AGREEMENT FOR PURCHASE AND SALE OF RECYCLED WATER
Between the City of Daly City,
and the North San Mateo County Sanitation District,
Lake Merced Golf Club,
San Francisco Golf Club,
and the City and County of San Francisco,
by and through the San Francisco Public Utilities Commission
TABLE OF CONTENTS
AGREEMENT FOR PURCHASE AND SALE OF RECYCLED WATER
1. Definitions1.1 Basin2. Term of Agreement
1.2 Consumer Price Index
1.3 Force Majeure Event
1.5 Points of Delivery
1.6 Tertiary Recycled Water2.1 Term3. Quantity and Rate of Delivery
2.2 Renewal and Notice3.1 Delivery4. Chemical Quality of Tertiary Recycled Water
3.2 Take or Pay Component
3.3 Use of Groundwater by Clubs
3.4 Clubs’ Production of Groundwater; Resale
5. New Facilities5.1 Responsibility for Construction of Tertiary Recycled Water Project Facilities6. Clubs Duty to Operate and Maintain Facility
5.2 Cost of New Capital Facilities
7. New Storage Facilities
8. Target Date for Completion of Facilities
9. Priority for Use of Tertiary Recycled Water
10. Price10.1 Base Price11. SFPUC System Injection and Recovery Wells
10.2 Price Escalator
10.3 Additional Price Adjustments11.1 General12. Daly City Groundwater Rights
11.2 Acknowledgement of Water Rights
11.3 Use of SFPUC Injection and Recovery Wells
11.4 Grant of Well Sites by Clubs
11.5 Installation of Appurtenant Facilities by SFPUC
11.6 Emergency Use by Clubs of Irrigation Water from SFPUC Well Site Facilities
11.7 Indemnity of Clubs
11.8 Waiver of Groundwater Claims by Daly City
13. Scheduling of Irrigation
14. Force Majeure
16. Public Notices and Shielding
18. Indemnification18.1 Indemnification by Daly City19. Permits
18.2 Indemnification Procedures
20. Territorial Jurisdiction
21. Mediation21.1 Participation in Mediation22. Arbitration
21.3 Costs22.1 Disputes to be Settled by Arbitration23. Termination
22.2 Additional Provisions
22.3 Judgment on Awards
22.6 No Termination While Arbitration Pending
24. Miscellaneous Provision24.1 Conditions Precedent 2625. Representations, Warranties and Covenants
24.2 Assignment 27
24.3 Notice 27
24.4 Governing Law 28
24.5 Entire Agreement 28
24.6 Amendment 28
24.7 Emergency Conditions 29
24.8 Delay in Payment 29
24.9 Relationship of the Parties 29
24.10 Severability 30
24.11 Waiver 30
24.12 Further Assurances 30
24.13 References 31
24.14 Counterparts 31
AGREEMENT FOR PURCHASE AND SALE OF RECYCLED WATER
THIS AGREEMENT is dated and effective this _____ day of ______________, 2002 by and between the City of Daly City, and the North San Mateo County Sanitation District (collectively referred to as "Daly City"), a municipal corporation, and the Olympic Club ("Olympic"), a California corporation, Lake Merced Golf Club ("LMGC"), a California corporation and San Francisco Golf Club ("SFGC"), a California corporation, and the City and County of San Francisco, by and through the San Francisco Public Utilities Commission ("SFPUC"). (Olympic, LMGC and SFGC are collectively referred to herein as the "Clubs"; the Clubs, Daly City and SFPUC are collectively referred to herein as the "Parties.")
A. On or about April 9, 1996, the Parties entered into a Memorandum of Understanding (MOU) setting forth the principles to govern the negotiations of the Parties regarding the Clubs’ utilization of tertiary-treated recycled water (hereinafter "Tertiary Recycled Water") from treatment facilities to be located at the Daly City wastewater treatment plant, which is owned and operated by the North San Mateo County Sanitation District (a subsidiary district of Daly City), for a portion of the Clubs’ irrigation water supply.
B. The Clubs and the City of Daly City have pursued this Agreement recognizing the benefits of preservation of the potable water aquifer for periods of water shortage, protection against possible saltwater intrusion, creation of an additional dependable supply of irrigation water (recycled) for the Clubs, and an additional dependable supply of potable water to meet the needs of the community as well as to enhance the condition of Lake Merced.
C. Since execution of the MOU, representatives of the Clubs and Daly City have been negotiating in good faith regarding the quantity and quality of Tertiary Recycled Water required by the Clubs, and regarding the terms and conditions under which Tertiary Recycled Water will be supplied to the Clubs by Daly City.
D. Daly City is in the process of completing its planning and design of the recycling facilities that will be required at the wastewater plant before a supply of Tertiary Recycled Water of adequate quantity and quality is available for use by the Clubs.
E. The SFPUC has encouraged the completion of a Tertiary Recycled Water Agreement between Daly City and the Clubs, and is willing to contribute to the capital costs of Daly City's recycling facilities.
F. The SFPUC's conjunctive use and management program for the Westside Basin (Basin) will include efforts to increase recharge of the Basin and to facilitate reliance on the Basin for water supply purposes during droughts and emergency water shortage periods. These efforts include encouragement of water recycling, development of new SFPUC system wells which can be used both for the injection and recovery of SFPUC system water stored in the Basin, and the use of injection and recovery well sites on the Clubs' properties to improve conditions at Lake Merced and to benefit the SFPUC water service area.
