AGREEMENT BETWEEN KERN COUNTY WATER AGENCY
AND THE CALIFORNIA WATER SERVICE COMPANY
FOR A WATER SUPPLY
This agreement made this 21st day of September, 2005 (hereinafter
Agreement), is by and between the Kern County Water Agency, established by
chapter 1003 of the 1961 Statutes of the State of California, hereinafter
referred to as the "Agency" and the California Water Service Company, a
California corporation, duly organized and existing under and by virtue of the
laws of the State of California, hereinafter referred to as "Purveyor":
W I T N E S S E T H :
WHEREAS, the Agency and the State of California entered into an agreement
entitled "Water Supply Contract Between the State of California Department of
Water Resources and Kern County Water Agency" dated November 15, 1963, whereby
the State of California has and will furnish a water supply to the Agency; and
WHEREAS, the Agency has obtained an annual State Water Project Table A
Supply of 82,946 acre-feet per year, which is within the yield authorized for
Improvement District No. 4, which it will allocate to the Urban Bakersfield
Area; and
WHEREAS, by Resolution No. 17-71 adopted December 21, 1971, as amended, the
Agency formed Improvement District No. 4 of the Kern County Water Agency to
undertake the financing, construction, operation and maintenance of works to
provide a supplemental water supply for the Urban Bakersfield Area; and
WHEREAS, the lands and inhabitants of the Purveyor to be served by the
water provided hereby, all of which will be located in said Improvement District
No. 4 prior to service, are in need of surface water for beneficial uses; and
WHEREAS, the Agency has sold water to certain distribution agencies, and
desires to continue to sell water to distribution agencies as a method of
achieving the purposes of Improvement District No. 4; and
WHEREAS, in order to continue to meet the increasing demands of the
distribution agencies within Improvement District No. 4 which will exercise all
reasonable efforts to comply with federal, state and local laws regarding water
conservation, the Agency plans to expand its treated water supply to meet those
increased demands by expanding its facilities as illustrated on attached Exhibit
A, under terms and conditions which shall be fair and equitable to all such
water distributors and the inhabitants of Improvement District No. 4; and
WHEREAS, Purveyor desires to enter this Agreement with the Agency for a
water supply, and increase the amount of the supply, for the benefit of the
lands and inhabitants served by the Purveyor within the confines of Agency
Improvement District No. 4 and for which the Purveyor will make payments to the
Agency upon the terms and conditions hereinafter set forth, and Purveyor accepts
this Agreement as meeting the terms of its option for continued service under
its existing contract;
NOW THEREFORE, IT IS HEREBY MUTUALLY AGREED by the parties hereto as follows:
Article 1. Definitions.
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When used in this Agreement, the following terms shall have the meanings
hereinafter set forth:
(A) "Agency Act " shall mean the Kern County Water Agency Act, being
Chapter 1003 of the 1961 Statutes of the State of California, as amended.
(B) "Annual Entitlement" shall mean the amounts of treated water, in
acre-feet, to be made available to each Customer each Year as shown on Exhibit
D, and in accordance with the option arrangement set forth in Article 8. The
maximum instantaneous flow capacities to be provided for each Customer in the
transmission facilities are shown on Exhibit C.
(C) "Capacity" shall mean the measurement of the capability of a pipeline,
canal, Purification Plant, or other facility as measured over a short period
utilizing the full operational capability of the facility, and where referencing
the Purveyor's or other Customer's share of Capacity shall mean that share
allocated by this Agreement either textually or as specified in the incorporated
Exhibits.
(D) "Capital Costs" shall mean all costs incurred by the Agency which are
properly chargeable, in accordance with generally accepted accounting practices,
to the development of, construction of and the furnishing of equipment for the
various project facilities, including the costs of surveys, engineering studies,
exploratory work, designs, preparation of construction plans and specifications,
acquisitions, acquisition of lands, easements and rights-of-way, relocation
work, and essential legal, administrative and financial work in connection
therewith.
(E) "Capital Facilities Charge" shall mean that charge to Purveyor and
other Customers which repays the Expanded Capital Costs, including the interest
on financing of such costs, trustee fees, remarketing fees, credit enhancement
costs, arbitrage rebate, any amount required to replenish a debt service reserve
fund to its required amount, costs for financing or refunding, other ongoing
financing or re-financing costs, any payments required pursuant to Article 19
hereof, any amount necessary to comply with a debt service coverage covenant for
a financing, and other capital costs including, but not limited to, payments on
obligations issued on the Expanded Capital Costs.
(F) "Capital Facilities Account" shall mean a restricted account within the
ID4 Enterprise Fund to receive payments of Capital Facilities Charges and to
disburse payments to service the debt incurred for the Expanded Capital Costs
and other Capital Costs, including but not limited to, payments on Certificates
of Participation issued in 2000 and 2005, and in subsequent years as required to
finance the Expansion Project.
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(G) "Cross Valley Canal" shall mean the concrete lined canal approximately
17 miles in length extending from the California Aqueduct near Tupman easterly
to the Arvin-Edison Canal, together with the turnout from the California
Aqueduct, the pumping plants necessary to lift water through a static head of
approximately 84 feet and such road crossings, utility relocations, fences and
other facilities necessary for its construction and operation.
(H) "Customers" shall mean each of the following water distributors that
contract to buy treated water from the project including: North of the River
Municipal Water District, East Niles Community Services District, California
Water Service Company and the City of Bakersfield.
(I) "Distribution Component" means that portion of the Expansion Project
which is set forth in Article 5(B)(2).
(J) "Enterprise" means the Purveyor's Bakersfield District water system,
including all facilities, works, properties and structures of the Purveyor's
Bakersfield District for the treatment, transmission and distribution of water,
excluding wastewater and all facilities for the collection and treating of
wastewater, but including all contractual rights to water supplies, transmission
capacity, supply, easements, rights-of-way and other works, property or
structures necessary or convenient for such facilities, together with all
additions, betterments, extensions and improvements to such facilities or any
part thereof hereafter acquired or constructed.
(K) "Expanded Capital Costs" shall mean that subset of Capital Costs which
are due to the Expansion Project, exclusive of Cross Valley Canal expansion
capital costs and other capital costs.
(L) "Expansion Project" shall mean the project to be undertaken by the
Agency to increase treated water capacity and delivery capability more
particularly described in Article 5(B).
(M) "Extension" shall mean the lined and unlined canal reaches beginning at
the eastern terminus of the Cross Valley Canal at the afterbay of Pumping Plant
No. 6 and extending easterly approximately 4.5 miles to a point near the Henry
C. Garnett Water Purification Plant, which point is approximately 1240 feet
upstream from the Cawelo Water District's Pump Station "A," together with a
pumping plant necessary to lift water through a static head of approximately 30
feet and such road crossings, utility relocations, fences and other facilities
necessary for its construction and operation.
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(N) "Groundwater Charge" is the governmental exaction levied in Improvement
District No. 4 under the authority of the Kern County Water Agency Act
(Uncodified Act 99, West's Annotated California Water Code) and resolutions of
the Kern County Water Agency Board.
(O) "Improvement District No. 4" or "ID4" shall mean Improvement District
No. 4 of the Kern County Water Agency created by Resolution No. 17-71 of the
Board of Directors of the Kern County Water Agency adopted December 21, 1971, as
amended.
(P) "ID4 Enterprise Fund" is that fund created within the Agency for
accounting of revenues and expenses of the Improvement District No. 4
enterprise, including restricted accounts for the payment of the Expanded
Capital Costs.
(Q) "Maintenance and Operation Costs" of the Enterprise means the
reasonable and necessary costs and expenses paid by the Purveyor for maintaining
and operating the Enterprise, as determined in accordance with generally
accepted accounting principles (GAAP), including but not limited to (a) the
reasonable expenses of management and repair and other costs and expenses
necessary to maintain and preserve the Enterprise in good repair and working
order, (b) administrative costs of the Purveyor attributable to the Enterprise
and the financing thereof, and (c) amounts due Improvement District No. 4 under
the Agreement including, but not limited to, the Treated Water Charge and
Capital Facilities Charge; but excluding (x) depreciation, replacement and
obsolescence charges or reserves therefore, (y) in any Fiscal Year prior to
setting aside an amount equal to the Capital Facilities Charge for such Fiscal
Year, capital expenditures other than as set forth in subsection (A) above, and
(z) amortization of intangibles or other bookkeeping entries or a similar
nature.
(R) "Master Contract" shall mean that contract between the Agency and the
State of California entitled "Water Supply Contract Between the State of
California Department of Water Resources and the Kern County Water Agency" dated
November 15, 1963, as amended to date and any revisions or amendments hereafter
made.
(S) "New Customer" shall mean the City of Bakersfield.
(T) "New Entitlement" is that portion of the Annual Entitlement which
Customers have acquired through the execution of this Agreement and the
Expansion Project.
(U) "Operating Costs" shall mean all necessary costs, other than pumping
costs, for the operation, maintenance, repair, replacement and administration of
the various project facilities, including Expansion Project facilities.
(V) "Original Customers" shall mean Customers other than the City of
Bakersfield.
(W) "Original Entitlement" is that portion of the Annual Entitlement which
Customers held by pre-existing contract.
(X) "Original Project" shall mean the project previously undertaken by the
Agency for the benefit of Improvement District No. 4 and others as described in
said Resolution No. 17-71, including the features more particularly described in
Article 5(A) hereof.
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(Y) "Point of Delivery" means the physical location at which delivery of
the water from the Agency to Purveyor is deemed to occur which is the geometric
plane intersecting the lumen of the delivery structure as water moves from the
Agency pipeline to the delivery structure.
(Z) "Pumping Costs" shall mean all necessary energy and standby costs
incurred by the Agency for pumping water for the Original Project and Expansion
Project with the exception of such costs necessary to move water to the treated
water pump station.
(AA) "Purification Plant" shall mean the Henry C. Garnett Water
Purification Plant.
(BB) "Purification Plant Expansion Component" means that portion of the
Expansion Project defined at Article 5(B)(1).
(CC) "Purveyor Revenues" means all gross income and revenue received or
receivable by the Purveyor from the ownership and operation of the Enterprise,
calculated in accordance with GAAP, including all rates, fees and charges
(including connection fees to the degree permissible under Article XIII C and
XIII D of the California Constitution) received by the Purveyor for Water
Service and all other income and revenue howsoever derived by the Purveyor from
the Enterprise or arising from the Enterprise, together with all other legally
available funds from the Enterprise; provided, however, that (i) any specific
charges levied for the express purpose of reimbursing others for all or a
portion of the cost of the acquisition or construction of specific facilities,
or (ii) customers' deposits or any other deposits subject to refund until such
deposits have become the property of the Purveyor, are not Purveyor Revenues.
(DD) "State Project Water" shall mean water made available to the Agency
from the California Aqueduct, a portion of the State Water Resources Development
system.
(EE) "Treated Water Charge" is that charge established by Article 15 of the
Agreement, including any surcharges thereon established pursuant to Article 15.
(FF) "Water Service" means the service made available or provided by the
Enterprise.
(GG) "Year" shall mean the twelve (12) month period from July 1 of any year
to June 30 of the following year.
Article 2. Term.
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This Agreement shall become effective when all Customers have executed this
Agreement with the Agency and, except as provided for in Article 15(D), shall
remain in effect through January 1, 2035, or until the repayment in full of any
bonds or similar instruments issued for financing of the Expansion Project,
whichever is later. This Agreement supersedes the contract of June 13, 1974,
between the Agency and Purveyor.
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Article 3. Option for Continued Service.
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After the expiration of the term of this Agreement, Purveyor shall be
entitled to continued service under the following conditions unless otherwise
agreed to:
(A) Service of water in annual amounts equal to the Purveyor's total Annual
Entitlement.
(B) Service of water under the same physical conditions of service,
including time, place, amount and rate of delivery, as are provided hereunder.
(C) Service of water at prices to be mutually agreed upon. Other terms and
conditions of the continued service shall be reasonable and equitable and shall
be mutually agreed upon. In the event that said terms and conditions provide for
continued service for a limited number of years only, the Purveyor shall have
the same option to receive continued service as provided here upon the
expiration of that and each succeeding period of continued service.
Article 4. Relationship to Master Contract.
--------------------------------
This Agreement is subject to the obligations and limitations imposed by the
Master Contract and is intended to be in conformance and harmony with it. The
Master Contract is hereby incorporated herein by this reference in all respects
as though set forth in full at this point. The Purveyor hereby expressly agrees
to the provisions of the Master Contract imposing obligations and limitations
upon it and further expressly agrees that nothing in this Agreement shall be
deemed to require the Agency to perform any obligation in conflict with the
Master Contract.
The Agency agrees it will not, without the prior approval of the Purveyor,
consent to any amendments to the Master Contract which would increase the price
of water to the Purveyor under this Agreement or substantially adversely affect
the Agency's ability to deliver the water provided for herein.
Article 5. Integration of Original Project and Expansion Project.
