R 3476
"
RESOLUTION NO. 3476
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE APPROVING A WATER SUPPLY CON-
TRACT WITH THE SAN LUIS OBISPO COUNTY FLOOD
CONTROL AND WATER CONSERVATION DISTRICT
WHEREAS, the City Council ("Council") of the City of Arroyo Grande ("City") has
been presented with a form of Water Supply Contract (the "Contract") by the San
Luis Obispo County Flood Control and Water Co~servation District (the "District"),
respecting the water to be provided through the District's Lopez Dam facility,
including its appurtenances (collectively, the "Facility"); and
WHEREAS, the City has heretofore purchased water from the Facility for its water
enterprise, pursuant to an existing water supply contract with the District; and
WHEREAS, City now wishes to insure the availability of water from the Facility and
to that end wishes to approve the terms of the Contract and to authorize its
execution.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby find and determine as follows:
1. The foregoing recitals are true and correct;
2. The terms and provisions of the Contract, as presented to and reviewed by this
Council, are hereby approved, and the Mayor is hereby authorized and directed
to execute the Contract in the name and on behalf of the City, in substantially
the form attached hereto as Exhibit "A;" and
3. This Resolution shall take effect immediately upon its adoption.
On motion of Council Member Runels, seconded by Council Member Tolley, and on
the following roll call vote, to wit:
AYES: Council Members Runels, Tolley, Dickens, Ferrara, and Mayor Lady
NOES: None
ABSENT: None
the foregoing Resolution was passed and adopted on this 22nd day of August, 2000.
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RESOLUTION NO. 3476
PAGE 2
MI~i~
ATTEST:
cJawJVl-
KELL K. ETMORE. DEPUTY CITY CLERKI
DIRECTOR OF ADMINISTRATIVE SERVICES
APPROVED AS TO FORM:
~
RICK TERBORCH. INTERIM CIT- MANAGER
APPROVED AS TO FORM:
-
CONTRACT BETWEEN
SAN LUIS OBISPO COUNTY FLOOD CONTROL
AND
WATER CONSERVATION. DISTRICT
AND
THE CITY OF ARROYO GRANDE
FOR A WATER SUPPLY
Dated as of
August 22, 2000
.
TABLE
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TABLE OF CONTENTS
Page No.
Article 1. Definitions ...,.................... .....:................ .....:...... ..........................................................3
Article 2. Tenn of Contract.............. ..... ................................ ...... .................,............................. .11
Article 3. Validation..................................... ..... ................. ........,.........;... ................................... .12
Article 4. Distribution and Sale of Project Water .......................................................................13
(A) Legally Required Water Releases ............................................................................. .13
(B) Entitlements..... .................. ......... .......... ............... ........ ................ ..,............................ .13
(C) Surplus Water Rates...... ...... ...... ......... ........ .................. ............................................. .14
(D) Surplus Water................................................... .... ...... ............................................... .15
Article 5. Water Shortages...................................................... ................................................... .15
Article 6. Completion of Seismic Remediation Improvements ..................................................16
Article 7. Delivery of Water ...................,............:.......................................... ................ ...... ... ....18
Article 8- Measurement.............................. ....................... ......................................................... .18
Article 9. Time for Delivery of Project Water ............................................................................19
Article 10. Responsibility for Delivery and Distribution of Water Beyond Delivery Points .......20
Article 11. Operation and Maintenance of Project and Water Enterprise.....................................20
Article 12. Water Quality........................ ........... ......................... ................................................. .24
Article 13. Curtailment of Delivery of Project Water for Maintenance Purposes ........................24
Article 14. Rate and Method of Payment..................................................................... ...... ...... .....25
(A) Allocation of Total Project Costs and Debt Service...................................................25
(B) Agency Contract Payments ..................................................................... .......... ... ......26
(C) Agency Credits against Contract Payments................................................................27
(D) Quarterly Variable Charges ............................................................ ........ ............. ...... .29
(E) Use by District of Total Contract Payments ..............................................................29
Article 15. Take-or-Pay Obligation of Agency.................................................................... ....... ..30
.
Article 16. Pledge; Establishment and Collection of Rates and Charges .....................................30
TABLE 11
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Article 17. Default.. ............ ................... ....... ................. ................ .............................................. .31
Article 18. Failure to Levy, Set or Collect Taxes, Rates and Charges..........................................33
Article 19. Area Served by Agency ..............................................................................................34
Article 20. Changes in Organization of Agency ...........................................................................34
Article 21. Agency's Obligations Several and Not Joint;Limited Step-up Provisions and
Reimbursement ........... .............. ...................... .......... .............................................. .34
Article 22. Contracts to Be Unifonn ............................................................,..,..,......... ........ ..... ....36
Article 23. Amendments...... ........... .......... ................ ..................... ..............................,. .............. .36
Article 24. Opinions and Detenninations; Good Faith; Infonnation to Be Provided to Zone 3
Advisory Committee.................. ....... .............. ............ ..............................................38
Article 25. Waiver of Rights........................... ....... .......................................................................3 9
Article 26. Notices......................................................................... ........................ ,.,.,....................39
Article 27. Assignment........ ....................... ......... .........................................................................3 9
Article 28. Inspection of Books and Records ...............................................................................40
Article 29. Severability........................ ........... ............................................................................. .40
Article 30. Water Right..................... .......................... .................. ............................................... .41
Article 31. Wheeling of Water ...............................................................,..,..................... ......... .....41
Article 32. Execution in Counterparts ........... .......................... ........................................,....,...... .42
Article 33. Goveriring Law................ ................................. ......................................................... .42
EXECUTION........ ......................................... ..... ................................. ........................................; .43
TABLE 1ll
CONTRACT BETWEEN SAN LUIS OBISPO COUNTY
FLOOD CONTROL AND WATER CONSERVATION
DISTRICT AND THE CITY OF ARROYO GRANDE
FORA WATER SUPPLY
This Contract (the "Contract"), made this 22nd day of August, 2000, by and between
the San Luis Obispo County Flood Control and Water Conservation District (the "District"),
established under and pursuant to Chapter 1294 of the 1945 Statutes of the State of California (the
"State") and the City of Arroyo Grande, a public agency organized and existing under the laws of
the State of California, acting pursuant to the laws of such State (the "Agency"), amends and restates
that certain contract for a water supply by and between the District and the Agency, dated March 28,
1966, as amended (the "Prior Supply Contract"), with reference to the following facts:
WITNESSETH:
WHEREAS, the District has heretofore constructed, improved and operated a public
works project (the "Project," as more particularly defined below) that provides a supply of water
available for use within the District; and
WHEREAS, the State now requires the District to make certain repairs and
improvements to the Project for public safety reasons, which improvements (the "Seismic
Remediation Improvements") must be financed with the proceeds of certain future obligations of the
District; and
LOPEZ WATER CONTRACT 1
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WHEREAS, the lands and inhabitants within the jurisdiction of the Agency are in
need of water provided by the Project for beneficial uses; and
WHEREAS, the District has provided water from the Project to the City of Grover
Beach, the City of Pismo Beach, the City of Arroyo Grande, the Oceano Community Services
District and County of San Luis Obispo Service Area No. 12 (being, collectively, the Agency and
the Other Agencies, as hereinafter defined) since 1966, pursuant to several water supply contracts,
including the Prior Supply Contract (collectively, the "Prior Supply Contracts"), and the parties now
wish to amend and restate the Prior Supply Contracts, preserving the same basic structure and
obligations; and
WHEREAS, the District desires to sell to public water distribution agencies,
including the Agency and the Other Agencies, the water provided by the Project under tenns and
conditions which, as far as practicable and consistent with the ultimate use of the water, shall be fair
and equitable to all such agencies and to the inhabitants onhe Distrlct; and
WHEREAS, the Agency desires to contract with the District for a water supply to be
for the use and benefit of the lands and inhabitants served by the Agency and for which the Agency
will make payment to the District upon the tenns and conditions hereinafter set forth; and
WHEREAS, the District and the Agency wish to provide for the financing of the
Seismic Remediation Improvements and Additional Projects (as defined herein), and for the future
LOPEZ WATER CONTRACT 2
.... ___...__._....c_,_..."....._.~"_,.,_"._.~,'. ,.. ..
maintenance of the Project in order to preserve the water supply provided by the Project to the
Agency; and
WHEREAS, obtaining the necessary fmancing for the Seismic Remediation
Improvements and Additional Projects (as defined herein) will aid the District in meeting its
intended communitywide results of: maintaining and encouraging a safe, healthful and pleasant
living environment, and encouraging a strong and viable economy;
NOW, THEREFORE, ITIS HEREBY MUTUALLY AGREED by the parties hereto,
as follows:
Article 1. Definitions. When used in this Contract, the following tenns shall have
the meanings hereinafter set forth:
"Additional Pro1ects" shall mean those capital projects to be undertaken by the
District in addition to the Seismic Remediation Improvements which have the effect of (i) preserving
and maintainiitg the Safe Yield ofthe Project (a "Type I Additional Project"); (H) maintaining the
quality of water provided by the Project (a ''Type II Additional Project"); or (Hi) any other capital
project agreed to by the Agency and all of the Other Agencies (a ''Ty.pe ill Additional Project").
"Calendar Ouarter" shall mean each three-month period commencing on January 1,
April 1, July 1 and October 1 of each year.
"Calendar Year" shall mean the twelve-month period from January 1 of a calendar
year to December 31 of the same calendar year, both dates inclusive.
LOPEZ WATER CONTRACT 3
"Capital Costs" shall mean costs expended by the District at or appurtenant to the
Project, for pezmanent improvements to the Project or equipment which is capitalizable on the books
of the District.
