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HomeMy WebLinkAbout96-094~~+ ~~ ~S U •~r'~i~ •~,V ~• ' ''+•~ ~ •i a°a ~ BOARD OF SUPERVISORS * = ' *~ COUNTY OF BUTTE, STATE OF CALIFORNIA .~ ~~~~e~~COUI ~~~'i~~~ ~c'SOlufi~n ~~~o, 96-94 RESOLUTION AUTHORIZING THE CHAIR OF THE BOARD TO EXECUTE' AND DELIVER AMENDMENT NUMBER 13 TO THE STATE WATER CONTRACT TO THE CALIFORNIA DEPARTMENT OF WATER RESOURCES WHEREAS, the County of Butte ("County") is a party to a contract dated December 26, 1963 between the County and the State of California, Department of Water Resources ("State") ("Water Supply Agreement"); and WHEREAS, the Water Supply Agreement is substantially identical to agreements between the State and 28 other public entities in California, each of which is known as a State Water Contractor; and WHEREAS, the Water Supply Agreement between the State and the County has been amended on twelve (12) separate occasions since its execution; and WHEREAS, certain disputes have arisen among various State Water Contractors, and between certain State Water Contractors and the State. Thane disputes were the subject of intensive negotiations among the interested parties (not including the County), and in December 1994 those negotiations culminated in an agreed upon set of principles upon which a settlement of those disputes could be achieved; and WHEREAS, since the settlement principles were agreed upon, the interested parties have developed specific contract language which embody these principles, and have formulated that language into an amendment to the Water Supply Agreement. Concurrently, the interested parties have taken steps to ensure that all requirements of the California Environmental Quality Act are satisfied with regard to any changes to the Water Supply Agreement; and WHEREAS, attached to this Resolution as Exhibit A is Amendment Number 13 to the Water Supply Agreement which incorporates the contractual language agreed to by the State and the State Water Contractors {"Amendment"); and WHEREAS, attached to the Amendment as Exhibit A-1 is a White Paper dated September 1995, which sets forth how the State will administer the various provisions of the Amendment; and WHEREAS, Attached to this Resolution as Exhibit B are Findings and Mitigation Measures for Implementation of the Monterey Agreement Principles; and WHEREAS, attached to this Resolution as Exhibit C is the Monterey Agreement Principles Implementation Environmental Mitigation Monitoring Program; and NOW, THEREFORE, BE IT RESOLVED that: 1. The Findings pursuant to the California Environmental Quality Act of 1970, attached hereto as Exhibit B, are hereby adopted and determined to be true. 2. The Mitigation Monitoring Program pursuant to CEQA, attached hereto as Exhibit C, is hereby adopted and approved as a condition of the County's approval of the Amendment. -2- 2. The Mitigation Monitoring Program pursuant to CEQA, attached hereto as Exhibit C, is hereby adopted and approved as a condition of the County's approval of the Amendment. 3. The Amendment in the form of the attached Exhibit A, with such changes as may be approved by the Chair and County Counsel of the County, is hereby approved. 4. The Chair is authorized to execute and deliver the Amendment to the State for execution. 5. The Clerk of the Board is hereby authorized and directed to file the Notice of Determination pursuant to CEQA. 6. This Resolution shall take effect immediately. PASSED AND ADOPTED by the Board of Supervisors of the County of Butte, State of California, on the 13th day of August 1996, by the following vote: AYES: Supervisors Dolan, Houx, Thomas and Chair. McLaughlin. NOES : Supervisor Meyer ABSENT : None NOT VOTING : None Ed McLaughlin , Chair Butte County Board of Supervisors ATTESTED: JOHN BLACKLOCK Chief Administrative Officer and the Clerk of t~i~ Board deputy -3- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA THE RESOURCES AGENCY DEPARTMENT OF WATER RESOURCES AMENDMENT NO. 13 (THE MONTEREY AMENDMENT) TO WATER SUPPLY CONTRACT BETWEEN THE STATE OF CALIFORNIA DEPARTMENT OF WATER RESOURCES AND COUNTY OF BUTTE THIS AMENDMENT to the Water Supply Contract is made this day of , 1995, pursuant to the ~ provisions of the California Water Resources Development Bond Act, the Central Valley Project Act, and other applicable laws of the State of California, between the State of California, acting by and through its Department of Water Resources, herein referred to as the "State", and County of Butte, herein referred to as the "Agency". RECITALS: WHEREAS, the State and the Agency have entered into and subsequently amended a water supply contract providing that the State will supply certain quantities of water to the Agency, and providing that the Agency shall make certain payments to the State, and SettlT7g forth the terms and conditions of such supply and such ~ payment; and WHEREAS, on December 1, 1994, representatives of the contractors and the State executed a document entitled "Monterey ~ i Agreement - Statement of Principles - By the State Water Contractors and the State of California Department of Water Resaurces For Potential Amendments To The State Water Supply Contracts" (the "Monterey Agreement"); and 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 l9 20 21 22 23 24 25 26 27 28 WHEREAS, the contractors and the State have negotiated an amendment to the water supply contracts to implement provisions of the Monterey Agreement (the "Monterey Amendment"); and WHEREAS, the State and the Agency desire to implement such provisions by incorporating this Monterey Amendment into the water supply contract; NOW, THEREFORE, IT IS MUTUALLY AGREED that the following changes and additions are hereby made to the Agency's water supply contract with the State: ~ 1. Article 1(d) is amended to read: (d) Contractor "Contractor" shall mean any entity that has executed, or is an assignee of, a contract of the type published in Department of I! Water Resources Bulletin No. 141 dated November 1965, with the State for a dependable supply of water made available by the System, except such water as is made available by the facilities specified in Section 12934(d)(6} of the Water Cade. 2. Article 1(k) is amended to read: (k) Minimum Project Yield "Minimum project yield" shall mean the dependable annual supply of project water to be made available, estimated to be 4,185,000 acre-feet-per year, said amount to be determined by the State on the basis of coordinated operation studies of initial project conservation facilities and additional project conservation facilities, which studies shall be based upon: 2 1 2 3 4 5 6 7 ~ 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 {1} The estimated relative proportion of deliveries for agricultural use to deliveries for municipal use for the year 1990, I and the characteristic distributions of demands for these two uses throughout the year. ' (2) Agreements now in effect or as hereafter amended or supplemented between the State and the United States and others regarding the diversion or utilization of waters of the Delta or streams tributary thereto. 3. Article 1(hh) is amended to read: (hh) Water System Facilities (hh) "Water System Facilities" shall mean the following facilities to the extent that they are financed with water system revenue bonds or to the extent that other financing of such facilities is reimbursed with proceeds from water system revenue I bonds: (1} The North Bay Aqueduct, (2) The Coastal Branch Aqueduct, (3) Delta Facilities, including Suisun Marsh facilities, to serve the purposes of water conservation in the Delta, water supply in the Delta, transfer of water across the Delta, and mitigation of the environmental effects of project facilities, and to the extent presently authorized as project purposes, recreation and fish and wildlife enhancement, (4} Local projects as defined in Article 1(h)(2} designed to develop no more than 25,000 acre-feet of project yield from each project, 3 1 2 3 4 5 61 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 6 ~I 2 7 ~ 2 8 I~ (5} Land acquisition prior to December 31, 1995, for the Kern Fan Element of the Kern Water Bank, (6) Additional pumps at the Banks Delta Pumping Plant, (7} The transmission line from Midway to Wheeler Ridge Pumping Plant, (8) Repairs, additions, and betterments to conservation or transportation facilities existing as of January 1, 1987, and to all other facilities described in this subarticle (hh) except for item (5), (9) A project facilities corporation yard, and (10} A project facilities operation center. 4. Article 1(jj} is added to read: (jj) Interruptible water "Interruptible water" shall mean project water available as determined by the State that is not needed for fulfilling contractors' annual entitlement deliveries as set forth in their water delivery schedules furnished pursuant to Article 12 or for meeting project operational requirements, including storage goals for the current or following years. 5. Article 1(kk) is added to read: (kk) Nonproject water -"Nonproject water" shall mean water made available for delivery to contractors that is not project water as defined in Article 1(j) 4 1 2 3 4 S 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6. Article 1(11) is added to read: (11) "Monterey Amendments" shall mean this amendment and substantially similar amendments to other contractors' water supply contracts that include, among other provisions, the addition of Articles S1 through 56. 7. Article 4 is amended to read: 4. OPTION FOR CONTINUED SERVICE By written notice to the State at least six (6} months prior to the expiration of the term of this contract, the Agency may elect to receive continued service after expiration of said term under the following conditions unless otherwise agreed to: (1) Service of water in annual amounts up to and including the Agency's maximum annual entitlement hereunder. (2) Service of water at no greater cost to the Agency than would have been the case had this contract continued in effect. (3) Service of water under the same physical conditions of service, including time, place, amount and rate of delivery, as are provided for hereunder. (4} Retention of the same chemical quality objective provision as is set forth herein. {5} Retention of the same options to utilize the project transportation facilities as are provided for in Articles 18 (c} and 55, to the extent such options are then applicable. 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Other terms and conditions of the continued service shall be reasonable and equitable and shall be mutually agreed upon. In the event that said terms and conditions provide for continued service for a limited number of years only, the Agency shall have the same option to receive continued service here provided for upon the expiration of that and each succeeding period of continued service. 8. Article 7(a) is amended to read: (a~ Changes in Annual Entitlements The Agency may, at any time or times during the term of this contract, by timely written notice furnished to the State, request that project water be made available to it thereafter in annual amounts greater or less than the annual entitlements designated in Table A of this contract. Subject to approval by the State of any such request, the State's construction schedule shall be adjusted to the extent necessary to satisfy the request, and the requested increases or decreases in said annual entitlements shall be incorporated in said Table A by amendment thereof. Requests for changes in annual entitlements for more than one year shall be approved by the State: Provided, That no change shall be approved if in the judgment of the State it would impair the financial feasibility of project facilities. 9. The title of Article 12 is amended to read "Priorities, Amounts, Times and Rates of Deliveries". 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10. Article 12 (a}(2) is amended to read: {2} Upon receipt of a preliminary schedule the State shall review it and, after consultation with the Agency, shall make such modifications .in it as are necessary to insure the delivery of the annual quantity allocated to the Agency in accordance with Article 18 and to insure that the amounts, times, and rates of delivery to the Agency will be consistent with the State's overall delivery ability, considering the then current delivery schedules of all contractors. On or before December 1 of each year, the State shall determine and furnish to the Agency the water delivery schedule for the next succeeding year which shall show the amounts of water to be delivered to the Agency during each month of that year. 11. Article 12 (d} is deleted. 12. Article 12 (f} is added to read: (f) Priorities Each year water deliveries to the contractors shall be in accordance with the following priorities to the extent there are conflicts: First, project water to meet scheduled deliveries of contractors' annual entitlements for that year. Second, interruptible water to the extent contractors' annual entitlements for that year are not met by the first priority. Third, project water to fulfill delivery requirements pursuant to Article 14{b?• 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1a 19 20 21 22 23 24 25 26 27 2a Fourth, project water previously stored pursuant to Articles 12 (e) and 56. Fifth, nonproject water to fulfill contractors' annual entitlements far that year not met by the first two priorities. Sixth, additional interruptible water delivered to contractors in excess of their annual entitlements for that year. Seventh, additional nonproject water delivered to contractors in excess of their annual entitlements for that year. 13. Article 14 is amended to read: Curtailment of Deliver Y State a Curtail Deliveries (a) M y The State may temporarily discontinue or reduce the delivery of project water to the Agency hereunder for the purposes of necessary investigation, inspection, maintenance, repair, or replacement of any of the project facilities necessary far the delivery of project water to the Agency, as well as due to outages in, or reductions in capability of, such facilities beyond the State's control or unuseability of project water due to an emergency affecting project facilities. The State shall notify the Agency as far in advance as possible of any such discontinuance or reduction, except in cases of emergency, in which case notice need not be given. (b) Agency May Receive Later Delivery of Water Not Delivered In the event of any discontinuance or reduction of delivery of project water pursuant to subdivision (a) of this article, the Agency may elect to receive the amount of annual entitlement which otherwise would have been delivered to it during such period under a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the water delivery schedule for that year at other times during the year or the succeeding year to the extent that such water is then available and such election is consistent with the State's overall delivery ability, considering the then current delivery schedules of annual entitlement to all contractors. 14. Article 16(a) is amended to read: (a} Limit on Total of all Maximum Annual Entitlements The Agency's maximum annual entitlement hereunder, together with the maximum annual entitlements of all other contractors, shall aggregate no more than the minimum project yield as defined herein and in no event more than 4,185,000 acre-feet of project water. 15. Article 18 is amended to read: 18. SHORTAGE IN WATER SUPPLY (a} Shortages; Delivery Priorities In any year in which there may occur a shortage due to drought or any other cause whatsoever, in the supply of project water available for delivery to the contractors, with the result that such supply is less than the total of the annual entitlements of all contractors for that year, the State shall allocate the available supply in proportion to each contractor's annual entitlement as set forth in its Table A for that year and shall reduce the allocation of project water to each contractor using such water for agricultural purposes and to each contractor using such water for other purposes by the same percentage of their respective annual entitlements for that year: Provided, that the State may allocate on some other basis if such is required to meet minimum demands of 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contractors for domestic supply, fire protection, or sanitation during the year. If a contractor is allocated more water than it requested, the excess water shall be reallocated among the other contractors in proportion to their annual entitlements as provided for above. The foregoing provisions of this subdivision shall be inoperative to the extent necessary to comply with subdivision (c) of this article and to the extent that a contractor's annual entitlement for the respective year reflects established rights under the area of origin statutes precluding a reduction in deliveries to such contractor. (b) - Deleted (c} Permanent Shortage; Contracts for Areas-of-Origin In the event that the State, because of the establishment by a party of a prior right to water under the provisions of Sections 11460 through 11463 of the Water Code, enters into a contract with such party for a dependable supply of project water, which contract will cause a permanent shortage in the supply of project water to be made available to the Agency hereunder: {1) The State shall: (i} equitably redistribute the costs of all transportation facilities included in the System among all contractors for project water, taking into account the diminution of the supply to the Agency and other prior contractors in accordance with the terms of their contracts, and {ii} revise the Agency's annual entitlements and maximum annual entitlement, by amendment of Table A of this contract to correspond to the reduced supply of project water to be made available to the Agency: Provided, That such redistribution of costs of transportation facilities shall not be made until there has been reasonable 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 opportunity for the Agency to exercise the option provided for in {2) below, and for other prior contractors to exercise similar options. {2) The Agency, at its option, shall have the right to use any of the project transportation facilities which by reason of such permanent shortage in the supply of project water to be made available to the Agency are not required for delivery of project water to the Agency, to transport water procured by it from any other source: Provided, That such use shall be within the limits of the capacities provided in the project transportation facilities for service to the Agency under this contract : Provided further, That, except to the extent such limitation in Section 12931 of the ~ Water Code be changed, tre Agency shall not use the project transportation facilities under this option to transport water the right to which was secured by the Agency through eminent domain unless such use be approved by the Legislature by concurrent resolution with a majority of the members elected to each house voting in favor thereof. This option shall terminate upon a redistribution of costs of transportation facilities by the State pursuant to {1) above. In the event that this option is exercised, the State shall take such fact into account in making such redistribution of costs, and shall offset such use as is made of the project transportation facilities pursuant thereto against any reduction in the Agency's payment obligation hereunder resulting from such redistribution of costs. 11 1 2 I 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (d) Reinstatement of Entitlements If after any revision of annual entitlements and maximum annual entitlements pursuant to subdivision (c} of this article, circumstances arise which, in the judgment of the State, justify a revision upward of the same, the State shall, with. the consent of the affected contractor, reinstate proportionately the previously reduced entitlements of such contractor to the extent deemed ' justified, and shall equitably redistribute the costs of the project transportation facilities if inequities would otherwise occur as a result of such reinstatement of entitlements. ~ (e) Advance Notice of Delivery Reductions The State shall give the Agency written notice as far in advance as possible of any reduction in deliveries to it which is to be made under subdivision (a) of this article and, to the extent possible, shall give the Agency written notice five (5) years in advance of any reduction in its annual entitlements and maximum annual entitlement under subdivision (c} of this article. Reports submitted to the Agency pursuant to Article 16 (c) may constitute such notices. (f} No Liability for Shortages Neither the State nor any of its officers, agents, or employees shall be liable for any damage, direct or indirect, arising from shortages in the amount of water to be made available for delivery to the Agency under this contract caused by drought, operation of area of origin statutes, or any other cause beyond its control. 12 1 2 3 4 5 6 7 8 9 10 11 12 l3 14 15 16 17 18 19 20 21 22 23 24 25 26 2 7 '~ 2 8 ICI 16. Old Article 21 "Sale of Surplus Water" is deleted and replaced by new Article 21 "Interruptible Water Service" to read: 21. =nterruptible Water Service (a} Allocation of Interruptible Water Each year from water sources available to the project, the State shall make available and allocate interruptible water to contractors in accordance with the procedure in Article 18(a}. Allocations of interruptible water in any one year may not be carried over for delivery in a subsequent year, nor shall the delivery of interruptible water in any year impact a contractor's approved deliveries of annual entitlement or the contractor's allocation of water for the next year. Deliveries of interruptible water in excess of a contractor's annual entitlement may be made if the deliveries do not adversely affect the State's delivery of annual entitlement to other contractors or adversely affect project operations. Any amounts of water owed to the Agency as of the date of this amendment pursuant to former Article 12(d), any contract provisions or letter agreements relating to wet weather water, and any Article 14 (b} balances accumulated prior to 1995, are canceled. The State shall hereafter use its best efforts, in a manner that causes no adverse impacts upon other contractors or the project, to avoid adverse economic impacts due to a contractor's inability to take water during wet weather. (b} Rates For any interruptible water delivered pursuant to this article, contractors shall pay the State the same {including adjustments) for power resources (including on-aqueduct, 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 off-aqueduct, and any other power) incurred in the transportation of such water as if such interruptible water were entitlement water, as well as all incremental operation, maintenance, and replacement costs, and any other incremental costs, as determined by the State. The State shall not include any administrative or contract preparation charge. Incremental costs shall mean those nonpower costs which would not be incurred if interruptible water were not scheduled for or delivered to the contractor. Only those !i contractors not participating in the repayment of the capital costs of a reach shall be required to pay any use of facilities charge for the delivery of interruptible water through that reach. (c) Contracts To obtain a supply of interruptible water, a contractor shall execute a further contract with the State which shall be in conformity with this article and shall include at least provisions concerning the scheduling of deliveries of interruptible water and times and methods of payment. 17. Article 22 (j) is amended to read: {j} Notwithstanding provisions of Article 22{a) through (i), the capital cost component and the minimum OMP&R component of the Delta Water Charge shall include an annual charge to recover the Agency's share of the conservation portion of the water system revenue bond financing costs. Charges to the Agency for these costs shall be calculated in accordance with provisions in Article 50 of this contract. Charges for the conservation portion of the water system revenue bond financing costs shall not be affected by any reductions in payments pursuant to Article 51. 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1S 16 17 18 19 20 21 22 23 24 25 26 27 28 18. The first paragraph of Article 24(b) is amended to read: (b) In the first step, the total amount of capital costs of each aqueduct reach to be returned to the State shall be allocated among all contractors entitled to delivery of project water from or through the reach by the proportionate use of facilities method of cost allocation and in accordance with {1) and (2) below. The measure of the proportionate use of each contractor of each reach shall be the average of the following two ratios: {i) the ratio of the contractor's maximum annual entitlement to be delivered from or through the reach to the total of the maximum annual entitlements of all contractors to be delivered from or through the reach from the year in which charges are to be paid through the end of the project repayment period and (ii) the ratio of the capacity provided in the reach for the transport and delivery of project water to the contractor to the total capacity provided in the reach for the transport and delivery of project water to all contractors served from or through the reach from the year in which charges are to be paid through the end of the project repayment period. Allocations of capital costs to the Agency pursuant hereto shall be on the basis of relevant values which will be set forth in Table B of this contract by the State as soon as designs and cost estimates are prepared by it subsequent to receipt of requests from the Agency as to the maximum monthly delivery capability to be provided in each aqueduct reach of the project transportation facilities for the transport and delivery of project water to the Agency, pursuant to Article 17(a) Provided, That these values shall be subject to redetermination by the State in accordance with Article 28: Provided further, That the principles and procedures set forth in this ~s 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2a 21 22 23 24 25 26 27 28 subdivision shall be controlling as to allocations of capital costs to the Agency. Proportionate use of facilities factors for prior I~, years shall not be adjusted by the State in response to changes or transfers of entitlement among contractors unless otherwise agreed ', by the State and the parties to the transfer and unless there is no impact on past charges or credits of other contractors. 19. Article 24 (g) is amended to read: (g} Notwithstanding provisions of Article 24 (a} through (d), the capital cost component of the Transportation Charge shall include an annual charge to recover the Agency's share of the transportation portion of the water system revenue bond financing costs. Charges to the Agency for these costs shall be calculated ~' in accordance with the provisions of Article 50 of this contract. Charges for the transportation portion of the water system revenue bond financing costs shall not be affected by any reductions in payments pursuant to Article 51. 20. Article 25(d)(3) is amended to read: (3} An interim adjustment in the allocation of the power costs calculated in accordance with {2) above, may be made in May of each year based on April revisions in approved schedules of deliveries of project and nonproject water for contractors for such year. A further adjustment shall be made in the following year based on actual deliveries of project and nonproject water for contractors provided, however, in the event no deliveries are made through a pumping plant, the adjustments shall not be made for that year at that plant. 16 1 2 3 4 5'~I 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21. Article 50(j) is added to read: (~} Amounts payable under this article shall not be affected !, by any reductions in payments pursuant to Article 51. 22. Article 51 is added to read: 51. FINANCIAL ADJUSTMENTS {a} General Operating Account (1) The State shall maintain a General Operating Account to provide the moneys needed to pay obligations incurred by the State of the types described in Water Cade sections 12937(b}(1) and (2) in the event of emergency or cash flow shortages. (2} An initial deposit of $15 million shall be made available from revenue bond reserves that are no longer required by revenue bond covenants and that would otherwise be credited to the contractors including the Agency. In 1998 or when the funds become available an additional $7.7 million will be deposited in the General Operating Account from revenue bond reserves that are no longer required by revenue bond covenants and that would otherwise be credited to the contractors including the Agency, bringing the deposits to that account under this article to $22.7 million. (3} The balance in the General Operating Account will increase pursuant to subdivision (e} {3) (v} of this article to an amount determined by the State but not in excess of $32 million. However, after the year 2001, the maximum amount of the fund may increase or decrease annually by not mare than the same percentage as the increase ar decrease in the charges, other than power charges far pumping water, to all the contractors for the previous year from 17 1 2 3 4 5 6 7 I 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2S 26 27 28 the charges for the year before that for obligations under subdivisions (c)(2)(ii) and (iii} of this article. I ', (b) State Water Facilities Capital Account ', (1) The State shall establish a State Water Facilities Capital Account to be funded from revenues available under Water Code section 12937(b)(4). Through procedures described in this article and as limited by this article, the State may consider as a revenue need under subdivision (c)(2)(v) of this article and may deposit in the State Water Facilities Capital Account the amounts necessary to pay capital costs of the State Water Facilities for which neither general obligation bond nor revenue bond proceeds are available, including but not limited to planning, reconnaissance and feasibility studies, the San Joaquin Valley Drainage Program and, through the year 2000, the CALFED Bay-Delta Program. (2) The Director of the Department of Water Resources shall fully consult with the contractors and consider any advice given prior to depositing funds into this account for any purposes. Deposits into this account shall not exceed the amounts specified in subdivision (c)(2)(v) of this article plus any amounts determined pursuant to subdivision (e)(1)(iii) of this article. (3} The State shall use revenue bonds or other sources of moneys rather than this account to finance the costs of construction of any major capital projects. (c) Calculation of Financial Needs II (1) Each year the State shall calculate in accordance with the timing provisions of Articles 29 and 31 the amounts that would have been charged (but for this article) to each contractor as provided in other provisions of this contract. 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1S 16 17 18 19 20 21 22 23 24 25 2s 27 28 (2} Each year the State shall also establish its revenue needs far the following year for the following purposes, subject to the following limitations: (i) The amount required to be collected under the provisions of this contract, other than this article, with respect to all revenue bonds issued by the State for Project Facilities. (ii) The amount required for payment of the reasonable ~ costs of the annual maintenance and operation of the State Water Resources Development System and the replacement of any parts thereof as described in Water Code section 12937(b){1) These costs shall not include operation and maintenance costs of any Federal Central galley Project facilities constructed by the United States and acquired by the State of California after 1994, other than the State's share of the joint use facilities which include San Luis Reservoir, the San Luis Canal and related facilities. (iii) The amount required for payment of the principal of and interest on the bonds issued pursuant to the Burns-Porter Act as described in Water Code section 12937(b)(2). {iv) Any amount required for transfer to the California Water Fund in reimbursement as described in Water Code section 12937(b)(3) for funds utilized from said fund for construction of the State Water Resources Development System. (v} For the years 1998 and thereafter, the amount needed for deposits inta the State Water Facilities Capital Account as provided in subdivision (b} of this article, but (A) not more than $6 million per year for the years 1998, 1999 and 2000, and {B) not more than $4.5 million per year for the years 2001 and thereafter. 