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I Memorandum of Understanding
2 Relating to the Service Review by LAFCO
3 of the San Bernardino Valley Water Conservation District
4
5
6 This Memorandum of Understanding Relating to the Service Review by LAFCO
7 of the San Bernardino Valley Water Conservation District ("MOU") is entered into and
8 effective this 2nd day of August, 2005 by and between the City of Redlands
9 ("Redlands") and the San Bernardino Valley Municipal Water District ("Valley
10 District"). Redlands and Valley District are each referred to as a"Party" and are
11 collectively referred to as the "Parties."
12
13 Recitals
14
15 A. Redlands relies upon the extraction of groundwater from the Bunker Hill
16 Basin for approximately 50% of the water it serves to its residents, which percentage is
17 expected to increase in the future;
18
19 B. Valley District is required by the terms of the judgment in Western
20 Municipal Water District v. East San Bernardino County Water District(Riverside
21 County Superior Court No. 78426) to maintain the safe yield of the Bunker Hill Basin for
22 the benefit of all Non-Plaintiff parties under the judgment, including Redlands;
23
24 C. Because of their respective interests in the Bunker Hill Basin, the Parties
25 wish to ensure the most effective and efficient management of that basin;
26
27 D. The San Bernardino County Local Agency Formation Commission
28 ("LAFCO"), as required by Government Code section 56430, is engaged in reviewing
29 the services provided by the San Bernardino Valley Water Conservation District
30 ("Conservation District") and is considerip-whether a change in organization of the
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31 Conservation District would serve the public interest in the efficient and effective
32 provision of governmental services.
33
34 E. The Parties believe that the water spreading activities at the Conservation
35 District spreading grounds are important to maintaining groundwater supplies in the
36 Bunker Hill Basin;
37
38 F. The Parties further believe that Valley District can provide the
39 groundwater recharge function of the Conservation District in a manner that eliminates
10 the groundwater charge and so will save the,:,-s;.dents of the San Bernardino Valley
41 approximately $600,000 in fiscal year 2005/06;
42
43 G. The Parties additionally believe that the consolidation of the Conservation
44 District into Valley District will allow for the more effective management of the Bunker
45 Hill Basin under the auspices of the Seven Oaks Accord, of which the Conservation
46 District is not a party;
47
48 H. On July 19, 2005, the City Council of Redlands voted to direct staff to
49 enter into negotiations with Valley District that are intended to reach agreement on the
50 terms and conditions under which Redlands' interests in Bunker Hill Basin as a large part
51 of its water supply could be assured if LAFCO independently determines that the
52 Conservation District should be consolidated into Valley District;
53
54 1. On July 20, 2005, the Board of Directors of Valley District, in response to
55 LAFCO's request, considered taking a position with regard to consolidating the
56 Conservation District into San Bernardino County Flood Control District, consolidating
57 into Valley District, expanding Conservation District's sphere of influence to cover the
58 entire Bunker Hill Basin, or suggesting no change. During consideration of this item,
59 Valley District Board Members requested additional information, including the terms and
60 conditions under which Redlands would agree that its water supply interest in the Bunker
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61 Hill Basin would be protected if LAFCO determines that the Conservation District should
62 be consolidated into Valley District; and
63
64 J. The Parties recognize and acknowledge that LAFCO has the sole and
65 exclusive authority to consider and implement changes in the organization of special
66 districts. The purpose of this MOU is to better implement any decision that may be made
67 by LAFCO in connection with its review of the services provided by the Conservation
68 District.
69
-70
Understandings
71
72 1. LAFCO Authority. The Parties hereby acknowledge that LAFCO has sole and
73 exclusive authority over the terms and conditions of any change in the
74 organization of special districts in San Bernardino County and that nothing in this
75 MOU shall be construed so as to interfere in any way with the full and free
76 exercise of that authority by LAFCO. It is the intent of the Parties that the terms
77 of this MOU and the future agreement described in paragraph 4 below be
78 construed so as to best implement any decision that LAFCO may make regarding
79 the potential change in organization of the Conservation District. In the event that
80 any provision of this MOU or the future agreement described in paragraph 4
81 below interferes with the implementation of LAFCO's decision on the services to
82 be provided by the Conservation District, that provision shall be stricken and the
83 Parties shall agree on a substitute provision that is as close as possible to the
84 stricken provision but that is consistent with LAFCO's decision on the services to
85 be provided by the Conservation District.