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(A) The following are the components of the Original Project:
(1) Cross Valley Canal Reach 1 which begins with a turnout on the
California Aqueduct near Tupman and extends northeasterly for approximately five
(5) miles to a turnout constructed near the NW 1/4 of the SW 1/4 of Section 2,
T30S, R25E, MDB&M. This reach includes two (2) pumping plants and a major
crossing under Interstate Highway 5 and is designed and constructed to have a
minimum instantaneous flow capacity of 922 cubic feet per second, of which
Improvement District No. 4 has a capacity of 184.36 cubic feet per second, with
a scheduled expansion not related to this Agreement to 1422 cubic feet per
second.
(2) Cross Valley Canal Reach 2 which begins at the terminus of Reach 1
and extends easterly approximately nine (9) miles to a point east of Pumping
Plant No. 5 (at the Rosedale-Rio Bravo Water Storage District Turnout No. 2).
This reach includes three (3) pumping plants and five (5) pipe siphons under the
Sunset Railway, two (2) gas pipelines, Stockdale Highway and Jerry Slough, and
is designed and constructed to have a minimum instantaneous flow capacity of 843
cubic feet per second, which Improvement District No. 4 has a capacity of 174.33
cubic feet per second, with a scheduled expansion unrelated to this Agreement to
1343 cubic feet per second.
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(3) Cross Valley Canal Reach 3 which begins at the terminus of Reach 2
and extends approximately two and three-quarters (2 3/4) miles to the terminus
of the Cross Valley Canal located near the southern terminus of the Friant-Kern
Canal. This reach includes one (1) pumping plant, designed and constructed to
have a minimum instantaneous flow capacity of 812 cubic feet per second, of
which Improvement District No. 4 has a capacity of 185.17 cubic feet per second,
with a scheduled expansion unrelated to this Agreement to 1312 cubic feet per
second.
(4) Cross Valley Canal Extension which has a minimum instantaneous flow
capacity of 342 cubic feet per second, of which Improvement District No. 4 has a
capacity of approximately 168.74 cubic feet per second. It includes a pumping
plant and pipe siphons under the Friant-Kern and Arvin-Edison Canals, the
Southern Pacific and Santa Fe railroads, State Highway 99 and other roads, and
turnouts into the Kern River and Calloway Canal. The Extension ends near the
Henry C. Garnett Water Purification Plant approximately 860 feet upstream of
Cawelo Water District's Pump Station "A."
(5) The original water Purification Plant with sufficient Capacity to
provide for the treatment to commonly accepted standards of potability of at
least 25,000 acre-feet of water annually from the Extension, and any existing
rights in other canal conveyance facilities that feed the Henry C. Garnett Water
Purification Plant.
(6) The North Pipeline and associated pumping plant and delivery
structures for the conveyance and delivery of water as described in Exhibit C
attached hereto and incorporated herein by reference.
(7) The East Pipeline and associated pumping plants and delivery
structures for the conveyance and delivery of water as described in said Exhibit
C.
(8) Facilities for spreading and percolating water for recharging the
underground in Improvement District No. 4, including three (3) Cross Valley
Canal turnouts to the Kern River and one (1) Calloway Canal turnout.
(9) The Improvement District No. 4 share of Pioneer Project facilities
and rights as shown and described on attached Exhibit B attached hereto and
incorporated herein by reference.
(10) The Improvement District No. 4 share of Kern Water Bank Authority
facilities and rights as shown and described on attached Exhibit B.
(11) Other district facilities as specified on Exhibit B, including but
not limited to rights in the City of Bakersfield 2800-Acre Recharge Facility.
(B) The following are the components of the Expansion Project:
(1) Expansion of the Henry C. Garnett Water Purification Plant from a
maximum instantaneous flow Capacity of 38 MGD to 71.9 MGD (the "Purification
Plant Expansion Component"). Such expansion shall also incorporate
modifications, replacements and repairs to original facilities to ensure
continued reliability and operation.
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(2) The "Distribution Component" of the Expansion Project consists of
the following:
(a) Construction of a Northwest Pump Station and Pipeline designed
to convey up to 32.0 MGD to the northwest portion of Improvement District No. 4.
(b) Expansion of the East Pipeline which will include improvements
to the existing pipeline necessary to increase the delivery Capacity from 21.7
MGD to 28.8 MGD.
(c) Expansion of the North Pipeline which will include
improvements to the existing pipeline necessary to increase the delivery
Capacity from 11.4 MGD to 22.1 MGD.
(C) The facilities described in subdivisions (A) and (B) of this Article
are intended to operate as an integrated project except as specifically set
forth herein in other Articles. When reference is made herein to costs or
revenues that are not specifically identified as belonging to the Original
Project or Expansion Project, then the reference shall be presumed to be to the
integrated composite of the two.
Article 6. Allocation of Capital and Operating Costs of Project Features.
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(A) The Cross Valley Canal reaches and Extension are joint use facilities
financed in respective part by the following Cross Valley Canal participants,
including Improvement District No. 4, as identified for each reach and the
Extension. The Improvement District No. 4 share of such costs is specified in
Agency policy on allocation of costs to Improvement District No. 4 and
Purveyor's Agreement:
(1) Reach 1: Improvement District No. 4, Arvin-Edison Water Storage
District (Arvin-Edison), Cawelo Water District (Cawelo), Rag Gulch Water
District (Rag Gulch), Rosedale-Rio Bravo Water Storage District (Rosedale),
Kern-Tulare Water District (Kern-Tulare), Kern County Water Agency (KCWA), Kern
Delta Water District (Kern Delta) and the Fresno-Tulare Group, which consists of
the Hills Valley Irrigation District, Tri-Valley Irrigation District, Pixley
Irrigation District, Lower-Tule River Irrigation District, County of Tulare, and
the County of Fresno.
(2) Reach 2: Improvement District No. 4, Arvin-Edison, Cawelo, Rag
Gulch, Rosedale, Kern-Tulare, KCWA, Kern Delta and the Fresno-Tulare Group.
(3) Reach 3: Improvement District No. 4, Arvin-Edison, Cawelo, Rag
Gulch, Rosedale, Kern-Tulare, KCWA, Kern Delta and the Fresno-Tulare Group.
(4) Extension: Improvement District No. 4 and Cawelo.
(5) The Improvement District No. 4 share of the capital, operating and
other costs of the Cross Valley Canal facilities specified in subdivision (A) of
this Article shall be paid from the ID4 Enterprise Fund.
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(B) A summary of the allocation of estimated Capital Costs among the
Customers for the Expansion Project, exclusive of CVC and Extension expansion
costs, is shown on attached Exhibit E. Exhibit A, attached hereto and
incorporated herein by reference, reflects the resulting percentage allocations
and Capacities. Exhibit F, attached hereto and incorporated herein by reference,
sets forth the description and an initial estimate of the amount of each fee and
cost that Purveyor will be required to pay under this Agreement and a reference
to the Article and section of this Agreement that provides for such cost or fee.
Exhibits A, E and F shall be adjusted to reflect actual costs and Capacities
when known. Expanded Capital Costs, other than those paid directly or financed
by Improvement District No. 4 for its reserved Capacity, shall be financed by
the Customers, including Purveyor, by payment of a Capital Facilities Charge
which shall be accounted for in the Capital Facilities Account designated for
payment of the Expanded Capital Costs. Capital costs allocated to Improvement
District No. 4 for Cross Valley Canal and Extension facilities, including but
not limited to costs related to Improvement District No. 4's share of the
expansion of Cross Valley Canal facilities, are to be paid for out of the ID4
Enterprise Fund described herein.
(C) The Capital Costs, Operating and other costs of the Improvement
District No. 4 share of the Pioneer Project (as set forth in the Pioneer Project
Participation Agreement) and Kern Water Bank Authority (as set forth in the
Joint Powers Agreement for the Kern Water Bank Authority) are to be paid for out
of the ID4 Enterprise Fund described herein.
(D) Improvement District No. 4, through the ID4 Enterprise Fund, will pay
for the following costs incurred by Agency prior to execution of this Agreement
in developing the Expansion Project, and the following additional costs
associated with design of conveyance facilities:
(1) Costs associated with financing of the Expansion Project as
estimated, subject to revision to actuals, as identified in Exhibit E.
(2) Costs associated with the engineering and design of the Northwest
Feeder Project as identified in Exhibit E.
(3) Costs associated with the engineering and design of the North
Pipeline expansion as identified in Exhibit E.
(4) Costs associated with the engineering and design of the East
Pipeline expansion as identified in Exhibit E.
(E) Charges for capital costs of delivery structures, operating and other
costs of conveyance are set forth in Article 9.
(F) Charges for the cost of water, including treatment costs.
(G) Prior to the acceptance of bids on contracts for construction or the
issuance of financing instruments for the Distribution Component, of the
Expansion Project, as defined in Article 5 (whichever shall occur first) and
prior to the acceptance of bids on construction contracts or the issuance of
financing instruments for the Purification Plant Expansion Component of the
Expansion Project, if the projected costs are more than one hundred and
twenty-five percent (125%) of those estimated herein, Purveyor shall have the
option of withdrawing from either component of the Expansion Project by
providing written notice hand-delivered to the Agency General Manager and to
each other Customer within twenty (20) days of the opening of construction bids,
for the specified component of the Expansion Project. In the event of
withdrawal, Purveyor shall pay all fees and other payments specified herein
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based upon the allocation formulas specified herein utilizing Purveyor's
currently existing Capacity and entitlement, if any, for the component from
which Purveyor has withdrawn, and shall be entitled only to benefits and rights
based upon Purveyor's currently existing Capacity and entitlement, if any, for
the component from which Purveyor has withdrawn. In the event of the withdrawal
hereunder of any other Customer, Purveyor shall pay based upon the recalculated
amounts after the withdrawal of Customers electing not to participate in an
Expansion Project component and shall be entitled to a share, based on such
recalculation, of the withdrawing Customer's Capacity, entitlement and other
rights and privileges under the Agreement from which such Customer is
withdrawing. Agency and Purveyor shall take all actions and execute all
documents reasonably required to evidence the foregoing changes in Purveyor's
entitlement, rights and obligations. If a withdrawal occurs, the Agency shall
require a renegotiation of contract terms, and may reject all bids or delay
financing.
Article 7. Completion of Expansion Project.
--------------------------------
Water and distribution conveyance Capacity are currently available to
Original Customers from the Original Project. The estimated completion and
start-up date for the Expansion Project is July 1, 2008. Subject to the
availability of funds, the Agency shall make all reasonable efforts consistent
with sound fiscal policies, reasonable construction schedules and proper
operating procedures to complete the Expansion Project in such a manner and in
such a time that some water from a component of the Expansion Project will be
available to Purveyor by July 31, 2007. To the extent practicable, the Agency
shall notify the Purveyor of any change in this estimate.
Article 8. Contract Entitlement.
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(A) Each Year after the Expansion Project is completed, the Agency shall
make available for delivery to the Purveyor the Purveyor's Annual Entitlement to
water as shown on Exhibit D, as provided in Article 10, and as described by the
terms and conditions of this Agreement. During the Year in which the Expansion
Project is completed, the Agency shall make available for delivery to the
Purveyor that percentage of New Entitlement of the Purveyor that is equal to the
percentage of the Year remaining after the date of completion (in addition to
the Original Entitlement as provided in paragraph (B) below).
(B) Each Year of this Agreement through the Year of completion of the
Expansion Project, the Agency shall make available for delivery to the Purveyor,
the Purveyors' Original Entitlement to water. Each year of this Agreement
through the Year of completion of the Expansion Project or if the Expansion
Project is not substantially completed, the Agency shall make available for
delivery to the Customers that water that may be available in the judgment of
the Agency in addition to that which is contracted for by Original Customers
from the Original Project. Allocation of this additional available water is in
proportion to the Customers' Annual Entitlement. The additional water from the
Original Project may be transported through Capacity available in the Original
Project available to Purveyor, or such share of new Capacity as may be
constructed at the time, subject to proration among other Customers with the
need for transportation Capacity.
(C) During the Year following the Year in which the Expansion Project is
completed, and each Year thereafter for the term of this Agreement, the Agency
shall make available, for delivery to the Purveyor, the Purveyors' Annual
Entitlement as defined by the terms and conditions of this Agreement.
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(D) If an option for increased service is specified for Purveyor in Exhibit
D, Purveyor shall provide to Agency in writing a commitment to add the specified
option amount to its Annual Entitlement within six (6) months of the execution
date of this Agreement, and subsequently all amounts specified herein shall be
determined based on Purveyor's Annual Entitlement as increased by the option
amount. If Purveyor has not provided the commitment in writing within the six
(6) month period, Purveyor shall be deemed to have rejected the offer for
additional entitlement and all determinations shall be made upon the Annual
Entitlement specified without including the option amount. All Exhibits, cost
allocations, and other formulas may be adjusted by the Agency to match the final
amounts of increased service accepted by Purveyor and other Customers.
Article 9. District Facilities and the Costs Thereof.