G. Each Club is willing to enter into a separate agreement with the SFPUC pursuant to which each Club will grant to the SFPUC a fee or easement interest for a well site for the injection and recovery of SFPUC system water, including facilities to connect those wells to the SFPUC or Daly City water systems, subject to the terms and conditions of such separate agreement. Benefits to the Clubs derived from such well sites include reduced pump lifts for the Clubs' remaining groundwater use supplies; availability of a new irrigation water source in the event that Club wells fail; an overall increase in the reliability of the Clubs' water supplies; and increased water levels in the Basin available for the purpose of improving Lake Merced water levels.
H. The Parties desire to enter into this Agreement for the purpose of (i) establishing the terms and conditions under which Tertiary Recycled Water will be provided by Daly City to the Clubs; (ii) setting forth the contribution of the SFPUC to be made toward the capital costs of the Tertiary Recycled Water project; (iii) setting forth the agreement of each Club to grant a real property interest to be used by the SFPUC for a well site; and (iv) establishing certain other rights and obligations of the Parties, as set forth herein.
I. SFPUC and Daly City acknowledge that each of the Clubs has overlying rights to pump groundwater from beneath lands it owns for use on its properties.
In this context, the Parties agree as follows:
1. Definitions – Capitalized terms used in this Agreement have the meanings specified in this section or in the provision there referred to.
1.1 Basin – The Westside Groundwater Basin extending from Golden Gate Park in San Francisco on the North through the western portion of San Francisco, including the Lake Merced area, southeast through Daly City, South San Francisco and San Bruno to the San Francisco International Airport.
1.2 Consumer Price Index – The Consumer Price Index, All Urban Consumers, Bay Area (less the housing component of said Index).
1.3 Force Majeure Event – Events including:
1.3.1 flood, earthquake, acts of God and any other events (other than drought) beyond the reasonable control of the Parties;
1.3.2 final judgments or injunctive relief awarded by any court having jurisdiction, which judgments or injunctive relief have not been sought by any of the Parties;
1.3.3 any change in Law relating to water quality requirements for Tertiary Recycled Water which makes compliance with this Agreement impracticable; and
1.3.4 an emergency event beyond the control of the SFPUC (other than drought) which renders impossible the continued provision of water to the SFPUC service area to meet basic health and sanitation needs.
1.4 Law – applicable law, rule or regulation.
1.5 Points of Delivery – the point or points at which Tertiary Recycled Water will be delivered by Daly City to each Club, as described in Exhibit C hereto, and which may be changed by written agreement of each Club and Daly City without requiring an amendment to this Agreement.
1.6 Tertiary Recycled Water – Recycled water treated at the tertiary level by the North San Mateo County Sanitation District's Westlake Plant which meets the water quality criteria set forth in Title 22 of the California Code of Regulations (and any additional or changed criteria required by Law) and the parameters set forth in Exhibit A to this Agreement.
2. Term of Agreemen.2.1 Term – The provisions of this Agreement to supply Tertiary Recycled Water to the Clubs shall become effective on the date first written above and shall terminate forty nine (49) years following the first anniversary of the date on which Daly City commences fully operational Tertiary Recycled Water deliveries to the three Clubs.
2.2 Renewal and Notice – No later than five (5) years prior to termination of this Agreement (as provided in Section 2.1 above), notice may be given by one of more of the Clubs or Daly City of their desire to extend this Agreement upon terms and conditions mutually agreeable to the Parties. Each Club shall have a preferential right of renewal during consideration and negotiation of any new or renewed agreement for the use of Tertiary Recycled Water. The preferential right of renewal shall expire one (1) year following receipt of the notice described in the first sentence of this Section 2.2. In the event a new agreement is not reached, Daly City, at its option, may abandon in place the pipelines and other improvements installed to allow for Tertiary Recycled Water delivery and storage which are owned and operated by Daly City pursuant to this Agreement.
3. Quantity and Rate of Delivery3.1 Delivery – Daly City shall deliver to the Clubs at the Points of Delivery, in the aggregate, up to 2.6 million gallons per day (mgd) of Tertiary Recycled Water. Each Club shall periodically provide to Daly City a written schedule for delivery of Tertiary Recycled Water. The annual amount of Tertiary Recycled Water delivered to the Clubs pursuant to this Agreement is projected to be approximately 690 acre-feet on an average annual basis. Anticipated quantities to be delivered to each Club shall be set forth in Exhibit B hereto. The obligation to accept and pay for scheduled deliveries of Tertiary Recycled Water is an individual and several commitment of each Club. If the Point(s) of Delivery for any Club is located within the Club’s property line, Daly City will operate and maintain the facilities necessary to deliver Tertiary Recycled Water to the Point(s) of Delivery.
3.2 Take or Pay Component – Subject to the water quality requirements of Section 3.3, each Club agrees to purchase Tertiary Recycled Water made available to be delivered by Daly City to the respective Point of Delivery for that Club, whether used or not, in an amount not less than fifty percent (50%) of the average annual amount of Tertiary Recycled Water projected to be used by the Club (hereinafter "Take or Pay Component"). The annual aggregate amount of Tertiary Recycled Water to be purchased pursuant to this Section 3.2 is not less than 345 acre feet per year. Each Club’s proportionate share of the annual amount to be purchased pursuant to this Section 3.2 shall be as follows: Olympic –50%, LMGC –25%, SFGC – 25%. In the event that Daly City is unable to deliver any portion of the Take of Pay Component to any Club, that Club’s obligation to pay for Tertiary Recycled Water pursuant to this Section 3.2 shall be reduced to the extent of the shortfall.
