HomeMy WebLinkAbout06-19-2018 Agenda Item 04 - Nacimiento Whale Rock Exchange agreement updateMeeting Date: 6/19/2018
FROM:Carrie Mattingly, Utilities Director
Prepared By:Aaron Floyd, Deputy Director - Water
Jennifer Metz, Utilities Projects Manager
SUBJECT:UPDATE TO THE NACIMIENTO/WHALE ROCK EXCHANGE
AGREEMENT
RECOMMENDATION
Authorize the Mayor to execute an updated agreement with the County of San Luis Obispo for
the exchange of water from the Nacimiento Project for water from Whale Rock Reservoir.
DISCUSSION
Background
In September 2006, the City entered into an Exchange Agreement with the County of San Luis
Obispo (County) to provide an additional water supply for the town of Cayucos. The County
serves Cayucos through County Service Area 10 (CSA 10) through the exchange of water from
the Nacimiento Project for an equivalent amount from the City’s Whale Rock Reservoir water
supply (see Attachment A). The Exchange Agreement eliminated the need to construct a pipeline
from the Nacimiento Project to Cayucos.
In October 2006, the San Luis Obispo County Flood Control and Water Conservation District
(District) and the County entered into a Nacimiento Project Water Delivery Entitlement
Contract. Under the contract, the County, on behalf of CSA 10, had an entitlement to 25 acre-feet
per year of Nacimiento Project water. The Nacimiento Project Environmental Impact Report
(EIR), certified in 2004, included potential deliveries of up to 160 acre-feet per year to portions
of Cayucos which fall within the boundary of CSA 10.
To date, the County has not drawn from the supply from Whale Rock Reservoir as part of the
Exchange Agreement as the three water purveyors currently serving Cayucos have an entitlement
of 600-acre feet per year from Whale Rock Reservoir from an agreement executed prior to the
construction of the dam in 1958.
Updated Agreement
In April 2016, the District entered into amended
agreements with both the City and the County related to
the full allocation of reserve water from Nacimiento
Reservoir. This increased the City entitlement in the
Nacimiento Project to 5,482 acre-feet annually and the
County entitlement from 25 acre-feet per year to 40 acre-
feet per year. At that time, the District also entered into a
new delivery entitlement contract with Bella Vista MHP,
LLC (BVMHP) under which BVMHP has an entitlement
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to 10 acre-feet per year of Nacimiento Project water, described in the agreement included as
Attachment B.
Following the full allocation of Nacimiento Reservoir, City and County staff recognized the need
to update the Exchange Agreement to align with the entitlements in the provisions of the full
allocation of Nacimiento. The updated agreement reduces the amount of water that could
potentially be delivered to the County from 160 acre-feet to 50-acre feet per year, coinciding
with the total County and BVMHP entitlements. The 2018 updated Exchange Agreement is
provided in Attachment C. Other key terms of the agreement remain unchanged, including:
x The updated Exchange Agreement continues to provide a “1 to 1” exchange of water
from Nacimiento Reservoir for water from Whale Rock Reservoir.
x County and BVMHP will be responsible for all costs associated with the delivery of the
water from Nacimiento Reservoir (capital, operations, and mainte nance costs) to the
City’s Water Treatment Plant.
x The City will be responsible for delivering water to the Cayuco s water treatment plant
from the existing point of connection on the Whale Rock pipeline.
The updated Exchange Agreement facilitates a successful partnership between the City and
County to meet regional water needs and minimizing cost and potential environmental issues.
CONCURRENCES
City staff from the Utilities Department and the City Attorney’s office has worked with County
Public Works staff on the updated exchange agreement.
FISCAL IMPACT
There are no fiscal impacts associated with the update to the Nacimiento/Whale Rock Exchange
Agreement.