"Capital Reserves" shall mean those reserves established .by the District for the
Scheduled Maintenance ofthe Project or for anticipated costs of upgrade and improvements likely
to be imposed by Governmental Authority (each, an"Extemal Requirement") in order for the District
to continue to operate the Project for water supply purposes, established either (a) on a year-to-year
basis by the District in its annual budgets, copies of which shall be provided to the Agency promptly
following adoption, or (b) on a multi-year basis by the District through the development and
promulgation to the Agency of a long-term capital improvement plan of the District; provided,
however, that no Type ill Additional Projects shall be funded from Capital Reserves; and provided
further, that the District shall not expend any portion of Capital Reserves for, any External
Requirement until and unless such External Requirement becomes a final order of such
Governmental Authority, not subject to further appeal.
"Contract Payments" shall mean those payments due from the Agency to the District
hereunder, as more particularly set forth in Article 14 hereof.
"County Board" shall mean the Board of Supervisors of the County of San Luis
Obispo, California.
"Coverage Account" shall mean the account established for the Agency either with
the District or with a Depository, as provided in Article 18 hereof.
"Coverage Factor" shall mean 25% of Agency Debt Service, determined in
accordance with Article 14 hereof, calculated for each Fiscal Year.
LOPEZ WATER CONTRACT 4
"Debt Service" shall mean, in the aggregate, (a) principal and interest (or mandatory
sinking fund payments, installment or lease or similar payments due) with respect to all Tax-Exempt
Obligations at the time outstanding in accordance with their tenns, provided that capitalized interest
funded from the proceeds of Tax-Exempt Obligations need not be taken into account, (b) annual
costs of administering the Tax-Exempt Obligations, including the annual fees of any trustee or
paying agent therefor, and (c) the costs, if any, of annual credit enhancement for the Tax-Exempt
Obligations,
"Depository" shall mean a financial institution designated for the deposit and
administration <?fthe Coverage Account of the Agency, as and when appointed in accordance with
Article 18 hereof.
"Entitlements" shall mean the quantity of water to be distributed to the Agency under
this Contract and to the Other Agencies under their Water Supply Contracts with the District, as
established in Article 4(B) hereof and of such other Water Supply Contracts.
"Fiscal Year" shall mean the twelve-month period from July 1 of a Calendar Year to
June 30 of the immediately following Calendar Year, both dates inclusive.
"General Obligation Bonds" shall mean those certain general obligation bonds of the
District; issued pursuant to authorization received from the voters of the District at the election
conducted on March 7, 2000, in an aggregate principal amount of not to exceed $13,200,000,
supported by a levy of ad valorem taxes throughout the District.
"Governmental Authority" shall mean any State, federal or local governmental
authority with cognizance over the District or the Project, or any portion thereof, empowered to
regulate or control any aspect of its or their operations.
LOPEZ WATER CONTRACT 5
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.
"Operating Segment," as to the Agency, shall mean the segment of the Project
constructed for, and providing service directly to, the Agency, which, as at the date hereof, consists
ofUnit(s) A and B.
"Operation and Maintenance Costs" shall mean the reasonable and necessary current
expenses of maintaining, repairing and operating the ,Project, including District administrative
expenses directly attributable to Project function, but excluding Capital Reserves and Debt Service,
all computed in accordance with generally accepted accounting principles applicable to enterprise
funds of government agencies.
"Other Agency" shall mean any other water-distributing public agency ofthe State,
which, having the legal power to do so, executes a water supply contract with the District
substantially identical to this Contract, except for agency information, dates, Unit participations,
Proportionate Share and Percentage Share, other than for the purpose of purchasing Surplus Water,
including, as of the date hereof, the County of San Luis Obispo on behalf of Service Area No. 12,
The City of Grover Beach, Ocean Community Services District, and The City ofPismo Beach.
"Percenta.ge Share" shall mean the Agency's aggregate attributed share, by
percentage, of charges for Operation and Maintenance Costs and Capital Reserves for any given
Water Year for each respective Unit, as compared to all of the charges for Operation and
Maintenance Costs and Capital Reserves attributable to each such Unit levied against the Agency
and all Other Agencies, and as specified for the Agency below:
Unit A 50.55%
Unit B 50.55
Unit C 0.00
Unit D 0.00
LOPEZ WATER CONTRACT 6
Unit E 0.00
Unit F 0.00
Unit G 0.00
Unit H 0.00
Unit I 0.00
Unit J 0.00
"Proiect" shall mean (A) the 1965 Zone 3 Project described in Resolution No. 377-65
and Ordinance No. 813 of the District, adopted August 17, 1965, consisting of the following works
and improvements: (i) Lopez Dam and Reservoir, (ii) Lopez Dam-Arroyo Grande Conduit System,
(Hi) Arroyo Grande-Avila Conduit System, (iv) Arroyo Grande-Oceano Conduit System, (v) water
treatment plant, (vi) tenninal reservoir, (vii) all land, easements, rights-of-way, pumping plants,
pipes, valves, fittings, machinery and other property necessary for any of the foregoing, and (B) the
Seismic Remediation Improvements.
"Proportionate Share" shall mean the percent of the total Entitlements available to
the Agency, as compared to the aggregate of all Entitlements given to the Agency and all Other
Agencies hereunder and under all Water Supply Contracts in any given Water Year, as set forth in
Article 4(B) hereof.
"Rates and Charges" shall mean the rates and charges imposed and collected by the
Agency for the provision of water services by its Water Enterprise, or, if the Agency shall instead
have levied special taxes as described in Article 14(C)(b) below, such special taxes.
"Recreational Budget Transfers" shall mean the annual transfer ordered by action of
the County Board from revenues earned from recreational uses of the Project, based on the
LOPEZ WATER CONTRACT 7
percentage of recreational usage, initially established under the tenns of County Board Resolution
No. 2000-133, adopted on April 4, 2000.
"Safe Yield" shall mean the safe yield of the Project, calculated and established from
time to time in accordaIice with the provisions of Article 4 hereof, being 8,730 acre-feet of water as
of the date hereof.
"Scheduled Maintenance" shall mean the maintenance tasks for the Project which
are required to be accomplished less frequently than annually, a portion of the cost of which is set
aside in each annual budget of the District in anticipation of such requirement.
"Seismic Remediation Improvements" shall mean those certain improvement, more
particularly described on Exhibit A hereto, to the 1965 Zone 3 Project required by State mandate,
and necessary in order for the Project to continue to operate as a supplier of water to the District, the
Agency and the Other Agencies.
'''Smplus Water" shall mean the water available from the Project following
distributions of water described in Article 4, paragraphs (A), (B) and (C) hereof.
"Tax-Exempt Obligations" shall mean those certain obligations executed and
delivered by or on behalf of the District, representing and evidencing interests of the owners thereof
in certain installment payments to be made by the District' for the acquisition of the Project, whose
proceeds are to be used to finance or reimburse the costs of the Seismic Remediation improvements,
in an aggregate principal amount of not to exceed the net amount, following the application of
proceeds of sale of the General Obligation Bonds, required to complete the Seismic Remediation
Improvements pursuant to State mandate and the District's competitive bid process for such
Improvements.
LOPEZ WATER CONTRACT 8
''Total Contract Pavrnents" shall mean all ofthe payments due from the Agency and
the Other Agencies pursuant to Article 14 hereof and the same Article of the other Water Supply
Contracts.
''Total Proiect Costs" shall mean, for any given Water Year, the aggregate amount
necessary to provide for (i) Operation and Maintenance Costs; (ii) Debt Service; and (iii) Capital
Reserves, as calculated by the District in accordance with Article 14 hereof and noticed to the
Agency and the Other Agencies.
"Unit" shall mean those facilities which collectively make up the Project, delineated
as follows:
(1) "Unit A" shall consist of the Lopez Dam and Reservoir, including
acceSs roads, fish trapping facilities and outlet works, all expenses of executing and
delivering the Tax-Exempt Obligations, all moneys necessary to fund interest with
respect to the Tax-Exempt Obligations prior to receipt of the first payments under
this Contract and the other Water Supply Contracts, and all engineering and legal
fees for the entire Project.
(2) "Unit B" shall consist of the tenninal reservoir, a pumping plant and
bypass conduit, the water treatment plant and the Lopez Dam-Arroyo Grande
Conduit System. The "Lopez Dam-Arroyo Grande Conduit System" shall be defmed
as that portion of the pipeline conduit and all appurtenances from the Lopez Dam
outlet works to and including a bifurcation structure located at the intersection of the
Highway 101 south frontage road and Brisco Road in Arroyo Grande.
(3) "Unit C" shall consist of that portion of the Arroyo, Grande-Avila
Conduit System consisting of the pipeline conduit and all appurtenances from the
bifurcation structure which is a part of Unit B to the intersection of the Highway 101
south frontage road and Eighteenth Street in Grover City.
(4) "Unit D" shall consist of the Arroyo Grande-Oceano Conduit System.
The "Arroyo,Grande-Oceano Conduit System" shall be defined as that portion of
the pipeline conduit and all appurtenances from the south end of the Lopez Dam-
Arroyo Grande Conduit System to a connection to the Oceano water system at the
intersection of Lancaster Drive and Elm Street in Arroyo Grande.
(5) "Unit E" shall consist of that portion of the Arroyo Grande-Avila
Conduit System consisting of the pipeline conduit and all appurtenances from the
LOPEZ WATER CONTRACT 9
west end of Unit C to the intersection of the Highway 101 south frontage road with
Vista del Mar in Shell Beach.
(6) ''Unit F" shall consist of that portion of the Arroyo Grande-Avila
Conduit System consisting of the pipeline conduit and all appurte.nances from the
west end of Unit E to the intersection of the Sheel Beach Road with EI Portal Drive
in Pismo Beach.
