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Home My WebLink About2004-06-07 City CouncilCity of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 4 FROM:CITY MANAGER DEPARTMENT: UTILITIES DATE:JUNE 07, 2004 CMR:202:04 SUBJECT:ADOPTION OF A RESOLUTION AFFIRMING PRIOR COMMITMENTS FORFY 2005 AND FY 2006 AND MAKING A NEW COMMITMENT FOR PALO ALTO’S CONTRIBUTION LEVEL FOR FY 2007 TO THE FUNDING OF OPERATION AND MAINTENANCE (O&M) FOR THE CENTRAL VALLEY PROJECT POWER FACILITIES AND AUTHORIZING THE CITY MANAGER TO EXECUTE EXHIBIT C, REVISION 7 TO THE AGREEMENT RECOMMENDATION Staff recommends that the City Council adopt the attached resolution authorizing the City Manager to sign the attached Exhibit C, Revision 7 to Contract No. 96-SNR-00110 with Western Area Power Administration and U.S. Bureau of Reclamation that maintains existing conm~itment levels in the Operation and Maintenance (O&M) funding a~’eement (Exhibit C) of $4,400,000 for FY 2005, and $5,300,000 for FY 2006, and establishes $6,000,000 as the contribution commitment level for FY 2007. BACKGROUND Western Area Power Administration (Western) will provide the largest source of power for Palo Alto for the next several years. Most of the power marketed by Western is generated by Central Valley Project (CVP) hydroelectric plants operated by the Bureau of Reclamation (Reclamation). A variety of money-saving investment and spending opportunities arise in the maintenance, replacement and addition of equipment for the CVP and at Western. To take advantage of these opportunities, Palo Alto participates in the O&M funding program along with several dozen other Western customers. The City CMR:202:04 Page 1 of 4 entered into the A~eement for the Funding of Operations and Maintenance for the CVP po~ver facilities on February 10, 1997 (CMR: 138:97). Through directing its normal Western bill payments toward the O&M funding program, the City funds various operations and maintenance efficiency improvements by Reclamation and Western. The improvements being pursued with this funding include replacing water turbines at Cart and New Melones power plants, replacing aging circuit breakers at Trinity power plant and implementing software upgrades to enable Western’s marketing of power post-2004. These improvements will result in short term and long-term savings related to continuing and increasing the City’s access to low-cost federa! power that Western markets to the City under long-term supply a~eements. DISCUSSION In July 2003, Council approved increasing Palo Alto’s funding of the A~eement for FY 2003, 2004 and 2005 (CMR 343:03 Attachment A). This request is an annual update for Palo Alto’s funding of the A~’eement. This request covers the three-year rolling period FY2005, 2006 and 2007. The exhibits to the O&M funding a~eement are updated from time to time as the level of federal funding changes and as the level of activity changes in the associated Western and the Bureau of Reclamation programs. The table below shows Palo Alto’s share of Western’s and Reclamation’s minimum requested funding levels of the O&M funding agreement. The right hand column shows the level of contribution commitment recommended by staff. Federal Fisca! Year 2005 2006 2007 Pdor Eunding Commitment Minimum Funding Commitment $4,400,000 $ 3,401,050 $5,600,000 155,239,711 NA 155,990,927 Revision 7 Contdbution Commitment $4,400,000 $5,600,000 $6,000,000 It is important to note that those dollar amounts in the minimum column would onty be adequate to fund Palo Alto’s share of several beneficial and vital projects if all 37 other participants in the O&M funding a~’eement are able to direct their assig-ned shares of their Western bills. Since there is a strong possibility of some other customers failing to affirm their commitments, and because there is no cost to maintain the City’s commitments, staff recomrnends Council affirm the prior con’Lrnitments for 2005 and 2006. The amount requested for the new third year of the series (2007) is needed to CMR:202:04 Page 2 of 4 handle O&M and capital projects, including replacing the water wheels at Carr and New Melones power-plants with more efficient low maintenance models. All dollars provided to Western and Reclamation for the customer O&M funding program are returned in the form of credits on the next Western power bill paid by the City. This contract is not a commodity purchase agreement; it is a bill allocation agreement under the City of Palo Alto’s existing Western commodity purchase agreement. RESOURCE IMPACT There is no net resource impact associated with maintaining or increasing the amount of the City’s Western bill that is dedicated to the O&M funding program. Failure to maintain or increase the allocation of Western bill payments toward the O&M funding program will likely result in an increase in the cost of power to the City in the long-term. There is no impact to the Palo Alto 2004-05 Adopted Budget and 2005-06 Adopted-In- Concept Budget since those budgets appropriated resources to this project in the amount of $4,400,000 and $5,600,000; respectively. Funding for the Fiscal Year 2006-07 in the amount of $6,000,000 will be included in the Electric Fund budget in 2006-07. POLICY IMPLICATIONS This recommendation is consistent with the Council approved Utilities Strategic Plan to preserve a supply cost advantage compared to the market price (Strategy 2). ENVIRONMENTAL REVIEW Approving an increase in the O&M funding contract does not constitute a project for the purpose of the California Environmental Quality Act. The funding or spending of money on Western and Reclamation O&M does not impact the volume, timing or temperature of water flows in rivers. The economics of projects funded by the O&M pro~am are attractive under the full range of river flows under consideration by the Department of Interior. ATTACHMENTS: A. Resolution of the Council of the City of Palo Alto Approving Palo Alto’s Contribution Commitment Levels For FY 2005, 2006, and 2007 To The Funding of Operation and Maintenance for the Central Valley Project Power Facilities and Authorizing the City Manager To Execute Exhibit C, Revision 6 To The Agreement B.CMR:343:03 "Approving Increases In Palo Alto’s Contribution Comlnitment Levels For FY 2004, 2005 And 2006 To The Funding Of Operation And Maintenance For CMR:202:04 Page 3 of 4 Co The Central Valley Project Power Facilities And Authorizing The City Manager To Execute Exhibit C, Revision 6 To The Agreement" Exhibit C Revision 7 Individual Customer Commitment and Contribution PREPARED BY: TO~ KABAT St. Resource Originator DEPARTMENT HEAD: CITY MANAGER APPROVAL: JO of Utilities Assistant City Manager CMR:202:04 Page 4 of 4 *** NOT YET APPROVED *** RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING INCREASES IN PALO ALTO’S CONTRIBUTION COMMITMENT LEVELS FOR FY 2005,2006 AND 2007 TO THE FUNDING OF OPERATION AND MAINTENANCE FOR THE CENTRAL VALLEY PROJECT POWER FACILITIES AND AUTHORIZING THE CITY MANAGER TO EXECUTE EXHIBIT C, REVISION 7 TO THE AGREEMENT Z~EREAS, the City of Palo Alto ("City") has negotiated and executed several contracts with the Western Area Power Administration of the U.S. Department of Energy ("WAPA"), including An Agreement For The Funding Of Operation and Maintenance For Central Valley Project Power Facilities ("O&M Funding Contract"); and WHEREAS, the City has provided funds to WAPA and the U.S. Bureau of Reclamation to pay for the operation, maintenance and improvements to the Central Valley Project and the Shasta Dam, among other facilities, and the federal agencies are repaying these funds by crediting Palo Alto’s account for energy received in the amount of the funds contributed in the month following the contribution; and WHEREAS, the parties by Exhibit C (Individual Customer Commitment and Contribution) ("Exhibit C") to the O&M Funding Contract establish the amounts which the City will direct to the Operation and Maintenance funding program. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION i. The Council hereby approves the seventh revision to the City of Palo Alto’s Fair-Share Amount Contribution commitment level for FY 2005, 2006 and 2007 in the amounts of $4,400,000.00, $5,600,000.00 and $6,000,000.00, respectively, set forth in Exhibit C to the O&M Funding Contract, and further authorizes the City Manager to execute the revised Exhibit C, Revision 7. // // // 040329 cl 0072379 *** NOT YET APPROVED *** SECTION 2. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, and therefore no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Mayor APPROVED: Senior Asst. City Attorney City Manager Director of Administrative Services Director of Utilities 040329 cl 0072379 CMR:202:04 Attachment B 8 TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: UTILITIES DATE:JULY 14, 2003 CMR:343:03 SUBJECT:ADOPTION OF A RESOLUTION APPROVING INCREASES IN PALO ALTO’S CONTRIBUTION COMMITMENT LEVELS FOR FY 2004, 2005 AND 2006 TO THE FUNDING OF OPERATION AND MAINTENANCE (O&M) FOR THE CENTRAL VALLEY PROJECT POWER FACILITIES AND AUTHORIZING THE CITY MANAGER TO EXECUTE EXHIBIT C, REVISION 6 TO THE AGREEMENT RECOMMENDATION Staff is requesting Council authorization to increase the portion of Western bills paid by the City to be used to fund Operation and Maintenance. Staff recommends that the City Council adopt the attached resolution authorizing the City Manager to sigaa the attached Exhibit C, Revision 6 to Contract No. 96-SNR-00110 with Western Area Power Administration and U.S. Bureau of Reclamation that effects an increase in the O&M funding (Exhibit C) from $3,800,000 to $4,900,000 for FY 2004, maintains $4,400,000 for F Y 2 005, and establishes $ 5,600,000 a s the contribution c ommitment 1 evet for F Y 2006. BACKGROUND The City receives the majority of its electricity supply frolll tile Western Area Power Administration (Western). About one half the power marketed by Western is generated by Central Valley Project (CVP) hydroelectric projects operated by the Bureau of Reclamation (Reclamation). A variety of money-saving investment and spending opportunities arise in the maintenance, replacement and addition of equipment for the CMR:343:03 Page 1 of 4 CVP and at Western. To take advantage of these opportunities, Palo Alto participates in the O&M funding program along with several dozen other Western customers. The City entered into the A~-eement for the Funding of Operations and Maintenance (O&M) for the CVPPowerFacilities on February 10, 1997 (CMR: 138:97). Tt¢rough directing its normal Western bill payments toward the O&M funding prod’am, the City funds various operations and maintenance efficiency improvements by Reclamation and Western. The improvements being pursued with this funding include replacing water turbines at Carr and New Melones power plants, replacing aging circuit breakers at Trinity power plant and implementing software up~-ades to enable Western’s marketing of power post 2004. These improvements will result in short term and long-term savings related to continuing and increasing the City’s access to low-cost federal power that Western markets to the City under long-ten~ supply agreements. DISCUSSION In February 2003, Council approved increasing Palo Alto’s funding of the A~eement for FY 2003, 2004 and 2005 (CMR 106:03 February 3, 2003, included as Exhibit A). This request is an annual update for Palo Alto’s funding of the Agreement. This request covers the tlv-ee-year rolling period FY2004, 2005 and 2006. The exhibits to the O&M fi.mding aN-eement are updated frorn time to time, as the level of federal funding changes and as the level of activity changes in the associated Western and the Bureau of Reclarnation programs. This table shows Palo Alto’s share of Westem’s and the Bureau of Reclarnation’s minimmn requested funding levels of the O&M funding a~eement. The right hand column shows the leve! of contribution commitment recommended by staff. Federal Fiscal Year Prior Funding Commitment Revised Minimum Funding Revision 6 Commitment Contribution Commitment 2004 $3,800,000.00 .............