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HomeMy WebLinkAboutAs recommended by the Intergovernmental Relations Committee, Dept ID AD 15-029 Page 7 of 2 Meeting Date 8/17/2015 Approved as amended 7-0 *Strike sentences in Poseidon Letter CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 8/17/2015 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A Wilson, City Manager PREPARED BY: Teri Baker, Assistant to the City Manager SUBJECT: As recommended by the Intergovernmental Relations Committee, request for City Council authorization to send letters to the Orange County Transportation Authority regarding the 1-405 HOT Lanes, and to the Orange County Water District regarding the Poseidon Desalination Plant Statement of Issue At the July 22, 2015 Intergovernmental Relations Committee (IRC), IRC recommended City Council action on the following Letter from Huntington Beach to Orange County Transportation Authority (OCTA) regarding ingress and egress options from the 1-405 HOT Lanes, send a letter Huntington Beach to Orange County Water District (OCWD) regarding revenues outlined in the agreement between Huntington Beach and Poseidon for the proposed desalination plant, and a City position of opposition to SB 331 (Mendoza) — Public Contracts On August 3, 2015, the City Council voted to amend the letters to OCTA and OCWD and approved a position of opposition to SB 331 Financial Impact None Recommended Action A) Authorize the Mayor to sign a letter on behalf of the City of Huntington Beach to the Orange County Transportation Authority regarding ingress and egress from the 1-405 HOT Lanes, and B) Authorize the Mayor to sign a letter on behalf of the City of Huntington Beach to the Orange County Water Distract regarding anticipated revenues to the City of Huntington Beach as outlined in the agreements between the City of Huntington Beach and Poseidon for the proposed desalination plant Alternative Action(s) Do not approve one or more of the recommended actions and direct staff accordingly Analysis At the August 3, 2015 City Council Meeting, the City Council considered and voted on recommendations made by the IRC at their July 22, 2015 meeting as follows 1 Letter from Huntington Beach to Orange County Transportation Authority (OCTA) regarding ingress and egress options from the 1-405 HOT Lanes Specifically, IRC requested that the letter reaffirm the City's opposition to inclusion of HOT lanes within the project, but request Dept ID AD 15-029 Page 2 of 2 Meeting Date 8/17/2015 OCTA's help in controlling the process and design of the project with respect to Ingress and egress to the City's main thoroughfares (Attachment 1) City Council Approved Motion: Approved 7-0, as amended to continue to the next meeting;and return with stronger language in the letter. 2 Letter from Huntington Beach to Orange County Water Distract (OCWD) regarding revenues outlined in the agreement between Huntington Beach and Poseidon for the proposed desalination plant (Attachment 2) IRC requested that the letter notify OCWD of the City's expectations with regard to revenues promised to the City of Huntington Beach through its agreements with Poseidon (Attachment 2) City Council Approved Motion:Approved 7-0, as amended to continue to the next meeting;and return with additional language. 3 Position of Opposition on Senate Bill 331 — Public Contracts/Civic Openness City Council Approved Motion:Approved 4-3 (O'Connell, Hardy, Peterson-No) The letters to OCWD and OCTA have been amended accordingly and approved by the Mayor The revised letters are attached for the City Council's consideration Environmental Status NA Strategic Plan Goal Improve quality of life Attachments) 1 Draft letter to OCTA regarding the 1-405 HOT Lanes 2 Draft Letter to OCWD regarding revenues from the Poseidon Project i 1413 -215- Item 11. - 2 AtUACmMLNi 1 � Letter to OCTA The City of Huntington Beach has expressed its opposition to the concept of including high occupancy toll (HOT) lanes as an element of the 1-405 Freeway Improvement Project By this letter,the City affirms its opposition to the inclusion of HOT lanes within the project and is informing OCTA of the City's interest in pursuing other options The proposed Freeway Improvement Project includes plans to convert the Carpool Lane (HOV) used frequently by Huntington Beach residents and visitors to an HOT lane This toll-free HOV lane was paid for, and has been relied upon by, Orange County drivers for years This HOV lane provides opportunities to exit at Goldenwest St, Beach Blvd , Magnolia, and Brookhurst St.;all of which serve Huntington Beach The HOV lane has also provided exits for neighboring cities,such as,Valley View St/Bolsa Chica Rd , Euclid, and Harbor Blvd w„ d, In addition to the removal of the toll-free HOV lane, under the new Freeway Improvement Project, all but three of these exits in this former HOV lane will betaken away This lack of accommodation will cause a hardship and confusion to Huntington Beach residents and visitors, and neighboring cities This Project could negatively impact Huntington Beach because of the confusion the HOT lanes will create by not having the proper number of opportunities for drivers to enter and exit There is very little about this Project that would benefit the City of Huntington Beach, its residents, and/or its visitors Unless OCTA is willing to guarantee continuous access for freeway exits and a free HOV lane into perpetuity,the City will be evaluating i remedies �r Thank you w� 40-1 n i r sin ow Item 11. - 3 x8 -216- I. ATTACn" mmmENT #2 August 17, 2015 Orange County Water District Board of Directors 18700 Ward Street Fountain Valley, CA 92708 Subject: OCWD Water Purchase Agreement with Poseidon Resources for Desalinated Water Dear President Green and Members of the Board r The City of Huntington Beach is acutely interested in your proposed 50 year agreement with Poseidon Resources(Poseidon)to purchase desalinated waterfrom their planned desalination facility in Huntington Beach As the project is located within the City of Huntington Beach,we are keenly aware of the issues surrounding the facility For well over ten years we have worked diligently with Poseidon to reach multiple agreements to mitigate impacts to the neighborhoods in the vicinity of the project site and the City as a whole The City of Huntington Beach has agreements with Poseidon with the understanding that the City would receive certain benefits due to these impacts h A �k The purpose of this letter is tolcautI6000CMD that the economic benefits to the City may not be as solid as the City perceived they would be at the time the agreements between the City and Poseidon were approved. With the District's.recentiacceptance of theme rion-binding Term Sheet and ongoing discussions concerning the Water Purchase Agreement,we wish to make clear that protecting the interests of the City's residents and businesses is our priority, The project's economic benefits,which the City deemed necessary to se'cre the community"s approval,were specific and unequivocal, a number of which are articulated and highlighted in the following paragraphs for the District's information These project economic benefits are considered mandatory Conditions of Approval,above and beyond those municipal revenues associated with project permitting fees,construction