EXHIBIT 6-A
ORDINANCE NO. 109
AN ORDINANCE OF THE
BOARD OF DIRECTORS OF THE
MONTEREY PENINSULA
WATER MANAGEMENT DISTRICT
REVISING RULE 23.5 AND
ADOPTING ADDITIONAL PROVISIONS TO FACILITATE THE FINANCING AND EXPANSION OF THE
CAWD/PBCSD
RECYCLED WATER RECLAMATION PROJECT
FINDINGS
1. The Monterey Peninsula Water Management District (“MPWMD”) is charged under the Monterey Peninsula Water Management District Law with the integrated management of the ground and surface water resources in the Monterey Peninsula area.
2. MPWMD has general and
specific power to cause and implement water conservation activities as set
forth in Sections 325 and 328 of the Monterey Peninsula Water Management
District Law.
3. In Ordinance No. 39,
MPWMD found and determined that it was in the best interest of MPWMD and the
inhabitants thereof to provide for the design and construction of a tertiary
treatment facility at the wastewater treatment plant owned by the Carmel
Sanitary District (“CSD,” now the Carmel Area Wastewater District (“CAWD”)) to
produce recycled water which could be used in lieu of potable water for the
irrigation of vegetated areas within the Del Monte Forest, a distribution
system capable of distributing the recycled water from the facility to a point
of distribution in the Del Monte Forest for further distribution to such
vegetated areas, and recycled water irrigation systems on each of such
vegetated areas (the “Original Project”).
4. Ordinance No. 39 made
various additional findings and set forth a method of financing the Original
Project by selection of a Fiscal Sponsor who would guarantee the costs of the
Original Project in exchange for the Water Entitlement as defined in Ordinance
No. 39.
5. Pursuant to the
provisions of Ordinance No. 39, MPWMD on October 3, 1989, adopted Resolution
No. 89-21, A Resolution of the Board of Directors of the Monterey Peninsula
Water Management District Approving the CSD/PBCSD Wastewater Reclamation
Project, a Financing Plan Therefor and MPWMD’s Participation in such Project
and Financing Plan; Selection of a Fiscal Sponsor pursuant to Ordinance No. 39;
and Execution and Delivery of the Wastewater Reclamation Project Fiscal
Sponsorship Agreement with Pebble Beach Company (the “Resolution”). The Resolution made various findings, approved
the Original Project, approved a financing plan for the Original Project,
selected Pebble Beach Company (“PBC”), J. Lohr Properties, Inc. (“Lohr”), and
the Hester Hyde Griffin Trust (“Griffin”) as the Fiscal Sponsors for the
Original Project, dedicated a Water Entitlement of 365 acre feet annually
(“af”) to PBC, 10 af to Lohr, and 5 af to Griffin, approved the Wastewater
Reclamation Project Fiscal Sponsorship Agreement (dated as of October 3, 1989)
between MPWMD and PBC (the “Fiscal Sponsorship Agreement”) and approved the
issuance of Water Use Permits to PBC, Lohr, and Griffin to “evidence” the Water
Entitlement.
6. The Fiscal Sponsorship
Agreement and the actions taken pursuant thereto provide suitable guarantees of
payment of all costs of designing, constructing, equipping, and operating the
Original Project as required by Ordinance No. 39. PBC, as stated in the Fiscal Sponsorship Agreement, has assumed
the obligations of Lohr and Griffin as co-Fiscal Sponsors by providing all of
the necessary guarantees and thus PBC is the sole Fiscal Sponsor for the
Original Project for purposes of Ordinance No. 39 and the Fiscal Sponsorship
Agreement. All actions of MPWMD in the
adoption of the Resolution, the terms of the Resolution itself, and the binding
and enforceable effect of the Fiscal Sponsorship Agreement and all of its
terms, and the obligations of MPWMD thereunder, were all validated by a final
Judgment of Validation entered on July 12, 1990 in a validation action brought
by MPWMD (Monterey Superior Court Case No. M21594).
7. As contemplated by the
Fiscal Sponsorship Agreement, to pay for the Capital Costs of the Original
Project, MPWMD issued interest-bearing Certificates of Participation in 1992 in
the principal amount of $33.9 million, the full payment of which (both principal
and interest) is guaranteed by PBC.
8. The facilities
comprising the Original Project have been completed and are owned and operated
by CAWD and the Pebble Beach Community Services District (“PBCSD”) pursuant to
an agreement between such agencies.
9. It was originally
estimated that the production of recycled water by the Original Project would
lessen consumption of potable water by at least 800 acre feet per dry year,
thus liberating such potable water for other uses within the
California-American Water Company (“Cal-Am”) service territory.
10. The performance of the Original Project has not met the expectations of the parties to the Fiscal Sponsorship Agreement or the expectations of the parties to the Related Agreements (as defined therein), either with regard to quantity or quality, due to a number of factors beyond the consideration of any of the parties participating in the Original Project. Prominent among these factors are the salt-sensitivity of the dominant grass species planted in the greens of many of the golf courses, inadequacy of the drainage facilities to conduct accumulated salts away from the greens, smaller than anticipated amounts of secondary effluent due to decreased flows of influent to the CAWD wastewater plant (resulting in part from consumers’ water conservation efforts), increased amount of salinity in the recycled water due to reduced influent flows caused by water conservation efforts, increased salinity added by water softening units (the demand for which increased as the source water became more saline), internal wastewater plant processes contributing additional salinity loading, the lack of sufficient data concerning the composition of the secondary effluent produced by the CAWD Wastewater Treatment Plant or concerning the water quality and water quantity requirements for golf course irrigation, and the absence of any seasonal storage of recycled water.
11. PBC is willing to assist,
and MPWMD desires that PBC assist, with the financing of an expansion of the
Original Project (the “Project Expansion”), in conjunction with PBC’s
continuing role in the financing and implementation of the Original Project,
that, when implemented, will eliminate the need for reliance on supplemental
potable water for the irrigation of vegetated areas within the Del Monte Forest
(except in cases of an Emergency as defined in this ordinance), thereby
conserving additional potable water.
