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20-0121_SANTA MARGARITA WATER DISTRICT_Annexation Agreement ANNEXATION AGREEMENT This Annexation Agreement,dated as ofitilAf al,2020(this"Agreement"),is entered into by and between the City of San Juan Capistrano�a municipal corporation duly organized and existing under the laws of the State of California (the "City"), and the Santa Margarita Water District, a water district duly organized and existing under the California Water District Law (California Water .Code Section 34000 et seq.) ("SMWD"). The City and SMWD are, together, referred to in this Agreement as the "Parties" and, individually, as a"Party. RECITALS A. The City owns and operates utilities systems (the "Utilities Systems") consisting of: (i) a potable water system and a recycled water system (together, the "Water System") and (ii) a wastewater system (the `.`Wastewater System"). • B. In 2015, the City began to evaluate options to re-organize the Utilities Systems. C. Based on such evaluation, in August 2016,the City submitted an application to the Orange County Local Agency Formation Commission ("LAFCO") pursuant to the Cortese-Knox Hertzberg Local Government Reorganization Act of 2000, set .forth in California Government Code Section 56000 et seq. (the "Reorganization Act") for a.Municipal Service Review,to assess the potential transfer of the operation and facilities of the Utilities Systems to another public agency. . ' D. After a period of study and the undertaking of a study session and then a public hearing, LAFCO received and filed the final Focused Municipal Service Review report on October 10,2018 (the"MSR"). ' E. The MSR assessed the potential transfer of the'Utilities Systems to one or a combination of two or three independent special districts with'service boundaries adjacent to the City: (i)Moulton Niguel Water District("MNWD"), (ii) South Coast Water District("SCWD") and(iii) SMWD. • . F. After additional discussions with MNWD, SCWD and SMWD, the City expressed its intention on February 19, 2019, to proceed by focusing its negotiation with SMWD with respect to the transfer of the Utilities Systems. . . G. The transfer of the Utilities Systems to SMWD will require a reorganization and/or change of organization within the meaning of the Reorganization Act. H. SMWD will submit to LAFCO an application and a'plan for services for a sphere of influence amendment and annexation (collectively, the "LAFCO Application"), and LAFCO may impose,terms and conditions as part of any such annexation. I. The Parties entered into a Memorandum of Understanding, dated as of August 23, 2019 (the "MOU"), which memorialized certain key understandings between the Parties with 1 respect to the annexation and other related matters, including the development of this Agreement. = ., ,t.i J. This Agreement'shall supersede.the MOU in all respects. NOW, THEREFORE, IN CONSIDERATION.OF THE MUTUAL COVENANTS AND CONDITIONS CONTAINED HEREIN, AND OTHER VALUABLE CONSIDERATION, THE ADEQUACY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS: 1. DEFINITIONS Unless the'context otherwise requires, capitalized terms used in this Agreement'shall have the meanings set forth in Exhibit A. 2. PURPOSE The Parties intend that this Agreement: (i) set forth certain key terms to be incorporated into the LAFCO Application, and (ii) address how other matters,pertaining'to the Annexation will be carried out by the Parties. 3. LAFCO APPLICATION; COOPERATION 3.1. - LAFCO Application. ' (a) 'As soon as practicable upon the Parties' execution of this Agreement (by March 31,2020, unless otherwise agreed upon in writing by the Parties), SMWD shall submit the LAFCO Application (in form and substance acceptable to the City) to LAFCO. Prior to submission, a copy of the LAFCO Application shall be provided to the City. (b) The City agrees to support the LAFCO Application so long as it is consistent with this Agreement and take all reasonably necessary action for such support, including, but not limited to,providing letters, documents or statements of support if necessary, and attending public hearings. ' 3.2. Cooperation in Good Faith; Target Date. (a) The Parties shall cooperate in good faith to pursue the LAFCO Approval and complete the Annexation, so long as they are consistent with the terms of this Agreement and the Collateral Agreements and Documents. . (b) Until the earlier of: (1)the Annexation Effective Date,or(2)the termination of this Agreement pursuant to Section 20.2: (i) . .The City shall not engage, negotiate with, or solicit or accept proposals from, any third party regarding the transfer of the Utilities Systems. ' 2 (ii) The City shall continue to operate the Utilities Systems in a reasonable manner consistent with past practices. The City shall not engage in any transaction outside of the ordinary course of business that would materially adversely affect the principal financial elements of the Utilities Systems to be transferred to.SMWD as contemplated herein. Notwithstanding the limitations of this paragraph, nothing herein shall preclude the City from entering into agreements or undertaking projects before the Annexation Effective Date that are reasonably necessary as determined by the City for the safe and effective operation of the Utilities Systems. (c) . The Parties agree that the Annexation Effective Date shall be no earlier than 60 days after the issuance of the LAFCO Certificate of Completion (which is the expiration of the period to challenge the LAFCO Approval under California Civil Code of Procedure Section 860 et seq.); provided, if a legal challenge to this Agreement or the LAFCO Approval has been filed on a timely basis, then unless otherwise required by law, the Annexation Effective Date shall take place after the final resolution of the legal challenge(s) in a manner that results in this Agreement and Annexation remaining valid and enforceable with terms consistent with this Agreement and the Collateral Agreements and Documents. (d) The City shall cooperate with all reasonable requests by SMWD to implement the terms,or to effectuate the intent,of this Agreement and the Collateral Agreements and Documents, so long as the same do not impose any liability or additional costs on the City beyond that contemplated in this Agreement and the Collateral Agreements and Documents. Such cooperation shall include, but not be limited to: (i) the 'execution of documents and instruments that are reasonably required for such purposes, and (ii) with respect to any request by SMWD regarding historical information about the Utilities Systems(which request shall be coordinated with the City Manager or the City Manager's designee), the provision of written or verbal responses by City employees involved in the operation of the Utilities Systems to the extent that the information is known to such employees; provided, in no event shall the City be required to disclose any information subject to attorney-client privilege. 3.3. SMWD Work Plan. To ensure the continuous and efficient provision of services to the Customers and operation of the Utilities Systems, SMWD shall prepare the SMWD Work Plan and shall present the SMWD Work Plan to the City Manager by March 31, 2020, or such later date as agreed upon in writing by the Parties. It is acknowledged that the implementation of the SMWD Work Plan will be subject to applicable law and the availability of funding. 3.4. Regulatory Permits. SMWD shall be solely responsible for obtaining all necessary regulatory permits for SMWD's operation of the Utilities Systems on and after the Annexation Effective Date. 4. REPRESENTATIONS REGARDING AUTHORITY,VALIDITY 4.1. City Representations. The City represents and warrants as follows: (a) The City is a municipal corporation duly existing under the laws of the State. 