related sales and use taxes, business license fees, and utility user tax receipts The City has executed the following agreements with Poseidon Franchise Agreement(October 20, 2010)The Franchise Agreement allows Poseidon to build a water distribution/delivery system in the City of Huntington Beach's public right of way Per the Agreement, Poseidon would pay the City$8 00 per linear foot, based on a 54-inch pipeline This amount would vary depending on the size of the pipeline(s) HB -21 7- Item 11. - 4 Currently OCWD is proposing to finance, build and operate the distribution system that would extend from the Poseidon Project fence line to those agencies willing to purchase the project water and/or to OCWD owned facilities where the project water could be utilized It is the City's position that the franchise agreement does remain in effect regardless of who builds the pipeline(s) Section 15 of the Franchise Agreement states "Any other assignment, sublicense, or transfer of Franchisee's rights pursuant to this Franchise requires City's prior written consent which may be withheld at the City's sole discretion with or without cause In addition, if Franchisee requests to assign this agreement to a public utility and or any entity not required by law to pay franchise fees, City may withhold consent until Franchisee agrees to pay the value of the franchise fee through the term of the Franchise " The 2010 Pipeline Franchise Agreement estimated value of the annual franchise fee is currently estimated to be$168,000 or$5,880,000 over the 35 year term of the agreement This estimate is based on a pipeline Franchise fee of$8 00 per liner foot. It is our understanding that Poseidon will pay to the City the$5,880,000 (or actual amount depending on final pipeline design) prior to the City authorizing the assignment of the Franchise Agreement to a public agency which otherwise would not be required to pay a franchise fee Conditions of Approval (September 20, 2010) The Conditions,of Approval contain numerous requirements that Poseidon must meet before a Certificate of Occupancy for the project will be issued The vast majority of these pertain to site and right-of-way improvements and would not affect OCWD However, one key condition is that Poseidon and the City are to execute a water purchase agreement whereby the City would be able to purchase up to 3,360 acre-feet of water at a 5%discount of MWDOC rates and Poseidon would provide transportation of that water Please keep in mind that if the project produces 56,000 acre-feet of water per year,OCWD would only be able to purchase 52,940 acre feet Furthermore,while of less potential impact to the District, it should be noted the Conditions of Approval stipulate the City will have the first rights to purchase up to an additional 4,000,000 gallons per day of additional water from the Project during a declared water emergency(not including droughts)at the same discounted costs,for not to exceed 7 days in any 30 day period and not to exceed 28,000,000 gallons in any one emergency event A yet unresolved issue between the City and Poseidon has to do with the City's Utility Users Tax(UUT) payment It is the City's position that the UUT would result in an estimated yearly payment to the City of$840,000 Poseidon does not agree with the City's position and expects to pay an estimated $50,000 annual tax In addition to these agreements,the City does remain concerned about the potential impacts that the proposed Water Purchase Agreement with Poseidon could have on the cost of the groundwater Replenishment Assessment and the impact this would have on the yearly cost to the City and to our customers In closing,we want to reiterate the purpose of this letter is to caution OCWD that the economic benefits to the City may not be as solid as the City perceived they were at the time of approval The City of Huntington Beach has an expectation that the financial benefits noted above will come to fruition with or without OCWD's involvement in the Poseidon Desalination Plant Sincerely, Jill Hardy, Mayor xB -219- Item 11. - 6 i Dept ID AD 15-029 Page 1 of 3 Meeting Date 8/3/2015 P6y0VCZ Any "� - 'I ✓o7C14 -3 ` CITY OF HUNTIIVGTO EACH ,�y, REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 8/3/2015 I SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A Wilson, City Manager PREPARED BY: Ten Baker, Assistant to the City Manager SUBJECT: As recommended by the Intergovernmental Relations Committee, request for City Council authorization to send letters to the Orange County Transportation Authority regarding the 1-405 HOT Lanes, and to the Orange County Water District regarding the Poseidon Desalination Plant, and authorization for a position of opposition to Senate Bill 331 regarding Public Contracts Statement of Issue At the July 22, 2015 Intergovernmental Relations Committee (IRC), IRC recommended City Council action on the following Letter from Huntington Beach to Orange County Transportation Authority (OCTA) regarding ingress and egress options from the 1-405 HOT Lanes, send a letter Huntington Beach to Orange County Water District (OCWD) regarding revenues outlined in the agreement between Huntington Beach and Poseidon for the proposed desalination plant, and a City position of opposition to SB 331 (Mendoza) — Public Contracts Financial Impact None Recommended Action A) Authorize the Mayor to sign a letter on behalf of the City of Huntington Beach to the Orange County Transportation Authority regarding ingress and egress from the 1-405 HOT Lanes, and B) Authorize the Mayor to sign a letter on behalf of the City of Huntington Beach to the Orange County Water Distract regarding anticipated revenues to the City of Huntington Beach as outlined in the agreements between the City of Huntington Beach and Poseidon for the proposed desalination plant, and C) Approve a City position of opposition for Senate Bill 331 regarding Public Contracts and authorize the Mayor to sign a letter of opposition accordingly Alternative Action(s) Do not approve one or more of the recommended actions and direct staff accordingly • Analysis At the July 22, 2015, IRC Meeting, IRC recommended City Council action on three matters as follows Item 6. - I HB -110- Dept ID AD 15-029 Page 2 of 3 Meeting Date 8/3/2015 1 Letter from Huntington Beach to Orange County Transportation Authority (OCTA) regarding ® Ingress and egress options from the 1-405 HOT Lanes Specifically, IRC requested that the letter reaffirm the City's opposition to Inclusion of HOT lanes within the project, but request OCTA's help in controlling the process and design of the project with respect to Ingress and egress to the City's main thoroughfares (Attachment 1) 2 Letter from Huntington Beach to Orange County Water Distract (OCWD) regarding revenues outlined in the agreement between Huntington Beach and Poseidon for the proposed desalination plant (Attachment 2) IRC requested that the letter notify OCWD of the City's expectations with regard to revenues promised to the City of Huntington Beach through its agreements with Poseidon (Attachment 2) 3 Position of Opposition on Senate Bill 331 — Public Contracts/Civic Openness (Attachmentsi3 &4). Key provisions: ➢ The Senate Bill 331 authored by Senator Mendoza, requires counties and cities that have adopted a civic openness in negotiating (COIN) ordinance, as