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HomeMy WebLinkAboutStaff Report 4.F 05/07/2012 74g-entoltv I te,vw#4. F 4( 4 285$ L DATE: May 7, 2012 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Dan St. John,•,F'.ASCE.-Director, Public Worksand Utilities Rem Scherzinger,'P.E. — Utilities Manager SUBJECT: Resolution Authorizing,the City Manager to Execute an Agreement for Use of Recycled Water with Jackson Family Tnvestments III and to Execute Substantially Similar Agreements with Other Secondary Treated Wastewater Recycle Customers as Needed RECOMMENDATION: It is,recommended that theCity Council adopt the attached Resolution Authorizing the City Manager to Execute an Agreement for Use of Recycled Water with Jackson Family Investments Ill and to°.execute substantially similar agreements with other secondary treated wastewater recycle customer as they request service. BACKGROUND: The Cify of-Petaluma began using treated wastewater to irrigate agricultural land in 1976 based onthe findings of a wastewater reuse study. The study evaluated the use of secondary treated wastewater effluent (recycled water) from the former oxidation-ponds located on the site of what is now the Ellis Creek Water Recycling Plant(Ellis Creek)'. The study found that this water source could;successfully irrigate°a range of crops under local:soil and climatic conditions and laid the groundwork for the'partnership that the City currently enjoys with the agricultural community, The City pumpsrecycled water to the point of connection with the private agricultural irrigationcequipment. From there, users distribute'the recycled water through their own irrigation systems. With threetexceptions,,the City currently pays agricultural users toraccept and utilize recycled water under,the coridition.that=th"e users.meet.all,regulatory requirements pertaining to the application of treated;wastewater onto agricultural and golf course lands. The three exceptions are Adobe Creek Golf Course, Rooster Run Golf Course,and one small vineyard that pay a nominalamount for the recycled water. These three agreements„approved by Petaluma City Council in 1990 forAdobe'Creek and 2005 for the other two,-establish different-rates=for each - Agenda Review: City Attorney Qg Finance Director City Manager , 1 user. The majority of recycled water is used for irrigation-of agricultural lands under the City "payment to user"program based on revised agreements approved by Council in 2010 At the City Council meeting of June.7, 2010, the City Council authorized the City Manager to execute agreements for use of recycled water with agricultural clients (Resolution 2010-081 N.C.S.). These six revised agreements reset the reimbursement rate paid to users from $237.26 to $185 per acre foot(AF). At this meeting the Council acknowledged work by staff to transition from a program that pays agricultural users to accept recycled water to a program that sells recycled water as a commodity. On September 20, 2010, the City Council considered a request from Oxfoot Associates (Kline Cellars) for use of recycled water;and directed the City Manager to negotiate a contract. A negotiated agreement is pending further improvements to the recycled water system and a decision by the property owner to proceed with their improvements. In 2010 staff began conversations with representatives from Jackson Family Investments (JFI), which wishes'to purchase recycled water to irrigate over 300 acres located on Ely Road South at Browns Lane(see Location Map, attachment 2) which resulted in the subject proposed agreement. On June 10, 2011, Council adopted the 2010 Urban Water Management Plan (Resolution No. 2011-093 N.C.S.) which reduced the total water demand projection for the City and eliminated development of the urban recycled water system from all areas except Area A with an associated "potable water offset" of 670 AF. On December 5"',2011,.Council approved two resolutions (2011-165 N.C.S. and 2011-165 N.C.S.) tying the rate charged<-for recycled water to 80 percent of thepotable water rate. No distinction in the rates was made between secondary treated and tertiary treated recycled wastewater. DISCUSSION: Existing Agricultural Program: Approximately 750 acres of agricultural land is currently irrigated with recycled water. Current contracts allow recycle water irrigation of 800 acres of agricultural lands, for an average of 1,719 AF per year In 1998, the City executed 4-year contracts with seven land owners at an average cost to the City of$220 per acre-foot(AF). These agreements were renewed periodically, with the per-acre foot payment adjusting during that time.upto $237.26. In 2010, the City renegotiated agreements that decreased the payment to $185 per AF. The agreements also eliminated CPI adjustments that were elements of previous agreements. These two changes saved the City approximately $70,000 annually. All current "payment to user" contracts expire°in-2013 and users have been notified, with reminders scheduled in the near