3.3 Use of Groundwater by Clubs – The Clubs are entitled to use groundwater to supplement Tertiary Recycled Water delivered by Daly City. Each Club may use groundwater for up to thirty percent (30%) of its annual irrigation water use, calculated on an annual basis. Notwithstanding the foregoing, it is the goal of each Club, as understood by Daly City and the SFPUC, to increase usage of Tertiary Recycled Water to quantities greater than seventy percent (70%) of their total irrigation water (as calculated on an annual basis). In the event of Tertiary Recycled Water quality problems or inconsistencies that cause problems in regard to growing grass on playing or practice area surfaces, the Clubs shall use only such additional quantities of groundwater as the Clubs determine to be necessary to rectify the problem. Each Club shall provide Daly City and SFPUC with a schedule of their planned use of groundwater to supplement Tertiary Recycled Water. Each of the Parties agrees to meet, upon request by any other Party, to evaluate the utilization of Tertiary Recycled Water as well as potential increases in use for future periods. In the event that Daly City cannot deliver Tertiary Recycled Water in sufficient quantity and/or quality to meet any portion of any Club’s irrigation water demands or the Tertiary Recycled Water damages the Club’s playing surfaces, the Club may utilize groundwater to meet any irrigation water demand not met by Tertiary Recycled Water.
3.4 Clubs’ Production of Groundwater; Resale – Each Club agrees to forego production of groundwater in an amount equal to the amount of Tertiary Recycled Water purchased by the Club. The Clubs shall have no right to resell Tertiary Recycled Water.
4. Chemical Quality of Tertiary Recycled Water4.1 – The Tertiary Recycled Water delivered by Daly City shall meet or exceed the chemical water quality criteria set forth in the attached Exhibit A. The Parties agree that these criteria establish critical chemical water quality parameters based on the types of grass currently grown on the Clubs’ golf courses. The Clubs acknowledge the study prepared by Daly City dated April 11, 1997 as it relates to the prescribed method to control the adjusted Sodium Adsorption Ratio (aSAR), and Daly City will give further consideration to this method, and to alternative methods which may be more cost-effective, prior to Daly City's adoption of the method it will select for construction of its tertiary treatment facility; provided, however, that Daly City shall retain sole discretion in the selection of the design of all tertiary treatment facilities. Throughout the term of this Agreement, Daly City shall operate and maintain (including preventive maintenance) the Tertiary Recycled Water treatment and delivery system, to the Points of Delivery, in a manner to meet the water quality criteria set forth in Exhibit A hereto.
4.2 – Daly City shall notify the Clubs immediately if it becomes aware that the quality of the Tertiary Recycled Water fails or is reasonably expected to fail to meet the criteria specified in Exhibit A hereto and Daly City shall exercise due diligence in attempting to restore Tertiary Recycled Water quality to the criteria specified in Exhibit A hereto as quickly as possible. To the extent that Daly City produces recycled water that does not meet the criteria specified in Exhibit A, the responsibility to dispose of said water is solely Daly City’s. To the extent that recycled water which cannot be used for irrigation is delivered to any Club, Daly City shall be responsible for disposal of said water and for the cost of correcting any problems resulting from delivery thereof, including the cleaning of Club storage facilities if necessary.
4.3 – Once Tertiary Recycled Water operations have commenced at a Club, if problems occur related to the quality of the Tertiary Recycled Water, which such Club determines, in good faith, to be the cause of actual or potential damage to the playing or practice area surfaces of the Club’s golf course(s), Daly City and such Club shall meet and confer in good faith to solve the problems, if possible, in a manner which will permit the Tertiary Recycled Water operations to continue without damaging the golf course(s). Examples of solutions to be considered shall include, but not be limited to, additions or changes in chemicals added to the Tertiary Recycled Water, dilution of the Tertiary Recycled Water with groundwater, and cessation of the use of Tertiary Recycled Water until the problems are corrected. To the extent that such quality problems occur at more than one Club, the Clubs involved shall attempt to reach a common solution. Daly City and each Club agree to meet and confer in good faith should Daly City or any Club propose enhancements to the quality or quantity of Tertiary Recycled Water provided by Daly City.
4.4 – The Clubs acknowledge that adjustments in turf management practices may be appropriate, taking into account the use of Tertiary Recycled Water as the irrigation water supply, and such adjustments shall be within the sole discretion of each Club. Daly City shall concurrently make available to the Clubs copies of all monitoring reports regarding compliance of Tertiary Recycled Water with the criteria specified in Exhibit A hereto, including but not limited to all reports concerning water quality required to be filed with any regulatory agency with regard to the Tertiary Recycled Water and all reports concerning any regulatory agency with regard to salts or heavy metals contained in the secondary effluent which is supplied to the Tertiary Recycled Water facility. Daly City will provide the Clubs with copies of all water quality analyses performed with regard to the presence or sodium and other ions or salts in the Tertiary Recycled Water, or with regard to meeting the adjusted Sodium Adsorption Ration (aSAR) criterion identified in Exhibit A hereto. If Daly City has reasonable expectation that the Tertiary Recycled Water will not meet the criteria specified in Exhibit A hereto, Daly City shall immediately notify each Club.
4.5 – Daly City will install continuous monitoring devices at an appropriate location to monitor pH, turbidity, chlorine residual and electrical-conductivity (EC) of the finished Tertiary Recycled Water. Daly City will make this information available to the Clubs in a manner and on a schedule to be agreed upon in writing prior to the commencement of delivery of Tertiary Recycled Water, but in no event more that three (3) working days after said monitoring results are known to Daly City. The Clubs and Daly City will establish a process so this information is provided on a regular and routine basis.
4.6 – After conferring with the Clubs, Daly City shall take such steps as it determines to be necessary to comply with new or modified water quality criteria imposed by any regulatory agency of competent jurisdiction with regard to the Tertiary Recycled Water project. Should Daly City or any Club believe that modifications are necessary or desirable in the water quality criteria identified in Exhibit A hereto, Daly City and such Club will meet and confer. No changes shall be made in the water quality criteria without a written amendment to this Agreement.
