ORANGE COUNTY WATER DISTRICT AND MOULTON NIGUEL WATER DISTRICT

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the State of California is not considered to be a qualifying emergency for the purposes of this Agreement; b. All new facilities related to the INTERCONNECTION will be designed and constructed to meet the system specifications and operational requirements of the CITY and OCWD during normal and emergency operating conditions. c. At no time will the delivery of water to MNWD through the INTERCONNECTION cause or exacerbate a shortage of water for meeting the needs of the CITY's retail customers, as solely determined by the CITY. d. CITY staff will be responsible for all facility operations of infrastructure constructed as a part of this Agreement. e. Regardless of which PARTY funds the development and constriction of the infrastructure associated with the INTERCONNECTION, the CITY will retain ownership of all assets within the CITY's limits. f. The CITY's rate payers and OCWD will not bear any costs of delivering emergency water to MNWD. L If the delivery of water to MNWD through the INTERCONNECTION results in the CITY exceeding (or further exceeding) OCWD's basin pumping percentage, MNWD will reimburse the CITY for its proportional share of any Basin Equity Assessment charges assessed to the CITY. ii. MWD assesses the City a capacity charge based on their peak usage over a three-year average. If the CITY's capacity charge is increased due to MNWD's emergency usage, MNWD will reimburse the CITY for the marginal difference in the annual capacity fee amount that is attributable to the conveyance of water to MNWD. iii. MNWD will reimburse the CITY for all expenses incurred by the CITY that result from the operations and maintenance of the INTERCONNECTION, including but not limited to any administrative costs, penalties, fees or fines. g. OCWD's ability to store water and operate the groundwater basin must not be banned by the CITY's providing of water to MNWD via the INTERCONNECTION and such storage will otherwise be fully compliant with all applicable requirements of the Orange County Water District Act. h. MNWD understands that the development of the INTERCONNECTION does not constitute a commitment by OCWD or the CITY to allow MNWD to store water within the Orange County groundwater basin. i. The ability of MNWD to utilize the EOCF#2 will require additional agreement by the parties responsible for the operation and maintenance of the EOCF#2. The Scope of Page 2 of 7 5169249.1-- N I716.0