future, of the City's'plans to convert from the "payment to user" to "user pays" policy per Council's adoption of a recycled water rate last December. A clause was included in the 2010 contracts stating that the City does not expect to continue the recycled water agreements beyond 2013, unless there are delays in implementation of the City's 2 urban water recycling program. The City is also requiredto notify each contractor by January 1, 2013, if the City intends to agree to any extension beyond 2013. Each contractor was advised directly of these provisions at the time they entered into the 2010 contracts. New Agricultural Program: The General Plan 2025 includes policies and programs to transition the recycled water program from the agricultural setting to the urban setting which entail increasing the use of tertiary treated water from the new water reclamation processes at Ellis Creek over time. However, the conclusions of the Urban Water Management Plan (UWMP) completed in 2010_have-changed the timing and extent of this transition from agricultural to urban recycled water use due to a significant decrease of approximately 3 —4 MG (million gallons) during our peak month of projected water demand for the City. The current "build-out water demand is 12,856 AF of which 10,847 AF will be supplied by Sonoma County Water-Agency-(SC WA) under the current agreement. The remaining."balance" of 2009 AF will be made up by 670 AF of"potable-water off-sets" created by recycling tertiary treated wastewater within "Area A" of the City's Recycled Water Master Plan to customers who currently consume potable water. The remaining balance of 1337 AF will be supplied by existing City wells. As a result of the UWMP, the City is projected to.have sufficient capacity to continue providing secondary treated recycled water to the current and proposed recycle water users even after Recycle Master Plan Area A is developed. Therefore, staff proposes to renegotiate:the agricultural recycle agreement according to the currently approved rates when contracts expire in 2013. During discussions in June and September 2010, the Council expressed interest in converting the existing program to a cost recovery program similar to existing irrigation contracts with Rooster Run Golf Course, Adobe Creek and Karren Vineyards. The subject agreement would be a departure from the former "Payment to User"policy and requires that the new recycled water user pay the City the adopted recycled water rate based on the amount of recycled water consumed on their lands albeit at a higher user rate than currently charged the three existing "user pay" customers. Two other properties have expressed interest to join the system as paying customers and discussions with existing and other potential customers reflect that change in policy. The proposed agreement with JFI will provide 50 acre feet (16 Million Gallons) of secondary recycled water for a term of 5 years. This is a delivery minimum per the agreement, which requires_JFI to use this minimum volume of water and commits the City to provide this volume to JFI. This will help,both parties program.the baseline demand into future decision making processes. The,agreement'sets the rates for secondary recycled water at$1.88 per 100 cubic feet (per unit) and tertiary water at 80% of the commercial rate which is currently$2.59 per unit. Both rates would-be adjusted automatically-if the base water rates change. The fee to connect to the system will be those costs directly attributed to the cost of connection to the system. This agreement transfers the City's permit disposal requirements for the use of secondary recycled water to JFI and-gives the City the needed mechanisms to:enforce those permit requirements. 3 FINANCIAL IMPACTS: The projected revenue from the subject agreement, beginning this summer, will begin around $50,000 per year. If and when the existing recycled.water agreements expire and are converted to "user pay" contracts similar to the proposed contract with Jackson Family Investments, recycled water revenues will to grow to'$220,000. The total annual budget in the recycled water program within the wastewater fund is $315,000 to cover the cost of pumping, pump and pipe repairs, customer service and metering, and leak prevention. ATTACHMENTS 1. Resolution 2. Location Map Recycled Water Irrigated Areas 3. Area "A" Location Map 4. Agreement for Purchase and Use of Recycled Water 4 Attachment 1 Resolution Authorizing the City Manager to Execute an Agreement for Purchase and Use of Recycled Water with Jackson Family Investments III and to Execute Substantially Similar Agreements with Other Secondary Treated Wastewater Recycle Customers as Needed WHEREAS, the Regional Water Quality Control Board prohibits the City from discharging treated effluent into the Petaluma River from May 1 to October 20; and WHEREAS, the application of recycled water and maintenance of the system is included in the Department of Public Works and Utilities Fiscal Year 2011 —2012 Operations