3 (b) The City has full legal right and power to enter into this Agreement. (c) The City's execution and delivery of this Agreement has been authorized by all necessary action on the part of the City. (d) Assuming SMWD's due authorization, execution and delivery, this Agreement constitutes the legal, valid, and binding agreement of the City, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles, to the exercise of judicial discretion in appropriate cases and by the application of equitable principles if sought and by the limitations on legal remedies imposed on actions against public entities in the State. (e) No action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body is pending and notice of which has been received by the City or, to the City's knowledge, threatened in any way contesting or affecting the validity or enforceability of this Agreement, or contesting the powers of the City with respect to this Agreement. 4.2. SMWD Representations. SMWD represents and warrants as follows: (a) SMWD is a water district duly organized and existing under the California Water District Law (Water Code Section 34000 et seq.). (b) SMWD has full legal right and power to enter into this Agreement. (c) SMWD's execution and delivery of this Agreement has been authorized by all necessary action on the part of SMWD. (d) Assuming the City's due authorization, execution and delivery, this Agreement constitutes the legal, valid and binding agreement of SMWD, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other laws affecting the enforcement ,of creditors' rights generally and the application of equitable principles, to the exercise of jdicial discretion in appropriate cases and by the application of equitable principles if sought and by the limitations on legal remedies imposed on actions against public entities in the State. (e) No action, suit, proceeding or investigation at law or in equity before or by any court of governmental agency or body is pending and notice of which has been received by SMWD or, to SMWD's knowledge, threatened in any way contesting or affecting the validity or enforceability of.this Agreement, or contesting the powers of SMWD with respect to this Agreement. 4 5. CEQA 5.1. SMWD to be Lead Agency for CEQA Compliance. SMWD shall be the lead agency for purposes of any CEQA compliance in connection with the Annexation and the LAFCO Application,pursuant to Section 15051(a) and Section 15051(d) of the CEQA Guidelines (14 Cal. Code Regs. 15000 et seq). . . . 5.2. CEQA Determination. The Parties have determined that approval of this Agreement qualifies as exemptfromadditional review under CEQA because the activity to be undertaken by the Agreement qualifies under various exemptions to CEQA, including the Class 19 Categorical Exemption (State,CEQA Guidelines Section 15319(a)) because the Agreement is to facilitate the annexation of existing City-owned and operated Utility Systems infrastructure into the boundaries, and operations, of SMWD and the Class 20 Categorical Exemption (State CEQA Guidelines Section 15320) because the annexation constitutes a change in organization of the Utility Systems rather than the development of new or additional utility systems. The Parties have also determined that no substantial evidence exists to find that the exceptions to these exemptions apply and that these determinations constitute the independent judgment of each of the Parties to this Agreement. 6. ASSETS INVENTORIES, CONTRACT LISTS, ACCOUNTING RECORDS; TRANSFER OF ASSETS AND CONTRACTS 6.1. Asset Register; Contract Lists; Accounting Records. (a) SMWD acknowledges that it has reviewed the following: (i) databases containing descriptions of the infrastructure assets of the Utilities Systems(including but not limited to pump stations,reservoirs, connections,wells,mains and pipes, and lift stations,but'excluding the real property), (ii) a list of the current capacity agreements and interconnection agreements and a copy of each such agreement; (iii) a, list of the current contracts with third party vendors and professional services consultants(except City Attorney Agreements) pertaining to the Utilities Systems, and a copy of each such contract; (iv) . a listof agreements with other utilities agencies, including those pertaining to the City's membership or cooperation with each of SJBA, SOCWA, MWDOC, JTM Joint Venture, and the ETM Joint Venture; and (v) accounting records of the Utilities Systems, including: (A) current customer balances; and (B) current account balances of the Water Fund and the Sewer Fund.' • 5 (b) SMWD has conducted such inspection as it deems necessary or appropriate of the infrastructure assets of the Utilities Systems. (c) The Parties agree that, except for the vehicles to be identified in the Assignment Agreement, none of the vehicles currently used by the City in connection with the Utilities Systems (regardless how they are reflected in the current City records) shall be included in the Assets to be transferred to SMWD. (d) Unless an item is specifically identified by the City as among the Retained Assets, all computer equipment and SCADA systems associated with the GWRP and the operation of all pump stations shall be transferred to SMWD on the Annexation Effective Date. 6.2. Transfer of Assets and Contracts Generally. (a) The City and SMWD shall enter into the Assignment Agreement,to become effective on the Annexation Effective Date. The Assignment Agreement shall provide for the City's transfer of all of its rights, title and interest in and to all Assets, contracts and accounts related to the Utilities Systems, except for: (i)the Retained Assets and the Retained Properties, (ii) the City Attorney Agreements, (iii) the SCWD Water Services Agreement, (iv) the City Water Rights, and (v) to the extent the Parties, in consultation with respective legal counsel, choose another form(s) of instrument (collectively, "Other Assignment Instruments") to effect such transfer: (A) real property interests, (B) settlement agreements, and (C) such other matters as agreed upon by the Parties. (b) SMWD shall accept the assignment, and assume all obligations and liabilities transferred to it pursuant to the Assignment Agreement and the Other Assignment Instruments. (c) SMWD shall accept all facilities,properties and other Assets of the Utilities Systems transferred to it on an"as is" basis as of the Annexation Effective Date. (d) With respect to the contracts to be assigned to SMWD, the City shall not extend the term of any agreement identified in the Assignment Agreement without SMWD's written approval which approval shall not be unreasonably withheld. 6.3. SCWD Water Services Agreement. SMWD agrees to engage SCWD in discussions regarding the disposition of the SCWD Water Services Agreement prior to the Annexation Effective Date. SMWD shall not enter into any agreement with respect to the disposition of the SCWD Water Services Agreement without the City's written consent. 6.4. Water Rights Transfer Agreement. The Parties shall negotiate in good faith and enter into the Water Rights Transfer Agreement with respect to the City's Water Rights no later than the Annexation Effective Date (with the agreement to become effective as of the Annexation Effective Date). Pursuant to the Water Rights Agreement, as may be necessary, appropriate or beneficial to SMWD's provision of water service to the City and existing and future customers within the Territories, and as may be permitted by law, the City will transfer to, or otherwise provide SMWD with the right to exercise, the City's Water Rights, and SMWD will agree to 6 exercise reasonable efforts to protect and maintain each and all of the City's Water Rights first for the benefit of existing and future customers within the Territories. 