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HomeMy WebLinkAbout08/24/05 City of Bakersfield Water Board Special I~leeting of ~ugust 24, 2005 Water Resources File Packet B A K E R S F I E L D WATER BOARD David Couch, Chair Harold Hanson, Vice Chair Zack Scrivner NOTICE AND AGENDA NOTICE IS HEREBY GIVEN that the City of Bakersfield Water Board will hold a special meeting as follows: CITY OF BAKERSFIELD WATER BOARD SPECIAL MEETING Wednesday, August 24, 2005 - 4:00 p.m. Water Resources Building Conference Room 1000 Buena Vista Road, Bakersfield, CA 93311 1. CALL MEETING TO ORDER 2. ROLL CALL 3. MINUTES A. Minutes of the July 13, 2005 meeting for approval - For Board Review and Action 4. PUBLIC STATEMENTS 5. KERN RIVER LEVEE DISTRICT A. No Business 6. REPORTS A. Kern River Operations Report - For Board Information 7. OLD BUSINESS A. Agreement with Kern County Water Agency for a Water Supply (Northwest Feeder Pipeline Project) - For Board Approval and Recommendation to City Council B. License Agreement with Kern County Water Agency - For Board Approval and Recommendation to City Council WATER BOARD AGENDA PAGE 2 August 24, 2005 8. NEW BUSINESS A. Ditch Eradication and Pipeline Easement Agreement with Pavletich Electric and Communications Inc. - For Board Approval and Recommendation to City Council B. Water Service Agreement with Kern River Valley Cemetery District - For Board Approval and Recommendation to City Council C. Resolution Supporting The Historic Operation of Friant Dam in Meeting Water Supply Needs - For Board Review and Approval D. Water Supply Assessment for Old River Ranch Development Project - For Board Review and Action E. Domestic Water Availability Fees per Municipal Code 14.04.120 - For Board Information 9. MISCELLANEOUS 10. WATER BOARD STATEMENTS 11. CLOSED SESSION None 12. ADJOURNMENT Florn Core Water Resources Manager POSTED: August 19~ 2005 S:\WB MINUTES 2005\WBAGENDAAugust 2405.doc Water Board Meeting August 24, 2005 3. MINUTES A. Minutes of the July 13, 2005 meeting for approval - For Board Review and Action MINUTES OF THE SPECIAL MEETING OF THE WATER BOARD - CITY OF BAKERSFIELD Wednesday, July 13, 2005 - 12:00 p.m. (Noon) Water Resources Building Conference Room 1000 Buena Vista Road, Bakersfield, CA 93311 1. CALL MEETING TO ORDER The meeting was called to order by Chairman Couch at 12:04 p.m. 2. ROLL CALL Present: Chairman Couch, Members Hanson, Scrivner Absent: None 3. MINUTES A. Minutes of the regular meeting of May 18, 2005 for approval. Motion by Hanson to approve the minutes. APPROVED, ALL A YES 4. PUBLIC STATEMENTS None. 5. KERN RIVER LEVEE DISTRICT A. Proposed Kern River Levee Extension for West Ming Specific Plan Project. Mark Lambert, Water Resources Superintendent, gave a brief update. No action taken. 6. REPORTS A. Kern River Operations Report. Steve Lafond, Hydrographic Supervisor, gave a brief update. No action taken. 7. OLD BUSINESS A. Northwest Feeder Pipeline Project with Kern County Water Agency. FIorn Core, Water Resources Manager, stated staff received the latest draft of the contract with the Kern County Water Agency for additional water supply for the Northwest Bakersfield area on Monday. Staff will review the contract and bring it to the Water Board for consideration at the next meeting. No action taken. Bakersfield, California, July 13, 2005 - Page 2 =! 7. OLD BUSINESS continued B. Kern Fan Power Project and PG& E Settlement Distribution. ":' Florn Core, Water Resources Manager, gave a brief update. No action taken.. ,... 8. NEW BUSINESS A. Kern County Water Agency Banking Property Sphere of Influence. Eric Averett, KCWA, Improvement District No. 4 Manager, answered questions from the Water Board members. Chairman Couch requested the City Attorney prepare an MOU for the Sphere of Influence and authorized staff to forward to the City Council for consideration. APPROVED, ALL A YES B. Water Board Report No. 01-05 Regarding the Adequacy of City Water Supplies and I.~ Strategic Plan to Meet Future Water Needs. FIorn Core, Water Resources Manager, stated this is a response to a Council Referral by Councilmember Maggard. Staff has taken the conservative approach on '... the water supply availability for the entire amended Sphere of Influence area, allowing room for growth. Mark Lambert, Water Resources Superintendent, briefed the Board on the water supply study and displayed a map of proposed areas of growth. ... Motion by Hanson to accept Report No. 01-05 and forward to the City Council for consideration. APPROVED, ALL A YES ' C. Principles for Letter of Intent between Castle & Cooke, Bolthouse Properties, Kern ~" County Water Agency and City. " FIorn Core, Water Resources Manager, gave a brief update. No Action Taken. ~... 9. MISCELLANEOUS '~'~. None. ,'-.. 10. WATER BOARD STATEMENTS · None. ". 11. CLOSED SESSION -!.i Motion by Hanson to recess to Closed Session at 12:32 p.m. APPROVED, ALL A YES · A. Conference with Legal Counsel - Existing Litigation ':' Closed Session pursuant subdivision (a) of Government Code section 54956.9 -~. North Kern Water Storage District v. Kern Delta Water District - Tulare · .'.. County Superior Court Case No. 96-172919 Bakersfield, California, July 13, 2005 - Page 3 1 1. CLOSED SESSION continued Motion by Couch to adjourn from Closed Session at 1:15 p.m. APPROVED, ALL A YES Chairperson Couch stated there was no reportable action in Closed Session. 12. ADJOURNMENT ...., Motion by Couch to adjourn the meeting at 1:15 p.m. David Couch, Chairman Bobbie Zaragoza, Secretary City of Bakersfield Water Board City of Bakersfield Water Board Water Board Meeting August 24, 2005 6. REPORTS A. Kern River Operations Report - For Board Information KERN RIVER NATURAL FLOW, REGULATED FLOW, & ISABELLA RESERVOIR STORAGE 2004 - 2005 WATER YEAR 7500 Ft.) ooo ' w--- ' C) O0 ~ ~ Ft.) 6500-:-. ..... ~ .... :--. ..... . .......... .--. ..... :~- .... ~~~i-,,~,,,., - - · ' ~ ~ ~ -: 500,000 6000 ~ " ' Natural Flow " ............... ................................... /~ -~ ) 5500 ' ' 5000 " - ................ ~ ........ -. 2004-2005 ' 4500 , ,, 4ooo ~ -~'~- , I 300,000 3500 ........ _ _ 3000 .... :- - - -~ 2500 ' 2000 ~ -" ...... .T ~ ~. ~ ,. ':' ", ~ ~ : :' 100,000 10~ .. ... ~- -~?- ~:~, - ';j['Regulated Flow -. 500 " " _ ................................................. 50,000 0 ': 0 Oct-04 NOV-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 8-17~5 ISABELLA RESERVOIR DALLY OPERATIONS REPORT (All readings are for date of report (WE DN ESDAY) , except as noted.., cfs in italics) Date of Report: August 17, 2005 ISABELLA RESERVOIR I 2589.69 Lake Elevation (ft.) 400836 Storage (AcFt) - 3010 Change (AcFt) 763 Inflow to Isabella (cfs) 2 568075 Storage Capacity 71% % of Capacity 224231 Normal Storage 179% % of Normal Storage For this Date 3 9709 Average Lake Area (Acres) 27521 Inflow (Month AcFt) 80454 Outflow (Month AcFt) 4 726 North Fork Mean 689 North Fork @ 0600 Hours 1046073 Accumulative Inflow (2005 Water Year) 5 2198 Mean Outflow 400 Borel Canal 1798 Main Dam Outlet 706565 Accum. Outflow (WY) 6 2135 Outflow @ 0600 399 Borel Canal @ 0600 Hours 1736 Main Dam Outlet @ 0600 Hours Hours 7 83 Lake Evap. (cfs) 0.25 Inches Evap. for 24 Hours 4774 Lake Evap. (Month AcFt to Date) 8 0 Spillway Discharge for 24 Hours 65 South Fork near Onyx @ 0600 Hours PRECIPITATION AND TEMPERATURE 9 0.02 Inches of Precipitation at Isabella for 24 Hours 0.85 Inches of Precipitation at Isabella for Month 10 16.41 Seasonal Precip. Isabella 9.90 Normal for 166% Isabella Precip. (Season: Oct 1 through Sep 30) this Date % of Normal 0.00 Inches of Precipitation at Pascoe for 24 Hours 0.00 Inches of Precipitation at Pascoe for Month 12 51.40 Seasonal Precip. Pascoe 35.09 Normal for 146% Pascoe Precip. this Date % of Normal 13 0.0 Upper Tyndall Creek 0.0 Pascoe 0.0 Wet Meadow 14 89 Isabella Maximum Temperature 0.25 Isabella Max. Precip. on Record For this Date 1977 Year of Occurrence 15 67 Isabella Minimum Temperature 73 24 Hour Wind Movement (Miles) NATURAL RIVER FLOW 16 813 Natural Flow (cfs) 29644 Natural Flow (Month to Date) 787064 2005 Apr-Jul Runoff 17 480 Mean Flow 169% Natural Flow 327 Median Flow 249% Natural Flow For this Date in % of Mean For this Date in % of Median 18 2845 Max. on Record 90 Min. on Record 1075951 Accum. Natural Flow (Water Year) 19 1983 Year of Occurrence 1934 Year of Occurrence 20 2212 First Point Flow 82577 First Point (Month to Date) 736538 Accum. First Point (Water Year) KERN RIVER FACTS & FIGURES: ~ · periodofAugust15-16,2005, heavythunderstormsproduced.85"ofprecipitation ~ ~ ~ ~ ~ s F ] E Dam headquarters. This rare and unusual rainfall event contributed to the fifth highest August precipitation total at Lake Isabella over the past 54 years. To illustrate the Produced by City of Bakersfield significance of this event, consider the fact that the August 2005 rainfall total (to date) exceeds Water Resources 36 of the last 54 monthly precipitation amounts recorded for April. (661) 326-3715 Water Board Meeting August 24, 2005 7. OLD BUSINESS A. Agreement with Kern County Water Agency for a Water Supply (Northwest Feeder Pipeline Project) - For Board Approval and Recommendation to City Council WATER BOARD AGENDA ITEM REPORT I MEETING DATE August 24, 2005 AGENDA SECTION: Old Business ITEM: 7.A. TO: Chairman o~nd Members of the Water Board FROM: Florn Cor'Ej-Wat"er Resources Manager DATE: August 18, 2005 SUBJECT: Agreement with the Kern County Water Agency for a Water Supply (Northwest Feeder Pipeline Project). (Ward 4) RECOMMENDATION: Water Board review and recommendation to City Council for approval BACKGROUND: The recent rapid growth trends within the City's Domestic Water System, loss of water well production due to water quality standards and the dramatically increased cost to complete water wells have heightened the need to secure supplemental water supplies and associated conveyance facilities. This agreement is to participate in the Kern County Water Agency's Improvement District #4 (ID#4) Treatment Plant Capacity Expansion and Northwest Feeder Pipeline Project. The first phase of the project will construct a pipeline to convey water to areas of our system's highest immediate need and will result in an additional treated supply of 6,500 acre-feet per year. The second phase is the expansion of the existing ID#4 treatment plant. The City's Domestic Water System currently relies solely on groundwater wells as its source of supply. Supplementing the current system with a firm surface water treatment plant delivery will increase the diversity and efficiency of the system. Wells can be shut off during non-peak demand periods resulting in higher groundwater pumping elevations which reduce energy costs. The cost to drill new wells is constantly increasing due to drilling costs, more stringent water quality requirements, groundwater quality problems and property values. The annual costs associated with procuring this additional conveyance facility and water supply is summarized in Table 1 while the cost to drill a groundwater well is listed in Table 2. Table 1 ANNUAL SUPPLEMENTAL TREATED WATER SUPPLY COSTS Annual Supply (AcFt) Annual Cost Cost/AcFt Treatment $884,000 6,500 $136 Capital $817,520 6,500 $126 Subtotal $1,701,520 6,500 $262 Power :. $32 Operations & Maintenance ' $10 Total ' :. 6,500 $304 WATER BOARD AGENDA ITEM REPORT Page 2 The average well in the system produces 500 acre-feet per year and has a 20 year life. Table 2 ANNUAL WELL WATER SUPPLY COSTS Annual Cost/AcFt Capital (wells) $100 Power $75 Pump Tax $30 Conveyance Facilities $25 Operations & Maintenance $10 Total $240 The additional cost for the new supplemental supply compared to that of well production appears high at first, but there are other very important considerations. These include: the cost incurred to replace a well that no longer meets water quality standards and is abandoned; replacing an abandoned well that no longer meets water quality standards in an area that is fully developed (demolish a house(s) to property); there is no guarantee in certain areas of the water service area that an acceptable quail' will be found; existing wells are vulnerable to detrimental water quality changes; and the added security of having a more diversified and backstopped supply system. The water supplied from this agreement will be at a relatively stable long-term price, while the costs to drill and complete wells in the future will most likely continue rising. The northwest feeder pipeline is scheduled to be completed December 2006 and the treatment plant expansion in the fall of 2008. The capital component of the annual cost will be approximately 65% less than what is listed in Table I until the treatment plant expansion portion of the project is started about a year from now. The capital component is made up of 35% northwest pipeline and 65% treatment plant expansion. There will be sufficient capacity in the current plant to deliver the 6,500 acre-feet into the City's system as soon as the pipeline is completed, in part due to California Water Service Company (Cai Water) allowing us to use a portion of their capacity and the City's proportionate share of the un-contracted portion of the current treatment plant capacity of 12,500 acre-feet per year. The existing treatment plant has a contractually limited capacity of 25,000 acre-feet per year but has the ability to process up to 37,500 acre-feet. The treatment plant expansion project will increase the plant capacity to 72 million gallons per day (mgd) or approximately 60,000 acre-feet per year. The northwest pipeline will have a total capacity of 32 mgd of which the City's share is 6 mgd, Cai Water will have 15 mgd and ID#4's is 11 mgd. ID#4's share is the oversizing of the pipeline to allow for a future expanded take by the City and/or Cai Water. 