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HomeMy WebLinkAboutR-11137 authorizing the City Manager to enter into agreements with the Board of Trustees of the California State University for water and wastewater service to Cal PolyR 11137 RESOLUTION NO. 11137 (2020 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO ENTER INTO AGREEMENTS WITH THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY FOR WATER AND WASTEWATER SERVICE TO CALIFORNIA STATE UNIVERSITY, SAN LUIS OBISPO WHEREAS, the City of San Luis Obispo has historically provided water and wastewater service to California Polytechnic State University, San Luis Obispo (University); and WHEREAS, the City of San Luis Obispo participated with the University on the construction of Whale Rock Reservoir in the 1960s and continues its partnership with the University on the Whale Rock Commission for reservoir operations; and WHEREAS, on June 6, 2012 the City of San Luis Obispo and the University entered into the current agreement on water and sewer rates (2012 Agreement); and WHEREAS, on April 3, 2020 the City of San Luis Obispo and University entered into a Memorandum of Understanding related to the University’s 2035 Master Plan noting certain objectives to be addressed via amendments to existing agreements or establishment of new agreements; and WHEREAS, the City of San Luis Obispo has prepared a draft 2020 Water and Sewer Rate Agreement (Exhibit A) as an update to the 2012 Agreement; and WHEREAS, the City of San Luis Obispo has prepared a draft 2020 Capacity Interest Agreement (Exhibit B) identifying the University’s contribution to upgrades at the City’s Water Treatment Plant and Water Resource Recovery Facility to maintain a capacity interest in those City facilities; and WHEREAS, the City of San Luis Obispo has prepared a draft 2020 Capacity Memorandum of Understanding (Exhibit C) as an update to the 2007 Capacity Memorandum of Understanding to provide greater clarity on water and wastewater service terms. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. The City Manager is hereby authorized and designated to sign, for and on behalf of City of San Luis Obispo, the 2020 Rate Agreement, 2020 Capacity Interest Agreement, the 2020 Capacity MOU, and any amendments thereto. SECTION 2. The Director of Utilities, or designee, is hereby authorized and designated to represent the City of San Luis Obispo in carrying out the City's responsibilities under the agreements on behalf of City of San Luis Obispo and compliance with applicable state and federal laws. R 11137 SECTION 3. Any and all actions, whether previously or subsequently taken by City of San Luis Obispo, which are consistent with the intent and purposes of the foregoing resolution, shall be, and hereby are, in all respects, ratified, approved and confirm ed. SECTION 4. Environmental Review. Modification of rates by public agencies is statutorily exempt from the California Environmental Quality Act (CEQA) under Section 15273 of the Public Resources Code because the change in fees is not intended to fund ex pansion of capital projects not otherwise evaluated under CEQA. Capital projects identified in the draft 2020 Capacity Interest Agreement and draft 2020 Capacity Memorandum of Understanding were subject to prior environmental review. No additional environmental review is required for this item. Upon motion of Council Member Pease, seconded by Vice Mayor Gomez, and on the following roll call vote: AYES: Council Member Christianson, Pease, Stewart, Vice Mayor Gomez and Mayor Harmon NOES: None ABSENT: None The foregoing resolution was adopted this 16th day of June 2020. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on _____________________. ____________________________________ Teresa Purrington, City Clerk DocuSign Envelope ID: 716E8878-EE4C-40F1-86EC-BF31EC75E760 Item #2758 EXHIBIT A AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY REGARDING WATER AND SEWER RATES ("Agreement") THIS AGREEMENT, made on 611812020 , by and between the CITY OF SAN LUIS OBISPO, CALIFORNIA (hereinafter referred to as "City"), and BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY (hereinafter referred to as "University"). WITNESSETH : WHEREAS, the City and the University entered into a Memorandum of Understanding on March 