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(A) Delivery Structures, Conveyance Facilities, Measuring Devices and Cost
Thereof:
All water to be furnished pursuant to this Agreement will be delivered to
the Purveyor through facilities of the Original Project and Expansion Project,
and delivery structures to be provided by Purveyor as follows:
(1) Capital Costs of Distribution Component. All necessary connections
to these facilities are to be constructed with funds provided by the Purveyor
proportional to Purveyor's Capacity in the facility. The turnouts to be
constructed with Purveyor funds shall include the tee, the gate valve and any
other facilities requested and needed by Purveyor for delivery of the Purveyor's
water from Improvement District No. 4 facilities. If the Purveyor desires to
change its point or points of delivery or install additional points of delivery,
it may do so either by furnishing all funds to cover any Agency expenses
involved, or by undertaking the construction at its own expense; provided, the
Purveyor shall not undertake any such construction until it has first obtained
Agency approval of the plans and specifications for such work. Upon receipt of a
request for such a change in place of delivery or installation of additional
places and the deposit of the required funds, the Agency shall diligently
proceed to make such a change or installation. Upon completion of the
construction of any delivery structures, the Agency shall refund any monies
deposited by the Purveyor not expended for such construction.
(2) Capital Costs of Distribution Component Facilities. The Purveyor
has requested that the Northwest Feeder Pipeline described in Exhibit C hereof
be constructed with Capacity for the Purveyor of 23.2 cubic feet per second
requiring a diameter of approximately 42 inches, the size being based on
Purveyor's estimates of required Capacity. Purveyor shall be responsible for its
proportionate share of the pipeline Capital Costs (prorated according to
Purveyor's Capacity stated herein in relation to total Purveyor requested
Capacity of 32.5 cubic feet per second) regardless of whether the Capacity
therein is actually required for delivery of Purveyor's water. Such
proportionate share shall be included in Purveyor's Capital Facilities Charge.
Such amounts shall be paid at the time set forth in Article 16 hereof. Capacity
shall be for use within Improvement District No. 4, including areas which have
been annexed to Improvement District No. 4 in accordance with Article 25, during
the term of the Agreement. The Purveyor shall also pay its proportionate share
of improvements to the Oswell Reservoir and Booster Pumping Facility, based upon
its current contracted capacity, as shown on Exhibit E. The Agency shall have
the right to construct incremental Capacity and future connections to any of the
facilities described herein for use within Improvement District No. 4.
(3) Operating Costs of Conveyance Facilities. The annual Operating
Costs, other than pumping costs, of each pipeline, pumping plant and delivery
structure used in delivering water from the Purification Plant to the Purveyor
shall be borne by the Purveyor and any other Customers taking water through such
conveyance facilities in proportion to the annual quantities of water delivered
to each Customer through each such facility. On or before June 1 of each Year,
the Agency shall notify the Purveyor in writing of the estimated amount of
operating costs it must pay for the next succeeding Year for each conveyance
facility to be used by it. The Purveyor shall pay one-fourth (1/4) of such
estimated costs on or before each of the following dates during the succeeding
Year: July 1, October 1, January 1 and April 1.
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(4) Recalculation and Adjustment of Operating Costs of Conveyance
Facilities. At the end of each Year, each Customer's share of Operating Costs
for that Year shall be recalculated as soon as possible by substituting the
actual costs incurred by the Agency and the actual quantities of water delivered
to each Customer. Any adjustments in the Purveyor's payments required to reflect
this recalculation shall be made in Purveyor's next quarterly operating cost
payment due after the recalculation.
(5) Pumping Costs for Delivering Water. The monthly and annual pumping
costs for each pumping plant used in delivering water from the Purification
Plant shall be borne by the Purveyor and any other Customers taking water
through the pumping plant in proportion to the quantities of water delivered to
each Customer through the pumping plant during the month and the Year, as the
case may be. As soon as possible after the close of each month, the Agency shall
notify the Purveyor in writing of the amount of pumping costs it must pay for
the preceding month. The Purveyor shall pay this amount within thirty (30) days
after receiving such statement of charges from the Agency.
(6) Recalculation and Adjustment of Pumping Costs. As soon as possible
after the end of each Year, the pumping costs for each pumping plant shall be
recalculated by dividing the actual pumping costs incurred by the Agency for
that Year for all water delivered through that pumping plant by the actual
quantities of water delivered through the pumping plant and multiplying the
resulting acre-foot rate by the total quantity of water delivered during the
Year through that pumping plant to each Customer. Any adjustments in the
Purveyor's payments required to reflect this recalculation shall be made in the
Purveyor's first monthly pumping cost payment due after the recalculation.
(7) Measuring Devices. All water furnished pursuant to this Agreement
shall be measured by the Agency at mutually agreed upon points with equipment
satisfactory to the Agency and the Purveyor. All such equipment shall be
installed and maintained by the Agency at the expense of Purveyor. All new
meters shall conform to American Water Works Association standards (or the
standards of the successor organization) for meter design and accuracy and shall
be equipped with a digital readout, which records flow in Million Gallons per
Day (MGD) and totals in MG. All determinations relative to the measuring of
water shall be made by the Agency, and upon request by the Purveyor, the
accuracy of such measurements shall be investigated by the Agency. Any errors
appearing thereon will be adjusted. The Purveyor may inspect such measuring
equipment for the purpose of determining the accuracy thereof.
(B) Purification Plant Expansion Component and other Facilities and the
Costs Thereof.
(1) Purification Plant Expansion Component Capital. The Capital Costs
of the Purification Plant Expansion Component, and other costs attributable to
the Capital Facilities Account, shall be paid by Purveyor through the Capital
Facilities Charge as set forth in Article 16, and through other provisions set
forth herein.
12
(2) Improvement District No. 4 Banking Facilities. All costs of
Improvement District No. 4 water banking facilities including, but not limited
to the Pioneer Project, shall be paid by Improvement District No. 4 with costs
to be paid by the ID4 Enterprise Fund when used for the general benefit to
Improvement District No. 4. Customers benefiting from such facilities shall pay
for costs related to the provision of specific benefits for a Customer, subject
to mutual agreement between participating Customers and the Agency.
(3) Purification Plant Operation and Maintenance and Costs of Other
Facilities. All costs of Improvement District No. 4 other than as specified
above shall be payable from the ID4 Enterprise Fund, as set forth in Article 15.
Article 10. Delivery Schedules.
-------------------
The amounts, times, and rates of delivery of water to the Purveyor during
any Year shall be in accordance with a water delivery schedule determined in the
following manner:
(A) On or before August 1 of each Year, the Purveyor shall submit in
writing to the Agency a preliminary water delivery schedule indicating the
amounts of water, in acre-feet, desired by the Purveyor during each month of the
succeeding six (6) years.
(B) On or before December 1 of each Year, the Purveyor shall submit in
writing to the Agency a water balance demonstrating, subject to the approval of
the Agency which shall not be unreasonably withheld, that the current demand for
Purveyor's contracted entitlement within its service area in Improvement
District No. 4 is greater than or equal to Purveyor's current contracted
entitlement deliveries.
(C) Upon receipt of a preliminary schedule, the Agency shall review it and
after consulting with the Purveyor, shall make such modifications as are
necessary to ensure that the amounts, times and rates of delivery to the
Purveyor will be consistent with the available supply of water from the
treatment facilities, considering each Customer's Annual Entitlement and
Capacity, and the then current delivery schedules of all other Customers. On or
before December 31 of each Year, the Agency shall determine and furnish to the
Purveyor a water delivery schedule for the next succeeding year which shall show
the amounts of water to be delivered to the Purveyor during each month of that
year.
(D) A water delivery schedule may be amended by the Agency upon the
Purveyor's written request. Proposed amendments shall be submitted by the
Purveyor within sixty (60) days before the desired change is to become
effective, and shall be subject to review and modification by the Agency in like
manner as the schedule itself, provided that, Purveyor shall provide the Agency
one (1) year's notice for any increase in deliveries above the previous level of
Annual Entitlement and peaking stated herein to reach its available Annual
Entitlement and peaking Capacity subject to associated increases in operations
and maintenance and pumping costs through the charges specified herein.
(E) In no event shall the Agency be obligated to deliver water to the
Purveyor in any month in excess of the Purveyor's demand for that month as set
forth in the approved delivery schedule, as specified in Exhibit D, or the
amount of water that can be delivered within the Purveyor's contracted peaking
Capacity, as specified in Exhibit C, during the month, whichever is the lesser.
Agency, at its sole discretion, may deliver water in excess of the obligation
specified herein.
13
(F) In no event shall the Agency be obligated to deliver water to the
Purveyor in excess of Purveyor's Capacities for facilities and Annual
Entitlement as specified herein.
(G) If the Agency determines there is excess or unused Capacity and the
Customers request such Capacity, the Agency may allocate any excess or unused
Capacity to the Customers based upon their percentage of the then contracted
Capacity through the Purification Plant.
Article 11. Responsibilities for Delivery and Distribution of Water.
--------------------------------------------------------
Neither the Agency nor its officers, agents, or employees shall be liable
for the control, carriage, handling, use, disposal, or distribution of water
supplied to the Purveyor pursuant to this Agreement after such water has passed
the points of delivery established in accordance with Article 9; nor for claim
of damages of any nature whatsoever including but not limited to property
damage, personal injury, or death, arising out of or connected with the
treatment, control, carriage, handling, use, disposal, or distribution of such
water beyond said delivery structures; and the Purveyor shall indemnify and hold
harmless the Agency and its officers, agents, and employees, from any such
damages or claims of damages. The foregoing shall not apply to any claims,
damages, or liabilities to the extent arising out of the failure of water
delivered by the Agency to the Point of Delivery to meet applicable federal,
State of California and Kern County minimum drinking standards.
Neither the Purveyor nor its officers, agents, or employees shall be liable
for the control, carriage, handling, use, treatment, disposal, or distribution
of water supplied to the Purveyor by the Agency pursuant to this Agreement
before such water has passed the Points of Delivery established in accordance
with Article 9; nor for claim of damages of any nature whatsoever including but
not limited to property damage, personal injury, or death, arising out of or
connected with the control, carriage, handling, use, treatment, disposal, or
distribution of such water before said delivery structures or the failure of
such water to meet applicable federal, State of California and Kern County
minimum drinking water standards before it reaches the Point of Delivery; and
the Agency shall indemnify and hold harmless the Purveyor and its officers,
agents and employees, from any such damages or claims of damages. The amounts to
satisfy any of the foregoing liabilities of the Agency set forth in this Article
11 shall first be paid from proceeds of the insurance described below and
thereafter, or to the extent the claim is not covered by such insurance, from
the ID4 Enterprise Fund and Purveyor shall remain responsible for its allotted
share of payments for such fund. The Agency shall obtain insurance from an
insurer or insurers having a Best's rating of A or higher, or participate in the
Association of California Water Agencies Joint Powers Indemnity Association, or
similar joint self-insurance entity, to protect Purveyor, other Customers and
the ID4 Enterprise Fund with commercially reasonable coverage limits, and the
cost of such insurance or joint indemnification agreements shall be reimbursable
as an Operations and Maintenance expense for each facility
Article 12. Water Shortage.
---------------
(A) At times there may occur a shortage during any year in the quantity of
water available for delivery to the Purveyor by the Agency pursuant to this
Agreement. However, if the Agency can prevent or diminish a shortage in treated
water by temporarily halting or curtailing its spreading of water for recharging
the underground in Improvement District No. 4, it may do so at its discretion.
The Agency may use Improvement District No. 4 groundwater banking projects or
in-district wells for reducing shortages subject to a separate agreement with
the Purveyor.
(B) To eliminate or reduce shortages, Customers may secure and deliver
non-Improvement District No. 4 surface water to the Henry C. Garnett Water
Purification Plant for treatment under the following terms:
14
(1) A request for delivery and subsequent treatment of any
non-Improvement District No. 4 surface water shall require Agency approval.
(2) A request to deliver non-Improvement District No. 4 water shall be
submitted in writing to the Agency for review ninety (90) days prior to the
expected date of delivery. Such request shall include information as to the
quantity, quality and origin of the source water. Requesting Customer shall
provide all information pertaining to the source as requested by Agency.
(3) Improvement District No. 4 shall be responsible for the scheduling
of all non-Improvement District No. 4 surface water and shall coordinate the
delivery of non-Improvement District No. 4 surface water with Customer. The
point of delivery for any non-Improvement District No. 4 surface water shall be
the headworks of the Henry C. Garnett Water Purification Plant or any other
point of delivery available to Customer and Improvement District No. 4 which is
mutually agreeable.
(C) No liability shall accrue against the Agency or any of its officers,
agents, or employees for any damage, direct or indirect, arising from a shortage
on account of drought or other unavoidable causes. In any year in which such a
shortage may occur for any cause so that the total quantity of water available
to the Agency for distribution to the Purveyor and other Customers taking water
from the treatment facilities is less than the total of all quantities
contracted for by the Purveyor and other Customers, the Agency shall apportion
the available treated water among the Customers in proportion to their Total
Annual Entitlements, for the current year, as set forth in Exhibit D and
pursuant to Articles 8 and 10.
(D) The Agency shall give the Purveyor written notice as far in advance as
reasonably possible of any such reduction in delivery to it.
Article 13. Curtailment of Delivery for Maintenance Purposes.
