HomeMy WebLinkAbout02/03/1998, 3 - EXTENSION OF IN-CITY RATE FOR WATER TO THE MENTAL HEALTH ASSOCIATION, GROWING GROUNDS FARM, 3698 JOHNSON AVE. council MFe
Feb. 3 1998
acEnaa Report 1�Nubm
CITY OF SAN LUIS OBISPO
FROM: John E.Moss,Utilities Director
SUBJECT: Extension of in-city rate for water to the Mental Health Association,
Growing Grounds Farm,3698 Johnson Ave.
CAO RECOMMENDATION
By motion,approve and authorize the Mayor to execute an agreement for extension of the in-
City water rate to the Mental Health Association of San Luis Obispo for water used at the
Growing Grounds Farm and nursery located at 3698 Johnson Ave.
DISCUSSION
On December 24, 1997, the Mental Health Association of San Luis Obispo submitted a letter
(attached)to the Utilities Director requesting that the City consider extension of the in-city water
rate to the Growing Grounds Fane, a vocational rehabilitation facility located adjacent to, though
outside of, the city limits. Current City policy requires that those properties served City water
which lie outside of the city limits pay twice the standard rate for water. Upon receipt of the
request,the Utilities Director investigated the details of the request and the potential public benefits
provided by the Mental Health Association and the Growing Grounds Farm which would provide a
basis for the requested deviation from the City's policy.
About the Mental Health Association and Growing Grounds Farm:
The Mental Health Association of San Luis Obispo (MHA) is a private, non-profit organization
providing rehabilitative and vocational services to the mentally ill. The MHA operates the
Growing Grounds Farm as a business with the sole purpose of offering employment and training
for people with mental illness. Beyond the unique employment and training opportunity created
through the operation of Growing Grounds Fane,the farm serves as a significant source of revenue
for the continuation of the programs and services provided at Growing Grounds Farm. Growing
Grounds Farm is 75 to 80% self supporting through the proceeds of the farm and wholesale
nursery. Growing Grounds Farm currently employs 42 mentally ill people,80%of whom reside in
the City of San Luis Obispo. The location of the farm(on the periphery of San Luis Obispo)is key
to the success of the program as many of the clients/employees rely on the City transit system for
transportation to and from the farm. The farm also provides educational torus for school children
and the YMCA and operates a small community garden.
The Request:
MHA is requesting that Council consider extending the in-city water rate to the farm in order to
lower their operating expenses when their use of City water is necessitated by declining production
in the farm's wells. The property where the farm is located is owned by PG&E and also sites a
3-/
Council Agenda Report-MHA Request for extension of in-city water rates
Page 2
small substation and power transmission facilities. City water service was extended to the property
in 1966 according to our records. PG&E has paid the bill for any City water used at the site in the
past,however the account was transferred to the MHA in November 1997 and the bill will now be
the responsibility of the MHA. MHA is therefore looking to reduce the impact of this change by
requesting the City extend its in-city rate to their operation.
Water for the operation of the farm is largely provided through the operation of two on-site wells,
with the second well being only recently added. The farm is maximizing the use of the wells
through on site storage and efficient irrigation. There are times(late summer)however,when the
production of the wells can not meet the demands of the operation and City water must be used to
maintain adequate irrigation. Lettuce is grown as the primary crop of the farm because of its
relatively high dollar value yield per acre and the fact that it can be grown year round in San Luis
Obispo thus generating a continuous workload and source of income.
MHA has estimated their future use of City water at 300 units per year. A review of their historical
water use for the past five years indicates their use of City water has ranged from a high of 1099
units in 1997 to a low of 529 units in 1995. The basis of their reduced estimate is the operation of
the new on-site well which as stated previously was only recently added. The hope is that this
second well with additional on-site storage will extend the production of groundwater,adequate to
meet the needs of the operation, further into the dry season and thereby lessen the demand for
supplemental City water.
