AGENDA. 3. MINUTES OF THE REGULAR GROUNDWATER QUALITY COMMITTEE MEETING OF NOVEMBER 1, 2005 Staff Recommendation: Approve the minutes as submitted.

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2 REGULAR MEETING OF THE GROUNDWATER QUALITY COMMITTEE OF THE BOARD OF DIRECTORS WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA E. 166 th Street (Corner, Bloomfield & 166 th ), Cerritos, California 8:30 A.M., TUESDAY, DECEMBER 6, 2005 AGENDA EACH ITEM ON THE AGENDA, NO MATTER HOW DESCRIBED, SHALL BE DEEMED TO INCLUDE ANY APPROPRIATE MOTION, WHETHER TO ADOPT A MINUTE MOTION, RESOLUTION, PAYMENT OF ANY BILL, APPROVAL OF ANY MATTER OR ACTION, OR ANY OTHER ACTION. ITEMS LISTED AS FOR INFORMATION MAY ALSO BE THE SUBJECT OF ANY ACTION TAKEN BY THE BOARD OR A COMMITTEE AT THE SAME MEETING. 1. DETERMINATION OF A QUORUM 2. PUBLIC COMMENT 3. MINUTES OF THE REGULAR GROUNDWATER QUALITY COMMITTEE MEETING OF NOVEMBER 1, 2005 Staff Recommendation: Approve the minutes as submitted. 4. AMERICAN WATER WORKS RESEARCH FOUNDATION RENEWAL Staff Recommendation: Recommend the Board renew the District s membership in the American Water Works Association Research Foundation for $42,400 for the period October 2005 to September SAFE DRINKING WATER PROGRAM CITY OF PARAMOUNT WELL 13 AGREEMENT AUTHORIZATION Staff Recommendation: Execute an Agreement and Promissory Note with the City of Paramount, subject to approval as to form by District Counsel, to construct a wellhead treatment system at Paramount Well 13 not to exceed one million seven hundred thousand dollars ($1,700,000). 6. BOTTLED WATER QUALITY Staff Recommendation: For information. 7. GROUNDWATER CONTAMINATION UPDATE Staff Recommendation: For information. 8. ROBERT W. GOLDSWORTHY DESALTER UPDATE Staff Recommendation: For information. 9. MEMBERS PRIVILEGE DIRECTORS REPORTS, INQUIRIES, AND DIRECTIONS TO STAFF 10. ADJOURNMENT Posted by Abigail C. Andom, Deputy Secretary, November 30, Groundwater Quality Committee Page 1 of 1 December 6, 2005

3 MINUTES OF NOVEMBER 1, 2005 A REGULAR MEETING OF THE GROUNDWATER QUALITY COMMITTEE OF THE BOARD OF DIRECTORS OF THE WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA A regular meeting of the Groundwater Quality Committee of the Board of Directors of the Water Replenishment District of Southern California was held on November 1, 2005, at 8:45 a.m., at the District Office, E.166 th Street, Cerritos, California. Chairperson Pat Acosta called the meeting to order and presided thereover. Deputy Secretary Abigail C. Andom recorded the minutes. 1. DETERMINATION OF A QUORUM Committee: Directors Pat Acosta and Albert Robles Staff: Mario Garcia, Hoover Ng, Nancy Matsumoto, Jason Weeks 2. PUBLIC COMMENT None. 3. MINUTES OF THE REGULAR GROUNDWATER QUALITY COMMITTEE MEETING OF AUGUST 12, 2005 The minutes were approved as submitted. 4. AMERICAN WATER WORKS RESEARCH FOUNDATION RENEWAL Senior Engineer Hoover Ng stated the District s annual membership to the American Water Works Association Research Foundation (AWWARF) is up for renewal. He explained the AWWARF sponsors applied research for all aspects of the drinking water industry including water resources, supply, quality, and distribution. Mr. Ng noted the AWWARF is funded through subscriber membership fees, which are typically based on the annual amount of water delivered or served to customers. He stated District staff had, in the past, determined a payment of $40,000 was an appropriate level of membership. AWWARF had requested payment of $42,200 for continued subscription for the period October 2005 to September Assistant Manager/Chief Engineer Mario Garcia stated WRD s membership to the AWWARF affords the District access to and participation in state-of the art research developments in the water industry, and maximizes leverage of pooling resources for mutually beneficial projects and investigations. Discussion followed on the benefits of continued membership to the AWWARF versus the Committee s desire to fund research efforts directly related to the District s projects and programs.

