EXHIBIT 2-A (1)
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 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.
7. 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).
8. 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.
9. The facilities comprising the Original
Project have been completed and are owned and operated either by CAWD or by the
Pebble Beach Community Services District (“PBCSD”) pursuant to an agreement
between such agencies.
10. 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.
11. 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 or control 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.
12. 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. The Project Expansion, when implemented,
will eliminate the need for reliance on supplemental potable water for the
irrigation of vegetated areas within the Del Monte Forest as defined in Exhibit
B to this Ordinance (except in cases of an Interruption as defined in this
ordinance), thereby conserving additional potable water. It has been estimated by the parties primarily
involved in the planning of the Project Expansion (CAWD, PBCSD, PBC, and the
Independent Reclaimed Water Users Group (“IRWUG”)) that the Original Project
together with the Project Expansion will produce sufficient quantities of
Recycled Water each year to
meet all of the irrigation needs of the Recycled Water Irrigation Areas without the addition of any potable water thereto
(except during an Interruption as defined herein).
13. The
parties primarily involved in the planning of the Project Expansion (CAWD,
PBCSD, PBC, and IRWUG) contemplate that the Forest Lake Reservoir, one
component of the Project Expansion, when filled to its capacity of 420 acre
feet, will provide storage sufficient for 60 days supply during the period when
irrigation usage is the greatest. Thus,
if the Forest Lake Reservoir is filled, this storage will enable the Project to
continue to provide Recycled Water even during a shutdown of the CAWD
wastewater treatment plant or a break in (or other event preventing the
continuous delivery of Recycled Water through) the distribution facilities
“upstream” of the Forest Lake Reservoir.
14. Therefore, the parties primarily involved in
the planning of the Project Expansion (CAWD, PBCSD, PBC, and IRWUG) have
concluded that, after the Project Expansion is Completed, the use of supplemental
potable water for irrigation on the Recycled Water Irrigation Areas, as defined
in this Ordinance, will likely be necessary, if at all, only if one of the
following four circumstances should occur: either (1) the Forest Lake Reservoir
is destroyed or otherwise rendered inoperable, or (2) the facilities conveying
Recycled Water to Forest Lake Reservoir are destroyed or otherwise rendered
inoperable at a time when storage in Forest Lake Reservoir has fallen below 50
acre feet, or (3) the facilities conveying Recycled Water from Forest Lake
Reservoir to Recycled Water Irrigation Areas are destroyed or otherwise
rendered inoperable, or (4) the CAWD wastewater treatment plant or the PBCSD
transmission facilities are rendered unable to deliver Recycled Water to the
Forest Lake Reservoir for a period of time that allows the Recycled Water then
remaining in storage Forest Lake Reservoir to be exhausted.
15. The parties primarily involved in the
planning of the Project Expansion (CAWD, PBCSD, PBC, and IRWUG) have conferred
with and advised MPWMD that they have concluded that the most effective means
of financing and implementing the Project Expansion without public funds will
be to make a portion of PBC’s existing Water Entitlement available for separate
sale and conveyance, 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.
16. This ordinance shall authorize PBC, on
terms and conditions set forth in Section Three of this ordinance, to
separately sell and convey portions of its Water Entitlement for use on lands
within the Del Monte Forest (as defined in Exhibit “B”) not owned by PBC at the
time that this ordinance is adopted, through which PBC will attempt to raise
funds sufficient 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 financing of the Project Expansion, as more particularly described
below.
17. 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 the terms of 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 Supplemental Financing Ordinance of the Monterey Peninsula Water Management District.
Section
Two: Purpose
It is the primary purpose of this
ordinance to facilitate the financing of the Project Expansion. The objective of the Project Expansion is to
provide sufficient quantities of Recycled Water of a quality suitable for
irrigation of even the most water quality-sensitive plants on the golf courses
and other vegetated areas located within the Del Monte Forest (“Recycled Water
Irrigation Areas”), and thereby to completely eliminate the use of potable
water for such irrigation (except during an Interruption as defined herein). The Water Entitlement and Water Use Permits
represent a portion of the potable water freed up by the implementation of the
Original Project. However, the Original
Project has not to date produced sufficient quantities of Recycled Water of a
quality suitable for all irrigation needs within the Recycled Water Irrigation
Areas.