8/18/2005 1:13 PM S:~005 ADMIN REPORTS\WBAug24.CS.doc AGREEMENT BETWEEN KERN COUNTY WATER AGENCY AND THE CITY OF BAKERSFIELD FOR A WATER SUPPLY This agreement made this __ day of July, 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 City of · Bakersfield, a charter city, duly organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as "Purveyor": WI.TNESSETH- 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; NOW THEREFORE, IT IS HEREBY MUTUALLY AGREED by the parties hereto as follows: Article 1. Definitions. When used in this Agreement, the following terms shall have the meanings hereinafter set forth: ~', (A) "Agency Act" shall mean the Kem 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, construdtion 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 t° 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 subsequ.ent years as required to finance the Expansion project. (G) "Cross Valley Canal"' shall mean the concrete lined canal approximately 17 miles in length extending fi.om 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). 4 (J) "Enterprise" means the Purveyor's water system, including all facilities, works, properties and structures of the Purveyor 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. Gamett 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. (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 5 99, West's Annotated California Water Code) and resolutions of the Kem 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 6 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.' (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. Gamett 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 ra~es, 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. Tenn. 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. Article 3. Option for Continued Service. 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. 9 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. I:: (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 fiv~e (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. (3) Cross Valley Canal Reach 3 which begins at the terminus of Reach 2 and extends approximately two and three-quarters (2 3A) 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-Kem 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. Gamett Water Purification Plant approximately 860 feet upstream of Cawelo Water District's Pump Station "A." 11 ' (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. Gamett 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. :i (7) The East Pipeline and associated pumping plants and delivery structures for the conveyanc/~ 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 ~.:i 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. Gamett 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. (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 r¢ference 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. (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: 13 I'.' (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), Kem-Tulare Water i.' 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, Kem-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. (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 .:i... 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 14 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. 15 (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 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. (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 17 i 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. (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. (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, or by long-term financing for which the Purveyor shall have responsibility in like amount for repayment. Funds used by the PurveYOr for construction of pump stations, pipelines and turnouts to accommodate the Expansion Project may be debt proceeds of an appropriate type such as revenue bond or certificates of participation, provided, that the lien on Purveyor Revenues to repay such obligations shall not be senior to any lien on such Purveyor Revenues to pay the Capital Facilities Charge hereunder. 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 19 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 sucti 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 constrdcted with Capacity for the Purveyor of 9.3 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 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. (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 Purvey6r'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 21 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 iri 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. 22 (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. (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. 23 (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. 24 (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. (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 25 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 26 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. Gamett Water Purification Plant for treatment under the following terms: (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. 27 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. Thc Statb of California or the Agency may temporarily discontinue or reduce the amount of water to be furnished the Purveyor tbr 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 28 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 bome by Purveyor in accord with a supplementary written agreement between Agency and Purveyor. (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 3O 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 acrerfoot 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 31 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 surcharg4s pursuant to subdivision (D) of this Article. (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, ibr 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 32 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 33 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. Article 16. Payrnent 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 34 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 Char~es 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 35 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. (C) Pa_wnent 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 hmit 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 37 any water distributor in Kem 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: (1) Payment for the additional Capacity provided to Purveyor shall be made by assumption by Purveybr 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 38 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. 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 39 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. 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) The Purveyor will fix, prescribe and collect rates, fees and charges 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: 40 (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 41 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 expanslon 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, 42 the request .for a boundary expansion shall be paid for by the requesting Customer. Any request forboundary 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. Article 26. Covenants Relating to Bond Issuance. (A) The Purveyor will not enter into any other contract concerning the water delivered pursuant to this Agreement or take any other action that would adversely affect the exclusion from gross income of the interest paid on any debt obligations issued by the Agency to finance the Original Project or the Expansion PrOject (or, if permitted by the' Agency, will pay the cost of the remedial action necessary to preserve such exclusion from gross income). (B) The Purveyor hereby covenants that, except as otherwise disclosed to the Agency, the payment of not more than ten percent (10%) of the principal or ten percent (10%) of the interest due on the debt obligations issued for the Expansion Project during the term thereof is or will be, under the terms of the debt obligations or any underlying arrangement, directly or indirectly, secured by any interest in property used or to be used for a Private Business Use or in payments in respect of property used or to be used for a Private Business Use, or is or will be derived from payments, whether or not to the Agency, in respect of property or borrowed money used or to be used for a Private Business Use. "Private Business Use" means use directly or indirectly in a trade or 43 business carded on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a governmental unit and use by a nongovernmental unit as a member of the general public. (C) Fu.rthermore, 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 aud 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 shaI1 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. 44 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. 45 Article 31. Waiver of Rights. Any waiver at any time by either party hereto of its fights 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. 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 46 shall assume all rights and obligations of this Agreement and the assignor shall be relieved of all rights and obligations. ~Ilae 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 ofthe 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 mid official records of the Agency insofar as the same pertain to the matters and things provided for in this Agreement, with the fight 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. 47 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. 48 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 redommended 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 49 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 pro. ject facilities. 'Voting on the Advisory Committee is on the basis of one (1) person, one (I) 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 conceming 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. INTENTIONALLY BLANK Article 40. Inte~ation. 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 50 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. 51 .. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first-above written. "Purveyor" "Agency" CITY OF BAKERSFIELD KERN COUNTY WATER AGENCY By: By:. HARVEY L. HALL Mayor Title: President ATTEST: APPROVED AS TO FORM: VIRGINIA GENNARO By:. City Attorney Title: Secretary By: ALLEN SHAW Deputy City Attorney APPROVED AS TO CONTENT: WATER RESOURCES DEPARTMENT By:. FLORN CORE Water Resources Manager COUNTERSIGNED: By: NELSON SMITH Finance Director Attachments: EXHIBITS "A" THROUGH "F" Exhibit A Treated Water Capacity Expansion Project Cost Allocation Summary 1 I 2 i 3 I 4 i 5 i 6 7 I 8 Treated Water Capacity Expansion Participation Summary ~ California I ! ' I KCWA I , ! Water i City of ~ East Niles . North of the ~,lmpmvement Project ~ Service ~ Bakersfield ; CSD ! River MWD i Distdct No. 4 Henry C. Garnett WPP Expansion i x i x x i x North Feeder Expansion Project I i East Feeder Expansion Project i i East Feeder Oswell Bypass Project i x i ; x Northwest Feeder Project x i x i i I x Treated Water Production Allocation Summary Existing I lncrementaI t Existing i Incremental i Total Avg of Ratio Annual I IAnnual ITotalAnnual] Peaking ' Peaking I Peaking i Capacity& Entitlement Project Participant EntitlementlEntitlementi i Capacity '. Capacity I Capacity Entitlement~ -- (AF/YR) ] (AF/YR)i (AF/YR) j (MGD) ~ (MGD) ! (MGD) (%) (~'li-f0~r~ia-~aterService 11~I 9,000 i 20,500 ] 15.0 ~ 15.0 ~ 30.0 35.4% City of Bakersfield 0 ~ 6,500 6,500 i 0.0 ., 6.0 i 6.0 ! 19.3% East Niles CSD 5,000 6,000 11,000 i North of the River MWD 8,500 i 6,500 15,000 i 11.4 10.7 '= 22.1 ~ 25.4%~ Improvement District No. 4 ! 