00-0327_METROPOLITION WATER DISTRICT_Agreement No. 29805MWD
METROPOLITAN WATER D1S7RlCT OF SOUTHERN CALIFORNIA
Date: March 27, 2000
To: David T. Furukawa, Controller
From: Andrew Sienkiewich, Section Manager, Water Procurement Section
Subject: Agreement for Capistrano Valley Non -Domestic Water System Expansion
Attached for your files is a fully executed original of the Capistrano Valley Non -Domestic Water
System Expansion Local Resources Program (LRP) Agreement between the Metropolitan Water
District of Southern California (Metropolitan), Municipal Water District of Orange County
(MWDOC), and Capistrano Valley Water District (Capistrano Valley).
Under Section 4.1 of the Agreement, Metropolitan will pay Capistrano Valley for production of
Allowable Yield according to the LRP Contribution Schedule tabulated in Exhibit B. Unlike
previous Local Projects Program and Groundwater Recovery Program agreements that are
administered through a "buy -sell" arrangement, Metropolitan will pay Capistrano Valley the
LRP Contribution by means of a credit on Metropolitan's regular water delivery billing to
MWDOC.
If youhave any questions regarding this Agreement, please call Ms. Deneice Cotton at Ext. 6616.
Andrew Sienkiewich
DC:cmk
o:lclustrl olmmsharedlmemoslcapvlycmemo.doc
Attachment
cc w/attachment
A. Sienkiewich
N. Jazmadarian
M. L. Scully
C. K. Kunimoto
D. Cotton
WRM Files
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
MWD Agreement No. 29805
AGREEMENT NO. 20805
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
TABLE OF CONTENTS
Page
Recitals.........................................................................................................................
3
Section
1.
Definitions ................................................
6
2.
Warranties..............................................................................
3.
Ownership and Responsibilities ..................... .................................................
7
4.
Allowable Yield Certification ....................... .....................................................
8
5.
Billing Process ........................................... .......................................................
8
Audit .........................................
6.
Record Keeping and ............. ..:.....................
9
7.
Term and Amendments .................... ...............................................................
9
Harmless and Liability .............................. ...............................................
8.
Hold
10
9.
..................................
Notice..............................................................................
10
10.
Successors and Assigns.....................................................................................
11
11.
Severability ..................................................................................
11
12.
Integration......................................................................................
11
13.
Governing Law...............................................................................
Exhibits
Exhibit A - Project Description
Exhibit B - LRP Contribution Schedule
Exhibit C - Performance Provisions
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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 9�-��, 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 "Party".
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
H. Metropolitan, MWDOC and CVWD have determined that it is mutually beneficial for
local water projects originating in MWDOC's ands V D' ea to be ed
as a supplement to Metropolitan's imported pp n order to meet future war
needs;
1. 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 non -potable purposes;
J. Additional quantities of recycled water could be produced, distributed, and sold by
CVWD by means of additional capital facilities to 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 Water System Expansion
(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,
CVWD is an operating department of the City of San Juan Capistrwo which is a
founding member of the South East -Regional Reclamation Authority (SERRA) created
by Joint Powers Agreement;
M. CVWD is negotiating an agreement with SERRA to receive tertiary treated recycled
Plant —
water from the proposed Southeast Regional Reclamation Authority Re
clamationAdvanced Wastewater Treatment (SRP -AWT) facility, which will be owned and operated
by SERRA, once it becomes operational;
N. CVWD has entered into negotiations to purchase interim recycled water for the Project
from neighboring local agencies which have recycled water incentive agreements with
Metropolitan;
0, CVWD desires to augment its recycled watery deliveries with additional quantities of non -
potable groundwater from existing and future,
P. Metropolitan, in accordance with its LRP, desires to assist MWDOC and CVWD in the
cost of distributing recycled water for municipal purposes;
Q. MWDOC and CVWD desire to comply with the provisions of Metropolitan's LRP in
return for Metropolitan's financial assistance for the Project;
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MWD Agreement No. 29805
R. Metropolitan desires to assist in increasing the distribution and use of recycled water by
providing a financial incentive to CVWD, through MWDOC, for implementation of the
Project,
S. MWDOC desires to participate in and affirmatively supports the Project by transferring to
CVWD the financial incentive that it receives from Metropolitan;
T. The Parties believe that distribution of recycled water and non -potable groundwater by
the Project will benefit the local community within CVWD and the region served by
Metropolitan;
U. The Project, when fully developed, is estimated as being capable of delivering 2,895 acre-
feet per year of recycled water by distributing a blend of tertiary treated wastewater and .
non -potable groundwater for landscape irrigation purposes.
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 amunt of Recycled Water and Non -potable
Groundwater 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 Non -potable Groundwater and Recycled
Water famished by this Project.
1.3: "Existing Project" shall mean the CVWD non-domestic system that currently serves
annual demands of 565 acre-feet from three poor quality wells for landscape irrigation
purposes. The Existing Project is limited by both demands on the distribution system and
inability of wells to meet peak demands.
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 r acre-foot
monthly billing
Metropolitan pays for Allowable Yield to CVWD through MWDOC for
purposes as outlined in Exhibit B incorporated herein by this reference. The LRP
Contribution shall commence in Fiscal Year 2001-2002.
