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HomeMy WebLinkAboutSan Diego County Water Authority; 1992-10-08;I 0 JOINT PARTICIPATION AGREEMENT FOR DEVELOPMENT OF LOCAL RECLAIMED WATER SUPPLIES BETWEEN , THE SAN DIEGO COUNTY WATER AUTHORITY AND CAR LS BAD M U N IC I PAL. WATER DISTRICT THIS AGREEMENT is made this 8th day of October, 1992, between the San Dieg County Water Authority, hereinafter referred to as "Authority" and Carlsbad Municipi Water District, hereinafter referred to as "Agency," with respect to the following facts: R EC ITA& 1. Authority is empowered under the County Water Authority Act ("Act") develop, store, transport, provide, sell and deliver water for beneficial uses and purpose Agency as a member public agency of Authority under the Act, is a wholesa 2. purchaser of water distributed by Authority, and a seller of water for beneficial use. 3. Authority's water supply and demarid projections for its service area, includir that encompassed by Agency, show that additional sources of water must be developc to meet future needs; 4. Authority and Agency have determined that it is mutually beneficial f cost-effective local water reclamation projects to be developed to reduce reliance ( Authority's imported water supplies 5. Authority has adopted a plan and programs designed to encoura! development of an additional 100,000 acre feet per year of beneficial use wastewat throughout its service area over the next 20 years, thereby reducing the need f additional water that otherwise must be delivered from Authority's water supply syster The parties agree that the development and delivery of reclaimed water ' beneficial uses within the service areas of Agency and Authority will benefit the ent Agency and the region served by Authority; 6. 7. Authority desires to assist in increasing production and distribution reclaimed water by contracting with Agency Bo contribute all or a portion of Authorit estimated avoided cost of procuring additional water supplies on a periodic basis to t extent necessary to make the production of reclaimed water financially feasible. 8. The reclaimed water project planned within the service area of the Agency ' correspondingly reduce demand of Agency for water supply from Authority; e 0 NOW, THEREFORE, in consideration these facts, the parties agree as follows: Article 1 : Definitions. The following words and terms, unless otherwise expressly defined in their contex shall be defined to mean: 1 .I "Yield" shall mean the actual amount of Reclaimed Water which is delivered 1 End Users by a Project in any given year. "Yield" shall exclude any Reclaimed Watt which does not reduce Agency's demand for supply of water from Authority. 1.2 "Project" shall mean the project for the production of reclaimed wate developed under this Agreement, as described in Exhibit A. 1.3 "Project Costs" shall mean the capital, operational and maintenance costs I the Project, more specifically identified in Exhibit 6, hereto. Project Costs may include tt- costs of retrofitting private water systems to the extent necessary to permit the attainmei of Project Yield incurred by Agency in connection with the Project. 1.4 "Reclaimed Water" shall mean subpotable water reclaimed from effluent whic is not usable for human consumption, but is usable for limited special purposes, such i agricultural and landscape irrigation. 1.5 "End User" shall mean each of the ultimate users of Reclaimed Water produce by the Project. Article 2: Development and Operation of the Proiect. 2.1 Elements of Proiect The Project shall include all or a portion of the followir elements: transmission, storage, tertiary treatment, pumping and other facilities necessa for the production, storage and delivery of reclaimed water, as described in the "Proje Description," attached hereto as Exhibit A. 2.2 Firm Source of Water Agency warrants that it has a firm source of Reclaim6 Water to operate the Project described herein. 2.3 Authorit\/ Over Sewer Service Agency warrants that it has the authority provide sewer, water or other services as necessary to carry out the Project, or has contract with the provider of sewer service, in areas tributary to the Project, to obta effluent from which Reclaimed Water will be produced. Agency further warrants that ti residences, businesses, and industries in the area from which Reclaimed Water is to k derived are or can be required to discharge wastewater for treatment. 2.4 Riaht to Sell Water Agency warrants that it is able and has a right to sell su( Yield as is produced by the Project. -2- 0 0 2.5 Construction, Design and Costs Agency shall be solely responsible for th design, environmental proceedings, right-of-way acquisitions, permits, construction an any capital costs of the Project or any modifncations thereof. Authority shall have n responsibilities, obligations or liabilities regarding the design, environmental proceedings right-of-way acquisitions permits or construction of the Project or any modification thereof. Nor shall Authority be responsible for any capital costs of the Project. 2.6 Owner of Proiect Agency shall be designated as the sole and exclusive own€ of all Project facilities, except for those portions, if any, constituting a portion of Authority' distribution system (as described in Exhibit A) or installed within the boundaries of En Users' properties. Authority shall have no ownership right, title, security interest, or sthc interest in any Project facilities, nor any rights, duties, or responsibilities for operation an maintenance thereof. The sole obligation of Authority shall be to pay the Contributio Rate for the Yield generated by the Project. 