MUNICIPAL WATER DISTRICT OF ORANGE COUNTY (2) - 2002

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r , ' . . SECTION 2. OBLIGATIONS OF THE PROGRAM AGENCY. 2.1. Fulfillment of the Terms and Conditions of the MWD Agreement. Pursuant to this Contract, the Program Agency shall fulfill the terms of the MWD Agreement, including but not limited to those obligations set forth in Section VLB.("Program Agency Obligations") of the MWD Agreement. 2.2. Role as Lead Agencv and in Coordination of Work. The Program Agency shall act as the lead agency to design, and construct the Program Well, the location of which is provided on Attachment "B." 2.3. Design and Construction. In its design and construction of the Program Well, the Program Agency shall cooperate with the Operating Party and make reasonable efforts to meet the specific operational needs and requirements of the Operating Party. The program well construction plans and specifications will incorporate all mitigation requirements arising out of processing necessary CEQA documents for the program well. All construction plans and specifications shall be reviewed and approved by the Operating Party prior to bid advertisement. All contracts let for Program Well construction shall be let by competitive bid procedures that assure award of the contract to the lowest responsible bidder, except as may be otherwise authorized under the enabling authority for the Program Agency and/or the California Public Contract Code, and in accordance with the MWD Agreement. Program Agency shall be responsible for ensuring that construction of the Program Well is completed in accordance with Section IV.B.4. of the MWD Agreement, not later than March 8, 2008. Upon completion of the Program Well, the Program Agency shall transmit a written notice of completion to the Member Agency and the Operating Party ("Notice of Completion"). Member Agency and Operating Party shall be named as additionally insured for insurance policies provided by contractors and consultants hired by Program Agency. 2.4. Payment of the Costs of Construction. The Program Agency shall provide for the payment of the costs of constructing the Program Well and any other related facilities from funds received from MWD in accordance with the MWD Agreement. Member Agency and Operating Party shall have no responsibility for any costs of constructing the Program Well, and other Program Facilities. In the event that Operating Party requests and funds the construction of additional facilities pursuant to the provisions of Paragraph 4.11 Program Agency's consent shall not be unreasonable withheld. Upon completion of construction and placing the Program Well into service, the Program Agency shall be responsible for the repair or replacement of any equipment found to be defective. 2.5. Operation and Ownership Responsibilities. After completion of construction of the Program Well, and review of the Operating Party's distribution system, the Program Agency and Operating Party shall establish a monthly operating yield for the Program Well, which shall be used in the calculations required under the MWD Agreement. Calculation of the monthly operating yield shall consider tests performed by the Southern California Edison Company or The Gas Company (if applicable) and reasonable load factors. At any time during the term of this agreement the Operating Party may request a new well performance test by Southern California Edison Company (if applicable) to reestablish the program well operating yield. Changes to the operating yield are intended to account for changes in groundwater 131/022499-0028 388856.01 a08128/03 -2-