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05/01/2007, C2 - RENEWAL OF AGREEMENT WITH CAL POLY REGARDING WATER AND SEWER RATE SETTING
council May 1,2007 j acEnaa REpont �N . CITY OF SAN L U I S O B I S P O FROM: Department Head: John.Moss,Utilities Director�Ji'`-� Prepared By: Kathe Bishop, Senior Admi strative Analyst SUBJECT: Renewal of Agreement with Cal Poly Regarding Water and Sewer Rate Setting CAO RECOMMENDATION 1. By motion, approve and authorize the Mayor to execute the updated agreement with California Polytechnic State University regarding water and sewer rate setting. 2. Authorize the City Administrative Officer to approve and execute the memorandum of understanding with California Polytechnic State University regarding capacity interest in City facilities, dated May 1, 2007, and subsequent revisions. DISCUSSION This agreement updates the 2003 water and sewer rate agreement with California Polytechnic State University. This is the third renewal of the. 1993 agreement. The 1993 agreement established a mutually-approved methodology for calculating the University's appropriate water and sewer rates, based on the University owning its own source of supply and previously making capital contributions to the Water Treatment Plant and Water Reclamation Facility upgrade projects. The City's current water and sewer agreement with the University covers a five year . period ending June 30; 2007. The 2007 updated agreement (Attachment) maintains the basic methodology of recognizing the University's unique customer profile while charging the University for its fair-share of water and sewer expenses. The water and sewer rate structure established for the Bella Montana faculty and staff housing development, approved by Council in November 2006, is incorporated in the 2007 agreement. The addition of a memorandum of understanding (MOU) between the City and University regarding capacity interest is also incorporated into the 2007 rate.agreement. The CAO signature on the MOU is recommended as that will be the equivalent level of signature provided by Cal Poly, as opposed to the CSU Trustee execution, and a similar document attached to the 1993 agreement was executed at this same level by the then CAO, John Dunn. The purpose of this MOU is to clarify the City and University relationship relative to capacity and capacity interest in City facilities providing greater clarity on the 1993 agreements that are exhibits to the MOU. Utilities staff proposed this MOU as a framework to: (1) clarify the relationship relative to capacity; and; (2) transfer knowledge forward for future staff members as part of the Utilities Department succession planning objectives. We believe this MOU is beneficial today and may become particularly valuable in the future, for example, five years from now when capacity discussions could take place with many new,City and University staff members at the table who were not part of the 1993 or more recent agreement process. d Renewal of Agreement with Cal Poly Regarding Water and Sewer Rate Setting Page 2 In the 2007 updated agreement, the water and sewer rate methodology reviews five years of financial data to determine the University's appropriate percentage of water and sewer rates. In the 2007 agreement staff analyzed five years of financial data from fiscal years 2004-05 through 2008-09; this includes the current fiscal year 2006-07, two historical years and two prospective years. The University's applicable ratio to be applied to the water rate changed from 61% to 66%, while the applicable ratio to be applied to the sewer rate changed from 74% to 82%. The attached agreement and ratio schedules define the methodology used and summarize the calculations that set the appropriate percentage of the water and sewer rate applicable to the University. The agreement calls for an annual review of the applicable ratios and any major assumptions significantly changing the applicable ratio. CONCURRENCES Cal Poly staff Matthew Roberts, Director of Contract and Procurement Services and Dennis Elliot, Manager of Engineering and Utilities Facility Services concur with the attached agreement. FISCAL IMPACT This agreement modifies the applicable percentage of the water and sewer rate to be paid by California Polytechnic State University. Currently, the University pays 61% of the water rate.. Under the new agreement this increases to 66% of the water rate. Many factors contribute to this increase, with the most significant being the Water Treatment Plant (WTP) upgrade capital project costs and associated debt financing. The University was provided with an option to purchase capacity interest in the WTP upgrade project through a lump sum payment to reduce their percentage of the water rate. University staff chose to not purchase capacity interest in the WTP upgrade and will instead cover the appropriate shareof costs through an increased percentage of the water rates. Currently, the University pays 74% of the sewer rate and under the new agreement this increases to 82% of the sewer rate. Projected capital costs associated with Tank Farm Lift Station, Calle Joaquin (formerly referred to as Howard Johnson) Lift Station and THM's Disinfection Modifications at the Water Reclamation Facility are the most significant contributing factors to the University's increased percentage of the sewer rate. ATTACHMENT Agreement between the City of San Luis Obispo and California Polytechnic State University Regarding Water and Sewer Rates. G:\UCIL\CAR-CAO Reports\2007 Council Agenda Reports\Cal Poly Water and Sewer Rate Agreement CAR.DOC Cz-z ATTACHMENT , AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND CALIFORNIA POLYTECHNIC STATE UNIVERSITY REGARDING WATER AND SEWER RATES ("Agreement"). THIS AGREEMENT, made this day of 2007, by and between the CITY OF SAN LUIS OBISPO, CALIFORNIA (hereinafter referred to as "City"), and CALIFORNIA POLYTECHNIC STATE UNIVERSITY (hereinafter referred to as "University"). WITNESSETH: 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 Memorandum of Understanding between the City of San Luis Obispo and California Polytechnic State University Regarding Capacity Interest in City Facilities dated.May 1, 2007, the 1993 Agreement between the City of :San Luis Obispo and California Polytechnic State University Regarding Water and Sewer Rates dated January 5, 1993, 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, and the Memorandum of Understanding between the City of San Luis Obispo and California Polytechnic State University dated January 6, 1993, collectively referred to as the "Agreement"; and WHEREAS, the City and the University entered into anew methodology of calculating rates in January 1993, and subsequently recalculated.the rates in 1998 and 2003; 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 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 the Whale Rock Reservoir and as a member agency of the Whale Rock Commission pays separately for its water supply costs; and NOW, THEREFORE, in consideration of their mutual covenants, the parties hereto agree as follows: �z -� ATTACHMENT Rate Agreement 1. RATE STRUCTURE METHODOLOGY Water Rate Structure The University's rate structure for water shall be based on whatever the current rate is for City Non-residential accounts as modified by a percentage ("ratio") that accounts for that part of the rate structure that is applicable to the University, including the Bella Montana housing development located on University owned land that is leased to the Cal Poly Housing Corporation for Cal Poly staff and faculty. This ratio shall be established as outlined in paragraph 2 and shall be re-set every five years. The calculation of the current ratio for water charges is shown in