0 i 0 ~ 0.0 0.0 ~ 0.0 ' 0.0% 2 ,000 i 28,000 s3,000 i 33.1 i 38.8 i 71.9 100.0% Distribution Capacity Allocation Summary North North Feeder Feeder i East Feeder ! NW Feeder Pipeline i Pipeline East Pipelinei Pipeline NW Pipeline ~ Pipeline Capacity Capacity Capacity i Capacity Capacity I Capacity Project Participant Allocation Allocation Allocation i Allocation Allocation Allocation ................ (%) ~ (MGD) ~ (%) ! (MGD) (%) i .... (_M_~_D)_.__ 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% i 0.0 0.0% I 0,0 Improvement Distdct No, 4 0,0% 0,0 0,0% i 0,0 34,4% 11,0 100.0% 22.1 100.0% ', 28.8 100.0% 32.0 Footnotes: 1 ) Project participant Dement allocation does not directly compare to dept service percent due to different interest rates for taxable and nontaxable interest rates. ID4 2005-2006 Cashflow-6-02-05.xls, Exhibit A 7111/2005 Exhibit B ID4 Banking Assets Summary Table I I i Pioneer i !ID4 Banking J j ID4 In District ~ KemWater~ , i Bank i Pr°ject~ i Wells ~ Wells Total ' I 450 000~ i 146'000! I 0i Total Recharge Capacity , I i 596,000 Ac-FtJYr 230 000'" :~ 12,000 !i 36,000 Total Recovery Capacity , 99'000i i i 377,000 Ac-Ft/Yr I ~ i 100.0% 9.6% . ID4 Percent Interest ! 10'0% :~ 100.0%I rD4 Recovery Capacity ' I 9,9001 I 12,0001 ', 36,000i i 80,026 Ac-Ft/Yr Footnotes: 1) Includes City of Bakersfield's 2800 Acre Recharge Facility IO4 2005-2006 Cashflow-5-02-O5,xls, Exhibit B 7/11/2005 Exhibit C Transmission Pipeline and Turnout Summary Table North Feeder Pipeline ~ Transmission Pipeline Entitlement Transmission Pipeline Turnout Summary ..... i ~-ANFO/yRR~--~-~ Pipeline ~-m~ ! ~Owne Station Diameter i_Cross Street Location .... r__ ........ ~+~ 14 Belle Avenue ~ NOR H ........ ~-~0-{~0-- t --~- '- i ~ 55+51 14 Woodrow Avenue NOR Total Entitlement 15,000 80+20 12 iDiane Ddve NOR  95+03 12 !Highland Francis Alley NOR 118+53 12 i Universe Avenue NOR Transmission Pipeline Capacity -JM"------i-- ~1~ G-~)-- ¥- ~-~}22.1 'l~i'~ ~,-,i .............. .................. 34.2 ~(-~ ~ ~- (tvi~-E~) (---~-~- - II _~{ --(CFS)'-- 155+22 i; 20 !llSeventhl Standard Road (Reservoir) NOR IITotal Capa'city 22.1 34.2 East Feeder Pipeline Transmission Pipeline Entitlement Transmission Pipeline Tumout Summary .... .................... ~- ~~-J~T-Pe~-e-~-'~'-u~-°~ [Cross Street Location CWS [ ENCSD Station Diameter Owner (AF/YR) _~ (AF/YR) '~ (AF/YR) --~-~) - 8 Chester Avenue ~---~-- ........... i-1-,,~-00---- i 11,00~) ........ ~ ........~ ............. 103+84 16 !Union Avenue CWS Total Entitlement 22,500 154+33 16 ! King Street CWS 178+33 12 I Berger Street CWS  Transmission Pipeline Capacity 237+44 15 IWenatchee Avenue CWS CWS --- T----~N~-~-D----- ~ --' 319+00 16 [Fairfax Avenue (Reservoir) ENCSD 323+70 II (MGD)~! (CFS) (MGD) ~'C--~)) ~'~GD) i-' ~(~S-)----! 12 iCountryClub ENCSD -~.~---TT-~3.2 i 13-8 I 21.4 1 ..... I oral Capacity 28.8 44.6II !353+70 16 iCollege Avenue ENCSD  353+80 16 'College Avenue (Reservoir) ENCSD Northwest Feeder Pipeline Transmission Pipeline Entlt!ement Transmission Pipeline Turnout Su~,Tary I ~ P~pehne I Turn°ut I CWS COB ~ ....... ID4 ........ Station : Diameter I Cross Street Location ~__O?ner __ (AF/YR)_ (AF/YR) ~__ (AF/YR) ~-.~'~-'~---~ .... ~ ~ CWS 9,000 6,500 I ...... -0- ......... 61+95 14 Standard Street COB Total Entitlement 15,500 121 +00 ' 14 Mohawk Street CWS 121+50 !6 Mohawk Street COB Transrnisslon Pipeline Capacity 149+50 16 Fruitvale Avenue CWS 16 Alken Street CWS CWS I~ CWS / COB ~ ID4 / 165+90 ~) _~(CFS (aGO)-]- (CFS) ~__ (M__G.D)___.~[_ _(CI~S_ 200+47 16 Patton Way ~ 15.0--i~23.2 '~-~.0 ! 9.3 [ 11.0/ 17.0~ 300+36 16 aeanyAvenue COB ITotal Capacity 32.0 49.5 1300+36 16 Meany Avenue CWS F~tnotes: 1) ID4 NNV Feeder Pipeline entitlement to be determined by 11:)4 at a later date. 7/11/2005 ID4 2005-2006 Cashflow-6-02-O5.xls, Exhibit C Exhibit D Project Participant Buildout Schedule I 2 3 4 5 6 7 ~ Califomia i Cityof i East Niles North of the Improvement Fiscal Year Water Serv ce Bakersfield ! CSD i River MWD i District No. 4 ' Total Entitlement -AF/YR Total Annual I 20,500 i Entitlement I 6,500! 11,000~ 15,000 0 53,00( % of EntitlementI 38.7% 12.3% ! 20.8% i 28.3% 0.0% 100.0% Capacity - MGD Total Peaking ! Capacity 30.0 6.0 ! 13.8 i 22.1 ~ 0.0 71.9 % of Capacity , 41.7.% 8.3% i 19.2% i 30.7%t 0.0% 100.0% Delivery Schedule -AF/YR 2004-05 11,5001 6,500 i 6,0001 8,5001 ~ 32,500 2005-06 12,500 6,500 ! 6,000 ! 10,000 t 35,000 2006-07 13,000 6,5001 7,5001 10,100 0~ 37,100 2007-08 I 15,500 6,500 ! 7,9501 10,200 / 0 40,150 2008-09I 16,000i 6,500! 8,4001 10,300; 0 41,200 2009-10 ;! 16,500 6,500;! 8,850 i 10,400 0 42.250 2010-11 t 17,000 6,500i 9,300! 10,500! 0 43,300 2011-12 17,500 6,500 9,750 i 10,600' 0 44,350 2012-13 18,000 '6,5001 10,200! 10,700 0 45,40(; 2013-14 t 18,500 6,500i 11,0001 10,800 0 46,80(; 2014-15 19.000! 6.5001 11.000i 10.900 0 47.400 · . 2015-16 , 19,500 6,500i 11,0001 11,000 0= 48,000 2016-17 20,000. 6,5001 11,0001 11,100 0 48,600 2017-18 I 20'5001 6,500! 11,0001 11,200 0 49,200 2018-19 ' 20,500! 6,500j 11,000i 11,3001 0 49,300 2019-20 20,500 6,500 j 11 0001 11,400 0 49,400 2020-21 20,500 6,500! 11,0001 11,500i 0 49,500 , I 11.600 i 0 49.600 2021-22 : 20.500 6.5001 11.000 2022-23 20,500 6,500 11,000i 11,800! 0 49,800 2023-24 i 20,500 6,500 11,00011 12,000 0 50,000 2024-25 20,500 6,500 11,000 t 12,250 0 50,250 2025-26 20,500 6,500 11,000i 12,500 0 50,500 2026-27 20,500 6,500 11,000 i 12,750 0 50,750 2027-28 I 20,500 6,500! 11,000!I 13,000 0 51,000 2028-29 ' 20,500 6,500i 11,000! 13,250 0 51,250. 2029-30 20,500 6,500 11,000 ~ 13,500 0 51,50C 2030-31 11,000 ! 13,750 0 51,75(; 20,500 6,500 . 2031-32 20,500[ 6,500! 11,0001 14,000 0 52,00(] 2032-33 20 500t 6,5001 11,000i 14,250 0 52,250 2033-34 I 20'5001 6,5001 11,000i 14,500 0 52,500 2034-35 i 201500 6,5001 11,000i 15,000 0 53,000 ID4 2005-2006 Cashflow-6-02-O5.xls, Exhibit D 7/11/2005 Exhibit E Treated Water Capacity Expansion ProJect Cost Allocation Summary I 2 I 3 4 I 5 i 6 ~ 7 8 9 10 Treated Water Capacity Expansion Cost Summary i I Feasibility Estimated ' Total iAdministrationl Engineering IC°nstructi°n Estimated ~__&_[inan_cingS I Cost' Cost9 Cost Project ................... ~ ($) ~_~_ ($) ($) ($) Henry C. Garnett WPP Expansion (72 MGD) i ~i~001 2,050,000 35,638,500 38,323,500 North Feeder Expansion Project~ 698,625! 3,378,125 4,076,750 East Feeder Expansion Project ; i 660,825 3,186,625 3,847,450 East Feeder Oswell Bypass Project 625,0001 625,000 Northwest Feeder Project 635,000 803,900 14,697,000 15,500,900 Total 4,213,350 57,525,250 62,373,600 Treated Water Expansion Cost Allocation Summary4 [ ' ~ ; Total Peaking Existing I Incremental Total i Existing i Incremental Avg of Ratio HCGWPP 'Annual i Annual I Annual i Peaking; Peaking Capacity & Cost Project Participant Entitlement Entitlement Entitlement:. Capacity: Capacity i Capacity Entitlements Allocation -- (AFAR) ......... _ (%) (*) California Water Service 11,500! 9,000 i ~0,500---I ;1~..(~ : ~5~ ---- 35.4% 13,34~2,229 City of Bakersfield I 0 6,500 ~i 6,500 0.0 6.0 I 6.0 19.3% 7,288,617 East Niles CSD t 5,000 6,000 i 11,000 = 6.7 7.1 13.8 19.9% 7,486,357 North of the RiverMWD~t 8,500 i 6,500 I 15,000 ' 11.4 10.7 ~ 22.1 25.4%1 9,571,297 Improvement District No. 4 Total 0 II 0 ! 0 ' 0.0 0.0 I 0.0 0.0% 635,000 25,000i 28,000 i 53,000 ! 33.1 ; 38.8, 7t.9 100.0% 38,323,500 Distribution Cost Allocation Summary North North I North East ~ Feeder Feeder i Feeder East Feeder . NW Feeder Pipeline Pipeline I Pipeline Pipeline ' Pipeline ~ East Feeder NW Pipeline Pipeline NW Feeder Capacity Capacity I Cost Capacity ~ Capacity i Pipeline Cost Capacity Capacity i Pipeline Cost ~:oj_e_c.t P~a~_l_c_i_P_ant~___ Allocation2 Allocation ! Allocation Allocation i AIlocation~ Allocation? Allocation3 Allocation r Allocatione ' (MGD) ($) .................... (%) i ($) i (%) California Water Service -- 0.0%0.0~. ' .... ~ 0.0% ~ 15.0 ~'- '43~)2~ 46.9% ..... ~'~0 .... ,'--~i~-5~0-0~ City of Bakersfield 0.0% 0.0 ; 0 0.0% ! 0.0 : 0 18.8% 6.0 I 3,902,000 East NilesCSD 0.0% 0.0 0 100,0% ; 13.8 i 3,379,597 0.0% 0.0 i 0 North of the River MWD 100.0% 22.1, 3,378,125 0.0% ;' 0.0 i 0 0.0% 0.0 0 Improvement District No. 4 0.0% 0.0 i 698,625 0.0% i 0.0 i 660,825 34.4% 11.0 1,843,900 100.0% 22.1 i 4,076,750 100.0% ;, 28.8 !4,472,450.0 100.0% 32.0 . 15,500,900 Project Participant Total Capital Project Cost I Total Project P-!:°jec---- t- .-P-a-rticlPant .......................... i Cost .............. i ($) California Water Service 23,529,256 City of Bakersfield 11,190,617 East Niles CSDI 10,865,954 North of the River MWD I 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) Inc~ucles 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 IDa. payment of 100% NW Feeder dos~gn cesL 7) Includes Oswell Bypass Project Cost not funded through the $1,200,000 DWR State Revolving Fund Loan. 8) Prciect participant percent allocation does not directly compare to depot sen/ica percent due to different interest rates for taxable and nontaxable interest rates. 9) Construction costs include 35% contingency. ID42005-2006 Cashflow-6-02-O5.xls, Exhibit E 7/11/2005 Exhibit F Treated Water Capacity Expansion Project Billing Summary Project Participant Billing Schedule Summary Frequency i Date Due1 =ower Monthly I January 30 Days i through ~ December Operation & Maintenance Quarterly i July 1 30 Days i October 1 i January 1 Treated Water Charge Semiannually i July 10 30 Days I January 10 Capital Fadlities Charge Semiannually ! July 10 30 Days ! January 10 Project Participant Billing Cost Summary Operation & Treated Water I Power Costs Maintenances Charge2 Capital Facilities Charge3 Treatment [ Conveyance Treatment I Total Conveyance Conveyance --requency Monthly Quarterly ~ Semiannually Ii Semiannually California Water Service Actual Actual 1,394,000! 411,448 564,167 975,61.~ City of Bakersfield4 i 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 1.020,0001 119,496 i 355,521. 475,017 Improvement District No. 4 ! I 36,788 :~ 0 36,788 I ! $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 ID4 2005-2006 Cashflow-6-O2-OS.xls, Exhibit F 7/11/2005 AGREEMENT AMONG CALIFOR~N[A WATER SERVICE COMPANY AND EAST NILF. S COM~fUNITY SER'~qCES DISTRICT AND KERN COUNTY WATER AGENCY/IMPROVEMENT DISTRICt NO. 4 For Cons~raetion ami Operation ora California Water Service C°mpany (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 enabie CWS to use the Agency's ea.~l iransm [ssion pipeline at or near the 23 Corner Tank Facili .ty for conveying treated water from CWS' new North East Bakersfield Water Treatment Plan! (NEBWTP) to customers within ~he service areas afCWS and Easl Niles CommuniD' Services Distric~ (hereinafter referred to as WHEREAS, the following benefits expect to be realized as the result of fi~e Conneclion being constructed and operated in the manner set forth in this Agreement: (I) ENCSD will receive an excellent quality of treated Kern River ~'atcr from thc NEBWTP; (2) There will be an increase in treated water supply reliability for all three parties due to the direct conn, e~dion of the NEBWTP and,the Agency's Henry C Gamett waler treatment plant (IlCGWTP) 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 pumping water from the HCGWTP to tl'~e: 23 Comer Tank Facility; (4) lfthe Agency is n:quired and able to deliver ~n additional 3,000 acre-ft:'5 ear of treated water to ENCSD consistent with the ~erms and conditions of' the eximng Treated Water Contracl dated June 13, 1974, including the provisions of Agency Resolution No. 16-71 and the Agreement dated Augusl 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 t'urure expansion, of the NEBWTP if it contracts with CWS to pay fbr its proportional share of capila[, operational and maintenance cost5 of such expansions. WFIEREAS, it is recognized by all parties that this .Agreement does not amend, change, limit. alter or invalidate any of the terms mad conditions of the existing treated Water Contract dated June t 3, 1974, among the Agency, CWS, ENCSD, and other Treated Water Contractors. 'Ilae duties and obligations of each party and respective assignments of treated ~vater as set foah in the Treated Water Contract and any amendments thereto remain in effect after this Agreement is executed and the Connection is consmmed and put into operation. NOW THEREFORE, it is agreed as follows: t The Parties agree that the statements set tbrth in the preceding '%Vhereas" clauSes are true and correct to the best of their knowledge and are being relied upon by thc Parties in entering into this Agreement. The Agency grants permisskm to CWS to construct the Connection from its piping ~'stem to a tie- in with the Agenc)?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-l, A4, B-1 andB-2", attached hereto, subject lo th~ conditions set forth in thc fill!owing sections of this Agreement. 3. ]'his Agreement shall becc~ne effective on the dale signed below, and shall remain in effect throughout the term provided by Articte 2 of the Treated Water Contract dated June 13, 1974. between the Agent35 CWS, and ENCSD and any extensiOns.'amendments, or renegotiations thereto unless all parties mutually agree to earher 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-buil!, drawings and specifications wilt be on permanent file at CWS and copies provided to the Agency and ENCSD. 