HomeMy WebLinkAboutC-8506-1 - Agreement Regarding Distribution and Sale of Green Acres Project WaterAGREEMENT BETWEEN ORANGE COUNTY WATER DISTRICT AND
CITY OF NEWPORT BEACH REGARDING
DISTRIBUTION AND SALE OF GREEN ACRES PROJECT WATER
THIS AGREEMENT ("Agreement"), is made and entered into as of July 1, 2017, by and
between the ORANGE COUNTY WATER DISTRICT, a special governmental district
(hereinafter "OCWD") and the CITY OF NEWPORT BEACH, a municipal corporation and
charter city (hereinafter "RETAILER").
RECITALS
A. OCWD was created by the OCWD Act, Ch. 924, Stats. 1933, as amended, for the
purpose of protecting and managing the Orange County groundwater basin. The OCWD Act
empowers OCWD to manage the groundwater basin, to provide for the conservation of the
quantity and quality of water in the groundwater basin, to conserve and reclaim water within or
outside of the boundaries of OCWD, to sell or otherwise put to beneficial use any water or
reclaimed wastewater in order to conserve groundwater resources, and to distribute water to
persons in exchange for ceasing or reducing the extraction of groundwater from the groundwater
basin.
B. OCWD purchases imported water from the Metropolitan Water District of
Southern California (hereinafter "MWD"), through its member public agencies, for spreading
and replenishment purposes, and obtains wastewater from the Orange County Sanitation District
(hereinafter "OCSD") for renovation -reclamation, spreading and replenishment purposes, and
groundwater injection.
C. A portion of the reclaimed wastewater currently produced by OCWD is suitable
for a number of non -potable uses, including but not limited to, landscape irrigation and industrial
uses.
D. RETAILER is a municipal corporation and charter city organized and existing
pursuant to the laws of the State of California. RETAILER is the exclusive retail water purveyor,
including water for residential, industrial, commercial, public agency, agricultural and other uses,
within RETAILER's boundaries. RETAILER currently distributes potable water in part
purchased from the MWD and in part produced from groundwater within its boundaries. A
portion of the corporate and water service boundaries of RETAILER is within the jurisdictional
boundaries of OCWD..
E. Landscape irrigation and industrial water users within the jurisdictional and
service boundaries of RETAILER currently either purchase potable or non -potable water from
RETAILER for their use, or produce water from the groundwater basin by means of their own
facilities for their use, which private groundwater production is under the jurisdiction and control
of OCWD.
I of 20
F. In 1991, OCWD began operating a water treatment facility, transmission mains
and distribution pipeline system (including mainlines and service lines) and, in some cases, on-
site plumbing, known as the "Green Acres Project", for the purpose of reclaiming wastewater
received from OCSD (hereinafter, "Project Water") and distributing the Project Water for
appropriate landscape irrigation and industrial purposes in order to supplement and conserve the
supply of potable groundwater available to the residents and water users within the boundaries of
OCWD. OCWD entered into agreements with retail water providers within OCWD's boundaries,
including RETAILER, for the distribution and sale of Project Water within the respective
boundaries of RETAILER and the other retail water agencies contracting with OCWD for
Project Water. OCWD has operated the Green Acres Project continually since 1991; and during
that period, RETAILER has continually purchased Project Water for resale to certain customers
for landscape irrigation and/or industrial uses. OCWD and RETAILER desire to continue use of
the Green Acres Project and its associate Project Water. A plat map depicting the location of the
facilities comprising the Green Acres Project which OCWD currently operates and maintains is
set forth as Exhibit A hereto.
G. OCWD and RETAILER mutually acknowledge that the use of reclaimed water
for landscape irrigation is of mutual benefit to OCWD and RETAILER in fulfilling their joint
responsibilities for the conservation of water resources in accordance with Sections 13550 and
13551 of the California Water Code.
H. OCWD and RETAILER mutually desire to terminate their existing Project Water
agreement and enter into a new agreement to set forth the terms and conditions under which
OCWD will continue to sell Project Water to RETAILER for resale by RETAILER to
appropriate landscape irrigation and industrial water users within the service boundaries of
RETAILER, and under which RETAILER will continue to purchase Project Water from OCWD
for such resale purposes.
AGREEMENTS
NOW, THEREFORE, in consideration of the facts recited above and the terms,
covenants and conditions herein contained, the parties hereto agree as follows:
SECTION ONE: TERMINATION OF PREVIOUS AGREEMENT
1.1 OCWD and RETAILER mutually agree that the written agreement entered into
between OCWD and RETAILER, entitled "AGREEMENT BETWEEN ORANGE COUNTY
WATER DISTRICT & CITY OF NEWPORT BEACH REGARDING DISTRIBUTION AND
SALE OF GREEN ACRES PROJECT WATER" and dated January 16, 1991, relating to the
construction of the Project Facilities and the sale of Project Water by OCWD to RETAILER for
resale to RETAILER's Project Customers, is hereby terminated as of the effective date of this
Agreement and superseded by this Agreement.
