00-0327_METROPOLITION WATER DISTRICT_Agreement No. 29805 (2)1
AGREEMENT NO. 29805
F]
NEW LRP
CAPISTRANO VALLEY NON-DOMESTIC WATER SYSTEM EXPANSION
LOCAL RESOURCES PROGRAM AGREEMENT
BETWEEN
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY,
AND
CAPISTRANO VALLEY WATER DISTRICT
MWD Agreement No. 29805
NEW LRP
CAPISTRANO VALLEY NON-DOMESTIC WATER SYSTEM EXPANSION
LOCAL RESOURCES PROGRAM AGREEMENT
BETWEEN
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY,
AND
CAPISTRANO VALLEY WATER DISTRICT
THIS AGREEMENT is made and entered into as of ;;' 7 , 2000 by and among
The Metropolitan Water District of Southern California (Metropolitan), Municipal Water District
of Orange County (MWDOC), and Capistrano Valley Water District (CVWD). Metropolitan,
MWDOC and CVWD may be collectively referred to as "Parties" and individually as "Parry".
RECITALS
A. Metropolitan was incorporated under the Metropolitan Water District Act (Act) for the
purpose of developing, storing, and distributing water for domestic and municipal
purposes;
B. The Act empowers Metropolitan to acquire water and water rights within or without the
state; develop, store and transport water; provide, sell and deliver water at wholesale for
municipal and domestic uses and purposes; set the rates for water; and acquire, construct,
operate and maintain any and all works, facilities, improvements and property necessary
or convenient to the exercise of the powers granted by the Act;
C. MWDOC, as a member public agency of Metropolitan under the Act, is a wholesale
purchaser within its service area of water developed, stored, and distributed by
Metropolitan;
D. CVWD, as a member public agency of MWDOC, provides domestic water and
nondomestic water services entirely within MWDOC's service area;
E. CVWD is empowered under Section 35406 of the Water Code to enter into contracts
necessary to carry out its powers and purposes;
F. Metropolitan's water supply and demand projections for its service area, including that
encompassed by MWDOC, show that additional sources of supplemental water must be
developed to meet future needs;
G. Metropolitan has determined to take all necessary steps to provide its service area with
adequate and reliable supplies of high quality water in the years ahead in an
environmentally and economically responsible way, including providing financial
incentives to recycled water projects under its Local Resources Program (LRP);
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MWD Agreement No. 29805
Section 3: Ownership and Responsibilities
3.1: CV WD shall be the sole owner of all Project facilities. Metropolitan and MWDOC have
no ownership right, title, security interest or other interest in any Project facilities.
3.2: CVWD shall be solely responsible for all design, environmental compliance, right-of-way
acquisitions, permits, construction, and cost of the Project and all modifications thereof.
3.3: CV WD shall be solely responsible for operating and maintaining the Project, in
accordance with all applicable local, state, and federal laws. Metropolitan and MWDOC
shall have no rights, duties or responsibilities for operation and maintenance of the
Project.
3.4: CV WD shall install, operate and maintain metering devices for the purpose of measuring
the quantity of Allowable Yield delivered to each End User and to measure the Non -
potable Groundwater and Recycled Water supplied to the Project. CV WD shall read the
meters on a monthly basis for the purpose of billing and accounting between Parties.
3.5: CV WD shall, during the term of this Agreement, use its best efforts to operate the Project
facilities to maximize Allowable Yield on a sustained basis.
3.6: MWDOC and CV WD shall assist Metropolitan in its effort to forecast future Project
production.
3.7: CV WD shall notify and provide Metropolitan with a copy of relevant agreements if
CVWD decides to convey water using Project facilities to any parry outside of CVWD's
service area.
Section 4: Allowable Yield Certification
4.1 The first 565 acre-feet per year of Allowable Yield delivered to End Users shall be
conclusively presumed to be attributable to the Existing Project and no payment for such
yield shall be paid by Metropolitan, unless otherwise approved in writing by
Metropolitan.
4.2 CVWD shall separately certify to Metropolitan monthly Allowable Yield deliveries of
both 1) the amount of Non -potable Groundwater and 2) the amount of Recycled Water
delivered to its customers. Such certification shall be in a format approved by
Metropolitan and be accompanied by data and calculations reflecting the method used in
determining the quantity certified. In the absence of certification satisfactory to
Metropolitan, Allowable Yield shall be conclusively presumed to be yield from the
Existing Project and no payment for such yield shall be made by Metropolitan.
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MWD Agreement No. 29805
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Section 5: Billing Process
5.1: CVWD shall provide written notification to Metropolitan of the initiation of Project
operation not less than 30 days prior to initiation of Project operation.
5.2: Prior to initiation of Project operation and for any subsequent purchase of recycled water
for the Project from any other agency with an existing or expired Metropolitan LRP or
Local Projects Program (LPP) agreement, CVWD and MWDOC shall notify and provide
Metropolitan with the accounting methodology identifying the agency to receive payment
from Metropolitan for said water.
5.3: CV WD shall be ineligible to receive any LRP Contribution under this Agreement if any
other agency with an existing Metropolitan LPP or LRP Agreement receives payment
from Metropolitan for recycled water deliveries to CVWD.
5,4: Metropolitan shall pay CVWD, through MWDOC, the LRP Contribution specified in
Exhibit B for Allowable Yield. No payment under this Agreement shall be made by
Metropolitan unless otherwise approved in writing by Metropolitan for : (1) potable
water deliveries to supplement the Recycled Water system; or (2) Allowable Yield from
other projects with expired LRP or LPP agreements.
5.5: CVWD shall invoice Metropolitan monthly for the LRP Contribution based upon the
Allowable Yield billed to the End Users during the previous month. Metropolitan shall
pay CVWD for invoiced LRP Contribution pursuant to Sections 5.4 and 5.7 by means of
a credit included on the next water service invoice issued to MWDOC.
5.6: Upon receiving the Metropolitan billing, MWDOC shall include the full amount of the
LRP Contribution for the Allowable Yield received from Metropolitan as a credit on its
next billing to CV WD.
5.7: Unless otherwise provided for in this Agreement, all invoicing, billing and crediting
processes shall be in accordance with the rules and regulations established from time to
time by Metropolitan as reflected in Metropolitan's Administrative code.
Section 6: Record Keeping and Audit
6.1: CVWD shall establish and maintain accounting records of Non -potable Groundwater and
Recycled Water purchases for the Project, Project production and Allowable Yield. In
addition, CVWD shall collect and retain records of the total annual amount of Recycled
Water conveyed outside of CV WD's service area using Project facilities. Accounting for
the Project shall utilize generally accepted accounting practices and be consistent with the
terms of this Agreement.