-------------------------------------------------
The State of California or the Agency may temporarily discontinue or reduce
the amount of water to be furnished the Purveyor for the purposes of
maintaining, repairing, replacing, investigating or inspecting any of the
facilities necessary for furnishing of water to the Purveyor. Insofar as it is
feasible, the Agency will give the Purveyor due notice in advance of any such
temporary discontinuance or reductions, except in the case of emergency, in
which case no notice need be given. In the event of such discontinuance or
reduction, the Agency will, upon resumption of service, deliver, as nearly as
may be feasible after consultation with the Purveyor, and to the extent water is
furnished to it by the State of California, or other sources, the quantity of
water which would have been furnished to the Purveyor in the absence of such
discontinuance or reduction. The Agency shall attempt to schedule its routine
maintenance on Project Facilities so that whenever possible, any such
discontinuance or reductions in delivery will occur during periods of reduced
demand.
Article 14. Water Quality.
--------------
(A) The Agency shall use all reasonable efforts to ensure that all water
delivered by the Agency from the Purification Plant into the distribution
pipelines described in Exhibit C hereof shall meet all applicable federal, State
of California and Kern County minimum drinking water quality requirements.
(B) In the future, the Purveyor may use the distribution pipelines to
deliver water from its wells, as well as for delivering water from the
Purification Plant. Any request by the Purveyor for the use of the distribution
pipelines for conveyance of water, other than that originating from the Henry C.
Garnett Water Purification Plant, shall be made by providing written notice
ninety (90) days prior to the requested date of use, provided that such notice
period may be shortened upon a finding of an emergency by the Agency. The Agency
reserves the right to approve or deny any request received, provided that all
costs and risks associated with, or arising from, the delivery of such water
shall be borne by Purveyor in accord with a supplementary written agreement
between Agency and Purveyor.
15
(C) When the Purveyor puts water from any source other than the Henry C.
Garnett Water Purification Plant in the distribution pipelines, the Agency will
be absolved of responsibility for the quality and quantity of any water
delivered to the Purveyor after it leaves the Purification Plant, unless the
liability results from the quality of water leaving the Purification Plant
failing to meet federal, State of California or Kern County minimum drinking
water quality requirements. The burden of proof that such water fails to meet
such requirements shall rest with Purveyor, provided that Agency shall permit
all reasonable testing and review of the Agency's records reasonably necessary
to meet such burden of proof. When the Purveyor ceases to put water from another
source in the distribution pipeline, the Agency will resume responsibility for
the quality and quantity of water delivered to the Purveyor through the Agency's
distribution pipelines when and if the conditions set forth in subdivisions (1)
and (2) are met: (1) Purveyor advances sufficient funds to the Agency to cover
the cost of inspection and testing, and (2) such inspection and testing shows to
the satisfaction of the Agency that other waters are either no longer co-mingled
in the distribution pipelines with the water supply from the Purification Plant
or if co-mingled, the combined waters meet all applicable requirements.
(D) Such assumption of responsibility shall become effective only if and
when the Agency notifies the Purveyor in writing that the results of such
inspection and testing demonstrate to the satisfaction of the Agency that all
applicable water quality requirements have been met.
(E) During any period(s) between the time the Purveyor commences to
introduce water into the distribution pipelines and the time the Agency resumes
responsibility for the quality of water in those pipelines, neither the Agency
nor its officers, agents, or employees shall be liable for the impacts from the
introduction of such water by Purveyor on the quality or quantity of water
supplied to the Purveyor through the distribution pipelines, nor for claim of
damages of any nature whatsoever arising out of or connected in any way with the
quality or quantity of such water introduced by the Purveyor or the impacts
thereof, and the Purveyor shall indemnify and hold harmless the Agency, its
officers, agents, and employees from any such damages or claims of damages. The
foregoing shall not limit the Agency's liability under paragraph (C) of this
Article 14. The burden of proof that such Agency water fails to meet such
requirements shall rest with Purveyor, provided that Agency shall cooperate to
permit all testing and review of Agency records reasonably necessary to meet
such burden of proof. If Agency voluntarily permits other Customers to introduce
water into a pipeline serving Purveyor after the execution of this Agreement,
Agency will require such Customer to accept responsibility for any loss
resulting thereby, and obtain a commitment to hold the Agency, Improvement
District No. 4, and Purveyor harmless from any loss thereby.
(F) Existing agreements, attached as Exhibit G and incorporated herein by
reference, with North of the River and California Water Service Co. and East
Niles Community Services District for introduction of water into the North and
East Pipelines shall remain in effect, and the term of each is amended to be
consistent with the term of this Agreement.
Article 15. Cost of Water.
--------------
The Purveyor, and all other Customers, shall pay the following charges to
be determined and set annually by the Agency:
(A) Treated Water Charge.
The amount of the charge for each acre-foot of water ("Treated Water
Charge") payable by the Purveyor, and all other Customers, shall be One Hundred
and Thirty-Six Dollars ($136), subject to the surcharges specified in this
Article. The revenues received from payment of the Treated Water Charge shall be
accounted for utilizing a separate Agency fund identified as the ID4 Enterprise
Fund. The amount of the Treated Water Charge shall be subject to modification by
mutual agreement of the parties in a periodic ten (10) year review, provided
that this provision does not alter the ability of the Agency to impose
surcharges pursuant to subdivision (D) of this Article.
16
(B) Payment of the Treated Water Charge.
The Purveyor, and all other Customers, shall pay the amount of the Treated
Water Charge provided for in paragraph (A) times either the quantity of water
delivered to them or their Annual Entitlement for the Year as set forth in
Article 8 and Exhibit D, whichever is greater.
(C) Credit for Annual Entitlement Not Taken.
If Purveyor complies with Article 10, regarding scheduling of Annual
Entitlement, the Agency shall use reasonable efforts to sell any of Purveyor's
Annual Entitlement not taken to other Customers at the Treated Water Charge
rate, including surcharges, or such other rate as may be paid by Customers, for
delivery during the Year the Annual Entitlement was not taken by Purveyor. Funds
received from other Customers for the Annual Entitlement of the Purveyor, less
administrative charges of the Agency, shall offset Purveyor's obligation.
(D) Surcharges.
Notwithstanding any other provision of this Agreement, if the Agency
reasonably determines that the ID4 Enterprise Fund is insufficiently funded to
meet the estimated expenses for Improvement District No. 4 for that year,
including any amount necessary to pay debt service or comply with a debt service
coverage covenant not met by the Capital Facilities Charge, the Agency shall
notify Purveyor and make an effort to reduce its estimated expenses to be
consistent with its estimated revenues. If, after thirty (30) days from notice
to Purveyor of its estimate, the Agency has reviewed and where appropriate
reduced expenses, it still projects a deficit with respect to estimated
revenues, it shall provide the relevant financial information to the Purveyor
and all other Customers along with all other information supporting a specified
short-term surcharge to Purveyor, and all other Customers. The total amount of
the short-term surcharges to the Purveyor and all other Customers shall be
sufficient to eliminate the estimated deficit through the Year in which the
estimate is made and the following Year. The amount of the Purveyor's and each
Customer's short-term surcharge shall be determined by the Agency by dividing
the estimated deficit by the current year contracted Annual Entitlement for all
Customers and multiplying the result by the Purveyor's or the other Customers'
Annual Entitlement for that year. The Agency shall use its best efforts to
provide warning of such necessity one Year in advance; however, the failure to
provide such advance warning shall not relieve Purveyor of the responsibility to
pay such surcharge, nor excuse nor affect in any way the obligation to make such
payment in the manner set forth in this Agreement.
Upon implementation of a short-term surcharge, in consultation with the
Purveyor and other Customers, the Agency may develop a financial plan
considering future long-term revenues and costs of Improvement District No. 4
and establishing an annual long-term surcharge on the Treated Water Charge paid
by Purveyors to provide sufficient funding for the five (5) Years following the
period of a short-term surcharge. The Agency shall provide at least ninety (90)
days notice of the intent to impose a long-term surcharge including the
provision of a draft financial plan. In consultation with Customers, Agency
shall adopt the financial plan, as modified, no sooner than thirty (30) days
after the date set for consultation.
Such charges shall be billable to and payable by Purveyor in the same
manner as the Treated Water Charge.
17
Article 16. Payment of the Capital Facilities Charge.
-----------------------------------------
The Purveyor agrees hereby to pay the Capital Facilities Charge from
Purveyor Revenues. The obligation of the Purveyor to pay the Capital Facilities
Charge and to pay the included interest thereon and other costs is absolute and
unconditional, whether or not the Expansion Project shall be completed, and
until such time as all of the Capital Facilities Charges shall have been fully
paid, the Purveyor will not, under any circumstances, discontinue, abate or
suspend any Capital Facilities Charge payment required to be made by it under
Article 19 when due, whether or not the Enterprise or any part thereof is
operating or operable or has been completed, or whether or not the Enterprise is
condemned, damaged, destroyed or seized or its use is suspended, interfered
with, reduced or curtailed or terminated in whole or in part, and such payments
shall not be subject to reduction whether by offset, counterclaim, defense,
recoupment, abatement, suspension, deferment or otherwise and shall not be
conditional upon the performance or nonperformance by any party of any agreement
or covenant contained herein for any cause whatsoever. If the Agency is able to
reduce Capital Costs, or obtains funds that can be applied to reduce Capital
Costs, it may, at its discretion, provide credits to Customers and, if credits
are made, it shall credit the Purveyor a proportionate share of the reduction in
the same percentage that the Purveyor's share of the Capital Costs bears to
total Capital Costs unless it determines that the funds available for credit are
uniquely attributable to specific portions of the Capital Facilities. If the
Agency refinances the debt for Capital Costs, then any savings from refinancing
shall be used to reduce the Capital Facilities Charge. All condemnation
proceeds, all casualty insurance recoveries, and all funds derived from the
Enterprise Fund for the purpose of repair, restoration or modification of the
Henry C. Garnett Water Purification Plant or any distribution lines or other
facilities or equipment that provide a water supply pursuant to this Agreement,
shall be applied to repair and reconstruct the Henry C. Garnett Water
Purification Plant and distribution or other facilities to which they relate and
if such repair or reconstruction is not reasonably feasible, or excess funds
become available, all such condemnation proceeds, insurance proceeds and other
funds shall be applied to reduce the Capital Facilities Charge of each Customer
in the ratio of such Customer's Cost Allocation set forth in Exhibit E. All
repair and reconstruction shall be conducted with diligence in order to assure
restoration of services at the earliest reasonable date.
Article 17. Time of Payment.
----------------
(A) Payment of Charges for Annual Entitlement/Treated Water Charge.
On or before June 1 of each Year, the Agency shall notify the Purveyor of
its estimated charges for Annual Entitlement water for the ensuing Year. These
estimates shall be prepared by the Agency on the basis of the delivery schedules
provided for in Article 10, the Agency's estimates of the revenues and expenses
for Improvement District No. 4 and the Agency's estimates of any credits due as
provided for in Article 15, and the estimate shall provide for both the payments
to be made for water to be delivered and for that portion of the Annual
Entitlement for that Year not requested for delivery. The Purveyor shall pay
sixty percent (60%) of these charges on or before July 10 of each year, and the
remainder on or before January 10 of the following year. If the Expansion
Project is completed after bills have been issued, a supplementary bill shall be
issued by the Agency, and is payable by Purveyor within thirty (30) days of
mailing of the supplementary bill, for estimated charges for the proportion of
New Entitlement provided by the Expansion Project before the year covered by the
next regular annual billing.
(B) Payment of Charges for Deliveries in Excess of Annual Entitlement.
As soon as possible after the end of each Year, the Agency shall send to
the Purveyor a statement of charges for all water delivered to the Purveyor in
the preceding Year in excess of the Purveyor's Annual Entitlement for that Year.
The Purveyor shall pay such statements within thirty (30) days after they are
received.
18
(C) Payment of Capital Facilities Charge.
On or before June 1 of each Year, the Agency shall send the Purveyor a
statement of Capital Facilities Charges for all costs of Capital Facilities, and
payment of principal and interest due on financing for Capital Facilities which
shall be due during the ensuing year as allocated pursuant to Article 6, Exhibit
A, and other provisions herein. To the extent necessary in any given year,
Purveyor's and each other Customer's yearly charge shall be increased by
one-fifth (1/5) to augment the Capital Facilities Account to prevent a default
on financing payments. The Purveyor shall pay sixty percent (60%) of these
charges on or before July 10 of each Year and the remainder on or before January
10 of each Year.
Article 18. Recalculation and Adjustment of Treated Water Charge.
-----------------------------------------------------
As soon as possible after the end of each Year, the charges for water for
that Year required by Article 15(B) shall be recalculated by the Agency by
substituting actual deliveries for the estimated deliveries made pursuant to
Article 16. Any adjustments in the Purveyor's payments required to reflect these
recalculations shall be made in the Purveyors first semiannual payment due after
the recalculations.
Article 19. Default.
