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HomeMy WebLinkAbout04/17/85 A G E N D A WATER BOARD - CITY OF BAKERSFIELD WEDNESDAY, APRIL 17, 1985 12:00 P.M. - NOON COMMUNITY SERVICES DEPARTMENT CONFERENCE ROOM Call meeting to order Roll call - Board Members: Moore, Chairman; Barton, Ratty 1. Approve minutes of special meeting held March 14, 1985. 2. Scheduled public statements. 3. Correspondence. 4. Proposed "Notice of Termination" to Chev-ron 'U.S.A. concerning the discharge of oilfield wastewater into the Beardsley-Lerdo Canal system. FOR BOARD ACTION AND RECOMMENDATION TO CITY COUNCIL. 5. Proposal for a .Groundwater Banking Program in Kern County between Kern Water Districts and Metropolitan Water District. FOR BOARD DISCUSSION. 6. Change in the regularly scheduled Water Board meetings. FOR BOARD DISCUSSION. 7. Closed Session - Water matters regarding potential litigation. 8. Staff comments. 9. Board comments. 10. Adjournment. SPECIAL MEETING WATER BOARD - CITY OF .BAKERSFIELD THURSDAY MARCH 14, 1985 11:30 P.M. The called order Chairman in the meeting was to b~ Moore Community Services Department Conference Room. The secretary called the roll as follows: Present: Moore (Chairman), Barton, Ratty The minutes from the meeting of December 12, 1984 were approved as presented.. Mr. Core presented, for Board information, a mainline extension refund assignment from W. Watson & Company to U. S. Home Corp. This will not increase or decrease the obligation of the City. Mr. Core also. presented for Board information, three mainline extension agreements with'Tenneco Realty Development Corp., and one mainline extension agreement with M&H Associates. The mainline eXtensions were for various locations for a total amount of $162,938.58. The Quitclaim of Ownership Interest from Olcese Water District to City of Bakersfield was presented before the Board by Mr. Core. This doCument quitclaims a water well that was drilled by the Olcese Water District in the City's 2800 acres and as provided in agreement #77-07 W.B., any wells drilled by Olcese in the 2800 Acres shall be transferred in ownership to'the City; and this instrument provides that transfer. Mr. Barton made a motion to recommend approval by City Council. ~Moti°n passed. Mr. Phillips, representing North Kern Water Storage District~ addressed the Board regarding the correspondence from NKWSD concerning the Chevron U,S.A. Oil Co., Inc. Discharge Contract. Chevron is now requesting an increase in both quality and quantity discharge requirements. North Kern W.S.D. would like to begin immediate negotiations to amend the contract to bring it in line with the new quality and quantity request. Regarding the letter to be sent to Chevron, Mr. Dow recommended that staff review this letter and bring it before the next Water Board meeting for recommended Board action. Adjourned to closed session. Meeting re-opened to the public. Meeting adjourned at ll:57a.m. Roll~e Moor~,/Chaii~.. ~ City of Bakersfield Wat~Board ~.Ca~rol Pagan, Secretary ~City of Bakersfield Water Board MEMORANDUM TO: The city of Bakersfield, Water BOard RE: Notice of Termination to Chevron U.S.A. Concerning the Discharge of Oil Field Wastewater Into the Beardsley-Lerdo Canal System. FROM: Alan Daniel and Scott K. Kuney DATE: April 17, 1985 This memorandum is written to explain to the Water Board the various reasons why it is recommended that the City of Bakersfield and North Kern Water Storage District jointly prepare and serve upon Chevron U.S.A. a Notice of Termination of the May 9, 1978, agreement for the discharge of oil field wastewater into the Beardsley-Lerdo Canal System. (A copy of the agreement, Exhibit A, is attached for your information). 1. On May 9, 1978, the City of Bakersfield and North Kern Water Storage District (collectively referred to as "Second Party") signed an agreement with Chevron U.S.A. for the discharge of its Kern River oil field wastewater into the Beardsley-Lerdo Canal System. Because both entities are joined as a single party, a joint Notice of Termination must be prepared. 2. The agreement provides in paragraph ten (10) that the Second Party may terminate the agreement upon one (1) year written notice. 