Exhibit A Agreement for Interim Water System Connection and Water Delivery Between the City of Los Angeles, Acting by and Through the Los Angeles Department of Water and Power and the City of Burbank Agreement is entered into by and between the City of Los Angeles, by and through the Los Angeles Department of Water and Power ( LADWP ), on the one hand, and the City of Burbank ( BWP ), on the other. LADWP and BWP are hereinafter referred to individually as a Party and collectively as Parties. RECITALS Agreement is made with reference to the following facts: A. The City of Burbank and LADWP have the right to store and extract groundwater in the San Fernando Basin pursuant to the judgment entered in City of Los Angeles v. City of San Fernando, et al. (Los Angeles Superior Court Case Number 650079, hereinafter the Water Rights Judgment ). B. Nothing contained in this Agreement is intended to modify, alter, or adversely affect the Parties respective rights under the Water Rights Judgment. C. LADWP has been unable to fully produce its annual entitlement to groundwater from the San Fernando Basin due to groundwater contamination, which has impaired and restricted the use of many of LADWP s groundwater production wells. D. BWP treats groundwater from the San Fernando Basin at its Burbank Operable Unit ( BOU ) and blends it with treated surface water it purchases from the Metropolitan Water District of Southern California ( MWD ) to comply with federal, state, and local laws and regulations concerning water quality. E. Based on current production and demand patterns, BWP has the treatment capacity in the BOU to pump and remediate additional groundwater. F. The Parties believe they would benefit from BWP optimizing the use of the BOU, maximizing the mass removal of contaminants from the San Fernando Basin, and delivering additional treated groundwater to LADWP. G. The Parties thus desire to construct and operate an interim water system connection (the Interim Connection ) to allow BWP to deliver treated groundwater from the BOU to LADWP s existing River Supply Conduit ( RSC ).
H. MWD will consider groundwater delivered to LADWP pursuant to this Agreement as additional local supplies developed and produced by LADWP under the Los Angeles entitlements, as part of LADWP s drought response. AGREEMENT NOW, THEREFORE, the Parties mutually agree as follows: 1. Design, Construction, and Replacement of the Interim Connection A. Parties will construct the Interim Connection between their water supply systems at Hollywood Way and Clark Ave, in the City of Burbank, County of Los Angeles, State of California. The Interim Connection shall consist of a pipeline between the Parties water systems along with the appropriate appurtenances for control, operation, and metering. B. Draft engineering design drawings for the Interim Connection are attached hereto and incorporated herein as Exhibits A and B. Within 150 days of the execution of this Agreement, the Parties shall agree upon and approve a final design for the Interim Connection. The final design shall include LADWP s construction conditions, attached hereto and incorporated herein as Exhibit C. BWP, and all of its officers, agents, employees, contactors, and subcontractors of any tier, shall comply with LADWP s construction conditions when performing construction, operation, maintenance, decommissioning, or other activities in LADWP s transmission line rights of way. If the Parties are unable to agree upon a final design, either Party may terminate the Agreement pursuant to Section 5. C. Parties intend to complete the Interim Connection within one year of the Parties approving the final design. Following the Parties approval of a final design, each Party shall seek to obtain all necessary permits and regulatory approvals to construct its respective portion of the Interim Connection within that time period. Upon receiving all necessary permits and approvals, BWP shall construct its piping, valves, and appurtenances up to the point of connection, capping its pipe with a temporary blank, and LADWP shall construct its piping, valves, and appurtenances up to the point of connection, then remove BWP s blank and connect the two water systems. Each Party shall notify the other in writing when the construction of its portion of the Interim Connection is complete. D. LADWP will reimburse BWP for any and all commercially reasonable direct and indirect costs that BWP has incurred, or hereinafter incurs, for design and construction of the BWP-installed portion of the Interim Connection; provided, however, that (i) the total reimbursable design and construction costs shall not exceed $308,000; and (ii) if LADWP 2
