METROPOLITAN WATER DISTRICT AND THE MUNICIPAL WATER DISTRICT OF ORANGE COUNTY (2) - 2017

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Agreement Between Metropolitan Water District of Southern California, City of Santa Ana, and MWDOC for Fiscal Year 2017/2018 In -Lieu Treated Deliveries City represents and warrants that In -Lieu Treated Deliveries are in addition to its projected full service deliveries from Metropolitan (treated or untreated), which would normally occur without this Agreement. MWDOC represents and warrants that, in accordance with the MWDOC-Metropolitan Cyclic Storage Agreement, an amount equivalent to the In -Lieu Treated Deliveries will be credited to Metropolitan as stored water in the Orange County Basin, pursuant to the City's intentional reduction in groundwater production certified and reconciled according to Section 8, until such time as the water is purchased by MWDOC pursuant to the terms of the MWDOC- Metropolitan Cyclic Storage Agreement and Section 8 of this Agreement. Section 3. Tenn. This Agreement shall be effective until the last acre-foot of water delivered under this Agreement is purchased out of the MWDOC-Metropolitan Cyclic Storage Account and is applicable only to In -Lieu Treated Deliveries made to City under this Agreement from July 12, 2017 through June 30, 2018, as certified and reconciled according to Section 8. Section 4. Treatment Surcharge Payment. City agrees to pay Metropolitan the Treatment Surcharge effective at the time of the In - Lieu Treated Deliveries, which for calendar year 2017 is $313 per acre-foot and in calendar year 2018 will be $320 per acre-foot. Section 5. Storage Price Tenn In exchange for the City's acceptance and storage of In -Lieu Treated Deliveries for Cyclic Storage in fiscal year 2017/18, instead of direct untreated water deliveries, Metropolitan agrees to pay City up to $225/acre-foot, as determined by Metropolitan pursuant to Section 6. Section 6. Determination of Storage Price Term Metropolitan has, in its sole discretion, determined the Storage Price Term is $212 per acre-foot in 2017 ($313 - $101) and $219/acre-foot in 2018 ($320 - $101). Metropolitan has made such detennination based on an estimate of costs incurred by City as a result of taking in - lieu delivery of additional treated water at Metropolitan's request that City would not otherwise have taken, minus the costs that City would have incurred if it produced an equivalent amount of water from the Orange County Basin. City has submitted its avoided cost estimates to Metropolitan, which Metropolitan reviewed in addition to historical production cost estimates available to Metropolitan. City may, at any time prior to reconciliation and certification described in Section 8, request a redetermination of the Storage Price Term, by submitting documentation that its groundwater production costs have changed. Metropolitan shall, in its sole discretion, change