Loading...
HomeMy WebLinkAbout1981-11-03; City Council; 6799; Buena Sanitation District sewage capacity leaseCITQ>F CARLSBAD - AGEND^ILL LErirant AR# (t) 7 ^ 1 MTfi 11/3/81. DPPT ENG TITLE: APPROVAL OF LEASE AGREEMENT - o.hWA(jj.h uAFAC-L-Li — BUbNA SANITATION DISTRICT DFPT. HD. £ CITY ATTYW55 CITY MGIV? ^It 4-J 3-UO 4J COss r~-i-H vo S8 00 O & Oz3OO RECOMMENDED ACTION: Adopt Resolution No. (/ *} / / Approving an Agreement between the City of Carlsbad and the Buena Sanitation District for Lease of Capacity in the Encina Outfall. ITEM EXPLANATION: In 1966 the city of Carlsbad and the Buena Sanitation District entered into an agreement for the lease by Carlsbad of Capacity in the District's Encina Outfall. The outfall was designed to carry raw sewage from the Buena service area east of Carlsbad, as well as serve certain areas in Carlsbad along Palomar Airport Road. The agreement describes the area and populations in Carlsbad to be served by the Encina Outfall. Area A is primarily north of Palomar Airport Road and east of El Camino Real. Area B lies north and south Palomar Airport Road and west of El Camino Real. Using the design populations, per capita contribution to the sewer, design peaking factors and infiltration _allowance, Areas A and B should require a maximum (peaking) capacity of 2.45 million gallons a day (mgd). The Buena/Carlsbad Agreement assigns cap- acities from 1.2 mgd to 3.0 mgd to Carlsbad. Unfortunately, the agreement refers to "average" daily flow rather than "peak" flows. This "error" has been an irritation to the County ever since the Agreement was approved. The City, however, has had no motivation for agreeing to a revision. Now, the Carlsbad Research Center is ready to submit a final subdivision map. Unfortunately, the development is not in areas A and B and no other sewage transmission lines presently exist to provide service. The ultimate solution is the City's participation in the construction of the San Marcos Land Outfall which will serve the entire Palomar Sewer Service Area. That line will probably not be complete for at least 18 months. In the meantime, it would be advantageous to the City to provide temporary service to the Research Center through the Encina Outfall. The County has agreed to revise the exist- ing agreement to delete the reference to Areas A and B. The City could then use its capacity however it wanted. In exchange, the County would like the City to delete the reference to "average" flows and instead refer to "peak" flows. FISCAL IMPACT Revising the agreement to reflect "peak" flows rather than "average" flows can be said, subject to litigation, to have given the City twice the capacity it paid for. This correction will have no fiscal impact because we "paid" for peak capacity and this correction will remove any questions. EXHIBITS A. Map to Areas A and B B. Letter from San Diego County describing the error in the present agreement. C. Resolution No. ^> 7/*7 Approving an Agreement between the City of Carlsbad and the Buena Sanitation District for Lease of Capacity in the Encina Outfall, D. Proposed Agreement. .R. J. MASSMAN, Director Offices of: County Engineer County Road Commissioner County Surveyor County Airports ' Flood Control Liquid Waste Solid Waste Transportation Operations COUNTY OF SAN DIEGO DEPARTMENT OF PUBLIC WORKS BUILDING 2 5555 OVERLAND AVENUE SAN DIEGO. CALIFORNIA 92123 TELEPHONE: (714) 565-5177 September 29, 1981 BOARD OF SUPERVISORS TOM HAMILTONFirst District PAUL W. FORDEMSecond District ROGER HEDGECOCKThird District JIM BATESFourth District PAUL ECKERTFifth District City of Carlsbad 1200 Elm Avenue Carlsbad, CA 92008 Attn: Les Evans Dear Mr. Evans: SUBJECT: Buena-Carlsbad Lease Agreement 1981 CiTY OF CARLSBAD Engineering Department The enclosed report shows that the intent of the agreement was to lease capacity in terms of peak flow. This is verified in two ways: 1) By calculating the 'capacity required to serve areas A 5 B using the population given in the second supplement to the basic agreement between Carlsbad and Vista; and 2) By using the total cost of the outfall and computing Carlsbad's share. Both of these values are approximately equal to the values given in Sections 2 and 3 of the agreement-. We believe this to be sufficient justification to revise the agree- ment, Section 4 to reflect peak flows. Buena has joined contractually with Vista in the preparation of a capacity study for the Vista and Beuna service areas. The study includes a portion of Area A that is in Vista. We assume that the capacity allocated in the outfall for this area will be transferred from Carlsbad to Vista in accordance with the agreement. The study is scheduled for completion in December 1981. This will provide de- tailed capacity data to evaluate the Encina Outfall requirements. In response to your request for a Temporary Connection of 86 acres (Carlsbad Re- search Center CT-81-10), we need to know the complete sewerage plan for all phases of the proposed development before we can consider the proposed project. In addi- tion, the proposal is in conflict with Section 4 