ITEM 43 CITY MANAGER S REPORT DECEMBER 7 2015 CITY COUNCIL MEETING ITEM APPROVE WASTEWATER DISCHARGE AGREEMENT WITH SAN JOAQUIN COGEN LLC RECOMMENDATION Adopt a Resolution Approving Wastewater Discharge Agreement with San Joaquin Cogen LLC COGEN to Discharge Industrial Wastewater into the City s Collection System on an Interim Basis SUMMARY COGEN is an electric power cogeneration facility that beginning in 1990 has had an agreement with the City that is renewed on an annual basis to allow them to discharge industrial wastewater into the City s collection system on an interim basis The agreement with COGEN is due to expire on December 31 2015 and COGEN desires to extend their agreement by another year until December 31 2016 with the understanding that the connection to the City s collection system and allotment of a maximum 20 000 gallons per day GPD of waste discharge is for the interim only and not a guarantee of a permanent connection in the future Pursuant to the proposed agreement the yearly revenues to the City Sewer Fund from COGEN would be approximately 70 200 In a separate Council Item COGEN is also requesting a water connection agreement that will bring additional revenue to the City s Water Fund BACKGROUND The City owns 147 or 145 million gallons per day MGD of the treatment capacity at the Manteca Water Quality Control Facility WQCF Many of the businesses and residents on the east side of the City discharge to the WQCF As a means of calculating cost and assigning capacity the City uses the term Interceptor Service Units ISU at the rate of 260 GPD The City S 145 MGD converts to 577 ISU s COGEN s 20 000 GPD is equivalent to 77 ISU s On January 31 1990 the Lathrop County Water District LCWD entered into an agreement with San Joaquin Cogen LLC COGEN for temporary disposal of its wastewater into LCWD s collection system Since 1990 to the present Cogen has been granted annual extensions to the temporary agreement and has complied with the terms of that agreement and all extensions COGEN will continue to pursue a permanent solution for their wastewater discharge capacity while temporarily utilizing the City s collection system COGEN understands that with time and build out of the City s service area the collection system will reach or approach the City s full allocation and the surplus
CITY MANAGER S REPORT Page 2 DECEMBER 7 2015 CITY COUNCIL MEETING APPROVE WASTEWATER DISCHARGE AGREEMENT WITH SAN JOAQUIN COGEN LlC treatment capacity float will no longer be available As a result COGEN will eventually be asked to stop discharging to the WQCF system If the City determines that there is no available capacity within the City s collection system the connection may be canceled by the City or COGEN upon a 60 day written notification During the term of this Agreement COGEN may elect to develop an alternative means of wastewater treatment and disposal provided their pretreatment of their wastewater is at an acceptable level to the Cities of Lathrop and Manteca Monthly reports shall be submitted for analysis of Chemical Oxygen Demand COD and for all constituents required by monitoring conditions of the City of Manteca COGEN shall maintain daily logs of wastewater flows pumped to the City s system as well as recorded charts showing flow rates at any given time REASON FOR RECOMMENDATION The agreement allows COGEN to remain in operation to provide electricity to the utility grid and provides supplemental revenue to the City s Sewer Fund If at any time the City s unused float capacity becomes unavailable the City will no lon9er be able to accommodate COGEN s wastewater discharge and the connection may be canceled by the City upon a 60 day written notification FISCAL IMPACT COGEN s current monthly fee is 5850 would continue through December 31 2016 Any wastewater flow in excess of 20 000 GPD is charged at a rate of14 98 per1000 gallons The Agreement will provide revenue to the City Sewer Fund of 70 200 for the fiscal year 2015 16 If Council does not approve the Agreement COGEN will likely end operation of the facility and the City will lose this potential funding in addition to any revenue to the Water Fund if Council separately approves the Water Connection Agreement Funds are to be deposited in Revenue Account No 6010 5030 344 0120 ATTACHMENTS A Resolution Authorizing Approvaf of Wastewater Discharge Agreement with San Joaquin Cogen LLC COGEN Allowing COGEN To Discharge Industrial Wastewater into the City s Collection System on an Interim Basis B Approving a Wastewater Discharge Agreement with San Joaquin Cogen LLC COGEN Allowing Cogen to Discharge Industrial Wastewater into the City s Collection System
I CITY MANAGER S REPORT Page 3 DECEMBER 7 2015 CITY COUNCIL MEETING APPROVE WASTEWATER DISCHARGE AGREEMENT WITH SAN JOAQUIN COGEN LLC APPROVALS i ll 2 A Greg son Date Senior Civil Engineer tu1i Glenn Gebhardt City Engineer Date 24 S Z Cari ames Director of i ance Date ar s Salvador Navarrete City Attorney jr s Date S i 3a5 t en J Salvatore Date Gty Manager