ENVIRONMENTAL REVIEW
The Nacimiento Project EIR was certified by the District on January 6, 2004. The EIR identified
the Nacimiento/Whale Rock exchange of water as an environmentally superior option to building
a pipeline to Cayucos. The City approved a resolution adopting an Addendum to the Final
Nacimiento Project EIR and authorizing contract amendment No. 3 to the Nacimiento Project
water delivery entitlement reflecting an additional allocation of water to the City on March 15,
2016. The County approved Addendum No. 3 to the Nacimiento Project EIR on April 19, 2016
to align with the entitlements associated with the full allocat ion of Nacimiento.
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ALTERNATIVES
1. Not Approve the Updated Agreement. Council may elect to not enter into this agreement
at this time. Staff does not recommend this alternative as the updated agreement proposes to
limit the exchange to 50-acre feet per year in alignment with Nacimiento Project
entitlements.
2. Amend the Proposed Agreement. Council members may direct staff with changes and
suggestions to the proposed agreement. At this time, the agreement, as drafted, was
negotiated by staff and reviewed by the City Attorney’s office and County Counsel. If any
changes are desired by the Council, staff will work with County staff to obtain Board
approval before the agreement is finalized.
Attachments:
a - 2006 Water Exchange Agreement
b - Nacimiento Project Water Delivery Entitlement Contract - Third Amendment (Full
Allocation)
c - 2018 Agreement for Exchange of Water between City of SLO and County of SLO
(Service Area 10)
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THIRD AMENDMENT (FULL ALLOCATION)
TO NACIMIENTO PROJECT
WATER DELIVERY ENTITLEMENT CONTRACT
This Third Amendment (Full Allocation) to the Nacimiento Project Water Delivery
Entitlement Contract (“Amendment”) is entered into by and between the San Luis Obispo
County Flood Control and Water Conservation District, a Flood Control and Water Conservation
District duly established and existing under the San Luis Obispo County Flood Control and
Water Conservation District Act, Act 7205 of the Uncodified Acts of the California Water Code
(the “District”), and the City of San Luis Obispo (the “Participant”).
R E C I T A L S
WHEREAS, the Participant has contracted with the District pursuant to that certain
Nacimiento Project Water Delivery Entitlement Contract, effective August 17, 2004, and as
subsequently amended by the Memorandum of Understanding dated May 24, 2005 (First
Amendment to Nacimiento Project Water Delivery Entitlement Contract) and as subsequently
amended by the Second Amendment to Nacimiento Project Water Delivery Entitlement Contract
dated August 28, 2007 (collectively, the “Contract”) for an annual Delivery Entitlement to
Nacimiento Project Water; and
WHEREAS, the Contract is a Like-Contract that is substantially identical to the
Nacimiento Project Water Delivery Entitlement Contracts between the District and the Other
Participants; and
WHEREAS, Article 29, subdivision (A) of the Contract contains a list of priorities for
the District’s use of its Reserve Water, giving fourth priority to “adding to and supplementing the
Delivery Entitlements for the Participant and/or the Other Delivery Entitlements for the Other
Participants who are Initial Participants as provided for by Article 6(D)” and giving fifth priority
to providing a water supply to “additional and New Participants [as defined in Article 29,
subdivision (C) of the Contract] who were not Initial Participants;” and
WHEREAS, pursuant to Article 6, subdivision (D) and Article 29, subdivision (B) of the
Contract, the Participant has the right to acquire additional Delivery Entitlement from the District
by entering into an amendment to the Contract with the District subject to certain requirements,
including, without limitation, the requirement that the Participant pays the District a Purchase of
Reserve Water Delivery Entitlement and Reserved Capacity Fee which shall be applied as a
credit to the obligations of the Participant and the Other Participants based on their respective
Unit Percentage Share; and
WHEREAS, the Participant and the Other Participants (i.e. All Participants) have elected
to exercise their rights under Article 6, subdivision (D) and Article 29, subdivision (B) of the
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Third Amendment to Nacimiento Project Page 2
Water Delivery Entitlement Contract
Contract and each purchase a portion of the currently unsubscribed Reserve Water (6,095 acre-
feet) in accordance with their Delivery Entitlement Shares minus the combined entitlement of
two New Participants, namely SMR Mutual Water Company (80 acre feet per year) and Bella
Vista MHP, LLC (10 acre feet per year), such that the Total Delivery Entitlement Obligation
shall equal 15,750 acre feet per year and the total amount of Reserve Water shall equal 0.0 acre
feet per year; and
WHEREAS, pursuant to Article 17, subdivision (B)(5) of the Contract, when there is no
longer any Reserve Water, the District will no longer have any obligation to apply any portion of
the ad valorem taxes allocated to the Nacimiento Water Fund of the District to the Reserved
Capacity Construction Cost Component; and
WHEREAS, given that the Participant and the Other Participants are simultaneously
purchasing a share of Reserve Water equal to their Delivery Entitlement Shares, the Participant’s
and each Other Participant’s Reserved Capacity Fee is equal to the credit to which they are
entitled under Article 29, subdivision (B) of the Contract; and
WHEREAS, the purpose of this Amendment is to increase the Participant’s Delivery
Entitlement consistent with Article 29, subdivision (B) of the Contract and all other contractual
requirements, including, without limitation, those set forth in Article 32 of the Contract.
