Agenda packet — El Cajon City Council, July 28, 2026 (part 1 of 2)

El Cajon City Council
Participation
Time and Loca�on
2nd and 4th Tuesday of each month, at 3:00 PM.

Council Chamber
200 Civic Center Way
El Cajon, CA 92020
Watch Online
YouTube: htps://www.youtube.com/@ElCajonCouncilMee�ngs
Please note, digital comments on YouTube are not monitored.

Public Comments
Members of the public may address the City Council on any item listed on the agenda, or on maters which are not listed on the agenda but are within the subject mater jurisdic�on of the City Council, Housing Authority and Successor Agency to the El Cajon Redevelopment Agency.

Speaker cards or requests to speak via ElCajon.gov/RemotePar�cipa�on must be submited to the City Clerk
prior to the item being called. No late comment cards will be accepted. Please note that comments for Closed Session items will be heard during the general public comment por�on of the agenda.

P
ublic comments are typically limited to three (3) minutes per person, per agenda item, unless the presiding oﬃcer changes that �me.

P
er the Brown Act, the City Council cannot take formal action on items raised during public comments; however, Council may offer a brief response or direct staff to place the item on a future agenda for consideration.

In-Person Comments
Please complete a speaker card with the agenda item number you wish to speak about, or indicate if it is a general public comment, and return it to the Deputy City Clerk. When it’s your turn, the City Clerk will call your name and invite you to the podium.

Contact informa�on on speaker cards is op�onal. Any informa�on provided on a speaker card is considered a ‘public record’, and may be distributed or released to the public and/or media.

Remote Comments
If you wish to par�cipate remotely you must preregister at ElCajon.gov/RemotePar�cipa�on. Once you are registered you will receive instruc�ons on how to join the mee�ng, via Microso� Teams.

Once in the mee�ng, your microphone will be muted un�l it is your turn to speak on an item. When the City Clerk calls your name you will hear that your microphone has been unmuted by the moderator. Your �me will begin once you start speaking. During your alloted �me, you can mute or unmute your microphone by pressing *6. Once your turn to speak is over your microphone will again be muted by the moderator . If you register to speak on mul�ple agenda items, this process will repeat for each item you have registered for.

Writen Comments
Comments must be emailed to the City Clerk at [email protected] or mailed to the City Clerk at 200 Civic Center Way, El Cajon, CA 92020 and received by 4:00 pm the day prior to the City Council mee�ng for prompt distribu�on. Writen public comments will be provided to the City Council in advance of the mee�ng for review and will be recorded in the public record.

Listening Devices and other Accommoda�ons
The City of El Cajon encourages the par�cipa�on of disabled individuals to be in total compliance with the Americans with Disabili�es Act. If you require public documents in an accessible format, the City will make reasonable eﬀorts to accommodate your request. This material is also to be made available in Spanish or Arabic upon request. If you are a non-English speaking resident or a ci�zen with speech or hearing impairments, and wish to comment at the Public Hearing or require any other form of assistance or auxiliary aids in order to par�cipate at Public Hearings, please contact the City Clerk’s Oﬃce at (619) 441-1763, as far in advance of the mee�ng as possible.

Members of the public who wish to translate or receive interpreta�on provided by another member of the public can do so as long as there is no disrup�on to the mee�ng. The City will arrange a space for interpreters at the mee�ng loca�on, upon writen request to the City Clerk at least 24 (twenty-four) hours before the mee�ng.

Rules of Decorum:

While the city council is in session, (1) any person or councilmember who actually disrupts a council mee�ng by ac�ng in a disorderly, noisy, sustained, manner, (2) any person whose conduct actually disrupts the due course of the council mee�ng while addressing the city council or any councilmember thereof, or (3) any member of the public in atendance who actually disrupts the mee�ng by failing, on demand of the presiding oﬃcer, to comply with any warning or order of the presiding oﬃcer made in accord with the authority of this chapter, is subject to arrest for viola�ng the California Penal Code or this code. See El Cajon Municipal Code §

2.12.140 - § 2.12.160 for addi�onal informa�on.

Technology Disrup�on Policy:

In the event the City Council Chamber loses electrical power or suﬀers an internet connec�on outage that is not corrected within one (1) hour, the City Council may adopt a ﬁnding by roll call vote that it has made good faith eﬀorts to restore service in accordance with its policy and that public interest in con�nuing the mee�ng outweighs the public interest in remote public access. If such a ﬁnding is adopted, the Council will con�nue the mee�ng. If the Council chooses to adjourn the mee�ng and con�nue at a future �me, any items no�ced as public hearings will be con�nued to the next regularly scheduled mee�ng of the City Council. Any other items on the agenda that the Council has not taken ac�on on will be placed on a future agenda.

CITY COUNCIL

HOUSING AUTHORITY AND

SUCCESSOR AGENCY TO THE EL CAJON

REDEVELOPMENT AGENCY
Council Chamber
200 Civic Center Way
El Cajon, CA 92020

Agenda
JULY 28, 2026, 3:00 p.m.

Bill Wells, Mayor Graham Mitchell, City Manager
Michelle Metschel, Deputy Mayor Vince DiMaggio, Assistant City Manager Steve Goble, Councilmember Marisol Thorn, Deputy City Manager Gary Kendrick, Councilmember Jennifer Lyon, City Attorney Phil Ortiz, Councilmember Angela Cortez, City Clerk

CALL TO ORDER: Mayor Bill Wells

ROLL CALL: City Clerk Angela Cortez

PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE

POSTINGS: The City Clerk posted Orders of Adjournment of the July 14, 2026, Meetings and the Agenda of the July 28, 2026, Meeting in accordance to State Law and City Council/Housing Authority/Successor Agency to the Redevelopment Agency Policy.

PRESENTATIONS:
America 250 Celebration

AGENDA CHANGES:

.!!!!. Valley of opportunity
•
CONSENT ITEMS:

Consent Items are routine matters enacted by one motion according to the RECOMMENDATION listed below. With the concurrence of the City Council, a Council Member or person in attendance may request discussion of a Consent Item at this time.

1. Minutes of the City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency Meetings
RECOMMENDATION:

That the City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency approves Minutes of the July 14, 2026, Meetings of the El Cajon City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency.

2. Warrants
RECOMMENDATION:

That the City Council approves payment of Warrants as submitted by the Finance Department.

3. Approval of Reading Ordinances by Title Only
RECOMMENDATION:

That the City Council approves the reading by title and waives the reading in full of all Ordinances on the Agenda.

4. Approval of Resolution to Approve the Revised Second Amended and Restated Regional Wastewater Disposal Agreement (SARA)
RECOMMENDATION:

That the City Council adopts the next Resolution, in order, to:

Approve the Second Amended and Restated Wastewater Disposal Agreement (SARA), as revised, dated June 12, 2026; and

1. Authorize the Mayor to sign the revised SARA in substantially the form attached to the agenda packet, to allow for potential minor corrections to the document.

2. 5. 2026-2027 Office of Traffic Safety (OTS) Selective Traffic Enforcement Program (STEP) Grant
RECOMMENDATION:

That the City Council authorizes the City Manager or his designee to accept, appropriate, and expend the California Office of Traffic Safety (STEP) Grant in the amount of $83,000 and to execute any grant documents and agreements necessary for the receipt and use of these funds.

PUBLIC COMMENT:

At this time, any person may address a matter within the jurisdiction of the City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency that is not on the Agenda. Comments relating to items on today’s docket are to be taken at the time the item is heard. State law prohibits discussion or action on items not on the Agenda; however, Council, Authority and Agency Members may briefly respond to statements or questions. An item may be placed on a future Agenda.

WRITTEN COMMUNICATIONS:

PUBLIC HEARINGS:

ADMINISTRATIVE REPORTS:

6. Consideration to Approve Resolution of Intent to Establish a Downtown El Cajon Community Benefit District (CBD); Authorization for City Manager or Designee to vote “Yes” on the ballot; and Acceptance of the Management District Plan and the Engineer’s Report
RECOMMENDATION:

That the City Council:

Receives report and petition drive results;1.

Adopts the next Resolution, in order, to approve the Resolution of Intent to set a public hearing and direct the ballots to be mailed to affected property owners, and authorize the City Manager or designee to vote “Yes” on the City’s ballot in support for the creation of the Downtown El Cajon Community Benefit District; and

2. Accepts the Management District Plan and the Engineer’s Report for the Proposed CBD.

3. 7. Social Services & Business Incubator Programs Update RECOMMENDATION:

That the City Council receives the report.

8. Approval of Resolutions to Award Bid No. 005-27 – 405 E. Lexington Avenue Tenant Improvements and Approve Plans & Specifications
RECOMMENDATION:

That the City Council approves the next Resolutions, in order, to:

Approve Plans and Specifications for 405 E. Lexington Avenue Tenant Improvements, Bid No. 005-27;

1. Find the following:

Protest (Ground 1) submitted by GQ Builders, Inc. (GQBI) to be timely and with merit;
Protest (Grounds 2 through 4) submitted by GQBI to be timely and without merit;
The apparent first and fourth low bidders non-responsive for the reasons set forth in the agenda report; and

2. Award the bid to the lowest responsive, responsible bidder, GQ Builders, Inc. (GQBI), in the amount of $430,000.

3. COMMISSION REPORTS:

ACTIVITIES REPORTS/COMMENTS OF MAYOR WELLS
SANDAG (San Diego Association of Governments) Board of Directors.

9. Council Activity Report

ACTIVITIES REPORTS/COMMENTS OF COUNCILMEMBERS:

10. COUNCILMEMBER STEVE GOBLE
MTS (Metropolitan Transit System Board); East County Advanced Water Purification JPA Board; Chamber of Commerce – Government Affairs Committee; SANDAG – Board of Directors – Alternate.

11. COUNCILMEMBER GARY KENDRICK
METRO Commission/Wastewater JPA; Heartland Communications; Heartland Fire Training JPA.

12. DEPUTY MAYOR MICHELLE METSCHEL
Harry Griffen Park Joint Steering Committee; METRO Commission/Wastewater JPA – Alternate; Heartland Communications – Alternate; Heartland Fire Training JPA – Alternate.

13. COUNCILMEMBER PHIL ORTIZ
•
•
•

13. COUNCILMEMBER PHIL ORTIZ
League of California Cities, San Diego Division; East County Economic Development Council; MTS (Metropolitan Transit System Board) – Alternate; East County Advanced Water Purification JPA Board – Alternate; Chamber of Commerce – Government Affairs Committee – Alternate; SANDAG – Board of Directors – Alternate.

JOINT COUNCILMEMBER REPORTS:

14. Sewer Lateral Policy
RECOMMENDATION:

That the City Council directs staff to present an analysis regarding the City's current sewer lateral policy.

15. Parkway Plaza Acquisition Options
RECOMMENDATION:

That the City Council directs staff to prepare and return with an analysis of the potential options to acquire the Parkway Plaza property.

16. Kaiser Permanente Acquisition Options
RECOMMENDATION:

That the City Council directs staff to prepare and return with an analysis of the potential options to acquire the Kaiser Permanente property.

GENERAL INFORMATION ITEMS FOR DISCUSSION:

ORDINANCES: FIRST READING

ORDINANCES: SECOND READING AND ADOPTION

CLOSED SESSIONS:

17. Closed Session - Conference with Legal Counsel - Anticipated Litigation - Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Government Code section 54956.9: Three (3) potential cases

18. Closed Session - Conference with Legal Counsel - Existing Litigation pursuant to paragraph (1) of subdivision (d) of Government Code section 54956.9: Haralson vs El Cajon Police Department, et al.

19. Closed Session - CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1)

ADJOURNMENT: The Adjourned Regular Joint Meeting of the El Cajon City Council/El Cajon Housing Authority/Successor Agency to the El Cajon Redevelopment Agency held this 28th day of July 2026, is adjourned to Tuesday, August 11, 2026, at 3:00 p.m.

City Council
Agenda Report
Agenda Item 1.

DATE: 07/28/2026
TO: Honorable Mayor and City Councilmembers
FROM: Angela Cortez, City Clerk
SUBJECT: Minutes of the City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency Meetings
RECOMMENDATION:

Attachments
07-14-26DRAFTminutes - Special Joint Meeting - 230PM
07-14-26DRAFTminutes - 3 PM

Special Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES - July 14, 2026 Successor Agency to the Redevelopment Agency - 152 - 2:30 p.m.

PLEASE NOTE: THESE ARE DRAFT MINUTES UNTIL
ADOPTED BY THE CITY COUNCIL.

JOINT SPECIAL MEETING OF THE

EL CAJON CITY COUNCIL/HOUSING

AUTHORITY/SUCCESSOR AGENCY

TO THE EL CAJON

REDEVELOPMENT AGENCY

MINUTES

CITY OF EL CAJON

EL CAJON, CALIFORNIA

July 14, 2026

A Joint Special Meeting of the El Cajon City Council/Housing Authority/ Successor Agency to the El Cajon Redevelopment Agency, held Tuesday, July 14, 2026, was called to order by Mayor/Chair Bill Wells at 2:31 p.m., in the Council Chambers, 200 Civic Center Way, El Cajon, California.

R O L L C A L L
Council/Agencymembers present: Goble, Kendrick, and Ortiz Council/Agencymembers absent: None
Deputy Mayor/Vice Chair absent: Metschel
Mayor/Chair present: Wells
Other Officers present: Mitchell, City Manager/Executive Director DiMaggio, Assistant City Manager
Thorn, Deputy City Manager
Lyon, City Attorney/General Counsel
Cortez, City Clerk/Secretary

PLEDGE OF ALLEGIANCE TO FLAG led by Mayor Wells and MOMENT OF SILENCE.

Deputy Mayor Metschel entered the Chamber at 2:33 p.m.

Tbe Valley of Opportunity
- -~ ~ ~
(>() ~ \."
~Porate~

Special Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES - July 14, 2026 Successor Agency to the Redevelopment Agency - 153 - 2:30 p.m.

CLOSED SESSIONS:

RECOMMENDATION: That the City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency adjourns to Closed Session as follows:

1. Closed Session - Conference with Labor Negotiators pursuant to Government Code section 54957.6

Agency Designated Representatives:

Graham Mitchell, City Manager
Jennifer Lyon, City Attorney
Vince DiMaggio, Assistant City Manager
Marisol Thorn, Deputy City Manager
Clay Schoen, Director of Finance
Shelline Bennett, Special Counsel

Employee Organizations:

El Cajon Professional Firefighters International Association of Fire Fighters Local 4603

2. Closed Session - CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1)

3. Closed Session - CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1)

MOTION BY WELLS, SECOND BY KENDRICK, to ADJOURN to Closed Session at 2:33 p.m.

MOTION CARRIED BY UNANIMOUS VOTE.

RECONVENED to Open Session at 3:01 p.m.

City Attorney Lyon reported the following actions:
• Item 1 – Direction was given, no reportable action taken. • Item 2 – Direction was given, no reportable action taken.

Special Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES - July 14, 2026 Successor Agency to the Redevelopment Agency - 154 - 2:30 p.m.

• Item 3 – Direction was given, no reportable action taken.

Adjournment: The Joint Special Meeting of the El Cajon City Council/El Cajon Housing Authority/Successor Agency to the El Cajon Redevelopment Agency held this 14th day of July, 2026 was adjourned at 3:02 p.m.

__________________________
ANGELA L. CORTEZ, CMC
City Clerk/Secretary

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -155- 3:00 p.m.

PLEASE NOTE: THESE ARE DRAFT MINUTES UNTIL
ADOPTED BY THE CITY COUNCIL.

JOINT MEETING OF THE

EL CAJON CITY COUNCIL/HOUSING

AUTHORITY/SUCCESSOR AGENCY

TO THE EL CAJON

REDEVELOPMENT AGENCY

MINUTES

CITY OF EL CAJON

EL CAJON, CALIFORNIA

July 14, 2026

A Regular Joint Meeting of the El Cajon City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency, held Tuesday, July 14 , 2026, was called to order by Mayor/Chair Bill Wells at 3:02 p.m., in the Council Chambers, 200 Civic Center Way, El Cajon, California.

R O L L C A L L
Council/Agencymembers present: Goble, Kendrick, and Ortiz Council/Agencymembers absent: None
Deputy Mayor/Vice Chair present: Metschel
Mayor/Chair present: Wells
Other Officers present: Mitchell, City Manager/Executive Director DiMaggio, Assistant City Manager
Thorn, Deputy City Manager
Lyon, City Attorney/General Counsel
Cortez, City Clerk/Secretary

PLEDGE OF ALLEGIANCE TO THE FLAG led by Mayor Wells and MOMENT OF SILENCE.

1be Valley of Opportunity
~ ~ ~
e>o ~ \.ci
"Porate~

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -156- 3:00 p.m.

POSTINGS: The City Clerk posted Orders of Adjournment of the June 23 , 2026, meetings and the Agenda of the July 14, 2026, meetings in accordance with State Law and El Cajon City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency Policy.

PRESENTATIONS:

• Presentation by Amikas: Update on the Emergency Sleeping Cabins at Meridian Baptist Church

• Proclamation: Parks and Recreation Month

AGENDA CHANGES:

City Manager Mitchell recommended removing Closed Sessions , Item 28 – Closed Session - CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1) and Item 29 – Closed Session - CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1) , and shared those items were considered during the July 14, 2026 Special Joint Meeting at 2:30 p.m.

MOTION BY WELLS, SECOND BY ORTIZ, to REMOVE Closed
Sessions, Item 28 – Closed Session - CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1) and Item 29 – Closed Session - CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1) Report from the agenda.

MOTION CARRIED BY UNANIMOUS VOTE.

CONSENT ITEMS: (1 – 18)

MOTION BY WELLS, SECOND BY ORTIZ, to APPROVE Consent Items 1 to 18.

MOTION CARRIED BY UNANIMOUS VOTE.

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -157- 3:00 p.m.

1. Minutes of El Cajon City Council/ Housing Authority/Successor Agency to the El Cajon Redevelopment Agency Meetings

Approve Minutes of the June 23, 2026, Meetings of the El Cajon City Council/ Housing Authority/Successor Agency to the El Cajon Redevelopment Agency.

2. Warrants

Approve payment of Warrants as submitted by the Finance Department.

3. Approval of Reading Ordinances by Title Only

Approve the reading by title and waive s the reading in full of all Ordinances on the Agenda.

4. Monthly Treasurer’s Report for the period ended May 31, 2026

Receive the Monthly Treasurer’s Report for the period ended May 31, 2026.

5. Acceptance of 2026 Local Agency Biennial Notice and Approval of Resolution Amending the City's Conflict of Interest Code

Adopt Resolution No. 066-26, approving changes to the designated employee and official positions required to be filed under the City’s Conflict of Interest Code.

6. Approval of Resolution Acknowledging Receipt of a Report On Annual Inspections of State-Mandated Occupancies

Adopt Resolution No. 067-26, acknowledging receipt of the Fire Chief’s annual report on state-mandated inspections.

7. Adoption of Ordinance to Renew and Approve Policy 706 "Military Equipment Use Policy" and Approve Annual Military Equipment Reports

Adopt Ordinance No. 5178, to renew and approve Policy 706 and the annual reports.

8. FY26 Coverdell Forensic Science Improvement Grant Award

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -158- 3:00 p.m.

Authorize the City Manager or his designee to accept, appropriate, and expend the FY26 Paul Coverdell Forensic Science Improvement Grant (CVRDLL26) in the amount of $51,391, and execute any grant documents and agreements necessary for the receipt and use of these funds.

9. Approval of Resolution Authorizing Modification of Previously Approved Vehicle Replacement Schedule

Adopt Resolution No. 068-26, authorizing the modification of the previously approved vehicle replacement schedule.

10. Acceptance of the Neighborhood Street Lights 2023 Project (233784PWCP), Bid No. 030-24

Accept the Neighborhood Street Lights 2023 Project (233784PWCP), Bid No. 030-24, as completed by T&M Electric, Inc., DBA Perry Electric; and Authorizes the City Clerk to record a Notice of Completion and release all bonds in accordance with the contract terms.

11. Re-appointment to the Mission Trails Regional Park Citizens' Advisory Committee

Re-appoint Scott Penwell to the Mission Trails Regional Park Citizens' Advisory Committee for a four-year term to expire on 01/31/2030.

12. Approval of El Cajon Professional Firefighters Local 4603 Side Letter adding Firefighter Trainee

Approve and authorize the terms and conditions of the Side Letter Agreement between the City and the El Cajon Professional Firefighters Local 4603 (ECPFF) adding the Firefighter Trainee classification.

13. Approval of the Citywide Compensation Plan Effective June 20, 2026

Adopt Resolution No. 069-26, approving the revisions to the Citywide Compensation Plan, effective June 20, 2026.

14. Approval of CalPERS Contract Amendment Side Letter for Police Officer's Association Management Group

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -159- 3:00 p.m.

Approve and authorize the terms and conditions of the CalPERS Limited Side Letter Agreement between the City and the Police Officers' Association Management Group.

15. Approval of CalPERS Contract Amendment Side Letter for Police Officers' Association

Approve and authorize the terms and conditions of the CalPERS Limited Side Letter Agreement between the City and the Police Officers' Association.

16. Approval of Resolution Authorizing Contract Amendment for RFP No. 010 -26 – Comprehensive Land Use Planning Services

Adopt Resolution No. 070-26, to increase compensation for the Agreement for Professional Services with Kimley -Horn and Associates, Inc. (KHAI) for the Comprehensive Land Use Planning Services in the not -to-exceed amount of $210,409 through February 3, 2028.

17. Classification Specification Updates and Salary Setting for the Park Maintenance Division

Approve and authorize the proposed new classification specifications and salary setting for Park Maintenance Worker I, Park Maintenance Worker II, and Park Maintenance Supervisor; and approves and authorizes the classification specification updates for Park Maintenance Worker III.

18. California Foundation for Parks & Recreation (CFPR) 2026 Community Swim Lesson Grant Award

Accept, appropriate, and expend a grant of $1,500 from the California Foundation for Parks & Recreation (CFPR) 2026 Community Swim Lesson Grant (SWIMLSSN26).

PUBLIC COMMENT:

Retired Captain Jeff Lashmet requested to meet with the Personnel Commission in regards to his disability claim.

Brenda Hammond spoke about the Music on Main concerts.

Gary Giardina raised concerns about homeless individuals being left at the Transit Center by the Sheriff’s Department.

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -160- 3:00 p.m.

Rich Riel requested an FBI investigation of the Property Based -Improvement District (PBID).

In response to a question from Mayor Wells, City Manager Mitchell confirmed that the City has no authority over the PBID.

Ray Justus thanked the City their help and requested a section of curb to be painted red near the intersection of Chase Avenue and South Lincoln Avenue.

Dr. Ryan Fan, representing the Madjal Community Center, requested the City Council to agendize a Resolution for improved representation of Middle Eastern and North African communities in official data.

Zamzam Fadhil, representing the Madjal Community Center, spoke in support of better representation of Middle Eastern and North African communities in official data.

WRITTEN COMMUNICATIONS: None

PUBLIC HEARINGS:

19. Public Hearing to Consider Adoption of the City of El Cajon Annual Sewer Charges Report for Fiscal Year 2026-2027

RECOMMENDATION:

That the City Council:

1. Opens the Public Hearing and receives testimony;

2. Closes the Public Hearing;

3. Determines if a majority protest has been received; and (if not)

4. Adopts the next Resolution, in order, to:
• Determine the lack of majority protest;
• Overrule objections to the report;
• Accept the City of El Cajon Annual Sewer Charges Fiscal Year 2026 -2027 Report;
• Accept Appendix B and any reductions identified by Appendix C, which identify by parcel number, each parcel of real property receiving sewer services, and the amount of sewer charges for each parcel for Fiscal Year 2026-2027 at the currently adopted rates, as required by the California Health and Safety Code section 5473, et seq., pertaining to collection of sewer charges on the tax roll;
• Direct the City Clerk to file the reports with the San Diego County Auditor; and • Direct the Finance Department to file a certification of the sewer service charges with the San Diego County Auditor.

DISCUSSION

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -161- 3:00 p.m.

Associate Engineer, Blake Behringer, provided a summary of the Item.

Mayor Wells opened the Public Hearing.

Claude Bell inquired if owning a pool is taken into consideration when sewer billing is calculated.

Sasha Oemick spoke a bout the sewer lateral policy , and asked Council to consider alternative sewer lateral policies.

Mayor Wells stated that he would be supportive of placing an item on a future agenda to discuss the sewer lateral policy.

MOTION BY WELLS, SECOND BY KENDRICK, to CLOSE the Public Hearing.

MOTION CARRIED BY UNANIMOUS VOTE.

City Attorney Lyon confirmed for the record that no majority protest has been received.

Discussion ensued amongst City Council and Staff concerning the following:
• Rates have not been increased in two years;
• Wastewater project;
• Selling wastewater back to the water district;
• Future rates; and
• Required cuts to water usage.

MOTION BY ORTIZ, SECOND BY METSCHEL, to ADOPT Resolution No. 071-26, to Determine the lack of majority protest; Overrule objections to the report; Accept the City of El Cajon Annual Sewer Charges Fiscal Year 2026-2027 Report; Accept Appendix B and any reductions identified by Appendix C, which identify by parcel number, each parcel of real property receiving sewer services, and the amount of sewer charges for each parcel for Fiscal Year 2026 -2027 at the currently adopted rates, as required by the California Health and Safety Code section 5473, et seq., pertaining to collection of sewer charges on the tax roll; Direct the City Clerk to file the reports with the San Diego County Auditor; and Direct the Finance Department to file a certification of the sewer service charges with the San Diego County Auditor.

MOTION CARRIED BY UNANIMOUS VOTE.

ADMINISTRATIVE REPORTS:

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -162- 3:00 p.m.

20. Consideration to Introduce Ordinance Amending Section 2.16.020 of the El Cajon Municipal Code Related to Salaries of City of El Cajon Councilmembers and Mayor

RECOMMENDATION:

That the City Council considers introducing an Ordinance amending Section 2.16.020 of the El Cajon Municipal Code (ECMC) related to salaries of Councilmembers and Mayor, and directs the City Clerk to read the title of the Ordinance.

DISCUSSION

City Manager Mitchell provided detailed information of the Item.

No public comment was received for the Item.

Discussion ensued amongst City Council and Staff concerning the following:
• Recent budget cuts;
• Showing support for the community; and
• Consequences of not approving raises.

MOTION BY WELLS, SECOND BY KENDRICK, to DECLINE the salary rate increase for Councilmemebers and Mayor.

MOTION CARRIED BY UNANIMOUS VOTE.

21. Encampment Resolution Funding (ERF) Grant Opportunity

RECOMMENDATION:

That the City Council receives and discusses the policy implications of the Encampment Resolution Funding (ERF) grant and provides direction to staff regarding a pending grant application.

DISCUSSION

Housing Manager, Jose Dorado, provided detailed information of the Item.

Chuck Kaye, City Council Candidate for District 1 for the 2026 Election, spoke in support of a further analysis of the program.

Discussion ensued amongst City Council and Staff concerning the following:
• City-wide program requirements;
• Impacts to homeless services providers;
• Housing first model;
• Existing services;
• Cost of storage and inventory of belongings;
• Noticing requirements;

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -163- 3:00 p.m.

• Use of general funds;
• Restoration of targeted encampment sites;
• Termination clause;
• Reductions to the homeless population;
• Response times for encampment cleanups; and
• Individuals have to agree to join the programs.

MOTION BY KENDRICK to DIRECT staff to perform an analysis of the grant and return with additional information.

No second was received for the motion.

Councilmember Goble proposed a substitute Motion:

MOTION BY GOBLE, SECOND BY METSCHEL, to DIRECT staff to withdraw the grant application.

MOTION CARRIED BY 4 - 1 VOTE
(KENDRICK – No).

Councilmember Goble left the Chamber at 5:08 p.m.

Councilmember Goble returned to the Chamber at 5:10 p.m.

22. Approval of Resolutions to Award Bid No. 004 -27 – Restoration of Open Space, Parks, and Wildfire-Prone Areas and Approve Plans & Specifications

RECOMMENDATION:

That the City Council adopts the next Resolution, in order, to:

1. Approve Plans and Specifications for Restoration of Open Space, Parks, and Wildfire-Prone Areas, Bid No. 004-27;

2. Find the apparent second and third low bidders non -responsive for the reasons set forth in the agenda report; and

3. Award the bid to the lowest responsive, responsible bidder, Neema General Contracting (NGC), in the amount of $461,737.

DISCUSSION

Assistant Engineer, Andrew Villalobos, provided detailed information of the Item.

Sherry Ashbaugh spoke about the homeless at Hillside Park and the need for long term vegetation maintenance.

Discussion ensued amongst City Council and Staff concerning the following:
• Neema General Contracting’s qualifications;

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -164- 3:00 p.m.

• Vegetation treatment;
• Biologist present on site;
• Brush fire concerns; and
• Access for fire engines.

MOTION BY ORTIZ, SECOND BY KENDRCK, to Approve Plans and Specifications for Restoration of Open Space, Parks, and Wildfire -Prone Areas, Bid No. 004-27; 2. Find the apparent second and third low bidders non-responsive for the reasons set forth in the agenda report; and 3. Award the bid to the lowest responsive, responsible bidder, Neema General Contracting (NGC), in the amount of $461,737.

MOTION CARRIED BY UNANIMOUS VOTE.

COMMISSION REPORTS: None

ACTIVITIES REPORTS/COMMENTS OF MAYOR WELLS:

SANDAG (San Diego Association of Governments) Board of Directors

23. Council Activities Report/Comments

Report as submitted.

ACTIVITIES REPORTS OF COUNCILMEMBERS:

24. COUNCILMEMBER STEVE GOBLE
MTS (Metropolitan Transit System Board); East County Advanced Water Purification Joint Powers Authority Board; Chamber of Commerce – Government Affairs Committee; SANDAG – Board of Directors – Alternate.

Council Activities Report/Comments.

In addition to the submitted report, Councilmember Goble added a fare increase will be voted on by the SANDAG Transportation Committee on Friday, July 17, 2026, and if approved, the new fare would take affect on October 1, 2026. Mr. Goble also stated that MTS voted to enact a fare freeze for approximately sixty percent of its riders.

25. COUNCILMEMBER GARY KENDRICK
METRO Commission/Wastewater JPA; Heartland Communications; Heartland Fire Training JPA.

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -165- 3:00 p.m.

Council Activities Report/Comments.

Report as submitted.

26. DEPUTY MAYOR MICHELLE METSCHEL
Harry Griffen Park Joint Steering Committee; Heartland Communications – Alternate; Heartland Fire Training JPA – Alternate; METRO Commission/Wastewater JPA – Alternate.

Council Activities Report/Comments.

In addition to the submitted report, Councilmember Ortiz added that the widening of the Bradley Avenue bridge is scheduled to begin in the Spring of 2027.

27. COUNCILMEMBER PHIL ORTIZ
League of California Cities, San Diego Division; East County Economic Development Council; MTS (Metropolitan Transit System Board) – Alternate; East County Advanced Water Purification Joint Powers Authority Board – Alternate; Chamber of Commerce – Government Affairs Committee – Alternate; SANDAG Board of Directors – Alternate.

Council Activities Report/Comments.

Report as submitted.

JOINT COUNCILMEMBER REPORTS: None

GENERAL INFORMATION ITEMS FOR DISCUSSION: None

ORDINANCES: FIRST READING - None

ORDINANCES: SECOND READING AND ADOPTION - None

Items 24 and 25 were removed from the agenda during Agenda Changes, as those items were considered during the July 14, 2026 Special Joint Meeting at 2:30 p.m.

CLOSED SESSIONS:

Joint Meeting: El Cajon City Council/Housing Authority/ DRAFT MINUTES – July 14, 2026 Successor Agency to the Redevelopment Agency -166- 3:00 p.m.

RECOMMENDATION: That the City Council/Housing Authority/Successor Agency to the El Cajon Redevelopment Agency adjourns to Closed Session as follows:

24. Closed Session - CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1)

25. Closed Session - CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2) (1 case) Existing facts and circumstances pursuant to Government Code section 54956.9 (e)(1)

Adjournment: Mayor Wells adjourned the Regular Joint Meeting of the El Cajon City Council/ Housing Authority/Successor Agency to the El Cajon Redevelopment Agency held this 14th day of July, 2026, at 5:26 p.m., to Tuesday, July 28, 2026, at 3:00 p.m.

________________________
ANGELA L. CORTEZ, CMC
City Clerk/Secretary

City Council
Agenda Report
Agenda Item 4.

DATE: 07/28/2026
TO: Honorable Mayor and City Councilmembers
FROM: Yazmin Arellano, Director of Development Services SUBJECT: Approval of Resolution to Approve the Revised Second Amended and Restated Regional Wastewater Disposal Agreement (SARA)
RECOMMENDATION:

That the City Council adopts the next Resolution, in order, to:

Approve the Second Amended and Restated Wastewater Disposal Agreement (SARA), as revised, dated June 12, 2026; and

1. Authorize the Mayor to sign the revised SARA in substantially the form attached to the agenda packet, to allow for potential minor corrections to the document.

2. BACKGROUND:

The City of El Cajon is one of twelve participating agencies in the regional Metropolitan Sewerage System (Metro System), which is owned and operated by the City of San Diego and provides wastewater conveyance, treatment, and disposal services to the participating agencies. While the City of El Cajon owns and maintains its local sewer collection system, it does not own wastewater treatment facilities and relies on the Metro System to treat and dispose of wastewater generated by its residents and businesses.

The relationship between the City of San Diego and participating agencies is governed by the Regional Wastewater Disposal Agreement, which establishes each agency's treatment capacity rights, cost-sharing structure, and roles in regional system planning and oversight. In 2000, the participating agencies formed the Metro Wastewater Joint Powers Authority (Metro JPA) to represent their collective interests. The City of El Cajon actively participates in the Metro JPA and maintains representation on its governing board.

In 2021, the Regional Wastewater Disposal Agreement was amended to address evolving regulatory, operational, and infrastructure needs, including coordination with major regional water reuse initiatives such as the City of San Diego Pure Water Program. However, several policy, governance, and cost allocation items were deferred for future resolution. Over the past four years, the City of San Diego and participating agencies, through the Metro JPA, have completed negotiations to resolve those remaining issues and developed the Second Amended and Restated Regional Wastewater Disposal Agreement (SARA), which establishes an updated framework for regional wastewater service, cost allocation, and long-term system coordination.

The SARA also establishes a process for implementing certain administrative and programmatic matters through separate administrative agreements, allowing participating agencies to efficiently address operational changes without reopening the primary agreement.

Administrative Agreement No. 1 addresses the administration of the regional industrial wastewater pretreatment program. It identifies roles and responsibilities and authorizes the City of San Diego to directly bill industrial users that discharge non-domestic wastewater to the public sewer system for applicable permitting and inspection costs. This change improves administrative efficiency and reduces the City of El Cajon's role in managing and recovering those costs.

Additionally, the City of El Cajon (City) is a partner in the East County Advanced Water Purification Program (ECAWP), an East County regional project that will divert a significant portion of the City's wastewater flows for advanced treatment and beneficial reuse beginning in 2027. While this project will reduce the volume of wastewater conveyed to the Metro System, the City will continue to rely on the Metro System for portions of its service area, peak wet-weather flows, and overall system reliability. Maintaining an updated agreement governing regional wastewater treatment services remains essential to ensure continued operational flexibility, treatment capacity, and regional coordination.

Second Amended and Restated Regional Wastewater Disposal Agreement (SARA), revised June 12, 2026
The El Cajon City Council approved a previous draft of the SARA, as well as Administrative Agreement No. 1, on February 24, 2026. Since then, Padre Dam Municipal Water District (Padre Dam) requested several revisions to the SARA. The Padre Dam Board approved a revised version of the agreement on June 17, 2026. This revised version, dated June 12, 2026, was updated over the past several months through a collaborative effort among representatives from the Metro JPA Executive Team, the City of San Diego, and Padre Dam to address the concerns. The Metro JPA unanimously approved the revised SARA at an emergency meeting on June 25, 2026.

Key Revisions
Higher Approval Threshold for Future Billing Changes
Previous Draft: Two-thirds (2/3) approval.

Revised Draft: Three-fourths (3/4) approval.

Benefit: Future changes to the Functional Allocated Billing (FAB) methodology will require broader regional consensus and additional agency support.

1. Addition of a FAB Example
An illustrative example of the FAB methodology has been added to the agreement.

Benefit: Provides additional transparency and helps agencies better understand how the methodology is applied.

2. July 1, 2026, Implementation Date
The revised agreement establishes an effective date of July 1, 2026.

Benefit: Allows implementation to begin in FY 2027 rather than delaying implementation to a future fiscal year.

3. No Other Substantive Changes
Aside from the revisions described above, the following provisions remain unchanged from the version previously approved by the City Council:

The FAB methodology.

Cost allocations.

Financial obligations.
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The overall structure of SARA.

The rights and responsibilities of the participating agencies, except as described above.

Recommendation for Approval of the Revised SARA:

Resolves the final outstanding issues identified during the approval process.

Has been approved unanimously by all participating agencies and the City of San Diego.

Allows implementation to begin July 1, 2026.

Continues the regional partnership framework that governs the Metro wastewater system.

CALIFORNIA ENVIRONMENTAL QUALITY ACT:

The proposed actions are exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15378(b)(5) of the State CEQA Guidelines, as the approval of these agreements constitutes an administrative activity that will not result in a direct or reasonably foreseeable indirect physical change in the environment.

FISCAL IMPACT:

The agreement provides for the continued use of the Metropolitan Sewage System for wastewater conveyance, treatment, and disposal. In Fiscal Year 2025, the City's cost for Metro System services was approximately $14.5 million, based on billing information provided by the City of San Diego.

With the implementation of the East County Advanced Water Purification (ECAWP), the majority of the City's wastewater flows will be diverted for advanced treatment and reuse, which is expected to reduce the City's overall reliance on the Metro System. However, the City will continue to use the regional system in certain service areas, for peak wet-weather flows, and to maintain operational reliability. Future costs will reflect these changes in flow volumes and the updated billing methodology established under the agreement.

The updated FAB billing methodology established under SARA is expected to improve cost allocation accuracy and provide greater long-term financial predictability. Sufficient funding for these services is included in the City's Wastewater Enterprise Fund and will continue to be incorporated into future budget planning.

Prepared By: Blake Behringer, Associate Engineer
Reviewed By: Yazmin Arellano, Director of Development Services Approved By: Graham Mitchell, City Manager
Attachments
Resolution
Revised SARA_061226
Revised SARA Redline
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Page 1 of 2 ends

RESOLUTION NO. ___-26

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EL CAJON, CALIFORNIA

APPROVING THE REVISED SECOND AMENDED AND RESTATED

REGIONAL WASTEWATER DISPOSAL AGREEMENT

BETWEEN THE CITY OF SAN DIEGO AND PARTICIPATING AGENCIES

IN THE METROPOLITAN SEWERAGE SYSTEM

AND AUTHORIZING THE MAYOR TO SIGN THE AGREEMENT

WHEREAS, the 1998 Regional Wastewater Disposal Agreement between the City of San Diego and the participating agencies (the "Agreement") previously set planning, capacity rights and cost allocations of wastewater facilities in the r egional Metropolitan Sewerage System which the City of San Diego owns, operates and maintains for the purpose of treating and disposing of sewage for San Diego and certain other municipalities and districts including participating agencies like the City of El Cajon (the "City") within the San Diego region; and

WHEREAS, effective on or around August 22, 2021, the City of San Diego and the participating agencies, including the City, amended the 1998 Agreement by executing an Amended and Restated Regional Wastewater Disposal Agreement (the "ARA") which addressed amendments to the Agreement related to the Pure Water Program and allocation of costs and financial protection of wastewater rate payers; and

WHEREAS, further necessary modifications to the ARA precipitated the Second Amended and Restated Wastewater Disposal Agreement (the "SARA") which clarifies and expands items relat ing to the wastewater billing methodology, agency roles and responsibilities, and cost-sharing approaches for Phase 1 and Phase 2 of the Pure Water Program; and

WHEREAS, the S ARA was considered and approved by the Metropolitan Wastewater Joint Powers Authority /Metropolitan Commission (the "Metro JPA") on October 2, 2025, with a vote of 11-1, and was unanimously approved by the El Cajon City Council (the "City Council") on February 24, 2026; and

WHEREAS, since the City Council’s approval of the SARA, the Padre Dam Municipal Water District ("Padre Dam") requested several revisions, and on June 17, 2026, a revised version of the SARA (the "Revised SARA") was unanimously approved by the Padre Dam Board; and

WHEREAS, the Metro JPA unanimously approved the R evised SARA at an emergency meeting on June 25, 2026; and

WHEREAS, the Revised SARA establishes an effective date of implementation of July 1, 2026.

Page 2 of 2 ends

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EL CAJON AS FOLLOWS:

1. The above recitals are true and correct, and are the findings of the City Council.

2. The City Council hereby approves the Revised Second Amended and Restated Regional Wastewater Disposal Agreement (dated June 12, 2026) and authorizes the Mayor to sign the Revised Second Amended and Restated Regional Wastewater Disposal Agreement.

3. If the Revised Second Amended and Restated Regional Wastewater Disposal Agreement is modified and the modifications are non- substantive or administrative agreements with non-substantive impacts to the City of El Cajon, then the Mayor is authorized to sign such modified agreement.

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SECOND AMENDED AND RESTATED

REGIONAL WASTEWATER DISPOSAL AGREEMENT

BETWEEN

THE CITY OF SAN DIEGO
AND

THE PARTICIPATING AGENCIES
IN

THE METROPOLITAN SEWERAGE SYSTEM

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TABLE OF CONTENTS
Page

1. DEFINITIONS ................................................................................................................ .... 3

2. OWNERSHIP AND OPERATION OF THE METRO SYSTEM ...................................... 9

2.1 Rights of the Parties ................................................................................................ 9

2.2 Metro System Services ........................................................................................... 9

2.3 Flow Commitment ................................................................................................ 10

2.4 Funding Obligations.............................................................................................. 10

2.5 Limitations on Types and C ondition of Wastewater ............................................. 11

2.6 Enforcement Actions ............................................................................................. 12

2.7 Right of First Refusal ............................................................................................ 13

2.8 Uniform Enforcement of Pret reatment Program by City ...................................... 14

2.9 Wastewater Generated at Military Bases .............................................................. 16

3. CAPACITY RIGHTS ........................................................................................................ 16

3.1 Contract Capacity.................................................................................................. 16

3.2 Inter-Agency Transfers of Contract Capacity ....................................................... 17

3.3 New Contract Capacity ......................................................................................... 18

3.4 Reductions in Metro System Capacity .................................................................. 18

3.5 Restrictions on Veto of Transfer s and Acquisitions of Capacity ........................... 18

3.6 Amendments to Exhibits B ................................................................................... 18

3.7 The South Bay Ocean Outfall ............................................................................... 19

4. FINANCE, BUDGETING, AND ACCOUN TING: PAYMENT AND MONITORING PROVISIONS ................................................................................................................... 19

4.1 Payment for Metro System Facilities .................................................................... 19

4.2 Payment for Additional Me tro System Facilities .................................................. 19

4.3 Payment for Operation and Maintenance ............................................................. 19

4.4 Charges Based on Flow, Strength and Fixed Capacity: Exception ....................... 20

4.5 Monitoring Flow and Strength .............................................................................. 21

5. FINANCE, BUDGETING, AND ACCOUN TING: SYSTEM OF CHARGES............... 22

5.1 Charges Authorized ............................................................................................... 22

5.2 Functional Allocated Billing (FAB) ...................................................................... 22

5.3 Metro System Costs .............................................................................................. 23

5.4 Excluded Costs...................................................................................................... 23

5.5 Metro System Revenues and Allocations ............................................................. 24

5.6 Excluded Revenue ................................................................................................ 24

5.7 Estimate and Billing Schedule and Year End Adjustment .................................... 24

5.8 Financial Statements ............................................................................................. 25

5.9 Debt Financing ...................................................................................................... 26

5.10 Allocation of Operating Reserves and Debt Service Coverage ............................ 26

5.11 Amending the System of Charges ......................................................................... 26

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6. FINANCE, BUDGETING, AND ACCOUNTI NG: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 1 .............................................................. 26

6.1 North City Water Reclamat ion Plant Modification ............................................... 26

6.2 New, Expanded or Modified Metro System Facilities .......................................... 26

6.3 Costs Excluded from Metro System Costs – Phase 1 ........................................... 27

6.4 North City Water Reclamation Plant Improvement Costs Included as Metro System Costs ......................................................................................................... 27

6.5 Reallocation of PWP Costs incurred since FY 2014 ............................................ 28

6.6 Revenue Sharing for Repurified Water ................................................................. 29

6.7 Capital Expense Rate ............................................................................................ 30

6.8 Amending Pure Water Program Cost Allocation and Revenues – Phase 1 .......... 33

7. FINANCE, BUDGETING, AND ACCOUNTI NG: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 2 .............................................................. 33

7.1 Pure Water Program – Phase 2 .............................................................................. 33

7.2 Costs Excluded As Metro System Costs ............................................................... 33

7.3 Revenue Sharing for Repurified Water – Phase 2 ................................................. 34

7.4 Capital Expense Rate – Phase 2 ............................................................................ 34

8. FUTURE NEGOTIATIONS AND COOPERATION ....................................................... 34

9. THE METRO COMMISSION ......................................................................................... 34

9.2 Advisory Responsibilities of Metro JPA ............................................................... 35

9.3 Delegation of Decision-Making Authority of the Metro JPA ............................... 35

9.4 Standing ................................................................................................................ 3 5

10. DISPUTE RESOLUTION ................................................................................................ 35

10.1 Mandatory Non-Binding Mediation ..................................................................... 36

10.2 Selection of Mediator ............................................................................................ 36

10.3 Mediation Expenses .............................................................................................. 36

10.4 Conduct of Mediation ........................................................................................... 36

10.5 Mediation Results ................................................................................................. 36

10.6 Performance Required During Dispute ................................................................. 36

11. INSURANCE ................................................................................................................. ... 36

11.1 City Shall Maintain All Required Insurance ......................................................... 36

11.2 Substantially Equivalent Coverage ....................................................................... 37

12. INTERRUPTION OF SERVICE ...................................................................................... 37

13. NOTICES REQUIRED UNDER AGREEMENT ............................................................ 37

14. EFFECTIVE DATE AND EXPIRATION ........................................................................ 37

14.1 Effective Date ....................................................................................................... 37

14.2 Expiration .............................................................................................................. 38

14.3 Contract Capacity Rights Survive Expiration ....................................................... 38

14.4 Abandonment ........................................................................................................ 38

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15. ADMINISTRATIVE AGREEMENTS ............................................................................. 38

15.1 Use and Process for Admin istrative Agreements .................................................. 38

16. GENERAL ................................................................................................................... ..... 40

16.1 Exhibits ................................................................................................................. 40

16.2 Electronic Exhibits and Attachments .................................................................... 40

16.3 Amendments to Agreement ................................................................................... 41

16.4 Construction of Agreement ................................................................................... 43

16.5 Declarations Re: Agreement ................................................................................. 44

16.6 Right to Make Other Agreements ......................................................................... 45

16.7 Statute of Limitations to Resolve Billing Issues ................................................... 45

16.8 Counterparts and Electronic Signatures ................................................................ 45

16.9 Transparency ......................................................................................................... 46

16.10 Incorporation of Recitals ....................................................................................... 46

16.11 Joint Exercise of Power ........................................................................................ 46

ACRONYM LIST:

ARA Amended and Restated Re
gional Wastewater Disposal Agreement
COD Chemical Oxygen Demand
CIP Capital Improvement Project(s)
CPM Construction Project Management
CWA San Diego County Water Authority
ECAWP JPA East County Advanced Water Purification Joint Powers Authority FAB Functional Allocated Billing
MBC Metropolitan Biosolids Center
MGD Millions of Gallons per Day
NCWRP North City Water Reclamation Plant
NPDES National Pollutant Discharge Elimination System
PLWTP Point Loma Wastewater Treatment Plant
PWP Pure Water Program
RSDP Reject Stream from Demineralization Process
SBOO South Bay Ocean Outfall
SBWRP South Bay Water Reclamation Plant
TSS Total Suspended Solids

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SECOND AMENDED AND RESTATED REGIONAL WASTEWATER DISPOSAL

AGREEMENT

THIS SECOND AMENDED AND RESTATED REGIONAL WASTEWATER
DISPOSAL AGREEMENT (“Agreement”) is made and entered into this 1st day of July, 2026, by and between the CITY OF SAN DIEGO, a municipal corporation (the “City”), on the one hand; and the CITY OF CHULA VISTA, a municipa l corporation; the CI TY OF CORONADO, a municipal corporation; the CITY OF DEL MAR, a municipal co rporation; the CITY OF EL CAJON, a municipal corporation; the CITY OF IMPERIAL BEACH, a municipal corporation; the CITY OF LA MESA, a municipal corporation; the LEMON GROVE SANITATION DISTRICT, a political subdivision of the State of California; the CITY OF NATIONAL CITY , a municipal corporation; the CITY OF POWAY , a municipal corporation; the OTAY WATER DISTRICT, a political subdivision of th e State of California; the PADRE DAM MUNICIPAL WATER DISTRICT, a political subdivisi on of the State of California; and the SAN DIEGO COUNTY SANITATION DISTRICT, a political s ubdivision of the State of California (collectively, the “Participating Agencies”), on the other hand. The City and the Participating Agencies may be referred to herein individually as a “Party,” and collectively as the “Parties.”

