HomeMy WebLinkAboutC-2853 - Lease of Seawater Intake Pipeline for Water TransmissionAMENDMENT NO. ONE TO
AGREEMENT BETWEEN ORANGE COUNTY WATER DISTRICT
AND CITY OF NEWPORT BEACH REGARDING LEASE OF SEAWATER INTAKE
PIPELINE FOR WATER TRANSMISSION PURPOSES
THIS AMENDMENT NO. ONE TO AGREEMENT ("Amendment No. One") is made
and entered into as of this 13th day of October, 2020 ("Effective Date"), by and between
the CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("City"), and ORANGE COUNTY WATER DISTRICT, a special governmental district
formed and operating under Chapter 924 of the California Statutes of 1933, as amended
("OCWD"), and is made with reference to the following:
RECITALS
A. On January 16, 1991, City and OCWD entered into an Agreement ("Agreement")
for the lease of a certain seawater intake pipeline for water transmission purposes
("Project").
B. The Agreement commenced on September 22, 1997, and runs for 25 years.
C. The parties desire to enter into this Amendment No. One to extend the term of the
Agreement for an additional 25 years, to September 22, 2047, and to update the
compensation under the Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
1.1. Section 3.2 of the Agreement is amended in its entirety and replaced with the
following: "The term of the Pipeline Lease shall commence on the date of the
recordation of the notice of completion of the Pipeline Improvements pursuant to
Paragraph 2.5 above, and shall continue until September 22, 2047 (such term is
hereinafter referred to as the "Pipeline Lease Term"), subject to early termination
by "OCWD" without cause pursuant to Paragraph 3.2.1 below, termination by the
"CITY" pursuant to Paragraph 3.2.2 below, termination by "OCWD" with cause
pursuant to Paragraph 3.2.3 below, or extension of the term in accord with
Paragraph 3.2.4 below."
1.2. Section 3.2.4 of the Agreement is amended in its entirety and replaced with the
following: "Unless the Pipeline Lease is terminated prior to its expiration pursuant
to Paragraph 3.2.1, 3.2.2 or 3.2.3 herein above, the "CITY" shall transmit written
notice to "OCWD" at the commencement of the final year of the Pipeline Lease
Term of the "CITY's" intent to either renegotiate the Pipeline Lease, or to allow the
Pipeline Lease to expire.
1.3. Section 3.2.4.1 of the Agreement is amended in its entirety and replaced with the
following: "In the event that the "CITY" transmits notice pursuant to Paragraph
3.2.4 of its intent to renegotiate the. Pipeline Lease, the parties shall meet and
confer during the final year of the Pipeline Lease Term in a good faith effort to
achieve a new or renegotiated pipeline lease acceptable to both the "CITY" and
"OCWD"; provided, however, that nothing herein shall require the parties to
achieve such a mutually acceptable new or renegotiated Pipeline Lease.
Notwithstanding the foregoing, the parties shall not meet and confer regarding a
new or renegotiated Pipeline Lease in the event that, within sixty (60) days
following its receipt from the "CITY" of the written notice of intent pursuant to
paragraph 3.2.4 herein above, "OCWD" transmits written notice to the "CITY" of
"OWCD's" intent not to renew or renegotiate the Pipeline Lease."
1.4. Section 3.2.4.2 of the Agreement is amended in its entirety and replaced with the
following: "In the event that the "CITY" transmits notice pursuant to Paragraph
3.2.4 of its intent to allow the Pipeline Lease to expire, the Pipeline Lease shall
expire at the end of the Pipeline Lease Term, and the Pipeline, together with the
Pipeline Improvements and any other improvements or additions to the Pipeline,
shall be deemed abandoned by the "CITY" to "OCWD."
1.5. Section 3.2.4.3 of the Agreement is amended in its entirety and replaced with the
following: "The Pipeline Lease shall be deemed to expire at the conclusion of the
Pipeline Lease Term in the event that the "CITY" fails or refuses to transmit any
notice of its intent in accord with Paragraph 3.2.4 herein."
2. COMPENSATION
Section 3.3.1.3 of the Agreement is amended in its entirety and replaced with the
following: "For and during Years Sixteen through the conclusion of the Pipeline Lease
Term, inclusive, the "CITY" shall annually pay to "OCWD" the sum of One Dollar ($1.00)."
3. MISCELLANEOUS
Section 4,1 of the Agreement is amended in its entirety and replaced with the
following: "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
P.O. Box 8300
Fountain Valley, California 92728-8300
Attention: General Manager
Orange County Water District Page 2
If to City:
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
Attention: Utilities Director"
4. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES ON NEXT PAGE]
Orange County Water District
Page 3
IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: 09/7y/ao
By:
ron C. Harp
ity Attorney
ATTEST: I. � ay
Date:
By:
L-ilani I. Brown
City Clerk
(Pb
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
ORANGE COUNTY WATER DISTRICT, a
special governmental district formed and
operating under Chapter 924 of the
California Statutes of 1933, as amended
Date: / -r>
By:
Vicente S rmlento
President of the Board
Date:
By:
Mic►.e kus
G-neral Manager
[END OF SIGNATURES]
\PPROVED AS TO FORM
ay
00:1 for
Orange County Water District
Orange County Water District Page 4
DIRECTORS
PHILIP L. ANTHONY
KATHRYN L. BARR
DENIS R. BILODEAU, P.E.