Schedule A to this agreement. Sewer Rate Structure University - The 'University's rate structure for sewer shall be based on whatever the current rate is for City Non-residential accounts as modified by a percentage ("ratio") that accounts for that part of the rate structure that is applicable to the University. Bella Montana - The University's sewer rate structure for the Bella Montana housing development is based on 70% of metered water use. The rate of 70% shall be applied to the metered water reading and based on whatever the current sewer rate is for City Non- residential accounts as modified by a percentage ("ratio") that accounts for that part of the rate structure that is applicable to the University. Upon completion of the Bella Montana development and full occupancy determined by Certificate of Occupancy issued for all units, and with accurate winter water use data based on full occupancy, the University's sewer rate structure for Bella Montana will change to the. then current volume based sewer rate structure for single metered multi-family complexes as modified by a percentage ("ratio") that accounts for that part of the rate structure that is applicable to the University. This ratio shall be established as outlined in paragraph 3 and shall be re-set every five years. The calculation of the current ratio for sewer charges is shown in Schedule B to this agreement. Page 2 of 6 C2-y ATTACHMENT ; Rate Agreement 2. SETTING A WATER RATE RATIO The ratio to be applied to the Non-residential water rate structure shall be determined by the City. The City shall prepare a five year analysis of the expenses for the City's Water system. These expenses shall be divided appropriately according to operational, capital and debt service for three components: source of supply, treatment and distribution. The division of expenses in this manner will therefore appear as a matrix of nine (three columns. labeled source of supply, treatment, and distribution; three rows labeled operations and maintenance, capital outlay, and debt service). 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. The University shall not pay the percentage cost of those components related to Source of Supply, as the University has its own source of supply from Whale Rock reservoir. Schedule A sets forth this analysis for the period beginning With the execution of this Agreement and extending until June 30, 2012, and shall serve as an example for determining any changes to the ratio in subsequent five year periods. Schedule A to this Agreement shows the current five year expense analysis and related percentages as described above. In addition, the schedule provides a step by step description of the ratio-setting method. 3. 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 appropriately 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. The division of expenses in this manner Will therefore appear as a matrix (three columns labeled collection, pretreatment, and treatment; three rows labeled operations and maintenance, capital outlay, and debt service as one or more rows). Schedule B sets forth this analysis for the period beginning with the execution of this Agreement and extending until June 30, 2012, and shall serve as an example for determining any changes to the ratio in subsequent five year periods. Schedule B to this Agreement shows the current five year expense analysis and related percentages as described above. . In addition, the schedule provides a step by step description of the ratio-setting method. Page 3 of 6 n C.� ;z —IT ATTACHMENT . Rate Agreement 4. AMENDMENTS TO THE.RATIO Annual review. It is the intent of both parties to meet annually no later than January with information provided 30-days prior to review the prior year's analysis compared to actual expenses, review sewer meter calibration report, consumption and rate trends, University's development and population projections, and to discuss in good faith any major assumptions significantly changing the established ratio. City will forward to University the rate report and supporting documentation no later than July of each year. Resetting the ratio. In the event the City and University cannot reach agreement on the proposed applicable ratio for the next five years, 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. AMENDMENTS TO THIS AGREEMENT Five year 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. 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. 6. 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 May 1, 2007, attached hereto as Exhibit A; the 1993 Agreement between the City of San Luis Obispo and California Polytechnic State University Regarding Water and Sewer Rates dated January 5, 1993, attached hereto as Exhibit B; 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, attached hereto as Exhibit C; the Memorandum of Understanding between the City of San Luis Obispo and California Polytechnic State University dated January 6, 1993, attached hereto as Exhibit D, 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. Page 4 of 6 C2--� ATTACHMENT Rate Agreement 7. NOTICE The City shall provide the University with at least the same notice of proposed changes in water and sewer rates as other City customers. All notices related to this agreement shall be in writing and addressed as follows: Universi CCt Dennis Elliot, P.E. John Moss Manager of Engineering and Utilities Utilities Director Facilities Services City of San Luis Obispo Cal Poly State University 879 Morro Street San Luis Obispo, CA 93407 San Luis Obispo, CA 93401 Matthew J. Roberts, Director Contract and Procurement Services Cal Poly State University San Luis Obispo, CA 93407 8. JOINT WORK PRODUCT This agreement is the joint work product of both parties; accordingly, in the event of ambiguity no presumption shall be imposed against either party by reason of document preparation. 9. RELATIONSHIP OF PARTIES City and the agents and employees of City in the performance of this agreement shall act in an independent capacity and not as officers or employees or agents of University. The employees of University who participate in the performance of this agreement are not agents of the City. 10. AUTHORITY TO EXECUTE AGREEMENT Both City and University do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. Page 5 of 6 c 2- 7 ATTACHMENT Rate Agreement IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written. ATTEST: CITY OF SAN LUIS OBISPO, A Municipal Corporation By : Audrey Hooper, City Clerk David F. Romero, Mayor APPROVED AS TO FORM: an Lowell, City Attorney CONCUR: UNIVERSITY: By: Dennis Elliot Matthew Roberts, Director Manager of Engineering and Utilities Contract and Procurement Services Cal Poly Facility Services Page 6 of 6 A ATTACHMENT WATER RATE SCHEDULE A Cal Poly State University Schedule of Applicable Ratio: Proposed Method Summary of Water Cost Components for 20042005 Source of Supply Treatment Distribution Total Operations and Maintenance 2,296,300 j 1,740,000 -1,641,6001 5,677,900 Capital Outlay 50,200 160,100-` 1,265,9001 1,476,200 Debt Service 79,000 844,3661, 182,200 1 1,105,500 Total 2,425,500 2,744,400 3,089,7001 8,259,600 Percent Applicable to Cal Poly _. - - -- -- 23% 37% 60%1 Summary of Water Cost Components for 2005-2006 Source of Supply Treatment Distribution Total Operations and Maintenance 2,310,600 1 1,772,000 1,848,0001 5,930,600 Capital Outlay 46,400 ; 420,200 1,963,6001 2,430,200 Debt Service 652,000 843,000 181,700 1,676,700 Total 3,009,000 3,035,200 3,993,3001 10,037,500 !Percent Applicable to Cal Poly 22% 40% -- B2%1 Summary of Water Cost Components for 2006-2007 Source of Supply Treatment Distribution _ Total Operations and Maintenance 2,339,300 -2,469,600 2,266,600 7,075,500 Capital Outlay 789,200 293,100 6,242,2001 7,324,500 Debt Service-Other 652,500 844,000 183,400 1,679,900 Debt Service-2006 WTP 0 1 813,100 _ 0 813,100 Total 39781,000 4,419,8001 8,692,2001 16,893,000 1Percent Applicable to Cal Poly 21% - 51% 73%1' Summary of Water Cost Components for 2007-2008 Source of Supply Treatment Distribution Total Operations and Maintenance 2,381,600 1 2,748,700 2,307,500 7,437,800 Capital Outlay 284,200 J 154,500 2,055,700 2,494,400 Debt Service-Other 652,400 842,700 1 182,500 1,677,600 Debt Service-2006 WTP 0 1,033,900 0 1,033,900 Total 3,318,200 4,779,800 1 4,545,7001 12,643,700 Peroent Applicable to Cal Poly 31% 360/, 670%1 Summary of Water Cost Components for 2008-2009 Source of Supply Treatment Distribution Total Operations and Maintenance 2,447,700 2,871,800 2,371,600 7,691,100 Capital Outlay 283,400 109,900 2,016,700 2,410,000 Debt Service-Other 652,200 840,800 .181,500 1,674,500 Debt Service WTP-2006 0 1 1,032,300 0 1,032,300 Total 3,383,300 4,854,8001". 