HomeMy WebLinkAbout25B - AGMT ORANGE COUNTY WATERREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
AUGUST 1, 2017
TITLE:
APPROVE AN AGREEMENT WITH ORANGE
COUNTY WATER DISTRICT FOR SALES
AND DISTRIBUTION OF RECYCLED
WATER
(STRATEGIC PLAN NO. 4, 1 &J5, 2)
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑
As Recommended
❑
As Amended
❑
Ordinance on 1s' Reading
❑
Ordinance on 2nd Reading
❑
Implementing Resolution
❑
Set Public Hearing For
CONTINUED TO
FILE NUMBER
Approve an agreement with Orange County Water District for sale and distribution of recycled
water in the City of Santa Ana for a period of thirty years ending June 30, 2047.
DISCUSSION
On September 21, 1988, the City of Santa Ana entered into an agreement (Exhibit 1) with Orange
County Water District (OCWD) to participate in the Green Acres Project for distribution and sale
of recycled water within the City of Santa Ana. This agreement has served the City and OCWD
well. Several Santa Ana water customers in the southwest portion of the city currently use
recycled water for irrigation, saving them money and preserving the City's potable water supply
for higher uses.
The existing agreement mandates a maximum retail rate for recycled water not to exceed 80% of
the City's potable water rate. That is to say, if the City charged $1.00 per hundred cubic feet (ccf)
of potable water, the agreement caps the City's recycled water rate at $0.80/ccf; i.e., a discount of
$0.20/ccf. This mandatory discount was originally intended to entice potential recycled water
users and to promote program development and system expansion. The policy established
reasonable means to achieve legitimate policy ends.
There are two reasons why this policy is no longer feasible. First, since its inception, the Green
Acres Project has received subsidies for recycling from the Metropolitan Water District of
Southern California (MET). That arrangement is now ending, and program rates need to adjust
based on new costs.
Second, in May of 2015, in the matter of Capistrano Taxpayers Association, Inc. v. City of San
Juan Capistrano (Case No. G048969), the California 4th District Court of Appeal, Division Three,
ruled that water rates set by water utilities must reflect the cost of service, and therefore may not
be indexed or tiered in an arbitrary fashion strictly to advance other policy goals. This decision
interprets amendments to the California Constitution that occurred after the original agreement
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APPROVE AN AGREEMENT WITH ORANGE COUNTY WATER
DISTRICT FOR SALES AND DISTRIBUTION OF RECYCLED WATER
August 1, 2017
Page 2
(A-88-129) was implemented. The Courts' interpretation of California's Constitution and the
changing nature of its water supplies compel OCWD to modify its agreements with Green Acres
Project retailers, including Santa Ana.
The new agreement presented for consideration (Exhibit 2) removes the 80% rate cap, and
permits the City to set rates at cost. The City's Water Resources Division has tasked a consultant
to determine the cost of service, and to provide guidance on any recommended changes in
recycled water rates that may be necessary. Upon completion of the analysis, staff will return to
Council if changes are appropriate. Staff is not proposing changes to retail recycled water rates at
this time.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal #4 - City Financial Stability,
Objective #1 (maintain a stable, efficient and transparent financial environment); and, Goal #5 -
Community Health, Livability, Engagement & Sustainability, Objective #2 (expand opportunities
for conservation and environmental sustainability).
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact associated with this action.
Public Works Agency
FM/NS
Exhibits: 1. Agreement dated September 21, 1988 (A-88-129)
2. Agreement dated July 1, 2017
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THIS AGREEMENT, made and entered into as of Sept. 21
1988, by and between the ORANGE COUNTY WATER DISTRICT (here-
inafter "OCWD") and the CITY OF SANTA ANA, (hereinafter
"RETAILER").
RECITALS
A. OCWD was created by the OCWD Act, Ch. 924, Stats.
1933, as amended, for the purpose of protecting and managing
the Orange County groundwater basin. The OCWD Act empowers
OCWD to manage the groundwater basin, to provide for the
conservation of the quantity and quality of water in the
groundwater basin, to conserve and reclaim water within or
outside of the boundaries of OCWD, to sell or otherwise put
to beneficial use any water or reclaimed wastewater in order
to conserve groundwater resources, and to distribute water to
persons in exchange for ceasing or reducing the extraction of
groundwater from the groundwater basin.
B. OCWD purchases imported water from the Metropolitan
Water District of Southern California (hereinafter "MWD"),
through its member public agencies, for spreading and replen-
ishment purposes, and obtains wastewater from the County
Sanitation Districts of Orange County (hereinafter "CSDOC")
for renovation -reclamation and groundwater injection.
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C. Reclaimed wastewater currently produced by OCWD is
suitable for a number of non -potable uses, including, but not
limited to, landscape irrigation and industrial uses.
D. RETAILER is a municipal corporation organized and
existing pursuant to the laws of the State of California.
RETAILER is the exclusive retail water purveyor, including
water for residential, industrial, commercial, public agency,
agricultural and other uses, within RETAILER's boundaries.
RETAILER currently distributes potable water in part
purchased from the MWD and in part produced from groundwater
within its boundaries. The corporate and water service
boundaries of RETAILER are within the jurisdictional
boundaries of OCWD.
E. Landscape irrigation and industrial water users
within the jurisdictional and service boundaries of RETAILER
currently either purchase potable water from RETAILER for
their use, or produce water from the groundwater basin by
means of their own facilities for their own use, which
private groundwater production is under the jurisdiction and
control of OCWD.
F. OCWD desires to construct, operate and maintain a
water treatment facility, transmission mains and distribution
pipeline system (including mainlines and service lines) and,
in some cases, on-site plumbing, to be known as the "Green
Acres Project," for the purpose of reclaiming wastewater
received from CSDOC (hereinafter, "Project Water") and
distributing the Project Water for appropriate landscape
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irrigation and industrial purposes in order to supplement and
conserve the supply of potable groundwater available to the
residents and water users within the boundaries of OCWD. A
plat depicting the location of the facilities comprising the
Green Acres Project which OCWD intends to construct, operate
and maintain is set forth as Exhibit "A" hereto.
G. OCWD and RETAILER mutually acknowledge that the use
of reclaimed water for landscape irrigation is of mutual
benefit to OCWD and RETAILER in fulfilling their joint
responsibilities for the conservation of water resources in
accordance with Sections 13550 and 13551 of the California
Water Code.
H. OCWD desires to sell Project Water to RETAILER for
resale by RETAILER to appropriate landscape irrigation and
industrial water users within the service boundaries of
RETAILER, and RETAILER desires to purchase Project Water from
OCWD for such resale purposes.
AGREEMENTS
NOW, THEREFORE, in consideration of the facts recited
above and the terms, covenants and conditions herein
contained, the parties hereto agree as follows:
SECTION ONE: FACILITIES FOR DELIVERY AND DISTRIBUTION
OF PROJECT WATER
1.1 OCWD shall enter into a contract or contracts on or
before October 1, 1988 for the construction of the Green
Acres Project, and all facilities to produce, transport and
distribute Project Water for the herein specified purposes
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(hereinafter, the "Project Facilities"). A plat depicting
that portion of the Project Facilities which OCWD shall
construct, operate and maintain within the boundaries of
RETAILER is attached hereto as Exhibit "A". OCWD shall cause
the Project Facilities to be completed and operational on or
before June 1, 1991, and RETAILER shall incur no cost or
liability in connection with the design or construction of
the Project Facilities.
1.2 The Project Facilities to be constructed shall
include a distribution pipeline system from the site of the
Green Acres Project Water Treatment Facility, to be located
at 10500 Ellis Avenue, Fountain valley, California, to the
point of connection to each of the proposed Project Water
customers within the boundaries of RETAILER (hereinafter,
"Project Customers"), for the purpose of distributing Project
Water to RETAILER at the points of connection of the Project
Customers for purchase by RETAILER and resale to the Project
Customers. The names, addresses and anticipated annual
Project Water demands of each Project Customer are set forth
in Exhibit "B" hereto and incorporated herein by this
reference.
1.3 OCWD shall obtain all permits required to construct
and operate the Project Facilities, including the
distribution pipeline system and ancillary facilities to be
located within the public rights of way as shown on Exhibit
"A" hereto, as well as those facilities which are necessary
to produce, deliver and distribute Project Water for the
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herein described purposes; and OCWD shall further obtain
those permits that Project Customers may be required to
obtain. OCWD shall cause the Project Facilities within the
boundaries of RETAILER to be constructed in accordance with
the construction standards of RETAILER in effect as of the
date of the award by OCWD of the contract or contracts for
such construction. The Project Facilities shall be owned by
OCWD; provided, however, that RETAILER shall perform on
behalf of OCWD all maintenance, repair and replacement of the
Project Facilities located within the boundaries of RETAILER,
pursuant to paragraph 4.1 hereinbelow. In this regard:
1.3.1 OCWD agrees to restore roads, streets,
alleys, avenues, highways, drainage facilities, or any
other public way or property used for construction,
operations, or maintenance of the Project Facilities
within RETAILER's boundaries to at least the same
condition existing prior to construction, operation or
maintenance of the Project Facilities, to the reasonable
satisfaction of RETAILER's Director of Public Works.
1.3.2 OCWD agrees to provide adequate
safeguards to afford security to life and property
during construction, operation, and maintenance of the
Project Facilities, with due regard being given to other
existing uses of public roads, streets, alleys, avenues,
highways, drainage facilities, public ways and property
within the boundaries of RETAILER.
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1.3.3 OCWD agrees to use its best efforts to
minimize noise, dust, pollution and problems relating to
police and fire protection within the boundaries of
RETAILER throughout construction, operation and
maintenance of the Project Facilities within RETAILER's
boundaries.
1.3.4 OCWD agrees to construct, operate and
maintain the Project Facilities within the boundaries of
RETAILER in conformance with the "Standard Provisions
for Water System Construction in the City of Santa Ana,"
as the same now reads or as may hereafter be amended at
the time of such Project Facilities construction,
operation or maintenance, as the case may be, a copy of
which is on file in the office of RETAILER's Director of
Public Works, and to which copy reference is hereby made
for full particulars.
1.3.5 The parties understand and agree that
OCWD's rights to construct, maintain, operate, inspect,
repair and replace the Project Facilities within the
lands and rights-of-way of RETAILER do not constitute
vested property rights and are expressly subject to and
governed solely by this Agreement.
1.4 OCWD shall, at no cost to RETAILER, provide a
metering device meeting RETAILER's specifications, to be
owned, operated and maintained by RETAILER, for the purpose
of measuring the quantity of Project Water purchased by
RETAILER and resold by RETAILER to each 'Project Customer.