The parties to the Fiscal Sponsorship Agreement and/or to the Related
Agreements contemplate that the Forest Lake Reservoir, one component of the
Project Expansion, will provide storage sufficient for days supply during the irrigation period, such that an Emergency
(as further defined herein) will necessarily involve either (1) the damage to or
the destruction of the Forest Lake Reservoir, (2) the destruction or other
required interruption of facilities supplying Recycled Water to Forest Lake
Reservoir at a time when storage in Forest Lake Reservoir has fallen below
_____ acre feet, or (3) the destruction or interruption of facilities supplying
Recycled Water from Forest Lake Reservoir to Recycled Water Irrigation
Areas. The financing and implementation
of the Project Expansion will be made possible by making a portion of PBC’s
existing Water Entitlement available for separate sale and conveyance to owners
of residential property within the Del Monte Forest (defined in Exhibit “B”)
for use solely on that property, and applying the proceeds therefrom to the
costs of the Project Expansion and Original Project as more specifically
described in Section Three of this ordinance.
12. This ordinance shall
authorize PBC to separately sell and convey specified portions of its Water
Entitlement through which it will raise funds to finance all Capital Costs of
the Project Expansion as set forth in Section Three hereof, shall revise and
amend Rule 23.5 of the Rules and Regulations of the Monterey Peninsula Water
Management District as set forth in Section Four hereof, and shall adopt other
provisions to facilitate the Project Expansion, as more particularly described
below. Ordinance No. 39, which is among
the body of actions and agreements supporting the issuance of MPWMD’s
Certificates of Participation as a tax-exempt financing and defining MPWMD’s
obligations to the holders thereof, remains in full force and effect, with all
of its terms, except to the extent its terms are amended by this
ordinance. Pursuant to Part VI of
Ordinance No. 39, PBC as Fiscal Sponsor has agreed that the amendments to
Ordinance No. 39 contained in this ordinance do not impair the interest of the
Fiscal Sponsor.
NOW THEREFORE be it ordained as follows:
Section One: Short Title
This ordinance shall be known as the Recycled Water Project Expansion Ordinance of the Monterey Peninsula Water Management District.
Section Two: Purpose
It is
the purpose of this ordinance to facilitate the financing of the Project
Expansion. This ordinance recognizes
the existing annual dedication of 380 acre feet of potable water as the Water
Entitlement, which is evidenced by Water Use Permits authorizing use within
specific portions of the Del Monte Forest and adjoining areas pursuant to prior
approval of the MPWMD Board, which portions are collectively defined as the
“Benefitted [sic] Properties” in the Fiscal Sponsorship Agreement as amended,
and provides that specified quantities of PBC’s existing Water Entitlement
shall be made separately available for sale and conveyance to owners of
residential property within the Del Monte Forest (as defined in Exhibit B) for
dedication to and use solely on said property, with the proceeds therefrom to
be applied exclusively to the costs of the Project Expansion and the Original
Project as more specifically described in Subsection I of Section Three. The Water Entitlement and Water Use Permits
represent a portion of the potable water freed up by the implementation of the
Original Project, which has not to date produced sufficient quantities of
Recycled Water of a quality suitable for all irrigation needs of the golf
courses located within the Del Monte Forest and and other vegetated areas to be
irrigated with Recycled Water under Water Sale Agreements (“Recycled Water
Irrigation Areas”).
The
objective of Project Expansion is to provide sufficient quantities of Recycled
Water of a quality suitable for irrigation of even the most water
quality-sensitive plants located within the Recycled Water Irrigation Areas,
and to completely eliminate the use of potable water for such irrigation
(except during an Emergency as defined herein), which will enable additional
potable water to be freed up. This
ordinance does not alter the continuing guarantees of PBC’s fiscal
responsibility for the Original Project.
It establishes a specific method by which PBC will raise funds to
finance all Capital Costs of the Project Expansion, and will cause certain
additional revenues to be applied to the the costs of the Project Expansion and
Original Project as more specifically described in Section Three of this
ordinance. Ordinance No. 39, which is
among the body of actions and agreements supporting the issuance of MPWMD’s
Certificates of Participation as tax-exempt financing and defining MPWMD’s
obligations to the holders thereof, remains in full force and effect, with all
of its terms, except to the extent its terms are amended by this
ordinance.
Section Three: Financing for the Project Expansion
A. The Board having selected
PBC as the Fiscal Sponsor pursuant to Part II of Ordinance No. 39 and based
upon the irrevocable commitment of PBC to underwrite, be responsible for,
assure and guarantee the full payment of the Financial Commitment (Capital Costs
and Net Operating Deficiencies and Ancillary Project Costs of the Original
Project set forth in the agreement deemed by MPWMD to be “necessary or
desirable” pursuant to Part VII of Ordinance No. 39), MPWMD has granted the
Water Entitlement and the General Manager has issued Water Use Permits to PBC,
Lohr, and Griffin authorizing the expansion and extension of the Cal-Am water distribution
system to provide connections to, and potable water service in specific annual
quantities (in acre feet) for the use on and benefit of, the specific
properties identified in the Resolution and the Fiscal Sponsorship Agreement
(such annual quantities being specified, and such properties being identified
as the “Benefitted [sic] Properties,” in the respective Exhibits “A” thereto as
amended).
B. In order to facilitate
the financing of the Project Expansion, it is necessary to expand the scope of
the Benefited Properties, thus making specified quantities of the existing
Water Entitlement separately available for sale and conveyance to owners of residential
property within the Del Monte Forest (as defined in Exhibit B) for dedication
to and use solely on said property, with the proceeds therefrom to be applied
exclusively to the costs of the Project Expansion and the Original Project as
more specifically described in Subsection I of this Section Three.
C. In recognition of PBC’s
commitment to raise funds to finance the Project Expansion through the sale of
portions of its Water Entitlement (subject to the terms specified in this
ordinance), PBC is hereby authorized to separately sell and convey to other owners
of land within Del Monte Forest (as defined in Exhibit B), for residential use
only, such portions of its Water Entitlement for such consideration and upon
such terms and conditions as PBC in its discretion may determine (subject to
the provisions of subsection G of this Section Three), provided that the
proceeds therefrom shall without exception be applied to the costs of the
Project Expansion and the Original Project as more specifically described in
Subsection I of this Section Three.
D. Each recipient of a
portion of PBC’s Water Entitlement sold separately from PBC’s land pursuant to
Subsection C shall be entitled to issuance by the General Manager of a Water
Use Permit for such amount of the Water Entitlement as is documented in the
conveyance documentation presented to the General Manager, with a commensurate
reduction (as documented in a Water Use Permit) in the aggregate amounts of the
Water Entitlement thereafter held by PBC.
