HomeMy WebLinkAboutStaff Report 4.A 02/27/2006CITY OF PETALUMA, CALIFORNIA 4.A
AGENDA BILL February 27, 2006
Agenda Title: Discussion and Possible Direction Regarding Meetine Date: February27, 2005
Restructured Agreement for Water Supply and Proposed Language
for the Potter Valley Project Meetine Time: M 3:00 PM
❑ 7:00 PM
Cateeory (check one): ❑ Consent Calendar ❑ Public Hearing ❑ New Business
❑X Unfinished Business ❑ Presentation
Department: Director: Contact Person: Phone Number:
Water Resources & Michael Ban, P.E. Michael Ban, P.E. 778-4487
Conservation V1 n/t
Cost of Proposal N/A
Amount Budgeted: N/A
Account Number: N/A
Name of Fund: N/A
Attachments to Agenda Packet Item:
Agenda Report
Attachment A — Restructured Agreement For Water Supply
Attachment B — Proposed Changes to Section 2.4 Potter Valley Project
Summary Statement: The Petaluma City Council considered the Restructured Agreement For Water
Supply on November 21, 2005. In January 2006, proposed changes to Section 2.4 — Potter Valley Project
were made to address concerns raised by the Water Contractors. The proposed changes were presented to
the WAC on February 6"' and are now being considered by the boards and councils of the Water
Contractors. The most significant change requires the affirmative vote of at least six (6) of the Water
Contractors before the SCWA can acquire the Potter Valley Project.
Recommended Citv Council Action/Suggested Motion: City Management recommends the City
Council consider and discuss the Restructured Agreement and the proposed changes to Section 2.4 and
provide direction for reporting at the March 6th WAC meeting.
Reviewed by Admin. Svcs. Dir: P
D
'Todav's Date: \
February 14, 2006
Reviewed by City Attornev:
Date:
Revision # and Date Revised:
#
1
Appr?7"
itv Manager
Date:
File Code: S:\water resources &
conservation\Water\6110 Source of Supply\10
Master Agreement\city council\2006\february
27\agenda report.pvp.doc
CITY OF PETALUMA, CALIFORNIA
FEBRUARY 27, 2006
FETITINIMITRIT91re:
FOR
DISCUSSION AND POSSIBLE DIRECTION REGARDING RESTRUCTURED
AGREEMENT FOR WATER SUPPLY AND PROPOSED LANGUAGE FOR THE POTTER
VALLEY PROJECT
EXECUTIVE SUMMARY:
The Petaluma City Council considered the Restructured Agreement For Water Supply on
November 21, 2005. In January 2006, proposed changes to Section 2.4 — Potter Valley Project
were made to address concerns raised by the Water Contractors. The proposed changes were
presented to the WAC on February 6th and are now being considered by the boards and councils
of the Water Contractors. The most significant change requires the affirmative vote of at least
six (6) of the Water Contractors before the SCWA can acquire the Potter Valley Project.
City Management recommends the City Council consider and discuss the Restructured
Agreement and the proposed changes to Section 2.4 and provide direction for reporting at the
March 6th WAC meeting.
BACKGROUND:
INTRODUCTION
The Sonoma County Water Agency (Agency) provides potable water service to the cities of
Petaluma, Rolmert Park, Santa Rosa, Cotati, Sonoma, and the Forestville Water District, the
Marin Municipal Water District, the North Marin Water District and the Valley of the Moon
Water District under the Eleventh Amended Agreement For Water Supply. The Agency also
serves the cities of Healdsburg and Windsor, the Russian River County Water District, Camp
Meeker Recreation and Park District, and the Occidental Community Services District.
Water stored in Lake Sonoma and released to the Russian River via Dry Creek is the primary
source of water. This source is supplemented by water released from Lake Mendocino. The
Agency diverts water from the Russian River under a permit from the State Water Resources
Control Board (Board), which limits the Agency's Russian River diversions to 75,000 acre-feet
per year. The Agency currently estimates it will reach this limit by or before 20171. In order tc
meet the future demands of its water customers, the Agency must increase its permit limit to
101,000 acre-feet/year.
Water Supply Workshop Staff Report, Sonoma County Water Agency, Page 34 (November 1, 2004)
The Board has consistently demanded the Agency demonstrate its commitment to the efficient
use of Russian River water. This need is one of the reasons the Agency and the water
contractors began negotiating the Restructured Agreement.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
The Water Contractors and the Agency determined to negotiate a new water supply agreement
starting in September 2001. After a number of public workshops and 4 '/ years of effort, the
work product of the WAC and the Agency is the Restructured Agreement for Water Supply
(Restructured Agreement). The Restructured Agreement is designed to replace the 1 lth
Amended Agreement. A copy of the Agreement is provided in Attachment A.
The Petaluma City Council considered the Restructured Agreement on November 21, 2005. The
following are highlights from the Agreement.
Purpose: Its purpose is set forth in Sec. 1.1:
Among the punposes of this Agreement are to provide a water supply or a supplemental
water supply for each of the Water Contractors, to encourage water conservation and
recycled water use that reduces potable water use, to provide environmental
improvements and enhancements to allow for sustainable and continued use of Russian
River Project water, to encourage the development of local supply projects to offset
potable water use, and to provide for payment to the Agency for water delivered
hereunder sufficient to enable it to pay the capital costs of major replacements and
additions to the Transmission System and to meet its Revenue Bond obligations and its
expenses of operating and maintaining the Transmission System.
Facilities: The Restructured Agreement does not authorize the construction of any new
transmission system facilities. The transmission system facilities authorized in the I Ith Amended
Agreement remain unchanged in the Restructured Agreement. The option to acquire the Potter
Valley Project or make payments to the owner of the Potter Valley Project to insure its continued
operation - all subject to the approval of the WAC (Sec. 2.4 and Sec. 1.2(s)) also remain
unchanged.
Entitlements (See. 3.1): The Restructured Agreement retains the "entitlements" contained in
the l lth Amended Aezeement. However, the Agency cannot deliver these "entitlements" until it
has increased its water permit limits to 101,000 acre-feet per year, and completed its Water
Supply, Transmission, and Reliability Project. This condition has caused the Agency's Board of
Directors to declare that the capacity of the transmission system is temporarily impaired. To
address this condition, the Agency and the water contractors are executing the Temporary
Impairment Memorandum of Understanding (MOU) to allocate the 92 mgd of capacity in the
transmission system. Petaluma approved the MOU on September 19"'.
Forestville Water District: The Forestville Water District (FWD) is shifted into the "Other
Agency Customer" category and its consent is no longer required for subsequent amendments to
the Restructured Agreement that do not impair the Agency's delivery obligations to FWD (Sec.
1.6(c)). As part of this transition, the Forestville Aqueduct (including maintenance and
replacement obligations) is transferred to FWD, and a payment to FWD, estimated at $690,000,
is provided to FWD for the construction of a new pipeline.
New Contractor — Town of Windsor: In FWD's place, coming from the "Other Agency
Customer" category and joining the Water Contractor category, is the Town of Windsor (Sec.
3.1(a)). Windsor pays higher aqueduct service charges for fifteen (15) years as a "buy in" to the
aqueduct system (Sec. 4.17). Windsor's direct diversions from the Russian River (currently
covered by an existing separate agreement with the Agency) are now recognized in the
Restructured Agreement (Sec. 3.1(a)) and existing agreements between the Agency and Windsor
are terminated or modified to conform to the Restructured Agreement (Sec. 1.4).
Other Provisions: Other provisions included in the Restructured Agreement are:
(1) Water Conservation Requirements (Sections 1.12 and 4.16). The requirement that
Water Contractors become members of the California Urban Water Conservation Council is
transferred from the Temporary Impairment MOU to the Restructured Agreement. The
Restructured Agreement also requires Other Agency Customers to become CUWCC
members, though it is unclear how this will be enforced since they are not signatory to the
Agreement. The Agency pledges to use its best efforts to get the Other Agency Customers
to become members of the CUWCC and implement the water conservation requirements set
forth in Section 1.12(a). A separate O&M sub -charge called the Water Conservation Sub -
Charge and Water Conservation Fund are created for conservation projects (Sec. 4.16).
(2) Funding For Recycled Water and Local Supply Projects. Recycled Water Projects are
defined as projects that reduce use of potable water from the transmission system, reduce
water diverted from the Russian River or its tributaries, or assist the Agency comply with
environmental laws (Sec. 1.2(z) and 2.6)). Local Supply Projects are defined as water
supply projects that reduce demand on the Transmission System during June, July, August
and September (Sec. 1.2(0)). Local supply in the amount of 40% of peak month demand is
set as a goal (Sec. 1.15). A new separate Recycled Water and Local Supply Sub -Charge
and Recycled Water Fund are created (Sec. 4.15). The charge is limited to $35/AF for the
first 5 years. Recycled water or local supply projects to be constructed or funded under the
agreement must be approved by the WAC.
(3) Watershed Planning and Restoration (Sections 2.8 and 4.14). The Agency is authorized
to develop or implement watershed maintenance and restoration activities, subject to the
approval of the WAC (Sec. 2.8). A new Watershed Planning and Restoration Sub -Charge
and Watershed Planning and Restoration Fund are created (Sec. 4.14) to fund activities
carried out tinder Section 2.8. The charge is limited to $35/AF for the first 5 years.
(4) Water Management Planning (Sections 2.7 and 4.13). The Agency is required to prepare
a draft regional Urban Water Management Plan (required every 5 years) based on
information provided by the water contractors (Sec. 2.7). Alternatively the contractors can
prepare their own UWMP. A new Water Management Planning Sub -Charge and Water
4
Management Planning Fund are created (Sec. 4.13). The aggregate amount of money
collected by the Agency shall be sufficient to carry out the requirements of Section 2.7.
(5) Shortage of Water and Apportionment (Section 3.5). This section describes the process
for allocating water should a deficiency in the water system occur. This section is changed
to provide a mechanism for dealing with demand hardening that occurs as a result of
implementing long-term water conservation measures (Sec. 3.5(c)). The Agency is required
at all times to have an adopted water shortage allocation methodology (Sec. 3.5(d)). In the
event an Agency Customer takes water in excess of its allotment, a liquidated damage fee
equal to 150% of the O&M Charge is assessed (Sec. 3.5(e)). Water Contractors, via
unanimous vote, can decide among themselves how water available to Water Contractors as
a group will be allotted (Sec. 3.5(f). The Agency has not adopted a water shortage
allocation methodology. The proposed water shortage allocation methodology is provided
in Attachment B. The City anticipates meeting with the Agency and the water contractors
to further discuss the methodology in December.
(6) Water Advisory Committee (Part 5). A new committee is added — the Technical
Advisory Committee. The Water Advisory Committee becomes a committee of elected
officials (one member and one alternate) who meet on a quarterly basis. The Technical
Advisory Committee (TAC) is comprised of one non -elected representative selected by
each Water Contractor and meets on a montl-Ay basis. A chairperson and vice chairperson
are created, each to serve a two year term. The WAC can create standing and ad hoc
committees that it deems necessary. One standing committee — the Water Conservation
Sub -Committee is created and reports to the TAC. Voting remains the same except that
FWD's "seat" is now taken over by the Town of Windsor.
(7) Powers of the WAC Are Expanded (Part 5):
(a) By November of each year, WAC shall review, approve and report to Agency, which
proposed new Water Conservation, Recycled and Local Supply Projects are to receive
funding (Sec. 5.3(e)).
(b) The WAC approves watershed restoration projects or studies and ground water
investigations which may be undertaken by the Agency, provided the Agency agrees (Sec.
2-8(a), (b) & (c)).
(c) Regarding transfer of portion of "annual cap" from one WAC member to another, the
WAC must approve such transfers (Refer to Item 10 below and Sec. 3.3(b)(2)).
(d) By affirmative vote of WAC, Agency may physically restrict deliveries to an aqueduct
customer who is taking water in excess of its allotment during a water shortage emergency
(Sec. 3.5(e)). (Note: The Agency can also, on its own initiative, so restrict such deliveries.)
(e) Subject to a unanimous vote, the WAC can preempt the Agency's determination of how
much water is allotted to each Water Contractor during a shortage and decide for itself what
the allotments should be provided the total amount so allocated does not exceed the
allocation determined by the Agency for the WAC as a group (Sec. 3.5(f)).
(8) Other Agency Customers. Other Agency Customers are identified and new service from
the Agency to new customers allowed in this category is limited (Sec. 1.2(u) and 3.2(b)).
(9) Use of Surplus Water For Commercial Irrigation (Section 3.4). This section allows
surplus water for commercial irrigation only if the water is required by any agreement in
existence on the effective date of the Agreement. No such new service is allowed. Transfer
of Surplus Water customers to a qualifying Water Contractor(s) is encouraged and provided
for. This is voluntary on the part of the Water Contractor.
(10) Transfer of a Portion of the Annual Cap (Section 3.3(b)). Under very specific
circumstances and conditions including approval of the WAC and compliance with CEQA,
transfer of a portion of the annual entitlement "AF" limit from one Water Contractor to
another may be allowed.
(11) Record Keeping (Section 1.8). Requires Agency to keep complete and accurate entries
regarding receipt and application of monies. Requires Agency to provide two financial
reports to the Water Contractors each year.
(12) Contract Term (Section 1.3). The term is extended from June 30, 2036 to June 30, 2040.
"Part 4 — Charges and Payments" appears to have a lot of changes but these are misleading.
Separate Aqueduct capital recovery sections based on old bonded debt are now consolidated into
one section as the old debt has been paid off. The only material changes in Part 4 are addition of
charges for the Town of Windsor and the four new O&M Sub -Charges discussed above for:
Water Management and Planning, Watershed Planning and Restoration, Recycled Water and
Local Supply Projects, and Water Conservation.
POTTER VALLEY PROJECT
The Potter Valley Project includes Lake Pillsbury, a storage reservoir on the Eel River which is
impounded by Scott Dam; Van Arsdale Reservoir, which is impounded by Cape Horn Dam; the
tunnel and penstock system to the Potter Valley Power Plant; the power plant located at the north
end of Potter Valley; and the tailrace canal which constitutes the headwater of the East Fork
Russian River. Water is released from Lake Pillsbury to the Eel River, and then re -diverted 12
miles downstream at Cape Hom Dam to the Potter Valley Power Plant. The flows from the Eel
River are diverted to Potter Valley on the East Fork Russian River through a tunnel that passes
under the ridge separating the Eel River and Russian River basins. Since 1908, the 450 -foot drop
in elevation between the Eel River and the East Fork Russian has been used to generate electrical
energy at PG&E's Potter Valley Power Plant, which has a peak capacity of 9. 2 MW.
Recent diversions from the Eel River through Potter Valley have averaged about 136,000 acre-
feet per year. Most of the diversions are used in Mendocino County. Of the remaining
diversions that reach Sonoma County, most are used for agricultural purposes. It is estimated
that about 9,000 acre-feet per year are used for water supply by the water contractors. This
indicates that the Potter Valley Project is not a significant source of supply for Water Agency
Contractors during normal years. However, the Agency's analysis indicates that if diversions
from the Potter Valley Project were not available during serious drought years, curtailments in
water use would be very significant and likely unacceptable.
Recognizing the possible need to acquire the Potter Valley Project, in June 1995 the Water
Contractors and the Agency executed the Ninth Amended Agreement For Water Supply, which
added language in Section 2.4 permitting the Agency, with prior Water Advisory Committee
approval, to acquire the Potter Valley Project. Prior to the Ninth Amended Agreement, the
Agency could have acquired the PVP without the WAC's approval. Section 2.4 gave the WAC
the leverage it needed to influence the PVP outcome.
Proposed Changes to Section 2.4 Potter Valley Project
In response to concerns raised by the WAC, changes have been proposed for Section 2.4. These
changes were discussed at the WAC meeting on February 7, 2006, and are provided in
Attachment B. The changes are summarized in Table 1.
Table 1
Comparison of Proposed Changes to Section 2.4
Item
SCWA acquisition of Potter
Valley Project
SCWA evaluation of Potter
Valley Project
SCWA preparation of CEQA
documentation before acquiring
Potter Valley Project
Restructured Agreement dated Proposed Changes Dated 1-29-
6-25-05 06
Requires: 1) the affirmative vote
of more than fifty percent (50%)
of the total weighted votes, and
2) the affirmative vote of at least
five (5) representatives (a simple
majority)
Not addressed.
Not addressed.
Requires: 1) the affirmative vote
of at least 2/3 of the total
weighted votes and, 2) the
affirmative vote of at least six (6)
representatives of WAC
Requires SCWA to undertake
evaluation upon effective date of
Agreement.
Specifically requires SCWA to
conduct environmental analysis
per CEQA prior to acquiring
Potter Valley Project.
The costs to conduct the evaluation will be paid from the Watershed Planning and Restoration
Sub -Charge funds. Estimated costs for this work have not been provided.
The WAC will consider the proposed changes to Section 2.4 at the March 6`h WAC meeting.
3. ALTERNATIVES:
City Management recommends the City Council consider and discuss the Restructured
Agreement and the proposed changes to Section 2.4 as follows, and provide direction regarding
the proposed changes to Section 2.4 for reporting to the WAC at the March 6`h WAC meeting.
4. FINANCIAL IMPACTS:
Not applicable.
CONCLUSION:
The proposed changes for Section 2.4 address the concerns expressed by members of the WAC
by requiring the approval of 6 out of 8 WAC members before the SCWA can acquire the Potter
Valley Project.
6. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS OR
COMPLETION:
Continued discussion and review of the Restructured Agreement.