SHAWN DEWANE
JAN M. FLORY
CATHY GREEN
VINCENT F. SARMIENTO, ESQ.
STEPHEN R. SHELDON
HARRY S. SIDHU, P.E.
ROGER C. YOH, P.E.
July 9, 2014
SINCE 79:2,
ORANGE COUNTY WATER DISTRICT
CJi AR,2C:= C1.2US\ CC'. r3U1s1CiA ..TER V
Mr. George Murdoch
Utilities General Manager
City of Newport Beach Corporation Yard
592 Superior Avenue
Newport Beach, CA 92663
Subject: Agreement for Lease of the Seawater Intake Pipeline for Water
Transmission Purposes
Dear MrMurdoch:
OFFICERS
President
SHAWN DEWANE
First Vice President
CATHY GREEN
Second Vice President
ROGER C. YOH, P.E.
General Manager
MICHAEL R. MARKUS, P.E., D.WRE
Thank you for your letter dated July 1, 2014 clarifying certain issues regarding our
agreement to lease the seawater intake pipeline to the City of Newport Beach.
The District concurs with your letter regarding the commencement date for the lease
agreement being September 22, 1997. This would make the 25-year lease in effect
until 2022.
The District apologizes for any confusion we may have created regarding the proposed
Huntington Beach desalination project report that was released in January 2014 which
discussed this topic.
Sincerely,
Michael R. Markus, P.E., D.WRE, BCEE, F.ASCE
General Manager
PO Box 8300 18700 Ward Street (714) 378-3200
Fountain Valley, CA 92728-8300 Fountain Valley, CA 92708 (714) 378-3373 fax
www.ocwd.com
7
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4
5
6 This Agreement is entered into as of January 16, 1991 , W90 by and
7 between the ORANGE COUNTY WATER DISTRICT, a special governmental
8 district formed and operating under Chapter 924 of the California Statutes of
9 1933, as amended (hereinafter referred to as "OCWD") and the CITY OF
10 NEWPORT BEACH, a municipal corporation (hereinafter referred to as "CITY").
11
12 RECITALS
13
14 A. The "CITY" owns and operates a municipal water distribution system
15 for the delivery of water to lands and customers within its service area (hereinafter,
16 the "City Water System"), which is within the boundaries of "OCWD". The
17 "CITY" has plans for a groundwater development project, comprising the
18 construction of groundwater extraction wells in the vicinity of Mile Square Park in
19 the City of Fountain Valley and the transmission of such extracted groundwater to
20 the City Water System (the construction and operation of such extraction and
21 transmission facilities is hereinafter referred to as the "Project", and the
22 groundwater to be extracted and transported as a result of the Project is hereinafter
23 referred to as "Project Water").
24
25 B. The "CITY", as the operator of the Project, has determined that it
26 must utilize water transmission facilities for conveying Project Water to the
27 "CITY's" existing water facilities in the vicinity of the intersection of 16th Street
28 and Monrovia Avenue in the City of Newport Beach.
29
30 C. "OCWD" owns a water pipeline facility, comprising pipeline
31 measuring thirty (30) inches in diameter, manholes, valves, and all other
32 appurtenances, together with easements, permits, and other rights -of -way for its
33 installation, operation and maintenance, which facilities and rights -of -way extend
34 from the "OCWD" "Water Factory 21" facility in the City of Fountain Valley to the
35 Southern California Edison Company power generating plant adjacent to Pacific
36 Coast Highway in the City of Huntington Beach, as shown on the plat attached
37 hereto as Exhibit "A" and incorporated herein by this reference (the pipeline
38 facilities shown on Exhibit "A" hereto and the subject of this Agreement are
39 hereinafter collectively referred to as the "Pipeline", and such permits, easements,
40 and rights -of -way are hereinafter referred to as the "Pipeline Rights -of -Way").
41
42 D. The Pipeline was originally constructed by "OCWD" for use as a
43 seawater intake facility in connection with a desalination project. "OCWD"
44 does not presently require the use of the Pipeline; but "OCWD" may, in the
45 future, determine in its sole discretion to resume use of the Pipeline in order to
46 carry out one or more of its statutorily authorized functions or purposes.
1 AGREEMENT
2 BETWEEN ORANGE COUNTY WATER DISTRICT &
3 CITY OF NEWPORT BEACH REGARDING LEASE OF SEAWATER INTAKE
PIPELINE FOR WATER TRANSMISSION PURPOSES
t
1
2 E. The "CITY" has determined that, by reason of its alignment and
3 location, the Pipeline could be utilized by the "CITY" as a transmission
4 pipeline for Project Water.
5
6 F. While the "CITY" and "OCWD" acknowledge that the Pipeline is
7 currently unsuitable for conveying Project Water due to leakage problems, the
8 "CITY" has conducted an investigation and determined that the Pipeline could
9 be improved to permit its use for the transmission of Project Water, and that
10 the use of the Pipeline in the Project is feasible.
11
12 G. "OCWD" has determined that the construction and operation of
13 the Project would be consistent with "OCWD's" management of the
14 groundwater basin underlying its boundaries.