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2D 21 22 23 24 25 26 27 28 (3} Subject to the provisions of subdivision {e) of this article, the State shall reduce the annual charges in the aggregate for all contractors by the amounts by which the hypothetical charges calculated pursuant to subdivision {c){1) above exceed the revenue needs determined pursuant to subdivision (c){2} above. The reductions under this article shall be apportioned among the contractors as provided in subdivisions (d), (e), (f} and {g} of this article. Reductions to contractors shall be used to reduce the payments due from the contractors on each January 1 and July 1; Provided, however, that to the extent required pursuant to subdivision (h} of this article, each Agricultural Contractor shall pay to the Agricultural Rate Management Trust Fund an amount equal to the reduction allocated to such Agricultural Contractor. Any default in payment to the trust fund shall be subject to the same remedies as any default in payment to the State under this contract. (4) The State may submit a supplemental billing to the Agency for the year in an amount not to exceed the amount of the prior reductions for such year under this article if necessary to meet unanticipated costs for purposes identified in Water Code section 12937 {b) {1) and (2) for which the State can issue billings under other provisions of this contract. Any supplemental billing made to the Agency for these purposes shall be in the same proportion to the total supplemental billings to all contractors for these purposes as the prior reduction in charges to the Agency in that year bears to the total reductions in charges to all contractors in that year-and shall be treated as reducing the amount of the reduction made available for that year to the Agency by the amount of the supplemental bill to the Agency. 2Q 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (5} The State may also submit a supplemental billing to the Agency for the year if necessary to meet unanticipated costs for revenue band debt service and coverage for which the State can issue a statement of charges under provisions of this contract other than this article. The relative amounts of any supplemental billing made to the Agency and to other contractors for revenue band purposes shall be governed by such other applicable provisions of this contract. (6} Payment of any supplemental billing shall be due thirty days after the date of the invoice. Delinquency and interest on delinquent amounts due shall be governed by Article 32. (d} Apportionment of Reductions between Agricultural and Urban Contractors (1} Reductions available under this article are projected to begin to occur in 1997. The numbers and percentages in this subdivision reflect certain estimates of dollars and sharing of reductions. The actual reductions may vary slightly from the amounts described below. The State shall determine the availability of reductions for each year in accordance with this article. (2} Reductions shall be phased in as follows: {i) In 1997 reductions in the amount of $14 million are projected to be available and shall be applied as follows: the first $10 million of reductions shall be apportioned among the Agricultural Contractors, and the remaining reductions shall be apportioned among the Urban Contractors. {ii) In 1998 reductions in the amount of $17 million are projected to be available and shall be applied as follows: the first $10 million of reductions shall be apportioned among the 21 1 2 ~ 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ~ Agricultural Contractors, and the remaining reductions shall be ~ apportioned among the Urban Contractors. {iii) In 1999 reductions in the amount of $32 million are projected to be available and shall be applied as follows: the first $10 million of reductions shall be apportioned among the Agricultural Contractors, and the remaining reductions shall be apportioned among the Urban Contractors. (iv) In 2000 reductions in the amount of $33 million are projected to be available and shall be applied as follows: the first $ZO million of reductions shall be apportioned among the Agricultural Contractors, and the remaining reductions shall be apportioned among the Urban Contractors. (3)(i) In the event that the aggregate amount of reductions in any of the years 1997 through 2000 is less than the respective amount projected for such year in subdivision (d){2) above, the shortfall shall be taken first from reductions that would have been provided to Urban Contractors. Only after all reductions to Urban Contractors have been eliminated in a given year shall the remaining shortfall be taken from reductions scheduled for Agricultural Contractors. Any projected reductions not made available due to such shortfalls in the years 1997 through 2000 shall be deferred with interest at the praject interest rate to the earliest subsequent years when reductions in excess of those projected for those years are available. Such deferred reductions with interest at the project interest rate shall be applied to the charges of the contractors whose reductions have been deferred. {ii) In the event that the aggregate amount of reductions available in any of the years 1997 through 2000 is 22 1 2 3 4 5 6 7 8 9 la 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 greater than the sum of (A} the respective amount projected for such year in subdivision (d}{2} above, plus (B) the amount of any shortfall with accrued interest at the project interest rate, remaining from any prior year to be applied, the excess shall be applied for the purposes and in the amounts per year described in subdivisions (e)(3)(iii), (iv}, (v) and (vi} of this article, in I that order. {4) In 2001 and in each succeeding year reductions equal to or in excess of $40.5 million are projected to be available and shall be applied as follows: (i} If reductions are available in an amount that equals or exceeds $40.5 million, $10 million of reductions shall be apportioned among the Agricultural Contractors, and $30.5 million of reductions shall be apportioned among the Urban Contractors. If reductions are available in an amount greater than $40.5 million, the excess shall be applied as provided in subdivision (e){3) of this article, subject however to subdivision {e)(1). (ii) If reductions are available in an amount less than $40.5 million in any of these years, the reductions shall be divided on a 24.70 - 75.30 basis between the Agricultural Contractors and the Urban Contractors respectively. Any such reductions not made due to shortages shall be applied without interest in the next year in which reductions in an amount in excess of $40.5 million are available pursuant to subdivision (e)(3) of this article with any remainder that is not available carried over without interest to be applied in the earliest subsequent years when reductions in excess of $40.5 million are available. 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 {5} Annual charges to a contractor shall only be reduced prospectively from and after the date it executes the Monterey Amendment to this contract. Apportionments of reductions shall be calculated on the assumption that all contractors have executed such amendment. (e) Review of Financial Requirements (1) In 2001 and every fifth year thereafter the Director of the Department of Water Resources, in full consultation with the contractors, will review the financial requirements of the State Water.Resources Development System and determine the following: {i} The amount of revenues that are needed for State Water Resources Development System purposes in addition to those needed for the purposes specified in subdivisions (c)(2)(i), (ii}, {iii}, and (iv) of this article; (ii} If the aggregate amount that would have been charged to all contractors in any year but for this article exceeds the sum of (A} the amount of revenues needed for the purposes specified in subdivisions (c)(2){i), (ii), {iii} and (iv}, plus (B) $40.5 million, plus (C} the amount determined pursuant to subdivision (c)(2){v) of this article, the amount of such excess. {iii) The amount of the excess determined in subdivision (e)(1){ii) above that should be collected by the State for additional State Water Resources Development System purposes and the amount of such excess that should be used for further annual charge reductions. (2) After making the determinations required above, the State may collect the revenues for additional State Water Resources 24 1 2 3 4 5 6 7 81 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Development System purposes in the amount determined pursuant to subdivision (e) (1) (iii) above. (3} If and to the extent that as a result of such determinations, the aggregate amount to be charged to contractors is to be reduced by more than $40.5 million per year, the following priorities and limitations shall apply with respect to the application of such additional reductions: (i) First, reductions shall be allocated to make up shortfalls in reductions from those projected for the years 1997 through 2000 with interest at the project interest rate pursuant to subdivision {d)(3)(i). (ii} Second, reductions shall be allocated to make up shortfalls in reductions from those projected for the years beginning with 2001 without interest pursuant to subdivision (iii) Third, additional reductions in the amount of $2 million per year shall be apportioned among the Urban Contractors until a total of $19.3 million in such additional reductions have been so applied. {iv} Fourth, reductions up to an additional $2 million per year shall be allocated to make up any shortfalls in the annual reductions provided for in subdivision (e}{3)(iii). (v} Fifth, $2 million per year shall be charged and collected by the State and deposited in the General Operating Account to bring the account ultimately up to an amount determined by the State but not in excess of $32 million with adjustments as provided in subdivision (a) of this article. Any amount in the 25 1 2 3 4 5 6 7 9 10 11 l2 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 account in excess of this requirement shall be returned to general project revenues. (vi) Sixth, remaining amounts if any shall be used for reductions divided on a 24.7% - 75.30 basis between the Agricultural Contractors and the Urban Contractors respectively. (f) Apportionment of Reductions among Urban Contractors. Reductions in annual charges apportioned to Urban Contractors under subdivisions (d) and (e) of this article shall be further allocated among Urban Contractors pursuant to this subdivision. The amount of reduction of annual charges for each Urban Contractor shall be based on each Urban Contractor's proportionate share of total allocated capital costs as calculated below, for both project conservation and project transportation facilities, repaid by all Urban Contractors over the project repayment period. (1) The conservation capital cost component of the reduction allocation shall be apportioned on the basis of maximum annual entitlement. Each Urban Contractor's proportionate share shall be the same as the percentage of that contractor's maximum annual entitlement to the total of all Urban Contractors' maximum annual entitlements. (2) The transportation capital cost component of the I, reduction allocation shall be apportioned on the basis of transportation capital cost component repayment obligations, including interest over the project repayment period. Each Urban Contractor's proportionate share shall be the same as the percentage that the contractor's total transportation capital cost component repayment obligation is of the total of all Urban Contractors' transportation capital cost component repayment obligations. 26 1 2 3 4 5 6 7 8 9~ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 i 24 25 26 27 28 (i) Recalculations shall be made annually through the year 1999. Beginning in the year 2000 recalculations shall be made every five years unless an Urban Contractor requests a recalculation ~ for an interim year and does so by a request in writing delivered ~I to the Department by January 1 of the year in which the I recalculation is to take place. (ii} The transportation capital cost component repayment obligations, for purposes of this Article 51{f}, shall be based in the year of recalculation on the then most recent Department of Water Resources Bulletin 132, Table B-15, "Capital Cost Component of Transportation Charge for Each Contractor," or its equivalent, excluding any costs or entitlement associated with transfers of entitlement from Agricultural Contractors pursuant to Article 53. {3) To reflect the relative proportion of the conservation capital cost component and the transportation capital cost component to the total of all capital cast repayment obligations, the two cost components shall be weighted as follows: {i) The conservation capital cost component shall be weighted with a thirty percent {300) factor. The weighting shall be accomplished by multiplying each Urban Contractor's percentage of maximum annual entitlements as calculated in subdivision (f}(1) '~ of this article by thirty percent (300). (ii} The transportation capital cost component shall be weighted with a seventy percent {700) factor. The weighting shall be accomplished by multiplying each Urban Contractor's percentage of transportation capital cost component repayment obligations as 2? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 calculated in subdivision (f}(2) of this article by seventy percent (70%} . (iii) A total, weighted capital cost percentage shall be calculated for each Urban Contractor by adding the weighted conservation capital cost component percentage to their weighted transportation capital cost component percentage. (4) The total amount of the annual charges to be reduced to Urban Contractors in each year shall be allocated among them by multiplying the total amount of annual charges to be reduced to the Urban Contractors by the total, weighted capital cost percentages for each such contractor. If the amount of the reduction to an Urban Contractor is in excess of that contractor's payment obligation to the Department for that year, such excess shall be reallocated among the other Urban Contractors. (5} In the case of a permanent transfer of urban entitlement, the proportionate share of annual charge reductions associated with that entitlement shall be transferred with the entitlement to the buying contractor. In the case of an entitlement transfer by either Santa Barbara County Flood Control and Water Conservation District or San Luis Obispo County Flood Control and Water Conservation District, the reductions in annual charges to that agency shall be allocated (a) on the basis of that entitlement being retained by that agency which bears Coastal Branch Phase II transportation costs, (b) on the basis of that entitlement being retained by that agency which does not bear Coastal Branch Phase II transportation costs, and (c) on the basis of the balance of that agency's entitlement which also does not bear Coastal Branch Phase II transportation costs. 28 Z 2 3 a 5 6 7 8 9 10 11 l2 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (g} Apportionment of Reductions Among Agricultural Contractors (1) Reductions in annual charges apportioned to Agricultural Contractors under subdivisions (d) and (e} of this article shall be allocated among the Agricultural Contractors pursuant to this subdivision. The amount of reduction of annual charges for each Agricultural Contractor for the years 1997 through 2001 shall be based on each Agricultural Contractor's estimated proportionate share of the total project costs, excluding the variable operation, maintenance, power and replacement components of the Delta Water. Charge and the Transportation Charge and also excluding off-aqueduct power charges, to be paid by all Agricultural Contractors for the years 1997 through 2035, calculated without taking into account this article. For purposes of these. calculations, Kern County Water Agency's and Dudley Ridae Water District's estimated project costs shall not include any costs associated with the x5,000 acre-feet of annual entitlement being relinquished by those contractors pursuant to subdivision (i} of Article 53. Also, for purposes of these calculations, an Agricultural Contractor's estimated project costs shall not be reduced by the transfer of any of the 130,000 acre-feet of annual entitlements provided for in subdivisions (a} through (i} of Article 53. The proportionate shares for 1997 through 2001 shall be calculated as follows: (i} Each Agricultural Contractor's statement of charges received on July 1, 1994, shall be the initial basis for calculating the proportionate shares for the five years 1997 through 2001. (ii) Each Agricultural Contractor's estimated capital and minimum components of the Delta Water Charge. and the 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 ', 16 17 18 19 20 21 22 23 24 25 26 27 2$ Transportation Charge (excluding off-aqueduct power charges) and Water Revenue Band Surcharge shall be totaled for the years 1997 through 2035. (iii) Kern County Water Agency and Dudley Ridge Water District totaled costs shall be reduced for the 45,000 acre-feet of annual entitlement being relinquished by them. (iv) Any reductions in an Agricultural Contractor's totaled costs resulting from the transfer of any of the 130,000 acre-feet of annual entitlement shall be re-added to that contractor's costs. (v} Each Agricultural Contractor's proportionate share shall be computed by dividing that contractor's total costs by the total costs for all Agricultural Contractors determined pursuant to subparagraphs (ii), (iii) and (iv) above. (2) The reductions in annual charges, for 1997 through 2001, shall be calculated using the method described in subdivision (g)(1) of this article. (3) The allocation shall be recalculated using the same method described in subdivision (g)(1) of this article every five years beginning in 2002, if any Agricultural Contractor requests such a recalculation. Any recalculation shall be based on project cost data beginning with the year that the recalculation is to become effective through 2035. (h) Agricultural Rate Management Trust Fund (1) Establishment. Through a trust agreement executed contemporaneously with this amendment, the State and the Agricultural Contractors that sign the Monterey Amendments shall 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15 17 18 19 20 21 22 23 24 25 26 27 28 establish the Agricultural Rate Management Trust Fund with a mutually agreed independent trustee. (2} Separate Accounts. The trustee shall maintain within the trust fund a separate account for each Agricultural Contractor that ' signs the trust agreement to hold deposits made pursuant to this 'i article. I (3) Deposits. Each Agricultural Contractor that signs the ', trust agreement shall deposit into such contractor's account within the trust fund, at the same time as payments would otherwise be required by this contract to be made to the State, an amount equal to the amount by which such contractor's charges under this contract ~I have been reduced by reason of this article, until the balance in such contractor's account within the trust fund is the same ~, percentage of $150,000,000 as such contractor's percentage share of reductions made available to all Agricultural Contractors as specified in subdivision (g} of this article. In 2002 and every fifth year thereafter, the Agricultural Contractors will review the maximum accumulation in the trust fund (the "Cap") and determine whether the cap should be adjusted. However, the Cap shall not be reduced below an aggregate of $150,000,000 for all Agricultural Contractor accounts. (4) Trust Fund Disbursements. (i} In any year in which the State's allocation of water ' to an Agricultural Contractor by April 15th of that year is less than one-hundred percent (1000) of the contractor's requested annual entitlement for that year, the trustee shall, to the extent there are funds in that contractor's account, distribute to the State from such account for the benefit of that contractor an amount equal to 31 1 2 '~ 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the percentage of the total of that contractor's statement of charges for that year, as redetermined by the State on or about May 15th of that year, for (a) the Delta Water Charge; (b) the capital cost and minimum operation, maintenance,. power and replacement components of the Transportation Charge (including off-aqueduct power charges); and {c) the water system revenue bond surcharge, that is equal to the percentage of that contractor's annual entitlement far that year that was not allocated to it by the State by April 15th of that year. {ii) In addition to the provisions of subdivision {h) (4} {i} of this article, if on April 15 of any year any of the irrigable land within the Tulare Lake Basin Water Storage District (Tulare} is flooded, and Tulare in writing requests the trustee to do so, the trustee shall, to the extent there are funds in Tulare's account, distribute to the State from such account for the benefit of Tulare an amount equal to the percentage of the total of Tulare's statement of charges for that year, as redetermined by the State on or about May 15th of that year, for (a) the Delta Water Charge; {b} the capital cost and minimum components of the Transportation Charge (including off-aqueduct power charges); and (c} the water system revenue bond surcharge, that is equal to the percentage of the irrigable land within Tulare that is flooded on April 15. (iii) Each Agricultural Contractor shall remain obligated to make payments to the State as required by other articles in this contract. Any amount to be disbursed pursuant to subdivisions (h} (4} (i) and (h) (4} (ii) shall be paid by the trustee to the State on July 1 of the year involved and shall be credited by the State toward any amounts owed by such respective Agricultural 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Contractor to the State as of that date. However, an Agricultural Contractor may direct the trustee to make the disbursement to that Agricultural Contractor which shall in turn make the payment to the State as required by other provisions of this contract. It the amount to be disbursed exceeds the amount owed to the State by such contractor as of July 1, the excess shall be disbursed by the Trustee to the State at the time of and in payment of future obligations owed to the State by such contractor. Alternatively, upon the request of such contractor, all or part of the excess shall be paid by the trustee to that contractor in reimbursement of prior payments by the contractor to the State for that year. {5) Payment of Supplemental Bills. In any year in which a supplemental bill has been submitted to an Agricultural Contractor pursuant to subdivision (c)(4) of this article, such supplemental bill shall be treated as reducing by an equal amount the obligation of such contractor for that year to make payments into the Agricultural Rate Management Trust Fund. To the extent that such contractor has already made payments to the trust fund in an amount in excess of such contractor's reduced trust fund payment obligation, such contractor may request the trustee to use the excess from the trust fund to pay the supplemental bill. (6) Discharge of Payment Obligation. Each payment to the State by the trust fund shall discharge and satisfy the Agricultural Contractor's obligation to pay the amount of such payment to the State. No reimbursement of the trust fund by the Agricultural Contractor for such payments shall be required. However, each Agricultural Contractor shall continue to make deposits to the trust fund matching the amount of each year's reductions as provided in 33 1 2 3 4 5 6 7 8 9 la 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 subdivision (d) of this article so long as the amount in that contractor's account is less than its share of the Cap. (7) Distribution of Funds in Excess of the Cap. Whenever accumulated funds {including interest) in an Agricultural Contractor's account in the trust fund exceed that contractor's share of the Cap, or the estimated remaining payments the contractor is required to make to the State prior to the end of the project repayment period, that contractor may direct the trustee to pay such excess to the contractor. (8} Termination of Trust Fund. At the end of the project repayment period, the Agricultural Rate Management Trust Fund shall be terminated and any balances remaining in the accounts far each of the Agricultural Contractors shall be disbursed to the respective Agricultural Contractors. (i} Definitions. For the purposes of this article, the following definitions will apply: (1} "Agricultural Contractor" shall mean the following ', agencies as they now exist ar in any reorganized form: {i} County of Kings, (ii) Dudley Ridge Water District, (iii} Empire West Side Irrigation District, (iv) Kern County Water Agency for 993,300 acre-feet of its entitlement, {v) Oak Flat Water District, (vi} Tulare Lake Basin Water Storage District. (2) "Urban Contractor" shall mean every other agency having a long term water supply contract with the State as they exist as of the date of this amendment or in any reorganized form as well as 34 1 2 3 4 5 6 7, 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ~) Kern County Water Agency for 119,600 acre-feet of its entitlement. (j) Except as provided in subdivisions (c)(4} and (c)(5}, this article shall not be interpreted to result in any greater State authority to charge the contractors than exists under provisions of this contract other than this article. 23. Article 52 is added t4 =ead: 52. BERN WATER BANK (a) The State shall convey to the Kern County Water Agency (KCWA) in accordance with the terms set forth in the agreement between the State of California Department of Water Resources and Kern County Water Agency entitled "Agreement for the Exchange of the Kern Fan Element of the Kern Water Bank" (the Kern Water Bank Contract), the real and personal property described therein. (b) Subject to the approval of KCWA, other contractors may be provided access to and use of the property conveyed to KCWA by the Kern Water Bank Contract for water storage and recovery. Fifty percent (50$) of any project water remaining in storage on December 31, 1995, from the 1990 Berrenda Mesa Demonstration Program and the La Hacienda Water Purchase Program shall be transferred to KCWA pursuant to the Kern Water Bank Contract. The remaining fifty percent (50$) of any such water (approximately 42,828.5 acre-feet) shall remain as project water and the State's recovery of such project water shall be pursuant to the provisions of a separate recovery contract. Any other Kern Water Bank demonstration program water shall remain as project water and the State's recovery of such water shall be pursuant to the provisions of the respective contracts for implementation of such demonstration programs. 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24. Article 53 is added to read: 53. PERDSANENT TRANSFERS AND REDUCTIONS OF ENTITLEMENT {a) Article 41 provides that no assignment or transfer of a contract or any part thereof, rights .thereunder or interest therein by a contractor shall be valid unless and until it is approved by the State and made subject to such reasonable terms and conditions as the State may impose. In accordance with State policy to assist water transfers, the State and the County of Kings, Dudley Ridge Water District (DRWD}, Empire West Side Irrigation District, Kern County Water Agency (KCWA), Oak Flat Water District and Tulare Lake Basin Water Storage District (for the purposes of this article the "Agricultural Contractors") shall, subject to the conditions set forth in this article, expeditiously execute any necessary documents and approve all contracts between willing buyers and willing sellers until permanent transfers totaling 130,000 acre-feet of annual entitlements of the Agricultural Contractors and, to the extent provided in such contracts, rights in project transportation facilities related to such annual entitlement have been made to other contractors (the "Urban Contractors"} or noncontractors in accordance with the provisions of this article. Such approval requirement shall apply to all contracts executed prior to January 1, 2011. KCWA shall be responsible for approval of such transfers for any portion of the 130,000 acre-feet not previously made available under this article by the other Agricultural Contractors. A contract between a willing buyer and a willing seller shall mean a contract between {1} a buyer which is an Urban Contractor or, to the extent provided in subdivision (e) of this article, a noncontractor and (2) a seller which is an Agricultural Contractor 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 l8 19 20 21 22 23 24 25 26 27 28 or a public entity which obtains project water from an Agricultural Contractor. (b} The State shall not be obligated to approve any transfer of annual entitlements if in its judgment the transfer would impair the security of the State's bondholders and the State may impose conditions on any transfer. as necessary to make the delivery of the water operationally feasible and to assure that the transportation costs associated with the transferred entitlement are fully repaid. Transfers not approved by the State shall not be considered as part I of the 130,000 acre-feet of annual entitlements provided for in this ~I article. {c} KCWA member units shall have 90 days to exercise a right of first refusal to purchase any annual entitlements being offered for sale to Urban Contractors by another KCWA member unit pursuant to this article, other than those annual entitlements made available to Urban Contractors by subdivision (d) of this article, by agreeing to pay the same price offered by the buyer. Any such sales to KCWA member units exercising such right of first refusal shall not be considered a part of the 130,000 acre-feet of annual entitlements '~, provided for in this article. {d) Any permanent transfers of annual entitlements by I Agricultural Contractors to noncontractors, including transfers to KCWA urban member units or to KCWA's Improvement District Number 4, other than transfers pursuant to subdivision (c) of this article, will be considered a part of the 130,000 acre-feet of annual entitlements provided for in this article if the Urban Cantractors have been given a right of first refusal to purchase such annual 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 entitlements as well as transportation rights in accordance with the following terms and procedure: (1) The Agricultural Contractor shall provide the State a copy of a bona fide contract or Proposed Contract (the "Proposed Contract") and the State shall, within five working days of receipt, provide copies of such Proposed Contract to all Urban Contractors together with a Notice of Proposed Contract stating the date on or before which a Notice of Intent to Exercise a Right of First Refusal {NOI) must be delivered to both the State and the seller, which date shall be 90 days from the date the State mails the Notice of Proposed Contract. (2) The Proposed Contract shall provide for the transfer of rights in project transportation facilities sufficient to deliver to the seller's service area in any one month eleven percent (llo) of the annual entitlement being transferred or such greater amount as the seller determines to sell; Provided, however, that sellers shall not be obligated to sell any transportation rights in the Coastal Aqueduct. (3) To exercise the right of first refusal, an Urban '~ Contractor shall deliver to the State and the seller its NOI within the time period stated in the Notice of Proposed Contract and shall proceed in good faith to try to complete the transfer to the Urban Contractor. If two or more Urban Contractors deliver NOI's to the State, the amount of annual entitlement and transportation rights being sold shall be allocated among those Urban Contractors that are prepared to perform the purchase by the Performance Date provided for herein in proportion to their maximum annual entitlements, or in another manner acceptable to the Urban Contractors delivering the 38 1 2~ 3 4 5' 6 7 8 9 la 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOIs. An offer by an Urban Contractor in its NOI to purchase less than the entire annual entitlement and transportation right being transferred shall not be deemed to be an effective exercise of the right of first refusal unless other Urban Contractors submit NOIs to purchase the remainder of the annual entitlement and transportation right or the noncontractor buyer agrees to purchase the remainder at the same unit price and on the same terms and conditions provided for in the Proposed Contract. The Performance Date shall be the date upon which the Urban Contractor is prepared to perform the purchase, which date shall be the later of: (1} 180 days after the delivery of the NOI or (2} the date set forth in the Proposed Contract for the noncontractor buyer to perform the purchase. The Performance Date shall be extended at the request of the Urban Contractor if a temporary restraining order or preliminary injunction is in effect as a result of a lawsuit challenging the execution of the contract on the basis of noncompliance with the California Environmental Quality Act. Such extensions shall continue until five days after the temporary restraining order or injunction expires or until the Urban Contractor requests it be discontinued, whichever occurs first. The Urban Contractor shall be liable for any damages suffered by the seller as a result of such extensions of the Performance Date. (4} If the seller and the noncontractor buyer under the Proposed Contract make any substantive changes in the Proposed Contract, such changes shall constitute a new Proposed Contract that cannot be performed without compliance with all of the procedures set forth in this article. 