$4,853,642.05 $4,900,000.00 20~5 $4,400,000.00 I $4,348,523.58 $4,400,000.00 2006 NA $5,588,336.09 $5,600,000.00 It is important to note that those dollar amounts in the minimum colun~ would only be adequate to fund Palo Alto’s share of several beneficial and vital projects if all 37 other CMR:343:03 Page 2 of 4 participants i n the O &M fundh~g a ~eement are able t o direct their a ssiga~ed s hares o f their Western bills. The amount for O&M funding increases in 2004 to cover so,rare and staffing costs associated with Western taldng over more power scheduling and reliability responsibilities that, in prior times, were handled by PG&E. The amount requested for the new third year of the series (2006) is needed to handle O&M and Capital Projects including replacing the water wheels at Cart and New Melones power- plants with more efficient low maintenance models. The funding or spending of money on Western and Reclamation power O&M does not impact the volume, timing or temperature of water flows in rivers. The economics of projects funded by the O&M program are attractive under the full range of river flows under consideration by the Department of Interior. This contract is not a commodity purchase aN’eernent; it is a bill allocation aN’eement under the City of Palo Alto’s existing Western co~ranodity purchase agreement. RESOURCE IMPACT There is no net resource impact associated with increasing the amount of the Western bill that is dedicated to the O&M funding program. Failure to increase the allocation of Western bill payments toward the O&M funding program will likely result in an increase in the cost of power to the City in the long-term. There is no impact to the Palo Alto adopted 2003-04 Adopted Budget and 2004-05 Adopted-In-Concept Budget since those budgets appropriated resources to this project in the amount of $4,900,000 and $4,400,000; respectively. Funding for the Fiscal Year 2005-06 in the amount of $5,600,000 will be included in the Electric Fund budget in 2005-06. POLICY IMPLICATIONS This recommendation is consistent with the Council approved Utilities Strategic Plan to preserve a supply cost advantage compared to the market pi-ice (Strategy 2). CMR:343:03 Page 3 of 4 ENVIRONMENTAL REVIEW Approving an increase in the O&M funding contract does not constitute a project for the purpose of the California Environmental Quality Act. ATTACHMENTS: A.Resolution of the Council of the City of Palo Alto Approving Increases in Palo Alto’s Contribution Conanaitment Levels For FY 2004, 2005, and 2006 To The Funding of Operation and Maintenance for the Central Valley Project Power Facilities and Authorizing the City Manager To Execute Exhibit C,. Revision 6 To The AN’eement B. CMR:106:03 "Approving Increases In Palo Alto’s ContTibution Comlnitment Levels For FY 2003, 2004 And 2005 To The Funding Of Operation And Maintenance For The Central Valley Project Power Facilities And Authorizing The C ity Manager To Execute Exhibit C, Revision 5 To The A~-eement" C. Exhibit C Revision 6 Individual Customer Commitment and Contribution PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: TOM IC~k~B AT Sr. Resource Originator OO~( ,IULRIC~~" \ or of Utilities EM LY HARRISON Assistant City Manager CMR:343:03 Page 4 of 4 RESOLUTION NO. RESOLUTION OF THE~ COUNCIL 6F THE CITY OF PAL0 ALTO APPROVING INCREASES IN PALO ALTO’S CONTRIBUTION COI~iTMENT LEVELS FOR FY 2004,2005 AND 2006 TO THE FUNDING OF OPERATION AND I~AINTEN~E FOR THE CENTRAL VALLEY PROJECT POWER FACILITIES AND AUTHORIZING THE CITY MANAGER TO EXECUTE EXHIBIT C, REVISION 6 TO THE AGREEMENT ~FHEREAS, the City of Palo Alto ("City’°) has negotiated and executed severa! contracts with the Western Area Power Administration of the U.S. Department of Energy ("WAPA"), including An Agreement For The Funding Of Operation and Maintenance Fro Centra! Valley Project Power Facilities ("O&M Funding Contract"); and WHEREAS, the City has provided funds to WAPA and the U.S. Bureau of Reclamation to pay for the operation, maintenance and improvements to the Centra! Valley Project and the Shasta Dam, among other facilities, and the federal agencies are repaying these funds by crediting Palo A!to’s account for energy received in the amount of the funds contributed in the month following the contribution; and ~HEREAS, the parties by Exhibit C (Individual Customer Commitment and Contribution) (~’Exhibit C") to the O&M Funding Contract establish the amounts which the City wil! direct to the Operation and Maintenance funding program benefited by the City’s contributions. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION i. The Council hereby approves the sixth revision to the City of Pa!o Alto’s Fair-Share Amount Contribution commitment leve! for FY 2004, 2005 and 2006 in the amounts of $4,900,000.00, $4,400,000.00 and $5,600,000.00, respectively, set forth in Exhibit C to the O&M Funding Contract, and further authorizes the City Manager to execute the revised Exhibit C. // // 030707 syn 0072308 SECTION 2. The Counci! finds that the adoption of this resolution does not constitute a project under the California Enviro_n_mental Quality Act, and therefore no environmental assessment is required. INTRODUCED ~_ND PASSED: .AYES: NOES: ABSENT: ABSTENTIONS: _ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO F0~M:City Manager Senior Asst. City Attorney Director of Administrative Services Director of Utilities 030707 syn 0072308 City of Palo Alto TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTlVIENT: UTILITIES DATE:FEBRUARY 3, 2003 CMR:106:03 SUBJECT:APPROVING INCREASES IN PALO ALTO’S CONTRIBUTION COMMITMENT LEVELS FOR FY 2003, 2004 AND 2005 TOTIlE FUNDING OF OPERATION AND MAINTENANCE FORTHE CENTRAL VALLEY PROJECT POWER FACILITIES AND AUTHOR!ZING THE CITY MANAGER TO EXECUTE EXHIBIT C, REVISION 5 TO THE AGREEMENT REPORT IN BRIEF This report requests Council action to approve increasing the allocation of Palo Alto’s regular Western Area Power Administration (Western) power bill payments toward the Operation and Maintenance (O&M) funding contract for the Central Valley Project (CVP). Tt-~ough directing its normal Western bill payments toward the O&M landing program, the City funds various, operations and maintenance efficiency improvements by the Bureau of Reclamation (Reclam~ition) and Westen~ at no increased cost to the City. These improvements will result in short term and long-tern~ savings related to continuing and increasing the City’s access to low-cost federal power that Western markets to the City under long-term supply agreements. This contract is not a commodity purchase agreement; it is a bill allocation agreement under the City of Palo Alto’s existing Western commodity purchase agreement. CMR:106:03 Page ] of 4 RECOMM2ENDATION Staff reconmaends tlaat the City Council authorize the City Manager to si~ the attached contract that effects an increase in the O&M funding (Exhibit C) to $2,200,000 for F¥ 2003, $4,900,000 for FY 2004, and $4,400,000 for F¥ 2005. BACKGROUND The City receives the majority of its electricity supply from Western. About one half the power marketed by Western is generated by Central Valley hydroelectric projects operated by the Bureau of Reclamation. A variety of money-saving investment and spending opportunities arise in the maintenance, replacement and addition of equipment for the CVP and at Western. However, reductions in federal budgets ha’~,e put significant constraints on Western and Reclamation’s ability to pursue economic opportunities to maintain and improve the efficiency of the CVP. In order to take advantage of these opportunities the City, along with several dozen other Western customers, has entered into an agreement for the funding of O&M for tl~e CVP power facilities (CMR: 138:97 on February 10, 1997 Attachment A). Staff has been allocating a portion of the regular Western power bill payments to the O&M funding program to pursue value preserving and value-creating projects. For example, the O&M contract has funded replacement of obsolete equipment and the removal of constricting deposits from the Spring Creek water turn]el in order to increase water flow and consequently power and energy from the Spring Creek power plant. All amounts allocated by the City to the O&M ftmding program are credited back to the City in the City’s next monthly power bill. Therefore, the City does not incur any additional cost. Instead, the City realizes substantial sl~ort-tenn and !ong-tenn cost savings due to increased efficiency of CVP operations. DISCUSSION The required O&M funding program contribution levels depefid on tl~e amount of federa] spending authority approved for Western and Reclamation and on the economic opport-unities for improvements above the baseline federal funding level. The exhibits to the O&M funding agreement are updated from time to tibiae, as the level of federal funding changes and as the level of activity changes in the associated Western and CMR:105:03 Page 2 of 4 Reclamation programs. Staff is requesting Council authorization to increase a portion of Western bills paid by the City to be used to fund O&M. This table shows Western’s and Reclamation’s minimum requested change in the ~unding levels oft he O&M funding agreement. Fede~IFiscalyearP~d~Funding Commitmentl :Revised FundingCo~mitment 2003 $I,500,000.00 $2,126,998.80 2004 $3,800,000.00 $4,85~,642.05_ 2005 NA $4,348,523.58 It is important to note that those dollar amounts in the right hand Colunm would only be adequate to fund Palo Alto’s share of several beneficial and vital projects if all 37 other participants in the O&M funding agreement are able to direct their assigned shares of their Western bills. The revised O&M funding level~ over the next couple of years will enable the City and other customers to fund several O&M projects: ¯Replacement of aging and obsolete equipment to maintain service: Folsom generator unit 1, Trinity generator circuit breakers, Shasta generator digital governors ¯Increase in CVP reliability, efficiency and output by replacing the water turbines (runners) at New Melones and Cart power plants ¯Investment in software and equipment needed to market the CVP output in the post 2004 environment: California Independent System Operator (CAISO) compliant meters and load scheduling and accounting soft, are for Western. ILl;SOURCE IMPACT There is no net resource impact associated with increasing the amount of the Western bill that is dedicated to the O&M funding program. However, if the timing of a transaction spans two fiscal periods an increase in cdmmodity cost at year end will need to be offset by either cost savings from the existing budget or tl~-ough the Rate Stabilization Reserve. These types of transactions will be communicated to Council as they occur via the fiscal year end process. Failure to increase the allocation of Western bill payments toward the O&M funding program will likely result in an increase in the cost of power to the City in the long-tenn. CMR:106:03 Page 3 of 4 POLICY IMPLICATIONS This recommendation is consistent wifl~ the Council approved Ud]ities Strate~c Plan to preserve a supply cost advantage compared to the market price (Strategy 2). ENVIRONMENTAL REVIEW Approving an increase in the 0&M funding contract does not constitute a project for the purpose of the California Environmental Quality Act.. Furthermore, allowing staff to direct payment toward certain Reclamation O&M projects allows Reclamation to produce more electricity tl~-ough efficiency improvements at its facilities for a given water release is consistent with Palo Alto’s Green Government Pledge. ATTACHMENTS" A. Resolution B. Agreement for the funding of operation and maintenance for the Central Valley Project Power Facilities C. Exhibit C Revision 5 Individual Customer Conm3itment and Contribution PREPAPdgD BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: BERNARD ERLICH D~tor of Utili.ties HARI~SON Assistant City Manager CMR:106:03 Page 4 of 4 RESOLUTION NO. RESOLUTION OF THE COU~C!L OF THE CITY OF PAL0 ALTO APPROVING INCREASES iN PAL0 ALT0’S CONTRIBUTION COFZ4!TN~NT LED~LS FOR FY 2003,2004 AND 2005 TO THE FrINgiNG OF 0PE~hTION ~197D N~INTEN_<NCE FOR THE CENTRAL VALLEY PROJECT POWER FACILITIES ~qD AUTHORIZING THE CITY ~AGER TO EXECUTE EXHIBIT C, REVISION 5 TO THE AGREEMENT k~EREAS, the City of Palo Alto ("City") has negotiated and executed severa! contracts with the Western Area Power Administration of the U.S. Department of Energy ("WAPA"), including ’An Agreement For The Funding Of. Operation and Maintenance For Central Valley Project Power Facilities ("0&M Funding Contract"); and ~EREAS, the City has provided funds to WAPA and the U.S. Bureau of Reclamation to pay for the operation, maintenance and improvements to the Central Valley Project and the Shasta Dam, among other facilities, and the federal agencies are repaying these funds by crediting Palo A!to’s account for energy received in the amount of the funds contributed in the month following the contribution; and WHEREAS, the parties by Exhibit C (Individual Customer Commitment and Contribution) ("Exhibit C") to the 0&M Funding Contract establish the amounts which the City wil! direct to the Operation and Maintenance funding program. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION i. The Counci! hereby approves the fifth revision to £he City of Palo Alto’s Fair-Share Amount Contribution commitment level for FY 2003, 2004 and 2005 in the amounts of $2,200,000.00, $4,900,000.00 and $4,400,000.00, respectively, set forth in Exhibit C to the O&M Funding Contract, and further authorizes the City Hanager to execute the revised Exhibit C, Revision 5. // // // 030128 syn 0072213 SECTION 2 The Council ~inds =~ ’¯~__an the adoption of this resolution does not constitute a project under the California EnvironMental Quality Act, and therefore no environmenta! assessment is required. INTRODUCED ~9~D PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Hayor City Manager Senior Asst. City Attorney Director of Administrative Services Director of Utilities 030128 syn 0072213 Contract No. 96-SN~-00110 U~TED STATES DEPARTMENT OF ENERGY WES TERN~AREA POWER ADM!NISTRATION S~RRA NEVADA CUSTOMER SERVICE REGION CENTRAL VALLEY PROJECT, CALIFORNrIA UNITED STATES . DEPARTMENT OF THE INTERIOR BUREAU OF RECLAMATION !vKD-PA~CIFIC REGION CENTRAL VALLEY PROJECT CUSTOMERS AGREEMENT FOR THE FUNDING OF OPERATION AND MAINTENANCE FOR CENTRAL VALLEY PROJECT POWER FACILITIES TABLE OF u ONT~r~ ~ EX_PLANATORY RECITALS ...............................: ..... ........2 2. i Agencies Operation and Maintenance Needs .......................- .....2 2.2 Adequate Funding Source ...........................................2 2.3 Purpose of Agreement ..............................................2 2.4 Aveement Description .............................................2 AGILEEMENT 3 TERM AND TERMZINATION OF AGREEMZENT .............................3 4.1 Term ............................................................3 4.2 Termination .........................................