HomeMy WebLinkAbout01-28-14 Desal Committee PacketOTAY WATER DISTRICT
DESALINATION PROJECT COMMITTEE MEETING
and
SPECIAL MEETING OF THE BOARD OF DIRECTORS
2554 SWEETWATER SPRINGS BOULEVARD
SPRING VALLEY, CALIFORNIA
Boardroom
TUESDAY
January 28, 2014
11:30 A.M.
This is a District Committee meeting. This meeting is being posted as a special meeting
in order to comply with the Brown Act (Government Code Section §54954.2) in the event that
a quorum of the Board is present. Items will be deliberated, however, no formal board actions
will be taken at this meeting. The committee makes recommendations
to the full board for its consideration and formal action.
AGENDA
1. ROLL CALL
2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO
SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JU-
RISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
DISCUSSION ITEMS
3. UPDATE ON THE ROASARITO DESALINATION PLANT AND CONVEYANCE AND
THE OTAY MESA CONVEYANCE AND DISINFECTION SYSTEM PROJECTS
(WATTON)
4. ADJOURNMENT
BOARD MEMBERS ATTENDING:
Jose Lopez, Chair
Mitch Thompson
2
All items appearing on this agenda, whether or not expressly listed for action, may be delib-
erated and may be subject to action by the Board.
The Agenda, and any attachments containing written information, are available at the Dis-
trict’s website at www.otaywater.gov. Written changes to any items to be considered at the
open meeting, or to any attachments, will be posted on the District’s website. Copies of the
Agenda and all attachments are also available through the District Secretary by contacting
her at (619) 670-2280.
If you have any disability that would require accommodation in order to enable you to partici-
pate in this meeting, please call the District Secretary at 670-2280 at least 24 hours prior to
the meeting.
Certification of Posting
I certify that on January 24, 2014 I posted a copy of the foregoing agenda near the
regular meeting place of the Board of Directors of Otay Water District, said time being at least
24 hours in advance of the meeting of the Board of Directors (Government Code Section
§54954.2).
Executed at Spring Valley, California on January 24, 2014.
______/s/_ Susan Cruz, District Secretary _____
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: February 5, 2014
SUBMITTED BY: Bob Kennedy
Engineering Manager
CIP./G.F. NO: P2451-
001101
DIV. NO. ALL
APPROVED BY:
Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Informational Update for the Rosarito Desalination Plant and
Conveyance and the Otay Mesa Conveyance and Disinfection
System Projects
GENERAL MANAGER’S RECOMMENDATION:
No recommendation. This is an informational item only.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To update the Otay Water District (District) Board of Directors
(Board) on the progress of the Rosarito Desalination Plant and
Conveyance and the Otay Mesa Conveyance and Disinfection System
Projects (Project)(see Exhibit A for Project location).
ANALYSIS:
BACKGROUND
The Project has two different components - the Rosarito
desalination plant and conveyance in the Mexican side and the
conveyance and disinfection system in the United States’ (U.S.)
side.
The desalination plant and the conveyance system south of the
border are being developed by NSC Agua S.A. de C.V. (NSC Agua),
a Mexican corporation majority owned by Consolidated Water Co.
2
Ltd. (Consolidated Water), a publicly-traded company.
Consolidated Water is headquartered in George Town, Grand
Cayman. The Company's ordinary (common) stock is traded on the
NASDAQ Global Select Market under the symbol "CWCO". The
Company designs, builds, and operates seawater reverse osmosis
(RO) desalination plants and/or water distribution systems in
the Cayman Islands, Belize, the British Virgin Islands, the
Commonwealth of the Bahamas, and Bali, Indonesia, and is
expanding operations into Mexico.
PILOT PLANT
The Rosarito Desalination Plant and Conveyance Pipeline
(Project) is comprised of a 100 million gallon per day seawater
reverse osmosis desalination plant, together with a pump station
and pipeline to convey the water to Tijuana and excess
production water to the United States border with Mexico. The
primary purpose of the Project is to provide potable water
service to customers in Mexico and to provide a reliable supply
of excess production water to Otay in the U.S. To that effect,
the first step before the design and construction of the
desalination plant is to install and operate a pilot plant to
determine the type of pre-treatment and plant design to be used.
NSC Agua is considering Doosan Heavy Industries and Construction
(Doosan) to build and operate the pilot plant after securing
permission from the Comisión Federal de Electricidad (Federal
Electricity Commission). NSC Agua and Doosan recently completed
testing of the pre-treatment phase and are evaluating how to do
the piloting of the RO units.