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RETAILER shall be responsible for ensuring the accuracy of
the metering device. Any costs incurred in modifying the
size of existing RETAILER meters shall be the responsibility
of OCWD. The quantity of Project Water measured by the
meters to be owned, operated and maintained by RETAILER shall
be the sole basis for determining the quantity of Project
Water delivered and sold by RETAILER to each Project Customer
under Section Two of this Agreement. In the event that a
meter measuring the quantity of Project Water delivered by
RETAILER to a Project Customer indicates a lesser quantity
than OCWD's meter measuring the quantity of Project Water
delivered to RETAILER for resale to a Project Customer, OCWD
shall be responsible for the cost of such difference, and
RETAILER shall not be liable therefor. In the event RETAILER
has a separate metering device serving exclusively non -
potable uses on the premises of a Project Customer, OCWD may
sell Project Water to RETAILER by connecting the Project
Facilities distribution pipeline system directly to the
separate non -potable meter so long as the standards and
requirements of RETAILER and any other governmental agency
having jurisdiction over the quality of Project Water are
satisfied.
1.5 In order to avoid the risk that Project Water may
enter into RETAILER's potable water distribution system, OCWD
shall, at its own expense, install on RETAILER's potable
water system a backflow prevention device or devices approved
by RETAILER at a location or locations designated in writing
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by RETAILER. Such backflow prevention devices shall be
installed prior to the commencement of deliveries of Project
Water to a particular connection point. OCWD shall provide
for separate marking of the non -potable Project Water system
in accordance with standards and regulations in existence as
of the date of this Agreement.
1.6 The Project Water distribution pipeline system
shall be constructed by OCWD with sufficient capacity to
allow RETAILER to serve known landscape irrigation and
industrial water users. OCWD shall sell to RETAILER, and
RETAILER shall purchase from OCWD, sufficient quantities of
Project Water for RETAILER to sell to the projected Project
Customers as shown on Exhibit "B," and such other and future
Project Customers as are provided for herein, but only to the
extent that RETAILER has contracts with such other and future
Project Customers for the sale of Project Water; provided,
however, that a water user within the service boundaries of
RETAILER shall become a Project Customer only with the
approval of both OCWD and RETAILER; and provided further,
that OCWD shall have the sole discretion to determine whether
to expand the Project Facilities or the production and
distribution capacity of the Project Facilities to meet any
future demand for Project Water that may be generated within
the boundaries of RETAILER. In this regard, the listing of
Project Customers attached hereto as Exhibit "B" represents a
listing of both the known Project Customers as of the date of
this Agreement, and potential future Project Customers. OCWD
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and RETAILER mutually understand and agree that additional
landscape irrigation and/or industrial water users within the
boundaries of RETAILER may at some future time be served with
Project Water and become Project Customers without the
necessity of amending this Agreement. All future water users
within the service boundaries of RETAILER who become Project
Customers shall execute an agreement for the purchase of
Project Water in the form attached hereto as Exhibit "C", and
further shall be subject to the Project Rules to be adopted
by RETAILER pursuant to paragraph 5.3 hereinbelow.
SECTION TWO: PURCHASE AND SALE OF PROJECT WATER
2.1 OCWD shall complete the construction and commence
operation of the Project Facilities by June 1, 1991, barring
delays due to unforeseeable causes beyond the control and
without the fault or negligence of OCWD or its contractors.
If OCWD is permitted by all regulatory agencies having
jurisdiction over OCWD to distribute Project Water, then,
during the term of this Agreement, RETAILER shall have the
exclusive right to purchase Project Water from OCWD, at the
point of connection to each Project Customer, and to resell
Project Water to the Project Customers shown on Exhibit "B,"
and such other landscape irrigation and industrial water
users within the boundaries of RETAILER that may be added as
Project Customers in accordance with paragraph 1.6 above.
2.2 Concurrently with and as a condition precedent to
any obligations of OCWD or RETAILER pursuant to this
Agreement, RETAILER shall commit to purchase Project Water
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for RETAILER's own use, and/or enter into separate agreements
with the proposed Project Customers in substantially the form
to be attached to and herein incorporated as Exhibit "C" for
the purchase by Project Customers of Project Water from
RETAILER, contingent upon its availability from OCWD. In the
event RETAILER and other purveyors of Project Water are
unable by December 1, 1988 (or as otherwise agreed to in
writing by OCWD) to commit to purchase for their own use, or
enter into agreements for the sale of, at least fifty percent
(50%) of the total demand, as set forth in Table 1 of Exhibit
"B," for Project Water each year during the term hereof, this
Agreement shall terminate.
2.3 RETAILER shall commence the purchase and resale of
Project Water upon receiving at least sixty (60) days advance
written notice from OCWD of the availability of such Project
Water.
2.4 RETAILER shall purchase the Project Water from
OCWD, at the point of its metered connection, for an amount
to be determined by the OCWD Board of Directors in its
discretion, not to exceed eighty percent (80%) of the "area
groundwater cost" as defined in Section 2.5 hereinbelow. The
point of connection and sale of the Project Water from OCWD
to RETAILER shall be at the meter which measures the flow of
Project Water to each Project Customer, as described in
Section 1.4 hereinabove.
2.5 For the purpose of this Agreement, the "area
groundwater cost" shall be the same as the fixed and variable
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costs of groundwater production as listed in the most recent
OCWD Engineer's Report prepared pursuant to Section 31.5(a)
of the OCWD Act, plus the replenishment assessment imposed by
OCWD pursuant to the authority contained in Section 27 of the
OCWD Act, and any additional replenishment assessments which
may be imposed by OCWD pursuant to the authority contained in
Section 27.1 of the OCWD Act, which replenishment assessments
and additional replenishment assessments are established in
April of each year but do not become effective until the
following July of each year. The parties mutually recognize
and agree that the area groundwater cost may change each year
during the term of this Agreement, as a function of changes
in the cost of operation and maintenance, energy, the
replenishment assessment levied by OCWD, and the levy of any
additional replenishment assessment by OCWD.
2.6 The governing body of RETAILER shall establish the
rate for the resale of Project Water to each Project
Customer, in an amount not to exceed eighty percent (80%) of
the "potable water" rate established by RETAILER.
2.7 RETAILER shall read the Project Water meter for
each Project Customer on a sixty (60) day cycle. The Project
Water meter reading date shall coincide with RETAILER'S
reading of the meter which measures the quantity of potable
water delivered by RETAILER to the Project Customer that
month. Within sixty (60) days thereafter, RETAILER shall
transmit to OCWD a statement setting forth the Project Water
rate established by RETAILER pursuant to paragraph 2.6 during
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that billing period, a description of the maintenance, repair
and replacement activities of RETAILER, and the amount of
such actual costs incurred by RETAILER, pursuant to Section
4.1 hereinbelow during that billing period, and indicating,
for each Project Customer, the current meter reading, the
previous meter reading, and the total quantity of Project
Water purchased from OCWD and resold by RETAILER to such
Project Customer during the billing period. Together with
this statement, RETAILER shall transmit to OCWD payment in
accordance with paragraphs 2.4 and 2.5 for the Project Water
purchased from OCWD by RETAILER and resold by RETAILER to all
of the Project Customers during the billing period, after
deducting therefrom the actual costs incurred by RETAILER in
maintaining, repairing and replacing the Project Water
distribution system within RETAILER's boundaries as set forth
in Section 4.1 hereinbelow.
SECTION THREE: PROJECT WATER QUALITY REGULATIONS
3.1 OCWD shall deliver and sell to RETAILER pursuant to
this Agreement Project Water that shall conform to all
current and future requirements established by the California
Regional Water Quality Control Board - Santa Ana Region, and
all other federal, state and local agencies having
jurisdiction to fix minimum standards for the anticipated
landscape irrigation and industrial uses of the Project Water
by the Project Customers listed in Exhibit "B" hereto. The
anticipated quality of Project Water shall be as shown on
Exhibit "D" attached hereto and incorporated herein, or as
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subsequently amended to conform to any future regulatory
requirements for such use; provided, however, that OCWD shall
not have any obligation to modify the quality of Project
Water to meet the needs of any particular Project Customer.
3.2 During the term of this Agreement, OCWD shall pay
all costs imposed by any and all governmental agencies having
jurisdiction over the quality or use of Project Water for the
issuance of any permits, licenses or approvals required for
the production, treatment, distribution or sale of Project
Water. OCWD further shall be responsible for paying any
charges, fees, surcharges, assessments or other sums imposed
or levied upon Project Water by the Municipal Water District
of orange County.
3.3 OCWD shall inform RETAILER promptly after becoming
aware of any proposed or actual modifications by any agency
having jurisdiction over the quality of Project Water to any
requirements governing the minimum standards of quality for
or use of Project Water, or of any changes in the legally
permissible uses which might affect the use of the Project
Water sold by OCWD to RETAILER for resale by RETAILER to
Project Customers, and OCWD shall bear all costs of
conforming to any such future requirements. RETAILER shall
have no obligation to pay the cost of meeting any future
requirements governing the standards of quality for, or use
of, Project Water.
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SECTION FOUR: OPERATING OBLIGATIONS OF THE
PARTIES.
4.1 During the term of this Agreement, OCWD shall
manage, operate and maintain the Project Facilities in an
efficient manner and in accordance with the highest standards
of skill and workmanship; provided, however, that OCWD hereby
contracts with RETAILER for the performance by RETAILER of
the actual maintenance, repair and replacement responsibil-
ities with respect to those Project Facilities located within
the service boundaries of RETAILER. RETAILER recognizes the
special quality considerations relating to Project Water, and
RETAILER shall perform its maintenance, repair and
replacement responsibilities in an efficient manner and in
accordance with the highest standards of skill and
workmanship. OCWD retains the right, upon sixty (60) days
written notice to RETAILER, to make repairs to Project
Facilities within the service boundaries of RETAILER if they
are not made by RETAILER in a timely or efficient manner.
RETAILER shall receive as a credit against all monies 'due
OCWD pursuant to paragraph 2.8 hereinabove for the sale of
Project Water the cost of such maintenance, repair and
replacement activities actually undertaken by or on behalf of
RETAILER, which costs shall include the actual labor,
material and equipment costs, plus overhead costs, incurred
by RETAILER and necessary for such maintenance, repair and
replacement activities.
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4.2 Notwithstanding the provisions of paragraph 4.1,
the operating responsibility of OCWD with respect to the
Project Facilities shall include the maintenance of quality,
quantity and pressure of the Project Water, and compliance
with all regulatory requirements and conditions applicable to
the distribution and sale of Project Water, to the point of
connection to each Project Customer.
4.3 RETAILER shall, at no cost to OCWD, assume
ownership of, service, maintain and read the Project Water
meter and valve set and meter box/vault for each Project
Customer in the same manner that RETAILER would for a
customer service meter attached to its potable water system.