4,569,8001 12,807,900 Percent Applicable to Cal Poly 31% 36% 67%I CZ-q ATTACHMENT SCHEDULE A-1. Steps to setting Cal Poly's appropriate share of the non-residential water rate © The City shall prepare a five year schedule of expenses for the.City's water system. The five year period will include the last two historical years, the current year, and two prospective years. © These expenses shall be divided appropriately according to operational, capital or debt service. Each of these categories will be further divided according to whether it is a source of supply, treatment or distribution expense. The information for each year will be shown in a matrix, at the bottom and right of which will appear the totals for that row and that column. TABLE OF DEFINITIONS Operations and Maintenance The portion of the budget that pertains to daily operations and delivery of basic governmental services. The six water program budgets in the City s financial plan form the Water Fund's operating budget. Capital Ouday The portion of the budget that pertains to maintaining or replacing existing public facilities and assets, and for building or acquiring new ones as set forth in the City's capital improvement plan. For the purpose of the Cal Poly ratio-setting model, any project that is debt-financed will not show in the capital outlay expense category. It will show in debt service. Debt Service Payments of principal and interest on bonds and other debt instruments according to a pre- determined schedule. Source of Suppty Those water expenses directly related to the City s water supply from Whale Rock and Salinas Reservoirs and groundwater. It also includes water conservation expenses, as this has been the key to reducing City water demand, effectively creating more water by reducing the need to create additional water supply. Development of new water supply projects fall into this category. Treatment The cost to treat raw water from the City s sources to meet potable water standards, and deliver it into the water distribution system. Distribution The cost to deliver potable water from the water treatment plant to customers and fire hydrants via the distribution infrastructure. Monthly meter reading and billing (customer service) are included as distribution expenses. © Expenses applicable to Cal Poly will be shaded. For example; Cal Poly has its own source of supply, so the source of supply expenses are not shaded. Cal Poly chose to be a partner in the 1996 upgrade of the water treatment plant, and has prepaid all of its share of these costs. Therefore, Cal Poly is excluded from the debt service component of the treatment expenses (hence debt service is not shaded). ® The percentage of the shaded expenses to the total expenses will be calculated each year on the line labeled"Percent Applicable to Cal Poly". © The five annual percentages will be totaled and then divided by five to determine the average percentage of the rate applicable to Cal Poly,.based on the five year schedule of expenses. This is the percentage of the Non-residential rate that will be charged to Cal Poly for the five year period. 0 The Non-residential rate itself will vary according to the rates set by City Council each year. � 2 i� - ATTACHMENT SEWER RATE - SCHEDULE B Cal Poly State University Schedule of Applicable Ratio: Proposed Method Summary of Sewer Cost Components for 20042005 Collection Pretreatment Treatment Total Operations and Maintenance j 1,027,400 356,600 4,327,500 5,711,500 CapitalOutlay-Adjusted 1 695,400 1,000 349,800 1,046,200 Debt Service-Prepaid 249,800 01 1,885,900 2,135,700 Debt Service-Other 0 0 276,700 276,7001 Total 1,972,6001 357,6001. 6,839,900 9,170,100 Percent Applicable to Cal Poly 19% 4% 54% 77%j Summary of Sewer Cost Components for 2005-2006 Collection Pretreatment Treatment Total Operations and Maintenance 1 1,092,200 329,400 4,283,200 5,704,800 I CapitalOutlay-Adjusted 1402500 2,000 390,600 1,795,100 Debt Service-Prepaid 249,800 0 E 1,885,900 2,135,700 Debt Service-Other 0 0 277,100 277,100 Total 2,744,500 ( _ 331,4001 6,836,800 9,912,700 Percent Applicable to Cal Poly 25% 30/0 50% :=8% Summary of Sewer Cost Components for 2006-2007 Collection Pretreatment. Treatment Total Operations and Maintenance 1,160,200 385,000 4,964,400 6,509,600 CapitalOutlay-Adjusted 2,183,200 1,500 2,135,100 4,319,800 Debt Service-Prepaid 249,800 1 0 1,885,900 2,135,700 Debt Service-Other 0 _ _ 0 278,100 278,1001 Total 3,593,200 1 386,5001 9,263,500 13,243,200 Percent licable to Cal Poly 25% _3/o° 56/o 84%1° � Summary of Sewer Cost Components for 2007-2008 Collection Pretreatment Treatment Total Operations and Maintenance 1 1,166,500 387,000 5,461,400 7,014,900 Capital Outlay-Adjusted 1,747,400 28,100 1,674,400 32449,900 Debt Service- Prepaid 24-9:8-00-1 0 1 1,885,900 2,135,700 Debt Service-Other 520,700 0 248,900 769,600 Total 3,684,400 l 415;100 1 9,270,600 13,370,100 Percent Applicable to Cal Poly 26% 3% 55% 84%C Summary of Sewer Cost Components for 2008-2009 Collection Pretreatment Treatment Total Operations and Maintenance 1,201,500 398,700 5,625,200 7,225,4001 Capital Outlay-Adjusted 1,364,200 1,400 5,008 300 6,373,900 Debt Service- Prepaid 249,800 1 01 1,885,800 2,135,600 Debt Service-Other 1, 520,700 0 279,700 800,400 Total 3,336,200 1 400,1001 12 799,000 16,535,300 Percent Applicable to Cal Poly 19% 2% 66% -'87%iA ATTACHMENT _ SCHEDULE B-1. Steps to setting Cal Poly's appropriate, share of the non-residential sewer rate © The City shall prepare a five year schedule of expenses for the City's sewer system. The five year period will include the last two historical years,the current year, and two prospective years. © These expenses shall be divided appropriately according to operational, capital or debt service. Each of these categories will be further divided according to whether it is a collection, pretreatment or a treatment expense. The information for each year will be shown in a matrix,at the bottom and right of which will appear the totals for that row and that column. TABLE OF DEFINITIONS Operations and Maintenance The portion of the budget that pertains to daily operations and delivery of basic governmental services. The four sewer program budgets in the City s financial plan form the Sewer Fund's operating budget. Capital Outlay The portion of the budget that pertains to maintaining or replacing existing public facilities and assets, and for building or acquiring new ones as set forth in the City's capital improvement plan. For the purpose of the Cal Poly ratio-setting model, any project that is debt-financed will not show in the capital outlay expense category. It will show in debt service. Debt Service Payments of principal and interest on bonds and other debt instruments according to a pre- determined schedule. Collection