RECITALS
WHEREAS, the City and the Participating Agen cies (or their predecessors in interest) entered into that certain Regional Wastewater Disposal Agreement dated May 18, 1998 (the “1998 Agreement”), which provided, among other things, for cer tain contract rights to capacity in the Metropolitan Sewerage System, a system of wastewater conveya nce, treatment, and disposal facilities (“Metro System”) and the establishment of a mech anism to fund the planning, design, construction, operation, and maintenance of the Me tro System by the City and the Participating Agencies; and
WHEREAS, the purposes of th e 1998 Agreement were: (1) to replace the prior-existing sewage disposal agreements between the City and the Participating Agencies; (2) to provide certain contract rights to capacity in the Metro System to the Participating Agencies; (3) to establish a mechanism to fund the planning, design, construction, operation and maintenance of the Metro System by the City and the Participat ing Agencies as necessary to provide hydraulic capacity, and to comply with applicable law an d with generally accepte d engineering practices; and (4) to establish a system of charges which allocates the costs of th e planning, design and construction of such new wastewater conveyance, treatment and disposal facilities as are necessary solely to provide for new capacity on a fair and equitable basis; and WHEREAS, on April 29, 2014 the San Diego City Council gave its approval and support for the Pure Water San Diego program by adoption of Resolution No. R-308906, which approved and supported the City’s efforts to develop an implementation strategy to offload wastewater flow from the Point Loma Wastewater Treatment Plan t through implementati on of potable reuse, resulting in effluent discharged to the Pacific Ocean being equivalent to what would be achieved by upgrading the Point Loma Wastewater Treatme nt Plant to a seconda ry treatment plant (secondary equivalency); and

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WHEREAS, the City is implementing a phase d, multi-year program designed to achieve compliance with the Clean Water Act and regionally produce up to 83 million gallons per day of safe, reliable potable water using new, expanded, or modified facilities, some of which will include Metro System facilities, in order to achieve secondary equivalency at the Point Loma Wastewater Treatment Plant; and
WHEREAS, the Pure Water Program will not only benefit the City by producing repurified water, but also the Participating Agencies and their wastewater customers, especially if secondary equivalency is recognized through federal legislation amending the Clean Water Act. Specifically, implementation of the Pure Water Program will re duce wastewater discharges to the Point Loma Wastewater Treatment Plant, part of the Metro System where a large portion of the Participating Agencies’ wastewater is currently treated and disposed by discharging it in to the Pacific Ocean.

By diverting wastewater from the Point Loma Wastewater Treatment Plant and reducing the effluent discharged into the Pacific Ocean, the City and the Participating Agencies will potentially avoid billions of dollars in unnecessary capital, financing, energy, and operating costs to upgrade the Point Loma plant to secondary treatment at full capacity. Avoiding such costs would result in significant savings for regional wastewater cust omers and achieve envir onmental benefits by reducing ocean discharge; and
WHEREAS, on or around November 2019, the East County Advanced Water Purification Joint Powers Authority (the “ECAWP JPA”) was created to implement a potable reuse program to improve local and regional water supply reliabili ty to supply advanced treated recycled water to East San Diego County through the East C ounty Advanced Water Purification Project (the “ECAWP Project”). The ECAWP Project is planned to capture and treat approximately 15 million gallons per day of wastewater that would otherwise be disposed of in the Metro System to produce an annual average supply of ap proximately 11.5 milli on gallons per day of new local drinking water. By diverting some wastewater and wast ewater content away from the Metro System, the ECAWP Project has the ability to aid and contri bute towards the City and region’s efforts to produce a regional annual average of up to 83 million gallons per day of water suitable for potable reuse by December 31, 2035, as described in the Cooperative Agreement in Support of Pure Water San Diego executed by the City and certain en vironmental stakeholders on December 9, 2014.

The ECAWP Project includes a residuals bypass system that will convey RSDP (as defined herein) from the advanced water purification facility, and Centrate from the solids dewatering process of the solids handling facility, to an existing regional sewage gravity pipeline owned and operated by the City for treatment and disposal; and
WHEREAS, effective on or around Augus t 22, 2021, the City and the Participating Agencies amended the 1998 Agreement by execu ting an Amended and Restated Regional Wastewater Disposal Agreement (the “ARA”) to address the costs a nd revenues associated with Phase 1 of the Pure Water Program, including specific cost allocations related to the construction, expansion, and/or modification of Metro System facilities a nd Water Repurification System facilities designed to produce up to 30 million gallons per day of Repurified Water (“ Phase 1”).

The ARA provided that within one year of its effective date, the Parties intended to meet and negotiate in good faith regarding one or more amendments to the ARA or to its Exhibits to address multiple outstanding items described in Section 2.9 of the ARA; and

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WHEREAS, Section 14.2 of the ARA provided that the Parties may amend the ARA by a written agreement between the City and all Particip ating Agencies stating the Parties’ intent to amend or supplement the agreement; and
WHEREAS, in an effort to address in good faith the outstanding items described in Section 2.9 of the ARA, and comprehensively a nd equitably address the costs, revenues, and billing system associated with the Pure Wate r Program and the relate d construction, expansion, and/or modification of Metro System facili ties beyond Phase 1, the City and Participating Agencies wish to amend and restate the ARA as provided herein.

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, the City and the Participating Agencies restate and amend the ARA and agree as follows:

1. DEFINITIONS

1.1 Administrative Agreement shall refer to a formal binding contract, approved under the process set forth in Section 15 of th is Agreement, which implements technical, administrative, operational, and/or procedural details of this Agreement.

1.2 Administrative Approval is an approval mechanism authorized by this Agreement that refers to a City administrative process by which the subject of a particular action is presented to the City’s Director of the Public Utilities Department or their designee for approval, based on discussion and evaluation according to sound e ngineering standards if applicable, and any additional requirements related to review for the action requi ring the City’s Administrative Approval as set forth in this Agreement.

1.3 Annual Average Daily Flow is the number, in millions of gallons of wastewater per day (“MGD”), calculated by dividing total Flow on a fiscal year basis by the number of days in the applicable year, which is a term used for billing purposes.

1.4 ARA shall mean the Amended and Restat ed Regional Wastewater Disposal Agreement between the City and the Participating Agencies effective August 22, 2021.

1.5 Capital Expense Rate shall mean the same as the term is defined in Section 6.7.2.

1.6 Capital Improvement Costs means all costs of the planning, design, financing, construction, and/or replacement necessary to rende r a capital project faci lity fully operational, including upgrades and reconstruction, consistent with the City’s policies and procedures. This includes costs for planning and environmental work; procurement of consultants or contractors to perform such work; construction management; i nvestigative studies and pre-design work; labor and materials; inspection and testing; and fi nancing cost including interest on financial instruments.

1.7 Centrate shall mean the liquid byproduct that results from the dewatering of digested solids as part of wastewater treatment processes.

1.8 Chemical Oxygen Demand or COD means the measure of the chemically decomposable material in wastewater, as determ ined by the procedures specified in the most

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current edition of “Standard Methods for the Ex amination for Water and Wastewater,” or any successor publication which establishes the industry standard.

1.9 City shall mean and refer to the City of San Diego.

1.10 City’s Water Utility shall mean any and all facil ities, properties, improvements and works at any time owned, controlled or operated by the City as part of the public utility system of the City for water purposes, for the development, obtaining, conservation, production, storage, treatment, transmission, furnishing and distri bution of water and its other commodities or byproducts for public and private use (whether located within or without the City), and any related or incidental operations designate d by the City as part of the Water System, including reclaimed and re-purified water.

1.11 City Water Utility PWP Costs are those Pure Water Program costs allocated to the City’s Water Utility and theref ore excluded as Metro System Co sts under Section 6.3 of this Agreement.

1.12 Contract Capacity is the contractual right possessed by each Participating Agency to discharge wastewater into the Metro System pursuant to this Agreement up to the limits set forth in Exhibit B, Distribution of Wastewater System Capacity Rights, attached hereto.

1.13 Contract Capacity Transfers shall refer to the capacity transfers initiated based on Metered Flow and Strength data using the methodology set forth in Exhibit E, Methodology for Contract Capacity Transfers, which change a Participating Ag ency’s Contract Capacity, as set forth more fully in Section 4.4.3.1 and 4.4.3.2. These changes will generally be made to a single Participating Agency’s annual Contract Capacity to correct capaci ty exceedances but can also be made to reduce a Participating Agency’s Contract Capacity.

1.14 CWA shall mean the San Diego County Water Authority.

1.15 ECAWP JPA shall mean the East County Ad vanced Water Purification Joint Powers Authority. The ECAWP JPA itself is not a Participating Agency or a Party to this Agreement.

1.16 ECAWP JPA Agencies shall mean collectively the City of El Cajon, the Padre Dam Municipal Water District, and the San Diego County Sanitation District.

1.17 ECAWP Project shall mean the ECAWP JPA’s project to capture and treat wastewater that would otherwise be disposed of in the Metro System to produce an annual average supply of approximately 11.5 MGD of new local drinking water, as well as other byproducts such as recycled water and energy recovery facilities.

1.18 Fixed Capacity shall mean the capacities fo r Monthly Average Daily Flow, Incremental Peak Flow, RSDP, COD and TSS for each agency as set forth in Exhibit B.

1.19 Fixed Capacity Charge shall mean the charges set forth in Exhibit B that are identified as “Fixed Capacity Charges” that represent the Parties’ proportional charges for

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maintaining the Metro System. Items such as debt service are also included in the Fixed Capacity Charges.

1.20 Flow shall refer to the flow of wastewater discharged by the City and/or one or more Participating Agency/ies into the Metro System.

1.21 Functional Allocated Billing or FAB shall mean the method for distributing all capital, operations, and maintenance Metro Syst em Costs and Revenues on an annual basis by grouping expenses according to their purposes and the current approved Functional-Design Methodology.

1.22 Functional-Design Methodology shall mean the process of allocating fixed and variable Operation and Maintena nce Costs and Capital Improveme nt Costs to Flow, RSDP and Strength parameters recognizing the benefits of both the design cr iteria and the primary function of a unit process.

1.23 Incremental Peak Flow shall mean the Peak Flow minus the Monthly Average Daily Flow.

1.24 Industrial Wastewater means all wastewater, excluding domestic wastewater, and shall include all wastewater from any produ cing, manufacturing, processing, institutional, commercial, service, agricultural, or other ope ration. These may also in clude wastes of human origin similar to domestic wastewater.

1.25 Industrial User means a discharger of Industrial Wastewater to a public sewer. A Participating Agency may be an Industrial User.

1.26 Joint Administrative Approval Process is an approval process authorized by this Agreement by which an Administrative Agreement may be created, revised, supplemented, replaced or terminated, subject to the review and approval process se t forth more fully in Section 15.

1.27 MBC Return shall mean and refer to Centrate created at the Metropolitan Biosolids Center, 5240 Convoy St, San Diego, CA 92111. MBC Retu rn shall contain Metered Flow, TSS and COD.

1.28 Metered Flow shall mean the amount or volume of wastewater captured by meters that exist throughout the Metro System, estimates from unit count areas, or agreed upon estimates of flows where unit counts are no t appropriate. When meters are out of service, estimates can be used to fill in data gaps. These meters, which may or may not be owned by the City, are further defined in Exhibit F, Metro System Flow Formulas and Sampling Locations , which may be amended from time to time.

1.29 Metro Commission or Metro JPA is the advisory body described under Section 9.

1.30 Metro System Costs shall mean, at a minimum, those costs set forth in Section 5.3 and as otherwise set forth in this Agreement.

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1.31 Metro System Revenues are those revenues set forth in Section 5.5.

1.32 Metropolitan Sewerage System or Metro System shall mean and consist of those facilities which are listed, s hown and/or described in Exhibit A, Metro Facilities (Electronic Exhibit); file name: [Enter]; time stamp of file , software used to open and view file including version; included herewith as CD-ROM/D VD-ROM, including any amendments thereto authorized by this Agreement. Exhibit A includes current constructed facilities and proposed future facilities.

1.33 Monthly Average Daily Flow is the number, in MGD, calculated by dividing total Flow on a monthly basis by the number of days in that month.

1.34 Municipal System shall mean the City’s wastewater collection system, consisting of pipelines and pump stations, which collects wastewater within the City of San Diego and conveys it to the Metropolitan Sewerage System for treatment and disposal.

1.35 New Contract Capacity shall mean capacity in exce ss of the Contract Capacity set forth in Exhibit B and authorized subject to Section 3.3.

1.36 North City Water Reclamation Plant or NCWRP is the wastewater treatment facility located at 4949 Eastgate Mall in San Diego, which includes four major processes: primary treatment, secondary treatment, tertiary treatment, and disinfection.

1.37 Operation and Maintenance Costs are the costs to operate, maintain, manage, repair, and keep the Metro System conveyance, disposal, treatment, and reuse facilities functioning in accordance with all applicable laws, rules, and regulations.

1.38 Participating Agencies shall mean all the local gove rnments and agencies that executed this Agreement other than the City.

1.39 Peak Flow represents the wastewater flow in millions of gallons of wastewater per day that is captured in the highest 1-hour period in a fiscal year.

1.40 Point Loma Wastewater Treatment Plant or PLWTP is the main City wastewater treatment plant with a Monthly Average Daily Flow capacity of 240 million gallons per day and a peak flow capacity of 432 million gallons per day (a s of the date of this Agreement). It is an advanced primary treatment plant which includes four major processes: screening, grit removal, chemically enhanced sedimentation, and digestion.

1.41 Pooled Capacity shall refer to the capacity in th e Metro system greater than that which has been designated in Exhibit B. Pool ed Capacity amounts are shown in Exhibit E, Methodology for Contract Capacity Transfers, and may be recalculated from time to time as set forth more fully in this Agreement.

1.42 Postage Stamp Methodology is a methodology that can allocate a single uniform cost to any of the annual Contract Capacity co st parameters identified in Exhibit B. This methodology assumes that even though a particular discharger may not utilize all of the infrastructure, all dischargers into the Metro System benefit from the shared infrastructure.

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1.43 Projected Future Strength and Flow Amounts are the five (5) values described below:

1.43.1 Projected Future Metro Flow is the estimated amount of Monthly Average Daily Flow, stated in millions of gallons per day (MGD), that the City and each Participating Agency are projected to have in a designated future year – currently, the 2050 fiscal year. Projected Future Metro Flow for each Party is stated in Exhibit B.

1.43.2 Projected Future Incremental Peak Flow is the estimated amount of Annual Incremental Peak Flow, stated in millions of gallons per day (MGD), that the City and each Participating Agency are projected to have in a designated future year – currently, the 2050 fiscal year. Projected Future Incremental Peak Metro Flow for each Party is stated in Exhibit B.

1.43.3 Projected Future RSDP Flow is the estimated amount of RSDP Flow, stated in millions of gallons pe r day (MGD), that the City and each Participating Agency are projected to have in a designate d future year – curre ntly, the 2050 fiscal y ear. Projected Future RSDP Flow for each Party is stated in Exhibit B.

1.43.4 Projected Future COD Flows is the estimated amount of Chemical Oxygen Demand (COD), stated in pounds per day, that the City and each Participating Agency are projected to have in a designate d fiscal year – curre ntly, the 2050 fiscal y ear. Projected Future COD Flows for each Party are stated in Exhibit B.

1.43.5 Projected Future TSS Flows is the estimated amount of Total Suspended Solids (TSS) stated in p ounds per day, that the City and each Participating Agency are projected to have in a designated fiscal year – currently , the 2050 fiscal year. Projected Future TSS Flows for each Party are stated in Exhibit B.

1.44 Pure Water Capital Melded Percentage is the proportionate share stated in Column 7 of Exhibit B (formerly Column 12 of Exhibit G of the ARA), by which Pure Water Program Capital Improvement Co sts, Repurified Water Revenue, and the Capital Expense Rate will be allocated among the City and the Participating Agencies. The Pure Water Capital Melded Percentage is based on each Party’s proportionate share of Projected Future Metro Flow, Projected Future TSS Flows, and Projected Future COD Flows, which proportions are weighted as described in Footnote 5 of Exhibit B.

1.45 Pure Water Program or PWP is the City’s phased, multi-year program designed to produce up to 83 million gallons per day of Repurified Water using new, expanded, or modified facilities, some of which will include Metro System facilities.

1.46 PWP Phase 1 or Phase 1 shall mean the first phase of the Pure Water Program, which modifies/constructs Metr o System and Water Repurifica tion System facilities and is designed to produce an annual average of 30 million gallons per day of Repurified Water.

1.47 PWP Phase 2 or Phase 2 shall mean the second phase of the Pure Water Program which modifies/constructs Metr o System and Water Repurifica tion System facilities and is designed to produce up to an additional annual average of 53 million gallons per day of Repurified Water.

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1.48 Recycled Water shall have the definition set fort h in Title 22, Division 4 of the California Code of Regulations and shall mean water which, as a result of treatment of wastewater, is suitable for a direct beneficial use or a controlled use that otherwise could not occur.

1.49 Reject Stream from Demineralization Process or RSDP is a flow reject stream and treatment byproduct from a demineralization process at a potable reuse facility that primarily contains liquid and salts.

1.50 Repurified Water shall mean water which, as a result of advanced treatment of Recycled Water, is suitable for use as a source of domestic (or potable) water supply.

1.51 Repurified Water Revenue is the cost savings that will be realized when the City’s Water Utility’s annual costs per-acre foot for Repurified Water, including City Water Utility PW Costs, are less than the purchase costs per-acre foot for comparable water from the San Diego County Water Authority, as further described in Section 6.

1.52 Residuals shall mean RSDP and Centrate. In the future, Residuals may include other waste byproducts if the Parties agree in writing that other byproducts may be discharged into the Metro System.

1.53 South Bay Ocean Outfall or SBOO is the facility that is jointly owned by the International Boundary & Water Commission (U.S . Section IBWC) and the City. The outfall conveys and discharges treated effluent from the IBWC’s Intern ational Wastewater Treatment Plant and treated effluent from the City’s South Bay Water Reclamation Plant. As of the date of this Agreement, the outfall has a current Average Daily Flow Capacity of 174 million gallons per day. As of the date of this Agreement, the City owns 39.94% of the capacity of the outfall and the balance of the capacity is owned by the IBWC.

1.54 South Bay Water Reclamation Plant or SBWRP is the wastewater treatment facility located at 2411 Dairy Mart Road in San Diego, which includes four major processes:
primary treatment, secondary treatment, tertiary treatment, and disinfection.

1.55 Strength means the measurement of Total Suspended Solids and Chemical Oxygen Demand within the Flow and any other measurement required by law after the date of this Agreement or necessary for the Functional Design Methodology.

1.56 Total Suspended Solids or TSS means the insoluble solid matter in wastewater that is separable by laboratory filtration, as determined by the procedures specified in the most current edition of “Standard Methods for the Ex amination of Water and Wastewater,” or any successor publication which establishes the industry standard.

1.57 Tertiary Component is that portion of the wast ewater treatment process that currently filters the secondary treated wastewater effluent through fine sand and/or anthracite coal to remove fine suspended solids and disinfects it to meet th e requirements of the California Administrative Code, Title 22, or its successor for filtered and disinfected wastewater used for recycled and repurified water.

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1.58 Two-Party Approval is an approval mechanism under this Agreement that requires the City’s Administrative Approval and a two-th irds (2/3) vote or great er of the Metro JPA Directors present at a duly noticed Metro JPA pub lic meeting as described more particularly in Section 16.

1.59 Variable Costs shall refer to the portion of the Functional Design Methodology costs that are allocated based on Metered Flow and Strength.

1.60 Water Repurification System shall mean any facilities, including treatment and conveyance facilities, the purpose of which is the production or conveyance of Repurified Water.

Water Repurification System includes, but is not limited to: the Tertiary Component of the North City Water Reclamation Plant to the extent being used to produce Repurified Water, the North City Pure Water Facility; the Repurified Water conve yance system, which will transport Repurified Water from the North City Pure Water Facility and/or other facilities to the Miramar Reservoir or other alternative location(s) as determined by the City; and any other Repurified Water treatment or conveyance facilities which are part of the Pure Water Program. These facilities are constructed and maintained at the expense of the City water utility and are excluded Metro System Costs under this Agreement.

2. OWNERSHIP AND OPERATION OF THE METRO SYSTEM

2.1 Rights of the Parties. The City is the owner of the Metro System, and any additions to the Metro System or other facilities constructed pursuant to this Agreement. As more particularly set forth in this Agreement, and subject to the terms and conditions of this Agreement, the rights of the Parties generally include the following:

2.1.1 All decisions with respect to the planning, design, construction, operation and maintenance of the Metro System shall rest with the City, in consultation with the Metro JPA.

2.1.2 The Participating Agencies shall have a contractual right to use the Metro System and to participate in its operation.

2.1.3 The City may transfer ownership of all or part of the Metro System at any time. In the event of a transfer , including a sale under Section 2.7, the City’s successor shall be bound by the terms of this Agreement, and the Participating Agencies rights under this Agreement shall not be affected by such a transfer.

2.1.4 Any Participating Agency may transfer or assign its rights and obligations under this Agreement. Any transfer shall first be approved by the City. No transfer may occur if the City reasonably deter mines, after consultation with the Participating Agencies involved, that the proposed transfer will imbala nce or adversely impact the City’s ability to operate the Metro System.

2.2 Metro System Services.

2.2.1 The City shall provide wastewater conveyance, treatment and disposal services to the Participating Agencies through the Metro System, under the terms set forth in this Agreement.

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2.2.2 The City shall operate the Metro System in an efficient and economical manner, maintaining it in good repair and working order, all in accordance with recognized sound engineering and management practices.

2.2.3 The City shall convey, treat, and dispose of or reuse all wastewater received under this Agreement in such a manner as to comply with all applicable laws, rules and regulations.

2.3 Flow Commitment.

2.3.1 Subject to the provisions of this Agreement and absent a separate agreement of the Parties, all Flow within the capacity limits set forth in Exhibit B or any amendments or changes thereto shall remain in the Metro System.

2.3.2 This Agreement shall not preclude any Party from diverting Flow as a result of the construction of reclamation/reuse facilities or New Capacity outside of the Metro System.

2.3.3 Any Participating Agency may negotiate an agreement with the City to reduce all or part of their Contract Capacity. If a Participating Agency reduces its Contract Capacity to zero, that Participating Agen cy’s rights shall terminate under this Agreement and that Participating Agency shall no longer be consider ed a member of the Metro JPA. However, the agreement between the City and Participating Agency shall provide that the Participating Agency pays its proportionate share of Capital Improvement Costs for the remainder of the useful life of the facility(ies) constructed during the time the Participating Agency possessed Contract Capacity in the Metro System. This shall include, but is not limited to, any remaining portions of outstanding debt that was incurred for capital facilities during the time the Participating Agency had the right to send Flow into the Metro System, and the cost to disconnect the Participating Agency’s system from the Metro System. Any Contract Capacity that a Participating Agency chooses to relinquish under this section shall be treated as Pooled Capacity after the effective da te of an agreement between the City and that Participating Agency . This section does not apply to Inter-Agency transfers of Contract Capacity, which involve th e relinquished Contract Capacity being assigned to and assumed by another Participating Agency or the City. Inter-Agency transfers are governed by Section 3.2

2.3.4 Flow Projections. Currently, the Proj ected Future Strength and Flow Amounts are projected to the year 2050 in order to allow the Parties time to plan for future development and growth. However, these projections may be amended from time to time through the Exhibit B amendment processes in this Agreemen t to more fairly align with actual flow and strength data. The parties shall begin discussion to recalculate the Projected Future Strength and Flow Amounts set forth in Exhibit B by no later than January 1, 2040.

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Agency to pay from its annual income and revenues any sum which would create an indebtedness, obligation or liability within the meaning of the provisions of Section 18 of Article XVI of the Constitution of the State of California and, in the City’s case, San Diego Charter Section 99; or (iii) prevent the City, in its discretion, from using tax revenues or any other available revenues or funds of the City for any purpos e for which the City is empowe red to expend moneys under this Agreement. For the avoidance of doubt, subsections (i) and (ii) shall not relieve the City from its obligations to fund the Metro System as provided in this Section 2.4.

2.5 Limitations on Types and Condition of Wastewater.

2.5.1 Each Participating Agency shall minimize to the maximum extent practicable, the infiltra tion and inflow of surface, ground or stormwaters in to its respective wastewater systems.

2.5.2 Each Participating Agency will ensure that all Industrial Users of its wastewater system are regulated by and comply with the City’s industrial pretreatment program.

City shall not require the Participating Agencies to take any actions against such Industrial Users beyond that which are (1) required under applicable laws, rules and regulations, (2) taken by the City, or (3) that can be taken, but are not being taken by the City.

2.5.3 City and the Participating Agencies agree that the Interjurisdictional Pretreatment Agreements executed by and between the City and each Participating Agency, as applicable, shall terminate eff ective upon the date of this Agr eement. However, the separate transportation agreements that are currently in effect betw een or among the City and the Participating Agencies shall rema in in effect in accordance with their terms. Each Participating Agency will not discharge wastewater originating outside its respective boundaries into the Metro System without the approval of the City, which shall not be unreasonably withheld.

2.5.4 Each Participating Agency shall be responsible for the violation of any applicable laws, rules or regulations associated with its respective discharge of wastewater into the Metro System. Nothing in this Agreement shall affe ct or prohibit the ability of any Participating Agency to hold third parties responsible for such violations. However, City shall be responsible for enforcement actions related to the violation of any applicable laws, rules, or regulations associated with industrial waste dischargers regulated by City, though each Participating Agency shall collaborate with City wh en necessary, on any enforcement response for pretreatment violations within a Participating Agency’s jurisdiction. However, the City shall not be responsible for enforcement or monitoring related to a Participating Agency’s compliance with its own NPDES Permit.

2.5.5 Food establishments and dischargers of fats, oils, and grease (FOG) are regulated and monitored by indi vidual Participating Agencies within their jurisdiction.

Participating Agencies are responsible for the provision of FOG pr ograms, services, and enforcement within their jurisdiction. The City will not provide FOG-related services or programs outside of the City’s jurisdiction.

2.5.6 Residuals shall be separately conve yed so that the Residuals bypass all secondary wastewater treatment processes, unless otherwise agreed to in writing by the City and a

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Participating Agency or the City and a group of Participating Agencies. For the avoidance of doubt, the Agreement regarding Operation and Maintenance of the East County Residuals Line entered into by the City and the ECAWP JPA with an ef fective date of Februa ry 6, 2023 (specifically, Exhibit C to that agreement entitled Principles of Understanding for Op eration and Residuals Management in Lieu of the East County Residuals Line), is an agreement that allows the Residuals from the ECAWP Project to convey Residuals in a manner that does no t bypass all secondary wastewater treatment processes under certain conditions.

2.6 Enforcement Actions. In the event a regulatory agency, imposes any penalty or fine, or takes other enforcement action, or a private citizen brings a citizen enforcement action to enforce regulatory requirements, (collect ively, “Enforcement Actions”) relating to the conveyance, treatment, or disposal of wastewater in or from the Metro System or operation of the Metro System, the City shall determine as part of its investigation and response to the notice of violation whether the City or a Participating Agency or Agencies ca used or contributed to the violation for reasons which may include, without limitation, exceeding thei r Contract Capacity, the contents of their wastewater, or the failure to maintain or operate the Metro System or a Participating Agency’s system. Any costs associated with an Enforcem ent Action including but not limited to fines, penalties, corrective measures, and costs of defense (collectively, “Penalty(ies)”) shall be shared by the Participating Agencies and the City proportionately based on Fixed Capacity as set forth in the then current Exhibit B, unless the City determines, based on verifiable facts, that the violation for which the Penalty is imposed was caused by, or was the result of, gross negligence or willful misconduct of the City or a Participating Agency.

2.6.1 For any Enforcement Actions (1) rela ted to sanitary sewer overflows of 10,000,000 gallons or more from the Me tro System occurring after th e effective da te of this Agreement, or (2) that the City reasonably anticip ates will result in the Participating Agencies’ collective responsibility for the Penalties impos ed to exceed 10% of the Metro Participating Agencies combined annual operations and maintenance budget for the Metro System for the fiscal year in which the Penalty is imposed (“Thresh old Amount”), the City’s determination will be subject to review by the Metro JPA as set forth in 2.6.1.1 through 2.6.1.8 below. The scope of the Metro JPA’s review shall be limited to whether the violation for which the Penalty is imposed was caused by, or was the result of, gross negligence or willful misconduct of the City or a Participating Agency, and if so, how the Penalty should be fairly allocated. For all other Enforcement Actions, the City’s determination related to the allocation of Penalty shall be final.

2.6.1.1 The City will provide a copy of any report submitted to a regulatory agency in response to an Enforcemen t Action to the Metro JPA within 30 days of submitting that report to the regulatory agency. In that same communica tion, the City will also provide a summary of the City’s findings rega rding causation and preliminary determination regarding the allocation of any Penalties. If these determinations have not been made, the City will provide an anticipated date that the information will be provided.

2.6.1.2 If the Metro JPA disputes the City’s determination as to the allocation, as evidenced by a vote approved by two-thirds of the Metro JPA Directors present at a duly noticed meeting, it shall notify the City in writing of the same within 90 days of receiving the City’s preliminary allocation determination.

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2.6.1.3 The City and representatives of the Metro JPA shall meet and confer to discuss the matter an d try to reach an agreement on the appropriate allocation. To facilitate resolution, the meet and confer process shall be treated as a settlement discussion under the California Evidence Code and shall be a conf idential process. The meet and confer process shall focus on whether the violation for which the Penalties are being imposed is the result, in whole or in part, of the gross negligence or willful misconduct of the City or a Participating Agency, and if so, how the Penalties shall be allocated.

2.6.1.4 If through the meet and confer proc ess, the City de termines that the Participating Agencies’ collective responsibility for the Penalties imposed will be less than the Threshold Amount, then the City will inform the Metro JPA of this determination and allocate the Penalty as such, and no further action by the Metro JPA is required.

2.6.1.5 If through the meet and conf er process, the City and representatives of the Metro JPA reach an agreement, and the Pa rticipating Agencies’ collective responsibility for the Penalties imposed will be equal to or greater than the Threshold Amount, then that agreement shall be subject to th e Two-Party Approval process. The City and representatives of the Metro JPA shall have an opportunity to pr esent the proposed agreement to the Metro JPA before a vote on the determination.

2.6.1.6 If the City and representatives of the Metro JPA are unable to reach an agreement and Participating Agencies’ collectiv e responsibility for th e Penalties imposed is equal to or exceeds the Threshold Amount, the City will make a final determination regarding allocation of the Penalty and present the determination to the Metro Commission.

2.6.1.7 In the event that Two Party Appr oval is required but is not achieved, each Participating Agency shall pay the portion of the Penalty allocated to them at the time that it is invoiced, however, such payment may be made under protest. The Parties shall engage in the dispute resolution procedures under this Agreement to resolve the issue, prior to any Party having the right to initiate litigation.

2.6.1.8 Penalties in excess of the Threshold Amount shall be separated out in the reconciliation billing and notated as a spill penalty with reference to the first day of the spill associated with the penalty.

2.7 Right of First Refusal.

2.7.1 The City shall not sell or agree to sell the Metro System without first offering it to the Participating Agencies. For the purposes of this section, “Participating Agencies” shall mean a Participating Agency, a group of Participating Agencies, or a third party representing one or more Participating Agencies. The term “se ll” shall include any tran sfer or conveyance of the Metro System or of any individual treatment , collection, or reclamati on facility or outfall within the Metro System.

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or other governmental agency whose primary purpose is to provide wastewater treatment. The City shall not seek to impose on bond holders a waiver of Section 6.04 or 6.20. Absent such a restriction, before the City sells or agrees to sell the Metro System, or any portion of it, the City shall offer to sell the Metro System to the Participating Agencies (the “Offer”) on the terms and at a price equal to that proposed for the sale of the Metro Syst em to a third party. The City shall provide all Participating Agencies with written notice of the Offer per Section 13 . The Participating Agencies shall have ninety (90) days from the date of mailing of the Offer (the “Intent to Respond Period”) in which to notify the City of th eir intent to respond to the Offer. If a Participating Agency or Agencies notify the City of their intent to respond to the Offer, that Participating Agency or those Agencies shall have five months from the expiration of the Intent to Respond Period in which to accept or reject the Offer. The Offer shall contain the name of the proposed purchaser, the proposed sale price, the terms of payment, the required deposit, the time a nd place for the close of escrow, and any other material terms a nd conditions on which the sale is to be consummated. If no Participating Agency or Agencies notifies the City of its (or their) intent to respond to the Offer within the Intent to Respond Period, the City may move forward with the sale of the Metro System without further notice to the Participating Agency in accordance with Section 2.7.3 below.

2.7.3 If the Participating Agencies give timely notice of their intent to respond and timely notice of their acceptance of the Offer, then the City shall be obligated to sell and the Participating Agencies shall be obligated to purchase the Metro Syst em or any individual treatment, collection or reclamation facility or outfall within the Metro System, as applicable, at the price and on the terms and conditions of the Of fer. If the Participating Agencies do not give timely notice of their intent to respond or their acceptance of the Offer, or do not submit an offer on the same terms and conditions as the Offer, the City may, following the end of the Offer period, sell the Metro System, or any portion of it, at a price and on terms and conditions no less favorable to the City than those in the Offer. The City sh all not sell the Metro System to any third party on terms or at a price less favorable to the City from the terms and price contained in the Offer absent compliance with the terms of this Section. The City’s sale of the Metro System under Section 2.7, is a transfer of ownership subject to Section 2.1.3.

2.7.4 Nothing herein shall prevent the C ity from entering into a financing agreement which may impose limits on the City’s power to sell the Metro System to the Participating Agencies pursuant to Section 2.7. 1 if the City reasonably believes that such a financing agreement is in the City’s best interest. Neither the entry into such a financing agreement by the City nor the performance thereof by the City shall constitute a breach or default by the City hereunder.

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Unified Management of Industrial Waste Discharg e Pretreatment and Enhanced Source Control Programs (“Administrative Agreement #1”). Notwithstanding the above, the City may enter into supplementary agreements with an individual Pa rticipating Agency, or a group of Participating Agencies, relating to industrial waste discharg e pretreatment and enhanced source control programs unique to such Participating Agency(ies), so long as the supplementary agreement incorporates a separate cost proportional to the participation of such Participating Agency or group of Participating Agencies that is the sole responsibility of such Participating Agency(ies).

2.8.1 Delegation of Authority. Each Participating Agency shall and hereby does delegate to City full au thority and responsibility to operate , manage, and enforce an effective pretreatment program throughout the Metro System to ensure that all Industrial Users are subject to uniform rules and regulations, with direct billing to Industrial Users by the City to begin on the first July 1 following execution of this Agreement.

2.8.2 Operations and Maintenance. Procedures relating to the operation, management, enforcement, and cost recovery fo r the pretreatment program are set forth in Administrative Agreement #1.

2.8.3 Amending Pretreatment Program Procedures. Administrative Agreement #1 may be amended from time to time as set forth in Section 15. In the event of any conflict between this Agreement and Administrative Agreement #1, the terms of this Agreement shall control.

2.8.4 Adoption of Local Ordinances. By no later than June 30 following the Effective Date of this Agreement, every Part icipating Agency shall adopt a local ordinance conforming with the sample ordi nance contained in Administrative Agreement #1 and the City’s pretreatment ordinance, each as amended from time to time, to ensure consistency throughout the Metro System.

2.8.5 Identification of New Industrial Users. Participating Agencies shall notify the City of any identified potential new Industrial Users within their respective boundaries while the City will bear responsibility for inventor y assessments on a regular basis as set forth in Administrative Agreement #1.

2.8.6 Permitting and Permit Co mpliance. Nothing in this Agreement shall be construed to relieve any discharger to the Metro System of the responsibility to obtain and comply with any required permits for, and to comply with rules and regulations applicable to, dischargers to the Metro System. If the City determines that an Industrial Wastewater Control Program Permit is required, it shall issue the permit subject to the City’s permit requirements. The City’s approval or denial of any application for, or revocation of, an Industrial User Permit shall be in accordance with Chapter 6, Article 4 of the San Diego Municipal Code as well as any other applicable federal, state or local regulations, any published City guidance related to the Industrial Wastewater Control Program, and the City’s Enforcement Response Pl an, all as may be amended, renumbered, or renamed from time to time. The City and any Participating Agency may elect to coordinate and combine issuing their wastewater discharge permits to Industrial Users when deemed appropriate by both parties. Any agreement between the City and the Participating Agencies related to permitting under the Industrial Wa stewater Control Program, shall not transfer responsibility to City for any other type of permitting outside of the City’s jurisdiction, or subject any local agency

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as that term is defined in California Government Code section 53090, to local building and zoning ordinances that the local agency is not otherwise legally subject to.

2.8.7 Inventory of Industrial Users. City shall create and maintain an inventory of all Industrial User within the Metro System as soon as reasonably practicable following execution of this Agreement. The Participating Agencies shall review the inventory and shall notify the City of an Industrial User(s) in its ju risdiction that is not identified on the inventory as set forth in Administrative Agreement #1.

2.8.8 Evaluation, Monitoring, Enforcem ent and Program Review. Upon the effective date of this Agreement, it shall be the City’s right and obligation to carry out pretreatment evaluation, permitting, monitoring and/or enforcemen t throughout the Metro System consistent with the procedures se t forth in Administrative Agreement #1. The City’s pretreatment program review shall occur as necessary, but no less than once every five (5) years. Nothing herein shall be construed as prohibiting any Participating Agency from en forcement of its own pretreatment ordinance within its jurisdiction.

2.8.9 City’s Direct Billing of Industrial Users. The City shall directly bill Industrial User throughout the Metro System to r ecover costs associated with the pretreatment program as set forth in Administrative Agreement #1. The City Council shall set and approve such costs in a publicly noticed meet ing pursuant to the procedures set forth in Administrative Agreement #1.

2.9 Wastewater Generated at Military Bases. The City may contract directly with federal military bases that are connected to the Metro System for wastewater services and capacity subject to the terms of this S ection 2.9. If a United St ates military base is located within a Participating Agency’s jurisdiction, the Participating Agency may request that the City bill that military base directly as a separate and distinct customer. In the event the City agrees to accept the military’s wastewater and bill the military base as a separate and distinct customer, then (1) the Participating Agency shall have no billing obliga tions with respect to th e military base; (2) each Participating Agency whose sewage line conveys the military base’s wastewater reserves the right to negotiate and charge the federal government a conveyance or transportation fee for use of that Participating Agency’s sewer line; (3) the City shall require that the military base comply with the applicable City pretreatment rule s; and (4) the City agrees that the wastewater generated by the military base shall not be considered wastewater of the Participating Agency with respect to capacity once the City enters into an agreement with the military base. Any transfers of capacity that are appropriate or necessary to accommodate flow from military bases, if needed, would be governed by Section 3.2 herein, “Inter-Agency Transfers of Contract Capacity.”

3. CAPACITY RIGHTS

3.1 Contract Capacity. Each Participating Agen cy shall have the contractual right to discharge wastewater to the Metro System up to the limits set forth in Exhibit B (“ Contract Capacity”). Each Party’s Contract Capacity as stated in Exhibit B, is used for the purpose of allocating the Metro System’s Pure Water Program Capital Improvement Costs, Repurified Water Revenue, and the Capital Expense Rate under this Agreement.

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3.2 Inter-Agency Transfers of Contract Cap acity. The Participating Agencies and the City may buy, transfer, sell or exchange all or part of their Contract Capacity among themselves on such terms as they may agree upon, subject to the following:

3.2.1 Any Party requesting to buy, transfer, sell, or exchange all or part of their Contract Capacity (“ Inter-Agency Transfer ”) shall provide a writte n proposal to the City including the proposed terms of such Inter-Agency Transfer. The Party requesting the Inter-Agency Transfer shall also provide notice to all other Participating Agencies under Section 13 concurrently with submitting the proposal to the City.

3.2.2 All Participating Agencies will have 45 days to provide any technical input to the City regarding the propos ed Inter-Agency Transfer. Any Participating Agency providing technical input shall provide a copy of such input to all other Participating Agencies under Section 13 concurrently with submitting the input to the City.

3.2.3 Upon receipt of a request for an Inter-Agency Transfer, the City will review the request, consult with the affected Particip ating Agencies, and consid er any technical input provided by other Participating Agencies.

3.2.4 All proposed purchases, transfers, sales or exchanges of Contract Capacity require the City’s Administrative Approval prior to becoming effective. No Contract Capacity may be transferred if the City determines that said transfer will imbalance, or will otherwise adversely impact the City’s ability to operate the Metro Sy stem. Provided, however, that the Participating Agency seeking the transfer may offer to cure such imbalance at its own expense. If the Participating Agency makes such an offer, the City may not unreasonably withhold Administrative Approval.

3.2.5 If the City approves the offer as proposed, the City shall adjust the Contract Capacity set forth in Exhibit B per Section 3.6 to reflect the approved changes. If the City determines, after taking the steps in Section 3.2.3 that an Inter-Agency Transfer may be approved if the request is modified, the City will provide a written notice to all Participating Agencies of the modified Inter-Agency Transfer under Section 13 no less than 30 days prior to the Inter-Agency Transfer becoming effective. Such modified Inter-Agency Transfer will become effective 30 days following the written notice bein g provided, and the City will prove an updated Exhibit B per Section 3.6 reflecting the approved changes.

3.2.6 If a Participating Agency reduces its C ontract Capacity to zero through an Inter-Agency Transfer, that Participating Agency’s rights under this Agreement shall terminate and that Participating Agency shall no longer be a member of the Metro JPA. The Participating Agency shall remain responsible for all outstanding financial obligations under this Agreement, unless the Inter-Agency Transfer Agreement assigns those obligations to the Participating Agency accepting the transfer and that agency assumes those obligations. Outstanding financial obligations include, but are not limited to, a Participating Agency’s proportionate share of Capital Improvement Costs for the remainder of the useful life of the facility(ies) constructed during the time the Participating Agency possessed Contract Capacity in the Me tro System, including any remaining portions of outstanding debt incurred for capit al facilities during the time the Participating Agency had the

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right to send Flow into the Me tro System, and the cost to disc onnect the Participating Agency’s system from the Metro System.

3.3 New Contract Capacity. The Parties r ecognize that the Metro System may be modified to create capacity in the Metro System beyond that set forth in Exhibit B as a result of the construction of additional facilities, acquisition of facilities, increased flows, or as required by regulatory or similar such action. If capacity in excess of the Contract Capacity (“New Contract Capacity”) is required or requested by a Party, the Parties shall negotiate in good faith to provide the needed or requested capacity. If the Parties agree to provide New Contract Capacity, they shall memorialize the agreement for New Contract Capacity in an Administrative Agreement subject to the Joint Administrative Approval Process set fort h in Section 15. If the parties execute an Administrative Agreement for New Contract Capacity, Exhibit B shall also be adjusted pursuant to Section 3.6 to reflect the New Contract Capacity.

3.4 Reductions in Metro System Capacity. Th e Parties further r ecognize that Metro System Capacity may be reduced to comply with, or in response to, applicable permit conditions, or related regulatory action, or s ound engineering principles. In the event that the capacity of the Metro System is re-rated to levels below the numb ers reflected in the Totals Line set forth in Exhibit B, then the Contract Capacity shall be reallocated proportionately among the Parties based on the percentages of fixed ownershi p set forth in Exhibit B at that point in time, subject to the City’s Administrative Approval and amendment of Exhibit B.