RETAILER further shall, at no cost to OCWD, be responsible
for customer service functions relating to Project Customers,
including but not limited to billing and collection of
payments from Project Customers for the Project Water, record
keeping, and notification to OCWD of the quantity of Project
Water delivered through the Project Customer's meter during
each meter reading period.
4.4 OCWD shall have the right to review the books,
records and accounts maintained by RETAILER relating to the
Project Water and Project Customers during normal business
hours, upon forty-eight (48) hours prior written notice to
RETAILER.
4.5 OCWD shall operate the Project Facilities in such a
manner that Project Water shall be delivered to the point of
connection to each Project Customer on a continuous basis at
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a pressure of not less than sixty (60) pounds per square inch
between the hours of 8:00 P.M. and 6:00 a.m., and not less
than twenty (20) pounds per square inch between the hours of
6:00 a.m. and 8:00 p.m.
4.6 Except as provided in paragraph 9.6 hereinbelow, in
the event that, at any time during the term of this
Agreement, OCWD for any reason cannot or chooses not to
produce Project Water from its Green Acres Project Water
Treatment Facility described in paragraph 1.2 hereinabove,
OCWD shall provide through the Project Facilities, or
otherwise, at a cost equal to the cost of Project Water,
sufficient water of a quality at least equal to the quality
of Project Water to meet the landscape irrigation and
industrial water needs of all of the Project Customers;
provided, however, that OCWD shall have no such obligation in
the event that Project Water cannot be delivered to Project
Customers due to damage to, breaks or other disruptions in
the distribution facilities transporting Project Water to
Project Customers.
SECTION FIVE: PROJECT WATER RULES AND REGULATIONS.
5.1 All Project Water produced by OCWD for delivery and
sale to RETAILER shall be in accordance with the terms and
conditions of the discharge requirements and primary user
permit for the Project Water issued to OCWD by the California
Regional Water Quality Control Board - Santa Ana Region.
OCWD has obtained and shall maintain a blanket primary user
permit for the production, distribution and sale of Project
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Water, and shall at all times maintain such permit and bear
all costs in complying with all present and future provisions
thereof and all renewals or subsequent such permits.
5.2 OCWD shall promulgate and enforce rules and regula-
tions regarding the distribution, delivery and sale of
Project Water to RETAILER, and governing the use of Project
Water resold by RETAILER to Project Customers (hereinafter,
the "Project Rules"). OCWD shall pay all costs incurred in
the drafting and preparation of the Project Rules. OCWD
shall obtain all requisite certifications and approvals from
all federal, state and local agencies having jurisdiction
over the production, quality and use of Project Water,
including, but not limited to, the California Regional Water
Quality Control Board - Santa Ana Region, and the State of
California Department of Health, that such Project Rules
comply with the regulations, requirements and orders of such
regulatory agencies.
5.3 OCWD shall transmit to RETAILER such approved
Project Rules for adoption by RETAILER, and RETAILER shall,
within ninety (90) days after receipt thereof, incorporate
the Project Rules into RETAILER's promulgated rules and
regulations governing the distribution, delivery and sale of
water within the service boundaries of RETAILER. Promptly
upon adoption, RETAILER shall transmit to OCWD RETAILER'S
adopted Project Rules, and RETAILER shall notify OCWD of any
amendments to or modifications of the Project Rules adopted
by RETAILER. Should OCWD choose either to make reasonable
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amendments or modifications to the Project Rules not contrary
to this Agreement, or be required by any governmental agency
exercising jurisdiction over the distribution, sale or use of
the Project Water tomodify or amend the Project Rules, OCWD
shall promptly furnish such modifications or amendments to
RETAILER; and RETAILER shall, after being provided a ninety
(90) day period in which to review, comment upon, and/or meet
and confer with OCWD regarding such proposed modifications or
amendments, incorporate such modifications or amendments into
RETAILER's adopted rules and regulations.
5.4 RETAILER shall include in its promulgated rules and
regulations provisions requiring, whenever feasible and if
Project Water is available, that any new or future customer
of RETAILER, as a condition to receiving potable water
service from RETAILER, to become a Project Customer and to
accept and use Project Water in lieu of RETAILER's potable
water supply for appropriate landscape irrigation and
industrial purposes. RETAILER shall further include in its
promulgated rules and regulations a requirement that any new
or future Project Customer permit representatives of OCWD and
RETAILER to enter the premises of the Project Customer at all
reasonable times for the purpose of monitoring, inspecting,
analyzing and observing the Project Customer's on-site
Project Water facilities and the utilization by the Project
Customer of Project Water.
5.5 For purposes of paragraph 5.4 of this Agreement,
"feasibility" shall be presumed if OCWD and RETAILER mutually
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determine in their discretion that Project Water is available
and that the Project Facilities can accommodate the new or
future landscape irrigation or industrial water customer of
RETAILER. For purposes of Section 5.4 of this Agreement, the
use of Project Water for landscape irrigation or industrial
uses shall be presumed "appropriate" if the use of Project
Water by a new or future Project Customer for landscape
irrigation or industrial applications will neither violate
any minimum water quality or health standards established by
any federal, state or local agency having jurisdiction over
the quality of Project Water, nor significantly and adversely
affect either the Project Customer's plantings or the
industrial processes or products served by the Project Water.
5.6 In connection with RETAILER's adoption of the
Project Rules as part of its rules and regulations, and at
the request of RETAILER, OCWD shall cooperate with and assist
RETAILER in obtaining from the State of California Water
Resources Control Board any necessary certifications,
findings or orders authorized under Sections 13550 and 13551
of the California Water Code to require the use of Project
Water for landscape irrigation uses within the service
boundaries of RETAILER.
5.7 The parties understand and agree that Project Water
delivered and sold by OCWD to RETAILER pursuant to the terms
of this Agreement has limited uses, and OCWD shall deliver
and sell to RETAILER Project Water only for those uses and
purposes which are legally permissible under the laws of the
25B-21
-19-
EXHIBIT 1
JDK:bc: 10/10/88
State of California and the rules, regulations and directions
of the appropriate federal, state and local regulatory
agencies exercising jurisdiction over the quality and use of
Project Water. in this regard, OCWD and RETAILER shall
cooperatively enforce Project Rules limiting the use of
Project Water to legally permissible landscape irrigation and
industrial applications, and shall monitor the use of Project
Water by Project Customers to safeguard against any misuse or
improper application of Project Water by Project Customers.
SECTION SIX: PROJECT WATER DELIVERY TO EXCLUSIVE GROUND-
WATER USERS
6.1 This Section Six shall apply only with respect to
water users located within the Green Acres service area
boundaries and within the service boundaries of RETAILER who,
as of the date of this Agreement, are not presently served
potable water by RETAILER for their landscape irrigation
uses, but who rely instead exclusively upon their own private
groundwater production to satisfy their landscape irrigation
demands (such water users are hereinafter referred to as
"Groundwater Customers").
6.2 With the assistance and cooperation of OCWD,
RETAILER shall use its best efforts to enter into agreements
with each Groundwater Customer, under which the Groundwater
Customer shall agree not to produce groundwater to satisfy
its landscape irrigation demands, and purchase from RETAILER
and use Project Water in lieu of groundwater for landscape
irrigation purposes. In consideration for purchasing and
25B-22
-20-
EXHIBIT 1
JDK:bc: 10/10/88
using Project Water in lieu of groundwater, RETAILER shall
sell Project Water to each Groundwater Customer at a rate
equal to the variable groundwater production cost, including
any Replenishment Assessment and additional Replenishment
Assessment imposed by OCWD pursuant to Sections 27 and 27.1
of the OCWD Act, as shown in the most recent OCWD Engineer's
Report prepared pursuant to Section 31.5(a) of the OCWD Act.
6.3 RETAILER shall read the Project Water meter for
each Groundwater Customer at the same time during each sixty
(60) day cycle, and shall perform the same customer service
functions for Groundwater Customers that RETAILER performs
for Project Customers pursuant to paragraph 4.3 hereinabove.
6.4 Within sixty (60) days after reading the meters of
Groundwater Customers as set forth in paragraph 6.3
hereinabove, RETAILER shall forward to OCWD a statement
indicating, for each Groundwater Customer, the current meter
reading, the previous meter reading, and the total quantity
of Project Water delivered and sold to RETAILER for resale to
such Groundwater Customer during the billing period, together
with payment for the Project Water purchased by all
Groundwater Customers during the preceding month. The
payments to be made by RETAILER to OCWD herein shall comprise
the amounts actually owed by each Groundwater Customer to
RETAILER, less a sum representing ten dollars ($10.00) for
each acre foot of Project Water purchased by the Groundwater
Customers from RETAILER. Commencing in the year in which
Project Water deliveries commence under this Agreement, the
25B,2i3
EXHIBIT 1
JDK:bc: 10/10/88
credit to RETAILER of ten dollars ($10.00) shall be adjusted
annually in accordance with the Consumer Price Index
published by the United Stated Department of Labor for the
Long Beach - Santa Ana - Anaheim metropolitan area. This
annually adjusted credit to RETAILER shall serve as full and
adequate compensation to RETAILER for the costs incurred by
RETAILER in assuming ownership of, servicing, maintaining and
reading the Project Water meter for each Groundwater Customer
in the same manner that RETAILER would for a customer service
meter attached to its potable water system, and for providing
to the Groundwater Customers those customer services
functions provided by RETAILER to Project Customers pursuant
to -paragraph 4.3 hereinabove.
6.5 In the event either that a Groundwater Customer
abandons its groundwater production facility or that OCWD
determines that a Groundwater Customer is no longer capable
of producing groundwater for its landscape irrigation needs,
OCWD shall have the exclusive authority and discretion,
without the necessity of amending this Agreement, to remove
such water user from the designation of "Groundwater
Customers." In such event, the former Groundwater Customer
shall be treated as a Project Customer for all purposes
hereunder, including but not limited to the retail sale of,
and billing and payments for, Project Water.
