HomeMy WebLinkAboutIRVINE RANCH WATER DISTRICT (3) -1999LEASE AGREEMENT FOR COLORED
WATER PRODUCTION WELL SITES
ORIGINAL
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THIS AGREEMENT is made and entered into this day of
1999, by and between the CITY OF SANTA ANA, a Charter City of the
,State of California (hereinafter "SANTA ANA") and the IRVINE RANCH WATER DISTRICT,
a California water district formed and existing pursuant to Section 34000 et sQ. of the Water
Code of the State of California (hereinafter "IR)AD").
RECITALS:
A. The parties hereto, together with Orange County Water District (OCWD"), have
entered into that certain "Agreement for Water Production and Transmission Facilities," dated
March 18, 1981, as amended by the "Amendment to Agreement for Water Production and
Transmission Facilities," dated May 2, 1984 ("First Amendment"), and as amended by the
"Second Amendment to Agreement for Water Production and Transmission Facilities," dated
September 19, 1990 ("Second Amendment") (hereinafter collectively referred to as the "Project
Agreement") which provides for the implementation of a project consisting of conjunctive use
water wells, pumping, transmission and appurtenant facilities (hereinafter "Project").
B. A Third Amendment of the Project Agreement ("Third Amendment") has been
proposed which would, among other things, raise the equivalent basin production percentage for
Project water to 28,000 acre-feet per annum provided that any production of non -colored water
from the Project above 20,000 acre-feet per annum and up to 28,000 acre-feet per annum that
occurs after the date specified in the Third Amendment that is not matched with an equal amount
of colored water production from the Project area shall be subject to OCWD's basin equity
assessment (BEA).
C. SANTA ANA and IRWD wish to facilitate the implementation of the colored
water production contemplated by the Third Amendment by making this agreement regarding
colored water well sites.
D. This Agreement is entered into in recognition of the previous commitments
among the parties under the Project Agreement. Nothing contained herein is intended to be
consti Lied as concurrence by IRWD with any interpretation of the Project Agreement or this
Agreement contrary to its position that the policies and programs of OC" should afford equal
treatment to all producers.
E. The payment of consideration by IRWD to SANTA ANA under this Agreement is
intended to compensate SANTA ANA for the use of its property as well sites by IRWD. The
amount of this compensation is the result of a negotiated agreement between IRWD and SANTA
ANA which recognizes the amount of water produced from the Project and the value of these
well sites to both parties.
WHEREFORE, in consideration of the foregoing and the mutual covenants and promises
hereinafter contained and made, and subject to all the terms and conditions hereof, the parties
hereto agree as follows:
Section 1. SANTA ANA hereby leases to IRWD the sites depicted in Exhibit "A"
hereto for three (3) colored water production wells with capacities of 4,000 acre-feet per annum
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each and associated treatment facilities (the "Well Sites"), commencing as to all Well Sites upon
the date that SANTA ANA notifies IRWD in writing that IRWD may have possession of the
Well Sites, not later than the first day of the first calendar month that begins after the effective
date of this Agreement specified in Section 4 hereof (the "Lease Commencement Date'). Exhibit
"A" is incorporated herein by this reference. IRWD shall pay SANTA ANA an aggregate lease
payment of $25,000 per month for the Well Sites, payable monthly in advance, connnencing
upon the Lease Commencement Date, until the date specified in Section 2. During the terms of
the leases and thereafter, IRWD shall be entitled to use the Well Sites for colored water
production and treatment, including colored water production necessary to satisfy the non -
colored water production matching requirements established by the Third Amendment.
Section 2. The lease payment of $25,000.00 per month shall be paid by IRWD to
SANTA ANA for the Well Sites for the first ten (10) years following the Lease Commencement
Date. Beginning on the eleventh anniversary of the Lease Commencement Date (July 1, 2009),
the monthly lease payment shall be recalculated annually based upon the following formula:
Aggregate monthly
lease payment for all
Well Sites, including
Additional Sites =
Section 3.
Production of non -
colored water from
Project for previous
fiscal year X
between 20,000 and
28,OOOAF
8,000 AF
% change in the
effective MWD rate
for replenishment
water or the X $125,000.00
equivalent thereof 12
IRWD agrees that the wells on the Well Sites shall be designed to
optimize production from the colored water zones, but the parties acknowledge that there can be
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no assurance as to the actual production capability of a well. The parties further acknowledge
that the lease payment set forth herein was negotiated in contemplation of combined production
from the Well Sites at least equal to the 8,000 acre feet per annum necessary to satisfy the non -
colored water production matching requirements established by the Third Amendment. It is
understood and agreed between the parties hereto, however, that should production from the Well
Sites in any given year during the first ten (10) years following the Lease Commencement Date
not equal at least 8,000 acre feet, IRWD is still obligated to pay to SANTA ANA the entire lease
payment specified in Section 1, above. Should IRWD need additional sites to meet the 8,000
acre-foot required match amount, SANTA ANA shall, to the best of its ability lease additional
well site(s) to IRWD in mutually acceptable location(s) (each, an "Additional Site"), The lease
payments in Sections 1 and 2 shall include such additional well site(s). If SANTA ANA is
unable within the best of its ability to lease and convey such additional well site(s), the parties
shall meet and confer to determine and implement a reasonable alternative method of securing
for IRWD the benefit contemplated by this Agreement.
