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HomeMy WebLinkAboutAgenda Packet - July 26, 2010 - UB AZUSA LIGHT t 'WATER AGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AZUSA LIGHT & WATER JULY 26, 2010 729 N. AZUSA AVENUE 6:30 P.M. AZUSA, CA 91702 AZUSA UTILITY BOARD ROBERT GONZALES CHAIRPERSON KEITH HANKS JOSEPH R. ROCHA VICE CHAIRPERSON BOARD MEMBER URIEL E. MACIAS ANGEL CARRILLO BOARD MEMBER BOARD MEMBER 6:30 P.M. Convene to Regular Meeting of the Azusa Utility Board • Call to Order • Pledge to the Flag • Roll Call A. PUBLIC PARTICIPATION 1. (Person/Group shall be allowed to speak without interruption up to five(5) minutes maximum time, subject to compliance with applicable meeting rules. Questions to the speaker or responses to the speaker's questions or comments shall be handled after the speaker has completed his/her comments. Public Participation will be limited to sixty (60)minutes time.) 1 001 B. UTILITIES DIRECTOR COMMENTS C. UTILITY BOARD MEMBER COMMENTS D. CONSENT CALENDAR The Consent Calendar adopting the printed recommended action will be enacted with one vote. If Staff or Councilmembers wish to address any item on the Consent Calendar individually, it will be considered under SPECIAL CALL ITEMS. 1. Minutes. Recommendation: Approve minutes of regular meeting on June 28, 2010 as written. 19- June Minutes.pdf 2. Notice Inviting Bids for Electric Cable Rejuvenation. Recommendation: Authorize staff to issue a Notice Inviting Bids for outside services for rejuvenation of underground electric cables. NIB-CableRejuvtn.pd f 3. Contract Extension for RBF Engineers. Recommendation: Approve the extension of contract for RBF Engineers for engineering design services for Project W-266, Water Pipeline Replacement, from June 30, 2010 to September 30, 2010. C RBF Contract Ext W-266.pdf 4. Contract Extension for Hall & Foreman Engineers. Recommendation: Approve the extension of contract for Hall & Foreman Engineers for engineering design services for Project W-265, Water Pipeline Replacement, from June 30, 2010 to September 30, 2010. Hall-Foremen-W-265 rev.pdf 2 00 5. Grant of Easement from Target Corporation. Recommendation: Approve the following resolution accepting the grant of easement from Target Corporation: A RESOLUTION OF THE UTILITY BOARD AND CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, ACCEPTING CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. Target Rpt.pdf Target Esrmt Reso.pdf 6. Grant of Easement from Kir Covina, L.P. Recommendation: Approve the following resolution accepting the grant easement from Kir Covina, L.P. for Lowes store site: A RESOLUTION OF THE UTILITY BOARD AND CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, ACCEPTING CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. am. Lowes Esermt Lowes Esrmt Rpt.pdf Reso.pdf 7. Quitclaim Deed for Water Utility Easements. Recommendation: Authorize the City Manager to sign quitclaim deeds for two water utility easements for Lowes store site located in 1348 N. Azusa Avenue, Covina. 1041- taj- Lowes Lowes Quitclaim Deed Quitclaim-Rpt.pdf Quitclaim•Deed.pdf Exhibits.pdf 8. License and Service Agreement with Power Settlements Consulting and Software, LLC. Recommendation: Approve the license and service agreement with Power Settlements Consulting and Software, LLC and authorize the Mayor to sign said agreement. E311- IRV PwrSetnts-Rpt.pdf PwrSetnts-Agrmt.pd f 3 003 E. SCHEDULED ITEMS 1. Customer Information System (CIS) Upgrade. Recommendation: 1) Approve an Addendum to Information System Agreement with Systems and Software, Incorporated, for the purchase of enQuesta version 4.0 Upgrade to the City's CIS at a cost not-to-exceed $400,000; and 2) authorize the City Manager to execute said addendum and to take any and all other actions necessary for the purchase implementation and upgrade. CIS Upgrade-Rpt.pdf Improvements.pdf Addendum pdf SOW.pdf Pricing&Pymt Schedule.pdf 2. Ratification of Annual Water Rights Lease Transactions. Recommendation: Ratify the water rights leases to the City of Arcadia, Canyon Water Company, and Miller-Coors and ratify signature of the leasing documents as allowed by Resolution No. 09-C69 approved by the Utility Board at its July 27, 2009 regular meeting. Wtr Rt Leases.pdf Arcadia.pdf CynWtrCo.pdf 3. Adjustment to Contract Water Rates for MillerCoors, LLC. Recommendation: Approve the following resolution: A RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF THE CITY OF AZUSA, CALIFORNIA, ADJUSTING CONTRACT WATER RATES FOR MILLERCOORS, LLC. Gait- Miller-Coors-Rpt.pdf Miller Reso.pdf Miller-Coors-Sup-Rpt .pdf 4. City of Azusa's Participation in the Los Angeles County Recycling Market Development Zone (RMDZ). Recommendation: Approve the following resolution: A RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF THE CITY OF AZUSA, CALIFORNIA, SUPPORTING THE EXPANSION OF THE LOS ANGELES COUNTY RECYCLING MARKET DEVELOPMENT ZONE (RMDZ). 1 4- `fir: 11 9:- RMDZ-Rpt.pdf RMDZ Reso.pdf Neg Dec.pdf Ltr of Int.pdf Loan Proc.pdf 4 004 5. Local Reliability Adequacy Capacity Confirmation Agreement. Recommendation:Approve a Local Resource Adequacy Capacity purchase of 30 MW from RRI Energy in amount of $1,026,000 and authorize the Director of Utilities to execute the associated Confirmation Agreement once the executable copiesareprepared. r at RA Cap Purch RFP for Local Conf Agrmt.pdf Rpt.pdf RAC.pdf F. ADJOURNMENT 1. Adjournment. "In compliance with the Americans with Disabilities Act,if you need special assistance to participate in a city meeting,please contact the City Clerk at 626-812-5229. Notification three (3) working days prior to the meeting or time when special services are needed will assist staff in assuring that reasonable arrangements can be made to provide access to the meeting." "In compliance with Government Code Section 54957.5, agenda materials are available for inspection by members of the public at the following locations: Azusa City Clerk's Office-213 E. Foothill Boulevard, Azusa City Library-729 N.Dalton Avenue, and Azusa Light&Water-729 N.Azusa Avenue,Azusa CA." 5 005 a�t b eir AZUSA LIGHT & 'WATER CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD/CITY COUNCIL MONDAY, JUNE 28, 2010 — 6:30 P.M. The Utility Board/City Council of the City of Azusa met in regular session, at the above date and time, at the Azusa Light and Water Conference Room, located at 729 N. Azusa Avenue, Azusa, California. Chairman Macias called the meeting to order. Call to Order ROLL CALL Roll Call PRESENT: BOARD MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA ABSENT: BOARD MEMBERS: NONE ALSO PRESENT: Also Present City Attorney Ferre, Assistant City Manager Makshanoff, Director of Utilities Morrow, Assistant to the Director of Utilities Kalscheuer, Director of Customer Care and Solutions Vanca, Assistant Director of Water Operations Anderson, Captain Momot, Assistant Economic and Community Director McNamara, City Engineer Hassel, C, Administrative Services Director — Chief Financial Officer Kreimeier, Revenue Supervisor Cawte, City Clerk Mendoza, Deputy City Clerk Toscano. PUBLIC PARTICIPATION Pub Part None. None UTILITIES DIRECTOR COMMENTS Dir Comments Director of Utilities Morrow provided an update on Proposition 16 which was recently defeated and thanked G. Morrow the Board Members for their Resolution in opposition to the proposition. He also provided an update on San Comments Juan Project. He introduced Mr. Yarek Lehr, new Assistant Director of Resource Management and Mr. Federico Langit, new Assistant Director of Electric Operations. UTILITY BOARD MEMBER COMMENTS Brd Mbr Cmts Board Member Hanks voiced his opinion in favor of Assembly Bill 32. Hanks Comment The CONSENT CALENDAR consisting of Items D-1 through E-4, was approved by motion of Board Consent Cal Member Carrillo, seconded by Board Member Hanks and unanimously carried, with the exception of item D-2, Appvd, D2 which was considered under the Special Call portion of the Agenda. Spec Call 006 • 1. The minutes of the regular meeting of April 26,2010,were approved. Minutes 2. SPECIAL CALL ITEM. Spec Call 3. A RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF THE CITY OF AZUSA, Res. 10-C38 CALIFORNIA, APPROVING PARTICIPATION IN USED OIL PAYMENT PROGRAM Used Oil ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF RESOURCES RECYCLING AND Payment Prgm RECOVERY. 4. Approval was given to extend the R.T. Lawrence,Corporation contract for two years until October 31, R.T. Lawrence 2012 per extension option of Professional Services Agreement for third-party payment processing signed Corp. Contract on November 1, 2007; and amend contract purchase order to add$60,000 to cover this period. Extension SPECIAL CALL ITEMS Special Call Board Member Rocha asked since the project was funded under budget,where the excess funds would go. Question& Director of Utilities Morrow responded stating that the funds would go into the Electric Fund and Response complemented staff for the savings. Moved by Board Member Rocha, seconded by Board Member Carrillo and unanimously carried to find that NOC Perry Perry C. Thomas Company has completed Project LD2010-2, furnish and install underground electric C.Thomas Co. substructures on Lark Ellen Avenue; approve the Notice of Completion; authorize the Mayor to execute document; and direct City Clerk's Office to record same at the Los Angeles County Recorder Office. SCHEDULED ITEMS Sched Items Director of Utilities Morrow addressed item regarding Water Service Agreement with Rancho Vasquez Agmt detailing the water issue,terms of the agreement and responded to questions posed by Board Members. w/Rancho Moved by Board Member Carrillo,seconded by Board Member hanks and unanimously carried to approve the Approved water service agreement with Rancho Vasquez and authorize the City Manager to execute said agreement. Director of Utilities Morrow presented the Electric Financial Study which was based on five(5)findings as Dir of Utilities follows: 1. Current revenues are not adequate to maintain the long-term financial stability of the electric Detailed utility(Page 17). A $2.6 million reduction in our cash reserves is forecasted for FY 2010-11,which would Electric lower cash reserves to about$9 million by FY end. 2. The Board should replace the current San Juan Fuel Financial Study Cost Adjustment mechanism with a Power Cost Adjustment(PCA)that factors in all purchase power costs and wholesale revenues. The PCA should be implemented for FY 2010-11. 3. A series of base rate adjustments should be considered after the PCA is implemented. Based on current five year forecast, consultant is recommending that a 2.5% increase be implemented each year for the next 5 fiscal years, in order to meet reserve requirements as identified in the consultant report.4.That a minimum reserve policy should be set at $12.6 million for FY 2010-11 and increased annually to$14.3 million by 2015 based on a formula.5.The five year financial projection should be updated annually as part of the budget process including review and update of five year capital improvement program projection. Board Member Hanks offered a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF THE CITY OF AZUSA, Res. 10-C39 CALIFORNIA, REPLACING ELECTRIC RATE SCHEDULE"FCA-SJ FUEL COST ADJUSTMENT— Replacing SAN JUAN RESOURCE"WITH"PCA—POWER COST ADJUSTMENT" SCHEDULE." Electric Rate Schedule Moved by Board Member Hanks, seconded by Board Member Carrillo to waive further reading and adopt. PCA Resolution passed and adopted by the following vote of the Board Members: 06/28/10 PAGE TWO 0(17 AYES: BOARD MEMBERS: GONZALES,CARRILLO,MACIAS, HANKS, ROCHA NOES: BOARD MEMBERS: NONE ABSENT: BOARD MEMBERS: NONE Director of Utilities Morrow presented a new rate schedule"EDR"establishing an Economic Development Dir of Utilities Rate Incentives Pilot Program and detailed its contents. Discussion was held between Board Members and Comments Staff. Res. 10-C40 A RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF THE CITY OF AZUSA, EDR Rates CALIFORNIA, APPROVING ELECTRIC RATE SCHEDULE "EDR- ECONOMIC DEVELOPMENT RATE"INCENTIVES FOR QUALIFIED COMMERCIAL AND INDUSTRIAL ELECTRIC CUSTOMERS. Moved by Board Member Hanks, seconded by Board Member Macias to waive further reading and adopt. Resolution passed and adopted by the following vote of the Board Members: AYES: BOARD MEMBERS: GONZALES, CARRILLO,MACIAS,HANKS NOES: BOARD MEMBERS: ROCHA ABSENT: BOARD MEMBERS: NONE Staff Reports STAFF REPORTS/COMMUNICATIONS Info on Director of Utilities Morrow presented the Replacement Water Cost Adjustment Factor (RWCAF) as an RWCAF information item and advised that it will be decreased to$0.00 per CCF from the current rate of$0.0518 per CCF effective July 1, 2010 until June 30,2011 which is good for customers. Moved by Board Member Carrillo,seconded by Board Member Macias and unanimously carried to adjourn. Adjourn TIME OF ADJOURNMENT: 7:42 P.M. SECRETARY NEXT RESOLUTION NO. 10-C41. 06/28/10 PAGE THREE 009 40. AZ USA r.ur 1 Y.'Brrp CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JULY 26, 2010 SUBJECT: AUTHORIZATION TO ISSUE A NOTICE INVITING BIDS FOR OUTSIDE SERVICES FOR REJUVENATION OF UNDERGROUND DIRECT BURIED ELECTRIC CABLES. RECOMMENDATION It is recommended that the Utility Board authorize staff to issue a Notice Inviting Bids for rejuvenation of underground electric cables. BACKGROUND In the past, some medium voltage (12,000 volts) cable runs in the electric distribution system were installed underground by "direct burial". Today, underground electric construction methods are much better, and involve pulling cables through underground conduits (pipe), which is safer and improves longevity of cables. Underground direct buried cables have an estimated useful life of about 20+ years, but there are a number of factors that can impact cable longevity such as insulation integrity, conditions of splices or cable terminations, and current/past circuit operating conditions. When a direct buried cable fails, repair crews will either have to remove/replace or abandon the failed de-energized cables. Emergency replacement of the direct buried cable, with new cables pulled into conduits, can be a complex undertaking because it generally involves prolonged service interruption, disruption to existing premises, premium costs associated with the urgent repair work, and customer inconveniences. Staff looked at methods to extend the life of underground direct buried cables as an option to replacing underground cables using modern construction methods. Some member utilities of the American Public Power Association (APPA) have already utilized a life extension method 009 July 26, 2010 Cable Rejuvenation Page 2 of 2 commonly referred to as "Cable Rejuvenation". This method involves injecting a patented fluid along the cable run to "rejuvenate" the stranded cable and insulation. Estimated life extension of a rejuvenated cable is an additional 20 to 40 years. Preliminary inquiries with APPA member utilities regarding their experiences using cable rejuvenation indicate that rejuvenation has produced some positive and encouraging results. As a result, staff conducted some comparative cost analysis using a contemplated pilot or demonstration project in the area of Arrow Highway & Citrus Avenue. The sample involves 3,000 circuit feet of underground cable located in a multifamily housing area where cable replacement would be difficult to undertake. This service area was acquired in 1995 from another utility which installed the underground cable. The initial cost analysis suggests that cable replacement could be as much as ten times the cost of cable rejuvenation. Moreover, cable rejuvenation would have minimal impact to the properties involved. After carefully considering the choices and, in view of the Electric Division's limited resources, staff is seeking authorization from the Utility Board to prepare a Notice Inviting Bids, and authorization to solicit bids from outside service contractors specializing in cable rejuvenation. The estimated budget for a cable rejuvenation pilot project is expected not to exceed $30,000. FISCAL IMPACT There is no fiscal impact of issuing a Notice Inviting Bids. Once bids are received and evaluated, the cost information will be reported to the Utility Board. Prepared by: F. Langit Jr., PE, Assistant Director—Electric Operations H. Vuong, PE, Electrical Engineer Dan Kjar—Electric Distribution Supervisor 01. 0 AZUSA 4.3 , , * TIGHT R 'NATI'R CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: JULY 26, 2010 SUBJECT: EXTENSION OF TIME TO RBF ENGINEERS' CONTRACT FOR DESIGN OF PIPELINE REPLACEMENT PROJECT W-266 RECOMMENDATION It is recommended that the Utility Board approve the extension of RBF Engineers' contract for engineering design services for Pipeline Replacement Project W-266 from June 30, 2010 to September 30, 2010. BACKGROUND At its regular meeting held March 23, 2009, the Utility Board approved the award of a contract for consultant engineering design services for the Pipeline Replacement Project W-266 to RBF Engineers. RBF's contract term was originally approved through June 30, 2010. Because RBF has not yet completed the design of Project W-266 due to the economy and staff layoffs, it is necessary to extend the contract termination date of June 30, 2010 to September 30, 2010. Staff has reviewed the provision of a time extension for RBF and finds it to be acceptable. Because this project will not be bid in FY 2010-2011, this is presently not a time sensitive project for ALW. We anticipate that RBF will complete the project in July or early August. FISCAL IMPACT There is no fiscal impact from the extension of time of this contract. Prepared by: Chet Anderson, P.E., Assistant Director- Water Operations oll -:x AZUS.A IIGHT R 'RAIU CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: JULY 26, 2010 SUBJECT: EXTENSION OF TIME TO HALL & FOREMAN ENGINEERS' CONTRACT FOR DESIGN OF PIPELINE REPLACEMENT PROJECT W-265 RECOMMENDATION It is recommended that the Utility Board approve the extension of Hall & Foreman Engineers' contract for engineering design services for Pipeline Replacement Project W-265 from June 30, 2010 to September 30, 2010. BACKGROUND At its regular meeting held March 23, 2009, the Utility Board/City Council approved the award of a contract for consultant engineering design services for the Pipeline Replacement Project W- 265 to Hall & Foreman Engineers. Hall & Foreman's contract term was originally approved through June 30, 2010. Because Hall & Foreman has not yet completed the design of Project W- 265, due to delays in obtaining easements and permits from Los Angeles County, it is necessary to extend the contract termination date of June 30, 2010 to September 30, 2010. Staff has reviewed the provision of a time extension for Hall & Foreman and finds it to be acceptable. Because this project will not be bid in FY 2010-2011, this is presently not a time sensitive project for ALW. FISCAL IMPACT There is no fiscal impact from the extension of time of this contract. Prepared by: Chet Anderson, P.E., Assistant Director- Water Operations 012 T AZUSA r.nr a arsrry CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JULY 26, 2010 SUBJECT: ACCEPTANCE OF GRANT OF PERMANENT EASEMENT FROM TARGET CORPORATION RECOMMENDATION It is recommended that the Utility Board approve the attached Resolution to accept a Grant of Permanent Easement from the Target Corporation and authorize the City Clerk to file said Resolution and attachments with the Office of the Los Angeles County Recorder. BACKGROUND Target Corporation is required to install Azusa Water System waterlines to serve their Target Store project in Azusa. One of the required waterlines crosses the south side of the Target property from Azusa Avenue to San Gabriel Canyon Boulevard parallel to, and north of, the Metrolink Railroad tracks. An easement is required for AL&W access to the waterline location and a permanent easement is required for placement of the waterline. Attached hereto is the resolution accepting said Grant of Permanent Easement, including Addendum to Grant of Permanent Easement, legal description ("Exhibit A") and map ("Exhibit B") showing easement location. FISCAL IMPACT All costs associated with the processing of this Grant of Permanent Easement are to be borne by Target Corporation. There is no cost to the City. Prepared by: Chet F. Anderson, P.E., Assistant Director—Water Operations 013 RESOLUTION NO. A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, ACCEPTING CERTAIN GRANT OF EASEMENT AND DIRECTING THE RECORDING THEREOF. THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA DOES HEREBY RESOLVE AS FOLLOWS: SECTIONS 1. That certain Grant of Easement executed by TARGET CORPORATION, a Minnesota Corporation, under date of the 5th of April, 2010 to the CITY OF AZUSA, a Municipal Corporation in Los Angeles County, State of California, its successors and assigns, the right of perpetual easement and right of way together with all necessary and convenient means of ingress and egress to and from said right of way or strip or parcel of land free from any and all buildings, equipment, vegetation, combustible materials, or obstructions of any kind, solely for the purpose of constructing, reconstructing, laying, maintaining, operating, using, altering, repairing, replacing, inspecting and relocating therein and thereupon and/or removing there from pipeline and related facilities, necessary thereto for the delivery of water to the property, in, on, over, under across and along the following described real property situated in the CITY OF AZUSA, Los Angeles County, State of California, to wit: See attached hereto, a Grant of Easement with Exhibits "A" and"B." Said Grant of Easement is hereby accepted and the City Clerk is hereby authorized and directed to cause the same to be filed for record in the office of the County Recorder of said County. SECTION 2. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED AND ADOPTED THIS 26th day of July, 2010. Joseph R. Rocha, Mayor ATTEST: Vera Mendoza, City Clerk I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Utility Board/City Council of the City of Azusa at a regular meeting of the Azusa Light&Water Utility Board on the 26th day of July, 2010. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza, City Clerk 014 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The City of Azusa THIS DOCUMENT IS FILED AT THE Light and Water Department REQUEST OF THE CITY OF AZUSA 729 North Azusa Avenue PURSUANT TO SECTION 6103 OF P.O. Box 9500 THE GOVERNMENT CODE. NO Azusa, CA 91702 FEE SHALL BE CHARGED THEREFOR. (SPACE ABOVE THIS LINE FOR RECORDER'S USE) GRANT OF PERMANENT EASEMENT FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, TARGET CORPORATION, a Minnesota corporation ("Grantor"), does hereby grant to the CITY OF AZUSA, CALIFORNIA, a municipal corporation, its successors and assigns, and its and their employees, contractors and agents ("Grantee"), a non-exclusive permanent ten foot (10') easement and right-of-way (the "Easement") to construct, operate, maintain, use, repair, alter, replace, and remove from time to time underground water supply systems and fire protection systems (hereinafter referred to as "Systems"), consisting of, but not limited to, underground conduits, vaults, manholes, handholes and including above-ground enclosures, markers and fire hydrants and other appurtenant fixtures and equipment necessary or useful for distributing water on, over, under, in, along, and across the following described parcel of real property situated in the City of Azusa, County of Los Angeles, State of California: As described in Exhibit "A" and depicted in Exhibit "B" attached hereto and made a part hereof. (the "Easement Area") This Easement is subject to the terms and conditions of the attached Addendum. TO HAVE AND TO HOLD the above granted and described premises unto the CITY OF AZUSA, CALIFORNIA, its successors and assigns forever. IN WITNESS HERETO, Grantor has executed this Grant of Permanent Easement this tt. day of A p ( , 2010. GRANTOR: TARGET CORDO • TI• By: (1 *IA Type F 11 .me Dietrich Haar Its: Director Reel E: f.&t* Title j(arget Lor[of&fiv 934117 V.2 015 ADDENDUM TO GRANT OF PERMANENT EASEMENT TO THE CITY OF AZUSA BY TARGET CORPORATION The Easement is subject to the following terms and conditions: 1. Reservation of Rights;Relocation. Grantor hereby reserves and retains all other property rights in and to the Easement Area, including without limitation,the rights to(a)use the Easement Area for any purpose whatsoever, so long as such use does not substantially and unreasonably interfere with Grantee's rights hereunder(it being expressly understood that the use of the surface of the Easement Area for vehicular traffic,pedestrian traffic, landscaping,parking and/or signage shall be deemed not to substantially interfere with Grantee's rights hereunder)and(b) locate electric,gas and water lines and other utilities in the Easement Area, so long as such improvements do not substantially and unreasonably interfere with Grantee's permitted use of the Easement Area. 2. Installation of Systems. The underground Systems placed in the Easement Area by Grantee shall be buried to a depth not less than 30 inches below the existing surface,and Grantee shall cause the backfill to be compacted in layers to avoid settling, voids and/or air pockets. 3. Conduct of Work and Notification. Any installation,maintenance,replacement, repair and/or removal of the Systems performed by Grantee, its agents and employees shall be performed(i)at Grantee's sole cost and expense, (ii) during months other than November, December or January(except in the event of an emergency), (iii)after thirty(30)days' notice to the Grantor(except that in an emergency the work may be initiated after reasonable notice),(iv)after normal business hours(except in the event of an emergency)and(v)with adequate provision for the safety and convenience of all persons using the surface of such areas. In addition, Grantee, its agents and employees shall(a)promptly pay all costs and expenses associated with said work and(b)diligently complete such work as quickly as possible. 4. Use;Maintenance. Any use of the Easement shall be performed with care and in such manner as to cause the least interference with the surface of the Easement Area and with the use and enjoyment thereof by Grantor and others lawfully present thereon. Grantee shall maintain the Systems in a good and safe condition, and Grantee shall install, maintain, operate,repair,replace and remove the Systems in compliance with all applicable governmental rules,regulations and requirements 5. Restoration by Grantee; Removal of Systems. If the surface of the Easement area or any portion thereof,or any landscaping, curbing,pavement or other improvements thereon, shall be disturbed by installation,operation, maintenance,replacement or removal activities or other activities performed by or on behalf of Grantee in connection with the use of the Easement, said surface and improvements shall be promptly restored by Grantee to their condition just prior to such disturbance. Immediately following the performance of work by or on behalf of Grantee, Grantee shall remove from the Easement Area and surrounding land all equipment,materials and debris resulting from or used in connection with such work. 6. Normal and Reasonable Use by Grantor. Grantor, its successors and assigns and persons occupying or lawfully present on the Easement Area shall not be liable for damage, if any,which may be caused by normal and reasonable use of,or vehicular or pedestrian traffic over,the Easement Area. Such normal and reasonable use may include the landscaping or parking of vehicles on the Easement Area and installation, operation and maintenance of standard parking lot improvements including paving,bumper curbs, light standards, striping and landscaping. 7. Prohibition Against Liens. Grantee shall not permit any mechanics',materialmen's or other liens to be filed against the Easement Area or other property owned by Grantor or any part thereof for work or materials furnished Grantee in connection with the use of the Easement,and Grantee agrees to indemnify,defend and hold Grantor harmless from and against the same. 8. Indemnification. To the extent permitted by law, Grantee shall indemnify, defend and hold harmless Grantor from and against any and all claims,demands, losses,damages,costs and expenses(including but not limited to court costs, penalties and reasonable attorneys' fees),judgments, liabilities and causes of action of any nature whatsoever resulting from or relating to the use or occupancy of the Easement by Grantee or arising in any manner out of the acts or omissions of Grantee or its agents or employees or any other persons acting under Grantee's direction or control in connection with the Easement or with the use or occupancy of the Easement Area. 01.6 9. No Representations or Warranties;Subject to Encumbrances. Grantee agrees that it is accepting the Easement Area without any warranty or representation regarding the Easement, and subject to all valid and existing licenses, leases, grants,exceptions, encumbrances,title defects,matters of record, reservations and conditions affecting the Easement Area and/or affecting access thereto. 10. Notices. All notices sent to Grantor shall be sent by certified or overnight mail to Grantor at the following address: Target Corporation Attn: Real Estate-Existing Stores 1000 Nicollet Mall Minneapolis,Minnesota 55403 11. Miscellaneous. This Agreement shall be governed by and construed in accordance with the laws of the State of Utah. This Agreement shall not be construed strictly for or against either Grantor or Grantee.The captions are inserted in this Agreement only for convenience of reference and do not define, limit or describe the scope or intent of any provisions of the Agreement. All notices to Grantor shall be delivered in writing at the address noted in the recitals or such other address as is provided by Grantor. [Rest of page intentionally left blank.] 017 STATE OF MINNESOTA ) CAPACITY CLAIMED BY SIGNER SS. ❑ INDIVIDUAL(S) COUNTY OF HENNEPIN ) I 1 CORPORATE On i , `'; ,201)before me, :.`�C1, LSe L a.;1`G- ,personally I)i QA r t.c-U• H ci appeared ';T1 Q-,-,;,:_ t'4..J r" a--personally known OFFICER(S) to me-OR- ❑ proved to me on the basis of satisfactory evidence to be the person(s) >>;`:e c_ve';" R1 L ..A -- whose name(s) is/are subscribed to the within instrument and acknowledged to me TITLE(S) that he/she/they executed the same in his/her/their authorized capacity(ies), and that 0 PARTNER(S) by his/her/their signature(s) on the instrument the person(s), or the entity upon 0 ATTORNEYIN-FACT behalf of which the person(s)acted,executed the instrument. 0 TRUSTEE(S) Witness my hand and official seal. 0 SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR L 0 OTHER: SIGN TURE OF/OTARY _-- - j,AAA V,I V V V V\t.,'--I'd V\i'VVVV' •- Li,., CORA i... 3PONHOLZ • _ .Li ? ad,Tp RY PUBLIC•MINNESOTA MY COMMISSION '17---i, EXPIRES JAN.31,2014 SIGNER IS REPRESENTING: NAME OF PERSON(S)OR ENTITY(IES) 70Li tL CC}.' '-),'"`---i-C°.\ 1V ATTENTION NOTARY: Although the information requested below is Title or Type of Document( . ' (4-- OPTIONAL, it could prevent fraudulent attachment of this certificate to ,.1_-n -:i-v.{- EL--'ROI0A}- unauthorized documents. Number of Pages THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Date of Document Signer(s)Other Than Named Above 018 EXHIBIT "A" LEGAL DESCRIPTION IN THE CITY OF AZUSA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, BEING A STRIP OF LAND LYING WITHIN LOT 1 OF TRACT 70189, AS PER MAP FILED IN BOOK 1355, PAGES 42 AND 43, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, THE CENTERLINE LINE OF SAID STRIP BEING DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEASTERLY CORNER OF SAID LOT; THENCE ALONG THE • EAST LINE OF SAID LOT NORTH 00°00'54" EAST, 26.68 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID LINE SOUTH 69°33'24" WEST, 268.80 FEET; THENCE SOUTH 89°59'56"WEST, 47.96 FEET TO THE WEST LINE OF SAID LOT. THE SIDELINES OF SAID STRIP TO BE PROLONGED OR SHORTENED TO ORIGINATE IN SAID EAST LINE AND TO TERMINATE IN SAID WEST LINE. THE ABOVE LEGAL DESCRIPTION IS DELINEATED ON EXHIBIT "B"AND IS MADE A PART HEREOF FOR REFERENCE PURPOSES. THIS DESCRIPTION WAS PREPARED BY ME, OR UNDER MY DIRECTION, IN CONFORMANCE WITH THE PROFESSIONAL LAND SURVEYOR'S ACT. �Q LANL)- ,� SCAL APOTHELOZ, P.L.S. 7734 v�� PASCAL R.�1C�`. LICENSE EXPIRES 12/31/09 APOTHELOZ 33\� DATE PREPARED: 10/15/09 EXP./2-3i-4,ei (5'� 57734 1 9T�OF CALIc.0 EXHIBIT"A"-Page 1 of 1 L:12007107-620 Azusa Target\Exhibit\Water EasementlWater easement.doc 019 EXHIBIT "B" PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR EXHIBIT "A" 40' W M Z W 50' W .. I Z • f'' W cn o = a m i .J N a n W Q PC)g <v 40' o CZ Oul.. (3., CD o < i 268 80 26 6e o I b, lo ..5S" . ,,,0 in ,q... 00 ,„.0. 8 Z z a �' N69 S. / RI No N ./ I so' R' R• 5• F• �/ I P. 0. 3 r i P cLJ N a / o SCALE: 1 a0' i SHEET 1 OR 1 i 160 N. Riverview Drive, 0 EXHIBIT "B" 6 Suite. 100 o CITY OF AZUSA, CALIFORNIA , '�'lt ` j Anaheim, CA 92808 N Dewe nnm nt R cou anc"Itat Cni Civil Engineering/Land Surveying/Land Planning (714) 685-6860 020 AZUSA 1.117 ti d'arrp CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JULY 26, 2010 SUBJECT: ACCEPTANCE OF GRANT OF PERMANENT EASEMENT FROM KIR COVINA, L.P. RECOMMENDATION It is recommended that the Utility Board approve attached Resolution to accept Grant of Permanent Easement from KIR Covina, L.P., and authorize the City Clerk to file said Resolution and attachments with the Office of the Los Angeles County Recorder. BACKGROUND KIR Covina, L.P. is required for their Lowes Store project to install Azusa Water System waterlines to serve their project. The required waterlines are located on Azusa Avenue in Covina, CA at the site of the old Home Depot store. A permanent easement is required for access to the waterline location and placement of the waterline. Attached hereto is the resolution accepting said Grant of Permanent Easement, including the legal description ("Exhibit A") and map ("Exhibit B") showing easement location. FISCAL IMPACT All costs associated with the processing of this Grant of Permanent Easement are to be borne by KIR Covina, L.P. There is no cost to the City. Prepared by: Chet F. Anderson, P.E., Assistant Director—Water Operations 021 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: The City of Azusa THIS DOCUMENT IS FILED AT THE Light and Water Department REQUEST OF THE CITY OF AZUSA 729 North Azusa Avenue PURSUANT TO SECTION 6103 OF P. O.Box 9500 THE GOVERNMENT CODE. NO Azusa,CA 91702 FEE SHALL BE CHARGED THEREFOR. (SPACE ABOVE THIS LINE FOR RECORDER'S USE) GRANT OF PERMANENT EASEMENT FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, MR Covina, L.P., a Delaware Limited Partnership ("Grantor"), does hereby grant to the CITY OF AZUSA, CALIFORNIA, a municipal corporation, its successors and assigns, and its and their employees, contractors and agents ("Grantee"), the permanent ten feet easement and right-of-way to construct, operate, maintain, use, repair, alter, replace, and remove at any time and from time to time underground water supply systems and fire protection systems (hereinafter referred to as "Systems"), consisting of, but not limited to, underground conduits, vaults, manholes, handholes and including above-ground enclosures, markers and fire hydrants and other appurtenant fixtures and equipment necessary or useful for distributing water on, over, under, in, along, and across the following described parcel of real property situated in the City of Covina, County of Los Angeles, State of California: As described in Exhibit "A" and depicted in Exhibit "B" attached hereto and made a part hereof. Together with all necessary and convenient means of ingress and egress to and from said right- of-way or strip or parcel of land, free from any and all buildings, equipment, vegetation, combustible materials, or obstructions of any kind, for the purpose of constructing, reconstructing, maintaining, operating, repairing, renewing, replacing, using, altering, or removing in any manner the Systems together with any and all of the purposes hereinbefore mentioned. TO HAVE AND TO HOLD the above granted and described premises unto the CITY OF AZUSA, CALIFORNIA, its successors and assigns forever. IN WITNESS HERETO, Grantor has executed this Grant of Permanent Easement this t 1' day of J t1-t, , KIR COVINA, L.P., a Delaware limited partnership By: Kir Covina 037, LLC, a Delaware limited liability company, its general partner By: Kimco Income Operating Partnership, L.P., a Delaware limited partnership, its managing member By. Kimco Income REIT, a Maryland real estate investment trust, its general partner By: — = E_,A `7Wit t c� Name: JOHN VISCONSI Title: VICE PRESIDENT 022 Date:May 27th,2010 City of Azusa Light and Water Department 729 North Azusa Avenue Azusa,CA 91702 OFFER OF WATER DISTRIBUTION EASEMENT TRACT NO. 45436 We hereby certify that we are the owners of the property included within the proposed Tract map No.45436 and we do hereby,and for our heirs,executors,administrators,successors, and assigns,jointly and severally agree that prior to the transfer in fee of any lot/parcel as shown on the proposed Tract Map No. 45436 that we will notify the prospective owner in writing that an offer of a water distribution easement has been made to the City of Azusa and is an encumbrance on the property even though the document has not recorded. Enclosed are executed copies of the proposed easements. KIR COVINA,L.P.,a Delaware limited partnership By:Kir Covina 037,LLC,a Delaware limited liability company,its general partner By:Kimco Income Operating Partnership,L.P., a Delaware limited partnership,its managing member By:Kimco Income REIT,a Maryland real estate investment trust,its eneral partner By:___ C(/“11,(/“.. Name: Title: JOHN VISCONSI VICE PRESIDENT 023 STATE OF ) CAPACITY CLAIMED BY SIGNER - INDIVIDUAL(S) COUNTY OF ) - CORPORATE On , 0_, before me, , personally appeared personally known to me - •R - - proved to me on the basis of satisfactory evidence to be the OFFICER(S) person(s) whose name(s) is/a subscribed to the within instrument and acknowledged to me that TITLE(S) he/she/they executed the same .4 his/her/their authorized capacity(ies), and that by his/her/their - PARTNER(S) signature(s) on the instrument the •erson(s), or the entity upon behalf of which the person(s) acted, executed the instrument. ATTORNEY-IN-FACT Witness my hand and official seal. TRUSTEE(S) - SUBSCRIBING WITNESS GUARDIAN/CONSERVATOR OTHER: SIGNATURE OF NOTARY SIGNER IS REPRESENTING: NAME OF PERSON(S) OR ENTITY(IES) L\n-t. ATTENTION NOTARY: Although the information requested below is OPTIONAL, it co• d prevent Title or Type of Document fraudulent attachment of this certificate to unauthorized documents. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Number of Pages Date of Document Signer(s) Other Than Named Above 024 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of S A 0 p\-t,60 On _}01'rt. i\ 1,0 Vt before me, - -,\k (Alt1 L-1/104- kNAD- VV)AL Date - Here Insert Name and Title of the Officer personally appeared \_,) 11 v k � ns Names)of Signer(s) r who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized NICOLE ANN capacity(ies), and that by his/her/their signature(s) on the Commission 1789343 : instrument the person(s), or the entity upon behalf of Notary PublicoustCalifornia which the person(s) acted, executed the instrument. i San Diego County Z My Comm.Fxpires,)al 27,2012 I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my and and official seal. Signature Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:-- Document Date: Number of Pages: Signer(s)Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑Individual ❑ Corporate Officer—Title(s): ❑Corporate Officer—Title(s): ❑ Partner—❑Limited LI General 0 Partner—0 Limited 0 General RIGHTTHUNBPRINT RIGHT THUMBPRINT O Attorney in Fact OF SIGNER 0 Attorney in Fact OF SIGIIER ❑ Trustee Top of thumb here ❑Trustee Top of thumb here ❑ Guardian or Conservator 0 Guardian or Conservator ❑ Other: 0 Other: Signer Is Representing: Signer Is Representing: .•,:-,: ::-ssc%<cAcc%sw.<�-sc.w.(,,,,,s,,,,, ,- c sw,w,L< v,tf,A. .