5. Metering wilt be by an AWWA approved device. Provisions will be made for accommodation of transducers,, telemetry equipment, and the HCGW'I'P SCADA m~mitoring and control system. Records of the daity and accumulated flows will be maintained by both the Agency and CWS. Copies of all flow records will be provided lo ENCSD. Costs incurred tbr meeting the " requirements of this provision sha[t be the responsibility of CWS. 6, The Connection shall be constructed by CWS through force account, and/or licensed contractors. at. the sole cxpen~ve ofCWS, C(mstruction shall be subject to the inspeCtion and approval of the Agency at each stage. CWS shall provide the Age~cy and ENCSD with the schedule of construction and timely updates of' construction pro~P, xess. CWS will obtain an encroachment permit from the Agency prior to commencement of corinth..rion, Any shutdowns of the Agency's east transmission pipeline: tbr purposes of construction of disinfection of the Connection will be peri%treed only a~er prior consent h~s been obtained from ENCSD'andin a manner and under conditions that ~not result m negative or harmftll effect~ on the operation$~ 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 effecls on the operations, finances, and water supply of the Agency's Improvement District No.4, ENCSD and other Treated Water Contractors. Respo~ibilities for operations and maintenance of the Connection by CW$ and related administratiw procedures shall b¢ in accordance with the provisions of the Treat~ Water Contract dated lune 13, 1974. All water delivered to the Connection by CWS from. the N£BWTP shailmeet'alI stat~ of California Department of Health Services potable ~ater quality requirements~ 8. Agency shall have access to the Connection for inspection purp°ses at any time~ Agency shall provide CW$ with advance notice of such inspections to the extent practical. Agency will maintain ownership of tim Connection which subject to final design changes will ge"aeraily consist of the following: __ .' 9. CWS shall defend, indemnify, and hold harm less the Agency and ENCSD, their employees, directors, contractors and agenls, from damages and losses including i'easonable 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 misconduc! in the design construction of, or operation and maintenance of the Connection, or design of the CWS system, '.' and from ~e day to day management and operations of flow through the Connection, to ENCSD. 1'0. Agency shall defend, indemnify and hold harmless CWS and ENCSD, their employees, directors, contractors and'agents from damages and losses including re,~onable.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 . misconduc! in. operational control of the ConnecUon. I I. Dispute Resolution. (1) !_n~.t.~!. Agency, ENCSD, and CWS desire and intend to resolve all disputes or · .. other matters arising out of or i.n connection with this Agreement through reasonable, business like dispute resolution procedures withou! resort to litigation. Accordingl3'? any disputes among the parties shall be resol¥¢d in accordance with this section¥~xcdi3ting those construction disputes resolved according to the requirements oi Public CLontract Code sections ,.0104 et seq., and excepting those disputes where an imminent threat to public: health or safety, requires immediate judicial action. (2.) Initial Mee~!r~g: As a first s~ep, any party may call a special meeting to initially .......... .. resolve, a. dispute, The. initial n~eeting shall l-e held within chit'ce (3) working days after delivery ora written rcquest ~br such a meeting. The wrinen request shall contain, a statement of the nature of the dispute. The meeting sliall be attended by the authorized represematives of {he Agency, ENCSD and CWS. Disclosures made by the panics during such meetings shall be protected as discussions for the resolution ora disputed claim under the California Evidence Code. ~ 9¢5 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 roche 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 medialor. If agreement cannot be reached on selection of a mediator, the par~ies shall attempt to agree u.r~n a mediation entity, e.g. AAA, 3AMS, ete.~ to appoint a mediator. If agreement cannot be reached, the parties shall petition the Kern County Superior Court for appointment ora mediator. Costs of mediation shall be borne equally by each puny. f~ Failure of Mediation. If mediation fails to resolve the dispule within 30.days the ~ parties are free Io pursue other legal remedies. tN W1TNF:SS WHERE Ot-, the parties hereto have exect~ the day of 200 I. · BY: Peter Frick Robert Gurzetta 'President, Board of Directors Vice President, Engineering.~Vater.Quali~ J~ye 3~hn son President. Board of Directors ~E~_[~i!es Community Services District Se~!aD' SecretaD~ Kern County Wa~er Agency California Water Service Company P O. Box 58 Bakersfield, California ~ 3.~02 Kelly K, Ulrich, Manager and Secretary East Niles Community Services District' P,O. Box 6038 Bakersfield, Ca. 93386 ~ M~ 10 05 07: IGa ~ORMb~I] ~G139SSSll P'~ U~ZEN NOR~ OF T~ mYER b~Nl~.~ WA I'ER DISTmO' THE ~4 CO~ WATER AGEN~/ This agreemem entered this ~ day of November, 1 ~6, betw~n the Kern C~nty Wat~ ~e~ C~'), ~d t~ No~ of~e Pd~r Murfi~p:~l Water ¢'NO~)") r~rding ~n~on a~d op~tion of NO~ W,~l ~3 diverge pip~ine ~nn~tion to th~ ~ey 27 inch no~ ~CIT~S ~X~REAS, t~ ~cy, ~ ~ofRs improveme~ di ;taler number 4, O~ and o~at~ a 27' ~m~ w~ ~i~ine ~m its L~tmem plant to p~ons of its ~tMn Improvement Diafict No. 4 ( the '~o~h Pi~iine"); ~~AS. NO~ p~o~ly provid~ additi~ ~ andmg to Agen~ for ~~at of the ~pauity of the No~h Pi~e to ~ow ~r ~t¢~al uti~tion for ~ wat~ ~~AS, NO~MWD ~ a ~sed potable ~t~ ~t ~ ~o~ as which ~ be e~able ofpro~flMg ~le water ~ ~fi~ble qu~ity f~ ~::e wit~ NOB~ ~d Imp~t ~$tfiet No. 4; and ~~, it ia M t~ b~t int~est oftl~ pa~ie~ to tl~ ~ent ~t a eonn~ion ~ ~~ ~m ~e p~po~ NO~ We~ g3 to the 27 inch Ag~ N~h Pip,Me n~ ~1 ~dlow Dr., Oildale~ ~ ~ to allow for the au~en~tioa oCNO~MWD's wat~ 05 07: 1G~ ~ORMUD supply and th~efore help rdieve the peak load on the Ag~ey Improvem~t Dirtier No. 4 water tr~tmcnt pl~t. NOW T~FO~, for the mutual conside~tion fo~o~: !. Agency, for the com~deration hereh s~ NO~MWD to eon~mct ~ pi~tine conn~ion t~m its pro~ NO~t~ Wall ~3 to the A8~ North Pipeline (here[mfi~ accomp~ng easement or fighl~f-way n~r 60'1 Willow Dr., O~date, lc; sho~ on ExMbit "A"; ~g ora Abdc~ fl~g~ outlet att<hed ~ the 27' ~ line v~ (Mcludlng c~k vMve)~ and appropriate m~efing equipm~t; ~me~ng the 2. ~;~ contract shall become e~ ¢~ughout the te~ pro~d~ by ~dde 2 of~e T~ Wat~ Com~ct dat~ June I3, 1974, b~tw~ the Agent, ~d NO~, and any ~ten~o~, ~dea~ta or r~egotiatio~ ~atl~ pl~ ~d s~tio~ ~l be w~ed by Ni)~ for the Coition ~ r~ ~ur~ Agent's fi~t-of-way. R~rd ~wings ~d sp~Catlons ~iB ~: on ~ ~nt ~e.at NO~. 4. M~ng will be ~ in,tine propdI~ m~,. or ~her AWWA approv~ de~. P~si~s will ~ madg for accommo~fion oftran~uce~, t~ eq'~ipment ~d the ~ent pi~t' SCOA modtoring ~d control ~em~ R~rds oft~ lMly ~d a~umul~ fl~s will ~ ~in~n~ by NOP~, Co~s inoa~ed for ~ng t~ r ~uir~t$ oftM~ ~ ~a~ 10 05 o?:l~a ~O~WD 6613958~11 provision shall be the responsibility of NORMWD. 5. Thc Connccaion shall be ~onstm~ed by NOIMM'~fD throtgh fo:rix: account, and/or licensed contractors, at NORMWD's sole exl~cnse. Construction shall b., subject to the inspection a.nd approval of the Agency at each stage. NOR. MV~q.) shall keep Agcnej fully apprised of the schedule of construction. An encroachment per'mit issued by the Agen¢9 will be obtained by NORMWD prior to the comrnencemem of construction The Connection shall bc operated by NOR},'PfiqD c~o az tc riot interfere with thc Agency's treatment plant operations and w:~ter deliveries. All producexl *arater from Well #3 will lneet ali State of California potabIe water quality requirements. 7. Agency shall have access to thc Connection for inspeciion purposes at a,qy time. ^gcney will endeavor to provide NORMWD with advance notice of such inspections to the cxtealt practical. The Agency x,,411 n~,aimain ownership of the Conr~-ction *}p to, but not ha;luding, the isolation valve attached to the flanged outlet, NORM~&~D v~411 maintan ownership from, and including the isolation valve to the ,,veil 8 Unless operation is requested by thc Agency, NORMWD will provide one hour notice to the Agertcy. of its iillcat lo use th~ Conneclion to deliver prodll(.t~d water froln its Well #3 into the Agency lirm. In the eeent of an emergency, notice will b~ giv,-~ ~ as soon as practical. Upon nolice the Agenc':f may deny perreAasi~n in accoedar,:c with paragnqah 9. ifconditlons require the Agmac'ff to shut down Well #3, one hour notice shall 1~ given t nless an emergency exists, in which case notice shall be given as soon as practical. 9. Th~ Connection wiI! not be operated undea- any conditions '~hich are adverse to the operations, finances, and water supply of the Agency and it~ Treated Watir Contractors. MaB 10 05 07: 1Ga HORMWD 6613998911 p.S ~ ~ 10. NOR shall defend, indemnify., and hold harmless the Agency, its employees, d~re~ctors, contracto~ ~ a~ whh res~ to tony d~ms or I~abilitie~ of~i ~nda ~g om o~, or r~ated ~o the con~mc~on reasonable attom~ ~ ~l~m f~, ! 1. In th~ event of dispotes ~tafing to i~s ~r~mcm, t~ pa-ies sMti fi~i mbn~ to m~iation ~ ~ attempt to remlve m~h disputes, t~ such di~ut~ sMl' ~ subject ~o a ~n- , binding ~bit~tinn b~ore.a mmu~ly a~ablc n~trai arbitrator, or if nc a~m~ ~ be ," reac~, before a n~t~ ~itrator se~ct~ by the K~ C~my Superior Coup. Ln t~ ~t of an action aRer arbitntiorg the p~ ~tai~g a r~lt less favo~b[e th~ the result obtMn~ a~itrati~m ~aU b~ the attom~s  ~ X~NE$$ Wt~RE OF, t~ p~ies hereto have ~<utM tMs com~ on ~e _ Kern County Wat~ Agency North of the River I~hnicipal Wat~ District / Do. Cross President, Board of Directors President, Board of Etrectora P.O. Box 58 4~ Bak~. C~ifo~a 93302 ~ak~eld, C~ 93308 Water Board Meeting August 24, 2005 7. OLD BUSINESS continued B. License Agreement with Kern County Water Agency - For Board Approval and Recommendation to City Council DRAFT RECORDING REQUESTED BY AND FOR KERN COUNTY WATER AGENCY 08- 1 5-05 WHEN RECORDED, MAIL TO: KERN COUNTY WATER AGENCY P.O. BOX 58 BAKERSFIELD, CA 93302 LICENSE AGREEMENT Pipelines and Turn-ins to the Kern River;Canal Section 11, T30SR26E, MDB&M:: This Agreement is made and entered into this ~. z.day of :' 2005, by and between the Kern County Water AgencY (hereinafter ca'lied the "Licensee" or "Agency") and the City of Bakersfield (hereinafter called the "Licensor" or "City") for an irrevocable license affecting property described in attached Exhibit A,' incorporated herein by reference as though fully set forth at length.. ':'::RECITALS WHEREAS, Licensee is a political ~:ubdivision of the State of California, with its place of business located at 3200 Rio Mirada Drive, : Bakersfield, California; and WHEREAS, Licen~:a~:~'i~:a;charter cityland muniCiPal corporation organized under the laws of the State :of California! and WHEREAS,.. LicenSor, has: heretofore acquired certain real property in Kern County as the:'i-ight, Of~way 'f0r:.the Kern River Canal, which transports irrigation and water for.groundwateri:'recharge:.between the Kern River near California State University;Bakersfield ahdE.nos Lane;~and WHEREA~ Licenso[iil.'owns a 36-inch diameter reinforced concrete pipeline buried within the::[!g)t-of-way, in and along the Kern River Canal, that is used for the transport of domestib'::Watedand WHEREAS, LiCensee desires to construct, operate and maintain, three groundwater wells on property adjacent to the right-of-way of the Kern River Ganal and to construct, operate and maintain associated turn-in structures within a strip of land 30 feet in width in Section 11, Township 30 South, Range 26 East, MDB&M, along the north side of the Kern River Canal right-of-way, as described in Book 4999, Page 427, Official Records of Kern County, Galifomia; and WHEREAS, Three groundwater well sites and groundwater conveyance elines are the subject of separate easement agreement with the fee owner and ion holder of the property adjacent to the Kern River Ganal, and each'will be Page 1 of 6 .~ constructed within a strip of land in Section 11, Township 30 South, Range 26 East, MDB&M, adjacent to the north side of the Ker. n River Canal, as described in attachment hereto and incorporated herein by reference. WHEREAS, Licensor and Licensee have entered into a long-term agreement (Agreement No. 96-356) that provides for Agency use of the Kern River Canal under certain conditions for the transport of recovered water for the benefit of the Pioneer Project Participants. NOW THEREFORE, in consideration of the foregoing, the mutual promises, covenants, conditions and agreement hereinafter set forth, and. Other good and valuable consideration, the receipt and adequacy of which are hereby?