(7) "Unit G" shall consist of that portion of the Arroyo Grande-Avila
Conduit System consisting of the pipeline conduit and all appurtenances from the
west end of Unit F to the intersection of Avila Road (San Luis Obispo County Road
No. 3016) with Ontario Road (San Luis Obispo County Road No. 33090),
(8) ''Unit H" shall consist of that portion of the Arroyo Grande-Avila
Conduit System consisting of the pipeline conduit and all appurtenances from the
west end of Unit G to the intersection of First Street and San Juan Street in the
community of A vila Beach.
(9) "Unit I" shall consist of that portion of the Arroyo Grande-Avila
Conduit System consisting of the pipeline conduit and all appurtenances from the
west end of Unit H to the Port San Luis Harbor District Tank site.
(10) "Unit r'shall consist of that portion of the Arroyo Grande-Avila
Conduit System consisting of the pipeline conduit and all appurtenances from the
west end of Unit G to a storage take site at an approximate elevation of 260 feet
above sea level located at a point approximately 1,300 feet westerly of the center line
of Highway 101 and 1,500 feet southerly of Avila Drive (San Luis Obispo County
Road No. 13015).
"Water Entex:prise" shall mean the water system operated and to be operated by the
Agency for sales of water to the general public within its jurisdiction.
"Water Sunnly Contracts" shall mean the water supply contracts respecting Project
output, entered into by and betWeen the District and the Other Agencies.
"Water Year" shall mean the twelve-month period from April I' of a Calendar Year to
March 31 of the immediately following Calendar Year, both dates inclusive.
"Zone 3" shall mean the area comprising Zone 3 of the District.
LOPEZ WATER CONTRACT 10
.
"Zone 3 Advisory Committee" shall mean that certain advisory committee comprised of
representatives of the District, the Agency and each of the Other Agencies, appointed by the District,
the Agency and the Other Agencies, nom time to time and meeting at scheduled intervals to advise
the District on matters relating to the Project, this Contract and the Water Supply Contracts.
Article 2. Tenn of Contract. This Contract shall become effective when the District has
executed (a) this Contract with the Agency; and (b) Water Supply Contracts with Other Agencies;
which, taken in the aggregate, establish Entitlements for at least 4,530 acre-feet of water nom the
Project, as set forth in Article 4(B) of this Contract and of such other Water Supply Contracts, and
the District shall promptly advise the Agency in writing of the effective date hereof. This Contract
shall remain in effect through the later of (i) the date which is six (6) months following the
repayment of the final Certificate of Participation outstanding; or (ii) the date which is thirty (30)
years nom the effective date hereof; provided. however. that the tenn of this Contract shall
automatically be extended for additional periods oftive (5) years nom the scheduled expiration date
hereof, so long as the Agency has not, by the date which is 180 days prior to the scheduled expiration
date hereof, given written notice to the District to the effect that it wishes to tenninate this Contract.
The Agency understands and agrees that each ofthe Other Agencies has the right to tenninate its
Water Supply Contract on similar tenns and that, if any Other Agency shall so elect to tenninate its
Water Supply Contract, the Entitlement arid corresponding obligations of such Other Agency shall
be apportioned among the Agency and the remaining Other Agencies, based upon a recalculation
of Proportionate Share or Percentage Share, based, where appropriate, on their access to and use of
Units, or as otherwise unanimously agreed by the Agency (unless the Agency shall have withdrawn),
all remaining Other Agencies ~d the District.
LOPEZ WATER CONTRACT 11
The parties hereto understand and agree that the Project must be constructed in
accordance with State mandate and that its costs are determined through a competitive bid process
applicable to public works undertaken by the County and its agencies, now set for a date on or about
September 14, 2000 (the "Project Bids"). Notwithstanding the foregoing paragraph, therefore, the
Agency and Other Agencies (collectively, the "Participating Agencies") may rescind their approval
of their respective Water Supply Contract and declare it cancelled and of no further force or effect,
but only if, following the County's opening of the Project Bids, the lowest response bidder for the
remaining work on the Project submits a Project Bid which, taken together with the other Project
Costs, would result in ,a total Project Cost in excess of $30,000,000 (Thirty Million Dollars). The
District covenants and agrees to provide prompt notice, and in any event within 48 hours of its
determination of the apparent winning Project Bid, to the Participating Agencies of the then-
estimated total Project Costs. The Participating Agencies shall have twenty (20) calendar days from
the date of receipt of such notice to exercise their rights of termination and recission hereunder; such
exercise shall be evidenced by delivery of written notice of such participating Agency's election to
the District and to each other Participating Agency. The District covenants and agrees not to award
any construction contract based on the Project Bids until after the foregoing twenty-day period has
elapsed.
Article 3. Validation. Either the District, the Agency or any Other Agency may file and
diligently prosecute to a fmal decree in a court of competent jurisdiction a proceeding in mandamus
or other appropriate proceeding or action for the judicial examination, approval, and confirmation
of the proceedings had for the organization of the District and for the participation of the Agency in
the Project hereunder, or for the validation of the Installment Purchase Agreement which is the basis
for the Tax-Exempt Obligations, or any of them, or the proceedings of the governing body of the
LOPEZ WATER CONTRACT 12
Agency leading up to and including the making of this Contract and the validity of the provisions
thereof and hereof.
Article 4. Distribution and Sale ofProiect Water. The following provisions govern the
distribution of water from the Project to the Agency, to the Other Agencies and for other purposes,
in the priorities set forth below:
(A) Legally Required Water Releases. The parties hereto acknowledge and agree that
Project water is subject to certain releases and minimum storage requirements imposed by law which
are not affected by the terms hereof.
(B) Entitlements. Subject to the foregoing, the District shall make available to the
Agency in each Water Year, to the extent possible, 2,290 acre-feet of Project water. The District
will, in order to satisfy this entitlement and the entitlements of Other Agencies, ~et aside from the
Safe Yield the total of 4,530 acre-feet of Project water which will be distributed to the Agency and
the Other Agencies, as established under Article 4(B) hereof and of their respective Water Supply
Contracts. The Agency's Entitlement comprises 50.55 percent of the aggregate Entitlements
awarded under all the Water Supply Contracts, including this Contract. Such percentage comprises
the Agency's Proportionate Share hereunder. Notwithstanding the foregoing, the aggregate
Entitlements available under this Contract and ' under the Water Supply Contracts may be reduced,
following written notice given to the Agency from the District, due to (1) permanent or long-tenn
restrictions imposed upon the District caused by (i) extreme changes in long-tenn meteorological
patterns that reduce the Safe Yield assumptions for the Project; or (ii) multi-year drought conditions;
or (2) temporary or short-tenn limitations based upon (i) reduced ability of the Project either to treat'
or distribute water because ofjorce majeure; (ii) drought conditions; or (Hi) water quality standards
\yhich reduce the safe, treated output of the Project at the time.
LOPEZ WATER CONTRACT 13
(C) Swplus Water Rates. Project water remaining after the distribution of Project water
as described in paragraphs (A) and (B) above shall comprise "Surplus Water" hereunder. Surplus
Water shall be sold in accordance with the provisions of this paragraph.
(1) Surplus Water shall first be offered by the District to the Agency and the Other
Agencies in accordance with their Proportionate Shares, with a price for such Surplus
Water to be,established based on the Operation and Maintenance Cost of the District
incurred in delivering the Surplus Water actually purchased by the Agency or the Other
Agencies. If the Agency or any Other Agency shall commit in writing to purchase
Surplus Water from the District under this subparagraph, it shall be obligated to pay for
such Surplus Water, whether or not in fact ordered from the District or accepted by the
Agency, so long as such Surplus Water was in fact available for the period in question.
Neither the Agency nor any Other Agency shall resell Surplus Water at any time to third
parties, without the prior written consent of all Other Agencies.
(2) The District may offer to sell and deliver any Surplus Water not purchased by the
Agency or the Other Agencies hereunder to any other prospective purchaser without right
of renewal, in a manner and at prices which will return to the District the largest net
revenue practicable, but in no event at prices less than those at which such Surplus Water
is offered to the Agency, unless the Agency is first allowed another opportunity to
purchase such Surplus Water at the lower price, and in each case, attempting to recapture
the Operation and Maintenance Cost, the variable costs, if any, and Debt Service
attributable to the volume of Surplus Water actually purchased by such third parties, at
the highest price the market will then bear.
LOPEZ WATER CONTMCT 14
(3) All revenues derived by the District ftom the sale of Surplus Water to the Agency,
any Other Agency or any third party hereunder shall be applied as a credit to the
obligations of the Agency and the Other Agencies, based on the Proportionate Shares of
the Agency and each Other Agency.
(D) Suq>lus Water. Beginning with the 2000-01 Water Year, Surplus Water shall be the
portion of the Safe Yield for Project water remaining after distributions of water during the said
previous Water Year, as described below.
Swplus Water shall be calculated for each Water Year by subtracting ftom the Safe Yield
of the Project an amount equal to the sum of the quantity of water released downstream during the
immediately prior Water Year, which shall not exceed 4,200 acre feet unless legally required by
Article 4(A) hereof, and the quantity of Entitlement water delivered to the Agency and the Other
Agencies during the immediately prior Water Year, excluding downstream releases and Entitlement
deliveries that occurred during the period of time that the District detennined that continuous
spillway flow was occurring at Lopez Dam.
The District shall notify the Agency of the total amount of Surplus Water available for
the current Water Year, and once so declared by the District, said amount shall not be changed by
the District without first obtaining the consent of the Agency and all Other Agencies.
Surplus Water purchased by the Agency will be delivered to Agency in the manner
provided for the delivery of its Entitlement and to the extent that all of said surplus water purchased
by Agency is not so delivered by the end of the Water Year in question, then such undelivered
amount shall revert to District and shall not thereafter be available to Agency.