17, 2020 agreeing to address a series of water and sewer objectives by agreement; and WHEREAS, the City and the University agree that this Agreement is solely for the purpose of establishing appropriate water and sewer rate structures based on the Agreement Between the City of San Luis Obispo and the Board of Trustees of the California State University Regarding Capacity Interest in the Water and Sewer Systems dated, 2020, and the 2020 Memorandum of Understanding Between the City of San Luis Obispo and the Board of Trustees of the California State University Regarding Capacity Interest in City Facilities collectively referred to as the "Agreement"; and WHEREAS, the City and the University entered into a new methodology of calculating rates in January 1993, and subsequently recalculated the rates in 1998, 2003, 2007,2012;and WHEREAS, the City and the University agreed at that time to a rate structure which ties the University to the City's approved non-residential rate structure, including monthly fixed charges, and periodic rate review, while reflecting the University's unique differences from other City customers; and WHEREAS, it is agreed that the University is exempt from all City Water Source of Supply costs as it has its own source of supply in Whale Rock Reservoir and as a member agency of the Whale Rock Commission pays separately for its water supply costs; and WHEREAS, it is agreed that the University will pay the City to provide water supply operational resiliency when water from Whale Rock Reservoir is unavailable; and WHEREAS, it is agreed that the University will maintain its capacity interest in the City's Water Treatment Plant by paying its percentage share of agreed upon capital costs for the upgrade underway in 2020 thereby adjusting their water rate; and DocuSign Envelope ID: 716E8878-EE4C-40F1-B6EC-BF31 EC75E760 Item #2758 EXHIBIT A three components: Source of Supply, Treatment, and Distribution. The division of expenses in this manner will therefore appear as a matrix (three columns labeled Source of Supply, Treatment, and Distribution; five rows labeled Operations and Maintenance, Capital Outlay, Debt Service-2006 WTP, and Debt Service -Other). The University's rate structure will be based only on those expenses related to water treatment and distribution, less any capacity interest in the system purchased by the University under separate agreement. The University shall not pay the percentage cost of those components related to those Source of Supply costs as the University has its own source of supply from Whale Rock Reservoir, except as described below related to short- term non-potable water. Schedule A sets forth this analysis for the period beginning with the execution of this Agreement and extending until June 30, 2021, and shall serve as an example for determining any changes to the ratio in subsequent annual periods. Schedule A to this Agreement shows the current five-year expense analysis and related percentages as described above and provides a step by step description of the ratio-setting method. 3. OTHER WATER CHARGES The City will charge the University for water supply operational resiliency based on the historical duration of Whale Rock outages (five days). The cost for 2020-21 will be $137,000 and will be included as part of the University's monthly water bill. In the event of a longer duration Whale Rock outage, the University would be charged the respective per acre foot water supply pumping cost. The annual water supply operational resiliency cost will increase consistent with any approved water rate increase. If requested, the University's rate structure for short-tem, non-potable water will be based on all current fiscal year City expenses related to Source of Supply. The University will make its annual request for short-term non-potable water to the City in writing 30-days prior to its Annual Partnership Meeting. Short-term requests will be considered for a rolling period no longer than five years. The provision of short-term non-potable water to the University will be interruptible during any declared City water shortage emergency and will only be made available following the City's established policies and procedures. 