defined, to comply with specified disclosure requirements relating to contract negotiations with private entities ➢ Specifies that its provisions apply to local governments' contracts of a value of$250,000 or ® more and to any contracts with a person or entity (or any related person or entity) of a cumulative value of$250,000 or more in any fiscal year being negotiated between the local government and any private person or entity that seeks to provide services or goods to the local government ➢ Requires that a local government that has adopted a COIN ordinance comply with the following requirements, the city, county, or city and county must designate an unbiased independent auditor to review the cost of any proposed contract ➢ The independent auditor must complete an economic analysis prior to presenting an opening proposal by public employer ➢ Must be available for review of the economic analysis by the public before presentation of an opening proposal by a public employer ➢ Update of the independent economic analysis to reflect annual cumulative costs ➢ The independent auditor must make the report public before the governing body takes any action to approve or disapprove the contract ➢ Further, the report from the auditor must make a recommendation on the contract viability, the report must be public at least 30 days before the issue can be heard by a governing body, and at least 60 days before any action can be taken to approve or disapprove the contract by the governing body ® ➢ Any proposed changes to the contract after it has been approved by the governing body must adhere to the same approval requirements as the original contract ➢ The local government must disclose all offers and counteroffers to the public within 24 hours on its internet website HB -111- Item 6. - 2 Dept ID AD 15-029 Page 3 of 3 Meeting Date 8/3/2015 • ➢ Each governing body member and staff members of governing body offices must disclose publicly all verbal, written, electronic, or other communications regarding a subject matter related to the negotiations or pending negotiations they have had with any official or unofficial representative of the private entity within 24 hours after the communication occurs ➢ A minimum of two meetings must occur wherein the public has the opportunity to review and comment on the potential contract before approval Environmental Status NA Strategic Plan Goal Improve quality of life Attachment(s) 1 Draft letter to OCTA regarding the 1-405 HOT Lanes 2 Draft Letter to OCWD regarding revenues from the Poseidon Project 3 Senate Bill 331 (Mendoza) — Public Contracts/Civic Openness 4 Draft Letter of Opposition to Senate Bill 331 Item 6. - 3 xB -112- ATTACHiIAAff- August 3,2015 Darrell Johnson Chief Executive Officer Orange County Transportation Authority 550 S Main Street P 0 Box 14184 Orange, CA 92863-1584 Subject: 1-405 Freeway Improvement Project High Occupancy Toll Lanes Dear Mr Johnson The City of Huntington Beach has consistently expressed our opposition to the concept of including high i occupancy toll (HOT) lanes as an element of the I-405 freeway Improvement Project While we again reaffirm our opposition to inclusion of HOT lanes within the project, we understand that the final decision was ultimately a policy decision made by Caltrans_Kq OCTA is"now in a position to help control the process and design of the project and the inclusion of HOT lane elements The City is aware that the project is continuing through preliminary design as preparations are made to ultimately award a design-build contract forthe project. The City of Huntington Beach is firmly committed to ensuring that the final design provides th6' t possible design of the facility to ensure that clear and convenient access points are provided to motorists using the HOT lanes to be able to access our key entry corridors at Beach Boulevard, Magnolia, and Goldenwest Street The design-build process offers many challenges to coordinating detailed review of designs among different agencies due to the typically aggressive schedules and multiple agencies involved We are asking that OCTA support our community's`needs and ensure that management 'and staff at the City are included in the AV developmenrand review of the design of these features throughout the preliminary design and design- build process The 1-405 Freeway Improvement Project is one that will be very disruptive to the communities along the corridor for several years We are committed10 ensuring that when completed,this freeway project will provide the best possible service to our residents, businesses and visitors and hope that OCTA will support us in this effort. Any questions related to this issue can be addressed to our City Manager, Fred Wilson or Mayor Pro Tem/OCTA©hector Jim Katapodis Respectfully, Jill Hardy Mayor c City Council ® Fred Wilson, City Manager Travis Hopkins, Director of Public Works xB -11_3- Item 6. - 4 FATTAC " MmmENT #2 i SAW August 3, 2015 tr �\( Ilk Orange County Water District Board of Directors 18700 Ward Street Fountain Valley, CA 92708 Subject: OCWD Water Purchase-Agreement with Poseidon Resources for Desalinated Water 4 Dear President Green and Members Ahe Board The City of Huntington Beach is acutely interested, our proposed 50 year agreement with Poseidon Resource$lPoseidon)to purchase desalinated water from their planned desalination facility in Huntington Beach As the project is located within the City of Huntington Beach,we are keenly aware of the issues surrounding the facility. v For well over ten years we have worked diligently with Poseidon to reach multiple agreements to mitigate impacts to the neighborhoods in the vicinity of the project site and the City as a whole The City of Huntington Beach has agr"eements with Poseidon with the understanding that the City would receive certain benefits due to these impacts The purpose of this letter is to confirm the benefits will stay in place regardless of OCWD's involvement with the project With the District's recent acceptance of the non-binding Term Sheet and ongoing discussions concerning the Water Purchase Agreement,we wish to make clear that protecting the interests of the City's residents and businesses is our priority • Item 6. - 5 xB -114- ® The City has executed the following agreements with Poseidon Owner Participation Agreement(September 20, 2010)The Owner Participation Agreement outlines specific payments that Poseidon will make to the City These are a one-time$2,000,000 Quality of Life payment prior to issuance of a Certificate of Occupancy, a $1,900,000 payment for right-of-way ' improvements, and a minimum assessed value of the desalination facility of$200,000,000 to ensure that the City receives a minimum property tax payment as a result of the project j Exchange and Lease Agreement(September 7, 2010)The Exchange and Lease Agreement pertains to a swap of a Poseidon-owned parcel and a City-owned parcel that are,located east of Newland Street and to the south of Edison Drive and the City's Beach Maintenance Yard. The Agreement calls for the two parties to swap parcels, with Poseidon then leasing the City owned property for a minimum of two years, and then have the option to purchase it thereafter This agreement was executed to accommodate a 10 million gallon reservoir that Poseidon will utilize as part of their