3. The purpose of preparing a Notice of Termination is to encourage Chevron to commence meaningful negotiations for the execution of a new agreement concerning the discharge of oil field wastewater into the Beardsley-Lerdo Canal System. This notice will not force Chevron to cease it's discharges nor affect their operations in any fashion whatsoever for one full year. 4. In order for the City of Bakersfield and North Kern to be able to control both the quality of the water in the Beardsley-Lerdo Canal System and the financial burden associated with the discharge of oil field wastewater, it is necessary that all dischargers be acting under a uniform contractual scheme. 5. The current Chevron agreement is inadequate to protect the legal and financial interests of the City of Bakersfield and North Kern in the following respects: a. The City of Bakersfield and North Kern are incurring co~ts as a result of the Chevron discharge. i. The Chevron oil field wastewater must be monitored regularly to evaluate its water quality. The Chevron agreement in paragraph six (6), has a charge of $7.59, but the current cost for monitoring is $8.00. ii. The Chevron oil field wastewater requires that a salt correction material must be added to the water delivered to the water users of the Beardsley-Lerdo Canal System. The Chevron agreement in paragraph six (6) has a charge of $7.59, but the current Cost of salt correction is approximately $9.00. iii. The Chevron oil field wastewater requires that a quantity of Kern River water be added to dilute Chevron's discharge to an acceptable water quality. The Chevron agreement has no provision for this cost. b. The City of Bakersfield and North Kern are risking unnecessary legal liability under the terms of the Chevron agreement. i. The Chevron agreement in paragraph seven (7) has an indemnification and hold harmless clause which only protects the parties if the specified water quality standards are not complied with and then only to a limited degree. Any new agreement should protect the City of Bakersfield and North Kern if any damage is caused by the Chevron discharge at any time, and the liability portions of the clause should be expanded to include inverse condemnation and consequential damages, as well as reimbursement for litigation costs. c. The Chevron agreement does not provide an adequate provision for a cessation of discharge should a toxic or hazardous substance be discovered in the Chevron wastewater. d. The Chevron agreement does not provide for the City of Bakersfield and North Kern to be reimbursed for litigation costs and expert fees if they prevail in litigation against Chevron. e. The term of the Chevron agreement spans to the year 2000 which is longer than is in the best interests of the City of Bakersfield and North Kern. /re -2- U.S.A. INC.~ a California corporation, reinafter called "Chevron," First Party; THE CITY OF BAKERSFIELD, a Political Subdivision of the State of California, some- times hereinafter called "City" a~d NOR/ti KERN WATER STOP~.~CE DISTRICT, a Political Subdivision of the State of California, sometimes hereinafter called "District," with City and District sometimes hereinafter collectively called Second Party. W I T N E S S E T t{: WIIEI~iAS, Chevron owns and operates a water reclamation plant in the Kern River Oilfield of Kern County, California, in Section 9, Township 29 South Ra[~ge 28 East, M.D.B.&bi., wherein oilfield water produced in said oilfield by Chevron and others, and wherein refinery waste t.'ater from refineries located in and near said oilfield are processed and reclaimed for use in oilfield operations. WHEREAS, oilfield operations use less than all of the water processed and reclaimed at said reclamation plant and a surplus of said reclaimed water exists. WHEREAS, Second Party operates tile Beardsley Canal which traverses said Section 9 and owns water carried by said canal and is willing to permit Chevron to dispose of said petroleum industry process water (hereinafter called "oilfield waters") surplus to Chevron' s needs into said canal subject to certain conditions. WHEREAS, City and District have entered into a joint agreement dated August 15, 1977, pursuant to which City and District have agreed to negotiate this agreement with Chevron. N(7.4, /IIERJ~FORE, for and in consideration of the premises and of tile cove- nants hereinafter contained, the parties hereto do hereby agree as follows: ( 1. Chevron shall, at its sole risk and expense, construct such pipelines . and facilities as may be required to discharge such surplus .oilfield waters into said Beardsley Canal, which discharge point shall be mutually agreca'ble to all parties. Design nnd installations of all such pipelines or facilities shall be approved by Second Party when they encroach on Beardsley Canal right of way. 2. -~'Chevron agrees to discharge into said canal all surplus oilfield waters produced at said reclamation plant which are not used in oilfi61d operations, with such discharge to be maintained in reasonably constnnt flows, except in emergencies. In case of an emergency, City shall be immediately notified by telephone, and note of the emergency shall be logged by the C£ty Dispatcher. 