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED by and between the
Participant and the District as follows:
Section 1. Recitals. The foregoing recitals are true and correct and are incorporated
herein by this reference.
Section 2. Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in Article 1 of the Contract.
For purposes of this Amendment, “Other Participants” shall exclude SMR Mutual
Water Company and Bella Vista MHP, LLC. The Nacimiento Project Water Delivery
Entitlement Contracts with SMR Mutual Water Company and Bella Vista MHP, LLC provide
that they are not entitled to any credit against their respective financial obligations as a result of
this Amendment and the Like-Amendments.
“Like-Amendment” shall mean an Amendment (Full Allocation) to Nacimiento
Project Water Delivery Entitlement Contract that is substantially identical to this Amendment,
except for Participant information, dates, Unit Participations, Participant’s Unit Percentage Share
and Delivery Entitlement Share.
Section 3. Notice. Participant acknowledges that it received the notice required by
Article 29, subdivision (B) of the Contract in connection with each Other Participant’s
acquisition of its proportionate share of Reserve Water.
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Third Amendment to Nacimiento Project Page 3
Water Delivery Entitlement Contract
Section 4. Amendment to Article 16, Subdivision (C)(5). The second sentence of
Article 16, subdivision (C)((5) of the Contract is hereby amended and restated in its entirety and
shall hereafter be and read as follows:
There is apportioned to the Participant 34 and 806/1000 percent (34.806%) of the
District’s said remaining costs, including the Required Additional Project Costs and Master
Water Contract Costs.
Section 5. Amendment to Table 1. Table 1 (Parametric Information for the Water
Delivery Entitlement Contract of the Nacimiento Project) is hereby replaced with the revised
Table 1 (Parametric Information for the Water Delivery Entitlement Contract for the Nacimiento
Project) attached hereto as Exhibit A and incorporated herein by this reference. Said revised
Table 1 reflects the Participant’s increased Delivery Entitlement and the Participant’s revised
cost share obligations upon the Effective Date of this Amendment.
Section 6. Effective Date. The Effective Date of this Amendment shall be the date
upon which the Participant and all Other Participants have executed and delivered this
Amendment and the Like-Amendments to the District, and the District has executed this
Amendment and each Like-Amendment.
Section 7. Severability. Any provision of this Amendment that is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or nonauthorization without invalidating the
remaining provisions hereof affecting the validity, enforceability or legality of such provision in
any other jurisdiction.
Section 8. Governing Law. This Amendment shall be interpreted, governed and
enforced in accordance with the laws of the State of California applicable to contracts made and
performed in such State.
Section 9. Counterparts. This Amendment may be executed in several counterparts,
each of which shall be regarded as an original and all of which shall constitute one and the same
document.