E. All proceeds received by
PBC from any separate sale or conveyance of a portion of PBC’s Water
Entitlement as described in Subsection C shall be deposited in an escrow
account (the “Escrow Account”) to pay for, in the first instance, Capital Costs
of the Project Expansion, which Escrow Account shall specify and require that
the funds shall be released and used only for the purposes specified in
Subsection I below.
F. The Water Entitlement of
PBC shall be separately sold and conveyed, and Water Use Permits issued,
pursuant to Subsections C and D, only for residential use in Del Monte Forest
(as defined in Exhibit B) on property not owned by PBC as of the time that this
ordinance is adopted. This restriction
of use shall be set forth on the face of the Water Use Permit, and notice
thereof shall be recorded in the form of a deed restriction against the
property to which the conveyed water entitlement is dedicated.
Nothing in the preceding two sentences shall affect the right and
ability of PBC to use and apply such quantity of PBC’s Water Entitlement to
Benefited Properties owned by PBC, as has not been sold and conveyed by PBC
pursuant to Subsection C of this Section Three. Specifically, PBC shall have the right and ability,
notwithstanding this ordinance, to commence or to continue to apply and utilize
its Water Entitlement on any or all Benefited Properties owned by PBC as
provided in the Fiscal Sponsorship Agreement for any lawful use, and may sell
and convey a parcel of land that it owns together with a portion of its Water
Entitlement without being required to pay any consideration received therefor
into the Escrow Account.
G. Prior to completion and
operation of the Project Expansion, the Water Use Permits evidencing the first
150 acre feet (or such additional amount, if any, as may be agreed to by MPWMD)
of the Water Entitlement sold and conveyed by PBC pursuant to Subsections C and
D of this Section Three to owners of residential property within the Del Monte
Forest (as defined in Exhibit B) for use solely on said property shall not be
subject to revocation or termination, whereas all Water Use Permits for amounts
of the Water Entitlement in excess of such amount shall be subject to
revocation or termination pursuant to the provisions of this ordinance. After completion and operation of the
Project, all Water Use Permits issued to evidence the separate sale and
conveyance of the Water Entitlement pursuant to Subsections C and D of this
Section Three shall not be subject to revocation with respect to the entire
Water Entitlement so transferred; provided, however, in each case, that such
water use rights shall be subject to modification after year 2075 as provided
in this ordinance and in Ordinance No. 39.
H. Pursuant to an agreement
to be entered into between MPWMD and PBC, MPWMD with the concurrence of PBC
shall determine when the funds in the Escrow Account (and the expected funds to
be received from the sales described in Subsection C of this Section Three)
suffice to begin construction of the Project Expansion. The parties estimate at the present time
that $15 million will be required to cover the Capital Costs of, and to begin
construction of, the Project Expansion.
I. Any proceeds received
by PBC from the separate sale and conveyance of portions of its Water
Entitlement pursuant to Subsection C of this Section Three shall be devoted and
applied to first, the Capital Costs of the Project Expansion, and next, to the
Capital Costs, Net Operating Deficiencies, and Ancillary Project Costs of the
Original Project and Project Expansion.
Section Four: Amendment of Rule 23.5
Monterey Peninsula Water Management District Rule 23.5 shall be amended
by adding the portion set forth in italicized
typeface and by deleting all text shown in strikeout typeface. In all other respects, the text of Monterey
Peninsula Water Management District Rule 23.5 shall remain unchanged and shall
be republished by this ordinance.
Rule
23.5 PERMITS FOR WATER FROM THE
CAL-AM WATER DISTRIBUTION SYSTEM
DEDICATED FOR USE IN CONNECTION WITH THE PLAN TO FINANCE THE WASTEWATER
RECLAMATION RECYCLED WATER PROJECT
A. ISSUANCE OF WATER USE PERMITS. Upon The Board having selectedion of all the Fiscal Sponsor/Sponsors pursuant to
Part II of Ordinance No. 39 and based upon
the irrevocable commitment by those sSponsors
to underwrite, be responsible for, assure and guarantee payment of the
Financial Commitment (Capital Costs and Net Operating Deficiencies and
Ancillary Project Costs of the Reclamation Original Project recorded by the agreements required by Part VII of
this Ordinance No. 39), MPWMD has granted the Water Entitlement and the General Manager shall has issued Water Use Permits to the Fiscal Sponsor/Sponsors PBC, Lohr, and Griffin authorizing the
expansion and extension of the Cal-Am water distribution system to provide
water service and connections for the benefit of the properties identified in
the application(s) of the Fiscal Sponsor/Sponsors Resolution and the Fiscal Sponsorship Agreement (such properties hereinafter
being called the “Benefitted
Properties” described in the respective
Exhibits “A” theretounder as amended). By virtue of the Water
Entitlement, eEach Water
Use Permit shall has granted an irrevocable present vested property interest upon
one or more Benefited Parcels Properties
for the use and benefit of a specified quantity of potable water per year
(in acre feet) produced by the Cal-Am water distribution system owned and operated by the
California-American Water Company (“Cal-Am”).
Water
Use Permits shall be subject only to the following limitations: (1) Tthe permit shall not limit the power of the Monterey
Peninsula Water Management District (“MPWMD”) to curtail water use in the event of any water emergency caused
by drought, or other threatened or existing water shortage, as defined in
Section 332 of the Monterey Peninsula Water Management Act, including without limitation the power of MPWMD to impose termination
of water service as a consequence of a violation of water use restrictions;
(2) Tthe permit shall not relieve or
reduce any obligation of the recipient of water to pay customary fees,
connection charges, user fees, surcharges, taxes, utility taxes, and/or any
other customary monetary obligation which may be imposed by the California
Public Utilities Commission, Cal-Am, MPWMD
District, or other Public Participants upon water users of the same class
within the California-American Water Company service area,
including but not limited to fees and charges due and payable to MPWMD by
reason of Rule 24 of MPWMD’s Rules and Regulation, nor shall such permit limit the authority of Cal-Am or MPWMD to
terminate for such non-payment; (3) Tthe
permit shall enable present use of the Water Entitlement by PBC only upon the commencement of operation of the
Reclamation Project and upon the continuing financial assurance or
guarantee by the Fiscal Sponsor/Sponsor(s) relating to the payment of Net
Operating Deficiencies for the Reclamation Project; and (4) Nnotwithstanding
any other provision of this Ordinance:
(a) the Water Entitlement
allocated to the Benefited Properties as a whole shall not exceed 380 AF, (b) the water usage on any Benefited
Property shall not exceed the aggregate amount of the Water Entitlement
allocated to such Benefited Property, (c) water usage of the Benefited
Properties shall be calculated by MPWMD in a manner that reasonably reflects
actual annual average water usage among the Benefited Properties and does not
discriminate against the Benefited Properties in relation to other similarly
situated water users within MPWMD.