--------
(A) The Purveyor shall cause to be levied and collected all necessary fees
and charges and will use all the authority and resources of the Purveyor to meet
its obligations hereunder, to make in full all payments to be made pursuant to
this Agreement on or before the date such payments become due and to meet its
other obligations under this Agreement. In the event of any default by the
Purveyor in the payment of any money required to be paid to the Agency
hereunder, the Agency in its discretion may suspend delivery of water during the
period when the Purveyor is delinquent in its payments or obligation due to the
Agency under the terms of this Agreement; provided, that during any such period
of delinquency or suspension the Purveyor shall remain obligated to make all
payments required under this Agreement. Action taken pursuant to this article
shall not deprive the Agency of or limit any remedy provided by this Agreement
or by law for the recovery of money due or which may become due under this
Agreement.
(B) In the event of default continuing ninety (90) days beyond written
notice to Purveyor to the address specified herein, the Agency may, without
abandoning any other remedy provided by this Agreement or California law,
transfer Purveyor's Annual Entitlement, Capacity, other rights and obligations
hereunder to any other Customer, and if no other Customer accepts an offer of
such transfer within thirty (30) days of mailing, then Agency may transfer such
Annual Entitlement, Capacity, rights and obligations to any water distributor in
Kern County; provided, that priority shall be given to distributors within
Improvement District No. 4. In the event of such transfer, all financial
obligations of Purveyor under this Agreement shall continue except to the extent
they are offset by amounts received from the transferee.
(C) In the event of default by another Customer, as provided in Article 19
hereof, and if the Capacity of that defaulting Customer in facilities,
constructed as part of the Expansion Project, has not been acquired by another
Customer (including the Purveyor) or entity, Purveyor agrees to purchase its pro
rata portion (based on its Capacity in each facility) of said defaulting
Customer's Capacity in each facility on the following terms:
19
(1) Payment for the additional Capacity provided to Purveyor shall be
made by assumption by Purveyor of the pro-rata portion of the Capital Facilities
Charge due from the defaulting Customer.
(2) The purchase price for said Capacity shall not be less than the
payment of the balance of the Capital Facilities Charge of the defaulting
Customer attributable to the Capacity being purchased.
(3) The aggregate amount of the defaulting Customer's Capacity in each
facility to be purchased does not exceed twenty-five percent (25%) of the then
existing Capacity of Purveyor in each facility.
(D) In the event of default by other Customers, Agency shall use all
reasonable efforts to recover from such defaulting Customers all delinquent
Capital Facilities Charge, Maintenance and Operations Costs, Treated Water
Charge, other amounts due under this Agreement, attorney's fees and other costs.
To the extent not recovered from the defaulting Customer, Capital Facilities
Charge due from such Customer will be paid from the Capital Facilities Fund and
attorney's fees and costs will be paid from the Enterprise Fund.
(E) In the event of a default under this Agreement by the Agency, Purveyor
and each other Customer, acting singly or jointly, may exercise any and all
rights available under their respective Agreements with the Agency or under
applicable laws.
Article 20. Obligation to Make Payments.
----------------------------
(A) Character of Obligation.
The obligation of the Purveyor arising out of or pursuant or incidental to
this Agreement including, without limiting the generality of the foregoing, the
obligations of the Purveyor to pay to the Agency the sums becoming due the
Agency for water furnished hereunder, including but not limited to the Capital
Facilities Charge, shall constitute a general obligation of the Purveyor and the
Purveyor shall use all the powers and resources available to it under the law to
collect the funds necessary for and to pay its obligations to the Agency under
this Agreement which meets the terms of its option for continued service under
prior contract for a water supply entered on June 13, 1974. The Purveyor as a
whole is obligated to pay to the Agency the payments becoming due under this
Agreement, notwithstanding any individual default by its water users,
constituents or others in the payment to the Purveyor of tolls, or other charges
levied by the Purveyor.
(B) Refusal of Water Does Not Affect Obligation.
Failure of the Agency to deliver water, or the Purveyor's failure or
refusal to accept delivery of Annual Entitlement for each Year under this
Agreement shall in no way relieve the Purveyor of its obligation to make
payments to the Agency as provided for herein, provided that failure to deliver
water due to Improvement District No. 4 negligence or misconduct in the
operations of its facilities which would constitute a breach of contract shall
excuse payment of the Treated Water Charge and shall excuse the Agency's
obligation to deliver that portion of the Annual Entitlement not delivered, but
in such instances Agency shall use good faith efforts to make delivery of any
Annual Entitlement not delivered within the Year of the failure for which
Purveyor shall pay all costs.
Article 21. Against Encumbrances.
---------------------
The Purveyor hereby covenants that there is no pledge of or lien on
Purveyor Revenues senior to the payment of Maintenance and Operation Costs other
than those disclosed to Agency.
20
Article 22._ Maintenance and Operation of the Enterprise; Budgets.
-----------------------------------------------------
The Purveyor will maintain and preserve the Enterprise in good repair and
working order at all times and will operate the Enterprise in an efficient and
economical manner and will pay all Maintenance and Operation Costs of the
Enterprise as they become due and payable.
Article 23. Amount of Rates and Charges.
----------------------------
(A) Purveyor shall seek, with all due diligence under its customary
practice, the approval by the Public Utilities Commission of its Bakersfield
District rates for the amounts required to be paid by Purveyor under this
Agreement. Subject to the approval of the PUC, the Purveyor will fix, prescribe
and collect rates, fees and charges in connection with the Enterprise's
Bakersfield District so as to yield Purveyor Revenues at least sufficient, after
making reasonable allowances for contingencies and errors in the estimates, to
pay one hundred and twenty-five percent (125%) of the following amounts in the
order below set forth, provided that rates, fees and charges each year to
Customers of the Enterprise need not be set at levels sufficient to return the
foregoing one hundred and twenty-five percent (125%) if reserves and other
legally available revenues of Purveyor, together with those rates, fees and
charges which are set, provide the specified funding level as follows:
(1) All Maintenance and Operation Costs of the Enterprise;
(2) All amounts due on obligations payable from the Purveyor Revenues
on a basis subordinate to payment of Maintenance and Operation Costs; and
(3) All payments required to meet any other obligations of the Purveyor
which are charges, liens, reserves, encumbrances upon, or which are otherwise
payable from the Purveyor Revenues during such Fiscal Year.
(B) If the rate structure provided in subdivision (A) is not approved by
the PUC, then Purveyor shall charge those rates approved by the PUC.
Article 24. Operation of Enterprise; Collection of Rates and Charges.
---------------------------------------------------------
The Purveyor will continue to operate the Enterprise and shall have in
effect at all times rules and regulations requiring all users of the Enterprise
to pay the rates, fees and charges applicable to the Enterprise provided or made
available to such users, and providing for the billing thereof and for a due
date and a delinquency date for each bill. In each case where such bill remains
unpaid in whole or in part after such bill becomes delinquent, the Purveyor, in
accordance with law, may refuse to provide or make available the services
provided by the Enterprise to such premises until all delinquent rates, fees,
charges and penalties have been paid in full.
Article 25. Improvement District No. 4 Boundary Expansion.
----------------------------------------------
(A) Water delivered to the Purveyor pursuant to this Agreement shall not be
sold or otherwise disposed of by the Purveyor for use outside the boundaries of
Improvement District No. 4 without the prior written consent of the Agency.
(B) The Purveyor may request a boundary expansion to allow it to deliver
additional treated water supplies outside the boundaries of Improvement District
No. 4 existing at the time of the request. The Agency shall cooperate with
Purveyor in taking steps necessary to annex new areas to Improvement District
No. 4, but Purveyor shall be responsible for all costs incurred in attempting
such boundary expansion as specified below. The Agency retains the right to
approve or disapprove the adequacy of measures taken to achieve expansion. If
the Purveyor provides a proportional amount of additional new (non-Improvement
District No. 4 State Water Project) surface water supply to Improvement District
No. 4 for use in the expanded areas, the zone of benefit boundary may not need
to be expanded if the Purveyor enters an agreement satisfactory to the Agency to
be responsible for all costs for such supply; provided, however, that such
supply must be acquired by Purveyor and the agreement with the Agency entered
within six (6) months of the date of this Agreement. If, however, the Purveyor
is unable to secure a new surface supply for the expansion, the Purveyor may
request that Improvement District No. 4 purchase additional State Water Project
entitlement at the current market cost, if available, provided that Purveyor
shall be responsible for the full cost of such entitlement if such cost is not
legally charged to a Zone of Benefit. The area to be annexed must also be
subject to the Groundwater Charge existing through other portions of Improvement
District No. 4, and shall take all steps necessary to ensure the applicability
of the Groundwater Charge to the annexed area. Purveyor shall be responsible for
the amount of such Groundwater Charge which would otherwise be levied if the
charge is invalidated. The Customer requesting a boundary expansion will assist
Improvement District No. 4 with any administrative proceedings, environmental
compliance, or any other approvals or processes that may be necessary to comply
with a boundary expansion. All costs incurred complying with, or attempting to
comply with, the request for a boundary expansion shall be paid for by the
requesting Customer. Any request for boundary expansion may also result in the
assessment of an annexation fee by the Agency to the Purveyor. The Agency does
not guarantee the success of any boundary expansion efforts, or the success of
implementation of a zone of benefit levy or expansion of the Groundwater Charge
to an annexed area, and the parties acknowledge that pursuit of an expansion of
Improvement District No. 4's service and supply are subject to the discretion of
the Kern County Water Agency's Board.
21
Article 26. Covenants Relating to Bond Issuance.
------------------------------------
(A) INTENTIONALLY BLANK
(B) INTENTIONALLY BLANK
(C) In order to assist with the issuance of the debt obligations , the
Purveyor hereby covenants to execute an agreement to provide annual reports, as
required by Rule 15c2-12 of the Securities and Exchange Commission, in a form to
be mutually agreed upon between the Purveyor and the Agency, agreement not to be
unreasonably withheld.
(D) In connection with the issuance of the debt obligations, the Purveyor
hereby covenants to provide, in a form acceptable to the Agency, (i) an opinion
of counsel as to the validity and enforceability of this Agreement, and (ii)
certifications customarily delivered in connection with financings such as the
debt obligations.
Article 27. Penalty for Late Payment.
-------------------------
Upon each charge to be paid by the Purveyor to the Agency pursuant to this
Agreement, which shall remain unpaid after the same shall have become due and
payable, shall accrue interest at the rate of one-half of one percent (.5%) per
month of the amount of such delinquent payment from and after the date when the
same becomes due until paid. The Purveyor hereby agrees to pay such interest,
provided that such late charge shall not apply until thirty (30) days after the
Agency invoices Purveyor for the underlying charge.
Article 28. Remedies Not Exclusive.
-----------------------
The use by either party of any remedy specified herein for the enforcement
of this Agreement is not exclusive and shall not deprive the party using such
remedy of, or limit the application of, any other remedy provided by law.
Article 29. Amendments.
-----------
This Agreement may be amended at any time by mutual agreement of the
parties, except insofar as any proposed amendments may adversely affect other
Customers or be in any way contrary to applicable law or inconsistent with the
provisions of the Master Contract. The Agency shall make available to the
Purveyor at all times during the normal hours of business at the Agency offices
for the Purveyor's inspection copies of all contracts now or hereafter executed
by the Agency with all other Customers and the participants referred to in
Article 6 and of any amendments thereto. The Agency agrees that each contract
for the supply of treated water now or hereafter executed with all other
Customers in Improvement District No. 4 shall contain provisions substantially
similar to those herein set forth and shall not contain any provisions of a
material nature more favorable to any other Customer than the provisions herein
applicable to the Purveyor.
Article 30. Opinions and Determinations.
----------------------------
Where the terms of this Agreement provide for action to be based upon
opinion, judgment, approval, review or determination of either party hereto,
such terms are not intended to be and shall never be construed as permitting
such opinion, judgment, approval, review or determination to be arbitrary,
capricious, or unreasonably delayed or conditioned.
Article 31. Waiver of Rights.
-----------------
Any waiver at any time by either party hereto of its rights with respect to
a default or any other matter arising in connection with this Agreement, shall
not be deemed to be a waiver with respect to any other default or matter.
Article 32. Notices.
--------
All notices that are required to either expressly or by implication to be
given by either party to the other under this Agreement shall be signed for the
Agency and for the Purveyor by such officers as they may, from time to time,
authorize in writing to so act. All such notices shall be deemed to have been
given and delivered if delivered personally or if enclosed in a properly
addressed envelope and deposited in a United States Post Office for delivery by
registered or certified mail, or by confirmed delivery by recognized national
delivery service. Unless and until formally notified otherwise, all notices
shall be addressed to the parties at their addresses as shown on the signature
page of this Agreement.
22
Article 33. Assignment.