¯ .............3 DEFI2,,TITION OF TERMS ................................................3 AGENCEES’ OBLIGATIONS ..............................................8 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 Agencies’ O&M Responsibilities .....................................8 Interagency Coordination ............................................8 O&M Standards ...................................................8- Preliminary O&M Work Plans .......................................8 Capital Improvement Project ...................: .....................8 Agencies’ O&M Activities Budget ..............: .....................9 General Reporting Requirements ..........................." ...........9 CVP Power Facilities Reviews .................. .....................9 Accounting .......................................................9 CUSTOMER OBLIGATIONS ............................................10 7.1 7.2 7.3 7.4 7.5 7.6 Customer’s Contribution Level ......................................10 Governance Board Actions .............................. ...........10 Contributions ....................................................10 Funding Commitment .............................................10 Designated Contact ...............................................i 0 Designated Representative ..........................................10- O&M PROGRAM ......................................................11 8.1 Interim Process for Customer O&M Funding ...........................11 8.2 Customer O&M Funding Process ....................................11 8.2.1 8.2.2 8.2.3 8.2.4 8.2.5 8.2.6 8.2.7 8.2.8 8.2.9 8.2.10 Preliminary O&M Work Plans ................................i2 Prioritization of Preliminary O&M Work Plans ...................12 Establishment of Proposed Customer O&M Funding Plan ...........12 Determining Commitment Leve! ...............................12 Development of the Approved Customer O&M Funding Plan ........13 Agencies’ O&M Activities Budgets ....: ........................14 Revision of O&M Work Plans and Customer O&M Funding Plans ....14 Implementation of Customer O&M Funding Plan .................15 Congressional Actions ........................................15 Reprogrammed Items ........................................15 Contract No. 96-SNR-00110 10. i1. 12. 13. 8.3 8.4 8.2.11 Exigency Fund .............................................16 8.2.12 Achieved Savings ........................................... 8.2.13... Carryover .................................................!6 8~2. lg Spending Limitations ................................ ........! 7 8.2.15 Changes to Customer O&M Funding Process ....~. ...............!7 Financial Management ......." ......................................I7 8.3.1 Billing ..........................¯ ..............." ...........17 8.3.2 Contribution Credits on Power Bill ............................. 8.3.3 Escrow Account for Custome} O&M Funding Plan ................18 8.3.4 Recording Contributions: ..................................... 8.3.5 Late Deposit Fee ...........................................19 8.3.6 Trust Accounts for Customer O&M Funding Plan .................20 8.3.7 Refunds .............. ......................................20 C~ -Funding .....: ...............................................2! GOVERNANCE BOARD ........................" ........................22 10.1 Qualifications/Membership on Governance Board .......................22 10.1.1 Composition of Governance Board .............................23 10.1.2 Agencies Membership on Governance Board .....................23 10.1.3 Customer Membership on the Governance Board ..................23 10. t.4 Election of Customer Membership on the Governance Board ........24 10.2 Quorum and Voting of Governance Board .............................25 10.2.1 Quorum ..................................... ........ .....2510.2.2 -Voting ...................................................26 10.3 Designated Alternate ..............................................2610.4 Duties of the Governance Board ......................................2710.4.1 General Powers ............................................27 10.4.2 Bylaws ...........~ .......................................27 10.4.3 Committees ...............................................2710.5 Function of the Governance Board ...................................27 10.5.1 Review of Armual Reports ....................................2710.5.2 Establishment of O&M Objectives .............................2810.5.3 Review and Approval Rights ..................................2810.6 Officers andSecretary .............................................29 10.6.1 Chair and Vice-Chair .........................................2910.6.2 Duties of the Secretary of the Governance Board ..................29 DISPUTE RESOLUTION ..........., ....................................3011.1 Informal Settlement ...............................................3011.2 Between Western and Reclamation ...................................30 11.3 Between the Customers or the Customers and Agency(ies) ................30 AUDIT RIGHTS .......................................................3112.1 Audit Request .............., ........ ..............................3112.2 Information Concerning Work Performed .....................~ ........31 SUCCESSORS AND ASSIGNS .. : ........................................32 Contract No. 96-SNR-00110 i4. !6. !7. 18. 19. 20. 21. EN-FORCZA-.BILIT~ ....................................................32 sm~sm<s, m~Tz ........................................................n GENERAL POWER CONTRACT PROVISIONS .....- ........................33 ~LAT~ONSHn~ OF TH~ PratT.S "n OWNER.SHIP RIGHTS ...................................................33 LLIBILITY .....¯ ......................................................33 ATTACHMENTS AND EXI-{I]gITS MADE PART OF AGREEMEI~rI" ............33 ~X~CUmON ~ cotmwsP,_PmtT ........................................34 RESOLUTIONS GEi’~rERAL POWER CONTRACT PROVISIONS (August 15, 1995) E)G-I~ IT A EXH~B1T B EX}{IBIT C ATTACHMENT 1 (Escrow Agreement) iii Contract No. 96-SNR-00110 i 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 U~rITED STATES DEPARTMENT OF ENERGY ¯ WESTERN AREA POWER ADMINISTRATION S]~ERRA NEVADA cuSTOMER SERVICE REGION CENTRAL VALLEY PROJECT, UNITED STATES DEPARTMENT OF TI-tE !NTERIOR BUREAU OF RECLAMATION MID-PACIFIC REGION CENTRAL VALLEY PROJECT CUSTOMERS AGREEMENT FOR THE FUNDING OF OPERATION AND MAINTENA_NCE FOR CENTRAL VALLEY PROJECT POWER FACILITIES P~dT.~j~[.~: This Agreement is made this ~ day of ., 1997, pursuant to the Acts.of Congress approved June 17, 1902 (32 Stat. 388); March 4, 1921 (41 Star. 1404); January 12, 1927 (44 Stat.957); August 26, 1937 (50 Star. 844); August 4, 1939 (53 Stat. 1187); and August 4, 1977 (91 Stat. 565); and Acts amendatory or supplementary to the foregoing Acts; between the UNITED STATES OF A_M£RICA (United States), (i) acting by and through the Administrator, Western Area Power Administration, Department of Energy, represented by the Regional Manager, Sierra Nevada Customer Service Region, the officer executing this Agreemen{, or a duly appointed successgr, and (ii) acting by and through the Commissioner, Bureau of Reclamation, Department of the Interior, represented by the Regiona! Director, Mid-Pacific Region; and the Central Valley Project (CVP) preference power customers signing this Agreement and set forth in Exhibit A, all collectiveiy called Parties. ]Contract No. 96-SNR-00110 1 2 3 4 7 9 10 11 12 13 14 15 16 17 2O 21 22 23 24 25 26 27 28 -~~,TORY RECITALS: 2.!A~en¢ies Operation.. an.d Maintenance Needs" Federal appropriations to finance Reclamation’s Operation and Maintenance (O&M’)Activities have been declining over the past several years. Federal appropriations to finance Western’s O&M Activities may also decrease in the future. Adequate Funding Source: To properly maintain the CV-P power facilities and avoid deferred maintenance, Western and Reclamation require an adequate and reliable source of funding for the O&M Activities. 2.3 Purpose of Agreement: In order to assure a predictable flow of funds for O&M Activities of the CVP power facilities, the Agencies and the Customers desire to establish an O&M Program that will provide a source off-ands for the O&M of CVP power facilities and maximize the-benefits from those facilities. This Agreement addresses only the power portion of the CVP facilities. Although CV-P power O&M expenses are suballocated between the Customers and CVPwater customers, contributed funding for the portion subal!ocated to water customers is not included in this Agreement. 2.4 2~,.~reement Descripfio~l: This Agreement sets out the procedure for establishing a Governance Board in order to effectively plan and monitor the O&M Program. This Agreement clarifies and sets forth the details of the O&M Program whereby the Customers may contribute funds for Western and Reclamation to perform the O&M Activities required by this Agreement pursuant to 43 U.S.C. §§ 395, 397a. The funds received from the Customers shall be available for expenditure for the specific purpose ¯ for which contributed in a like manner as if said funds had been specifically appropriated for said purposes. Contract No. 96-SNR-00110 1 2 3 4 5 6 7 8 9 lO 11 12 13 14 15 t6 17 19 20 21 22 23 24. 25 26 27 3.A~R~EMIEh~T;, In consideration of the mutual benefits to be received throug.h this A~eement, t~e Parties agree to the terms and conditions set forth herein. TERM .a2q) TE~AT!ON OF AGREEM~ENT: 4. t ~_ed~: This Agreement shall become effective upon execution by both Agencies and shall remain in effect .unt.il terminated. The Agencies will execute this Agreement upon signature by fii~-y percent (50%) of the CV-P preference power.customers and enou~h Contributors to form the Governance Board. 4.2 ~ll:Inil!N~: The Governance Board may vote tb terminate this Agreement if, in its opinion Contributions are not at a level to provide an effective O&M Program; Provided, That the termination will not be effective until it is determined by the Agencies, through written notice, that all work has been completed under the last’: Customer O&M Funding Plan approved by the Governance Board; Provided Further, That after December 31, 2004, the Agencies may agree to terminate this Agreement if at any time there are not at least five (5) Customer members on the Governance Board. A one hundred twenty (120) day written notice to all Customers must be given by the Secretary of the Governance Board prior to termination pursuant to this Section. DEFINITION OF TER.1VIS: As used herein, the following terms shall have the following meanings when used with initial capitalization, whether singular or plural: 5.1.Ageney(ies): U.S. Department of the Interior, Bureau of Reclamation, Mid-Pacific Region (Reclamation) and/or U.S. Depamnent of Energy, Western Area Power Administration, Sierra Nevada Customer Service Region (Western). 3 Con~ct No. 96-8NR-00110 l 5 7 8 9 10 11 12 13 14 !5 16 17 18 19 20 21 22 23 24 25 26 27 28 5.2 Capita!:]~nprovement Projects (CKP): Replacements or addiitions of one or more units of property that are generally capitalized and amortized in Western’s power repayment study. These repIacements or additions are generally: (a) items that will be replaced as a complete unit more than one time within the period ofanalysis as defined in the most recent Agencies’ document titled "Replacements Units, Sen, ice Lives, Factors,; and (b) items whose costs are si.maificant compared to the Agencies’ annual maintenance expense but are not ordinarily replaced as a part of the normal recurring O&M program. 5.3 Contribution: Monies provided bythe Customers to fund a Customer O&M Funding Plan. 5.4 Contributor: A Customer who commits in writing to make contributions equal to or greater than 1/i2th of such Customer’s share of the estimated annualO&M cost for the FY that is four (4) years out from the current FY, which shall be determined by the .formula: Where: EC= Estimated Annual O&M costs for each FY as set forth in the latest rate case power repas-ment study. PU= Project Use revenue as set forth in the latest rate case power repayment study. CP= The Customer’s Power Entitlement from the latest Power Entitlement Report as prepared by \Vestern. TP:The sum Of all preference power customer’s Power Entitlement from the latest Power Entitlement Report as prepared by Western. 4 Contract No. 96-SNR-00110 ! 2 .3 4 5 6 7 8 9 10 !1 12 13 14 15 !6 17 18 !9 2O 21 22 23 24 25 26 27 28 A Customer who has met this definition may fund at a level less than that committed to in meeting this definition only when the sum of all Customer Contributions in a given FY would exceed that needed for the Customer O&M Funding Plan for that FY. 5.5 Customer: CVP preference power customer(s) who sign this Agreement. 5.6 5.7 5.8 5.10 Customer O&M Funding Plan: The plan which defines the .spending limits for O&M Activities and C~P approved for funding by Contributions for the FY under consideration. Emergency: An unplanned or unanticipated event or circumstance that require.s an Agency to take immediate action to preserve, maintain; or re-establish the safety, integrity, or operability of the CVP power facilities that have been affected. Escrow Account: An interest bearing account established by the Program Treasurer at a Federally insured bank for the purpose of holding the Contributions until disbursements are made to Western and Reclamation, or the account is otherwise closed. First Preference Customer: Those preference power customers in either Trinity, Tuolumne, or Calaveras Counties, as the case may be, which have satisfied the statutory requirements according to the Trinity River Division Act (69 Stat.719) and the New Melones Act oft.he Flood Control Act of 1962 (76 Stat. ! 