overall facility After the 35 year term of the Exchange and Lease Agreement expires,the Cat has the right to take possession of the reservoir Franchise Agreement (October 20, 2010)The Franchise Agreement allows Poseidon to build a water distribution/delivery system in the City of Huntington Beach's public right of way Per the Agreement, Poseidon would pay the City$8 00 per linear foot, based on a 54 inch pipeline This amount would vary depending on the size of the pipeline(s) ® Currently OCWD is proposing td"Ifinance, build and operate the distribution system that would extend ,r from the Poseidon Project fence line to those agencies willing to purchase the project water and/or to OCWD owned facilities where the project water could be utilized t ; It is the City's position that the franchise agreement does remain in effect regardless of who builds the pipeline(s).,Section 15 of-,,the Franchise Agreement states- "Any other assignment, sublicense, or transfer 'f Franchisee's rights ursuant to this Franchise requires City's prior written consent which may ! be withheld at the City's sole discretion with or without cause In addition, if Franchisee requests to assign this agreement to a public utility and orany entity not required by law to pay franchise fees, Cit may withhold consent until Franchisee agrees to pay the value of the franchise fee through the term of the Franchise " The 2010 Pipeline Franchise Agreement estimated value of the annual franchise fee is$168,000 or $5,880,000 over the 35 year term of the agreement This estimate is based on a pipeline Franchise fee of$8 00 per liner foot It is our understanding that Poseidon will pay to the City the$5,880,000 (or actual amount depending on final pipeline design) prior to the City authorizing the assignment of the Franchise Agreement to a public agency which otherwise would not be required to pay a franchise fee Conditions of Approval (September 20, 2010) The Conditions of Approval contain numerous requirements that Poseidon must meet before a Certificate of Occupancy for the project will be issued ® The vast majority of these pertain to site and right of way improvements and would not affect OCWD However,one key condition is that Poseidon and the City are to execute a water purchase agreement xB -11 s- Item 6. - 6 whereby the City would be able to purchase up to 3,360 acre-feet of water at a 5%discount of MWDOC rates Please keep in mind that if the project produces 56,000 acre-feet of water per year, OCWD would only be able to purchase 52,940 acre feet In addition to these agreements, the City does remain concerned about the potential impacts that the proposed Water Purchase Agreement with Poseidon could have on the cost of the groundwater i Replenishment Assessment and the impact this would have on the yearly cost to the City and to our customers However, we do realize that all Orange County Groundwater Basin pumpers would receive the benefit of an increased Basin Pumping Percentage We will continue to monitor the impacts that this will have on pumpers as the cost of the various distribution system options are developed In closing,we want to reiterate the purpose of this letter is to caution OCWD that the agreement terms i between the City and Poseidon may not be as solid as the City perceived they were at the time of approval The City of Huntington Beach has an expectation that the financial benefits noted above will come to fruition with or without OCWD's involvement in the Poseidon Desalination Plant Sincerely, Jill Hardy, ,. Mayor V Item 6. - 7 xB -116- e4TTACFIMNI' Tr 3 i i AMENDED IN ASSEMBLY JULY 13, 2015 AMENDED IN ASSEMBLY JUNE 23, 2015 AMENDED IN SENATE APRIL 22, 2015 i AMENDED IN SENATE APRIL 6, 2015 I SENATE BILL No. 331 Introduced by Senator Mendoza February 23, 2015 An act to add Chapter 4.5 (commencing with Section 22175)to Part 3 of Division 2 of the Public Contract Code,relating to public contracts LEGISLATIVE COUNSEL'S DIGEST SB 331, as amended, Mendoza Public contracts- local agencies ® negotiations ' Existing law relating to public contracts requires local agencies, including cities and counties, to comply with specified procedures for public contracting for public construction The Meyers-Milias-Brown Act requires the governing body of a local public agency to meet and confer in good faith regarding wages,hours, and other terms and conditions of employment with representatives of a recognized employee organization This bill would enact the Civic Reporting Openness in Negotiations Efficiency Act to establish specific procedures for the negotiation and approval of certain contracts valued at-5 ,4)00 $250,000 or more for goods or services by cities, counties, cities and counties, or special districts that have adopted a civic openness in negotiations ordinance, or COIN ordinance, defined as an ordinance imposing specified requirements as part of any collective bargaining process undertaken pursuant to the Meyers-Milias-Brown Act. The act would require the 95 xB -117- Item 6. - 8 SB 331 —2— designation of an independent auditor to review and report on the cost ® of any proposed contract The act would require a city, county, city and county, or special district to disclose prescribed information relating to the contract and contract negotiations on its Internet Web site The act would prohibit a final determination by the governing body regarding approval of any contract until the matter has been heard at a minimum of 2 public meetings of the governing body The act would exempt from its provisions contracts required to respond to, recover from, or mitigate the effects of a temporary public safety emergency declared by the chief law enforcement officer of a city, county, city and county, or special district, or a state of war emergency, state of emergency, or local emergency, as those terms are defined in the California Emergency Services Act By imposing new requirements on cities, counties, cities and counties, and special districts, this bill would impose a state-mandated local program The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose This bill would make legislative findings to that effect The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state ® Statutory provisions establish procedures for making that reimbursement This bill would provide that no reimbursement is required by this act for a specified reason Vote majority. Appropriation no Fiscal committee yes State-mandated local program yes The people of the State of California do enact as follows 1 SECTION 1 Chapter 4 5 (commencing with Section 22175) 2 is added to Part 3 of Division 2 of the Public Contract Code, to 3 read 95 Item 6. - 9 xB -11 s- —3— SB 331 1 CHAPTER 4 5 CIVIC OPENNESS IN NEGOTIATIONS ® 2 3 22175. This chapter shall be known, and may be cited, as the 4 Civic Reporting Openness in Negotiations Efficiency Act, or 5 CRONEY. 