Section 4, This Agreement shall become effective when, if and only if the Third
Amendment becomes effective.
Section 5. The term of this Agreement shall be forty (40) years and shall terminate on
June 30, 2039. Prior to the end of the term, the parties shall meet and confer to renegotiate the
terms and conditions of this Agreement.
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Section b. The lease of the Well Sites and any Additional Sites shall be subject to the
following additional terms:
(a) CONSTRUCTION AND/OR ALTERATION BY IRWD.
(1) No structures, buildings, pipelines, appurtenances, improvements,
equipment or facilities shall be constructed, erected, altered or made on the Well Sites without
the prior written consent of SANTA ANA, which shall not be withheld unreasonably. SANTA -
ANA shall respond within thirty (30) calendar days of receipt of each written request. Any
conditions relating to the manner, method, design and construction of said structures, buildings,
pipelines, appurtenances, improvements, equipment or facilities fixed by SANTA ANA as a
condition to granting such consent; shall be conditions hereof as though originally stated herein.
(2) All improvements constructed by IRWD on the Well Sites shall be
constructed in strict compliance with detailed plans and specifications approved in writing by
W.11MV.-M 31-2 011
(3) In the event the parties hereto do not extend this Agreement at the
termination hereof, it is agreed between SANTA ANA and IRWD that at the termination of this
Agreement and any and all structures, buildings, pipelines, appurtenances, improvements,
equipment or facilities, including, but not limited to, water production wells and treatment
facilities (collectively "the improvements"), shall, at SANTA ANA's option, be either: (i)
removed or abandoned pursuant to all then applicable county, state and federal laws and
regulations; or, (ii) be quitclaimed to SANTA ANA via an executed quitclaim deed containing
all of IRWD's interests in such improvements for compensation to be paid to IRWD in the
amount of the then fair market value of the improvements.
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(b) LIENS.
IRWD shall not cause liens of any kind to be filed or placed against the
Well Sites, including without limitation, mechanic's liens, liens for materials, wages, labor or
services. If any liens are filed, and such liens are the result of any act, directive or action of
IRWD, its agents or employees, IRWD shall, upon receipt of written notice from SANTA ANA,
at IRWD's sole cost and expense, take whatever action(s) may be necessary to cause such liens
to be satisfied and discharged or to cause any such liens to be removed of record.
(c) REPAIR AND MAINTENANCE.
IRWD shall provide at its own cost and expense all repair, maintenance,
landscape services and supplies and trash disposal to the Well Sites.
(d) UTILITIES.
IRWD shall be responsible for and pay, prior to the delinquency date, all
charges for any and all utility series (including, but not limited to, telephone, electric, gas, water
and sewer services) supplied to the Well Sites.
(e) INSURANCE.
(1) IRWD shall obtain and keep in force during the term of this
Agreement a policy or policies of public liability insurance covering all injuries occurring on the
Well Sites. The policy or policies evidencing such insurance shall name SANTA ANA, its
officers, agents, employees and volunteers as additional insureds, and shall provide for a
combined coverage of bodily injury and property damage in the amount of not less than Five
Million Dollars ($5,000,000).
(2) IRWD shall obtain and keep in force during the term of this
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Agreement a policy or policies of fire insurance covering the improvements on the well sites
against all perils included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils ("all risk') as such term is used in the insurance
industry, including earthquake and flood. Included in the policy or policies of property and fire
insurance shall be a standard waiver of the right of subrogation against SANTA ANA by the
insurance company issuing said policy or policies.
(3) IRWD's insurance obtained pursuant to the foregoing paragraphs
(i) shall be carried with a company (or companies) licensed to do business in the State of
California, (ii) shall provide that such policies shall not be subject to material alteration or
cancellation without at ]cast thirty (30) calendar days' written notice to SANTA ANA, and (iii)
shall be primary, and any insurance carried by SANTA ANA shall be non-contributing. Prior to
the Lease Commencement Date and upon renewal of any such policy, IRWD shall submit'to
SANTA ANA the policies or such renewal policy, or a duly executed certificate or certificates
evidencing that the respective polic(ies) are in effect.