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Third Amendment to Nacimiento Project Page 4
Water Delivery Entitlement Contract
IN WITNESS WHEREOF, the parties hereto have each executed this Amendment on the dates
set forth below:
CITY OF SAN LUIS OBISPO
By __________________________________
Authorized Representative
Date _________________________________
APPROVED AS TO FORM:
CITY ATTORNEY
By ________________________________
Date _______________________________
ATTEST:
CITY CLERK
By __________________________________
Date _________________________________
SAN LUIS OBISPO COUNTY FLOOD
CONTROL AND WATER
CONSERVATION DISTRICT
By __________________________________
Chairperson, Board of Supervisors
Date _________________________________
APPROVED AS TO FORM AND
LEGAL EFFECT:
RITA L. NEAL
District Counsel
By
Deputy District Counsel
Date
ATTEST:
DISTRICT CLERK
By __________________________________
Deputy District Clerk
Date _________________________________
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Third Amendment to Nacimiento Project Page 5
Water Delivery Entitlement Contract
EXHIBIT A - TABLE 1
Parametric Information for the Water Delivery Entitlement Contract of the Nacimiento Project
Date Table 1 is effective: March 15, 2016
Name of Participant:
(from Contract front page)
City of San Luis Obispo
Initial or Other Participant
(Article 1 definition)
Initial Participant
Contract Amemendment Number 3
Delivery Entitlement
acre-feet each Water Year [Article 6(A)]
5482
Delivery Entitlement Share
(Article 1 definition)
34.806%
Nacimiento Project Water
acre-feet each Water Year (Article 1 definition)
15750
Total Delivery Entitlement Obligation
acre-feet each Water Year (Article 1 definition)
15750
Reserve Water
acre-feet each Water Year (Article 1 definition)
0
Maximum instantaneous rate of flow
cubic feet per second [Article 6(B)]
8.20
Maximum monthly delivery volume of water
acre-feet [Article 6(B)]
498.40
Participant's Unit Percentage Share of
Capital Reserve Costs and Operation and
Maintenance Costs
[Article 16(C)(1)]
Participant's Unit Percentage Share of All
Other Construction Costs
[Article 16(C)(3)(c)]
Project Segment
Systemwide Operating Cost 34.806% N/A
Unit No. A 34.806% 34.806%
Unit No. A1 34.806% 34.806%
Unit No. B 59.188% 46.997%
Unit No. C 34.806% 34.806%
Unit No. C1 34.806% 34.806%
Unit No. D 59.188% 46.997%
Unit No. E 61.902% 48.354%
Unit No. F 97.684% 66.245%
Unit No. F1 59.188% 46.997%
Unit No. F2 97.684% 66.245%
Unit No. G 97.684% 66.245%
Unit No. G1 99.096% 66.951%
Unit No. G2 99.096% 66.951%
Unit No. H 99.096% 66.951%
Unit No. H1 99.096% 66.951%
Unit No. T2 N/A N/A
Unit No. T4 N/A N/A
Unit No. T6 N/A N/A
Unit No. T11 99.096% 99.096%
N/A means Not Applicable
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MASTER AGREEMENT FOR
EXCHANGE OF NACIMIENTO AND WHALE ROCK WATER
This Agreement for Exchange of Nacimiento and Whale Rock Water (Agreement) is
made this _____ day of ______, 2018 by and between the City of San Luis Obispo (City) and the
County of San Luis Obispo (County) (each a “Party” and collectively “Parties”).