6.5. Real Property. (a) Each Party shall confirm its acceptance of a Real Property Inventory Report to be prepared by a consultant retained by SMWD and acceptable to the City, which shall identify: (i) all of the City's real property interests, including easements, which are currently part of the Utilities Systems; (ii) the Transferred Properties, (iii) the Retained Properties, and (iv) the New Easements. The City shall review the accuracy of the Real Property Inventory Report and the lists of Transferred Properties and Retained Properties and shall provide SMWD with information as to any material deficiencies or omissions, known to City staff, in that Report. The property currently identified by the City as the "Utilities Administration Building" shall be one of the Retained Properties. The Real Property Inventory Report shall be finalized only when it has been reviewed by the City;and is in the fonn acceptable to both Parties. (b) The Parties agree that the real property interests shall be transferred by City to SMWD either by grant deed or quitclaim deed, as mutually agreed to by the Parties. (c) With respect to each Transferred Property,the City shall provide to SMWD copies of the following materials to the extent the same are in the City's possession: (i) the deed or other instrument showing the City's ownership or other interest in such property, (ii)the most recent title report,and(iii)the most recent environmental and,physical condition report(e.g., Phase I Environmental Site Assessment) and notices. The City shall cooperate with SMWD and provide any information or other documentation related to the Transferred Property, that is currently in the possession of the City and which is not otherwise subject to the attorney-client privilege for purposes of evaluating the Transferred Property. (d) SMWD may, at its own expense, obtain one or more title reports or conduct environmental reviews with respect to the Transferred Property, provided, any access to the property shall be subject to the,advance notice and legal or public safety restrictions pursuant to Section 6.6(b). (e) The City and SMWD shall jointly review the encumbrances identified on title reports for the Transferred Property. With respect to any encumbrance which the Parties agree should and can be removed before the transfer of the property to SMWD, the City will provide such assistance(including the execution of instruments) as SMWD reasonably requests to remove the encumbrance. 6.6. Periodic Updates and Further Access Before Annexation Effective Date. Prior to the Annexation Effective Date or the termination of this Agreement, whichever is earlier: (a) City Representatives and SMWD Representatives shall conduct periodic meetings, either in person or via teleconference, to provide updates regarding acquisitions, dispositions or other changes, if any, to the Assets, contracts and obligations to be transferred to SMWD, and the status of ongoing operations of the Utilities Systems, including updates regarding the finances of the Utilities Systems and its fund reserves. 7 (b) Upon reasonable notice and subject to any legal or public safety restrictions, the City shall allow SMWD Representatives access to the facilities and records of the Utilities Systems for inspection purposes. (c) The City shall give SMWD Representatives full access and opportunity to inspect,investigate,and audit,as they relate to the City's operation and management of the Utilities Systems,the books,records, contracts, and other documents of the City and all of the City's assets and liabilities (actual or contingent), including, without limitation, inspecting the City's property and conducting additional environmental inspections of property and reviewing financial records, contracts, operating plans, and other business records for the purposes of evaluating issues related to the operation of the Utilities Systems. 'The City further agrees to provide SMWD Representatives with such additional information as may be reasonably requested pertaining to the Utilities Systems, Transferred' Properties and Assets. Any such access shall be subject to the provisions' of paragraph (b) of this Section related to reasonable advance notice and legal and public safety restrictions; and nothing in this Agreement shall require the City to disclose or provide access to attorney-client privileged communications. 7. CREATION OF . NEW EASEMENTS; 'ADDITIONAL COOPERATION REGARDING ACCESS AND WORK WITHIN CITY • 7.1. The City and SMWD shall enter into an Easement Agreement for the creation of the New Easements (which shall be identified in the Real Property Inventory Report). The Easement,Agreement shall become effective as of the Annexation Effective Date. SMWD shall cause the Easement Agreement to be recorded in the Orange'County Official Records. Once SMWD receives confirmation of such recordation,it shall cause a copy of such recorded Easement Agreement to be provided to the City. . 7.2. To the extent that, after the Annexation Effective Date, SMWD proposes to create a new easement, an access license or a lease with respect to any City-owned property in order to effectively operate the Utilities Systems, the City shall cooperate with SMWD in good faith to consider, and develop the appropriate instruments for, such creation at no charge to SMWD for City staff time or administrative cost;provided that,upon the City's request and SMWD's approval of said request, SMWD shall either pay directly, or reimburse the City for any expenses that are payable to third'parties. ' 7:3. SMWD shall provide advance notice to the City of any work performed on the Utilities Systems within City limits by SMWD. ' The City shall not impose any permit or application fees' or costs (including but not limited to, encroachment permits and historic, archaeological and, paleontological resource permits) that the City charges to other utility operators, which fees or costs relate to SMWD's operation of the Utilities Systems. 7.4. SMWD will accept the City's current (as of the date this Agreement is executed) standard trench paving requirements that the City applies to other utility operators for any Water System or Wastewater System related work within City right of way, including any additional paving requirements beyond SMWD standards. 8 8. OUTSTANDING BOND OBLIGATIONS 8.1. Transfer of Outstanding Bond Obligations. (a) SMWD acknowledges that the City has provided such documents as SMWD has deemed necessary for its review of the Outstanding Bond Obligations. The City agrees to provide any additional documentation, except attorney-client privileged communications, that SMWD may deem reasonably necessary for purposes of evaluating and understanding the Outstanding Bond Obligations. (b) The Parties agree to jointly negotiate with the respective holders of the Outstanding Bond Obligations to accomplish the successful transfer of such bond debt to SMWD. SMWD shall pledge the revenue necessary for such transfer. SMWD shall retain its own Bond Counsel and the City shall be included as an addressee of each of such Bond Counsel's opinions, except attorney-client privileged communications, regarding no adverse effect on the tax-exempt status of the Outstanding Bond Obligations created by the transfer of the Outstanding Bond Obligations. SMWD shall indemnify the City for any non-compliance with applicable laws (including but not limited to federal tax law) and debt covenants arising on or after the Annexation Effective Date. SMWD may choose to retire such Outstanding Bond Obligations by other means, including, but not limited to, the issuance of bonds (or incurrence of other debt) secured by SMWD's revenues. 8.2. No Outstanding Wastewater System Bond Obligations. The City represents and warrants that there is no outstanding bond debt secured by a lien on or pledge of Wastewater System revenues. 8.3. No Additional Bonds Without SMWD Consent. The City shall not incur any additional debt secured by a lien on or pledge of any funds or assets of the Utilities Systems without SMWD's prior written consent. 