TO: LINDA REICH, CITY MANAGER
FROM: HYE JIN LEE, PE, DIRECTOR OF PUBLIC WORKS
SUBJECT
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Amendment to the Reimbursement Agreement with Inland Empire Utilities Agency (IEUA) for the Operations and Maintenance Costs of the Preserve Sewer Lift Station for a Five-Year Term in the total amount of $898,000.
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RECOMMENDATION
Approve an Amendment to the Reimbursement Agreement with Inland Empire Utilities Agency (IEUA) for the operations and maintenance costs of The Preserve Sewer Lift Station for a five-year total amount of $898,000; and authorize the City Manager to execute the necessary documents on behalf of the City.
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FISCAL IMPACT
There are sufficient funds in the FY 2024-25 Mid-Term budget for this reimbursement agreement to IEUA. However, the City will need to allocate funds in the subsequent fiscal years to reimburse IEUA in accordance with the five-year budget reimbursement schedule outlined in the Amendment. IEUA has established a budget for the five-year term, during which the City will continue to reimburse IEUA for full operations and maintenance costs in the final years of the Agency’s oversight. The costs to operate and maintain the Preserve Sewer Lift Station are covered by the properties that are subject to the City’s sewer rates approved by the City Council Resolution No. 2020-045 (attached). These costs, based on a comprehensive analysis, will increase by approximately five percent annually from years two through five to cover rising labor, material, and equipment expenses. The five-year reimbursement schedule is identified as follows:
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IEUA Sewer Lift Station Preserve Five-Year Budget & Reimbursement Schedule - Fund 531 |
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Time Period |
Reimbursement Amount |
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Year 1: July 2024 - June 2025 |
$163,000.00 |
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Year 2: July 2025 - June 2026 |
$171,000.00 |
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Year 3: July 2026 - June 2027 |
$179,000.00 |
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Year 4: July 2027 - June 2028 |
$188,000.00 |
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Year 5: July 2028 - June 2029 |
$197,000.00 |
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Total 5-Year Reimbursement Amount to IEUA* |
$898,000.00 |
*Note: An annual budget review will take place between October and February to collaborate and determine if any changes are deemed necessary.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above furthers the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Superior Customer Service
• Responsible Long-Range Planning
• Public Service Excellence through Internal and External Partnerships
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Revenue: Click or tap here to enter text. |
Expenditure: 5317345-43650 |
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Transfer In: Click or tap here to enter text. |
Transfer Out: Click or tap here to enter text. |
BACKGROUND
Per the City’s Sewer Master Plan, a Sewer Lift Station was constructed in the Preserve, northeast of the Prado Lake off Johnson Avenue inside Prado Park. This facility collects and conveys sewer flows that are gravity-fed from the Preserve and then pumped to IEUA’s Kimball Interceptor which delivers flows to IEUA’s Regional Plant 5 for treatment and processing. On July 17, 2018, the City Council approved a Reimbursement Agreement with IEUA for the operation and maintenance costs of the Preserve Sewer Lift Station due to the City staff’s limited expertise in operating and maintaining large pumping facilities. Since the completion of construction in 2018, IEUA has assumed full operational and maintenance responsibilities, including day-to-day operations, non-routine repairs, and emergency services.
Since operations began at the facility, the City has reimbursed IEUA for complete operational and maintenance costs. The table below shows the total reimbursement to-date and total reimbursement amount to IEUA upon completion of the Agreement:
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IEUA Sewer Lift Station Preserve Reimbursement - Fund 531 |
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Fiscal Year |
Reimbursement Amount |
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Fiscal Year 2018 - 2019 |
$49,262.60 |
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Fiscal Year 2019 - 2020 |
$46,476.14 |
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Fiscal Year 2020 - 2021 |
$72,577.30 |
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Fiscal Year 2021 - 2022 |
$73,175.56 |
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Fiscal Year 2022 - 2023 |
$23,442.35 |
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Fiscal Year 2023 - 2024 |
$113,789.16 |
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To-Date Total Reimbursement to IEUA |
$378,723.11 |
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Total 5-Year Reimbursement Amount to IEUA |
$898,000.00 |
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Total Reimbursement Upon Completion of Reimbursement Agreement |
$1,276,723.11 |
Although IEUA has been overseeing these responsibilities, both the City and IEUA have agreed that, as the facility is City-owned, the City is to assume full responsibility. Both agencies determined that a span of five years would be sufficient time for the City to assume responsibilities. To facilitate the transition, an Amendment to the existing Reimbursement Agreement with IEUA is necessary to adjust the term and provide for the transfer of operational and maintenance responsibilities of the Preserve Sewer Lift Station.
ISSUES/ANALYSIS
The proposed Amendment stipulates that starting July 1, 2029, IEUA will transfer the maintenance and operational duties and responsibilities to the City of Chino. The IEUA’s Board of Directors’ strategic plan and goal is to return to IEUA’s core duties and responsibilities which are to provide regional collection and treatment of wastewater. Therefore, one of the initiatives is to transfer the operations of a sewer lift station that serves the Preserve Community to the City of Chino. The Preserve Community is the City of Chino’s residents and wastewater collection customers.
To ensure a smooth transition, IEUA and the City will collaborate over the next five years to develop and implement a comprehensive Transfer of Responsibility Plan (“Transition Plan”), ensuring no disruption to the facility’s operations. This plan will allow City staff to work alongside IEUA operators to acquire the necessary knowledge and skills to independently manage and operate the lift station facility. Key components of the plan will include, but not be limited to, Operator Rounds Standard Operating Procedures (“SOPS”) and Templates, Process Control Narratives, Operation and Maintenance Records, Preventative Maintenance Plans, Vendor and Contractor Information, and Supervisory Control and Data Acquisition (“SCADA”) Controls Training and Materials.
While the reimbursement amount covers the next five years, it is important to note that following the agreement’s term, the City will assume indefinite responsibility for the facility. Currently, the Public Works Wastewater Division staff handle a wide range of tasks, including sewer main line repairs, sewer lateral repairs, catch basin inspections and cleaning, storm drain inspections and cleaning, storm drain main lines, marking underground service alerts, maintains the Benson and Bickmore Lift Stations, and provides as-needed related services. In addition to the new operational responsibilities for the Preserve Lift Station, in the next five years, Wastewater Division staff will also be responsible for implementing City-wide trash capture and removal as part of the MS4 permit requirements. The additional duties include cleaning/vacuuming over 1,000 catch basins, several regional drainage outfall trash capture locations, CCTV inspecting and cleaning storm drains, sewer mains, and sewer laterals. As such, staffing levels must be increased with the hiring of two Wastewater staff members in advance of the end of the agreement term to ensure the City can effectively manage the additional responsibilities.
Over the next five years, the City of Chino and IEUA will collaborate on a smooth transition of knowledge, information materials, equipment, software, training, services, and any other needed items for continual service of the Preserve Lift Station.
Staff recommends that the City Council approve the First Amendment for the Reimbursement of Operations and Maintenance Costs of the Preserve Sewer Lift Station between the City of Chino and IEUA with a five-year term. In addition, the City Council also acknowledges that this Amendment will serve as a transition period to establish a Transition Plan for the City to assume full control and responsibility of the Preserve Sewer Lift Station from IEUA once the Agreement concludes and a Transfer of Responsibility Plan will be implemented to ensure a smooth transition and the City’s success in managing the facility independently.
Attachments: Amendment Reimbursement Agreement IEUA Preserve Sewer Lift Station
Resolution 2020-045