~ck~0wledged, the parties agree as follows: 1. Grant of License. Subject to the terms and conditions provide~f'herein, Lice~'~'or hereby grants to Licensee, its employees, representatives and contractors;';::?..,:non-exclusive license (hereinafter "License") to la~;;-.'~;constrL~ct, operate, maintain, repair, reconstruct and remove a pipeline, not to 'b~Oeed. 1"8"'diameter, fro:m each well for transporting water only, together with appui'tenant and necessary subsurface structures, fittings and other equipment in or under that certain strip of land thirty (30) feet in width lying within sections 11, Township. 30. South, Range 26 East, MDB&M, County of Kern, State ~Sf C~il'ifornia' as de'~(~'~:'ib'ed in attached Exhibit A, incorporated herein by reference.,,as thbughcfully 'Set forth at length, and to construct an inleL:;structure to ihe,:.'Kern Ri~r' canal from each well for introduction of wat~':¥i:5'm:such pipeline into theTKern River Canal. 2. Plans and SPecifications.:;::. No acts permitted h'ereunS'~r;i~'Other than:~emergency repairs, shall be started until after the!~:;~pbation :':~...fort~,ei§ht,':(48) hours written notice to City Water ResoUrces Ma'n'ag'er or bthe[ designated employee. This notification is in addition to.COntacting a regional nbtification center such as Underground Service Alert. All COnstruction, rebonstru(~tion, and replacement shall be done in strict complianCe with plan§~:and specifications prepared by Licensee at its sole cost and expense,:, signed;.by a California Registered Civil Engineer, and which have the written?aPl~.roval of City, endorsed thereon by City's Water Resource Manager or othe¢.:';designated employee. No work will be started until the plans and specifications for turn-ins construction have been approved in writing by the City. Upon completion of the project, Licensee shall provide City copies of all as- built drawings depicting the location of the Licensee's facilities as constructed. 3. Posted Si.qnac]e. The Licensee shall post and maintain appropriate signage at each pipeline and turn-in. The signs are to include 24-hour emergency contact telephone numbers. 4. .Inspection. If deemed appropriate by Licensor, at Licensee's sole expense, Licensor shall appoint a construction inspector(s) to be present throughout any construction, Page 2 of 6 reconstruction or replacement of Licensee's facilities affecting the premises, for the purposes of inspecting all construction and determining whether all Licensee's facilities are constructed in strict compliance with the plans and specifications approved by Licensor. Costs therefore shall be the actual and reasonable costs incurred. 5. Timing of Construction Activities. The scheduled commencement of all construction, maintenance and repair activities shall be approved in writing by the City's Water Resource Manager or other designated employee in order to minimize the impacts of disrupted service to the Kern River Canal or 36-inch diameter domestic water line. 6. Licensor's Riqht to Relocate Pipeline and AppurtenanCes. In the event that the Licensor elects to relocate the Kern River Canal, Licensor shall have the right to relocate the wells, pipelines and appurtenances. Licensor shall provide Licensee with reasonable cause and one-hundred-eighty (180) days prior written notice to relocating facilities, described in paragraph one above, in accordance with the engineering reqUirements of oPerations and/or facilities plans which may be, from time to 'time;.*adopted by the Licensor. Any such relocation of the facilities shall be undertaken and completed with all deliberate speed and at the sole cost and expenSe of the Licensor. 7. Licensor's Riqht of Use. Licensee provides to Licensor ... a second prior ty right of use of the aforementioned wel!:si:.:pipe nes and turn-n facilities at Licensee's actual and reasonable costs incurred, 8. Non-Exclusive LiCense. :. The Licensee's rightS, under this.License shall be non-exclusive, and Licensor reserveS'the:; right to'eiiter int© agreements with other parties for the use of the premises, prOVided, th'at,";:.in the sole judgment of Licensor, there is not unreasonable interference'With Licensee's rights hereunder. '' ..:i::. :1 ..'. '' Licensee"'~!'~iOd its employees and agents shall have free access to the said pipeline over;;such..appropriate route as Licensor may designate or approve for the purpose of'exercising the rights given herein. 10. Dama,qes or Repairs to Premises. If any of Licensor's Kern River Canal, 36-inch diameter domestic pipeline or any other Licensor's facilities located within the right-of-way described herein are damaged, and if said damage is proximately caused by or attributable to the Licensee's facilities as described in paragraph 1, or the construction, removal, or replacement of same, Licensee shall reimburse Licensor for any and all cost and expenses reasonably or necessarily incurred by Licensor in replacing or repairing said facilities. Licensee shall also reimburse Licensor for any and all other actual and reasonable costs and expenses incurred, or actual and reasonable revenues forfeited, by Licensor due to loss of use of the Kern River Canal, 36-inch Page 3 of 6 diameter domestic pipeline or any other of Licensor's facilities located within the right-of-way described herein because of such damages. Should it become necessary for Licensor to replace, repair oi' modify any of said facilities for reasons not proximately caused by or attributable to the Licensee's described facilities, Licensor shall assume and bear only those costs and expenses it would have incurred if the Licensee's facilities had not been located on the premises; and, Licensee shall bear and reimburse Licensor for any and all actual and reasonable additional costs and expenses attributable to the presence of the Licensee's facilities on the premises. 11. Dama.qes to Water Supplies.. If any of the water supplies transported in the,.-~,:~TM River Canal or 36-inch diameter domestic pipeline, or any of the related?faC'ii'i;ii'es receiving such water, are damaged as a result of I~censee s facd~t!es, except.as.:, ay result from the sole negligence of Licensor, its emp oyeesandt'agents, LiC~"~ee shall reimburse Licensor for any and all costs and exper~:Ses reasonably or rib'd:essarily incurred by Licensor in replacing, decontaminating';: and disposing of the'"damaged water supply, and in cleaning up, repairing, and .replaCing any damaged facilities. Licensee shall also reimburse Licensor for!:iactual and reasonable wheeling revenue lost and actual and reasonable water' SU'pplies lost due to loss of use of the Kern River Canal or 36-inch~diameter domeSti¢:?'piPeline and related facilities because of such damage. 12. Workers' Compensationlnsurance. By his/her signatUre?hereunder, Licensee certifies that it is aware of the provisions of section 3700 of the California Labor Code which require every employer to be inSUred against liability fbr Workers' compensation or to undertake self-insurance in aCc0rdanc:e :'With :the...Provisions of that code, and it will comply with such'Pi~°Visions in:~onnecti°n:with any work performed on the premises. 'Any i":. per.sons provi'ding';serviCes~with or on .behalf of Licensee shall be covered by wOi, kers' compens'~'{iOn (or qaalified self-insurance). ., . 13. Indemnification.".::~.~ :": To the fUllest extent:'~ permitted by law, Licensee shall indemnify and hold ?' harmless ai~d~:defend Licensor, its directors, officers, employees, or authorized volunteers, and ,each of them from and against: '" a. Any and all claims, demands, causes of action, damages, costs, expenses, losses or liabilities, in law or in equity, of every kind and nature ':. whatsoever for, but not limited to, injury to or death of any person ': including Licensor and/or Licensee, or any directors, officers, employees, or authorized volunteers of Licensor or Licensee, and damages to or i:. destruction of property of any person, including but not limited to, Licensor i"' and/or Licensee and their directors, officers, employees, or authorized I. ' volunteers, arising out of or in any manner directly or indirectly connected · .. with this license, however caused, except the sole negligence or willful Page 4 of 6 misconduct of Licensor or its directors, officers, employees, or authorized volunteers; b. Any and all actions, proceedings, damages, costs, expenses, mitigation costs, penalties or liabilities, in law or equity, of every kind or nature whatsoever, arising out of, resulting from, or on account of the violation of any governmental law or regulation, including federal, state or local environmental laws and regulations, compliance with which is the responsibility of Licensee. c. Any and all losses, expenses, damages (including damages to the work itself), attorneys' fees, and other costs, including all costs of defense, which any of them may incur with respect to the failure, neglect, or refusal of Licensee to faithfully perform all of its obligations under the contract, excepting those caused by the sole negligence °r.willful misconduct of Licensor or its officers, employees,, or authorized volunteers. Such costs, expenses, and damages shall inclUde all costs, including .attorneys' fees, incurred by the indemnified parties in anY..lawsuit to whiCh they are a party. ,, ' Licensee agrees to carry insurance, or maintain'reasonable self-insurance for this purpose as set out in Exhibit::"B!!. Licensee's obligation to indemnify shall not be restricted to insurance proceeds, if any, received bYthe Licensor, or its directors, officers, employees, or authorized volunteers. 14. Approvals Not to B~':0nreasonably Withheld Where approya!.s .by a party are required hereunder, such approvals shall not be unreasonably withheld. .~:::' Any:nOtice pl:~idBd.her~i~n:.to be given by either party hereto to the other may be sent:..by depositing':ilin.::.the U:,S?, Post Office, postage prepaid, a sealed envelope Containing a copy 0f!isuch notice and addressed to the other party at its address as set'f0rth below: ::!.:i:~; LICENSOR?!:.:~'~.~ :::City of Bakersfield ~:'~:i:::..':"? Water Resources Department :~' 1000 Buena Vista Road Bakersfield, CA 93311 LICENSEE: Kern County Water Agency P. 0. Box 58 Bakersfield, CA 93302 Either party may change its address where notices are to be sent by giving notice thereof to the other party as provided in this paragraph. Page 5 of 6 16. Effective Date. This LiCense Agreement shall be effective on the date it is i~ecorded in the Official Records of the Office of the County Recorder of Kern County. 17. Termination. Should Licensee violate any prov!sion of this License Agreement, this License Agreement may be terminated by Licensor upon sixty (60) days' advance written notice to Licensee. Written notice shall specify violation and give reasonable time for remedy of violation(s). Upon Licensee's failure to correct within such reasonable time period, the License Agreement shall be deemed terminated at the end of the reasonable time period, with the exception,_ that remedy requires more than the reasonable time period to cure and Licbnsee, in good faith, commences to cure to completion. This Lice.nsei:;Agreement may also be terminated upon mutual consent of both parties.....? ' .... IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate, as of the date first herein above written. '."': ":'~'.... :'¥~... '.: .... ;.;: KERN COUNTY WATER AGENCY ':i'..h.....¢. CITY OF'BAKERSFIELD ~. · ..,. ,,.: ;:,:. By: .--:. . By:'."..? :¢.. Its: President .:.:.,;.::.:,._ ':..-.::':Ha~ey L. Hall APPROVED AS TO LEG~kFOBM~. ~:~APPROVED AS TO CONTENT: By: . .,, ";;~: ?~::., By:. General Counsel ' :':;~,;;.';*,¢. ': ';' 7;::~ ;: Florn Core :- .. ', , , :-:::;:,:: . . : ", :.?': · Water Resources Manager APPROVED AS TO FORM: ~" 7 ' %' '~:,: ~:;: '.:~,: By: Virginia Gennaro City Attorney COUNTERSIGNED: By: Nelson Smith Attachment - Exhibit "A" Finance Director Page 6 of 6 ~" T29S ~~_~ ......... = .......................................... I ~ i ~ ~ , / ~ ~ '~/~ ~ ~ ~ t _~OLTHOUSE FARMS ~= ~ ~~. ~" ~~ ' l" DEVELOPED - . -, ,-',, = ~ --",~ ~~- · ,~ ,~ _~r. _~ ~ BANK ~ . 7 ~' ~z-~. ~ ~ ~' ' ~"~~ PIO~ o~ NEE R ~ ~ ..... '""~'~ ~ L a,l!