9. ASSUMPTION OF LIABILITIES; INDEMNIFICATION 9.1. Disclosure of Pending Litigation. The City represents and warrants that, except as previously disclosed in the Litigation Disclosure List,there is no litigation affecting the Utilities Systems to which the City is a party that is either: (i)pending and notice of which has been received by the City, or (ii) threatened and actually known to the City. The City shall promptly provide SMWD written updates to the Litigation Disclosure List, if any such new litigation arises before the Annexation Effective Date. In addition, pursuant and subject to common interest agreements by and between the City and SMWD, the City shall provide such documentation concerning the matters listed on the Litigation Disclosure List (and any updates to the Litigation Disclosure List) as SMWD may reasonably request in preparation of SMWD's assumption of the defense (or prosecution) of such litigation. 9 . 9.2. Settlement Agreements Obligations. (a) Effective as of the Annexation Effective Date, the City shall delegate to SMWD, and SMWD shall assume, all of the City's.rights and obligations under the stipulated judgments and related settlement agreements pertaining to the following: (i) San Juan Hills Golf Club, LP, v. City Of San Juan Capistrano, et al. (Orange County Sup. Court Case No. 30-2014-00742347-CU-CO-CJC) filed 08/28/2014; stipulated judgment entered 06/21/2016); and (ii) Jeffrey Cotton and Shannon Cotton, As Trustees Of The Cotton Family Trust Dated September 9, 2002 v. The City Of San Juan Capistrano, et al. (Orange County Sup. Court Case No. 30-2015-00778655) filed 03/23/2015; stipulated judgment entered 11/03/2016). (b) The City and SMWD shall cooperate to obtain such consents or approvals as necessary to accomplish such delegation and assumption. 9.3. Defense of SCWD Administrative Complaint and Daneshmand Case Before Annexation Effective Date. Prior to the Annexation Effective Date, the City shall continue to be responsible for its defense, from whatever resources the City deems appropriate, with respect to the SCWD Administrative Complaint and the Daneshmand Case;provided,with respect to each such matter, the City shall not enter into any resolution of the matter or agree to any settlement term that will materially adversely affect SMWD's operation of the Utilities Systems without consulting SMWD and obtaining SMWD's prior written consent. 9.4. SMWD Assumption of Obligations and Liabilities. (a) The City agrees to take all reasonable efforts to exhaust any and all available coverage from the City's risk pool insurance authority as it relates to any claims or litigation arising out of the City's operation of the Utilities Systems prior to the Annexation Effective Date. (b) From and after the Annexation Effective Date, SMWD shall be responsible for all Post-Transfer Liabilities,including the defense of the SCWD Administrative Complaint and the Daneshmand Case, from resources of SMWD. With respect to each such matter, SMWD shall not enter into any resolution of the matter or agree to a settlement term affecting the City without: (i) consulting with the City, and (ii) obtaining the City's written consent to the settlement. If, however, the settlement terms involve only payments for which SMWD will pay or otherwise reimburse the City and the settlement does not require the City to take any other action and does not contain anything else affecting the City, and contains adequate and appropriate releases, the City's prior written consent shall not be unreasonably withheld. In addition, SMWD shall reimburse the City for all liabilities, costs and expenses (excluding City staff time) incurred by the City in connection with the SCWD Administrative Complaint, the Daneshmand Case and any other Post-Transfer Liabilities after the Annexation Effective Date (recognizing that such liabilities, costs and expenses would have been appropriately allocated to the Water System or Wastewater System, as applicable, regardless of the transfer), unless such liabilities, costs and expenses incurred are covered by the City's risk pool insurance. Subject to the foregoing,the City 10 shall cooperate with SMWD in good faith to assist SMWD in SMWD's defense of any Post- Transfer Liabilities and provide appropriate factual information and staff assistance; provided that the City shall not be required to disclose any information which is subject to attorney-client privilege. (c) The intent of the foregoing is for SMWD to assume responsibility for all Post-Transfer Liabilities and not expand any liability of SMWD that would not have been the City's liability during the City's operation of the Utilities Systems prior to the Annexation Effective Date. 9.5. Indemnification. From and after the Annexation Effective Date, SMWD shall defend,with counsel approved by the City,indemnify and hold harmless the City from and against: (i) all Post-Transfer Liabilities; (ii) any action or proceeding to attack, review,.set aside, enjoin, void or annul this Agreement or any of the Collateral Agreements and Documents,or any provision hereof or thereof, including the environmental determination and documents prepared and approved in connection with the approval of this Agreement under CEQA or any of the Collateral Agreements and Documents; and(iii) any action or proceeding to attack,review, set aside, enjoin, void or annul the LAFCO Approval, or any provision thereof, including the environmental determination and documents prepared and approved by LAFCO under CEQA in connection with the LAFCO Approval. SMWD shall also defend, with counsel approved by the City, indemnify and hold harmless City officials, employees and agents for any matter within the scope of the indemnification under this Section 9.5,to the same extent, and subject to the same limitations,that apply to the City's obligations to defend, indemnify and hold harmless such City officials, employees and agents under California law or applicable City contract with those officials, employees or agents. SMWD shall not seek reimbursement or contribution from the City for any costs, expenses or damages for,or related to,matters within the scope of the indemnification under this Section 9.5. 10. CITY PROPERTY TAX RETENTION 10.1. No Exchange of Property Tax. The Parties agree that there will be no exchange of property tax revenues between the Parties in connection with or arising from the Annexation. 10.2. Cooperation. The Parties shall cooperate to take such action as necessary or appropriate to effectuate Section 10.1. 11. PAYMENT OF CITY RETAINED PENSION COSTS 11.1. Recognition of City Retained Pension Cost. The Parties recognize that, because of the Annexation, the City will incur the OCERS Obligation. 11.2. Payment by SMWD. To address this retained cost, SMWD agrees to pay the OCERS Obligation and shall,in its discretion,pay the OCERS Obligation in either a lump payment or in level installments as prescribed by the OCERS 6/17/19 Determination. 11 12. USE AND TRANSFER OF CASH BALANCES 12.1. Transfer of Unexpended Cash Balances. All unexpended cash balances in the Water Fund and the Sewer Fund shall be transferred to SMWD on the Annexation Effective Date. 12.2. Use of Cash Balances Before Annexation Effective Date. Notwithstanding the provisions of Section 13.1, nothing contained herein shall preclude the City from using City reserves related to its Utilities Systems before the Annexation Effective Date consistent with Section 3.2(b)(ii). In addition, before the Annexation Effective Date, the City may use City reserves related to its Utilities Systems to pay any valid claim, demand, liability or judgment relating to or otherwise arising out of the City's operation of the Utility Systems. The City agrees that before the Annexation Effective Date, no expenditure related to any new Utilities Systems capital project that has a total estimated project cost of$25,000 or more shall be made without at least five (5)-calendar-days' written notice to the SMWD General Manager before the material commencement of the project. 