CITY COUNCIL REGULAR MEETING AGENDA PACKET

4141352.1 2 AGREEMENT The recitals hereto are true and correct and are incorporated into the body of this Agreement as set forth in full. 1. Project Description: The Regional Groundwater Facilities Project (hereinafter “Project”), which is currently in a feasibility analysis and conceptual design phase, is intended to provide additional groundwater extraction capacity for Zone 7 and provide groundwater extraction capabilities for the City to recover its GPQ. If approved, the Project would entail the design, construction and operation up to three additional groundwater extraction wells in the Bernal Groundwater Subbasin, and would connect these proposed additional groundwater extraction wells to Zone 7’s existing water transmission system and the existing Hopyard Wells Treatment Facility, increasing the capacity of both assets where necessary. The project will also define the sustainable annual pumping capacity from test well locations to recover the City’s GPQ and provide supplemental groundwater pumping capacity for Zone 7. As currently conceived, Project development is anticipated to have three main phases, which are summarized as follows: A. Phase I – Phase I will explore the technical feasibility of the Project including the feasibility of up to three additional wells in the Bernal Subbasin located within the area shown on Exhibit ‘B,’ attached hereto and incorporated herein. This technical feasibility includes a siting review for new well locations, installing exploratory test wells to analyze potential yields and water quality, and preparing reports that summarize Project feasibility and the basis of design report. In Phase I, both participating entities will evaluate the project’s feasibility before making any Project approvals or committing to Project implementation. Term sheets for Phase II and Phase III will be developed during Phase I, for subsequent consideration by the governing boards of each entity. The scope of this phase is described in full in Section 2, herein. The target date for completion of Phase I is the spring of 2025. B. Phase II – Phase II is anticipated to generally consist of permitting, public outreach, design, construction, start-up, and other tasks. The target completion date for Phase II is the end of 2028. C. Phase III – Phase III is anticipated to be the ongoing long-term operations and maintenance of the Regional Groundwater Facilities after Project commissioning. It is currently envisioned that Zone 7 would be the operator of the Project, with the City reimbursing Zone 7 for a portion of the costs, including but not limited to the costs of operation, maintenance, ongoing regulatory costs, renewal and replacement to be defined in the future regional groundwater Project operations and maintenance agreement between the City and Zone 7. In that model, Zone 7 would, upon request from the City and after any necessary scheduling, extract the City’s GPQ utilizing the Regional Groundwater Facility and convey the water via Zone 7’s transmission system to the City’s turnouts, at which point, the City would then be responsible for conveyance, carriage, and handling of the water. 2. Scope of Work for Phase I: The following outlines the scope of work to implement Phase I of the Project including deliverables and milestones: Page 173 of 248