4. SETTING A SEWER RATE RATIO The ratio to be applied to the non-residential sewer rate structure shall be determined by the City. The City shall prepare a prospective five-year analysis of the expenses for the City's sewer system. These expenses shall be divided according to Operational, Capital, and Debt Service expenses for three components: Collection, Pretreatment, and Treatment. The University's rate structure will be based on the expenses for these components less any capacity interest in the system purchased by the University under separate agreement. The division of expenses in this manner will therefore appear as a matrix (three columns labeled R 11137 DocuSign Envelope ID : 716E8878-EE4C-40F1-86EC-BF31EC75E760 Item #2758 EXHIBIT A 5. Request for short-term wastewater collection system and/or WRRF treatment capacity (if average daily dry weather flow or peak flow exceed capacity interest), and 6. Status of campus water reclamation facility and campus water storage projects. 6. AMENDMENTS TO THE RATIO Exceeding Capacity Interest The City will inform the University in writing when water demand from the Wf P or wastewater flows to the wastewater collection system or WRRF are within ten percent of the University's capacity interest. If the University exceeds its capacity interest in the WfP, wastewater collection system, or WRRF the City will charge the University 100 percent of the per unit Non-residential rate in effect at the time. This per unit rate will remain in effect until the University purchases an additional capacity share in the City 's facilities, or reduces its water demand or wastewater flows. A Partnership Meeting will be held within 30 days of the exceedance for the City and University develop terms for the University to purchase of additional capacity interest. Resetting the Ratio In the event the City and University cannot reach agreement on the proposed applicable ratio for the next year, the ratio in existence at that time shall remain in effect until agreement is reached. The parties agree to cooperate and use their best efforts to reach agreement on the proposed ratio in an expeditious manner. 5. TERM OF AGREEMENT Annual extensions to the term of this agreement shall be automatic, as long as all conditions described (other than the five-year ratio) remain the same. 6. AMENDMENTS TO THIS AGREEMENT Any amendment, modification , or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by both parties. 7. COMPLETE AGREEMENT This written Agreement, including the Memorandum of Understanding between the City of San Luis Obispo and California Polytechnic State University Regarding Capacity Interest in City Facilities dated , 2020, attached hereto as Attachment A, specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto . No oral agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the parties hereto. R 11137 DocuSign Envelope ID: 716E8878-EE4C-40F1-B6EC-BF31 EC75E760 ATTEST: Teresa Purrington, City Clerk APPROVED AS TO FORM : GDocuSIQned by: J,~- 784AEASBC6BC44F • J. Christine Dietrick, City Attorney CONCUR: Dennis Elliot, Director Energy, Utilities, Sustainability EXHIBIT A CITY OF SAN LUIS OBISPO, A Municipal Corporation lnOoauSlgned by: By : L£::,~~~ Derek Johnson, City Manager UNIVERSITY: Item #2758 By :~~~~~~~~~~~~~- Cody Van Dorn, Executive Director R 11137 OocuSign Envelope ID: 716E8878-EE4C-40F1-B6EC-BF31 EC75E760 EXHIBIT A SCHEDULE A. WATER Water Rate Cal Poly State University Summary of Water Cost Components for 2016-17 Source of Supply Operation & Maintenance $ 9,771,604 Capital Outlay $ 1,627,979 Debt Service -2006 WTP $ Debt Service -Other $ 525,457 Total $ 11,925,040 Total applicable to Cal Poly $ Percent applicable to Cal Poly 0% Summary of Water Cost Components for 2017-18 Source of Supply Operation & Maintenance $ 9,387,467 Capital Outlay $ 298,367 Debt Service -2006 WTP $ Debt Service -Other $ 525,457 Total $ 10,211,291 Total applicable to Cal Poly $ Percent applicable to Cal Poly 0% Summa.