39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 '~, 16 I~ 17 18 19 ~ 20 21 22 23 24 25 26 27 28 (5) If an Urban Contractor issuing a NOI fails to complete its exercise of the Right of First Refusal by the Performance Date, the seller shall be free to sell its entitlement in substantial conformance with the terms and conditions set forth in the Proposed Contract An Urban Contractor issuing a NOI may assign its rights to exercise a right of first refusal to another Urban Contractor and the assignee shall have the same rights as the assignor to complete the purchase by the Performance Date. (6} In exercising the Right of First Refusal, an Urban Contractor, at its option, may either agree to perform the Proposed Cantract in its entirety, including all of its terms and conditions, ar agree to pay the price offered under the Proposed Contract for the annual entitlement and transportation rights without condition and without being entitled to enforce or being subject to any other provisions of the Proposed Contract. te) As used in this article; "price" shall mean the dollar amount of consideration provided for in the Proposed Contract. (f) Upon the effective date of any such transfer, the seller shall be relieved of and the buyer shall become liable to the State for all prospective Delta Water Charges, the related Transportation Charges and any other charges for the annual entitlements and associated transportation rights transferred unless the seller and buyer provide otherwise in the contract far the transfer and the State approves such other provisions. However, the contractor making the sale shall remain obligated to the State to make the payments if the buyer defaults on its payments to the State related to the water transferred and is not a party to a long term water supply contract of the type contained in Department of Water 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Resources Bulletin Number 141. If the contractor making the sale is required to make any payments to the State as a result of the buyer's default, the entitlement transferred to the defaulting buyer shall, if provided for in the Proposed Contract, revert back to the contractor making the sale. The buyer may also be liable for any charges imposed pursuant to subdivision (g) of this article. {g) A contractor which is a buyer of annual entitlement pursuant to this article may receive deliveries using any portion of the capacity previously provided by the State in each reach of the project transportation facilities for such cantractor that is necessary for transporting the entitlement purchased by it on the same basis as any other entitlement provided far in its Table A in effect prior to the date of the Monterey Amendment. Such contractor may also use any transportation rights transferred to it by a seller in the same manner as the seller was entitled to use them and any unused capacity in any of the reaches specified in this paragraph so long as project operations andJor priority of service of water to other contractors participating in repayment of capital costs in such reaches is not adversely affected. The State shall not be responsible for any resulting adverse impacts upon its ability to provide such contractor peaking capacity. The capital cost and minimum, operation, maintenance, power and replacement components of the Transportation Charge allocated to a buying contractor needing transportation capacity in excess of the capacity factors on which its charges are based in any reach shall be determined prospectively based upon the increase in the buying contractor's annual entitlement resulting from the purchase, and service of water to fulfill annual entitlement to other contractors shall not be 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2S 26 27 28 impaired. The capital cost and minimum operation, maintenance, power and replacement components of the Transportation Charges shall then be reallocated among the other entities participating in repayment of costs of that reach. For the purposes of this determination, all payments received by the State from the seller relating to the annual entitlement sold shall be deemed to have been received from the buying contractor. Any increased Transportation minimum operation, maintenance, power and replacement component charges allocated to the buying contractor pursuant to this I subdivision {g) shall begin January 1 of the year following the effective date of the transfer. {h} Individual contractors may transfer entitlements among themselves in amounts in addition to those otherwise provided for in this article. The State shall expeditiously execute any necessary documents and approve all contracts involving permanent sales of entitlements among contractors, including permanent sales among Urban Contractors. Such sales shall be subject to the provisions of subdivisions {b}, (f) and (g) of this article; Provided, however, that for a buying contractor needing transportation capacity in excess of the capacity factors on which its charges are based in any reach, reallocation of the Transportation capital cost component charges for transfers other than (i) the 130,000 acre-feet provided for in this article and (ii) the approximate 33,000 acre-feet of transfers proposed from contractors located in Santa Barbara or San Luis Obispo counties, shall be determined both prospectively and retroactively. {i} On January 1 following the year in which such Monterey Amendments take effect and continuing every year thereafter until 42 1 2' 3 4 5 6 7 8 9 la 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 I 28 I the end of the project repayment period: (i) Kern County Water Agency's (KCWA} annual entitlement for agricultural use as currently ~, designated in Table A-1 of its contract shall be decreased by 40, 670 acre-feet; (ii} Dudley Ridge Water District's (DRWD) annual entitlement as currently designated in Table A of its contract shall be decreased by 4,330 acre-feet; and (iii} the State's prospective charges (including any adjustments for past costs} for the 45,000 acre-feet of annual entitlements to be relinquished by KCWA and DRWD thereafter shall be deemed to be costs of project conservation facilities and included in the Delta Water Charge far all contractors in accordance with the provisions of Article 22. If by November 20, 1995 and each October 1 thereafter until the Monterey Amendments of both KCWA and DRWD take effect, KCWA and DRWD at their option notify the State in writing that they will relinquish up to their shares of 45,000 acre-feet of annual entitlements for the following calendar year beginning before the Monterey Amendments III take effect, the State, when and if the Monterey Amendments take effect, shall adjust the charges retroactively for the acre-feet relinquished by KCWA and DRWD to January 1 of each year for which water was relinquished. The delivery points for the 45,000 acre-feet of annual entitlement to be relinquished shall be identified for the State by KCWA and DRWD to enable the State to calculate the transportation costs for the 45,000 acre-feet to be included in the Delta Water Charge. 43 1 2 3 4 5 6~i 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2l 22 23 24 25 26 27 28 25. Article 54 is added to read: 54. Usage of Lakes Castaic and Perris (a} The State shall permit the contractors participating in ~I repayment of the capital costs of Castaic Lake (Reach 30} and Lake Perris (Reach 28J} to withdraw water from their respective service connections in amounts in excess of deliveries approved pursuant to other provisions of the state water contracts. Each such contractor shall be permitted to withdraw up to a Maximum Allocation from the reach in which it is participating. The contractors participating in repayment of Castaic Lake may withdraw a collective Maximum Allocation up to 160,000 acre-feet pursuant to this article, which shall be apportioned among them pursuant to the respective proportionate use factors from the Department of Water Resources' Bulletin 132-94, Table B-1 upon which capital cost repayment I obligations are based, as follows: Castaic Lake Participating Proportionate Use Maximum Contractor Factor Allocation (Acre Feet) The 0.96212388 153,940 Metropolitan Water District of Southern California Ventura County 0.00860328 1,376 Flood Control and Water Conservation District Castaic Lake 0.02927284 4,684 Water Agency Total 1.00000000 160,000 44 1 2 3 4 5 6 '' 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Metropolitan Water District of Southern California, as the only contractor participating in repayment of Lake Perris, shall be allocated a Maximum Allocation at Lake Perris of 65,000 acre-feet based upon a proportionate use factor of 1.00000000. The Maximum Allocation totals of 160,000 acre-feet and 65,000 acre-feet shall not be subject to adjustment. The individual contractor's Maximum Allocations shall be adjusted only as agreed to among the contractors desiring to adjust their Maximum Allocations. Adjustments between the contractors shall be subject to approval of the State which approval shall be given unless there are adverse impacts upon another contractor participating in the reach which are unacceptable to such contractor. The participating contractors will, in consultation with the State, cooperate with each other in an effort to promote efficient utilization of Castaic Lake, and to minimize any adverse impacts to each other, through coordination of deliveries pursuant to other provisions of the State Water Contract as well as withdrawals of allocations pursuant to this article. (b) The State shall operate Castaic and Perris Reservoirs as transportation facilities in a manner consistent with this article. A contractor desiring to withdraw a portion or all of its Maximum Allocation shall furnish the State with a proposed delivery schedule. The proposed schedule may be submitted as part of the preliminary water delivery schedule submitted pursuant to Article 12(a)(1}. Upon receipt of a schedule the State shall promptly review it to ensure that the amounts, times and rates of delivery will be consistent with the State's ability to operate the reach. The contractor may modify its proposed 45 1 2 3 4 5 b 7 8 9 10 11 . 12 l3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 delivery schedule at any time, and the modified schedule shall be subject to review in the same manner. If necessary, the State may modify the schedule after consultation with the contractor and other contractors participating in repayment of that reach but may not change the total quantity of water to be withdrawn. As part of the consultation, the State shall advise a contractor if it determines a withdrawal will adversely impact the rate of delivery provided for the contractor in this contract. The State shall not be responsible for any such impacts. (c) A contractor may withdraw all or a portion of its Maximum Allocation. It shall restore any withdrawn portion of such allocation by furnishing an equivalent amount of replacement water to the reservoir from which the water was withdrawn within five years from the year in which the withdrawal takes place. The unused portion of the allocation, in addition to any replacement water furnished to the reservoir, shall remain available for subsequent withdrawal. The State shall keep an accounting of the contractor`s storage withdrawals and replacements. In any year, the State shall permit a contractor to withdraw an amount equivalent to the contractor's Maximum Allocation minus remaining replacement water requirements due to previous withdrawals. If the contractor fails to schedule and replace the withdrawn water within the five-year return period, the State shall provide the replacement water from water scheduled for delivery to the contractor in the sixth year or as soon as possible thereafter. The total amount of scheduled annual entitlement which a contractor can use in any one year far restoring its Maximum Allocation and storing water in surface storage facilities 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 outside of its service area pursuant to Article 56 shall be the sum of the maximum amount the contractor can add to storage that year pursuant to Article 56 and the amount of acre-feet shown in column 2 of the following table, depending on the State's final water supply allocation percentage as shown in column 1. 1. Final Water Supply Allocation Percentage 2. Maximum Acre-Feet of Scheduled Entitlement for Restoring Maximum Allocation* 500 or less 100,000 51% 98,000 520 96,000 53 0 94, 000 54% 92,000 550 90,000 560 88,000 570 86,000 580 84,000 590 82,000 600 80,000 610 78,000 620 76,000 630 74,000 640 72,000 650 70,000 660 68,000 670 66,000 680 64,000 690 62,000 700 60,000 710 58,000 720 56,000 73 0 54, 000 740 52,000 75 to 990 50,000 100% no limit * Excludes the maximum amount that can be added to storage in a year pursuant to Article 56, which may be used in addition to the amounts in this table to restore Maximum Allocation. 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A contractor may use any of this total amount for replacement water but cannot use any more than that provided far in Article 56 to add to storage in project surface conservation facilities and in nonproject surface storage facilities. There shall be no limit under this article on the amount of scheduled annual entitlement a contractor can use to restore its Maximum Allocation in a year when its percentage of annual water supply allocation is one-hundred percent (1000), nor shall there be any limit under this article on the amount of interruptible water, nonproject water or water obtained through an exchange which a contractor can use to restore its Maximum Allocation. (d} For any replacement water furnished to reservoir storage pursuant to this article, the responsible contractor ~~ shall pay the State charges for the conservation, if any, and transportation of such replacement water as are associated with the type of replacement water that is furnished, as if such water were delivered to the turnout at the reservoir to which the replacement water is furnished. Adjustments from estimated to '~ actual costs shall be subject to provisions applicable to the type of replacement water. The State shall not charge contractors for water withdrawn pursuant to this article. (e) The State shall operate capacity in Castaic and Perris Reservoirs, not required for purposes of Maximum Allocation deliveries, in compliance with the requirement of Article 17(b) of The Metropolitan Water District of Southern California's water supply contract with the State to maintain an amount of water reasonably sufficient to meet emergency requirements of the contractors participating in repayment of that reach. A 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contractor receiving water pursuant to this article accepts that the State shall not be liable for any damage, direct or indirect, arising from shortages in the amount of water to be made available from that reservoir to meet the contractor's actual emergency requirements as a result of prior storage withdrawals by that contractor pursuant to this article. Nothing in this article shall permit or require the State to adjust allocations or deliveries under Article 18. {f) To the extent a contractor, during a calendar year, uses all or a portion of its Maximum Allocation, the State may, to the extent necessary to service project purposes, reduce that contractor's requested peaking service. Such reduction in peaking service shall only occur to the extent such usage of Maximum Allocation causes the State to be unable to provide all peaking service requested. This paragraph shall not apply to the extent the contractor requested usage of Maximum Allocation as part of the preliminary water delivery schedule submitted pursuant to Article 12 (a){1). (g) The State may reduce water stored in Castaic Lake and Lake Perris to the extent necessary for maintenance and to respond to emergencies resulting from failure of project transportation facilities or of other supply impartation facilities serving the State project service area. The State shall promptly replace water within the Maximum Allocation as soon as the need for the reduction terminates. 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19- 20 21 22 23 24 25 26 27 28 26. Article 55 is added to read: 55. Transportation of Nonproject Water (a) Subject to the delivery priorities in Article 12(f}, contractors shall have the right to receive services from any of the project transportation facilities to transport water procured by them from nonpraject sources for delivery to their service areas and to interim storage outside their service areas for later transport and delivery to their service areas: Provided, that except to the extent such limitation in Section 12931 of the Water Code be changed, a contractor shall not use the project transportation facilities under this option to transport water the right to which was secured by the contractor through eminent domain unless such use be approved by the Legislature by concurrent resolution with the majority of the members elected to each house voting in favor thereof. (b) For any nonpraject water delivered pursuant to this article, contractors shall pay the State the same (including adjustments) for power resources (including on-aqueduct, aff-aqueduct, and any other power) incurred in the conservation and transportation of such water as if such nonpraject water were entitlement water, as well as all incremental operation, maintenance, and replacement costs, and any other incremental costs, which may include an administrative or contract preparation charge, all as determined by the State. Incremental costs shall mean those nonpower costs which would not be incurred if nonproject water were not scheduled for or delivered to contractors. Only those contractors not participating in the repayment of a reach shall be required to pay a use of facilities 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ' 27 28 charge far the delivery of nonproject water from or through that reach. Casts for transporting water placed into interim storage shall be paid in the same manner provided for in subdivision (c)(6) of Article 56. (c) The amounts, times and rates of delivery of nonproject water shall be provided for pursuant to a water delivery schedule to be issued in the same manner as provided far in Article 12. The costs specified in this article shall be paid for at the same time the corresponding project water costs are paid. 27. Article 56 is added to read: 56. Use, Storage and Sale of Project Water Outside of Service Area and Storage of Water in Project Surface Conservation Facilities (a} State Consent to Use of Project Water Outside of Service Area Notwithstanding the provisions of Article 15(a), the State hereby consents to the Agency storing project water outside its service area for later use within its service area in accordance with the provisions of subdivision (c) of this article and to the Agency selling project water for use outside its service area in accordance with the provisions of subdivision (d) of this article. {b) Groundwater Storage Programs The Agency shall cooperate with other contractors in the development and establishment of groundwater storage programs. {c) Storage of Project Water Outside of Service Area ~', (1} A contractor may elect to store project water outside its service area for later use within its service area, up to the 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1? 18 19 20 21 22 23 24 25 2 6 ', 27 28 limits and in accordance with the provisions provided for in this subdivision (c) and any applicable water right laws, by setting forth on the preliminary water delivery schedule submitted to the State on or before October 1 of each year pursuant to Article 12(a) the quantity of project water it wishes to store in the next succeeding year. There shall be no limit on the amount of project water a contractor can store outside its service area during any year in a then existing and operational groundwater storage program. The amount of project water a contractor can add to storage in project surface conservation facilities and in nonproject surface storage facilities located outside the contractor's service area each year shall be limited to the lesser of the percent of the contractor's Table A annual entitlement shown in column 2 ar the acre-feet shown in column 3 of the fallowing table, depending on the State's final water supply allocation percentage as spawn in column 1. However, there shall be no limit to storage in nonproject facilities in a year in which the State's final water supply allocation percentage is one hundred percent. These limits shall not apply to water stored pursuant to Article 12(e). 52 1 2 I 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. Final Water Supply Allocation Percentage 2. Maximum Percent of Agency's Annual Entitlement That Can be Stored 3. Maximum Acre-Feet That Can be Stored 500 or less 250 100,000 510 26% 104,000 sea 270 108,000 53 0 28% 112, 000 540 290 116,000 55a 30% 120,000 56% 310 124,000 57% 320 128,000 580 330 132,000 590 340 136,000 600 350 140,000 610 36a 144,000 620 370 148,000 630 380 152,000 64% 390 156,000 650 400 160,000 660 410 164,000 670 420 168,000 680 43% 172,000 69% 44% 176,000 70% 450 180,000 710 460 184,000 720 470 188,000 730 480 192,000 740 49% 196,000 750 or more 500 200,000 53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 i 17 18 19 20 21 22 23 24 25 26 27 28 (2) Storage capacity in project surface conservation facilities at any time in excess of that needed for project operations shall be made available to requesting contractors for storage of project and nonproject water. If such storage requests exceed the available storage capacity, the available capacity shall be allocated among contractors requesting storage in proportion to their annual entitlements designated in their Table A's for that year. A contractor may store water in excess of its allocated share of capacity as long as capacity is available for such storage. (3) If the State determines that a reallocation of excess ~, storage capacity is needed as a result of project operations or because of the exercise of a contractor's storage right, the available capacity shall be reallocated among contractors requesting storage in proportion to their annual entitlements designated in their Table A's for that year. If such reallocation results in the need to displace water from the storage balance for any contractor or noncontractor, the water to be displaced shall be displaced in the following order of priority: First, water, if any, stored for noncontractors. Second, water stored for a contractor that previously was in excess of that contractor's allocation of storage capacity. Third, water stored far a contractor that previously was within that contractor's allocated storage capacity. The State shall give as much notice as feasible of a potential displacement. 54 1 2 3 ~I I 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 {4) Any contractor electing to store project water outside its service area pursuant to this subdivision may not sell project water under the provisions of subdivision {d} of this article during the year in which it elected to stare project water. This limitation shall nat apply to replacement water furnished to Castaic and Perris Reservoirs pursuant to Article 54, nor to the storage of water introduced into a groundwater basin outside a contractor's service area if recovery is intended to occur within that contractor's service area. (5} The restrictions on storage of project water outside a contractor's service area provided for in this subdivision (c}, shall not apply to storage in any project offstream storage facilities constructed south of the Delta after the date of this amendment. {6} Far any project water stored outside its service area pursuant to this subdivision {c}, a contractor shall pay the State the same {including adjustments} for power resources {including an-aqueduct, off-aqueduct, and any other power} incurred in the transportation of such water as the contractor pays for the transportation of annual entitlement to the reach of the project transportation facility from which the water is delivered to storage. If annual entitlement is stored, the Delta Water Charge shall be charged only in the year of delivery to interim storage. For any stored water returned to a project transportatian facility for final delivery to its service area, the contractor shall pay the State the same far power resources (including on-aqueduct, off-aqueduct, and any other power} incurred in the transportation of such water calculated from the 55 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 point of return to the aqueduct to the turn-out in the contractor's service area. In addition, the contractor shall pay all incremental operation, maintenance, and replacement costs, and any other incremental costs, as determined by the State, which shall not include any administrative or contract preparation charge. Incremental costs shall mean those nonpower costs which would not be incurred if such water were scheduled for or delivered to the contractor's service area instead of to interim storage outside the service area. Only those contractors not participating in the repayment of a reach shall be required to pay a use of facilities charge for use of a reach for the delivery of water to, or return of water from, interim storage. (7) A contractor electing to store project water in a nonproject facility within the service area of another contractor shall execute a contract with that other contractor prior to storing such water which shall be in conformity with this article and will include at least provisions concerning the point of delivery and the time and method for transporting such water. (d} Sale of Project Water For Use Outside Service Area (1} If in any year a contractor has been allocated annual entitlement that it will not use within its service area, the contractor has not elected to store project water in accordance with the provisions of subdivision (c} of this article during ~ that year, and the contractor has not elected to carry over entitlement water from the prior year pursuant to the provisions of Article 12(e}, the contractor may sell such annual entitlement for use outside its service area in accordance with the following provisions. 56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (2} Each year the State shall establish an annual entitlement water pool {the Pool) for contractors wishing to sell or buy project water pursuant to the provisions of this subdivision. The Pool shall constitute the exclusive means of selling portions of annual entitlements not desired by contractors that year. Contractors willing to sell to or buy water from the Pool shall notify the State in writing of their desire to do so indicating the quantity to be sold or purchased. Contractors shall have the first priority to purchase all water placed in the Pool. The State may purchase any water remaining in the Pool not purchased by contractors at the same price available to contractors and use such water for the purpose of providing additional carryover storage for contractors: Provided, that the State shall consult with the contractors prior to making any such purchases. {3} Each year, the price per acre-foot to be paid by the State to contractors selling water placed in the Pool on or before February 15 that is purchased by a contractor requesting such purchase by March 1 or by the State on March 1 shall be equal to fifty percent {500} of the Delta water rate as of that date. The price per acre-foot to be paid to the State for the purchase of water from the Pool by a contractor placing a request for such purchase on or before March 1 shall be equal to fifty percent {500) of the Delta water rate as of that date. Any water placed in the Pool on or before February 15 that is not purchased by contractors or the State by March 1 may be withdrawn from the Pool by the selling contractor. 57 1 2 3 4 5 6 7 8 9 la 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2? 28 (4} Each year the price per acre-foot to be paid by the State to contractors selling water remaining in the Pool or placed in the Pool after February 15, but on or before March 15 that is purchased by a contractor requesting such purchase by April 1 or by the State on April 1 shall be equal to twenty-five percent {250) of the Delta water rate as of that date. The price per acre-foot to be paid to the State for the purchase of water from the Pool by a contractor placing a request for such purchase between March 2 and April 1 shall be equal to twenty-five percent (250) of the Delta water rate as of the later date. Any water placed in the Pool on or before March 15 that is not purchased by a contractor or the State by April 1 may be withdrawn from the Pool by the selling contractor. {5} If there are more requests from contractors to purchase water from the Pool than the amount in the Pool, the water in the Pool shall be allocated among those contractors requesting such water in proportion to their annual entitlements for that year up to the amount of their requests. If requests to purchase water from the Pool total less than the amount of water in the Pool, the sale of Pool water shall be allocated among the contractors selling such water in proportion to their respective amounts of water in the Pool. {6} Any water remaining in the Pool after April 1 that is not withdrawn by the selling contractor shall be offered by the State to contractors and noncontractors and sold to the highest bidder: Provided, that if the highest bidder is a noncontractor, all contractors shall be allowed fifteen days to exercise a right of first refusal to purchase such water at the price offered by 58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the noncontractor. The price to be paid to the selling contractor shall be the amount paid by the buyer exclusive of the amount to be paid by the buyer to the State pursuant to subdivision {d)(7} of this article. (7} For any water delivered from the Pool to contractors, the buyer shall pay the State the same for power resources (including on-aqueduct, off-aqueduct, and any other power) incurred in the transportation of such water as if such water were entitlement water, as well as all incremental operation, maintenance, and replacement costs, and any other incremental casts, as determined by the State, which shall not include any administrative or contract preparation charge. Incremental costs shall mean those nonpower costs which would not be incurred if such water were not scheduled for or delivered to the buyer. Only those buyers not participating in the repayment of a reach shall be required to pay any use of facilities charge for the delivery of such water from or through the reach. Adjustments from estimated to actual costs shall be computed by the State pursuant to these provisions and shall be paid by the buyer or credited to the buyer at the times and interest rates described in Article 28(c). (e} Continuance of Article 12 (e) Carry-over Provisions The provisions of this article are in addition to the provisions of Article 12(e), and nothing in this article shall be construed to modify or amend the provisions of Article 12(e}. Any contractor electing to sell project water during any year in accordance with the provisions of subdivision {d} of this article, shall not be precluded from using the provisions of 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Article 12 (e) for carrying over water from the last three months of that year into the first three months of the succeeding year. (f) Bona Fide Exchanges Permitted Nothing in this article shall be deemed to prevent the Agency from entering into bona fide exchanges of project water for use outside the Agency's service area with other parties for project water or nonproject water if the State consents to the use of the project water outside the Agency's service area. Also, nothing in this article shall be deemed to prevent the Agency from continuing those exchange or sale arrangements entered into prior to September 1, 1995, which had previously received any required State approvals. A "bona fide exchange" shall mean an exchange of water involving a contractor and another party where-the primary consideration far one party furnishing water to another is the return of a substantially similar amount of water, after giving due consideration to the timing or other nonfinancial conditions of the return. Reasonable payment for costs incurred in effectuating the exchange and reasonable deductions from water delivered, based on expected storage or transportation losses may be made. A "bona fide exchange" shall not include a transfer of water from one contractor to another party involving a significant payment unrelated to costs incurred in effectuating the exchange. The State, in consultation with the contractors, shall have authority to determine whether transfers of water constitute "bona fide exchanges" within the meaning of this paragraph and not disguised sales. 