2 of 20
SECTION TWO: FACILITIES FOR DELIVERY AND DISTRIBUTION OF PROJECT
WATER
2.1 The parties acknowledge that OCWD has constructed, operates, owns, and
maintains, the Green Acres Project, and all facilities to produce, transport and distribute Project
Water for the herein specified purposes (hereinafter, the "Project Facilities"). A plat map
depicting that portion of the Project Facilities which OCWD constructed, operates and maintains
within the boundaries of RETAILER is attached hereto as Exhibit B.
2.2 The constructed Project Facilities include a distribution pipeline system from the
site of the Green Acres Project Water Treatment Facility, located at 18700 Ward Street, Fountain
Valley, California, to the point of connection to each of the proposed Project Water customers
within the boundaries of RETAILER (hereinafter, "Project Customers"), for the purpose of
distributing Project Water to RETAILER at the points of connection of the Project Customers for
purchase by RETAILER and resale to the Project Customers. The names and anticipated annual
Project Water demands of each existing and currently allowed new Project Customer are set
forth in Exhibit C.
2.3 The parties acknowledge that the Project Facilities are owned by OCWD, and
OCWD shall perform maintenance, emergency response, repair and replacement of the Project
Facilities located within the boundaries of RETAILER. RETAILER may perform, on behalf of
OCWD, maintenance, emergency response, repair and replacement of the Project Facilities
located within the boundaries of RETAILER, pursuant to paragraph 5.1herein below and
arranged in writing prior to any such activity. In this regard:
2.3.1 The parties agree to restore, or cause Project Customer to restore, roads,
streets, alleys, avenues, highways, drainage facilities, or any other public
way or property used for construction, operations, or maintenance of the
Project Facilities within RETAILER's boundaries to at least the same
condition existing prior to construction, operation or maintenance of the
Project Facilities, to the reasonable satisfaction of RETAILER and
OCWD.
2.3.2 The parties agree to provide, or cause Project Customer to provide,
adequate safeguards to afford security to life and property during
construction, operation, and maintenance of the Project Facilities, with due
regard being given to other existing uses of public roads, streets, alleys,
avenues, highways, drainage facilities, public ways and property within
the boundaries of RETAILER.
2.3.3 The parties agree to use, or cause Project Customer to use, its best efforts
to minimize noise, dust, pollution and problems relating to police and fire
protection within the boundaries of RETAILER throughout construction,
operation and maintenance of the Project Facilities within RETAILER's
boundaries.
3 of 20
2.3.4 The parties understand and agree that OCWD's rights to construct,
maintain, operate, inspect, repair and replace the Project Facilities within
the lands and rights-of-way of RETAILER do not constitute vested
property rights and are expressly subject to and governed solely by this
Agreement.
2.4 The parties acknowledge that RETAILER has, at no cost to OCWD, provided
metering devices meeting RETAILER's specifications, and that these metering devices are
owned, operated and maintained by RETAILER for the purpose of measuring the quantity of
Project Water purchased by RETAILER and resold by RETAILER to each Project Customer. In
the event that OCWD and RETAILER determine to expand the Green Acres Project to serve one
or more new Project Customers, RETAILER shall provide a metering device for each new
Project Customer, and shall own, operate and maintain it at no cost to OCWD. RETAILER shall
be responsible for ensuring the accuracy of all metering devices used to measure the quantity of
Project Water delivered to each existing or new Project Customer. Any costs incurred in
modifying the size of existing RETAILER meters shall be the responsibility of RETAILER;
provided, however, that RETAILER has the discretion to delegate that duty to a Project
Customer, so long as RETAILER remains ultimately responsible to OCWD for the accuracy of
the metering device. The quantity of Project Water measured by the meters to be owned,
operated and maintained by RETAILER shall be the sole basis for determining the quantity of
Project Water delivered to Project Customer under Section Three of this Agreement. In the event
that a meter measuring the quantity of Project Water delivered by RETAILER for resale to a
Project Customer indicates a lesser quantity than OCWD's meter measuring the quantity of
Project Water delivered to RETAILER for resale to a Project Customer, OCWD shall be
responsible for the cost of such difference, and RETAILER shall not be liable therefor. In the
event RETAILER has a separate metering device serving exclusively non -potable uses on the
premises of a Project Customer, OCWD may sell Project Water to RETAILER by connecting the
Project Facilities distribution pipeline system directly to the separate non -potable meter so long
as the standards and requirements of RETAILER and any other governmental agency having
jurisdiction over the quality of Project Water are satisfied.
2.5 RETAILER shall implement and maintain measures to avoid the risk that Project
Water may enter into RETAILER's potable water distribution system at no cost to OCWD. The
parties acknowledge that the non -potable Project Water system has been marked with separate
marking in accordance with standards and regulations in existence when the Project Water
system was constructed, and that any extensions of the Project Water system shall be separately
marked as required by law.
