EXHIBIT 2-D (2)
AGREEMENT FOR SALE OF
RECYCLED WATER
This Agreement for Sale of Recycled Water is entered into as of , 2003, by and between the MONTEREY PENINSULA WATER MANAGEMENT DISTRICT, a California public agency (“MPWMD”), and the {PEBBLE BEACH COMPANY, a California general partnership} (“Buyer”) superseding the Agreement for Sale of Reclaimed Water between the parties dated as of {February 14, 1992}.
RECITALS
A. As is described in
greater detail in Ordinance No. 109,
pursuant to statutory authority, beginning in 1989 MPWMD
was
created in 1977 and authorized to manage and regulate the use, reuse, and
conservation of water on the Monterey Peninsula and the bond financing of
related public works projects. In
furtherance of this authority, MPWMD in 1992 issued Certificates of
Participation in the amount of $33.9 million entered into a series
of interrelated agreements with various parties for to the finance, the design, and construction, and
operation
of facilities comprising the Original Project as
herein defined, water recycling facilities, designed and intended
by all parties to be capable of producing, from the secondary effluent emitted
from the wastewater treatment plant owned and operated by Carmel Area
Wastewater District (“CAWD”), at least 800 acre feet per year for
the production and use of recycled water in lieu of
potable water suitable for irrigation of vegetated
areas within the Del Monte Forest area ofn
the Monterey Peninsula, and related distribution system and irrigation
systems, with the intention of “freeing up” potable water that would otherwise
be used to irrigate such vegetated areas for other uses and purposes on the
Monterey Peninsula. One such agreement was the Agreement for Sale
of Reclaimed Water dated
as of {February
14, 1992} with Buyer,
who is
B. Buyer
is the owner of vegetated areas commonly known as the {Pebble
Beach Golf Course, Spyglass Hill Golf Course, Spanish Bay Golf Course, Peter
Hay Par 3 Golf Course, the Pebble Beach Practice Fairway, and the Collins Field/Polo
Field/Equestrian Center complex and various other vegetated areas}
(collectively called “Buyer’s Property”), located in the Del Monte Forest area
of the Monterey Peninsula. Although
MPWMD financed modifications to the irrigation system(s) on Buyer’s Property
required in order to irrigate Buyer’s Property with recycled water, Buyer’s
Property presently continues to use potable water purchased from
California-American Water Company for irrigation.
BC.
Although MPWMD
has entered into Aagreements
for
Sale of Reclaimed Water with Buyer and various
other owners of vegetated areas
for the use of recycled water for irrigation purposes and
the saving of potable water, the performance of the
Original Project has not met the expectations of
the parties,
either with regard to quantity or quality, due to a number of factors
described in Ordinance No. 109.
C. The parties to those agreements have now
determined that the Project Expansion, if
implemented, will allow the use of more recycled water and
the consequent savings of more potable water for the
financing, construction and operation of an
expanded recycled water project consisting of the addition of a
reverse osmosis desalination unit to the tertiary treatment plant facilities of the
existing CAWD wastewater
treatment plant,
thereby producing “Recycled Water” as defined herein, and
storage facilities resulting from refurbishment of the Forest Lake Reservoir
located in Pebble Beach, as such desalination
unit and other facilities are more
specifically described on Exhibit “C” hereto.
D. MPWMD desires that Buyer enter into a
long-term requirements agreement to purchase a more reliable supply
of such Recycled Water suitable
for irrigation of Buyer’s Property without
the addition of any potable water thereto (except
during an Interruption as defined herein), and Buyer desires
a
more reliable supply of Recycled Water and is therefore willing to
enter into such a requirements agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and the covenants and representations and warranties set forth in this Agreement, the parties have agreed as follows:
1. Definitions. As used in this Agreement, the following terms shall have the following meanings:
1.1 “Annual Charge” means the aggregate amount of all monthly quantity, service, and equalization charges payable by Buyer for any water year (October 1st through the following September 30th) as those charges are described in section 2.2 below.
1.2 “Basic Penalty” has the meaning set forth in section 2.5 below.
1.3
Not Used.
1.4 “Buyer” means the entity that has entered
into this agreement to purchaser from
MPWMD of Recycled Water pursuant to this
Agreement in quantities
sufficient to meet all of the irrigation needs of Buyer’s Property.
1.5 “Buyer’s Property” means {Pebble Beach Golf Course, Spyglass Hill Golf Course, Spanish Bay Golf Course, Peter Hay Par 3 Golf Course, the Pebble Beach Practice Fairway, and the Collins Field/Polo Field/Equestrian Center complex, and various other Recycled Water Irrigation Areas} owned by Buyer, located in Del Monte Forest, Monterey County, California.
1.6 “Cal-Am” means California-American Water Company, a California corporation.
1.7 “Capital Cost” has the meaning set forth in attached Exhibit A.
1.8 “CAWD” means the Carmel Area Wastewater District, a California public agency.
1.9 “Certificates of Participation” means the
Certificates of Participation issued by MPWMD in 1992 in the amount of $33.9 million to finance the Capital Costs
of the Original Project, as more fully described in the Supplemental Financing
Agreement. Not Used
1.10 “Supplemental Construction and Operation Agreement” means the Supplemental Construction and Operation Agreement by and among MPWMD, CAWD, PBCSD and PBC, which superseded the Wastewater Reclamation Project Construction and Operation Agreement, dated as of November 1, 1990.
1.11
Not Used“CAWD/PBCSD”
means CAWD and PBCSD, which entities will own the Project and, through the
Management Committee, manage, and be jointly and severally
responsible for, the design, construction, operation and maintenance of the
Project.
1.12
“Completed” with respect to the Project Expansion
shall mean that (1) all required permits or other approvals have been obtained,
(2) all construction activities for the advanced treatment components (being added
to the tertiary treatment plant facilities of the Original Project), Forest
Lake Reservoir, and all treatment, and distribution facilities associated
therewith, have been completed and tested in accordance with
their respective approved plans, permits and other approvals, (3) Forest Lake
Reservoir has been filled to capacity with “Recycled Water” suitable for
irrigation of all portions of the Recycled Water Irrigation Areas without the
addition of any potable
water thereto and otherwise meeting all regulatory and health standards for
such usage, and (4) all portions of the distribution system are capable of
delivering such Recycled Water to the Recycled Water Irrigation Areas.
1.13 Del Monte Forest” means the area of
unincorporated Monterey County … as described
and/or depicted on
Exhibit “F.”
[PBC will need to assist
in defining this area, perhaps by reference to the LUP] .
1.13 Not
Used“
1.14 “Due Date” has the meaning set forth in section 2.5 below.
1.15
“Emergency” means one or
more a sudden,
unexpected occurrences,
beyond the reasonable control of the entity having operation and maintenance
responsibilities of a particular facility comprising part of the ProjectCAWD
and/or PBCSD, and not resulting from regular or planned
maintenance, repair, or replacement activities, which occurrence causes that
interrupt the supply of severe
reduction or total loss of production, distribution, or storage of Recycled
Water to the
Recycled Water Irrigation Areas, demanding
immediate and
diligent action by such entity to restore
such supply prevent
or mitigate the interruption
or cessation of Recycled Water service. Under no circumstances shall an Emergency last
longer than the period of time reasonably required to promptly
and diligently complete the repair or replacement activities Notwithstanding
the preceding sentence, such occurrence(s) shall only comprise an Emergency for
purposes of this Agreement for a maximum of 30 days within any 180 consecutive
day period.
1.16 “Financial Commitment” and “Supplemental Financial Commitment” shall each hasve the respective
meanings
specified in MPWMD
Ordinance No. 109 the
Supplemental Financial Agreement.