13. JOINT POWERS AUTHORITIES AND OTHER JOINT VENTURE MEMBERSHIP; GROUNDWATER RECOVERY PLANT PROPERTY AND OTHER CITY OWNED ASSETS INVOLVED IN JOINT VENTURE PROJECTS 13.1. Transfer of City Joint Venture Rights and Obligations. The City is a member of several Joint Ventures for the operation of the Utilities Systems,including SJBA, SOCWA, the JMT Joint Venture, the ETM Joint Venture and MWDOC. The City and SMWD shall cooperate to jointly negotiate with each Joint Venture to provide for the transfer of the City's rights and obligations as a member to the Joint Venture or as a counterparty to any contract with the Joint Venture. 13.2. GWRP Land. The City has leased the GWRP Land, which includes important facilities which are related to the Utilities Systems and associated with the 2014 SJBA Bonds,.to SJBA for construction of the GWRP. The City and SMWD shall cooperate to jointly negotiate with SJBA to modify existing documents to provide for SMWD's operation of the GWRP and account for the transfer of GWRP Land from the City to SMWD as of the Annexation Effective Date or as soon thereafter as is practicable. 14. GOVERNANCE 14.1. Proposed Improvement District No. 9. The City understands that SMWD contemplates a new improvement district, ID9, which will include only the Territories. 14.2. City Voters Participation in SMWD District-Wide Elections. From and after the Annexation Effective Date, registered voters within the Territories shall be eligible to vote in any at-large election for SMWD governing board membership and any other elections involving SMWD district-wide measures. In the event that the SMWD governing board transitions from at- large elections to by-district elections,the boundaries of each electoral district shall be drawn in a 12 manner that shall not dilute.the voting strength of the voters within the Territories, except to the extent necessary to comply with applicable law. 15. INFRASTRUCTURE INVESTMENT - 15.1. Capital Improvement Budget., •SMWD. shall.use its.best efforts to include in the budget for its Capital Improvement.Program expenditures,of no less than $25,000,000 over the next ten years for improvements in ID9 or for the direct and principal benefit of 1D9: 15.2. Capital Improvement Projects Already in Progress. From and after the Annexation Effective Date, SMWD shall use its best efforts to timely and efficiently complete the capital improvement projects relating to the Utilities Systems which already have been approved and in progress before the Annexation-Effective Date. 16. RATE SETTING 16.1: Rate Study. As soon as practicable after the Annexation Effective Date, SMWD shall initiate a:rate study of the water and wastewater ratesfor the Customers. 16:2. Interim Billing Reduction. For the initial period after the Annexation Effective Date, before the completion of the rate study and the subsequent proceedings to establish rates, SMWD will, consistent with legal requirements. and procedures, charge the Customers, in the Territory in a manner that,.on average, customer tier 1, commodity water rate for'potable water services'will reflect a modest overall reduction in the charges payable by the Customers that are billed each month for water services (relative to the rates charged by the City immediately before the'Annexation Effective Date). • 163. Contingency Adjustments. Notwithstanding the'foregoing, SMWD may adjust the rates and charges to be paid by the Customers to the extent necessary to cover the'payments for liabilities, costs and expenses made pursuant to Section 9.3, Section 9.4(a), Section 9.4(b) or Section'9.5. ,During the rate setting process, SMWD may include in the rates an amount to recover any unforeseen and/or uninsurable liabilities'that'might arise out of the City's operation of the Utilities Systems. Such rates and charges shall be adopted consistent 'with applicable legal requirements 'and procedures, including but not limited to the'Proposition 218 requirements and process. The City'agrees to support SMWD's effort to address the recovery of any unforeseen and/or uninsurable liabilities arising out of the City's operation of the Utilities Systems in the rate setting process. 16.4. - Potential for Future Bonds. 'Recognizing the need for future improvements to the Utilities Systems infrastructure within ID9,the City acknowledges the potential issuance of future bonds or other financing'measures'to address'future capital Costs concerning Collections systems, conveyance systems and distribution systems within ID9 or directly and,principally benefitting Customers-within ID9. ID9 Customers shall be responsible for their pro rata•share of such costs of future capital improvements and facilities. 13 ' 17. CUSTOMER PAYMENT AT CITY HALL AFTER TRANSFER 17.1. Maintenance of Bill-Pay Presence at City Hall. SMWD and the City shall cooperate to make available to the Customers a means to pay their water and wastewater bills at City Hall for a minimum of two years. SMWD and the City shall cooperate in addressing SMWD concerns related to the transition of Customer billing and use all efforts reasonably necessary to facilitate the transition of the billing system. 17.2. Designated City Employees; SMWD On-Line Access. The City shall make available one or more designated City employees to assist with the collection of such payments. SMWD shall :provide on-line access to such 'designated employees, in connection with the processing .of such payments. The City shall take 'all reasonable action requested by SMWD concerning the transition of the billing system' to SMWD including assisting SMWD, when requested, with the dissemination of information related to the transition of customer billing to SMWD. 17.3.' SMWD to Reimburse City Costs and Expenses. SMWD shall reimburse the City for reasonable costs and expenses relating to the provision of Customers' bill-paying.access and assistance(including,but not limited to,half of the personnel cost of one designated full-time City employee providing such service for no ress than two yearsfrom the Annexation Effective Date). 18. STAFFING 18.1.. Personnelto be Transferred. SMWD provided a list to the City identifying the sixteenanticipated new positions.that, would result from the Annexation. Based on the list developed, SMWD shall extend initial offers of employment to current City employees,of the Utilities Systems in positions deemed comparable by SMWD. Offers of employment shall be contingent upon the following: (a) re-verification of minimum qualifications; and: (b) pre- employment background check and medical examination. 18.2. Benefits and Compensation. The starting salary for Prospective,Employees shall be offered:at the applicable SMWD salary step for the position that is closest to, but not less than, their base salary at the City on the Annexation Effective Date.. Prospective Employees shall be considered newly.hired SMWD employees for purposes of SMWD employment terms, benefits and compensation, except as otherwise expressly agreed to and duly'authorized by SMWD. 19. COLLATERAL AGREEMENTS AND DOCUMENTS ' 19.1.. Collateral Agreements and Documents to Effectuate Transfer. The Parties acknowledge the need toenter into and.prepare Collateral Agreements and Documents to further effectuate the transfer of the,City's right, title and interests in the Utilities Systems and the related transfers contemplated in this Agreement. Such Collateral Agreements and Documents shall include: (a) the Assignment Agreement(referenced in Section 6.2); (b) the Other Assignment Instruments (referenced in Section 6.2); 14 (c) the Water Rights Transfer Agreement(referenced in Section 6.4); (d) the Easement Agreement (referenced in Section 7); (e) an agreement related to water services at the property known as the"Riding Park"and other City-owned properties; (f) an agreement(or agreements)to effect the transfer of the Bond Obligations pursuant to Section 8; (g) such other agreements and documents required by LAFCO or otherwise determined by the Parties to be necessary or appropriate for the completion of the Annexation. 