REPORT TO THE CITY COUNCIL July 20, 2017 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities THROUGH: BUD TICKEL, Water Systems Manager Department of Public Utilities - Water Division BY: HENRY C. McLAUGHLIN, Business Manager Department of Public Utilities - Water Division SUBJECT ..Title ***RESOLUTION - 60th Amendment to the Annual Appropriation Resolution (AAR) No. 2016-118 to appropriate $500,000 within the UGM Wellhead Treatment Area 101S for capital improvement project costs related to mitigating water quality issues (Council Districts 2 and 6) (Requires 5 affirmative votes) ..Body RECOMMENDATION Staff recommends that City Council approve the 60th Amendment to the AAR No. 2016-118. EXECUTIVE SUMMARY Through the Urban Growth Management (UGM) process, water wellhead treatment area funds have been established to receive and disburse developer contributions for the construction of treatment facilities at water wells in developing areas of the City, including 101S, which is located in Northeast Fresno. City staff is requesting this appropriation to fund wellhead treatment improvements in UGM 101S to ensure that the City continues to maintain compliance with state and federal drinking water quality standards. The improvements will include, but not be limited to, chemical feed systems, water quality monitoring instruments, and water quality treatment systems. BACKGROUND The UGM process, codified in the Fresno Municipal Code, is intended to sustain the orderly development of land and infrastructure in the growth areas of the City. It has been a long-standing City policy that growth should pay for the necessary public utilities required for development and existing rate payers are not to subsidize these facilities. The Fresno Municipal Code (FMC) states that the City shall be responsible for construction of well head treatment facilities in a manner which will supply water meeting safe drinking water standards to all properties developed as an orderly extension of existing development. The cost of the well head treatment shall be over and above all water well costs and shall include all costs for the well head treatment including, but not limited to, site acquisition, required water testing, pumps, motors, tanks, filtering equipment and materials, electrical service, noise suppression facilities, landscaping, site improvement, financing, engineering and inspection. The cost of the well head treatment facilities shall also include any other appropriate requirement of any conditional use or special permit requirement to meet state or federal drinking water quality standards. City staff is requesting this appropriation to fund wellhead treatment improvements in UGM 101S to ensure that the City continues to maintain compliance with state and federal drinking water quality standards. The improvements will include, but not be limited to, chemical feed systems, water quality monitoring instruments, and water quality treatment systems. A total of $500,000 is requested for FY2017. Additional funding will be requested in future fiscal year budgets. ENVIRONMENTAL FINDINGS Adoption of this amendment to the AAR Amendment is not a "project" within the meaning of Public Resources Code Section 21803 (CEQA Guidelines � 15378) because the organizational and administrative activities as identified in the action will not result in direct or indirect physical changes in the environment. LOCAL PREFERENCE Not implemented because this item does not include a construction or services contract. FISCAL IMPACT There is no impact to the General Fund or the Water Enterprise Fund. No costs will be borne by the City's water utility rate payers. All costs associated with these projects will be funded by existing UGM well development fees collected in the 101S Water Supply Area. Attachment: 60th Amendment to the Annual Appropriation Resolution No. 2016-118