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HomeMy WebLinkAboutC-3116 - End-User Ten-Year Agreement, Green Acres ProjectAGREEMENT BETWEEN ORANGE COUNTY WATER DISTRICT, CITY OF NEWPORT BEACH AND BIG CANYON COUNTRY CLUB REGARDING RETROFITTING IRRIGATION FACILI'T'IES AT BIG CANYON COUNTRY CLUB FOR USE OF GREEN ACRES PROJECT WATER This Agreement (the "Agreement ") is made and entered into as of December 18, 1996, by and between the ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California, hereinafter referred to as "OCWD," the CITY OF NEWPORT BEACH, a municipal corporation, hereinafter referred to as "CITY," and BIG CANYON COUNTRY CLUB, a private, non -profit mutual benefit corporation, hereinafter referred to as "USER." RECITALS A. OCWD is the producer of reclaimed water from the Green Acres Project, hereinafter referred to as "Project Water." CITY has agreed to buy Project Water from OCWD and resell it to end -users pursuant to the terms and conditions specified in that certain Agreement Between Orange County Water District and City of Newport Beach Regarding Distribution and Sale of Green Acres Project Water, dated as of January 16, 1991. B. USER currently purchases potable water from CITY for its own use at the Big Canyon Country Club, One Big Canyon Drive, Newport Beach, California. C. USER has agreed to purchase Project Water from CITY for allowable, suitable nonpotable uses, specifically landscape irrigation of its golf course and certain related facilities (hereinafter referred to as the "SITE "), in lieu of potable water currently purchased from CITY, except for the irrigation of putting greens, the perimeter of selected fairways located adjacent to residences, and elsewhere on the SITE as agreed NBI- 284407.W �ryl/ / 12/02/96 OCND DOC. vicWD00C.�r�L� - /D'�l� STAR NO. —54 to by USER and CITY and within acceptable State Health Department standards, as set forth in that certain "Third Amended and Restated Agreement; Green Acres Reclaimed Water Project End -User Agreement for delivery and sale of reclaimed water to Big Canyon Country Club" (the "End -User Agreement ") dated as of September 30, 1996, by and between CITY and USER. D. USER acknowledges the benefit of receiving Project Water for use as irrigation water at the SITE. E. OCWD and CITY acknowledge the benefit of having USER receive Project Water during the time period specified herein. F. OCWD and CITY acknowledge that USER will incur substantial costs for retrofitting the existing irrigation system for the use of Project Water at the SITE. AGREEMENT NOW, THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions herein contained, the parties hereto agree as follows: 1. USER has agreed to receive Project Water subject to the terms and conditions of the End -User Agreement. OCWD and CITY have agreed to pay USER for the retrofit of USER's irrigation system. Those payments are set forth herein. 2. OCWD shall (a) contribute to USER Five Hundred Thousand Dollars ($500,000) in immediately available funds on March 1, 1997, and (b) be responsible for the design and construction of the Project Water service connection and bear all costs associated therewith. xsl- 2M4M.v4 2 1210V% 3. CITY shall (a) contribute to USER One Hundred Eight Thousand Dollars ($108,000) in immediately available funds on July 1, 1997, (b) pay for the construction and maintenance of the Pump Station on the SITE, and (c) reimburse USER for the energy costs associated with the Pump Station for ten (10) years following the date Project Water is provided to the SITE. 4. USER acknowledges that OCWD's and CI TY's contributions towards preparing the SITE for the use of Project Water represents a significant expenditure of public funds. Therefore, in the event USER abandons the use of Project Water within ten (10) years from the day and year first above written except as provided below, USER shall reimburse OCWD and CITY for said contributions in Sections 2 and 3 above, respectively (each, the "Principal ") less the Principal Forgiven (defined herein as ten percent (10 %) of Principal per year for each year Project Water is used), plus the cumulative interest (defined herein as six percent (6 %) compounded annually from the date such Principal was provided to USER) on the Residual Principal (defined herein as Principal less Principal Forgiven) at the time of abandonment, as set forth in Exhibits A and E respectively, attached hereto and incorporated herein. Abandonment of Project Water shall be understood to mean usage of Project Water which is less than 50 acre -feet in any twelve (12) month period. USER shall be exempt from said reimbursement requirement if USER abandons the use of Project Water pursuant to Sections 2. 4. 13 or 44 of the End -User Agreement. 5. This Agreement and the rights and benefits of OCWD and CTTY hereunder may be assigned or transferred by OCWD and CITY to any entity that assumes the responsibilities and obligations of OCWD and /or CITY for the sale and distribution of Project Water, provided, however, that OCWD and CITY shall remain fully liable for all of the responsibilities and obligations of OCWD and CITY hereunder, respectively. USER shall not assign or transfer the rights and benefits of USER under this Agreement to any entity without the prior written consent of OCWD and CITY, which consent shall not be unreasonably withheld or delayed. Nsl- 2e4407.v4 3 12/02196 6. In the event that any party hereto brings any action, suit, arbitration or other proceeding against another party arising out of or relating to the subject matter of this Agreement, its validity or any of the terms or provisions hereof, then the prevailing party in such action, suit, arbitration or other proceeding shall recover from the other party its reasonable attorneys' fees and costs incurred in connection therewith, in addition to any other relief to which it may be entitled. Said attorneys' fees shall include such fees for prosecuting or defending any appeal and shall be recoverable and awarded for any supplemental proceedings until the final judgment is satisfied in full. 7. This Agreement is conditioned upon USER obtaining from Dr. Dale Devitt by December 31, 1996 an opinion that the Project Water to be provided by CITY to USER within the parameters set forth in Exhibit B -1 to the End -User Agreement may be used by USER without any measurable adverse consequences (financial or otherwise) to the SITE. 8. The term of this Agreement shall be for ten (10) years from the day and year above written. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. 9. All notices, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either of the parties hereto under this Agreement shall be personally served or deposited in the United States mail depository, first class postage prepaid, and addressed as follows: OCWD: Orange County Water District P.O. Box 8300 Fountain Valley, CA 92728 -8300 Attention: General Manager NB1- 28"07.v4 4 12/02/96 CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: City Manager USER: Big Canyon Country Club One Big Canyon Drive Newport Beach, CA 92660 Attention: General Manager or such other address as the parties shall direct in writing. Service of any instrument or writing by mail shall be deemed complete forty-eight (48) hours after depositing in United States mail depository. 10. This Agreement, and all of the provisions herein, shall be binding upon and inure to the benefit of OCWD, CITY and USER. xsl- 284407.v4 5 12/02/96 0 0 IN WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above. APPROVED AS TO FORM: ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California By: C, " " �; //J— General Counsel CITY OF NEWPORT BEACH, a municipal corporation Attorney ATTEST: By: President By: f1 General Manager Esq. Y" a J. r City ManagerVy X6/ -)-'o. 4'&' LaVonne Harkless City Clerk xei- 28W.v4 6 12/02/46 BIG CANYON COUNTRY CLUB, a private corporation 22!22 vi /John/Hamiltoly Pr dent NB1- 284407.V4 / 12=96 EXHIBIT A GREEN ACRES PROJECT BIG CANYON COUNTRY CLUB REIMBURSEMENT OBLIGATION TO THE ORANGE COUNTY WATER DISTRICT IN THE EVENT OF ABANDONMENT OF SERVICE Principal (OCWD Funding) Interest Rate: Abandonment Obligation Commences: Abandonment Obligation Ends: $500,000.00 6.00% Date Green Acres Water First Served Ten Years after Obligation Commences TOTAL ABANDONMENT PRINCIPAL INTEREST POTENTIAL DEBT 1st Year $500,000.00 $30,000.00 $530,000.00 2nd Year $450,000.00 $74,880.00 $524,880.00 3rd Year $400,000.00 $103,880.00 $503,880.00 4th Year $350,000.00 $126,175.00 $476,175.00 5th Year $300,000.00 $140,790.00 $440,790.00 6th Year $250,000.00 $146,725.00 $396,725.00 7th Year $200,000.00 $142,760.00 $342,760.00 8th Year $150,000.00 $127,635.00 $277,635.00 9th Year $100,000.00 $99,900.00 $199,900.00 10th Year $ 50,000.00 $57,945.00 $107,945.00 After 10th Year $ 0,00 $ 0.00 $ 0.00 EXHIBIT B GREEN ACRES PROJECT BIG CANYON COUNTRY CLUB REIMBURSEMENT OBLIGATION TO THE CITY OF NEWPORT BEACH IN THE EVENT OF ABANDONMENT OF SERVICE Principal (City of Newport Beach Funding) Interest Rate: Abandonment Obligation Commences: Abandonment Obligation Ends: $108,000.00 6.00% Date Green Acres Water First Served Ten Years after Obligation Commences TOTAL ABANDONMENT PRINCIPAL INTEREST POTENTIAL DEBT 1st Year $108,000.00 $ 6,480.00 $114,480.00 2nd Year $97,200.00 $16,174.08 $113,374.08 3rd Year $86,400.00 $22,438.08 $108,838.08 4th Year $75,600.00 $27,253.80 $102,853.80 5th Year $64,800.00 $30,410.64 $ 95,210.64 6th Year $54,000.00 $31,692.60 $85,692.60 7th Year $43,200.00 $30,836.16 $74,036.16 8th Year $32,400.00 $27,569.16 $59,969.16 9th Year $21,600.00 $21,578.40 $43,178.40 10th Year $10,800.00 $12,516.12 $23,316.12 After 10th Year $ 0.00 $ 0.00 $ 0.00 x . t • 0 THIRD AMENDED AND RESTATED AGREEMENT GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO BIG CANYON COUNTRY CLUB THIS THIRD AMENDED AND RESTATED AGREEMENT is made and entered into as of this 30th day of September, 1996 by and between the City of Newport Beach, a Municipal Corporation, hereinafter referred to as "CITY", and the Big Canyon Country Club, a private, non - profit mutual benefit corporation, hereinafter referred to as "USER". RECITALS A. With the exception of certain limited areas served by the Irvine Ranch Water District ( "IRWD "), CITY is the exclusive retail water purveyor within CITY's boundaries providing water for residential, industrial, commercial, public agency, agricultural and other uses. CITY produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced from the Orange County groundwater basin, which basin is managed by the Orange County Water District ( "OCWD "). B. USER is a private corporation within the jurisdictional and service boundaries of CITY, and currently purchases potable water from CITY for its own use at Big Canyon Country Club, One Big Canyon Drive, Newport Beach, California. C. CITY has agreed to buy reclaimed water from OCWD and resell such reclaimed water pursuant to the terms and conditions specified in that certain agreement entitled "Agreement Between Orange County Water District and City of Newport Beach Regarding Distribution and Sale of Green Acres Project Water" dated as of January 16, 1991, and as it may be subsequently amended, hereinafter referred to as xBi- 287654.v4 1 12/03/96 oCWD DOC• �l -(� FILE WIOCF7D IOC. STASNO.L(7 j "Retailer Agreement ". City executed the Retailer Agreement for the purpose of seeking to provide its present and future residents with a supplemental source of water to meet their needs and to assist in the statewide objective of conserving and utilizing to the maximum degree possible the water of the People of the State of California, which water shall be recovered from the operation known as the "Green Acres Project" for all possible beneficial uses. D. The Green Acres Project is being planned for extension into CITY's service area for the purpose of conserving and beneficially reusing wastewater from the County Sanitation Districts of Orange County or the IRWD, such wastewater having been treated by OCWD or IRWD to standards established by the State Health Department and transported and sold by OCWD as "Project Water" to CITY to be resold to Project Water customers. E. USER desires to purchase Project Water from CITY for allowable, suitable nonpotable uses, specifically landscape irrigation of its golf course and certain related facilities (hereinafter referred to as "SITE "), in lieu of potable water currently purchased from CITY, and CITY is willing to sell Project Water to USER. AGREEMENT NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions of this Agreement, the parties agree as follows: 1. TRANSMISSION PIPELINE FACILITY It is the intent of OCWD to construct a transmission pipeline as part of the Green Acres Project that will convey Project Water to various locations within CITY boundaries, including the SITE. All Project Water will originate from either the OCWD Green Acres Project Water Treatment Facility or a similar NB1- 297654.V4 2 12/03196 r facility operated by IRWD. OCWD owns the main transmission pipeline facility and service line which serves USER upstream of CITY's reclaimed water service meter vault, which facility and line shall hereinafter be referred to as 'Project Facilities ". C= owns, operates and maintains all reclaimed water service meter vault piping, by -pass line piping, service meter vault, Pump Station (as hereinafter defined), service meter and control valves, which facilities shall hereinafter be referred to collectively as "City Facilities ". USER owns and maintains the pipelines, backflow preventers, warning signs, warning tags and all appurtenances downstream of CITY's reclaimed water service meter vault, which facilities shall hereinafter be referred to as "On -Site Facilities" and are more fully set forth on the drawings attached hereto as Exhibit A -1 (to be attached within sixty (60) days of the execution of this Agreement). The point where USER's piping connects to the downstream end of CITY's reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection ". The Point of Connection will be in the Jamboree Road parkway near USER's maintenance yard entrance approximately 1,300 feet northerly of San Joaquin Hills Road, as shown on Exhibit A -2 attached hereto (to be attached within sixty (60) days of the execution of this Agreement). That portion of the Project Facilities and City Facilities located within CITY's boundaries will be operated and maintained by CITY as a contractor for OCWD for the purpose of distributing Project Water to be purchased from CITY by USER. USER shall also own and maintain all devices relating to USER's on -site potable water system including, but not limited to, drinking fountain covers, backflow preventers and identification tags. CITY shall be responsible for all costs associated with constructing and maintaining a pump station on the SITE (the "Pump Station "), which Pump Station shall be owned by CITY. For ten (10) years following the date Project NB1- 267654.V4 3 12/03/96 Water is provided to the SITE as provided herein, CITY shall be responsible for all energy costs associated with the Pump Station, and USER shall be responsible for all such energy costs thereafter. USER and CITY shall execute a separate agreement in which USER will grant to CITY at no cost to CITY an easement or license across USER's property to provide reasonable access for the construction, installation and maintenance of the Pump Station. Such agreement will be attached hereto within sixty (60) days of the execution of this Agreement as Exhibit C In addition, within sixty (60) days after the execution of this Agreement, USER shall provide to CITY information with respect to USER's use of water, fertilizers, water supplements and the costs thereof for the prior.five (5) year period. Within sixty (60) days of beginning to purchase Project Water from CITY under this Agreement, USER shall provide CITY with the same information for the period between (a) executing this Agreement and (b) the purchase of Project Water from CITY. 2. RULES AND REGULATIONS USER agrees that during the term of this Agreement and any extension thereof, USER shall comply with all rules and regulations promulgated now and in the future by CITY relative to the sale and use of Project Water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of Project Water, which rules shall hereinafter be referred to as "Project Rules ", provided that CITY shall have provided USER with a copy of such Project Rules and shall provide USER with any modifications or additions thereto within ten (10) days of the promulgation of such modifications or additions. In the event that CITY and /or OCWD or any other governmental agency shall promulgate any rule or regulation that shall cause the total cost to USER for the use of Project Water to exceed the total cost to USER if it had NISI- 287654.v4 4 12M,96 • • used potable water instead of Project Water, USER may terminate this Agreement upon thirty (30) days notice to CITY and as set forth in Section 14 of this Agreement. For purposes hereof, the total cost to USER shall include all costs and expenses of any kind or nature directly or indirectly associated with the use of Project Water including, without limitation, the rate charged for such use pursuant to this Agreement and the incremental costs incurred to comply with this Agreement. 3. QUANTITY OF WATER TO BE PURCHASED BY USER; INSTANTANEOUS MAXIMUM FLOW CITY agrees to supply Project Water to USER and USER agrees to purchase Project Water. The anticipated average annual Project Water usage at the Site is two hundred ninety (290) acre -feet. Project Water flow demands at the SITE's service shall not exceed an instantaneous maximum flow of two thousand two hundred (2,200) gallons per minute. CITY's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. In the event that the current use of the property discontinues or is modified, USER may modify or terminate this Agreement, as applicable, subject to the conditions set forth in Section 14 of this Agreement. If at any time during construction or operation of the On -Site Facilities, real or potential hazards or evidence of such hazards are found to exist, CITY reserves the right and has the authority to take action to insure that the situation be remedied and to protect the public health, as is further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of CITY to terminate Project Water service to SITE. NB1- 287634.V4 E 12/03/96 i 4. QUALITY OF WATER TO BE PURCHASED BY USER; PRESSURE CITY agrees that all Project Water delivered to USER from the Project Facilities pursuant to this Agreement shall conform to (a) the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, State and local health departments, and Federal, State and county agencies having jurisdiction to fix minimum standards for the quality of water with respect to USER's anticipated use, which Board, health departments and agencies shall hereinafter be referred to as "Regulatory Agencies'; and (b) such minimum standards set by Regulatory Agencies as will prevent the Project Water from causing any damage to USER's property and all plants and vegetation located thereon. Furthermore, CITY agrees that Project Water delivered to USER pursuant to this Agreement shall conform to the requirements set forth in Exhibit B -1 attached hereto (to be attached within sixty (60) days of the execution of this Agreement). If the Project Water fails to conform to the above requirements, CITY covenants that CITY will terminate the flow of Project Water to the SITE and provide potable water in its place, and USER may terminate this Agreement if such requirements are not met within thirty (30) days. CITY understands and acknowledges that even a minor interruption in water service will have a significant impact upon the SITE and may result in significant interference and damage to the conduct of USER's business. Except as provided in the final sentence of Section 3 above, any loss, cost, damage or expense resulting, directly or indirectly, from the cessation or termination of service shall be home by CITY. In addition to the foregoing, CITY covenants that all Project Water delivered to USER pursuant to this Agreement will not (x) emit any offensive odor, (y) cause undesirable change to the environmental makeup of any of the lakes found on USER's property, including any offensive change to the odor, algae level, color or wildlife composition of such lakes, or (z) cause damage to USER's property or grass, plants or other vegetation located thereon, which damage shall include NB1- 2876M. V4 6 12M/96 t 0 excessive salt buildup. In the event that USER shall decide, in USER's reasonable judgment, that any of (x), (y), or (z) above exists, CITY and USER agree to use the following procedure: NBI- 297654.V4 (1) USER shall notify CITY of the problem. (2) CITY shall, within three (3) days of such notification, investigate the problem. (3) If CITY agrees that a problem exists, CITY will attempt to remedy the problem. If CITY is unable to remedy the problem within thirty (30) days after CITY receives notice from USER, CITY will terminate the flow of Project Water to the SITE and provide potable water in its place. (4) If CITY does not agree that a problem exists, CITY will notify USER of the same within three (3) days after CITY receives notice from USER. CITY and USER will meet to discuss the issue within seven (7) days of such notification from CITY. (5) If CITY and USER are still unable to agree whether a problem exists, CITY and USER shall together select a mediator. CITY and USER shall then present their views to the mediator, and the mediator shall decide whether a problem exists. CITY and USER agree to be bound by the mediator's decision; however, CM and /or USER may pursue the matter through arbitration as provided in Section A hereof. (6) If the mediator decides that a problem exists, the mediator shall proscribe the course of action CITY must take to remedy the problem. CITY must attempt immediately thereafter to remedy the problem in the manner proscribed. If CM is unable to remedy the problem within thirty (30) 7 12113/96 9 i days of receipt by CITY of the proscribed course of action from the mediator, or within such longer period as deemed reasonable by the mediator, CITY will terminate the flow of Project Water to the SITE and provide potable water in its place. (7) If the mediator decides that no problem exists, USER must continue to accept Project Water as contemplated herein. The replacement of Project Water by potable water as provided above shall be on a temporary basis only; once CITY and USER agree that the situation has been remedied, CITY shall provide Project Water in the place of potable water on the SITE. If there is disagreement as to whether the situation has been remedied, CITY and USER shall follow the procedure outlined above to resolve such dispute. Project Water shall be delivered on a continuous basis at a pressure of not less than ninety pounds per square inch (90 psi) for demands under thirteen hundred gallons per minute (1,300 gpm), and not less than eighty pounds per square inch (80 psi) for demands from thirteen hundred one gallons per minute (1,301 gpm) to two thousand two hundred gallons per minute (2,200 gpm) at the Point of Connection between the hours of 8:00 p.m. to 6:00 am. USER shall not exert a demand for Project Water between the hours of 6:00 a.m. and 8:00 p.m. unless USER's staff is present to ensure that the public does not come into contact with Project Water. 5. PRICE OF PROJECT WATER CITY acknowledges the concerns of USER regarding (a) the potential need to add or adjust fertilizers and /or water supplements to the Project Water in order to maintain high quality fairway turf, and (b) the potential need to use additional NB1- 287654.V4 8 12103/96 0 • amounts of water in order to offset the increased amounts of nutrients in the Project Water. CITY desires to comply with State law by only requiring USER to use reclaimed water in its irrigation operations if CITY supplies Project Water to USER at a cost less than or comparable to the cost of potable water. Therefore, during the entire term of this Agreement, the price to be paid by USER for Project Water delivered by CITY shall not exceed the lower of (a) eighty percent (80 %) of the weighted average of CITY's retail rates for potable water, excluding any surcharges that are based on usage of potable water, as such rates are established by resolution of the City Council and enforced on the date of delivery of the Project Water, or (b) the lowest rate then offered by CITY to any purchaser of reclaimed water, whether such rate is determined as a percentage of CITY's retail rate for potable water or otherwise. The retail rates for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least ten (10) days prior to the adoption of a resolution establishing the water rates of CITY and /or modifying the purchase price of Project Water, CITY shall give written notice to USER and provide notice as prescribed in the City Municipal Code of a public hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. If, despite the reduced rate charged USER for Project Water in the preceding paragraph, USER believes that unreimbursed incremental costs have been incurred as a result of the use by USER of Project Water that would not have been incurred if USER had used potable water, the following steps shall be taken: Within six (6) months after the end of this two (2) year period, and within six (6) months after the end of each two (2) year period thereafter, USER shall submit to CITY an itemized account of the costs expended during the previous two years that were necessary to accommodate the use of Project Water on the SITE, xeI- 297664.v4 9 11/03/96 • • including, without limitation, costs of fertilizers, water supplements, and /or other additives, costs of construction of any special systems, such as a gypsum- injection system, costs of any special processes, such as deep tine aeration, and costs of excess Project Water that was needed to offset the increased amounts of nutrients in the Project Water. CITY shall review this information and, with the help of landscape and irrigation specialists, shall determine which costs may be solely attributed to USER's use of Project Water as opposed to potable water on the SITE. If USER disagrees as to CITY's determination, CITY and USER shall select a mediator to settle the dispute as set forth in Section 4(514(51 herein. CITY shall then make an adjustment to the rate for Project Water that will (a) reimburse USER for the costs incurred during the previous two (2) years that are attributed solely to the use of Project Water as opposed to the use of potable water, and (b) compensate USER for the costs that are anticipated to be incurred during the next two (2) years that are attributed solely to the use of Project Water as opposed to potable water. The adjustment described in the previous sentence shall be to the extent necessary for CITY to comply with State law that requires CITY to provide Project Water to USER at a cost, including all expenses associated therewith, that is less than or comparable to the cost of potable water. USER and CITY may enact a formal process that implements the intent of this paragraph. 6. METERING AND MEASUREMENT OF FLOWS USER agrees that at locations where irrigation water is used exclusively, C= shall maintain, at its own expense, a control valve or valves and a meter for the purpose of measuring the quantity of Project Water delivered pursuant to the terms of this Agreement from CITY to USER at the Point of Connection where such water is delivered to USER. CITY or a designated representative of CITY shall periodically read the service meter and record usage of Project Water onto a schedule. NB1- 287654.V4 10 12103/96 7. PAYMENT FOR PROJECT WATER CITY shall invoice USER for the price of the Project Water purchased by USER as part of CITY's regular billing cycle. Said invoices shall be paid within nineteen (19) days of the billing date. CITY retains the right to change billing cycles and due dates as necessary upon sixty (60) days prior written notice to USER, so long as such change is consistent with formally adopted City-wide practices and procedures and State law. 8. LINMATION OF USE USER understands and agrees that Project Water delivered from OCWD's Project Facilities pursuant to the terms hereof has restricted uses, and USER agrees to use the Project Water only upon the property of USER for the irrigation of its golf course and related facilities and only for these uses. 9. COVENANTS, REPRESENTATIONS AND WARRANTIES CITY hereby covenants as follows: (a) There will be sufficient Project Water to meet all of USER's irrigation needs with respect to the SITE. (b) All actions taken by CITY with respect to Project Water, Project Facilities and City Facilities have complied and will comply with all regulations promulgated by all Regulatory Agencies and all other applicable laws. NB1- 287654.V4 11 12103/96 (c) CITY will use all commercially reasonable efforts to supply to USER Project Water that falls within the parameters set forth in Exhibit B -2 attached hereto. (d) CITY will provide USER with all engineering support requested by USER, without charge, including the assistance of CITY engineers and other staff, to assist in the review of USER's irrigation system redesign for the purposes contemplated herein. (e) At CITY's cost, CITY will make presentations to USER, USER's club members and related homeowners' associations with respect to the Green Acres Project and Project Water. (f) In the event that CITY is in breach or default under this Agreement, at USER's election, CITY shall assign to USER all of its rights and remedies under the Retailer Agreement. CITY hereby represents and warrants as follows: (a) USER may use potable water to irrigate putting greens, the perimeter of selected fairways located adjacent to residences, and elsewhere on the SITE as agreed to by USER and CITY and within acceptable State Health Department standards. (b) OCWD is not a party to any agreement between CITY and a user of Project Water. 