15
16 H. Pursuant to Section 2 (4) of the Orange County Water District
17 Act, Chapter 924 of the Statutes of 1933, as amended (hereinafter, the "OCWD
18 Act"), "OCWD" has the authority to lease, convey or dispose of real and
19 personal property of every kind, necessary or convenient to the full exercise
20 of its powers.
21
22 I. In order to assist the "CITY" in conveying Project Water to the City
23 Water System, "OCWD" and "CITY" desire to enter into this Agreement for the
24 lease of the Pipeline to the "CITY".
25
26
27
28 EXECUTORY AGREEMENTS
29
30
31 NOW, THEREFORE, in consideration of the facts recited above and the
32 covenants, conditions and promises contained herein, the parties hereto hereby
33 agree as follows:
34
35 SECTION ONE: DESIGN OF PIPELINE IMPROVEMENTS
36
37 1.1 Within sixty (60) days following the date of this Agreement, the
38 "CITY" shall inspect the Pipeline and transmit written notice to "OCWD" of any
39 damage to or defect in the Pipeline, or any other objection that the "CITY" may
40 have to its lease and use of the Pipeline.
41
42 1.1.1 In the event that the "CITY" timely transmits written notice to
43 "OCWD" of any damage or objection to, or defect in, the Pipeline, this
44 Agreement shall be deemed to have terminated as of the date of such
45 written notice, and the "CITY" shall not acquire any leasehold interest
46 in the Pipeline.
47
2
1 1.1.2 In the event that the "CITY" fails or refuses to transmit written
2 notice of any damage or objection to, or defect in, the Pipeline to "OCWD"
3 within sixty (60) days of the date of this Agreement, it shall be conclusively
4 presumed as between the "CITY" and "OCWD" that the "CITY" has fully
5 inspected the pipeline and determined that the Pipeline is in sufficiently
6 good condition to render feasible the construction by the "CITY" of
7 improvements to, and the lease and use of, the Pipeline.
8
9 1.2 In the event that this Agreement is not terminated pursuant to
10 Paragraph 1.1.1 above, the "CITY" shall prepare or cause to be prepared the
11 design and plans and specifications for improvements to the Pipeline (such
12 design, plans and specifications are hereinafter collectively referred to as the
13 "Pipeline Improvement Design"). The "CITY" shall be solely responsible for all
14 costs and expenses incurred in connection with the Pipeline Improvement
15 Design, and "OCWD" shall have no responsibility for any such costs and
16 expenses.
17
18 1.3 To the extent available and accessible, "OCWD" shall provide the
19 "CITY" with any and all plans, reports, maps, records and other information
20 reasonably requested by the "CITY" in connection with the "CITY's" preparation
21 of the Pipeline Improvement Design.
22
23 1.4 Upon its completion, the "CITY" shall transmit copies of the
24 Pipeline Improvement Design to "OCWD" for its review and approval, which
25 approval shall not be unreasonably withheld so long as "OCWD" determines, in
26 its sole discretion, that construction of the Pipeline Improvements in accord
27 with the Pipeline Improvement Design will not either adversely affect the
28 structural integrity or safety of the Pipeline, or restrict or impair in any way
29 "OCWD's" future use of the Pipeline for water transmission purposes.
30
31 1.4.1 In the event that "OCWD" determines not to approve the Pipeline
32 Improvement Design, "OCWD" shall provide written notice of such
33 disapproval to the "CITY" within thirty (30) days of the date on which the
34 "CITY" delivers the Pipeline Improvement Design to the "OCWD".
35
36 1.4.2 In the event that "OCWD" disapproves of the Pipeline
37 Improvement Design pursuant to Paragraph 1.4.1 herein above, "OCWD"
38 and the "CITY" shall meet and confer in a good faith effort to modify the
39 Pipeline Improvement Design to resolve the concerns of "OCWD".
40
41 1.4.3 "OCWD" shall be deemed to have approved the Pipeline
42 Improvement Design if "OCWD" fails to provide written notice to the
43 "CITY" of "OCWD's" disapproval pursuant to paragraph 1.4.1 herein
44 above within thirty (30) days of the date on which the "CITY" delivers the
45 Pipeline Improvement Design to "OCWD".
46
47
3
1
2
3 1.5 Upon their approval pursuant to Paragraph 1.4 above, the "CITY"
4 shall transmit one (1) complete copy of the approved Pipeline Improvement
5 Design to "OCWD".
6
7
8 SECTION TWO: CONSTRUCTION OF THE PIPELINE IMPROVEMENTS
9
10 2.1 Within a reasonable period of time following approval pursuant to
11 Paragraph 1.4 above of the Pipeline Improvements Design, the "CITY" shall
12 construct and install the Pipeline Improvements, or cause the Project
13 Improvements to be constructed and installed.
14
15 2.2 The "CITY" shall be the lead agency and the contracting party for
16 the construction and installation of the Pipeline Improvements.
