CITY COUNCIL REGULAR MEETING AGENDA PACKET 9-1-26

5298389.1 6.4.4 Measurement of Water. In order to ascertain the correct cost allocation, water shall be measured as follows: (a) at turnouts: the total volume measured at all City turnouts equals the total volume supplied to City for both its GPQ and water supplied under the Supply Contract; as GPQ and Supply Contract water are a combined delivery that cannot be separately metered, it will be assumed that the volume of water included in City’s GPQ delivery schedule equals the volume of GPQ supplied and that all excess volume is Supply Contract water; (b) at the Wells: the total volume measured from Wells equals the total volume of pumped groundwater; City’s GPQ volume versus this total volume of pumped groundwater equals City’s proportional share factor for Well and Pipeline O&M costs; (c) at the Hopyard: the total volume measured from the effluent of the Hopyard equals the total volume of treated groundwater (including from non-Project wells); City’s GPQ volume versus this total volume equals City’s proportional share factor for Hopyard O&M costs. 6.4.5 Billing and Payment. (a) Estimated Costs. Annually, on or before October 15, Zone 7 shall provide City a provisional GPQ cost rate for the following calendar year based on budgeted costs and projected cost share proportions. (b) Monthly Billing. Zone 7 shall invoice City monthly for actually delivered GPQ. City shall remit payment in full within thirty (30) days from the invoice date. After thirty (30) days, the invoice will accrue interest at a rate of ten percent (10 %) per annum. (c) Annual True Up. Zone 7 will reconcile the provisional cost rate vs. the audited actual cost rate at the conclusion of each calendar year to account for variances between projected and actual costs and cost share proportions. Differences will be credited or debited on the next monthly billing. Zone 7 shall provide reasonable supporting documentation sufficient for the City to verify the annual true up, including the audited actual cost rate, cost share calculations, and explanation of material variances. Upon reasonable written request, the City may review records directly related to the calculation of the annual true up and may dispute any portion within 60 days after receipt of supporting documentation, and the parties shall meet and confer in good faith to resolve the dispute as provided in Section 7 of this Agreement. 6.5 Repair, Replacement, and Enhancement. The Parties understand and agree that the Project facilities may, and likely will, require repair, replacement, and/or enhancement over time to address aging equipment or meet changing regulations. Such future capital improvement activities exceed the scope and cost magnitude of typical maintenance and may require studies/assessments, environmental documentation, design, and construction services to implement (“Capital Improvements”). Zone 7 shall be solely responsible for identifying, Page 282 of 344