RESOLUTION NO 15 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP APPROVING AN AMENDED WASTEWATER DISCHARGE AGREEMENT WITH SAN OAQUIN COGEN LLC COGEN ALLOWING COGEN TO DISCHARGE INDUSTRIAL WASTEWATER INTO THE CITY S COLLECTION SYSTEM ON AN INTERIM BASICS WHEREAS San Joaquin Cogen LLC COGEN is an electric power cogeneration facility located at 17200 Murphy Parkway in the City of Lathrop CITY California and WHEREAS COGEN under previous ownership entered into an agreement with Lathrop County Water District LCWD for temporary disposal of their wastewater into the City s collection system and WHEREAS the City of Lathrop as successor to LCWD has continued to honor and extend the annual agreement and WFIEREAS a current agreement Agreement providing for monthly charges in the amount of 5850 expires December 31 2015 and COGEN desires to extend the agreement for another year and WHEREAS COGEN will continue to pay special fees for this service which can be used to benefit the City s wastewater collection system and WHEREAS if the City determines that there is no available capacity within the City s collection system the connection may be canceled by the City upon 60 day written notification NOW THEREFORE BE IT RESOLVED the City Council of the City of Lathrop does hereby authorize approval of the Wastewater Discharge Agreement with San Joaquin Cogen LLC Cogen allowing Cogen to Discharge Industrial Wastewater in compliance with the Sanitary Sewer Ordinance into the City s Collection System on an Interim Basis until December 31 2016 for a monthly fee of 5850 and BE IT FURTHER RESOLVED that the money received from COGEN pursuant to said agreement will be deposited into Revenue Account No 601 5030 344 0120
The foregoing Resolution was passed and adopted this 7th day of Decem ber 2015 by the following vote AYES NOES ABSENT ABSTAIN Sonny Dhaliwal Mayor ATTEST APPROVED AS TO FORM Teresa Vargas City Clerk Sa va or Navarrete City Attorney
ATTACHMENT B CITY OF LATHROP AGREEMENT BETWEEN THE CITY OF LATHROP AND SAN JOAQUIN COGEN LLC COGEN AUTHORIZING COGEN TO PUMP INDUSTRIAL WASTEWATER INTO THE CITY OF LATHROP S COLLECTION SYSTEM ON AN INTERIM BASIS THIS AGREEMENT dated for convenience this 7h day of December 2015 is by and between SAN JOAQUIN COGEN LLC a Delaware Limited Liability Company hereinafter COGEN and the CITY OF LATHROP a California municipal corporation hereinafter CITY RECITALS WHEREAS COGEN is an electric power cogeneration facility located at 17200 Murphy Parkway in the City of Lathrop and WHEREAS COGEN has in the past obtained water from the Defense Depot San Joaquin Sharpe Site and from Libby Owens Ford and may in the future obtain water from the City of Lathrop and WHEREAS COGEN produces wastewater from the power generating processes and from cleaning its facilities and equipment and WHEREAS COGEN hours of operation have greatly reduced over the past few years from7000 hours per year down to 500 hours per year since 2002 and the high monthly guaranteed cost of interim connection is a burden to COGEN and WHEREAS COGEN desires to temporarily pump its wastewater of a maximum of 20 000 gallons per day into the CITY s collection system for a period of twelve months NOW THEREFORE COGEN and the CITY agree as follows AGREEMENT I Definitions For the purposes of this Agreement the following definitions shall apply A CHEMICAL OXYGEN DEMAND COD The measure of chemically decomposable material in domestic or industrial wastewater as represented by the oxygen used as determined by accepted laboratory procedures Page 1 of 8
CITY OF LATHROP AGREEMENT SAN JOAQUIN COGEN LLC B CITY SEWER OR COLLECTION SYSTEM A sewer owned and operated by the CITY tributary to a wastewater treatment plant It includes but is not limited to sanitary and industrial sewers pumping stations and manholes C FORCE MAIN A closed sewer line designed to operate under pressure at higher velocities than gravity sewers D INDUSTRIAL USE Use of the wastewater system by an entity engaged in activity related to manufacturing processing of material or production of goods or services on a large scale as distinguished from retail commercial establishments E INDUSTRIAL WASTEWATER All water borne wastes and wastewater excluding domestic wastewater and uncontaminated water and shall include all wastewater from producing manufacturing processing or other operation where the wastewater discharged includes significant quantities of wastes from non human origins F INTERFERENCE A discharge which alone or in conjunction with a discharge or discharges from other sources both 1 Inhibits or disrupts the wastewater facilities the treatment processes or operations or its siudge processes use or disposal and 2 Causes a violation of any requirement of the City s Waste Discharge Permits or Requirements including any increases in the magnitude or duration of a violation or of the prevention of wastewater sludge use or disposal in compliance with the foilowing statutory provisions and regulations or more stringent State or local regulations and permits issued thereunder Section 405 of the Ciean Water Act CWA the Solid Waste Disposal Act SWDA including Title II more commonly referred to as the Resource Conservation and Recovery Act RCRA including State regulations contained in any State sludge management plan prepared pursuant to subtitle D of the SDWA The Clean Air Act and the Marine Protection Research and Sanctuaries Act G NUISANCE Anything which is injurious to health or is offensive to the senses or an obstruction to the free use of the property so as to interfere with the comfort or enjoyment of life or property or which affects at the same time an entire community or neighborhood or any considerable number of persons although the extent of the annoyance or damage inflicted upon individuals may be unequal Page 2 of 8