SECTION SEVEN: INDEMNITY AND INSURANCE
7.1 OCWD shall save RETAILER harmless from and against
and shall indemnify RETAILER from any liability, loss, costs,
25PA;-IT 1
JDK:bc: 10/10/88
expenses or damages however caused by reason of any injury
(whether to body, property, or personal or business character
or reputation) sustained by or to any person or property by
reason of any act, neglect, default, or omission of OCWD or
any of its agents, employees, or representatives, or caused
by reason of the design, construction, operation or
maintenance of the Project Facilities, or the distribution
and sale to RETAILER for resale purposes herein of Project
Water that does not meet the quality standards set forth in
Title 22 of the California Administrative Code; provided,
however, that OCWD shall not be responsible for the negligent
operation, maintenance or repair of the Project Facilities
within RETAILER'S service boundaries by RETAILER, the
negligent operation, maintenance or repair by RETAILER or any
Project Customer or Groundwater Customer of Project Water
distribution and storage facilities located on the lands of
any Project Customer or Groundwater Customer, and/or the
misuse or misapplication of the Project Water on the Project
Customer's or Groundwater Customer's side of the Project
Water meter by any person, including RETAILER or any Project
Customer or Groundwater Customer. If RETAILER is sued in any
court for damages by reason of any of the acts for which OCWD
is required to indemnify RETAILER in this paragraph 7.1,
including but not by way of limitation, damages arising out
of a products liability claim, OCWD shall defend said action
(or cause same to be defended) at its own expense and shall
pay and discharge any and all amounts of judgment that may be
25B-25
-23-
EXHIBIT 1
JDK:bc: 10/10/88
rendered in any such action. If OCWD fails or neglects to so
defend in said action, RETAILER may defend the same and any
expenses, including reasonable attorneys' fees, which it may
pay or incur in defending said action and the amount of any
judgment which it may be required to pay shall be promptly
reimbursed upon demand. Nothing herein is intended to nor
shall it relieve RETAILER or any Project Customer or
Groundwater Customer from liability for its own acts,
omissions, or active or passive negligence.
7.2 OCWD shall cause RETAILER to be named as an
additional insured on OCWD's general liability policy of
insurance with respect to the sale and distribution to
RETAILER of Project Water within the service boundaries of
RETAILER, and OCWD shall provide RETAILER with certificates
of insurance and endorsements evidencing such insurance
coverage; provided, however, that nothing shall preclude OCWD
from maintaining self insurance with respect to the sale,
distribution and use of Project Water, in lieu of purchasing
insurance as provided for herein.
7.3 OCWD shall not commence nor permit any contractor
or subcontractor to commence work on construction of any of
the Project Facilities that are located within the service
boundaries of RETAILER until OCWD has obtained, or has caused
its contractors to obtain, comprehensive general liability
insurance providing coverage for bodily injury, personal
injury and property damage, and which shall include as
additional insureds RETAILER, its officers, agents and
25B-26
-24-
EXHIBIT 1
JDK:bc: 10/10/88
employees, but only while acting in their capacity as such
and only as respects operations of the original named
insured, its subcontractors, agents, officers and employees
in the performance of the construction contract. OCWD shall
furnish RETAILER with certificates of insurance and
endorsements showing insurance coverage as described above.
RETAILER shall incur no expense in connection with obtaining
and maintaining any insurance required under paragraphs 7.2
and 7.3.
SECTION EIGHT: DISPUTES
8.1 In the event of any dispute arising under this
Agreement, the parties hereto agree to utilize the arbitra-
tion procedure set forth in this Section Eight as the sole
and exclusive means of resolving any such dispute.
8.2 Arbitration shall be initiated by any party hereto
serving upon any other party a written demand for arbitra-
tion, which demand shall describe with specificity the nature
of the dispute. Except as specified herein, the arbitration
shall be conducted pursuant to the provisions of California
Code of Civil Procedure, Section 1280, et seq. The parties
hereto agree that there shall be a single neutral arbitrator
who shall be a civil engineer knowledgeable in water facili-
ties operation and reclaimed wastewater, who shall be select-
ed in the following manner: (A) The demand for arbitration
shall include a list of the names of five (5) persons accept-
able to the demanding party for appointment as arbitrator.
The responding party shall determine if any of the names
25B72-7
EXHIBIT 1
JDK:bc: 10/10/88
submitted are acceptable, and, if so, shall inform the other
party within ten (10) days of actual receipt of the arbitra-
tion demand, and such person will be designated as arbitra-
tor; (B) In the event that none of the names submitted by the
demanding party is acceptable to the responding party, or if
for any reason the arbitrator selected is unable to serve,
the responding party shall submit to the demanding party a
list of the names of five (5) persons acceptable to the
responding party for appointment as arbitrator. The demand-
ing party shall in turn have ten (10) days from actual
receipt of the list in which to determine if one such person
is acceptable; (C) If the parties are unable mutually to
agree upon a neutral arbitrator as described above, the mat-
ter of the selection of an arbitrator, qualified as above,
shall be submitted to the Orange County Superior Court pursu-
ant to Code of civil Procedure Section 1281.6. Upon selec-
tion of an arbitrator, the arbitration shall be conducted
consistent with the provisions of Code of Civil Procedure
Section 1280, et seq., as are deemed practicable by the arbi-
trator, considering the nature of the dispute.
8.3 The costs of arbitration, including but not limited
to reasonable attorneys' fees, shall be recoverable by the
party prevailing in the arbitration. If an arbitration con-
ducted hereunder is appealed to a court pursuant to the
procedures set forth in Code of Civil Procedure Section 1280,
et seq., the costs of arbitration shall also include court
25B-2�-
EXHIBIT 1
JDK:bc: 10/10/88
costs associated with such appeals, including but not limited
to reasonable attorneys' fees.
SECTION NINE: MISCELLANEOUS PROVISIONS
9.1 Notices: All notices, payments, transmittals of
documentation and other writings required or permitted to be
delivered or transmitted to any of the parties under this
Agreement shall be personally served or deposited in a United
States mail depository, first class postage prepaid, and
addressed as follows:
If to OCWD: Orange County Water District
10500 Ellis Avenue
P.O. Box 8300
Fountain Valley, California 92708
Attn: William R. Mills Jr.
General Manager
If to RETAILER: City of Santa Ana
Public Works Agency
101 West Fourth Street
Santa Ana, California 92701
Attn: David H. Grosse,
Executive Director
or such other address as OCWD or RETAILER shall direct in
writing. Service of any instrument or writing by mail shall
be deemed complete forty-eight (48) hours after deposit in a
United States mail depository.
9.2 Term and Amendment: The term of this Agreement
shall be for twenty-five (25) years from the date hereof.
This Agreement shall automatically be extended for up to five
(5) extensions of five (5) years each, for a possible total
extension of twenty-five (25) additional years to the initial
term hereof, if neither party hereto exercises its right to
terminate the extensions to the initial term of this
25B-29
-27-
EXHIBIT 1
JDK:bc: 10/10/88
Agreement. Either party shall have the right to terminate
any extension to the initial term of this Agreement by
written notice to the other at least four (4) years prior to
the expiration of the initial term or any extension of this
Agreement. Except as provided in paragraph 1.6 and Section
Six hereinabove, this Agreement may only be amended or
modified by mutual agreement in writing of OCWD and RETAILER.
9.3 Limitation on Sales by OCWD: OCWD acknowledges and
agrees that, except as provided herein or with the prior
written consent of RETAILER, OCWD is not now and will not in
the future become a wholesale or retail seller of Project
Water within the service boundaries of RETAILER, and OCWD
further agrees that it will not use or contract with any
entity other than RETAILER for the purpose of selling and
distributing Project Water within the service boundaries of
RETAILER.
9.4 Basin Limitations: OCWD and RETAILER mutually
understand and agree that any and all Project Water delivered
and sold by OCWD hereunder shall not constitute either
"supplemental sources" or "groundwater supplies" for the
purpose of the annual establishment of basin groundwater
production requirements and limitations by OCWD pursuant to
Section 31.5 of the OCWD Act. Project Water is hereby
established as a separate class of water for the purposes of
Section 31.5 of the OCWD Act.
9.5 Conditions Precedent: The performance of this
Agreement is conditioned upon OCWD's being able to acquire
25B-30
-28-
EXHIBIT 1
JDK:bc: 10/10/88
acceptable rights of way and access rights from its existing
facilities to the points of connection to Project Customers,
as set forth in the plat attached hereto as Exhibit "A", and
is further conditioned upon the approval by all federal,
state and local regulatory agencies having jurisdiction over
the Green Acres Project and Project Water.
9.6 Conditions subsequent: The performance of this
Agreement is conditioned upon OCWD's continued ability
feasibly to produce and distribute Project Water for sale to
RETAILER and resale by RETAILER to Project Customers in a
cost-effective manner. Subsequent to the date of this
Agreement, should OCWD determine in its sole discretion that
unanticipated increases in the cost of producing or
distributing Project Water or new or modified regulatory
requirements governing the production, distribution, quality
or use of Project Water render the Green Acres Project
economically unfeasible, OCWD may cease production and
distribution of Project Water upon ninety (90) days written
notice to RETAILER. In the event that OCWD ceases the
production and distribution of Project Water pursuant to this
paragraph 9.6, this Agreement shall terminate and OCWD shall
incur no liability to RETAILER or any Project Customer or
Groundwater Customer by reason of the termination of this
Agreement or the termination of production and delivery of
Project Water; provided, however, that if OCWD ceases the
production and distribution of Project Water pursuant to this
paragraph 9.6 within ten (10) years immediately following the
25B-31
_29_
EXHIBIT 1
JDK:bc: 10/10/88
date of this Agreement, OCWD shall pay the cost of connecting
or reconnecting the landscape irrigation or industrial water
facilities of each Project Customer or Groundwater Customer
then connected to the Project Facilities to the domestic
water distribution facilities of RETAILER.
9.7 No Duplication of Services Intended or Created:
OCWD and RETAILER mutually understand and agree that the con-
struction and operation of the Project Facilities and the
distribution and sale of Project Water by OCWD to RETAILER
for sale by RETAILER to Project Customers pursuant to this
Agreement do not constitute either a duplication of
RETAILER's retail water service or a taking of any property
of RETAILER within the meaning of Section 1501, et sem. of
the California Public Utilities Code. RETAILER shall have no
right to institute any action against OCWD pursuant to
Sections 1503, 1504 or 1505.5 of the Public Utilities Code by
reason of the construction and operation of the Project
Facilities and the distribution and sale of Project Water by
OCWD to RETAILER in conformance with this Agreement.
9.8 Warranty: OCWD represents and warrants that under
the OCWD Act OCWD, without the consent of any other public
agency water purveyor, may enter into this Agreement to
deliver and sell Project Water to RETAILER for resale by
RETAILER to Project Customers or lands within the service
boundaries of RETAILER.
9.9 Construction: This Agreement shall be construed
according to its plain meaning and as if prepared by all
25B-32
EXHFE 1
JDK:bc: 10/10/88
parties hereto. This Agreement shall be governed by and
construed in accordance with the laws of the State of
California.
9.10 Integration: The parties herein have set forth the
whole of their agreement, and the performance of this
Agreement constitutes the entire consideration intended
herein.
9.11 Successors: This Agreement and all of the
provisions herein, shall be binding upon and inure to the
benefit of OCWD and RETAILER, and their respective successors
and assigns.
WHEREFORE, the parties herein have executed this Agree-
ment as of the date set forth above.
TO FORM:
orange County Water
District
A PROVED AS TO FORM:
By
Cityt rney
City of Sa Ana
8/131/006104-0124/OO5d
ORANGE COUNTY WATER DISTRICT
By
By
CITY OF SANTA ANA
By
Mayor
Attest.