Article 5. Water Shortages. From time to time during the tenn of this Contract, there
may occur a shortage in the quantity of Project water available for delivery to the Agency by the
LOPEZ WATER CONTRACT 15
District under this Contract, including, without limitation, for the reasons enumerated in Article
4(B). In such event, no liability shall accrue against the District or any of its officers, agents or
employees for any damage, direct or indirect, arising from a shortage on account of any reason
beyond the control of the District. In any Water Year during which such a shortage has caused a
reduction as described in said Article 4(B), so that the total quantity of the Entitlements available
for the District to distribute is less than the total established in said Article 4(B), following giving
of notice by the District as provided in Article 4(B), the Proportionate Share of the Agency and each
Other Agency under its Water' Supply Contract shall be applied to such ~educed amount in
detennining the volume of Project water to be delivered to the Agency and such Other Agencies in
such Water Year.
Article 6. Completion of Seismic Remediation In1t>rovements. The Agency understands
and acknowledges that the District intends to commence and complete the Seismic Remediation
Improvements with due diligence; in order to finance the construction of the Seismic Remediation
Improvements, the Agency understands and agrees that the District will have to cause the execution
and delivery of the Tax-Exempt Obligations on terms and conditions favorable to the District, the
Agency and the Other Agencies, to be established at the time of sale of the Tax-Exempt Obligations.
In particular, the Agency covenants and agrees that:
(A) The District shall contract for the public works comprising the Seismic Remediation
. Improvements on such terms as the District, in its sound business judgment, may deem in the best
interests of the District, the Agency and the Other Agencies, but only following consideration by the
Zone 3 Advisory Committee of any such contracts in excess of the minimum standards for contracts
of a similar type then mandated for formal approval by the County Board (the "County Standards");
LOPEZ W A TERCONTRACT 16
provid~ however, that no such consideration shall be required as a precondition to any such action
in response to an emergency;
(B) The District may engage, but only (except in an emergency, in which case no such
consideration shall be required as a precondition) following consideration by the Zone 3 Advisory
Committee of any such contracts in excess of County Standards, contractors and consultants,
including, without limitation, environmental specialists, engineers, financial consultants,
underwriters, attorneys and accountants (collectively, the "Consultants"), as may be necessary in
order to plan and construct the Seismic Remediation Improvements and to issue and sell the Tax-
Exempt Obligations, on such tenns and conditions as the District shall detennine; provided,
however, that the District and the Agency hereby covenant and agree that all such contracts already
in place as of the effective date of this Contract shall be deemed noticed to and considered by the
Zone 3 Advisory Committee; and Drovided further, that no such consideration shall be required as
a precondition to any such action in response to an emergency;
(C) The District may authorize and sell at either public or private sale, or cause to be
executed and delivered, the Tax-Exempt Obligations at any time following the effective date hereof,
to provide for the financing or reimbursement to the District of the costs of the Seismic Remediation
Improvements, to establish a reserve fund for the Tax-Exempt Obligations and to pay the costs of
delivery thereof;
(D) The Agency will execute and provide such instruments, certificates and agreements
as may be necessary in order for the District to deliver the Tax-Exempt Obligations, including,
- ..
without limitation, infonnation for inclusion in the disclosure document for the Tax-Exempt
Obligations and a continuing disclosure agreement to pennit compliance with Rule 15c2-12 ofthe
LOPEZ WATER CONTRACT 17
Sec~ties and Exchange Commission, respecting the Agency's financial condition and operations;
and
(E) The Agency will cooperate with the District and its Consultants in connection with
the planning and construction of the Seismic Remediation Improvements and the authorization and
delivery of the Tax-Exempt Obligations.
The District covenants and agrees to use its best efforts to complete the Seismic
Remediation Improvements by a date no later than June 30, 2002.
Article 7. Delivery of Water. All water to be furnished to the Agency pursuant to this
Contract shall be delivered to the Agency at the intersection of the Highway 101, South Frontage
Road and Brisco Road in the City of Arroyo Grande.
If the Agency shall desire at any time during the term of this Contract to change the
address at which it receives water from the District hereunder, or to install additional points of
delivery, it may do so if it furnishes all funds necessary to cover any District expenses involved, or
if it undertakes the construction of the necessary conduits and appurtenances at its own expense;
provided that the Agency shall not undertake any such construction until it has first obtained District
approval of the plans and specifications for such work. Upon the receipt of a request for a change
in or addition to the place of delivery of water thereunder, and the deposit of any required funds as
set forth in this paragraph, the District shall, if it has elected to perform its own construction of
conduits and appurtenances, diligently proceed to construct the same.
Article 8. Measurement. All water furnished pursuant to this Contract shall be measured
by the District at each point of delivery established pursuant to Article 7 hereof with equipment
satisfactory to the District ,and the Agency. Said equipment shall be installed, operated and
maintained by the District. All determinations relative to the measuring of Project water shall be
LOPEZ WATER CONTRACT 18
"
made by the District and, upon request of the Agency, the accuracy of such measurement shall be
investigated by the District and certified to the Agency in writing. Any error appearing in the course
of such investigation and certification shall be cause for an adjustment by the District. The Agency
may inspect any such measuring equipment for the purpose of detennining the accuracy thereof, at
its own expense at reasonable times upon reasonable I;lotice. The District will install, or cause to be
installed, backflow prevention devices in connection with such measuring equipment to prevent
Project water delivered to the Agency or to the Other Agencies :trom returning to the District's lines.
Article 9. Time for Deliverv ofProiect Water. The amounts, times and rates of delivery
of Project water to the Agency during any Water Year shall be in accordance with a water delivery
schedule determined in the following manner:
(A) On or before October 1 of each Calendar Year, the Agency shall submit in writing
to the District a preliminary water delivery schedule subject to the provisions of this Article and
Article 4, indicating the amounts of water desired by the Agency during each month of the
succeeding three (3) Water Years.
(B) Upon receipt of a preliminary schedule the District shall review it and after
consultation with the Agency shall make such modifications in it as are necessary to insure that the
amounts, times and rates of delivery to the Agency will be consistent with the available supply of
water from the Project, considering the current delivery schedules of all Other Agencies. On or
before January 1 of each Calendar Year, the District shall determine and furnish to the Agency a
water delivery schedule for the next succeeding Water Year, which shall show the amounts of water
to be delivered to the Agency during each month of that Water Year.
(C) A water delivery schedule may be amended by the District upon the Agency's written
request, and subject to (i) the circumstances described in Article 4(B) hereof and (ii) the pre-existing
LOPEZ WATER CONTRACT 19
requirements of the District Wlder the water delivery schedules with the Other Agencies for the same
period of time. Proposed amendments to such schedules shall be submitted by the Agency within
a reasonable time prior to the date the desired change is to become effective, and they shall be
subject to review and modification by the District in the same manner as the preliminary water
schedule described in paragraph(B) above.
(D) In no event shall the District be obligated to deliver Project water to the Agency at
a combined instantaneous rate of flow exceeding 3.30 cubic feet per second.
Article 10. Responsibility for Delivery and Distribution of Water Bevond Delivery
Points. After Project water has passed the delivery points established in accordance with Article
7 above, neither the District nor its officers, agents or employees shall be liable for the control,
carriage, handling, use, disposal, distribution or changes occurring in the quality of such water
supplied to the Agency or for claim of damages of any nature whatsoever, including but not limited
to property damage, personal injury or death, arising out of or connected with the control, carriage,
handling, use, disposal, distribution or changes occurring in the quality of such water beyond said
delivery points, and the Agency shall defend, indemnify and hold hannless the District and its
officers, agents and employees from and against any such damages or claims of damage.
Article 11. Operation and Maintenance of Project and Water Entezprise. The parties
hereto acknowledge and agree that the primary goal of the District shall be to maximize deliveries
of Project water, subject to Safe Yield and cost considerations, as to which the District shall be
expected to exercise sOWld business judgment.
(A) The District covenants and agrees that it will operate and maintain the Project, as
improved by the Seismic Remediation Improvements, in accordance with all governmental laws,
ordinances, approvals, rules, regulations and requirements, including, without limitation, such
LOPEZ WATER CONTRACT 20
zoning, sanitary, pollution, environmental and safety ordinances and laws and such rules and,
regulations thereunder as may be binding upon the District. The District further covenants and
agrees that it will maintain and operate the Project and all pumps, machinery, conduits, apparatus,
fixtures, fittings and equipment of any kind in or that shall be placed in any building or structure or
made a part of any conduit or easement now or hereafter at any time constituting part of the Project
in good repair, working order and condition, and that it will from time to time inspect and test all
Project facilities against then-current water supply industry standards, and to pursue or recommend
all necessary and proper replacements; repairs, renewals and improvements thereto.
(B) In order to satisfy its covenants set forth in this Article, the District shall determine,
prior to each Water Year, the amount of Capital Reserves necessary for the Project for the upcoming
Water Year, shall prepare its draft annual budget by no later than March 1 to reflect such Capital
Reserves, shall provide copies of each such budget to the Zone 3 Advisory Committee, the Agency
and the Other Agencies for review and comment, prior to its distribution to and consideration by the
Board of Supervisors of the County, and shall, if deemed necessary or advisable, develop and
promulgate to the Agency and the Other Agencies a multi~year improvement plan for the Project,
reflecting the annual requirements for Capital Reserves.