10. INDEMNIFICATION NB1- 287654.V4 12 1ZMJ96 CITY agrees to protect, indemnify, defend, save and hold harmless USER, its directors, agents and employees from and against any and all loss, liability, expense or damage of any kind or nature and from any suits, claims or demands, including (a) all consequential damages; (b) all damages to any natural resources, and the costs of any required or necessary repair, clean up, response cost, or detoxification of the SITE or any portion thereof, and the preparation and implementation of any closure, remedial or other required plans; and (c)'all costs and expenses incurred in connection with clauses (a) and (b), including all attorneys' fees and expenses, whether in suit or not (such loss, liability, expense or damage, including clauses (a), (b) and (c) above, shall collectively be referred to herein as "Damages "), which arise directly or indirectly out of (x) the use by USER of the Project Water as opposed to potable water as contemplated herein, (y) the existence or alleged existence of any Hazardous Substances (as defined below) in the Project Water, or (z) the failure to remove any Hazardous Substances from the Project Water, unless such suit, claim or demand is caused primarily by the gross negligence or willful misconduct of USER, its directors, agents and employees, or the grossly negligent operation, maintenance or repair by USER of On -Site Facilities required to be operated, maintained or repaired by USER pursuant to this Agreement. The foregoing indemnity shall apply to any residual contamination on, under or about the SITE, as well as claims of any neighboring property owners or occupants, and to any contamination of any property or natural resources, arising from the Project Water. Upon receiving knowledge of any suit, claim or demand asserted by a third party that USER believes is covered by this indemnity, USER shall give CTIY notice of the matter and an opportunity to defend it, at CITY's cost and expense, with legal counsel satisfactory to USER. USER may also require CITY to so defend the matter. CITY will pay all fees or penalties imposed by any Regulatory Agency or any other governmental authority for any violation of any code, regulation or law with respect to the transportation, use or chemical composition of the Project Water. NB1- 287654M4 13 12/03196 The obligations of CITY under this Section 10 shall survive the expiration or termination of this Agreement. CITY acknowledges that excess water from USER irrigation operations and from lakes on the SITE drain into the Upper Newport Bay, and that once USER begins to use Project Water for irrigation purposes, any excess Project Water will drain into the Upper Newport Bay as well. CITY agrees to indemnify, defend, save and hold harmless USER, its directors, agents and employees from and against any and all Damages which arise directly or indirectly out of such drainage of Project Water into the Upper Newport Bay as well as any modification or termination of USER's right to allow its excess water to drain into the Upper Newport Bay when the modification or termination is required because of USER's use of Project Water as contemplated herein. As used herein, "Hazardous Substances" shall mean (a) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Law (as defined below) as a "hazardous substance ", "hazardous material", "hazardous waste ", "contaminant" or any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity'; and (b) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment. "Environmental Lam' shall mean shall mean any and all present and future Federal, state and local laws (whether under common law, statute or otherwise), ordinances, regulations, permits, guidance documents, policies, and any NBl•287654.V4 14 12/03/96 • other requirements of governmental authorities relating to health, safety, the environment or to any Hazardous Substances. 11. PERNMS This Agreement is conditioned upon OCWD and CITY obtaining the necessary permits relating to the use of Project Water for landscape irrigation. All costs of obtaining such permits shall be borne by CITY. CITY agrees to file in USER's name, with USER's reasonable cooperation, any and all applications and to undertake such proceedings as may be necessary to enable OCWD, CITY and USER to carry out the undertaking described herein, and to pursue such applications and proceedings in good faith and with due diligence, including any application required to be issued to OCWD by Regulatory Agencies. USER understands and agrees that USER must comply with the regulations set forth in permits if such permits apply to USER, provided that such compliance by USER shall not materially increase the cost of Project Water or unreasonably interfere with USER's golf course and related operations. 12. INTENTIONALLY DELETED 13. CONDITIONS PRECEDENT (a) This Agreement is conditioned upon OCWD, CITY and USER executing by December 18, 1996 that certain Agreement between Orange County Water District, City of Newport Beach and Big Canyon Country Club Regarding Retrofitting Irrigation Facilities at Big Canyon Country Club for Use of Green Acres Project Water. NBI- 287654.V4 15 12/03/96 (b) This Agreement is conditioned upon OCWD's completing and ' making operational the Green Acres Project by July 1, 19981 including the following: (a) the transmission pipeline is extended to the Site; (b) OCWD makes Project Water available for sale; and (c) all necessary permits, certificates and approvals are issued by all Regulatory Agencies having jurisdiction over the construction and operation of water reclamation facilities and over the production, distribution, sale and use of Project Water. This Agreement is further conditioned upon (y) OCWD's acquiring by July 1, 1998, acceptable right -of -way access from the Project Facilities to the SITE for transportation pipeline purposes, and (z) OCWD and CITY gaining by July 1, 1998, the approval by all federal, state and local agencies having regulatory jurisdiction or grant- funding responsibilities with respect to the Project Facilities. If the conditions specified in this Section 13 are not met within the given time limits, USER may cancel this Agreement. (c) Within three (3) years from the date the conditions specified in items (a), (b), (c), (y) and (z) above have been satisfied, the redesign of USER's irrigation system to accommodate Project Water shall have been completed and USER shall have begun purchasing Project Water from CITY as provided herein. 14. CONDITIONS SUBSEQUENT In the event that CITY is unable to deliver Project Water through Project Facilities, CITY reserves the right to provide USER with a minimum of seventy - two (72) hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. CITY shall provide USER with a minimum of twenty-four (24) hours advance notice when resumption of the delivery of Project NB3- 287654.V4 16 l2MI96 • i Water to USER's SITE is expected. In the event CITY is unable to deliver Project Water to USER or defaults under this Agreement, CITY must provide USER with potable water at the potable water rate or reclaimed water at the Project Water rate, subject to the right of CITY to determine allocation of all water, both Project Water and potable, in the event of emergencies. If USER terminates this Agreement as authorized under the terms of this Agreement, CITY must contemporaneously provide USER with potable water in the place of Project Water. Furthermore, in the event that OCWD ceases producing and distributing Project Water or in the event that the treatment criteria imposed by any Regulatory Agencies exceeds those existing as of the date of this Agreement, either CITY or USER shall have the option to cancel this Agreement. CITY shall convert service on the SITE back to a potable water system(s) at no expense to USER if there is a cessation in service or this Agreement is canceled or terminated for any reason (other than the expiration of the term pursuant to Section 16 below), as well as converting back to Project Water if service is to be restored pursuant to the terms of this Agreement. 15. LIMITATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of Project Water from the Green Acres Project beyond that usable by USER. CITY reserves the right to enter into contracts with others for the sale of any Project Water so long as such contracts do not interfere with CITY's ability to supply sufficient Project Water to meet USER's requirements. 16. TERM The initial term of this Agreement shall be ten (10) years from the day and year first above written. USER shall have the option to extend said initial term for two (2) additional ten (10) year terms, provided that USER gives CITY written NB1- 2876%.V4 17 12103196 notice of such election at least six (6) months prior to the expiration of the previous term. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. 17. ASSIGNMENT This Agreement and the rights and benefits of CITY hereunder may be assigned and transferred by CITY to any entity which assumes the responsibilities and obligations of CITY for the sale and distribution of Project Water to USER, provided, however, that CITY shall remain fully liable for all of the responsibilities and obligations of CITY hereunder. This Agreement and the rights and benefits of USER hereunder shall not be assigned or transferred by USER without the written consent of CITY, which consent shall not be unreasonably withheld. 18. ARBITRATION (a) CITY and USER hereby agree that all controversies and claims arising directly or indirectly out of this Agreement shall at the written request of any party be arbitrated pursuant to the applicable rules of the American Arbitration Association. The arbitration shall occur in the State of California. Judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The Federal Arbitration Act shall apply to the construction and interpretation of this arbitration agreement. (b) A single arbitrator shall have the power to render a maximum award of one hundred thousand dollars ($100,000). When any party files a claim in excess of this amount, the arbitration decision shall NB1- 287654.V4 18 12/03196 be made by the majority vote of three (3) arbitrators. No arbitrator shall have the power to restrain any act of any party. (c) No provision of subparagraph (a) shall limit the right of any party to exercise self -help remedies or to obtain any provisional or ancillary remedies (including, but not limited to, injunctive relief) from a court of competent jurisdiction. The institution and maintenance of any remedy permitted above shall not constitute a waiver of the rights to submit any controversy or claim to arbitration. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding. 19. NOTICES All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either 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: CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: City Manager USER: Big Canyon Country Club One Big Canyon Drive Newport Beach, CA 92660 Attention: General Manager NB1- 287654.v4 19 12103/96 20. 0 0 or such other address as CITY or USER shall direct in writing. Service of any instrument or writing by mail shall be deemed complete forty -eight (48) hours after depositing the same in a United States mail depository. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of CITY and USER and their respective successors and assigns. NB1- 267654.V4 20 12/03196 ��� i • IN WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above. APPROVED AS TO FORM: CITY OF NEWPORT BEACH, a munigjpal corporation Burnham, ., City Attorney City Manager BIG CANYON COUNTRY CLUB, a private corporation oqn Hamiltoly esident ATTEST: °gym fJad&, LaVonne Harkless City Clerk NB1- 287654.V4 21 12!03196 ACKNOWLEDGEMENT OF CONSENT TO EXECUTION OF AGREEMENT The ORANGE COUNTY WATER DISTRICT hereby consents to the foregoing "AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND BIG CANYON COUNTRY CLUB REGARDING DELIVERY AND SALE OF GREEN ACRES PROJECT WATER TO BIG CANYON COUNTRY CLUB" entered into this day of ' 1996, by and between the CITY of Newport Beach, as the Retailer of Project Water, and Big Canyon Country Club, as the USER of Project Water, for delivery and sale of Project Water to Big Canyon Country Club, One Big Canyon Drive, Newport Beach, CA, for landscape irrigation. ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California L./C4 ,5' Clark Ide, Esq. General Counsel William R. Mills, Jr. �. General Manager 7 GeeFge- erne esley M. Bannister President NB1- 287654. V4 22 12/03/96 -01 q i i i i i i i v ; N v ; ; a' 0� `o N c o N m ° Fm V ooQ �moQ ` Q a O c o M : N Eao rc °o r'^ o d W N O¢ t Uau� w 6 - u_u,a L_, \_� \c���a LOO, N 5v !III !III :•III ! t l n !emu `-illl !III lIII i l if i I i� tl it - —i ill ill jll VIII illl i l If iIII .III I I I III III fl � II c� I I� ll II II II II II II If .I I' I r 36'CSG I I li it I Ii i1 ii I( II II I �II ICI r I ! I I -- - SCaV-- r • qp� III I� R/w CURB Ijl I� FuruRc PUMP STATION POINT OF II CONNECTION (P.00.) I — RECLAIMED WATER METER BIG CANYON COUNTRY CLUB PUMP STATION LEASE SITE FOR GREEN ACRES PROJECT f.I II �I ii I� I iX I RECLAIMED WATER PUMP STATION AND METER SITE EXHIBIT A -2 CITY OF NEWPORT BEACH PUBW %CMM C&AMme4r 64+WM A. USTA1gY DArE. wys A997 E EXHIBIT B -1 PROJECT WATER QUALITY CONTRACTURAL LIMITS Water Ouality Parameter * Maximum 3 -Year Average Limit Electrical Conductivity (EC.) Total Dissolved Solids (IDS) Sodium Adsorption Ratio (SAR) Adjusted Sodium Adsorption Ratio (SAR,di.) Bicarbonate (as HCO3 ion) Boron (B) Chloride (CI) Sodium (Na) 1,550 umhos/cm or 1.55 dS /m 900 mg/L 5.7 11.6 250 mg/L 0.50 mg/L 250 mg/L 200 mg/L Bacteriological A minimum of 95% of all health department required . samples collected at the treatment plant shall comply with the following: • Not exceed a median value of 2.2 coliforms per 100 ml for any 7 consecutive daily samples. • Not exceed 23 coliforms per 100 ml in daily samples. Electrical Conductivity (EC,) Limit at the Green Acres Treatment Plant ** Maximum 2 -Day Average 1,725 umhos /cm or 1.725 dS /m * ** Not to Exceed 1,775 umhos /cm or 1.775 dS /m * "3 -Year " shall be understood to mean three consecutive calendar years (i.e., January through December). " Average" shall be understood to mean the average concentration of any said parameter in Project Water as measured at the Orange County Water District's Green Acres Treatment Plant and the Irvine Ranch Water District's Michelson Water Reclamation Plant. Either plant can serve as a source for Project Water. Compliance with the defined parameter limits shall be determined on an annual basis immediately after all water quality results for the most recent calendar year of a given three -year period become available. "• EC limit in Project Water produced solely from the Green Acres Treatment Plant. This parameter shall be determined by averaging over a two -day period the EC measurements taken at the plant by Orange County Water District staff and confirmed by EC measurements taken at Big Canyon Country Club by its staff. sss EC limit in Project Water produced solely from the Green Acres Treatment Plant. Compliance with this limit shall achieved if Project Water does not exceed the limit on more than two occasions each month based upon EC measurements taken every two hours at the plant by Orange County Water District staff and confirmed by EC measurements taken at Big Canyon Country Clubby its staff. V17/97 • 0 EXHIBIT B -2 PROJECT WATER QUALITY GOALS Water Oualitv Parameter Electrical Conductivity (EC.) Total Dissolved Solids (TDS) Sodium Adsorption Ratio (SAR) Adjusted Sodium Adsorption Ratio (SARAdi.) Bicarbonate (as HCO3 ion) Boron (B) Chloride (Cl) Sodium (Na) * Maximum Annual Average Goal 1,500 umhos/cm or 1.50 dS /m 875 mg/L 5.5 11.3 240 mg/L 0.48 mg/L 240 mg/L 195 mg/L Bacteriological A minimum of 981/6 of all health department required samples collected at the treatment plant shall comply with the following: • Not exceed a median value of 2.2 coliforms per 100 ml for any 7 consecutive daily samples. • Not exceed 23 coliforms per 100 ml in daily samples. Electrical Conductivity (EC.,) Goal ** Maximum 2 -Day Average 1,675 umhos/cm or 1.675 dS /m * ** Not to Exceed 1,725 umhos/cm or 1.725 dS /m * "Annual " shall be understood to mean a calendar year (i.e., January through December). "Average" shall be understood to mean the average concentration of any said parameter in Project Water as measured at the Orange County Water District's Green Acres Treatment Plant and the Irvine Ranch Water District's Michelson Water Reclamation Plant. Either plant can serve as a source for Project Water. ** EC limit in Project Water produced from the Green Acres Treatment Plant and the Michelson Water Reclamation Pl ant. This parameter shall be determined by averaging over a two -day period the EC measurements taken at the plant supplying Project Water by water district staff and confirmed by EC measurements taken at Big Canyon Country Club by its staff. * ** EC limit in Project Water produced solely from the Green Acres Treatment Plant. EC measurements shall be taken every two hours at the plant by Orange County Water District staff and confirmed by EC measurements taken at Big Canyon Country Club by its staff 4/17/97 ! • PUMP STATION LICENSE AGREEMENT THIS PUMP STATION LICENSE AGREEMENT (this "Agreement ") is dated as of July ate(, 1997 by and between BIG CANYON COUNTRY CLUB, a private, non -profit mutual benefit corporation ( "Big Canyon "), and THE CITY OF NEWPORT BEACH, a municipal corporation ('Newport Beach"). RECITALS A. Big Canyon and Newport Beach are parties to that certain Third Amended and Restated Agreement (Green Acres Reclaimed Water Project End -User Agreement for Delivery and Sale of Reclaimed Water to Big Canyon Country Club) dated as of September 30, 1996 (the "End -User Agreement "). Pursuant to the terms of the End -User Agreement, Newport Beach must construct and maintain a pump station and any related structures (collectively, the "Pump Station ") on property owned by Big Canyon (the "Site ", which definition shall include all present and future irrigation systems owned by Big Canyon). In accordance therewith, Big Canyon desires to grant to Newport Beach certain limited rights over the Site in order to access the Pump Station. B. Newport Beach acknowledges that the continuous operation of the Pump Station is essential to the successful maintenance of Big Canyon's golf course at the Site. AGREEMENT NOW, THEREFORE, taking the foregoing Recitals into account and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. License Big Canyon hereby grants to Newport Beach a nonexclusive right of entry over and across the Site (the "License ") for the purposes of constructing, operating, maintaining, repairing and replacing the Pump Station. Big Canyon shall have the right to approve the location, exterior appearance and noise generation level of the Pump Station, which approval shall not be unreasonably delayed or withheld. It shall not be unreasonable for Big Canyon to withhold its consent to the location of the Pump Station if it materially interferes with the use or operation of the Site by Big Canyon or Big Canyon's successors or assigns, agents, employees, tenants, purchasers or any person or entity with whom Big Canyon has any business relationship, or any contractors, invitees, licensees, carriers or customers of any of the foregoing. 2. Term of License. Newport Beach's rights to use the License shall terminate on the earlier of (a) the date that Newport Beach removes the Pump Station from the Site, (b) within sixty (60) days of receipt by Newport Beach of a notice of NBl- 304012.V7 07/02/97 0 i default under this Agreement, if such default is not cured within such time, or (c) the date the term of the End -User Agreement ends, as such term may be extended pursuant to the terms of the End -User Agreement. 3. Location of Pump Station. This Agreement does not confer upon Newport Beach any right to locate the Pump Station on any portion of the Site except as shown on Exhibit A and except as set forth in Section 1 above. Newport Beach and its agents shall have absolutely no right to enter any structure constructed upon the Site except for the structure enclosing the Pump Station. 4. Right to Enter Site. Newport Beach and its agents shall exercise the rights granted under this Agreement at reasonable times during normal business hours and in a reasonable manner; provided, however, if the accessing of the Pump Station blocks driveways or otherwise interferes with traffic circulation, parking or the operation of the business located on the Site, then Newport Beach agrees to access the Pump Station at times when the business operating upon the Site is closed unless the Pump Station is experiencing a malfunction and /or an emergency situation is occurring. S. Damage to the Site. Neither Newport Beach nor its agents shall in the exercise of its rights under this Agreement cause any damage to the Site. If Newport Beach or its agents cause any damage to the Site in the exercise of its rights under this Agreement, including any damage to any landscaped area, Newport Beach shall cause the same to be repaired at Newport Beach's expense within ten (10) days of demand by Big Canyon. If Newport Beach fails to repair such damages within such period, Big Canyon may perform such repairs and obtain reimbursement from Newport Beach for the cost thereof. 6. Repair of Pump Station. Newport Beach shall cause the Pump Station to be incorporated into (a) the alarm system currently operated by Newport Beach for all other pump stations that it maintains, which system causes alarms to alert Newport Beach personnel whenever a pump station is experiencing problems, or (b) any such system that is adopted in the future by Newport Beach that provides notice to Newport Beach personnel that a certain pump station is experiencing problems. Newport Beach further covenants that it will respond to problems that the Pump Station is experiencing in accordance with Newport Beach's standard policies and procedures and within a period of time that is commensurate with the period of time that it takes Newport Beach to respond to the problems of all of the other pump stations that it maintains. Big Canyon acknowledges and agrees that, in the event.that more than one pump station is experiencing problems at the same time, Newport Beach will respond first to the problem that poses the greatest threat to the public. Notwithstanding the foregoing, Newport Beach covenants to make best efforts to ensure that Big Canyon will not be without Project Water for a period longer than 24 hours. 7. Maintenance of Pump Station. Newport Beach shall provide scheduled maintenance to the Pump Station that is commensurate with the scheduled maintenance Nei- 3MI2.V7 2 07MM 0 0 that Newport Beach provides to the other pump stations that it operates. Newport Beach shall (a) cooperate with Big Canyon in designing a maintenance schedule, (b) keep Big Canyon informed of the maintenance schedule and any variations therefrom, and (c) make every effort to avoid having to shut down the Pump Station during such maintenance. Big Canyon shall cooperate with Newport Beach in designing a maintenance schedule. 8. Indemnification: Remediation. (a) Newport Beach shall indemnify, defend and hold harmless Big Canyon and its successors and assigns, partners, members, principals, officers, directors, shareholders, direct and indirect agents, employees and representatives from and against all claims, suits, causes of action, injuries, damages, losses and liabilities of any kind whatsoever, regardless of by or against whom caused or instigated, to the extent arising directly or indirectly out of (i) Newport Beach's construction, operation, maintenance, repair, replacement or other use of the Pump Station and /or Site; (ii) the presence on the Site of the Pump Station; (iii) the presence on the Site of Newport Beach or its agents, employees, contractors, carriers, invitees or licensees; or (iv) Newport Beach's failure to provide Project Water to the Site as provided herein. (b) If in the process of exercising any rights under this Agreement, Newport Beach and /or its agents cause any Hazardous Materials to be released onto the Site, Newport Beach shall promptly (but in no event more than ten (10) days after written demand by Big Canyon) commence and diligently prosecute to completion the remediation of the same under all applicable laws, and indemnify, defend and hold harmless Big Canyon and its successors and assigns, partners, members, principals, officers, directors, shareholders, direct and indirect agents, employees and representatives from and against all claims, suits, causes of action, injuries,- damages, losses and liabilities of any kind whatsoever, regardless of by or against whom caused or instigated, arising directly or indirectly out of such release of Hazardous Materials. If Newport Beach fails to timely remediate such contamination, Big Canyon shall have the right to exercise any self -help remedies and obtain reimbursement from Newport Beach for the cost of such self -help remedies. (c) As used in this Agreement, the term "Environmental Laws" means all federal, state or local laws, ordinances, regulations, orders and directives pertaining to Hazardous Materials on, about or adjacent to any portion of the Site, or generally dealing with the public health and safety and the protection of the environment. As used in this Agreement, the term "Hazardous Materials" shall mean any oil or petrochemical products, pcbs, asbestos, urea formaldehyde, salts, flammable explosives, radioactive materials, hazardous wastes, toxic, corrosive, mutagenic or pathogenic substances or related materials, including, without limitation, any substances defined as or included in the definition of "hazardous substances;' "hazardous wastes;' "hazardous materials," "toxic substances" or any similar term under any applicable Environmental Law. tali- 3W12.v7 3 07102M 0 • 9. Costs of Enforcement. If any legal or equitable action or proceeding is instituted to enforce or interpret any provision of this Agreement, the prevailing party in such action shall be entitled to recover from the losing party all of its costs, including court costs and reasonable attorneys' fees. 10. Captions. The paragraph headings or captions used herein are for convenience only and are not a part of this Agreement and do not limit, define or amplify the scope or intent of the provisions hereof. 11. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California without reference to any conflicts or choice of law principles. 12. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute one and the same document. Any signature page of this Agreement may be detached from any counterpart of this Agreement and re- attached to any other counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. 13. Entire Agreement. This Agreement and the agreements referenced herein contain the entire agreement between the parties relating to the subject matter thereof. Any oral or other written representations or statements concerning the subject matter thereof shall be of no force or effect. 14. Successors. This Agreement shall inure to and bind Big Canyon and its successors and assigns in title to the Site and each and every portion thereof. Newport Beach shall have no right to transfer or assign its rights or obligations under this Agreement. Ias1-3W11 7 4 07/02!97 0 C� IN WITNESS WHEREOF, the parties herein have executed this Agreement as of the date first above written. CITY OF NEWPORT BEACH, a municipal corporation Robert Burnham, Esq. City Attorney ATTEST: LaVonne Harkless City Clerk BIG CANYON COUNTRY CLUB, a private corporation NBl.3Ml2.V7 S -1 07MV97 0 u EXHIBIT A LOCATION OF PUMP STATION [See Attached] NBI-3 l2.v7 A -1 mmem •III III "1 � !III III "1 i• ! li I � I I ; � qu x H , I SCPIFr 7'' 40 Yf 111 i II I� � 11 1 11!u R/W C.41 i j 11 �I ' II II III Ira CURB -!