WITNESSETH
WHEREAS, the majority of municipal water delivered to the unincorporated community
of Cayucos is generated by the Whale Rock Project and is delivered by the Whale Rock
Commission as raw water to the Cayucos Water Treatment Plant owned and operated by the
County through County Service Area 10 (CSA 10); and
WHEREAS, the Cayucos Water Treatment Plant is the only municipal water treatment
plant serving the community of Cayucos, and the CSA 10 plant treats Whale Rock Project water
to drinking water standards and delivers the treated water to public and private water
companies in Cayucos; and
WHEREAS, the boundaries of CSA 10 encompass all of the area within the Urban
Services Line of Cayucos, including the public and private water companies located therein; and
WHEREAS, on August 17, 2004, the San Luis Obispo County Flood Control and Water
Conservation District (District) and the City entered into a Nacimiento Project Water Delivery
Entitlement Contract (City Nacimiento Contract) under which the City had an entitlement to
3,380 acre feet per year (AFY) of Nacimiento Project water; and
WHEREAS, on April 19, 2016, the District and the City entered into an amendment to
the City Nacimiento Contract which increased the City’s entitlement to 5,482 AFY of Nacimiento
Project water (City Nacimiento Entitlement); and
WHEREAS, on October 24, 2006, the District and the County entered into a Nacimiento
Project Water Delivery Entitlement Contract (County Nacimiento Contract) under which the
County had an entitlement to 25 AFY of Nacimiento Project water on behalf of CSA 10 Zone A
(CSA 10A) located in Cayucos; and
WHEREAS, on April 19, 2016, the District and the County entered into an amendment to
the County Nacimiento Contract which increased County’s CSA 10A entitlement to 40 AFY of
Nacimiento Project water (County Nacimiento Entitlement); and
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WHEREAS, on April 19, 2016, the District and Bella Vista MHP, LLC (BVMHP) entered
into a Nacimiento Project Water Delivery Entitlement Contract (BVMHP Nacimiento Contract)
under which BVMHP has an entitlement to 10 AFY of Nacimiento Project water (BVMHP
Nacimiento Entitlement); and
WHEREAS, neither CSA 10A nor BVMHP nor any other Cayucos Water Entity that has
entered into or may enter into a Nacimiento Project Water Delivery Entitlement Contract with
the District can take direct delivery of Nacimiento Project water because the Nacimiento
Project pipeline does not extend to Cayucos; and
WHEREAS, based on the foregoing, and on the Agreement for Exchange of Water
between the City and the County dated September 5, 2006 and its anticipated replacement by
this Agreement, both the County Nacimiento Contract and the BVMHP Nacimiento Contract
designate Unit T11, the City’s water treatment plant, as the place of delivery; and
WHEREAS, the City has water rights to Whale Rock Project water in accordance with the
City’s State Water Rights Board Permit Application No. 17114 (City Whale Rock Entitlement);
and
WHEREAS, it is anticipated that BVMHP will enter into an Agreement for Exchange of
Nacimiento and Whale Rock Water authorizing the County to exchange equal amounts of City
Whale Rock Entitlement water for Nacimiento Project water on an annual basis pursuant to the
terms of this Agreement on or around the Effective Date and that other Cayucos Water Entities
may enter into similar agreements with the County in the future.
NOW, THEREFORE, it is hereby mutually agreed between the Parties as follows:
1. Definitions.
(a) “Cayucos Area Water Organization” shall mean the County of San Luis
Obispo, the Paso Robles Beach Water Association, the Morro Rock Mutual Water Company and
the Cayucos Cemetery District.
(b) “Cayucos Water Entity” shall mean any water supplier within the
boundaries of CSA 10 that (i) has a contractual right to receive Nacimiento Project water from
the District, (ii) has signed an Agreement for Exchange of Nacimiento and Whale Rock Water
with the County that authorizes the County to exchange equal am ounts of Nacimiento Project
Water for City Whale Rock Entitlement water on its behalf on an annual basis and that has been
approved by the District and City and (iii) has a contractual right to receive treated water from
the Cayucos Water Treatment Plant. Notwithstanding the foregoing, the County, by and on
behalf of CSA 10A, shall be a Cayucos Water Entity so long as condition (i) is satisfied.
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(c) “Effective Date” shall mean the date as of which both Parties have signed
this Agreement.
(d) “Nacimiento Project” shall mean the project described in the Nacimiento
Water Project Environmental Impact Report SCH# 2001061022 certified in January 2004 and as
may be amended.
(e) “Water Year” shall mean the twelve-month period from October 1 of a
calendar year to September 30 of the immediately following calendar year, both dates
inclusive.
2. Term.
This Agreement shall become effective on the Effective Date and shall remain in
effect so long as any Cayucos Water Entity is contractually entitled to receive Nacimiento
Project water from the District.