2.6 The Project Water distribution pipeline system has been constructed by OCWD
with sufficient capacity to allow RETAILER to serve the landscape irrigation and industrial
water users participating as Project Customers as shown in Exhibit C. OCWD shall sell to
RETAILER, and RETAILER shall purchase from OCWD, sufficient quantities of Project Water
for RETAILER to sell to those Project Customers. OCWD and RETAILER mutually understand
4 of 20
and agree that additional non -potable water users within the boundaries of RETAILER may at
some future time be served with Project Water and become Project Customers without the
necessity of amending this Agreement, provided that a water user within the service boundaries
of RETAILER shall become a new Project Customer only with the approval of both OCWD and
RETAILER; and provided further, that OCWD shall have the sole discretion to determine
whether to expand the Project Facilities or the production and distribution capacity of the Project
Facilities to meet any future demand for Project Water that may be generated within the
boundaries of RETAILER. All future water users within the service boundaries of RETAILER
who become Project Customers shall be subject to the Project Rules as defined in paragraph 6.2
and adopted by RETAILER pursuant to paragraph 6.3 herein below.
2.7 The addition of infrastructure to serve future Project Customers shall be approved
by OCWD, RETAILER, and pertinent regulatory agencies. Additional infrastructure may
include service laterals, mainline pipelines, pump stations, vaults, meters, and other components.
Unless authorized in writing by OCWD, the permitting, design, construction, inspection,
specialty inspection and materials testing, start-up, on-going regulatory compliance, and those
costs described in Paragraph 2.3 shall be performed at no expense to OCWD. The OCWD staff
time for review of the design, construction inspection of the additional infrastructure, and
assistance in regulatory permitting shall be included in the annual Project Water costs set forth in
paragraph 3.2 as components of the Project Water rate charged by OCWD to RETAILER, unless
otherwise stipulated in writing by OCWD. OCWD shall cause the Project Facilities within the
boundaries of RETAILER to be constructed in accordance with the construction standards of
RETAILER. Addition of infrastructure located within public right-of-way and upstream of the
RETAILER meters described in paragraph 2.4 shall become the property of OCWD after written
construction acceptance by OCWD, RETAILER, and any other pertinent agency. Additional
infrastructure within private property shall not be owned by OCWD, unless authorized in writing
by OCWD and pursuant to an easement granted from the land owner to RETAILER and/or
OCWD. Unless authorized in writing by OCWD, new RETAILER meters shall be located in the
public right-of-way. The regulatory permitting and/or approvals of any future Project Customer
site shall be obtained prior to delivery of Project Water to that site. RETAILER shall lead the
effort to obtain these permits and/or approvals and OCWD shall assist and coordinate with the
RETAILER.
2.8 Major expansions to the Project Water distribution system may be performed
under a different ownership -maintenance model than described in Section 2 if mutually approved
and defined in writing by OCWD and RETAILER.
SECTION THREE: PURCHASE AND SALE OF PROJECT WATER
3.1 RETAILER shall have the exclusive right to purchase Project Water from
OCWD, at the point of connection to each Project Customer, and to resell Project Water to the
Project Customers shown in Exhibit C, and such other landscape irrigation and industrial water
5 of 20
users within the boundaries of RETAILER that may be added as Project Customers in
accordance with paragraphs 2.6, 2.7 and 2.8 above.
3.2 RETAILER shall purchase the Project Water from OCWD, at the point of its
metered connections; for an amount equal to OCWD's cost of producing and distributing Project
Water based on the methodology set forth in Exhibit D, as determined by OCWD after
consultation with the Operating Group defined in paragraph 3.3. Capital improvements such as
changes in treatment plant technology and distribution system operation shall be included in
OCWD's costs. OCWD shall annually calculate the Project Water rate, and provide written
notice to RETAILER of the then-effective Project Water rate. Upon request, OCWD shall
provide RETAILER with supporting data used to calculate the Project Water rate. OCWD shall
have discretion to smooth out anticipated increases in debt and capital improvement payments
over several years preceding and following actual OCWD cost incurrence years, in order to
avoid significant and sudden increases to the Project Water rate. When a smoothing method is
applied by OCWD, it will be discussed with the Operating Group, as defined in paragraph 3.3,
and disclosed on the annual revision of Exhibit D. The point of connection and sale of the
Project Water from OCWD to RETAILER shall be at the meter which measures the flow of
Project Water to each Project Customer, as described in paragraph 2.4 herein above. The parties
mutually recognize and agree that the Project Water rate may change each year and become
effective on July 1 of each year during the term of this Agreement.
3.3 Staff representatives of OCWD, RETAILER, and other retail agencies
participating in the Green Acres Project shall form an "Operating Group" to meet at least once
prior to the annual publishing of the revised Exhibit D by OCWD. The Operating Group shall
meet and confer with regard to the proposed Exhibit D contents, future Exhibit D estimates,
planned Green Acres Project capital and repair projects, and review previous Green Acres
Project projects, Project Water performance, and revisions to Exhibit E.
3.4 The governing body of RETAILER shall establish the rate for the resale of
Project Water to each Project Customer in accordance with applicable legal requirements which
may include cost of service.