(C) At any time, or from time to time, without the consent of the Agency or any Other
Agency, the District shall be entitled to undertake the construction or equipping of any Additional
Project or other improvements to or repairs of the Project not comprising a Type III Additional
Project, but only if (i) it shall detennine that such Additional Project, improvements or repairs are
necessary in order to keep the Project functioning at the levels and to maintain the water supply at
the quality required hereunder and under the other Water Supply Contracts; or (ii) competent
Governmental Authority shall direct such Additional Projects, improvements or repairs; provided
LOPEZ WATER CONTRACT 21
-,...-------,-
that. before an Additional Project other than a Type ill Additional Project, improvements or repairs
may be ordered pursuant to direction of competent Governmental Authority, the District, the Agency
and the Other Agencies shall be afforded notice thereof and the opportunity to oppose the imposition
of such requirement before a court of competent jurisdiction; only if a final judgment is thereafter
rendered, in favor of such Additional Project, improvements or repairs, or if no such opposition is
filed, shall an Additional Project other than a Type ITI Additional Project, improvements or repairs
be constructed or made pursuant to this clause (ii). Emergency repairs to the Project may,
notwithstanding the above, be made by the District without the requirement of notice and
opportunity to oppose described herein. It is the intention of the parties hereto that the District shall,
as and when necessary, be deemed to assign its rights to pursue opposition to the creation of any
oblig~tions hereunder by a Governmental Authority to the Agency and/or the Other Agencies, as
their interests may appear, in recognition of the status of the Agency and the Other Agencies as third
party beneficiaries hereof and real parties in interest. No preexisting right of the Agency or the Other
Agencies to pursue actions administratively, by law or in equity associated with the construction,
maintenance and operation of the Project shall be abrogated by the Agency or such Other Agencies
by its or their execution ofthis Contract or the other Water Supply Contracts.
(D) For its part, the Agency covenants and agrees:
(1) not to sell, lease or otherwise dispose of its Water Enterprise or any part thereof
essential to the proper operation thereof or to the earning or collection of the gross revenues ofthe
Water Enterprise, nor to enter into any agreement or lease which would impair the operation of the
Water Enterprise or any part thereof necessary in order to secure adequate revenues for the payment
of amounts due under this Contract; provided, however, that any real or personal property which has
become nonfunctional or obsolete or which is not needed for the efficient operation of the Water
~
LOPEZ WATER CONTRACT 22
-'_._-~-,.-
Enterprise may be sold or disposed of if such disposition will not have the effect of reducing
revenues of the Water Enterprise below the le~els required under this Contract;
(2) to maintain and preserve the Water Enterprise in good repair and working order at
all times, operate the same in an efficient and economical manner and pay all operation and
maintenance costs of the Water Enterprise as they become due;
(3) not later than the first day of each Fiscal Year, to adopt and make available to the
District a budget approved by its governing board setting forth the amounts budgeted to be paid
under this Contract;
(4) to comply with, keep, observe and perfonn all agreements, conditions, covenants
and tenns, express or implied, required to be perfonned by it contained in all contracts for the use
of the Water Enterprise and all other contracts affecting or involving the Water Enterprise to the
extent that the Agency is a party thereto;
(5) not to create or allow any lien on or payment from the revenues of the Water
Enterprise or any part thereof prior to or superior to its obligation to pay amounts payable under this
Contract;
(6) to procure and maintain such insurance relating to the Water Enterprise which
it shall deem advisable or necessary to protect its interests, which insurance shall afford protection
in such amounts and against such risks as are usually covered in connecti9n with similar water
enterprises in the State of California; provided, that the Agency shall not be required to procure or
maintain any such insurance unless such insurance is commercially available at reasonable cost; and
provided further, that any such insurance may be maintained under a self-insurance program, so long
as such self-insurance program is maintained in accordance with standards and in such amounts as
are then usually maintained for similar water enterprises in the State of California;
LOPEZ WATER CONTRACT 23
(7) to pay and discharge all taxes, assessments and others governmental charges
which may hereafter be lawfully imposed upon the Water Enterprise or any part thereof when the
same shall become due; duly observe and confonn with all valid regulations and reqw.rements of any
governmental authority relative to the operation of the Water Enterprise, that are not being contested
in good faith; and
(8) if all or any material part of the Water Enterprise shall be taken by eminent
domain proceedings, or if the Agency receives any insurance proceeds resulting from a casualty loss
to any material portion of the Water Enterprise, the proceeds thereof shall be used to construct or
install replacements for the condemned or destroyed components of the Water Enterprise or to
prepay the Agency's share of Debt Service under this Contract.
Article 12. Water Oualitv. All water delivered to the Agency under this Contract shall
meet all State Qf California and San Luis Obispo County minimum water quality standards for water
for domestic use.
Article 13. Curtailment of Delivery ofProiect Water for Maintenance Purposes. The
District may temporarily discontinue or reduce the amount of water to be furnished to the Agency
for purposes of maintaining, repairing, replacing and investigating or inspecting, any of the facilities
necessary for the furnishing of Project water to the Agency hereunder. Insofar as it is feasible, the
District will give the Agency advance notice of any such temporary discontinuance or reduction,
except in the case of emergency, in which case no advance notice need be given. In the event of
such discontinuance or reduction, the District will apply its best efforts to minimize the dW'ation and
severity of service interruption hereunder cind shall, as nearly as possible, make available to the
Agency Project water sufficient to make up for any shortfall in deliveries of water to the Agency
during the period of curtailment.
LOPEZ WATER CONTRACT 24
_. ----~
Article 14. Rate and Method of Payment. Commencing with the first Water Year during
which Project water is made available to the Agency hereunder, the Agency shall pay to the District
in advance and on a semiannual basis, its Contract Payments, calculated and paid in~ccordance with
the further provisions of this Article, for the Project water made available under this COntract for
such Water Year, plus a variable charge, to be detennined as set forth in paragraph (D) of this
Article, to be calculated on a quarterly basis and paid in arrears.
(A) Allocation o/Total Project Costs and Debt Service. On or before April I of each
Calendar Year, the District shall calculate, or cause to be calculated, Total Project Costs for the
Fiscal Year commencing on the immediately following July 1. The District shall deduct from the
calculated Total Project Costs for such Fiscal Year: (1) the general ad valorem property taxes to be
received by the District during the Fiscal Year in question; provided that any ad valorem taxes levied
and paid to provide debt service on the District's General Obligation Bonds outstanding at any time
shall be restricted to use for the payment of debt service on such General Obligation Bonds and shall
not be included in the deducted amount represented by the foregoing clause; and (2) a sum equal to
. ^
Recreational Use Revenues received by the District during the Fiscal Year about to be concluded.
The result shall comprise the Total Contract Payments due, collectively, ftom the Agency hereunder
and from the Other Agencies under their respective Water Supply Contracts.
In detennining the Debt Service portion of Total Project Costs during any Fiscal Year to be
supported by the Agency, the District shall make the following calculations:
[(G,O. Debt Service) + (Installment Debt Service)]- (District Revenues) = Allocable
Debt Service ("ADS")
, [(proportionate Share) x ADS] = Annual Agency Obligations ("AAO")
AAO - (G.O. Tax Collections) = Agency Debt Service
LOPEZ WATER CONTRACT 25
~_._--
For purposes of the above calculations, the tenn "G.O. Debt Service" above refers to the debt
service on the District's General Obligation Bonds; the term "Installment Debt Service" refers to the
installment payments due with respect to the Tax-Exempt Obligations; the term "Proportionate
Share" refers to the Agency's Proportionate Share hereunder; the tenn "District Revenues" refers
to the amounts available to the District under the second sentence of this paragraph (A) of Article,
14; and the term "G.O. Tax Collections" refers to amounts collected to support the General
Obligation Bonds within the boundaries of the Agency duri~g the Fiscal Year in question, based
upon then-current levies; provided, however, that iri the case of County Service Area No. 12, such
boundaries shall be deemed to include that area comprising A vila Beach Community Services
District, as well as the area comprising such County Service Area No. 12. In no event shall Agency
Debt Service, as calculated above, be a figure less than zero. The foregoing calcu.1ations shall be
performed by the District each Fiscal Year and shall be made available to the Agency with respect
to each Other Agency, as well.
No more ftequently than annually, the District shall retain a certified public
accountant, or firm thereof, with the approval of the Zone 3 Advisory Board, which shall be
responsible for reviewing and confirming the Agency Debt Service figures resulting ftom the
foregoing calculations, and reporting the same to the Agency, the District and each Other Agency.
(B) Agency Contract Payments. Unless the Agency shall, in accordance with
paragraph (C) below, be entitled to an offsetting credit, the Agency shall be obligated to pay to the
District:
LOPEZ WATER CONTRACT 26
(1) on or before July 1 and the immediately following January I of each
Fiscal Year, a sum equal to one-half of its Percentage Share of charges for Operation and
Maintenance and Capital Reserves for such Fiscal Year;
(2) on or before July 1 of each Fiscal Year, a sum equal to Agency Debt
Service, as calculated under paragraph (A) above; and
(3) on or before the fifteenth day following the end of each Calendar
Quarter during a Fiscal Year, the variable charge calculated in accordance with paragraph (D) below
for the Calendar Quarter ending on the last day of the Calendar Quarter most recently concluded.
I
(C) Agency Credits against Contract Payments. The following shall constitute
credits against the obligations of the Agency to pay Contract Payments to the District:
(1) (a) If, prior to the date upon which the District causes the Tax-
Exempt Obligations to be sold, the Agency shall contribute, in cash, a sum as and for its
Proportionate Share of the total amount of costs and expenses projected by the District as the basis
for the Seismic Remediation Project, or any portion of its Proportionate Share, so that the aggregate
principal component of the Tax-Exempt Obligations is reduced 'by such sum, the Agency's
Proportionate Share of Debt Service, and therefore, of Total Project Costs, shall be reduced
accordingly; and
(b) If the Agency shall, following the date of delivery of the Tax-
Exempt Obligations, successfully implement a financing plan within its jurisdiction to fund all or
a portion o~ Debt Service during the tenn of the Tax-Exempt Obligations through the levy of ad
valorem property taxes, special assessments or special taxes, then the Agency shall be entitled to a
credit from amounts paid under such levy as though such amounts were paid directly by the Agency
LOPEZ WATER CONTRACT 27
hereunder, subject to the prior approval of each rating agency then rating the Tax-Exempt
Obligations and any bond insurer then providing insurance therefor; provided, however, that the
District shall be made a third-party beneficiary of any pledge of such alternate source of revenues,
with the power to enforce collection thereof, in the event the Agency should fail to do so; and
(c) The Agency shall be entitled to a credit equal to a Percentage
Share of the net revenues the District shall have received from th~ sale of Surplus Water and from
the delivery of any water wheeled for Wheeling Customers, as defined in and pursuant to the
provisions of Section 31, during the Fiscal Year in question; in detennining the amount of such
wheeling credits against the obligations of the Agency hereunder, the District shall apportion its net
revenues from the foregoing sources, taking into account the particular Unit or Units through which
delivery of Surplus Water or wheeled water was made, and shall compare the Agency's Percentage
Share for such Unit or Units with the aggregate Percentage Share for all Other Agencies and the
Agency for such Unit or Units.
