CITY COUNCIL REGULAR MEETING AGENDA PACKET 9-1-26

5298389.1 6.3.4 Zone 7 Delivery Obligations. Zone 7 shall utilize commercially reasonable efforts to deliver City’s GPQ per the delivery schedule. Delivered water shall be of a quality that complies with the requirements for Drinking Water of the California State Water Resources Control Board’s Division of Drinking Water and the United States Environmental Protection Agency. Unless otherwise agreed to in writing by the Parties, and to the extent consistent with the terms of this Agreement, which shall govern in the event of any inconsistency, the Supply Contract shall govern delivery of Project water and any other terms related to Project operations not included in this Agreement. 6.3.5 No Exclusivity. City reserves the right, at its sole discretion, to satisfy its annual GPQ, in whole or in part, using sources external to the Project. The exercise of this right shall not constitute a breach of this Agreement or result in any penalties, surcharges, or reductions in City’s entitlements hereunder. Zone 7 may likewise operate other water supply facilities and use other water sources, including treated surface water, to meet and deliver City’s GPQ. 6.3.6 Requests for Increase in Groundwater Proportion of Supply. Zone 7 acknowledges that during certain times of the year City may request an increased proportion of groundwater in deliveries to the City’s turnouts to support water quality management within the City’s distribution system. During such periods, Zone 7 shall use all reasonable efforts to accommodate City’s requested groundwater blend, to the extent feasible and consistent with Zone 7’s overall system operational needs, SGMA and other regulatory requirements, and any other applicable operational constraints as determined by Zone 7. 6.4 Cost Sharing. 6.4.1 Cost Allocation and Calculation. The Parties shall share annual O&M costs on a pro rata basis based on pumped GPQ. The following elements shall serve as the basis for O&M costs: (a) Wells and Pipelines: labor, material/supplies, and power costs; (b) Hopyard: labor, chemicals, material/supplies, and power costs. 6.4.2 Cost Adjustments. In the event Project facilities are unable to satisfy City’s GPQ delivery amount in full and Zone 7’s other facilities are used to deliver a portion of City’s GPQ, the approximated unit cost of water production for the Project facilities will be used in lieu of the actual cost of production or conveyance from Zone 7’s other facilities. 6.4.3 Annual True Up. In the event costs are billed and later discovered to differ from those Zone 7 actually incurred to deliver City’s GPQ, Zone 7 shall annually adjust for said billing disparities as described in section 6.4.5, subdivision (c) of this agreement. Page 281 of 344