-y of Water Cost Components for 2018-19 Source of Supply Operation & Maintenance $ 8,832,927 Capital Outlay $ 278,911 Debt Service -2006 WTP $ Debt Service -Other $ 525,457 Total $ 9,637,294 Total applicable to Cal Poly $ Percent applicable to Cal Poly 0% Summary of Water Cost Components for 2019-20 Source of Supply Operation & Maintenance $ 10,013,682 Ca pita I Outlay $ 169,289 Debt Service -2006 WTP $ Debt Service -Other $ 2,465,256 Total $ 12,648,227 Total applicable to Cal Poly $ Percent applicable to Cal Poly 0% Summary of Water Cost Components for 2020-21 Source of Supply Operation & Maintenance s 10,675,781 Capital Outlay s 55,092 Debt Service -2006 WTP s Debt Service -2002 Bond & SST s Total $ 10,730,873 Total applicable to Cal Poly s Percent applicable to Cal Poly 0% Treatment $ 4,651,165 $ 727,646 $ 1,030,948 $ 572,000 $ 6,981,759 $ 6,409,759 26% Treatment $ 4,617,479 $ 856,148 $ 1,033,548 s 569,600 $ 7,076,775 $ 6,507,175 28% Treatment $ 3,007,759 $ 1,194,569 $ 898,802 s 571,600 $ 5,672,730 $ 5,101,130 25% Treatment $ 4,402,995 $ 4,279,474 $ 883,900 $ 567,800 $ 10,134,169 s 9,566,369 32% Treatment $ 4,775,029 $ 186,141 $ 892,300 s 1,349,853 $ 7,203,323 $ 5,853,470 25% NOTE: Expenses applicable to Cal Poly's water rate are shaded . Distribution Total $ 2,366,449 $ 16,789,218 $ 5,060,450 ,. $ 5,788,096 o"s 1,030,948 $ ,. 65,400 $ 637,400 $ 7,492,299 $ 24,245,662 $ 7,492,299 $ 13,902,058 31% 57% Distribution Total $ 3,540,420 $ 17,545,366 $ 2,502,471 $ 3,656,986 0 $ 1,033,548 $ 65,427 $ 1,160,484 $ 6,108,318 $ 23,396,384 $ 6,108,318 $ 12,615,493 26% 54% Distribution Total $ 2,866,779 $ 14,707,465 $ 2,500,806 $ 3,974,286 0 $ 898,802 $ 74,669 $ 1,171,726 $ 5,442,254 $ 20,752,278 $ 5,442,254 $ 10,543,384 26% 51% Distribution Total s 3,734,808 $ 18,151,485 $ 3,490,332 $ 7,939,095 0 $ 883,900 $ 28,111 $ 3,061,167 $ 7,253,251 $ 30,035,647 $ 7,253,251 $ 16,819,620 24% 56% Distribution Total $ 3,163,874 $ 18,614,684 $ 2,191,665 $ 2,432,898 0 $ 892,300 $ 28,410 $ 1,378,263 $ 5,383,949 $ 23,318,145 s 5,383,949 $ 11,237,419 23% 48% Water Rate Percentage for FY 2020-21 (5-year Average): 57 + 54 + 51 + 56 + 48 / 5 = 53% Item #2758 DocuSign Envelope ID: 716E8878-EE4C-40F1-86EC-BF31EC75E760 EXHIBIT A SCHEDULE 8. SEWER Sewer Rate Cal Poly State University Summary of Sewer Cost Components for 2016-17 Operations and Maintenance Capital Outlay -Adjusted Debt Service -Prepaid Debt Service -Other Percent Applicable to Cal Poly Summary of Sewer Cost Components for 2017-18 Operations and Maintenance Capital Outlay -Adjusted Debt Service -Prepaid Debt Service -Other Percent Applicable to Cal Poly Summary of Sewer Cost Components for 2018-19 Operations and Maintenance Capital Outlay -Adjusted Debt Service -Prepaid Debt Service -Other Percent Applicable to Cal Poly Summary of Sewer Cost Components for 2019-20 Operations and Maintenance Capital Outlay -Adjusted Debt Service -Prepaid Debt Service -Other Percent Applicable to Cal Poly Summary of Sewer Cost Components for 2020-21 Operations and Maintenance Capital Outlay -Adjusted Debt Service -Prepaid Debt Service -Other Percent Applicable to Cal Poly NOTE: Expenses applicable to Cal Poly's sewer rate are shaded . Collection 1,619,200 .. 1,842,900 .. 0 784,618 Total 4 ,246,718 24% Collection 1 ,428,200 1,790,400 782.950 Total 4,001,550 22% Collection 1,751,800 4,058,800 0 780 ,505 Total 6,591 .105 36% Collection 1,549, 100 755,600 0 737 ,011 Total 3,041,711 28% Collection 1,639,600 2,369,800 7$9 ;~ Total 4,748,868 37% Pretreatment 416,500 0 0 0 416 ,500 3% Pretreatment 366,300 0 0 366,300 2% Pretreatment 42 1,300 0 0 0 421,300 2% Pretreatment 409,600 35,600 0 0 445 ,200 4% Pretreatment 402 ,700 0 0 402 ,700 3% Treatment 6,853 ,200 2,749,000 0 618,544 10,220,744 73% Treatment 5,917,900 7,075,500 618,363 13,611,763 76% Treatment 7, 157,700 3,515,700 0 618,177 11,291 ,577 62% Treatment 6,381,500 499, 100 0 618.177 7 ,498,777 68% Treatment 6,603,500 300,500 617.787 7,521,787 59% Item #2758 Total 8,888,900 4,591,900 0 1,403,163 14,883,963 100% Total 7,712,400 8,865,900 0 1,401.313 17 ,979,613 100% Total 9,330,800 7,574,500 0 1,398,682 18,303 ,982 100% T otal 8,340,200 1,290,300 0 1 355 , 188 10 ,985,688 100% Total 8,645,800 2,670,300 0 1,357 ,255 12,673,355 100% Sewer Rate Percentage for FY 2020-21 (5-year Average): 100+100+100+100+100 / 5 = 100% DocuSign Envelope ID: 716E8878-EE4C-40F1-86EC-BF31 EC75E760 ITEM #2758 EXHIBITS B. Water Distribution System and Potable Water Storage The University has not purchased a capacity interest in the City's water distribution or potable water storage system outside of the Water Treatment Plant. Prior to the University adding demand to the City's water distribution system, the University and City will work to identify water service needs, and design and construct necessary mitigation, including University capital contributions, to avoid impacts to the City's water distribution or treated water storage system. Service cannot be provided to the University when downstream City customers could be adversely affected. 