REPORT TO THE CITY COUNCIL January 29, 2015 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities BY: MICHAEL CARBAJAL, Chief Engineering Technician Department of Public Utilities - Water Division SUBJECT ..Title Approve the First Amendment to the Agreement to reimburse City of Clovis for Phase II of the southern water main interconnection ..Body RECOMMENDATION It is recommended that City Council approve the First Amendment to the Agreement to Reimburse City of Clovis for Phase II of the Southern Water Main Interconnection to extend time for construction. EXECUTIVE SUMMARY On May 15, 2007, Council approved the Fresno-Clovis Water System Interconnection Agreement for interconnection of municipal potable water systems, allowing Fresno and Clovis to exchange potable water through two connection points: (i) the northern connection at East Behymer Avenue and North Willow Avenue, and (ii) the southern connection at North Leonard Avenue and the Gould Canal. The first connection is the southern connection which will help meet peak hour demands, reduce the reliance and impact on groundwater and provide temporary service and on-going emergency back-up in Southeast Fresno. On June 10, 2008, Council approved a cost reimbursement agreement with the City of Clovis (Clovis) for the construction of Phase II of the Southern Water Main Interconnection. The agreement authorized Fresno to reimburse Clovis actual expenditures, including contingencies, not to exceed $1,152,600 for all engineering, construction management, inspection and construction costs. Following the slowdown in development activity that occurred after 2008, the project was delayed until development activity and associated water demands necessitated the need for the connection. Due to recent development activity that has occurred within Southeast Fresno, staff now recommends extending the time to complete the construction of Phase II. Construction of Phase I by Clovis and Phase III by Fresno have been completed. BACKGROUND As development continues to fill the vacant land between the Cities of Clovis and Fresno there is an intrinsic benefit to constructing infrastructure that has the capability for supporting both communities. A feasibility study conducted by Provost and Pritchard was completed in November of 2004, which evaluated and identified the best water system interconnection alternatives, Southeast Fresno and Northwest Clovis. On March 15, 2005, Council authorized a cost reimbursement agreement for Phase I of the Southern Water Main Interconnection with Clovis which was completed later that year (2005). Phase II will connect to the termination point of Phase I, the intersection of Ashlan and Leonard Avenues and proceed south 3,200 feet along Leonard Avenue and cross under the Gould Canal. On June 10, 2008, Council approved a cost reimbursement agreement with the City of Clovis for the construction of Phase II of the Southern Water Main Interconnection. The agreement authorized Fresno to reimburse Clovis actual expenditures, including contingencies, not to exceed $1,152,600 for all engineering, construction management, inspection and construction costs. Following the slowdown in development activity that occurred after 2008, the project was delayed until development activity and associated water demands necessitated the need for the connection. Due to recent development activity that has occurred within Southeast Fresno, staff now recommends amending the reimbursement agreement to extend the time to complete the construction of Phase II. Phase III continues the pipeline in Leonard Avenue to Shields Avenue, turning west until connecting to the Fresno water system at Locan Avenue. Phase III of the project was constructed in 2009 as a condition of development for Tract 5717. Of equal importance is the actual treatment and delivery of water. On May 15, 2007, Council approved the Fresno-Clovis Water System Interconnection Agreement facilitating the transportation of water from City to City. For the Southern Water Main Interconnection, the process will start with the delivery of a portion of Fresno's surface water to the Clovis surface water treatment facility. There, the water will be treated and delivered to Southeast Fresno through the Southern Water Main Interconnection. At that connection a water meter will track the volume of water delivered and Fresno will reimburse Clovis for the actual cost of treatment and delivery. The Fresno-Clovis Water System Interconnection Agreement outlines three water delivery conditions. The first water delivery condition provides a maximum amount of water during peak demands periods, one hour in the morning and one hour in the evening. The peak hour delivery of water to Southeast Fresno will range in flow from 3,000 gpm when the connection is completed and incrementally declining to 2,000 gpm during the following six years. The second water delivery condition is based on effective water resource management. Fresno may choose to maximize the direct treatment of surface water verses using groundwater. Therefore, upon request by Fresno and if Clovis has the capacity within their system, additional surface water can be treated and delivered in lieu of Fresno using groundwater. The third water delivery condition is for mutual aid providing short term service as a result of maintenance operations or emergencies. The first amendment to the agreement to reimburse City of Clovis for Phase II of the Southern Water Main Interconnection has been reviewed by the City Attorney's Office and approved as to form. Upon approval, the amendment to extend time for construction will be signed by the Director of Public Utilities. ENVIRONMENTAL FINDINGS An Initial Study and Mitigated Negative Declaration was prepared and adopted on May 15, 2007, for this project. An amendment to the Initial Study and Mitigated Negative Declaration was prepared and adopted on June 24, 2008. The purpose of the project is to develop an interconnection between the Fresno and Clovis municipal potable water systems facilitating the transportation of water from City to City. 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. Based upon these findings, it has been determined that no further environmental documentation is required for this project. LOCAL PREFERENCE Local Preference was not considered because this action is an amendment of a reimbursement agreement. FISCAL IMPACT Approval of the amendment will not impact the General Fund. The Amendment is a no fee amendment. Funding to reimburse Clovis for the construction of Phase II of the Southern Water Main Interconnection was encumbered during a prior fiscal year. Attachments: First Amendment to Reimburse Agreement Reimbursement Agreement