REPORT TO THE CITY COUNCIL January 28, 2016 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities BY: MICHAEL CARBAJAL, Division Manager Department of Public Utilities - Water Division SUBJECT ..Title Approval of a License Agreement (LA) between the U.S. Bureau of Reclamation (USBR) and the City of Fresno (City) for installation, operation and maintenance of a turnout/diversion facility associated with the Friant-Kern Canal Raw Water Pipeline, to be constructed in the USBR's Friant-Kern Canal. ..Body RECOMMENDATIONS Staff recommends that City Council: 1. Approve the License Agreement (LA) between the USBR and the City for installation, operation and maintenance of a turnout/diversion facility associated with the Friant-Kern Canal Raw Water Pipeline Project, to be constructed in the USBR's Friant-Kern Canal. 2. Authorize the Director of Public Utilities, or his designee, to sign all documents on behalf of the City. EXECUTIVE SUMMARY The Department of Public Utilities, Water Division, is finalizing the permitting of the Friant-Kern Raw Water Pipeline Project to deliver raw water from the Friant-Kern Canal to the NESWTF. With bidding completed, Project award in January 2016, and agency permitting nearing completion, execution of the LA will be necessary prior to start of construction. BACKGROUND Presently, the City's contract with the United States Bureau of Reclamation (USBR) for Central Valley Project (CVP) surface water, travels nearly 55 miles in open canals from Friant Dam (Millerton Lake) to the NESWTF. The proposed Project consists of the construction and operation of a 5.6-mile raw water pipeline. The new pipeline reroutes the CVP water directly to the NESWTF and will eliminate nearly 47 miles from the conveyance distance. The Project will convey water in an enclosed system and greatly reduce the threat to water quality, in otherwise open canals which are exposed to contamination from environmental debris, and accidental or malicious acts. The pipeline will be constructed across numerous properties in unincorporated Fresno County and connected to the existing one-mile long segment of pipeline constructed in 2007. Additional benefits of the project include reduced power consumption, chemical utilization, and increased operational reliability at the NESWTF. ENVIRONMENTAL FINDINGS An initial study and Mitigated Negative Declaration was prepared and adopted on June 14, 2012 for this project. A Notice of Determination was subsequently filed with the Fresno County Clerk's Office on June 19, 2012. The City of Fresno Raw Water Pipeline Project Initial Study was prepared in August of 2011, providing an analysis of the proposed alignments and the alternative pipeline alignments. An analysis has been performed pursuant to California Environmental Quality Act ("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 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. Additionally, the City has been working with several Federal agencies to meet the requirements of the National Environmental Policy Act ("NEPA"). The USFWS and the Army Corp of Engineers approved the Biological Opinion in November, 2015 identifying the mitigations for the effect this Project has on endangered plants and wildlife. Following the USFWS's approval of the BO and endangered species mitigations, the BO was submitted to the USBR for their review and acceptance. Once accepted, the USBR will issue a Finding of No Significant Impact ("FONSI") and give authorization for the City to begin construction of the Friant-Kern Raw Water Pipeline Project. LOCAL PREFERENCE Local Preference was not considered because this action does not include a bid or an award of a City construction or services contract. FISCAL IMPACT Approving execution of this LA will not impact the General Fund. Although there are no direct costs specifically associated with execution of this LA, appropriations included in the Water Division's FY2016 Capital Improvement Program adopted budget within the State Low Interest Loan FKCP Fund (40184). 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 City Council on February 26, 2015. Attachment: License Agreement