<: :,I,m,,:vs,sc%a::< :,...:-cv_:c::cc-%s`:c�c�.a,-,:wv,...w:,,, , ©2007 National Notary Association•9350 De Solo Ave.,NO.Box 2402•Chatsworth,CA 91313-2402-www.NationalNotaryorg Item#5907 Reorder Call Toll-Free 1-800-876-6827 025- PAGE 1 OF 2 EXHIBIT "A" ONE STRIP OF LAND, FIFTEEN (15.00) FEET IN WIDTH, LYING WITHIN THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 11, TOWNSHIP 1 SOUTH, RANGE 10 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF COVINA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE ON APRIL 21, 1877, THE CENTER LINE OF SAID STRIP IS DESCRIBED AS FOLLOWS: STRIP "A": BEGINNING AT A POINT REFERRED TO AS POINT "A" IN THE DESCRIPTION OF THE CENTER LINE OF STRIP NO. 1 OF THAT CERTAIN EASEMENT GRANTED TO AZUSA VALLEY WATER COMPANY BY INSTRUMENT NO. 89-379839 RECORDED MARCH 8, 1989, OFFICIAL RECORDS OF SAID COUNTY; THENCE N53'05'17"E 6.33' TO THE "TRUE POINT OF BEGINNING"; THENCE S00'13'51"E 114.31'; THENCE S89'46'09"E 339.76'; THENCE N45'13'S0"E 24.04'; THENCE NO0'13'49"E 573.81'; THENCE N89'11'24"W 170.28' TO THE "POINT OF TERMINUS". ATTACHED HERETO IS EXHIBIT "B" AND BY THIS REFERENCE MADE A PART HEREOF. ALL AS MORE PARTICULARLY SHOWN ON EXHIBIT "B" ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. THIS DOCUMENT, CONSISTING OF EXHIBITS "A" AND "B", �� WAS PREPARED BY ME OR UNDER MY DIRECTION ON MAY 10, 2010. �'-ONP� LANA \\\� No. 8554 Z L ,‘ Exp. 12/31/10 * DARYL J. CHRISTIAN, P.L.S. 8554 MY LICENSE EXPIRES: 12/31/10tk\\\ F \CQ-- OF 026 PAGE 2 OF 2 EXHIBIT "B" 0 O M M r 0 0 O oP.O.T. STRIP "A" N 'N89'11'24"W 170.28' N89'45'05"E 197.52' - 7 ."----._--(• - N89'59'53"W In 75.00' ' n 7ar� lar T— I 1 I O I O to 1 Cio- M W N N in d- 1 w O O O d Z M O O Z I POINT "A" STRIP NO. 1L PER INST. NO. 89-379839 700• Z00.7..- N 53'05'17"E rsao•-- S89'59'53"E 254.69' 6.33' I T.P.O.B. S89'59.53"E I I I 23.52' I I f S00'13'51"E � 114.31' N 4513'50"E 24.04 I L_ J L _-_-- ----_- - - -- - _ S89'46'09"E 339.76' SCALE: 1"=100' CHRISTIAN LAND SERVICES LAND SURVEYING ENTITLEMENTS LAND PLANNING LEGEND: 2538 E. LARKSTONE DR. ORANGE, CA 92869 — — — PROPOSED 15 FOOT WIDE EASEMENT 714.225.5933 EXISTING EASEMENT mail®christion Iandservices.com 027 t., tx14. X ` 1 AZUSA UGH, & 'WATER CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITI DATE: JULY 26, 2010 SUBJECT: APPROVAL OF A QUITCLAIM OF TWO WATER UTILITY EASEMENTS ON LOCATED IN TRACT NO. 45436 IN THE CITY OF COVINA, CA RECOMMENDATION It is recommended that the Utility Board authorize the City Manager to sign a quitclaim of two strip easements located in the City of Covina, described in attached Exhibit A, and shown in attached Exhibit B. BACKGROUND The owner of property in Tract 45436 at 1348 N. Azusa Avenue in the City of Covina has requested that the City of Azusa relinquish two short water utility easements located on what is now the new Lowes store site. The easements, which were granted to Azusa Valley Water Company by Instrument 89-379839, contained waterlines that served the old Home Depot store, but which are no longer needed to serve the new Lowes store. These two quitclaimed easements will be supplanted by a Grant of Permanent Easement to the City of Azusa under separate instrument which will contain new waterlines to serve the new Lowes store. Staff has determined that the quitclaim of these two easements will have no adverse effect on the operation of the Azusa Water System. FISCAL IMPACT This action has no fiscal impact. Prepared by: Chet F. Anderson, P.E., Assistant Director- Water Operations 028 RECORDING REQUESTED BY: KIR Covina, L.P. 1621-B Melrose Drive Vista, CA 92081 WHEN RECORDED MAIL TO: City of Azusa P.O. Box 1395 Azusa, CA 91702-1395 Easements on former Home Depot Property in Covina,CA QUITCLAIM DEED • Azusa Light & Water hereby remises, releases and forever quitclaims to: KIR Covina, L.P., 1621-B Melrose Drive, Vista, CA 92081 all Grantor's interest in those certain easements and easement rights granted to Grantor as successor in interest to Azusa Irrigating Company and Azusa Valley Water Company as recorded in the Official Records of Los Angeles County, California, respecting those certain real properties now situated in the City of Covina, County of Los Angeles, State of California,more particularly described in EXHIBIT A&shown in Exhibit B both of which are attached hereto and incorporated herein by reference. Dated: City of Azusa, a municipal corporation By: F. M. Delach City Manager ATTEST: Vera Mendoza City Clerk 029 NOTARY ACKNOWLEDGMENT (California All-Purpose Acknowledgment) STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) On , 2010, before me, the undersigned notary public, personally appeared , 0 personally known to me OR ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public 030 PAGE 1 OF 2 EXHIBIT "A" TWO STRIPS OF LAND, EACH TEN (10.00) FEET IN WIDTH, LYING WITHIN THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 11, TOWNSHIP 1 SOUTH, RANGE 10 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF COVINA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE ON APRIL 21, 1877, THE CENTER LINES OF SAID STRIPS ARE DESCRIBED AS FOLLOWS: STRIP "A": BEGINNING AT A POINT REFERRED TO AS POINT "A" IN THE DESCRIPTION OF THE CENTER LINE OF STRIP NO. 1 OF THAT CERTAIN EASEMENT GRANTED TO AZUSA VALLEY WATER COMPANY BY INSTRUMENT NO. 89-379839 RECORDED MARCH 8, 1989, OFFICIAL RECORDS OF SAID COUNTY; THENCE SO0'14'55"E 64.00'; THENCE N89'45'05"E 202.00'; THENCE NOO'14'55"W 10.00' TO THE "POINT OF TERMINUS". STRIP "B": BEGINNING AT POINT "A" AS DESCRIBED IN STRIP "A" ABOVE; THENCE N00'14'55"E 466.00'; THENCE N89`45'05"E 197.52' TO THE "TRUE POINT OF BEGINNING"; THENCE CONTINUING N89'45'05"E 160.16' TO THE "POINT OF TERMINUS". ATTACHED HERETO IS EXHIBIT "B" AND BY THIS REFERENCE MADE A PART HEREOF. ALL AS MORE PARTICULARLY SHOWN ON EXHIBIT "B" ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF. THIS DOCUMENT, CONSISTING OF EXHIBITS "A" AND "B", LAND WAS PREPARED BY ME OR UNDER MY DIRECTION ON MAY 10, 2010. y' �o�` S��1 ct 37 0 * No. 8554 DARYL J. CHRISTIAN, P.L.S. 8554 Exp. 12/31/10 MY LICENSE EXPIRES: 12/31/10 ‘\T� o \FO��%� F C 031 PAGE 2 OF 2 EXHIBIT "B" of 0 M MSI 3I nI 0 0 o � 0 N89'45'05"E 197.52' J N89'45'05"E 160.16' P.O.T. STRIP "B" Kt—T.P.O.B. STRIP "B" N89'59'53"W 75.00' n W 0 uti W 0 z POINT "A" STRIP NO. 1 I PER INST. NO. 89-379839 _ S89'59'53"E 254.69' Jjp U S0014'55"E S89'59'53"E 64.00' P.O.T. STRIP "A" 23.52' po, NOO't 4'55"W 10.00' N89'45'05"E 202.00' SCALE:J1"=100' CHRISTIAN LAND SERVICES LAND SURVEYING ENTITLEMENTS LAND PLANNING LEGEND: 2538 E. LARKSTONE DR. ORANGE, CA 92869 — — — LINE TO REMAIN 714.225.5933 LINETO BE BEMOVED mail®christianlandservices.corn 032 AZUSA g, LIGHT 8 WATTH CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JULY 26, 2010 SUBJECT: APPROVAL OF LICENSE AND SERVICE AGREEMENT WITH POWER SETTLEMENTS CONSULTING AND SOFTWARE, LLC RECOMMENDATION It is recommended that the Utility Board approve the License and Service Agreement with Power Settlements Consulting and Software, LLC and authorize the Mayor to execute the agreement. BACKGROUND On April 1, 2010, the California Independent System Operator (CAISO) instituted a new electric wholesale market structure. The resulting market is a centralized electricity market whereby the City is required to sell all of our power resources into this market (and/or other wholesale markets) and buy out of this market all the electricity and Ancillary Services we need on a day ahead and hourly basis. The CAISO uses sophisticated and complex optimization algorithms to determine the least cost dispatch of generation resources and Ancillary Services to serve all electric needs within its load Balancing Authority Area. Accordingly, highly specialized automated functionalities (software) are needed by load serving entities such as Azusa Light & Water to operate in this complex environment. Due to the complexity of the CAISO market, staff has been using a specialized computer program licensed from Power Settlements Consulting and Software, LLC ("Power") to perform daily settlement functions. The current agreement with Power was approved by the Utility Board on July 27, 2009 and is due to expire on July 31, 2010. Since Light & Water continues to have a need for CAISO settlement functionality and since the software by Power has been working well and is relatively inexpensive, staff wishes to enter into a new 12 month agreement for the period of August 1, 2010 to July 31, 2011. 033 Power Settlements Software Agreement July 26, 2010 Page 2 While other programs may exist in the marketplace to perform similar functionality, it is unlikely that any other program would be more desirable when considering price, debugging, performance and staff training requirements. Since the aggregate annual cost of the new contract is $10,500, Azusa Municipal Code section 2-517(h) requires that the new service agreement be approved by the Utility Board. FISCAL IMPACT The cost of the License Agreement is $875 per month (currently $833), payable on a month-to-month basis, and the Agreement can be terminated at any time without penalties by a 30 day written notice. Funds are budgeted to pay for this service. Prepared by: Yarek Lehr, Assistant Director of Resources Management 034 LICENSE AND SERVICES AGREEMENT THIS LICENSE (this "Agreement") is made and entered into this 26th day of July, 2010, by and between Power Settlements Consulting and Software, LLC (hereinafter "Power"), California limited liability company; and the City of Azusa (hereinafter "Licensee"), a municipal corporation duly authorized and existing under the laws of the State of California. RECITALS WHEREAS, Power is the owner of all right, title and interest in and to software, documentation and related information, including the intellectual property rights embodied therein, known as the desktop version of the SettleCore Settlements Analyzer Module (collectively the "Software") and as further defined in Section 1.1,below; WHEREAS, Licensee desires to install and operate the Software pursuant to the rights and licenses granted herein for Licensee's non-exclusive use of the Software, and use the documentation and related information for permissible purposes; and WHEREAS, Power is willing to grant such rights and licenses under the terms and conditions of this Agreement; NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: Article 1 DEFINITIONS When used in this Agreement the capitalized terms listed below shall have the following meanings: 1.1 "Software." Software includes only the Settlements Analyzer Module of the SettleCore shadow settlement system. Software is comprised of Object Code and Documentation that is installed on a server and accessed by the users on Licensee computers. 1.2 "Settlements Analyzer Module." The functionality within the SettleCore system that is used to load the Licensee's (including entities to which Licensee is assigned as the scheduling coordinator by the CAISO) California ISO ("CAISO") settlement files in the CAISO-issued XML format, to review and analyze the CAISO settlement file data, to perform ad-hoc charge code formula training, to export the CAISO settlement file data to spreadsheets, and to use the SIBR Upload Template (MS Excel spreadsheet included, that enables Licensee to perform limited scheduling functionality through the Advanced Submit process on the CAISO's SIBR portal) use of the spreadsheet functionality. License Agreement July 7, 2010 Page 1 of 11 035 1.3 "Code." Computer programming code. If not otherwise specified, Code shall include both Object Code and Source Code. Code shall include Maintenance Modifications and Enhancements thereto if, when, and to the extent that such Maintenance Modifications and/or Enhancements are delivered to Licensee by Power under this Agreement or under any other agreement or arrangement between the parties. 1.4 "Source Code." Code in programming languages such as "C#", including all database operations and procedures such as "SQL", plus all related development documents such as flow charts, schematics, statements of principles of operations, end-user manuals, architectural standards, and any other specifications that are used to create or that constitute the Software. Source Code shall also include the database tables and their design and layout, which are used by the Software. 1.5 "Object Code." Code in machine-readable form generated by compilation of Source Code and contained in a medium that permits it to be operated by Licensee. Includes the database and database design and layout provided in the Software. 1.6 "Documentation." User manuals and other written materials that relate to particular Object Code, including materials useful for operation (for example, user guides and training materials). Documentation shall include Maintenance Modifications and Enhancements thereto if, when, and to the extent that such Maintenance Modifications and/or Enhancements are delivered to Licensee by Power under this Agreement or under any other agreement or arrangement between the parties. 1.7 "Maintenance Modifications." Modifications, updates, or revisions made by Power to Code or Documentation that correct errors, support new releases of operating systems, or support new models of input-output ("I/O") devices with which the Code is designed to operate. 1.8 "Enhancements." Modifications, additions, or substitutions, other than Maintenance Modifications, made by Power to Code or Documentation that accomplish incidental, performance, structural, or functional improvements. Enhancements may consist of Basic Enhancements or Major Enhancements, as defined below: a. "Basic Enhancements." Enhancements that result from warranty or maintenance services or that otherwise accomplish incidental, structural, functional, or performance improvements for which Power does not generally impose a separate charge on Licensee. b. "Major Enhancements." Enhancements that result in substantial performance, structural, or functional improvements or additions, including substantial redesign or replacement of any parts of the Source Code, for which Power does generally impose a separate charge on Licensee. License Agreement July 7, 2010 Page 2 of 11 036 Article 2 LICENSE 2.1 Grant. In consideration of the fees payable to Power pursuant to Article 3 hereof, Power hereby grants to Licensee a revocable, non-exclusive right and license (the "License") to use and operate the Software to import and view, and to train on the the settlement statements which are sent or assigned by the CAISO to the Licensee. Licensee is permitted to download the Software from Power and install it onto the local computer of only one named user. 2.2 Restrictions. Licensee agrees to the following restrictions on the Software. Failure to adhere to these restrictions may result in the revocation of the License at the unilateral discretion of Power with or without notice to Licensee, except as specifically set forth herein: a. The Software may be installed by the Licensee at only one site to be approved in advance by Power. b. Licensee may not reproduce or transfer the Software, or any copy, adaptation, transcription, or merged portion thereof, except as expressly permitted by Power. Licensee's rights are non-exclusive and non-assignable. If Licensee transfers possession of any copy, adaptation, transcription, or merged portion of the Software to any other party, including, but not limited to, a successor in interest of Licensee's business that assumes all of the Licensee's obligations with respect to the Software, the Licensee's rights in the Software are automatically terminated. c. Licensee may (1) make a maximum of three copies of the Software in machine- readable form for non-backup purposes only; and (2) use the Software only for internal purposes (and not for service bureau work, multiple-user licenses or time- sharing arrangements). d. Power shall have sole and exclusive ownership of all right, title, and interest in and to the Software and all modifications and enhancements thereof prepared by Power (including ownership of all trade secrets and copyrights pertaining thereto), subject only to the rights and privileges expressly granted by Power hereunder. e. By accepting delivery of the Software Licensee acknowledges that Power claims and reserves all rights and benefits that are afforded under federal copyright law in the Software. f. The Source Code for the Software (and the information therein, to the extent not otherwise apparent in the Object Code and the Documentation) is a trade secret of Power. Licensee is not entitled to receive Source Code, and under no circumstances may Licensee reverse-compile or reverse-assemble the Object Code. License Agreement July 7, 2010 Page 3 of 11 037 g. Licensee's obligations hereunder remain in effect for as long as it continues to possess or use the Software. h. Licensee shall not make any updates to the database used by the Software, including but not limited to updates to the data,tables, layouts, or schema. i. Licensee agrees that only employees of the Licensee shall be permitted to operate the Software and to access the database used by the Software. Any requests to operate the Software or to access the database used by the Software, by non-employees of the Licensee, must be approved by Power in email form. k. Licensee shall be responsible for maintaining that the hardware and software which is installed on the client and that the Software is also installed on are in proper working order. k. In order for the Software to function as required, the Licensee shall be required to fulfill the following hardware and software obligations for the Software. i. The user's computer, on which the Software will be installed, shall have the following hardware: (1) an Intel processor, which shall be a Pentium P4 processor or a higher version, (2) have a minimum of two gigabytes of RAM, and (3) a hard drive with at least twenty gigabytes of free space. ii. The user's computer, on which the Software will be installed, shall have the following software: (1) an operating system that is one of the following: Microsoft Windows 2003, Windows Server 2008, Microsoft XP, or Microsoft Vista, (2) the Microsoft .Net Framework version 3.5 or higher, and Microsoft Excel 2003 or higher. 1. Licensee agrees that if the Agreement is Terminated, as further described in Article 7 Section 7.2, that the Software license is immediately revoked as of the termination date, and that the Licensee must immediately uninstall the Software, including all backup copies. Article 3 SOFTWARE MAINTENANCE 3.1 CAISO Initiated Changes. Power shall deliver to Licensee an updated version of the Software each time that the CAISO initiates a change that affects the existing functionality of the Software. 3.2 Bugs Identified by the Licensee. Each time that the Licensee reports an error in the functionality of the Software ("Bug"), and Power verifies the validity of the Bug, the Bug shall be fixed no later than the end of the following calendar month. License Agreement July 7, 2010 Page 4 of 11 038 3.3 Bugs Identified by Other Customers of Power. From time to time, Power shall issue updated versions of the Software which include Bug fixes identified by customers other than the Licensee identified in this Agreement. 3.4 Delivery of Maintenance Modifications and Basic Enhancements. Power shall deliver to Licensee, when and as prepared by Power in the course of its business, all Basic Enhancements and Maintenance Modifications arising from time to time, for inclusion in the Software. However, Major Enhancements will not be included within the Software. Article 4 PAYMENTS 4.1 Software License and Software Maintenance Fee. Licensee shall pay Power $875 per month, for the one named user that is granted the license of the Software. This fee shall constitute the ongoing license fee to use the Software. This fee also includes the Maintenance of the Software, as described in Article 3. At any time, Licensee may request additional licenses of the Software, whereby Licensee will increase the Software License and Software Maintenance Fee by an additional $400, per month, for each additional user which may then download the Software onto their local computer. 4.2 Software Installation Fee. The Software can be downloaded and installed by Licensee without an implementation by Power. Thus, there is no Software Installation Fee. 4.3 Medium of Payment. All payments are payable in U.S. dollars. 4.4 Monthly Payment Due Dates. Licensee shall pay to Power the Software License and Software Maintenance Fee by the 1St day of each calendar month. The first payment shall be paid prior to Licensee downloading the Software from Power. 4.5 Annual Payment; Late Fees; Interest. In the event any payment due to Power is not paid within five days of its due date, a late fee of 10% of the amount owed shall be due and payable to Power. Additionally, interest at the rate of ten percent (10%) per annum shall accrue on the unpaid payment from the date due until paid. Article 5 CONFIDENTIAL MATERIALS 5.1 Confidential Information. Confidential Information means all information in the possession of a Party which has value to that Party (or to a third Party to whom the Party License Agreement July 7, 2010 Page 5 of 11 039 in possession owes a duty of confidentiality), which is not generally known in the industry, which is kept reasonably confidential by the Party in possession and which is known or should be known to the other Party to be of a confidential nature. By example and without limitation, Confidential Information includes any and all information concerning teaching techniques, processes, software, database designs, formulas, trade secrets, inventions, discoveries, improvements, research or development and test results, specifications, data, know-how, formats, marketing plans, business plans, strategies, forecasts, unpublished financial information, budgets, projections, and customer and supplier identities, characteristics, and agreements. 5.2 Protection of Confidential Information. During the term of this Agreement and for 5 (five) years thereafter, each Party agrees to take all steps reasonably necessary to hold in trust and confidence the other Party's Confidential Information. Each Party agrees to hold such Confidential Information in strict confidence, not to disclose it to third parties or to use it in any way, commercially or otherwise, other than as permitted under this Agreement. Each Party agrees not to allow any unauthorized person access to such Confidential Information, either before or after termination of this Agreement, without the prior written consent of the other Party and without court order. Each Party agrees to limit the disclosure of Confidential Information to employees or independent contractors with a need to know, who have been advised of the confidential nature thereof, and who have acknowledged in writing the express obligation to maintain such confidentiality. 5.3 Non-Confidential Information. Notwithstanding the other provisions of this Agreement, nothing received by either Party from the other Party will be considered to be Confidential Information if(i) it has been published or is otherwise readily available to the public other than by a breach of this Agreement; or (ii) it has been rightfully received by the non-disclosing Party from a third party without confidential limitations. Article 6 REPRESENTATIONS AND WARRANTIES 6.1 Right and Authority. Software Company represents and warrants that: a. it is the owner of the Software and documentation (including all intellectual property rights therein under copyright, patent, trademark, trade secret, and other applicable law); b. it has the full and sufficient right and authority to grant the rights and licenses granted herein; c. the Software and documentation have not been published under circumstances that have caused loss of any U.S. copyright therein; and License Agreement July 7, 2010 Page 6 of 11 040 d. the Software and documentation, to the best of Software Company's knowledge, do not infringe any copyright or any other intellectual property right of any third party. 6.2 Adequacy of Software and Documentation. Power represents and warrants that: a. the Software and Documentation are and shall be reasonably understandable and reasonably usable by the Licensee's users. 6.3 Conformity, Performance, and Compliance. Power represents and warrants that: a. the Software and Documentation to be delivered by Power hereunder have been prepared in a workmanlike manner and with professional diligence and skill, b. such Software and Documentation will reasonably function on the machine and with the operating system for which they are designed, and c. such Software and Documentation conform to the specifications and functions relating thereto. 6.4. Limitation of Warranties. Power does not assume any responsibility for any processes performed by Licensee utilizing the Software. Power shall not be deemed to make, or to have made, any express or implied warranties of any kind, character or description, including, but not limited to, fitness for a particular purpose or the warranty of merchantability concerning the Software, except as expressly stated in this Agreement. Article 7 TERM 7.1 Term of Agreement. This Agreement shall become effective beginning on August 1, 2010, and shall terminate at 12:01 a.m. Pacific Standard Time on August 1, 2011, or sooner as provided in section 7.2 (the "Term"). 7.2 Termination. This Agreement may be terminated upon the occurrence of any of the following events: a. Termination At Will. Licensee and Power may terminate the Agreement without cause upon thirty(30) days written notice to the other party. b. Termination by Mutual Agreement. Licensee and Power may terminate or modify the terms of this Agreement by written agreement executed by both parties. License Agreement July 7, 2010 Page 7 of 11 041 c. Termination For Cause. In addition to the foregoing, Power may terminate this Agreement, or modify the Agreement, at any time for "just cause", herein defined as the happening of any of the following occurrences or acts: (i) A receiver for Licensee is appointed or applied for, or a petition under any bankruptcy chapter is filed by or against Licensee, or Licensee becomes insolvent or makes an assignment for the benefit of creditors, or is unable to pay its debts as they become due, or, if there is any levy, attachment or similar action that is not vacated or removed by payment or bonding within ten (10) days of such levy or attachment; or (ii) Licensee is charged with unethical or illegal practices or acts thereby jeopardizing, in the opinion of Power, Power's good name and good will; or (iii) Licensee grossly fails to perform a material condition or delegation of this Agreement that adversely and substantially affects the interests of Power, with immediate effect by giving written notice of termination to Licensee. Licensee, at its option, may terminate this Agreement in the event Power grossly fails to perform a material condition or delegation of this Agreement that adversely and substantially affects the interests of Licensee. Such termination may be effected only through written notice, specifically identifying the breach on which termination is based. Following receipt of such notice, Power shall have 30 days to cure such breach, and this Agreement shall terminate in the event that such cure is not effected by the end of such period. 7.3 Survival. In the event of the termination of this Agreement, in whole or in part, the provisions of Articles 5, 6, 7, 8, and 9 shall survive and continue in effect. Article 8 LIABILITY LIMITS 8.1 Exclusion of Consequential Damages, Etc. EXCEPT TO THE EXTENT SET FORTH IN ARTICLE 9, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, OR INCIDENTAL DAMAGES, INCLUDING BUT NOT LIMITED TO FAILURES OR LIMITATIONS OF THE SOFTWARE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE. License Agreement July 7, 2010 Page 8of11 042 Article 9 INDEMNIFICATION 9.1 Indemnification by Licensee. Licensee shall indemnify, defend, and hold harmless Power and its officers, directors, shareholders, members, employees, agents, representatives, and customers (collectively, "Power Indemnitee") against all liability, claims, costs, damages, and expenses incurred by Power Indemnitee relating to or arising from or concerning the Software. Licensee agrees to reimburse Power for any amounts owed hereunder immediately upon demand, or alternatively, at the election of Power, to promptly and directly pay any such amounts with respect to any matter for which Power is indemnified pursuant to this Agreement (including attorney's fees by Power in defense or prosecution of any claim to which this Agreement applies) to such person or entity as Power designates. Any amount to be paid by Licensee shall be paid to Power or designee, within ten (10) days following written demand therefore by Power. 9.2 Indemnification by Power. Power shall indemnify, defend, and hold harmless Licensee and its officers, directors, shareholders, members, employees, agents, representatives, and customers (collectively, "Licensee Indemnitee") against all liability, claims, costs, damages, and expenses incurred by Licensee Indemnitee relating to or arising from or concerning the Software. Power agrees to reimburse Licensee for any amounts owed hereunder immediately upon demand, or alternatively, at the election of Licensee, to promptly and directly pay any such amounts with respect to any matter for which Licensee is indemnified pursuant to this Agreement (including attorney's fees by Licensee in defense or prosecution of any claim to which this Agreement applies) to such person or entity as Licensee designates. Any amount to be paid by Power shall be paid to Licensee or designee, within ten (10) days following written demand therefore by Licensee. Article 10 MISCELLANEOUS 10.1 Freedom of Action. This Agreement shall not be construed to limit Licensee's right to obtain services or software programs from other sources, nor shall this Agreement be construed to limit Power's right to grant others any further non-exclusive right or license of the Software and Documentation. This Agreement alone establishes the rights, duties, and obligations of Licensee and Power with respect to the subject matter hereof. Licensee shall have no right or interest whatsoever in any software of Power other than the rights and licenses in the Software and Documentation granted herein, whether such software is conceived or developed by Power before, during, or after the course of Power's performance of this Agreement. License Agreement July 7, 2010 Page 9of11 043 10.2 Rights and Obligations After Notice of Termination. If Power gives notice of termination of this Agreement, or if it becomes known that this Agreement will otherwise terminate in accordance with its provisions, Licensee shall return to Power all Software, Documentation and other items of property owned by Power forthwith. 10.3 Notices. Unless otherwise stated herein, all notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, delivered or sent by overnight courier and shall be deemed received upon the earlier of: (i) If personally delivered, the date of delivery to the address of the person to receive such notice; (ii) If mailed, three (3) business days after the date of posting by the United States post office; and (iii) If sent by overnight courier, when delivered to the specified address. To Power: Power Settlements Consulting and Software, LLC 250 West First Street Suite#256 Claremont, CA 91711 Telephone Number: (626) 676-9387 Facsimile: N/A Electronic Mail: david.danc powersettlements.com To Licensee: Azusa Light and Water Assistant Director of Resource Management 729 N. Azusa Avenue P.O. Box 9500 Azusa, CA 91702-9500 Notice of change of address shall be given by written notice in the manner detailed in this section. Rejection or other refusal to accept, or the inability to deliver because of changed address of which no notice was given, shall be deemed to constitute receipt of the notice, demand,request or communication. 10.4 Required Actions of Power and Licensee. Power and Licensee agree to effectuate the intent of this Agreement. 10.5 Captions. Any captions to, or headings of, the section or subsections of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. 10.6 No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties hereto, to any person or entity other than the parties hereto. 10.7 Amendment. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto. License Agreement July 7, 2010 Page 10 of 11 044 10.8 Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. 10.9 Applicable Law. The terms and provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflicts of laws'provisions. 10.10 Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between Power and Licensee as to the subject matter hereof. No subsequent agreement, representation or promise made by either party hereto, or by or to any employee, officer, agent or representative of either party shall be of any effect unless it is in writing and executed by the party to be bound thereby. 10.11 No Presumption. Each provision of this Agreement has been independently and freely negotiated by both parties as if this Agreement were drafted by both parties. In the event of any ambiguity in this Agreement, the parties waive any presumption or rule requiring or permitting interpretation of said ambiguity against or in favor of either party. 10.12 Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. POWER: Power Settlements Consulting and Software, LLC, a California limited liability company By: David Dan, President LICENSEE: CITY OF AZUSA By: Printed Name: Joseph R. Rocha Title: Mayor Date: July 26, 2010 License Agreement July 7, 2010 Page 11 of 11 045 Customer Information System Upgrade ,„\\ Azusa Utility Board July 26, 2010 AZUSA GHT & WAi ER Background • The CIS is the most critical system at the utility • Used for maintaining customer records, billing , payment crediting and work order management, and revenue reporting [101 Al USA Status of CIS • AL&W's CIS was installed in 2005 (5 years old) • AL&W is the last agency using Version 2 . 7 • The vendor (Systems & Software) will not support after this year 2 AZUSA 1 Recommendation • Upgrade/replace CIS version 2.7 with latest version 4.0 • Includes new hardware (server), project management, testing, data conversion, licenses, and "go-live" support 3 Benefits • Staff has documented 24 key benefits expected from upgraded CIS • Overall, the new system should run 30+ percent faster �" 4 • Current Situation Upgrade Improvtnagnl Value to the Utiln- 1.Each implication(water electric.sewer. I.An applications can be run at one time I.Saves billing time everyday. trash)has to be nm separately for carious for each of the paessei in Version 4. prottsses.Fs*tptes:bill editing. assessing late charges and month end. '.Smart inserting needs to be tested by _.User-friendly smart inserting has been 2.Saves money by sending certain insets Azusa and is difficult to use. incorporated in Version 4. only to the customer group the inserts are intended 3.Billing CSR:have to flip back and forth 3 Online edit has been enhanced to show 3.Increases efficiency by saving staff time ewstavdy between EL and WA to see what the other applications read when either i. everyday and minimizing errors gad their the other readings were.to diagnose a kicked out(both now on the same screen). conections. problem 4 When billing occurs and these was a 4.The billing update has now been 4.Saver.billing time. new or completed order for that account changed to also update wort olden dewith the ado always come-.up with a fatal the updated"from'read error due to the previous reading changing. 5.When manually transferring money- 5.Changes have been made to the online 5.Saves time.reduces en on and improves between accounts money cannot be posting transfer program to allose for inter- customer service. tramfetred between 2 different services application transfer..This also includes a without entering 2 different transactions new hot"delete function and secminy arcemd Also.this causes atom when the amounts the ACD codes for only transfer codes. dont match man a deleted later but the other remains.later in error. 6.User has to eater up to 4 different 6.An online posting rotuine has been 6.Saves time and reduces mon. transactions to remove money off an created to allow for entry clone transaction account and 4 more to move money onto which would disperse die entire Mance another account 5 Current Situation )rgtade hype o•,emem Value to the Utility. Wheat oats is nanemly paid oat an 1.Cash has been ashamed to pay dowse in S (needy to nos es cnstcazr ac counticg amaze with 1 bills ie the"amen"ageingpsivin•ado and to pay by•day..This and senate rhe MX.pays all of ace application solves the current aerie¢problem when before prong off die entire Ye(older)bill there to mage than ewe helloes within a 30 day period S.At need to see all work cedes from all 8..Asmlable m Version 4.0. 9 improves meanie-serum by nakng application on the wok ado mgniry an ouutadmt cook oohs easily»stile WIMP Cow fors 1-std quoted as 510.1.400 if we were able to base these programmed lot nonow.C 't.hoarse,.sure S&S roil) anlonger do eahanceaaeett to om Version 2!ash Is obsolete. S.Risco a cunane miles haw con 9 I:wormers be been made:transfers 9 Improves mummer salofacoot bynot addles:to another in our satyce area not of deposits having depose a old acaaaa eegedrd and our go from El-a.to SVA only.She beim/charged a deport maw aceonm. Gattple.ii is daffiest to inn the depose Also gases sutByme. Lotmte the correct application. 10 Teed re be able so cut customer same l0 F•a.,.-ed'cs.-pair"atelm. 10. Saves time and miniames chance of and address from Iota screen aid paste forgetting laser to send doctenrm to onto an envelope for quickly mailing a cawing. document ent to customer II A Move Oat Mose Iv when customers I] To save steps.a Sphtllesee las been I I hsprv:e:.acotonty ad sac es time. do no arse an moo the same day is created to nname anis.Further mast amt avmbcsme. order Create and Void functionality is in Version 40. 32.Long-arm payment anagenaeats- 12 Vernice 4 Garb and calculates 12.Improves muting and manual sostatmens ate manually tracked by the installment pa.•mmrs aid hese is a accoaehng nuttymashof long term vpenrsa on he desk calendar .Sloe has to separate line item for it on the bill By payment arrangemaas Having»vWity remember to put them as the mecum each making this process easier.moor comers atlas pommels anaot®em on the month before the bill is calculated and might be able to qualify foe this pasezm customer's tallmakes the bill easier to mailed and make an actual nljusanem to option and CSR,would haze Dorn*way toderstaad With this avalable and ob.", 6 AZU .SA 3 Cetera Sit ation Upgrade hap creme Value to the Utility the nutmeat s recotathas lents roam to mat wet customs m a WS.* ea cooed we mania this insect more fee tea if she supervisor forgets tops ecotmly. Men more back emcee tater 1_.Tole transfers mw Lase to he done 13 A rinele Sleaamfe ants needs to be IS.Sam Mare eveyday and improves separately fee each aenue dose. attsnty. 14.Ames a•she cashiers hes to watch 14 Verson 4.0 has a team.the 1.1.Mm;mios important eons clad fa a'pepsin on the scram whet a automacca8c pmts a icemen tort ads" geeing a paid cutlass,rectmectd.Also payment is taken The-pop-up-indicates after a shot-o3'.assumes pays.This would aces a camadetable moue dam the comma was armed-off.Afle the eliminate any cashier errors foe this aid eery.day ponding a smrolhet.fasts payamt is tem cashier fust set slut Lams.CAR time*lino up dr.stabs and process. Fitment stab aside is a spene reeaouet prwmg the*cease work ceders. tray.Periodecaliy a CSR comes by.picks these up and pons recce:mouos epi order for the FSRo fftte cashier gets busy and fates to pa dose sorb m the .comms tray the cwrome who paid ws 1 nor ger fated back co 15.We mw have no mechanism to 15.A mw wml4ow.yams can amigo 15.Mach imposed erne.utak preside thsfalin of unfilled follow-up saris and mage them within eeQsesnassipoaen and o muse dstplesee wet Oct esu+men This would 1tee everyone miaow wxetmar nal tracking ofomsadi week 'outside of.4:fume-bete so they dna't fcpet to follow-tqs wish Ivstcesns.paid. +irdoko kw etersceu abuts the some of au item if soakiple CSRs r e sating co rams aspects of a cuswma tepee and help toe*tasks eptly stamp sm:S. 16.Need an meow.rc msaicatim If.Systemwide strssapu can send real- It Fawn commaicnionnevem among CSR saRtc bean u.s'a cnstenei tie messages ted•pop-ups w CSRs within affecting crece s so all CSR's ase aware esoQuesa meted of relying on e-mail. as the sem mee repairs citadel they which CSRs nut s s apesp•emplc os ate mcg is she sys.ew promotes smooth wad-err-mor&which may no reek all commaicarion Mo CSR..This can belt wises Meta 7 A7 iJ ; :A cares Sinatias Upgade bol pu eamt Value to the Utility iterations one needed on ceneme ac mats or to inform tuff of m Drage 17 CSRs me not consistem in bow they 17.Asea procedures and documents can 11.R'Ltle sari eroseiniaing is deuce in perf.,noes usls. be liaise ro enQoese foe CSR redeems Cwacoer Sense.Urs Sent.wand This cm help with paws c msistesey. poside more erasisteocy in pacvices besssaess.rue and system saderntantboa Ie oehrh earn mummer ens. would tine ensue that rely one set of pocedaen is followed nsttanmvep the ',thee/dove'effect the,cm happen whim CSRs pass along le mpivae en ittonM Seem/eon Being nosc.eaining. 