HomeMy WebLinkAbout2010-01-26; Municipal Water District; 707; Eighth Amendment to Water Purchase AgreementCARLSBAD MUNICIPAL WATER DISTRICT - AGENDA BILL
AB# 707
MTG. 1/26/10
DEPT. CA
RATIFICATION OF THE EIGHTH
AMENDMENT TO THE WATER
PURCHASE AGREEMENT
DEPT. HEAD
CITY ATTY.
CITY MGR.
RECOMMENDED ACTION:
Adopt Resolution No. 1385 _ratifying the eighth 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 has approved extensions of time for completion of the tasks listed in the Water Purchase
Agreement. These extensions have allowed Poseidon Resources and CMWD/City staff to
continue to work on completing the various portions of Agreement related to the project while
Poseidon pursued permits from various State agencies.
Although the desalination project is moving forward and appears to have received all approvals,
there have been significant delays at the Coastal Commission and Regional Water Quality
Control Board, a number of actions required by the Agreement have not been completed.
Therefore, under the provisions of section 21.2(g) of the amendment to the Agreement, the
CMWD Executive Manager can execute certain ministerial amendments to the Agreement
provided they are ratified by the Board at its next regular meeting. The CMWD Executive
Manager and Poseidon have agreed to extend the deadline for completion of these
requirements to January 1, 2011 and are now submitting the amendment to the CMWD Board
for ratification.
FISCAL IMPACT:
None.
ENVIRONMENTAL IMPACT:
None.
EXHIBITS:
1. Resolution No. 1385
2. Eighth Amendment to the Water Purchase Agreement.
DEPARTMENT CONTACT: Ron Ball 760-434-2891
FOR CITY CLERKS USE ONLY.
BOARD ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
D
D
D
D
CONTINUED TO DATE SPECIFIC D
CONTINUED TO DATE UNKNOWN D
RETURNED TO STAFF D
OTHER-SEE MINUTES D
RESOLUTION NO. 1385
A RESOLUTION OF THE BOARD OF DIRECTORS OF
CARLSBAD MUNICIPAL WATER DISTRICT (CMWD),
RATIFYING THE EIGHTH AMENDMENT TO THE WATER
PURCHASE AGREEMENT DATED SEPTEMBER 28,2004
WHEREAS, the Board of Directors of the Carlsbad Municipal Water District
(CMWD) approved a Water Purchase Agreement (Agreement) with Poseidon
Resources, LLC to purchase from Poseidon up to 25 million gallons of water per day of
product water, subject to the terms, conditions and arrangements included in the
Agreement; and
WHEREAS, on a number of occasions the CMWD Board has approved
extensions by prior amendments to the Agreement and both parties have agreed to
those amendments; and
WHEREAS, said amendment will enhance the ability of both parties to achieve
success in their common goal of delivering desalinated water to the customers of the
Carlsbad Municipal Water District in a time and manner consistent with the intent of the
original Agreement; and
WHEREAS, CMWD staff and Poseidon Resources staff have completed
negotiations on an eighth amendment to the Agreement that has been approved by the
Executive Manager of CMWD, that now requires ratification by the CMWD Board.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That the Board of the Carlsbad Municipal Water District hereby ratifies the
Eight Amendment to the Water Purchase Agreement as previously signed
by the Executive Manager.
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PASSED, APPROVED AND ADOPTED at a Special Meeting of the Board of
Directors of the Carlsbad Municipal Water District of the City of Carlsbad on the 26th
day of January, 2010, by the following vote to wit:
AYES: Board Members Lewis, Kulchin, Hall, Packard and Blackburn.
NOES: None.
ABSENT: None.
ATTEST:
LORRAINE M. WOOD, Secretary
(SEAL) ^
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EIGHTH AMENDMENT TO WATER PURCHASE AGREEMENT
THIS EIGHTH AMENDMENT TO WATEjl PURCHASE AGREEMENT (this "Eighth
Amendment"), dated as of£faLA*u.eu*^ 3**, 20$?is made by and between THE CARLSBAD
MUNICIPAL WATER DISTRICT, ^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, that certain Sixth
Amendment to Water Purchase Agreement, dated as of March 31, 2008, and that certain Seventh
Amendment to Water Purchase Agreement, dated as of March 31, 2009 (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 "October 1,2009" in the last sentence
thereof with "January 1, 2011".
(b) Section 2.3.2 is hereby amended by replacing "October 1, 2009" with
"January 1,2011".
(c) Section 2.3.4 is hereby amended by replacing "October 1,2009" with "January 1,
2011".
2705830
2. Controlling Law. This Eighth Amendment shall be governed by the laws of the State
of California in accordance with Section 21.5 of the Agreement.
3. Counterparts. This Eighth 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 Eighth Amendment.
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IN WITNESS WHEREOF, the District and Poseidon, intending to be legally bound by the
provisions herein contained, have executed this Eighth Amendment to Water Purchase Agreement
effective as of the date first above written.
THE CARLSBAD MUNICIPAL WATER
DISTRICT
Name:
Title:
Approved as to Form
City Attorney
POSEIDON RESOURC
LLC
By:
(CHANNELSIDE)
Name:
title:
2705830
IN WITNESS WHEREOF, the District and Poseidon, intending to be legally bound by the
provisions herein contained, have executed this Eighth Amendment to Water Purchase Agreement
effective as of the date first above written.
THE CARLSBAD MUNICIPAL WATER
DISTRICT
Approved as to Form
By:
City Attorney
POSEIDON RESOURCES (CHANNELSIDE)
LLC
By: 1
Name:
Title:
2705830
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