6.2: CV WD shall collect and make available to Metropolitan upon request, Recycled Water
purchases for the Project, Project production and Allowable Yield data for each Fiscal
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MWD Agreement No. 29805
Year of Project operation and retain records of measurements taken by meters installed
pursuant to Section 3.4. Such records shall separate and distinguish Project deliveries of
Allowable Yield eligible under this Agreement from non-domestic groundwater
deliveries from the Existing Project and shall also include the source and amount of
Recycled Water purchases for the Project. If an administrative review of previously
submitted Allowable Yield data is determined to be incorrect, an adjustment for over- or
underpayment of Allowable Yield for each applicable Fiscal Year shall be paid by
Metropolitan or CV WD within one year of determination of actual Allowable Yield.
Disputes regarding such administrative review shall be resolved by formal audit.
6.3: Metropolitan shall have the right to audit Recycled Water purchases for the Project, Non -
potable Groundwater and Recycled Water deliveries to End Users, and Allowable Yield
determinations relevant to the terms of this Agreement for a period of three Fiscal Years
following termination of this Agreement. Metropolitan may elect to have such audits
conducted by its staff or by others, including independent accountants or engineers, as
designated by Metropolitan. CV WD shall make available for inspection to Metropolitan
or its designee, upon 30 days advance notice, all records, books and other documents
related to the determination of Allowable Yield. Based on the results of any independent
audit, an adjustment for over- or underpayment of Allowable Yield for each applicable
Fiscal Year shall be paid by Metropolitan or CV WD within one year of determination
after such adjustment.
6.4: CV WD shall keep records of Recycled Water purchases, Project production and
Allowable Yield for at least three years following the termination of this Agreement.
Section 7: Term and Amendments
7.1: The Agreement shall commence on the date first herein written and terminate on June 30,
2026, subject to the performance provisions outlined in Exhibit C. The audit provisions
shall remain in effect until three full Fiscal Years after the termination of the Agreement.
7.2: This Agreement may be amended at any time by the written mutual agreement of the
Parties.
Section 8: Hold Harmless and Liability
CV WD agrees at its sole cost and expense to indemnify, defend, and hold harmless Metropolitan
and MWDOC and their Boards of Directors, officers, agents, and employees from any claims and
any and all liability for injury or death to any person, damage to property or monetary loss
arising out of the approval and subsequent construction, operation, or ownership of the Project
including claims based upon water quality. Such indemnity shall include all loss related to any
claim made, whether or not a court action is filed, and shall include attorney fees, administrative
and overhead costs, engineering and consulting fees and all other costs related to or arising out of
such claim of liability.
In
MWD Agreement No. 29805
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Section 9: Notice
Any notice, payment or instrument required or permitted to be given hereunder shall be deemed
received upon personal delivery or 24 hours after deposit in any United States post office, first
class postage prepaid and addressed to the Party for whom intended, as follows:
If to Metropolitan:
The Metropolitan Water District of Southern California
Post Office Box 54153
Los Angeles, California 90054-0153
Attention: General Manager
If to MWDOC:
Municipal Water District of Orange County
10500 Ellis Avenue
Fountain Valley, California 92708
Attention: General Manager
If to CVWD:
Capistrano Valley Water District
Post Office Box 967
San Juan Capistrano, California 92675
Attention: General Manager
Any Party may change such address by notice given to each of the other Parties as provided in
this section.
Section 10: Successors and Assigns
This Agreement shall inure to the benefit of and be binding upon the successors and assigns of
the Parties hereto. This Agreement and any portion thereof shall not be assigned or transferred to
any entity not an original Party to this Agreement, nor shall any of the duties be delegated,
without the express written consent of all Parties. Any attempt to assign or delegate this
Agreement or any of the obligations or benefits of this Agreement without the express written
consent of all Parties shall be void and of no force or effect.
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MWD Agreement No. 29805
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Section 11: Severability
The partial or total invalidity of one or more sections of this Agreement shall not affect the
validity of this Agreement.
Section 12: Integration
This Agreement comprises the entire integrated understanding between the Parties concerning
the Project, and supersedes all prior negotiations, representations, or agreements.
Section 13: Governing Law
The law governing this Agreement shall be the laws of the state of California and the venue of
any action brought hereunder shall be in Los Angeles County, California.
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MWD Agreement No. 29805
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the
date first hereinabove written.
APPROVED AS TO FORM: THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
N. Gregory Taylor Ronald R. Gastelum
General Counsel General Manager
By: 2hwBy: �� ' 1 1 W�v.- -U--.
Deputy General Co sel Stephen N. Arakawa, Acting Manager
Water Resource Management Group
APPROVED AS TO FORM: MUNICIPAL WATER DISTRICT
OF ORANGE COUNTY
By: By:
eneral Cote el General Manag
APPROVED AS TO FORM:
By:
Gener ounsel
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MWD Agreement No. 29805
CAPISTRANO VALLEY WATER DISTRICT
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0
1'4'11:3 U17.1
0
Capistrano Valley Non -Domestic Water System Expansion Project
Project Description
Overview
The Capistrano Valley Non -Domestic Water System Expansion Project (Project) will deliver
about 2,895 acre-feet per year (AFY) of non-domestic water to existing and fixture customers for
landscape irrigation.
Project Facilities
The Project will involve construction of approximately 18 miles of distribution pipeline, pump
stations, a storage reservoir and ancillary equipment to expand Capistrano Valley Water
District's (CVWD) existing non-domestic water system (see Figure 1).
Source of Project Water
The Project will utilize recycled water from the proposed Southeast Regional Reclamation
Authority Reclamation Plant - Advanced Wastewater Treatment (SRP -AWT) facility and poor
quality groundwater produced by CVWD from existing wells. The SRP -AWT, which would
deliver recycled water to the Project via the proposed South Orange County Reclamation
Authority (SOCRA) pipeline, is not expected to be operational until the year 2005. In the
interim, CVWD would purchase recycled water from Moulton Niguel Municipal Water District
(MNWD) or South Coast Water District (SCWD) via a connection to the recycled water system.
Because both MNWD and SCWD have existing recycled water incentive agreements with
Metropolitan, steps will be taken to ensure that no redundant incentive payments are provided to
either for Project deliveries by CVWD.
Existing Deliveries
CVWD currently serves about 565 AFY of non-domestic water to its customers. This quantity is
ineligible for LRP Contributions under the proposed LRP agreement. The proposed agreement
for the Project will require that CVWD maintain its existing groundwater production for delivery
to non-domestic water customers as a prerequisite to receiving LRP Contributions for Project
production.
Points of Connection
Project facilities begin at CVWD's non-domestic water system connections to CVWD's existing
distribution system, connection to the proposed SOCRA pipeline, and proposed connections to
MNWD's or SCWD recycled water system terminating at the points of connection to CV WD's
non-domestic water customers.