and Maintenance Budget and in the Fiscal Year 2012 -2013 draft Operations and Maintenance Budget; and WHEREAS, the program involves the application of approximately 386 million gallons (1,185 acre-feet) of secondary recycled water from the City's oxidation ponds at 4400 Lakeville Highway to ranches northeast of the ponds; and WHEREAS, it is estimated that the annual amount of water not discharged to the Petaluma River but instead recycled is 33% of all wastewater generated from the City; and WHEREAS, the City Council has directed City staff to pursue agreements with customers for the distribution of recycled water based on a "user pay" system with rates set to recover a portion of the City's operating costs; and WHEREAS,Jackson Family Investments III has submitted the appropriate paperwork and expressed an intent to enter into a formal Agreement to request and authorize the use of recycled water on acreage on South Ely Road; and WHEREAS, agricultural reuse:of recycled water made possible by the recycled water use agreements will support compliance with the requirements of the Regional Water Quality Control Board. NOW'THEREFOREBE IT RESOLVED by the City Council of the City of Petaluma that the City Manager is authorized to execute an Agreement for purchase and use of recycled water with Jackson Family Investments HI and to execute substantially similar agreements with other secondary treated wastewater recycle customers as needed, in a form substantially similar to the form agreement in Exhibit.A attached hereto; and to execute substantially similar agreements with other secondary treated wastewater recycle customers as they request service. 5 rmille-...7m-il yes 1,414 �;.. ..__t_ ' � �,/mss!"'a�R`�' ';� , ; f r�qI l�iiH 1 L F �1t^x %al CIPI n� r gym„'r• t` + - Aill C"•, ' ,-. i - .� :,� ,, P a9 433 g,,� I `�� iE pica ' .�r1•-®. x; '» tit+ \,- - {' r r'r-r�,••:r t . a ?:11510 w� 2� ; ''4,.� ,t� " J �: rt. ar;, it�� ��� , a�(�: `� \ ' , • M r \ , „-t -1 ,,� Qwri m1I.'t U 1��an�' ter_ . �`\\4c1 •i t w,t• L�'• ® 111��' " AR 'SIM - Fi pt� / +a ,/i1'R. lip 1/151 -1 _ t i I ,. f fit, V4V 1.-.-ri i It ,, tra c�s�'7._��, ,try,„w� pr: :,_% a , R A1TEa_ �: I• _. , iAf It l - -1 ,. r s a. _ rv__ 4 Aq -41-: s,,-4:”.7r.17 ,-,,,„ " ' '4-1M1 v iii. ......4—' . .. _ �;' • r _ • +• 14 ;I � - N a \I-_ 0 • Co): lit 111 • . . co 1 •e..a i i r s„ . I. \ , ' \ 1 ` O _ O..' zs• , • BRp -? z wks- 0 rnA . , �; rip '?__ I • _., J T ) • • • • • 0 • • �, .0 m m y_ �.} +. '4 •.r,.._.. n n mar �c 2 m m 2. a a g g { n o im 1°r° < c m i - " m ,, m +� m m p m = 0) a C i ■ z N N -,C - A m m �. I cr I I CA I N I — a3 n o ." I Ir .4) . �, 2 i ' O < m D x o z o o 2 , o �'� D D 1n r*� C -I n -< O Z c > —I n o� �,. n Cn r �1 o . J 9 m C) -1 0 D CO zz s.. Od «' r- r LA m i �,f - U r Z 0 - o Z Tn m r dtf � y f, s c p pis co 0 p. '':11"..'-�T '{� C o c a ��A Rp O m ( e 0',..,--0 0 0 5r. 2 1 �,. qq a o r \M `V 1 0 0 i,� e 0 © \0 Z r� © © � ® .e• ® 4 / lei tii ' :; 1,6 �3 I d'M1''id d 1332llS e r CO 8, ^ EAST WASHINCTpN ST �Tl1RT}F 7.:, `��f ivy 1 m cREE147---: n g 1332115 ,D, rn EAST CT• a e I - WASHiN T `" i O a 13.12115 .D. i ' -�_`��-� r / h 0 133i1S .1. 1 3 3, -. ® le 1 ` , 7 i CO�` N ■ rn o`S o CO g!1"7; e i eg n gj� Off!, A y G- o T p 0 r o x \ I N I. I p -� E�D / rri 0 1 c 8 . C _ z f ` z _ - TA IFS RD ! — z �t Y I Y rrl -0_, o 0 fi jl R € ` € c D -1-'''' t D )1211 O- - m - m .N c ci) -° � c,--- BRO S D WNS LANE K z 9 = m Cr = N T v W .. I 7 o Ch I Cn I I W I r., I MfriteirkfruAtt- , AGREEMENT!EOR THEs'PURCHASE AND USE OF'RECYCLED WATER THIS AGREEMENT CAgreemeni")iismade this day of , ; between the Cityof Petalumaya California municipalcorporation("City;):and.rackson'Family Wines, Inc., ' .("Purchaser"). RECITALS A. Purchaset-leases akProkiriiatelY370.acteS,of real propertyin Sonoma County, California, identified as Assessor's,Parcel;t ps.'017-150=004 and 068-010-012,( _Property"),'as,further described in Exhibit A which is attachcd,to and made.4 part of this Agreement. B. City owns and operates a wastewater treatment and water recycling facility, ("City. Facilities"), and collects;.treats, and disposes wastewater produced within the City's service area: C. City Facilities;produce secondary recycled water{"secondary recycled water") for'irrigation purposes. City,produces,such recycled water pursuant to Order No 46=011 of the'California Regional Water'Qtality Control Board, San Francisco,Bay Region("Order"), which is attached toiand'niade_a.pa t of this Agreement as ExhibitB. City;Facilities also produce tertiaryrecycledwater("tertiary recycled water"),in accordance with,the regulatory operating permit: D. City desires to sell and Purchaser desiresito purchase and userecycled•water from City for irrigation of Purchaser's leased Property, subject to-the.terms'of this Agreement:. ,Purchaser intends:to,irrigate'approximately 225"acres of vineyards to be developed on the>Propertywith recycledNwater. In consideration of the mutual agree nsents,,terms'andconditions contained in:this-Agreement,-the parties agree as'folio ws. 1.. DEFINITIONS Board means the California-Regional'Water Quality Contml.Board,:San Francisco Bay Region. 