3. Exchange of Water.
(a) The City and the County hereby agree to annually exchange an equal
amount of Nacimiento Project water for City Whale Rock Entitlement water subject to the
terms and conditions set forth herein. The Nacimiento Project water subject to the exchange
will be obtained by County as described in Section 1(b)(ii) of this Agreement from the Cayucos
Water Entities that annually agree to participate in the exchange with the exception that a
separate agreement is not required for Nacimiento Project water exchanged by and on behalf
of CSA 10A.
(b) Maximum Exchange. The maximum amount of water to be exchanged
pursuant to this Agreement in any Water Year is 50 AFY of Nacimiento Project water for 50 AFY
of City Whale Rock Entitlement water. The Parties understand that the amount of water
annually exchanged may be less than the maximum and that the amount of water which can be
exchanged under this Agreement during any Water Year is limited to the amount of Nacimiento
Project water that the Cayucos Water Entities are contractually entitled to receive from the
District and that the Cayucos Water Entities have authorized the County to exchange on their
behalf.
(c) Rights Conveyed. The Parties hereby agree and affirm that only
contractual rights are created by this Agreement and that this Agreement does not create or
convey any entitlement to, or property interest in, any water, water treatment facility or water
delivery facility.
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4. Point of Delivery.
(a) All City Whale Rock Entitlement water to be furnished to the County by
the City pursuant to this Agreement shall be delivered by the City to the County at the CSA 10
turnout to the Whale Rock Project transmission line located on the Cayucos/Morro Cemetery
property and/or via the existing Cayucos Area Water Organization groundwater well located
along Cabrillo Avenue. The City is not responsible for any costs incurred by County in
connection with the acceptance, measurement, conveyance, treatment or delivery of City
Whale Rock Entitlement water on behalf of the Cayucos Water Entities.
(b) All Nacimiento Project water to be furnished to the City by the County
pursuant to this Agreement shall be delivered to the City through the Nacimiento Water Project
conveyance system at the City of San Luis Obispo Water Treatment Plant Turnout (Unit T11) as
set forth in the Cayucos Water Entities’ Nacimiento Contracts. Said deliveries shall be on a 1 to
1 water exchange basis for the City’s Whale Rock Entitlement.
5. Measurement.
(a) All City Whale Rock Entitlement water furnished to the County pursuant
to this Agreement shall be measured by the County at the point of delivery specified in Section
4 of this Agreement with equipment satisfactory to the Parties. Said equipment shall be
installed, operated and maintained by the County. All determinations relative to the measuring
of the City Whale Rock Entitlement water shall be made by the County and, upon request of the
City, the accuracy of such measurement shall be investigated by the County and certified in
writing to the City. The City may inspect any such measuring equipment for the purpose of
determining the accuracy thereof, at its own expense at reasonable times upon reasonable
notice.
(b) All Nacimiento Project water furnished to the City pursuant to this
Agreement is subject to the terms and conditions of the Cayucos Water Entities’ Nacimiento
Contracts and the resolution of any delivery inaccuracies, errors or failure to deliver Cayucos
Water Entities’ Nacimiento Project water by District shall be resolved in accordance with the
Nacimiento Contracts.
6. Water Quality and Limitations of Liability.
(a) When the City takes delivery of the Cayucos Water Entities’ Nacimiento
Project water, the County assumes no responsibility for the quality of the water delivered to
City under this Agreement and the County does not warrant the quality of any such water for
any particular use. The City is aware that the delivery, quantity and quality of Nacimiento
Project water is subject to the terms and conditions of the Cayucos Water Entities’ Nacimiento
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Contracts and hereby agrees that the County shall not be responsible or liable for its failure to
perform any portion of this Agreement to the extent that such failure is caused by a failure of
any Cayucos Water Entity (other than the County) to perform under its Nacimiento Contract.