3.5 RETAILER shall read the Project Water meter for each Project Customer on a
one (1) month cycle or in concurrence with RETAILER's schedule for reading meters which
measure the quantity of potable water delivered by RETAILER. Within fifteen (15) days
thereafter, RETAILER shall transmit to OCWD a statement setting forth the Project Water rate
established by RETAILER pursuant to paragraph 3.4 during that billing period, a description of
the maintenance, repair and replacement activities of RETAILER on Project Facilities, the
amount of such actual costs incurred by RETAILER pursuant to paragraph 5.1 herein below
during that billing period, and indicating, for each Project Customer, the current meter reading,
the previous meter reading, and the total quantity of Project Water purchased from OCWD and
resold by RETAILER to such Project Customer during the billing period. Together with this
statement, RETAILER shall transmit to OCWD payment in accordance with paragraph 3.2 for
the Project Water purchased from OCWD by RETAILER and resold by RETAILER to all of the
6 of 20
Project Customers during the billing period, after deducting therefrom the actual costs incurred
by RETAILER in maintaining, repairing and replacing the Project Water distribution system
within RETAILER's boundaries as set forth in paragraph 5.1 herein below.
SECTION FOUR: PROJECT WATER QUALITY REGULATIONS
4.1 OCWD shall deliver and sell to RETAILER pursuant to this Agreement Project
Water that conforms to all current and future requirements established by the California Regional
Water Quality Control Board — Santa Ana Region, California State Water Resources Control
Board Division of Drinking Water, County of Orange Health Care Agency, and all other federal,
state and local agencies having jurisdiction to fix minimum standards. The anticipated quality of
Project Water is shown on Exhibit E attached hereto and incorporated herein, and this Exhibit E
shall subsequently be revised to conform to any future regulatory requirements; provided
however, that OCWD shall not have obligation to modify the quality of Project Water to meet
the needs of any particular Project Customer. OCWD shall revise Exhibit E if and when OCWD
modifies the tertiary treatment technology, disinfection process, and/or introduces OCSD Plant
#2 effluent to the GAP treatment process, and provide written notice of such revised Exhibit E to
RETAILER. The parties acknowledge that Exhibit E can be revised by OCWD without
amending this Agreement after such revision's discussion at the Operating Group. OCWD shall
strive to meet or exceed the minimum criteria stated in Exhibit E.
4.2 During the term of this Agreement, OCWD shall pay all costs imposed by any
and all governmental agencies having jurisdiction over the quality or use of Project Water for the
issuance of any permits, licenses or approvals required for the production treatment, distribution
or sale of Project Water. If incurred by OCWD, the costs described in this paragraph shall be
included in the annual Project costs set forth in paragraph 3.2 as components of the Project
Water rate charged by OCWD to RETAILER.
4.3 OCWD shall inform RETAILER promptly after becoming aware of any proposed
or actual modifications by any agency having jurisdiction over the quality of Project Water to
any requirements governing the minimum standards of quality for or use of Project Water, or of
any changes in the legally permissible uses which might affect the use of the Project Water sold
by OCWD to RETAILER for resale by RETAILER to Project Customers, and OCWD shall bear
all costs of conforming to any such future requirements. If incurred by OCWD, the costs
described in this paragraph shall be included in the annual Project costs set forth in paragraph 3.2
as components of the Project Water rate charged by OCWD to RETAILER.
4.4 RETAILER shall perform Project Customer inspection and testing in accordance
with the Project Rules defined in paragraph 6.2, prepared by OCWD and transmitted to
RETAILER who may make additions, as amended from time to time by OCWD, and provide a
written record of such activities to OCWD within sixty (60) days of their performance. Expenses
for these activities shall not be reimbursed by OCWD.
7 of 20
SECTION FIVE: OPERATING OBLIGATIONS OF THE PARTIES
5.1 During the term of this Agreement, OCWD shall manage, operate and maintain
the Project Facilities in an efficient manner and in accordance with the highest standards of skill
and workmanship; provided, however, that OCWD may contract with RETAILER for the
performance by RETAILER of the actual maintenance, repair and replacement responsibilities
with respect to those Project Facilities located within the service boundaries of RETAILER.
RETAILER recognizes the special quality considerations relating to Project Water, and
RETAILER shall perform its maintenance, repair and replacement responsibilities in an efficient
manner and in accordance with the highest standards of skill and workmanship. OCWD retains
the right to make repairs to Project Facilities within the service boundaries of RETAILER.
RETAILER shall receive as a credit against all monies due OCWD, pursuant to paragraph 3.2
herein above for the sale of Project Water, the cost of such maintenance, repair and replacement
activities actually undertaken by or on behalf of RETAILER, which costs shall include the actual
labor, material and equipment costs, plus overhead costs incurred by RETAILER and necessary
for such maintenance, repair and replacement activities.
5.2 Notwithstanding the provisions of paragraph 5.1, the operating responsibility of
OCWD with respect to the Project Facilities shall include the maintenance of quality, quantity
and pressure of the Project Water, and compliance with all regulatory requirements and
conditions applicable to the distribution and sale of Project Water, to the point of connection to
each Project Customer.
5.3 RETAILER shall, at no cost to OCWD, assume ownership, service, maintenance
and reading of the Project Water meter and valve set and meter box/vault for each Project
Customer in the same manner that RETAILER would for a customer service meter attached to its
potable water system. RETAILER further shall, at no cost to OCWD, be responsible for
customer service functions relating to all Project Customers, including but not limited to billing
and collection of payments from Project Customers for the Project Water, record keeping, and
notification to OCWD of the quantity of Project Water delivered through each Project
Customer's meter during each meter reading period.