4 Director Acosta recommended the Board approve the $42,200 membership renewal this year, and develop a plan of action for the District to be able to fund and conduct its own research efforts in the future. She also asked staff to evaluate the possibility of securing AWWARF research information from other sister agencies who are members. Director Robles recommended the Board not renew its membership to the AWWARF, and requested staff to research what options the District has in order to have the same status as other cities in the District s service area who are full non-paying members of AWWARF. He also recommended the District fund membership to the Watereuse Foundation in the amount of $10,000. The Committee recommended this item be agendized for the December 7 Board meeting. 5. WATER QUALITY PENDING STAGE 2 DISINFECTION/DISINFECTANT BYPRODUCTS RULE Senior Engineer Hoover Ng stated water purveyors and regulatory agencies alike were faced with the dilemma to improve disinfection capability while reducing disinfection byproducts (DBP). Mr. Ng explained the U.S. Environmental Protection Agency (EPA) was charged with the responsibility to develop new regulations and various rules were enacted to provide more rigorous criteria to ensure effective disinfection while concurrently limiting the amount of DBPs allowed. Stage 1 Disinfection/Disinfectant By-Products (D/DBP) Rule in 2001 requires a water system to measure DBPs throughout their distribution system but would only be required to report a system wide average. Mr. Ng noted a new Stage 2 D/DBP Rule, which will go into effect in 2006, would be more stringent than Stage 1 and would require locational monitoring and reporting. He explained that it is well known that extremities of distribution systems are more likely to have higher levels of DBPs than at other locations. The new rule would require all water systems that disinfect to monitor the level of DBPs throughout their distribution systems. If they find that the DBPs remain higher than the allowed limits at each location, they will need to implement alternative disinfection, such as chloramines, ultraviolet light, or ozone, or other strategies to reduce DBP formation in their system. 6. GROUNDWATER CONTAMINATION UPDATE Senior Hydrogeologist Nancy Matsumoto stated, at the Committee s direction, staff completed the case file review-and-summary effort and had developed a matrix to evaluate the sites, using weighted parameters such as depth to water-supply aquifers, distance from production wells, and degree of groundwater contamination. Ms. Matsumoto explained that the matrix was then used to rank the sites with respect to the level of effort Groundwater Quality Committee Page 2 of 5 November 1, 2005

5 recommended for WRD to expend in assisting the respective lead regulatory agencies with oversight of site characterization, monitoring and remediation. She noted the draft matrix was presented to the Committee at a previous meeting, and to stakeholders from the Central and West Coast Basin Groundwater Contamination Forum. The matrix was well received, and was finalized in accordance with Committee and stakeholder comments. Ms. Matsumoto stated the group ranked the sites into categories associated with levels of effort, and assigned general strategies for them. The second draft matrix was prepared and presented to the Committee and stakeholders at a previous meeting, outlining these groupings and proposed strategies. Ms. Matsumoto stated the resulting proposed program-level options for future management of these sites is now before the Committee for review. Discussion followed. Director Robles recommended the matrix be modified to lower the B category to 85 points. Ms. Matsumoto also stated the EPA had requested WRD s assistance in data collection related to the Omega Chemical Superfund Site at the Whittier/Santa Fe Springs border. The groundwater monitoring data from existing case files would be useful to the EPA (and to WRD) in furthering the understanding of groundwater conditions and contaminant concentrations in the area. The Committee recommended staff issue a request for proposal (RFP) to qualified consulting firms to complete this work and that an update be provided to the Board at the next meeting. The agenda items were taken out of order. 9. WEST COAST BASIN OPERATING PLAN UPDATE Senior Engineer Jason Weeks stated over the past several months, staff with the District s consultant CH2M Hill, have been working on the West Coast Basin Operational Plan Study. Mr. Weeks explained the purpose of the study is to re-evaluate the West Coast Basin operating scheme and determine various alternative operational scenarios given the increasing cost of replenishment water at the barriers. He noted that several interviews were held with stakeholders, and an extensive review of the scenarios was performed at several WRD Technical Advisory Committee (TAC) meetings. At its June and July meetings, the TAC reviewed the proposed operational scenarios and by consensus, determined that additional modeling should be done to evaluate the Groundwater Quality Committee Page 3 of 5 November 1, 2005

6 feasibility of the scenarios presented. Mr. Weeks stated staff worked with the United States Geological Survey (USGS) and with consultant CH2M Hill for the modeling runs using the WRD Regional Groundwater Model. The USGS completed the model simulations of the five potential operational scenarios and presented the results at the October TAC meeting. Mr. Weeks stated the proposed scenarios looked promising and it was suggested that the scenarios be refined and softened from the extremes. The TAC will further review the model runs at its next meeting and it is anticipated the modeling will be finished by January 2006 and the project completed in March or April ABANDONED WELLS UPDATE Ms. Matsumoto provided the Committee with an update on the status of about 217 potentially abandoned wells within the District boundaries. She stated that staff developed a scope of work with the Los Angeles County Department of Health Services (LACDHS), and tasks 1 and 2 have been completed with results presented to the Committee at the July and August meetings. Task 3 would require the WRD and the LACDHS to perform records searches and field investigations to clarify the status of the wells, and prioritize candidate wells which need to be properly capped or destroyed. Ms. Matsumoto stated due to several fortuitous circumstances, staff was able to rapidly complete records searches and reduce the number of remaining unknown status wells while expending significantly less staff time and equipment funds than originally estimated. She informed the Committee that presently staff is preparing to conduct field reconnaissance surveys to clarify the status of the remaining unknown status wells. The Committee reviewed the matrix of Remaining Unknown Status Wells and recommended staff perform another round of follow-up with the identified parties. After this effort has been completed, the information will be provided to the Board members to secure their assistance if necessary. 8. ROBERT W. GOLDSWORTHY DESALTER UPDATE Mr. Garcia stated the Desalter delivered approximately 181 acre-feet of potable water to the City of Torrance during September He noted that the average chloride concentration for the month of September was 991 mg/l, slightly below the 1,000 mg/l line and is the second consecutive month wherein the average is below 1,000 mg/l. Mr. Garcia informed the Committee that staff directed General Pump Company to lower the packer by approximately 10 feet in order to increase the chloride concentrations. This procedure was performed on October 11 to increase the production from the lower sections of the well Groundwater Quality Committee Page 4 of 5 November 1, 2005