(b) When the County, on behalf of the Cayucos Water Entities, takes delivery
of the City Whale Rock Entitlement water, said water shall be at a quality that is substantially
the same as the quality of said water at the time it was taken from the Whale Rock Project. The
City shall assume no further or additional responsibility for the quality of the water to be
delivered to the County under this Agreement, and the City does not warrant the quality of any
such water for any particular use. The City shall consult with the County as to which of the
Whale Rock Project’s intake withdrawal levels to utilize to best optimize the quality of the City
Whale Rock Entitlement water supplied to the County. In all such cases, the City shall retain the
right to make the final decision regarding which intake withdrawal level to use, so long as the
City Whale Rock Entitlement water delivered to the County continues to come from the same
withdrawal level as the City Whale Rock Entitlement water delivered to the City for domestic
use.
7. Costs of Delivery.
(a) The costs associated with the acquisition and delivery of the City Whale
Rock Entitlement water to the County for ultimate delivery to the Cayucos Water Entities under
this Agreement shall be born exclusively by the City.
(b) The costs associated with the acquisition and delivery of the Cayucos
Water Entities’ Nacimiento entitlements to the City shall be paid by the Cayucos Water Entities’
to the District in accordance with their Nacimiento Contracts.
8. No Financial Remuneration between Parties.
The County and the City agree that the acquisition, delivery and treatment costs
under this Agreement are reasonable relative to the benefits received under this Agreement.
The County and the City further agree that although no formal estimate or accounting has been
made of their individual costs as of the Effective Date, each of their relative costs are
reasonable in relation to each other’s costs as of the Effective Date. It is the intent that this
Agreement shall not require the transaction of any financial consideration or remuneration
between the County and the City until such time as the County and the City mutually agree that
the following conditions have been satisfied: (1) the pumping, maintenance and treatment
costs of the Party seeking financial remuneration exceed the pumping, maintenance and
treatment costs of the party from whom remuneration is sought, and (2) the relative pumping,
maintenance and treatment costs of the exchanged water under this Agreement have changed
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so dramatically so as to justify the application of additional service charges for the pumping,
maintenance and treatment of exchanged water.
9. Annual Delivery Schedules.
(a) No Party is obligated to exchange any water under this Agreement for
any Water Year until the County submits a written water delivery schedule to the City as
provided in this Section 9.
(b) On or before forty-five (45) calendar days before the start of the
succeeding Water Year, the County shall submit in writing to the City a preliminary water
delivery schedule which sets forth the amounts, rate and times of the conveyance and delivery
of City Whale Rock Entitlement water as is desired by the County for each month of the next
succeeding one (1) Water Year. The amounts set forth in said schedule shall not exceed the
amount of water that the Cayucos Water Entities are eligible to receive pursuant to their
Nacimiento Contracts and that the Cayucos Water Entities have authorized the County to
exchange on their behalf. The City shall deliver the City Whale Rock Entitlement water to the
County at the amounts, rates and times specified in the schedule so long as said schedule is
consistent with the efficient and economical operation of City facilities.
(c) If the City does not believe the requested schedule is consistent with the
efficient and economical operation of City facilities, the City shall propose an alternate schedule
in writing within fourteen (14) days of the initial receipt of the preliminary water delivery
schedule. If either or both Parties do not find the proposed alternative schedule acceptable, the
Parties shall meet within thirty (30) days of submission of the alternative schedule and make
such modifications to the preliminary amounts, times and rates of the conveyance and delivery
of the requested deliveries, so as to match as closely as possible the County’s requests, but in a
manner which is consistent with the efficient and economical operation of County and City
facilities. The Parties shall continue to meet and confer until an acceptable schedule is agreed
upon.
(d) In addition to the reasons set forth in Section 10 below, the Parties
recognize that other long term foreseen and unforeseen events may preclude the exchange and
delivery of water from occurring on a 1 to 1 basis over any number of calendar months, thereby
resulting in a water exchange imbalance. Therefore, the Parties hereby agree that in the event
such a water exchange imbalance occurs, the Party receiving less water during any calendar
month(s) shall be delivered the quantity of water which it would have been furnished in the
absence of such imbalance as expeditiously as may be feasible.
