Item Coversheet
CITY OF BELL GARDENS
OFFICE OF THE CITY MANAGER

AGENDA REPORT
 
Item 12.
TO:Honorable Mayor and City Council Members
FROM: Michael B. O’Kelly, City Manager
BY:

Chau Vu, Director of Public Works

SUBJECT:LEASING OF CITY'S CENTRAL BASIN GROUND WATER PUMPING RIGHTS TO LIBERTY UTILITIES
DATE:July  27, 2020
RECOMMENDATION:

It is staff's recommendation that the City Council by motion;

  1. Adopt the attached Resolution Awarding a Lease Agreement for the lease of 750 acre feet of Central Basin Groundwater Annual Pumping Rights with flex rights to Liberty Utilities at the rate of $120 per acre foot for the total of $90,000 for each year in 2020-2021 and 2021-2022; and 
  1. Authorize the City Manager to execute the Lease Agreement with Liberty Utilities and have staff file a copy with the Central Basin Watermaster.  
 
BACKGROUND/DISCUSSION:

Since 1991 the City has owned a potable water system that has 1,650 connections and serves the northerly portion of the City.  The main source of supply since 1997 has been Water Well No. 1.  To use the Well, the City has 1,914 acre-feet of Groundwater Pumping Rights in the Central Basin Groundwater Basin pursuant to a Court Adjudication of the Basin.

 

The City Water System uses approximately 1,140 acre-feet annually of those rights.  The City has generally leased out annually the unused rights along with any carryover from the previous year with an outside water agency in the Central Basin Groundwater Basin with revenue going to the City Water Fund.  The leasing can only be with other pumpers in the Central Basin.

 

For water year 2019-2020, the City will have approximately 750-acre feet of unused rights and for water years 2020-2021 and 2021-2022, the City will have approximately 750 acre-feet of unused rights.  Staff solicited the leasing rights to thirteen (13) water agencies with pumping rights in the Central Basin Groundwater Basin and received one (1) offer as follows:

  • Liberty Utilities – 750 acre-feet for water year 2020-2021 rights at $120 per acre foot for $90,000.00 and for water year 2021-2022 750 acre-feet at $120 per acre foot for a total of $90,000.00

 

Staff contacted several agencies that have submitted offers in the past and all pumpers responded that they have surplus water and do not need to purchase additional water rights.

 



CONCLUSION:

Leasing the water rights to Liberty Utilities will generate $90,000 for this fiscal year and another $90,000 for the following fiscal year 2021-2022.   

 

FISCAL IMPACT:
The leasing of the water rights provides added revenue to the Water Fund for a total of $180,000 for the two fiscal years.   
ATTACHMENTS:
Description
Exhibit 1 - Resolution No. 2020-59
Exhibit 2 - Lease Agreement
Exhibit 3 - Liberty Utilities Bid
APPROVED ELECTRONICALLY BY:
Michael B. O'Kelly, City Manager
Stephanie Vasquez, Assistant City Attorney for Rick R. Olivarez, City Attorney
Will Kaholokula, Director of Finance and Administrative Services