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 a specific area of four lots
immediately adjacent thereto, which portions are collectively defined as the
“Benefitted Properties” in the Fiscal Sponsorship Agreement as amended. The MPWMD Board authorized certain
amendments to the definition of such “Benefitted Properties” prior to the date
that this ordinance is adopted.
This ordinance further authorizes
PBC to separately convey, for valuable consideration, portions of PBC’s
existing Water Entitlement solely for dedication to residential property,
within the Del Monte Forest that is not owned by PBC as of the date that this
ordinance is adopted. Any portion of
the Water Entitlement thus conveyed may be used only on the specific property
to which it is first dedicated following the conveyance, and the water shall be
put solely to Residential use through a Residential Connection (as those
capitalized terms are defined in Rule 11), and at no time shall any
portion of such water be classified in any User Category other than Residential (as defined in Rule 11). All of the proceeds from each of these separate
conveyances shall be applied exclusively to the costs of the Project Expansion
and the Original Project as more specifically described in Subsections E, I,
and J of Section Three.
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 attempt to raise funds to finance all Capital Costs of
the Project Expansion. Funds thus
raised in excess of the amount needed for Capital Costs shall be applied to the
the costs of the Project Expansion and Original Project as more specifically
described in Subsections E, I, and J of 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 the terms of 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 as
set forth in the Fiscal Sponsorship Agreement, the agreement deemed by MPWMD to
be “necessary or desirable” pursuant to Parts VI and 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.
These Water Use Permits authorize 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 Properties,” in Exhibit “A”
thereto as subsequently amended).
B. The parties primarily involved in the
planning of the Project Expansion (CAWD, PBCSD, PBC, and IRWUG) have conferred
with MPWMD and have concluded that the most effective means of financing and
implementing of the Project Expansion without public funds is to expand the
scope of the Benefited Properties within the Del Monte Forest, and to allow
PBC, on terms and conditions set forth in the following Subsections of Section
Three of this ordinance, to separately sell and convey portions of its existing
Water Entitlement solely for dedication to the Benefited Properties (as defined
in this Ordinance) not owned by PBC as of the date that this ordinance is
adopted. PBC will devote and apply the
proceeds of such sales and conveyances to the costs of the Project Expansion
and the Original Project as more specifically described in Subsections E, I, and
J of this Section Three. C.
In recognition of PBC’s Supplemental
Financial Commitment concerning the Project Expansion through the sale of
portions of its Water Entitlement (subject to the terms and conditions
specified in this ordinance and in Rule 23.5), PBC is hereby authorized to
separately sell and convey to other owners of land within Del Monte Forest, for
such consideration and upon such terms and conditions as PBC in its discretion
may determine, such portions of its Water Entitlement as it may choose, provided
that no such conveyance shall be effective unless and until PBC has provided
the Supplemental Financial Commitment as described in Subsections I and J of this Section Three; and provided
further that each portion of the PBC Water Entitlement thus conveyed:
(1) shall be dedicated solely to property within the Del Monte Forest
that is not owned by PBC as of the date that that this ordinance is adopted;
(2) shall be put solely
to Residential use through a Residential
Connection (as those capitalized terms are defined in Rule 11), and at
no time shall any portion of such water be classified in any User Category other than Residential (as defined in Rule
11);
(3) shall be offered on a right of first refusal basis to persons on the Monterey County waiting list for approved residential development projects awaiting water availability within the Del Monte Forest whose intended use is consistent with the preceding two subparagraphs (1) and (2), and
(4) the proceeds therefrom shall be applied to the costs of the Project Expansion and the Original Project as more specifically described in Subsections E, I, and J of this Section Three.