1.17
“Fiscal
Sponsorship Agreement” “Supplemental
Financing Agreement”
means the Supplemental Financing Agreement between MPWMD
and PBC which superseded the Wastewater Reclamation
Project Fiscal Sponsorship Agreement between MPWMD and PBC, dated
as of October 3, 1989.
1.18 “Golf Courses” means the seven eighteen
hole golf courses, located in Del Monte Forest, Monterey
County, California and described on attached Exhibit D. There are currently seven such Golf Courses.
1.19 “Indemnified Party” has the meaning set forth in section 10.1 below.
1.20 “Indemnifying Party” has the meaning set forth in section 10.1 below.
1.21
“Independent Recycled
Water Users Group” or “IRWUG” means
the Cypress Point Golf Club, Poppy Hills Golf Course, and Monterey Peninsula
Country Club.
1.22 “Interruption”
means an interruption for longer than { [hours] [days]} in the
supply of Recycled Water to a Recycled Water Irrigation Area. The
use of potable water for irrigation of a Recycled Water Irrigation Area shall
not extend for any longer than the period of time reasonably required to promptly
and diligently complete repair or replacement activities necessary to restore
Recycled Water service except as determined in accordance with subsection F of
MPWMD Rule 23.5. Not Used.
1.232
“Irrigation System” means the present
water supply system for Buyer’s Property together with the Irrigation System
Improvements.
1.243 “Irrigation System Improvements” means those
modifications added to the water supply system for Buyer’s Property to irrigate
Buyer’s Property with Recycled Water.
1.24 Not Used
1.25
“Management Committee” means a
committee composed of (a) two representatives of CAWD, (b) two representatives
of PBCSD, and (c) one representative of PBC, and
(d) one, non-voting representative of IRWUG (to become a voting member after
the Certificates of Participation are fully paid and retired). The Management which
Committee will, pursuant to the
Supplemental Construction and Operation Agreement, direct budgeting for, and
the construction and operation of, the Project.
1.26
“Minimum Allotment” has the
meaning set forth in section 6.3(a) below.
1.27
“Minimum Purchase”
means the Buyer’s share of the yield of the Project, determined as set forth in
section 2.4 below.
1.278
“Monterey Peninsula Water Management
District Law” means Chapter 527 of the California Statutes of 1977, as amended
to the date of this Agreement.
1.2.8 “MPWMD” means the Monterey Peninsula Water Management District, a California public agency.
1.29 “Net
Operating Deficiencies” has the meaning set forth in MPWMD Ordinance No. 109the
Supplemental Financing Agreement.
1.30
“Operating Revenues” has the meaning
set forth in MPWMD Ordinance No. 109the Supplemental
Financing Agreement.
1.31 “Operation and Maintenance Expenses” has
the meaning set forth in MPWMD Ordinance No. 109the Supplemental
Financing Agreement.
1.32 “Other Recycled Water Irrigation Areas” means the Recycled Water Irrigation Areas described in attached Exhibit D other than the Golf Courses.
1.33 “Other Property” has the meaning set forth in section 2.8 below.
1.34 Not Used
1.35 “Owners” means the owners of each of the Recycled Water Irrigation Areas, and includes Buyer with respect to its ownership of Buyer’s Property.
1.36 “PBCSD” means the Pebble Beach Community Services District, a California public agency.
1.37 “PBC” means the Pebble Beach Company, a California general partnership.
1.38 “Percentage Share” means the percentages that are set forth on attached Exhibit D for each of the Recycled Water Irrigation Areas.
1.39” “Permits” has the meaning set forth in section 4.2 below.
1.40
“Project” means the tertiary treatment
facilities, distribution facilities, and storage facilities used since 1995 to
create, distribute, and store Recycled Water, comprising the
Original Project as defined in subsection 1.40 (a)
hereof, and the reverse osmosis desalination unit located at the
CAWD wastewater treatment plant site and the refurbished Forest Lake Reservoir
located within PBCSD, together comprising the Expanded
Project Expansion as defined in subsection 1.40
(b) hereof.
(a) The “Original Project” means and consists
of (1) a tertiary treatment facility at the present CAWD wastewater treatment
plant site, designed to produce at least 800 acre feet per year of disinfected
recycled water suitable for irrigation of the Recycled Water Irrigation Areas,
as more specifically described on Exhibit “B” hereto, (2) a distribution system
which is capable of distributing the recycled water from the facility to a
point of distribution in the Del Monte Forest for further distribution to the
Recycled Water Irrigation Areas, as more specifically described on Exhibit “B”
hereto, and (3) recycled water irrigation systems on each of the Recycled Water
Irrigation Areas.
(b) The “Expanded Project
Expansion”
consists of the addition of advanced treatment components reverse
osmosis desalination unit to the tertiary treatment
plant
facilities of the Original Project, thereby producing “Recycled
Water” as defined in section 1.43 herein, and the addition of storage,
treatment, and distribution facilities resulting from
refurbishment of at or associated with the Forest Lake
Reservoir located within the Del Monte Forest and owned by PBCSD,
as such desalination unit and other facilities are more
specifically described on Exhibit “C” hereto Not
Used.
1.41 “Public Participant” means any one or more of the following: MPWMD, CAWD, PBCSD, or any successor public agency, including, without limitation, any joint powers agency formed by one or more of such agencies.
1.42
“Rate Schedule”
has the meaning set forth in section 2.2 below.
1.43 The
meaning of the term “Recycled Water” depends upon whether or not the Project
Expansion is Completed:
(a) Before
the Project Expansion is Completed, “Recycled
Water” means water
originating from
tertiary treatment facilities as secondary
effluent produced by of the existing
CAWD
wastewater treatment plant.
(b)
After the Project Expansion is Completed, “Recycled Water” shall mean water produced
by the Project and meeting
the quality standards
set forth on Exhibit G to this Agreement receiving further treatment
so as
to be suitable for irrigation of all
portions of the Recycled Water Irrigation Areas without the addition of any potable water thereto
(except during an Emergency
Interruption
as defined
herein), and otherwise meeting all
regulatory and health standards for such usage.
1.44 “Recycled Water Irrigation Areas” means all of the Golf Courses
and the Other Recycled Water Irrigation Areas as each are respectively
described in attached Exhibit D, all of which will utilize Recycled Water, in
lieu of potable water, for irrigation purposes.
1.45 “Related Agreements” means the agreements contemplated by Ordinance No. 109 and this Agreement, or otherwise reasonably necessary to implement the Project, and addressing all matters related to the Project as the parties may deem necessary or advisable, including, without limitation, the agreements between MPWMD and each owner of one or more of the Recycled Water Irrigation Areas, the Supplemental Construction and Operation Agreement, the Fiscal Sponsorship Agreement, and the Supplemental Financing Agreement.
1.46
“Shortfall Period” has the meaning set forth in
section 6.3 below.
1.47 “Supplemental Financing Agreement” means the Supplemental Financing Agreement between MPWMD and PBC which supplements but does not supersede the Fiscal Sponsorship Agreement, dated as of October 3, 1989
1.486
“Surplus Recycled Water” has the meaning
set forth in section 2.8 below.
1.497 “Unpaid Balance” has the meaning set forth in
section 2.5 below.
1.50 “Water Year” means the period of one year beginning on October 1st and continuing through the following September 30th.
2. Purchase and Sale of Recycled Water.
2.1
Quantities of Recycled Water. During the term of this Agreement, MPWMD shall
sell and deliver to Buyer, and Buyer shall purchase and accept from MPWMD, such
quantities of Recycled Water as Buyer shall require, from time to time, use
on to irrigate Buyer’s Property; subject,
however, to the provisions of sections 6.1, 6.2 and 6.3, which shall govern the
rights of the parties only in the event that the Project is
unable to produce and deliver a sufficient quantity of Recycled Water to meet
all of the irrigation requirements of the Recycled Water Irrigation Areas.
