Submitted By: Public Works
Prepared By: Ray Pantoja, Water Conservation Analyst
Subject:
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CONSIDERATION OF A RESOLUTION AUTHORIZING AN EXEMPTION TO THE CITY’S PURCHASING POLICY, APPROVING THE 2026 WATER LOSS CONTROL AGREEMENT BETWEEN THE CITY OF SAN CLEMENTE AND THE MUNICIPAL WATER DISTRICT OF ORANGE COUNTY (MWDOC), AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT, AND FINDING THE PROJECT CATEGORICALLY EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
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Summary:
The City Council is being asked to consider approval of the 2026 Water Loss Control Program Agreement (Agreement) with MWDOC, which will extend the previous Agreement from July 1, 2026 through June 30, 2036 (10 Years). The Agreement allows the City to utilize technical assistance through MWDOC and/or its designated contractor in order to complete the City’s annual Water Loss Audit as required under California Water Code § 10608.34. The technical services provided by the Agreement include the Water Loss Audit compilation and the Water Loss Audit validation.
Background:
California Senate Bill (SB) 555 requires urban retail water suppliers to submit annual validated Water Loss Audits to the Department of Water Resources (DWR) and comply with strict, supplier-specific water loss performance standards. The City currently contracts with MWDOC under their Water Loss Control Program, which allows the City to select from a menu of various technical assistance programs, which includes the compilation and validation of the City’s annual Water Loss Audit. In addition, there are several other services available which include: audit submission to DWR; meter accuracy testing; system leak detection; system pressure survey; billing data assessment; component analysis; and overall water loss program assistance. For the past several years, the City has only needed assistance with the Water Loss Audit compilation, and the Water Loss Audit validation. All other services provided by the agreement are either done by City Staff or are not required.
The previous Agreement expired on June 30, 2026. The proposed Agreement will extend the term from July 1, 2026 through June 30, 2036. Due to regional contracting through the City’s water wholesaler, MWDOC, staff suggests an exemption from the City’s Purchasing Policies and Procedures. Sections XI.Z.1.1.5 of the Procurement Policy and Procedure No. 201-2-1 allows the City Council to authorize an exemption to the formal and informal solicitation process for “Services and/or supplies obtained from or through agreement with any governmental, public or quasi-public entity.” In this instance, MWDOC is a public or quasi-public entity and there is no reasonable possibility of obtaining better prices commensurate with the time and effort expended.
Considerations Identified by Staff:
Without technical assistance provided by MWDOC, the City may not have the resources to complete and validate the annual Water Loss Audit as required by SB555. Failure to submit a completed and validated Water Loss Audit may result in the City being subject fines and/or other penalties per the California Water Code.
Council Options:
• Adopt Resolution No. 26-148, which will approve an exemption to the City’s Purchasing Policies and Procedures, approve the 2026 Water Loss Control Agreement extending the Agreement from July 1, 2026 through June 30, 2036, authorize the City Manager to execute the 2026 Agreement and find the project categorically exempt from the California Environmental Quality Act (CEQA) under Class 7 of the state CEQA Guidelines Section 15307 (14 CCR Section 15307, Actions by Regulatory Agencies for Protection of Natural Resources).
• Modify and adopt Resolution No. 26-148.
• Continue the item and direct staff to provide additional information.
• Do not adopt Resolution No. 26-148 to approve the 2026 Water Loss Control Agreement, which will end the Agreement as of July 1, 2026.
Environmental Review/Analysis:
The proposed City Council action to approve the 2026 Water Loss Control Agreement has no potential result in either a direct or physical change in the environment or a reasonably foreseeable indirect physical change in the environment. This action to be categorically exempt from the California Environmental Quality Act (CEQA) under Class 7 of the state CEQA Guidelines Section 15307 (14 CCR Section 15307, Actions by Regulatory Agencies for Protection of Natural Resources). Class 7 consists of actions taken by regulatory agencies as authorized by state law or local ordinance to assure the maintenance, restoration, or enhancement of a natural resource where the regulatory process involves procedures for protection of the environment.
Fiscal Impact:
The City’s typical annual cost is approximately $15,000 for technical services under the Water Loss Control Agreement. Funding for the Water Loss Control Program is available in the Water Operating Fund, Water Conservation Program, Account No. 052-464-43690.
Potential Action(s):
recommendation
If the City Council concurs with the contents of this report, moving the item without modifications would result in adoption of Resolution No. 26-148, which would:
1. Approve an exemption to the City’s Purchasing Policies and Procedures pursuant to Section XI.A.1.1.5 of Procurement Policy and Procedure No. 201-2-1 for an agreement with a public or quasi-public entity;
2. Approve the 2026 Water Loss Control Agreement with the Municipal Water District of Orange County, extending the Agreement from July 1, 2026 through June 30, 2036;
3. Determine that this project is categorically exempt from the California Environmental Quality Act (CEQA) under Class 7 of the state CEQA Guidelines Section 15307 (14 CCR Section 15307, Actions by Regulatory Agencies for Protection of Natural Resources); and,
4. Authorize the City Manager to execute the Agreement (Attachment 2).
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Attachments:
1. Resolution No. 26-148
2. 2026 MWDOC Water Loss Control Agreement
3. 2026 MWDOC Addenda Water Loss Control FY26-27
4. 2025 City of San Clemente Water Loss Audit
Notification:
None.