19.2. Collateral Agreements and Documents Effective Date. The Parties shall cooperate in good faith to complete the Collateral Agreements and Documents in a timely manner, so they will be executed or completed no later than the Annexation Effective Date and, unless otherwise specified in such agreement or document, will become effective as of the Annexation Effective Date. 20. MISCELLANEOUS 20.1. , Notice. Any notice, request, demand or other communication under this Agreement shall be given by first class mail or personal delivery to the Party entitled thereto at its address set forth below,by overnight mail,as a".pdf'attachment to electronic mail, or by telecopy or other form of telecommunication, confirmed by telephone at its number set forth below. Notice shall be effective either (i) upon transmission by telecopy, electronic mail or other form of telecommunication, (ii) 48 hours after deposit in the United States mail, postage prepaid, (iii) in the case of overnight mail,upon delivery to the addressed destination,or(iv)in the case of personal delivery to any person, upon actual receipt. Each Party may, by written notice to the other Party, from time to time modify the address or number to which communications are to be given under this Agreement: If to the City: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager Telephone: (949) 443-6315 E-mail: bsiegel@sanjuancapistrano.org If to SMWD: Santa Margarita Water District 26111 Antonio Parkway Rancho Santa Margarita, CA 92688 Attention: General Manager Telephone: (949) 459-6590 E-mail: danf@smwd.com 15 20.2. Termination. (a) This Agreement shall be terminated at any time before the Annexation Effective Date upon the earlier of the following: (i)upon 30 days'written notice of termination by one Party to the other Party; or (ii) the official announcement by either Party of its abandonment of the transfer of the Utilities Systems as contemplated herein. (b) In the event that either Party decides to-terminate the Annexation proceedings for any reason, each Party shall bear its own costs and expenses, including professional fees and attorneys' fees,incurred in connection with all matters related to the preparation, analysis, drafting and evaluation of the MOU, this Agreement and the Annexation; except that the City shall reimburse SMWD for the cost of the Real Property Inventory Report. 20.3. MOU Superseded; Integration. Upon execution of this Agreement by the Parties, the MOU shall be superseded in its entirety. Except for the Collateral Agreements and Documents,this Agreement, together with all exhibits hereto, constitutes the entire understanding and agreement of the Parties with respect to the subject matters hereof, and integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior or contemporaneous negotiations, discussions and previous agreements between the Parties concerning all or any part of the subject matters of this Agreement. 20.4. Nonliability of City and SMWD Officials, Employees and Agents. No official, employee or agent of the City or SMWD, acting in his or her official capacity, shall be personally liable to the City or SMWD,or any successor or assign,for any loss, costs,damage, claim,liability, or judgment, arising out of or in connection with this Agreement, or for any act or omission on the part of the City or SMWD,unless such liability is permitted and provided by either California law or the applicable City or SMWD contract with that official, employee or agent. 20.5. Interim Operations Agreements. Nothing in this Agreement shall be construed to prohibit the City and SMWD from entering into any limited operations or service agreements, with each other or with other outside consulting firms and entities,related to the Utilities Systems prior to the Annexation Effective Date. 20.6. Construction. (a) Unless the context otherwise indicates,words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine or feminine gender, as appropriate. (b) Headings of sections in this Agreement are solely for convenience of reference, do not constitute a part of this Agreement and shall not affect the meaning, construction or effect of the provisions of this Agreement. 20.7. Not Construed Against Drafter. This Agreement has been negotiated and prepared by the Parties and their respective counsel. The Parties agree that the rule of construction that a contract be construed against the drafter shall not apply. In the event of any ambiguity with 16 respect to a term of condition of this Agreement, such ambiguity shall not be construed for or against a Party on the basis that such Party did or did not author the same. 20.8. Governing Law and Venue. This Agreement has been negotiated and executed in the State and shall be governed by and construed under the laws of the State, except that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in interpreting this Agreement. Any action at law or in equity brought by any Party hereto arising.out'df"thig Agreement shall be-brought in the Superior Courtof State in and for the County of Orange. , 20.9. Severability. If any term of this Agreement is held by aAo rt of competent jurisdiction to be invalid or void, each of the remainder of the provisions shall'continue in full force and effect, unless the rights and interests of a Party under a provision have been materially altered or abridged by such invalidation or voiding. 20.10. No Assignment. No part of this Agreement may be assigned by a Party to another person or entity without the prior written consent of the other Party. 20.11. No Third Party Beneficiary. This Agreement is not intended norshall it be construed to create any third-party beneficiary rights in any person or entity other than the Parties. Nothing in this Agreement, expressed or implied, is intended'to give to any'person other than,the City and SMWD any right, remedy or claim under or by reason of this Agreement: 20.12. Execution in Counterparts. This Agreement may be executed in counterparts, each of which, when the Parties have signed this Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. [Remainder of Page Intentionally Left Blank. Signatures Follow.] 17 IN WITNESS WHEREOF, the Parties to this Agreement have caused the same to be executed by each of their duly authorized officers as follows: CITY OF SAN JUAN CAPISTRANO j 7- -j7/i ce By: 4 •- , , Troy A. Bourne Mayor ATTES \= ` Maria !. s City Clerk APPROVED AS TO FORM: /(.moi% i/. r,—,, z,f-;, Kevin G. Ennis Special Counsel SANTA MARGARITA WATER DISTRICT By: /), Cia: etty at. Olson Presi ir t of Board of Directors ATTEST: 41 Ai .. A/ i J./4-0 Kelly adv., sk I Board Secretary APPROVED AS TO FORM: ektiall/athe DeeAnne Gillick Special Counsel 18 SCHEDULE OF EXHIBITS Exhibit A Definitions Exhibit B Maps showing the Service Areas/Territories of the Utilities Systems 10306-0006\2342077v18.doc EXHIBIT A DEFINITIONS "2014 SJBA Bonds"means the $20,361,090 (original principal amount) San Juan Basin Authority Lease Revenue Bonds (Ground Water Recovery Project), Issue of 2014. "2014A Refunding Bonds" means the $19,922,771 (original principal amount) City of San Juan Capistrano Water Revenue Refunding Bonds, Series 2014A. "2017 Installment Purchase Agreement" means the Installment Purchase Agreement, dated as of December 1, 2017, by and between the City and the Public Property Financing Corporation of California, pursuant to which the City is obligated to make certain Installment Payments (as defined therein, with an original principal component of$8,410,000). "Agreement"means this Annexation Agreement, as the same may be modified from time to time, in writing by both Parties. "Annexation" means SMWD's annexation of the Territories pursuant to the Reorganization Act, as contemplated in the Agreement. "Annexation Effective Date"means the date to be agreed upon in writing by the Parties subject to the terms of the LAFCO Approval, as the date on which the Utilities Systems will be transferred by the City to SMWD to consummate the Annexation. "Assets"means the assets owned by the City that are accounted for in the Asset Register and to be described in the Computer Equipment Report and the Real Property Inventory Report and that are used in connection with and for purposes of operating the Utilities Systems, as