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MWD Agreement No. 29805
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#I
r' "
/ RESERVOIR
P'o
--- cisPh'oiy Nibom
6Hen�stwn
l 1
SMWD
MNWD
HOLLYWOOD
WEU
HONEYMAN —� ,3• • / ~
WELL
j,.
RESERVOIR
LL RESERVOIR
RESERVOIR
CVWD
1,
sRF-AWrPUMP
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Figors 1
CAPISTRANO VALLEY NON-DOMESTIC
WATER SYSTEM EXPANSION
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MWD Agreement No. 29805
EXHIBIT B
LRP CONTRIBUTION SCHEDULE
Ficc-.al Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
MWD Agreement No. 29805
LRP Contribution
($/AF)
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
150
EXHIBIT C
PERFORMANCE PROVISIONS
The following performance provisions apply:
a. Metropolitan will terminate this Agreement if construction of the Project has not
commenced within two years after agreement execution. As opposed to Provision lb
below, there is no established appeal process for this outcome.
b. Metropolitan will terminate this Agreement if Allowable Yield is not delivered within
six years after agreement execution. The Project sponsor(s) may appeal this decision
to Metropolitan's Board of Directors.
c. If the Allowable Yield during the Fiscal Years 2004-05 through 2007-08 does not reach
the target yield of 37% of the Ultimate Yield, then Metropolitan will reduce the Ultimate
Yield by one-half the 37% target shortfall of each respective phase using the highest
Allowable Yield produced in that period. For example, the Ultimate Yield of a project
with the following performance will be revised from 2,000 to 1,950 AFY for Scenario 1
while there would be no adjustment under Scenario 2:
Project Ultimate Yield = 2,000 AFY
37 % of the Ultimate Yield = 0.37 x 2,000 = 740 AFY
Scenario 1: Shortfall = 740 - 640 = 100 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 100) = 1,950 AFY
Scenario 2: Since the Allowable Yield in the Fiscal Year 2006-07 is greater than 740,
no adjustment is required.
d. If the Allowable Yield during the Fiscal Years 2008-09 through 2011-12 does not
reach the target yield of 63% of the Ultimate Yield, then Metropolitan will reduce the
Ultimate Yield (or the Revised Ultimate Yield) by one-half the target shortfall using
the highest Allowable Yield produced in that period. For Example, the Ultimate
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MWD Agreement No. 29805
Scenario 1
Scenario 2
Fiscal Year
Allowable Yield
(AFI')
Allowable Yield
(AFY)
2004-05
400
400
2005-06
640
650
2006-07
450
750
2007-08
500
500
37 % of the Ultimate Yield = 0.37 x 2,000 = 740 AFY
Scenario 1: Shortfall = 740 - 640 = 100 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 100) = 1,950 AFY
Scenario 2: Since the Allowable Yield in the Fiscal Year 2006-07 is greater than 740,
no adjustment is required.
d. If the Allowable Yield during the Fiscal Years 2008-09 through 2011-12 does not
reach the target yield of 63% of the Ultimate Yield, then Metropolitan will reduce the
Ultimate Yield (or the Revised Ultimate Yield) by one-half the target shortfall using
the highest Allowable Yield produced in that period. For Example, the Ultimate
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MWD Agreement No. 29805
Yield of the project in the above example with the following performance will be
reduced from 1,950 to 1,850 AFY for Scenario 1 and from 2,000 to 1,900 AFY under
Scenario 2:
Scenario 1: Ultimate Yield = 1,950 AFY
63% of Ultimate Yield = 0.63 x 1,950 = 1,229 AFY
Shortfall = 1,229 - 1,029 = 200 AFY
Revised Ultimate Yield = 1,950 - (0.5 x 200) = 1,850 AFX
Scenario 2: Ultimate Yield = 2,000 AFY
63% of Ultimate Yield = 0.63 x 2,000 = 1,260 AFY
Shortfall = 1,260 - 1,060 = 200 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 200) = 1,900 AFY
e. If the Allowable Yield during the Fiscal Years 2012-13 through 2015-16 (and every
four-year period thereafter) does not reach the target yield of 75% of the Ultimate
Yield, then Metropolitan will reduce the Ultimate Yield (or the revised Ultimate
Yield) by one-half the target shortfall using the highest Allowable Yield produced in
that period. The adjustment will be made using the same methodology shown in the
above examples.
If the project reaches its Ultimate Yield in any one Fiscal Year, there will be no
adjustment to the Ultimate Yield thereafter.
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MWD Agreement No. 29805
Scenario 1
Scenario 2
Fiscal Year
Allowable Yield
(AFY)
Allowable Yield
(AFY)
2008-09
700
900
2009-10
800
1,000
2010-11
1,029
1,000
_YTF1_2__7
900
1,060
Scenario 1: Ultimate Yield = 1,950 AFY
63% of Ultimate Yield = 0.63 x 1,950 = 1,229 AFY
Shortfall = 1,229 - 1,029 = 200 AFY
Revised Ultimate Yield = 1,950 - (0.5 x 200) = 1,850 AFX
Scenario 2: Ultimate Yield = 2,000 AFY
63% of Ultimate Yield = 0.63 x 2,000 = 1,260 AFY
Shortfall = 1,260 - 1,060 = 200 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 200) = 1,900 AFY
e. If the Allowable Yield during the Fiscal Years 2012-13 through 2015-16 (and every
four-year period thereafter) does not reach the target yield of 75% of the Ultimate
Yield, then Metropolitan will reduce the Ultimate Yield (or the revised Ultimate
Yield) by one-half the target shortfall using the highest Allowable Yield produced in
that period. The adjustment will be made using the same methodology shown in the
above examples.
If the project reaches its Ultimate Yield in any one Fiscal Year, there will be no
adjustment to the Ultimate Yield thereafter.
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MWD Agreement No. 29805
Z
•
FEBRUARY 1, 2000
0
REGULAR MEETING OF THE CAPISTRANO VALLEY WATER DISTRICT
BOARD OF DIRECTORS
CLOSED SESSION (610.85) - None
RECESS UNTIL 7:00 P.M. BUSINESS SESSION
The Regular Meeting of the Board of Directors of the Capistrano Valley Water District was
called to order by Chairman Hart, at 7:28 p.m. in the City Council Chamber.
ROLL CALL: PRESENT: Wyatt Hart, Chairman
David Swerdlin, Vice Chairman
John Greiner, Director
Collene Campbell, Director
/1i.9�►��iL�]'Ta
STAFF PRESENT: George Scarborough, General Manager; Jennifer Murray, Assistant City
Manager; John Shaw, Legal Counsel; Cheryl Johnson, Clerk of the Board; Thomas Tomlinson,
Planning Director; William M. Huber, Engineering and Building Director; Cynthia L. Russell,
Treasurer; Al King, Community Services Director; Amy Amirani, Public Works Director; Lt. Rick
Stahr, Orange County Sheriffs Department; and Bonnie Sanchez, Recording Secretary.