RECOMMENDATION:
City Management recommends the City Council consider and discuss the Restructured
Agreement and the proposed changes to Section 2.4 and provide direction to the Council's WAC
representative for reporting at the March 6ch WAC meeting.
Attachment A — Restructured Agreement For
Water Supply
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
by and between
SONOMA COUNTY WATER AGENCY
CITY OF COTATI
CITY OF PETALUMA
CITY OF ROHNERT PARK
CITY OF SANTA ROSA
CITY OF SONOMA
FORESTVILLE WATER DISTRICT
NORTH MARIN WATER DISTRICT
VALLEY OF THE MOON WATER DISTRICT
TOWN OF WINDSOR
10
TABLE OF CONTENTS
PART 1 - GENERAL.......................................................... 1
1.1 Recital of Purposes..................................................1
1.2 Definitions.........................................................1
1.3 Term of Agreement.................................................9
1.4 Previous Agreements Terminated or Modified ......................... 9
1.5 Enforcement......................................................10
1.6 Amendments.....................................................11
1.7 Pledge of Revenues................................................11
1.8 Books, Records and Accounts.......................................12
1.9 Water Contractors' Duty to Provide Funds ............................ 13
1.10 Severability......................................................13
1.11 Third Party Beneficiaries ........................................... 13
1.12 Water Conservation Requirements .................................. 13
1.13 Recycled Water and Local Supply Project Requirements ............... 14
1.14 Transitional Provisions Applicable to Forestville ......................15
1.15 Local Production Capacity Goal.....................................15
PART 2 - PLANNING, FINANCING, ACQUISITION, CONSTRUCTION, OPERATION
AND MAINTENANCE ................................................
16
2.1
Financing Additions to the Existing Transmission System ...............16
2.2
Scheduling of Additions and Replacements to the Existing Transmission
System
...............................................................16
2.3
Further Modifications to Transmission System ........................
17
2.4
Potter Valley Project...............................................18
2.5
Water Conservation Projects........................................18
2.6
Recycled Water and Local Supply Projects ............................
18
2.7
Water Management Planning .......................................
19
2.8
Watershed Planning and Restoration.................................19
2.9
Planning Coordination.............................................20
2.10 Operation and Maintenance........................................20
PART 3 - WATER SUPPLY ................................................... 21
3.1 Delivery Entitlements of Water Contractors ........................... 21
3.2 Conditions on Other Agency Customer Deliveries ..................... 23
3.3 Deliveries in Excess of Entitlement Limits ............................. 24
3.4 Surplus Water.....................................................26
3.5 Shortage of Water and Apportionment ............................... 27
3.6 Fire Fighting Service...............................................32
11
3.7 Quality of Water...................................................33
36
3.8 Points of Delivery..................................................33
3.9 Risk of Loss and Responsibility ......................................
33
3.10 Place of Use of Water Delivered to North Marin ......................
33
3.11 Measurement.....................................................34
3.12 Marin Municipal Water Deliveries ...................................
34
3.13 Damages for Peaking on the Transmission System or Taking Water in
Excess
of Average Daily Rate of Flow Entitlement Limits in Violation of Section
3.3.............................................................35
4.6 Aqueduct Facilities Capital Charges ..................................
PART 4 - CHARGES AND PAYMENTS ........................................
36
4.1 Separate Charges and Funds........................................36
4.2 Operation and Maintenance Charge ..................................
37
4.3 Allocation of Capital Costs to North Marin ............................
38
4.4 Remaining Facility, Additional Facility and Replacement Facility Capital
Cost Payments by North Marin ...................................
39
4.5 Payment of Remaining Facilities, Additional Facilities, Replacement
Facilities, and Potter Valley Project Capital Costs ....................
40
4.6 Aqueduct Facilities Capital Charges ..................................
41
4.7 Storage Facilities Capital Charge .....................................
45
4.8 Common Facilities Capital Charge ....................................
46
4.9 North Marin Capital Charge .........................................
46
4.10 Power; Revenues ..................................................47
4.11 Payment for Surplus Water and Water Sold To Marin Municipal ........
48
4.12 Minimum Payments by Other Agency Customers .....................
49
4.13 Operations and Maintenance Charge — Water Management Planning ....
49
4.14 Operations and Maintenance Charge — Watershed Planning and Restoration
...............................................................49
4.15 Operations and Maintenance Charge — Recycled Water and Local Supply
...............................................................51
4.16 Operations and Maintenance Charge — Water Conservation ............. 51
4.17 Payments by Town of Windsor ..................................... 52
4.18 Payment of Russian River Conservation Charge and Russian River Projects
Charge by North Marin .......................................... 52
4.19 Billing and Time of Payment........................................54
PART 5 - Water Advisory Committee/Technical Advisory Committee .............. 55
5.1 Purpose...........................................................55
5.2 Powers...........................................................55
5.3 Composition and Voting ............................................ 55
12
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
THIS AGREEMENT is made on by and between the following
public entities:
SONOMA COUNTY WATER AGENCY, herein called "Agency",
CITY OF COTATI, herein called "Cotati",
CITY OF PETALUMA, herein called "Petaluma",
CITY OF ROHNERT PARK, herein called "Rohnert Park",
CITY OF SANTA ROSA, herein called "Santa Rosa",
CITY OF SONOMA, herein called "Sonoma",
FORESTVILLE WATER DISTRICT, herein called "Forestville",
NORTH MARIN WATER DISTRICT, herein called "North Marin",
VALLEY OF THE MOON WATER DISTRICT, herein called "Valley of the
Moon", and
TOWN OF WINDSOR, herein called "Windsor",
The parties hereto hereby mutually covenant and agree as follows:
PART1-GENERAL
1.1 Recital of Purposes
Among the purposes of this Agreement are to provide a water supply or a
supplemental water supply for each of the Water Contractors, to encourage water
conservation and recycled water use that reduces potable water use, to provide
environmental improvements and enhancements to allow for sustainable and continued
use of Russian River Project water, to encourage the development of local supply
projects to offset potable water use, and to provide for payment to the Agency for water
delivered hereunder sufficient to enable it to pay the capital costs of major replacements
and additions to the Transmission System and to meet its Revenue Bond Obligations
and its expenses of operating and maintaining the Transmission System.
1.2 Definitions
When used herein, unless otherwise distinctly expressed or manifestly
incompatible with the intent of this Agreement, the terms:
13
(a) "Acre feet" and "AF" mean one acre-foot or 325,850 gallons of water.
(b) "Additional Facilities" means the additional facilities that must be constructed or
acquired after the completion of the Russian River-Cotati Intertie in order for the
Agency to be able to make the deliveries authorized by Sections 3.1 and 3.2, including,
but not limited to: an aqueduct generally paralleling the Intertie Aqueduct; an aqueduct
generally paralleling the south part of the Petaluma Aqueduct from the Intertie
Aqueduct to Kastania Reservoir; an aqueduct generally paralleling the Sonoma
Aqueduct; an aqueduct connecting the Kawana Springs and Ralphine reservoirs; the
transmission line pumping plants necessary to regulate flows to Storage Facilities; 55.5
million gallons of reservoir storage; 56.9 mgd of Russian River water production
capacity; water -treatment facilities; and Emergency Wells.
(c) "Aqueduct Facilities" means the pipelines of the Intertie, Petaluma, Santa Rosa and
Sonoma Aqueducts, an additional pipeline to be constructed generally paralleling the
Intertie Aqueduct, a pipeline to be constructed generally paralleling the south part of
the Petaluma Aqueduct from the Intertie Aqueduct to Kastania Reservoir, and a
pipeline to be constructed or acquired generally paralleling the Sonoma Aqueduct.
(d) "Capital Cost" means the total funds expended for capital improvements, major
replacements, or portions thereof, as context requires, including, but not limited to,
planning, engineering, environmental impact analysis, right of way, financial and legal
fees, interest during construction, and materials, construction, and replacement costs.
(e) "Common Facilities" means all Transmission System facilities except Storage
Facilities and Aqueduct Facilities, but including additional facility aqueduct capacity
constructed specifically to make the deliveries that have been authorized by Section
3.12, and including the Potter Valley Project or portion thereof if acquired pursuant to
Section 2.4.
(f) "Corporate Territory" means the boundary from time to time existent of a city,
agency, district or other governmental entity with powers to accept and distribute
water.
(g) "Customer" means any of the following customers of the Agency:
(1) "Water Contractor" means a party signatory to this Agreement except the
Agency and Forestville.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
14
(2) "Other Agency Customer" means the Agency, the County of Sonoma,
California -American Water Company (with respect to the Larkfield Water District),
Forestville Water District, Lawndale Mutual Water Company, Kenwood Village Water
Company, Penngrove Water Company, the City of Sebastopol, the State of California,
and Santa Rosa Junior College.
(3) "Marin Municipal" means the Marin Municipal Water District.
(4) 'Russian River Customer" means any Agency customer within Sonoma
County who has or in the future will have contracts with the Agency to divert or
redivert water directly from the Russian River or Dry Creek without the use of the
Transmission System.
(5) 'Regular Customer" means the any of the Water Contractors or the Other
Agency Customers.
(h) "Emergency Wells" means auxiliary groundwater production wells that may be
utilized to provide additional delivery capacity when necessary due to drought,
equipment failure, or other transmission capacity impairment, inability to divert
Russian River Project water (for water quality reasons or otherwise), or any other
reason beyond the control of the Agency.
(i) "Entitlement" means the quantity of water a Regular Customer shall from time to
time require at such rates of flow as are necessary to meet its peak day's demand,
subject to the delivery limitations set forth in Sections 2.2, 3.1, 3.2, and 3.5.
(j) "Entitlement Limits' means the maximum amounts of water the Agency is obligated
to deliver to any Regular Customer from the Transmission System, as specified in
Sections 3.1(a), 3.2(a), 3.2(c), and 3.2(d).
(k) "Fiscal Year" (abbreviated FY) means the period from July 1 through the following
June 30.
(1) "Forestville Aqueduct" means the existing pipeline from the Santa Rosa Aqueduct to
Forestville, the existing booster pumping plant, the existing 300,000 -gallon reservoir,
and all other facilities financed with the proceeds of the sale of Series E of the Agency's
1955 Bonds.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
15
(m) "Intertie Aqueduct" means the existing 48 -inch inside diameter pipeline extending
from the Mirabel Park intake facilities on the Russian River to the Petaluma Aqueduct
in the vicinity of Cotati with appurtenances thereto including turnouts to serve
Forestville, Santa Rosa, Cotati and Rohnert Park. The Intertie Aqueduct consists of
three reaches: "Reach 1" from the Mirabel intake facilities to Forestville, "Reach 2" from
Forestville to the extension of Hall Road and "Reach 3" from the extension of Hall Road
to the junction with the Petaluma Aqueduct at Cotati. Reach 3 is further divided into
"Reach 3a" from the extension of Hall Road to Occidental Road, "Reach 3b" from
Occidental Road to the Cotati reservoirs and "Reach 3c" from the Cotati reservoirs to the
Petaluma Aqueduct.
(n) "Kawana Pipeline" means the pipeline connecting the Reach 3a of the Intertie
Aqueduct with Kawana Springs Reservoirs.
(o) "Local Supply Project" means a water supply project undertaken by one or more
Water Contractors, which reduces demand on the Transmission System during the
months of June, July, August, or September.
(p) "Marin Municipal" means the Marin Municipal Water District.
(q) "mgd" means a million gallons of water per day.
(r) "Oakmont Pipeline" means that certain pipeline and appurtenances generally
parallelling the Sonoma Aqueduct that were constructed by the Agency pursuant
to an agreement between the City of Santa Rosa and Agency dated April 29,
1986.
(s) "Operation and Maintenance Costs" means the Agency's costs of operating the
Transmission System including its power costs, costs of maintaining the Transmission
System in a good state of repair, payments made to the owner of the Potter Valley
Project to insure the continued operation of the Potter Valley Project provided they are
annually approved by the Water Advisory Committee, regardless of whether or not
such payments result in the ultimate transfer of title to all or part of the Potter Valley
Project to the Agency, and costs of administering the Transmission System and
furnishing the water supplies pursuant to this Agreement; provided, however, that
costs relating to the use of Transmission System facilities for public recreation purposes,
except (1) costs to permit limited passive public recreation on Transmission System
lands not in conflict with operational or water quality requirements, or (2) necessary
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 4
16
costs associated with land ownership, shall not constitute "Operation and Maintenance
Costs."
(t) "Ordinance No. 1" means Ordinance No. l of the Agency adopted on December 28,
1970, providing for the issuance of the Revenue Bonds, together with any other
ordinances of the Agency supplemental thereto or amendatory thereof.
(u) "Other Agency Customer" means the Agency, the County of Sonoma, California -
American Water Company (with respect to the Larkfield Water District), Forestville
Water District, Lawndale Mutual Water Company, Kenwood Village Water Company,
Penngrove Water Company, the City of Sebastopol, the State of California, and Santa
Rosa Junior College.
(v) 'Petaluma Aqueduct" means the existing pipeline and appurtenances, including
turnouts, from the Santa Rosa Aqueduct to Petaluma. The "south part" of the Petaluma
Aqueduct means the portion thereof south of the junction thereof with the Intertie
Aqueduct and the "north part" means the portion north of said junction to Scenic
Avenue.
(w) 'Potter Valley Project" means Federal Energy Regulatory Commission Project No.
77.
(x) 'Recycled Water" means wastewater treated to applicable standards set forth in
Title 22 of the California Code of Regulations, Division 4 Environmental Health, as may
be amended from time to time.
(y) 'Recycled Water Sub -Charge" and 'Recycled Water Fund" mean the sub -charge and
fund established by the Agency under Section 4.15.
(z) 'Recycled Water Project" means any programs, projects, or facilities that produce or
deliver recycled water, provided that the recycled water produced or delivered by such
projects or facilities (1) results in a reduction in use of potable water from the
Transmission System, (2) reduces the amount of water diverted from the Russian River
or its tributaries, (3) provides an environmental benefit which increases or avoids
reduction to the water supply or Transmission System capacity available to the Water
Contractors, or reduces the cost of providing such supply or capacity, or (4) assists the
Agency to comply with the federal or state Endangered Species Act or any other
environmental law or regulation, which compliance is required for the Agency to
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
17
5
provide the water supply or Transmission System capacity to the Water Contractors as
provided in this Agreement.
(aa) "Regular Customer" means the any of the Water Contractors or the Other Agency
Customers.
(bb) 'Remaining Facilities' means those portions of the Russian River-Cotati Intertie
authorized to be constructed or acquired by the Tenth Amended Agreement For Water
Supply and Construction of the Russian River-Cotati Intertie Project, dated November
14, 1997, which have not been constructed or acquired on the effective date of this
Agreement, including, but not limited to, 20 mgd of standby pump and collector
capacity; the Wohler-Forestville pipeline; the Eldridge-Madrone pipeline; Collector No.
6, and the Oakmont Pipeline.
(cc) 'Revenue Bond Obligations' means the payment of principal of and interest on the
Revenue Bonds and all other obligations and covenants of the Agency with respect to
the Revenue Bonds, including specifically any covenant to establish and maintain rates
and charges to provide revenue coverage in excess of a specified amount.
(dd) 'Revenue Bonds" means any of the following if issued or entered into for sole
purpose of financing the Capital Cost of Transmission System facilities or other facilities
authorized to be constructed, acquired, or funded under this Agreement: (1) all series or
issues of revenue bonds issued pursuant to ordinances and resolutions of the Agency or
of any joint powers authority of which the Agency is a member or (2) any loan
agreement, grant agreement, lease -purchase agreement, certificate of participation
agreement, note, commercial paper, or other debt or financing agreement entered into
by the Agency or by any joint powers authority of which the Agency is a member. As
used in this Agreement, the term "issue Revenue Bonds" includes entering into any of
the agreements set forth in clause (2) of the preceding sentence, and the term "holders of
Revenue Bonds' includes any holders of or counterparties to any such agreements.
(ee) 'Russian River Conservation Charge' means the charge established in Subsection
(a) of Section 4.18 of this Agreement.
(ff) 'Russian River-Cotati Intertie" means the Intertie Aqueduct and associated intake
facilities on the Russian River, including the diversion dam, intake works, infiltration
ponds, collectors, water treatment facilities, groundwater wells having a minimum
production capacity of 7 mgd, a Russian River water quality monitoring system,
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
18
0
pumps, telemetry equipment and related buildings and appurtenances, and associated
storage facilities.
(gg) "Russian River Customer" means any Agency customer within Sonoma County
who has or in the future will have contracts with the Agency to divert or redivert water
directly from the Russian River or Dry Creek without the use of the Transmission
System.
(hh) "Russian River Project" means Coyote Valley Dam/Lake Mendocino on the
Russian River, Warm Springs Dam/Lake Sonoma on Dry Creek, and related works as
contemplated by House Document Number 585, 81st Congress, 2nd Session, House
Document Number 547, Eighty -Seventh Congress, Agency Board of Directors
Resolutions No. 6847 adopted May 24,1955, No. 7798 adopted September 27,1955, No.
DR00793-1 adopted September 25, 1961 and Resolution No. DR68485 adopted
December 23, 1980, or any agreement between the Agency and the United States related
to Coyote Valley Dam or Warm Springs Dam.
(ii) "Russian River Projects Charge" means the charge established in Subsection (b) of
Section 4.18.
