement is
terminated; or (3) an amendment to the
agreement is entered into pursuant to Section
15.
11.2.3 Any Party to this Agreement may, in addition to any other
remedy, seek an order from a court specifically enforcing the
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obligations of the Parties to the Agreement to comply with
this Section 11.2.
11.3 Material Breach in the Event of Certain Activities. The Parties
to this Agreement have mutual interests in avoiding the time,
expense, and uncertainty of either (a) legislative measures that
would affect MWDOC's organizational form or (b) filing an
application with the OCLAFCO for secession of a Party or
detachment of a Party's territory from MWDOC. Consequently, the
Parties to this Agreement agree that "material breach," within the
meaning of Section II.(a) shall include (but not be limited to) the
following activities that any Party hereto may undertake during the
term of this Agreement:
11.3.1 The submission of an application with OCLAFCO to
reorganize or undertake an action that would result in a
Party's secession or the detachment of all or a portion of a
Party's territory, from MWDOC, or would result in any other
material change in governance or structure affecting
MWDOC.
11.3.2 The filing of any written letters or testimony with, or providing
verbal testimony to, any committee or other body of the
State Legislature in support of legislative measures that
would (A) materially affect MWDOC's organizational form or
change the governance of MWDOC, and (B) would result in
secession or detachment of territory from MWDOC by any
Member Agency.
11.4 An action constituting a material breach under Sections 2.2, 4, 5,
6, 7, 10, or 11.3 shall be subject to the dispute resolution provisions
of Section 11.2.2.
11.5 Enforcement. Any Party may enforce compliance by a defaulting
Party with the terms of this Agreement by, among other available
remedies:
11.5.1 Filing a complaint for specific performance;
11.5.2 Filing an action to recover actual damages to which the
notifying Party may be entitled for violation by the defaulting
Party of the terms of this Agreement;
11.5.3 Filing an action to enjoin the violation, on an ex parte basis if
necessary, by temporary or permanent injunction, without
the necessity of proving either actual damages or the
inadequacy of otherwise available legal remedies, or for
other equitable relief;
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11.5.4 Petitioning for a writ of ordinary or administrative mandate
ordering the defaulting Party to cure; and /or
11.5.5 Petitioning for a writ of ordinary or administrative mandate
ordering OCLAFCO not to process an application filed in
contravention of this Agreement.
11.6 Injunctive and Temporary Relief Appropriate. The Parties
acknowledge that breach of this Agreement may not be adequately
remedied by monetary damages and could result in irreparable
harm to the aggrieved Parties. Therefore, injunctive and temporary
relief may be appropriate to ensure compliance with the terms of
this Agreement.
12. TERM OF AGREEMENT
12.1 Effective Date. This Agreement shall be effective upon the date of
execution by MWDOC, which shall execute the Agreement upon
express approval of its Board ( "Effective Date "). MWDOC shall
inform all Parties by e-mail when that event occurs.
12.2 Subsequent Execution. Any Member Agency that executes this
Agreement after the Effective Date shall, upon execution, become a
full Party to the Agreement, with all the rights and obligations set
forth herein.
12.3 Termination Date. This Agreement shall run for a term of five (5)
years from the Effective Date, unless terminated as provided herein.
This agreement may be extended by mutual agreement of all of the
Parties hereto for subsequent term(s) five (5) years, or other period
as mutually agreed to at the time of the extension.
13. OBLIGATIONS OF MEMBER AGENCIES
13.1 No OCLAFCO Application. During the term of this Agreement,
none of the Member Agency Parties shall prepare, hire a
consultant to prepare, or submit an application to OCLAFCO
requesting reorganization or any action that would result in
detachment of any territory from MWDOC or any other change
affecting the governance, structure, or finances of MWDOC, unless
agreed to in writing by MWDOC. In the event that the OCLAFCO
undertakes proceedings, whether in response to an application or
pursuant to its own discretionary powers, that reduces the territory
within the boundaries or affects or changes the governance,
structure or finances of MWDOC, these proceedings shall be
considered a material breach of this Agreement by the Party or
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Parties filing, supporting or in any way furthering the application
except to the extent their actions are required by law.
13.2 No Legislative Activities. During the term of this Agreement,
none of the Member Agency Parties shall pursue, support, or further
any legislative measures that would affect MWDOC's
organizational form, board or staff members, finances, exercise of
powers, or governance or result in detachment of any territory from
MWDOC, unless agreed to in writing by MWDOC.
