City of Brentwood
Home PageContact Us!Back

City Administration

2010 Council Goals and Strategic Plan | City Council Members | Calendar of Events | Elections
eNotification | Sub-Committees| Pledge of Allegiance Sign Ups | Invocation Sign Up
Live Streaming Council Meeting | Streaming PC Help |
Streaming Mac Help |

Current Council Agenda and Past Meeting Information

 

CITY COUNCIL AGENDA ITEM NO. 13

Meeting Date: September 11, 2007

Subject/Title: Adopt a Resolution approving and authorizing the City Manager to execute, a second amendatory agreement with the Contra Costa Water District pertaining to long term treated water services as a part of the Surface Water Treatment Facility Project and authorize the City Manager to agree to non-substantive changes to the agreement following a review of such changes by the Public Works and Finance Directors in consultation with the City Attorney

Prepared by: Jim Malberg, Assistant Director of Finance & Information Systems

Submitted by: Pamela Ehler, Director of Finance & Information Systems

RECOMMENDATION
Adopt a Resolution approving and authorizing the City Manager to execute, a second amendatory agreement with the Contra Costa Water District pertaining to long term treated water services as a part of the Surface Water Treatment Facility Project and authorize the City Manager to agree to non-substantive changes to the agreement following a review of such changes by the Public Works and Finance Directors in consultation with the City Attorney

PREVIOUS ACTION
On September 26, 1995, City Council approved Resolution No. 95-215, authorizing the execution of an agreement with the Contra Costa Water District for water supply.

On March 10, 1998, City Council approved Resolution No. 98-41, approving the principles of the agreement between East Contra Costa Irrigation District (ECCID), Contra Costa Water District (CCWD) and the City of Brentwood for Long-Term Water Supply and authorizing the City Engineer to continue negotiations with ECCID and CCWD to reach a mutually beneficial agreement for all parties.

On December 14, 1999, City Council approved Resolution No. 99-254, approving the agreements between East Contra Costa Irrigation District (ECCID), Contra Costa Water District (CCWD) and the City of Brentwood for long-term water supply, conveyance and treatment.

On August 12, 2003, City Council approved Resolution No. 2949, authorizing the City Manager to execute the amendment to the agreement with the Contra Costa Water District pertaining to treated water services.

On August 12, 2003, City Council approved Resolution No. 2944, authorizing the City Manager to execute a Professional Services Agreement for Raines, Melton & Carella, Inc. for the Design Contract for the Surface Water Treatment Facility – Phase I, CIP Project No. 562-56290.

On August 24, 2004, City Council approved Resolution No. 2004-206, authorizing the City Manager to execute an agreement with the Contra Costa Water District pertaining to long term treated water services as a part of the Surface Water Treatment Facility - Phase II, CIP Project No. 562-56290.

On December 14, 2004, City Council approved Resolution No. 2004-283, authorizing the City Manager to execute a Professional Services Agreement for The Covello Group, Inc. to provide construction management assistance for the Surface Water Treatment Facility – Phase I, CIP Project No. 562-56290.

On January 25, 2005, City Council approved Resolution No. 2005-23, approving the contract documents and award the construction contract for the Surface Water Treatment Facility – Phase I, CIP Project No. 562-56290, to Tidelands Construction Company and authorize the City Manager to execute the agreement and necessary documents.

On September 12, 2006, City Council approved Resolution No. 2006-220, approving and authorizing the City Manager to execute an amendatory agreement with Contra Costa Water District pertaining to long term treated water services as part of the Surface Water Treatment Facility – Phase II, CIP Project No. 562-56290 and amend the CIP and Water Enterprise Budgets.

BACKGROUND
The agreement between ECCID and Brentwood, approved by the City Council in December of 1999, provided the City with the first right of refusal of 14,800 acre-feet of water annually to be used for municipal and industrial purposes. Additionally, the City Council approved an agreement with CCWD in December of 1999 to resolve overlapping service boundaries, provided interim treatment of this water source at CCWD’s Randall-Bold Water Treatment Plant (RBWTP) and required both agencies to continue discussions for long treatment possibilities.

Staff from CCWD and the City have analyzed several options to provide the long term treatment of this water. The options ranged from the City constructing its own facility adjacent to the Randall-Bold Water Treatment Plant, to jointly expanding RBWTP with CCWD or jointly constructing a facility with CCWD. During the analysis of these alternatives it was determined that a “hybrid” approach was the most optimal and cost effective solution for both the City and CCWD. This approach consists of the City purchasing 3,200 acre-feet/year of existing treatment capacity in the RBWTP and then constructing a scaled down water treatment facility adjacent to the RBWTP.

The purpose of the amendatory agreement is to update, amend and further clarify portions of the August 24, 2004 agreement, which was amended September 12, 2006, between the City and CCWD that identified the responsibilities of each agency as it pertains to this proposed water treatment facility. More specifically, the City’s financial responsibility related to the financing of the Surface Water Treatment Facility and the issuance of Water Revenue Bonds, the remainder of the agreement is unchanged from the previous version approved by Council.

At the time this staff report was prepared, the CCWD legal counsel had not completed their review of the agreement. The resolution authorizes the City Manager to agree to non-substantive changes to the agreement. If there are any substantive changes to the agreement, as determined by the Public Works and Finance Directors in consultation with the City Attorney, the agreement will be brought back before Council for further consideration.

FISCAL IMPACT
It is anticipated that the City will realize a savings through the direct issuance of Water Revenue Bonds as opposed to CCWD issuing debt and charging the City for the cost of debt service. The actual savings will depend on market conditions in the tax-exempt bond market at the time of bond issuance and will be quantified at the time the financing package is brought before Council for consideration and approval.

Attachments:
Resolution
Agreement

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE A SECOND AMENDATORY AGREEMENT WITH THE CONTRA COSTA WATER DISTRICT PERTAINING TO LONG TERM TREATED WATER SERVICES AS A PART OF THE SURFACE WATER TREATMENT FACILITY PROJECT AND AUTHORIZE THE CITY MANAGER TO AGREE TO NON-SUBSTANATIVE CHANGES TO THE AGREEMENT FOLLOWING A REVIEW OF SUCH CHANGES BY THE PUBLIC WORKS AND FINANCE DIRETORS IN CONSULATION WITH THE CITY ATTORNEY

WHEREAS, on September 26, 1995, City Council approved Resolution No. 95-215, authorizing the execution of an agreement with the Contra Costa Water District for water supply; and

WHEREAS, on March 10, 1998, City Council approved Resolution No. 98-41, approving the principles of the agreement between East Contra Costa Irrigation District (ECCID), Contra Costa Water District (CCWD) and the City of Brentwood for Long-Term Water Supply and authorizing the City Engineer to continue negotiations with ECCID and CCWD to reach a mutually beneficial agreement for all parties.

WHEREAS, on December 14, 1999, City Council approved Resolution No. 99-254, approving the agreements between East Contra Costa Irrigation District (ECCID), Contra Costa Water District (CCWD) and the City of Brentwood for long-term water supply, conveyance and treatment; and

WHEREAS, on August 12, 2003, City Council approved Resolution No. 2949, authorizing the City Manager to execute the amendment to the agreement with the Contra Costa Water District pertaining to treated water services.

WHEREAS, on August 12, 2003, City Council approved Resolution No. 2944, authorizing the City Manager to execute a Professional Services Agreement for Raines, Melton & Carella, Inc. for the Design Contract for the Surface Water Treatment Facility – Phase I, CIP Project No. 562-56290.