7 screens where the water has higher chloride concentrations. The average concentration for October 2005 was just above 1,000 mg/l. Mr. Garcia stated staff would like to look at alternative scenarios for the Goldsworthy Desalter operations if the chlorides remain below 1,000 mg/l for three consecutive months per the Judgment. He noted that with the chloride levels above 1,000 mg/l in October, the District has another couple of months to discuss alternatives. Discussion followed. The Committee requested an update at the next meeting. 10. MEMBERS PRIVILEGE DIRECTORS REPORTS, INQUIRIES, AND DIRECTIONS TO STAFF None. 11. ADJOURNMENT There being no more business to come before the Committee, the meeting was adjourned at 10:35 a.m. ATTEST: Chairperson Director Groundwater Quality Committee Page 5 of 5 November 1, 2005

8 MEMORANDUM ITEM NO. 4 Prepared by: Hoover Ng Reviewed by: Ted Johnson DATE: DECEMBER 6, 2005 TO: FROM: SUBJECT: GROUNDWATER QUALITY COMMITTEE ROBB WHITAKER, GENERAL MANAGER AMERICAN WATER WORKS RESEARCH FOUNDATION RENEWAL SUMMARY The American Water Works Association Research Foundation (AWWARF) sponsors applied research for all aspects of the drinking water industry including water resources, supply, quality, and distribution. AWWARF is funded through subscriber membership fees. Benefits of membership to subscribers include timely notification of and access to new research information. In addition, WRD as a subscriber, may propose research projects and participate in state-of-the-art research developments in the water industry as technical reviewers (for example, AWWARF accepted WRD's research proposal to study the effects of aquitards to minimize contaminant movement, and WRD sits on an technical review panel for aquifer storage and recovery). Through AWWARF, there is maximum leveraging of pooled resources for mutually beneficial projects and investigations. AWWARF bases its fees to agencies on the amount of water delivered for use in an area, and then proportions that amount between surface water and groundwater suppliers. In WRD's service area, this is roughly 65 and 35 percent respectively. Typically, Central and West Basin Municipal Water Districts (CWBMWD) and the Metropolitan Water District of Southern California (MWD) pay for the surface water portion in this area, and WRD pays for the groundwater portion. Historically, by being an AWWARF subscriber, WRD has acted as the umbrella agency on behalf of the local groundwater purveyors, which has allowed them to enjoy subscriber benefits as well. Although WRD's subscription fee has been estimated at $140,000 for full membership, Staff has successfully negotiated a lower rate over the past several years for a reduced membership but still with active privileges. As such, AWWARF has requested payment of $42,400 from WRD for the period October 2005 to September At the Groundwater Quality Committee meeting on November 1, 2005, staff was directed to investigate further to determine if the benefits of being a subscriber can be obtained through West and Central Basin Municipal Water District or other agencies. AWWARF has indicated that the subscription fees currently paid by West and Central Basin Municipal Water Districts do not include WRD, even though WRD purchases imported water from them. It is likely that their subscription rate would increase if the WRD were to retain their membership through them. Also, the West and Central Basin Municipal Water District has only budgeted for their GWQ AWWARF Renewal.doc Page 1 of 2 Groundwater Quality Committee, December 6, 2005

9 current subscription amount and their respective Boards would need to approve of additional increased amounts so that WRD can continue to be a member of AWWARF through them. In addition, Staff queried the Orange County Water District, a similar agency to WRD as a groundwater basin manager, as to their status with AWWARF. They represented that they are a renewing member of AWWARF and that their pumpers have supported and benefited from their continued subscription. Staff will work with our pumpers over the next 6 months to determine if continued membership by WRD is worthwhile to them and if they want WRD to continue to represent their groundwater portion of AWWARF. Before deciding on whether or not to recommend to the Board to renew in the subsequent year, Staff will hold discussions with the pumpers to see if our continued membership holds a benefit for them. FISCAL IMPACT This item has been budgeted for FY STAFF RECOMMENDATION Recommend the Board renew the District s membership in the American Water Works Association Research Foundation for $42,400 for the period October 2005 to September GWQ AWWARF Renewal.doc Page 2 of 2 Groundwater Quality Committee, December 6, 2005

10 MEMORANDUM ITEM NO. 5 Prepared by: Charlene King Reviewed by: Mario Garcia DATE: DECEMBER 6, 2005 TO: FROM: GROUNDWATER QUALITY COMMITTEE ROBB WHITAKER, GENERAL MANAGER SUBJECT: SAFE DRINKING WATER PROGRAM - CITY OF PARAMOUNT WELL 13 AGREEMENT AUTHORIZATION SUMMARY The City of Paramount s Well 13 is currently affected with arsenic, manganese, and hydrogen sulfide. The well is currently offline due to the contamination. The City of Paramount has requested assistance from WRD, through the Safe Drinking Water Program, to install a treatment system to return the well to service. As a Priority B (contamination of a nonanthropogenic nature) candidate, Paramount s project would be a part of the District s loan program. The City would be the lead agency for construction and installation of the treatment system. In compliance with the environmental requirements of a project, the City of Paramount has posted and filed a Notice of Exemption based on a Categorical Exemption finding. The wellhead treatment system will consist of a complete pressurized filter system and will be built within the boundaries of the existing well site owned and operated by the City of Paramount. The treatment system will have the capacity to treat the full flow of the well. Once constructed, the treated water will be disinfected prior to entering the distribution system. At its August 12, 2005 meeting, the Groundwater Quality Committee directed staff to proceed with all Priority B candidate projects including Paramount s Well 13. Since that time, staff has been working with District Counsel and Paramount s staff and city attorney to finalize the agreement that will document the loan funding through the SDWP. That agreement is attached for the committee s review and recommended approval to the Board. FISCAL IMPACT The cost of the project is $1,700,000. The no-interest, 10-year loan to the City of Paramount includes this full amount. The cost of the SDWP for FY 2005/06 was estimated at an additional $2 million, which includes this Priority B project. STAFF RECOMMENDATION Execute an Agreement and Promissory Note with the City of Paramount, subject to approval as to form by District Counsel, to construct a wellhead treatment system at Paramount Well 13 not to exceed one million seven hundred thousand dollars ($1,700,000) SDWP Paramount 13 Agreement.doc Page 1 of 1 Groundwater Quality Committee, December 6, 2005