5.4 OC WD shall have the right to review the books, records and accounts maintained
by RETAILER relating to the Project water and Project Customers during normal business
hours, upon forty-eight (48) hours prior written notice to RETAILER.
5.5 OCWD shall operate the Project Facilities in such a manner that Project Water
shall be delivered to the point of connection to each Project Customer on a continuous basis at a
pressure of not less than fifty (50) pounds per square inch. RETAILER shall assist OCWD in
achieving this pressure criterion by staggering Project Customer demand timeframes as needed.
OCWD shall strive to have a pressure greater than one hundred (100) pounds per square inch
entering the Project Facilities from the Water Treatment Facility. If OCWD's analysis of future
Project Customer sites indicates this pressure criteria cannot be met by the existing Project
8 of 20
Facilities, OCWD shall declare by written notice to RETAILER that this standard of service will
not apply to these future Project Customers.
5.6 Except as provided in paragraph 9.6 below, in the event that, at any time during
the term of this Agreement, OCWD for any reason cannot or chooses not to produce Project
Water from its Green Acres Project Water Treatment Facility described in paragraphs 2.1 and 2.2
above, OCWD shall provide through the Project Facilities, or otherwise, at a cost equal to the
cost of Project Water, sufficient water of a quality at least equal to the quality of Project Water to
meet the landscape irrigation and industrial water needs of all of the Project Customers. OCWD,
however, shall have no such obligation in the event that Project Water cannot be delivered to
Project Customers due to damage to, breaks, or other disruptions in the -distribution facilities
transporting Project Water to Project Customers, including maintenance and additions to Project
Facilities.. OCWD shall strive to restore Project Water delivery within 72 hours of disruptions.
With respect to non -emergency maintenance, repair, and construction work, OCWD shall
coordinate such interruptions with RETAILER at least thirty (30) days in advance.
5.7 If the State of California proclaims a drought "State of Emergency" and restricts
the use of potable water supplies, RETAILER will attempt to reduce the use of recycled water
consistent with the RETAILER's conservation standards mandated by the State. Notwithstanding
the RETAILER's existing regulations, RETAILER's governing body shall consider enacting
permanent mandatory water conservation requirements for recycled water use and any additional
restrictions during periods of water supply shortages.
SECTION SIX: PROJECT WATER RULES AND REGULATIONS
6.1 All Project Water produced by OCWD for delivery and sale to RETAILER shall
be in accordance with the terms and conditions of the discharge requirements and primary user
permit for the Project Water issued to OCWD by the California Regional Water Quality Control
Board — Santa Ana Region. OCWD has obtained and shall maintain a blanket primary user
permit for the production, distribution and sale of Project Water, and shall at all times maintain
and comply with all present and future provisions thereof and all renewals or subsequent such
permits.
6.2 The parties acknowledge that OCWD has promulgated, and the parties agree that
OCWD and RETAILER shall enforce rules and regulations regarding the distribution, delivery
and sale of Project Water to RETAILER, and governing the use of Project Water resold by
RETAILER to Project Customers ("Project Rules"). OCWD shall maintain approvals from all
federal, state, and local agencies having jurisdiction over the production, quality and use of
Project Water, including, but not limited to, the California Regional Water Quality Control
Board — Santa Ana Region, California State Water Resources Control Board Division of
Drinking Water, and County of Orange Health Care Agency, that such Project Rules comply
with the regulations, requirements and orders of such regulatory agencies.
9 of 20
6.3 The parties acknowledge that OCWD has heretofore prepared and transmitted to
RETAILER the Project Rules, and that RETAILER has itself adopted the Project Rules and
incorporated them into RETAILER's promulgated rules and regulations governing the
distribution, delivery and sale of water within the service boundaries of RETAILER. Promptly
upon adoption of RETAILER's revised promulgated rules and regulations, RETAILER shall
transmit to OCWD RETAILER's adopted Project Rules. Should OCWD choose either to make
reasonable amendments or modifications to the Project Rules not contrary to this Agreement, or
be required by any governmental agency exercising jurisdiction over the distribution, sale or use
of the Project Water to modify or amend the Project Rules, OCWD shall promptly furnish such
modifications or amendments to RETAILER; and RETAILER, after being provided a ninety
(90) day period in which to review, comment upon, and/or meet and confer with OCWD
regarding such proposed modifications or amendments, shall incorporate such proposed
modifications or amendments into RETAILER's adopted rules and regulations. Project Rules
may be revised by OCWD without amendment to this Agreement. The parties acknowledge that
OCWD and RETAILER have participated in a group of Orange County agencies to standardize
procedures, inspection, testing, and submission requirements for applications seeking approval
from regulatory authorities for new Project Customer sites and the ongoing inspection and
testing of existing sites. The parties further acknowledge that upon the finalization of the Orange
County standardized practices, the Project Rules will be amended to incorporate the standardized
practices, which finalization is expected in 2017. RETAILER shall ensure that each Project
Customer has a copy of the Project Rules and that the Project Customer adheres to the Project
Rules.