17
18 2.2.1 The "CITY" shall be solely responsible for complying with all
19 requirements of the California Environmental Quality Act, Public Resources
20 Code Section 21000, et seq.("CEQA"), and for obtaining all required permits,
21 approvals, licenses and authorizations (excluding the Pipeline Rights -Of -Way
22 referenced in Paragraph 2.3 below), in connection with the construction and
23 installation of the Pipeline Improvements, and the operation, maintenance
24 and repair of the Pipeline in connection with the "CITY's" implementation
25 of the Project. Except as set forth in Paragraph 2.3 below, "OCWD" shall not
26 be responsible for any CEQA compliance or the obtaining of any permits,
27 approvals, licenses or authorizations in connection with the construction,
28 installation, operation, maintenance or repair of the Pipeline, or any costs
29 associated with the foregoing.
30
31 2.2.2 The "CITY" shall be solely responsible for all costs and expenses
32 incurred in the construction and installation of the Pipeline
33 Improvements, and the awarding and letting of all contracts and
34 agreements, including change orders, for the construction and installation
35 of the Pipeline Improvements; and "OCWD" shall not be responsible for
36 any such costs or expenses.
37
38 2.2.3 In accord with California Attorney General Opinion No. 86-803,
39 "OCWD" and the "CITY" acknowledge that the Pipeline Improvements to
40 be constructed by the "CITY" constitute a public works project within the
41 meaning of California Labor Code Section 1720, et seq. In connection with
42 its construction of the Pipeline Improvements, the "CITY" shall comply
43 with the requirements regarding payment of prevailing wages, and all of
44 the other requirements governing public works construction projects, set
45 forth in Section 1720, et seq.,1773.5, 1775, 1776, 1777.5 and 1810 of the
46 California Labor Code.
47
4
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1 2.2.4 The "CITY" shall require each contractor involved in the
2 construction or installation of the Pipeline improvements to provide
3 general liability insurance coverage with minimum limits of One
4 Milion Dollars ($1,000,000) combined single. limit and an annual
5 aggregate of One Million Dollars ($1,000,000), naming "OCWD" and
6 the "CITY", together with their respective officers, directors, council
7 members, employees and representatives as additional insureds on
8 each such policy. The "CITY" shall also require each such contractor
9 both to furnish workers' compensation insurance. All of the
10 foregoing insurance shall be approved by "OCWD" as to form,
11 amount and carrier.
12
13 2.2.5 The "CITY" shall require the prime contractor involved in the
14 construction and installation of the Pipeline Improvements to furnish a
15 faithful performance bond and a labor and materials bond, each in an
16 amount not less than one hundred percent (100%) of the total bid price
17 for the construction of the Pipeline Improvements and in favor of both
18 "OCWD" and the "CITY". Each such bond shall be on a form, and
19 secured from a surety company, acceptable to "OCWD".
20
21 2.2.6 The "CITY" shall use its best efforts both to cause the Pipeline
22 Improvements to be constructed and installed in strict conformance with
23 the approved. Pipeline Improvement Design, and to cause the completion
24 of the construction and installation of the Pipeline Improvements on or
25 before December 1,1992.
26
27 2.3 To the extent that "OCWD" has the authority to do so, "OCWD"
28 authorizes the "CITY" to exercise all rights and privileges granted to "OCWD"
29 under the Pipeline Rights -Of -Way in connection with the"CITY's"
30 implementation of the Project.
31
32 2.3.1 The parties mutually acknowledge that "OCWD" makes no
33 representation or warranty, express or implied, regarding the quality
34 of "OCWD's" title to the Pipeline Rights -Of -Way, or the extent to
35 which the Pipeline Rights -Of -Way authorize the use of the Pipeline in
36 connection with the "CITY's" Project. The "CITY" understands and
37 agrees that the "CITY" is solely responsible for determining the
38 sufficiency of title to the Pipeline Rights -of -Way for use in connection
39 with the Project, and that the "CITY" bears all risk regarding any
40 defects of or restrictions on title relating to the Pipeline Rights -Of -Way
41 for use in connection with the Project.
42
43 2.3.2 At all times during the construction and installation of the
44 Pipeline Improvements, "OCWD", its officers, officials, employees, agents
45 and representatives shall be permitted access to the site to observe the
46 progress of the construction and installation.
47
5
1 2.4 The parties understand and agree that the Pipeline shall be
2 connected to the City Water System, at locations as shown on the approved
3 Pipeline Improvement Design, in order that Project Water may be transported
4 through the Pipeline and delivered to the City Water System for delivery to
5 customers of the "CITY". "OCWD" hereby grants the "CITY" the right to
6 connect the City Water System to the Pipeline at the locations shown in the
7 approved Pipeline Improvement Design for the term of this Agreement.
8
9 2.5 Upon completion of construction of the Pipeline Improvements in
10 conformance with the approved Pipeline Improvement Design, the "CITY"
11 shall accept the completion of such construction and cause to be filed and
12 recorded a notice of completion with respect thereto. Upon the acceptance of
13 completion of construction of the Pipeline Improvements, the "CITY" shall
14 transmit to "OCWD" a copy of such notice of completion, together, with one (1)
15 set of mylar copies of "as -built" drawings.
16
17 2.6 The parties understand and agree that, upon the recordation of the
18 notice of completion of the Pipeline Improvement pursuant to Paragraph 2.5
19 above, the Pipeline Improvements shall become and remain the property
20 exclusively of "OCWD".