180). " Fiscal Year (FY): The Federal fiscal year that begins on October 1 of each calendar year and ends on September 30 of the following calendar year. 5 Contract No. 96-SNR-00110 4 5 6 7 8 9 10 11 12 13 I4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5.11 Governance Board: The board formed of Customers’ and Agencies’ representatives 5.12 5.13 5.14 5.15 5.16 that will, among other things, approve the Customer O&M Funding Plan and govern the O&M Program. Industw Standards: Guidelines and criteria established, maintained and published by entities such as the Institute of Electrical and Electronic Engineers, Inc., the National Electrica! Manufacturers Association; and the American National Standards Institute. O&M Activities: Those actions and work elements to be performed to continue the safe, economic, reliable, and environmentally acceptable operation of the CV-P power facilities including power related programs such as marketing, rates, studies, bilting and energy services. O&M Activities Budgets: Itemized obligation plans developed by the respective Agencies that identify both the level of Federal appropriations and Customer Contributions that will be utilized to fund those actions and work elements performed by the Agencies in support of the operations, maintenance and capital improvement projects of the CV-P power facilities, for specific fiscal years. O&M Program/ An’arrangement between the Agencies and the Customers whereby Customers provide Contributions and input concerning the O&M Work Plans and C12 of the Agencies. The O&M Program does not include purchased power and CVP power O&M expenses suballocated between the CVP water customers. O&M Work Plan: Projections of O&M Activiti.es prepared annmally by each Agency displaying prio.rities, c6sts, benefits and impacts of various alternatives for their respective annual O&M. 6 Contract No. 96-SNR-00! !0 1 2 3 4 5 7 8 9 I0 ii 12 13 14 15 16 17 19 2O 21 22 23 24 25 26 27 2a 5.17 5.18 5.19 5.20 5.2t 5.22 Power Entitlement: The value (in "kilowatts (kW-) or as deft_ned in a subsequent marketing plan) of a Customer’s contractual ri~t to purchase long-term power from the CVP on an annual basis. Currently this value is called the ContractRate of Delivery. Power Entitlement Repprt: A report prepared by western that sets forth each preference power customer’s CVP Power Entitlement. This report is currently c!lled the Central Valley Project Contract Rate of Delivery Report. Program Treasurer:. The entity selected by the Governance Board to establish and perform all financial duties related to the Escrow Account. Prudent Utility Practice: Those practices, methods and procedures, as modified from time to time, that are currently and commgnly used by electric utilities andother power providers-to design, engineer, select, construct, operate, and maintain electric power facilities and equipment dependably, reliably, safely, efficiently, and economically, wdth due regard to the state of the art in the electric power industry. Reclamation Fund: The fund established in the U.S. Treasury by Congress ,under the Reclamation Act of June 17, 1902. Senior Manager: The Regional Director for Reclamation, the Regional Manager for Western, or the ranking offici!l of each-elected Customer member on the Governance Board. 7 Contract No. 96-SNR-001 i0 1 2 3 4 6 7 8 9 10 11 12 13 14 15 I6 ]7 I8 19 20 21 22 23 24 25 26 27 28 5.23 Small Qt~stomer: A Customer with a long-term firm allocation of 20 megawatts or tess from Western and a maximum load of 40 megawatts or less. , GE CIE$ OBLIGATIONS: 6.1 Kgenc.ies’ O&MResponsibilities:The Agencies shall remain solely responsible for developing their respective O&M Activities Budgets, including setting the amount of the appropriations request, and for the O&M Activities of their respective CVP facilities. 6.2 Interagency Coordination: The Agencies will coordinate budget and financial transactions in accordance with current budgetary, fiscal, and accounting regulations and policies. 6.3 0.&M Standards: The Agencies will perform their O&M Activities using Prudent Utility Practice, Industry Standards, Agency standards, guidelines, and policies; and any applicable laws, regulations, orders, permits, and licenses. The Governance Board ¯ may recommend standards for consideration bythe Agencies. 6.4 Preliminary O&M Work Plan_s: Preliminary O&M Work Plans shall be prepared by each Agency, and presented to the Governance Board as set forth in Section 8.2. The preliminary O&M Work Plans shall include, among other things, the minimum level of O&M Activities needed to sustain safety and reliability of the power system, and may include additional O&M Activities which will prevent deterioration, enhance system performance, or improve reliability. 6.5 C.apital Improvement Project: A list ofprioritized CIP in excess of the predetermined threshoId wilI be mainlined by each Agency. CIP items below this 8 contract No. 96-SNR-00110 ! 2 3 4 5 6 7 8 9 10 1! 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 predetermined threshold, as determined by the Governance Board, may be included in the -Ageficy’s respective preliminary O&M Work Plan(s). 6.6 6.7 Ageneie.s’ O&M Activities Budget: The Agencies will prepare their O&M Activities Budgets using the O&M Work Plans and the approved Customer O&M Funding Plan. General Reporting Requirements: The Agencies shall prepare and submit a report to the Governance Board summarizing their respective annual O&M Activities for the preceding FY wtiich provides a general description of.the work that was performed. The report wil! include deviations between planned work and actual work completed, and deviations from forecasted expenditures and costs actually incurred and paid. This report will be prepared and submitted to the Governance Board in accordance with the format and schedule requested by the Governance Board. 6.8 CVP Power Facilities Reviews: CVP power facilities may be reviewed on a periodic or as needed basis, as defined by the Ag.encies Or as requested by any Customer member on the Governance Board. The.purpose of the CVP facilities reviews will be to assist the Governance Board in evaluatiiig the O&M Program. These reviews will be coordinated, to the extent practicable, through the Governance Board and will be conducted by qualified representatives independent from the work group directly responsible for the O&M Activities. 6.9 ~: The Agencies will maintain appropriate accounts and follow generally accepted accounting principles. 9 Contract No. 96-SN’R_-00110 -" 1 2 3 7 9 i0 I! 13 14 15 16 17 ig 19 20 21 22 23 24 25 26 27 2~ ~L~TJlN~_.~_, ~ B LI GA TIO NS: 7.1 Customer’s Contribution Level: Each Customer shall remain solely responsible for determining the magnitude of its respective Contribution level and will indicate such commitment in Exhibit C by specifying the amount to be contributed for the appropriate FY and signing Exhibit C. 7.2 Governance Board Acf!on~’ Customers who contribute will act, in a timely manner, on the approval of or revisions to the Customer O&M Funding Plan in order to facilitate.the actions of the Governance Board. 7.3 Contribu_fion.$: Customers "~vho contribute will allow their Contribution to be expended by the Agencies pursuant to the Customer O&M Funding Plan as approved and revised by the Governance Board. All Contributions will be deposited into an Escrow Account pursuant to Section 8.3. 7.4 ~~: Any Customer who conhdbutes will make their Contributions available, as requested by Western pursuant to Section 8.3. 7.5 ])e$ignated Contact: For purposes of this Agreement, each Customer shall provide the name, title, and address of an employee within the organization who shall be specified as a designated contact of the Customer’s organi~tion. Customers may also provide the name, title, and address of any additional individual(s) to receive copies of all distributions. All contact information will be set forth in Exhibit A. 7.6 D¢$i_maated Representative: For purposes of this Agreement, each Customer shall ¯ provide the name, title, and address of an employee within the organJ~tion who shall be specified as a desQmaated representative of the Customer’s organi~tion. The !0 Contract No. 96-SN-R-00t 10 1 2 3 4. 5 6 7 8 9 lO 11 12 13 14 !5 16 17 19 20 21 22 23 24 25 26 27 28 Customer’s.. representative will be authorized to represent the Customer in all matters involT~,ing the Agreement including the exercise of theCustomer’s ri~ts and the performance of the Customer’s duties under the Agreement and may participate in ai1 elections arid percentage votes. The Customer’s representative may desiLmate an individual to vote on behalf of the Customer’s representative in all elections and percentage votes. Such designation shall be furnished in writing to the Secretary of the Governance Board prior {o any election or vote. O&M PROGRAM: 8.1 Interim Process for Cus[0mer O&M Funding: The Governance Board will not be established in time for acomplete four-year O&M fund~g cycle as set forth in Section 8.2 for FY98 through FY2000. It is anticipated.that to the extent pract!cable, the processset forth in Section 8.2 will be fpll0wed for FY98 through FY2000. The Agencies wil! present Lists of O&M Activities, instead of O&M Work Plans, to the Governance Board. Based on the information provided by the Agencies, the Governance Board may develop and approve Customer O&M Funding Plans for FY98 through FY2000. The Governance Board for this interim process shall be that Governance Board established within 60 days following the effective date of this Agreement. 8.2 Customer O&M Funding Process: The Agencies will continue to pursue appropriations for their respective O&M Activities. The Governance Board will determine the level of funding to be contributed through the development of the Customer O&M Funding Plan. The foIlowing process wil! be utilized in developing the Customer O&M Funding Plan: 11 Contract No. 96-SNR-00110 1 2 3 4 5 7 8 9 10 !1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8.2.1. 8.2.2 8.2.3 8.2.4 Pr¢ILrninary O&M Work Plans: Each Agency will prepare a prelimina-D’ O&M Work Plan describing their respective O&M Activities and CIP. The Agencies will include an estimate of the anticipated leve! o{ appropriations. Prior~tization ofPre.liminary. O&M Work Plans: The Governance Board or a committee designated by the Governance Board will work with the Agencies in the prioritization of the specific elements within the preliminary O&M Work Plans. Additional elements that could be funded with Contributions may be included in the prioritization of the specific elements. This step culminates in proposed O&M Work Plans for each Agency including the specific elements which could be funded with Contributions. g_s_ta_Nishrnent of Proposed Customer O&M Funding Plan: The Governance Board will review the proposed O&M Work Plans developed pursuant to Section 8.2.2 and will accept or modify the specific elements for funding with Contributions. This step.culminates in the proposed Customer O&M Funding Plan. Determining Commitment Lev¢!: Following the establishmenfof a proposed Customer O&M Funding Plan, each Customer will individually establish, retain, or increase, as appropriate, its Contribution co.mmitment level. In order to facilitate the Customers timely commitment of Contributions, the following funding guidelines are defined. 8.2.4.1 Fair-Share Funding Level:_ A fair-share funding level is determined as the ratio of the Power Entitlement for the individual Customer as listed in Exhibit B, divided by the total Power Entitlement for all the ] 2 Contract No. 96- SNP,-00110 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 -28 8.2.5. Customers listed in Exhibit B, multiplied by the proposed Customer O&M Funding Plan level.. The Power Entitlements will be that set forth in the latest Power Entitlement Report. 8.2.4.2 Maximum Contribution: An individual Customer’s Contribution shall ngt exceed Western’ s ability to credit the Contribution against the annual power payment obligation of the Customer. 8.2.4:3 Redistribution of Contribution Commitments: Any redistribution in the level of Contribution commitments required to fund the .Customer O&M Funding Plan may be distributed among other concurring Customers. 8.2.4.4 Total Contributions Available: The sum of all individual Contribution commitments shall be the total Contribution commitments available to fund the Customer O&M Funding Plan. 8.2.4.5 Commitment: Prior to the Governance Board approving the Customer O&M Funding Plan, each contributing Customer shall commit in writing, pursuant to Section 7.1, .to the amount such Customer is willing to contribute. Development of the Approved Customer O&M Funding Ply: The Governance Board will revise, as necessary, the proposed Customer O&M F.unding Plan and will approve the Customer O&M Funding Plan which will specify the Contributions available for expenditure by each Agency by September 1st, three (3) years prior to the FY under consideration. 