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RIVERSIDE PUBLIC UTILITIES Board Memorandum P 0 Lit' U T I L I T I E5 BOARD OF PUBLIC UTILITIES DATE: December 17, 2010 ITEM NO: 6 SUBJECT: COOPERATIVE AGREEMENT FOR NON-POTABLE/RECYCLED WATER DELIVERIES BETWEEN CITY OF RIVERSIDE AND WESTERN MUNICIPAL. WATER DISTRICT ISSUE: That the Board of Public Utilities consider approval of a Cooperative Agreement for Non- Potable/Recycled Water Deliveries between the City of Riverside and Western Municipal Water District of Riverside County. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council approve the Cooperative Agreement for Non-Potable/Recycled Water Deliveries between the City of Riverside and Western Municipal Water District of Riverside County. BACKGROUND: Riverside Public Utilities (RPU) and Western Municipal Water District (Western) staffs have prepared a Cooperative Agreemen for Non-Potable/Recycled Water Deliveries between City of Riverside and Western Municipal Water District [Agreement] under which the two agencies would benefit. The primary goal of the agreement is to optimize local groundwater production and the use of recycled water for the maximum benefit of the agencies' respective customers and the local region. Western owns and operates the Jefferson Pump Station and related non-potable conveyance facilities which are capable of delivering water from the terminus of RPU's Riverside Canal into Western's service territory through its non-potable water distribution system. In addition, Western owns and operates the Western Water Recycling Facility, which is capable of delivering tertiary recycled water into this same non-potable water distribution system. Under the Agreement, Western will utilize its facilities to produce non-potable or recycled water on RPU's behalf. Under the terms of the Agreement, RPU would pay to Western the following rates and charges: an energy component charge of $52.80/acre-foot (af), an O&M Component of $15.171af, and a Capital Recovery component of $133.81/af. These charges will be adjusted annually to account for increased costs and shall be submitted to the City of Riverside for review. Under the terms of the Agreement, RPU will deduct the cost of one acre-foot of non-potable/recycled water delivered by RPU to Western under the Cooperative Agreement for Water Production and Conveyance between City of Riverside and Western Municipal Water District. FISCAL IMPACT: There is no direct financial impact to RPU by entering into this Agreement. The cost of the non- potable/recycled water will be recouped by the RPU customers.