FROM:
Engineering
SUBJECT:
Title
Recharge Recycled Water Contract with Fontana Water Company
End
RECOMMENDATION:
Recommendation
1. Approve an Agreement regarding the transfer of recycled water recharged by the Inland Empire Utilities Agency for the City and transferred to the Fontana Water Company.
2. Authorize the City Manager to enter into the Agreement with the Fontana Water Company regarding the transfer of recycled water recharged.
End
COUNCIL GOALS:
• To invest in the City’s infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.
• To invest in the City’s infrastructure (streets, sewers, parks, etc.) by providing for the development of new infrastructure.
DISCUSSION:
The City of Fontana (City) is a signatory to the Chino Basin Regional Sewage Contract (Regional Contract) with the Inland Empire Utilities Agency (IEUA). As a contracting agency, the City is entitled to a pro rata share (11,000 acre-feet) of recycled water recharged by IEUA into the Chino Groundwater Basin. Section 15.B.1 of the Regional Contract authorizes each contracting agency to transfer its rights to such recharged water.
Although the City is an Appropriative Pool member of the Chino Basin Watermaster, it is not a retail water provider. Therefore, the City desires to enter into an agreement with Fontana Water Company (FWC) to transfer the City's right of first purchase for its base entitlement of recycled water recharged by IEUA in excess of 3,000 acre-feet per fiscal year.
The proposed agreement would also allow FWC to purchase and receive the rights to any recycled water recharged on behalf of the City that is not purchased by the City of Ontario. The agreement term will be five years.
Under the agreement, FWC will pay the then-current IEUA recharge rate applicable at the time of purchase, plus an additional amount equal to five percent (5%) of the applicable IEUA recharge rate, which will be paid to the City as consideration for the transfer of these rights.
FISCAL IMPACT:
Under the terms of the Agreement, on an annual basis, FWC will pay the City a fixed 5% of the current fiscal year IEUA recharge rate per acre foot established by IEUA for the Transfer Rights from City to FWC, which is $35.74 for 2025-26. As revenue is dependent upon if FWC purchases the recycled water, estimated annual revenue may range from $0 up to $393,140, assuming that the City of Ontario did not purchase their entitled acre-feet. Additionally, Fontana Water Company agrees to pay all costs and fees associated with the use of the transferred recycled water.
MOTION:
Approve staff recommendation.