8 AGREEMENT EOR•THE''PURCHASE AND USE.OF-RECYCLED,WATER. Page 2 • .Engiiieer•means theCity of Petaluma's Directoruf Public Works and Utilities or designee. liTigationSeason means the penod during which_Recycled Wateris provided to:the. Purchaseryby the City pursuantto•this Agreement, typically.ifroin May 1--through October 20. Irrigated''land means the,area(s)•of the Property:that afe designated by Purchaser to be irrigated With Recycled Waterinacdordance with this,Agreement. Permit or Permits means alhof the following(a) the National Pollution Discharge Elimination System (NPDES)permit„or successor permit,establishing requirements-for the discharge of City+treated wastewaterinto the Petaluma River,-and (b)lthe General Water Reuse Order-No.96_01;1, or successor.permit, establishing requirements;for reuse,of City Recycled Water, as may be issuedmodified or reissued by the Board or successor governmental agency. 2:0 RECITALS, Therecitals above:are incorporated into andmade:a part of this is .Agreement. 3.0 TERM. This Agreement shall become effective on•the date'first"above:written and . shall expire•five`years thereafter,`or on unless'terminated earlier:in-accordance with section`18.0. Purchaser City'hereby'agreeithat any portion of this Agreement maybe revised by written amendment at any time bymutual agreement of the parties.liereto. 4.0 PURCHASE.PRICE. (Af Secondary.Recvcled;-Water: For-the term of this;Agreement;.;the'pr-ice to be_paid,by ,Purchaser,forsecondary'recysled water delivered by City shall`be establishedby resolution:of the City Council. Any rate,adjustment established by the City Council ssill'beeome effective •immediately, anf,will apply to the next and subsequent deliveries of;secondary.recycled water until further adjusted:by theCityCouncil. The current price established'.by the City Council,for secondary recycled water is;$1.88 per unit(748 gallons) pursuant to•Resol tiomno: . adopted on ;(B) Tertiary Reeycled`Water. Forthe'term of this Agreement,the price to bey paid by -TPurchaser for tertiary recycled water delivered by City shall be eighty percent(80%) of the City's retail rate for potable,water for industrial:customers,established='by resolution of the CityiCouncil. Any adjustment to the retail rate potable:water foi industrial customers establishedby the City Council will-become effective initnediately.'and will apply the next and subsequent deliveries of 01 AGREEMENT FOR THE•PURCHASE,AND USE OF RECYCLED WATER .Page 3 ti tertiary,recycled water until:further adjusted by the City Council. The current retail rate for potable 'water for industrial customers established'by the.City Council is'$3'24 per unit+(748•gallons), and the current price established by the City=Council:for tertiary recycled water is$2:59 per unit.pursuant to 'Resolution no. adopted on (C) At least 10 days,prior tcr proposed adjustments to,purchase prices,for City recycled water or for potable water for industrial-customers, City shall=give written notice to Purchaser of a hearing,on the proposed;adjustments: However, failure of the City to give or the Purchaser to receive such notice shall not invalidateany recycled water or water price-setting action of the City Council or its effect uiider'this Agreement. 5.0 CONNECTION'FEE: Purchasershall pay-any and all_costs to make the water connection including cost of the meter;tapping of the main, and other City expenses for connecting to the City water system based.onthe size,Of the meter needed to provide.adequate recycled water ,flow tormeetxequestedtdeinand at'the';timesuch connection is,made. Water connection and capacity fees(ite.-impactfees) shall,not apply, 6.0 :METERING AND MEASUREMENT OF FLOWS'. Purchaseragrees thatthe.City shall;read the meter and record recycled water used'at-the location where recycled_water is used 7.0 PAYMENT:F.OR RECYCLED,'WATER. City shall invoice Purchaser for the cost of recycled water used'by Purchaser on a monthly-or bi-monthly basis based on-meter:readings. Said invoices shall'berdue and paid within 30 days of the date of billing. Delinquent invoices for recycled water and recycled-Water Use ur suant to thisAg reement, in addition to the provisions of this • Agreement, shall be,subject to penalties,enforcement and;other requirements applicable to water seivice-contained'in Title 15 of the Petaluma Municipal Code;as amended:from:time to time. ;8#1: 'DELIVERY-AND`USE OF RECYCEED WAFER. (A) City Delivery. City-agrees to deliver recycled water to Purchaser at irrigation meter installed;by City: (B) Minimum Annual Recycled Water Usage, Purchaser agrees to use and the+City agrees to deliver`a minimum of 50 acre-feetof secondary recycled water annually, which shall be referred;to herein as the ',Committed Volume." Failure-to use the Comrrritted'Volume will result in billing by the{City fer.:an amount of secondaryrecycled water equal the difference between Purchaser's-actual use and-the Committed Volume, which billing shall be due and'payable so,long as I0 AGREEMENT FOR'THE PURCHASE AND.USE OF-RECYCLED WATER . Page 4 • such failure,by Purchaser.to use the Comm tted Volume is notdue fo a'lack,of or intertuptionin. supply, failure of delivery systems or other limitations onhavailability as described imSection 9f0 hereof. (1) Change in Committed'Volume. 