of the basic agreement in that sewage is being pumped from one drainage basin to another. It appears that appro- val from all the member agencies will be required. EXHIBIT B City of Carlsbad - 2 - September 29, 1981 If you have additional questions, please call Don Hatfield at 565-5847. Very truly yours, ^ ?Vr ^J : SMANTTJire. MASSMANTHJirector Apartment of Public Works RJM:DH:tly Enclosure: Report of Encina Outfall Agreement Review Exhibit E cc: City of Vista (w/o encl.) Box 188 Vista, CA 92083 9/29/81 ENCINA OUTFALL AGREEMENT REVIEW This report was prepared to provide the rationale and calculations required to negotiate a revision to County Contract 3405-2103-R; "AGREEMENT BETWEEN THE BUENA SANITATION DISTRICT AND THE CITY OF CARLSBAD FOR THE LEASE BY CARLSBAD OF CAPACITY IN THE ENCINA OUTFALL OF THE. BUENA SANITATION DISTRICT." The agreement was executed in 1966. In 1972 a serious misunderstanding in the. terms of the agreement became apparent. Several attempts to resolve the pro- blem have been unsuccessful. It is imperative that the agreement be revised to reflect the understood intent of the agreement when it was prepared before additional connections can be allowed. The basic issue is whether the original intent of the agreement was to lease capacity to Carlsbad in terms of peak million gallons per day (mgd) or average mgd. Once this is resolved, other terms and conditions of the agreement will require revision. The report considered the agreements, past correspondence and engineering cal- culations contained in the files. Two agreements are involved in leasing capacity to Carlsbad. The Second Supple- ment to the Basic Agreement between Vis.ta and Carlsbad for the Acquisition and Construction of the Joint System know as Encina System (Vista/Carlsbad Agreement), and the Agreement between Carlsbad and Buena for the Lease of Capacity in the Encina Outfall (Buena/Carlsbad Agreement). The Vista/Carlsbad Agreement, among other terms, provides for Buena to become a member agency in the joint system and describes the area and populations in Carls- bad to be served by the Encina Outfall as follows: - 2 - Buena Service Area: Population 39,000 Area A, Exhibit E: " 5,000 Area B, Exhibit E; " 9,000 The source of these populations was the Rawn Report of 1960. The records show 4 * that the following engineering parameters were used to estimate flows as follows: 80 gallons per day per person 1.75 peaking factor (See Appendix I) 25% allowance for infiltration Using these values, we find that Areas A § B (Exhibit E attached) require a maximum capacity of 2.45 mgd peak flow and Buena requires 6.17 mgd peak flow capacity. Therefore, the Buena/Carlsbad agreement assigned capacities to Carlsbad from 1.2 mgd to 3 mgd maximum, leaving 6.2 mgd for Buena,- (See Table I). Table II shows the calculated flow requirement for specific sections of the outfall. These values are the capacities given in the agreement. These calculations show conclusively that the intent of the agreement was to use peak flows to lease capacity to Carlsbad. If the stated flows were considered average, Carlsbad would have purchased over twice as much capacity as it requires. (See Table I). Appendix II (a partial copy of the bid schedule) shows the total cost of the En- cina Outfall, Schedule 1A to be $346,427.74. The records show that an 80% fi- nancing cost was used giving a total cost of $623,569,93. The records do not show the precise calculations used to determine Carlsbad's share as it. appears in the agreement. However, the following calculations show a definite correla- tion with Carlsbad's cost noted in the agreement indicating Carlsbad has been paying based on peak flow. $623,569.93 X 26.41% (average ownership for total gravity Outfall) equals $164,684.81 as compared with $159,600 stated in the agreement. /IP - 3 - If the capacity value stated in "the agreement is considered average flow, this cost would be more than twice the above amount. * In addition to the above calculations that show that peak flows were stated in the agreement, it is standard engineering practice to compute pipe capacity in peak flow and not average flow. The words of Section 4 in the agreement do not agree with the Lease table in Section 2 or the Payment Schedule in Section 3 and therefore must be changed to reflect peak values. 7 AGREEMENT BETWEEN THE BUENA SANITATION DISTRICT AND CITY OF CARLSBAD FOR THE LEASE OF CAPACITY IN THE ENCINA OUTFALL This Agreement, made and entered into this L day of 1981, by and between BUENA SANITATION DISTRICT, a county sanitation district, formed and existing under the County Sanitation District Act (Section 4700, et seq., Health and Safety Code) hereinafter referred to as "Buena" and the City of Carlsbad, a municipal corporation hereinafter referred to as "Carlsbad." WITNESSETH: 1. The City of Carlsbad and Buena Sanitation District entered into an Agreement for the lease of capacity in a land sewage outfall on June 30, 1966. 