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HomeMy WebLinkAboutMINUTES - 08081995 - D5 D. 5 TO: BOARD OF SUPERVISORS FROM: VAL ALEXEEFF, DIRECTOR GROWTH MANAGEMENT & ECONOMIC DEVELOPMENT AGENCY AND VICTOR J. WESTMAN, COUNTY COUNSEL DATE: AUGUST 8, 1995 SUBJECT: DOUGHERTY VALLEY SETTLEMENT WITH EBMUD SPECIFIC REQUEST(S)OR RECOMMENDATIONS)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: CONSIDER approval of settlement agreement in EBMUD vs Contra Costa County et al, No. C93-00235 and Contra Costa County vs EBMUD et al, No. 727221-7. FISCAL IMPACT: No direct cost to General Fund. Staff costs covered in fees. BACKGROUND/REASONS FOR RECOMMENDATIONS: The July 28, 1995 version of the settlement agreement is attached (Attachment A), along with a summary of key points prepared by EBMUD (Attachment B). This version is to be considered by EBMUD on August 8, 1995. This document has been negotiated by staff under general direction of the Board of Supervisors and EBMUD Board. CONTINUED ON ATTACHMENT: _YES SIGNATUREt A, RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON August 8 , 1995 APPROVED AS RECOMMENDED X OTHER X Victor Westman, County Counsel , presented,.the_.staff .recommendationx-that the Boatd:?of .Supervisors approve the above settlement agreement and direct staff to take all further actions necessary to see that it is finally executed and entered where it is to be filed. On motion of $upervisor DeSaulnier, IT IS BY TH�O 1C E9�,QaED that the staff recommendation is APPROVED. I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN AND ENTERED ON THE _UNANIMOUS(ABSENT ) MINUTES OF THE BOARD OF SUPERVISORS ON THE AYES: 2 , 4 . 5 NOES: 1 , 3 DATE,SHOWN. ATTESTED August 8 , 1995 ABSENT: none ABSTAIN: none PHIL,BATCHELP14,CLERK Oy THE BOARD OF SUPE SORS(NY COUNT MINISTRATOR VA:dg BY1A11 J.DEPUTY ebmudset.bo Contact: Val Alexeefl'(646-1620) CC: County Administrator County Counsel GMEDA Departments EBMUD(via GMEDA) 1 1 ATTACHMENT A DRAFT July 28, 1995 (Second Version) AGREEMENT TO SETTLE LITIGATION RELATING TO THE DOUGHERTY VALLEY GENERAL PLAN AMENDMENT, SPECIFIC PLAN AND ENVIRONMENTAL IMPACT REPORT AND RELATING TO THE WATER SUPPLY MANAGEMENT PROGRAM AND ENVIRONMENTAL IMPACT REPORT OF THE EAST BAY MUNICIPAL UTILITIES DISTRICT This Agreement is entered into by and among the East Bay Municipal Utilities District, a municipal utility district ("EBMUD" or the "District"), the County of Contra Costa, a political subdivision of the State of California (the "County"), Windemere Ranch Partners, a California limited partnership ("Windemere"), and Shapell Industries of Northern California, a Division of Shapell Industries Inc., a Delaware corporation ("Shapell"). This Agreement is effective as of August _, 1995. RECITALS A. Windemere and Shapell are the owners of certain real property (the "Property") in the Dougherty Valley, which is located in an unincorporated area of southern Contra Costa County. On December 22, 1992, the County approved a General Plan Amendment and a Specific Plan for the Property, and certified as adequate a final environmental impact report for the project (the "1992 Approvals"). B. In January, 1993, EBMUD filed a lawsuit entitled EBMUD v. County of Contra Costa et al., No. C93-00235, in Contra Costa County Superior Court (the "Dougherty Valley Lawsuit") challenging the legal adequacy of the 1992 Approvals. C. In October, 1993 EBMUD adopted an updated Water Supply Management Program and certified as adequate a final environmental impact report for the Program (the "WSMP"). D. In December, 1993, the County, Windemere and Shapell filed lawsuits entitled County of Contra Costa v. EBMUD et al., No. 727221-7, Windemere Ranch Partners v. EBMUD et al, No. 727243-9 and Shapell Industries Inc. v. EBMUD et al., No. 727206-8, all in Alameda County Superior Court (the "WSMP Lawsuits"), challenging the legal adequacy of the EIR supporting the Water Supply Management Program. E. On April 25, 1994, the Dougherty Valley Lawsuit was heard in Contra Costa Superior Court before the Honorable David L. Allen. On May 26, 1994, the court issued its 1 DRAFT July 28, 1995 (Second Version) ruling on the Lawsuit, holding that the 1992 Approvals were not legally adequate insofar as they related to the provision of water. On September 23, 1994, The County, Windemere and Shapell filed notices of appeal. F. In January, 1995 the Board of EBMUD adopted the WSMP Action Plan for potential use of American River water. G. The parties desire to resolve these Lawsuits without further litigation, to provide a framework for cooperation, to avoid future lawsuits, and to remove the pending challenges to the WSMP and the 1992 Approvals. Accordingly, for good and valuable consideration, it is hereby agreed as follows: AGREEMENT 1. EARLY CONSULTATION BETWEEN EBMUD AND THE COUNTY (a) The County and EBMUD desire to establish a cooperative mechanism for.early consultation and coordination of water supply planning and land use planning. EBMUD and the County recognize the County's responsibility for land use planning and EBMUD's responsibility for water planning and delivery, including its responsibility to serve existing customers and expected new customers within its existing service area, and to manage the natural resources available to it without undue impacts on the environment. (b) To facilitate consultation and coordination between the two agencies, the Boards of the County and EBMUD shall continue the practice of holding joint meetings of the Boards to discuss matters of mutual interest, such meetings to be held annually or as needed. The meetings shall be scheduled by the County Administrator and the District's General Manager. (c) Designated staff from the County and EBMUD shall establish a regular meeting schedule, with meetings to occur at least quarterly, for the purpose of carrying out the consultation and coordination activities described herein. (d) Exhibit A to this Agreement provides a process for the County's prompt notification and consultation with EBMUD concerning development applications when EBMUD may be considered a possible provider of water service. The purpose of notification and consultation is to provide for early discussion and exchange of information related to the water demand of such proposed new development, the timing of such new demand, the availability of water supply and system capacity to meet the demand, and the impact, if any, of 2 DRAFT July 28, 1995 (Second Version) such demand on service to existing customers taking into account other development projects that are pending or proposed within the County. Where development outside the service area of any water provider is under review by the County, early consultation will include consideration of alternative providers. (e) The County and EBMUD staff shall consult at the regularly scheduled meetings or as needed with respect to the District's water supply planning. Consultation shall include discussion and exchange of information related to the availability of water supply sources, additional storage capacity, and additional facilities to meet the needs of existing and future customers in the County both inside and outside the District's existing service boundary. Where the District is considering the approval or rejection of options for securing additional water supply or capacity, consultation will include consideration and discussion of feasible alternatives. (f) County and District staff shall also consult at the regularly scheduled meetings or as needed with respect to other topics of mutual interest, including but not limited to each agency's long-range planning activities, projected near-term land development projects, reclamation and conservation programs and opportunities, water quality issues, and cooperation on development of new water supplies. (g) The County and the District will also discuss at their meetings pending legislative proposals for coordination of land use and water service planning, and will consult as to possible agreement on proposals for joint support in the legislature. 2. CONFIRMATION OF SERVICE TO COUNTRY CLUB AT GALE RANCH (a) EBMUD confirms that the Country Club at Gale Ranch ("CCGR") project is located within its current district boundaries, and that the District will provide water service to that project. Consistent with the Preliminary Work Agreement between EBMUD and Shapell and with the County's 1994 approvals, facilities will be sized to serve CCGR only. In planning facilities, EBMUD will follow standard engineering practices, and will not design a system for the purpose of precluding future options for extension of service. (b) EBMUD will not oppose annexation of the elementary school site located adjacent to existing district boundaries, as shown on Exhibit B, with the understanding that the property would be used only for school and/or park purposes. At the time that construction of the middle school, as shown on Exhibit B, is being planned, the parties will consult to discuss which water district would be the most logical provider for that site. After such consultation, if it is determined that EBMUD would be the most logical provider for that 3 DRAFT July 28, 1995 (Second Version) site, EBMUD would not oppose annexation of the site into the District with the understanding that the property would be used only for school and/or park purposes. 3. DISMISSAL OF CHALLENGE TO WSMP EBMUD is proceeding with its WSMP, including the WSMP Action Plan which includes potential use of American River.water. Within ten days following execution of this Settlement Agreement, the County, Shapell and Windemere will dismiss with prejudice the WSMP Lawsuits which would eliminate the challenge to implementation of the District's water supply and storage alternatives contemplated therein. County, Shapell and Windemere further agree not to file any lawsuit challenging the approval by EBMUD of actions implementing the WSMP to the extent such actions are in substantial conformance with the WSMP as heretofore approved by EBMUD, and so long as such actions are consistent with, and do not impair the District's ability to carry out, this Agreement. 4. DESIGNATION OF DSRSD AS PREFERRED WATER PROVIDER (a) Shapell and Windemere are using and will continue to use their best efforts to secure permanent water service for that portion of the Dougherty Valley located outside CCGR and the elementary school site (and, conditionally, the middle school site, as described in paragraph 2), from the Berrenda Mesa Water District, and the Dublin San Ramon Service District and/or Alameda County Zone 7. These efforts include negotiation of contracts for the transfer, transmission and delivery of water, environmental review and approval of the transfer and delivery of the water by applicable regulatory agencies, and LAFCO approval of annexation by DSRSD of the above-described portion of the Property. The specific actions and approvals anticipated, and a timetable for their expected dates of completion, are described in Exhibit C. (b) Shapell and Windemere will provide EBMUD with all non-confidential documents prepared in connection with the process described in Exhibit C for review and monitoring. Shapell and Windemere agree that they will consult with EBMUD regarding any concerns EBMUD may raise relating to that process. The purpose of this provision is to assure that EBMUD's ability to develop adequate water supplies for existing customers and future developments within the existing service area, and EBMUD's existing water rights or its efforts to secure additional water supplies, are not adversely affected by the proposed water transfer and delivery. EBMUD reserves the right to comment throughout the process, but will not oppose implementation of the program nor file any legal challenge to any aspect of the DSRSD/Berrenda Mesa water transfer and delivery program, including the adequacy of environmental review and annexation of the Property into DSRSD, to the extent it is carried 4 DRAFT July 28, 1995 (Second Version) out in substantial conformance with the program for the proposed water transfer as described in the documents transmitted from Windemere to EBMUD on July _, 1995. The foregoing waiver shall not bar a legal challenge by EBMUD in the event that the environmental impact report for the proposed water transfer discloses information not previously provided to EBMUD involving potential adverse effects upon EBMUD's existing water rights or its efforts to secure additional water supplies. (c) In the event the proposed DSRSD/Berrenda Mesa water supply cannot be secured, Shapell and Windemere will use best efforts to secure water from alternative sources or suppliers. In so doing, Shapell and Windemere will consult with EBMUD regarding alternative methods of securing and delivering water which do not involve primary water service from EBMUD. The County, Shapell and Windemere shall not initiate annexation proceedings to any other provider before completing this consultation. EBMUD will not file any legal challenge to any aspect of any alternate program for provision of water to the Property, including the adequacy of the environmental review and annexation into any other district, unless and to the extent that EBMUD's ability to develop adequate water supplies for existing customers and future developments within the existing service area, and EBMUD's existing water rights or its efforts to secure additional water supplies would be adversely affected by the alternative water transfer and delivery program. (d) Accomplishment of "best efforts" as referred to in paragraphs 4(a) and (c) above shall require that Shapell and Windemere undertake in good faith a diligent and timely effort to initiate and complete each action, and each regulatory approval process that is necessary to secure permanent water service for Dougherty Valley from DSRSD/Berrenda Mesa, including the anticipated actions and approvals identified in Exhibit C, Section B hereto. In addition, in the event that the foregoing method of providing water service cannot be secured, accomplishment of "best efforts" shall include the diligent pursuit of the additional steps set forth in Exhibit C, Section