'Should Purchaser desire to change the Committed Volume for anyyear and the City has.the capacity to commit to such<change,=Purchaserand City agreeto,determine the committed Volinteby February 1 of such.year and shall,prepare and execute a-written amendment to this,Agreemehtspecifying the Committed`Volume for such yea:. (C) Irrigation Line and Irrigation Equipment. Purchaser's'.use of recycled water must be 'in accordance with'all Permit requirements;and with the following;. (I) Connection.To City+Pipeline. :Purchaser shall design,.construct,purchase and install the pipeline downstream of the City meter(i.e.Purchaser's responsibility begins at the face-of the Meter)_including box, valves,:pressureregulato rand any other appurtenances necessary to receive: `recycled water,from the City s'pipeline'Location of connection to.City's,recycled water pipeline shall'be as approved by City; (2)'. Flow Bibs. Nowhose bibs-shall'be°connected to recycled water (3) Runoff. Purchaser's on=site irrigation system must.be;configured and operated to prevent runofffrom deaving`:irrigatedtareas Or the Property. (4), Identification Tags. All meters, valves, blowoffs;rand':controllers shalblie identified using,recycled;water identifrcationtags,T. Christy Enterprises 3150''„or equal. Tags"shall be weathe roof Plastic, 3-inch b 4 inch, a le in color with the`wards"RECYCLED WAFER ,Do 1p P Y P ?P NOT DRINK:"'or similar:printed'on one side, and "AQUA IMPURA NO TOMAR,"ontherother side;,or similar,as approved by the Engineer. (5) Plans P,u'rchaser;shall prepare andsubmit!plans for connection to City srecycled, water pipeline for portions owned and?installed.by Purchaser up to the point of connectionto.the, City's irrigation:systemn (the irrigation meter): . Crty,shall.review'plans and establish`conditions of approval . .(D) Water Pressure. It is•estimated.that.the pressure of recycled water delivered by City will`-be;approxilnately 1'10 psi, Flowerer,the City makes,no guarantee concerning the pressure of delivered.recycled water, The City expressly disclaims any guarantee, warrantyor representation that the recycled water delivered bythe Citywill conform to any particular pressure requirements of AGREEMENT FOR'THE PURCHASEANDUSE OF RECYCLED WATER Page 5 Purchaser's;facilities. _Purchaser understands and agrees.that Purchaser must-install:pressure regulators and any and all other appurtenances or,equipment necessary to produce and maintain necessary iecycledWaterpressure for.Purdhasers system. (E) Purchaser's Maintenance Responsibility._Purchaser shall operate,maintain and,repair all recycled water pipeline:and appurtenances downstream(on the Purchaser Purchaser's side) of the City's. irrigation meter connecting the City Facilities to the-Purchaser's,irrigation system. (F) City's:Maintenance:Responsibility. Subject to"the terms of this Agreement,City shall operate, maintain:andT'repair City's recycled-water facilities and pipelines up to and including • irrigation meter installed'by City connecting the City Facilities to`the Purchaser's irrigation,system. (G) On-Site Supervisor. ''Purchasershaltdesignate in=writing an On=siteSupervisor'who is responsible for thesafe and.efficient:operation of the Purchaser's recycled water system. On-site Supervisor shall be knowledgeable about all facets of Purchaser's irrigation system,including regulations, layout of the system, and maintenance Purchaser and On-Site Supervisor shall be trained and certification shall:be provided by the Purchaser-to the City as-to the.qualifications and training of the an-site super-,visor, to the satisfaction ofthe City. 9.0 .LIMITATIONS ON`DELIVERY OF RECYCLED WATER. (A) Limitations. Notwithstanding,any requirements in this Agfeemen#'for either pally to ' deliver or accept recycled:water; the parties understand and agree'that delivery oracceptance of recycled water may at times be precluded,;impracticable, or otherwise prevented or infeasible for reasons beyond the reasonable control!of either party. City will notbe obligated to provide and Purchaser will not he obligated to accept recycled water whenjdelivery, or acceptance is prevented by a cause beyond either party's'reasonable:control,including, but not limited to Acts of God, shortage of recycled.water,'malfunction of either party's system, temporary imbalance of recycled;'water in;the various storageTpondsrcomprising,pan of-the.City Facilities, changes in applicable discharge Or monitoring requirements, a determination by any regulatory agency recycled water is not suitable for the intended use crop failure or other problem with-the crop or agricultural