25B-33
-31-
EXHIBIT 1
I
's
N
i
EXHIBIT 7
Exhibit A
n. M;=.,,.._
m
IM-n..o`�.w
..u.0 .i....li'
EXHIBIT B
TABLE l
SANTA ANA
Average
Average "
(Assumes Peaking
Location
Demand
Demand
Factor of 6)
Number
(AFY)
(GMP)
Multitex Corp.
33
130
93
Centennial Park
71
120
74
Thornton Park
69
69
43
McFadden Int. School
70
48
30
TOTAL
387
240
30% OF TOTAL
193.3
120
25B-35
EXHIBIT 1
Exhibit B
Table 2
Future Users
25B-36
JMC:GreenUsers EXHIBIT 1
Average
Average
Santa Ana
Demand
Demand
(Assumes Peaking Factor of 6)
(AFY)
(GPM)
Riverview Golf Course
298
185
Willowick Golf Course
269
167
BJ Fibers
81
50
Bomokoral Park
67
42
Saddleback High School
60
37
Santa Ana Valley High School
66
41
Fritz School
62
38
Spurgeon Elementary
62
30
Woodside Village
52
32
Santa Ana Memorial Park
53
33
Harbor Gateway
47
29
Woodlake Cando
45
28
Greenville School
45
28
Heritage Park
41
gra
Versailles on the Lake
40
25
Jackson School
33
20
Compaslno Park
31
19
Meter Dei High School
30
19
Center park
31
19
Aspen Pearltree Apts
30
19
South Coast Shores
28
17
Carr High
28
17
Santa Barbara School
25
15
Adams Park
24
15
Rosita Park
22
14
Jerome Park
23
14
Lincoln School
22
14
Newhope School
21
13
Rosita School
21
13
25B-36
JMC:GreenUsers EXHIBIT 1
25B-37
WN09 wa
Average
Average
Santa Ana
Demand
Demand
(Assumes Peaking Factor of 6)
(AFY)
(GPM)
South Coast Springs
20
12
Village Creek
20
12
Monte Vista School
20
12
Santa Anita Park
20
12
South Coast Village
19
12
Hazard School
19
12
A1ona Park
19
12
Cherry Textron
19
12
Monroe Elementary
18
11
Santa Ana College
17
11
City Yard & Delhi Park
17
11
Mobil Chemical
16
10
Diamond Elementary
16
10
Russell School
15
9
Washington Elementary
15
9
MacArthur Int
15
9
Taft Elementary
14
9
Caltrans
a 14
9
AMF Volt
14
9
Windsor Park
13
8
Boise Cascade
10
6
A&E Systems
10
6
Adams School
5
3
Polaroid
8
5
Security Pacific
5
3
Causet Center
9
6
Total Demand
2,431
1,507
50% of Total
Demand
1215.5
754
25B-37
WN09 wa
EXHIBIT "C"
Form of Project Customer
Sales Agreement
(TO BE PROVIDED BY CITY OF SANTA ANA)
L
25B-38
EXHIBIT 1
AGREEMENT BETWEEN ORANGE COUNTY WATER DISTRICT AND
CITY OF SANTA ANA REGARDING
DISTRIBUTION AND SALE OF GREEN ACRES PROJECT WATER
T141S AGREEMENT ("Agreement"), is made and entered into as of July 1, 2017, by and
between the ORANGE COUNTY WATER DISTRICT, a special governmental district
(hereinafter "OCWD") and the CITY OF SANTA ANA, a charter city and municipal corporation
organized and existing under the laws of the State of California (hereinafter "RETAILER").
RECITALS
A. OCWD was created by the OCWD Act, Ch. 924, Stats. 1933, as amended, for the
purpose of protecting and managing the Orange County groundwater basin. The OCWD Act
empowers OCWD to manage the groundwater basin, to provide for the conservation of the
quantity and quality of water in the groundwater basin, to conserve and reclaim water within or
outside of the boundaries of OCWD, to sell or otherwise put to beneficial use any water or
reclaimed wastewater in order to conserve groundwater resources, and to distribute water to
persons in exchange for ceasing or reducing the extraction of groundwater from the groundwater
basin.
B. OCWD purchases imported water from the Metropolitan Water District of
Southern California (hereinafter "MWD"), through its member public agencies, for spreading
and replenishment purposes, and obtains wastewater from the Orange County Sanitation District
(hereinafter "OCSD") for renovation -reclamation, spreading and replenishment purposes, and
groundwater injection,
C. A portion of the reclaimed wastewater currently produced by OCWD is suitable
for a number of non -potable uses, including but not limited to, landscape irrigation and industrial
uses.
D. RETAILER is a municipal corporation and charter city organized and existing
pursuant to the laws of the State of California. RETAILER is the exclusive retail water purveyor,
including water for residential, industrial, commercial, public agency, agricultural and other uses,
within RETAILER's boundaries. RETAILER currently distributes potable water in part
purchased from the MWD and in part produced from groundwater within its boundaries. The
corporate and water service boundaries of RETAILER are within the jurisdictional boundaries of
OCWD.
E. Landscape irrigation and industrial water users within the jurisdictional and
service boundaries of RETAILER currently either purchase potable or non -potable water from
RETAILER for their use, or produce water from the groundwater basin by means of their own
facilities for their use, which private groundwater production is under the jurisdiction and control
of OCWD.
EXHIBIT 2
F. In 1991, OCWD began operating a water treatment facility, transmission mains
and distribution pipeline system (including mainlines and service lines) and, in some cases, on-
site plumbing, known as the "Green Acres Project", for the purpose of reclaiming wastewater
received from OCSD (hereinafter, "Project Water") and distributing the Project Water for
appropriate landscape irrigation and industrial purposes in order to supplement and conserve the
supply of potable groundwater available to the residents and water users within the boundaries of
OCWD. OCWD entered into agreements with retail water providers within OCWD's boundaries,
including RETAILER, for the distribution and sale of Project Water within the respective
boundaries of RETAILER and the other retail water agencies contracting with OCWD for
Project Water. OCWD has operated the Green Acres Project continually since 1991; and during
that period, RETAILER has continually purchased Project Water for resale to certain customers
for landscape irrigation and/or industrial uses. OCWD and RETAILER desire to continue use of
the Green Acres Project and its associate Project Water. A plat map depicting the location of the
facilities comprising the Green Acres Project which OCWD currently operates and maintains is
set forth as Exhibit A hereto.
G. OCWD and RETAILER mutually acknowledge that the use of reclaimed water
for landscape irrigation is of mutual benefit to OCWD and RETAILER in fulfilling their joint
responsibilities for the conservation of water resources in accordance with Sections 13550 and
13551 of the California Water Code,
H. OCWD and RETAILER mutually desire to terminate their existing Project Water
agreement and enter into a new agreement to set forth the terms and conditions under which
OCWD will continue to sell Project Water to RETAILER for resale by RETAILER to
appropriate landscape irrigation and industrial water users within the service boundaries of
RETAILER, and under which RETAILER will continue to purchase Project Water from OCWD
for such resale purposes.
AGREEMENTS
NOW, TI3EREFORE, in consideration of the facts recited above and the terms,
covenants and conditions herein contained, the parties hereto agree as follows:
SECTION ONE: TERMINATION OF PREVIOUS AGREEMENT
1.1 OCWD and RETAILER mutually agree that the written agreement entered into
between OCWD and RETAILER, entitled "AGREEMENT BETWEEN ORANGE COUNTY
WATER DISTRICT AND CITY OF SANTA ANA REGARDING DISTRIBUTION AND
SALE OF GREEN ACRES PROJECT WATER" and dated September 21, 1988, relating to the
construction of the Project Facilities and the sale of Project Water by OCWD to RETAILER for
resale to RETAILER's Project Customers, is hereby temrinated as of the effective date of this
Agreement and superseded by this Agreement.
SECTION TWO: FACILITIES FOR DELIVERY AND DISTRIBUTION OF PROJECT
WATER
2.1 The parties acknowledge that OCWD has constructed, operates, owns, and
maintains, the Green Acres Project, and all facilities to produce, transport and distribute Project
Water for the herein specified purposes (hereinafter, the "Project Facilities"). A plat map
depicting that portion of the Project Facilities which OCWD constructed, operates and maintains
within the boundaries of RETAILER is attached hereto as Exhibit B.
2.2 The constructed Project Facilities include a distribution pipeline system from the
site of the Green Acres Project Water Treatment Facility, located at 18700 Ward Street, Fountain
Valley, California, to the point of connection to each of the proposed Project Water customers
within the boundaries of RETAILER (hereinafter, "Project Customers"), for the purpose of
distributing Project Water to RETAILER at the points of connection of the Project Customers for
purchase by RETAILER and resale to the Project Customers. The names and anticipated annual
Project Water demands of each existing and currently allowed new Project Customer are set
forth in Exhibit C.
2.3 The parties acknowledge that the Project Facilities are owned by OCWD, and
OCWD shall perform maintenance, emergency response, repair and replacement of the Project
Facilities located within the boundaries of RETAILER. RETAILER may perform, on behalf of
OCWD, maintenance, emergency response, repair and replacement of the Project Facilities
located within the boundaries of RETAILER, pursuant to paragraph 5.1 herein below and
arranged in writing prior to any such activity, In this regard:
2.3.1 The parties agree to restore, or cause Project Customer to restore, roads,
streets, alleys, avenues, highways, drainage facilities, or any other public
way or property used for construction, operations, or maintenance of the
Project Facilities within RETAILER's boundaries to at least the same
condition existing prior to construction, operation or maintenance of the
Project Facilities, to the reasonable satisfaction of RETAILER and
OCWD.
23.2 The parties agree to provide, or cause Project Customer to provide,
adequate safeguards to afford security to life and property during
construction, operation, and maintenance of the Project Facilities, with due
regard being given to other existing uses of public roads, streets, alleys,
avenues, highways, drainage facilities; public ways and property within
the boundaries of RETAILER.
2.3.3 The parties agree to use, or cause Project Customer to use, its best efforts
to minimize noise, dust, pollution and problems relating to police and fine
protection within the boundaries of RETAILER throughout construction,
operation and maintenance of the Project Facilities within RETAILER's
boundaries.
2.3.4 The parties understand and agree that OCWD's rights to construct,
maintain, operate, inspect, repair and replace the Project Facilities within
the lands and rights-of-way of RETAILER do not constitute vested
property rights and are expressly subject to and governed solely by this
Agreement.