3.5 Restrictions on Veto of Transfers and Acquisitions of Capacity. Each Party understands and agrees that no Partic ipating Agency has a right to veto or prevent the transfer of capacity between other Participating Agencies or the City, nor the creation or acquisition of new capacity for another Participating Agency or Agencies. By signing this Agreement, each Participating Agency is expressly preapproving su ch actions. The sole right of a Participating Agency to object to any of the foregoing shall be through expression of its opinion to the Metro JPA and, where applicable, through exercise of its rights under the dispute resolution provisions of this Agreement.

3.6 Amendments to Exhibits B. If the City determines that an amendment to Exhibit B is required for any reason othe r than a request from a Particip ating Agency under Sections 2.3.3 and Sections 3.2, and that reason only requires the City’s Administrative Approval, the City shall prepare and circulate to all Participating Agencies a notice explaining the facts and circumstances that the City’s determination is based on(including any relevant data available), and the proposed amendment to Exhibit B within 60 days of determining such an amendment is necessary. The Participating Agencies will have sixty (60) days to provide comments to the City, and all comments submitted to the City by a Participating Agency sh all also concurrently be submitted to all other Participating Agencies. The City will review all comments received, prepare final amendments to Exhibit B to reflect adjustments in Contract Ca pacity, and circulate the final amended Exhibit B by no later than sixty (60) days after the City’s Administrative Approval. If the amendment to Exhibit B requires an approval process other than the City’s Administrative Approval, the Parties will follow the required approval process, and on ce that is completed, the City will prepare and provide the final version of Exhibit B within 60 da ys of the completion of the approval process.

The City shall note each amendment a nd amendment date in the Exhibit List and shall keep an

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updated version of Exhibit B on file with the City Public Utilities Department at all times. An amendment to Exhibit B shall not be retroactive, except as provided in Section 4.4.3.3.

3.7 The South Bay Ocean Outfall. Nothing in this Agreement shall limit the City’s right to transfer capacity rights in assets that are not a part of th e Metro System, including without limitation that portion of the South Bay Ocean Outfall which is not part of the Metro System.

4. FINANCE, BUDGETING, AND ACCOUNTING: PAYMENT AND MONITORING

PROVISIONS

4.1 Payment for Metro System Facilities. Thr ough the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the costs of planning, design and construction of all of the Metro System facilities which are identified in Exhibit A .

4.2 Payment for Additional Metro System Facilities. Through the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the costs of acquisition, planning, design and construction of such facilities, in addition to t hose set forth on Exhibit A, as are necessary to (a) convey, treat, dispose, and reuse wastewater in the Metro System; (b) provide the Contract Capacity set forth in Exhibit B; and (c) maintain hydraulic capacity as otherwise required by sound engineering principles. Each Participating Agency shall pay its share of the costs necessary to ensure the Metro Syst em maintains compliance with applicable laws, rules and regulations, including the Ocean Pollution Reduction Act of 1994 and its successor(s), as well as present and future waivers of applic able treatment standards at any Metro System treatment facility. Exhibit A may be amended to reflect replaced or rehabilitated facilities, or changes in facilities, subject to the City’s Administrative Approval; however, if the City proposes to add a new Metro facility to Exhibit A, or conver t a City facility to a Metro facility that will be added to Exhibit A, then each such amendment sh all be (1) subject to the City’s Administrative Approval, in its sole discretion, when the addition or conversion is for the purpose of complying with applicable laws, rules, or regulations; or (2) supported by an independent third-party study setting forth the benefits to the Metro System of each new facility, including a cost allocation for capital and projected annual main tenance costs if the addition or conversion is for any other purpose. For any new Metro facility or conversion of a City facility to a Metro facility proposed to be added or converted under (2) above, any su ch proposal must be memorialized in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. Once approved, the City shall amend Exhibit A accordingly and shall give notice of any amendments to all Participating Agencies. The City shall keep an updated version of Exhibit A on file with the City Public Utilities Departme nt. Exhibit A may be amended to reflect other changes to the Metro System only as expressly provided in this Agreement.

4.3 Payment for Operation and Maintenance. Through the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the Operation and Maintenance Costs of all Metro System facilities. The Participating Agencies shall not pay for the Operation and Maintenance Costs of the Water Repurification System, which are City Water Utility PW Costs.

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4.4 Charges Based on Flow, Strength and Fixed Capacity: Exception.

4.4.1 Except as otherwise described in this Section 4.4, a Participating Agency’s share of the charges in this Section 4 shall be based on its proportionate Flow, Strength, and Fixed Capacities as set forth in Exhibit B, as described more fully in Section 5.

4.4.2 Notwithstanding Section 4.4.1, or any other provision of this Agreement, a Participating Agency’s share of PWP Phase 1 Capital Improvement Costs, PWP Phase 1 Repurified Water Revenue, and Pure Water Program Capital Expense Rate attributable to the Metro System as described in Sections 6.6 and 6.7 shall be assessed or credited based on the Parties’ proportionate share of the Pure Water Capital Me lded Percentages set forth in Column 7 of Exhibit B. The City shall annually allocate the estimated and actual PWP Phase 1 Capital Improvement Costs and revenues which are attributable to the Metro System in proportion to each Party’s Pure Water Capital Melded Percentages as set forth in Column 7 of Exhibit B when estimating quarterly payments and conducting year-end adjustments.

4.4.3 Each Party recognizes that operation within respective Projected Future Strength and Flow Amounts is essential to the accurate allocation of costs and revenues under the Pure Water Program. In recognition of same, the Parties agree as follows:

4.4.3.1 Contract Capacity Transfers – Increases in Fixed Capacity Components. Beginning in the next fiscal year after the effective date of this Agreement, if a Party exceeds their Capacity Rights or any individual co mponent of the Capacity Rights set forth in Exhibit B, by any one of the following triggers based upon data available at the completion of a fiscal year: (1) Three percent (3%) in a fiscal ye ar for any two consecutive fiscal years, (2) One MGD in a fiscal year for any two consecutive fiscal years, or (3) The equivalent Strength of one MGD in a fiscal year for any tw o consecutive fiscal years; then, the City shall prepare an amendment to Exhibit B that reflects a Contract Capacity Transfer for that Party based on the available information about such Party’s exceedance(s) and the methodology set forth in Exhibit E.

After Phase 2 is completed, if, due to contract capacity transfers or reduc tions in capacity, the Pooled Capacity drops to less than two percen t (2%) of the total Contract Capacity, a capacity study shall be initiated to evalua te existing facilities for new capacity. The C ity shall thereafter amend Exhibit B under the process set forth in Section 3.6 to reflect the new Contract Capacity for all Parties. Any changes to the methodology in Exhibit E shall be made pursuant to an Administrative Agreement subject to the Joint Administrative Approval Process described in Section 15.

4.4.3.2 Contract Capacity Transfers – Decreases in Fixed Capacity Components. Beginning in the next fiscal year after the effective date of this Agreement, if a Party can show through an independent report that its Monthly Average Daily Flow, annual average pounds per day of COD, annual average pounds per day of TSS, Incremental Peak Flow, or RSDP is projected to decrease ten percent (10%) or more below their Projected Future Strength and Flow Amounts using data from a minimum of three (3) c onsecutive prior fiscal years as support, then City shall prepare a proposed amendment to Exhi bit B that reflects the new Projected Future Strength and Flow Amounts for al l Parties based on such Party’ s decrease and other relevant information using sound engineering principles and the guidelines set forth in Exhibit E. The City’s

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proposed amendment shall be subject to the Two- Party Approval Process. If approved, the City shall thereafter amend Exhibit B using the process set forth in Section 3.6.

4.4.3.3 If Exhibit B is amended to update one or more Parties’ Projected Future Strength and Flow Amounts pursuant to Section 4.4.3.1 or 4.4.3.2, the change in Projected Future Strength and Flow Amounts shall be effectiv e retroactively to the be ginning of that fiscal year, and the City shall use the updated amounts in estimating quarterly payments and conducting year-end adjustments for Pure Water Program co sts and revenues. Theref ore, any Party that underpaid based on prior Exhibit B Fixed Capacity amounts (which were based on prior Projected Future Strength and Flow Amounts) shall pay the retroactive amount due in quarterly installments in its quarterly payments the fo llowing fiscal year; any Party th at overpaid ba sed on previous Exhibit B Fixed Capacity amounts sh all receive a credit in quarterly installments in its quarterly payments the following fiscal year. Notwithsta nding the preceding sentence, if the retroactive amount due exceeds 20% of a Party’s average annua l Metro System payments for the previous four (4) fiscal years, such Party may elect to pay the retr oactive amount due in its quarterly payments over the subsequent four (4) fiscal years, with interest, based on the most recent quarterly earnings rate of the City’s Treasurer’s Pooled Rate of Return; any Party that overpaid in an amount that exceeds 20% of their annual average Metro Syst em payments for the previous four (4) fiscal years based shall receive a credit in its quarterly payments spread over the following four (4) fiscal years.

4.5 Monitoring Flow and Strength.

4.5.1 The City shall monitor Flow and Strength. The City shall own and operate as part of the Metro System monitoring devices which will measure the amount of Flow discharged into the Metro System, unless otherwise agreed by the City and a Participating Agency. These devices shall be installed at locations appropria te to accurately monitor Flow and Strength. The City may also monitor Flow and Strength at other locations as it deems appropriate. For all currently unmetered areas, unit counts or agre ed upon flow estimates wh ere unit counts are not appropriate shall be used. For ad ding or subtracting unit count ar eas, the average current Metro Flow per unit shall be used consistently for all Parties. These unmetered unit counts will be updated at least once every five (5) years. If the flow in an unmetered ar ea is over 0.5 MGD at a specific connection point, then a meter shall be added for that area, if possible. Exhibit F provides the Flow formulas that shall be used to determine the payment obligation for each Party, or a grouping or subgrouping of Parties, as applicable. Exhibit F sh all be distributed to all Parties with the budget estimates that are sent annually pursuant to Section 5.7.1. Th e City currently provides all Participating Agencies with access to their da ta from the Flow metering devices, including providing access to their raw data, and will continue to do so according to the Parties’ established practices on the Effectiv e Date of this Agreem ent. Changes to Exhibit F may be made upon the City’s Administrative Approval.

4.5.2 In measuring Strength, the frequency and nature of the monitoring shall not be more stringent for the Participating Agencies than it is for the City. The frequency, nature, and locations of Strength measurements, as well as the procedures used to determine Strength, shall be reviewed at least once every five (5) years and if changes are appropriate or required, the City may change the Strength measurements subject to the Two-Party Approval process. When conducting sampling within a Participating Agency’s service area, the City shall follow appropriate safety and

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security measures. The City and Participating Ag encies will coordinate with the Participating Agency’s operations staff to ensure facilities are not negatively impacted by inspections.

4.5.3 The City shall report Strength data to the Participating Agencies at least quarterly.

4.5.4 The City shall notify the Metro JPA’s Executive Director and any directly affected Participating Agency within 24 hours of any unpermitted or unlawful discharge or release of effluent from the Metro Syst em which may be reportable to th e Regional Board, or any other regulatory agency, and which may result in civ il or criminal penalties or administrative enforcement proceedings pursuant to Water Code sections 13261, et seq., section 13300, et seq., Government Code section 54740 et seq., or other provisions of law. Upon request from the Metro JPA or a Participating Agency, City shall provide the Metro JPA or affected Participating Agencies with copies of all non-privileged related correspondence to and from the Regional Board. The City shall endeavor to confer with Metro JPA staff during the report preparation process and before any report is submitted to a regulatory or enforcement agency.

5. FINANCE, BUDGETING, AND ACCOUNTING: SYSTEM OF CHARGES

5.1 Charges Authorized. The City agrees to implement, and the Parties agree to abide by a system of charges called Functional Allocated Billing (FAB). This system allows the City to equitably recover from all Participating Agencies their proportional share of the net Metro System Costs described in this section:

5.2 Functional Allocated Billing (FAB). The City shall annually determine the FAB rate based on the projected Metro System Costs (as defined below) for the forthcoming fiscal year, less all Metro System Revenues (as defined below). A detailed illustration of the FAB methodology using sample data is attached hereto as Exhibit J (the Sample FAB Calculation ) to assist the Parties in understanding how the FAB methodology works. Exhibit J provides an illustration of the application of FAB to applicable parameters and the derivation of unit rates and resulting charges. The Parties agree that Exhibit J is intended to promote transparency and a common understanding of the implementation of FAB under this Agreement, but the Parties acknowledge that Exhibit J is illustrative only and shall not control over the terms of this Agreement or the actual calculation of annual FAB rates, which shall be determined in accordance with this Section 5.

5.2.1 Calculation of FAB Rates.

5.2.1.1 The City shall determine the unit FAB rates by allocating net costs (Metro System Costs less Metro System Revenu es) between the fixed and measured variable parameters of Capacity Rights, such as Monthly Average Daily Flow, Incremental Peak Flow, COD, TSS, and RSDP as set forth in Exhibit B. These allocations are based on the approved Functional-Design Methodology analyses for sewer system components and estimated Operation and Maintenance (O&M) Costs allocated to each parameter.

5.2.1.2 Beginning one (1) year after subs tantial completion of the final project of Phase 1 of the Pure Water Program for which sewer revenue funds were used, the City shall have the FAB, which includes the Functional Design Methodology, professionally reviewed at least once every five (5) years.

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5.2.1.3 After conducting a professionally developed independent third- party report, the City may propose to change the FAB, including the Functional Design Methodology, to include any other parameter, or modify any term governed by this Section 5.2.1, by way of an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. However, the City may re vise the FAB, including the Functional Design Methodology at any time to include any other measurement required by law after the effective date of this Agreement subject to the City’s Administrative Approval, in its sole discretion. City will notify all Participating Agencies of any such review or revision no later than sixty (60) days after City’s Administrative Approval. Once approved, the FAB resulting from any review or revision under this Section will become the current a pproved version until it is revised by a future professional independent third-party study or a change in law.

5.2.1.4 Each of the parameters will have a fixed and variable O&M charge between 0% and 100%. Fixed Capacity Charges will be based on the Contract Capacity in Exhibit B. Variable charges will be based on measured parameters such as Metered Flow, Strength and RSDP.

5.2.1.5 Costs for capital improvement s, capital replacement, and rehabilitation costs including financing sha ll be based on the approved Functional-Design Methodology and the Contract Capacity in Exhibit B.

5.2.1.6 The net cost allocated to each of the parameters shall be divided by the total Metro System quantity for that parameter to determine the unit rates for each parameter.

These unit rates shall apply uniformly to all Parties.

5.3 Metro System Costs. The following sha ll at a minimum be considered Metro System Costs for purposes of calculating the annual FAB rate:

5.3.1 Except as provided in Section 5.4 (Excluded Costs), the annual Operation and Maintenance Costs and annual costs associated with administration, replacement, annual debt service costs and other periodic financing cost s and charges, capital improvement, insurance premiums, claims payments and claims administration costs of the Metro System, including projected overhead, shall be calculated using generally accepted accounting practices to reflect the costs of the Metro System.

5.3.2 Fines or penalties imposed on the City as a result of the operation of the Metro System, unless the fine/penalty is allocated to the City or a Participating Agency as provided in Section 2.5.5.

5.4 Excluded Costs. The following items shall not be considered Metro System Costs for purposes of calculating the annual FAB rate:

5.4.1 Costs related to the City of San Diego’s municipal sewer, water (including City Water Utility PWP Costs), and/or stormwat er systems as determined by City’s reasonable calculations consistent with sound engineering and best management practices.;

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5.4.2 Right-of-way charges for the use of public streets of the City or any Participating Agency. The City and the Participating Agencies agree not to impose a right-of- way charge for the use of its public rights-of-way for Metro System purposes;

5.4.3 Capital Improvement Costs or Opera tions and Maintenance Costs of any non-Metro System facility not included in Exhib it A, including, but not limited to, any costs associated with the ECAWP Project;

5.4.4 Those costs otherwise identified as excluded costs in Section 6.3.

5.5 Metro System Revenues and Allocations. The following revenues shall be at a minimum considered Metro System Revenues for purposes of determining the annual FAB rate:

5.5.1 Any grant or loan receipts or any other receipts that are attributable to the Metro System or Metro System components of the Pure Water Program, including, but not limited to, all compensation or receipts from the sale, leas e, or other conveyance or transfer of any asset of the Metro System or Metro System components of the Pure Water Program. Any such receipts attributable to the Metro System components of the Pure Water Program shall be allocated among the City and the Participating Agencies in the proportions set forth in E xhibit B Fixed Capacity amounts.

5.5.2 All compensation or receipts from the sale or other conveyance or transfer of any Metro System byproducts, including, but not limited to, gas, elec trical energy, sludge products, and Recycled Water produced at the NCWRP and SBWRP and the future Central Area Plant.

5.5.3 Payments by the City’s Water Utility for the Capital Expense Rate, as calculated under provisions in Section 6.7. These proceeds shall be allocated among the City and Participating Agencies in the proportions set forth in Exhibit B Fixed Capacity amounts.

5.5.4 Those portions of Repurified Water Re venue attributable to the Metro System, as calculated under provisions in Section 6.6.3. These revenues shall be allocated among the City and Participating Agencies in the proportions set forth in Exhibit B Fixed Capacity amounts.

5.5.5 Any other non-operating revenues, incl uding, but not limited to interest income included in the income credit portion of the annual audit.

5.6 Excluded Revenue. The following revenues shall be excluded from Metro System Revenues for purposes of determining the annual FAB rate:

5.6.1 Proceeds from the issuance of debt for Metro System projects.

5.7 Estimate and Billing Schedule and Year End Adjustment.

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Party, based on that Party’s Metered Flow for the past year and th e cumulative data of sampling for Strength constituents such as COD and TSS over the preceding five years and Fixed Capacities set forth in Exhibit B. If the cumulative five-year Strength data is no longer indicative of discharge from a Party, and a Contract Capacity Transf er has been approved pursuant to Sections 4.4.3.1,

4.4.3.2, or 3.2, then the City may eliminate the previous higher readings subject to the City’s Administrative Approval.

5.7.2 Prior to March 1 of each year the City will provide a mid-year review of the current year’s Metro System Capital Improvement Costs and Operations and Maintenance Costs and offsetting non-operating revenues such as gran t or loan proceeds, including fiscal year-end projections and provide such reviews to the Participating Agencies.

5.7.3 The City shall determine the volume of MBC Return on an annual basis and for billing purposes only. The co sts of treating MBC Return shall be allocated to the Parties in proportion to their Metered Flow and Strength. If a Party’s Monthly Average Daily Flow plus MBC Return exceeds their Contract Capacity set forth in Exhibit B, it shall not be treated as an exceedance pursuant to Section 4.4.3.1.

5.7.4 The City shall bill the Participati ng Agencies quarterly, invoicing on August 1, November 1, February 1 and May 1. Each bi ll shall be paid within thirty (30) days of mailing. Quarterly payments will consist of the total estimated cost for each Participating Agency, based on their estimated Flow, Strength, and Fixed Capacity Charges, divided by four.

5.7.5 At the end of each fiscal year, the City shall determine the actual Metro System Costs and the actual Metered Flow as well as the cumulative Strength data for the City and each of the Participating Agencies. The City shall make any necessary adjustments to the unit rates for Flow and Strength such as COD, TSS and Fixed Capacity Charges based on actual costs for the year as determined through the annual audit process in Sec tion 5.8.2 of this Agreement. The City shall then recalculate the FAB rate for the year using actual audited costs for the year, actual Metered Flow, Residuals, MBC Return, cumulative Strength factors, and Fixed Capacity Charges for the City and for each Participating Agency. The City shall credit any future charges or bill for any additional amounts due against the quarter after the prior year costs have been audited.

5.8 Financial Statements.

5.8.1 The City shall keep records and accounts of all costs and expenses relating to conveyance, treatment, disposal, and reuse of wastewater, and production of Repurified Water, and the acquisition, planning, de sign, construction, administra tion, monitoring, operation and maintenance of the Metro System and Water Repurification System, and any grants, loans, or other revenues received therefor. The City shall keep such records and accounts for at least four (4) years after the completed audit, or for any longer period required by law or outside funding sources.

5.8.2 Annual Audit. Said records and acc ounts shall be subject to reasonable inspection by any authorized representative of a ny Participating Agency at its expense. Further, said accounts and records shall be audited annually by an independent certified public accounting firm appointed by the City. A copy of said report shall be available to an y Participating Agency.

As part of said audit, the actual amount of City Water Utility’s PW Costs, Pure Water Program

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costs attributable to the Metro System, Repurified Water Revenue, and the Capital Expense Rate shall be determined and audited by the City’s external auditors and Participating Agency representatives, and a cumulativ e and annual summary of such am ounts shall be included as a footnote or attached to the audit of the Metro System. Cost summaries shall include separate lines for Capital Improvement Costs and Operation and Maintenance Costs.

5.8.3 The City shall make a good faith effort to complete the annual audit, and any related adjustments under th is Agreement as described in Section 5.8.2, by the end of the following fiscal year.

5.9 Debt Financing. The City retains the sole right to determine the timing and amount of debt financing required to pr ovide Metro System Faci lities. The annual debt service plus in- progress Capital Improvement Costs to maintain capacity in and of the Metro System shall be allocated to the Participating Agencies consistent with the Exhibit B Contract Capacity allocations effective on the date the debt is issued. If a Participating Agency wishes to prepay Capital Improvement Costs, and the City is able to accommodate such a request, then a Participating Agency may prepay their proportion al share of Capital Improvement Projects. If a Participating Agency wishes to withdraw or reduce their Flows and/or Strengths from the Metro System per Section 2.3.3 of this Agreement, such agency will remain responsible for its pro-rata share of all outstanding debt incurred at the time the debt was issued until it is satisfied, irrespective of withdrawal, reduction in Flows and/or Strengths, or Agreement expiration. If the City refunds debt, it shall allocate such refunds consistent with the Exhibit B Contract Capacity allocations effective on the date the debt was issued.

5.10 Allocation of Operating Reserves and De bt Service Coverage. The Parties shall continue to comply with the protocol set forth in Exhibit C, Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies, which exhibit may be amended from time to time consistent with Section 5.11.

5.11 Amending the System of Charges. Except as otherwise provided in Section 5.2.1.3, the Parties may amend any provision in this S ection 5 regarding the Finance, Budgeting, and Accounting System of Charges in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15.

6. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 1

6.1 North City Water Reclamation Plant Modifi cation. As part of Phase 1 of the Pure Water Program, the City intends to modify th e North City Water Reclamation Plant (a Metro System facility) and expand its capacity to 52 MGD. In addition, the City intends to construct the North City Pure Water Facility on a nearby site to produce Repurified Water. This Section sets forth the costs and revenues associated with the Pure Water Program attributable to the Metro System. Exhibit A includes current constructed Metro System facilities and existing and proposed future Phase 1 facilities.

6.2 New, Expanded or Modified Metro Syst em Facilities. Each new, expanded, or modified Metro System facility, which is part of the Pure Water Program, and is used in relation

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to the production of Repurified Water (in addition to the modification and expansion of the North City Water Reclamation Plant) shall be governed by this Section.

6.3 Costs Excluded from Metro System Costs – Phase 1. All of the following Pure Water Program costs, including Ca pital Improvement Costs, Oper ation and Maintenance Costs, and other related costs (includi ng administration, insurance, claims, and overhead) shall be excluded from Metro System Costs for purposes of calculating the annual FAB rate.

6.3.1 General Exclusions:

6.3.1.1 Costs of the Water Repurification System and any Metro System facilities to the extent constructed, modifie d, expanded, or used for the purpose of treating wastewater beyond secondary treatment (ocean disc harge standard under current law). This shall include costs for preliminary treatment, primary treatment, and secondary treatment to the extent such costs are higher than they would otherwise be due to the production of Repurified Water.

6.3.1.2 Costs for fail-safe disposal, if necessary, for design capacity for Repurified Water, including, but not limited to, any costs associated w ith the reservation of capacity at the Point Loma Wastewater Treatment Plant.

6.3.1.3 Costs for the demolition or replacement of existing Metro System facilities with similar facilities for the purpose of making space available for Water Repurification System facilities. Such costs may consider the current asset value or market value of the existing Metro System facility.

6.3.2 Cost Exclusions Specific to North City Water Reclamation Plant Improvements:

6.3.2.1 Costs for increased aeration tank volume to the extent the new volume exceeds the amount necessary to provide 52 MGD capac ity. Determination of sizing to provide 52 MGD capacity shall be based on the current tank volume necessary to provide 30 MGD capacity.

6.3.2.2 Costs for the methanol feed system.

6.3.2.3 Costs for RSDP disposal, including, but not limited to, pump stations, pipelines, retreatment, ocean outfall, and monitoring.

6.3.2.4 Costs for the use of existing tertiary water filters for Repurified Water purposes. Such costs may consider the depreci ated value of such filters or use such other appropriate valuation methods as agreed by the C ity and authorized representatives of the Metro JPA. Costs under this section shall be reimbursed or credited by City’s Water Utility to the Metro System.

6.4 North City Water Reclamation Plant Improvement Costs Included as Metro System Costs. Notwithstanding the above exclusions, th e City and the Particip ating Agencies have specifically agreed that the following Capital Improvement Costs and Operation and Maintenance Costs related to North City Water Reclamation Plant improvements shall be included as Metro

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System Costs for purposes of calc ulating the annual FAB rate (and therefore not qualify as City Water Utility PW Costs):

6.4.1 Costs for chemically enhanced primary treatment for up to 52 MGD capacity.

6.4.2 Costs for primary effluent equalization for up to 52 MGD capacity.

6.4.3 Costs for increased volume of aeration tanks that will provide up to, but not exceeding, 52 MGD capacity.

6.4.4 Costs to add secondary clarifier tanks sufficient for up to 52 MGD capacity.

6.4.5 Costs for wastewater conveyance faci lities to provide wastewater for replacement of Centrate flows th at cannot be treated at the Nort h City Water Reclamation Plant due to the production of Repurified Water.

6.4.6 Costs for treatment and conveyance of all MBC Return (micro-filtration and tertiary backwash) based on Flow, COD, and TSS.

6.5 Reallocation of PWP Costs incurred since FY 2014.

6.5.1 The allocation of Pure Water Program costs, retroactive to June 30, 2014, will be calculated the year the Agreement goes into effect, will be completed no less than two fiscal years following the production of 30 MGD by Phase 1 of the Pure Water Program.

6.5.1.1 All the O&M task orders, or costs that cannot be directly assigned to a PWP Phase 1 capital improvement project such as program mana gement, environmental documents, etc., will be reallocated by the final water/wastewater cost split, and will include interest accruing since J une 2014 at the interest rate earned by the City of San Diego for each applicable fiscal year as shown by the sample interest calculation included in Exhibit G, Sample of Interest Calculation. This postpones the reconciliation of costs until the substantial completion of all construction projects for Phase 1 (Cit y Water Utility PW Costs and Metro). This reconciliation will be performed during the audit of the fiscal year in which substantial completion of all projects occurs.

6.5.1.2 All Phase 1 PWP CIP projects were bid and awarded by October 2022 which is FY2023. All shared Phase 1 CIP pr ojects will be reallo cated to the actual construction cost split once the project is awar ded, and the cost loaded CPM is completed and negotiated between the City and the Participating Agencies during the FY2023 audit. All CIP soft costs incurred since 2014 will be reallocated like the O&M task orders during the audit of the year of substantial completion of the actual Phase 1 CIP projects. If interest is owed to the Metro System for soft costs starting in FY 2014, such interest shall be considered Metro System Revenues consistent with Section 5.5.5.

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6.6 Revenue Sharing for Repurified Water.

6.6.1 Background. Initially, the Parties anticip ate that the cost per acre foot associated with the production of Repurified Water will be more expensive than the cost per acre foot of untreated imported water. However, it is anticipated that Repurified Water produced under Phase 1 will be less expensive than untreated imported water sometime in the future. Once Repurified Water produced under Phase 1 becomes less expensive than th e cost of untreated imported water, the Parties agree that there will be revenue from the Pure Water Program.

6.6.2 Calculation. Revenue sharing shall occur in each fi scal year during which the annual cost per acre foot asso ciated with the production of Re purified Water is less than the cost of untreated water per acre foot from the San Diego County Water Authority (“CWA”). The annual cost difference shall be known as “ Repurified Water Revenue .” Repurified Water Revenue shall be determined as follows:

Annual cost per acre foot of CWA untre ated water purchased by the City for delivery at Miramar Reservoir (which shall be determined based on the total costs for water actually billed to the City by CWA for water delivered at Miramar Reservoir in a fiscal year, divided by the number of acre-feet of CWA water delivered at Miramar Reservoir that year)
less
Annual cost per acre-foot of City Wate r Utility PW Costs (which shall be determined based on total annual City Water Utility PW Costs divided by the number of acre-feet of Repurified Water actually produced in that year) the result of which is multiplied by
The number of acre feet of Repurified Water produced by Pure Water Program facilities during the applicable fiscal year.

Exhibit H, Summary of Billings from County Water Authority Showing Costs for Untreated Water, is a summary of the most recent CWA rate structure and cost allocations to the City of San Diego for untreated water. The Parties agree that Exhibit H shall be referred to by the Parties in the future in determining how cost s for water delivered at Miramar Reservoir are calculated. If no untreated water is delivered at Miramar Reservoir in a given year, then the closest point of delivery of untreated water to the City shall be used. The City shall annually update Exhibit H to reflect the most recent CWA rate stru cture and cost allocations to the City of San Diego.

The City shall estimate whether there will be Repurified Water Revenue in the upcoming fiscal year prior to January 15 of each year, and these amounts shall be incorporated into the budget estimates for the upcoming fiscal year to all Parties.

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System. Such Capital Improvement Cost contributions are currently estimated as 62% City’s Water Utility and 38% Metro System. The Metro System’s portion of the Repurified Water Revenue shall be applied to debt attributable to the Metro System first, until the debt attributable to the Metro System is fully paid.

Following full payment of debt attributable to the Metro System, Repurified Water Revenue shall be shared based on the relative ac tual Operation and Maintenance Costs for Pure Water Program facilities contributed by City’s Water Utility and the Metro System, calculated annually. Such Operation and Maintenance Costs are currently es timated as 76% City’s Water Utility and 24% Metro System on an annual basis.

In all instances referred to in this Section 6.6.3, the Metro System portion of the Repurified Water Revenue shall be allocated among the City and the Partic ipating Agencies consistent with Section 4.4.2.

6.6.4 Year-End Adjustment. At the end of each fiscal year during which there is Repurified Water Revenue, the City shall determine the actual cost per acre foot of CWA untreated water purchased by the City, the actual cost per acre foot of City Water Utility PW Costs, and the actual amount of Repurified Water produced at Pure Water Program facilities.

Based on the actual cost and production info rmation, the City will recalculate the Repurified Water Revenue for the prior fiscal year. The City will credit any future charges or bill for any additional amounts due the quarter after the prior year costs have been audited.

6.6.5 Change in Potable Reuse Method. The Parties acknowledge that the Pure Water Program Phase 1 will initial ly use indirect potable reuse surface water augmentation. The use of CWA untreated water costs in calculating Repurified Water Revenue is intended to provide an appropriate point of comparison to costs for producing Repurified Water that will be introduced into surface water. The Parties agree that if the City desires to implement direct potable reuse (in which Repurified Water would be introduced directly into a water supply pipeline or facility), the Parties shall meet and negotiate in good faith regarding an ame ndment to this Section 6.6, to appropriately update the formula for Repurified Water Revenue, which form of amendment shall occur via an Administrative Agreement and shall be subject to the Joint Administrative Approval Process set forth in Section 15.

6.7 Capital Expense Rate.

6.7.1 Background. The Point Loma Wastewater Treatment Plant operates under a National Pollutant Discharge Elimination System (“ NPDES”) permit modified under section 301(h) & (j)(5) of the Clean Water Act. If such modified permit were ever revoked or not renewed, the Parties agree that, und er current law, the City woul d have an obligation to upgrade the PLWTP to secondary treatment. The Parties fu rther agree that $1.8 b illion is a fair and comprehensive estimation of the costs that could be incurred by the Metro System to meet the legal requirements related to the Metro System u nder current law. The estimate of $1.8 billion is based on the net present value of the capital cost to develop 180 MGD of secondary treatment at PLWTP as of November 15, 2018.

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Therefore, the Parties agree that $1.8 billi on represents the maximum amount of Capital Improvement Costs that the Metr o System should be obligated to contribute to the Pure Water Program, the purpose of which is not solely the disposal of wastewater, but also the production of Repurified Water. The Parties agree that th is $1.8 billion maximum contribution should apply whether or not the PLWTP is actually upgraded to secondary treatment to meet legal requirements in the future because, as of the date of the Agreement, the Parties have the option of upgrading the PLWTP to full secondary treatment for the cost of approximately $1.8 billion.

In light of the above, the Parties have agreed that if Metro System costs related to the Pure Water Program exceed the $1.8 billion, City’s Water Utility will pay a charge for each acre foot of secondary treated effluent produced by Metro Syst em facilities and used for the production of Repurified Water.

6.7.2 Capital Expense Rate. Under the ci rcumstances described in this Section 6.7, City’s Water Utility shall pay a charge (“Capital Expense Rate”) for each acre-foot of secondary treated effluent produced by Metro System facilities and used for the production of Repurified Water. The Capital Expense Rate costs or revenues attributable to the Metro System shall be assessed or credited consistent with Section 4.4.2. City’s Water Utility shall pay the Capital Expense Rate if the following costs alone, or in combination, exceed $1.8 billion (which amount shall be adjusted for inflation):

6.7.2.1 The sum of all Capital Improveme nt Costs and associated debt attributable to the Metro System components of the Pure Water Program under this Section 6.7.2; and/or

6.7.2.2 The sum of all Capital Improvement Costs and associated debt for the full or partial upgrading of the PLWTP to secondary treatment.

Notwithstanding the above, the Capital Expens e Rate shall not apply if the PLWTP is actually upgraded to secondary tr eatment (or beyond) due to: (a) a change in federal or state statutory law making it necessary to upgrade th e PLWTP to comply with such new discharge standard; or (b) a final decision by a state or federal court or a federal administrative agency of competent jurisdiction that an NPDES permit modified under section 301(h) & G)(5) of the Clean Water Act is thereby revoked or denied renewal due to a finding that the discharge from the PLWTP violates anti-degradation rules or regulations promulgated under section 403 of the Clean Water Act.

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6.7.3 Calculation of Capital Expense Rate . The amount per acre-foot of the Capital Expense Rate shall be determined as follows:

The sum of all Capital Improvem ent Costs and associated debt attributable to (i) the Metro System components of the Pure Water Program under this Section 6 and (ii) upgrading of the PLWTP to secondary treatment (if any) less
$1.8 billion, as adjusted for inflation each July 1 (starting on July 1, 2019) to reflect the annual percentage change in the E ngineering News Records – Los Angeles construction cost index
the result of which is multiplied by

1.42 (which estimates the total interest on a 30-year State Revolving Fund loan with an interest rate of 2.5%)
the result of which is divided by
The total number of acre feet per year of secondary treated effluent that is expected to be produced by Metro Syst em facilities for the production of Repurified Water over a period of thirty (30) years.

The City shall estimate whether the Capital Expense Rate shall apply to the upcoming fiscal year (and its amount) prior to January 15 of each year, and the estimated amount of the Capital Expense Rate shall be effective on July 1 of the upcoming fiscal year.

For purposes of this Section 6.7.3, Capital Impr ovement Costs and associated debt shall include such costs and revenue incurred by the Metr o System prior to the effective date of the Agreement.

6.7.4 Year-End Adjustment. At the end of each fiscal year during which the Capital Expense Rate applies, the City shall determine the actual Capital Improvement Costs and associated debt attributable to the Metro System components of the Pure Water Program under this Section 6 and any upgrading of the PLWTP to s econdary treatment, and the actual amount of secondary treated effluent produced by Metro Syst em facilities and used for the production of Repurified Water.

Based on the actual cost, interest , and effluent inform ation, the City will recalculate the Capital Expense Rate for the prior fiscal year. The City will credit any future charges or bill for any additional amounts due the quarter after the prior year costs have been audited.

6.7.5 Duration; Expiration. The Capital Expense Rate shall continue until the cost difference between (a) the actual sum of Pure Water Program Capital Improvement Costs and associated debt attributable to the Metro System under Section 6.7 and/or the costs to upgrade the PLWTP and (b) $1.8 billion (as adjusted for infla tion), has been fully paid, or the Agreement expires, whichever is sooner. Notw ithstanding, it is the express inte nt and desire of the City and the Participating Agencies that if the Agreement expires before the cost difference has been paid

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through the Capital Expense Rate, that the Capital Expense Rate continue in any extension of this Agreement negotiated by the Parties pursuant to Section 14.2 until the cost difference has been fully paid.

6.8 Amending Pure Water Program Cost Allocation and Revenues – Phase 1. Except as otherwise provided in Section 6.6.2, the Partie s may amend any provisi on in this Section 6 regarding the Finance, Budgeti ng, and Accounting for the Pure Water Program Cost Allocation and Revenues for Phase 1 in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15.

7. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 2

7.1 Pure Water Program – Phase 2. The S econd Phase of the Pure Water Program (“Phase 2”) shall create up to an additional 53 MGD of Repurified Water at Phase 2 facilities. The Parties agree to incorporate a ll terms relating to Phase 2 in to this Agreement through an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15, subject to the requirements set forth in this Section 7 below.

7.2 Costs Excluded As Metro System Costs.

Costs Excluded from Metro System Costs for Phase 2 shall be identified in an Administrative Agreement subject to the Joint Administrative Approval Process and approvals set forth in Section 15. However, the Administrative Agreement must reflect that all of the following PWP Phase 2 costs, including Capital Improvement Costs, Operation and Maintenance Costs, and other related costs (including ad ministration, insurance, claims, and overhead) shall be excluded from Metro System Costs for the purposes of ca lculating the annual Phase 2 FAB rate, and shall be City Water Utility PW Costs:

7.2.1 Costs of the Phase 2 Water Repurifi cation System and any Metro System facilities to the extent constructed, modified, ex panded, or used for the pu rpose of treating water beyond secondary treatment (ocean discharge standard under current law). This shall include costs for preliminary treatment, primary treatment, and secondary treatment to the extent such costs are higher than they would otherwise be due to the production of Phase 2 Repurified Water.

7.2.2 Costs for fail-safe disposal, if necessary, for design capacity for Phase 2 Repurified Water, including, but not limited to, any costs associated w ith the reservation of capacity at the Point Loma Wastewater Treatment Plant.

7.2.3 Costs for the demolition or replacement of existing Metro System facilities with similar facilities for the purpose of making space available for Phase 2 Water Repurification System facilities. Such costs may take into accoun t the current asset value or market value of the existing Metro System facility.

7.2.4 Costs for the Phase 2 methanol feed system.

7.2.5 Costs for Phase 2 RSDP disposal including, but not limited to, pump stations, pipelines, retreatment, ocean outfall, and monitoring.

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7.2.6 50% of the costs for the MBR Tanks and system for Phase 2.

7.2.7 All membrane integrity monitoring systems for Phase 2.

7.2.8 All Phase 2 systems downstream of MBR’s.

7.3 Revenue Sharing for Repurified Water – Phase 2. Terms regarding revenue sharing for Repurified Water for Phase 2 shall be identified in an Administrative Agreement subject to the Joint Administrative Approval Pr ocess set forth in Section 15. However, this Administrative Agreement must reflect terms related to Phas e 2 revenue sharing for Repurified Water that conceptually mimic those terms set forth in S ection 6.6. The Metro Sy stem portion of the Repurified Water Revenue for Phas e 2 shall be allocated among th e City and the Participating Agencies consistent with Section 4.4.2, as may be amended or updated to account for changes in PWP Phase 2.

7.4 Capital Expense Rate – Phase 2. Terms re garding the Capital Expense Rate for Phase 2 shall be identified in an Administrativ e Agreement subject to the Joint Administrative Approval Process and approvals set forth in Section 15. However, this Administrative Agreement must reflect terms that conceptu ally mimic the terms in Secti on 6.7, reflecting a continuation of the Capital Expense Rate through Phase 2 up until the PWP achieves up to 83 MGD of Repurified Water, taking into account production of water suitable for potable reuse occurring at all treatment processes for wastewater upstream from and at the PLWTP. The Pure Water Program Capital Expense Rate costs or revenues attributable to the Metro System shall be assessed or credited consistently with Section 4.4.2, as may be amen ded or updated to account for changes in PWP Phase 2.

8. FUTURE NEGOTIATIONS AND COOPERATION
This Agreement specifically contemplates Phase 1 and Phase 2 of the Pure Water Program, which consists of new, expande d, or modified Metro System a nd Water Repurification System facilities projected to produce up to 83 million gall ons per day of Repurified Water. The Parties intend to meet and negotiate in good faith regard ing the referenced Admin istrative Agreements identified in this Agreement. All items outsid e the scope of the Joint Administrative Approval Process shall be negotiated by the Parties th rough the amendment processes described in Section 16.3, if necessary.

9. THE METRO COMMISSION

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to the Metro Commission/Metro JPA, and the Part icipating Agency’s appointee to the Metro Commission shall also serve as that Participating Agency’s representative on the Metro JPA Board of Directors. If a Participating Agency is a de pendent district whose governing body is that of another independent public agency , that Participating Agency sh all be represented on the Metro Commission/Metro JPA by a representative appointed by the governing body which shall have no more than one representative no matter how many Participating Agencies it governs. Each member has one vote in any matter considered by the Metro Commission/Metro JPA. The Metro Commission/Metro JPA shall establish its own meeting schedule and rules of conduct. The City may participate in the Metro Comm ission on an ex offici o, non-voting basis. To the extent this Agreement expands or amends the powers or purposes set forth in the Metro JPA Joint Exercise of Powers Agreement, the Participating Agencies e xpressly agree to such expansion or amendment consistent with the terms of this Agreement.

9.2 Advisory Responsibilities of Metro JPA.

9.2.1 The Metro JPA shall act as an advisory body to the Mayor and City Council on policy issues and matters affect ing and relating to the Metro Sy stem and shall be included in the City’s list of boards and commissions on the City’s website. The City shall present the position of the majority of the Metro JPA to the City’s governing body in written staff reports. The Metro JPA may prepare and submit materials in advance and may appear at any City hearings on Metro System matters and present its position to the governing body of the City.

9.2.2 The Metro JPA may advise the City of its position on any issue relevant to the Metro System.

9.3 Delegation of Decision-Making Authority of the Metro JPA. The Participating Agencies hereby delegate to the Metro JPA the authority to take certain actions pursuant to the approval processes provided in this Agreement, as permitted by law, including but not limited to Government Code 6506. The Participating Agen cies agree that the Metro JPA has delegated authority to approve Administrative Agreements on behalf of each Participating Agency pursuant to the process set forth in Section 15. The Participating Agencies agree and acknowledge that the Metro JPA has authority to bind each Participating Agency to Administrative Agreements through the Joint Administrative Approval Process. All Participating Agencies agree to promptly execute Administrative Agreements after approval by the Metro JPA. By signing this Agreement, each Participating Agency is expressly preapproving such actions.

9.4 Standing. If a dispute arises among the Parties relating to or arising from a Party’s obligation under this Agreement or an associated Administrative Agreement, the Metro JPA shall have standing to enforce the terms of this Agreement against the City on behalf of two or more Participating Agencies if a majority of the Metro JPA votes to take action relating to this Agreement on behalf of two or more Participating Agencies.

10. DISPUTE RESOLUTION
This Section governs all disput es arising out of this Ag reement and any associated Administrative Agreements.

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10.1 Mandatory Non-Binding Mediation. If a di spute arises among the Parties relating to or arising from a Party’s obl igations under this Agreement or an associated Administrative Agreement that cannot be reso lved through informal discussi ons and meetings, the Parties involved in the dispute sh all first endeavor to settle the di spute in an amicab le manner, using mandatory non-binding mediatio n under the rules of JAMS, AA A, or any other neutral organization agreed upon by the Parties before having recourse in a court of law. Mediation shall be commenced by sending a Notice of Demand for Medi ation to the other Party or Parties to the dispute. A copy of the notice sha ll be sent to the City, all othe r Participating Agencies, and the Metro JPA.

10.2 Selection of Mediator. A single mediator that is acceptable to the Parties involved in the dispute shall be used to mediate. The mediator will be knowledgeable in the subject matter of this Agreement, if possible, and chosen from lists furnished by JAMS, AAA, or any other agreed upon mediator.

10.3 Mediation Expenses. The expenses of witnesses for either side shall be paid by the Party producing such witnesses. All mediation costs, including required travel and other expenses of the mediator, and the cost of any expert advice produced at the direct request of the mediator, shall be Metro System costs.

10.4 Conduct of Mediation. Mediation hearings will be conducted in an informal manner. Discovery shall not be allowed. The discussions, statements, writings and admissions and any offers to compromise during the proceedings will be confidential to the proceedings (pursuant to California Evidence Code s ections 1115 - 1128 and 1152) and wi ll not be used for any other purpose unless otherwise agreed by the Parties in writing. The Parties may agree to exchange any information they deem necessary. The Parties invo lved in the dispute shall have representatives attend the mediation who are au thorized to settle the dispute, though a recommendation of settlement may be subject to th e approval of each agency’s board s or legislative bodies. Either Party may have attorneys, witnesses or experts present.

10.5 Mediation Results. Any resultant agreements from mediation shall be documented in writing. The results of the mediation shall not be final or binding unless otherwise agreed to in writing by the Parties. Mediators shall not be subject to any subpoena or liability and their actions shall not be subject to discovery.

10.6 Performance Required During Dispute. Nothing in this Section shall relieve the City and the Participating Agencies from performing their obligations under this Agreement. The City and the Participating Agencies shall be required to comply with this Agreement, including the performance of all disputed activity and disputed payments, pending the resolution of any dispute under this Agreement.

11. INSURANCE

11.1 City Shall Maintain All Required Insurance.

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may be provided through separate policies for th e Metro System, or by consolidating the Metro System with other City assets and operations for insurance purposes. If the Metro System is insured separately, policy limits, deductibles , and self-insured retentions sh all be equivalent to what the City procures for other similar C ity assets and operations. The C ity shall maintain all insurance required by law, including workers’ compensation insurance, and may self-insure for certain losses when allowed by law. The proportionate cost of insurance for the Metro System shall be included in the computation of the FAB.