improvements,related.thereto which would reasonably preclude use of recycled water,or a determination.o`r:allegation by a bod/of competent jurisdiction that the use of recycled water, pursuant to the Agreement is unlawful. The parties agree to cooperate:in good faith in case of an event that wholly or partly excuses delivery or use of recycled water pursuanttothis provision to (2- AGREEMENT FORTHE PURCHASEIAND USE OF RECYCLED WATER Page 6 fulfill'thepurposes'of this Agreement and,to.restore delivery and-use ofrecycled water as soon as reasonably practicable. City,agrees to use reasonable efforts'to provide Purchaser with 24 hours advance notice of anticipated intenuptions-in service due Io construction,repairs or other causes within the City'sconhnl (B) Allocation of Limited Supply of Recycled water. Purchaser understands and agrees pursuant tothis-provision 9:0 that City does not and cannot,guarantetto.Purchaser uninterrupted supply:or use of recycled:water. In'accordance with this Agreement City\vill use reasonable efforts to supply to Purchaser and Purchaser will usereasonable efforts to.use recycled water so that Purchaser canuse'at least the minimum required purchase pursuant to provision 8:0(B)-.of this . Agreement. In the event of a recycled water shortage for any reason, City-will use reasonable efforts to equitably distribute available recycled`water to users,:including.Purchaser, who haw entered,into recycled waterpurchase and use agreements,with City. Purchaser understands and agrees that in case of a recycled watenshortage, City may in City's sole discretion,allocate;available recycled water giving preference-to°users basedon the:seniority of the user's agreement for purchase and use ' of recycled water with theiCity,,based':on the volume:of water required by the,user„or by any other Method. 10.0 MONITORING...Purchaser will be solely responsible for managing and monitoring the storage and distribution:of recycled water the control of Purchaser(downstream or on the Purchaser's side ofthe Cityi rigatiot imeter)'. Solana as;this Agreementremains in effect and as a condition of receiving recycled water.pursuant to this Agreement,Purchaser'herebygrants,City, :acting through its duly authorized employees, agents and representatives,-reasonable access to the r.ProPe.tty for the purpose;of sampling,meter reading, and observing as reasonably required, Purchaser sausetofrecycled`water City will use reasonable efforts to provide Purchaser(or a: representative) wih reasonable prior notice of any such observation on the Property and'willallow Purchaser to he;present during any such access,pursuant to this provision and will use reasonable efforts`to avoid.interfering,with Purchaser's..operations,on the Property. 11.0 'PURCHASER'OBLIGATIONS CONCERNING SUITABILITY OF RECYCLED WATER. (A) Regulatory Agencies. City and Purchaser understand±and agree that all recycled water delivered to Purchaserpursuantto this:agreement shall be-subject toithe current andfuture:water l3 AGREEMENT FOR THE'PURCHASE AND USEOF RECYCLEDiWATER Page 7 recycling requirements establishedby the Permits and other'applicable requirements. City will make available to'Purchaser upon request such test reports-as are periodically requited of City by regulatory agencies to characterize.the recycled.water. The results of these tests are maintained at the City's Department,of Publib Works and:Utilities, Division:of Water Resources and Conservation. (B). Secondary Recycled'Water. Purchaser:and City understand`and agree`that secondary recycled water delivered,by'Cityis;not;filtered, and maycontain algae and,other constituents which, if not removed, may adversely impact Purchaser's'irrigation equipment Tt is Purchaser's responsibility to install and operateeqwpment as necessary to:remove constituents in recycled water delivered pursuant to this.Agreementthat may Purchasers'irrigation or other.equipment. It is Purchaser's responsibility to properly.manageand dispose of material removed from recycled water by Purchaser's equipment: (C) Suitability. Purchaser understands and agrees that recycled water delivered by City is produced=through treatmentxof wastewater. It'is responsibility todetermine and confirm that quality of reeycled.water,delivered by City is consistent with water quality+and other .requirements that apply to Purchasers use of recycled,water, including, but not limited to, the requirements of?crops Purchaser intends to irrigate with recycled water: 12.0 RECYCLED WATER APPLICATION RESTRICTIONS: Purchaser agrees as a .material term of this Agreement to use recycled'water in compliance all applicable laws, ordinances, or regulations now in effect or hereafter enacted or adopted. Purchaser agrees to notify City of known violations of laws and/or regulations,or damage to City irrigation faöilities or other property within 24°hours■ofdiscoveryofsuchviolationor'damage. Purchaser shall be solely (responible for the cost of repair for"damage caused by Purchaser or Purchaser's employees, agents, oreoiitractors