~ ~ l~ ' MS [ ...... ~ .... ~ .... ~ , ~ ~ ~: McALLISTER ' =--~ ..... ~===~-' RANCH ~ ---- ~ .... .... PIONEER PROJECT ..... ,.,, VICiNi~ MAP KERN COUN~ WATER AGENCY ~ ~ ~ PR~ED WELL SITES * ~6E - SEC~ON 11 Water Board Meeting August 24, 2005 8. NEW BUSINESS A. Ditch Eradication and Pipeline Easement Agreement with Pavletich Electric and Communications Inc. - For Board Approval and Recommendation to City Council WATER BOARD AGREEMENT NO. W.B. .., AGREEMENT NO. DITCH ERADICATION AGREEMENT .:. AND PIPELINE EASEMENT THIS AGREEMENT is made and entered into on by and ' between the CITY OF BAKERSFIELD, a municipal corporation, ("CITY" herein) and PAVLETICH ELECTRIC AND COMMUNICATIONS, INC. , a California Corporation . ("DEVELOPER" herein). RECITALS WHEREAS, CITY is the owner, and operator of the Kern River Canal & Irrigating .. Company, which includes the irrigation ditch known as the Beardsley Canal K. R. C. & I. Number One Ditch, now existing as an open dirt ditch; and " WHEREAS, CITY is owner of a right of way and easement of the Beardsley Canal K. R. C. & I. Number One Ditch over and across that certain real property owned by PAVLETICH .. ELECTRIC in the City of Bakersfield, County of Kern, State of California, particularly ;ribed as follows: see Exhibit "A", attached hereto and incorporated herein as though y set forth; and WHEREAS, DEVELOPER desires to fill in and eradicate said open ditch and to substitute a concrete pipeline for said open ditch, of the type and inside diameter hereinafter specified, in and along said easement and right of way, as hereinafter provided; and WHEREAS, CITY is willing to consent to the substitution of an open ditch for covered pipelines upon the terms and conditions hereinafter set forth. NOW, THEREFORE, incorporating the foregoing recitals herein, CITY and DEVELOPER mutually agree as follows: 1. PERMANENT RIGHT-OF-WAY AND EASEMENT. DEVELOPER does hereby grant to CITY the exclusive and permanent right-of-way and easement to construct, install, maintain, alter, repair, improve, reconstruct, enlarge and supplement and to flow and conduct water through a buried pipeline or pipelines over, along and in those certain strips of land in the County of Kern, State of California, owned by DEVELOPER more particularly described on Exhibit "B", attached hereto and incorporated herein as though fully set forth, together with all rights convenient and incidental thereto, including the right of ingress to and egress from said strip of land over and across said real property of DEVELOPER, and DEVELOPER covenants, and agrees that no building or other structures shall be constructed and no trees, ~,ines, or shrubs shall be planted upon said right of way and easement. DEVELOPER covenants and warrants that DEVELOPER has a fee ownership in said real property Ditch Eradication Agreement & Pipeline Easement G:\GROUPDAT~JACQUES\2005\DITCHERADICATIONPIPEEASEPAVLETICH.DOC B July 21, 2005 (10:26AM) described in Exhibit "B", and has the power, authority and legal ability to transfer the interest in real property to CITY as set forth herein. 1.1 DEVELOPER agrees, at its own expense, to procure an Easement Guarantee Policy of title insurance in the amount of Four Thousand Five Hundred Dollars ($4,500.00) from a reputable title insurance company acceptable to CITY, insuring that' the right-of-way and easement herein granted is vested in CITY free and clear of all liens and encumbrances excepting only those matters waived in writing, if any, by CITY. :2. CONSTRUCTION. DEVELOPER agrees to construct and install along the centerline of said right-of-way and easement set forth in Exhibit ~,Be 3 thirty-six inch (36") inside diameter rubber gasketed reinforced concrete irrigation pipelines. Said pipelines shall be of the quality and on the grade and installed in the manner to be designated and approved in writing by CITY. Engineering plans for construction shall be 'approved by CITY, and such plans shall be incorporated in this Agreement as if fully set forth. Said construction and installation work shall be done at a time that will not interfere with the flow or distribution of water through the present Number One ditch as required by CITY. 2.1 DEVELOPER shall pay the entire cost of laying, constructing and installing said pipelines, inlets, outlets, and other structures required by CITY, including the costs of all labor and materials incurred or used in connection with the installation, trenching, backfilling, leveling and testing the same, and the cost of all engineering, professional and other necessary, services furnished by DEVELOPER, or others in connection therewith. DEVELOPER shall provide to CITY, a labor and materials bond and a performance bond equal in value to the engineer's estimate of the total cost of the project, in a form suitable to CITY, to protect CITY against defaults by DEVELOPER. 2.2 DEVELOPER agrees to commence the construction and installation of said pipeline or pipelines and structures and complete same within a reasonable time. DEVELOPER shall, once construction has begun, prosecute same diligently until completion. At no time shall construction interfere with the flow or distribution of water through the present ditch. CITY shall have the right to inspect DEVELOPER's work to insure conformance with plans and specifications and the terms of this Agreement, and DEVELOPER agrees to pay all costs of inspection by CITY including without limitation fees charged for inspection services by outside consultants or inspectors. 2.3 DEVELOPER agrees that, upon completion of construction and installation of said pipelines, inlets, outlets and other structures, the same shall become and remain the property of CITY, and DEVELOPER shall have no right, title or interest therein, and CITY shall be in the sole and absolute control, of the manner, method and time of conducting and discharging water through said pipeline or pipelines and facilities; and the nature and extent of CITY's right of way and easement shall be in no manner diminished or restricted by the construction of said pipelines by DEVELOPER. DEVELOPER shall, at the completion of construction, quitclaim all of DEVELOPER's right, title and interest in the pipelines to CITY. Ditch Eradication Agreement & Pipeline Easement G:\GROUPDAT~JACQUES\2005\DITCHERADICATIONPIPEEASEPAVLETICH'DOC B July 21, 2005 (10:26AM) 2.4 DEVELOPER agrees to keep and maintain said pipelines, and the inlets, 'i: outlets and other structures thereon, in good operating condition and repair for a period of one year after the completion of construction and acceptance thereof by CITY, and to pay all costs of such repairs and maintenance and of any replacement of any part thereof required to maintain said pipeline or pipelines and structures in good operating condition. DEVELOPER .~i agrees that, in the event DEVELOPER fails, neglects or refuses to repair, maintain or replace promptly, upon demand any part of said pipeline, or the structures connected therewith, ., during said period of one year, CITY shall have the right, but shall not be required, to make all such repairs or replacements, and DEVELOPER does hereby agree to repay CITY the cost of any such repairs or replacements made by CITY upon demand, with the interest at twelve percent (12%) per annum from the date such cost is incurred to the date of repayment by ' DEVELOPER. . 2.5 Upon full performance of this Agreement by DEVELOPER, and the acceptance of said pipelines and other structures by CITY, CITY agrees to abandon that portion of its present open ditch and right of way therefore which will be replaced by said pipeline or pipelines and the right of way and easement herein granted. CITY agrees to quitclaim to DEVELOPER all prior easements of record. 3. ASSIGNMENT. Neither this Agreement, nor any interest in it, may be assigned ~.. or transferred by any party ,without the prior written consent of all the parties. Any such assignment will be subject to such terms and conditions as CITY may choose to impose. 4. BINDING EFFECT. The rights and obligations of this Agreement shall inure to the benefit of, and be binding upon, the parties to the Agreement and their heirs, administrators, executors, personal representatives, successors and assigns. 5. COMPLIANCE WITH ALL LAWS. DEVELOPER shall, at DEVELOPER's sole cost, comply with all of the requirements of Municipal, State, and Federal authorities now in force, or which may hereafter be in force, pertaining to this Agreement, and shall faithfully observe in all activities relating to or growing out of this Agreement all Municipal ordinances and State and Federal statutes, rules or regulations, and permitting requirements now in force or which may hereafter be in force including, without limitation, obtaining a City of Bakersfield business tax certificate (Bakersfield Municipal Code Chapter 5.02) where required. 6. CORPORATE AUTHORITY. Each individual signing this Agreement on behalf of entities represent and warrant that they are, respectively, duly authorized to sign on behalf of the entities and to bind the entities fully to each and all of the obligations set forth in this Agreement. 7. COUNTERPARTS. This Agreement may be executed simultaneously or in one or more counterparts, each of which shall be deemed an original but all of which together conStitute one and the same instrument. 8. EXECUTION. This Agreement is effective upon execution. It is the product of negotiation and all pa~!es are equally responsible for authorship of this Agreement. Section 1654 of the California Civil Code shall not apply to the interpretation of this Agreement. Ditch Eradication Agreement & Pipeline Easement 3 G:\GROUPDAT~JACQUES\2005\DITCHERADICATIONPIPEEASEPAVLETICH.DOC s July 21, 2005 (10:26AM) :,' 9. EXHIBITS. In the event of a conflict between the terms, conditions or specifications set forth in this Agreement and those in exhibits attached hereto, the terms, conditions, or specifications set forth in this Agreement shall prevail. All exhibits to which reference is made in this Agreement are deemed incorporated in this Agreement, whether or not actually attached. R ASSURANCES. EaCh party shall execute and deliver such papers, `10. FURTHE . - ~ ...... ~, acts as are necessary or appropriate, to documents, and instruments, ana per~o[~, ~u~,, ' implement the terms of this Agreement and the intent of the parties to this Agreement. `1`1. GOVERNING LAW. The laws of the State of California will govern the validity of this Agreement, its interpretation and performance. Any litigation arising in any way from this Agreement shall be brought in Kern County, California. '12. INDEMNITY. DEVELOPER shall indemnify, defend, and hold harmless CITY, its officers, agents and employees against any and all liability, claims, actions, causes of action or demands whatsoever against them, or any of them, before administrative or judicial tribunals of any kind whatsoever, arising out of, connected with, or caused by DEVELOPER, DEVELOPER's employees, agents, independent contractors, companies, or subcontractors in the performance of, or in any way arising from, the terms and provisions of this Agreement whether or not caused in part by a party indemnified hereunder, except as limited by CITY=s sole active negligence or willful misconduct. NDENT CONTRACTOR. This Agreement calls for the performance of `13. olfND~/~ELoPER as an independent contractor. DEVELOPER is not an agent or the services employee of the CITY for any purpose and is not entitled to any of the benefits provided by CITY to its employees. This Agreement shall not be construed as forming a partnership or any other association with DEVELOPER other than that of an independent contractor. ANCE In addition to any other insurance or bond required under this 14. INSURANCP-. _ ........ ,~ .--,-~,-~o~ for the duration of this Agreement the DEVELOPER snal~ procure ~uu Agreement, · ts" the following types and limits of insurance ("basic insurance requlremen herein): 14.1 Automobile liability insurance, providing coverage on an occurrence basis for bodily injury, including death, of one or more persons, property damage and personal injury, with limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall: `14.`1.`1 Provide coverage for owned, non-owned and hired autos. `14.1.2 Contain an additional insured endorsement in favor of the CITY, its mayor, council, officers, agents and employees. 4 2 Broad form com~_ .t i,n.,su._~' ISO form CG00 01 1 ...... ~ ...........basis for bodily injury, including death, of 11 85 or 88 providing coverage on an Ditch Eradication Agreement & Pipeline Easement G:\GROUPDAT~JACQUES\2005\DITCHERADICATIONPIPEEASEPAVLETICH'DOC B July 21, 2005 (10:26AM) one or more persons, property damage and personal injury, with limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall: 14.2.1 Provide contractual liability coverage for the terms of this Agreement. 14.2.2 Contain an additional insured endorsement in favor of the CITY, its mayor, council, officers, agents, employees and designated volunteers. 14.3 ~Workers' compensation insurance with statutory limits and employer's liability insurance with limits of not less than One Million Dollars ($1,000,000) per occurrence; and the policy shall contain a waiver of subrogation and additional insured endorsement in favor of the CITY, its mayor, council, officers, agents, employees and designated volunteers. 14.4 All policies required of the DEVELOPER shall be primary insurance as to the CITY, its mayor, council, officers, agents, employees, or designated volunteers and any insurance or self-insurance maintained by the CITY, its mayor, council, officers, agents, employees, and designated volunteers shall be excess of the DEVELOPER's insurance and shall not contribute with it. Additional insured endorsement shall use ISO form CG20 10 11 85 (in no event with an edition date later than 1990). 