HomeMy WebLinkAbout2010-09-28 - YLWD-MWDOC-OCWD Ad Hoc Committee Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
MWDOC AND OCWD AD HOC COMMITTEE MEETING
Tuesday, September 28, 2010, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
YLWD COMMITTEE MEMBERS YLWD STAFF
Director William R. Mills, Chair Ken Vecchiarelli, General Manager
Director Michael J. Beverage Pat Grady, Asst General Manager
MWDOC COMMITTEE MEMBER MWDOC STAFF
Director Brett Barbre Kevin Hunt, General Manager
OCWD COMMITTEE MEMBER OCWD STAFF
Director Roger Yoh Mike Markus, General Manager
1. PUBLIC COMMENTS
Any individual wishing to address the committee is requested to identify themselves and state the matter on
which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for
their comment when the item is considered. No action will be taken on matters not listed on this agenda.
Comments are limited to matters of public interest and matters within the jurisdiction of the Water District.
Comments are limited to five minutes.
2. DISCUSSION ITEMS
This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar
items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda
may also include items for information only.
2.1. MWDOC Settlement Agreement
2.2. Results of MWDOC Strategic Review
2.3. Upgrade of MWD's OC-51 Connection
2.4. MWD Issues
2.5. Status of OCWD Annexation Process
2.6. Future Agenda Items and Staff Tasks
3. ADJOURNMENT
3.1. The next regular meeting of the YLWD/MWDOC/OCWD Ad Hoc Committee will be held
November 23, 2010 at 4:00 p.m.
Items Distributed to the Committee Less Than 72 Hours Prior to the Meeting
Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items
and are distributed to a majority of the Committee less than seventy-two (72) hours prior to the meeting will be available
for public inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA
92870, during regular business hours. When practical, these public records will also be made available on the District's
internet website accessible at http://www.ylwd.com/.
Accommodations for the Disabled
Any person may make a request for a disability-related modification or accommodation needed for that person to be
able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba
Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and
the type of accommodation requested. A telephone number or other contact information should be included so the
District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should
make the request with adequate time before the meeting for the District to provide the requested accommodation.
ITEM NO. 2.1
AGENDA REPORT
Meeting Date: September 28, 2010
Subject: MWDOC Settlement Agreement
ATTACHMENTS:
Name: cv, i~a$icri: a ype:
Correspondence. pdf Correspondence Backup Material
Agreement.pdf Agreement Backup Material
MUNICIPAL
WATER
DISTRICT
OF
ORANGE
COUNTY
September 17, 2010
Via email
The Honorable William Mills, Yorba Linda Water District
Dear President Mills,
Subject: Approval of Agreement between Municipal Water District of Orange
County and its Member Agencies
First, I want to personally thank all of the Board members, general managers and staff who
have spent untold hours over the past few months and years in negotiating this agreement.
Without the dedication of these folks who have gone "the extra mile" to resolve the various
issues, we would not be in the position that we are today. As with all negotiations, no side is
totally happy or satisfied with all aspects of the agreement, but by working together as a
unified district, I believe we will assure the future water supply reliability in Orange County at
the lowest cost for all of our citizens.
Attached please find the Settlement Agreement ("Agreement") between Municipal Water
District of Orange County ("MWDOC") and its Member Agencies on Budget, Activities, Charges
and Other Issues. This Agreement is ready for your consideration and action. I am asking for
your agency's approval. The Agreement would then go to the MWDOC Board for action.
MWDOC's staff is prepared to assist Member Agencies at any time when this Agreement is
scheduled for consideration by your governing boards and councils. We are also available
ahead of time to explain any aspects or wording provisions in the Agreement if you or your
attorneys have any questions. However, given the number of entities involved in the approval
process, our goal is to approve the Agreement in its current form. MWDOC has drafted and
attached a sample staff report for your use or modification to assist you in this process. I will
be available along with the other Board members and our staff to cover any meetings you may
have. Please coordinate with Pat Meszaros at (714) 593-5025 to alert us regarding your
schedule, so that we may provide the necessary support.
Thanks again to all for the time invested in this process. Many folks have come together to
make this a possibility, and we look forward to moving ahead in unison on water issues
impacting Orange County.
Sincerely,
Joan Finnegan, President
cc: Ken Vecchiarelli, General Manager
Enclosure
Draft Sample Staff Report
For Use by MWDOC's Member Agencies
To: Governing Board or Council
Subject: Approval of Agreement between Municipal Water District of Orange County
(MWDOC) and its Member Agencies on Budget, Activities, Charges, and Other
Issues
Recommendation
It is recommended that (insert - Mavor, President of the Board Other) be authorized to
execute the attached agreement with Municipal Water District of Orange County and its 27
other Member Agencies which outlines improvements in the way MWDOC works with its
agencies.
Background
The Municipal Water District of Orange (MWDOC) provides wholesale imported water to
(insert) and 27 other Member Agencies throughout Orange County. MWDOC receives
imported water from the Colorado River Aqueduct and State Water Project through the
Metropolitan Water District of Southern California (MET) and also provides the following
services:
• MWDOC is a member agency of MET
o Appoints four member to the MET Board of Directors
o Represents 28 Member Agencies' interest at MET (collectively we pay about
$140 million dollars to MET each year)
• MWDOC also provides regional services for Orange County
o Water use efficiency programs
o Water supply planning activities
o Public affairs
o Governmental affairs
o School education programs
o Emergency preparedness programs through the Water Emergency Response
Organization of Orange County (WEROC)
o Seeks and secures grants each year ranging from about $3 million to about $7
million to help offset local costs or expand services available in Orange County
)
Attachment A provides a more detailed description of MWDOC's services.