60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (g) Other Transfers Nothing in this article shall be deemed to modify or amend the provisions of Article 15(a), or Article 41, except as expressly provided for in subdivisions (c) and (d) of this article. 28. A11 balances of wet weather and Article 12{d) water otherwise available to any contractor executing the Monterey Amendment shall be eliminated as of the effective date of such amendment and no new balances for such water shall be I established. 29. Effective Dates and Phase-in. (a) No Monterey Amendment to any contractor's water supply contract shall take effect unless and until both of the following have occurred {1} the Monterey Amendments to both the Kern County Water Agency's and The Metropolitan Water District of Southern California's contracts have been executed and no legal challenge has been filed within sixty days of such execution or, if filed, a final judgment of a court of competent jurisdiction has been entered sustaining or validating said amendments; and (2} the State has conveyed the property which constitutes the Kern Fan Element of the Kern Water Bank to Kern County Water Agency pursuant to the Kern Water Bank Contact provided for in Article 52 either on or before October 1, 1996 or, if the conveyance on such date has been prevented by an interim court order, within ninety days after such court order has become ineffective so long II as said ninety days expires not later than January 1, 2000. The 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ~, October 1, 1996 date and the January 1, 2000 date may be extended by unanimous agreement of the State, Kern County Water Agency and The Metropolitan Water District of Southern California. (b) The State shall administer the water supply contracts of any contractors that do not execute the Monterey Amendment so ~ that such contractors are not affected adversely or to the extent feasible beneficially by the Monterey Amendments of other contractors' water supply contracts. (c) If a court of competent jurisdiction issues a final judgment or order determining that any part of a contractor's II Monterey Amendment is invalid or unenforceable, all provisions of that amendment shall be of no force or effect as to such contractor, except as provided in subdivisions {e} and (f} of this paragraph. (d} If any part of the Monterey Amendment of the Kern County Water Agency's or The Metropolitan Water District of Southern California's contracts or if the conveyance of the Kern Fan Element of the Kern Water Bank to the Kern County Water Agency provided for in Article 52 is determined by a court of competent jurisdiction in a final judgment or order to be invalid or unenforceable, the Monterey Amendments of all contractors and the Kern Water Bank Contract shall be of no force and effect except as provided in subdivisions (e) and (f} of this paragraph. (e) Notwithstanding subdivisions (c}, (d} and (f) of this paragraph, if any part of the Monterey Amendment of the Kern County Water Agency's or The Metropolitan Water District of Southern California's contract is determined by a court of competent jurisdiction in a final judgment or order to be invalid 62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 or unenforceable, and if Articles 52 and 53 {i) have been implemented {i.e., the property which constitutes the Kern Fan Element of the Kern Water Bank has been conveyed by the State and the 45,000 acre-feet of annual entitlements have been relinquished to the State}, the implementation of the relinquishment shall not be reversed unless the implementation of the conveyance is also reversed, and conversely, implementation of the conveyance shall not be reversed unless implementation of the relinquishment is also reversed. Nothing in this subdivision shall affect any party's right to seek additional damages, compensation or any other remedy available at law or in equity. (f} The total invalidity or unenforceability of one contractor's Monterey Amendment as provided for in subdivision (c) of this paragraph or of all contractor's Monterey Amendments as provided for in subdivision {d} of this paragraph or of the Kern Water Bank Contract as provided for in subdivision (d) of this paragraph may be avoided only if such invalidity or unenforceability is explicitly waived in writing signed by the State, Kern County Water Agency and The Metropolitan Water 63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 District of Southern California. In cases arising under subdivision (c? or (d), the affected contractor whose Monterey Amendment has been determined to be partially invalid or unenforceable must first request the waiver. IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first above written. Approved as to legal form STATE OF CALIFORNIA and sufficiency DEPARTMENT OF WATER RESOURCES Chief Counsel Department of Water Resources ATTEST: Director COUNTY OF BUTTE 64 Monterey Amendment White Paper September 2$, 1995 redraft September 28, 1995 redraft Monterey Amendment White Paper Table of Contents Article Title Page No. Article 1 (k) Minimum Project Yield 1 Article 1 (hh} Water System Facilities 1 Article 1 (jj} Interruptible Water 2 Article 1 (kk) Non-project Water 2 Article 4 Option far Continued Service 2 Article 7{a} Changes in Annual Entitlements 2 Article 12 Priorities, Amounts, Times and Rates of Deliveries 2 Article 12{a}{2) Delivery Schedule 3 Article 1 2(d) Delivery of Water Not Delivered in Accordance with Schedule 3 Article 12(f) Priorities 3 Article 14(a} State May Curtail Deliveries 3 Article 14{b) Agency May Receive Later Delivery of Water Not Delivered 3 Article 16{a) Limit on Total of all Maximum Annual Entitlements 3 Article 18{a} Shortages; Delivery Priorities 4 Article 18(b) (delete} 6 Article 18(d)&(e} Changes to Article 18(d) & (e? 6 September 28, 1995 redraft Article Page No. Article 21 Interruptible Water Service 6 Article 22(j) 9 Article 24(b) 9 Article 24(g) 9 Article 25(d)(3) 9 Article 50(j) 9 Article 51 Financial Adjustments 10 Article 52 Kern Water Bank 1 9 Article 53 Permanent Transfers and Reductions of Entitlement 19 Article 54 Usage of Lakes Castaic and Perris 24 Article 55 Transportation of Non-Project Water 29 Article 56 Use, Storage and Sale of Project Water Outside of Service Area ,and Storage of Water in Project Conservation Facilities 29 September 28, 1995 redraft Table of Attachments Referenced Attachment Title Pacle No. 1 Allocation of Project Supplies When Supplies Meet Requests 4 2a Allocation of Project Supplies During Shortage 5 2b Allocation of Project Supplies During Shortage 5 2c Allocation of Project Supplies During Shortage 5 3 1 995 Interruptible Water Program 7 4 State Water Project Payment Management Program 1 3 5 Hypothetical Statement of Charges for MWDSC, 2001 1 7 6a, 6b Example Apportionment of Urban Rate Reduction Credits 17 7 Hypothetical Statement of Charges for KCWA, 2001 18 8 Example Apportionment of Agricultural Rate Reduction Credits 18 g Agricultural Rate Management Trust Agreement 19 10 Annual Limitation on Metropolitan's Refill of "Flexible Storage" with Allocated Annual Entitlement 27 11 Example Record Keeping, Castaic Lake Flexible Storage 26 12 Example Calculations, Charges for Flexible Storage Program 29 12 Limitations on Annual Addition to Carryover in Surface Storage 32 14a Allocation of Available Storage Among Storing Contractors S5 Referenced Attachment Title Page No. 14b Individual Contractor Storage in Excess of Allocated Storage 36 14c Contractor Storage When Total Requests Exceed Capacity 36 15 SWP Surface Conservation Facilities Storage Priorities 36 16 Carryover Storage: SpilliReallocation of Storage 36 September 28, 1 995 redraft Monterey Amendment White Paper ? The attached contract amendment is comprehensive and covers many different 2 aspects of the water supply contract. The following discussions provide useful 3 background information and clarify how the Department will administer the various 4 components of this amendment. Certain of the terminology (e.g. proportionate use of 5 facilities factors) is technical and is used in the same manner as in the Department's 6 bulletins issued in administering the contract. Only those articles and subdivisions are 7 addressed below where additional information and clarification is needed. In case of 8 any conflict between the discussions below and the amendment, the amendment 9 controls. The article references are to Kern County Water Agency 's amendment. 70 Certain State water contracts may have the same articles referenced differently. 77 7 Artic% 1(k) Minimum Project Yield 2 Article 1 ik) reflects a reduction of 45,000 acre-feet in the minimum project yield. 3 As provided for elsewhere in the amendment, this reduction will be implemented via a 4 buyback of entitlement by the Project as a whole. It also deletes the reference to the 5 farmer agricultural deficiencies. 6 7 Article 1(hh) Water System Facilities 8 The definition of Water System Facilities under this article is being expanded to 9 include a State Water Project Corporation Yard and a Project Operation Center. Water 70 System Facilities are those facilities that are eligible for water system revenue bond 7 7 financing. If the Department decides to build the two new facilities, the Department 72 agrees to fully meet and confer with the Contractors on the proposed projects and 13 costs prior to issuing any water system revenue bonds. In 1 995 dollars, the 74 Corporation Yard is estimated to cost $35 million and the Project Operation Center $45 75 million. It is the intent that, when constructed, the scope and cost (adjusted far 76 inflation) of each of these projects will not significantly exceed the 1995 estimates. 17 Also, since the Kern Fan Element properties are being disposed of {,article 52) Water 18 System Revenue Bonds will only be available for land acquired prior to December 31, 19 1995. 20 1 September 28, 1 995 redraft 1 Article 1(jji lnterruptiGle wafer 2 The Department and the Contractors are agreeing to replacing a number of water 3 programs with an Interruptible Water Program. Details are explained below with 4 respect to changes in Article 21 . 5 6 Article 1 fkkl Nonproject water 7 This definition is added to provide clarification to changes elsewhere in the 8 amendment (new Article 55) which addresses priority for delivery of nonproject water 9 to the Contractors. 10 11 Artic% 4 Option for Gontinued Service 12 This article was amended to add reference to the new Article 55, Transportation 13 of Non-Project Water, as an additional item for consideration of continued service and 14 to delete the reference to the now stricken Article 1 8(b). 15 16 Artic% 7(a) Ghanges in Annual Entit/ements 17 The amendment to Article 7(a) provides the required state approval, subject to a 18 limited standard (impairment of financial feasibility of Project facilities) for multi-year 19 amendments of a contractor's Table A. This is intended to facilitate increases or 20 decreases in a contractor's Table A for periods longer than one year. 21 22 This is not intended to effect the right of Butte County to increase its Table A 23 under its special article 7(c). 24 25 Article 12 Tit/e Change 26 The title of Article 12 is amended to read "Priorities, Amounts, Times and Rates 27 of Deliveries" to reflect changes in Article 12 discussed below. 28 29 2 September 28, 1995 redraft 1 Artic% 12(a)(2) Delivery Schedule 2 Changes to this subdivision clarify that the quantity to be delivered is the 3 quantity allocated pursuant to Article 18. 4 5 Artic% 12(d) Delivery of Water Not Delivered in Accordance with Schedu/e 6 Subdivision (d) of Article 1 2 is deleted, since such deliveries are now handled 7 under the Interruptible Water Service program set forth in Article 21 . 8 9 Artic% 12(f) Priorities 10 Subdivision (f) is added to clarify the priorities for delivery to Contractors of 17 various types of water, including those added or further clarified by this amendment 12 (i.e. interruptible water, non-project water). 13 14 Artic% 14(a1 State May Curtail Deliveries 15 Article 14{a) is amended to include provisions for facility outages which were 16 previously addressed in Article 12(d), which is being deleted. 17 18 Artic% 14(b) Agency May Receive Later Delivery of Water Not Delivered 19 Article 14{b) is related to water which was scheduled but, due to outages as set 20 forth in Article 14(a), was not delivered to a Contractor. This subdivision is being 21 modified so that a Contractor may only take delivery of that water later in that year ar 22 in the following year. 23 24 Artic% 16(a) Limit on Total of a// Maximum Annual Entitlements 25 This change is consistent with the change to Article 1 {k) concerning a reduction 26 in the minimum project yield. 27 3 September 28, 1995 redraft 1 Article- 18(a) Shortages; Delivery Priorities 2 Introduction 3 Administration of contract provisions of Article 18fa) under which water supply 4 shortages are allocated among contractors has been the subject of dispute for a 5 number of years. The amended contract language provides that all allocations of 6 Project water from existing project facilities shall be made to contractors on the basis 7 of their annual Table A entitlements. In the event of shortages in supply, this allocation 8 shall be made irrespective of whether the water is used for agricultural or any other 9 purposes. 10 17 General Supply Allocation Provisions 12 All project water supplies are to be allocated among contractors on the basis of 13 contractor Table A entitlements, up to contractor requests. This is done in four steps, 14 as is shown in Attachment 1 . 15 16 In the first step, the total project supply available from existing facilities in a 17 given year is allocated among contractors in proportion to each contractor`s ratio of its 18 Table A entitlement for that year to the total of all contractors' Table A entitlements far 19 that year. 20 21 As a second step, the amount allocated to each contractor in step one is then 22 compared to that contractor's annual request, as submitted under Article 1 2(a). If the 23 contractor's request is less than its allocation, the amount initially allocated to that 24 contractor would be reduced to its request. 25 26 In step three, the excess supply initially allocated to that contractor would then 27 be available for reallocation to contractors with unmet requests, in proportion to the 28 Table A entitlements of those contractors that still have unmet requests. 29 4 September 28, 1995 redraft 1 Step four is to add the amounts from step two to the reallocated amount from 2 step three. Steps two through four may need to be repeated a number of times until 3 no contractor`s allocation exceeds its request and all supplies are allocated. 4 5 As a practical matter, it is not necessary to go through this mathematical 6 exercise when total project supplies are available to meet all contractor requests. In 7 this example, the same allocation is ultimately arrived at as merely allocating to each 8 contractor the amount it requested. 9 10 Allocation in Years of Shortage 71 In years when the total project supply is less than contractor requests, however, 12 it is necessary to follow the four allocation steps described above. Allocations made on 13 this basis will affect contractors differently, depending on the total amount of supply 14 shortage and the relative difference between a contractor's request and its entitlement. 15 Examples of this are shown in Attachments 2a 2b and 2c. A recalculation using this 16 same allocation methodology would be applied at any time during the year that 17 conditions changed significantly. Such conditions would include a change in total 18 project supplies or a decrease in contractor requests. 19 20 Supplies from Future Project Conservation Facilities 21 The supply allocation method as described above applies to supplies made 22 available from all existing project conservation facilities. For the purposes of allocating 23 water supply, it is assumed that "existing project facilities" include water purchases for 24 the project under Rrticle 22{i), and future facilities and programs developed as local 25 projects under the current Article 1 {h}(2}. 26 27 Costs for future project conservation facilities and programs may be repaid: (1 } 28 by all of the contractors under existing repayment provisions, in which case the above 29 described allocation method would apply; or (2) in an opt-in type arrangement, by only 30 some of the contractors. Because of this uncertainty in contractor participation in 5 September 28, 1995 redraft 1 repayment of future project conservation facilities, the allocation of supplies developed 2 from any future facility will be determined on a case-by-case basis by the Department 3 and the participating contractors, and implemented as necessary through contract 4 amendments. 5 6 Article 18(b) -- Delete 7 Current Article 18{b} is entitled "Permanent Shortage; Reduction of 8 Entitlements." It provides for an overall reduction in the Table A entitlement schedules 9 for every contractor "In the event that the State is unable to construct sufficient 10 additional conservation facilities to prevent a reduction in the minimum project yield, or 11 if for any other reason there is a reduction in the minimum project yield, which, 12 notwithstanding preventative or remedial measures taken or to be taken by the State, 13 threatens a permanent shortage in the supply of project water to be made available to 14 the contractors...." Existing Article 18{b} is being deleted. 75 16 Changes to subdivisions (d) and (e) of Artic% 18 17 To reflect the deletion of previous Article 1 8{b} references. 18 19 Article 21 lnterruptib/e Water Service 2D Present surplus, wet weather and Article 12(d) water will be replaced by 21 Interruptible Water Service. Whenever the Department has project water available for 22 delivery to Contractors that is not needed for fulfilling approved entitlement water 23 deliveries or for meeting Project operational commitments, including storage goals for 24 the current or fallowing years, the Department shall offer such water to Contractors in 25 proportion to their respective annual Table A entitlements for that year, using the 26 procedure provided in Article 18. Contractors taking such water will pay to the 27 Department for power costs incurred by the Department for such service the same rate 28 as they pay for delivery of entitlement. 29 6 September 28, 1 995 redraft 1 Elimination of Present Surplus and Wet Weather Water Programs 2 State Water Project long-term water supply contracts presently contain 3 provisions relating to surplus water and Wet Weather programs. All such provisions 4 will be deleted from the contracts. The Department currently has two active letter 5 agreements which provide deferred entitlement credits similar to the present Wet 6 Weather water provision. These agreements with Devil`s Den Water District which 7 were assumed by Castaic Lake Water Agency and with Empire West Side Irrigation 8 District will also be canceled and replaced by the Interruptible Water Program upon 9 execution of the Monterey Amendment by the respective contractor. 10 77 Department Administration of the Interruptible Water Program 12 The Department will eliminate present accounts if any for Wet Weather water 13 and Article 12fd) water, and any Article 14(b) balances accumulated prior to 1995. 74 15 The Department shall provide annually to the Contractors a Water Service 16 Contractors Council Memo, in conformity with Article 21 and this white paper, that 17 describes the criteria for the Interruptible Water Program for the current year. An 18 example of these criteria which is not necessarily a precedent for future programs is the 79 Interruptible Water Program for 1995, which is included as Attachment 3. The memo 20 shall contain the following general provisions: 21 22 a. Interruptible Water is to be delivered and administered through an annual set 23 of criteria which will tailor the program to fit the circumstances far a particular 24 year. Interruptible Water typically becomes available an short notice, and its 25 availability can be discontinued or interrupted on short notice due to changes in 26 runoff conditions or operational needs. 27 28 b. A contractor may take delivery of Interruptible Water in addition to its 29 scheduled entitlement water for the current year. This may result in contractors 30 receiving water above their Table A amount for the year. 7 September 28, 1995 redraft 1 c. Interruptible Water will be delivered to a requesting contractor far the same 2 reasonable and beneficial uses as entitlement water. 3 4 d. If Interruptible Water is being delivered to a contractor, that contractor may 5 be required to take delivery of a specified minimum amount of its approved 6 annual entitlement (not including the previous year`s carryover water) as 7 identified in the annual rules. 8 9 e. Delivery of Interruptible Water will not impact the total amount of entitlement 10 allocated to the contractors for the year or the Department's allocation or 11 delivery of annual entitlements. 12 13 f. If there is a demand by contractors for more Interruptible Water than is 14 available, the supply will be allocated in proportion to the Table R's of those 15 contractors requesting Interruptible Water. 1fi 17 g. A contractor shall not be allowed to shift or defer any of its allocated 18 scheduled entitlement water deliveries in a way that would adversely impact the 19 delivery of entitlement water to other contractors, either in that year or any 2D subsequent year. However, a contractor may reclassify interruptible water as 21 scheduled entitlement water for the current year so long as the reclassification 22 does not adversely affect other water contractors or other project operations. In 23 addition, delivery of Interruptible Water shall not be provided in a way that 24 would adversely impact any State Water Project operations. During a period 25 when Interruptible Water is being delivered to a contractor, and where the State 26 determines there has been an adverse effect, some or all the water delivered to 27 the contractor during the period of adverse effects may be reclassified by the 2$ State as scheduled entitlement for the current year to make the project whole. 29 Any reclassification shall not increase the amount of project water available to 30 the contractor under Article 1$. 8 September 28, 1 995 redraft 1 h. Power and energy charges for delivering Interruptible Water shall be the same 2 as for annual entitlement deliveries. 3 4 Subdivision (j) of Article 22 5 This subdivision confirms that reductions in payments under Article 51 do not 6 affect the conservation portion of the water system revenue bond financing costs. 7 8 Subdivision (b) of Artic% 24 9 In response to transfers or changes in entitlement, proportionate use factors for 7a calculating the capital cost component of the Transportation Charge will be adjusted 7 7 only prospectively, unless otherwise agreed by the Department and the parties to the 72 transfer and unless there are no adverse effects on other contractors. 73 74 Subdivision (g) of Artic% 24 75 This subdivision confirms that reductions in payments under Article 51 do not 76 affect the transportation portion of the water system revenue bond financing costs. 77 78 Subdivision (d) (3) of Artic% 25 79 This conforms the basic contract to the provisions of articles 21 , 55 and 56 to 20 show that Off-Aqueduct costs will be spread over non-project water as well as project 21 water delivered to water contractors. This does not address the current administration 22 of the off-aqueduct amendment. 23 24 Similar revisions were not made to other portions of the contract because use of 25 the words "same for power resources" in articles 21, 55 and 56 means that power 26 charges and credits will be made in the same manner as for entitlement water. 27 28 Subdivision (j) of Artic% 5D 29 This subdivision confirms that reductions in payments under Article 51 do not 3D affect water system revenue bond financing costs. 9 September 28, 1995 redraft 7 Artic% 57 Financia/Adjustments 2 Introduction 3 Article 51 is being added to implement a variety of financial provisions as set 4 forth below. The main purpose of Article 51 is to adjust the Department's billing to the 5 contractors to eliminate certain excess collections under the current contracts that 6 would otherwise be billed to the Contractors. This, along with the creation and funding 7 of a General Operating Account, State Water Facilities Capital Account, and 8 Agricultural Rate Management Trust Fund, will help ensure the continuing financial 9 viability of the SWP and thereby maintain the security of bondholders. 70 7 7 Generally, the formation pursuant to Article 51 of the General Operating Account 12 and the State Water Facilities Capital Account will help the Department ensure that 13 funds will be available to help meet financial obligations under the Burns-Porter Act. In 74 addition, an annual charge reduction program for the Contractors, including the 75 Agricultural Rate Management Trust Fund, will help ensure that each can meet its 76 financial obligations under its Contract. These changes will constitute a significant 17 commitment and a primary priority far the management of the SWP. Whenever 18 questions arise about the administration or management of matters addressed by 79 Article 51 , the Department and the Contractors intend that they should be resolved as 20 reasonably practicable and within the bounds of applicable law in a manner that 21 advances this commitment. 22 23 The State expects to prepare an annual report regarding the status of all 24 accounts and reductions provided for in this article for the information of the 25 contractors. 26 27 Subdivision (a) 28 This subdivision requires the Department to maintain in the California Water 29 Resources Development Bond Fund a General Operating Account with an initial deposit 30 of 515 million from the retired Series G power revenue bond debt service reserve funds 10 September 28, 1995 redraft 1 and an additional deposit of 57.7 million from revenue band debt service reserves in 2 1 998, or at s{ach time as the Department retires the Series H power revenue bonds, 3 bringing the total deposits to 522.7 million. Additional deposits of a maximum of 52 4 million a year as provided in subdivision (e}(2}{iv} and investment earnings are to 5 ultimately bring the account to a level not to exceed 532 million, as adjusted by the 6 escalation;de-escalation factor provided for in subdivision {a)(3). The maximum balance 7 in the General Operating Account will be determined at the end of each calendar year. 8 Any amount in excess of the maximum amounts permitted for that year will be made 9 available in the next year, subject to the revenue priorities established by 10 subdivision (e}. 11 12 In addition to ensuring that revenues are available to meet the costs described in 13 sections 1 2937(b)(1 } and (2) of the Burns-Porter Act {the payment of reasonable 14 operating cost and payment of principal and interest on bonds), the General Operating 15 Account may also be used to meet minor shortages in funds needed to implement each 16 year`s charge reduction, for minor emergencies and unanticipated costs in lieu of 17 supplemental billings as provided for under subdivision c{4), and for purchases of carry 18 over entitlement water under Article 56{d} from annual entitlement water pools 19 established under that article. 20 21 Each use of the General Operating Account must be analyzed on a case-by-case 22 basis taking into consideration the account balance and how quickly the account 23 balance can be replenished under these rules. As a general rule, minor uses are 24 anticipated and are expected to be in the range of 51 to 55 million. 25 26 The State expects to prepare an annual report regarding the status of all 27 accounts and reductions provided for in this article for the information of the 28 contractors. 29 30 11 September 28, 1995 redraft 1 Subdivision (b) 2 This subdivision establishes a State Water Facilities Capital Account in the 3 California Water Resources Development Bond Fund with revenue available under 4 Water Code Section 12937(b)(4), fourth priority under the Burns-Porter Act, for capital 5 expenses for which neither general obligation bonds nor revenue band proceeds are 6 available. It is expected that revenues will be available in 1 998, the year after the 7 California Water Fund (CWF) is expected to be totally repaid. The Department and the 8 Contractors intend that future major capital construction projects be funded with 9 revenue bonds rather than from this capital account. 1a 11 The Department and the Contractors anticipate that only two activities will be 72 funded from the capital account during the years 1 998 through 2000 and that deposits 13 into the account shall not exceed 56 million in each of these three years. These 74 activities include the San Joaquin Valley Drainage Program and the CALFED Bay-Delta 15 Program. The Department and the contractors do not expect funds from the capital 16 account to be spent on any other projects before 2001. The Department will manage 17 the capital account in consultation with Contractors such that in the year 2001 and 18 each year thereafter, a minimum of 540.5 million will be available for the annual charge 19 reduction program as intended by the Department and the contractors. Deposits to this 20 capital account after the year 2000 shall not exceed 54.5 million annually without full 21 consultation with the contractors. If the Department finds that the annual amounts of 22 54.5 million are not needed for immediate or specific future program activities, such 23 amounts will be used for additional annual charge reductions, subject to the priorities 24 established by subdivision (e) of Article 51 . 25 26 Subdivisions (c>, td), (e), (f), (g) and (h) 27 These subdivisions describe the annual calculation of the amount of money that 28 will be available for the annual charge reduction program and its apportionment among 29 contractors. The primary intent in agreeing to, and a primary goal in administering, this 30 amendment is that all financial affairs be managed to achieve the build-up to 540.5 12 September 28, 1995 redraft 1 million by the year 2001 for annual charge reduction as contemplated in these 2 subdivisions. 3 4 The Department will administer the annual charge reduction program in an effort 5 to achieve the amounts and schedule as set forth in Attachment 4. 6 7 Each year, using the following procedures, the Department will calculate the 8 annual statement of charges as provided under the Water Supply Contracts, except for 9 the reductions provided under subdivision {c)(3). 10 11 The annual charge reduction program will be part of the billing calculation but 12 will be handled as a separate component of the billing process. It will not impact the 13 initial calculation of the basic statement of charges, but will result in a reduced bill 14 when the final calculations are made. 75 16 Subdivision (c)(4) -- Supplemental Billings 17 The Department may issue a supplemental billing for unanticipated costs for 18 purposes covered under Water Code Sections 12937(b)(1) and (2) for which the 19 Department did not pay such costs from the General Operating Account. This provision 20 is to protect the bond holders during the time general obligation bonds are outstanding, 21 currently through 2025. It is the Department's intent to rely, to the extent fiscally 22 prudent, on the General Operating Account to meet shortfalls in revenues before using 23 the supplemental billing authority except in emergencies. 24 25 Subdivision (c)(5) -- Supplemental Billings 26 The Department may also issue a supplemental billing for unanticipated casts for 27 revenue bond debt service and coverage for bonds issued under other articles of the 28 Contracts. The principal revenue bonds that may be affected by subdivision (c) {5) are 29 the Series N-V variable rate bonds and subsequent issues in the same variable rate 30 mode. The N-V bonds were issued initially in a weekly rate mode with the interest rate 13 September 28, 1995 redraft 7 set each week. Since the actual interest due for a SWP billing year is not known, 2 principal and interest an the variable rate bonds is estimated at an amount assumed 3 sufficient to caner the principal and interest for the calendar billing year. If the 4 estimated amount for principal and interest is projected to be insufficient, a 5 supplemental billing will be issued to collect the projected shortage. Any over- 6 collection will be returned to the contractors immediately after the close of the calendar 7 billing year, probably in mid-February. 8 9 Subdivisions (c) and (e~ 1D These subdivisions describe the determination of "financial need" in calculating 71 the amount of State Water Resources Development System (SWRDS) revenue available 12 annually for the annual charge reduction program and establishes priorities for 73 application of revenues. The following priorities will apply far the annual distribution of 74 revenues under Article 51 . 