REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
October 8, 2019
FROM
GARY McBRIDE, Chief Executive Officer, County Administrative Office
SUBJECT
Title v
Agreement with Chino Basin Desalter Authority related to treatment facilities and services for the Chino Airport Groundwater Remedial Project.
End
RECOMMENDATION(S)
Recommendation
1. Approve an Agreement with Chino Basin Desalter Authority for the design, construction, permitting, operation and maintenance of certain treatment facilities and related groundwater extraction wells and conveyances for the Chino Airport Groundwater Remedial Project.
2. Delegate authority to the Chief Executive Officer or the Director of Airports to implement the budget process described in the Agreement, relating to design, permitting and construction of the treatment facilities and related conveyances, the operation and maintenance of the treatment plant and extraction wells, and payment of replenishment costs, subject to review by County Counsel.
(Presenter: Gary McBride, Chief Executive Officer, 387-5417)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Provide for the Safety, Health and Social Service Needs of County Residents.
Pursue County Goals and Objectives by Working with Other Agencies.
FINANCIAL IMPACT
Approval of this Agreement will result in the use of Discretionary General Funding (Net County Cost). In accordance with the Agreement, the County will be responsible for allocated capital costs, well construction costs and operations and maintenance (O&M) costs associated with the Granular Activated Carbon (GAC) Treatment Plant, extraction wells and associated conveyances. The County has estimated one-time costs for the design, permitting and construction of the GAC Treatment Plant, extraction and treatment program and the ongoing annual cost of O&M over the anticipated 30-50 year period to complete the tasks in the Remedial Action Plan to be an estimated $24.5 million to $32.0 million in a 30-year period, up to an estimated $39.5 million to $52.0 million for a 50-year period. This amount includes estimated one-time costs of $1.98 million for the design and construction of the GAC Treatment Plant ($1.1 million County share), $500,000 for conveyance piping to the Treatment Plant, reimbursement of already incurred well construction costs ($350,000), plus ongoing costs of approximately $750,000 - $1.0 million annually for 30 to 50 years for the O&M of the County’s portion of the GAC Treatment Plant and County extraction wells. The estimated total amounts ranging (without replenishment water costs) do not include the costs related to property acquisition, design, permitting and construction of required additional County extraction wells and associated conveyances, which are estimated to be $13.5 million.
In the future, the County may incur additional costs related to replenishment water pursuant to the Judgment in Chino Basin Municipal Water District v. City of Chino et al, Case No. RCV 51010, which identifies water rights’ holders in the Chino Basin, and other related agreements. It is not currently anticipated that replenishment costs will be owed, however, in the event replenishment water is needed that cost may increase the County’s overall costs of remediation. For Fiscal Year 2017-2018, the replenishment cost was set by the Chino Basin Water Master to be $697 per acre foot of water. Based on the volume of water that must be extracted for the County’s remedial program, the replenishment cost at the Fiscal Year 2017-18 rate would increase annual costs by $1.2 million. The amounts provided above are based on current conditions and the information available to the County at this time; however, the amounts stated may increase if conditions change, for instance additional contaminants are identified or treatment requirements are modified.
To date, the Board of Supervisors (Board) has approved $20.0 million in funding for construction costs associated with this project. The County’s current five-year forecast, as shown in the 2019-2020 Recommended Budget, identifies the need for additional one-time funding in the next three years (an additional $17.7 million will bring the total potential project funding to $37.7 million). In addition, the current five-year forecast also reflects the need for ongoing funding of $2.0 million per year. If needed, requests for additional funding will be included in future recommended budgets. Approval of the necessary budget adjustments is not requested at this time, but will be included on a future quarterly budget report presented to the Board for approval. Sufficient appropriation will also be included in subsequent recommended budgets.
BACKGROUND INFORMATION
This Agreement outlines the cooperative treatment arrangement between the Chino Basin Desalter Authority (CDA) and the County as it relates to the design, construction, permitting, operations and maintenance of a treatment plant, onsite and offsite County and CDA wells, and necessary conveyances for the Chino Airport Groundwater Remedial Project (Remedial Project). Through this Agreement, CDA is assisting the County in the remediation efforts required under Clean-up and Abatement Order No R8-2017-0011, issued to the County by the Regional Water Quality Control Board - Santa Ana Region (Water Board) on January 11, 2017. The remediation efforts facilitate the treatment of groundwater contamination on and around Chino Airport (the plume) and allow for the ultimate beneficial use of treated water through CDA’s drinking water system. The contamination emanating from the Chino Airport property consists primarily of volatile organic compounds (VOCs).
This agreement also benefits CDA and the Chino Basin. CDA was established to capture contaminated groundwater in the southern portion of the Chino Basin and to help the Chino Basin Water Master and Inland Empire Utilities Authority (IEUA) to achieve “hydraulic control” of the basin to stop the flow of contaminated groundwater into the Santa Ana River. The Chino Basin Water Master and IEUA are under orders from the Water Board (e.g., CAO R8-2012-0026; R8-2007-0039; R8-2005-0033) to obtain hydraulic control to control groundwater quality impacted primarily by nitrates and total dissolved solids. The CDA purifies brackish groundwater extracted from the lower Chino Basin through an existing desalter facility and distributes the drinking water to its member agencies. As provided in this Agreement, the County and CDA will first treat water through a new treatment plant designed to address VOC contaminants in groundwater emanating from the Chino Airport property. The water will then be conveyed to the existing CDA desalter facility, before the water is distributed to CDA’s member agencies.