86
87 2. Recommendation to LAFCO. Within five days of the effective date of this MOU,
88 the Parties shall send a joint letter to LAFCO recommending that, if LAFCO
89 determines the consolidation or other change in organization of the Conservation
90 District to be in the public interest, LAFCO consider including the following
I
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91 terms and conditions as part of any such consolidation or other change in
92 organization:
93
94 a. Employment Security for Conservation District Employees. All
95 employees of the Conservation District as of July 1, 2005 will be offered
96 employment at Redlands or Valley District as may be directed by LAFCO.
97
98 b. Abolition of Groundwater Assessment. The groundwater assessment
99 currently levied by the Conservation District will be abolished as part of
100 any change in organization. Valley District may not propose an.-election
101 to approve the levy of another tax, assessment, or fee/charge without the
102 consent of a majority of the members of the basin management committee
103 described below and other producers in the San Bernardino Basin Area,
104 which producers would be identified by LAFCO as part of any decision.
105
106 C. Basin Management Account. Valley District shall place all revenues
107 (other than the groundwater assessment) currently being received by the
108 Conservation District into a segregated account ("Basin Management
109 Account") that will only be used to fund recharge efforts and other basin-
110 related operations, including but not limited to staff costs and
III administrative expenses. The Basin Management Account shall be
112 supervised in a manner consistent with the terms of the Seven Oaks
113 Accord by a committee composed of Redlands, Valley District, Bear
114 Valley Mutual Water Company, East Valley Water District, the City of
115 San Bernardino Municipal Water Department, the City of Riverside Public
116 Utilities Department, Western Municipal Water District of Riverside
117 County and any other producer from the San Bernardino Basin Area that
118 LAFCO deems to be appropriate. Valley District shall provide an annual
119 report on the fund's operations to the parties to the Seven Oaks Accord
120 and to all other water purveyors in the San Bernardino Basin Area.
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121
122 d. Implementation of Plan B. The Parties shall work cooperatively towards
123 the expeditious completion of the environmental document for the Santa
124 Ana River Wash Plan ("Plan B") and the subsequent implementation of
125 Plan B. Nothing in this MOU shall prevent the Parties from amending
126 Plan B in cooperation with other Plan B member agencies to be consistent
127 with the Seven Oaks Accord or other efforts cooperatively to manage
128 water in the Bunker Hill Basin. Valley District shall serve as state lead
129 agency for the purpose of environmental review of Plan B.
130
131 e. Conveyance of Real Property to Redlands. The Mill Creek spreading
132 basins that were formerly owned by Redlands shall be conveyed back to
133 Redlands. This conveyance shall include the property originally held by
134 the East Lugonia Water Company. Redlands shall operate these facilities
135 in a manner that is consistent with the Seven Oaks Accord. The costs of
136 operating the Mill Creek spreading basis shall be covered by
137 disbursements from the Basin Management Account as described in an
138 annual operating budget pre-approved by Valley District.
139
140 f. Water Rights. The portion of the Conservation District's Water Right
141 Application No. 31370 that seeks the right to divert water from Mill Creek
142 shall be assigned to the Mill Creek Water Owners as part of the resolution
143 of Valley District's and Redlands' protests against that application.
144
145 3. Term. This MOU shall continue in effect until July 1, 2008 unless cancelled in
146 writing by both Parties prior to that date.
147
148 4. Future Agreement. In the event that LAFCO determines, in its sole and absolute
149 discretion, that the public interest would be served by a change of organization
150 that results in the consolidation or other change in organization of the
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151 Conservation District, with Valley District serving as the successor agency to the
152 Conservation District in whole or in part, then the Parties will promptly take such
153 steps as may be necessary in good faith to enter in an agreement to implement
154 LAFCO's resolution making determinations and/or any other applicable orders,
155 resolutions or decisions.
156
157 CITY OF REDLANDS
158
159
160 By:
161 Susan'Pep�ler
162 Mayor
163
164 Attest:
165
166 By:
167 Corrie P, 'Ozer
168 City Clerk
169
170
171 SAN BE "'INO LL N ZPAL WATER DISTRICT
172
173
174 B
175 C. Patrick Milligan
176 President, Board of Directors
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6924443
AGENDA ITEM NO. C _ /
COUNCIL MEETING OF 08/2/05
DISCUSSION AND POSSIBLE ACTION
SUBJECT: DISCUSSION AND POSSIBLE ACTION REGARDING THE STATUS OF
A PROPOSED AGREEMENT WITH THE SAN BERNARDINO VALLEY
MUNICIPAL WATER DISTRICT REGARDING A POSSIBLE
CONSOLIDATION OF THE SAN BERNARDINO VALLEY WATER
CONSERVATION DISTRICT
MOTIONS:
1. Based upon the verbal and written evidence presented by City staff, I move to determine
that the City's approval of the proposed Memorandum of Understanding with San
Bernardino Valley Municipal Water District recommending conditions to LAFCO in
connection with the possible consolidation of the San Bernardino Valley Water
Conservation District is exempt from further environmental review under the California
Environmental Quality Act.