MWDOC was formed in 1951 to secure imported water to areas of Orange County outside of
the original MET formation areas of Anaheim, Fullerton and Santa Ana. Over the years,
MWDOC was instrumental in planning and construction of regional projects, but refrained from
operating and maintaining facilities until the construction of the Allen McColloch Pipeline in
1980, which MWDOC operated and maintained until 1995 at such time and the facility was
transferred back to MET at a net gain to the local owners of the facility of $85 million. In recent
years, highlights by MWDOC have included the water reliability planning within Orange County,
getting MET to complete improvements at the Diemer Filtration Plant that benefit all residents
of Orange County, approval and implementation of parts of the Emergency Services Plan that
provides an improved ability to move water between north and south Orange County and
pursuit of ocean desalination projects in both Dana Point and Huntington Beach. MWDOC is
also highly recognized for its Water Use Efficiency Programs that are aimed at using water more
efficiently among all of MWDOC's 28 Member Agencies and its Public Affairs programs that
help to provide coordinated messages in the water community in Orange County including the
development and implementation of the "Water: Do More With Less" Program.
MWDOC's operating budget to cover staff time and other expenses runs about $6 million per
year. Often, grant funding brought into Orange County by MWDOC ranges between $3 million
and $7 million per year. The grant funds are used to help implement various water programs in
the County. Including water purchases and debt service, MWDOC's total budget is about $150
million per year. MWDOC also provides considerable assistance to the Orange County Water
District in seeking and securing imported replenishment water and other conjunctive use
accounts and in managing this water supply in Orange County. Politically, MWDOC is active in
looking out for the best interests of the residents within Orange County and in assisting MET in
pursuing solutions to the State Water Project and Colorado River supply problems. MWDOC
works with its Member Agencies in a cooperative and collaborative manner in many different
forums that are convened on a monthly basis and open to all agencies. These include:
• Public Affairs Workgroup
• Water Use Efficiency Workgroup
• Member Agency Manager's Meetings
• Joint Meetings with the MWDOC Directors and MET Directors
• Joint Planning Committee meeting between MWDOC and OCWD
• Poseidon Huntington Beach Ocean Desalination Workgroup
• South Orange Coastal Ocean Desalination (Dana Point) Workgroup
• Other forums as necessary
MWDOC consolidated with another wholesale agency, Coastal Municipal Water District, in
2000.
MWDOC was the successor agency in the consolidation, but changed its Board structure from a
five person publically elected board to a seven person publically elected board. As part of the
consolidation transition, MWDOC held elections in all seven divisions in November of 2000 to
open up the governance of the agency. With the new board being seated in January 2001,
MWDOC became a more proactive agency from many perspectives.
Over the past several years, MWDOC's activities, budget and service model were questioned by
several of its Member Agencies. These agencies raised concerns over whether MWDOC should
be more responsible to the public who elected the directors of MWDOC or to the Member
Agencies (another "public"). MWDOC's position has always been that both sets of "public" are
important to our business and together MWDOC and its Member Agencies service the good of
the general public. Several of the Member Agencies requested the ability to opt out of certain
services. Questions were also raised about the equity of MWDOC's rate structure and whether
MWDOC's governance structure is appropriate for the types of services it provides. These
concerns were discussed over several years in a number of forums and are now being resolved
via the attached "settlement agreement" being entered into by MWDOC and its 28 Member
Agencies.
The attached agreement addresses the concerns raised and provides for new policies and
opportunities to increase the amount of input and choice in MWDOC's services, while
maintaining MWDOC's role as a wholesale water provider and regional water planning agency.
During the term of this agreement, MWDOC's Member Agencies will agree not to pursue
changes to MWDOC's governance structure, finances, or a detachment from MWDOC, either
through legislation, or through an application to the Orange County Local Agency Formation
Commission (OCLAFCO) while MWDOC will agree to a number of changes as outlined below.
The new framework set forth in this agreement was developed through an extensive
negotiating process that included an Ad Hoc Committee of elected officials and representatives
from MWDOC and a number of the South County agencies. MWDOC is looking to have all 28 of
its Member Agencies consider and approve the document. The agreement will be considered
by MWDOC Board for action after two-thirds of the Member Agencies (19) have approved the
agreement.
Terms of the Agreement
Beginning in fiscal year 2011-12, MWDOC will adopt a new business model in which individual
Member Agencies will have a choice as to whether they participate in certain MWDOC
programs. The "choice" programs will include:
• South Orange Coastal Ocean Desalination Project
• Poseidon Huntington Beach Ocean Desalination
• MWDOC's School Program
• MWDOC's Water Use Efficiency Programs
Each year, MWDOC will develop a budget for these "choice" programs in collaboration with the
Member Agencies and only the Member Agencies that elect to participate will be charged
directly for these services. Going forward, MWDOC will have the opportunity to develop
additional programs or modify programs through this new service model. If one of MWDOC's
Member Agencies wants to provide similar services to another of MWDOC's Member Agencies,
MWDOC has the first right of refusal to provide the service to the requesting agency.
Under the agreement, MWDOC will also realign its rate structure to reflect the regional nature
of MWDOC's services. MWDOC's current rate structure includes both a fixed retail connection
charge and a per acre-foot charge. Approximately 65% of MWDOC's revenues are captured
from the per-retail connection charge, and 35% are captured through the per acre-foot charge.
Beginning in fiscal year 2011-12, MWDOC will transition over a five year period to recovering all
of its revenue from the fixed retail connection charge.
Signatories to the agreement will be given the opportunity to nominate candidates to be
appointed by MWDOC to the MET Board of Directors when vacancies occur among MWDOC's
delegation of four directors appointed to the MET Board. Following the first vacancy from the
MWDOC's MET delegation, signatories from South County will nominate one candidate.
Signatories from North County will nominate a candidate following the second vacancy. The
MWDOC Board will give serious consideration to each candidate and can only reject nominated
candidates for "cause". After the MET directors are appointed, they serve in an "at will"
capacity at the pleasure of the MWDOC Board.
Under the agreement, MWDOC will begin holding additional meetings to increase Member
Agency involvement in MWDOC's activities, and in developing water resource goals and
objectives for the region. MWDOC will hold semi-annual meetings specifically for elected
representatives from Orange County water entities to attend and participate. MWDOC will
conduct additional MET director meetings each year in coordination with the MET Member
Agency cities of Anaheim, Fullerton, and Santa Ana that will be open to all entities in the
County.