(f) INDEMNIFICATION,
IRWD shall defend, indemnify and save harmless SANTA ANA, its
officers, agents, employees and volunteers from and against any and all claims, demands, losses
or liabilities, of any kind or nature, which SANTA ANA, its officers, agents, employees and
volunteers may sustain or incur, or which may be imposed upon them, for injury to or death of
persons, or damage to property as a result of, or arising out of the use of the Well Sites by
IRWD, its officers, agents, employees, invitees or licensees, except to the extent any such injury
to or death of persons, or damage to property is proximately caused by the active negligence of
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SANTA ANA, its officers, agents, employees or volunteers or any act for which SANTA ANA,
its officers, agents, employees or volunteers may be strictly liable.
(g) TAXES AND ASSESSMENTS.
All taxes and assessments that become due and payable upon the Well
Sites shall be the full responsibility of IRWD. IRWD shall cause the respective taxes and
assessments to be paid prior to their due date.
(h) TOXIC MATERIALS.
(1) IRWD hereby warrants and represents that IRWD will comply
with all laws and regulations relating to the storage, use and disposal of Hazardous Materials.
Except for (i) chemicals and other Hazardous Materials used in the production, treatment or
disinfection of water or the construction, maintenance, rehabilitation or repair of the
improvements, and (ii) fiiel and other Hazardous Materials stored in a motor vehicle or other
power equipment for the exclusive operation of such vehicle or equipment and storage batteries
used for emergency power, IRWD shall not cause or permit the presence, use, generation or
storage of any Hazardous Material on, under, in or about, or the transportation of any Hazardous
Material to or from, the Well Sites; provided, that storage of any Hazardous Material within
clause (i) or (ii) of the exceptions shall not exceed 89 days. IRWD shall not cause or permit the
storage (for 90 days or more), release or disposal of any Hazardous Material on, under, in or
about the Well Sites. For purposes of this Agreement, the term "Hazardous Material" shall mean
any substance, material, or waste which is or becomes regulated by any local governmental
authority, the State of California, or the United States Government, including, but not limited to,
any material or substance which is (i) defined as a "hazardous waste", extremely hazardous
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waste", or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed
pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5
(Hazardous Waste Control Law), (ii) defined as "hazardous substance" under Section 25316 of
the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner
Hazardous Substance Account Act), (iii) defined as a "hazardous material", "hazardous
substance", or "hazardous waste" under Section 25501 of the California Health and Safety Code,-_
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv)
defined as a "hazardous substance" under Section 25281 of the California Health and Safety
Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum,
(vi) asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as
"hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (ix) designated as a""hazardous substance"
pursuant to Section 311 of the Clean Water Act, (33 U.S.C. Section 1317), (x) defined as
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq. (42 U.S.C. Section 6901) or (xi) defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601).
(2) SANTA ANA warrants that to the best of the actual knowledge of
the Executive Director of the Parks, Recreation and Community Services Agency of SANTA
ANA, the Well Sites comply with all applicable laws and governmental regulations including,
without limitation, all applicable federal, state, and local laws pertaining to air and water quality,
hazardous waste, waste disposal, and other environmental matters, including, but not limited to,
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the Clean Water, Clean Air, Federal Water Pollution Control, Solid Waste Disposal, Resource
Conservation Recovery and Comprehensive Environmental Response Compensation and
Liability Acts, and the California Environmental Quality Act, and the rules, regulations, and
ordinances of the city within which the Well Sites are located, the California Department of
Health Services, the Regional Water Quality Control Board, the State Water Resources Control
Board, the Environmental Protection Agency, and all applicable federal, state, and local agencies
and bureaus.
(3) IRWD agrees to indemnify, defend and hold SANTA ANA
harmless from and against any and all claims, actions, suits, proceedings, losses, costs, damages,
liability, deficiency, fines, penalties, punitive damages, or expenses (including without
limitation, attorney's fees), resulting from, arising out of, or based upon (i) the presence, release,
use, generation, discharge, storage, or disposal of any Hazardous Material caused to' be placed by
IRWD on, under, in or about, or the transportation of any such Hazardous Materials caused to be
transported by IRWD to or from, the Well Sites, or (ii) the violation, or alleged violation, by
IRWD of any statute, ordinance, order, rule, regulation, permit, judgment, or license relating to
the use, generation, release, discharge, storage, disposal, or transportation of Hazardous Materials
on, under, in, or about, to or from, the Well Sites. This indemnity shall include, without
limitation, any damage, liability, fine, penalty, punitive damage, cost, or expense arising from or
out of any claim, action, suit or proceeding for personal injury (including sickness, disease, or
death, tangible or intangible property damage, compensation for lost wages, business income,
profits or other economic loss, damage to the natural resource or the environment, nuisance,
pollution, contamination, leak, spill, release, or other adverse effect on the environment).