14.When sim4 new camases up for 18.k'esion 4.0 ausrancally setfcerens Ill.Csnsidestde staff time toed be saved seen.CSR4 do re always me speblle te address to nee the Postal Serie point through ea resumer daaba a to address resprhemetes of she L'.S.Poua1 reupismmsstwee address Mom itworld also Semite.Since the process of cassia!the rectimee emmedmnl dusky Wills and address Amo',Owe and bpm disc the Mites 1.1 S.P.S.ueb site is time-conss®mp. stratum CSR4 skip this step-causing errors.Tins results m dole s is rail or teamed mul At least twice a yea'm IT analyte as sell as a CSR have to go Saonph the rale macaws database to elan es addresses. 19 Csmmly.oolr balled.not tensed. 19 We world am here the abides to 19.Prorates mote detailed scram*for d&Oars for FCA nod RWCAL cm be ac urn for Fuel Coat:Wjvamsa and these receivable: accented fa it different pixel ledge RWC'AF receivables its different general xrcams. ledge meows in the billed dollus already do 20.Problem sesemeh'analysis co complex 20.The longe•epser be been 20.Saves camidetable time fee the analyst accent and syuaa Amies the CSR,came redesi feed winch will peodtre better sod who does problem remota and erolmiuw figure out is coy tise-cw+ummg mare trans iaf®atia when doing research and analysis. 8 A T 1 c A 4 Curran 50113t1 OD L-p.ode Itayne:emect Value t:the Rax dtasees:arc be time-corstmte 21 The me chance pexess has hem ,I. ,UL us tame nine fc,rate;tc to lc do m ora nates team:' ;team ed m t:e-sion 4.0 and cat be pre- changed is the;}stem Rate=della is a rt to Fir rn•ereN-:fel.Ate ev.+l ten f r mn enaaa aetnert unc®aecsllr.Adde/coa:h.Verc,cc 1.0 >&r,p:riicev=etc modal ne Itapo:xe operatmr speed w;add save 11 raster ports/loaf tar m Verston 4.0 21 Opm-rtic and:waxer service en, tame to the time it tate+cc help a=tone: :ono 30.1C°a faster bra our Versa:2_. be arc a Yank fastei. rml1 he e-.neAed '1.1d nlecal xcvnry ara;we_provide 21 lata arse added kr ceuet e,ar>led 23. laaddiu-.a tc.mpcosier the pretectw,a Wallow]da-a ptri 1st:-as related ter prxe;ses A1;c emits sato made of mum/daidra atim I ovum It: 1:e4 Har tdenen•pnrectoc Irw, changes m the eyaen. anile claa¢es n the s7stem cal kelp n problem iavest:puca and reschrim ani naming. 24 The anew Comex Icapeceasieu 24 l'e neon 4 0 i.stint the non 24. Ow wed fDe reponicr r.even repcvu ar rw:as cacabexme to use aa.t reaeaacuc.a pxaation eepan.na soflcrue- arcreasme aid the enact)vied f rcib:e me ant nee-fl'mai.It:i ac loaeer llpponed Zepcc,ICet 11 Las=lamed d]lpyaar reparit:g loci is to use.repel.cat Se by Suer;Q Sorware. rapatel>n'.is easie ter use add the correct Created/age:aadL9 made riles ofdaia :less tc report oa as easter to tied. [1®I, ..W •9 AZUSA Problem 1 Each application (water, electric, sewer, trash) has to be run separately for various processes. Examples: bill editing, assessing late charges and month end. All applications can be run at Fix one time for each of the processes in Version 4. Benefit Saves billing time everyday. 10 AZUSA 5 • Problem 9 When a customer moves from one address to another in our service area and may go from EL +WA to WA only,for example,it is difficult to move the deposit from/to the correct applications. Improvement has been made in transfers of FIX deposits. Improves customer satisfaction by not Benefit having deposit on old account refunded and being charged a deposit on new account. Also saves staff time. 11 AZUSA Problem 12 Long-term payment arrangements/installments are manually tracked by the supervisor on her desk calendar. She has to remember to put them on the account each month before the bill is calculated and mailed and make an actual adjustment to the customer's account. This leaves room for error if the supervisor forgets to put monies back onto the account. Version 4.0 tracks and calculates installment payments and there is a FIX separate line item for it on the bill. By making this process easier,more customers might be able to qualify for this payment option and CSRs would have another way to work with customers in a difficult economy. Improves tracking and manual accounting every month of long term payment arrangements. Having visibility of the Benefit Payment arrangement on the customer's bill makes the bill easier to understand. With this available and automate can offer this service more often. 12 AZUSA 6 Problem 14 Presently the cashiers have to watch for a "pop-up" on the screen when a payment is taken. The "pop-up" indicates the customer was turned- off. After the payment is taken cashier must set that payment stub aside in a special reconnect tray. Periodically a CSR comes by, picks these up and prints reconnection work orders for the FSRs. If the cashier gets busy and forgets to put these stubs in the reconnect tray the customer who paid will not get turned back on. Version 4.0 has a feature that automatically prints a reconnect work FIX order after a shut-off customer pays.This would eliminate any cashier errors for this and saves CSR time picking up the stubs and printing the reconnect work orders. Minimizes important errors of not getting a paid customer reconnected. Also saves a considerable Benefit amount of time everyday by providing a smoother, faster process. 13 AZUSA Problem 15 We now have no mechanism to provide visibility of unfilled follow-up work for customers. A new workflow system can assign tasks and manage them within enQuesta. This would help everyone manage work"outside of enQuesta" better, so they don't forget to Fix follow-up with customers, provide visibility for everyone about the status of an item if multiple CSRs are working on various aspects of a customer request,and help divide tasks equally among staff. Much improved service, work assignments and Benefit eliminate duplicate manual tracking of outstanding work. 14 AZUSA 7 Problem 19 Currently, only billed, not received, dollars for PCA and RWCAF can be accounted for in different general ledger accounts. We would now have the ability to account for Power Cost Adjustment and FIX RWCAF receivables in different general ledger accounts as the billed dollars already do. Benefit Provides more detailed accounting for these receivables. -w 15 AZUSA Cost • $400,000 (Budgeted in FY 2011 ) • Staff Time — Customer Service — Information Systems — Finance 0110 . , 16 8 Implementation • CIS implementation can be extremely complex as AL&W learned in 2005 • CIS must interface with numerous other software applications • Significant effort has already been undertaken to minimize start-up issues • The vendor has much improved its implementation process over last 5 years and has successfully installed numerous new applications 17 Recommendation • Upgrade/replace CIS version 2.7 with latest version 4.0 • Includes new hardware (server), project management, testing, data conversion, licenses, and "go-live" support • $400K cost is budgeted this year 18 9 Water Rights Leases r 10, 1/1110 or ,$, Azusa Utility Board July 26, 2010 4 AZUSA Background • Due to special arrangements by the Watermaster for FY10, AL&W is able to purchase a maximum level of replenishment water from SGVMWD for $130/AF • This frees up AL&W water that can now be used to assist other Basin entities who have over-produced water in FY10 lig * * 20 AZUSA 10 SGVMWD Purchases • We purchased 7,375 AF for FY10 • After retaining a small portion of this water for FY11 , AL&W was able to lease 6,055 AF to willing parties 21 AZUSA Leases • After a RFP process, lease transactions were as follows: AF % of RWC $ Canyon Water 1500 96% $840K Arcadia 4300 92% $2.3M Miller-Coors* 255 93% $139K *by contract not RFP sip 1:114/0 Net to AL&W was just under$2 million 21 AZUSA 11 UB Resolution 09-C69 • Adopted in July 2009. • Authorizes City Manager, or designee, to execute water lease agreements due to time sensitivity — Calculations and commitments are done on June 30 each year • Requires reporting to CC following execution for "ratification" N b 23 AZUSA Recommendation • Staff recommends the Utility Board ratify the water lease arrangements for FY10 with Arcadia, Canyon Water Company and Miller-Coors 11 24 AZUSA 12 Miller-Coors Water Rate Adjustment MillerCoors Azusa Utility Board July 26, 2010 AZUSA Background • The City's contract with Miller-Coors provides for a rate change after May 2010 and every 2 years thereafter • Contract provides a formula for determining the appropriate rate level 4 26 AZUSA 13 Rate Comparison PROPOSED RATE CHANGE FOR MILLER BREWERY EFFECTIVE JULY 1,2010 Service Current Rate Proposed Rate Pet Chance Moly Meter Charge $1,164.35 51,535.97 31.9% Per CCF Charge SI 336 51.70 27 2% Projected annual cost increase of$353,000 based on FY10 consumption pattern for Miller-Coors 27 A71.'SA Forecast vs. Actual Forecast Recommended Change Meter Charge $1,164 $1,535 +$4,459 Commodity $1.733 per ccf $1.70 per ccf ($31,640) Note:Results in lower costs to Miller of about$27K when compared to contract estimate 28 AZUSA 14 Recommendation • Staff recommends that the contract water rates to Miller- Coors be adjusted as follows: Moly Meter Charge $1 ,535.97 Per CCF Charge $1 .70 Note: Staff has discussed with rate change with Miller-Coors and received no adverse feedback 29 AZUSA u GM b Il A,lF Participation in LA County " RMDZ" 1E4 On -1 s�. Azusa Utility Board July 26, 2010 AZUSA L t i•1 b 0..1 f F 15 Background • AB 939 requires cities/counties to divert 50% of solid waste from landfills by 2000 • To help foster a market for recyclables, the State adopted Recycling Market Development Zone ("RMDZ") program • RMDZ provides technical assistance and low interest loans to businesses to use recycled materials in products rit 31 AZUSA Zones • To qualify for assistance, a business must be located within designated zones • Currently the LA County RMDZ is one of 33 state-wide • LA County RMDZ includes: Burbank Carson Commerce Compton El Monte Inglewood Palmdale South Gate Torrance itt Unincorporated �� Glendale Torrance County Areas 32 AZUSA 16 Proposed RMDZ Expansion • County developing application to State to expand RMDZ • Possible additional cities include Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs and Whittier • A Resolution of Support and Letter of Intent is required Z� 33 AZUSA Negative Declaration • The RMDZ application requires an environmental review • County has analyzed the program expansion and prepared a Negative Declaration • Azusa required to agree that there is no adverse environmental impact A 14) 34 AZUSA 17 .+ .. G ... _f a ' • lox eYyon e-Ll�'.alearr:c Nt Meru,Umm. avM to.4.ra>:Irp flit 000.1,.61,A0l0a00171-10:0 10, Macaw 31L 2CAf Mf Pa Paso),Aaw.rt t ooi Dark, t0 n0.iln,l Papaws Dial.Aaaar ar P.O.Ito al,+ AILIrM.,9ln'•late SUMO: 1.1.:l lilt 01MUM'K11 1KIIIlt,TIIP.IOP A%Gr.U1 rOaAf'Bfrlt)P IG MAKI,1 U181t.alMa.V ACL 1Ww rem, la mlama>;in aca,rl s Salaam I r,:W.0,fl Aau LMi Ina aid:gar Wirral*laprdill 16r Comfy': Pam.9 nand tee Mate fr?law.Urtatpnen are INA.#'t•Nrr1 as apple...R the taltenle Wepvtal 9s.rJ 0:1,a19).O.N.at erd.tin d Asn.l at Id tia at.aw et,mtate Y hexa ll. al Arms iacMdnl Y lrar.agora'rear ir art..-elai Arra Oil attar rya any e.a Aar.."'mat}11,1117 11*C'i,is lamas.ib It xale't KOIU(P+9'rll al btoni hal bast:u.'be lona F Ysaw In Arra eau lo$l ..relit hem low nevre kau and n*n all mamma not k anilpak 1Fa+yh he Crow/.norm Wee ball,.9u:.uma,x x a.m..Jean h,aa-aopteatat,lalt k..tv<k...v N>r•M1.u.ulln Ir..la a mar.Mane an baa Wtlw.en>I,rnr fate..,,ash eta,sal p.,w..l.Nnl4....J'av4 na..:.le.4r fn: >r Aaua,,mit,II.•n I.e a Na.Mat am Old.rowan,.drone wear ab>le1 n.Mel yr arneoriin w.0 enneneoweeww1e1uina x*rower r w-eale aergbbk bawersh 1. a rxb.l0W ud S•Illil ads trial x M klla*J M"r ono lanai Aexeura.l d•:ea.J by Coy:raw In:f fra n.al ma.Alt Can Ke6vMw.Ur Wa a He lender v 10100,.t.aster Iha a11i1nM .t,ni rte,vt ren ren Area n lylili•,are appklllm n the Sir M.Kab;hene er be Im:MI ow WO)Ili- flfl e'r6wM.WK Ca%Iovnn Le. 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A Z U S A Car Aakiewr.Aural,n ab Pixntn Y--k.lr:• Recommendation • Adopt a resolution to: — Approve inclusion of Azusa in RMDZ expansion application — If approved, administer program in a manner to ensure fair treatment of people of all races, cultures and income levels. — Concur with the Negative Declaration for the expanded RMDZ Pit 36 a / USA 18 Local Resource Adequacy Capacity 41k 1 Azusa Utility Board July 26, 2010 Background • Azusa's Resource Adequacy (RA) Program requires it to maintain capacity equal to its projected load plus a margin of 15% • Under CAISO rules, a portion of RA capacity must be Local Capacity, i.e. located in LA Basin vicinity 14\ 38 AZUSA 19 Local Capacity • Each year, the CAISO determines the amount of Local Capacity required by entity • For 2011 , Azusa must provide 34 MW of local capacity. • Currently, Azusa's local resources total about 4 MW • As a result, Azusa needs to procure an additional 30 MW of local capacity 39 AZ , RFP • A request for proposals was issued by Azusa for up to 30 megawatts of RA Capacity on July 19 • Bids due at 9 am on July 23 • Request was for combined Local and System RA Capacity for 2011 and/or 2012 (2 years) \ 40 20 RFP Results Company 2011 Quote Total Price RRI $2.85/kw-mo $1 ,026,000 NRG $3.45/kw-mo $1 ,245,000 Shell $3.25/kw-mo $1 ,170,000 h v 41 RFP Results (cont) • NRG and Shell also submitted 2 year bids at comparable prices • Pasadena submitted bid for a commodity judged to be different than requested in the RFP — Bid of$1.50 per kw-month — Included Local Capacity but not System RA Capacity -y� 42 AZUSA 21 Discussion • Low bid was RRI Energy with a 2011 only bid of $2.85/kw-month • Similar purchase by Azusa in 2010 was at $3.09/kw-month • 2012 bids not particularly favorable • SCE also issued a request for Local Capacity last week 43 Recommendation • Award bid for 30MW of Local RA Capacity to RRI (Reliant Resources, Inc.) for 2011 at a price of $2.85/kw- month 44 AZUSA 22 t I a A.ZCTS A 11GMT k'NATIR SCHEDULED ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JULY 26, 2010 SUBJECT: REQUEST TO APPROVE AN UPDATE TO THE CITY'S CUSTOMER INFORMATION SYSTEM RECOMMENDATION It is recommended that the Azusa Utility Board: 1. Approve an Addendum To Information System Agreement with Systems & Software, Inc for the purchase of the enQuesta Version 4.0 Upgrade to the City's Customer Information System, at a cost not-to-exceed $400,000; and 2. Authorize the City Manager to execute the Addendum To Information System Agreement with System & Software, subject to review and approval of the City Attorney, and authorize the City Manager to take any and all other action which may be necessary in order to complete the purchase and implementation of this Upgrade. BACKGROUND A Customer Information System (CIS) is highly sophisticated business-intelligent software. It is relied on for all facets of billing, assigning and tracking work via work orders, applying payments correctly, and reporting for almost $55 million annually in City revenue. The version the City is currently running is at the end of its life cycle. In fact, the City is the last of Systems & Software's customers to be on version 2.7 and said version will no longer be supported after 2010. By upgrading to the enQuesta version 4.0 Upgrade ("Upgrade"), the City will be able to take advantage of many new features in order to improve customer service response time and accuracy. In addition, the Upgrade will enable the CIS to run 30-40% faster. Over the past five (5) years, Systems & Software has implemented an improved implementation process that has been used on many implementations for the City since the initial installation of the CIS by Systems & Software, including but not limited to, simulation or parallel testing. A list of the City's most needed improvements which will be addressed by the Upgrade is attached and 046 Customer Information System Upgrade July 26,2010 Page 2 further benefits and features are summarized as follows: 1. The Upgrade includes a new server, project management, testing, data conversion, training, upgrade reporting tool and licenses, simulated go-live, and post go-live support. 2. The Upgrade also includes the ability to verify that interfaces continue to work with Infosend for bill print and mail and online billing and payment, Paymentus for credit and debit cards payments, R. T. Lawrence for mail-in payment processing, FDGS for the telephone IVR (interactive voice response), Bi-tech for General Ledger, Itron for meter reading and time-of-use billing, and Light & Water's collection agencies. In regard to Light & Water's IVR, said system is old and there have been intermittent problems with its operation. The IVR vendor has already informed the City that they will not guarantee to support of this IVR after 2011. Over 6,000 of Light & Water's customers rely on IVR for making payments over the telephone. All efforts will be made to sustain the IVR through the Upgrade and City Staff will keep the Utility Board apprised of progress on this matter. The existing software vendor, Systems & Software, was selected through a competitive purchasing process for professional service providers in 2004. Since the software that is currently in use is proprietary and can only be upgraded by the vendor which created it, the proposed purchase of the Upgrade to a newer version is exempt from the competitive purchasing process pursuant to Azusa Municipal Code (AMC) including, but not limited to, AMC 2-523(b), (c) and (d). Attached please find the following documents which have been reviewed by the Director of Information Technology and the City Attorney: 1. The proposed Addendum To Information System Agreement for the purchase of the Upgrade. The Addendum would amend and revise the Information System Agreement Between Systems & Software, Inc. and the City of Azusa for the Purchase of Computer Hardware and the Licensing, Maintenance and Support of Application Software Products, dated September 15, 2004; 2. Statement of Work; and 3. Pricing/milestones. FISCAL IMPACT The price for the Upgrade is $400,000 and this amount is an approved appropriation in the capital improvement program budget for FY 2010-11 as project 71110A. Funding will be provided 65%from water fund and 35% from electric fund. Prepared by: Karen Vanca, Assistant Director Customer Care & Solutions Attachments: List of Key Upgrade Improvements Contract Addendum Statement of Work Pricing/Milestones 047 SYSTEMS & SOFTWARE UPGRADE FROM VERSION 2.7 TO 4.0 Current Situation Upgrade Improvement Value to the Utility 1. Each application (water, electric, sewer, 1. All applications can be run at one time 1. Saves billing time everyday. trash)has to be run separately for various for each of the processes in Version 4. processes. Examples: bill editing, assessing late charges and month end. 2. Smart inserting needs to be tested by 2. User-friendly smart inserting has been 2. Saves money by sending certain inserts Azusa and is difficult to use. incorporated in Version 4. only to the customer group the inserts are intended. 3. Billing CSRs have to flip back and forth 3. Online edit has been enhanced to show 3. Increases efficiency by saving staff time constantly between EL and WA to see what the other application's read when either is everyday and minimizing errors and their the other readings were, to diagnose a kicked out(both now on the same screen). corrections. problem. 4. When billing occurs and there was a 4. The billing update has now been 4. Saves billing time. new or completed order for that account, changed to also update work orders with the order always comes up with a fatal the updated"from"read. error due to the previous reading changing. 5. When manually transferring money 5. Changes have been made to the online 5. Saves time, reduces errors and improves between accounts, money cannot be posting transfer program to allow for inter- customer service. transferred between 2 different services application transfers. This also includes a without entering 2 different transactions. new list/delete function and security around Also, this causes errors when the amounts the ACD codes for only transfer codes. don't match, or one is deleted later but the other remains, later in error. 6. User has to enter up to 4 different 6. An online posting routine has been 6. Saves time and reduces errors. transactions to remove money off an created to allow for entry of one transaction aaccount and 4 more to move money onto which would disperse the entire balance. nother account. 00 1 7. When cash is currently paid on an 7. Cash has been enhanced to pay down in 8. Greatly improves customer accounting account with 2 bills in the"current" ageing, priority order and to pay by"day." This and service. the system pays all of one application solves the current ageing problem when before paying off the entire 2nd (older) bill. there is more than one billing within a 30 day period. 8. We need to see all work orders from all 8. Available in Version 4.0. 9. Improves customer service by making applications on the work order inquiry all outstanding work orders easily visible. screen. Cost for# 1 -#8 quoted as $104,400 if we were able to have these programmed for us now. Can't, however,since S&S will no longer do enhancements to our Version 2.7 as it is obsolete. 9. When a customer moves from one 9. Improvement has been made in transfers 9. Improves customer satisfaction by not address to another in our service area and of deposits. having deposit on old account refunded and may go from EL+WA to WA only, for being charged a deposit on new account. example, it is difficult to move the deposit Also saves staff time. from/to the correct applications. 10. Need to be able to cut customer name 10. Enhanced "cut/paste" ability. 10. Saves time and minimizes chance of and address from front screen and paste forgetting later to send document to onto an envelope for quickly mailing a customer. document to customer. 11. A Move Out/Move In when customers 11. To save steps, a Split/Merge has been 11. Improves accuracy and saves time. do not move out/in on the same day is created to handle this. Further, mass work cumbersome. order Create and Void functionality is in Version 4.0. 12. Long-term payment arrangements/ 12. Version 4 tracks and calculates 12. Improves tracking and manual installments are manually tracked by the installment payments and there is a accounting every month of long term supervisor on her desk calendar. She has to separate line item for it on the bill. By payment arrangements. Having visibility remember to put them on the account each making this process easier, more customers of the payment arrangement on the month before the bill is calculated and might be able to qualify for this payment customer's bill makes the bill easier to mailed and make an actual adjustment to option and CSRs would have another way understand. With this available and 2 141. CD the customer's account. This leaves room to work with customers in a difficult automated, we can offer this service more for error if the supervisor forgets to put economy. often. monies back onto the account. 13. File transfers now have to be done 13. A single file transfer only needs to be 13. Saves time everyday and improves separately for each service. done. accuracy. 14. Presently the cashiers have to watch 14. Version 4.0 has a feature that 14. Minimizes important errors of not for a"pop-up"on the screen when a automatically prints a reconnect work order getting a paid customer reconnected. Also payment is taken. The "pop-up" indicates after a shut-off customer pays. This would saves a considerable amount of time the customer was turned-off. After the eliminate any cashier errors for this and everyday by providing a smoother, faster payment is taken cashier must set that saves CSR time picking up the stubs and process. payment stub aside in a special reconnect printing the reconnect work orders. tray. Periodically a CSR comes by, picks these up and prints reconnection work orders for the FSRs. If the cashier gets busy and forgets to put these stubs in the reconnect tray the customer who paid will not get turned back on. 15. We now have no mechanism to 15. A new workflow system can assign 15. Much improved service, work provide visibility of unfilled follow-up tasks and manage them within enQuesta. assignments and eliminate duplicate work for customers. This would help everyone manage work manual tracking of outstanding work. "outside of enQuesta"better, so they don't forget to follow-up with customers, provide visibility for everyone about the status of an item if multiple CSRs are working on various aspects of a customer request, and help divide tasks equally among staff. 16. Need to improve communication 16. Systemwide messaging can send real- 16. Faster communication of events among CSR staff to better serve customers. tie messages and "pop-ups" to CSRs within affecting customers so all CSR's are aware enQuesta instead of relying on e-mail, at the same time, regardless of what they which CSRs may not open promptly or are doing in the system, promotes smooth word-of-mouth, which may not reach all communication. (}� CSRs. This can help when special 3 instructions are needed on customer accounts or to inform staff of an outage. 17. CSRs are not consistent in how they 17. Azusa procedures and documents can 17. While much cross-training is done in perform various tasks. be linked to enQuesta for CSR reference. Customer Service, this feature would This can help with process consistency, provide more consistency in practices business rule and system understanding. It which, in turn, minimizes errors. would also ensure that only one set of procedures is followed, minimizing the "watering down" effect that can happen when CSRs pass along incomplete or incorrect information during cross-training. 18. When signing new customers up for 18. Version 4.0 automatically self-corrects 18. Considerable staff time could be saved service CSRs do not always use specific an address to meet the Postal Service going through our customer database to address requirements of the U.S. Postal requirements. correct address errors. It would also Service. Since the process of entering the minimize returned mail of utility bills and address into enQuesta and again into the notices. U.S.P.S. web site is time-consuming, sometimes CSRs skip this step, causing errors. This results in delays in mail or returned mail. At least twice a year an IT analyst as well as a CSR have to go through the entire customer database to clean up addresses. 19. Currently, only billed, not received, 19. We would now have the ability to 19. Provides more detailed accounting for dollars for FCA and RWCAF can be account for Fuel Cost Adjustment and these receivables. accounted for in different general ledger RWCAF receivables in different general accounts. ledger accounts as the billed dollars already do. 20. Problem research/analysis on complex 20. The change register has been 20. Saves considerable time for the analyst account and system issues the CSRs cannot redesigned which will produce better and who does problem research and resolution. figure out is very time-consuming. more accurate information when doing research and analysis. O U' - 4 21. Rate changes can be time-consuming 21. The rate change process has been 21. Allows more time for rates to be to do in our current version 2.7. streamlined in Version 4.0 and can be pre- changed in the system. Rate modeling is a set to begin on a specified date useful tool for our management. automatically. Additionally, Version 4.0 offers predictive rate modeling. 22. Improving operating speed would save 22. Faster portal load time in Version 4.0 22. Operations and customer service can time so the time it takes to help a customer runs 30-40% faster than our Version 2.7. be accomplished a little faster. could be expedited. 23. Additional security measures provide 23. Task menu added for security enabled 23. In addition to improving the protection additional data protection as required by user processes. Also tracks who made of customer information, knowing who Red Flags identity protection laws. changes in the system. made changes in the system can help in problem investigation and resolution and training. 24. The current Cognos Impromptu 24. Version 4.0 is using the next 24. Our need for reporting is ever reporting tool is cumbersome to use and generation production reporting software, increasing and the easier and flexible the not user-friendly. It is no longer supported ReportNet. It has improved reporting reporting tool is to use, reports can be by Systems & Software. capability, is easier to use, and the correct created faster and on more types of data. fields to report on are easier to find. KV/S&S Version 4Nersion 4 Improvements CJI5 ADDENDUM TO INFORMATION SYSTEM AGREEMENT THIS ADDENDUM dated as of , 20_supplements and forms part of that certain Information System Agreement by and between the City of Azusa ("Customer") and Systems & Software, Inc. ("S&S") dated as of September 15, 2004 (as amended by this Addendum and as otherwise amended from time to time, the "Agreement"). WHEREAS, subject to the terms and conditions of the Agreement, the Customer desires to commence work on the enQuestaTM v4 Upgrade with Reporting Portal, IVR and all related Hardware and Services (collectively referred to herein as the "enQuesta v4 Upgrade"). WHEREAS, all capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement; NOW THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, S&S and the Customer hereby agree as follows: ARTICLE 1 FEES 1.1 Fees (a) The charges for the enQuestaTM v4 Upgrade shall be those set out in the Pricing & Milestone Payment Schedule attached hereto as Exhibit 1, which is incorporated herein by reference. (b) The Customer shall pay S&S for the products and services to be provided by S&S pursuant to the provisions of this Addendum in accordance with the Pricing & Milestone Payment Schedule attached hereto as Exhibit 1. All payment and invoicing provisions set forth in the Agreement shall apply to these products and services except as otherwise expressly set forth in this Addendum (including the exhibits attached hereto). Upgrade (c) S&S shall provide the services, products, labor, and materials for the performance of the enQuesta v4 Upgrade pursuant to the Statement of Work attached hereto as Exhibit 2, which is incorporated herein by reference. ARTICLE 2 MISCELLANEOUS 2.1 Addendum Forms Part of Agreement This Addendum (including its exhibits) is attached to and forms part of the Agreement. Except as otherwise specifically stated herein, all provisions of the Agreement remain in effect in accordance with the terms thereof. 2.2 Representation of Authority Each Party represents and warrants to the other that the execution and delivery of this Addendum and the performance of such Party's obligations under the Agreement (including the Addendum) have been duly authorized and that the Agreement (including the Addendum). 053 - 2 - is a valid and legal agreement binding on such Parties and enforceable in accordance with its terms. 2.3 Counterparts This Addendum may be executed in several counterparts, each of which shall constitute an original, but all of which shall constitute one and the same instrument. Exhibits The following Exhibits, attached hereto and incorporated herein by reference, form a part of this Agreement and need not be signed separately to become enforceable: 1. Exhibit 1 - Azusa Light & Water Pricing & Milestone Payment Schedule 2. Exhibit 2 - Azusa Light & Water enQuesta v4 Statement of Work IN WITNESS WHEREOF, the parties to this Addendum have hereunto set their hands and seals effective as of the date first set forth above. Systems & Software, Inc. City of Azusa By: By: Title: Title: Attest: City Clerk Approved as to Form: Best Best & Krieger LLP City Attorney 054 AZUSA LIGHT & WATER City of Azusa Light & Water Azusa, CA enQuesta enQuestaTM 4 Upgrade Statement of Work July 20, 2010 Systems &Software Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 1 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 055. Document Control Distribution Copy Name Date No. S&S Internal 4/6/10 2 S.Dunphy 4/26/10 3 S.Dunphy 6/2/10 4 S&S 6/16/10 5 S&S 6/28/10 6 7 Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 2 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 056 Table of Contents INTRODUCTION 4 Background 4 Objectives 4 PROPOSED HIGH LEVEL SCOPE AND RESPONSIBILITIES 5 Proposed High Level Scope 5 Project Responsibilities 5 Description-High Level Project Activities 10 Enhancements&New Business Procedures 14 Web Services Error!Bookmark not defined. PROPOSED HIGH LEVEL SCHEDULE 16 enQuesta 4 Upgrade Proposed High Level Activities and Timeframe 16 Reporting Portal Upgrade Proposed High Level Activities and TimeframeError!Bookmark not defined. ASSUMPTIONS 17 Scope 17 Server Hardware 19 Out of Scope 22 MAINTENANCE RELEASES 23 PROJECT COMMUNICATION 24 Project Communication Plan 24 Project Communication Matrix 24 Change Control Process 24 Issue Escalation Process 24 APPENDIX - ATTACHMENT A - PROJECT COMMUNICATIONS MATRIX 26 APPENDIX - ATTACHMENT B - INTERFACE LIST 27 APPENDIX - ATTACHMENT C - SAMPLE'SIMULATION PLAN 29 Objectives 29 Conversion 29 Daily Operations Simulation 30 Test Additional Processes 30 Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 3 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 057 INTRODUCTION Background Azusa Light&Water(Azusa) and Systems&Software, Inc. (S&S) have agreed to engage in the upgrade of the existing enQuesta'" Customer Information System (CIS). Under this arrangement, the Customer will upgrade from their currently installed release of enQuesta to enQuesta 4. From this point forward, Azusa shall be referred to as'the Customer'and Systems&Software shall be referred to as'S&S'. All future references to enQuesta shall specifically refer to enQuesta 4 unless otherwise specified. Objectives • Establish the Customer on the standard, most current version of enQuesta, 4. • Enable the Customer to take advantage of enQuesta 4's Enabling Technology via Service Oriented Architecture (SOA) and the utilization of Web Services to achieve interoperability among multiple systems and platforms. • Upgrade the Customer to the latest releases of Oracle's lig database platform. Strive to reduce project risk by leveraging S&S resources'existing knowledge of the Customer's environment to minimize the overall Customer resource time commitment typically required to successfully implement a CIS. • Strive to establish project team continuity by maintaining a consistent core group of Customer and S&S members. • Utilize S&S'implementation methodology to meet project expectations by clearly defining roles and responsibilities and enabling open, consistent project communication. • Migrate the Customer from their current client-server reporting model to S&S's next generation reporting solution, the enQuesta Reporting Portal, which utilizes Cognos 8.4 Business Intelligence product.. • Provide the Customer an intuitive, easy to use reporting environment with user-friendly field names and business rules built in. Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 4 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 058 PROPOSED HIGH LEVEL SCOPE AND RESPONSIBILITIES Proposed High Level Scope It is anticipated that the Customer will port forward its existing enQuesta functionality to enQuesta 4. enQuesta system interfaces (see "Appendix -Attachment B- List of Interfaces"), that are currently licensed will be ported forward and maintained in their as is state, unless modified per this Statement of Work. Project Responsibilities For a project of this nature and in order to ensure a successful enQuesta upgrade, it is necessary for the Customer and S&S to work cohesively as a team. To achieve this goal and set the proper expectations regarding roles and responsibilities, the Customer and S&S will each maintain a set of general project duties. These general responsibilities include: A. General Customer Responsibilities I. Provide a dedicated Project Manager to serve as the primary Customer point-of- contact for this project and represent the Customer on the necessary project planning and implementation tasks and responsibilities. II. Assistance with overall project oversight and management to include ensuring availability of the Customer Functional Subject Matter Experts for input to and participation during: requirements, specifications, test plans creation and test plan execution activities, Simulation and Go-Live. III. Provide S&S with written process documentation and requirements for those business procedures that have been modified since the original enQuesta Go-Live. Note that changes in process not supported by enQuesta may result in changes in project scope. IV. Ensure that the current production enQuesta data environment is clean prior to the data conversion to enQuesta 4. The Customer's data cleansing activities must be completed by the beginning of the first conversion test. Clean data entails completing end of day enQuesta tasks, such as work order, hand held, cash and credit and collection run sheets. Except for the billing run sheet, where S&S will provide specific instructions on how and when to do a data cut so that we are able to do a billing parallel data validation test, clean data generally entails that there are no open batches in the system and that any daily/weekly/monthly and interface run sheets have been completed if they have been started. Run sheets, save for billing, should be complete by the beginning of each data cut and conversion. S&S will provide specific instructions and documentation on how to prepare your existing environment and how to execute a data cut for each data conversion. V. Participate in data conversion/data validation thru the use of legacy enQuesta to enQuesta 4 comparisons and reviewing reports. VI. Sign off on project related documents and deliverables including: requirements; specifications; and testing, including interfaces. VII. The Customer maintains primary responsibility for testing enQuesta functionality once deployed to the Train/Test environment. This includes the testing of maintenance releases during and after the upgrade. VIII. llointj responsibility to create and execute a set of Test Cases that will ensure the _-{Comment[SD1]:Added 6/7w/KV system is tested thoroughly by the Customer prior to Simulation. IX. Ensure that key personnel and users successfully complete end-user training offered remotely and/or onsite. The Customer bears the responsibility for any and all travel and living related expenses for customer personnel. Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 5 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 059 X. Responsible for leading the Simulation activities, as further described in this Statement of Work. XI. Provide proper seating space and meeting room space for those times when S&S will have an on-site project team. At a minimum, this should have comfortable desk space for up to 6 people in one room to include accommodating the S&S'employees laptop. Azusa to provide internet access, or air cards will need to be procured as part of the project. Comment[k2]:We just need an internet connection—not a network connection—we would XII. Provide meeting room space to serve as a Project Conference room, as necessary. even entertain a wireless hub. Azusa could set-up Meetings will typically range from 4 to 8 people. users for us. XIII. Provide adequate hardware and software environments that will enable current Production and Test/Train environments to be run successfully, per S&S.recommendations. As part of the project hardware requirement, S&S will provide a server rack as IneedecI. These recommendations can be found in the "Server _- Comment[SD3]:Requested a quote on rack, Hardware"section of this Statement of Work, awaiting pricing. XIV. As part of the project, S&S will help the client spec and purchase adequate hardware (server and disk) and software environments that will enable S&S to execute final legacy enQuesta to enQuesta 4 data. conversions, per S&S recommendations. XV. The Customer will provide connectivity to the enQuesta server and to the Reporting Portal Server allowing S&S to provide secure, authorized remote support by utilizing one of the following methods via hardware provided as part of the project: a. Cisco 3002 VPN Hardware client residing on the Customer's network b. Cisco ASA5505 Security Device residing on the Customer's network c. Site to site connection compatible with S&S's CISCO 3005 VPN Concentrator Our preferred network connection is at least 1.5Mbps with all servers put into a DMZ. Given the number and diversity of customers requiring support from S&S, each with varying networking infrastructures, support of software-based VPN clients is not a viable option for this project. If the Customer does not currently have one of these hardware solutions in place, they will assist S&S'Network&Security Personnel with the implementation and testing of one. As part of the project, S&S,Azusa IT and Azusa Light&Water personnel will communicate to avoid large data transfers during peak usage periods of Azusa's network. Comment[k4]:If server comes here,we could use a tape or FTP.Once the server is set-up at XVI. Production enQuesta reports may be printed to non-PostScript printers. Note: This Azusa,it is a server to server transfer. We always do does not impact enQuesta canned reports or Cognos reports. this alter hours,however,we need more than 2 hours as an example. Pin-feed or dot-matrixrinters are not supported -- --; p within enQuesta. Laser printers with Comment[Bubbas]:If we are going to"get-all , network connectivity are required. the data as Karen wants us to,this will require j moving large files over VPN.This needs to be • XVII. Cash Receipts printers must be capable of being accessed via a Network IP address. ;accounted for in access to Azusa's system. Serially attached Cash Receipt printers are not supported. • XVIII. Adherence to all 3rd Party Software maintenance requirements, for both of the Customer's environments (Training and Production) including: a. Micro Focus Server Express 5.1 SP4 b. Red Hat LINUX operating system level 4.0 (or greater). Both the Customer's Training Environment and Production Environment, if on separate servers, will require this operating system. c. Cognos 8 4 d. Oracle 119 (11.1.0.6) Enterprise Edition (per processor)including Tuning& Diagnostic Packs e. Microsoft Word -enQuesta Work Order, Letter and Document Templates will continue to require Microsoft Word. Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 6 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 060 f. enQuesta certified version of JBOSS g. enQuesta certified version of Java JDK v6.4 XIX. Adherence to enQuesta Client PC Hardware&Software requirements, including: a. Client PC's, which will be running enQuesta, should have an operating system of Windows 2000, Windows XP, Windows Vista or Windows 7 b. Client PC's, which will be running enQuesta, should be of at least a Pentium IV 2.2Ghz CPU class with 512MB of memory and have available 100MB of disk space. c. Client PC's, which will be running enQuesta, should have Internet Explorer 7.0 SP3 installed at minimum (or later version as certified). Screen resolution should be at least 1024 x 768 and Small Fonts should be enabled. d. Client PC's, which will be running enQuesta and need to take advantage of enQuesta's ability to export Excel type information, will need to have Microsoft Excel installed. e. Network speed for Client PC's running enQuesta should be capable of a minimum of 100 Mbps to the desktop and have a valid TCP/IP network connection. XX. Oversight and scheduling of Customer resources and the Customer's third party vendors. XXI. Ensure that key personnel attend the three day on-site enQuesta Reporting training provided by S&S. • XXII. Ensure Customer resources have the overall understanding of the Reporting Portal tool and associated functionality.; _--{Comment[SD6]:Removed 6n w/KV XXIII. Responsible for the generation of all reports outside the scope of this Statement of Work. XXIV. So that S&S may work with the Customer to port forward a set of currently existing Cognos Impromptu reports (detail described under S&S responsibilities), the Customer will: XXV. Archive any reports that currently are not being used or working to their satisfaction. The customer will move these reports to an archived folder. It will be the Customer's responsibility to maintain those reports in case they are needed at any point in the future. XXVI. Provide the minimum enQuesta Reporting Portal workstation and server hardware requirements. A complete list of supported software and hardware environments are available on the Cognos support Web site: 1. For the Client/ User side, Windows based workstations. a. RAM • 128 MB minimum • 256 MB recommended 2. For Server side (S&S provided), a Windows based server. a. RAM •4 GB per CPU minimum •4 GB per CPU recommended b. Processor Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 7 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 061 • Dual CPU - 1 GHz or better c. Disk Space • 650 MB for default installation • 585 MB for minimal installation •At least 300 MB of temporary disk space used during installation XXVII. Adherence to all 3rd Party Software maintenance requirements as provided as part of the project, for the Customer's.enQuesta Reporting Portal server, including: a. Cognos 8 -The enQuesta Reporting Portal requires Cognos Version 8.4. b. Microsoft Windows- Cognos 8 requires Windows Server 2003 R2 or greater to accommodate the enQuesta Reporting Portal. 1. Windows Server 2008 may be implemented dependent upon certification by IBM Cognos XXVIII. Provide proper and adequate hardware and software environments that will enable the enQuesta Reporting Portal to be run successfully, per S&S recommendations. XXIX. Adherence to the Systems&Software Support Program Guidelines XXX. City of Azusa IT roles/ responsibilities for both the upgrade project and ongoing operation of enQuesta are understood to be the following: a. Mike Guadagnino: Server Hardware (installation and maintenance), LINUX OS (user and printer maintenance), Network (VPN and network management), and Log Management(backup to Margaret), IVR server hardware (installation and maintenance) and telephone system integration. b. Margaret Delano: current duties (subject to change based on v4) 1. Daily- Check the history updates and printer status(clear printers when blocked).Move reports generated by processes to appropriate folders by FY/Month to prevent overwriting if improper date used. Rename reports on request when user catches their mistake 2. Monthly-Clean out Home folders with old files for all users(do not touch Train,Train01 et al unless requested by Monika Bauer).Move daily files created by processes in data0l/fio/prt to FY folders to prevent overwriting.Run Impromptu report on Cross Connections to make sure all device inventory codes are Active so that letters properly run on queue. Change status code if it shows Inventory.Assist Joe Cvetezar with changing 3rd party mailings for Cross Connection customers as needed Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 8 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 062. B. General S&S Responsibilities I. Overall Project Management and adherence with the Project Communication Plan, as well as providing and updating the Project Plan and monthly Status Reports to ensure the successful on-time delivery and implementation of enQuesta and the enQuesta Reporting Portal. II. Delivery of enQuesta end-user training for the Customer's key personnel. S&S will provide onsite training as described in this Statement of Work. All other training is expected to be delivered remotely. III. S&S maintains primary responsibility for testing enQuesta and the enQuesta Reporting Portal prior to deployment to the Customer Train/Test environment where the Customer, as described under General Customer Responsibilities, assumes testing responsibility. S&S will provide additional testing services and test scripts as agreed to in the budget detail. Azusa will be responsible for providing operationally specific test cases, spot verification of testing and sign off when operation works correctly within a one Azusa work week time period. S&S shall do likewise, and turnaround the documents within a one work week time period. IV. Project Management, Data Conversion, Implementation, Documentation, Simulation, Go-Live and Support Services to be provided remotely, during normal business hours, unless otherwise specified in this statement of work. Specific details of each activity are more thoroughly described below under"Description - High Level Project Activities". V. All RDMBS configuration, administration and future maintenance will be the sole responsibility of S&S. The Customer will only be responsible for the starting and stopping of the enQuesta application, and facilitating the provided enQuesta backup processes. In order to provide this level of support it is required that S&S be given full and unfettered Operating System level,and RDMBS level administrative access. Access will be restricted to authorized users as agreed to mutually. VI. Upgrading the Reporting Portal Environment from Cognos Impromptu to Cognos 8.4, publishing the new data model, and verifying the enQuesta eQL objects. VII. Provide a three day on-site Reporting Portal Refresher Training Course. VIII. Provide customer with report conversion of the 45 reports in Attachment D. Please refer to Attachment D for the list of priority reports to be converted as part of this effort'. __--{Comment[SW]:Added on 6n w1 KV IX. At no time shall S&S become involved with the oversight or scheduling of Customer resources or the Customer's third party vendors. Changes to the project timeline or the project plan due to the Customer and/or the Customer's third party vendors may result in a change of scope and be subject to Change Order. X. Adherence to the Systems &Software Support Program Guidelines. Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 9 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 063 Description — High Level Project Activities The following describes the high level project activities, services and scope of the Customer enQuesta upgrade. A. Proiect Management- S&S'project management methodology incorporates a structured project implementation process that defines the required steps to successfully and efficiently implement enQuesta. S&S' project management methodology ensures that a standard progression of research, information exchange,and actions for the joint Customer and S&S team is executed over the course of the project. Together, the Customer's and S&S'Project Team represent the project implementation team. S&S'Project Manager and the Customer's Project Manager will work closely to ensure that project dates and activities are reasonable, that the necessary resources from each side are scheduled and that internal communication, within the respective organizations, is clear. For S&S tasks, the S&S Project Manager is responsible for the overall execution of the formal project plan and for adhering to the Communication plan. The Communication plan details the frequency of joint Project Team meetings and status reports as well as specifies the Change Management and Issue Resolution processes. The project plan and Communication plan serve as the roadmaps which outline the required steps to successfully and efficiently implement enQuesta and communicate effectively throughout the project. For the Customer's upgrade, S&S anticipates a project duration of at least 10 months (following Contract Signing, the time of Project Initiation, to production enQuesta use) with a Project Manager allocated at 25% effort for the duration of the project. B. Data Conversion -The data conversion process consists of a set of activities grouped into three primary segments: • Data Conversion Assessment- Inventory&Analysis • Data Conversion Mapping Design, Conversion Planning and Unit Testing • Data Conversion System Testing, Production Execution and Validation Data Conversion Process Overview . ... -,. .. Ass•mment Design&Teeing r f - Execution fR.MM l.em Sd5 Dw.Cem�..ro.Glm Azusa Light&water-enquesta 4 Upgrade Statement of Work Page 10 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 064 The Assessment segment entails identifying new and modified tables and data attributes between the Customer's legacy enQuesta environment and enQuesta 4. Data mapping and verification, as well as the preparation and testing of conversion routines are accomplished during the Design and Conversion Planning segment. During the Testing and Execution phase, data is moved from the legacy enQuesta to the enQuesta 4 Training environment. The conversion process is executed in two parts: Pre Go-Live and Go-Live. Pre Go-Live activities provide for an environment that enables Testing, including Parallel Billing,Training and other primary activities. Go-Live activities involve drawing the legacy enQuesta production environment down and performing the final data conversions required to port that information over to enQuesta 4. S&S plans to convert all years of data and history, with no archiving or purging. S&S has included two (2) Pre Go-Live Conversions. The Pre Go-Live Conversions include the initial conversion to load to enQuesta Test/Train and one conversion to support Simulation. One Go-Live conversion is included, for a total of three (3) conversions. If necessary, a mutual decision will be made to include a fourth conversion. C. Implementation&Testing -The Implementation and Testing activities involve analyzing, implementing and verifying the appropriate enQuesta system configuration in a Training/ Test environment preceding the deployment to Production. The activities encompass the existing Customer business processes and those new or modified enQuesta business procedures, agreed to in advance and as defined in this SOW,from the Customer's legacy enQuesta implementation. Additionally, the activities include migrating forward, in their current state, the Customer's existing interfaces. Refer to"Appendix-Attachment 8 - Interface List". During this phase, enQuesta will be installed into a Train/Test environment on the new Customer server. This environment will serve as the environment in which Application Testing, Data Conversion,Testing and end-user Training will be conducted. The Customer maintains primary responsibility for testing enQuesta functionality once deployed to the Train/Test environment. Test plans are to be fully executed prior to Simulation. D. Training &Documentation - A successful upgrade or implementation cannot be achieved without the Customer's experienced enQuesta users being trained on the capabilities of enQuesta 4. S&S has planned for three (3weeks total Training (32 hours/week)land) -- Comment[SOBI:Karen,per Bubbathe thought Documentation effort for the enQuesta 4 upgrade. This effort includes training plan would be for training classes to be held Tues-Thurs. In addition to the onsite effort,there will be development and course scheduling, documentation delivery, project team training, and additional offsite preparation and documentation end user training activities.This training effort excludes the Cognos reporting and being dune. dashboard training which is held in different sessions. The planning and development activities will take place remotely. All Training and Documentation will focus on the new features of enQuesta only. Participants in project team and end user training programs shall be existing enQuesta users, and shall not require process related instruction. Training Plan and Scheduling: The S&S team will provide the Customer with a Training Plan. The purpose of the Training Plan is to detail the manner that educational services will be delivered by S&S to the Customer, including a summary of the training curriculum and approach. S&S will use multiple methods to aid users transition from the legacy enQuesta system to enQuesta 4 including instructor delivered training and hands-on exercises during training, and WebEx. Documentation: S&S will deliver, in electronic PDF form, the standard enQuesta 4 product documentation and training materials. • Standard User Guides- User guides are comprehensive, task oriented reference manuals that explain the enQuesta modules, processes, tasks, and functions. They provide an overview of what users can do with the application, identify the Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 11 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 065 recommended best practices in enQuesta,describe and explain the various tasks that utility personnel can perform in the application,and provide detailed instructions for performing these tasks. • Standard Training Materials-The training materials include scenario-based instructions and hands-on lab exercises to reinforce the learning of all instructional objectives.These materials are used in a classroom environment to provide users hands-on experience,executing new business processes so they become optimally trained users of enQuesta. • Standard Process Assistance Guides-Systems&Software's on-line library of Standard Process Assistance Guides provide Instructions for the best practice execution of each standard process in enQuesta. This library of on-line documentation is a form of quick reference for users who have already learned about a task and need some assistance while performing the task. PDF versions of the process guides will also be provided. • Standard System Level Documentation-instruction,conceptual descriptions of the system and reference information for managing the physical aspect of enQuesta. Includes instruction for enQuesta Configuration,role based user and user group management,security management,backup and recovery and daily processes. S&S'proposed End User team training program includes 2 sessions for each of the following courses,with the exception of Inquiry&Navigation,Work Orders which require additional sessions,and System Admin which will be offered for a single session. The training program will be delivered onsite and shall not exceed four(4)Azusa business days or 32 hours.This session also needs to be delivered within one calendar week to meet the estimated expenses of travel. Curriculum will focus on the new features Included In this upgrade,and will not include process specific Instruction. • Inquiry&Navigation • Work Orders • Billing • Credit&Collections • Meters • Cash • Administration Portal&Security o Margaret Delano and Mike Guadagnino-primary administrators o Monika Bauer-key administrator E. Simulation-An additional level of testing will be introduced for the enQuesta implementation. The objective Is to further reduce project risk and ensure that the actual Go-Live weekend is as seamless and problem free as possible. In order to achieve this,the Customer will initiate a Simulation to take place prior to the Go-Live weekend. The Simulation will simulate the actual Go-Live by providing a dry-run of the Go-Live activities. The Customer will bear the majority of responsibility for the Simulation and will lead, project manage and execute on the majority of testing related activities. The Customer is responsible for testing all business processes,including Interfaces,during Simulation. S&S will participate by aiding In the Project Management and responding to and resolving issues. S&S will support the Simulation activity remotely from Vermont. Please see"Appendix- Attachment C-Sample Simulation Plan"for a typical Simulation plan.Customer will be required to approve the system for go-live readiness.Go-live readiness is defined as a system with no level 1 or level 2 issues,or with viable workarounds for any said Issues which would allow go-live to proceed with either project team incurring additional expenses for this project.Please refer to the definitions of Level 1 and Level 2 issues in the System Acceptance section below. F. Go-Live and Go-Live Support-S&S strives to make the actual cutover,or Go-Live,to be as much of a non-event as possible. Strong project planning and execution should lead to the Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 12 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 066 cutover being as smooth, productive and as least disruptive as possible. S&S will execute the cutover plan, which will include the final drawing down of the legacy enQuesta environment, enQuesta 4 final data conversion, and the turning on of the configured enQuesta 4 environment. S&S staff will be on-site over the Go-Live weekend, as well as during the initial business days after cutover (7am -5:30pm), to aid in any issue resolution and to offer mentoring and assistance. Upon completion of the cutover, when the customer is live on enQuesta, S&S will provide production-critical, support services from S&S' facility in Vermont. The objective is to achieve Systems Acceptance (described below). Outstanding issues and remaining project deliverables are documented and prioritized. Periodic status reviews, via phone or video conference, are held between the Customer and S&S project teams to address outstanding project items. G. System Acceptance - System Acceptance shall refer to the date on which a module or group of interrelated modules of the software licensed herein is operating in a production environment without Level 1 issues as defined below. If Customer fails to notify S&S of such Level 1 issue within 30 days of Go-Live of the module or group of interrelated modules, System Acceptance shall be deemed to have occurred. o Level 1 (Showstopper): This is a severe problem that prohibits critical processing from continuing and there is no reasonable work around. As an example, bills will not print. o Level 2 (High): There is a serious problem with the system but there is a work around available that can be used on a temporary basis. As an example, work order closing has an error but a temporary work around has been defined where a CSR will manually look at each record after the closing. o Level 3 (Medium): There is a problem with the system but a viable long-term work around exists and no significant productivity impact to the customer exists. o Level 4 (Low): There is a cosmetic problem that does not impact operations in any way. As an example, there is a misspelling on a report or form. • Azusa Light & water - enQuesta 4 Upgrade Statement of Work Page 13 of 33 Proprietary and Confidential to Systems & Software, Inc. 7/20/2010 067 Enhancements& New Business Procedures The following list of product enhancements and new business procedures will be additional scope to this current Statement of Work. A. Optional New Features - Require Additional Services a. Executive Dashboard - 11 Cognos Go Dashboard licenses are included in the pricing as well as the services to implement them. i. S&S has included 40 hours for development, configuration and testing of the Executive Dashboard. Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 14 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 068 Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 15 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 069 PROPOSED HIGH LEVEL SCHEDULE enQuesta 4 Upgrade Proposed High Level Activities and Timeframe To meet the project objectives, the following approach to implementation and delivery will be used. This planned ten month timeline is subject to change as detailed project planning occurs. Please note, this duration is typical and expected for an upgrade of this nature. High Level Activit Timeframe Contract Signing Month 0 Project Kickoff Month 1 Delivery of enQuesta Upgrade Project Plan Month 2 Project Team Training Month 3 enQuesta Training Environment Populated with the Customer Data Month 5 SYS Admin Training Month 6 End User Training Month 8 Simulation Testing Month 9 Go-Live to Production of enQuesta 4 Month 10 Transition to Support Month 10 Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 16 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 070 ASSUMPTIONS Scope As previously stated, the scope of the enQuesta upgrade is expected to migrate existing enQuesta business process, functionality and interfaces to enQuesta 4 in an as-is state (see "Appendix- Attachment 8 -List of Interfaces"). There are significant functional improvements made within enQuesta, some of which the Customer may wish to implement. All new features categorized as "Standard -Available for Use As-is"are included in scope, but the Customer may choose to implement some of these at a later date. Optional Features and/or Optional Modules with License that are included in the scope of this project are specified in the "New Features and Enhancements"section of this Statement of Work. Additional business process improvements and/or Optional features will be managed through the S&S Change Control process and evaluated for potential impact to scope, dollars, and time. The Customer and S&S agree the scope is: • Port forward existing enQuesta CIS functionality and interfaces (See "Appendix- Attachment 8")to enQuesta 4 in an as-is state. • Delivery and implementation of enQuesta business process improvements as a replacement for existing enQuesta business processes that have not been retained (i.e.,the manner in which a business process may operate is handled in enQuesta 4 in another way). • Where existing business procedures have been retained and may be completed within enQuesta, and an alternative business process improvement has been introduced within enQuesta 4 as an option, the expectation is that the Customer will continue to utilize the legacy enQuesta process unless otherwise specified in the Statement of Work. • Implementation of Optional Features and/or Optional Modules with License that are specified in the "New Features and Enhancements"section of this Statement of Work. • S&S will make available the new Web Services IVR software, during the enQuesta 4 upgrade, in the Customer's Train environment. S&S will provide the standard API and related documentation. Any changes or modifications to the standard API would be out of scope and subject to change control. S&S will assist the Customer in working with First Data (FD), the current IVR vendor, to develop a mutually defined implementation approach to best port forward the IVR interface. This maybe done using the standard API or via a custom interface as determined by the S&S project team. • Migration to the enQuesta Reporting Portal including Cognos server configuration and necessary software. The Cognos 8 metadata content stores will reside on the enQuesta Production server and be available for reporting purposes from both the production and train environments. It is expected that only current client PC's that access enQuesta will be used to access this tool. • Following the enQuesta Reporting Portal training, S&S will commence the as-is conversion of the Customer's reports based on the previously provided prioritized inventory for up to 80 hours or completion of the migration of the reports listed in Attachment _In the event ---(Comment[S09]:Changed 5/7 w/KV Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 17 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 071 that the Customer requires additional S&S services beyond the workshop phone support will be available free of charge. If customer requests S&S to write additional reports, these services will be billable on a time and materials basis. • Where existing custom enQuesta reports have been written for the Customer and reside on the enQuesta menus, S&S will port these reports forward either in the new enQuesta reports format or in an as-is state, at a minimum. • Multiple A/R is a new feature available in enQuesta 4 that will require some analysis and discussion before implementing the necessary configuration changes for an existing enQuesta customer. S&S will provide up to 160 hours for analysis and discussion of Multiple A/R within scope. Should the Customer decide to move forward with a transition to Multiple A/R as part of this project, additional conversion services may be required, and depending on complexity may be subject change control. • enQuesta Report Writing; it is understood that the following customer employees will be assigned the Cognos licenses listed below: Administrator Monika Bauer Margaret Delano Professional Authors Business Authors KarenVanca (Query Studio) Paul Reid Rachel Tapia Clark Getty Derek McFann Enhanced Consumers George Morrow (can run reports only Cary Kalscheuer &Go To dashboards) Chet Anderson Federico Langit Yarek Lehr Consumers all CSR's (run reports only) Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 18 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 072 Server Hardware All required enQuesta servers and related configuration services will be provided as a part of this upgrade. As part of the enQuesta Administrator's training, the appropriate Azusa resources will be provided refresher training as needed to operate and maintain enQuesta in the activities listed below. All enQuesta software, including Cognos, will be loaded and installed on the new hardware provided under this contract. All data will be migrated from the existing environments to the new environments as part of the conversion process. The Customer Administrator's main responsibilities: Period Task Daily: Verify the nightly backups were successful. Check root's mail. Record the backup tape(s)and put in old tapes. Check the error report(errpt)and resolve any issues. If you are unable to, please call the S&S Support Desk and open a support ticket. Check the file system free space and manage it proactively with assistance from S&S as needed. Check for any visual indicators(lights or LEDs)on the server. Weekly: Reboot and ensure the server(s)start correctly. The appropriate scripting is already set up in root's cron. Create the mksysb bootable system recovery tape.(From IT® Mike G. Itteed4 training. _-- Comment[SD10]:Mike will receive all training required for technical enQuesta administration. Additional technical training opportunities are not Monthly: Verify AIX users are current and remove any that are obsolete.(from IT) part of the S&S scope and would be an internal !Thi is a contradiction with current system.Why remove the audit trail? Azusa decision as far as additional training from either S&S or 3'd party.Sean Verify defined printers are current and remove any that are obsolete. — -------- _-- - ` Comment(Soil]:This refers to cleaning up and Check crontab for new and/or changed entries. removing obsolete users that are no longer using the Analyze server performance in conjunction with S&S system or have kft ALW. As Needed: Download and apply relevant Operating System(O/S)patches as recommended by S&S. Setup/delete/modify attributes of 0/S Level users. Configure printers and printer queues. Configuration and maintenance of other 3rd party peripherals(scanners, cash printers/drawers) S&S Responsibil Provide support for 0/S and hardware issues once identified by the Azusa team and logged according to standard support desk procedures.Typical support in this area would include: o Server performance tuning o Configuration associated with hardware changes o 0/S support due to patching and level changes Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 19 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 073 DATABASE MONITORING and MAINTENANCE The grid below will outline the essential steps in the ongoing monitoring and maintenance of the enQuesta database. Responsibility Codes: P=Primary S=Assist/Secondary(as requested by Primary) Responsibility Database Administration Azusa S&S Database Software Maintenance Services Install database management software on database and application servers. P Install database patches on train/production databases. P Test patches on train/production databases. S p Upgrade databases. p Database Software Configuration Services Define database standards required for application. p Configure database software parameters for application use based on P requirements. Review and adjust database software parameters based on actual application P use. Database Add, Change,and Delete Services Create database instances. P Allocate disk space. p Define application resource requirements. P Alter database parameters to match application and system requirements. P Delete database instances. P Database Backups and Recovery Create backup scripts/manage backups. p Manage archive logs and audit trails. p Perform database recoveries. p Perform data recovery for application objects. p Application level data recovery(includes providing scripts and advice,but P does not include execution of the load). Database Problem Resolution Manage database problems,excluding application problems. P Manage and resolve application problems. P Resolve application availability and performance problems. p Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 20 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 074 Provide database level information about application performance. P Tune SQL queries. S P Database Performance Monitoring and Tuning Identify application performance problems and log issues appropriately. P S Monitor database for fragmentation. P Reorganize fragmented database tables. P Create and rebuild application indexes(as appropriate) P Train Instance Refresh Refresh train database instance. S P Load application specific data-not total load of database. P Manage Database Level Security Add,change,and delete database level user IDs. P Manage application user IDs. P Database Monitoring Monitor for availability. P S Resolve production database issues. P Resolve train database issues. P Application Support Create,deliver,and support application related scripts. P Execute application related scripts from a production ischeduletComment[SD12]:This is the same as is done today with Azusa responsible for starting any Alter application objects(including but not limited to)tables,indexes,views, P promsses within enQuesta(ex billing). and embedded SQL. Load application data. P Manage application problems. P Tune application objects and queries. P Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 21 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 075 • Out of Scope Currently, the following tasks, services and functionality are defined to be Out of Scope. S&S looks forward to discussing whether and how these items may be included within the scope of the enQuesta upgrade. • Any New Features categorized as"Optional- Requires Additional Services"unless otherwise specified in this Statement of Work. • Any New Modules categorized as"Optional Module with License"unless otherwise specified in this Statement of Work. • Any training of new or inexperienced enQuesta end users. It is expected that all of the Customer individuals that attend training will have prior enQuesta experience. • Any training related to base enQuesta functions or processes which have not changed nor been enhanced. . It is expected that all of the Customer individuals that attend training will have prior enQuesta experience. • Any Certified User or Trainer programs. S&S has both Certified User training and Certification Trainer programs available. In the future, the Customer may wish to add Certified training. • enQuesta Mobile -The enQuesta Mobile module and implementation services is not included in this proposal. • Automated Meter Reading related analysis, process modifications or new software. • Any 3rd party integration analysis unless explicitly stated within this Statement of Work. • Any creation of a Query Server, Data Warehouse or dedicated Reporting Environment other than production enQuesta and Cognos environments that have been proposed. • Any Business Continuity or Disaster Recovery oriented services or solution. • Delivery of any other newly licensed enQuesta software modules beyond those specified in this SOW. • Any new or modified interfaces unless explicitly stated within this Statement of Work. • Any changes to existing Bill Print formats unless otherwise specified in this Statement of Work. • Any changes in existing business processes (BPR- Business Process Reengineering) unless otherwise specified in this Statement of Work. • Any Services required to design, create or convert the Customer's existing Cognos reports above and beyond those described within this SOW. • Any services to design or create new reports. Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 22 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 076 MAINTENANCE RELEASES In order to ensure that the enQuesta system is kept up-to-date with enhancements and bug fixes, Customers are strongly encouraged to install the then-current Maintenance Release made available by S&S at least once per quarter. If a Maintenance Release has been made generally available by S&S that addresses a particular issue and a Customer subsequently contacts the S&S Help Desk regarding this issue but has not installed the applicable Maintenance Release, Customer will be required to install the Maintenance Release prior to assistance by S&S. If a Customer declines to install said Maintenance Release to remedy the issue, S&S reserves the right to charge the Customer on a time and material basis at then-current rates for effort incurred to resolve the issue. Should the customer encounter issues that can be clearly identified as being a result of the latest maintenance release (and not the result of anything on the customer's side), S&S will Assume responsibility in rectifying the issue and this will be covered under the annual maintenance and support. Customer may need to install previously released Maintenance Releases prior to installing the then-current Maintenance Release in order to bring the Customer's environment to the most current level. Maintenance Releases must be installed in their entirety. The Customer does not reserve the right to select which fixes/enhancements they wish to install. Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 23 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 077 PROJECT COMMUNICATION Project Communication Plan To properly set and manage expectations and to meet the project objectives,good communications are essential. To that end,the following documents the project communications and reporting structure and the methods that will be used to ensure timely dialogue between the Customer and S&S. Project Communication Matrix The Project Communication Matrix summarizes the types,participants and frequency of communication that will occur during the project. The Project Communication Matrix is a component of the overall Project Communication Plan. The other components of the Project Communication Plan include the Change Order process and Issue Escalation process. These additional components will be described and resolved with the Customer team during the project kickoff. See Attachment A-Project Communication Matrix. Change Control Process As the enQuesta project moves forward,the need for the Customer and S&S to discuss possible changes or modifications to the agreed upon scope of work will arise. To clearly communicate, successfully set expectations and keep the project on track,the Customer and S&S agree to work together to manage this Change Control process. Either the Customer or S&S Project Manager may initiate Change Control requests. For the Customer,the Customer Project Manager will fill out the Change Request Form and deliver it to the S&S Project Manager. The S&S Project Manager,as S&S'single point of contact,will log the request and begin the process of analyzing and scoping the implementation requirements,business impact,resource effort and potential impact to the project. The S&S Project Manager will return the Change Request Form to the Customer Project Manager detailing the Dollar Cost impact(positive or negative)and Project Schedule impact (positive or negative). The Customer Project Manager will review the completed Change Request with the Customer Team and inform S&S of the decision to Accept or Reject the Change. In the event of Acceptance,the Customer Project Manager will sign the Change Request Form and return it to the S&S Project Manager. Issue Escalation Process As with all projects,issues may arise that cannot be clearly resolved between the Customer and S&S Project Managers. Additionally,certain issues require resolution determined at the highest executive levels of decision-making. To provide for and manage these situations,the Issue Escalation process will be instituted. For both the Customer and S&S,the individuals authorized to initiate the escalation of an issue are each organizations'Project Managers. Issues that require escalation in order to determine a resolution typically fall into one of two categories: 1) Issues owned by one organization(the Customer or S&S)that may/must be escalated through the chain of command and resolved Internally within the owning organization. Typical examples would be business process decisions requiring Upper Management approval,such as the decision to streamline how fees are calculated for New Services/Permits. 