The URL can be used to link to this page

Home My WebLink AboutMETROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA (5) -2014A- 2014 -354 PURCHASE ORDER FOR SYSTEM WATER TO BE PROVIDED BY THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA PURCHASER: TERM City of Santa Ana 10 years: January 1, 2015 – December 31 2024 INITIAL BASE PERIOD DEMAND: EFFECTIVE DATE: acre -feet 13,476 January 1, 2015 INITIAL TIER 1 MAXIMUM — Annual INITIAL TIER 1 MAXIMUM — Cumulative: Average: acre -feet acre -feet 19,617 196,170 PURCHASE ORDER COMMITMENT— PURCHASE ORDER COMMITMENT — Annual Average: Cumulative: acre -feet $ 036 acre -feet 80,860 Definitions of capitalized terms used in this Purchase Order are provided in Attachment 1. Terms used in this Purchase Order and not defined in Attachment 1 are defined in Metropolitan's Administrative Code. COMMITMENT TO PURCHASE: In consideration of Purchaser's commitment to purchase System Water pursuant to this Purchase Order, Metropolitan agrees to sell such System Water to Purchaser at the Tier 1 Supply Rate in an amount up to the Tier 1 Maximum — Cumulative, All System Water sold to Purchaser in an amount greater than the Tier 1 Maximum — Cumulative shall be sold to the Purchaser at the Tier 2 Supply Rate. In connection with the purchase of System Water, the Purchaser also agrees to pay all other applicable rates and charges, as established by Metropolitan from time to time. The rates and charges applicable to System Water as of the Effective Date are shown in Attachment 2. If Purchaser's applicable System Water purchases during the Term exceed Purchaser's Tier 1 Maximum, Purchaser may elect to: a.) Subject to the provisions of paragraph c) below, pay any Tier 2 Supply obligations at the end of the Term, in an amount equal to the difference between the Purchaser's applicable System Water purchases and the Tier 1 Maximum — Cumulative during the Term times the average of the Tier 2 Supply Rate in effect during the Term; or, b.) pay any Tier 2 Supply obligations, annually as purchases are incurred, in an amount equal to the difference between the Purchaser's applicable annual System Water purchases and the Tier 1 Maximum — Annual times the Tier 2 Supply Rate in effect during the calendar year. A true -up at the end of the Term will be performed to ensure that the Purchaser has received all Tier 1 Maximum — Cumulative purchases allowed by the Purchase Order. c.) if, after the end of the first five years, Purchaser has accrued a cumulative Tier 2 Supply Rate obligation, Purchaser may elect to pay the initial five year cumulative Tier 2 -l- supply rate obligation (i) in full at the end of year five of the Term , (ii) amortize it in five equal installments over the remaining five calendar years of the Term or (iii) pay it at the end of the Term Commencing in year 6 of the Term, Purchaser shall pay any additional Tier 2 Supply Rate obligation annually. . Purchaser agrees to purchase System Water from Metropolitan during the Term in an amount not less than the Purchase Order Commitment. If Purchaser's applicable System Water purchases during the Term are less than the Purchase Order Commitment, Purchaser agrees to pay Metropolitan an amount equal to the difference between the sum total in acre feet of water of the Purchase Order Commitment and the sum total in acre feet of water of Purchaser's applicable System Water purchases during the Term times the average of the Tier 1 Supply Rate in effect during the Term. Purchaser agrees to pay all amounts owing to Metropolitan, whether to satisfy a Purchase Order Commitment or a Tier 2 Supply Rate obligation, within the next regular billing cycle following the reconciliation of all certifications for special programs that the Purchaser may participate in. The Purchaser may elect to pay such amount in twelve equal monthly payments over the course of the next twelve months beginning with the first regular billing cycle following the reconciliation of all outstanding certifications for special programs. If the Purchaser elects to pay such amount over the course of the next twelve months following the regular billing cycle any outstanding balance shall bear interest at Metropolitan's then current investment portfolio average yield. All other amounts payable under this Purchase Order shall be billed and paid in accordance with the Administrative Code. COMMITMENT APPEAL: If the Purchaser's applicable System Water purchases during the Term are less than the Purchase Order Commitment, each acre -foot of unmet commitment will be reduced by the amount of production from a local resource project, measured in acre -feet, that commences operation on or after January 1, 2014. Local resource production includes any project type as approved by the Board under the Local Resources Program. WATER SERVICE: Conditions of water service by Metropolitan to the Purchaser, including but not limited to (i) delivery points, (ii) water delivery schedules, and (iii) water quality, will be determined in accordance with Chapter 5 (Section 4500 through 4514, inclusive, as applicable) of Metropolitan's Administrative Code. In accordance with its Administrative Code, Metropolitan shall use its reasonable best efforts to supply System Water in the quantities requested by the Purchaser, but is not obligated to dedicate any portion of System capacity for the conveyance, distribution, storage or treatment of System Water for the benefit of the Purchaser or any other member agency. Metropolitan shall use its reasonable best efforts to deliver the System Water when needed by the Purchaser during the Term; provided however, there shall be no default under this Purchase Order if Metropolitan fails to deliver water to the Purchaser in accordance with any such schedule of deliveries during the Term. By execution of this Purchase Order, the Purchaser recognizes and agrees that it acquires no interest in or to any portion of the System or any other Metropolitan facilities or supplies, or any right to receive water delivered through the System, excepting the right to purchase up to Purchaser's Tier 1 Maximum — Cumulative at the Tier 1 Supply Rate provided that System