-4 — — 14- I - --y- li-- -�-_ - -- - - 144'CMP -ii �- � I II 11 III I;, .III Il lIl lti II I I III I _ FUTURE PUMP STATION RECLAIMED -WATER METER - -- I II I 36-CSG i l II II I II I 1111 II I �I I� I .III I I I I I i 1 II 1 I I I R/W ® RECLAIMED WATER I I ( I PUMP STATION i 1 I) I I I I ix 1 AND METER SITE BIG CANYON COUNTRY CLUB CITY OF NEWPORT BEACH PUMP STATION LEASE SITE PUBLIC WORKS DEPARTMENr FOR GREEN ACRES PROJECT DRAVY, ACASTAWN DAE, OCTOBER army SECOND AMENDED AND RESTATED AGREEMENT GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO BIG CANYON COUNTRY CLUB THIS SECOND AMENDED AND RESTATED AGREEMENT is made and entered into as of this 30th day of September, 1996 by and between the City of Newport Beach, a Municipal Corporation, hereinafter referred to as "CITY", and the Big Canyon Country Club, a private, non - profit mutual benefit corporation, hereinafter referred to as "USER RECITALS A. With the exception of certain limited areas served by the Irvine Ranch Water District ( "IRWD "), CITY is the exclusive retail water purveyor within CITY's boundaries providing water for residential, industrial, commercial, public agency, agricultural and other uses. CITY produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced from the Orange County groundwater basin, which basin is managed by the Orange County Water District ( "OCWD "). B. USER is a private corporation within the jurisdictional and service boundaries of CITY, and currently purchases potable water from CITY for its own use at Big Canyon Country Club, One Big Canyon Drive, Newport Beach, California. C. CITY has agreed to buy reclaimed water from OCWD and resell such reclaimed water pursuant to the terms and conditions specified in that certain agreement entitled "Agreement Between Orange County Water District and City of Newport Beach Regarding Distribution and Sale of Green Acres Project Water" dated as of January 16, 1991, and as it may be subsequently amended, hereinafter referred to as xsi- 287654.vi 1 11115/96 • 0 "Retailer Agreement ". City executed the Retailer Agreement for the purpose of seeking to provide its present and future residents with a supplemental source of water to meet their needs and to assist in the statewide objective of conserving and utilizing to the maximum degree possible the water of the People of the State of California, which water shall be recovered from the operation known as the "Green Acres Project" for all possible beneficial uses. D. The Green Acres Project is being planned for extension into CITY's service area for the purpose of conserving and beneficially reusing wastewater from the County Sanitation Districts of Orange County or the IRWD, such wastewater having been treated by OCWD or IRWD to standards established by the State Health Department and transported and sold by OCWD as "Project Water" to CITY to be resold to Project Water customers. E. USER desires to purchase Project Water from CITY for allowable, suitable nonpotable uses, specifically landscape irrigation of its golf course and certain related facilities (hereinafter referred to as "SITE"), in lieu of potable water currently purchased from CITY, and CITY is willing to sell Project Water to USER. AGREEMENT NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions of this Agreement, the parties agree as follows: 1. TRANSMISSION PIPELINE FACILrI'Y It is the intent of OCWD to construct a transmission pipeline as part of the Green Acres Project that will convey Project Water to various locations within CITY boundaries, including the SrM. All Project Water will originate from either the OCWD Green Acres Project Water Treatment Facility or a similar NBl- 2V654.V1 2 111151% 0 0 facility operated by IRWD. OCWD owns the main transmission pipeline facility and service line which serves USER upstream of CTTY's reclaimed water service meter vault, which facility and line shall hereinafter be referred to as "Project Facilities ". CM owns, operates and maintains all reclaimed water service meter vault piping, by -pass line piping, service meter vault, pump station, service meter and control valves, which facilities shall hereinafter be referred to collectively as "City Facilities ". USER owns and maintains the pipelines, backflow preventers, warning signs, warning tags and all appurtenances downstream of CITY's reclaimed water service meter vault, which facilities shall hereinafter be referred to as "On -Site Facilities" and are more fully set forth on the drawings attached hereto as Exhibit A -1 (to be attached within sixty (60) days of the execution of this Agreement). The point where USER's piping connects to the downstream end of CITY'S reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection". The Point of Connection will be in the Jamboree Road parkway near USER's maintenance yard entrance approximately 1,300 feet northerly of San Joaquin Hills Road, as shown on Exhibit A -2 attached hereto (to be attached within sixty (60) days of the execution of this Agreement). That portion of the Project Facilities and City Facilities located within CITY's boundaries will be operated and maintained by CITY as a contractor for OCWD for the purpose of distributing Project Water to be purchased from CM by USER. USER shall also own and maintain all devices relating to USER's on -site potable water system including, but not limited to, drinking fountain covers, backflow preventers and identification tags. USER shall be responsible for all energy costs associated with the pump station owned by CM but located on USER's property, and USER and CITY shall execute a separate agreement in which USER will grant to CITY an easement or NBI- M7654NI 3 mism6 license across USER's property to provide reasonable access to the pump station. Such agreement will be attached hereto within sixty (60) days of the execution of this Agreement as Exhibit C. In addition, within sixty (60) days after the execution of this Agreement, USER shall provide to CITY information with respect to USER's use of water, fertilizers, water supplements and the costs thereof for the prior five (5) year period. Within sixty (60) days of beginning to purchase Project Water from CITY under this Agreement, USER shall provide CITY with the same information for the period between (a) executing this Agreement and (b) the purchase of Project Water from CITY. 2. RULES AND REGULATIONS USER agrees that during the term of this Agreement and any extension thereof, USER shall comply with all rules and regulations promulgated now and in the future by CTI'Y relative to the sale and use of Project Water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of Project Water, which rules shall hereinafter be referred to as "Project Rules ", provided that CITY shall have provided USER with a copy of such Project Rules and shall provide USER with any modifications or additions thereto within ten (10) days of the promulgation of such modifications or additions. In the event that CITY and /or OCWD or any other governmental agency shall promulgate any rule or regulation that shall cause the total cost to USER for the use of Project Water to exceed the total cost to USER if it had used potable water instead of Project Water, USER may terminate this Agreement upon thirty (30) days notice to C= and as set forth in Section 14 of this Agreement. For purposes hereof, the total cost to USER shall include all costs and expenses of any kind or nature directly or indirectly associated with the use of Project Water including, without limitation, the rate charged for such use NB1- 287654.V1 4 11115/96 pursuant_to this Agreement and the incremental costs incurred to comply with this Agreement. 3. QUANTITY OF WATER TO BE PURCHASED BY USER; INSTANTANEOUS MAXIMUM FLOW CITY agrees to supply Project Water to USER and USER agrees to purchase Project Water. The anticipated average annual Project Water usage at the Site is two hundred ninety (290) acre -feet. Project Water flow demands at the SITE's service shall not exceed an instantaneous maximum flow of two thousand two hundred (2,200) gallons per minute. CITY's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. In the event that the current use of the property discontinues or is modified, USER may modify or terminate this Agreement, as applicable, subject to the conditions set forth in Section 14 of this Agreement. If at any time during construction or operation of the On -Site Facilities, real or potential hazards or evidence of such hazards are found to exist, CITY reserves the right and' has the authority to take action to insure that the situation be remedied and to protect the public health, as is further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of CITY to terminate Project Water service to SITE. 4. QUALITY OF WATER TO BE PURCHASED BY USER; CITY agrees that all Project Water delivered to USER from the Project Facilities pursuant to this Agreement shall conform to (a) the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, State and local health departments, and Federal, State and county agencies having jurisdiction to fix minimum standards for the quality of NB1- 287654.V1 5 11/15/96 water with respect to USER's anticipated use, which Board, health departments and agencies shall hereinafter be referred to as "Regulatory Agencies'; and (b) such minimum standards set by Regulatory Agencies as will prevent the Project Water from causing any damage to USER's property and all plants and vegetation located thereon. Furthermore, CITY agrees that Project Water delivered to USER pursuant to this Agreement shall conform to the requirements set forth in Exhibit B attached hereto (to be attached within sixty (60) days of the execution of this Agreement). If the Project Water fails to conform to the above requirements, CITY covenants that CITY will terminate the flow of Project Water to the SITE and provide potable water in its place, and USER may terminate this Agreement if such requirements are not met within thirty (30) days. CITY understands and acknowledges that even a minor interruption in water service will have a significant impact upon the SITE and may result in significant interference and damage to the conduct of USER's business. Except as provided in the final sentence of Section 3 above, any loss, cost, damage or expense resulting, directly or indirectly, from the cessation or termination of service shall be borne by CITY. In addition to the foregoing, CITY covenants that all Project Water delivered to USER pursuant to this Agreement will not (x) emit any offensive odor, (y) cause undesirable change to the environmental makeup of any of the lakes found on USER's property, including any offensive change to the odor, algae level, color or wildlife composition of such lakes, or (z) cause damage to USER's property or grass, plants or other vegetation located thereon, which damage shall include excessive salt buildup. In the event that USER shall decide, in USER's reasonable judgment, that any of (x), (y), or (z) above exists, CITY and USER agree to use the following procedure: (1) USER shall notify CITY of the problem. (2) CITY shall, within three (3) days of such notification, investigate the problem. NB1- 287654.V1 6 11/151% 0 0 (3) If CIW agrees that a problem exists, CITY will attempt to remedy the problem. If CITY is unable to remedy the problem within thirty (30) days after CITY receives notice from USER, CITY will terminate the flow of Project Water to the SITE and provide potable water in its place. (4) If CITY does not agree that a problem exists, CITY will notify USER of the same within three (3) days after CITY receives notice from USER. CITY and USER will meet to discuss the issue within seven (7) days of such notification from CITY. (5) If CITY and USER are still unable to agree whether a problem exists, CITY and USER shall together select a mediator. CITY and USER shall then present their views to the mediator, and the mediator shall decide whether a problem exists. CITY and USER agree to be bound by the mediator's decision; however, CITY and /or USER may pursue the matter through arbitration as provided in Section 18 hereof. (6) If the mediator decides that a problem exists, the mediator shall proscribe the course of action CITY must take to remedy the problem. CITY must attempt immediately thereafter to, remedy the problem in the manner proscribed. If CITY is unable to remedy the problem within thirty (30) days of receipt by CITY of the proscribed course of action from the mediator, or within such longer period as deemed reasonable by the mediator, CITY will terminate the flow of Project Water to the SITE and provide potable water in its place. . (7) If the mediator decides that no problem exists, USER must continue to accept Project Water as contemplated herein. Ns1- 2V&%.v1 7 11n51% 0 0 The replacement of Project Water by potable water as provided above shall be on a temporary basis only; once CITY and USER agree that the situation has been remedied, CITY shall provide Project Water in the place of potable water on the SITE. If there is disagreement as to whether the situation has been remedied, CITY and USER shall follow the procedure outlined above to resolve such dispute. Project Water shall be delivered on a continuous basis at a pressure of not less than ninety pounds per square inch (90 psi) for demands under thirteen hundred gallons per minute (1,300 gpm), and not less than eighty pounds per square inch (80 psi) for demands from thirteen hundred one gallons per minute (1,301 gpm) to two thousand two hundred gallons per minute (2,200 gpm) at the Point of Connection between the hours of 8:00 p.m. to 6:00 a.m. USER shall not exert a demand for Project Water between the hours of 6:00 a.m. and 8:00 p.m. unless USER'S staff is present to ensure that the public does not come into contact with Project Water. 5. PRICE OF PROJECT WATER CITY acknowledges the concerns of USER regarding (a) the potential need to add or adjust fertilizers and /or water supplements to the Project Water in order to maintain high quality fairway turf, and (b) the potential need to use additional amounts of water in order to offset the increased amounts of nutrients in the Project Water. CITY desires to comply with State law by only requiring USER to use reclaimed water in its irrigation operations if CITY supplies Project Water to USER at a cost less than or comparable to the cost of potable water. Therefore, during the entire . term of this Agreement, the price to be paid by USER for Project Water delivered by CITY shall not exceed the lower of (a) NBI- 287654.V1 8 11/15/96 eighty percent (80 %) of the CM's retail rate for potable water, excluding any surcharges that are based on usage of potable water, as such rate is established by resolution of the City Council and enforced on the date of delivery of the Project Water, or (b) the lowest rate then offered by CITY to any purchaser of reclaimed water, whether such rate is determined as a percentage of C='s retail rate for potable water,or otherwise. The retail rate for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least ten (10) days prior to the adoption of a resolution establishing the water rate of CITY and /or modifying the purchase price of Project Water, CITY shall give written notice to USER and. provide notice as prescribed in the City Municipal Code of a public hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. If, despite the reduced rate charged USER for Project Water in the preceding paragraph, USER believes that unreimbursed incremental costs have been incurred as a result of the use by USER of Project Water that would not have been incurred if USER had used potable water, the following. steps shall be taken: Within six (6) months after the end of this two (2) year period, and within six (6) months after the end of each two (2) year period thereafter, USER shall submit to CITY an itemized account of the costs expended during the previous two years that were necessary to accommodate the use of Project Water on the SITE, including, without limitation, costs of fertilizers, water supplements, and /or other additives, costs of construction of any special systems, such as a gypsum- injection system, and costs of excess Project Water that was needed to offset the increased amounts of nutrients in the Project Water. CITY shall review this information and, with the help of landscape and irrigation specialists, shall determine which costs may be solely attributed to USER's use of Project Water as opposed to potable water on the SITE. If USER disagrees as to CTI'Y's determination, CITY NB1- 287es4.v1 9 11 /19% 0 0 and USER shall select a mediator to settle the dispute as set forth in Section 4(5) herein. CITY shall then make an adjustment to the rate for Project Water that will (a) reimburse USER for the costs incurred during the previous two (2) years that are attributed solely to the use of Project Water as opposed to the use of potable water, and (b) compensate USER for the costs that are anticipated to be incurred during the next two (2) years that are attributed solely to the use of Project Water as opposed to potable water. The adjustment described in the previous sentence shall be to the extent necessary for CITY to comply with State law that requires CITY to provide Project Water to USER at a cost, including all expenses associated therewith, that is less than or comparable to the cost of potable water. USER and CITY may enact a formal process that implements the intent of this paragraph. 6. METERING AND MEASUREMENT OF FLOWS USER agrees that at locations where irrigation water is used exclusively, CITY shall maintain, at its own expense, a control valve or valves and a meter for the purpose of measuring the quantity of Project Water delivered pursuant to the terms of this Agreement from CITY to USER at the Point of Connection where such water is delivered to USER. CITY or a designated representative of CITY shall periodically read the service meter and record usage of Project Water onto a schedule. 7. PAYMENT FOR PROJECT WATER CITY shall invoice USER for the price of the Project Water purchased by USER as part of CITY's regular billing cycle. Said invoices shall be paid within nineteen (19) days of the billing date. CITY retains the right to change billing cycles and due dates as necessary upon sixty (60) days prior written notice to USER, so long NBI- 2V654.v1 10 11/15196 as such change is consistent with formally adopted City-wide practices and procedures and State law. 8. LIMITATION OF USE USER understands and agrees that Project Water delivered from OCWD's Project Facilities pursuant to the terms hereof has restricted uses, and USER agrees to use the Project Water only upon the property of USER for the irrigation of its golf course and related facilities and only for these uses. 9. COVENANTS, REPRESENTATIONS AND WARRANTIES CITY hereby covenants as follows: (a) There will be sufficient Project Water to meet all of USER's irrigation needs with respect to the SPTE. (b) All actions taken by CITY with respect to Project Water, Project Facilities and City Facilities have complied and will comply with all regulations promulgated by all Regulatory Agencies and all other applicable laws. (c) The water quality requirements for Project Water during the term(s) of this Agreement will be defined in Exhibit B attached hereto (to be attached within sixty (60) days of the execution of this Agreement). (d) CITY will provide USER with all engineering support requested by USER, without charge, including the assistance of CITY engineers N331- 297654.V1 - 11 11115196 • 0 and other staff, to assist in the review of USER's irrigation system redesign for the purposes contemplated herein. (e) At CTTY's cost, CITY will make presentations to USER, USER's club members and related homeowners' associations with respect to the Green Acres Project and Project Water. (f) In the event that CITY is in breach or default under this Agreement, at USER's election, CITY shall assign to USER all of its rights and remedies under the Retailer Agreement. CITY hereby represents and warrants as follows: (a) USER may use potable water to irrigate putting greens, the perimeter of selected fairways located adjacent to residences, and elsewhere on the SITE as agreed to by USER and CITY and within acceptable State Health Department standards. (b) OCWD is not a party to any agreement between CITY and a user of Project Water. 10. INDEMNIFICATION CITY agrees to protect, indemnify, defend, save and hold harmless USER, its directors, agents and employees from and against any and all loss, liability, expense or damage of any kind or nature and from any suits, claims or demands, including (a) all consequential damages; (b) all damages to any natural resources, and the costs of any required or necessary repair, clean up, response cost, or detoxification of the SITE or any portion thereof, and the preparation and implementation of any closure, remedial or other required plans; and (c) all costs xai- 297654NI 12 nnsroc 0 0 and expenses incurred in connection with clauses (a) and (b), including all attorneys' fees and expenses, whether in suit or not (such loss, liability, expense or damage, including clauses (a), (b) and (c) above, shall collectively be referred to herein as "Damages "), which arise directly or indirectly out of (x) the use by USER of the Project Water as opposed to potable water as contemplated herein, (y) the existence or alleged existence of any Hazardous Substances (as defined below) in the Project Water, or (z) the failure to remove any Hazardous Substances from the Project Water, unless such suit, claim or demand is caused primarily by the gross negligence or willful misconduct of USER, its directors, agents and employees, or the grossly negligent operation, maintenance or repair by USER of On -Site Facilities required to be operated, maintained or repaired by USER pursuant to this Agreement. The foregoing indemnity shall apply to any residual contamination on, under or about the SITE, as well as claims of any neighboring property owners or occupants, and to any contamination of any property or natural resources, arising from the Project Water. Upon receiving knowledge of any suit, claim or demand asserted by a third party that USER believes is covered by this indemnity, USER shall give CITY notice of the matter and an opportunity to defend it, at CITY's cost and expense, with legal counsel satisfactory to USER. USER may also require CITY to so defend the matter. CITY will pay all fees or penalties imposed by any Regulatory Agency or any other governmental authority for any violation of any code, regulation or law with respect to the transportation, use or chemical composition of the Project Water. The obligations of CITY under this Section 10 shall survive the expiration or termination of this Agreement. CITY acknowledges that excess water from USER irrigation operations and from takes on the SITE drain into the Upper Newport Bay, and that once USER begins to use Project Water for irrigation purposes, any excess Project Water will drain into the Upper Newport Bay as well. CITY agrees to indemnify, defend, save and hold harmless USER, its directors, agents and employees from and NB1- 287654.V1 13 11115/96 0 against any and all Damages which arise directly or indirectly out of such drainage of Project Water into the Upper Newport Bay as well as any modification or termination of USER'S right to allow its excess water to drain into the Upper Newport Bay when the modification or termination is required because of USER'S use of Project Water as contemplated herein. As used herein, "Hazardous Substances" shall mean (a) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Law (as defined below) as a "hazardous substance ", "hazardous material', "hazardous waste ", "contaminant" or any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity"; and (b) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment. "Environmental Law" shall mean shall mean any and all present and future Federal, state and local laws (whether under common law, statute or otherwise), ordinances, regulations, permits, guidance documents, policies, and any other requirements of governmental authorities relating to health, safety, the environment or to any Hazardous Substances. 11. PERMITS This Agreement is conditioned upon OCWD and CITY obtaining the necessary permits relating to the use of Project Water for landscape irrigation. All costs of obtaining such permits shall be borne by CITY. CITY agrees to file in USER's name, with USER's reasonable cooperation, any and all applications and to NBl- M654.vi 14 nnsr% 0 undertake such proceedings as may be necessary to enable OCWD, CITY and USER to carry out the undertaking described herein, and to pursue such applications and proceedings in good faith and with due diligence, including any application required to be issued to OCWD by Regulatory Agencies.. USER understands and agrees that USER must comply with the regulations set forth in permits if such permits apply to USER, provided that such compliance by USER shall not materially increase the cost of Project Water or unreasonably interfere with USER's golf course and related operations. 12. INTENTIONALLY DELETED 13. CONDITIONS PRECEDENT (a) This Agreement is conditioned upon (i) USER and OCWD executing by December 2, 1996 that certain Agreement between Orange County Water District and Big Canyon Country Club Regarding Design and Construction of Reclaimed Water Retrofit at Golf Course Facility; and (ii) USER and CITY executing by December 2, 1996 that certain Loan Agreement for the Design, Construction and Retrofit of Big Canyon Country Club's Irrigation System. (b) This Agreement is conditioned upon OCWD's completing and making operational the Green Acres Project by July 1, 1998, including the following: (a) the transmission pipeline is extended to the Site; (b) OCWD makes Project Water available for sale; and (c) all necessary permits, certificates and approvals are issued by all Regulatory Agencies having jurisdiction over the construction and operation of water reclamation facilities and over the production, NBI- 287654.v1 15 111151% 0 f distribution, sale and use of Project Water. This Agreement is further conditioned upon (y) OCWD's acquiring by July 1, 1998, acceptable right -of -way access from the Project Facilities to the SITE for transportation pipeline purposes, and (z) OCWD and CITY gaining by July 1, 1998, the approval by all federal, state and local agencies having regulatory jurisdiction or grant- funding responsibilities with respect to the Project Facilities. If the conditions specified in this Section 13 are not met within the given time limits, USER may cancel this Agreement. (c) Within three (3) years from the date the conditions specified in items (a), (b), (c), (y) and (z) above have been satisfied, the redesign of USER's irrigation system to accommodate Project Water shall have been completed and USER shall have begun purchasing Project Water from CITY as provided herein. 14. CONDITIONS SUBSEQUENT In the event that CITY is unable to deliver Project Water through Project Facilities, CITY reserves the right to provide USER with a minimum of seventy- two (72) hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. CITY shall provide USER with a minimum of twenty-four (24) hours advance notice when resumption of the delivery of Project Water to USER's SITE is expected. In the event CITY is unable to deliver Project Water to USER or defaults under this Agreement, CITY must provide USER with potable water at the potable water rate or reclaimed water at the Project Water rate, subject to the right of CITY to determine allocation of all water, both Project Water and potable, in the event of emergencies. If USER terminates this Agreement as authorized under the terms of this Agreement, CITY must contemporaneously provide USER with potable water in the place of NBl- 287654. V 1 16 11/15/96 • • Project Water. Furthermore, in the event that OCWD ceases producing and distributing Project Water or in the event that the treatment criteria imposed by any Regulatory Agencies exceeds those existing as of the date of this Agreement, either CITY or USER shall have the option to cancel this Agreement. CITY shall convert service on the SITE back to a potable water system(s) at no expense to USER if there is a cessation in service or this Agreement is canceled or terminated for any reason (other than the expiration of the term pursuant to Section 16 below), as well as converting back to Project Water if service is to be restored pursuant to the terms of this Agreement. 15. LIMITATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of Project Water from the Green Acres Project beyond that usable by USER. CITY reserves the right to enter into contracts with others for the sale of any Project Water so long as such contracts do not interfere with CITY's ability to supply sufficient Project Water to meet USER's requirements. 16. TERM The initial term of this Agreement shall be ten (10) years from the day and year first above written. USER shall have the option to extend said initial term for two (2) additional ten (10) year terms, provided that USER gives CITY written notice of such election at least six (6) months prior to the expiration of the previous term. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. tall- M654.v1 17 11115/96 • 17. ASSIGNMENT 11 This Agreement and the rights and benefits of CITY hereunder may be assigned and transferred by CITY to any entity which assumes the responsibilities and obligations of CITY for the sale and distribution of Project Water to USER, provided, however, that CITY shall remain fully liable for all of the responsibilities and obligations of CITY hereunder. This Agreement and the rights and benefits of USER hereunder shall not be assigned or transferred by USER without the written consent of CITY, which consent shall not be unreasonably withheld. 18. ARBITRATION (a) CITY and USER hereby agree that all controversies and claims arising directly or indirectly out of this Agreement shall at the written request of any party be arbitrated pursuant to the applicable rules of the American Arbitration Association. The arbitration shall occur in the State of California. Judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The Federal Arbitration Act shall apply to the construction and interpretation of this arbitration agreement. (b) A single arbitrator shall have the power to render a maximum award of one hundred thousand dollars ($100,000). When any party files a claim in excess of this amount, the arbitration decision shall be made by the majority vote of three (3) arbitrators. No arbitrator shall have the power to restrain any act of any party. (c) No provision of subparagraph (a) shall limit the right of any party to exercise self -help remedies or to obtain any provisional or ancillary Nsl- 2876U.v1 18 11/15/% remedies (including, but not limited to, injunctive relief) from a court of competent jurisdiction. The institution and maintenance of any remedy permitted above shall not constitute a waiver of the rights to submit any controversy or claim to arbitration. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall lie applicable in any arbitration proceeding. 19. NOTICES All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either 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: CITY: City, of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: City Manager USER: Big Canyon Country Club One Big Canyon Drive Newport Beach, CA 92660 Attention: General Manager or such other address as CITY or USER shall direct in writing. Service of any instrument or writing by mail shall be deemed complete forty-eight (48) hours after depositing the same in. a United States mail depository. ND1- W654.v1 19 11115196 ! • 20. SUCCESSORS This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of CITY and USER and their respective successors and assigns. NBI- 287654.vi 20 11/i5/96 i 1 • IN WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above. APPROVED AS TO FORM: CITY OF NEWPORT BEACH, a municipal corporation /Robert Burnham, Esq. City Attorney BIG CANYON COUNTRY CLUB, a private corporation 4 siamiltdent ATTEST: La onne Harkless City Clerk NB1- 287654.V1 21 11/15/96 FO 'CA r,S6 9T :VT G66T- TT -8dti Z0'd 7di01 Dveama PHILIP L. ANTHONY WE$ BANNISTER KATHRYN L. BARR JOHN V. FONLEY DANIEL E. WISE` LAWRENCE P. KRAEMER JR. GEORGE OSBORNE LANGDON W. OWEN IRV PICKLER ARNT G.'BUD' OUIST March 28, 1997 51NG�_af�3�^ ORANGE COUNTY WATER DISTRICT Nancy L. Shackleton C'Melveny & Myers LLP 610 Newport Center Drive Suite 1700 Newport Beach, CA 92660 -6429 offkats . WES BANNISTER Prasmot RM Vke E. GP M ARM G. 'BUD' OUI$T SeMnd Yke PMda t WLL,UAM A. MILLS JR. en IMeneget G& WK1 Re. Second Amended and Restated Agreement Between Big Canyon County Club and City of Newport Beach Regarding Green Acres Water Project Dear Nancy: As we discussed on March 28, 1997, the Orange County Water District never executed the Second Amended and Restated Agreement because it had received the Third Amended and Restated Agreement before the Second Amended and Restated Agreement went to its Board. The'Third Amended and Restated Agreement was submitted to the Board and signed and the Second Amended and Restated Agreement was not because it.appeared to bQ 4,` ng.further interest to the parties. If you need anything further from Us, please advise. Very truly yours, Clark F. Ide General Counsel CFl /mak cc: Chuck Steinbergs Barbara White c,4&=urr&r Abkpmy*n.pp P.O. BOX 8300, FOUNTAIN VALLEY, CA 92728.8300 . 