6 22176 As used in this chapter,"civic openness in negotiations 7 ordinance"or"COIN ordinance"means an ordinance adopted by 8 a city, county, city and county, or special district that requires any 9 of the following as a part of any collective bargaining process 10 undertaken pursuant to the Meyers-Mllias-Brown Act (Chapter 11 10 (commencing with Section 3500) of Division 4 of Title 1 of 12 the Government Code) 13 (a) The preparation of an independent economic analysis 14 describing the fiscal costs of benefit and pay components currently 15 provided to members of a recognized employee organization, as 16 defined in Section 3501 of the Government Code. 17 (b) The completion of the independent economic analysis prior 18 to the presentation of an opening proposal by the public employer 19 (c) Availability for review by the public of the independent 20 economic analysis before presentation of an opening proposal by 21 the public employer 22 (d) Updating of the independent economic analysis to reflect 23 the annual or cumulative costs of each proposal made by the public 24 employer or recognized employee organization • 25 (e) Updating of the independent economic analysis to reflect 26 any absolute amount or change from the current actuarially 27 computed unfunded liability associated with the pension or 28 postretirement health benefits 29 (f) The report from a closed session of a meeting of the public 30 employer's governing body of offers, counteroffers, or supposals 31 made by the public employer or the recognized employee 32 organization and communicated during that closed session 33 (g) The report from a closed session of a meeting of the public 34 employer's governing body of any list of names of persons in 35 attendance during any negotiations session,the date of the session, 36 the length of the session, the location of the session, or pertinent 37 facts regarding the negotiations that occurred during a session 38 22177 (a) This chapter applies only to a city,county,city and 39 county, or special district that has adopted a COIN ordinance, 40 which is effective and operative This chapter shall not apply if 95 HB -119- Item 6. - 10 SB331 —4- 1 the city, county, city and county, or special district suspends, 2 repeals, or revokes its COIN ordinance 3 (b) This chapter shall not apply to a contract if the contract is 4 required to respond to, recover from, or mitigate the effects of any 5 of the following 6 (1) A temporary public safety emergency declared by the chief 7 law enforcement officer of a city, county, city and county, or special 8 district 9 (2) A state of war emergency, state of emergency, or local 10 emergency, as those terms are defined in Section 8558 of the 11 Government Code 12 22178 (a) This chapter shall apply to any contracts with a i 13 value of at least ,two hundred fifty 14 thousand dollars ($250,000), and to any contracts with a person 15 or entity, or related person or entity,with a cumulative value of at 16 least two hundred fifty thousand 17 dollars ($250,000) within the fiscal year of the city, county, city 18 and county, or special district, being negotiated between the city, 19 county,city and county,or special district,and any person or entity 20 that seeks to provide services or goods to the city,county,city and 21 county, or special district, in the following areas. accounting, 22 financing,hardware and software maintenance,'�ea�health 23 care, human resources, human services, information technology, 24 telecommunications, janitorial maintenance, legal services, ® 25 lobbying, marketing, office equipment maintenance, passenger 26 vehicle maintenance, property leasing, public relations, public 27 safety, social services, transportation, or waste removal 28 (b) The city, county, city and county, or special district shall 29 designate an unbiased independent auditor to review the cost of 30 any proposed contract The independent auditor shall prepare a 31 report on the cost of the contract and provide the report to all 32 parties and make it available to the public before the governing 33 body takes any action to approve or disapprove the contract. The 34 report shall comply with the following 35 (1) The report shall include a recommendation regarding the 36 viability of the contract, including any supplemental data upon 37 which the report is based, and shall determine the fiscal impacts 38 attributable to each term and condition of the contract 39 (2) The report shall be made available to the public at least 30 40 days before the issue can be heard before the governing body and 95 Item 6. - 11 xB -120- -5— SB 331 1 at least 60 days before any action to approve or disapprove the . 2 contract by the governing body. 3 (3) Any proposed changes to the contract after it has been 4 approved by the governing body shall adhere to the same approval 5 requirements as the original contract The changes shall not go 6 into effect until all of the requirements of this subdivision are met 7 (c) The city, county, city and county, or special district shall 8 disclose all offers and counteroffers to the public within 24 hours 9 on its Internet Web site. j 10 (d) Before approving any contract, the city, county, city and 11 county,or special district shall release a list of names of all persons 12 in attendance, whether in person or by electronic means, during 13 any negotiation session regarding the contract, the date of the 14 session, the length of the session, the location where the session 15 took place, and any pertinent facts regarding the negotiations that 16 occurred in that session. 17 (e) Representatives of the governing body shall advise the 18 governing body of all offers, counteroffers, information, or 19 statements of position discussed by the contracting person or entity 20 and city,county,city and county,or special district representatives 21 participating in negotiations regarding any contract. 22 (f) Each governing body member and staff members of 23 governing body offices shall disclose publicly all verbal, written, 24 electronic, or other communications regarding a subject matter 25 related to the negotiations or pending negotiations they have had 26 with any official or unofficial representative of the private entity 27 within 24 hours after the communication occurs 28 (g) A final governing body determination regarding approval 29 of any contract shall be undertaken only after the matter has been 30 heard at a minimum of two meetings of the governing body 31 wherein the public has had the opportunity to review and comment 32 on the matter 33 SEC 2. The Legislature finds and declares that Section 1 of 34 this act,which adds Chapter 4 5(commencing with Section 22175) 35 to Part 3 of Division 2 of the Public Contract Code,furthers,within 36 the meaning of paragraph (7) of subdivision (b) of Section 3 of 37 Article I of the California Constitution, the purposes of that 38 constitutional section as it relates to the right of public access to 39 the meetings of local public bodies or the writings of local public 40 officials and local agencies Pursuant to paragraph (7) of 95 xB -121- Item 6. - 12 SB 331 —6- 1 subdivision (b) of Section 3 of Article I of the California ® 2 Constitution,the Legislature makes the following findings. 3 This act ensures that members of the public have the opportunity 4 to be informed of,and meaningfully participate in,the negotiation 5 and approval of contracts for goods and services by a city,county, 6 city and county,or special district that has adopted a civic openness 7 in negotiations(COIN)ordinance,thereby furthering the purposes 8 of Section 3 of Article I of the California Constitution. 