Based on current City water rates,at 300 units(ccf)per year,the dollar value of the request would
be approximately$1,000. At normal City rates and using only the > 5ccf value of$3.50 per ccf,
300 units of water would cost $1,050. The 2x outside-city rate would therefore be approximately
$2,100. Using a worst case scenario based on their highest historical use of City water at 1099 ccf
the value of the request would be approximately$3,800.
Considering the unique service provided by MHA and Growing Grounds Farm and the fact that
they are not asking for free services,rather only to pay the standard rate for water,their history of
water use and efforts to mm rnize use of City water through the efficient operation of on-site wells,
staff is comfortable with recommending that Council approve the request of MHA.
Staff has prepared the attached agreement for Council consideration which outlines the specific and
unique circumstances under which the extension of the in-city rate would be offered. If at any time
the use of this property and the subsequent use of city water were to change from those uses
stipulated in the agreement, or revert back to PG&E, this agreement would be terminated and
charges for any continued water use would revert back to the 2 x outside the city rate.
FISCAL IMPACT
As stated previously,approval of the recommended action could result in a reduction in revenue to
the Water Fund of$1,000 to$3,800 annually.
Council Agenda Report-MHA Request for extension of in-city water rates
Page
ALTERNATIVES
Deny the Request - Denial of the request would result in a significant additional expense to the
Mental Health Association and may affect their ability to continue to provide their services and/or
remain at their current location. If they were required to relocate,it is not likely that they would be
able to locate to an area as close to the City and other City services such as transit which greatly
enhances their value as a service to residents of San Luis Obispo with mental illness.
Attachments
MHA Letter Request
Agreement
J4
Mental Health Association
Post Office Box 154080 San Luis Obispo, California 93406
Phone: 805-541-6751 Fax 805-541-6867
City of San Luis Obispo December 24,,1997 '
955 Morro Street
San Luis Obispo, CA 93401
John Moss, Utilities Director
Dear John.-
The
ohn:The Mental Health Association of San Luis Obispo (MHA) is a private
nonprofit organization with the mission of maxi_*n+izing the potential of
people with persistent mental illness so they can live and work successfully
in the community. The MHA has worked in conjunction with the San Luis
Obispo County Mental Health Department since 1979 to provide
rehabilitation and case management services for clients who have been
diagnosed with a mental.illness such as depression, schizophrenia or bipolar
disorder.
In 1984 MHA, in partnership with PG&E, developed Growing Grounds Farm
as a unique community-based business with the sole purpose of offering
employment and training for people with mental:illness. Growing Grounds
Farm has since evolved into three horticulture therapy-based businesses: a
small production farm, a.wholesale nursery and a landscape company
currently employing 42 mentally ill people, over 80% of whom live in the city
of San Luis Obispo:
The Mental Health Association requests that the City of San Luis Obispo
extend the In-City water rate to the existing water service.for Mental Health
Association's Growing Grounds Farm. The goal for annual use would be 300
units of water. If the service account is ever closed, the rate would revert back
to the original status. The basis for this rate request is the unique nature and
location of the program, the public benefit that GGF provides by employing
disabled people (primarily city residents) who have few options elsewhere,
and the community asset that the organization represents.
Water is integral to the operation of Growing Grounds Farm. We have
worked to mitigate water use by drilling a second well on the property,
tripling water storage capacity, growing drought-tolerant plants in the
nursery, using drip irrigation in the fields, and hand watering most nursery
plants. The reality is that the success of GGF's program and market niche are
related to the specific products grown. The Irrigation Institute at Cal Poly will
Social Rehabilitation Centers: Arroyo Grande Atascadero San Luis Obispo Santa Maria
Vocational Rehabilitation: Growing Grounds Farm • Wholesale Nursery • Landscape Maintenance
Education • Advocacy T
be working with GGF staff to provide an irrigation "audit' that will examine
current practices and make recommendations for further water savings.