PLANT SITE AND EASEMENT ACQUISITION
Negotiations with the Federal Electricity Commission are
progressing on the agreements to secure permanent easements and
rights to connect pipelines to and from the desalination plant
to the seawater intake and outlet structures of the Presidente
Juarez power plant.
NSC Agua has secured the right to purchase two parcels of land
in Rosarito for the desalination plant (about 50 acres in total
area), adjacent to the power plant.
OTAY’S CONVEYANCE SYSTEM/ACTIVITIES
The Project will provide a potable water transmission pipeline
and pump station to convey the desalinated water from the border
between the U.S. and Mexico on Otay Mesa to Roll Reservoir on
Otay Mesa.
3
Given the many challenges in advancing this Project, the
District has retained specialty consultants to provide
technical, regulatory, bi-national, and policy assistance.
In December 2012, the Board Desal Committee discussed with the
General Manager the signing of a non-binding Letter of Intent
(LOI) with NSC Agua to negotiate a Water Purchase Agreement for
the purchase of desalinated water produced from the Rosarito
Desalination facility and delivered to the U.S.-Mexico border at
a point near the proposed Third Border Crossing on Otay Mesa.
This is the second LOI signed by the District and NSC Agua. The
previous LOI was signed on February 5, 2009.
Concerning the facilities north of the border, the District
awarded a contract to AECOM Technical Services for the design of
a large diameter pipeline 3.5 miles long, a pump station, and a
disinfection facility on October 21, 2010. Part of the contract
also includes CEQA/NEPA compliance and other services to get
California Department of Public Health permitting. AECOM has
now completed most of the preliminary environmental studies.
AECOM’s current authorization is for $1,496,021. As of
December 31, 2013, AECOM has invoiced the District for $593,010.
The total expenditures to date on the Project are $2,622,562
(see Attachment B).
AECOM has also started work on the preliminary design reports
for the pipeline. Staff and the consultant are working with NSC
Agua to determine pressure, size, and point of location at the
border.
The District started to have interest in this Project since 2005
with the release of the South County/Tijuana Region Seawater
Desalination Feasibility Study that was funded by the State of
California, State Water Resources Control Board. The San Diego
County Water Authority managed the study with oversight and
direction for the study provided by the Binational Technical
Committee comprised of CONAGUA (Comisión Nacional del Agua),
Comisión Estatal de Servicios Publicos de Tijuana (CESPT),
Comisión Estatal del Agua (CEA), CILA (Comisión Internacional de
Límites y Aguas), and IBWC (International Boundaries and Water
Commission). California American Water Company, City of Chula
Vista, City of San Diego Water Department, Otay Water District,
Port of San Diego, and Sweetwater Authority also provided
oversight and direction for the study.
PUBLIC OUTREACH EFFORTS
Outreach efforts have been taking place to apprise stakeholders,
elected officials, and the public about the progress of the
Rosarito Beach Desalination Project. These efforts included
4
one-on-one briefings with elected officials, presentations to
local chambers of commerce and community groups, updates to
regulatory agencies and officials, development of informational
materials, and information shared with the media about the
Project. To date, the response to community outreach has been
positive. As the Project moves forward these outreach efforts
will continue.
If successful, this Project will start delivering water to Otay
customers by late 2017 or early 2018. This will be the first
cross-border water supply project of its kind and requires
public messaging to inform key stakeholders and the public of
the significance of the Project. The District recently retained
Rea and Parker Research to study customers’ opinion on the
safety, quality, reliability, and affordability of the new water
supply. A number of concerns were raised including water
quality, crime, terrorism, environmental impacts, and potential
nationalization of the assets. There were some concerns about
the location of the facility being in Rosarito, Mexico. There
is good support for desalinated water as a diversified water
supply, a supply that is close to users, and it has been
suggested that the desalinated water be 40% of the District’s
supply.
The District has established very important contacts and
discussions with various Mexican officials. This has resulted
in a better understanding of the various projects and
initiatives by local, state, and federal agencies in Mexico.
The Ad-Hoc Desal Commission and staff gave a presentation on the
Project to Mexico Congress’ Northern Border Affairs Commission
chaired by Diputado Jaime Bonilla on May 26, 2013 in Tijuana,
B.C. Mexico. On November 6, 2013, the District and NSC Agua
presented the Rosarito Project to IBWC and CILA in Mexico. The
presentation was attended by the IBWC and CILA representatives,
as well as representatives of water-related governmental
agencies from both countries. Staff believe that the Project
was well-received and are optimistic that this meeting will lead
to the establishment of collaboration protocols between NSC Agua
and these governmental agencies on both sides of the border.