5. New Facilities5.1 – Responsibility for Construction of Tertiary Recycled Water Project Facilities. Daly City will design, finance, construct, operate, own and maintain (including preventive maintenance, rehabilitation and replacement) all water treatment, transmission, storage, and pumping facilities necessary to produce and deliver Tertiary Recycled Water to the Points of Delivery designated by each of the Clubs, as depicted in Exhibit C hereto. The estimated cost for the construction of the facilities is approximately Six Million Dollars ($6,000,000.00). The SFPUC, through its Board of Supervisors, shall encumber One Million Dollars ($1,000,000) towards Daly City’s capital costs of the Tertiary Recycled Water facilities and shall pay these funds to Daly City by October 1, 2002, subject to the conditions precedent in Section 24.1. The SFPUC shall have no responsibility for any further costs related to the design, financing, construction, operation, maintenance or replacement of any facilities related to the production and delivery of Tertiary Recycled Water to the Clubs. Daly City shall have no responsibility for the transmission or storage of Tertiary Recycled Water after delivery to the Points of Delivery. Each Club will have the right to approve the location, the design of aboveground features, and the construction schedule for any work on its property, which approvals shall not be unreasonably scheduled or withheld. Pending completion of design, the location of anticipated new facilities is generally described in Exhibit C hereto. Prior to construction bid advertisements, the location of anticipated new facilities on a Club’s property may be changed by written agreement of such Club and Daly City without amending this Agreement. Each Club reserves the right during the term of this Agreement to provide written notice to Daly City of the date on which the Club will assume full responsibility for the ownership, operation and maintenance of Tertiary Recycled Water delivery facilities between the Club’s property line and the Point(s) of Delivery, in which case Exhibit C shall be changed as provided in Section 1.5.
5.2 – Cost of New Capital Facilities. In addition to the facilities for the delivery of Tertiary Recycled Water to the Point(s) of Delivery as provided in Section 5.1, Daly City shall be responsible for the design, construction and installation of those additional facilities essential for the Clubs to (i) switch from use of groundwater to use of Tertiary Recycled Water, and (ii) operate irrigation systems which will be capable of switching back and forth between Tertiary Recycled Water and groundwater, including but not limited to pipelines, valves, connections, control mechanisms, and instrumentation. Once such facilities are completed, the Clubs shall have sole responsibility for ownership, operation and maintenance of all such facilities. Once construction of any such facilities located on any Club’s property has been completed, inspected and accepted by Daly City and accepted by the Club (which acceptance shall not be unreasonably withheld) Daly City will transfer ownership of such facilities to the Club, the Club shall accept said transfers, and thereafter the Club shall have sole responsibility for ownership, operation, and maintenance of all such facilities located on its property from the Point of Delivery.
6. Clubs Duty to Operate and Maintain Facility– Each Club has an affirmative duty to operate and maintain its facilities to facilitate the delivery and use of Tertiary Recycled Water in accordance with this Agreement.
7. New Storage Facilities – In the event that any Club plans, designs or constructs new water storage facilities, the relationship of that storage to the Tertiary Recycled Water project, and cost responsibilities and allocations, will be the subject of a separate agreement between Daly City and such Club.
8. Target Date for Completion of Facilities – The Parties shall use their best efforts to complete construction of all facilities necessary for implementation of this Agreement, and to commence the delivery of Tertiary Recycled Water to the Clubs, on or before January 1, 2004.
9. Priority for Use of Tertiary Recycled Water – The Clubs shall have priority for use of the Tertiary Recycled Water for golf course irrigation on Club property over and above other actual or potential users.
10. Price10.1 Base Price – The Clubs shall pay Daly City $ 0.50 (fifty cents) per unit (100 cubic feet) of Tertiary Recycled Water delivered to the Clubs, including each unit of water paid for pursuant to Section 3.2 hereof.
10.2 Price Escalator – The unit price shall be adjusted annually on October 1st of each year based upon the change in the Consumer Price Index over the prior twelve (12) month period.
10.3 Additional Price Adjustments – In addition to price adjustments reflected in Section 10.2, the price per hundred cubic feet (unit) of Tertiary Recycled Water shall be adjusted in the event of an Extraordinary Increase or Decrease in power costs as a component of the operation of the Tertiary Recycled Water facility and delivery of Tertiary Recycled Water to the Clubs.
"Extraordinary Increase or Decrease" shall be defined as an increase or a decrease in the power rates applicable to the Tertiary Recycled Water facility of 25% or more over the prior rate period in effect, or a cumulative increase or decrease of 35% or more over the prior two year period. The Extraordinary Increase or Decrease shall be calculated as the rate adjustment for the applicable period, less the Consumer Price Index increase or decrease as set forth in Section 10.2, above.
Daly City shall provide to the Clubs evidence of the rate increase(s) or decrease(s) imposed, and a calculation of the prior cost of power per unit and the change in cost per unit due to the change(s). The price per unit shall be adjusted as of the effective date of the last power rate change which triggered the adjustment under this Section.
11. SFPUC System Injection and Recovery Wells11.1 General – The Clubs' properties are uniquely situated to assist the SFPUC in developing a conjunctive use program in the Basin and to devise solutions to raise water levels in Lake Merced. The delivery of Tertiary Recycled Water to the Clubs and the grant of property rights provided for in Section 11.4 may provide the following benefits: (1) assist in raising water levels in the Basin in order to reduce pump lifts and make water available to the SFPUC water system under a regional conjunctive use program; (2) make use of the Clubs' properties for well sites to be used as part of the SFPUC's program to raise the water level in Lake Merced; and (3) provide a backup emergency irrigation water supply for the Clubs in the event that Tertiary Recycled Water is not available or in the event that Club wells fail. It is expressly understood and agreed by the Parties that nothing in this Agreement shall be construed to deem any Club to be a participant in, member of or subject to any conjunctive use program, and nothing in this Agreement shall create any obligation on the part of any Club to participate in any conjunctive use program now or in the future.