Growing Grounds Farm is a community asset that provides employment for
dozens of disabled people, provides education for local scouts, college and
grade school students, volunteer opportunities for residents, and an
innovative program that cities, counties and institutions statewide have
worked to replicate. We are proud of our contributions to San Luis Obispo
and look forward to continuing a successful and productive relationship.
I appreciate your consideration of this request and ask that if you have any
questions, please do not hesitate to call me.
aim Regards,
Witeter- 1 k
3-S
AGREEMENT TO EXTEND IN-CITY WATER SERVICE RATES TO THE MENTAL
HEALTH ASSOCIATION, GROWING GROUNDS FARM,3698 JOHNSON AVE.
This Agreement, made and entered into this day of , 1998 by and between
the CITY OF SAN LUIS OBISPO (hereinafter"City") a.municipal corporation, and the Mental
Health Association of San Luis Obispo (hereinafter"MHA"), a non-profit organization.
WITNESSETH:
WHEREAS, the City operates a municipal water system for the enjoyment and benefit of its
citizens and rate payers; and.
WHEREAS,the City has established a system of rates for said water service which requires
those receiving service outside of the incorporated boundaries of said City to pay twice (2x)the
rate for water service of those residing inside the incorporated boundaries of said City, except as
modified by agreement of the City Council; and,
WHEREAS,MHA has requested that the City Council approve extension of the in-city water
rate for water service to the property located at 3698 Johnson Ave.,which lies outside of the
incorporated boundaries of the City, for city water used in the operation of the Growing Grounds
Farm; and
WHEREAS, Growing Grounds Farm provides a unique and important service to the community
of San Luis Obispo in providing rehabilitative and vocational services, as well as employment
and training for people with persistent mental illness; and,
WHEREAS, extension of the in-city water rate for service to said property will assist in the
continuation of the services and benefits provided by the MHA and Growing Grounds Farm, and
said services and benefits have been found to provide a unique and desirable benefit to the City
and community of San Luis Obispo;
NOW THEREFORE, in consideration of the promises and agreements, covenants and conditions
stated herein,the parties agree as follows:
1. Water Service and Rate
City agrees to continue to provide water service to the property located at 3698 Johnson Ave.,
San Luis Obispo, CA.. Such service shall be provided at the in-city rate for said service, for use
by the Mental Health Association of San Luis Obispo in the operation of the Growing Grounds
Farm.
J-4
MHA Water Service Agrecinent -
Page 2
2. Water Useage
MHA agrees to restrict the use of city water at the site to the absolute minimum. MHA further
agrees to utilize existing wells and groundwater at the site as their primary water source and use
of city water as a secondary water source, limited to only those needs beyond the capability of
the existing well system to provide. MHA agrees that use of city water service at the site shall
only be for those uses associated with the operation of the Growing Grounds Farm and all other
uses shall be expressly prohibited without prior written consent of the City Utilities Director.
3. Compliance with Standards and Laws
MHA agrees to comply with all applicable rules and regulations of the City of San Luis Obispo,
the County of San Luis Obispo and the State of California in the use of City water, including but
not limited to; water conservation regulations and requirements,the Universal Plumbing Code,
and the cross connection control regulations of the County of San Luis Obispo.
4. Termination
City shall have the right to terminate this agreement to provide water service at the in-city rate at
its sole discretion.
5. Notice
Any notice required or permitted to be given or served under the terms hereof shall be considered
delivered when sent registered, return receipt requested,through the United States Mail to:
City: MHA:
City Administrative Officer Mental Health Association of San Luis Obispo
City of San Luis Obispo P.O. Box 15408
990 Palm Street San Luis Obispo, CA 93406
San Luis Obispo, CA 93401
IN WITNESS WHEREOF,the parties hereto have executed this agreement by their proper
officers duly authorized, on the date first above written.
City of San Luis Obispo, Mental Health Association of San Luis Obispo
a Municipal Corporation
Mayor Allen Settle it Bolster- ite
MHA'Water Service A66L hent -
Page.3
Attest:
City Clerk
Approved as to form:
— . Att ey - --