(jj) "Russian River Projects Fund" means the fund established by the Agency to pay or
partially pay for: (1) carrying out the Agency's Coyote Valley Dam Project and Warm
Springs Dam Project channel -stabilization works obligations to the United States
Government and the State of California under Agency Board of Directors Resolutions
No. 6847 adopted May 24, 1955, No. 7798 adopted September 27,1955, No. DR00793-1
adopted September 25, 1961 and Resolution No. DR68485 adopted December 23, 1980;
(2) securing and defending appropriative water rights which are necessary for the
realization of the full benefits of the Coyote Valley Dam and Warm Springs Dam
Projects; (3) the Agency's share of the United States Government's investment,
operation and maintenance, and major replacement costs associated with the Coyote
Valley Dam and Warm Springs Dam Projects; (4) the acquisition of all or part of the
Potter Valley Project or contributions made to the Project owner to insure the continued
operation of all or part of the Project; and (5) fishery mitigation and enhancement
projects undertaken by the Agency in the Russian River and Eel River and their
tributaries.
(kk) "Santa Rosa Aqueduct" means the existing pipeline and appurtenances, including
turnouts, from the collector wells at Wohler to the Ralphine Tank farm on the east
extension, and to Scenic Avenue on the south extension.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
19
7
(11) "Sonoma Aqueduct" means the existing pipeline and appurtenances, including
turnouts, from the Ralphine reservoirs to Sonoma. The Sonoma Aqueduct consists of
two reaches: 'Reach I" from the Ralplune reservoirs to Pythian Road and 'Reach 2"
from Pythian Road to the Sonoma reservoirs.
(mm) "Storage Facilities" means all reservoirs on the Transmission System, the pipeline
connecting the Kawana Springs Reservoirs with the Intertie Aqueduct; the pipeline
connecting the Kawana Springs and Ralphine reservoirs; the Oakmont Pipeline; the
pipeline connecting the Kastania reservoir with the Petaluma Aqueduct; the existing
booster pumping plant and the existing 300,000 -gallon reservoir components of the
Forestville Aqueduct; and transmission line pumping plants necessary to regulate flows
to storage facilities.
(nn) "Surplus Customer' means any person or entity who, as of the date of this
agreement, was being served Surplus Water by the Agency.
(oo) "Surplus Water" has the meaning defined in subsection (a) of Section 3.4 of this
Agreement.
(pp) "Transmission System" means the Agency's water production, storage, treatment
and transmission facilities, including but not limited to the Santa Rosa, Petaluma, and
Sonoma Aqueducts, the Russian River-Cotati Intertie, Emergency Wells, the Warm
Springs Hydroelectric Project, future water production, storage, treatment and
transmission facilities to be constructed as set forth in Sections 2.2 and 2.3, and the
Potter Valley Project, if acquired by the Agency pursuant to Section 2.4.
(qq) "Trustee" means the Trustee or Trustees for the Agency (or for any joint powers
authority of which the Agency is a member) and the holders of the Revenue Bonds
appointed pursuant to ordinances or resolutions of the Agency relating to Revenue
Bonds, or any successor(s) or assignee(s) thereof.
(rr) "Warm Springs Dam Project" means that certain project authorized for the Russian
River, Dry Creek, California, by the Flood Control Act of 1961, enacted October 23, 1962
(Public Law 874, 87th Congress).
(ss) "Warm Springs Hydroelectric Project" means Federal Energy Regulatory
Commission Project No. 3351.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
Ics
(tt) "Water Advisory Committee" means the advisory committee established in Part 5 of
this Agreement.
(uu) "Water Conservation Project" means (1) any program, project, or activity that will
reduce potable water use within a Regular Customer's service area (including, but not
limited to, activities undertaken pursuant to Section 1.12 of this Agreement, but
excluding Recycled Water Projects or Local Supply Projects approved after the date of
this Agreement), or (2) any materials, supplies, Agency staff time, or contractor services
provided by the Agency in support of any Regular Customer's Water Conservation
Project.
(vv) "Water Contractor" means a party signatory to this Agreement except the Agency
and Forestville.
1.3 Term of Agreement
This Agreement shall become effective upon its execution by all the parties
hereto and shall remain in effect until June 30, 2040, or, if any Revenue Bonds are
outstanding on June 30, 2040, until such date as all Revenue Bonds shall have been paid
in full and all obligations and covenants of the Agency with respect to any Revenue
Bonds shall have been discharged. The Agency shall enter into renewal agreements for
periods not to exceed forty years each with any or all of the Water Contractors
requesting the same for water supplies within the delivery capabilities of the Agency's
Transmission System, at a cost no greater than the Agency's Operation and
Maintenance Costs and unreimbursed Capital Costs allocated on a proportionate use
basis, it being understood that such renewal agreements shall provide for Entitlements
and Entitlement Limits for each customer as set forth herein.
1.4 Previous Agreements Terminated or Modified
(a) The Eleventh Amended Agreement for Water Supply, dated January 26, 2001,
between the Agency and the Water Contractors is terminated as of the effective date of
this Agreement and superseded by this Agreement.
(b) Existing agreements between the Agency and Windsor are terminated and amended
as follows, effective as of the effective date of this Agreement:
(1) All prior agreements between the Agency and Windsor for water deliveries
from the Transmission System are terminated as of the effective date of this
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
21
Agreement, including the Application for Water Service, dated April 1, 1987. All
water deliveries to Windsor from the Transmission System shall be made in
accordance with this Agreement.
(2) The Agreement for the Sale of Water between the Sonoma County Water
Agency and the Windsor Water District, dated June 8, 1991, is amended as
follows:
(i) By deleting the text of Section 4 ("Shortage of Water and
Apportionment") thereof and replacing it with the following: "In the event
of a shortage in the quantity of water available to its customers, including
the Town of Windsor, the Agency shall apportion water as provided in
the Restructured Agreement for Water Supply, dated . In
such event, (1) the Town of Windsor shall limit its total diversions and
rediversions of water from the Russian River, including both diversion
and rediversions pursuant to this agreement and all of its other diversions
and rediversions, to the amounts of water that the Agency allocates to the
Town of Windsor, and (2) in determining the amount of water available
for allocation, the Agency shall include the amount of water available for
diversion or rediversion by the Town of Windsor under its water rights in
addition to the amount available to the Agency under its own water
rights."
(ii) By adding at the end of Section 10 ("Payment") the following: "The
Town of Windsor shall also pay any charges required by the Restructured
Agreement for Water Supply, dated . including the
charges required by Section 4.17(b) of that agreement."
1.5 Enforcement
The failure of any Water Contractor to perform its obligations hereunder shall
not excuse the remaining Water Contractors from performing their obligations
hereunder nor excuse the Agency from performing its obligations hereunder to said
remaining Water Contractors. Each and all of the provisions of this Agreement shall be
enforceable by action brought by any party hereto for specific performance or any other
appropriate action at law for damages or in equity for other appropriate relief to the
end that no party hereto shall suffer from the default of any other party. Nothing in
this Agreement shall preclude any Water Contractor from seeking unilateral redress
under the law from the Agency, or any other party, Customer, or entity. Any owner or
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
22
10
holder of Revenue Bonds may also enforce any provision of this Agreement inuring to
the benefit of the holders of the Revenue Bonds.
1.6 Amendments
(a) Except as hereafter provided, this Agreement may be amended only with the
consent of all the parties hereto.
(b) Any annual delivery limit contained in Section 3.1 may be modified by written
Agreement between the Agency and the Water Contractor to which such annual
delivery limit applies without the consent of the other parties to this Agreement for the
purpose of conforming such annual delivery limits to a general plan which is applicable
to the service area of such Water Contractor. Copies of any such written agreements
shall be provided to all the parties to this Agreement.
(c) As of the effective date of this Agreement, Forestville is no longer a Water
Contractor, and this Agreement may be amended without the consent of Forestville,
provided, however, that Forestville's consent shall only be required for any amendment
that impairs or affects any then -existing obligation of the Agency to supply water to
Forestville from the Transmission System.
(d) If any amendment to this Agreement reduces the revenues to be received by the
Agency or otherwise impairs the ability of the Agency to meet its Revenue Bond
Obligations, then such amendment shall be effective only with the consent of the
Trustee. The Trustee shall give such consent if the Trustee determines that, following
such amendment, the Water Contractors will be obligated under this Agreement to
make payments to the Agency sufficient to enable the Agency to pay principal of and
interest on the Revenue Bonds and to meet all its other Revenue Bond Obligations. In
making such determination, the Trustee may rely upon such certificates or opinions
from qualified attorneys, engineers or accountants as the Trustee may deem necessary
and obtain from the Agency.
1.7 Pledee of Revenues
Each party hereto acknowledges that anything herein to the contrary
notwithstanding, all sums paid to the Agency pursuant to this Agreement are
"Revenues of the Transmission System" of the Agency as defined in Ordinance No. 1,
except (a) the payments and credits set forth in Section 4.4, (b) the payments of the
Russian River Conservation Charge and the Russian River Projects Charge made
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
23
11
pursuant to Section 4.11 and 4.18, (c) the payments of the Water Management Planning
Sub -Charge made pursuant to Section 4.13, (d) the payments of the Watershed Planning
and Restoration Sub -Charge made pursuant to Section 4.14, (e) the payments of the
Recycled Water Sub -Charge made pursuant to Section 4.15, and (f) the payments of the
Water Conservation Sub -Charge made pursuant to Section 4.16, and are pledged to the
payment of the Agency's Transmission System Revenue Bond Obligations. All said
sums shall be received, allocated and paid out pursuant to and consistent with
Ordinance No.1 and other obligations and covenants of the Agency with respect to
Revenue Bonds. All references in this Agreement to the accounting for, allocating,
paying, and crediting of monies are subject to the priority established by Ordinance No.
1 on all such revenues.
The parties hereto recognize that the Revenue Bonds are to be paid from
revenues, as provided herein, and that it is the intention of the parties that the charges
set forth herein will be sufficient to pay the Revenue Bonds and to meet the Revenue
Bond Obligations not met from other sources of funds. The Water Contractors,
therefore, agree to pay promptly such charges notwithstanding any deficiency in the
quantity or quality of water to which they or any of them would be entitled pursuant to
this Agreement. The provisions of this Agreement are made for the benefit of the
owners and holders from time to time of the Revenue Bonds and may be enforced by or
on behalf of any such owner or holder.
1.8 Books. Records and Accounts
The Agency shall keep or cause to be kept, proper books, records and accounts in
which complete and accurate entries shall be made of all monies received from all
entities, including the Agency's Regular Customers, and of the basis for and application
of said money, including detailed sub accounts showing expenditures made from
Operation and Maintenance Charge revenues for Water Conservation Projects, Recycled
Water Projects, Local Supply Projects, water management planning, and watershed
planning and restoration. Said books, records and accounts will be available during
normal business hours for inspection by the Water Contractors or their authorized
representatives. The Agency will transmit to the Water Contractors two reports each
year of the receipts and expenditures of the Transmission System. The first report will
be issued no later than February 1 and shall be accompanied by a preliminary budget
for the following Fiscal Year, and will show expenditures for the first half of the Fiscal
Year together with estimated year-end expenditures and estimated expenditures for the
following Fiscal Year. The second report will be issued after the end of each Fiscal Year
and will contain a budgetary accounting of Transmission System expenditures,
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 12
24
revenues and balances for the Fiscal Year. Each month the Agency shall supply each
Water Contractor with a summary showing the amount of water delivered during the
preceding month to each Regular Customer and Surplus Customer.
1.9 Water Contractors' Dutv to Provide Funds
Each Water Contractor shall use any and all means legally available to it
(including, without limitation, the enactment and maintenance in effect of legislation
establishing fees, tolls, rates and charges pertaining to the operation of its water
distribution system) so as to produce monies sufficient in amount to meet the monetary
obligations incurred by it pursuant to this Agreement and to enable it to maintain its
water distribution system in good working order.
1.10 Severability
If any one or more sections, provisions, promises, or conditions of this
Agreement is declared void or voidable for any reason by a final judgment or order of a
court of competent jurisdiction, it is hereby declared to be the intention of each party
and agreed that each and all of the other sections, provisions, promises and conditions
of this Agreement shall be and remain in full force and effect.
1.11 Third Partv Beneficiaries
Except for the holders of the Revenue Bonds, no third party beneficiaries are
intended or established by this Agreement.
1.12 Water Conservation Reouirements
(a) The Regular Customers of the Agency, and the Agency, shall (1) become members
of the California Urban Water Conservation Council ("CUWCC") within six months of
the effective date of this Agreement and remain as members in good standing; (2) sign
the "Memorandum of Understanding Regarding Urban Water Conservation in
California" ("MOU") maintained by the CUWCC and implement the Best Management
Practices ("BMPs") of water conservation as are promulgated by CUWCC from time to
time, or implement alternative water conservation measures that secure at least the
same level of water savings, and shall complete and file the annual CUWCC report
form; and (3) implement or use their best efforts to secure the implementation of any
water conservation requirements that may be added as terms or conditions of the
Agency's appropriative water rights permits or licenses, or with which the Agency must
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 13
25
comply under compulsion of regulation or law. In addition to and notwithstanding the
foregoing, all Regular Customers of the Agency shall require metered billing of all
customer accounts they serve.
(b) Should the Water Advisory Committee determine and so notify any Water
Contractor that its efforts to achieve compliance with the water conservation practices
required by this Section 1.12 are unsatisfactory, then such Water Contractor shall bring
its water conservation program into compliance within six months after such notice, or
within such additional time as may be granted by the Water Advisory Committee.
Should such Water Contractor's noncompliance as determined by the Water Advisory
Committee continue for six months after such notice of noncompliance, or beyond such
additional time as may be granted by the Water Advisory Committee, then the Water
Contractor shall thereafter pay a surcharge on all water delivered by the Agency
pursuant to this Agreement equal to ten percent of the Operation and Maintenance
Charge until the Water Advisory Committee determines that such Water Contractor is
in compliance. The proceeds of any surcharge paid pursuant to this section shall be
deposited and paid out in the same manner as the proceeds of the Water Conservation
Fund.
(c) The Agency shall use its best efforts to modify its rules and regulations and existing
contracts with Other Agency Customers to implement the water conservation
requirements set forth in Section 1.12(a) and the default provisions set forth in Section
1.12(b). With respect to Russian River Customers, the Agency shall use its best efforts
to encourage and, where and when possible, require said customers to sign the "MOV'
maintained by the CUWCC and implement the 'BMPs" of water conservation as are
promulgated by CUWCC from time to time.
(d) Nothing in this section shall limit Regular Customers to implementing only those
Water Conservation Projects contemplated by the CUWCC BMPs. Regular Customers
are encouraged to implement Water Conservation Projects that go beyond the CUWCC
BMPs.
1.13 Recvcled Water and Local Suuulv Proiect Reouirements
Within ten (10) years from the effective date of this Agreement, the Water
Contractors shall use their best efforts to carry out or participate in Recycled Water or
Local Supply Projects capable of delivering Recycled Water or potable water sufficient
to reduce the Water Contractors' collective deliveries from the Transmission System
(including, in the case of Windsor, reductions in withdrawals from Windsor's Russian
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
26
14
River wells), by at least 7,500 acre-feet per year, with approximately 50% of such
reduction resulting from Recycled Water Projects.
1.14 Transitional Provisions Applicable to Forestville
As of the effective date of this Agreement, the Agency's right, title, and interest
in facilities comprising the Forestville Aqueduct shall be transferred as follows:
(a) The existing Forestville pipeline from the Santa Rosa Aqueduct to Forestville
and the storage building at the existing booster pumping plant shall be transferred to
Forestville.
(b) The existing booster pumping plant and the existing 300,000 -gallon reservoir
shall become Storage Facilities.
(c) Subject to the limitation in subsection (d) of this section, the Agency shall
provide funding to Forestville for the Capital Costs of an S" pipeline to be constructed
by Forestville from the Intertie Aqueduct at the extension of Templeman Road, west on
Templeman Road to State Highway 116, then north on State Highway 116 West to Kay
Lane. The pipeline shall be funded as a common facility. Forestville shall commence
construction on the pipeline within five years of the effective date of this Agreement;
provided, however, that if the commencement of construction is delayed due to the
application to Forestville of any circumstance specified in the second paragraph of
Section 2.2 of this Agreement, then the Agency's General Manager/Chief Engineer may
authorize an extension of the commencement date.
(d) The Agency's funding obligation under this section shall be limited to
$690,000, increased by the change in the ENR Construction Cost Index between the
effective date of this Agreement and the date of commencement of construction of the
pipeline.
1.15 Local Production Capacity Goal
In order to mitigate against drought, earthquakes, spills, temporary
impairments, and other events impacting the quantity or quality of water available
from the Transmission System, and other emergencies that can befall an urban water
supply system, it is highly desirable that each Water Contractor achieve and maintain
local water production capacity capable of satisfying approximately forty percent (40%)
of the Water Contractor's average day of the maximum month demand.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
27
15
PART 2 - PLANNING. FINANCING. ACQUISITION. CONSTRUCTION.
OPERATION AND MAINTENANCE
2.1 Financine Additions to the Existine Transmission Svstem
The Agency will, subject to all applicable limitations specified in this Agreement
and all applicable legal and regulatory limitations, finance additions to the
Transmission System with cash available pursuant to Sections 3.6, 4.2, 4.6, 4.7, 4.8, 4.12,
payments made by Marin Municipal pursuant to Section 4.11, payments made by North
Marin pursuant to Section 4.4 and 4.9, any state, federal, or other grants or loans which
may become available, and, if the Agency decides to issue new series or issues of
Revenue Bonds, proceeds from the sale of Revenue Bonds.