CITY OF LATHROP AGREEMENT SAN JOAQUIN COGEN LLC H PUBLIC WORKS DIRECTOR or DIRECTOR The Public Works Director of the City of Lathrop or his authorized representative agent or deputy I SUSPENDED SOLIDS ss The solids in wastewater and sewage which are removable by filtering as determined by procedures specified in the most recent edition of the Standard Methods for the Examination of Water and Wastewater as published by the American Public Health Association American Water Works Association and the Water Environment Federation II Services to Be Provided CITY agrees to temporarily allow COGEN to discharge industrial wastewater into the CITY s wastewater collection system in return for valuable consideration as described herein and subject to the conditions set forth below A B C The Agreement is for a temporarv connection at this time As such neither the connection point to the CITY s collection system nor the volume of flow to be accepted by the CITY should be considered any indication of a guarantee of connection in the future This temporary connection is allowable until the City in its sole and absolute discretion issues a stop notice signed by the Public Works Director Assistant City Manager or City Manager The connection shall be allowed only so long as there is capacity within the CITY s current collection system to the point of connection to the City of Manteca Water Quality Control Facility hereinafter Manteca WQCF This shall not preclude COGEN from paying connection fees and or any other costs to connect to the existing sanitary sewer collection system for permanent capacity through a separate authorization and agreement with the City The determination of capacity shall be made by the Public Works Department and shall include review of peak domestic and COGEN flows plus existing CITY lift station capacity This Agreement and resulting connection may be canceled by the CITY or COGEN upon sixty 60 days written notice If COGEN fails to comply with any conditions of this Agreement the connection may be canceled by the CITY upon fifteen 15 days written notice to COGEN Page 3 of 8
CITY OF LATHROP AGREEMENT SAN JOAQUIN COGEN LLC D The maximum allowable volume of flow to be charged to COGEN is 20 000 gallons per day or 600 000 gallons per month or 7200 000 gallons per year of operation of the COGEN facilities The maximum allowable flow permitted pursuant to this agreement will be determined by the Public Works Director based on fluctuations or increases in the wastewater flows within the remainder of the CITY s wastewater collection system UNDER NO CONDITION SHALL THE MAXIMUM WASTEWATER FLOW EXCEED 20 000 GALLONS IN ANY 24 HOUR PERIOD COGEN is to provide weekly reporting of flows E The CITY in the sole and absolute discretion of the Public Works Director or his designee may restrict pumping operations to certain time periods and volumes as deemed necessary to prevent overloading the collection system F G It is understood that COGEN s operation and resulting wastewater flows result from a 24 hour operation and that the flows may be somewhat controlled so as to blend with the flows that may be readily managed by the municipal system COGEN agrees to prepare and submit a City of Manteca Industrial Waste Permit Application receive approval and provide a copy to the City prior to discharging into the system H COGEN will pay the CITY a minimum monthly payment of 5850 00 for the equivalent discharge of 600 000 gallons per month until December 31 2016 Any monthly flows in excess of the initial 600 000 gallons per month projected monthly flow shall require COGEN to issue payment above and beyond any other sum payable pursuant to this agreement to the City at the rate of 14 98 per 1000 gallon unit or any portion thereof of wastewater The excess flow charges will be billed the month subsequent to the month the discharge occurred i If additional surcharges are required by the City of Manteca due to inordinate concentrations of specified constituents in excess of the typical load permitted by the City of Manteca and these excess quantities are shown to originate from COGEN s wastewater discharge then these surcharges shall be passed on to COGEN If it is determined that the charges are an excessive financial burden on COGEN COGEN may elect to develop alternative means of wastewater treatment and disposal provide pretreatment of their wastewater to a level acceptable to the CITY and the City of Manteca or cancel the Agreement with the CITY and cease discharging into the CITY s system Page 4 of 8
CITY OF LATHROP AGREEMENT SAN JOAQUIN COGEN LLC J K COGEN shall submit a report of analysis for constituents if required by the City of Manteca The report shall be submitted on a timely basis COGEN shall maintain a daily log of wastewater flows pumped to the CITY system as well as recorder charts showing flow rates at any given time Copies of flow logs shall be submitted to the CITY on a monthly basis no later than five 5 working days after the end of the month The flow charts shall be maintained by COGEN and shall be made available to authorized CITY personnel on request ill Miscellaneous Provisions The following miscellaneous provisions are applicable to this Agreement A B C D Term This Agreement shall be for a period of approximately one 1 year beginning January 1 2016 ending on December 31 2016 provided however the CITY through City Council approval and upon receiving written concurrence from COGEN shall have the right to continue this Agreement from year to year upon the expiration