CONSENT CALENDAR
It was moved by Director Swerdlin and seconded by Director Greiner that the Staff
recommendations be accepted for the following items listed on the Consent Calendar. The
motion carried by the following vote:
AYES: Directors Swerdlin, Greiner and Campbell and Chairman Hart
NOES: None
ABSENT: None
APPROVAL OF CAPISTRANO VALLEY WATER DISTRICT MINUTES -
REGULAR MEETING OF JANUARY 4. 2000
The Minutes of the Regular Meeting of January 4, 2000, were approved as submitted.
2. APPROVAL OF THE METROPOLITAN WATER DISTRICT LOCAL
RESOURCES PROGRAM GRANT AGREEMENT FOR THE NON-DOMESTIC
WATER SYSTEM EXPANSION (600.70)
As set forth in the Report dated February 1, 2000, from the Public Works Director, the
Local Resources Program Grant agreement for non-domestic water system expansion
CVVVD Minutes -1- 211100
between the Capistrano Valley Water District, Metropolitan Water District of Southern
California and Municipal Water District of Orange County, was approved.
BOARD ACTIONS - None
ADJOURNMENT
There being no further business before the Board, the meeting was adjourned at 7:29 p.m., to
the next meeting date of Tuesday, February 15, 2000 at 5:30 p.m., in the City Council
Chamber.
Respectfully submitted,
FI: eRr 4w4weR M—
ATTEST:
�a' �
WYATT FSA RT, CHAIRMAN
CVWD Minutes -2- 2/1/00
Capistrano Malley'Water `District
February 4, 2000
Municipal Water District of Orange County
10500 Ellis Avenue
Fountain Valley, California 92708
Re: Local Resources Program Grant Agreement
Gentlemen:
At their meeting of February 1, 2000, the Capistrano Valley Water District Board of
Directors approved the Local Resources Program Grant Agreement with the
Metropolitan Water District of Southern California and the Municipal Water District
of Orange County.
Please feel free to contact Eric Bauman, Associate Engineer, if you have any
questions.
Very truly
yours,
i
Cheryl Jo so
Clerk of the Board
P.O. Box 967, San Juan Capistrano, California 92693 ° Phone 714-493-1515
32450 Paseo Adelanto • San Juan Capistrano, California 92675
FAX 714-493-3955
•
AGENDA ITEM February 1, 2000
TO: George Scarborough, General Manager
FROM: Amy Amirani, Public Works Director
SUBJECT: Consideration of Approval of the Metropolitan Water District Local
Resources Program Grant Agreement for the Non -Domestic Water
System Expansion
RECOMMENDATION
By motion, approve the "Local Resources Program Grant' (LRPG) agreement for
non-domestic water system expansion between Capistrano Valley Water District
(CVWD), Metropolitan Water District of Southern California (MWD), and
Municipal Water District of Orange County (MWDOC).
SITUATION
Drought conditions occur periodically in California. In the drought period of 1987 —
1992 urban water agencies were unable to meet the existing consumption patterns of
their customers. As a result these agencies developed policies for resolving the
imbalance between supply and demand that included:
• Quantity restrictions, limiting the amount of water a household could buy in a given
period, often accompanied by price surcharges for use above the limit.
• Type -of -use restrictions, such as prohibitions on washing off driveways and
sidewalks or irrigating residential lots during the day.
• Public education programs, including bill inserts; television, radio, and newspaper
announcements; school programs; and public displays.
• Device distribution programs, involving low -flow showerheads, toilet dams, and toilet
leak detectors, or rebates for installing ultra -low -flush toilets.
• Price increases, tiered rate structures involving higher prices for all levels of water
use, or increasing block rate structures.
• Supply augmentation strategies, including increased ground water pumping, and
greater use of reclaimed water.
It is interesting to note that:
• The average household uses 350 gallons of water a day
• Americans drink more than 1 billion glasses of tap water every day o v 1 ^' b
FOR CITY COUNCIL AGENar
MWD
METROPDLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
Office of the General Manager
March 27, 2000
Mr. Eric P. Bauman
Associate Engineer
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Dear Mr. Bauman:
Local Resources Program Agreement for Capistrano Valley
Non -Domestic Water System Expansion
Enclosed for your records is a fully executed original of the Local Resources Program
Agreement for the Capistrano Valley Non -Domestic Water System Expansion between the
Metropolitan Water District of Southern California, Municipal Water District of Orange County,
and Capistrano Valley Water District.
If you have any questions concerning the attached agreement, please call Ms. Deneice Cotton at
(213) 217-6616.
Very truly yours,
Andrew Sienkiewich
Section Manager
Water Resource Management Group
DC:cmk
oxlustrI0\n shmd\colics\capvlylua o.doc
Enclosure
700 N. Alameda Street, Los Angeles, California 90012 • Mailing address: Box 54153, Los Angeles, California 90054-0153 • Telephone (213) 217-6000
i
Dawn Schanderl
From:
Dawn Schanderl
Sent:
Tuesday, July 25, 2000 8:57
To:
Kathleen Springer
Subject:
MWD Local
Resources Proc
Has your department received an official copy
Dawn Schanderl
From:
Eric Bauman
Sent:
Friday, July 14, 2000 9:44 AM
To:
Kathleen Springer
Cc:
Dawn Schanderl
Subject:
RE: LRP Grant Agreement
The MWD approved the agreement on 02.08.00. 1 will inquire about getting an official signed copy.
----Original Message -----
From: Kathleen Springer
Sent: Friday, July 14, 2000 9:40 AM
To: Eric Bauman
Subject: FW: LRP Grant Agreement
bEric,
Do you know the status?
-----Original Message -----
From:
Dawn Schanderl
Sent:
Friday, July 14, 2000 9:37 AM
To:
Kathleen Springer
Subject:
LRP Grant Agreement
Good Morning!
The Local Resources Program Grant Agreement was approved by the water board at their
meeting of February 1, 2000. 1 haven't received a signed original. At your convenience would
you please check on the status? Thanks.
0 0
Cheryl Johnson
From: Eric Bauman
Sent: Thursday, March 16, 2000 1:59 PM
To: Cheryl Johnson; Connie Day
Subject: LRP Grant Agreement
The LRP grant agreement has finally been published for signature. The Board voted for approval of the agreement on its
meeting of 02.01.00. (Copy attached.)
How do I now go about getting this signed? Were on a tight time schedule, as we need to sign and return the contract by
03.21.00.