11.2 Acknowledgement of Water Rights – Each Club hereby acknowledges the SFPUC's reserved rights to utilize groundwater underlying lands owned by each Club. In all respects, each Club retains its overlying groundwater rights for use in providing irrigation water, including as specified in Section 3.3 of this Agreement.
11.3 Use of SFPUC Injection and Recovery Wells – The property rights to be granted to the SFPUC by each Club pursuant to Section 11.4 of this Agreement shall be for the installation, operation and maintenance of injection and recovery wells which may be installed for conjunctive management of the Basin and to attempt to raise the water level in Lake Merced. The SFPUC agrees that it will not pump groundwater which would have been pumped by the Clubs but for the provision of Tertiary Recycled Water under this Agreement, except upon the occurrence of a Force Majeure Event as defined in Section 1.3.4 of this Agreement. The recovery of water by the SFPUC from the wells installed pursuant to the Well Site Agreements as provided in Section 11.4 hereof shall be limited to (1) quantities of SFPUC system water added to storage in the Lake Merced vicinity under a future Basin-wide conjunctive use program and (2) water required for emergency use as defined in Section 1.3.4. The Parties agree that this pumping restriction may be revised following the conclusion of technical studies needed to implement a Basin-wide conjunctive use program, and as appropriate to reflect actual experience in the conjunctive operation of the Basin. The installation of injection and recovery wells by the SFPUC pursuant to this Agreement, or revision to this pumping restriction, is subject to the conclusion of additional technical work and environmental review under the California Environmental Quality Act (CEQA), as set forth in section 24.1 of this Agreement.
11.4 Grant of Well Sites by Clubs – For nominal consideration, each Club will enter into an agreement with the SFPUC (a "Well Site Agreement") whereby it will grant to the SFPUC either fee title or an easement, as determined by the Club, for a single 30 by 30 foot area (the "Well Site") for purposes of installing an injection and recovery well ("Well"), and all necessary access rights to the Well Site area for installation, operation, maintenance, and replacement (if necessary) of the Well. The location of the Well Site and access route to the Well Site on each Club’s property shall be chosen by that Club after consultation with the SFPUC, shall be located so as to provide a technically appropriate location for an injection and recovery well, and shall avoid interference with golfing and other land uses by such Club. All areas disturbed by the Well installation shall be restored to preexisting conditions at the sole expense of the SFPUC to the extent such areas are not needed for Well Site facilities. The SFPUC's Wells shall be installed, operated, and maintained so as to avoid interference with the Clubs' pumping of groundwater.
11.5 Installation of Appurtenant Facilities by SFPUC –Each Well Site Agreement will provide that, for nominal consideration, each Club will grant to the SFPUC any necessary easement(s), or fee interest(s), to allow the SFPUC to install, operate and maintain all necessary subsurface pipelines, power lines, telemetry and other facilities needed to operate and to connect the Well Site facilities to SFPUC or Daly City water facilities.
11.6. Emergency Use by Clubs of Irrigation Water from SFPUC Well Site Facilities – Each Well Site Agreement will provide that the Club shall have the right to take irrigation water from the SFPUC's Well in the event of failure of Clubs' own irrigation well(s) which makes it impossible for the Club to irrigate its property so as to maintain playing surfaces in their customary condition. Each Club shall reimburse the SFPUC on a monthly basis for power costs incurred in pumping irrigation water pursuant to this Section. The provision of irrigation water by the SFPUC shall continue for a period of not to exceed twelve(12) months after failure of the Club well(s) involved, unless the Club and the SFPUC agree that repair or replacement of the Club well(s) has not been feasible despite good faith efforts to reconstruct or replace the well(s) by the Club, in which case the supply of water from the SFPUC well may continue for an additional six (6) months. The SFPUC’s agreement shall not be unreasonably withheld.
11.7. Indemnity of Clubs – Each Well Site Agreement shall contain a provision whereby the SFPUC agrees to indemnify, defend, and hold harmless each Club for any damage to Club facilities or property, or for any cause of action or liability alleged to have been caused by use of the Well Site for installation, operation and maintenance of the injection and recovery wells.
11.8. Waiver of Groundwater Claims by Daly City – In order to facilitate the implementation of this Agreement including, without limitation, the SFPUC’s exercise of its rights under this Section 11 to utilize the Clubs’ properties as Well sites, Daly City hereby waives any claim it may have to the quantity of groundwater underlying lands owned by the Clubs which will no longer be pumped by the Clubs as a result of the delivery of Tertiary Recycled Water under this Agreement.
12. Daly City Groundwater Rights –Nothing in the Agreement shall interfere with, reduce, amend or otherwise modify any existing groundwater rights Daly City has or may have within the Basin.
13. Scheduling of Irrigation – Each Club shall retain operations and scheduling control of its irrigation systems. Instrumentation to enable the Clubs’ operations to be managed with respect to the Tertiary Recycled Water supply coming from Daly City will be designed (with each Club’s input) and installed by Daly City at Daly’s City’s cost.
14. Force Majeure – Daly City and each Club shall be entitled to suspend performance of their respective obligations under this Agreement to the extent and for the period it is disabled from performing those obligations by any Force Majeure Event.