WHEREAS, on August 24, 2004, City Council approved Resolution No. 2004-206, authorizing the City Manager to execute an agreement with the Contra Costa Water District pertaining to long term treated water services as a part of the Surface Water Treatment Facility - Phase II, CIP Project No. 562-56290; and

WHEREAS, on December 14, 2004, City Council approved Resolution No. 2004-283, authorizing the City Manager to execute a Professional Services Agreement for The Covello Group, Inc. to provide construction management assistance for the Surface Water Treatment Facility – Phase I, CIP Project No. 562-56290.

WHEREAS, on January 25, 2005, City Council approved Resolution No. 2005-23, approving the contract documents and award the construction contract for the Surface Water Treatment Facility – Phase I, CIP Project No. 562-56290, to Tidelands Construction Company and authorize the City Manager to execute the agreement and necessary documents.

WHEREAS, on September 12, 2006, City Council approved Resolution No. 2006-220, approving and authorizing the City Manager to execute an amendatory agreement with Contra Costa Water District pertaining to long term treated water services as part of the Surface Water Treatment Facility – Phase II, CIP Project No. 562-56290 and amend the CIP and Water Enterprise Budgets.

WHEREAS, the purpose of the second amendatory agreement is to update, amend and further clarify portions of the August 24, 2004 agreement, which was amended September 12, 2006, between the City and CCWD that identified the responsibilities of each agency as it pertains to this proposed water treatment facility; and

WHEREAS, the City’s financial responsibility related to the financing of the Surface Water Treatment Facility and the issuance of Water Revenue Bonds; and

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby:
1. Approve and authorize the City Manager to execute a second amendatory agreement with the Contra Costa Water District pertaining to long term treated water services as a part of the Surface Water Treatment Facility Project; and
2. Authorize the City Manager to agree to non-substantive changes to the agreement following a review of such changes by the Public Works and Finance Directors in consultation with the City Attorney.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 11th day of September 2007 by the following vote:

Amendatory Agreement between the
Contra Costa Water District and the City of Brentwood for Design, Construction, Operation and Maintenance and Financing of Water Treatment Facilities

This 2nd Amendatory Agreement is entered into this ___th day of _______7, between the Contra Costa Water District (herein called “CCWD”), a county water district organized and existing under Division 12, commencing with section 30000 of the California Water Code, and the City of Brentwood, a Municipal Corporation (herein called “City”).

1. Recitals of Fact

A. CCWD and the Diablo Water District (DWD) entered into a Joint Exercise of Powers Agreement dated June 6, 1989, wherein CCWD and DWD agreed to form an Authority to finance, build and operate the Randall-Bold Water Treatment Plant (RBWTP) and agreed to cost sharing for the project (herein referred to as 1989 JPA). The RBWTP has enough space to locate a new Water Treatment Plant on the site and excess capacity in some components that could be shared with a new Water Treatment Plant located on the site.

B. CCWD and DWD jointly own the RBWTP. Under the terms of the 1989 JPA, each party must agree to allow the City to participate in existing RBWTP facilities, and each party must agree to share in facilities constructed as part of the new Water Treatment Plant. CCWD and DWD have entered into an agreement dated September 29, 2004 that provides for the Sharing of Facilities and Land at the RBWTP relative to the City of Brentwood (Sharing Agreement) which allows for the construction of the City’s new pump station and pipeline on the RBWTP property, and whereby CCWD is entitled to receive from DWD exclusive and non-exclusive easements for the new pump station that become effective immediately upon expiration of the First Supplemental Lease. Any operating cost efficiencies resulting from sharing facilities with the City will be shared between DWD and CCWD according to the terms of the 1989 JPA.

C. The City has a permanent entitlement to 14,800 acre feet annually of surplus surface water purchased from East Contra Costa Irrigation District (ECCID) under an Agreement between the City and ECCID dated December 14, 1999.

D. ECCID, CCWD and the California Department of Water Resources entered into an agreement dated April 11, 1991, and amended that agreement on February 7, 2000, wherein it was agreed that CCWD could pump ECCID water at its Rock Slough and Old River intakes for Municipal & Industrial use within an area corresponding to ECCID’s water right place of use that includes the City.

E. CCWD constructed and operates the Los Vaqueros Reservoir to provide water quality and water reliability benefits to customers within the Los Vaqueros service area that includes a portion of the City that has a build-out demand of 3,200 acre feet per year.

F. CCWD has been treating a portion of the City’s ECCID water at the Randall-Bold Water Treatment Plant on an interim basis under an Agreement dated January 1, 2000 and amended September 24, 2003, with interim treatment scheduled to end in January 2009 by which time the City is required to have a long term treatment solution in place.

G. The September 24, 2003 Amendatory Agreement Between The Contra Costa Water District and the City of Brentwood provided for the City to purchase capacity rights for a portion of CCWD’s share of the RBWTP capacity to serve City customers within CCWD’s Los Vaqueros service area, and committed the parties to pursuing an agreement for long term treatment services for City customers outside of CCWD’s Los Vaqueros service area.

H. CCWD and the City conducted a joint Brentwood Treatment Options Study (Treatment Study) in 2003 to estimate the City’s demand for water over time and to determine the best alternative for long-term treatment of the City’s ECCID entitlement.

I. The City wishes to receive and CCWD wishes to provide treated water service at a new Water Treatment Plant (Brentwood WTP) to be located at the RBWTP site and equipped to treat the City’s ECCID water supply.

J. The City and CCWD found it in their best interests to enter into an Agreement effective on September 24,2004, in order to define the terms of CCWD providing and the City receiving treated water service for City customers outside of CCWD’s Los Vaqueros service area.

K. The City and CCWD found it in their best interest to enter into a 1st Amendatory Agreement on December 15, 2006 in order to further clarify and define the terms and intent of the original Agreement.

L. The City and CCWD now find it in their best interests to enter into this 2nd Amendatory Agreement effective on the date first set forth above, in order to amend the financing terms for the construction of the Brentwood WTP, and to further clarify and define the terms and intent of the Agreement.

2. Definitions
For purposes of this Agreement, the following definitions apply:

Capacity Right. This is a right to receive water treated to a specified quality at the specified facility in the specified maximum quantities for the useful life of the said facility. A Capacity Right does not confer title or ownership of the facility but merely reserves capacity in the facility. However, title to the Brentwood WTP facility may subsequently be transferred to the City pursuant to the terms of this agreement.

Shared Facilities. These are facilities that could serve both the Brentwood WTP and the existing RBWTP, including any applicable land. The Brentwood WTP may make use of certain existing RBWTP facilities, and the existing RBWTP may make use of certain new facilities to be built as part of the Brentwood WTP project. Potential Shared Facilities were identified in the Treatment Study. The extent and costs of Shared Facilities were determined during development of the Preliminary Design Report for the Brentwood WTP. Costs for Shared Facilities will be borne in a manner proportional to the respective Capacity Rights of CCWD, DWD and the City in the Shared Facilities. Any use of Shared Facilities will be in conformance with the 1989 JPA.

Design Capacity. The Brentwood WTP will be designed initially to produce between 4 and 12 million gallons per day (mgd) of treated water for delivery into the City’s distribution system (up to 15 mgd upon re-rating of the filters) as measured at the point of delivery on the downstream side of the Brentwood Pumps, and to be expandable to produce 30 mgd of treated water for delivery into the City’s distribution system.