Eric P. Bauman
P 949.487.4312
Act egm brd.doc
J gw-0 -YI,
Cheryl Johnson
From:
Eric Bauman
Sent:
Tuesday, January 25, 2000 2:30 PM
To:
Cheryl Johnson
Subject:
RE: LRPG
Cheryl:
The agreement will be available for signature after 02.08.00 when the Metropolitan Water District
Board, officially approves the offer to CVWD. It will then be passed to MWDOC and CVWD for
signature, and final ratification.
Eric.
-----Original Message -----
From: Cheryl Johnson
Sent: Tuesday, January 25, 2000 2:25 PM
To: Eric Bauman
Subject: LRPG
Eric
The Board will be approving the LRPG agreement on 2/1. Will there be an agreement ready for them to sign after the
meeting or will we be waiting for it to be sent later? Did I ask you this before. (if so please forgive my "old age
forgetfulness!)
Thanks
Cheryl
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2. CONCEPTUAL APPROVAL OF THE METROPOLITAN WATER DISTRICT
LOCAL RESOURCES PROGRAM GRANT AGREEMENT FOR THE NON -
Asset forth in the Report dated September 7, 1999, from the Public Works Director,
the "Local Resources Program Grant" agreement for the non-domestic water
system expansion between the District, the Metropolital Water District of Southern
California and the Municipal Water District of Orange County was approved in
concept, as required by the Metropolital Water District Board before staff time and
resources will be invested in finalizing the agreement and before grant funds are set
aside. Formal approval was tentatively scheduled in February, 2000.
3. ADOPTION OF RESOLUTION ACCEPTING WATER FACILITIES AND
EASEMENT AND AUTHORIZING RELEASE OF CERTIFICATE OF
DEPOSIT, PARCEL MAP 83-861 (FLUIDMASTER. INC.) (420.70)
tj
As set forth in the Report dated September 7, 1999, from the Engineering and
Building Director, the following Resolution was adopted accepting the public water
improvements and easement from Fluidmaster, Inc., and authorizing the Clerk of
the Board to forward the easement and a Notice of Completion to the Orange
County Recorder:
CVWD RESOLTUION NO. 99-9-7-1. ACCEPTING PUBLIC WATER
FACILITIES AND EASEMENT - FLUIDMASTER. INC. - A
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CAPISTRANO VALLEY WATER DISTRICT, ACCEPTING PUBLIC
WATER FACILITIES AND EASEMENT LOCATED AT 30800 AND
30850 RANCHO VIEJO ROAD - PARCEL MAP 83-861
(FLUIDMASTER, INC.)
Staff was authorized to release the $169,000 Certificate of Deposit 35 days after
recording the Notice of Completion.
RETIREMENT SYSTEM) (600.70)
As set forth in the Report dated September 7, 1999, from the Administrative
Services Director, the First Amendment to the Interim Agreement for Supplemental
Benefits between the City, the Water District and the Orange County Employees
Retiement System was approved to extend the term of the agreement to March 31,
2000 in order to allow the Retirement System time to complete its evaluation of the
Additional Retirement Benefit Account.
BOARD ACTIONS - None
CVWD Minutes
-2-
9m99
AGENDA ITEM
TO: George Scarborough, General Manager
FROM: Amy Amirani, Public Works Director
September 7, 1999
SUBJECT: Consideration of Conceptual Approval of the Metropolitan Water
District Local Resources Program Grant Agreement for the Non -
Domestic Water System Expansion
RECOMMENDATION
By motion, approve in concept the "Local Resources Program Grant" (LRPG)
agreement for non domestic water system expansion between Capistrano Valley
Water District (CVWD), Metropolitan Water District of Southern California.
(MWD), and Municipal Water District of Orange County (MWDOC).
SITUATION
Drought conditions occur periodically in California. In the drought period of 1987 —
1992 urban water agencies were unable to meet the existing consumption patterns of
their customers. They developed policies for resolving the imbalance between supply
and demand that included:
• Quantity restrictions, limiting the amount of water a household could buy in a given
period, often accompanied by price surcharges for use above the limit.
• Type -of -use restrictions, such as prohibitions on washing off driveways and
sidewalks or irrigating residential lots during the day.
• Public education programs, including bill inserts; television, radio, and newspaper
announcements; school programs; and public displays.
• Device distribution programs, involving low -flow showerheads, toilet dams, toilet
leak detectors, or rebates for installing ultra -low -flush toilets.
• Price increases, tiered rate structures involving higher prices for all levels of water
use, or increasing block rate structures.
• Supply augmentation strategies, including increased ground water pumping, and
greater use of reclaimed water.
It is interesting to note that:
• The average household uses 350 gallons of water a day
• Americans drink more than 1 billion glasses of tap water every day
FOR CITY COUNCIL AGED V
Z
AGENDA ITEM • • September 7, 1999
MWD Grant Agreement
• Approximately 65% of residential water is used outside the home
• The average % acre lawn use over 3,000 gallons of water a week
• One inch of rainfall over a one acre lot produces over 2,400 gallons of water
• Approximately '/. of America's renewable water supply is withdrawn each year
• Residents can cut indoor water use by more than 30% by practicing simple
conservation techniques
The Capistrano Valley Water District was also affected by the drought and
implemented some of these solutions. In planning for the next drought, District Staff
has sought to develop alternative sources of water that will not run out in another long-
term drought, and would reduce demand on the potable system. Reclaimed water
meets both criteria.
In 1996 District Staff completed d Non -Domestic water (NDW) demand study of
sites which could benefit from NDW, and completed a hydraulic model of the
distribution system necessary to distribute NDW to these sites. However, at that
time there was no mechanism to fund the expansion of the NDW system.
Even so, development of the NDW system did not stop entirely. New
subdivisions within the projected NDW service area have dual distribution
systems. Irrigation systems adjacent to existing or proposed NDW service lines
are being constructed to use reclaimed water when it becomes available.
In October 1998, District Staff used the information compiled for the NDW
demand study to apply for a Metropolitan Water District (MWD) Local Resources
Grant (LRPG). The District received a grant in the amount of $150 per acre-foot
of delivered water, for up to 2850 AF/yr of NDW delivered from 2002 to 2026.
The total value of the grant is $9,591,300 distributed over the life of the grant.
Five other projects in progress or in the planning stages relate to the LRPG
agreement. Specifically the 1) Consideration to hire a Consultant for the Low
Interest Loan Application to the State Revolving Funds Program for the Non -
Domestic System Expansion. 2) The Non -Domestic System Master Plan
(NDWMP). 3) The consideration of Approval of the Non -Domestic System
Expansion Negative Declaration. 4) Consideration of Participation in the
Development of a Reclaimed Water Treatment Plant and Distribution Trunk Line
at the Southeast Regional Reclamation Authority's Advanced Waste Water
Treatment Plant at the J. B. Latham Waste Water Treatment Plant in Dana Point
(a.k.a. the SRP). 5) Consideration of a Non -Domestic Water Mandatory Use
Policy.
