REPORT TO THE CITY COUNCIL October 11, 2018 FROM: MICHAEL CARBAJAL, Director Department of Public Utilities SUBJECT ..Title Approve Amendment No. 4 to the Copper River Ranch Water Supply Implementation Agreement approved by Fresno City Council on November 17, 2016 (Council District 6) ..Body RECOMMENDATION The Administration recommends the City Council approve Amendment No. 4 to the Copper River Ranch Water Supply Implementation Agreement (Agreement) for the convenience of the Developers to address defaults and failures to timely fulfill Agreement obligations by the Developer of the Copper River Ranch Development (Copper River or the Project Area). EXECUTIVE SUMMARY The Fresno City Council approved the Agreement on November 17, 2016, whereby Developers are to provide 4,900 GPM of firm water supply capacity within the Project Area in accordance with a mutually-agreed upon project completion schedule. The Agreement also includes a payment schedule for Developers' fair share contribution (Development Fee) related to the City's Northeast Surface Water Treatment Facility (NESWTF). The Agreement has previously been amended three times for the convenience of the Developers to extend deadlines set forth therein. The current amendment request is for a fourth extension so Developer's deadline to expand PS 330 and to construct PS 370 and the Disposal Bypass Line may be extended by three months to December 1, 2018. The Administration recommends City Council approve the amendment. BACKGROUND Pursuant to the Agreement, Developers are obligated to provide water for the Copper River Ranch Development via the construction of new wells, pay a fair share fee for the NESWTF, and construct a Disposal Bypass Line - all to occur based upon an agreed timeline. Developers have previously defaulted on agreed upon deadlines three times. In each instance the City has provided deadline extensions in exchange for Developer accelerating its payment for the NESWTF fee. The NESWTF fee is now paid in full and developer seeks a fourth deadline extension of three months to expand PS 330 and to construct PS 370 and the Disposal Bypass Line. For the convenience of the Developer, the City agrees to modify the implementation schedule with Amendment No. 4 to the Water Supply Implementation Agreement as follows: Milestone Requirement Originally Agreed Upon Completion Date New Required Completion Date Increase Capacity of PS 330 from 1,200 gpm to 1,800 gpm March 1, 2017 December 1, 2018 New PS 369 (minimum capacity 1,000 gpm) March 1, 2017 Complete New PS 370 (minimum capacity 500 gpm) June 30, 2017 December 1, 2018 New PS 371 (minimum capacity 500 gpm) December 1, 2018 December 1, 2019 Mn Discharge Pipeline for PS 330, 369, 370, and 371 March 1, 2017 December 1, 2018 1st Payment Developer Fee Obligation December 17, 2017 Paid 2nd Payment Developer Fee Obligation June 30, 2017 Paid 3rd Payment (1st Installment) Developer Fee Obligation December 1, 2018 Paid 3rd Payment (2nd Installment) Developer Fee Obligation December 1, 2018 Paid The City's Administration has authorized the continued issuance of certificates of occupancy for lots within the Project Area until such time that the Fresno City Council considers Amendment No. 4. Should the Fresno City Council not approve Amendment No. 4 to the Agreement, the Administration will discontinue issuing certificates of occupancy in the Project Area effective 8:00 am on Friday, October 19, 2018. All other terms and conditions of the Agreement shall remain in effect. By entering into Amendment No. 4, the Developer acknowledged and agreed to limit the Equivalent Dwelling Units (EDUs) Allowance and the City shall not issue Certificates of Occupancy within the Project Area beyond 2,209 EDUs, which is 60 percent of the 3,682 EDUs authorized within the Project Area. Upon expanding PS 330 and constructing PS 370 and the Disposal Bypass Line, the Developer's EDU Allowance shall be increased to 2,577 EDUs, and City may issue Certificates of Occupancy within the Project Area up to a maximum of 2,577 EDUs, which represent 70 percent of the total EDUs authorized for the Project Area. Upon construction of PS 371, Developer may utilize, and City may issue Certificates of Occupancy for, up to 3,682 EDUs, which represent 100 percent of the total EDUs authorized for the Project Area. Further, the City shall at all times retain the right to cease issuing building permits and certificates of occupancy for any lots within the Project Area if another default condition occurs. Amendment No. 4 to the Agreement has been approved as to form by the City Attorney. ENVIRONMENTAL FINDINGS Pursuant to CEQA Guidelines section 15378(b)(5), this is not a project for the purpose of CEQA, as this is an organizational or administrative action of the government to enforce an existing obligation, and will not result in a direct or indirect physical change in the environment. LOCAL PREFERENCE Local preference was not considered because this Agreement regarding water supply infrastructure development does not include a bid or award of a construction or services contract. FISCAL IMPACT There is no financial obligation for the General Fund for this Agreement, and entering into this Amendment will not impact the General Fund. Attachment: Fourth Amendment to the Copper River Ranch Water Supply Implementation Agreement