6.4 RETAILER shall include in its promulgated rules and regulations provisions
requiring that any current or future Project Customer permit representatives of OCWD and
RETAILER to enter the premises of the Project Customer at all reasonable times for the purpose
of monitoring, inspecting, analyzing and observing the Project Customer's on-site Project Water
facilities and the utilization by the Project Customer of Project Water.
6.5 In connection with RETAILER's adoption of modifications or amendments to the
Project Rules as part of its amended rules and regulations, and at the request of RETAILER,
OCWD shall cooperate with and assist RETAILER in obtaining from the State of California
Water Resources Control Board any necessary certifications, findings or orders authorized under
Sections 13550 and 13551 of the California Code to require the use of Project Water for non-
potable uses within the service boundaries of RETAILER.
6.6 The parties understand and agree that Project Water delivered and sold by OCWD
to RETAILER pursuant to the terms of this Agreement has limited uses, and OCWD shall
deliver and sell to RETAILER Project Water only for those uses and purposes which are legally
permissible under the laws of the State of California and the rules, regulations and directions of
the appropriate federal, state and local regulatory agencies exercising jurisdiction over the
quality and use of Project Water. In this regard, OCWD and RETAILER shall cooperatively
enforce Project Rules limiting the use of Project Water to legally permissible landscape irrigation
10 of 20
and industrial applications, and shall monitor the use of Project Water by Project Customers to
safeguard against any misuse or improper application of Project Water by Project Customers.
SECTION SEVEN: INDEMNITY AND INSURANCE
7.1 OCWD shall hold RETAILER harmless from and against and shall indemnify
RETAILER from any liability, loss, costs, expenses or damages however by reason of any injury
(whether to body, property, or personal or business character or reputation) sustained by or to
any person or property by reason of any act, neglect, default, or omission of OCWD or any of its
agents, employees, or representatives, or caused by reason of the design, construction, operation
or maintenance of the Project Facilities, or the distribution and sale to RETAILER for resale
purposes herein of Project Water that does not meet the quality standards set forth in Title 22 of
the California Administrative Code; provided, however, that OCWD shall not be responsible for
the negligent operation, maintenance or repair of the Project Facilities within RETAILER'S
service boundaries by RETAILER, the negligent operation, maintenance or repair by
RETAILER, any Project Customer of Project Water distribution and storage facilities located on
the lands of any Project Customer, and/or the misuse or misapplication of the Project Water on
the Project Customer's side of the Project Water meter by any person, including RETAILER or
any Project Customer. If RETAILER is sued in any court for damages by reason of any of the
acts for which OCWD is required to indemnify RETAILER in this paragraph 7.1, including but
not by way of limitation, damages arising out of a products liability claim, OCWD shall defend
said action (or cause same to be defended) at its own expense and shall pay and discharge any
and all amounts of judgement that may be rendered in any such action. If OCWD fails or
neglects to so defend in said action, RETAILER may defend the same and any expenses,
including reasonable attorney's fees, which it may pay or incur in defending said action and the
amount of any judgement which it may be required to pay shall be promptly reimbursed upon
demand. Nothing herein is intended to nor shall it relieve RETAILER or any Project Customer
from liability for its own willful acts or active negligence.
7.2 OCWD shall cause RETAILER to be named as an additional insured on OCWD's
general liability policy of insurance with respect to the sale and distribution to RETAILER of
Project Water within the service boundaries of RETAILER, and OCWD shall provide
RETAILER with certificates of insurance and endorsements evidencing such insurance
coverage.
7.3 OCWD shall not commence nor permit any contractor or subcontractor to
commence work or construction of any of the Project Facilities that are located within the service
boundaries of RETAILER until OCWD has obtained, or has caused its contractors to obtain,
comprehensive general liability insurance providing coverage for bodily injury, personal injury
and property damage, and which shall include as additional insureds RETAILER, its City
Council, Board Members, boards and commissions, officers, agents, vendors, and employees, but
only while acting in their capacity as such and only as respects operations of the original named
11 of 20
insured, its subcontractors, agents, officers and employees in the performance of the construction
contract. OCWD shall furnish RETAILER with certificates of insurance and endorsements
showing insurance coverage as described above. RETAILER shall incur no expense in
connection with obtaining and maintaining any insurance required under paragraph 7.2 and 7.3.
SECTION EIGHT: DISPUTES
8.1 In the event of any dispute arising under this Agreement, the parties hereto agree
to utilize the arbitration procedure set forth in this Section Eight as the sole and exclusive means
of resolving any such dispute.