applicable, including but not limited to the City Water Rights, physical facilities, real property interests (including easements),personal property, cash or cash equivalents or other funds. "Asset Register" means collectively, databases, lists and other compilations that document all of the Assets of the Utilities Systems. "Assignment Agreement" means the Bill of Sale, Assignment and Assumption Agreement to be entered into by and between the City and SMWD pursuant to Section 6.2(a). "CEQA"means the California Environmental Quality Act,set forth in California Public Resources Code Sections 21000 et seq. "CEQA Guidelines"means regulations implementing CEQA, set forth in Title 14 of the California Code of Regulations Sections 15000 et seq. "City"means the City of San Juan Capistrano, California. A-1 10306-0006\2342077v18.doc "City Attorney Agreements"means, collectively, the agreements that the City has entered into for the engagement of attorney services, for the representation of the City in any matter pertaining to the Utilities Systems, including any matter relating to the Annexation. "City Council"means the City Council of the City. "City Manager" means the City Manager (or in the absence of the City Manager, the Assistant City Manager) of the City. "City Representatives" means, with respect to a specified purpose, the persons (which may be employees,agents or consultants of City)designated by the City Manager,in writing,as authorized representatives of the City. "City Water Rights" means all water rights controlled, exercised, applied for or held by the City, including,without limitation,pueblo,appropriative,riparian,overlying, and prescriptive right,and any other right, allocation or entitlement to divert, produce, or use surface water or groundwater, whether existing at common law or pursuant to any permit,agreement, contract, adjudication, or any judicial or administrative action. "Collateral Agreements and Documents"means, collectively,the agreements to be entered into by the City and/or SMWD and other documents to be prepared as contemplated in Section 19.1 to effectuate the transfer of the City's right,title and interests in the Utilities Systems and the related transfers contemplated in this Agreement. "Computer Equipment Report"means the computer equipment associated with the GWRP and the SCADA systems to be specifically identified by the Parties to be transferred by the City to SMWD on the Annexation Effective Date. "County"means the County of Orange, California. "Customers" means ratepayers of the Utilities Systems. "CVWD"means the former Capistrano Valley Water District(originally known as Orange County Waterworks District No. 4),which was a subsidiary district of the City and subsequently dissolved and merged into the City. The Certificate of Completion of such dissolution issued by LAFCO was recorded on July 29, 2004, in the Official Records of the County, as Document No. 2004000690271. "Daneshmand Case"means"Hootan Daneshinand,et al. v. City of San Juan Capistrano, O.C. Sup. Court Case No. 30-2016-00829167-CU-CXC; App. Ct. Case No. G058394 and all related matters." "ETM Joint Venture" means the undertakings pursuant to the Agreement for Joint Construction and Operation of Water Transmission-Distribution Facilities, dated September 11, 1961, by and between Moulton Niguel Water District and Orange County Water Works District No. 4 (succeeded by CVWD, and later the City). A-2 10306-0006\2342077v18.doc "GWRP" means the Groundwater Recovery Plant operated by the City. "GWRP Land"means the City-owned land(or the applicable portion thereof)on which the GWRP is situated. "ID9" means the new improvement district (currently contemplated to be designated "Improvement District No. 9") proposed to be formed by SMWD, which will consist of only the Territories; provided that until the formation of such new improvement district, "ID9" shall refer to the geographical area of the Territories. "Joint Venture"means a joint powers authority or joint venture of which the City is a member for the operation of the Water System or the Wastewater System. "JTM Joint Venture"means the undertakings pursuant to the Amended and Restated Joint Exercise of Powers Agreement to Operate and Maintain the Joint Transmission Main Facilities, effective February 28, 20.00, by and among Tri-Cities Municipal Water District, Moulton Niguel Water District, Irvine Ranch Water District, CVWD (as succeeded by the City), El Toro Water District, the City of San Clemente, and the SCWD. "LAFCO"means the Local Agency Formation Commission of Orange County, California. • "LAFCO Application" means the application and plan for services for a sphere of influence amendment and annexation to be submitted to LAFCO with respect to the Annexation. "LAFCO Approval" means the action to be taken by the LAFCO Commission to approve the Annexation. "LAFCO Certificate of Completion" means the Certificate of Completion to be issued by the Executive Officer of LAFCO pursuant to California Government Code Section 56658, upon LAFCO Approval. "Litigation Disclosure List" means a list of litigation affecting the Utilities Systems to which the City is a party that is either: (i) pending and actually known to the City, or (ii) threatened and actually known to the City as disclosed to SMWD on January [14], 2020. "MOU" means the Memorandum of Understanding, dated August 23, 2019, by and between the City and SMWD. "MWDOC"means Municipal Water District of Orange County. "MSR" means the final Focused Municipal Service Review report received and filed by the LAFCO Commission on October 10, 2018, assessing the potential transfer of the operation and facilities of the Utilities Systems to another public agency. "New Easements" means easements or access licenses, or other similar real property interests to any Retained Property or any other City-owned property, to be identified in the Real Property Inventory Report,that are proposed to be created in favor of SMWD,to enable SMWD's operation of the Utilities Systems after the Annexation Effective Date. A-3 10306-0006\2342077v18.doc "OCERS"means the Orange County Employees Retirement System. "OCERS 6/17/19 Determination" means the determination by the Board of Retirement (which administers OCERS) on June 17, 2019 regarding the OCERS Obligation. "OCERS Obligation" means the additional payment required to be paid by the City to OCERS as the result of the Annexation, pursuant to the OCERS 6/17/19 Determination. "Outstanding Bond Obligations"means,collectively,the 2014 SJBA Bonds,the 2014A Refunding Bonds and the 2017 Installment Purchase Agreement. "Party" means, as context requires, either the City or SMWD. "Post-Transfer Liabilities" means all obligations, claims, demands, actions, causes of action, liabilities, losses, costs, damages and expenses (of any nature whatsoever,in law or equity,known or unknown, foreseen or unforeseen, contingent or non-contingent),in any way related to or in any way arising out of or in connection with the Utilities Systems, unless such obligations, claims, demands, actions, causes of action, liabilities, losses, costs, and damages or expenses both: (i) arose during the City's operation of the Utilities Systems prior to the Annexation Effective Date, and (ii) are covered under the City's risk pool insurance. "Prospective Employees" means current City employees of the Utilities Systems who become SMWD employees upon Annexation. "Real Property Inventory Report"means the report regarding real property interests to be prepared pursuant to Section 6.5. "Reorganization Act" means the Cortese-Knox Hertzberg Local Government Reorganization Act of 2000, set forth in California Government Code Section 56000 et seq. "Retained Assets" means all of the assets (to be identified by the City in writing) that are to be retained by the City after the Annexation Effective Date. "Retained Properties"means all of the real property interests (to be identified in the Real Property Inventory Report) that are to be retained