(2) On or before December 1 of each year, the District shall deliver to the
Agency a statement as to the actual Operation and Maintenance Costs and Capital Reserve charges
incurred or imposed during the Fiscal Year most recently concluded, and shall set forth in such
statement its detennination as to whether the amounts theretofore paid by the Agency as its
Percentage Share of estimated charges for Operation and Maintenan.ce Costs .and for Capital
Reserves were in excess of or less than its Percentage Share of such costs and charges for the Fiscal
Year most recently- concluded. If the Agency shall have paid less than its Percentage Share of actual
Operation and Maintenance Costs and charges for Capital Reserves for such Fiscal Year, the
Agency shall remit the difference to the District within (180) days of the date upon which it receives
such a statement; if the Agency shall have paid more than its Percentage Share of such costs and
.
LOPEZ WATER CONTRACT 28
---...--- ----~---
charges for such Fiscal Year, the District shall rebate the difference to the Agency promptly
following its delivery of the closing statement, and, in any event, within thirty (30) days thereafter.
(D) Quarterly Variable Charges. The sum of quarterly variable charges to the
Agency and the Other Agencies shall be an amount which is estimated to be sufficient to compensate
the District for actual Project pumping energy charges incurred during the respective Calendar
Quarter. The variable charge shall be detennined for each Calendar Quarter during which Project
water is made available to the Agency under this Contract by (1) dividing the District's actual cost
of pumping energy during that Calendar Quarter by the total acre-feet of Project water delivered by
the District during such Calendar Quarter to the Agency and all Other Agencies pursuant to this
Contract and the other Water Supply Contracts, and (2) multiplying this acre-foot charge by the
number of acre-feet of Project water delivered by the District to the Agency during such Calendar
Quarter. The District shall notify the Agency in writing of such variable charge by a date no later
than the fifteenth day following the end of each Calendar Quarter, for the variable charges
attributable to the Calendar Quarter most recently concluded.
(E) Use by District of Total Contract Payments. During the tenn of this
Contract and of the other Water Supply Contracts, the District shall proceed with due diligence to
collect Total Contract Payments as and when due, and shall apply amounts collected in the following
order of priority:
(1) to the payment of Operation and Maintenance Costs;
(2) to the payment of Debt Service with respect to the Tax-Exempt
Obligations; and
(3) to the replenishment or funding of Capital Reserves for the Project,
in accordance with the provisions set forth in Article 10 hereof.
LOPEZ WATER CONTRACT 29
Article 15. Take-or-Pay Obligation of Agency. Commencing on the first date upon
which Project water is provided under this Contract, the Agency shall pay all amounts due
hereunder, including, without limitation, under Article 14 hereof, without reduction or offset of any
kind, whether or not the Project or any part thereof is then operating or operable or its service is
suspended, interfered with, reduced or curtailed or tenninated in whole or in part, due to any of the
reasons outlined in Articles 4(B), 5 and 13 or otherwise, and such Agency payments shall not be
conditional upon the performance or nonperfonnanceby any party for any cause whatsoever,
including the Other Agencies; provided, howeyer. that savings from nonoperation of the Project shall
be apportioned among the Agency and the Other Agencies in accordance with their Percentage
Shares.
The Agency's failure or refusal to accept delivery of Project water to which it is
entitled under this Contract shall in no way relieve the Agency ofits obligation to make payments
to the District as provided for herein.
Article 16. Pledge: Establishment and Collection of Rates and Charges. The
Agency, unless it shall have paid cash as its share of the Total Project Costs, as provided in Article
14(C)(I) hereof, hereby pledges gross water sale revenues of its Water Enterprise to its obligations
under this Contract, and covenants and agrees to establish, fix and collect Rates and Charges from
the customers of its Water Enterprise at levels sufficient to produce revenues from the Water
Enterprise at least equal to (A) the costs of operating and maintaining the Water Enterprise, plus (B)
the Agency's Contract Payments, calculated in accordance with Article 14(B) hereof, including (C)
the Agency's Proportionate Share of Debt Service, plus (D) the Coverage Factor for the Debt Service
portion of the Agency's Contract Payments; provided, however, that the provisions of Article 21(C)
hereof may impose upon the Agency a surcharge following the occurrence of any payment default
LOPEZ WATER CONTRACT 30
by the Agency. The Agency acknowledges and agrees that its obligations hereunder shall comprise,
for accounting purposes, an operation and maintenance expense of its Water Enterprise.
Article 17. Default. (A) The following shall constitute events of default hereunder:
(1) The Agency shall fail to make timely payment in full of all amounts
due from the Agency under the tenns of this Contract; or
(2) The Agency shall fail to establish or collect, or cause to be collected,
all fees, charges and other sums necessary to enable it to make the payments required hereunder, as
provided in Article 16 hereof, and, following thirty (30) days' written notice from the District to the
Agency, shall fail to remedy such failure to the satisfaction of the District; or
(3) The Agency shall fail to perfonn any other obligation or covenant
hereunder and shall fail to remedy such failure to the satisfaction of the District within thirty (30)
days following the Agency's receipt of written notice from the District, or for such additional time
as is reasonably required, in the sole discretion of the District, to correct the same; or
(4) The Agency shall file any petition or institute any proceedings under
any act or acts, State or federal, dealing with or relating to the subject of bankruptcy or insolvency
or under any amendment to such act or acts, either as a bankrupt or as an insolvent or as a debtor or
in any similar capacity, wherein or whereby the Agency seeks or prays to be adjudicated a bankrupt
or is to be discharged from any or all of its debts or obligations, or offers a reorganization of its
obligations for the benefit of creditors, or asks for similar relief.
(B) Upon the occurrence of an event of default hereunder, the District shall be
entitled to proceed to protect and enforce the rights vested in the District by this Agreement by
appropriate judicial proceedings as the District may deem most effective, either in equity or law.
LOPEZ WATER CONTRACT 31
Without limiting the generality of the foregoing, the District shall be entitled to pursue any ofthe
following remedies:
(1) The District may suspend the delivery of water hereunder during the
period when the Agency is delinquent in its payment for or other obligations to the District
hereunder, but only following notice to the Agency and the imposition of such remedy following a
fonnal hearing conducted by the County Board;
(2) The District may compel the Agency, or its governing board, by
action or suit in equity to account to the District as the trustee of an express trust;
(3) The District may pursue by action or suit in equity to enjoin any acts
or things which may be unlawful or in violation of the rights of the District hereunder; and
(4) The District may proceed in mandamus or other suit, action or
proceeding at law or inequity to enforce its rights against the Agency (and its board, officers, agents
and employees) and to compel the Agency to perfonn and carry out its duties and obligations under
the law and its covenants and obligations as set forth herein.
The use by either party to this Contract of any remedy specified herein for the
enforcement of this Contract is not exclusive and shall not deprive the party using such remedy of,
or limit the application of, any other remedy provide hereunder or by law or equity.
(C) Upon each charge to be paid by the Agency to the District pursuant to this
contract which remains unpaid after the same shall have become due and payable, interest shall
accrue at an annual rate equal to that earned by the County Treasurer's investment fund as provided
in Government Code Section 16480 et seq. calculated monthly on the amount of such delinquent
payment ftom and after the due date when the same becomes due until paid, and the Agency hereby
agrees to pay such interest; provided, that no interest shall be charged to or be paid by the Agency
LOPEZ WATER CONTRACT 32
---~,-~
unless such delinquency continues for more than thirty (30) days. The Agency hereby agrees to pay
such interest to the District, whether or not the District shall pursue any of the remedies specified
in this Article. In no event shall default interest be compounded.
Article 18. Failure to Levy. Set or Collect Taxes. Rates and Charges; Establishment
of Coverage Account. If the Agency for any reason shall fail or refuse to establish or levy taxes or
Rates and Charges sufficient to satisfy the requirements of Article 16 hereof, or if the Agency shall
be precluded from establishing rates and charges at the levels required in said Article 16, then the
Agency shall promptly notify the District of such fact, in writing, and shall establish either (a) with
the District; or (b) with a Depository designated by the Agency to the District in writing; a Coverage
Account, into which the Agency shall deposit, from the first lawfully available funds therefor, an
amount equal to one year's Coverage Factor for the Debt Service portion of the Agency's Contract
Payments hereunder. The Coverage Account shall be invested in accordance with applicable
provisions of the Government Code, subject to any limitations established pursuant to Section 148
of the Internal Revenue Code of 1986, as amended, applicable to surplus moneys of the Agency and
shall be and remain available to the Agency and to the District as a source of funds to remedy any
shortfall in the payment of Agency Contract Payments hereunder. The Coverage Account shall be
pledged to the District for the purposes described herein, and the Agency covenants and agrees to
execute such instruments as may be necessary in order to effect a pledge of amounts on deposit in
the Coverage Account, acknowledging and agreeing as well to follow the advice of special tax
counsel to the District in connection with the pledge and investment of the Coverage Account, as
may be necessary or advisable in order to maintain the tax status ofthe Tax-Exempt Obligations.