2. SEWER SYSTEM The University wishes to maintain its capacity interest in the upgraded Water Resource Recovery Facility equivalent to 0.471 mgd. The current capacity interest in the wastewater collection system is a peak flow rate of 1.2 mgd, required due to infiltration and inflow and wet weather peak flows. A. Water Resource Recovery Facility The upgrades to the Water Resource Recovery Facility are mandatory to meeting regulatory discharge requirements. The capacity of the plant will expand from 5.1 mgd to 5.4 mgd. The University agrees to pay the percentage obtained by the division of 0.471 mgd (University's interest) by 5.1 mgd (existing plant capacity), or 9.24 percent, or by the division of 0.471 (University's interest) by 5.4 mgd (future plant capacity), or 8. 72 percent, of the total project cost, as detailed in Attachment 1. The estimated cost to the University is $13,997,193, which will be refined upward or downward by letter when project construction is complete, subject to the total contribution ceiling noted in paragraph three of this agreement. B. Wastewater Collection System No upgrades are planned at this time to the relief sewer main, therefore, there is no additional cost at this time for the University to maintain its capacity interest in the City's wastewater collection system at the peak flow rate of 1 .2 mgd level. 3. RECEIPT OF FUNDS To maintain a capacity interest in the City's Water Treatment Plant and Water Resource Recovery Facility, the University's contribution must be received by December 31, 2022. The estimated costs set forth in paragraphs one and two may be adjusted between categories based upon actual costs provided. The total University contribution for the Water Treatment Plant and Water Resource Recovery Facility will not exceed $15,545,373. Exercising this option will be reflected in the percentage ratio of the non- residential rate structure as set forth in the Agreement between the City and the University regarding water and sewer rates following receipt of the University's contribution. The adjusted water ratio is described in Exhibit A of that Agreement; and the adjusted sewer ratio is described in Exhibit B of that Agreement. DocuSign Envelope ID: 716E8878-EE4C-40F1-86EC-BF31EC75E760 ITEM#2758 EXHIBIT B ATTACHMENT 1: 2020 Water Resource Recovery Facility Project Cost --I Capacity I I Capacity Cal Poly Share + I Faclllty ID Description Estimated Cost 8 Cal Poly Share O Related A . Percentan c Contingency ' I 5 Site Work No $7,917,752 9.24% $731,600 $804,760.36 6 Yard Piping No $8,556,058 9.24% $790,580 $869,637.72 7 Landscape Yes $1,112,303 8 .72% $96,993 $106,692.13 9 Site Electrical No $6,325,651 9 .24% $584,490 $642,939.19 11 Air Gap Building No $179,106 9 .24% $16,549 $18,204.37 14 Equalization Pond Yes $2,893,797 8 .72% $252,339 $277,573.01 15 Headworks No $679,338 9 .24% $62,771 $69,047.95 16 Ferric Chloride Facility No $96,566 9 .24% $8,923 $9,814.92 17 Vactor Truck Facility Yes $717,211 8 .72% $62,541 $68,794.89 20 Primary Clarifiers No $1,916,038 9.24% $177,042 $194,746.12 64 Filtrate Equalization Pump Station No $350,320 9.24% $32,370 $35,606.53 22 Sludge Pump Station No $612,707 9.24% $56,614 $62,275 .51 27 Primary Effluent Diversion Box Yes $498,587 8.72% $43,477 $47,824.44 28 Primary Effluent Screens Yes $3,531,853 8 .72% $307,978 $338,775.38 29 Calcium Hydroxide Facility No $35,450 9.24% $3,276 $3 ,603 .10 30 Bioreactor 1 & 2 Modifications Yes $4,868,143 8 .72% $424,502 $466,952.29 35 Bioreactor 3 & 4 Yes $7,812,882 8 .72% $681,283 $749,411.65 36 Chemical Storage Yes $1,558,325 8 .72% $135,886 $149,474.52 40 MBR Yes $23,320,401 8.72% $2,033,539 $2,236,892 .82 44 Switchgear Building No $3,893,354 9.24% $359,746 $395,720.46 51 Chemical Storage Yes $118,951 8.72% $10,373 $11,409.79 53 UV Area Electrical Building Yes $1,480,284 8.72% $129,081 $141,988.83 54 UV Disinfection Yes $6,160,467 8.72% $537,193 $590,911.97 55 Chlorine Contact Basin No $25,545 9.24% $2,360 $2,596.44 100 Mobilization No $5,799,597 9.24% $535,883 $589 .4 71. 