10500 ELLIS AVENUE, FOUNTAIN VALLEY, CA 92708 TELEPHONE (714) 37a -3200 FAX (714) 378.9373 20'd #020£7V96 # *6665b£860 01 EN dJJ SZIBAW 8 ANEIn-1314.0 W08A £T:£T L66T- TT -bdtl AMENDED AND RESTATED AGREEMENT GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO BIG CANYON COUNTRY CLUB THIS AMENDED AND RESTATED AGREEMENT is made and entered into as of this 30th day of September; 1996 by. and between the City of Newport Beach, a Municipal Corporation, hereinafter referred to as "CITY", and the Big Canyon Country Club, a private, non -profit mutual benefit corporation, hereinafter referred to as "USER". RECITALS A. With the exception of certain limited areas served by the Irvine Ranch Water District ( "IRWD "), CITY is the exclusive retail water purveyor within C IY's boundaries providing water for residential, industrial, commercial, public agency, agricultural and other uses. CITY produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced from the Orange County groundwater basin, which basin is managed by the Orange County Water District ( "OCWD "). B. USER is a private corporation within the jurisdictional and service boundaries of CITY, and currently purchases potable water from CITY for its own use at Big Canyon Country Club, One Big Canyon Drive, Newport Beach, California. C. CITY has agreed to buy reclaimed water from OCWD and resell such reclaimed water pursuant to the terms and conditions specified in that certain agreement entitled "Agreement Between Orange County Water District and City of Newport Beach Regarding Distribution and Sale of Green Acres Project Water" dated as of January 16, 1991, and as it may be subsequently amended, hereinafter referred to as "Retailer Agreement ". City executed the Retailer Agreement for the purpose of seeking tasi- sazsai.vz// 1 �auivc _..— OCWDDOC• J� �(D I I -173 FUGIAR /OCWDDOC. STAR NO. to provide its present and future residents with a supplemental source of water to meet their needs and to assist in the statewide objective of conserving and utilizing to the maximum degree possible the water of the People of the State of California, which water shall be recovered from the operation known as the "Green Acres Project" for all possible beneficial uses. D. The Green Acres Project is being planned for extension into CITY's service area for the purpose of conserving and beneficially reusing wastewater from the County Sanitation Districts of Orange County or the IRWD, such wastewater having been treated by OCWD or IRWD to standards established by the State Health Department and transported and sold by OCWD as "Project Water' to CITY to be resold to Project Water customers. E. USER desires to purchase Project Water from CITY for allowable, suitable nonpotable uses, specifically landscape irrigation of its golf course and certain related facilities (hereinafter referred to as "SITE "), in lieu of potable water currently purchased from CITY, and CITY is willing to sell Project Water to USER. AGREEMENT NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions of this Agreement, the parties agree as follows: 1. TRANSMISSION PIPELINE FACILITY It is the intent of OCWD to construct a transmission pipeline as part. of the Green Acres Project that will convey Project Water to various locations within CTTY boundaries, including the SITE. All Project Water will originate from either the OCWD Green Acres Project Water Treatment Facility or a similar facility operated by IRWD. OCWD owns the main transmission pipeline facility NB1- 282581.V2 2 10/15/96 and service line which serves USER upstream of CTTY's reclaimed water service meter vault, which facility and line shall hereinafter be referred to as 'Project Facilities ". CITY owns, operates and maintains all reclaimed water service meter vault piping, by -pass line piping, service meter vault, pump station, service meter and control valves, which facilities shall hereinafter be referred to collectively as "City Facilities ". USER owns and maintains the pipelines, backflow preventers, warning signs, warning tags and all appurtenances downstream of CTTY's reclaimed water service meter vault,. which facilities shall hereinafter be referred to as "On -Site Facilities" and are more fully set forth on the drawings attached hereto as Exhibit A -1 (to be attached within sixty (60) days of the execution of this Agreement). The point where USER's piping connects to the downstream end of CITY's reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection ". The Point of Connection will be in the Jamboree Road parkway near USER's maintenance yard entrance approximately 1,300 feet northerly of San Joaquin Hills Road, as shown on Exhibit A -2 attached hereto (to be attached within sixty (60) days of the execution of this Agreement). That portion of the Project Facilities and City Facilities located within CITY's boundaries will be operated and maintained by CITY as a contractor for OCWD for the purpose of distributing Project Water to be purchased from CITY by USER. USER shall also own and maintain all devices relating to USER's on -site potable water system including, but not limited to, drinking fountain covers, backflow preventers and identification tags. USER shall be responsible for all energy costs associated with.the pump station owned by CITY but located on USER's property, and USER and CITY shall execute a separate agreement in which USER will grant to CITY an easement or license across USER's property to provide reasonable access to the pump station. N1B1- 2M8I.v2 3 10115M ._. Such agreement will be attached hereto within sixty (60) days of the execution of this Agreement as Exhibit C. In addition, within sixty (60) days after the execution of this Agreement, USER shall provide to CITY information with respect to USEws use of water, fertilizers, water supplements and the costs thereof for the prior five (5) year period. Within sixty (60) days of beginning to purchase Project Water from CITY under this Agreement, USER shall provide CITY with the same information for the period between (a) executing this Agreement and (b) the purchase of Project Water from CITY. 2. RULES AND REGULATIONS USER agrees that during the term of this Agreement and any extension thereof, USER shall comply with all rules and regulations promulgated now and in the future by CITY relative to the sale and.use of Project Water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of Project Water, which rules shall hereinafter be referred to as 'Project Rules", provided that CITY shall have provided USER with a copy of such Project Rules and shall provide USER with any modifications or additions thereto within ten (10) days of the promulgation of such modifications or additions. In the event that CITY and /or OCWD or any other governmental agency shall promulgate any rule or regulation that shall cause the total cost to USER for the use of Project Water to exceed the total cost to USER if it had used potable water instead of Project Water, USER may terminate this Agreement upon thirty (30) days notice to CITY and as set forth in Section 14 of this Agreement. For purposes hereof, the total cost to USER shall include all costs and expenses of any kind or nature directly or indirectly associated with the use of Project Water including, without limitation, the rate charged for such use NBI- 282581.v2 4 tonsros pursuant to this Agreement and the incremental costs incurred to comply with this Agreement. 3. QUANTITY OF WATER TO BE PURCHASED BY USER; INSTANTANEOUS MAXIMUM FLOW CITY agrees to supply Project Water to USER and USER agrees to purchase Project Water. The anticipated average annual Project Water usage at the Site is two hundred ninety (290) acre -feet. Project Water flow demands at the SITE's service shall not exceed an instantaneous maximum flow of two thousand two hundred (2,200) gallons per minute. CITY's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. In the event that the current use of the property discontinues or is modified, USER may modify or terminate this Agreement, as applicable, subject to the conditions set forth in Section 14 of this Agreement. If at any time during construction or operation of the On -Site Facilities, real or potential hazards or evidence of such hazards are found to exist, CITY reserves the right and has the authority to take action to insure that the situation be remedied and to protect the public health, as is further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of CITY to terminate Project Water service to SI'Z'E. 4. QUALITY OF WATER TO BE PURCHASED BY USER; PRESSURE CITY agrees that all Project Water delivered to USER from the Project Facilities pursuant to this Agreement shall conform to (a) the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, State and local health departments, and Federal, State and county agencies having jurisdiction to fix minimum standards for the quality of arse- 292581.v2 5 10115ro6 water with respect to USER's anticipated use, which Board, health departments and agencies shall hereinafter be referred to as "Regulatory Agencies'; and (b) such. minimum standards set by Regulatory Agencies as will prevent the Project Water from causing any damage to USER's property and all plants and vegetation located thereon. Furthermore, CITY agrees that Project Water delivered to USER pursuant to this Agreement shall conform to the requirements set forth in Exhibit B attached hereto (to be attached within sixty (60) days of the execution of this Agreement). If the Project Water fails to conform to the above requirements, CITY covenants that CITY will terminate the flow of Project Water to the STI'E and provide potable water in its place, and USER may terminate this Agreement if such requirements are not met within thirty (30) days. CITY understands and acknowledges that even a minor interruption in water service will have a significant impact upon the SITE and may result in significant interference and damage to the conduct of USER's business. Except as provided in the final . sentence of Section 3 above, any loss, cost; damage or expense resulting, directly or indirectly, from the cessation or termination of service shall be borne by CITY. In addition to the foregoing, CTI'Y covenants that all Project Water delivered to USER pursuant to this Agreement will not (x) emit any offensive odor, (y) cause undesirable change to the environmental makeup of any of the lakes found on USER's property, including any offensive change to the odor, algae level, color or wildlife composition of such lakes, or (z) cause damage to USER's property or grass, plants or other vegetation located thereon, which damage shall include excessive salt buildup. In the event that USER shall decide, in USEWs reasonable judgment, that any of (x), (y), or (z) above exists, CITY and USER agree to use the following procedure: (1) USER shall notify CITY of the problem. (2) CITY shall, within three (3) days of such notification, investigate the problem. xa1.2M8I.v2 6 10115196 (3) If CITY agrees that a problem exists, CITY will attempt to remedy the problem. If CITY is unable to remedy the problem within thirty (30) days after CITY receives notice from USER, CITY will terminate the flow of Project Water to the SITE and provide potable water in its place. (4) If CITY does not agree that a problem exists, CITY will notify USER of the same within three (3) days after CITY receives notice from USER CITY and USER will meet to discuss the issue within seven (7) days of such notification from CITY. (5) If CITY and USER are still unable to agree whether a problem exists, CITY and USER shall together select a mediator. CITY and USER shall then present their views to the mediator, and the mediator shall decide whether a problem exists. CITY and USER agree to be bound by the mediator's decision; however, CITY and /or USER may pursue the matter through arbitration as provided in Section 18 hereof. (6) If the mediator decides that a problem exists, the mediator shall proscribe the course of action CITY must take to remedy the problem. CITY must attempt immediately thereafter to remedy the problem in the manner proscribed. If CITY is unable to remedy the problem within thirty (30) days of receipt by CITY of the proscribed course of action from the mediator, or within such longer period as deemed reasonable by the mediator, CITY will terminate the flow of Project Water to the STTE and provide potable water in its place. (7) If the mediator decides that no problem exists, USER must continue to accept Project Water as contemplated herein: NMI- 282581.V2 7. 10/15/96 The replacement of Project Water by potable water as provided above shall be on a temporary basis only; once CITY and USER agree that the situation has been remedied, CITY.shall provide Project Water in the place of potable water on the SITE. If there is disagreement as to whether the situation has been remedied, CITY and USER shall follow the procedure outlined above to resolve such dispute. Project Water shall be delivered on a continuous basis at a pressure of not less than ninety pounds per square inch (90 psi) for demands under thirteen hundred gallons per minute (1,300 gpm), and not less than eighty pounds per square inch (80 psi) for demands from thirteen hundred one gallons per minute (1,301 gpm) to two thousand two hundred gallons per minute (2,200 gpm) at the Point of Connection between the hours of 8:00 p.m. to 6:00 am. USER shall not exert a demand for Project Water between the hours of 6:00 a.m. and 8:00 p.m. unless USER's staff is present to ensure that the public does not come into contact with Project Water. 5. PRICE OF PROJECT WATER CITY acknowledges the concerns of USER regarding (a) the potential need to add or adjust fertilizers and /or water supplements to the Project Water in order to maintain high quality fairway turf, and (b) the potential need to use additional amounts of water in order to offset the increased amounts of nutrients in the Project Water. CITY desires to comply with State law by only requiring USER to use reclaimed water in its irrigation operations if CITY supplies Project Water to USER at a cost less than or comparable to the cost of potable water. Therefore, during the entire term of this Agreement, the price to be paid by USER for Project Water delivered by CITY shall not exceed the lower of (a) eighty percent (809o) of the CITY's retail rate for potable water, excluding any NB1- 282581.V2 8 10/15/96 , surcharges that are based on usage of potable water, as such rate is established by resolution of the City Council and enforced on the date of delivery of the Project Water, or (b) the lowest rate then offered by CITY to any purchaser of reclaimed water, whether such rate is determined as a percentage of CITY's retail rate for . potable water or otherwise. The retail rate for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least ten (10) days prior to the adoption of a resolution establishing the water rate of CITY and /or modifying the purchase price of Project Water, CITY shall give written notice to USER and provide notice as prescribed in the City Municipal Code of a public hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. If, despite the reduced rate charged USER for Project Water in the preceding Paragraph, USER believes that unreimbursed incremental costs have been incurred as a result of the use by USER of Project Water that would not have been incurred if USER had used potable water, the following steps shall be taken: Within six (6) months after the end of this two (2) year period, and within six (6) months after the end of each two (2) year period thereafter, USER. shall submit to CITY an itemized account of the costs expended during the previous two years that were necessary to accommodate the use of Project Water on the SITE, including, without limitation, costs of fertilizers, water supplements, and /or other additives, costs of construction of any special systems, such as a gypsum- injection system and costs of excess Project Water that was needed. to offset the increased amounts of nutrients in the Project Water. CITY shall review this information and, with the help of landscape and irrigation specialists, shall determine which costs may be solely attributed to USER's use of Project Water as opposed to potable water on the SITE. If USER disagrees as to CITY's determination, CITY and USER shall select a mediator to settle the dispute as set forth in Section 4(5) rest- 292581.v2 9 10 /15M 0 0 herein. CITY shall then make an adjustment to the rate for Project Water that will (a) reimburse USER for the costs incurred during the previous two (2) years that are attributed solely to the use of Project Water as opposed to the use of potable water, and (b) compensate USER for the costs that are anticipated to be incurred during the next two (2) years that are attributed solely to the use of Project Water as opposed to potable water. The adjustment described in the previous sentence shall be to the extent necessary for CITY to comply with State law that requires CITY to provide Project Water to USER at a cost, including all expenses associated therewith, that is less than or comparable to the cost of potable water. USER and CITY may enact a formal process that implements the intent of this paragraph. 6. METERING AND MEASUREMENT OF FLOWS USER agrees that at locations where irrigation water is used exclusively, CITY shall maintain, at its own expense, a control valve or valves and a meter for the purpose of measuring the quantity of Project Water delivered pursuant to the terms of this Agreement from CITY to USER at the Point of Connection where such water is delivered to USER. CITY or a designated representative of CITY shall periodically read the service meter and record usage of Project Water onto a schedule. 7. PAYMENT FOR PROJECT WATER CITY shall invoice USER for the price of the Project Water purchased by USER as part of CIIY's regular billing cycle. Said invoices shall be paid within nineteen (19) days of the billing date. CITY retains the right to change billing. cycles and due dates as necessary upon sixty (60) days prior written notice to USER, so long as such change is .consistent with formally adopted City-wide practices and procedures and State law. NBl- 292581.v2 10 1 10/15/96 8. LIMITATION OF USE USER understands and agrees that Project Water delivered from OCWD's Project Facilities pursuant to the terms hereof has restricted uses, and USER agrees to use the Project Water only upon the property of USER for the irrigation of its golf course and related facilities and only for these uses. 9. COVENANTS, REPRESENTATIONS AND WARRANTIES CITY hereby covenants as follows: (a) There will be sufficient. Project Water to meet all of USER's irrigation needs with respect to the SITE. (b) All actions taken by CITY with respect to Project Water, Project Facilities and City Facilities have complied and will comply with all regulations promulgated by all Agencies and all other applicable laws. (c) The water quality requirements for Project Water during the term(s) of this Agreement will be defined in Exhibit B attached hereto (to be attached within sixty (60) days of the execution of this Agreement). (d) CITY will provide USER with all engineering support requested by USER, without charge, including the assistance of CITY engineers and other staff, to assist in the review of USER's irrigation system redesign for the purposes contemplated herein. NEE- 282581.v2 11 10/15196 (e) At CITY's cost, CITY will make presentations to USER, USER's club members and related homeowners' associations with respect to the Green Acres Project and Project Water. (f) In the event that CITY is in breach or default under this Agreement, at USER's election, CITY shall assign to USER all of its rights and remedies under the Retailer Agreement. CM hereby represents and warrants as follows: (a) USER may use potable water to irrigate putting greens, the perimeter of selected fairways located adjacent to residences, and elsewhere on the SITE as agreed to by USER and CITY and within acceptable State Health Department standards. (b) OCWD is not a party to any agreement between CITY and a user of Project Water. 10. INDEMNIFICATION CM agrees to protect, indemnify, defend, save and hold harmless-USER, its directors, agents and employees from and against any and all loss, liability, expense or damage of any kind or nature and from any suits, claims or demands, including (a) all consequential damages; (b) all damages to any natural resources, and the costs of any required or necessary repair, clean up, response cost, or, detoxification of the SITE or any portion thereof, and the preparation and implementation of any. closure, remedial or other required plans; and (c) all costs and expenses incurred in connection with clauses (a) and (b), including all attorneys' fees and expenses, whether in suit or not (such loss, liability, expense or damage, including clauses (a), (b) and (c) above, shall collectively be referred to NBI- 292.58Lv2 12 iauro6 herein as "Damages "), which arise directly or indirectly out of (x) the use by USER of the Project Water as opposed to potable water as contemplated herein, (y) the existence or alleged existence of any Hazardous Substances (as defined below) in the Project Water, or (z) the failure to remove any Hazardous Substances from the Project Water, unless such suit, claim or demand is caused primarily by the gross negligence or willful misconduct of USER, its directors, agents and employees, or the grossly negligent operation, maintenance or repair by USER of On -Site Facilities required to be operated; maintained or repaired by USER pursuant to this Agreement. The foregoing indemnity shall apply to any residual contamination on, under or about the SITE, as well as claims of any neighboring property owners or occupants, and to any contamination of any property or natural resources, arising from the Project Water. Upon receiving knowledge of any suit, claim or demand asserted by a third party that USER believes is covered by this indemnity, USER shall give CITY notice of the matter and an opportunity to defend it, at CITY's cost and expense, with legal counsel satisfactory to USER. USER may also require CITY to so defend the matter. CITY will pay all fees or penalties imposed by any Regulatory Agency or any other governmental authority for any violation of any code, regulation or law with respect to the transportation, use or chemical composition of the Project Water. The obligations of CITY under this Section 10 shall survive the expiration or termination of this Agreement. CITY acknowledges that excess water from USER irrigation operations and from lakes on the SITE drain into the Upper Newport Bay, and that once USER begins to use Project Water for irrigation purposes, any excess Project Water will drain into the Upper Newport Bay as well. CITY agrees to indemnify, defend, save and hold harmless USER, its directors, agents and employees from and against any and all Damages which arise directly or indirectly out of such drainage of Project Water into the Upper Newport Bay as well as any modification or termination of USER's right to allow its excess water to drain into the Upper NBl•282581.V2 13 10115196 Newport Bay when the modification or termination is required because of USER's use of Project Water as contemplated herein. As used herein, "Hazardous Substances" shall mean (a) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Law (as defined below) as a "hazardous substance ", "hazardous material", "hazardous waste ", "contaminant" or any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity"; and (b) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment. "Environmental Law' shall mean shall mean any and all present and future Federal, state and local laws (whether under common law, statute or otherwise), ordinances, regulations, permits, guidance documents, policies, and any other requirements of governmental authorities relating to health, safety, the environment or to any Hazardous Substances. 11. PERMITS This Agreement is conditioned upon OCWD and CITY obtaining the necessary permits relating to the use of Project,Water for landscape irrigation. All costs of obtaining such permits shall be borne by .CITY. CITY agrees to file in USER's name, with USER's reasonable cooperation, any and all applications and to undertake such proceedings as may be necessary to enable OCWD, CITY and USER to carry out the undertaking described herein, and to pursue such applications and proceedings in good faith and with due diligence, including any NBl- 282581.V2 14 30715/96 application required to be issued to OCWD by Regulatory Agencies. USER understands and agrees that USER must comply with the regulations set forth in permits if such permits apply to USER, provided that such compliance by USER shall not materially increase the cost of Project Water or unreasonably interfere with USER's golf course and related operations. 12. INTENTIONALLY DELETED 13. CONDITIONS PRECEDENT (a) This Agreement is conditioned upon (i) USER and OCWD executing by November 15, 1996 that certain Agreement between Orange County Water District and Big Canyon Country Club Regarding. Design and Construction of Reclaimed Water Retrofit at Golf Course Facility; and (ii) USER and CITY executing by November 15, 1996 that certain Loan Agreement for-the Design, Construction and Retrofit of Big Canyon Country Club's Irrigation System. (b) This Agreement is conditioned upon OCWD's completing and making operational the Green Acres Project by July 1, 1998, including the following: (a) the transmission pipeline is extended to the Site; (b) OCWD makes Project Water available for sale; and (c) all necessary permits, certificates and approvals are issued by all Regulatory Agencies having jurisdiction over the construction and operation of water reclamation facilities and over the production, distribution, sale and use of Project Water. This Agreement is further conditioned upon (y) OCWD's acquiring by July 1, 1998, acceptable right -of -way access from the Project Facilities to the NB1- 2M81.V2 15 101151% SITE for transportation pipeline purposes, and (z) OCWD and CITY gaining by July 1, 1998, the approval by all federal, state and local agencies having regulatory jurisdiction or grant- funding responsibilities with respect to the Project Facilities. If the conditions specified in this Section 13 are not met within the given time limits, USER may cancel this Agreement. (c) Within three (3) years from the date the conditions specified in items (a), (b), (c), (y) and (z) above have been satisfied, the redesign of USER's irrigation system to accommodate Project Water shall have been completed and USER shall have begun purchasing Project Water from CITY as provided herein. 14. CONDITIONS SUBSEQUENT In the event that CITY is unable to deliver Project Water through Project Facilities, CITY reserves the right to provide USER with a minimum of seventy - two (72) hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. CITY shall provide USER with a minimum of twenty -four (24) hours advance notice when resumption of the delivery of Project Water to USER's SITE is expected. In the event CITY is unable to deliver Project. Water to USER or defaults under this Agreement, CITY must provide USER with potable water at the potable water rate or reclaimed water at the Project Water rate, subject to the right of CITY to determine allocation of all water, both Project Water and potable, in the event of emergencies. If USER terminates this Agreement as authorized under the terms of this Agreement, CM must contemporaneously provide USER with potable water in the place of Project Water. Furthermore, in the event that OCWD ceases producing and distributing Project Water or in the event that the treatment criteria imposed by any Regulatory Agencies exceeds those existing as of the date of this Agreement, Na1- 2M81.v2 - 16 ionsros . either CITY or USER shall have the option to cancel this Agreement. CITY shall convert service on the SITE back to a potable water system(s) at no expense to USER if there is a cessation in service or this Agreement is canceled or terminated for any reason (other than the expiration of the term pursuant to Section 16 below), as well as converting back to Project Water if service is to be restored pursuant to the terms of this Agreement. 15. LUMHATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of Project Water from the Green Acres Project beyond that usable by USER. CITY reserves the right to enter into contracts with others for the sale of any Project Water so long as such contracts do not interfere with CITY's ability to supply sufficient Project Water to meet USER's requirements. 16. TERM The initial term of this Agreement shall be ten (10) years from the day and year first above written. USER shall have the option to extend said initial term for two (2) additional ten (10) year terms, provided that USER gives CITY written notice of such election at least six (6) months prior to the expiration of the previous term. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. 17. ASSIGNMENT This Agreement and the rights and benefits of CITY hereunder may be assigned and transferred by CITY to any entity which assumes the responsibilities and obligations of CITY for the sale and distribution of Project Water to USER, NB1- 282581.V2 17 10/15/96 '- - provided, however, that CITY shall remain fully liable for all of the responsibilities and obligations of CITY hereunder. This Agreement and the rights and benefits of USER hereunder shall not be assigned or transferred by USER without the written consent of CITY, which consent shall not be unreasonably withheld. 18. ARBITRATION (a) CITY and USER hereby agree that all controversies and claims arising directly or indirectly out of this Agreement shall at the written request of any party be arbitrated pursuant to the applicable rules of the American Arbitration Association. The arbitration shall occur in the State of California Judgment upon any award rendered by the arbitrator(s) may be entered .in. any court having jurisdiction. The Federal Arbitration Act shall apply to the construction and interpretation of this arbitration agreement. (b) A single arbitrator shall have the power to render a maximum award of one hundred thousand dollars ($100,000). When any party files a claim in excess of this amount, the arbitration decision shall be made by the majority vote of three (3) arbitrators. No arbitrator shall have the power to restrain any act of any party. (c) No provision of subparagraph (a) shall limit the right of any party to exercise self -help remedies or to obtain any provisional or ancillary remedies (including, but not limited to, injunctive relief) from a court of competent jurisdiction. The institution and maintenance of any remedy permitted above shall not constitute a waiver of the . rights to submit any controversy or claim to arbitration. The statute of limitations, estoppel, waiver, laches, and similar doctrines which NBl- 262SKM 18 101151% __ would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding. 19. NOTICES All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either 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: CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: City Manager USER: Big Canyon Country Club One Big Canyon Drive Newport Beach, CA 92660 Attention: General Manager or such other address as CITY or USER shall direct in writing. Service of any instrument or writing by mail shall be deemed complete. forty -eight (48) hours after depositing the same in a United States mail depository. 