11 LOAN AGREEMENT BETWEEN THE CITY OF PARAMOUNT AND THE WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA Paramount Well 13 Agreement DRAFT

12 LOAN AGREEMENT This Loan Agreement ( Agreement ) is made and entered into this day of, 2005, by and between the Water Replenishment District of Southern California ( WRD ) and the City of Paramount ( City ). W I T N E S S E T H WHEREAS, the City owns and operates the groundwater well commonly referred to as Paramount Well 13" (hereinafter, Well 13") which is relied upon as sources of acceptable drinking water. The water pumped from Well 13 is currently affected by arsenic and manganese at levels exceeding those allowed by the California Department of Health Services ( DOHS ). As a result of these excessive levels, the ability of the City to utilize Well 13 as drinking water sources has come into question; WHEREAS, arsenic and manganese are naturally occurring secondary level constituents regulated by the DOHS. The City has requested assistance from the WRD through the WRD s Safe Drinking Water Program to investigate remediation options available for Well 13; WHEREAS, under the WRD s Safe Drinking Water Program, the WRD provides assistance for secondary level contamination remediation in the form of a no-interest loan to eligible parties for a term of ten (10) years and evidenced by a Promissory Note (the Note ). Said loan is made by the WRD to eligible parties for the purpose of funding the remediation of secondary level contamination; WHEREAS, the WRD is willing to make a loan ( Loan ) to the City to fund the design, installation and construction of a wellhead treatment system at Well 13 subject to certain conditions, more specifically set forth herein and in the Note; NOW, THEREFORE, in consideration of the terms, covenants and conditions hereinafter contained to be kept and performed by the parties hereto, it is mutually agreed and provided as follows: 1. Loan. Subject to Applicable Laws (as defined below), the WRD shall loan the City, on an unsecured, no interest basis, an amount not to exceed One Million Seven Hundred Thousand and No/100 Dollars ($1,700,000) (the Maximum Loan Amount ) for the design, construction, installation and other services required to install and operate wellhead treatment systems at Well 13 to reduce the levels of arsenic and manganese in the groundwater pumped from Well 13 (hereinafter collectively referred to as Project ) to achieve acceptable drinking water levels established by the DOHS. The WRD s loan to the City shall be evidenced by a Note of even date herewith made by the City to and for the benefit of the WRD, evidencing and reflecting the terms and conditions of said loan. A true and correct form of said Note is attached hereto as Exhibit A. Paramount Well 13 Agreement DRAFT

13 2. Loan Disbursements. Upon the written request of City in accordance with Paragraph 3, WRD shall disburse loan proceeds to City (each, a Loan Disbursement ) up to the Maximum Loan Amount, provided that no Event of Default (as defined below) exists and subject to City s full compliance with the specific terms and conditions set forth herein. Each Loan Disbursement shall be used by City solely and exclusively to reimburse City for the costs incurred by City for the design, installation, and construction of the Project, and for no other purpose whatsoever. City shall not be liable for any portion of the Maximum Loan Amount not actually disbursed to the City as a Loan Disbursement. Payments to the WRD shall be made at the times and in the amounts set forth in the Note. 3. Approved Budget. Loan funds are allocated to pay the costs of the Project shown in the Project Budget attached to this Agreement as Exhibit B ( Budget ). City shall not amend the Budget or reallocate Loan funds from one Budget line item to another without the prior written approval of WRD. The Budget has been prepared by City and includes the entire aggregate costs for the Project. WRD shall not be required to make any advance for any cost which is not set forth in the Budget. WRD shall not be obligated to make any advance which, when added to all prior advances from the same line item, would exceed City s actual cost incurred for that line item or the budgeted amount for that line item shown in the Budget, whichever is the lesser. WRD shall have no obligation to make any advance from any contingency line item unless WRD consents to such advance in its sole discretion. WRD may make advances from any line item in the Budget for purposes other than those for which such amounts were originally allocated, and may change the relative amounts allocated to particular line items in the Budget, all as WRD in its sole discretion deems necessary or advisable. 4. Draw Requests. At such time as City shall desire to draw down a portion of the Maximum Loan Amount from the WRD, City shall request a Loan Disbursement from the WRD by providing a written draw request notice to the WRD setting forth the specific amount requested and describing, with reasonable particularity, the goods and services for which the Loan Disbursement will be used in connection with the Project. WRD is not obligated to disburse any portion of the Maximum Loan Amount unless and until the following conditions are satisfied: (a) City shall have provided a written request to WRD detailing the line-item costs incurred by City in connection with the construction of the Project, including the schedule, by trade and by percentage of completion of the Project, and detailing the portion of the work completed and the portion not completed, along with any other information and documentation reasonably requested by WRD; (b) with the Budget; The Loan Disbursement requested by the City shall be consistent (c) There shall be no Event of Default or any breach of this Agreement or the Note that could result in the occurrence of an Event of Default with the Paramount Well 13 Agreement DRAFT