Further,
notwithstanding any other provision of this Rule
Ordinance, once a new water connection is established through use of
all or a portion of a Water Entitlement, to
the extent of such usage the water user shall be treated in a manner equal
to any other Cal Am water user and shall not be entitled to preferential access
to water over any other water user of the Cal Am water distribution system.
The
revocation and termination of any Water Use Permit shall not diminish or
otherwise adversely affect present actual use of water by reason of a prior
expansion or extension of the Cal-Am water distribution system through any
connection previously made pursuant to such Water Use Permit, except that actual use of water may be
reduced subject to the preceding two subparagraphs . Permits issued
pursuant to this Rule shall represent a vested property interest upon issuance
and shall not be subject to revocation or cancellation except as
expressly set forth in subparagraph (D) below, except that actual use of water may be terminated as described in the
preceding two subparagraphs. The Water Entitlement granted by each Water
Use Permit shall not be subject to reallocation pursuant to District MPWMD Rule 30, nor shall it be
terminated or diminished by reason of any water emergency, water moratorium or
other curtailment on the setting of meters for the California-American
Wwater Ssystem, nor shall it otherwise be
subject to diminishment or revocation, except as described in the preceding two subparagraphs or in the event
that a Water Use Permit is revoked or cancelled as provided by subparagraph (D)
below.
B. WATER
USE PERMIT PROVISIONS. Each Water Use Permit shall be issued by the
General Manager with respect to a single Benefitted Property and shall
identify, with respect to the Benefited
Property:
(1) the nature (industrial/commercial/residential, unless both the Property and the water
dedicated thereto may be put to industrial or commercial use) and location
of the water use to be applied to each Benefitted Property, and the
consistency of such water use with existing land use and zoning plans;
(2) the number and nature
of connections projected for each Benefitted Property; and
(3) the projected
water use required by each connection proposed upon the Benefitted
Property.
C. AMENDMENT
OF WATER USE PERMITS. The Each
Fiscal Sponsor Oowner of
any Benefitted Property, shall, upon request, be entitled to an
amendment to any Water Use Permit to reduce, or increase, or change the number
and type of connections and water use with respect to any Benefitted
Property owned by such Fiscal Spponsor Oowner, provided that in no event shall the aggregate amount
of estimated annual water usage for the Benefitted Properties owned by that Owner of that Fiscal
Sponsor/Sponsors exceed the aggregate Water Entitlement allocated to the
Benefitted Properties of that Fiscal Sponsor Oowner, and provided further that the
reallocation of connections shall be allowed only among those locations
identified in Exhibit A hereto the Fiscal Sponsor’s
application. Water Use Permits may be separately sold and conveyed transferred and assigned only by PBC, and then only to successors-in-interest
to the Owners of the Benefitted
Properties as defined in this ordinance;
provided, however that such Owners who have received a Water Use Permit by sale
and conveyance from PBC pursuant to Subsections C and D of Ordinance No. 109
shall be entitled to use the Water Entitlement evidenced therein only on the
Benefited Property to which it applies and shall not have the right to further
sell or convey the Water Use Permit for any use other than residential use or
on any other Benefited Property.
D. REVOCATION, AND TERMINATION, OR MODIFICATION OF WATER USE PERMITS.
Each
Water Use Permit held by PBC shall
provide that it shall be revoked and terminated in the event that PBC or any other subsequent Fiscal Sponsor shall default
in any material manner upon its obligation, assurance, and guarantee of the
Financial Commitment for the Reclamation Project, provided that nothing
herein shall preclude PBC or any other
subsequent Fiscal Sponsor from disputing in good faith any claim of default
made by the Water Management District MPWMD nor shall the Water Management District MPWMD terminate or revoke any Water Use
Permit unless the PBC or any subsequent Fiscal Sponsor shall
have been given notice and a reasonable opportunity to cure any such default so
long as such opportunity to cure shall not result in any payment default to the any bondholders of the Certificates of Participation.
Prior
to completion and operation of the Project Expansion, the Water Use Permits
evidencing the first 150 acre feet of the Water Entitlement sold and conveyed
by PBC pursuant to Subsections C and D of this Section Three to owners of
residential property within the Del Monte Forest (as defined in Exhibit B) for
use solely on said property shall not be subject to revocation or termination,
whereas all Water Use Permits for amounts of the Water Entitlement in excess of
such amount shall be subject to revocation or termination pursuant to the
provisions of this ordinance. All Water
Use Permits issued after completion and operation of the Project to evidence
the separate sale and conveyance of the Water Entitlement pursuant to
Subsections C and D of this Section Three shall not be subject to revocation
with respect to the entire Water Entitlement so transferred except as set forth
in the following sentence.
In addition, notwithstanding any other provision of this Ordinance Nos. 39 or 109, each Water Use Permit
which on or after January 1, 2075, embodies an annual Water Entitlement in
excess of requirements for planned land uses on a Benefitted Property or which purports to authorize usage in
excess of the constitutional
limitation to reasonable and beneficial use shall be subject to modification, revocation, or and termination in the sole
discretion of the District MPWMD,
such that the water usage authorized thereby shall not exceed such requirements
and limitations.
Prior to any termination and revocation or modification, termination, or revocation pursuant to
this subparagraph D, the holder of the Water Use Permit, and during the duration of the
Financial Commitment, PBC or any subsequent Fiscal Sponsor, shall be entitled to notice and a
hearing, and any termination, revocation, or modification shall be subject to
appeal to the Board pursuant to Rule 70 of the District MPWMD Rules and Regulations.
The revocation,
and termination or modification of
any Water Use Permit shall not diminish or otherwise adversely affect present
actual use of water by reason of prior expansion or extension of the Cal-Am
water distribution system through any connection previously made pursuant to
such Water Use Permit, provided that
each Water Use Permit holder shall be subject to such laws, ordinances, and
regulations as are generally applicable to persons actually using water from
the Cal-Am water distribution system, and nothing herein is intended to or
shall affect the ability to curtail or eliminate the actual use of water
through any connection previously made pursuant to a Water Use Permit to the
extent such curtailment or elimination is authorized by such other laws,
ordinances, or regulations.