Recommendation
Overall, approval of the settlement agreement is in the best interests of the water community
and residents of Orange County. Working together as a unified District will further assure the
future water supply reliability in Orange County at a lower cost for all of its citizens. Therefore,
it is recommended that the attached agreement be approved for execution.
Attachment A
MWDOC Services/Activities
Core Activities Choice Activities Overhead Costs
Board Compensation & Benefit Water Use Efficiency Salary charged to overhead
Retiree Costs • Residential clothes washers function (vacation, sick
Legal Costs • Sprinkler nozzles leave and holidays)'
Board Elections • SmarTimers Personnel development
Accounting and General Admin • CII Plumbing Fixtures Legal costs charged to
MET Representation • Synthetic Turf overhead function
• MET Director Support • Hotel Program Employee benefits
• MET policy analysis, programs and special projects • Industrial Program Personnel/staff
• MET operations, water rates and accounting • Landscape Certification development
staff time for MWDOC's Water Use Efficiency Programs Program Information technology
Manager includes marketing materials for Conference employee
Governmental Affairs Travel & Accommodations
WUE activities, staff time,
• In-house staff for legislative info overhead and grant funds (MET employee
• WACO, ISDOC and other support and other) Automotive/Mileage/Toll
• Federal lobbyist for countywide funding Governmental Relations Office maintenance
• State lobbyist for countywide legislative, grant . Federal lobbying for SOCODP Rents & Leases
funding and policy access - Barker Office supplies
• Local lobbyist for Board of Supervisors • Federal lobbying for SOCODP Insurance expenses
Public Affairs - Townsend Utilities - telephone
• Coordination with MET, other regional and local • Any project or program Miscellaneous expenses
retailers legislative or grant support on Professional fees for
• Basic communications functions-media outreach and choice activities - Townsend overhead activities
inquiries, water information and messaging, MWDOC Public Affairs Software support
website Specific Programs Computers/software
• MWDOC newsletter (e-currents) • School program 1
• Estimate overhead to vary
Countywide surveys as appropriate . South Orange Coastal Ocean from 65-75% of salaries
• Countywide water awareness in coordination with Desal Project
based upon variable
retail agencies • Support for Poseidon Desal activities.
Research - support for Center for Demographic Research Project
Water Supply Planning • Other Project specific studies
• Coordination among agencies • Non-countywide issue studies
• Water use tracking and projections
• Water supply analysis
• Regulatory compliance issues
• Water trends analysis
• Countywide studies
Water Emergency Response Organization of Orange
County (WEROC) - MWDOC contribution
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AGREEMENT BETWEEN MWDOC AND ITS MEMBER AGENCIES ON
BUDGET, ACTIVITIES, CHARGES, AND OTHER ISSUES
This Agreement is made by and between the Municipal Water District of
Orange County ("MWDOC") and those of its 28 Member Agencies ("Member
Agencies") that have signed below. Signatories to this Agreement are also
referred to herein collectively as "Parties" and individually as "Party." This
Agreement is effective as of the Effective Date established pursuant to Section
12.1 below.
RECITALS
WHEREAS, MWDOC is a wholesale water provider to 28 Member Agencies in
Orange County, California; and
WHEREAS, MWDOC is a member agency of the Metropolitan Water District of
Southern California ("MET") and appoints four (4) directors to MET's Board of
Directors, and
Whereas, MWDOC was formed in 1951 by Orange County voters to provide
imported water from MET into Orange County; and
Whereas, MWDOC has been performing this function and many other functions
since its formation in support of Member Agencies within its service area; and
Whereas, MWDOC was formed and operates pursuant to the Municipal Water
District Law of 1911 (Water Code Section 71000 et seq.) and is governed by a
seven-member publicly elected Board of Directors; and,
Whereas, an essential area of MWDOC's authority includes the setting of rates
for water commodities and services, and while rates may be different for different
classes or conditions of service, they shall be uniform for like classes and
conditions of service (Water Code § 71614); and,
Whereas, an essential area of MWDOC's authority includes representing the
Member Agencies at MET to ensure that the approximately $140 million paid to
MET each year by MWDOC is used effectively and efficiently; and,
Whereas, in addition to its role at MET, MWDOC's regional services to its
Member Agencies currently include water use efficiency programs, water supply
planning activities to improve reliability and emergency preparedness, the Water
Emergency Response Organization of Orange County ("WEROC"), the school
education program, and numerous other programs; and
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Whereas, in support of these services to its Member Agencies, MWDOC seeks
grant funding for its programs, engages lobbyists on the Federal, State and local
levels, and operates a public affairs department that serves its Member Agencies
and their customers; and
Whereas, MWDOC's budget and rates have been the subject of discussion
between MWDOC and some of its Member Agencies over the past several
years, and these Member Agencies have raised concerns over whether the rate
structure is equitable and whether a Member Agency should be able to opt out of
certain services if it provides those services; and
Whereas, in conjunction with the preparation by the Orange County Local
Agency Formation Commission ("OCLAFCO") of its 2007 Municipal Services
Review and Sphere of Influence for MWDOC, MWDOC and several of its
Member Agencies from southern Orange County participated in a series of
"stakeholder" discussions facilitated by OCLAFCO in an attempt to resolve these
and other concerns; and
Whereas, following approval by Orange County LAFCO of the 2007 Municipal
Services Review and Sphere of Influence for MWDOC, OCLAFCO retained a
consultant to conduct a study of "governance options" for MWDOC ("Governance
Study"), which Study was funded 50% by MWDOC and 50% by six of its Member
Agencies from southern Orange County; and
Whereas, the same six Member Agencies, namely El Toro Water District,
Trabuco Canyon Water District, Santa Margarita Water District, Irvine Ranch
Water District, Moulton Niguel Water District and South Coast Water District,
have issued a "White Paper" regarding the formation of a "South Orange County
Water Authority" that discusses issues associated with formation of such an
agency if certain changes in MWDOC's operations are not made; and
Whereas, the Governance Study recommended the addition of three Member
Agencies into the Study effort the City of San Clemente, the City of San Juan
Capistrano and Laguna Beach County Water District, thereby bringing the total
number of "South County Agencies" to nine; and
Whereas, the other Member Agencies of MWDOC are the City of Brea, City of
Buena Park, City of Fountain Valley, City of Garden Grove, City of Huntington
Beach, City of La Habra, City of La Palma, City of Newport Beach, City of
Orange, City of Seal Beach, City of Tustin, City of Westminster, East Orange
County Water District, Emerald Bay Services District, Golden State Water
Company ("GSWC"), Mesa Consolidated Water District, Orange County Water
District, Serrano Water District, and Yorba Linda Water District.
