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sewer (i) upon their fifty percent (50%) completion and (ii) upon their completion, but prior to the <br />solicitation of bids for the repair or replacement work. <br />The cost of repair or replacement of each shared sanitary sewer shall be apportioned to each <br />Party according to flows as set forth on Exhibit `B." The total cost shall include both in-house and <br />outside engineering, administration, and construction expenses. Prior to starting the repair or <br />replacement work, the initiating Party shall invoice the other Party for its apportioned estimated cost <br />share. The other Party shall promptly deposit the invoiced amount with the initiating Party. The <br />initiating Party shall keep these monies in a segregated fund and use them only for the project for <br />which they were deposited. Upon completion of the work and payment of all costs, the initiating <br />Party shall submit a report setting forth all costs incurred together with either an invoice, or a refund <br />for the difference between the actual apportioned cost and the deposit (and any related accumulated <br />interest). <br />All repair and replacement work shall be done in accordance with applicable laws, <br />ordinances, charter provisions related to public work projects, and the applicable standards and <br />specifications of the Party within whose jurisdiction the work is being performed. <br />If, within 30 days after notification, the notified Party disagrees with the necessity for, or <br />disagrees with the estimated cost of, the repair or replacement, it shall so notify the other Party in <br />writing. If the parties are unable to agree upon the need for or cost of the repair or replacement, the <br />Parties may pursue any otherremedies authorized by this Agreement. <br />This Subsection 1(c) shall apply to any replacement of a shared sewer line by a new shared <br />sewer line of equal or lesser capacity. Section 2 of this Agreement shall apply to replacement of <br />existing shared sewer lines by new sewer lines with a capacity greater than the capacity of the line <br />being replaced and the construction of new shared sewer lines. <br />(d) Compliance with Law. <br />Each Party hereby agrees to operate and maintain the shared sanitary sewers within its <br />jurisdiction and those sanitary sewers within its jurisdiction that directly or indirectly connect to <br />shared sanitary sewers in the other Party's jurisdiction in accordance with all applicable federal and <br />state laws and regulations, including, but not limited to, any waste discharge requirements <br />("WDRs") lawfully established by the State Water Resources Control Board and/or the Santa Ana <br />Regional Water Quality Control Board, and each Party's respective Operation and Maintenance Plan <br />when such plan is adopted (collectively, "Applicable Laws and Regulations"). <br />2. FUTURE SANITARY SEVERS. <br />(a) Annual Determination of Sufficiency of Capacity in Shared Sewers. <br />It is anticipated that future development in the tributary areas to the shared sanitary sewers <br />may lead to a situation in which there is a need for additional capacity, as defined in Section 1, in <br />some of the shared sanitary sewers. On or before October 1st of each year, each Party shall <br />determine whether the shared sanitary sewers within its jurisdiction have sufficient capacity, as <br />defined in Section 1, to provide service without limiting connections for the next calendar year. <br />Each Party shall bear their individual cost of performing the sufficiency of capacity determination <br />579683.1 3 <br />