If at any time following the establishment of the Coverage Account hereunder, the
Agency shall again be able to and shall collect rates and charges as required under Article 16 hereof,
LOPEZ WATER CONTRACT 33
the Coverage Account may be released to the credit and name of the Agency for any lawful purpose
thereof, upon delivery to the District of evidence satisfactory to the District that (i) the Agency has
successfully levied rates and charges for its Water Enterprise at the appropriate levels for at least one
full Fiscal or Water Year since the Coverage Account was first created, and (ii) the Agency is then
current on all payments due under this Contract; whereupon, the District shall either release the
Coverage Account to the Agency or shall direct the Depository to do so, :free from the lien described
herein.
Article 19. Area Served by Agency, Water delivered to the Agency pursuant to this
Contract shall not be sold or otherwise disposed of by the Agency' for use outside the boundaries of
Zone 3 as they may now or hereafter exist, without the prior written consent of the District.
Article 20. Changes in Organization of A~ency. The Agency will furnish the
District with maps showing the territorial limits of the Agency and the service area or areas of its
water distribution system. Throughout the term of this Contract, the Agency will promptly notify
the District of any changes, either by including or exclusion, in said territorial limits and service area
or areas. The Agency shall take no action to exclude any lands ftom the Agency or its service area
or areas without the prior written consent of the District.
Article 21. Agency's.Obli~ations Several and Not Joint: Limited Step-up Provisions
and Reimbursement. (A) Except as provided in paragraph (B) of this Article, the Agency and the
Other Agencies shall be solely responsible and liable for performance under this Contract or under
the other Water Supply Contracts, as applicable. Their obligations to the District to make payments
under this Contract and the other Water Supply Contracts are expressly recognized by the District
as several, and not joint, and no default on the part of one of the Other Agencies shall, in and of
itself, create an event of default hereunder. The Coverage Account of the Agency, if any is
LOPEZ WATER CONTRACT 34
established hereunder, shall not be available for any shortfall in payments under any of the other
Water Supply Contracts, unless otherwise directed or approved in writing by the Agency.
(B) In 'the event that the Agency or any Other Agency (each, a "Delinquent
Agency") shall fail to pay its Contract Payments hereunder or under the Other Agency's Water
Supply Contract, as appropriate, for any reason, then the Contract Payments for each non-
delinquent agency (each, a "Non-Delinquent Agency") then participating in the Project shall be
increased for the particular Water Yearby an amount equal to the sum of Contract Payments not paid
in full by Delinquent Agencies (collectively, the "Shortfall"); provided, however, that Non-
Delinquent Agencies shall contribute to the Shortfall in a proportion detennined by dividing the Debt
Service portion of the Contract Payments attributable to each particular Non-Defaulting Agency by
the aggregate Debt Service portions of the Contract Payments attributable to all Non-Defaulting
Agencies; and provided further, that the Agency in no event shall be required under this paragraph
to contribute to the Shortfall by an amount in any Water Year exceeding the amount which is 20%
of the portion of the Agency's Contract Payments representing Debt Service for that Water Year.
(C) If payments are made by Non-Delinquent Agencies under the foregoing,
paragraph (B) during any, Water Year, the District shall, beginning on the first date upon which
payments are due from a Delinquent Agency and not paid in accordance with its Water Supply
Contract (each, a "Due Date"), declare a default as to such Delinquent Agency under its Water
Supply Contract and shall be entitled to curtail all deliveries of Project water under such Water
Supply Contract to such Delinquent Agency; notwithstanding the foregoing, such Delinquent
Agency shall nonetheless continue to be obligated under its Water Supply Contract for amounts paid
on its behalf by the Non-Delinquent Agencies, until it has reimbursed each Non-Delinquent Agency
LOPEZ WATER CONTRACT 35
--.- -.'-...--.
in full. Amounts advanced by the Non-Delinquent Agencies hereunder are immediately due and
payable by the responsible Delinquent Agency, and, if not so paid, and notwithstanding the
provisions of Article 17(C), incur interest on the unpaid portion until paid in full at a rate per annum
equal to the average rate for the County Treasury Pool, plus two percent (2.0%) per annum, for the
month for which the County Treasury Pool rate was most recently calculated, based on a 360-day
year of twelve 30-day months; provided, however, that payments to be made as reimbursements
under this paragraph (C) are deemed and understood to be subordinate to the obligations of the
Delinquent Agencies to pay their Proportionate Shares of Debt Service.
(D) Shortfalls in Total Contract Payments shall be remedied under this Article
prior to the District's making any withdrawal from the debt service reserve fund established, or
under the reserve surety bond posted, for the Tax-Exempt Obligations, if any, drawings on or under
which shall be delayed until and unless insufficient moneys are available nom Non-Defaulting
Agencies hereunder.
(E) The District covenants and agrees to enforce the provisions of this Water
Supply Contract with due diligence, including, without limitation, the provisions of this Section for
the benefit of the owners, nom time to time, of the Tax-Exempt Obligations. Article 2:
provide for different dates, quantities of water to be delivered, water delivery points, Proportionate
Shares and Percentage Shares and payment amounts.
Article 23. Amendments. This Contract shall be subject to amendment at any time
by mutual agreement of the parties hereto, except insofar as any proposed amendments are in any
way contrary to applicable law, or would have a material adverse effect upon the owners of any of
the Tax-Exempt Obligations. As a condition to any amendment to this Contract or to the other
Water Supply Contracts, the District shall first have received written confinnation from the rating
LOPEZ WATER CONTRACT 36
agency or agencies then providing a rating for the Tax-Exempt Obligations, to the effect that the
proposed amendments will not adversely affect the rating of the Tax-Exempt .obligations and, in the
event that the Tax-Exempt Obligations, or any portion thereof, shall be covered by municipal bond
insurance, the District shall have received prior written consent to such proposed amendments from
the provider of such bond insurance. Amendments may be effected upon the following conditions:
(A) Amendments to this Contract or the other Water Supply Contracts which have
the effect of replacing the Agency's or any Other Agency's Proportionate Share of Project water or
Percentage Share ofTota! Contract Payments with water purchases by or revenues contributed from
either (i) the Agency or some Other Agency or (ii) a new customer, shall be subject to the approval
only of those entities whose Proportionate Shares or Percentage Shares will be affected, and the
District.
(B) Upon the written request of the Agency or any Other Agency, the District
may order the construction or equipping of any Type III Additional Project; provided, however, that
the requesting Agency or Other Agency shall first demonstrate to the satisfaction of the District that
either (i) the proposed Type III Additional Project will be economically feasible with the financial
support of only the requesting Agency and/or Other Agencies who voluntarily participate (whose
Percentage Shares will thereafter be appropriately adjusted); or (ii) the Agency and all of the Other
Agencies will consent to the funding of the Type ill Additional Project and will agree to increase
Total Project Costs sufficiently to provide for the costs thereof. The financing of a Type III
Additional Project may be accomplished through the levy of additional Capital Reserves, the
issuance of additional bonds or other evidences of indebtedness or otherwise. The undertaking of
Type I or Type II Additional Projects shall not require the consent of the Agency or any Other
Agency nor the amendment of this Contract.
LOPEZ WATER CONTRACT 37
(C) Amendments to this Contract and to the other Water Supply Contracts other
than those specified above shall be approved only upon the prior written and unanimous consent of
the District, the Agency and all Other Agencies.
Article 24. Opinions and Detenninations: Good Faith: Infonnation to Be Provided
to Zone 3 Advisorv Committee. (A) Where the tenns of this Contract provide for action to be based
upon opinion, judgment, approval, review or detennination of either party hereto, such terms are not
intended to and shall never be construed to pennit such opinion, judgment,' approval, review of
determination to be arbitrary, capricious or unreasonable. The District and the Agency shall each
act in good faith in performing their respective obligations as set forth in this Contract.
(B) The Zone 3 Advisory Committee, creat7d by appointment of designated
representatives made by the Agency, each Other Agency and the District, is hereby continued for
the purpose of advising the District regarding administrative and operational concerns affecting the
Project. The District covenants and agrees to present to the Zone 3 Advisory Committee, at its
regularly scheduled or specially called meetings, the following items for advice and comment, in
each case, prior to final presentation of the same item to the Board of Supervisors of the County:
(i) the annual budgets for the District;
(ii) the approval of each non-emergency Capital Project which has not
theretofore been included in an annual budget of the District; it being understood and
agreed that emergency repairs and improvements shall be exempt from any
requirement for preview established hereby;
(iii) the mid-year review of actual fiscal performance of the Project, provided
for the then-current Fiscal Year, and in any event, prior to March 3'1 of each calendar
LOPEZ WATER CONTRACT 38
year, which may, to the extent practicable, be combined with the reyiew of the
District's annual budget for the next Fiscal Year; and
(iv) amendments to the methodology or formula established in County Board
Resolution No. 2000-133, adopted April 4, 2000, with respect to the making of
Recreational Budget Transfers.
Article 25. Waiver of Rights. Any waiver at any time by either party hereto of its
rights with respect to a breach or defauJt, or any other matter arising in connection with this Contract,
shall not be deemed to be a waiver with respect to any other breach, default or matter hereunder, nor
as to a breach or default occurring or having occurred under any other Water Supply Contract.
Article 26. Notices. All notices that are required either expressly or by implication
to be given by either party to the other under this Contract shall, if given in writing, be executed on
behalf of the District or for the Agency by such authorized officers as they may each, from time to
time, authorize in writing for such purposes. All notices shall be deemed to have been given and
delivered if delivered personally or if deposited, postage prepaid, with the United States Postal
Service for delivery. Unless and until formally notified otherwise, all notices shall be addressed to
the parties at their addresses shown on the signature page of this Contract; provided, however, that
either party may give written notice to the other of a change in such notice address.