2) Issues jointly owned that must be escalated through each organization's chain of command. Ultimately,a Joint Steering Committee with executive Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 24 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 078 representation from both the Customer and S&S, will meet (frequency determined by the Project Communication Plan) and work to mutually settle issues and communicate the resolution back to the Project Team. Typical examples of these types of issues include those where mutual, consensus agreement must be reached. For example, post-contract signing project scope additions that will have resource requirement needs and possibly impact Milestone dates of the overall project. Azusa Light & water - enQuesta 4 Upgrade Statement of Work Page 25 of 33 Proprietary and Confidential to Systems & Software, Inc. 7/20/2010 079 APPENDIX - ATTACHMENT A - PROJECT COMMUNICATIONS MATRIX Audience Communication Frequency What to Communicate Format of Communication One Si- Ad Progress Written to Ad Weekly weekly Monthly hoc Goals /Status Risks Issues Decisions .. Verbal One Group hoc Executive Sponsors X X X X X X X Customer Management Team X X X X X X X X X Project Management X X X X X X X X X X X X X Team Project Core Team X X X X X X X X X X Extended Project Team X X X X X X (3rd Parties) Customer CSR's X X X X X X X Community X X X X X Azusa Light&water—enQuesta 4 Upgrade Statement of Work Page 26 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 080 APPENDIX - ATTACHMENT B - INTERFACE LIST S&S will port forward the following interfaces in their as-is state as described below® Scope ACH Port forward existing ACH interface Lockbox Port forward existing Lockbox interface Bill Print Port forward existing Bill Print interface Payment Processing Port forward existing interface (Paymentus) Meter Reading Port forward existing Meter Reading functionality Itron MV9Oxi Port forward existing interface Collection Agency Port forward existing interface IVR Port forward existing IVR interface Credit Agency Port forward existing credit agency interface (Equifax) BiTech GL Port forward existing interface Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 27 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 081 Standard Make up of a Customer Implementation Team: This slide represents the roles that are typically fulfilled by the customer side team in a successful implementation. In most instances you have one person fulfilling multiple roles. 1 j Customer Project Team j tSTEERING COMMITTEE 1 fCORE TEAM I i I j ® conversion Lead ® Leada;TraMna Cad Lead Business Precro, MattheareMCJWMk dero., Cont gyration& Data Ertract/an drama.ESE Creation a CJwdlnate Setup Data Mopping CeMienmg.Unary Extttdion aJ Test Trafnmg of End Testing Data Cleanup Aum <tarng,Mean Wet Community Teallnp OPO a Resang. Cult Savke Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 28 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 082 APPENDIX - ATTACHMENT C - SAMPLE SIMULATION PLAN Objectives Simulation is one of most critical activities of an implementation. It is a dress rehearsal for go live. The system will be used as if it were a fully operational production system to replicate most normal work activities for purposes of evaluating and verifying that all software, hardware, conversions and operational processes will support your business needs when the system moves into production. This testing period will also be used to validate that trained end-users have achieved the ability to perform work in your new environment. There are the objectives to the simulation event: • Test Data Conversions • Test Daily Processes • Test Additional Processes (weekly, monthly, annual) • Test interfaces&integrations • Test reports Conversion The first objective of the Simulation is to validate and time the data conversion. To accomplish this we will duplicate the actual conversion conditions and time frame as closely as possible. 1. The Customer will provide S&S the origin data files by 8am on the scheduled start day. 2. The Customer will receive the converted data within four days of the scheduled start day. 3. The Customer will load the converted data, conduct basic system testing and conversion balancing. This will be accomplished by comparing and balancing reports from both your legacy system and 4 and determining the reason for any differences. The following data will be validated for this process: Total A/R A/R Aging Totals Total Deposit Dollar Amount(Active) Total Deposit Dollar Amount(Pending) Total Budget balances (if applicable) Total # of active accounts converted Total # of vacant accounts converted Total # of inactive accounts converted Total # of pending accounts converted Total # of premises converted Total # of meters converted 4. The Customer will enter additional data not converted, conduct functional testing and be ready to use the system. This may include but is not limited to the following data: Compound meters, new premises, future work orders or service orders, installments, promise to pays. Set up meter inventory -{Comment[SD13]:Out of smcp for this project. , - Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 29 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 083 Daily Operations Simulation The second objective it to conduct a complete integrated systems test of all daily processes and functions for a period of actual work from your legacy system in the 4 system. For this test the Customer will select a period of two to three days and collect all significant work performed in your legacy system during this time frame,including information from the routes and cycles processed. The results obtained from these tests will be matched to those obtained from the legacy environment during the same period to validate proper system function and business processes required for daily operation. Those processes tested Include but are not limited to: Meter Reading Upload/Download Process-Uploading/downloading/exception processing to and from your legacy system to. A billing run-calculate,print bill reports&update billing. Output will be sent to the print vendor as a separate test and output should match. Cash Payment Entry-Includes manual,scanned,ACH,and mass posting. Cash Update-ensure that the dally cash entries balance In both systems. Adjustment/Misc.Charge/Other Money Entry-charges other than billing and cash payments, such as adjustments,miscellaneous charges,deposits etc. Daily Update-End of day processes. Service/Work Order Entry-Enter service/work orders in(to Include new sites). • Delinquent Notice Process-Run through process of how to select accounts eligible for a delinquent notice and print delinquent notices. Output will be sent to the print vendor as a separate test and output should match. Shut Off Process-Run through process of how to select accounts eligible for shut offs,Issue service orders for shut offs and print shut off notices. Print door hanger labels. Credit Refund Process-Run through process of how to select accounts eligible for credit refunds and code them as such. Work Order Printing&Update Process-Run through process of how to batch print both service documents and customer correspondence letters. Address process of updating Completed work orders in the system. Cash receipt printers/drawers-receipts will print and cash drawer will automatically open as required. TOU Billing Test Additional Processes The third objective to simulation is to conduct a complete integrated systems test of weekly,monthly and annual processes and functions. Results obtained will be matched to your legacy system during this time frame to validate proper system function to meet business requirements. Examples of additional processes: Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 30 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 084 Promise to Pay Break Routine - Run through process of how to select accounts that have not paid their promise to pay balance by their promise to pay date Apply Interest and Deposits - Apply interest and give back deposits to customers with good credit ratings and giving interest only system wide. Bankruptcy procedures - Test work order process on a sample account. Run all custom and canned reports - Verify that results from custom/canned reports are as expected. Month end processing - finance interface Net Meter Billing Solar Surcharge _. Comment[Bubbai4]: Arc these current processes or new ones? ' Azusa Light & water - enQuesta 4 Upgrade Statement of Work Page 31 of 33 Proprietary and Confidential to Systems & Software, Inc. 7/20/2010 085 APPENDIX - ATTACHMENT D - REPORTS The following reports may be brought forward as part of the upgrade to v4. Reports will be created up to the 80 hours allowed within this SOW. Other reports will be used as training reports for the Customers report writers. Top 45 List of IMRs S&S Should Create Prior to Go Live Created Report Name By Frequency Unbilled Revenue Report(not an IMR,but system generated calc) S&S Yearly AVWWater CCUsage Margaret Monthly AVWWaterUsageAdjusted Margaret Monthly AVWWaterUsageAdjustmentsAmt Margaret Monthly AVWWaterUsagebyClassNumber Margaret Monthly CityWaterCCUsage Margaret Monthly CityWaterUsageAdjusted Margaret Monthly CityWaterUsageAdjustmentsAmts Margaret Monthly CityWaterUsagebyClassNumber Margaret Monthly Deposit Bonds CDs Margaret Monthly Elec KWH Usage Adjustments only Margaret Monthly Elec Usage Adjustments only No Tax Margaret Monthly Elec Users Tax Margaret Monthly FCAbybpbyClassnumber Margaret Monthly RWCAFbybpbydassnumber Margaret Monthly Special Water Rates and Usage Margaret Monthly StreetLightOutdoorLights Margaret Monthly Vacant Barrel Refuse with Units Margaret Monthly Vacant Bin Refuse with Units Margaret Monthly Water Users Tax Margaret Monthly ACD File S&S Monthly AZU GL Master S&S Monthly Cash Counts S&S Monthly ME-Cash Reconciliation S&S Monthly ME-Changes to AR by Fund S&S Monthly ME-Deposit Reconciliation s&S Monthly Sales Tax Pmts(Covina/Irwindale Taxes) S&S Monthly Sales Tax Pmts S&S Monthly Sales Tax Pmts-byCust S&S Monthly Sales Tax Pmts-byDate S&S Monthly CFUsagecompare_2 S&S Monthly G2-AdjustmentReport_3 S&S? Monthly Electric-Shutoffs S&S Daily Water-Shut Offs S&S Daily ElectricBillingKickOut S&S? Daily DepositswithCodes Margaret Daily Accounts with No Deposit Record S&S As Needed AZU Credit Rating Report Detail S&S As Needed Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 32 of 33 Proprietary and Confidential to Systems&Software, Inc. 7/20/2010 086 Summary Level Credit Rating S&S As Needed Needed for quarterly state NAICS Rpt_All_2008VERSION S&S reporting AddresslistParsedwithServicesElectric Margaret Needed for 2turniton monthly AddresslistParsedwithServicesWater Margaret Needed for 2turniton monthly CompareCCFbetweenFY S&S rate studies ElectricUsagebyBlockbyClass S&S rate studies CCFUsagebyAcctbyblock_Revised S&S rate studies Azusa Light&water-enQuesta 4 Upgrade Statement of Work Page 33 of 33 Proprietary and Confidential to Systems&Software,Inc. 7/20/2010 087 to AZUS.A LIGHT & WATER CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZU TILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JULY 26, 2010 SUBJECT: RATIFICATION OF ANNUAL WATER RIGHTS LEASE TRANSACTIONS RECOMMENDATION It is recommended that the Utility Board ratify water rights leases to the City of Arcadia, Canyon Water Company, and Miller-Coors and ratify signature of the leasing documents signed by the City of Arcadia and Canyon Water Company as allowed by Resolution No.09-C69 approved by the Utility Board at its July 27, 2009 regular meeting. BACKGROUND The City of Azusa produces water from the Main San Gabriel Basin which is controlled by a Judgment entered into the Court records January 4, 1973, and periodically amended thereafter. The Judgment requirements are enforced by the Main San Gabriel Basin Watermaster office, with Court oversight. In 1993, the City of Azusa purchased the Azusa Valley Water Company along with the substantial water rights owned and controlled by Azusa Valley. Furthermore, the City of Azusa ("City") has a controlling interest in the Azusa Agricultural Irrigating Company ("Azusa Ag.") and by contract with the Miller-Coors Brewing Company, the City controls those water rights belonging to Miller-Coors that equal the Miller demand on the City of Azusa water system. Water produced by the Hsu Water Filtration Plant is also a use of Azusa's Basin Water Rights that is monitored by the Watermaster office. The City is the owner of record and otherwise beneficially controls, or is the duly authorized and acting agent for, the ownership of 8.11334 percent of the Production Rights (not including Miller-Coors) in the Main San Gabriel Basin as adjudicated in the case of"Upper San Gabriel Valley Municipal Water District vs. City of Alhambra et al." In order to keep the Basin replenished under the Judgment, each year in May the Watermaster Board sets the Safe Yield for 088 Lease of Water Rights July 26, 2010 Page 2 the following year and also sets the prices and assessments to be applied to the water produced in the current year. This year the price of USGVMWD replenishment water was set at $587/Acre- foot ($450 last year) and SGVMWD replenishment water was set at $130/Acre-foot ($130 last year). The amount of water rights that the above entities possess varies with the Safe Yield for the Basin. In Fiscal Year 2009-2010 the Basin Safe Yield was set at 170,000 acre feet (AF). Of that 170,000 AF, the City of Azusa has the water rights to produce 8.11334 percent of 170,000 AF (13,793 AF) plus 3,800 in Diversion Rights. Including Miller-Coors' water rights this year, the City has approximately 20,621 AF of water right. Next Fiscal Year, 2010-2011, the Basin Safe Yield has again been set at 170,000 AF which will maintain the City's corresponding water rights. In a typical year, the water rights controlled by the City are transferred between the City entities to offset overproduction with no exchange of money and Azusa purchases a small amount of Replacement Water. However, because the Main San Gabriel Basin is currently in distress due to lack of rainfall and the inability of Metropolitan Water District of Southern California to deliver Replenishment Water to the Basin, Watermaster has temporarily suspended certain rules concerning water rights transfer that has allowed the City of Azusa to make some extraordinary water rights transfers to other Basin water producers. The Watermaster stipulation each year is that all leases be finalized and notarized by the end of day June 30. The effect of the temporary change in Watermaster water rights transfers is to allow the City to purchase a maximum amount of replenishment water from SGVMWD at $130/AF (7,375.60 AF @ $130/AF; $958,828.00) which allows the City to conserve approximately 7,171 AF of its own water rights. The City is then able to lease some of those rights (6,055 AF) to willing lessees, in this case the City of Arcadia, at 92% of $587/AF (4,300 AF at 92% of $587; $2,322,172); Canyon Water Company at 96% of$587/AF (1,500 AF at 96% of$587; $840,000) and Miller- Coors at 93%of $587/AF (255 AF at 93% of$597; $139,207.05). Since Miller—Coors has overpumped their base water right of 2,043.24 AF in 2009-2010, by contract with the City of Azusa, Miller has transferred 139 AF back to the City for no cost. The benefit to the parties of these transactions is that they can offset their pumping in the Main Basin at a savings of between 4% and 8% of$587/ AF, and the City of Azusa retains approximately 1,116 AF of water right to be used in Fiscal Year 2010-2011, effectively at no cost. Lease revenues by the City of Azusa for these FY10 transactions total $3,301,379.05. Considering the cost of Replacement Water at $130/AF ($958,828.00) and total assessments on water rights and production ($346,871.16), the net gain for these tranactions is $1,995,679.89. The Safe Yield set by Watermaster for FY 2010-2011 is again 170,000 AF, which will maintain the City's needs for Replacement Water, and the 1,116 AF of Production Right that the City retains will provide a buffer against possible water rate increases and increased Replacement Water obligations due to the lower Safe Yield. If Watermaster continues the suspension of the Water Rights Transfer restrictions, similar transactions may be a possibility in June of 2011. 089 Lease of Water Rights July 26, 2010 Page 3 FISCAL IMPACT The fiscal impact of ratifying the water rights leases with the City of Arcadia, Canyon Water Company and Miller-Coors is $3,301,379.05 with a net of approximately $1,995,679.89, considering purchase of water from SGVMWD, and water assessments. Also, Azusa will retain approximately 1,116 AF of carryover water rights which could be worth up to $725,400 if the price of Replacement Water rises to $650/AF in fiscal year 2010-2011. Prepared by: Chet Anderson, P.E., Assistant Director- Water Operations 090 LEASE.OF WATER RIGHTS PRODUCTION RIGHT THIS LEASE OF WATER RIGHTS(the "Lease")is entered into on this-2-9_ day of June,2010, by and between Azusa Valley Water Company ("Owner") and the City of Arcadia.("Arcadia"), a California municipal corporation with respect to the following: RECITAL This Agreement is made with respect to the following facts: Owner owns of record and beneficially of otherwise controls, or is the duly authorized and acting agent for the owners of 4,300 acre feet of Production Rights in the Main San Gabriel Basin as adjudicated in the case of"Upper San Gabriel Valley Municipal Water District vs. City of Alhambra, et al"LASC No. 92418. The ownership of said Rights entitle Owners to take delivery or otherwise produce from the Main San Gabriel Basin said 4,300 acre feet of water on an annual basis or in such amount as is determined from time to time by the Main San Gabriel Basin Watermaster. As of the date hereof,the Rights associated with said Production Right are 4,300 acre-feet for the 2009-10 water year. AGREEMENT. IN CONSIDERATION of the foregoing recital and the mutual promises set forth herein, Owner and Arcadia agree as follows: 1. Leasing of Production Rights. Owner hereby leases to Arcadia, and Arcadia hereby leases from Owner 4,300 acre-feet of Rights for the term and upon the terms and conditions set forth in this Lease. 2. Term. The term of this Lease shall be for a period commencing June 1,2010 and ending June 30,2010. 3. Lease Rate,Payment and Adjustment (a) The gross rental payable under this Lease for the term set forth in paragraph 2 above shall be$2322,172.00 which has been calculated on the basis of$540.04 per acre-foot, 92% of the Replenishment Rate of$587 as set by the Main San Gabriel Groundwater Basin Watcrrnaster . Lease of Water Rights Page 1 6/7/2010 091 (b) The annual rate shall be paid by Arcadia upon receipt of an invoice for the full amount from Azusa Valley Water Company (c) All payments due Owner pursuant to this Lease shall be made and sent as follows: Azusa Valley Water Company P.O. Box 9500 Azusa,CA 91702 4. Agreement Re:Main San Gabriel Basin Watermaster. (a) Owner agrees to execute and deliver to Arcadia all documents which , from time to time,may be required by the Main San Gabriel Basin Watermaster to reflect the Lease to Arcadia of the Production Rights which are the subject of this Lease. All such documents shall be in such form and substance as shall be reasonably satisfactory to Owner, Arcadia and Watermaster. (b) Arcadia shall,at its expense,prepare and submit all reports required by the Main San Gabriel Basin Watermaster in connection with the exercise by Arcadia of the Rights. (c) This Lease entitles Arcadia to the use only of the Rights (i.e., purchase of water) associated with the Production Rights. Owner retains and does not convey to Arcadia any other Rights associated with said Production Right. 5. Other Provisions. Owner and Arcadia further agree as follows: (a) In the event any dispute shall arise between the parties to this Agreement,the same shall be resolved by arbitration conducted by the American Arbitration Associationin accordance with the Commercial Arbitration Rules of the American Arbitration, as then in affect. Such arbitration shall be conducted in a site within Los Angeles County, California agreeable to both parties before three(3)arbitrators who shall be selected by mutual agreement of the parties; if agreement is not reached onthe selection of arbitrators within fifteen days,then each of the parties shall select an arbitrator and the two (2) arbitrators so selected shall select a third. The provisions.of the Commercial Arbitration Rules of the American Arbitration Association shall apply and govern such arbitration except that the prevailing party shall be entitled to recover from the other party its attorney's fees actually incurred in such amount as may be determined by the arbitrators. Lease of Water Rights Page 2 6/7/2010 092 • (b) All communications,notices and demands(collectively"Notices")of any kind shall be made in writing and personally served or sent by registered or certified mail,postage prepaid to the following: Owner: Chet Anderson Azusa Valley Water Company P.O.Box 9500- Azusa,California 91702 Arcadia: Tom Tait. City of Arcadia._Public Works P.O Box 60021 Arcadia,California 91006 Any Notice personally..served shall be effective upon service. Any Notice sent by mail,and properly addressed, shall be effective upon date of receipt, or refusal as indicated on the return receipt. Either party may change its address for Notices by Notice to the other given in a manner provided inthis subparagraph. (c) This Lease shall inure to the benefit of and be binding upon the heirs, successors and assigns of both parties hereto. (d) Each party shall,upon request of the other party,take such further actions and execute and deliver such further instruments as shall be reasonably required to carry out the purpose and intent of this Lease. (e) This Lease is executed in the State of California and shall be governed by and construed in accordance with California law. Venue for any action arising out of or related to the Lease shall be placed in any court of the State of:California with appropriate jurisdiction and located in the County of Los Angeles,with service of process to be in accordance with the then provisions of the California Code of Civil Procedure. (f) This Lease may be executed in two or more counterparts,each of which shall be an original but all of Which,together,shall constitute a single instrument. R.shall not be necessary for both parties to execute the same counterpart(s)of this Lease for this Lease to become effective. (g) This Lease constitutes the entire agreement of the Owner and Arcadia with respect to the subject matter hereof. This Lease supersedes all prior discussions and understandings with respect to the subject matter hereof. There are no representations,warranties,promises or covenants as to the subject matter hereof except as expressly set forth in this Lease. (h) This Lease may be amended_only by a written instrument executed by the party to be charged. Lease of Water Rights Page 3 6/7/2010 093 (i) The paragraph headings contained in this Lease are for convenience only and shall not be considered in the construction or interpretation of any provision hereof. (j) Owner represents and acknowledges that the is executing this Lease either as the beneficial and recorded owner of certain of the Production Rights or as the duly authorized representative of the beneficial and recorded owner of all Production Rights not . beneficially owned by Owner. IN WITNESS WHEREOF, Owner and Arcadia have executed and delivered this Lease of Water Rights as of the day first above written. Azusa Valley Water Company City of Arcadia A California Corporation California Municipal Corporation evvito -els-11.-1 i 0 --(-0-fri PC( 1t e—1k`oga' Sot toes O®ee.ra,st_ (name & title) Lease of Water Rights Page 4 6/7/2010 094 LEASE OF WATER RIGHTS PRODUCTION RIGHT THIS LEASE OF WATER RIGHTS (the "Lease")is entered into on this 28th day of June, 2010, by and between Azusa Valley Water Company ("Owner")and the Canyon Water Company, a California corporation ("CWC"), with respect to the following: RECITAL This Agreement is made with respect to the following facts: Owner owns of record and beneficially of otherwise controls, or is the duly authorized and acting agent for the owners of 1,500 acre feet of Production Rights in the Main San Gabriel Basin as adjudicated in the case of"Upper San Gabriel Valley Municipal Water District vs. City of Alhambra, et al"LASC No. 92418. The ownership of said Rights entitle Owners to take delivery or otherwise produce from the Main San Gabriel Basin said 1,500 acre feet of water on an annual basis or in such amount as is determined from time to time by the Main San Gabriel Basin Watermaster. As of the date hereof, the Rights associated with said Production Right are 1,500 acre-feet for the 2009-10 water year. AGREEMENT IN CONSIDERATION of the foregoing recital and the mutual promises set forth herein, Owner and CWC agree as follows: 1. Leasing of Production Rights. Owner hereby leases to CWC, and CWC hereby leases from Owner 1,500 acre-feet of Rights for the term and upon the terms and conditions set forth in this Lease. 2. Term. The term of this Lease shall be for a period commencing June 1, 2010. and ending June 30, 2010. 3. Lease Rate,Payment and Adjustment (a) The gross rental payable under this Lease for the term set forth in paragraph 2 above shall be$840,000.00 which has been calculated on the basis of$560.00 per acre-foot, 96% of the Replenishment Rate of$587 as set by the Main San Gabriel Groundwater Basin Watermaster . Lease of Water Rights Page 1 6/29/2010 095 (b) The annual rate shall be paid by CWC upon receipt of an invoice for the full amount from Azusa Valley Water Company (c) All payments due Owner pursuant to this Lease shall be made and sent as follows: Azusa Valley Water Company P.O.Box 9500 Azusa,CA 91702 4. Agreement Re:Main San Gabriel Basin Watermaster. (a) Owner agrees to execute and deliver to CWC all documents which, from time to time,may be required by the Main San Gabriel Basin Watermaster to reflect the Lease to CWC of the Production Rights which are the subject of this Lease. All such documents shall be in such form and substance as shall be reasonably satisfactory to Owner, CWC and Watermaster. (b) CWC shall,at its expense,prepare and submit all reports required by the Main San Gabriel Basin Watermaster in connection with the exercise by CWC of the Rights. (c) This Lease entitles CWC to the use only of the Rights(i.e.,purchase of water)associated with the Production Rights. Owner retains and does not convey to CWC any other Rights associated with said Production Right. 5. Other Provisions. Owner and CWC further agree as follows: (a) In the event any dispute shall arise between the parties to this Agreement,the same shall be resolved by arbitration conducted by the American Arbitration Association in accordance with the Commercial Arbitration Rules of the American Arbitration,as then in affect. Such arbitration shall be conducted in a site within Los Angeles County, California agreeable to both parties before three(3)arbitrators who shall be selected by mutual agreement of the parties;if agreement is not reached on the selection of arbitrators within fifteen days,then each of the parties shall select an arbitrator and the two(2)arbitrators so selected shall select a third. The provisions of the Commercial Arbitration Rules of the American Arbitration Association shall apply and govern such arbitration except that the prevailing party shall be entitled to recover from the other party its attorney's fees actually incurred in such amount as may be determined by the arbitrators. Lease of Water Rights Page 2 6/29/2010 (t9S (b) All communications, notices and demands (collectively "Notices") of any kind shall be made in writing and personally served or sent by registered or certified mail, postage prepaid to the following: Owner: Chet Anderson Azusa Valley Water Company P.O. Box 9500 Azusa, California 91702 CWC: William McIntyre., President Canyon Water Company 370 E. Rowland.Avenue Covina, California 91723 Any Notice personally served shall be effective upon service. Any Notice sent by mail, and properly addressed, shall be effective upon date of receipt, or refusal as indicated on the return receipt. Either party may change its address for Notices by Notice to the other given in a manner provided in this subparagraph. (c) This Lease shall inure to the benefit of and be binding upon the heirs, successors and assigns of both parties hereto. (d) Each party shall, upon request of the other party, take such further actions and execute and deliver such further instruments as shall be reasonably required to carry out the purpose and intent of this Lease. (e) This Lease is executed in the State of California and shall be governed by and construed in accordance with California law. Venue for any action arising out of or related to the Lease shall be placed in any court of the State of California with appropriate jurisdiction and located in the County of Los Angeles, with service of process to be in accordance with the then provisions of the California Code of Civil Procedure. (f) This Lease may be executed in two or more counterparts, each of which shall be an original but all of which, together, shall constitute a single instrument. It shall not be necessary for both parties to execute the same counterpart(s) of this Lease for this Lease to become effective. (g) This Lease constitutes the entire agreement of the Owner and CWC with respect to the subject matter hereof. This Lease supersedes all prior discussions and understandings with respect to the subject matter hereof. There are no representations, warranties, promises or covenants as to the subject matter hereof except as expressly set forth in this Lease. (h) This Lease may be amended only by a written instrument executed by the party to be charged. Lease of Water Rights Page 3 6/29/2010 097 (i) The paragraph headings contained in this Lease are for convenience only and shall not be considered in the construction or interpretation of any provision hereof. (j) Owner represents and acknowledges that he is executing this Lease either as the beneficial and recorded owner of certain of the Production Rights or as the duly authorized representative of the beneficial and recorded owner of all Production Rights not beneficially owned by Owner. IN WITNESS WHEREOF, Owner and CWC have executed and delivered this Lease of Water Rights as of the day first above written. Azusa Valley Water Company Canyon Water Company A California Corporation A California Corporation Olesi '72d7_/ J George F. Morrow Littt(no in 0. P. {name & title) Lease of Water Rights Page 4 6/29/2010 098 E "3 • AZUSA LIGHT & 'd'ATER SCHEDULED ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JULY 26, 2010 SUBJECT: ADJUSTMENT TO CONTRACT WATER RATES FOR MILLER-COORS RECOMMENDATION It is recommended that the Azusa Utility Board approve the attached resolution adjusting water rates for MillerCoors, LLC, effective July 1, 2010. BACKGROUND On February 23, 2009, the City of Azusa entered into a restated water supply agreement with MillerCoors LLC, which set rates for water services provided to the Miller Brewery. Pursuant to the agreement, rates are to be adjusted after May 1, 2010, and are to be calculated based on a formula set forth in the agreement. Since the rate adjustment methodology relies on data for the fiscal year, it is now timely to calculate the new rates. The rate adjustment methodology parallels the cost of service process the City uses to adjust rates for all customers. Essentially, the agreement specified methodology considers AL&W's water budget, both variable and fixed costs, and allocates those costs in proportion to Miller's water use and meter capacity compared to the rest of the system. The total water utility budget subject to rate adjustment calculations for upcoming fiscal year is about $19.9 million, considering offsetting miscellaneous revenues. Fixed costs are estimated at 32.9% ($6.6 million) and variable charges are estimated to be 67.1% ($13.4 million). Fixed costs are recovered through meter charges, and variable costs are recovered through commodity charges. Miller's portion of the fixed costs has been determined to be 0.2955%, and Miller's share of the commodity charges has been estimated at 12.21%. 099 MillerCoors Water Rate Adjustment for FY 2010-11 July 26,2010 Page 2 Based on above information, which is more detailed in attached report, staff is recommending the following rates for Miller for FY 2010-11: PROPOSED RATE CHANGE FOR MILLER BREWERY EFFECTIVE JULY 1,2010 Service Current Rate Proposed Rate Pct Change Moly Meter Charge $1,164.35 $1,535.97 31.9% Per CCF Charge $1.336 $1.70 27.2% The proposed rate adjustments are consistent with the forecasted costs for FY 2010-11, which were included and disclosed to Miller in the February 2009 Agreement. The Agreement- forecasted cost for water, for example, was $1.733 per ccf for FY 2010-11, and the proposed cost is $1.70 per ccf; the forecasted meter charge was $1,164.35 per month for FY 2010-11, and the proposed cost is $1,535.97 per month. While the proposed meter charge is $4,459.44 higher than forecast on annual basis, the proposed consumption charges are about $31,640 below the prior forecast on annual basis. For a more detailed description of the cost base for the rate changes, please see attached supplemental report. Rates are to be effective for a period of two years according to the agreement, at which time City staff will again review pertinent information and formulate an update of the contract water rates. FISCAL IMPACT This rate adjustment is expected to increase revenues by about $353,000 if the consumption pattern of Miller continues in FY 2010-11 at the same level it was during FY 2009-10. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities Attachments: Resolution Adjusting Water Rates for MillerCoors, LLC MillerCoors Water Supply Rate Adjustment Calculation 100 RESOLUTION NO. A RESOLUTION OF THE UTILITY BOARD AND CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, ADJUSTING CONTRACT WATER RATES FOR MILLERCOORS, LLC. WHEREAS, the City of Azusa and MillerCoors, LLC, entered into a restated water supply agreement (hereinafter, "Agreement") on February 23, 2009; and WHEREAS, the Agreement obligates the City's water utility to supply water to MillerCoors' facility in Irwindale, California; and WHEREAS, Section 6 of the Agreement permits the City of Azusa to adjust rates effective May 1, 2010, in accordance with the methodology outlined in Exhibit D of Agreement; and WHEREAS, Azusa Light & Water staff have calculated the water rate adjustment for MillerCoors effective July 1, 2010, consistent with the Agreement methodology; and WHEREAS, Exhibit A of this resolution sets forth the new meter and commodity charges for MillerCoors; and WHEREAS, the rates included in Exhibit A are to remain in effect for a period of two years according to the Agreement between parties; NOW, THEREFORE, the City Council and Utility Board of the City of Azusa resolve as follows: Section 1: The water rates attached hereto as "Exhibit A" and made a part hereof, are adopted and shall be effective July 1, 2010; and Section 2: Azusa Light & Water is hereby directed to bill MillerCoors, LLC, the rates included in Exhibit A for water utility billings rendered on and after July 1, 2010. PASSED, ADOPTED and APPROVED this 26`h day of July 2010. Joseph R. Rocha, Mayor ATTEST: Vera Mendoza, City Clerk 101 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council/Utility Board of the City of Azusa at a regular meeting of the Azusa Utility Board on the 26th day of July, 2010. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza, City Clerk 102 EXHIBIT A The following water rates shall be effective for all water supply services rendered to MillerCoors,LLC,on and after July 1,2010: Meter Service Charge Monthly Meter Service Charge for 12 inch water meter: $1,535.97 Commodity Service Charge Per CCF Commodity Charge: $1.70 103 MillerCoors Water Supply Rate Adjustment Calculation July 26, 2010 Summary The purpose of this paper is to set forth the contract water rate adjustment for the Miller Brewery effective July 1 , 2010. This paper includes an overview of the rate adjustment methodology, data and calculations that are required to adjust water rates for the Miller Brewery as included in the Amended and Restated Water Supply Agreement (hereinafter, "Agreement") entered into between the City of Azusa and MillerCoors, LLC, on February 23, 2009. The current rates in effect for Miller and the rate changes proposed pursuant to the calculations included in this analysis are as follows: PROPOSED RATE CHANGE FOR MILLER BREWERY EFFECTIVE JULY 1, 2010 Service Current Rate Proposed Rate Pct Change Moly Meter Charge $1,164.35 $1,535.97 31.9% Per CCF Charge $1.336 $1.70 27.2% The proposed rate adjustments are consistent with the forecasted costs for FY 2010-11 , which were included and disclosed to Miller in the February 2009 Agreement. The Agreement- forecasted cost for water, for example, was $ 1 .733 per ccf for FY 2010-11 , and the proposed cost is $ 1 .70 per ccf; the forecasted meter charge was $ 1 ,164.35 per month for FY 2010-11 , and the proposed cost is $1 ,535.97 per month. While the proposed meter charge is $4,459.44 higher than forecast on annual basis, the proposed consumption charges are about $31 ,640 below the prior forecast on annual basis. Moreover, it is noted that all other non-contract water customers were subject to a water rate increase of 18% on July 1 , 2009, and a second increase of 15.6% on July 1 , 2010. Since the Agreement with MillerCoors was approved in February 2009, and set water rates through April 2010, the Miller Brewery has not been subject to a rate adjustment since February 2009. Data Sources and Scope of Information Used The data included in this analysis was gathered by Azusa Light & Water staff from the budget documents, debt service schedule, and customer information system. The calculations included herein only use data necessary to calculate the meter service charge and commodity rate on a per ccf basis for the upcoming fiscal year of July 1 , 2010, through June 30, 2011 . This period was chosen for the effective rate period since it coincides with the City's fiscal year budget, and since the current Agreement with MillerCoors permits a rate adjustment on May 1 , 2010. - 1 - 104 Contract Basis for Rate Changes Section 4.2 of the Agreement requires MillerCoors to pay the City a"Permitted Rate". The Permitted Rate is defined as "the rate charged to MillerCoors for City Water determined using the formula set forth on Exhibit D." The Exhibit D formula is set forth in a"Technical Memo" dated September 7, 2007, and may be summarized as follows: • Determine budget for water distribution services subject to retail rate case • Divide budget into fixed costs and variable costs, using ratios set forth in the Technical Memo • Determine service capacity of distribution system and Miller's share of that capacity • Allocate fixed costs through a meter charge in proportion to Miller's share of system capacity(as determined through water meter sizes/numbers/hydraulic factors) • Determine total water system sales and Miller's share of total sales • Allocate variable costs through a commodity charge per ccf in proportion to Miller's share of water consumption(sales) The remainder of this report follows the steps above in formulating the new rates for Miller Brewery for FY 2010-11. The financial data used in this report is the approved water fund budget for FY 2010-11. To avoid consultant costs, this data does not include any financial history, or a 5-year forecast; such information is not necessary for this rate calculation. The water usage data is based on consumption during FY 2009-10, and the meter data, or system capacity information, is based on a report using customer information system billing data effective for July 2010. -2 - 105 Budget Information The following budget was adopted for Fiscal Year 2010-11, which includes some adjustments to reflect retail revenue requirement as specified in the Agreement: Financial Information Water Enterprise Fund-Approved Budget Budget Expenditures FY'10-11 Production $5,145,540 Water Rights Lease Cost(8%) $1,326,110 Transmission and Distribution 2,446,305 Customer Accounting and Sales 4,055,529 Uncollectible Accounts 0 Administrative and Engineering 1,185,630 Interest Expense-COP/New LTD(a) 3,349,271 Principal-COP/New LTD(a) 1,180,000 Franchise Fee (2%of Retail Sales) 354,427 Subtotal—Expenditures $19,042,812 Capital Projects(b) $2,140,000 Non-Rate Revenue Fees Revenue(c) ($634,000) Other Revenue 0 Interest Income (600,000) Subtotal Non-Rate Revenue (1,234,000) Net Revenue Requirement(d) $19,948,812 (a) Based on Debt Service Schedules. (b) Cash funded Capital Improvement Projects to maintain system. (c) Miscellaneous revenues that offset retail rates. (d) Amount to recover from retail rates. Fixed and Variable Costs According to Exhibit D of the Agreement, fixed and variable costs are divided into the following percentages and amounts based on the FY 2010-11 budget: Fixed and Variable Costs Fixed 32.9% $6,563,159 Variable 67.1 13,385,653 Total 100.1 $19,948,812 -3 - 106 METER CHARGE Service Capacity Percentage of Miller Brewery Fixed costs are recovered by the water utility through meter charges. Meter size and the number of meters determines the percent of capacity used by a particular customer class. Fixed costs are multiplied by that percent of capacity for a particular customer class to allocate fixed costs fairly. Total Meters and Capacity of Azusa Water System Total Potable Capacity Capacity Meter Size Meters(a) Factor(b) Units [a] [b] [c]=[al*[b] 5/8" 2,196 1.00 2,196 3/4" 16,566 1.00 16,566 1" 1,805 1.67 3,014 1 1/2" 282 3.33 939 2" 944 5.33 5,032 3" 155 11.67 1,809 4" 137 20.00 2,740 6" 165 41.67 6,876 8" 108 60.00 6,480 10" 28 96.67 2,707 12" 1 143.33 143 Total(2010) 22,387 -- 48,501 a. Source of Data:Azusa Light&Water Report by Margaret Delano, 7/13/2010. b.Hydraulic factors which are multiplied by number of meters to calculate capacity. MillerCoors currently is served by one 12"meter, which has a hydraulic capacity of 143 units, which represents 0.2955% of total system capacity of 48,501 units. Miller's Revised Meter Charge Miller's share of the fixed cost of$6,563,159 is 0.2955% or$18,431.58 per year or $1,535.97 per month. -4- 107 COMMODITY CHARGE Water System Sales—FY 2009-10 and Miller's Share Based on Azusa Light & Water's monthly billing reports, the Water Utility sales during FY 2009-10 were 7,853,732 ccf. During this same period, Miller's consumption was 958,800 ccf. This represents 12.21%of total sales as shown in below table: Consumption in CCFs FY 2009-10 Miller, ccf(a) 958,800 Total Sales,ccf(6) 7,853,732 Miller's Share(c): 12.21% (a) From July 1,2009 thru June 30,2010. (b) Monthly Customer Information System billing report. Miller's Revised Commodity Charge Per CCF Miller's share of the variable cost of $13,385,653 is 12.21% or $1,634,388 per year based on consumption last fiscal year. By dividing the total projected cost for FY 2010-11 by consumption last fiscal year(958,800 ccf), the cost per ccf is calculated at $1.70 per ccf. Report Prepared by: Cary Kalscheuer Assistant to the Director of Utilities Azusa Light&Water 729 N. Azusa Avenue Azusa, CA 91702 Tel. (626) 812-5174 -5- 108 a • , T AZ USA .. r.ur a v.afro SCHEDULED ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: JULY 26, 2010 SUBJECT: APPROVAL OF RESOLUTION TO PARTICIPATE IN THE EXPANSION OF THE LOS ANGELES COUNTY RECYCLING MARKET DEVELOPMENT ZONE (RMDZ) RECOMMENDATION It is recommended that the Utility Board and City Council approve the attached resolution to have the City of Azusa included in the Los Angeles County Recycling Market Development Zone. B ACKGROUND In 1989, the State of California adopted AB 939 which requires that all cities and counties divert 50% of their solid waste from landfills by the year 2000. As part of California's overall plan to divert waste from landfills, the state recognized that it was important to have secondary markets for the recovered materials. To foster demand for glass, plastics, metal, paper, and other recyclable materials, the State adopted what is referred to as the Recycling Market Development Zone program or RMDZ program. This program provides technical assistance and low interest loans to businesses interested in making use of recyclable materials to create new products. This is an enterprise zone concept and for businesses to be eligible for RMDZ loans they must be located in a jurisdiction that is in a designated RMDZ. To provide RMDZ opportunities to Azusa businesses, the City Manager submitted a letter of interest to Los Angeles County back in November 2009, to allow Azusa to be considered in any future effort to expand the RMDZ administered by Los Angeles County. The Los Angeles • 10 LA County RMDZ July 26, 2010 Page 2 County RMDZ is one of 33 zones throughout the state and currently includes the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, Vernon, and all of the County unincorporated areas. Businesses located in the Los Angeles County RMDZ are eligible for technical assistance and low interest loans of up to $2 million. To qualify, businesses must submit applications to manufacture recycled-content products or implement manufacturing processes that make use of qualifying recyclable materials. Loans may be used to purchase equipment and real estate, working capital, and debt financing. Since the designation of Los Angeles County RMDZ, a total of 15 loans have been funded worth over$11.5 million. At this time, Los Angeles County is in the process of preparing an application to the State to have the existing RMDZ expanded. The City of Azusa has been invited to formalize its interest in participating along with the cities of Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier. Each interested city is required to adopt a Resolution of Support and submit a Letter of Intent to Participate to LA County RMDZ Administrators. Following submittal, the RMDZ Administrators will seek the approval by the LA County Board of Supervisors and file the expansion application with the State. The application requires a Negative Declaration that the expansion will have no adverse environmental impacts pursuant to the California Environmental Quality Act. As the Lead Agency on the expansion application, the Los Angeles County has prepared the Negative Declaration and it is attached for your reference. Due to the lengthy State approval process, it is not likely that Azusa will be eligible for RMDZ benefits until FY 2011-2012. Provided the expansion is approved by the State, an annual fee of $1500 will be charged to all RMDZ member cities and zone benefits will be marketed to member city businesses. An average loan takes about 90-days to review and approve, and requires a $300 application fee to be paid by the applicant. FISCAL IMPACT There is a $1,500 annual administration fee starting FY 2010-2011. Enough funds are available in AB 939 fee account to cover this amount. Prepared by: Cary A. Kalscheuer, Assistant to the Director of Utilities Liza Cawte, Sr. Administrative Technician Attachments: Resolution Negative Declaration Azusa's Letter of Interest Loan and Fund Disbursement Process 110 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL AND UTILITY BOARD OF THE CITY OF AZUSA, CALIFORNIA, SUPPORTING THE EXPANSION OF THE LOS ANGELES COUNTY RECYCLING MARKET DEVELOPMENT ZONE (RMDZ). WHEREAS, the California Public Resources Code Section 42010 provides for the establishment of the Recycling Market Development Zone (RMDZ) program throughout the State to provide incentives to stimulate development of post-consumer and secondary materials markets for recyclables; and WHEREAS, the Los Angeles County RMDZ includes the unincorporated areas of the County of Los Angeles and the Cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, and Vernon; and WHEREAS, cities and counties must meet a 50 percent reduction in landfill waste disposal as mandated in the California Integrated Waste Management Act; and WHEREAS, the Los Angeles County RMDZ is dedicated to establishing, sustaining and expanding recycling-based manufacturing businesses, which is essential for market development and to assist local jurisdictions to meeting the established landfill reduction goals; and WHEREAS, the City of Azusa wants existing and new recycling-based manufacturing businesses locating within the region to be eligible for the technical and financial incentives associated with the RMDZ program; and WHEREAS, the expansion of the Los Angeles County RMDZ is still necessary to facilitate local and regional planning, coordination, support of existing recycling- based manufacturing businesses, as well as attract private sector recycling business investments to the region; and WHEREAS, the current and proposed waste management practices and conditions are favorable to the development of post-consumer and secondary waste materials markets; and WHEREAS, the California Legislature has defined environmental justice as "the fair treatment of people of all races, cultures, and incomes with respect to the development, adoption, implementation, and enforcement of environmental laws, regulations, and policies" [Government Code section 65040.12(e)], and the Department of Resources Recycling and Recovery has determined that it will conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures the fair treatment of people of all races, 111 cultures, and income levels, including minority populations and low-income populations of the State; and WHEREAS, the County of Los Angeles, as Lead Agency under the California Environmental Quality Act, has prepared, or caused to be prepared, and adopted a Negative Declaration for this zone expansion project that finds that the project will not have a significant impact on the environment; and WHEREAS, the City of Azusa has reviewed and considered the information in the Negative Declaration adopted by the County of Los Angeles that finds that the zone expansion project will not have a significant impact on the environment. NOW, THEREFORE, the City Council and Utility Board of the City of Azusa resolve as follows: Section 1: Approves the submittal of a Recycling Market Development Zone expansion application to include the Cities of Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier. Section 2: Agrees to administer the RMDZ program in a manner that seeks to ensure the fair treatment of people of all races, cultures and incomes, including but not limited to soliciting public participation in all communities within the RMDZ. PASSED, ADOPTED and APPROVED this 26th day of July 2010. Joseph R. Rocha, Mayor ATTEST: Vera Mendoza, City Clerk 112 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the City Council/Utility Board of the City of Azusa at a regular meeting of the Azusa Utility Board on the 26th day of July, 2010. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Vera Mendoza, City Clerk 113 Pn,;ors co`M1rr COUNTY OF LOS ANGELES PUBLIC WORKS DEPARTMENT OF PUBLIC WORKS NEGATIVE DECLARATION FOR EXPANSION OF THE LOS ANGELES COUNTY RECYCLING MARKET DEVELOPMENT ZONE 114 COUNTY OF LOS ANGELES DEPARTMENT OF PUBLIC WORKS NEGATIVE DECLARATION FOR LOS ANGELES COUNTY RECYCLING MARKET DEVELOPMENT ZONE I Location and Brief Description The project is the expansion of the Los Angeles County Recycling Market Development Zone (RMDZ)to include the cities of Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier Currently, the Los Angeles County RMDZ encompasses all the unincorporated areas of Los Angeles County and the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance,and Vernon The RMDZ program is an economic and technical assistance program that includes a low interest loan, which assists targeted businesses located in the RMDZ. The businesses must manufacture products using recycled materials as a feedstock or process difficult to recycle materials, such as construction and demolition debris. In June 1994,the Board of Supervisors authorized an application to the California Integrated Waste Management Board for the establishment of the Los Angeles County RMDZ, which encompassed the unincorporated area of Florence- Firestone The following year, the RMDZ was expanded to include several member cities and the unincorporated area of Altadena. Expansions have been authorized several times since to include all the unincorporated areas of Los Angeles County and the current member cities. Since 1994, the RMDZ has assisted 20 companies and funded loans which totaled more than 12 million dollars. II Mitigation Measures Included in the Project to Avoid Potentially Significant Effects No significant effects are identified III Finding of No Significant Effect Based on the attached Initial Study and Attachment A — Discussion of Environmental Factors, it has been determined that the project will not have a significant effect on the environment. P\RMDZExpansion 2009-10\CEQA\ND Intro Doc 115 INITIAL STUDY OF ENVIRONMENTAL FACTORS 1. Project Title: Los Angeles County Recycling Market Development Zone (RMDZ) 2. Lead Agency Name and Address: County of Los Angeles Department of Public Works, Environmental Programs Division, 900 South Fremont Avenue, Alhambra, California 91803-1331 3. Contact Person and Phone Number: Mr Hossein Torabzadeh (626) 458-3564 4. Project Location: The unincorporated areas of Los Angeles County; current member cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate,Torrance, and Vernon, and proposed new member cities of Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier 5. Project Sponsor's Name and Address: County of Los Angeles Department of Public Works, 900 South Fremont Avenue, Alhambra, California 91803-1331 6. General Plan Designation: The Los Angeles County General Plan and the General Plans of the current member cities and the General Plans of the proposed new member cities of Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier 7. Zoning: The project area is zoned for community commercial, commercial manufacturing, commercial residential, industrial, low density residential, low/medium density residential, major commercial, medium density residential, public use, residential parking, and transportation corridor 8. Description of Project: The Project is the expansion of the Los Angeles County Recycling Market Development Zone as designated by the California Integrated Waste Management Board The RMDZ program is an economic and technical assistance program which includes a low interest loan program available to manufacturers within the RMDZ that make products from recycled materials Currently,the Los Angeles County RMDZ encompasses the unincorporated areas of Los Angeles County and the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, and Vernon The RMDZ seeks to expand the zone by including the cities of Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier 9. Surrounding Land Uses and Settings: A. Project Site — The project is located within the Los Angeles County RMDZ, which will encompasses all the unincorporated areas of the County and the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, Vernon, Azusa, Baldwin Park, 1 116 Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier For the most part, the area consists of single family residences, multi-family dwelling units, businesses, and commercial and industrial establishments. Some undeveloped land exists in the northern portions of the County in the areas known as the Antelope Valley and the Santa Clarita Valley B. Surrounding Properties — Los Angeles County RMDZ is surrounded by the Counties of Kern, Orange, San Bernardino, and Ventura Within the boundaries of the County of Los Angeles, separate RMDZs are administered by the cities of Long Beach, Los Angeles, and Santa Clarita. 10. Other agencies whose approval is required (and permits needed): California Department of Resources Recycling and Recovery; Los Angeles County Board of Supervisors, the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, Vernon, Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier. 2 117 ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED The environmental factors checked below would be potentially affected by this project, involving at least one impact that is a"Potentially Significant Impact"or"Potentially Significant Unless Mitigated,"as indicated by the checklist on the following pages. Aesthetics — Agriculture Resources _ Air Quality Biological Resources _ Cultural Resources — Geology/Soils _ Greenhouse Gas Emissions _ Hazards & Hazardous — Hydrology/Water Materials Quality Land Use/Planning _ Mineral Resources ____ Noise Population/Housing _ Public Services _ Recreation Transportation/Traffic Utilities/Service Systems ____ Mandatory Findings of Significance DETERMINATION: (To be completed by the Lead Agency) On the basis of this initial evaluation: X I find that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. _ I find that although the proposed project could have a significant effect on the environment,there will not be a significant effect in this case because revisions in the project have been made by or agreed to by the project proponent. A MITIGATED NEGATIVE DECLARATION will be prepared. I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL IMPACT REPORT is required. I find that the proposed project MAY have a potentially significant impact or potentially significant _ unless mitigated impact on the environment,but at least one effect a)has been adequately analyzed in an earlier document pursuant to applicable legal standards, and b) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets. An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. _ I find that although the proposed project would have a significant effect on the environment because all potentially significant effects(a) have been analyzed adequately in an earlier ENVIRONMENTAL IMPACT REPORT or NEGATIVE DECLARATION pursuant to applicable standards, and (b) have been avoided or mitigated pursuant to that earlier ENVIRONMENTAL IMPACT REPORT or NEGATIVE DECLARATION, including revisions or mitigation measures that are imposed upon the proposed project, nothing further is required. /�/s� -7 ,, ?— z� ---- . 5,//.3/s o l0 Signature Date County of Los Angeles Hossein Torabzadeh Department of Public Works Printed Name For PAPdpub\EP&A\EUIProjects\RM DZ Expansion\ND\1 b Initial Study.Doc 118 EVALUATION OF ENVIRONMENTAL IMPACTS 1 A brief explanation is required for all answers, except "No Impact" answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e.g., the project falls outside a fault rupture zone) A "No Impact" answer should be explained where it is based on project-specific factors as well as' general standards (e.g., the project will not expose sensitive receptors to pollutants based on a project-specific screening analysis) 2 All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project level, indirect as well as direct, and construction as well as operational impacts. 3 "Potential Significant Impact" is appropriate if an effect is significant or potentially significant, or if the lead agency lacks information to make a finding of insignificance If there are one or more "Potential Significant Impact" entries when the determination is made, an Environmental Impact Report (EIR) is required. 4 "Less Than Significant With Mitigation Incorporation" applies where the incorporation of mitigation measures has reduced an effect from "Potential Significant Impact" to a "Less Than Significant Impact." The lead agency must describe the mitigation measures and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section XVIII, "Earlier Analysis," may be cross-referenced) 5 Earlier analyses may be used where, pursuant to the tiering, program EIR or other California Environmental Quality Act process, an effect has been adequately analyzed in an earlier EIR or Negative Declaration Section 15063(c)(3)(D) Earlier analyses are discussed in Section XVIII at the end of the checklist. 6 Lead agencies are encouraged to incorporate into the checklist references, information sources for potential impacts (e.g., general plans and zoning ordinances) See the sample question below A source list should be attached and other sources used or individuals contacted should be cited in the discussion R\pdpub\EP&A\EUVProjects\RMDZ ExpansiunNID\Evaluaton of env Impt doc 1 119 ATTACHMENT A ENVIRONMENTAL CHECKLIST FORM LOS ANGELES COUNTY RECYCLING MARKET DEVELOPMENT ZONE The expansion of the Los Angeles County RMDZ will have no significant impact on the environment. This finding includes no significant impact on the air quality, traffic conditions, and land use impacts in the RMDZ program area The RMDZ program is an incentive program, which offers the possibility of financial, technical, and marketing assistance to businesses that undertake projects that will add market value to waste materials that would otherwise be disposed of in a landfill Businesses which operate in the Los Angeles County RMDZ must still meet the same zoning standards and obtain the same environmental permits and clearance as businesses that are not in the Los Angeles County RMDZ The Los Angeles County RMDZ is not relaxing any permitting or environmental regulations Projects that may qualify for the RMDZ program are activities or projects that would be permitted, regardless of the RMDZ program The adoption of this Negative Declaration does not alleviate the need to perform necessary CEQA review on future projects that receive RMDZ program assistance The Los Angeles County RMDZ has been in operation since July of 1994 without a significant negative environmental impact and in fact may have possible positive impacts on the environment One of the primary goals of the program is to assist businesses that are increasing the amount of waste diverted from area landfills To this end, the program is actually creating a positive environmental impact by diverting waste that would normally be disposed of in a landfill and instead utilizing it for a beneficial use The expansion of the Los Angeles County RMDZ will not have significant land use impacts The RMDZ program does not supersede any current land use policies or regulations Therefore, it will be consistent with existing zoning, plans, and other applicable land use controls. Projects that apply for assistance through the RMDZ are required to be in compliance with all land use policies and regulations in order to qualify for assistance ,.."E" $ CCW,.. C C w� 4r� . ! s./I A t U asa2.1= a °in E SinEXau)E z I. AESTHETICS - Would the project: a) Have a substantial adverse effect on a scenic vista? D EIEI Scenic vistas may generally be characterized as a view that provides visual access to a large geographic area or provides visual access to a particular object, scene setting or feature of interest. The proposed project consists of expanding the Los Angeles County Recycling Market Development Zone (RMDZ). The RMDZ is an economic and technical assistance program which assists manufacturers and processors within the RMDZ The expanded Los Angeles County RMDZ will encompass the unincorporated areas of Los Angeles County and the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, Vernon, Azusa, Baldwin Park, Covina, Culver City El Segundo. Huntington Park, Monrovia, Santa Fe Springs, and Whittier. The proposed project is not within proximity of any scenic vistas and is consistent with the existing land use. Therefore, the proposed project would not have a 1 of 17 120 g C C c m C U F Y V„„.Y V 2.c' .en 5. cmwE cx d(n_J(n_�Jfn.� z substantial adverse effect on a scenic vista. There will be no impact. b) Substantially damage scenic resources, including, but not limited to, trees, rock 0 0 n outcroppings, and historic buildings within a State scenic highway? The California Department of Transportation (Caltrans) designates roadways that provide scenic views as official Scenic Highways or Corridors. The project is not located near a designated State scenic highway, nor is it adjacent to local freeways or roadways that are designated or eligible scenic roadways. The proposed project would not damage scenic resources. No construction or development is proposed. Therefore, there will be no impact. c) Substantially degrade the existing visual character or quality of the site and its 0 0 0 surroundings? The proposed project would not degrade nor change the visual quality throughout the Los Angeles County RMDZ. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. Therefore, the proposed project has no impact on visual character or quality of the site and its surroundings. d) Create a new source of substantial light or glare which would adversely affect day or 0 0 nighttime views in the area? The proposed project would not create any new sources of light or glare. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. This will not provide a new source of substantial light or glare which would adversely affect day or nighttime views in the area. Therefore, there will be no impact. II. AGRICULTURE AND FOREST RESOURCES - In determining whether impacts to agricultural resources are significant environmental effects, lead agencies may refer to the California Agricultural Land Evaluation and Site Assessment Model (1997) prepared by the California Department of Conservation as an optional model to use in assessing impacts on agriculture and farmland. In determining whether impacts to forest resources, including timberland, are significant environmental effects, lead agencies may refer to information compiled by the California Department of Forestry and Fire Protection regarding the state's inventory of forest land, including the Forest and Range Assessment Project and the Forest Legacy Assessment project; and forest carbon measurement methodology provided in Forest Protocols adopted by the California Air Resources Board. Would the project: a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance n ❑ n (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to nonagricultural use? The project location is not used for agricultural purposes or as a farmland Therefore, the project will have no impact on farmland. b) Conflict with existing zoning for agricultural use or a Williamson Act contract? 111n The proposed project will not conflict with any zoning for agricultural use and will have no impact on a Williamson Act contract. The only Williamson Act parcels in Los Angeles County are on Santa Catalina Island. There will be no impact. c) Conflict with existing zoning for or cause rezoning of, forest land (as defined in Public Q L Resources Code section 12220(g)), timberland (as defined by Public Resources Code 2 of 17 121 llpp E yyFIE WW }��t C w V C(p U U g`u ainE.a- EV3iEE 0 section 4526), or timberland zoned Timberland Production (as defined by Government Code section 51104(g))? The proposed project will not conflict with existing zoning or cause rezoning of forest land, timber land or timberland zoned Timberland Production. The proposed project consists of expanding the Los Angeles County RMDZ. The RMDZ is an economic and technical assistance program which assists manufacturers and processors within the RMDZ Therefore, the project will not have an impact. d) Result in the loss of forest land or conversion of forest land to non-forest use? E E The proposed project will not result in the loss of forest land or the conversion of forest land to non-forest use There will be no impact. e) Involve other changes in the existing environment which, due to their location or nature, ❑ _ could result in conversion of Farmland to nonagricultural use or conversion of forest land to non-forest use? No construction or change in use is proposed and the proposed project would not involve any changes in the existing environment that could result in the conversion of farmland to nonagricultural use. There will be no impact. III. AIR QUALITY Where available, the significance criteria established by the applicable air quality management or air pollution control district may be relied upon to make the following determinations. Would the project: a) Conflict with or obstruct implementation of the applicable air quality plan? ] [J L The proposed project is located in the South Coast Air Basin, which is under the jurisdiction of the South Coast Air Quality Management District (SCAQMD). The South Coast Air Basin is classified as an area of non-attainment for Particulate Matter(PM10 and PM2,5), and Ozone. The governing air quality management plan is the 2007 Air Quality Management Plan. Public Works currently complies with emission reduction measures enforced by the SCAQMD. The proposed project would not conflict with or obstruct implementation of the applicable air quality plan No construction or development is proposed, and any construction or development would be subject to environmental review. There will be no impact. b) Violate any air quality standard or contribute substantially to an existing or projected air C quality violation? The proposed project would not violate any air quality standards or contribute to an existing or projected air quality violation No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. No construction or development is proposed. Any construction or development would be subject to environmental review. There will be no impact. c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project ❑ o n region is nonattainment under an applicable Federal or State ambient air quality standard (including releasing emissions which exceed quantitative thresholds for zone precursors)? The proposed project would not result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable Federal or State ambient air quality standard. There will be no impact. d) Expose sensitive receptors to substantial pollutant concentrations? C 3of17 122 C m m m G Tj (07. W m V V ,Ot ro] Of CGviC :�.W C0. E Jr0Ee_JU5. z° The proposed project consists of expanding the Los Angeles County RMDZ. The RMDZ is an economic and technical assistance program which assists manufacturers and processors within the RMDZ. The proposed project would not expose sensitive receptors to pollutant concentrations, Therefore, there will be no impact. e) Create objectionable odors affecting a substantial number of people? LEEN The proposed project would not create objectionable odors. Any RMDZ activity that may create objectionable odors would be subject to environmental review. There will be no impact. IV BIOLOGICAL RESOURCES - Would the project: a) Have a substantial adverse effect, either directly or through habitat modifications, on any ❑ C n species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? The proposed project would not have an adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive. or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S Fish and Wildlife Service, No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. b) Have a substantial adverse effect on any riparian habitat or other sensitive natural 0 0 • community identified in local or regional plans, policies, regulations or by the California Department of Fish and Game or U S Fish and Wildlife Service? The proposed project would not have an adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, and regulations or by the California Department of Fish and Game or U S. Fish and Wildlife Service. The Los Angeles County RMDZ substantially consists of densely developed urban areas. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review There will be no impact. c) Have a substantial adverse effect on Federally protected wetlands as defined by Section 000z 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? The proposed project would not have an adverse effect on any Federally protected wetlands through direct removal, filling, hydrological interruption, or other means. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. d) Interfere substantially with the movement of any native resident, migratory fish, or wildlife species;or 0 0 0 with established native resident or migratory wildlife corridors; or impede the use of native wildlife nursery sites? The proposed project would not interfere with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. e) Conflict with any local policies or ordinances protecting biological resources, such as a 0 - 0 4 of 17 123 fig-g15Pri CF�� m E E ocE.�cga�E, a ig_Ju_ _.J v_ z tree preservation policy or ordinance? The proposed project would not conflict with any local policies or ordinances protecting biological resources. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. f) Conflict with the provisions of an adopted Habitat Conservation Plan; Natural Community DOOM Conservation Plan; or other approved local, regional, or State habitat conservation plan? The proposed project would not conflict with the provisions of any applicable Habitat Conservation Plan, Natural Community Conservation Plan, or other applicable local, regional, or state habitat conservation plan No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. V CULTURAL RESOURCES - Would the project: a) Cause a substantial adverse change in the significance of a historical resource as defined ❑ n ❑ in §15064 5? The proposed project would not cause an adverse change in the significance of a historical resource. No physical demolition, destruction. relocation, or alteration of any historical resource or its immediate surroundings is proposed. There will be no impact. b) Cause a substantial adverse change in the significance of an archaeological resource ❑ ❑ ❑ pursuant to§15064 5? The proposed project would not cause an adverse change in the significance of an archaeological resource, directly or indirectly destroy a unique paleontological resource or site or unique geologic feature, or disturb any human remains No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. c) Directly or indirectly destroy a unique paleontological resource or site or unique geologic ❑ ❑ n feature? See V. b) above. d) Disturb any human remains, including those interred outside of formal cemeteries? 01110121 See V. b) above. VI. GEOLOGY AND SOILS - Would the project: a) Expose people or structures to potential substantial adverse effects, including the risk of loss, injury. or death involving: i) Rupture of a known earthquake fault,as delineated on the most recent Aiquist-Priolo Earthquake n ❑ n Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence of a know fault? Refer to Division of Mines and Geology Special Publication 42. The proposed project would not expose people or structures to potential adverse effects involving rupture of a known earthquake fault. No construction or development is proposed, and any construction or development resulting from RMDZ 5of17 124 {C� �C CSC tCp d'=6 s'C W OE 'C U aE yv,E m.P� activities would be subject to environmental review.There will be no impact. ii) Strong seismic ground shaking? C O E The proposed project would not expose people or structures to potential adverse effects involving strong seismic ground shaking, No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. iii) Seismic-related ground failure, including liquefaction? Li El El The proposed project would not expose people or structures to potential adverse effects involving seismic-related ground failure, including liquefaction. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. iv) Landslides? The proposed project would not expose people or structures to potential adverse effects involving landslides. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. b) Result in substantial soil erosion or the loss of topsoil? Li L The proposed project would not result in soil erosion or loss of topsoil. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. c) Be located on a geologic unit or soil that is unstable. or that would become unstable as a o L result of the project, and potentially result in on- or off-site landslide, lateral spreading, subsidence, liquefaction, or collapse? The proposed project would not result in on- or off-site landslide, lateral spreading, • subsidence, liquefaction or collapse due to soil instability. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. d) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), 0 E' EN creating substantial risks to life or property? The proposed project would not create risks to life or property due to expansive soil. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. e) Have soils incapable of adequately supporting the use of septic tanks or alternative waste E 0 water disposal systems where sewers are not available for the disposal of waste water? The proposed project would not generate waste water or involve the use of septic tanks or alternative waste water disposal systems. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. 6 of 17 125 C C rL"'S C ry C 0 _w _ y E' 'C 'E wdy�' d e iz E JUJ J VI E 2 VII. GREENHOUSE GAS EMISSIONS - Would the project: a) Generate greenhouse gas emissions, either directly or indirectly, that may have a ❑ ❑ significant impact on the environment? On September 27. 2006, Assembly Bill 32 (AB 32), the California Global Warming Solutions Act of 2006, was enacted by the State of California in order to address global climate change by reducing greenhouse gases. Assembly Bill 32 (AB 32) limits California's Greenhouse Gases (GHG) emissions for 2020 based on 1990 emission levels and directs California Air Resources Board to develop significance thresholds. Gases known to contribute to the Greenhouse Effect are carbon dioxide (CO2), methane (CH4). ozone, nitrous oxide (N2O), water vapor. hydrofluorocarbons, chlorofluorocarbons, and sulfur hexafluoride. According to the report"California's Greenhouse Gas Emissions and Sinks: 1990 to 2004", the principal greenhouse gas in California is carbon dioxide accounting for over 80 percent of the GHG emissions. The proposed project consists of expanding the Los Angeles County RMDZ No construction or development is proposed. The RMDZ is an incentive program, which offers the possibility of financial, technical and marketing assistance to businesses that undertake projects that will add market value.to waste materials that would otherwise be disposed of in a landfill. Any construction or development resulting from RMDZ activities would be subject to environmental review. The proposed project would not introduce new sources of greenhouse gas emitters, nor would the proposed project create a new use that would attract vehicle trips that otherwise would not occur. The proposed project will not generate greenhouse gas emission that may have a significant impact on the environment. Therefore, there is no impact. b) Conflict with an applicable plan, policy or regulation adopted for the purpose of reducing n ❑ EJ the emissions of greenhouse gases? The proposed project will not conflict with any applicable plans, polices or regulations adopted for the purpose of reducing the emissions of greenhouse gases. No construction or development is proposed. Any construction or development would be subject to environmental review. Therefore; the proposed project will have no impact. VIII. HAZARDS AND HAZARDOUS MATERIALS - Would the project: a) Create a significant hazard to the public or the environment through the routine transport, ❑ ❑ 11 use,or disposal of hazardous materials? The proposed project would not involve the routine transport, use, or disposal of hazardous materials. Any RMDZ projects which require the routine transport, use or disposal of hazardous materials would be subject to environmental review. There will be no impact. b) Create a significant hazard to the public or the environment through reasonably foreseeable ❑ ❑ ❑ upset and accident conditions involving the release of hazardous materials into the environment? The proposed project would not create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment or emit hazardous emissions or handle hazardous materials, substances or wastes within one-quarter mile of an existing or proposed school. Any RMDZ project that may release hazardous materials or emit hazardous emissions or 7of17 126 L c c g c c tctqq (p 5 t0 o O L o Q V U t v.� U E d C [C 0 0 tU Q;o C tC oa>ny.a'F3c'= m.cn°' Q E c` n E z handle hazardous materials, substances or wastes within one quarter mile of an existing or proposed school would be subject to environmental review. There will be no impact. c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? See VIII b) above. d) Be located on a site which is included on a list of hazardous materials sites compiled — n pursuant to Government Code, Section 65962.5, and, as a result, would it create a significant hazard to the public or the environment? The proposed project would not be located on a site which was indluded a list of hazardous materials shites complied pursuant to Government Code, Section 65962.5. In addition, the proposed ptoject woul not create a significant hazard to the public or the environment. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. e) For a project located within an airport land use plan or. where such a plan has not been f adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? Los Angeles County RMDZ currently encompasses all the unincorporated areas of Los Angeles County as well as the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, and Vernon. The proposed expanded RMDZ will also include the cities of Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier. Several small public airports and several large commercial airports are in and near these areas. The RMDZ would not result in a safety hazard for people residing or working in the project area. No construction or development is proposed. Any construction or development would be subject to environmental review. There will be no impact. f) For a project within the vicinity of a private airstrip. would the project result in a safety fIE hazard for people residing or working in the project area? Los Angeles County RMDZ currently encompasses all the unincorporated areas of Los Angeles County as well as the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, and Vernon The proposed expanded RMDZ will also include the cities of Azusa, Baldwin Park, Covina, Culver City El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier. Several small private airports and several large commercial airports are in and near these areas. No construction or development is proposed Any construction or development would be subject to environmental review. The RMDZ would not result in a safety hazard for people residing or working in the project area. There will be no impact. g) Impair implementation of or physically interfere with an adopted emergency response plan — _ X or emergency evacuation plan? The expansion of the Los Angeles County RMDZ would not impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan. No construction or development is proposed. Any construction or development would be subject to environmental review. There will be no impact. h) Expose people or structures to a significant risk of loss, injury, or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? 8 of 17 127 Cg C c C U To"W W W OL• • C dN NC Q N C k m0E0;:.W��u E 6 Z The proposed project would not expose people or structures to a significant risk of loss, injury or death involving wildland fires. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. IX. HYDROLOGY AND WATER QUALITY = Would the project: a) Violate any water quality standards or waste discharge requirements? D El The proposed project would not violate any water quality standards or waste discharge requirements. No construction or development is proposed and any RMDZ projects would be subject to environmental review. There will be no impact. b) Substantially deplete groundwater supplies or interfere substantially with groundwater n n recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g.,the production rate of preexisting nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? The proposed project would not deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level, since the project would not involve the use of any substantial amounts of water. Any RMDZ projects that would require water in substantial amounts would be subject to environmental review. There will be no impact. c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of n n ❑ the course of a stream or river,in a manner which would result in substantial erosion or siltation on-or off-site? The proposed project would not result in erosion or siltation on- or off-site since the project would not include activities that would change existing drainage patterns. Any RMDZ project that required construction or development would be subject to environmental review. There will be no impact. d) Substantially alter the existing drainage pattern of the site or area, including through the [ U alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding on-or off-site? The proposed project would not alter the existing drainage pattern or increase the rate of runoff in a manner which would result in flooding on- or off-site on any property. Any RMDZ project that would require construction or development would be subject to environmental review. There will be no impact. e) Create or contribute runoff water which would exceed the capacity of existing or planned [mom stormwater drainage systems or provide substantial additional sources of polluted runoff? The proposed project would not create or contribute runoff water. which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff No construction or development is proposed, and any RMDZ project that may impact stormwater or runoff would be subject to environmental review. There will be no impact. f) Otherwise substantially degrade water quality? 0 0 U The proposed project would not otherwise degrade water quality. No construction or development is proposed, and any RMDZ project that may degrade water quality would be subject to environmental review. There will be no impact. 9of17 128 i&8 okem .m-maNg,4."N ma aoE'23m__Jv0E z g) Place housing within a 100-year flood hazard area as mapped on a Federal Flood Hazard ❑ D C Boundary or Flood Insurance Rate Map or other flood hazard delineation map? The proposed project does not involve any construction or placement of any housing within a 100-year flood hazard area. No impact would occur. h) Place within a 100-year flood hazard area structures which would impede or redirect flood ❑ ❑ ❑ flows? The proposed project does not involve any construction or placement of structures that would impede or redirect flood flows. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review There will be no impact. i) Expose people or structures to a significant risk of loss, injuryor death involving flooding. ❑ ❑ ❑ including flooding as a result of the failure of a levee or dam? The proposed project would not include activities that could expose people or structures to a significant risk of loss, injury. or death involving flooding. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review There will be no impact. j) Would the project cause or expose people and structures to inundation by seiche, ❑ ❑ ❑ tsunami, or mudflow? The proposed project would not include activities that could expose people or structures to inundation by seiche, tsunami, or mudflow No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. X. LAND USE AND PLANNING - Would the project: a) Physically divide an established community? ❑ El ❑ The proposed project would not physically divide an established community. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. b) Conflict with any applicable land use plan, policy, or regulation of any agency with n - n jurisdiction over the project (including, but not limited to, the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? The proposed project would not conflict with any applicable land use plan, policy or regulation adopted for the purpose of avoiding or mitigating an environmental effect. No construction or change in use is proposed, and any RMDZ project would be subject to environmental review. There will be no impact. c) Conflict with any applicable habitat conservation plan or natural community conservation n n p plan? The proposed project would not conflict with any applicable habitat conservation plan or natural community conservation plan. No construction or change in use is proposed, and any RMDZ project would be subject to environmental review. There will be no impact 10 of 17 129 XI. MINERAL RESOURCES - Would the project: a) Result in the loss of availability of a known mineral resource that would be of value to the 1=100Z region and the residents of the State? The proposed project would not result in the loss of availability of a known mineral resource that would be of value to the region or the residents of the state. No construction or development is proposed. Any construction or development would be subject to environmental review. There will be no impact. b) Result in the loss of availability of a locally-important mineral resource recovery site El [] f delineated on a local general plan,specific plan,or other land use plan? The proposed project would not result In the loss of availability of a locally important mineral resource recovery site delineated on a local general plan,specific plan,or other land use plan No construction or development is proposed. Any construction or development would be subject to environmental review There will be no impact. XII. NOISE - Would the project result in: a) Exposure of persons to or generation of noise levels in excess of standards established in E p o the local general plan or ordinance or applicable standards of other agencies? The proposed project would not expose persons to or generate noise levels in excess of standards established in the County general plan, the County noise ordinance, or applicable standards of other agencies. No construction or change in use is proposed, and any RMDZ project that may expose persons to or generation of such noise levels would be subject to environmental review.There will be no impact. b) Exposure of persons to or generation of excessive groundborne vibration or groundbome D E E noise levels? The proposed project would not expose persons to or generate excessive groundbome vibration or groundbome noise levels. No construction or change in use is proposed,and any RMDZ project that may expose persons to or generate excessive groundborne vibration would be subject to environmental review.There will be no impact. c) A substantial permanent increase in ambient noise levels in the project vicinity above D ❑ E levels existing without the project? The proposed project would not result in permanent increase in ambient noise levels in the project vicinity above levels existing without the project. Any RMDZ project that may lead to increase in the ambient noise levels would be subject to environmental review.There will be no impact. d) A substantial temporary or periodic increase in ambient noise levels in the project vicinity [J ❑ ❑ above levels existing without the project? The proposed project would not result in a substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project. Any RMDZ project that may lead to increase in the ambient noise levels would be subject to environmental review.There will be no impact. e) For a project located within an airport land use plan or,where such a plan has not been ODOZ adopted,within two miles of a public airport or public use airport,would the project expose people residing or working in the project area to excessive noise levels? 11 of 17 130 {4 U @Co." Qr U CO .orw E 4Y C N Cf0p;N E fD — 0.� C1 E d r EE O Gn._ JU) U) _ z Los Angeles County RMDZ currently encompasses the unincorporated areas of the County along with the cities of Burbank, Carson, Commerce, Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, and Vernon. The proposed expanded zone will also include the cities of Azusa, Baldwin Park, Covina, Culver City El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whither. There are several public and commercial airports in the area. Any RMDZ project that may expose people to excessive noise levels would be subject to environmental review. There will be no impact. f) For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to excessive noise levels? Los Angeles County RMDZ currently encompasses the unincorporated areas of the County along with the cities of Burbank, Carson, Commerce. Compton, El Monte, Glendale, Inglewood, Palmdale, South Gate, Torrance, and Vernon The proposed expanded zone will also include the cities of Azusa, Baldwin Park, Covina, Culver City, El Segundo, Huntington Park, Monrovia, Santa Fe Springs, and Whittier. There are private airstrips in the area Any RMDZ project that may expose people to excessive noise levels would be subject to environmental review. There will be no impact. XIII. POPULATION AND HOUSING - Would the project: a) induce substantial population growth in an area, either directly (e.g , by proposing new [" homes and businesses) or indirectly (e.g.. through extension of roads or other infrastructure)? The proposed project would not induce substantial population growth, either directly or indirectly. No construction or development is proposed and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. b) Displace substantial numbers of existing housing, necessitating the construction of U replacement housing elsewhere? The proposed project would not displace existing housing No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review There will be no impact. c) Displace substantial numbers of people, necessitating the construction of replacement I J housing elsewhere? The proposed project would not displace substantial numbers of people. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review, There will be no impact. XIV PUBLIC SERVICES a) Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for any of the public services. i) Fire protection? i I I X 12of17 131. 5.6101 'c�L=±cTim�r"cm E The proposed project would not result in the provision of or need for any new or physically altered fire protection facilities. No construction or change in use is proposed,and any RMDZ project which may require additional public facilities would be subject to environmental review.There will be no impact. ii) Police protection? ❑ ❑ ❑ El The proposed project would not result in the provision of or need for any new or physically altered police protection or other public facilities. No construction or change in use is proposed, and any RMDZ project which may require additional public facilities would be subject to environmental review.There will be no impact. iii) Schools? ODD e. The proposed project would not result in the provision of or need for any new or physically altered school facilities. No construction or change in use is proposed, and any RMDZ project which may require additional public facilities would be subject to environmental review.There will be no impact. rv) Parks? ❑ ❑ ❑ The proposed project would not result in the provision of or need for any new or physically altered park facilities. No construction or change in use is proposed,and any RMDZ project which may require additional public facilities would be subject to environmental review.There will be no impact. v) Other public facilities? ❑ ❑ ❑ El The proposed project would not result in the provision of or need for any new or physically altered public facilities. No construction or change in use is proposed,and any RMDZ project which may require additional public facilities would be subject to environmental review.There will be no impact. XV RECREATION- a) Would the project increase the use of existing neighborhood and regional parks or other ❑ ❑ ❑ El recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? The proposed project would not increase the use of existing parks or other recreational facilities.No construction or development is proposed. Any construction or development would be subject to environmental review There will be no impact. b) Does the project include recreational facilities or require the construction or expansion of ❑ ❑ ❑ recreational facilities which might have an adverse physical effect on the environment? The proposed project does not include recreational facilities or require the construction or expansion of any recreational facilities.There will be no impact. XVI TRANSPORTATION/TRAFFIC - Would the project: a) Conflict with an applicable plan, ordinance or policy establishing measures of ❑ ❑ ❑ effectiveness for the performance of the circulation system,taking into account all modes of transportation including mass transit and non-motorized travel and relevant components 13 of 17 132 GC C ,5 C LC [4 [6 ID (/ C fb O Q,fl N Q.. N „,a O ave E z of the circulation system, including but not limited to intersections, streets, highways and freeways, pedestrian and bicycle paths, and mass transit? The proposed project would not result in a substantial increase in either the number of vehicle trips, the volume to capacity ratio on roads, or congestion at intersections. Any RMDZ project that may result in increased traffic loads would be subject to environmental review. There will be no impact. b) Conflict with an applicable congestion management program, including, but not limited to I I level of service standards and travel demand measures, or other standards established by the county congestion management agency for designated roads or highways? The proposed project would not exceed, either individually or cumulatively, a level of service standard established by the County Congestion Management Agency for designated roads or highways. The County's Congestion Management Program (CMP) applies to projects that have the potential to generate a minimum of 50 vehicle trips through a CMP intersection. The proposed project does not have the potential to generate 50 or more trips through a CMP intersection No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. c) Result in a change in air traffic patterns, including either an increase in traffic levels or a j change in location that results in substantial safety risks? The proposed project would not result in a change in air traffic patterns. No construction or development is proposed Any construction or development would be subject to environmental review There will be no impact. d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g . farm equipment)? The proposed project would not substantially increase hazards due to a design feature or incompatible uses. Any construction or development resulting from an RMDZ project that may result in such hazards would be subject to environmental review. There will be no impact. e) Result in inadequate emergency access? iz n The proposed project would not result in inadequate emergency access since no changes in emergency access would occur as a result of the project. Any construction or development resulting from an RMDZ project that may result in inadequate emergency access would be subject to environmental review. There will be no impact. f) Conflict with adopted policies, plans, or programs regarding public transit, bicycle, or x" �' Li pedestrian facilities, or otherwise decrease the performance or safety of such facilities? The proposed project would not conflict with any adopted policies, plans, or programs regarding public transit, bicycle, or pedestrian facilities, or otherwise decrease the performance or safety of such facilities. No construction or development is proposed Any construction or development would be subject to environmental review. There will be no impact. XVII, UTILITIES AND SERVICE SYSTEMS - Would the project: a) Exceed wastewater treatment requirements of then applicable Regional Water Quality Control Board? -- 14 of 17 133 The proposed project would not exceed wastewater treatment requirements of the applicable Regional Water Quality Control Board since the project would not result in contamination of. or increase in, discharge of wastewater. No construction or development is proposed,and any RMDZ project that may exceed wastewater treatment requirements would be subject to environmental review.There will be no impact. b) Require or result in the construction of new water or wastewater treatment facilities or E f expansion of existing facilities, the construction of which could cause significant environmental effects? The proposed project would not require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities. Any RMDZ project that may cause increased water usage or discharge of wastewater would be subject to environmental review.There will be no impact. c) Require or result in the construction of new storm water drainage facilities or expansion of ❑ existing facilities,the construction of which could cause significant environmental effects? The proposed project would not result in the construction of new storm water drainage facilities or expansion of existing facilities. The proposed project would not increase any storm water runoff that would affect existing or planned storm water drainage systems. No construction or development is proposed, and any RMDZ project that may require the construction or expansion of existing facilities would be subject to environmental review. There will be no impact. d) Have sufficient water supplies available to serve the project from existing entitlements and ❑ E resources,or are new or expanded entitlements needed? The proposed project would not necessitate any water supplies to serve the project from any existing entitlements and resources, nor necessitate any new or expanded entitlements. No construction or development is proposed, and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. e) Result in a determination by the wastewater treatment provider which serves or may serve El ❑ E the project that it has adequate capacity to serve the project's projected demand in addition to the provider's existing commitments? The proposed project would not result in any capacity determinations made by any • wastewater treatment provider since the project would not increase any waste water discharges. Any RMDZ project that may cause increased demand would be subject to environmental review.There will be no impact. f) Be served by a landfill with sufficient permitted capacity to accommodate the project's solid waste disposal needs? The proposed project would be served by landfills with sufficient permitted capacity to accommodate the project's solid waste disposal needs. No construction or development is proposed,and any construction or development resulting from RMDZ activities would be subject to environmental review.There will be no impact. g) Comply with Federal,State,and local statutes and regulations related to solid waste? E D O The proposed project would comply with Federal,State,and local statutes and regulations related to solid waste. No construction or development is proposed.and any construction or development resulting from RMDZ activities would be subject to environmental review. There will be no impact. 15 of 17 134- • C CCS.WC T! O C aa:COCm Q 4 C1C'a �dC p a°ioE�yE� yE z XVIII MANDATORY FINDINGS OF SIGNIFICANCE a) Does the project have the potential to degrade the quality of the environment, substantially 1=1 E reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community. reduce the number or restrict the range of a rare or endangered plant or animal, or eliminate important examples of the major periods of California history or prehistory? The proposed project would not degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal, or eliminate important examples of the major periods of California history or prehistory. b) Does the project have impacts that are individually limited, but cumulatively considerable? fl E ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects.) The proposed project would not have impacts that are individually limited but cumulatively considerable. c) Does the project have environmental effects which will cause substantial adverse effects on fl n human beings,either directly or indirectly? The proposed project would not have environmental effects, which will cause substantial adverse effects on human beings, either directly or indirectly. No construction is proposed, and any RMDZ project that could potentially have substantial adverse effects would be subject to environmental review, 16 of 17 135 XVIII. DISCUSSION OF WAYS TO MITIGATE SIGNIFICANT EFFECTS Section 15041 (a) of the State CEQA guidelines states that a lead agency for a project has authority to require changes in any or all activities involved in the project in order to lessen or avoid significant effects on the environment. No significant effects have been identified. However, the following standard best management practices will be in place for construction EVALUATION OF ENVIRONMENTAL IMPACTS 1) A brief explanation is required for all answers except"No Impact" answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question. A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e g., the project falls outside a fault rupture zone). A "No Impact"answer should be explained where it is based on project-specific factors as well as general standards (e.g., the project will not expose sensitive receptors to pollutants based on a project-specific screening analysis) 2) All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project level, indirect as well as direct, and construction as well as operational impacts. 3) "Potential Significant Impact" is appropriate if an effect is significant or potentially significant, or if the lead agency lacks information to make a finding of insignificance. If there are one or more "Potential Significant Impact"entries when the determination is made, an Environmental Impact Report (EIR) is required. 4) "Less Than Significant with Mitigation Incorporation" applies where the incorporation of mitigation measures has reduced an effect from"Potential Significant Impact" to a "Less Than Significant Impact." The lead agency must describe the mitigation measures and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section XVIII, "Earlier Analysis,"may be cross-referenced). 5) Earlier analyses may be used where, pursuant to the tiering, program EIR or other California Environmental Quality Act process, an effect has been adequately analyzed in an earlier EIR or Negative Declaration Section 15063(c) (3) (D). Earlier analyses are discussed in Section XVIII at the end of the checklist. 6) Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e g., general plans, zoning ordinances) See the sample question below A source list should be attached and other sources used or individuals contacted should be cited in the discussion PAPDPUBIEP&A\EUlPROJECTSIRMDZ EXPANSION\ND\CHECKLIST AND DISCUSSION.DOCX 17 of 17 136 l'1 G , ItPUBLICYraNKS+a� " / Recycling Market Development Zone Expansion Project ty .,F 4-....- / - ----; -'''"7---tfi, 3 '--...1 , f . re Virlg)Iii ''—' .. —________1.- I j—J_,_____,>--- ,fir».,s f� I --. 1 .✓•. or I 7 -.tom" - ` ,moi 10--..<- L1 '^� �` /1-.% a . . t -" • • _,1,� ° ' .t - Yrs -... .�..__.._\_.J.._ i • * .-`0, " l ..o '"'"` 4 # : Cities to be included. r ',yr -Azusa • \ L1 i ••,..s. '` - Baldwin Park -Covina -Culver City i N. ! - EI Segundo L� ``---± • i - Huntington _ 'y - Monrovia _ y -Santa Fe Springs �"'':'` { -Whittier t - c Notes: 137 p�O F 9<IFoc The Canyon City—Gateway to the American Dream Francis M.Delach,City Manager 213 E.Foothill Blvd.,Azusa, CA 91702—(626)812-5238 1'delach6Pci.azusa.ca.us November 30, 2009 Mr. Pat Proano, Assistant Deputy Director Environmental Programs Division, Annex 3rd Floor P.O. Box 1460 Alhambra, CA 91802-1460 SUBJECT: LETTER OF INTEREST REGARDING THE LOS ANGELES COUNTY RECYCLING MARKET DEVELOPMENT ZONE Dear Mr. Proano: In response to your letter of September 17, 2009, City of Azusa staff met with your staff today regarding the County's desire to expand its Recycling Market Development Zone (RMDZ) through an application to the California Integrated Waste Management Board (CIWMB). On behalf of the City of Azusa, I would like to express our interest in having the City of Azusa included in your application to the State so that Azusa may become part of the Los Angeles County RMDZ. The City is familiar with the State's RMDZ program and believes that there may be some businesses in Azusa that could benefit from low interest loans and technical assistance that would be available through the County's program. We believe that efforts to stimulate demand for post-consumer recyclable feedstock are worthy goals for public agencies to pursue. If there are local businesses that come forward with ideas and proposals to make use of such materials, the City of Azusa would like to be in a position to help them. Such innovative efforts could also lead to added job opportunities for our community in addition to stronger markets for recyclable materials. It is our understanding that this initial letter is to be followed by a more formal Resolution adopted by City Council. Please feel free to work with Mr, Cary Kalscheuer, Assistant to the Director of Utilities, to gather the additional information you need from Azusa to satisfy your application to the State. Mr. Kalscheuer can be reached at (626) 812- 5174. Sincerely, /P'/1/14 s M. Delach City Manager cc: Hossein Torabzadeh,Associate Civil Engineer David Coscia, Recycling Market Development Zone Administrator Conal McNamara,Assistant Economic&Community Development Director Cary Kalscheuer, Assistant to the Director of Utilities 138 STATE OF CALIFORNIA CALIFORNIA INTEGRATED WASTE Revised August 2009 MANAGEMENT BOARD RECYCLING MARKET DEVELOPMENT ZONE LOAN PROGRAM Loan and Fund Disbursement Process PROGRAM OVERVIEW The Recycling Market Development Zone Loan Program provides direct loans to businesses that use non- hazardous solid waste to manufacture new products. APPLICATION PROCESS Prior to submittal of an application, a potential applicant should first contact the loan program staff to receive an overview of the loan program and discuss the proposed loan eligibility and other loan requirements. Step 1: An applicant must submit one (1)complete original Recycling Market Development Zone Loan application package and supporting documents with original signatures. The application must be accompanied by a nonrefundable application fee of$300. Step 2: Within 10 business days of application submittal, staff will complete a preliminary review to determine application completeness and eligibility and send a letter stating one of the following: a) That the applicant is eligible for a loan, the application is complete, and will be evaluated by the Board staff; or b) That the application is incomplete, or that the applicant is ineligible for a loan, and specify the steps, if any, which the applicant may take to correct identified deficiencies; or c) That based upon an analysis of the financial information provided and other credit information, the applicant does not meet the credit standards for the program and will not be recommended for approval. Step 3: For applications meeting criteria(a) above, staff will then complete an analysis of the application and prepare a credit analysis. As a result of staffs review, additional information may be required. The analysis will outline staffs recommendation, including project description, project cost, proposed financing, diversion tonnages,job creation, loan amount, loan terms, and any special loan conditions. APPROVAL PROCESS Step 4: Applications which meet the following criteria will be recommended by staff to the Loan Committee: a) The applicant is creditworthy; b) Cash flow and collateral are appropriate for the requested loan amount; and c) The applicant has adequately demonstrated the appropriateness of the loan for use in the project. 1 139 STATE OF CALIFORNIA CALIFORNIA INTEGRATED WASTE Revised August 2009 MANAGEMENT BOARD Step 5: Each application which meets the criteria listed in Step 4 will be presented by staff to the Loan Committee. The Loan Committee will review the staff analysis of the loan request and either approve as submitted, approve with modifications, or deny the loan request. Each loan applicant (or designee) should participate in the Loan Committee conference call when their loan request is being considered. Step 6: After the Loan Committee reviews the application, the Loan Committee may submit a recommendation for loan approval to the Board's Sustainability and Market Development Committee. This committee will consider the loan applicants project eligibility to divert tires from California landfills and ability to make tire recycled-content products. Each loan applicant should attend the committee and be present to respond to Board Member questions, if any. If the committee approves the loan, it typically is placed on the fiscal consent agenda for the full Board Meeting. Step 7: At the full Board Meeting, the members will consider the loan and approve funding. Loan applicants do not need to be present at the Board Meeting. DOCUMENTATION PROCESS Step 8: If the Board approves the loan, loan staff will prepare a Loan Commitment Letter setting forth the terms and conditions of the loan, which will be issued to the applicant for the applicant's acceptance. Step 9: Loan staff will prepare and send the loan applicant a final checklist of documents needed to prepare the loan documents. This may include copies of purchase orders, equipment vendor name and contact information, and other items. Step 10: After the applicant has accepted the loan, loan closing documents will be prepared. Loan closing must take place within 90 days of Board approval. FUND DISBURSEMENT PROCESS Step 11: The loan applicant will be required to open an escrow account at an escrow company of their choice. Loan documents will be sent to the escrow company for the borrower and guarantors to sign. Upon the Board's receipt of properly executed loan documents, loan funds will be sent to the escrow company. The full loan amount will be sent to escrow. Step 12: The borrower may request the payment of equipment invoices by submitting the proper forms to the Board's loan staff for review and approval. Step 13: Upon full disbursement of funds from escrow, the borrower may close the escrow account. Step 14: The borrower will receive monthly loan billing statements from the Board. 2 140 E„, 1 AZUSA LIGHT A WATER CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIESAP DATE: JULY 26, 2010 SUBJECT: APPROVAL OF THE AGREEMENT WITH RRI ENERGY TO PURCHASE LOCAL RESOURCE ADEQUACY CAPACITY FOR 2011 RECOMMENDATION It is recommended that the Utility Board approve a Local Resource Adequacy Capacity purchase of 30 MW from RRI Energy and authorize the Director of Utilities to execute the associated Confirmation Agreement once the executable copies are prepared. BACKGROUND On April 24, 2006, (in response to mandatory planning and operational requirements of the California Independent System Operator (CAISO)), the Azusa City Council/Utility Board adopted a "Resource Adequacy Program" for the City of Azusa. In general the program provides that the City procure sufficient electric power capacity plus 15% for reserve margin ahead of time to ensure adequate supply of electricity. It should be noted that all Publicly Owned Utilities (POU) serving load with the CAISO Balancing Authority Area adopted similar resource adequacy (RA)programs. Based on the CAISO's annual engineering studies, a portion of the RA capacity has to be derived from "local" resources — i.e., generating resources interconnected within or near the Los Angeles Basin. Azusa satisfies a portion of its non-local RA capacity(i.e. system RA capacity) through capacity associated with Azusa's external resources - San Juan, Palo Verde, and Hoover; however, local RA capacity has to be obtained/purchased from parties operating generating resources in the LA basin. Azusa's local RA requirement for 2011 is 34 MW — 4 MW of which can be satisfied through Azusa's rights in the Garnet Wind Project, the San Dimas Hydroelectric Plant and the MWD Hydroelectric Project. As a consequence, the 30 MW shortfall of local RA 141- Local Resource Adequacy Capacity Agreements July 26, 2010 Page 2 requirement must be procured from a third party prior to the CAISO's deadline of September 30, 2010. Staff issued an informal request for proposals (RFP) for local RA capacity products for 2011 and/or 2012; the RFP is attached herein. Four entities responded to the RFP with various terms and conditions. Products offered by three responding entities met fully all product attributes sought by staff and outlined in the RFP. The product offered by the fourth respondent, although priced most competitively, was non-responsive as it does not offer a qualified system RA and local RA product. Of the three qualified responses, RRI Energy provided the lowest price. Accordingly, staff recommends purchasing 30 MW of Local Resource Adequacy Capacity priced at $2.85/kw-month for calendar year 2011 from RRI Energy. This purchase would be consummated under the Western Systems Power Pool (WSPP) Agreement which has been previously approved by the Utility Board. A Draft Confirmation Agreement to memorialize the transaction is attached. The price for this RA capacity is about ten percent lower than last year's purchase and the utility's market price forecast. FISCAL IMPACT The purchase of the aforementioned local Resource Adequacy capacity will cost about $1,026,000. Funds are included in the approved FY 2010-11 operating budget to pay for the RA capacity purchase. Prepared by: Yarek Lehr, Assistant Director of Resource Management Attachments: Request for Proposals for Local RA Capacity Draft Confirmation Agreement 142 CITY OF AZUSA, CALIFORNIA Request for Proposals (RFP) for Local Resource Adequacy Capacity Resources The City of Azusa (Azusa) is hereby soliciting competitive proposals for Local Resource Adequacy Capacity (LRAC) resources that can satisfy the California Independent System Operator's (CAISO) local capacity requirement for Load Serving Entities (LSE) in the Los Angeles Basin. The CAISO Controlled Grid load takeoff point for loads served by the City of Azusa is the Southern California Edison's Rio Hondo 230 kV substation. A.Introduction 1. Azusa seeks competitive proposals from qualified sellers whereby a seller would sell, and Azusa would purchase LRAC products as described in Section B of this transmittal letter. 2. Azusa reserves the right,without qualification and in its sole discretion,to accept or reject any or all proposals for any reason without explanation to the respondent, or to make the award to the respondent(s), who's offer(s), in the opinion of Azusa,will provide best value to Azusa. Determination of best value may include both price and non-price factors. B. Description of Product Solicited The proposed and offered LRAC product must satisfy all applicable requirements of the CAISO FERC approved tariff, corresponding CAISO engineering studies, and other CAISO provisions and requirements as they may be applicable to resources qualified to supply local area adequacy capacity for loads interconnected in the Los Angeles Basin. C. Term The expected term to be considered in the prospective LRAC agreement(s) is January 1, 2011 through December 31, 2012. However, sellers may specify monthly, quarterly(e.g. Q3 2011), seasonal (e.g., summer from May through October),or annual (e.g. CY 2011 or 2012) terms. D.Volumes It is expected that interested parties will submit offers in increments of 5 MW or 10 MW and priced in$/kW-month or$/kW-year. It is also expected that largest award to any single seller will be at the most 30 MW of capacity. E.Additional or Bundled Products Although the main goal for this RFP is to procure local resource adequacy capacity, interested parties may also offer additional bundled products such as associated firm energy, energy call options, A/S,and other—provided that qualified LRAC is part of the bundle. 1 145 F.Additional Resource Adequacy Considerations Azusa shall have rights to all available and foreseeable resource adequacy attributes (associated attributes)from resources procured pursuant to this RFP. Such associated attributes may include system resource adequacy capacity, zonal resource adequacy capacity,and any other reliability adequacy capacity attributes that may be required by Azusa's jurisdictional regulators or system operator(s) Although Azusa intents to retain the product(s)to be procured under this RFP for its own use, Azusa shall be deemed to have the right to subsequently sell (resell)this entire product or any portion thereof. G. Proposal Selection Criteria 1. Azusa,at its sole discretion, shall evaluate responsive proposals and may select proposals, if any,which provide the most value to Azusa. 2. Proposals may be combined with other proposals, at Azusa's sole discretion. 3. Azusa shall determine at its sole discretion the value of any and/or all proposals. 4. Azusa shall evaluate any proposals in terms of price and non-price attributes. 5. Azusa shall perform an initial screening evaluation to identify and eliminate any proposals that are not responsive to the RFP,do not meet the minimum requirements set forth in the RFP, are clearly not economically competitive with other proposals, or are submitted by respondents that lack appropriate creditworthiness, sufficient financial resources,or qualifications to provide dependable and reliable services. 6. Azusa reserves the right to reject any, all,or portions of the proposals received for failure to meet any criteria set forth in this RFP. Azusa also may decline to enter into a power purchase arrangement with any respondent,terminate negotiations with any respondent, or abandon the RFP process in its entirety. 