D. As of the date that PBC provides the
Supplemental Financial Commitment, each recipient of a portion of PBC’s Water
Entitlement sold and conveyed pursuant to Subsection C shall be entitled to
issuance by the General Manager of a Water Permit, the face of which shall
limit uses to those permitted under the
User Category entitled “Residential”
(as these terms are defined in Rule 11), for
such amount of the Water Entitlement as is documented in the conveyance
documentation presented to the General Manager. The General Manager shall simultaneously note, on the face of the
Water Permit issued pursuant to Rule 23.5 (and Rule 23 to the extent consistent
with Rule 23.5), the quantity of the Water Entitlement thus conveyed and shall
simultaneously account for a commensurate reduction 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 of this Section Three shall be used to pay for, in
the first instance, the Capital Costs of the Project Expansion. Any
proceeds from such sales in excess of the Capital Costs of the Project
Expansion shall be used to pay the Net
Operating Deficiencies of the Project or the Capital Costs of the Original
Project.
F. Any portion of the Water Entitlement of
PBC separately conveyed pursuant to Subsection C of this Section Three may be
used only on the specific property to which it is first dedicated following the
conveyance, and the water shall be put solely to Residential use through a
Residential Connection (as those capitalized terms are defined in Rule 11), and at no time shall any portion of such
water be classified in any User Category
other than Residential (as defined in Rule 11). In addition, the quantity of
water acquired pursuant to Subsection C of this Section Three (i.e., the
portion of the PBC Water Entitlement thus conveyed) and actually used shall not
exceed the quantity set forth in the Water Permit issued pursuant to Subsection
D of this Section Three. Each of these
restrictions of use shall be set forth on the face of the Water Permit, and notice thereof shall be recorded
in the form of a deed restriction against the Benefited Property to which the
conveyed Water Entitlement is dedicated.
G. Nothing in the first sentence of
Subsection F of this Section Three shall affect the right and ability of PBC to
use and apply, on Benefited Properties owned by PBC as of the date that that
this ordinance is adopted, such quantity of PBC’s Water Entitlement as has not
been sold and conveyed by PBC pursuant to Subsection C of this Section Three. Specifically, PBC shall continue to have the
right and ability to commence or to continue to apply and utilize the remaining
portion of its Water Entitlement on any or all Benefited Properties owned by
PBC as of the time that this ordinance is adopted, as provided in the Fiscal
Sponsorship Agreement, for any lawful use as determined by the appropriate
jurisdiction with land use authority thereover. In addition, PBC may sell and convey a parcel of land that it owns
together with a portion of PBC’s remaining Water Entitlement without being
required to apply any consideration received therefor to theSupplemental
Financial Commitment further described in Subsections I and J of this Section
Three. However, as a condition for the
preceding sentence, PBC shall provide such information as is necessary for
MPWMD to demonstrate that no money or other valuable consideration has been
separately given or received for the portion of the Water Entitlement conveyed
with the land (other than reimbursement for the Rule 24 connection fee or other
Cal-Am or MPWMD fees or charges paid by PBC).
H. All Water Use Permits issued pursuant to
Subsection D of this Section Three to evidence the portions of the Water
Entitlement separately conveyed by PBC pursuant to Subsection C of this Section
Three shall not be Revoked (as defined in Rule 11) or Terminated as defined
herein with respect to the entire Water Entitlement so conveyed; provided,
however, in each case, that the actual use of water on each of the properties
to which a portion of the Water Entitlement is dedicated (after conveyance by
PBC pursuant to Subsections C and D of this Section Three) shall at all times
remain subject to the limitations and restrictions referenced in Rule 23.5 on
the same basis as other customers of Cal-Am, and that such water use rights
shall be subject to modification after year 2075 as provided in this ordinance
and in Ordinance No. 39.
I. Pursuant to the Recycled Water Project
Supplemental Financing Agreement (“Supplemental Financing Agreement”), an
agreement to be entered into between MPWMD and PBC in connection with the
approval of this ordinance, PBC
will use its good faith efforts to sell such portions of its Water Entitlement
pursuant to Subsection C of this Section Three as PBC in its discretion may
determine to raise the funds necessary to
cover the Capital Costs of the Project Expansion. At the end of each month after the effective date of this
Ordinance, PBC shall report to MPWMD, in a manner that shall not adversely
impact its continuing ability to sell
such portions of its Water Entitlement pursuant to Subsection C of this
Section Three, on PBC’s progress in raising the Supplemental Financial
Commitment.