06 68 Effluent Cooling Yes $4,299,648 8 .72% $374,929 $412,422. 27 92 Headworks Electrical Enclosure No $1,251,923 9.24% $115,678 $127,245.45 70 Sludge Blend Tank No $1,016,841 9 .24% $93,956 $103,351.72 72 Thickening No $2,522,050 9 .24% $233,037 $256,341 .12 73 Solids Electrical Building No $1,471,744 9.24% $135 ,989 $149,588.06 80 Digester No. 1 No $595,791 9.24% $55,051 $60,556.15 82 Digester No . 2 No $2,027,191 9 .24% $187,312 $206,043.68 83 Digester Building No $2,687,269 9.24% $248,304 $273,134.05 84 Cogeneration No $46,701 9.24% $4,315 $4,746.67 85 Digested Sludge Storage Tank No $1,259,220 9.24% $116,352 $127,987.08 86 Dewatering Building No $745,590 9.24% $68,893 $75,781 .81 88 Odor Control Facility No $1,523,675 9.24% $140,788 $154,866.37 90 MCC-A Building No $276,264 9 .24% $25,527 $28,079.46 91 MCC-B Building No $179,438 9.24% $16,580 $18,238.05 94 MCC-G Building No $32,244 9.24% $2,979 $3.277.25 97 MCC-J Building No $79,219 9.24% $7,320 $8,051.78 98 PG&E Revenue Meter Switchgear No $380,531 9 .24% $35,161 $38,677.17 Total Construction Cost F $110,856,024.40 $9,939,557 .82 $10,933,514 Program Soft Costs G $30,989,858.00 9.24% $2,863,462.88 $3,063,679 $12,803,021 $13,997,193 OocuSign Envelope ID : 716E8878-EE4C-40F1-B6EC-BF31EC75E760 ITEM#2758 EXHIBITC 2020 MEMORANDUM OF UNDERSTANDING ("MOU") BETWEEN THE CITY OF SAN LUIS OBISPO ("City") AND THE BOARD OF TRUSTEES OF THE CALIFORNIA ST ATE UNIVERSITY ("University") REGARDING CAPACITY INTEREST IN CITY FACILITIES This MOU is made on 6/18/2020 , 2020 by and between the City and the University. Recital This MOU documents the University's capacity interest (referenced in prior agreements as an "equity interest") in the City's Water Treatment Plant, potable water distribution system and treated water storage, wastewater collection system and wastewater treatment facility (Water Resource Recovery Facility or WRRF). This 2020 MOU replaces prior agreements regarding the University's capacity interest in City facilities including the May 1, 2007 MOU, and the 1993 Agreement between the City of San Luis Obispo and California Polytechnic State University Regarding Water and Sewer Rates dated January 5, 1993, exhibit A, the Agreement between the City of San Luis Obispo and California Polytechnic State University Regarding Optional Equity Interest in the Water and Sewer Systems dated January 5, 1993, exhibit B, and the Memorandum of Understanding between the City of San Luis Obispo and California Polytechnic State University dated January 6, 1993, exhibit C. Capacity The City and University agree to communicate in the planning and development of facilities to ensure that adequate capacity in the City's Water Treatment Plant, potable water distribution and storage system, wastewater collection system, and wastewater treatment facility (Water Resource Recovery Facility) is available to meet the University's current and projected needs. The University agrees to provide the City with its development and population projections annually which shall include an analysis of the University's water treatment, potable water distribution and storage system, and wastewater collection system and treatment capacity needs as planned and projected for the next five years. The City shall consider the University's projections in its own master planning to better understand the University's capacity needs in future facility upgrades and expansions. Capacity Interest The University has historically maintained a capacity interest in the City's Water Treatment Plant, wastewater collection system, and Water Resource Recovery Facility sufficient to serve current and projected University needs. The University has done so by financially participating in required facility upgrades and expansions via capital contribution based on the University's desired capacity percentage share of the facilities . Maintenance of said capacity interest, through fair share capital contributions, ensures that the City maintain available capacity to serve the University's needs up to the amount of the capacity interest. As set forth in the Water and Sewer Rate Agreement, these capital contributions are reflected in the University's rates.