Whereas, the Parties signing below have reached a comprehensive agreement,
memorialized herein ("Agreement"), that accommodates the interests of all
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Parties, maintains MWDOC as the wholesale regional planning agency and
promotes a cooperative and collaborative partnership between MWDOC and its
Member Agencies;
NOW, THEREFORE, THE PARTIES ACKNOWLEDGE AND AGREE AS
FOLLOWS:
1. DEFINITIONS
1.1 "South County Agencies," as referenced in the recitals above,
refers collectively to City of San Clemente, City of San Juan
Capistrano, El Toro Water District, Irvine Ranch Water District,
Laguna Beach County Water District, Moulton Niguel Water District,
Santa Margarita Water District, South Coast Water District, and
Trabuco Canyon Water District.
1.2 "Member Agencies" refers to any and all entities, public or private,
that purchase water from MWDOC.
1.3 "North County Agencies" as referenced in the Recitals above refer
collectively to Member Agencies (other than the South County
Agencies), including the City of Brea, City of Buena Park, City of
Fountain Valley, City of Garden Grove, City of Huntington Beach,
City of La Habra, City of La Palma, City of Newport Beach, City of
Orange, City of Seal Beach, City of Tustin, City of Westminster,
East Orange County Water District, Emerald Bay Services District,
Golden State Water Company, Mesa Consolidated Water District,
Orange County Water District, Serrano Water District, and Yorba
Linda Water District.
2. MWDOC BUDGET
2.1 Core and Choice Services. Commencing in Fiscal Year 2011-
2012, MWDOC will organize its budget according to "Core" services
and "Choice" services. (See Section 4 below regarding designation
of specific services as Core and Choice.)
2.1.1 The Core services budget shall include services identified by
MWDOC as services that are both essential to its mission
and carried out on behalf of the entire MWDOC service area
for all 28 Member Agencies. The Core services also include
services that MWDOC determines cannot practicably or
efficiently be budgeted and charged to individual Member
Agencies on an agency-by-agency basis.
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2.1.2 Choice services shall be budgeted, described, and priced in
a manner that is intended to allow individual Member
Agencies to decide whether to receive such services from
MWDOC. MWDOC's costs for Choice services provided,
including related Overhead costs, will be recovered only
from the MWDOC Member Agencies electing to receive the
service.
2.1.3 Once Core and Choice services are established for the
purpose of the Fiscal Year 2011-2012 budget, those
designations and their associated cost allocations shall
thereinafter be presumed reasonable and appropriate; and
such designations and cost allocations will be used by
MWDOC in its budgeting in subsequent years, subject to
Paragraph 5.3 below. The designation of any new or
different services to be offered by MWDOC as Core or
Choice will be made at the time the services are considered
for approval by the MWDOC Board and will be subject to
input from the Member Agencies during the review process
described below.
2.2 Review of Budget. MWDOC will continue its practice of soliciting
and considering review and input on its budget from all MWDOC
Member Agencies commencing in December and developing a
conceptual draft budget for Member Agency review the following
January. On or before March 1St of each calendar year, MWDOC
shall publish its draft budget and shall solicit comments from
Member Agencies. Each Member Agency shall indicate to
MWDOC in writing by March 15th of each year if any changes in
the Choice Services they will be participating in are being
considered or are to be deleted as a Choice Service (some
services, such as the South Orange Coastal Ocean Desalination
Project, have existing contractual commitments that differ from
fiscal year commitments). In the absence of such timely notification
of changes by the Member Agencies, the Member Agencies will be
deemed to be participating without change in those Choice services
in the following budget year to the same extent that the Member
Agencies are participating in such Choice Services as of March 15.
Member Agencies desiring to submit formal comments on the
budget shall deliver such formal comments to MWDOC before April
15th. (See Section 6.1 below, "Elected Officials' Meeting.") These
comments will be considered in preparation of the final Budget and
will be presented to the MWDOC Board in May. The Parties
acknowledge that the MWDOC Board is solely responsible for final
approval and establishment of the MWDOC Budget and all rates
and charges.
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3. MWDOC'S RESERVES
3.1 Purpose. MWDOC's Reserves allow it to meet operating and
emergency financial requirements for operation of the District,
including cash flow for managing grants and such expenses as
future building improvements, Other Post Employment Benefits
(OPEB), unforeseen emergencies, potential litigation, and MWDOC
elections.
3.2 Reserve Line Items. MWDOC adopted a Reserve Policy on June
16, 2010, as outlined in the chart below. MWDOC will segregate its
reserves into these categories and will report on the levels each
year during the budget preparation process:
MWDOC Proposed Reserves as of June 30, 2010
Reserve Category Proposed Amount
General Reserves $1,850,000
(Unrestricted Reserve)
Grant/WUE Cash flow $1,000,000
(Designated Reserve)
Election Expense $ 500,000
(Designated Reserve)
Building Repair/Replacement $350,000
(Designated Reserve)
Total Designated or $3,700,000
Unrestricted
OPEB Reserve $500,000
(Irrevocable Trust -
Restricted)
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4. MWDOC CHOICE SERVICES
MWDOC shall institute a budgeting process in accordance with Section 2 above
based on a designation of certain MWDOC services as Core services and other
MWDOC services as Choice services. For the purposes of this Agreement and
the MWDOC 2011-2012 Budget, the designation of Core and Choice services
and Overhead costs are identified in Table A, attached. (See 5.3 below.) Input
to any proposed changes in the designations shall be solicited from the Member
Agencies in the annual budget preparation process in accordance with Section
2.2 above.
