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The Rancho Murieta Community Services District board of directors continued toward its goal of constructing a new water treatment plant this month by finalizing one developer agreement and setting the terms for another. The plant would replace a 40-year-old facility and expand water treatment capacity to accommodate new development. Topics discussed at Wednesday's two-hour meeting included the impact of dry conditions on the community’s water supply and future CSD control over the use of recycled wastewater.

The financing and services agreement between the 670 developer group and the CSD provides “a mechanism for development of a water treatment plant expansion and wastewater disposal facilities,” said CSD general counsel Jonathan Hobbs. “The basic structure of how the FSA will be implemented is it provides for payment and reimbursement mechanisms for any developer who is a signatory....”

A landowner deposit of $750 per unit, about $390,000 in total, was added to the agreement, Hobbs said.  General Manager Ed Crouse said over $100,000 in past-due legal fees now in an escrow account will be released to the CSD when the financing and services agreement is executed. “The parties to the agreement haven’t signed the agreement yet,” Crouse said. “They have indicated their approval of the change conditions ... but I would suggest to the board that we not sign the agreement until we receive the notarized ... signatures.”

The board voted to approve the agreement with that provision. Director Mike Martel first voted against accepting the agreement, then abstained from voting.

The draft FSA is available here.

The board also approved a term sheet for a fee and services agreement for Rancho North and Murieta Gardens being negotiated by the CSD and property owners Cosumnes River Land LLC and Rancho Murieta Properties LLC.

Crouse described the term sheet as “the deal points of a long-term fee and services agreement” which include “financing of each party’s fair share of the water treatment plant expansion project.”

Murieta Gardens is a commercial and residential project across from the Plaza on Murieta Drive. Rancho North is undeveloped property formerly owned by the Pension Trust Fund for Operating Engineers. A plan for Murieta Gardens was approved by the county in 2011. One of the county conditions of approval was a requirement for the water treatment plant to be online before building permits were issued.

The Murieta Gardens plan was amended to include a hotel after the 53-acre property was purchased by Cosumnes River Land in 2012. The amended plan is now going through the county approval process.

The CSD agreed to provide provisional water service for the hotel project in advance of the water treatment plant expansion in exchange for $180,000. The county required a peer review of the CSD decision as part of the approval process for the amended plan. Director Mike Martel said at the board meeting that the peer review supports the CSD determination that there is adequate existing water treatment capacity to serve the hotel.

According to the term sheet, the 30 units of water “initially earmarked for the hotel and extended stay facility ... may be used throughout Owners’ properties based on scheduling and need ... the issuance of the provisional will-serves is predicated on payment of $180,000 upon signing of this fee and services term sheet.”

Plans for the residential property on the North haven't gone through the county process or been made public.

Site work recently began on the Murieta Gardens acreage and the commercial property is being offered for lease.

At the December meeting of the CSD Improvements Committee, as the committee looked at utility plans for the Murieta Gardens site, development representative John Sullivan of Cosumnes River Land LLC said the current layout envisioned for the commercial area has space for fast food, a pharmacy, an urgent care center and offices, and “probably a coffee place and a Jamba Juice and who knows what.” Pads will be set up for grocery, hardware, restaurants, a workout club and other uses, he said.

In introducing the term sheet at the board meeting, Crouse said it will only be in effect briefly. “The landowners have committed to a final fee and services agreement, to bring it back to the board Feb. 1. And the reason for that is we continue to move forward with the water treatment plant, and our schedule to award the contract is the middle of February,” Crouse said. The term sheet requires the landowners to post a letter of credit for financing the plant.

Crouse said the CSD negotiating team for the term sheet included him, Directors Jerry Pasek and Paul Gumbinger, and Assistant General Manager Darlene Gillum. The latest version of the term sheet, dated the day of the CSD board meeting, does not appear in the meeting packet. A paper version was available at the board meeting. (The poor quality of the printed document did not allow it to be scanned for inclusion here.)