During the term of this Agreement, Buyer shall not purchase or use water other
than Recycled Water, for the purpose of irrigating Buyer’s Property, except
that Buyer may collect and use water falling upon or passing through [or underlying] Buyer’s
Property for such purpose. Any such use of water falling upon or passing
through [or underlying] Buyer’s
Property by Buyer pursuant to the preceding sentence shall be consistent with
the requirements of all Permits, as defined in section 4.2 below, and otherwise
in compliance with all applicable laws and regulations. Additionally, any such
use shall be reported to MPWMD on a quarterly basis at the same time Buyer
submits its quarterly estimates as required by section 2.8.(c) below. Buyer’s
report shall include the source, quantity, time(s), and duration(s) of any such
use, and any other information reasonably requested by MPWMD.
2.2 Charges for Recycled Water Use. Subject to the provisions of sections 2.3 and 2.4, MPWMD shall charge Buyer for service by the Project and for the use of Recycled Water as follows:
(a) A monthly quantity charge based on the quantity of Recycled Water used calculated in the same manner as the quantity charge for similarly-situated potable water users in the gravity zone as set forth in the then current Tariff Schedule for General Metered Service for the Cal-Am Monterey Peninsula Tariff Area, or any successor schedule, as approved by the California Public Utilities Commission (the “Rate Schedule”).
(b) A monthly service charge based on the size of Buyer’s Recycled Water meter(s) calculated in the same manner as the service charge for similarly-situated potable water users in the gravity zone as set forth in the Rate Schedule.
(c) A monthly equalization charge based on the aggregate amount of all taxes, charges, surcharges, assessments, fees, or other monetary impositions of any kind, however denominated and for whatever purposes, that from time to time are due and payable by similarly-situated potable water users. The aggregate amount of all monthly quantity, service, and equalization charges payable by Buyer for any water year is herein referred to as the “Annual Charge.” The express intent of MPWMD and Buyer, subject to sections 2.3 and 2.4, is that Buyer’s Annual Charge for the use of Recycled Water shall equal, and to the extent practicable, shall not exceed the annual charges Buyer would have paid to Cal-Am and MPWMD for service by the Cal-Am water system and the use of potable water for irrigation of Buyer’s Property (excluding elevation zone differentials).
2.3
Reduction in Annual Charge. Upon the
later to occur of (a) payment of the Certificates of Participation in full or
(b) termination of the Financial Commitment with respect to Net Operating
Deficiencies, MPWMD shall reduce Buyer’s charges under section 2.2 for the
balance of the water year in which the later of such events occurs to a level
that assures, to the extent practicable, that
Operating Revenues do not exceed, and to the extent practicable, equal, without
exceeding, the reasonable Operation and
Maintenance Expenses for that water year.
For each water year thereafter, the
Annual Charge for Buyer and all other Owners shall be calculated by MPWMD
independently of Cal-Am’s annual charges for potable water users and shall be
set at a level that assures, to the extent practicable, that
Operating Revenues do not exceed, and to the extent practicable, equal,
without exceeding, the reasonable
Operation and Maintenance Expenses, provided, however, that in no event shall
Buyer’s Annual Charge for any such water year exceed the an amount
comparable
to the amount Buyer would have paid for such water year if
calculated pursuant to section 2.2 above.
Operation and Maintenance Expenses shall be independently audited annually.
2.4
Minimum Purchase. Irrespective of
the amount of Recycled Water actually used by Buyer, Buyer shall be deemed to
have purchased under section 2.1, and shall be obligated to pay for under
section 2.5, a minimum amount of Recycled Water in each water year (the
“Minimum Purchase”). Buyer’s Minimum Purchase for each Water Year is
set forth in attached Exhibit D and is based upon calculated
by multiplying Buyer’s Percentage Share of times
[eight hundred
six
hundred fifty (65800)]
acre feet of Recycled Water per year. If Buyer’s Property
consists of more than one of the Recycled Water Irrigation Areas, then Buyer’s
total Percentage Share shall be the aggregate of the percentage shares for all
Recycled Water Irrigation Areas owned by Buyer. In that case, Buyer’s total
Minimum Purchase shall be the aggregate of the Minimum Purchases for all
Recycled Water Irrigation Areas owned by Buyer. Buyer’s actual purchase
of Recycled Water in any water year for use on any of the Recycled Water
Irrigation Areas owned by Buyer shall be applied toward satisfaction of Buyer’s
total Minimum Purchase requirement for such year. Buyer shall be required to
take delivery of and use only that amount of Recycled Water necessary to
satisfy the irrigation requirements for Buyer’s Property and in the event that
Buyer requires less than the full amount of the Minimum Purchase during a given
water year, no Recycled Water in excess of Buyer’s requirements shall be
delivered. Buyer’s obligation to pay for the Minimum Purchase, to the extent
the Minimum Purchase exceeds the amount of Recycled Water actually purchased
and used by Buyer in any given water year, shall be calculated in the manner
provided in section 2.5(b), and payment shall be made as provided in section
2.5(c). At such time as the price for Recycled Water may be reduced pursuant to
section 2.3, Buyer’s obligations under this section 2.4 shall terminate
2.5 Payment for Recycled Water.
(a) MPWMD (or its agent for purposes of billing and collection) shall invoice Buyer for all quantity charges, service charges, and equalization charges payable under section 2.2 on a monthly basis in accordance with the Cal-Am billing procedures then in effect with respect to potable water customers.
(b) At the conclusion of each water year, MPWMD shall prepare a final invoice for such water year to reflect, if necessary, the following adjustments:
(i) First, MPWMD shall calculate the total quantity of Recycled Water used and purchased by Buyer during such water year. If such total is less than the Minimum Purchase, then MPWMD shall invoice Buyer for the quantity charge payable under section 2.2 for a quantity of Recycled Water represented by the difference between the Minimum Purchase and the total quantity of Recycled Water used and purchased by Buyer during such water year.
(ii) Second, MPWMD shall determine whether the sum of (A) Buyer’s total payments under subsection 2.5(a) above for such water year and (B) the amount, if any, owed by Buyer under subsection 2.5(b)(i) above is equal to the Annual Charge properly payable by Buyer under section 2.2. If such sum is less than the Annual Charge properly payable by Buyer for such water year, then MPWMD shall invoice Buyer for the difference.
(c) Each such invoice shall be due and payable by Buyer within the time period for payment then provided by Cal-Am with respect to potable water customers. If Buyer fails to pay to MPWMD the full amount owing under any such invoice (the “Unpaid Balance”) on or before the last day of such time period (the “Due Date”), Buyer shall be obligated to pay to MPWMD a basic penalty of ten percent (10%) of the Unpaid Balance, as provided in section 326(g) of the Monterey Peninsula Water Management District Law (the “Basic Penalty”). Additionally, if Buyer fails to pay the full amount of the Unpaid Balance and the Basic Penalty on or before ten (10) days after the Due Date, Buyer shall be obligated to pay to MPWMD interest on the Unpaid Balance and the Basic Penalty at the rate of one-half of one percent (1/2%) per month from the Due Date until paid, as provided in section 326(g) of the Monterey Peninsula Water Management District Law. Additionally, MPWMD shall have all other remedies against Buyer available under the Monterey Peninsula Water Management District Law, including, without limitation, the lien rights provided by section 326(h).
2.6
Measurement of Use of Recycled
Water. The actual use of Recycled Water by Buyer for Buyer’s Property shall be
measured by a water meter or meters to be installed
for the purpose of measuring such use. The measurement of such use determined
by MPWMD (or its agent for purposes of billing and collection) by reading such
water meter shall be deemed to be conclusive and binding on the parties, absent
manifest error.
