Board approves reimbursement agreement amendment with $1 million cost cap for Stark Street consolidation
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Summary
After debate about cost controls and grant limits, the Groundwater Authority approved a reimbursement agreement with Indian Wells Valley Water District for the Stark Street/Dune 3 consolidation and added a $1,000,000 cap requiring return to the board for larger expenses or substantive changes.
The Groundwater Authority voted to approve a reimbursement agreement with the Indian Wells Valley Water District to support the Stark Street/Dune 3 consolidation project, adding an amendment to limit reimbursable spending under the agreement to $1,000,000 without returning to the board.
Staff described the project as an extension of an existing consolidation effort (similar to Rademacher), with design work expected from K & S and pipeline construction running from Drummond down Strecker. The project estimate discussed during the meeting was about $615,000; staff said the authority originally received a $3,300,000 grant award under the DWR Urban Community Drought Relief program, of which roughly $1,000,000 has been spent on earlier work, leaving approximately $2,000,000 available.
Board members pressed for an explicit cost-control mechanism because the draft reimbursement agreement did not specify a reimbursement ceiling and could expose the Groundwater Authority to costs if project expenses exceeded available grant funds. Staff and legal said any scenario in which costs exceeded available grant funds would require bringing the matter back to both boards. A public commenter urged that the cost-control provision be included in the motion.
A board member moved to approve the agreement as presented with an amendment to paragraph 3 capping reimbursable costs at $1,000,000 and requiring return to the board for additional approval if costs rose above that amount or if substantive changes were made; another board member seconded. The motion carried on a voice vote.
Staff noted the grant funding must be spent by the end of 2026 or it will be forfeited, which contributed to the board’s decision to proceed with a cap and expedite the agreement subject to staff and legal review of substantive similarities to the water district’s version.
Next steps include staff and legal finalizing minor contract revisions and reporting cost estimates as design progresses; if expenses approach the cap, staff will return to the board for further direction.