8.2 Arbitration shall be initiated by any party hereto serving upon any other party a
written demand for arbitration, which demand shall describe with specificity the nature of the
dispute. Except as specified herein, the arbitration shall be conducted pursuant to the provisions
of California Code of Civil Procedure, Section 1280, et seq. The parties hereto agree that there
shall be a single neutral arbitrator who shall be a civil engineer knowledgeable in water facilities
operation and reclaimed wastewater, who shall be selected in the following manner:
8.2.1 The demand for arbitration shall include a list of the names of five (5) persons
acceptable to the demanding party for appointment as arbitrator. The responding
party shall determine if any of the names submitted are acceptable, and, if so, shall
inform the other party within ten (10) days of actual receipt of the arbitration
demand, and such person will be designated as arbitrator;
8.2.2 In the event that none of the names submitted by the demanding party is acceptable
to the responding party, or if for any reason the arbitrator selected is unable to serve,
the responding party shall submit to the demanding party a list of the names of five
(5) persons acceptable to the responding party for the appointment as arbitrator. The
demanding party shall in turn have ten (10) days from actual receipt of the list in
which to determine if one such person is acceptable;
8.2.3 If the parties are unable mutually to agree upon a neutral arbitrator as described
above, the matter of the selection of an arbitrator, qualified as above, shall be
submitted to the Orange County Superior Court pursuant to Code of Civil Procedure
Section 1281.6. Upon selection of an arbitrator, the arbitration shall be conducted
consistent with the provisions of Code of Civil Procedure Section 1280, et seq., as
are deemed practicable by the arbitrator, considering the nature of the dispute.
8.3 The costs of arbitration, including but not limited to reasonable attorneys' fees,
shall not be recoverable by the party prevailing in the arbitration, including the court costs and
reasonable attorneys' fees incurred if an arbitration conducted hereunder is appealed to a court
pursuant to the procedures set forth in Code of Civil Procedure Section 1280, et seq. This
provision shall not relieve any party of the duty to indemnify, defend, and hold harmless the
other party under this Agreement.
12 of 20
SECTION NINE: MISCELLANEOUS PROVISIONS
9.1 Notices: All notices, payments, transmittals of documentation and other writings
required or permitted to be delivered or transmitted to any of the parties under this Agreement
shall be personally served or deposited in a United States mail depository, first class postage
prepaid, and addressed as follows:
If to OCWD: Orange County Water District
18700 Ward Street
1914119,3914111
Fountain Valley, California 92728
Attn: General Manager
If to RETAILER: City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92658
Attn: Director of Municipal Operation - Utilities
or such other address or person as OCWD or RETAILER shall direct in writing. Service of any
instrument or writing by mail shall be deemed complete forty-eight (48) hours after deposit in a
United States mail depository.
9.2 Term and Amendment: The term of this Agreement shall be for thirty (30) years
from the date hereof. Either party shall have the right to terminate this Agreement by written
notice to the other at least three (3) years prior to the termination date. The parties must mutually
agree in writing to extend the term of this Agreement. This Agreement may only be amended or
modified by mutual agreement in writing of OCWD and RETAILER.
9.3 Limitation on Sales by OCWD: OCWD acknowledges and agrees that, except as
provided herein or with the prior written consent of RETAILER, OCWD is not now and will not
in the future become a wholesale or retail seller of Project Water within the service boundaries of
RETAILER. without RETAILER's written consent, and OCWD further agrees that it will not use
or contract with any entity other than RETAILER for the purpose of selling and distributing
Project Water within the service boundaries of RETAILER.
9.4 Basin Limitations: OCWD and RETAILER mutually understand and agree that
any and all Project Water delivered and sold by OCWD hereunder shall not constitute either
"supplemental sources" or "groundwater supplies" for the purpose of the annual establishment of
basin groundwater production requirements and limitations by OCWD pursuant to Section 31.5
of the OCWD Act. Project Water is hereby established as a separate class of water for the
purposes of Section 31.5 of the OCWD Act.
9.6 Conditions Subsequent: The performance of this Agreement is conditioned upon
OCWD's continued ability feasibly to produce and distribute Project Water for sale to
13 of 20
RETAILER and resale by RETAILER to Project Customers in a cost-effective manner.
Subsequent to the date of this Agreement, should OCWD determine in its sole discretion that
unanticipated increases in the cost of producing or distributing Project Water or new or modified
regulatory requirements governing the production, distribution, quality or use of Project Water
render the Green Acres Project economically unfeasible, OCWD may cease production and
distribution of Project Water upon ninety (90) days written notice to RETAILER. In the event
that OCWD ceases the production and distribution of Project Water pursuant to this paragraph
9.6, this Agreement shall terminate and OCWD shall incur no liability to RETAILER or any
Project Customer by reason of the termination of this Agreement or the termination of
production and delivery of Project Water.
9.7 No Duplication of Services Intended or Created: OCWD and RETAILER
mutually understand and agree that the construction and operation of the Project Facilities and
the distribution and sale of Project Water by OCWD to RETAILER for sale by RETAILER to
Project Customers pursuant to this Agreement do not constitute either a duplication of
RETAILER's retail water service or a taking of any property of RETAILER within the meaning
of Section 1501, et seq., of the California Public Utilities Code. RETAILER shall have no right
to institute any action against OCWD pursuant to Sections 1503, 1504 or 1505.5 of the Public
Utilities Code by reason of the construction and operation of the Project Facilities and the
distribution and sale of Project Water by OCWD to RETAILER in conformance with this
Agreement.
9.8 Warran : OCWD represents and warrants that under the OCWD Act, OCWD,
without the consent of any other public agency water purveyor, may enter into this Agreement to
deliver and sell Project Water to RETAILER for resale by RETAILER to Project Customers or
lands within the service boundaries of RETAILER.
