REPORT TO THE CITY COUNCIL October 19, 2017 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities THROUGH: MICHAEL CARBAJAL, Planning Manager Department of Public Utilities - Utilities Planning & Engineering BY: DEJAN PAVIC, Professional Engineer Department of Public Utilities - Utilities Planning & Engineering SUBJECT ..Title Approve Memorandum of Understanding for On-site Improvements to replace potable water pipes and appurtenances at the Orange Center School, facilitating connection to City of Fresno's water distribution system to provide reliable water to the disadvantaged community (Fresno County; City of Fresno Sphere of Influence). ..Body RECOMMENDATION Staff recommends that City Council approve the attached Memorandum of Understanding (MOU) for on-site improvements at the Orange Center School District (District) to establish a framework for the District to pay for on-site improvements at Orange Center School (OCS). EXECUTIVE SUMMARY This MOU will establish a framework for the District to pay for the OCS on-site improvements including replacing potable water pipes and appurtenances; also complying with the Americans with Disability Act (ADA). The State Water Resources Control Board (SWRCB) has agreed to allow the City to act as a funding pass through to provide the District the funding to complete the Project. BACKGROUND On December 17, 2015, Council approved acceptance of a $2,932,600 State Revolving Fund (SRF) Low Interest Loan through the SWRCB for construction of the pipeline project to connect OCS to the City of Fresno's water distribution system (Project), thereby providing reliable potable water to a disadvantaged community within the City's Sphere of Influence which is experiencing water quality and quantity issues. This Project is fully funded through a SRF low interest loan (at zero percent (0%) interest with principal forgiveness) from the SWRCB. The off-site portion of the Project (14-inch and 16-inch diameter water mains in East, Central, and Cherry Avenues) has been completed in the past several months. This MOU will establish a framework for the District to pay for the OCS on-site improvements including replacing potable water pipes and appurtenances; also complying with the ADA. On September 13, 2017, the District approved the MOU and a contract with a consultant to complete the design for the on-site improvements and to act as the District's project manager through the completion of the on-site component of the Project. The MOU has been approved as to form by the City Attorney's Office. Council adoption of the MOU will enable the District to proceed with the OCS on-site improvements utilizing previously approved SWRCB funding. ENVIRONMENTAL FINDINGS A Mitigated Negative Declaration (MND) EA No. 14-013 was adopted by the Council on July 30, 2015, for this Project. An analysis has been performed pursuant to CEQA Guidelines �15162 to determine whether subsequent environmental review is required for the Project. Based on 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 MND due to the involvement of new significant environmental effects, or a substantial increase in the severity of previously identified significant effects. 2. No substantial changes occur with respect to the circumstances under which the Project is undertaken which will require major revisions of the previous MND due to the involvement of new significant environmental effects, or a substantial increase in the severity of previously identified significant effects. 3. There is no new information which was not known or could not have been known at the time of the previous MND that the Project will have significant effects not discussed in the MND. Furthermore, since an MND 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 was not implemented because this MOU is not a bid or an award of a construction contract. FISCAL IMPACT There is no impact to the General Fund or Water Enterprise Fund debt service obligations. No costs will be borne by the City's water utility rate payers for this project. As the school is a severely disadvantaged community, the SWRCB is providing funding at zero percent (0%) interest with principal forgiveness. This funding mechanism essentially provides project construction funding in the form of a grant. For the on-site portion of the Project the City will act as a funding pass through to provide the District the funding to complete the Project. Attachments: Memorandum of Understanding for On-site Improvements at Orange Center School State Revolving Fund Loan No. 1000276-001C