Those sewer expenses directly related to the collection and transportation of wastewater from its various sources to the water reclamation facility. Pretreatment The cost of the program whose goal is to prevent toxic waste from entering the wastewater collection system at Non-residential and industrial sources. Treatment The cost to treat and dispose of municipal wastewater. All disposal must strictly comply with the State Health and Regional Water Quality board's requirements for discharge into the creek or disposal of biosolids. ® Expenses applicable to Cal Poly will be shaded.. For example, Cal Poly chose to be a partner in the 1996 upgrade of the water reclamation facility and the collection system, and has prepaid all of its share of these costs. Therefore, Cal Poly is excluded from the debt service component of the collection and treatment expenses (hence debt service is not shaded in these two columns). ® The percentage of the shaded expenses to the total expenses will be calculated each year on the line labeled"Percent Applicable to Cal Poly". © The five annual percentages will be totaled and then divided by five to determine the average percentage of the rate applicable to Cal Poly, based on the five year schedule of expenses. This is the percentage of the Non-residential rate that will be charged to Cal Poly for the five year period. 0 The Non-residential rate itself will vary according to the rates set by City Council each year. c z_/z 1 ATTACHMENT MEMORANDUM OF UNDERSTANDING ("MOU") BETWEEN THE CITY OF SAN LUIS OBISPO ("City") AND CALIFORNIA POLYTECHNIC STATE UNIVERSITY ("University") REGARDING CAPACITY INTEREST IN CITY FACILITIES This MOU is made this 1 st day of May 2007 by and between the City and the University. Recital This MOU is intended to clarify the University's capacity interest (referenced in prior agreements as an "equity interest") in the City's water and wastewater treatment facilities as more specifically set forth in 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 work together in the planning and development of facilities to ensure that adequate capacity in the City's water and wastewater treatment facilities 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 and/or wastewater treatment capacity needs as planned and projected for the next five years. The City shall include the University's projections in its own master planning to ensure that the University's capacity needs are included in future facility upgrades and expansions. Capacity Interest The University has historically maintained a capacity interest in the City's water and wastewater treatment facilities 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 has ensured that the City has maintainedavailable capacity to serve the University's needs up to the amount of the capacity interest, and as set forth in the Water and Sewer Rate Agreement, has served to reduce the University's rates. The University may elect to participate in future required upgrades and expansions to the City's water and wastewater treatment facilities and realize the resultant reduced rates. The University's capacity interest in the City's facilities shall be calculated as water treatment average demand equivalent to 1,000 acre feet as calculated on an annual basis and wastewater effluent daily dry weather flow as calculated on a monthly average of .471 million gallons daily (MGD). ��-�3 ATTACHMENT MOU Between City and University Regarding Capacity Interest in City Facilities Page 2 Authority to Execute.Memorandum of Understandinq Both the City and University agree that each individual executing this memorandum of understanding on behalf of each parry is a person duly authorized and empowered to execute agreements for such party. The parties hereto have caused this memorandum of understanding to be executed the day and year first above written. UNIVERSITY CITY OF SAN LUIS OBISPO, A Municipal Corporation By: By : Matthew Roberts, Director Ken Hampian, City Administrative Officer Contract and Procurement Services ATTACHMENT A-03-93-CC AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND CALIFORNIA POLYTECHNIC STATE UNIVERSITY REGARDING WATER AND SEWER RATES THIS AGREEMENT, made this 5th day of January ' 1993 by and between the CITY OF SAN LUIS OBISPO, CALIFORNIA (hereinafter refered to as "City"), and CALIFORNIA POLYTECHNIC .STATE UNIVERSITY (hereinafter referred to as "University"). . WITNESSETH: . WHEREAS, the City and the University have a long-standing and unique relationship with regard to the co-development of water and sewer systems; and . WHEREAS, it is the desire of both parties to continue that relationship; and WHEREAS, the City is upgrading both its Water Treatment Plant.and Sewer Treatment/Collection Systems; and WHEREAS, other City utility.customers have experienced periodic rate increases due to changing costs; and WHEREAS, the University's rate structure has not been modified since 1986 for sewer and 1964 for water; and WHEREAS, both the City and University have met and agreed to update the rate structure to reflect changing costs and the new capital projects; and WHEREAS, the City. and University have agreed to a new rate structure methodology which ties the University to the City's approved rate structure and periodic rate reviews, while reflecting the University's unique differences from other utility customers. NOW, THEREFORE, in consideration of their mutual covenants, the parties hereto agree as follows: 1. RATE STRUCTURE METHODOLOGY The University's rate structure for both water and sewer shall be based on whatever the current rate is for City commercial accounts as modified by a percentage ("ratio") that accounts for that part of the rate structure that is applicable to the University. This ratio shall be established as outlined in paragraphs 2.and 3; and reviewed every five years. I A-03-93-CC ATTACHMENT ll Rate Agreement � UNIT "All Page 2 2. SETTING A WATER RATE RATIO The ratio to be applied to the commercial water rate structure shall be determined by the City. The City shall prepare a prospective five year projection of the revenue requirements for the City's water system. These revenue requirements shall be divided appropriately according to operational, capital and debt service requirements for three components: source of supply, treatment and distribution. The appropriate percentage of total revenue requirements shall be assigned to each of the components. The University's rate structure will be based on the revenue requirements for these components less any equity interest in the system purchased by the University. The University's option to maintain an equity interest in the water system'is defined in a separate agreement with the City, dated January 5, 1993 ' Exhibit A sets forth this analysis for the period July 1, 1992 through June 30, 1997, and shall serve as an example for determining any changes to the ratio in subsequent five year periods. 3. SETTING A SEWER RATE RATIO The ratio to be applied to the commercial sewer rate structure shall be determined by the City. The City shall prepare a-prospective five year projection of the revenue requirements for the City's.sewer system. These revenue requirements shall be divided appropriately according to operational, capital and debt service requirements for three components: treatment, collection and pre-treatment. The University's rate structure will be based on the revenue requirements for these components less any equity interest in the system purchased by the University. The University's option to maintain an equity interest in.the sewer system is defined in a separate agreement with the City, .dated January 5, 1993 Exhibit B sets forth this analysis for the period July 1, 1992 through June 30, 1997, and shall serve as an example for determining any changes to the ratio in subsequent five year periods. 