(i) DEFAULTS AND REMEDIES.
(1) In the event either party defaults in the perfonnance of any of the
obligations, covenants or agreements to be kept, done or performed by it under the terms of this
Agreement, or any other applicable Federal, State, or local law or regulation, including, but not
limited to, the provisions of Sections 1, 2 and 6(e) of this Agreement, the non -defaulting party
shall notify the defaulting party in writing of the nature of such default.
(2) The non -defaulting party shall, in such written instrument, set a
reasonable time within which correction of all such deficiencies is to be made. Unless otherwise
specified, a reasonable time for correction shall be thirty (34) days from the receipt by the
defaulting party of such written notice. If the defaulting party cannot reasonably correct or
remedy the breach within the time set forth in such notice, the defaulting party shall still be
required to commence to correct or remedy the violation within such time as set forth in the
notice and shall be required to diligently achieve such correction or remedy as soon thereafter as
possible.
(3) In the event of any material default and failure to cure, correct or
remedy the same by either party hereto as set forth above, the non -defaulting party may, at its
sole discretion, and in addition to or in lieu of any other remedies, terminate this Agreement.
SANTA ANA further reserves the right to terminate this Agreement in the event of the
occurrence of any of the following and IRWD's failure to cure, correct or remedy the same
following notice and opportunity to do so in the manner provided in paragraphs (1) and (2)
above: (i) if IRWD practices, or attempts to practice, any fraud upon SANTA ANA; (ii) if
IRWD willfully violates any orders or rulings of any regulatory body having jurisdiction over
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IRWD relative to this Agreement, provided that IRWD may contest any such orders or rulings by
appropriate proceedings conducted in good faith, in which case no breach of this. Agreement shall
be deemed to have occurred; or (iii) if IRWD causes, maintains or permits any nuisance in, on or
about the Well Sites or commits, allows or suffers to be committed any waste in, on or about the
Well Sites.
(4) Any failure or delay by either party in asserting any of its rights of
remedies as to any default shall not operate as a waiver of any default or any such rights or
remedies, or deprive such party of its right to institute and maintain any actions or proceedings
which it may deem necessary to protect, assert or enforce any such rights or remedies.
0) INSPECTION.
SANTA ANA or its authorized representative shall have the right, at all
reasonable times and upon reasonable advance notice to IRWD, to inspect the Well Sites in
accompaniment of a representative of IRWD, to determine if IRWD is complying with all
provisions of this Agreement.
(k) NO WAIVER OF RIGHTS.
The failure of SANTA ANA or IRWD to insist upon strict performance of
any of the terms, conditions and covenants in this Agreement shall not be deemed a waiver of
any right or remedy that SANTA ANA of IRWD may have, and shall not be deemed a waiver or
any right or remedy for a subsequent breach or default or the terms, conditions and covenants
herein contained.
(1) HOLDING OVER
In the event IRWD shall continue in possession of the Well Sites after the
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term of this Agreement, such possession shall not be considered a renewal of this Agreement but
a tenancy from month to month and shall be governed by the conditions and covenants contained
in this Agreement.
Section 7. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
Section 8. This Agreement contains the entire agreement between the parties
respecting the subject matter of this Agreement and supersedes all prior understaridings and
agreements, whether oral or in writing, between the parties respecting the subject matter of this
Agreement.
Section 9. Each party has received independent legal advice from its attorneys with
respect to the advisability of executing this Agreement and the meaning of the provisions hereof.
The provisions of this Agreement shall be construed as to their fair meaning, and not for or
against any party based upon any attribution to such party as the source of the language in
question.
Section 10. Neither party may assign or transfer any rights, interests, duties or
obligations of performance under this Agreement, whether by assignment or novation, without
the prior written consent of the other; provided, however, that claims for money due or to
become due to SANTA ANA under this Agreement may be assigned to a bank, trust company or
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other financial institution, or to a trustee in bankruptcy, without such approval.
Section 11. This Agreement is intended to benefit only the parties hereto and no other
person or entity has or shall acquire any rights hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first hereinabove written.
ATTEST;
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APPROVED AS TO FORM:
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Gd j' SSrsG s
i t Attorney
CITY OF SANTA ANA, a Charter City of the
State of Calif rnia;
By
Mj el A. Polido Mayor
as to content
City Manager
IRVINE RANCH WATER DISTRICT, a
California water district
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APPROVED AS TO FORM:
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SANTA ANA
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EXHIBIT "A"
SANTA ANA
Ctty CouncH Titk
Ln Agenda Date THIRD AMENDMENT TO DYER ROAD
ocrosm 4, W9 WELL FIELD AND LEASE AGREEMENT
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