AgdaPkt 2011-01-24 - Laserfiche WebLink

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6.2C REPORT To the Honorable Mayor and City Council , From the Cit Mana er '� January 24, 2011 SUBJECT Agreement Memorializing Settlement Concerning Changes to the Master Water Sales Contract Suburban Revenue Requirement for FY 2007/08 RECOMMENbATION 1. Approve by motion an Agreement finalizing the Suburban Revenue Requirement of the Master Water Sales Contract for FY 2007/2008 2. Adopt a resolution authorizing the City Manager or designee to execute this and all future Suburban Revenue Requirement settlement agreements BACKGROUND In 1984 the San Francisco Public Utilities Commission (SFPUC) entered into a Settlement Agreement and Master Water Sales Contract (1984 Contract) with suburban purchasers of SFPUC water in Alameda, San Mateo, and Santa Clara counties. Under , the 1984 Contract, these suburban purchasers of water are the same as the agencies ' represented on the board of directors of the Bay Area Water Supply and Conservation Agency (BAWSCA). The suburban purchasers selected five members to act on their behalf in certain aspects of administration and implementation of the 1984 Contract. These five member agencies, named as "Suburban Representatives," are currently Alameda County Water District, California Water Service Company, City of Hayward, City of Palo Alto, and City of Redwood City. The 1984 Contract provides the Suburban Purchasers the right to annually examine and/or challenge SFPUC's calculation of the Suburban Revenue Requirement (i.e. the portion of its annual cost to provide water that is allocated to the suburban purchasers). Investigations and discussion between the staff of the SFPUC and BAWSCA occur as BAWSCA examines this calculation. Once the Suburban Purchasers and SFPUC reach an agreement regarding this calculation, the parties typically execute a Settlement Agreement with SFPUC which limits the rights of the Purchasers and SFPUC to further dispute the calculation of the Suburban Revenue Requirement for each respective fiscal year. With respect to the attached Settlement Agreement, investigations and discussion routinely occurred between the staff of the SFPUC and the Bay Area Water Conservation Agency (BAWSCA), and as a result, a$2.4 million credit in favor of the Suburban Purchasers will be made to the opening balance as part of the FY 2009/10 Compliance Auditor's report on Changes to the Balancing Account. By executing the Agreement, neither the SFPUC nor any Suburban Purchaser may further challenge the SFPUC's calculation of the Suburban Revenue Requirement for FY 2007/O8, as adjusted in accordance with the Agreement. In addition to approving the Agreement for FY 07-08, staff recommends that the City Council expressly delegate the authority to the City Manager or designee, to execute similar future SFPUC settlement agreements. The execution of such agreements is a