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W A T E R E K E R G Y Y I L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: May 21, 2010 ITEM NO: 8 SUBJECT: WATER SALE AGREEMENT WITH AMERICAN YOUTH SOCCER ORGANIZATION, REGION 47 ISSUE: Board of Public Utilities approval is requested to enter into a non-potable Water Sale Agreement with American Youth Soccer Organization, Region 47. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council approve the Water Sale Agreement with American Youth Soccer Organization, Region 47. BACKGROUND: The American Youth Soccer Organization, Region 47 (AYSO) leases approximately 50.01 acres located on Placentia Lane from the City of Riverside's (City) Water Utility. The complex is adjacent to Reid Park and is partially developed with wells, pipelines and a groundwater treatment plant. AYSO operates the facility as the Ab Brown Sports Complex (Complex) and is responsible for all turf and parking lot maintenance and irrigation. Historically, the Complex has been irrigated from an AYSO owned non-potable well. In early 2008, the AYSO well failed due to high sand volume and declining water levels in the basin. Riverside Public Utilities' (RPU) Water Utility owns and operates three wells located in the parking lot of the Complex. The water produced from the wells is non-potable under the Department of Public Health operating permit until it undergoes treatment and transportation to the Linden Evans Reservoir complex. In mid- 2008, the Water Utility constructed a non-potable water service from the City well discharge pipeline to the soccer complex irrigation service. All costs for the meter installation were paid by AYSO. Under the terms of the Water Sale Agreement, Riverside Public Utilities (RPU) would provide non- potable water for the maintenance of the complex at our marginal cost of production and operation of $56 per acre foot ($0.01280/ccf). Water sales will be subject to the Utility User Tax (6.5%) and the Water Conservation and Reclamation surcharge (1.5%). A billing fee of$222.46 will be added to each monthly invoice. The agreement provides water to AYSO at a cost comparable to the operation and maintenance cost of their well. The agreement is intended as a "bridge" to either their future relocation following expiration of their lease, or their construction of a new well. AYSO's cost to construct a new well is estimated at $300,000. RPU's ability to deliver water at this marginal rate is due to a temporary surplus in production capacity, due to decreased customer demand, and physical proximity of the leased soccer fields to a non-potable well. This agreement will be terminated in the next several years as the surplus capacity ceases as customer demand increases. The Finance and Marketing Committee reviewed this matter at their regular meeting October 23, 2009.