2.7 Operation of Proiect Agency shall be solely responsible for the operation ar maintenance of all components of the Project, including providing or obtaining i adequate wastewater supply and distributing and delivering Reclaimed Water to all Er Users. 2.8 Meters Required Metering devices shall be installed and owned, operated ar maintained by Agency for the purpose of measuring the Yield. Each meter shall be re: every month for purposes of billing and accounting between the parties to determine the beginning of each month the quantity of Reclaimed Water billed to End Users durir the preceding month. 2.9 Maintenance of Proiect Agency agrees to properly operate, maintain, replac as necessary, and inspect the facilities comprising the Project, regularly and accordance with all applicable state and federal laws, rules, regulations, and guidelinc for the term of this Agreement. 2.10 Operating Principles Agency agrees that, at all times during the term of tt- Agreement, to use best efforts to operate the Project facilities in accordance wi generally accepted professional standards and maintenance and operation principles ai in such manner as to provide service to existing and future End Users on a fair ai equitable basis. 2.1 1 Staffinq Agency shall provide sufficient qualified personnel to properly oper: and maintain the Project facilities. Such personnel shall meet applicable certificatil requirements of pertinent regulatory agencies. 2.12 Compliance with Laws Agency shall insure that all Reclaimed Water produc and delivered by the Project is used in compliance with all applicable Federal, state a local statutes, ordinances, regulations and other requirements, and shall further ins1 that connections to the Reclaimed Water system are properly designed and construct€ -3- 0 0 2.13 Inspection of Records Agency shall make available for inspection by Authorit) upon reasonable advance notice, all records, books and other documents relating to th operation of the Project. 2.14 Multiple Agencies Notwithstanding any other provision of this Agreemen "Agency," as used herein, may refer to one or more public agencies, one of whom is member of the Authority, which shall be jointly and severally liable for the obligations ( Agency, unless otherwise specifically provided herein. Article 3: Contribution for Yield. 3.1 Authority to Contribute Authority shall pay the Contribution Rate for Yie supplied by the Project; provided that unless agreed otherwise in writing, Authority shi not be obligated to make a contribution for Yield in excess of 2,100 acre-feet in any or Authority fiscal year, nor shall Authority be obligated to contribute for any reclaimed wati in advance of its delivery to End Users. 3.2 Billing Agency shall invoice Authority monthly for the Yield, based upon tt- quantities billed to End Users during the previous month. Billings shall be based upc meters at each and every connection of the Project to an End User. Authority shall pc Agency for such Yield within 45 days of receipt of such invoice through Agency by mear of a credit included on the next billing issued to Agency. If payment is not made I: Authority to Agency within said 45 days, it shall thereafter draw interest at a ra equivalent to the average interest Authority earns on its own invested funds during tt time period payment is delayed beyond 45 days. Agency shall be billed by Authority accordance with the rules and regulations established from time-to-time by Authority l reflected in Authority's Administrative Code 3.3 Nothing contained herein shall be deemed to modify Authority obligations any, established by law or contract to supply water to Agency for domestic and municir use within Authority's service area. Article 4: Proiect Water Rates. 4.1 "Reclaimed Water Sale Price" shall be the lower of: (a) the Agency's avera! rate for retail potable water service during the quarter preceding the effective date of tk agreement or (b) the minimum potable water rate (other than any below-cost "lifeline" rai charged to the class of users to whom the Reclaimed Water produced by the Project delivered whichever is lower, as determined by Authority. After the first year, t Reclaimed Water Sale Price utilized in calculating Project Revenue in section 4.3 shall adjusted annually as described in section 4.1 herein. For the purpose of future multi-yc cash flow projections, increases in the "Reclaimed Water Sale Price" shall be determin by Authority. -4- 0 0 4.2 "The Maximum Contribution Amount" for an acre foot of Yield shall be not les than $100 per acre foot, and may be adjusted, from time to time by the Board of Director of the Authority at its sole discretion. 