Administrative Costs. These costs are determined by prorating the District’s administrative costs over the direct labor for conveyance and treatment of water at the Brentwood WTP.

O&M Costs. O&M Costs include all operating, maintenance and applicable Administrative Costs, including both fixed and variable costs, and a prorated value for wear and tear of facilities. Fixed and variable costs will be determined based on generally accepted accounting principles. Labor is considered a fixed cost independent of the quantity of water delivered. For purposes of this agreement, renewal and replacement is also considered a fixed O&M Cost. Power costs will be based on the metered quantity of power used at the Brentwood WTP and Brentwood Pumps at the unit rate of the power supply source.

3. LONG-TERM TREATED WATER SERVICE FOR NON-OVERLAP AREA

A. General statement. CCWD will divert the City’s ECCID water supply from the Delta and convey it via a new Canal turnout to the new Brentwood WTP where it will be treated under the terms and conditions described herein. Water thus treated will then be pumped to the City through the new Brentwood pump station at RBWTP dedicated to conveying treated water from the RBWTP (or the Brentwood WTP) to the City’s distribution system (Brentwood Pumps). The Brentwood WTP will be designed, constructed, owned, operated, and maintained by CCWD for the exclusive use of serving treated water to the City, unless ownership is transferred to the City pursuant to the terms of this agreement. The City shall pay CCWD all capital fixed and variable operating costs, including without limitation applicable Administrative Costs, for the Brentwood WTP. The City shall also pay CCWD for the purchase of any Capacity Rights in Shared Facilities, and related fixed and variable operating costs, including without limitation applicable Administrative Costs. CCWD shall divide such payments with DWD in accordance with the 1989 JPA.

B. New Treatment Facility

i. Description. The Brentwood WTP will be designed to initially treat up to 12 mgd, and to be expandable to an ultimate capacity of up to 30 mgd.

The facility will use conventional treatment including but not limited to settled water ozonation and granular activated carbon (GAC) filters. The treatment train will be completely hydraulically separate from the existing RBWTP treatment facilities to ensure that Los Vaqueros Project benefits do not accrue to those portions of the City located outside the CCWD service area. Where cost effective and consistent with the 1989 JPA, the Brentwood WTP and the RBWTP may share facilities. Potential Shared Facilities were identified in the Treatment Study and the buy-in costs for Shared Facilities are shown in Attachment A. Raw water will be conveyed to the Brentwood WTP as described in Section 3.C. Treated water will be pumped into the City’s distribution system using the Brentwood Pumps.

ii. Design. After consulting with the City, CCWD engaged the engineering firm Camp, Dresser & Mckee to prepare the design of the Brentwood WTP and to provide engineering services during construction. CCWD was fully responsible for managing all aspects of design. The City was provided copies of pre-design, 50%, 90% and 100% design submittals for its review. The City approved the final CDM pre-design report dated May 2005, and all substantial changes to the PDR in the design process were mutually agreed to by both the City and CCWD.

CCWD conducted a value engineering and independent constructability review before bidding the project for construction. CCWD and the City mutually determined which, if any, of the value engineering and or independent constructability recommendations to implement in the design.

As set forth in Section 4, the City as lead agency prepared and certified the Environmental Impact Report at the City of Brentwood Council meeting dated June 14, 2005 for the construction and operation of the Brentwood WTP, and CCWD is a responsible agency. The plans and specifications prepared by CCWD include mitigation measures for construction impacts identified in the City’s adopted Mitigation Monitoring and Reporting Plan.

100% design documents submitted to the City for review under this Agreement did bear the seal and stamp of a registered professional engineer or a licensed land surveyor, whichever is appropriate and when applicable.

The City shall review each document submitted in connection with the design and construction of the Brentwood WTP, including documentation for environmental compliance, and provide written comments, if any, on each such document (with the exception of the final submittal review which shall be completed within 14 calendar days of receipt), within 21 calendar days of receipt. CCWD shall respond to comments within 14 calendar days of receipt of the comments. The City will notify CCWD if any comment responses are unacceptable and the parties will mutually seek to immediately resolve the issue. If resolution cannot be reached, CCWD may proceed with the project using its best judgment and final resolution may be obtained through the dispute resolution process set forth herein. CCWD shall direct its design consultant to establish a comprehensive project schedule including milestones and all required City review, and to meet regularly with the City’s designated personnel throughout the design process.

The design of the Improvements shall at a minimum include the following stages:

Pre- design report. The pre-design report shall include at a minimum (1) schematic designs including general layout of facilities; preliminary Process & Instrumentation Drawings; major equipment design criteria and such other information as is needed to convey the intended course of design of the Improvements, (2) a summary of all soil and subsoil investigations necessary for the design of the Improvements including such seismic site specific information as is required, and submit all reports describing the results of such investigations, (3) a schedule of the design and construction activities which identifies sufficient milestone activities and user group reviews to track progress of the design work, (4) surveying and control information (which shall be consistent with previous survey work done at the Randall-Bold site), (5) water quality objectives for the treated water and (6) a feasibility analysis of shared facilities.

50 percent design submittals. At the 50 percent stage of design, CCWD shall submit to the City for its review (1) the drawings, plans and specifications for the project, which shall include table of contents, and (2) an updated cost estimate and project schedule.

90 percent design submittals. At the 90 percent stage of design as determined by CCWD and the City, CCWD shall submit to the City for its review (1) the draft final drawings, plans, calculations, and specifications for the project, which shall include a table of contents, (2) revised and updated cost estimates and schedule.

100 percent design submittals. CCWD shall submit to the City for its review (1) the final drawings, plans, calculations, and specifications for the project, which shall include a table of contents, and (2) final estimates for the cost of construction and schedule of the Brentwood WTP.

iii. Construction. CCWD competitively bid the construction of the Brentwood WTP as soon as practical within 60 days following completion of design. CCWD will provide overall construction management and, after consulting with the City, has selected Monterey Mechanical Company as a construction management firm for support services. The total change order authority for construction of the Brentwood WTP is 10% of the construction contract amount. Of that amount, 5% is under the exclusive authority of CCWD and will be used for non-discretionary changes. The remaining 5% will require approval from both CCWD and the City prior to authorizing the work. CCWD will make every effort to minimize change orders in connection with the construction of the Brentwood WTP.

Except for the change order authority just mentioned, CCWD will have complete responsibility for the construction of the Brentwood WTP, and shall determine substantial and final completion. During construction, CCWD will provide monthly informational reports to the City on budget progress, including approved and pending change orders and schedule. CCWD will continue to provide interim treated water service as allowed under Section 8.B of the 2003 Amendatory Agreement until treated water service is available from the Brentwood WTP.

iv. Ownership of the Brentwood WTP. CCWD will own the Brentwood WTP and be responsible for all aspects of ownership including maintaining the WTP in good working order at all times. The City will have an exclusive Capacity Right in the Brentwood WTP. The City’s Capacity Right in each Shared Facility is shown in Attachment A along with the proposed methodology for determining the City’s “buy-in” amount. A Capacity Right in Shared Facilities created pursuant to this agreement does not give any rights to use or benefit from Los Vaqueros Project facilities over and above any rights the City has previously obtained.

Use of the Brentwood WTP and any City capacity right in Shared Facilities to provide service to any party other than the City is prohibited unless the City agrees in writing and is fairly compensated for such use.