of others;acting onbehalf of or under Purchaser's control arising from or related-to, use of recycled:water pursuant to this Agreement. If Purchaser does not comply with:laws, ordinances,,or regulations=governing,the use of recycled water pursuant to this Agreement, in addition to and not in lieu:Of any other remedies available to the City pursuant to this Agreement or applicable law;,City may immediately cease recycled water delivery'pursuant to this Agreement and ' teu iinate this Agreement and so notify Purchaser.. In'City's sole discretion, City may;,-but it not ' required • grant Purchaser a reasonable time within whichto cure and correct any non- , compliance concerning use of recycled water pursuant to this Agreement If City grants Purchaser 19 • • AGREEMENT FOR THE PURCHASE AND USE OF RECYCLED•WATER Page 8 time within which to cure and correct any non-compliance concerning use>ofrecycled water, and >Purchaser fails to:cure:such,non-compliancewithin the'specified,'time,.the"City',may it-Fits sole discretion-terminate-this Agreementand so;notify purchaser: 13:0 TRAINING., Purchaser is responsible for ensuring that Purchaser's recycled water' :system:maintenance, irrigation;>manageientand�operations staff ands any others that,may come into contact with recycled.water on the Property=understand the presence of iccycled water on the 'Property,th'at:recycled water ichot4for`consumption purposes,iand:thesafe`use of recycled water and 'operation,of the recycled;water system ,On-SiteSupervisor shall"be;trained and certification shall be provided by the Purchaser•to the City as to the,qualifications and training of the;on-site supervisor, 'subject;to acceptance and approval ofthe City; 1 4.0 AGREEMENT,NOTITRANSFERABLE. Neither City,nor,Purchaser shall assign, ' subcontract or,transfer any interestin;tlieAgfeementwithout the:prior written consent of the other, . °and any.purported assignment-subcontractor'transfer without such consent shall be.soid. Any >assignment,-subcontract or transferrapproved by City shall':be subject to all`terrns and conditions of . this Agreement. 1 5:0 INDEMNIFICATION.: To the,maximum extent permitted by,law-.Purchaser agrees 4o,at its own;expense,protect;indemnify, defend with counsel acceptable to City (which acceptance will not.be unreasonably withheld)and hold harmless the City and'its officers, officials,employees, :agents;and volunteers from and against any and all liability, loss damage, claims, suits; actions, ' arbitration.proceedings,;administrative proceedings,regulatory proceedings, civil penalties, fines, judgments,awards costs,ancIexpenses (including; without+limitation, claims expenses, reasonable attorney's`fees,and costs oflitigation) of every nature;.whether"actual,alleged or threatened, arising ,out, or.relating;to the use of recycled water pursuant to this Agreement or the breach;ofany provision of this Agreement or the'Order or the`Permitsby Purchaser+or its directors,,officers; officials, agents;,:employees: volunteers drothers acting on Purchaser's behalf or under Purchaser's „direction.. Notwithstanding the foregoing,'yurchaser s;obligation to protect, indemnify, defend and hold'harmless•pursuant:to this provision shall-notiapply to failure by the City to comply with the requirements of the Order,'the Permits; or other,applicable legal requirements: This provision will survive the termination of this Agreement:, 16>0 METHOD.ANDPPL-^ACE OE GIVING NOTICE: Except as otherwise specified in AGREEMENT FORCTHE`-PURCHASE ANDUSE OF RECYCLED'WATER Page 9 thi Agreement; all notices sent pursuant to this Agreement shall be made in writing, and sent to the pective:addressesspecified'below or to such other address as a Party may Parties at their.res ; designate by written notice delivered to the other Party in accordance'with this Section. All such notices^^shall be sent"by: (1) _ personal;delivery;in which case notice'is effective upon delivery; (2) certified or registered mail, return.receipt requested, in which,case notice shall be deemed delivered,on_receipt iftdelivery-is confirmed b' a,return receipt (3) nationally recognized overnight,courier,-with;charges prepaid or charged to the sender;s'account in which case notice is effective on delivery if delivery is confirmed by the delivery.service;'or (4), facsimile transmission,in-which case+notice shall"be,deemed.delivered;upon transimttal,provided that(a)a duplicatc.copy of the notice is;promptly delivered by fir st-classor certified mail by"overnight delivery, or(b)sa. transmission report is:generated reflecting the accurat e t,_ransmi ission thereof. Any notice given byzfacsimile shall be consideredto•have beemreceivedon the:next business day ifit is received after:5i00 p.m. r'ecipient's time or on a non_businessiday: City:- City Clerk City of-Petaluma • Post'Office Box 61 Petaluma, California 94953 Telephone: (707)778.4360 Eacsirnile; (707)778-4554 And: Director of Public Works.and Utilities City of Petaluma! 