C. "Best efforts" shall also include a significant financial investment as set forth in Exhibit C. (e) Upon execution of this Agreement, the County will initiate amendments to the Dougherty Valley Specific Plan to designate DSRSD rather than EBMUD as the preferred water provider outside of CCGR and, consistent with paragraph 2, the school sites. Any reference to EBMUD as a potential water provider in the Specific Plan shall be consistent with and include the conditions and limitations set forth in this Settlement Agreement. Prior to action being taken by the County on the Specific Plan, EBMUD shall be given the opportunity to review and comment upon the text of the proposed amendment in the manner specified in paragraph 6(b) of this Agreement. Action on the Specific Plan Amendment shall occur prior 5 DRAFT July 28, 1995 (Second Version) to or contemporaneous with any action taken by the Board of Supervisors on the Development Agreements and rezoning for the Property. (f) Approval of tentative subdivision maps for the Project shall be conditioned on verification of an adequate water supply for the subdivision, the condition to be satisfied prior to recordation of the final map, by verification that capacity exists to serve the specific project ("will serve letters") or comparable evidence of adequate water supply. Where EBMUD is proposed to provide water service to the Property or a portion thereof pursuant to the terms, conditions, and limitations set forth in this Agreement, EBMUD shall not be obligated to provide such verification unless and until the applicable portion has been annexed to EBMUD in conformance with the terms, conditions and limitations set forth in this Agreement. (g) Under the circumstances and subject to the terms, conditions and limitations set forth herein, including without limitation the requirements of paragraph 4(h): (i) No earlier than July 1, 1999, Shapell and Windemere may submit to EBMUD a request to initiate preliminary planning work for water service from EBMUD. Upon receipt of such request, EBMUD will undertake the activities for preparation of a preliminary work agreement ("PWA") referenced as "PWA Development" on Exhibit D to this Agreement, not including retention of the consultant and execution of the PWA. EBMUD, Windemere and Shapell shall utilize best efforts to complete these activities by December 31, 1999. All work performed by EBMUD pursuant to this request shall be undertaken at Shapell's and Windemere's sole expense, and undertaking such work shall provide no assurance for the provision of water service unless and until the Property is annexed to EBMUD as provided herein. (ii) At Shapell's and/or Windemere's request made no earlier than January 1, 2000, EBMUD will enter into a PWA with Shapell and/or Windemere, retain consultants as necessary and perform the work included in the PWA, including project development, environmental documentation, and project design as shown on the estimated timetable in Exhibit D. Any such planning, project development and design work shall be undertaken at Shapell's and Windemere's sole expense, and undertaking such work shall provide no assurance for the provision of water service unless and until the property is annexed to EBMUD as provided herein. (iii) EBMUD, Windemere and Shapell shall cooperate through the exercise of best efforts to conduct and complete the activities in (ii) above in a timely manner which (following annexation, facilities construction and other required activities) will allow 6 DRAFT July 28, 1995 (Second Version) commencement of hook-ups to the Property by January 1, 2002. The parties to the PWA shall utilize all reasonably available techniques to reduce the estimated shortest time shown on Exhibit D for performing the planning activities in (ii) above, including the use of outside consultants at Windemere's and/or Shapell's. expense, and phasing of planning and construction; provided, however, nothing herein constitutes a commitment or guarantee by EBMUD that, despite the use of best efforts, activities in (ii), above, and construction activities can be completed in time to commence hook-ups by January 1, 2002. (iv) Shapell and Windemere shall not submit an application to LAFCO for annexation to EBMUD of the Property outside of CCGR and the elementary school site (and possibly the middle school site, as provided in paragraph 2), or any part thereof, prior to July 1, 2000. EBMUD will cooperate beginning January 1, 2000 in providing in a timely fashion information reasonably necessary for the preparation, submittal and processing of such application. EBMUD agrees that it will not oppose any application for annexation of the Property into the District filed on or after July 1, 2000, and (upon the successful completion of annexation) will provide water service to the Property, but only upon the terms, conditions and limitations set forth in paragraph (h) below. Any work done by EBMUD and any expense incurred by Shapell and Windemere prior to commencement of annexation proceedings does not relieve Shapell and Windemere from continuing their best efforts, as required in paragraph 4(h)(i), to secure an alternative water supply. (v) EBMUD will not approve, or issue a request for bids for construction of, EBMUD facilities to serve the Property prior to completion of annexation proceedings and EBMUD will not provide hook-ups to the Property prior to January 1, 2002. Upon successful completion of the annexation process, EBMUD will take all necessary steps to complete the planning, review and implementation process needed for the provision of water to the Property in a timely fashion. The anticipated specific actions and approvals required, and an estimated timetable for completion of each based upon information currently known to EBMUD, is attached hereto as Exhibit D. The parties to the PWA shall utilize all reasonably available techniques to reduce the shortest estimated time shown on Exhibit D for performing the planning, review and implementation process; provided, however, nothing herein constitutes a commitment or guarantee by EBMUD that, despite the use of best efforts, the planning, review and implementation process can be completed in time to commence hook-ups by January 1, 2002. (h) Shapell and Windemere agree that any annexation application, annexation, and water service for the Property shall be subject to the terms, conditions and limitations set forth below: 7 DRAFT July 28, 1995 (Second Version) (i) Shapell and Windemere shall have worked through exercise of best efforts as defined in Exhibit C to secure an alternative water supply for all or any portion of the Property through Berrenda Mesa, DSRSD, Zone 7 or other providers, but without success. Shapell and Windemere will not seek annexation for any portion of the Property for which a permanent alternative water supply has been secured. (ii) Until such time as a sufficient water supply is available to meet demand in the EBMUD service area and the Property, as determined in the manner set forth in Exhibit E, water service for any portion of the Property outside CCGR and the school sites shown on Exhibit B shall be subject to an offset fee to fund the cost of conservation programs or other methods necessary to offset additional water demand created by new hookups in the development. The calculation for the offset fee, and provisions governing payment of the offset fee are set forth in Exhibit F (iii) The number of new water service hook ups per year would not exceed 600. Any hook ups not used in any given year may be carried forward to future years, but in no event shall the number of hookups in any given year exceed 750. (iv) During any period in which the District has declared a drought emergency pursuant to Water Code § 350, EBMUD would issue no new water service hook- ups to the Property, and County, Windemere and Shapell would not submit an application to LAFCO for annexation to EBMUD and would request that LAFCO withhold decision on any pending application for annexation to EBMUD. (i) It is expressly understood and agreed that notwithstanding any other provision of EBMUD policy or regulation, any amounts paid by Windemere and/or Shapell to EBMUD for planning or design for water service to the Property pursuant to this paragraph 4 shall be credited to and result in an equivalent reduction of the System Capacity Charge applied to the development and shall not be refunded directly to Windemere and/or Shapell. 0) If EBMUD determines, in its sole discretion, that it has adequate water to serve new customers outside the District's boundaries, Shapell and/or Windemere may apply to EBMUD for water service without the restrictions and limitations set forth in this Agreement, and EBMUD will give impartial consideration to such application. However, EBMUD does not contemplate allowing such applications at this time. 5. PROJECTS MUST BE DESIGNED TO ACCOMMODATE RECLAIMED WATER 8 DRAFT July 28, 1995 (Second Version) EBMUD and the County will require that the projects in the Dougherty Valley be designed and built to accept and utilize reclaimed water for irrigation purposes in public and semi-public areas. County, Shapell and Windemere will consult with EBMUD in order that reclaimed water programs contemplated for the Dougherty Valley may be coordinated and compatible with EBMUD's reclamation programs. 6. DEVELOPMENT AGREEMENTS TO BE CONSISTENT WITH THIS AGREEMENT (a) County, Shapell and Windemere agree that any development agreements that may be adopted for the Property shall be consistent with and shall not abrogate or limit compliance with or implementation of, the provisions of this Settlement Agreement. Specifically, any development agreement adopted for the Property shall include the substance of the following provisions: (i) The Dougherty Valley project, including any subsequent modifications, shall be subject to all terms and provisions of this Settlement Agreement; and (ii) Nothing provided in any development agreement adopted for the Property is intended to or does abrogate or limit the enforceability or effectiveness of this Settlement Agreement. If there is conflict between any such development agreement, if such is approved, and this Settlement Agreement, the terms of this Settlement Agreement shall prevail. (b) County, Shapell and Windemere agree that any preliminary data relating to proposed development agreements which is submitted to the Dougherty Valley Oversight Committee shall also be submitted to EBMUD at the same time. In addition, at least 15 days prior to the presentation of such agreements to the County Board of Supervisors, the County, Windemere and Shapell shall provide the text of the agreements to EBMUD for its review with respect to the substance of the provision required by this paragraph. The County, Windemere and Shapell shall make every reasonable effort to incorporate into such agreements EBMUD's comments on the language of any provisions relating to the obligations set forth in this paragraph. (c) The County, Windemere, and Shapell agree not to seek or approve revisions to any development agreement for the Property following its initial adoption in any manner which limits, conditions, restricts, or abrogates any provision of this Settlement Agreement. The County, Windemere and Shapell will submit any such proposed revisions to EBMUD for comment in the manner specified in subparagraph (b) above. 9 DRAFT July 28, 1995 (Second Version) 7. RESOLUTION OF LAWSUIT RELATING TO THE 1992 APPROVALS (a) The parties desire to resolve all disputes relating to the 1992 Approvals, and to that end, all parties agree to take action jointly to accomplish by appropriate procedures and with the appropriate court(s) the vacation, elimination or modification of the Judgment and Writ of Mandate and/or dismissal of the Dougherty Valley Lawsuit, in order that the 1992 Approvals remain in effect. In the event that the settlement agreements in the case of Town of Danville et al v County of Contra Costa et al (C93-00231) are effectuated prior to the effective date of this Settlement Agreement, the parties agree to join in the collective efforts of all the parties to the two lawsuits to accomplish by appropriate procedures and with the appropriate court(s) the vacation, elimination or modification of the Judgment and Writ of Mandate and/or dismissal of the Dougherty Valley Lawsuit in order that the 1992 Approvals and supporting EIR remain in effect. EBMUD further agrees not to file any action against the approval of any Development Agreements, rezonings or Preliminary Development Plans for the Property to the extent such approvals are in substantial conformance with the 1992 Approvals as modified to reflect the Country Club at Gale Ranch approvals, this Settlement Agreement, and any other settlement agreements entered into to settle the lawsuit entitled Town of Danville et al v County of Contra Costa et aL. EBMUD retains the right to oppose and file a legal challenge against such approvals, and any other subsequent approvals for the Project, with respect to the subject of water availability or quality to the extent such approval or approvals are not based upon or in substantial conformance with the 1992 Approvals as modified to reflect the Country Club at Gale Ranch approvals, this Settlement Agreement, and any other settlement agreements entered into to settle the lawsuit entitled Town of Danville et al v County of Contra Costa et al . (b) Except as otherwise provided in paragraph 4(b) EBMUD retains its right to comment upon and oppose future Dougherty Valley project-level applications (such as tentative maps) and any future environmental impact reports that may be required, with respect to the subject of water availability or quality. EBMUD also retains the right to oppose and legally challenge any approvals which seek to designate EBMUD as the preferred water provider or to annex any of the Property to EBMUD to the extent they are inconsistent with the provisions of this Settlement Agreement. 