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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 - --