of the initial Term upon the same terms and conditions as are contained herein Consent Whenever in this Agreement the approval or consent of a party is required such approval or consent shall be in writing and shall be executed by a person having the express authority to grant such approval or consent Controlling Law The parties agree that this Agreement shall be governed and construed by and in accordance with the Laws of the State of California Definitions The definitions and terms are as defined in this Agreement E Force Majeure Neither party shall be deemed to be in default on account of any delay or failure to perform its obligations under this Agreement which directly results from an Act of God or an act of a superior governmental authority F Headinqs The paragraph headings are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part of this Agreement Page5of8
CITY OF LATHROP AGREEMENT SAN JOAQUIN COGEN LLC G Incorporation of Documents All documents referred to herein and all documents which may from time to time be referred to in any duly executed amendment hereto are by such reference incorporated herein and shall be deemed to be part of this Agreement H Integration This Agreement and any amendments hereto contain all of the agreements and understandings of the parties with respect to any matter mentioned in this Agreement and supersede and terminate all prior and contemporaneous agreements between CITY and COGEN with respect to the matters covered in this Agreement There are no other prior oral or written agreements between the parties that are not incorporated in this Agreement I Modification of Aareement This Agreement shall not be modified or be binding upon the parties unless such modification is agreed to in writing and signed by the parties J Provision Any agreement covenant condition clause qualification restriction reservation term or other stipulation in the Agreement shall define or otherwise control establish or limit the pertormance required or permitted or to be required of or permitted by either party All provisions whether covenants or conditions shall be deemed to be both covenants and conditions K Severabilitv If a court of competent jurisdiction finds or rules that any provision of this Agreement is void or unenforceable the provisions of this Agreement not so affected shall remain in full force and effect L Successors and Assigns Except as otherwise expressly provided herein the provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties M Time of the Essence Time is of the essence of this Agreement and each of its provisions In the calculation of time hereunder the time in which an act is to be performed shall be computed by excluding the first day and including the last If the time in which an act is to be pertormed falls on a Saturday Sunday or any day observed as a legal holiday by CITY the time for pertormance shall be extended to the following business day N Venue In the event that suit is brought by either party hereunder the parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of San Joaquin or in the United States District Court for the Eastern District of California Page 6 of 8
CITY OF LATHROP AGREEMENT SAN JOAQUIN COGEN LLC O Attornev s Fees In the event of any controversy claim or dispute relating to this instrument or the breach thereof the prevailing party shall be entitled to recover from the losing party reasonable expenses attorney s fees and costs P Signing Authoritv In executing this contract each signatory represents and warrants that he or she has the actual and ostensible authority to act on behalf of the party for whom he or she is signing Q Recoverv of Costs The prevailing party in any action brought to enforce the terms of this Agreement or arising out of this Agreement may recover its reasonable costs including reasonable attorney s fees incurred or expended in connection with such action against the non prevailing party R Indemnification COGEN agrees to protect indemnify defend and hald the City and its elected and appointed officials officers employees and agents and one more or all of each of them the Indemnified Parties harmless from and against any and all claims losses expenses suits actions decrees judgments awards attorneys fees and court costs which the Indemnified Parties may suffer or which may be sought against or recovered or obtained from Indemnified Parties as a result of by reason of arising out of or in consequence of a the discharge of the wastewater b the untruth or inaccuracy of any representation or warranty made by COGEN in this Agreement or in any certifications delivered by COGEN hereunder or c any act or omission of COGEN or any of its representatives or their respective officers employees or agents in connection with the wastewater If COGEN fails to do so the City shall have the right but not the obligation to defend the same and charge all of the direct or incidental costs of such defense including any attorneys fees or court costs to and recover the same from COGEN Page 7 of 8
CITY OF LATHROP AGREEMENT SAN JOAQUIN COGEN LLC Approved as to Form City of Lathrop City Attorney Z3 1 Salvador Navarrete Date Recommended for Approval City of Lathrop City Engineer Glenn Gebhardt Date 24s Approved By City of Lathrop City Manager 390 Towne Centre Dr Lathrop CA 95330 Stephen J Salvatore Date Approved By San Joaquin Cogen LC 17200 Murphy Parkway Lathrop CA 95330 Signature Date Printed Name Title Page 8 of 8