75 16 Revenue Bonds. The payment of principal and interest on all revenue bonds issued 77 pursuant to the Central Valley Project Act. 78 79 Operation and Maintenance. Except as specified, the payment of the reasonable costs 20 of the annual maintenance and operation of the SWRDS and the replacement of any 27 parts thereof. This may include payments under the CALFED Framework Agreement 22 and the payment of CALFED Bay-Delta Program activities until such time as the CWF is 23 repaid in 1997. 24 25 General Obligation Bonds. The payment of principal and interest on general obligation 26 bonds issued pursuant to the Burns-Porter Act. 27 28 Repayment of California Water Fund. The reimbursement of CWF moneys previously 29 used for construction of the SWRDS. It is anticipated that the final payment to the 14 September 28, 1 995 redraft 1 CWF will be made by December 1997, and that no further payments will be required to 2 that fund thereafter. 3 4 State Water Facilities Capital Account Requirements. This account is established 5 pursuant to Water Code Section 12937(b}(4} and receives fourth priority SWRDS 6 revenues. The account will fund the San Joaquin Valley Drainage Program and the 7 CALFED Bay-Delta Program activities after reimbursement of the CWF. It is intended 8 that this account be used for capital facilities for which the Department can not 9 presently issue revenue bonds. The Department will use revenue bonds or money 10 sources other than this account to finance the costs of construction of any major 11 capital projects. Deposits to this account are limited by subdivisions (c}{2}(v} and {e}(1 }. 12 13 Reductions Allocated to Contractors' Annual Charge Reduction Program. It is intended 14 that reductions will be allocated as follows: $14 million in 1997, $1 7 million in 1 998, 15 $32 million in 1999, $33 million in 2000 and $40.5 million in 2001 and each year 16 thereafter. 17 18 Subdivision (c}(3} 19 The reductions in charges shall be applied against the calculated capital cost 20 component of the Delta Water Charge and Transportation Charge, split 30 percent and 21 70 percent, respectively. If a contractor does not have a Transportation Charge 22 component, or the component is less than the amount applied against it, the reduction 23 in charges, or any balance, will be applied against that contractor's Delta Water 24 Charge. The resultant net capital payments shall be made one half January 1 and July 25 1 as provided for under the basic Water Supply Contract. The "T" invoice (invoice for 26 Capital and Minimum O.M.P. & R. Component Charges} will show the net amount due 27 for each payment period. 28 15 September 28, 1 995 redraft 1 Any contractor that has outstanding delinquent invoice(s) will have its reduction 2 applied first to the delinquent invoice amounts and any remaining credit then applied to 3 its capital cost component payments. 4 5 Subdivision (d}(5) 6 Any contractor not signing the Monterey Amendment incorporating Article 51 7 will not receive reductions in charges. The bills for any such contractor will be 8 calculated as if the reduction in charges were not available. 9 10 Subdivision (e}(3)(i} -- Make-up of Shortages in Years 1997 - 2000 in Distributions to 11 the Annual Charge Reduction Program 12 In any year when the full amount of reductions cannot be made in accordance 13 with the estimates in Attachment 4, the amount of the projected reduction not made 14 will be deferred and will be made up in subsequent years, with interest at the project 15 interest rate, when sufficient revenues are available after meeting all higher priorities. 16 17 Subdivision (e}(3}(ii) -- Make-uq of Shortages in Years 2001 and Thereafter in 18 Distributions to the Annual Charge Reduction Program 19 In any year when the full distribution of reductions cannot be made in 20 accordance with the estimates in Attachment 4, the amount of the projected reduction 21 not made will be deferred and will be made up in subsequent years, without interest, 22 when sufficient revenues are available after meeting all higher priorities. 23 24 Subdivision (e)(3)(iii} -- Urban Contractors` Deferred Annual Charge Reductions 25 Reductions of up to $2 million per year beginning in 2001 shall be made 26 available to Urban Contractors until deferred reductions up to a total of $1 9.3 million 27 are allocated to the Urban Contractors. The $1 9.3 million is an agreed to amount of 28 foregone reductions in years 1997-2000 by the Urban Contractors made necessary to 29 give the Agricultural Contractors a disproportionately larger amount of the forecasted 16 September 28, 1 995 redraft 1 reductions in order to more rapidly build up the Agricultural Rate Management Trust 2 Fund. 3 4 Subdivision (e){3)(iv) -- Make Ug of Shortages in Urban Contractors' Deferred Annual 5 Charge Reductions 6 If shortages occur in the third priority reductions [subdivision {e){31{iii)] such 7 shortfalls will be made up in subsequent years from available reductions up to an 8 additional $2 million per year under the fourth priority [subdivision (e)(3)(iv)], for a total 9 of $4 million per year under the third and fourth priorities combined. 10 11 Subdivision {e)(3}(v) -- General Operating Account. 12 Article 51 provides for $22.7 million in initial deposits. Additional deposits of up 13 to $2 million a year will be made until the account equals $32 million. Subdivision (a){3) 74 provides for an adjustment factor that may change the maximum amount after the year 15 2001. 76 17 Subdivision (e)(3){vi) -- Additional Reductions Allocated to the Annual Charge Reduction 18 Program. 19 Additional reductions are those amounts in excess of the above annual priorities. 20 Additional reductions will be made to the Agricultural Contractors and Urban 21 Contractors on a 24.7% - 75.3% basis, respectively. 22 23 Subdivision {f} -- Urban Contractor Reductions 24 Each Urban Contractor shall pay to the Department the net capital payment 25 amounts as billed on its "T" invoice. The Urban reductions will be detailed on 26 Attachment 4G to the Annual Statement of Charges, Adjustment of Capital Cost 27 Component by Urban Rate Reduction. See Attachment 5. For hypothetical examples 28 of the method and manner of calculation and allocation of urban reductions, see 29 Attachments 6a and 6b. Calculations of the percentages for the apportionment of the 30 annual urban reduction among the Urban Contractors are to be made annually through 17 September 28, 1 995 redraft 1 1 999, and every five years thereafter beginning in the year 2000, unless a contractor 2 requests a recalculation for an interim year, based on the then-current Bulletin 132. 3 4 Subdivision (q} -- Agricultural Contractor Reductions 5 Each agricultural contractor shall pay the net capital payment amounts as billed 6 on its "T" invoice. Annual agricultural charge reduction credits will be detailed on 7 Attachment 4H of the Annual Statement of Charges, Adjustment of Capital Cost 8 Component by Agricultural Rate Reduction. See Attachment 7, a hypothetical annual 9 statement of charges for Kern County Water Agency in the year 2001 . 10 11 Apportionment of the annual agricultural charge reduction credits among the 12 Agricultural Contractors will be in accordance with subdivision (g). See Attachment 8 13 for example of calculation. This is the initial calculation under this subdivision and is to 14 be used for years 1 997 through 2001 ,and may be adjusted every five years thereafter 15 beginning in the year 2002, if requested. 16 17 The Agricultural Contractors and the Department have agreed to establish an 18 "Agricultural Rate Management Trust Fund" with a mutually agreed upon independent 19 trustee as set forth in subdivision (h}. A trust agreement will be drawn to cover 20 operation of the trust fund. The Agricultural Contractors agree to make semi-annual 21 deposits to the trust fund equal to the annual agricultural charge reduction credits as 22 applied in Attachment 4H to the Annual Statement of Charges. 23 24 Subdivision (h} 25 This subdivision establishes an Agricultural Rate Management Trust Fund to 26 receive deposits equal to agricultural contractors' reductions available under this 27 Article. The trust fund is to be used to help all Agricultural Contractors meet their 28 financial obligations in years when allocated water supplies are less than 100 percent 29 and to help Tulare Lake Basin Water Storage District meet its financial obligations in 30 years when all or part of the irrigable land within that district is flooded. The trust 18 September 28, 1995 redraft 1 fund will be established with a mutually agreed upon independent trustee. See 2 Attachment 9 for a draft trust agreement to be executed with trustee. 3 4 Article 52 Kern Water Bank 5 Added Article 52 provides the contractual structure to implement a transfer of 6 the Kern Fan Element of the Kern Water Banl< from the Department to Kern County 7 Water Agency by separate contract. The mechanism for withdrawal of any Project 8 water remaining in storage from previous specified short-term groundwater banking 9 projects will be provided in that separate agreement among the Department, Kern 10 County Water Agency (Kern Water Bank Contract). 11 12 Artic% 53 Permanent Transfers and Reductions of Entit/ernent 13 Introduction 14 Agricultural Contractors will make available up to 130,000 acre-feet of annual 15 entitlement for permanent transfer to Urban Contractors, on a willing buyer-willing 16 seller basis. In addition to this 1 30,000 acre-feet obligation, individual contractors may 17 also permanently transfer entitlements among themselves. Also, Kern County Water 18 Agency and Dudley Ridge Water District, are permanently retiring 45,000 acre-feet of 19 annual entitlements which will result in corresponding reductions in the minimum 20 project yield and the collective maximum annual entitlements of all contractors. 21 22 Any permanent sale of entitlement will require a contract amendment between 23 the Department and the selling contractor and between the Department and the buying 24 contractor. Major subject areas to be addressed in the contract amendments and in the 25 implementing administrative procedures include: 2s 27 • Adjustment of Table A schedules 28 Transfer of related transportation repayment obligations 29 • Delivery priority for purchased entitlement 30 • Revision of proportionate use factors 19 September 28, 1995 redraft 1 • Adjustment of buyer and seller contractors charges for sales to SWP 2 contractors 3 • Adjustment of contractor charges for sales to noncontractors 4 5 The purpose of the following paragraphs is to set forth the significant issues 6 involved in some of these subject areas. 7 $ Adjustment of Table A Schedules 9 The sale of entitlement will require a prospective adjustment of Table A 10 schedules as part of the required contract amendments. Beginning with the effective 11 year of the sale, the seller's Table A schedule for all future years will be reduced by the 12 amount of entitlement sold. The buyer's Table A schedule will be increased by the 13 same amount. There will be no adjustment of past Table A amounts for either the 14 seller or the buyer, except as may be required to facilitate reassignment of past cost 15 adjustments. 16 17 Transfer of related transportation repayment obligations 18 For each acre-foot of entitlement there is corresponding transportation capacity 19 with a repayment obligation allocated to the seller from the Delta to the seller's point of 20 delivery. An Agricultural Contractor selling entitlement as part of the 1 30,000 acre- 21 feet permanent transfer to Urban Contractors may make available as part of the sale, all 22 or a portion of transportation capacity repayment obligations allocated to the 23 entitlements being transferred and the related rights to receive deliveries through the 24 reaches involved. However, in no event shall the amount of such capacity made 25 available be less than the capacity sufficient to deliver 1 1 °lo of the purchased annual 26 entitlement in one month. There are a number of options to consider in determining the 27 disposition of this transportation capacity. 28 29 20 September 28, 1995 redraft 1 • Sales to upstream SWP contractors 2 The aqueduct capacity used to provide water service to the seller may not be 3 needed for delivery of purchased entitlement to upstream buyers. If needed, the buyer 4 must repay the costs of aqueduct capacity to provide the increased water service to 5 the buyer's service area. If not needed, the buyer and seller must agree on who will 6 repay the costs of unneeded aqueduct capacity. 7 8 • Sales to downstream SWP contractors needing aqueduct capacity 9 With the exception of Reach 31A ("Coastal Stub"}, the aqueduct capacity which 10 had been used to deliver the transferred entitlement to the seller could be usable for 11 delivery of purchased entitlement to the downstream buyer's service area. This option, 12 however, still may leave the buyer without added capacity downstream of the seller's 13 point of delivery. For contractors who currently have had excess capacity constructed 74 for deliveries to them (such as certain East Branch Enlargement participants}, no added 15 capacity may be needed. The Department will revise the Proportionate Use of Facilities 16 Factors for the reaches where buyers do not otherwise have sufficient aqueduct 17 capacity downstream of the seller's service area. r8 19 • Sales to noncontractors 2D Under the amendment covering entitlement sales, the seller will transfer a 21 portion of its repayment obligation for transportation capacity sufficient to deliver 1 1 22 percent or more of the purchased annual entitlement in one month. 23 24 Proposed sales to noncontractors are subject to a right of first refusal by Urban 25 Contractors. 26 27 For noncontractor buyers downstream from the seller's service area, the 28 question of transportation capacity and priority in the downstream reaches will be 29 resolved on a case-by-case basis. 30 21 September 28, 1 995 redraft 1 Delivery priority for purchased entitlement 2 If delivery of purchased entitlement water through reaches downstream of the 3 seller's service area would require use of aqueduct capacity in excess of the factors on 4 which the buyer`s charges are based, or if the buyer is not participating at all in the 5 repayment of the capital costs in reaches required for delivery of the purchased 6 entitlement, then deliveries of the purchased entitlement to the buyer exceeding its 7 proportionate use of facilities factors existing at the time the Monterey Amendment is 8 executed will have a lower priority than deliveries of annual entitlement to another 9 contractor that had been participating and will continue to participate in repayment of 10 capital costs of a reach involved. The buyer may have to accept reduced deliveries or 11 peaking at times when aqueduct capacity provided for entitlement deliveries to the 12 buyer is not sufficient to deliver all of its requested entitlement water. As a result, the 13 State may reduce water service based on established priorities. 14 15 Revision of proportionate use of facilities factors 16 In aqueduct reaches where the seller did not participate in repayment and where 17 the buyer wants additional capacity to transport the increased entitlement, the 18 Proportionate Use of Facilities Factors (PUFFs) will be revised. They will be revised 79 prospectively for sales of the 1 30,000 AF provided for in Article 53 and far sales of 20 approximately 33,000 AF of transfers proposed from contractors located in Santa 21 Barbara and San Luis Obispo counties. All other transfers will be revised both 22 prospectively and retroactively. 23 24 For reaches in which the seller participates in repayment, the PUFFs will be 25 revised by transferring the agreed upon portion of the seller's repayment obligations in 26 a reach to the buyer. The PUFFs for each of the affected reaches will be revised to 27 incorporate the transportation capacity that is purchased as part of the entitlement 28 sale, as may be required by the terms agreed to by the buyer and seller. This change 29 will be effected by revising Table B of the water supply contracts. 3t7 22 September 28, 1995 redraft 1 Added Article 52 provides the contractual structure to implement a transfer of 2 the Kern Fan Element of the Kern Water Bank from the Department to Kern County 3 Water Agency and Dudley Ridge Water District by separate contract. As a result of 4 this transfer, Kern's and Dudley's Table A will be reduced a total of 45,000 acre-feet 5 annually beginning in the calendar year following the effective date of the Monterey 6 Amendments of Kern County Water Agency and Dudley Ridge Water District. Future 7 Delta Water Rates for all contractors will increase as a result of the reduction in total 8 Table A. 9 1Q Future charges for the California Aqueduct related to the 45,000 acre-feet which 11 are currently a repayment obligation of Kern and Dudley will be redesignated as 12 Conservation Facility Costs to be repaid through the Delta Water Charge. This 13 reallocation will take place in the year the contract amendment to implement the 14 Monterey Agreement takes effect. The PUFFS for capital costs will not be revised as a 15 result of Kern and Dudley relinquishing the 45,000 acre-feet. Procedurally, Kern and 16 Dudley will receive credits in their annual Statements of Charges to offset that portion 17 of their charges related to the 45,000 acre-feet. The Transportation capital cost 18 component and minimum OMP&R component charges prior to the effective year of the 19 amendment will remain the responsibility of Kern and Dudley. There will be no Off- 20 Aqueduct Power Facility charges related to the 45,000 acre-feet after that entitlement 21 is retired. Actual and projected Transportation capital and minimum OMP&R charges 22 after that entitlement is retired, will be reflected in the annual redetermination of the 23 Delta Water Rate and recovered through Delta Water Charges to all contractors. 24 25 Adjustment of buyer and seller contractors` charges for sales to SWP contractors 26 Unless the buyer and seller agree otherwise; 27 1 . Delta Water Charges to the buyer will reflect the transfer of entitlement; 28 2. Transportation capital cost and minimum OMP&R component charges and 29 PUFFs, will be revised to reflect the transfer of aqueduct capacity 30 repayment obligations; 23 September 28, 1995 redraft 1 3. The Water System Revenue Bond Surcharge will be apportioned based on 2 (1) the total Delta Water Charge and Transportation capital cost 3 component charges which became the responsibility of the buyer and (2) 4 those of the seller; 5 4. Transportation variable OMP&R and Off-Aqueduct Power Facility costs 6 will be charged to the buyer of the purchased entitlement. 7 8 Adjustment of contractor charges for sales to noncontractors 9 An adjustment for ~WP charges between contractors and noncontractors will be 1D made to assure that all charges associated with the transferred entitlement are fully 11 repaid. The selling contractor shall remain responsible for any default associated with 12 the entitlement sold, provided the purchased entitlement will be reallocated to the seller 13 to the extent a seller must pay the defaulted amount. 14 15 Artic% 54 Usage of Lakes Castaic and Perris 16 Introduction 17 The terminal reservoirs flexible storage program is intended to provide the 18 participating contractors the opportunity to directly utilize the capacities of terminal 19 reservoirs in order to optimize the operation of both local and SWP facilities. The 20 objective of this program is to provide additional flexibility and water management 21 benefits consistent with the usage of such reservoirs for regulating water deliveries 22 during the year to the participating contractors and for providing stored water for an 23 emergency water supply (emergency storage). 24 25 Flexible storage definition and availability 26 Anew administrative storage category called "Flexible Storage" will be 27 established for Castaic Lake and Lake Perris terminal reservoirs. "Flexible Storage" is 28 defined as storage available for withdrawal and use by the contractors participating in 29 the repayment of capital costs of the reservoir. The total amount of "Flexible Storage" 30 available is equivalent to approximately fifty percent of total reservoir storage. The 24 September 28, 1995 redraft 1 total Maximum Allocations of "Flexible Storage" available to each contractor for each 2 reservoir are set forth in the amendment. 3 4 Water tyr~e definitions 5 The following definitions will be used in the Department`s administration of the program 6 set forth in Article 54: 7 8 "Flexible Storage Withdrawal Water" is defined as water delivered from 9 flexible storage to a participating contractor. 1D 11 • "Flexible Storage Replacement Water" is defined as water provided to the 12 State Water Project to replace "Flexible Storage Withdrawals". 13 14 Delivery schedules 15 As required under the SWP water supply contracts, each contractor will submit 16 monthly schedules for water deliveries. The schedules will include requested amounts 17 for "Flexible Storage Withdrawal Water" and "Flexible Storage Replacement Water". 18 19 • The preliminary water delivery schedule submitted in October for the 20 following calendar year will include estimates of monthly requirements for 21 withdrawals and replacement of "Flexible Storage". 22 23 • The preliminary schedule may be later modified during that fallowing 24 calendar year as conditions change. 25 26 • For schedules submitted following the October preliminary schedule, the 27 contractors} will, when possible, provide the Department with a 30-day 28 advance notice (or less, if mutually agreed upon by the Department and 29 the contractor} of their intent to withdraw or replace "Flexible Storage" in 30 the reservoirs. 25 September 28, 1995 redraft 1 Record keeoin 2 For each contractor, the Department will keep a cumulative account of annual 3 withdrawals and replacement of "Flexible Storage". Attachment 1 1 provides an 4 example of record keeping for a hypothetical schedule of flexible storage use at Castaic 5 Lake by The Metropolitan Water District of Southern California {MWDSC). In this 6 example only half of the 1 997 withdrawal is replaced within the required five year 7 period. The remaining withdrawal amount {10,000 acre-feet) must be replaced from 8 entitlement deliveries in the sixth year {2003), or as soon as possible thereafter. 9 10 "Flexible Storage Withdrawal Water" criteria 11 • Deliveries made to a contractor to meet its scheduled or requested 12 "Flexible Storage" withdrawal will be classified as "Flexible Storage 13 Withdrawals". 14 15 • Each contractor may withdraw up to its Maximum Allocation of "Flexible 16 Storage" . 17 18 • Withdrawals must be within State Water Project physical operating limits. 19 20 "Flexible Storage Replacement Water" criteria 21 • The amount of replacement water for refill of "Flexible Storage" shall be 22 unlimited for refill with: 23 - entitlement water in a year when the water supply allocation is 24 100 percent 25 - interruptible water 26 - non-project water 27 - exchange water 28 29 • In a year when the water supply allocation is less than 100 percent, the 3Q amount of allocated entitlement water that can be used for both refill of 26 September 28, 1995 redraft 1 "Flexible Storage" and surface storage outside of the service area under 2 Article 56 shall be limited to the sum of: 3 - 1 00,000 acre-feet when the allocation is 50 percent or less, 4 ramping down on a straight-line basis to 50,000 acre-feet when 5 the allocation is 75 percent or greater, and 6 - the maximum amount a contractor can add to surface storage 7 under article 56. 8 (For example, if Metropolitan Water District does not store water in 9 surface facilities under Article 56, this results in a total potential amount 10 of annual refill with allocated entitlement for the District, of 200,000 11 acre-feet when the allocation is 50 percent or less, and increasing up to 12 250,000 acre-feet when the allocation is between 75 percent and 1 00 13 percent. See Attachment 10). 14 15 • At 100 percent there is no limit. 16 17 • Replacement water is to be scheduled by contractor. 18 19 • Replacement water does not have to be physically delivered to the 20 reservoir (exchanges within the reservoir may be permitted). 21 22 • If a contractor's withdrawals are not replaced within 5 years, the State 23 shall provide replacement water from entitlement water scheduled far 24 delivery to the contractor in the sixth year, or as soon thereafter as 25 possible. 26 27 Reservoir operations criteria 28 • Upon notification by the contractor(s) requesting withdrawal or refill, the 29 Department will modify the reservoir operations by adjusting the SWP 30 operations plan for scheduled withdrawals or refill of "Flexible Storage". 27 September 28, 1 995 redraft 1 • The Department shall continue to operate these reservoirs, subject to 2 these contractor withdrawals, in a manner to allow for regulation of water 3 deliveries to participating contractors and to assure that a reasonable 4 amount of storage remains for the emergency requirements of the areas 5 served by reservoirs after considering other resources available to such 6 areas. 7 8 • The Department intends to modify its operation of these reservoirs such 9 that the annual cycling of the storage not available to the contractors for 10 flexible storage is limited to about 30,000 acre-feet at each reservoir. 11 12 • If a contractor`s withdrawals from "Flexible Storage," pursuant to a 13 withdrawal request submitted after the October preliminary schedule 14 submittal, impair the Department's ability to meet the monthly peaking 15 requirements of that contractor under Article 1 2(b}, the Department shall 16 not be obligated to meet that peaking requirement, but shall provide such 17 peaking service as is operationally practicable far the requested deliveries. 18 19 Contractor charges for "Flexible Storage" grogram. 20 21 • No charges will be assessed for withdrawals from "Flexible Storage". 22 23 • No "use-of-facilities" charges will be assessed for the use of "Flexible 24 Storage". 25 2fi • Pumping charges will be assessed only for pumping required to deliver the 27 "Storage Replacement Water". 28 29 • For any replacement water furnished to terminal reservoir storage, the 30 participating contractor shall pay the Department's charges that are 28 September 28, 1995 redraft 7 associated with the type of replacement water furnished and these 2 charges will be subject to the same adjustments that are applicable to the 3 type of water furnished for replacement. 4 5 Attachment 1 2 presents two examples of how pumping charges would be 6 calculated for the flexible storage schedule shown in Attachment 1 1 . In the first 7 example it is assumed that all replacement water is transported for MWDSC from the 8 Delta. The replacement water charges in Column 5 are based on estimated power 9 charges between the Delta and Castaic Lake. In the second example all replacement 10 water is provided by MWDSC from groundwater stored in the Semitropic Water Storage 71 District. Because Semitropic is downstream from Dos Amigos Pumping Plant, the 12 replacement water charges do not include charges far either the Delta ar Dos Amigos 73 pumping plants. 14 15 Article 55 Transportation of Non-Praject Water 16 This new article sets forth priorities and various rules for delivery of non-project 17 water (defined by new Article 1 (kk} using Project transportation facilities. 18 19 Artic% 56 Use, Storage and Sale of Project Water ©utside of Service Area and Storage 20 of Water in Project Conservation Faci/ities 21 Subdivisions (a}, (b} and (c} 22 Under the current contract, it has been the practice that project water allocated 23 to a contractor may be: 24 25 • Delivered to a contractor's service area for: (a} direct use within the 26 service area; and/or (b} storage in groundwater and surface storage 27 within the service area, limited only by available supply and service area 28 storage capacity; ar 29 29 September 28, 1 995 redraft 1 ~ Stored as carryover in project conservation facilities under the provisions 2 of Article 1 2(e1. 3 4 Any use or storage of project water beyond these accepted uses has been 5 evaluated by the Department and the contractors on a case-by-case basis and, 6 depending on then prevailing conditions, may or may not have been approved by the 7 Department. 8 9 By approving this amendment, the Department and the Contractors agree to add 10 to these accepted uses of allocated project water the ability to store such water 11 outside a contractor's service area, under the following criteria: T2 13 The Project water stared on behalf of a contractor must later be used 14 within the storing contractor's service area. 15 16 Storage may be in groundwater basins, without limitation on the amount 1 7 stored. 18 19 Storage may be in surface facilities with limitations on the amount stored. zo 21 In addition, Contractors may store project and non-project water in project 22 conservation facilities under a new carryover storage program which allows far 23 extended storage. As before, any use or storage beyond these accepted uses would be 24 evaluated by the Department and the Contractors on a case-by-case basis. 25 26 The following paragraphs describe how the Department intends to implement 27 these programs. 28 30 September 28, 1995 redraft 1 Acceptable Types of Storage Outside of a Contractor's Service Area 2 A contractor may store project water allocated to it outside of its service area. 3 The location of this storage may be inside or outside of the areas served by the State 4 Water Project lSWP), and may be in any or all of the fallowing types of storage: 5 6 Groundwater starage. 7 8 Surface storage in SWP conservation facilities. 9 10 Surface storage in non-project facilities. 77 72 Any storage outside of the SWP service area may require a change in SWP water 73 rights permits. 74 75 Limitations on Disposition and Amounts of Water Stored 7fi Project water may be stored by a contractor outside of its service area only far 17 later use within its service area. However, in the event that water is stored for a 78 contractor outside its service area and there is a bona fide inability to return the stored 79 water upon demand, that storage remains a valid use and provision may be made for 20 compensation by the storer to that contractor. 21 22 There are no limitations on the amount of allocated project water that a 23 contractor may store in groundwater starage programs. This includes no limitation on 24 both the quantity that may be stored in one year, and the cumulative amount that may 25 be stored aver two or more years. It is anticipated that the amount of water stored in a 26 year in groundwater programs will be somewhat self-limiting due to physical and 27 financial constraints associated with such programs. 28 29 The amount of allocated project water that a contractor may add in a year to 3D storage in surface storage facilities, in both SWP conservation facilities and in non- 31 September 28, 1995 redraft 1 project facilities, is limited as described in the amendment and as shown in Attachment 2 13. These limitations on amounts of project water that may be stored in SWP 3 conservation facilities apply only to existing facilities. 4 5 Although there are limits to annual additions to surface storage, there are no 6 limitations on the cumulative amount of a contractor`s project water that may be stored 7 in surface storage facilities over two or more years. 8 9 Any limits on annual additions to surface storage are independent of any 10 amounts of water stared in groundwater storage programs. 11 12 Storage by contractors in SWP surface conservation facilities of project water is 13 further limited by, and of non-project water is only limited by, the availability of storage 14 space not needed by the Department for storage of project water, and by other 15 contractors far storage of project and non-project water. 16 17 Storage Rules for Existing Carryover Versus Extended Carryover 18 A contractor may carry over water and store it under the existing provisions of 19 Article 1 2{e) and/or under the extended carryover program described in this paper. 20 The amounts of water which may be stored under these two programs are determined 21 separately, with the quantity for each program limited in accordance with the rules that 22 apply to that program. 23 24 Existing carryover rules under Article 1 2{e) will be maintained without change. 25 26 Under the rules for the new extended carryover program, a contractor may store 27 any amount of project water allocated to it, up to the limitations described in the 28 amendment, irrespective of whether or how that water could have been used within its 29 service area that year. There is no limitation on how long a contractor's extended 30 carryover may be stored, as long as the storage space is not needed for project 32 September 28, 1995 redraft 7 purposes, and given other contractors' carryover storage and requests for carryover 2 storage. 