PRESIDENTIAL PERMIT/ENVIRONMENTAL PROGRAM
The District has begun the permitting process and has submitted
a request to the United States Department of State (State
Department) requesting the State Department to act as the NEPA
lead agency on the Project and process a Presidential Permit to
authorize the construction, operation, and maintenance of a new
border crossing pipeline to import desalinated seawater from the
U.S./Mexico International Border subject to State Department
jurisdiction. The Presidential Permit application referenced
5
the International Boundary and Water Commission issued Minute
No. 319, "Interim International Cooperative Measures in the
Colorado River Basin through 2017 and Extension of Minute 318
Cooperative Measures to Address the Continued Effects of the
April 2010 Earthquake in the Mexicali Valley, Baja California."
This Minute includes opportunities for International Projects,
specifically, "New Water Sources Projects" that identified a
Binational Desalination Plant project in Rosarito Beach, Baja
California, Mexico. The District is also working on its
environmental compliance documents for both Federal (NEPA) and
State (CEQA).
Since the end of October, the District, AECOM, and NSC Agua have
been meeting regularly to finish the draft California Department
of Public Health (CDPH) Permit Approval Road Map which will be
forwarded to CDPH in January 2014 for review and comment.
Following the submittal to CDPH, the District and NSC Agua will
be scheduling a meeting to receive guidance on how the Project
will be planned, designed, and operated to safeguard public
health and to achieve regulatory approval by CDPH. Meetings
have also been held with the EPA (Environmental Protection
Agency) and staff with the San Diego Regional Water Quality
Control Board to discuss the Project.
On the environmental aspect of the Project, wet season field
surveys are being planned for fairy shrimp for the Otay Mesa
Conveyance pipeline Project. The dry weather is prolonging this
effort which could not be concluded last year due to the late
start of the environmental work and the dry weather for the last
12 months.
CONAGUA’S NEW STANDARDS FOR DESAL PROJECTS
Mexico is currently working on updating federal standards for
desalination facilities including brine discharge requirements.
District staff has been engaged in this process by attending
meetings in Mexico City and have submitted comments to CONAGUA
on these new Standards.
LEGAL AND TECHNICAL SERVICES
NSC Agua is working on an outline of the Terms and Conditions
(Term Sheet) of the proposed Water Purchase Contract for the
District to review and comment. Because of the complex and
technical nature of this project and the transaction,
specialized legal, financial, and engineering expertise is
required to conduct project due diligence and to assist staff in
the preparation and negotiation of this Term Sheet and a future
Water Purchase Agreement. Staff is working on developing a
6
short list of these potential key consultants and will bring
each to the Board for consideration at the appropriate time.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
No budget impacts. (See Attachment B - Budget Detail).
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To
provide high value water and wastewater services to the
customers of the Otay Water District in a professional,
effective, and efficient manner” and the General Manager’s
Vision, “A District that is at the forefront in innovations to
provide water services at affordable rates, with a reputation
for outstanding customer service.”
LEGAL IMPACT:
None.
BK/RP:jf
P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff
Reports\Board 02-05-14\BD 02-05-14 Staff Report Rosarito Desal
Project Update Info Item (BK-RR).doc
Attachments: Attachment A – Committee Action
Attachment B – Budget Detail
Exhibit A – Location Map
Exhibit B – Presentation
ATTACHMENT A
SUBJECT/PROJECT:
P2451-001101
Informational Update for the Rosarito Desalination Plant
and Conveyance and the Otay Mesa Conveyance and
Disinfection System Projects
COMMITTEE ACTION:
This item was presented to the Desalination Committee
(Committee) at a meeting held on January 28, 2014. The
Committee supported presentation to the full Board.
NOTE:
The “Committee Action” is written in anticipation of the
Committee moving the item forward for Board approval. This
report will be sent to the Board as a Committee approved item,
or modified to reflect any discussion or changes as directed
from the Committee prior to presentation to the full Board.