2.2 Scheduline of Additions and Reolacements to the Existine Transmission Svstem
Subject to the availability of sufficient cash or proceeds from the sale of Revenue
Bonds (if the Agency decides to issue new series or issues of Revenue Bonds) and any
state, federal, or other grants or loans which may become available, and subject to all
applicable limitations specified in this Agreement, the Agency will (1) construct or
acquire additions to the existing Transmission System sufficient to meet the delivery
Entitlements set forth in Section 3.1 and 3.2 at such times as may be necessary to enable
it to reliably deliver to each of the Water Contractors such Entitlements at the time that
each contractor shall require the same and to make the deliveries authorized pursuant
to Section 3.12; (2) construct additional Russian River water production facilities (up to
a total capacity of 168.9 mgd) so that the total water production capacity available at all
times is not less than the average daily delivery to the Regular Customers and Marin
Municipal (excluding Surplus Water and water in excess of Entitlement Limits) during
the month of highest historical use plus 20 mgd; (3) construct, acquire, or lease
Emergency Wells with capacities which are from time to time determined by the Water
Advisory Committee; (4) construct Additional Facilities (up to a total capacity of 174.3
million gallons) to the extent necessary to maintain a quantity of water in storage equal
to 1.5 times the average daily delivery to the Regular Customers except North Marin
during the month of highest historical use; and (5) replace existing facilities and
construct Additional Facilities, related buildings and appurtenances as necessary to
insure the reliable and efficient operation of the Transmission System and to insure that
the quality of the water delivered complies with all applicable state and federal water
quality requirements.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 16
28
The time within which the Agency shall be obligated to construct such additions
and replacements to the existing Transmission System shall be extended, however, as a
result of any delays caused by fire, earthquake, other acts of God, acts of the public
enemy, riots, insurrections, governmental regulations on the sale or transportation of
materials or supplies, strikes affecting such construction or transportation of materials
or supplies in connection therewith, any State or Federal environmental regulations or
restrictions, shortages and/or delay in the obtaining of materials, shortages of or
allocations of fuel and other sources of energy, litigation resulting in court orders
restraining the construction of such additions and replacements, inability of Agency for
any reason to deliver the Revenue Bonds or any series thereof, or any other causes
beyond the control of Agency or any contractor constructing any part of such additions
and replacements.
2.3 Further Modifications to Transmission Svstem
(a) With the approval of the Water Advisory Committee and subject to the availability
of sufficient funds, the Agency may undertake studies, and prepare technical reports,
financial plans, and environmental documents for Transmission System facilities in
addition to those authorized to be constructed by this Agreement. If such activities are
undertaken pursuant to this paragraph, the cost thereof shall be considered to be costs
of Common Facilities and shall be paid from funds available pursuant to subsection (c)
of Section 4.2, or from the proceeds of Revenue Bonds and payments made by North
Marin pursuant to Section 4.4. If the cost is paid from the proceeds of Revenue Bonds
and payments made by North Marin, the cost shall be allocated as provided in
subsection (b), paragraph 9 of Section 4.3 and Section 4.9.
(b) Except for the facilities described in Section 2.2, the Agency will not construct or
acquire additions to the Transmission System that would increase the charges payable
by, or diminish or impair the water available to, any of the Water Contractors except on
such terms and conditions as may be agreed upon in writing by the Agency and each
Water Contractor who would be required to make any additional payment by reason of
such construction or whose water supply might be diminished or impaired by such
construction. If such addition is a booster pump or any other device, method, or system
that would enlarge or increase the capacity of any one customer to the detriment of
other users, then such addition or alteration shall not be made by Agency except by
amendment to this Agreement. If a question arises as to whether an addition or
alteration to the Transmission System requires an amendment of this Agreement
pursuant to this section, then such question shall be submitted to the Water Advisory
Committee and its decision shall be conclusive.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 17
29
2.4 Potter Vallev Proiect
All or part of the Potter Valley Project may be acquired upon a determination by
the Board of Directors of the Agency that such acquisition is necessary to insure the
Agency's continued ability to make the water deliveries authorized by this Agreement,
provided, however, that no part nor all of the Potter Valley Project shall be acquired
without the prior approval of the Water Advisory Committee. The Agency shall not be
liable to any of its Customers for any damage resulting from any Agency decision
regarding the acquisition or non -acquisition of any part or all of the Potter Valley
Project.
2.5 Water Conservation Proiects
Subject to the restrictions set forth in Section 4.16, the Agency may undertake or
fund any cost-effective Water Conservation Project that has been approved by the
Water Advisory Committee.
2.6 Recvcled Water and Local Sunuly Proiects
Subject to the approval of the Water Advisory Committee, the Agency may (a)
construct, fund, or partially fund studies or investigations or the Capital Cost of local
Recycled Water Projects and Local Supply Projects, or (b) enter into agreements for the
acquisition and sale of Recycled Water (or the rights to Recycled Water). The Agency
and the Water Contractors shall seek financial contributions for local Recycled Water
and Local Supply Projects funded under this section from benefitted wastewater
treatment plant owners, sanitation districts, and other benefitted parties. Projects
constructed, funded, or partially funded by the Agency under this section shall not be
part of the Transmission System, and the operation and maintenance cost of such
projects shall be the responsibility of the Water Contractors or other parties carrying
out, sponsoring, or participating in such projects. The benefits from any Recycled
Water Project shall be apportioned equitably based upon the respective financial
contributions to the Recycled Water Project by the parties funding such project. The
Capital Costs (including Revenue Bond Obligations, if any) of Local Supply Projects or
Recycled Water Projects or of acquiring Recycled Water or the rights thereto shall be
paid or partially paid from the Recycled Water Fund.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
30
In
2.7 Water Manaeement Plannine
The Agency shall periodically prepare a draft regional Urban Water
Management Plan pursuant to the Water Code for consideration by the Water
Contractors. Each Water Contractor shall provide the Agency with all information and
data the Agency reasonably determines to be necessary to allow the Agency to prepare
the draft regional Urban Water Management Plan. The Agency shall use its best efforts
to prepare a draft regional Urban Water Management Plan that meets the requirements
of the Water Code. Each Water Contractor shall either adopt the draft regional Urban
Water Management Plan prepared by the Agency as its Urban Water Management
Plan, or prepare and adopt its own Urban Water Management Plan pursuant to the
Water Code. Before adopting the Urban Water Management Plan prepared by the
Agency, a Water Contractor shall evaluate the Plan, and adoption of the Plan by a
Water Contractor shall constitute a determination by that Water Contractor that the
Plan meets the requirements of the Water Code as to that Water Contractor.
2.8 Watershed Plannin¢ and Restoration
(a) The Agency may undertake any action, study, or project approved by the Water
Advisory Committee related to (1) the development or implementation of watershed
restoration and maintenance plans and projects (including, but not limited to, stream
restoration projects, water quality monitoring studies and projects, public education
and outreach activities, and funding of third -party studies and projects) or (2)
groundwater studies and investigations. Before undertaking any such action, study or
project: (1) the Agency shall consider suggestions received from the public, Water
Contractors, and interested parties and organizations such as the Russian River
Watershed Association as to the actions, studies, and projects to be undertaken by the
Agency hereunder; and (2) the Agency and the Water Contractors shall identify and use
their best efforts to obtain funding contributions from other parties that would benefit
from the actions, studies, or projects authorized hereunder, including but not limited to
federal and state loans and grants, municipalities (including Russian River Customers,
county and special district governments), and urban and industrial development,
gravel mining, agriculture, forest harvesting, recreation, and sport and commercial
fishing interests.
(b) The authority granted to the Agency under this Section 2.8 is permissive and not
mandatory, and that nothing in this Section 2.8 shall (1) require the Agency to
undertake any action or project unless such action or project is approved by the
Agency, (2) impair or affect the Agency's right to undertake any action or project not
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
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19
funded under this Agreement, or (3) require the Agency to engage in any regulatory
activity.
(c) The Agency may carry out projects and activities within the scope of subsection (a)
above that primarily or exclusively benefit one or more Water Contractors, provided (1)
each such project and activity is approved by the Water Advisory Committee and the
benefitted Water Contractors, and (2) some or all benefitted Water Contractors enter
into an agreement with the Agency for such project or activity and agree to pay
supplemental charges as approved by the Agency and the Water Advisory Committee
to defray all or a portion of the cost of the project or activities.
2.9 Plannine Coordination
(a) The parties to this Agreement shall consult with agencies that have planning and
zoning powers within their water service territories in the manner set forth in California
Government Code Section 65352.5 in order to promote close coordination and
consultation between water supply agencies and land use approval agencies to ensure
that proper water supply planning occurs in order to accommodate projects that will
result in increased demands on water supplies.
(b) The parties to this Agreement shall consult with agencies that have building
regulatory powers pursuant to the Government Code and Health and Safety Code to
promote use of water conservation equipment, fixtures, appliances, devices and
techniques.
2.10 Overation and Maintenance
The Agency shall operate and maintain the Transmission System in a good state
of repair.
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PART 3 - WATER SUPPLY
3.1 Delivery Entitlements of Water Contractors
Subject to Section 3.5, the Agency shall deliver to each Water Contractor at the
points of delivery hereinafter set forth such quantities of water as the Water Contractor
shall from time to time require at such rates of flow as are necessary to meet its peak
day's demand, subject to the following:
(a) The Agency shall not be obligated to deliver water in excess of the following:
Water Contractor/Aqueduct Average Daily Rate Annual Amount
of Flow During During Fiscal Year
Any Month (excluding
Surplus Water)
Santa Rosa
From Reach 1, 2, and 3a of
the Intertie Aqueduct 40.0 mgd
From the Santa Rosa Aqueduct 40.0 mgd
From the Sonoma Aqueduct 4.0 mgd
Maximum combined total
from all aqueducts 56.6 mgd 29,100 AF
North Marin
From Petaluma Aqueduct 19.9 mgd 14,100 AF
Petaluma
From Petaluma Aqueduct 21.8 mgd 13,400 AF
Rohnert Park
From Petaluma Aqueduct or
Reach 3 of Intertie Aqueduct 15.0 mgd 7,500 AF
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Valley of the Moon
From Sonoma Aqueduct 8.5 mgd 3,200 AF
Sonoma
Cotati
From Sonoma Aqueduct 6.3 mgd 3,000 AF
From Petaluma Aqueduct or
Reach 3 of Intertie Aqueduct 3.8 mgd 1,520 AF
HATAIT61 "01
From Santa Rosa Aqueduct 1.5 mgd
From Russian River Diversions 7.2 mgd
900 AF
4,725 AF
The delivery limits for Windsor include both water delivered by the Agency through
the Transmission System and water diverted by Windsor through facilities owned by
Windsor under its own water rights and under the Agency's water rights pursuant to
the agreement between the Agency and Windsor dated January 8,1991. Windsor shall
not divert any water under the Agency's water rights through its own facilities except
and to the extent that water is unavailable for diversion under any of Windsor's
available water rights, as such rights currently exist or may exist in the future. Windsor
shall act with diligence to take all actions necessary to obtain and retain any water
rights to which Windsor may be entitled. For purposes of allocations pursuant to
Section 3.5(a), (1) Windsor shall be considered to be a "Russian River Customer" with
respect to its direct Russian River diversions, and (2) in determining the amount of
water available for allocation under Section 3.5(a), the Agency shall include the amount
of water available for diversion by Windsor under Windsor's water rights in addition to
the amount available to the Agency under its own water rights. For purposes of
allocations pursuant to Section 3.5(b), Windsor's average daily rate of flow during any
month Entitlement Limit shall be 1.5 mgd.
(b) North Marin shall not take delivery of water at an instantaneous delivery rate
greater than its average delivery rate for such day, if such instantaneous delivery rate
would increase the Agency's cost of electrical energy. North Marin shall not take
delivery of water at a rate of more than 19.9 mgd during more than 14 days of any
month, nor at a rate of more than 20.9 mgd during any day of any month. Irrespective
of its delivery Entitlement, North Marin shall nevertheless have the right to a flow rate
of 14.8 mgd in the Petaluma Aqueduct.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
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(c) No Water Contractor shall take delivery of water at an average rate during any
month that is greater than 2.0 times the average rate of delivery to that contractor
during the preceding 12 months. The Agency also shall adopt this requirement as a
service rule applicable to Other Agency Customers. However, if any Regular Customer
was during the preceding 12 months subject to a curtailment in deliveries pursuant to
Section 3.5, then the limit prescribed by this subsection shall be 2.0 times the average
rate of delivery that such customer would have received in the absence of such
curtailment. This rule shall not apply to Water Contractors who utilize local sources of
supply to reduce demand on the Transmission System during the peak summer period
of June 1 through September 30, and whose average production rate for said period
from all of the contractor's local sources is equal to at least 2.0 times the average
production rate of all of that contractor's local sources during the eight months
immediately preceding the peak summer period.
(d) No Water Contractor shall take delivery of water during any month at an average
rate that is greater than 1.3 times the average rate of delivery to that contractor during
the peak month of the prior three calendar years without the written consent of the
Agency. The Agency also shall adopt this requirement as a service rule applicable to
Other Agency Customers. Such consent shall be given by the Agency if and only if
sufficient transmission capacity exists to make such increased deliveries and the
deliveries to the other Water Contractors required to be made pursuant to this section.
However, if any Water Contractor was during the preceding three calendar years
subject to a curtailment in deliveries pursuant to Section 3.5, then the limit prescribed
by this subsection shall be 1.3 times the average rate of delivery that such contractor
would have received during the peak month of the prior three calendar years in the
absence of such curtailment.
(e) For purposes of determining Santa Rosa's average daily rate of flow during any
month Entitlement Limit under this subsection, all water delivered to Santa Rosa from
the Kawana Pipeline or from the pipeline connecting the Kawana Springs and Ralphine
reservoirs shall be deemed delivered from Reach 3a of the Intertie Aqueduct.
3.2 Conditions on Other Aeencv Customer Deliveries
The Agency may furnish water from the Transmission System to Other Agency
Customers subject, however, to the following conditions:
(a) The total quantity of water delivered to all the Other Agency Customers shall not
exceed an average of 2.7 million gallons per day during any month.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 23
35
(b) The Agency shall not enter into contracts to furnish water to any Other Agency
Customer except itself or the County of Sonoma for use on land within two miles of the
Corporate Territory of a Water Contractor or Forestville except with the prior written
consent of such Water Contractor or Forestville, which consent will be subject to the
condition that the Agency shall cease delivering water to such customer whenever a
Water Contractor or Forestville is willing and able to furnish water to such customer.
Water delivered by the Agency from the Transmission System to the Agency or the
County of Sonoma shall not be used for residential, commercial, or private industrial
purposes.
(c) The Agency shall not deliver more than an average of 0.5 million gallons per day
during any month from the south part of the Petaluma Aqueduct to Other Agency
Customers.
(d) The Agency shall not deliver more than an average of 1.5 million gallons per day
during any month from Reach 1 of the Intertie Aqueduct to Forestville.
(e) The Agency shall not sell water from the Transmission System except as expressly
authorized by this Agreement.
3.3 Deliveries in Excess of Entitlement Limits
(a) No Regular Customer may take delivery of water in excess of its average daily rate
of flow during any month Entitlement Limit as set forth in Sections 3.1 or 3.2, except
upon the following conditions:
first, that such excess delivery does not impair or delay the delivery to any other
Regular Customer of its Entitlements; and
second, that the Regular Customer taking the excess delivery is then proceeding
in good faith, with plans and funding to develop a reliable water supply,
sufficient to supply its needs in excess of its Entitlement Limits; and
third, that either
(1) all the Water Contractors approve such excess delivery; or
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(2) such excess delivery is made during a period when deliveries to another
Water Contractor are less than its Entitlement Limits, such excess delivery
does not exceed the unused amounts of said contractor's Entitlement Limits,
and said contractor has notified the Agency in writing of its consent to said
delivery.
(b) Any Water Contractor may transfer any portion of its annual amount during any
fiscal year Entitlement Limit to any other Water Contractor for such periods of time and
pursuant to such terms as agreed to by the transferor Water Contractor and the
transferee Water Contractor, subject to the following:
(1) Such transfer shall not impair or delay the delivery to any other Regular
Customer of its Entitlements.
(2) Notice of a proposed transfer, including adequate information to
identify any impacts to deliveries of water to other Water Contractors, shall
be provided to all the other Water Contractors individually, to the Water
Advisory Committee, and to the Agency. Upon request of any other Water
Contractor, the transferor and transferee Water Contractors shall promptly
meet to identify and resolve any potential impacts of the proposed transfer.
If any Water Contractor determines that the proposed transfer will impair
or delay the delivery of its Entitlements, such Water Contractor may file a
written objection to the proposed transfer with the Water Advisory
Committee, with a copy to the Agency. Such objection must be filed no
later than 45 days after the Water Contractor receives notice of the proposed
transfer. Thereafter, the Water Advisory Committee shall determine
whether the proposed transfer will impair or delay the delivery of the
objecting Water Contractor's Entitlements, and whether there are measures
that will eliminate such impairment or delay. In the absence of an objection
to a proposed transfer by any Water Contractor, the approval of the Water
Advisory Committee is not required.
(3) The average daily rate of flow during any month Entitlement Limit of
the transferee Water Contractor as set forth in Sections 3.1 or 3.2 and the
other delivery limitations applicable to the transferee Water Contractor
shall not be affected by, and shall remain applicable notwithstanding, any
transfer under this subsection.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
37
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(4) Payments to the Agency for delivery of the transferred water to the
transferee Water Contractor shall be based upon the Aqueduct rate
applicable to the transferee Water Contractor pursuant to this Agreement.