3. Second Party agrees to permit the discharge into said canal of surplus oilfield waters del£vered by Chevron provided Chevron shall maintain the required NPDES Permit for the discharge of such water and provided further such water meets the discharge requirements set forth in California Regional Water Quality Control Board Order No. 77-100 (NPDES No. CA 008085'3) as it may be modi- fied from time to time and also meets the water quality specifications set forth in Paragraph 4 hereof. Any increase in the total discharge or mod if ica t idn in the water quality standards under Order No. 77-100 shall be subject to the prior approval of Second Party. 4. Chevron agrees that the quality of water discharged into said canal shall meet ,the following limits. The 30 day average of the hereinaf~er referred to quality measurements will not exceed 120% of the 30 day average over the previ.- ous 24 months for such measurements. The daily maximum of such measurements will not exceed 150°/o of the 30 day average thereof. The initial limits are to be as follows: Qu,~litv 30-Day Average Daily Maximum Electrical Conductivity 1300 micromhos 1600 micromhos Chloride 160 ag/1 200 ag/1 Boron :. 2.0 ag/1 2.0 ag/1 Oil and Grease 35 ag/1 45 ag/1 5. The parties recognize that said canal requires periodic maintenance and that emergencies may occur beyond the cot~trol of Second Party, all of which may require the closing of the canal and thc disco[~tinuance of Chcvron's discharge. Second Party agrees that prior to closing said canal for scheduled maintenance, it shall notify'Chevron by October 1 each year of the best estimate of a date for closing the canal. Second Party further agrees not to close said canal for more than ten (10) consecutive days unless by mutual agreement. Second Party agrees also that it-' shall give Chevron as much notice as practical before clo~ing said canal for emergencies. In the case of emergencies arising from o~tters beyond the control of the Second Party or any of them, Second Party agrees to use its host effort to put the canal back in operation as soon as pract£calo Chevron shmll be responsible for the disposal..~@f its surplus oilfield waters during such periods as said canal may be closed.~econd Party will make their best effort to schedule any ah~tdown of the canal at a time and in a manner whereby the Chevron surplus oilfield waters may be mixed or blended to an effluent which shall be within the standards of. acceptance as established by the Central Valley Region of the California Water Quality Control Board' ~'['hen Chevron deems it to be impractical or uneconomic to otherwise dispose of surplus water during periods of canal shut- down, Second Party agrees to jointly or severally sell Kern River water to Chevron at a reasonable rate for irrigation water at the then exi. sting market conditions from Kern River to enable Chevron to dilute and dispose of its surplus water by percolation without violation of the water quality standards established by the Central Regional Water Quality Control Board. ' 6~o Chevron agrees to pay District Five Dollars ($5.00) per ~cre foot, which charge represents costs to modify and enhance the water quality for irriga- tion use, and an additional Five Dollars ($5.00) per acre foot, which charge represents costs to monitor, sa¥~ple, control, mix, blend thc water, for each acre foot of water discharged by Chevron into said canal pursuant to this agreement. Chevron shall make all payments to District within thirty (30) days of receiving a bill therefor. The two aforementioned Five Dollar ($5.00) charges shall be subject to adju'stment upward or downward in proportion to the fluctuation, if any, in the Implicit Price Deflator Index as published by the U. S. Department of Commerce, which used the year 1972 as a base year = 100, or whatever other index shall re- place said index in the event of its discontinuance. The adjusted rate for any calendar year shall be determined by multiplying the Five Dollar ($5.00) per acre foot figures by the Price Index of the third quarter of the year immediately pre- ceding and then dividing the result by the price index for the third quarter,1977. 