2. 1 move to approve the Memorandum of Understanding with the San Bernardino Valley
Municipal Water District recommending conditions to LAFCO in connection with the
possible consolidation of the San Bernardino Valley Water Conservation District, subject
to possible non-substantive changes requested by the San Bernardino Valley Municipal
Water District and approved by the City Manager and City Attorney, and authorize the
Mayor to execute the Memorandum of Understanding.
RECOMMENDATION:
City staff recommends that the City Council approve the proposed agreement.
DISCUSSION:
On July 19, 2005, the City Council authorized the Mayor, in behalf of the City, to execute a
letter to LAFCO supporting the consolidation of the San Bernardino Valley Water Conservation
District (WCD) with the San Bernardino Valley Municipal Water District (MUNI). That letter
has since been delivered to LAFCO in anticipation of LAFCO's August 17th Board Meeting at
which the potential consolidation is scheduled to be discussed. In addition, also on July 19th, the
City Council authorized Staff to enter into discussions with MUNI for the development of an
agreement which would make recommendations to LAFCO for the inclusion of conditions of the
potential LAFCO consolidation of the WCD with MUNI to protect the City's interests.
At its meeting of July 01h. Staff hand delivered the letter from the Mayor to MUNI's Board of
Directors which asked that Board to provide MUNI's staff with authorization to enter into
Agreement with SBVMWD Regarding LAFCO Consolidation
City Council Meeting of 08/02/05
Page 2
discussions with City Staff. At that July 20'h meeting, the MUNI Board discussed both the topic
of a potential consolidation of the WCD with its District, and a possible agreement with the City
which would recommend conditions to LAFCO. MUNI's Board took no action on the
consolidation but did ask its staff to meet with Redlands' staff, and others, to begin discussions
about an agreement and to gather additional information on the proposed consolidation which
would be brought back to the Board.
City and MUNI staff commenced their discussions on July 215t, and those discussions have
culminated in the attached draft agreement being prepared for your consideration All of the
conditions to protect the City's interests that were recommended by City staff and desired by the
City Council are incorporated in the draft agreement. In summary, they are:
I. Employment security for WCD employees.
2. Establishment of a Basin Management Account to be used exclusively to fund recharge
efforts and other basin related operations. An annual accounting of the expenses will be
provided to the City.
3. The Wash Plan(Plan B) will continue to be implemented.
4. Mill Creek recharge property will be conveyed to the City of Redlands.
5. Costs for operating the Mill Creek facilities will be covered by the Basin Management
Account.
In addition, a sixth condition has been recommended by staff for inclusion in the agreement
which came as a request from the Bear Valley Mutual Water Company. That is, that LAFCO
consider, as part of the possible consolidation, assigning that portion of the WCD's water rights
application relating to Mill Creek to the Mill Creek Water Owners (the "Mill Creek Water
Owners" is comprised of Redlands and the Crafton Water Company) Such an assignment is
favored by City staff, and would protect the City's water rights to Mill Creek and would further
the City Council's goal of amicably resolving the water rights disputes that are pending before
the State Water Resources Control Board.
City Staff believes that the proposed agreement, as drafted, fully protects the City's long-term
interests in the water and habitat resources of Mill Creek and Santa Ana River. If Muni's Board
approves the agreement as drafted, Staff will provide a copy of the agreement to the LAFCO
Board on August 17`h
when it is scheduled to consider the possible consolidation of the WCD.
CEOA ANALYSIS:
For the following reasons, City Staff recommends that the City Council's approval of the
Agreement between the City and MUNI recommending to LAFCO conditions in connection with
the possible consolidation of the WCD with MUNI is exempt from further environmental review
under the California Environmental Quality Act ("CEQA"). First, City staff believes that the
agreement does not constitute a project." Public Resources Code section 21065 defines a
"project," for purposes of CEQA, as "an activity which may cause either a direct physical change
0J
in the environment, or a reasonably foreseeable indirect physical change in the environment . . .