The land occupied by the Brentwood WTP (property) will remain in its current fee ownership. The City will be granted an exclusive leasehold interest in the property and/or a permanent easement for as long as the property is used for the purposes specified in the applicable Leasehold Agreement or easement documents.

CCWD agrees to transfer ownership of the Brentwood WTP, the Brentwood Pump Station, and new 2,000 kw generator excluding the fee ownership property, except those granted herein to the City upon its request, after all outstanding capital and operating costs incurred by CCWD for the WTP are recovered and paid in full by the City, and after completion of a mutually agreed upon operations plan for the Brentwood Pump Station and shared facilities, which shall not be unreasonably withheld. Provided such ownership transfer shall not result in CCWD being responsible for any costs pertaining to the Brentwood WTP. Any change in operator by the City after a transfer of ownership shall require the initial and ongoing approval of CCWD, which shall not be unreasonably withheld. The City may desire to have CCWD continue operating the Brentwood WTP upon transfer of ownership and the terms of such an arrangement shall be consistent with this agreement, however the terms and conditions related to fixed and variable operating costs may be renegotiated at that time. A transfer of ownership of the Brentwood WTP to the City will not affect any City capacity right in Shared Facilities. Should CCWD find it necessary or desires to release its interest in the Brentwood WTP, the City shall have the first right of refusal to assume ownership of the facilities.

v. Financing. CCWD will be completely and solely responsible for the payment of all construction costs of the Brentwood WTP, less any up front amounts provided by the City, subject to subsequent reimbursement by the City as described in subsections a. and b. below.

a. CCWD will provide interim financing during the construction phase of the Brentwood WTP through the issuance of tax-exempt commercial paper. The City will reimburse CCWD for the costs semi-annually related to issuance of tax-exempt commercial paper The City may at any time elect to defease the outstanding balance of tax-exempt commercial paper and provide funding for the remaining cost for construction of the Brentwood WTP
b. The City shall reimburse CCWD for all unpaid construction costs of the Brentwood WTP together with outstanding costs associated with the tax-exempt commercial paper, less any up front amounts provided by the City, within twelve months after the start of delivery of treated water to the City from the Brentwood WTP. Should the City issue or cause to be issued bonds or other evidences of indebtedness to finance the Brentwood WTP, the Brentwood WTP will not be used as collateral or otherwise be used as security unless ownership is transferred to the City pursuant to the terms of this agreement.

vi. Operations and maintenance. CCWD shall obtain a permit from California Department of Health Services to operate the Brentwood WTP and shall operate and maintain the plant in good working order and repair and in compliance with the requirements of all applicable laws and regulations. The City will pay all operating and maintenance costs for the Brentwood WTP and its proportionate share of operating and maintenance costs for any Shared Facilities in accordance with Section 3.D.i.c. To the extent feasible, and as mutually agreed by both parties, in designing the Brentwood WTP, CCWD has integrated operations of the RBWTP and Brentwood WTP to achieve cost savings at both plants. The Brentwood WTP was designed such that the respective operations at the RBWTP and Brentwood WTP do not adversely affect operations or increase the cost of operations at the other.

vii. Future capital improvements. While under its ownership, CCWD will be responsible to implement capital improvements to the Brentwood WTP and any Shared Facilities, including those related to regulatory requirements, renewal and replacement and other capital improvements in accordance with the following provisions.

a. Regulatory Requirements. CCWD will notify the City in writing of impending improvements needed to meet regulatory requirements (including without limitation protecting worker health and safety and conforming to CCWD standards reflected in the approved May 2005 Preliminary Design Report as such standards may be updated from time to time) as early as possible (as part of the Capital Improvement Program for the Brentwood WTP) and include City representatives in project development pursuant to the terms and conditions of this agreement. The City will fully reimburse the costs of such improvements at the Brentwood WTP, and shall reimburse the costs of such improvements in proportion to its Capacity Rights in any Shared Facilities in accordance with Section 3.D.i.d.

b. Renewal and Replacement. CCWD will develop and implement a renewal and replacement program for the Brentwood WTP and any Shared Facilities. Renewal and replacement costs of such improvements will be fully reimbursed by the City in accordance with Sections 3.D.i.d and 3.D.ii.b, respectively. Renewal and replacement schedules developed for CCWD’s Ten Year Capital Improvement Program and budget specific to the Brentwood WTP or any project having financial implications to the City will be provided to the City in writing by February 1 for review and approval by June 30.

c. Other Capital Improvements. The City will have the option of participating in other capital improvements proposed by CCWD from time to time for other reasons such as to increase operating efficiencies, and if the City chooses to participate in such other capital improvements, it shall reimburse the costs of such improvements in proportion to its capacity right in the improvement, on a payment schedule to be agreed upon in advance by the parties.

viii. Future expansions. In the event the City determines that it needs additional treatment capacity at the Brentwood WTP beyond the initial capacity, the City shall notify CCWD in writing at least three years in advance. The expansion would be designed and constructed either by CCWD under the same terms as the initial design and construction of the Brentwood WTP by amendment to this agreement or by the City with CCWD’s participation where required if ownership of the Brentwood WTP has been transferred to the City pursuant to the terms of this agreement. Expanded use of Shared Facilities, if any, would be under the same terms as for the initial capacity by amendment to this agreement. In the event facilities are shared, if additional capacity is unavailable in the Shared Facilities, then CCWD or the City shall construct new facilities as part of the expansion project. The cost of these new facilities would be fully reimbursed by the City minus any proportional share of such new facilities to be used by CCWD or others. Any expansion of the Brentwood WTP for the benefit of the City will be designed and constructed in a manner that avoids any impact on the operations of the RBWTP and will not cause future expansions of the RBWTP to cost more than they would have otherwise cost (had an expansion of the Brentwood WTP not been constructed for the benefit of the City). Similarly, any future expansion of RBWTP will be designed and constructed in a manner that avoids any impact on the operations of the Brentwood WTP and will not cause future expansions of the Brentwood WTP to cost more than they would have otherwise cost.

C. Water Supply and Conveyance

i. Description. CCWD will divert the City’s water supply at Rock Slough and wheel it (through the Contra Costa Canal until the existing canal capacity is no longer available (currently estimated to be approximately 2020) and thereafter through either an expanded canal or new pumping and transmission facilities with sufficient capacity dedicated to the conveyance of the City’s water supply) to the Brentwood WTP (this diversion may continue under the terms and conditions of this agreement beyond 2020 so long as such capacity remains available). As part of the initial WTP construction a new raw water turnout will be constructed from the Canal to the Brentwood WTP. Treated water leaving the Brentwood WTP will be pumped into the City’s distribution system from the new Brentwood Pumps.

ii. ECCID water supply. The City’s ECCID water supply diverted, conveyed and treated by CCWD under this Agreement, shall be used by the City in accordance with all applicable terms and conditions of the December 14, 1999 Agreement between Brentwood and ECCID, and the agreement dated April 11, 1991 among DWR, ECCID and CCWD, as such agreements may from time to time be amended. If either agreement has been superseded and replaced by a subsequent agreement between or among those parties, then the City’s use of ECCID water shall be in accordance with the agreements then in effect.

iii. Diversion at Rock Slough. CCWD will divert the City’s ECCID water supply for treatment in the Brentwood WTP at the Rock Slough intake. All diversions will be in accordance with all operational requirements imposed through Los Vaqueros Project biological opinions and other regulatory programs and permits.

