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W R I E R E H r R G Y L I F E RIVERSIDE PUBLIC UTILITIES ZW& Board Memorandum PUSLIG UTILITIES BOARD OF PUBLIC UTILITIES DATE: July 1, 2011 ITEM NO: 6 SUBJECT: NON-EXCLUSIVE LICENSE AGREEMENT WITH YUCAIPA VALLEY WATER DISTRICT FOR SUBSURFACE USE OF A PORTION OF THE GAGE CANAL — LOMA LINDA ISSUE: That the Board of Public Utilities consider approval of a proposed License Agreement with Yucaipa Valley Water District allowing a proposed subsurface wastewater pipeline to cross the Gage Canal in the City of Loma Linda. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the Non-Exclusive License Agreement with Yucaipa Valley Water District; and 2. Authorize the City Manager, or his designee, to execute the Non-Exclusive License Agreement. BACKGROUND: In September 2010, Yucaipa Valley Water District ("YVWD") began construction of the Yucaipa Valley Regional Brineline Project (the "Project"). The Project consists of a 15-mile pipeline through which YVWD will dispose of wastewater associated with their water treatment facilities. The Project pipeline will run from the Wochholz Regional Water Recycling Facility in Calimesa and connect to an existing wastewater disposal pipeline near the 1-215 1 1-10 Interchange. Th is route requires that the pipeline cross the Gage Canal near San Timoteo Creek in the City of Loma Linda. The License Agreement permits YVWD to enter onto the Gage Canal property for the purpose of constructing and maintaining the Project pipeline for an initial five-year term, with 10 additional option periods of five years each. Under the agreement, YVWD will pay the Utility a one-time processing fee of $150, plus an annual fee of $640 (the "Base Rent"). Fair market value for determination of the Base Rent amount was established by reference to recent comparables for similarly situated properties in the local area. During the term of the License Agreement, the Base Rent will be adjusted annually based on changes in the Consumer Price Index ("CPI"). FISCAL IMPACT: First-year revenue will be $790, with revenues in subsequent years based on the $640 Base Rent, as modified by changes in the CPI, Prepared by: Gary L. Nolff, Assistant General Manager/Resources Concurs: Kevin S. Milligan, Public Utilities Assistant General Manager/Water Approved by: David H. Wright, Public Utilities General Manager Approved by: Belinda J. Graham, Assistant City Manager Approved as to form: Gregory P. Priamos, City Attorney