13 Contract No. 96-SNR-001 I0 1 2 3 4 5 6 7 8 9 l0 11 12 13 14 i5 16 17 18 19 20 21 22 23 24 25 26 27 28 8.2.6 8.2.7 The approved Customer O&M Funding Plan shall include the deposit requirements for each contributing Customer. If the total Conk-ibution commitment level would exceed that needed for the Customer O&M Funding Plan, the individual Customer deposit requirements will be based on the pro rata distribution of the commitments made pursuant to Section 8.2.4.5. A_gencies’ O&M Activities B~dgets: The Agencies will use their proposed O&M Work Plans and the approved Customer O&M Funding Plan to develop their respective O&M Activities Budgets. The Agencies’ O&M Activities Budgets shall be submitted through the Federal appropriation process and ultimate release of the President’s Budget. Revision of O&M Work Plans and CustomerO&M Funding Plans: Upon release of the President’s Budget, the Agencies will compare their submitted O&M Activities Budgets to the funding level identified in the President’s Budget As necessary, the Agericies will analyze and recommend modifications to their O&M Work Plans to avoid conflict with Congressional appropriation language while maintaining the original intent of the previously developed O&M Work Plans. If the Agencies determine that Contributions are no longer needed to maintain the program elements identified in the O&M Work Plans, the Agencies will recommend a reduction in the Contribution level. The Governance Board will then review the recommendations and make appropriate changes to the Customer O&M Funding Plan subject to Section 8.2.8. The Customer O&M Funding Plan will not be increased without the approval of the Governance Board and each contributing C.ustomer who elects to increase its ConU-ibution commitment by revising its Contribution commitment level in Exhibit C. !4 Conn-act No. 96-SNR-001 I0 1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23. 24 25 26 27 28 8.2.9 8.2.10 ~omer 0&~M F.~din~ P~.PL_a~: To ensure the Agencies’ continued operations, and to allow the Agencies time to incorporate the Governance Board’s decisions into their respective O&M Work Plans, the Governance Board’s final approval of the Customer O&M Funding Plan must occur no later than Aug~.~st 1st, prior to the FY of implementation to facilitate- the steps outlined in Section 8.3. J_fthe Governance Board does not approve a final Customer O&M Funding Plan by Auga~st tst pn’or to the FY of implementation, the Agencies will operate under the Congressionally approved appropriations level and at the Customer O&M Funding Plan level equal to seventy-five percent (75%) of the Customer O&M Funding Plan approved for that FY pursuant to Section 8.2.5. The Agencies will follow, to the extent practical, the ip, tent of the original Customer O&M Funding Plan in spending at the seventy-five percent (75%) funding level. Subsequent adjus, tments to the Customer O&M Funding Plan may be made only after the G0vemance Board’ s approval. i Con_m-essional Actions: Congressional actions may modify the President’s Budget. Should such action significantly impact the O&M Work Plans, tAe affected Agency and the Governance Board wi!l review and/or modify the Customer O&M Funding Plan pursuant to Sections 8.2.4 and 8.2.5. Repro_m-ammed Items: Latitude to repmgram items within the Customer O&M Funding Plan may be necessary in the overall management of power facilities, or due to unforeseeable circumstances. The threshold for reprogramming will be established-by the Governance Board. Reprogramming in excess of the predetermined threshold will be presented by the’ Agency(ies) for Governance Board approval prior to execution. All 15 Contract No. 96-SNR-00110 1 2 3 4 5 7 8 9 !0 11 12 13 14 15 16 17 -18 !9 20 21 -22 23 24 25 27 28 8.2.11 8.2.12 8.2.13 reprogramming changes made by the Agencies will be documented and reported to the Governance Board within ninety (90) days of occurrence. Exigency Fund: An exigency fund may be established by the Governance Board and may be included in the Customer O&M Funding Plan. The level of this fund will be determined based upon exigency requirements, as presented by the Agencies, and/or in the event of an Emergency or other requests brought to the Governance Board. Within this exigency fund, the threshold for Emergency expenditures will be established by the Governance Board. Latitude to make Emergency expenditures within the O&M Work Plans may be necessary in the overall management of power facilities,-or due to unforeseeable circumstances. Within ninety (90) days, any Emergency expenditures, within the predetermined threshold made by the Agency(ies), will be documented and repotted to the Governance Board. Emergency expenditures in excess of the predetermined threshold will .be presented by the Agency(ies) to the Governance Board for approval. Expenditures from the exigency fund, for other than Emergencies, will be approved by the Governance Board on-acase-by-case basis. Achieved Savings: In order to encourage greater eflSciencies in O&M Activities, any savings in the use of the Customer O&M Funds may be directed by the Agencies subject to Governance Board approval. Carryover: Unobligated funds in the trust account(s), otherwise known as carryover, will be committed to projects and activities as approved by the Governance Board. 16 Conma~t No. 96-S:N.rR-00! !0 1 2 3 4 5 6 7 8 9 10 11 -12 13 !4 15 16 17 18 19 20 -21 22 23 24 £5 26 27 28 8.3 Spending Limitations~ The Agencies wil! ensure that spending does not exceed the combined funding level of the appropriations approved for its O&M Activities by Congress and the Customer O&M Funding Plan approved by the Governance Board. 8.2.15 ~hanges to Custdmer O.&M Funding Pro~es~: Changes to the Customer O&M Funding Process set forth in this Section 8.2 sha!l be approved by the Governance Board. Financial Management: 8.3.t BAIIiIlg: Western wil! be responsible for all billing of the Contributions under the approved Customer O&M Funding Plan or the default Customer O&M funding level of seventy-five percent (75%). Western will request the contributing Customers to deposit Contributions into an EscrowAccount, based on the Customer O&M.Funding Plan level determined pursuant to ¯ Section 8.2.5 and Section 8.2.8, and guidance provided by the Governance Board in accordance with the terms of this Agreement. Billing for Contributions which includes Escrow Account reserves for a FY wil! begin in August immediately prior to commencement of the FY. The Governance Board may change the month for the first billing for the FY. 8.3.2 Contribution Credits on Power_Bill: C.ustomers will receive credits on their monthly power bills equal to their previous month’s Contribution to be used to fi_aance Agency O&M Activities; Provided~ That Customers will not receive credits on their power bills dot Escrow Account reserve deposits until Escrow Account reserve funds are withdrawn from the Escrow Account by 17 Contract No. 96-SNR-00110 1 2 6 8 9 lO 11 12 13 14 15 ~16 I8 19 20 21 22 23 24 25 26 2V 28 be Agencies. Ix~ the entire credit cannot be applied to a monthly power biIl, the credit balance w~ll be carried forward and appIied to future power bills. Escrow Account for Customer 0&M Funding Plan: Under the direction of the Governance Board; an Escrow Account v,41i be established for depositing the Contributions. Fees associated with the Escrow Account will be deducted from the Escrow Account balance. The Governance Board will select a Program Treasurer to manage and administer the Escrow Account. All funds advanced by the Customers into the Escrow Account will only be used by the Agencies for expenses identified in the Customer O&M Funding Plan approved by the Governance Board and for payment of fees associated with the Escrow Account. 8.3.3.1 Escrow Account Reserve: The purpose of the Escrow Account reserve is to ensure adequate cash flow for the Agencies expenditure of Contributions:. The initial Escrow Account reserve level shall be established by the Governance Board at their first meeting. An initial Escrow Account reserve of at least 1/12 (estimated to be $2 million) of the total armual O&M Program cost is needed prior to any expenditures by the Agencies. With the approval of the Customer O&M Funding Plan, the Governance Board shall determine the appropriate Escrow Account reserve level. It is anticipated that the Escrow Account reserve needed will be approximately 25% of the greater of the current or the next FY Customer O&M Funding Plan. Contract No. 96-SNR-00110 1 2 .3 4 5 6 7 8 9 10 11 12 13 14 -15 16 17 18 19 20 21 22 23 24 25 26 27 28 8.3.4 8.3.5 8.3.3.2 Interest Earned in the Escrow Account: Interest will be earned on the funds in the Escrow Account. The interest will be credited to each Customer Iisted in Exhibit B in proportion to the individual Customer’s annual deposits of funds into the Escrow Account. 8.3.3.3 End of FY Escrov¢ Account Reconciliation: After the close of the FY, the Program Treasurer shall reconcile the Escrow Account, by Customer, to reflect the actual deposits, Escrow Account fees, credits pursuant to Section 8.3.2, interest earned and late deposit fees.. The Program Treasurer will use this Escrow Account balance to prepare a statement of reconciliation for each Customer. The Customer may request a refund of its reconciled balance. If no requests for a refund is received from the Customer within thirty (30) days after receipt_ of the annual statement of reconciliation, the balance will be carried forward and credited to that Customers Contribution for the next FY. Recording Contributions: Contributions used to finance Agencies O&M expenses during any FY will be recorded in the CVP power repayment study for that FY. Late Deposit Fee: Contributing Customers who deposit their requested Contribution later than the due date indicated on the bill, will be assessed a late deposit fee on the amount unpaid. Bills not paid in full by the due date shall bear a charge of .05 percent (,05%) of the amount unpaid for each day payment is delinquent. The late deposit fee will not be Considered to be a 19 Contract No. 96-SNR-00110 1 2 3 4 5 6 7 8 9 10 11 12 13 I4 15- 16 17 18 19 20 21 22 23 24 25 26 27 28 8.3.6 8.3.7 #part of any Con~ibution. The Governance Board may change the level and mechax~sm for application of the late deposit fee. Trust Accounts for Customer O&M F~ding Plan: Funds from the Escrow Account will be transferred into two trust accounts, one for Western and one for Reclamation, within the United States Treasury, where funds will be held prior to Commitment, obligation, and expenditure for O&M Activities. Agencies’ requests for transfer of funds, will be accomplished in a manner approved by the Governance Board. No interest will be earned on the funds in the trust accounts. EachAgency will administer its respective trust account. l~fnnds: Refunds of Escrow Account balances shall be returned to the Customers as follows: ¯ 8.3.7.1 O&M Program Termination: Should the O&M Program terminate, the balance of funds remaining in the Escrow Account, plus interest earned, less credits received pursuant to Section 8.3.2 and less any Escrow Account fees, will be returned to each Customer proportionate to its level of Contributions. 8.3.7.2 Individual Termination fram the Agreement: Individual termLnation of participation in the Agreement can occur in two ways and refunds will be made as follows: 8.3.7.2.1 Termination from Agreement: Should the Customer terminate its participation in the Agreement with the ninety 20 Contract No. 96-SNR-00110 3 4 7 9 I0~ ]] 12 ]3 14 16 17 19 20 22 23 24 25 27 (90) day notice pursuant to Section 9, the Customers share of the balance of funds remaining in the Escrow Account, plus interest earned, less credits received pursuant to Section 8.3.2, and less any Escrov¢ Account fees, will be returned to the Customer after the Customer’s Contribution commitment(s) have been satisfied. 8.3.7.2.2 Termination as a Western Preference Power Customer: Should a Customer terminate its electric service contract (primary contract) with Western pursuant to Section 9, the Customer’s share of the balmnce of funds remaining in the Escrow Account, plus interest earned, less credits received pursuant to Section 8.3.2, and less any Escrow Account fees, will be returned to the Customer within ninety (90) days of contract termination. 8.3.7.3 Change in level of Contributit)n: At the change of FY’s, Customers who have reduced their Contribution commitrnent level for the next FY may request a refund of their surplus Escrow Account reserve funds, calculated pursuant to Section 8.3.3.3. !~JJall0Jlag: Unless otherwise agreed to by the Governance Board, the Agencies will continue to seek appropriations for funding ClP. When appropriations are used, repayment of CIP will be in accordance with repayment requirements set forth in the Agencies’ policies on repayment of investment. CIP funding below the threshold established by the Governance Board, will be t~eated and repaid in the same manner as an annual expehse. If any Cnstomezis) desires to fund CIP in excess of the established 21 Con~ No. 967SNR-00110 6 7 8 9 l0 11 12 13 14 .15 I6 17 18 19 20 21 22 23 24 25 26 27 28 1 2 3 4 9. 