2.7 Supplemental
Potable Water pursuant to section 6.1. Any potable water delivered to and used
by Buyer pursuant to the provisions of section 6.1 shall be deemed to be
“Recycled Water” purchased and used by Buyer for purposes of sections 2.2, 2.4,
2.5 and 2.6 of this Agreement, but for no other purposes, and no other potable
water purchased and/or used by Buyer shall be deemed “Recycled Water” for
purposes of this Agreement. Buyer
shall pay MPWMD and MPWMD shall pay Cal-Am for such water.
2.8 Right of First Offer. MPWMD and Buyer acknowledge and agree that the rights of Buyer and any other Owner to purchase and receive Recycled Water for their respective Recycled Water Irrigation Areas shall be primary and superior to the rights of Buyer, any other Owner, or any other person to purchase and receive Recycled Water for any suitable use on any property other than the Recycled Water Irrigation Areas (“Other Property”). Subject to this express acknowledgement and agreement, MPWMD and Buyer further acknowledge that the Project may be capable of producing more Recycled Water during certain time periods than the aggregate amount of Recycled Water required by the Recycled Water Irrigation Areas during such time periods (“Surplus Recycled Water”). With respect to any Surplus Recycled Water, MPWMD and Buyer therefore further agree as follows:
(a) Buyer and all other Owners shall have a correlative right of first offer to purchase all or a portion of the Surplus Recycled Water on the terms and conditions set forth in attached Exhibit E.
(b) If Buyer and the other Owners fail to exercise their respective rights of first offer, or if Surplus Recycled Water is available even after Buyer or any other Owner has exercised its right of first offer, then MPWMD shall take the following actions:
(i) MPWMD shall use its best efforts to sell any such Surplus Recycled Water to purchasers who will use the water for commercial purposes. The provisions of any such contract shall include the following:
(1) the price for the Surplus Recycled Water shall be the highest price then available in the market, but in no event less than Buyer would pay for such water pursuant to this Agreement;
(2) the term of the contract shall be limited to six (6) months;
(3) the contract shall be on an “as available” basis, with an express acknowledgement that Surplus Recycled Water can only be supplied to the proposed buyer on a daily basis to the extent the requirements of the Recycled Water Irrigation Areas have been completely satisfied.
(ii) If, after using its best efforts, MPWMD is unable to secure any commercial purchasers pursuant to clause (i) above, MPWMD may contract to sell the Surplus Recycled Water to purchasers who will use the water for any public benefit. The provisions of any such contract shall include the following:
(1) The price for the Surplus Recycled Water shall be the highest price attainable by MPWMD, but in no event less than the cost to MPWMD of producing and delivering the Surplus Recycled Water;
(2) the term of the contract shall be limited to thirty (30) days;
(3) the contract shall be on an interruptible, “as available” basis, with an express acknowledgement that Surplus Recycled Water can only be supplied to the proposed buyer on a daily basis to the extent the requirements of the Recycled Water Irrigation Areas have been completely satisfied.
(c)
To assist MPWMD in determining whether any Surplus Recycled Water may be
available, Buyer shall submit to MPWMD on or before the first day of each new
quarter (based on a water year), an estimate of its projected Recycled Water
use for that quarter. MPWMD agrees that any such estimate is to be provided
solely as a convenience to MPWMD, with no obligation on Buyer to adhere to the
amount of such estimate for any purpose.
(d) All revenues from the sale of Recycled Water shall be applied to Capital Costs or other Project expenses.
3. Term.
3.1 Term. This Agreement shall commence and be effective and binding on the parties on the date first set forth above, and continue and remain in effect until the date on which the Certificates of Participation are fully paid, or the date which is thirty (30) years after the date first set forth above, whichever is later, and thereafter until terminated pursuant to section 3.2.
3.2
Termination by MPWMD or Buyer. After
the Certificates of Participation have been fully paid, or thirty (30) years
after the date first set forth herein, whichever is later, either MPWMD or
Buyer may terminate this Agreement upon providing the other party at least six
(6) months written notice of termination; provided, however, that neither party
may terminate this Agreement unless an alternative long-term
supply of non-potable
water of sufficient quality and quantity to meet all
of the irrigation
needs on Buyer’s Property is then reasonably
available to Buyer in quantities sufficient for irrigation of all of
Buyer’s Property.
4. Irrigation System.
4.1 Recycled Water Irrigation Area Ownership and Operation. Buyer shall continue to be the owner of the Irrigation System, including the Irrigation System Improvements. Buyer shall continue to be responsible for the operation, including, without limitation, maintenance and repair, of the Irrigation System, including the Irrigation System Improvements, and for all related costs and expenses.
4.2 Permits. MPWMD and Buyer acknowledge that certain governmental permits, approvals, and authorizations (collectively, “Permits”) will be required in order to use the Recycled Water on the Recycled Water Irrigation Areas as a part of the Project. Buyer shall (a) timely execute and file all applications for all Permits necessary to use the Recycled Water on Buyer’s Property in the manner contemplated or required by this Agreement, and (b) timely satisfy and comply with all terms and conditions of all Permits, provided, however, that Buyer shall have the right to object to the imposition of any unreasonable terms or conditions proposed in any Permits. Buyer shall at all times maintain the Permits in full force and effect at its own expense. The Permits shall include, without limitation, those required by the California Coastal Commission, the County of Monterey, the California Regional Water Quality Control Board, and the Monterey Bay Unified Air Pollution Control District.
5. Water Quality.
5.1
Quality of Recycled Water. Pursuant to the Supplemental Construction and
Management Agreement, CAWD and/ PBCSD
shall, jointly and severally, each use
their respective best efforts to assure that
all Recycled Water sold to Buyer meets the quality
standards set forth in Exhibit G hereto, is
suitable for irrigation of all
portions of the Recycled Water Irrigation Areas
without the addition of any potable water thereto (except during
for an
aggregate of 30 days or less within a 180 consecutive day period in the case
of an InterruptionEmergency), and
otherwise meets all regulatory and health standards for such usage. Buyer shall
be an intended beneficiary of the Supplemental Construction and Operation
Agreement so as to enable it to enforce the requirements set
forth in the preceding sentence.
5.2 Water Quality Reports. Upon request, Buyer shall be entitled to receive from MPWMD copies of any reports prepared by or on behalf of MPWMD relating to the quality of the Recycled Water sold to Buyer.
6. Water Quantity.
6.1
Supply of Potable Water during an Interruption Emergency.
In an Interruption Emergency as
defined in section 1.2215 herein,
then (a) MPWMD hereby finds, and the parties agree, that non-potable water is
not “reasonably available” in such circumstances to meet all of the irrigation
requirements of the Recycled Water Irrigation Areas and (b) except as otherwise
provided in section 6.2, MPWMD shall arrange for Cal-Am to supply to the 2.5
million gallon Recycled Water storage tank adjacent to the Poppy Hills Golf
Course maintenance yard north of Viscaino Road in Del Monte Forest sufficient
quantities of potable water to meet the irrigation requirements of the Recycled
Water Irrigation Areas, subject to the procedures and limitations set forth
in subsections (a) through (c) below:
(a) If there is an Interruption in Recycled Water
deliveries to any Recycled Water Irrigation Area, the temporary use of potable
water for irrigating each such Recycled Water Irrigation Area is authorized in
the manner described in this Subsection F.
Following written notice to MPWMD from an owner of the affected area,
CAWD, PBCSD and/or Cal-Am, CAWD, PBCSD and/or Cal-Am are authorized to turn on
the connection by which potable water enters the distribution system serving the
Recycled Water Irrigation Areas (the Poppy Hills tank as of the date
that Ordinance 109 is adopted).
(b) If potable water usage continues for longer
than [30] days, MPWMD may hold a
hearing to determine what quantities of potable water shall continue to be
supplied for irrigation of the affected Recycled Water Irrigation Area. Under normal circumstances, the use of
potable water for irrigation of a Recycled Water Irrigation Area shall not
extend for any longer than the period of time reasonably required to promptly
and diligently complete repair or replacement activities necessary to restore
Recycled Water service, provided that potable water shall be made available for
irrigating tees and greens without any limitation on the duration.