-----------
The provisions of this Agreement shall apply to and bind the successors and
assigns of the respective parties, but no assignment or transfer of this
Agreement, or any part hereof or interest herein, shall be valid until and
unless approved by the Agency as to all lawful factors within its discretion,
including but not limited to the satisfaction of all covenants and conditions
for all bonds or other financing for the Expanded Capital Costs, provided that
such approval shall not be unreasonably withheld. The Agency shall act upon a
requested approval of a proposed assignment within sixty (60) days of receiving
all relevant requested information. Upon Agency approval of assignment, the
assignee shall assume all rights and obligations of this Agreement and the
assignor shall be relieved of all rights and obligations. The Agency shall not
approve any such assignment or transfer to any person or entity that is not a
Customer unless and until the proposed assignment or transfer has been first
offered to and refused in writing by all Customers. The offer of any such
assignment or transfer shall be on the same basis to all Customers and if more
than one Customer desires to accept the offer, the Agreement or portion thereof
to be assigned shall be prorated among them in proportion to the flow capacities
provided for each of them in the facilities involved in the assignment or
transfer. Notwithstanding any other provisions of this article to the contrary,
the Agency's approval shall not be required for an assignment by the Purveyor of
all or part of this Agreement to a public agency with the power of eminent
domain, if such public agency expressly assumes all or part of the obligation of
this Agreement. If such public agency assumes only a portion of the obligations
of the Purveyor under this Agreement, the Purveyor shall remain obligated for
the remainder of such obligations.
Article 34. Inspection of Books and Records.
--------------------------------
The proper officers or agents of the Purveyor shall have full and free
access at all reasonable times to the account books and official records of the
Agency insofar as the same pertain to the matters and things provided for in
this Agreement, with the right at any time during office hours to make copies
thereof, and the proper representatives of the Agency shall have similar rights
in respect to the account books and records of the Purveyor.
Article 35. Negotiation or Mediation of Disputes.
-------------------------------------
(A) The parties will attempt in good faith to resolve controversies or
claims arising out of or relating to this Agreement by prompt negotiations
between the senior executives of the parties subject to subdivision (B) of this
Article. A party may invoke this Article by providing written notice of the
dispute to the chief executive of the other party specifying the nature of the
dispute and the position of the invoking party, whereupon the chief executive of
the responding party shall provide written notice of the responding party's
position within twenty (20) days of receipt of the invoking party's notice.
Within thirty (30) days of the notice invoking this Article, the chief executive
officers or responsible Vice-President of the parties shall meet in Bakersfield,
California, for the purpose of negotiating a resolution of the dispute. If no
resolution can be negotiated, the parties may agree upon a mediator and
mediation process to further attempt resolution of the dispute.
(B) Provided, however, that this Article shall not limit any party's
ability to proceed at any time with other remedies available to it, including
but not limited to the initiation of litigation.
Article 36. Changes in the Purveyor's Service Area.
---------------------------------------
The Purveyor will furnish the Agency with maps showing their entire water
distribution service area. Throughout the term of this Agreement, the Purveyor
will properly notify the Agency of any changes, either by inclusion or
exclusion, and in said service area or areas.
23
Article 37. Sale of Water to Others.
------------------------
The Agency shall not sell any water from the Purification Plant provided
for in this Agreement to other than the Customers unless and until it has first
offered to sell such water to the Customers at the prices provided for herein.
If the Customers do not elect to take all the water available from the
Purification Plant, the unused water may be sold to others at not less than the
prices provided for herein; provided, that such sale shall not interfere with
the ability of the Agency to make deliveries to the Purveyor and other
Customers; and further provided, that such sales shall be made only to others
who will use the water within Improvement District No. 4 except as provided for
in Article 19.
Article 38. Advisory Committee.
-------------------
An Advisory Committee shall be created which shall consist of nine (9)
members who shall serve terms of one (1) year. One (1) member shall be
recommended by each of the Customers; one (1) member shall be recommended by
sub-contractors to Customers; one (1) member shall be recommended by the City of
Bakersfield; and three (3) members shall be recommended by Agency staff.
Recommendations shall be made prior to the final Agency Board meeting of each
calendar year, or by the relevant recommending party upon the existence of a
vacancy, and the Agency Board of Directors shall consider the recommendations
and make appointments during the final Agency Board meeting of each calendar
year. During his or her term, each member of the Advisory Committee shall serve
at the pleasure of the party responsible for his or her appointment and
alternates may be appointed who may serve in the absence of a member.
The Advisory Committee shall be charged with the responsibility of making
recommendations to the Agency on those portions of the Agency's annual budget
pertaining to the Purveyor and other Customers, Agency water supply and water
quality plans, programs, actions and issues pertaining to the Purveyor and other
Customers' plans and specifications for project facilities, construction and
operating budgets, operating criteria and use of the project facilities. Voting
on the Advisory Committee is on the basis of one (1) person, one (1) vote. To
the extent reasonably possible, the Advisory Committee shall be informed of the
details of such matters in a timely manner and, except in emergencies, the
Agency will seek and consider the advice of the Advisory Committee on all such
matters. Four (4) members of the Advisory Committee shall be considered a quorum
for the committee acting in its advisory capacity. Final decisions concerning
the project, including but not limited to, matters reviewed by the Advisory
Committee, shall be made by the Agency.
A member of the Urban Bakersfield Advisory Committee shall be elected by
the Advisory Committee, and appointed by the Agency Board, to sit on the Cross
Valley Canal Advisory Committee to represent the interests of Improvement
District No. 4 on the Cross Valley Canal. An alternate will be selected by the
Advisory Committee from the Advisory Committee at the first meeting of each
year, provided that if the alternate is not available for any meeting, the
alternate position for the meeting will be filled by the Improvement District
No. 4 Manager.
Article 39. Review by California Public Utilities Commission.
-------------------------------------------------
The rights and obligations of Purveyor under this Agreement are subject to
review by the California Public Utilities Commission ("CPUC") in the course of
rate review proceedings. In the event CPUC fails to approve rates established
for the Enterprise, or finds such charges imprudent, as a result of this
Agreement, then Agency and Purveyor shall immediately begin negotiations to
amend the Agreement in a mutually satisfactory manner in an attempt to resolve
issues resulting in such CPUC action, provided that neither party shall be
excused from performance of the Agreement.
24
Article 40. Integration.
------------
This Agreement represents the entire understanding of Agency and Purveyor
as to those matters contained herein. No prior oral or written understanding
shall be of any force or effect with respect to those matters covered hereunder.
This Agreement may not be modified or altered except by an amendment to this
Agreement evidenced in writing and executed by the parties hereto.
Article 41. Governing Law.
--------------
This Agreement is entered into in the State of California. The law
governing the Agreement is agreed to be that of the State of California and such
federal law as may apply.
Article 42. Time.
-----
Time is of the essence with respect to the performance of each of the
covenants and agreements contained in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
KERN COUNTY WATER AGENCY CALIFORNIA WATER SERVICE COMPANY
By /s/ Michael Radon By /s/ Pete Nelson
---------------------- ----------------------------
Michael Radon Pete Nelson
President President and CEO
ATTEST:
By /s/ Stephanie Prince By /s/ Paul Ekstrom
---------------------- ----------------------------
Stephanie Prince Paul Ekstrom
Secretary Secretary
Kern County Water Agency California Water Service Company
3200 Rio Mirada Drive 1720 North First Street
Bakersfield, California 93308 San Jose, California 95112
25
Exhibit A
Treated Water Capacity Expansion Project Cost Allocation Summary
Treated Water Capacity Expansion Participation Summary
------------------------------------------------------
California KCWA
Water City of East Niles North of the Improvement
Project Service Bakersfield CSD River MWD District No. 4
- ------------------------------------------------------------------------------------------------------------------------------------
Henry C. Garnett WPP Expansion x x x x
North Feeder Expansion Project x
East Feeder Expansion Project x
East Feeder Oswell Bypass Project x x
Northwest Feeder Project x x x
- ------------------------------------------------------------------------------------------------------------------------------------
Treated Water Production Allocation Summary
-------------------------------------------
Existing Incrementa Existing Incremental Total Avg of Ratio
Annual l Annual Total Annual Peaking Peaking Peaking Capacity &
Project Participant Entitlement Entitlement Entitlement Capacity Capacity Capacity Entitlement(1)
- ------------------------------------------------------------------------------------------------------------------------------------
(AF/YR) (AF/YR) (AF/YR) (MGD) (MGD) (MGD) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
California Water Service 11,500 9,000 20,500 15.0 15.0 30.0 35.4%
City of Bakersfield 0 6,500 6,500 0.0 6.0 6.0 19.3%
East Niles CSD 5,000 6,000 11,000 6.7 7.1 13.8 19.9%
North of the River MWD 8,500 6,500 15,000 11.4 10.7 22.1 25.4%
Improvement District No. 4 0 0 0.0 0.0 0.0 0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
25,000 28,000 53,000 33.1 38.8 71.9 100.0%
Distribution Capacity Allocation Summary
----------------------------------------
North North
Feeder Feeder East Feeder NW Feeder
Pipeline Pipeline East Pipeline Pipeline NW Pipeline Pipeline
Capacity Capacity Capacity Capacity Capacity Capacity
Project Participant Allocation Allocation Allocation Allocation Allocation Allocation
- ------------------------------------------------------------------------------------------------------------------------------------
(%) (MGD) (%) (MGD) (%) (MGD)
- ------------------------------------------------------------------------------------------------------------------------------------
California Water Service 0.0% 0.0 0.0% 15.0 46.9% 15.0
City of Bakersfield 0.0% 0.0 0.0% 0.0 18.8% 6.0
East Niles CSD 0.0% 0.0 100.0% 13.8 0.0% 0.0
North of the River MWD 100.0% 22.1 0.0% 0.0 0.0% 0.0
Improvement District No. 4 0.0% 0.0 0.0% 0.0 34.4% 11.0
- ------------------------------------------------------------------------------------------------------------------------------------
100.0% 22.1 100.0% 28.8 100.0% 32.0
Footnotes:
(1) Project participant percent allocation does not directly compare to dept
service percent due to different interest rates for taxable and nontaxable
interest rates.
26
Exhibit B
ID4 Banking Assets Summary Table
- ---------------------------------------------------------------------------------------------------------------
Kern Water Pioneer ID4 Banking ID4 In District
Bank Project(1) Wells Wells Total
- ---------------------------------------------------------------------------------------------------------------
Total Recharge Capacity 450,000 146,000 0 596,000 Ac-Ft/Yr
Total Recovery Capacity 230,000 99,000 12,000 36,000 377,000 Ac-Ft/Yr
- ---------------------------------------------------------------------------------------------------------------
ID4 Percent Interest 9.6% 10.0% 100.0% 100.0%
ID4 Recharge Capacity 43,290 14,600 0 57,890 Ac-Ft/Yr
ID4 Recovery Capacity 22,126 9,900 12,000 36,000 80,026 Ac-Ft/Yr
- ---------------------------------------------------------------------------------------------------------------
Footnotes:
(1) Includes City of Bakersfield's 2800 Acre Recharge Facility
27
Exhibit C
Transmission Pipeline and Turnout Summary Table
North Feeder Pipeline
- ------------------------------------------------------------------------------------------------------------------------------------
Transmission Pipeline Entitlement Transmission Pipeline Turnout Summary
- ------------------------------------------------------------------------------------------------------------------------------------
NOR | Pipeline Turnout
(AF/YR) (AF/YR) (AF/YR) | Station Diamete Cross Street Location Owner
15,000 0 0 |-----------------------------------------------------------------------
- ------------------------------------------------------------| 34+70 14 Belle Avenue NOR
Total Entitlement 15,000 | 55+51 14 Woodrow Avenue NOR
- ------------------------------------------------------------| 80+20 12 Diane Drive NOR
Transmission Pipeline Capacity | 95+03 12 Highland Francis Alley NOR
NOR | 118+53 12 Universe Avenue NOR
(MGD) (CFS) (MGD) (CFS) (MGD) (CFS) | 155+22 20 Seventh Standard Road (Reservoir) NOR
22.1 34.2 |
- ------------------------------------------------------------|
Total Capacity 22.1 34.2 |
- ------------------------------------------------------------------------------------------------------------------------------------
East Feeder Pipeline
- ------------------------------------------------------------------------------------------------------------------------------------
Transmission Pipeline Entitlement Transmission Pipeline Turnout Summary
- ------------------------------------------------------------------------------------------------------------------------------------
| Pipeline Turnout
CWS ENCSD | Station Diamete Cross Street Location Owner
(AF/YR) (AF/YR) (AF/YR) |-----------------------------------------------------------------------
11,500 11,000 0 | 54+70 8 Chester Avenue CWS
- ------------------------------------------------------------| 103+84 16 Union Avenue CWS
Total Entitlement 22,500 | 154+33 16 King Street CWS
- ------------------------------------------------------------| 178+33 12 Berger Street CWS
Transmission Pipeline Capacity | 237+44 15 Wenatchee Avenue CWS
CWS ENCSD | 319+00 16 Fairfax Avenue (Reservoir) ENCSD
(MGD) (CFS) (MGD) (CFS) (MGD) (CFS) | 323+70 12 Country Club ENCSD
15.0 23.2 13.8 21.4 | 353+70 16 College Avenue ENCSD
- ------------------------------------------------------------| 353+80 16 College Avenue (Reservoir) ENCSD
Total Capacity 28.8 44.6 |
- ------------------------------------------------------------------------------------------------------------------------------------
Northwest Feeder Pipeline
- ------------------------------------------------------------------------------------------------------------------------------------
Transmission Pipeline Entitlement Transmission Pipeline Turnout Summary
- ------------------------------------------------------------------------------------------------------------------------------------
| Pipeline Turnout
CWS COB ID4(1) | Station Diamete Cross Street Location Owner
(AF/YR) (AF/YR) (AF/YR) |-----------------------------------------------------------------------
9,000 6,500 0 | 32+72 16 Arrow Street CWS
- ------------------------------------------------------------| 61+95 14 Standard Street COB
Total Entitlement 15,500 | 121+00 14 Mohawk Street CWS
- ------------------------------------------------------------| 121+50 16 Mohawk Street COB
Transmission Pipeline Capacity | 149+50 16 Fruitvale Avenue CWS
CWS COB ID4 | 165+90 16 Alken Street CWS
(MGD) (CFS) (MGD) (CFS) (MGD) (CFS) | 200+47 16 Patton Way CWS
15.0 23.2 6.0 9.3 11.0 17.0 | 300+36 16 Meany Avenue COB
- ------------------------------------------------------------| 300+36 16 Meany Avenue CWS
Total Capacity 32.0 49.5 |
- ------------------------------------------------------------------------------------------------------------------------------------
Footnotes:
(1) ID4 NW Feeder Pipeline entitlement to be determined by ID4 at a later date.