15. Training – Training of Club personnel to work with Tertiary Recycled Water shall be at Daly City’s expense, including initial training and periodic refresher training.
16. Public Notices and Shielding –To the extent required by Law, public notices and drinking water fountain shielding shall be provided by Daly City. Each Club retains the right to specify the design and location of such shielding and notices, subject to the requirements of Law.
17. Easements – Each Club shall convey to Daly City, without cost to Daly City, adequate easements or other mutually acceptable real property arrangements as necessary for Daly City to install facilities on Club property as provided in this Agreement.
18. Indemnification18.1 Indemnification by Daly City – Daly City shall indemnify and hold harmless each Club, its directors, officers, employees and agents from and against all adjudicated damages and adjudicated liabilities, and related costs and expenses (including, but not limited to, costs of investigations, lawsuits and any other proceedings whether in law or in equity, settlement costs, attorneys’ fees and costs), and penalties or violations of any kind, which arise out of, result from, or are related to the delivery of Tertiary Recycled Water by Daly City to the Points of Delivery and the use of Tertiary Recycled Water on Club property (other than damage to such Club’s real property, including plants, grass and other vegetation)(Loss), unless such Loss results from the negligence or wrongful act or omission of such Club, its directors, officers, employees or agents.19. Permits – The parties acknowledge that permits and regulatory agency approvals may be required for the design, construction and operation of the Tertiary Recycled Water facilities for distribution and use of Tertiary Recycled Water for golf course irrigation, delivery piping and related appurtenances. The Parties will cooperate in securing such permits and regulatory approvals, and in particular, those permits necessary for delivery and/or use of Tertiary Recycled Water shall be promptly applied for and secured with the parties cooperating fully to support issuance of such necessary permits. Daly City shall be responsible for the cost of obtaining the governmental permits and approvals for the production and use of Tertiary Recycled Water, except that the SFPUC shall secure and provide, with Daly City assistance, those permits and approvals that are required by the City and County of San Francisco. Daly City shall be the lead agency on any environmental documentation which is required for implementation of the Tertiary Recycled Water Project.
18.2. Indemnification Procedures – Any Party that is an indemnified party (the "Indemnified Party") that has a claim for indemnification against the other Party (the "Indemnifying Party") under this Agreement, shall promptly notify the Indemnifying Party in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation unless (and then solely to the extent) the Indemnifying Party is prejudiced. Further, the Indemnified Party shall promptly notify the Indemnifying Party of the existence of any claim, demand, or other matter to which the indemnification obligations would apply, and shall give the Indemnifying Party a reasonable opportunity to defend the same at its own expense and with counsel of its own selection; provided that the Indemnified Party shall at all times also have the right to fully participate in the disputed matter at its own expense. If the Indemnifying Party shall, within a reasonable time after this notice, fail to defend, the Indemnified Party shall have the right, but not the obligation, to undertake the defense of, and to compromise or settle (exercising reasonable business judgment), the claim or other matter, on behalf, or for the account, and at the risk, of the Indemnifying Party. Nothing herein shall require the Indemnifying Party to provide a defense when the cause of the claim or action remains unadjudicated. If the claim is one that cannot by its nature be defended solely by the Indemnified Party, then the Indemnifying Party shall make available all information and assistance to the Indemnified Party that the Indemnified Party may reasonably request. The Indemnifying Party shall not be liable for any settlement without its written consent, but if there is a settlement with the written consent of the Indemnifying Party, the Indemnifying Party agrees to indemnify and hold harmless the Indemnified Party, its directors, officers, employees and agents to the extent provided in the preceding Paragraph.
20. Territorial Jurisdiction – Since implementation of this Agreement will require Daly City to deliver Tertiary Recycled Water for irrigation use in areas outside the territorial jurisdiction of Daly City and within the service area of other water suppliers, the SFPUC hereby agrees by execution of this Agreement, and for the term of this Agreement and any extension thereof, to permit Daly City to provide Tertiary Recycled Water to the Clubs within the City and County of San Francisco.
21. Mediation21.1 Participation in Mediation – If any dispute relating to this Agreement should arise between any of the Parties (a "Mediation Dispute"), the Parties shall attempt in good faith to settle and resolve the Mediation Dispute through mediation in accordance with the procedures specified in this Section 21. Each Party’s good faith participation in mediation shall constitute a condition precedent to the right of the Party to pursue any other remedy available to the Party under this Agreement or as a matter of law including, without limitation, arbitration under Section 22.
21.2 Procedures – Any Party who desires to initiate mediation shall provide notice of the commencement of mediation to all other Parties within one-hundred eighty (180) days following actual notice of the facts giving rise to the Mediation Dispute. The Parties to the Mediation Dispute shall jointly select a single neutral mediator to conduct the mediation. In the event that the Parties are unable to select a single mediator, then each Party to the Mediation Dispute shall select one (1) mediator; provided, however, that the Clubs may collectively select one (1) mediator. In the event that the selection of mediators by the Parties results in an even number of mediators, then the selected mediators shall select one additional mediator to serve on the mediation panel.
21.3 Costs – The Parties to the Mediation Dispute shall share equally the mediator fees and expenses. Each Party shall bear its own attorney and consultant fees and other costs incurred in connection with the mediation.
22. Arbitration22.1 Disputes To Be Settled By Arbitration –If any dispute relating to this Agreement should arise between Daly City and any of the Clubs (a "Dispute") and is not resolved by mediation, then any of the Parties (meaning Daly City and the Clubs only for purposes of this section) may require that such Dispute be settled by arbitration in accordance with the procedures set forth in this Section 22. The place of arbitration shall be San Mateo County, California. This arbitration clause shall not apply to the Well Site Agreements provided for in Section 11.4 of this Agreement.WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THIS SECTION 22 TO NEUTRAL ARBITRATION.