J. As of the date of adoption of this ordinance, the Capital Costs of the Project Expansion
are estimated at $ million but may exceed this estimated amount. At such time as the proceeds received by PBC for the separate
sale of portions of its Water Entitlement pursuant to Subsection C of this
Section Three (combined with any funds which may be independently committed by
PBC, IRWUG, CAWD, PBCSD, or any other entity willing to commit funds to the
Capital Costs of the Project Expansion)which funds are collectively called the
“Supplemental Financial Commitment,” are, in the judgment of PBC, sufficient to
pay for the Capital Costs of the Project Expansion, and CAWD and PBCSD each
concur in writing that the Supplemental Financial Commitment is available for
their use and that each is prepared forthwith to commence construction of the Project
Expansion, PBC will give notice to MPWMD that the Supplemental Financial
Commitment has been provided, together with evidence of CAWD’s and PBCSD’s
respective intent to forthwith to
commence construction of the 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 Pebble
Beach Company (“PBC”), J. Lohr
Properties, Inc. (“Lohr”), and the
Hester Hyde Griffin Trust (“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 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 prospective 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 terminate 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 water use for non-payment of such fees and charges;
(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 Rule Ordinance:
(a) the Water Entitlement allocated to the
Benefited Properties as a whole shall not exceed 380 AF,
(b)
the water usage under the Water Entitlement 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 the manner set forth in Subsections
C.4 and C.5 of Rule 23.
Further, notwithstanding any other provision of this Rule, once a new water connection is
established through issuance of a Water
Permit and use of all or a portion of a Water Entitlement, such usage shall be subject to
verification of water use capacity pursuant to Subsection E of Rule 23 and
shall be enforced in a manner identical to that applicable to other similarly
situated water users within MPWMD, and 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 rRevoked
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.
Portions of the
Water Entitlement evidenced in 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 or
Water Permit from MPWMD to confirm the portion of the Water Entitlement
acquired 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 after the providing of the
Supplemental Financial Commitment to finance the Project Expansion and then
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 the Fiscal
Sponsor shall provide that it shall be revoked and terminated in the event
that the 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.
All
Water Use Permits issued to evidence the Water Entitlement conveyed by PBC
pursuant to Subsections C and D of Section Three of Ordinance No. 109 shall not
be Revoked (as defined in Rule 11) or Terminated as defined herein with respect
to the entire Water Entitlement so transferred except as set forth in the
following sentences.
In addition, nNotwithstanding the preceding sentences of this Subsection D
any other provision of this Ordinance, the
actual use on each of the properties to which a portion of the Water
Entitlement is dedicated (after conveyance by PBC pursuant to Subsections C and
D of Section Three of Ordinance No. 109) shall at all times remain subject to
the limitations and restrictions referenced in Subsections A through C of this
Rule 23.5 on the same basis as other customers of Cal-Am. Moreover, 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, 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.
For example, all
persons using water from the Cal-Am water distribution system are required to
reduce their water usage in the various stages in MPWMD’s Expanded Water
Conservation and Standby Rationing Plan, and may be penalized or their water
service may terminated for failing to reduce water usage as required. Similarly, all such persons must pay the
rates and charges imposed for such water service, or their water service may be
terminated.
E. CAL-AM
SYSTEM EXPANSION/EXTENSION AND ISSUANCE
OF 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)Subject to the other provisions of this
Rule, 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 without regard to the existence of a
moratorium or a temporary delay on new connections, 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 Water
Release Request from the person whose Water Entitlement will be utilized
(rather than from the Jurisdiction as discussed in Rule 23) and 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 in the manner
set forth in Subsections C.4 and C.5 of MPWMD Rule 23 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 determined as set forth in the
preceding subsection E.1(d)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 issue make a notation on the new Water Use Permit, or a
Water Permit pursuant to those provisions of Rule 23 authorizing the
expansion/extension of the Cal-Am water distribution system consistent with this Rule 23.5, which Water
Permit shall indicateing
the location, estimated usage measured as
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 and calculated in the manner described in
Subsections C.4 and C.5 of Rule 23. 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 record of the respective amounts deducted from and remaining under the
pertinent notation on such Water Use Permit indicating the remaining Water
Entitlement (as evidenced in the Water
Use Permit) in the manner described in Subsection C.6 of Rule 23.