5 threshold, such voluntary funding will be subject to the individua! Customer’s approval and will be performed through a separate agreement with the appropriate Agency. TERS~NATION OF.INDIVI]DUAL CUSTOMIER PA_RTICIPATION .IN THE AGREEMIENT: An individual Customer may terminate its participation in this Agreement upon a ninets’ (90) day written notice to the Secretary of the Governance Board. When a Customer terminates its participation in this Agreement, all Contribution commitments and all other obligations made by that Customer under this Agreement ~hal! remain in effect until satisfied. After satisfying all Contribution commitments and other obligations made by the Customer pursuant to this Agreement, the Program Treasurer shall remm the Customer’s share of the remaining Escrow Account balance pursuant to Section 8.3.3.3. Provided, That if such Customer terminates its electric service contract @mary contract) with Western, all ¯ of its obligations under this Agreement shall terminate concurrently with the termination of the electric service contract. Provided f~her, That any late deposits and fees due to the Escrow Account must be fully satisfied prior to termination. 10.GOVERNA_NCE BOARD: A Governance Board will be established within six~cy (60) days following the effective date of this Agreement. Western will notify the Customers of the date of the first Governance Board meeting by giving a thirty (30) day written notice to all Customers. 10.1 Oualificafions/-blembership on Governance Board: Western, Reclamation, and any Customer meeting the qualifications set forth in this Section 10.1 is eligible to be a member of the Governance Board. The Agencies will represent their respective interests, and the elected Customer members_shall represent the interest of their respective Customer group as-defined under th4 following sections. 22 Contract No. 96-sINrR-001 I0 I 2 3 4 5 6 7 8 9 10 !1 12 13 14 !5 16 17 18 19 20 21 22 23 24 25 26 27 28 10.1.1 10.1.2 10.1.3 Composition of Oov~manoe Board_: comprised of twelve (12) members. Governance Board will be: The Governance Board will be The overall composition of the (a)Customers.10 (b)Reclamation 1 (c)Western Agencies MemSersh~p on G¢.v,manc, Bo.ard: The Agencies shall appoint and designate in wwiting their respective member(s) t0the Governance Board. ~0mer Membership on the Governance Board: To ensure equitable and diverse participation of the Customers, Customer membership on the Governance Board shall be grouped as follows: (a)MunicipalfPublic Utility Districts/Rural Electric Cooperatives (6 . (b) (c) (d) Governance Board members) Federal/State/Other (2 Governance Board members) Water and!or Irrigation Districts (1 GoVernance Board member) First Preference Customers (1 Governance Board member) At least one (1) Small Customer shall be a member in groups (a) and (b) above, and no Customer will have more than one (1) member on the Governance Board. The Contributor in group (a) with the largest annual Contribution commitment shall be deemed a Governance Board member. The preference power customers and their respective groupings are as set forth in Westem’s Central Valley Project Contract Rate of Delivery Report dated May 311 1996. Any new grouping of preference power customers, or changes to the classiJScation of existing preference power customers, will be proi~qsed by Western and approved by the Governance Board. 2 3 Conmac~ No. 96-siNrK-00110 I 2 3 4 5 6 7 8 9 10 11 i2 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 10.1.4 ~"Election of Customer M¢mbersNp on the Oovernance Board: Each Customer group shalI select and designate in writing.their members to the Governance Board. To be elected a Customer C_rovernance Board member in Customer groups (a), (c), and(d) as defined in Section 10.1.3, a Customer must be a Contributor. A Governance Board member ~rom Customer group (b) in Section 10.1.3 is only required to be a Customer. Any Customer may nominate a qualified candidate for election to the Governance Board. 10.1.4.1 Initial elections, by the Customer groups, for membership to the Governance Board will be held on the day of or prior to the first Governance Board meeting. Subsequent elections for all Customer Governance Board members will be held in February 2000 and every three (3) years thereafter. 10.1.4.2 A Customer Governance Board member may remain on the Governance Board until the member resigns, is replaced in an election, is no longer qualified to be a Customer Governance Board member, or is otherwise removed. 10.1.4.3 An election to fill any Customer Governance Board member vacancy shalt be held prior to or at the next scheduled Governance Board meeting. 10.1.4.4 Each Customer representative may vote once for each of the available Governance Beard positions wit.h_in its Customer group as outlinedin Section 10.1.3. The candidates receiving the most "votes are awarded the positions available. 24 Contract No. 96-SNR-00110 ! 2 3 4 5 6 7 8 9 !0 11 12 13 14 15 !6 17 18 19 20 21 22 23 24 25 26 27 28 10.2 To vote in an election, any Customer employee or designated representative may vote on behalf of the Customer. A Customer may choose to submit a written vote to the Secretary of the Governance Board. Provided, That ira dispute arises regarding who is representing the Customer only the representative designated in writing may vote. 10.1.4.6 Western will notify all Customers within each Customer group of the date of the Customer group’s first election by giving a thirty (30) daywritten notice to all Customers. Thereafter, the Secreta.D, of the Governance Board will provide notification of elections. 10.1.4.7 The election procedures specified in Section 10.i.4 for each Customer group may.be changed by a two-thirds (2/3) vote of Customers in that Customer group. 10.1.4.8 An elected Customer member of the Governance Board may be removed by its respective Customer group subject to a two-thirds vote of Customers in that Customer group. D_~orum and Voting of Governance Board: 10.2.i Quorum: A majority of the Govemanee Board members in attendance shall constitute a quorum necessary for the transaction of business at any meeting of the Governance Board. Such quorum must include the Agencies’ members on the Governance Board. 25 Contract No. 96-SNR-00110 1 .3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2~ 10.3 t0.2.2.#~: All matters coming before the Governance Boardfor approval shall require the affirmative vote of Western, Reclamation, and two-thirds (2/3) of the Customer Governance Board members present; Provided, That an Agency member shall not vote on the other Agency’s O&M Work Plans or the other Agency’s proposed expenditure of Contributions. The Customer Governance Board member approval shall be based on one vote per Customer Governance Board member, except, after having a vote based on one-member one-vote basis, a CustomerGovernance Board member or both Agencies jointly may call for a percentage vote on Customer O&M Funding Plan issues only., whereby all Customers listed in Exhibit B a~d whose designated representative is present at the meeting, may participate in the voting and may represent only its own interests; Provided, That an Agency may not represent a customer in per.centage votes. The percentage vote of each Customer listed in Exhibit B will be based upon that Customer’s annual commitment percentage leve! listed in Exhibit B for the FY under consideration. An afSrmative vote representing two thirds (2/3) of the total Contribution commitment, for the FY under consideration, as set forth in Exhibit B is required for passage under the percentage vote and shall override the Customer Governance Board member vote taken on a one-member one- vote basis. If less than two-thirds of the percentage level of the Customers listed in Exhibit B are present, a Governance Board member may call for the vote to be held over until the nex~t Governance Board meeting. Desi~ated AlternaIe: A Governance Board member may designate an alternate to attend any Governance Board meeting by a written notice to the Secretary of the Governance Bdard, and such alternate shall have full authority to act and vote in place 26 Contract No. 96-SNR-00110 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of the absent Governance Board member. a Customer Gove)nance Board member. An Agency may not serve as an alternate for 10.4 Duties of the G0v~rnanee Board: t 0.4.1 ,~¢ncral ,Pow¢r~: The Governance Board shall take such actions as it may d~em approp.riate in exercising all of the powers contemplated and conferred by this Agreement. 10.4.2 v]3.2.l.a_W~: The Governance Board shall develop and adopt bylaws vdthin forty five (45) days after its first meeting for circulation to all Parties. An appropriate comment period will be afforded to all Parties prior to its adoption by the Governance Board. 10.4.3 ~: The Governance Board may create, direct, and terminate committees as it may deem appropriate. The Governance Board shall set forth the duties and responsibilities of each committee. Each committee shall be subject at all times to the direction and bylaws of the Governance Board. 10.5 Function of the Governance Board: The .Governance Board will monitor and provide oversight of the O&M Program and establish general O&M objectives. The Governance Board w~ have the following powers, duties, and responsibilities in regard to the overall monitoring and oversight of the O&M Program. 10.5.1 Review of Annual RepQI~: Review of annual reports on the O&M Program is performed to: 27 Contract No. 96-SNR-00110 1 2 3 4 5 6 "7 8 12 13 14 16 17 18 2O 21 23 24 25 28 (1) (2) Det’ermin~ that Governance Board approved work is completed as plarmed; and Direct any necessary audits. 10.5.2 Establishment of O&M O~ectives: The Governance Board shall establish the objectives for activities related to the expenditure of.Contributions as they relate to: (1) (2) (3) (4) Annual O&M Activities for the fiscal year under consideration; Capital Improvement Projects; ¯S~rategy for scheduling O&M Activities; New or improved goals and!or indices to be accomplished during the FY then under Qonsideration, based upon the previous years’ experiences and results; and Reporting requirements of the Agencies and Governance Board. 10.5.3 Review and Approval Rights: The Governance Board shall review and approve changes to the Governance Board by-laws and items related to the Customer Contributions, such as: (1) (2) (3) (4) (5) (6) Customer O&M Funding Plan; Exigency Fund level; Expenditure thresholds for Emergency, reprogramming, and CIP; Escrow Account administrative duties; Escrow Account reserve level; and Proposed procedures and schedules for the Contribution collections. Contract No. 96-SNR-00110 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 !0.6 0ffieers a~d .Secretary._: 10,6.1 Chair and Vice-Chair: The Governance Board Members shall elect a Chair and a Vice-Chair from the Governance Board Members. The Chair and Vice-Chair may be removed from office by the Governance Board whenever, in its judgement, the best inierests of the Governance Board will be served the~reby. Vacancies shaiI be filled by the Governance Board at that meeting or the next meeting. . Duties of the Chair: The Chair shall: (1) (2) (3.) preside over all meetings of the Governance Board; perform duties established in the bylaws; and perform all duties that may be reasonably required by the Governance Board. 10.6,1.2 Duties of the Vio,-Chairi Vice-Chair shall: (1) (2) (3) In the absence of the chair, the perform the duties of the Chair; perform duties established in the bylaws; and perform all duties that may be reasonably required by the Governance Board. 10.6.2 Duties of the Secretary_ of the Oovemance Board: Unless otherwise determined by the Governance Board, the secretary of the Governance Board shall be provided by Western. The secretary of the Governance - Board shaH: (1)record all votes and keep a complete record of all meetings of the Governance Board; .29 Contract No. 96-SNR-00110 1 2 3 4 7 8 9 10 11 12 13 14 !5 16 17 18 19 20 21 22 23 24 25 26 27 28 11. (2) (3) distribute copies upon eequest to interested parties] and perform duties that may be reasonably required by the Governance Board.- UNess designated to be Westem’s representative, the secretary of the Governance Board shall not be a voting member of the Governance Board. DISPUTE RESOLUTION_: 11.1 Informal Settlement: The Parties vdI1 use good faith efforts to settle all disputes arising under, or in relation to, this Agreement. ¯ 11.2 Between V~Zeste~ and Reclamation: Shou!d any dispute, arise between the Agencies concerning the O&M Program, the duties or obligations of the Parties, or the implemen~mtion or interpretation of the O&M Program, remain unresolved for a period of twenty (20) days,.such dispute shall be forwarded to the Agencies’ Senior Managers for resolution. 