Excerpt:

Exhibits:

1. Map of Reuse and Development Areas

2. Ten-Year Water Infrastructure Agreement Between East Bay Municipal Utility District and City of Alameda Regarding Alameda Point

3. Short Term Agreement for Operations and Maintenance of Existing Water System at Alameda Point

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BACKGROUND

Prior to closure of the former Naval Air Station Alameda (NAS Alameda), commonly referred to as Alameda Point, the United States Navy (Navy) designed, owned and operated the potable water system at Alameda Point (Navy Water System). Water was supplied to the Navy Water System by East Bay Municipal Utility District (EBMUD) through three master meters located on the perimeter of NAS Alameda. The Navy Water System was neither built, nor maintained to the standards of EBMUD.

In anticipation of the base closure, on May 2, 1997, EBMUD and the City entered into a Joint Exercise of Powers Agreement (JPA) under which EBMUD agreed to provide specified services to assist the City in meeting its potable water system related custodial responsibilities at Alameda Point in anticipation of the Navy Water System being upgraded and conveyed to EBMUD. Through a series of modifications and extensions the JPA was continued through March 31, 2017. On April 26, 2017, the City and EBMUD entered into a short-term services and operations agreement for six months until the issues surrounding implementing new infrastructure in the adaptive reuse areas at Alameda Point could be resolved, which is the topic of this evening’s item. Throughout the term of the JPA and short-term agreement, the City remained EBMUD’s customer, receiving water to Alameda Point through the same three master meters as the Navy.

On June 6, 2013, the Navy transferred approximately 509 acres of land and the Navy Water System to the City, subject to the Navy’s creation of a nationally registered historic district on Alameda Point (NAS Alameda Historic District), which limits the City’s ability to completely demolish and redevelop the buildings and streets within the NAS Alameda Historic District. The Navy conveyed subsequent property to the City in 2016 and 2017, resulting in the City’s ownership of a total of 551 acres at Alameda Point, and will transfer approximately 327 acres to the City as part of future conveyances.

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 (New Infrastructure) prepared in concert with all of the outside utility providers, including EBMUD. The New Infrastructure includes construction of new EBMUD owned and operated water mains for potable water and fire protection systems compliant with EBMUD specifications and consistent with the MIP (Water System Replacements).

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 in the Reuse Area. Due to the fact that the Reuse Area is comprised of the NAS Alameda Historic District that constrains the new development process, the buildings within the Reuse Area are planned to be sold and reused incrementally by private property owners on a parcel-by-parcel basis prior to New Infrastructure being constructed. 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. The Development Area, such as areas like Site A, will be sold and developed by master developers that will construct New Infrastructure, including Water System Replacements, similar to other large-scale land development projects outside of Alameda Point and EBMUD’s mainline extension projects.

On July 5, 2014, the City of Alameda adopted the Alameda Point Development Impact Fee Ordinance (DIF) consistent with the MIP, which created a required mechanism for financing the New Infrastructure for Alameda Point based on the costs estimated in the MIP and escalated annually. The total cost of New Infrastructure is approximately $600 million or $1 million per acre. All new development and property transfers to private property owners require the payment of the DIF to fund New Infrastructure. The DIF payments, and any additional proceeds from the sale of land and buildings in the Reuse Area are required by the Navy to be reinvested back into Alameda Point, to implement the New Infrastructure (Reuse Proceeds).

Property owners within EBMUD’s service area must be EBMUD’s customers consistent with EBMUD’s regulations. In order to be a customer of EBMUD, a property owner must have direct access to Water System Replacements. The phased approach to financing and implementing the New Infrastructure contemplates the City selling parcels to private property owners within the Reuse Area (Reuse Parcels) before direct access to the Water System Replacements is constructed, which is inconsistent with EBMUD’s regulations.

Until direct access to Water System Replacements can be provided to the Reuse Parcels, the City will continue to provide water to the new owners through the Navy Water System. Thus, the City would remain the customer of record with EBMUD, would receive water from EBMUD through its master meters, and provide water to the Reuse Parcels within Alameda Point through its own water infrastructure until the Water System Replacements are constructed. At that time, property owners would then become EBMUD’s customers upon satisfaction of all payments and compliance with then existing EBMUD regulations and ordinances. EBMUD recognizes that it is in the City’s and EBMUD’s mutual interest to work together in implementing the MIP and New Infrastructure, including the Water System Replacements, for Alameda Point. The Water Infrastructure Agreement (Exhibit 2) is intended to set forth the process of the City and EBMUD working together and the detailed steps that the City will follow to finance and construct Water System Replacements in the Reuse Area and obtain compliance with EBMUD’s regulations.