20. SUCCESSORS This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of CTTY and USER and their respective successors.and assigns. NBl- 2ffis81.V2 19 10/15/96 0 IN WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above.. APPROVED AS TO FORM: CITY OF NEWPORT BEACH, a munipipal corporation City Attorney BIG CANYON COUNTRY CLUB, a private corporation 0 ATTEST: LaVonne Harkless City Clerk xai- zausi.va 20 10/1516 ACKNOWLEDGEMENT OF CONSENT TO EXECUTION OF AGREEMENT The ORANGE COUNTY WATER DISTRICT hereby consents to the foregoing "AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND BIG CANYON COUNTRY CLUB REGARDING DELIVERY AND SALE OF GREEN ACRES PROJECT WA R TO BIG CANYON COUNTRY CLUB" entered into this 3 O day of , 1996, by and between the CITY of Newport Beach, as the Rdiailer -of Project Water, and Big Canyon Country Club, as the USER of Project Water, for delivery and sale of Project Water to Big Canyon Country Club, One Big Canyon Drive, Newport Beach, CA, for landscape irrigation. ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California C44 A0 Clark Ide, Esq. George Osborne General Counsel President General Manager NBI- 2e2591.v2 21 iavusv AGREEMENT GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO BIG CANYON COUNTRY CLUB THIS AGREEMENT is made and entered into this,10 day of dec, 1996 by and between the City of Newport Beach, a Municipal Corporation, hereinafter referred to as "CITY", and the Big Canyon Country Club, a private, non -profit mutual benefit corporation, hereinafter referred to as "USER". RECITALS A. With the exception of certain limited areas served by the Irvine Ranch Water District ( "IRWD "), CITY is the exclusive retail water purveyor within CITY's boundaries providing water for residential, industrial, commercial, public agency, agricultural and other uses. CITY produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced from the Orange County groundwater basin, which basin is managed by the Orange County Water District ("OCWD "). B. USER is a private corporation within the jurisdictional and service boundaries of CITY, and currently purchases potable water from CITY for its own use at Big Canyon Country Club, One Big Canyon Drive, Newport Beach, California. C. CITY has agreed to buy reclaimed water from OCWD and resell such reclaimed water pursuant to the terms and conditions specified in that certain agreement entitled "Agreement Between Orange County Water District and City of Newport Beach Regarding Distribution and Sale of Green Acres Project Water" dated as of January 16, 1991, and as it may be subsequently amended, hereinafter referred to as "Retailer Agreement ". City executed the Retailer Agreement for the purpose of seeking NBI- 275893.V]3 1 09/271% OCWD DOC. A-f W FILE W /OCWD Doc. g� ' /_/ STAR NO • to provide its present and future residents with a supplemental source of water to meet their needs and to assist in the statewide objective of conserving and utilizing to the maximum degree possible the water of the People of the State of California, which water shall be recovered from the operation known as the "Green Acres Project" for all possible beneficial uses. D. The Green Acres Project is being planned for extension into CITY's service area for the purpose of conserving and beneficially reusing wastewater from the County Sanitation Districts of Orange County or the IRWD, such wastewater having been treated by OCWD or IRWD to standards established by the State Health Department and transported and sold by OCWD as "Project Water" to CITY to be resold to Project Water customers. E. USER desires to purchase Project Water from CITY for allowable, suitable nonpotable uses, specifically landscape irrigation of its golf course and certain related facilities (hereinafter referred to as "SITE "), in lieu of potable water currently purchased from CITY, and CITY is willing to sell Project Water to USER. AGREEMENT NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions of this Agreement, the parties agree as follows: 1. TRANSMISSION PIPELINE FACILITY It is the intent of OCWD to construct a transmission pipeline as part of the Green Acres Project that will convey Project Water to various locations within CITY boundaries, including the SITE. All Project Water will originate from either the OCWD Green Acres Project Water Treatment Facility or a similar facility operated by IRWD. OCWD owns the main transmission pipeline facility NB1- 275895.V13 2 09/27/96 and service line which serves USER upstream of CTTY's reclaimed water service meter vault, which facility and line shall hereinafter be referred to as "Project Facilities ". CTTY owns, operates and maintains all reclaimed water service meter vault piping, by -pass line piping, service meter vault, pump station, service meter and control valves, which facilities shall hereinafter be referred to collectively as "City Facilities ". USER owns and maintains the pipelines, backflow preventers, warning signs, warning tags and all appurtenances downstream of CITY's reclaimed water service meter vault, which facilities shall hereinafter be referred to as "On -Site Facilities" and are more fully set forth on the drawings attached hereto as Exhibit A -1 (to be attached within sixty (60) days of the execution of this Agreement). The point where USER's piping connects to the downstream end of CTTY's reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection ". The Point of Connection will be in the Jamboree Road parkway near USER's maintenance yard entrance approximately 1,300 feet northerly of San Joaquin Hills Road, as shown on Exhibit A -2 attached hereto (to be attached within sixty (60) days of the execution of this Agreement). That portion of the Project Facilities and City Facilities located within CITY's boundaries will be operated and maintained by CITY as a contractor for OCWD for the purpose of distributing Project Water to be purchased from CITY by USER. USER shall also own and maintain all devices relating to USER's on -site potable water system including, but not limited to, drinldng fountain covers, backflow preventers and identification tags. USER shall be responsible for all energy costs associated with the pump station owned by CITY but located on USER's property, and USER and CITY shall execute a separate agreement in which USER will grant to CITY an easement or license across USER's property to provide reasonable access to the pump station. NB1- 275895.V13 3 09/27/96 ! • Such agreement will be attached hereto within sixty (60) days of the execution of this Agreement as Exhibit C. In addition, within sixty (60) days after the execution of this Agreement, USER shall provide to CITY information with respect to USER's use of water, . fertilizers, water supplements and the costs thereof for the prior five (5) year period. Within sixty (60) days of beginning to purchase Project Water from CITY under this Agreement, USER shall provide CITY with the same information for the period between (a) executing this Agreement..and (b) the purchase of Project Water from CM. 2. RULES AND REGULATIONS USER agrees that during the term of this Agreement and any extension thereof, USER shall comply with all rules and regulations promulgated now and in the future by CITY relative to the sale and use of Project Water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of Project Water, which rules shall hereinafter be referred to as "Project Rules ", provided that CITY shall have provided USER with a copy of such Project Rules and shall provide USER with any modifications or additions thereto within ten (10) days of the promulgation of such modifications or additions. In the event that CITY and /or OCWD or any other governmental agency shall promulgate any rule .or regulation that shall increase above the potable rates the cost of USER's transportation and /or use of Project Water as contemplated herein, USER may terminate this Agreement upon thirty (30) days notice to CITY and as set forth in Section 14 of this Agreement. NB1- 275895.V13 4 09/27/96 0 3. QUANTITY OF WATER TO BE PURCHASED BY USER; INSTANTANEOUS MAXIMUM FLOW CITY agrees to supply Project Water to USER and USER agrees to purchase Project Water. The anticipated average annual Project Water usage at the Site is two hundred ninety (290) acre -feet. Project Water flow demands at the SITE'S service shall not exceed an instantaneous maximum flow of two thousand two hundred (2,200) gallons per minute. CITY's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. In the event that the current use of the property discontinues or is modified, USER may modify or terminate this Agreement, as applicable, subject to the conditions set forth in Section 14 of this Agreement. If at any time during construction or operation of the On -Site Facilities, real or potential hazards or evidence of such hazards are found to exist, CITY reserves the right and has the authority to take action to insure that the situation be remedied and to protect the public health, as is further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of CITY to terminate Project Water service to SITE. 4. QUALITY OF WATER TO BE PURCHASED BY USER; PRESSURE CITY agrees that all Project Water delivered to USER from the Project Facilities pursuant to this Agreement shall conform to (a) the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, State and local health departments, and Federal, State and county agencies having jurisdiction to fix minimum standards for the quality of water with respect to USER's anticipated use, which Board, health departments and agencies shall hereinafter be referred to as 'Regulatory Agencies'; and (b) such minimum standards set by Regulatory Agencies as will prevent the Project NBI.275895.V13 5 09/27/96 • 0 Water from causing any damage to USER's property and all plants and vegetation located thereon. Furthermore, CITY agrees that Project Water delivered to USER pursuant to this Agreement shall conform to the requirements set forth in Exhibit B attached hereto (to be attached within sixty (60) days of the execution of this Agreement). If the Project Water fails to conform to the above requirements, CITY covenants that CITY will terminate the flow of Project Water to the SITE and provide potable water in its place, and USER may terminate this Agreement if such requirements are not met within thirty (30) days. In addition to the foregoing, CITY covenants that all Project Water delivered to USER pursuant to this Agreement will not (x) emit any offensive odor, (y) cause undesirable change to the environmental makeup of arry of the lakes found on USER's property, including any offensive change to the odor, algae level, color or wildlife composition of such lakes, or (z) cause damage to USER's property or grass, plants or other vegetation located thereon, which damage shall include excessive salt buildup. In the event that USER .shall decide, in USER's reasonable judgment, that any of (x), (y), or (z) above exists, CITY and USER agree to use the following procedure: (1) USER shall notify CITY of the problem. (2) CITY shall, within three (3) days of such notification, investigate the problem. (3) If CITY agrees that a problem exists, CITY will attempt to remedy the problem. If CTTY is unable to remedy the problem within thirty (30) days after CITY receives notice from USER, CITY will terminate the flow of Project Water to the SITE and provide potable water in its place. (4) If CITY does not agree that a problem exists, CITY will notify USER of the same within three (3) days after CITY receives notice from USER. CITY and USER will meet to NS1- 275895.V13 6 09/27/96 • 0 discuss the issue within seven (7) days of such notification from CITY. (S) If CITY and USER are still unable to agree whether a problem exists, CITY and USER shall together select a mediator. CITY and USER shall then present their views to the mediator, and the mediator shall decide whether a problem exists. CITY and USER agree to be bound by the mediator's decision; however, CITY and /or USER may' pursue the matter through arbitration as provided in Section 18 hereof. (6) If the mediator decides that a problem exists, the mediator shall proscribe the course of action CITY must take to remedy the problem. CITY must attempt immediately thereafter to remedy the problem in the manner proscribed. If CITY is unable to remedy the problem within thirty (30) days of receipt by CITY of the proscribed course of action from the mediator, or within such longer period as deemed reasonable by the.mediator, CITY will terminate the flow of Project Water to the SITE and provide potable water in its place. (7) If the mediator decides that no problem exists, USER must continue to accept Project Water as contemplated herein. The replacement of.Project Water by potable water as provided above shall be on a temporary basis .only; once CITY and USER agree that the situation has been remedied, CITY shall provide Project Water in the place of potable water on the SrM. If there is disagreement as to whether the situation has been remedied, CITY and USER shall follow the procedure outlined above to resolve such dispute. NB1- 275895.V13 7 09/27/96 0 • Project Water shall be delivered on a continuous basis at a pressure of not less than ninety pounds per square inch (90 psi) for demands under thirteen hundred gallons per minute (1,300 gpm), and not less than eighty pounds per square inch (80 psi) for demands from thirteen hundred one gallons per minute (1,301 gpm) to two thousand two hundred gallons per minute (2,200 gpm) at the Point of Connection between the hours of 8:00 p.m. to 6:00 am. USER shall not exert a demand for Project Water between the hours of 6:00 a.m. and 8:00 p.m. unless USER's staff is present to ensure that the public does not come into contact with Project Water. 5. PRICE OF PROJECT WATER CITY acknowledges the concerns of USER regarding (a) the potential need to add or adjust fertilizers and /or water supplements to the Project Water in order to maintain high quality fairway turf, and (b) the potential need to use additional amounts of water in order to offset the increased amounts of nutrients in the Project Water. CITY desires to comply with State law by only requiring USER to use reclaimed water in its irrigation operations if CITY supplies Project Water to USER at a cost less than or comparable to the cost of potable water. Therefore, for the first two years of this Agreement, the price to be paid by USER for Project Water delivered by CITY shall not exceed the lower of (a) eighty percent (80 %) of the CTTY's retail rate for potable water, excluding any surcharges that are based on usage of potable water, as such rate is established by resolution of the City Council and enforced on the date of delivery of the Project Water, or (b) the lowest rate then offered by CITY to any purchaser of reclaimed water, whether such rate is determined as a percentage of CrI Y's retail rate for potable water or otherwise. The retail rate for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least ten (10) days prior to the adoption of a resolution establishing the water rate of CITY and /or modifying the purchase price of Project Water, CITY shall give NB1- 275895.V13 8 09M196 n V • written notice to USER and provide notice as prescribed in the City Municipal Code of a public hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. If USER believes that excess irrigation costs have been incurred as a result of switching from potable water to Project Water on the SITE, the following steps shall be taken: i NB1- 275895.V13 9 09m/96 i • Within six (6) months after the end of this two (2) year period, and within six (6) months after the end of each two (2) year period thereafter, USER shall submit to CITY an itemized account of the costs expended during the previous two years that were necessary to accommodate the use of Project Water on the SITE, including costs of fertilizers, water supplements, and /or other additives, costs of construction of any special systems, such as a gypsum - injection system, and costs of excess Project Water that was needed to offset the increased amounts of nutrients in the Project Water. CITY shall review this information and, with the help of landscape and irrigation specialists, shall determine which costs may be solely attributed to USER's use of Project Water as opposed to potable water on the SITE. If USER disagrees as to CITY's determination, CITY and USER shall select a mediator to settle the dispute as set forth in Section 4(5) herein. CITY shall then make an adjustment to the rate for Project Water that will (a) reimburse USER for the costs incurred during the previous two (2) years that are attributed solely to the use of Project Water as opposed to the use of potable water, and (b) compensate USER.for the costs that are anticipated to be incurred during the next two (2) years that are attributed solely to the use of Project Water as opposed to potable water. The adjustment described in the previous sentence shall be to the extent necessary for CITY to comply with State law that requires CITY to provide Project Water to USER at a cost, including all expenses associated therewith, that is less than or comparable to the cost of potable water. USER and CITY may enact a formal process that implements the intent of this paragraph. Irrespective of the costs associated with the use by USER of Project Water, the rate to be charged USER by CITY for Project Water shall never exceed the lower of (a) eighty percent (80 %) of the CITY s retail rate for potable water, excluding any surcharges that are based on usage of potable water, as such rate is established above, or (b) the lowest rate then offered by C FY to any purchaser NB1- 275895.V13 10 09/27/96 of reclaimed water, whether such rate is determined as a percentage of CI TY's retail rate for potable water or otherwise. 6. METERING AND MEASUREMENT OF FLOWS USER agrees that at locations where irrigation water is used exclusively, CITY shall maintain, at its own expense, a control valve or valves and a meter for the purpose of measuring the quantity of Project Water delivered pursuant to the terms of this Agreement from CITY to USER at the Point of Connection where such water is delivered to USER. CITY or a designated representative of CITY shall periodically read the service meter and record usage of Project Water onto a schedule. 7. PAYMENT FOR PROJECT WATER CITY shall invoice USER for the price of the Project Water purchased by USER as part of CI'1Ys regular billing cycle. Said invoices shall be paid within nineteen (19) days of the billing date. CITY retains the right to change billing cycles and due dates as necessary upon sixty (60) days prior written notice to USER, so long as such change is consistent with formally adopted City-wide practices and procedures and State law. 8. LIMITATION OF USE USER understands and agrees that Project Water delivered from OCWD's Project Facilities pursuant to the terms hereof has restricted uses, and USER agrees to use the Project Water only upon the property of USER for the irrigation of its golf course and related facilities and only for these uses. NB1- 275895. V 13 11 09127196 9 0 9. COVENANTS, REPRESENTATIONS AND WARRANTIES CITY hereby covenants as follows: (a) There will be sufficient Project Water to meet all of USER's irrigation needs with respect to the SITE. (b) All actions taken by CITY with respect to Project Water, Project Facilities and City Facilities have complied and will comply with all regulations promulgated by all Regulatory Agencies and all other applicable laws. (c) The water quality requirements for Project Water during the term(s) of this Agreement will be defined in Exhibit B attached hereto (to be attached within sixty (60) days of the execution of this Agreement). (d) MY will provide USER with all engineering support requested by USER, including the assistance of CITY engineers and other staff, to assist in the review of USER's irrigation system redesign for the purposes contemplated herein. (e) At CITY's cost, CPTY will make presentations to USER, USER's club members and related homeowners' associations with respect to the Green Acres Project and Project Water. (f) In the event that CITY is in breach or default under this Agreement, CITY shall assign to USER all of its rights and remedies under the Retailer Agreement. NB1- 275895.V13 12 09/27/96 CITY hereby represents and warrants as follows: (a) USER may use potable water to irrigate putting greens, the perimeter of selected fairways located adjacent to residences, and elsewhere on the SITE as agreed to by USER and CITY and within acceptable State Health Department standards. (b) OCWD is not a party to any agreement between CTTY and a user of Project Water. 10. INDEMNIFICATION CITY agrees to protect, indemnify, defend, save and hold harmless USER, its directors, agents and employees from and against any and all loss, liability, expense or damage of any kind or nature and from any suits, claims or demands, including (a) all consequential damages; (b) all damages to any natural resources, and the costs of any required or necessary repair, clean up, response cost, or detoxification of the SITE or any portion thereof, and the preparation and implementation of any closure, remedial or other required plans; and (c) all costs . and expenses incurred in connection with clauses (a) and (b), including all attorneys' fees and expenses, whether in suit or not (such loss, liability, expense or damage, including clauses (a), (b) and (c) above, shall collectively be referred to herein as "Damages "), which arise directly or indirectly out of (x) the use by USER of the Project Water as opposed to potable water as contemplated herein, (y) the existence or alleged existence of any Hazardous Substances (as defined below) in the Project Water, or (z) the failure to remove any Hazardous Substances from the Project Water, unless such suit, claim or demand is caused primarily by the gross negligence or willful misconduct of USER, its directors, agents and employees, or the grossly negligent operation, maintenance or repair by USER of Project Water distribution and on -site facilities. The foregoing NB1- 775895.V13 13 09/27M • • indemnity shall apply to any residual contamination on, under or about the SITE, and to any contamination of any property or natural resources, arising from the Project Water. Upon receiving knowledge of any suit, claim or demand asserted by a third party that USER believes is covered by this indemnity, USER shall give CITY notice of the matter and an opportunity to defend it, at CTTY's cost and expense, with legal counsel satisfactory to USER. USER may also require CITY to so defend the matter. CTTY will pay all fees or penalties imposed by any Regulatory Agency or any other governmental authority for any violation of any code, regulation or law with respect to the transportation, use or chemical composition of the Project Water. The obligations of CITY under this Section 10 shall survive the term(s) of this Agreement. CITY acknowledges that excess water from USER irrigation operations and from lakes on the SITE drain into the Upper Newport Bay, and that once USER begins to use Project Water for irrigation purposes, any excess Project Water will drain into the Upper Newport Bay as well. CITY agrees to indemnify, defend; save and hold harmless USER, its directors, agents and employees from and against any and all Damages which arise directly or indirectly out of any modification or termination of USER's right to allow its excess water to drain into the Upper Newport Bay when the modification or termination is required because of USER's use of Project Water as contemplated herein. As used herein, "Hazardous Substances" shall mean (a) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Law (as defined below) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "contaminant" or any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity"; and (b) any other chemical, material, or substance that, because of its NB1- 275895.V13 14 09121196 • quantity, concentration; or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment. "Environmental Law" shall mean shall mean any and all present and future Federal, state and local laws (whether under common law, statute or otherwise), ordinances, regulations, permits, guidance documents, policies, and any other requirements of governmental authorities relating to health, safety, the environment or to any Hazardous Substances. 11. PERMITS This Agreement is conditioned upon OCWD and CITY obtaining the necessary permits relating to the use of Project Water for landscape irrigation. All costs of obtaining such permits shall be borne by CITY. CITY agrees to file in USER's name, with USER's reasonable cooperation, any and all applications and to undertake such proceedings as may be necessary to enable OCWD, CITY and USER to carry out the undertaking described herein, and to pursue such applications and proceedings in good faith and with due diligence, including any application required to be issued to OCWD by Regulatory Agencies. USER understands and agrees that USER must comply with the regulations set forth in permits if such permits apply to USER, provided that such compliance by USER shall not materially increase the cost of Project Water or unreasonably interfere with USEWs golf course and related operations. 12. INTENTIONALLY DELETED NB1- 275895.V13 15 09/27/96 0 0 13. CONDITIONS PRECEDENT (a) This Agreement is conditioned upon (i) USER and OCWD executing by November 1, 1996 that certain Agreement between Orange County Water District and Big Canyon Country Club Regarding Design and Construction of Reclaimed Water Retrofit at Golf Course Facility; and (ii) USER and CITY executing by November 1, 1996 that certain Loan Agreement for the Design,' Construction and Retrofit of Big Canyon Country Club's Irrigation System. (b) This Agreement is conditioned upon OCWD's completing and making operational the Green Acres Project by July 1, 1998, including the following: (a) the transmission pipeline is extended to the Site; (b) OCWD makes Project Water available for sale; and (c) all necessary permits, certificates and approvals are issued by all Regulatory Agencies having jurisdiction over the construction and operation of water reclamation facilities and over the production, distribution, sale and use of Project Water. This Agreement is further conditioned upon (y) OCWD's acquiring by July 1, 1998, acceptable right -of -way access from the Project Facilities to the SITE for transportation pipeline purposes, and (z) OCWD and CITY gaining by July 1, 1998, the approval by all federal, state and local agencies having regulatory jurisdiction or grant- funding responsibilities with respect to the Project Facilities. If the conditions specified in this Section 13 are not met within the given time limits, USER may cancel this Agreement. (c) Within three (3) years from the date the conditions specified in items (a), (b), (c), (y) and (z) above have been satisfied, the NB1- 275895.V13 - 16 09/27/96 9 E redesign of USER's irrigation system to accommodate Project Water shall have been completed and USER shall have begun purchasing Project Water from CITY as provided herein. 14. CONDITIONS SUBSEQUENT In the event that CITY is unable to deliver Project Water through Project Facilities, CITY reserves the right to provide USER with a minimum of seventy- two (72) hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. CITY shall provide USER with a minimum of twenty-four (24) hours advance notice when resumption of the delivery of Project Water to USER's SITE is expected. In the event CM is unable to deliver Project Water to USER or defaults under this Agreement, CITY must provide USER with potable water at the potable water rate or reclaimed water at the Project Water rate, subject to the right of CTTY to determine allocation of all water, both Project Water and potable, in the event of emergencies. If USER terminates this Agreement as authorized under the terms of this Agreement, CITY must provide USER with potable water in the place of Project Water. Furthermore, in the event that OCWD ceases producing and distributing Project Water or in the event that the treatment criteria imposed by any Regulatory .Agencies exceeds those existing as of the date of this Agreement, either CITY or USER shall have the option to cancel this Agreement. CITY shall convert service on the STTE back to a potable water system(s) at no expense to USER if this Agreement is canceled by CITY during the term of this Agreement or USER pursuant to Sections 2, 4 and 13 above. 15. LIMITATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of Project Water from the Green Acres Project beyond that usable by USER. CITY reserves the right NB1- 275895. V 13 17 09127/96 • •. to enter into contracts with others for the sale of any Project Water so long as such contracts do not interfere with CITY's ability to supply sufficient Project Water to meet USER's requirements. 16. TERM The initial term of this Agreement shall be ten (10) years from the day and year first above written. USER shall have the option to extend said initial term for two (2) additional ten (10) year terms, provided that USER gives CITY written notice of such election at least six (6) months prior to the expiration of the previous term. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. 17. ASSIGNMENT This Agreement and the rights and benefits of CITY hereunder may be assigned and transferred by CITY to any entity which assumes the responsibilities and obligations of CITY for the sale and distribution of Project Water to USER, provided, however, that CITY shall remain fully liable for all of the responsibilities and obligations of CITY hereunder. This Agreement and the rights and benefits of USER hereunder shall not be assigned or transferred by USER without the written consent of CITY, which consent shall not be unreasonably withheld. 