11.3 Between the Customers or the Customers and ~: Should any dispute arise among ~e Customers or between the Customers and the Agency(ies) under or in relation to the O&M Program, the duties or obhgation of the Parties, or the implementation or interpretation of the O&M Program, that remains unresolved for a period of thirty (30) days (or such shorter or longer time as agreed by the Parties), such dispute shall be forwarded by wri~en.notice to the Chair of the Governance Board for resolution by the Governance Board members. The written notice shall set forth the nature of the dispute and the resolution and relief sought. ShoNd the Governance Board be unable to resolve such dispute by unanimous decision, within a period of thirty (30) days from submission of the dispute to them, such dispute shall be forwarded ~o the Senior Managers, who shall meet within thirty (30) days (or such 30 Contract No. 96-SNR-00110 1 2 4 5 6 7 8 9 I0 !1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12. !3. shorter or~..l_.onger time as agreed by the Senior Managers) to discuss and ~ttempt to reach d resolution of the dispute. Should a!l attempts at resolutio~f by the Senior Managers provg unsuccessful, with the written consent of all Parties Whichare parties to such disputes, the dispute will be submitted to mediation which shall be conducted using any procedures agreed to by such Parties. The mediator will not render a decision, but will assist ..the Parties in reaching a mutually satisfactory agreement. The Parties to the dispute agree to equally split the costs of the mediation. AUDIT RIGHTFS: 12.1 Audit Request: A Party may request the Program Treasurer to cause an audit to be conducted of the Escrow Account established in accordance with this Agreement. Such audits shall not be conducted more often than every two (2) years. Such audit may examine records which relate to work associated with Contributions including, but not limited to, the financial and contractual records of the Program Treasurer, Western, and Reclamation. The costs, including reasonable costs incurred by the Program Treasurer, Western, and/or Reclamation in the performance of the audit, shall be paid by the Party.(ies) requesting the audit. 12.2 Information Concerning Work Performed: A Party shall be afforded the oppommity to obtain information concerning work performed under this Agreement through reasonable requests to the Governance Board. If the amount of information desired becomes excessive, as determined by the Governance Board, the Governance Board shall inform the requesting Party(ies) of same, and shall make arrangements to provide the information requested at the sole expense of the.requesting Party(ies).. ~ORS A_N]) ASSIGNS." This Agreement shall inure to the benefit of and be binding upon the Pfirties hereto and their respective successors. No Party shall assign its 31.Contract No 96-Sh~-00110 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2t 22 23 24 25 26 27 28 14. 15. interest in th~s Agreement, in whole or in part, without the prior v, Mtten consent oft_he other Parties. In no event, shall any Party assisn this Agreement to any Party that is not fmancially responsible, or which cannot perform its obligations pursuant to this Agreement, nor shall any Party assign this Agreement on any terms at variance from those set forth in this Agreement. No permitted assi~maent or transfer shall changethe duties of the Parties, or impair the chances of obtaining performance under this Agreement, except to the extent set forth in such permitted assignment and approve~t in writing by the Parties. ENFORCEABILITY: It is not the intent of the Parties that this Agreement convey any rights to third Parties to erfforce the provisions of the Agreement. This Agreement can only be enforced by the Parties or their successors. SEVER.~ILITY: If any clause, sentence, paragraph, or part of this Agreement should for any reason be iinaity adjudged by any c6urt of competent jurisdiction.to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remainder of this Agreement but shall be confined in its operation to the clause; sentence, paragraph, or part thereof directly involved in the controversy in which the judgment is rendered. If such judgment modifies or holds Invalid any material terms or conditions of t~s Agreement in such a manner that any Party is required to incur new or different obligations not expressly provided herein or forego benefits wkich it was otherwise entitled to, the Parties shall in good faith renegotiate the terms and conditions affected by the judgment so as to restore the original balance of benefits and burdens contemplated by the Parties as of the effective date of this Agreement. Such renegotiated terms and conditions shall be in the form ofan amendment to this Agreeme~at which shall be effective upon execution by the Parties. The original AgreemenZ shall remain in full force and effect, as mo’dified by saidjudgme .nt, until the negotiation process for the amendment is complete. 32 Contract No. 96-SNR-00110 1 2 4 5 7 Io 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16.GENEP~A~L POWER CONTRACT PROVISIONS: Articles 1, 28, 29, and 31 throu~_h 43 oft.he G~neral Power Contract Provisions, effective August 15, I995, attached hereto, are hereby made a part of this Agreement,.the same as if they had been e×pressly set forth herein. 17.tLELATIONSKIP OF TI~..PARTIES: The covenants, obligations, and Iiabilities of the Parties are intended to be severaI and not joint or collective, and nothing herein contained shall ever be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligations and liabilities under this Agreement. No Party shall be under the control of or shall be deemed to control any other Party. No Party shall be the agent of or have a right or power to bind any .other Party without its express written consent, except as expressly provided in this Agreement. 18.OWNERSIIIP RI(}~S: The ownership of, the title to, and the operation and maintenance responsibility, for any equipment procured with Contributions under the terms of this Agreement shall be in the name of the IINrlTED STATES. 19.I.I,~t~I]~: This Agreement does not confer any iiability upon the Customers for any claim, action or judgment, arising out of or in connection with the work generally described in this Agreement. 20.ATTACI{MENTS AND EXT{IBITS MADE PAR-: Inasmuch as the signatories, their contacts and representatives, contributing Customers, and individual Customer commitments and Contribution(s) under this A~eemei~t may change during the term hereof, they will be set forth in Exhibits A, B and C respectiv~ely~ Each of said exhibits shall become.a part of this Agreement during the term fixed by its provisions. Exhibits A, B and ~ are attached hereto, and each shall be in force and effect in accordance 33 Contract No. 96-SNR-001 !0 1 2 3 4 5 6 7 8 9 10 !1 12 13 14 15 16 17 18 19 20 2! 22 23 24 25 26 27 28 with its. ierr~..s until respectively superseded by a subsequent exhibit. Upon si~mature by the Agencies and the Prograzn Treasurer, the Escrow Agreement will become a part of this Agreement and copies will be distributed by Western to all Parties. 21.EXECUTION LN ¢OIJNTERPART: This Agreement may be executed in a number of counterparts and shal! constitute a single document with the same force and effect as if each Party had signed all other counterparts. IN WITNESS WltEREOF, the Parties have caused this Agreement to be executed the day and year first above w~tten. The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the Party for whom they sign. Western Area Power Administration By: By: Title :__j~c_gional Manager Address: 1 !4 Parkshore Drive Fol~om. CA 95630 Bureau of Reclamation By: Title: Re_Nonal Director Address: Mid-Pacific ReNon 2800 Cottage Way - Sacramento, CA 95825 34 Contract No. 96-SNR-00110 1 2 3 4 5 6 7 8 9 lO 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Co~tract No. 96-SNP,.-00110 IN WITNESS WIKEREOF, the Parties have caused this Ageement to Be executed the day and year first above written. The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the Party for whom they si~ml. (Seal)City of Palo Alto _AttesT: By: Title: By: Title: Address: 35 Contract No. 96-SNR-00110 2 3 4 5 6 7 8 9 l0 I1 !2 14 15 16 17 18 19 20 21 .22 23 24 25 26 27 28 Contract No. 96-SNK-00110 IN WITNESS. WttE. REOlP, the Parties have caused this Agreement to be executed the day ind.year first above written. The sim~atories hereto represent that they have been appropriately authorized to enter into this Agreement on bdialf of the Party for whom they sign. (Seal)City of Palo Alto .Attest: By: Title: By: Title: Address: 35 Contract No. 96-SNR-00110 I 2 3 4 5 6 7 9 10 11 12 !3 14 15 16 17 18 19 20 21. 22 23 24 25 26 27 28 Contract No. 96-SNR-00110 IN WITNESS Wtl~EREOF, the Parties have caused this Agreement to be executed the day and year first above ~,witten. The si~maatorigs hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the Party for wl~om they alp. (Seal) Arrest: By: Title: City of Palo Alto By: Title: Address: 35 Contract No. 96-S]’,IR-00110 Contract No. 96-SN’R-00110 RESOLUTION NO. BE IT RESOLVED BY THE OF The is authorized, on behalf of to execute this Agreement with the Western Area Power Administration entitled Contract No. 96-SNR-00110. Adopted: Contra~No. 96-SNR-00110 ricabi!ity .................................................2 II.~ oy SERVI~ FNOvISlC~. 2.Character of Service "2 3 Use of Capa~ city or Energy in Excess of Contract Obligatiea ....2 4 Continuity of Service .........................................2-3 5 Multiple Points of De_!ivery. ..................................3 * 6 Y~teri!~ ......................................................3-4 7 Existence of Tr-~ion Service Contmmct "4 8 COndLitions of Tranmmission Service ...- .........................4-5 9 Mmltiple Points of De_liv~_~y !nvolvir~ D~ and Transmit+~ed’ ~ Deliveries ....................................................5 i0. Oc~stroction, Operation, ar~ Maj_ntermmce of ~ctor’s Pc~_r System . ................................................. 5 II!. ii. 12. 13. * 14. 15. 16. Chan~e of Ratas ...............................................6 Minimum Seasonal or Annual Capacity Charge ....- ................6 Billir~ and Payment .............................. .............6-7 Nonpayment of Bills in Full When D~e .....................¯ .....7 Adj~ for Fractional. Billing Period ......................7 ~djustments for Curtailments to Firm Service ..................7-8 ~ SALES I~OVISION~. 17.Resale of Firm Electric Service -8 * 18.Distribtrtion Principles "8 19.CorfCl-act Subject to C61or-ado River Ccmlmact ....................8-9 20. .21. 22. 23 24. 25. 26. 27. 28. 29. * 30. Design Apgrmvml . ...............................~ ..............9 In--ion and Aameptar~ .....................................9 As-Built Drawings ...................... .......................9 EqL~i~_r~t <X~e~p }~LrF~e_rs ............... ..................!0 Z%i_rd-rarty Use Of Facilities .................................l0 Char~es to Western Control Facilities .........................l0 ~odification of Western Facilities~. ................" ...........10-11 Tr-~ion Rights .... .......................................iI Construction ar~ Safety Procedures ............................ll-12 Environmental Compliance "12 ~ibility for Hazardous Materials .. ................~ .....12 34. 35. 36. * 37. 38. 39. OT~ER PRUVIBIC~S. 31. Authorized P~-presentatives of the Farties .....................12 32. Eff~d: of C~ecti~n Headings "12 33. Operating G<lidel~ and P~ ...........................13 ~llable Formes ................................." ........13 Liability ................................................ ......13 Cooperatien of Contrmcting P-~rties ....¯ .........................13-14 Tra!nsfer of Interest in the Contl-act ................~ .........14 Waivers .............- ..........................................14 Notices., ...... ..............................." .................1440.Contir~ent Upon A~propriations ................................15 41,Officials Not to Benefit ......................................1542..Cmv~ Aqainst Contingent Fees ...............................15 43,C~ntr~ct Work Hcurs and .Safety Sta~ ......................1544,Eqsal Opportunity ~mplmyment Prmctices ........................1545.Use of Convict labor ............. ...................~ .........15_August 15, 1995. Effective ~ 15, 19~5 i. Ar~licability. !. !. OZnese Gene_rai P~wer Contract Provisions shall be a part of the conti~ct to ~ich they are attached. [[hese provisions set forth g~ conditions applicable to the contract. Specific terms, set forth in the contrac~ have precedence over any provision herein. " .1.2. If the Contractor has ~ utiAities which are either ~y or £<Jirect_ly receiving benefits frc~ the cos tract, then the Cont_~actor shall require such ~embers te ccmply with the General Pc~er Contract Provisions, ~icles i0, 17, 18, 19,. 29, 30, 36, 43, 44, and 45. 2. Character of Service. Electric emergy su~p~ li~ or ~tted under the contract will be ~pha_se, alternatir~ current, at a nominal frequency of sixty (60) hertz (cycl~ per second). 3. Use of Camacity .or Enerqy in Excess of ConCx~ct Obliqation. ~he CQKt--~ctsr iS not entitled tm use Federal po~er, energy, or capacity in amsunts greater than the Western .m3ntmmct delivery obligation in effect for each type of service provided for in the contract ~ with the a~proval of Western. Unauthorized overruns of contract delivery obligations shall be subject to charges, specifiel in the contract or the a~plicable rmte of authorized overruns, when-the approval expires, whichever cmcurs first. obliqation, if additiona£ pc~er, emelm!y, or capacity is not available from W~-tern, the responsibility for securing additiQnal power, energy, or capacity shall rest wholly with the Contractor. 4. Continuity of Service. El~rtric service will be_ smpplied or tmmnsmitted omYtinu~!y ~xcept for: (i) fluctuations, int~ions, or ~ons due tm uncontrollable forces, as def~ in Article 34 @h%cmntrol!able Forces) herein, (2) fluctuations, in--ions, or reductiop~ due to operation of devices ~!ed for pswer system protecticn; and (3) tempormry fluctuations, ~ons, or r~luctions, whiQh, in the opinion of the party supplyir~ the sergice, are ne<~s~q_ry or desirable for the pulqscses "P~ised August 15, 1995. of mainter~nce, repairs, rep!acem~nts, ~lation of _equi~Tent, or investigation ~ ~en. The party su~o.. !ying service, except~ in case of emergency, wil! give the party to wh~m service is being p_~-vided r=~onab!e advance n~tice of such ~rary in--ions or’ reductiens and wi!! ~e the cause t_her~3f with diligence. 