8. DISPUTE RESOLUTION PROCESS (a) If a dispute arises relating to the interpretation of, enforcement of or compliance with the terms and provisions of this Agreement, the parties to the dispute will first attempt to resolve it through informal discussions, which may include designated 10 _ DRAFT July 28, 1995 (Second Version) representatives of Shapell and Windemere, the County and EBMUD. Any party may convene such discussions through written notice delivered by confirmed facsimile transmission or overnight delivery to the other parties, providing at least ten days' notice, and setting a date, time and place for such discussions. The convening party shall reasonably accommodate the parties' schedules in selecting and/or altering the date and time of the discussions. In the event a dispute cannot be resolved in this manner within twenty-one (21) days, upon agreement among the parties, the dispute may be referred to a mediation process. (b) The dispute resolution process described above shall be undertaken in good faith and exhausted prior to judicial review; provided, however, that no parry to this Agreement hereby loses or waives its right to file an action to comply with any applicable statute of limitations or loses or waives its right to assert the operation of any applicable statute of limitations as an affirmative defense. In the event that an applicable statute of limitations would expire during the pendency of the dispute resolution process described above, the parties may agree in writing to toll such statute of limitations for such period as may reasonably be necessary to complete the dispute resolution process. 9. RULES AND REGULATIONS GOVERNING WATER SERVICE TO CUSTOMERS OF EBMUD; FRUSTRATION OF PURPOSE Any water service provided to the Property by EBMUD pursuant to the terms, conditions and limitations of this Agreement shall be subject to compliance by Windemere and Shapell with the lawful and non-discriminatory application of the Rules and Regulations Governing Water Service to Customers of EBMUD, and any amendments thereto that may be adopted. In no event, however, shall any party to this Agreement take any action (whether by the amendment of said Rules or otherwise) which has the purpose or effect of frustrating the accomplishment of the purposes of this Agreement or the exercise of the rights conferred under this Agreement; provided, however, that actions of the District to (a) modify its rates, charges and fees, (b) adopt reasonable revisions to its engineering standards and practices, and (c) provide for compliance with standards, requirements and regulations promulgated by federal, state, and local authorities other than EBMUD shall not be deemed to frustrate the accomplishment of the purposes of this Agreement. 10. GENERAL PROVISIONS (a) Each party expressly waives any rights or benefits available to it under the provisions of Section 1542 of the California Civil Code, which provides as follows: 11 DRAFT July 28, 1995 (Second Version) A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. (b) Each party represents that the contents of this Agreement have been explained to it by its duly authorized counsel and that this Agreement is executed voluntarily, with full knowledge of its significance and contents and with full authority. (c) The terms and conditions of this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement and their respective successors and ' assigns. (d) This Agreement constitutes the entire Agreement among the parties with respect to the subject matter hereof and supersedes any prior understandings or agreements among the parties, whether oral or written. This Agreement may not be amended or modified unless made in writing and signed by each of the parties. Where an amendment or modification that would affect only one of the Property owners need not be approved by the other Property owner. (e) Neither the negotiation of this Agreement, nor any action taken to carry out this Agreement, (i) is or may be construed or used as an admission or concession by or against any party to this Agreement of any fault, wrongdoing or liability, or (ii) may be offered or received in evidence in any action or proceeding against any Party to this Agreement in or before any court, administrative agency or tribunal for any purpose; provided, however, that this Agreement and its exhibits may be filed in the Lawsuit as evidence thereof. The Parties to this Agreement further agree that the provisions of California Evidence Code Sections 1152 and 1154 apply to all negotiations and settlement discussions leading to, and all actions taken to carry out, this Agreement, and that such negotiations, discussions and actions shall not be admissible for any purpose other than as necessary to effectuate, enforce or defend the provisions of this Agreement. (f) Shapell and Windemere will each pay to EBMUD attorneys fees in the amount of$97,000, payable within five business days following disposition of the Dougherty Valley Lawsuit pursuant to paragraph 7(a) of this Agreement. This obligation is several and not joint. Except as provided herein, each party shall bear its own costs and fees incurred in the Lawsuit and this Settlement Agreement. 12 DRAFT July 28, 1995 (Second Version) (g) Shapell and Windemere agree and warrant that they will provide a copy of this agreement to any purchasers, assignees or successors-in-interest of the Property who will be affected and governed by the terms and conditions of this Agreement, prior to the transfer of title. In the event of the failure to provide the foregoing notice, Windemere and Shapell agree to defend, indemnify and hold EBMUD harmless from any and all loss or expense incurred by EBMUD resulting therefrom, provided that the developer affected shall have the right to assume the defense of any claim made or action brought against EBMUD on the basis of which EBMUD makes a claim under this paragraph 10(g). In addition, the County, Windemere and Shapell agree that the requirements of this Agreement shall be incorporated into conditions of approval subsequently issued within the Property if EBMUD is proposed to provide water service to the portion of the Property affected by the approval. COUNTY OF CONTRA COSTA Date: 1995 By: Chair of the Board of Supervisors Date: 1995 EAST BAY MUNICIPAL UTILITIES DISTRICT By: Chair of the Board of Directors Date: 1995 SHAPELL INDUSTRIES OF NORTHERN CALIFORNIA By: President 13 DRAFT July 28, 1995 (Second Version) Date: 1995 WINDEMERE RANCH PARTNERS By: Managing Partner 14 DRAFT July 28, 1995 (Second Version) EXHIBIT LIST EXHIBIT A Process for notification and consultation concerning land use and water service matters. EXHIBIT B School Sites EXHIBIT C DSRSD steps and timetable and "best efforts" steps. EXHIBIT D Timeline for Planning/Design/Annexation/ Construction EXHIBIT E Method for determination sufficiency of water supply system EXHIBIT F Offset fee calculation and provisions governing payment 15 DRAFT July 28, 1995 (Second Version) EXHIBIT C Efforts to Obtain Water Service from Source Other than EBMUD Paragraph 4 of this Agreement provides as a condition to certain EBMUD obligations that Shapell and Windemere will have exercised best efforts to secure an alternative water supply (through DSRSD, Zone 7 or other providers). Windemere and Shapell have undertaken or intend to undertake all reasonable and appropriate steps to obtain such water including those set forth below. To the best of Windemere and Shapell's knowledge, the activities, actions and approvals set forth below is a complete and accurate list of steps needed to secure permanent water service from a supplier other than EBMUD. In the event that additional activities, actions or approvals are subsequently identified which in the exercise of diligence should be undertaken in securing alternative permanent water service, such additional efforts will be diligently pursued as though they were included within this Exhibit C. Windemere and Shapell will continue to exert all reasonable efforts in furtherance of securing permanent water service from a supplier other than EBMUD until such time as application is made for annexation to EBMUD pursuant to the terms, conditions and limitations of paragraph 4 of this Agreement. Windemere and Shapell shall provide reports three times per year to EBMUD describing the activities and accomplishments since the previous report with regard to each of the activities, actions, and approvals set forth in this Exhibit C. Each report also shall provide updated information concerning the schedule for expected completion of each element in this Exhibit C and shall describe any newly identified elements for addition to Exhibit C including the estimated dates for completion of the new elements. Windemere and Shapell shall be deemed to have used "best efforts" for the purposes of this Agreement if and when: • in addition to undertaking each of the actions specified in Sections A and B below, they collectively have expended funds in the aggregate amount of $500,000 or more in furtherance of such actions; and • under the circumstances specified in Section C below, Windemere and Shapell undertake the actions specified in Section C below and they collectively have expended funds in the aggregate amount of$250,000 or more in furtherance of such actions. 16 DRAFT July 28, 1995 (Second Version) A. Initial Survey For over two years, Windemere and Shapell have undertaken an extensive search to identify viable sources of water as an alternative to EBMUD. Extensive discussions with State Water Project contractors and other entities with claims to State Water Project entitlements have occurred, including districts in San Joaquin, Calaveras, Amador, Stanislaus and Kern counties. A variety of other potential sources were considered, including the Mokelumne River and the American River. Through this process, entitlements held by Berrenda Mesa Water District presented the most immediately practicable option for obtaining a successful transfer that would provide a permanent source of water for Dougherty Valley. As a result, Windemere and Shapell have undertaken or intend to undertake the steps set forth in Section B, below, to effectuate such a transfer. B. Berrenda Mesa Water District 1. Water District Contracts • Enter into a reimbursement agreement between DSRSD and Windemere for the purchase of Berrenda Mesa water. (Complete) • Obtain water purchase agreement between DSRSD and Berrenda Mesa ("Berrenda Mesa/DSRSD Contract"). (Complete) • Confirm State Water Project Contractors' agreement to the Monterey Principles, allowing for permanent transfers and making both agricultural and municipal contractors subject to equitable reductions in water supply during drought shortages. (Complete) • Amend Berrenda Mesa/DSRSD Contract to add Shapell as party. (Complete) • Obtain Kern County Water Agency approval of Berrenda Mesa/DSRSD Contract. (Complete) 2. Zone 7 • Obtain DSRSD Board's formal request of Zone 7 to deliver, transport and store water entitlements obtained from Berrenda Mesa ("DSRSD Request"). (Complete) 17 DRAFT July 28, 1995 (Second Version) • Obtain Zone 7 Board approval of DSRSD Request after certification of the Final EIR, as described in Section B.3, below. (Expected December 1995) 3. Complete environmental review for transfer, storage, treatment and conveyance of water from Berrenda Mesa Water District to DSRSD. (Certification of Final EIR expected December 1995) 4. LAFCO Actions • File LAFCO application for annexation to DSRSD. (Expected December 1995) • Obtain LAFCO approval of annexation of Dougherty Valley (other than CCGR and school sites adjacent to CCGR) to DSRSD. (Expected January 1996) 5. Other Agencies • Obtain Department of Water Resources approval of transfer of Berrenda Mesa Water to DSRSD. (Expected February 1996) C. Alternative Methods of Delivery and Sources of Water Although Windemere and Shapell anticipate that all of the actions necessary for the Berrenda Mesa transfer, conveyance, storage and delivery can be completed in a timely manner, it is possible that unforeseen physical or fiscal constraints will prevent either the contemplated method of delivery or the legal transfer of water rights from this particular source. In such event, Shapell and Windemere will initiate other efforts to secure alternative methods of delivery of water sources. As appropriate, these efforts will include the following: 1. With respect to the method of delivery, it is possible that, although all other steps necessary for the transfer may occur, use of Zone 7 facilities will prove infeasible. If and when such an event occurs, but in no event later than July 1, 1996, Windemere and Shapell will promptly commence and diligently pursue the following: • Initiate design work for construction of new DSRSD water treatment plant and conveyance facilities. • Study and initiate necessary contractual negotiations for storage alternatives, such as Semitropic Water Storage District Groundwater Bank, New Melones Reservoir or Los Vaqueros Reservoir. 18 DRAFT July 28, 1995 (Second Version) • Requesting DSRSD to initiate such actions as may be necessary for DSRSD to become a contractor with the State Water Project. 2. If all actions necessary to accomplish the Berrenda Mesa transfer are not completed by July 1, 1996, Windemere and Shapell at that time will promptly and diligently pursue the following: • Conduct a statewide search for water from other sources, including other State Water Project contractors and entities previously contacted, and other holders of contractual water supply entitlements and state-issued water rights. • Initiate discussions with parties identified as potential sources through statewide search. • Make preliminary determinations regarding legal, financial and technical feasibility of possible sources. • Actively pursue negotiations with feasible candidate sources. • If such negotiations are successfully progressing with respect to a potential feasible source or sources, conduct preliminary engineering analysis and environmental review and identify necessary governmental approvals. • If the above steps are successful, complete engineering analysis, environmental review and obtain necessary governmental approvals. • Upon obtaining necessary governmental approvals, commence design and construction work necessary to effectuate transfer and conveyance. 