21
22 SECTION THREE OCWD LEASE OF PIPELINE TO THE CITY
23
24 3.1 "OCWD" hereby leases the Pipeline as shown on Exhibit "A" hereto
25 to the "CITY" for the "CITY's" use in connection with the Project, for the term
26 and in accord with the terms and conditions set forth herein (hereinafter, the
27 "Pipeline Lease").
28
29 3.2 The term of the Pipeline Lease shall commence on the date of the
30 recordation of the notice of completion of the Pipeline Improvements pursuant
31 to Paragraph 2.5 above, and shall continue for period of twenty-five (25)
32 consecutive years from and after the date of the recordation of such notice of
33 completion (such term is hereinafter referred to as the "Pipeline Lease Term"),
34 subject to early termination by "OCWD" without cause pursuant to Paragraph
35 3.2.1 below, termination by the "CITY" pursuant to Paragraph 3.2.2 below,
36 termination by "OCWD" with cause pursuant to Paragraph 3.2.3 below, or
37 extension of the term in accord with Paragraph 3.2.4 below.
38
39 3.2.1 Notwithstanding any other provision of this Agreement, "OCWD"
40 shall have the right, in its sole and absolute discretion, for any reason, with
41 or without cause, to terminate the Pipeline Lease prior to its expiration,
42 upon giving four (4) years written notice of termination to the "CITY".
43
44 3.2.2 Notwithstanding any other provision of this Agreement, the "CITY"
45 shall have the right, in its sole and absolute discretion, for any reason, with
46 or without cause, to terminate the Pipeline Lease prior to its expiration,
47 upon giving thirty (30) days written notice of termination to "OCWD".
48
6
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1 3.2.3 Notwithstanding any other provision of this Agreement, "OCWD"
2 shall have the right, in its sole discretion, to terminate the Pipeline Lease
3 thirty (30) days following written notice to the "CITY" of the breach by the
4 "CITY" of any provision of this Agreement; provided, however, that "OCWD"
5 shall not terminate the Pipeline Lease if, within such thirty (30) day period,
6 the "CITY" either cures and corrects the breach of which "OCWD" complains
7 in its written notice or, in the event that the breach cannot be cured within
8 such thirty (30) day period, the "CITY" provides written assurances to
9 "OCWD", acceptable to "OCWD", that the "CITY" has commenced
10 appropriate activities to cure and correct such breach of the Agreement.
11
12 3.2.4 Unless the Pipeline Lease is terminated prior to its expiration
13 pursuant to Paragraph 3.2.1, 3.2.2 or 3.2.3. herein above, the "CITY" shall
14 transmit written notice to "OCWD" at the commencement of Year Twenty-
15 Four of the pipeline Lease Term (i.e., the twenty-fourth year following the
16 commencement of the Pipeline Lease Term) of the "CITY's" intent either
17 to renegotiate the Pipeline Lease, or to allow the Pipeline Lease to expire.
18
19 3.2.4.1 In the event that the "CITY" transmits notice pursuant to
20 Paragraph 3.2.4 of its intent to renegotiate the Pipeline Lease, the parties
21 shall meet and confer during Year Twenty -Four of the Pipeline Lease
22 Term in a good faith effort to achieve a new or renegotiated Pipeline
23 Lease acceptable to both the "CITY" and OCWD; provided, however,
24 that nothing herein shall require the parties to achieve such a mutually
25 acceptable new or renegotiated Pipeline Lease. Notwithstanding the
26 foregoing, the parties shall not meet and confer regarding a new or
27 renegotiated Pipeline Lease in the event that, within sixty (60) days
28 following its receipt from the "CITY" of the written notice of intent
29 pursuant to paragraph 3.2.4 herein above, "OCWD" transmits written
30 notice to the "CITY" of "OCWD's" intent not to renew or renegotiate
31 the Pipeline Lease.
32
33 3.2.4.2 In the event that the "CITY" transmits notice pursuant to
34 Paragraph 3.2.4 of its intent to allow the Pipeline Lease to expire, the
35 Pipeline Lease shall expire at the end of Year Twenty -Five of the
36 Pipeline Lease Term; and the Pipeline, together with the Pipeline
37 Improvements and any other improvements or additions to the
38 Pipeline, shall be deemed abandoned by the "CITY" to "OCWD".
39
40 3.2.4.3 The Pipeline Lease shall be deemed to expire at the
41 conclusion of Year Twenty -Five of the Pipeline Lease Term in the
42 event that the "CITY" fails or refuses to transmit any notice of its
43 intent in accord with Paragraph 3.2.4 herein.
44
45 3.3 In part consideration of the Pipeline Lease, the "CITY" shall pay
46 rental to "OCWD" in accord with the provisions of this Paragraph 3.3:
47
7
1 3.3.1 For and during the Pipeline Lease Term, unless the Pipeline Lease
2 is terminated in accord with Paragraph 3.2.1, 3.2.2 or 3.2.3 prior to its
3 expiration, the "CITY" shall pay the following amounts each year as
4 rental for the lease of the Pipeline.