2.4 The parties acknowledge that RETAILER has, at no cost to OCWD, provided
metering devices meeting RFTAiLER's specifications, and that these metering devices are
owned, operated and maintained by RETAILER for the purpose of measuring the quantity of
Project Water purchased by RETAILER and resold by RETAILER to each Project Customer. In
the event that OCWD and RETAILER determine to expand the Green Acres Project to serve one
or more new Project Customers, RETAILER shall provide a metering device for each new
Project Customer, and shall own, operate and maintain it at no cost to OCWD. RETAILER shall
be responsible for ensuring the accuracy of all metering devices used to measure the quantity of
Project Water delivered to each existing or new Project Customer. Any costs incurred in
modifying the size of existing RETAILER meters shall be the responsibility of RETAILER;
provided, however, that RETAILER has the discretion to delegate that duty to a Project
Customer, so long as RETAILER remains ultimately responsible to OCWD for the accuracy of
the metering device. The quantity of Project Water measured by the meters to be owned,
operated and maintained by RETAILER shall be the sole basis for determining the quantity of
Project Water delivered to Project Customer under Section Three of this Agreement. In the event
that a meter measuring the quantity of Project Water delivered by RETAILER for resale to a
Project Customer indicates a lesser quantity than OCWD's meter measuring the quantity of
Project Water delivered to RETAILER for resale to a Project Customer, OCWD shall be
responsible for the cost of such difference, and RETAILER shall not be liable therefor. In the
event RETAILER has a separate metering device serving exclusively non -potable uses on the
premises of a Project Customer, OCWD may sell Project Water to RETAILER by connecting the
Project Facilities distribution pipeline system directly to the separate non -potable meter so long
as the standards and requirements of RETAILER and any other governmental agency having
jurisdiction over the quality of Project Water are satisfied.
2.5 RETAILER shall implement and maintain measures to avoid the risk that Project
Water may enter into RETAILER's potable water distribution system at no cost to OCWD. The
parties acknowledge that the non -potable Project Water system has been marked with separate
marking in accordance with standards and regulations in existence when the Project Water
system was constructed, and that any extensions of the Project Water system shall be separately
marked as required by law.
2.6 The Project Water distribution pipeline system has been constructed by OCWD
with sufficient capacity to allow RETAILER to serve the landscape irrigation and industrial
water users participating as Project Customers as shown in Exhibit C. OCWD shall sell to
RETAILER, and RETAILER shall purchase from OCWD, sufficient quantities of Project Water
for RETAILER to sell to those Project Customers. OCWD and RETAILER mutually understand
and agree that additional non -potable water users within the boundaries of RETAILER may at
some future time be served with Project Water and become Project Customers without the
necessity of amending this Agreement, provided that a water user within the service boundaries
of RETAILER shall become a new Project Customer only with the approval of both OCWD and
RETAILER; and provided further, that OCWD shall have the sole discretion to determine
whether to expand the Project Facilities or the production and distribution capacity of the Project
Facilities to meet any future demand for Project Water that may be generated within the
boundaries of RETAILER. All future water users within the service boundaries of RETAILER
who become Project Customers shall be subject to the Project Rules as defined in paragraph 6.2
and adopted by RETAILER pursuant to paragraph 63 herein below.
2.7 The addition of infrastructure to serve future Project Customers shall be approved
by OCWD, RETAILER, and pertinent regulatory agencies. Additional infrastructure may
include service laterals, mainline pipelines, pump stations, vaults, meters, and other components.
Unless authorized in writing by OCWD, the permitting, design, construction, inspection,
specialty inspection and materials testing, start-up, on-going regulatory compliance, and those
costs described in Paragraph 2.3 shall be performed at no expense to OCWD. The OCWD staff
time for review of the design, construction inspection of the additional infrastructure, and
assistance in regulatory permitting shall be included in the annual Project Water costs set forth in
paragraph 3.2 as components of the Project Water rate charged by OCWD to RETAILER, unless
otherwise stipulated in writing by OCWD. OCWD shall cause the Project Facilities within the
boundaries of RETAILER to be constructed in accordance with the construction standards of
RETAILER. Addition of infrastructure located within public right-of-way and upstream of the
RETAILER meters described in paragraph 2.4 shall become the properly of OCWD after written
construction acceptance by OCWD, RETAILER, and any other pertinent agency. Additional
infrastructure within private property shall not be owned by OCWD, unless authorized in writing
by OCWD and pursuant to an easement granted from the land owner to RETAILER and/or
OCWD. Unless authorized in writing by OCWD, new RETAILER meters shall be located in the
public right-of-way. The regulatory permitting and/or approvals of any future Project Customer
site shall be obtained prior to delivery of Project Water to that site. RETAILER shall lead the
effort to obtain these permits and/or approvals and OCWD shall assist and coordinate with the
RETAILER.
2.8 Major expansions to the Project Water distribution system may be performed
under a different ownership -maintenance model than described in Section 2 if mutually approved
and defined in writing by OCWD and RETAILER.
SECTION THREE: PURCHASE AND SALE OF PROJECT WATER
3.1 RETAILER shall have the exclusive right to purchase Project Water from
OCWD, at the point of connection to each Project Customer, and to resell Project Water to the
Project Customers shown in Exhibit C, and such other landscape irrigation and industrial water
259m43
users within the boundaries of RETAILER that may be added as Project Customers in
accordance with paragraphs 2.6, 23 and 2.8 above.
3.2 RETAILER shall purchase the Project Water from OCWD, at the point of its
metered connections, for an amount equal to OCWD's cost of producing and distributing Project
Water based on the methodology set forth in Exhibit D, as determined by OCWD after
consultation with the Operating Group defined in paragraph 3.3. Capital improvements such as
changes in treatment plant technology and distribution system operation shall be included in
OCVM's costs. OCWD shall annually calculate the Project Water rate, and provide written
notice to RETAILER of the then -effective Project Water rate. Upon request, OCWD shall
provide RETAILER with supporting data used to calculate the Project Water rate. OCWD shall
have discretion to smooth out anticipated increases in debt and capital improvement payments
over several years preceding and following actual OCWD cost incurrence years, in order to
avoid significant and sudden increases to the Project Water rate. When a smoothing method is
applied by OCWD, it will be discussed with the Operating Group, as defined in paragraph 3.3,
and disclosed on the annual revision of Exhibit D. The point of connection and sale of the
Project Water from OCWD to RETAILER shall be at the meter which measures the flow of
Project Water to each Project Customer, as described in paragraph 2.4 herein, above. The parties
mutually recognize and agree that the Project Water rate may change each year and become
effective on July 1 of each year during the term of this Agreement.
3.3 Staff representatives of OCWD, RETAILER, and other retail agencies
participating in the Green Acres Project shall form an "Operating Group" to meet at least once
prior to the annual publishing of the revised Exhibit D by OCWD, The Operating Group shall
meet and confer with regard to the proposed Exhibit D contents, future Exhibit D estirnates,
planned Green Acres Project capital and repair projects, and review previous Green Acres
Project projects, Project Water performance, and revisions to Exhibit E.
3.4 The governing body of RETAILER shall establish the rate for the resale of
Project Water to each Project Customer in accordance with applicable legal requirements which
may include cost of service.
3.5 RETAILER shall read the Project Water meter for each Project Customer on a
one (1) month cycle or in concurrence with RETAILER's schedule for reading meters which
measure the quantity of potable water delivered by RETAILER. Within fifteen (I5) days
thereafter, RETAILER shall transmit to OCWD a statement setting forth the Project Water rate
established by RETAILER pursuant to paragraph 3.4 during that billing period, a description of
the maintenance, repair and replacement activities of RETAILER on Project Facilities, the
amount of such actual costs incurred by RETAILER pursuant to paragraph 5.1 herein below
during that billing period, and indicating, for each Project Customer, the current meter reading,
the previous meter reading, and the total quantity of Project Water purchased from OCWD and
resold by RETAILER to such Project Customer during the billing period. Together with this
statement; RETAILER shall transmit to OCWD payment in accordance with paragraph 3.2 for
the Project Water purchased from OCWD by RETAILER and resold by RETAILER to all of the
Project Customers during the billing period, after deducting therefrom the actual costs incurred
by RETAILER in maintaining, repairing and replacing the Project Water distribution system
within RETAILER's boundaries as set forth in paragraph 5.1 herein below.
SECTION POUR: PROJECT WATER QUALITY REGULATIONS
4.1 OCWD shall deliver and sell to RETAILER pursuant to this Agreement Project
Water that conforms to all current and future requirements established by the California Regional
Water Quality Control Board — Santa Ana Region, California State Water Resources Control
Board Division of Drinking Water, County of Orange Health Care Agency, and all other federal,
state and local agencies having jurisdiction to fix minimum standards. The anticipated quality of
Project Water is shown on Exhibit E attached hereto and incorporated herein, and this Exhibit E
shall subsequently be revised to conform to any future regulatory requirements; provided
however, that OCWD shall not have obligation to modify the quality of Project Water to meet
the needs of any particular Project Customer, OCWD shall revise Exhibit E if and when OCWD
modifies the tertiary treatment technology, disinfection process, and/or introduces OCSD Plant
92 effluent to the GAP treatment process, and provide written notice of such revised Exhibit E to
RETAILER. The parties acknowledge that Exhibit E can be revised by OCWD without
amending this Agreement after such revision's discussion at the Operating Group. OCWD shall
strive to meet or exceed the minimum criteria stated in Exhibit E.
4,2 During the term of this Agreement, OCWD shall pay all costs imposed by any
and all governmental agencies having jurisdiction over the quality or use of Project Water for the
issuance of any permits, licenses or approvals required for the production treatment, distribution
or sale of Project Water. If incurred by OCWD, the costs described in this paragraph shall be
included in the annual Project costs set forth in paragraph 3.2 as components of the Project
Water rate charged by OCWD to RETAILER,
4.3 OCWD shall inform RETAILER promptly after becoming aware of any proposed
or actual modifications by any agency having jurisdiction over the quality of Project Water to
any requirements governing the minimum standards of quality for or use of Project Water, or of
any changes in the legally permissible uses which might affect the use of the Project Water sold
by OCWD to RETAILER for resale by RETAILER to Project Customers, and OCWD shall bear
all costs of conforming to any such future requirements. If incurred by OCWD, the costs
described in this paragraph shall be included in the annual Project costs set forth in paragraph 3.2
as components of the Project Water rate charged by OCWD to RETAILER.
4.4 RETAILER shall perform Project Customer inspection and testing in accordance
with the Project Rules defined in paragraph 6.2, prepared by OCWD and transmitted to
RETAILER who may make additions, as amended from time to time by OCWD, and provide a
written record of such activities to OCWD within sixty (60) days of their performance. Expenses
for these activities shall not be reimbursed by OCWD.
SECTION FIVE: OPERATING OBLIGATIONS OF THE PARTIES
5.1 During the term of this Agreement, OCWD shall manage, operate and maintain
the Project Facilities in an efficient manner and in accordance with the highest standards of skill
and workmanship; provided, however, that OCWD may contract with RETAILER for the
performance by RETAILER of the actual maintenance, repair and replacement responsibilities
with respect to those Project Facilities located within the service boundaries of RETAILER.
