ADMINISTRATIVE COMMITTEE
8.	CONSIDER APPROVAL OF AMENDMENT 2 TO THE COST SHARING AGREEMENT WITH THE MONTEREY REGIONAL WATER POLLUTION CONTROL AGENCY FOR THE PURE WATER MONTEREY PROJECT
Meeting Date:		September 11, 2017	Budgeted:	N/A
From:		David J. Stoldt	Program/
		General Manager	Line Item No.:	N/A
Prepared By:		Suresh Prasad	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: N/A
CEQA Compliance: Action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: In May 2013, the District entered into a Cost-Sharing Agreement with the Monterey Regional Water Pollution Control Agency (MRWPCA) to fund the Groundwater Replenishment (GWR) Project planning and development costs. Beginning with Fiscal Year 2013-14, MRWPCA agreed to fund 25% of all costs listed in Section II (A)(1,2) of the attached Agreement (Exhibit 8-A), while MPWMD agreed to pay for 75% of the specified costs. In July 2016, the District entered into Amendment 1 to the Cost Sharing Agreement.

The attached Amendment 2 (Exhibit 8-B), proposes the following changes to the Agreement:

· Planning and Development Costs Definition

Amending the existing planning and development costs definition.

· Add Reimbursement of Planning and Development Costs

Adding a new section to address the planning and development costs reimbursed through the State Revolving Fund (SRF) Loan. This section addresses the initial reimbursement share for each agency and addresses how subsequent reimbursements would be shared between the two agencies.

· Add Unreimbursed Construction Period Costs

Adding a new section to address project related costs that are not allowed to be paid through the SRF loan between March 1, 2017 to June 30, 2019.

· Add Financing of GWR Unreimbursed Construction Period Costs

Adding a section to state that MPWMD shall pay seventy-five percent of the unreimbursed costs and MRWPCA shall pay twenty-five percent of such costs.

· Add Debt Service Reserve Fund

Adding a section to address funding the debt service reserve fund. MPWMD and MRWPCA would each equally fund the debt reserve service fund. Each year, MPWMD would receive one-half of the interest earned on the reserve fund. Upon maturity of the SRF loan, MRWPCA would remit to MPWMD one-half of the debt reserve fund.

· Amending Term

Amending the existing term of the Agreement to remain in effect until the maturity of the SRF loan. This is to address the duration of the debt reserve fund.

RECOMMENDATION: The Board should approve Amendment 2 to the Cost Sharing Agreement with MRWPCA for the Pure Water Monterey Project (Exhibit 8-B).

FISCAL IMPACT: Funding of the one-half of the debt reserve fund will come from the proceeds received from SRF loan toward reimbursement of planning and development costs.

EXHIBITS

8-A MRWPCA-MPWMD GWR Project Cost-Sharing Agreement

8-B Amendment 1 – MRWPCA-MPWMD GWR Project Cost Sharing Agreement

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