4. EFFECTIVE DATE FOR THIS RATE STRUCTURE This rate structure shall be effective July 1, 1992. The City agrees that, due to the significant financial impact, the University may implement this change by phasing in the total increase over a five year period. It is the City's understanding that the University cannot change its budget for 92/93, so the total increase is divided evenly in the four following years. By 1996/97, the University shall be paying the full commercial rate times the applicable ratio for water and for sewer. Water charges will e Z/!.� r ATTACHMENT Rate Agreement Page 3 WATER RATIO SEWER RATIO FIVE YEAR PHASE IN FIVE YEAR PHASE IN July 1, 1992 Current rate structure Current rate structure Ratio applied against Ratio applied against City standard rates City standard rates for commercial accounts for commercial accounts July 1, 1993 21% 40% July 1, 1994 30% 60% July 1, 1995 39% 80% July 1, 1996 48% 100% Table 1 be assessed according to metered water flow. Sewer charges will be-assessed according to metered effluent discharge flow. Table 1 sets forth the phase-in schedule of the ratios to be used per paragraphs two and three of this Agreement. 5. HOLD HARMLESS In recognition that the University's vested interest is limited to the upgrading of the facility, and that the University does not actively participate in the management of the services being provided.by the facility, the City of San Luis Obispo will indemnify, defend and save harmless the Trustees of the California State University, its officers, agents, and employees from any and all claims and losses accruing or resulting to any person(s),firm(s), or corporation(s) who may be injured or damaged as a result of the service being provided by the City of San Luis Obispo through its facility described herein, except for any such injury or damage caused by any-act, omission, or negligence of University 6. AMENDMENTS TO THE RATIO In the event the City and University cannot reach agreement on the proposed applicable ratio for the next five years, 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. 7. NOTICE The City shall provide the University with at least the same notice of -proposed changes in water and sewer rates as other City customers. I ATTACHMENT Rate Agreement Page 4 All notices related to this agreement shall be in writing and addressed as follows: University C Norm Jacobson, Energy Coordinator City Clerk Facilities Administration City of San Luis Obispo Cal Poly State University P.O. Box 8100 San Luis Obispo, CA 93407 San Luis Obispo, CA 93406 Ray Macias, Director -.'..Support Services ,:Cal Poly State University =San Luis Obispo, CA 93407 8• AGREEMENT CONTAINS ALL UNDERSTANDINGS This.document(including all exhibits referred to above and attached hereto) represents the entire and integrated Agreement between the City and the University, and 'supersedes all prior negotiations, representations, or Agreements, either written or oral," except as described in a separate Memorandum of Understanding by and between the parties herein. This document may be amended only by written instrument, signed by both City and University. All provisions of this Agreement are expressly made conditions. This Agreement shall be governed by the laws of the State of California. IN WITNESS WHEREOF, CITY and UNIVERSITY have executed this Agreement the day and year first above written. UNIVERSITY CITY OF SAN LUIS OBISPO By BY Director Support Services Mayot7Peg Pinard Ray Macias ATTEST: i e Glad ell, Cit Cler c APPROVED AS TO FORM: *eyfJgeXen", City Attorney . e,:2- _Xf ATTACHMENT Rate Agreement R!E Page 5 LUIBIT "A" UNIVERSITY'S APPLICABLE PERCENTAGE (RATIO) OF APPROVED WATER RATE STRUCTURE As required in Paragraph 2, the City has developed a five year revenue projection for the water-system. -The components and applicable percentages ofthe total-revenue requirement for FY 92/93 through FY 96/97 are shown on Schedules A-1 and A-2. 1. Applicable Components to the University The University.shall notpay the percentage cost of.those,components related to Source of Supply, as the University has its own source of supply at Whale Rock. The University shall pay the percentage cost of treatment and distribution, less any cost for debt service related to the continuing equity investment in a portion of the water system. 2. Applicable Water.Rate Ratio for the period beginning July 1, 1992 and ending June 30, 1997 The City-is currently proposing to-make significant improvements to its water treatment plant to meet drinking water quality regulations and to modernize the facility. It is expected that the City will debt-finance this project using lease revenue bonds over a period of 20 to 30 years. The University may choose to participate in the financing or pay its capital share of the revenue requirements directly. The appropriate ratio to be applied against the City's commercial rates will depend upon which of these options the University selects. A. Percentage of rate structure for 1992/1997, without capital contribution for equity interest in Water Treatment Plant Upgrades The University shall pay the average of the five year percentage cost of treatment and distribution, or 4$ percent of-the city-wide commercial rate, assuming it does not make a direct equity contribution to the proposed Water Treatment Plant improvements. The table below summarizes the detail on Schedule A-1: NO EQUITY NRB 92/93 51% 93/94 56% 94/95 48% 95/96 42% 96/97 4,� 5 YR AVG 48% Cz / 9 ATTACHMENT- -7 Rate Page 6greement IB'T "All' o`t S. Percentage of rate structure for 1992/1997, with capital contribution for equity interest in Water Treatment Plant Upgrade The University may elect to make an equity contribution to the Water Treatment Plant upgrade. The City will adjust the percentage indicated in paragraph A above as necessary, if the University elects this option and when k _ payment is received. The City anticipates the applicable percentage of city- wide commercial rate will be reduced to approximately 32 percent, but this . percentage will be refined when project costs and applicable debt service is established. In the event that the University chooses this option, this Agreement will be amended to reflect the revised ratio. The table below summarizes the detail on Schedule A-2. EQUITYN RIBUTI 92/93 48% 93/94 43% :x 94/95 37% 95/96 33% 96/97 5 YR AVG 39% .. r — ATTACHMENT .=�. Rate Agreement Page 7 � APPLICABLE RATIO - NON-EQUITY CONTRIBUTION SUMMARY OF WATER COST COMPONENTS FOR 1992-93 .Source of Supply Total Operations and Maintenance $2,727,837 £x, Ltka .££ $4,792,051 92,051 .F,Y . o0S0 ....Capital Outlay . $600,000 ......:..... Debt Service $269,200 $681,200 TOTAL $2,997,037 .$6,073,251 Y,a� k,SNn.�M ^YWM� 4e .h4 A. n[ ���'�4�'✓,9:4 !tl C t C .2 =I'J.'C �4 = ,�•M R:R♦,a'.�.._"J'nrM .J!l6.b`f J:� Aft a J i Z�•' 4 C"F ,fy! a '�.��t> �Ys{aR3f. �'sa a � A v.�O w>.Y fsfvw. iw hf � >,✓� K £ SUMMARY OF WATER COST COMPONENTS FOR 1993-94 .\'nv:5'.i';:N•= ¢?:=:n-0=%.Lfi=4:::=.{:nri:)�::::iia:'.:,::�'vryi::nim ::v.'i::=.Ci:.M:i:r�:;,inai) Source of Supply RnaTreatrnent Distributrott: <3 Total 30,47 7" $5,431,310 $Operations and Maintenance $2,984,693 , $4 . fi;fN : $500,000_}; , 22Capital Outlay $0 Debt Service 269,2 00 :; 0 $1,444,700 TOTAL $3,253,893 3"� �. $2;289,0,80 £< z ;S`3,853,077` $7,376,010 sw:atJ...:.s;+;,='.., wms„s.... . ....rw.w»:Arot^',a:A,wfero. •. .. . .mesrr,.,;:.. nf.;,.;..sa:Y,",Sxat•::.".;:...�:'t s:ss.:.;.r,.%^msss„�^:n =.;.rr. .a.:o;.xsYR.}Y:w:aa:. wn+sa; .xff4w»::. ::r>: .i'„?r,°2a»NT ♦Xrea�^.77':.. v,.•t. :'.buff .,}'` a•it •`+ rt` o-; `'�' : Cain ♦ "fx'Y]L't'•;.u:: ..'si�.,.'Pa;:. .' =PerbentAiplic'abe:ro.Caf'Po acs£ xW".:3�,:, KAu > 374!0 .w.