E. CAL-AM
SYSTEM EXPANSION/EXTENSION PURSUANT TO WATER USE PERMITS.
So long as the Reclamation Project has
commenced operation so long as all assurances or guarantees required for
both payment of Capital Costs and payment of Net Operating Deficiencies for the
Reclamation Project continue to be met (or expire by their terms), Eeach Water Use Permit shall entitle the owner of a
Benefitted Property to potable
water service to be provided by the Cal-Am water distribution system for
such Benefitted Properties, including the installation of water meters
and mains as necessary, upon payment of
the fees required by subparagraph E.2. and presentation to MPWMD by the
Fiscal Sponsor Owner of the applicable Benefited Property for which
the following information has not
previously been provided:
(1.) (a) A
statement by the Fiscal Sponsor Owner
setting forth the annual capacity of water use that the Fiscal
Sponsor Owner intends to use
through such expansion/extension of the Cal-Am water distribution system, and
the nature of the uses to which such water is intended to be applied; and
(b) a valid municipal or county building permit
which will allow construction upon the Benefitted Property; or
(c) a complete set of architectural contract
drawings; or
(d) other
documentation sufficient for MPWMD the
District to determine quantity and the capacity for annual water use of the
Benefitted Property and the number and type of each requested connection.
(2.) The payment of any customary fees and
connection charges required by both Cal-Am and the District MPWMD of water users within the Cal-Am
service area, calculated upon the basis of the estimated annual water usage capacity for the Benefitted
Property set forth in the
Fiscal Sponsor’s statement, including but not limited to fees and charges due by
reason of Rule 24 of the District’s MPWMD’s
Rules and Regulations.
Upon the filing of the information and payment of the
fees required above, the General Manager shall make a notation on the Water Use
Permit indicating the location, capacity and nature of each connection
requiring a present expansion/extension of the Cal-Am water distribution
system. Estimated usage shall be based upon the water use capacity for proposed
or planned development upon Benefitted Properties. The aggregate water
use represented by such expansions/extensions of the Cal-Am water distribution
system, shall not exceed the Water Entitlement evidenced by such Water Use
Permit. In the event that an Owner of any
Benefited Property Fiscal Sponsor requests an expansion/extension of
the Cal-Am water distribution system with respect to less than all of the Water
Entitlement evidenced by such Water Use Permit, the General Manager shall make
a notation on such Water Use Permit indicating the remaining Water Entitlement.
The Owner of any
Benefited Property to which the Owner has previously applied a portion of the Water Entitlement through
prior expansions/extensions of the Cal-Am water distribution system Fiscal
Sponsor shall be entitled to increase the annual water use for any on such Benefited Property to which the Fiscal Sponsor has
previously applied a portion of the Water Entitlement through prior
expansions/extensions of the Cal-Am water distribution system upon
presentation of the information and payment of the fees set forth in this
subparagraph (E), provided that such increase does not cause
the aggregate any such increases in water use for on the Benefitted Property (or Properties, as applicable) to shall not exceed in the aggregate the aggregate total Water Entitlement
of all Benefitted Properties owned by such Owner, or the total Water Entitlement of the Benefited Properties
as a whole.
Cal-Am shall be authorized to execute a contract
with the Fiscal Sponsor to enable the provision of water service pursuant to subsections C and D of Section
Three of Ordinance No. 109 consistent with the Water Entitlement evidenced
by the Water Use Permit issued under this provision. Such agreement with Cal-Am shall at the Fiscal Sponsor’s option
be a condition precedent to the providing of financing pursuant to Section Three of Ordinance No. 109 Fiscal
Commitment by the Fiscal Sponsor that
is to pay for the Capital Costs of the Project Expansion. The actions
required to be taken by the General Manager pursuant to this paragraph shall be
ministerial, non-discretionary acts which shall not be affected by any water
moratorium, water emergency, allocation decision or other curtailment on the
setting of new water meters for the Cal-Am water distribution system and shall
be enforceable by mandamus, provided that
nothing in the foregoing is intended to or shall affect the ability of MPWMD to
curtail or eliminate the actual use of water through any connection previously
made pursuant to a Water Use Permit to the extent such curtailment or elimination
is authorized by such other laws, ordinances, or regulations, nor is it
intended to provide or imply that any Water Use Permit holder shall not be
subject to such laws, ordinances, and regulations as are generally applicable
to persons actually using water from the Cal-Am water distribution system.
F. DEFINITIONS.
For the purpose of this Ordinance No. 109 and Rule 23.5, the following
words shall have the meanings set forth below. Other words which are defined in Rule 11 to the Rules and
Regulations, when used in Rule 23.5 or thise ordinance shall have the meanings set forth therein, unless the
context otherwise indicates.
“Ancillary Project Costs” means net revenues (gross
revenues less allocable operation and maintenance costs and administrative and
general costs as such terms are defined in accord with generally accepted
utility practices) which Cal-Am shall not receive by reason of operation of the
Reclamation Project. Ancillary Costs shall not include any return on
assets of Cal-Am which have been removed from the water distribution system
rate base by reason of the Reclamation Project. Ancillary Costs shall be
reduced over time by net revenues received by Cal-Am by reason of sales of
Cal-Am water (with respect to the bBenefited
pProperties) following the
first date of Reclamation Project operation.
“Benefitted Properties” means those properties described on Exhibit “A” hereto within
the Cal-Am service area which
have been identified within the application of the selected Fiscal
Sponsor/Sponsors and upon which a portion of the Water Entitlement may be
utilized. For any public agency Fiscal Sponsor, the
term “Benefitted Properties” shall be defined as those properties owned
entirely by the public agency and dedicated for public use. All Benefited
Properties are located in the Del Monte Forest (the area shown on Exhibit “B”)
except as otherwise noted in Exhibit “A.”
“Cal-Am” means
the California American Water Company, a
California corporation, its successors and assigns.