(5) The transferor and transferee Water Contractors shall be responsible for
all regulatory compliance relating to the transfer, including compliance
with the provisions of the California Environmental Quality Act. To the
greatest extent permitted by law, the transferor and transferee Water
Contractors shall indemnify and defend each of the other Water Contractors
and the Agency from any claims, damages, or judicial or administrative
proceedings arising out of any actions related to this Subsection 3.3(b),
whether or not there is concurrent negligence on the part of the other Water
Contractors or the Agency or each of them, but excluding liability due to the
sole active negligence or willful misconduct of any of the other Water
Contractors, the Agency, or each of them. The latter exclusion shall operate
only as to the particular Water Contractor or Agency whose sole active
negligence or willful misconduct caused the exclusion.
3.4 Surplus Water
(a) Surplus Water is water that from time to time may be available for delivery from the
Transmission System in excess of the amounts required to meet the Agency's
contractual obligations and the requirements of all the Agency's Regular Customers for
uses other than those described in subdivision (b) of this section.
(b) Surplus Water may be used only for the following purposes:
(1) replenishment of surface water supply reservoirs or recreational lakes,
including but not limited to Ralphine, Spring, and Stafford Lakes, or
(2) replenishment of groundwater basins;
provided, however, that Surplus Water also may be provided for use for irrigation of
land used for commercial production of food or fiber if such provision of water is
required by any agreement in existence on the effective date of this Agreement.
(c) The Agency shall deliver Surplus Water only from separate metered turnouts on the
Transmission System or the North Marin Aqueduct.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
38
26
(d) The Water Contractors shall have first priority on deliveries of Surplus Water.
(e) The Agency desires to transfer all of its Surplus Customers to the Water Contractors.
The parties to this Agreement shall cooperate in the voluntary permanent transfer of
Surplus Customers from the Agency to the party whose corporate territory
encompasses the site of a given Surplus Customer or whose corporate territory
boundary is within two miles of the turnout(s) serving said customer. Should a given
Surplus Customer lie within two miles of more than one party, the parties shall meet
and confer with the Agency and by mutual agreement determine who is best suited to
take over said Surplus Customer. Nothing in this subsection shall require a Water
Contractor to take over service of any Agency Surplus Customer. Should a given party
opt not to take over Surplus Customers who lie within their corporate territory or
within two miles of the boundary of same, then any other party to this Agreement
whose corporate territory lies within Sonoma County may apply to the Agency to take
over said Surplus Customers. Parties who agree to take on such service shall be known
as Surplus Water providers.
(f) Surplus Water providers agree to interrupt delivery of Surplus Water upon
notification by Agency if Agency determines, in its sole discretion, that there exists an
immediate or pending problem involving loss of Transmission System storage,
inadequate pumping capacity, a valid complaint from any Regular Customer that they
are not receiving their appropriate Entitlement as a result of Surplus Water deliveries,
or any other problem impacting the delivery capability of the Transmission System.
Surplus Water providers shall notify their customers of Agency's right to require such
delivery interruptions. Notwithstanding the right of the Agency to notify and cause the
interruption of delivery of Surplus Water, a Surplus Water provider may also interrupt
delivery of Surplus Water at any time it determines it is necessary or prudent to do so
in order to satisfy the demands of its non -Surplus Customers; or for water system
maintenance, repair, or planned or unplanned outage of any nature whatsoever,
including but not limited to a perceived, threatened or actual water shortage.
Deliveries of Surplus Water shall not be deemed to be included as part of any Regular
Customer's Entitlement or Entitlement Limit.
3.5 Shortaee of Water and Auuortionment
(a) (1) The Agency shall use its best efforts to obtain, perfect, and maintain
appropriative water rights in amounts sufficient to be able to make the water
deliveries provided for in this Agreement. In its operation of the Russian River
Project, the Agency shall use all reasonable means to prevent a deficiency in the
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
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27
quantity of water that is available to the Agency for diversion and rediversion
under the Agency's water rights. However, nothing in the preceding two
sentences shall be construed to limit the Agency's discretion to take appropriate
actions in good faith to resolve any issue that may arise under the federal
Endangered Species Act or any other federal or state law affecting the Agency's
water rights or operation of the Russian River Project.
(2) If by reason of drought, environmental laws or regulations, other causes
beyond the control of the Agency, or any change in the amounts of water
imported by the Potter Valley Project into the Russian River watershed (whether
or not such change is caused by any action or inaction of the Agency) a
deficiency does occur, the Agency shall not be liable to any of its customers for
any damage arising therefrom.
(3) In the event of a deficiency pursuant to subsection 3.5(a)(2), the Agency
first shall cease all deliveries of Surplus Water to other than the Water
Contractors; second, shall cease deliveries of all Surplus Water; third, shall cease
deliveries to Regular Customers in excess of their respective annual Entitlement
Limits; and fourth, shall apportion the available supply of water as follows:
(i) first, deliver to each of its Regular Customers, not in excess of their
respective Entitlement Limits, authorize Agency's Russian River
Customers to divert or redivert not in excess of the amounts for which
those customers have contracted to purchase from the Agency, and
deliver to Marin Municipal not in excess of the amounts, if any, that are
required to be delivered pursuant to the Third Amended Offpeak Water
Supply Agreement dated January 25, 1996, the Amended Agreement for
the Sale of Water between the Sonoma County Water Agency and the
Marin Municipal Water District dated January 25,1996, amendments to
these agreements that have been approved by the Water Advisory
Committee, or subsequent agreements between the Agency and Marin
Municipal that have been approved by the Water Advisory Committee,
the quantities of water required by each such customer for human
consumption, sanitation, and fire protection as determined by the Agency
after taking into consideration all other sources of potable water then
available to said customer, including, for Russian River Customers, water
available under their own water rights;
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 28
40
(ii) second, to the extent additional water is available to the Agency,
allocate that water proportionately as follows: deliver such water to
Agency's Regular Customers based upon their respective average daily
rate of flow during any month Entitlement Limits, authorize the Agency's
Russian River Customers to divert or redivert such water based upon the
delivery limits set forth in the agreements between the Agency and its
Russian River Customers, and deliver such water to Marin Municipal
pursuant to and to the extent required by the Third Amended Offpeak
Water Supply Agreement dated January 25,1996, the Amended
Agreement for the sale of Water between the Sonoma County Water
Agency and the Marin Municipal Water District dated January 25, 1996,
amendments to these agreements that have been approved by the Water
Advisory Committee, or subsequent agreements between the Agency and
Marin Municipal that have been approved by the Water Advisory
Committee;
(iii) provided, however, that no Customer shall receive under
subsections 3.5(a)(3)(i) and 3.5 (a)(3)(ii) a total quantity of water in excess
of its reasonable requirements or its said Entitlement Limits or contracted
amount, whichever is less.
(b) (1) In the event of a temporary impairment of the capacity of the
Transmission System by reason of natural disaster, sabotage or other causes
beyond the control of the Agency, the Agency shall not be liable to any of its
customers for any damage arising therefrom.
(2) In the event of a Section 3.5(b)(1) impairment, the Agency shall:
(i) first, deliver to each of its Regular Customers the quantity of water,
not in excess of the respective average daily rate of flow during any
month Entitlement Limit, required by it for human consumption,
sanitation, and fire protection as determined by the Agency after taking
into consideration all other sources of potable water then available to said
customer;
(ii) second, to the extent additional Transmission System capacity is
available to the Agency, deliver a quantity of water to the Regular
Customers in proportion to their respective average daily rate of flow
during any month Entitlement Limits, provided, however, that no Regular
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
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Customer shall receive under subsections 3.5 (b)(2)(i) and (b)(2)(ii) a total
quantity of water in excess of its reasonable requirements or its average
daily rate of flow Entitlement Limit, whichever is less;
(iii) third, to the extent additional Transmission System capacity is
available, deliver water to Regular Customers in excess of their average
daily rate of flow Entitlement Limits pursuant to Section 3.3;
(iv) fourth, to the extent additional Transmission System capacity is
available, deliver water to Marin Municipal not in excess of the delivery
limitations in Section 3.12;
(v) fifth, to the extent additional Transmission System capacity is
available, deliver Surplus Water to the Water Contractors;
(vi) sixth, to the extent additional Transmission System capacity is
available, deliver Surplus Water to other than the Water Contractors.
(3) However, deliveries to Marin Municipal shall not be reduced or curtailed
under this Section 3.5(b) because of inadequate capacity in the new aqueduct to
be constructed generally paralleling the portion of the Petaluma Aqueduct that
extends from the Ely Pumping Plant to Kastania Reservoir, if such new aqueduct
is paid for and dedicated to the Agency pursuant to Section 13 of the Amended
Agreement for the Sale of Water between the Sonoma County Water Agency and
the Marin Municipal Water District dated January 25, 1996.
(c) (1) In determining "human consumption, sanitation, and fire protection"
amounts pursuant to this Section 3.5, the Agency shall take into account the level
of water conservation achieved by the Customer and the resulting decrease in
end user ability to reduce water use (the hardening of demand) resulting from
such conservation. The allocations pursuant to subsection 3.5(a)(3)(i) shall be
determined using a methodology which rewards and encourages water
conservation; avoids cutbacks based upon a percentage of historic consumption,
and, among other things, bases the amounts necessary for 'human consumption,
sanitation, and fire protection" upon no greater than average indoor per capita
water use determined from recent retail billing records for winter water use by
all of the Water Contractors; and, if necessary or appropriate for equitable
purposes, considers commercial, industrial and institutional water uses
separately and determines that element of the subsection 3.5(a)(3)(i) allocation
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
42
based on winter water use from recent retail billing records for commercial,
industrial, and institutional uses.
(2) The fundamental purpose of the "reasonable requirements' limitation is to
ensure that no Customer receives more water during a shortage than that
Customer reasonably needs. In determining "reasonable requirements' pursuant
to this Section 3.5, the Agency may take into account the hardening of demand
resulting from the level of conservation achieved by the Customer; the extent to
which the Customer has developed Recycled Water Projects and Local Supply
Projects; and the extent to which the Customer has implemented water
conservation programs (including conservation required pursuant to the
provisions of Section 1.12 of this Agreement). It is the intention of the parties to
this Agreement that the Agency make its "reasonable requirements"
determinations so as to encourage Customers to implement water conservation,
Recycled Water, and Local Supply Projects.
(d) The Agency shall at all times have an adopted water shortage allocation
methodology sufficient to inform each Customer of the water that would be available to
it pursuant to Section 3.5(a) in the event of reasonably anticipated shortages, which
methodology shall be consistent with this Section 3.5 and shall be included in the Urban
Water Management Plan prepared pursuant to Section 2.7.
(e) The parties agree that it is extremely difficult and impractical to determine the
damage caused to the Agency or other Customers as a result of the taking of water by
any Customers in excess of the limitations contained in this Section 3.5. If any
Customer takes delivery of water from the Transmission System or otherwise from the
Russian River system in violation of this Section 3.5, then it shall pay the Agency, in
addition to all other applicable charges, liquidated damages in an amount equal to 50
percent of the applicable Operation and Maintenance Charge (including all sub -
charges) times the amount of water taken in violation of the provisions of this Section
3.5. The Agency shall use its best efforts to incorporate this liquidated damages
provision into its agreements with Other Agency Customers, Russian River Customers,
Marin Municipal Water District, and into the Agency's rules and regulations for the
provision of water service, and impose liquidated damages pursuant to this Section
3.5(e). The existence of this liquidated damage provision shall not limit or restrict the
Agency from physically limiting the quantity of water taken to the amounts authorized
by this Section 3.5 or from pursuing all other available legal and equitable remedies
applicable to such violations. By affirmative vote, the Water Advisory Committee may
request that the Agency physically limit the quantity of water taken by a Regular
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
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Customer to the amounts authorized by this Section 3.5 or that the Agency pursue all
other available legal and equitable remedies applicable to such violations. The proceeds
of any liquidated damages assessed pursuant to this subsection shall be deposited and
paid out in the same manner as the proceeds of the Operation and Maintenance Charge.
(f) Notwithstanding subsections (a) and (b) above, as an alternative method for
allocation under this Section 3.5 during a period of water deficiency or temporary
Transmission System impairment, the Water Advisory Committee (or, in the event of a
Transmission System temporary impairment affecting fewer than all of the Water
Contractors, the Water Advisory Committee representatives of the Water Contractors
affected by the temporary impairment) may, by unanimous vote, determine how water
shall be allocated among the affected Water Contractors. The Agency shall provide a
calculation methodology or other information adequate to enable the determination, in
a manner consistent with this Section 3.5, of the volume of water to which (i) the Water
Contractors as a group, and (ii) all other Customers would be respectively entitled.
Any alternative method for allocation determined by the Water Advisory Committee
pursuant to this subsection shall apply only to the volume of water to which the Water
Contractors are entitled as a group.
(g) In the event that Transmission System capacity is expanded by the construction of
facilities other than those authorized by this Agreement, then notwithstanding anything
in this Section 3.5 to the contrary, any allocations made pursuant to this section to
Forestville that are based upon the average daily rate of flow during any month
Entitlement Limits shall not use a denominator greater than 133.4 mgd.
3.6 Fire Fiehtine Service
Anything herein to the contrary notwithstanding, the Agency may furnish water
for fire fighting from hydrants or standpipes on the Transmission System, provided,
however, that such service within two miles of the Corporate Territory of a Water
Contractor may be furnished only if and during the period of time said Water
Contractor consents thereto in writing. The Agency shall set fees sufficient to recover
the full cost of installing and maintaining and supplying water to fire hydrants. All
revenue from such fees shall be treated the same as money received from the Operation
and Maintenance Charge and shall be deposited and paid out as set forth in Section 1.7
and subdivision (b) of Section 4.1. Agency shall adopt service rules limiting hydrant
water usage to fire suppression, fire training and limited temporary uses such as
providing metered construction water.
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3.7 Oualitv of Water
(a) The Agency warrants that it will use its best efforts to insure that all water delivered
hereunder shall be of such purity and quality required to meet minimum standards for
human domestic consumption from time to time established by the state and federal
governments. The Agency shall not be liable to any of its Customers for any damage
arising from the quality of water that it delivers under this Agreement, except for
damages based on any breach of the warranty described in the preceding sentence.
(b) The payment obligations of the Water Contractors set forth in Part 4 shall not be
affected in any manner by the quality of the water delivered by the Agency hereunder.
3.8 Points of Delivery
All water furnished to each Water Contractor hereunder shall be delivered at the
discharge flange of meters at turnouts owned and maintained by the Agency. Turnouts
in addition to those now existing shall be constructed from time to time at such
locations as shall be agreed upon by the Agency and the Water Contractors involved.
Water delivered to Petaluma and North Marin at the McNear meter station shall be
delivered at a hydraulic gradient of not less than 175 feet mean sea level. Turnouts
installed for Regular Customers shall be not less than 8 inches in diameter. Turnout
installation charges shall be determined from time to time by resolution of the Board of
Directors of the Agency and shall be payable by the Customer prior to turnout
installation by Agency.
3.9 Risk of Loss and Resoonsibility
Title and risk of loss with respect to all water delivered hereunder shall pass
from the Agency to the Water Contractor at the point of delivery thereof as set forth in
Section 3.8. The Agency shall not be responsible for the control, transmission,
distribution, handling or use of water beyond the point of delivery thereof. Each Water
Contractor shall be responsible for installing and maintaining any device it deems
necessary to reduce or regulate the pressure under which the water may be delivered
hereunder.
3.10 Place of Use of Water Delivered to North Marin
(a) North Marin may exchange water delivered under this Agreement for an equal
amount of water delivered to it by Marin Municipal.
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45
33
(b) Except as provided in subdivision (a) of this section, North Marin shall not permit
any water delivered under this Agreement to be used outside of its own distribution
system service areas.
3.11 Measurement
All water delivered by the Agency from the Transmission System shall be
measured by meters installed and maintained by the Agency. The Agency shall test the
accuracy of each meter not less frequently than annually and provide each Water
Contractor with a report of such test. Each Water Contractor shall have the right at any
time and at its expense to make additional tests of any meter. If a meter is found to be
reading 2 percent or more fast or slow, it shall immediately be repaired to bring it
within 2 percent accuracy or be replaced by the Agency.
3.12 Mann Municipal Water Deliveries
The Agency, pursuant to the Third Amended Offpeak Water Supply Agreement
dated January 25, 1996 and the Amended Agreement For The Sale Of Water Between
The Sonoma County Water Agency and the Marin Municipal Water District dated
January 25, 1996, amendments to these agreements that have been approved by the
Water Advisory Committee, or subsequent agreements between the Agency and Marin
Municipal that have been approved by the Water Advisory Committee, may deliver
water to Marin Municipal when and to the extent that the Transmission System has
capacity in excess of that required by Agency to supply its Regular Customers the
Entitlements set forth in Sections 3.1 and 3.2. However, deliveries to Marin Municipal
shall not be reduced or curtailed because of inadequate capacity in the new aqueduct to
be constructed generally paralleling the portion of the Petaluma Aqueduct that extends
from the Ely Pumping Plant to Kastania Reservoir, if such new aqueduct is paid for by
Marin Municipal and dedicated to the Agency pursuant to Section 13 of the Amended
Agreement for the Sale of Water between the Sonoma County Water Agency and the
Marin Municipal Water District dated January 25, 1996.