13.3 Participation in Agreement. During the term of this Agreement,
the Member Agency Parties, and each of them, shall contribute staff
time and resources as required to participate and contribute in good
faith to the activities and changes discussed in this Agreement.
14. OBLIGATIONS OF MWDOC
14.1 No OCLAFCO Application. During the term of this Agreement, MWDOC
shall not prepare, hire a consultant to prepare, or submit an application to
OCLAFCO as described in Paragraph 13.1 relating to the governance, structure,
or finances of MWDOC or any equivalent OCLAFCO application relating to the
governance, structure, or finances of any of its Member Agencies, unless agreed
to in writing by the affected Member Agency.
14.2 No Legislative Activities. During the term of this Agreement,
MWDOC shall not pursue, support, or further any legislative
measures that would affect any Member Agency's organizational
form, board or staff members, finances, exercise of powers, or
governance or result in detachment of any territory from the
Member Agency, unless agreed to in writing by the Member
Agency.
14.3 Participation in Agreement. During the term of this Agreement,
MWDOC shall contribute staff time and resources as required to
participate and contribute in good faith to the activities and changes
discussed in this Agreement.
15. AMENDMENT OF AGREEMENT
15.1 Any amendment, alteration, or variation of any provision of this
Agreement ( "Amendment ") will not be valid unless made in writing
and approved as provided in this Section.
15.2 The Parties acknowledge that the process of obtaining initial
approvals and execution of this Agreement has required a
substantial investment of public resources and time and that the
same process should not be required for subsequent Amendments
to the Agreement that are proposed without objection. For this
reason, Amendments to the Agreement may be made as provided
in this section.
152.1 An Amendment to the Agreement proposed by MWDOC
shall be distributed by MWDOC to all Parties signing this
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Agreement for a 60 -day review period.
15.2.2 Any and all comments and objections to the Amendment
shall be provided by the Parties to MWDOC and the
remaining Member Agency Parties before the conclusion of
the 60 -day review period.
15.2.3 If no objections are received by the conclusion of the 60 -day review period,
the Amendment shall be valid and binding on the Parties.
Upon this occurrence, MWDOC will provide a copy of the
Amendment to all Parties.
15.2.4 If any objections are received within the review period,
MWDOC may submit the proposed Amendment to the
Parties for signatures, and if the proposed Amendment is
executed by MWDOC and all of the Member Agency
Parties, the Amendment shall be valid and binding on the
Parties. Upon this occurrence, MWDOC will provide a copy
of the Amendment to all Parties.
15.3 An Amendment to the Agreement proposed by a Party other than
MWDOC shall be submitted in writing to MWDOC. Upon receipt of
the proposed Amendment, MWDOC shall then follow the
procedures set forth in section 15.2 above.
16. NO ADMISSION BY ANY PARTY
The Parties acknowledge that statements made by the Parties during
negotiation of this Agreement, statements made in this Agreement, and all
rights and obligations that arise from this Agreement were and are in furtherance
of the goal of resolving issues between the Parties without the need for
administrative or judicial proceedings, including possible OCLAFCO
proceedings and litigation. Neither any statement made during negotiation of
this Agreement nor any provision of the Agreement itself shall constitute an
admission by a Party or be offered as evidence or included in any record of
proceedings in any future administrative or judicial proceeding.
17. GENERAL PROVISIONS
17.1 All Parties are deemed to have participated in the drafting of this
Agreement, and any rule of law (including, but not limited to, Civil
Code Section 1654) or legal principle that would require
interpretation of this Agreement against the drafter hereto shall not
apply and is waived by the Parties. This Agreement may be signed
in multiple counterparts for convenience of the Parties.
17.2 This Agreement will inure to the benefit of and be binding upon all
Parties and their respective successors and assigns.
17.3 This Agreement will be deemed a contract made under the laws of
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the State of California and for all purposes will be interpreted in
accordance with such laws. The Parties hereby agree and consent
to the exclusive jurisdiction of the courts of the State of California.
17.4 This Agreement constitutes the entire agreement among the
Parties. This Agreement supersedes any and all other
understandings or agreements, either oral or in writing, among the
Parties with respect to the subject matter hereof and contains all of
the covenants and agreements among them with respect to said
matters; and each Party acknowledges that no representation,
inducement, promise of agreement, oral or otherwise, has been
made by any other Party or anyone acting on behalf of any other
Party that is not embodied herein.