4.1 Designation of Choice Services.
The Choice categories identified at this time are described below.
During the first half of fiscal year 2010-11, MWDOC Staff and the
Member Agencies will work together to develop the concept,
structure, budget and participation terms for the following services
and any others identified for implementation beginning July 1, 2011.
These will be developed in such a way as to be offered to the
Member Agencies for participation and will be incorporated into the
proposed budget for 2011-12.
4. 1.1 Project Participation Committees
4.1.1.1 South Orange Coastal Ocean Desalination Project
will continue to be organized in a Project
Participation format with five agencies participating
on an equal cost-sharing basis. The participating
agencies will ultimately determine all institutional,
financing and delivery issues for the project.
4.1.1.2 Poseidon Huntington Beach Ocean Desalination
Project is currently organized in a Project
Participation format with 23 agencies participating
on an equal cost-sharing basis. The costs to date
for outside consulting have been paid for by
Poseidon, so no local costs have been paid by the
agencies.
4.1.2 MWDOC - Member Agency Agreements
4.1.201 School Program will be organized with each
Member Agency participating and paying its share
of costs on a per student basis, and this Program
also includes as participants the non-Member
Agency cities of Anaheim, Fullerton, and Santa
Ana.
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4.1.2.2 Water Use Efficiency Program will be developed as
a pay-as-you-go or a pay-for-participation basis
instead of a "choice" basis. Functionally, however,
there will be "choice" programs offered to all
Member Agencies by agreement or through direct
participation by retail consumers or others in the
water service area. The Parties anticipate that the
terms for the agreements between MWDOC and
the Member Agencies will range between 3 and 5
years. The eight programs currently in operation
include:
• Residential clothes washers
• Sprinkler nozzles
• SmarTimers
• CII Plumbing Fixtures
• Synthetic Turf
• Hotel Program
• Industrial Program
• Landscape Certification Program
4.2 Right of First Refusal. If a Member Agency does not participate in
a MWDOC Choice Service pursuant to the provisions of this
Agreement, including Section 2 above, and desires to participate in
a substantially similar Service from another Member Agency, as set
forth in a written proposal, such Member Agency shall deliver to
MWDOC, no later than March 15th of each year, a copy of the
written proposal to receive such Service. MWDOC shall have thirty
(30) days from receipt of such proposal to accept or reject such
offer to provide the Service at the same cost as the proposal.
4.3 Core Programs shall be those listed in Table A. Any funding
brought in via MWDOC efforts from its State or Federal advocacy
efforts, except for those specifically being funded through a Project
Participation Agreement, shall be available to all MWDOC Member
Agencies via Core or Choice Programs, e.g., such as the Water
Use Efficiency Program.
4.4 Overhead Costs shall be those listed in Table A. The Overhead
costs are allocated over all Core and Choice services. Subject to
Paragraph 5.3, if activities are ever added to or removed from the
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list of Core or Choice services, the commensurate proportion of
Overhead costs will also be allocated accordingly. The
determination of the Overhead cost percentage applicable to each
Core and Choice service for any particular year shall be made
during the budget preparation process and fixed for the entire
budget year.
5. REVENUE COLLECTION
The Parties agree that MWDOC should transition its current rate structure, which
includes both a per retail connection charge and a per acre-foot charge, to a
structure that includes only a per retail connection charge. Currently, MWDOC's
revenue from water rate charges is approximately 65% on the per retail
connection charge and 35% on the per acre-foot charge. As described below,
MWDOC shall increase the percentage on the per retail connection charge
gradually, reaching 100% in fiscal year 2015-16.
5.1 Fixed Charges. Commencing in fiscal year 2011-2012,
MWDOC will begin transitioning to a 100% fixed charge. In the first
year of this process, 80% of MWDOC's water rate charges for its
operating budget will be fixed, and 20% will be water charges.
Each year for the next four years, MWDOC will increase the
amount on fixed charges by 5%.
5.2 Method of Fixed Charges. MWDOC will continue to use the
methodology in effect as of the Effective Date to define retail
service connections independent of size as the method of passing
charges to the Member Agencies on a fixed charge basis.
5.3 Designation of Core, Choice, and Overhead Services. The
designations of services and activities set forth in (i) Section 2.1
and Table A for Core and Choice Service, in (ii) Paragraph 4.4 and
Table A for Overhead Costs, and in (iii) Paragraph 5.2 for Method
of Fixed Charges, shall carry a presumption of reasonableness
and, therefore, shall remain unchanged for the term of this
Agreement, unless changed by amendment in accordance with the
provisions of Section 15.
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6. INTERACTION OF ELECTED OFFICIALS
6.1 Elected Officials' Meeting. MWDOC will hold a semi-annual
meeting for elected representatives of the Member Agencies and a
GSWC officer or the officer's designee in October and April
("Elected Officials' Meeting") in addition to any other meetings,
workshops, or assemblies open to those officials. The meetings
shall be chaired by the President of the MWDOC Board and it is the
intent of the Parties that the primary attendees shall be members of
their respective governing bodies. The forum will be used to
discuss:
• MWDOC activities, policies, and budget (including reserves)
• MET activities and policies
• Statewide water resource issues
• Strategies to increase Orange County's water supply
reliability and to minimize Orange County water costs
• Other topics of significant interest to the Orange County
water community
Beginning in March 2011 and each year thereafter, upon
completion of the first DRAFT of the MWDOC Budget for the
upcoming year, MWDOC will formally request comments on the
budget from all 28 Member Agencies, as described in Section 2.2
above. MWDOC will report on the budget comments received from
the Member Agencies at the Elected Officials' Meeting described
herein.
6.2 Public Meetings. The Elected Officials' Meetings shall be noticed
public meetings of MWDOC's Board. Each Member Agency
participating in these meetings shall be responsible for compliance
with the Brown Act by its own legislative body. (Government Code
§ 54950 et seq.)
7. SELECTION OF MET DIRECTORS
7.1 Recommended Appointments by MWDOC Member Agencies.
Commencing with the first vacant MWDOC MET Director position
following the Effective Date, the MWDOC Board will institute and
follow the procedure set forth in this Section 7 for appointing MET
Directors.