The maximum delivery rate to Marin Municipal between May 1 and October 31
shall not exceed 12.8 mgd. The total quantity of water delivered to Marin Municipal in
any Fiscal Year shall not exceed 14,300 Acre Feet. Deliveries of water to Marin
Municipal shall be made either through a separately metered turnout or through North
Marini s metered turnout(s). If water is delivered through North Marin's metered
tumout(s), then North Marin shall maintain in good repair and calibration metered
turnouts at points of delivery from its system into Marin Municipal's system and shall
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
46
34
read such meters on or about the end of each month and provide to Agency an
accounting of water delivered during the preceding month to Marin Municipal. In
making such accounting, North Marin shall deduct from the total of water delivered to
Marin Municipal any exchange water as provided in Section 3.10 of this Agreement and
any water produced by North Marin and delivered to Marin Municipal.
3.13 Damaees for Peakine on the Transmission Svstem or Takine Water in Excess of
Averaee Dailv Rate of Flow Entitlement Limits in Violation of Section 3.3
The parties to this Agreement recognize that the Agency will have increased
costs, in amounts that will be difficult to determine, if any Regular Customer takes
water in violation of subsection (b), (c) or (d) of Section 3.1 or subsection (a) of Section
3.3. Accordingly, if any Regular Customer takes delivery of water from the
Transmission System in violation of subsection (b), (c) or (d) of Section 3.1 or subsection
(a) of Section 3.3, then it shall pay the Agency, in addition to all other applicable
charges, liquidated damages in an amount equal to twenty-five percent (25%) of the
applicable Operation and Maintenance Charge (including all sub -charges) times the
amount of water taken in violation of these provisions. The assessment of liquidated
damages pursuant to this section for a violation by a Regular Customer of subsection
(b), (c) or (d) of Section 3.1 or subsection (a) of Section 3.1 maybe waived by the Agency
upon a showing by the contractor that the taking of delivery of water in violation
thereof resulted from an act of God or other unforeseeable circumstances over which
the Regular Customer had no control. The existence of this Equidated-damage
provision shall not limit or restrict the Agency from physically limiting the quantity of
water taken to the amounts authorized by this Agreement or from pursuing all other
available legal and equitable remedies applicable to such violations. The proceeds of
any liquidated damages assessed pursuant to this subsection shall be deposited and
paid out in the same manner as the proceeds of the Operation and Maintenance Charge.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 35
47
PART 4 - CHARGES AND PAYMENTS
4.1 Seuarate Chames and Funds
(a) On or before April 30 preceding each Fiscal Year during which any of the following
charges are payable, the Agency will establish the amount of the following charges for
the ensuing Fiscal Year:
(1) the Operation and Maintenance Charge, including
(a) the Water Management Planning Sub -Charge,
(b) the Watershed Planning and Restoration Sub -Charge,
(c) the Recycled Water and Local Supply Sub -Charge,
(d) the Water Conservation Sub -Charge,
(2) the Aqueduct Facilities Capital Charges, including
(a) the Santa Rosa Aqueduct Capital Sub -Charge,
(b) the Sonoma Aqueduct Capital Sub -Charge,
(c) the Petaluma Aqueduct Capital Sub -Charge,
(3) the Storage Facilities Capital Charge,
(4) the Common Facilities Capital Charge, and
(5) the North Marin Capital Charge.
In determining the amount of these charges, the Agency shall include a reasonable
allowance for usual contingencies and errors in estimation, and to maintain a prudent
reserve in an amount determined from time to time by the Water Advisory Committee.
(b) All monies received in payment of said charges shall be received, allocated, and
paid out consistent with the obligations and covenants of the Agency with respect to
Revenue Bonds.
(c) In establishing each of said charges, the Agency shall assume that the quantity of
water (other than Surplus Water) to be delivered from each aqueduct of the
Transmission System shall be the same as the amount of water delivered from said
aqueduct during the twelve months preceding such establishment, or the average
annual amount of water delivered during the preceding 36 months, whichever is less.
If because of drought or other water -supply reduction, state or federal order, or other
similar condition, the Agency anticipates that any such quantities will not be predictive
of future usage, the Agency may use a different amount with the prior approval of the
Water Advisory Committee.
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4.2 Oueration and Maintenance Charge
(a) The Operation and Maintenance Charge shall be a uniform annual charge per acre
foot and shall be paid by all Regular Customers for all water delivered from the
Transmission System.
(b) The aggregate amount of money to be received by the Agency from the Operation
and Maintenance Charge for each Fiscal Year shall be sufficient to produce water sale
revenues to cover the Agency's estimate of its Operation and Maintenance Costs for
such Fiscal Year, to produce water sale revenues as required by Sections 4.13, 4.14, 4.15,
and 4.16, and to produce additional revenues in amounts determined from time to time
by the Water Advisory Committee to pay the Capital Costs of Common Facilities and
Storage Facilities pursuant to subdivision (c) of this section.
(c) All money received by the Agency in payment of the Operation and Maintenance
Charge shall be deposited and paid out as set forth in Section 1.7, and subdivision (b) of
Section 4.1. After making the payments required by Section 1.7, remaining money
received from the Operation and Maintenance Charge may be used to pay the Agency's
operation and maintenance expenses, to make the deposits required by Sections 4.13,
4.14(8), 4.15, and 4.16(a), and to fund a prudent reserve for those expenses. Money
received from the Operation and Maintenance Charge in excess of that necessary for
operation and maintenance expenses, to make the deposits required by Sections 4.13,
4.14(g), 4.15, and 4.16(a), and to maintain a prudent reserve may from time to time be
disbursed as provided in Section 4.5 to pay Capital Costs of Common Facilities and
Storage Facilities. If money received from the Operation and Maintenance Charge is
appropriated for expenditure for Storage Facilities, the funds shall be transferred to the
Storage Facilities capital fund referred to in subsection (c) of Section 4.7. At the time of
the transfer, an amount shall also be transferred to North Marin's account established
pursuant to subsection (c) of Section 4.4, which amount shall bear the same proportion
to the amount transferred to the Storage Facilities capital fund that the total amount
payable by North Marin for the Operation and Maintenance Charge, exclusive of sub -
charges, in the prior Fiscal Year bears to the total operation and maintenance revenue,
exclusive of revenue from sub -charges, received by the Agency from sources other than
North Marin during the prior Fiscal Year.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 37
4.3 Allocation of Cauital Costs to North Marin
(a) The Capital Costs of Remaining Facilities shall be allocated to North Marin in
proportion to the following ratios:
FawLty Ratio
1. Storage Facilities -0-
2. Common Facilities 11.2/90.4
(b) The portions of the Capital Costs of the Additional Facilities, replacement facilities,
and the Potter Valley Project, or the portion thereof that is to be acquired pursuant to
Section 2.4 hereof, shall be allocated to North Marin are as follows:
Facili Ratio
1. 2nd pipeline, generally paralleling
Intertie Aqueduct Reach 1 8.7/55.8
2. 2nd pipeline, generally paralleling
Intertie Aqueduct Reach 2 8.7/55.8
3. 2nd pipeline, generally paralleling
Intertie Aqueduct Reach 3a 8.7/55.8
4. 2nd pipeline, generally paralleling
Intertie Aqueduct Reach 3b and 3c 8.7/42.4
5. 2nd pipeline, generally paralleling
Petaluma Aqueduct from its junction with
Intertie Aqueduct to Kastania Reservoir 5.1/38.8
6. 2nd pipeline, generally paralleling
Sonoma Aqueduct -0-
7. Storage Facilities -0-
8. Russian River Water Production Facilities 8.7/55.8
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
50
9. All Common Facilities except Russian
River Water Production Facilities, but
including the Potter Valley Project 19.9/146.2
4.4 Remainine Facilitv. Additional Facility and Reulacement Facility Cauital Cost
Pavments by North Marin
The portion of the Capital Costs of the facilities allocated to North Marin
pursuant to Section 4.3 shall be recovered by the Agency as follows:
(a) Each time the Agency decides to issue further series or issues of Revenue Bonds to
finance the Capital Costs of constructing or acquiring any Remaining Facilities,
Additional Facilities, or replacement facilities, or acquiring all or part of the Potter
Valley Project, the Agency shall, prior to initiating the procedures for the issuance of
such Revenue Bonds, notify North Marin of the Agency's estimate of the total cost of the
Remaining Facilities, replacement facilities, Additional Facilities, or Potter Valley
Project acquisition proposed to be financed by said series or issues of Revenue Bonds
and of North Marin's portion of the cost allocated in accordance with Section 4.3. North
Marin shall have the right, at its election, to pay North Marin's portion, or any part or
parts thereof, of the cost of such Remaining Facilities, replacement facilities, Additional
Facilities, or Potter Valley Project acquisition in cash, provided, however, that North
Marin shall make its election on or before such date as the Agency shall specify, which
date will give the Agency sufficient time to determine the amount of Revenue Bonds to
be sold, but shall not be earlier than 30 days after said notification. If North Marin
elects to make a cash payment, it shall do so on the date the Revenue Bonds are sold or
on such later date as the Agency may agree upon and which will nevertheless enable
the Agency to meet its obligations for said construction or acquisition. If North Marin
elects to make a cash payment, the amount payable shall exclude interest during
construction and financing charges.
(b) Upon completion of the construction or acquisition referred to in subdivision (a) of
this section, any deficiency in the amount theretofore paid or credited and the actual
amount of North Marin's portion thereof shall be paid by North Marin to the Agency.
(c) All payments made by North Marin pursuant to subdivisions (a) and (b) of this
section shall be deposited in a separate account from which the Agency will make
disbursements only to make payments that otherwise must be made by revenues
received from the North Marin Capital Charge, or for the Agency's expenses in
constructing the Remaining Facilities, Additional Facilities, and replacement facilities or
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 39
51
in acquiring all or part of the Potter Valley Project, up to the proportionate amounts
allocated to North Marin utilizing the ratios contained in Section 4.3. The balance of the
account shall earn interest at the Sonoma County Treasurer's pooled investment fund
rate, which interest income shall be credited to the account on June 30 of each year.
Any surplus funds in the account shall be paid to North Marin within 30 days of receipt
of a written request therefor.
(d) If the Agency decides to levy one or more Aqueduct Capital Charges to produce
revenue to fund, without issuing Revenue Bonds, (a) major replacements of portions or
all of any aqueduct facility pursuant to Section 4.6(e) of this Agreement or (b) capital
improvements to existing Aqueduct Facilities, then North Marin shall pay its portion of
the Capital Costs of such replacements or improvements to the Agency in cash at the
time such Capital Costs are incurred by the Agency. The Capital Costs of major
replacements to the facilities specified in Subsection 4.3(b) shall be allocated to North
Marin based upon the ratios set forth in Subsections 4.3(b). The Capital Costs of major
replacements to the Intertie Aqueduct shall be allocated to North Marin based on the
following cost distribution ratios:
Intertie Aqueduct Reach 1
11.2/70.4
Intertie Aqueduct Reach 2
11.2/68.9
Intertie Aqueduct Reach 3
11.2/58.9
4.5 Pavment of Remainine Facilities. Additional Facilities. Reulacement Facilities.
and Potter Vallev Proiect Cavital Costs
(a) The Capital Costs of Remaining Facilities, Additional Facilities, replacement
facilities and Potter Valley Project, except the portions thereof paid by North Marin
pursuant to Section 4.4, shall be paid by the Agency with cash available pursuant to
Sections 4.2, 4.6, 4.7 and 4.8, subdivision (b) of Section 4.11, and, if the Board of
Directors of the Agency decides to issue Revenue Bonds, with the proceeds from the
sale of Revenue Bonds. The Agency may sell Revenue Bonds to the extent necessary to
pay for said Capital Costs, to establish bond reserves and to pay all expenses incurred
in the issuance of such bonds.
(b) From time to time the Agency shall determine the percentage of the Revenue Bonds
that are attributable to Aqueduct Facilities, Storage Facilities, Common Facilities, and
North Marin's Capital Costs. In making these calculations, the Agency shall not include
in the portions of the Revenue Bonds that are attributable to Aqueduct Facilities,
Storage Facilities and Common Facilities, the portions of the Revenue Bonds, if any, that
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 40
52
are attributable to North Marin's Capital Costs. The Agency shall not include in these
calculations any Capital Costs for which North Marin paid cash pursuant to Section 4.4,
or the costs of any major replacement facilities financed by the imposition of Aqueduct
Facilities Capital Charges without the issuance of Revenue Bonds pursuant to
subdivision (e) of Section 4.6.
4.6 Aoueduct Facilities Capital Charaes
(a) Aqueduct Facilities Capital Charges consist of the Santa Rosa Aqueduct Capital
Sub -Charge, the Sonoma Aqueduct Capital Sub -Charge, and the Petaluma Aqueduct
Capital Sub -Charge. The Aqueduct Facilities Capital Charges shall be annual charges
per acre foot set for each aqueduct as provided in subdivision (b) of this section and
shall be paid by all Regular Customers of the Agency except North Marin for all water
delivered from the Transmission System except Surplus Water. All water delivered to
Santa Rosa and Windsor shall be deemed to be delivered from the Santa Rosa
Aqueduct, all water delivered to Rohnert Park, Cotati, and Petaluma shall be deemed to
be delivered from the Petaluma Aqueduct, and all water delivered to Sonoma and
Valley of the Moon shall be deemed to be delivered from the Sonoma Aqueduct.
(b) The aggregate amount to be received by the Agency from the various Aqueduct
Facilities Capital Charges for each Fiscal Year shall be sufficient to produce water sale
revenues to pay the Agency's Revenue Bond Obligations (after crediting any projected
payments to be made pursuant to subdivision (e) of Section 4.6) for such Fiscal Year
times the percentage for Aqueduct Facilities determined pursuant to subdivision (b) of
Section 4.5, and to produce additional revenues in amounts determined from time to
time by the Water Advisory Committee to pay the Capital Costs of Aqueduct Facilities
pursuant to subdivision (c) of this section. The aggregate amount shall be allocated to
the respective aqueducts based on the following cost distribution ratios applied to the
estimated, or when known, actual Capital Costs for the various Aqueduct Facilities:
Facility Ratio
2nd pipeline, generally paralleling Intertie Aqueduct,
Reach 1, Reach 2 and Reach 3a
Santa Rosa Aqueduct
6.6/55.8
Petaluma Aqueduct
20.9/55.8
Sonoma Aqueduct
6.8/55.8
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 41
53
2nd pipeline, generally paralleling Intertie Aqueduct,
Reach 3b and 3c
Santa Rosa Aqueduct -0-
Petaluma Aqueduct 20.9/42.4
Sonoma Aqueduct -0-
2nd pipeline, generally paralleling Petaluma Aqueduct from its junction with the
Intertie Aqueduct to Kastania Reservoir
Santa Rosa Aqueduct
Petaluma Aqueduct
Sonoma Aqueduct
2nd pipeline, generally paralleling Sonoma Aqueduct
Santa Rosa Aqueduct
Petaluma Aqueduct
Sonoma Aqueduct
-0-
20.9/38.8
-0-
-0-
-0-
6.8/6.8
(These ratios are determined with the allocations in Sections 4.3 and 4.4 of Capital Costs
to North Marin, and with the following allocations to Common Facilities:
2nd pipeline generally paralleling Reaches 1, 2 and 3a of
the Intertie Aqueduct: 12.8/55.8
2nd pipeline generally paralleling Reach 3b and 3c of the Intertie Aqueduct:
12.8/42.4
2nd pipeline generally paralleling the Petaluma Aqueduct from its junction with
the Intertie Aqueduct to Kastania Reservoir: 12.8/38.8)
(c) All money received by the Agency in payment of Aqueduct Facilities Capital
Charges shall be deposited and paid out as set forth in Section 1.7 and subdivision (b) of
Section 4.1. After making the payments required to satisfy the Agency obligations and
covenants with respect to the Revenue Bonds used to finance the Capital Cost of the
Aqueduct Facilities, remaining money received from the Aqueduct Facilities Capital
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
54
42
Charges may be disbursed from time to time to pay pursuant to subdivision (a) of
Section 4.5 the portions of the Capital Costs of the Remaining Facilities and Additional
Facilities which are also Aqueduct Facilities that are not allocated to North Marin in
Section 4.3.
(d) If at the end of any Fiscal Year the balance in the Aqueduct Facilities Capital Charge
fund is insufficient to meet said Revenue Bond Obligations for the ensuing Fiscal Year
attributed to the Aqueduct Facilities, Agency will determine the deficits in the payment
received by it for deliveries from the Santa Rosa, Petaluma, and Sonoma Aqueducts
respectively. Before August 1 of the following Fiscal Year:
(1) Additional charges for water delivered in amounts equal to the deficits with
respect to the Santa Rosa Aqueduct shall be paid by Santa Rosa and Windsor in the
following manner: The share of such additional charge to be paid by each of said Water
Contractors shall be proportionate to the difference between the base share component
and the sum of the Aqueduct Facilities Capital Charge payments made by said Water
Contractor during said Fiscal Year. The base share component allocated to a Water
Contractor is the number obtained by multiplying the said total principal and interest
payment for said Fiscal Year by said Water Contractor's average daily rate of flow
during any month Entitlement Limit set forth in subdivision (a) of Section 3.1 and by
dividing by the total of said average daily rate of flow during any month Entitlement
Limits for all Water Contractors being served from the Santa Rosa Aqueduct.