Water is available. This Purchase Order governs pricing of the System Water delivered to the Purchaser pursuant to this Purchase Order and does not confer any entitlement to receive System Water -2- System Water provided to the Purchaser under the terms of this Purchase Order shall be subject to reduction in accordance with the shortage allocation provisions of the Water Surplus and Drought Management Plan (the "WSDM Plan ") or other such policies and principles governing the allocation of System Water as adopted by the Board. In the event that Metropolitan's Board determines to reduce, interrupt or suspend deliveries of System Water, any outstanding balance of the Purchase Order Commitment at the end of the Term shall be reduced by the Purchase Order Commitment — Annual Average for each and every fiscal or calendar year that a reduction, interruption or suspension occurred. MISCELLANEOUS: This Purchase Order will be interpreted, governed and enforced in accordance with the laws of the State of California. This Purchase Order will apply to and bind the successors and assigns of the Purchaser and Metropolitan. No assignment or transfer of the rights of the Purchaser under this Purchase Order will be valid and effective against Metropolitan or the Purchaser without the prior written consent of Metropolitan and the Purchaser. If at any time during the Term, by reason of error in computation or other causes, there is an overpayment or underpayment to Metropolitan by the Purchaser of the charges provided for under this Purchase Order, which overpayment or underpayment is not accounted for and corrected in the annual re- determination or reconciliation of said charges, the amount of such overpayment or underpayment shall be credited or debited, as the case may be, to the Purchaser. Metropolitan will notify the Purchaser in writing regarding the amount of such credit or debit, as the case may be. In no case will credits or debits for charges provided for under this Purchase Order be administered beyond the limit for billing adjustments as specified in Metropolitan's Administrative Code. -3- IN WITNESS WHEREOF, this Purchase Order is executed by the duly authorized officers of the Metropolitan Water District of Southern California and , as of Decemberj�_, 2014. THE METROPOLITAN WATER DISTRICT OF CITY OF SANTA ANA SOUTHERN CALIFORNIA Manager(/ `' [Title] DAVID CAVAZOS, City Manager APPROVED AS TO FORM AND CONTENT: Uy: Joseph Vanderhorst siatant General Connsel By: - -4- Jose Sandoval, Chief Assistant City Att. (;anaral (:nnncol 0 ATTEST: MARIA D. RUIZAR City Clerk Attachment 1 Purchase Order for System Water DEFINITIONS "Act" means the Metropolitan Water District Act, California Statutes 1969, Chapter 209, as amended and supplemented from time to time. "Base Period Demand" means the greater of (i) the Initial Base Period Demand or (ii) the five -year rolling average of the Purchaser's System Water purchases, measured on a fiscal year basis. "Effective Date" means the effective date of this Purchase Order as specified above. "Demand" means the Purchaser's purchases of System Water supplies, including full service, seasonal shift, Conjunctive Use Program, Surface Storage Operating Agreement water, Recharge and Recovery Operating Agreement water, or any other water program deemed to be a purchase of water. "Initial Base Period Demand" means the Purchaser's highest annual Demand, as determined by Metropolitan, in: a). any fiscal year during the period from fiscal year 1989/90 through fiscal year 2001/02; or b). any fiscal year during the period from fiscal year 2002/03 through fiscal year 2013/14. "Metropolitan" means The Metropolitan Water District of Southern California. "Purchase Order Commitment" means: a). if the Purchaser elects option a). under the Initial Base Period Demand, then 60% of the Purchaser's Initial Base Firm Demand as previously calculated by Metropolitan, which is the highest fiscal year firm Demand during the period from fiscal year 1989/90 through fiscal year 2001/02, times 10; or b). if the Purchaser elects option b). under the Initial Base Period Demand, then 60% of the Purchaser's highest fiscal year Demand during the period from fiscal year 2002103 through fiscal year 2013/14, times 10. "Purchase Order" means this Purchase Order for System Water. "Purchaser" means the member public agency specified above, a duly organized [city /water district/county water authority] of the State of California. "System" means the properties, works and facilities of Metropolitan necessary for the supply, development, storage, conveyance, distribution, treatment or sale of water. "System Water" means water supplies developed by Metropolitan and delivered to the Purchaser through the System or other means (e.g. conjunctive use storage). "Term" means the term of this Purchase Order as specified above. -5- "Tier 1 Maximum — Annual" means an amount equal to 90% of the Initial Base Period Demand. "Tier 1 Maximum — Cumulative" means an amount equal to the Tier 1 Maximum — Annual times 10. "Tier 1 Supply Rate" means Metropolitan's per- acre -foot Tier 1 Supply Rate, as determined from time to time by Metropolitan's Board of Directors. The initial Tier 1 Rate is $158/AF. "Tier 2 Supply Rate" means Metropolitan's per- acre -foot Tier 2 Supply Rate, as determined from time to time by Metropolitan's Board of Directors. The initial Tier 2 Rate is $290 /AF. "Water Surplus and Drought Management Plan (WSDM)" means Metropolitan's policy and procedures for managing supplies and drought conditions as adopted by the Board from time to time. Attachment 2 Purchase Order for System Water RATES AND CHARGES -7- Effective January 1, 2015 Effective January 1, 2016 Tier 1 Supply Rate ($ /AF) $158 $156 Tier 2 Supply Rate ($ /AF) $290 $290 System Access Rate ($ /AF) $257 $259 System Power Rate ($ /AF) $126 $138 Water Stewardship Rate $ /AF) $41 $41 Full Service Untreated Rate ($ /AF): Tier 1 $582 $594 Tier 2 $714 $728 Treatment Surcharge $ /AF) $341 $348 Full Service Treated Rate ($ /AF): Tier 1 $923 $942 Tier $1,055 $1,076 Readiness -to -Serve Charge ($ millions) $158 $153 Capacity Charge $ /cfs) $11,100 $10,900 -7-