5
6 3.3.1.1 For and during Year One of the Pipeline Lease Term, the
7 "CITY" shall not be required to pay any amount to "OCWD" as rental
8 for the Pipeline.
9
10 3.3.1.2 For and during Years Two through Fifteen, inclusive, of the
11 Pipeline Lease Term, the "CITY" shall annually pay to "OCWD" the
12 sum of One Hundred Thousand Dollars ($100,000).
13
14 3.3.1.3 For and during Years Sixteen through Twenty -Five,
15 inclusive, of the Pipeline Lease Term, the "CITY" shall annually pay
16 to "OCWD" the sum of One Dollar ($1.00).
17
18 3.3.2 Each annual rental payment required under this Agreement shall
19 be payable in advance of each Year of the Pipeline Lease Term. All
20 payments by the "CITY" of rent and other sums due under this
21 Agreement shall be paid without offset or deduction, and shall be deemed
22 payments on account. Neither the payment by the "CITY" nor the
23 acceptance by "OCWD" of any rent or other sums in an amount which is
24 less than the amount due and payable pursuant to Paragraph 3.3.1 herein
25 above, nor the issuance of any statement showing as due and payable an
26 amount less than is properly due and payable pursuant to the terms of
27 this Agreement, shall constitute an agreement by "OCWD" modifying
28 this Agreement or a waiver of "OCWD's" right to receive all sums
29 provided for in this Agreement. No endorsement or statement on any
30 check or any letter accompanying any check or payment shall be deemed
31 an accord or satisfaction, and "OCWD" shall accept all rent checks and
32 other payments from the "CITY" without prejudice to "OCWD's" right to
33 recover the balance of the amount due or to pursue any other remedy in
34 this Lease or otherwise provided by law.
35
36 3.4 The "CITY" acknowledges that the Pipeline is being leased to the
37 "CITY" on and "as -is" basis (subject to the "CITY's" construction of the Pipeline
38 Improvements in accord with Section Two above).
39
40 3.4.1 The "CITY" acknowledges that neither "OCWD", nor any of its
41 officers, directors, employees, agents or representatives, or any other
42 person, has made any written or oral representation, promise or
43 warranty, express or implied, concerning the Pipeline, its fitness for the
44 "CITY's" intended use or any other particular purpose of use, its potential
45 or capabilities, nor have any of the foregoing made any other promise,
46 representation or inducement not expressly set forth in this Agreement.
47
8
1 3.4.2 The "CITY" acknowledges that the "CITY" has had the opportunity
2 to and has inspected the Pipeline prior to entering into this Agreement,
3 and that the "CITY" takes and leases the Pipeline in the condition in
4 which the Pipeline exists as of the commencement of the Pipeline Lease
5 Term. The "CITY" stipulates that the Pipeline is in safe and leasable
6 condition, and fit for the "CITY's" intended use, as of the date of this
7 Agreement and the commencement of the Pipeline Lease Term.
8
9 3.5 For and during the Pipeline Lease Term, the "CITY" shall be
10 responsible for the operation, maintenance and repair of the Pipeline, and all
11 costs and expenses incurred in connection therewith.
12
13 3.5.1 The "CITY" shall not transport any substance other than Project
14 Water through the Pipeline without the prior written consent of
15 "OCWD".
16
17 3.5.2 The "CITY" shall acquire or obtain issuance of all licenses, permits
18 and approvals from all applicable governmental entities for the operation
19 and maintenance of the Project, including but not limited to the Pipeline,
20 and the distribution of Project Water through the Pipeline and "CITY"
21 distribution system for potable and other approved uses.
22
23 3.5.3 The "CITY" shall operate and maintain the Pipeline in accord with
24 sound operating and maintenance practices, and shall provide personnel
25 sufficient in number and qualifications to operate and maintain the
26 Pipeline.
27
28 3.5.4. The "CITY" shall be responsible for causing the production of
29 Project Water, and its delivery and distribution to and use by "CITY"
30 customers, to comply with all applicable environmental and health laws,
31 regulations, orders, permits, licenses, and approvals.
32
33 3.5.5 The "CITY" shall be responsible for all monitoring and reporting of
34 the operation of the Pipeline and delivery of the Project Water as may be
35 required in accord with the licenses, permits and approvals governing the
36 conduct of the Project or the use of the Pipeline. The "CITY" shall transmit
37 copies to "OCWD" of all reports prepared by "CITY" in connection with its
38 obligations under such licenses, permits and approvals.
39
40 3.5.6 "OCWD" shall at all times have the right to enter upon the site of
41 the Pipeline and inspect or observe its use, operation and performance.
42
43 3.5.7 The "CITY" shall exercise due care in the manner in which the
44 Pipeline is used, operated, maintained and repaired, and shall comply
45 fully with all laws, ordinances and regulations relating to the possession,
46 maintenance, use and operation of the Pipeline.
47
I 3.5.7.1 The "CITY" shall, at its sole cost and expense, keep the
2 Pipeline in good repair, condition and working order, and shall
3 furnish all tools, labor, equipment and parts reasonably required to
4 keep the Pipeline in good working order, and shall see that the
5 Pipeline is not subjected to careless or needlessly rough usage.
6
7 3.5.7.2 In connection with its maintenance of the Pipeline, the
8 "CITY" shall keep a log book showing, among other things, the type
9 of maintenance, repair or replacement work performed, the date, the
10 cost, and the person or entity performing the work.
