Laserfiche WebLink
Page 3 of 4 <br />option, each party remains responsible only for its proportionate share of costs incurred <br />through the effective termination date. <br />• Zone 7 must continue supplying the City’s GPQ at wholesale rates during the design <br />and construction phases and until the project is operational. If the project is delayed <br />beyond the operational date due solely to Zone 7, the City will receive its interim <br />groundwater allocation at the reduced In-Lieu Treated Water rate until the project <br />becomes operational. Conversely, delays attributable to the City may result in a <br />corresponding extension of the project schedule. <br />• Zone 7 must provide the City with written notice of proposed change orders exceeding <br />the lesser of 5 percent or $100,000. The City will have 10 work days to provide <br />comments, which Zone 7 must consider before approval. Change orders or budget <br />deviations exceeding the approved contingency/allowance will require prior approval by <br />the governing bodies of both the City and Zone 7. <br />Operation and Long-Term Responsibilities <br />Following construction completion, Zone 7 will own, operate, and maintain the joint <br />groundwater facilities in compliance with all applicable regulatory requirements. The City will <br />continue to retain its contractual GPQ of 3,500 acre-feet per year under its Municipal and <br />Industrial Water Supply Contract with Zone 7. The City will annually provide its anticipated <br />groundwater delivery schedule, while Zone 7 will use reasonable efforts to accommodate <br />seasonal requests for a higher groundwater blend to support water quality management within <br />the City's distribution system. <br /> <br />Zone 7 will receive permanent easements on City-owned land for the ownership, operation, <br />and maintenance of the new groundwater well facilities. In turn, Zone 7 must comply with the <br />Public Park Preservation Act of 1971, which requires Zone 7 to fund park improvements of <br />comparable value to the land used within the parks for the new groundwater facilities. <br /> <br />Annual operation and maintenance costs will be allocated based on the City's proportional use <br />of the project facilities. Zone 7 will establish annual provisional cost rates, bill the City monthly, <br />and reconcile projected and actual costs through an annual true-up process. The agreement <br />also preserves the City's flexibility to satisfy all or part of its groundwater demand from <br />alternative water sources without losing its contractual groundwater entitlement or incurring <br />financial penalties. Likewise, Zone 7 reserves the right to operate other water supply facilities <br />and use other water sources, including treated surface water, to deliver the City’s GPQ. In that <br />event, the City will continue to be billed based on the unit costs of the project facilities for the <br />full GPQ volume. <br /> <br />Repair, replacement, and/or enhancement of the project facilities may be required over time to <br />address aging equipment or meet changing regulations. These activities go beyond the scope <br />and cost magnitude of typical maintenance. As owner of the facilities, Zone 7 will be solely <br />responsible for identifying, funding, and implementing such repair, replacement, and <br />enhancement needs. <br /> <br />Zone 7 intends to own and operate the facilities throughout their useful life, providing the City <br />with a long-term groundwater supply partnership. The term of this agreement is through <br />December 31, 2055, matching the term of the City’s Municipal and Industrial Water Supply <br />Contract with Zone 7. <br /> <br />Page 269 of 344