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, in the case of PBC, PBC’s
Benefited Properties) 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. 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 other laws, ordinances, or
regulations as are generally applicable to persons actually using water from
the Cal-Am water distribution system, nor is it intended to provide or imply
that any Water Use Permit holder shall not be subject to such laws, ordinances,
and regulations.
For example,
notwithstanding the provisions of the preceding subparagraph, all persons using
water from the Cal-Am water distribution system are required to reduce their
water usage in the various stages in MPWMD’s Expanded Water Conservation and
Standby Rationing Plan, and may be penalized or their water service may
terminated for failing to reduce water usage as required. Similarly, all such persons must pay the
rates and charges imposed for such water service, or their water service may be
terminated.
F. PROCEDURE
IN CASE OF INTERRUPTION OF RECYCLED WATER DELIVERIES
1. If
there is an Interruption in Recycled Water deliveries to any Recycled Water
Irrigation Area, the temporary use of potable water for irrigating each such
Recycled Water Irrigation Area is authorized in the manner described in this Subsection
F. Following written notice to MPWMD
from an owner of the affected area, CAWD, PBCSD and/or Cal-Am, CAWD, PBCSD
and/or Cal-Am are authorized to turn on the connection by which potable water
enters the distribution system serving the
Recycled Water Irrigation Areas (the Poppy Hills tank as of the date
that Ordinance 109 is adopted).
2. If
potable water usage continues for longer than [30] days, MPWMD may hold a hearing to determine what quantities of
potable water shall continue to be supplied for irrigation of the affected
Recycled Water Irrigation Area. Under
normal circumstances, the use of potable water for irrigation of a Recycled
Water Irrigation Area shall not extend for any longer than the period of time
reasonably required to promptly
and diligently complete repair or
replacement activities necessary to restore Recycled Water service, provided
that potable water shall be made
available for irrigating tees and greens without any limitation on the
duration.
3. MPWMD shall give the owners of each affected
Recycled Water Irrigation Area not less than [ ] days written
notice of any such hearing. Upon
rendering its determination of what quantities of potable water shall continue
to be supplied for irrigation of the affected Recycled Water Irrigation Area,
MPWMD shall give the owners of the affected Recycled Water Irrigation Area not
less than 10 days written notice of any hearing determination, and the
determination shall take effect on the 11th day following service of the notice
by personal delivery or by facsimile, or the 16th days following service of the
notice by mail.
G. 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 unincorporated portion of 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 by CAWD or by PBCSD 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 January
1, 1995, 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, to the extent that corresponding expenses
concerning the implementation of the Original Project were treated as
reimbursable.
5. Payment of any expenses incurred to track and record changes in the Water Entitlements following issuance of new Water Use Permits or Water Permits, to verify water use capacity pursuant to Subsection E of Rule 23, to otherwise monitor compliance with or to enforce actual water usage pursuant to such laws, ordinances, and regulations as are generally applicable to persons actually using water from the Cal-Am water distribution system, and to make such determinations concerning adjustments, and to implement and enforce the 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 both the Carmel Area
Wastewater District and the Pebble Beach Community Services District, in
reference to the Project.
“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.
“Completed” with respect to the Project Expansion shall mean that (1) all required permits or other approvals have been obtained, (2) all construction activities for the advanced treatment components (being added to the tertiary treatment plant facilities of the Original Project), Forest Lake Reservoir, and all treatment, and distribution facilities associated therewith, have been completed and tested in accordance with their respective approved plans, permits and other approvals, (3) Forest Lake Reservoir has been filled to capacity with “Recycled Water” suitable for irrigation of all portions of the Recycled Water Irrigation Areas without the addition of any potable water thereto and otherwise meeting all regulatory and health standards for such usage, and (4) all portions of the distribution system are capable of delivering such Recycled Water to the Recycled Water Irrigation Areas.