� H:: rfi4!a ,iR.(vn'•Arvi.'1 Jn:::v\,: rmvnlwiv Mi$AiAiw).' .wr,:A.�'Aruf SUMMARY OF WATER COST COMPONENTS FOR 1994-95 Source of Supply . Total Operations and Maintenance $3,664,789 �'?" ;$x:344,25$ � >4 $�"154;629 $6,163,676 Capital Outlay $0 . $500,000 200 $2,044,700Debt Service $869, y TOTAL $4,533,989 $8,708,376 ,w,w ..:.,.>,4,=�``4y."CY',�Y"n= .s"""^`+.,.�...7. J"^..w,C• A«`+KY rv'S a r ,; u' w'�"'.,x`. ">�9.x:. ' /y�,� l�f#x,' ♦w`. < ,$'�. �r f{..M'A�f >r=<Ka,.•s' Afr ;C - 3 �2�D♦•� .� >�•'�`_�p w...�x.:mArnv,Irxn .s...u' .�woedaa.�:....aa.csx�.n•ao.,.,.:,'.:&::..sw':x;x:.,uG.;.,au.,..nGXSfL.,.xwSL.k.:.n.,m.=:,=w::..,aA...........:......3. ,A...,..w...uewnv::.�..vs,..as,.`A:..i:Cw.:,wn+:o::<'.vvTTbb SUMMARY OF WATER COST COMPONENTS FOR 1995-96 Source of SuPPIY �.. Total Operations and Maintenance $4,822.812 ,� �$1;357,UO2x ax 51,165;875 $7,345,389 Capital Outlay $0r $500,000 Debt Service $869,200hw $990tli ; Y< $222,f00 $2,044,700 TOTAL $5,692,012 ,s$'�,309,8t#`lx' <t .St,$88;175 h $9,890,089 r"rr,�a,.h��k.,...y...z. > �{n x• x.., .,wY C .. ar.m' > s A.r r- �)-' !` � .yy s>s+x• Y m•�waY{Ri +:. A � a : w 4 c; 'a �«'s�:.' ,t3.� Y- xa = ,y.=as �♦.n a ;f3 "9' sr 't'�+A„ ,o„ 't .. >,CSp°wfsn`.?Y�: :..,, t,r♦sc.ds• � "� r '.f^= .... a �3D�Oi '_ dx i D 4au =A2* 'o-.;%'= 'jC¢,». D SUMMARY OF WATER COST COMPONENTS FOR 1996-97 Source of Supply `rATreatm�nt > Fisyrut;on,..;..;.:' Total Operations and Maintenance $4,989,771 Rng >31;428 45$ < > 51,226,951 ; $7,645,180 Capital Outlay $O A $0 $500,DOD $500,000 Debt Service $8691200 22,fi00} $2,044,700 TOTAL $5.,858,971 , , $10,189,880 y.' a 'YS• J W^'rte > 4 - SM', \,f i 'a <3. .Y Y{ .. ♦ }X :Percent 11pp1icable to£a1 P'cly: ` �� �a Ki}m� r 23oIo = � 39D10 "=r,: � ;43 ::: ......A... ._,.:..w. ... '...:, n......v. .n......v M.am✓.,a n......,,,.,n.,,.,...w;a:.,.= .... «,..n., ..:.. .:. ....n: n..:,t.... y .....>}R....n�.n,Q`X,:.S.,na,,.,�nwn..:S ATTACHMENT Rate Agreement Page 8 7"?,7r APPLICABLE RATIO - EQUITY CONTRIBUTION i SUMMARY OF'WATER COST COMPONENTS FOR 1992-93 Source of Supply : Y TxeatmEnt ; ` Dlstnputwn H Total w << sr Operations and Maintenance $2,727,837x} N.10931'?i3<;} <'�'St't 9.ZQt $4,792,051 Capital Outlay $O >>KK xD >, $600QOD: $600,000 Debt Service $269,200 $189,400 #¢.•# S222a600 $681,200 t TOTAL $2,997,037 $1,143,913 $6,073.251 L a� 1>932;3Q1. ?Yr''�'s'`G• ?:..`Svoa`"""'K^�k`�i / ..}, :T; ...:)Y:r },::.Me^. ..k`;ry. ?v3%"'>.s<:l"Cis:�wa,:s:;Ei,:. .::....,;.. .siz:: n'<:tYs"'t:L<... • ,�,/ .,�,�} {rr�� /v�,`�` .'sl�` x7.�.,ic�' m�'" '� ` +�n,.•lc� r .:FE'S ..2 'S' 3!� �L 3- _ T a:..::w»x�.w ww.cuaw.•....ax:ua ., ;.c...n:..rta:xLo.: >w�..w,:saww,,::. ... SUMMARY;OF WATER COST COMPONENTS FOR 1993-94 ' Source of Supply INFO %4x? J�tw?^•!iprr•.wl:+rQ'WS .nr+ rM' n }:: ••• Total Operations and Maintenance $2,984,693 r= tS,140k ;, $7,a3Q,477 $5,431,310 Capital Outlay SO i m3� t b s; t �A300c000 $500,000 .Debt Service $269,200 $952,900 kY a>,.tw $222,60Q s $1,444,700 TOTAL $3,253,893 $2,269,040 RjnY 'x} h $7,376,010 < t o w .sr xw^� p�m/w Lm+- ^,n < r -+�r^• +� �j . : ''t"C+��w.ay� �i.4; i r?':.*tixx�;tfi,�ck y�i:�fcX� s. .. »inix'� A. •r � G 7s/> ..� ?7� < F f ? ��d'�`r'S'z,.�.ars'.�A: SUMMARYsOF WATER COST COMPONENTS FOR 1994-95 • Source of Supply Total ».:ri;<:.::}:,. . .y,Y`�:?p'o}ri.:Nyaee:. s;.x.••,,.s..xr...xxr...v^-ex^, Operations and Maintenance "` ' 61 $3,664,789 �G;se2��;$1'r34,�;425$ � ;��y� §1 �54�62�� $ . 63,676 . Capital Outlay , SO . ; $500,000 Debt Service $2,044,700 TOTAL $4,533,989 $2,297,158 $8,708,376 �" 'C �"Y�' :2L. \ic":':48„h' Z x`'r;':a �S x }d ♦>C.at aC IY'si^Y3%xtt t'•L%EY}7''i.S�w•"u"n ry f CxxaY�.^n <xY�'"�,'}�»�',•Mi.�'>:r` ry x}:�... w� �: L°" �Y° i :%F}Y +: Q :u u S 7}, a .x.•, ^5.' }}�� A.„ 'f4c R,LA/rF' �•>� S. 3 x:::YY 117:7Y'r`€""; Yah;u'Yr>J 229ro U a^•n ":: n SUMMARY OF WATER COST COMPONENTS FOR 1995-96 Source of Supply .:. To tal $4,822,812 x ,J. aa:r » r Operations and Maintenance �: �'�•�" ^ z� �,�,"'€.': w Peair ^fit.'35„{?02 w>A �$�,�X5,575 $7,345,389 �S? >r&. rR�'pk• r'x,fit Capital Outlay SO �rs "$Q« $ 40 UO(r $500,000 Debt Service $869,200 $952,900 > ? x f222,$�0 $2,044,700 TOTAL55,692,012 $2,309,902 ���=3 -0��188�575� $9,890,089 :-?��:,��..T"�^`"" �:��'+�'•,:�,'�'�' .:eg;,srcxx?^� p,•: wro..n. •.yyvxusr:xp;s ,ye i< wr.•,aro '4>`�^.ro ;Sf x3 frh< yr SUMMARY OF WATER COST COMPONENTS FOR 1996-97 Source of Supply ;4> k Treatingnt v'; "u' E��stnbutiorl A `f Total Operations and Maintenance $4,989,771 $7,645,180 Capital Outlay SO ?, «'>`$D }r„'3s $SOO;DOOf $500,000 Debt Service $869,200_ $952,900 :`, ..^ • .> 222:600'x> $2,044,700 TOTAL $5,858,971 $2,381,358 $10,189,880 s..Y;;vr<<res."X w:<`73t.,S?va'>:^: �, ra'„m�.vr.•7^:;:,�s:2viY':^ e r L 2 :.:to .� w ;. YY^:r^a<o: h , x r.s� n,� > x ;' - ♦ ct L �k t•'•,S.4..w +. �{^2';O�;yY. C2-zz ATTACHMENT Pate 9greement `XHIB'T � A 9 UNIVERSITY'S APPLICABLE PERCENTAGE (RATIO) OF APPROVED SEWER RATE STRUCTURE .As required in Paragraph 3, the City.has developed a five year revenue projection for the-sewer system.- `The-components and,related percentages of the total revenue requirement for FY 92/93 through FY 96/97 are shown,on Schedules B-1 and B-2. -1. Applicable Components-to the University The University-shall pay the applicable.percentage cost of treatment, collection and pretreatment, less any cost for debt service related to the continuing equity investment in a portion of the sewer system. 2. Applicable Sewer Ratio for the period beginning July 1,1992 and.ending June . 30, 1997 The City is.currently making modifications to its sewer system to-assure continuing compliance with State of .California effluent _discharge requirements., These modifications are being performed in three phases,.each-of which has been approved for low interest loan funding through the State Revolving Loan Fund administered by the State Water Resources Control.Board, Division of Clean Water Programs. The University may choose to participate in the financing or pay its capital share of the revenue requirements directly. The appropriate ratio to be applied against the City's commercial rates will depend upon which of these options the University selects. A. Percentage of rate structure for 799211997, ityv pout capita!contribution for equity interest in Sewer System Upgrade The.University shall pay the average of the five year percentage cost of treatment and collection and pretreatment, or 100 percent of the city-wide commercial rate, if it does not continue its equity interest in the sewer system. The table below summarizes the detail on Schedule B-1: NO EQUITY CONTRIBUTION • 92/93 "100% 93/94 100% 94/95 100% 95/96 100% 96/97 5 YR AVG 100% ATTACHMENT Rate Agreement Page 10 �XH'B'T "A'� " S. Percentage of rate structure for 1992/1997, with capital contribution for equity Interest In Sewer System Upgrade r: The University may elect to make an equity contribution to the sewer system. upgrade. The City will adjust the percentage indicated in paragraph A above ;. as necessary,if the University elects this option and when payment is received. The City anticipates the applicable percentage of city-wide commercial rate will be reduced to approximately 70 percent, but this percentage will be refined when project costs and applicable debt service is established. In the event that N the University chooses this option, this Agreement will be amended to reflect the revised ratio. The table below summarizes`the detail on Schedule B-2. EQUITY CONTRIBUTION 92/93 93% 93/94 63% 94/95 64% 95/96 65% 96/97 66% 5 YR AVG 706A - 4 .s r i c ;2- -zy ATTACHMENT Rate Agreement Page 11 ��"����� if�lf APPLICABLE RATIO - NON-EQUITY CONTRIBUTION SUMMARY OF SEWER COST COMPONENTS FOR 1992-93 10 Collectlop`s' :PietrsatmeDtr" r rTr�atment m.. 