Agdapkt 2010-12-06 clsd and regular

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6.1 F Pa e 1 REPOR T To the Honorable Mayor and City Council From the City Manager December 6, 2010 SUBJECT Approval of Funding Agreement for 1150 Veterans Boulevard, Kaiser Hospital RECOMMENDATION By motion, approve and authorize the City Manager to execute funding agreement with � Kaiser Permanente, for recycled water distribution and emergency water storage facilities. BACKGROUND On June 29, 2010, the Planning Commission approved the amendment of Kaiser Hospital Downtown Medical Campus Precise Plan and Planned Community (PC) Permit ', for Kaisers Phase 1 Hospital Replacement Project. The EIR was originally certified by 'I Planning Commission on June 24, 2003 and City Council adopted an ordinance approving the Kaiser Precise plan on August 25, 2003. The Kaiser Master Plan involves phased demolition of all existing 15.6 acre Kaiser Campus buildings; except for the 749 stall Veterans Boulevard parking structure. The amended Phase 1 plan approved by Planning Commission is for a 149 bed- 280,000 square foot hospital, a 16,000 square foot Central Utility Plant, on-site improvements with landscaping and pedestrian pathways, and ofFsite improvements including roadway modifications to Walnut Street, Veterans Boulevard, and Maple Street. On July 26, 2010, the City Council approved the construction improvement agreement with Kaiser for the new hospital and campus. Permits have been issued to Kaiser's Contractor, Rudolph and Sletten, to construct improvements including roadway realignments, driveways, new utility services, new sidewalk curb and gutters, drainage facilities, traffic improvements, landscaping and other associated site improvements within the public right of way. The certified EIR identified specific mitigation measures for Kaiser to obtain non- potable, or recycled water supply (UT-1.1) and emergency water storage (UT-2.2). Pursuant to a mutual agreement with the City, Kaiser elected not to construct these measures under the improvement plan. Both parties have agreed that the City shall accept an equivalent financial contribution and shall include these measures in regional projects which will serve Kaiser. This may be more cost efficient to Kaiser because there is an 'economy of scale' by pooling their share into a larger regional water tank, and not having to acquire additional lands to accommodate the area needed for a water tank. In addition to the certified Kaiser EIR and subsequent related environmental documents, the need to construct an emergency potable water supply is described and documented in several reports and studies conducted prior to and after the Kaiser EIR certification. The following reports identify and demonstrate the need to construct a water tank to I