(c) MPWMD shall give the owners of each affected Recycled Water Irrigation Area not less than [ ] days written notice of any such hearing. Upon rendering its determination of what quantities of potable water shall continue to be supplied for irrigation of the affected Recycled Water Irrigation Area, MPWMD shall give the owners of the affected Recycled Water Irrigation Area not less than 10 days written notice of any hearing determination, and the determination shall take effect on the 11th day following service of the notice by personal delivery or by facsimile, or the 16th days following service of the notice by mail.
6.2 Water Supply Emergency during Chronic Area-Wide Drought. In the event that MPWMD has declared a lawful “water supply emergency” (as defined in section 332 of the Monterey Peninsula Water Management District Law) and has imposed water rationing on all users of potable water within the Cal-Am service area, then MPWMD shall have no obligation to supply any potable water under the provisions of section 6.1. In such event, however, inasmuch as MPWMD finds and the parties agree that non-potable water will not then be “reasonably available” to meet all of the irrigation needs of the Recycled Water Irrigation Areas (as provided in section 6.1), MPWMD agrees that Buyer and the other Owners shall have a right to receive potable water from Cal-Am or any other source under MPWMD’s control to supplement the Recycled Water on a basis that assures that Buyer and the other Owners will have the irrigation requirements of the Recycled Water Irrigation Areas satisfied to the same degree that the irrigation requirements of any similar non-Project golf courses or Recycled Water Irrigation Areas within the service area of Cal-Am or such other source are being satisfied from the system of Cal-Am or such other source.
6.3
Allocation in Time of Shortage. In the event that the Recycled Water produced
and delivered by the Project, as supplemented by potable water under the
provisions of section 6.1 or section 6.2 above, is insufficient to meet the
aggregate requirements of the Recycled Water Irrigation Areas at any given time
(a “Shortfall Period”), then the aggregate amount of Recycled Water and potable
water available through the Distribution System shall be allocated among all of
the Recycled Water Irrigation Areas in the manner agreed by all of the Owners.
In the absence of such any subsequent
agreement, the aggregate amount of Recycled Water and potable
water available during any given Shortfall Period shall be allocated among each
of the Owners in proportion to their respective
Percentage Shares as set
forth in attached Exhibit D,
which allocates equal amounts of water to each of the seven eighteen-hole Golf
Courses in operation as of the date that Ordinance No. 109
becomes effectiveas follows: (a) Each Golf Course shall receive an
equal quantity of Recycled Water and potable water up to a maximum of fifty
thousand (50,000) gallons per day and each Other Recycled Water Irrigation Area
shall receive an equal quantity of Recycled Water and potable water up to a
maximum of five thousand (5,000) gallons per day (in
either case, such quantity is referred to as the “Minimum
Allotment”).
(b) After
each Recycled Water Irrigation Area has received its full Minimum Allotment, any
additional Recycled Water and potable water available during the Shortfall
Period shall be allocated among each of the Owners for use
in their sole discretion on
their respective Recycled Water Irrigation Areas in accordance with their
respective Percentage Shares set forth in attached Exhibit D.
(c) If
Buyer’s Property consists of more than one of the Recycled Water Irrigation
Areas, then Buyer’s Minimum Allotment and Percentage Share
shall be the aggregate of the Minimum Allotments and Percentage Shares for all
the Recycled Water Irrigation Areas owned by Buyer. In that case, Buyer may use
its
Minimum Allotment and its Percentage Share of any additional
Recycled Water and potable water available during any Shortfall Period on all
or any of the Recycled Water Irrigation Areas owned by Buyer in any manner
Buyer determines in its sole discretion.
(d) At
no time during any Shortfall Period or otherwise during the term shall any
Recycled Water Irrigation Area receive or use a
quantity of Recycled Water and potable water in excess of its irrigation
requirements.
6.4 Upon request, Buyer shall be entitled to receive from MPWMD copies of any reports prepared by or on behalf of MPWMD relating to the use of Recycled Water and potable water by the Recycled Water Irrigation Areas for irrigation, including, without limitation, any reports relating to any Shortfall Periods.
7. Operation of the Project.
7.1 Standards of Operation. Buyer shall ensure that the Irrigation System is operated, maintained and repaired in compliance with (a) applicable provisions of federal, state and local laws, regulations, permits and approvals, including, without limitation, the Permits, (b) insurance policies in place with respect to such Irrigation System, (c) good engineering practices, and (d) prudent business practices. The Project shall be operated, maintained and repaired as provided in the Supplemental Construction and Operation Agreement. Buyer shall be an intended beneficiary of the Supplemental Construction and Operation Agreement so as to enable it to enforce the requirement set forth in the preceding sentence.
7.2 Insurance on Irrigation System.
(a)
Buyer shall continue to obtain and maintain in effect during the term of this
Agreement insurance for the Irrigation System, with such sufficient
coverages therefor (including with respect to
risks, amounts and deductibles), and with such insurance companies, as are authorized
by the Commissioner of Insurance to supply insurance in
the State of California approved by MPWMD and
PBC, which approval shall not be unreasonably withheld or delayed.
Each such insurance policy shall (1) name MPWMD and PBC as an additional
insured thereunder, and (2) provide that it may not be terminated or amended or
otherwise modified, in any material respect, without MPWMD and PBC being given
at least thirty (30) days prior written notice of such termination, amendment
or modification. Upon receipt of any such notice, MPWMD and PBC shall have the
same approval rights with respect to any replacement policy or any material
amendment or other modification as they had with respect to the original
policy. Upon the initial placement and the renewal of each such insurance
policy, Buyer shall provide MPWMD and PBC with written evidence, in the form of
policies or certificates of insurance, of such insurance.
(b) In the event that a casualty should occur to any portion of the Irrigation System on Buyer’s Property, Buyer shall promptly thereafter repair or reconstruct such portion using any proceeds of the insurance described in section 7.2(a) above and such other funds of Buyer as are necessary to complete such work.
7.3
Insurance on Project. The Supplemental Construction and Operation Agreement
requires CAWD / and PBCSD,
jointly
and severally, to obtain and maintain insurance with respect to
the portions of the Project
and the operations thereof the for
which each is responsible Project;
Buyer shall be named as an additional insured under any such insurance
policies. Buyer shall be an intended
beneficiary of the Supplemental Construction and Operation Agreement so as to
enable it to enforce the requirement set forth in the preceding sentence.
8. Representations and Warranties and Covenants.
8.1 Mutual Representations and Warranties. MPWMD and Buyer each hereby represents and warrants to the other that:
(a) the execution and delivery of this Agreement, and the performance of its obligations under this Agreement, have been duly authorized by all necessary action on its part, and it has full power, right and authority to enter into this Agreement and to perform its obligations hereunder;
(b) neither the execution and delivery of this Agreement by it, nor the performance by it of any of its obligations under this Agreement, violates any applicable federal, state or local law, whether statutory or common, or regulation, or its charter documents, if any, or constitutes a violation of, or a breach or default under, any agreement or instrument, or judgment or order of any court or governmental authority, to which it is a party or to which it or any of its property is subject;
(c) this Agreement is a valid and binding obligation of it, enforceable against it in accordance with its terms, except as such enforceability may be limited by equitable principles or by bankruptcy or other laws affecting creditors, rights generally; and
(d) except as may be required to construct and operate the Irrigation System, no consent, approval, order or authorization of any person, entity, court or governmental authority is required on its part in connection with the execution and delivery of this Agreement or the performance by it of any of its obligations hereunder.
9. Remedies.
Neither MPWMD nor Buyer shall have the right to terminate this Agreement as a result of a breach of this Agreement by the other. Subject to the foregoing limitation, each party may avail itself of such rights at law or in equity as such party may have as a result of a breach of this Agreement by the other. Each of the parties hereby acknowledge that the other party may have no adequate remedy at law if such party breaches any of its obligations hereunder, and, accordingly, each of the parties shall have the right, in addition to any other rights it may have hereunder or at law, to obtain, in any court of competent jurisdiction, injunctive relief to restrain a breach or threatened breach of this Agreement by the other party or otherwise to specifically enforce any of the provisions of this Agreement involved in any such breach or threatened breach.
10. Indemnification.
10.1 General Indemnification. Subject to the limitations in this section 10, each party (the “Indemnifying Party”) shall defend and indemnify, and hold harmless, the other party (the “Indemnified Party”) from and against any and all damages, liabilities, losses, and costs or expenses suffered or incurred by the indemnified party, arising out of, or resulting from, any breach of its representations, warranties or agreements set forth in this Agreement.
10.2 Procedure for Indemnification. In the event that any legal proceedings are instituted, or any claim or demand is asserted, by any third party which may give rise to any damage, liability, loss, or cost or expense in respect of which any party has indemnified, or is obligated to indemnify, the other party under section 10.1 above, the indemnified party shall give the indemnifying party written notice of the institution of such proceedings, or the assertion of such claim or demand, promptly after the indemnified party first be comes aware thereof; provided, however, any failure by the indemnified party to give such notice on such prompt basis shall not affect any of its rights to indemnification hereunder unless such failure materially and adversely affects the ability of the indemnifying party to defend such proceeding. The indemnifying party shall have the right, at its option and at its own expense, to utilize counsel of its choice in connection with such proceeding, claim or demand, subject to the approval of the indemnified party, which approval shall not be unreasonably withheld or delayed, and to defend against, negotiate with respect to, settle or otherwise deal with such proceeding, claim or demand; provided, however, that no settlement of such proceeding, claim or demand shall be made without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld or delayed, unless, pursuant to the terms and conditions of such settlement, the indemnified party shall be released from any liability or other exposure with respect to such proceeding, claim or demand; and provided, further, that the indemnified party may participate in any such proceeding with counsel of its choice at its own expense. In the event, or to the extent, the indemnifying party elects not to, or fails to, defend such proceeding, claim or demand and the indemnified party defends against, settles or otherwise deals with any such proceeding, claim or demand, any settlement thereof may be made without the consent of the indemnifying party if it is given written notice of the material terms and conditions of such settlement at least ten (10) days prior to a binding agreement with respect to such settlement being reached. Each of the parties agrees to cooperate fully with each other in connection with the defense, negotiation or settlement of any such proceeding, claim or demand.
10.3 Payment of Indemnified Claim. Upon a final judgment or award with respect to any proceeding of the nature described in section 10.2 having been rendered by a court, arbitration board or administrative agency of competent jurisdiction and the expiration of the time in which an appeal therefrom may be made, or a settlement of such proceeding, claim or demand having been consummated, or the parties having arrived at a mutually binding agreement with respect to each separate matter indemnified hereunder pursuant to section 10.1, the indemnifying party shall forthwith pay all of the sums so owing to the indemnified party. In the event any such proceeding is brought, in which allegations of fault are made against both of the parties, the extent of any indemnification shall be determined in accordance with the findings of the court as to the relative contribution by each of the parties to the damage suffered by the party seeking indemnity with respect to such proceeding.
11. Miscellaneous.
11.1 Standard of Reasonableness for Approvals. Whenever in this Agreement any party has the right to approve or consent to any matter, such approval or consent shall not be unreasonably withheld or delayed.
11.2 Further Assurances. Each of the parties agrees to execute, and deliver to the other parties, such documents and instruments, and take such actions, as may reasonably be required to effectuate the terms and conditions of this Agreement; provided, however, such covenant shall not have the effect of increasing the obligations of any party pursuant to this Agreement or require any representations and warranties by any party in addition to those of such party set forth herein.
11.3 Relationship of the Parties. Nothing in this Agreement shall create a joint venture, partnership or principal-agent relationship between or among any of the parties.
11.4 Notices. Whenever any matter herein provides for notice or other communication to be given to any of the parties, such notice shall be in writing and given to the persons, and at the addresses, designated below for such party, or to such other person or other address as such party shall provide, in writing, to the other party. All notices may be given by being personally delivered or placed in the United States mail, postage prepaid, certified or registered mail, sent by facsimile transmission, or sent by overnight, prepaid air freight, addressed to the party to whom notice is to be given. Each such notice shall be deemed to be effective upon receipt, if personally delivered, sent by facsimile transmission or sent by air freight, or five (5)days after being so mailed.
If to MPWMD: If to Buyer:
Monterey
Peninsula Water {Pebble
Beach Company
Management District
P.O. Box 85 P.O.
Box 1767
Monterey, CA
93942-0085 Pebble
Beach, CA 93953
Attn.: General Manager Attn.:
Mark Stilwell}
11.5 Exhibits. All exhibits referenced in and attached to this Agreement are hereby incorporated herein and made a part of this Agreement, for all purposes, by this reference.
11.6 Assignment. This Agreement shall be binding upon, and inure to the benefit of, the successors and permitted assigns of the parties. Buyer shall have the right to assign any or all of its rights or obligations under this Agreement to (a) an entity which manages Buyer’s Property pursuant to a contract with Buyer; (b) a lessee of Buyer’s Property and (c) a successor in interest in the ownership of Buyer’s Property, and upon such assignment, Buyer shall be relieved of all such obligations so assigned. MPWMD shall have the right to assign its rights under this Agreement to a trustee (or person or entity in a similar capacity) to the extent necessary in connection with the issuance of the Certificates of Participation. Notwithstanding the preceding sentence, neither party may assign or transfer its rights or obligations if to do so would: (1) impair the ability or right of any other party to receive the benefits of this Agreement, or (2) frustrate the purpose for which this Agreement was executed. Nothing herein shall be construed to give any rights or benefits to anyone other than the parties to this Agreement, or to their respective successors and permitted assigns.
11.7 Severability. If any provision of this Agreement is declared invalid or unenforceable in any jurisdiction by a court of competent jurisdiction, then such portion or provision shall be deemed to be severable, to the extent invalid or unenforceable, from this Agreement as to such jurisdiction (but, to the extent permitted by law, not elsewhere) and shall not affect the remainder hereof. Notwithstanding the foregoing, (a) such provision of this Agreement shall be interpreted by the parties and by any such court, to the extent possible, in such a manner that such provision shall be deemed to be valid and enforceable, and (b) such court shall have the right to make such modifications to any provision of this Agreement as do not materially affect the rights or obligations under this Agreement of the parties hereto and thereto and as may be necessary in order for such provision to be valid and enforceable.
11.8 Waiver. No waiver of any right or obligation of any of the parties shall be effective unless in a writing, specifying such waiver, executed by the party against whom such waiver is sought to be enforced. A waiver by any of the parties of any of its rights under this Agreement on any occasion shall not be a bar to the exercise of the same right on any subsequent occasion or of any other right at any time.
11.9 Headings and Titles. The designation of a title, or a caption or a heading, for each section of this Agreement is for the purpose of convenience only and shall not be used to limit or construe the contents of this Agreement.
11.10 Presumptions. Because all of the parties have participated in preparing this Agreement, there shall be no presumption against any party on the ground that such party was responsible for preparing this Agreement or any part hereof.
11.11 Amendment or Modification. This Agreement may be amended, altered, or modified only by a writing, specifying such amendment, alteration or modification, executed by all of the parties hereto.
11.12 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which shall constitute one (1) and the same instrument.
11.13 Entire Agreement. This Agreement and the Related Agreements constitute the entire agreement between the parties regarding the subject matter hereof and thereof, and supersede all prior or contemporaneous negotiations, understandings or agreements of the parties, whether written or oral, with respect to such subject matter.
IN WITNESS OF THE FOREGOING, this Agreement has been executed by the officers of each of the parties effective the date first shown above.
Monterey Peninsula Water [Pebble Beach Company, a California Management District, a a California general partnership] California public agency
By: _____________________ By _________________________
Its: ______________________ Its _________________________
EXHIBIT A
“Capital Costs,” as applied to the Project or any portion thereof, means all or any part of:
(a) the cost of acquisition by CAWD or by PBCSD of all lands, structures, real or personal property, rights, rights-of-way, franchisees, easements, and interests acquired or used for the Project, inclusive of fees and commissions for acquisition;
(b)
the cost of construction of the
Project, including, without limitation, demolition, modification, replacement
or renovation of existing structures, facilities, fixtures or equipment
essential to the construction and operation of the Project; cost of
improvements and materials; direct and indirect construction and.
administration expenses of each of the Public Participants properly allocable
to the Project in accordance with generally accepted accounting principles;
costs of painting, decorating, furnishing
and landscaping; contractor and subcontractor profit; and costs related, by
reason of the Project, to plumbing, mains, tanks or pipes which are modified,
replaced or renovated, whether owned by any of the Public
Participants or others;
(c) the cost of demolishing or removing any buildings, fixtures, equipment, or structures on land so acquired, including, without limitation, the cost of acquiring any lands to which such buildings or structures may be moved;
(d) the cost of all new machinery, piping, equipment and furnishings, and the lesser of (i) the fair market value, or (ii) depreciated value for the purpose of the applicable rate base, of machinery, piping, equipment and furnishings made obsolete or unusable to Cal-Am or any of the Public Participants by reason of the Project to the extent not replaced by the Project;
(e) costs of selling and issuing the Certificates of Participation, including, without limitation, the underwriter’s discount and any other applicable financing charges;
(f) interest on any funds advanced to permit payment of any of the Capital Costs prior to, during, and for a reasonable period after completion of the construction of the Project as determined by PBC and MPWMD, including, without limitation, capitalized interest on the Certificates of Participation;
(g) provisions
for working capital;
(h) the Operating Reserve and other similar reserves for routine or
extraordinary repairs and replacements necessary to the Project, as
defined in the Supplemental Financing Agreement;
(h) the COP Carrying Costs, as that term is
defined in the Supplemental Financing Agreement, to the extent reasonably
determinable by the commencement of the offering of the Certificates of
Participation and payable within one year of the closing of such offering; and
(i) the cost of architectural, engineering, planning, environmental analysis, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, permits, fees, adverse claims, personnel and overhead costs (both direct and indirect, to the extent properly allocable to the Project in accordance with generally accepted accounting principles), and other expenses necessary or incident to determining the feasibility of construction of the Project or incident to the planning, construction, acquisition, or financing of any portion of the Project, including, without limitation:
(1) payment during the construction period of the premiums for all title and other insurance, bonds, or undertakings required to be obtained and maintained with respect to any part of the Project, to the extent such amounts are not paid by any contractor who constructs or installs any portion of the Project;
(2) payment of the taxes, assessments and other fees or charges, if any, that may become payable during the construction period with respect to any portion of the Project, or reimbursement thereof; and
(3) payment
of any expenses incurred in seeking to
enforce any remedy against any contractor or subcontractor in respect of any
default under a contract relating to the acquisition, construction or
installation of any portion of the Project.
(4) payment of any expenses incurred concerning asserted deficiencies
in the Project and related matters beginning on January 1, 1995 in
April 2002, and continuing through the drafting, negotiation, and
execution of any and all agreements necessary or desirable to implement the
design, construction, operation, and maintenance of the Expanded Project
Expansion
and any modifications thereof or thereto, to the extent that corresponding expenses
concerning the implementation of the Original Project were treated as
reimbursable.
(5) payment
of any expenses incurred to track
and record changes in the Water Entitlements following issuance of new Water
Use Permits or Water Permits,
to verify water use capacity pursuant to Subsection E of MPWMD Rule 23, to
otherwise monitor compliance with or
to enforce actual
water usage pursuant to such laws, ordinances, and regulations as are generally
applicable to persons actually using water from the Cal-Am water
distribution system, Water
Use Permits (as such Water Use Permits are more fully described in the
Supplemental Financing Agreement), to determine from time to time the amount if any remaining in the Water
Entitlement (as such Water
Entitlement is more fully described in the Supplemental Financing Agreement), and
to make such determinations concerning
adjustments, to Water Use Permits that may be
required in 2075.
EXHIBIT B
DESCRIPTION OF ORIGINAL PROJECT
The Original Project consists of the following components:
(1) The 9,000 square foot tertiary treatment plant located at the CAWD wastewater treatment plant immediately south of the Carmel River and west of California State Highway One, capable of producing 1.5 million gallons per day (MGD) of tertiary treated recycled water. The existing tertiary treatment facility diverts and treats secondary level effluent from the CAWD wastewater treatment plant for reuse as irrigation water using a treatment process consisting of: secondary effluent flow equalization; influent pumping; polymer and alum addition with rapid mixing for coagulation; low energy mixing for flocculation; filtration; chlorination; dechlorination; and pumping.
(2) The improvements within the existing CAWD wastewater treatment plant facilities to assure a consistent supply of secondary effluent from the existing CAWD plant diverted to the tertiary treatment plant. These improvements include a secondary clarifier flow split control and replacement of the existing mechanical aeration diffusers.
(3) The recycled water distribution system consisting of approximately 38,000 feet of distribution pipeline and a steel water storage tank (described in item (4) below) in Del Monte Forest beginning at the tertiary treatment plant and terminating at the southern portion of the Spanish Bay Golf Course and Resort in Del Monte Forest. The pipeline is located primarily within existing roads and road rights-of-way extending through the City of Carmel-by-the-Sea and unincorporated areas of Monterey County, including areas of Del Monte Forest. The distribution system also includes a connection adjacent to the storage tank (described in item (4) below) for furnishing an emergency potable water supply in the event of failure of the tertiary treatment plant or distribution pump station.
(4) The 2.5 million gallon recycled water storage tank located adjacent to the Poppy Hills Golf Course maintenance yard north of Viscaino Road in Del Monte Forest.
[“Base version” copied from Exhibit B to Construction & Management Agreement]
[EXHIBIT C]
DESCRIPTION OF EXPANDED PROJECT
The Expanded Project consists of the following components:
[to
be furnished by PBC, CAWD, or PBCSD]
EXHIBIT D
[this will need to be updated to reflect current numbers
for actual usage and the total used to calculate
the Minimum Purchase]
Average
Average Annual Percentage
Water Usage Share Minimum Purchase
Usage
Monterey Peninsula Country 88.1 132.631%
80 109acre
Club Dunes Course feet
Monterey Peninsula Country 103.8 132.631%
80 109acre
Club Shore Course feet
Spyglass Hill Golf Course 129.4 135.638%
100 109acre
feet
Pebble Beach Golf Course 149.6 138.4563%
120 109acre
feet
Spanish Bay Golf Course 134.61 [1]
132.631%
80 109acre
Poppy Hills Golf Course 116.92 [2] 132.631%
80 109acre
feet
Course feet
Fairway feet
Collins Field/Polo 5.83 [3] .77% 56.16
acre
Robert Louis Stevenson 12.1 1.54% 10 12.32
acre
TOTALS 856 acre feet 100% {80650}
acre
feet feet
EXHIBIT E
RIGHT OF FIRST OFFER
This Right of First Offer is attached to and Incorporated in that certain Agreement for Sale of Recycled Water (the “Agreement”) as an Exhibit. All capitalized terms used in this Right of First Offer shall have the same meaning as in the Agreement.