19 DRAFT July 28, 1995 (Second Version) EXHIBIT E METHOD AND STANDARD FOR DETERMINING THE SUFFICIENCY OF THE EBMUD WATER SUPPLY SYSTEM FOR EXISTING AND FUTURE NEEDS BOTH FOR THE DISTRICT'S SERVICE AREA AND THE PROPERTY To determine the sufficiency of the District's water supply system to meet current and future demand in the EBMUD service area and the Property, the District will perform a computer analysis using its EBMUDSIM computer model. The water supply system will be deemed sufficient if the analysis shows that the water supply system can meet existing and future demand in the District's service area and the Property through the design ' drought cycle without requiring rationing in excess of 25% as set forth in the District's September 1993 Final Environmental Impact Report on its Updated Water Supply Management Program ("WSMP"). Except as modified herein, all model assumptions contained in such analysis shall be identical to those used to determine the 130 TAF Need for Water reported in the WSMP. Assumptions regarding instream flow and reservoir operating criteria related to fishery or other in-stream resource protection requirements will be modified to reflect the District's offer of settlement to the Federal Energy Regulatory Commission ("FERC") and will be subject to further modification based upon results of the State Water Resources Control Board, FERC, or other regulatory proceedings with jurisdiction affecting EBMUD water supplies which address these requirements. Assumptions regarding system capacity components which reduce the need for water such as addition of a connection to the Folsom South Canal, addition of storage to Pardee Reservoir, institution of a conjunctive use program, water reclamation projects, water conservation programs or similar capacity components, will be subject to modification. The capacity of Camanche Reservoir will be reduced from 430 A.F. to 413 A.F. to reflect recent survey data. Upon execution of this Agreement, a complete set of computer printouts delineating the District's need for 130 TAF of additional capacity will be delivered to the designated representative of Windemere and Shapell. Whenever the District makes a determination of system delivery capacity pursuant to this section, a complete set of computer output will be delivered to the parties to this Agreement. 20 DRAFT July 28, 1995 (Second Version) EXHIBIT F CALCULATION OF OFFSET FEE AND PROVISIONS GOVERNING PAYMENT OF OFFSET FEE The offset fee shall be 1.65 times the Future Water Supply ["FWS'] portion of the System Capacity Charge ["SCC"I in effect at the time that the offset fee is paid and the base amount of the FWS shall be credited against the SCC paid at the time of hook-up. The Property shall constitute a separate SCC region. Water demand figures for residential and commercial structures to be utilized in computing the offset fee will be calculated according to the method utilized by EBMUD for its System Capacity Charge unit demand calculations, and will take into account the following factors, among others: Actual use by households in the area expected to exhibit similar potable water demand characteristics; Specific Plan restrictions and other conditions of approval which have an impact on water usage, such as requirements for xeriscaping, the use and availability of reclaimed water for public and semi-public areas, and other relevant design features; and the varying lot sizes of each type of single family residence. The water demand figures shall be determined prior to payment of the first offset fee. Unit water demand will be recalculated based upon actual water use within the Property measured beginning the second year following occupancy. The offset fee shall be paid no less than one year prior to the issuance of the water meter for the residential or commercial structure or other use. Within 30 days of the date on which it is determined that EBMUD has developed a sufficient water supply (as defined in Exhibit E), that portion of the offset fees which reflects .65 times the FWS portion of the SCC shall be refunded for any units for which an offset fee has been paid but for which no water meters have been issued. If construction on the Property is halted, at the request of the payor(s), the offset fees for some or all of the units which have not been issued a water meter shall be refunded, except that EBMUD shall retain .65 times the FWS for each such unit and shall have no further obligation to Windemere and Shapell as to any such funds retained by EBMUD. A halt in construction shall be defined as a six-month period during which no water meters have been issued. As an alternative to payment of the offset fee, until sufficient water is available as determined in the manner set forth in Exhibit E, Windemere and Shapell may secure an alternate source of water, of a quality and quantity satisfactory to EBMUD and not involving water under consideration as a possible alternative source for EBMUD under its WSMP, which EBMUD could purvey on an interim or permanent basis. EBMUD will reasonably cooperate in the foregoing, subject to payment by Windemere and Shapell of all costs incurred by EBMUD. 21 ATTACHMENT B - SUI-WNfA RY OF .AGREEMENT TO SETTLE LITIGATION RELATING TO THE DOUGIMRTY VALLEY GENERA.PLAN AMNDII MT,SPECIFIC PLAN AND ENVMONMMEENTAL DVACT REPORT AN^D RELATING TO THE WATER SUPPLY MANAGEMENT PROGRAM AND ENVIRONMENTAL UVRACT REPORT OF'TEW EAST BAY MUNICIPAL UTILITY DISTRICT The Board of Diractm of East Bay Mwicipal Chihty District will be consideaing approval of a proposed settlement agreemmt whkh sets forth the terms and conditions under which the district would dismiss its lawsuit entitled MRM v, rmnty Cmbm Costa eta .,No.C93.00233,in Contra Com County Superior Court,chali"ing the county's approval of a Cvm=W Pian Anmdment and a Specific Plan for DouOaty Valley,And the mvironrnartal impact report on which such approval was based. The settlement agrcom ant also provides fen'dismissal of the lawsuit filed by Contra Costa County,Windemae Ranch,.Partners,and Shapell Industries ofNordmm Califomk cbal,lenging the envffon=tat impact report preparad by ESMUD far its dater Supply Mansgarncmt Program adopted in October 1993. Provisions of the agreement are anmmnrbed as follows; Section 1. Zl.RLYC0NST LTATJ0NB,ET WEENEBAfUD AND 7M COUNTY Under the agm=e:nt,EBMUD and the county would establish a regular meeting schedule for the purpose of coordinating activities related to water supply planning and land use planning. A notification and consultation process would be established to provide for early discussion and exchange of infonnati.on related to water demaad of proposed new development,the availability of water supply and sysW=capacity to meet the demand,the impact on service to existing customers, and avajlal>ility of water supply sou Ices to meet The needs of existing and future customm ia the county. Section x. CONFflt7t 77ON OF SERC7CE TO C'OUNTRY CL UR AT GALE)L4NCE The agrmxnnrtt would confim the provision of water service to the Country Club at Cale Ranch, which is located 'within the district's Current service boundaries, and further confirms that water supply facilities will be simd to save the Country=Ctub at kale Rich only. ERMUD would agree not to oppose amexation of school sites located wear the Country Club at Gale Bauch development and adjacent to the existing EBMUD boundary,provided that such school sites would be used only for school and/or part purposes. A- section 3. DISMISSAL SAL OF CMA4 LENGE TO WSMP The agreement would ,provide for dismissal of the action filed by the courxty, shapall and Windemere,cW1enging the adequacy of the environmental impact report for adaption of EBMi TD's Water supply Management program. Section4. DESIGNATION UFDSRSD AS PREFERRED WATER PROVIDER The agreement would require Shapell and Windersiere to continue to use best efforts to secure permanplt water service for the Dougherty Malley from the Dublin San Ramon Servicce District, as an alternative to seekitg water service from EBMUD. These of its include cottrracts for the transfer and delivery of water from Betrenda Mesa Nater District to DSRSD, environmental documentation,approval by applicable regulmory agcoti-es,and LAFCC approval of annexation of the Daugherty Valley property to ASRSD. In the event tha proposed 13SRSDAImmda Mew water supply cannot be delivered using Zone 7 facilities,Sbapell and WmdcmGre will initiate efforts to secure altemative methods of transfer and delivery,including design work for new DSRSD treatment and conveyance facilities. it actions nacessmy to accomplish the Berrenda Mesa transaction are not completed by My 1, 1996,Wmdm nere and Shapell will pursue efforts to obtain a watsr supply from other sources,including other'State Waier Project contractors. Best efforts also inch a significant !Rn=ial investment of 5750,040 in efforts to secure an altmutive rawly for Dougherty Valley. Section 4 of the agreement specifies terms, conditions and limitations which would apply in the event that Shapell and Windermere are unsuccessful in securing an afternahive water supply for Daugherty Valley{having worked to do so in urordame with the provisions of the agreement),and seek annexation for any poWon of the Dougherty Valley to EBMUD. The terms,conditions and limitations which would appy to such application for annexation to EBMUD are s==mrized as follows: (a) Shzpell and Windemore would not submit an application to LAFCC for an=atiozs to F,BMUD of Dougherty Vey property prior to July 1, 2000. BBMUD would not oppose such applinatian for annexation subject to the following conditions; 1) Shapell snd Wiadempre have completed best efforts, as defined in the agroo=n# t4 secure an alterzadve water supply,but have been.unsuccessful; 2) water service for any portion of Dougherty Valley would'be subject to an offset fee to fund the cost of conservation programs or other methods necessary to offset additional water demand created by new hook-ups is the developmctrt. The offset fee would be calculated at 1.65 times the Future Water Supply portion of the ERMUD Syswm Capacity Cliarp in effect at the firm of payment. The offset fee would be paid no less than one year prior to the issuanc-e of the water meter is order that programs to offset the new demand can be implemented in advance; -2- 71 the number of new water service hook-itps per year would not exceed 600; 4) during any period in which the district has declared a drought emergency pursuant to Water Code section 350, EBMUD would issue no new water service hook-ups to the property,and,there would be no application made to LAFCO for w=xation to EBMUD;and 5) ESMUD would not provide water service hook-ups within the annexed Dougherty Vallcy property toy time prior to January 1,2002. (b) In order to allow for planning of facilities necessary to commence delivfty of water service after January 1, 2002,planniug work could be undertaken at Shapell and Winde3mere's expose, commencing January 1,2000,but such work would provide no assurance for the provisio n of wader service unless mid until the property is annexed to EBNIUD subject to the terms,limitations and conditions ofthe agreement Section 3. Pizom s MUST BE D.SSIGNED TO ACCOMMODATE RECL&MEI'? WATER f The agreement would provide that EB WM and the county will require dw projects in Dougherty Valley be designed W built to accept and utilize reclaimed'water for irrigation purposes in public and semi-public areas. N2cfian f. DEVELOPMENT AGREEMENTS TO BE CONSISTENT 07TH TIM SETTLE MVTAGR Y-MENT The agreement would provide that any developmwt agreements that may be adopted for Doughmty Valley shall be consistent with the terms,conditiow and limitations of the setdament agrement,and any development agreement adopted far the property shall reference the terms and pw vWons of the settlement agreement. Section 7 RESOLUTION OF LAWSUIT REY A77NG TO THE.7992 APPROVALS Based upon,the terms of the serd=ent agrccm=t,the pard es would jointly scat:modiftcataion of the judgment and writ of m=daw avdlnr dismissal of the Dougherty Vd L-y law=it,d=eby leaving the 1992 General Plan Amendment and Speeific Flan for Dougherty Valley in effect. Section 8. DISPUTE RESOLUTIONPROCESS This section would provide for an infontlal dispute resolution process,prior to initiatim of litigation, to resolve any dispute that may arise relating to the inhapretation of, caforccmcro o�or compliance with the terms of the settlement agreement. -3 i s Section 9 RULES AND REGULATIONS GOVERN)NG DATER SERPTCE 2'O C4 STOMEBS OF MY UD;FR LS'TRATION OF PURPOSES This section would specify that water service provided to Dougherty Valley by EBMUD,pursuant to the turns,conditions and limitations of the settaemiu t agent,would be subject to compliance by Mrwdem=and Shapell with the rules and regulations gov=ing water=-vice to custornrrs of B$MIJD. =This section would furfur provide that no party shall take any action which has the pose or effect of frustrating the purposes of the agreement or the exercise of rights conferred under the agreement. Section 10. GEIVERAL PROVISIONS Under section 10 of the Agreement,Shapell and Windemere would pay EBMUD attomays' fees in the amount of$194,000. -4- AGREEMENT TO SETTLE LITIGATION RELATING TO THE DOUGHERTY VALLEY GENERAL PLAN AMENDMENT, SPECIFIC PLAN AND ENVIRONMENTAL IMPACT REPORT AND RELATING TO THE WATER SUPPLY MANAGEMENT PROGRAM AND ENVIRONMENTAL IMPACT REPORT OF THE EAST BAY MUNICIPAL UTILITY DISTRICT This Agreement is entered into by and among the East Bay Municipal Utilities District, a municipal utility district ("EBMUD" or the "District"), the County of Contra Costa, a political subdivision of the State of California (the "County"), Windemere Ranch Partners, a California limited partnership ("Windemere"), and Shapell Industries of Northern California, a Division of Shapell Industries Inc., a Delaware corporation ("Shapell"). This Agreement is effective as of August 8, 1995. RECITALS A. Windemere and Shapell are the owners of certain_real property (the "Property") in the Dougherty Valley, which is located in an unincorporated area of southern Contra Costa County. On December 22, 1992, the County approved a General Plan Amendment and a Specific Plan for the Property, and certified as adequate a final environmental impact report for the project (the "1992 Approvals"). B. In January, 1993, EBMUD filed a lawsuit entitled EBMUD v. County of Contra Costa et al., No. C93-00235, in Contra Costa County Superior Court (the "Dougherty Valley Lawsuit") challenging the legal adequacy of the 1992 Approvals. C. In October,,1993 EBMUD adopted an updated Water Supply Management Program and certified as adequate a final environmental impact report for the Program (the 11 WSMP"). D. In December, 1993, the County, Windemere and Shapell filed lawsuits entitled County of Contra Costa v. EBMUD et al., No. 727221-7, Windemere Ranch Partners v. EBMUD et al, No. 727243-9 and Shapell Industries Inc. v. EBMUD et al., No. 727206-8, all in Alameda County Superior Court (the "WSMP Lawsuits"), challenging the legal adequacy of the EIR supporting the Water Supply Management Program. E. On April 25, 1994, the Dougherty Valley Lawsuit was heard in Contra Costa Superior Court before the Honorable David L. Allen. On May 26, 1994, the court issued its ruling on the Lawsuit, holding that the 1992 Approvals were not legally adequate insofar as they related to the provision of water. On September 23, 1994, The County, Windemere and Shapell filed notices of appeal. F. In January, 1995 the Board of EBMUD adopted the WSMP Action Plan for potential use of American River water. 