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MWD Agreement No. 29805
1.6: "Non -potable Groundwater" shall mean poor quality groundwater CVWD pumps from
existing and future wells above the 565 acre-foot level of the Existing Project and
represents an increase in the total San Juan Basin extractions.
1.7: "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 distribution facilities capable of producing the
Allowable Yield. CVWD shall notify Mdocumentation other prior to than an add addendum t the
nges to the
Project which require new environmental
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.
1,8: "Recycled Water" shall mean treated wastewater that, subject to regulatory requirements,
is suitable for beneficial uses.
1.9: "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.
Section 2: Warranties
2.1: CVWD warrants that it has a firm and adequate water supply source to operate the
Project.
2.2: MWDOC and CVWD warrant that the Project will increase groundwater e production pursuan
above existing levels in the San Juan Basin and improve watersupply reliability
to CV WD's letter to Metropolitan dated January 4, 2000.
23: CVWD warrants that it is able to and has a right to distribute and sell Allowable Yield
produced from the Project.
2.4: CVWD warrants that it does 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
with all laws and regulations
and consultants performing work on the Project to comply applicant forio
prohibiting discrimination against employees or against any appemployment
because of ethnic group identification, religion, age, sex, color, national origin, or
physical or mental disability.
2.5: 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.
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MWD Agreement No. 29805
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 and to measure the Non -
potable Groundwater and Recycled Water supplied to the Project. CVWD shall read the
meters on a monthly basis for the purpose of billing and accounting between Parties.
3.5: CVWD shall, during the tern of this Agreement, basis.t efforts to operate the Project
facilities to maximize Allowable Yield on a sustained
3.6: MWDOC and.CVWD shall assist Metropolitan in its effort to forecast future Project
production.
3.7: CVWD shall notify and provide Metropolitan with a copy of relevant oag of CVents f
CVWD decides to convey water using Project facilities t any ply de
service area.
Section 4: Allowable Yield Certification
4.1 The first 565 acre-feet per year of Allowable Yield1Vered to End ners shall be
payment for such
conclusively presumed to be attributable to the Existing Project and no
yield shall be paid by Metropolitan, unless otherwise approved in writing by
Metropolitan.
4.2 CVWD shall separately certify to Metropolitan monthly Allowable Yield deliver
Water
ies of
both 1) the amount of Non -potable Groundwater and 2) the amount ofRecycled
delivered to its customers. Such certificationad calculations reflecting the method used in
n
shall be in a format approved by
Metropolitan and be accompanied by data
determining the quantity certified. In the absence of certification satisfactory to
Metropolitan, Allowable Yield shall be conclusively
from the
Existing Project and no payment for such yield shall be made by Met opol
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MWD Agreement No. 29805
Section 5• Billing Process
5.1: CV WD 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: CVWD 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 madey
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 CVWD.
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: CV WD shall establish and maintain accounting records of Non -potable Groundwater and
Recycled Water purchases for the Project, Project production and Allowable Yield. In
addition, CV WD shall collect and retain records of the total annual amount of Recycled
Water conveyed outside of CV WD's service area using Project d be facilities. Accounting
tingwitfor
the Project shall utilize generally accepted accounting practices
terms of this Agreement.
n request,
ecycled
6.2: purchases for thshall e Proect ject, project production and Allowablemake available to Metropolitan oYield data for each Water
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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 CVWD 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. 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 underpayment of Allowable Yield for each applicable
Fiscal Year shall be paid by Metropolitan or CVWD within one year of determination
after such adjustment.
6.4: CVWD 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
CVWD 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, hip o elated to any
the PrOject
including claims based upon water quality. Such indemnity 11 include all
losclaim made, whether or not a court action is filed, and shall
related etoo,aaris ng otut of
ive
and overhead costs, engineering and consulting fees and all other cost
such claim of liability.
0
MWD Agreement No. 29805
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
EXHIBIT A
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 future 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 (CV WD) 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 CV WD 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 CV WD.
Existing Deliveries
CV WD 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 CV WD 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 CV WD's non-domestic water system connections to CV WD'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
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the
date first hereinabove written.
APPROVED AS TO FORM: THEDISTRICT
OF SOUTHERN CALIFORNIA
N. Gregory Taylor Ronald R. Gastelum
General Counsel General Manager
By: n4r=�� By: fy) - --
Deputy General C04sel Stephen N. Arakawa, Acting Manager
Water Resource Management Group
APPROVED AS TO FORM: MUNICIPAL WATER DISTRICT
OF ORANGE COUNTY
APPROVED AS TO FORM:
By:
Genera ACounsel
0:lclustr101mmsharedlcontractlagree\29805.doc
MWD Agreement No. 29805
CAPISTRANO VALLEY WATER DISTRICT
M
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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.
MWD Agreement No. 29805
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CAPISTRANO VALLEY NON-DOMESTIC
WATER SYSTEM EXPANSION
-14-
MWD Agreement No. 29805
CVWD
LRP CONTRIBUTION SCHEDULE
Fiscal 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
1. 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 2007-98 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
(AFY)
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 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 -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.
2. If the project reaches its Ultimate Yield in any one Fiscal Year, there will be no
adjustment to the Ultimate Yield thereafter.
o:lclustr l 0lmmsharedlcontractlagree129805.doc
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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
2011-12
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 -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.
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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MWD Agreement No. 29805