“We’re ready to go,” Sullivan said when he came up to the podium to answer questions from the board.

Gumbinger made the motion to approve the Dec. 18 term sheet. Director Bobbi Belton, the only director to vote against approval, said she was “very reluctant about approving a term sheet when the development in question doesn’t have any entitlements from the county.”

Weather, water use and drought

Dry weather in November brought increased water use and resulted in higher than expected water revenue, Assistant General Manager Darlene Gillum reported.

Asked to address concerns about a possible drought, Manager Ed Crouse said statewide there is concern about deliveries from state and federal water projects since their reservoirs aren’t filled. “But as it relates to the CSD, our diversions on the Cosumnes River typically occur in January through May, and every year, other than the ‘76-77 drought, we’ve been able to fill our reservoirs,” Crouse said.

The reservoirs -- Calero, Chesbro and Clementia -- are currently at more than 60 percent capacity, Crouse said, and, “unless things really change,” the CSD expects to meet its diversion goals by the end of the season.

Crouse said if the CSD doesn’t meet its January diversion goals, the district is allowed to increase diversions in February “upwards of 46 (cubic feet per second) so that we can take any and all water that’s coming down the river.” 

“If we haven’t diverted 400 acre-feet by February, then we can ramp up” diversions, using larger pumps, explained Paul Siebensohn, director of field operations.

Crouse said a water status report will be provided in January.

CSD management of recycled water

The CSD application for a master reclamation permit is complete and can be submitted to the Central Valley Regional Water Quality Control Board by the December deadline, General Manager Ed Crouse said.

“This master reclamation permit will allow the district to be the overseer and manager of the recycled water transmission and delivery system in Rancho Murieta,” Crouse said. “But bear in mind that we will not have excess recycled water until the Country Club is fully allotted their recycled water.” The club needs about 100 additional acre-feet of recycled wastewater to meet its 550 acre-foot requirement. “That’s about 300 homes that will need to be built,” Crouse said. The club uses reclaimed water to meet the irrigation needs of the golf courses.

At full build-out, it’s expected there will be about 300 acre-feet of excess recycled water, and “the likelihood of that being available will probably be 2020 and beyond,” Crouse said.

Crouse estimated that processing and approval of the new permit will take about a year.
Refund request gets conditional approval

The board considered a request for a refund from a resident who prepaid the Mello-Roos Community Facilities District #1 taxes on his Murieta South home. The bonds were paid off early, and the resident has requested a refund of the assessment he prepaid for 2014 and 2015, a total of about $1,400.

According to CSD legal advisers, a direct refund from CFD #1 funds isn’t appropriate, but an alternative has been suggested.  Assistant General Manager Darlene Gillum said she worked 18 hours on CFD #1 issues in 2013 and that time has not been billed to the facilities district, which is separate from the CSD. The resident’s reimbursement could be taken from the $3,956 owed to the CSD for her work. This was the approach the Finance Committee recommended taking for the refund.

When it came to the board, the directors, with the exception of Betty Ferraro, approved a refund to the resident contingent on the availability of funds when CFD #1 is closed out after the completion of the water treatment plant.

There is currently about $130,000 left in the CFD #1 account, Gillum said. Depending on how much is left at close-out, it could be refunded to the individual South property owners who paid the Mello-Roos tax or put into a reserve account to pay for future replacement of the infrastructure paid for by the Mello-Roos taxes, Gillum said. 

Project updates

  • The board approved a recommendation for installation of an augmentation well on a site near Cantova Way. The recommendation is based on the results and engineering evaluations of test wells drilled at two sites.
  • The equipment by the firehouse on Murieta Drive marks the site of the main lift North sewer rehabilitation project. The underground work involves resurfacing corroded concrete walls, installation of a trolley/hoist and rehabilitation of two manholes leading to the lift station. The project has had problems -- the epoxy coating for the concrete failed and a key subcontractor is no longer in business, reported Paul Siebensohn, director of field operations. Nevertheless, the work is expected to be completed soon.

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