REPORT TO THE CITY COUNCIL June 16, 2016 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities BY: MICHAEL CARBAJAL, Division Manager Department of Public Utilities - Water Division SUBJECT ..Title Approve a License Agreement between the Fresno Irrigation District (District) and the City of Fresno with a one-time fee of $5,000 for the construction, maintenance, and operation of the Kings River Pipeline turnout/diversion facility. (County) ..Body RECOMMENDATION Staff recommends that the City Council approve a License Agreement (License) between the Fresno Irrigation District (District) and the City of Fresno (City) with a one-time fee of $5,000 for the construction, maintenance, and operation of the Kings River Pipeline turnout/diversion facility on the District's real property adjacent to the Fresno No. 3 Canal; and authorize the Director of Public Utilities or designee to sign the Agreement on behalf of the City of Fresno. EXECUTIVE SUMMARY On February 26, 2015, the City Council adopted a five-year water utility rate plan to finance the construction of a five-year water capital plan totaling approximately $429 million. The five-year capital plan included the construction of the Kings River Pipeline (Project) to allow the City to more effectively use its existing Kings River water allocations by delivering water directly to the Southeast Surface Water Treatment Facility (SESWTF). Design and bidding of the Project is complete, and the construction contract was awarded to Garney Pacific, Inc., on May 12, 2016. Execution of the License is necessary for the construction, maintenance, and operation of the Kings River Pipeline turnout/diversion facility on the District's real property adjacent to the Fresno No. 3 Canal. BACKGROUND On February 26, 2015, the City Council adopted a five-year water utility rate plan to finance the construction of a five-year water capital plan totaling approximately $429 million. The five-year capital plan included the construction of the Project. The Project is a 13-mile 72-inch diameter pipeline that will convey raw water for treatment from a turnout/diversion on the Fresno Canal No. 3 to the SESWTF. The turnout/diversion facility will be located on the District's real property near the intersection of Trimmer Springs Road and the District's Fresno Canal No. 3 about 3,800 feet downstream of the Fresno Canal No.3 headgates on the Kings River. Execution of the License is necessary for the construction, maintenance, and operation of the Kings River Pipeline turnout/diversion facility on the District's real property adjacent to the Fresno No. 3 Canal. The License has been reviewed as to form by the City Attorney's Office. ENVIRONMENTAL FINDINGS An Environmental Impact Report (EIR) was adopted by the Council on June 12, 2014, for this Project. An analysis has been performed pursuant CEQA Guidelines �15162 to determine whether subsequent environmental review is required for the project. Based upon this analysis the following findings are made to support the determination that no subsequent environmental review is required: 1. No substantial changes are proposed in the project which will require major revisions of the previous Mitigated Negative Declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. In this case there are no changes to the project. 2. No substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous Mitigated Negative Declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. In this case, the proposed pipeline alignment has not changed. 3. There is no new information, which was not known and could not have been known at the time of the previous Mitigated Negative Declaration that the project will have significant effect not discussed in the Mitigated Negative Declaration. Furthermore, since a EIR was previously adopted for this Project, the considerations set forth in CEQA Guidelines �15162(a)(3)(C) and (D), related to the adequacy and feasibility of previously adopted mitigation measures, are not applicable. Based upon these findings, it has been determined that no further environmental documentation is required for this Project. LOCAL PREFERENCE Local preference is not applicable because this License is not an award of a contract. FISCAL IMPACT There is no impact to the General Fund. License-related costs and the costs of the turnout/diversion facility will be funded by the State Revolving Fund Low Interest Loan through the State Water Resources Control Board as part of the construction of the Project. Appropriations are included in Water Division's FY2016 Capital Improvement Program adopted budget within the State Low Interest Loan Kings River Pipeline Fund (40161). The loan repayments for the low interest loan were included in the water rate model used to create the five-year utility rate plan that was adopted by the City Council on February 26, 2015. Attachment: License Agreement