During 2016 and 2017, the County prepared a Feasibility Study in order to identify and evaluate options to properly mitigate environmental impacts from past operations and historic activities at the Chino Airport. The Final Feasibility Study, dated May 2017, recommended a groundwater pump-and-treat system be put in place to provide hydraulic containment of groundwater contamination utilizing groundwater extraction wells both onsite and offsite of the Chino Airport. In addition, it was recommended that an extensive groundwater monitoring program be put in place to monitor progress in the reduction of contaminant levels. Based upon the Final Feasibility Study, a Remedial Action Plan (RAP) was prepared proposing implementation of the pump-and-treat system, in coordination with CDA. The RAP was reviewed by the Water Board and redesignated as an Interim RAP (IRAP). On January 29, 2019 (Item No. 24) the Board of Supervisors (Board) approved the IRAP and related CEQA documents. The IRAP is currently awaiting approval by the Water Board.
The Agreement with CDA requires the design, construction, permitting, maintenance and operation of a treatment plant on CDA property to treat water pumped from County extraction wells and CDA extraction wells located both onsite and offsite of the Chino Airport. The extraction wells are designed and sited to capture and contain the VOC plume. The Agreement also provides that a new treatment plant will be built on land owned by CDA and will be designed utilizing a two-unit system, whereby water originating from CDA wells I-1, I-2, I-3 and I-4 will be treated through one unit (CDA unit), and the County’s extraction wells, in addition to CDA wells I-16, I-17 and I-18, will be treated through the other unit (County’s unit). This allows for greater efficiency in operation and maintenance due to varying requirements for treatment of the water, and a better ability to conduct separate cost accounting.
Pursuant to the Agreement, the County is obligated to pay for the design, construction, operation and maintenance of the County’s unit, including piping to the desalter plant. Additionally, the County is obligated to pay for O&M for the County’s extraction wells. CDA is obligated to pay for the design, construction, operation and maintenance of the CDA unit, and the desalter plant. CDA is further obligated to pay for O&M relating to CDA wells I-1, I-2, I-3, I-4, I-16, I-17, and I-18. The County is responsible for paying for any new piping required to connect CDA wells I-16, I-17 and I-18 to the new treatment plant. In addition, the County has agreed to reimburse CDA $350,000 for costs already incurred by CDA for drilling work and equipment related to CDA wells I-17 and I-18 which are impacted by the VOC plume.
The Agreement provides for the treatment of water in the Chino Basin utilizing water rights available to CDA because of its implementation of CDA’s hydraulic control project. Pursuant to existing agreements, the Chino Basin Water Master charges a “replenishment fee” to any party that pumps water from the basin without the right to do so. In the Agreement, the County and CDA agree that replenishment costs related to the groundwater extraction are not anticipated to be owed as a result of the pumping and treating of water pursuant to the Agreement; however, CDA is obligated to manage pumping to avoid the risk of replenishment costs. CDA will monitor and report to the County on a monthly basis the amount of water extracted for this purpose.
The Agreement requires mutual insurance obligations on the part of the County and CDA. The County will indemnify CDA for any third-party claims as a result of the County’s failure to fulfill its obligations under the agreement, the existing Cleanup and Abatement Order or any controlling order issued by the Water Board. Additionally, the County will indemnify CDA for any third-party claims asserted against CDA related to CDA’s operation of the County’s offsite wells, if such operation is consistent with the County’s direction. CDA will indemnify the County for third-party claims resulting in the failure of CDA to fulfill its obligations under the Agreement or comply with a requirement under CDA’s Department of Drinking Water permit.
The second recommendation delegates authority to the Chief Executive Officer or the Director of Airports to effect the budgeting process and reimbursement for replenishment costs delineated in the Agreement. The County and CDA will meet and confer regarding the budget for the design, construction, permitting, operation and maintenance of the treatment plant and related conveyances. After agreement upon the budget and after bids for the work are received, the County is then obligated to pay CDA 110% of the design and construction costs, subject to specified reconciliation procedures. In addition, the County and CDA will meet and confer on an annual basis regarding the budget for O&M related to the County’s extraction wells for which CDA is performing the O&M. The annual O&M costs will be paid by the County to CDA in two installments during the year. In the event replenishment costs are triggered, the County may either pay the replenishment costs, or reduce or cease pumping the County’s wells.
The CDA Board approved the Agreement on September 26, 2019.
PROCUREMENT
Not Applicable
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Agnes Cheng, Deputy County Counsel, 387-5455) on August 22, 2019; County Counsel (Kristina Robb, Deputy County Counsel, 387-5436); County Counsel (Penny Alexander-Kelley, Chief Assistant County Counsel, 387-3267) on August 30, 2019; Risk (LeAnna Williams, Director, 386-8621) on August 30, 2019; Finance (Stephenie Shea, Finance Analyst, 387-4919) on August 30, 2019; and Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on August 30, 2019.