Article 27. Assignment: Pledge. The provisions of this Contract shall apply to and
bind the successors and assigns of the respective parties, including any assignee hereof designated
in connection with the execution and delivery of the Tax-Exempt Obligations, but no assignment
or transfer of this Contract by the Agency, or any part hereof or interest herein, shall be valid until
and unless approved by the District; provided, however, that no further assignment by the District
shall be valid until and unless approved by the Agency and all of the Other Agencies; and provided
LOPEZ WATER CONTRACT 39
further, that, so long as any Tax-Exempt Obligations are outstandingt no such assignment shall be
effective until such time as the District has received assurances from each rating agency then rating
the Tax-Exempt Obligationst to the effect that such transfer shall not adversely affect the rating on
the Tax-Exempt Obligations, and, so long as any Tax-Exempt Obligations are then being insured
by a municipal bond insurance company, until such time as the District has received the written
consent from such bond insurer as to such assignment. The Agency understands and acknowledges
that the District intends to pledge amounts received and to be received hereunder and under the other
Water Supply Contracts to a financial institution and/or nonprofit corporation as further support for
its obligations under the Tax-Exempt Obligations.
Article 28. Inspection of Books and Records. The authorized officers of the Agency
shall have full and free access at all reasonable times to the account books and officialrecords of the
District insofar as the same pertain to the matters and services provided for in this Contract, with the
right at any time during regular office hours of the District to make copies thereof at the Agency's
expense, and the authorized officers of the District shall have similar rights in respect to the account
books and records of the Agency for its Water Enterprise. ,-
Article 29. Severability. Any provision of this Contract that is prohibitedt
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 of affecting the validity, enforceability of legality of such provision in any other
jurisdiction.
Article 30. Water Rights. No provision of this Contract shall be considered to be in
derogation of any existing waiver ofright(s) or claim(s) to Water Right(s) by or any agreements
concerning Water Rights of either party hereof, including but not limited to overlying, prescriptive,
LOPEZ WATER CONTRACT 40
--' ..-
~----_.__.- ,. --.--
appropriative, riparian, or pueblo rights, nor shall it be construed to result in any relinquishment or
adjustment of any such Water Rights or claims thereof; and, in particular, no provision of this
Contract shall be considered to diminish, reduce or affect, in any way, either party's rights pursuant
to California Water Code Section 1005.1 and/or Section 1005.2
Article 31. Wheeling of Water. As used in this Article, the tenn "Existing
Contractor" shall refer to this Agency and any Other Agencies presently having a contract with the
District for the delivery of Project water; any person other than an Existing Contractor which shall
arrange for the delivery of water other than Project water from the District under the tenns hereof
shall be described as a "Wheeling Customer." The Agency, as an Existing Contractor, shall be
entitled to have additional water wheeled to it by the District through the various Units of the
Project, at the actual cost 'of such wheeling, determined in accordance with the tenns and conditions
of the existing contracts by and between the District and the Agency or Other Agencies for the
delivery of State Project Water to the Agency or Other Agencies through the Project.
If at any time during the tenn of this Contract, the District delivers water, other than
Project water, through any Unit of the Project to any Wheeling Customer, said Wheeling Customer
shall be required to pay for such delivery service in a manner and at prices which will return to the
District the largest net revenue practicable, but in no event shall such deliveries be effected at
charges less than those applicable to the delivery of Project water to the Agency through the same
Unit or Units.
In detennining the appropriate charges for water delivered to a Wheeling Customer
hereunder, the District shall take into account the particular Unit or Units through which delivery
of such water is made, shall compare the Operation and Maintenance Costs and Debt Service costs
apportionable to such Unit or Units with Total Project Costs, and shall further compare the amount
^ I nDI:7 UlATI:D CONTRACT 4,1
.
of water delivered to Wheeling Customers through such Unit or Units with the amount of Project
water delivered to Existing Contractors through such Unit or Units for the same period of time.
In calculating credits to the Existing Contractors from the delivery of water to
Wheeling Customers under this Contract and the other Water Supply Contracts, the District shall
apportion such credits according to the Unit or Units through which such water was in fact delivered,
as described in the preceding paragraph.
The provisions of this Article shall be subject to any contracts which the District may
execute with the United States of America for any grants from the Department of Housing and Urban
Development.
Article 32. Execution in CounteIparts. This Contract may be executed in several
counterparts, each of which shall be regarded as an original and all of which shall constitute but one
and the same document.
Article 33. Governing Law, This Contract shall be interpreted, governed and
enforced in accordance with the laws of the State of California applicable to contracts made and
perfonned in such State.
LOPEZ WATER CONTRACT 42
--~.
.---"-
IN WITNESS WHEREOF, the parties hereto have executed this Contract on the date
first above written.
SAN LUIS OBISPO COUNTY FLOOD CONTROL
AND WATER CONSER V ATION DISTRICT
By
Chair, Board of Supervisors
Address for Notices:
Coun~GovenunentCenter
San Luis Obispo, California 93408
Engineering Department
Attn: Coun~ Engineer
APPROVED AS TO FORM:
COUNTY COUNSEL
By
Senior Depu~ Coun~ Counsel
ATTEST:
COUNTY CLERK
By
Depu~
: C.!fY~OYO GRANDE
Mayor. ~
Address for notices:
P.O. Box 550
Arroyo Grande, California 93421
Attn: Ci~ Manager
dministrative ServiceslDepu~ City Clerk
APPROVED AS TO FORM:
~~
Ti othy J. 't el, sq. ---
LOPEZ WATER CONTRACT 43
EXHIBIT A
THE PROJECT
Alluvium Strengthening
A portion of the downstream shell of Lopez Dam will be removed temporarily to allow
access for strengthening of the foundation with stone columns. The area of alluvium to be excavated
would extend about 150 feet downstream from the existing toe of the dam, and the excavation would
be to approximately elevation 340 feet in the center and to 370 feet on the sides. The total volume
of excavated materials to be temporarily stored is estimated to be 400,000 to 500,000 cubic yards
(cy). This includes the topsoil, which will be salvaged and stored separately. During excavation of
the alluvium and installation of the stone columns, groundwater will need to be lowered as much as
30 feet in the excavation area. In addition, ' the outlet control building, portions of the associated
piping, and the outflow channels connecting to Arroyo Grande Creek will need to be relocated
downstream prior to the excavation, or a temporary bypass will need to be constructed, so that the
outlet works can remain operational during the work. The bypass flows could enter the creek either
through an existing pipe that discharges at the County property line (about 1,000 feet downstream)
or at a location developed by the construction contractor near the western edge of the abandoned
trout fann ponds. The outlet control building will be moved approximately 300 feet west along the
access road while the channels will be moved into either one or two new channels 50 to 200 feet
downstream from the existing discharge location.
Stone columns will be installed using a crane-operated vibrating probe. The vibration acts
to densify and strengthen the ground, and the stone columns provide additional strength.
Approximately 2000 columns, approximately 3 to 4 feet in diameter, will be installed in a triangular
pattern with the columns spaced at approximately 7 to 9 feet on centers. The area of installation will
extend from abutment to abutment (approximately 570 feet) and be about 200 feet in width
(upstream/downstream distance) under the existing benn of the downstream shell. Gravel material
for the stone columns (65,000 to 75,000 cy) will be imported by truck throughout the process.
The downstream benn, including the filter/drain material, will be replaced after the columns
are installed using the material removed and stored as well as additional filter/drain material
imported from a commercial source. Additional buttress material will be placed over the
downstream shell after the stone columns are installed and the alluviwn and shell materials that were
removed are replaced. As a result, the Dam crest would be widened by approximately 130 feet. The
buttress may be extended if testing during stone column installation indicates that strengthening of
the alluvium is less than predicted. , This additional buttress would require 200,000 to 400,000 cy
of material.
Water level in the reservoir will need to be maintained at or below the currently mandated
level of 510 feet, possibly down to elevation 480 feet. Construction is estimated to take
approximately 18 months.
LOPEZ WATER CONTRACT A-I
- ,..--- --
Dewatering will be necessary during excavation of the alluvium to elevation 340 feet,
installation of the central stone columns, and replacement of the alluvium to maintain the ground
water level approximately 10 feet below the excavated ground surface. Dewatering may also be
required during excavation ground surface. Dewatering may also be required during excavation of
the borrow material for the buttress if groundwa~er is encountered.
Borrow areas for material needed in strengthening the dam can come from the Arroyo
Grande Creek floodplain downstream of the dam that was excavated during the original construction
of the dam. Approximately 25,000 to 35,000 cy of commercially obtained materials are expected
to be required for "filter and drain" zones of the Dam. The materials will be needed at the beginning
of backfill after the stone columns are completed.
, Appurtenant Facility Improvements
The left abutment has been suspected of having seepage, and the spillway structure (on the
right abutment) requires repairs to areas of the concrete floor and walls. Construction activities will
o,ccur at the spillway and at the left abutment to correct these problems.
Seepage in the left abutment may have carried some abutment materials out though the
drains in the dam, resulting in voids. Grouting will be used to reduce this seepage by filling any
such voids. This work is independent of the remediation activities and could be perfonned in
parallel with them.
LOPEZ WATER CONTRACT A-2
- --~
RESOLUTION NO. 3476
OFFICIAL CERTIFICATION
I, KELL Y WETMORE, Director of Administrative Services/Deputy City Clerk of
the City of Arroyo Grande, County of San Luis Obispo, State of California, do
hereby certify under penalty of perjury, that Resolution No. 3476 is a true, full,
and correct copy of said Resolution passed and adopted at a regular meeting of
the City Council of the City of Arroyo Grande on the,22nd day of August, 2000.
WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 25th
day of August, 2000.
I iI /~ L~')It~
RE, DIRECTOR OF ADMINISTRATIVE SERVICES/-
DEPUTY CITY CLERK