11
12 3.5.7.3 All replacement parts, additions and accessories
13 permanently attached to the Pipeline, including but not limited to
14 the Pipeline Improvements constructed pursuant to Section 2
15 above, shall become a part thereof, and shall become and remain
16 the property of "OCWD"; provided, however, said additions and
17 accessories shall not include any connecting pipe, fittings or
18 accessories which are installed by "CITY" beyond the limits of the
19 existing "OCWD" Pipeline. "OCWD" acknowledges that "CITY"
20 will make certain additions and extensions to the Pipeline and that
21 those additions and extensions (but not the Pipeline) are the
22 exclusive property of "CITY".
23
24 3.5.7.4 The "CITY" shall not make any alterations, additions or
25 improvements that significantly affect the structural integrity or
26 performance characteristics of the Pipeline without the prior written
27 approval of "OCWD".
28
29 3.5.8 The "CITY" shall be responsible for all costs incurred in the
30 operation, maintenance and repair of the Pipeline (such costs are
31 hereinafter referred to as the "Pipeline 0 & M Costs"), and the "CITY"
32 shall maintain for a period of three years after the expiration or
33 termination of the Pipeline Lease Term an accounting of all Pipeline
34 "0 & M" Costs incurred during the Pipeline Lease Term. "OCWD"
35 shall at all times during the Pipeline Lease Term, and for a period of
36 three years thereafter, have the right, upon two (2) working days
37 written notice to the "CITY", to review, inspect and audit such
38 accounts and records.
39
40 3.6 At all times during the Pipeline Lease Term, the "CITY" shall
41 keep in force and maintain comprehensive general liability insurance or an
42 equivalent program of self-insurance with limits of One Million Dollars
43 ($1,000,000) per occurance and One Million Dollars ($1,000,000) annual
44 aggregate with respect to this contract. Such insurance or self-insurance shall
45 be applicable to bodily injury, death and property damage in any way resulting
46 from the operation or maintenance of the Pipeline, or the delivery or use of
47 Project Water transported through the Pipeline to the "CITY's" water
48 distribution system.
10
1
2 3.6.1 The "CITY" shall name "OCWD" and its officers, directors and
3 employees, as additional insureds under such policy. In the event that
4 the "CITY" maintains a program of self-insurance, the "CITY" agrees that
5 it will defend and indemnify "OCWD" in the same manner as if
6 insurance for such requirements were in effect.
7
8 3.6.2 Such liability insurance coverage may be maintained as part
9 of or in conjunction with any other liability insurance carried by the
10 "CITY".
11
12 3.6.3 In the event that the "CITY" maintains a; program of insurance,
13 the "CITY" agrees that it shall furnish to "OCWD" a certificate of
14 insurance indicating the fulfillment of the requirements cited in Sections
15 3.6 and 3.6.1 herein above.
16
17 3.7 The "CITY" shall not assign, sublet or in any way convey all or
18 any portion of its rights or obligations under the Pipeline Lease without the
19 prior written consent of "OCWD", which consent may be withheld without
20 cause at the sole discretion of OCWD; and any assignment, sublease or other
21 conveyance of any of the "CITY's" rights or obligations under the Pipeline
22 Lease without the prior written consent of "OCWD" shall be void, and shall be
23 grounds for termination of the Pipeline Lease.
24
25 3.8 Upon the expiration or earlier termination or abandonment of the
26 Pipeline Lease, the "CITY" shall disconnect the City Water System and Project
27 facilities from the Pipeline, and remove all blocks, flanges and obstructions, if
28 any, from the interior of the Pipeline,or otherwise restore the continuity of the
29 Pipeline from "OCWD's" Water Factory 21 to the terminus of the Pipeline in
30 Huntington Beach. The "CITY" shall conduct such abandonment activities at
31 its sole cost and expense, and "OCWD" shall have no responsibility for any such
32 costs or expenses.
33
34
35 SECTION FOUR: MISCELLANEOUS
36
37 4.1 Notices. All notices, payments, transmittals of documentation
38 and other writings required or permitted to be delivered or transmitted to any
39 of the parties under this Agreement shall be personally served or deposited in a
40 United States mail depository, first class postage prepaid, and addressed as
41 follows:
42
43
44 If to OCWD: Orange County Water District
45 10500 Ellis Avenue
46 P.O. Box 8300
47 Fountain Valley, California 92728-8300
48 Attention: General Manager
11
1
2 If to City: City of Newport Beach
3 3300 Newport Boulevard
4 Newport Beach, California 92659-1768
5 Attention: Utilities Director
6
7 or such other address or person as any party may direct to the other in writing.
8 Except where service is by personal delivery or by registered or certified mail,
9 return receipts requested, service of any instrument or writing shall be deemed
10 completed forty-eight (48) hours after deposit in a United States mail
11 depository.
12
13 4.2 Indemnification.