(e) The County is aware that City Whale Rock Entitlement water will only be
available when City has water available in storage. Although the other Whale Rock Commission
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agencies may have water available in storage when the City does not, nothing in this
Agreement shall obligate, limit, diminish or affect in any way the water supplies of other Whale
Rock Commission agencies.
10. Curtailment of Delivery.
(a) The County acknowledges that it may temporarily experience a
discontinuance or reduction in the amount of City Whale Rock Entitlement water furnished to
the County during such time as the City is maintaining, repairing, replacing, investigating or
inspecting any of the portions of the Whale Rock Project facilities necessary for the furnishing
of water to the County. Insofar as it is feasible, the City shall give the County at least thirty (30)
days notice in advance of any such temporary discontinuance or reduction, except in the case
of emergency, in which case, while no notice need be given, the City shall inform the County of
such an emergency immediately after such emergency becomes known to the City. In the event
of such discontinuance or reduction, the City will upon resumption of service cause to be
delivered, as expeditiously as may be feasible, the quantity of the City Whale Rock Entitlement
water which would have been furnished to the County in the absence of such discontinuance or
reduction subject to the terms of 9(d) hereinabove.
(b) The City acknowledges that it may temporarily experience a
discontinuance or reduction in the amount of Nacimiento Project water furnished to the City
during such time as the District is maintaining, repairing, replacing, investigating or inspecting
any of the portions of the Nacimiento Project Facilities necessary for the furnishing of water to
the City. As the City is a party to the City Nacimiento Contract, the City will be provided notice
of any such curtailment by the District pursuant to the terms of such agreement. In the event of
such discontinuance or reduction, the County will, upon resumption of service, request that the
District cause to be delivered, as expeditiously as may be feasible, the quantity of Nacimiento
Project water which would have been furnished to the City in the absence of such
discontinuance or reduction subject to the terms of 9(d) hereinabove
11. Notices.
All notices required either expressly or by implication to be given by any Party
under this Agreement shall be signed by an authorized officer of the Party. All such notices shall
be deemed to have been given and delivered if delivered personally or if enclosed in a properly
addressed envelope and deposited with the United States Postal Service for delivery by
registered or certified mail. Unless and until formally notifie d otherwise, all notices shall be
addressed to the Parties as follows:
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To County: County Service Area No. 10, Department of Public Works
Room 206, County Government Center
San Luis Obispo, CA 93408
Attention: Director of Public Works
To City: City of San Luis Obispo, Utilities Department
879 Morro Street
San Luis Obispo, CA 93401
Attention: Utilities Director
12. Severability.
Any provision of this Agreement that is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent such
prohibition, unenforceability or nonauthorization without invalidating the remaining provisions
hereof affecting the validity, enforceability or legality of such provision in any other jurisdiction.
13. Amendment.
This Agreement may be amended or modified at any time by written agreement
approved and executed by both of the Parties.
14. Entire Agreement.
The foregoing constitutes the full and complete agreement of the Parties. This
Agreement supersedes all prior agreements and understandings, whether in writing or oral,
related to the subject matter of this Agreement that are not set forth in writing herein,
including, without limitation, the Agreement for Exchange of Water between the City and the
County dated September 5, 2006.
15. Assignment.
The rights and duties of a Party may not be assigned or delegated without the
written consent of the other Party. Any attempt to assign or delegate such rights or duties in
contravention of this Agreement shall be null and void.
IN WITNESS WHEREOF, the Parties hereto have each executed this Agreement on the
dates set forth below:
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CITY OF SAN LUIS OBISPO
By __________________________________
Authorized Representative
Date _________________________________
APPROVED AS TO FORM:
CITY ATTORNEY
By ________________________________
Date _______________________________
ATTEST:
CITY CLERK
By __________________________________
Date _________________________________
COUNTY OF SAN LUIS OBISPO
By __________________________________
Chairperson, Board of Supervisors
Date _________________________________
APPROVED AS TO FORM AND
LEGAL EFFECT:
RITA L. NEAL
County Counsel
By
Deputy County Counsel
Date
ATTEST:
County Clerk
By __________________________________
Deputy County Clerk
Date _________________________________
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