iv. Use of Contra Costa Canal. CCWD will convey up to 30 mgd (exclusive of water treated under the City’s Capacity Right in RBWTP or system losses) of the City’s ECCID water supply in the Contra Costa Canal to the Brentwood WTP as long as capacity is available. When this excess capacity is no longer available (currently estimated to be 2020), either the City shall fund and CCWD will construct new conveyance facilities for the benefit of the City, or the City will participate financially in a joint project with CCWD to expand and or upgrade the existing canal. CCWD will notify the City in writing three years in advance of the date that it is anticipated that it will run out of Canal capacity to serve the City. CCWD will also notify the City within a reasonable time frame of opportunities to purchase a Capacity Right in CCWD Canal improvement projects that could result in increased capacity for the City (such as the Canal Replacement project). If the City participates in such a Canal improvement project, or directs CCWD to construct new City conveyance facilities, the parties will enter into a separate agreement that defines the terms and conditions of both parties’ obligations. The City will reimburse CCWD for such conveyance improvements in accordance with Section 3.C.v. It is the intent of this Agreement that CCWD will continue to convey the City’s ECCID water through the Canal until existing facilities are expanded or new facilities are constructed for the conveyance of such water.

D. Payment Obligations of City

i. New Treatment Facility
a. Upfront payment for design. The City has made an upfront payment of $4.2 million for a portion of the estimated costs for administration, planning and design of the Brentwood WTP. The costs for engineering services during construction and construction administration shall be paid to CCWD on a schedule to be agreed upon in advance by the parties but shall be after the Notice to Proceed is issued by CCWD for the construction of the Brentwood WTP. Estimates of these costs are shown on Attachment B to this agreement.

The City shall pay CCWD for the actual costs of design, including design of the treatment plant, a proportionate share of the design of any shared new facilities, integration of any shared existing facilities, and CCWD’s costs to manage design of the facilities including CCWD’s direct and Administrative Costs and consultant costs. Upon completion of the design, CCWD will prepare an accounting of all reimbursable costs for review by the City. If actual design costs are greater than the City’s prepayment, CCWD will invoice the City, and the City will pay the remainder within 90 days of receipt of the invoice. Subsequently the same procedure will be used for the reimbursement of consultant cost related to construction of the Brentwood WTP (engineering services during construction and construction administration) upon acceptance of the facilities by CCWD. If the prepayment is greater than actual costs, CCWD will at the discretion of the City, return the difference within 30 days, or use it to pay down the construction debt or debt service.

b. Financing of construction. CCWD will finance the construction of the Brentwood WTP and the City’s proportionate share of any new Shared Facilities, less any up front amounts provided by the City, through the issuance of tax-exempt commercial paper. The City will make semi-annual payments to CCWD on December 31 and June 30, including costs related to the tax-exempt commercial paper. The City shall remit payments within 60 days of receipt of the invoice from CCWD. The City will reimburse CCWD for all construction costs of the Brentwood WTP, less any up front amounts provided by the City, within twelve months of the start of delivery of treated water to the City from the Brentwood WTP. As long as the tax-exempt commercial paper is outstanding, the City agrees to provide assurance of payment through the issuance of an irrevocable letter of credit, surety bond or similar credit facility acceptable to CCWD.

c. Operations and Maintenance costs. On or before April 1 of each year, CCWD shall submit to the City a budget for the fiscal year commencing on the next July 1. The budget shall specify the amount of operation and maintenance expenses required for the ensuing fiscal year and set forth in reasonable detail the fixed and variable cost components of such maintenance and operation expenses. Rates shall be set to cover estimated annual fixed costs and variable costs based on the estimated delivery schedule provided to CCWD pursuant to Section 3.E.iii. The City shall review the budget and shall, within 60 days after receipt thereof, submit its comments to CCWD. The parties shall agree upon and approve a budget not later than July 31 when the first payment is due. . If such agreement is not reached, the parties will abide by the Dispute Resolution procedures set forth in Section 7. Estimated O&M per acre-foot treatment costs were determined in the Preliminary Design Report for treating water at the Brentwood WTP and delivering treated water to the City’s distribution system and are shown on Attachment C.

The allocation of such fixed and variable costs shall be adjusted within ninety (90) days of the close of each fiscal year to reflect the actual fixed and variable costs incurred. The City shall pay, or receive a refund or credit for any variable costs inappropriately charged to the City within thirty (30) days of finalizing the adjustment.

d. Capital improvements. Capital improvement costs required for regulatory compliance and renewal and replacement will be developed by CCWD through its Ten Year Capital Improvement Program and budget process and included in the annual fixed costs for the Brentwood WTP. CCWD shall not commence any capital improvement at the Brentwood WTP prior to budget approval by the City as described in Section 3.D.i.c. Capital improvements at Shared Facilities may be performed by CCWD without the City’s approval if CCWD determines that they are required to avoid impacting the Randall Bold WTP. The City shall pay costs of capital improvements on a schedule to be arranged on a project-by-project basis.

ii. Shared Facilities
a. Purchase of Capacity Rights. The City agrees to purchase Capacity Rights in the following Shared Facilities consistent with the May 2005 Preliminary Design Report and as further described in Attachment A. All Shared Facilities shall be subject to operations and maintenance, future capital improvements and future expansion consistent with Paragraphs 3.B.vi, 3.B.vii, and 3.B.viii. The calculation for the buy-in costs for the shared facilities is provided in Attachment A.

1. New Shared Facilities

Solids Lagoons – Two new solids lagoons are to be constructed on land solely owned by CCWD for the sole purpose of dewatering solids produced in the water treatment processes from the RBWTP and the Brentwood WTP. The total project cost will be shared between CCWD and the City in proportion to the solids lagoon capacity allocation as follows. The lagoons are sized for expected solids production from 30 mgd of water treatment capacity in the RBWTP and Brentwood WTP, with 15 mgd allocated to the RBWTP and 15 mgd allocated to the Brentwood WTP. CCWD and the City each have an equal share in the actual capacity of the solids lagoons. Final costs will be determined after construction is complete and will be based on actual total project costs, including land. The current total project cost estimate is $1,260,000, with $630,000 being the amount based on this estimate which would be allocated to the City however; the actual amount to be paid by the City to CCWD will be based upon actual costs verified by both CCWD and the City. CCWD will notify the City in writing when additional solids lagoon capacity is required for the Brentwood WTP which will occur no sooner than when the Brentwood WTP is expanded beyond 15 mgd capacity. Payment for the solids lagoons shall be made within 60 days upon acceptance of the Brentwood WTP by CCWD and delivery of treated water to the City. The City may elect to pay this amount off over 10 years at the market interest rate for municipal bonds with the City’s credit rating for the same financing term, which interest rate will be determined based on the municipal bond interest rate at the close of business the day preceding delivery of treated water to the City.

New Back-up Power Facilities – The City agrees to pay all cost for the new 2,000 kW generator that has been purchased as part of the Brentwood WTP and the new unit will be housed at the existing Randall-Bold facility. This generator shall become the property of the City upon the transfer of ownership of the WTP but may continue to be used as a shared facility at the City’s discretion. The cost of the new generator is estimated to be approximately $866,000. Payment for the New Back-Up Power Facilities shall be made within 60 days of successful site acceptance testing of the new generator. The City may elect to include these costs in the amount financed by CCWD for the Brentwood WTP to be repaid as part of the debt service payments described in Section 3.D.i.b.