5. Mu!tinle Points of Delivery. Wqn~n el~-tric service is supplied at or ~tted tm two or m~re points of. delivery under the same r~te schedule, said rate sd~dule shal! ~apply separately tm the service supplied at or ~tted to each point of delivery;-_r~c~ided, ~hat where the meter r~ ar~ censi~ separately, and durin~ abnormal conditions, the Centr~ctmr’s system .is ~nnected between points of delivery such that .duplic~tien of metered pc~_r is possible, the meter r~ding~ at each affected point o5 delivery wi!l be adjusted tm compensate Zor duplication of power demak~ recerded by meters at alternate points of delivery due to abnormai conditions which are beyond the Contractor’s control or tempor-~ry conditions caused by scheduled outages. 6. i. ~]e total electric pc~er and energy supplied or ~tted under the contract :wil! he ~r~ by. meter£nj equipment to be ~ed and maintained by Western, a designated r~pr~sentative of ~stern, or. by the and maintained by the Contractor or another pc~_r supp~lier, as provided in the contract, meets the metering standards of Western if such meterin~ equivn~qt will be used for billing or other acc~aTtinj purposes by Western. 6.2 .. Meters sb~nll be sealed and the seals shall be broken only upon oc~sio~s when the meters are to be ~, tested, or adjusted, and r~p~tives of ~the interested parties shall be afforded reasonable c~portunity to be present, upon such occasions. Metering equi~m~_nt shail be inspected and tested each year by the party responsible for meter Meters shall also he :itested at any r~nsonable time upen request by either party hereto, a suppl~ pcm~_r ~lier, ~ion agent, or control area q:el-ator. Any metering equipment fctux~ to he damaged, defective, or inaccurate shall be r~ and readjusted .or r~_placed by the party responsible for meter maLrfcenance. Meters found with broke_n seals shall be tested for trumpeting and, if appropriate, meter rea~. shall he adjusted by Western ~ursuant to Article 6.3 belch. 6.3. ~ as otherwise provide~ in Article 6.4 hereof, shottld a~y meter that is needed by Western for billing or other acccuntir~ ~ fail to register accurately, the electric pc~er and energy supplied or ~tted durir~ such period of failure to ~egister accurately, shall, for billir~ purposes, be estimated by Western frcm the best available information. 3 6.4.~: If ac~le ~ions and tests of a mete~ r-~eded by ~ .for billinj or o~dzer acccunting pu_rVoses disclose an ermmr exceedinj t~o pe_~oan~ (2%), then c~rrection based ~upon the inaccum-acy fctnm! shall be m~de of the records of services ~ durinj the period that .such Lnaccuracy has existed as detarmkned by WesT2m-n; Provided, That if such period of inaccurmcy cannst be dete_n~ined, co--ion shall be made for the per. iod beginnir~ with the msnthly billing period immediately preceding the- 6.5. Any correction in billing resulting fl~]m co--on in meter records shall r~rma!ly he made in the next m~nth!y bi!i reriered by Western te the Centractmr-.. Payment of such bill shall constitute full adj~t of any claim between the pal-ties hereto arisir~ cut of irmccur~cy of meterinj 7. ~xistence of Transmission Service Contract. If the omnt_r~ct provides for Western t~ furnish services usir~ the facilities of a third party, the obligation-of WesTern shall- be subject to and continjent upon the eydstence of a tr-an~m~ission se~vice c~ntract gl-anting Western rights to use such facilities. If Western acquires or constructs facilities ~ich wmuld enable it to furnish ~ service to the Contractor, Western, at’ its c~tion, may furnish service over its c~n facilities. 8. Conditions of %k-ansmission Service. 8. I. When the electric service tnnder the cc~trmct is furnished by ~ over the facilities of othersby virtue of a ~ion service arrar~ement, the power a~i energy will be furlnished at the. ~oltage available and under the conditions which ey_ist fr~n time to time on the. t_ransmJ_~sion 8.2. Unless otherwise provided in the contract or.attached r~te schedule, the Ccrfcractor shall maintain a power £actmr at each point of delivery frc~ Western’s ~sion .agent-as ~ by the ~ion agent. 8.3. Western will endeavor to inform the Cmatrmctor fr~n time to ti~e of any c~ c~lated on the system over which the service issupplied, hut the costs of any. changes made necessary in the Oontracter’s system because of changes or coalitions on the system over which the service is supplied shall not be a charge against or a liability of Western. 8.4. If the Contractor, because of changes or conditions on the system over which service unJer the contract is supplied, is required to make changes on its system at its own exp~_nse in order to contj_rma receiving service under the cc~km~ct, then the Contractor may terminate service under the contract upon not less than sixty (~0) days’ written nstice given to Western prior to. ~ such changes, bat r~t thereafter. Exhibit C City of Palo Alto Cont_ract No. 96-siNrR-00 ! 10 Exhibit C (Lndividual Customer Commitment and Contribution) i. This Exhibit C, to be effective under a_ad as a part of Contract No. 96-SN-R-00110 Cnereina~er called the Agreement) shall become effective upon execution, and shall remain in effect until either superseded by a revised Exhibit C or upon termination of the Agreement. 2. The Ciu’ of Palo Alto agrees to make a Contribution pursuant to Section 8 of the Agreement for the Fiscal Year and in the amount specified in Section 3 below. The minimum Contribution commitment level required to qualify as a Contributor pursuantto Section 5.4 of the Agreement is indicated in Column 2 of the table shown in Section 3 below. 3. Please specify the Contribution commitment level(s) in the appropriate row(s) for the applicable FY(s). Column" 2 Section 5.4 Quaiifying Amount in Dollars Calumn 3 Contribution Commitment Level Amount in Dollars Column 4 Revision No. 0__ Contribution Commitment Level Amount in Dollars Column S Revision No. ___0 Contribution Commitment Level Amount in Dollars 1998 EllA 1999 N/A 2000 N/A 2001 206,995.71 2o6,995.7! 2002 206,995.71 2o6,995.71 The signature below Commits the Customer named to make Contributions, for the specified Fiscal Year(s), up to but not greater than the level indicated in f.he latest revision oft.he Contribution commitment level for a specific City of Palo Alto. Date of Execution:By: Titlei Address: CI~ of Palo Alto Contract No. 96-SNR-00110 Exhibit C (Individual Customer Commitment and Contribution) This Exhibit.C, to be effective under and as a part of ContractNo. 96-SNR.-00! 10 (hereinafter called the Agreement) shalt become effective upon execution, and shall remain in effect until either superseded by a revised Exhibit C or upon termination of the Agreement. 2. The City of Palo Alto agrees to make a Contribution pursuant to Section 8 of the Agreement for the Fiscal Year and.in the amount specified in Section 3 below. The mum Contribution commitment level required to qualify as a Contributor pursuant to Section 5.4 of the Agreement is indicated in Column 2 of the table shown in Section 3 below. 3. Please specify the Contribution commitment level(s) in the appropriate row(s) for the applicable FY(s). Column 2 . Section 5.4 Qualifying Amount in Doliars C~lumm 3 Cont:dbution Commitment Level Amount in Dollars Column 4 Revision No.~0 Contribution Commitment Level Amount in Dollars Column 5 Rev{sion No. O Contribution Commitment Level Amount in DoJlars 1998 N/A 1999 N/A 2OOO N/A 2001 206,995.71 206,995.7! 2002 206,995:71 206,995.7! The signature below commits the Customer named to make Contributions, for the specified Fiscal Year(s], up to but not greater than the level indicated in the latest revision of the Contribution commitment level for a specific FY. City of Palo Alto Date of Execution:By: Title: Address: Contract No. 96-SNR-00110 -,~ Exhibit C (Individual Customer Commitment and Contribution) This Exhibit C, Revision 5, to be effective and as a part of Contract 96-SN-R-00110 (hereinafter called the Agreement) shall become effective upon execution, and shall remain in effect until either superseded by a revised Exhibit C or upon termination of the Agreement. The City of Pa]o Alto agrees to make a Contribution pursuant to Section 8 of the Agreement for the Fiscal Year’and in the amount specified in Section 3 below. The Fair- Share Funding Level as defined in Section 8.2.4.1 of the Agreement .is indicated in Column 2 of the table shown in Section 3 below. o Column FY Please spedfy the Contribution commitment level(s) in the appropriate row(s) for the applicable FY(s). 1 Column 2 Fair-Share Amount in Dollars Colunm 3 Revised Fair-Share Amount in Dollars Column 4 Revision No. 3 Contribution Commitment Level Amount in Dollars Column 5 Revision No. 4 Contribution Commitment Level Amount in Dollars 2002 $488,859.94 $488,859.94 $606,251.79 $606,251.79 2003 $1,496,108.56 $2,126,998.80 $1,500,000.00 $1,500,000:00 2004 $3~766,717.49 $4,853,642.05 $384,914.59 $3,800,000.00 2005 $4,348,523.58 $4,348,523.58 0 0 Coturrm 6 Revision No. 5 Contribution Commitment Level Amount in Dollars $606,251.79 Fair-Share Funding Level amounts and Contribution Commitment amounts, if any, are not shown for fiscal years prior to fiscal year 2002 in the above table. For that information refer to an earlier revision of Exhibit C. The signature below commiLs the Customer named to make Contributions, for the specified Fiscal Years(s) up to but not greater than the level indicated in the latest revision of the Contribution commitment level for a specific FY. CITY OF PALO ALTO Date of Execution:By: Title: Address: Page I of 1 Exhibit C, Revision 6 City of Palo Alto Contract No. 96-SNR-00110 Exhibit C (Individual Customer Commitment and Contribution) This Exhibit C, Revision 6, to be effective and as a part of Contract 96-SNR-00110 (hereinafter called the Agreement) shall become effective upon execution, and shall remain in effect until either superseded by a revised Exhibit C or upon termination of the Agreement. The City of Palo Alto agrees to make a Contribution pursuant to Section 8 of the Agreement for the Fiscal Year and in the amount specified in Section 3 below. The Fair- Share Funding Level as defined in Section 8.2.4.1 of the Agreement is indicated in Column 2 of the table shown in Section 3 below. Please specify the Contribution commitment level(s) in the appropriate rosy(s) for the applicable FY(s). Column 1 Column 2 I CNumn 3 Cohmm 4 t Column 5 ..... FY Revision No. 4 Revision No. 5 Revision No. 6 Fair-Share Contribution Contribution Contribution Amount Commitment Level Commitment Level Commitment LeveI in Dollars Amount in Dollars Amount in Dollars Amount in Dollars 00a $~,126,998.8 $1,500,000.00 $2.,2oo,oo0.oo $2,2oo,o0o.oo 2004 $4,853,642.05 $3,800,000.00 I $4,900,00o.oo $4,9oo,0o0.00 2005 $4,348,523.58 0 $4,4oo,ooo.oo $4,4oo,ooo.oo 2006 $5,588,336.09 0 0 $5,600, ooo. oo Fair-Share Fnnding Level amounts and Contribution Commitment amounts, if any, are not shown for fiscal years prior to fiscal year 2003 in the above table. For thai information refer to an earlier revision of Exhibit C. The signature below commits the Customer named to lnake Contributions, for the specified Fiscal Years(s) up to but not greater than the level indicated in the latest revision of the Contribution commitment level for a specific FY. CITY OF PALO ALTO Date of Execution:By: Title: Address: Page 1 of l Exhibit C, Revision 7 City of Pa!o Alto Contract No. 96-SNR-00110 Exhibit C (Individual Customer Commitment and Contribution) This Exhibit C, Revision 7, to be effective and as a part of Contract 96-SNR-00110 (hereinafter called the Agreement) shall become effectiYe upon .execution, and shall remain in effect until either superseded by a revised Exhibit C or upon termination of the Agreement. o The City of Palo Alto agrees to make a Contribution pursuant to Section 8 of the Agreement for the Fiscal Year and in the amount specified in Section 3 below. The Fair- Share Funding Level as defined in Section 8.2.4.1 of the Agreement is indicated in Column 2 of the table shown in Section 3 below. Please specify the Contribution commitment level(s) in the appropriate row(s) for the applicable F¥(s). Column FY 2004 2005 2006 2007 Column 2 Fair-Share Amount in Dollars $4,853,642.05 $4,348,523.58 $5,588,336.09 $5,990,926.91 Column 3 Revised Fair-Share Amount in Dollars $4,853,642.05 $3,401,050.44 $5,239,711.11 $5,990,926.91 Column 4 Revision No. Contribution Commitment Level Amount in Dollars $3,800,000.00 $4,400,000.00 $0 $0 Column 5 Revision No. 6 Contribution Commitment Level Amount in Dollars $4,900,000.00 $4,400,000.00 $5,600,000.00 $0 Column 6 Revision No. 7 Contribution Commitment Level Amount in Dollars $4,900,000.00 $4,400,000 $5,600,000 $6,000,000 Fair-Share Funding Level amounts and Contribution Commitment amounts, if any, are not shown for fiscal years prior to fiscal year 2004 in the above table. For that information refer to an earlier revision of Exhibit C. The signature below commits the Customer named to make Contributions, for the specified Fiscal Years(s) up to but not greater than the level indicated in the latest revision of the Contribution commitment level for a specific FY. CITY OF PALO ALTO Date of Execution:By: Title: Address: Page 1 of 1