Excerpt:

Exhibits:
1. Alameda Point Reuse and Development Areas
2. EBMUD Agreement
3. Contract

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BACKGROUND

On February 4, 2014, upon acquisition of major portions of Alameda Point from the Navy, the City Council approved the necessary planning documents for redevelopment of Alameda Point, including the Master Infrastructure Plan for Alameda Point (MIP). The approved MIP provides the master plan for the phased replacement of all of the Navy’s outdated and substandard utility infrastructure, including water, sewer, storm drain, electrical, gas, telecommunications, and surface street improvements at Alameda Point.

Pursuant to the MIP, new infrastructure will be implemented differently in the Reuse Area than in the Development Areas as depicted in Exhibit 1, to address the specific infrastructure requirements needed to preserve the NAS Alameda Historic District (Historic District) in the Reuse Area. Due to the fact that the Reuse Area is comprised of the Historic District that constrains the new development process, the buildings within the Reuse Area are planned to be sold and reused incrementally to private property owners on a parcel-by-parcel basis. Upon receipt of funds from the sale of the properties within the Reuse Area, the City will oversee the logical implementation of the new infrastructure in the Reuse Area.

Currently, the City owns the water distribution facilities at Alameda Point, which connect to the East Bay Municipal Utility District (EBMUD) system at three master meters on Main Street. The water facilities were installed by the Navy and the majority of the system is over 60 years old. On May 2, 1997, the City first entered into a Joint Exercise of Powers Agreement (JPA) with EBMUD for the operation and maintenance of the water distribution facilities at Alameda Point. This agreement was amended five times, most recently in 2010, and expired March 31, 2017. On April 18, 2017, City Council approved a 6-month Short Term Maintenance Agreement with EBMUD to provide continued services while the City and EBMUD negotiated the terms of a Water Infrastructure Agreement addressing the incremental development and phased infrastructure implementation in the Reuse Area.

On June 6, 2017, the City Council approved, and on June 14, 2017 EBMUD signed, a Water Infrastructure Agreement with EBMUD (Agreement) (Exhibit 2). Per EBMUD Regulations Governing Water Service to Customers (Regulations), private property owners within their potable water service area must be an EBMUD customer with direct access to EBMUD water infrastructure. This Agreement allows the City to sell parcels in the Reuse Area to private property owners inconsistent with the Regulations, assuming the City remains in compliance with the terms of this Agreement. The Agreement requires the City to build out the water system replacements in the Reuse Area in phases, as shown in Exhibit C of the Agreement (Phasing Plan), and in accordance with the conditions and milestones contained in the Agreement. The Agreement also extends the duration of the Short Term Maintenance Agreement for 5 years assuming the first property would sell in the Reuse Area, which occurred July 3, 2017 for Building 91 and resulted in close to $3 million in building sales proceeds to the City.

Exhibit D of the Agreement contains a Feasibility Study, performed by the City, to demonstrate that sufficient proceeds from the sale of parcels within in each phase exist or will exist to construct the water system improvements. As shown in the Feasibility Study, proceeds are projected to be sufficient to implement the phased water system improvements, estimated at a total cost of $14.4 million ($5.5 million for Phase 1, $5.9 million for Phase 2, and $3.0 million for Phase 3).

As the first parcel sold in Phase 1, the City has a 9-month deadline (April 3, 2018), per Agreement, to submit an EBMUD Mainline Extension Application including all fire flow requirements, site improvement plans, tentative parcel map, among other materials and a non-refundable Water Service Estimate per EBMUD Regulations. EBMUD will prepare a Main Extension Agreement for execution by the City, at which time, 10% of the EBMUD design and estimated construction cost will be due to EBMUD. This upfront deposit is estimated at $1 million for all three phases.

In addition to the EBMUD mainline extension, the City must prepare and process Water Service Applications to transfer each domestic and fire service currently on the Navy water main to the new EBMUD water main, making those parcel owners/tenants EBMUD customers in accordance with the EBMUD Regulations prior to release of EBMUD’s final design of the new water main extension. As part of the Water Service Application process, EBMUD System Capacity Charges (SCC) and Wastewater Capacity Fees (WCF) will be due. As part of the Agreement, EBMUD provided the City with credits for SCC and WCF that it has from the future elimination of the three master meters at Alameda Point as specified in Exhibit E and F of the Agreement, respectively. On July 18, 2017, the City Council already authorized the allocation of these credits toward all of the tenants and uses affected by the proposed Phasing Plan contained in the Agreement.