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Third Amendment to Dyer Road Well. Field Agreement and Lease Agreement October 4, 1999 Page 2 A second amendment to the agreement was executed'on September 19, 1990 enabling Santa Ana to sell its share in the project for $185,404.71. It was determined that the purchase of the 10% share would result in poorer water quality and at a more expensive cost than using available funds to improve the City's water system. The amendment also clarified language relating to mitigation measures required of IRWD that required the construction of the Santiago Pit groundwater recharge project to offset the water it pumped from within Santa Ana. The amendment also encouraged IRWD to pump and treat more groundwater from the deep colored water aquifer. This colored water aquifer is estimated to have more potable water capacity than the clear water aquifer that most groundwater producers now use. The color in the water is not a health issue but an aesthetic one. To market this water requires either treatment or dilution with enough clear water. It has long been a goal of the Orange County Water'District (OCWD) to develop more pumping and use of colored water as an additional future supply for Orange County. Representatives from the OCWD, the IRWD and Santa Ana have met and are proposing a third amendment to the DRWF Agreement. This amendment (a) provides for IRWD to increase its non -colored and colored groundwater production from the DRWF area, (b) assists IRWD in meeting its long term water production needs, and (c) benefits the groundwater basin as a whole by increasing development of the deep colored water aquifer. In regards to the EIR and the subsequent addendum., the City has determined the addendum is adequate based upon the attachment "Actions By A Responsible Agency." The total amount of non -colored water that IRWD produces will increase under this amendment from 20,000 to 28,000 acre-feet per year. IRWD will be required to produce at least 8,,000--acre feet of colored groundwater and treat it for potable use. Also, IRWD will construct a new $12 million facility to treat the colored water. The increased development of the deep colored water aquifer will benefit Santa Ana and surrounding cities by reducing movement of colored water into our local clear water zone. In addition, a 40-year lease agreement is proposed which will provide vacant land sites owned by City of Santa Ana to IRWD for the installation of color water production wells and treatment plant facilities (see attached). The City will review and approve the architectural design of the well sites. The lease agreement will provide $25,000/month ($300,000/year) for the first 10 years and will be adjusted thereafter to compensate Santa Ana for any potential water cost increases in the remaining 30 years. � � � Substitute Page 40