11.1.2 If the Metro System is insured separately, any policy or policies of liability insurance carried by the City for the Metro Syst em shall name the Participating Agencies as additional insureds with evidence of same supplied to each upon request.

11.1.3 Upon request by the Metro JPA or a Participating Agency, the City shall promptly provide written coverage and policy information, including, but not limited to, the scope of coverage, policy limits, deducti bles, and self-insured retentions, including information on any claims made against the policies and remaining limits and deductibles.

11.2 Substantially Equivalent Coverage. In the event of a transfer of the Metro System to a nonpublic entity pursuant to Section 2.1, coverage substantially equivalent to all the above provisions shall be maintained by any successor in interest.

12. INTERRUPTION OF SERVICE
Should the Metro System services to the Participating Agencies be interrupted as a result of a major disaster, by operation of federal or state law, or other causes beyond the City’s control, the Participating Agencies shall continue all payments required under this Agreement during the period of interruption.

13. NOTICES REQUIRED UNDER AGREEMENT
The City and each Participating Agency shall give notice when required by this Agreement.

All notices required by this Agreement must be in writing and must be sent via email and either served personally or mailed via first class U.S. mail. The notices shall be sent to the officer listed for each Party, at the address and email address listed for each Party in Exhibit D, Notice Listing, in accordance with this Section. If a Party wishes to change the officer and/or address to which notices are given, the Party shall notify all other Parties in accordance with this Section. Upon such notice, the City shall amend Exhibit D to reflect the changes. The amendment shall be made within sixty (60) days after receipt of the Party’s notice regarding the change in officer and/or address.

The City shall keep an updated version of Exhi bit D, notated with th e most recent amendment date, on file with the City P ublic Utilities Department. The C ity shall provide a copy of the amended Exhibit D to all Parties by no later than sixty (60) days after amending Exhibit D.

14. EFFECTIVE DATE AND EXPIRATION

14.1 Effective Date. Once all Parties have executed this Agreement, this Agreement shall be considered effective on July 1, 2026 irrespective of the date on which the last executing party signs the Agreement.

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14.2 Expiration. Subject to the ri ghts and obligations set fo rth in Section 14.3, unless amended, replaced, or terminated earlier by mutual consent of all the Parties, this Agreement shall expire on June 30, 2065. This Agreement is subject to extension by agreement of the Parties. The Parties shall commence discussions on an agreemen t to provide wastewater treatment services beyond the year 2065 on or before December 31, 2055, or at such time, if any, that the PLWTP is required to be upgraded to secondary treatment. The Parties may create, amend or terminate any associated Administrative Agreements addressing implementation of this Agreement, as provided in this Agreement.

14.3 Contract Capacity Rights Survive Expiration. The Participating Agencies’ Contract Capacity rights and rights to obtain wastewater treatment services from the facilities referred to in, or constructed pursuant to this Agreement shall survive the expiration of the Agreement. Provided, however, for any Participating Agency to exercise such rights, the Participating Agency shall comply with all the following requirements: (a) provide at least six months’ written notice prior to the expiration of this Agreement; (b) upon expira tion of this Agreement, pay their proportional share of Metro System Costs according to the billing methodologies set forth in this Agreement in order to maintain their right(s) to such wastewater treatment services; and (c) agree to recalculate and pay proportional share of fu ture Metro System Costs based on the City’s and all remaining Participating Agencies’ proportionate shares. In the event this Agreement expires and one or more Participating Agency(ies) continue to pay their proportional share of all Metro System Costs, the City shall have the right to continue managing, operating, and expanding the Metro System subject to the same terms set forth in this Agreement, unless otherwise agreed to in writing by and between the City and a Participating Agency. In the event one or more Participating Agency(ies) exercise its/their right(s) to maintain Contract Capacity and wastewater treatment services, such Participating Agency(ies) shall also maintain the right to continue receiving any and all revenues contemplated by this Agreement, including, but not limited to, Metro System Revenues.

14.4 Abandonment. After June 30, 2065, the City may abandon operation of the Metro System upon delivery of notice to the Participating Agencies ten (10) years in advance of said abandonment. Upon notice by the City to abandon the Metro System, the Pa rties shall meet and confer over the nature and conditions of such abandonment. In the event the Parties cannot reach agreement, the matter shall be submitted to medi ation under Section 10. In the event of abandonment, the City shall retain ownership of all Metro System assets free of any claim of the Participating Agencies. Abandonment by the City with continued operation by a different entity shall not terminate or affect a C ontract Capacity rights of a Partic ipating Agency so long as that Participating Agency has continued to pay their proportional share of Capital Improvement Costs and Operation and Maintenance Costs according to the billing methodologies set forth in this Agreement. Nothing in this language shall be construed to require the City to continue as operator of the Metro System after the ten-year (10) notice period has run.

15. ADMINISTRATIVE AGREEMENTS

15.1 Use and Process for Administrative Agreements.

15.1.1 Purpose. Administrative Agreements are intended to implement the intent of the Parties in an efficient and effective manner without reopening or renegotiating the terms of this Agreement. Administrative Agreements are limited to addressing issues that are authorized by

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this Agreement. Administrative Agreements are separate and distinct from Exhibits to this Agreement, and are designed to address proced ural, operational, techni cal, and administrative issues. Terms in this Agreement may only be modified through the Joint Administrative Approval Process if this Agreement expressly authorizes the use of an Administrative Agreement.

15.1.2 Amendments, Supplements, or Successo rs to Administrative Agreements.

Where this Agreement refers to an Administrativ e Agreement, such reference shall include any amendment(s) to that Adminis trative Agreement or supplemental or successor Administrative Agreement(s).

15.1.3 Function. Administrative Agreements are made among all the Parties but deal with a specific function or group of like f unctions, for the benefit of regional wastewater treatment within the Metro System, or for the implementation of this Agreement.

15.1.4 Current Agreements. The Administrative Agreements which are approved and executed simultaneously with the execution of this Agreement are listed Exhibit I, List of Administrative Agreements . The City shall update Exhibit I each time an Administrative Agreement is approved, amended, revised or terminated pursuant to this Agreement.

15.1.5 Development and Joint Administrative Approval Process. Any Party can present an Administrative Agreement, or an am endment or supplement thereto, or termination thereof, to the City for approval by way of the Joint Administrative Approval Process set forth in this Section. The City will endeavor in good faith to respond within 60 days of submission of a proposed Administrative Agreement. If the City needs additional time to evaluate the proposed Administrative Agreement, it will advise all Partic ipating Agencies in writing of the anticipated review time. Once an Administrative Agreement re ceives City’s Administrative Approval, then, with respect to the Participating Agencies, the proposed Administrative Agreement may be presented to the Metro JPA at a duly noticed meeting for review and a first reading. Sixty (60) days or more after the first reading, after the Metro JPA Directors have had opportunity to consult with their respective agency staff and governing boards, the Admin istrative Agreement may be presented at a duly noticed meeting for a second reading and approved upon an affirmative vote by no less than two-thirds of the members of the Metro JPA during a duly noticed public meeting (in other words, upon the affirmativ e vote of at least eight or more of the twelve members of the Metro JPA, irrespective of how many Metro JPA Directors are present at the meeting, unless the number of Participating Agencies changes), except that any changes to (i) the FAB, including the Functional Design Methodology required to be approved by way of an Administrative Agreement under Section 5.2.1.3, (ii) how Repurified Water Reve nue is shared under Section 6.6, (iii) how the Capital Expense Rate is determined as set forth in Section 6.7; or (iv) how Pure Water Program Cost Allocation and Revenues for Phase 2 are cal culated under Section 7, shall require approval by no less than three-quarters of the members of the Metro JPA during a duly noticed public meeting (in other words, upon the affirmative vote of at least nine or more of the twelve members of the Metro JPA, irrespective of how many Metro JPA Director are present at the meeting, unless the number of Participating Agencies changes). If the second re ading does not o ccur within One Hundred and Twenty (120) days after the firs t reading, the proposed Ad ministrative Agreement shall no longer be taken into consideration, unless the City and the Metro JPA Directors agree to a different timeline. An Administrative Agreement, amendment thereto, or termination thereof, must receive City’s Administrative Approval and at least a two-third affirmative vote by the Metro JPA

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Directors before it can become ef fective. Administrative Agreem ents are binding contracts as against the City and all Participating Agencies, irrespective of whether or not any Participating Agency’s particular Metro JPA Director voted to approve the agreement or not, or was absent or abstained. The Metro JPA has the authority to bind the Participating Agencies to Administrative Agreements pursuant to the delegated authority provided to the Metro JPA in Section 9.3 herein.

16. GENERAL

16.1 Exhibits.

16.1.1 Exhibit List. This Agreement references Exhibits A through J. Each exhibit is attached to this Agreement and is incorporated herein by reference. All exhibits to this agreement shall be listed in Exhibit K, Exhibit List. The City shall update the Exhibit List from time to time each time an Exhibit is amended or revised pursuant to this Agreement.

16.2 Electronic Exhibits and Attachments. Acknowledgement and Acceptance: The Parties hereby acknowledge and agr ee that the exhibit( s) and attachment(s ) related to this Agreement, or any of its associated Administrative Agreements, indicated as an Electronic Exhibits above (collectively, the “ Electronic Exhibits”) may be in an electroni c format that cannot be readily or accurately co nverted into a physi cal or printed form. The Pa rties expressly agree that such Electronic Exhibits shall nonetheless be deem ed to be valid and enforceable attachments to this Agreement and shall be incorporated by reference as if fully set forth herein.

16.2.1 Identification and Access: All Electronic Exhibits shall bear the same Exhibit identifier and name (i.e., Exhibit A – Metro Facilities) set forth in the Exhibit List, and shall be clearly identified as an Electronic Exhibit in the Exhibit List, including a file name, a time stamp of file, and a note indicating the software used to open and view the file, including version.

The Electronic Exhibit shall be loaded on to a CD-ROM, DVD-ROM, or other electronic storage medium that is a write-once medium without the ability to further edit. Each Party shall receive an identical copy of the Electronic Exhibit(s) via id entical storage mediums. The City shall ensure that all Participating Agencies have full and un restricted access to Electronic Exhibits for the duration of the Agreement and any applicable rete ntion period thereafter, including by providing access to any necessary software, applications, or systems require d to view, interact with, or manipulate the Electronic Exhibits in their nativ e format; such as through website access via the GIS Online platform: https://sandiego.maps.arcgis.com. No interaction or manipulation of any Electronic Exhibit shall in any way constitute a bona fide change or amendment to the Electronic Exhibit.

16.2.2 Storage and Security: Each Party shall be responsible for securely storing and maintaining the integrity of the Electronic Exhibits in their posse ssion or control. This includes, but is not limited to, implementing and maintaining reasonable and appropriate technical, administrative, and physical safeguards to protect the confidentiality, availability, and integrity of the Electronic Exhibits, and to prevent unauthorized access, disclosure, alteration, or destruction thereof.

16.2.3 Authentication and Admissibility: The Parties hereby stipulate and agree that the Electronic Exhibits shall be deemed to be original documents and authentic for all purposes

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under applicable law, and that the Parties may rely upon and introduce such Electronic Exhibits as evidence in any proceeding arising out of or relating to this Agreement, without the need for further foundation, authentication, or certification.

16.2.4 Receipt and Completeness: Each Party hereby acknowledges and confirms that they have received, reviewed, and had a reasonable opportunity to inspect all Electronic Exhibits that are attached to and incorporated in to this Agreement as of the Effective Date. By executing this Agreement, each Party represents and warrants that, to the best of their knowledge, the Electronic Exhibits are complete, accurate, and free from material errors, omissions, or defects.

The Parties further agree to notify the other Party promptly upon discovering any discrepancies or inaccuracies in the Electronic Exhi bits, and to cooperate in good fa ith to resolve any such issues in a timely manner.

16.2.5 Amendments and Modifications to El ectronic Exhibits: Any amendments or modifications to the Electronic Exhibits shall be made in accordance with the procedures set forth in this Agreement for amending or modifying the terms and conditions hereof, and any such amended or modified Electronic Exhibits shall be deemed to replace and supersede any prior version thereof. Amended Electronic Exhibits sha ll also be loaded onto a new and separate CD- ROM, DVD-ROM, or other electr onic storage medium that is a write-once medium without the ability to further edit. Each Party shall receive identical copies of the Electronic Exhibits via identical storage mediums. Amended Electronic Exhibits shall bear identical Exhibit Identifiers as their predecessor exhibits, but with a different suffix (for example, Exhibit A, when amended, shall be identified as Exhibit A-1, a subsequent amendment shall be identified as Exhibit A-2, etc.).

16.3 Amendments to Agreement. There shall be four (4) ways to amend, modify, and/or change the terms set forth in this Agreement:

16.3.1 Amendments. Except as set fort h in Sections 16.3.2, 16.3.3, and 16.3.4, amendments to this Agreement requi re the approval of all Parties. Such amendments must be in writing and signed by a duly authorized repres entative from each Party. Unless specifically referenced as being subject to one of the approval mechanisms set forth in Sections 16.3.2, 16.3.3, or 16.3.4 below, any amendment, m odification, and/or changes to the terms of this Agreement must occur pursuant to this Section 16.3.1. This provision controls over all other provisions in this Agreement.

16.3.2 Joint Administrative Approval Process. As set forth in this Agreement, the Joint Administrative Approval Process requires the approval described in Section 15.1.5. The following actions may be taken subject to the Joint Administrative Approval Process:
(a) Agreements for New Contract Capacity as specifically set forth in Section 3.3
(b) Addition of new Metro Facilities or conversion of City facility to a Metro facility as specifically set forth in Section 4.2 (c) Changes to Exhibit E (Methodol ogy for Contract Capacity Transfers)

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(d) Revisions to FAB as specifically set forth in Section 5.2.1.3, except as provided therein
(e) Changes to Finance, Budgeting, and Accounting System of Charges as specifically set forth in Section 5.11
(f) Changes to Costs Excluded from Metro System Costs – Phase 1 as specifically set forth in Section 6.3
(g) Amending the formula for Repurified Water Revenue as specifically set forth in Section 6.6.2
(h) Changes to Finance, Budgeting, and Accounting for the Pure Water Program Cost Allocation and Revenues for Phas e 1 as specifically set forth in Section 6.8
(i) Certain terms relating to Phase 2 as specifically set forth in Section 7.1
(j) Changes to Costs Excluded from Metro System Costs – Phase 2 as specifically set forth in Section 7.2
(k) Terms regarding revenue sharing for Repurified Water for Phase 2 as specifically set forth in Section 7.3
(l) Terms regarding the Capital E xpense Rate for Phase 2 as specifically set forth in Section 7.4
(m) Creation, changes, amendments, modi fications to, or terminations of any Administrative Agreements as specifically set forth in Article 15.

16.3.3 Two-Party Approval. As set forth in this Agreement, Two-Party Approval requires the City’s Administrative Approval and a two-thirds (2/3) vote or greater of the Metro JPA Directors present at a duly noticed Metro JPA public meeting. The following actions may be taken subject to Two-Party Approval:
(a) Determinations regarding liability as specifically set forth in Section 2.5.5
(b) Contract Capacity Transfers – Decreases as specifically set forth in Section 4.4.3.2
(c) Changes to Strength measurements as specifically set forth in Section 4.5.2

16.3.4 City Administrative Approval. As set forth in this Agreement, the City’s Administrative Approval requires discussion, evaluation, and approval by the Director of the City

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of San Diego’s Public Utilities Department or thei r designee. The City may, in the City’s sole discretion, refer a decision subject to the City’s Administrative Approval to the City Council for a recommendation, approval, or other action. No action is required on the part of a Participating Agency. The following actions may be taken subject to the City’s Administrative Approval:
(a) Transfers of Contract Capacity as specifically set forth in Section 3.2
(b) Reductions in Metro System Capacity as specifically set forth in Section 3.4
(c) Amending Exhibit B as specifically set forth in Section 3.6 (d) Amending Exhibit A as specifically set forth in Section 4.2 (e) Contract Capacity Transfers – Increas es as specifically set forth in Section 4.4.3.1
(f) Changes to Exhibit F (Metro System Flow Formulas and Sampling Locations) as specifically set forth in Section 4.5.1
(g) Changes to FAB to include m easurements required by law as specifically set forth in Section 5.2.1.3
(h) Changes to Exhibit H if CWA ch anges their rate structure as specifically set forth in Section 6.6.2
(i) Changes to Exhibit D (Notice) as specifically set forth in Section 13.

16.4 Construction of Agreement.

16.4.1 Drafting of Agreement. It is ac knowledged that the City and the Participating Agencies, with the assistance of competent counsel, have participated in the drafting of this Agreement and that no ambiguity should be construed fo r or against the City or any Participating Agency on account of such drafting.

16.4.2 Entire Agreement. The City and each Participating Agency represent, warrant and agree that no promise or agreement not expressed herein has been made to them, that this Agreement contains the entire agreement between the Parties, that this Agreement supersedes any and all prior agreements or understandings between the Parties unless otherwise provided herein, and that the terms of this Agreement are contractual and not a mere recital; that in executing this Agreement, no Party is relying on any statement or representation made by the other Party, or the other Party’s representatives concerning the subject matter, basi s or effect of this Agreement other than as set forth herein; and that each Pa rty is relying solely on its own judgement and knowledge.

16.4.3 Agreement Binding on All; No Third-Party Beneficiaries. This Agreement shall be binding upon and shall inure to the benefi t of each of the Parties, and each of their

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respective successors, assigns, trustees or receivers. All the covenants contained in this Agreement are for the express benefit of each and all such Part ies. This Agreement is not intended to benefit any third parties, and any such third-party beneficiaries are expressly disclaimed.

16.4.4 Severability.

16.4.4.1 Should any provision of this Ag reement or any associated Administrative Agreement be held invalid or ille gal, such invalidity or illegality shall not invalidate the whole of the Agreement, but, rather, the Agreement shall be construed as if it did not contain the invalid or illegal part, and the rights and obligations of the Parties shall be construed and enforced accordingly except to the extent that enforcement of the Agreement without the invalidated provision would materially and adversely frustrate ei ther the City’s or a Participating Agency’s essential objectives set forth in this Agreement or the applicable Administrative Agreement.

16.4.4.2 Should a court determine that on e or more components of the allocation of costs set forth in this Agreement or any associated Administrative Agreement places the City or a Participating Agency in violation of Article XIII D, Section 6 of the California Constitution with respect to their ratepayers, such components shall no longer be of force or effect.

In such an event, the City and the Participating Agencies shall promptly meet to renegotiate the violative component of the cost allocation to comply with Ar ticle XIII D, Section 6 of the California Constitution, and use the dispute resoluti on process in Section 10 of this Agreement if an agreement cannot be reached through direct negotiation.

16.4.4.3 Should a state or federal agen cy provide a final, written determination that the method of allocating Pure Water Program Capital Improvement Costs under this Agreement violates the requirements of state or federal grants or loans which are, or will be, used to fund the wastewater components of th e Pure Water Program, such allocation method will no longer be of any force or effect. In such an event, the allocation of Repurified Water Revenue and the Capital Expense Rate will continue to be based on the Parties’ actual payments to fund the Pure Water Program Capital Improvement Costs a ttributable to the Metro System. The City and the Participating Agencies shall also promptly m eet to negotiate an alternative cost allocation method that would comply with such grant or loan funding requirements.

16.4.5 Choice of Law. This Agreement and any of its associated Administrative Agreements shall be construed and enforced pursuant to the laws of the State of California.

16.4.6 Recognition of San Diego Sanitation District as Successor to Certain Parties. The Parties hereby acknowledge and agree that the San Diego County Sanitation District is a Participating Agency under this Agreement as the successor in interest to the Alpine Sanitation District, East Otay Mesa Sewer Maintenance District, Lakeside Sanitation District, Spring Valley Sanitation District, and Winter Gardens Sewer Maintenance District.

16.5 Declarations Re: Agreement.

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further expressly declare and repr esent that they fully understand the content and effect of this Agreement and they approve and accept the terms and conditions contained herein, and that this Agreement is executed freely and voluntarily.

16.5.2 Warranty Regarding Obligation and Authority to Enter Into This Agreement. Each Party represents and warrants that its respective obligations herein are legal and binding obligations of such Party, that each Party is fully authorized to enter into this Agreement, and that the person signing this Agreement hereinafter for each Party has been duly authorized to sign this Agreement on behalf of said Party.

16.6 Right to Make Other Agreements. Nothing in this Agreement limits or restricts the right of the City or the Participating Agencies to make separa te agreements among themselves, including through joint powers agreements, without the need to amend this Agreement, provided that such agreements are consistent with this Agreement. Nothing in this Agreement or Section 6 limits or restricts the right of the City or the Participating Agencies to enter into separate agreements regarding the industrial pretreatment program, or for the purchase or sale of Repurified Water produced by the Water Repurification System, or sharing in City Water Utility PW Costs; however, such agreements shall not affect th e cost allocation and Metro System revenues delineated in Section 5.

16.7 Statute of Limitations to Resolve Billing Issues. Notwithstanding any longer statute of limitations in State law, if the City or a Participating Agency wishes to dispute a bill (including, but not limited to, an audited bill or an audit reconciliation) on the basis of an alleged overpayment or underpayment arising under this Agreement, the Party alleging the dispute must provide written notice regarding the disputed bill to all Parties to this Agreement promptly upon discovery of such a billing issue. The written notice shall invoke or reference this Section. The Parties agree that such refunds or collections shall not accrue for more than three (3) years from the date that such billing is received by the Participating Agency, or one (1) year from the date that an audited reconciliation is received by the Participating Agen cy, whichever date is later. The City and the Participating Agencies hereby waive any applicable statute of limitations available under State law that exceed the time frames set forth in this Section 16.7. Upon receipt of the written notice regarding the billing dispute, any Participating Agency wishing to participate in the resolution of the dispute shall be allowed to do so and to present evidence to all Parties in s upport of their position. The involved Parties’ de termination regarding the outco me of the billing dispute, including any related adjustments to each Participating Agency’s share of net Metro System costs or revenues resulting from the resolution of such billing issues , shall be final. Nothing in this section relieves a Participating Agency from its obliga tions to make timely payments under this Agreement irrespective of whether or not a bill is being disputed. If the Parties are unable to resolve a billing dispute, the Parties shall utilize the dispute resolution processes in this Agreement.

16.8 Counterparts and Electronic Signatures. This Agreement may be executed in counterparts. This Agreement shall become operative as soon as one counterpart hereof has been executed by each Party. The counterparts so executed shall constitute one Agreement notwithstanding that the signatures of all Parties do not appear on the same page. A faxed, .pdf, or other electronic copy of the fully executed original version of this Agreement shall have the same legal effect as an executed original for all purposes. Electronic signatures (including but not limited

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to signatures via DocuSign) shall be acceptable, enforceable, and shall have the same legal effect as an original signature.

16.9 Transparency. Upon request, the City sha ll promptly provide each Participating Agency with access to all records and information reflecting Flow and Strength of sewage in the Metro System, including, but not limited to, Flow data from all Metro System meters, worksheets or calculations that are used by City to develop cost informat ion for any costs contemplated by this Agreement, and any Strength or other data utilized by the City when calculating annual sewage Flow and/or other costs imposed pursuant to this Agreement (includi ng, but not limited to, pretreatment costs). The Parties shall work in good faith together to ensure the Participating Agencies have reasonable and full transparency under this Agreement.

16.10 Incorporation of Recitals. All of the recitals set forth in this Agreement, and all of the exhibits attached to this Ag reement, are by this reference inco rporated in and made a part of this Agreement as though fully set forth herein.

16.11 Joint Exercise of Power. It is the intent of the Parties that this Agreement is intended to exercise the governmental authority granted pursuant to Gov. Code Section 6500 et seq. which provides for the joint exercise of governmental powers.

IN WITNESS WHEREOF, the Parties have executed this Second Amendment and Restated Regional Wastewater Disposal Agreement and the associated Administrative Agreements(s) identified herein as of the date first set forth above.

CITY OF CHULA VISTA

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF CORONADO

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF DEL MAR

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF EL CAJON

Name:

Title:

Approved as to Form:

Name:

Title:

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CITY OF IMPERIAL BEACH

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF LA MESA

Name:

Title:

Approved as to Form:

Name:

Title:

LEMON GROVE SANITATION DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF NATIONAL CITY

Name:

Title:

Approved as to Form:

Name:

Title:

OTAY WATER DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

PADRE DAM MUNICIPAL WATER

DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF POWAY

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF SAN DIEGO

Name:

Title:

Approved as to Form:

Name:

Title:

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SAN DIEGO COUNTY SANITATION

DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

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EXHIBIT A

Metro Facilities (Electronic Exhibit); file name: 2025-10_Exhibit A Metro Facilities.aprx; time stamp of file: 10/23/2025 3:38 PM, software used to open and view file including version: ArcGIS Pro 3.5.0; included herewith as CD-ROM/DVD-ROM

Exhibit A: Listing of Metro Facilities as of 6/12/2026
Metro
Facilities (Electronic Exhibit);
file name: 2025-10_Exhibit A Metro Facilities.aprx
time stamp of file: 10/23/2025 3:38 PM
software used to open and view file including version:

ArcGIS P
ro 3.5.
1 The South Bay Land/Ocean Outfall is jointly owned by the International Boundary and Water Commission, U.S. Section (60.06%) and the City of San Diego (39.94%). The capacity of the City's portion of the outfall as of the date of this Agreement is 74 MGD average dry weather flow, of which the Metro System has a capacity right to 69.2 MGD and the City as an exclusive right to 4.8 MGD 2 Gravity pipeline connection between NCWRP and the North Metro Interceptor 3Included separately from rest of treatment plant to acknowledge role in sludge treatment process.

EXHIBIT A
METRO FACILITIES AS OF 6/12/2026

TREATMENT FACILITIES
Point Loma Facilities (PLWWTP)
• Advanced Primary Treatment Plant
• Ocean Outfall
• Access Road
• Power Generation Facility
North City
• Water Reclamation Plant (NCWRP)
South Bay
• Water Reclamation Plant (SBWRP)
• South Bay Land/Ocean Outfall1

SLUDGE TREATMENT CONVEYANCE FACILITIES
• Metro Biosolids Center (MBC)
• Point Loma Digesters3
• Digested Sludge Pipeline: Point Loma to MBC
• Raw sludge pipeline: NCWRP to MBC
• Centrate Pipeline: MBC to NCWRP
• Raw sludge pipeline: SBWRP to South Metro Interceptor

CONVEYANCE
• Pump Station 1
• Pump Station 1 Force Main
• Pump Station 2
1 The South Bay Land/Ocean Outfall is jointly owned by the International Boundary and Water Commission, U.S. Section (60.06%) and the City of San Diego (39.94%). The capacity of the City's portion of the outfall as of the date of this Agreement is 74 MGD average dry weather flow, of which the Metro System has a capacity right to 69.2 MGD and the City as an exclusive right to 4.8 MGD 2 Gravity pipeline connection between NCWRP and the North Metro Interceptor 3Included separately from rest of treatment plant to acknowledge role in sludge treatment process. • Pump Station 2 Force Mains
• Pump Station 2 Backup Power Generation Facility
• South Metro Interceptor
• North Metro Interceptor
• Grove Avenue Pump Station
• Grove Avenue Pump Station Force Main
• Rose Canyon Parallel Trunk Sewer 2
• Second Rose Canyon Trunk Sewer 2
• East Mission Bay Trunk Sewer 2
• Morena Blvd. Interceptor 2
• Metro System Meters (including 88 billing meters and 14 operational meters) • North City Tunnel Connector
• West Point Loma Interceptor

OTHER FACILITIES
• Environmental Monitoring and Technical Services Laboratory (95% Metro Ownership)
• Metro Operation Center aka MOC (17% Metro Ownership)
• Dairy Mart Road & Bridge

FUTURE METRO FACILITIES

Phase 1 Pure Water (Under Construction – Percent ownership will be assigned after audit) • Expand NCWRP
• Morena Pump Station
• Morena Pump Station Force Main
• Centrate/RSDP Line (From NCWRP to North Metro Interceptor) • East Mission Gorge / East County residuals line (Water, Muni, and Metro combined assets)
1 The South Bay Land/Ocean Outfall is jointly owned by the International Boundary and Water Commission, U.S. Section (60.06%) and the City of San Diego (39.94%). The capacity of the City's portion of the outfall as of the date of this Agreement is 74 MGD average dry weather flow, of which the Metro System has a capacity right to 69.2 MGD and the City as an exclusive right to 4.8 MGD 2 Gravity pipeline connection between NCWRP and the North Metro Interceptor 3Included separately from rest of treatment plant to acknowledge role in sludge treatment process.

Phase 2 Pure Water Planned
• Phase 2 Pure Water (TBD)
• Phase 2 Pure Water Centrate Line (TBD)
Reserved Rights- Other Future Facilities
The facilities listed in this category will potentially be required as part of the Metro System for hydraulic capacity, good engineering practices and/or compliance with applicable law, rules or regulations, including compliance with OPRA, and continuation and maintaining the City’s Waiver of applicable treatment standards at the Point Loma Wastewater Treatment Plant (“Waiver”).
• South Bay Secondary Treatment Plant (21-28 MGD)
• South Bay Secondary Sewers & Pump Station (Sweetwater River) • South Bay Sludge Processing Facility
• Wet Weather Storage Facilities
s
Ennnltas

CITY OF
DELMAR
Year Joined 1972
Ll J, ll1
LEGEND
* TREATMENT PLANTS
e METRO BILLING METERS
- METRO INTERCEPTORS
• METRO PUMP STATIONS - - FORCE MAINS
• • • SLUDGE LINES
• OTHER PUMP STATIONS - - METRO OUTFALL
R,1n-h•
S..1nL1 f
•

NORTH NORTH CITY
CITY AWP WATER REC .
• PLANT
1'f, •
•-., METRO 0
\.. •• BIOSOLIDS
• • •
••

CITY OF POWAY
Year Joined 1971

PADRE DAM

MUNICIPAL

WATER DISTRICT
Year Joined 1974
EAST

COUNTYAWP
*
Sc1ntee
•

A , A IA A

LAKESIDE/ALPINE
SD County Sanitation District
Year Joined 1974
* CENTER
East Mission Gorge PS
,·
.i
·" \ .
' .
\ . '· ·' I . •
• • • •

CITY OF LEMON
•
Year Joined 1963

CITY OF

NATIONAL CITY
Year Joined 1963
Pump Station 1
• lm1 11 f
•
GROVE
·,

CITY OF

IMPERIAL BEACH
Year Joined 1963
. '• •
• A SOUTH BAY
souiH WATER RECL
SOUTH BAY SAY LA~~ PLANT
OCEAN oUifA

CITY OF CHULA VISTA
Year Joined 1963
, OUTFALL __ - -- ✓----,: -~ SB INTL
} - -- - - - - _ . ..,,,,t=~ _"_ ~ WASTEWTR ~,erk-i.d
' ~ "~-r,1.,,,,,.- TREATMNT PLT J
FracJ Secc
Ja rd1nes
del Sol
/
Granp s L::i
Esperanza
\
163 m_
Flo res M.:196n

RING VALLEY
ty Sanitation District
ar Joined 1963

OTAYWATER

DISTRICT
Year Joined 1970

EAST OTAY MESA
SD County Sanitatio n District
Year Joined 2000
R1n:on Dorado
r r.xc Mariano
l\.bbmoros
Centro
----
--

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EXHIBIT B

DISTRIBUTION OF WASTEWATER SYSTEM CAPACITY RIGHTS

1 2 3 4 5 6 7
Average Flow2,
MGD
Incremental
Peak Flow3,
MGD
RSPD4, MGD
Total Allowable
Flow3,
MGD
TSS2,
1,000 lbs.

COD2,
1,000 lbs. Pure Water Phase 15

18.33 19.52 0 37.85 22,082 38,419 11.699%

1.90 3.03 0 4.93 2,089 3,336 1.152%

0.00 0.30 0 0.30 0 0 0.020%

1.79 3.48 0 5.27 1,915 3,336 1.096%

1.29 19.93 0.602 21.82 2,196 3,052 0.497%

2.47 4.48 0 6.95 2,045 3,844 1.411%

5.29 23.90 0 29.19 4,668 9,636 2.823%

0.07 1.67 0.310 2.05 238 293 0.153%

2.40 4.51 0 6.91 2,289 4,387 1.395%

4.65 3.07 0 7.72 4,562 9,161 2.852%

0.38 0.57 0 0.95 984 835 0.457%

0.44 6.54 0.364 7.34 632 890 0.444%

3.10 8.80 0 11.90 3,113 5,073 1.869%

5.74 5.05 0 10.79 6,039 10,597 3.765%

0.02 1.08 0.080 1.18 65 80 0.044%

47.9 105.9 1.356 155.1 52,916 92,938 29.677%
124.05 136.16 0 260.21 130,032 252,818 70.323%
0 0 14.3 0.00 0 0 0
124.1 136.2 14.3 260.2 130,032 252,818 70.323%
- 82 - 82 - - -
171.9 324.1 15.7 497.4 182,948 345,756 100%

2. Based on monthly average flow and strength.

3. Based on hourly average flow.

ANNUAL FIXED CAPACITY RIGHTS1

DISTRIBUTION OF WASTEWATER SYSTEM CAPACITY RIGHTS
Lakeside/Alpine
AGENCY
Chula Vista
Coronado
Del Mar
East Otay Mesa
El Cajon
Imperial Beach
La Mesa

SUBTOTAL
Lemon Grove
National City
Otay
Padre Dam
Poway
Spring Valley
Wintergardens

SUBTOTAL

5. Pure Water Phase 1 Capital Melded Percentages as established in Exhibit G of the "Amended and Restated Regional Wastewater Disposal Agreement Between the City of San Diego and the Participating Agencies in the Metropolitan Sewerage System" memorialized here only for use in billing Pure Water Phase 1 capital expenses. The following fractions were used to calculate the Melded Percentage (Based on 5 year average and not subject to change except by agreement of the parties.)

FLOW SS COD

0.482 0.257 0.243

4. Reject Stream from Demineralization Process

1. Currently based on 2050 projected flows and strengths.

EXHIBIT B
Metro I&I
San Diego
Wastewater
Water
TOTAL
7/18/2025
I I

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EXHIBIT C

ADMINISTRATIVE PROTOCOL ON ALLOCATION OF OPERATING RESERVES

AND DEBT SERVICE COVERAGE TO PARTICIPATING AGENCIES

METRO WASTEWATER JPA 276 Fourth Avenue Chula Vista, CA 91950 619-476-2557 April 19, 2010
Rod Greek
Public Utilities Deputy Director
City of San Diego, Metropolitan Wastewater
9192 Topaz Way
San Diego, CA 92123
Re: Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies
Dear Mr. Greek:

Ernest Ewin, Chairman
This letter is intended to memorialize the attached Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies ("Protocol") negotiated between the City of San Diego and Metro TAC/ Metro JPN Metro Commission, on behalf of the Participating Agencies under the Regional Wastewater Disposal Agreement. Your signature will indicate acceptance of the Protocol on behalf of the City.

By countersigning this letter, the City of San Diego and Metro TAC/ Metro JPN Metro Commission acknowledge and agree to the terms and conditions contained in the attached Protocol.

Sincerely,
ril!t:l!&1fi!jpAf i.fltormnission
Enclosure
The Protocol is accepted by the City of San Diego pursuant to the terms and conditions set forth in the attachment hereto:

Date: lf /29 /, 0
/ I 1
Rod Greek~ Utilities Deputy Director
The Protocol is accepted by Metro TAC/ Metro JPN Metro Commission on behalf of the Participating Agencies pursuant to the terms and conditions set forth in the attachment hereto:

Date: .!.7wh ~\,
The Joint Powers Authority Proactively Addressing Regional Wastewater Issues Chula Vista • Coronado • Del Mar • Imperial Beach • La Mesa • Lemon Grove Sanitation District National City• Olay Water District• Poway• Padre Dam Municipal Water District County of San Diego, representing East Olay, Lakeside/Alpine, Spring Valley & Winter Gardens Sanitation Districts Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies
BACKGROUND:

In early 2008 the MetroTAC formed a working group in response to the City of San Diego's request for $20 million in funding in FYE 2009 from the Participating Agencies ("PAs") for operating reserves and debt service coverage. The working group continued to meet with City of San Diego staff regarding the establishment of a mutually agreed upon protocol through early February 2010. A summary of the City of San Diego's 2008 proposal and the negotiated 2010 protocol is included as Attachment A.

At its regular meeting of February 17, 2010, the MetroTAC approved the following recommendations to move to the Finance Committee of the Metro Wastewater JPA and thereafter to the Metro Commission/ Metro Wastewater JPA for discussion and action:
• Proceed with PAs funding a 1.2 debt service ratio coverage • Proceed with PAs funding a 45 day operating reserves
• The PAs will fund no other reserves
• FY07 and FY08 refund monies will be used to fund the operating reserves • Interest accrual on operating reserves and undesignated accounts will start with FY10 (beginning on July 1, 2009)
The Finance Committee of the Metro Wastewater JPA, at its February 24, 2010 meeting, took action to recommend approval of the above, by the Metro Commission/ Metro Wastewater JPA. At its March 4, 2010 meeting, the Metro Commission/ Metro Wastewater JPA, comprised of representatives of the PAs, approved the components of the negotiated policy, with the understanding that any such policy would serve as an administrative protocol regarding the allocation of debt service coverage to the PAs and funding of operating reserves by the PAs.

PROTOCOL REGARDING PA FUNDING OF OPERATING RESERVES:

Background:

Operating reserves are established to provide funding for unforeseen events that might occur during the course of the fiscal year such as unforeseen major maintenance or capital projects. The PAs performed a survey of other regional wholesale agencies and determined that agencies such as the San Diego County Water Authority maintain a 45 day operating reserves. Although the City of San Diego's current policy is to increase operating reserves for its retail customers from 45 to 70 days, the City realizes that if a major maintenance incident should occur it can immediately request payment from the PAs per the Regional Wastewater Disposal Agreement. The City of San Diego's retail customer's rates cannot be immediately increased due to Proposition 218 requirements for noticing and public hearings.

Protocol:

Attachment Bis a summary of the funding strategy showing each PAs 2007 and 2008 refunds based on recent City Metro Wastewater Exhibit E audits . The refunds will be used to fund the PAs 45 day operating reserves contribution. In the majority of cases most PAs will see a refund even after they have Draft #2 - March 10, 2010
SDPUB\PDESOUSA\393171.1

Page 1 ends

fully funded their portion of the operating reserves. PAs that do not have adequate refunds will be billed for their portion of the reserve in the next quarterly 2010 billing . The operating reserves for each fiscal year will be established based on 45 days of operating revenues as determined by the following formula:

Fiscal Year Estimated Operating Expenses (not including CIP and debt service) 365 days X45 days
The number of days included in the calculation cannot be changed without prior consent of the PAs.

The operating reserves will be maintained by the City of San Diego and interest will accrue on a monthly basis based on actual interest rates on the City's investments. This interest revenue will be added to the PAs undesignated fund balance for that fiscal year. As part of each year's Exhibit E audit the actual required operating reserves and interest earned on it will be determined and audited by the City of San Diego's external auditors and PA representatives. A summary of the operating reserves balance and interest earned for each PA will be included as a footnote or attachment to the City Metro Wastewater Exhibit E Audit .

PROTOCOL REGARDING ALLOCA TIQN OF DEBT SERVICE COVERAGE TO PAs Background:

A 1.2 debt service coverage ratio is a requirement for all of the outstanding Metro parity debt. A cash flow prepared by the City of San Diego shows (Attachment C) that if the PAs are billed at the current level ($65 million annually to cover the PAs portion of operations, pay-go capital, and debt service expense) for the next three to five years that this requirement can be achieved without additional contributions by the PAs. This provides the PAs a stable projected annual Metro contribution for the next three to five years.

Protocol:

The PAs will maintain through annual contributions and use of PA undesignated fund balance a positive cash flow not to exceed 1.2 times the PA share of the required annual debt service on Metro Debt. The debt service coverage ratio of 1.2 cannot be changed without prior consent of the PAs.

The undesignated fund balance will be maintained by the City of San Diego and interest will accrue on a monthly basis based on actual interest rates on the City's investments. This interest revenue will be added to the PAs undesignated fund balance for that fiscal year.

As part of each year's Exhibit E audit the actual required reserve coverage and interest earned on the undesignated fund balance will be determined and audited by the City of San Diego's external auditors and PA representatives. A summary of the debt service coverage requirement and portion of interest earned on the undesignated fund balance for each PA will be included as a footnote or attachment to the City Metro Wastewater Exhibit E Audit.

If the cash flow in any year does not provide the required 1.2 debt service coverage the PAs will be billed the additional required revenue including interest.

Draft #2 - March 10, 2010
SDPUB\PDESOUSA\393171.1

Page 2 ends

Draft
Scheclulo of -pallna As•nc, Co-'>ul!ON to Ope...ttons Reserve and o.bt Servi<• Cov•raae Cash fl- fY 2007-2011 Prepand on: F«bruary ll, 2010
HOW TO READ CASH ROW SPREADSHEET:

Blue font a data Inputted directly Into spreadsheet
Green font= data ln,pQrted from iiOOthe.t $pre.iidsheet tn workbook 811cll font• ~n; sae lqond to dotarmlne cakulatlon
-
Unel tnh-'-"' Lesond
1 current Projected -ua Slnam Input
1 Annual ~ Afte< Exhibit E Audit Input
3 T.......,, (to}/fN>mOpe.-1 Reserve line 21~riorYHr
4 Undalcn-<i F- Balanoo lntorest Line 17 X lnt_,.st Rll<I 5 Operattnc 11,,_ lnlffat Clloulated Off-line
6 Gloss PA System Re-.nue Sum(Unel:LlneS)
7 IAU:
•
PAEstlmatedTobll)pernlnc t.pense Prlorye ■tXl. 01
9 10 Not PA Syotem llewenue Un16 · lin1 B
11 12 PA Annllll Debt Senl<a Paymont Calculatod Off-Une 13 OP Pay Go - • ot Projected OP lni,ut
14 Total CIP - Debt - Lin• 12+ 13
15 16 Not lnoame after CP ■ nd Debt - Line 10 · 14
17 PA Uncltlllft•ted Fund-nc.t! Line 16 + Prior Yeu
u
19 Calculated D■bt Service Ratio line 10/Une 12
10 Foot·
-·
(1)
(11
(3)
(4)
(5)
11 a.--a-145 dlyol fU"" 8/365 days) X 45 djs
Footnotu , -

AUINTED
f'I07
- --
- $54,007,596
$54,007,596
$32,304,298
$21 703,198
$20,373, 393
(4,417,5021
15,955,1191
$5,747,407
$5,747,407
(1) averaip of cutrent yea,, tndlrc bllanc:• + prior yHrendq b•l•ncal times 3.2'4 (Zl ..,..._ monthly balance times lAJF "'t• (flrst yeor oakulated al half yoar lnlerost) 131 FY09 b•sed on....,,_ of FYrn & F'/08 than 1% Inflation (41 10% of pn,joctad Metro CIP
(51 Mln,mum cove~ requirement 1,2 thn• annua• Metro debt siervf,;e F'IOI FY09 mo
-- --
$63,231,038 $57,249,960 $64,487,-408
i l1Y!Jti431ll . (4,281,432}
79,990
164,514
$63,231,038 $57,249,960 $52,241,049
$37,150,042 $34,727,170 $34,727,170
$26,080,996 $22,522,790 $17,513,879
$19,850,05 I $20,441,069 $24,049 ,989
(512,512) 1,318,048
19,337,539 20,441,069 25,368,037
$6,743,457 s2,oa1 ,n1 ($7,854,157)
$12,490,864 $14,572,S&S $6,718,428

0.73 $4,281,431
mp 9PalUnc kacolJ! cak.;
PA Operatln1 Expenses: $34,727,170
dMdod by: 365
Equals: $95,143
Tlmes:
45 day Operatlnl RI....,. :
45 $4,281,432

PIIOJECTEO
FYU FY12 FYU fY14 FY15
~- -- -- --
$65,000,000 $65,000,000 $65,000,000 $65,000,000 $65,000,000 (1,500,000) (3,000,000) (2,500,000) (2,100,000) (1,800,000) (42,814) (43,242) (43,675] (44,112) (44,553)
258,156 2:Z.S,608 113,282 62,579 58,899
166,159 167,821 169,499 171,194 172,906
$63,881.500 $62,350,187 $62,739,106 $63,089,661 $63,387,25 2 $35,074442 $354:Z.S 186 $35 779 438 $36,137 232 $36,498,605 $28,807,059 $16,925,001 $26,959,668 $26,952,429 $26,888,647 $.14,043,880 $22,479,039 $22,478,266 $22,478,075 $22,478,730 5,610,210 7,369,218 5,800,940 4,570,129 4,655,009
29,654,090 29,848,257 28,279,206 27,048,204 27,133,739
($847,0321 ($2,923,257) ($1,319,537) ($95,775) ($245,0921 $5,871.396 $2,948,139 $1,628,602 $1,532,827 $1,287,735

1.20 1.20 1.20 1.20 1,10
$4,324,246 $4,367,489 $4,4U,164 $4,455,175 $4,49!1,121
mo APc1111o1 6Acm lgtgra& c.Jc;
PA ooe,.tlrc EJ<pen.es: $4,281.432
Tlmos av. monthly LAIF Interest llote : 0.038425 (,..,.. ftom 3.18" to 4.53" per monthl FYlO htlmoted interest Earned: S164,514
r
Agency

CHULA VISTA

CORONADO
DELMAR

EL CAJON

IMPERIAL BEACH

LA MESA

LAKESIDE/ ALPINE

LEMON GROVE

NATIONAL CITY
OTAY

PADRE DAM
POWAY

SPRING VALLEY

WINTERGARDENS
TOTAL
March 23, 2010
FY07-FY08 Operating Reserve Rate Stabilizat ion
Based on 2008 Flows
FINAL

EXHIBIT E AUDIT ADJUSTMENTS I
FY 2007 FY 2008 TOTAL 2008 FLOWS
&LOADS
($1,837,010) ($2,100,751) ($3,937,761) 28.083%
($189,910) {$366,858) ($556,768) 3.356%
($87,785) ($103,913) ($191,698) 1.029%
($290,369) $66,888 ($223,481) 15.270%
($132,300) ($130,153) ($262,453) 3.652%
($99,793) ($40,190) ($139,983) 8.842%
($293,313) ($243,206) ($536,519) 5.357%
($147,034) ($195,043) ($342,077) 3.611%
($637,379) ($947,043) ($1,584,422) 7.572%
$123,792 ($138,545) ($14,753) 0.459%
($789,976) ($1,752,218) ($2,542,194) 5.198%
($683,251) $130,168 ($553,083) 5.770%
($611,093) ($667,539) ($1,278 ,632) 10.316%
($71,984) ($56,162) ($128,146) 1.482%
($5,747,405) ($6,544,565) ($12,291,970) 100%
-2008 FLOWS & LOADS

OPERATING NET

RESERVE -
$1,202 ,374 ($2,735,387)
$143,693 {$413,075)
$44,061 ($147,637)
$653,789 $430,308
$156,373 ($106,080)
$378,561 $238,578
$229,368 ($307,151)
$154,615 ($187 ,462)
$324,211 ($1,260,211)
$19,668 $4,915
$222,537 ($2,319,657)
$247,021 ($306,062)
$441,691 ($836,941)
$63,470 ($64,676J
$4,281,432 $ (8,010,538.00)

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EXHIBIT D

NOTICE LISTING

4914-3650-2326

EXHIBIT D

NOTICE LISTING
Maria Kachadoorian
City Manager
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91919
Phone: (619) 691 5031
mkachadoorian@chulavista
ca.gov
Tin
a Friend
City Manager
City of Coronado
1825 Strand Way
Coronado, CA 92113
Phone: (619) 522-7335
[email protected]
As
hley Jones
City Manager
City of Del Mar
1050 Camino Del Mar
Del Mar, CA 92014
Phone: 755-9313 ext. 25
[email protected]
Gr
aham Mitchell
City Manager
City of El Cajon
200 Civic Center Way
El Cajon CA 92020
Phone: (619) 441-1716
[email protected]
Ty
ler Foltz
Greg Humora
City Manager
City of La Mesa
8130 Allison Avenue
La Mesa, CA 91942
Phone: (619) 667-1101
[email protected]
Lydi
a Romero
City Manager
City of Lemon Grove
3232 Main Street
Lemon Grove, CA 91945
Phone: (619) 464-6934
[email protected]
Sc
ott Huth
Acting City Manager
City of National City
1243 National City Blvd.