1 G. The parties desire to resolve these Lawsuits without further litigation, to provide a framework for cooperation, to avoid future lawsuits, and to remove the pending challenges to the WSMP and the 1992 Approvals. Accordingly, for good and valuable consideration, it is hereby agreed as follows: AGREEMENT 1. EARLY CONSULTATION BETWEEN EBMUD AND THE COUNTY (a) The County and EBMUD desire to establish a cooperative mechanism for early consultation and coordination of water.supply planning and land use planning. EBMUD and the County recognize the County's responsibility for land use planning and EBMUD's responsibility for water planning and delivery, including its responsibility to serve existing customers and expected new customers within its existing service area, and to manage the natural resources available to it without undue impacts on the environment. (b) To facilitate consultation and coordination between the two agencies, the Boards of the County and EBMUD shall continue the practice of holding joint meetings of the Boards to discuss matters of mutual interest, such meetings to be held annually or as needed. The meetings shall be scheduled by the County Administrator and the District's General Manager. (c) Designated staff from the County and EBMUD shall establish a regular meeting schedule, with meetings to occur at least quarterly, for the purpose of carrying out the consultation and coordination activities described herein. (d) Exhibit A to this Agreement provides a process for the County's prompt notification and consultation with EBMUD concerning development applications when EBMUD may be considered a possible provider of water service. The purpose of notification and consultation is to provide for early discussion and exchange of information related to the water demand of such proposed new development, the timing of such new demand, the availability of water supply and system capacity to meet the demand, and the impact, if any, of such demand on service to existing customers taking into account other development projects that are pending or proposed within the County. Where development outside the service area of any water provider is under review by the County, early consultation will include consideration of alternative providers. (e) The County and EBMUD staff shall consult at the regularly scheduled meetings or as needed with respect to the District's water supply planning. Consultation shall .include discussion and exchange of information related to the availability of water supply sources, additional storage capacity, and additional facilities to meet the needs of existing and future customers in the County both inside and outside the District's existing service boundary. Where the District is considering the approval or rejection of options for securing additional water supply or capacity, consultation will include consideration and discussion of feasible alternatives. 2 (f) County and District staff shall also consult at the regularly scheduled meetings or as needed with respect to other topics of mutual interest, including but not limited to each agency's long-range planning activities, projected near-term land development projects, reclamation and conservation programs and opportunities, water quality issues, and cooperation on development of new water supplies. (g) The County and the District will also discuss at their meetings pending legislative proposals for coordination of land use and water service planning, and will consult as to possible agreement on proposals for joint support in the legislature. 2. CONFIRMATION OF SERVICE TO COUNTRY CLUB AT GALE RANCH (a) EBMUD confirms that the Country Club at Gale Ranch ("CCGR") project is located within its current district boundaries, and that the District will provide water service to that project. Consistent with the Preliminary Work Agreement between EBMUD and Shapell and with the County's 1994 approvals, facilities will be sized to serve CCGR only. In planning facilities, EBMUD will follow standard engineering practices, and will not design a system for the purpose of precluding future options for extension of service. (b) EBMUD will not oppose annexation of the elementary school site located adjacent to existing district boundaries, as shown on Exhibit B, with the understanding that the property would be used only for school and/or park purposes. At the time that construction of the middle school, as shown on Exhibit B, is being planned, the parties will consult to discuss which water district would be the most logical provider for that site. After such consultation, if it is determined that EBMUD would be the most logical provider for that site, EBMUD would not oppose annexation of the site into the District with the understanding that the property would be used only for school and/or park purposes. 3. DISMISSAL OF CHALLENGE TO WSMP EBMUD is proceeding with its WSMP, including the WSMP Action Plan which includes potential use of American River water. Within ten days following execution of this Settlement Agreement, the County, Shapell and Windemere will dismiss with prejudice the WSMP Lawsuits which would eliminate the challenge to implementation of the District's water supply and storage alternatives contemplated therein. County, Shapell and Windemere further agree not to file any lawsuit challenging the approval by EBMUD of actions implementing the WSMP to the extent such actions are in substantial conformance with the WSMP as heretofore approved by EBMUD, and so long as such actions are consistent with, and do not impair the District's ability to carry out, this Agreement. 3 4. DESIGNATION OF DSRSD AS PREFERRED WATER PROVIDER (a) Shapell and Windemere are using and will continue to use their best efforts to secure permanent water service for that portion of the Dougherty Valley located outside CCGR and the elementary school site (and, conditionally, the middle school site, as described in paragraph 2), from the Berrenda Mesa Water District, and the Dublin San Ramon Service District and/or Alameda County Zone 7. These efforts include negotiation of contracts for the transfer, transmission and delivery of water, environmental review and approval of the transfer and delivery of the water by applicable regulatory agencies, and LAFCO.approval of annexation by DSRSD of the above-described portion of the Property. The specific actions and approvals anticipated, and a timetable for their expected dates of completion, are described in Exhibit C. (b) Shapell and Windemere will provide EBMUD with all non-confidential documents prepared in connection with the process described in Exhibit C for review and monitoring. Shapell and Windemere agree that they will consult with EBMUD regarding any concerns EBMUD may raise relating to that process. The purpose of this provision is to assure that EBMUD's ability to develop adequate water supplies for existing customers and future developments within the existing service area, and EBMUD's existing water rights or its efforts to secure additional water supplies, are not adversely affected by the proposed water transfer and delivery. EBMUD reserves the right to comment throughout the process, but will not oppose implementation of the program nor file any legal challenge to any aspect of the DSRSD/Berrenda Mesa water transfer and delivery program, including the adequacy of environmental review and annexation of the Property into DSRSD, to the extent it is carried out in substantial conformance with the program for the proposed water transfer as described in the documents transmitted from Windemere to EBMUD on July 31, 1995. The foregoing waiver shall not bar a legal challenge by EBMUD in the event that the environmental impact report for the proposed water transfer discloses information not previously provided to EBMUD involving potential adverse effects upon EBMUD's existing water rights or its efforts to secure additional water supplies. (c) In the event the proposed DSRSD/Berrenda Mesa water supply cannot be secured, Shapell and Windemere will use best efforts to secure water from alternative sources or suppliers. In so doing, Shapell and Windemere will consult with EBMUD regarding alternative methods of securing and delivering water which do not involve primary water service from EBMUD. The County, Shapell and Windemere shall not initiate annexation proceedings to any other provider before completing this consultation. EBMUD will not file any legal challenge to any aspect of any alternate program for provision of water to the Property, including the adequacy of the environmental review and annexation into any other district, unless and to the extent that EBMUD's ability to develop adequate water supplies for existing customers and future developments within the existing service area, and EBMUD's existing water rights or its efforts to secure additional water supplies would be adversely affected by the alternative water transfer and delivery program. 4 (d) Accomplishment of "best efforts" as referred to in paragraphs 4(a) and (c) above shall require that Shapell and Windemere undertake in good faith a diligent and timely effort to initiate and complete each action, and each regulatory approval process that is necessary to secure permanent water service for Dougherty Valley from DSRSD/Berrenda Mesa, including the anticipated actions and approvals identified in Exhibit C, Section B hereto. In addition, in the event that the foregoing method of providing water service cannot be secured, accomplishment of "best efforts" shall include the diligent pursuit of the additional steps set forth in Exhibit C, Section C. "Best efforts" shall also include a significant financial investment as set forth in Exhibit C. (e) Upon execution of this Agreement, the County will initiate.amendments to the Dougherty Valley Specific Plan to designate DSRSD rather than EBMUD as the preferred water provider outside of CCGR and, consistent with paragraph 2, the school sites. Any reference to EBMUD as a potential water provider in the Specific Plan shall be consistent with and include the conditions and limitations set forth in this Settlement Agreement. Prior to action being taken by the County on the Specific Plan, EBMUD shall be given the opportunity to review and comment upon the text of the proposed amendment in the manner specified in paragraph 6(b) of this.Agreement. Action on the Specific Plan Amendment shall occur prior to or contemporaneous with any action taken by the Board of Supervisors on the Development Agreements and rezoning for the Property. (f) Approval of tentative subdivision maps for the Project shall be conditioned on verification of an adequate water supply for the subdivision, the condition to be satisfied prior to recordation of the final map, by verification that capacity exists to serve the specific project ("will serve letters") or comparable evidence of adequate water supply. Where EBMUD is proposed to provide water service to the Property or a portion thereof pursuant to the terms, conditions, and limitations set forth in this Agreement, EBMUD shall not be obligated to provide such verification unless and until the applicable portion has been annexed to EBMUD in conformance with the terms, conditions and limitations set forth in this Agreement. (g) Under the circumstances and subject to the terms; conditions and limitations set forth herein, including without limitation the requirements of paragraph 4(h): (i) No earlier than July 1, 1999, Shapell and Windemere may submit to EBMUD a request to initiate preliminary planning work for water service from EBMUD. Upon receipt of such request, EBMUD will undertake the activities for preparation of a preliminary work agreement ("PWA") referenced as "PWA Development" on Exhibit D to this Agreement, not including retention of the consultant and execution of the PWA. EBMUD, Windemere and Shapell shall utilize best efforts to complete these activities by December 31, 1999. All work performed by EBMUD pursuant to this request shall be undertaken at Shapell's and Windemere's sole expense, and undertaking such work shall provide no assurance for the provision of water service unless and until the Property is annexed to EBMUD as provided herein. 