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04-0113_SAN JUAN BASIN AUTHORITY_Term of the Brine Line and Ocean Outfall AgrTERMINATION OF THE BRINE LINE AND OCEAN OUTFALL AGREEMENT This Agreement is made and entered into as of this 13th day of January, 2004 by and among the SAN JUAN BASIN AUTHORITY, a joint exercise of powers authority organized and existing to Chapter 5, Division 7 (commencing at Section 6500) of the Government Code of the State of California (herein after referred to as "Authority"), the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (hereinafter referred to as "City"). RECITALS: 1. On the 13`h day of August, 1981, the City, the Dana Point Sanitary District (hereinafter referred to as "Dana Point') and the Orange County Waterworks District No. 4 (hereinafter referred to as. "Waterworks District') entered into an agreement which provided that the Dana Point/San Juan Capistrano Ocean Outfall (hereinafter referred to as the "Outfall'), which was owned by the City and the Dana Point, in the following percentages: City 45.25%, Dana Point 54.75%, would be leased to the Waterworks District for fifty-five (55) years with the City receiving 45.25% of each lease payment and Dana Point receiveing 54.75% of each payment. Subsequent to that agreement, Dana Point was merged into the South Coast Water District (hereinafter referred to as "South Coast') and all assets of Dana Point became property of South Coast, thus, South Coast owns 54.75% of the Outfall. 2. On August 18, 1981, the Authority and the Waterworks District entered into the Brine Line and Ocean Outfall Agreement (the "Outfall Agreement'). The Waterworks District became the Capistrano Valley Water District, a subsidiary district of the City and subsequently merged into and became a part of the City. DOCS001017870v3\22027.0000 3. Pursuant to the Outfall Agreement, the Authority entered into the lease of the Outfall for the purpose of connecting its Brine Line to the Outfall to discharge brine water collected at the Authority's Barrier project and/or the wells as defined in the Outfall Agreement into the ocean. 4. The Outfall Agreement provides that the Authority pay to the Waterworks District (now the City) annual payments of $4,000 per year until such time as the Authority uses the Outfall and thereafter said payments shall be made at the rate of $8,000 per year for a period of fifty-five years. 5. For a brief period, the Authority attempted to use the Outfall and commenced paying $8,000 per year pursuant to the Outfall Agreement, however, the Outfall was in such poor condition that the San Diego Regional Water Quality Control Board prohibited the use of the Outfall to discharge brine water. Furthermore, the Authority has not been operating the Barrier project to collect brine to discharge into the Outfall. 6. On October 1, 2003, the members of the Authority which includes the Santa Margarita Water District, the Moulton Niguel Water District, the City and South Coast determined that the Authority is not receiving any value from the lease of the Outfall and they unanimously agreed that the Outfall Agreement should be terminated. NOW, THEREFORE, in consideration of mutual terms, covenants and conditions herein contained the parties do hereby agree as follows: SECTION 1. The Outfall Agreement is terminated as of January 1, 2004. The Authority shall not be required to make any future lease payments or expenses relating to the Outfall and any unpaid expenses and any unpaid lease payments are hereby cancelled. 2 DOCSOC\1017870v3\22027.0000 SECTION 2. The Authority shall not be responsible for the future or past maintenance of the Outfall and the City agrees that the Authority has not incurred any cost or expenses that has or may arise or be caused in any way by the use, operation or failure of the Outfall. SECTION 3. The provisions of this Agreement shall inure to the benefit and be binding upon the parties and their successors and assigns. 3 DOCS00 1017870v3\22027.0000 IN WITNESS HEREOF, the parties hereto execute this Agreement as of the date hereby written above. SAN JUAN BASIN AUTHORITY i By: n c � Presi ent ATTEST: Secretary CITY In ATTEST: R. Monahan, City Clerk Approved as to form: John S aw, City Attorney 4 DOCS00 1017870x3\22027.0000 Soto, Mayor