7. Those respondents who submit proposals agree to do so without legal recourse against Azusa, and its directors, officers,employees and agents for rejection of their proposal(s) or for failure to execute a power purchase agreement for any reason. Azusa shall not be liable to any respondent or party in law or equity for any reason whatsoever for any acts or omissions arising out of or in connection with this RFP. 8. Respondent shall be liable for all its costs, and Azusa shall not be responsible for any respondent's costs incurred to prepare, submit, or negotiate its proposal,a contract or for any other activity related thereto, except as may be explicitly agreed upon in any power purchase contract arising from a proposal. H. RFP Process and Schedule The following schedule is expected to be followed for this RFP: July 19,2010 RFP Issued July 22,2010 Deadline to submit proposals(9 AM PST) July 22, 2010 Selection of recommended proposals, if any,and notification July 26, 2010 Approval of the agreement(s)by Azusa Utility Board/City Council (tentative) 2 146 I. Transacting mechanism Azusa expects to transact under the Western System Power Pool (WSPP) Agreement. To expedite the review process, respondents are strongly encouraged to submit a pro forma Confirmation Agreement under the WSPP Agreement. J. Final Acceptance of offers subject to Azusa City Council approval Offers selected by Azusa staff shall be deemed formally accepted by Azusa only upon the Azusa City Council/Utilities Board resolution to accept such selected offers and directing Azusa staff to execute the pertinent confirms. K. Submission Requirements The proposal should be e-mailed on or before 9:00 AM PST on Thursday July 22,2010 to: Yarek Lehr Assistant Director of Resource Management City of Azusa ylehr@ci.azusa.ca.us Richard Torres Power Resources Coordinator City of Azusa rtorres@ci.azusa.ca.us Late or non-responsive proposals may not be considered. Important Note: No contact should be made with Azusa Utility Board,Azusa City Manager's office, or Azusa Light and Water executive management. Any questions regarding this RFP should be directed to Mr. Yarek Lehr via e-mail at ylehr@ci.azusa.ca.us or Mr. Rich Tones via email at rtorres@ci.azusa.ca.us. 3 147 CONFIRMATION LETTER BETWEEN RRI ENERGY SERVICES,INC. AND CITY OF AZUSA This confirmation letter("Confirmation")confirms the Transaction between RRI Energy Services, Inc. ("Seller")and City of Azusa("Buyer"),each individually a"Party"and together the"Parties",dated as of (the"Confirmation Effective Date")in which Seller agrees to provide to Buyer the right to the resource adequacy capacity product described herein(the"Product"). This Transaction is governed by the Western Systems Power Pool Agreement(Effective Version:March 16,2007)to which both Seller and Buyer are members along with any amendments and annexes thereto(the"Master Agreement"). Capitalized terms used but not otherwise defined in this Confirmation have the meanings ascribed to them in the Master Agreement and the Tariff. ARTICLE 1 DEFINITIONS 1.1 "Applicable Laws"means any law,rule,regulation,order,decision,judgment,or other legal or regulatory determination by any Governmental Body having jurisdiction over one or both Parties or this Transaction,including without limitation,the Tariff. 1.2 "Availability Incentive Payments"shall mean Availability Incentive Payments as defined in FERC filing ER09-1064 or such other similar term as modified and approved by FERC thereafter to be incorporated in the Tariff or otherwise applicable to CAISO. 1.3 "Availability Standards"shall mean Availability Standards as defined in FERC filing ER09-1064 or such other similar term as modified and approved by FERC thereafter to be incorporated in the Tariff or otherwise applicable to CAISO. 1.4 "Buyer"has the meaning specified in the introductory paragraph hereof. 1.5 "CAISO"means the California Independent System Operator,or its successor. 1.6 "Capacity Replacement Price"means(a)the price paid for any Replacement Capacity purchased by Buyer pursuant to Section 5.3 hereof,plus costs reasonably incurred by Buyer in purchasing such Replacement Capacity,or(b)absent a purchase of any Replacement Capacity,the market price for such Designated RA Capacity not provided at the Delivery Point. The Buyer shall determine such market prices in a commercially reasonable manner. For purposes of Section 4.16a of the Master Agreement, "Capacity Replacement Price" shall be deemed to be the "Replacement Price." 1.7 "Confirmation"has the meaning specified in the introductory paragraph hereof. 1.8 "Confirmation Effective Date"has the meaning specified in the introductory paragraph hereof. 1.9 "Contingent Firm RA Product"has the meaning specified in Section 3.3 hereof. 1.10 "Contract Price"means,for any Monthly Delivery Period,the product of the RA Capacity Flat Price and the Price Shape Factor for such period. 1.11 "Contract Quantity"means the total Unit Contract Quantity for all Units. 1.12 "CPUC"means the California Public Utilities Commission or any successor thereto. 1.13 "CPUC Decisions"means CPUC Decisions 04-01-050,04-10-035,05-10-042,06-06-064,06-07- 031 and subsequent decisions related to resource adequacy,as may be amended from time to time by the CPUC. 1.14 "Delivery Point"has the meaning specified in Section 4.2 hereof. 148 1.15 "Designated RA Capacity" means, for each Unit, the amount of RA Capacity that Seller provides to Buyer pursuant to this Confirmation that is certified for inclusion in RAR Showings and if applicable LAR Showings, in each case as determined pursuant to Section 3.1 hereof. Designated RA Capacity shall include those attributes associated with the capacity identified in Article 2 and Article 3 hereof. 1.16 "Firm RA Product" has the meaning specified in the Section 3.2 hereof. 1.17 "Forced Outage" means an outage that is designated "forced" according to CAISO's outage coordination rules and procedures. 1.18 "Governmental Body" means any federal, state, local, municipal or other government; any governmental, regulatory or administrative agency, commission or other authority lawfully exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; and any court or governmental tribunal. 1.19 "LAR" means local area reliability, which is any program of localized resource adequacy requirements established for jurisdictional LSE's by the CPUC pursuant to the CPUC Decisions, or by another LRA having jurisdiction over the LSE. LAR may also be known as local resource adequacy, local RAR, or local capacity requirement in other regulatory proceedings or legislative actions. 1.20 "LAR Attributes" means, with respect to a Unit, any and all resource adequacy attributes (or other locational attributes related to system reliability), as may be identified from time to time by the CPUC, CAISO, LRA, or other Governmental Body having jurisdiction, associated with the physical location or point of electrical interconnection of the Unit within the CAISO Control Area, that can be counted toward LAR, but exclusive of any RAR Attributes which are not associated with where in the CAISO Control Area the Unit is physically located or electrically interconnected. For clarity, it should be understood that the LAR Attributes associated with a Unit by virtue of its location or point of electrical interconnection may change as the CAISO, LRA, or other Governmental Body, defines new or re-defines existing local areas and such change will not result in a change in payments made pursuant to this transaction. 1.21 "LAR Showings" means the LAR compliance showings (or similar or successor showings)an LSE is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the CPUC Decisions, or to an LRA having jurisdiction over the LSE. 1.22 "LRA"means a Local Regulatory Authority, as defined in the Tariff. 1.23 'LSE" means load-serving entity. LSEs may be an investor-owned utility, an electric service provider, a community aggregator or community choice aggregator, or a municipality serving load in the CAISO Control Area (excluding exports). 1.24 "Maintenance Outage" has the meaning specified in the NERC/GADS Protocols. 1.25 "Master Agreement" has the meaning specified in the introductory paragraph hereof. 1.26 "Monthly Delivery Period" means each calendar month during the Period of Delivery. 1.27 "Monthly RA Capacity Payment" has the meaning specified in Section 4.4 hereof. 1.28 "NERC/GADS Protocols" means the North American Electric Reliability Council (NERC) Generating Availability Data System (GADS) protocols, as may be updated from time to time. 1.29 "Non-Availability Charges" shall mean Non-Availability Charges as defined in FERC filing ER09- 1064 or such other similar term as modified and approved by FERC thereafter to be incorporated in the Tariff or otherwise applicable to CAISO. 1.30 "Non-Excusable Event" means an event which prevents Buyer's ability to use Designated RA Capacity for its RAR Showing or LAR Showing as a result of Seller's (a) negligence, (b) failure to perform its obligations under this Confirmation, including, without limitation, the failure to cause the owner, operator or SC of a Unit to comply with the operations and maintenance standards 2 149 specified in Section 8.2(f), or(c)failure to comply, or cause the owner, operator or SC of the Units to comply, with the Tariff with respect to the Units providing RAR Attributes and LAR Attributes, as applicable. 1.31 "Period of Delivery" has the meaning specified in Section 4.1 hereof. 1.32 "Planned/Scheduled Outage" means any outage, including Maintenance Outages, that are designated "Approved Planned" in the SLIC System. 1.33 "Price Shape Factor" means the Price Shape Factor specified in the Monthly Payment Price Shape Table in Section 4.4 hereof. 1.34 "Product" has the meaning specified in the introductory paragraph hereof. 1.35 "Prorated Percentage of Unit Factor" means the percentage of RA Capacity, as specified in Article 2 hereof, from the Unit that is dedicated to Buyer pursuant to this Confirmation. 1.36 "RA Availability" means, for each Unit, expressed as a decimal value rounded to the nearest hundredth, (a) the Unit's Designated RA Capacity for a Monthly Delivery Period, divided by (b) the Unit Contract Quantity for such Monthly Delivery Period, provided that a Unit's RA Availability shall not exceed 1.00. 1.37 "RA Capacity" means the qualifying and deliverable capacity of the Unit for RAR and LAR purposes for the Period of Delivery, as determined by the CAISO, or other Governmental Body authorized to make such determination under Applicable Laws. RA Capacity encompasses both the RAR Attributes and LAR Attributes of the capacity provided by a Unit. 1.38 "RA Capacity Flat Price" means the price specified in the RA Capacity Flat Price Table in Section 4.4 hereof. 1.39 "RAR" means the resource adequacy requirements established for LSEs by the CPUC pursuant to the CPUC Decisions, or by an LRA or other Governmental Body having jurisdiction. 1.40 "RAR Attributes" means, with respect to a Unit, any and all resource adequacy attributes, as may be identified from time to time by the CPUC, LRA, or Governmental Body having jurisdiction, that can be counted toward RAR, exclusive of any LAR Attributes. 1.41 "RAR Showings" means the RAR compliance showings (or similar or successor showings) an LSE is required to make to the CPUC (and/or, to the extent authorized by the CPUC, to the CAISO), pursuant to the CPUC Decisions, or to an LRA having jurisdiction. 1.42 "Replacement Capacity" has the meaning specified in Section 5.3 hereof. 1.43 "Replacement Unit" means a generating unit meeting the requirements specified in Section 5.2 hereof. 1.44 "Resource Top Down Category" means the resource classification as described in CPUC Decision 05-10-042, and as may be amended from time to time by the CPUC. 1.45 "Seller" has the meaning specified in the introductory paragraph hereof. 1.46 "SLIC System" means the scheduling and logging system for the CAISO, which is a web-enabled interface for transmission and generation owners and operators to communicate outage information to the CAISO. 1.47 "Standard Capacity Product" shall mean the product as defined in FERC filing ER09-1064 or as modified and approved by FERC thereafter to be incorporated in the Tariff or otherwise applicable to CAISO. 1.48 "Supply Plan" means the supply plans, or similar or successor filings, that each Scheduling Coordinator representing RA Capacity submits to the CAISO, LRA, or other Governmental Body, pursuant to Applicable Laws, in order for that RA Capacity to count for its RAR Attributes or LAR Attributes. 3 150 1.49 "Tariff" means the tariff and protocol provisions of the CAISO, as amended or supplemented from time to time. 1.50 "Transaction"has the meaning specified in the introductory paragraph hereof. 1.51 "Unit" or "Units" shall mean the generation assets described in Article 2 hereof (including any Replacement Units), from which RA Capacity is provided by Seller to Buyer. 1.52 "Unit Contract Quantity" means the quantity of RA Capacity for a Unit as of the Confirmation Effective Date, as specified in Section 4.3 hereof. ARTICLE 2 UNIT INFORMATION' Unit: Etiwanda Unit 3 Location: Rancho Cucamonga, CA CAISO Resource ID: ETIWND 7 UNIT 3 SCID: NES1 CAISO Net Qualifying Capacity (as determined by CAISO for such Unit as of the Confirmation Effective Date): 320 MWs Prorated Percentage of Unit Factor: .095 Resource Type: Natural Gas Conventional Steam Turbine Resource Top Down Category(1, 2, 3 or 4): 4 Point of interconnection with the CAISO Controlled Grid ("Substation"): Vista Current CAISO Zone (NP15, ZP26, or SP15) in which Substation resides: South LAR Region (if any, as of Confirmation Effective Date): LA Basin Deliverability restrictions, if any, as described in most recent CAISO deliverability assessment: None known by Seller as of the Confirmation Effective Date. Run Hour Restrictions: None ARTICLE 3 RESOURCE ADEQUACY CAPACITY PRODUCT During the Period of Delivery, Seller shall provide the Product to Buyer pursuant to the terms of this Confirmation. The Product shall (a) include both RAR Attributes and, if any, LAR Attributes, and (b) be either a Firm RA Product or a Contingent Firm RA Product, as selected below. The Product does not confer to Buyer any right to the electrical output from the Units, other than the right to include the Designated RA Capacity associated with the Contract Quantity in RAR Showings, LAR Showings if applicable, and any other capacity or resource adequacy markets or proceedings as specified in this Confirmation. Specifically, no energy or ancillary services associated with any Unit is required to be 1 To be repeated for each Unit if more than one. 4 151 made available to Buyer as part of this Transaction and Buyer shall not be responsible for compensating Seller for Seller's commitments to the CAISO required by this Confirmation. Seller retains the right to sell any RA Capacity from a Unit in excess of that Unit's Contract Quantity, and any RAR Attributes or LAR Attributes not otherwise sold under this Confirmation. 3.1 RAR and LAR Attributes Seller shall provide Buyer with the Designated RA Capacity and the RAR Attributes and, if any, LAR Attributes from each Unit associated with such Designated RA Capacity, as expressed in MWs. For each Monthly Delivery Period, a Unit's Designated RA Capacity shall be equal to the product of (x) the Unit's RA Capacity, subject to adjustments for Planned/Scheduled Outages at the time of the RAR Showings and, if applicable, LAR Showings, if any, as determined pursuant to Article 7 below and (y) the Unit's Prorated Percentage of Unit Factor; provided that the total amount of Designated RA Capacity from all Units shall not exceed the Contract Quantity. 3.2 J 1 Firm RA Product Seller shall provide Buyer with Designated RA Capacity from the Units in the amount of the Contract Quantity. If, for any Monthly Delivery Period, the Designated RA Capacity is insufficient to provide the full amount of the Contract Quantity for such period solely as a result of Planned/Scheduled Outages resulting in adjustments to RA Capacity of a Unit at the time of the RAR Showings and, if applicable, LAR Showings pursuant to Article 7 below, Seller shall provide Buyer with Designated RA Capacity from one or more Replacement Units pursuant to Section 5.2 hereof. If Seller fails to provide Buyer with replacement Designated RA Capacity from Replacement Units pursuant to Section 5.2, as Buyer's sole and exclusive remedy for such failure, Seller shall be liable for damages pursuant to Section 5.4 hereof, or Seller shall indemnify Buyer for penalties or fines pursuant to Section 5.5 hereof. For clarity, if, the Units provide less than the full amount of the Contract Quantity as a result of a Forced Outage or a Force Majeure, Seller is not obligated to provide Buyer with replacement Designated RA Capacity or to indemnify Buyer for any penalties or fines pursuant to Section 5.5 hereof. 3.3 J X 1 Contingent Firm RA Product Seller shall provide Buyer with Designated RA Capacity from the Units in the amount of the Contract Quantity. If, for any Monthly Delivery Period,the Designated RA Capacity is insufficient to provide the full amount of the Contract Quantity for such period because of a Non-Excusable Event, Seller shall provide Buyer with Designated RA Capacity from one or more Replacement Units pursuant to Section 5.2 hereof. In such case, if Seller fails to provide Buyer with replacement Designated RA Capacity from Replacement Units pursuant to Section 5.2, as Buyer's sole and exclusive remedy for such failure, Seller shall be liable for damages pursuant to Section 5.4 hereof, or Seller shall indemnify Buyer for penalties or fines pursuant to Section 5.5 hereof. For clarity, if the Units provide less than the full amount of the Contract Quantity for any reason other than a Non-Excusable Event, Seller is not obligated to provide Buyer with replacement Designated RA Capacity or to indemnify Buyer for penalties or fines pursuant to Section 5.5 hereof. ARTICLE 4 DELIVERY AND PAYMENT 4.1 Period of Delivery The Period of Delivery shall be: January 1, 2011 through December 31, 2011, inclusive. 4.2 Delivery Point The Delivery Point for each Unit shall be the CAISO Control Area and, if applicable, the LAR region in which the Unit is electrically interconnected. 5 15 4.3 Unit Contract Quantity The Contract Quantity of each Unit for each Monthly Delivery Period shall be: Unit Contract Quantity(MWs) Month MWs January 30 February 30 March 30 April 30 May 30 June 30 July 30 August 30 September 30 October 30 November 30 December 30 If any portion of the Unit Contract Quantity of any Unit providing a Contingent Firm RA Product is not countable in Buyer's RAR Showings or, if applicable, LAR Showings after the Confirmation Effective Date for reasons other than a Non-Excusable Event, the Unit Contract Quantity shall be adjusted to the product of the Unit's (a) RA Capacity following adjustment, and (b) Prorated Percentage of Unit Factor, provided that the resulting Unit Contract Quantity shall not exceed the original Unit Contract Quantity on the Confirmation Effective Date. 2 To be repeated for each Unit if more than one. 6 153 4.4 Monthly RA Capacity Payment In accordance with the terms of Section Nine of the Master Agreement, Buyer shall make a Monthly RA Capacity Payment to Seller for each Unit, in arrears, following each Monthly Delivery Period. Each Unit's Monthly RA Capacity Payment shall be equal to the product of (a) the applicable Contract Price for that Monthly Delivery Period, (b) the Designated RA Capacity for the Monthly Delivery Period, and (c) 1 ,000. The final product of this Monthly RA Capacity Payment calculation shall be rounded to the nearest penny (i.e., two decimal places). Each Monthly RA Capacity Payment may be subject to reduction in accordance with Section 4.5 hereof. RA CAPACITY FLAT PRICE TABLE Contract RA Capacity Flat Price Year ($/kW-month) 2011 $2.85 The respective monthly Price Shape Factor, set forth in the Monthly Payment Price Shape Factor Table below, shall apply throughout the entire Period of Delivery. MONTHLY PAYMENT PRICE SHAPE FACTOR TABLE Contract Month Price Shape Factor January 100% February 100% March 100% April 100% May 100% June 100% July 100% August 100% September 100% October 100% November 100% December 100% 4.5 Reduction of Monthly RA Capacity Payment (Contingent Firm RA Product only) For any Contingent Firm RA Product, the Monthly RA Capacity Payment for each Unit shall be reduced by its RA Availability Adjustment, which is calculated for any Monthly Delivery Period as follows: (a) When the Unit's RA Availability is greater than or equal to 0.80, the Unit's RA Availability Adjustment shall be zero. (b) When the Unit's RA Availability is greater than or equal to 0.50, but less than 0.80, the Unit's RA Availability Adjustment shall be equal to: 7 154 (0.80-RA Availability)*0.50*the applicable Contract Price*Unit Contract Quantity" 1,000. (c) When the Unit's RA Availability is less than 0.50,the Unit's RA Availability Adjustment shall be equal to: (((0.80-0.50)*0.50)+((0.50-RA Availability)*1.00))*the applicable Contract Price* Unit Contract Quantity*1,000. The final product of this RA Availability Adjustment calculation shall be rounded to the nearest penny(i.e., two decimal places). The RA Availability Adjustment for each Unit shall be subtracted from the Monthly RA Capacity Payment determined in Section 4.4 to determine the amount due to the Seller for Designated RA Capacity provided hereunder from each Unit. In no case shall a Unit's Monthly RA Capacity Payment be less than zero. 4.6 Allocation of Other Payments and Costs Seller may retain any revenues it may receive from the CAISO or any other third party with respect to any Unit for(a)start-up,shut-down and minimum load costs,(b)capacity revenue for ancillary services,(c) energy sales,and(d)any revenues for black start or reactive power services. However,Buyer shall be entitled to receive and retain all revenues associated with and arising from the Designated RA Capacity of any Unit during the Period of Delivery (including any capacity or availability revenues from RMR Agreements for any Unit, and Interim Capacity Procurement Mechanism capacity payments, but excluding payments described in clauses(a)through(d)above). In accordance with Section 4.4 of this Confirmation and Section Nine of the Master Agreement, all such Buyer revenues described in this Section received by Seller,a Unit's SC,owner,or operator shall be remitted to Buyer,and Seller shall indemnify Buyer for any such revenues that Buyer does not receive,and Seller shall pay such revenues to Buyer if the Unit's SC,owner,or operator fails to remit those revenues to Buyer. If Seller fails to pay such revenues to Buyer,Buyer may offset any amounts owing to it for such revenues against any future amounts it may owe to Seller under this Confirmation. If a centralized capacity market develops within the CAISO region, Buyer will have exclusive rights to offer, bid or otherwise submit Designated RA Capacity provided to Buyer pursuant to this Confirmation for re-sale in such market, and retain and receive any and all related revenues. In the event the Tariff is modified to include the Standard Capacity Product,Seller agrees that the Unit is subject to the terms of the Availability Standards. Furthermore,the Parties agree that any Availability Incentive Payments are for the benefit of the Seller and for Seller's account and that any Non-Availability Charges are the responsibility of the Seller and for Seller's account. ARTICLE 5 SELLER'S FAILURE TO DELIVER CONTRACT QUANTITY 5.1 Notices and Filings If the Units will not be available to provide Designated RA Capacity in the full amount of the Contract Quantity for any RAR and/or LAR Showings for the Period of Delivery, Seller shall, no later than the earlier of(a)twenty(20)Business Days after the loss of any Designated RA Capacity,or(b)fifteen(15) Business Days before the relevant deadline for such RAR or LAR Showing, notify Buyer of the Designated RA Capacity of each Unit which can be included in such Showings. Seller shall,on a timely basis, submit, or cause each Unit's Scheduling Coordinator to submit, Supply Plans to identify and confirm the Designated RA Capacity of each Unit sold to Buyer. Seller shall cause the Unit's Scheduling Coordinator to certify to Buyer, no later than the earlier of(a)twenty (20) Business Days after the Confirmation Effective Date, or (b) fifteen (15) Business Days before the relevant deadline for any applicable RAR or LAR Showing,that Buyer will be credited with the Designated RA Capacity for the Period of Delivery in the Unit's Scheduling Coordinator's Supply Plan. Seller shall indemnify and hold harmless Buyer from any costs, monetary penalties or fines Buyer may incur in the event any Unit's Scheduling Coordinator fails to timely submit Supply Plans that identify Buyer's right to the Designated RA Capacity purchased hereunder. If Seller fails to pay those costs,monetary penalties or fines,or fails 8 155 to reimburse Buyer for those costs, monetary penalties or fines, then Buyer may offset any amounts owing to it under this Section 5.1 against any future amounts it may owe to Seller under this Confirmation. 5.2 RA Capacity from Replacement Units If Seller is required to provide Designated RA Capacity from one or more Replacement Units pursuant to Sections 3.2 or 3.3, Seller shall, at no cost to Buyer, provide Buyer with replacement RA Capacity from one or more Replacement Units, such that the total amount of Designated RA Capacity provided to Buyer from all Units and Replacement Units equals the Contract Quantity. The designation of any Replacement Unit by Seller shall be subject to Buyer's prior written approval, which shall not be unreasonably withheld; provided that so long as the Replacement Unit provides to Buyer RAR Attributes and LAR Attributes equivalent to those that were provided by the original Unit then Buyer's prior approval shall not be required. For clarity, in the aggregate all Units and Replacement Units must provide to Buyer RAR Attributes and LAR Attributes equivalent to those that were provided by the original Units and that were sold under this Confirmation. Seller shall identify Replacement Units meeting the above requirements no later than the earlier of twenty (20) Business Days after the loss of any Designated RA Capacity, or fifteen (15) Business Days before the relevant deadline for Buyer's RAR Showing and/or LAR Showing. Once Seller has identified in writing any Replacement Units that meet the requirements of this Section 5.2, any such Replacement Unit shall be automatically deemed to be a Unit for purposes of this Confirmation until Seller notifies Buyer, in writing, of the availability of the original Units. For purposes of this Confirmation, Seller shall be deemed to have failed to provide Buyer with Designated RA Capacity in the full amount of the Contract Quantity if the Units and Replacement Units providing such Designated RA Capacity do not in the aggregate provide to Buyer the RAR Attributes and LAR Attributes contracted for pursuant to this Confirmation. 5.3 Purchase of Replacement Capacity If Seller fails to provide any portion of Designated RA Capacity from Replacement Units as required by Section 5.2 hereof, Buyer may, but shall not be required to, replace any Designated RA Capacity not provided by Seller with capacity (such replacement capacity being referred to as "Replacement Capacity") having equivalent RAR and LAR Attributes compared to the Designated RA Capacity not provided by Seller. Buyer may enter into purchase transactions with one or more other parties to replace Designated RA Capacity not provided by Seller. Additionally, Buyer may enter into one or more arrangements to repurchase its obligation to sell and deliver the Product to another party, and such arrangements shall be considered to be the procurement of Replacement Capacity. Buyer shall act in a commercially reasonable manner in purchasing any Replacement Capacity. 5.4 Damages for Failure to Deliver If Seller is required to provide Designated RA Capacity from one or more Replacement Units pursuant to Sections 3.2 or 3.3, and fails to do so pursuant to Section 5.2 hereof, then, for purposes of determining the damages due to Buyer under Section 21 of the Master Agreement, Seller shall pay to Buyer an amount equal to the positive difference, if any, between (a)the sum of(i)the Capacity Replacement Price for each Replacement Capacity transaction entered into by Buyer times its applicable RA Capacity quantity, plus (ii) absent a purchase of Replacement Capacity, each Capacity Replacement Price times the Designated RA Capacity not provided by Seller (adjusted for any quantity purchased by Buyer in (i) above), and (b) the Designated RA Capacity not provided for each Monthly Delivery Period multiplied by the Contract Price for that month. If Seller fails to pay those damages, then Buyer may offset those damages owed it against any future amounts it may owe to Seller under this Confirmation. 5.5 Indemnities for Failure to Deliver Designated RA Capacity Seller agrees to indemnify Buyer for any monetary penalties or fines assessed against Buyer by the CPUC or the CAISO, or an LRA having jurisdiction, resulting from: (a) the Designated RA Capacity provided to Buyer hereunder being less than the Contract Quantity due to a Non-Excusable Event, and Seller's failure to replace the shortfall in Designated RA Capacity from Replacement Units in accordance with Section 5.2 hereof; (b) Seller's failure to provide notice of the non-availability of any portion of the 9 15 6' Designated RA Capacity as required under Section 5.1 hereof; or(c) any other failure by Seller to perform its obligations under this Confirmation. With respect to the foregoing, the Parties shall use commercially reasonable efforts to minimize such penalties and fines, provided that in no event shall Buyer be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize these penalties and fines. Seller will have no obligation to Buyer under this Section 5.5 in respect of the portion of Contract Quantity for which Seller has paid damages pursuant to Section 5.4 hereof. If Seller fails to pay those penalties or fines, or fails to reimburse Buyer for those penalties and fines, then Buyer may offset the cost of those penalties and fines against any future amounts it may owe to Seller under this Confirmation. ARTICLE 6 CAISO OFFER REQUIREMENTS During the Period of Delivery, Seller shall either schedule or cause the Unit's Scheduling Coordinator to schedule with, or make available to, the CAISO each Unit's Designated RA Capacity in compliance with the Tariff, and shall perform all, or cause the Unit's Scheduling Coordinator, owner, or operator, as applicable, to perform all obligations under the Tariff that are associated with the sale of Designated RA Capacity hereunder. Buyer shall have no liability for the failure of Seller or the failure of any Unit's Scheduling Coordinator, owner or operator to comply with such Tariff provisions, including any penalties or fines imposed on Seller or the Unit's Scheduling Coordinator, owner, or operator for such noncompliance. ARTICLE 7 PLANNED/SCHEDULED OUTAGES In the event of a Planned/Scheduled Outage, the Unit's Designated RA Capacity will be deemed to be adjusted under the following circumstances: Time Period Adjustment to the Unit's Designated RA Capacity at the Time of Showing Summer Any month where days of Planned/Scheduled Outages exceed 25% of days in the May through month, the Unit's Designated RA Capacity will be equal to zero (0)for the month. If September Planned/Scheduled Outages are less than or equal to 25%, the Unit's Designated RA Capacity will be deemed to equal the Contract Quantity. Non-Summer (i) For Planned/Scheduled Outages less than 1 week, the Unit's Designated RA Months Capacity will be deemed to equal the Contract Quantity October through April (ii) For Planned/Scheduled Outages 1 week to 2 weeks, the Unit's Designated RA Capacity will be calculated using the following formula: [1 - (days of Planned/Scheduled Outage/days in month)- 0.25] * Unit's Designated RA Capacity (iii) For Planned/Scheduled Outages over 2 weeks, the Designated RA Capacity will be deemed to equal zero for that month. ARTICLE 8 OTHER BUYER AND SELLER COVENANTS 8.1 Buyer and Seller shall, throughout the Period of Delivery, take all commercially reasonable actions and execute any and all documents or instruments reasonably necessary to ensure 10 157 Buyer's right to the use of the Contract Quantity for the sole benefit of Buyer's RAR and LAR if applicable. Such commercially reasonable actions shall include,without limitation: (a) Cooperating with and providing, and in the case of Seller causing each Unit's Scheduling Coordinator, owner or operator to cooperate with and provide, requested supporting documentation to the CAISO, the CPUC, or any other Governmental Body responsible for administering RAR and/or LAR under Applicable Laws, to certify or qualify the Contract Quantity as RA Capacity and Designated RA Capacity. Such actions shall include, without limitation, providing information requested by the CPUC, or by an LRA having jurisdiction, to demonstrate for each month of the Period of Delivery the ability to deliver the Contract Quantity from each Unit to the CAISO Controlled Grid for the minimum hours required to qualify as RA Capacity, and providing information requested by the CPUC, CAISO or other Governmental Body having jurisdiction to administer RAR or LAR to demonstrate that the Contract Quantity can be delivered to the CAISO Controlled Grid, pursuant to "deliverability" standards established by the CAISO, or other Governmental Body having jurisdiction to administer RAR and/or LAR; and (b) Negotiating in good faith to make necessary amendments, if any, to this Confirmation to conform this Transaction to subsequent clarifications, revisions or decisions rendered by the CPUC, FERC, or other Governmental Body having jurisdiction to administer RAR or LAR, so as to maintain the benefits of the bargain struck by the Parties on the Confirmation Effective Date. 8.2 Seller represents, warrants and covenants to Buyer that, throughout the Period of Delivery: (a) Seller owns or has the exclusive right to the RA Capacity sold under this Confirmation from each Unit, and shall furnish Buyer, CAISO, CPUC or other jurisdictional LRA, or other Governmental Body with such evidence as may reasonably be requested to demonstrate such ownership or exclusive right; (b) No portion of the Contract Quantity has been committed by Seller to any third party in order to satisfy RAR or LAR or analogous obligations in CAISO markets, other than pursuant to an RMR Agreement between the CAISO and either Seller or the Unit's owner or operator; (c) No portion of the Contract Quantity has been committed by Seller in order to satisfy RAR or LAR, or analogous obligations in any non-CAISO market; (d) Each Unit is connected to the CAISO Controlled Grid, is within the CAISO Control Area, and is under the control of CAISO; (e) In the event Seller has rights to the energy output of any Unit, and Seller or the Unit's Scheduling Coordinator schedules energy from the Unit for export from the CAISO Control Area, or commits energy to another entity in a manner that could result in scheduling energy from the Unit for export from the CAISO Control Area, it shall do so only as allowed by, and in accordance with, Applicable Laws and such exports may, if allowed by the Tariff, be curtailed by the CAISO; (f) The owner or operator of each Unit is obligated to maintain and operate each Unit using "Good Utility Practice," as defined in the Tariff, and, if applicable, General Order 167 as outlined by the CPUC in the Enforcement of Maintenance and Operation Standards for Electric Generating Facilities Adopted May 6, 2004, and is obligated to abide by all Applicable Laws in operating such Unit, provided that the owner or operator of any Unit is not required to undertake capital improvements, facility enhancements, or the construction of new facilities; (g) The owner or operator of each Unit is obligated to comply with Applicable Laws, including the Tariff, relating to RA Capacity, RAR and LAR; 11 158 (h) If Seller is the owner of any Unit, the aggregation of all amounts of LAR Attributes and RAR Attributes that Seller has sold, assigned or transferred for any Unit does not exceed that Unit's RA Capacity; (i) With respect to the RA Capacity provided under this Confirmation, Seller shall, and each Unit's SC is obligated to, comply with Applicable Laws, including the Tariff, relating to RA Capacity, RAR and LAR; (j) Seller has notified the SC of each Unit that Seller has transferred the Designated RA Capacity to Buyer, and the SC is obligated to deliver the Supply Plans in accordance with the Tariff; and (k) Seller has notified each Unit's SC that Buyer is entitled to the revenues set forth in Section 4.6 of this Confirmation, and such SC is obligated to promptly deliver those revenues to Buyer, along with appropriate documentation supporting the amount of those revenues. ARTICLE 9 CONFIDENTIALITY Notwithstanding Section 30.1 of the Master Agreement, the Parties agree that either Party may disclose the sale of the Designated RA Capacity under this Confirmation to any Governmental Body, the CPUC, the CAISO or any LRA having jurisdiction in order to support its LAR or RAR Showings or Supply Plans, if applicable, and Seller may disclose the transfer of the Designated RA Capacity under this Transaction to the SC of each Unit in order for such SC to timely submit accurate Supply Plans; provided, that each disclosing Party shall, to the extent reasonable, use reasonable efforts to limit the ability of any such applicable Governmental Body, CAISO, LRA or SC to further disclose such information. ARTICLE 10 BUYER'S RE-SALE OF PRODUCT Buyer may re-sell all or a portion of the Product delivered to Buyer hereunder. ARTICLE 11 COLLATERAL REQUIREMENTS INTENTIONALLY LEFT BLANK. Article 12 WSPP Agreement Amendments 12. WSPP Agreement Amendments: For purposes of this Transaction only, the Master Agreement shall be amended as follows: (a) Sections 22.1(d) and 27 of the Master Agreement shall not apply to either Party with respect to this Transaction. (b) The following phrase is inserted at the beginning of Section 37: "On the date of entering into this Confirmation,". (c) Section 24 of the Master Agreement is deleted and replaced with the following: "This Master Agreement and any Confirmation shall be governed by and construed, enforced and performed in accordance with the laws of the State of California, without 12 159 regard to principles of conflicts of law or contrary provisions of the Master Agreement, if any. (d) Subsections 34.1 and 34.2 of the Master Agreement are hereby deleted and replaced with the following: 34.1 Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, CLAIM OR PROCEEDING RELATING TO THIS AGREEMENT, PROVIDED, HOWEVER, THE PARTIES DO NOT WAIVE JURY TRIAL IF ANY PROCEEDING RELATED TO THIS AGREEMENT IS BROUGHT IN THE STATE OF TEXAS." The rest of Section 34 of the Master Agreement shall be re-numbered accordingly. (e) LIMITATION OF DAMAGES. FOR BREACH OF ANY PROVISION OF THIS CONFIRMATION AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, THE EXPRESS REMEDY OR MEASURE OF DAMAGES PROVIDED IS THE SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT AND THE AGREEMENT FOR THE BREACH, LIABILITY FOR THE BREACH IS LIMITED AS SET FORTH IN THE PROVISION AND ALL OTHER REMEDIES FOR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT FOR A PARTICULAR BREACH, LIABILITY FOR THE BREACH IS LIMITED TO DIRECT DAMAGES ONLY, THE DIRECT DAMAGES ARE THE SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT FOR THE BREACH, AND ALL OTHER REMEDIES FOR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. NEITHER PARTY IS LIABLE FOR ANY OTHER TYPE OF DAMAGE, INCLUDING INCIDENTAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES OF ANY NATURE (INCLUDING DAMAGES ASSOCIATED WITH LOST PROFITS, BUSINESS INTERRUPTION AND LOSS OF GOODWILL) ARISING AT ANY TIME, WHETHER IN TORT (INCLUDING THE SOLE OR CONTRIBUTORY NEGLIGENCE OF EITHER PARTY OR ANY RELATED PERSON), WARRANTY, STRICT LIABILITY, CONTRACT OR STATUTE, UNDER ANY INDEMNITY PROVISION, OR OTHERWISE. (f) Section 41 "Witness" of the Master Agreement shall become Section 42 and the following "Standard of Review" Section substituted in its place: "The Parties agree as follows: From the date of entering into a Transaction under this Master Agreement and throughout the term of such Transaction, the Parties each warrant and covenant as follows: (i) Absent the agreement of all Parties to the proposed change, the standard of review for changes to any section of this Master Agreement (including all Transactions and/or Confirmations) specifying the rate(s) or other material economic terms and conditions agreed to by the Parties herein, whether proposed by a Party, a non-party or FERC acting sua sponte, shall be the "public interest" standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956)and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956)( the "Mobile-Sierra" doctrine). (ii) The Parties, for themselves and their successors and assigns, (i) agree that this "public interest" standard shall apply to any proposed changes in any other documents, instruments or other agreements executed or entered into by the Parties in connection 13 160 with this Master Agreement and (ii) hereby expressly and irrevocably waive any rights they can or may have to the application of any other standard of review, including the "just and reasonable" standard." ACKNOWLEDGED AND AGREED TO AS OF _, 2010: RRI ENERGY SERVICES, INC. CITY OF AZUSA By: By: Name: Name: Title: Title: Date: Date: 14 161