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7.1.1 The MWDOC Administrative Code provides that the Board
President shall nominate and the Board shall approve MET
Directors.
7.1.2 Under the conditions and procedures established in this
Agreement, the MWDOC Board will delegate limited
nominating power to the MWDOC Member Agencies for two
of MWDOC's MET Director positions.
7.1.3 When the first MET Director vacancy occurs following the
Effective Date, the South County Agencies that are signatory
to this Agreement may nominate a candidate of their
choosing ("MET Candidate") through a process to which they
all agree, directly to the MWDOC President and Board. In
the absence of agreement among the South County
signatory agencies, the nomination(s) shall be determined by
a "one agency, one vote" process among the signatory
agencies. Nominations shall be stated in a letter to the
MWDOC Board President signed by authorized elected
representatives of the South County Agencies signing this
Agreement. Once filled, that seat will be designated,
pursuant to this Agreement, as the "South County Seat".
7.1.4 When the second MET Director vacancy occurs following the
Effective Date, the North County Agencies that are signatory
to this Agreement may nominate a MET Candidate of their
choosing, through a process to which they all agree, directly
to the MWDOC President and Board. In the absence of
agreement among the North County signatory agencies, the
nomination(s) shall be determined by a "one agency, one
vote" process among the signatory agencies. Nominations
shall be stated in a letter to the MWDOC Board President
signed by authorized elected representatives of the North
County Agencies signing this Agreement. Once filled, that
seat will be designated, pursuant to this Agreement, as the
"North County Seat".
7.2 The MWDOC Board shall consider each nominated MET Candidate
seriously, in good faith and in the spirit of this Agreement and can
only reject said MET Candidate for cause. The remaining MET
Director seats shall continue to be filled pursuant to MWDOC's
Administrative Code. MWDOC shall continue its practice of
advising the Member Agencies when a vacancy occurs and
soliciting potential candidates and input from all Member Agencies
for filling these seats.
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7.3 All MWDOC MET Directors shall serve at the pleasure of the
MWDOC Board for an indefinite term pursuant to the MWDOC
Administrative Code and may be removed without cause. If a
vacancy occurs in the North County Seat or the South County Seat,
the appropriate Member Agencies, as established herein, may
make subsequent nominations to fill the vacancy in accordance
with Sections 7.1.3 and 7.1.4, as applicable. The MWDOC Board
President shall consider appointment of an ad hoc committee to
review the performance of MWDOC's MET Directors upon request
of any MWDOC Board Member or Member Agency, or upon the
MWDOC President's own determination. Such review, if any, may
be conducted no more than once annually. If appointed, the ad hoc
committee shall solicit input from the respective nominating areas
on the performance of the North County and South County
nominated MET Directors. Should the North County Agencies or
South County Agencies deem it appropriate to remove their
selected MET Director, they can make their request for removal to
the MWDOC Board. The MWDOC Board will not unreasonably
withhold action on such request(s).
8. COMPLIANCE WITH MWDOC ADMINISTRATIVE CODE
Any MET Candidate nominated and appointed as provided herein must be
familiar with MWDOC's Administrative Code and express a willingness to comply
with it. This includes, without limitation, meeting the criteria for a MWDOC MET
Director established in Section 1500 of the MWDOC Administrative Code.
9. COMPLIANCE WITH LAW
The nomination and appointment of any MET Candidate, as provided herein,
must comply with applicable statutory and case law.
10. MET DIRECTOR ORANGE COUNTY CAUCUS
MWDOC will schedule and conduct at its offices regular meetings of the MET
Directors representing MET Member Agencies in Orange County. Meetings will
be scheduled at least three (3) times per year to be determined by the Orange
County MET Directors at the first meeting each year. The purpose of the
meetings is to provide special access by all Member Agencies to the MET
Directors representing Orange County.
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11. REMEDIES AND ENFORCEMENT
11.1 Remedies in General. Except as set forth below, each Party shall
have all remedies otherwise available to enforce the terms of the
Agreement and to seek remedies for any breach hereof, including
but not limited to the remedies set forth in Sections 11.2.3, 11.5 and
11.6 of this Agreement.
11.2 Breach of the Agreement.
11.2.1 Any material breach or material violation of the Agreement
shall be deemed a default under this Agreement.
11.2.2 In the event of an alleged material breach or material
violation of the Agreement, the Parties agree to work
together in good faith to resolve any disagreement using the
following dispute resolution process:
11.2.2.1 The Party alleging a breach shall notify the
other Parties of the basis for the allegation and
the requested cure for the breach.
11.2.2.2 The alleged breaching Party receiving notice of
breach shall have 15 calendar days to
respond. If the response acknowledges that a
breach has occurred, the breaching Party shall
have 30 days to cure such breach, provided
that if such breach cannot be reasonably
capable of being cured within said 30-day
period, then the breaching Party shall not be in
default of this Agreement provided that the
breaching Party is diligently continuing to cure
such default.
11.2.2.3 If the Party alleging a breach and the alleged
breaching Party disagree with respect to
whether a breach has occurred, they shall
meet and confer in good faith toward a
mutually satisfactory solution. The meet and
confer shall be open to all Parties.
11.2.2.4 If the dispute cannot be resolved through the
meet and confer process within 60 calendar
days after the first meeting, the Party alleging a
breach and the alleged breaching Party, along
with any other Party that wishes to participate,
shall engage in third party mediation, with the
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participating Parties to equally share mediation
costs. Said mediation shall end no later than
90 calendar days after the completion of the
original meet and confer process. No Party
may file a lawsuit concerning the alleged
breach until the mediation has ended.
11.2.2.5 In the event a lawsuit is filed after completion
of the mediation concerning the alleged
breach, the Parties' rights and obligations
under this Agreement shall continue until one
of three actions occurs: (1) the agreement
continues as drafted; (2) the agreement is
terminated; or (3) an amendment to the
agreement is entered into pursuant to Section
15.
11.2.3 Any Party to this Agreement may, in addition to any other
remedy, seek an order from a court specifically enforcing the
obligations of the Parties to the Agreement to comply with
this Section 11.2.