2. Now Buena and Carlsbad desire to rescind that Agreement and replace it by a new Agreement. NOW THEREFORE, the parties hereto agree as follows: Section 1. EFFECTIVE DATE: This Agreement shall take effect Section 2. LEASE OF CAPACITY: Buena agrees to lease to Carlsbad the following listed percentages of capacity in the Encina Outfall: STATION TO STATION* % OF TOTAL LINE CAPACITY AMOUNT 0 + 00 20 + 81.43 34.88 $ 48,625 20 + 81.43 33 + 36.43 31.71 14,280 33 + 36.43 42 + 28.18 28.21 10,070 42 + 28.18 67 + 42.43 28.21 20,900 67 + 42.43 87 + 57.43 21.13 11,735 87 + 57.43 190 + 93.29 18.84 45,950 190 + 93.29 204 + 08.65 17.65 5,630 204 + 08.65 209 + 56.94 17.65 2,410 Total $159,600 *Stations as shown on hereinafter mentioned plans. **Capacity is defined as the total amount of sewage conveyed by each section of the Encina Outfall, flowing full without surcharge or spillage, Said Encina Outfall is the outfall sewer line, shown on those certain plans entitled "Plans for the Project-Sheets 1 through 7 Inclusive" on file in the office of the Department of Public Works of the County of San San Diego, 5555 Overland Avenue, Building 1, San Diego, California, a copy of which has been furnished to Carlsbad. Section 3. TERMS OF LEASE 1. Buena shall lease to Carlsbad for a period commencing the effective date of this agreement and ending on or before July 1, 1996, the percentages of capacity listed in Section 2 herein, said lease to be upon the following terms and conditions: (a) The total rental sum shall be $159,600 of which $85,120 shall be paid on or before the date of this Agreement. The remaining sum shall be payable as follows: 14 equal annual payments of $5,320 each, beginning July 1, 1982, and payable each July 1 thereafter until fully paid. (b) Options are hereby granted by Buena to Carlsbad to purchase the capacity which is the subject of this lease. These options may be exercised provided lesee is not in default of lease payments at the time lessee exercises the option to purchase. The option purchase price shall be the sum of $159,600 less the amount of rental already paid to Buena under the terms of this Agreement. 2. Carlsbad may exercise the option to purchase at any time by giving one month's notice in writing, sent by registered or certified mail to Buena. Title to the capacity shall vest in Carlsbad upon delivery to Buena of payment in the full amount of said purchase price together with any rental payment due at the time of the exercise of said option. Until such time as Carlsbad exercises its option, title to the capacity which is the subject of this Agreement will remain in Buena. 3. Carlsbad shall not lose its right to exercise said option upon termination of the lease period, unless Carlsbad fails to exercise the same within ten (10) days after receipt of written notice from Buena to do so and to make prompt payment of any amount due or if no amount is due then one dollar. Section 4. CONNECTIONS: Carlsbad, at its sole expense, shall be responsible for the construction, installation, maintenance, repair, replacement or reconstruction of any necessary transmission facilities from the Carlsbad Service Area to the Encina Outfall and for the connection of such transmission facilities together with any necessary appurtenances to the Enc ina Out fall. Section 3. ENGINEER'S APPROVAL: The location, installation, construction, repair (except emergency repairs) replacement and/or reconstruction of the connections to the Encina Outfall shall be according to plans and specifications first approved by Buena's engineer. Section 6. LIMITATIONS ON TYPE AND CONDITION OF SEWAGE: All sewage discharged by Carlsbad into Encina Outfall shall conform to the ordinances, resolutions, rules and regulations which Buena must adopt in accordance with Agreements of the Encina Joint Powers concerning the condition of sewage and waste permitted to be discharged to the Joint System or any part thereof. Section 7. METERING: Carlsbad shall provide a device to meter the flow of sewage in the Encina Outfall at a point below any lateral connection, but above the Encina Sewage Treatment Facility. The meter will be installed and operated solely at Carlsbad's expense. Section 8. INFILTRATION: It is understood and agreed that there will be inflow of water into the Encina Outfall because of leakage between the Carlsbad connection and the Encina Treatment Plant. Buena shall estimate the total waters that infiltrate the Encina Outfall between said connection and treatment plant (sometimes referred to herein as "infiltration") and apportion the same among all of such users of the Encina Outfall in the proportion that the amount of sewage discharged into the Encina Outfall by each such user bears to the total amount of sewage discharged into the Encina Outfall by all of such users of said Outfall. The amount of infiltration apportioned to each such user shall be deemed a part of the sewage of such user for all purposes. Section 9. MAINTENANCE CHARGE: 1.. During such period as Carlsbad is authorized to use a portion of the capacity of the Encina Outfall, whether as lessee or owner of such capacity, Carlsbad shall pay to Buena a share of the cost of the maintenance and operation of the Encina Outfall, said share of the cost to be in proportion to the average flow of sewage discharged into the Encina Outfall through Carlsbad's connections to said outfall as compared to the total average flow of sewage discharged into said Encina Outfall. 2. Buena shall bill Carlsbad for its share of the cost from time to time, but at least annually, and Carlsbad shall pay its share of the cost to Buena within thirty (30) days after being so billed. 3. Buena shall keep accurate records of its cost of maintaining and operating the Encina Outfall and such records shall be open to inspection by Carlsbad at all reasonable times. Section 10. CHARGE AGAINST CAPACITY RIGHTS IN ENCINA TREATMENT PLANT AND OCEAN OUTFALL: All sewage discharged into the Encina Outfall through Carlsbad's connection, under the terms of this Agreement and thereafter discharged into the Encina Treatment Plant, and all infiltration allocable to Carlsbad as determined by Section 8 of this Agreement, shall be charged against Carlsbad's capacity rights in and to the Encina Treatment Plant and Ocean Outfall. Section 11. REPAIRS: The Encina Outfall Sewer shall be maintained by Buena in good repair and working order in accordance with sound engineering practices. It shall be the duty of Buena to make repairs on said Encina Outfall required to keep such outfall sewer in good operating condition. Except as provided in Section 12, the cost of all repairs shall be part of the maintenance costs of the Encina Outfall. Section 12. MAJOR REPAIRS AND RECONSTRUCTION AND REPLACEMENT: Notwithstanding the provisions of Section 11 hereof, if it becomes necessary for Buena to undertake major repairs of said Encina Outfall or any portion thereof or to replace or reconstruct said Encina Outfall or any portion thereof, the parties hereto shall pay all costs of such major repair, replacement or reconstruction in the same proportion as the parties own or lease capacity in the Encina Outfall or portion thereof repaired, replaced or reconstructed. Section 13. INTERRUPTION OF SERVICE: In the event of an interruption of services to Carlsbad in the Encina Outfall, as a result of disaster, operation of State or Federal law, discontinuance or intdrruption of service to Buena by the Encina Treatment Plant or Ocean Outfall, or any other cause beyond the control of Buena, Buena shall bear no liability and shall be held harmless by Carlsbad from any claims and liabilities for any injury to or damage to any person or persons or property or for the death of any person or persons arising from or out of such interruption of service or for any other damages or costs incurred by Buena as a result of such interruption of service. Section 14. ARBITRATION: Except as otherwise provided herein, all controversies arising out of the interpretation or application of this agreement or the refusal of either party to perform the whole or any part thereof shall be settled by arbitration in accordance with the provisions of this section and where not provided by this section, in accordance with the statutory provisions of the State of California then in force. The controversy shall be submitted to a board of three (3) arbitrators which shall be appointed, one by Buena, one by Carlsbad and the third by the first two. The party desiring arbitration shall notify the other party by a written notice stating the following: (1) that it desires arbitration, (2) the controversy to be arbitrated, (3) that it has appointed its nominee, and (4) that it requests the other party to appint its nominee. Within thirty (30) days from the receipt of said notice the other party shall appoint its nominee. Within fifteen (15) days after the last party has appointed its nominee the two nominees shall appoint the third. None of the arbitrators shall be a resident of, or taxpayer in, or own property in, or have a place of business in, or be employed in or by, or have any contract with, or be an officer or employee of, either party. The arbitration board shall hold at least one hearing and, at least ten (10) days before said hearing, shall give each party written notice thereof. The arbitration shall be restricted to matters relative to that stated in the notice requesting arbitration. The arbitration b'oard shall have no authority to add to or subtract from this agreement. Each party shall be given an opportunity to be heard and to present evidence. Upon conclusion of the hearing or hearings the arbitration board shall reduce their findings of fact, conclusions of law and the award to writing, and shall sign the same and deliver one signed copy thereof to each public agency. Such award shall be final and binding upon both parties. A majority finding shall govern if the arbitrators' determination is not unanimous. Each party shall pay its own expenses, including the expenses of the arbitrator which it nominates. The expenses of the third arbitrator and the administrative costs of the arbitration proceedings shall be shared equally. Any controversy which can be determined by an engineer's findings and which under this section could be submitted