2. Existing Shared Facilities

Main Power Supply Facilities – The City agrees to buy into the main power supply to the Brentwood WTP (which is being provided through existing 21 kV switchgear equipment at the RBWTP). The City shall pay CCWD a proportionate share of the cost of the existing 21 kV electrical infrastructure including the PG&E power supply drop from the transmission pole, the underground ductbank to the 21 kV switchgear, and infrastructure associated with the 21 kV facility. CCWD shall credit DWD its proportional share of the buy-in costs according to the 1989 JPA as identified in Attachment A. The buy-in cost for the City is based on plant capacity allocation (15 mgd for Brentwood WTP and 40 MGD for RBWTP) and shall be $72,000. The City shall share in all future maintenance, repairs, upgrades, improvements and replacements required for the main power supply facilities in the same proportion used to determine the original amount paid unless future plant capacity modifications dictate otherwise. Payment for the Main Power Supply Facilities shall be made within 60 days upon acceptance of the Brentwood Pump Station project by CCWD.

Existing Back-up Power Facilities – The City has bought into the existing Multi-Purpose Pipeline backup power facilities as a part of the overlap service area resolution consisting of the single 2,000 kw standby power generator and supporting infrastructure. The City shall share in all future maintenance, repairs, upgrades, improvements and replacements required for the back-up power supply facilities based on plant capacity unless future plant capacity modifications dictate otherwise.

RBWTP Roads and Access – CCWD and DWD have agreed to allow the City to use RBWTP Roads and Access for accessing the Brentwood WTP on an interim basis with conditions specified in a letter agreement between them dated June 2, 2005, which is attached as Attachment H. The City has reviewed these conditions and is evaluating its options. The City agrees to commit to a long term arrangement for accessing the Brentwood WTP prior to construction being completed for the Brentwood WTP project. It is the intent of CCWD and the City to pursue buy-in of the existing RBWTP Roads and Access as a shared facility.

b. Capital Improvements. The City shall pay its proportionate share of renewal and replacement costs for any Shared Facilities as part of the annual fixed costs of the Brentwood WTP, provided that the City shall not be obligated to pay any renewal or replacement costs prior to budget approval as described in section 3.D.i.d. The City shall pay its proportionate share of capital improvements for regulatory or other purposes on a schedule to be arranged on a project-by-project basis and shall be pursuant to the “Future Capital Improvements” section (Section 3.B.vii) of this agreement.

c. Operations and maintenance costs. The City shall pay its proportionate share of the fixed O&M costs of any Shared Facilities, and its actual costs for the variable O&M costs of any Shared Facilities. Estimates of these costs shall be included in the annual budget developed by CCWD and submitted to the City for review under Section 3.D.i.c, shall be included in the established monthly charge, and shall be subject to the true-up provisions described therein. Estimated per acre-foot O&M costs for potential Shared Facilities are included in the costs shown on Attachment C to this agreement.

d Land Rights and Costs – The City will be granted a leasehold interest followed by a permanent easement for use of RBWTP land owned by CCWD and DWD, and will be granted a permanent easement on land owned solely by CCWD. A description of the contemplated land rights and the estimated cost to be paid by the City is provided in Attachment F. Within 60 days of executing this Agreement, the City shall pay the amount due for land costs associated with those facilities identified in Attachment F as the Pump Station Facilities, Treated Water Pipeline, and Temporary Construction Easements using the unit land values, dimensions, and easement adjustment factors identified in Attachment F. The remainder of the payment for the Water Treatment Facilities shall be due upon acceptance of the project by CCWD and the initiation of delivery of treated water to the City from the Brentwood WTP. The final amount payable to CCWD for the Water Treatment Facilities will be adjusted if the facilities encompassed by the easement boundaries are modified during construction. Final land costs will be determined using the unit land value factors identified in Attachment F and the final easement boundaries. Easement adjustment factors for the main water treatment facilities will be proposed by the appraiser mutually agreed to by CCWD and the City, Diaz, Diaz & Boyd, Inc.

The easements are provided in Attachment G and will be recorded by CCWD 30 days prior to CCWD receiving payment from the City. Payment for all easements must occur prior to the initiation of delivery of treated water to the City from the Brentwood WTP. Legal descriptions will be developed by CCWD and approved by the City. Following is a summary description of various uses for the property and the land rights to be granted:

1. Water Treatment Facilities –The water treatment facilities are located on land owned by CCWD. Exclusive easements will be recorded for the main water treatment facilities and the washwater lagoons. Non-exclusive easements will be recorded for the raw water pipeline, stormwater/sewer pipelines, utility corridor from the main water treatment facilities to the washwater lagoons, and the utility corridor from the washwater to the solids lagoons.

2. Pump Station Facilities – The pump station facilities are located on land owned by CCWD and DWD. Pursuant to the Sharing Agreement between CCWD and DWD, the City will be granted a leasehold interest during the term of the First Supplemental Lease in the form of an exclusive easement for the City’s pump station site, and in the form of a non-exclusive easement for the pipelines and appurtenances related to the pump station site. Upon expiration of the First Supplemental Lease (which expires on October 1, 2020), CCWD will grant to the City at no additional cost over and above the amounts shown in Attachment F an exclusive easement in the pump station site and a non-exclusive easement for pipelines and appurtenances related to the pump station.

3. Treated Water Pipeline – The treated water pipeline is located on property owned by CCWD. The City will be granted a non-exclusive easement to maintain the treated water pipeline and related facilities.

4. Temporary Construction Easements – The City was granted a right of entry on land owned by CCWD and DWD for the construction of the pump station and by CCWD for the treated water pipeline facilities.

e. RBWTP Roads and Access - A temporary construction entrance on CCWD property will be used during construction of the Brentwood WTP. Use of the existing RBWTP roads and access for the Brentwood WTP will be in accordance to terms and conditions agreed upon by the City, CCWD, and DWD. In the event existing RBWTP roads and access are not utilized, the City shall pay for and construct a new entrance off of Empire Avenue.

iii. Conveyance facilities
a. Conveyance costs. The City will pay its proportionate share of the costs incurred by CCWD to divert the City’s ECCID water at Rock Slough and convey it to the Brentwood WTP, including O&M Costs, USBR wheeling charges (so long as the Canal is used), and a prorated value for wear and tear of facilities. The City shall pay its proportionate share of the fixed O&M costs of the Canal and its actual variable costs. Estimated conveyance costs shall be included in the annual budget developed by CCWD and submitted to the City for review and approval under Section 3.D.i.c , and shall be separately charged at an established monthly rate, and shall be subject to the true-up provisions described therein. Estimated conveyance costs are shown on Attachment D to this agreement.

b. Reserve Account for Future Conveyance. To ensure adequate funding is available for the City’s portion of new conveyance facilities the City has elected to include these costs in the City’s development fee program. Regular deposits will be made into an account identified for this purpose and shall be under the full control of the City. By signing this agreement, the City is ensuring that its fair share of these improvements will be available either by adequate funds accumulated in this aforementioned account or by using future revenues to secure adequate financing. The amount to be paid to CCWD for these improvements will be pursuant to a payment schedule to be agreed upon in advance by the parties. For purposes of determining the amount to include in its development fee for future conveyance facilities, the City shall use the estimated cost for a 30 mgd conveyance facility from Rock Slough to the Brentwood WTP as shown on Attachment E to this agreement.