14 passage of time; and (d) The City shall provide WRD with copies of all waivers and releases executed by designers, contractors, and/or consultants relating to work performed on the Project within thirty (30) days of the receipt of the same from said designers, contractors and/or consultants. 5. Construction of Project. The City shall be solely responsible for contracting with and overseeing the work of the contractors and consultants retained to perform all of the work required to design and construct the Project. The City shall retain only a licensed and qualified contractors and consultants to perform the above-described work. The WRD shall have no responsibility relating to the work of said contractors and consultants. However, the WRD shall have the right to monitor the design and construction of the Project and to be present at the Project site at the time that the work is performed. In addition, the City and its contractors and consultants will promptly provide the WRD with all data, analyses, reports or other documentation relating to the operation of the Project. City shall pursue the construction of the Project with diligence and continuity, in a good and workmanlike manner, in accordance with sound building and engineering practices, and in compliance with all applicable laws and governmental requirements. City shall cause the substantial completion of the Project to occur by no later than, 200 ( Completion Date ). The City shall be solely responsible for obtaining and complying with all permits and other governmental approvals necessary for the design, construction, installation and operation of the Project, including, but not limited to, all environmental permits and the National Pollutant Discharge Elimination ( NPDES ) permits. 6. Inspection and Audit. WRD and its agents may enter upon the Project site at any reasonable time, unless WRD deems such inspection is of an emergency nature, in which case the City shall provide WRD with immediate access to the Project site. City will furnish to WRD and its agents for inspection and copying, all plans, shop drawings, specifications, and other documents and information relating to the Project that WRD may request from time to time. City will make all of its books, records and accounts available to WRD and its agents upon request and will permit them to review and copy the same, and WRD shall have the right to audit City s books, records, and accounts relating to the Project to ensure City s compliance with the requirements of this Agreement. This Paragraph 6 shall survive the termination or expiration of this Agreement. 7. Notice to WRD. City shall, within seven (7) business days after City discovers the occurrence of any of the following events (to the best of City s knowledge), notify WRD in writing thereof, specifying in each case the action City has taken or will take with respect thereto: (a) any violation of any law or governmental requirement; (b) any litigation, arbitration or governmental investigation or proceeding instituted or threatened against City or the Project, and any material development therein; (c) any actual or threatened condemnation of any portion of the Project site, any negotiations with respect to any such taking, or any loss of or substantial damage to the Project site; (d) any labor controversy pending or threatened against City or any contractor, and any material development in any labor controversy; (e) any notice Paramount Well 13 Agreement DRAFT

15 received by City with respect to the cancellation, alteration or non renewal of any insurance coverage maintained with respect to the Project; (f) any failure by City or any contractor, subcontractor or supplier to perform any material obligation under any construction contract, any event or condition which would permit termination of a construction contract or suspension of work thereunder, or any notice given by City or any contractor with respect to any of the foregoing; (g) any lien filed against the Project site or any stop notice served on City in connection with construction of the Project; or (h) the lapse of any required permit, license, certificate or approval with respect to the Project or the failure of any of the foregoing to be in full force and effect. 8. Reports and Testing. City shall (a) promptly deliver to WRD copies of all reports, studies, inspections and tests made on the Project site or any materials to be incorporated into the Project, and (b) make such additional tests on the Project site as WRD reasonably requires. City shall immediately notify WRD of any report, study, inspection or test that indicates any adverse condition relating to the Project. In addition, for as long as the Project is operational, City shall provide WRD with well data, water samples, and/or copies of any reports and analyses relating to the water and well data, at no cost to WRD. This Paragraph 8 shall survive the termination or expiration of this Agreement. 9. Insurance and Indemnification. (a) City shall procure and maintain at all times during the term of this Agreement a policy or policies of insurance covering loss or damage relating to the Project and City s operations in connection therewith, with such coverages, limits of liability, and deductibles as determined by the City in its reasonable discretion. Any insurance maintained by the City or the City s contractors and subcontractors in connection with the Project shall name WRD as an additional insured, and any insurance maintained by the City shall specifically cover the liability assumed by the City hereunder to the extent insurable by a commercially reasonably available Commercial General Liability Policy, including, but not limited to, the City s obligations under Paragraph 9(b). City shall deliver certificates of such policies to WRD within ten (10) business days of WRD s request therefor. (b) The City shall indemnify, defend (with counsel of the WRD s choosing), protect and hold the WRD free and harmless from and against any and all claims, demands, injuries, losses, damages, suits or liabilities of whatever kind or character, at any time made, asserted or claimed, by or on behalf of any person or persons, for or on account of any matter or thing, including injury or death of any person or persons and damage to property, including all costs and attorneys fees of the WRD in defending against any one or more of the same, resulting from or arising out of, or in any way connected with the Project, including but not limited to the design, construction, installation, maintenance or operation thereof. This Paragraph 9 shall survive the termination or expiration of this Agreement. 10. Event of Default. The occurrence of any one of the following shall be an Event of Default under this Agreement: Paramount Well 13 Agreement DRAFT

16 (a) An Event of Default under the Note. (b) Any covenant, agreement or condition in this Agreement (other than covenants to pay the Loan and other than an Event of Default expressly listed in this Section 10) is not fully and timely performed, observed or kept, and such failure is not cured within twenty (20) business days after notice from WRD. (c) Any statement, representation or warranty in any of this Agreement, or in the Budget, or any other writing heretofore or hereafter delivered to WRD in connection with the Loan is false, misleading or erroneous in any material respect on the date hereof or on the date as of which such statement, representation or warranty is made. (d) be in full force and effect. Any insurance required under this Agreement lapses or ceases to (e) The construction of the Project, or any materials for which a Loan Disbursement has been requested, fail(s) to comply with the Plans, the Budget, or any laws or governmental requirements. (f) WRD determines that construction of the Project will not be completed in accordance with this Agreement on or before the Completion Date, or City fails to complete construction of the Project (and obtain all applicable permits, licenses, certificates and approvals) in accordance with this Agreement on or before the Completion Date. (g) Any required permit, license, certificate or approval with respect to the Project lapses or ceases to be in full force and effect. (h) Construction of the Project is enjoined for a period of more than sixty (60) calendar days, or City or WRD is enjoined or prohibited from performing any of its respective obligations under this Agreement for a period of more than sixty (60) calendar days. (i) In WRD s reasonable opinion, the prospect of payment of all or any part of the Loan has been impaired because of a material adverse change in the financial condition, results of operations, business or properties of City, directly or indirectly, for any part of the Loan. Notwithstanding the foregoing, provided that no Event of Default exists in any other respect under this Agreement, no Event of Default shall exist upon a material adverse change in City s financial condition if City remedies such material adverse change to the satisfaction of WRD within twenty (20) business days of WRD s written notice to City that, in WRD s reasonable opinion, a material adverse change has occurred. 11. Remedies. Upon an Event of Default, WRD may (but shall not be obligated to), declare any or all of the outstanding and unpaid principal balance immediately due and payable, without presentment, demand, protest, notice of protest, notice of acceleration or of Paramount Well 13 Agreement DRAFT

17 intention to accelerate or any other notice, declaration or act of any kind, all of which are hereby expressly waived by City. In addition to and without limitation of the foregoing, upon an Event of Default, WRD may, but shall not be obligated to, do any one or more of the following without notice to City: (a) terminate its commitment to lend any monies; (b) terminate any obligation to extend any other credit to or for the account of City; and/or (c) exercise any and all rights and remedies afforded by this Agreement, law, equity or otherwise. 12. No Waiver. No delay or omission of WRD to exercise any right, power or remedy accruing upon an Event of Default shall impair such right, power or remedy or be construed to be a waiver of such Event of Default or any acquiescence therein. No acceptance by WRD of any partial payment on account of the Loan shall constitute a waiver of such Event of Default. No remedy herein conferred upon or reserved to WRD is intended to be exclusive of any other remedies provided for in the Note or this Agreement, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder, or under the Note, or now or hereafter existing at law or in equity or by statute. Every right, power and remedy given to WRD by this Agreement or the Note shall be concurrent, and may be pursued separately, successively or together against City, and every right, power and remedy given by this Agreement or the Note may be exercised from time to time as often as may be deemed expedient by WRD. 13. Entire Agreement. The provisions of this Agreement contain the entire agreement between the parties hereto relating to the subject matter hereof, and supersede all prior agreements, whether written or oral. 14. Amendments. This Agreement may not be changed or modified in any manner except by written amendment executed by the authorized representatives of both the WRD and the City. Absent an Event of Default, the Note shall not be rescinded or revoked prior to its maturity date. Any waiver of any of the provisions of this Agreement shall be effective only if in a writing, signed by the authorized representatives of both the WRD and the City. No waiver, modification or amendment of any provisions of any of this Agreement that is made orally shall be effective for any purpose unless it is documented in writing as set forth above. 15. Interpretation. Whenever possible, each provision of this Agreement shall be interpreted in a manner to be effective and valid under applicable law. However, if any provision, or any part of any provision, should be prohibited or invalid under applicable law, such provision or part of such provision, shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. The Parties agree that each party and its legal counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. The provisions of California Civil Code 1654 are hereby specifically waived by both parties hereto. 16. No Assignment. Neither party to this Agreement shall assign the Paramount Well 13 Agreement DRAFT

18 Agreement as a whole without written consent of the other party. If either party attempts to make such an assignment without that consent, such assignment shall be void and the party that attempted to assign shall nevertheless remain legally responsible for all obligations under the Agreement. 17. Attorneys Fees. To the extent that any dispute arises out of this Agreement, the prevailing party shall be entitled to recover from the other party its reasonable attorneys fees and costs incurred in connection with that dispute. 18. Authority of Signatories. The parties hereby warrant that their respective signatories to this Agreement are authorized to execute this Agreement and to fully bind their respective companies to the duties and obligations set forth in this Agreement. 19. Governing Law. This Agreement and any issues or dispute that arises hereunder shall be governed, construed and determined under and pursuant to the law of the State of California. [SIGNATURES ON FOLLOWING PAGE] Paramount Well 13 Agreement DRAFT

19 IN WITNESS WHEREOF, the undersigned authorized representatives hereby execute and enter into this Agreement as of the day and year set forth above. THE CITY OF PARAMOUNT Signature Date Name Title WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA Signature Date Signature Date Name President, Board of Directors Title Name Secretary, Board of Directors Title Approved As To Form WESTON, BENSHOOF, ROCHEFORT, RUBALCAVA, & MACCUISH CITY OF PARAMOUNT By: Attorneys for the Water Replenishment District of Southern California By: Office of the City Attorney Paramount Well 13 Agreement DRAFT

20 EXHIBIT A FORM PROMISSORY NOTE [TO BE ATTACHED] Paramount Well 13 Agreement DRAFT

21 PROMISSORY NOTE Up to $1,700,000.00, 2005 Cerritos, California FOR VALUE RECEIVED, the City of Paramount ("Borrower"), whose address is Colorado Avenue, Paramount, CA 90723, hereby executes this Promissory Note ( Note ) in favor of the Water Replenishment District of Southern California ("Note Holder"), whose address is E. 166 th Street, Cerritos, CA Borrower agrees to pay to Note Holder any amounts disbursed by Note Holder to Borrower ( Loan Disbursements ) pursuant to the terms of the Loan Agreement entered into by Borrower and Note Holder of even date herewith ( Loan Agreement ), up to the aggregate principal sum of ONE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($1,700,000.00) ( Maximum Loan Amount ), subject to the terms and conditions set forth below. All amounts due hereunder shall be payable in lawful money of the United States of America to Note Holder at the above address, or at such other place as may be designated by Note Holder from time to time. 1. Unsecured Obligations; Default Interest. The obligations of Borrower evidenced by this Note shall be unsecured. Except as otherwise provided herein, Note Holder shall not charge regular interest on any Loan Disbursements made to Borrower, subject to any and all laws, statutes, ordinances, or regulations ( Applicable Laws ) which may be applicable to Borrower, Note Holder, this Note, or the Loan Agreement. Borrower shall pay to Note Holder all charges for returned items and all other bank charges incurred by Note Holder, as well as Note Holder s standard wire transfer charges for each wire transfer made under this Note. Notwithstanding the foregoing, if Borrower fails to make when due any payment of principal or any other amounts owed by Borrower under this Note, or otherwise commits an Event of Default (as defined below), then any and all amounts payable hereunder shall, immediately and without notice to Borrower (which notice is hereby waived to the extent permitted by law), bear interest at the lesser of (a) ten percent (10%) per annum, or (b) the maximum, non-usurious rate then permitted by Applicable Law for such default interest rate ( Default Interest Rate ). The Default Interest Rate shall accrue on all amounts disbursed hereunder to Borrower that remain outstanding and unpaid from and after the date of the Event of Default, including without limitation any and all costs and expenses incurred by Note Holder in connection with the enforcement of this Note and/or collection of amounts due and owing under this Note. 2. Payments. Borrower shall make annual payments of principal during the term of this Note commencing on January 1 or June 1, whichever date first occurs after the initial Loan Disbursement ( Payment Due Date ); provided, however, that if in any year the Payment Due Date falls on a Saturday, Sunday or California statewide holiday, the principal payment shall be due and owing on the next succeeding business day thereafter. Until such time as the Maximum Loan Amount has been entirely disbursed to Borrower, each annual payment of principal shall be in an amount equal to the lesser of: (i) ten percent (10%) of the total cumulative amount of Loan Disbursements made to Borrower during the immediately preceding twelve (12) month period; or

22 (ii) one hundred and seventy thousand dollars ($170,000.00) ( Annual Payment ). Notwithstanding the foregoing, following the date of the Loan Disbursement which causes the entire Maximum Loan Amount to have been disbursed to Borrower, the Annual Payment shall be an amount equal to the quotient of the unpaid balance of this Note divided by the number of Payment Due Dates remaining under this Note to ensure that the entire unpaid balance is repaid on or before the Maturity Date. 3. Maturity Date. This Note will mature, and all amounts owed hereunder, shall be all due and payable on the tenth (10 th ) anniversary of the date of this Note, which is, 20 (the Maturity Date ). Borrower shall not be entitled to request or receive from Note Holder any further Loan Disbursements on or after the Maturity Date, regardless of whether the entire Maximum Loan Amount has been disbursed prior to the Maturity Date. There is no pre-payment penalty or premium for early payment of this Note. 4. Event of Default. Any of the following events shall be an "Event of Default" under this Note: (a) a default by Borrower in payment of any annual principal payment in the full amount due and owing on or before each Payment Due Date; (b) a default by Borrower in payment of the entire outstanding balance of principal and other charges due hereunder on or before the Maturity Date; (c) a breach by Borrower of any term, covenant, condition, agreement, representation, or warranty set forth herein or in the Loan Agreement. 5. Remedies. Upon an Event of Default, Note Holder may (but shall not be obligated to), declare any or all of the outstanding and unpaid principal balance immediately due and payable, without presentment, demand, protest, notice of protest, notice of acceleration or of intention to accelerate or any other notice, declaration or act of any kind, all of which are hereby expressly waived by Borrower. In addition to and without limitation of the foregoing, upon an Event of Default, Note Holder may, but shall not be obligated to, do any one or more of the following without notice to Borrower: (a) terminate its commitment to lend any monies; (b) terminate any obligation to extend any other credit to or for the account of Borrower; and/or (c) exercise any and all rights and remedies afforded by this Note, the Loan Agreement, law, equity or otherwise. 6. Attorneys Fees and Costs. Upon the occurrence of an Event of Default, Borrower agrees to pay, to the extent permitted by Applicable Law, all costs, charges, disbursements and attorneys' fees incurred by Note Holder in collecting or enforcing payment thereof or in protecting the same. 7. Borrower s Waivers. Borrower hereby waives presentment for payment, demand, notice of demand and of dishonor and nonpayment of this Note, notice of intention to accelerate the maturity of this Note, notice of acceleration, protest and notice of protest, diligence in collecting, and the bringing of suit against any other party. Borrower hereby agrees to all renewals, extensions, modifications, partial payments, releases, substitutions or additions of security, in whole or in part, with or without notice, before or after maturity. Further, Borrower expressly agrees that, without in any way affecting its liability hereunder, Note Holder may extend the Maturity Date or the time for