28
Exhibit D
Project Participant Buildout Schedule
- --------------------------------------------------------------------------------------------------------
California City of East Niles North of the Improvement
Fiscal Year Water Service Bakersfield CSD River MWD District No.4 Total
- --------------------------------------------------------------------------------------------------------
Entitlement -AF/YR
- --------------------------------------------------------------------------------------------------------
Total Annual
Entitlement 20,500 6,500 11,000 15,000 0 53,000
% of Entitlement 38.7% 12.3% 20.8% 28.3% 0.0% 100.0%
- --------------------------------------------------------------------------------------------------------
Capacity - MGD
- --------------------------------------------------------------------------------------------------------
Total Peaking
Capacity 30.0 6.0 13.8 22.1 0.0 71.9
% of Capacity 41.7% 8.3% 19.2% 30.7% 0.0% 100.0%
- --------------------------------------------------------------------------------------------------------
Delivery Schedule -AF/YR
- --------------------------------------------------------------------------------------------------------
2004-05 11,500 6,500 6,000 8,500 0 32,500
2005-06 12,500 6,500 6,000 10,000 0 35,000
2006-07 13,000 6,500 7,500 10,100 0 37,100
2007-08 15,500 6,500 7,950 10,200 0 40,150
2008-09 16,000 6,500 8,400 10,300 0 41,200
2009-10 16,500 6,500 8,850 10,400 0 42,250
2010-11 17,000 6,500 9,300 10,500 0 43,300
2011-12 17,500 6,500 9,750 10,600 0 44,350
2012-13 18,000 6,500 10,200 10,700 0 45,400
2013-14 18,500 6,500 11,000 10,800 0 46,800
2014-15 19,000 6,500 11,000 10,900 0 47,400
2015-16 19,500 6,500 11,000 11,000 0 48,000
2016-17 20,000 6,500 11,000 11,100 0 48,600
2017-18 20,500 6,500 11,000 11,200 0 49,200
2018-19 20,500 6,500 11,000 11,300 0 49,300
2019-20 20,500 6,500 11,000 11,400 0 49,400
2020-21 20,500 6,500 11,000 11,500 0 49,500
2021-22 20,500 6,500 11,000 11,600 0 49,600
2022-23 20,500 6,500 11,000 11,800 0 49,800
2023-24 20,500 6,500 11,000 12,000 0 50,000
2024-25 20,500 6,500 11,000 12,250 0 50,250
2025-26 20,500 6,500 11,000 12,500 0 50,500
2026-27 20,500 6,500 11,000 12,750 0 50,750
2027-28 20,500 6,500 11,000 13,000 0 51,000
2028-29 20,500 6,500 11,000 13,250 0 51,250
2029-30 20,500 6,500 11,000 13,500 0 51,500
2030-31 20,500 6,500 11,000 13,750 0 51,750
2031-32 20,500 6,500 11,000 14,000 0 52,000
2032-33 20,500 6,500 11,000 14,250 0 52,250
2033-34 20,500 6,500 11,000 14,500 0 52,500
2034-35 20,500 6,500 11,000 15,000 0 53,000
- --------------------------------------------------------------------------------------------------------
29
Exhibit E
Treated Water Capacity Expansion Project Cost Allocation Summary
Treated Water Capacity Expansion Cost Summary
Feasibility Estimated Total
Administration Engineering Construction Estimated
Project & Financing(5) Cost(1) Cost(9) Cost
- ---------------------------------------------------------------------------------------------------------------------
($) ($) ($) ($)
- ---------------------------------------------------------------------------------------------------------------------
Henry C. Garnett WPP Expansion (72 MGD) 635,000 2,050,000 35,638,500 38,323,500
North Feeder Expansion Project 698,625 3,378,125 4,076,750
East Feeder Expansion Project 660,825 3,186,625 3,847,450
East Feeder Oswell Bypass Project 625,000 625,000
Northwest Feeder Project 803,900 14,697,000 15,500,900
- ---------------------------------------------------------------------------------------------------------------------
Total 635,000 4,213,350 57,525,250 62,373,600
- ---------------------------------------------------------------------------------------------------------------------
Treated Water Expansion Cost Allocation Summary(4)
Existing Incremental Total Existing Incremental
Annual Annual Annual Peaking Peaking
Project Participant Entitlement Entitlement Entitlement Capacity Capacity
- -----------------------------------------------------------------------------------------------------------------------------------
(AF/YR) (AF/YR) (AF/YR) (MGD) (MGD)
- -----------------------------------------------------------------------------------------------------------------------------------
California Water Service 11,500 9,000 20,500 15.0 15.0
City of Bakersfield 0 6,500 6,500 0.0 6.0
East Niles CSD 5,000 6,000 11,000 6.7 7.1
North of the River MWD 8,500 6,500 15,000 11.4 10.7
Improvement District No. 4 0 0 0 0.0 0.0
- -----------------------------------------------------------------------------------------------------------------------------------
Total 25,000 28,000 53,000 33.1 38.8
- -----------------------------------------------------------------------------------------------------------------------------------
Treated Water Expansion Cost Allocation Summary(4) (Continued)
Avg of Ratio HCGWPP
Total Peaking Capacity & Cost
Project Participant Capacity Entitlement(8) Allocation
- -------------------------------------------------------------------------------------------------------
(MGD) (%) ($)
- -------------------------------------------------------------------------------------------------------
California Water Service 30.0 35.4% 13,342,229
City of Bakersfield 6.0 19.3% 7,288,617
East Niles CSD 13.8 19.9% 7,486,357
North of the River MWD 22.1 25.4% 9,571,297
Improvement District No. 4 0.0 0.0% 635,000
- -------------------------------------------------------------------------------------------------------
Total 71.9 100.0% 38,323,500
- -------------------------------------------------------------------------------------------------------
30
Distribution Cost Allocation Summary
North North North East
Feeder Feeder Feeder East Feeder
Pipeline Pipeline Pipeline Pipeline Pipeline East Feeder
Capacity Capacity Cost Capacity Capacity Pipeline Cost
Project Participant Allocation(2) Allocation Allocation Allocation Allocation Allocation(7)
- ------------------------------------------------------------------------------------------------------------------------------------
(%) (MGD) ($) (%) (MGD) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
California Water Service 0.0% 0.0 0 0.0% 15.0 432,028
City of Bakersfield 0.0% 0.0 0 0.0% 0.0 0
East Niles CSD 0.0% 0.0 0 100.0% 13.8 3,379,597
North of the River MWD 100.0% 22.1 3,378,125 0.0% 0.0 0
Improvement District No. 4 0.0% 0.0 698,625 0.0% 0.0 660,825
- ------------------------------------------------------------------------------------------------------------------------------------
100.0% 22.1 4,076,750 100.0% 28.8 4,472,450.0
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution Cost Allocation Summary (Continued)
NW Feeder
NW Pipeline Pipeline NW Feeder
Capacity Capacity Pipeline Cost
Project Participant Allocation(3) Allocation Allocation(6)
- ------------------------------------------------------------------------------------
(%) (MGD) ($)
- ------------------------------------------------------------------------------------
California Water Service 46.9% 15.0 9,755,000
City of Bakersfield 18.8% 6.0 3,902,000
East Niles CSD 0.0% 0.0 0
North of the River MWD 0.0% 0.0 0
Improvement District No. 4 34.4% 11.0 1,843,900
- ------------------------------------------------------------------------------------
100.0% 32.0 15,500,900
Project Participant Total Capital Project Cost
Total Project
Project Participant Cost
- --------------------------------------------------
($)
- --------------------------------------------------
California Water Service 23,529,256
City of Bakersfield 11,190,617
East Niles CSD 10,865,954
North of the River MWD 12,949,422
Improvement District No. 4 3,838,350
- --------------------------------------------------
62,373,600
- --------------------------------------------------
Footnotes:
(1) Costs approved to date for engineering, analysis and design of the
conveyance system. Approval does not include plant expansion design.
(2) Allocation calculated by the average of the ratios between percentage of
incremental entitlement and percentage of incremental capacity.
(3) Allocation calculated by percentage of incremental capacity.
(4) Includes cost of financing Treated Water Capacity Expansion Project
(5) Does not include the cost of bond insurance.
(6) Based in ID4 incremental participation in the NW Feeder Project. Includes
ID4 payment of 100% NW Feeder design cost.
(7) Includes Oswell Bypass Project Cost not funded through the $1,200,000 DWR
State Revolving Fund Loan.
(8) Project participant percent allocation does not directly compare to dept
service percent due to different interest rates for taxable and nontaxable
interest rates.
(9) Construction costs include 35% contingency.
31
Exhibit F
Treated Water Capacity Expansion Project Billing Summary
Project Participant Billing Schedule Summary
- --------------------------------------------------------------------------------
Frequency Date Due(1)
- --------------------------------------------------------------------------------
Power Monthly January 30 Days
through
December
- --------------------------------------------------------------------------------
Operation & Maintenance Quarterly July 1 30 Days
October 1
January 1
April 1
- --------------------------------------------------------------------------------
Treated Water Charge Semiannually July 10 30 Days
January 10
- --------------------------------------------------------------------------------
Capital Facilities Charge Semiannually July 10 30 Days
January 10
- --------------------------------------------------------------------------------
Project Participant Billing Cost Summary
- -----------------------------------------------------------------------------------------------------------------------
Treated
Power Operation & Water
Cost(5) Maintenance(5) Charge(2) Capital Facilities Charge(3)
- -----------------------------------------------------------------------------------------------------------------------
Conveyan Conveyance Treatment Conveyance Treatment Total
Frequency Monthly Quarterly Semiannually Semiannually
- -----------------------------------------------------------------------------------------------------------------------
California Water Service Actual Actual 1,394,000 411,448 564,167 975,615
City of Bakersfield(4) Actual Actual 442,000 138,027 270,732 408,760
East Niles CSD Actual Actual 748,000 119,548 278,077 397,625
North of the River MWD Actual Actual 1,020,000 119,496 355,521 475,017
Improvement District No. 4 36,788 0 36,788
- -----------------------------------------------------------------------------------------------------------------------
$3,604,000 $825,307 $1,468,498 $2,293,805
- -----------------------------------------------------------------------------------------------------------------------
Footnotes
(1) Bills due within 30 days of postmarked date on invoice.
(2) Based on $136/Ac-Ft multiplied by the purveyor's entitlement on a
semiannual basis.
(3) Estimated charges include principle, interest, reserve, underwriter
discount and insurance.
(4) Bond interest based on nontaxable rate.
(5) O,M & P Costs for treatment paid for by the ID4 Enterprise Fund
32
Exhibit G-1
AGREEMENT
BETWEEN NORTH OF THE RIVER MUNICIPAL WATER DISTRICT
AND
THE KERN COUNTY WATER AGENCY
This agreement entered this 22nd day of November, 1996, between the
Kern County Water Agency ("Agency"), and the North of the River Municipal Water
District ("NORMWD") regarding construction and operation of NORMWD Well #3
discharge pipeline connection to the Agency 27 inch north pipeline.
RECITALS
WHEREAS, the Agency, on behalf of its improvement district number 4,
owns and operates a 27" diameter water pipeline from its treatment plant to
portions of its service area within Improvement District No. 4 (the "North
Pipeline");
WHEREAS, NORMWD previously provided additional funding to Agency for
enlargement of the capacity of the North Pipeline to allow for potential
utilization for well water;
WHEREAS, NORMWD has a proposed potable water well, known as "NORMWD
Well #3", located within its service area and Agency Improvement District No. 4
which will be capable of providing potable water of suitable quality for use
within NORMWD and Improvement District No. 4; and
WHEREAS, it is in the best interest of the parties to this agreement
that a connection be constructed from the proposed NORMWD Well #3 to the 27 inch
Agency North Pipeline near 601 Willow Dr., Oildale, so as to allow for the
augmentation of NORMWD's water supply and therefore help relieve the peak load
on the Agency Improvement District No. 4 water treatment plant.