terminates this Agreement pursuant to Section 5.A prior to the completion of the design or construction of the BWP-installed portion of the Interim Connection, LADWP shall only be required to reimburse BWP for the commercially reasonable design and construction that BWP incurred prior to LADWP s delivery of the termination notice. BWP shall submit all design and construction invoices to LADWP for payment within 90 days of completing construction of its portion of the Interim Connection. E. Each Party shall retain ownership of and legal responsibility for the operation, use, maintenance, and removal of its respective portion of the Interim Connection. F. To facilitate the purposes of this Agreement, BWP authorizes use of its BWP B-5 Connection for delivery of surface water from MWD to LADWP. G. Parties anticipate that LADWP will replace RSC with a new water transmission system by the year 2021, requiring that the Interim Connection be removed from service. Parties shall make reasonable efforts to reach an agreement on the design, construction, and operation of a replacement connection in or around the same location; however, the Parties failure to reach an agreement on a replacement connection shall not constitute a breach of this Agreement. 2. Operation and Maintenance of the Interim Connection A. BWP shall use the Interim Connection to deliver blended groundwater to LADWP that meets all legal and regulatory requirements, as set forth in Section 4. B. BWP shall set the flow rate of the water delivered through the Interim Connection. The volume and flow rate of water that BWP delivers to LADWP may not be constant and may change as required to meet BWP s operational needs and system demands. C. BWP shall deliver a minimum of 500 acre-feet ( AF ) of blended groundwater to LADWP through the Interim Connection each Water Year (October 1 to September 30) for the first five Water Years of operation. Parties shall agree on water deliveries on a rolling basis. No water delivery shall be initiated absent mutual agreement. If a Party is unable to deliver or receive water for any period of time, or if its operational needs require closing the Interim Connection, the Party shall notify the other Party as soon as practicable by phone and shall provide a confirmation email within 24 hours thereafter. D. The Interim Connection shall have two flow meters one on LADWP s portion of the system and the other on BWP s portion of the system. 3
Parties may calibrate their respective flow meters at intervals of not more than once per year. BWP shall record its meter readings at regular monthly intervals, and shall report its meter readings to LADWP on each invoice. At its sole discretion, LADWP may record its meter readings at annual, quarterly, or monthly intervals. LADWP may, but is not required to, use its meter readings to confirm the invoiced volumes. If a disparity in meter readings occurs, the Parties shall verify accuracy of their respective meters through calibration within a period of 90 days of the disparity. Each Party shall bear its own calibration costs. Invoicing errors created by meter inaccuracies shall be corrected in subsequent invoices through credit or debit within 60 days of the final calibration of both meters. 3. Billing and Accounting A. BWP shall account for water deliveries on a monthly basis. BWP shall provide LADWP the following information for each accounting period in the form depicted in Exhibit D, attached hereto and incorporated herein: 1) (D1): Total AF of water delivered to LADWP with documented BWP meter readings. 2) (D2): Total AF of surface water delivered from the MWD B5 Connection and into BWP Valley Pumping Plant Blending Facility. 3) (D3): Total AF of groundwater water treated through the BOU and conveyed into the Valley Pumping Plant Blending Facility. 4) (D4): Calculated blend ratio of surface water to treated groundwater, (D2) {(D2) + (D3)}. 5) (D5): Calculated AF of surface water delivered to LADWP, (D1) x (D4). 6) (D6): Calculated AF of groundwater delivered to LADWP, (D1) (D5). 7) (D7): BWP operations and maintenance ( O&M ) billing rate (unit cost per AF) for its delivery of blended groundwater to LADWP. O&M costs shall include: disinfection, booster pumping electricity usage, materials, equipment, labor, adjustments to the MWD Capacity Surcharge reasonably attributable to BWP s performance under this Agreement, and other actual commercially reasonable costs incurred. 8) (D8): Total O&M costs for groundwater delivery to LADWP, (D6) x (D7). B. Not later than April 1 each year, BWP shall provide LADWP, in writing, an estimated O&M billing rate (D7) for the next fiscal year (July 1 to June 30). For the BWP fiscal year beginning on July 1, 2015, BWP estimates its O&M billing rate will be $81.37 per AF. At the end of each fiscal year, BWP shall reconcile the actual O&M costs with the actual reimbursements and provide a statement to LADWP to credit or debit the difference. BWP 4