3 4 "Storer" Versus "Seller" Track 5 For any calendar year, a contractor may choose to be a "storer" or a "seller," but 6 not both, or may choose to be neither. The "storer" track is for a contractor choosing 7 for a given year to store allocated project water outside its service area. The "seller" 8 track is for a contractor choosing for a given year to turn back allocated project water 9 for sale in the turnback pool (see discussion of Article 56(d)). 10 71 A contractor choosing the "storer" track in a given year may not sell water in the 72 turnback pool in that same year. 73 74 A contractor choosing the "seller" track in a given year may not add to carryover 75 storage in that year under the extended carryover program described above. A 76 contractor "seller" may, however, add to carryover storage at the end of that year 77 under Article 12(e), but would then be precluded from selling water in the turnback 78 pool in the following year (this would preclude potential schedule manipulation which 79 could otherwise result in a contractor being both a "storer" and a "seller" in the same 20 year, contrary to the intent of this two-track system). 21 22 Getting Water Into Storage 23 A contractor choosing the "storer" track for a given year must declare this by 24 specifying in its preliminary water delivery schedule, submitted to the Department by 25 October 1 of the rg for year under provisions of Article 1 2(a), the amount of project 26 water it wants delivered for storage outside its service area. 27 28 • For storage in a groundwater storage program or in non-project surface storage, 29 the contractor should submit a monthly schedule for deliveries to the turnout to 30 which the water is to be delivered for storage. 33 September 28, 1995 redraft 1 • For extended carryover storage in SWP conservation surface facilities, the 2 contractor should submit the amount of project water it would like to carry over, 3 or add to previous carryover, from the year for which the request is made into 4 the following year. 5 6 • Once a contractor has declared itself a "storer," it can increase the amount of its 7 request for extended carryover, up to the limitations on annual additions to 8 extended carryover, at any time during the year so long as this increase is within 9 its already allocated total supply. A contractor may also decrease its request for 10 extended carryover. 11 12 A contractor request for storage in a groundwater storage program may only be 13 made for storage in a program that is existing and operational at the time the request is 14 made. 15 1fi The Department's responsibility for the conveyance of water to non-project 17 storage is limited to: (1) delivery to the SWP turnout from which the water will be 18 stored, and (2) when the water is withdrawn from storage, transportation of the water 19 from the point of entry back into the SWP system and from there to the contractor's 20 service area. 21 22 The Department will, at the end of the calendar year for which a carryover 23 storage request is made (i.e., fifteen months after the preliminary schedule is 24 submitted), store as much of a contractor's current request for storage in SWP 25 conservation surface facilities as allowable under the limitations described in the 26 amendment, given: (1) the final supply allocation percentage for that year; (2) the total 27 amount of storage not needed for storage of project water at that time; and (3) the 28 proportionate entitlements of those contractors with water already in storage and with 29 requests for storage, i.e., the contractors competing for storage capacity. 30 34 September 28, 1995 redraft 1 A contractor may store non-project water as carryover in SWP conservation 2 surface facilities. There is no limitation on the amount of non-project water which may 3 be stored as carryover by that contractor, except for the amount of physical storage 4 capacity available for carryover storage for that contractor. The contractor should 5 submit a monthly delivery schedule to the Department for transport of this non-project fi water to storage as soon as such schedule is known. 7 8 Withdrawing Water from Storage 9 A Contractor wanti~~g to withdraw water it has previously stored outside its 10 service area indicates so by submitting a monthly schedule to the Department. This 11 schedule may be submitted as part of a contractor`s preliminary delivery schedule under 12 the provisions of Article 12(a}, or it may be submitted subsequent to that time. 13 14 Adjustments to Schedules 15 A contractor in the "storer" track that has submitted a monthly schedule for 16 delivery to storage outside its service area may submit a revised schedule under 17 provisions of Article 12(a}. 78 19 Department modifications to a contractor's submitted monthly delivery schedule 20 may only be made to: (1) make it conform to the limitations on the amounts of Project 21 water that may be stored outside the service area as described above, and (2) under 22 the provisions of Articles 12(a) and (b). 23 24 Allocation of Carryover Storage Space 25 Storage capacity in SWP surface conservation facilities that is not being used by 26 the Department for storage of project water shall be allocated among all contractors 27 storing or requesting storage of carryover water, under either or both the existing 28 Article 12(e) and the new extended carryover program, in proportion to the annual 29 Table A entitlements of those contractors (see Attachment 14a). 30 35 September 28, 1 995 redraft 1 A contractor may store water in excess of its allocated share of available storage 2 capacity if storage is available, i.e., if other storing contractors} are storing Less water 3 than the storage allocated to them (see Attachment 14b}. 4 5 If total contractor requests for storage exceed the total amount of storage 6 available, any capacity allocated to but unused by a contractors} shall be available for 7 storage to those contractors requesting storage in excess of their allocated capacity. 8 Such unused capacity shall be allocated among those contractors requesting storage in 9 excess of their allocated capacity in proportion to the annual Table A entitlements of 10 those contractors (see Attachment 14c). r1 72 If storage capacity is made available for storage by noncontractors, such storage 13 availability would be limited to the storage in excess of that needed for project storage 14 and for contractors' stored and requested carryover of project and non-project water. 15 16 Sgill from Carryover Storage 17 A contractor's stored water may be "spilled," or displaced, from SWP surface 18 conservation facilities if the capacity is needed by the Department for storage of project 19 water, or as the result of other contractor{s} exercising their right to carryover storage. 20 21 Stored water will be spilled in the following order of priority {see Attachments 15 and 22 1 6): 23 24 • Water, if any, stored for noncontractors. 25 26 • Water {project or non-project) stored for a contractor in excess of its allocated 27 share of available storage capacity. 28 29 • Water stared for a contractor within that contractor's previously allocated 30 storage capacity. 36 September 28, 1995 redraft 1 The priorities for spill of carryover for all contractors collectively are based solely 2 on allocated storage capacity as identified above, without regard to the type of water 3 stored, i.e., regardless of whether the carryover water was stored under Article 12(e} 4 (except for the spill provision included within that article} or the new extended 5 carryover program, or whether the water was project or non-project water. 6 7 For an individual contractor, unless that contractor requests otherwise, when 8 storage for that contractor is spilled, the Department will assume in its water 9 accounting that any carryover stored for that contractor under Article 12{e} is the first 10 to spill, due to the time limitation for storage of water stored under that article. 11 12 The Department shall give as much notice to a contractor as feasible of a 13 potential spill of that contractor's carryover storage. 14 15 Subdivision (d} -- Sale of Project Water For Use Outside Service Area 16 The Contract provides that the Department approve all or a portion of a 17 contractor's October request for the next calendar year. The contractor at a later time 18 may find that the approved amount is more than it needs for the year. The Department 19 encourages the contractors to turn back excess approved entitlement at an early date 20 and make it available to other contractors. This amendment provides a financial 21 incentive to turn allocated entitlement back before March 15. This amendment is not 22 intended to deal with transfers from a landowner's land in a contractor's service area to 23 that same landowner's land in another contractor's or noncontractor`s service area or 24 non-permanent transfers other than bona fide exchanges occurring over two or more 25 years. 26 27 Department Administration 28 The Department will establish and administer two turn-back water pools each 29 year -- Pool A and Pool B. A contractor choosing the "seller" track may sell turn-back 37 September 28, 1995 redraft 1 water in one or both of these pools. Administration for Pool A will be as set forth 2 below: 3 4 Turn-back water offered on or before February 15 will become part of 5 Pool A. s 7 A contractor offering turn-back water for sale may cancel its offer for any 8 water remaining unsold by March 1 . 9 10 Any contractor may buy turn-back water from Pool A by submitting a 11 request by March 1 . The cost for such water will be 50 percent of the 12 Delta Water Rate for each acre-foot of water purchased. All money from 13 the purchase will be credited to the offering contractor. 14 15 If there is less demand than available water, the quantity of water sold 16 and the money from the purchase shall be allocated among selling 17 contractors in proportion to the amount of turn-back water each has 18 turned back to the pool. 19 20 If there is more demand than available water, each contractor offering to 21 buy the water shall be allocated a proportionate amount of the available 22 supply according to the ratio of its annual Table A entitlement amount to 23 the total annual Table A entitlement amounts of the group of buying 24 contractors up to the amount of their requests. 25 2fi On March 1, if the demand is less than the available water, the 27 Department may purchase the residual available water and pay to the 28 offering contractor(s) 50 percent of the Delta Water Rate for each acre- 29 foot of water available. This water purchase cost will be repaid to the 30 State by all contractors, including the offering contractors, under the 38 September 28, 1995 redraft 7 terms of Article 22(i) of the contract. The Department shall retain that 2 amount in SWP conservation storage to increase project carryover storage 3 for the succeeding year. 4 5 Administration for Paol B will be as set forth below: 6 7 Turn-back water offered after February 1 5 and on or before March 1 5, 8 and any water remaining from Pool A, shall become part of Pool B. 9 10 A contractor offering turn-back water for sale may cancel its offer for any 7 7 water remaining unsold by April 1 . 72 73 Any SWP contractor may buy the turn-back water from Pool B by 14 submitting a request by April 1 . The cost for such water will be 25 75 percent of the Delta Water Rate for each acre-foot of water purchase for 76 that year. Money from the purchase will be credited to the offering 77 contractor. 78 79 If there is less demand than available water, the quantity of water sold 20 and the money from the purchase shall be allocated among selling 27 contractors in proportion to the amount of turn-back water each has 22 turned back to the pool. 23 24 If there is more demand than available water, each contractor offering to 25 buy the water shall be allocated a proportionate amount of the available 26 supply according to the ratio of its annual Table A entitlement amount to 27 the total annual Table A entitlement amounts of the group of buying 28 contractors up to the amount of their requests. 29 39 September 28, 1995 redraft 7 If, by April 1, the demand is less than the available water, the Department 2 may purchase the remaining available water and pay to the offering 3 contractor(s) 25 percent of the Delta Water Rate for each acre-foot of 4 water purchased. This water purchase cost will be repaid to the State by 5 all the contractors, including the offering contractors, under the terms of 6 Article 22(i) of the Contract. The Department shall retain that amount in 7 SWP conservation storage to increase project carryover storage for the 8 succeeding year. 9 10 In addition to paying for water, Contractors purchasing water under the turn- 11 back pools will pay for costs of transportation and power as provided for in the 12 contract. 13 14 Water offered but not sold under Pool A or B by April 1 may be offered to 15 Contractors and noncontractors at the market price, subject to a right of first refusal for 16 Contractors. The proceeds of the water sale to anon-contractor will be paid to the 17 offering contractors in proportion to the amount of water turned back by each 18 contractor that remains for sale. Noncontractors will need to make separate 19 arrangements for transportation of purchased water, including use-of-facilities and 20 power costs, as required to make deliveries. 21 22 Subdivision (e) -- Continuance of Article 1 2(e) Carry-over Provisions 23 The Article 56 program is in addition to the current Article 12(e) carryover 24 program. Under this amendment, Contractors may choose either the "scorer" or 25 "seller" track for a given year, but not both. A contractor choosing the "seller" track 26 may not store allocated entitlement outside its service area during any year in which it 27 has elected to sell project water, except that short-term carryover water will be allowed 28 to be stored under provisions of Article 12(e). Under Article 12(e), Contractors can 29 carry over unused entitlement water from the last three months of the year to be used 30 in the first three months of the following year, with specific criteria related to the 40 September 28, 1995 redraft 7 unused water ~Nhich may be carried over. If, however, a contractor stores carryover 2 water pursuant to Article 12{e), that contractor cannot elect to sell water in tl~e turn- 3 back pool in the following year. 41 ATTACHMENT l ALLOCATION OF PROJECT SUPPLIES WHEN SUPPLIES MEET REQUESTS (water su~Yly sufficient to meet 100% of requests) Assumption: Total Project Supply = ] 500 TAF Step ] Step 2 Step 3 Step 4 Allocation Excess Table A Based on Reduced Reallocation Allocation Contractor Entitlement Request Entitlement to Request of Excess Total (TAF) (TAF) (TAF) (TAF) (TAF) (TAF) A ]000 700 750 700 700 B 500 500 375 375 ]25 500 C 300 150 225 ISO 150 n ]00 100 75 7S 25 ]00 E 100 SO 75 50 SO Total 2000 ]500 1500 1350 ]SO 1500 ATTACHA'IENT 2a ALLOCATION OF PROJECT SUPPLIES DURING SEIORTAGE (~a~ctter- su~pl}~ s~r~icient to meet 80% ~~f requests) .Assu-nption: Total Project Supply - 1200 TAF Step 1 Step 2 Step 3 Allocation Excess Table A Based on Reduced Reallocation Allocation ConCractor Entitlement Request Entitlement to Request of Excess Tota] (TAF) (TAF) {TAF) (TAF) (TAF) (TAF} A 1000 700 600 600 25.0 625.0 B 500 500 300 300 12.5 312.5 C 300 150 180 150 150.4 D 100 100 60 60 2.5 62.5 E 100 50 60 50 50.0 Total 2000 1500 1200 1160 40 1200 ATTACHMENT 2b ALLOCATIQN OF PROJECT SUPPLIE5 DURING SHORTAGE (~~~ater sup~l~= sufficient to meet 67% ~f requests) Assumption: Total Project Supply = 1000 TAF Step 1 Step 2 Step 3 Allocation Excess Table A Based on Reduced Reallocation Allocation Contractor Entitlement Request Entitlement to Request of Excess Total (TAF) (TAF) (TAF) (TAF) (TAF) (TAF) A 1000 700 500 S00 500 B s0o soo Zs0 zso Zso C 300 1S0 lS0 1.50 1S0 D 100 100 50 50 50 E 100 SO 50 50 SO Total 2000 1500 1000 1000 0 1000 ATTACH11~lENT 2c ALL~CATIOI`~ OF PROJECT SUPPLIES DURING SHORTAGE (~a~nter szrhply su~cier~t to meet 87% of rcqucsts) Assumption: Total Project Supply -- 1200 Tr~F ---------------- tt< ratio n 1 ------------------ Step i Step 2 Step 3 Step 4 Allocation Excess Table A Based on Reduced Reallocation Allocation Contractor Entitlement Request Entitlement to Request of Excess Subtotal (TAF) (TAF) (TAF) (TAF) (TAF) (TAF} A 1000 610 600 600 25.0 625.0 B 500 S00 300 300 12.5 312.5 C 300 150 180 1.50 ]50.0 D 100 64 60 60 2.S 62.5 E 100 SO 60 SO 50.0 Total 2000 1374 1200 1160 40 1200 ---------------- Iteration 2 ------------------ Step 2 Step 3 Step 4 ---------------- Iteration 3 ------------------ Step 2 Step 3 Step 4 Excess Excess Reduced Reallocation Allocation Reduced Reallocation Allocation Contractor to Request of Excess Subtotal to Request of Excess Total (TAF) (TAF) (TAF) (TAF) (TAF) (TAF) A 61.0.0 610 610 610 B 312.5 12.5 325 325 1 326 C 150.0 150 150 1S0 D 62.5 2.S 65 64 64 E 50.0 50 SO 50 Total 1185 15 1200 1199 1 1200 Attachment 3 Page 1 of 2 STATE OF CALIFORNIA THERESQURCESAGENCY CAL1Ft~RNIA STATE WATER PRQJECT DEPARTMENT OF WATER RESOURCES WATER SERVICE CONTRAC70RS COUNCIL MEMO No..~: TO ALL WATER SERVICE CONTRACTORS ,~, ~ ~. Fro m ~~' DIRECTOR, D '~ T. GF-~A-'*-G~i"~ESOURCES D f ~ Febru~-+ry 6, 1995 SU U~ eC~ 1995 Interruptible Water Program The Department of Water Resources has developed a 1995 Interruotible Entitlement Water Program which will allow contractors the opportunity to take delivery of supplemental entitlement water for 1995. Deliveries under this program will not affect a contractor's allocation of entitlement water for the year. The 1995 Program is patterned after the 1994 Interruptible Entitlement Water Program and is available to all contractors under the attached guidelines. The Department will notify all contractors when irate=ruptible water is available. If you have any cruestions about the program, please contact Donald R. Long, Chief, State Water Project Analysis ©ffice, at {916) 653-4313. Attachment Attachment 3 Page 2 of 2 Interruptible Water Program for January 27 through February 1 fir 1995 CRITERIA 1 . Allows a contractor to take delivery of water above the presently scheduled and approved amounts of 1995 entitlement water. Deliveries under this program may result in contractors receiving water in 1995 above a contractors Table A amount. 2. Interruptible Water wilt be delivered directly to a requesting contractor for reasonable and beneficial use. 3. Does not impact allocations to the contractor of scheduled 1995 entitlement. 4. If Interruptible Water adversely impacts scheduled entitlement water deliveries because of operational constraints in the Delta, Interruptible Water for that day may be reclassified as 1995 scheduled entitlement. 5. Requesting contractor can stop or suspend participation in the program with proper notification. 6. Under this program water for delivery shall result from direct diversions at the Delta Pumping Plant. Water shall not be stored in San Luis Reservoir for later delivery to contractors 7. This program is not intended to allow a contractor to defer delivery of approved 1995 entitlement and substitute it with delivery of Interruptible Water, thereby shifting approved entitlement water into storage facilities. SCHEDULING AND CHARGES 8. Water available under this program shall be from that which is in excess of SWP storage and operational needs, as determined by the Oepartrnent. 9. Participating contractors shalt request 1995 Interruptible Entitlement Water by submitting a weekly schedule to the State Water Project Analysis Office by FAX at (9161 653-9628, attention: Christina Lai. Schedules shall be submitted by 10:00 a.m. Thursday for the following Friday through Thursday. 10. The weekly schedule shall include a statement identifying the intended use of the Interruptible Water. 1 1 . Each day Interruptible Water is delivered a participating contractor must also take daily delivery of its approved 1995 entitlement water (does not include 1994 Carryover water} at the following rate per month: For agricultural Interruptible Water use; Jan - 1 %, Feb - 2% For municipal and industrial Interruptible Water use; Jan - 2%, Feb - 4% 12. The Department may determine the availability of Interruptible Water on a daily basis and may discontinue delivery upon short notice. Contractors are to identify a contact person for the Department to contact when Interruptible Water is discontinued. 13. Delivery may be limited by operational capacity in SWP facilities or as a result of changed operational conditions and can be discontinued upon short notice. i 4._ Conveyance charges for Interruptible Water delivered under this program shall include Transportation variable operations, maintenance, power and replacement component charges and Off-Aqueduct charges. 15. This Program shall not be a precedent for future agreements, including amendments to the Water Supply Contract. 16. If necessary, Interruptible Water will be allocated to requesting contractors in proportion to 1995 Table A entitlements. 17. ~ All contractors participating in the program are responsible for coordinating delivery points and rates through your normal contacts at the various Department Field Divisions. 18. To verify the availability of Interruptible Water over the weekends contractors can dial the following pager number (916} 948-4779 and a Department representative will return your call. February 1, 1995 t; 1 ~11~~1.. i1 ~1Fr1 J. STATE WATER PROJECT PAYMENT MANAGEMENT PROGRAM (Millions of poltars) Contractor Payment Management Program (1 ) (~ (5 s) SWP (2j Funds Ag Urban [1j Capital Available Contractors Contractors Revenue Resources Coll-2 24.796 75.396 1 ss5 0.0 0.0 0.0 0.0 o.a 1996 0.0 0.0 0.0 0.0 0.0 1997 t 4.0 0.0 14.0 10.0 4.0 1998 23.0 6.0 17.0 10.0 7.0 1999 38.0 6.0 32.0 10.0 22.0 2000 3s.o s.o 33.0 10.0 23.0 Consultation with DWR and ''WC's to discuss use of funds at7ove X40.5 million 2001 45.0 4.5 40.5 10.0 30.5 2002 45.0 4.5 40.5 10.0 30.5 2003 45.0 4.5 40.5 10.0 30.5 2004 45.0 4.5 40.5 10.0 30.5 2005 44.0 3.5 40.5 10.0 30.5 2006 44.0 3.5 40.5 10.0 30.5 2007 45.0 4.5 40.5 10.0 30.5 2008 45.0 4.5 40.5 10.0 30.5 2009 44.0 3.5 40.5 10.0 30.5 2010 45.0 4.5 40.5 10.0 30.5 2011 4T.0 6.5 40.5 10.0 30.5 2012 49.4 8.5 40.5 10.0 30.5 2013 48.0 7.5 40.5 10.0 30.5 2014 51.0 10.5 40.5 10.0 30.5 2015 56.0 15.5 40.5 10.0 30.5 2016 to 2035 56.0 [3j 15.5 40.5 10.0 30.5 (1j Data from 8ulietin 132-93 (2j DWR to create a Capital Resources Aa~unt d $22J million from t3ond Reserve Funds separate tram the amounts shown. (3j Initial estimate ATTACHMENT 5 State of California Pace 1 °f 3 The Resources Agency DEPARTMENT OF WATER RESOURCES P. O. Box 942836 Sacraments, California 94236-0001 STATE h.'ATER RESCXIRCES DEVELOPMENT SYSTEM THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA INVOICE FOR ~r~?ITA! AND MINIMUM O.M.P.&R. COMPONENT CrARGES PCR A WATER SUPPLY IN 2001 2001-014-T Mr. Stephen Arakawa, Assistant Chie~ Invoice No. Planning and Resources Division The Metreoolitan Water District cf June 30, 2000 Southern Calir-crnia Oate Attn: Ms. Kathleen Kaufman 350 South Grand Avenue 160157 Bex 54153, Terminal Annex Contract No. Los Angeles, California. =-~~ Sd (in dollars 4,'~ter ~ Capital Cost CoT.pcnent Cj Minimum QMP&R Ccxnponent Sys;e~ ~ Revenue Total Due on j E~rJ Delta Water Transportation Delta hater Transportation Payment or Before i "crch~,Y~. C~arge A/ Charge Charge B/ Charge Due January 1- i ~ 8;014,549 8,202,976 25,290,813 1,853,561 5,9e6,743 49,328,642 ~:F~cr~~r~- 1 ; 1,853,561 5,6,143 7,820,304 `March 1 1,853,561 5,966,143 7,820,304 April 1 1,853,560 5,966,743 7,820,303 May 1 1,853,560 5,966,742 7,820,302 June 1 1,853,560 5,966,742 7,820,302 July 1 8,014,548 8,202,975 25,290,813 1,853,560 5,966,742 49,328,638 August 1 1,853,560 5,966,742 7,820,302 September 1 .1,853,560 5,966,742 7,820,302 October 1 1,853,560 5,966,142 7,820,302 Nov~6er 1 1,853,560 5,966,742 7,820,302 Dec ember 1 1,853,560 5,966,742 7,820,302 TOTA!_ 16,029,097. 16,405,951 50,581,626 22,242,723 71,600,908 176,860,305 TERMS: As provided under Article 32(b) of the contract, interest shall accrue at the Pooled Money Investment Fund Rate per month on delinquent payment if the delinquency continues for rrore than 30 days. Aj 2,011,500 acre-feet @ 11.09221862 B/ 2,011,500 acre-feet @ 11.05777949 C/ C harges under the Capital Cost Canponent have been reduced by: Urban Rate Reduction Cr. (b19,686,825) Agricultural Rate Reduction Cro 30 ATTACHMENT 5 Page 2 of 3 State or C3lirornla The Resources Age^~cy Ge^ar~ent of Water Resa:;rces RECONCILIATiCN GF PAYMENTS DUE UNCER OE'lI L CaNYON- CASTAIC CONTRAC- A/ ANO WATt"R SUP?LY CC;4TP.ACT IN 2001 FUR Tom' MyTRflPOLITAI~7 WATER DISTRICT OF SOUTHERN CALIFORNIA Water Supply Contras: Payments [f Payments Due Under The Water Sueply Cc,ti~il Caryen-=astaic Cost Devii Canyon-Castaic Contract Contract C:^arges sere Rei,moursabie ThereunCar ano the Water Supply Contract WATcR S'tSTc:! R;:~/Ei1IlE 8C';C SURG~ARLE 316,029,097 316,029,097 CAPITAL COST C%~=~~~'S^+-:' De?ta Water G'aar~e 522,311,993 Z2,31I,993 Less a-~,:,, ~at2 reduction Credit 5,906,0x7 l0,?05,9Si 5,96,047 16,=05,951 Tra~s~nrtaticn Charge Less,;Payments made urder _,:Ar~icle 17(x} of Devil C;fhyon-Castaic Cantr ac= -`.:Less Urban Rate Reduction Credit MINIMUh! CbfO&R CCt~~CNENT: Deity Water C~arge Transpartat ion G*~arge Less Payments made under Article 17(b) or Devil Canyon-Castaic Contract Subtotal C6J 7Q] 706 369,797,146 5 x3;,42 ` - 13,780,778 :6,016,963 13,780,778 50,531,626 22,2x2,723 Z2 ,242,723 76,551,434 376,~si,434 4,950,525 71,600,908 3176,860,305 Devil Canyon-Castaic Contract Charges Debt Service .35,435,342 Operation and Maintenance 4,90,526 Subtotal 510,385,868 Total Charges for Calendar Year 2Cfli 3187,246,173 3181,246,173 A/ In ccmplianca with Article 22. ATTACHMENT 5 Face 3 of 3 CaCltci CSt CUmC~..a."• V elta Water (;., iQfL'L Transporaticn Gysrge Tc,~i State of California The Resources ~.gency ~e^arii~ie!lt Of Water rte50UfC°S Slate Water Project r~'L~t~ ~ ~erit cf Cacital Cos Ccmocr,ent ~Y Urban Rate ReduCion -~ , ;, rice S i of he Monterey r.gre_ment T:~~_ .4'ie~rooolitan Water District cf Southern Cafiiornia In X001 Wier ~UCply Contras. ~,~(Ccn gate `CeCUC:1Gn Car G2S r'J Ci eC}} ii .1 lei ~~1 ~L~,J i ~ acg 54, 362.404 e86.o74.4Q2 ~cc apg n~-} (3,780.7; 8) t519.6c6.82~'i AJ The charges in column 2 are the cayments to be c; edited for purposes cf calculating future c; urges under the Water Sucpfy Contra. 81 The Urban Rate ReduC,ien credit will be redetermined each year and does not affect the calculation of future charges under i~~e Water Supply Contrac~ r,G1U5ie^. ('.,; ici C°S `^' 1 SS6,~05,a~1 Scc.98?.5i ~ Attachment 4G fA Z W W M~ I.L Z MmM L^L J LL Z _O U O J J Q ATTACHMENT 6a o 6 o r $ c r v u >c rn rn m u~ rn r N OO D m ~n v m a o _ (q C y r (' _ 1 r Q a0 O V tp o0 0 O 1 N ~t P7 N tf ca ) r t! ) a0 C7 N In ~D r a0 to O a Ol ~0 t O l0 ~O O a 1 10 l N 4 r h N O O UG ~ C O (7 t0 N Q_7 ~- N I N N f`] f~ 00 7 lY Q l V f M m 0 Q 1 N 7 h r 0 O tD N V N r V N (O r r tD N I N O C7 N 4 fD O N 7 tD N r r O O , _ __ j V w t0 w N w N w m w I ('T w N m Q w m w ? w N w w M w w V w r w N N ~, w ) N K r f ~ ~ w w w w ~/l ~ a N `~~ w w ~ ~ ., N Im v IN IC lO 0f f"7 i O ~t'1 m V 'IO) Q1 Q rCjO tD c'7 Im to O N N - m l!') m i111 r r Q IN 'Q m ' +- r eD tD O lO m lm tD m m lm [") ~ r ('1 ic0 N w OI h ~r a~j r ~. 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(n tJ) t o > - C D 0 _ ~ `'~ U' C d U U 4~ ^~ W C? N L o, C a, T •a ~ o ~ x m m m ~ O (0 w E g v m U -O ~_ O ~ m r tG ~~ .n m c a _ ~ o ~ 3 `m i. `o ~ V V m ~ m m ~ ~ m c m E m a Vi G C L ~ C C m `a m ~ ~_ O a 3 v F ° c c rn a y = ~ ~ ~ t6 U t d .-. c = ~ .~ 3 y c00 ~ m U U L m T L ~ O L m c 3 a c C ~ ~ O ~ ice-. y L m C'. o m o n. ,c o ~ ~~ N N a ~ m > v i. U 'c ~~ ma j ,Y C jq ._ ~ ~ o m rn m y N ~ = ~ _U O ~ Q7 N C 9 ~ ~ m y F m m y n °,~ ham- ~~ c"a N E '$ `o c e ca 'm ._ 7 ~ U G O] ~ f1 y ~ ~ m 7 N ~ 0 .n m o c ~3 ~ A m o ~ ~ m a H v r y O O m a E ~ a c ~' 9 ~ ~ .. ~ . ~ rn y a Qf m , V H ~ ~ o I N W 0 Z m U a 9 U m N E O O U c .o 0 m c a O 9 f4 .~ y N t9 O V G m E `c w m y m m H v m c m L d r N P r G C m O O E ~ a C m y m E ~ E a ~ a y /'1 `y = N 0 47 ° p m ~ ~ ~ c vl ~, F m T ~p n c ~ y c o ~ o ~ m g •~ U y G 0 m O m m ~ m ~ m m ~ m ~.'3 m ~ a ~ m ~ v " ~ N Z' ~ '~- r O U tII O G jp ~. t9 ` m N U o a m m O ~ U Q. sU[ uj L O 99.. (0 ~ O C M Of m c m ~ N O O c7 ~ < c ~ O O O O 3 ~ m E ° " m E `o l9 ~9 9 O U ~ d L~ ~ ~ N N t V U 3 ~ U ~ (ma(~pp (n~ ~ ? o E a Ct O ~ ~ C E ~ ~ U ~ a o ~ - x • 'C m ~ Z 'C ~ - o .D 2 a ~ ~ _~ G C ~ j ~ y ~ m c t"i ~ a O m ~ e s ~ u N N 7 ~,., L t '~ ~ a a m ~ o L t U U ` ~ C cCc W ~ ~ ~ j u m m` . ~ ~ m m `o o, ~ - B a = y C N U U E= E r `o `o m ~ w E m m m ~ E ~ r m a y cn en r%~ O ~ ~ ~ ~ e v V v~~ v~ w n y 01 1!] VI If7 y y N ~ U c m m m~~ m~ m E U U U 7 ~ U N m ~ dad = =a_'I-U ri v vi rc ~ eo of ATTACHMENT 6b S/~ z U r~ W W ~"' d ~m~/ i.7. O Z Q J J Q .~ 0 ..J+. C c .~ ~ ~ U ~ U O ~ °" U ~ ~ O ~ ~ J C ''^~^ V vJ '~ N L ~ ~ M~ N W fII =_ C ""~ (n ~/ S ~ G O n h '1~ l I I Imrn IN^ O A mlN I , ~ I~ ~ m N l I h 1 ol~lo tDIm i 1 I r0 ~ Q I rnl t m~mih e O O uu Q s O ~ O' I N ~ ~. 1(J I.D'N Ito . w, ' ~ w ~ v 10 O w N 7v If0 10 In V INI I MINI "' i - N ry lry^ INiN O ~ a w N i w N .~: . 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St S O O • • E S t S t c St O O • • • ~ • ~ ~ S t S t st st O St . o C c C ~ C t c Z• .- ni N ~ If> N fA O Ot ~ ~ N ATTACHMENT 7 Stata cf California The Resources agency ~t,a;,;,;1~!~4± Lt 'nAit'i R~SI,J.R'~~S 8cx _ 36 _..:~_,_-._ ,.;lifcrnia 9,x:6-G00(?' ., ~ nr. ~ '~~.. ....' rte.. vv r ~L~~ ,4!~.~~ I ~. JS t."? ~y~'~ CGL~""~ FvAT~ ~ A.GE~TCY ~'~'!:Gl.~ rLR C--^~iT~L ~`~0 .M i:4iNi;M U.,4.?.gin. C~.'~+~FCNc.4T ~:r',=,._~ ~ .;1 r1 ti;=~l`E;~t cl,r°LY IN 2r^nl Nr. Tan Clark, ,.,,ner~ 4aaa Kern County u~~er __ . P.C. cx ~a `in ~:;i~ `"c1 1nVC __ ~' _.,_. __. _ce _ __~~ ~az_ .._~~~ ~~ntr~~ _ ,,.,. ~~ er ~ - __ _ ~ ~a Cuc~ Cam. _,.~ C/ ~ ~uinir-:.-n ~~,karR Ca ~.._ I C I .'tC C~e I I .. :. I C a cn f C i;_ ; -,~ r~ _.~ , La a d _r i -, r_a~ ~~ or ~efore ~ Sur ~rJ ~ ~...~_a ~; ,:r;~ ~ w.arse ~,/ ~.c ;e .. _ _ ~ 1 -- ~acuary ~ ~, , ., ' ~ e~ ., I 1,Cc2, 37 I i, ., ~_ ~ _ ,- _ I ~ ~ ~ ~ r --- ', y March 1 i_ I ~ I I I i,C62,~37 tJ X64, ., ~ ! ( i _ _ April 1 ( ~ ~ j 1, ?,837 ~ 1,C6~, ~ I ~ -_; ""ay 1 ~ ~ ~ ~ 1,C 2, 37 1,~^e~, ~ ~ i . ,_ ___ ~ r, ~ ~, Jure 1 I I 1,x62, 37 I 1,G6x,_~~ !I ~ -- 2,_~ ,i5, --- July 1 I 2,4~C Gu3 i 5,020,995 1,667,242 1,062,837 i,^64,420 11,26?,S=' August 1 ~ 1,062,837 1,064,°20 ~ 2 '27 'S7 ~ Septprber 1 I 1, 62,837 c,u ~ 1,064, "^ 2,,2~ 5; _ October 1 1,G62,837 1,06x,420 ~ 2,127,757 ~ November 1 1,062,837 1,064,920 2,127,757 Decvnber 1 1,062,836 1,064,920 2,127,760 TOTAL 4,896,607 10,041,990 3,334,485 12,75x,043 i2,779,C~0 43,805,565 TBR.MS: A,s p rovided under Article 32 (b) Of the contract, interest sha11 accrue at the Pooled Morey Inves~-ent Fund Rate per r~ntn cn delinquent pa;^ ~ent if the delirquency continues f or rrore than 30 Gays. A/ 1,153,400 acre-root ~ 11.09221862 BJ C/ 1,153,400 acr=-r"eet ~ i?.0577794? Charges under the Capital Cost Ca'ponent have been reduced by: Urban Rate Reduction Cr. (5482,522 ~ Agricultural Rate Reduction Cr. (58,69~J,06O ATTACHMENT '7 State or Caiifcrnia Tne Resources Acenc/ ~e^.artment Of eater i.. ac C, ~; ,rC~c Stag Water FrC I?C: .~,ci~at,.e,^t or CCLiLGI C:.s:..,cm~cr=~t . '~y !'roan Rate Re~uc:icn ~'rder Article 1 cf the ~tilentere;r Agre°^ent Tie Kern Ccunfi~ Waver Abe.^,c';r In 2CC'~ Cacital Cost C^ ^ert ~~ . ~~~er S~!cciv Contra C`~rces AI tL1 Urc~n ~~t> .rtec::c:cr, (~ {~ ~ -, ~ Ge~ta 'Maier r~ ~;c~ ~~_.__ Tra;,sccra,icn ~. ~.:, I Ct~; s ~, ~ ,~~~ c .4 "%^Q r,- - ~~ ?1 ire chances in column 2 are t..e payments to be c: ec'ited for ~.-urccscs of ccic::ie;;.c future charc=s urger ,~e `1'1Gter Succfy Contract E1 i ne Urcan =ate =ce~uc:ion cr e^it wiil be re~etermined each year ar:~ Ices „ct affect the Ca1C::lailCn ~( futUfe C^arC°_S under u',e Water SUCpIy Cv^ntraCt 2 0~ 3 ~ius,e~ C~arces ~G~ A~~achment 4G ATTACHMENT ~ CGcilri CaSi C~(T' G^8'' l 1..f ~.. -.~~ Ceita `Na~~. C «~~._ Tra,~s~craticr;av. ~fae I ~~~. Slate of Caiifcrnia The Resources Agency Cecanment of Water Resources State Water Project r~=.:~ „,~~t of Capital Ccst Comcone.^a '~..V ~t ^.4 rl C.iitu rai i .Gig .":ecu~icn '~r~er uric:e 0 i cf the 1,1enterev Acreernen, ~ ne Kem County Wester Agency In X001 „_:~ :~. Succ~v ~.^ntrac. C~a~~.°s -J /~1 Vv 511,~67,1~6 S, i~1,^uv2 c=~~. 