E. Treated Water Delivery

i. Point of delivery. The point of delivery shall be the discharge side of the Brentwood Pumps used to deliver treated water to the City’s distribution system from the Brentwood WTP. Risk of loss and responsibility for the carriage, handling and storage of water shall pass to the City at the point of delivery.

ii. Measurement of quantities of water. The quantity of the City’s ECCID water conveyed under this Agreement shall be the quantity measured at the point of diversion from the Contra Costa Canal into the Brentwood WTP, plus a prorated share of Canal losses (currently estimated to run between 5 and 7 percent). The quantity of water treated at the Brentwood WTP shall be the quantity measured at the point of diversion into the Plant and shall be compared with the amount of water measured at the discharge side of the Brentwood Pumps. Plant losses shall be kept at a minimum. Consistent with good operating practices, no water from the Brentwood WTP will be used for in-plant uses in the RBWTP and no water from RBWTP will be used for in-plant uses at the Brentwood WTP. The quantity of return water from the shared solids lagoon to each plant (RBWTP & CBWTP) shall be proportional to the amount of water/solids each plant contributes to the lagoons, equalized on an annual basis.

iii. Delivery schedules. The City shall provide estimates of monthly water use by March 1 for the fiscal year beginning in July of that same calendar year. The City’s anticipated monthly delivery schedules shall not constitute a commitment by the City to receive the amount of water set forth therein but shall establish the monthly scheduled amount of treated water to be delivered for planning and budgetary purposes.

Prior to delivery of water to the City from the Brentwood WTP, CCWD and the City will agree upon an operations plan that sets forth procedures, guidelines and criteria for deliveries from the Brentwood WTP to the City distribution system.

iv. Service interruption. The parties recognize that CCWD may be required by operational constraints from regulatory requirements, emergency conditions, court order or otherwise to curtail some or all of its diversions of the City’s ECCID water. In such circumstances, CCWD shall provide the City with as much advance written notice of any curtailments of ECCID water diversions as is practical. In the notice, CCWD shall inform the City of the reason for curtailing the diversion, the portion of the diversion to be curtailed and the anticipated duration. In the event of an emergency threatening imminent harm to human life or property, CCWD shall notify the City that the ECCID water diversions will be curtailed at the earliest possible time, and shall keep the City informed of the status and extent of the diversions, and the expected time the diversions will be curtailed, until the emergency situation is resolved and regular diversion service is restored. Additionally, CCWD shall coordinate with the City in developing the annual ECCID pumping schedule required under the 1991 Agreement between California Department of Water Resources, ECCID and CCWD, and the annual operations plan required under Biological Opinions for the Los Vaqueros Project to help minimize service interruptions related to potential curtailment of diversions of the City’s ECCID water supply at Rock Slough.

CCWD shall make all reasonable efforts to provide continuous service to the City in accordance with this agreement, but may temporarily reduce or discontinue the delivery of water to the City for the purpose of necessary inspection, maintenance, repair, or replacement of any portion of the Brentwood WTP or Shared Facilities. CCWD shall provide the City with as much advance written notice as is practicable of the timing and duration of any planned discontinuance or reduction, and, except in emergency situations, will not proceed without approval of the City, which will not be unreasonably withheld. CCWD shall not be liable for failure to deliver water to the City if such failure is caused by any reason beyond the reasonable control of CCWD. Any curtailment of water related to malfunction of Shared Facilities shall be shared proportionally.

F. Water Quality

CCWD is solely responsible, as operator of the Brentwood WTP, for ensuring the quality of treated water, and for all aspects of compliance with applicable federal and State water quality regulations and standards, up to the point of delivery. The City is solely responsible for ensuring water quality, and for all aspects of compliance with applicable federal and State water quality regulations and standards downstream of the point of delivery and throughout the Brentwood distribution system. Subject to the preceding provisions of this paragraph, City shall be responsible to receive and respond to communications from customers within the City relating to water quality concerns.

The City acknowledges that chloramines will be used as the residual disinfectant at the Brentwood WTP consistent with the operation of the RBWTP. The City shall be fully responsible for all issues related to the mixing of treated CCWD water with Brentwood water, including but not limited to dealing with all regulatory agency issues related to disinfection and disinfection by-products.

G. CCWD Representation

CCWD represents that, as between CCWD on the one hand, and DWD and/or the Contra Costa Water Authority on the other, CCWD has the unconditional and absolute right and authority to enter into this Agreement, to make the covenants and promises contained herein and to grant to the City all of the rights set forth in this Agreement. CCWD hereby agrees to defend and indemnify the City from all damages and costs of whatever nature arising from a breach of this representation and/or any claim or assertion by DWD or the Contra Costa Water Authority to the contrary.

4. ENVIRONMENTAL COMPLIANCE, PERMITS AND APPROVALS

The City shall be the lead agency under CEQA and shall be fully responsible for compliance with CEQA and for all permits associated with its purchase and use of ECCID water supply, treatment at the Brentwood WTP, and distribution to its customers. CCWD will be a responsible agency under CEQA and will be responsible for compliance with the approved CEQA document as it relates to construction and operation of the Brentwood WTP. CCWD will be responsible for all permits related to construction and operation of the Brentwood WTP, including NEPA compliance for the new turnout from the Canal. The City will reimburse CCWD for all costs incurred in obtaining these permits.

As long as CCWD diverts the City’s ECCID water at Rock Slough, such diversions will be governed by the Los Vaqueros Project biological opinions and other applicable biological opinions and permits. Prior to the combined Delta diversions of the City and CCWD reaching 195,000 af/year (or 148,000 af/yr prior to approval of the East County Habitat Conservation Plan by U.S. Fish and Wildlife Service), CCWD will initiate, through the U.S. Bureau of Reclamation, re-consultation of the biological opinions required to divert any water over an above the 195,000 af/year. The City will pay its proportionate share of the costs of re-consultation including any mitigation required.

CCWD’s performance under this Agreement shall not conflict with its permits or other service arrangements, including the 1989 JPA with DWD, the CCWD/ECCID/DWR Agreement dated April 11, 1991, bond documents or state water rights permits, as such may be superseded, replaced or amended over the life of this agreement.

5. AUDITS

Each party may at its expense conduct a financial audit of the other party in matters pertinent to this Agreement upon written request.

An audit shall not be conducted more frequently than annually and the right to audit shall not exceed the four fiscal years preceding and including the notice of audit. Each party will maintain true and complete records and will retain such records for at least four years. Any claim arising from the audit will not be barred by the statute of limitations so long as the claim is filed within one year of concluding the audit.

The agency being audited shall provide such assistance as may be reasonably required in the course of such audit. Any such audit shall be conducted in accordance with generally accepted auditing principles for audits of State and local governmental units. The accounting shall be maintained substantially in accordance with the Governmental Generally Accepted Accounting Principles (GAAP) for State and Local Governments.

In the event the audit determines that the City has either been overcharged or undercharged for the services provided by CCWD under this Agreement, the City shall either be credited against future charges for the amount it overpaid or pay CCWD the additional amount owed. Amounts owed will be due and payable within 30 days of receipt of invoice.

6. TERMINATION

No part of this agreement or amendment may be modified or terminated without written concurrence of each agency’s governing body. It is further understood by the City and CCWD that the Capacity Rights in the Brentwood WTP and in Shared Facilities, once purchased by the City under the terms described in section 3.D.ii of this Agreement, shall be for the life of the particular facility as further described herein, assuming that the City pays all amounts (including without limitation rates and charges) described herein for the services provided by CCWD.