(2) Additional charges for water delivered in an amount equal to the deficit with
respect to the Sonoma Aqueduct shall be paid by Sonoma and Valley of the Moon in the
following manner: The share of such additional charge to be paid by each of said
Water Contractors shall be proportionate to the difference between the base share
component and the sum of the Aqueduct Facilities Capital Charge payments made by
said Water Contractor during said Fiscal Year. The base share component allocated to a
Water Contractor is the number obtained by multiplying the said total principal and
interest payment for said Fiscal Year by said Water Contractor's average daily rate of
flow during any month Entitlement Limit set forth in subdivision (a) of Section 3.1 and
by dividing by the total of said average daily rate of flow during any month Entitlement
Limits for all Water Contractors being served from the Sonoma Aqueduct.
(3) Additional charges for water delivered in an amount equal to the deficit with
respect to the Petaluma Aqueduct shall be paid by Rohnert Park, Cotati and Petaluma
in the following manner excluding North Marin and Marin Municipal: The share of
such additional charge to be paid by each of said Water Contractors shall be
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 43
55
proportionate to the difference between the base share component and the sum of the
Aqueduct Facilities Capital Charge payments made by said Water Contractor during
said Fiscal Year. The base share component allocated to a Water Contractor is the
number obtained by multiplying said total principal and interest payment for said
Fiscal Year by said Water Contractor's average daily rate of flow during any month
Entitlement Limit set forth in subdivision (a) of Section 3.1 and by dividing by the total
of all said average daily rate of flow during any month Entitlement Limits for all Water
Contractors being served from the Petaluma Aqueduct.
(e) If the Agency decides to issue a new series or issue of Revenue Bonds to finance
major replacements of portions or all of any aqueduct facility or if, with the approval of
the Water Advisory Committee, the Agency decides to levy one or more Aqueduct
Facilities Capital Charges to produce revenue to finance major replacements of portions
or all of any aqueduct facility, then the aggregate amount to be received by the Agency
from the respective Aqueduct Facilities Capital Charges for each Fiscal Year shall be
sufficient to produce water sales revenues, in addition to those required by subdivision
(b) of this section, in amounts determined from time to time by the Water Advisory
Committee to pay the Capital Costs of such major replacements. The Capital Costs of
major replacements to the facilities specified in Subsection 4.6(b) above shall be
allocated based upon the ratios set forth in Subsection 4.6(b). The Capital Costs of
major replacements to the Intertie Aqueduct shall be allocated to the respective
aqueducts based on the following cost distribution ratios:
Intertie Aqueduct Reach 1:
Santa Rosa Aqueduct
Petaluma Aqueduct
Sonoma Aqueduct
Intertie Aqueduct Reach 2:
Santa Rosa Aqueduct
Petaluma Aqueduct
Sonoma Aqueduct
31.5/70.4
19.7/70.4
8.0/70.4
30.0/68.9
19.7/68.9
8.0/68.9
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
56
44
Intertie Aqueduct Reach 3:
Santa Rosa Aqueduct
20.0/58.9
Petaluma Aqueduct
19.7/58.9
Sonoma Aqueduct
8.0/58.9
4.7 Storaee Facilities Capital Charee
(a) The Storage Facilities Capital Charge shall be a uniform annual charge per acre foot
and shall be paid by all Regular Customers of the Agency for all water delivered from
the Transmission System except Surplus Water, provided however, that North Marin
shall not be obligated to pay any Storage Facilities Capital Charge if North Marin
maintains potable storage reservoirs within its system with a total capacity equal to or
greater than one and one-half times the average daily volume of water delivered by the
Agency to North Marin during the previous July with the highest water delivery to
North Marin.
(b) The aggregate amount to be received by the Agency from the Storage Facilities
Capital Charge for each Fiscal Year shall be sufficient to produce water sale revenues to
pay the Agency's Revenue Bond Obligations for such Fiscal Year (after crediting any
projected payments to be made pursuant to subdivision (e) of Section 4.6) times the
percentage for Storage Facilities determined pursuant to subdivision (b) of Section 4.5,
and to produce additional revenues in amounts determined from time to time by the
Water Advisory Committee to pay the Capital Costs of Storage Facilities pursuant to
subdivision (c) of this section.
(c) All money received by the Agency in payment of the Storage Facilities Capital
Charge shall be deposited and paid out as set forth in Section 1.7, and subdivision (b) of
Section 4.1. After making the payments from the Storage Facilities capital fund
required by Section 1.7, remaining money in said fund may be disbursed from time to
time to pay Capital Costs of Remaining Facilities, Additional Facilities and replacement
facilities that also are Storage Facilities, pursuant to Section 4.5.
(d) If at the end of any Fiscal Year the balance in the Storage Facilities capital fund is
insufficient to meet said Revenue Bond Obligations for such Fiscal Year attributed to
the Storage Facilities, each Water Contractor except North Marin will, before August 1,
pay to the Agency an additional charge per acre foot for all water delivered to it during
the Fiscal Year wluch additional charge when multiplied by all Acre Feet sold to
Regular Customers except North Marin shall be equal to said deficit.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 45
57
4.8 Common Facilities Cauital Charee
(a) The Common Facilities Capital Charge shall be a uniform annual charge per acre
foot and shall be paid by all Regular Customers of the Agency except North Marin for
all water delivered from the Transmission System except Surplus Water.
(b) The aggregate amount to be received by the Agency from the Common Facilities
Capital Charge for each Fiscal Year shall be sufficient to produce water sale revenues to
pay the Agency's Revenue Bond Obligations for such Fiscal Year (after crediting any
projected payments to be made pursuant to subdivision (e) of Section 4.6) times the
percentage for Common Facilities determined pursuant to subdivision (b) of Section 4.5.
(c) All money received by the Agency in payment of the Common Facilities Capital
Charge shall be deposited and paid out as set forth in Section 1.7 and subdivision (b) of
Section 4.1. After making the payments required by Section 1.7, additional money
received from the Common Facilities Capital Charge may be disbursed from time to
time pursuant to subdivision (a) of Section 4.5 to pay the portions of the Capital Costs of
Remaining Facilities, Additional Facilities, replacement facilities and the Potter Valley
Project that also are Common Facilities and that are not allocated to North Marin in
Section 4.3, and to satisfy the requirements of Section 6.04 of Ordinance No. 1 if the
amount of money received from the charge established by Section 4.2 is insufficient in
any Fiscal Year.
(d) If at the end of any Fiscal Year the balance in the Common Facilities capital fund is
insufficient to meet the Agency's Revenue Bond Obligations for such Fiscal Year on the
Revenue Bonds attributed to Common Facilities, each Water Contractor except North
Marin shall, before August 1, pay to the Agency an additional charge per acre foot for
water delivered to it during the Fiscal Year, which additional charge when multiplied
by all Acre Feet sold to the Water Contractors shall be equal to said deficit.
4.9 North Marin Cauital Charee
(a) The North Marin Capital Charge shall be a uniform annual charge per acre foot and
shall be paid by North Marin for all water delivered to it from the Transmission System
except Surplus Water.
(b) The aggregate amount to be received by the Agency from the North Marin Capital
Charge for each Fiscal Year shall be sufficient to produce water sale revenues to pay the
Agency's Revenue Bond Obligations for such Fiscal Year (after crediting any projected
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
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46
payments to be made pursuant to subdivision (e) of Section 4.6) times the percentage
for North Marin's Capital Costs determined pursuant to subdivision (b) of Section 4.5.
(c) All money received by the Agency in payment of North Marin Capital Charge shall
be deposited and paid out as set forth in Section 1.7 and subdivision (b) of Section 4.1.
After making any payments required by Section 1.7, additional money received from
the North Marin Capital Charge shall be deposited in the separate account described in
subdivision (c) of Section 4.4.
(d) If at the end of any Fiscal Year the balance in the separate fund described in
subdivision (c) of Section 4.4 is insufficient to meet the portion of the Agency's Revenue
Bond Obligations for such Fiscal Year on the Revenue Bonds attributed to North
Marin's Capital Costs, North Marin will, before August 1, pay to the Agency an
additional charge per acre foot for water delivered to it during the Fiscal Year, which
additional charge when multiplied by all Acre Feet sold to North Marin shall be equal
to said deficit.
(e) If any money received pursuant to the Common Facilities Capital Charge is used
pursuant to subdivision (c) of Section 4.8 to satisfy the requirements of Section 6.04 of
Ordinance No. 1, then the North Marin Capital Charge shall be increased by the
appropriate amount so that North Marin pays its appropriate share of such
requirements.
(f) If North Marin has not maintained storage reservoirs within its system with at least
the capacity required by subdivision (a) of Section 4.7, and if, as a result, the Agency
constructs additional storage, then the North Marin Capital Charge shall be increased
by an amount sufficient to pay for the Capital Costs or Revenue Bonds costs of such
additional storage.
4.10 Power: Revenues
All power from the Warm Springs Hydroelectric Project and the Potter Valley
Project shall be applied to the operation of the Transmission System or shall be sold, as
the Agency shall from time to time determine. All revenues arising from the operation
of these projects shall be treated the same as money received from the Operation and
Maintenance Charge and shall be deposited and paid out as set forth in Section 1.7 and
subdivision (b) of Section 4.1.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 47
59
4.11 Pavment for Surolus Water and Water Sold To Marin Municival
(a) The Agency will sell Surplus Water at a price per acre foot of not less than 120% of
the then current Operation and Maintenance Charge. All revenue from the sale of
Surplus Water shall be treated the same as money received from the Operation and
Maintenance Charge and shall be deposited and paid out as set forth in Section 1.7 and
subdivision (b) of Section 4.1.
(b) Water delivered to Marin Municipal shall be sold at a per acre foot price that shall
not be less than the sum of the Operation and Maintenance Charge determined
pursuant to Section 4.2, the Russian River Conservation and Russian River Projects
Charges determined pursuant to Section 4.18, and a capital charge. For the Third
Amended Offpeak Water Supply Agreement dated January 25, 1996, or any
amendment to that agreement that has been approved by the Water Advisory
Committee, the capital charge shall be the total of all charges paid to Agency by Marin
Municipal minus the sum of the Operation and Maintenance Charge and the Russian
River Conservation and Russian River Projects Charges. For the Amended Agreement
For The Sale of Water Between the Sonoma County Water Agency and Marin Municipal
Water District dated January 25, 1996, or any amendment to that agreement that has
been approved by the Water Advisory Committee, the capital charge shall be the charge
established by paragraph b. of Section 10 of that agreement. Any subsequent
agreement between the Agency and Marin Municipal for the sale of water to be
transported through the Transmission System pursuant to Section 3.12 shall specify the
capital charge that applies to this section of this Agreement. All money received by the
Agency from the Operation and Maintenance Charge on water sold to Marin Municipal
shall be credited to the operation and maintenance fund. All money received by the
Agency from the Russian River Conservation and Russian River Projects Charges on
water sold to Marin Municipal shall be credited to the Russian River Projects Fund and
shall be used only for the purposes set forth in subsection (jj) of Section 1.2. The balance
of the money received by the Agency from water sold to Marin Municipal shall be
deposited and paid out as set forth in Section 1.7, and subdivision (b) of Section 4.1.
After making the payments required by Section 1.7 and Ordinance No. 1, additional
money received may be disbursed from time to time to pay the Capital Costs of Storage
Facilities or Common Facilities authorized to be constructed in Section 2.2, provided,
however, that only the money received from $31.50 per acre foot of the capital charge
(which rate is based on the Agency's past and projected future capital investment in
Storage Facilities) may be used to pay the Capital Costs of new Storage Facilities.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 48
60
4.12 Minimum Pavments by Other Aeencv Customers
Anything herein to the contrary notwithstanding, the Agency will not sell any
water to be delivered through the Transmission System (other than Surplus Water) to
any Other Agency Customer at a total price per acre foot that is less than 120% of the
highest price per acre foot then currently being paid by any Water Contractor;
provided, however, that this limitation shall not apply to water sold to Forestville. The
respective components of said price shall be credited to the appropriate fund referred to
in subdivision (a) of Section 4.1 and the excess shall be credited to the aqueduct capital
fund for the aqueduct from which service is taken. Forestville's charge shall be the
same as the total charge for Water Contractors for water delivered from the Santa Rosa
Aqueduct, except that during the first ten (10) full Fiscal Years following execution of
this Agreement, Forestville shall not pay the Santa Rosa Aqueduct Capital Sub -Charge.
4.13 Overations and Maintenance Charee — Water Manaeement Plannine
The Agency shall calculate and collect as a part of the Operations and
Maintenance Charge a Water Management Planning Sub -Charge. The aggregate
amount of money to be received by the Agency from the Water Management Planning
Sub -Charge in each Fiscal Year shall be sufficient to produce water sale revenues to
cover the Agency's reasonable estimate of its costs for such Fiscal Year to carry out the
provisions of Section 2.7. All money received by the Agency in payment of the Water
Management Planning Sub -Charge shall be deposited by the Agency into a Water
Management Planning Fund and used to pay the Agency's costs in carrying out the
provisions of Section 2.7.
4.14 Overations and Maintenance Charee — Watershed Plannine and Restoration
(a) The Agency shall calculate and collect as a part of the Operations and Maintenance
Charge a Watershed Planning and Restoration Sub -Charge.
(b) The aggregate amount of money to be received by the Agency from the Watershed
Planning and Restoration Sub -Charge in each Fiscal Year shall be sufficient to produce
water sale revenues to cover the Agency's reasonable estimate of costs for such Fiscal
Year (net of funding provided by other sources, including the Russian River Projects
Fund and the Agency's General Fund) of carrying out: (1) fishery mitigation,
enhancement, and environmental compliance activities and projects undertaken by the
Agency, including the Agency's costs of complying with the Endangered Species Act
or any other applicable federal, state, or local environmental statute or regulation, if
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
61
M,
such activities, projects, and costs are reasonably necessary, to enable the Agency to
provide water to Regular Customers under this Agreement, and (2) actions, studies or
projects authorized pursuant to Section 2.8 of this Agreement that are not covered by
other funding sources and contributions. The Agency shall not use proceeds from the
Watershed Planning and Restoration Sub -Charge to pay for the capital cost or operation
and maintenance cost of recreation facilities.
(c) Notwithstanding Subsection 4.14(b) above, during the first five full Fiscal Years
following the effective date of this Agreement, the Watershed Planning and Restoration
Sub -Charge shall not exceed $35.00 per acre-foot.
(d) To assist in determining the appropriate share of fishery mitigation, enhancement,
and environmental compliance activities and projects undertaken by the Agency to be
paid by the Water Contractors under the Watershed Planning and Restoration Sub -
Charge, the Agency shall, from time to time as reasonably necessary, prepare an
analysis that (1) identifies planned fishery mitigation, enhancement, and environmental
compliance activities and projects, (2) identifies the costs and beneficiaries of such
activities and projects, (3) proposes an allocation of costs among all benefitted parties,
and (4) recommends sources of funding for such activities and projects.
(e) The Agency shall use its best efforts to amend its existing contracts with Russian
River Customers to require Russian River Customers to pay the Watershed Planning
and Restoration Sub -Charge or fund or implement watershed planning and restoration
projects at a level equivalent to that funded by the Agency under this Agreement.
(f) In addition to the Watershed Planning and Restoration Sub -Charge, the Agency may
assess against the Water Contractors such supplemental charges as are authorized and
agreed to under Section 2.8(c). Supplemental charges under this subsection shall not be
included in determining the minimum payments by Other Agency Customers pursuant
to Section 4.12 or by Windsor pursuant to Section 4.17.
(g) All money received by the Agency in payment of the Watershed Planning and
Restoration Sub -Charge shall be deposited by the Agency into a Watershed Planning
and Restoration Fund and used for the purposes set forth in Section 4.14(b). All money
received by the Agency in payment of any supplemental charges pursuant to Section
4.14(d) shall be deposited into separate account(s) and used to pay the costs of projects
authorized and agreed to pursuant to Section 2.8(c).
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 50
62
4.15 Operations and Maintenance Charee — Recvcled Water and Local Supply
The Agency shall calculate and collect as a part of the Operations and
Maintenance Charge a Recycled Water Sub -Charge. The Recycled Water Sub -Charge
shall be a uniform charge per acre-foot and shall be paid by all Regular Customers and
Russian River Customers for all water taken from the Transmission System or under the
Agency's water rights. The aggregate amount of money to be received by the Agency
from the Recycled Water Sub -Charge in each Fiscal Year shall be sufficient to produce
water sale revenues to cover the Agency's estimate of its costs for such Fiscal Year to
carry out the provisions of Section 2.6; provided, however, that during the first five full
Fiscal Years following the effective date of this Agreement, the Recycled Water Sub -
Charge shall not exceed $35.00 per acre-foot. The Agency shall use its best efforts to
amend its existing contracts with Russian River Customers to require Russian River
Customers to pay the Recycled Water Sub -Charge. Monies collected from the Recycled
Water Sub -Charge shall be deposited in a Recycled Water Fund created by the Agency.
The Recycled Water Fund shall be used only to pay or partially pay for the costs of
Recycled Water Projects or the acquisition of Recycled Water or the rights thereto
pursuant to Section 2.6 of this Agreement. Notwithstanding the foregoing sentence,
revenue from the Recycled Water Sub -Charge collected by the Agency from Windsor
pursuant to Section 4.17(b) shall be placed in a separate account and made available to
Windsor for funding Windsor's local or regional Recycled Water Projects.