National City, CA 91950
Phone: (619) 336-4240
[email protected]
Ch
ris Hazeltine
City Manager
City of Poway
13325 Civic Center Drive
Poway, CA 92064
Phone: (858) 679-4200
[email protected]
Ma
yor Todd Gloria
Chief Operating Officer
City of San Diego
202 "C" Street
San Diego, CA 92101
Phone: (619) 236-5949
[email protected]
Ebon
y Shelton
Chief Administrative Officer County
of San Diego
1600 Pacific Highway, Rm. 209
San Diego, CA 92101
Phone: (619) 531-5250
[email protected]
Jose
Martinez
General Manager
Otay Water District
2554 Sweetwater Springs Blvd.

Spring Valley, CA 91977
Phone: (619) 670-2210
[email protected]
Kyl
e Swanson
CEO/General Manager
Padre Dam Municipal Water
District
9300 Fanita Pkwy
Santee, CA 92071
Phone: (619) 258-4673
[email protected]
City Manager
City of Imperial Beach
825 Imperial Beach Blvd.

Imperial Beach, CA 91932
Phone: (619) 423-8300 ext. 7
[email protected]

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EXHIBIT E

METHODOLOGY FOR CONTRACT CAPACITY TRANSFERS

Last Updated: 5/29/2025

EXHIBIT E

METHODOLOGY FOR CONTRACT CAPACITY TRANSFERS

The following exhibit describes the methodology for transferring contract capacities from the Metro Pooled Capacity (summarized in the table below) to a Party’s contract capacity defined in Exhibit B.

POOLED CAPACITY
Average Flow,
mgd
Incremental Peak1,
mgd
TSS,
1,000 lbs.

COD,
1,000 lbs.

After Phase 1 Pure Water 0 102 96,820 27,521
After Phase 2 Pure Water 10 20 96,820 27,521

1. At Point Loma WWTP

2. Assume system storage

If a transfer of contract capacity is initiated as set forth in Section 4.4.3.1, capacity will be taken from the Pool ed Capacity and added to the Party in need of additional capacity. Thereafter, the above table of Pool ed Capacity will be updated with the subject column reduced, and Exhibit B will be updated with the subject Party’s contract capacity correspondingly increased.

In lieu of transferring average flow capacity from the Pool ed Capacity to a Party, the Party can choose to transfer Incremental Peak Flow Capacity to Average Flow Capacity keeping Total Allowable Flow the same, assuming the Party would still have sufficient Total Allowable Flow Capacity for their peak flows.

If a transfer of contract capacity as set forth in Section 4.4.3.2, the reverse shall occur and the subject Party’s contract capacity will be reduced in Exhibit B and the Pooled increased.

In lieu of transferring average flow capacity to the Pool ed Capacity from a Party, the Party can choose to transfer Average Flow Capacity to Incremental Peak Flow Capacity keeping Total Last Updated: 5/29/2025
Allowable Flow the same, if they anticipate needing their current Total Allowable Flow for their peak flows.

The remainder of this Exhibit has examples of how these transfers would be performed and the estimated effect on a Party’s share of Metro System Costs under the FAB Billing System. Please note Metro System costs will change from time to time as well as Contract Capacities per Exhibit B, so the following are only examples and not meant to be exact. These examples are based on Exhibit B as of the signing of this agreement, not necessarily the last revision of this exhibit. These examples are currently based on FY24 unaudited costs and estimated FY27 billing units.

AVERAGE FLOW EXAMPLE - 5% INCREASE IN CONTRACT CAPACITY FROM POOLED CAPACITY If the City of Chula Vista needed a 5% Increase in Average Flow Contract Capacity from the Pooled Capacity, then Exhibit B Contract Capac ity would be updated as follows

DISTRIBUTION OF WASTEWA TER SYSTEM CAPACITY RIGHTS

AN UAL FIXED CAPACITY RIGHTS
AGENCY I 2 3 4 s 6
Average I ncrcmcntal Total Allowable TSS, COD, Flow, Peak Flow, RSPD, MGD Flow, 1,000 lbs. 1,000 lbs. MGD MGD MGD Chula Vista (Old) 18.33 19.52 0 37.85 22,082 38,419
Chula Vista (New) 19.25 19.52 0 38.77 22,082 38,419
If the City of Chula Vista needed a 5% Increase in Contract Capacity, then Chula Vista's costs increase -4%. All other agencies' costs would decrease proportionally.

OWNERSHIP USE TOTAL AGENCY OLD NEW
Average I ncremcntal RSDP, TSS, COD, Metered RSDP, TSS, COD, %of AGENCY Flow, Peak Flow, MGD 1,000 lbs. 1,000 Flow, MGD 1,000 lbs. 1,000 lbs. TOTAL Total MGD MGD lbs. MGD Chula Vista $ 28.346,743 s 29.467,877
Corona do $ 2,351,663 $ 2,340,482
Chula Vista $2,910 ,602 $1 ,330,563 $0 $2,040,479 $527,94 1 SI 1,035.399 $0 $7,560 ,599 $2,94 1,160 $28,346,743 11.1% (Old) Del Mar $ 20,447 $ 20,405
East Otav Mesa $ 1,072,840 $ 1,069,001
Chula Vista $3.04 1,025 $1,327,783 $0 $2,040,479 $527,94 1 S 12.028.890 $0 $7,560,599 $2,94 1,160 $29,467,877 11.6% (New) El Caion $ 3,311,325 $ 3,300,158
Imperial Beach $ 3,397,789 $ 3,379,514
La Mesa $ 8,545,592 $ 8,504,174
Lakeside/ Alpine $ 305,946 $ 304,943
Lemon Grove $ 3,041,920 $ 3,026,888
National Cirv $ 6,275,512 $ 6,243,265
Otay $ 946,6 16 $ 943,355
Padre Dam $ 750, 193 $ 748,140
Poway $ 4,347,435 $ 4,326,388
Spring Valley $ 7,182,725 $ 7,147,1 14
Wintergardens $ 135,844 $ 135,453
SUBTOTAL $ 70,032,590 $ 70,957,155
San Diel!o
SD Wastewater $ 182,904,588 $ 181,993,097
SD Water $ 1,457,146 $ 1,444,072
SU BTOTAL $ 184,361,734 $ 183,437, 169
Regional Sludge $ - $ -
TOTAL $ 254,394,325 $ 254,394,325
Last Updated: 5/29/2025
AVERAGE FLOW EXAMPLE - 5% INCREASE IN CONTRACT CAPACITY FROM INCREMETNAL PEAK lftbe City of Chula Vista needed a 5% Increase in Average Flow Contract Capacity from their Incremental Peak, then Exhibit B Contract Capacity would be updated as follows

DISTRIBUTION OF WASTEWATER SYSTEM CAPACITY RIGHTS

ANNUAL FIXED CAPACITY RIGHTS
AGENCY I 2 3 4 s 6
Average Incremental Total Allowable TSS, COD, Flow, Peak Flow, RSPD, MGD Flow, 1,000 lbs. 1,000 lbs. MGD MGD MGD Chula Vista (Old) 18.33 19.52 0 37.85 22,082 38,419
Chula Vista (New) 19.25 18.61 0 37.85 22,082 38,419
lftbe City of Chula Vista needed a 5% Increase in Contract Capacity, then Chula Vista's costs increase - 3.8%. All other agencies' costs would decrease proportionall y.

OWNERSHIP lJSE TOTAL AGENCY OLD NEW
Average Increment al RSDP, TSS, COD, Metered RSDP, TSS, COD, %of AGENCY Flow, Peak Flow, MGD 1,000 lbs. 1,000 Flow, MGD 1,000 lbs. 1,000 lbs. TOTAL Total MGD MGD lbs. MGD Chula Vista $ 28,346,743 s 29.4 11.586
Coronado $ 2,35 1,663 $ 2,341,152
Chula Vista $2,910,602 $ 1,330,563 $0 $2,040,479 $527,941 S 11 ,035,399 $0 $7,560,599 $2,941,160 $28,346,743 11.1% (Old) Del Mar $ 20,447 $ 20,449
East Otay Mesa $ 1,072,840 $ 1,069,587
Chula Vista $3.041 .423 $1,268,493 $0 $2,040,479 $527,941 S 12,03 1.492 $0 $7,560,599 (New) $2,941 ,160 $29,411,586 11.6% El Cajon $ 3,311,325 $ 3,303,299 Impe rial Beach $ 3,397,789 $ 3,380,539
La Mesa $ 8,545,592 $ 8,508,472
Lakeside/ Alpine $ 305,946 $ 305,226
Lemon Grove $ 3,041,920 $ 3,027,850
National City $ 6,275,512 $ 6,244,378
Otay $ 946,616 $ 943,505
Padre Dam $ 750,193 $ 749,149
Poway $ 4,347,435 $ 4,328,094
Soring Valley $ 7,182,725 $ 7,148,584
Wintergarde ns $ 135,844 $ 135,622
SUBTOTAL $ 70,032,590 $ 70,917,492
San Diee:o
SD Wastewater $ 182,904,588 $ 182,03 1,622
SD Water $ 1,457,146 $ 1,445,211
SUBTOTAL $ 184,361,734 $ 183,476,833
Regional Sludge $ - $ -
TOTAL $ 254,394,325 $ 254,394,325
Last Updated: 5/29/2025
INCREMENTAL PEAK FLOW EXAMPLE - 5% INCREASE IN CONTRA CT CAPACITY FROM POOL ED CAPACITY If the City of Chula Vista needed a 5% Increase in Incremental Peak Contract Capacity from the Pooled Capacity, then Exhibit B Contrac t Capacity would be updated as follows

DISTRIBUTION OF WASTEWA TER SYSTEM CAPACITY RIGHTS

AN UAL FIXED CAPA CITY RIGHTS
AGENCY I 2 3 4 s 6
Averag e Incremental Total Allowable TSS, COD, Flow, Peak Flow, RSPD, MGD Flow, 1,000 lbs. 1,000 lbs. MGD MGD MGD Cbula Vista (Old) 18.33 19.52 0 37.85 22,082 38,419
Chula Vista (New) 18.33 20.50 0 38.83 22,082 38,4 19
ff the City of Chula Vista needed a 5% Increase in Contract Capacity, then Chula Vista's costs increase -0.2%. All other agencies' costs would decrease proportionally.

OWNERSHIP USE TOTAL AGENCY OLD NEW
Average Incremental RSDP, TSS, COD, Metered RSDP, TSS, COD, % of AGENCY Flow, Peak Flow, MGD 1,000 lbs. 1,000 Flow, MGD 1,000 lbs. 1,000 lbs. TOTAL Total MGD MGD lbs. MGD Chula Vista $ 28,346,743 s 28,407,227
Coronado $ 2,35 1,663 $ 2,350,944
Chula Vista $2,910,602 $1,330,563 $0 $2,040,479 $527,941 $11,035,399 $0 $7,560,59 9 $2,941,160 $28,346,743 11.1% (Old) Del Mar $ 20,447 $ 20,400
East Otay Mesa $ 1,072,840 $ 1,072,211
Chula Vista $2,9 10,196 $1.394.000 $0 $2,040,479 $527,941 $11,032,852 $0 $7,560,5 99 (New) $2,941 ,160 $28,407,227 11.2% El Cajon $ 3,311,325 $ 3,307,956 Imperial Beach $ 3,397,789 $ 3,396,688
La Mesa $ 8,545,592 $ 8,540,979
Lakeside/ Alp ine $ 305,946 $ 305,642
Lemon Grove $ 3,041,920 $ 3,040,886
National City $ 6,275,512 $ 6,274,315
Otay $ 946,6 16 $ 946,455
Padre Dam $ 750, 193 $ 749,111
Poway $ 4,347,435 $ 4,345,604
Soring Valley $ 7,182,725 $ 7,181,144
Wintergardens $ 135,844 $ 135,662
SU BTOTAL $ 70,032,590 $ 70,075,225
San Die1m
SD Wastewater $ 182,904,588 $ 182,863,179
SD Water $ 1,457,146 $ 1,455,920
SU BTOTAL $ 184,36 1,734 $ 184,319,099
Regional Sludge $ - $ -
TOTAL $ 254,394,325 $ 254,394,325
Last Updated: 5/29/2025
RSDP EXAMPLE ~ 5% INCREASE IN CONTRACT CAPACITY
If the City of El Cajon needed a 5% Increase in RSDP Contract Capacity, then Exhibit B Contract Capacity would be updated as follows

DISTRIBUTION OF WASTEWATER SYSTEM CAPACITY RIGHTS

AN UAL FIXED CAPACITY RIGHTS
AGENCY I 2 3 4 s 6
Average I ncrcmcntal Total Allowable TSS, COD, Flow, Peak Flow, RSPD, MGD Flow, 1,000 lbs. 1,000 lbs. MGD MGD MGD El Cajon (Old) 1.29 19.93 0.602 2 1.82 2,196 3,052
El Cajon (New) 1.29 19.93 0.632 2 1.85 2,196 3,052
If the City of Chula El Cajon needed a 5% Increase in Contrac t Capacity, then Chula Vista' s costs increase - 2.1 %. All other agencies' costs would decrease proportionally.

OWNERSHIP USE TOTAL AGENCY OLD NEW
Average Incremental RSDP, TSS, COD, Metered RSDP, TSS, COD, %of AGENCY Flow, Peak Flow, MGD 1,000 lbs. 1,000 Flow, MGD 1,000 lbs. 1,000 lbs. TOTAL Total MGD MGD lbs. MGD Chula Vista $ 28,346,743 $ 28,339,437
Coronado $ 2,351,663 $ 2,35 1,013
El Cajon $204,838 $1,358,378 $6.5 17 $202.924 $4 1,940 $625,109 $65,117 $6 16,086 $190,415 $3,311,325 1.3% (Old) Del Mar $ 20,447 $ 20,432
East Otav Mesa $ 1,072,840 $ 1,072,562
E Cajon $204,837 $1,357,377 $6,841 $202,924 $41,940 $624,752 $34,67 1 $6 16,086 $190,415 $3,382,124 1.3% (New) El Cajon $ 3,311,325 s 3,382,124
Imperial Beach $ 3,397,789 $ 3,396,719
La Mesa $ 8,545,592 $ 8,542,569
Lakeside/ Alpine $ 305,946 $ 305,784
Lemon Grove $ 3,041,920 $ 3,041,021
National Citv $ 6,275,512 $ 6,273,843
Otay $ 946,616 $ 946,432
Padre Dam $ 750,193 $ 749,779
Poway $ 4,347,435 $ 4,346,059
Spring Valley $ 7,182,725 $ 7,180,836
Wintergardens $ 135,844 $ 135,768
SU BTOTA L $ 70,032,590 $ 70,084,378
San Diel!o
SD Wastewa ter $ 182,904,588 $ 182,854,978
SD Water $ 1,457,146 $ 1,454,969
SU BTOTAL $ 184,361,734 $ 184,309,947
Regional Sludge $ - $ -
TOTAL $ 254,394,325 $ 254,394,325
Last Updated: 5/29/2025
TOTAL SUSPENDED SOLIDS EXAMPLE - 5% INCREASE IN CONTRACT CAPACITY FROM POOLED CAPACITY If the City of Chula Vista needed a 5% Increase in TSS Contract Capacity from the Pooled Capacity, then Exhibit B Contract Capacity would be updated as follows

DISTRIBUTION OF WASTEWATER SYSTEM CAPACITY RIGHTS

AN UAL FIXED CAPACITY RIGHTS
AGENCY I 2 3 4 s 6
Average I ncrcmcntal Total Allowable TSS, COD, Flow, Peak Flow, RSPD, MGD Flow, 1,000 lbs. 1,000 lbs. MGD MGD MGD Chula Vista (Old) 18.33 19.52 0 37.85 22.082 38,419
Chula Vista (New) 19.25 19.52 0 38.77 23.186 38,419
If the City of Chula Vista needed a 5% Increase in Contrac t Capacity, then Chula Vista's costs increase -2.6%. All other agencies' costs would decrease proportionally.

OWNERSHIP USE TOTAL AGENCY OLD NEW
Average I ncremcntal RSDP, TSS, COD, Metered RSDP, TSS, COD, %of AGENCY Flow, Peak Flow, MGD 1,000 lbs. 1,000 Flow, MGD 1,000 lbs. 1,000 lbs. TOTAL Total MGD MGD lbs. MGD Chula Vista $ 28.346,743 s 29,099,869
Corona do $ 2,351,663 $ 2,343,749
Chula Vista $2,910 ,602 $1 ,330,563 $0 $2.040,479 $527,941 $11,035,399 $0 $7,560,5 99 $2,94 1,160 $28,346,743 11.1% (Old) Del Mar $ 20,447 $ 20,447
East Otav Mesa $ 1,072,840 $ 1,070,428
Chula Vista $2,910 ,602 $1,330,563 $0 $2.129,678 $527,941 $11,035,399 $0 $8,224,526 $2,94 1,160 $29,099,869 11.4% (New) El Caion $ 3,311,325 $ 3,302,439
Imperial Beach $ 3,397,789 $ 3,388,031
La Mesa $ 8,545,592 $ 8,523,126
Lakeside/ Alpine $ 305,946 $ 305,003
Lemon Grove $ 3,041,920 $ 3,032,733
National Citv $ 6,275,512 $ 6,254,625
Otay $ 946,6 16 $ 941,107
Padre Dam $ 750, 193 $ 749,005
Poway $ 4,347,435 $ 4,334,133
Spring Valley $ 7,182,725 $ 7,158,161
Wintergardens $ 135,844 $ 135,517
SUBTOTAL $ 70,032,590 $ 70,658,374
San Diel!o
SD Wastewater $ 182,904,588 $ 182,278,804
SD Water $ 1,457,146 $ 1,457,146
SU BTOTAL $ 184,361,734 $ 183,735,95 1
Regional Sludge $ -
TOTA L $ 254,394,325 $ 254,394,325
Last Updated: 5/29/2025
TOTAL CHEMICAL OXYGEN DEMAND EXAMPLE - 5% INCREASE IN CONTRACT CAPACITY FROM POOLED CAPACITY If the City of Chula Vista needed a 5% Increase in COD Contract Capacity from the Pooled Capacity, then Exhibit B Contract Capacity would be updated as follows

DISTRIBUTION OF WASTEWATER SYSTEM CAPACITY RIGHTS

AN UAL FIXED CAPACITY RIGHTS
AGENCY I 2 3 4 s 6
Average I ncrcmcntal Total Allowable TSS, COD, Flow, Peak Flow, RSPD, MGD Flow, 1,000 lbs. 1,000 lbs. MGD MGD MGD Chula Vista (Old) 18.33 19.52 0 37.85 22,082 38.419
Chula Vista (New) 19.25 19.52 0 38.77 22,082 40,339
If the City of Chula Vista needed a 5% Increase in Contract Capacity, then Chula Vista's costs increase - I%. All other agencies' costs would decrease proportionally.

OWNERSHIP USE TOTAL AGENCY OLD NEW
Average I ncremcntal RSDP, TSS, COD, Metered RSDP, TSS, COD, %of AGENCY Flow, Peak Flow, MGD 1,000 lbs. 1,000 Flow, MGD 1,000 lbs. 1,000 lbs. TOTAL Total MGD MGD lbs. MGD Chula Vista $ 28.346,743 $ 28,631,524
Coronado $ 2,351,663 $ 2,349,193
Chula Vista $2,910,602 $1 ,330,563 $0 $2,040,479 $527,941 $11,035,399 $0 $7,560,599 $2.941, 160 $28,346,743 11.1% (Old) Del Mar $ 20,447 $ 20,447
East Otav Mesa $ 1,072,840 $ 1,072,103
Chula Vista $2,910,602 $1,330,563 $0 $2,040,479 $551,269 $11,035,399 $0 $7,560,599 $3,202,612 $28,631,524 11.3% (New) El Caion $ 3,311,325 $ 3,308,915
Imperial Beach $ 3,397,789 $ 3,394,165
La Mesa $ 8,545,592 $ 8,536,429
Lakeside/ Alpine $ 305,946 $ 305,720
Lemon Grove $ 3,041,920 $ 3,038,467
National Citv $ 6,275,512 $ 6,267,241
Otay $ 946,616 $ 945,687
Padre Dam $ 750,193 $ 749,916
Poway $ 4,347,435 $ 4,343,173
Spring Valley $ 7,182,725 $ 7,174,270
Wintergardens $ 135,844 $ 135,764
SUBTOTAL $ 70,032,590 $ 70,273,015
San Diel!o
SD Wastewater $ 182,904,588 $ 182,664,163
SD Water $ 1,457,146 $ 1,457,146
SUBTOTAL $ 184,361,734 $ 184,121,309
Regional Sludge $ - $ -
TOTAL $ 254,394,325 $ 254,394,325
Last Updated: 5/29/2025

- 54 -
6-12-26
4932-3639-7490

EXHIBIT F

METRO SYSTEM FLOW FORMULAS AND SAMPLING LOCATIONS

EXHIBIT F –

METRO SYSTEM FLOW FORMULAS AND

SAMPLING LOCATIONS
JULY 2025
LEGEND
Billing and Sampling Meters
Billing Meters
Municipal Meter
0 0
0 CHULA VISTA

Hollister
& Main
Meter
CV1
“J” ST
Meter
CV2
“G” ST
Meter
CV3
Autopark
&
Crossings
(0.025
mgd)
Waterpark &
Amphitheater
(0.031 mgd)
Lagoon
Drive
(0.011
mgd)
Bay Blvd
North
(106
EDUs)
Bay Blvd
South
(16
EDUs)
Gunpowder
Point
(51 EDUs)
Acacia
Ave
SV to CV
(4 EDUs)
Combined
Housecounts
(1,040
EDUs)
E. Flower
Street
Meter
CV5
Plaza
Bonita-1
Meter
CV6M
Plaza
Bonita-2
Meter
CV7M
Las Flores
Dr
Meter
CV8
N. Fifth
Ave
Meter
CV9
Acacia
Ave
Meter
CV10
Otay
Lakes
Road
Meter
CV11
Proctor
Valley
Meter
CV12
Main
Street
Meter
CV14
CHULA
VISTA
TOTAL
+ __ + - + +
+ = + + _ + _ + _
+ + + +

CORONADO

Trans-Bay
Meter C1M
Amphibious
Base
Meter C2
North Island
Meter C3

CORONADO
TOTAL
- - --

DEL MAR

Meter DM2
Riviera Del
Mar
(110 EDUs)
Connection
#1
(96 EDUs)
Connection
#2
(21 EDUs)
Del Mar
Estates
(27 EDUs)

DEL MAR
TOTAL
- +
+ - --

EAST OTAY MESA

EOM1 Meter East Otay Mesa
(55.4 EDUs)

EAST OTAY

MESA TOTAL
+ --

EL CAJON

El Cajon Meter
EC1B
To LM Meter
LM4
To LM
(321.5 EDUs)
Winter Gardens
Meter WG1M
Winter Gardens
(1,383 EDUs)

EL CAJON
TOTAL
+
- - --

IMPERIAL BEACH

9th & Imp.

Meter IB1
Elder St.

Meter IB2M
Palm Ave.

Meter IB3M2
Georgia Street
(170.5 EDUs)
Palm Avenue
(29.5 EDUs)

IMPERIAL
BEACH
TOTAL
+ +
+ - --

LA MESA

La Mesa
North
LM3
Meter
Colorado
(16
EDUs)
73rd &
Sar.
(22
EDUs)
Alvarado
Trtmnt
Plant
(61 EDUs)
Alvarado
Lab
(27
EDUs)
Alvarado
Training
Ctr.
(2 EDUs)
Blue
Lake
(69
EDUs)
East
Lake
(349
EDUs)
Jackson
(279
EDUs)
Keeny
(28
EDUs)
Lake
Arago
(292.7
EDUs)
Lake
Murray
(119.8
EDUs)
La Mesa
South
LM1AM
Meter
LM7
Meter
68th &
Univ
(91
EDUs)
67th &
Valencia
(158.5
EDUs)
Rosefield
(20
EDUs)
Alamo
(4 EDUs)
Vigo
(204
EDUs)
69th &
University
(34 EDUs)
70th &
Colony
(551.5
EDUs)
73rd & El
Cajon
(15.6
EDUs)
To SV
(52
EDUs)
To SV
LM2
Meter
To SV
LM5A
Meter
To SV
LM8
Meter
To LG
(921.7
EDUs)
From EC
LM4
Meter
From EC
(311
EDUs)
LA
MESA
TOTAL
+
- -
- -
+ +
- -
+ +
-
-
+
+
+
-
-
-
+
+
+
-
-
-
+
-
+
--

LAKESIDE/ALPINE

Meter
LS2

LAKESIDE
ALPINE

TOTAL--

LEMON GROVE

Winnett &
Oriole St
LG1M
Meter
Akins &
69th
LG2M
Meter
Imperial &
Viewcrest
LG4
Meter
Total
Lemon
Grove to
SV
(1547.63
EDUs)
Net from
La Mesa
(921.7
EDUs)
69th &
Madera
LG3
Meter
Madera
(4 EDUs)
Calvacado
(121
EDUs)
69th &
Klauber
(3 EDUs)
Gold Lake
(48 EDUs)
Angelus
Avenue
(12 EDUs)
69th &
Evelyn
(4 EDUs)
College
Avenue
(498.6
EDUs)
Navy
Housing
(278 EDUs)
College
Grove
(25.6 EDUs)
69th &
Gibson
(3 EDUs)
College
Grove Way
(161 EDUs)
LEMON
GROVE
TOTAL
+ + +
I I
+ + + +
- - -
- - --

NATIONAL CITY

33rd St
NC2
Meter
21st &
Hoover
NC3A
Meter
2262
Hoover
NC3B
Meter
West of
I5
NC3C
Meter
22nd &
Hoover
NC Yard
& HC
(2 EDUs)
7th &
Wilson
NC5
Meter
Nordica
NC7M
Meter
Stockman
NC15
Meter
Southland
Ind. Park
(76.5
EDUs)
Rachael
Ave.

North
(46
EDUs)
Olive
Avenue
(6
EDUs)
Bonita
Paradise
(47
EDUs)
Rachel
Ave.

South
(43
EDUs)
NC to SV
Inter-Agency
Compromise
(36 EDUs)
Plaza
Bonita
NC8M
Meter
Sweetwater
Road
(52.72%)
NC13
Meter
Prospect
St
(39.16%)
NC16
Meter)
SV to NC I-A
Compromise
(144 EDUs)
Harbor
Drive
NC6
Meter
Delta St.

NC9M
Meter
Paradise
Val
NC10
Meter
Olive
Ave.

NC11
Meter
18th &
Rachael
NC12
Meter
Dalbergia
(26.3
EDUs)
Nordica
(36
EDUs)
Bryanview
(16 EDUs)
Lorenz
(42
EDUs)
Mariposa
(18
EDUs)
Ebbs
(291
EDUs)
Delta St
(100.5
EDUs)
Navy
Sports
Center
(7 EDUs)

NATIONAL
CITY
TOTAL
+
+
-
+
+
+
-
-
-
+
+
+
-
-
-
+
+
-
-
-
-
+
+
-
-
-
--
+
+
-
-
NA VY

Amphibious Base
Meter (C2)
North Island
Meter (C3) NAVY TOTAL
+ --
OTAY

Otay Net OTAY

TOTAL--

PADRE DAM

Padre Dam
Meter PD1B
Lakeside
Meter LS2
Simeon Dr.
(413 EDUs)
Padre Dam
Meter PD2
Cowles Mtn.
(270 EDUs)
Treviso
(186 EDUs)

PADRE DAM
TOTAL
+
--
POWAY

Springhurst
PO2
Meter
La
Manda
(53
EDUs)
Camino
Del Norte
PO1
Meter
Holland
Canyon
PO3M
Meter
Eastview
Ct.

PO4
Meter
Highland
Ranch
PO5
Meter
Creek
Road
PO6
Meter
Springhurst
Street
(72 EDUs)
Stone
Canyon
(727.14
EDUs)
POWAY
TOTAL
+

SPRING V ALLEY

SubTotal Chula Vista to SV = Combined Housecounts – Acacia Ave + CV5 + CV6 + CV7M + CV8 + CV9 + CV10 + CV11 + CV12 + CV14
Brisbane
& 5th
SV8M
Meter
Lincoln
Acres/Alta
Drive
(84.4
EDUs)
Sweetwater
(52.72%)
NC13
Meter
Prospect
St
(39.16%)
NC16
Meter
SV to NC
Inter-Agency
Compromise
(144 EDUs)
NC to SV
Inter-Agency
Compromise
(36 EDUs)
From
NC
NC8M
Meter
SubTotal
Chula
Vista to
SV
To SV
LM2
Meter
To SV
LM5A
Meter
To SV
LM8
Meter
SubTotal
La Mesa
to SV
(52
EDUs)
SubTotal
Lemon
Grove to
SV
(1,547.63
EDUs)
Bonita
BO1
Meter
Manzana
Way
(439
EDUs)
Parkbrook
Street
(197
EDUs)
Noeline
Avenue
(109
EDUs)
Worthington
Street
(64 EDUs)
Innsdale
Avenue
(51
EDUs)
Greenridge
Avenue
(10 EDUs)
Ellenwood
Circle
North
(9 EDUs)
Delrose
Avenue
(109
EDUs)
Crestmore
Avenue
(8 EDUs)
Potrero
Street
(61
EDUs)
Carlsbad
Street
(41
EDUs)
Otay Net
SPRING

V ALLEY
TOTAL
+ + + + -
- - - - - -
- - - - - -
- -
- -

WINTER GARDENS

Winter Gardens
Meter (WG1M)
WG House Count
1,383 EDUs
WINTER

GARDENS
TOTAL
+ --

CITY OF SAN DIEGO

SD33
Meter
N. Harbor
Drive
(2,550.4
EDUs)
SD1E
Meter
SD2A
Meter
SD2B
Meter
Sports
Area
Blvd.
(498
EDUs)
SD3
Meter
Barnett
Avenue
(2551.6
EDUs)
SD5M
Meter
SD20
Meter
SD40M2
Meter
SD42M
Meter
SD7B
Meter
SD8
Meter
Commercial
Street
(1,458.6
EDUs)
SD12
Meter
SD6M
Meter
Del Mar
Net
Poway
Net
SD1B
Meter
EC1B
Meter
Padre
Dam Net
Lakeside
Net
LM
North to
San
Diego
Net
SD19
Meter
Anna
Street
(564
EDUs)
SD7A
Meter
SD7C
Meter
Coronado
Net
Beach
Street
(1,944.2
EDUs)
SD9
Meter
LG to
San
Diego
Net
LM
South to
San
Diego
Net)
SD9D
Meter
NC7M
Meter
NC9M
Meter
+
+
+
+
+
+
+
+
-
+
+
+
-
+
-
+
+
+
-
+
+
+
+
+
-
-
-
+
+
-
-
+
+
CITY OF SAN DIEGO (Continued)

NC10
Meter
NC11
Meter
Olive
Ave.
(6
EDUs)
NC12
Meter
Rachael
Ave.

North
(46
EDUs)
NC6
Meter
San
Diego
HC
Through
NC Total
BO1
Meter
NC15
Meter
Bonita
Paradise
(47
EDUs)
Rachael
Ave.

South
(43 EDUs)
Alta
Drive
(84.4
EDUs)
San Diego
HC
Through
SPV Total
SD10
Meter
Waterpark &
Amphitheater
Autopark &
Crossings
PC1
Meter
IB2M
Meter
Georgia
Street
(170.5
EDUs)
Palm
Avenue
(29.5
EDUs)
IB3M2
Meter
SB1
Meter
SD11
Meter
SD11A
Meter
SD18
Meter
Small SD
House
Count
(694.3
EDUs)
Elm
Street
(1,455
EDUs)
USN4
Meter
USN5
Meter
USN8
Meter
USN11
Meter
SAN
DIEGO
TOTAL
-
+
+
+
+
+
+
+
+
+
+
+
+
+

- 55 -
6-12-26
4932-3639-7490

EXHIBIT G

SAMPLE OF INTEREST CALCULATION

Exhibit G - Sample of the Interest Calculation (Section 6.6) P
urpose: To document assumptions used to account for the time value of money for shared Pure Water costs (Allocated Shared Costs) that we re a greed to be reconciled at a later date based on final Phase 1 project costs.

This is discussed in Section 6.6: Reallocation of PWP Costs incurred since FY2014 and cited in Section 6.6.1.3. See the example" Calculator Spreadsheet" below and accompanying footnotes. .

C D E F G H I J K L M
50/ 50 Expenses from
That Year
Original
Metro Split
%
Original Water
Split %
Original
Metro Share
Original
Water Share
Metro Post
Allocation
Share
Amounts Subject
to Interest
(50% Cost - Metro
Share%)
Running Metro
Balance Subject to
Interest
(New Activity + Prior
Year Balance + Prior
Interest Earning)
Yearly Interest
Earnings
(Compounded
Monthly)
Estimated PA
share
( Average share of
Interest Earnings)
Annual Interest
Rate
(San Diego City
Treasurers)
FY 2014 $630,109 50% 50% $315,055 $315,055 $283,549 $31,505 $31,505.46 $138.27 $41.48 0.438% FY 2015 $2,476,617 50% 50% $1,238,309 $1,238,309 $1,114,478 $123,831 $155,474.59 $871.33 $261.40 0.559% FY 2016 $4,503,182 50% 50% $2,251,591 $2,251,591 $2,026,432 $225,159 $381,505.03 $2,971.03 $891.31 0.776% FY 2017 $7,398,893 50% 50% $3,699,447 $3,699,447 $3,329,502 $369,945 $754,420.72 $8,150.10 $2,445.03 1.075% FY 2018 $6,194,711 50% 50% $3,097,355 $3,097,355 $2,787,620 $309,736 $1,072,306.36 $14,783.19 $4,434.96 1.370% FY 2019 $7,844,738 50% 50% $3,922,369 $3,922,369 $3,530,132 $392,237 $1,479,326.46 $31,230.90 $9,369.27 2.091% FY 2020 $8,018,735 50% 50% $4,009,367 $4,009,367 $3,608,431 $400,937 $1,911,494.09 $43,708.61 $13,112.58 2.263% FY 2021 50% 50% $0 $0 $0 $0 $1,955,202.70 $29,649.45 $8,894.84 1.506% FY 2022 50% 50% $1,984,852.16 $16,257.11 $4,877.13 0.816% FY 2023 32% 68% $2,001,109.26 $35,993.15 $10,797.94 1.784% FY 2024 32% 68% $2,037,102.41 $59,323.71 $17,797.11 2.874% FY 2025 32% 68% TBD
FY 2026 32% 68% TBD
FY 2027 32% 68% TBD
Total
s $37,066,985 $18,533,
493 $18,533,493 $16,680,143 $1,853,349 $13,764,299 $243,077 $72,923 N/A Pending Final Audits:

Estimated Final Metro % of Pure Water Costs (Draft) 45% Estimated JPA % Share of Metro Expenses (Draft) 30%
Exhibit G - Sample of the Interest Calculation (Section 6.6) (Continued) P
rocedures and Assumptions:

The City proposes the following procedures be used to allocate these costs. These costs will be allocated 1 year after substantial completion of Pure Water Phase 1, as part of the annual Audit of Metro costs (Projected to be annual audit of metro activity for Fiscal Year 2026). The City will prepare a yearly update to the calculator as part of the preparation for the yearly metro audit.

Col
umn Description:

Cost Included (Column C) This column represents cost subject to this calculator. This includes Purchase Orders (and their associated expenditures) that have been split 50%/50% (50/50 POs) from 2014 to 2022 and have been included as part of each yearly audit of Metro JPA Pure Water costs. This sheet is prepared by the City and reviewed by the JPA's consultants on a yearly basis to determine samples for the Pure Water O&M costs. After awarding of all Pure Water construction contracts, new costs will use an updated percentage based on actual awarded construction contracts. This date will be called out on the purchase order sheet and a new line on the calculator will be added to track the change in percent allocation.

Open purchase orders using the 50/50 split will be separated on the calculator sheet until they are fully spent, closed or amended to the new split.

Original Splits % (Column D & E) These columns split the total costs of the 50/50 POs based on their original share between the water and Metro funds. This establishes each funds initial share of the costs Original Share (Column F & G) These columns split the total costs in Column C by the percentages in Columns D and E.

Metro Post Allocation Share(Column H) This column uses Metro funds final share of Phase 1 costs, as a percentage of total project costs, and applies it to costs included in Column C. This represents the actual share of costs based on the final allocation costs.

Amounts Subject to Interest (Column I) This column takes the difference between the initial splits for Metro (Column F) and the Metro post allocation share (Column H). These are the new expenditures from that fiscal year subject to the interest calculation.

Running Metro Balance Subject to This column takes any prior year balance in Column J, the prior year accrued interest in Column K and adds the new expenditures from Column I. This is the total balanced Interest (Column J) used to calculate each year's interest owed.

Yearly Interest Earnings (Column K) This column takes the annual interest earnings shown in Column M and assumed monthly compounding of Metro balance in Column J. Compounding period is consistent with the City's monthly interest earnings paid on City funds.

Estimated PA share (Column L) This column estimates the portion of interest earnings that is expected to be credited to the Participating Agencies. Individual Agencies will be credited during the audit following one year after the substantial completion of Pure Water Phase 1. Agencies will be credited at weighted average of costs from 2014 to one year after substantial completion of Phase 1, based on the PA's individual annual percent share of Metro costs.

Annual Interest Rate (Column M) This column shows the annual percent returns on funds invested by the City Treasurer. This is based on the Treasurers annual return on investments as invested under the City's investment policy. This is the rate used to calculate yearly interest owed.

Notes This calculator was designed to account for the time value of money related to (50/50 POs). If additional Phase 1item (CIP expenses, Revenue, etc.) need to account for the time value of money, the assumptions used in Columns I-K will remaining consistent in those calculations. Columns C through H and the associated percentages used will be adapted to fit the types of costs being allocated.

- 56 -
6-12-26
4932-3639-7490

EXHIBIT H

SUMMARY OF BILLINGS FROM COUNTY WATER AUTHORITY SHOWING COSTS

FOR UNTREATED WATER

Fixed Charges Total ($)
CWA Customer Service Charge $ 933,611.00
CWA Emergency Storage Charge $ 2,197,725.00
CWA Infrastructure Access Charge $ 1,760,089.00
CWA Supply Reliability Charge $ 1,504,825.00
Supply Charges Volume (AF) Rate ($/AF) Total ($)
CWA Forced Delivery - Untreated 231.3 $ 1,200.00 $ 277,560.00 CWA Regular Meter Delivery - Treated 2,069.2 $ 1,600.00 $ 3,310,720.00 CWA Regular Meter Delivery - Untreated 12,973.7 $ 1,200.00 $ 15,568,440.00 Subtotal 15,274.2 $ 19,156,720.00
CYTD Volume (AF)
46,134.1
17,627.4
129,500.4
193,261.9
Net Deliveries Current Month Volume (AF) Adjustment Volume (AF) CYTD Volume (AF)
Tier 1 Total Treated Water Delivered 2,081.1 17,964.3
Tier 1 Total Untreated Water Delivered 7,970.5 96,706.3 Tier 1 Usage 10,051.6 114,670.6
Water Exchanges Volume (AF) Rate($/AF) Total ($)
CWA Total To Other Agencies Untreated Water (5,285.0) $ 1,200.00 ($ 6,342,000.00) CWA Total From Other Agencies Treated Water 11.9 $ 1,600.00 $ 19,040.00 CWA Total From Other Agencies Untreated Water 50.5 $ 1,200.00 $ 60,600.00 Subtotal (5,222.6) ($ 6,262,360.00)
CYTD Volume (AF)
(79,483.9)
336.9
473.1
(78,673.9)
Subtotal 10,051.6 $ 1,899,752.40
Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Summary
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 1 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
Sample Bill from the County Water
Authority for all city of San Diego
Water purchases for the month of
December 2024 to provide clarity for
any sewer only providers. Additional
documentation will be provided at a
later date walking from this bill to the
purified water calculation
The City of
SAN DIEGO.])
/J. San Diego County
(W Water Authority
Fixed Charges Total ($)
MWD Capacity Reservation Charge $ 287,980.00
MWD Readiness-to-Serve Charge $ 406,779.00
Subtotal $ 7,091,009.00
Current Balance $ 21,885,121.40
Previous Balance $ 17,919,593.50
Total Due And Payable $ 39,804,714.90
REMIT TO:

SAN DIEGO COUNTY WATER AUTHORITY
4677 Overland Avenue
San Diego, CA 92123-1233
Payment is due on the last business day of the month and shall be delinquent if not received in investable funds by 2 p.m. of the tenth business day of the following month.

Delinquency charges are 1% of the total amount if paid within five business days of the delinquency, 2% thereafter. Reference San Diego County Water Authority Ordinance No. 2007-03 Revenue Collection Policy for a complete explanation of billing and payment for water deliveries.

Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Summary
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 2 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
Variable Charges Volume (AF) Rate($/AF) Total ($)
Transportation Charge - Meter Delivery 15,274.2 $ 189.00 $ 2,886,823.80 Transportation Charge - Water Exchange (5,222.6) $ 189.00 ($ 987,071.40) Variable Charges Volume (AF) Rate($/AF) Total ($)
Transportation Charge - Meter Delivery 15,274.2 $ 189.00 $ 2,886,823.80 Transportation Charge - Water Exchange (5,222.6) $ 189.00 ($ 987,071.40) The City of
SAN DIE.GO])
/J. San Diego County
(W Water Authority
Supply Charges
CWA
Forced Delivery - Untreated
Meter No Begin Read End Read 1000 CU. FT. AC. FT. Rate($/AF) Dollars($) Over Weir,WEIR 248,532 248,761 228 5.2 $ 1,200.00 $ 6,240.00 San Diego,02 2,012,753 2,022,602 9,849 226.1 $ 1,200.00 $ 271,320.00 Untreated Water Subtotal 231.3 $ 277,560.00
Regular Meter Delivery - Treated
Meter No Begin Read End Read 1000 CU. FT. AC. FT. Rate($/AF) Dollars($) San Diego, 27 197,491 210,099 12,609 289.5 $ 1,600.00 $ 463,200.00 San Diego, 30 3,079 3,080 2 0.0 $ 1,600.00 $ 0.00
San Diego,10 3,300,807 3,316,240 15,433 354.3 $ 1,600.00 $ 566,880.00 San Diego,11 11,413,060 11,461,025 47,966 1,101.1 $ 1,600.00 $ 1,761,760.00 San Diego,14 5,034,606 5,046,789 12,183 279.7 $ 1,600.00 $ 447,520.00 San Diego,15 3,837,922 3,839,738 1,816 41.7 $ 1,600.00 $ 66,720.00 SD 18/21 Bypass,
18/21 B/P 7,490 7,616 127 2.9 $ 1,600.00 $ 4,640.00
Treated Water Subtotal 2,069.2 $ 3,310,720.00
Regular Meter Delivery - Untreated
Meter No Begin Read End Read 1000 CU. FT. AC. FT. Rate($/AF) Dollars($) Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Detail
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 3 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
The City of
SAN DIEGO.])
/J. San Diego County
(W Water Authority
Water Exchanges
CWA
To Other Agencies Untreated Water
Exchange Location To Agency AC. FT. Rate($/AF) Dollars($) Comments DCFSV66 San Diego County Water Authority (4,974.8) $ 1,200.00 ($ 5,969,760.00) credit for no purchase Del Mar (NA) Del Mar, City of (78.9) $ 1,200.00 ($ 94,680.00) San Vicente Acct San Diego County Water Authority (231.3) $ 1,200.00 ($ 277,560.00) To Other Agencies Untreated Water Subtotal (5,285.0) ($ 6,342,000.00) Supply Charges
CWA
Leakage (SD-1),01 0 31 540 12.4 $ 1,200.00 $ 14,880.00
San Diego, 28 7,377,561 7,443,701 66,141 1,518.4 $ 1,200.00 $ 1,822,080.00 San Diego, DCFSV66 1,434,378 1,651,079 216,701 4,974.8 $ 1,200.00 $ 5,969,760.00 San Diego,05A 9,627,449 9,733,405 105,956 2,432.4 $ 1,200.00 $ 2,918,880.00 San Diego,05B 8,808,476 8,932,713 124,237 2,852.1 $ 1,200.00 $ 3,422,520.00 San Diego,05C 1,405,570 1,428,831 23,261 534.0 $ 1,200.00 $ 640,800.00 San Diego,06A 2,967,595 2,969,351 1,756 40.3 $ 1,200.00 $ 48,360.00 San Diego,06B WEIR 1,591,412 1,591,432 20 0.5 $ 1,200.00 $ 600.00 San Diego,20 11,002,113 11,028,633 26,520 608.8 $ 1,200.00 $ 730,560.00 Untreated Water Subtotal 12,973.7 $ 15,568,440.00
Supply Charges Subtotal 15,274.2 $ 19,156,720.00
Supply Charges Total 15,274.2 $ 19,156,720.00
Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Detail
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 4 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
The City of
SAN DIEGO.])
/J. San Diego County
(W Water Authority
Variable Charges
Transportation Charge - Meter Delivery
Meter No./Location AC. FT. Rate($/AF) Dollars($) Comments Leakage (SD-1),01 12.4 $ 189.00 $ 2,343.60
Over Weir,WEIR 5.2 $ 189.00 $ 982.80
San Diego, 27 289.5 $ 189.00 $ 54,715.50
San Diego, 28 1,518.4 $ 189.00 $ 286,977.60
San Diego, 30 0.0 $ 189.00 $ 0.00
San Diego, DCFSV66 4,974.8 $ 189.00 $ 940,237.20
Water Exchanges
CWA
From Other Agencies Treated Water
Exchange Location From Agency AC. FT. Rate($/AF) Dollars($) Comments El Camino Real Santa Fe I.D. 1.0 $ 1,600.00 $ 1,600.00
Highland Ct. Santa Fe I.D. 0.2 $ 1,600.00 $ 320.00
Otay TP Otay W.D. 10.7 $ 1,600.00 $ 17,120.00
From Other Agencies Treated Water Subtotal 11.9 $ 19,040.00 From Other Agencies Untreated Water
Exchange Location From Agency AC. FT. Rate($/AF) Dollars($) Comments Fletcher Well Helix W.D. 50.5 $ 1,200.00 $ 60,600.00
From Other Agencies Untreated Water Subtotal 50.5 $ 60,600.00 Water Exchanges Subtotal (5,222.6) ($ 6,262,360.00)
Water Exchanges Total (5,222.6) ($ 6,262,360.00)
Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Detail
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 5 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
The City of
SAN DIEGO.])
/J. San Diego County
(W Water Authority
Variable Charges
San Diego,02 226.1 $ 189.00 $ 42,732.90
San Diego,05A 2,432.4 $ 189.00 $ 459,723.60
San Diego,05B 2,852.1 $ 189.00 $ 539,046.90
San Diego,05C 534.0 $ 189.00 $ 100,926.00
San Diego,06A 40.3 $ 189.00 $ 7,616.70
San Diego,06B WEIR 0.5 $ 189.00 $ 94.50
San Diego,10 354.3 $ 189.00 $ 66,962.70
San Diego,11 1,101.1 $ 189.00 $ 208,107.90
San Diego,14 279.7 $ 189.00 $ 52,863.30
San Diego,15 41.7 $ 189.00 $ 7,881.30
San Diego,20 608.8 $ 189.00 $ 115,063.20
SD 18/21 Bypass, 18/21 B/P 2.9 $ 189.00 $ 548.10
Transportation Charge - Meter Delivery Subtotal 15,274.2 $ 2,886,823.80 Transportation Charge - Water Exchange
Meter No./Location AC. FT. Rate($/AF) Dollars($) Comments DCFSV66 (4,974.8) $ 189.00 ($ 940,237.20) credit for no purchase Del Mar (NA) (78.9) $ 189.00 ($ 14,912.10)
El Camino Real 1.0 $ 189.00 $ 189.00
Fletcher Well 50.5 $ 189.00 $ 9,544.50
Highland Ct. 0.2 $ 189.00 $ 37.80
Otay TP 10.7 $ 189.00 $ 2,022.30
San Vicente Acct (231.3) $ 189.00 ($ 43,715.70)
Transportation Charge - Water Exchange Subtotal (5,222.6) ($ 987,071.40) Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Detail
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 6 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
The City of
SAN DIEGO.])
/J. San Diego County
(W Water Authority
Fixed Charges
CWA
Customer Service Charge Annual ($) Monthly ($)
Annual Customer Service Charge for Calendar Year 2024 $ 11,203,332.00 Customer Service Charge December $ 933,611.00
Emergency Storage Charge Annual ($) Monthly ($)
Annual Emergency Storage Charge for Calendar Year 2024 $ 26,372,700.00 Emergency Storage Charge December $ 2,197,725.00
Infrastructure Access Charge Annual ($) Monthly ($)
Annual Infrastructure Access Charge for Calendar Year 2024 $ 21,121,068.00 Infrastructure Access Charge December $ 1,760,089.00
Supply Reliability Charge Annual ($) Monthly ($)
Annual Supply Reliability Charge for Calendar Year 2024 $ 18,057,900.00 Supply Reliability Charge December $ 1,504,825.00
MWD
Capacity Reservation Charge Annual ($) Monthly ($)
Annual Capacity Reservation Charge for Calendar Year 2024 $ 3,455,760.00 Capacity Reservation Charge December $ 287,980.00
Readiness-to-Serve Charge Annual ($) Monthly ($)
Annual Readiness-to-Serve Charge for Fiscal Year 2025 $ 4,881,348.00 Readiness-to-Serve Charge December $ 406,779.00
Fixed Charges Subtotal $ 7,091,009.00
Current Balance $ 21,885,121.40
Previous Balance $ 17,919,593.50
Total Due And Payable $ 39,804,714.90
Variable Charges Subtotal 10,051.6 $ 1,899,752.40
Variable Charges Total 10,051.6 $ 1,899,752.40
Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Detail
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 7 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
The City of
SAN DIEGO.])
/J. San Diego County
(W Water Authority
REMIT TO:

Generated Date: 01/10/2025 11:21 AM
19-6364
A Public Agency
4677 Overland Avenue, San Diego, California, 92123-1233 (858) 522-6673 FAX (858) 522-6561
December 2024
Invoice Detail
Billed to:

San Diego, City of
Mailed: 1/10/2025 Due Date: 2/14/2025
Invoice Number: 1224-15 Page 8 of 8
Service Address:
2797 Caminito Chollas
San Diego, CA 92105-
The City of
SAN DIEGO.])
/J. San Diego County
(W Water Authority

- 57 -
6-12-26
4932-3639-7490

EXHIBIT I

LIST OF ADMINISTRATIVE AGREEMENTS
NO. TITLE EFFECTIVE
DATE

AMENDMEN
T DATE

1. Agreement Between City of San Diego and
Participating Agencies in the Metropolitan Sewerage
System for Unified Management of Industrial Waste
Discharge Pretreatment and Enhanced Source
Control Programs

2. - 58 -
6-12-26
4932-3639-7490

EXHIBIT J

SAMPLE FAB CALCULATION
ILLUSTRATIVE EXAMPLE:

FY 2024 AND POST FY 2027

FUNCTIONAL ALLOCATED BILLING (FAB)

DISTRIBUTION OF

METRO WASTEWATER SYSTEM TOTAL COSTS
TABLE A: EXAMPLE 2024 FAB DISTRIBUTION OF METRO WASTEWATER SYSTEM TOTAL COSTS

OWNERSHIP
AGENCY
Average Flow,
MGD
Incremental Peak Flow,
MGD
RSDP,
MGD
TSS,
1,000 lbs.

COD,
1,000 lbs. Pure Water Phase 1
Unit Cost $160,947 $67,220 $0 $123 $17 $14,035,210
Chula Vista $2,950,163 10% $1,312,269 8% $0 0% $2,709,139 11% $638,388 $1,641,933 12% Coronado $305,800 1% $203,680 1% $0 0% $256,267 1% $55,428 $161,744 1% Del Mar $0 0% $20,166 0% $0 0% $0 0% $0 $2,789 0%
East Otay Mesa $287,774 1% $234,061 1% $0 0% $234,962 1% $55,427 $153,843 1% El Cajon $1,255,389 4% $1,345,963 8% $0 0% $1,498,185 6% $287,760 $69,733 0% Imperial Beach $398,023 1% $300,738 2% $0 0% $250,850 1% $63,881 $198,036 1% La Mesa $850,815 3% $1,606,991 10% $0 0% $572,743 2% $160,116 $396,205 3% Lakeside/Alpine $609,361 2% $112,258 1% $0 0% $514,773 2% $121,832 $21,464 0% Lemon Grove $386,273 1% $303,056 2% $0 0% $280,774 1% $72,899 $195,821 1% National City $748,405 3% $206,568 1% $0 0% $559,705 2% $152,221 $400,266 3% Otay $61,160 0% $38,273 0% $0 0% $120,737 0% $13,878 $64,182 0% Padre Dam $400,759 1% $439,621 3% $0 0% $1,051,084 4% $167,951 $62,343 0% Poway $499,097 2% $591,194 4% $0 0% $381,951 2% $84,300 $262,248 2% Spring Valley $1,002,862 3% $306,603 2% $0 0% $803,788 3% $191,022 $528,429 4% Wintergardens $142,827 0% $72,598 0% $0 0% $136,597 1% $27,243 $6,196 0% SUBTOTAL $9,898,708 33% $7,094,038 44% $0 0% $9,371,554 37% $2,092,345 $4,165,233 30% San Diego
SD Wastewater $19,965,508 67% $9,152,721 56% $0 0% $15,953,330 63% $4,200,992 $9,869,977 70% SD Water $0 0% $0 0% $0 0% $0 0% $0 $0 0%
SUBTOTAL $19,965,508 67% $9,152,721 56% $0 0% $15,953,330 63% $4,200,992 $9,869,977 70% Regional Sludge $0 0.00 $0 0.00 $0 0.00 $0 0.00 $0
TOTAL $29,864,216 100% $16,246,760 100% $0 0% $25,324,885 100% $6,293,337 $14,035,210 100% *Based on FY 2024 Metro System expenses as of last available data, March 20, 2025 *2024 billed units based on Exhibit B & use estimates developed as part of FAB & SARA creation process. 2024 units do not represent the actual billed flows and loadings form FY 2024, but rather are the same as the 2027 units with the exception of the East County agencies and the City of San Diego whose billed units are assumed to change post-2027. Focus of the analysis is to compare the changes in bills due to the change in flows and loadings after 2027 as a result of San Diego and East County Pure Water programs EXHIBIT J - FY 2024
USE
AGENCY
Metered Flow,
MGD
RSDP,
MGD
TSS,
1,000 lbs.

COD,
1,000 lbs. TOTAL % of Total
Unit Cost $692,178 $0 $561 $120
Chula Vista $12,469,072 11% $0 0% $10,048,689 12% $4,565,526 12% 36,335,178$ 11% Coronado $1,043,278 1% $0 0% $889,552 1% $324,301 1% 3,240,049$ 1% Del Mar -$4,292 0% $0 0% -$3,496 0% -$1,108 0% 14,059$ 0% East Otay Mesa $201,189 0% $0 0% $138,032 0% $65,154 0% 1,370,441$ 0% El Cajon $5,822,210 5% $0 0% $5,252,268 6% $2,050,847 5% 17,582,355$ 5% Imperial Beach $1,635,544 1% $0 0% $1,192,406 1% $504,382 1% 4,543,860$ 1% La Mesa $3,243,976 3% $0 0% $1,500,928 2% $692,016 2% 9,023,790$ 3% Lakeside/Alpine $2,558,395 2% $0 0% $1,883,109 2% $910,190 2% 6,731,381$ 2% Lemon Grove $1,507,949 1% $0 0% $625,924 1% $303,769 1% 3,676,465$ 1% National City $2,892,939 2% $0 0% $1,995,264 2% $973,714 3% 7,929,082$ 2% Otay $202,861 0% $0 0% $463,478 1% $92,973 0% 1,057,542$ 0% Padre Dam $1,925,768 2% $0 0% $3,117,893 4% $880,795 2% 8,046,214$ 2% Poway $1,965,607 2% $0 0% $906,717 1% $435,731 1% 5,126,846$ 2% Spring Valley $3,844,185 3% $0 0% $2,564,363 3% $1,202,187 3% 10,443,439$ 3% Wintergardens $688,072 1% $0 0% $530,720 1% $246,761 1% 1,851,013$ 1% SUBTOTAL $39,996,753 34% $0 0% $31,105,847 37% $13,247,238 34% 116,971,715$ 35% San Diego
SD Wastewater $78,078,006 66% $0 0% $52,296,287 63% $25,327,225 66% 214,844,047$ 65% SD Water $0 0% $0 0% $0 0% $0 0% -$ 0%
SUBTOTAL $78,078,006 66% $0 0% $52,296,287 63% $25,327,225 66% 214,844,047$ 65% Regional Sludge $0 0% $0 0% $0 0.00 $0 0.00 -$ 0% TOTAL $118,074,759 100% $0 0% $83,402,134 100% $38,574,463 100% 331,815,762$ 100% *Based on FY 2024 Metro System expenses as of last available data, March 20, 2025 *2024 billed units based on Exhibit B & use estimates developed as part of FAB & SARA creation process. 2024 units do not represent the actual billed flows and loadings form FY 2024, but rather are the same as the 2027 units with the exception of the East County agencies and the City of San Diego whose billed units are assumed to change post-2027. Focus of the analysis is to compare the changes in bills due to the change in flows and loadings after 2027 as a result of San Diego and East County Pure Water programs EXHIBIT J - FY 2024 (CONTINUED)
TABLE B: EXAMPLE 2024 FAB DISTRIBUTION OF METRO WASTEWATER SYSTEM TOTAL COSTS TABLE C: EXAMPLE POST-2027 FAB DISTRIBUTION OF METRO WASTEWATER SYSTEM TOTAL COSTS

OWNERSHIP
AGENCY
Average Flow,
MGD
Peak Flow,
MGD
RSDP,
MGD
TSS,
1,000 lbs.

COD,
1,000 lbs. Pure Water Phase 1
Unit Cost $172,597 $67,944 $12,948 $138 $18 $14,035,210 Chula Vista $3,163,707 11% $1,326,405 8% $0 0% $3,056,672 12% $699,281 $1,641,933 12% Coronado $327,935 1% $205,874 1% $0 0% $289,141 1% $60,715 $161,744 1% Del Mar $0 0% $20,383 0% $0 0% $0 0% $0 $2,789 0%
East Otay Mesa $308,604 1% $236,583 1% $0 0% $265,104 1% $60,714 $153,843 1% El Cajon $222,650 1% $1,354,134 8% $7,795 4% $303,984 1% $55,551 $69,733 0% Imperial Beach $426,833 1% $304,657 2% $0 0% $283,029 1% $69,974 $198,036 1% La Mesa $912,400 3% $1,623,623 10% $0 0% $646,216 3% $175,388 $396,205 3% Lakeside/Alpine $12,082 0% $113,467 1% $4,014 2% $32,945 0% $5,333 $21,464 0% Lemon Grove $414,233 1% $306,321 2% $0 0% $316,792 1% $79,852 $195,821 1% National City $802,577 3% $208,793 1% $0 0% $631,505 2% $166,740 $400,266 3% Otay $65,587 0% $38,685 0% $0 0% $136,226 1% $15,201 $64,182 0% Padre Dam $75,943 0% $444,357 3% $4,713 2% $87,485 0% $16,199 $62,343 0% Poway $535,224 2% $598,242 4% $0 0% $430,948 2% $92,341 $262,248 2% Spring Valley $990,708 3% $343,267 2% $0 0% $835,989 3% $192,882 $528,429 4% Wintergardens $3,452 0% $73,380 0% $1,036 1% $8,998 0% $1,456 $6,196 0% SUBTOTAL $8,261,935 28% $7,198,171 44% $17,558 9% $7,325,034 29% $1,691,630 $4,165,233 30% San Diego
SD Wastewater $21,410,950 72% $9,251,313 56% $0 0% $17,999,850 71% $4,601,706 $9,869,977 70% SD Water $0 0% $0 0% $185,160 91% $0 0% $0 $0 0%
SUBTOTAL $21,410,950 72% $9,251,313 56% $185,160 91% $17,999,850 71% $4,601,706 $9,869,977 70% Regional Sludge $0 0.00 $0 0.00 $0 0.00 $0 0.00 $0
TOTAL $29,672,885 100% $16,449,484 100% $202,718 100% $25,324,885 100% $6,293,337 $14,035,210 100% *Based on FY 2024 Metro System expenses as of last available data, March 20, 2025 *2024 billed units based on Exhibit B & use estimates developed as part of FAB & SARA creation process. 2024 units do not represent the actual billed flows and loadings form FY 2024, but rather are the same as the 2027 units with the exception of the East County agencies and the City of San Diego whose billed units are assumed to change post-2027. Focus of the analysis is to compare the changes in bills due to the change in flows and loadings after 2027 as a result of San Diego and East County Pure Water programs EXHIBIT J - POST FY 2027
USE
AGENCY
Metered Flow,
MGD
RSDP,
MGD
TSS,
1 ,000 lbs.

COD,
1 ,000 lbs. TOTAL % of Total
Unit Cost $731,597 $194,605 $492 $120
Chula Vista $12,783,094 11% $0 0% $10,354,251 12% $4,398,500 11% 37,423,843$ 11% Coronado $1,005,540 1% $0 0% $743,279 1% $289,814 1% 3,084,041$ 1% Del Mar $0 0% $0 0% $0 0% $0 0% 23,172$ 0%
East Otay Mesa $206,276 0% $0 0% $148,557 0% $63,175 0% 1,442,856$ 0% El Cajon $724,109 1% $58,382 4% $843,730 1% $284,766 1% 3,924,834$ 1% Imperial Beach $1,706,929 1% $0 0% $948,898 1% $435,622 1% 4,373,980$ 1% La Mesa $3,683,276 3% $0 0% $2,187,040 3% $1,102,207 3% 10,726,356$ 3% Lakeside/Alpine $39,441 0% $31,137 2% $89,152 0% $26,555 0% 375,590$ 0% Lemon Grove $1,358,771 1% $0 0% $871,176 1% $407,758 1% 3,950,724$ 1% National City $3,061,864 3% $0 0% $2,019,790 2% $990,269 3% 8,281,804$ 2% Otay $313,573 0% $0 0% $546,022 1% $113,139 0% 1,292,615$ 0% Padre Dam $40,801 0% $35,029 3% $92,226 0% $27,471 0% 886,568$ 0% Poway $1,886,688 2% $0 0% $1,273,560 2% $506,725 1% 5,585,975$ 2% Spring Valley $3,301,611 3% $0 0% $2,334,121 3% $999,997 3% 9,527,005$ 3% Wintergardens $14,632 0% $7,784 1% $31,974 0% $9,608 0% 158,517$ 0% SUBTOTAL $30,126,604 26% $132,332 10% $22,483,777 27% $9,655,607 25% 91,057,881$ 27% San Diego
SD Wastewater $86,434,079 74% $0 0% $60,918,357 73% $28,918,856 75% 239,405,089$ 72% SD Water $0 0% $1,167,632 90% $0 0% $0 0% 1,352,792$ 0% SUBTOTAL $86,434,079 74% $1,167,632 90% $60,918,357 73% $28,918,856 75% 240,757,881$ 73% Regional Sludge $0 0% $0 0% $0 0.00 $0 0.00 -$ 0% TOTAL $116,560,684 100% $1,299,963 100% $83,402,134 100% $38,574,463 100% 331,815,762$ 100% *Based on FY 2024 Metro System expenses as of last available data, March 20, 2025 *2024 billed units based on Exhibit B & use estimates developed as part of FAB & SARA creation process. 2024 units do not represent the actual billed flows and loadings form FY 2024, but rather are the same as the 2027 units with the exception of the East County agencies and the City of San Diego whose billed units are assumed to change post-2027. Focus of the analysis is to compare the changes in bills due to the change in flows and loadings after 2027 as a result of San Diego and East County Pure Water programs TABLE D: EXAMPLE POST-2027 FAB DISTRIBUTION OF METRO WASTEWATER SYSTEM TOTAL COSTS EXHIBIT J -POST FY 2027 (CONTINUED)
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EXHIBIT K

EXHIBIT LIST
Exhibit Name Amended Date
A
Metro Facilities (Electronic Exhibit); file name: 2025-10_Exhibit A Metro Facilities.aprx; time stamp of file: 10/23/2025 3:38 PM, software used to open and view file including version: ArcGIS Pro 3.5.0; included herewith as CD-ROM/DVD-ROM
B Distribution of Wastewater System Capacity Rights
C Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies
D Notice Listing
E Methodology for Contract Capacity Transfers
F Metro System Flow Formulas and Sampling Locations
G Sample of Interest Calculation
H Summary of Billings from County Water Authority Showing Costs for Untreated Water
I List of Administrative Agreements
J Sample FAB Calculation
K Exhibit List

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SECOND AMENDED AND RESTATED

REGIONAL WASTEWATER DISPOSAL AGREEMENT

BETWEEN

THE CITY OF SAN DIEGO
AND

THE PARTICIPATING AGENCIES
IN

THE METROPOLITAN SEWERAGE SYSTEM

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TABLE OF CONTENTS
Page

1. DEFINITIONS .................................................................................................................... 3

2. OWNERSHIP AND OPERATION OF THE METRO SYSTEM ...................................... 9

2.1 Rights of the Parties ................................................................................................ 9

2.2 Metro System Services ....................................................................................... 109

2.3 Flow Commitment ................................................................................................ 10

2.4 Funding Obligations........................................................................................... 1110

2.5 Limitations on Types and Condition of Wastewater ..............................................11

2.6 Enforcement Actions ...................................................................................... 121112

2.7 Right of First Refusal ........................................................................................ 1413

2.8 Uniform Enforcement of Pretreatment Program by City .................................. 1514

2.9 Wastewater Generated at Military Bases .............................................................. 16

3. CAPACITY RIGHTS .................................................................................................... 1716

3.1 Contract Capacity.............................................................................................. 1716

3.2 Inter-Agency Transfers of Contract Capacity ............................................... 171617

3.3 New Contract Capacity ................................................................................. 181718

3.4 Reductions in Metro System Capacity .................................................................. 18

3.5 Restrictions on Veto of Transfers and Acquisitions of Capacity ........................... 18

3.6 Amendments to Exhibits B ............................................................................... 1918

3.7 The South Bay Ocean Outfall ....................................................................... 191819

4. FINANCE, BUDGETING, AND ACCOUNTING: PAYMENT AND MONITORING PROVISIONS ........................................................................................................... 191819

4.1 Payment for Metro System Facilities ............................................................ 191819

4.2 Payment for Additional Metro System Facilities .................................................. 19

4.3 Payment for Operation and Maintenance ......................................................... 2019

4.4 Charges Based on Flow, Strength and Fixed Capacity: Exception ............... 201920

4.5 Monitoring Flow and Strength .............................................................................. 21

5. FINANCE, BUDGETING, AND ACCOUNTING: SYSTEM OF CHARGES............... 22

5.1 Charges Authorized ............................................................................................... 22

5.2 Functional Allocated Billing (FAB) ...................................................................... 22

5.3 Metro System Costs .......................................................................................... 2423

5.4 Excluded Costs.................................................................................................. 2423

5.5 Metro System Revenues and Allocations ..................................................... 242324

5.6 Excluded Revenue ............................................................................................ 2524

5.7 Estimate and Billing Schedule and Year End Adjustment ................................ 2524

5.8 Financial Statements ......................................................................................... 2625

5.9 Debt Financing .............................................................................................. 262526

5.10 Allocation of Operating Reserves and Debt Service Coverage ........................ 2726

5.11 Amending the System of Charges ..................................................................... 2726

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6. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 1 .......................................................... 2726

6.1 North City Water Reclamation Plant Modification ........................................... 2726

6.2 New, Expanded or Modified Metro System Facilities ...................................... 2726

6.3 Costs Excluded from Metro System Costs – Phase 1 ................................... 272627

6.4 North City Water Reclamation Plant Improvement Costs Included as Metro System Costs ..................................................................................................... 2827

6.5 Reallocation of PWP Costs incurred since FY 2014 .................................... 282728

6.6 Revenue Sharing for Repurified Water ......................................................... 292829

6.7 Capital Expense Rate ........................................................................................ 3130

6.8 Amending Pure Water Program Cost Allocation and Revenues – Phase 1 .. 333233

7. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 2 .................................................. 34323433

7.1 Pure Water Program – Phase 2 .................................................................. 34323433

7.2 Costs Excluded As Metro System Costs ................................................... 34323433

7.3 Revenue Sharing for Repurified Water – Phase 2 ......................................... 343334

7.4 Capital Expense Rate – Phase 2 ................................................................ 35333534

8. FUTURE NEGOTIATIONS AND COOPERATION ................................................... 3534

9. THE METRO COMMISSION ..................................................................................... 3534

9.2 Advisory Responsibilities of Metro JPA ................................................... 36343635

9.3 Delegation of Decision-Making Authority of the Metro JPA ........................... 3635

9.4 Standing ............................................................................................................ 3635

10. DISPUTE RESOLUTION ............................................................................................ 3635

10.1 Mandatory Non-Binding Mediation ............................................................. 363536

10.2 Selection of Mediator ................................................................................ 37353736

10.3 Mediation Expenses .................................................................................. 37353736

10.4 Conduct of Mediation ............................................................................... 37353736

10.5 Mediation Results ............................................................................................. 3736

10.6 Performance Required During Dispute ............................................................. 3736

11. INSURANCE ................................................................................................................ 3736

11.1 City Shall Maintain All Required Insurance ..................................................... 3736

11.2 Substantially Equivalent Coverage ........................................................... 38363837

12. INTERRUPTION OF SERVICE .......................................................................... 38363837

13. NOTICES REQUIRED UNDER AGREEMENT ........................................................ 3837

14. EFFECTIVE DATE AND EXPIRATION .................................................................... 3837

14.1 Effective Date ................................................................................................... 3837

14.2 Expiration .................................................................................................. 39373938

14.3 Contract Capacity Rights Survive Expiration ........................................... 39373938

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15. ADMINISTRATIVE AGREEMENTS ......................................................................... 3938

15.1 Use and Process for Administrative Agreements .............................................. 3938

16. GENERAL ............................................................................................................ 41394140

16.1 Exhibits ..................................................................................................... 41394140

16.2 Electronic Exhibits and Attachments ........................................................ 41394140

16.3 Amendments to Agreement....................................................................... 42404241

16.4 Construction of Agreement ............................................................................... 4443

16.5 Declarations Re: Agreement ............................................................................. 4644

16.6 Right to Make Other Agreements ............................................................. 46444645

16.7 Statute of Limitations to Resolve Billing Issues ....................................... 46444645

16.8 Counterparts and Electronic Signatures ............................................................ 4745

16.9 Transparency ............................................................................................. 47454746

16.10 Incorporation of Recitals........................................................................... 47454746

16.11 Joint Exercise of Power ............................................................................ 47454746

ACRONYM LIST:

ARA Amended and Restated Regional Wastewater Disposal Agreement COD Chemical Oxygen Demand
CIP Capital Improvement Project(s)
CPM Construction Project Management
CWA San Diego County Water Authority
ECAWP JPA East County Advanced Water Purification Joint Powers Authority FAB Functional Allocated Billing
MBC Metropolitan Biosolids Center
MGD Millions of Gallons per Day
NCWRP North City Water Reclamation Plant
NPDES National Pollutant Discharge Elimination System
PLWTP Point Loma Wastewater Treatment Plant
PWP Pure Water Program
RSDP Reject Stream from Demineralization Process
SBOO South Bay Ocean Outfall
SBWRP South Bay Water Reclamation Plant
TSS Total Suspended Solids

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SECOND AMENDED AND RESTATED REGIONAL WASTEWATER DISPOSAL

AGREEMENT

THIS SECOND AMENDED AND RESTATED REGIONAL WASTEWATER
DISPOSAL AGREEMENT (“ Agreement”) is made and entered into this ___1st day of ______________, 20___, July, 2026, by and between the CITY OF SAN DIEGO, a municipal corporation (the “ City”), on the one hand; and the CITY OF CHULA VISTA, a municipal corporation; the CITY OF CORONADO, a municipal corporation; the CITY OF DEL MAR, a municipal corporation; the CITY OF EL CAJON, a municipal corporation; the CITY OF IMPERIAL BEACH, a municipal corporation; the CITY OF LA MESA, a municipal corporation; the LEMON GROVE SANITATION DISTRICT, a political subdivision of the State of California; the CITY OF NATIONAL CITY , a municipal corporation; the CITY OF POWAY , a municipal corporation; the OTAY WATER DISTRICT, a political subdivision of the State of California; the PADRE DAM MUNICIPAL WATER DISTRICT, a political subdivision of the State of California; and the SAN DIEGO COUNTY SANITATION DISTRICT, a political subdivision of the State of California (collectively, the “ Participating Agencies ”), on the other hand. The City and the Participating Agencies may be referred to herein individually as a “Party,” and collectively as the “Parties.”

RECITALS
WHEREAS, the City and the Participating Agencies (or their predecessors in interest) entered into that certain Regional Wastewater Disposal Agreement dated May 18, 1998 (the “1998 Agreement”), which provided, among other things, for certain contract rights to capacity in the Metropolitan Sewerage System, a system of wastewater conveyance, treatment, and disposal facilities (“Metro System”) and the establishment of a mechanism to fund the planning, design, construction, operation, and maintenance of the Metr o System by the City and the Participating Agencies; and
WHEREAS, the purposes of the 1998 Agreement were: (1) to replace the prior -existing sewage disposal agreements between the City and the Participating Agencies; (2) to provide certain contract rights to capacity in the Metro System to the Participating Agen cies; (3) to establish a mechanism to fund the planning, design, construction, operation and maintenance of the Metro System by the City and the Participating Agencies as necessary to provide hydraulic capacity, and to comply with applicable law and with g enerally accepted engineering practices; and (4) to establish a system of charges which allocates the costs of the planning, design and construction of such new wastewater conveyance, treatment and disposal facilities as are necessary solely to provide for new capacity on a fair and equitable basis; and WHEREAS, on April 29, 2014 the San Diego City Council gave its approval and support for the Pure Water San Diego program by adoption of Resolution No. R-308906, which approved and supported the City’s efforts to develop an implementation strategy to offload wastewater flow from the Point Loma Wastewater Treatment Plant through implementation of potable reuse, resulting in effluent discharged to the Pacific Ocean being equivalent to what would be achieved by upgrading the Point Loma Wastewater Treatment Plan t to a secondary treatment plant (secondary equivalency); and

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WHEREAS, the City is implementing a phased, multi -year program designed to achieve compliance with the Clean Water Act and regionally produce up to 83 million gallons per day of safe, reliable potable water using new, expanded, or modified facilities, some of which will include Metro System facilities, in order to achieve secondary equivalency at the Point Loma Wastewater Treatment Plant; and
WHEREAS, the Pure Water Program will not only benefit the City by producing repurified water, but also the Participating Agencies and their wastewater customers, especially if secondary equivalency is recognized through federal legislation amending the Clean Water Act. Specifically, implementation of the Pure Water Program will reduce wastewater discharges to the Point Loma Wastewater Treatment Plant, part of the Metro System where a large portion of the Participating Agencies’ wastewater is currently treat ed and disposed by discharging it into the Pacific Ocean.

By diverting wastewater from the Point Loma Wastewater Treatment Plant and reducing the effluent discharged into the Pacific Ocean, the City and the Participating Agencies will potentially avoid billions of dollars in unnecessary capital, financing, energy, and operating costs to upgrade the Point Loma plant to secondary treatment at full capacity. Avoiding such costs would result in significant savings for regional wastewater customers and achieve e nvironmental benefits by reducing ocean discharge; and
WHEREAS, on or around November 2019, the East County Advanced Water Purification Joint Powers Authority (the “ECAWP JPA”) was created to implement a potable reuse program to improve local and regional water supply reliability to supply advanced treated recycled water to East San Diego County through the East County Advanced Water Purification Project (the “ECAWP Project”). The ECAWP Project is planned to capture and treat approximately 15 million gallons per day of wastewater that would otherwise be disposed of in the Metro System to produce an annual average supply of approximately 11.5 million gallons per day of new local drinking water. By diverting some wastewater and wastewater content away from the Metro System, the ECAWP Project has the ability to aid and contribute towards the City and region’s efforts to produce a regional annual average of up to 83 million gallons per day of water suitable for potable reuse by December 31, 2035, as described in the Cooperative Agreement in Support of Pure Water San Diego executed by the City and certain environmental stakeholders on December 9, 2014.

The ECAWP Project includes a residuals bypass system that will convey RSDP (as defined herein) from the advanced water purification facility, and Centrate from the soli ds dewatering process of the solids handling facility, to an existing regional sewage gravity pipeline owned and operated by the City for treatment and disposal; and
WHEREAS, effective on or around August 22, 2021, the City and the Participating Agencies amended the 1998 Agreement by executing an Amended and Restated Regional Wastewater Disposal Agreement (the “ARA”) to address the costs and revenues associated with Phase 1 of the Pure Water Program, including specific cost allocations related to the construction, expansion, and/or modification of Metro System facilities and Water Repurification System facilities designed to produce up to 30 million gallons per day of R epurified Water (“Phase 1”).

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WHEREAS, Section 14.2 of the ARA provided that the Parties may amend the ARA by a written agreement between the City and all Participating Agencies stating the Parties’ intent to amend or supplement the agreement; and
WHEREAS, in an effort to address in good faith the outstanding items described in Section 2.9 of the ARA, and comprehensively and equitably address the costs, revenues, and billing system associated with the Pure Water Program and the related construction, expansion, and/or modification of Metro System facilities beyond Phase 1, the City and Participating Agencies wish to amend and restate the ARA as provided herein.

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, the City and the Participating Agencies restate and amend the ARA and agree as follows:

1. DEFINITIONS

1.1 Administrative Agreement shall refer to a formal binding contract, approved under the process set forth in Section 15 of this Agreement, which implements technical, administrative, operational, and/or procedural details of this Agreement.

1.2 Administrative Approval is an approval mechanism authorized by this Agreement that refers to a City administrative process by which the subject of a particular action is presented to the City’s Director of the Public Utilities Department or their designee for approval, based on discussion and evaluation according to sound engineering standards if applicable, and any additional requirements related to review for the action requiring the City’s Administrative Approval as set forth in this Agreement.

1.4 ARA shall mean the Amended and Restated Regional Wastewater Disposal Agreement between the City and the Participating Agencies effective August 22, 2021.

1.5 Capital Expense Rate shall mean the same as the term is defined in Section 6.7.2.

1.6 Capital Improvement Costs means all costs of the planning, design, financing, construction, and/or replacement necessary to render a capital project facility fully operational, including upgrades and reconstruction, consistent with the City’s policies and procedures. This includes costs for planning and environmental work; procurement of consultants or contractors to perform such work; construction management; investigative studies and pre -design work; labor and materials; inspection and testing; and financ ing cost including interest on financial instruments.

1.7 Centrate shall mean the liquid byproduct that results from the dewatering of digested solids as part of wastewater treatment processes.

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1.8 Chemical Oxygen Demand or COD means the measure of the chemically decomposable material in wastewater, as determined by the procedures specified in the most current edition of “Standard Methods for the Examination for Water and Wastewater,” or any successor publication which establishes the industry standard.

1.9 City shall mean and refer to the City of San Diego.

1.10 City’s Water Utility shall mean any and all facilities, properties, improvements and works at any time owned, controlled or operated by the City as part of the public utility system of the City for water purposes, for the development, obtaining, conservation, production, stor age, treatment, transmission, furnishing and distribution of water and its other commodities or byproducts for public and private use (whether located within or without the City), and any related or incidental operations designated by t he City as part of the Water System, including reclaimed and re-purified water.

1.11 City Water Utility PWP Costs are those Pure Water Program costs allocated to the City’s Water Utility and therefore excluded as Metro System Costs under Section 6.3 of this Agreement.

1.13 Contract Capacity Transfers shall refer to the capacity transfers initiated based on Metered Flow and Strength data using the methodology set forth in Exhibit E, Methodology for Contract Capacity Transfers, which change a Participating Agency’s Contract Capacity, as set forth more fully in Section 4.4.3.1 and 4.4.3.2. These changes will generally be made to a single Participating Agency’s annual Contract Capacity to correct capacity exceedances but can also be made to reduce a Participating Agency’s Contract Capacity.

1.14 CWA shall mean the San Diego County Water Authority.

1.15 ECAWP JPA shall mean the East County Advanced Water Purification Joint Powers Authority. The ECAWP JPA itself is not a Participating Agency or a Party to this Agreement.

1.16 ECAWP JPA Agencies shall mean collectively the City of El Cajon, the Padre Dam Municipal Water District, and the San Diego County Sanitation District.

1.18 Fixed Capacity shall mean the capacities for Monthly Average Daily Flow, Incremental Peak Flow, RSDP, COD and TSS for each agency as set forth in Exhibit B.

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1.19 Fixed Capacity Charge shall mean the charges set forth in Exhibit B that are identified as “Fixed Capacity Charges” that represent the Parties’ proportional charges for maintaining the Metro System. Items such as debt service are also included in the Fixed Capacity Charges.

1.20 Flow shall refer to the flow of wastewater discharged by the City and/or one or more Participating Agency/ies into the Metro System.

1.21 Functional Allocated Billing or FAB shall mean the method for distributing all capital, operations, and maintenance Metro System Costs and Revenues on an annual basis by grouping expenses according to their purposes and the current approved Functional -Design Methodology.

1.22 Functional-Design Methodology shall mean the process of allocating fixed and variable Operation and Maintenance Costs and Capital Improvement Costs to Flow, RSDP and Strength parameters recognizing the benefits of both the design criteria and the primary function of a unit process.

1.23 Incremental Peak Flow shall mean the Peak Flow minus the Monthly Average Daily Flow.

1.24 Industrial Wastewater means all wastewater, excluding domestic wastewater, and shall include all wastewater from any producing, manufacturing, processing, institutional, commercial, service, agricultural, or other operation. These may also include wastes of human origin similar to domestic wastewater.

1.25 Industrial User means a discharger of Industrial Wastewater to a public sewer. A Participating Agency may be an Industrial User.

1.27 MBC Return shall mean and refer to Centrate created at the Metropolitan Biosolids Center, 5240 Convoy St, San Diego, CA 92111. MBC Return shall contain Metered Flow, TSS and COD.

1.28 Metered Flow shall mean the amount or volume of wastewater captured by meters that exist throughout the Metro System, estimates from unit count areas, or agreed upon estimates of flows where unit counts are not appropriate . When meters are out of service, estimates can be used to fill in data gaps. These meters, which may or may not be owned by the City, are further defined in Exhibit F, Metro System Flow Formulas and Sampling Locations , which may be amended from time to time.

1.29 Metro Commission or Metro JPA is the advisory body described under Section 9.

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1.30 Metro System Costs shall mean, at a minimum, those costs set forth in Section 5.3 and as otherwise set forth in this Agreement.

1.31 Metro System Revenues are those revenues set forth in Section 5.5.

1.32 Metropolitan Sewerage System or Metro System shall mean and consist of those facilities which are listed, shown and/or described in Exhibit A, Metro Facilities (Electronic Exhibit); file name: [ Enter]; time stamp of file, software used to open and view file including version; included herewith as CD -ROM/DVD-ROM, including any amendments thereto authorized by this Agreement. Exhibit A includes current constructed facilities and proposed future facilities.

1.33 Monthly Average Daily Flow is the number, in MGD, calculated by dividing total Flow on a monthly basis by the number of days in that month.

1.35 New Contract Capacity shall mean capacity in excess of the Contract Capacity set forth in Exhibit B and authorized subject to Section 3.3.

1.38 Participating Agencies shall mean all the local governments and agencies that executed this Agreement other than the City.

1.39 Peak Flow represents the wastewater flow in millions of gallons of wastewater per day that is captured in the highest 1-hour period in a fiscal year.

1.40 Point Loma Wastewater Treatment Plant or PLWTP is the main City wastewater treatment plant with a Monthly Average Daily Flow capacity of 240 million gallons per day and a peak flow capacity of 432 million gallons per day (as of the date of this Agreement). It is an advanced primary treatment plant whi ch includes four major processes: screening, grit removal, chemically enhanced sedimentation, and digestion.

1.41 Pooled Capacity shall refer to the capacity in the Metro system greater than that which has been designated in Exhibit B. Pooled Capacity amounts are shown in Exhibit E, Methodology for Contract Capacity Transfers, and may be recalculated from time to time as set forth more fully in this Agreement.

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1.42 Postage Stamp Methodology is a methodology that can allocate a single uniform cost to any of the annual Contract Capacity cost parameters identified in Exhibit B. This methodology assumes that even though a particular discharger may not utilize all of the infrastructure, all dischargers into the Metro System benefit from the shared infrastructure.

1.43 Projected Future Strength and Flow Amounts are the five (5) values described below:

1.43.3 Projected Future RSDP Flow is the estimated amount of RSDP Flow, stated in millions of gallons per day (MGD), that the City and each Participating Agency are projected to have in a designated future year – currently, the 2050 fiscal year. Projected Future RSDP Flow for each Party is stated in Exhibit B.

1.43.4 Projected Future COD Flows is the estimated amount of Chemical Oxygen Demand (COD), stated in pounds per day, that the City and each Participating Agency are projected to have in a designated fiscal year – currently, the 2050 fiscal year. Projected Future COD Flows for each Party are stated in Exhibit B.

1.43.5 Projected Future TSS Flows is the estimated amount of Total Suspended Solids (TSS) stated in pounds per day, that the City and each Participating Agency are projected to have in a designated fiscal year – currently, the 2050 fiscal year. Projected Future TSS Flows for each Party are stated in Exhibit B.

1.44 Pure Water Capital Melded Percentage is the proportionate share stated in Column 7 of Exhibit B (formerly Column 12 of Exhibit G of the ARA), by which Pure Water Program Capital Improvement Costs, Repurified Water Revenue, and the Capital Expense Rate will be allocated among the City and the Participating Agencies. The Pure Water Capital Melded Percentage is based on each Party’s proportionate share of Projected Future Metro Flow, Projected Future TSS Flows, and Projected Future COD Flows, which proportions are weighted as described in Footnote 5 of Exhibit B.

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1.46 PWP Phase 1 or Phase 1 shall mean the first phase of the Pure Water Program, which modifies/constructs Metro System and Water Repurification System facilities and is designed to produce an annual average of 30 million gallons per day of Repurified Water.

1.47 PWP Phase 2 or Phase 2 shall mean the second phase of the Pure Water Program which modifies/constructs Metro System and Water Repurification System facilities and is designed to produce up to an additional annual average of 53 million gallons per day of Repurified Water.

1.48 Recycled Water shall have the definition set forth in Title 22, Division 4 of the California Code of Regulations and shall mean water which, as a result of treatment of wastewater, is suitable for a direct beneficial use or a controlled use that otherwise could not occur.

1.49 Reject Stream from Demineralization Process or RSDP is a flow reject stream and treatment byproduct from a demineralization process at a potable reuse facility . Separately conveyed, it bypasses all secondary wastewater treatment processes. This flow that primarily contains liquid and salts.

1.50 Repurified Water shall mean water which, as a result of advanced treatment of Recycled Water, is suitable for use as a source of domestic (or potable) water supply.

1.51 Repurified Water Revenue is the cost savings that will be realized when the City’s Water Utility’s annual costs per-acre foot for Repurified Water, including City Water Utility PW Costs, are less than the purchase costs per -acre foot for comparable water from the San Diego County Water Authority, as further described in Section 6.

1.52 Residuals shall mean RSDP and Centrate. In the future, Residuals may include other waste byproducts if the Parties agree in writing that other byproducts may be discharged into the Metro System.

1.53 South Bay Ocean Outfall or SBOO is the facility that is jointly owned by the International Boundary & Water Commission (U.S. Section IBWC) and the City. The outfall conveys and discharges treated effluent from the IBWC’s International Wastewater Treatment Plant and treated effluent from the City’s South Bay Water Reclamation Plant. As of the date of this Agreement, the outfall has a current Average Daily Flow Capacity of 174 million gallons per day. As of the date of this Agreement, the City owns 39.94% of the capacity of the outfall and the balance of the capacity is owned by the IBWC.

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1.56 Total Suspended Solids or TSS means the insoluble solid matter in wastewater that is separable by laboratory filtration, as determined by the procedures specified in the most current edition of “Standard Methods for the Examination of Water and Wastewater,” or any successor publication which establishes the industry standard.

1.57 Tertiary Component is that portion of the wastewater treatment process that currently filters the secondary treated wastewater effluent through fine sand and/or anthracite coal to remove fine suspended solids and disinfects it to meet the requirements of the California Administrative Code, Title 22, or its successor for filtered and disinfected wastewater used for recycled and repurified water.

1.58 Two-Party Approval is an approval mechanism under this Agreement that requires the City’s Administrative Approval and a two -thirds (2/3) vote or greater of the Metro JPA Directors present at a duly noticed Metro JPA public meeting as described more particularly in Section 16.

1.59 Variable Costs shall refer to the portion of the Functional Design Methodology costs that are allocated based on Metered Flow and Strength.

1.60 Water Repurification System shall mean any facilities, including treatment and conveyance facilities, the purpose of which is the production or conveyance of Repurified Water.

Water Repurification System includes, but is not limited to: the Tertiary Component of the North City Water Reclamation Plant to the extent being used to produce Repurified Water, the North City Pure Water Facility; the Repurified Water conveyance system, which will transport Repurified Water from the North City Pure Water Facility and/or other facilities to the Miramar Reservoir or other alternative location(s) as determined by the City; and any other Repurified Water treatment or conveyance facilities which are part of the Pure Water Program. These facilities are constructed and maintained at the expense of the City water utility and are excluded Metro System Costs under this Agreement.

2. OWNERSHIP AND OPERATION OF THE METRO SYSTEM

2.1.1 All decisions with respect to the planning, design, construction, operation and maintenance of the Metro System shall rest with the City, in consultation with the Metro JPA.

2.1.2 The Participating Agencies shall have a contractual right to use the Metro System and to participate in its operation.

2.1.3 The City may transfer ownership of all or part of the Metro System at any time. In the event of a transfer, including a sale under Section 2.7, the City’s successor shall be bound by the terms of this Agreement, and the Participating Agencies rights under this Agreement shall not be affected by such a transfer.