to arbitration may, if the parties thereto agree in writing to do so, be submitted to a named engineer who shall be the sole arbitrator. Such engineer shall be a member of the American Society of Civil Engineers and shall be disinterested as hereinbefore in this section required of arbitrators on an arbitration board. He shall proceed in the same manner and shall make findings, conclusions and an award in the manner provided herein for an arbitration board. Section 15. NOTICE: Notices required or permitted under this agreement shall be sufficiently given if in writing and if either served pesonally upon or mailed by registered or certified mail to the clerk or secretary of the governing body of the affected party to this agreement. Sect ion 16. LIABILITY: Nothing herein contained shall operate to relieve Carlsbad of any liability for damages to persons or property arising from or out of the installation, construction, operation, maintenance, repair, replacement or reconstruction of the aforesaid sewer connections and appurtenances or from any action or inaction of Carlsbaqd or of its officers, agents or employees in connection therewith. 8 And except as provided in Section 16 nothing herein contained shall operate to relieve Buena of any liability for damages to persons or property arising from or out of the installation, construction, operation, maintenance, repair, replacement and/or reconstruction of the aforesaid sewer connections and appurtenances or from any action or inaction of Buena or of its officers, agents or employees in connection therewith. Section 17. INDEMNITY - INSURANCE: To the extent it may legally do so, Carlsbad shall defend and save and hold free and harmless Buena and its agents, officers and employees from any claims, liabilities, penalties or . fines for injury to or damage to any person or property or for the death of any person arising from or out of any act or omission of Carlsbad, its agents, officers, employees or contractors, arising from or out of any defects in the installation, construction, operation, maintenance, repair, replacement or reconstruction of said sewer connections or appurtenances. Pursuant thereto Carlsbad shall take out and maintain public liability insurance with an insurance carrier authorized to do business in the State of California to protect against loss from liability imposed by law for damages on account of bodily injury, including death resulting therefrom suffered or alleged to be suffered by any person or persons whatsoever resulting directly or indirectly from any act or activities of Carlsbad or . any person acting for Carlsbad or under Carlsbad's control or direction, and also to protect against any loss from liability imposed by law for damages to any property of any person caused directly or indirectly by or from acts or activities ,of Carlsbad or any person acting for Carlsbad or under Carlsbad's control or direction. Such public liability and property 9 /•N ^^° - •--•. >s**' damage insurance shall be maintained in full force and effect during the entire term of this lease in the amounts of not less than $500,000 for one person injured in one accident and not less than $1,000,000 for more than one person injured in one accident and in the amount of not less than $250,000 with respect to any property damage aforesaid. Said insurance shall be in form satisfactory to the County Counsel of San Diego County. The insurance policies shall have a non-cance1lation-without-ten (10)-day- notice-to-Buena clause and shall provide that copies of all cancellation notices shall be sent to Buena. If Carlsbad does not keep such insurance in full force and effect, Buena may take out the necessary insurance and pay the premium; and such amounts so paid by Buena shall become a charge against Carlsbad. Section 18. TIME OF ESSENCE: Time is of the essence of this areement. Section 19. SEVERABILITY: If any section, subsection,.sentence, clause, phrase or word of this agreement, or the application thereof, to any party, or to any other person or circumstance is for any reason held invalid, it shall be deemed severable and the validity or the remainder of the agreement or the application of such provision to the other parties or to any other persons or circumstances shall not be affected thereby. Each party hereby declared that it would have entered into this agreement and each section, subsection, sentence, clause, phrase and work thereof irrespective of the fact that one or more sections, subsections, sentences, clauses, phrases or words, or the application thereof to any party or any other person or circumstance be held invalid. 10 Section 20. This agreement shall be binding upon the parties hereto and the successors and assigns of each of them. IN WITNESS WHEREOF, each party hereto has pursuant to resolution duly passed and adopted by its respective governing body caused this agreement to be executed the date first above written. BUENA SANITATION DISTRICT By Chairman, Board of Directors CITY OF CARLSBAD By Mayor 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 6717 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AN AGREEMENT BETWEEN THE CITY OF CARLSBAD AND THE BUENA SANITATION DISTRICT FOR LEASE OF CAPACITY IN THE ENCINA OUTFALL The City Council of the City of Carlsbad, California, does hereby resolve as follows: 1. That an agreement between the City of Carlsbad and the Buena Sanitation District for lease of capacity in the Encina Outfall, a copy of which is attached hereto and made a part hereof, is hereby approved. 2. That the Mayor of the City of Carlsbad is hereby authorized and directed to execute said agreement for and on behalf of the City of Carlsbad. PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council held on the 3rd day of November' , 1981, by the following vote, to wit: AYES: Council Members Packard, CAsler, Anear, Lewis and Kulchin. NOES: None ABSENT: None RONALD C. PACKARD, Mayor ATTEST: THA L. RAUTENKRANZ, City (SEAL) c s*\ AGREEMENT BETWEEN THE BUENA SANITATION DISTRICT AND CITY OF CARLSBAD FOR THE LEASE OF CAPACITY IN THE ENCINA OUTFALL This Agreement, made and entered into this day of 1981, by and between BUENA SANITATION DISTRICT, a county sanitation •district, formed and existing under the County Sanitation District Act ' XSection 4700, et seq., Health and Safety Code) hereinafter referred to as "Buena" and the City of Carlsbad, a municipal corporation hereinafter referred to as "Carlsbad." * WITNESSETH: 1. The City of Carlsbad and Buena Sanitation District entered / into an Agreement for the lease of capacity in a land sewage outfall on June 30, 1966. 2. Now Buena and Carlsbad desire to rescind that Agreement and replace it by a new Agreement. NOW THEREFORE, the parties hereto agree as follows: Section 1. EFFECTIVE DATE: This Agreement shall take effect Section 2. LEASE OF CAPACITY: Buena agrees to lease to Carlsbad the following listed percentages of capacity in the Encina Outfall: c STATION TO STATION* % OF TOTAL LINE CAPACITY AMOUNT 0+00 20 + 81.43 34.88 $ 48,625 20 + 81.43 33 + 36.43 31.71 • 14,280 33 + 36.43 42 + 28.18 28.21 10,070 42 + 28.18 67 + 42.43 28.21 20,900 67 + 42.43 87 + 57.43 21.13 11,735 87 + 57,43 190 + 93.29 • 18.84 45,950 190 + 93.29 204 + 08.65 17.65 5,630 204 + 08.65 209 + 56.94 17.65 2,410 . . . Total $159,600 *Stations as shown on hereinafter mentioned plans. **Capacity is defined as the total amount of sewage conveyed by each section of the Encina Outfall, flowing full without surcharge or spillage. Said Encina Outfall is the outfall sewer line, shown on those certain plans entitled ".Plans for the Project-Sheets 1 through 7 Inclusive" on * file in the office of the Department of Public Works of the County of San San Diego, 5555 Overland Avenue, Building 1, San Di.ego, California, a copy of which has been furnished to Carlsbad. . Section 3. TERMS OF LEASE 1. Buena shall lease to Carlsbad for a period commencing the effective date of this agreement and ending on or before July 1, 1996, the percentages of capacity listed in Section 2 herein, said lease to be upon the following terms and conditions: (a) The total rental sum shall be $159,600 of which $85,120 shall be paid on or before the date of this Agreement. The remaining sum shall be payable as follows: 14 equal annual payments of $5,320 each, beginning July 1, 1982, and payable each July 1 thereafter until fully paid. (b) Options are hereby granted by Buena to Carlsbad to purchase the capacity which is the subject of this lease. These options may be exercised prov'ided lesee is not in default c of lease payments at the time lessee exercises the option to — - ... purchase. The opti~on purchase price shall be the sum of $159,600 less the amount of rental already paid to Buena under the terms of this Agreement. 2. Carlsbad may exercise the option to purchase at any time by giving one month's notice in writing, sent by registered or certified mail to Buena. Title to the capacity shall vest in Carlsbad upon delivery to Buena of payment in the full amount of said purchase price together with any rental payment due at the time of the exercise of said option. Until such time as Carlsbad exercises its option, title to the capacity which is the subject of this Agreement will remain in Buena. 3. Carlsba'd shall not lose its right to exercise said option upon termination of the lease period, unless Carlsbad faj-ls to exercise the same within ten (10) days after receipt of written notice from Buena to do so and to make prompt payment of any amount due or if no amount is due then one dollar. Section 4. CONNECTIONS: Carlsbad, at its sole expense, shall be responsible for the construction, installation, maintenance, repair, replacement or reconstruction of any necessary transmission facilities from the Carlsbad Service Area to the Encina Outfall and for the connection of such transmission facilities togethe.r with any necessary appurtenances to the Encina Outfall. w Section 3. ENGINEER'S APPROVAL: The location, installation, construction, repair (except emergency repairs) replacement and/or reconstruction of the connections to the Encina Outfall shall be according to plans and specifications first approved by Buena's engineer. Section 6. LIMITATIONS ON TYPE AND CONDITION OF SEWAGE: All sewage discharged by Carlsbad into Encina Outfall shall conform to the ordinances, resolutions, rules and regulations which Buena must adopt in accordance with Agreements of the Encina Joint Powers concerning the condition of sewage and waste permitted to be discharged to the Joint System or any part thereof. Sec t ion 7. METERING: Carlsbad shall provide a device to meter the • flow of sewage in the Encina Outfall at a point below any lateral connection, but above the Encina Sewage Treatment Facility. The meter will be installed and operated solely at Carlsbad's expense. " "Section 8. INFILTRATION: It is understood and agreed that there will be inflow of water into the Encina Outfall because of leakage between the Carlsbad connection and the Encina Treatment Plant. Buena shall estimate thevtotal waters that infiltrate the Encina Outfall between said connection and treatment plant (sometimes referred to herein as "infiltration") and apportion the same among all of such users of the Encina Outfall in the proportion that the amount of sewage discharged into the Encina Outfall by :each such user bears to the total amount of sewage discharged into the Encina Outfall by all of such users of said Outfall. The amount of infiltration apportioned to each such user shall be deemed a part of the sewage of such user for all purposes. Section 9. MAINTENANCE CHARGE: 1.. During such period as Carlsbad is authorized to use a portion of the capacity of the Encina Outfall, whether as lessee or owner of such capacity, Carlsbad shall pay to Buena a share of the cost of the maintenance and operation of the Encina Outfall, said share of the cost to be in proportion to the average flow of sewage discharged into the Encina Outfall through Carlsbad's connections to said outfall as compared to the total average flow of sewage discharged into said Encina Outfall. 2. Buena shall bill Carlsbad for its share of the cost from time to time,, but at least annually, and Carlsbad shall pay its share of the cost to Buena within thirty (30) days after being so billed. « 3. Buena shall keep accurate records of its cost of maintaining and ». operating the Encina Outfall and such records shall' be open to inspection by Carlsbad at all reasonable times. Section 10. CHARGE AGAINST CAPACITY RIGHTS IN ENCINA TREATMENT PLANT AND OCEAN OUTFALL: All sewage discharged into the Encina Outfall through Carlsbad's connection, under the terms of this Agreement and thereafter discharged into the Encina Treatment Plant, and all infiltration allocable to Carlsbad as determined by Section 8 of this Agreement, shall be charged against Carlsbad's capacity rights in and to the Encina Treatment Plant and Ocean Outfall. . Section 11 . REPAIRS: The Encina Outfall Sewer shall be maintained by Buena in good repair and working order in accordance with sound engineering practices. It shall be the duty of Buena to make repairs on said Encina Outfall required to keep such outfall sewer in good operating condition. Except as provided in Section 12, the cost of all repairs shall be part of the maintenance costs of the Encina Outfall. Section 12. MAJOR REPAIRS AND RECONSTRUCTION AND REPLACEMENT: Notwithstanding the provisions of Section 11 hereof, if it becomes necessary for Buena to undertake major repairs of said Encina Outfall or any portion thereof or to replace or reconstruct said Encina Outfall or any portion thereof, the parties hereto shall pay all costs of such major repair, replacement or reconstruction in the same proportion as the parties own or lease capacity in the Encina Outfall or portion thereof repaired, replaced or reconstructed. Section 13. INTERRUPTION OF SERVICE: In the event of an interruption of services to Carlsbad in the Encina Outfall, as a result of disaster, operation of State or Federal law, discontinuance or intdrruption of service to Buena*by the Encina Treatment Plant or Ocean Outfall, or any other cause beyond the control of Buena, Buena shall bear no liability and shall be held harmless by Carlsbad from any claims and liabilities for any injury to or damage to any person or persons or property or For the death of any person or persons arising from or out of such interruption of service or for any other damages or costs incurred by Buena as a result of such interruption of service. Section 14. ARBITRATION: Except as otherwise provided herein, all controversies arising out of the interpretation or application of this agreement or the refusal of either party to perform the whole or any part thereof shall be settled by arbitration in accordance with the provisions of this section and where not provided by this section, in accordance with the statutory provisions of the State of California then in force. The controversy shall be submitted to a board of three (3) arbitrators which shall be appointed, one by Buena, one by Carlsbad and the third by the first two. The party desiring arbitration shall notify the other party by •a written notice stating the following: (1) that it desires arbitration, (2) the controversy to be arbitrated, (3) that it has appointed its nominee, and (4)'that it requests the other party to appint its nominee. Within thirty (30) days from the receipt of said notice the other party shall appoint its nominee. Within fifteen (15) days after the last party has appointed its nominee the two nominees shall appoint the third. None of the arbitrators shall be a resident of, or taxpayer in, or own property in, or have a place of business in, or be employed in or by, or have any contract with, or be an officer or employee of, either party. The arbitration board shall hold at least one hearing and, at least ten (10) days before said hearing, shall give each party written notice thereof. The arbitration shall be restricted to matters relative to that stated in the notice requesting arbitration. The arbitration board shall have no authority to add to or subtract from this agreement. Each party shall be given an opportunity to be heard and to present evidence. Upon conclusion of the hearing or hearings the arbitration board shall reduce their findings of fact, conclusions of law and the award to writing, and shall sign the same and deliver one signed copy thereof to each public agency. Such award shall be final and binding upon both parties. A majority finding shall govern if the arbitrators' determination is not unanimous. Each party shall pay its own expenses, including the expenses of th.e arbitrator which it nominates. The expenses of the third arbitrator and the administrative costs of the arbitration proceedings shall be shared equally. Any controversy which can be determined by an engineer's findings and which under this section could be submitted to arbitration may, if the parties thereto agree in writing to do so, be submitted to a named engineer who shall be the sole arbitrator. Such engineer shall be a member of the American. Society of Civil Engineers and shall be disinterested as hereinbefore in this section required of arbitrators on an arbitration board. He shall proceed in the same manner and shall make findings, conclusions and an award in the manner provided herein for an arbitration board. Section 15. NOTICE: Notices required or permitted under this agreement shall be sufficiently given if in writing and if either served pesonally upon or mailed by registered or certified mail to the clerk or secretary of the governing body of the affected party to this agreement. Section 16. LIABILITY: Nothing herein contained shall operate to relieve Carlsbad of any liability for damages to persons or property arising from or out of the installation, construction, operation, maintenance, repair, replacement or reconstruction of the aforesaid sewer connections and appurtenances or from any action or inaction of Carlsbaqd or of its officers, agents or employees in connection therewith. 8 And except as provided in Section 16 nothing herein contained shall operate to relieve Buena of any liability for damages to persons or property arising from or out of the installation, construction, operation, maintenance, repair, replacement and/or reconstruction of the aforesaid sewer connections and appurtenances or from any action or inaction of Buena or of its officers, agents or employees in connection therewith. Section 17. INDEMNITY: To the extent it may legally do so, Carlsbad shall defend and save and hold free and harmless Buena and its agents, officers and employees from any claims, liabilities, penalties or fines for injury to or damage to any person or property or for the death of any person arising from or out of any act or omission of Carlsbad, its h * agents, officers, employees or contractors, arising from or out of any defects in the installation, construction, operation, maintenance, repair, replacement or reconstruction of said sewer connections or appurtenances. .Section 18. TIME OF ESSENCE: Time is of the essence of this areement. Section 19. SEVERABILITY: If any section, subsection, sentence, clause, phrase or word of this agreement, or the application thereof, to any party, or to any other person or circumstance is for any reason held invalid, it shall be deemed severable and the validity or the remainder of the agreement or the application of such provision to the other parties or to any other persons or circumstances shall not be affected thereby. Each party hereby declared that it would have entered into this agreement and each section, subsection, sentence, clause, phrase and work thereof irrespective of the fact that one or more sections, subsections, sentences, clauses, phrases or words, or the application thereof to any party or any other person or circumstance be held invalid. 9 Section 20. This agreement shall be binding upon the parties hereto and the successors and assigns of each of them. IN WITNESS WHEREOF, each party hereto has pursuant to resolution duly passed and adopted by its respective governing body caused this agreement to be executed the date first above written. BUENA SANITATION DISTRICT Chairman, Board of Directors CITY OF CARLSBAD Mayor 10