23 payment of any installment due hereunder. By accepting payment of any sum hereunder after its due date, Note Holder shall not waive its rights either to require prompt payment when due of all other sums hereunder or to declare a default hereunder for failure to make prompt payment of such other sums. No delay or omission on the part of Note Holder in exercising any right under the Note shall operate as a waiver of such right. 8. Reinstatement of Obligation. Borrower agrees that, to the extent that Note Holder receives any payments under this Note, which payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or otherwise required to be repaid to either Borrower or, as the case may be, Borrower s debtor-in-possession, estate, trustee, receiver or any other party, for any reason, including, without limitation, under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such payment or repayment, the portion of Borrower s obligation hereunder which has been paid, reduced or satisfied by the amount which Note Holder was required to disgorge shall be reinstated and continued in full force and effect as of the date such initial payment, reduction or satisfaction occurred. 9. No Assignment. Borrower shall not assign, transfer or convey this Note to any third party without the prior written consent of Note Holder, which shall not be unreasonably withheld, conditioned or delayed. 10. Governing Law. This Note shall in all respects be governed by and construed in accordance with the internal laws of the State of California, including all matters or construction, validity and performance. Borrower consents to the jurisdiction of the courts of the State of California. 11. No Modifications or Amendments; No Waiver. Except as specified herein, this Note may not be amended, modified or changed, nor shall any waiver of the provisions hereof be effective, except only by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, modification or discharge is sought. Additionally, a waiver of any provision in one event shall not be construed as a waiver of any other provision at any time, as a continuing waiver, or as a waiver of such provision on a subsequent event. 12. Separability. Any provision of this Note which shall be held by a court to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision or term hereof, and such other provisions or terms shall remain in full force and effect. 13. Time of the Essence. Time is of the essence as to all payments due hereunder. 14. Authority of Signatories. Each individual signing this Note on behalf of Borrower represents and warrants that he or she is duly authorized to execute and deliver this Note on behalf of Borrower. IN WITNESS WHEREOF, this Note is executed as of the day first written above

24 THE CITY OF PARAMOUNT By: Its:

25 MEMORANDUM ITEM NO. 6 Prepared by: Hoover Ng Reviewed by: Ted Johnson DATE: DECEMBER 6, 2005 TO: FROM: SUBJECT: GROUNDWATER QUALITY COMMITTEE ROBB WHITAKER, GENERAL MANAGER BOTTLED WATER QUALITY SUMMARY It is a myth that bottled water is safer than tap water. This is not necessarily so. Whereas tap water must meet strict regulatory controls for high quality and is tested before arriving at the tap, bottled water does not have such a rigorous testing program. This is because tap water is currently regulated by the U.S. Environmental Protection Agency and the California Department of Health Services (CDHS) Office of Drinking Water, and must meet maximum contaminant levels (MCLs) for drinking water safety and aesthetics, whereas bottled water is considered a food and is regulated by the U.S. Food and Drug Administration (FDA) and the CDHS Food and Drug Branch. A study by the National Resources Defense Council (NRDC) 1999 report titled Bottled Water - Pure Drink or Pure Hype?, provided results of testing more than 1,000 bottled water samples and compared them to the then current bottled water standards issued by FDA. They found 33 percent exceeded bacteriological standards for bottled water and 20 percent contained a synthetic organic chemical (although the levels were below the bottled water standards). They concluded that bottled water is not necessarily any safer than tap water, but recommended more rigorous regulations for bottled water. Since the publication of the 1999 report, more rigorous regulations and oversight have been implemented for bottled water. Bottled water standards are now based on EPA standards for drinking water, which includes physical, chemical, radiological and microbiological standards, but are not exactly the same. One difference is less monitoring for bacteria. The most common problem of bottled water is that they may leave the bottling plant after treatment without any bacteria and therefore be in compliance, but in time, bacteria can regrow. Some studies found microbes growing inside the bottles on supermarket shelves (EPA). Bottled water now must be labeled with expiration dates to minimize this from occurring. In addition, the water can have an undesirable taste due to the use of plastic containers. Quite often, people prefer bottled water because it tastes better than tap water. Tap water is typically disinfected with chlorine to ensure that there are no harmful organisms in the water, GWQ - Bottled WQ.doc Page 1 of 2 Groundwater Quality Committee, December 6, 2005

26 but this chlorine can cause a slight chemical taste. Bottled water generally does not add chlorine. If tap water is refrigerated or allowed to sit in an open container for a while prior to consumption, the chlorine will evaporate, thereby improving the taste considerably. Sources of water for bottled water vary greatly and can be misleading. The NRDC notes that about 25 to 40% of bottled water suppliers actually use municipal water supplies for their source, which could be either surface or ground water or a blend; these include Aquafina from Pepsi Cola and Dasani from Coca Cola. The FDA requires truth in advertising and conformance with the following terms and descriptions: Artesian well water is water that is under pressure in the ground because it is in a confined aquifer and would erupt above the ground surface if a well is drilled into it; it is believed that this water may be the least likely to be contaminated. Mineral water is groundwater that contains at least 250 ppm of total dissolved solids. Spring water is groundwater that naturally flows onto land, and must be collected only at the source of the spring. Well water is pumped from an aquifer. Usually, both tap water and bottled water are further treated to ensure that it meets applicable standards. For tap water, surface flows are filtered and disinfected with chlorine, and groundwater is typically disinfected with chlorine. For bottled water, treatment can include any or all of the following: filtration, disinfection with ultraviolet light or ozone, reverse osmosis, or activated carbon. If additional treatment is utilized, this information must be provided to the consumer. In summary, both bottled water and tap water are under government oversight and are safe. But, bottled water can cost up to 1,000 times more than tap water. In emergencies, however, where the tap water service is interrupted, bottled water can provide a vital source of drinking water until the tap water source is returned to service. FISCAL IMPACT None. STAFF RECOMMENDATION For information GWQ - Bottled WQ.doc Page 2 of 2 Groundwater Quality Committee, December 6, 2005