“Capital Costs” as applied to the Reclamation Project
or any portion thereof means all or
any part of:
(a) the cost of
acquisition of all lands, structures, real or personal property rights, rights-of-way,
franchises, easements, and interests acquired or used for, the Reclamation Project,
inclusive of fees and commissions for acquisition;
(b) the cost of
construction related to of the
Reclamation Project, including but
not without limitedation, to demolition, repair,
modification, replacement or renovation of existing structures, facilities,
fixtures or equipment essential to the
construction and operation of the Project; cost of improvements and
materials; direct and indirect Public Participation construction and
administration expenses properly allocable to the Reclamation Project in
accordance with generally accepted accounting principles; costs of painting,
decorating, furnishing and landscaping; contractor and subcontractor profit;
and costs related, by reason of the Reclamation
Project, to plumbing, mains,
tanks, or pipes which are modified, repaired, replaced, or renovated, whether
owned by Public Participants or others.
(c) the cost of
demolishing or removing any buildings, fixtures, equipment, or structures on
land so acquired, including, without
limitation, the cost of acquiring any lands to which such buildings or
structures may be moved;
(d) the cost of all new machinery, piping, equipment and
furnishings, including but not limited to the cost lesser of (i) the fair market value, or (ii) depreciated value for
purposes of the applicable rate base, of machinery, piping, equipment and
furnishings made obsolete or unusable to Cal-Am, or any of the Public Participants, or others by reason of the Reclamation Project to the extent not replaced by the Project;
(e) costs of selling and issuing the
Certificates of Participation, including, without limitation, the underwriter’s
discount and any other applicable fFinancing charges;
(f) Interest on any funds advanced to permit payment of
any of the Capital Costs prior to, during, and for a period after
completion of the acquisition and construction of the Reclamation Project
as determined by the Monterey Peninsula
Water Management District, including,
without limitation, capitalized interest on the Certificates of Participation;
(g) provisions for
working capital;
(h) the Operating Reserve and other similar reserves for routine or extraordinary
repairs and replacements necessary to the Reclamation Project;
(i) the cost of
architectural, engineering, planning, environmental analysis, financial,
accounting, auditing and legal services, plans, specifications, estimates,
administrative expenses, permits, fees, adverse claims, personnel and overhead
costs (both direct and indirect, to the extent properly allocable to the
Reclamation Project in accordance with
generally accepted accounting principles), and other expenses necessary or
incident to determining the feasibility of construction the Reclamation
Project or incident to the planning, construction, acquisition, or financing of
any portion of theat Project, including, without limitation:
1. Payment during the
construction period of the premiums for all title and other insurance, bonds,
or undertakings required to be taken out and maintained with respect to any
part of. the Reclamation Project to the extent such amounts are not paid
by any contractor who constructs or installs any portion of the Reclamation Project;
2. Payment of the taxes,
assessments and other fees or charges, if any, that may become payable during
the construction period with respect to any
portion of the Reclamation Project, or reimbursements thereof; and
3. Payment of expenses
incurred in seeking to enforce any remedy against any contractor or
subcontractor in respect of any default under a contract relating to the
acquisition, construction or installation of any portion of the Reclamation Project.
4. Payment of expenses incurred concerning
asserted deficiencies in the Project and related matters beginning on , and continuing
through the drafting, negotiation, and execution of any and all agreements
necessary or desirable to implement the design, construction, operation, and
maintenance of the Project Expansion and any modifications thereof or thereto.
5. Payment
of any expenses incurred to monitor compliance with or to enforce Water Use
Permits and to make determinations concerning adjustments to Water Use Permits
that may be required in 2075.
“CAWD” means the Carmel Area Wastewater District (formerly known as the Carmel Sanitary District), a public agency.
“CAWD/PBCSD” means
the Carmel Area Wastewater District and the Pebble Beach Community Services
District, with respect to any rights or obligations that they hold in common,
jointly and severally.
“Certificates of Participation” means the Certificates of Participation issued by MPWMD in 1992 in the amount of $33.9 million to finance the Capital Costs of the Original Project.
“Del Monte Forest”
means the area of mostly unincorporated Monterey County
described and/or depicted on Exhibit “B”
“Emergency”
means one or more sudden, unexpected occurrences, beyond the reasonable control
of the owner or operator of any Recycled
Water Irrigation Areas, that interrupt the supply of Recycled Water to
the Recycled Water Irrigation Areas,
demanding immediate and diligent action by CAWD and/or PBCSD to restore such
supply. Under no circumstances shall an
Emergency last longer than the period of time reasonably required to promptly
and diligently complete the repair or replacement activities (taking into
account cost only where exorbitant).
Notwithstanding the preceding sentence, once the Project Expansion first
becomes operational, no such Emergency shall, for purposes of this ordinance,
justify the use of potable water for irrigation of the Recycled Water Irrigation Areas for more than days within any consecutive day period.
“Financial Commitment” means the commitment of PBC, as the Fiscal Sponsor, or any subsequent Fiscal Sponsor, to
assume and guarantee payment of (1) the Capital Costs of the Reclamation Project
(including the payment of the principal of and interest on the Certificates of Participation or any
bonds or other obligations issued by any Public Participant to finance such
costs), and (2) the Net Operating Deficiencies of the Reclamation Project
for the entire period
ending twenty years following the estimated completion date of the project until the Certificates of Participation (and any bonds or other obligations issued by any
Public Participant to finance such costs) have been paid in full (or for any shorter periods as permitted by the
District MPWMD), and (3) payment
of all Ancillary Project Costs.
“Fiscal Sponsor or Fiscal Sponsors”
means PBC and any person or persons
(including partnerships,
corporations, municipal corporations, or
other public entities) selected
to act that may succeed PBC
in ownership of all of PBC’s assets and assume, as the Fiscal Sponsor/Spponsors, all of PBC’s obligations pursuant to Part
II of Ordinance No. 39,
Ordinance No. 109, the Fiscal Sponsorship Agreement, and any
amendments thereof, which person
or persons shall will be
obligated, and liable for, and capable of paying the Capital Costs and Net
Operating Deficiencies of the Reclamation Project.
“Fiscal Sponsorship
Agreement” means the Wastewater Reclamation Project Fiscal Sponsorship
Agreement between the Monterey Peninsula Water Management District and Pebble
Beach Company, dated as of October 3, 1989, as amended.
“Franchise Freed-Up
Water” means potable water which has been freed for new use by reason of subpotable
Recycled Wwater deliveries
from the Reclamation Project. Freed-Up Water has the same meaning as
“Franchise Water” in Ordinance No. 39.
“General Manager”
means the General Manager of MPWMD.
“MPWMD” means the
Monterey Peninsula Water Management District, a public agency.