14.5 Except for workers' compensation, insurance is to be placed with insurers with a Bests' rating of no less than A:VII. Any deductibles, self-insured retentions or insurance in lesser amounts, or lack of certain types of insurance otherwise required by this Agreement, or insurance rated below Bests' A:VII, must be declared prior to execution of this Agreement and approved by the CITY in writing. 14.6 All policies shall contain an endorsement providing the CITY with thirty (30) days written notice of cancellation or material change in policy language or terms. All policies shall provide that there shall be continuing liability thereon, notwithstanding any .- recovery on any policy. Copies of policies shall be delivered to CITY on demand. 14.7 The insurance required hereunder shall be maintained until all work required to be performed by this Agreement is satisfactorily completed as evidenced by written acceptance by the CITY. 14.8 The DEVELOPER shall furnish the City Risk Manager with a certificate of insurance and required endorsements evidencing the insurance required. The CITY may withdraw its offer of contract or cancel this contract if certificates of insurance and endorsements~required have not been provided prior to the execution of this Agreement. 14.9 Full compensation for all premiums which the DEVELOPER is required to pay on all the insurance described herein shall be considered as included in the prices paid for the various items of work to be performed under the Agreement, and no additional allowance will be made therefore or for additional premiums which may be required by extensions of the policies of insurance. Ditch Eradication Agreement & Pipeline Easement G:\GROUPDAT~JACQUES~2005\DiTCHERADiCATiON PIPEI:ASEPAVLETiCH.DOC ~ July 21, 2005 (10:26AM) 14.10 It is further understood and agreed by the DEVELOPER that its liability to the CITY shall not in any way be limited to or affected by the amount of insurance obtained and carried by the DEVELOPER in connection with this Agreement. 14.11 Unless otherwise approved by the CITY, if any part of the work under this Agreement is subcontracted, the "basic insurance requirements" set forth above shall be provided by, or on behalf of, all subcontractors even if the CITY has approved lesser insurance requirements for DEVELOPER. 15. MERGER AND MODIFICATION. This Agreement sets forth the entire Agreement between the parties and supersedes all other oral or written representations. This Agreement may be modified only in a writing approved by the City Council and signed by all the parties. 16. NO WAIVER OF DEFAULT. The failure of any party to enforce against another party any provision of this Agreement shall not constitute a waiver of that party's right to enforce such a provision at a later time, and shall not serve to vary the terms of this Agreement. 17. NOTICES. All notices relative to this Agreement shall be given in writing and shall be personally served or sent by certified or registered mail and be effective upon actual personal service or depositing in the United States mail. The parties shall be addressed as follows, or at any other address designated by notice: CITY: CITY OF BAKERSFIELD City Hall 1501 Truxtun Avenue Bakersfield, California, 93301 DEVELOPER: PAVLETICH ELECTRIC AND COMMUNICATION, INC. 6308 Seven Seas Ave Bakersfield, California 93308 18. TAX NUMBERS. "DEVELOPER's" Federal Tax Identification No. 77-0412243. "DEVELOPER" is a corporation? Yes X No (Please check one.) 19. TITLE TO DOCUMENTS. All documents, plans, and drawings, maps, photographs, and other papers, or copies thereof prepared by DEVELOPER pursuant to the terms of this Agreement, shall, upon preparation, become the property of the CITY. Ditch Eradication Agreement & Pipeline Easement G:\GROUPDAT~JACQUES\2005\DITCHERADICATIONPIPEEASEPAVLETICH'DOC B July 21, 2005 (10:26AM) IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be .: executed, the day and year first-above written. "CITY" "DEVELOPER" CITY OF BAKERSFIELD PAVLETICH ELECTRIC HARVEY L. HALL Mayor Title: APPROVED AS TO FORM: VIRGINIA GENNARO City Attorney By: ALLEN SHAW ..', Deputy City Attorney Insurance: APPROVED AS TO CONTENT: WATER RESOURCES DEPARTMENT . By: FLORN CORE Water Resources Manager COUNTERSIGNED: By:. NELSON SMITH Finance-Director Attachments: Exhibit "A" and Exhibit "B" Ditch Eradication Agreement & Pipeline Easement '7 G:\GROUPDAT~JACQUES\2005\DITCHERADICATION PIPE EASEPAVLETICH.DOC S July 21, 2005 (10:26AM) EXHIBIT "A" A portion of Parcel 2 of Lot Line Adjustment 121-90 in the County of Kern, State of California as per Certificate of Compliance recorded November 19, 1990, in Book 6456 at Page 261, Official Records in the office of the Kern County Recorder more particularly described as follows: The North 100 feet of said Parcel 2. EXHIBIT "B" A portion of Parcel 2 of Lot Line Adjustment 121-90 in the County of Kern, State of California as per Certificate of Compliance recorded November 19, 1990, in Book 6456 at Page 261, Official Records in the office of the Kern County Recorder more particularly described as follows: The South 40 feet of the North 60 feet of said Parcel 2. Water Board Meeting August 24, 2005 8. NEW BUSINESS continued B. Water Service Agreement with Kern River Valley Cemetery District - For Board Approval and Recommendation to City Council DRAFT WATER SERVICE AGREEMENT THIS AGREEMENT is made and entered into on ~, 2005, by and between the CITY OF BAKERSFIELD, a municipal corporation, ("CITY"), and KERN RIVER VALLEY CEMETERY DISTRICT, a California special district, ("DISTRICT"). RECITALS WHEREAS, CITY is a chartered city organized and existing under and by virtue of the Constitution and laws of the State of California and is situated in the County of Kern. CITY is the successor in interest to the Kern County Canal and Water Company; and WHEREAS, DISTRICT is an independent special district operating under the laws of the State of California and manages the Kern River Valley Cemetery situated astride the Kern River near Kernville, California, in the County of Kern; and WHEREAS, DISTRICT is desirous of purchasing water from the CITY to help meet the '. irrigation demands of its Kern River Valley Cemetery grounds; and WHEREAS, CITY has certain rights to the waters of Kern River and owns irrigation storage space in Isabella Reservoir, and CITY has determined that under existing conditions and for an interim period of time certain portions of said waters may be available for DISTRICT's purchase and use. NOW, THEREFORE, CITY and DISTRICT mutually agree as follows: ~"" 1. TERM. The term of this Water Service Agreement shall commence upon the i' date of execution and terminate on December 31, 2026. This Agreement will .:, automatically renew for an additional term of twenty (20) years unless either .:. party provides written notice within one hundred eighty (180) days of termination date. 2. PRICE. DISTRICT shall pay to CITY the amount of fifty-five dollars ($55.00) per acre-foot of water, or fraction thereof, delivered to DISTRICT by CITY from the Kern River pursuant to this Agreement. This stated price is subject to either: ~ 1) annual adjustment on the basis of the January 1999 Producer Price Index for "All Commodities" published by the Bureau of Labor Statistics of the U.S. Department of Labor (which Price Index stood at 123.2), or 2) a price adjustment by the CITY based on CITY's sole discretion concerning the value of water. Adjustments will be made in January of each year. 3. PAYMENTS. CITY shall invoice DISTRICT monthly for water delivered or used pursuant to this Water Service Agreement and shall be due and payable by DISTRICT within 30 days receipt of CITY invoice. 4. QUANTITY. The amount of CITY water to be made available to DISTRICT pursuant to this Agreement shall not exceed fifty (50) acre-feet unless first authorized by CITY. 5. QUALITY. CITY makes no claims or assurances as to the quality or daily quantities of water to be pumped from the Kern River and used by DISTRICT. DISTRICT understands the water specified for delivery under this Agreement, as supplied from the Kern River, is UNTREATED AND NOT FIT FOR HUMAN CONSUMPTION AS DELIVERED. DISTRICT hereby assures CITY that CITY water to be made available under this Water Service Agreement shall be used solely for the purpose of irrigating the Kern River Valley Cemetery grounds. 6. DELIVERY OF WATER. The place of delivery of the water shall be at the Kern River, near Kernville, California, in Section 27, Township 25S, Range 33E, M.D.B. & M. DISTRICT shall be required to obtain approval from the appropriate government agency as required by law prior to the placement and construction of any pump and pipeline facility from the Kern River to DISTRICT's property for the purpose of water delivery. Subject to said approval, such pump and pipeline construction shall be done to the satisfaction of the City of Bakersfield, Water Resources Superintendent (or designee). DISTRICT shall bear all costs and expenses of all pump and pipeline construction and all costs and expenses related to the maintenance and upkeep of said facilities during the term of this Agreement or any extension thereof. Upon termination of this Agreement, the pump and pipeline shall be removed upon request of the CITY, and all costs and expenses of removing said facilities shall be borne by DISTRICT. 7. RIGHT OF ACCESS. The CITY or its duly authorized agents shall at all reasonable times have the right of ingress to and egress from DISTRICT property for any purpose connected with the delivery or taking of CITY water by DISTRICT. 8. WATER METERS. It shall be the obligation of DISTRICT to provide, maintain and pay for all CITY approved water meter or meters necessary to measure the quantities of water diverted by DISTRICT from the Kern River under the terms of this Agreement. It shall be the responsibility of DISTRICT to obtain daily meter readings associated with the pumping of CITY water hereunder and make such information available to CITY within four (4) calendar days following the last day of each month throughout the term of this Water Service Agreement. 9. RIPARIAN WATER. DISTRICT agrees that it will not assert or make claim to, 'and take no action with respect to any application to the State of California Water Resources Control Board for riparian water rights of any nature whatsoever associated with the diversion and use of Kern River water hereunder. 10. LIABILITY. Neither the CITY nor any of its officers, agents, or employees shall be liable for the control, carriage, handling, use, disposal, or distribution of water received by DISTRICT. 11. INDEMNITY. DISTRICT shall indemnify, defend, and hold harmless CITY, its officers, agents and employees against any and all claims, losses or damages caused by or resulting from the diversion and use of water from the Kern River by DISTRICT pursuant to this Agreement. 12. ASSIGNMENT. This Agreement shall not be assigned by any party, or any party substituted, without prior written consent of all the parties. Transfer of any 2 right or rights under this Agreement without the express written consent of CITY '" shall allow CITY to terminate this Agreement and any such transfer is hereby ":' deemed a material breach. 13. NOTICES. All notices relative to this Agreement shall be given in writing and shall be personally served or sent by certified mail and be effective upon actual personal service or depositing in the United States mail. The parties shall be addressed as follows, or at any other address designated by notice: CITY: City of Bakersfield Water Resources Department 1000 Buena Vista Road Bakersfield, CA 93311 DISTRICT: Kern River Valley Cemetery District P.O. Box 215 Wofford Heights, CA 93285 14. BINDING EFFECT. The rights and obligations of this Agreement shall inure to the benefit of, and be binding upon, the parties to this Agreement and their heirs, administrators, executors, personal representatives, successors and assigns. 15. COMPLIANCE WITH ALL LAW.~. DISTRICT shall, at DISTRICT's sole cost, comply with all of the requirements of Municipal, State, and Federal authorities '..: now in force, or which may hereafter be in force, pertaining to this Agreement, and shall faithfully observe in all activities relating to or growing out of this Agreement all Municipal ordinances and State and Federal statutes, rules or regulations, and permitting requirements now in force or which may hereafter be in force. 16. EXECUTION. This Agreement is effective upon execution. It is the product of negotiation and all parties are equally responsible for authorship of this Agreement. Section 1654 of the California Civil Code shall not apply to the .-.. interpretation of this Agreement. 17. GOVERNING LAW. The laws of the State of California will govern the validity of .: this Agreement, its interpretation and performance. Any litigation arising in any way from this Agreement shall be brought in Kern County, California. 