14
15 4.2.1 "OCWD" shall indemnify and hold the "CITY" and its officers,
16 council members, employees, and representatives harmless from and
17 against any damages or injury to any person or entity not a party to this
18 Agreement caused by the negligent performance of this Agreement by
19 "OCWD", or by any negligent or willful act of "OCWD", its officers,
20 directors, employees, agents, representatives and contractors in
21 connection with the performance of this Agreement; provided, however,
22 that "OCWD" shall not be liable for, and shall not indemnify and hold
23 the "CITY" harmless from, any passive negligence on the part of
24 "OCWD".
25
26 4.2.2 The "CITY" shall indemnify and hold "OCWD" and its officers,
27 directors, employees, and representatives harmless from and against any
28 damages or injury to any person or entity not a party to this Agreement
29 caused by the negligent performance of this Agreement by "CITY", or by
30 any negligent or willful act or omission of "CITY", its officers, council
31 members, employees, agents, representatives and contractors in
32 connection with the performance of this Agreement.
33
34 4.3 Litigation Assistance. If and when requested by "OCWD", the
35 "CITY" shall, at its own expense, join in or assist in the defense of "OCWD" in
36 any action or proceeding filed or instituted by any person or entity against
37 "OCWD" in connection with any asserted or claimed injury or damage resulting
38 from the production, delivery, or use of the Project Water in accord with this
39 Agreement; provided, however, that nothing in this Paragraph 4.3 shall modify
40 the indemnification provisions in Paragraph 4.2 above.
41
42 4.4 Covenant not Assail Title. By entering into this Agreement,
43 the "CITY" acknowledges the title and ownership of "OCWD" in and to the
44 Pipeline and the rights -of -way for its construction and use; and the "CITY"
45 hereby covenants and promises never to assail, contest or resist "OCWD's" title
46 to the Pipeline.
47
12
1 4.5 Disputes.
2
3 If either party herein is required to initiate litigation to enforce the
4 terms and conditions of this Agreement or to seek damages by reason of the
5 breach of the terms and conditions of this Agreement, the prevailing party shall
6 be entitled to recover reasonable attorneys' fees and costs incurred.
7
8 4.6 No Implied Waivers.
9
10 In the event that any term, condition or provision of this Agreement
11 should be breached by either party and thereafter waived by the other party, such
12 waiver shall be limited to the specific breach so waived, and shall not be deemed
13 either to be a continuing waiver or to waive any other breach hereunder.
14
15 4.7 Warranty of Authority.
16
17 Each officer of "OCWD" and the "CITY" affixing his or her
18 signature below thereby warrants and represents that he or she has the full
19 legal authority to bind his or her respective party to all of the terms, conditions
20 and provisions of this Agreement, that his or her respective party has the hill
21 legal right, power, capacity, and authority to enter into this Agreement and
22 perform all of the obligations herein, and that no other approvals or consents
23 are necessary from his or her respective party in connection therewith.
24
25 4.8 Headings.
26
27 The titles and headings of Sections and Paragraphs of this
28 Agreement, as herein set forth, have been inserted for the sake of convenience
29 only, and are not to be taken, deemed or construed to be any part of the terms,
30 covenants or conditions of this Agreement, or to control, limit or modify any
31 of the terms, covenants or conditions hereof.
32
33 4.9 Integration, Construction and Amendment.
34
35 This Agreement represents the entire understanding of "OCWD"
36 and the "CITY" as to those matters contained herein, and no prior oral or
37 written understanding shall be of any force or effect with respect to those
38 matters covered by this Agreement. This Agreement shall be governed by the
39 laws of the State of California and construed as if drafted by both "OCWD" and
40 the "CITY". This Agreement may not be modified, altered or amended except
41 in writing signed by both "OCWD" and the "CITY".
42
43 4.10 Successors.
44
45 Subject to the provisions of Paragraph 3.7 above, this Agreement, and
46 all of the terms, conditions and provisions herein, shall inure to the benefit of, and
47 be binding upon, "OCWD", the "CITY", and their respective successors and assigns.
13
1
2
3 IN WITNESS WHEREOF, the parties have executed this Agreement as of
4 the date first written above.
5
6
7 APPROVED AS TO FORM:
8 Rutan & Tucker
9
10
11
12 By:
13
14
15
16
17
18
19
20
21
22 APPROVED AS TO FORM:
23 City Attorney's Office
24
25
26
27 By:
28 City Attor f y
29
30 ATTEST:
31
32
33
34 By: ��l/��%i'u�, K /�gC r y
35 City Clerk
ORANGE COUNTY WATER DISTRICT
A Special Governmental District
By:
General C.unsel for v President of the Board
Orange County Water District
General Marta3 -r
CITY OF NEWPORT BEACH
A Municipal Corporation
Mayor
14
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•
UNITED %TATES
DEPARTMENT OR TIE INTERIOR
°FINE OF Llly( N*T4
J.N. 014M14, ACFENGPIPECTOR
CROOK MINTY Mil Tu 4ROIECT 8IWIP4 r4Gu(IE1
g14N.4 rm. ff4, Oman! Mai, 1'paw •
111E WIN IL PALSONS OXFAR1'
�• 11Y[14!40 E
ORANGF COUNTY WATER DISTRICT
amfl' 1-11
' 'iu 4Nf1 /44/4:11l0n :I11,
1r4tr (Collo;
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or
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44/17A /5 100