“Net Operating Deficiency” as applied to the Reclamation
Project means, for any fiscal year or portion thereof, the difference
between the Operating Revenues and the Operation and Maintenance Expenses for
such period.
“Operation and Maintenance Expenses” as applied to the Reclamation
Project means all expenses and costs of management, operation, maintenance
and repair of the Reclamation Project, including payments to be made by
the Public Participants under agreements with Cal-Am for the purchase of subpotable
Recycled Wwater, debt
service payments on the Certificates of
Participation and all any
other bonds or other obligations issued to finance the cost of the Reclamation
Project, and all incidental costs, fees and expenses properly chargeable to
the Reclamation Project in
accordance with generally accepted accounting principles, including reasonable depreciation and
obsolescence charges or reserves therefore assuming straight line depreciation
upon a useful life assumed to be thirty (30) years, amortization of intangibles
and other bookkeeping entries of a similar nature.
“Operating
Reserve” means a reserve maintained for the purpose of paying for operations,
providing working capital, and paying for routine and extraordinary repairs and
replacements.
“Operating Revenues” as applied to the Reclamation Project
means all income, rents, rates, fees, charges and other moneys derived by the
Public Participants from the ownership or operation of the Reclamation Project,
including, without limiting the generality of the foregoing: (i) all income,
rents, rates, fees, charges or other moneys derived from the sale, furnishing
and supplying of the reclaimed,
subpotable Recycled wWater (or from potable
water supplied in lieu thereof (but only
to the extent the use of potable water is permitted hereunder); (ii)
Interest earnings on all revenues mentioned in (i) above, and on the Operating Rreserve or on any other fund or account relating
to the Reclamation Project, and (iii) insurance and condemnation
proceeds resulting from damage to or destruction of the Reclamation Project
facilities, or from the condemnation of the Reclamation Project;
provided, that the term “Operating Revenues” shall not include customers’
deposits or any other deposits subject to refund until such deposits have
become the property of one of the
Public Participants.
“Original Project” means and consists of (1)
a tertiary treatment facility at the present CAWD wastewater treatment plant
site, designed to produce at least 800 acre feet per year of disinfected
recycled water, (2) a distribution system which is capable of distributing the
recycled water from the facility to a point of distribution in the Del Monte Forest
for further distribution to the Recycled Water Irrigation Areas, and (3)
recycled water irrigation systems on each of the Recycled Water Irrigation
Areas.
“Owner” means the
holder (of record) of fee title to any Benefited Property.
“PBCSD” means the Pebble
Beach Community Services District, a public agency.
“Project” or
“Reclamation Project” means the CSD/PBCSD
wastewater treatment plant
(including lands, facilities, equipment, furniture and fixtures) Original
Project (used since 1995 to
create, distribute, and store Recycled Water) and the Project Expansion.
“Project Expansion” means and consists of
the addition of advanced treatment components to the tertiary treatment plant
facilities of the Original Project to produce “Recycled Water,” and the addition
of storage, treatment, and distribution facilities at the Forest Lake Reservoir
located within the Del Monte Forest and owned by PBCSD.
“Public Participant” means any one or more of the following: the Monterey Peninsula Water Management District, the Carmel Area Wastewater District, formerly the Carmel Sanitary District, the Pebble Beach Community Services District, or any successor public agency including but not limited to any joint powers agency formed by one or more of the above agencies.
Before the Project
Expansion becomes operational, “Recycled Water”
shall mean water originating from the tertiary treatment facilities of the CAWD
wastewater treatment plant. Once the
Project Expansion first becomes operational, “Recycled Water” shall refer to water originating from said tertiary
treatment facilities and thereafter receiving further treatment so as to be
suitable for irrigation of all portions of the Recycled Water Irrigation Areas
without the addition of any potable water thereto (except during an Emergency
as defined herein) and otherwise meeting all regulatory and health standards for such usage. “Recycled Water” has the same meaning as
“Reclaimed Water.”
“Recycled Water
Irrigation Areas” means the golf courses and other vegetated areas located
within the Del Monte Forest that now or in the future may be irrigated with
Recycled Water supplied by the Project.
“Water
Entitlement” means an aggregate of 400
380 acre feet per year (or
less) of potable water, and in no event more than fifty (50%) percent of
the total amount of Franchise Water, which shall be the maximum portion
of the Franchise Water has been
dedicated (as evidenced by Water Use Permits issued pursuant to Ordinance No.
39, the Resolution, and the Fiscal Sponsorship Agreement) or which
may be dedicated to land within the jurisdiction of the District MPWMD for the purpose of providing for
the payment of the Capital Cost, Ancillary Project Cost, and Net Operating
Deficiencies of the Reclamation Project. Ordinance No. 109 provides
a process by which a portion of the Water Entitlement held by PBC may be
separately sold and conveyed and thereby be dedicated to other land within the
jurisdiction of MPWMD with the proceeds therefrom to be applied exclusively to
the costs of the Project Expansion and the Original Project as more
specifically described therein.
“Water Use Permit” means a writing from the District MPWMD which
evidences the irrevocable dedication of the Water Entitlement as a
present vested property right enuring
to the use and benefit of one or more of the Benefitted Parcels Properties. A Water Use Permit shall by non-discretionary ministerial action,
cause the present Expansion/Extension of the Cal-Am water distribution for
Benefitted Properties upon designation of the location of
use, and upon payment of applicable connection fees and charges. A Water Use Permit shall take the place of
and be used instead of any Expansion/Extension Permit upon any Benefitted
Parcel Property as relates to the
use of any portion of the Water Entitlement.
Added by Ordinance No. 39 (2/13/89);
amended by Ordinance No. 71 (12/20/93)
Section
Five: Agreements to Provide for
Water Entitlement
The General Manager is authorized to negotiate and, subject to the prior
approval or ratification by the Board, to execute such further agreements with
Cal-Am and PBC as are necessary or desirable to provide the terms and
conditions upon which the Water Entitlement will be provided to, and used on,
the Benefited Properties in the manner provided in this ordinance. MPWMD will cooperate with PBC and Cal-Am in
securing any approval required from the California Public Utilities Commission
that may be necessary or desirable in connection with such agreements.