08.188 Re^Ulred PaV~e^CS t4 ,'-~.CriC;:~tLTci Kci~ ~,/~cnaCe.r^ie: ~t I (USt 1"UnCr. Cr` Fayme^t Due Jar,uarr ~, 2QQ Payment Cue July 1, ~QO Tccai Payments fcr Calendar Year 2001 ~J~ (5`%,07,018} I C..JC73, Q~L i (S8 c"~O.GE01 ~' 3~~,030 ~~, 4.35.030 ~8. ~~O.OEO A/ The charces in column 2 are the payments to be credited for purposes of calculating future charges under the Water Supply Contract. EJ The Agricu(turl Rate Keduction c; edit will to redetermined each year and dces not affect the calculation of future charces under the Water Supcly Contract. CJ As re:,uired t:y Principle 5 of the Monterey Acreement. The payment amcuni wi11 be redetermined each year and will epual the amount of the Agriculturl Rate Reduction credit. Acriculturi Rate ~-~educ;ian Cre~it ~/ 3 or 3 ,hCiUSie~ ~`c(GeS t~. _ , Q80,1 i 8 ~" °'8.13 At"~achment-4H Attachment 9 DRAFT Draft 9/19/95 TRUST AGREEMENT BETWEEN COUNTY OF KINGS, DUDLEY RIDGE WATER DISTRICT, EMPIRE WEST SIDE IRRIGATION DISTRICT, KERN COUNTY WATER AGENCY, OAK FLAT WATER DISTRICT, AND TULARE LAKE BASIN WATER STORAGE DISTRICT As Trustors and THE STATE OF CALIFORNIA, DEPARTMENT OF WATER RESOURCES As Beneficiary This Trust Agreement is entered into by and among the County of Kings, Dudley Ridge Water District, Empire West Side Irrigation District, Kern County Water Agency, Oak Flat Water District and Tulare Lake Basin Water Storage District, the Trustors, and the State of California, acting by and through its Department of Water Resources (hereinafter referred to as the "State"), the Beneficiary. WITNESSETH WHEREAS, each of the Trustors has a long-term Water Supply Contract with the State which provides for the delivery of annual entitlements of water by the State to each Trustor; and WHEREAS, contemporaneously with the execution of this Trust Agreement, amendments to the Trustors' Water Supply Contracts are being executed, which will, among other things, add a new Article 51 to each such contract relating to payments to be made to the State; and 1 WHEREAS, in Article 51 to each of their respective Water Supply Contracts the Trustors and the State agreed to establish an Agricultural Rate Management Trust Fund; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Trust Agreement do exist, have happened and have been performed in regular and due time, form, and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Trust Agreement: NOW THEREFORE, in order to provide for rate management and rate stabilization for the Trustors under their respective Water Supply Contracts, the State and the Trustors do hereby agree as follows.: ARTICLE I DEFINITIONS Section 1.01 Definitions. For the purposes of this Trust Agreement, unless the context otherwise requires, the terms defined in this section shall have the meanings herein specified and include the plural as well as the singular. Unless otherwise defined in this Trust Agreement, all terms used herein shall have the same meanings assigned to them in the Water Supply Contracts between the State and the Trustors. Article 51 means Article 51 added to the Water Supply Contracts between the State and each of the Trustors by the 2 Amendment to those contracts executed contemporaneously with the execution of this Trust Agreement. Cap or Caps means the maximum accumulation to be made in each Trustor's account as specified in Section 4.01. Local Agency means a California local agency as defined in California Government Code Section 53600. State means the State of California, acting by and through its Department of Water Resources. Trust Agreement means this Trust Agreement by and among the State and the Trustors as originally executed or as it may from time to time be supplemented or amended by any Supplemental Trust Agreement. Trust Fund means the fund established with the Trustee pursuant to Article III and administered in accordance with the provisions of this Trust Agreement. Trustee means the Trustee selected pursuant to Section 2.02 ar any successor Trustee as provided far in Section 2.03. Trustor and Trustors means the County of Kings, Dudley Ridge Water District, Empire West Side Irrigation District, Kern County Water Agency, Oak Flat Water District and Tulare Lake Basin Water Storage District. water Supply Contract and water Supply Contracts means the contracts between the State and the respective Trustors and any amendments thereto for water supplies and any amendments thereto. 3 ARTICLE II APPOINTMENT OF TRUSTEE AND SUCCESSORS Section 2.01. Eligibility. The Trustee shall be a trust company or bank having the powers of a trust company having a corporate trust office in the State of California, having a combined capital and surplus of at least Fifty Million Dollars ($50,000,000.00) and being subject to supervision or examination by federal or state authority. If the Trustee publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this section the combined capital and surplus of Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this section, the Trustee shall resign immediately in the manner and with the effect specified in this article. Section 2.02. Appointment of Initial Trustee. On or before January 1, 1997, an entity acceptable to the State and the Trustors shall be selected to act as Trustee hereunder. Any such entity selected under this Trust Agreement shall signify its acceptance of such selection and its appointment hereunder as Trustee by executing and delivering to the State and each of the Trustors a written acceptance of such appointment, and thereupon such entity, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of the Trustee hereunder. 4 If the State and all of the Trustors cannot agree on a Trustee, the State or any Trustor may petition either the Kern County or Sacramento County Superior Court for the appointment of a Trustee, and such court may thereupon, after such notice as it may deem proper, appoint a Trustee meeting the eligibility requirements set forth in Section 2.01. Section 2 03 Resianationt Removal and Successor Trustees. Upon the vote of a majority of the Trustars, with the concurrence of the State and the Kern County Water Agency, the Trustee may be removed at any time and a successor Trustee appointed. The Trustee may resign at any time by giving written notice of such resignation to each of the Trustors and the State. If the Trustee resigns or is removed, the State and the Trustars shall promptly select and appoint a successor Trustee in the same manner as provided for the original Trustee in Section 2.02. No removal or resignation of the Trustee or appointment of a successor Trustee shall become effective until the acceptance of the appointment by the successor Trustee. In the event the State and the Trustors cannot agree on a successor Trustee, then any party to this Trust Agreement, including the Trustee, may petition either the Kern County or the Sacramento County Superior Court for the appointment of a successor Trustee, and such court may thereupon, after such notice as it may deem proper, appoint such successor Trustee. 5 ARTICLE III ESTABLISHMENT OF TRUST FUND AND TRUST ACCOUNTS Section 3.01. Trust Fund. There shall be established with the Trustee a Trust Fund to be known as the Agricultural Rate Management Trust Fund, which Trust Fund shall be held in trust, managed, invested, and disbursed by the Trustee pursuant to the provisions of this Trust Agreement. Section 3.02. Trust Accounts. The Trustee shall maintain within the Trust Fund a separate account for each Trustor to hold the funds deposited into the Trust Fund by, for or on behalf of that respective Trustor. ARTICLE IV TRANSFERS INTO TRUST FUND Section 4.01. Transfers From Trustors. In accordance with the provisions of Subdivision (hj of Article 51, each Trustor shall deposit with the Trustee for deposit in that Trustor's account within the Trust Fund, at the times provided in Subdivision (h) of Article 51, amounts equal to the reductions in its payments to the State under its Water Supply Contract made available to the Trustor by Article 51 until the amount in the Trustor's account within the Trust Fund is equal to the Cap for the Trustor. The Cap for each Trustor is: Oak Flat Water District $ 514,500 County of Kings $ 388,600 Dudley Ridge Water District $ 5,?13,900 Empire West Irrigation District $ 282,700 6 Kern County Water Agency $130,350,900 Tulare Lake Basin Water Storage District $ 12,749,400 Total of all Caps $150,000,000 In the year 2002 and every fifth year thereafter, the Trustors will, in consultation with the State, determine whether the Caps for each Trustor should be adjusted; provided, however, none of the Caps shall be reduced below the amounts set forth above. The Kern County Water Agency shall notify the Trustee in writing if the Trustors have determined that the Caps should be adjusted. Section 4.02. Payment of Supplemental Bills. In any year in which a supplemental bill has been submitted to a Trustor by the State pursuant to subdivision (c)(4} of Article 51, such supplemental bill shall be treated as reducing by an equal amount the obligation of such Trustor for that year to make payments into the Trust Fund. To the extent that such Trustor has already made payments to the Trust Fund in an amount in excess of such Trustor's reduced Trust Fund payment obligation, such Trustor may request the Trustee in writing, with a copy to the State, to use the excess from the Trust Fund to pay the supplemental bill and upon such request the Trustee shall make such payment. Section 4.03. Allocation of Interest. Any interest earned on money in the Trust Fund shall be allocated quarterly, or more frequently if directed by the Investment Committee established pursuant to Section 6.02 hereof, by the Trustee to the various 7 Trustor's accounts an the basis of the average daily balances in their respective accounts. ARTICLE V DISTRIBUTION OF TRUST FUNDS Section 5.01. The Trustee shall distribute the Trust Fund as set forth in this article. Section 5.02. Distributions (a) In any year in which the State's allocation of water to a Trustor under its respective Water Supply Contract by April 15 of that year is less than 100 percent of the Trustor's requested annual entitlement for that year and the Trustor in writing requests the Trustee to do so, with a copy to the State, the Trustee shall, to the extent there are funds in that Trustor's accaunt, distribute to the State from the funds in the Trustor's account for the benefit of that Trustor an amount equal to the percentage of the total of that Trustar's statement of charges under the Water Supply Contract for that year, as recomputed by the State on ar about May 15 of that year, for (i) the Delta Water Charge, (ii) the capital and minimum components of the Transportation Charge, and (iii) the Water System Revenue Bond Surcharge, that is equal to the percentage of that Trustor's annual entitlement for that year that was not allocated to it by the State by April 15 of that year. (For example, if the allocation of water is 15% below the Trustor's annual entitlement, the Trustee will pay the State 15% of the Trustor's statement of charges for the items listed above.) 8 {b) In addition to the provisions of paragraph (a) above, if on April 15 of any year any of the irrigable land within the Tulare Lake Basin Water Storage District (Tulare) is flooded, and Tulare in writing requests the Trustee to do so with a copy to the State, the Trustee shall, to the extent there are funds in Tulare's account, distribute to the State from such account for the benefit of Tulare an amount equal to the percentage of the total of Tulare's statement of charges for that year, as redetermined by the State on or about May 15th of that year, far (i) the Delta Water Charge, (ii) the capital cost and minimum components of the Transportation Charge, and (iii) the Water System Revenue Bond Surcharge, that is equal to the percentage of the irrigable land within Tulare that is flooded on April 15. (c) Any amount to be disbursed pursuant to this section 5.02 shall be paid by the Trustee to the State on July 1 of the year involved and shall be credited by the State towards any amounts owed by the respective Trustor to the State under the Water Supply Contract as of that date. However, the Trustor may direct the Trustee in writing, with a copy to the State, to make the disbursement to the Trustor who shall then make the payment to the State as required by that Trustor's Water Supply Contract. If any disbursement provided for in this section exceeds the amount owed to the State by such Trustor as of July 1, the excess shall be disbursed to the State at the time of and in payment of future obligations owed to the State by that Trustor. Alternatively, upon the written request of such Trustor, with a copy to the State, all 9 or part of the excess shall be paid by the Trustee to that Trustor in reimbursement of prior payments by that Trustor to the State for that year. (d) It shall be the duty of the State to certify to the Trustee in writing each April 15 the percentage of each Trustor's annual entitlement allocated for that year. It shall be the duty of Tulare to certify to the Trustee in writing each April 15 the percentage of the irrigable land in Tulare that is flooded on that date. Section 5.03. Distribution of Excess Funds. The Trustee shall pay directly to each Trustor, free of trust, quarterly any sums in the Trustor's account in the Trust Fund in excess of the Cap for that Trustor set forth in Section 4.01 above. Section 5.04. Distribution Upon Termination of Trust Agreement. Upon the termination of each respective Water Supply Contract between the State and a Trustor, the Trustee shall pay the balance in that Trustor's account in the Trust Fund, free of trust, to that Trustor. ARTICLE VI POWERS AND DUTIES OF TRUSTEE Section 6.01. General. (a) In the administration of the Trust, the Trustee shall have the following powers, all of which shall be exercised in a fiduciary capacity. The Trustee shall be protected in acting upon any notice, request, consent, order, certificate, opinion or other paper or document believed to be genuine and to have been 10 signed or presented by the proper party or parties. The Trustee may consult with counsel with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. (b) Whenever in the administration of the Trust Fund imposed upon it by this Trust Agreement the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate of the State or any Trustor, and such certificate shall be full warrant to the Trustee far any action taken or suffered in good faith under the provisions of this Trust Agreement in reliance upon such certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 6.02. Investments. For the purposes of this Trust Agreement there shall be an Investment Committee consisting of three persons, one of whom shall be appointed by the State, one of whom shall be appointed by the Kern County Water Agency and one of whom shall be appointed by the other Trustors. The Trustee shall deposit, invest, and reinvest all funds in the trust pursuant to written instructions from the Investment Committee, which instructions shall provide for the deposit, investment and 11 reinvestment of the Trust Fund only in depositories and investments that are legal for a Local Agency, including but not limited to the Local Agency Investment Fund maintained by the State of California. Section 6.03. Accounting. The Trustee shall keep accurate records and accounts of the administration of the Trust Fund. The Trustee shall semiannually furnish to the State and each Trustor a full and complete statement of all receipts, disbursements, gains and losses of the funds held in each Trustor's account. Section 6.04. Records. The Trustee shall maintain proper records and books reflecting all of the income and disbursements of the Trust Fund. The records and books are to be maintained according to the recognized principles of accounting. The records and books shall be kept on file at all times in the office of the Trustee and shall be opened for inspection at all reasonable times to the Trustors and the State or to their duly authorized agents. Section 6.05. Compensation and Indemnification of Trustee. The Trustors agree to pay to the Trustee from time to time reasonable compensation for all services rendered by it and to reimburse the Trustee upon its request far all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Trust Agreement, except any such expense, disbursement, or advance as may be attributable to the Trustee's negligence or bad faith. The Trustors also agree to indemnify the Trustee for, and to hold it harmless against, any 12 loss, liability, or expense incurred without negligence ar bad faith on its part, arising out of or in connection with the acceptance or administration of the Trust Fund created hereby, including the casts and expenses (including attorneys' fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligations of the Trustors under this Section shall be joint and several, and the rights of the Trustee and the obligations of the Trustors under this Section shall survive the termination of this Trust Agreement. Section 6.06. Payment of Expenses. All taxes, assessments, fees, charges and other expenses incurred by the Trustee in the administration or protection of the Trust, including the compensation of the Trustee and any premiums for the Trustee's bond, shall be a charge on the Trust Fund. Such expenses shall be allocated among the Trustors in proportion to the balances in their respective accounts at the end of each year in which the expenses are incurred. The Trustee's determination with respect to all such matters shall be conclusive on all persons interested in this Trust. ARTICLE VII GENERAL PROVISIONS Section 7.01. Amendment of Trust Agreement. This Trust Agreement may be amended at any time before January 1, 1997, upon the unanimous consent of the State and all of the Trustors. After 13 January 1, 1997, this Trust Agreement may be modified or amended with the concurrence of the State, and two-thirds of the Trustors in number and having at least two-thirds of the total of all of the Trust Funds in their respective Trust accounts. Section 7.02. Notices. Any notices to be provided pursuant to this Trust Agreement shall be given in writing by registered or certified mail to the parties at their addresses shown on the signature pages of this Trust Agreement with copies of all notices being sent to the State. Upan written notice given pursuant to this section, any party may change the address to which notices shall be given. Section 7.03. Effective Date. This Trust Agreement shall became effective as of the date of its execution by the State. Section 7.04. Counterparts. This Trust Agreement may be executed in counterparts. 14 IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement by their duly authorized officers on the dates shown. Approved as to legal form and sufficiency by: STATE OF CALIFORNIA DEPARTMENT OF WATER RESOURCES, Beneficiary (address) Chief Counsel Department of Water Resources Counsel, County of Kings Counsel, Dudley Ridge Water District ~.:ounsel, ~;mpire west olae Irrigation District By: Director Date: COUNTY OF KINGS, Trustor (address) By: Title: Date; DUDLEY RIDGE WATER DISTRICT, Trustor (address) By: Title: Date: EMPIRE WEST SIDE IRRIGATION DISTRICT, Trustor (address) By: Title: Date: 15 Counsel, Kern County Water Agency Counsel, Oak Flat Water District Counsel, Tulare Lake Basin Water Storage District 141597.1 KERN COUNTY Trustor (address) By: Title: Date: WATER AGENCY, OAK FLAT WATER DISTRICT, Trustor (address) By: Title: Date: TULARE LAKE BASIN WATER STORAGE DISTRICT, Trustor (address) By: Title: Date: 16 ~3 L 0 ~F+ V^^/'' /W ii .X W 4~ N ~.. L ~_ .~..! ~_ J ~J ^~ W _~ ~_~ W Q U O Q Attachment 10 O O O O O O ~ M N O O r {~aa~-aaad pussnoyl) ~uawa~~i~u~ ~enuud pa}e~o~~b O O O r O ~_ V Q ~ Q r~ V , Q~ V L Q~ 0_ 0 to N \° O ~~ ~~ ~_ 'p U ~ w ~ G O O v ~ C`O0 O O V) C O U U O U ~ O ~ O G Q O c L •~ ~ (~ ~ ~ L U O) cv O O ~ Cn O L O - ~ O X N ~ ~ ~ - o c y O m c ~ O O N ~ v U - N O ~ O O .~ N ~ ~ v ~ 0 L O ~/7 O N .-~- :- N ,~ - N O U "~ C w ~ U cSf U 'O ~ O O C RS ~ C N ~, O ~ _ O Q C s ac"-' ~ •- O ~ N N CQ ~ cC O Q 4I ~ .U N O ~ z~_ O O O O O O OM ~ O ~ ~ t-attachment 11 FLEXIBLE USE OF CASTAIG LAKE STORAGE BY MWDSC EXAMPLE RECORD OF ANNUAL WITHDRAWALS AND REPLACEMENT (Acre - Feet _ __ ____ End of ear Year Annual Annual "Flexible Repay Repay ~~ Withdrawals Replacement II Storage" 1995 1997 I ', Available Withdrawal 'Withdrawal i 1994 I 153,940 1995', (30,000) 0 123,940 1996 0 30,000 153,940 30,000 I 1997 (20,000) 0 133,940 ' 0 '~ ~ 1998 0 10,000 ~ 143,940 ~ 0 10,000 ' 1999 0 ~~ 0 '~ 143,940 0 I 0 ', 2000 0 0 '' 143,940', 0 0 2001 0 0 143,940' 0 2002 0 0 143,940 !~ 0 ', 2003 0 10,000 ~ 153,940 ~ _ 10,000 * Entitlement water used to replace withdrawals that are not repaid within the required 5-year repayment period. Attachment 12 FLEXIBLE USE OF CASTAIC LAKE STORAGE BY MWDSC ILLUSTRATIVE EXAMPLES OF PUMPING CHARGES FOR REPLACEMENT DELIVERIES EXAMPLE 1 REPLACEMENT WATER DELIVERED FROM DELTA TO CASTAIC LAKE "Flexible 132-94 132-94 Replacement's Charges to Calendar Storage" Variable Off-Aq Delivery MWDSCfor Year (Withdrawal)/ OMP&R Rate Rate Replacement ' Replacement Rate Deliveries (2) + (3) (1) x (4) (AF) (vIAF) (~IAF) (~IAF) (~) ~~ (1) ~ (2) ~ (3) (4) (5) ~ 1 995 (30,000} 38.53 44.38 82.91 0 ' 1996' 30,000 45.52',. 45.30 90.82 2,724,600' 1997 (20,000) 55.00 45.16 100.16 d ' 1998'. 10,000 50.54 44.02 94.56 945.600 1999 0 52.50 41.03 93.53 0 ' 2000. 0 62.22 37.54 99.76. 0 2001 0 60.89 36.76. 97.65 0 2002 ~! 0 ' 61 .98' 34.89 96.87 0 20031 10,.000 62.94 33.02 95.96 959.600 Total _ $4,629 800' EXAMPLE 2 REPLACEMENT WATER DELIVERED FROM SEMITROPIC WSD TO CASTAIC LAKE "Flexible 132-94 132-94 Replacement Charges to Calendar Storage" Variable Off-Aq Delivery MWDSC for Year ! (Withdrawal}, ~~ OMP&R Rate Rate Replacement ~! Replacement Rate Deliveries I (2} + (3) (1 } x (4) (AF) I -- ($/AF_) ~ (~a1AF) ($IAF) (~) -- _ _ . 1 O ~ (2) (3) (4) (5) ' 1995 (30 000), 29.33'. 39.71 69.04 0 1996 ~ 30,000 35.521 40.54 76.06. 2,281 651 1997' (20,000)' 44.58' 40.41 84.99 0 1998 10,000 40.46'.. 39.39 79.85' 798 497 1999 0 ~ 42.04', 36.71 78.75' 0 2000 0 51.03 33.59 ' 84.62 0 2001 !i 0 j 49.70 32.89 82.59 0 2002 0 j 50.70'. 31.221 81.92 0 2003 ' 10,000 51.56 ~ 29.55 - - - 81.1 1 __.81 1 067 ~ ---- Total ~ -- - --- ---..- 1 - $3,891.216 Attachment 13 /~ V ! ~~ 1W rL V 0 •~ W ~O ,~ L .~ Tom! .+..r ~.,p V Q Q O O ^~ ~aa~ aaay-pu~snoyl O O O O O O O O ~ c7 N ~ i I i i i i i i I I i i i O O O r 0 ~'~- m `a . ~ O d ~ ~~- C ~ O .-~ X CII ~ ca ~ V ~ ~ ~ aj G ~ C u ~ J o O o ~( .I.d Q~ V L D_ 0 N d O D O O O O I`~- ~ N O }uauaa~~i}u3 ~enuuy ~o ~uaaaad ~ C ~ O ~E U O Q G O ,~ ~ ~ ~ ~ v} ~X ~ ~ C O V N ~ ~ .y. ~U ~, ; a c ~ U ~ ~ _ ~ "" ~ C N W j ~ ~ ~ o c c d ~ ,~ o o ~ .,... c c ~- d d. O y- N O ~- O ~ ~ ~ o ~ O O O T r- O '~ C ~ O O ~ °' ~ a s Z ~, ~, Attachment 14a CARRYOVER STORAGE Allocution of Available Storage Amofzg Storing Contractors Given a situation where capacity in excess of SWP storage is available for carryover storage and four contractors want to store water in this available capacity, storage would be allocated among them, given the following assumptions, as follows: Assumptions: Total Capacity Available for Cantractors = 200 TAF Contractor Table A entitlements are as identified in column (b) below. Storage Allocation: Table A % of Storing Allocated Contractor Entitlement Contractors' Storage Capacity (TAF) Entitlement (TAF) (Q) (h) (~) (~) A 750 75 150 B 100 10 20 C 100 10 20 D 50 5 10 Tatal 1000 100 200 Attachment 14b CARRYOVER STORAGE Indivi~lrral C©ntractor Storage in Excess ©f Alloeczted Storage The amount of water stored for a contractor depends on its allocated share of available capacity, the amount it requests to carry over, and the amounts other contractors request t carry aver. Contractors may store any amount of carryover up to their allocated share of available storage capacity. Contractors may store carryover in excess of their allocated share of storage as long as capacity is available, as shown below: Assumptions: Contractors request carryover of the amounts indicated in column (b) below. Amount of Request Stored: Requested Allocated Carryover Contractor Carryover Storage Capacity Stored {TAF) (TAF) (TAF) (a) (~) (~) (~) A 100 150 100 R 40 20 40 C 10 20 10 D 10 10 10 Total 160 200 160 In this example, eontr-actor B is allowed zo store water in excess ~f'its allocated share because storage allocated to contractors A and C was unaised, and therefore, available. Attachment 14c CARRYOVER STORAGE Contractor Storage Wjie~t Total Regriests Exceed Capacity If contractor requests for storage exceed the amount of storage available, contractors would initially be limited to their allocated storage capacity. If unused capacity remains available, that unused capacity would be allocated among those contractors requesting storage in excess of their allocated storage capacity in proportion to their annual Table A entitlements, as shown below: Assumptions: Contractors request carryover of the amounts indicated in column (b) below. Amount of Request Stored: Requested Table A Allocated Initial Amount Contractor Carryover Entitlement Storage Capacity Stored (TAF) (TAF) (TAF) (TAF) lA) (h) f~) (d) (e) A 140 750 150 140 40 l00 20 20 C 30 100 20 20 D 10 s0 10 10 Total 220 1000 200 190 Unused Storage Capacity = 10 TAF Unmet Storage % Allocation Allocation of Carryover Contractor Requests Unused Capacity Unused Capacity Stored (TAF) (%} (TAF) (TAF) (Q) (~ (~) (h) (i) A 0 0 0 140 B 20 so s 2s c to so s 2s D 0 0 0 10 Total 30 100 10 200 Attachment 15 tU ~U tL'~ LL ~ ~ O o 0 ~ ~ ~ C~ ~ ~ ~ -~ +-~ ~, ~ ~ ~ ~ '" ~ o o ~- ~ . (~ o - ~ _ ~ as ~s O ~' ~ j ~ N o C ~ ~ - W ~ ~ ~ ~ ~ d ~~.{ ~~.{ ~ ~ . O ~ O ~ ~ ~ z o 0 ~./ 1 U ~ U (~ ~ ~ ~, U ~ U ti ~_ irr ti^+ Z c h u a a G' J .~ L y V C C O F N a O ~- U u u y, . 3 = ° o ~ ~ y J ~.. ~j q O U ~ .7 O U ~ U T O ~ ~ O h 0 _ V U o O e ~ U T L ~ U G G '~J .7 u ,a° C ~ U U u o C b U -. .O. _ ~ ~ • j u u ~ o u -~ ~' ~ u A ~ A ~ V n u Fc ~..~ > c ~ ~ C u ~ o . t u 3 ' u 3 u ` U O '• ?) U ~ • A ~ 3 >, z' -_ _^ 0 0 0 0 0 0 < N N v1 ~ C t% .o e o ~o ~ o o~ 0 0 0 - `O ~ O O ~n ^ o• ['~ ... u - ~ ~ 'r ^ 0 0 0 0 0 0 0 " ~., c o ~., G c .- `< r c c L T p 7•~ d Q U Q ... V um o` `o o` `o ~ c G w V w U A O ~ 00 5 S J u t'^ - c c c c •o 'u U V U U ,Z~ u ~ u ~ ~ r ._ Attachment 16 V'f V V _ G '~ ~, n ~~ C G n U o< V n o d T ~ U U . U C` ~ C ~ G 4 ~ .. - p A C ~ ~ J G - °' - oo Y ~.-~ U G - O t _ _ ~ O 'J _ ~ U U T U ,^- u G V u e 3 O •- u 3 a ` o -- t.. O `...7 ~ G v O o u ou0 U ~ p C ~ u G ' o v S n C 'J- ... ~ n ~ u O T ~'-' u U V ~ O O A n .~ O ~ ..~ -] n O b~ - T ;c O 4 c ~~ ~ U •- o O ~ r n O ~ _ _ ~ _ U u - u A a t~ C G O o > ~C a rn o ~••' `u _ ~ V `n _ u .^ a o c o 0 0 l o 0 o c o a o 0 0 0 0- c_ o o c ~ ~ .--. N v'i C . - .. .--~ N .... n O .~ .--~ N .••. r .-.. N M o0 ~ ~ C N M N M N M N N ^ u ^ ^^^ o c o 0 o G m_ o c o c c o 0 0 o G c c o a o G 4 v N N v ^ o 0 0 0 0 0 o m , 0 o a o 0 0 0 o c o o c 0 0 0 0 0 _ -~ N -- v~ O N r~ N~ r 0 ~u `c F- N N m N A ~ '/7 ._. •m rn u `u " 0 ~+ ~ O G O C O O U ~n v+ ~n vi O O ~n O O ~n O a G z oo e 0 0 o 0 ~j O ~S a N O ~ ' M M ' ~"~ N M M ^' .~ - N N E ~ R ~ C M C `) o ~ ~ r M N M N N ~ _ ~ V N G s ` ` u ~ ~ p U Q U o < p U q V o~~ UJ V o~= U~ U o 0 U Z z ~ Z o vci o m F .~. ~ G o` ~ ~ o a o 0 .U. ~ u o i O ~O r ~O O h N (~• . ~ H ~ G u o m < ~ '- c ~ u { o` O ~ r vY o0 A oG A ou N N U T O .O ~ O .O A C T U ~ o N r ~ u u ~ u ` u ` • u ~ u o v a u o u o c...5 a. .5 c. .c V ~ .- O = - O N M F- ~ Page 1 of 4 Attachment 16 n G { n C '~ p U u U U .J q W n•- u W t O ` O K O V V 7T ~ ~.. 'V A • Y. ~.. • U ~ u C U ... O q ~: U V ~ ~ U .~ q U ~a J- O G O V Y U q O m U ~~ >' U V A O W U V q O W V ` ~ O O F O ,j ~ Y~ V C ~^ •~ U V m ~ n O ^J q O ~ op _ O iv C G r U O V J` • _ - V O n U ~" 4' V V U ~ U y~ ~ V V ~ O U U W V O U 0 • p C G '0 q O ~" L° ~ V _~ U c _ V m ~ . O ' . n V o O q ~' p G ^ O ` ~ u ~• O u U u ' O ~ O a u `~ V ~ •U ~ m 6i C -p ~ O 1. m V .~ ~ u O ~ n R ~ L: •m ~ ~^ p rO~ q U r > ^ 'O G O O p CO 'G G ~n ~ C~ 'G O u O a ~. ~ O 3~ 'C L ~- T O V7 _ ~ O A U ,_ O O O ^ O a O ~O. ~ O C O O O W L u o V ~ ."'•. 7 V ~ 0 0 0 0 O O p yr O v~ O O O R v N C C O c c N O C ~ C __ N^ N N V N f0^! ['~ ^ O M Q M v u p , ~ ~ u m G o 0 0 0 0 0 0 o c o o c v, o o Y+ o o vt ~, ~a ~ r., o c ' o 0 0 0 0 0 ~ A ~ M M v1 00 O Q V J O ~ '~ ~ C o ro t_ o o c o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 " ~r, o o .r-. o 0 o v v N o 0 q 4 N^ ~ ~ "' M N N •-^ N N b -~ N •- O Cam. ^ .-~ O ^ M v m G -° ~ q ~ ~ ~ •m c~ u "~ ` u } O U ~' h N ry N 0 0 0 N~ C O h O O r 0 0 0 v 4 N O O ~ v'+ O O ~ ~ n ry _ O I"~ O °P '~ M v •~ •--• ~ vi U ~ o C ~ H O V U V U V ~ <~ U q cj c< ... U .^, V o< c~ U O v o ¢ ca U C~ u o ¢ ca U q v o O n ~ r r ~ z z z z z O .O ~ q N O N O e}' ~ m G v q 0 y 'O O O O O O ~ ~ `~•~ ~ O m O °' ~O - Q` v1 o0 o to F- G ~ L' -o C:~ C ~ ts, ._ o F u a m oqo~ W ~ u ooh q m° ~ D O ~ ~. .D ~+ O . T' O .G T O L .... O Y. U u ~ u q u °~ u '•O . V w V O ~ . V u y O V U ^` O U • V A V ` O U , V O U q .~ G. .= R. .= C , .C G ` . u u 'a o = 'C ~ a r ~ a c ~ o 0 F G O T _ q b U ~ u O •- ~ O C _ w .~ .u. a0 ~ q q • O ~ -• ~ ~ U ~ ° t u ~ g w T P ... •m c .a 4 u ` A o q H u e o T G. ~ U C `.4 n ^ ~ ~ V ^ ^ u _ _ ; m ~ c S c - ` . o ~ ~ ~ m 3 , _ ~ ~_ l-' v T O q 0 G U a V ~ u q~ u ~ ~ y c W q o c - = '0 a ~ ~ u o C Y o G ~ ~ ~ ~ ~ °c ` ~ u •- ° G S q W pp ~1' G "O c o ~ y c 4 u ~6 o r U V t o >, w ~ ~, C V ^ U C ?O'+ u C V U 4 V r"' u m C r ~ ~ 3 q ~ h 3 ~ u ~ '~ ~ m p ~ q U 'M V ~.S C w ,~ w G ~ ~ m G _ ~'` Wes' U O O U _ •p c~ .. q q ~. -' 7n U 7 q _ q U ((V~~ ~~ •~ q In ` O U ., U y~ G ~, q ~ o X " w A Y U ~ W , U T .O u .e .O N A V C q L V ~ ~ G q V > U q 00 W ~ G ` ° O > q ~° ~ ` q o c, o m - u 'o ~ .S m ~ ~ ~ ~ u: ~a , ^ ~ u ~ ~ ~ w u = G ~ u ° o -' ' o > .~ r L _ r w. t . u T C ~ ~c. 'u u ~ u 0 O 4 Page 2 of 4 Attachment 16 Page 3 of 4 c ~ V °• O V V V u U U p U . . • V A O _. m ~ C U .. t"" q n T O U E ..~. ^ T u ... A O O ~ C G ti U ou0 ? ~ U T a 'O O 00 .,J p l~ '~ ~a o U G 3 = O ~... o o O C + m- A . c~ w q~ > ~ c A t.. U .-' O A ~ y N . C ... O U ~.. R ~ y t U U y 0 ~ = „ V ^' p U ~ ~ •~ ' U q u m ~ - T - u ". ~ O s - O = a • .. ~(,,., ` P < d O_ O c c 3 00 4 c 'r 4 u ~ a ., ~ C u c c o ~ 3 G 3~ O ~ F-' n a u c u V] ~.0. ~ p r _ C u m v . ~ ~ ~ C ~ _ ~ ~ C _. ~ ~. - '~ 00 I.. O C O O O C O O U °u v~ c E o 0 0 0 o c o 5 ~". Q Sri N ~r V 7 C' N U ` O ~D ~p t•n ~ O O p r M c E 0 0 0 0 0 0 0 vi o o v, 0 0 `u ~ h v~ vi U ~~ W T ~.' q U Q W A m o` o` o `o `o < u u u u u o 3 A A A A R p - c ^ ~ v ~ v u z c a - U O C C N 0 0 0 0 C C N 0 0 0 O 4 C CV O O O o~ r o 0 _ m" M 4 -. v-, C ~, v - o ~n v m v -+ o a rn m - o m n ~ _. N ... N .~ .. .:i `p ,_„ N ... oVQ ~ ,^ ^ O O^ ^ O^ = 0 0 0 0 0 0 C O O O O O C C 0 0 0 ... O O ~ v v N h r - ... S ...- v+ .~, v s V ,_^ O C C N O O C C C C N O 0 0 O C C N O O O O v < N O 0 0 U o0 - f'~1 C S C C Yt C M C ^^ O M1 C f't C ~ O p+ - a .~ .... N ... N ... V U ~ :~+ _ ~00 V: V u .... p U ,_^ 0 0 0 0 0 0 0 0 ~D `J m 0 C O ~ r f~ ~ rn O O O N N ~D O O O r, J oD r N N - O N -- ~- m c 0\ bV rh 'n G~ O, V m 4 n R~ '_' M N ti N b n5 U ~ = - ~ ~ :.. `' O V U ~ ~ ~ V ~ - u < b :J G' :: ;~ ~< C7 U t~ W U o G G1 U G~ W U o~ Q U Q W U o ~^ c E- c E' c `-' U 2 Z 2 Z u ~ s o o c o o, o m ~ ' m N .- ; v ~ { 'n ~ ,^_ O O O C u O ~ N y< . r r m m V ~ v o ~ -o _v_ L•. '" _ o m ~ me ~° r m° o a V ~ o -' o A T o` s+ A o ,o w e a E•, O u a V q u ,e u °n ~ u 5 A ~-+ p o u ~ ~~ u ~ o u o u ~ -, 0 4 u C , , ^ G .. G , .5 u •O ~ • O\ O N E"' G Attachment 16 pages a Qf 4 i~ -- V a i 4 .-I C7 .. ~ U a C ~ C U ; _ °~ U ° = C ~> p a O a U C ~ m y C ~ O U V ~ -' N U t C A A a O U< U ("~ w = O U O ~ ~ (J a ~ ~. .~ y o ~ ~~ O V~ u L U c T O U t~ -. U~ G:: 0 3 0 T O U d ~ = U a Cl _`_ o a V w u .Q •o a u O 30 ~ ~ o ~ C O ~U A .' u Y. ~ T V -° a~ A ~J m T= G C ~ C V m 'O 7 a ••• a C U A C ~ A r A ° `3 V G L a a a _~ A -J ~ m V A • w y -O 'C a ~ •~ _ - u a V ., < O a p ~ U O L m U C ee v n a G N ' ~- "~ ~ ~ ~ q lL O v m ~ a m .= a~ `" ~ a w J u 6 .c y u~ _ `o u 'o y u - ~ u ,-, o ° °°G 'r ~ o 'r o °o o ~ o °o 0 0 u ~ CL ~ u ^ ~ O M 4 N P`~ C O O O. D< N ~^'~ O O C c C N 0 o O O O O C ... O C p m C a • M M- u ~ n-i N N c ~ ~ ~ f~i N ~O ~ ~ `o ~ 0o a C:7 ~ o r o o~ o a o~- o t o 0 o a o. o .~, o 0 o c Q N o 0 0 m ~ A< b rn e+~ O h N ~ N N m M N ~. h < 7 u O<? N C O ^_ O f'1 C' N t'~ O C O 0\ a N M C C O C' 'C N C O N ^ O m ~ f+l C+1 O OC n1 f"1 •--~ V' v1 to N N a ~ ~ m ` ` .... '- 00 00 u u o F .~ m :., ~ ~ ~ a = ~ o 'm u C n ~. .",- u o _ ~ h C 0~ 0 0 0 ~~ ~D m C O O ".~ `7 C N C 0 0 0 0 0 0 0 0 0 ' u m G:.. ' ... a < P~ ~ ~ - r ~ Q t'7 U~ fry N ~ U V O O h C p 5 ~ ., 5 u ` 5 < d U ^.J G:W ~ o < ~ U L` G (~ r < C7 U Q W U o < .^^-~ U ~ G ~ H ° F E v z z z z u~ o . 0 0 0 F v . > m < ` _ o Cn u ~ C p 00 ~ u o m a 0\ O L. • ~ ~ :... G 7 u~ 7 u~ 7 u H J u o •- 'p mo a K1 ~a a b ~o a b mo q 10 U u u u u u 'O u '0 ~ u `0 u 16 C, .~ .~ L .~ G. .