“Del Monte Forest”
means the area of unincorporated Monterey County described and/or depicted on Exhibit “B”
“Emergency”
means one or more sudden, unexpected occurrences, beyond the reasonable control
of the entity having operation and maintenance responsibilities of a particular
facility comprising part of the Project, that interrupt the supply of Recycled
Water to the Recycled Water Irrigation Areas,
demanding immediate and diligent action by such entity 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.
“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
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.
“Interruption,” for
the purposes of Rule 23.5 and Ordinance No. 109, means an interruption for
longer than { [hours] [days]} in the supply of Recycled Water to a
Recycled Water Irrigation Area.
“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
water, debt service payments on 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 1994 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 treatment facilities of
the Original Project to produce “Recycled Water,” and the addition of storage,
treatment, and distribution facilities at or associated with 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.
The meaning of the
term “Recycled Water” depends upon whether or not the Project Expansion is
Completed:
(a) Before the
Project Expansion is Completed, “Recycled Water”
shall mean water originating from the tertiary treatment facilities of the CAWD
wastewater treatment plant.
(b) After the
Project Expansion is Completed, “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
the Recycled Water Irrigation Areas without the addition of any potable water
thereto (except during an Interruption 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.
“Supplemental
Financial Commitment” means the funds that PBC will raise through the
sale of such portions of its Water Entitlement pursuant to Subsection C of
Section Three of Ordinance 109 (combined with any funds which may be
independently committed by PBC, IRWUG, CAWD, PBCSD, or any other entity willing
to commit funds to the Capital Costs of the Project Expansion). Pursuant to Subsection E of Section Three of
Ordinance 109, any proceeds received by PBC
from the sales of portions of PBC’s Water Entitlement pursuant to Subsection C
thereof shall be applied to payment of the Capital Costs of the Project
Expansion (including repayment of any funds independently committed by PBC,
IRWUG, CAWD, PBCSD, or any other entity as a part of the Supplemental Financial
Commitment), and any proceeds from such sales in excess of the Capital Costs of
the Project Expansion shall be applied to the Net Operating Deficiencies of the
Project or the Capital Costs of the Original Project.
“Terminate” means the withdrawal, without formal MPWMD action, of authority to act as previously provided by a valid permit or water service connection, whichever is applicable.
“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 to the costs of
the Project Expansion and the Original Project as more specifically described
therein.
“Water Permit” means a permit issued by MPWMD authorizing
the expansion/extension of the Cal-Am water distribution system pursuant to a
specific portion of a Water Entitlement (as evidenced by a Water Use Permit
issued pursuant to MPWMD Rule 23.5).
Upon compliance with Subsection F of Rule 23.5, MPWMD shall by
non-discretionary ministerial action, cause the present Expansion/Extension of
the Cal-Am water distribution for Benefitted Properties. A Water Permit shall take the place of and
be used instead of any Expansion/Extension Permit (as defined pursuant to Rule
23) upon any Benefited Property as relates to the use of a specified portion of
the Water Entitlement.
“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 and 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
by the Board, to execute a Supplemental Financing Agreement with PBC, and such
further agreements with Cal-Am and PBC as are necessary or desirable,
(a) to
provide the terms and conditions upon which portions of the Water Entitlement
will be conveyed by PBC to, and used on, Benefited Properties not owned by PBC
as of the date that this ordinance is adopted in the manner provided in this
ordinance;
(b) to provide the terms and conditions upon
which PBC shall attempt to raise the Supplemental Financial Commitment from
which all Capital Costs of the Project Expansion shall be paid (primarily from
the proceeds received by PBC from any separate conveyance of a portion of PBC’s
Water Entitlement as described in Subsections C or D of Section Three of this
ordinance); and
(c) to
provide the terms and conditions upon which PBC shall assure and guarantee,
with minimal fiscal risk to MPWMD or any other Public Participant, payment of
the Net Operating Deficiencies of the Project as a whole.