March 23, 2005 through January 21, 2014
ATTACHMENT B
SUBJECT/PROJECT:
P2451-001101
Informational Update for the Rosarito Desalination Plant
and Conveyance and the Otay Mesa Conveyance and
Disinfection System Projects
Committed Expenditures
Outstanding
Commitment
& Forecast
Projected Final
Cost Vendor/Comments
$ 98,577 $ 98,577 $ - $ 98,577 CAMP DRESSER & MCKEE INC
$ 13,311 $ 13,311 $ - $ 13,311 CPM PARTNERS INC
$ 12,200 $ 12,200 $ - $ 12,200 REA & PARKER RESEARCH
$ 70,078 $ 70,078 $ - $ 70,078 MARSTON+MARSTON INC
$ 678,800 $ 591,200 $ 87,600 $ 678,800 HECTOR I MARES-COSSIO
$ 4,173 $ 4,173 $ - $ 4,173 SALVADOR LOPEZ
$ 144,000 $ 124,279 $ 19,721 $ 144,000 SILVA SILVA INTERNATIONAL
Travel $ 19,481 $ 19,481 $ - $ 19,481 STAFF
Printing $ 61 $ 61 $ - $ 61 MAIL MANAGEMENT GROUP INC
$ 162,041 $ 162,041 $ - $ 162,041 GARCIA CALDERON & RUIZ LLP
$ 43,175 $ 43,175 $ - $ 43,175 SOLORZANO CARVAJAL GONZALEZ Y
$ 16,114 $ 16,114 $ - $ 16,114 STUTZ ARTIANO SHINOFF
$ 106 $ 106 $ - $ 106 SAN DIEGO DAILY TRANSCRIPT
$ 500 $ 500 $ - $ 500 REBECA SOTURA NICKERSON
(INTERPRETOR)
Standard Salaries $ 705,745 $ 705,745 $ - $ 705,745
Total Planning $ 1,968,362 $ 1,861,041 $ 107,321 $ 1,968,362
$ 3,910,297 $ 593,010 $ 3,317,287 $ 3,910,297 AECOM TECHNICAL SERVICES INC
$ 5,109 $ 5,109 $ - $ 5,109 MARSTON+MARSTON INC
$ 14,175 $ 14,175 $ - $ 14,175 MICHAEL R WELCH PHD PE
$ 8,818 $ 8,818 $ - $ 8,818 CPM PARTNERS INC
$ 5,000 $ 5,000 $ - $ 5,000 ATKINS
$ 50,293 $ 15,293 $ 35,000 $ 50,293 BROWNSTEIN HYATT FARBER &
SCHRECK LLP
$ 50,000 $ 17,500 $ 32,500 $ 50,000 BUSTAMANTE & ASSOCIATES LLC
Travel $ 2,631 $ 2,631 $ - $ 2,631 STAFF
Prof Legal Fees $ 7,761 $ 7,761 $ - $ 7,761 STUTZ ARTIANO SHINOFF
$ 114 $ 114 $ - $ 114 REPROHAUS CORP
$ 343 $ 343 $ - $ 343 SAN DIEGO UNION-TRIBUNE LLC
Standard Salaries $ 91,440 $ 91,440 $ - $ 91,440
Total Design $ 4,145,979 $ 761,192 $ 3,384,787 $ 4,145,979
Construction Standard Salaries $ 329 $ 329 $ - $ 329
Total Construction $ 329 $ 329 $ - $ 329
Budget $30,000,000.00
Total $ 6,114,670 $ 2,622,562 $ 3,492,108 $ 6,114,670
Design Consultants
Service Contracts
Budget: $30,000,000.00
Project Budget Detail
P2451-Otay Mesa Desalination Conveyance and Disinfection System Project
Planning Consultants
Prof Legal Fees
Service Contracts
571-136.7 MG
870-110.9 MG
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OTAY WATER DISTRICT
Otay Mesa Conveyance and
Disinfection Facility ProjectEXHIBIT A
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PROJECTSITE
VICINITY MAP NTS
DIV. 5
DIV. 2
DIV. 1
DIV. 3
DIV. 4
5
8
8
805
11
9454
94
125
905
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3.2 mi.
3.7 mi.
24 mi.
Existing OWD Pipelines
Proposed Pipeline A
Proposed Pipeline B
Mexico Pipeline
ROSARITO DESALINATION
PLANT AND THE OTAY MESA
CONVEYANCE AND
DISINFECTION SYSTEM
PROJECTS
UPDATE TO THE
BOARD OF DIRECTORS
February 5, 2014
OTAY WATER DISTRICT
Exhibit B
San Diego County Water Authority
Project Background
100 MGD desalination plant in Rosarito, Baja California, Mexico.
Adjacent to the existing power plant on a 50 acre site.
Use of existing ocean intake and cooling ocean water from the power
plant.
25 mile pipeline to the border and a 3.5 mile pipeline to Otay Water
District facilities.