5 (ii) At Shapell's and/or Windemere's request made no earlier than January 1, 2000, EBMUD will enter into a PWA with Shapell and/or Windemere, retain consultants as necessary and perform the work included in the PWA, including project development, environmental documentation, and project design as shown on the estimated timetable in Exhibit D. Any such planning, project development and design work shall be undertaken at Shapell's and Windemere's sole expense, and undertaking such work shall provide no assurance for the provision of water service unless and until the property is annexed to EBMUD as provided herein. (iii) EBMUD, Windemere and Shapell shall cooperate through the exercise of best efforts to conduct and complete the activities in (ii) above in a timely manner which (following annexation, facilities construction and other required activities) will allow commencement of hook-ups to the Property by January 1, 2002. The parties to the PWA shall utilize all reasonably available techniques to reduce the estimated shortest time shown on Exhibit D for performing the planning activities in (ii) above, including the use of outside consultants at Windemere's and/or Shapell's expense, and phasing of planning and construction; provided, however, nothing herein constitutes a commitment or guarantee by EBMUD that, despite the use of best efforts, activities in (ii), above, and construction activities can be completed in time to commence hook-ups by January 1, 2002. (iv) Shapell and Windemere shall not submit an application to LAFCO for annexation to EBMUD of the Property.outside of CCGR and the elementary school site (and possibly the middle school site, as provided in paragraph 2), or any part thereof, prior to July 1, 2000. EBMUD will cooperate beginning January 1, 2000 in providing in a timely fashion information reasonably necessary for the preparation, submittal and processing of such application. EBMUD agrees that it will not oppose any application for annexation of the Property into the District filed on or after July 1, 2000, and (upon the successful completion of annexation) will provide water service to the Property, but only upon the terms, conditions and limitations set forth in paragraph (h) below. Any work done by EBMUD and any expense incurred by Shapell and Windemere prior to commencement of annexation proceedings does not relieve Shapell and Windemere from continuing their best efforts, as required in paragraph 4(h)(i), to secure an alternative water supply. (v) EBMUD will not approve, or issue a request for bids for construction of, EBMUD facilities to serve the Property prior to completion of annexation proceedings and EBMUD will not provide hook-ups to the Property prior to January 1, 2002. Upon successful completion of the annexation process, EBMUD will take all necessary steps to complete the planning, review and implementation process needed for the provision of water to the Property in a timely fashion. The anticipated specific actions and approvals required, and an estimated timetable for completion of each based upon information currently known to EBMUD, is attached hereto as Exhibit D. The parties to the PWA shall utilize all reasonably available techniques to reduce the shortest estimated time shown on Exhibit D for performing the planning, review and implementation process; provided, however, nothing herein constitutes a commitment or guarantee by EBMUD that, despite the use of best efforts, the 6 planning, review and implementation process can be completed in time to commence hook-ups by January 1, 2002. (h) Shapell and Windemere agree that any annexation application, annexation, and water service for the Property shall be subject to the terms, conditions and limitations set forth below: (i) Shapell and Windemere shall have worked through exercise of best efforts as defined in Exhibit C to secure an alternative water supply for all or any portion of the Property through Berrenda Mesa, DSRSD, Zone 7 or other providers, but without success. Shapell and Windemere will not seek annexation for any portion of the Property for which a permanent alternative water supply has been secured. (ii) Until such time as a sufficient water supply is available to meet demand in the EBMUD service area and the Property, as determined in the manner set forth in Exhibit E, water service for any portion of the Property outside CCGR and the school sites shown on Exhibit B shall be subject to an offset fee to fund the cost of conservation programs or other methods necessary to offset additional water demand created by new hookups in the development. The calculation for the offset fee, and provisions governing payment of the offset fee are set forth in Exhibit F (iii) The number of new water service hook ups per year would not exceed 600. Any hook ups not used in any given year may be carried forward to future years, but in no event shall the number of hookups in any given year exceed 750. (iv) During any period in which the District has declared a drought emergency pursuant to Water Code § 350, EBMUD would issue no new water service hook- ups to the Property, and County, Windemere and Shapell would not submit an application to LAFCO for annexation to EBMUD.and would request that LAFCO withhold decision on any pending application for annexation to EBMUD. (i) It is expressly understood and agreed that notwithstanding any other provision of EBMUD policy or regulation, any amounts paid by Windemere and/or Shapell to EBMUD for planning or design for water service to the Property pursuant to this .paragraph 4 shall be credited to and result in an equivalent reduction of the System Capacity Charge applied to the development and shall not be refunded directly to Windemere and/or Shapell. (j) If EBMUD determines, in its sole discretion, that it has adequate water to serve new customers outside the District's boundaries, Shapell and/or Windemere may apply to EBMUD for water service without the restrictions and limitations set forth in this Agreement, and EBMUD will give impartial consideration to such application. However, EBMUD does not contemplate allowing such applications at this time. 7 5. PROJECTS MUST BE DESIGNED TO ACCOMMODATE RECLAIMED WATER EBMUD and the County will require that the projects in the Dougherty Valley be designed and built to accept and utilize reclaimed water for irrigation purposes in public and semi-public areas. County, Shapell and Windemere will consult with EBMUD in order that reclaimed water programs contemplated for the Dougherty Valley may be coordinated and compatible with EBMUD's reclamation programs. 6. DEVELOPMENT AGREEMENTS TO BE CONSISTENT WITH THIS AGREEMENT (a) County, Shapell and Windemere agree that any development agreements that may be adopted for the Property shall be consistent with and shall not abrogate or limit compliance with or implementation of, the provisions of this Settlement Agreement. Specifically, any development agreement adopted for the Property shall include the substance of the following provisions: (i) The Dougherty Valley project, including any subsequent modifications, shall be subject to all terms and provisions of this Settlement Agreement; and (ii) Nothing provided in any development agreement adopted for the Property is intended to or does abrogate or limit the enforceability or effectiveness of this Settlement Agreement. If there is conflict between any such development agreement, if such is approved, and this Settlement Agreement, the terms of this Settlement Agreement shall prevail. (b) County, Shapell and Windemere agree that any preliminary data relating to proposed development agreements which is submitted to the Dougherty Valley Oversight Committee shall also be submitted to EBMUD at the same time. In addition, at least 15 days prior to the presentation of such agreements to the County Board of Supervisors, the County, Windemere and Shapell shall provide the text of the agreements to EBMUD for its review with respect to the substance of the provision required by this paragraph. The County, Windemere and Shapell shall make every reasonable effort to incorporate into such agreements EBMUD's comments on the language of any provisions relating to the obligations set forth in this paragraph. (c) The County, Windemere, and Shapell agree not to seek or approve revisions to any development agreement for the Property following its initial adoption in any manner which limits, conditions, restricts, or abrogates any provision of this Settlement Agreement. The County, Windemere and Shapell will submit any such proposed revisions to EBMUD for comment in the manner specified in subparagraph (b) above. 8 7. RESOLUTION OF LAWSUIT RELATING TO THE 1992 APPROVALS (a) The parties desire to resolve all disputes relating to the 1992 Approvals, and to that end, all parties agree to take action jointly to accomplish by appropriate procedures and with the appropriate court(s) the vacation, elimination or modification of the Judgment and Writ of Mandate and/or dismissal of the Dougherty Valley Lawsuit, in order that the 1992 Approvals remain in effect. In the event that the settlement agreements in the case of Town of Danville et al. v. County of Contra Costa et al. (C93-00231) are effectuated prior to the effective date of this Settlement Agreement, the parties agree to join in the collective efforts of all the parties to the two lawsuits to accomplish by appropriate procedures and with the appropriate court(s) the vacation, elimination or modification of the Judgment and Writ of Mandate and/or dismissal of the Dougherty Valley Lawsuit in order that the 1992 Approvals and supporting EIR remain in effect. EBMUD further agrees not to file any action against the approval of any Development Agreements, rezonings or Preliminary Development Plans for the Property to the extent such approvals are in substantial conformance with the 1992 Approvals as modified to reflect the Country Club at Gale Ranch approvals, this Settlement Agreement, and any other settlement agreements entered into to settle the lawsuit entitled Town of Danville et al. v. County of Contra Costa et al... EBMUD retains the right to oppose and file a legal challenge against such approvals, and any other subsequent approvals for the Project, with respect to the subject of water availability or quality to the extent such approval or approvals are not based upon or in substantial conformance with the 1992 Approvals as modified to reflect the Country Club at Gale Ranch approvals, this Settlement Agreement, and any other settlement agreements entered into to settle the lawsuit entitled Town of Danville et al. v. County of Contra Costa et al... (b) Except as otherwise provided in paragraph 4(b) EBMUD retains its right to comment upon and oppose future Dougherty Valley project-level applications (such as tentative maps) and any future environmental impact reports that may be required, with respect to the subject of water availability or quality. EBMUD also retains the right to oppose and legally challenge any approvals which seek to designate EBMUD as the preferred water provider or to annex any of the Property to EBMUD to the extent they are inconsistent with . the provisions of this Settlement Agreement. 8. DISPUTE RESOLUTION PROCESS (a) If a dispute arises relating to the interpretation of, enforcement of or compliance with the terms and provisions of this Agreement, the parties to the dispute will first attempt to resolve it through informal discussions, which may include designated- representatives esignatedrepresentatives of Shapell and Windemere, the County and EBMUD. Any party may convene such discussions through written notice delivered by confirmed facsimile transmission or overnight delivery to the other parties, providing at least ten days' notice, and setting a date, time and place for such discussions. The convening party shall reasonably accommodate the parties' schedules in selecting and/or altering the date and time of the discussions. In the event a dispute cannot be resolved in this manner within twenty-one (21) days, upon agreement among the parties, the dispute may be referred to a mediation process. 9 (b) The dispute resolution process described above shall be undertaken in good faith and exhausted prior to judicial review; provided, however, that no party to this Agreement hereby loses or waives its right to file an action to comply with any applicable statute of limitations or loses or waives its right to assert the operation of any applicable statute of limitations as an affirmative defense. In the event that an applicable statute of limitations would expire during the pendency of the dispute resolution process described above, the parties may agree in writing to toll such statute of limitations for such period as may reasonably be necessary to complete the dispute resolution process. 9. RULES AND REGULATIONS GOVERNING WATER SERVICE TO CUSTOMERS OF EBMUD; FRUSTRATION OF PURPOSE Any water service provided to the Property by EBMUD pursuant to the terms, conditions and limitations of this Agreement shall be subject to compliance by Windemere and Shapell with the lawful and non-discriminatory application of the Rules and Regulations Governing Water Service to Customers of EBMUD, and any amendments thereto that may be adopted. In no event, however, shall any party to this Agreement take any action (whether by the amendment of said Rules or otherwise) which has the purpose or effect of frustrating the accomplishment of the purposes of this Agreement or the exercise of the rights conferred under this Agreement; provided, however, that actions of the District to (a) modify its rates, charges and fees, (b) adopt reasonable revisions to its engineering standards and practices, and (c) provide for compliance with standards, requirements and regulations promulgated by federal, state, and local authorities other than EBMUD shall not be deemed to frustrate the accomplishment of the purposes of this Agreement. 10. GENERAL PROVISIONS (a) * Each party expressly waives any rights or benefits available to it under the provisions of Section 1542 of the California Civil Code, which provides as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. (b) Each party represents that the contents of this Agreement have been explained to it by its duly authorized counsel and that this Agreement is executed voluntarily, with full knowledge of its significance and contents and with full authority. (c) The terms and conditions of this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement and their respective successors and assigns. 