The MWD Board has determined that it needs conceptual acceptance from the
Board of the receiving agency before MWD staff invests the time and resources
in finalizing the agreement, and sets aside MWD grant funds for the receiving
-LLRP_RFPWWDAGNTW GNDWCPT_AGMT.DOC
Page 2
AGENDA ITEM • • September 7, 1999
MWD Grant Agreement
agency's LRP project.
The LRPG agreement stipulates the terms under which the District will receive
the grant monies. The terms require that: 1) The District fund and construct the
necessary facilities to distribute NDW. 2) The District obtains a source of NDW.
3) The District administers the NDW distribution program. Failure to comply with
the terms and objectives of the LRPG result only with a reduction in or
termination of the funding offered. Tentative acceptance of the LRPG
agreement does not bind the District in any way. The formal acceptance, in
February 2000, will bind the District to perform the aforementioned actions only
to the extent is seeks funding from the MWD LRPG program.
COMMISSION RECOMMENDATIONS
The LRPG agreement was presented to the WAC at its, August 25th, 1999 meeting.
Their comments will be available at the Board Meeting.
FINANCIAL CONSIDERATIONS
There is no cost impact at this point in time.
ALTERNATE ACTIONS
1. By motion, approve in concept the "Local Resources Program Grant (LRPG)
agreement for non domestic water system expansion between Capistrano
Valley Water District (CVWD), Metropolitan Water District of Southern
California (MWD), and Municipal Water District of Orange County (MWDOC).
2. Request additional information from staff.
-LLRP RFPW WDAGNTIAGNDNACPT AGMT.DOC
Page 3
AGENDA ITEM • •
MWD Grant Agreement
RECOMMENDATION
September 7, 1999
By motion, approve in concept the "Local Resources Program Grant (LRPG)
agreement for non domestic water system expansion between Capistrano Valley
Water District (CVWD), Metropolitan Water District of Southern California
(MWD), and Municipal Water District of Orange County (MWDOC).
Respectfully submitted,
�Yn�-NVLUlA4L
Amy Amirani
Public Works Director
Attachment: MWD LRP Draft Agreement.
-U.RP RFPWIWDAGNTWGNDWCPT AGMT.DOC
Page 4
Pte-+ ed bC/
Eric P. Bauman
Associate Engineer
0
E
NEW LRP
CAPISTRANO VALLEY NON-DOMESTIC WATER SYSTEM EXPANSION
LOCAL RESOURCES PROGRAM AGREEMENT
BETWEEN
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
MUNICIPAL WATER DISTRICT OF ORANGE COUNTY,
AND CAPISTRANO VALLEY WATER DISTRICT
C7
TABLE OF CONTENTS
r-7
Page
Recitals.........................................................................................................................
Exhibits
Exhibit A - Project Description
Exhibit B - LRP Contribution Schedule
Exhibit C - Performance Provisions
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AGMT_01.DOC
H. Metropolitan and MWDOC have determined that it is mutually beneficial for local
water projects originating in MWDOC's service area to be developed as a supplement
to Metropolitan's imported water supplies in order to meet future water needs;
I. A significant amount of treated wastewater generated within MWDOC's service
area is currently discharged to the ocean, which water when provided with tertiary
treatment could be used for special non -potable purposes;
J. Additional quantities of recycled water could be produced, distributed, and sold
by CVWD by means of additional capital facilities to treat, distribute and use additional
wastewater, thereby avoiding disposal thereof as a waste product, and avoiding the use
of an equivalent volume of imported water for municipal purposes;
K. CVWD is currently planning and desires to construct additional capital facilities
collectively known as the Capistrano Valley Non -Domestic System Expansion
(hereinafter described as "Project"), to distribute, for beneficial use, additional recycled
water, which will minimize present and future disposal of wastewater as a waste
product from CVWD, in a manner cost-effective for its customers, thereby reducing the
need for additional water that otherwise must be delivered from Metropolitan's aqueduct
water supply system;
L. Metropolitan, in accordance with its Local Resources Program (hereinafter,
"LRP"), desires to assist CVWD in the cost of distributing recycled water for municipal
purposes;
M. CVWD desires to comply with the provisions of Metropolitan's LRP in return for
Metropolitan's financial assistance for the Project;
N. Metropolitan desires to assist in increasing production and distribution of
recycled water by providing a financial incentive to CVWD, through MWDOC, for
implementation of the Project.
O. MWDOC desires to participate in and affirmatively supports the Project by
transferring to CVWD the financial incentive that it receives from Metropolitan;
P. The Parties believe that treatment and distribution of recycled water by the
Project will benefit the local community within CVWD and the region served by
Metropolitan;
Q. The Project, when fully developed, is estimated as being capable of delivering
2,895 acre-feet per year of recycled water by treating secondary wastewater and
distributing recycled water for landscape irrigation purposes .
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•
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set
forth, the Parties do agree as follows:
Section 1: Definitions
The following words and terms, unless otherwise expressly defined in their context,
shall be defined to mean:
1.1: "Allowable Yield" shall mean the amount of Recycled Water that is delivered to
the End Users by CVWD from the Project in any given Fiscal Year and is eligible to
receive Metropolitan's financial assistance. Allowable Yield, measured in acre-feet,
shall not exceed Ultimate Yield and shall exclude any recycled water Metropolitan
reasonably determines will not reduce MWDOC's or CVWD's demand for Metropolitan's
imported water.
1.2: "End User" shall mean each user that purchases Recycled Water furnished by
this Project.
1.3: "Existing Project" shall mean the CVWD's existing distribution system
1.4: "Fiscal Year" shall mean a Metropolitan Fiscal Year that begins on July 1 and
ends on June 30.
1.5: "LRP Contribution" shall mean the financial contribution in dollars per acre-foot
Metropolitan pays for Allowable Yield to CVWD for monthly billing purposes as outlined
in Exhibit B incorporated herein by this reference. The LRP Contribution shall
commence in Fiscal Year 2001-2002.
1.6: "Project" shall mean the "Capistrano Valley Non -Domestic Water System
Expansion" being designed and developed by CVWD, described in Exhibit A and
incorporated herein by reference, consisting of additional capital facilities including
treatment and distribution facilities capable of producing the Allowable Yield. CVWD
shall notify Metropolitan prior to making any changes to the Project, which require new
environmental documentation other than an addendum to the existing environmental
documentation. After reviewing the proposed change and associated environmental
documentation, Metropolitan shall inform MWDOC and CVWD of Metropolitan's
decision to include or exclude the change to this Agreement.
1.7: "Recycled Water' shall mean treated wastewater that, subject to regulatory
requirements, is suitable for beneficial uses.
1.8: "Ultimate Yield" is originally established as 2,895 acre-feet per Fiscal Year and is
subject to the reduction provisions outlined in Exhibit C, incorporated herein by this
reference.