One interconnection to “El Florido” Treatment Plant in Tijuana B.C.
50 MGD for Tijuana/Rosarito and the remainder for Otay Water District
or other agencies.
Water quality to meet International and CDPH standards.
Proposed facilities on the U.S. side include monitoring stations, UV
disinfection, and an existing storage tank (37 MGD).
All chemicals will be NSF certified.
NSC Agua has secured permission for the construction of the Pilot Plant
on the power plant site and recently completed testing the pre‐
treatment phase.2
Otay Water District list of Consultants
Michael R. Welch, Ph.D., P.E.Consulting Engineer
AECOM Consulting Engineer
Marston & Marston Inc.Public Relations ‐Public Outreach
Brownstein Hyatt Farber Schreck, LLP Legislative Advocacy
Silva‐Silva International Legislative Advocacy
Hector I Mares‐Cossío Bi‐National Advisor
Cruz Bustamante Governmental Affairs Advisor
Rea & Parker Research Survey/Market Research
Atkins Consulting Engineer
3
Last Update was given to the Board
January 8, 2013
Milestones since the last update:
Non‐binding Letter of Intent to negotiate a Water Purchase Agreement
signed November 2012.
IBWC/CILA Minute 319 approved November 20, 2012.
On January 24, 2013 limited authorization given to AECOM to start
environmental surveys.
March 22, 2013 tour of pilot plant.
Summer 2013 NSC Agua completes pilot of pre‐treatment.
November 6, 2013 NSC Agua and District presented project to joint
IBWC/CILA meeting in Mexico.
December 3, 2013 Presidential Permit submitted to the US State
Department.
4
IBWC ‐Minute 319
Allows Mexico to store water in Lake
Mead.
5‐Year test program that reduces
deliveries to Mexico when reservoirs
are low and increases deliveries
when reservoirs levels are high.
Allows Nevada and Arizona to invest
in Mexico’s infrastructure to
conserve water to be shared with
many agencies.
Bi‐national Desalination can be
considered methodology to further
conserve water for the environment
and for farmers.
5
Road Map for
CDPH Approval
Otay Mesa Conveyance and
Disinfection System Project –
White Paper:
Provides a summary of
actions and project
elements needed to
facilitate CDPD approval of project.
6
7
Tentative Connection at the Border
8
CONAGUA‐2013
ANTEPROYECTO DE NOM‐XXX‐PLANTAS DESALINIZADORAS
Otay WD engaged in proposed
regulations.
Sets standards for intakes,
outfalls, and brine discharge
requirements for all
desalination plants.
9
2014 Work Plan
Future Milestones for 2014:
NSC Agua to complete review of “White Paper” and submit to CDPH for
review and comment.
NSC Agua to define service pressure and confirm pipeline border
crossing location.
NSC Agua and the District meet with CDPH to discuss regulatory
approval process.
District to complete “Wet Season Surveys” of fairy shrimp.
State Department establishes NEPA requirements for Presidential
Permit.
NSC Agua and the District initiate discussions on term sheet and water
purchase agreement.
10
TEAM MEMBERS
OTAY WATER DISTRICT
11
Counterpart Agencies in Mexico / U.S.
CILA
MEXICO USA
IBWC
NADB
SEMARNAT EPA
CONAGUA CDPH lead
EPA to some extent
PROFEPA EPA
Attorney’s office
CEA DWR to some extent
Water Districts to some extent
CESPT Otay Water District
SPA CalEPA
Bi‐national
Federal
State
BECC/COCEF
Ayuntamiento City governmentMunicipal
SSA CDPH lead
EPA to some extent
Some
functions are
conducted by
different
levels of
government
in each
country (e.g.,
Federal vs.
State, or State
vs. Local)
Bi‐national
Federal
State
Municipal
12
Facilities in Rosarito
13
1414
15
Rosarito Project Update (NSC Agua)
16
Pipeline From Rosarito to
U.S. Border
Rosarito to El Florido ~ 17 Miles
El Florido to U.S. Border ~ 8 Miles
Total ~ 25 Miles
17
Otay Mesa Conveyance and Disinfection Facility
18
COSTS OF FACILITIES
North of the Border
Treatment Scenario Capital Costs
A. Disinfection treatment only in U.S., with a
waiver of specific filtration req’s through
CDPH
±$800,000
B. Full filtration and disinfection in U.S ±$17,000,000
Conveyance
18,000 LF of a 54‐inch pipeline ±$20,000,000
Pump Station ±$9,000,000
19
Rosarito Project Update (NSC Agua)
20