MPWMD shall acknowledge in any such agreement that the Fiscal Sponsor
(currently PBC) has made and has
stated its intention to continue to provide the Financial Commitment in
reliance upon the provisions of Ordinance No. 39 and this ordinance, as such
Financial Commitment is respectively defined therein. MPWMD shall agree not to amend the provisions of this ordinance
in any manner which would impair the interest of such Fiscal Sponsor or any
successor or assign.
Section 6: Agreements
to Guarantee the Payment of Project Capital Costs and Net Operating
Deficiencies
The General Manager is authorized to negotiate and, subject to the prior approval or ratification by the Board, to execute such further agreements with PBC and Cal-Am as are necessary or desirable to assure and guarantee, the full payment of the Capital Costs and Net Operating Deficiencies and Ancillary Project Costs of the Project (including the Project Expansion) with minimal fiscal risk to MPWMD or any other Public Participant; provided that the failure to enter into such a further agreement with PBC and/or Cal-Am with respect to undertaking the Project Expansion shall in no way diminish or affect PBC’s or any Owner’s rights or obligations under Ordinance No. 39, any Water Use Permit issued thereunder, or any agreement entered into pursuant thereto that is not subsequently superseded. Such further agreements shall not require the Fiscal Sponsor to incur any cost or liability for changes which expand the scope of the Project (defined to include the Project Expansion). Furthermore, the agreement shall provide reasonable controls over expenditures and accounting of expenditures.
Section Seven: Agreements
with Public Participants
The General Manager is authorized to negotiate and, subject to the prior
approval or ratification by the Board, to execute such agreements as are
necessary or desirable to provide for the construction, equipping and operation
of the Project Expansion by CAWD and/or PBCSD in conjunction with the
continuing operation and maintenance of the Original Project by CAWD and/or
PBCSD. All financial commitments for
the construction, ownership, and operation of the Project Expansion shall be
payable first from Operating Revenues of the facility including any reserves
therefor, then from the funds provided by PBC from the proceeds of the separate
sale and conveyance of PBC’s Water Entitlement and Water Use Permits to other
Owners of the Benefited Properties as provided in Section Three of this
ordinance, and lastly from any other funds lawfully available to MPWMD or any
other Public Participant.
All financial commitments of MPWMD and/or PBC under the Fiscal
Sponsorship Agreement for the continuing operation and maintenance of the
Original Project by CAWD and/or PBCSD shall be unaffected by this
ordinance. In the event that PBC
requests, or the Public Participants otherwise determine that it is
appropriate, to issue refunding bonds or other obligations in order to
refinance the Capital Cost of the Reclamation Project, MPWMD shall cooperate
with such Public Participants in providing for the issuance of such
obligations.
Section Eight: Purchase of Recycled Water from the
Reclamation Project
The General Manager is authorized to negotiate and, subject to the prior
approval or ratification by the Board, to execute agreements with the owners of
such Recycled Water Irrigation Areas as may from time to time be located within
the Del Monte Forest (as defined in Exhibit B), and within the Cal-Am service
area (collectively called the “Recycled Water users”) for the purchase and sale
of Recycled Water from the Project. All
agreements shall: (1) require the Recycled Water users to purchase such
Recycled Water for a term not less than twenty (20) years; (2) provide for a
guarantee by CAWD and/or PBCSD, as the Project operators of the Project
Expansion, of the delivery of Recycled Water from the Project to such Recycled
Water users to meet all of their irrigation requirements except during an
Emergency as defined herein; (3) prohibit such Recycled Water users, after
completion of the Project Expansion, from using any potable water from Cal-Am
to irrigate any portion of the Recycled Water Irrigation Areas except during an
Emergency as defined herein, provided, however, that the use of potable water
during any such Emergency shall be further limited as may be required by the
Board in response to water shortage emergency declared by the Board pursuant to
Section 332 of the Monterey Peninsula Water Management District Law throughout
the duration of such water shortage emergency; and (4) after the expiration of
the Financial Commitment of the Fiscal Sponsor, require MPWMD to impose rates
and charges for Recycled Water sufficient to maximize payment for Operation and
Maintenance Expenses and Capital Costs of the Reclamation Project, subject to
the limitation set forth in Water Code section 13550 that the price for
Recycled Water shall be comparable to the cost of supplying potable domestic
water except as the parties to the Related Agreements may agree in writing
otherwise.
The General Manager shall establish a billing and collection procedure
to ensure the timely collection of revenues under these agreements.
Section Nine: Severability
If any subdivision, paragraph, sentence, clause or phrase of this ordinance is, for any reason, held
to be invalid or unenforceable by a court of competent jurisdiction, such
invalidity or unenforceability, shall not affect the validity or enforcement of the remaining portions of this
ordinance, or of any other provisions of the
Monterey Peninsula Water Management District Rules and Regulations. It is
MPWMD’s express intent that each
remaining portion would have been adopted irrespective of the fact that one or more subdivisions, paragraphs,
sentences, clauses, or phrases be declared invalid or unenforceable.
On motion by Director ________________________, and second by Director
_____________________, the foregoing ordinance is adopted upon this _____ day
of _______________, 2003, by the following vote:
AYES:
NAYS:
ABSENT:
I, Fran Farina, Secretary to the Board of Directors of the Monterey
Peninsula Water Managemnet District, hereby certify the foregoing is a full,
true and correct copy of an ordinance duly adopted on the _______ day of
________________, 2003.
Witness my hand and seal of the Board of Directors this ____ day of
________________, 2003.
_____________________________________
Fran Farina, Secretary to the Board
U:\staff\word\boardpacket\2003\2003boardpacket\20030915\PublicHearings\6\item6_exh6a.doc
EXHIBIT A
|
OWNER |
|
ORIGINAL
WATER ENTITLEMENT
(af/yr) |
|
QUANTITY
OF WATER CURRENTLY BEING PUT TO USE [1] (af/yr) |
|
QUANTITY OF WATER ENTITLEMENT
REMAINING UNUSED 1
(af/yr) |
|
Pebble Beach Company |
|
365.000 |
|
9.298 |
|
355.702 |
|
Macomber Estates |
|
10.000 |
|
9.654 |
|
0.346 |
|
Griffin Trust |
|
|
3.716 |
|
1.285 |
All real property
within the boundaries of Del Monte Forest as defined in Exhibit ”B” and such
additional real property as has been designated and included as Benefited
Properties under the Fiscal Sponsorship Agreement pursuant to amendments
thereto as previously approved by the MPWMD Board.
EXHIBIT B
DEL MONTE FOREST