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Section 2: Warranties
2.1 CVWD, by virtue of its ownership of the Project, warrants that it has a firm and
adequate source of recycled water to operate the Project;
2.2: CVWD warrants that it is able to and has a right to distribute and sell Allowable
Yield produced from the Project.
2.3: MWDOC and CVWD warrant that they do not discriminate against employees or
against any applicant for employment because of ethnic group identification, religion,
age, sex, color, national origin, or physical or mental disability and further warrants that
it requires all contractors and consultants performing work on the Project to comply with
all laws and regulations prohibiting discrimination against employees or against any
applicant for employment because of ethnic group identification, religion, age, sex,
color, national origin, or physical or mental disability.
2.4: CVWD warrants that it has or will comply with the provisions of California
Environmental Quality Act for each and all components of the Project facilities.
Section 3: Ownership and Responsibilities
3.1: CVWD shall be the sole owner of all Project facilities. Metropolitan and MWDOC
have no ownership right, title, security interest or other interest in any Project facilities.
3.2: CVWD shall be solely responsible for all design, environmental compliance,
right-of-way acquisitions, permits, construction, and cost of the Project and all
modifications thereof.
3.3: CVWD shall be solely responsible for operating and maintaining the Project, in
accordance with all applicable local, state, and federal laws. Metropolitan and MWDOC
shall have no rights, duties or responsibilities for operation and maintenance of the
Project.
3.4: CVWD shall install, operate and maintain metering devices for the purpose of
measuring the quantity of Allowable Yield delivered to each End User.
3.5: CVWD shall, during the term of this Agreement, use its best efforts to operate
the Project facilities to maximize Allowable Yield on a sustained basis.
3.6: MWDOC and CVWD shall assist Metropolitan in its effort to forecast future
Project production.
IT CVWD shall notify and provide Metropolitan with a copy of relevant agreements
if CVWD decides to convey water using Project facilities to any party outside of
CVWD's service area.
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AGMT_01.DOC
•
Section 4: Billing Process
4.1: Metropolitan shall pay CVWD, through MWDOC, the LRP Contribution specified
in Exhibit B for Allowable Yield. No payment shall be made by Metropolitan unless
otherwise approved in writing by Metropolitan for: (1) groundwater, surface water or
potable water deliveries to supplement the Recycled Water system; or (2) Allowable
Yield from other projects with active or terminated LRP agreements.
4.2: CVWD shall provide written notification to Metropolitan of the initiation of Project
operation not less than 30 days prior to initiation of Project operation.
4.3: CVWD shall invoice Metropolitan monthly for the LRP Contribution based upon
the Allowable Yield billed to the End Users during the previous month. Metropolitan
shall pay CVWD for invoiced LRP Contribution pursuant to Sections 4.1 and 4.5 by
means of a credit included on the next water service invoice issued to MWDOC.
4.4: Upon receiving the Metropolitan billing, MWDOC shall include the full amount of
the LRP Contribution for the Allowable Yield received from Metropolitan as a credit on
its next billing to CVWD.
4.5: Unless otherwise provided for in this Agreement, all invoicing, billing and
crediting processes shall be in accordance with the rules and regulations established
from time to time by Metropolitan as reflected in Metropolitan's Administrative Code.
Section 5: Record Keeping and Audit.
5.1: CVWD shall establish and maintain accounting records of Project production and
Allowable Yield. In addition, CVWD shall collect and retain records of the total annual
amount of water conveyed outside of CVWD's service area using Project Facilities.
Accounting for the project shall utilize generally accepted accounting practices and be
consistent with the terms of this Agreement.
5.2: CVWD shall collect and make available to Metropolitan upon request project
production and Allowable Yield data for each Fiscal Year of Project operation and retain
records of measurements taken by meters installed pursuant to Section 3.4. If on
administrative review of such data it is concluded that previously submitted Allowable
Yield data is incorrect, an adjustment for over or under payment of Allowable Yield for
each applicable Fiscal Year shall be paid by Metropolitan or CVWD within one year of
determination of actual Allowable Yield. Disputes regarding such administrative review
shall be resolved by formal audit.
5.3: Metropolitan shall have the right to audit Allowable Yield determinations relevant
to the terms of this Agreement for a period of three Fiscal Years following termination of
this Agreement. Metropolitan may elect to have such audits conducted by its staff or by
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0 0
others, including independent accountants or engineers, as designated by Metropolitan.
CVWD shall make available for inspection to Metropolitan or its designee, upon 30 days
advance notice, all records, books and other documents related to the determination of
Allowable Yield. Based on the results of any independent audit, an adjustment for over -
or under -payment of Allowable Yield for each applicable Fiscal Year shall be paid by
Metropolitan or CVWD within one year of determination after such adjustment.
5.4: CVWD shall keep Project production and Allowable Yield records for a minimum
of five (5) years.
Section 6: Term and Amendments
6.1: The Agreement shall commence on the date first herein written and terminate on
June 30, 2026, subject to the performance provisions outlined in Exhibit C. The audit
provisions shall survive termination of the Agreement.
6.2: This Agreement may be amended at any time by the written mutual agreement
of the Parties.
Section 7: Hold Harmless and Liability
CVWD agrees at its sole cost and expense to indemnify, defend, and hold Metropolitan
and MWDOC harmless from any claim and any and all liability, including, but not limited
to, liability due to water quality, which may arise out of CVWD's approval of, and
subsequent construction and operation of, the Project or out of the ownership of the
Project, and will indemnify, defend, and hold harmless Metropolitan and MWDOC and
their Boards of Directors, officers, agents, and employees from any claims for injury or
death to any person, or damage to property due to water quality arising out of the
construction, operation, or ownership of the Project. Such indemnity shall include all
loss related to any claim made, whether or not a court action is filed, and shall include
attorney fees, administrative and overhead costs, engineering and consulting fees and
all other costs related to or arising out of such claim of liability.
Section 8: Notice
Any notice, payment or instrument required or permitted to be given hereunder shall be
deemed received upon personal delivery or 24 hours after deposit in any United States
post office, first class postage prepaid and addressed to the Party for whom intended,
as follows:
If to Metropolitan:
The Metropolitan Water District
of Southern California
Post Office Box 54153
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0
Los Angeles, California 90054-0153
Attention: General Manager
If to MWDOC:
Municipal Water District of Orange County
10500 Ellis Avenue
Fountain Valley, California 92708
Attention: General Manager
If to CVWD:
Capistrano Valley Water District
P.O. Box 967
San Juan Capistrano, California 92675
Attention: General Manager
•
Any Party may change such address by notice given to each of the other parties as
provided in this section.