9 SEC 3 No reimbursement is required by this act pursuant to 10 Section 6 of Article XIII B of the California Constitution because 11 the only costs that may be incurred by a local agency or school 12 district under this act would result from a legislative mandate that 13 is within the scope of paragraph (7) of subdivision (b) of Section 14 3 of Article I of the California Constitution • O 95 Item 6. - 13 xB -122- ATTACHMENT #4 . July 21, 2015 i The Honorable Tony Mendoza California State Senate State Capitol, Room 5061 Sacramento, California 95814 Subject: OPPOSE—SB 331: Civic Reporting Openness in Negotiations Efficiency Act Dear Senator Mendoza On behalf of the City of Huntington Beach, I am writing Ao advise you of our opposition to your Senate Bill 331, because it creates new contracting requirements which will drive up the j cost and create delays for vendors, suppliers, and local government agencies for contracting if the local agency has or in the future adopts a civic openness in negotiations ordinance, or COIN ordinance in regards to the collective bargaining process._ \ * The Senate Bill 331 imposes far greater restrictions lion the Cities ability to conduct its business than what is required currently under COIN, the most alarming of which would prohibit approval of any contract for no less than sixty days The proposed State mandate on the local government would essentially, restrain the Beard's primary responsibility to fund critical contracts that keep the cities day toz�day operations functioning All of these' ® requirements would drive up costs of contracting for cities and local agencies. Even though the dollar threshold was increased, the number of contracts per year subject to! the additional reporting requirements and 60-day approval process would still be impossible, to meet in a timely manner. I O'k `� The language'in the mandate of SB 331,gwill lead to increased costs due to the delays in the contracting process as well ordetrimental administrative burdens The bill removes local control. This bill exemplifies that it is more about retribution than it is a sweeping policy aimed aftransparency and public access For these reasons,the City otHuntington Beach opposes SB 331 Sincerely, Jill Hardy Mayor of Huntington Beach CC. Assembly Member Matthew Harper Assembly Member Travis Allen Senator John M W Moorlach HB -123- Item 6. - 14 Esparza, Patty From: Flynn, Joan Sent: Monday, August 03, 2015 6 13 AM To: Esparza, Patty Subject: Fwd 8/3 City Council Agenda Item 6 Joan Flynn, City Clerk Huntington Beach SUPPLEMENTAL Begin forwarded message COMMUNICATION From: Rob Pool<rob pool oc@email com> Date:August 3, 2015 at 12 32 27 AM PDT Meeting Date; To: <city council@surfcity-hb org> Cc: <cfikes@surfcity-hb org>, <iflvnn@surfcity-hb org> Agenda Item No. �p Subject:8/3 City Council Agenda Item 6 Dear Mayor Hardy and Council Members, I am writing today to address Item 6 of the August 3, 2015 City Council Agenda I fully support the Recommended Action in all three of these cases I would like to address the latter two in particular, if I might I have been late to the game with respect to the Poseidon Desalination issue But it didn't take long to determine that things were not adding up My concern over this project has never been, as has been with others, environmental My issue has always been with the risks/rewards for the citizens of Huntington Beach It became clear to me approximately six months ago at a SE Area meeting In that meeting Scot Maloni,VP of Poseidon, and I had a discussion about several Poseidon issues One of those issues was what happened to the franchise fee negotiated between the city of Huntington Beach and Poseidon Mr Maloni gave me an answer that seemed troubling-something about the fact that they hadn't assigned the building of the pipeline to anyone and now that had been determined to be assigned to OCWD So they would receive the franchise fee He further said that if Huntington Beach had any concerns about that issue that the city could negotiate that issue with OCWD Immediately, I wondered, "How does a company negotiate with a city and make a promise of a substantial franchise fee and then ten years later promise that same fee to another entity?" Y OCWD and Poseidon, in their concern for reaching an agreement on the term sheet have forgotten one very important element And that is Huntington Beach.This is not an agreement between two parties, but three The proposed letter will clarify to OCWD of the agreement between our city and Poseidon Whether you are for or against this project,your first duty is to protect the interests of Huntington Beach This letter needs to be sent) 1 As to California Senate Bill 331, 1 believe it is in the best interest of our city to take an official position against this bill Whether we establish some form of COIN or not,this bill is a blatant attempt to exert control upon the cities in California to protect only one group-the public employee unions If Senator Mendoza were truly concerned about increasing transparency in California cities, the bill would cover ALL cities- not simply cities that adopt a COIN ordinance No,this is simply a way to enact punitive legislation punishes any city that enacts COIN by obstructing those cities from conducting day to day business Further,this type of ordinance belongs at the city level- not the state It further erodes local control Our city MUST take an official stance in opposition to this proposed legislation Thank you for your consideration and your continued service to our city Thank you, Rob Pool z Dombo, Johanna From: Surf City Pipeline <noreply@user govoutreach com> Sent: Monday, August 03, 2015 8 29 AM To: Dombo, Johanna Subject: Surf City Pipeline You have been assigned a new Request# 23168 Request#23168 from the Government Outreach System has been assigned to you. Request type: Comment Request area: Contact an Executive Citizen name: MILT DARDIS Description: Your proposed drafter letter to the OCWD dated Aug 3,2015 is of concerned to me. 1. Where is the Performance Bond that Poseidon Resources is to issue in case of default , 2. Where is the Completion Bond that Poseidon Resources is to issue guarantying building performance 3 Where is the Yearly Franchise Fee of$450,000 to be paid by Poseidon Resources as promised by Don Hansen and Green who were 2 of the 4 City Council members who voted for this project 4 Can an Orange County government entity enter into a 50 year Bond agreement. Where is the prescedeint. Expected Close Date: August 7, 2015 Click here to access the request Note This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored SUPPLEMENTAL COMMUNICATION i MpatiN Cate. — 3 Agernia lteFM W. i 1 �; City ® Huntington Beach MA�roR " Jill Hardy ; P O BOX 190 • 2000 MAIN STREET ' CALIFORNIA 92648 MAX©R PRO TEl' PORE Jim Katapodis COUNCIL MEMBERS August 1$, 2015 Baibaia Delglelze , Billy O'Connell Erik Peterson Mike Po4ey Dave Sullivan Mr Jeffrey Lalloway, Chairman Members of the Board of Directors Orange County Transportation Authority 550 South Main Street PO Box 14184 Orange, CA 92863 Dear Chairman Lalloway and Members of the Board The City of Huntington Beach has expressed its opposition to the concept of including high occupancy toll (HOT) lanes as an element of the 1-405 Freeway Improvement Project By this letter, the city affirms its opposition to the inclusion of HOT lanes within the project and is informing OCTA of the city's interest in pursuing other options The proposed