NOW THEREFORE, for the mutual consideration set forth herein, it is
agreed as follows:
1. Agency, for the consideration herein set forth, grants permission to
the NORMWD to construct a pipeline connection from its proposed NORMWD Well #3
to the Agency North Pipeline (hereinafter referred to as "Connection") within
the Agency's accompanying easement or right-of-way near 601 Willow Dr., Oildale,
as shown on Exhibit "A"; consisting of a fabricated flanged outlet attached to
the 27" Agency line valving (including check valve), and appropriate metering
equipment; connecting to 10" ductile iron discharge pipe from the well.
2. This contract shall become effective on the date signed below, and
shall remain in effect throughout the term provided by Article 2 of the Treated
Water Contract dated June 13, 1974, between the Agency and NORMWD, and any
extensions, amendments or renegotiations thereto.
3. Detailed plans and specifications shall be prepared by NORMWD for
the Connection and related structures subject to approval of the Agency, and
shall be subject to the Agency's right-of-way. Record drawings and
specifications will be on permanent file at NORMWD.
33
4. Metering will be by in-line propeller meters, or other AWWA approved
device. Provisions will be made for accommodation of transducers, telemetry
equipment and the treatment plant SCADA monitoring and control system. Records
of the daily and accumulated flows will be maintained by NORMWD. Costs incurred
for meeting the requirements of this provision shall be the responsibility of
NORMWD.
5. The Connection shall be constructed by NORMWD through force account,
and/or licensed contractors, at NORMWD's sole expense. Construction shall be
subject to the inspection and approval of the Agency at each stage. NORMWD shall
keep Agency fully apprised of the schedule of construction. An encroachment
permit issued by the Agency will be obtained by NORMWD prior to the commencement
of construction.
6. The Connection shall be operated by NORMWD so as to not interfere
with the Agency's treatment plant operations and water deliveries. All produced
water from Well #3 will meet all State of California potable water quality
requirements.
7. Agency shall have access to the Connection for inspection purposes
at any time. Agency will endeavor to provide NORMWD with advance notice of such
inspections to the extent practical. The Agency will maintain ownership of the
Connection up to, but not including, the isolation valve attached to the flanged
outlet. NORMWD will maintain ownership from, and including the isolation valve
to the well.
8. Unless operation is requested by the Agency, NORMWD will provide one
hour notice to the Agency of its intent to use the Connection to deliver
produced water from its Well #3 into the Agency line. In the event of an
emergency, notice will be given as soon as practical. Upon notice the Agency may
deny permission in accordance with paragraph 9. If conditions require the Agency
to shut down Well #3, one hour notice shall be given unless an emergency exists,
in which case notice shall be given as soon as practical.
9. The Connection will not be operated under any conditions which are
adverse to the operations, finances, and water supply of the Agency and its
Treated Water Contractors.
10. NOR shall defend, indemnify, and hold harmless the Agency, its
employees, directors, contractors and agents, with respect to any claims or
liabilities of all kinds arising out of, or related to the construction or
operation of the Connection, including but not limited to all reasonable
attorney and consultant fees.
11. In the event of disputes relating to this agreement, the parties
shall first submit to mediation in an attempt to resolve such disputes, then
such disputes shall be subject to a non-binding arbitration before a mutually
agreeable neutral arbitrator, or if no agreement can be reached, before a
neutral arbitrator selected by the Kern County Superior Court. In the event of
an action after arbitration, the party obtaining a result less favorable than
the result obtained in arbitration shall bear the attorneys fees of both
parties.
34
IN WITNESS WHERE OF, the parties hereto have executed this contract on
the 22nd day of November, 1996.
Kern County Water Agency North of the River Municipal Water District
BY: /s/ Terry Rogers BY: /s/ Don Cross
-------------------------------- --------------------------------
Terry Rogers Don Cross
President, Board of Directors President, Board of Directors
ATTEST:
BY: /s/ Pam Bosworth BY: /s/ William R. Miller
-------------------------------- --------------------------------
Pam Bosworth, Secretary William R. Miller, Secretary
Kern County Water Agency North of the River Municipal
P.O. Box 58 Water District
Bakersfield, California 93302 4000 Rio Del Norte Street
Bakersfield, California 93308
35
Exhibit G-2
AGREEMENT AMONG
CALIFORNIA WATER SERVICE COMPANY
AND
EAST NILE COMMUNITY SERVICES DISTRICT
AND
KERN COUNTY WATER AGENCY/IMPROVEMENT DISTRICT NO. 4
For Construction and Operation of a California Water Service Company
(hereinafter referred to as "CWS") "T" Connection and Related Facilities
(hereinafter referred to as the "Connection") to the Kern County Water
Agency/Improvement District No. 4 (hereinafter referred to as the "Agency") East
Pipeline near or at the 23 Corner Tank Facility site
WHEREAS, it is in the best interests of the parties to this Agreement
that this Connection be constructed to enable CWS to use the Agency's east
transmission pipeline at or near the 23 Corner Tank Facility for conveying
treated water from CWS' new North East Bakersfield Water Treatment Plant
(NEBWTP) to customers within the service areas of CWS and East Niles Community
Services District (hereinafter referred to as "ENCSD").
WHEREAS, the following benefits expect to be realized as the result of
the Connection being constructed and operated in the manner set forth in this
Agreement:
(1) ENCSD will receive an excellent quality of treated Kern River
water from the NEBWTP;
(2) There will be an increase in treated water supply reliability
for all three parties due to the direct connection of the NEBWTP
and the Agency's Henry C. Garnett water treatment plant (HCGWTP)
to the east pipeline;
(3) ENCSD will experience a significant reduction in costs for
electric power consumption due to the elimination or reduction
under normal circumstances of pumping water from the HCGWTP to
the 23 Corner Tank Facility;
(4) If the Agency is required and able to deliver an additional
3,000 acre-ft/year of treated water to ENCSD consistent with the
terms and conditions of the existing Treated Water Contract
dated June 13, 1974, including the provisions of Agency
Resolution No. 16-71 and the Agreement dated August 25, 1983
that implemented this Resolution, CWS will provide ENCSD the
additional amount in exchange for the treated water that would
have been delivered by the Agency to ENCSD;
(5) ENCSD has the opportunity to participate in and therefore
increase the amount of treated water it receives from future
expansions of the NEBWTP if it contracts with CWS to pay for its
proportional share of capital, operational and maintenance costs
of such expansions.
WHEREAS, it is recognized by all parties that this Agreement does not
amend, change, limit, alter or invalidate any of the terms and conditions of the
existing Treated Water Contract dated June 13, 1974, among the Agency, CWS,
ENCSD, and other Treated Water Contractors. The duties and obligations of each
party and respective assignments of treated water as set forth in the Treated
Water Contract and any amendments thereto remain in effect after this Agreement
is executed and the Connection is constructed and put into operation.
NOW THEREFORE, it is agreed as follows:
36
1. The Parties agree that the statements set forth in the preceding
"Whereas" clauses are true and correct to the best of their
knowledge and are being relied upon by the Parties in entering
into this Agreement.
2. The Agency grants permission to CWS to construct the Connection
from its piping system to a tie-in with the Agency's piping
system and make use of the Agency's existing easement or
right-of-way near 5401 Auburn Ave, as shown and described in
Exhibits "A-1, A-2, B-1 and B-2", attached hereto, subject to
the conditions set forth in the following sections of this
Agreement.
3. This Agreement shall become effective on the date signed below,
and shall remain in effect throughout the term provided by
Article 2 of the Treated Water Contract dated June 13, 1974,
between the Agency, CWS and ENCSD and any extensions,
amendments, or renegotiations thereto unless all parties
mutually agree to earlier termination.
4. Detailed plans and specifications shall be prepared by CWS for
the Connection for review and approval by the Agency and ENCSD,
and shall be subject to the Agency's right-of-way. Record
as-built drawings and specifications will be on permanent file
at CWS and copies provided to the Agency and ENCSD.
5. Metering will be by an AWWA approved device. Provisions will be
made for accommodations of transducers, telemetry equipment, and
the HCGWTP SCADA monitoring and control system. Records of the
daily and accumulated flows will be maintained by both the
Agency and CWS. Copies of all flow records will be provided to
ENCSD. Costs incurred for meeting thr requirements of this
provision shall be the responsibility of CWS.
6. The Connection shall be constructed by CWS through force
account, and/or licensed contractors, at the sole expense of
CWS. Construction shall be subject to the inspection and
approval of the Agency at each stage. CWS shall provide the
Agency and ENCSD with the schedule of construction and timely
updates of construction progress. CWS will obtain an
encroachment permit from the Agency prior to commencement of
construction. Any shutdowns of the Agency's east transmission
pipeline for purposes of construction or disinfection of the
Connection will be performed only after prior consent has been
obtained from ENCSD and in a manner and under conditions that
does not result in negative or harmful effects on the
operations, finances and water supply of ENCSD.
7. The Connection shall be operated by CWS in a manner and under
conditions that do not result in negative or harmful effects on
the operations, finances, and water supply of the Agency's
Improvement District No. 4, ENCSD and other Treated Water
Contractors. Responsibilities for operations and maintenance of
the Connection by CWS and related administrative procedures
shall be in accordance with the provisions of the Treated Water
Contract dated June 13, 1974. All water delivered to the
Connection by CWS from the NEBWTP shall meet all State of
California Department of Health Services potable water quality
requirements.
8. Agency shall have access to the Connection for inspection
purposes at any time. Agency shall provide CWS with advance
notice of such inspections to the extent practical. Agency will
maintain ownership of the Connection which subject to final
design changes will generally consist of the
following:________________________________ .
37
9. CWS shall defend, indemnify, and hold harmless the Agency and
ENCSD, their employees, directors, contractors and agents, from
damages and losses including reasonable attorney fees and
consultant fees to the extent caused by the negligence or
willful misconduct of CWS, its employees and agents, including
without limitation, negligence or misconduct in the design of,
construction of, or operation and maintenance of the Connection,
or design of the CWS system, and from the day to day management
and operations of flow through the Connection to ENCSD.
10. Agency shall defend, indemnify and hold harmless CWS and ENCSD,
their employees, directors, contractors and agents from damages
and losses including reasonable attorney fees and consultant
fees, to the extent caused by the negligence or willful
misconduct of the Agency or its employees, directors,
contractors or agents, including without limitation, negligence
or misconduct in operational control of the Connection.
11. Dispute Resolution:
(1) Intent. Agency, ENCSD, and CWS desire and intend to
resolve all disputes or other matters arising out of or in
connection with this Agreement through reasonable,
business like dispute resolution procedures without resort
to litigation. Accordingly, any disputes among the parties
shall be resolved in accordance with this section,
excepting those construction disputes resolved according
to the requirements of Public Contract Code sections 20104
et seq., and excepting those disputes where an imminent
threat to public health or safety, requires immediate
judicial action.
(2) Initial Meeting. As a first step, any party may call a
special meeting to initially resolve a dispute. The
initial meeting shall be held within three (3) working
days after delivery of a written request for such a
meeting. The written request shall contain a statement of
the nature of the dispute. The meeting shall be attended
by the authorized representatives of the Agency, ENCSD and
CWS. Disclosures made by the parties during such meetings
shall be protected as discussions for the resolution of a
disputed claim under the California Evidence Code.
(3) Mediation. If the dispute has not been resolved within
five (5) working days after the conclusion of the initial
meeting, any party may initiate mediation by written
notice to the others. All parties shall attend and
participate in the mediation that shall be non-binding and
without prejudice. The parties shall first attempt to
agree upon a mediator. If agreement cannot be reached on
selection of a mediator, the parties shall attempt to
agree upon a mediation entity, e.g. AAA, JAMS, etc., to
appoint a mediator. If agreement cannot be reached, the
parties shall petition the Kern County Superior Court for
appointment of a mediator. Costs of mediation shall be
borne equally by each party.
38
(4) Failure of Mediation. If mediation fails to resolve the
dispute within 30 days the parties are free to pursue
other legal remedies.
IN WITNESS WHERE OF, the parties hereto have executed this contract on the
______ day of 2001.
BY: /s/ Peter Frick BY: /s/ Robert Guzzetta
-------------------------------- ------------------------------
Peter Frick Robert Guzzetta
President, Board of Directors Vice President, Engineering/
Kern County Water Agency Water Quality
California Water Service Company
BY: /s/ Joe Johnson
--------------------------------
Joe Johnson
President, Board of Directors
East Niles Community Services District
ATTEST:
BY: /s/ Pam Bosworth BY: /s/ Paul Ekstrom
-------------------------------- ------------------------------
Secretary Paul Ekstrom
Kern County Water Agency Secretary
P.O. Box 58 California Water Service Group
Bakersfield, California 93302
BY: /s/ Kelly K. Ulrich
--------------------------------
Kelly K. Ulrich, Manager and Secretary
East Niles Community Services District
P.O. Box 6038
Bakersfield, CA 93386
39