18. ARBITRATION (a) CITY and USER hereby agree that all controversies and claims arising directly or indirectly out of this Agreement shall at the written request of any party be arbitrated pursuant to the applicable Nai- 275895.vi3 18 09127/96 0 • rules of the American Arbitration Association. The arbitration shall occur in the State of California. Judgment upon any award rendered by the arbitrator(s) may be entered iA any court having jurisdiction. The Federal Arbitration Act shall apply to the construction and interpretation of this arbitration agreement. (b) A single arbitrator shall have the power to render a maximum award of one hundred thousand dollars ($100,000). When any party files a claim in excess of this amount, the arbitration decision shall be made by the majority vote of three (3) arbitrators. No arbitrator shall have the power to restrain any act of any party. (c) No provision of subparagraph (a) shall limit the right of any party to exercise self -help remedies or to obtain any provisional or ancillary remedies (including, but not limited to, injunctive relief) from a court of competent jurisdiction. The institution and maintenance of any remedy permitted above shall not constitute a waiver of the rights to submit any controversy or claim to arbitration. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding. 19. NOTICES All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either 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: NB1- 275895.V13 19 09/27/96 r� u CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: City Manager USER: Big Canyon Country Club One Big Canyon Drive Newport Beach, CA 92660 Attention: General Manager 0 or such other address as CITY or USER shall direct in writing. Service of any instrument or writing by mail shall be deemed complete forty -eigbt (48) hours after depositing the same in a United States mail depository. 20. SUCCESSORS This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of CITY and USER and their respective successors and assigns. NB1- 275895.V33 20 09127/96 0 0 IN WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above. APPROVED AS TO FORM: CITY OF NEWPORT BEACH, a municipal corporation City Attorney BIG CANYON COUNTRY CLUB, a private corporation Jo amilto (;side nt :fi =0I 1. ATTEST: LaVonne Harkless City Clerk NBI- 275895.V13 21 09/27/96 # 0 ACKNOWLEDGEMENT OF CONSENT TO EXECUTION OF AGREEMENT The ORANGE COUNTY WATER DISTRICT hereby consents to the foregoing "AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND BIG CANYON COUNTRY CLUB REGARDING DELIVERY AND SALE OF GREEN ACRES PROJECT WATER TO BIG CANYON COUNTRY CLUB" entered into this day of , 1996, by and between the CITY of Newport Beach, as the Retailer of Project Water, and Big Canyon Country Club, as the USER of Project Water, for delivery and sale of Project Water to Big Canyon Country Club, One Big Canyon Drive, Newport Beach, CA, for landscape irrigation. ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California Clark Ide, Esq. General Counsel Z,o 2 4t4 William R. Mills, Jr. General Manager George Osborne President NBI- 275895.VI3 22 09127/96 BY THE CITY COUNC!L CITY OF NEWPORT BEACH • SEP 2 3' September 23, 1996 ' CITY COUNCIL AGENDA APPROVED ITEM NO. s TO: Mayor & Members of the City Council FROM: Public Works Department SUBJECT: GREEN ACRES END -USER AGREEMENTS v' RECOMMENDATIONS: Approve the End -User Agreements and authorize the Mayor and City Clerk to execute the agreements with: C -3114 1. Newport Mesa Unified School District ( NMUSD) - Corona del Mar High School C— 3115 2. The Bluffs Homeowners Association (Bluffs) C. -3 l I (p 3. .Carmen CmaWy Club C- 3(1-1 4. Newport Beach Country Club • . DISCUSSION: In July the City entered into an agreement with the Irvine Ranch Water District (IRWD) and the Orange County Water District (OCWD) to build an intertie that would allow IRWD reclaimed water to be transferred to the OCWD. This intertie and the use of the IRWD reclaimed water by OCWD would eliminate the need for the water to be discharged into the San Diego Creek which flows into the Upper Newport Bay. OCWD agreed to extend their Green Acres Project (GAP) pipeline into Newport Beach to accept reclaimed water from the intertie if they could obtain a low interest loan from the state. A condition for this loan requires that at least five (5) reclaimed water users in Newport Beach commit to using GAP reclaimed water. This commitment is to be in the form of an End -User Agreement. At the August 14, 1995, meeting, the City Council authorized the execution of End -User Agreements. Since that time and primarily in the last month, the standard form End -User Agreement approved has been modified. Attached are copies of the End -User Agreements with NMUSD - Corona del Mar High School, The Bluffs Homeowners Association, Big Canyon Country Club and the Newport Beach Country Club. A cover sheet is attached to each agreement providing information on the modifications that were made. The fifth End -User is the City which will use GAP reclaimed water in the Bonita Creek and East Bluff parks and possibly for the Jamboree Road medians. l �� Page '2 Green Acres Project End -User Agreements September 23. 1996 To utilize reclaimed water for an irrigation system, it is necessary to retrofit the existing system. The retrofit program makes sure the irrigation system utilizing the reclaimed water is separated from the potable water system. In some instances, all new piping is .required. The retrofit program will be funded by the owners or with loans from OCWD or the City. As an incentive to convert to GAP water, the City will sell the water at 80% of the potable water rate. If the City loans money to a user for retrofitting, the GAP water rate will be 95% of the potable rate until the loan is paid back. The NMUSD and The Bluffs have approved the agreements. It is anticipated that the Big Canyon Country Club and the Newport Beach Country Club will approve their agreements before the Council meeting. STAFF RECOMMENDATION: Staff recommends approval of the "End- User" agreements for NMUSD and the Bluffs and requests approval for the Mayor and City Clerk to execute these and the Big Canyon Country Club and Newport Beach Country Club End -User Agreements on behalf of the City. Respectfully submitted, (;)S(k PUBLIC WORKS DIRECTOR Don Webb, Director By: -✓ A., Mic el J. Sinacori, P.E. Utilities Engineer MJS:cja Attachments: Summaries of Modifications for each End -User Agreement Final End -User Agreements for Newport Mesa School District (CDM High School) and The Bluffs Homeowners Association. Draft End -User Agreements for Big Canyon Country Club and Newport Beach Country Club. r1, ,1 • GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT MODIFICATIONS NEWPORT BEACH COUNTRY CLUB • Added expanded indemnification clauses that cover Newport Beach Country Club against any damages from the reclaimed water use. The City has a similar clause with the OCWD protecting ourselves against any damages. • Minor changes with regards to quantity of water used and time of use. • Modifications with regards to payment schedule. • City agrees to compensate for all permits costs, which there should be none of. Monitoring clauses have been eliminated. • Added an arbitration clause instead of Attorney's Fee's and Expenses clause. • r 0 GREEN ACRES RECLAIMED WATER PROJECT • END -USER AGREEMENT MODIFICATIONS NEWPORT -MESA UNIFIED SCHOOL DISTRICT (CORONA DEL MAR HIGH SCHOOL) • Added indemnification clauses that cover Newport Mesa Unified School District against any damages from the reclaimed water use. The City has a similar clause with the OCWD protecting ourselves against any damages. • Minor changes with regards to quantity of water used and time of use. • Modifications with regards to payment schedule. • City agrees to compensate for all permits costs, which there should be none of. • Monitoring clauses have been modified to allow for access only. Previous clauses had provisions for installation of a water quality monitoring well. 0 0 a GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT MODIFICATIONS THE BLUFFS HOMEOWNERS ASSOCIATION • Added indemnification clauses that cover the Bluffs Homeowners Association against any damages from the reclaimed water use. The City has a similar clause with the OCWD protecting ourselves against any damages. • Minor changes with regards to quantity of water used and time of use. • Modifications with regards to payment schedule. • City agrees to compensate for all permits costs, which there should be none of. • Monitoring clauses have been modified to allow for access only. Previous clauses had provisions for installation of a water quality monitoring well. 0 J r • GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT MODIFICATIONS BIG CANYON COUNTRY CLUB • Added expanded indemnification clauses that cover Big Canyon Country Club against any damages from the reclaimed water use. The City has a similar clause with the OCWD protecting ourselves against any damages. • Minor changes with regards to quantity of water used and time of use. . • Modifications with regards to payment schedule. • City agrees to compensate for all permits costs, which there should be none of. • Monitoring clauses have been eliminated. • Added an arbitration clause instead of Attorney's Fee's and Expenses clause. �C' Cl 0 0 A�GREEMEAT GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO NEWPORT -MESA UNIFIED SCHOOL DISTRICT THIS AGREEMENT made and entered into as of _ September, 1996, by and between the City Of Newport Beach, a Municipal Corporation and charter City, hereinafter referred to as 'City," and Newport-Mesa Unified School District, California Public School District, hereinafter referred to as "User". RECITALS The City is the exclusive retail water purveyor, including water for residential, industrial, commercial, public agency, agricultural and other uses within the City's boundaries, and produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced from the Orange County ground water basin; the basin is managed by the Orange County Water District ( "OCWD "). 2. User is a California Public School District within the boundaries of the City, and currently purchases potable own use at Corona Del Mar High School (athletic fields to as "Sites." jurisdictional and service water from the City for its only) hereinafter, referred 3. City has agreed to buy reclaimed water from OCWD and resell such reclaimed water to various large volume water customers. OCWD operates a water reclamation project known as the Green Acres Project ( "GAP"). GAP is being extended into the City's service area for the purpose of conserving and beneficially reusing wastewater received by OCWD from the County Sanitation Districts of Orange County, such wastewater having been treated, transported and sold by OCWD as "GAP Water" to the City to be resold to Users. GAP Water is suitable for use in landscape and agricultural irrigation, and industrial and construction purposes, in lieu of potable water. 4. User desires to purchase GAP water from the City for allowable, suitable nonpotable uses, specifically, for landscape irrigation, in lieu of potable water currently purchased from the City. 5. The City is willing to sell GAP water to User. NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions herein contained, the parties hereto.agree as follows: 0 GAP End -User Agreement Oewport-Mesa Unified School District September, 1996 1. TRANSMISSION PIPELINE FACILITY A transmission pipeline will be constructed by OCWD as part of GAP, that will convey GAP water to various locations within the City boundaries, including the Site. All GAP water will originate from the Green Acres Project Water Treatment Facility, located at the offices of OCWD at 10500 Ellis Avenue, Fountain Valley, California. OCWD owns the main transmission pipeline facility and service line which serves User upstream of the City's reclaimed water service meter vault. The OCWD pipeline facility and service lines shall be referred to herein as 'Project Facilities." City owns, operates and maintains all reclaimed water service meter vault piping, by -pass line piping, service meter vault, service meter and control valves, collectively hereinafter such facilities shall be referred to as "City Facilities." User owns and maintains the pipeline, (e.g., pressure regulator, pressure regulator vault, control valve, control valve vault, check valve, warning signs, warning tags, etc.) and all appurtenances downstream of the City's reclaimed water service meter vault, hereinafter such facilities shall be referred to as "On -Site Facilities." The point where User's piping connects to downstream end of the City's reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection." That portion of the Project Facilities and City Facilities located within the City's boundaries will be operated and maintained by the City as a contractor for OCWD for the purpose of distributing GAP water to be purchased from the City by User. User shall also own and maintain all devices on User's Site potable water system including, but not limited to, (drinking fountain covers, backflow preventers, identification tags, etc.) 2. RULES AND REGULATIONS 9 User agrees that during the term of this Agreement and any extension thereof, User shall comply with all rules and regulations promulgated now and in the future by the City relative to the sale and use of GAP water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of GAP water, hereinafter referred to as "Project Rules." 3. QUANTITY OF WATER TO BE PURCHASED BY USER; INSTANTANEOUS MAXIMUM FLOW The City agrees to supply GAP water to User, and User agrees to purchase, on an annual basis, thirty (30) acre -feet, as a minimum, , which is based on fifty (50) percent of the average annual use at the Site. GAP water flow demands to the Site shall not exceed an instantaneous maximum flow of three hundred and twenty (320) gallons per minute By entering into this Agreement, the City's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. To the extent that User's current use of its property necessitates the use of GAP water, User will continue to purchase GAP water. In the event that the current use of the property discontinues or is modified, User may modify or terminate this Agreement as applicable, subject to the conditions set forth in Section 13 of this Agreement. Page 2 of 11 �f 0 • GAP End -User Agreement Wvport-Mesa Unified School District September, 1996 If at any time during construction or operation of the On -Site Facilities, real or potential hazards, or evidence of a hazard, are found to exist, the City reserves the right, and has the authority, to take action to insure that the situation shall be remedied, and to protect the public health, as further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of the City to terminate GAP water service to the Site. 4. QUALITY OF WATER TO BE PURCHASED BY USER; PRESSURE The City agrees, subject to compliance by OCWD, that all GAP water delivered to User from the Project Facilities pursuant to this Agreement shall conform to the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, state and local health departments, and federal, state and county agencies, hereinafter referred to as 'Regulatory Agencies," having jurisdiction to fix minimum standards for the quality of water, with respect to User's anticipated use. GAP water shall be delivered on a continuous basis at a pressure of not less than sixty pounds per square inch (60 psi) for the Site at the Point of Connection between the hours of 9:00 p.m. and 6:00 a.m. User shall not exert demand for GAP water between the hours of 6:00 a.m. and 9:00 p.m without User's trained maintenance personnel or designated representative being present. • 5. PRICE OF PROJECT WATER For the term of this Agreement, the price to be paid by User for GAP water delivered by the City shall not exceed eighty percent (80 %) of the City's retail rate for potable water, as established by resolution of the City Council and enforced on the date of delivery of GAP water. The retail rate for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least 10 days prior to the adoption of a resolution establishing the water rate of the City and/or modifying the purchase price of GAP water, the City shall give written notice to User of a hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. 0 6. METERING AND MEASUREMENT OF FLOWS User agrees that at locations where irrigation water is used exclusively, the City shall maintain, at its own expense, control valves and meters (sized at four - inches [4 °1) for Corona Del Mar High School for the purpose of measuring the quantity of GAP water delivered pursuant to the terms of this Agreement from the City to User at the Point of Connection where such water is delivered to User. The City shall read the service meters and record GAP water usage for User on a monthly basis. OCWD shall be given access to said service meters to take readings. Page 3 of 11 i GAP End -User Agreement eewport-Mesa Unified School District September, 1996 7. PAYMENT FOR PROJECT WATER The City shall invoice User for the price of the GAP water purchased by User every other month, as part of the City's regular billing cycle. Said invoices shall be paid within thirty (30) days of the billing date. 8. LIMITATION OF USE User understands and agrees that GAP water delivered from OCWD's Project Facilities pursuant to the terms hereof has restricted uses, and User agrees to use such only upon the property of User and only for those uses and purposes provided for herein which are legally permissible under the laws of the state, the Project Rules and rules adopted by the City, by OCWD, and by Regulatory Agencies. 9. PERMITS This Agreement is conditioned on OCWD and User obtaining the necessary permits relating to the use of GAP water for landscape irrigation. User agrees to file any and all applications and undertake such proceedings as may be necessary to enable OCWD, the City and User to carry out the undertaking described herein, and to pursue such application and proceedings in good faith and with due diligence, including any application required to be issued to OCWD by Regulatory Agencies. User understands and agrees that User, where applicable, will -comply with the regulations set forth in permits and any fees will be paid for by the City or OCWD. 10. CONDITIONS PRECEDENT • This Agreement is conditioned upon OCWD's completing and making GAP operational , including: (1) transmission pipeline extension to User; (2) OCWD making GAP water available for sale; and (3) issuance of all necessary permits, certificates and approvals by all Regulatory Agencies having jurisdiction over the construction and operation of water reclamation facilities and over the production, distribution, sale and use of GAP water. This Agreement is conditioned further upon OCWD's being able to acquire acceptable right -of -way access from the Project Facilities to the Site for transportation pipeline purposes, and is further conditioned upon approval by Regulatory Agencies or agencies having grant funding responsibilities with regard to the Project Facilities. 11. CONDITIONS SUBSEQUENT In the event that the City is unable to deliver GAP water through Project Facilities, the City reserves the right to notify User a minimum of 24 hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. The City shall provide User with a minimum of 24 hours advance notice when resumption of GAP water delivery is expected at User's Site. In the event the City is unable to provide delivery of GAP water, the City will provide water to User from alternative sources at the full potable water rate, subject to the right of the City to determine allocation of all water, both GAP and potable, in the event of emergencies. Furthermore, in the event that OCWD ceases producing and distributing GAP water Page 4 of 11 • GAP End -User Agreement Owport-Mesa Unified School District September. 1996 . or in the event that the treatment criteria imposed by any Regulatory Agency exceeds those existing as of the date of this Agreement, the City shall have the option of canceling this Agreement. The City shall convert service on the Site back to a potable water system(s) at no expense to User if this Agreement is canceled by the City within ten (10) years immediately following the date hereof. The cost of conversion back to a potable water system shall be borne by User if said conversion occurs after ten (10) years from the date of this Agreement. 12. LIMITATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of GAP water from the Green Acres Project beyond that usable by User. The City reserves the right to enter into contracts with others for the sale of any GAP water. 13. TERM The term of this Agreement shall be ten (10) years from the day and year first above written. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. The parties do hereby also agree that one (1) year prior to the end of the term of this Agreement, all of the terms herein shall be reviewed, and if all of the terms are mutually agreed upon following such review, this Agreement shall be renewed. • 14. ASSIGNMENT This Agreement and the rights and benefits of the City hereunder may be assigned and transferred by the City to any entity which assumes the responsibilities and obligations of the City for the sale and distribution of GAP water to the User. 15. INDEMNIFICATION City shall indemnify, defend and save User harmless from and against, any and all liability, loss, cost, expense or damage sustained by or to any person or property and proximately caused by: (a) Any act, neglect, default or omission of City or any of its officers, agents, employees or representatives related to the performance of duties pursuant to this Agreement. ' (b) The design, construction, operation, or maintenance of any City facilities installed or constructed pursuant to this Agreement; or (c) The distribution or sale to User of GAP water that does not meet quality standards specified in Title 22 of the California Code of Regulations. 18 Page 5 of 11 • GAP End -User Agreement Gewport-Mesa Unified School District September, 1996 If User is sued for damages by reason of any of the acts, omissions or activities for which City is required to indemnify User pursuant to this Section, City shall defend • the action at its own expense and shall pay any judgment that may be rendered. In the event City fails or neglects to defend User in the Action, User may defend the action and any expenses, including reasonable attorneys' fees and cost which User pays or incurs in defending the action, and the amount of any judgment which User may be required to pay, shall be promptly reimbursed by City upon demand. The indemnification, defense and hold harmless obligations of City specified in this Section do not extend to damages, losses, injuries; lawsuits or claims resulting from the acts or omissions of User or its officers, agents, representatives and employees. 16. ATTORNEYS' FEES AND EXPENSES In the event that either party hereto brings any action, suit, arbitration or other proceeding against the other parry arising out of or relating to the subject matter of this Agreement, its validity or any of the terms or provisions thereof, then the prevailing party in such action, suit, arbitration or other proceeding shall recover from the other party its reasonable attorneys' fee costs incurred in connection therewith, in addition to any other relief to which it may be entitled. Said attorneys' fees shall include such fees for prosecuting or defending any appeal and shall be recoverable, and awarded for any supplemental proceedings until the final judgment is satisfied in full. 17. NOTICES 40 All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either of the parties hereto under this Agreement shall be personally served or deposited in the United States mail depository first class postage prepaid, and addressed as follows: City: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: Don Webb Public Works Director User: Newport -Mesa Unified School District 2985 -A Bear Street Costa Mesa, CA 92626 Attention: Carolyn B. Stocker, Executive Director Business Services & Auxiliary Operations Page 6 of 11 1� 0 0 GAP End-User Agreement Owport-Mesa Unified School District September, 1996 • or such other address as the City or User shall direct in writing. Service of any instrument or writing by mail shall be deemed complete 48 hours after depositing in United States mail depository. 18. SUCCESSORS This Agreement, and all of the provisions herein, shall be binding upon and inure to the benefit of the City and User, and their respective successors and assigns. • 0 Page 7 of 11 1�� GAP End -User Agreement ewport-Mesa Unified School District September, 1996 IN WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above. . APPROVED AS TO FORM: City of Newport Beach, a municipal corporation Robin Clauson Assistant City Attorney ATTEST: LaVonne Harkless City Clerk John Hedges Mayor Newport -Mesa Unified School District a private corporation Carolyn B. Stocker, Executive Director Business Services & Auxiliary Operations • • Page 8 of 11 1� • GAP End -User Agreement ewport-Mesa Unified School District September, 1996 . ACKNOWLEDGMENT OF CONSENT TO EXECUTION OF AGREEMENT The ORANGE COUNTY WATER DISTRICT hereby consents to the foregoing AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND NEWPORT -MESA UNIFIED SCHOOL DISTRICT REGARDING DELIVERY AND SALE OF GREEN ACRES PROJECT WATER AT CORONA DEL MAR HIGH SCHOOL (ATHLETIC FIELDS ONLY) entered into as of _ September, 1996, by and between the City of Newport Beach, as the Retailer of GAP Water, and Newport-Mesa Unified School District, as the User of GAP Water, for delivery and sale of GAP Water to Corona Del Mar High School (athletic fields only) , Newport Beach, CA, for landscape irrigation. APPROVED AS TO FORM ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California General Counsel President • de \09- 17- 96\2:20 General Manager Page 9 of 11 f�/ 0 0 AGREEMENT GREEN ACRES RECLAIMED WATER PROJECT . END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO THE BLUFFS HOMEOWNERS ASSOCIATION THIS AGREEMENT is made and entered into as of _ September, 1996 by and between the City Of Newport Beach, a Municipal Corporation and charter City, hereinafter referred to as "City," and the Bluffs Homeowners Association, a Private Corporation, hereinafter referred to as °User." RECITALS The City is the exclusive retail water purveyor, including water for residential, industrial, commercial, public agency, agricultural and other uses within the City's boundaries, and produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced from the Orange County ground water basin; the basin is managed by the Orange County Water District ( "OCWD "). 2. User is a private corporation within the jurisdictional and service boundaries of the City, and currently purchases potable water from the City for its own use within the • common areas of the Bluffs Greenbelt, Newport Beach, California, hereinafter, referred to as "Site." 3. City has agreed to buy reclaimed water from OCWD and resell such reclaimed water to various large volume water customers. OCWD operates a water reclamation project known as the Green Acres Project ( "GAP "). GAP is being extended into the City's service area for the purpose of conserving and beneficially reusing wastewater received by OCWD from the County Sanitation Districts of Orange County, such wastewater having been treated, transported and sold by OCWD as "GAP water" to the City to be resold to Users. GAP water is suitable for use in landscape and agricultural irrigation, and industrial and construction purposes, in lieu of potable water. 4. User desires to purchase GAP water from the City for allowable, suitable nonpotable uses, specifically, for landscape irrigation, in lieu of potable water currently purchased from the City. 5. The City is willing to sell GAP water to User. NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions herein contained, the parties hereto agree as follows: (J " 0 GAP End -User Agreement Bluffs Homeowners Association September, 1996 0 1. TRANSMISSION PIPELINE FACILITY A transmission pipeline will be constructed by OCWD as part of GAP, that will convey GAP water to various locations within the City boundaries, including the Site. All GAP water will originate from the Green Acres Project Water Treatment Facility, located at the offices of OCWD at 10500 Ellis Avenue, Fountain Valley, California. OCWD owns the main transmission pipeline facility and service line which serves User upstream of the City's reclaimed water service meter vault. The OCWD pipeline facilities and service lines shall be referred to herein as "Project Facilities.° City owns, operates and maintains all reclaimed water service meter vault piping, by- pass line piping, service meter vault, service meter and control valves, collectively hereinafter such facilities shall be referred to as °City Facilities." User owns and maintains the pipeline, (e.g., pressure regulator, pressure regulator vault, control valve, control valve vault, check valve, warning signs, warning tags, etc.) and all appurtenances downstream of the City's reclaimed water service meter vault, hereinafter such facilities shall be referred to as "On -Site Facilities." The point where User's piping connects to downstream end of the City's reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection." That portion of the Project Facilities and City Facilities located within the City's boundaries will be operated and maintained by the City as a contractor for OCWD for the purpose of distributing GAP water to be purchased from the City by User. User shall also own and maintain all devices on User's Site potable water system including, but not limited to, drinking fountain covers, backflow preventers, identification tags, etc. 9 2. RULES AND REGULATIONS User agrees that during the term of this Agreement and any extension thereof, User shall comply with all rules and regulations promulgated now and in the future by the City relative to the sale and use of GAP water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of GAP water, hereinafter referred to as "Project Rules." 