22.2 Additional Provisions – Arbitration shall be subject to the following additional provisions: (a) The arbitration panel shall consist of three arbitrators who each shall be experts in water quality matters. (b) None of the arbitrators shall be or previously have been an officer, director, employee or independent contractor of any Party or any of its affiliates and none of them shall have any direct or indirect interest in any Party or the subject matter of the arbitration. (c) The hearing shall be conducted on a confidential basis without continuance or adjournment. (d) Any offer made or the details of any negotiation of the dispute subject to arbitration prior to arbitration shall be inadmissible to the same extent as in a proceeding governed by the California Evidence Code. (e) Each Party shall be entitled to all rights and privileges granted by the arbitrators to any other Party. (f) Each Party shall be entitled to compel the attendance of witnesses or production of documents, and for this purpose, the arbitrator shall have the power to issue subpoenas in accordance with the law of the State of California. (g) Each Party shall have the right (upon leave of the arbitrators) to take depositions and obtain other discovery of the scope and in the manner which the arbitrators deem reasonably necessary to the preparation and presentation of such Party’s case. (h) The arbitrators shall have the power to impose on any Party such terms, conditions, consequences, liabilities, sanctions and penalties as they deem necessary or appropriate (which shall be as conclusive, final and enforceable as their award on the merits) to compel or induce compliance with discovery and the appearance of, or production of documents in the custody of, any officer, director, agent or employee of a Party or its independent contractors or members or any party which controls, is controlled by or is under common control with a Party or its independent contractors or members. (i) The arbitrators are authorized to, and shall, award interest to any substantially prevailing Party. The Parties shall share the costs of arbitration including the fees charged by the arbitrators. Each Party shall pay its own attorneys’ fees and disbursements. (j) The arbitrators are authorized to and shall grant remedies and relief in accordance with the Agreement.
22.3 Judgment on Awards – Judgment on the award rendered by the arbitrators may be entered in any court of competent jurisdiction and is final and binding upon the Parties except to the extent it may be challenged under Law.
22.4 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW, YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THIS SECTION 22. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
INITIALS: Daly City:
LMGC:22.5 Remedies – Specific performance may be granted in accordance with this Agreement. The arbitrators are not empowered to award, and the Parties expressly waive any rights they may have to seek and obtain, any punitive or consequential damages.
22.6 No Termination While Arbitration Pending – In the event any Dispute between any of the Parties as to the right of a Party to terminate any of its obligations under this Agreement is referred to arbitration under this Section 22, then the termination shall not be effective, except as to payment obligations, during the period of the arbitration unless and until the arbitrators determine that the Party seeking to terminate has the right to terminate. Upon any determination that the Party does not have the right to terminate, the Party seeking the termination shall pay to any other Party an amount equal to all payments which were not made to such Party during the period of the arbitration.
23. Termination – This Agreement may be terminated by the Clubs, or by Daly City, eighteen (18) months or more after approval and execution or ratification of this Agreement in the event that the Conditions Precedent of Section 24.1, below, are not satisfied during this initial 18 month period.
24. Miscellaneous Provisions24.1 Conditions Precedent – The obligations of the Parties to perform their respective obligations under this Agreement are subject to satisfaction of the following conditions precedent:(a) full compliance by Daly City and SFPUC with applicable requirements of the California Environmental Quality Act;24.2 Assignment – This Agreement may not be assigned by any of the Parties without the express written consent of all other Parties.
(b) issuance of all permits or other governmental approvals necessary for implementation of this Agreement, and for construction and operation of the facilities described in Section 5; and
(c) the full financing of construction of the facilities as described in Section 5, including a grant award of $1.5 Million ($1,500,000.00) by the State of California or other source(s).
(d) award of a contract by Daly City for the construction of the Tertiary Recycled Water facilities.
24.3 Notice – Notices or any other written communications required under this Agreement shall be effective when sent via first class United States mail to:
24.4 Governing Law – All aspects of this Agreement and its interpretation shall be governed by California law. General Manager
The Olympic Club
524 Post Street
San Francisco, California 94102
Lake Merced Golf Club
2300 Junipero Serra Boulevard
Daly City, CA 94015
San Francisco Golf Club
Junipero Serra Blvd at Brotherhood Way
San Francisco, CA 94132
City of Daly City
333 - 90th Street
Daly City, California 94015
San Francisco Public Utilities Commission
1155 Market Street, Fourth Floor
San Francisco, CA 94102
24.5 Entire Agreement – This Agreement sets forth the entire agreement of the Parties, and supersedes all other oral or written agreements or understandings. This Agreement may only be modified by writing executed by all Parties.
24.6 Amendment – Upon mutual agreement between the Parties, this Agreement or any section, subpart, paragraph, section or clause may be amended by written amendment, executed by all Parties. It is also understood and agreed that upon or after the effective date of any change to Law that affects the production, transport, pumping, use or exposure to Tertiary Recycled Water, that the Parties will meet and determine whether amendments to this Agreement are required to allow for conformance with Law.
24.7 Emergency Conditions – The Parties acknowledge that either temporary cessation, or cessation of indeterminate duration may occur in the treatment of recycled water or the provision of Tertiary Recycled Water for reasons of public calamity, natural disaster, a state of emergency or conditions detrimental to public health. Such an emergency occurs upon a declaration of the same by resolution of the City of Daly City upon supportable findings of just such emergency, public health or disaster conditions. Then and in that event the performance by the Parties to this Agreement shall be suspended for the period of the declared emergency, public health and disaster circumstance.