Freeway Improvement Project includes plans to convert the Carpool Lane (HOV), used frequently by Huntington Beach residents and visitors, to a HOT lane. This toll-free HOV lane was paid for, and has been relied upon, by Orange County drivers for years This HOV lane provides opportunities to exit at Goldenwest St , Beach Blvd , Magnolia, and Brookhurst St , all of which serve Huntington Beach. The HOV lane has also provided exits for neighboring cities, such as Valley View St./Bolsa Chica Rd., Euclid, and Harbor Blvd. In addition to the removal of the toll-free HOV lane under the new Freeway Improvement Project, all but three of these exits in this former HOV lane will be taken away This lack of accommodation will cause a hardship and confusion to Huntington Beach residents, visitors, and neighboring cities This project could negatively impact Huntington Beach because of the confusion the HOT lanes will create by not having the proper number of opportunities for drivers to enter and exit There is very little about this project that would benefit the City of Huntington Beach, its residents, and/or its visitors Unless OCTA is willing to guarantee continuous access for freeway exits and a free HOV lane into perpetuity, the city will be evaluating its remedies Sincerely, '-tatp 1 dl rdy Mayor City of Huntington Beach TELEPHONE (714) 836-5563 Alanly, Aii,tralia FAX (714) 536-5233 Anjo, Japan ,N r j` Cif nti Beach MAYOR Jill Hardy P 0 SOX 190 • 2000 MAldM STREET • CALiFORNTA 92648 lk1AYC}R PRO'>E1k4PfLRE Jim Kata polls COUNCLL NIEMBERS August 18 2015 Barbara}Delgleme Hilly O'Connell Erik Peterson Mike Posey Dave Sullwan Ms Cathy Green, President Board of Directors Orange County Water District 18700 Ward Street Fountain Valley, CA 92708 SUBJECT: OCWD WATER PURCHASE AGREEMENT WITH POSEIDON RESOURCES FOR DESALINATED WATER Dear President Green and Members of the Board The City of Huntington Beach is acutely interested in your proposed 50-year agreement with Poseidon Resources (Poseidon)to purchase desalinated water from their planned desalination facility in Huntington Beach. As the project is located within the City of Huntington Beach, we are keenly aware of the issues surrounding the facility For well over ten years, we have worked diligently with Poseidon to reach multiple agreements to mitigate impacts to the neighborhoods in the vicinity of the project site and the City as a whole The City of Huntington Beach has agreements with Poseidon with the understanding that the City would receive certain benefits due to these impacts. The purpose of this letter is to caution OCWD that the economic benefits to the City may not be as solid as the City perceived they would be at the time the agreements between the City and Poseidon were approved With the District's recent acceptance of the non-binding Term Sheet and ongoing discussions concerning the Water Purchase Agreement, we wish to make clear that protecting the interests of the City's residents and businesses is our priority The project's economic benefits, which the City deemed necessary to secure the community's approval, were specific and unequivocal, a number of which are articulated and highlighted in the following paragraphs for the District's information. These project economic benefits are considered mandatory Conditions of Approval, above and beyond those municipal revenues associated with project permitting fees, construction related sales and use taxes, business license fees, and utility user tax receipts. The City has executed the following agreements with Poseidon Franchise A-greement(October 20, 2010): The Franchise Agreement allows Poseidon to build a water distribution/delivery system in the City of Huntington Beach's public right-of-way Per the Agreement, Poseidon would pay the City$8 00 per linear foot based on a 54-inch pipeline. This amount would vary depending on the size of the pipeline(s). TELEPHONE (714) 536 5553 i4I anal}, /41�S1t tl[<� FAX (714� 536-5233 Ann;E)„japan Ms Cathy Green, President OCWD Board of Directors Page 2 August 18, 2015 Currently, OCWD is proposing to finance, build, and operate the distribution system that would extend from the Poseidon Project fence line to those agencies willing to purchase the project water and/or to OCWD-owned facilities where the project water could be utilized It is the City's position that the franchise agreement does remain in effect regardless of who builds the pipeline(s) Section 15 of the Franchise Agreement states "Any other assignment, sublicense, or transfer of Franchisee's rights pursuant to this Franchise requires City's prior written consent which may be withheld at the City's sole discretion with or without cause In addition, if Franchisee requests to assign this agreement to a public utility and or any entity not required by law to pay franchise fees, City may withhold consent until Franchisee agrees tonav the value of the franchise fee through the term of the Franchise." The 2010 Pipeline Franchise Agreement estimated value of the annual franchise fee is currently estimated to be$168,000 or$5,880,000 over the 35-year term of the agreement This estimate is based on a pipeline franchise fee of$8.00 per liner foot It is our understanding that Poseidon will pay to the City the$5,880,000 (or actual amount depending on final pipeline design) prior to the City authorizing the assignment of the Franchise Agreement to a public agency which otherwise would not be required to pay a franchise fee Conditions of Approval (September 20,201 t)1: The Conditions of Approval contain numerous requirements that Poseidon must meet before a Certificate of Occupancy for the project will be issued The vast majority of these pertains to site and right-of-way improvements and would not affect OCWD However, one key condition is that Poseidon and the City are to execute a water purchase agreement whereby the City would be able to purchase up to 3,360 acre-feet of water at a 5% discount of MWDOC rates and Poseidon would provide transportation of that water Please keep in mind that if the project produces 56,000 acre-feet of water per year, OCWD would only be able to purchase 52,940 acre feet. Furthermore, while of less potential impact to the District, it should be noted that the Conditions of Approval stipulate the City will have the first rights to purchase up to an additional 4,000,000 gallons per day of additional water from the Project during a declared water emergency(not including droughts) at the same discounted costs, for not to exceed seven (7) days in any 30-day period and not to exceed 28,000,000 gallons in any one (1) emergency event A yet unresolved issue between the City and Poseidon has to do with the City's Utility Users Tax(UUT) payment It is the City's position that the UUT would result in an estimated yearly payment to the City of$840,000 Poseidon does not agree with the City's position and expects to pay an estimated$50,000 annual tax. In addition to these agreements,the City does remain concerned,,about the potential impacts that the proposed Water Purchase Agreement with Poseidon could have on the cost of the groundwater Replenishment Assessment and the impact this would have on the yearly cost to the City and to our customers Ms Cathy Green, President OCWD Board of Directors Page 3 August 18, 2015 In closing, we want to reiterate the purpose of this letter is to caution OCWD that the economic benefits to the City may not be as solid as the City perceived they were at the time of approval The City of Huntington Beach has an expectation that the financial benefits noted above will come to fruition with or without OCWD's involvement in the Poseidon Desalination Plant. Sincerely, 1 Hardy, Mayor City of Huntington Beach DIRECTORS OFFICERS PHILIP L ANTHONY President DENIS R BILODEAU,PE .