3. QUANTITY OF WATER TO BE PURCHASED BY USER; INSTANTANEOUS MAXIMUM FLOW The City agrees to supply GAP water to User, and User agrees to purchase GAP water. The anticipated average annual GAP water usage at Site is estimated to be one hundred sixty (160) acre -feet. GAP water flow demands to the Site's three services (1720 S. Vista Del Oro, 2052 S. Vista Del Oro, and 2150 S. Vista Del Oro) shall not exceed an instantaneous maximum combined flow of nine hundred and sixty (960) gallons per minute from the three meters. By entering into -this Agreement, the City's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. To the extent that User's current use of its property necessitates the use of GAP water, User will continue to purchase GAP water. In the event that the current use of the property discontinues or is modified, User may modify or terminate this Agreement as applicable, subject to the conditions set forth in Section 13 of this Agreement. Page 2 of 9 f/71 • GAP End -User Agreement Bluffs Homeowners Association September, 1996 If at any time during construction or operation of the On -Site Facilities, real or potential hazards, or evidence of a hazard, are found to exist, the City reserves the right, and has the authority, to take action to insure that the situation shall be remedied, and to protect the public health, as further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of the City to terminate GAP water service to the Site. 4. QUALITY OF WATER TO BE PURCHASED BY USER; PRESSURE The City agrees, subject to compliance by OCWD, that all GAP water delivered to User from the Project Facilities pursuant to this Agreement shall conform to the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, state and local health departments, and federal, state and county agencies, hereinafter referred to as "Regulatory Agencies," having jurisdiction to fix minimum standards for the quality of water, with respect to User's anticipated use. GAP water shall be delivered on a continuous basis at a pressure of not less than sixty pounds per square inch (60 psi) at the Point of Connection between the hours of 9:00 p.m. and 6:00 a.m. User shall not exert demand for GAP water between the hours of 6:00 a.m. and 9:00 p.m., without User's trained maintenance personnel or designated representative being present. 5. PRICE OF PROJECT WATER • For the term of this Agreement, the price to be paid by User for GAP water delivered by the City shall not exceed eighty percent (80 %) of the City's retail rate for potable water, as established by resolution of the City Council and enforced on the date of delivery of GAP water. The retail rate for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least 10 days prior to the adoption of a resolution establishing the water rate of the City and/or modifying the purchase price of GAP water, the City shall give written notice to User of a hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. 6. METERING AND MEASUREMENT OF FLOWS User agrees that at locations where irrigation water is used exclusively, the City shall maintain, at its own expense, a control valve or valves and two (2) four -inch (4 ") meters and one (1) six -inch (6 ") meter for the purpose of measuring the quantity of GAP water delivered pursuant to the terms of this Agreement from the City to User at the Point of Connection where such water is delivered to User. The City shall read the service meters and record GAP water usage for User on a monthly basis. OCWD shall be given access to said service meters to take readings. Page 3 of 9 ,1�1 • GAP End -User Agreement *Bluffs Homeowners Association September, 1996 . 7. PAYMENT FOR PROJECT WATER The City shall invoice User for the price of the GAP water purchased by User every other month, as part of the City's regular billing cycle. Said invoices shall be paid within thirty (30) days of the billing date. 8. LIMITATION OF USE User understands and agrees that GAP water delivered from OCWD's Project Facilities pursuant to the terms hereof has restricted uses, and User agrees to use such only upon the property of User and only for those uses and purposes provided for herein which are legally permissible under the laws of the state, the Project Rules and rules adopted by the City, by OCWD, and by Regulatory Agencies. 9. PERMITS This Agreement is conditioned on OCWD and User obtaining the necessary permits relating to the use of GAP water for landscape irrigation. User agrees to file any and all applications and undertake such proceedings as may be necessary to enable OCWD, the City and User to carry out the undertaking described herein, and to pursue such application and proceedings in good faith and with due diligence, including any application required to be issued to OCWD by Regulatory Agencies. . User understands and agrees that User, where applicable, will comply with the regulations set forth in permits and any fees will be paid for by the City or OCWD. 10. MONITORING The City's responsibility for managing and monitoring the GAP water produced and delivered hereunder shall cease upon delivery to User at the Point of Connection. Managing and monitoring with respect to the storage and distribution of GAP water under the control of User shall be the responsibility of User. User further agrees to allow the City, Regulatory Agencies and/or OCWD's representatives to enter User's Site for monitoring, sampling, analysis and observation of User's On -Site Facilities. User understands and agrees that groundwater, underlying the Site may also need to be monitored for quality. User and OCWD shall locate a mutually agreeable place on the Site to construct a groundwater monitoring well as required by Regulatory Agencies. At no expense to the City or OCWD, User shall provide easement(s) to OCWD to construct, at no expense to the City or User, a groundwater monitoring well on the Site. User shall provide OCWD with access to such monitoring well for the purpose of carrying out all groundwater monitoring activities. 11. CONDITIONS PRECEDENT This Agreement is conditioned upon OCWD's completing and making GAP operational, including: (1) transmission pipeline extension to User; (2) OCWD making GAP water available for sale; and (3) issuance of all necessary permits, Page 4 of 9 Aj GAP End -User Agreement fF`ie Bluffs Homeowners Association September, 1996 certificates and approvals by all Regulatory Agencies having jurisdiction over the • construction and operation of water reclamation facilities and over the production, distribution, sale and use of GAP water. This Agreement is conditioned further upon OCWD's being able to acquire acceptable right -of -way access from the Project Facilities to the Site for transportation pipeline purposes, and is further conditioned upon approval by Regulatory Agencies or agencies having grant funding responsibilities with regard to the Project Facilities. 12. CONDITIONS SUBSEQUENT In the event that the City is unable to deliver GAP water through Project Facilities, the City reserves the right to notify User a minimum of 24 hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. The City shall provide User with a minimum of 24 hours advance notice when resumption of GAP water delivery is expected at User's Site. In the event the City is unable to provide delivery of GAP water, the City will provide water to User from alternative sources at the full potable water rate, subject to the right of the City to determine allocation of all water, both GAP and potable, in the event of emergencies. Furthermore, in the event that OCWD ceases producing and distributing GAP water or in the event that the treatment criteria imposed by any Regulatory Agency exceeds those existing as of the date of this Agreement, the City shall have the option of canceling this Agreement. The City shall convert service on the Site back to a potable water system(s) at no expense to User if this Agreement is canceled by the City within fifteen (15) years immediately following the date hereof. The cost of . conversion back to a potable water system shall be borne by User if said conversion occurs after fifteen (15) years from the date of this Agreement. 13. LIMITATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of GAP water from the Green Acres Project beyond that usable by User. The City reserves the right to enter into contracts with others for the sale of any GAP water. 14. TERM The term of this Agreement shall be fifteen (15) years from the day of first use of GAP water at Site. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. The parties do hereby also agree that one (1) year prior to the end of the term of this Agreement, all of the terms herein shall be reviewed, and if all of the terms are mutually agreed upon following such review, this Agreement shall be renewed. 15. ASSIGNMENT This Agreement and the rights and benefits of the City hereunder may be assigned and transferred by the City to any entity which assumes the responsibilities and obligations of the City for the sale and distribution of GAP water to the User. Page 5 of 9 ;�1 • 0 • L� !y / i • 16. INDEMNIFICATION GAP End -User Agreement 061utfs Homeowners Association September, 1996 City shall indemnify, defend and save User harmless from and against, any and all liability, loss, cost, expense or damage sustained by or to any person or property and proximately caused by: (a) Any act, neglect, default or omission of City or any of its officers, agents, employees or representatives related to the performance of duties pursuant to this Agreement. (b) The design, construction, operation, or maintenance of any City facilities Installed or constructed pursuant to this Agreement; or (c) The distribution or sale to User of GAP water that does not meet quality standards specified in Title 22 of the California Code of Regulations. If User is sued for damages by reason of any of the acts, omissions or activities for which City is required to indemnify User pursuant to this Section, City shall defend the action at its own expense and shall pay any judgment that may be rendered. in the event City fails or neglects to defend User in the Action, User may defend the action and any expenses, including reasonable attorneys' fees and cost which User pays or incurs in defending the action, and the amount of any judgment which User may be required to pay, shall be promptly reimbursed by City upon demand. The indemnification, defense and hold harmless obligations of City specified in this Section do not extend to damages, losses, injuries, lawsuits or claims resulting from the acts or omissions of User or its officers, agents, representatives and employees. 17. ATTORNEYS' FEES AND EXPENSES In the event that either party hereto brings any action, suit, arbitration or other proceeding against the other party arising out of or relating to the subject matter of this Agreement, its validity or any of the terms or provisions thereof, then the prevailing party in such action, suit, arbitration or other proceeding shall recover from the other party its reasonable attorneys' fee costs incurred in connection therewith, in addition to any other relief to which it may be entitled. Said attorneys' fees shall include such fees for prosecuting or defending any appeal and shall be recoverable, and awarded for any supplemental proceedings until the final judgment is satisfied in full. Page 6 of 9 GAP End -User Agreement Bluffs Homeowners Association September, 1996 18. NOTICES . All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either of the parties hereto under this Agreement shall be personally served or deposited in the United States mail depository first class postage prepaid, and addressed as follows: City: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA. 92658 -8915 Attention: Don Webb Public Works Director User: The Bluffs Homeowners Association P.O. Box 8167 Newport Beach, CA 92658 -8167 Attention: Kevin Shannon General Manager or such other address as the City or User shall direct in writing. Service of any instrument or writing by mail shall be deemed complete 48 hours after depositing in • United States mail depository. 19. SUCCESSORS This Agreement, and all of the provisions herein, shall be binding upon and inure to the benefit of the City and User, and their respective successors and assigns. Page 7 of 9 j' 0 GAP End -User Agreement *Bluffs Homeowners Association September, 1996 • WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above. APPROVED AS TO FORM: Robin Clauson Assistant City Attorney ATTEST: LaVonne Harkless City Clerk • E %r l 1 City of Newport Beach, a municipal corporation John Hedges Mayor The Bluffs Homeowners Association a private corporation Ron Foster President Robert Orman Secretary Page 8 of 9 • GAP End -User Agreement Bluffs Homeowners Association September, 1996 ACKNOWLEDGMENT OF CONSENT TO EXECUTION OF AGREEMENT The ORANGE COUNTY WATER DISTRICT hereby consents to the foregoing "AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND THE BLUFFS HOMEOWNERS ASSOCIATION REGARDING DELIVERY AND SALE OF GREEN ACRES PROJECT WATER WITHIN THE COMMON AREAS OF THE BLUFFS GREENBELT" entered into as of _ September, 1996 by and between the City of Newport Beach, as the Retailer of GAP Water, and The Bluffs Homeowners Association, as the User of GAP Water, for delivery and sale of GAP Water to The Bluffs Homeowners Association for use within the common areas of the Bluffs Greenbelt, Newport Beach, CA, for landscape irrigation. APPROVED AS TO FORM General Counsel de109 -04- 9613:15 ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California President General Manager Page 9 of 9 is r1 LJ 0 • • DRAFT 0 AGREEMENT GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO BIG CANYON COUNTRY CLUB THIS AGREEMENT is made and entered into this _ day of , 1996 by and between the City of Newport Beach, a Municipal Corporation, hereinafter referred to as "CITY ", and the Big Canyon Country Club, a private, non-profit mutual benefit corporation, hereinafter referred to as "USER ". RECITALS 1. CITY is the exclusive retail water purveyor, providing water for residential, industrial, commercial, public agency, agricultural and other uses within CITY's boundaries. CITY produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced . from the Orange County groundwater basin, which basin is managed by the Orange County Water District ( "OCWD "). 2. USER is a private corporation within the jurisdictional and service boundaries of CITY, and currently purchases potable water from CITY for its own use at Big Canyon Country Club, One Big Canyon Drive, Newport Beach, California, hereinafter, referred to as "SITE ". 3. CITY has agreed to buy reclaimed water from OCWD and resell such reclaimed water pursuant to the terms and conditions specified in that certain agreement entitled "Agreement Between Orange County Water District and City of Newport Beach Regarding Distribution and Sale of Green Acres Project Water" dated January 16, 1991, and as it may be subsequently amended, hereinafter referred to as "Retailer Agreement." City executed the Retailer Agreement for the purpose of seeking to provide its present and future residents with a supplemental source of water to meet their needs and to assist in the statewide objective of conserving and utilizing to the maximum degree possible the water of the People of the State of California, which water shall be recovered from the operation known as the "Green Acres Project" for all possible beneficial uses. 0 GAP End-User Agreement Big Canyon Country Club September, 1996 4. The Green Acres Project is being planned for extension into CITY's service area • for the purpose of conserving and beneficially reusing wastewater from the County Sanitation Districts of Orange County or the Irvine Ranch Water District, ( "IRWD "), such wastewater having been treated by OCWD or IRWD to standards established by the State Health Department and transported and sold by OCWD as "Project Water" to CITY to be resold to Project Customers. Such Project Water must be deemed suitable by State Health Department for use in landscape and agricultural irrigation and for industrial and construction purposes in lieu of potable water. 5. USER desires to purchase Project Water from CITY for allowable, suitable nonpotable uses, specifically landscape irrigation of its golf course and certain related facilities, in lieu of potable water currently purchased from CITY, and CITY is willing to sell Project Water to USER. NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions of this Agreement, the parties agree as follows: 1. TRANSMISSION PIPELINE FACILITY It is the intent of OCWD to construct a transmission pipeline as part of the Green Acres Project that will convey Project Water to various locations within CITY • boundaries, including the SITE. All Project Water will originate from either the OCWD Green Acres Project Water Treatment Facility, or a similar facility operated by IRWD. OCWD owns the main transmission pipeline facility and service line which serves USER upstream of CITY's reclaimed water service meter vault, which facility and line shall hereinafter be referred to as "Project Facilities ". CITY owns, operates and maintains all reclaimed water service meter vault piping, by -pass line piping, service meter vault, service meter and control valves, which facilities shall hereinafter be referred to collectively as "City Facilities." USER owns and maintains the pipelines, pump station, backflow preventers, warning signs, warning tags and all appurtenances downstream of CITY's reclaimed water service meter vault, which facilities shall hereinafter be referred to as "On -Site Facilities" and are more fully set forth on the drawings attached hereto as Exhibit A. The point where USER's piping connects to the downstream end of CITY's reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection ". The Point of Connection will be in the Jamboree Road parkway near USER's maintenance yard entrance approximately 1,300 feet northerly of San Joaquin Hills Road. That portion of the Project Facilities and City Facilities located within CITY's boundaries will be operated and maintained by CITY as a contractor for OCWD for the purpose of distributing Project Water to be purchased from CITY by USER. Page 2 of 12 • . GAP End -User Agreement Big Canyon Country Club September, 1996 2. RULES AND REGULATIONS USER agrees that during the term of this Agreement and any extension thereof; USER shall comply with all rules and regulations promulgated now and in the future by CITY relative to the sale and use of Project Water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of Project Water, which rules shall hereinafter be referred to as "Project Rules." In the event that CITY and/or OCWD or any other governmental agency shall promulgate any rule or regulation that shall increase above the potable rates, the cost of USER's transportation and/or use of Project Water as contemplated herein, USER may terminate this Agreement, upon sixty (60) day notice to CITY and as set forth in Section 14 of this Agreement. 3. QUANTITY OF WATER TO BE PURCHASED BY USER; INSTANTANEOUS MAXIMUM FLOW CITY agrees to supply Project Water to USER, and USER agrees to purchase Project Water. Average annual Project Water usage at Site is estimated to be three hundred and sixty (360) acre -feet. Project Water flow demands at the SITE's service shall not exceed an instantaneous maximum flow of two thousand two hundred (2,200) gallons per minute. By entering into this • Agreement, CITY's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. In the event that the current use of the property discontinues or is modified, USER may modify or terminate this Agreement, as applicable, subject to the conditions set forth in Section 14 of this Agreement. If at any time during construction or operation of the On -Site Facilities, real or potential hazards, or evidence of a hazard, are found to exist, CITY reserves the right, and has the authority, to take action to insure that the situation be remedied and to protect the public health, as further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of CITY to terminate Project Water service to SITE. 4. QUALITY OF WATER TO BE PURCHASED BY USER; PRESSURE CITY agrees, subject to compliance by OCWD, that all PROJECT Water delivered to USER from the Project Facilities pursuant to this Agreement shall conform to (i) the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, State and local health departments, and Federal, State and county agencies having jurisdiction to fix minimum standards for the quality of water with respect to USER's anticipated use, which Board, health departments and agencies shall • hereinafter be referred to as "Regulatory Agencies "; and (ii) such minimum Page 3 of 12 . GAP End -User Agreement Big Canyon Country Club September, 1996 standards, set by Regulatory Agencies as will prevent the Project Water from causing any damage to USER's property and all plants and vegetation located thereon. If the Project Water fails to conform to the above requirements, CITY and OCWD covenants that CITY will terminate the flow of Project Water to the SITE and provide potable water in its place, and USER may terminate this Agreement if standards are not met within sixty (60) days. CITY acknowledges that excess water from USER irrigation operations and from lakes on the SITE drain into the Upper Newport Bay, and that once USER begins to use Project Water for irrigation purposes, any excess Project Water will drain into the Upper Newport Bay as well. CITY covenants to indemnify USER for those costs and expenses arising out of any modification or termination of USER's right to allow its excess water to drain into the Upper Newport Bay when the modification or termination is ordered because of USER's use of Project Water as contemplated herein. Project Water shall be delivered on a continuous basis at a pressure of not less than ninety pounds per square inch (90 psi) for demands under thirteen hundred gallons per minute (1,300 gpm), and not less than eighty pounds per square inch (80 psi) for demands from thirteen hundred one gallons per minute (1,301 gpm) to two thousand two hundred gallons per minute (2,200 gpm) at the Point of Connection between the hours of 9:00 p.m. to 6:00 a.m. USER shall not exert a demand for Project Water between the hours of 6:00 a.m. and 9:00 p.m. unless USER's staff is present to ensure that the public does not come in contact with Project Water.. 5. PRICE OF PROJECT WATER For the term of this Agreement, the price to be paid by USER for Project Water delivered by CITY shall not exceed the lower of (a) eighty percent (80 %) of the CITY's retail rate for potable water, as established by resolution of the City Council and enforced on the date of delivery of the Project Water, or (b) the. lowest rate then offered by CITY to any purchaser of reclaimed water, whether such rate is determined as a percentage of CITY's retail rate for potable water or otherwise. The retail rate for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least ten (10) days prior to the adoption of a resolution establishing the water rate of CITY and/or modifying the purchase price of Project Water, CITY shall provide notice as prescribed in the City Municipal Code of a public hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. Page 4 of 12 9 • ` GAP End -User Agreement Big Canyon Country Club September, 1996 6. METERING AND MEASUREMENT OF FLOWS USER agrees that at locations where irrigation water is used exclusively, CITY shall maintain, at its own expense, a control valve or valves and a meter for the purpose of measuring the quantity of Project Water delivered pursuant to the terms of this Agreement from CITY to USER at the Point of Connection where such water is delivered to USER. CITY shall periodically read the service meter and record usage of Project Water onto a schedule. OCWD shall be given access to said service meter to take readings. 7. PAYMENT FOR PROJECT WATER CITY shall invoice USER for the price of the Project Water purchased by USER as part of CITY's regular billing cycle. Said invoices shall be paid within nineteen (19) days of the billing date, CITY retains the right to change billing cycles and due dates as necessary, upon sixty (60) days prior notice to USER, so long as such change is consistent with formally adopted City wide practice and procedures and State law. 8. LIMITATION OF USE USER understands and agrees that Project Water delivered from OCWD's . Project Facilities pursuant to the terms hereof has restricted uses, and USER agrees to use the Project Water only upon the property of USER for the irrigation of its golf course and related facilities and only for those uses and purposes provided for herein which are legally permissible under the laws of the State, the Project Rules and rules adopted by CITY, by OCWD, and by Regulatory Agencies. 9. COVENANTS CITY hereby covenants as follows: (a) There will be sufficient Project Water to meet all of USER's irrigation needs with respect to the SITE. (b) All actions taken by CITY with respect to Project Water, Project Facilities and City Facilities have complied and will comply with all regulations promulgated by all Regulatory Agencies and all other applicable laws. (c) The water quality parameter limits of the Project Water during the term(s) of this Agreement will be as shown on the chart attached hereto as Exhibit C. Page 5 of 12 �l . GAP End -User Agreement Big Canyon Country Club September, 1996 (d) CITY will provide USER with all engineering support requested by USER, including the assistance of CITY engineers, and other staff, to assist in the review of USER's irrigation system red_ esign for the purposes contemplated herein. (e) At CITY's cost, CITY will make presentations to USER, USER's club members and related homeowners' associations with respect to the Green Acres Project and Project Water. (f) CITY acknowledges and agrees that USER may use potable water to irrigate putting greens, the perimeter of selected fairways located adjacent to residences, and elsewhere on the SITE as agreed to by USER and CITY and within acceptable State Health Department standards. 10. INDEMNIFICATION CITY agrees to protect, indemnify, defend, save and hold harmless USER, its directors, agents and employees from and against any and all loss, liability, expense or damage of any kind or nature and from any suits, claims or demands, including (i) all consequential damages; (ii) all damages to any natural resources, and the costs of any required or necessary repair, clean up, response cost, or detoxification of the SITE or any portion thereof, and the preparation and implementation of any closure, remedial or other required plans; and (iii) all costs and expenses incurred in connection with clauses (i) • and (ii), including all attorneys' fees and expenses, whether in suit or not, which arise directly or indirectly out of (x) the use by USER of the Project Water as contemplated herein, (y) the existence or alleged existence of any Hazardous Substances (as defined below) in the Project Water or (z) the removal of or failure to remove any Hazardous Substances from the Project Water unless such suit, claim or demand is caused by the negligence or willful misconduct of USER, its directors, agents and employees, the negligent operation, maintenance or repair by USER of Project Water distribution and on site facilities; or USER's reuse or misapplication of Project Water on the Site. The foregoing indemnity shall apply to any residual contamination on, under or about the SITE and to any contamination of any property or natural resources arising from the Project Water. Upon receiving knowledge of any suit, claim or demand asserted by a third party that USER believes is covered by this indemnity, USER shall give CITY and OCWD notice of the matter and an opportunity to defend it, at CITY's and OCWD's cost and expense, with legal counsel satisfactory to USER. USER may also require CITY and OCWD to so defend the matter. CITY and OCWD will pay all fees or penalties imposed by any Regulatory Agency or any other governmental authority for any violation of any code, regulation or law with respect to the transportation, use or chemical composition of the Project Water. 0 Page 6 of 12 . • GAP End -User Agreement Big Canyon Country Club September, 1996 . The obligations of CITY and OCWD under this Section 10 shall survive the term(s) of this Agreement. As used herein, "Hazardous Substances" shall mean (i) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Law (as defined below) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "contaminant" or any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitabili- ty, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity"; and (ii) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment. "Environmental Law" shall mean shall mean any and all present and future Federal, state and local laws (whether under common law, statute or otherwise), ordinances, regulations, permits, guidance documents, policies, and any other requirements of governmental au- thorities relating to health, safety, the environment or to any Hazardous Substances. . 11. PERMITS This Agreement is conditioned upon OCWD and CITY obtaining the necessary permits relating to the use of Project Water for landscape irrigation. All costs of obtaining such permits shall be borne by CITY. CITY agrees to file in USER's name, with USER's cooperation, any and all applications and undertake such proceedings as may be necessary to enable OCWD, CITY and USER to carry out the undertaking described herein, and to pursue such application and proceedings in good faith and with due diligence, including any application required to be issued to OCWD by Regulatory Agencies. USER understands. and agrees that USER must comply with the regulations set forth in permits if such permits apply to USER, provided that such compliance by USER shall not materially increase the cost of Project Water or unreasonably interfere with USER's golf course and related operations. 12. ACCESS USER agrees to allow CITY, Regulatory Agencies and/or OCWD's representatives to enter USER's SITE for sampling, analysis and observation of USER's On Site Facilities. • Page 7 of 12 z i� . GAP End -User Agreement Big Canyon Country Club September, 1996 13. CONDITIONS PRECEDENT This Agreement is conditioned upon OCWD's completing and making operational the Green Acres Project by July 1, 1998, including the following: (1) the transmission pipeline is extended to the Site; (2) OCWD makes Project Water available for sale; and (3) all necessary permits, certificates and approvals are issued by all Regulatory Agencies having jurisdiction over the construction and operation of water reclamation facilities and over the production, distribution, sale and use of Project Water. This Agreement is further conditioned upon (i) OCWD's acquiring by July 1, 1998, acceptable right -of -way access from the Project Facilities to the SITE for transportation pipeline purposes, and (ii) OCWD and CITY gaining by July 1, 1998, the approval by all federal, state and local agencies having regulatory jurisdiction or grant funding responsibilities with respect to the Project Facilities. If the conditions specified in this Section 13 are not met within the given time limits, USER may cancel this Agreement. 