1. Buyer’s Notice Regarding Surplus Recycled Water. At the time Buyer submits its quarterly estimates as required by section 2.8(c) of the Agreement, Buyer shall notify MPWMD whether Buyer desires to purchase Surplus Recycled Water, if available, to irrigate any Other Property owned by Buyer commencing anytime within the next six (6) months. Buyer’s notice shall include the quantity of Surplus Recycled Water Buyer desires to purchase per year, the date on which Buyer desires to commence use of such Surplus Recycled Water, the Other Property on which Buyer proposes to use such Surplus Recycled Water, the proposed duration of such use (the duration shall be for a minimum period of six (6) months and a maximum period co-extensive with the term of the Agreement), and any other information reasonably requested by MPWMD.
2. Surplus Recycled Water Agreement. If Buyer notifies MPWMD of its desire to purchase Surplus Recycled Water as provided in paragraph 1 above, then MPWMD shall be obligated to sell, and Buyer shall be obligated to purchase, Surplus Recycled Water with respect to that notice pursuant to a written agreement (the “SRW Agreement”) on the following terms and conditions:
a. The quantity of Surplus Recycled Water to be sold shall be the quantity specified in Buyer’s notice, subject to the primary and superior rights of all Owners to receive Recycled Water for their respective Recycled Water Irrigation Areas as provided in section 2.8 of the Agreement, and further subject to the rights of any other Owner who has exercised its right of first offer with respect to an earlier or the same six (6) month period and has entered into a SRW Agreement with MPWMD, as provided below. If Buyer and any other Owners give MPWMD notice as provided in paragraph 1 above with respect to the same six (6) month period, then Buyer’s and each such other Owner’s SRW Agreement shall provide that, to the extent the Surplus Recycled Water available at any given time is insufficient to meet the aggregate requirements of Buyer and such other Owner(s) under their respective SRW Agreements, the aggregate amount of Surplus Recycled Water available shall be allocated as follows: each such Owner, including Buyer, shall be entitled to the percentage of the Surplus Recycled Water available that is derived by dividing the quantity of Surplus Recycled Water specified in each such Owner’s SRW Agreement by the aggregate quantity of Surplus Recycled Water specified in all such Owner’s SRW Agreements. No Owner who gives notice of its desire to purchase Surplus Recycled Water with respect to a later six (6) month period shall be entitled to receive Surplus Recycled Water under its SRW Agreement relating to that period until the requirements of all SRW Agreements relating to earlier six (6) month periods are fully satisfied. Except for the SRW Agreement or SRW Agreements relating to the first six (6) month period for which a notice or notices have been given, all subsequent SRW Agreements shall contain a provision acknowledging the prior rights to Surplus Recycled Water granted by all prior SRW Agreements.
By way of illustration of the priority to Surplus Recycled Water intended by this Right of First Offer:
Assume:
1. On December 30, 2004, Owner A notifies MPWMD of its desire to begin purchasing ten (10) acre feet of Surplus Recycled Water per year during the next six (6) month period (from January 1 to June 30, 2005), with such purchase to commence on March 1, 2005, and a term coextensive with the term of the Agreement.
2. On January 1, 2005, Buyer notifies MPWMD of its desire to begin purchasing thirty (30) acre feet of Surplus Recycled Water per year during the next six (6) month period (from January 1 to June 30, 2005), with such purchase to commence on April 1, 2005, and a term coextensive with the term of the Agreement.
3. Owner A and Buyer enter SRW Agreements with MPWMD on February 1, 2005, and March 1, 2005, respectively, for the quantity of Surplus Recycled Water specified in their respective notices.
4. On October 1, 2005, Owner B notifies MPWMD of its desire to begin purchasing ten (10) acre feet of Surplus Recycled Water per year during the next six (6) month period (from October 1, 2005, to March 31, 2006), with such purchase to commence on January 1, 2006, and a term co-extensive with the term of the Agreement. Owner B and MPWMD enter into a SRW Agreement on December I, 2005. 5. During the period from June to August 2006, Owner A, Buyer, and Owner B require 10,000, 30,000 and 10,000 gallons of Surplus Recycled Water per day each, respectively, but the aggregate amount of Surplus Recycled Water available during this three (3) month period is only 20,000 gallons per day. Based on these assumptions, the Surplus Recycled Water available during this three (3) month period would be allocated under the parties’ respective SRW Agreements as follows:
(1) 5,000 gallons per day to Owner A.
(2) 15,000 gallons per day to Buyer.
(3) 0 gallons per day to Owner B.
This allocation is based upon dividing the quantity of Surplus Recycled Water specified in each of Owner A’s and Buyer’s respective notices by the aggregate quantity of Surplus Recycled Water specified in the two notices.
For Owner A:
10,000 + 40,000 = 25%
25% x 20,000 gallons per day (“gpd”) = 5,000 gpd
For Buyer:
30,000 + 40,000 = 75% ,,”
75% x 20,000 gpd = 15,000 gpd
Owner B is entitled to no Surplus Recycled Water during this period because Owner B gave its notice with respect to a later six (6) month period than either Owner A or Buyer, and therefore has no entitlement to receive Surplus Recycled Water until the requirements of Owner A and Buyer are satisfied.
b. Buyer and any other Owner may execute more than one SRW Agreement with MPWMD, and the priority of the rights to Surplus Recycled Water granted by each such SRW Agreement shall be determined as provided in paragraph 2.a. above.
c. The term of any SRW Agreement shall be as specified in Buyer’s notice and shall be for a minimum duration of six (6) months and a maximum duration co-extensive with the term of the Agreement, provided, however, that Buyer shall have the right to terminate any SRW Agreement on six (6) months notice to MPWMD.
d. The Other Property to be irrigated with the Surplus Recycled Water shall be described in any SRW Agreement in a manner comparable to the description of the Recycled Water Irrigation Areas in the Agreement. Buyer shall have the right at any time and from time to time to change the Other Property subject to the terms any of its SRW Agreements by giving notice to MPWMD of such change, including the new description of the Other Property subject to the particular SRW Agreements affected, provided, however, that Buyer cannot increase the quantity of Surplus Recycled Water specified by any particular SRW Agreement.
e. If in any complete water year Buyer purchases an aggregate quantity of Surplus Recycled Water that is less than the aggregate quantity specified in all of its SRW Agreements, for any reason other than the unavailability of sufficient Surplus Recycled Water during that year, then the quantity of Surplus Recycled Water specified in Buyer’s last SRW Agreement and, if necessary, its second to last SRW Agreement, and so on proceeding in order from last to first, shall be reduced permanently so that the aggregate quantity of Surplus Recycled Water specified in all of its SRW Agreements executed up to that water year is equal to the aggregate quantity of surplus Recycled Water purchased in that water year. Additionally, Buyer shall have the right to reduce the quantity of Surplus Recycled Water specified in any of its SRW Agreements at any time and from time to time by giving thirty (30) days notice to MPWMD. If the quantity of Surplus Recycled Water specified in any of Buyer’s SRW Agreements is reduced in either of the above ways, the percentages calculated for, each Owner, including Buyer, with respect to each of its SRW Agreements pursuant to paragraph 2.a. above shall be adjusted to reflect this reduction.
f. Charges to Buyer for Surplus Recycled Water shall be calculated in the same manner as charges to Buyer for Recycled Water under the Agreement.
g. All other terms and conditions of the SRW Agreement shall be the same, to the extent practicable, as the terms and conditions of the Agreement.
[EXHIBIT F]
DEL MONTE FOREST
[PBC will need to provide the current legal
description of the Del Monte
Forest].
[PLACEHOLDER EXHIBIT
G]
[to be
negotiated between and
furnished by CAWD/PBCSD & Recycled Water users]
U:\staff\word\boardpacket\2003\2003boardpacket\20031020\PublicHearings\2\item2_exh2d_2.doc