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2.1.4 Any Participating Agency may transfer or assign its rights and obligations under this Agreement. Any transfer shall first be approved by the City. No transfer may occur if the City reasonably determines, after consultation with the Participating Agencies i nvolved, that the proposed transfer will imbalance or adversely impact the City’s ability to operate the Metro System.

2.2 Metro System Services.

2.2.1 The City shall provide wastewater conveyance, treatment and disposal services to the Participating Agencies through the Metro System, under the terms set forth in this Agreement.

2.2.3 The City shall convey, treat, and dispose of or reuse all wastewater received under this Agreement in such a manner as to comply with all applicable laws, rules and regulations.

2.3 Flow Commitment.

2.3.2 This Agreement shall not preclude any Party from diverting Flow as a result of the construction of reclamation/reuse facilities or New Capacity outside of the Metro System.

2.3.3 Any Participating Agency may negotiate an agreement with the City to reduce all or part of their Contract Capacity. If a Participating Agency reduces its Contract Capacity to zero, that Participating Agency’s rights shall terminate under this Agreement and that Participating Agency shall no longer be considered a member of the Metro JPA. However, the agreement between the City and Participating Agency shall provide that the Participating Agency pays its proportionate share of Capital Improvement Costs for t he remainder of the useful life of the facility(ies) constructed during the time the Participating Agency possessed Contract Capacity in the Metro System. This shall include, but is not limited to, any remaining portions of outstanding debt that was incurred for capital facilities during the time the Participating Agency had the right to send Flow into the Metro System, and the cost to disconnect the Participating Agency’s system from the Metro System. Any Contract Capacity that a Participating Agency chooses to relinquish under this section shall be treated as Pooled Capacity after the effective date of an agreement between the City and that Participating Agency. This section does not apply to Inter -Agency transfers of Contract Capacity, which involve the r elinquished Contract Capacity being assigned to and assumed by another Participating Agency or the City. Inter-Agency transfers are governed by Section 3.2

2.3.4 Flow Projections . Currently, the Projected Future Strength and Flow Amounts are projected to the year 2050 in order to allow the Parties time to plan for future I -==- =

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development and growth. However, these projections may be amended from time to time through the Exhibit B amendment processes in this Agreement to more fairly align with actual flow and strength data. The parties shall begin discussion to recalculate the P rojected Future Strength and Flow Amounts set forth in Exhibit B by no later than January 1, 2040.

2.4 Funding Obligations . The City shall fund the acquisition, construction, maintenance and/or operation of the Metro System from monies in (or sewer revenues which populate) the Sewer Revenue Fund for the Metro System, and/or from construction funds derived from the sale of dul y authorized sewer revenue bonds for the Metro System. Nothing in this Section or Agreement shall (i) obligate the City to make any payment for the acquisition, construction, maintenance or operation of the Metro System from monies deriv ed from taxes or any other income or revenue of the City; (ii) be construed to obligate the City or any Participating Agency to pay from its annual income and revenues any sum which would create an indebtedness, obligation or liability within the meaning o f the provisions of Section 18 of Article XVI of the Constitution of the State of California and, in the City’s case, San Diego Charter Section 99; or (iii) prevent the City, in its discretion, from using tax revenues or any other available revenues or funds of the City for any purpose for which the City is empowered to expend moneys under this Agreement. For the avoidance of doubt, subsections (i) and (ii) shall not relieve the City from its obligations to fund the Metro System as provided in this Section 2.4.

2.5 Limitations on Types and Condition of Wastewater.

2.5.1 Each Participating Agency shall minimize to the maximum extent practicable, the infiltration and inflow of surface, ground or stormwaters into its respective wastewater systems.

2.5.2 Each Participating Agency will ensure that all Industrial Users of its wastewater system are regulated by and comply with the City’s industrial pretreatment program.

City shall not require the Participating Agencies to take any actions against such Industr ial Users beyond that which are (1) required under applicable laws, rules and regulations, (2) taken by the City, or (3) that can be taken, but are not being taken by the City.

2.5.3 City and the Participating Agencies agree that the Interjurisdictional Pretreatment Agreements executed by and between the City and each Participating Agency, as applicable, shall terminate effective upon the date of this Agreement. However, the separate transportation agreements that are currently in effect between or among the City and the Participating Agencies shall remain in effect in accordance with their terms. Each Participating Agency will not discharge wastewater originating outside its respective boundaries into the Metro System without the approval of the City, which shall not be unreasonably withheld.

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shall collaborate with City when necessary, on any enforcement response for pretreatment violations within a Participating Agency’s jurisdiction. However, the City shall not be responsible for enforcement or monitoring related to a Participating Agency’s compliance with its own NPDES Permit.

2.5.5 Food establishments and dischargers of fats, oils, and grease (FOG) are regulated and monitored by individual Participating Agencies within their jurisdiction.

Participating Agencies are responsible for the provision of FOG programs, services, and enforcement within their jurisdiction. The City will not provide FOG-related services or programs outside of the City’s jurisdiction.

2.5.6 Residuals shall be separately conveyed so that the Residuals bypass all secondary wastewater treatment processes, unless otherwise agreed to in writing by the City and a Participating Agency or the City and a group of Participating Agencies. For the avoidance of doubt, the Agreement regarding Operation and Maintenance of the East County Residuals Line entered into by the City and the ECAWP JPA with an effective date of February 6, 2023 (specifically, Exhibit C to that agreement entitled Principles of Unders tanding for Operation and Residuals Management in Lieu of the East County Residuals Line), is an agreement that allows the Residuals from the ECAWP Project to convey Residuals in a manner that does not bypass all secondary wastewater treatment processes under certain conditions.

2.6 Enforcement Actions. In the event a regulatory agency, imposes any penalty or fine, or takes other enforcement action, or a private citizen brings a citizen enforcement action to enforce regulatory requirements, (collectively, “Enforcement Actions”) relating to the conveyanc e, treatment, or disposal of wastewater in or from the Metro System or operation of the Metro System, the City shall determine as part of its investigation and response to the notice of violation whether the City or a Participating Agency or Agencies caused or contributed to the violation for reasons which may include, without limitation, exceeding their Contract Capacity, the contents of their wastewater, or the failure to maintain or operate the Metro System or a Participating Agency’s system. Any costs associated with an Enforcement Action including but not limited to fines, penalties, corrective measures, and costs of defense (collectively, “Penalty(ies)”) shall be shared by the Participating Agencies and the City proportionately based on Fixed Capacity as set forth in the then current Exhibit B, unless the City determines, based on verifiable facts, that the violation for which the Penalty is imposed was caused by, or was the result of, gross negligence or willful misconduct of the City or a Participating Agency.

2.6.1 For any Enforcement Actions (1) related to sanitary sewer overflows of 10,000,000 gallons or more from the Metro System occurring after the effective date of this Agreement, or (2) that the City reasonably anticipates will result in the Participating Agenc ies’ collective responsibility for the Penalties imposed to exceed 10% of the Metro Participating Agencies combined annual operations and maintenance budget for the Metro System for the fiscal year in which the Penalty is imposed (“Threshold Amount”), the City’s determination will be subject to review by the Metro JPA as set forth in 2.6.1.1 through 2.6.1.8 below. The scope of the Metro JPA’s review shall be limited to whether the violation for which the Penalty is imposed was caused by, or was the result of, gross negligence or willful misconduct of the City or a Participating I -==- =

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Agency, and if so, how the Penalty should be fairly allocated. For all other Enforcement Actions, the City’s determination related to the allocation of Penalty shall be final.

2.6.1.1 The City will provide a copy of any report submitted to a regulatory agency in response to an Enforcement Action to the Metro JPA within 30 days of submitting that report to the regulatory agency. In that same communication, the City will also provide a su mmary of the City’s findings regarding causation and preliminary determination regarding the allocation of any Penalties. If these determinations have not been made, the City will provide an anticipated date that the information will be provided.

2.6.1.3 The City and representatives of the Metro JPA shall meet and confer to discuss the matter and try to reach an agreement on the appropriate allocation. To facilitate resolution, the meet and confer process shall be treated as a settlement discussion under the California Evidence Code and shall be a confidential process. The meet and confer process shall focus on whether the violation for which the Penalties are being imposed is the result, in whole or in part, of the gross negligence or willful misconduct of the City or a Participating Agency, and if so, how the Penalties shall be allocated.

2.6.1.4 If through the meet and confer process, the City determines that the Participating Agencies’ collective responsibility for the Penalties imposed will be less than the Threshold Amount, then the City will inform the Metro JPA of this determination and allocate the Penalty as such, and no further action by the Metro JPA is required.

2.6.1.5 If through the meet and confer process, the City and representatives of the Metro JPA reach an agreement, and the Participating Agencies’ collective responsibility for the Penalties imposed will be equal to or greater than the Threshold Amount, then that a greement shall be subject to the Two -Party Approval process. The City and representatives of the Metro JPA shall have an opportunity to present the proposed agreement to the Metro JPA before a vote on the determination.

2.6.1.6 If the City and representatives of the Metro JPA are unable to reach an agreement and Participating Agencies’ collective responsibility for the Penalties imposed is equal to or exceeds the Threshold Amount, the City will make a final determination regardin g allocation of the Penalty and present the determination to the Metro Commission.

2.6.1.7 In the event that Two Party Approval is required but is not achieved, each Participating Agency shall pay the portion of the Penalty allocated to them at the time that it is invoiced, however, such payment may be made under protest. The Parties shall engage in the dispute resolution procedures under this Agreement to resolve the issue, prior to any Party having the right to initiate litigation.

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2.7 Right of First Refusal.

2.7.1 The City shall not sell or agree to sell the Metro System without first offering it to the Participating Agencies. For the purposes of this section, “Participating Agencies” shall mean a Participating Agency, a group of Participating Agencies, or a third party representing one or more Participating Agencies. The term “sell” shall include any transfer or conveyance of the Metro System or of any individual treatment, collection, or reclamation facility or outfall within the Metro System.

2.7.2 The City and the Participating Agencies recognize that transfer of ownership of the Metro System is currently restricted by Sections 6.04 and 6.20 of the Installment Purchase Agreement between the City and the Public Facilities Financing Authority of the City, which inter alia restricts the transfer of ownership to the Metropolitan Wastewater Sewage District or other governmental agency whose primary purpose is to provide wastewater treatment. The City shall not seek to impose on bond holders a waiver of Section 6.04 or 6.20. Absent such a restriction, before the City sells or agrees to sell the Metro System, or any portion of it, the City shall offer to sell the Metro System to the Participating Agencies (the “Offer”) on the terms and at a price equal to that proposed for the sale of the Metro System to a third party. The City shall provide all Participating Agencies with written notice of the Offer per Section 13 . The Participating Agencies shall have ninety (90) days from the date of mailing of the Offer (the “Intent to Respond Period”) in which to notify the City of their intent to resp ond to the Offer. If a Participating Agency or Agencies notify the City of their intent to respond to the Offer, that Participating Agency or those Agencies shall have five months from the expiration of the Intent to Respond Period in which to accept or reject the Offer. The Offer shall contain the name of the proposed purchaser, the proposed sale price, the terms of payment, the required deposit, the time and place for the close of escrow, and any other material terms and conditions on which the sale is to be consummated. If no Participating Agency or Agencies notifies the City of its (or their) intent to respond to the Offer within the Intent to Respond Period, the City may move forward with the sale of the Metro System without further notice to the Participating Agency in accordance with Section 2.7.3 below.

2.7.3 If the Participating Agencies give timely notice of their intent to respond and timely notice of their acceptance of the Offer, then the City shall be obligated to sell and the Participating Agencies shall be obligated to purchase the Metro System or any i ndividual treatment, collection or reclamation facility or outfall within the Metro System, as applicable, at the price and on the terms and conditions of the Offer. If the Participating Agencies do not give timely notice of their intent to respond or thei r acceptance of the Offer, or do not submit an offer on the same terms and conditions as the Offer, the City may, following the end of the Offer period, sell the Metro System, or any portion of it, at a price and on terms and conditions no less favorable to the City than those in the Offer. The City shall not sell the Metro System to any third party on terms or at a price less favorable to the City from the terms and price contained in the Offer absent compliance with the terms of this Section. The City’s sale of the Metro System under Section 2.7, is a transfer of ownership subject to Section 2.1.3.

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2.7.4 Nothing herein shall prevent the City from entering into a financing agreement which may impose limits on the City’s power to sell the Metro System to the Participating Agencies pursuant to Section 2.7.1 if the City reasonably believes that such a financing agreement is in the City’s best interest. Neither the entry into such a financing agreement by the City nor the performance thereof by the City shall constitute a breach or default by the City hereunder.

2.8 Uniform Enforcement of Pretreatment Program by City . The Parties have determined that it is in their best interests for a single agency to be responsible for management of the pretreatment program for the Metro System in order to: (a) Ensure protection of the entire Metro System, including the successful op eration of the Pure Water Program; (b) Provide consistent and uniform regulation of Industrial Users, including those subject to pretreatment requirements; (c) Provide for transparent and fair cost recove ry from all dischargers; and (d) Promote efficiency and accountability in the administration of the Metro System. For these reasons, the Parties are delegating pretreatment responsibilities to the City, except regulation of Food Establishments and FOG disc hargers, as more fully set forth in this Agreement and in Administrative Agreement #1 Between City of San Diego and Participating Agencies for the Unified Management of Industrial Waste Discharge Pretreatment and Enhanced Source Control Programs (“Administrative Agreement #1”). Notwithstanding the above, the City may enter into supplementary agreements with an individual Participating Agency, or a group of Participating Agencies, relating to industrial waste discharge pretreatment and enhanced source control programs unique to su ch Participating Agency(ies), so long as the supplementary agreement incorporates a separate cost proportional to the participation of such Participating Agency or group of Participating Agencies that is the sole responsibility of such Participating Agency(ies).

2.8.1 Delegation of Authority. Each Participating Agency shall and hereby does delegate to City full authority and responsibility to operate, manage, and enforce an effective pretreatment program throughout the Metro System to ensure that all Industrial Users are subject to uniform rules and regulations, with direct billing to Industrial Users by the City to begin on the first July 1 following execution of this Agreement.

2.8.2 Operations and Maintenance . Procedures relating to the operation, management, enforcement, and cost recovery for the pretreatment program are set forth in Administrative Agreement #1.

2.8.4 Adoption of Local Ordinances . By no later than June 30 following the Effective Date of this Agreement, every Participating Agency shall adopt a local ordinance conforming with the sample ordinance contained in Administrative Agreement #1 and the City’s pretreatment ordinance, each as amended from time to time, to ensure consistency throughout the Metro System.

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2.8.5 Identification of New Industrial Users . Participating Agencies shall notify the City of any identified potential new Industrial Users within their respective boundaries while the City will bear responsibility for inventory assessments on a regular basis as set forth in Administrative Agreement #1.

2.8.6 Permitting and Permit Compliance . Nothing in this Agreement shall be construed to relieve any discharger to the Metro System of the responsibility to obtain and comply with any required permits for, and to comply with rules and regulations applicable to, dischargers to the Metro System. If the City determines that an Industrial Wastewater Control Program Permit is required, it shall issue the permit subject to the City’s permit requirements. The City’s approval or denial of any application for, or revocation of, an Industrial User Permit shall be in accordance with Chapter 6, Article 4 of the San Diego Municipal Code as well as any other applicable federal, state or local regulations, any published City guidance related to the Industrial Wastewater Control Program, and the City’s Enforcement Respon se Plan, all as may be amended, renumbered, or renamed from time to time. The City and any Participating Agency may elect to coordinate and combine issuing their wastewater discharge permits to Industrial Users when deemed appropriate by both parties. Any agreement between the City and the Participating Agencies related to permitting under the Industrial Wastewater Control Program, shall not transfer responsibility to City for any other type of permitting outside of the City’s jurisdiction, or subject any local agency as that term is defined in California Government Code section 53090, to local building and zoning ordinances that the local agency is not otherwise legally subject to.

2.8.7 Inventory of Industrial Users. City shall create and maintain an inventory of all Industrial User within the Metro System as soon as reasonably practicable following execution of this Agreement. The Participating Agencies shall review the inventory and shall notify the City of an Industrial User(s) in its jurisdiction that is not identified on the inventory as set forth in Administrative Agreement #1.

2.8.8 Evaluation, Monitoring, Enforcement and Program Review . Upon the effective date of this Agreement, it shall be the City’s right and obligation to carry out pretreatment evaluation, permitting, monitoring and/or enforcement throughout the Metro System consistent with the procedures set forth in Administrative Ag reement #1. The City’s pretreatment program review shall occur as necessary, but no less than once every five (5) years. Nothing herein shall be construed as prohibiting any Participating Agency from enforcement of its own pretreatment ordinance within its jurisdiction.

2.8.9 City’s Direct Billing of Industrial Users . The City shall directly bill Industrial User throughout the Metro System to recover costs associated with the pretreatment program as set forth in Administrative Agreement #1. The City Council shall set and approve such costs in a publicly noticed meeti ng pursuant to the procedures set forth in Administrative Agreement #1.

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military base directly as a separate and distinct customer. In the event the City agrees to accept the military’s wastewater and bill the military base as a separate and distinct customer, then (1) the Participating Agency shall have no billing obligations with respect to the military base; (2) each Participating Agency whose sewage line conveys the military base’s wastewater reserves the right to negotiate and charge the federal government a conveyance or transportation fee for use of that Participating Agency’s sewer line; (3) the City shall require that the military base comply with the applicable City pretreatment rules; and (4) the City agrees that the wastewater generated by the military base shall not be considered wastewater of the Participating Agen cy with respect to capacity once the City enters into an agreement with the military base. Any transfers of capacity that are appropriate or necessary to accommodate flow from military bases, if needed, would be governed by Section 3.2 herein, “Inter-Agency Transfers of Contract Capacity.”

3. CAPACITY RIGHTS

3.1 Contract Capacity. Each Participating Agency shall have the contractual right to discharge wastewater to the Metro System up to the limits set forth in Exhibit B (“ Contract Capacity”). Each Party’s Contract Capacity as stated in Exhibit B, is used for the purpose of allocating the Metro System’s Pure Water Program Capital Improvement Costs, Repurified Water Revenue, and the Capital Expense Rate under this Agreement.

3.2 Inter-Agency Transfers of Contract Capacity . The Participating Agencies and the City may buy, transfer, sell or exchange all or part of their Contract Capacity among themselves on such terms as they may agree upon, subject to the following:

3.2.1 Any Party requesting to buy, transfer, sell, or exchange all or part of their Contract Capacity (“ Inter-Agency Transfer ”) shall provide a written proposal to the City including the proposed terms of such Inter-Agency Transfer. The Party requesting the Inter-Agency Transfer shall also provide notice to all other Participating Agencies under Section 13 concurrently with submitting the proposal to the City.

3.2.2 All Participating Agencies will have 45 days to provide any technical input to the City regarding the proposed Inter -Agency Transfer. Any Participating Agency providing technical input shall provide a copy of such input to all other Participating Agencies under Section 13 concurrently with submitting the input to the City.

3.2.3 Upon receipt of a request for an Inter-Agency Transfer, the City will review the request, consult with the affected Participating Agencies, and consider any technical input provided by other Participating Agencies.

3.2.4 All proposed purchases, transfers, sales or exchanges of Contract Capacity require the City’s Administrative Approval prior to becoming effective. No Contract Capacity may be transferred if the City determines that said transfer will imbalance, or will otherwise adversely impact the City’s ability to operate the Metro System. Provided, however, that the Participating Agency seeking the transfer may offer to cure such imbalance at its own expense. If the Participating Agency makes such an offer, the City may not unreasonably withhold Administrative Approval.

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3.2.5 If the City approves the offer as proposed, the City shall adjust the Contract Capacity set forth in Exhibit B per Section 3.6 to reflect the approved changes. If the City determines, after taking the steps in Section 3.2.3 that an Inter-Agency Transfer may be approved if the request is modified, the City will provide a written notice to all Participating Agencies of the modified Inter-Agency Transfer under Section 13 no less than 30 days prior to the Inter -Agency Transfer becoming effective. Such modified Inter-Agency Transfer will become effective 30 days following the written notice being provided, and the City will prove an updated Exhibit B per Section 3.6 reflecting the approved changes.

3.2.6 If a Participating Agency reduces its Contract Capacity to zero through an Inter-Agency Transfer, that Participating Agency’s rights under this Agreement shall terminate and that Participating Agency shall no longer be a member of the Metro JPA. The Participating Agency shall remain responsible for all outstanding financial obligations under this Agreement, unless the Inter-Agency Transfer Agreement assigns those obligations to the Participating Agency accepting the transfer and that agency assumes those obligations. Outstanding financial obligations include, but are not limited to, a Participating Agency’s proportionate share of Capital Improvement Costs for the remainder of the useful life of the facility(ies) constructed during the time the Participating Agency possessed Contract Capacity in the Metro System, including any remaining portions of outstanding debt incurred for capital facilities during the time the Participating Agency had the right to send Flow into the Metro System, and the cost to disconnect the Participating Agency’s system from the Metro System.

3.3 New Contract Capacity . The Parties recognize that the Metro System may be modified to create capacity in the Metro System beyond that set forth in Exhibit B as a result of the construction of additional facilities, acquisition of facilities, increased flows, or as required by regulatory or similar such action. If capacity in excess of the Contract Capacity (“ New Contract Capacity”) is required or requested by a Party, the Parties shall negotiate in good faith to provide the needed or requested capacity. If the Parties agree to provide New Contract Capacity, they shall memorialize the agreement for New Contract Capacity in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. If the parties execute an Administrative Agreement for New Contract Capacity, Exhibit B shall also be adjusted pursuant to Section 3.6 to reflect the New Contract Capacity.

3.4 Reductions in Metro System Capacity . The Parties further recognize that Metro System Capacity may be reduced to comply with, or in response to, applicable permit conditions, or related regulatory action, or sound engineering principles. In the event that the capacity of the Metro System is re-rated to levels below the numbers reflected in the Totals Line set forth in Exhibit B, then the Contract Capacity shall be reallocated proportionately among the Parties based on the percentages of fixed ownership set f orth in Exhibit B at that point in time, subject to the City’s Administrative Approval and amendment of Exhibit B.

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Agency to object to any of the foregoing shall be through expression of its opinion to the Metro JPA and, where applicable, through exercise of its rights under the dispute resolution provisions of this Agreement.

3.6 Amendments to Exhibits B. If the City determines that an amendment to Exhibit B is required for any reason other than a request from a Participating Agency under Sections 2.3.3 and Sections 3.2, and that reason only requires the City’s Administrative Approval, the City shall prepare and circulate to all Participating Agencies a notice explaining the facts and circumstances that the City’s determination is based on(including any relevant data available), and the proposed amendment to Exhibit B within 60 days of determining such an amendment is necessary. The Participating Agencies will have sixty (60) days to provide comments to the City, and all comments submitted to the City by a Participating Agency shall also concurrently be submitted to all other Participating Agencies. The City will review all comments received, prepare final amendments to Exhibit B to reflect adjustments in Contract Capacity, and circulate the final amended Exhibit B by no later than sixty (60) days after the City’s Administrative Appro val. If the amendment to Exhibit B requires an approval process other than the City’s Administrative Approval, the Parties will follow the required approval process, and once that is completed, the City will prepare and provide the final version of Exhibit B within 60 days of the completion of the approval process.

The City shall note each amendment and amendment date in the Exhibit List and shall keep an updated version of Exhibit B on file with the City Public Utilities Department at all times. An amendment to Exhibit B shall not be retroactive, except as provided in Section 4.4.3.3.

3.7 The South Bay Ocean Outfall. Nothing in this Agreement shall limit the City’s right to transfer capacity rights in assets that are not a part of the Metro System, including without limitation that portion of the South Bay Ocean Outfall which is not part of the Metro System.

4. FINANCE, BUDGETING, AND ACCOUNTING: PAYMENT AND MONITORING

PROVISIONS

4.1 Payment for Metro System Facilities . Through the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the costs of planning, design and construction of all of the Metro System facilities which are identified in Exhibit A .

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Approval, in its sole discretion, when the addition or conversion is for the purpose of complying with applicable laws, rules, or regulations; or (2) supported by an independent third -party study setting forth the benefits to the Metro System of each new facility, including a cost allocat ion for capital and projected annual maintenance costs if the addition or conversion is for any other purpose. For any new Metro facility or conversion of a City facility to a Metro facility proposed to be added or converted under (2) above, any such propo sal must be memorialized in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. Once approved, the City shall amend Exhibit A accordingly and shall give notice of any amendments to all Participating Agencies. The City shall keep an updated version of Exhibit A on file with the City Public Utilities Department. Exhibit A may be amended to reflect other changes to the Metro System only as expressly provided in this Agreement.

4.3 Payment for Operation and Maintenance . Through the system of charges set forth in Section 5 of this Agreement, each Participating Agency shall pay its share of the Operation and Maintenance Costs of all Metro System facilities. The Participating Agencies shall not pay for the Operation and Maintenance Costs of the Water Repurification System, which are City Water Utility PW Costs.

4.4 Charges Based on Flow, Strength and Fixed Capacity: Exception.

4.4.2 Notwithstanding Section 4.4.1, or any other provision of this Agreement, a Participating Agency’s share of PWP Phase 1 Capital Improvement Costs, PWP Phase 1 Repurified Water Revenue, and Pure Water Program Capital Expense Rate attributable to the Metro System as described in Sections 6.6 and 6.7 shall be assessed or credited based on the Parties’ proportionate share of the Pure Water Capital Melded Percentages set forth in Column 7 of Exhibit B. The City shall annually allocate the estimated and actual PWP Phase 1 Capital Improvement Costs and revenues which are attributable to the Metro System in proportion to each Party’s Pure Water Capital Melded Percentages as set forth in Column 7 of Exhibit B when estimating quarterly payments and conducting year-end adjustments.

4.4.3.1 Contract Capacity Transfers – Increases in Fixed Capacity Components. Beginning in the next fiscal year after the effective date of this Agreement, if a Party exceeds their Capacity Rights or any individual component of the Capacity Rights set forth in Exhibit B, by any one of the following triggers based upon data availab le at the completion of a fiscal year: (1) Three percent (3%) in a fiscal year for any two consecutive fiscal years, (2) One MGD in a fiscal year for any two consecutive fiscal years, or ( 3) The equivalent Strength of one MGD in a fiscal year for any two consecutive fiscal years; then, the City shall prepare an amendment to Exhibit B that reflects a Contract Capacity Transfer for that Party based on the I -==- =

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available information about such Party’s exceedance(s) and the methodology set forth in Exhibit E.

After Phase 2 is completed, if, due to contract capacity transfers or reductions in capacity, the Pooled Capacity drops to less than two percent (2%) of the total Contract Capacity, a capacity study shall be initiated to evaluate existing facilities for new capacity. The City shall thereafter amend Exhibit B under the process set forth in Section 3.6 to reflect the new Contract Capacity for all Parties. Any ch anges to the methodology in Exhibit E shall be made pursuant to an Administrative Agreement subject to the Joint Administrative Approval Process described in Section 15.

4.4.3.2 Contract Capacity Transfers – Decreases in Fixed Capacity Components. Beginning in the next fiscal year after the effective date of this Agreement, if a Party can show through an independent report that its Monthly Average Daily Flow, annual average pounds per day of COD, annual average pounds per day of TSS, Incremental Peak Flow, or RSDP is projected to decrease ten percent (10%) or more below their Projected Future Strength and Flow Amounts using data from a minimum of three (3) consecutive prior fiscal years as support, then City shall prepare a proposed amendment to Exhibit B that reflects the new Projected Future Strength and Flow Amounts for all Parties based on such Party’s decrease and other relevant information using sound engineering principles and the guidelines set forth in Exhibit E. The City’s proposed amendment shall be subject to the Two -Party Approval Process. If approved, the City shall thereafter amend Exhibit B using the process set forth in Section 3.6.

4.4.3.3 If Exhibit B is amended to update one or more Parties’ Projected Future Strength and Flow Amounts pursuant to Section 4.4.3.1 or 4.4.3.2, the change in Projected Future Strength and Flow Amounts shall be effective retroactively to the beginning of that fis cal year, and the City shall use the updated amounts in estimating quarterly payments and conducting year-end adjustments for Pure Water Program costs and revenues. Therefore, any Party that underpaid based on prior Exhibit B Fixed Capacity amounts (which were based on prior Projected Future Strength and Flow Amounts) shall pay the retroactive amount due in quarterly installments in its quarterly payments the following fiscal year; any Party that overpaid based on previous Exhibit B Fixed Capacity amounts s hall receive a credit in quarterly installments in its quarterly payments the following fiscal year. Notwithstanding the preceding sentence, if the retroactive amount due exceeds 20% of a Party’s average annual Metro System payments for the previous four (4) fiscal years, such Party may elect to pay the retroactive amount due in its quarterly payments over the subsequent four (4) fiscal years, with interest, based on the most recent quarterly earnings rate of the City’s Treasurer’s Pooled Rate of Return; any Party that overpaid in an amount that exceeds 20% of their annual average Metro System payments for the previous four (4) fiscal years based shall receive a credit in its quarterly payments spread over the following four (4) fiscal years.

4.5 Monitoring Flow and Strength.

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currently unmetered areas, unit counts or agreed upon flow estimates where unit counts are not appropriate shall be used. For adding or subtracting unit count areas, the average current Metro Flow per unit shall be used consistently for all Parties. These unmetered unit counts will be updated at least once every five (5) years. If the flow in an unmetered area is over 0.5 MGD at a specific connection point, then a meter shall be added for that area, if possible. Exhibit F provides the Flow formulas that shall be used to determine the payment obligation for each Party, or a grouping or subgrouping of Parties, as applicable. Exhibit F shall be distributed to all Parties with the budget estimates that are sent annually pursuant to Section 5.7.1. The City curre ntly provides all Participating Agencies with access to their data from the Flow metering devices, including providing access to their raw data, and will continue to do so according to the Parties’ established practices on the Effective Date of this Agreem ent. Changes to Exhibit F may be made upon the City’s Administrative Approval.

4.5.3 The City shall report Strength data to the Participating Agencies at least quarterly.

4.5.4 The City shall notify the Metro JPA’s Executive Director and any directly affected Participating Agency within 24 hours of any unpermitted or unlawful discharge or release of effluent from the Metro System which may be reportable to the Regional Board, or any other regulatory agency, and which may result in civil or criminal penalties or administrative enforcement proceedings pursuant to Water Code sections 13261, et seq., section 13300, et seq., Government Code section 54740 et seq., or other provisions of law. Upon request from the Metro JPA or a Participating Agency, City shall provide the Metro JPA or affected Participating Agencies with copies of all non-privileged related correspondence to and from the Regional Board. The City shall endeavor to confer with Metro JPA staff during the report preparation process and before any report is submitted to a regulatory or enforcement agency.

5. FINANCE, BUDGETING, AND ACCOUNTING: SYSTEM OF CHARGES

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using sample data is att ached hereto as Exhibit J (the Sample FAB Calculation ) to assist the Parties in understanding how the FAB methodology works. Exhibit J provides an illustration of the application of FAB to applicable parameters and the derivation of u nit rates and resulting charges. The Parties agree that Exhibit J is intended to promote transparency and a common understanding of the implementation of FAB under this Agreement , but the Parties acknowledge that Exhibit J is illustrative only and shall not control over the terms of this Agreement or the actual calculation of annual FAB rates, which shall be determined in accordance with this Section 5.

5.2.1 Calculation of FAB Rates.

5.2.1.1 The City shall determine the unit FAB rates by allocating net costs (Metro System Costs less Metro System Revenues) between the fixed and measured variable parameters of Capacity Rights, such as Monthly Average Daily Flow, Incremental Peak Flow, COD, TSS, and RSDP as set forth in Exhibit B. These allocations are based on the approved Functional-Design Methodology analyses for sewer system components and estimated Operat ion and Maintenance (O&M) Costs allocated to each parameter.

5.2.1.2 Beginning one (1) year after substantial completion of the final project of Phase 1 of the Pure Water Program for which sewer revenue funds were used, the City shall have the FAB, which includes the Functional Design Methodology, professionally reviewed at least once every five (5) years.

5.2.1.3 After conducting a professionally developed independent third - party report, the City may propose to change the FAB, including the Functional Design Methodology, to include any other parameter, or modify any term governed by this Section 5.2.1, by way of an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15. However, the City may revise the FAB, including the Functional Design Methodology at any time to include any other measurement required by law after the effective date of this Agreement subject to the City’s Administrative Approval, in its sole discretion . City will notify all Participating Agencies of any such review or revision no later than sixty (60) days after City’s Administrative Approval. Once approved, the FAB resulting from any review or revision under this Section will become the current approved version until it is revised by a future professional independent third-party study or a change in law.

5.2.1.5 Costs for capital improvements, capital replacement, and rehabilitation costs including financing shall be based on the approved Functional -Design Methodology and the Contract Capacity in Exhibit B.

5.2.1.6 The net cost allocated to each of the parameters shall be divided by the total Metro System quantity for that parameter to determine the unit rates for each parameter.

These unit rates shall apply uniformly to all Parties.

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5.3 Metro System Costs. The following shall at a minimum be considered Metro System Costs for purposes of calculating the annual FAB rate:

5.3.1 Except as provided in Section 5.4 (Excluded Costs), the annual Operation and Maintenance Costs and annual costs associated with administration, replacement, annual debt service costs and other periodic financing costs and charges, capital improvement, insu rance premiums, claims payments and claims administration costs of the Metro System, including projected overhead, shall be calculated using generally accepted accounting practices to reflect the costs of the Metro System.

5.3.2 Fines or penalties imposed on the City as a result of the operation of the Metro System, unless the fine/penalty is allocated to the City or a Participating Agency as provided in Section 2.5.5.

5.4 Excluded Costs. The following items shall not be considered Metro System Costs for purposes of calculating the annual FAB rate:

5.4.1 Costs related to the City of San Diego’s municipal sewer, water (including City Water Utility PWP Costs), and/or stormwater systems as determined by C ity’s reasonable calculations consistent with sound engineering and best management practices.;

5.4.3 Capital Improvement Costs or Operations and Maintenance Costs of any non-Metro System facility not included in Exhibit A, including, but not limited to, any costs associated with the ECAWP Project;

5.4.4 Those costs otherwise identified as excluded costs in Section 6.3.

5.5 Metro System Revenues and Allocations . The following revenues shall be at a minimum considered Metro System Revenues for purposes of determining the annual FAB rate:

5.5.1 Any grant or loan receipts or any other receipts that are attributable to the Metro System or Metro System components of the Pure Water Program, including, but not limited to, all compensation or receipts from the sale, lease, or other conveyance or transf er of any asset of the Metro System or Metro System components of the Pure Water Program. Any such receipts attributable to the Metro System components of the Pure Water Program shall be allocated among the City and the Participating Agencies in the propor tions set forth in Exhibit B Fixed Capacity amounts.

5.5.2 All compensation or receipts from the sale or other conveyance or transfer of any Metro System byproducts, including, but not limited to, gas, electrical energy, sludge products, and Recycled Water produced at the NCWRP and SBWRP and the future Central Are a Plant.

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5.5.4 Those portions of Repurified Water Revenue attributable to the Metro System, as calculated under provisions in Section 6.6.3. These revenues shall be allocated among the City and Participating Agencies in the proportions set forth in Exhibit B Fixed Capac ity amounts.

5.5.5 Any other non -operating revenues, including, but not limited to interest income included in the income credit portion of the annual audit.

5.6 Excluded Revenue. The following revenues shall be excluded from Metro System Revenues for purposes of determining the annual FAB rate:

5.6.1 Proceeds from the issuance of debt for Metro System projects.

5.7 Estimate and Billing Schedule and Year End Adjustment.

5.7.1 The City shall estimate the FAB rates on an annual basis prior to January 15 and provide budget estimates for the upcoming fiscal year to all Parties. The City shall quantify the FAB rates by estimating the quantity of Flow, Strength, and Fixed Capacity Charges for each Party, based on that Party’s Metered Flow for the p ast year and the cumulative data of sampling for Strength constituents such as COD and TSS over the preceding five years and Fixed Capacities set forth in Exhibit B. If the cumulative five-year Strength data is no longer indicative of discharge from a Part y, and a Contract Capacity Transfer has been approved pursuant to Sections 4.4.3.1,

4.4.3.2, or 3.2, then the City may eliminate the previous higher readings subject to the City’s Administrative Approval.

5.7.2 Prior to March 1 of each year the City will provide a mid-year review of the current year’s Metro System Capital Improvement Costs and Operations and Maintenance Costs and offsetting non -operating revenues such as grant or loan proceeds, including fiscal y ear-end projections and provide such reviews to the Participating Agencies.

5.7.3 The City shall determine the volume of MBC Return on an annual basis and for billing purposes only. The costs of treating MBC Return shall be allocated to the Parties in proportion to their Metered Flow and Strength. If a Party’s Monthly Average Daily Flow plus MBC Return exceeds their Contract Capacity set forth in Exhibit B, it shall not be treated as an exceedance pursuant to Section 4.4.3.1.

5.7.4 The City shall bill the Participating Agencies quarterly, invoicing on August 1, November 1, February 1 and May 1. Each bill shall be paid within thirty (30) days of mailing. Quarterly payments will consist of the total estimated cost for each Participating Agency, based on their estimated Flow, Strength, and Fixed Capacity Charges, divided by four.

5.7.5 At the end of each fiscal year, the City shall determine the actual Metro System Costs and the actual Metered Flow as well as the cumulative Strength data for the City and I -==- =

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each of the Participating Agencies. The City shall make any necessary adjustments to the unit rates for Flow and Strength such as COD, TSS and Fixed Capacity Charges based on actual costs for the year as determined through the annual audit process in Section 5.8.2 of this Agreement. The City shall then recalculate the FAB rate for the year using actual audited costs for the year, actual Metered Flow, Residuals, MBC Return, cumulative Strength factors, and Fixed Capacity Charges for the City and for each Participating Agency. The City shall credit any future charges or bill for any additional amounts due against the quarter after the prior year costs have been audited.

5.8 Financial Statements.

5.8.1 The City shall keep records and accounts of all costs and expenses relating to conveyance, treatment, disposal, and reuse of wastewater, and production of Repurified Water, and the acquisition, planning, design, construction, administration, monitoring, op eration and maintenance of the Metro System and Water Repurification System, and any grants, loans, or other revenues received therefor. The City shall keep such records and accounts for at least four (4) years after the completed audit, or for any longer period required by law or outside funding sources.

5.8.2 Annual Audit. Said records and accounts shall be subject to reasonable inspection by any authorized representative of any Participating Agency at its expense. Further, said accounts and records shall be audited annually by an independent certified public accounting firm appointed by the City. A copy of said report shall be available to any Participating Agency.

As part of said audit, the actual amount of City Water Utility’s PW Costs, Pure Water Program costs attributable to the Metro System, Repurified Wat er Revenue, and the Capital Expense Rate shall be determined and audited by the City’s external auditors and Participating Agency representatives, and a cumulative and annual summary of such amounts shall be included as a footnote or attached to the audit of the Metro System. Cost summaries shall include separate lines for Capital Improvement Costs and Operation and Maintenance Costs.

5.8.3 The City shall make a good faith effort to complete the annual audit, and any related adjustments under this Agreement as described in Section 5.8.2, by the end of the following fiscal year.

5.9 Debt Financing. The City retains the sole right to determine the timing and amount of debt financing required to provide Metro System Facilities. The annual debt service plus in - progress Capital Improvement Costs to maintain capacity in and of the Metro System shall be allocated to the Participating Agencies consistent with the Exhibit B Contract Capacity allocations effective on the date the debt is issued. If a Participating Agency wishes to prepay Capital Improvement Costs, and the City is able to accomm odate such a request, then a Participating Agency may prepay their proportional share of Capital Improvement Projects. If a Participating Agency wishes to withdraw or reduce their Flows and/or Strengths from the Metro System per Section 2.3.3 of this Agreement, such agency will remain responsible for its pro -rata share of all outstanding debt incurred at the time the debt was issued until it is satisfied, irrespective of withdrawal, reduction in Flows and/or Strengths, or Agreement expiration. If the City refunds debt, it shall allocate such refunds consistent with the Exhibit B Contract Capacity allocations effective on the date the debt was issued.

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5.10 Allocation of Operating Reserves and Debt Service Coverage . The Parties shall continue to comply with the protocol set forth in Exhibit C, Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies , which exhibit may be amended from time to time consistent with Section 5.11.

5.11 Amending the System of Charges . Except as otherwise provided in Section 5.2.1.63, the Parties may amend any provision in this Section 5 regarding the Finance, Budgeting, and Accounting System of Charges in an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15.

6. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 1

6.1 North City Water Reclamation Plant Modification . As part of Phase 1 of the Pure Water Program, the City intends to modify the North City Water Reclamation Plant (a Metro System facility) and expand its capacity to 52 MGD. In addition, the City intends to construct the North City Pure Water Facility on a nearby site to pro duce Repurified Water. This Section sets forth the costs and revenues associated with the Pure Water Program attributable to the Metro System. Exhibit A includes current constructed Metro System facilities and existing and proposed future Phase 1 facilities.

6.2 New, Expanded or Modified Metro System Facilities . Each new, expanded, or modified Metro System facility, which is part of the Pure Water Program , and is used in relation to the production of Repurified Water (in addition to the modification and expansion of the North City Water Reclamation Plant) shall be governed by this Section.

6.3 Costs Excluded from Metro System Costs – Phase 1. All of the following Pure Water Program costs, including Capital Improvement Costs, Operation and Maintenance Costs, and other related costs (including administration, insurance, claims, and overhead) shall be excluded from Metro System Costs for purposes of calculating the annual FAB rate.

6.3.1 General Exclusions:

6.3.1.1 Costs of the Water Repurification System and any Metro System facilities to the extent constructed, modified, expanded, or used for the purpose of treating wastewater beyond secondary treatment (ocean discharge standard under current law). This shall include costs for preliminary treatment, primary treatment, and secondary treatment to the extent such costs are higher than they would otherwise be due to the production of Repurified Water.

6.3.1.2 Costs for fail -safe disposal, if necessary, for design capacity for Repurified Water, including, but not limited to, any costs associated with the reservation of capacity at the Point Loma Wastewater Treatment Plant.

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6.3.2 Cost Exclusions Specific to North City Water Reclamation Plant Improvements:

6.3.2.1 Costs for increased aeration tank volume to the extent the new volume exceeds the amount necessary to provide 52 MGD capacity. Determination of sizing to provide 52 MGD capacity shall be based on the current tank volume necessary to provide 30 MGD capacity.

6.3.2.2 Costs for the methanol feed system.

6.3.2.3 Costs for RSDP disposal, including, but not limited to, pump stations, pipelines, retreatment, ocean outfall, and monitoring.

6.3.2.4 Costs for the use of existing tertiary water filters for Repurified Water purposes. Such costs may consider the depreciated value of such filters or use such other appropriate valuation methods as agreed by the City and authorized representatives of the Me tro JPA. Costs under this section shall be reimbursed or credited by City’s Water Utility to the Metro System.

6.4 North City Water Reclamation Plant Improvement Costs Included as Metro System Costs. Notwithstanding the above exclusions, the City and the Participating Agencies have specifically agreed that the following Capital Improvement Costs and Operation and Maintenance Costs related to North City Water Reclamation Plant improvements shall be in cluded as Metro System Costs for purposes of calculating the annual FAB rate (and therefore not qualify as City Water Utility PW Costs):

6.4.1 Costs for chemically enhanced primary treatment for up to 52 MGD capacity.

6.4.2 Costs for primary effluent equalization for up to 52 MGD capacity.

6.4.3 Costs for increased volume of aeration tanks that will provide up to, but not exceeding, 52 MGD capacity.

6.4.4 Costs to add secondary clarifier tanks sufficient for up to 52 MGD capacity.

6.4.5 Costs for wastewater conveyance facilities to provide wastewater for replacement of Centrate flows that cannot be treated at the North City Water Reclamation Plant due to the production of Repurified Water.

6.4.6 Costs for treatment and conveyance of all MBC Return (micro-filtration and tertiary backwash) based on Flow, COD, and TSS.

6.5 Reallocation of PWP Costs incurred since FY 2014.

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6.5.1.1 All the O&M task orders, or costs that cannot be directly assigned to a PWP Phase 1 capital improvement project such as program management, environmental documents, etc., will be reallocated by the final water/wastewater cost split, and will include interest accruing since June 2014 at the interest rate earned by the City of San Diego for each applicable fiscal year as shown by the sample interest calculation included in Exhibit G, Sample of Interest Calculation. This postpones the reconciliation of costs until the substantial completion of all construction projects for Phase 1 (City Water Utility PW Costs and Metro). This reconciliation will be performed during the audit of the fiscal year in which substantial completion of all projects occurs.

6.5.1.2 All Phase 1 PWP CIP projects were bid and awarded by October 2022 which is FY2023. All shared Phase 1 CIP projects will be reallocated to the actual construction cost split once the project is awarded, and the cost loaded CPM is completed and negotiated between the City and the Participating Agencies during the FY2023 audit. All CIP soft costs incurred since 2014 will be reallocated like the O&M task orders during the audit of the year of substantial completion of the actual Phase 1 CIP projects. If inte rest is owed to the Metro System for soft costs starting in FY 2014, such interest shall be considered Metro System Revenues consistent with Section 5.5.5.

6.6 Revenue Sharing for Repurified Water.

6.6.1 Background. Initially, the Parties anticipate that the cost per acre foot associated with the production of Repurified Water will be more expensive than the cost per acre foot of untreated imported water. However, it is anticipated that Repurified Water produced under Phase 1 will be less expensive than untreated imported water sometime in the future. Once Repurified Water produced under Phase 1 becomes less expensive than the cost of untreated imported water, the Parties agree that there will be revenue from the Pure Water Program.

6.6.2 Calculation. Revenue sharing shall occur in each fiscal year during which the annual cost per acre foot associated with the production of Repurified Water is less than the cost of untreated water per acre foot from the San Diego County Water Authority (“ CWA”). The annual cost difference shall be known as “ Repurified Water Revenue .” Repurified Water Revenue shall be determined as follows:

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Annual cost per acre foot of CWA untreated water purchased by the City for delivery at Miramar Reservoir (which shall be determined based on the total costs for water actually billed to the City by CWA for water delivered at Miramar Reservoir in a fiscal year, divided by the number of acre -feet of CWA water delivered at Miramar Reservoir that year)
less
Annual cost per acre -foot of City Water Utility PW Costs (which shall be determined based on total annual City Water Utility PW Costs divided by the number of acre-feet of Repurified Water actually produced in that year) the result of which is multiplied by
The number of acre feet of Repurified Water produced by Pure Water Program facilities during the applicable fiscal year.