14. CONDITIONS SUBSEQUENT In the event that CITY is unable to deliver Project Water through Project Facilities, CITY reserves the right to provide USER with a minimum of seventy - two (72) hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. CITY shall provide USER with a minimum of twenty -four (24) hours advance notice when resumption of the delivery of . Project Water to USER's SITE is expected. In the event CITY is unable to deliver Project Water to USER or defaults under this Agreement,. CITY must provide USER with water from alternative sources at the full potable water rate, subject to the right of CITY to determine allocation of all water, both Project Water and potable, in the event of emergencies. If USER terminates this Agreement as authorized under the terms of this Agreement, CITY must provide USER with potable water in the place of Project Water. Furthermore, in the event that OCWD ceases producing and distributing Project Water or in the event that the treatment criteria imposed by any Regulatory Agencies exceeds those existing as of the date of this Agreement, either CITY or USER shall have the option to cancel this Agreement. CITY shall convert service on the SITE back to a potable water system(s) at no expense to USER if this Agreement is canceled by CITY during the initial term of this Agreement or USER pursuant to Sections 2 and 4 above. The cost of conversion back to a potable water system shall be bome by USER if said conversion occurs after . the initial term of this Agreement. Page 8 of 12 11 0 • 0 • • GAP End -User Agreement Big Canyon Country Club September, 1996 15. LIMITATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of Project Water from the Green Acres Project beyond that usable by USER. CITY reserves the right to enter into contracts with others for the sale of any Project Water so long as such contracts do not interfere with CITY's ability to supply sufficient Project Water to meet USER's requirements. 16. TERM The term of this Agreement shall be ten (10) years from the day and year first above written. USER shall have the option to extend said term for two (2) additional ten (10) year terms, provided that USER gives CITY written notice of such election at least six (6) months prior to the expiration of the previous term. The parties do hereby agree that any portion of this Agreement may be revised. by written amendment at any time by mutual agreement of the parties hereto. 17. ASSIGNMENT This Agreement and the rights and benefits of CITY hereunder may be assigned and transferred by CITY to any entity which assumes the responsibilities and obligations of CITY for the sale and distribution of Project Water to USER, provided, however, that CITY shall remain fully liable for all of the responsibilities and obligations of CITY hereunder. This Agreement and the rights and benefits of USER hereunder shall not be assigned or transferred by USER without written consent from CITY and OCWD, which consent shall not be unreasonably withheld. 18. ARBITRATION (a) CITY, OCWD and USER hereby agree that all controversies and claims arising directly or indirectly out of this Agreement shall at the written . request of any parry be arbitrated pursuant to the applicable rules of the American Arbitration Association. The arbitration shall occur in the State of California. Judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The Federal Arbitration Act shall apply to the construction and interpretation of this arbitration agreement. (b) A single arbitrator shall have the power to render a maximum award of one hundred thousand dollars. When any party files a claim in excess of this amount, the arbitration decision shall be made by the majority vote of three arbitrators. No arbitrator shall have the power to restrain any act of any party. Page 9 of 12 • . GAP End-User Agreement Big Canyon Country Club September, 1996 (c) No provision of subparagraph (a) shall limit the right of any party to exercise self -help remedies or to obtain any provisional or ancillary remedies (including but not limited to injunctive relief) from a court of competent jurisdiction. The institution and maintenance of any remedy permitted above shall not constitute a waiver of the rights to submit any controversy or claim to arbitration. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding. 19. NOTICES All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either 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: CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: Public Works Director USER: Big Canyon Country Club One Big Canyon Drive Newport Beach, CA 92660 Attention: General Manager or such over address as CITY or USER shall direct in writing. Service of any instrument or writing by mail shall be deemed complete 48 hours after depositing in a United States mail depository. 20. SUCCESSORS This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of CITY and USER and their respective successors and assigns. Page 10 of 12 7: • • GAP End -User Agreement Big Canyon Country Club September, 1996 • WITNESS -WHEREOF, the parties herein have executed this Agreement as of the date set forth above. 0 APPROVED AS TO FORM Robin Clauson Assistant City Attorney ATTEST: LaVonne Harkless City Clerk CITY OF NEWPORT BEACH, a municipal corporation John Hedges Mayor BIG CANYON COUNTRY CLUB a private corporation General Manager Page 11 of 12 • GAP End -User Agreement Big Canyon Country Club September, 1996 ACKNOWLEDGMENT OF CONSENT TO • EXECUTION OF AGREEMENT The ORANGE COUNTY WATER DISTRICT hereby. consents to the foregoing "AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND BIG CANYON COUNTRY CLUB REGARDING DELIVERY AND SALE OF GREEN ACRES PROJECT WATER AT BIG CANYON COUNTRY CLUB° entered into this day of , 1996, by and between the CITY of Newport Beach, as the Retailer of Project Water, and Big Canyon Country Club, as the USER of Project Water, for delivery and sale of Project Water to Big Canyon Country Club, One Big Canyon Drive, Newport Beach, CA, for landscape irrigation. APPROVED AS TO FORM ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California General Counsel President General Manager F:\cat \debbie\ag\bigcan.doc 09 -16 -96 Page 12 of 12 • i AGREEMENT DRAFT GREEN ACRES RECLAIMED WATER PROJECT END -USER AGREEMENT FOR DELIVERY AND SALE OF RECLAIMED WATER TO NEWPORT BEACH COUNTRY CLUB THIS AGREEMENT is made and entered into this _day of . 1996 by and between the City of Newport Beach, a Municipal Corporation, hereinafter referred to as "CITY ", and the Newport Beach Country Club, a private corporation, hereinafter referred to as "USER ". RECITALS 1. CITY is the exclusive retail water purveyor, providing water for residential, industrial, commercial, public agency, agricultural and other uses within CITY's boundaries. CITY produces and distributes water in part purchased from Metropolitan Water District ( "MWD ") of Southern California and in part produced from the Orange County groundwater basin, which basin is managed by the Orange County Water District ( "OCWD "). • 2. USER is a private corporation within the jurisdictional and service boundaries of CITY, and currently purchases potable water from CITY for its own use at The Newport Beach Country Club, 1600 East Coast Highway, Newport Beach, California, hereinafter, referred to as "SITE ". 3. CITY has agreed to buy reclaimed water from OCWD and resell such reclaimed water pursuant to the terms and conditions specified in that certain agreement entitled "Agreement Between Orange County Water District and City of Newport Beach Regarding Distribution and Sale of Green Acres Project Water" dated January 16, 1991, and as it may be subsequently amended, hereinafter referred to as "Retailer Agreement." City executed the Retailer Agreement for the purpose of seeking to provide its present and future residents with a supplemental source of water to meet their needs and to assist in the statewide objective of conserving and utilizing to the maximum degree possible the water of the People of the State of California, which water shall be recovered from the operation known as the "Green Acres Project" for all possible beneficial uses. 4. The Green Acres Project is being planned for extension into CITY's service area for the purpose of conserving and beneficially reusing wastewater from the County Sanitation Districts of Orange County or the Irvine Ranch Water District, ( "IRWD "), such wastewater having been treated by OCWD or IRWD to standards established by the State Health Department and transported and sold by OCWD as "Project Water" to CITY to be resold to Project Customers. ?�J 9 • GAP End -User Agreement Newport Beach country Clib September, 1996 5. USER desires to purchase Project Water from CITY for allowable, suitable nonpotable uses, specifically landscape irrigation of its golf course and certain related facilities, in lieu of potable water currently purchased from CITY, and CITY is willing to sell Project Water to USER. NOW THEREFORE, in consideration of the facts recited above and the terms, covenants and conditions of this Agreement, the parties agree as follows: 1. TRANSMISSION PIPELINE FACILITY It is the intent of OCWD to construct a transmission pipeline as part of the Green Acres Project that will convey Project Water to various locations within CITY boundaries, including the SITE. All Project Water will originate from either the OCWD Green Acres Project Water Treatment Facility, or a similar facility operated by IRWD. OCWD owns the main transmission pipeline facility and service line which serves USER upstream of CITY's reclaimed water service meter vault, which facility and line shall hereinafter be referred to as "Project Facilities ". CITY owns, operates and maintains all reclaimed water service meter vault piping, by -pass line piping, service meter vault, service meter and control valves, which facilities shall hereinafter be referred to collectively as "City Facilities." USER owns and maintains the pipelines, pump station, backflow preventers, warning signs, warning tags and all appurtenances downstream of CITY's reclaimed water service meter vault, which facilities shall hereinafter be referred to as "On -Site Facilities" and are more fully set forth on the drawings attached hereto as Exhibit A. The point where USER's piping connects to the downstream end of CITY's reclaimed water service meter vault shall hereinafter be referred to as the "Point of Connection ". That portion of the Project Facilities and City Facilities located within CITYs boundaries will be operated and maintained by CITY as a contractor for OCWD for the purpose of distributing Project Water to be purchased from CITY by USER. USER shall also own and maintain all devices on USER's Site potable water system including, but not limited to, (drinking fountain covers, backflow preventers, air - gaps and lake fills, identification tags, etc.) 2. RULES AND REGULATIONS USER agrees that during the term of this Agreement and any extension thereof, USER shall comply with all rules and regulations promulgated now and in the future by CITY relative to the sale and use of Project Water and those rules and regulations promulgated now and in the future by OCWD relative to the transportation and use of Project Water, which rules shall hereinafter be referred to as "Project Rules." In the event that CITY and/or OCWD or any other governmental agency shall promulgate any rule or regulation that shall increase above the potable rates, the cost of USER's transportation and/or use of Project Water as contemplated herein, USER may terminate this Agreement, upon thirty (30) day notice to CITY and as set forth in Section 14 of this Agreement. Page 2 of 12 E • GAP End -User Agreement Newport Beach Cotntry Club September, 1996 3. QUANTITY OF WATER TO BE PURCHASED BY USER; • INSTANTANEOUS MAXIMUM FLOW CITY agrees to supply Project Water to USER, and USER agrees to purchase Project Water. The anticipated average annual Project Water usage at Site is estimated to be three hundred (300) acre -feet. Project Water flow demands at the SITE's service shall not exceed an instantaneous maximum flow of two thousand two hundred (2,200) gallons per minute. By entering into this Agreement, CITY's performance of this Agreement shall at all times be conditioned upon the continuous operation of the Project Facilities by OCWD. In the event that the current use of the property discontinues or is modified, USER may modify or terminate this Agreement, as applicable, subject to the conditions set forth in Section 14 of this Agreement. If at any time during construction or operation of the On -Site Facilities, real or potential hazards, or evidence of a hazard, are found to exist, CITY reserves the right, and has the authority, to take action to insure that the situation be remedied and to protect the public health, as further set forth in the Project Rules. Such remedies may include, but shall not be limited to, the right of CITY to terminate Project Water service to SITE. 4. QUALITY OF WATER TO BE PURCHASED BY USER; PRESSURE . CITY agrees that all PROJECT Water delivered to USER from the Project Facilities pursuant to this Agreement shall conform to (i) the current and future requirements established by the California Regional Water Quality Control Board - Santa Ana Region, State and local health departments, and Federal, State and county agencies having jurisdiction to fix minimum standards for the quality of water with respect to USER's anticipated use, which Board, health departments and agencies shall hereinafter be referred to as "Regulatory Agencies'; and (ii) such minimum standards, set by Regulatory Agencies as will prevent the Project Water from causing any damage to USER's property and all plants and vegetation located thereon. If the Project Water fails to conform to the above requirements, CITY and OCWD covenants that CITY will terminate the flow of Project Water to the SITE and provide potable water in its place, and USER may terminate this Agreement if standards are not met within thirty (30) days. CITY acknowledges that excess water from USER irrigation operations and from lakes on the SITE drain into the Upper Newport Bay, and that once USER begins to use Project Water for irrigation purposes, any excess Project Water will drain into the Upper Newport Bay as well. CITY covenants to indemnify USER for those costs and expenses arising out of any modification or termination of USER's right to allow its excess water to drain into the Upper Newport Bay when the modification or termination is ordered because of USER's use of Project Water as contemplated herein. Page 3 of 12 s!1 • •GAP End -User Agreement Newport Beach Couriry Clib September, 1996 Project Water shall be delivered on. a continuous basis at a pressure of not less than fifty pounds per square inch (50 psi) for demands up to fifteen hundred gallons per minute (1,500 gpm) at the Point of Connection between the hours of 9:00 p.m. to 6:00 a.m. USER shall not exert a demand for Project Water between the hours of 6:00 a.m. and 9:00 p.m. unless USER's staff is present to ensure that the public does not come in contact with Project Water. 5. PRICE OF PROJECT WATER For the term of this Agreement, the price to be paid by USER for Project Water delivered by CITY shall not exceed the lower of (a) eighty percent (80 %) of the CITY's retail rate for potable water, as established by resolution of the City Council and enforced on the date of delivery of the Project Water, or (b) the lowest rate then offered by CITY to any purchaser of reclaimed water, whether such rate is determined as a percentage of CITY's retail rate for potable water or otherwise. The retail rate for potable water shall be subject to modification as determined by and within the discretion of the City Council. At least ten (10) days prior to the adoption of a resolution establishing the water rate of CITY and/or modifying the purchase price of Project Water, CITY shall provide notice as prescribed in the City Municipal Code of a public hearing on the resolution and price which shall apply following adoption of said resolution. Failure to give notice shall not invalidate the action of the City Council. 6. METERING AND MEASUREMENT OF FLOWS • USER agrees that at locations where irrigation water is used exclusively, CITY. shall maintain, at its own expense, a control valve or valves and a meter for the purpose "of measuring the quantity of Project Water delivered pursuant to the terms of this Agreement from CITY to USER at the Point of Connection where such water is delivered to USER. CITY shall periodically read the service meter and record usage of Project Water onto a schedule. 7. PAYMENT FOR PROJECT WATER CITY shall invoice USER for the price of the Project Water purchased by USER as part of CITY's regular billing cycle. Said invoices shall be paid within nineteen (19) days of the billing date, CITY retains the right to change billing cycles and due dates as necessary, upon sixty (60) days prior notice to USER, so long as such change is consistent with formally adopted City wide practice and procedures and State law. Page 4 of 12 E • , GAP End -User Agreement Newport Beach Country Club September, 1996 8. LIMITATION OF USE USER understands and agrees that Project Water delivered from OCWD's Project Facilities pursuant to the terms hereof has restricted uses, and USER agrees to use the Project Water only upon the property of USER for the irrigation of its golf course and related facilities and only for those uses and purposes provided for herein which are legally permissible under the laws of the State, the Project Rules and rules adopted by CITY, by OCWD, and by Regulatory Agencies. 9. COVENANTS CITY hereby covenants as follows: (a) There will be sufficient Project Water to meet all of USER's irrigation needs with respect to the SITE. (b) All actions taken by CITY with respect to Project Water, Project Facilities and City Facilities have complied and will comply with all regulations promulgated by all Regulatory Agencies and all other applicable laws. (c) The water quality parameter limits of the Project Water during the term(s) of this Agreement will be as shown on the chart attached hereto as Exhibit B. (d) CITY will provide USER with all engineering support requested by USER, including the assistance of CITY engineers, and other staff, to assist in the review of USER's irrigation system redesign for the purposes contemplated herein. (e) At CITY's cost, CITY will make presentations to USER, USER's club members and related homeowners' associations with respect to the Green Acres Project and Project Water. (f) CITY acknowledges and agrees that USER may use potable water to irrigate putting greens, the perimeter of selected fairways located adjacent to residences, and elsewhere on the SITE as agreed to by USER and CITY and within acceptable State Health Department standards. 0 Page 5 of 12 10 :' 1 • GAP End -User Agreement Newport Beach Cotntry Club September, 1996 INDEMNIFICATION CITY agrees to protect, indemnify, defend, save and hold harmless USER, its directors, agents and employees from and against any and all loss, liability, expense or damage of any kind or nature and from any suits, claims or demands, including (i) all consequential damages; (ii) all damages to any natural resources, and the costs of any required or necessary repair, clean up, response cost, or detoxification of the SITE or any portion thereof, and the preparation and implementation of any closure, remedial or other required plans; and (iii) all costs and expenses incurred in connection with clauses (i) and (ii), including all attomeys' fees and expenses, whether in suit or not, which arise directly or indirectly out of (x) the use by USER of the Project Water as contemplated herein, (y) the existence or alleged existence of any Hazardous Substances (as defined below) in the Project Water or (z) the removal of or failure to remove any Hazardous Substances from the Project Water unless. such suit, claim or demand is caused by the negligence or willful misconduct of USER, its directors, agents and employees, the negligent operation, maintenance or repair by USER of Project Water distribution and on site facilities; or USER's misuse or misapplication of Project Water on the Site. The foregoing indemnity shall apply to any residual contamination on, under or about the SITE and to any contamination of any property or natural resources arising from the Project Water. Upon receiving knowledge of any suit, claim or demand asserted by a third party that USER believes is covered by this indemnity, USER shall give CITY notice of the matter and an opportunity to defend it, at CITY's cost and expense, with legal counsel satisfactory to USER. USER may also require CITY to so defend the matter. CITY will pay all fees or penalties imposed by any Regulatory Agency or any other governmental authority for any violation of any code, regulation or law with respect to the transportation, use or chemical composition of the Project Water. The obligations of CITY under this Section 10 shall survive the term(s) of this Agreement. As used herein, "Hazardous Substances" shall mean (i) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Law (as defined below) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "contaminant" or any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity"; and (ii) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment. "Environmental Law" shall mean shall mean any and all present and future Federal, state and local laws (whether Page 6 of 12 Il GAP End -User Agreement Newport Beach country C11b September, 19% under common law, statute or otherwise), ordinances, regulations, permits, guidance documents, policies, and any other requirements of governmental au- thorities relating to health, safety, the environment or to any Hazardous Substances. 11. PERMITS This Agreement is conditioned upon OCWD and CITY obtaining the necessary permits relating to the use of Project Water for landscape irrigation. All costs of obtaining such permits shall be bome by CITY. CITY agrees to file in USER's name, with USER's cooperation, any and all applications and undertake such proceedings as may be necessary to enable OCWD, CITY and USER to carry out the undertaking described herein, and to pursue such application and proceedings in good faith and with due diligence, including any application required to be issued to OCWD by Regulatory Agencies. USER understands and agrees that USER must comply with the regulations set forth in permits if such permits apply to USER, provided that such compliance by USER shall not materially increase the cost of Project Water or unreasonably interfere with USER's golf course and related operations. 12. CONDITIONS PRECEDENT . This Agreement is conditioned upon OCWD's completing and making operational the Green Acres Project by July 1, 1998, including the following: (1) the transmission pipeline is extended to the Site; (2) OCWD makes Project Water available for sale; and (3) all necessary permits, certificates and approvals are issued by all Regulatory Agencies having jurisdiction over the construction and operation of water reclamation facilities and over the production, distribution, sale and use of Project Water. This Agreement is further conditioned upon (i) OCWD's acquiring by July 1, 1998, acceptable right -of -way access from the Project Facilities to the SITE for transportation pipeline purposes, and (ii) OCWD and CITY gaining by July 1, 1998, the approval by all federal, state and local agencies having regulatory jurisdiction or grant funding responsibilities with respect to the Project Facilities. If the conditions specified in this Section 12 are not met within the given time limits, USER may cancel this Agreement. . 13. CONDITIONS SUBSEQUENT In the event that CITY is unable to deliver Project Water through Project Facilities, CITY reserves the right to provide USER with a minimum of seventy - two (72) hours advance notice, except in the event of emergencies, that said deliveries shall temporarily cease. CITY shall provide USER with a minimum of twenty -four (24) hours advance notice when resumption of the delivery of . Project Water to USER's SITE is expected; In the event CITY is unable to deliver Project Water to USER or defaults under this Agreement, CITY must provide USER with water at the full potable water rate if source is subject to the Page 7 of 12 GAP End -User Agreement Newport Beech Country Club September. 1996 right of CITY to determine allocation of all water, both Project Water and • potable, in the event of emergencies. If USER terminates this Agreement as authorized under the terms of this Agreement, CITY must provide USER with potable water in the place of Project Water. Furthermore, in the event that OCWD ceases producing and distributing Project Water or in the event that the treatment criteria imposed by any Regulatory Agencies exceeds those existing as of the date of this Agreement, either CITY or USER shall have the option to cancel this Agreement. CITY shall convert service on the SITE back to a potable water system(s) at no expense to USER if this Agreement is canceled by CITY during the initial term of this Agreement or USER pursuant to Sections 2 and 4 above. The cost of conversion back to a potable water system shall be bome by USER if said conversion occurs after the initial term of this Agreement. 14. LIMITATION OF CONTRACTUAL COMMITMENT Nothing herein shall be construed to commit any portion of Project Water from the Green Acres Project beyond that usable by USER. CITY reserves the right to enter into contracts with others for the sale of any Project Water so long as such contracts do not interfere with CITY's ability to supply sufficient Project Water to meet USER's requirements. 15. TERM The term of this Agreement shall be ten (10) years from the day and year first . above written. USER shall have the option to extend said term for two (2) additional ten (10) year terms, provided that USER gives CITY written notice of such election at least six (6) months prior to the expiration of the previous term. The parties do hereby agree that any portion of this Agreement may be revised by written amendment at any time by mutual agreement of the parties hereto. 16. ASSIGNMENT This Agreement and the rights and benefits of CITY hereunder may be assigned and transferred by CITY to any entity which assumes the responsibilities and obligations of CITY for the sale and distribution of Project Water to USER, provided, however, that CITY shall remain fully liable for all of the responsibilities and obligations of CITY hereunder. This Agreement and the rights and benefits of USER hereunder shall not be assigned or transferred by USER without written consent from CITY and OCWD, which consent shall not be unreasonably withheld. Page 8 of 12 �r CJ 0 0 GAP End -User Agreement Newport Beach country Ckub September, 1996 17. ARBITRATION (a) CITY and USER hereby agree that all controversies and claims arising directly or indirectly out of this Agreement shall at the written request of any parry be arbitrated pursuant to the applicable rules of the American Arbitration Association. The arbitration shall occur in the State of California. Judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The Federal Arbitration Act shall apply to the construction and interpretation of this arbitration agreement. (b) A single arbitrator shall have the power to render a maximum award of one hundred thousand dollars. When any party files a claim in excess of this amount, the arbitration decision shall be made by the majority vote of three arbitrators. No arbitrator shall have the power to restrain any act of any party. (c) No provision of subparagraph (a) shall limit the right of any party to exercise self -help remedies or to obtain any provisional or ancillary remedies (including but not limited to injunctive relief) from a court of competent jurisdiction. The institution and maintenance of any remedy permitted above shall not constitute a waiver of the rights to submit any controversy or claim to arbitration. The statute of limitations, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding. 18. NOTICES All notices, payments, transmittals of documentation and other writings required or permitted to be delivered or transmitted to either 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: CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: Public Works Director USER: Newport Beach Country Club 1600 East Coast Highway Newport Beach, CA 92660 Attention: Jerry L. Anderson Director of Golf Page 9 of 12 GAP End -User Agreement Newport Beech Country Club September, 1998 or such over address as CITY or USER shall direct in writing. Service of any • instrument or writing by mail shall be deemed complete 48 hours after depositing in a United States mail depository. 19. SUCCESSORS This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of CITY and USER and their respective successors and assigns. Page 10 of 12 • • GAPEnd -User Agreement Newport Beach Country Club September, 1996 • WITNESS WHEREOF, the parties herein have executed this Agreement as of the date set forth above. APPROVED AS TO FORM: CITY OF NEWPORT BEACH, a municipal corporation Robin Clauson Assistant City Attorney ATTEST: LaVonne Harkless City Clerk • • 1. John Hedges Mayor THE NEWPORT BEACH COUNTRY CLUB" a private corporation Jerry L. Anderson Director of Goff Page 11 of 12 0 ACKNOWLEDGMENT OF CONSENT TO EXECUTION OF AGREEMENT GAPEnd -User Agreement Newport Beach Country Club September, 1996 The ORANGE COUNTY WATER DISTRICT hereby consents to the foregoing "AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND NEWPORT BEACH COUNTRY CLUB REGARDING DELIVERY AND SALE OF GREEN ACRES PROJECT WATER AT NEWPORT BEACH COUNTRY CLUB" entered into this day of , 1996, by and between the CITY of Newport Beach, as the Retailer of Project Water, and The Newport Beach Country Club, as the USER of Project Water, for delivery and sale of Project Water to Newport Beach Country Club, 1600 East Coast Highway, Newport Beach, CA, for landscape irrigation. APPROVED AS TO FORM: ORANGE COUNTY WATER DISTRICT, a political subdivision of the State of California i, 0 General Counsel President General Manager • f: lcatldebbielaglcleanlnbcc. doc 09.16 -96 r1 Page 12 of 12 Ir1 LJ