by the City after the Annexation Effective Date. "SCWD" means the South Coast Water District. "SCWD Administrative Complaint" means the complaint to the SWRCB'filed by SCWD on August 13, 2015, against the SJBA and the City regarding the City's diversion and use of water pursuant to SWRCB Permit No. 21074 and all related matters, which complaint is pending. "SCWD Water Services Agreement" means the Water Services Agreement, dated as of May 2, 2000,by and between the City and SCWD. "SCWD Water Services Assignment Agreement"means the Assignment Agreement to be entered into by and among the City, SMWD and SCWD, to transfer of the City's rights and obligations under the SCWD Water Services Agreement. A-4 10306-0006\2342077v18.doc "Service Area" means the respective geographical area served by the Water System or the Wastewater System, as applicable, as shown in Exhibit B. "Service Areas" means, together, the Service Area with respect to the Water System and the Service Area with respect to the Wastewater System. "Sewer Fund" means the funds established and held by the City for the Wastewater System (identified as the "Municipal Sewer Enterprise Fund" in the'City's most recent audited financial statements). "SJBA"means the San Juan Basin Authority, a California joint powers authority. "SMWD"means the Santa Margarita Water District. "SMWD Board"means the Board of Directors of SMWD. "SMWD General Manager" means the General Manager (or in the absence of the General Manager, the Deputy General Manager) of SMWD. "SMWD Representatives" means, with respect to a specified purpose, the persons (which may be employees, agents or consultants of SMWD) designated by SMWD General Manager, in writing, as authorized representatives of SMWD. "SMWD Work Plan" means the plan prepared by SMWD with respect to the integration of the Utilities Systems into SMWD's operations. "SOCWA" means the South Orange County Wastewater Authority, a California joint powers authority. "State"means the State of California. "SWRCB"means the California State Water Resources Control Board. "Territory" means the portion of the Service Area with respect to the Water System or the Wastewater System, as applicable, within the City's boundaries. "Territories" means, together, the Territory with respect to the Water System and the Territory with respect to the Wastewater System. "Transferred Properties"means all of the real property interests, as identified in the Real Property Inventory Report,that are proposed to be transferred by the City to SMWD in connection with the Annexation. "Utilities Systems"means,together, the Water System and the Wastewater System. "Water Rights Transfer Agreement" means the agreement (or agreements) to be entered into by the Parties before the Annexation Effective Date to govern the transfer of the City Water Rights. "Water System"means the potable water system and the recycled water system of the City, to be transferred to SMWD. A-5 10306-0006\2342077v18.doc "Water Fund"means the fund established and held by the City for the Water System(identified as the"Water Enterprise Fund" in the City's most recent audited financial statements). "Wastewater System"means the wastewater system of the City, to be transferred to SMWD. A-6 10306-0006\2342077v18:doc EXHIBIT B MAPS SHOWING THE SERVICE AREAS/TERRITORIES OF THE UTILITIES SYSTEMS (see attached) 10306-0006\2342077v18.doc rThe former Schuler-Bathgate WATER SERVICE BOUNDARY r ..z property is served water by `, ;A 9• MNWD. Only part of theI property is in CSJC water I --I City of San Juan Capistrano e - , service area. It receives u_ (5)RV Storage lot .n M no service from CSJC however, served by CSJC it does have a private well on OsoRoad,in CSJC,that serves 1 e,,° Water. Its irrigation needs. I Hq (7)MNWD provides sewer * ►, r 4 � iii service to CSJC,providing --7 N1 water service for 8 homes a °a the Hidden Creek Estates N c�;- 1 area. d'e,- 1, - N 14;%�� ! �°q (8)MNWD provides �� �`` F sewprov d ng r service watto service ` `N ��.,�si'3%( • 6TEq $ for 3 sites in City's North • ,'�t ). '1516 7.; 11 ��_ I+ Open Space. J H/i / 5.i.� �V � Ir c °D��$ I '''. 1I I ' 111 Dp,SE l �� 1i I • r Y f % (9)The City provides Io 1�/ i ' --. h. // water and sewer - ' t $ service to one private % /�LL , ^Oav home. '' < _ a 9e - g '<a (4)County green _ ._.t'o 90 ,Pe° _ ,. + 4< waste facilities :, ° ` ° . `E�a°�° �" l served by CSJC (10)The City provides � ► - o °"� _ , 9, \v (water only). sewer but not water $ ,0`:, t ci F Qo F .� ` o service to two homes )1 � 1 and one lot. �� ' ,,, 4. J'''c� ss \ •Ti, mP ry il ( y SPS +� e -y es,�r+ ;. , `� v� `4cEs+q+E , II (3)County landfill ,4;# offices served by Via=v Y�s, ,r �,,�,+ Qo •%� °w'gO4 q q°+ v� CSJC(water only). .R \ , 1\oi I' e N Icy DEL �,A_X\ '� $' A w..' /��y s re Y x l ) " O !s'�ti,'C� 4 a ,J5-1; d s \5,,,'5 \ �s 41/ 'Ill Pre , . - . i=57'' 4-4,41,-4,,,,„, 7y,,,. ‘.._ - '1.41,e. \ ,../..ii.“ n+wer ,,,A.wrnvAt z I / (; r 'a \ ' I� t r�,�v ' .- ft - �.__/ •/fir .i1,' ) �cti=uo OR CAMINO DEL AVION '9, i ` \ ,PARK AVE I /vj oar i,] yt \ _. _Ir , ,; \ / W SI shill r 11 y,POeP __._ _.. a D �( J' r �,aaos g a�s ati ° c° PQ > ��oi .., , 5 Legend (1)Portion of Dana Paint ' \ CAMINO LAS nNl'0✓' Served by CSJC. 'V \,.....',,,,,,I, f t _ �` `- ice._Water Service Boundary .r, • � i' J� n Sites served outside boundary City Boundary N. (2)Portion in Dana Point in the old CVWD service area, but not served water. There are no City water lines in this area. .�N 0 0.5 1 2 W .\/LA.E Miles NV S Through a POC The City is the sewer service at this location SEWER SERVICE BOUNDARY povider in this area. The City between MNWD operates the sewer collection and CSJC,the City City of San Juan Capistrano system in this area but connects 1houses provides some 150to an MNWD sewer system for with sewer e conveyance to waste water service. treatment plant. "N":7111 MNWD provides Schuler-Bathgate r sewer service to property may be on ` ► o Hidden Creek septic.It is not clear. I . �+t° Estates by `- � Er' agreement. p " L,,,'' MNWD has agreed it \ ?' oa to provide sewer service to Hamilton ` 0-# Oaks Winery,and up ==F' s to 2 restrooms on the CSJC NOS property. I 11; \OR 'r(L�.,./.... s , ap The City provides \ " -,, ,: ' sewer service to I T ', " ( ,i' .t�,O oo�°`�''s4, one private home. _, L. i p°�_ rr V� , 4 - : �<<r A . '\ ;.--, V'-;tit ' \' - = \ ; # - The City has an \ . 1 / i �` (Q° `� l� j I �,�s i k Y agreement with �'s ' � % 41 1 / n_; 9 a MNWD to provide , 6/�,�v�I - r �`- °, �... a +. sewer service to '/ / J a O VM°P /� 1 .7.5‘,1,',1'.1S \ < .- i� fig S.3'.. - A♦ (F four parcels in TPMa\ 11 1 -41 r r ,f- lc 93-129. The laterals I .>3.- �! } `�- r-,.-�. r' '_ ` ' on site will be private. • +o x�„ /'. ' � G�� \gam•,', n •411 i }..1 a 1.. r� � ,ate 4^� - j The City provides i,$.,r7-,^ ,� Iv i l I ,• . 5,Osewer service to F1° j t�...j a fret - •,O `t- N, two homes and e°' ♦ a -�'4� ' E� �i \.%/ m o l``.•v.nr„o ,4" ', 1• one lot. a° c�, : r I `...f Q7 ' \��/��I ,. `^r..o a .; + (er ' ° p.,,, oat , „illy �' / } +': (ri Sewer service i ���� ��� .wo cf S ."- 7 provided by South ' `''. o� �, - I �.• '* ?F'' ///l!,��rr�/ �b ll' 413 \ �, .. Coast Water District. ... -.' s, ' l c 14 f ,,/� �' \`"' \ ....,,, Eile 0, j.ntvr fi ._/\ // \--.\_17 / \ / l�////^,- - 1 l �:n 1" s l CAMINO DEL AVION_. �e j I 1 .. i �i "a. yIJM AVE p�'= ..� f J ----% r, ti�;g , { • `40 ��/ 4 VISTA 4 ------AV .AAEpO - _ • .r Y Li-._F. euro.- - SiOn.hpl i -o�° Portion of the Old CBWD Di- ''EP €i ' ''.= -\-7,-.5`,71,?4"--- (Capistrano Beach Water / IP .`" ,, OLLA ° sc$ District)offices and It-'w A,"O<. °=7", ` i waste water treatment plant. lot \• - .- °g ° CAMINO LAS n aae�'S Legend The area is not in CSJC v sewer service area. There ✓tom' .1 may be sewer provided by `� "-. .----Sewer Service Boundary CSJC;based on aerial n Sites served outside boundary interpretation of apparent office and mobile homes O City Boundary parked in the area and the historic presence of CSJC - sewer lines nearby. N 0 0.5 1 2 w'`��E Miles s