7. Chevron warrants that the water discharged into the Beardsley Canal shall at all times comply with the water quality standards set forth in Paragraph 3 hereof. CheOron agrees to hold Second Party harmless for any failure of said discharged water to meet said standards a~d to indemnify Secon~t Party, or either of them, for any d~mages rendered against Second Party beca,se such '~'ater fails to meet ~uch standards, including attorney's fees and costs of any sctio:~s brought against Second Party, or either of them, because of said discharge of such water - 3 - which fails to meet such standards; provided, Chevron assumes any duty or obliga- tion which may result from another governmental agency 'imposing upon Second Party a tax or assessment due to the degradation of the groundwater resulting from Chevron's said water. In the event Chevron considers any such duty, obligation, tax or assessment to be too e~.cessive, this agreement may be terminated by Chevron. 8. It is expressly understood between the parties that Chevron has not way dedicated and does not intend to dedicate and does not in any/dedicate its Reclamation Plant, pipeline facility or any portion of the water processed ~'1 Water at said reclamation facility to public use, and that Chevron is not a public utility or common carrier. 9. If the oilfield waters delivered hereunder by Chevron to Second Party cannot reasonably be economically processed to meet the discharge require- ments set forth in said California Regional Water Quality Control Board Order No. 77-100 as it may then be applicable, Chevron may cease delivering said oilfield waters to Second Party. J If the oilfield waters delivered hereunder by Chevron to Second Party cannot reasonably be economically processed to meet the water quality Standards set forth in Paragraph 4 hereof, Chevron shall, upon the request of Second Party, cease delivering said oilfield waters to Second Party. In the event said delivery stops for a consecutive 60 day period under the provisions of this paragraph, either party may, Upon ten (10) days notice to the other party, termi- nate this agreement. 10. This agreement shall become effective as of the day hereof and shall continue until January 1, 2000; provided, however, that either First Party or Second Party may terminate this agreement sooner upon one (1) year's written notice to the other. 11. Paragraphs 7, 9 and 10, notwithstanding, Chevron shall not terminate this agreement and dispose of the water dedicated to Second Party hereunder by delivery to any Third Party. 12-. Notices hereunder shall be given in writing and shall be effective upon posting in the U. S. Mail, postage fully prepaid, certified or registered, -4 - ~,.. I f ~1 . ' , 6 ',' '.'t..~' !, ',t ': ' · ~,,, i'CHEVRON U.S.A. INC. NORTH KERN WATER STORAGE DIST. CITY OF BAKERSFIEL ! .' : P, O. Box ~ ,:' P.O. Box 1195 1501 Truxtun Avenu, j .,, i~ pil .~, CA 93308 Bak~rafield, CA 93302 Bakerafield, CA 9.. 'This Agreement shall be binding upon and shall inure to the benefit of ~ ; : partles, h~reto and their respective successors and a~stgns. / ' ' IN WITNESS WHEREOF, tha parties have executed th'is Agreement ~ of the date first above written. CITY OF BAKERSFIELD CHEVRON U.S.A. INC. By ,~ chair.man, Water ~oard NORTH K~R~N WATER STORAGE DISTRICT ! NORTH KERN WATER STORAGE DISTRICT 1415 - 18th STREET, ROOM 705 BOX 1195 BAKERSFIELD, CALIFORNIA 93302 (805) 325-3116 , 1985 Ms. T. J. Balkenbush Chevron U.S.A., Inc. Post Office Box 5355 Bakersfield, California 93388 Dear Ms. Balkenbush: This letter is written to provide Chevron U.S.A., Inc., with written notice of the termination of the agreement dated May 9,' 1978, and executed between Chevron U.S.A., Inc., First Party, and the City of Bakersfield and North Kern Water Storage District, Second Party. The City Of Bakersfield and North Kern Water Storage District, Second Party, hereby give Chevron U.S.A., Inc., First Party, notice that one (1) year from the date of this letter that the above-referenced agreement shall be terminated. Very truly yours, SECOND PARTY CITY OF BAKERSFIELD NORTH KERN WATER STORAGE DISTRICT By By MAYOR, CITY OF BAKERSFIELD By By CHIEF FINANCIAL ADVISOR Approved As To Form CITY ATTORNEY ~ ~~ M E M O R A N D U M t~.R ~ ~ '1985 ~ CiTY ,OF BAKEP,_SF1 ~RCH 22~ ~985 TO ~AT~R BO~D OF T~ CITY COU~C~ OF THE C~T~ OF BAKERSFIELD F ~ OM ........ _~.~__P_~_~._E~.~_~_~__..P.~_E~.L~_~.L~_9~.~_~. ............................................................ SUBJECT .... ~.~!_~_fl~.~L.9I_~___~9_:__Z~L_;_._~.9~.~P~_~E.._~.~_~.~. ......................................... On February 19, 1985, Assemblyman Costa introduced Assembly Bill 792 which deals with groundwater management. The first thing to remember concerning pending legislation is that it may be changed at many points during the legislative process. Any major change might cause this bill to become unacceptable to the City of Bakersfield. My analysis is based upon the bill as introduced by Assemblyman Costa. This bill applies to basins with "critical conditions of groundwater overdraft," and Kern County is named as one of those basins. The bill defines "local agency" to mean'any.city. The key provision of this bill authorizes any local agency that is providing water services to establish by ordinance, or resolution, programs for the management of groundwater resources. The local agency may enter into a joint powers agreement for that purpOse. Also, the local agency may fix and collect rates for the extraction of groundwater. The law goes on to allow a local agency to exercise any of the powers of a water replenishment district. California Water Code 60001 et seq. establishes and gives power to water replenishment districts.. The purposes and powers of a water replenishment district begin with Section 60220 of the California Water Code. Section 60220 states: "A .district may do any act necessary to replenish the groundwater of said district." That one sentence sums up the following powers of a water replenishment district. The powers are enumerated under 60230 and they are extensive. The obvious purpose is to prevent overdraft in a district and replenish groundwater supplies. Assembly Bill 792 goes on to state that before a locaI agency may levy a water replenishment, assessment, the local agency shall hold an election and a majority of Votes must be cast in favor of the propo- sition. Another key provision, as far as the City of Bakersfield is concerned, is that: "No local agency shall exercise the powers authorized by this part within the boundaries of another local agency providing water service to that area, without the prior agreement of the governing body of that other local agency." ~As~mbl~ Bill 792 - Groundwater Management ~M~rch 22, 1985 Page Two Under this provision it is apparent that the Kern County Water- Agency could not exercise its powers within the city limits of Bakersfield. However, this provision does raise many interesting legal issues. For example, what will occur if the City limits are expanded and take over an area upon which the Kern County Water Agency has imposed groundwater management rules? Another problem may arise where one agency overlaps another's jurisdiction. Which agency will be allowed to impose the groundwater management rules, and to collect any assessments authorized by law? Another~problem will arise if the legis- lature were to drop that one particular paragraph from the law prior to passage. The paragraph immediately following the quoted paragraph above states that no local agency shall exercise the powers authorized by this part within the boundaries of another local agency which is expressly authorized by its principal act to conduct groundwater management programs. If the preceding paragraph was dropped, then the Kern County Water Agency might have groundwater management control throughout the Kern County water basin as it is authorized by its principle act to con- duct groundwater management programs. The City may not be able to argue that it is authorized to conduct groundwater management programs by its principle act. Thus, this legislation must be closely watched to insure that the paragraph which states, "no local agency shall exercise the powers authorized by this part within the boundaries of another local agency" remains a part of the law. ADD:kda ~~ cc: Paul Dow Gene Bogart