Further, the State's CEQA Guidelines, in section 15378, list several activities which do not fall
Agreement with SBVMWI) Regarding LAFCO Consolidation
City Council Meeting of 08/02/05
Page 3
within the meaning of a "project." Those include (a) continuing administrative or maintenance
activities, (b) organizational or administrative activities of governments that are "political" or
that do not involve physical changes in the environment, and (c) the creation of government
funding mechanisms or other government fiscal activities which do not involve any commitment
to any specific project which may result in a potentially significant physical effect on the
environment.
As City staff has described in this report, there are six recommended conditions which are the
subject of the proposed Agreement, and which will be made to LAFCO in connection with any
action it may take in a potential consolidation of MUNI with the WCD. It is staff's position that
a review of those six conditions (which, again, are simply recommendations) do not cause any
direct physical change in the environment or any reasonably foreseeable change in the
environment. These recommended conditions largely consist of continuing administrative or
maintenance activities. For example, two of the recommended conditions are that the Wash Plan
(which is a subject of its own environmental impact report) be continued, and that there be
continued employment provided to the WCD's employees. Two of the other conditions relate
to the continued recharge of groundwater through existing Mill Creek recharge properties. These
recharge operations, again, will not be substantially changed. The remainder of the conditions
relate to the creation of funding mechanisms or fiscal accounting for these continued operations.
Accordingly, City staff believe the City's and MUNI's entry into the proposed agreement, which
simply makes recommendations to another governmental agency, is not a project as defined in
Public Resources Code section 21065.
City staff also believes that the City Council may use what is often referred to as the "common
sense" exemption. That is, a project will be exempt from environmental review under CEQA,
pursuant to State Guidelines section15061, if a determination can be made that "it can be seen
with certainty that there is no possibility that the activity in question may have a significant
effect on the environment. . ." City staff believes that is the case of the proposed Agreement.
Therefore, if the City Council agrees that this project is exempt, the City, in conjunction with
MUNI should its Board approve the agreement, will prepare a Notice of Exemption as provided
for in State Guidelines section 15062 and file that notice with the San Bernardino County Clerk.
Prepared by: Concurrence:
till
C///P
DO LAS D. HEADRICK GARY HEL
Chief of Water Resources Municiol Utilities Director
Recommended: Reviewed By:
J J HN AV-7D—`SO DANIEL J. M(ZHUGH
�! 1.
Ci -,&, anager Citv Attorney
Agreement Consolidation of SBMWD and SBWCD - Due to a potential conflict of
interest, Councilmember Gilbreath retired from the Council Chambers and
did not participate in this matter; a Public Disclosure of Potential Conflict
of Interest form is on rile in the City Clerk's Office. Chief of Water
Resources Headrick reviewed the past two City Council meetings and
actions taken in regard to the possible consolidation of the San Bernardino
Valley Municipal Water District and the San Bernardino Valley Water
Conservation District and a possible agreement with the City which would
recommend conditions to LAFCO. City and San Bernardino Valley
Municipal Water District staff commenced their discussion on July 21,
2005, and those discussions have culminated in a draft agreement for the
City Council's consideration. All of the conditions to protect the City's
interests that were recommended by City staff and desired by the City
Council are incorporated in the draft agreement. Mr. Headrick
summarized the conditions contained in the draft agreement. City staff
believes the proposed agreement, as drafted, fully protects the City's long-
term interests in the water and habitat resources of Mill Creek and Santa
Ana River. If the San Bernardino Valley Municipal Water District's Board
approves the agreement as drafted, staff will provide a copy of the
agreement to LAFCO on August 17, 2005, when it is scheduled to consider
the possible consolidation with the San Bernardino Valley Water
Conservation District. Based upon the verbal and written evidence
presented by City staff, Councilmember George moved to determine that
the City's approval of the proposed Memorandum of Understanding with
San Bernardino Valley Municipal Water District recommending conditions
to LAFCO in connection with the possible consolidation of the san
Bernardino Valley Water Conservation District is exempt from further
environmental review under the California Environmental Quality Act.
Motion seconded by Councilmember Peppler and carried with
Councilmember Gilbreath abstaining. Councilmember George moved to
approve the Memorandum of Understanding with the San Bernardino
Valley Municipal Water District, recommending conditions to LAFCO in
connection with the possible consolidation of the San Bernardino Valley
Water Conservation District, subject to possible non-substantive changes
requested by the San Bernardino Valley Municipal Water District and
approved by the City Manager and City Attorney, and authorized the
Mayor to execute, and the City Clerk to attest to, the Memorandum of
Understanding on behalf of the City. Motion seconded by Councilmember
Peppler and carried with Councilmember Gilbreath abstaining.
CLOSED SESSION
The City Council meeting recessed at 4:04 P.M. to a closed session to discuss
the following:
August 2,2005
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