CITY COUNCIL REGULAR MEETING AGENDA PACKET 9-1-26

5298389.1 Construction Phase Services (final design, construction, construction management, Owner Rep Services) Zone 7 Community Outreach City Electric Utility Service Zone 7 *Except as exempted by Government Code Section 53091 or other applicable law 4.2 Project Schedule. During the preliminary design phase of the Project, Zone 7 shall develop a “Project Schedule” that identifies Project milestones and deliverables, and the anticipated dates of commencement and completions for such milestones and deliverables, provided that the anticipated Project operational date shall be set as December 28, 2029 (“Startup Date”). Zone 7 shall submit the proposed Project Schedule to City for review and comment. Zone 7 agrees to consider City’s comments on the Project Schedule and to incorporate City’s comments where appropriate and feasible. Zone 7 shall provide quarterly written reports to City on the state of the Project Schedule for the duration of the design, permitting, and construction phase of the Project. Failure to comply with the Project Schedule due to market conditions, delays in funding authorizations, contractor breach of contract or other failure to perform, or other factors outside of Zone 7’s control shall not constitute a material breach of this Agreement. 4.3 Project Budget. The total estimated cost of design, permitting, and construction of the Project is $42.3 million. As the lead agency, Zone 7 shall be responsible for allocating the project budget amongst the services and contracts necessary to deliver the Project. Zone 7 shall provide quarterly written reports to City on the state of the Project Budget for the duration of the design, permitting, and construction phase of the Project. The Project Budget does not include the costs of self-performing tasks for the Parties, such as project management, consultant management, and deliverable reviews. 4.4 Project Authorizations. Zone 7 shall obtain funding authorization from the governing body of both Parties to proceed with contracts for services prior to entering into agreements and prior to issuing amendments/change orders that exceed the allowance/contingency included in the original approval. Matters that do not require funding authorization, even if they require Zone 7’s governing body approval (e.g., CEQA approval), shall not require authorization from the City’s governing body. Staff representing the City may provide updates to its governing body as needed. 4.5 Cost Sharing. 4.5.1 Allocation. City and Zone 7 shall proportionally share the costs of design, permitting, and construction of the Project based on the City’s GPQ expressed as a percentage of the Project’s estimated annual production capacity for average year basin conditions. City shall be responsible for 36%, and Zone 7 for 64%, of the costs of design, permitting, and construction of the Wells and Pipelines; City shall be responsible for 23%, and Zone 7 for 77%, of the costs of design, permitting, and construction of the Hopyard Upgrades. The Parties shall each bear their own costs associated with self-performing tasks including project management, Page 273 of 344