'r {Total F;: wF',imu Agar a s < Y,a:i ::.., r s }i y F• h J ?. Operations and Maintenance ~5 9 8567;770 u) < $�64,54 ya 5209.684;ah �S294f) I)Q ! i`:a3..^w ,u,�'°Si:w i £ir'J3 r x s•�iri i G'<ai1:'yxa•`rY: .p ' '�'iu „wY v<q'v.��'or#rO s%YM� i <`1�'! Capital Outlay ti€wm 50 �° 'z' ' •50^ $535.80}' "�t'ra35.8D0; si Mixt a • a.y'Y L yecJ 's ?,� sir :e� Es.�;sh >tF.c`a,. '� Ljr:J<a�. b t •�".�'"x Debt Service . izv'xgi,•. . >.. :.::.a.h vsx :}{-:. . .. :,:.1Y v.,a: r.,tirfu. ..a... i .. >,...Y�. X819 270 .. zfi4;54fr >xi,` `X2,7,4.5:38!1 <�'S$:a29.20t3 TOTAL 'Cq mow. t„ w A�i'�J�r,UJ:' �+••.i4`L��;{'^`.^S� �h <>Y { k. �"N IX v� r � )v^'<N ih%�V b" :�'li.'� �� Yy 'i ^.,' r ?,�, Ei Yn,.Ky) , } �<` ' "."xt' .4� ' ii'`"'ra''a•i7495' ix .. 'l00;°.Io t'eCer►�1�pp�it ,te�o�'�%�ay x.4..00.Awaoa.'im»¢.,...aoY. .. nN.oYYxxs::xtt. an� SUMMARY OF SEWER.COST'COMPON ENTS.FOR 1993-94 .:. .Y M4xiri.: „ ",,��• Pretreatment F• Treatmehin ,,: � ��, Operations and Maintenance. 5598158 i'x5rf�2714a �n > r$23200534 ' ) 530 pp99 ." .){ a4 F �)) F i.kh 1 2, Capital Outlay ! M n�! N'3 Lv? ¢i yH: � �w:��<i G'3'�YY��• boa. s Xu� {y.` s.i Ov J)G��+�':;.} �:'t�G, i uv Yxf Debt Service TOTAL Gx F.ir h },< W.,r n : �$.` a .. 847>658 :. 5372>�7,4 .<, $4..,820,695. ,$4 S!Y.K,wY Sw mJ:b '.)IM'^:G..,:,.y' M'^•rv' vM!,.r Mry t�. ,H<•n.x�'s v£..�,,,x•..dpi'>:"9:'.n .?{s,.E.�n•i�ys?;' k"iSSLL.`2F ,i�isC v l i.{a°. iM "� 3. �^'"C��yy. • .@*.^'t s�.`��"�,{,,.w",.'w�uvos2n7��'�^`�' 'fS'y�""yl ' Fv. ,� i • L'C' i h MCr FAb S}....:.;... h.: 3 Pe cent APp c�bte fa�a1�olp � "�`' ,.:7 5�o i < s 345 Y� 7�.r 624 ri<;::>;,;,:<h: r^•1 QQ°I? SUMMARY.OFSEWER-COST COMPONENTS:FOR 1994-95 Operations and Maintenancer:)F3iL%u^`v•+^4Y}Ec rz `� {x\S"n'•i •F$Y J.{.i3w'i'k�tvi i'sh�'arsa ri yr�ox Y�4'STA"3' 6P Q63, .Mxx}`wCrrMc$ 0 Capital Outlay " 3CaMs#a4sry,3xS$#`+ 7r4 ? 3 k s k 5W� • � r w .• �� �,L �ib•i '0's i:sx 3.� ,six{y{s�,esar }.�•ea�• `C.X.�L. •� • . Debt Service <<, 5254;500 : ia;" may, SO $� 866,400 )ur� $2,117,90tt 5..'x,.ta maw x us Rah<Q.< •< .t':u' >:.`{i` ox C' o.a+M �.. TOTAL S$77,d66 a $18.1,412x,.,z> . 5�t. 55;7804x j$5,$i4,65$ YSH ^n• J"a' ✓ ,: ""'�„ NR, T t s >: k r:•aL^rx<x i`ri rv'a«o,.•a v vron$ 4C5• `TIGrLLi i[.A 1 �Pi t ��� 'ii3s� • i��w. <��.' .}�5°/6ii i?'x"a.�sF;Foi:v: ,rvo ��0��a3`f<> r�'c<F x 3.. $2 fb ) <icbrJf};~ykts"i,a �`7 W �i�...ww.wroaxa.: a,v. •.+a.:✓:`�,,:sL}::.x�.cF"�.a.L.L'.��iRiw..wa....,v. .:..:..... ... '::`,�:n.c ..i r....,n�1`v v..w.,,.:,,,..:,C.::`t:'is�asr�.s.Mw.F..wraw......:uua,wc,...c..a.:G.a. ..,,.v..wr..,SwF SUMMARY OF SEWER COST COMPONENTS FOR 1995-96 ,�` ;Cotlect�on�; Pfetreatriient,�`�'�i 7reatmenta;`w., '�;�;� �Cata����., Operations and Maintenances 5657263ti ,'�; x $190,488 !52,557,8613 r> z3, 0 ;6�7 va 3' .:rY {?x ,r{y�y( °rid BM+ i r 'S'£b i C i3.x,„ r fa3:X•E� K Capital Outlay $g5d&4$` � i3$gSa 646% �asf'.ivtNr '\ Debt Service ., .« ,. , rr<i.i a<rkMe.i>fs.a- TOTAL "` 59,087.63 n'� 90COB"W114 y486,E • 4G w°'°`T`....F...s.ssMx :>'�'�: :.�, x;.an::.Yr}..w.,y mi., .,i.:aoYn:):":[:}>£7:r.}.xnYm...:i^7;.;"_k":im;.;•?s:•. ri�.W `��A:TV:Jm I ��r r.�• '(E.FE.tiv }::`.G.1` i.�f� ry ,si._ .. �\<.. S '+F' � ,} .` n .w'�rn �. .Y'r'v vM0]::(} SFJ eYR]NYMG+r��"xaYSry ...!.,TY,u.}i545nrvrvk. ::4i,Wa,.v.}rv...,hl)Iat4rv}yall).E:$j5nv .\nv. W,v..>m 'D)}Jr.F'."rviv.J:,....vY: SUMMARY OF SEWER COST COMPONENTS FOR 1996-97 . ea. Operations Operations and Maintenance ; `' 5689,427 $193,80$ h�r52.S95.6$3 ,�S' rk33,S84.898 } Capital Outlay Debt Service .„;.,:•,£,';$25y1500 _. ,i:4::.SGL.:$0.'. .° • :..5.1;866.400:.s`x >�.$2;117,900•x. TOTAL g';: Y:E. a o x ar. or�'c,.,.,3�""."a R^L"""$�.,o�G:.s'•kr, <.rR' .... • ",Lr s F: :$ 100�J°` ATTACHMENT Rate Agreement Page 12 " Y APPLICABLE RATIO - EQUITY CONTRIBUTION SUMMARY OF SEWER COST COMPONENTS FOR 1992-93 r.t¢` ..r:aJJrs,>»xo.....rc.:>:>._.:..> :^:w�.>:•:..:.;.^:•>Yar::arca:>:nr-..>:tc>:a}:•xoxt•nnrox..r ' ie'0 ( nf<>T of • .c. ..;, ti ..: > > > v a #�,� tAs �fw'. •� ��4peGtipnK fi�P.reVeatment �, ,��,,' Treatm�n#��. � t.��r �,T�Bt�ff�{� .. J4Y.n..a..,:.•.}.v4), 1�6R"+.ri '.2 J \ w t u/i i s '<LY t�``AJ,y'.q0.sa4t�Y!•ff.i\r..t`r ... n. v r �Operations and Maintenance � I-I b{}x + irr°Lr'c:frwJ. t.LJolf . 567 t. 535p�y� 53 uwY Capital Outlay Debt Service e,wr••c:•+ H rr, t fL ^ PoyIS.> $251,500s TOTAL $819,270 $3.729,200 $3,729,200 N:L.M F t.. Y.•. "`T(f� [f .fiH w>. q>�. X +Y.f �h FIf SY, t� Y .. \ t.. �". �jQ�� SUMMARY-OF SEWER COST COMPONENTS FOR 1993-94 ;. n::2G'2a..:;We:?:..n:rt-T.'n.2L•i>imity.2:�Y.aim>.w:2.:ivnei..i..Ju:rv.tS.J.n:i;f.a.. u:::c+.„`i..'y^>:. `i.,J.,m .::r•:n.. , T � k r r• `x i.Kfi^"'t :a oYaa YxM �' ,t Operations and Maintenancea$596158 iM?; $a2,774 , jft$2� 2�,063x $3`t�fl.gy�8`,995£ Capital Outlay {L• ks{oY'}�. Asa a:Sv� v �.,i �f - ;>.sz..;,..a�:d'...La:.ixe.,,..:vwe:.>•s'.�m}.. t;l..awzo>;:uvx.� Debt Service $1,848,600 $2,100,100 TOTAL • y $847,658 ;>ax»`x];72774H $4,620,695 $5,641,127 .,L"+"r'^`:5.,7`•'.E\'w2Y�'4'`'W'a�`'u�£a'! "Y "`�l"` `VY5>: r� of<$, r`xc°Y'^4J"^x^snJ-z. :'.s'XJm" f u ., wrcx, w }» ,• Pgrrent A��1�,Cab`ie io OdfiRG1�; �`%��`„,tom M�1% �� ,t�r ar >��, 340 M \ wgw,rrv.,v:.tt wat..uw..sa,...,...i:t•.�.,. t�C,tWSG:.:G'�:w.,�w.`t�2 ,:w:w:.,.i.:::a..c.cm,,.,,..i>v.. :.,to...r#..,:....isaGk:taw,wawaww.<w.vi<u,§aicHr,::u�w«a,G.n6 SUMMARY OF SEWER COST COMPONENTS FOR 1994-95 � � .. .• - w'�Y +.t>xkN'Fr:�d, „' 4iTCpSir1> 7.3,{. fe3re8tment fi :.: Treatmerft „zbtaiati : k+�:». ax J wq,vf t"'Y`k^k rykx u •,..,{ o y,o �.u i 7 ar < rrt+ x +�+itu Operations and Maintenance .: 56�b,966 �t$1$ #412 $2:46;067w Y�` $324 ,445` . ' axA J xJ. ,a v'u x A u• S .rx { �i3 i x:t r #{�waG�J{aL i 4r Capital Outlay Debt Service $251,500 ;$Q $1,866,400 $2,117,900 TOTAL $877,466 $x$ 412; $4,755,780 $5,814,658 »- 66acr�?,":"A,�ro+^\w�tea. ��• b g�xy t ,v�rk o`o ar^"'v:�,•ua=J.,.q,: k¢w;mro>•�,a ,,,,: >. .^•.t3 "s'�ia'�3"°,.` '�ry,�r xe.,,7<� t,�/r t �1�5 �'�.&S.K+•�, Jia �,I�r�;' r v x. {"S Ca.:2.r \:a r k.. J r. �r .. - j -+Zi.w�� �� �' �i�\`t JCt3>x:3�. >I�7Ya�:?�,� iu a'4� tr Jt��axia'�x n, tk�ii:.�f,`c.�:'»w• '5 ...�... o:G3.`v.-w. +unvcwowkawiwc" �awA.a<fr�'cn.».�,tjtu:.,x xaoa.�'..:wok�iw.o.rx` F:way�t....w.v:>.,.::..v.:.vuwR�,G.m:.:t`,iCwissw.tomu..'xaJ:lvh•3: ,Jwwv6 SUMMARY OF SEWER COST COMPONENTS FOR 1995-96 ���{�.S:.,P.1rl��!r� k�N' n�.:JFL�eGL,1�G,.tn ^`f�.4�Jt��I TKi�G')lt wtv9rh�Y $'i'`i+�{ Yt�'4 Q.zS•�'y operations and Maintenance P Outlay Capital p y Debt Service $251,500 $2,117,900 TOTAL $908,763 ur `$790'd$6 $4,878,914 $5,978,163 ��`OY.`S^�Y.iei'e'`i.,`5�{J,."C"' t"iw'�•.{Y`Y+".'�i:Yn�n�'2�"";'k�..: <:r`.:.. SL'h'Rv",�,..".x>'°"r„w \, _`iy<'^ 3'"°v r.,:, F .o+•.� .> r' t Sui �.•„}a's�y'<S<�'+,V'..-�.af"aa`x•..a Yvon :: i.:":.,.et- .,,:,�.`;w>:.1,,`l'L.w...:..•. s .,.•.,.:.:,.:...... `::za�,v..::' ' ,`',:�ie .,.a iF c" ,x, ;�J� SUMMARY OF SEWER COST COMPONENTS FOR 1996-97 �;`.N�t_o71$CtiOtf°, `.a4rxPtetreatrtfeAt ,; { 7reatm2nt�;�?.;�: `��µ;�TOtai<�ryfa:. rr r Fr »�•t r+y Yr Yy �< v :x••x rawowaxtox Operations and Maintenance 'caY} `$6$9,427 ; $199,808 $2fj95,66353,3$4, 98 Capital Outlay �Cv Kw�M v...✓�O 4J \t y�`+ Y�t/<OK M. Lgv n, A4Y�T`� Debt Service TOTAL $940,927 ; $i 99,808 < $5,018,095 $6,158,830 Yx+:trpa:aM » un•,. <+M•>�m�P a \ r.r ,•>. w R'C 4 �U s..i ♦[`trN+vJw�gY.. w Y� x„ a4' 2 �, ,< a G a �t^`7t r a Percen7 pCable to a ° � ;91 >w:M., 3 Vin.::: L -yp y`�� F • .Y'YSv +t`"nrk 4 4 � \ t. \ 31!Y- J i\`f') �,• V \ am. •:.,.a, x•.w ',..:'»�4•.