11.3 Material Breach in the Event of Certain Activities. The Parties
to this Agreement have mutual interests in avoiding the time,
expense, and uncertainty of either (a) legislative measures that
would affect MWDOC's organizational form or (b) filing an
application with the OCLAFCO for secession of a Party or
detachment of a Party's territory from MWDOC. Consequently, the
Parties to this Agreement agree that "material breach," within the
meaning of Section II.(a) shall include (but not be limited to) the
following activities that any Party hereto may undertake during the
term of this Agreement:
11.3.1 The submission of an application with OCLAFCO to
reorganize or undertake an action that would result in a
Party's secession or the detachment of all or a portion of a
Party's territory, from MWDOC, or would result in any other
material change in governance or structure affecting
MWDOC.
11.3.2 The filing of any written letters or testimony with, or providing
verbal testimony to, any committee or other body of the
State Legislature in support of legislative measures that
would (A) materially affect MWDOC's organizational form or
change the governance of MWDOC, and (B) would result in
secession or detachment of territory from MWDOC by any
Member Agency.
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11.4 An action constituting a material breach under Sections 2.2, 4, 5, 6,
7, 10, or 11.3 shall be subject to the dispute resolution provisions of
Section 11.2.2.
11.5 Enforcement. Any Party may enforce compliance by a defaulting
Party with the terms of this Agreement by, among other available
remedies:
11.5.1 Filing a complaint for specific performance;
11.5.2 Filing an action to recover actual damages to which the
notifying Party may be entitled for violation by the defaulting
Party of the terms of this Agreement;
11.5.3 Filing an action to enjoin the violation, on an ex parte basis if
necessary, by temporary or permanent injunction, without
the necessity of proving either actual damages or the
inadequacy of otherwise available legal remedies, or for
other equitable relief;
11.5.4 Petitioning for a writ of ordinary or administrative mandate
ordering the defaulting Party to cure; and/or
11.5.5 Petitioning for a writ of ordinary or administrative mandate
ordering OCLAFCO not to process an application filed in
contravention of this Agreement.
11.6 Injunctive and Temporary Relief Appropriate. The Parties
acknowledge that breach of this Agreement may not be adequately
remedied by monetary damages and could result in irreparable
harm to the aggrieved Parties. Therefore, injunctive and temporary
relief may be appropriate to ensure compliance with the terms of
this Agreement.
12. TERM OF AGREEMENT
12.1 Effective Date. This Agreement shall be effective upon the date of
execution by MWDOC, which shall execute the Agreement upon
express approval of its Board ("Effective Date"). MWDOC shall
inform all Parties by e-mail when that event occurs.
12.2 Subsequent Execution. Any Member Agency that executes this
Agreement after the Effective Date shall, upon execution, become a
full Party to the Agreement, with all the rights and obligations set
forth herein.
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12.3 Termination Date. This Agreement shall run for a term of ten (10)
years from the Effective Date, unless terminated as provided herein
or extended by agreement of all of the Parties hereto.
13. OBLIGATIONS OF MEMBER AGENCIES
13.1 No OCLAFCO Activities. During the term of this Agreement, none
of the Member Agencies shall prepare, hire a consultant to prepare,
or submit an application to OCLAFCO requesting reorganization or
any action that would result in detachment of any territory from
MWDOC or any other change affecting the governance, structure,
or finances of MWDOC. In the event that the OCLAFCO
undertakes proceedings, whether in response to an application or
pursuant to its own discretionary powers, that reduces the territory
within the boundaries or affects or changes the governance,
structure or finances of MWDOC, these proceedings shall be
considered a material breach of this Agreement by the Party or
Parties filing, supporting or in any way furthering the application
except to the extent their actions are required by law.
13.2 No Legislative Activities. During the term of this Agreement,
none of the Member Agencies shall pursue, support, or further any
legislative measures that would affect MWDOC's organizational
form, finances, exercise of powers, or governance or result in
detachment of any territory from MWDOC, unless agreed to in
writing by MWDOC.
13.3 Participation in Agreement. During the term of this Agreement,
the Member Agencies, and each of them, shall contribute staff time
and resources as required to participate and contribute in good faith
to the activities and changes discussed in this Agreement.
14. OBLIGATIONS OF MWDOC
14.1 No Legislative Activities. During the term of this Agreement,
MWDOC shall not pursue, support or further any legislative
measures that would affect the organizational form or governance
of MWDOC, or its Member Agencies, unless agreed to in writing by
the affected Member Agency.
14.2 Participation in Agreement. During the term of this Agreement,
MWDOC shall contribute staff time and resources as required to
participate and contribute in good faith to the activities and changes
discussed in this Agreement.
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15. AMENDMENT OF AGREEMENT
15.1 Any amendment, alteration, or variation of any provision of this
Agreement ("Amendment") will not be valid unless made in writing
and executed by a majority of the Member Agencies of MWDOC
whether or not said Member Agencies are original signatories of
this Agreement.
15.2 The Parties acknowledge that the process of obtaining initial
approvals and execution of this Agreement has required a
substantial investment of public resources and time and that the
same process should not be required for subsequent Amendments
to the Agreement that are proposed without objection. For this
reason, Amendments to the Agreement may be made as provided
in this section.
15.2.1 An Amendment to the Agreement proposed by MWDOC
shall be distributed by MWDOC to all Parties signing this
Agreement for a 30-day review period.
15.2.2 Any and all comments and objections to the Amendment
shall be provided by the Parties to MWDOC before the
conclusion of this 30-day review period.
15.2.3 MWDOC shall consider all comments and objections and
may modify the proposed Amendment accordingly. A
modified Amendment shall be distributed to all Parties
signing this Agreement for an additional 30-day review
period.
15.2.4 If no objections are received by the conclusion of the 30-day
review period, or any subsequent 30-day review period, the
Amendment shall be valid and binding on the Parties. Upon
this occurrence, MWDOC will provide a copy of the
Amendment to all Parties.
