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CONTRACT 2677A AmendmentAgreement No. 2677A AMENDMENT NO.1 TO THE WATER SERVICE AGREEMENT BY AND AMONG CHEVRON PRODUCTS COMPANY, A DIVISION OF CHEVRON U.S.A. INC., THE CITY OF EL SEGUNDO, AND WEST BASIN MUNICIPAL WATER DISTRICT This Amendment No. 1 ("Amendment") is dated and made effective as of October 7, 2014 ("Amendment Effective Date") by and among Chevron Products Company, a division of Chevron U.S.A. Inc., a Pennsylvania corporation ("Company" or "Chevron"), the CITY OF EL SEGUNDO, a municipal corporation and general law city ("CITY" or "City"), and the WEST BASIN MUNICIPAL WATER DISTRICT, a California public utility (the "Water District"). This Amendment constitutes an amendment to the WATER SERVICE AGREEMENT between Chevron and the City, dated and made effective as of February 2, 1999 referred in this Amendment as the "Recycled Water Agreement". Chevron, the City and the Water District may sometimes be referred to herein individually as a "Party" and collectively as the "Parties." WHEREAS, the Parties entered into the Recycled Water Agreement dated on or about February 2, 1999; and WHEREAS, the Recycled Water Agreement had an original term of fifteen (15) years from the date of initial delivery, resulting in the Recycled Water Agreement expiring on June 30, 2016; and WHEREAS, Chevron and the City entered into a Tax Resolution Agreement with an effective date of April 23, 2013 (the "Tax Agreement'). The Tax Agreement will end on September 30, 2027; and WHEREAS, the Parties acknowledge that the construction of the water distribution system (defined as the "System" in the Recycled Water Agreement) has been completed and is now being maintained by the Water District and the City is the retailer of the non -potable water delivered from the System; and WHEREAS, the City, Chevron and the Water District now wish to amend the Recycled Water Agreement so that the term of the Recycled Water Agreement will be extended so that It has a term the same and consistent with the Tax Agreement, and unless the Recycled Water Agreement is otherwise terminated pursuant to its terms and/or this Amendment, the Recycled Water Agreement will be extended up to and including September 30, 2027; and. WHEREAS, the Parties acknowledge that the only changes or increases of prices, markups, charges, rates or surcharges during the extended term of the Recycled Water Agreement shall be pursuant to the terms of the Recycled Water Agreement and this Amendment unless otherwise agreed by the Parties in writing. NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties do hereby agree to amend the Recycled Water Agreement as follows: 1. Definitions. The capitalized terms defined in this Amendment have the meanings assigned to them, including terms defined by inclusion in quotation marks and parentheses. All other capitalized terms used, but not defined, herein shall have the same meanings assigned to such terms in the Recycled Water Agreement and any previous amendments. 2. Tenn of the Agreement — Section 2. The Parties hereby agree that the term of the Recycled Water Agreement shall be, and is hereby, extended up to, and including, September 30, 2027 unless otherwise terminated by an agreement among the Parties or pursuant to the terms of the Recycled Water Agreement or this Amendment by one or all of the Parties. Notwithstanding the foregoing, should the Tax Agreement terminate for any reason prior to the end of its Term (as defined in the Tax Agreement), CHEVRON may also terminate the Recycled Water Agreement upon thirty (30) days' notice without further liability to the CITY or the Water District. Amendment to Recycled Water Agreement The City of El Segundo, Chevron and the Water District Page 1 224 Agreement No. 2677A 3. Fixed MQLvlhly M t r and infrastructure ChaEglegs. In consideration of Chevron agreeing to extend the term of the Recycled Water Agreement as stated in this Amendment and effective as of the Amendment Effective Date, the Parties agree that Section 4.(a) of the Recycled Water Agreement shall be amended to read as follows: DISTRICT CHARGES "Chevron currently pays a meter/infrastructure charge directly to the Water District in the amount of $182,733.00 per month ("District Infrastructure Charge"). Additionally, the Water District bills the City for a nitrification infrastructure charge in the amount of $84,150.00 per month ("District Nitrification Infrastructure Charge") which the City in turn bills Chevron for, without any mark-up by the City, and Chevron is responsible for paying this amount. The District Infrastructure Charge and the District Nitrification Charge may be collectively referred to herein as "District Charges". The Water District and City shall continue to bill Chevron for District Charges, and Chevron shall be responsible for paying such, and any increase in these amounts by the Water District or City shall be reasonable and no greater than those charged to other purchasers of water from the Water District and City. In no event shall the City mark-up the District Charges and in the event that the Water District ceases to impose any part or all of the District Charges then Chevron shall only be liable for paying the amount, if any, of the actual District Charges." Chevron and the Water District agree to negotiate in good faith the amount of"District Charges" the Water District or the City will charge Chevron for the remaining term of the Recycled Water Agreement to go into effect July 1, 2016, CITY CHARGES Finally, the City currently bills Chevron for seven (7) meters at an average rate of $53.15 per meter per month, for an average total of $372.05 per month, for delivery of the non -potable water ("City Meter Charges"). The City shall continue to bill Chevron for City Meter Charges, and Chevron shall be responsible for paying such, and any increase in these amounts by the City shall be reasonable and no greater than those charged to other purchasers of water from the City. 4. Rages/Price Char es/Surchar es Mar a s. The City is currently charging Chevron a mark-up rate of $0.7894 per hundred cubic -foot unit in accordance with Section 4.(b). of the Recycled Water Agreement which has increased over time from the $0.3056 per hundred cubic -foot set forth in Section 4.(b)(Ii) of the Recycled Water Agreement. In consideration of Chevron agreeing to extend the term of the Recycled Water Agreement as stated in this Amendment, any increases of this mark-up amount shall continue to be imposed subject to Section 4(b)(iii) of the Recycled Water Agreement.. 5. Effect of the Amendment. Except as expressly amended, supplemented and modified herein, nothing in this Amendment in anyway alters or amends the restrictions, rights or obligations under the Recycled Water Agreement that are not expressly amended herein, and all other provisions in the Recycled Water Agreement are hereby ratified, confirmed and remain in full force and effect. This Amendment shall The prevail and control with respect to any inconsistency between the interpretation of the Recycled Water Agreement, this Amendment and any other addendum or prior amendment. IN WITNESS WHEREOF, the Parties have executed this Amendment through their authorized representatives as evidenced by the signatures below. CITY OF EL SEGUNDO WEST BASIN MUNICIPAL WATER DISTRICT Amendment to Recycled Water Agreement The City of El Segundo, Chevron and the Water District Page 2 225 a By: —. ; a Fuentes, Mayor Date ATTEST: tiicy Weav( Ci` Clerk APPROVED AS TO FORM: Mark D.� a y, City Attorn+ey�� ��. CHEVRON PRODUCTS COMPANY a division of CHEVRON U.S.A. INC. reement No. 2677A By: _m... Print: Title: .. Date: APPROVED AS TO FORM: BY: Print. Title: Dia t counse Title:"' Date: Amendment to Recycled Water Agreement The City of El Segundo, Chevron and the Water District Page 3 226