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 the Supplemental Financing Agreement or any such further
agreements.
The Supplemental Financing Agreement shall provide reasonable controls over expenditures and accounting of expenditures and shall not require the Fiscal Sponsor to incur any cost or liability for changes which expand the scope of the Project beyond the Project Expansion.
The
Supplemental Financing Agreement shall not affect the Water Entitlement
evidenced by the issuance of Water Use Permits, or such other Water Permits
issued by MPWMD for a portion thereof as of the date that this ordinance is
adopted, or the Financial Commitment made by PBC (concerning the Original
Project) in the Fiscal Sponsorship Agreement, or the acknowledgement thereof by
MPWMD. 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.
The failure to enter into the Supplemental Financing Agreement or 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.
Section 6: Agreements
with Public Participants
The
General Manager is authorized to negotiate and, subject to the prior approval
by the Board, to execute a Supplemental Construction and Operation Agreement,
and such agreements as are necessary or desirable, to provide for the
respective construction, equipping and operation of the Project Expansion by
CAWD and PBCSD in conjunction with the continuing operation and maintenance of
the Original Project by CAWD and PBCSD, respectively. Such agreements shall provide that, except for the funds
available in an Operating Reserve for the Project to be established under the
Supplemental Construction and Operation Agreement, the only funds of MPWMD or
any other Public Participant to be used to pay for the construction, equipping
and operation of the Project Expansion by CAWD and PBCSD, respectively, or the
operation and maintenance of the Original Project by CAWD and PBCSD,
respectively, shall be the revenues received by MPWMD from the sales of
Recycled Water from the Project.
All
financial commitments under the Fiscal Sponsorship Agreement for the continuing
operation and maintenance of the Original Project by CAWD and PBCSD,
respectively, shall be unaffected by this ordinance. In the event that PBC or
the Public Participants request to issue refunding bonds or other obligations
in order to refinance any portion of the Capital Cost of the Project, MPWMD
shall cooperate with such Public Participants in providing for the issuance of
such obligations.
Section Seven: Purchase
of Recycled Water from the Project
The
General Manager is authorized to negotiate and, subject to the prior approval
by the Board, to execute an Agreement for Sale of Recycled Water with each
owner of one or more Recycled Water Irrigation Area(s) providing for the
purchase and sale of Recycled Water from the Project. Each such Agreement for Sale of Recycled Water 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 Interruption as defined herein;
(3)
prohibit such Recycled Water users, after completion of the Project Expansion,
from using any potable water to irrigate any portion of the Recycled Water
Irrigation Areas except during an Interruption as defined herein, provided,
however, that the use of potable water during any such Interruption 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)
provide for the timely payment and collection of revenues for Recycled Water,
and
(5)
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.
Section Eight: 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\20
031020\PublicHearings\2\item2_exh2a_1.doc
EXHIBIT A
|
OWNER |
|
ORIGINAL
WATER ENTITLEMENT
(af/yr) |
|
QUANTITY
OF WATER ENTITLEMENTFOR WHICH WATER PERMITS HAVE BEEN ISSUED [1]
(af/yr) |
|
QUANTITY OF WATER ENTITLEMENT
FOR WHICH WATER PERMITS HAVE NOT BEEN ISSUED 1
(af/yr) |
|
Pebble Beach Company |
|
365.000 |
|
9.882 |
|
355.118 |
|
Macomber Estates |
|
10.000 |
|
9.654 |
|
0.346 |
|
Griffin Trust |
|
|
3.716 |
|
1.285 |
BENEFITED
PROPERTIES
All
real property within the boundaries of the unincorporated portions of the 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 approved by the MPWMD
Board before the date that this ordinance is adopted and Rule 23.5 is
amended thereby. [We will need a legal description of the
portion of the Benefited Properties located outside the Del Monte Forest.]
EXHIBIT B
DEL MONTE FOREST