202:North McDowell Boulevard Petaluma, California 94954 I lD AGREEMENT FOR THE PURCHASE AND:USE OF RECYCLED WATER. Pale 10 Telephone: (707)778-4546 Facsimile: (707)778-4508 Purchaser: 'Jackson Familti Wtnes,Inc. 421 Aviation.Bl d Santa Rosa- CA 9540:3: Telephone: (707) 544-4000, • facsimile: (707) 54744767' Attn: Legal Department 17:0 MISCELLANEOUS`PROVISIONS. ,(A) No Waiver of Breach.,,The waiver.`by either party,of any ybreach ofanyterm or promise contained in this Agreement shall not be deemed to be;a waiver:of5"uch'term or provision for any . subsequent breach of the same:or anv'other term or promise,contained in this'Agreement. (B), Uncertainty. This Agreement,is the product of negotiation;and;compromise onthe part:ofboth;par-ties. The City,and Purchaser agree,notwithstanding Civil Code Section 1654,;that in the event of Uncertainty, the language is-not to be construed•against thekpartycausing'the uncertainty to exist. (C) .No-Thud Party^^Beneficiaries: Nothing contained in this Agreementshall be construed to•create and:the parties;doinot intend-to create any-rights in third parties:, (D) Mercer. This.Agreement,constitutes the entire Agreement between the,City and Purchaser,. ,118X) ,TERMINATION. ,Excep t.as ez ressl set forth herein, should,one partybreach any ' P P Y ofthe terms or conditions of this Agreement the non-breaching party may provide written notice of suchibreach and{the effective date-of tennination of this agreement to the other party. In addition, and notwithstanding'anytermfor provision of this Agreement;•if'(i)Purchaser at,any time determines that,the:recycled water is,not suitable for irrigation or frost protection, or otherwise damages,orhas the potential;to.'damage the Property•or improvements thereon-(including, without.limitation, any vineyards, vines, grapes or other crops), (ii)Purchaser is restricted or prohibited`from.using such recycled water for irrigation and/or,frost protection: or (iii) Purchaser has secured an alternative non- redycled source of water for the Property; tlien,in any such-event,Rurchaser shall have the right to • • •AOREEMENT'FOR THE PURCHASEi..AND LSE:OF RECYCLED WATER Page 11 terminate this Agreement, without fee,penalty or liability, upon sixty(60) days written notice to the City. 19.0 INSURANCE. Purchaser shall, prior to this Agreement taking effect and•throughout the:term of this Agreement, maintain and provide evidence of insurance as required pursuant to Exhibit C,which is attached and°made a part of this Agreement. IN WITNESS WHEREOF,the parties hereto have executed this document the day, month and year first.above:written. CITY OF'PETALUMA PURCHASER By City.Manager ATTEST: • Executive Nice President&=C.O.O. Title 425 Aviation Blvd City Clerk Address APPROVED AS 'IO FORM; Santa Rosa CA 95403 City State Zip 94-3040414 City Attorney Taxpayerl.D.Number APPROVED: Petalutna'Business Tax Receipt Number Director of Public Works'& Utilities APPROVED: Risk-Manager APPROVED: Finance Director Attest: 18 • AGREEMENT FOR THE PURCHASE;AND`iUSE OF REOYCLED WATER_. Paged 2 City,Clerk,'City of Petaluma 1876796.1 1497977.2 C:\NRPoitbl\EDMA IN\ERIC\1876796_120C • 1g AGREEMENT FOR TI-NEPURCHASE AND USEOF REGYGLED'WATER Page 13 EXHIBIT A Theland,referred-to&herein is ituatedlin the State of California, County of Sonoma, Unincorporated Area, and is described follows: Parcel One: Lot or. Section Number 256,as.leid"down and described on the.map of a part of said Rancho Petaluma,made by W. Roe, Esgr; also Lot or Section Number 257, as laid down and-described oii;a map of a part of.said:Rencho Petaluma, made.by W. Rowe,Esq. 'Parcel Two: All that certain lot.orparcel of land situate In the County of Sonoma, State of California. and.bounded•and described asdoilows,to-wit: That cettain piece, parcel or lot of land describedtas follows: Being.part of'Lot Number236°oftho Petaluma,Rancho, as shown on the map of said Rancho made by W. Rowe,Est:, arid'described as follows: Commencing at the Northeasterly corner of said Lot Number 235,end running thence in a Southwesterly direction along the,most Easterly,line;of said;Lot 236;to the Southeasterly Ccrnenof;said lot;'thende Northwesterly along^the linerof said.Lot 236 to a division fence dividing said Lot 236'about midway;thence:along said.division.fenc'e in a Northeasterly direction to°the Southerly line of Lot 237,;,thencetin a Southerly direction along the most Southerly line of Lot 257 totthe place of,beginning;pand being bounded a follows;on the Northerly side by the land of Elbert R. Cha rles, on the most Easterly side of'the,land of J'.B- Lewis;-on the most side of Lot 235 and'on the'Westerly-side byttie'lands of George Ivancovich, end being that portion of Lot'235 of the Petaluma.Rancho;lying Easterly of said present division orpasture-fence; The tract herein conveyed being the same prernisesconveyed'by George Ivancoyich et ai to Sarah Haubrich bydeed:dated August 12,'1902 and recorded August 18,1902 in Liber i98 of Deeds, page 284, of;Soribrria`County Records. Assessor's Parcel No: 0,68=070=0.1.2,and'0.17-150-004 240