shall retain the appropriate documentation that substantiates each O&M billing rate (D7) and actual O&M costs incurred each year (D8) for a period of not less than five years and provide the documentation to LADWP upon request for auditing purposes. C. To facilitate direct billing from MWD to LADWP, BWP shall include the following statement on each invoice: The treated surface water delivered to LADWP, (D5), is a pass-through from MWD via BWP. LADWP will be invoiced by MWD directly for its purchase of this treated surface water and remit payment to MWD for the cost thereof. D. LADWP shall use commercially reasonable efforts to pay each and every BWP invoice that meets the requirements set forth in Section 3.A within 45 days of receipt. If LADWP determines that an invoice does not meet the requirements, it shall notify BWP in writing. BWP shall promptly respond or provide a corrected invoice. Parties shall use commercially reasonable efforts to resolve any and all invoice disputes within 14 days of LADWP s receipt of the original invoice. E. On the first business day of each month, BWP shall provide LADWP the calculated AF delivery of surface water (D5) and of groundwater (D6) for the prior month. By the third business day of each month, LADWP shall provide MWD with certification of the delivery of surface water it has purchased and received from the B-5 connection. LADWP certification shall be in the form depicted in Exhibit E, attached hereto and incorporated herein. F. After the close of each Water Year ending September 30, LADWP shall provide the Upper Los Angeles River Area (ULARA) Watermaster written notice authorizing the ULARA Watermaster to debit Los Angeles groundwater account for the groundwater that BWP physically delivered to LADWP through the Interim Connection during that Water Year. Debits from the San Fernando Basin groundwater account pursuant to this Agreement shall not be deemed to be a permanent reduction of the City of Los Angeles water rights under the Water Rights Judgment, but shall only be an accounting for the utilization of its right to pump certain amounts of water in accordance with the Water Rights Judgment. 4. Compliance with Applicable Law A. Groundwater in the San Fernando Basin is known to the Parties to contain elevated levels of volatile organic compounds, metals, nitrates, and other contaminants. BWP covenants and agrees that, in performing this Agreement, it shall comply with all applicable federal, state, and local law, ordinances, and regulations, including Title 22 of California Code of Regulations drinking water quality standards. BWP shall not knowingly 5
deliver any water to LADWP that exceeds (1) a notification level for any monitored constituent; (2) 80 percent of the maximum contaminant level ( MCL ) for any primary water quality standard; or (3) the MCL for any secondary water quality standard. Parties acknowledge that the applicable rules and regulations governing drinking water may change and future changes may be applicable to BWP and thus, to LADWP. If at any time, water quality sampling results show that water delivered by BWP is out of compliance, BWP shall take immediate action to discontinue the service to LADWP until the delivered water meets specified regulatory limits. B. BWP shall provide LADWP with a quarterly water quality report for the water it has delivered to LADWP consistent with the monthly reporting to the Division of Drinking Water that complies with the requirements of the BWP Water Supply Permit, its amendments, and the EPA Consent Decree. 5. Termination A. This Agreement shall become effective upon both Parties authorized representatives approving and signing it. This Agreement shall remain in effect until June 30, 2025, or, if earlier, 90 days after either Party s removal of the Interim Connection from service. Either Party may terminate this Agreement sooner for any reason or no reason at all by providing 20 days prior written notice. B. All water delivery transactions scheduled prior to a Party providing written notice of termination shall be completed as soon as practicable. Within 45 days of the later of (1) a Party s delivery of a written notice of termination to the other Party, or (2) BWP s final water delivery, BWP shall provide a final invoice to LADWP containing the information required by Section 3.A above. Parties shall reconcile the final invoice in accordance with Section 3.D above. C. Sections 1.D, 1.E, 3, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15 shall survive termination of this Agreement. 6. Indemnity A. LADWP undertakes and agrees to indemnify and hold harmless BWP, and all of BWP s officers and employees, and, at the option of BWP, defend BWP, and any and all of its Boards, officers, agents, representatives, employees, assigns, and successors in interest, from and against any and all suits and causes of action, claims, charges, damages, demands, judgments, civil fines and penalties, or losses of any kind or nature whatsoever for death, bodily injury or personal injury to any person, including LADWP's employees and agents, or damage or destruction to 6
any property of either Party or third persons, to the extent caused by the negligence or willful misconduct incident to the performance of this Agreement on the part of LADWP, or LADWP s officers, agents, employees, or subcontractors of any tier, except for the negligence or willful misconduct of BWP, its Board, officers, agents, representatives, or employees. B. BWP undertakes and agrees to indemnify and hold harmless the City of Los Angeles, LADWP, the Board of Water and Power Commissioners, and all of their officers and employees, and, at the option of the City of Los Angeles, LADWP, or the Board of Water and Power Commissioners, defend the City of Los Angeles and/or LADWP, and any and all of their Boards, officers, agents, representatives, employees, assigns, and successors in interest, from and against any and all suits and causes of action, claims, charges, damages, demands, judgments, civil fines and penalties, or losses of any kind or nature whatsoever for death, bodily injury or personal injury to any person, including BWP s employees and agents, or damage or destruction to any property of either Party or third persons, to the extent caused by the negligence or willful misconduct incident to the performance of this Agreement on the part of the BWP, or BWP's officers, agents, employees, or subcontractors of any tier, except for the negligence or willful misconduct of LADWP, its Board, officers, agents, representatives, or employees. 7. Entire Agreement This Agreement represents the entire integrated Agreement between the Parties, and supersedes all prior negotiations, representations or agreements, either written or oral. No amendment or waiver of any provision of the Agreement nor consent to any departure by a Party therefrom, shall in any event be effective unless the same shall be in writing and signed by each Party hereto, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. 8. Notice Any notice, demand, or request directed to LADWP shall be delivered to: Mr. David R. Pettijohn Director of Water Resources Los Angeles Department of Water and Power 111 North Hope Street, Room 1460 Los Angeles, California 90012 david.pettijohn@ladwp.com 7
Any notice, demand, or request directed to BWP shall be delivered to: Mr. William O. Mace Assistant General Manager Water System 164 West Magnolia Boulevard Burbank, California 91503-0631 BMace@burbankca.gov Such correspondence shall be in writing and shall be personally served or sent by first-class U.S. mail, postage prepaid. Either Party, by written notice, may designate different or additional person(s) or different addresses for the giving of notices hereunder. 9. Governing Law and Venue This Agreement shall be governed by, interpreted, and enforced in accordance with the laws of the State of California, without regard to conflict of law principles. All litigation arising out of or relating to this Agreement shall be brought in a state or federal court in the County of Los Angeles in the State of California. The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts in the State of California and waive any defense of forum non conveniens. 10. No Attorney s Fees Parties agree that in any action to enforce the terms of this Agreement, each Party shall be responsible for its own attorneys fees and costs. 11. Representation by Counsel Each Party was represented by its respective legal counsel during the negotiation, drafting, and execution of this Agreement. Each Party acknowledges and agrees that it has had a full and fair opportunity to review and revise the terms of this Agreement. Further, each Party acknowledges and agrees that the Parties jointly drafted this Agreement, and that the terms of this Agreement shall not be construed against or in favor of a Party. 12. No Consequential or Punitive Damages Except with respect to liabilities arising from third-party claims, in no event shall either Party be liable to the other Party under any provision of this Agreement for any indirect, incidental, punitive, or consequential damages, losses, costs, or expenses including, but not limited to, lost profits or revenue, loss of the use of equipment, any government imposed fines or penalties, capital costs, or temporary equipment or services costs, whether based in whole or in part in contract or tort, including negligence, strict liability, or any other theory of liability; provided, however, that damages for which a Party may be liable to the other 8
Party under another agreement will not be considered to be indirect, incidental, punitive, or consequential damages hereunder. 13. Headings Section headings in this Agreement are included for convenience of reference only and shall not be given any substantive effect. 14. Force Majeure In the event that a Party s performance is delayed or suspended as a result of circumstances beyond the Party s reasonable control and without fault or negligence of the Party, neither Party shall incur any liability to the other Party as a result of such delay or suspension. Circumstances deemed to be beyond the control of a include, but are not limited to, acts of God or of the public enemy, insurrection, fires, floods, epidemics, quarantine restrictions, strikes, and freight embargoes. 15. Execution in Counterparts This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. SIGNATURE PAGES FOLLOW 9
IN WITNESS WHEREOF, each Party hereto has duly executed this Agreement by its duly authorized representatives. CITY OF BURBANK By RONALD E. DAVIS General Manager Burbank Water and Power City of Burbank Date: Attest: By: Approved as to form: Zizette Mullins, CMC City Clerk By: CAROLYN BARNES Senior Assistant City Attorney 10
IN WITNESS WHEREOF, each Party hereto has duly executed this Agreement by its duly authorized representatives. DEPARTMENT OF WATER AND POWER OF THE CITY LOS ANGELES BY BOARD OF WATER AND POWER COMMISSIONERS OF THE CITY OF LOS ANGELES By: MARCIE L. EDWARDS General Manager Date: And: BARBARA E. MOSCHOS Secretary 11