9.9 Construction: This Agreement shall be construed according to its plain meaning
and as if prepared by all parties hereto. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
9.10 Inte ration: The parties herein have set forth the whole of their agreement, and the
performance of this Agreement constitutes the entire consideration intended herein.
9.11 Successors: This Agreement and all of the provisions herein shall be binding upon
and inure to the benefit of OCWD and RETAILER, and their respective successors and assigns.
14 of 20
WHEREFORE, the parties herein have executed this Agreement as of the date set forth
above.
APPROVED AS TO FORM:
LIM
kreneral Counsel for
Orange County Water District
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
By—
✓�'��`
Aaron C. Harp,
City Attorney
ATTEST:
By 4U-1 Aft
Leilani I. Brown
City Clerk
15 of 20
Orange County Water District
By I &A dlev—
President
By
Gener I Manager
T
ao a3nino
3AVONVa'J n /�'d•- °,y .°f0 /p� .4''-^�
i ��bn
_ nNiavotlW y
m r°
Q0
m a
cl CI
N Q--ls9o1 file O
W
a arc. �'b z m
w <w
1S M31A81tld 2 iu
nn�"aoeatlN
3 V ONtlUN ~
AI d V -3AV VIlN3�Vld
Is anonaI
igw �
Q i
1S minNH00
w
3ntltl11oNovw
O �� Q yyq w /
C w LL d
Ix
_4D
Cd 1S 1S3M N3 09 = 9�
q
Ar ..
,Z
,..,.. ,Msionn•w e.c+,a m�•i,emoa.o iia,,,,,n.,. :, ...� ,,,,.,,�'..
Y!
W
Qv
0
N
0
co
e
o. O GULVER pR O
W V Q
�^bObb^bVH. Ori`.
m r
i
,� bG
,✓ i
pµTHUR BLVJ)£4W
h!
\ O
mr
ol-
� N
e OA188O8UVH y
� m
I
b
-' 3AV VLLN30tlld
I
m IS-_IS�uvrnva
y
N
�
y 3Atl
;
tlIlONOVW F
J
.w
W
Exhibit C: RETAILER'S Current Project Customers and Anticipated Annual Demand
Project Customer
Meter Number
Estimated Annual Usage
acre-feet per ear
Jamboree Median (Bayview)
70211204
0.4
Jamboree Median (University)
60000025
1.4
Jamboree Median Ford
1525477
0.0
Jamboree Median San Joa uinhills)
70211200
1.8
Jamboree Median Santa Barbara
60000036
0.3
Big Canyon Country Club 6" meter)
85001025
68.6
Big Canyon CountKy Club 8" meter
85001029
146.6
Newport Beach Country Club
85001028
185.7
Eastbluff School
85001026
11.7
Eastbluff Park
85001027
32.1
Vista Del Sol Median
60000000
1.6
Bonita Creek Park
80212116
18.7
Our Lady Queen of Angels
70211202
7.9
Bristol Median Birch St.
60000012
1.7
Bristol Median (Bayview Place
60000021
2.1
TIC San Joaquin Apartments
—20
Eastbluff Shopping Center Vista Del Sol Parkway)
60000082
—2
CDM High School Field Pro'
Future —28
Canyon Mesa HOA
Future —18
Bluffs Homeowners VDO-Cajon
Inactive
Bluffs Homeowners VDO-Laredo
Inactive
Bluffs Homeowners DO-Feliz
Inactive
18 of 20
� N �
yCd
o M V
'd 0
cd T N ti
a ° ob rn
U O 'p G O O N
0. 00 O U 00
00
U bq
A ti 40,
59
Q 3-i U U U
a O fJ O
+
U 0 0 0 0 0
y0 W W W W W
y a.aa°.o.
W^ oO ON .-+N
O',nn�rr
o ss ss sA e» E»
+O'�NNNN
d 00 ON OCD .� N
N 7 rD o N N N
�.'•� N G OON
'°
a
� �
o
cl
U-0
�o
o
06
o
+
U 0 0 0 0 0
y0 W W W W W
y a.aa°.o.
W^ oO ON .-+N
O',nn�rr
o ss ss sA e» E»
+O'�NNNN
d 00 ON OCD .� N
N 7 rD o N N N
�.'•� N G OON
Exhibit E: Typical Project Water Quality
Revisions to Exhibit E by OCWD do not require an amendment to this Agreement.
Component
Concentration Range
m /L
Total Dissolved Solids
700- 1,050
.Hardness
170-350
Calcium
45-100
Magnesium
15-35
Potassium
10-25
Sodium
150-250
Bicarbonate
170-250
Chloride
170-320
Sulfate
160-225
Boron
0.3-0.6
Fluoride
0.7-1.4
Silica
15-24
Total Nitrogen
2.4-20
Phosphate Phosphorous
0.06-4
Chemical Oxygen Demand
10-35
Sodium Adsorption Ratio
3 - 7
Exhibit E shall be revised if and when OCWD modifies the tertiary treatment technology,
disinfection process, and/or introduces OCSD Plant #2 effluent to the GAP treatment process.
20 of 20