4.3 "Project Revenue" shall include revenues from all reclaimed water sales base upon the Reclaimed Water Sale Price, and any and all other revenue received by c generated by Agency which in any way offsets Project Costs, including the capitr operating or maintenance costs of producing or distributing reclaimed water, E determined by the Authority, excluding any Authority Contributions under this Agreemen 4.4 "Cumulative Net Balance" shall mean the amount derived by subtracting th estimated cumulative Project Cost through the following year from the estimate cumulative Project Revenue through the following year. In computing the Cumulative Nc Balance ("CNB"), there shall be added to Project Costs the cost of funds to the Agenc (based upon Authority's actual cost of funds, as determined by the Authority), for carryin any negative CNB for the project to date, exclusive of the following year. In computir the Cumulative Net Balance ("CNB"), there shall be added to Project Revenue tk estimated earnings of Agency on any positive CNB, based upon the Authority's actu rate of return on its unencumbered funds, as determined by the Authority, for the proje to date. 4.5 The Contribution Rate for Agency's Project shall not exceed the Maximu Contribution Amount, and shall be set each year through an Annual Review by tt Authority based upon the CNB. The Contribution Rate shall be established in such manner as to maintain, insofar as possible, a Cumulative Net Balance equal to $ consistent with the viability of the Project, it being the policy of the Authority not to provic contributions for projects that can maintain a positive Cumulative Net Balance without i Authority Contribution. In the event Agency shows a positive CNB for any given ye: nothing in this Article will limit Agency from receiving contributions in future years whe a subsequent Annual Review indicates that a negative CNB will occur for the followir year; nor shall anything herein require the Authority to make a contribution to avoid negative CNB for future years beyond those considered in calculating the CNB. 4.6 In the event that Agency has a positive CNB at the conclusion of any ye; Agency shall return to the Authority, at the end of such year, the amount of a contributions made during that year so as to achieve a CNB of $0 through the followi year, as determined by Authority. 4.7 Agency shall provide such information regarding past and estimated futL Project costs and Project Revenue during each year of this Agreement as the Author may reasonably require as part of the Annual Review. Notwithstanding the formul described above, the Contribution Rate for any year may be adjusted: (a) to reflect t results of any audit by the Authority of the actual Project Costs and Project Reven during the previous year; and (b) to reduce Project Costs by an amount equal to t Agency's obligation to repay any sum owed to Authority under the Financial Assistan -5- 0 0 Program for reclamation planning studies for the Project. In the event that for any yez the Contribution Rate equals zero or less, this Agreement shall not be terminated, and n funds shall be owed to Authority by Agency, it being the purpose of this agreement th: the contributions made to Agency shall reflect the financial need of the Project. 4.8 Authority shall have the right to review the accounting and Project records c Agency to verify reported and estimated future Project Costs and Project Revenue, an may request an independent audit of Agency’s Project Costs or Project Revenue, up01 reasonable notice, in connection with the establishment of the Contribution Rate unde this agreement. The costs of any independent audit shall be equally divided between thl parties. Article 5: Term and Amendments: 5.1 Term of Contribution Obliqation The term of this Agreement shall be twenb five (25) years from the date the Project comrriences delivery of Reclaimed Water to ai End User. 5.2 Amendments This Agreement may be amended at any time by the writter mutual agreement of the parties. Article 6: Hold Harmless and Liabilitv. Agency agrees to hold Authority harmless from any and all liability, including but no limited to, liability due to water quality, which may arise out of Agency’s participation if the construction and operation of the Project or out of any ownership interest it ma! acquire in the Project, and will save and defend Authority and its officers, agents, an( employees free from any claims for injury, including death or damage to property or inju? (including death or damage) due to water quality arising out of the Agency’s role in tht construction, operation, or ownership of the Project. Such indemnity shall include all losz related to any claim made, whether or not a court action is filed, and shall include attorne) fees, administrative and overhead costs, engineering and consulting fees and all othei costs related to or arising out of such claim of liability. These obligations shall not bc affected by any sale of water to Authority under this agreement. Article 7: Notice. Any notice, payment or instrument required or permitted to be given hereunder shal be deemed received upon personal delivery or 24 hours after deposit in any United State5 -6- 0 e post office, first class postage prepaid and addressed to the party for whom intended, a follows: If to Authority: San Diego County Water Authority 3211 Fifth Avenue San Diego, California 92103 Attn: General Manager Carlsbad Municipal Water District 5950 El Camino Real Carlsbad, CA 92008 Attn: General Manager If to Agency: Any party may change such address by notice given to each of the other parties a provided in this section. Article 8: Successors and Asians. This Agreement shall inure to the benefit of and be binding upon the successor and assigns of the parties hereto. Article 9: Severabilitv. The partial or total invalidity of one or more sections of this Agreement shall nc IN WITNESS WHEREOF, the parties hereto have executed this Agreement effectiv affect the validity of this Agreement. as of the date first hereinabove written. APPROVED AS TO FORM: SAN DIEGO COUNTY WATER AUTHORITY A B CARLSBAD MUNICIPAL APPROVED AS TO FORM. WATER DISTRICT (Agency 1 LD R. BALL BY. .&R.L General Counsel /I* $a%-* -7-