In the event this agreement is terminated, the City shall pay to CCWD all outstanding actual capital and operating costs incurred by CCWD on behalf of the City for the WTP. Such payment shall be made prior to ninety (90) days after the effective date of termination.

The provisions of this section shall prevail and survive notwithstanding other provisions of this agreement.

7. DISPUTE RESOLUTION

A. Mediation. The parties agree to first submit any dispute arising out of or in connection with this Agreement to a mutually acceptable professional mediator and to negotiate in good faith toward reaching an agreement with respect to the dispute. In such event, neither party shall proceed with arbitration until the completion of the mediation, the mediation being an express condition precedent to further remedies. The parties may, however, agree in writing to proceed directly to arbitration.

B. Binding Arbitration. Should the parties be unable or unwilling to resolve their dispute through the mediation process provided in Section 7.A above, either party may give written notice to the other party and elect to have the matter resolved by final and binding arbitration in accordance with the rules and procedures of the arbitrator selected in accordance with this Section 7.B (the “Arbitrator”). The party seeking arbitration shall set forth in its notice the particulars of its claims and shall state with specificity the issue(s) to be submitted to arbitration and the relief sought. Within thirty (30) days of the date of the election to arbitrate, the parties shall select a single, mutually agreeable arbitrator. If the parties are unable to agree, they shall request that the Judicial Arbitration and Mediation Service, Inc. (“JAMS”) if such entity is then in existence, appoint an Arbitrator in accordance with then-current procedures. The arbitrator shall be a retired judge of the Superior Court of California, or the Court of Appeal of California, or a retired judge of the United States District Court sitting in California. If JAMS is not in existence, the Presiding Judge of the Contra Costa Consolidated Court of Unlimited Jurisdiction shall appoint an Arbitrator in accordance with its then-current procedures.

The rules and procedures for arbitration shall be as follows:

The Arbitrator shall be selected and arbitration shall be conducted within a reasonable time, but in no event later than ninety (90) days after the date upon which the demand for arbitration is filed.

The arbitration proceedings shall be conducted in Contra Costa County, California, at a time and location as agreed to in writing by the parties, or in absence of an agreement, as designated by the Arbitrator.

Subject to the same rules pertaining to privileged communications and attorney work product that would apply if the proceeding was filed in the courts of the State of California, the Arbitrator shall have the authority to make all decisions regarding the relevance, materiality, and admissibility of all evidence offered at the arbitration.

The Arbitrator may issue any remedy or relief, whether provisional or permanent, including but not limited to a default judgment, which the parties could have obtained under the law applicable in courts of the State of California under the same factual circumstances, and the Arbitrator shall follow and otherwise employ the standards for issuing such relief as defined by California law; provided, however, that the Arbitrator shall have no authority or jurisdiction to enter an award for consequential, special, exemplary or punitive damages. The Arbitrator may also grant such ancillary relief as is necessary to make effective the award.

Both parties may conduct discovery as if the matter were pending before a Superior Court of the State of California and the Arbitrator shall have the full power of the State of California to issue and enforce subpoenas and to award sanctions. Either party shall have the right to demand in writing that the other party provide a list of witnesses it intends to call at the hearing, designating which witnesses will be called as expert witnesses, and a list of documents it intends to introduce at hearing. The responding party’s list(s) shall be served personally or by registered or certified mail on the requesting party, with a copy to the Arbitrator, at least thirty (30) days before the hearing.

Each party shall have the right to be represented by counsel.

No later than sixty (60) days following closing of the arbitration hearing, the Arbitrator shall make an award and issue a written opinion consisting of findings of fact and conclusions of law and setting forth the bases of the award. The Arbitrator may include in his or her award pre-award interest and post-award interest at the legal rate where authorized by law. The party against whom the award is made or remedy or relief ordered shall have thirty (30) days after receipt of the award or order to commence and thereafter diligently pursue to completion any action or proceeding in any court of the State of California of appropriate jurisdiction located in the County of Contra Costa to obtain judicial review of the award or order. If the award of order is mailed, it shall be deemed to be received within five days after deposit in the mail.

If no such action or proceeding is timely commenced, the award or order shall thereupon immediately become final. The party against whom the award is made or remedy or relief ordered shall within thirty (30) days after the award or order becomes final make full payment and/or commence and thereafter diligently pursue to completion any other action required by the award or order. The party in whose favor the award is made may request and obtain from any court of the State of California of appropriate jurisdiction located in the County of Contra Costa a Judgment upon the award rendered by the Arbitrator, which may thereafter be entered in the records of said court.

If an action or proceeding is timely filed in any court of the State of California of appropriate jurisdiction located in the County of Contra Costa to obtain judicial review of the award or order, the parties shall have the right to seek vacation or modification of any portion of the award that is based in whole, or in part, on an incorrect or erroneous ruling of law, in addition to the limited statutory right to seek vacation or modification of an award pursuant to the law applicable to non-judicial arbitration. The findings of fact of the Arbitrator shall be binding on all parties and shall not be subject to further review except as otherwise allowed by the law applicable to non-judicial arbitration.

The Arbitrator shall be paid a per diem or hourly charge as established at the time of appointment. Each party shall bear its own attorneys’ fees and costs in presenting its case. All other actual costs of conducting the arbitration, including without limitation the administrative fee and the Arbitrator’s compensation, shall be shared equally.

This arbitration clause shall be interpreted under the arbitration laws of the State of California and not the Federal Arbitration Act, 9 U.S.C.§ 1. Except as otherwise provided in this Agreement, any motion, application, complaint or proceeding arising out of or relating to this arbitration clause shall be determined in accordance with the law of the State of California.

Unless otherwise provided in this Agreement or otherwise agreed in writing, the parties shall continue to perform their respective obligations under this Agreement during the pendency of arbitration proceedings.

Except as modified or stated to the contrary in this Section 7, the rules and procedures of the Arbitrator in effect at the time of the arbitration shall apply to the arbitration procedure.

8. INDEMNIFICATION

Each party shall defend, indemnify and hold harmless the other party, its officers, directors, employees and agents, from and against any loss, cost or expense, including reasonable attorneys' fees, where such loss, cost or expense is caused, or claimed or alleged to be caused, by the sole negligence or willful misconduct of the indemnifying party, or its officers, directors, employees or agents, or by a breach of any obligation of this Agreement by the indemnifying party.

Where such loss, cost or expense is caused, or claimed or alleged to be caused, by the negligence or willful misconduct of both parties, or their officers, directors, employees or agents, or by a breach of any obligation of this Agreement by both parties, each party shall defend, indemnify, and hold harmless the other party in proportion to their proportionate fault as determined by mutual agreement or by arbitration or judicial decree.

9. ENTIRE AGREEMENT

This 2nd Amendatory Agreement, together with any other written document referred to or contemplated by it embody the entire Agreement and understanding between the parties relating to the subject matter of it. It replaces in its entirety the First Amendatory Agreement between the parted dated December 15th, 2006.


IN WITNESS THEREOF, the parties hereto have made and execute this Agreement as of the date and year first written above.

CITY OF BRENTWOOD CONTRA COSTA WATER DISTRICT


By:______________________________


By:______________________________
Walter J. Bishop, General Manager



Approved as to Form:

_________________________________
City Attorney
Approved as to Form:

_________________________________
District Legal Counsel


 

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov