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Home My WebLink About2009-06-02; Municipal Water District; 683; Poseidon water purchase agreement amendmentCARLSBAD MUNICIPAL WATER DISTRICT - AGENDA BILL 17 AB# MTG. DEPT. 683 06/02/09 Admin. Services RATIFICATION OF THE SEVENTH AMENDMENT TO THE WATER PURCHASE AGREEMENT DEPT. HEAD ^f^ CITY ATTY. /fe CITY MGR. (/^-^ RECOMMENDED ACTION: Adopt Resolution No. 1356 ratifying the seventh amendment to the Water Purchase Agreement dated September 28, 2004, between Poseidon Resources and the Carlsbad Municipal Water District. ITEM EXPLANATION: On September 28, 2004 the CMWD Board entered into an agreement with Poseidon Resources regarding the purchase of water for a proposed desalination facility to be located near the Encina Power Station (the Water Purchase Agreement). On a number of occasions, the CMWD Board approved extensions of the time for completion of certain tasks listed in the Water Purchase Agreement. These extensions have allowed Poseidon Resources and the CMWD/City staff to continue work on completing various tasks related to the project while Poseidon pursued permits from various state agencies. The desalination project appears to have received all approvals, however due to significant delays at the Coastal Commission and the Regional Water Quality Control Board a number of tasks required by the Water Purchase Agreement have not been completed. Therefore, the CMWD Executive Manager and Poseidon have agreed to extend the deadline for completion of these tasks to October 1, 2009. Although the Executive Manager of CMWD is authorized to sign amendments to the Water Purchase Agreement that are ministerial in nature, the Executive Manager is required to submit any approved amendment to the CMWD Board for ratification. The Water Purchase Agreement lists a number of tasks that must be completed, and sets a date by which each action must be completed. If not completed by the stated date, either party may terminate the agreement. The recommended amendment recognizes that a number of the specified tasks have been completed, and that the remaining tasks (such as the identification of specific system interconnection points, determination of a delivery regime, and receiving the consent of Cabrillo Power to the Water Purchase Agreement) must be completed by October 1, 2009. FISCAL IMPACT: None. ENVIRONMENTAL IMPACT: None. EXHIBITS: 1. Resolution No. 1356 ratifying the seventh amendment to the Water Purchase Agreement dated September 28, 2004, between Poseidon Resources and the Carlsbad Municipal Water District. 2. Seventh Amendment to the Water Purchase Agreement. DEPARTMENT CONTACT: Jim Elliott, 760-602-2409, ielli(5)ci.carlsbad.ca.us FOR CITY CLERKS USE ONLY. BOARD ACTION: APPROVED CONTINUED TO DATE SPECIFIC DENIED D CONTINUED TO DATE UNKNOWN D CONTINUED D RETURNED TO STAFF D WITHDRAWN D OTHER - SEE MINUTES D AMENDED D EXHIBIT 1 1 RESOLUTION NO. 1356 2 A RESOLUTION OF THE BOARD OF DIRECTORS OF CARLSBAD MUNICIPAL 3 WATER DISTRICT (CMWD), RATIFYING THE SEVENTH AMENDMENT TO THE 4 WATER PURCHASE AGREEMENT DATED SEPTEMBER 28, 2004 5 6 7 WHEREAS, the Board of Directors of the Carlsbad Municipal Water District 8 (CMWD) approved a Water Purchase Agreement (Agreement) with Poseidon 9 Resources (Channelside) LLC to purchase from Poseidon up to 25 million gallons of 10 water per day (MGD) of product water, subject to the terms, conditions and arrangements included in the Agreement; and 12 ai lai iv. WHEREAS, by prior amendments to the Agreement, the deadline for completion 13 of certain actions described in section 2.3.1 of the Agreement has been extended to 14 April 1, 2009; and 15 WHEREAS, both parties agreed to the prior amendments to the Agreement; and16 WHEREAS, the CMWD staff and the Poseidon Resources (Channelside) LLC staff have completed negotiations on a seventh amendment to the Agreement that has 19 been approved by the Executive Manager of CMWD, that now requires ratification by 20 the CMWD Board; and 21 WHEREAS, said amendments will enhance the ability of both parties to achieve 22 success in their common goal of delivering desalinated water to the customers of the 23 Carlsbad Municipal Water District in a time and manner consistent with the intent of the 24 original Agreement; 25 NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the 26 Carlsbad Municipal Water District, as follows: 28 n 3 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 1. That the above recitations are true and correct. 2. That the Board of the Carlsbad Municipal Water District hereby ratifies the Seventh Amendment to the Water Purchase Agreement as previously signed by the Executive Manager. PASSED, APPROVED AND ADOPTED at a Special Meeting of the Carlsbad Municipal Water District of the City of Carlsbad on the 2nd day of June , 200?, by the following vote: AYES: Befrd Members Lewis, Kulcbin, Hall, Packard and Blackburn. NOES: None. ABSENT: None. ATTEST: ORRAJNE M. (SEAlX SECRETARY SEVENTH AMENDMENT TO WATER PURCHASE AGREEMENT THIS SEVENTH AMENDMENT TO WATER PURCHASE AGREEMENT (this "Seventh Amendment"), dated as of /VWcq 3/ . 2009 is made by and between THE CARLSBAD MUNICIPAL WATER DISTRICT, a municipal water district (the "District"), and POSEIDON RESOURCES (CHANNELSIDE) LLC, a Delaware limited liability company ("Poseidon" and collectively with the District, the "Parties"). RECITALS WHEREAS, pursuant to the terms of that certain Water Purchase Agreement dated as of September 28, 2004, by and between the District and Poseidon, as amended by that certain Amendment to Water Purchase Agreement, dated as of May 19, 2005, that certain Second Amendment to Water Purchase Agreement, dated as of September 29, 2006, that certain Third Amendment to Water Purchase Agreement, dated as of November 21, 2006, that certain Fourth Amendment to Water Purchase Agreement, dated as of January 23, 2007, that certain Fifth Amendment to Water Purchase Agreement, dated as of April 12, 2007, and that certain Sixth Amendment to Water Purchase Agreement, dated as of March 31, 2008 (as amended, the "Agreement"), Poseidon has agreed to sell to the District, and the District has agreed to purchase from Poseidon, up to twenty-five (25) MOD of Product Water (unless otherwise defined herein, capitalized terms shall have the meanings given to them in the Agreement), subject to the terms, conditions and arrangements set forth in the Agreement; and WHEREAS, the Parties desire to adjust certain of the deadlines in the Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the Parties hereto, the Parties covenant and agree as follows: 1. Amendments. (a) Section 2.3.1 is hereby amended by replacing "April 1, 2009" in the last sentence thereof with "October 1,2009". (b) Section 2.3.2 is hereby amended by replacing "April 1,2009" with "October 1,2009". (c) Section 2.3.4 is hereby amended by replacing "the fourth (4th) anniversary of the Effective Date" with "October 1, 2009". 2. Controlling Law. This Seventh Amendment shall be governed by the laws of the State of California in accordance with Section 21.5 of the Agreement. 2569724 3. Counterparts. This Seventh Amendment may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute one and the same instrument. 4. Amendment and Modification Only. The Parties hereby ratify and confirm all of their obligations under the provisions of the Agreement as amended by this Seventh Amendment. 2569724 IN WITNESS WHEREOF, the District and Poseidon, intending to be legally bound by the provisions herein contained, have executed this Seventh Amendment to Water Purchase Agreement effective as of the date first above written. Approved as to Form 2569724 THE CARLSBAD MUNICIPAL WATER DISTRICT Name: Title: C vTY By: ityAttorney POSEIDON RESOURCES (CHANNELSIDE) LLC By: Name: Title: t/, erg_ 1