18. NEGATION OF PARTNERSHIP. CITY shall not become or be deemed a partner or joint venture with DISTRICT or associate in any such relationship with DISTRICT by reason of the provisions of this Agreement. DISTRICT shall not for any purpose be considered an agent, officer or employee of CITY. 19. NO WAIVER OF DEFAULT. The failure of any party to enforce against another party any provision of this Agreement shall not constitute a waiver of that party's ' right to enforce such a provision at a later time, and shall not serve to vary the terms of this Agreement. 20. PRE-JUDGMENT INTEREST. In the event of a default by any party to this Agreement, the non-defaulting party shall be allowed to recover interest on all damages at the legal rate from the date of the breach. 21. NON-INTEREST. No officer or employee of the CITY shall hold interest in this Agreement (California Government Code section 1090). 22. TIME. Time is of the essence in this Agreement. 23. ACCOUNTING RECORDS. The parties shall maintain accurate accounting records and other written documentation pertaining to all costs incurred in performance with this Agreement. Such records and documentation shall be kept at each parties office during the term of this Agreement and said records shall be made available to each parties representative upon proper request. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to. be executed, the day and year first above written. "CITY" "DISTRICT" CITY OF BAKERSFIELD KERN RIVER VALLEY CEMETERY DISTRICT By: By: HARVEY L. HALL, Mayor Title: APPROVED AS TO CONTENT: WATER RESOURCES DEPARTMENT By: By: Title: FLORN CORE Water Resources Manager APPROVED AS TO FORM: VIRGINIA GENNARO DRAFT City Attorney By: ALLEN SHAW Deputy City Attorney COUNTERSIGNED: By: NELSON SMITH Finance Director 4 Water Board Meeting August 24, 2005 8. NEW BUSINESS continued C. Resolution Supporting The Historic Operation of Friant Dam in Meeting Water Supply Needs - For Board Review and Approval RESOLUTION NO. A RESOLUTION OF THE CITY OF BAKERSFIELD WATER BOARD SUPPORTING THE HISTORIC OPERATION OF FRIANT DAM IN MEETING WATER SUPPLY NEEDS WHEREAS, the Friant Division of the Central Valley Project serves agricultural water to thousands of acres of farms near and around the City of Bakersfield and the waters of the Friant-Kern Canal system are of a high quality that are used to augment urban water demand in Bakersfield; and WHEREAS, litigation against the United States Bureau of Reclamation (USBR) was initiated in 1988 by the Natural Resources Defense Council, challenging the renewal of water service contracts in the Central Valley Project's Friant Division; and WHEREAS, as part of the U. S. District Court, Eastern District of California (Court) ruling on August 27, 2004, the Court assessed liability to the USBR and broadly interpreted California law to require restoration and maintenance of "historic fisheries" in existence prior to construction of Friant Dam; and WHEREAS, the Court's opinion concludes that a statewide judicially-mandated balancing of beneficial uses gives fish a priority over all other uses of water throughout California and the opinion creates a situation under which fish come first and agriculture, commerce, and communities fall second, in order to restore fisheries that existed before dams were constructed; and WHEREAS, any actions by the courts, state and/or federal government should take into consideration the social, cultural and economic impact of adjusting water supplies to agriculture, commerce and communities which have relied upon this water for decades; and WHEREAS, if permitted to stand and be implemented during a "remedy phase" before the court, the Court's ruling has the potential to create drastic reductions in water supply quantities and reliability that are crucial to agriculture, commerce, and communities in the Friant service area. NOW, THEREFORE, BE IT RESOLVED, by the Water Board of the City of Bakersfield as follows: 1. To support of the Valley Water Alliance and encourage other communities to support the Alliance and pledge our cooperation in encouraging local, state and federal government officials to address the water use and rights issues raised by the U.S. District Court ruling; and 2. That the U.S. Bureau of Reclamation be allowed to continue to operate the Fr/ant Division of the Central Valley Project in a manner consistent with the historic commitments made by the federal government to provide continuous and reliable water supplies to agriculture, commerce and communities in the Friant service area. ........ o0o ....... I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Water Board of the City of Bakersfield at a special meeting thereof held on , by the following vote: Ayes: Chairman Couch, Hanson, Scrivner Noes: Absent: Abstain: BOBBLE ZARAGOZA, Secretary · '.' City of Bakersfield Water Board :" APPROVED '" By '" FLORN CORE Water Resources Manager APPROVED AS TO FORM: VIRGINIA GENNARO City Attorney By_ ALLEN SHAW Deputy City Attorney S:\RESOLUTIONS\ResolutionsupportRiverFiowRelease.doc 8/8/05 Water Board Meeting August 24, 2005 8. NEW BUSINESS continued D. Water Supply Assessment for Old River Ranch Development Project - For Board Review and Action B A K E R S F I E L D WATER RESOURCES DEPARTMENT Florn Core · Water Resources Manager August 17, 2005 Terry W. Schroepfer, P.E. Quad Knopf 5001 California Avenue Bakersfield, CA 93309 Re: WATER SUPPLY ASSESSMENT FOR THE OLD RIVER RANCH DEVELOPMENT PROJECT. Quad Knopf has been contracted to prepare a Water Supply Assessment for the Old River Ranch Project in accordance with the requirements of Senate Bill 610 (SB610) and Senate Bill 221 (SB221). This is due to Petrini-Bakersfield Ventures, LLC having submitted an application to the City of Bakersfield for annexation, a general plan amendment (GPA) and to rezone approximately 1,833 acres southwest of Bakersfield and the City of Bakersfield Domestic Water System being the proposed water supplier. Effective January 1,2002, a water supply assessment is required for this development project. Any development "project," defined in Water Code Section 10912 that is subject to CEQA, requires a city or county to consider a water supply assessment for that development to determine whether projected water supplies available to the proposed project are sufficient to meet the project's anticipated water demand. The proposed development meets the definition of a "project" in California Water Code Section 10912 because it includes a proposed residential development of over 500 dwelling units and it includes a proposed commercial development of larger than 500,000 square feet of floor space. The City of Bakersfield, as the proposed water supplier, has reviewed the Water Supply Assessment for the Old River Ranch Development Project. The Water Supply Assessment concludes that the City of Bakersfield's Domestic Water System has a sufficient water supply to meet the projected demands of the development project. This assessment has been approved by the City of Bakersfield's Water Board. Attached is the Water Board approved Water Supply Assessment for the Old River Ranch Development Project. Sincerely, FLORN CORE ~.~ Water Resources Manager By: Mark. Lambert Water Resources Superintendent cc: Marc Gauthier, Principal Planner, City of Bakersfield Development Services 1000 Buena Vista Road · Bakersfield · California 93311 (661) 326-3715 · Fax (661)852-2127 · E-Maih water@ci.bakersfield.ca.us WATER SUPPLY ASSESSMENT OLD RIVER RANCH DEVELOPMENT PROJECT Prepared for: City of Bakersfield Water Resources Department I000 Buena Vista Road " Bakersfield, California 93311 ..' Submitted by: " Quad Knopf 5001 California Avenue, Suite 230 '~': Bakersfield, California 93309 (661) 616-2600 ' August 2005 050219 v,er Ran evelopment r e /n~ ~ ' ~','/ I CiTY 29 ~7 2~ A ~' '. , Soume: ~m ~u~ ~ne ~p Cou~/Zoning FIG UR E ~ ~ Proje~ Site A Exclusive Agriculture 3 Quad Knopf VI. FINDINGS & RECOMMENDATIONS following are the findings of the water supply assesslncnt for the Old River Ranch " Development Project: 1. The projected water demand for the project is 5,297.6 AF/yr. 2. The existing average water demands for the project under agricultural use is approximately 6,081.9 AF/yr. Thus, there will be a decrease of 784.3 AF/yr in overall basin water demand. 3. The project site is within the Buena Vista and Stine Canal Service areas of the Kern Delta Water District. The service areas have a source of supply that serve these lands. 4. Even though the Tulare Lake Hydrologic region is in overdraft in the average year, the portion of the basin within thc City of Bakersfield is not in overdraft. The overall water balance is positive with an average balance over 100,000 acre-feet between 1977-1995. Therefore, groundwater will be available in sufficient supply to meet the project and other :.. planned future water demands. 5. The groundwater supply will be sufficient in a normal year, single dry year and multiple .~: dry year scenarios, although, multiple dry year scenarios will likely, rcquire extractions fi'om the 2800 Acre Recharge Area. 6. The City has adequate surface water supply to supplement the use of groundwater within the City Domestic Water System. The use of surface water for banking and groundwater · recharge will greatly enhance the overall supply. .. 7. The proposed project, being developed in four phases over a period of approximately twelve years, will provide the City with greater flexibility regarding projected water demands and to utilize sources that will become available to the City in the future. 8. The proposed project will have no impact on thc ovcrall water balance in thc Kcrn County hydrologic subbasin. 9. Groundwater elevation data presented for water wells on the project site demonstrate the ability of the aquifer to recover from dry year and multiple dry year periods. It is concluded that the City of Bakersfield Domestic Water Syste~n has sufficient capacity to supply the project and other projected demands included in the UWMP. Therefore, it is recommended that the City of Bakersfield Water Board approve this assessment and forward the report to the City of Bakersfield Planning Department for inclusion in the EIR for the subject project. . · City of Bakersfield August 2005 :: Water Supply Assessment Page 26 -.:'~, Water Board Meeting August 24, 2005 8. NEW BUSINESS continued E. Domestic Water Availability Fees per Municipal Code 14.04.120 - For Board Information 14.04.120 Rates and charges. A. Effective Rates. A complete schedule of all effective rates authorized to be charged for water service shall be kept in the city's local offices where they will be available for public inspection. B. Availability Rates and Charges. The city water board, with concurrence of the city council, shall establish availability (standby) fees and charges for water service facilities for all areas except those described in Exhibit C-1 of the City Agreement No. 76-36, which fees and charges are hereby declared to be necessary to compensate the city for the expense incurred in furnishing source, storage, and water distribution facilities, and related capital project expenses, including but not limited to costs of acquisition and financing and necessary costs of operation, maintenance, replacement, improvement and extension of the water system. C. All applicants for stand-by service, or service where availability fees are to be paid, shall pay the required fee, or sign a contract guaranteeing payment, prior to city issuance of a written commitment to service water to any area. No final map allowing construction shall be given approval prior to payment of proper fees for water service. (Ord. 3504 § 3, 1992: Ord. 2660 § 3, 1981: prior code § 1.46.120) CONNECTION FEE COMPARISON PURVEYORS within URBAN BAKERSFIELD AREA Per Acre Per Lot Meter Size Factor CITY OF BAKERSFIELD - Domestic water system Availibility Fee/Connection Fee $2,000.00 $571.00 All Sizes CALIFORNIA WATER SERVICE COMPANY Availibility Fee/Connection Fee $4,725.00 $1,350.00 1-inch 4,320.00 2-inch 3.2 13,500.00 4-inch 10 27,000.00 6-inch 20 43,200.00 8-inch 32 62,100.00 1 O-inch 46 EAST NILES COMMUNITY SERVICE DISTRICT Availibility Fee/Connection Fee $8,050.00 $2,300.00 5/8-inch 13,300.00 3,800.00 1-inch 7,650.00 1.5-inch 12,250.00 2-inch 3.2 24,500.00 3-inch 38,300.00 4-inch 10 76,650.00 6-inch 20 122,650.00 8-inch 245,300.00 12-inch VAUGHN WATER COMPANY Availibility Fee/Connection Fee $2,723.00. $778.00 5/8-inch 3,381.00 966.00 3/4-inch 6,660.50 1,903.00 1-inch 4,528.00 1.5-inch 6,403.00 2-inch 75,028.00 6-inch TURBO NORTH OF THE RIVER MUNICIPAL WATER DISTRICT Availibility Fee/Connection Fee Residential $2,136.00 $610.00 Commercial & Industrial 1,221.00 NOTE: Although lot sizes vary per development for fee comparison purposes three and a half (3.5) lots per acre have been utilized in this table.