10 (d) This Agreement constitutes the entire Agreement among the parties with respect to the subject matter hereof and supersedes any prior understandings or agreements among the parties, whether oral or written. This Agreement may not be amended or modified unless made in writing and signed by each of the parties. Where an amendment or modification that would affect only one of the Property owners need not be approved by the other Property owner. (e) Neither the negotiation of this Agreement, nor any action taken to carry out this Agreement, (i) is or may be construed or used as an admission or concession by or against any party to this Agreement of any fault, wrongdoing or liability, or (ii) may be offered or received in evidence in any action or proceeding against any Party to this Agreement in or before any court, administrative agency or tribunal for any purpose; provided, however, that this Agreement and its exhibits may be filed in the Lawsuit as evidence thereof. The Parties to this Agreement further agree that the provisions of California Evidence Code Sections 1152 and 1154 apply to all negotiations and settlement discussions leading to, and all actions taken to carry out, this Agreement, and that such negotiations, discussions and actions shall not be admissible for any purpose other than as necessary to effectuate, enforce or defend the provisions of this Agreement. (f) Shapell and Windemere will each pay to EBMUD attorneys fees in the amount of$97,000, payable within five business days following disposition of the Dougherty Valley Lawsuit pursuant to paragraph 7(a) of this Agreement. This obligation is several and not joint. Except as provided herein, each party shall bear its own costs and fees incurred in the Lawsuit and this Settlement Agreement. (g) Shapell and Windemere agree and warrant that they will provide a copy of this agreement to any purchasers, assignees or successors-in-interest of the Property who will be affected and governed by the terms and conditions of this Agreement, prior to the transfer of title. In the event of the failure to provide the foregoing notice, Windemere and Shapell agree to defend, indemnify and hold EBMUD harmless from any and all loss or expense incurred by EBMUD resulting therefrom, provided that the developer affected shall have the right to assume the defense of any claim made or action brought against EBMUD on the basis of which EBMUD makes a claim under this paragraph 10(g). In addition, the County, Windemere and Shapell agree that the requirements of this Agreement shall be incorporated into conditions of approval subsequently issued within the Property if EBMUD is proposed to provide water service to the portion of the Property affected by the approval. 11 COUNTY OF CONTRA COSTA Date: ' ?; 1995 By: ,A;yA % 4 hair of the B rd of Supervisors Date: v V j ( 1995 EAST BAY MUNICIPAL UTILITY DISTRICT By: �y sident of the Board of Directors Date: 3 0 1995 SHAPELL INDUSTRIES OF NORTHERN CALIFORNIA By: President Date: 1995 WINDEMERE RANCH PARTNERS By: WelmLow Man4g Partner 12 EXHIBIT LIST EXHIBIT A Process for notification and consultation concerning land use and water service matters. EXHIBIT B School Sites EXHIBIT C DSRSD steps and timetable and "best efforts" steps. EXHIBIT D Timeline for Planning/Design/Annexation/ Construction EXHIBIT E Method for determination sufficiency of water supply system EXHIBIT F Offset fee calculation and provisions governing payment 13 EXHIBIT A PROCESS FOR NOTIFICATION AND CONSULTATION CONCERNING LAND USE AND WATER SERVICE MATTERS EBMUD and Contra Costa County are jointly committed to improving coordination of Water Service planning with Land Use planning and decision making. To the end of improving such coordination the Contra Costa Community Development Department shall provide notification to EBMUD and shall consult with EBMUD concerning all relevant applications for development which are filed with the County. Notification and consultation shall occur in the manor below prescribed: I. The County shall notify EBMUD of all applications for development within the EBMUD current service boundary, sphere of influence boundary or where the county anticipates EBMUD service might be requested or required either immediately or in the future. Upon receipt by the County of application, a referral shall be sent within one week to EBMUD with sufficient detail to enable determination of the water supply implications to EBMUD. The County will supply additional information as reasonably requested by EBMUD to evaluate the water supply implications. II. For all applications outside the EBMUD service boundary where the County anticipates EBMUD service might be required and for any application involving an amendment to the County General Plan inside the service boundary which EBMUD determines to have significant impact upon its ability to supply water service to existing customers,the County and EBMUD will coordinate their review and approval processes with the objective of resolving or removing those aspects which create significant impact upon EBMUD's ability to supply water to existing customers. EBMUD shall have a minimum of 30 working days to provide comment and request formal coordination pursuant to this paragraph. III. For all applications outside the EBMUD existing service boundary, the County will insure that water supply planning and implications with respect to the EBMUD existing and future customers within the existing EBMUD service area are integrated into the land use planning and environmental documentation. .s A • a oat • ��, i •.��t%``jf •• "ice ♦, ::✓' ao. r"�• �.�''" �• t Y r,c. • ,� •. . � � p1Ca`Ll •"`F '.. -V-16" '• ` �• of . 1 Mti � • �_ OVA • .�� !'f?'��ysS ate+ � i.;�. •.a-••s 1 a t• •V*O�• 1 _ a. � �•� '� •••. Zv ` eiie .j ARK r� R t; ��� t ••,,.-„ :tom�-ed' . es(IDOIIO � G"5s- EXHIBIT C Efforts to Obtain Water Service from Source Other than EBMUD Paragraph 4 of this Agreement provides as a condition to certain EBMUD obligations that Shapell and Windemere will have exercised best efforts to secure an alternative water supply (through DSRSD, Zone 7 or other providers). Windemere and Shapell have undertaken or intend to undertake all reasonable and appropriate steps to obtain such water including those set forth below. To the best of Windemere and Shapell's knowledge, the activities, actions and approvals set forth below is a complete and accurate list of steps needed to secure permanent water service from a supplier other than EBMUD. In the event that additional activities, actions or approvals are subsequently identified which in the exercise of diligence should be undertaken in securing alternative permanent water service, such additional efforts will be diligently pursued as though they were included within this Exhibit C. Windemere and Shapell will continue to exert all reasonable efforts in furtherance of securing permanent water service from a supplier other than EBMUD until such time as application is made for annexation to EBMUD pursuant to the terms, conditions and limitations of paragraph 4 of this Agreement. Windemere and Shapell shall provide reports three times per year to EBMUD describing the activities and accomplishments since the previous report with regard to each of the activities; actions, and approvals set forth in this Exhibit C. Each report also shall provide updated information concerning the schedule for expected completion of each element in this Exhibit C and shall describe any newly identified elements for addition to Exhibit C including the estimated dates for completion of the new elements. Windemere and Shapell shall be deemed to have used "best efforts" for the purposes of this Agreement if and when: • in addition to undertaking each of the actions specified in Sections A and B below, they collectively have expended funds in the aggregate amount of $500,000 or more in furtherance of such actions; and • under the circumstances specified in Section C below, Windemere and Shapell undertake the actions specified in Section C below and they collectively have expended funds in the aggregate amount of$250,000 or more in furtherance of such actions. A. Initial Survey For over two years, Windemere and Shapell have undertaken an extensive search to identify viable sources of water as an alternative to EBMUD. Extensive discussions with State Water Project contractors and other entities with claims to State Water Project entitlements have occurred, including districts in San Joaquin, Calaveras, Amador, Stanislaus and Kern counties. A variety of other potential sources were considered, including the Mokelumne River and the American River. Through this process, entitlements held by 14 EXHIBIT C (page 2) Berrenda Mesa Water District presented the most immediately practicable option for obtaining a successful transfer that,would provide a permanent source of water for Dougherty Valley. As a result, Windemere and Shapell have undertaken or intend to undertake the steps set forth in Section B, below, to effectuate such a transfer. B. Berrenda Mesa Water District 1. Water District Contracts • Enter into a reimbursement agreement between DSRSD and Windemere for the purchase of Berrenda Mesa water. (Complete) • Obtain water purchase agreement between DSRSD and Berrenda Mesa ("Berrenda Mesa/DSRSD Contract"). (Complete) • Confirm State Water Project Contractors' agreement to the Monterey Principles, allowing for permanent transfers and making both agricultural and municipal contractors subject to equitable reductions in water supply during drought shortages. (Complete) • Amend Berrenda Mesa/DSRSD Contract to add Shapell as party. (Complete) • Obtain Kern County Water Agency approval of Berrenda Mesa/DSRSD Contract. (Complete) 2. Zone 7 • Obtain DSRSD Board's formal request of Zone 7 to deliver, transport and store water entitlements obtained from Berrenda Mesa ("DSRSD Request"). (Complete) • Obtain Zone 7 Board approval of DSRSD Request after certification of the Final EIR, as described in Section B.3, below. (Expected December 1995) 3. Complete environmental review for transfer, storage, treatment and conveyance of water from Berrenda Mesa Water District to DSRSD. (Certification of Final EIR expected December 1995) 4. LAFCO Actions • File LAFCO application for annexation to DSRSD. (Expected December 1995) 15 EXHIBIT C (page 3) • Obtain LAFCO approval of annexation of Dougherty Valley (other than CCGR and school sites adjacent to CCGR) to DSRSD. (Expected January 1996) 5. Other Agencies • Obtain Department of Water Resources approval of transfer of Berrenda Mesa Water to DSRSD. (Expected February 1996) C. Alternative Methods of Delivery and Sources of Water Although Windemere and Shapell anticipate that all of the actions necessary for the Berrenda Mesa transfer, conveyance, storage and delivery can be completed in a timely manner, it is possible that unforeseen physical or fiscal constraints will prevent either the contemplated method of delivery or the legal transfer of water rights from this particular source. In such event, Shapell and Windemere will initiate other efforts to secure alternative methods of delivery of water sources. As appropriate, these efforts will include the following:. 1. With respect to the method of delivery, it is possible that, although all other steps necessary for the transfer may occur, use of Zone 7 facilities will prove infeasible. If and when such an event occurs, but in no event later than July 1, 1996, Windemere and Shapell will promptly commence and diligently pursue the following: Initiate design work for construction of new DSRSD water treatment plant and conveyance facilities. • Study and initiate necessary contractual negotiations for storage alternatives, such as Semitropic Water Storage District Groundwater Bank, New Melones Reservoir or Los Vaqueros Reservoir. 0 Requesting DSRSD to initiate such actions as may be necessary for DSRSD to become a contractor with the State Water Project. 2. If all actions necessary to accomplish the Berrenda Mesa transfer are not completed by July 1, 1996, Windemere and Shapell at that time will promptly and diligently pursue the following: • Conduct a statewide search for water from other sources, including other State Water Project contractors and entities previously contacted, and other holders of contractual water supply entitlements and state-issued water rights. • Initiate discussions with parties identified as potential sources through statewide search. 16 EXHIBIT C (page 4) • Make preliminary determinations regarding legal, financial and technical feasibility of possible sources. • Actively pursue negotiations with feasible candidate sources. • If such negotiations are successfully progressing with respect to a potential feasible source or sources, conduct preliminary engineering analysis and environmental review and identify necessary governmental approvals. • If the above steps are successful, complete engineering analysis, environmental review and obtain necessary governmental approvals. • Upon obtaining necessary governmental approvals, commence design and construction work necessary to effectuate transfer and conveyance. 17 EXHIBIT E METHOD AND STANDARD FOR DETERMINING THE SUFFICIENCY OF THE EBMUD WATER SUPPLY SYSTEM FOR EXISTING AND FUTURE NEEDS BOTH FOR THE DISTRICT'S SERVICE AREA AND THE PROPERTY To determine the sufficiency of the District's water supply system to meet current and future demand in the EBMUD service area and the Property, the District will perform a computer analysis using its EBMUDSIM computer model. The water supply system will be deemed sufficient if the analysis shows that the water supply system can meet existing and future demand in the District's service area and the Property through the design drought cycle without requiring rationing in excess of 25% as set forth in the District's September 1993 Final Environmental Impact Report on its Updated Water Supply Management Program ("WSMP"). Except as modified herein, all model assumptions contained in such analysis shall be identical to those used to determine the 130 TAF Need for Water reported in the WSMP. Assumptions regarding instream flow and reservoir operating criteria related to fishery or other in-stream resource protection requirements will be modified to reflect the District's offer of settlement to the Federal Energy Regulatory Commission ("FERC") and will be subject to further modification based upon results of the State Water Resources Control Board, FERC, or other regulatory proceedings with jurisdiction affecting EBMUD water supplies which address these requirements. Assumptions regarding system capacity components which reduce the need for water such as addition of a connection to the Folsom South Canal, addition of storage to Pardee Reservoir, institution of a conjunctive use program, water reclamation projects, water conservation programs or similar capacity components, will be subject to modification. The capacity of Camanche Reservoir will be reduced from 430 A.F. to 413 A.F. to reflect recent survey data. Upon execution of this Agreement, a complete set of computer printouts delineating the District's need for 130 TAF of additional capacity will be delivered to the designated representative of Windemere and Shapell. Whenever the, District makes a determination of system delivery capacity pursuant to this section, a complete set of computer output will be delivered to the parties to this Agreement. 18 m 0_0 co CD -4 0) ul Ah w 0 > m m m z > z m 0 > 03 rn G ID '0 0_ _O >1 z r M 0) . a �'! > 0 0: COM- 430 A. z rn > 0 3. Ql z go 0 > 0. m -0 ID > > 8, 0 -0 L r > ID > n -n ID : 0 m CL ID -0: z CD o S, 0. I'JD) 0 0- to z Fn r Oz r: I C-): CL > (D rL 0 M 0 .Cc, CD (D a c q CL q a c m q a m 0 C, q q p c) =r 0 C', 0 n ...... ... .... ... ... .... ... .... .. ........... .................................... ............. ... ....... ..... ....... ..... ....... ..... .. .......—.... ... O ....... ... CL CD 0 M CD O O OD a a a a a a DO ... ........ .......................... .... ........ ro O a O C,) Cl) a CL (j) ............. ........ ................................. ......1.................1................... O O O O p a .................. ............. ........ ...... ..................... ...... ..................................................................... .......... ............... ...................................... ..........................................................-----................................. ..................................................... a a A EXHIBIT F CALCULATION OF OFFSET FEE AND PROVISIONS GOVERNING PAYMENT OF OFFSET FEE The offset fee shall be 1.65 times the Future Water Supply ["FWS'] portion of the System Capacity Charge ["SCC"] in effect at the time that the offset fee is paid and the base amount of the FWS shall be credited against the SCC paid at the time of hook-up. The Property shall constitute a separate SCC region. Water demand figures for residential and commercial structures to be utilized in computing the offset fee will be calculated according to the method utilized by EBMUD for its System Capacity Charge unit demand calculations, and will take into account the following factors, among others: Actual use by households in the area expected to exhibit similar potable water demand characteristics; Specific Plan restrictions and other conditions of approval which have an impact on water usage, such as requirements for xeriscaping, the use and availability of reclaimed water for public and semi-public areas, and other relevant design features; and the varying lot sizes of each type of single family residence. The water demand figures shall be determined prior to payment of the first offset fee. Unit water demand will be recalculated based upon actual water use within the Property measured beginning the second year following occupancy. The offset fee shall be paid no less than one year prior to the issuance of the water meter for the residential or commercial structure or other use. Within 30 days of the date on which it is determined that EBMUD has developed a sufficient water supply (as defined in Exhibit E), that portion of the offset fees which reflects .65 times the FWS portion of the SCC shall be refunded for any units for which an offset fee has been paid but for which no water meters have been issued. If construction on the Property is halted, at the request of the payor(s), the offset fees for some or all of the units which have not been issued a water meter shall be refunded,except that EBMUD shall retain .65 times the FWS for each such unit and shall have no further obligation to Windemere and Shapell as to any such funds retained by EBMUD. A halt in construction shall be defined as a six-month period during which no water meters have been issued. As an alternative to payment of the offset fee, until sufficient water is available as determined in the manner set forth in Exhibit E, Windemere and Shapell may secure an alternate source of water, of a quality and quantity satisfactory to EBMUD and not involving water under consideration as a possible alternative source for EBMUD under its WSMP, which EBMUD could purvey on an interim or permanent basis. EBMUD will reasonably cooperate in the foregoing, subject to payment by Windemere and Shapell of all costs incurred by EBMUD. . \ebmud\set\016\ch 19 f U' S� EAST BAY MUNICIPAL UTILITY DISTRICT LYNELLE M.LEWIS THE SECRETARY Of THE DISTRICT r RECEIVE? KE 2 X96 cum . NOTICE �►�S Aco.MORS i This notice is to advise that at its regular business meeting on Tuesday, August 8, 19751, t1he Easi Bay Municipal Utility District Board of Directors will have on its open meeting agenda consideration of a proposed agreement for settlement of- East £East Bay Municipal Utility District v. Contra Costa County et al. - Contra Costa County Superior Court, No. C93-00235 (Dougherty Valley Litigation). A summary of the agreement terms to be considered is attached. Copies of the agreement are available from the Office of the Secretary, 375 11th Street, Oakland, CA 94607 (phone 510/287-0440). Dated: August 1, 1995 Ly4ielle M. Lewis Secretary of the District 375 ELEVENTH STREET. OAKLAND. CA 94607.4240. 15101 835.3000 BOARD OF DIRECTORS JOHN A.COLEMAN . KATY FOULKES .JOHN M.GIOIA FRANK MELLON. NANCY J.NADEL. MARY SELKIRK. KENNETH H.SIMMONS SUMMARY OF AGREEMENT TO SETTLE LITIGATION RELATING TO THE DOUGHERTY VALLEY GENERAL PLAN AMENDMENT,SPECIFIC PLAN AND ENVIRONMENTAL IMPACT REPORT AND RELATING TO THE WATER SUPPLY MANAGEMENT PROGRAM AND ENVIRONMENTAL IMPACT REPORT OF THE EAST BAY MUNICIPAL UTILITY DISTRICT The Board of Directors of East Bay Municipal Utility District will be considering approval of a proposed settlement agreement which sets forth the terms and conditions under which the district would dismiss its lawsuit entitled EBMUD v.County Contra Costa et Al.,No. C93-00235,in Contra Costa County Superior!'ourt,challenging the county's approval of a General Plan Amendment and a Specific Plan for Dougherty Valley, and the environmental impact report on which such approval was based. The settlement agreement also provides for dismissal of the lawsuit filed by Contra Costa County,Windemere Ranch Partners,and Shapell Industries of Northern California challenging the environmental impact report prepared by EBMUD for its Water Supply Management Program adopted in October 1993. Provisions of the agreement are summarized as follows: Section 1. EARL YCONSUL TATION BETWEEN EBMUD AAD THE COUNTY Under the agreement, EBMUD and the county would establish a regular meeting schedule for the purpose of coordinating activities related to water supply planning and land use planning. A notification and consultation process would be established to provide for early discussion and exchange of information related to water demand of proposed new development,the availability of water supply and system capacity to meet the demand,the impact on service to existing customers, and availability of water supply sources to meet the needs of existing and future customers in the county. Section 2. CONFIRMATION OF SERVICE TO COUNTRY CLUB AT GALE RANCH The agreement would confirm the provision of water service to the Country Club at Gale Ranch, which is located within the district's current service boundaries, and further confirms that water supply facilities will be sized to serve the Country Club at Gale Ranch only. EBMUD would agree not to oppose annexation of school sites located near the Country Club at Gale Ranch development and adjacent to the existing EBMUD boundary,provided that such school sites would be used only for school and/or park purposes. -1- Section 3. DISMISSAL OF CHALLENGE TO WSMP The agreement would provide for dismissal of the action filed by the county, Shapell and Windemere,challenging the adequacy of the environmental impact report for adoption of EBMUD's Water Supply Management Program. Section 4. DESIGNATION OF DSRSD AS PREFERRED WATER PROVIDER The agreement would require Shapell and Windemere to continue to use best efforts to secure permanent water service for the Dougherty Valley from the Dublin San Ramon Services District, as an alternative to seeking water service from EBMUD. These efforts include contracts for the transfer and delivery of water from Berrenda Mesa Water District to DSRSD, environmental documentation, approval by applicable regulatory agencies, and LAFCO approval of annexation of the Dougherty Valley property to DSRSD. In the event the proposed DSRSD/Berrenda Mesa water supply cannot be delivered using Zone 7 facilities, Shapell and Windemere will initiate efforts to secure alternative methods of transfer and delivery,including design work for new DSRSD treatment and conveyance facilities. If actions necessary to accomplish the Berrenda Mesa transaction are not completed by July 1, 1996,Windemere and Shapell will pursue efforts to obtain a water supply from other sources,including other State Water Project contractors. Best efforts also include a significant financial investment of$750,000 in efforts to secure an alternative supply for Dougherty Valley. Section 4 of the agreement specifies terms, conditions and limitations which would apply in the event that Shapell and Windermere are unsuccessful in securing an alternative water supply for Dougherty Valley(having worked to do so in accordance with the provisions of the agreement),and seek annexation for any portion of the Dougherty Valley to EBMUD. The terms, conditions and limitations which would apply to such application for annexation to EBMUD are summarized as follows: (a) Shapell and Windemere would not submit an application to LAFCO for annexation to EBMUD of Dougherty Valley property prior to July 1, 2000. EBMUD would not oppose such application for annexation subject to the following conditions: 1) Shapell and Windemere have completed best efforts, as defined in the agreement,to secure an alternative water supply,but have been unsuccessful; 2) water service for any portion of Dougherty Valley would be subject to an offset fee to fund the cost of conservation programs or other methods necessary to offset additional water demand created by new hook-ups in the development. The offset fee would be calculated at 1.65 times the Future Water Supply portion of the EBMUD System Capacity Charge in effect at the time of payment. The offset fee would be paid no less than one year prior to the issuance of the water meter in order that programs to offset the new demand can be implemented in advance; -2- r 3) the number of new water service hook-ups per year would not exceed 600; 4) during any period in which the district has declared a drought emergency pursuant to Water Code section 350, EBMUD would issue no new water service hook-ups to the property,and there would be no application made to LAFCO for annexation to EBMUD;and 5) EBMUD would not provide water service hook-ups within the annexed Dougherty Valley property any time prior to January 1,2002. (b) In order to allow for planning of facilities necessary to commence delivery of water service after January 1, 2002, planning work could be undertaken at Shapell and Windemere's expense, commencing January 1,2000,but such work would provide no assurance for the provision of water service unless and until the property is annexed to EBMUD subject to the terms, limitations and conditions of the agreement. Section S. PROJECTS MUST BE DESIGNED TO ACCOMMODATE RECLAIMED WATER The agreement would provide that EBMUD and the county will require that projects in Dougherty Valley be designed and built to accept and utilize reclaimed water for irrigation purposes in public and semi-public areas. Section 6. DEVELOPMENT AGREEMENTS TO BE CONSISTENT WITH THE SETTLEMENT AGREEMENT The agreement would provide that any development agreements that may be adopted for Dougherty Valley shall be consistent with the terms,conditions and limitations of the settlement agreement,and any development agreement adopted for the property shall reference the tenors and provisions of the settlement agreement. Section 7. RESOLUTION OF LA WSUIT RELATING TO THE 1992 APPROVALS Based upon the terms of the settlement agreement,the parties would jointly seek modification of the judgment and writ of mandate and/or dismissal of the Dougherty Valley lawsuit,thereby leaving the 1992 General Plan Amendment and Specific Plan for Dougherty Valley in effect. Section 8. DISPUTE RESOLUTIONPROCESS This section would provide for an informal dispute resolution process,prior to initiation of litigation, to resolve any dispute that may arise relating to the interpretation of,enforcement of, or compliance with the terms of the settlement agreement. -3- Section 9. RULES AND REGULATIONS GOVERNING WATER SERVICE TO CUSTOMERS OF EBMUD;FRUSTRATION OF PURPOSES This section would specify that water service provided to Dougherty Valley by EBMUD,pursuant to the terms,conditions and limitations of the settlement agreement,would be subject to compliance by Windemere and Shapell with the rules and regulations governing water service to customers of EBMUD. This section would further provide that no party shall take any action which has the purpose or effect of frustrating the purposes of the agreement or the exercise of rights conferred under the agreement. Section 10. GENERAL PROVISIONS Under section 10 of the agreement, Shapell and Windemere would pay EBMUD attorneys' fees in the amount of$194,000. -4-