RETAILER recognizes the special quality considerations relating to Project Water, and
RETAILER shall perform its maintenance, repair and replacement responsibilities in an efficient
manner and in accordance with the highest standards of skill and workmanship. OCWD retains
the right to make repairs to Project Facilities within the service boundaries of RETAILER.
RETAILER shall receive as a credit against all monies due OCWD, pursuant to paragraph 3.2
herein above for the sale of Project Water, the cost of such maintenance, repair and replacement
activities actually undertaken by or on behalf of RETAILER, which costs shall include the actual
labor, material and equipment costs, plus overhead costs incurred by RETAILER and necessary
for such maintenance, repair and replacement activities.
5.2 Notwithstanding the provisions of paragraph 5.1, the operating responsibility of
OCWD with respect to the Project Facilities shall include the maintenance of quality, quantity
and pressure of the Project Water, and compliance with all regulatory requirements and
conditions applicable to the distribution and sale of Project Water, to the point of connection to
each Project Customer,
5.3 RETAILER shall, at no cost to OCWD, assume ownership, service, maintenance
and reading of the Project.Water meter and valve set and meter box/vault for each Project
Customer in the same manner that RETAILER would for a customer service meter attached to its
potable water system. RETAILER further shall, at no cost to OCWD, be responsible for
customer service functions relating to all Project Customers, including but not limited to billing
and collection of payments from Project Customers for the Project Water, record keeping, and
notification to OCWD of the quantity of Project Water delivered through each Project
Customer's meter during each meter reading period.
5.4 OCWD shall have the right to review the books, records and accounts maintained
by RETAILER relating to the Project water and Project Customers during normal business
hours, upon forty-eight (48) hours prior written notice to RETAILER.
5.5 OCWD shall operate the Project Facilities in such a manner that Project Water
shall be delivered to the point of connection to each Project Customer on a continuous basis at a
pressure of not less than fifty (50) pounds per square inch. RETAILER shall assist OCWD in
achieving this pressure criterion by staggering Project Customer demand timeframes as needed.
OCWD shall strive to have a pressure greater than one hundred (100) pounds per square inch
entering the Project Facilities from the Water Treatment Facility. If OCWD's analysis of fixture
Project Customer sites indicates this pressure criteria cannot be met by the existing Project
r
Facilities, OCWD shall declare by written notice to RETAILER that this standard of service will
not apply to these future Project Customers.
5.6 Except as provided in paragraph 9.6 below, in the event that, at any time during
the term of this Agreement, OCWD for any reason cannot or chooses not to produce Project
Water from its Green Acres Project Water Treatment Facility described in paragraphs 2.1 and 2.2
above, OCWD shall provide through the Project Facilities, or otherwise, at a cost equal to the
cost of Project Water, sufficient water of a quality at least equal to the quality of Project Water to
meet the landscape irrigation and industrial water needs of all of the Project Customers. OCWD,
however, shall have no such obligation in the event that Project Water cannot be delivered to
Project Customers due to damage to; breaks, or other disruptions in the distribution facilities
transporting Project Water to Project Customers, including maintenance and additions to Project
Facilities. OCWD shall strive to restore Project Water delivery within 72 hours of disruptions.
With respect to non -emergency maintenance, repair, and construction work, OCWD shall
coordinate such interruptions with RETAILER at least thirty (30) days in advance.
5.7 If the State of California proclaims a drought "State of Emergency" and restricts
the use of potable water supplies, RETAILER will attempt to reduce the use of recycled water
consistent with the RETAILER's conservation standards mandated by the State, Notwithstanding
the RETAILER's existing regulations, RETAILER's governing body shall consider enacting
permanent mandatory water conservation requirements for recycled water use and any additional
restrictions during periods of water supply shortages.
SECTION SIX: PROJECT WATER RULES AND REGULATIONS
6,1 All Project Water produced by OCWD for delivery and sale to RETAILER shall
be in accordance with the terms and conditions of the discharge requirements and primary user
permit for the Project Water issued to OCWD by the California Regional Water Quality Control
Board Santa Ana Region. OCWD has obtained and shall maintain a blanket primary user
pennit for the production, distribution and sale of Project Water, and shall at all times maintain
and comply with all present and future provisions thereof and all renewals or subsequent such
permits.
6.2 The parties acknowledge that OCWD has promulgated, and the parties agree that
OCWD and RETAILER shall enforce rules and regulations regarding the distribution, delivery
and sale of Project Water to RETAILER, and governing the use of Project Water resold by
RETAILER to Project Customers ("Project Rules"). OCWD shall maintain approvals from all
federal, state, and local agencies having jurisdiction over the production, quality and use of
Project Water, including, but not limited to, the California Regional Water Quality Control
Board — Santa Ana Region, California State Water Resources Control Board Division of
Drinking Water, and County of Orange Health Care Agency, that such Project Rules comply
with the regulations, requirements and orders of such regulatory agencies.
6.3 The parties acknowledge that OCWD has heretofore prepared and transmitted to
RETAILER the Project Rules, and that RETAILER has itself adopted the Project Rules and
incorporated them into RETAILER's promulgated rules and regulations governing the
distribution, delivery and sale of water within the service boundaries of RETAILER. Promptly
upon adoption of RETAILER's revised promulgated rules and regulations, RETAILER shall
transmit to OCWD RETAILER's adopted Project Rules. Should OCWD choose either to make
reasonable amendments or modifications to the Project Rules not contrary to this Agreement, or
be required by any governmental agency exercising jurisdiction over the distribution, sale or use
of the Project Water to modify or amend the Project Rules, OCWD shall promptly furnish such
modifications or amendments to RETAILER; and RETAILER, after being provided a ninety
(90) day period in which to review, comment upon, and/or meet and confer with OCWD
regarding such proposed modifications or amendments, shall incorporate such proposed
modifications or amendments into RETAILER's adopted rules and regulations. Project Rules
may be revised by OCWD without amendment to this Agreement. The parties acknowledge that
OCWD and RETAILER have participated in a group of Orange County agencies to standardize
procedures, inspection, testing, and submission requirements for applications seeking approval
from regulatory authorities for new Project Customer sites and the ongoing inspection and
testing of existing sites. The parties further acknowledge that upon the finalization of the Orange
County standardized practices, the Project Rules will be amended to incorporate the standardized
practices, which finalization is expected in 2017. RETAILER shall ensure that each Project
Customer has a copy of the Project Rules and that the Project Customer adheres to the Project
Rules.
6A RETAILER shall include in its promulgated rules and regulations provisions
requiring that any current or future Project Customer permit representatives of OCWD and
RETAILER to enter the premises of the Project Customer at all reasonable times for the purpose
of monitoring, inspecting, analyzing and observing the Project Customer's on-site Project Water
facilities and the utilization by the Project Customer of Project Water.
6.5 In connection with RETAILER's adaption of modifications or amendments to the
Project Rules as part of its amended rules and regulations, and at the request of RE"T"AILER,
OCWD shall cooperate with and assist RETAILER in obtaining from the State of California
Water Resources Control Board any necessary certifications, findings or orders authorized under
Sections 13550 and 13551 of the California Code to require the use of Project Water for non -
potable uses within the service boundaries of RETAILER.
6.6 The parties understand and agree that Project Water delivered and sold by OCWD
to RETAILER pursuant to the terms of this Agreement has limited uses, and OCWD shall
deliver and sell to RETAILER Project Water only for those uses and purposes which are legally
permissible under the laws of the State of California and the rules, regulations and directions of
the appropriate federal, state and local regulatory agencies exercising jurisdiction over the
quality and use of Project Water. In this regard, OCWD and RETAILER shall cooperatively
enforce Project Rules limiting the use of Project Water to legally permissible landscape irrigation
r
and industrial applications, and shall monitor the use of Project Water by Project Customers to
safeguard against any misuse or improper application of Project Water by Project Customers.
SECTION SEVEN: INDEMNITY AND INSURANCE
7.1 OCWD shall hold RETAILER harmless from and against and shall indemnify
RETAILER from any liability, loss, costs, expenses or damages however by reason of any injury
(whether to body, property, or personal or business character or reputation) sustained by or to
any person or property by reason of any act, neglect, default, or omission of OCWD or any of its
agents, employees, or representatives, or caused by reason of the design, construction, operation
or maintenance of the Project Facilities, or the distribution and sale to RETAILER for resale
purposes herein of Project Water that does not meet the quality standards set forth in Title 22 of
the California Administrative Code; provided, however, that OCWD shall not be responsible for
the negligent operation, maintenance or repair of the Project Facilities within RETAILER'S
service boundaries by RETAILER, the negligent operation, maintenance or repair by
RETAILER, any Project Customer of Project Water distribution and storage facilities located on
the lands of any Project Customer, and/or the misuse or misapplication of the Project Water on
the Project Customer's side of the Project Water meter by any person, including RETAILER or
any Project Customer. If RETAILER is sued in any court for damages by reason of any of the
acts for which OCWD is required to indemnify RETAILER in this paragraph 7.1, including but
not by way of limitation, damages arising out of a products liability claim, OCWD shall defend
said action (or cause same to be defended) at its own expense and shall pay and discharge any
and all amounts of judgement that may be rendered in any such action. If OCWD fails or
neglects to so defend in said action, RETAILER may defend the same and any expenses,
including reasonable attorney's fees, which it may pay or incur in defending said action and the
amount of any judgement which it may be required to pay shall be promptly reimbursed upon
demand. Nothing herein is intended to nor shall it relieve RETAILER or any Project Customer
from liability for its own willful acts or active negligence.
7.2 OCWD shall cause RETAILER to be named as an additional insured on OCWD's
general liability policy of insurance with respect to the sale and distribution to RETAILER of
Project Water within the service boundaries of RETAILER, and OCWD shall provide
RETAILER with certificates of insurance and endorsements evidencing such insurance
coverage.
73 OCWD shall not commence nor permit any contractor or subcontractor to
commence work or construction of any of the Project Facilities that are located within the service
boundaries of RETAILER until OCWD has obtained, or has caused its contractors to obtain,
comprehensive general liability insurance providing coverage for bodily injury, personal injury
and property damage, and which shall include as additional insureds RETAILER, its City
Council, Board Members, boards and commissions, officers, agents, vendors, and employees, but
only while acting in their capacity as such and only as respects operations of the original named
I 1, 0
insured, its subcontractors, agents, officers and employees in the performance of the construction
contract. OC'WD shall furnish RETAILER with certificates of insurance and endorsements
showing insurance coverage as described above. RETAILER shall incur no expense in
connection with obtaining and maintaining any insurance required under paragraph 7.2 and 7.3.