$ CATHY GREEN SHAWN DEWANE JAN M FLORY First Vice President CATHY GREEN U DENIS R.BILODEAU,P.E. DINA NGUYEN ROMAN A REYNA SINCE 1933 Second Vice President PHILIP L ANTHONY STEPHEN R SHELDON HARRY S SIDND,P E ORANGE COUNTY WATER DISTRICT General Manager ROGER YOH,PE ORANGE COUNTY'S GROUNOWATER AUTHORITY MICHAELR MARKUS,PE,0 WRE September 11, 2015 The Honorable Jill Hardy Mayor, City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 SUBJECT: AUGUST 18, 2016 LETTER REGARDING OCWD TERM SHEET WITH POSEIDON RESOURCES FOR DESALINATED WATER Dear Mayor Hardy and members of the council: I am writing in response to your letter dated August 18, 2015 regarding the Orange County Water District's (OCWD or District) interest in the proposed Huntington Beach Seawater Desalination Project (Project)with Poseidon Resources. The District was formed in 1933 by a special act of the California State Legislature to protect Orange County's rights to water in the Santa Ana River, which provides the main source of water for the region's groundwater basin. The District manages the groundwater basin that provides reliable, high quality groundwater to 19 city and retail water districts that serve 2.4 million customers in north and central Orange County. Based upon the content of your letter, the District proposes scheduling a future City Study Session to provide an update on our activities and recent work to your City Council A Study Session would be a constructive means of addressing the City's questions about the District's interest in the Project, the status of the groundwater basin and our long-term plans to manage the basin. As you know, the District's interest in seawater desalination and specifically the Huntington Beach Project is not a new development and predates the current drought. On March 17, 2010 the District signed a Memorandum of Understanding (MOU)with Poseidon Resources for the consideration of the purchase of water from the proposed desalination Project. On July 24, 2013, the District's Board of Directors voted to evaluate the financial feasibility of purchasing up to the full 56,000 acre feet per year capacity of drinking water that will be produced by Poseidon's proposed Project, and on May 14, 2015 the District's board of directors voted to approve a Water Reliability Agreement Term Sheet for the purchase up to 50 million gallons per day (56,000 acre feet per year) of drinking water from the proposed project. The term sheet acknowledges the City's 3,360 acre feet per year purchase option. 'e LL LL 11 mm , �; � . The Honorable Jill Hardy September 11, 2015 Page 2 of 3 The District's 2014 Long-Term Facilities Plan ("LTFP") adopted by the Board of Directors evaluated the Project and compared it to other water supply alternatives and it was determined that the Huntington Beach desalination facility was a priority project. The District's LTFP finds that demand today for imported water within the District's service territory is typically around 150,000 acre feet per year The Huntington Beach Project's 56,000 acre feet per year capacity is the single largest source of new, local drinking water supply available to the region In addition to offsetting imported demand, water from the Project could provide flexibility in how the District manages the groundwater basin, specifically the desalinated water could be used to augment supplies we inject into our Talbert Seawater Barrier to help prevent seawater intrusion into the groundwater basin The useable storage volume of the groundwater basin is about 500,000 acre-feet. As this storage water is used and the groundwater basin is draw down, problems with seawater intrusion can occur if the basin is not eventually refilled The Board just received a report from our staff indicating that the basin has been drawn down by 381,000 acre-feet effective June 30, 2015. The City of Huntington Beach should be concerned with this condition given the number of wells you have near your northwest border Drawing down the useable storage in the groundwater basin also means that only about 119,000 acre-feet of water supplies remain that could be used to buffer any large reductions to the imported water supplies should the drought conditions continue The District's pursuit of new local water supplies, in this case seawater desalination, is based on policies adopted by the Board of Directors over the past several years Specifically, on May 15, 2013, the District's Board of Directors unanimously resolved that it is the policy of the District to consider and develop a variety of local water resources— mcluding seawater desalination—to ensure sufficient water supplies are always available to the residents and businesses in the service territory Furthermore, the District's Board of Directors adopted a policy goal in January 2013 to establish and maintain a 75% Basin Pumping Percentage (°BPP") This policy goal can only be achieved through the development of new supplies that are locally controlled by the District to ensure that the higher BPP is sustainable over time These policies provide the foundation for the District's interest in the Project As a member of the Huntington Beach City Council in 2005 and again in 2010 when the City approved the desalination project, I am intimately familiar with the Project and the host of financial benefits that are afforded to the City. The various agreements between Poseidon and the City and related financial benefits identified in the City's letter remain unchanged since 2010 when they were approved and should remain unaffected by the District's involvement in the Project I understand, and concur, that the City's priority is protecting the interests of its residents and businesses In this regard, the District's involvement in the desalination project could benefit all of the cities and retail water districts in the OCWD service territory, including the City of Huntington Beach, which stands to benefit significantly from the construction and operation of the desalination facility. The Honorable Jill Hardy September 11, 2015 Page 3 of 3 It is the District's mission to provide the cities and retail water districts it serves with a reliable, adequate, high-quality water supply at the lowest reasonable cost in an environmentally responsible manner The Huntington Beach Desalination Project provides the District and Orange County with a unique opportunity to add the Pacific Ocean as a new resource in our drinking water supply portfolio The District is working hard in cooperation with the local cities to evaluate the most cost effective manner to integrate the water into the regional distribution system. The District looks forward to working with the City and potentially participating in a study session to discuss the project and to answer any questions you and the council may have Sincerely, Cathy Green President of the Board cc Board of Directors