17.5 If any action at law or equity, including any action for writ of
mandate or injunctive relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing Party(ies) shall be
entitled to its or their reasonable attorney's fees and costs as
against the Party(ies) that did not prevail in that action or
proceeding.
17.6 All activities undertaken pursuant to this Agreement must be in
compliance with all applicable state and federal laws and
regulations.
17.7 In the event one or more of the provisions contained in this
Agreement is held invalid, illegal or unenforceable by any court of
competent jurisdiction, such portion shall be deemed severed from
this Agreement and the remaining parts of this Agreement shall
remain in full force and effect as though such invalid, illegal, or
unenforceable portion had never been a part of this Agreement.
17.8 All communications set forth in this Agreement shall be in writing
and transmitted to and among the Parties in a manner that is
consistent with the custom and practice of MWDOC and its
Member Agencies then in effect. Any computations of time shall
start from 5:00 PM on the day of receipt.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the respective dates shown below.
Mayor, City of San Clemente Date
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Mayor, City of San Juan Capistrano Date
President, El Toro Water District Date
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President, Irvine Ranch Water District Date
President, Laguna Beach County Water District Date
President, Municipal Water District of Date
Orange County
President, Moulton Niguel Water District Date
President, Santa Margarita Water District Date
President, South Coast Water District Date
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President, Trabuco Canyon Water District Date
Mayor, City of Brea Date
Mayor, City of Buena Park Date
Mayor, City of Fountain Valley Date
Mayor, City of Garden Grove Date
Mayor, City of Huntington Beach Date
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Mayor, City of La Habra Date
Mayor, City of La Palma Date
Mayor, City of Newport Beach Date
Mayor, City of Orange Date
Mayor, City of Seal Beach Date
Mayor, City of Tustin Date
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Mayor, City of Westminster Date
President, East Orange County Water District Date
President, Emerald Bay Service District Date
Officer, Golden State Water Company Date
President, Mesa Consolidated Water District Date
President, Orange County Water District Date
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President, Serrano Water District Date
President, Yorba Linda Water District Date
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Table A - MWDOC Breakdown of Services /Activities /Costs
' 5� L � Y :.P oice Service's; • - Ovethead.Costs
Board Compensation & Benefit Water Use Efficiency Salary charged to overhead
Retiree Costs • Residential clothes washers function (vacation, sick leave
and holidays)
Legal Costs • Sprinkler nozzles
Personnel development
Board Elections • SmarTimers
Legal costs charged to
Accounting and General Admin • CII Plumbing Fixtures overhead function
MET Renresentation • Synthetic Turf Employee benefits
• MET Director Support • • Hotel Program Personnel/staff development
• • MET policy analysis, programs and special • Industrial Program Information technology
projects
• Landscape Certification Conference employee
• MET operations, water rates and accounting Program Travel & Accommodations
Staff time for MWDOC's Water Use Efficiency Includes marketing materials for employee
Programs Manager WUE activities, staff time, Automotive/Mileage/Toll
Governmental Affairs overhead and grant funds (MET Office maintenance
• In -house staff for legislative info and other)
Governmental Relations Rents & Leases
• WACO, ISDOC and other support Office supplies
• Federal lobbyist for countywide funding • Any project or program
legislative or grant support Insurance expenses
• State lobbyist for countywide legislative, grant on choice activities — Utilities — telephone
funding and policy access Townsend Public Affairs Miscellaneous expenses
• Local lobbyist for Board of Supervisors Specific Programs Professional fees for overhead
Public Affairs • School program activities
• Coordination with MET, other regional and local • South Orange Coastal Software support
retailers Ocean Desal Project Computers/software
• Basic communications functions -media outreach o, Federal lobbying
and inquiries, water information and messaging, for SOCODP —
MWDOC website Barker
• MWDOC newsletter (e- currents) o Federal lobbying
• Countywide surveys as appropriate for SOCODP —
• Countywide water awareness in coordination with Townsend
retail agencies • Support for Poseidon Desal
Research — support for Center for Demographic Project
Research • Other Project specific
Water Sunnly Planning studies
• Coordination among agencies • Non - countywide issue
• Water use tracking and projections studies
• Water supply analysis
• Regulatory compliance issues
• Water trends analysis
• Countywide studies
Water Emergency Response Organization of Orange
County (WEROC) — MWDOC contribution
24