>o#.r..,,.:.:ak — i �z z� ATTACHMENT ' EXHIBIT "B" A-04-93-CC AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND CALIFORNIA POLYTECHNIC STATE UNIVERSITY REGARDING OPTIONAL EQUITY INTEREST IN THE WATER AND SEWER SYSTEMS THIS AGREEMENT, made this 5th day of. January , 199 3, by and between the CITY OF SAN LUIS OBISPO, CALIFORNIA (hereinafter referred to as "City"), and CALIFORNIA POLYTECHNIC STATE UNIVERSITY (hereinafter referred to as "University"). WITNESSETH: WHEREAS, the City and the University have a long-standing and unique relationship with regard to the co-development of water and sewer systems; and WHEREAS, it is the desire of both parties to continue that relationship; and WHEREAS, the City is upgrading both its water treatment plant and sewer treatment/collection systems; and WHEREAS, the University wishes to update prior agreements regarding its operational needs and related equity interest in the City's water and sewer system; and WHEREAS, maintaining an equity interest in the City's water and sewer . systems is solely at the option of the University. NOW, THEREFORE, in consideration of their mutual covenants, the parties hereto agree as follows:' 1. WATER SYSTEM The anticipated modifications to the Water Treatment Plant will assure continuing compliance with drinking water quality regulations as well as modernize the facility. The University wishes to purchase an equity interest equivalent to 1000 acre feet/year or .9 mgd. The plant design allows a factor of 1.6 for peaking requirements. Multiplied by .9 mgd, the University would require 1.44 mgd capacity in the 16.0 mgd plant. 7 A-04-93-CC I J ATTACHMENT NEAT "By' Optional Equity Interest Agreement Page 2 If it chooses to maintain an equity interest in the plant at the required level, the University agrees to pay the percentage obtained by the division of 1.44. mgd 4. . .. (University's equity) by 16.0 mgd (plant capacity), or.8.93%, of the total project cost. The estimated cost to the University is $1,020,000, which will be refined upward or downward by letter when the project construction is complete, subject to the total ,�- contribution ceiling noted in paragraph three of this agreement. 2. SEWER SYSTEM The current upgrade to the.sewer system has three phases. One phase upgrades the collection system ("relief sewer main"). The other two phases upgrade the Treatment planta The upgrades to the Wastewater Treatment Plant relate to meeting discharge requirements. The capacity of the plant will remain at 5.1 mgd. The University wishes to purchase an equity interest in the Treatment Plant equivalent to .471 mgd. The.:current equity interest in the collection system is 1.2 mgd, required due to infiltration and inflow and wet weather peak flows. A. Treatment Plant If it chooses to maintain an equity interest in the plant at the required level, the University agrees to pay the percentage obtained by the division of .471 mgd (University's interest) by 5.1 mgd (plant capacity), or 9.24%, of the total project cost. The estimated cost to the University is $2,700,000, 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. Collection System 1 If it chooses to maintain an equity interest in the collection system at the 1.2 mgd level, the University agrees to pay 7% of the total cost for the relief sewer main. The estimated cost to the University is $284,000, 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. The availability of funds for this agreement is contingent upon the approval by the Legislature and Governor of necessary funding in the State budget for the fiscal years included in this agreement. ATTACHMENT yy Lff Optional Equity Interest"Agreement Page 3 3. RECEIPT OF FUNDS If the University chooses to exercise its option to maintain an equity interest in either the City's water or sewer systems, the University's_contribution must be received by June 30, 1995. 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 and sewer system upgrades will not exceed $4,004,000. Exercising this option will reduce the percentage ratio of commercial rate structure owed by the University as set forth in the Agreement between the City _and the University regarding water and sewer rates, dated January 5, 1993 . The adjusted water ratio is described in paragraph 2B of Exhibit A of that Agreement; and the adjusted sewer ratio is described in paragraph 2B of Exhibit B of that Agreement. 4. NOTICE All notices related to this agreement shall be in writing and addressed as follows: University City Norm Jacobson, Energy Coordinator City"Clerk Facilities Administration City of San Luis Obispo" Cal Poly State University P.O. Box 8100 San Luis Obispo, CA 93407 San Luis Obispo, CA 93406 Ray Macias, Director Support Services Cal Poly State University San Luis Obispo, CA 93407 5. AGREEMENT CONTAINS ALL UNDERSTANDINGS This document represents the entire and integrated Agreement between the City and the University, and supersedes all prior negotiations,representations, or Agreements, either written or oral, except as described in a separate Memorandum of Understanding by and.between the parties. This document may be amended only by written instrument, signed by both City and University. All provisions of this Agreement are expressly made conditions. This Agreement shall be governed by the laws of the State of California. ATTACHMENT- Optional Equity Interest Agreement Page 4 IN WITNESS WHEREOF, CITY and UNIVERSITY have executed this Agreement .the day and year first above written. UNIVERSITY = CITY OF SAN LUIS OBISPO BY_�Z Directo of Support Services . Mayor eg Pinard Ray Macias ATTEST: oie Glad ell, Cit Clerk APPROVED AS TO FORM: 4 Y *Jg en, City Attorney G'2 -3o ATTACHMENT MEMORANDUM To: John Dunn Date: January 6, 1993 City Administrative Officer City of San Luis Obispo 01 From: Frank Lebensi Interim Vice President for Business Affairs California Polytechnic State University .Subject:. MEMORANDUM OF UNDERSTANDING Water and Sewer Rates/Water and Sewer Systems WHEREAS, the City of .San Luis Obispo and California Polytechnic State University have a .longstanding and unique relationship with ,regard to the co- development of water and sewer systems; and WHEREAS, it is the desire of both parties to continue that relationship; and WHEREAS, the City of San Luis Obispo is upgrading both its Water.Treatment Plant and Sewer Treatment/Collection Systems; and WHEREAS, other City of San'Luis Obispo utility customers have experienced periodic rate increases due to changing costs; and WHEREAS, both the City of San Luis Obispo and California Polytechnic State University have met and agreed to update the rate structure to reflect changing costs and the new capital projects; and WHEREAS, Cal Poly State University wishes to update prior agreements regarding its. operational needs and related equity interest in the City of San Luis Obispo's water and sewer system; and WHEREAS, maintaining an equity interest in the City. of San Luis Obispo's water and sewer systems is solely at the option of the University: NOW, THEREFORE, agreements setting the conditions and terms for this relationship have been developed by both parties wherein a payment schedule has been agreed to by both parties which would be funded through California Polytechnic State University's Major Capital Outlay Program, such funding expected to be approved for fiscal year 1994-95. J ATTACHMENT TERMS AND CONDITIONS: The funding formula set forth in the referenced agreements by California Polytechnic State University assumes no equity contribution to the City of San Luis Obispo for the upgrading of its Water Treatment Plant and Sewer Treatment/Collection Systems.. If the University chooses to maintain an equity interest and funding is available, the fees will be recalculated as stated in paragraph 2B of Exhibit A and paragraph 2B of Exhibit B of the Agreement Regarding Water and Sewer Rates. If this Memorandum of Understanding is acceptable, please sign, date, and return the attached copy to me. Thank you. ACCEPTED: City of San Luis Obispo by: January 6, 1993 Jo n Dunn Date Cit Administrative Officer �.2,