24.8 Delay in Payment – Each Club’s payment to Daly City shall be based upon the actual quantities delivered, or the Take or Pay Component, which shall be calculated by Daly City, and thereafter provided to the Clubs by periodic written invoices. Payments received by Daly City shall be considered delinquent Thirty (30) days beyond the date of invoice delivery. Interest on the untimely and/or unpaid amounts at the rate of six percent (6%) per annum shall accrue beyond the 30th day such amount(s) are due and owing to Daly City. Daly City may seek enforcement through any and all available civil and/or judicial remedies. Invoices for the Take or Pay Component shall be provided to each Club in November of each calendar year.
24.9 Relationship of the Parties – It is understood, agreed and intended by the Parties that in performing this Agreement the Parties are each separately and independently carrying out their respective businesses and that this Agreement does not and shall not create or constitute a partnership or joint venture between any of the Parties. It is further understood, agreed, and intended by the Parties that no Party hereto is the employee or agent of the other. This Agreement shall at all times be read, interpreted, and applied in accordance with such intention. All obligations of the Clubs set forth in this Agreement are several, except where expressly stated to be joint or joint and several, or as indicated by context.
24.10 Severability – If and to the extent any term or provision of this Agreement shall be held to be invalid or unenforceable in any jurisdiction for any reason, it is the intention of the Parties that this Agreement shall to such extent be construed and enforced as if such invalid or unenforceable term or provision had never been a part hereof and without invalidating the remaining terms and provisions hereof , and that all of the terms and provisions of this Agreement shall otherwise remain in full force and effect.
24.11 Waiver – The failure by any Party to enforce any of the covenants, terms or conditions of this Agreement shall not be deemed a waiver thereof, unless such waiver shall have been made in writing.
24.12 Further Assurances – From time to time and at any time after the execution and delivery hereof, each of the Parties, at its own expense, shall execute, acknowledge and deliver any further instruments, documents and other assurances reasonably requested by any other Party, and shall take any other action consistent with the terms of this Agreement that may reasonably be requested by any other Party, to evidence or carry out the intent of this Agreement.
24.13 References – The Section headings in this Agreement are provided for convenience only, and shall not be considered in the interpretation hereof or thereof. References in this Agreement to Sections refer, unless otherwise specified, to the designated Section of this Agreement. Terms such as "herein," "hereto" and "hereof" refer to this Agreement as a whole.
24.14 Counterparts – This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument, but all of which together shall constitute one and the same instrument.
25. Representations, Warranties and Covenants –Each Party hereby represents and warrants to each other Party that:25.1 – the execution and delivery of this Agreement, and the performance of the obligations under this Agreement, have been duly authorized by all necessary action on its part, and it has full power, right and authority to enter into this Agreement and to perform its obligations hereunder;
25.2 – neither the execution and delivery of this Agreement by it, nor the performance by it of any of its obligations under this Agreement, violates any applicable federal, state or local law, whether statutory or common, or regulation, or its charter documents, if any, or constitutes a violation of, or a breach or default under, any agreement or instrument, or judgment or order of any court or governmental authority, to which it is a party or which it or any of its property is subject; and
25.3 – this Agreement is a valid and binding obligation of it, enforceable against it in accordance with its terms, except as such enforceability may be limited by equitable principles or by bankruptcy or other laws affecting creditors rights generally.
IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Agreement.
CITY AND COUNTY OF SAN FRANCISCO CITY OF DALY CITY
Approved by Daly City City Council
General Manager Resolution No. __________________
San Francisco Public Utilities Commission
PUC Res. No. __________________
Approved as to Form: Approved as to Form:
Dennis J. Herrera Stan Gustavson
City Attorney City Attorney
Joshua D. Milstein Stan Gustavson
Deputy City Attorney City Attorney
Board of Supervisors
Resolution No. ________
Clerk of said Board
North San Mateo County Sanitation District ATTEST:
Olympic Club ATTEST:
Lake Merced Golf Club ATTEST:
San Francisco Golf Club ATTEST:
PRESCRIBED WATER QUALITY CRITERIAThe following criteria are not a substitute for the criteria set forth in Title 22 of the California Code of Regulations , and related revised regulations and guidelines used by the Department of Health Services and uniformly applied Statewide.
FOR TERTIARY RECYCLED WATER USED FOR IRRIGATION OF GOLF COURSES IN SAN FRANCISCO AND DALY CITY
The criteria listed below are in addition to the Title 22 criteria and are intended to protect the soils, trees, ornamentals, and turf grass irrigated with Tertiary Recycled Water over the long term.
Acceptable pH Range
not to fall below 6.5 nor to exceed 8.4
Total Dissolved Solids
not to exceed 700 milligrams/liter (mg/L)
not to exceed 1. IdSm'"
not to exceed 1.0 mg/L
not to exceed 100 mg/L
not to exceed 70 mg/L
Adjusted Sodium Adsorption Ratio (aSAR)
not to exceed 3.0
not to exceed 300 mg/L
Technical foundations upon which the above values are based — taking into account climate, soils and plant materials at the three golf courses — are contained cumulatively in the references cited below:
Harivandi, Ali, "Waste-water Qualify and Treatment Plants'", in The United States Golf Association. Wastewater Reuse for Golf Course Irrigation. 1995.
Throssell, Clark S. and David M. Kopec, "Irrigation Water Quality" presented by Golf Course Superintendents Association of America, 1995-1996.
Food and Agriculture Organization of the United Nations Irrigation and Drainage Paper 29, Revised, 1985.
Annual Anticipated Delivery Quantities
TERTIARY RECYCLED WATER
Olympic Club 345 acre-feet
Lake Merced Golf Club 173 acre-feet
San Francisco Golf Club 172 acre-feet