4.16 Operations and Maintenance Charge — Water Conservation
(a) The Agency shall calculate and collect as a part of the Operations and
Maintenance Charge a Water Conservation Sub -Charge. Monies collected from the
Water Conservation Sub -Charge shall be deposited in a Water Conservation Fund
created by the Agency. The Water Conservation Fund shall be used only to pay or
partially pay for the cost of Water Conservation Projects. The aggregate amount of
money to be received by the Agency from the Water Conservation Sub -Charge for each
Fiscal Year shall be sufficient to cover the Agency's estimate of the total cost of all Water
Conservation Projects for such Fiscal Year. From and after July 1, 1998, a total of fifteen
million dollars ($15,000,000) shall be expended to implement Water Conservation
Projects pursuant to the Water Conservation Plan dated June 29, 1998. The $15,000,000
shall be allocated as follows: Cotati 2.10%, Petaluma 18.53%, Rohnert Park 10.37%,
Santa Rosa 40.25%, Sonoma 4.15%, Forestville 0.66%, North Marin 19.50%, Valley of the
Moon 4.43%. Until the total of $15,000,000 has been expended as set forth above, the
Agency shall not fund Water Conservation Projects for or on behalf of Windsor. The
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 51
G3
Water Conservation Projects for which said $15,000,000 is to be expended, have been
approved by the Water Advisory Committee.
(b) The Agency shall use its best efforts to amend its existing contracts with Russian
River Customers to require Russian River Customers to fund or implement Water
Conservation Projects at a level equivalent to that funded by the Agency under this
Agreement. Notwithstanding the penultimate sentence in Section 4.16(a), revenue
from the Water Conservation Sub -Charge collected by the Agency from Windsor
pursuant to Section 4.17(b) shall be placed in a separate account and made available to
Windsor for funding Windsor's Water Conservation Projects.
4.17 Pavments by Town of Windsor
(a) Notwithstanding anything in this Agreement to the contrary, for the first fifteen (15)
full Fiscal Years following execution of this Agreement, the amount payable by
Windsor for water delivered by the Agency through the Transmission System shall be
120% of the highest price per acre foot then currently being paid by any Water
Contractor receiving water from the Santa Rosa Aqueduct. The respective components
of said price shall be credited to the appropriate fund referred to in subdivision (a) of
Section 4.1 and the excess shall be credited to the aqueduct capital fund for the
aqueduct from which service is taken. Beginning with the sixteenth (16th) full Fiscal
Year following execution of this Agreement and thereafter, all water delivered to
Windsor by Agency through the Transmission System will be deemed delivered from
the Santa Rosa Aqueduct and the amount payable by Windsor for said water
determined accordingly.
(b) For all water diverted directly by Windsor from the Russian River using its own
facilities, whether under the Agency's water rights or Windsor's water rights, Windsor
shall pay only the charges set forth in the Agreement for Sale of Water between the
Agency and Windsor dated January 8,1991, as amended, including the sub -charges set
forth in Sections 4.13, 4.14, 4.15, and 4.16.
4.18 Pavment of Russian River Conservation Char_ee and Russian River Proiects
Charge by North Marin
In addition to the other charges provided for in this Part, North Marin shall pay
the following additional per -acre-foot charges:
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
64
52
(a) A Russian River Conservation Charge shall be paid in lieu of the property taxes
levied by the Agency on property in Sonoma County, to pay the capital, Operation and
Maintenance Costs associated with the Warm Springs Dam Project. The Russian River
Conservation Charge shall be a charge per acre foot of water delivered to North Marin
hereunder, except Surplus Water. The charge shall be determined annually on or before
April 30 preceding each Fiscal Year and shall be payable by North Marin during the
ensuing Fiscal Year. The Russian River Conservation Charge shall be determined by
multiplying the tax rate levied by the Agency in the then current Fiscal Year to pay the
costs associated with the Warm Springs Dam Project times the assessed value of
secured and unsecured property situated within Cotati, Petaluma, Rohnert Park, Santa
Rosa, Sonoma, Forestville and Valley of the Moon and dividing the product by the total
number of Acre Feet of water delivered to Cotati, Petaluma, Rohnert Park, Santa Rosa,
Sonoma, Forestville and Valley of the Moon pursuant to Section 3.1 and 3.3 during the
twelve month period ending on March 31. All money received by the Agency from the
Russian River Conservation Charge on water sold to North Marin shall be credited to
the Russian River Projects Fund and shall be used only for the purposes set forth in
subsection (jj) of Section 1.2.
(b) A Russian River Projects Charge shall be paid in heu of the property taxes levied on
property in Sonoma County and other Agency general fund monies which are
transferred to the Agency's Russian River Projects Fund and expended for the purposes
enumerated in subsection (jj) of Section 1.2. The Russian River Projects Charge shall be
effective on the first day of the first month following the effective date of this
Agreement and shall thereafter be determined annually on or before April 30 preceding
each Fiscal Year and shall be payable by North Marin during the ensuing Fiscal Year.
The Russian River Projects Charge shall be determined by dividing the total amount of
Agency monies expended from the Agency's Russian River Projects Fund in the
preceding ten Fiscal Years, exclusive of the funds contributed to the Fund by North
Marin and Marin Municipal Water District, and interest earnings attributable to funds
contributed by North Marin and Marin Municipal Water District, by the sum of the
total acre-feet of water delivered by the Agency to Cotati, Petaluma, Rohnert Park,
Santa Rosa, Sonoma, Forestville and Valley of the Moon pursuant to Sections 3.1 and 3.3
of this Agreement during the preceding ten Fiscal Years and multiplying the quotient
by the ratio that the assessed value of secured and unsecured property situated within
Cotati, Petaluma, Rohnert Park, Santa Rosa, Sonoma, Forestville and Valley of the
Moon bears to the assessed value of all secured and unsecured property within Sonoma
County, provided, however, in no event shall the Russian River Projects Charge exceed
$20.00 per acre-foot. The Agency shall keep proper books, records and accounts in
which complete and accurate entries shall be made of all Agency general fund monies
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 53
M
transferred to the Agency's Russian River Projects Fund and all expenditures made
from the fund for the purposes set forth in subsection (jj) of Section 1.2. The Agency
shall maintain a separate account within the Russian River Projects Fund for Russian
River Projects Charges paid by North Marin and Marin Municipal Water District.
Monies expended from the Russian River Projects Fund shall be deemed to have been
expended from the North Marin and Marin Municipal Water District account in the
proportion that the balance of that account bears to the total Russian River Projects
Fund balance at the end of the Fiscal Year quarter preceding the expenditure. All
money received by the Agency from the Russian River Projects Charge on water sold to
North Marin shall be credited to the Russian River Projects Fund and shall be used only
for the purposes set forth in subsection (jj) of Section 1.2.
4.19 Billine and Time of Pavment
Except as otherwise expressly provided herein, all charges payable to the Agency
shall be billed each month and paid within 30 days after receipt of bill.
Notwithstanding any dispute between the Agency and a Water Contractor, such Water
Contractor will pay all its bills when due and shall not withhold all or any part of any
payment pending the final resolution of such dispute. If the resolution of the dispute
results in a refund to the Water Contractor, the Agency shall make such refund plus any
interest earned by investment of the disputed funds as promptly as it is able to do so,
consistent with its meeting its Revenue Bond Obligations.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 54
We
PART 5 - Water Advisory Committee/Technical Advisory Committee
5.1 Purpose
(a) There is hereby created the Water Advisory Committee and the Techrdcal
Advisory Committee.
(b) The purpose of the Water Advisory Committee is to perform the functions
specified herein and to review all proposals set forth by the Agency which involve a
significant capital outlay for the Transmission System or any other project which would
significantly change the level of service or add significantly to the operations and
maintenance expense of the Transmission System or other expense to be borne by the
Water Contractors. The purpose of the Technical Advisory Committee is to advise the
Water Advisory Committee.
5.2 Powers
Except as provided herein to the contrary, the power of the Water Advisory
Committee is limited to that of collective spokesperson for the Water Contractors and
shall be advisory only in nature. Nothing shall preclude a Water Contractor from
setting forth a view contrary to that of the majority of the Committee. No action of the
Committee limits or impairs any right or power of any Water Contractor. The
Technical Advisory Committee shall have no powers other than the power to make
recommendations to the Water Advisory Committee.
5.3 Composition and Voting
(a) The Water Advisory Committee shall be composed of one representative and
one alternate who shall serve in absence of the representative, to be selected by each
Water Contractor. The representative and alternate shall be elected members of and
appointed by the governing board of the Water Contractor. The Water Advisory
Committee shall generally meet quarterly as it determines necessary, which shall
include at least one meeting per calendar year with a liaison from the Board of Directors
of the Agency who is a member of and appointed by said Board. Each Water
Contractor's representative will be allocated a weighted vote proportional to the
average daily rate of flow during any month Entitlement Limit from the Transmission
System applicable to such Water Contractor. An affirmative vote of said Committee
shall be recorded and require both of the following: (1) the affirmative vote of more
than fifty percent (50%) of the total weighted votes as defined above; and (2) the
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 55
67
affirmative vote of at least five (5) representatives. If the Water Advisory Committee
does not affirmatively vote to approve any matter before it for a decision, then the
matter shall be deemed not approved. A representative or alternate appointed by the
Board of Directors of the Marin Municipal Water District, each of which must be
members of said board, may attend and participate, debate, express opinions and
present information at meetings of the Water Advisory Committee but shall not have a
vote. If the approval, determination, or consent of the Water Advisory Committee is
authorized or required on any non -advisory matter pursuant to this Agreement, the
vote of the Water Advisory Committee on such matter shall be evidenced by a writing,
executed by the chairperson or secretary, evidencing (a) the vote of each member, (b)
whether the vote of the Committee was in the affirmative, and (c) if the vote was in the
affirmative, a description of the approval, determination, or consent given by the
Committee.
(b) The Technical Advisory Committee shall be composed of one non -elected
representative selected by each Water Contractor. The Technical Advisory Committee
shall generally meet monthly as it determines necessary. Each Water Contractor's
representative will be allocated the same weighted vote applicable to that Water
Contractor under Section 5.3(a). An affirmative vote of said Committee shall require
both of the following: (1) the affirmative vote of more than fifty percent (50%) of the
total weighted votes as defined above; and (2) the affirmative vote of at least five (5)
representatives. A representative or alternate appointed by the Marin Municipal Water
District Board of Directors may attend and participate, debate, express opinions and
present information at meetings of the Water Advisory Committee but shall not have a
vote. The Water Advisory Committee may require the Technical Advisory Committee
to create subcommittees and ad hoc committees. Persons serving on such committees
shall be elected officials, staff or contract staff of the Water Contractor they represent.
(c) The Technical Advisory Committee shall create a standing Water Conservation
Subcommittee. The Water Conservation Subcommittee shall make recommendations to
the Technical Advisory Committee with respect to any determination of the Water
Advisory Committee contemplated under Section 1.12 of this Agreement, and shall
perform other such duties with respect to Water Conservation Projects as may be
requested by the Technical Advisory Committee.
(d) Once every two years, on a date selected by the Water Advisory Committee, the
Water Advisory Committee shall elect from among its members two officers: a
chairperson and vice chairperson. Officers shall serve for the ensuing two Fiscal Years.
An officer may serve a second or subsequent consecutive two-year terms only if each
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
68
56
such term is approved by a unanimous vote of the Water Contractors. Furthermore, an
officer can be removed and replaced at any meeting called by five Water Advisory
Committee members provided all Water Advisory Committee members are notified in
writing a minimum of five working days prior to the meeting. In the event an officer
either: (1) loses his/her status as a duly elected local official serving on the governing
board of the Water Contractor they represent or (2) loses his/her appointment as
representative of the Water Contractor on the Water Advisory Committee, the officer
position held shall be vacated. The Water Advisory Committee shall elect a new officer
who shall fill out the balance of the vacated term. Voting for officers shall be as
provided in subsection (a) of this section.
(e) By November of each year, subject to the limitations in Section 4.16(a), the Water
Advisory Committee shall review proposed Water Conservation Projects, Recycled
Water Projects, and Local Supply Projects and approve and report to the Agency those
projects that are to receive funding in the next or later fiscal years. It is the intent of the
parties to this Agreement that over the term of the Agreement, Regular Customers shall
receive funding support for Water Conservation Projects, Recycled Water Projects, and
Local Supply Projects in proportion to the amounts paid by Regular Customers under
Sections 4.15 and 4.16.
(f) Commencing with the first Fiscal Year following the effective date of this
Agreement, the Agency shall include in its operating budget the amount of $30,000
which the Agency shall expend as the Water Advisory Committee directs for purposes
associated with the orderly implementation and operation of the provisions of this
Agreement and other associated purposes deemed appropriate by the Committee. The
annual amount may be fixed at a higher or lower amount in subsequent Fiscal Years as
determined by vote of the Committee pursuant to subsection (a) of this section. The
Water Advisory Committee shall decide which, if any, consultant or consultants, firm
or firms shall be hired to carry out this work.
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
69
57
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
SONOMA COUNTY WATER AGENCY
By: Date:
ATTEST:
CITY OF COTATI
By: Date:
Mayor
ATTEST:
Date:
City Clerk
CITY OF PETALUMA
By: Date:
Mayor
04611619
City Clerk
C1yY"Sla[,*e741a145 09.100
By: Date:
Mayor
RESTRUCTURED AGREEMENT FOR WATER SUPPLY 58
70
I.1 Ii m
City Clerk
CITY OF SANTA ROSA
By: Date:
Mayor
ryw1l:619
City Clerk
CITY OF SONOMA
By: Date:
Mayor
ATTEST:
City Clerk
FORESTVILLE COUNTY WATER
DISTRICT Date:
By:
President
ATTEST:
Secretary
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
71
59
NORTH MARIN WATER
DISTRICT Date:
im
President
ATTEST:
TOWN OF WINDSOR Date:
Mayor
ATTEST:
Town Clerk
Secretary
VALLEY OF THE MOON WATER
DISTRICT Date:
im
President
Secretary
RESTRUCTURED AGREEMENT FOR WATER SUPPLY
72
Attachment B — Proposed Changes to Section 2.4
Potter Valley Project
73
JONWRM 1/29/06
Changes Proposed to "Section 2.4 Potter Valley Project" shown relative to 6-25-05
draft (last draft) of the proposed Restructured Water Supply Agreement:
2.4 Potter Vallev Proiect
kALAll or part of the Potter Valley Project may be acquired upon a
determination by the Board of Directors of the Agency that such acquisition is
necessary to insure the Agency's continued ability to make the water deliveries
authorized by this Agreement and maintain fislhprips and other incidental
benefits to the Russian River basin. provided, however, that no part nor all of the
Potter Valley Project shall be acquired without the Fri3r agprqval-efaffirmabye
vote of at least six (61 representatives of the Water Contractors on the Water
Advisory Committee representing at least two-thirds of the total weighted votes
as calculated Pursuant to Section 5.3(x1. The Agency shall not be liable to any of
its ^ustemcr;C>>stnmprs for any damage resulting from any Agency decision
regarding the acquisition or non -acquisition of any part or all of the Potter Valley
Project.
Ib) The Aeencv shall commence a umcess uyon the effective date of this
Agreement to evaluate the water suuoly and fisheries benefits provided by the
Potter Valley Proiect within the Russian River watershed. the economic and
2perational feasibility of acquiring the Potter Valley Project. and whether
alternative actions could reduce the need for the Aeencv to acotuire the Potter
Valley Proiect Alternative actions to be evaluated may include the increased use
of recycled water to reduce agricultural and other diversions from the Russian
River and its trihntarip.- flip mndifiratinn of instream flow reauirements in the
Russian Rivpr- and the rnmplption of state and/or federal recovery plans for
salmnnid snprips listpfi as thrpatpnpd or pndanverpd in the Russian River
watershed. The cost of such evaluations shall be paid from Watershed Planning_
"nn Restoration Sub -Charge funds available putrsnant to subgertion 4.14
however. the AQpnry shall nsp its hpsf pffnrfs ta obtain the agreement of other
interested parties who divert water from the Russian River or its tributaries
in 1 u in municipal and agricultural divertersl to nav for a uortion of such costs
and to participate in the implementation of such alternative actions. Before
acouirine the Potter Valley Project, Aeencv shall conduct an environmental
analysis of the acquisition Dursuant to CEOA. which analysis may include an
74
evaluation of alternative Flow regimes from the Potter Vallev Proiect into the
Russian River and the Eel River.
cl U on determination by Agency that alternative actions could_roduce the need
for the Agencv to acc wire the Potter Vallev Proiect. the Agencv and the Water
Contractors shall engage in a cooperative process to implement said other
actions.
Also Need to conform Section 4.14(b) as shown below:
Section 4.14(b): The aggregate amount of money to be received by the Agency
from the Watershed Planning and Restoration Sub -Charge in each Fiscal Year
shall be sufficient to produce water sale revenues to cover the Agency's
reasonable estimate of costs for such Fiscal Year (net of funding provided by
other sources, including the Russian River Projects Fund and the Agency's
General Fund) of carrying out: (1) fishery mitigation, enhancement, and
environmental compliance activities and projects undertaken by the Agency,
including the Agency's costs of complying with the Endangered Species Act or
any other applicable federal, state, or local environmental statute or regulation, if
such activities, projects, and costs are reasonably necessary, to enable the Agency
to provide water to Regular Customers under this Agreement; an4(21 the
evaluations undertaken pursuant to Section 2.4(b): and (3) actions, studies or
projects authorized pursuant to Section 2.8 of this Agreement that are not
covered by other funding sources and contributions. The Agency shall not use
proceeds from the Watershed Planning and Restoration Sub -Charge to pay for
the capital cost or operation and maintenance cost of recreation facilities.
75