SECTION EIGHT: DISPUTES
8.1 In the event of any dispute arising under this Agreement, the parties hereto agree
to utilize the arbitration procedure set forth in this Section Eight as the sole and exclusive means
of resolving any such dispute.
8.2 Arbitration shall be initiated by any party hereto serving upon any other party a
written demand for arbitration, which demand shall describe with specificity the nature of the
dispute. Except as specified herein, the arbitration shall be conducted pursuant to the provisions
of California Code of Civil Procedure, Section 1280, et seq. The parties hereto agree that there
shall be a single neutral arbitrator who shall be a civil engineer knowledgeable in water facilities
operation and reclaimed wastewater, who shall be selected in the following manner:
8.2.1 The demand for arbitration shall include a list of the names of five (5) persons
acceptable to the demanding party for appointment as arbitrator. The responding
party shall determine if any of the navies submitted are acceptable, and, if so, shall
inform the other party within ten (10) days of actual receipt of the arbitration
demand, and such person will be designated as arbitrator;
8,2,2 In the event that none of the names submitted by the demanding party is acceptable
to the responding party, or if for any reason the arbitrator selected is unable to serve,
the responding party shall submit to the demanding party a list of the frames of five
(5) persons acceptable to the responding party for the appointment as arbitrator. The
demanding party shall in tum have ten (10) days from actual receipt of the list in
which to determine if one such person is acceptable;
8.2.3 If the parties are unable mutually to agree upon a neutral arbitrator as described
above; the matter of the selection of an arbitrator, qualified as above, shall be
submitted to the Orange County Superior Court pursuant to Code of Civil Procedure
Section 1281.6. Upon selection of an arbitrator, the arbitration shall be conducted
consistent with the provisions of Code of Civil Procedure Section 1280, et seq., as
are deemed practicable by the arbitrator, considering the nature of the dispute.
8.3 The costs of arbitration, including but not limited to reasonable attorneys' fees,
shall not be recoverable by the party prevailing in the arbitration, including the court costs and
reasonable attorneys' fees incurred if an arbitration conducted hereunder • is appealed to a court
pursuant to the procedures set forth in Code of Civil Procedure Section 1280, et seq. This
provision shall not relieve any party of the duty to indemnify, defend, and hold harmless the
other party under this Agreement.
SECTION NINE: MISCELLANEOUS PROVISIONS
9.1 Notices: All notices, payments, transmittals of documentation and other writings
required or permitted to be delivered or transmitted to any of the parties under this Agreement
shall be personally served or deposited in a United States mail depository, first class postage
prepaid, and addressed as follows:
If to OCWD: Orange County Water District
18700 Ward Street
P.O. Box 8300
Fountain Valley, California 92728
Attn: General Manager
If to RETAILER: City of Santa Ana
20 Civic Center Plaza
P.O. Box 1988
Santa Ana, California 92701
Attn: Clerk of the Council
With a courtesy copy to:
Director of Public Works
(same address as above)
or such other address or person as OCWD or RETAILER shall direct in writing. Service of any
instrument or writing by mail shall be deemed complete forty-eight (48) hours after deposit in a
United States mail depository.
9,2 Term and Amendment: The term of this Agreement shall be for thirty (30) years
from the date hereof, Either party shall have the right to terminate this Agreement by written
notice to the other at least three (3) years prior to the termination date. The parties must mutually
agree in writing to extend the term of this Agreement. This Agreement may only be amended or
modified by mutual agreement in writing of OCWD and RETAILER.
9.3 Limitation on Sales by QCWD: OCWD acknowledges and agrees that, except as
provided herein or with the prior written consent of RETAILER, OCWD is not now and will not
in the future become a wholesale or retail seller of Project Water within the service boundaries of
RETAILER without RETAILER's written consent, and OCWD further agrees that it will not use
or contract with any entity other than RETAILER for the purpose of selling and distributing
Project Water within the service, boundaries of RETAILER.
9.4 Basin Limitations: OCWD and RETAILER mutually understand and agree that
any and all Project Water delivered and sold by OCWD hereunder shall not constitute either
"supplemental sources" or "groundwater supplies" for the purpose of the annual establishment of
r
basin groundwater production requirements and limitations by OCWD pursuant to Section 31.5
of the OCWD Act, Project Water is hereby established as a separate class of water for the
purposes of Section 31.5 of the OCWD Act.
9.6 Conditioug Subsequent: The performance of this Agreement is conditioned upon
OCWD's continued ability feasibly to produce and distribute Project Water for sale to
RETAILER and resale by RETAILER to Project Customers in a cost-effective manner.
Subsequent to the date of this Agreement, should OCWD determine in its sole discretion that
unanticipated increases in the cost of producing or distributing Project Water or new or modified
regulatory requirements governing the production, distribution, Quality or use of Project Water
render the Green Acres Project economically unfeasible, OCWD may cease production and
distribution of Project Water upon ninety (90) days written notice to RETAILER. In the event
that OCWD ceases the production and distribution of Project Water pursuant to this paragraph
9.6, this Agreement shall terminate and OCWD shall incur no liability to RETAILER or any
Project Customer by reason of the termination of this Agreement or the termination of
production and delivery of Project Water.
9.7 No Duplication of Services Intended or Created: OCWD and RETAILER
mutually understand and agree that the construction and operation of the Project Facilities and
the distribution and sale of Project Water by OCWD to RETAILER for sale by RETAILER to
Project Customers pursuant to this Agreement do not constitute either a duplication of
RETAILER's retail water service or a taking of any property of RETAILER within the meaning
of Section 1501, or seq., of the California Public Utilities Code. RETAILER shall have no right
to institute any action against OCWD pursuant to Sections 1503, 1504 or 1505.5 of the Public
Utilities Code by reason of the construction and operation of the Project Facilities and the
distribution and sale of Project Water by OCWD to RETAILER in conformance with this
Agreement.
9.8 Warrg=: OCWD represents and warrants that under the OCWD Act, OCWD,
without the consent of any other public agency water purveyor, may enter into this Agreement to
deliver and sell Project Water to RETAILER for resale by RETAILER to Project Customers or
lands within the service boundaries of RETAILER.
9.9 Construction: This Agreement shall be construed according to its plain meaning
and as if prepared by all parties hereto. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
9.10 Integration: The parties herein have set forth the whole of their agreement, and the
performance of this Agreement constitutes the entire consideration intended herein.
9.11 Successors: This Agreement and all of the provisions herein shall be binding upon
and inure to the benefit of OCWD and RETAILER, and their respective successors and assigns.
WHEREFORE, the parties herein have executed this Agreement as of the date set forth
above.
APPROVED AS TO FORM: Orange County Water District
Counsel for '
County Water District
APPROVED AS TO FORM:
SOMA R. CARVALHO, CITY ATTORNEY
A z7
By
ohn M. Funk,
Assistant City Attorney
ATTEST
Maria D. Huizar
City Clerk
P
By
By
CITY OF SANTA ANA
By
Acting City Manager
RECOMMENDED FOR APPROVAL
Im
Fred Mousavipour
Director of Public Works
Cxhib
16 of 20
25B-54
17 of 20
25B-55
Exhibit Q RETAILER's Current Project Customers and Anticipated Annual Demand
Project Customer
Meter Number
Estimated Annual Usage
sore -feet er Y.ear
_
Centennial Soccer Fields 7267
354
18.0
Centennial Soccer Fields 7266
66
0.3
Centennial Soccer Fields 7273 (A)
77341647
22.5
Centennial Soceer Fields 7273 B}
74947636
35.6
Homo Kora Park
144
18.6
Bike Trail 3611 S. Flower St.
3173
2.7
McFadden School
142
34,0
Adams Park
75572383
9.5
Chroma System Ar et. ein
35
8.9
Chroma System -Landscape
1909
2.4
South Coast Villape
_
6344
_ 10.6
Medical Office
2564
7.8
_Kaiser
3601 MacArthur / Chick-fil-A
2864
1.6
SAIL S,A. LEdinger Ave)
270
18.7
SAUD High School #6
664
27.3
Griset/MacArthur(E of Crreenville_St: 2"
77341639
W 3.6
Griset/MacArthur(l of Greenville St.) 3"
690
13.5
Bear St./Garry: 3101 S. Bear St
2239
3.4
Bear St./Garry: 3011 S. Bear St. _
Thornton Park (E end Bear/Ser erstrom
2376
42
1.3
46.8
Harbor Median N. of MacArthur
10161
0.7
SAR Trail Fairview & 12th sub -meter
78732358
0.5
SAR Trail North of 17th sub -meter
6836
0.9
SAUSD Sports Complex
326
—64
Godinez High School Centennial Park
Sab-Meter
Versailles on the Lake Apartments
Future �10
Exhibit D: OCWD Unit Price Calculation for Project Water Sold to RETAILER
Revisions to Exhibit D by OCWD do not require an amendment to this Agreement,
Fiscal Year 2015.2016 calculation listed below, This unit price shall be effective for Fiscal Year 2017-2018.
Previous fiscal year operational
Previous fiscal year Repair
Debt service payments,
and maintenance cost to operate,
and Rehabilitation Fund
This figure may vary as
treat, and distribute Product
contribution for Pr
Project
terms for loans, certificates
Water (Electricity, Chemicals,
Facilities. This figure may be
of participation, and other
Labor, Maintenance, Testing, +
+
periodically reviewed and
Project Facilities financing
$738
Utility Location Services,
Replenishment Assessment Value
adjusted by OCWD Board as
change. Smoothing may
occur to avoid sudden
per acre
of Deep Well Blending Water)
necessary
increases to thisfigure
foot
$1,173,230.46
$936,678.00
$980,296.67
Previous
fiscal year Project Water in acre-feet
4,186.09
Estimated fume fiscal year rates provided for planning purposes only. Rates are subject to substantive change prior to
implementation.
FY 2018-19: $778 per acre foot
FY 2019-20: $769 per acre foot
FY 2020-21: $741 per acre foot
FY 2021-22: $761 per acre foot
FY 2022-23: $782 per acre foot
19 of 20
25B-57
Exhibit E: Typical Project Water Quality
Revisions to Exhibit E by OCWD do not require an amendment to this Agreement.
Component
Concentration Range
m /L
Total Dissolved Solids
700-1,050
Flardness
170-350
Calcium
45 - 100
'Magnesium
15-35
W
Potassium
10-25
Sodium
154 - 250
Bicarbonate
170-250
Chloride
170-320
Sulfate
_ 160-225
Boron
0-3-0.6
Fluoride
0.7-1.4
Silica
15-24
Total Nitrogen
2,4-20
Phosphate Phosphorous
0.06-4
Chemical Oxygen Demand
10-35
Sodium Adsorption Ratio
3 - 7
Exhibit E shall be revised if and when OCWD modifies the tertiary treatment technology,
disinfection process, and/or introduces OCSD Plant #2 effluent to the GAP treatment process.
r