15.3 An Amendment to the Agreement proposed by a Party other than
MWDOC shall be submitted in writing to MWDOC. If the
Amendment is acceptable to MWDOC, MWDOC shall then follow
the procedures set forth in section 15.2 above.
16. NO ADMISSION BY ANY PARTY
The Parties acknowledge that statements made by the Parties during negotiation
of this Agreement, statements made in this Agreement, and all rights and
obligations that arise from this Agreement were and are in furtherance of the goal
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of resolving issues between the Parties without the need for administrative or
judicial proceedings, including possible OCLAFCO proceedings and litigation.
Neither any statement made during negotiation of this Agreement nor any
provision of the Agreement itself shall constitute an admission by a Party or be
offered as evidence or included in any record of proceedings in any future
administrative or judicial proceeding.
17. GENERAL PROVISIONS
17.1 All Parties are deemed to have participated in the drafting of this
Agreement, and any rule of law (including, but not limited to, Civil
Code Section 1654) or legal principle that would require
interpretation of this Agreement against the drafter hereto shall not
apply and is waived by the Parties. This Agreement may be signed
in multiple counterparts for convenience of the Parties.
17.2 This Agreement will inure to the benefit of and be binding upon all
Parties and their respective successors and assigns.
17.3 This Agreement will be deemed a contract made under the laws of
the State of California and for all purposes will be interpreted in
accordance with such laws. The Parties hereby agree and consent
to the exclusive jurisdiction of the courts of the State of California.
17.4 This Agreement constitutes the entire agreement among the
Parties. This Agreement supersedes any and all other
understandings or agreements, either oral or in writing, among the
Parties with respect to the subject matter hereof and contains all of
the covenants and agreements among them with respect to said
matters; and each Party acknowledges that no representation,
inducement, promise of agreement, oral or otherwise, has been
made by any other Party or anyone acting on behalf of any other
Party that is not embodied herein.
17.5 If any action at law or equity, including any action for writ of
mandate or injunctive relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing Party(ies) shall be
entitled to its or their reasonable attorney's fees and costs as
against the Party(ies) that did not prevail in that action or
proceeding.
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17.6 All activities undertaken pursuant to this Agreement must be in
compliance with all applicable state and federal laws and
regulations.
17.7 In the event one or more of the provisions contained in this
Agreement is held invalid, illegal or unenforceable by any court of
competent jurisdiction, such portion shall be deemed severed from
this Agreement and the remaining parts of this Agreement shall
remain in full force and effect as though such invalid, illegal, or
unenforceable portion had never been a part of this Agreement.
17.8 All communications set forth in this Agreement shall be in writing
and transmitted to and among the Parties in a manner that is
consistent with the custom and practice of MWDOC and its
Member Agencies then in effect. Any computations of time shall
start from 5:00 PM on the day of receipt.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the respective dates shown below.
Mayor, City of San Clemente Date
Mayor, City of San Juan Capistrano Date
President, El Toro Water District Date
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President, Irvine Ranch Water District Date
President, Laguna Beach County Water District Date
President, Municipal Water District of Date
Orange County
President, Moulton Niguel Water District Date
President, Santa Margarita Water District Date
President, South Coast Water District Date
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President, Trabuco Canyon Water District Date
Mayor, City of Brea Date
Mayor, City of Buena Park Date
Mayor, City of Fountain Valley Date
Mayor, City of Garden Grove Date
Mayor, City of Huntington Beach Date
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Mayor, City of La Habra Date
Mayor, City of La Palma Date
Mayor, City of Newport Beach Date
Mayor, City of Orange Date
Mayor, City of Seal Beach Date
Mayor, City of Tustin Date
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Mayor, City of Westminster Date
President, East Orange County Water District Date
President, Emerald Bay Services District Date
Officer, Golden State Water Company Date
President, Mesa Consolidated Water District Date
President, Orange County Water District Date
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President, Serrano Water District Date
President, Yorba Linda Water District Date
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Table A - MWDOC Breakdown of Services/Activities/Costs
Core Services Choice Services Overhead Costs
Board Compensation & Benefit Water Use Efficiency Salary charged to overhead
Retiree Costs • Residential clothes washers function (vacation, sick leave
Legal Costs • Sprinkler nozzles and holidays)
Board Elections • SmarTimers Personnel development
Legal costs charged to
Accounting and General Admin • CII Plumbing Fixtures overhead function
MET Representation • Synthetic Turf
Employee benefits
• MET Director Support • Hotel Program Personnel/staff development
• MET policy analysis, programs and special • Industrial Program Information technology
projects • Landscape Certification Conference employee
• MET operations, water rates and accounting Program Travel & Accommodations
Staff time for MWDOC's Water Use Efficiency Includes marketing materials for employee
Programs Manager WUE activities, staff time, Automotive/Mileage/Toll
Governmental Affairs overhead and grant funds (MET Office maintenance
• In-house staff for legislative info and other)
Rents & Leases
• WACO, ISDOC and other support Governmental Relations
• Any project or program Office supplies
• Federal lobbyist for countywide funding Insurance • State lobbyist for countywide legislative, grant legislative or grant support expenses
on choice activities - Utilities - telephone
funding and policy access Townsend Public Affairs
Miscellaneous expenses
• Local lobbyist for Board of Supervisors Specific Programs Professional fees for overhead
Public Affairs • School program activities
• Coordination with MET, other regional and local . South Orange Coastal Software support
retailers Ocean Desal Project Computers/software
• Basic communications functions-media outreach o Federal lobbying
and inquiries, water information and messaging, for SOCODP -
MWDOC website Barker
• MWDOC newsletter (e-currents) o Federal lobbying
• Countywide surveys as appropriate for SOCODP -
• Countywide water awareness in coordination with Townsend
retail agencies • Support for Poseidon Desal
Research - support for Center for Demographic Project
Research • Other Project specific
Water Supply Planning studies
• Coordination among agencies • Non-countywide issue
• Water use tracking and projections studies
• Water supply analysis
• Regulatory compliance issues
• Water trends analysis
• Countywide studies
Water Emergency Response Organization of Orange
County (WEROC) - MWDOC contribution
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