SR - AGR-6301 - FINAL MASTER METERING WATER SYSTEMAGENDA ITEM
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a January 12, 2016
Ac0 om s CPy'�
bDITY
TO: Honorable Mayor and
Members of the City Council
THRU: Rick Otto
City Manager
FROM: Joe DeFrancesco, J�
Public Works Di ector
ReviewedNerified
City Manager
Finance Direct
To Be Presented By:
Joe DeFrancesco
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1. SUBJECT
Water System Agreement with the University of California Irvine Medical Center (UCIMC) to
complete the final master metering of the Medical Center Main Campus.
2. SUMMARY
The Water System Agreement authorizes the City to vacate the existing easement and transfer
the unused Manchester Reservoir site to the University of California Irvine Medical Center in
exchange for $2,000,000 (two million dollars) deposit to be used for the immediate construction
of the final master metering of the UCIMC main Campus.
3. RECOMMENDED ACTION
1. Approve the Water System Agreement between the City of Orange and the University of
California Irvine Medical Center ( "UCIMC ").
2. Authorize the Mayor to execute the easement quitclaim deed to transfer the Manchester
Reservoir site to the UCIMC.
4. FISCAL IMPACT
No direct fiscal impact. The City will benefit financially by not having to maintain the aging on-
site water pipes located on the main UCIMC hospital campus.
5. STRATEGIC PLAN GOAL(S)
I d. Provide for a safe community — Assure the development of the City occurs in a fashion that
maximizes public safety.
2d. Be a fiscally healthy community — Effectively manage and develop City assets.
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6. GENERAL PLAN IMPLEMENTATION
Economic Development Element Goal 4.0 Encourage economic development efforts through
outreach and maintenance of a pro- active business environment.
Policy 4.3: Where appropriate, consolidate inadequately sized land or land owned by multiple
owners into parcels suitable for integrated development with improved pedestrian and vehicular
circulation.
7. DISCUSSION and BACKGROUND
The City of Orange is the water provider to the UCIMC main campus and maintains numerous
and extensive water facilities both surrounding and on the UCIMC main campus site. The City
acquired all water facilities that run through and on site, from the county back in the 1970's.
The UCIMC main campus site contains numerous medical buildings and facilities that have been
in a continual state of change and upgrade for over a decade. Major improvements have
included numerous new buildings and building improvements, improvements to parking and to
the main entrance off of The City Drive and the construction of a new main hospital. In
discussions with the medical center, more improvements and changes are planned for the site.
To facilitate the continual building evolution on the campus, the Water Division, in coordination
and collaboration with UCIMC, had "master metered" the eastern two - thirds of the campus in
2009. This solution provided specific engineered water supply points (master meters) designed
to feed the campus and the future anticipated construction. This solution also effectively
removed the City from maintaining private on -site water facilities on the eastern two - thirds of
the campus, clearing the way for UCIMC to better utilize their on -site space to meet their
specific needs. The master metering of the final western one -third of the site had been postponed
at the request of UCIMC, pending current on -going construction and the finalization of the
building vision for the site.
In May 2014, UCIMC re- approached the City to continue discussions for the final master
metering of the entire site. As part of the discussions, UCIMC is requesting the existing
Manchester Reservoir site easement be vacated by the City as UCIMC would like to build a new
chiller plant building on this site for the hospital complex. The Manchester Reservoir site and
improvements were acquired by the City in 1973 by agreement (C -698) with the County. The
City received an easement for the reservoir site and took ownership of the reservoir (subsurface
water tank) that was built in 1962. The reservoir and accompanying pump station are the original
county water system improvements designed to serve the county facilities exclusively, prior to
the City acquiring them in the 1970s. When integrated into the City's water system, the existing
Manchester Reservoir did not serve economically within the current water system parameters
and as a result the reservoir has been "off line" for approximately the last 15 years and is not
foreseen as being reinstated. Likewise, the reservoir site easement and water tank/pump station
improvements are City assets and cannot be vacated and abandoned without just compensation.
UCIMC and the City recognize each other's goals and needs, and are working collaboratively to
achieve them. City staff estimates the master metering project and related work to cost
approximately $1,500,000 - $1,700,000. UCIMC has agreed to deposit $2,000,000 with the City,
to cover the entire cost to design and construct all final master metering improvements required
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to complete the final master metering of the entire UCIMC site. Upon approval of the
agreement, the City intends to immediately commence with the design and construction of the
final master metering up to completion. In exchange for the funds, the City is to quitclaim the
easement and improvements of the reservoir site to UCIMC. The money deposited with the City
is to be used for the master metering project and related work. Any excess monies after the
completion of the work shall be returned to UCIMC. Any costs incurred over $2,000,000 will be
borne by the City.
The Manchester Reservoir site easement is approximately 11,608 square feet in size
(approximately a quarter acre). Being an easement for water delivery and storage purposes, the
City cannot use the property for any other use. Since it was built over 50 years ago and not used
for over 15 years, it is not up to current standards. With the easement being landlocked by the
hospital complex, the only viable user of the easement property is the underlying fee owner of
the property, UCIMC. Staff does not see any future need for the reservoir and recommends that
city council approve the Water System Agreement and execute the easement quitclaim deed in
exchange for a deposit of $2,000,000 to install the master metering and related work at the
UCIMC hospital complex.
8. ATTACHMENTS
• Water System Agreement between the City of Orange and the University of California Irvine
Medical Center.
• Easement Quitclaim Deed for Manchester Reservoir site.
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NAPublic Works \ADMIN \LYoung \Council Items \COUNCIL\Jan - 2016 \1- 12- 16\Agenda - UCIMC - Orange Water System Agmt (2).doc
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