~ u b •C ~n ..' v +n ~o F~ ~ EXHIBIT B FINDINGS AND MITIGATION MEASURES IMPLEMENTATION OF THE MONTEREY AGREEMENT PRINCIPLES PROJECT DESCRIPTION The Monterey Agreement program consists of implementation, by the contractors to the State Water Project (contractors) and the California Department of Water Resources (DWR), of the principles included in the Monterey Agreement, dated December 1, 1994. Implementation measures include individual projects which include: (1) adoption of certain modifications to the various Water Supply Contracts for the State Water Project {SWP} between the contractors and DWR; (2) performance by DWR and certain contractors of the terms of an agreement whereby the Kern Fan Element (KFE) property will be transferred by DWR to the Kern County Water County, which will immediately transfer the property to the Kern Water Bank Authority, a public agency; and (3} further implementing actions described in mare detail below. The Board of Supervisors' role in implementation is to approve, in its discretion, the amendments (Amendments} to the Water Supply Contract applicable to the County of Butte {County). This approval of the Amendments is the project far your Board. The Monterey Agreement implementation program is described in mare detail in the Final Program Environmental Impact Report, Implementation of the Monterey Aqreement Statement of Principles by the State Water Contractors and the State of California, Department of Water Resources for Potential Amendments to the State Water Supply Contracts (Monterey Aqreement EIR). The Board of Supervisors have read and considered the Monterey Agreement EIR, and, pursuant to the requirements of the California Environmental Quality Act {CEQA), the County hereby adopts the following findings: I. TIERED/PROGRAM ENVIRONMENTAL IMPACT REPORT CEQA, and the Guidelines adopted to implement CEQA, describe the concept of a "program" or "tiered" environmental impact report, whereby a series of environmental documents are prepared for a series of related actions that can be characterized as one large project or complement of projects and are related geographically or as a part of a chain of contemplated actions. The purpose of the program or tiered environmental impact report (EIR) is to ensure complete analysis and disclosure of the environmental impacts of related actions and the cumulative impacts -1- of the whole of those actions, as those impacts are identifiable. CEQA contemplates that the first EIR will disclose the impacts of the general program to the extent they are known. Later documents generally are narrower in scope and more site-specific. The later documents may be either EIRs or Negative Declarations (NDs), or a combination of bath, and will incorporate by reference the discussion of impacts in the prior, general document. Subsequent environmental documents need not re-examine environmental impacts already examined in a prior document within the tiered structure. Public Resources Code sections 21068.5, 21094; CEQA Guidelines section 15168. The Monterey Agreement EIR is the initial program EIR for implementation of the Monterey Agreement Principles. The Monterey Agreement EIR is adequate for the County's approval of the amendment before it. Agencies proposing additional activities consistent with the Monterey Agreement Principles are required by law to determine, first, whether that activity constitutes a project under CEQA, and, second, whether the activity falls within the scope of the Monterey Agreement EIR. A project subject to CEQA that falls outside the scope of the Monterey Agreement EIR will require further environmental review, the magnitude of which cannot presently be ascertained. The Monterey Agreement EIR studies the overall program for implementation of the Monterey Agreement Principles and the ascertainable potential environmental impacts of implementation. This EIR analyzes statewide impacts to the extent they can be identified and predicted and local impacts where site-specific potential changes presently can be ascertained (at the Kern Fan Element, Castaic Lake, and Lake Perris). The Monterey Agreement EIR also analyzes program alternatives and a "no project" alternative, as well as potential cumulative impacts. II. CEC2A FINDINGS A. The Board of Supervisors of the County hereby finds and certifies: The Board of Supervisors considers the Monterey Agreement EIR to be adequate under CEQA for the County's approval of the Amendments; and, 2. The Board of Supervisors has reviewed and considered the information within the Monterey Agreement EIR prior to approving the Amendments; and, 3. The Monterey Agreement EIR reflects the Board of Supervisors' independent judgment; and, 4. The Board of Supervisors has determined to approve the Amendments with the mitigation measures described below; and, -~- 5. No further mitigation measures beyond those described below are necessary and appropriate for the County"s adoption. B. CEQA requires analysis not only of direct or primary environmental impacts, but also of indirect or secondary impacts that may be caused by the project or program and are later in time or are further removed in distance, but are reasonably foreseeable. The Monterey Agreement EIR analyzes both direct and indirect environmental impacts from implementation of the Monterey Agreement Principles, to the extent these impacts are reasonably foreseeable and presently ascertainable. The EIR acknowledges that future projects implementing the program may give rise to environmental impacts that presently cannot be quantified and analyzed. Under a program EIR such as this, these impacts can be analyzed in later, site-specific environmental documents when "projects" as defined in CEQA are proposed. C. The Monterey Agreement EIR also includes an analysis of the potential cumulative impacts that may arise from projects undertaken as part of the program and from other potential projects and programs that could occur at the same time the program is being implemented or the same geographical area. D. CEQA requires the evaluation of reasonable and feasible alternatives to the project or program, as well as evaluation of the environmental impacts which would result if the project or program were not implemented {the "No Project" alternative}. The Monterey Agreement EIR analyzes the "No Project" alternative as well as scenarios that could occur under the program, and alternatives that might be implemented in lieu of the Monterey Agreement Principles. E. The project before the County is limited to approval of the Amendments. This approval includes the condition that the County adopts the mitigation measure described below that is within the County's jurisdiction. Changes and alterations have been suggested in the Monterey Agreement EIR for incorporation into future construction and operations of facilities under the program where feasible. These changes and alterations are not within the County's jurisdiction. As responsible agencies under the Monterey Agreement Principles implementation program, DWR and the contractors will be required to adopt a mitigation and monitoring program far those portions of the program within their respective jurisdictions. The changes and alterations not adopted by the County are within the jurisdiction of other public agencies subject to CEQA. It is too early in the program to make more specific recommendations for mitigation, but it is expected that future environmental documents will include more specific recommendations for mitigation measures that address local and site-specific environmental impacts, and that the agencies responsible for the projects for which the future environmental documents are prepared will adopt appropriate mitigation monitoring programs. The mitigation monitoring program incorporates the most specific information now available and the principles upon which mitigation will be based. The Monterey Agreement EIR has been prepared based upon -3- the premise that the earlier in the process environmental review occurs, the more likely significant environmental impacts can be reduced or avoided. F. Formulation of mitigation measures that are more precise than those included in these findings and in the mitigation monitoring program is infeasible and impractical at this time. G. Although the program has potential for adverse environmental impacts, the program benefits, described below, outweigh these adverse impacts. H. The proposed project and the program of which it is a part provide and promote a safe and reliable water source to the users and customers of the individual purveyors who are members of the County, or have water supply agreements with the County, for a number of reasons, including the following: Retirement of 45,000 acre feet of SWP entitlement reduces the total stress on a system that has encountered difficulty meeting current demand. 2. The availability for permanent transfer of 130,000 acre feet of entitlement affords to urban contractors such as the County the opportunity to obtain additional water deliveries from the SWP. 3. Replacement of existing categories of surplus, wet weather, and make-up water with the interruptible water program allows urban contractors such as the County the same priority to the water available under this program as agricultural contractors. 4. Replacement of existing categories of surplus, wet weather, and make-up water with the interruptible water program simplifies the allocation procedure. 5. Replacement of existing categories of surplus, wet weather, and make-up water with the interruptible water program results in elimination of substantial deficits in the make-up water category and resolves potential disputes among contractors regarding the allocation of make-up water. 6. It avoids litigation by providing allocations based on entitlement. 7. It improves water supply reliability by increasing water management flexibility as a result of storage outside a contractor's service area, carryover storage, transportation of non- project water and use of terminal reservoirs. -4- 8. It provides economic benefits in that it allocates substantial rate reductions to all contractors beginning in 1997. I. The County finds and determines that the requirements of CEQA have been satisfied for the County's approval of this project. lll. CEQA FINDINGS RE ALTERNATIVES The Monterey Agreement EIR considers alternatives to implementation of the Monterey Agreement Principles. In addition, certain commenters to the EIR suggested that implementation of Article 18(b) of the existing water supply contracts constitute an alternative to implementation of the Monterey Agreement Principles. The County finds that said alternatives, individually and cumulatively, do not meet the following major objectives of the program: To increase the reliability of existing water supplies for bath urban and agricultural contractors; and, 2. To stabilize the rate structure to improve the financial viability of the State Water Project for all contractors; and, 3. To increase water management flexibility (including but not limited to transfers) for all contractors. For that reason, these alternatives do not, individually or cumulatively, provide an acceptable alternative to the program: No Project -- no change would be made in SWP water allocations, agricultural contractors would continue to endure initial reductions in supplies in certain deficit years, no change would occur in the current categories and in allocations of surplus, wet weather, and make-up water, the 45,000 acre feet of entitlement would not be retired, the 130,000 acre feet of entitlement would not be committed for availability for transfer, the KFE land would not be transferred to the Kern Caunty Water County, then the Kern Water Bank Authority far local use and management, and the terminal reservoirs would continue to be operated by DWR without being available to contractors for conjunctive use with their other facilities. With this alternative, the contractors would continue to be dissatisfied with the operation of the SWP and with disputed interpretations of the Water Supply Contracts. Under this alternative, potential impacts of the program would be avoided, but the benefits of a carefully negotiated program that benefits all -5- contractors would be lost. For this reason, the No Project alternative is rejected. 2. Litigation -- under this alternative, one or more contractors would sue DWR and possibly other contractors to obtain a court interpretation of their respective rights and obligations under the existing Water Supply Contracts far the SWP. Litigation is expensive, time-consuming, and the outcome uncertain. For this reason, this alternative is rejected. 3. Transfers of Entitlement and Sales of Water by Water Purveyors in the Northern Portions of the State to Purveyors in the Southern Portions of the State -- this alternative would include individual transfers by unidentified holders of water entitlements, water rights, and water supplies who feel they have excess water to sell on a short-term or long-term basis to unidentified Southern and Central California purveyors. Depending upon how widespread these transfers might be, they could be an alternative cumulatively that would meet the first and third objectives of the program as listed above. Because the contractors have expressed a willingness to implement the Monterey Agreement only if its principles are integrated and the entire program is implemented as a whole, this alternative is rejected. 4. Increase Water Extractions from the Delta -- this alternative could occur only if existing environmental constraints on extractions from the Delta were reduced or eliminated. Based on current information and the current legislative and regulatory controls on Delta extractions to address environmental concerns, this alternative is unlikely to be available in the foreseeable future to meet all program objectives. For this reason, this alternative is rejected. 5. Construct More Water Projects -- to increase the reliability of water supplies and to increase water management flexibility (the first and third program objectives), an aggressive program of constructing new water facilities could be undertaken. The cost and potential environmental impacts of such a program cannot presently be determined, but they are expected to be substantial. Present financial and environmental constraints make it infeasible to implement such a program in as timely a manner as the Monterey Agreement can be implemented. For this reason, this alternative is rejected. -6- 6. Provide Alternative Funding for the State Water Project or As a Partial Subsidy -- this alternative would involve commitment from the State of California of additional capital from same source other than the SWP contractors and ratepayers. This alternative would satisfy the second program objective but because of ongoing revenue shortfalls and economic problems being experienced by the State of California, this alternative is not considered feasible. For this reason, this alternative is rejected. 7. Implement Article 18(b) -- the key provisions of Article 18(b) state that in the event that the State is unable to construct sufficient additional facilities, or if far any other reason, such that the minimum project yield is reduced resulting in a permanent shortage, the annual entitlements and maximum annual entitlements of all contractors will be reduced proportionately so the sum of revised entitlements equals the reduced minimum project yield. Implementing Article 18(b) would not avoid litigation and other disputes among the contractors and would not accomplish any of the major program objectives listed above. For this reason, this alternative is rejected. IV. CEQA FINDINGS RE CUMULATIVE IMPACTS A. Because of the programmatic nature of the Monterey Agreement EIR, detailed cumulative impact analysis of implementation of the Monterey Agreement Principles is difficult and requires speculation. Ordinarily, a cumulative impacts analysis involves a discussion of the anticipated impacts of the program together with other projects and programs that are expected to occur at the same time or in the same geographical region, and other future projects related to or part of the program. The Monterey Agreement EIR analyzes, to the extent feasible given the information presently at hand, potential program impacts that may cumulatively influence other water management actions in California. B. The elements of the Monterey Agreement implementation that are expected to have some cumulative impacts on other water management actions are: 1. Retirement of 45,000 Acre Feet of Agricultural Entitlement -- the EIR identifies the Kern County Water County member units expected to relinquish entitlement and states that no projects with similar impacts (reduction of irrigated cropland) have been sufficiently identified to conduct a cumulative impacts analysis. The EIR also concludes that the relinquishment is not expected to have a significant impact (positive or negative) on natural systems. -7- 2. Sale of 130,000 Acre Feet of Entitlement by Agricultural Contractors to Urban Contractors and Non-Contractors -- the EIR states that the water agencies that would relinquish entitlement in order to accomplish these transfers have not been identified. Willing transferees also have not yet been identified. No projects with similar impacts (reduction of irrigated cropland) are known or proposed in the Kern County Water County vicinity. 3. Transfer of the KFE Property from DWR to Kern County Water County -- the presently proposed transferee is the Kern County Water County, which proposes immediately to transfer the KFE Property to the Kern Water Bank Authority, a public agency. The Monterey Agreement EIR states that development of spreading ponds and other groundwater recharge facilities on the KFE property cumulatively would add to other development on and in the vicinity of the KFE property. None of these plans have been formulated and it is anticipated that future projects that could have an impact on sensitive species will involve preparation of a habitat and species conservation plan. Because this County's approval of the Amendments is part of the Monterey Agreement implementation program, the EIR-suggested mitigation measures for site-specific impacts on the KFE property are incorporated into the County's approval of the project under the County's jurisdiction. These mitigation measures would be equally applicable to the cumulative impacts, if any, of any future project on the KFE. 4. Modification of Operation of Terminal Reservoirs -- the MWD Domenigoni Reservoir in Southern California is presently under construction and has a potential far beneficial impacts to regional recreational and biological resources and a potential for adverse impacts to cultural resources. These will be cumulative with any similar impacts of the change in operation of Lake Perris and Castaic Lake, both of which lie within 100 miles of Domenigoni Reservoir. Site-specific cultural and biological impacts at Domenigoni Reservoir are being mitigated through the environmental process associated with approval of that project. Domenigoni Reservoir has the potential to offset some of the potentially adverse impacts to biological and recreational resources associated with modification in the operation of Lake Perris and Castaic Lake. Domenigoni Reservoir, when completed, will be the largest body of freshwater in Southern California and will offer boating, fishing, sailing, trails for equestrian, hiking, and bicycling, swimming, camping, picnicking, and waterfowl habitat. The cumulative impacts of the change in operation of the terminal reservoirs, especially taking into consideration the construction -g- and operation of Domenigoni Reservoir, are not considered to be potentially significant. C. As noted in the Monterey Agreement EIR, the Berrenda Mesa Water District (BMWD) negotiated and agreed, prior to the Monterey Agreement being executed, to transfer up to 8500 AF of BMWD's entitlement to the Dublin San Ramon Services District {DSRSD). Anew Draft EIR has just been circulated, analyzing the impacts of a potential transfer of 7,000 AF of BMWD's entitlement to DSRSD, with a 15- year right of first refusal for DSRSD to acquire an additional 5,000 AF of entitlement. The Draft EIR also analyzes the impacts of a potential program whereby BMWD would transfer up to 75,000 AF of entitlement in the future to unidentified entities. Notwithstanding the statement in this Draft EIR that the BMWD transfers analyzed would comply with the Monterey Agreement Principles and would be part of the 130,000 AF that agricultural contractors have committed to make available for transfer under the Monterey Agreement, the transfer proposal analyzed in this Draft EIR is preliminary and its outcome purely speculative. Any such transfer would require the approval of the Kern County Water County and the Department of Water Resources. This Draft EIR has been published so recently that it has not yet had public input. If any such transfer is to be included in the 130,000 AF of entitlement referenced in the Monterey Agreement, the transfer could not be accomplished unless and until the Monterey Agreement has been implemented. Only after the Monterey Agreement has been implemented would the parties to the Monterey Agreement be called upon to resolve among themselves whether or not any proposed BMWD transfer would be considered to be part of the 130,000 AF included in the Monterey Agreement. If any proposed BMWD transfer occurs in the future, it may occur concurrently with projects implementing the Monterey Agreement Principles. If so, the impacts of the proposed BMWD transfer will be cumulative with the impacts of the program. Mitigation of any such impacts will be the responsibility of the participating agencies and are outside the County's jurisdiction. If any proposed BMWD transfer occurs under the Monterey Agreement, the Draft Berrenda Mesa EIR is typical of the kind of further environmental analysis contemplated by the Monterey Agreement EIR. The impacts of any of the potential transfers discussed in this Draft EIR are consistent with the analysis of impacts in the Monterey Agreement EIR. V. MITIGATION MEASURES The project approved by the County includes the following mitigation measures recommended by the Monterey Agreement EIR: A. Principle 12 Public Controversy Mitigation Measure: Although Principle 12 of the Monterey Agreement is simply a reaffirmation of DWR's existing contractual obligation to make all reasonable efforts to complete the SWP, the inclusion of Principle 12 in the Monterey -9- Agreement implementation program has engendered substantial public comment. Inclusion of this Principle, because it makes na substantive change in existing water supply contracts, has no environmental impacts. To eliminate the public concern, the County approves the Amendments without the inclusion of any provision that implements Monterey Agreement Principle 12. This mitigation measure is not intended to reduce potentially significant environmental impacts to a less than significant level because the EIR acknowledges that inclusion of Principle 12 merely re-affirms DWR's existing contractual obligations and identifies no potentially significant environmental impacts arising out of or resulting from inclusion of Principle 12 in the contract modifications. By deleting Principle 12 from the contract amendments, DWR and the contractors will make no change to DWR's existing contractual obligation to complete the SWP. The County considers it appropriate to mitigate substantial public controversy when it is feasible to do so without jeopardizing the objectives of the County's project and the Monterey Agreement implementation program. For this reason, the County adopts the mitigation measure. B. Statewide Mitigation Measures: In the absence of presently ascertainable significant adverse statewide environmental impacts, no mitigation measures are proposed. Projects proposed in the future resulting from implementation of the Monterey Agreement that have potentially significant regional or local environmental consequences should be evaluated in appropriate environmental documents and feasible mitigation measures adopted to minimize or avoid such impacts. C. Site-specific Biological Mitigation Measures: The project approved by the County includes no specific modifications to the biological resources at the KFE property. The Monterey Agreement EIR identifies certain site-specific potentially adverse biological impacts that could occur on the KFE property with implementation of the Monterey Agreement implementation program. In the absence of specific project plans for the KFE, the project as approved by the County includes a suggestion that those responsible far future design and construction of spreading basins and new facilities on the KFE consider including the following biological mitigation measures included in the Monterey Agreement EIR, to the extent they are feasible and appropriate to the facilities proposed, in their project(s) to reduce or avoid these impacts. These are suggestions only and may be replaced with mitigation measures tailored to a specific project, fallowing consultation with governmental wildlife agencies, as appropriate: 1. Prior to construction of spreading basins and new facilities, surveys of the proposed impacted area for sensitive species will be conducted as may be required. To the extent feasible, locate, -10- design and construct facilities in a manner that avoids significant adverse impacts to sensitive species. To the extent avoidance is infeasible, mitigate impacts with other mitigation measures. 2. Where on-site mitigation is infeasible, off-site mitigation should be considered, selecting lands that will provide suitable habitat for the impacted species. 3. Design spreading (ponding) and extraction facilities to provide, to the extent feasible and without interfering with the project objectives, habitat for wildlife both when inundated and when dry. For example, design berms to conform to the natural setting and revegetate with native plants (where the plants are likely to succeed and will not be outcompeted by exotics already existing in the vicinity). In this way, the loss of habitat can be minimized. The native and other vegetation will provide habitat and a food source for the Tipton kangaroo rat as well as for rabbits, ground squirrels, lizards and insects, comprising a food source for the San Joaquin kit fox and the blunt-nosed leopard lizard. Tipton kangaroo rats, if they use these areas at all, would likely use the upper portions of the berms for burrows rather than the basin areas where repeated flooding will occur, thus minimizing potential conflicts between kangaroo rats and the recharge operations. The presence of sensitive species in ponding-recharging basins should not be a basis for precluding use and maintenance of the basins. D. Site-specific Cultural Resources Mitigation Measures: The project approved by the County includes no specific modifications to cultural resources at the KFE property. The Monterey Agreement EIR identifies certain site-specific potentially adverse impacts to cultural resources that could occur on the KFE property with implementation of the Monterey Agreement program. In the absence of specific project plans for the KFE, the project as approved by the County includes a suggestion that those responsible for future design and construction of spreading basins and new facilities on the KFE consider including the following mitigation measures included in the Monterey Agreement EIR, to the extent they are feasible and appropriate to the facilities proposed, in their project(s) to reduce or avoid these impacts. These are suggestions only and may be replaced with mitigation measures tailored to a specific project, as appropriate: 1. All proposed areas of ground disturbances including filling and grading on lands not previously disturbed in the KFE area shall be surveyed by an archaeologist qualified under State Historic Preservation Office (SHPO) guidelines. Native American representatives also desire to be included -11- in the survey. If archaeological materials are identified, they shall be recorded consistent with SHPO guidelines. Project plans shall be designed to the maximum extent feasible to avoid resources, establishing an 80-foot buffer between the resource and disturbance activities. The archaeological site boundary shall be fenced during construction to ensure that no construction equipment accidentally encroaches within the resource. 2. If cultural resources cannot be avoided by redesign, a significance assessment excavation shall be performed consistent with SHPO guidelines. If the site is determined to be significant pursuant to CEQA Appendix K criteria, a mitigation data recovery program shall be performed consistent with SHPO guidelines. All recovered artifacts shall be curated in a SHPO-qualified facility within the KFE project area. The Monterey Agreement identified potentially adverse impacts to cultural resources in the event that operational changes at the terminal reservoirs result in maximum drawdown of water levels for several consecutive years. In the event this prolonged maximum drawdown occurs at a terminal reservoir, the County suggests that the following mitigation measure (or its equivalent tailored to the circumstances prevailing at the time) be implemented to reduce ar avoid these impacts: During times of prolonged maximum drawdown of the reservoir storage, previously uninvestigated areas exposed within Castaic Lake and Perris Lake as a result of the prolonged maximum drawdown shall be systematically surveyed by a qualified archaeologist consistent with SHPO guidelines. All cultural resources identified as a part of this investigation and all previously recorded sites shall be stabilized and protected from wave action. The sites shall be covered with protective covering such as a filter fabric. Placement of the covering shall be supervised by an archaeologist and a Native American monitor. An erasion control treatment plan and monitoring program shall be prepared by engineers and reviewed and approved by a qualified archaeologist and Native Americans to ensure that cultural resources are not disturbed during anchoring of the fabric filter. E. Site-specific Land Use Mitigation Measures for Adverse But Less Than Significant Impacts: In the absence of presently ascertainable potentially significant land use impacts, no mitigation measures are proposed. -12- F. Site-specific Recreational Mitigation Measures for Adverse But Less Than Significant Impacts: 1. The Monterey Agreement EIR identified the potential for adverse but less than significant impacts to recreational opportunities at Lake Perris and Castaic Lake if prolonged maximum drawdown of water levels occurs. To mitigate these potential impacts, the County suggests that water storage be maximized to the extent feasible during peak recreation use periods, especially the summer months. 2. The Monterey Agreement EIR identified potentially changes in operations at Lake Perris and Castaic Lake which may result in more variations in annual operations from year to year. To mitigate these impacts, the County suggests that when annual reservoir drawdown schedules are being developed and if changes in drawdown schedules are made during the year, input from officials at Lake Perris and Castaic Lake Recreation Areas be considered so ongoing planning and management of the recreational facilities can be coordinated with reservoir operations. Once schedules are known, recreation area operators should be notified as soon as possible in order to maximum management efforts. G. Site-specific Human Health Mitigation Measures for Adverse But Less than Significant Impacts: 1. The Monterey Agreement EIR identified the potential far workers at the KFE property {assuming that construction project(s) far spreading ponds and/or other facilities occur in the future) to be exposed to San Joaquin valley fever. To reduce or avoid this impact, the County suggests that all construction contracts far future projects on the KFE property specify the potential risk of contracting valley fever. Construction workers should be advised of the potential risk prior to employment. 2. The Monterey Agreement EIR also identified the potential that use of the KFE lands for groundwater recharge could cause mosquito-associated problems by creating more habitat far mosquito larvae. Ta reduce or avoid this impact, the County suggests that any future project involving creation of areas of standing or slowly moving water include -13- mosquito abatement measures and consultation with the local mosquito abatement district. H. Site-specific impacts to geology and soils, water resources, air quality, and socioeconomics: In the absence of presently ascertainable potentially significant impacts to geology and sails, water resources, air quality, and socioeconomics, no mitigation measures are proposed. VI. CEQA FINDING UNDER PUBLIC RESOURCES CODE SECTION 21081 The County finds that changes or alterations have been incorporated into the project as approved by the County to mitigate or avoid the substantial public controversy created by Principle 12 of the Monterey Agreement. There are na potentially significant environmental impacts of the program that fall within the County's jurisdiction. DWR and the SWP contractors each will review the documents implementing the Monterey Agreement Principles and will rely upon the Monterey Agreement EIR in their review process. The Monterey Agreement EIR includes several mitigation measures that are outside the County's jurisdiction to implement, but that fall within the responsibility and jurisdiction of DWR and certain SWP contractors. DWR and these SWP contractors are all responsible agencies. For example, mitigation measures applicable to future projects an the KFE property are within the responsibility and jurisdiction of the Kern Water Bank Authority, which is a public agency subject to CEQA. The changes in terminal reservoir operation, to the extent they may be subject to CEQA, fall within the responsibility and jurisdiction of DWR, The Metropolitan Water District of Southern California, Castaic Lake Water County and the Ventura County Flood Control and Water Conservation District, all of which are public agencies. -14- U hMM~ Y~ t~ X ^~ ~. ~~ 4 r r'1 \.- ~..• rt "+v ~Nr rr ~ .~ c ;, :,: -- .:~ ~_ ~~ ^. ~~ w~ ~~1 f~ ~\ ~./ ~~ ~r\ ~\ ~.. '~±. C ~_` ~~ '~ ~~ ~- z ~a ~~ {~ C L:; ~.. ;+.. 'ti. 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