Section 9: Successors and Assigns
This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Parties hereto. This Agreement and any portion thereof shall not be
assigned or transferred to any entity not an original Party to this Agreement, nor shall
any of the duties be delegated, without the express written consent of all Parties. Any
attempt to assign or delegate this Agreement or any of the obligations or benefits of this
Agreement without the express written consent of all Parties shall be void and of no
force or effect.
Section 10: Severabil
The partial or total invalidity of one or more sections of this Agreement shall not affect
the validity of this Agreement.
Section 11: Integration.
This Agreement comprises the entire integrated understanding between the Parties
concerning the Capistrano Valley Non -Domestic System Expansion, and supersedes all
prior negotiations, representations, or agreements.
Section 12: Governing Law.
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The law governing this Agreement shall be the laws of the state of California and the
venue of any action brought hereunder shall be in Los Angeles County, California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date first hereinabove written.
APPROVED AS TO FORM:
N. Gregory Taylor
General Counsel
M
Deputy General Counsel
APPROVED AS TO FORM:
in
General Counsel
APPROVED AS TO FORM
By:
General Counsel
THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
Ronald R. Gastelum
General Manager
0
Chief of Planning and Resources
MUNICIPAL WATER DISTRICT
OF ORANGE COUNTY
By:
General Manager
CAPISTRANO VALLEY WATER DISTRICT
M
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171
Overview:
EXHIBIT A
PROJECT DESCRIPTION
To be completed by CVWD and MWD staff after conceptual approval.
Project Facilities:
To be completed by CVWD and MWD staff after conceptual approval.
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AGMT_01.DOC
Figure 1 (Project Map) to be inserted here
To be completed by CVWD and MWD staff after conceptual approval.
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0 0
EXHIBIT B
LRP CONTRIBUTION SCHEDULE
LRP Contribution
Fiscal Year$( /AF)
2001-02
150
2002-03
150
2003-04
150
2004-05
150
2005-06
150
2006-07
150
2007-08
150
2008-09
150
2009-10
150
2010-11
150
2011-12
150
2012-13
150
2013-14
150
2014-15
150
2015-16
150
2016-17
150
2017-18
150
2018-19
150
2019-20
150
2020-21
150
2021-22
150
2022-23
150
2023-24
150
2024-25
150
2025-26
150
EXHIBIT C
PERFORMANCE PROVISIONS
The following performance provisions apply:
a. Metropolitan will terminate this Agreement if construction of the Project has
not commenced within two years after agreement execution, As opposed to
Provision 1 b below, there is no established appeal process for this outcome.
b. Metropolitan will terminate this Agreement if Allowable Yield is not delivered
within six years after agreement execution. The Project sponsor(s) may
appeal this decision to Metropolitan's Board of Directors.
c. If the Allowable Yield during the 5`" through 8'h full Fiscal Year period after
agreement execution does not reach the target yield of 37% of the Ultimate
Yield, then Metropolitan will reduce the Ultimate Yield by one-half the 37%
target shortfall of each respective phase using the highest Allowable Yield
produced in that period. For example, the Ultimate Yield of a project with the
following performance will be revised from 2,000 to 1,950 AFY for Scenario 1
while there would be no adjustment under Scenario 2:
Project Ultimate Yield = 2,000 AFY
37% of the Ultimate Yield = 0.37 x 2,000 = 740AFY
Scenario 1: Shortfall =740-640= 100 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 100) = 1,950 AFY
Scenario 2: Since the Allowable Yield in the 7`" year is greater than 740, no
adjustment is required.
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Scenario 1
Scenario 2
Full Fiscal Year
after agreement
execution
Allowable
Yield (AFY)
Allowable
Yield (AFY)
5'"
400
400
6`"
640
650
7`"
450
750
8'"
500
500
37% of the Ultimate Yield = 0.37 x 2,000 = 740AFY
Scenario 1: Shortfall =740-640= 100 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 100) = 1,950 AFY
Scenario 2: Since the Allowable Yield in the 7`" year is greater than 740, no
adjustment is required.
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0 0
If the Allowable Yield during the 91h through 12th full Fiscal Year period after
agreement execution does not reach the target yield of 63% of the Ultimate
Yield, then Metropolitan will reduce the Ultimate Yield (or the Revised
Ultimate Yield) by one-half the target shortfall using the highest Allowable
Yield produced in that period. For Example, the Ultimate Yield of the project
in above example with the following performance will be reduced from 1,950
to 1,850 AFY for Scenario 1 and from 2,000 to 1,900 AFY under Scenario 2:
Scenario 1: Ultimate Yield = 1,950 AFY
63% of Ultimate Yield = 0.63.x 1,950 = 1,229 AFY
Shortfall = 1,229 - 1,029 = 200 AFY
Revised Ultimate Yield = 1,950 - (0.5 x 200) = 1,850 AFY
Scenario 2: Ultimate Yield = 2,000 AFY
63% of Ultimate Yield = 0.63 x 2,000 = 1,260 AFY
Shortfall = 1,260 - 1,060 = 200 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 200) = 1,900 AFY
e. If the Allowable Yield during the 13th through 16th full Fiscal Year period after
agreement execution (and every four-year period thereafter) does not reach
the target yield of 75% of the Ultimate Yield, then Metropolitan will reduce the
Ultimate Yield (or the revised Ultimate Yield) by one-half the target shortfall
using the highest Allowable Yield produced in that period. The adjustment
will be made using the same methodology shown in the above examples.
2. If the project reaches its Ultimate Yield in any one Fiscal Year, there will be no
adjustment to the Ultimate Yield thereafter.
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Scenario 1
Scenario 2
Full Fiscal Year
after agreement
execution
Allowable
Yield (AFY)
Allowable
Yield (AFY)
9th
700
900
10th
800
1,000
11th
1,029
1,000
12th
900
1,060
Scenario 1: Ultimate Yield = 1,950 AFY
63% of Ultimate Yield = 0.63.x 1,950 = 1,229 AFY
Shortfall = 1,229 - 1,029 = 200 AFY
Revised Ultimate Yield = 1,950 - (0.5 x 200) = 1,850 AFY
Scenario 2: Ultimate Yield = 2,000 AFY
63% of Ultimate Yield = 0.63 x 2,000 = 1,260 AFY
Shortfall = 1,260 - 1,060 = 200 AFY
Revised Ultimate Yield = 2,000 - (0.5 x 200) = 1,900 AFY
e. If the Allowable Yield during the 13th through 16th full Fiscal Year period after
agreement execution (and every four-year period thereafter) does not reach
the target yield of 75% of the Ultimate Yield, then Metropolitan will reduce the
Ultimate Yield (or the revised Ultimate Yield) by one-half the target shortfall
using the highest Allowable Yield produced in that period. The adjustment
will be made using the same methodology shown in the above examples.
2. If the project reaches its Ultimate Yield in any one Fiscal Year, there will be no
adjustment to the Ultimate Yield thereafter.
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