Exhibit H, Summary of Billings from County Water Authority Showing Costs for Untreated Water, is a summary of the most recent CWA rate structure and cost allocations to the City of San Diego for untreated water. The Parties agree that Exhibit H shall be referred to by the Parties in the future in determining how costs for water delivered at Mirama r Reservoir are calculated. If no untreated water is delivered at Miramar Reservoir in a given year, then the closest point of delivery of untreated water to the City shall be used. The City shall annually update Exhibit H to reflect the most recent CWA ra te structure and cost allocations to the City of San Diego.

6.6.3 Revenue Sharing . Repurified Water Revenue shall initially be shared between the City’s Water Utility and the Metro System based on the relative actual Capital Improvement Costs for the Pure Water Program contributed by City’s Water Utility and the Metro System. Such Capital Improvement Cost contributions are currently estimated as 62% City’s Water Utility and 38% Metro System. The Metro System’s portion of the Repurified Water Revenue shall be applied to debt attributable to the Metro System first, until th e debt attributable to the Metro System is fully paid.

Following full payment of debt attributable to the Metro System, Repurified Water Revenue shall be shared based on the relative actual Operation and Maintenance Costs for Pure Water Program facilities contributed by City’s Water Utility and the Metro System, calculated annually. Such Operation and Maintenance Costs are currently estimated as 76% City’s Water Utility and 24% Metro System on an annual basis.

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Based on the actual cost and production information, the City will recalculate the Repurified Water Revenue for the prior fiscal year. The City will credit any future charges or bill for any additional amounts due the quarter after the prior year costs have been audited.

6.6.5 Change in Potable Reuse Method . The Parties acknowledge that the Pure Water Program Phase 1 will initially use indirect potable reuse surface water augmentation. The use of CWA untreated water costs in calculating Repurified Water Revenue is intended to provide an appropriate point of comparison to costs for producing Repurified Water that will be introduced into surface water. The Parties agree that if the City desires to implem ent direct potable reuse (in which Repurified Water would be introduced directly into a water supply pipeline or facility), the Parties shall meet and negotiate in good faith regarding an amendment to this Section 6.6, to appropriately update the formula for Repurified Water Revenue, which form of amendment shall occur via an Administrative Agreement and shall be subject to the Joint Administrative Approval Process set forth in Section 15.

6.7 Capital Expense Rate.

6.7.1 Background. The Point Loma Wastewater Treatment Plant operates under a National Pollutant Discharge Elimination System (“ NPDES”) permit modified under section 301(h) & (j)(5) of the Clean Water Act. If such modified permit were ever revoked or not renewed, the Parties agree that, under current law, the City would have an obligation to upgrade the PLWTP to secondary treatment. The Parties further agree that $1.8 billion is a fair and comprehensive estimation of the costs that could be incurred by the Metro S ystem to meet the legal requirements related to the Metro System under current law. The estimate of $1.8 billion is based on the net present value of the capital cost to develop 180 MGD of secondary treatment at PLWTP as of November 15, 2018.

Therefore, the Parties agree that $1.8 billion represents the maximum amount of Capital Improvement Costs that the Metro System should be obligated to contribute to the Pure Water Program, the purpose of which is not solely the disposal of wastewater, but also the production of Repurified Water. The Parties agree that this $1.8 billion maximum contribution should apply whether or not the PLWTP is actually upgraded to secondary treatment to meet legal requirements in the future because, as of the date of the Agreement, the Parties have the option of upgrading the PLWTP to full secondary treatment for the cost of approximately $1.8 billion.

In light of the above, the Parties have agreed that if Metro System costs related to the Pure Water Program exceed the $1.8 billion, City’s Water Utility will pay a charge for each acre foot of secondary treated effluent produced by Metro System facilities and used for the production of Repurified Water.

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6.7.2 Capital Expense Rate . Under the circumstances described in this Section 6.7, City’s Water Utility shall pay a charge (“Capital Expense Rate”) for each acre-foot of secondary treated effluent produced by Metro System facilities and used for the production of Repurified Water. The Capital Expense Rate costs or revenues attributable to the Metro System shall be assessed or credited consistent with Section 4.4.2. City’s Water Utility shall pay the Capital Expense Rate if the following costs alone, or in combin ation, exceed $1.8 billion (which amount shall be adjusted for inflation):

6.7.2.1 The sum of all Capital Improvement Costs and associated debt attributable to the Metro System components of the Pure Water Program under this Section 6.7.2; and/or

6.7.2.2 The sum of all Capital Improvement Costs and associated debt for the full or partial upgrading of the PLWTP to secondary treatment.

Notwithstanding the above, the Capital Expense Rate shall not apply if the PLWTP is actually upgraded to secondary treatment (or beyond) due to: (a) a change in federal or state statutory law making it necessary to upgrade the PLWTP to comply with such new discharge standard; or (b) a final decision by a state or federal court or a federal administrative agency of competent jurisdiction that an NPDES permit modified under section 301(h) & G)(5) of the Clean Water Act is thereby revoked or denied renewal due to a finding that the discharge from the PLWTP violates anti-degradation rules or regulations promulgated under section 403 of the Clean Water Act.

6.7.3 Calculation of Capital Expense Rate . The amount per acre -foot of the Capital Expense Rate shall be determined as follows:

The sum of all Capital Improvement Costs and associated debt attributable to (i) the Metro System components of the Pure Water Program under this Section 6 and (ii) upgrading of the PLWTP to secondary treatment (if any) less
$1.8 billion, as adjusted for inflation each July 1 (starting on July 1, 2019) to reflect the annual percentage change in the Engineering News Records – Los Angeles construction cost index
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the result of which is multiplied by

1.42 (which estimates the total interest on a 30-year State Revolving Fund loan with an interest rate of 2.5%)
the result of which is divided by
The total number of acre feet per year of secondary treated effluent that is expected to be produced by Metro System facilities for the production of Repurified Water over a period of thirty (30) years.

For purposes of this Section 6.7.3, Capital Improvement Costs and associated debt shall include such costs and revenue incurred by the Metro System prior to the effective date of the Agreement.

6.7.4 Year-End Adjustment . At the end of each fiscal year during which the Capital Expense Rate applies, the City shall determine the actual Capital Improvement Costs and associated debt attributable to the Metro System components of the Pure Water Program under this Section 6 and any upgrading of the PLWTP to secondary treatment, and the actual amount of secondary treated effluent produced by Metro System facilities and used for the production of Repurified Water.

Based on the actual cost, interest, and effluent information, the City will recalculate the Capital Expense Rate for the prior fiscal year. The City will credit any future charges or bill for any additional amounts due the quarter after the prior year costs have been audited.

6.7.5 Duration; Expiration. The Capital Expense Rate shall continue until the cost difference between (a) the actual sum of Pure Water Program Capital Improvement Costs and associated debt attributable to the Metro System under Section 6.7 and/or the costs to upgrade the PLWTP and (b ) $1.8 billion (as adjusted for inflation), has been fully paid, or the Agreement expires, whichever is sooner. Notwithstanding, it is the express intent and desire of the City and the Participating Agencies that if the Agreement expi res before the cost difference has been paid through the Capital Expense Rate, that the Capital Expense Rate continue in any extension of this Agreement negotiated by the Parties pursuant to Section 14.2 until the cost difference has been fully paid.

6.8 Amending Pure Water Program Cost Allocation and Revenues – Phase 1. Except as otherwise provided in Section 6.6.2, the Parties may amend any provision in this Section 6 regarding the Finance, Budgeting, and Accounting for the Pure Water Program Cost Allocation and Revenues for Phase 1 in an Administrative Agreement subj ect to the Joint Administrative Approval Process set forth in Section 15.

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7. FINANCE, BUDGETING, AND ACCOUNTING: PURE WATER PROGRAM COST ALLOCATION AND REVENUES – PHASE 2

7.1 Pure Water Program – Phase 2. The Second Phase of the Pure Water Program (“Phase 2”) shall create up to an additional 53 MGD of Repurified Water at Phase 2 facilities. The Parties agree to incorporate all terms relating to Phase 2 into this Agreement through an Administrative Agreement subject to the Joint Administrative Approval Process set forth in Section 15, subject to the requirements set forth in this Section 7 below.

7.2 Costs Excluded As Metro System Costs.

Costs Excluded from Metro System Costs for Phase 2 shall be identified in an Administrative Agreement subject to the Joint Administrative Approval Process and approvals set forth in Section 15. However, the Administrative Agreement must reflect that all of the following PWP Phase 2 costs, including Capital Improvement Costs, Operation and Maintenance Costs, and other related costs (including administration, insurance, claims, and overhead) shal l be excluded from Metro System Costs for the purposes of calcul ating the annual Phase 2 FAB rate, and shall be City Water Utility PW Costs:

7.2.1 Costs of the Phase 2 Water Repurification System and any Metro System facilities to the extent constructed, modified, expanded, or used for the purpose of treating water beyond secondary treatment (ocean discharge standard under current law). This shall include costs for preliminary treatment, primary treatment, and secondary treatment to the extent such costs are higher than they would otherwise be due to the production of Phase 2 Repurified Water.

7.2.2 Costs for fail -safe disposal, if necessary, for design capacity for Phase 2 Repurified Water, including, but not limited to, any costs associated with the reservation of capacity at the Point Loma Wastewater Treatment Plant.

7.2.3 Costs for the demolition or replacement of existing Metro System facilities with similar facilities for the purpose of making space available for Phase 2 Water Repurification System facilities. Such costs may take into account the current asset value or ma rket value of the existing Metro System facility.

7.2.4 Costs for the Phase 2 methanol feed system.

7.2.5 Costs for Phase 2 RSDP disposal including, but not limited to, pump stations, pipelines, retreatment, ocean outfall, and monitoring.

7.2.6 50% of the costs for the MBR Tanks and system for Phase 2.

7.2.7 All membrane integrity monitoring systems for Phase 2.

7.2.8 All Phase 2 systems downstream of MBR’s.

7.3 Revenue Sharing for Repurified Water – Phase 2. Terms regarding revenue sharing for Repurified Water for Phase 2 shall be identified in an Administrative Agreement subject to the I -==- =

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Joint Administrative Approval Process set forth in Section 15. However, this Administrative Agreement must reflect terms related to Phase 2 revenue sharing for Repurified Water that conceptually mimic those terms set forth in Section 6.6. The Metro System portion of the Repurified Water Revenue for Phase 2 shall be allocated among the City and the Participating Agencies consistent with Section 4.4.2, as may be amended or updated to account for changes in PWP Phase 2.

7.4 Capital Expense Rate – Phase 2. Terms regarding the Capital Expense Rate for Phase 2 shall be identified in an Administrative Agreement subject to the Joint Administrative Approval Process and approvals set forth in Section 15. However, this Administrative Agreement must reflect terms that conceptually mimic the terms in Section 6.7, reflecting a continuation of the Capital Expense Rate through Phase 2 up until the PWP achieves up to 83 MGD of Repurified Water, taking into account production of water suitable for potable reuse occurring at all treatment processes for wastewater upstream from and at the PLWTP. The Pure Water Program Capital Expense Rate costs or revenues attributable to the Metro System shall be assessed or credited consistently with Section 4.4.2, as may be amended or updated to account for changes in PWP Phase 2.

8. FUTURE NEGOTIATIONS AND COOPERATION
This Agreement specifically contemplates Phase 1 and Phase 2 of the Pure Water Program, which consists of new, expanded, or modified Metro System and Water Repurification System facilities projected to produce up to 83 million gallons per day of Repurified Water. The Parties intend to meet and negotiate in good faith regarding the referenced Administrative Agreements identified in this Agreement. All items outside the scope of the Joint Administrative Approval Process shall be negotiated by the Parties through the amendment processes described in Section 16.3, if necessary.

9. THE METRO COMMISSION

9.1 Establishment and Membership. The 1998 Agreement created and established (and the ARA reestablished) the Metro Commission as a commission consisting of one representative from each Participating Agency. On October 25, 2000, the Participating Agencies entered into a Joint Exercise of Power Agreement which created a separate public entity, the Metro Wastewater Joint Powers Authority (“ Metro JPA”), for the purpose, among others, of taking responsibility, actions, and making decisions pertaining to the 1998 Agr eement on behalf of the Participating Agencies. The Metro Commission and the Metro JPA are and shall hereinafter be treated as one and the same entity for all intents and purposes under this Agreement, including for the purpose of accepting and executing t he responsibilities delegated to the Metro JPA in this Agreement. Each Participating Agency shall have the right to appoint a representative of its choice to the Metro Commission/Metro JPA, and the Participating Agency’s appointee to the Metro Commission shall also serve as that Participating Agency’s representative on the Metro JPA Board of Directors. If a Participating Agency is a dependent district whose governing body is that of another independent public agency, that Participating Agency shall be repr esented on the Metro Commission/Metro JPA by a representative appointed by the governing body which shall have no more than one representative no matter how many Participating Agencies it governs. Each member I -==- =

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has one vote in any matter considered by the Metro Commission/Metro JPA. The Metro Commission/Metro JPA shall establish its own meeting schedule and rules of conduct. The City may participate in the Metro Commission on an ex officio, non -voting basis. To t he extent this Agreement expands or amends the powers or purposes set forth in the Metro JPA Joint Exercise of Powers Agreement, the Participating Agencies expressly agree to such expansion or amendment consistent with the terms of this Agreement.

9.2 Advisory Responsibilities of Metro JPA.

9.2.1 The Metro JPA shall act as an advisory body to the Mayor and City Council on policy issues and matters affecting and relating to the Metro System and shall be included in the City’s list of boards and commissions on the City’s website. The City shall present the position of the majority of the Metro JPA to the City’s governing body in written staff reports. The Metro JPA may prepare and submit materials in advance and may appear at any City hearings on Metro System matters and present its position to the governing body of the City.

9.2.2 The Metro JPA may advise the City of its position on any issue relevant to the Metro System.

9.3 Delegation of Decision -Making Authority of the Metro JPA . The Participating Agencies hereby delegate to the Metro JPA the authority to take certain actions pursuant to the approval processes provided in this Agreement, as permitted by law, including but not limited to Government Code 6506. The Participating Agencies agree that the Metro JPA has delegated authority to approve Administrative Agreements on behalf of each Participating Agency pursuant to the process set forth in Section 15. The Participating Agencies agree and acknowledge that the Metro JPA has authority to bind each Participating Agency to Administrative Agreements through the Joint Administrative Approval Process. All Participating Agencies agree to promptly execute Administrative Agreements after approval by the Metro JPA. By signing this Agreement, each Participating Agency is expressly preapproving such actions.

10. DISPUTE RESOLUTION
This Section governs all disputes arising out of this Agreement and any associated Administrative Agreements.

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organization agreed upon by the Parties before having recourse in a court of law. Mediation shall be commenced by sending a Notice of Demand for Mediation to the other Party or Parties to the dispute. A copy of the notice shall be sent to the City, all oth er Participating Agencies, and the Metro JPA.

10.4 Conduct of Mediation . Mediation hearings will be conducted in an informal manner. Discovery shall not be allowed. The discussions, statements, writings and admissions and any offers to compromise during the proceedings will be confidential to the proceedings (pursuant to California Evidence Code sections 1115 - 1128 and 1152) and will not be used for any other purpose unless otherwise agreed by the Parties in writing. The Parties may agree to exchange any information they deem necessary. The Parties involve d in the dispute shall have representatives attend the mediation who are authorized to settle the dispute, though a recommendation of settlement may be subject to the approval of each agency’s boards or legislative bodies. Either Party may have attorneys, witnesses or experts present.

10.6 Performance Required During Dispute . Nothing in this Section shall relieve the City and the Participating Agencies from performing their obligations under this Agreement. The City and the Participating Agencies shall be required to comply with this Agreement, including the performance of all disputed activity and disputed payments, pending the resolution of any dispute under this Agreement.

11. INSURANCE

11.1 City Shall Maintain All Required Insurance.

11.1.1 Throughout the term of this Agreement the City shall procure and maintain in effect liability insurance covering Metro System assets and operations in the same manner, and to the same extent, as the City insures similar assets and operations of the City. S uch insurance may be provided through separate policies for the Metro System, or by consolidating the Metro System with other City assets and operations for insurance purposes. If the Metro System is insured separately, policy limits, deductibles, and self -insured retentions shall be equivalent to what the I -==- =

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City procures for other similar City assets and operations. The City shall maintain all insurance required by law, including workers’ compensation insurance, and may self-insure for certain losses when allowed by law. The proportionate cost of insurance for the Metro System shall be included in the computation of the FAB.

11.1.2 If the Metro System is insured separately, any policy or policies of liability insurance carried by the City for the Metro System shall name the Participating Agencies as additional insureds with evidence of same supplied to each upon request.

11.1.3 Upon request by the Metro JPA or a Participating Agency, the City shall promptly provide written coverage and policy information, including, but not limited to, the scope of coverage, policy limits, deductibles, and self -insured retentions, including infor mation on any claims made against the policies and remaining limits and deductibles.

13. NOTICES REQUIRED UNDER AGREEMENT
The City and each Participating Agency shall give notice when required by this Agreement.

The City shall keep an updated version of Exhibit D, notated with the most recent amendment date, on file with the City Public Utilities Department. The City shall provide a copy of the amended Exhibit D to all Parties by no later than sixty (60) days after amending Exhibit D.

14. EFFECTIVE DATE AND EXPIRATION

14.1 Effective Date. ThisOnce all Parties have executed this Agreement, this Agreement shall be considered effective on July 1 , 2026 irrespective of the fiscal year commencing after execution by the City and all of the Participating Agencies and shall be dated as of the signature date ofon which the last executing Party. For example, irrespective of whether the last executing Partyparty signs this Agreement on September 1, 2025, January 1, 2026, or June 30, 2026, the effective date of the Agreement would be July 1, 2026..

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14.2 Expiration. Subject to the rights and obligations set forth in Section 14.3, unless amended, replaced, or terminated earlier by mutual consent of all the Parties, this Agreement shall expire on June 30, 2065. This Agreement is subject to extension by agreement of the Parties. The Parties shall commence discussions on an agreement to provide wastewater treatment services beyond the year 2065 on or before December 31, 2055, or at such time, if any, that the PLWTP is required to be upgraded to secondary treatm ent. The Parties may create, amend or terminate any associated Administrative Agreements addressing implementation of this Agreement, as provided in this Agreement.

14.3 Contract Capacity Rights Survive Expiration. The Participating Agencies’ Contract Capacity rights and rights to obtain wastewater treatment services from the facilities referred to in, or constructed pursuant to this Agreement shall survive the expiration of the Agreement. Provided, however, for an y Participating Agency to exercise such rights, the Participating Agency shall comply with all the following requirements: (a) provide at least six months’ written notice prior to the expiration of this Agreement; (b) upon expiration of this Agreement, pay their proportional share of Metro System Costs according to the billing methodologies set forth in this Agreement in order to maintain their right(s) to such wastewater treatment services; and (c) agree to recalculate and pay proportional share of future Metro System Costs based on the City’s and all remaining Participating Agencies’ proportionate shares. In the event this Agreement expires and one or more Participating Agency(ies) continue to pay their proportional share of all Metro System Costs, the City shall have the right to continue managing, operating, and expanding the Metro System subject to the same terms set forth in this Agreement, unless otherwise agreed to in writing by and between the City and a Par ticipating Agency. In the event one or more Participating Agency(ies) exercise its/their right(s) to maintain Contract Capacity and wastewater treatment services, such Participating Agency(ies) shall also maintain the right to continue receiving any and al l revenues contemplated by this Agreement, including, but not limited to, Metro System Revenues.

14.4 Abandonment. After June 30, 2065, the City may abandon operation of the Metro System upon delivery of notice to the Participating Agencies ten (10) years in advance of said abandonment. Upon notice by the City to abandon the Metro System, the Parties shall meet and confer over the nature and conditions of such abandonment. In the event the Parties cannot reach agreement, the matter shall be submitted to mediation under Section 10. In the event of abandonment, the City shall retain ownership of all Metro Sys tem assets free of any claim of the Participating Agencies. Abandonment by the City with continued operation by a different entity shall not terminate or affect a Contract Capacity rights of a Participating Agency so long as that Participating Agency has continued to pay their proportional share of Capital Improvement Costs and Operation and Maintenance Costs according to the billing methodologies set forth in this Agreement. Nothing in this language shall be construed to require the City to continue as operator of the Metro System after the ten-year (10) notice period has run.

15. ADMINISTRATIVE AGREEMENTS

15.1 Use and Process for Administrative Agreements.

15.1.1 Purpose. Administrative Agreements are intended to implement the intent of the Parties in an efficient and effective manner without reopening or renegotiating the terms of I -==- =

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this Agreement. Administrative Agreements are limited to addressing issues that are authorized by this Agreement. Administrative Agreements are separate and distinct from Exhibits to this Agreement, and are designed to address procedural, operational, tech nical, and administrative issues. Terms in this Agreement may only be modified through the Joint Administrative Approval Process if this Agreement expressly authorizes the use of an Administrative Agreement.

15.1.2 Amendments, Supplements, or Successors to Administrative Agreements .

Where this Agreement refers to an Administrative Agreement, such reference shall include any amendment(s) to that Administrative Agreement or supplemental or successor Administrative Agreement(s).

15.1.3 Function. Administrative Agreements are made among all the Parties but deal with a specific function or group of like functions, for the benefit of regional wastewater treatment within the Metro System, or for the implementation of this Agreement.

15.1.5 Development and Joint Administrative Approval Process . Any Party can present an Administrative Agreement, or an amendment or supplement thereto, or termination thereof, to the City for approval by way of the Joint Administrative Approval Process set forth in this Section. The City will endeavor in good faith to respond within 60 days of submission of a proposed Administrative Agreement. If the City needs additional time to evaluate the proposed Administrative Agreement, it will advise all Participating Age ncies in writing of the anticipated review time. Once an Administrative Agreement receives City’s Administrative Approval, then, with respect to the Participating Agencies, the proposed Administrative Agreement may be presented to the Metro JPA at a duly noticed meeting for review and a first reading. Sixty (60) days or more after the first reading, after the Metro JPA Directors have had opportunity to consult with their respective agency staff and governing boards, the Administrative Agreement may be presented at a duly noticed meeting for a second reading and approved upon an affirmative vote by no less than two-thirds of the members of the Metro JPA during a duly noticed public meeting (in other words, upon the affirmative vote of at least eight or more o f the twelve members of the Metro JPA, irrespective of how many Metro JPA Directors are present at the meeting, unless the number of Participating Agencies changes).), except that any changes to (i) the FAB, including the Functional Design Methodology required to be approved by way of an Administrative Agreement under Section 5.2.1.3, (ii) how Repurified Water Revenue is shared under Section 6.6, (iii) how the Capital Expense Rate is determined as set forth in Section 6.7; or (iv) how Pure Water Program Cost Allocation and Revenues for Phase 2 are calculated under Section 7, shall require approval by no less than three -quarters of the members of the Metro JPA during a duly noticed public meeting (in other words, upon the affirmative vote of at least nine or more of the twelve members of the Metro JPA, irrespective of how many Metro JPA Director are present at the meeting, unless the number of Participating Agencies changes) . If the second reading does not occur within One Hundred and Twenty (120) days after the first reading, the proposed Administrative Agreement shall no longer be taken into consideration, unless the City and the Metro JPA Directors agree to a

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different timeline. An Administrative Agreement, amendment thereto, or termination thereof, must receive City’s Administrative Approval and at least a two-third affirmative vote by the Metro JPA Directors before it can become effective. Administrative Agre ements are binding contracts as against the City and all Participating Agencies, irrespective of whether or not any Participating Agency’s particular Metro JPA Director voted to approve the agreement or not, or was absent or abstained. The Metro JPA has th e authority to bind the Participating Agencies to Administrative Agreements pursuant to the delegated authority provided to the Metro JPA in Section 9.3 herein.

16. GENERAL

16.1 Exhibits.

16.1.1 Exhibit List. This Agreement references Exhibits A through J. Each exhibit is attached to this Agreement and is incorporated herein by reference. All exhibits to this agreement shall be listed in Exhibit JK, Exhibit List . The City shall update the Exhibit List from time to time each time an Exhibit is amended or revised pursuant to this Agreement.

16.2 Electronic Exhibits and Attachments . Acknowledgement and Acceptance: The Parties hereby acknowledge and agree that the exhibit(s) and attachment(s) related to this Agreement, or any of its associated Administrative Agreements, indicated as an Electronic Exhibits above (collectively, the “ Electronic Exhibits ”) may be in an electronic format that cannot be readily or accurately converted into a physical or printed form. The Parties expressly agree that such Electronic Exhibits shall nonetheless be deemed to b e valid and enforceable attachments to this Agreement and shall be incorporated by reference as if fully set forth herein.

16.2.1 Identification and Access : All Electronic Exhibits shall bear the same Exhibit identifier and name (i.e., Exhibit A – Metro Facilities) set forth in the Exhibit List, and shall be clearly identified as an Electronic Exhibit in the Exhibit List, including a file name, a time stamp of file, and a note indicating the software used to open and view the file, including version.

The Electronic Exhibit shall be loaded on to a CD-ROM, DVD-ROM, or other electronic storage medium that is a write-once medium without the ability to further edit. Each Party shall receive an identical copy of the Electronic Exhibit(s) via identical storage mediums. The City shall ensure that all Participating Agencies have full and unrestricted access to Electronic Exhibits for the duration of the Agreement and any applicable retention period thereafter, including by providing access to any necessary software, applications, or systems required to view, interact with, or manipulate the Electronic Exhibits in their native format; such as thr ough website access via the GIS Online platform: https://sandiego.maps.arcgis.com. No interaction or manipulation of any Electronic Exhibit shall in any way constitute a bona fide change or amendment to the Electronic Exhibit.

16.2.2 Storage and Security: Each Party shall be responsible for securely storing and maintaining the integrity of the Electronic Exhibits in their possession or control. This includes, but is not limited to, implementing and maintaining reasonable and appropriate technical, administrative, and physical safeguards to protect the confidentiality, availability, and integrity of the Electronic Exhibits, and to prevent unauthorized access, disclosure, alteration, or destruction thereof.

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16.2.3 Authentication and Admissibility : The Parties hereby stipulate and agree that the Electronic Exhibits shall be deemed to be original documents and authentic for all purposes under applicable law, and that the Parties may rely upon and introduce such Electronic Exhibits as evidence in any proceeding arising out of or relating to this Agreement, without the need for further foundation, authentication, or certification.

16.2.4 Receipt and Completeness: Each Party hereby acknowledges and confirms that they have received, reviewed, and had a reasonable opportunity to inspect all Electronic Exhibits that are attached to and incorporated into this Agreement as of the Effective Date. By executing this Agreement, each Party represents and warrants that, to the best of their knowledge, the Electronic Exhibits are complete, accurate, and free from material errors, omissions, or defects.

The Parties further agree to notify the other Party promptly upon discovering any discrepancies or inaccuracies in the Electronic Exhibits, and to cooperate in good faith to resolve any such issues in a timely manner.

16.2.5 Amendments and Modifications to Electronic Exhibits : Any amendments or modifications to the Electronic Exhibits shall be made in accordance with the procedures set forth in this Agreement for amending or modifying the terms and conditions hereof, and any such amended or modified Electronic Exhibits shall b e deemed to replace and supersede any prior version thereof. Amended Electronic Exhibits shall also be loaded onto a new and separate CD - ROM, DVD-ROM, or other electronic storage medium that is a write -once medium without the ability to further edit. Each Party shall receive identical copies of the Electronic Exhibits via identical storage mediums. Amended Electronic Exhibits shall bear identical Exhibit Identifiers as their predecessor exhibits, but with a different suffix (for example, Exhibit A, when amended, shall be identified as Exhibit A-1, a subsequent amendment shall be identified as Exhibit A-2, etc.).

16.3 Amendments to Agreement. There shall be four (4) ways to amend, modify, and/or change the terms set forth in this Agreement:

16.3.1 Amendments. Except as set forth in Sections 16.3.2, 16.3.3, and 16.3.4, amendments to this Agreement require the approval of all Parties. Such amendments must be in writing and signed by a duly authorized representative from each Party. Unless specifically referenced as being subject to one of the approval mechanisms set forth in Sections 16.3.2, 16.3.3, or 16.3.4 below, any amendment, modification, and/or changes to the terms of this Agreement must occur pursuant to this Section 16.3.1. This provision controls over all other provisions in this Agreement.

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(c) Changes to Exhibit E (Methodology for Contract Capacity Transfers)
(d) Revisions to FAB as specifically set forth in Section 5.2.1.3, except as provided therein
(e) Changes to Finance, Budgeting, and Accounting System of Charges as specifically set forth in Section 5.11
(f) Changes to Costs Excluded from Metro System Costs – Phase 1 as specifically set forth in Section 6.3
(g) Amending the formula for Repurified Water Revenue as specifically set forth in Section 6.6.2
(h) Changes to Finance, Budgeting, and Accounting for the Pure Water Program Cost Allocation and Revenues for Phase 1 as specifically set forth in Section 6.8
(i) Certain terms relating to Phase 2 as specifically set forth in Section 7.1
(j) Changes to Costs Excluded from Metro System Costs – Phase 2 as specifically set forth in Section 7.2
(k) Terms regarding revenue sharing for Repurified Water for Phase 2 as specifically set forth in Section 7.3
(l) Terms regarding the Capital Expense Rate for Phase 2 as specifically set forth in Section 7.4
(m) Creation, changes, amendments, modifications to, or terminations of any Administrative Agreements as specifically set forth in Article 15.

16.3.3 Two-Party Approval. As set forth in this Agreement, Two -Party Approval requires the City’s Administrative Approval and a two-thirds (2/3) vote or greater of the Metro JPA Directors present at a duly noticed Metro JPA public meeting. The following actions may be taken subject to Two-Party Approval:
(a) Determinations regarding liability as specifically set forth in Section 2.5.5
(b) Contract Capacity Transfers – Decreases as specifically set forth in Section 4.4.3.2
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(c) Changes to Strength measurements as specifically set forth in Section 4.5.2

16.3.4 City Administrative Approval. As set forth in this Agreement, the City’s Administrative Approval requires discussion, evaluation, and approval by the Director of the City of San Diego’s Public Utilities Department or their designee. The City may, in the City’s sole discretion, refer a decision subject to the City’s Administrative Approval to the City Council for a recommendation, approval, or other action. No action is required on the part of a Participating Agency. The following actions may be taken subject to the City’s Administrative Approval:
(a) Transfers of Contract Capacity as specifically set forth in Section 3.2
(b) Reductions in Metro System Capacity as specifically set forth in Section 3.4
(c) Amending Exhibit B as specifically set forth in Section 3.6 (d) Amending Exhibit A as specifically set forth in Section 4.2 (e) Contract Capacity Transfers – Increases as specifically set forth in Section 4.4.3.1
(f) Changes to Exhibit F (Metro System Flow Formulas and Sampling Locations) as specifically set forth in Section 4.5.1
(g) Changes to FAB to include measurements required by law as specifically set forth in Section 5.2.1.3
(h) Changes to Exhibit H if CWA changes their rate structure as specifically set forth in Section 6.6.2
(i) Changes to Exhibit D (Notice) as specifically set forth in Section 13.

16.4 Construction of Agreement.

16.4.1 Drafting of Agreement . It is acknowledged that the City and the Participating Agencies, with the assistance of competent counsel, have participated in the drafting of this Agreement and that no ambiguity should be construed for or against the City or any Participating Agency on account of such drafting.

16.4.2 Entire Agreement . The City and each Participating Agency represent, warrant and agree that no promise or agreement not expressed herein has been made to them, that this Agreement contains the entire agreement between the Parties, that this Agreement supersedes any and all prior agreements or understandings between the Parties unless otherwise provided herein, and that the terms of this Agreement are contractual and not a mere recital; that in executing this Agreement, no Party is relying on any statement or representation made by the other Party, or I -==- =

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the other Party’s representatives concerning the subject matter, basis or effect of this Agreement other than as set forth herein; and that each Party is relying solely on its own judgement and knowledge.

16.4.3 Agreement Binding on All; No Third-Party Beneficiaries. This Agreement shall be binding upon and shall inure to the benefit of each of the Parties, and each of their respective successors, assigns, trustees or receivers. All the covenants contained in this Agreement are for the express benefit of each and all such Parties. This Agreement is not intended to benefit any third parties, and any such third-party beneficiaries are expressly disclaimed.

16.4.4 Severability.

16.4.4.1 Should any provision of this Agreement or any associated Administrative Agreement be held invalid or illegal, such invalidity or illegality shall not invalidate the whole of the Agreement, but, rather, the Agreement shall be construed as if it did not contain the invalid or illegal part, and the rights and obligations of the Parties shall be construed and enforced accordingly except to the extent that enforcement of the Agreement without the invalidated provision would materially and adversely frustrate eit her the City’s or a Participating Agency’s essential objectives set forth in this Agreement or the applicable Administrative Agreement.

16.4.4.2 Should a court determine that one or more components of the allocation of costs set forth in this Agreement or any associated Administrative Agreement places the City or a Participating Agency in violation of Article XIII D, Section 6 of the California Constitution with respect to their ratepayers, such components shall no longer be of force or effect.

In such an event, the City and the Participating Agencies shall promptly meet to renegotiate the violative component of the cost allocation to comply with Ar ticle XIII D, Section 6 of the California Constitution, and use the dispute resolution process in Section 10 of this Agreement if an agreement cannot be reached through direct negotiation.

16.4.4.3 Should a state or federal agency provide a final, written determination that the method of allocating Pure Water Program Capital Improvement Costs under this Agreement violates the requirements of state or federal grants or loans which are, or will be, used to fund the wastewater components of the Pure Water Program, such allocation method will no longer be of any force or effect. In such an event, the allocation of Repurified Water Revenue and the Capital Expense Rate will continue to be based on the Parties’ actual payments to fund the Pure Water Program Capital Improvement Costs attributable to the Metro System. The City and the Participating Agencies shall also promptly meet to negotiate an alternative cost allocation method that would comply with such grant or loan funding requirements.

16.4.5 Choice of Law . This Agreement and any of its associated Administrative Agreements shall be construed and enforced pursuant to the laws of the State of California.

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District, East Otay Mesa Sewer Maintenance District, Lakeside Sanitation District, Spring Valley Sanitation District, and Winter Gardens Sewer Maintenance District.

16.5 Declarations Re: Agreement.

16.5.1 Understanding of Intent and Effect of Agreement . The Parties expressly declare and represent that they have read the Agreement and that they have consulted with their respective counsel regarding the meaning of the terms and conditions contained herein. The Parties further expressly declare and represe nt that they fully understand the content and effect of this Agreement and they approve and accept the terms and conditions contained herein, and that this Agreement is executed freely and voluntarily.

16.6 Right to Make Other Agreements. Nothing in this Agreement limits or restricts the right of the City or the Participating Agencies to make separate agreements among themselves, including through joint powers agreements, without the need to amend this Agreement, provided that such agreements are consistent with this Agreement. Nothing in this Agreement or Section 6 limits or restricts the right of the City or the Participating Agencies to enter into separate agreements regarding the industrial pretreatment program, or for the purchase or sale of Repurified Water produced by the Water Repurification System, or sharing in City Water Utility PW Costs ; however, s uch agreements shall not affect the cost allocation and Metro System revenues delineated in Section 5.

16.7 Statute of Limitations to Resolve Billing Issues. Notwithstanding any longer statute of limitations in State law, if the City or a Participating Agency wishes to dispute a bill (including, but not limited to, an audited bill or an audit reconciliation) on the basis of an alleged overpayment or underpayment arising under this Agreement, the Party alleging the dispute must provide written notice regarding the disputed bill to all Parties to this Agreement promptly upon discovery of such a billing issue. The w ritten notice shall invoke or reference this Section. The Parties agree that such refunds or collections shall not accrue for more than three (3) years from the date that such billing is received by the Participating Agency, or one (1) year from the date t hat an audited reconciliation is received by the Participating Agency, whichever date is later. The City and the Participating Agencies hereby waive any applicable statute of limitations available under State law that exceed the time frames set forth in th is Section 16.7. Upon receipt of the written notice regarding the billing dispute, any Participating Agency wishing to participate in the resolution of the dispute shall be allowed to do so and to present evidence to all Parties in support of their position. The involved Parties’ determination regarding the outcome of the billing dispute, including any related adjustments to each Participating Agency’s share of net Metro System costs or revenues resulting from the resolution of such billing issues, shall be final. Nothing in this section relieves a Participating Agency from its obligations to make timely payments under this I -==- =

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Agreement irrespective of whether or not a bill is being disputed. If the Parties are unable to resolve a billing dispute, the Parties shall utilize the dispute resolution processes in this Agreement.

16.8 Counterparts and Electronic Signatures . This Agreement may be executed in counterparts. This Agreement shall become operative as soon as one counterpart hereof has been executed by each Party. The counterparts so executed shall constitute one Agreement notwithstanding that the signatures of all Parties do not appear on the same page. A faxed, .pdf, or other electronic copy of the fully executed original version of this Agreement shall have the same legal effect as an executed original for all purposes. Electronic signatures (including but not limited to signatures via DocuSign) shall be acceptable, enforceable, and shall have the same legal effect as an original signature.

16.9 Transparency. Upon request, the City shall promptly provide each Participating Agency with access to all records and information reflecting Flow and Strength of sewage in the Metro System, including, but not limited to, Flow data from all Metro System meters, worksheets or calculations that are used by City to develop cost information for any costs contemplated by this Agreement, and any Strength or other data utilized by the City when calculating annual sewage Flow and/or other costs imposed pursuant to this Agreement (including, but not limited to, pretreatment costs). The Parties shall work in good faith together to ensure the Participating Agencies have reasonable and full transparency under this Agreement.

16.10 Incorporation of Recitals. All of the recitals set forth in this Agreement, and all of the exhibits attached to this Agreement, are by this reference incorporated in and made a part of this Agreement as though fully set forth herein.

CITY OF CHULA VISTA

Name:

Title:

Approved as to Form:

Name:

Title:

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CITY OF CORONADO

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF DEL MAR

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF EL CAJON

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF IMPERIAL BEACH

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF LA MESA

Name:

Title:

Approved as to Form:

Name:

Title:

LEMON GROVE SANITATION DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF NATIONAL CITY

Name:

Title:

Approved as to Form:

Name:

Title:

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OTAY WATER DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

PADRE DAM MUNICIPAL WATER

DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF POWAY

Name:

Title:

Approved as to Form:

Name:

Title:

CITY OF SAN DIEGO

Name:

Title:

Approved as to Form:

Name:

Title:

SAN DIEGO COUNTY SANITATION

DISTRICT

Name:

Title:

Approved as to Form:

Name:

Title:

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EXHIBIT A

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EXHIBIT B

DISTRIBUTION OF W ASTEWATER SYSTEM CAPACITY RIGHTS

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EXHIBIT C

ADMINISTRATIVE PROTOCOL ON ALLOCATION OF OPERATING RESERVES

AND DEBT SERVICE COVERAGE TO PARTICIPATING AGENCIES

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EXHIBIT D

NOTICE LISTING

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EXHIBIT E

METHODOLOGY FOR CONTRACT CAPACITY TRANSFERS

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EXHIBIT F

METRO SYSTEM FLOW FORMULAS AND SAMPLING LOCATIONS

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EXHIBIT G

SAMPLE OF INTEREST CALCULATION

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EXHIBIT H

SUMMARY OF BILLINGS FROM COUNTY WATER AUTHORITY SHOWING COSTS

FOR UNTREATED WATER

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EXHIBIT I

LIST OF ADMINISTRATIVE AGREEMENTS
NO. TITLE EFFECTIVE
DATE

AMENDMEN
T DATE

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EXHIBIT J

SAMPLE FAB CALCULATION

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EXHIBIT JK

B Distribution of Wastewater System Capacity Rights
C Administrative Protocol on Allocation of Operating Reserves and Debt Service Coverage to Participating Agencies
D Notice Listing
E Methodology for Contract Capacity Transfers
F Metro System Flow Formulas and Sampling Locations
G Sample of Interest Calculation
H Summary of Billings from County Water Authority Showing Costs for Untreated Water
I List of Administrative Agreements
J Sample FAB Calculation
JK Exhibit List
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City Council
Agenda Report
Agenda Item 5.

DATE: 07/28/2026
TO: Honorable Mayor and City Councilmembers
FROM: Jeremiah Larson, Chief of Police
SUBJECT: 2026-2027 Office of Traffic Safety (OTS) Selective Traffic Enforcement Program (STEP) Grant
RECOMMENDATION:

BACKGROUND:

The California Office of Traffic Safety (OTS) provides funding to local law enforcement agencies through the STEP Grant to support operations that enhance traffic safety. These funds are intended to reduce traffic-related injuries and fatalities through specialized enforcement efforts and public awareness.

The 2026-2027 STEP grant will provide reimbursement to the El Cajon Police Department in the amount of $83,000 to be used for Officer overtime and DUI checkpoint supplies. The grant will support the Police Department's ability to conduct a variety of targeted enforcement activities, including DUI checkpoints and saturation patrols, bicycle and pedestrian safety, motorcycle safety, and distracted driving operations. Additionally, the grant will fund department participation in conferences and training events aligned with traffic safety goals and objectives.

CALIFORNIA ENVIRONMENTAL QUALITY ACT:

Approval of the OTS-STEP Grant and related project expenses for law enforcement activities, inspections, and education is not subject to the California Environmental Quality Act ("CEQA"). It is exempt pursuant to the State CEQA Guidelines sections 15321(b) and 15378(b)(5).

FISCAL IMPACT:

The California Office of Traffic Safety STEP Grant (OTS27 ALC, OTS27NOALC, OTS27DSDRV) will provide $83,000 in funding with no matching funds required. These funds will only be used by the Police Department for the projects listed above or as indicated by approved modifications to the grant.

Prepared By: Jennifer Lytle, Senior Management Analyst
Reviewed By: Jeremiah Larson, Police Chief
Approved By: Graham Mitchell, City Manager
Attachments
Grant Agreement

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State of California – Office of Traffic Safety

GRANT AGREEMENT

GRANT NUMBER
PT27047

1. GRANT TITLE
Selective Traffic Enforcement Program (STEP)

2. NAME OF AGENCY 3. Grant Period
El Cajon From:

To:
10/01/2026
09/30/2027 4. AGENCY UNIT TO ADMINISTER GRANT
El Cajon Police Department

5. GRANT DESCRIPTION
Best practice strategies will be conducted to reduce the number of persons killed and injured in crashes involving alcohol and other primary crash factors. The funded strategies may include impaired driving enforcement, enforcement operations focusing on primary crash factors, distracted driving, night-time seat belt enforcement, special enforcement operations encouraging motorcycle safety, enforcement and public awareness in areas with a high number of bicycle and pedestrian crashes, and educational programs. These strategies are designed to earn media attention thus enhancing the overall deterrent effect.

6. Federal Funds Allocated Under This Agreement Shall Not Exceed:

Allocation is contingent upon availability of federal funds. $83,000.00

7. TERMS AND CONDITIONS: The parties agree to comply with the terms and conditions of the following which are by this reference made a part of the Agreement:
• Schedule A – Problem Statement, Goals and Objectives and Method of Procedure • Schedule B – Detailed Budget Estimate and Sub-Budget Estimate (if applicable) • Schedule B-1 – Budget Narrative and Sub-Budget Narrative (if applicable) • Exhibit A – Certifications and Assurances
• Exhibit B* – OTS Grant Program Manual
• Exhibit C – Grant Electronic Management System (GEMS) Access

*The item shown with an asterisk (*), is hereby incorporated by reference and made a part of this agreement as if attached hereto. This document can be viewed at the OTS home web page under Grants: www.ots.ca.gov.

Use of OTS Grant Agreement template in lieu of the California Model Agreement (CMA) The California Office of Traffic Safety (OTS) utilizes its standardized OTS Grant Agreement template for awards. The format, structure, and uniformity of the OTS Grant Agreement template allows for processing through Grant Electronic Management System (GEMS). OTS’s approach to using the OTS Grant Agreement template is consistent with the California Model Agreement (CMA) developed by University of California Office of the President (UCOP) and directed by the Department of General Service (DGS). For more information, please review the OTS Grant Program Manual.

Pre-Agreement Work
No work shall commence and no costs shall be incurred prior to the grant start date or the grant agreement being fully signed and executed. Any such costs are incurred at the grantee’s own risk and may not be reimbursed.

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8. Approval Signatures
We, the officials named below, hereby swear under penalty of perjury under the laws of the State of California that we are duly authorized to legally bind the Grant recipient to the grant terms and conditions described herein.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.

A. GRANT DIRECTOR B. AUTHORIZING OFFICIAL
NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

Brian Ehlers

Sergeant

[email protected]

(619) 579-3325

100 Civic Center Way
El Cajon, CA 92020
NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

Jeremiah Larson

Police Chief

[email protected]

(619) 579-3300

100 Civic Center Way
El Cajon, CA 92020

(Signature) (Date) (Signature) (Date)

C. FISCAL OFFICIAL

D. AUTHORIZING OFFICIAL OF OFFICE OF TRAFFIC SAFETY
NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

Lindsey Johnson

Management Analyst

[email protected]

(619) 579-3300

100 Civic Center Way
El Cajon, CA 92020
NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

Stephanie Dougherty

Director

[email protected]

(916) 509-3030

2208 Kausen Drive, Suite 300
Elk Grove, CA 95758

(Signature) (Date) (Signature) (Date)

E. ACCOUNTING OFFICER OF OFFICE OF TRAFFIC SAFETY 9. SAM INFORMATION NAME: Mary Khang

SAM #:

REGISTERED
ADDRESS:

CITY:

ZIP+4:

GUANBKQWK6J3

200 Civic Center Way
El Cajon, CA 92020
El Cajon
92020-3916
ADDRESS: 2208 Kausen Drive Suite 300

Sacramento, CA 95758

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10. PROJECTED EXPENDITURES
FUND CFDA ITEM/APPROPRIATION F.Y. CHAPTER STATUTE PROJECTED

EXPENDITURES

AGREEMENT
TOTAL $83,000.00

AMOUNT ENCUMBERED BY THIS DOCUMENT
I CERTIFY upon my own personal knowledge that the budgeted funds for the current budget year are available for the period and purpose of the expenditure stated above, notwithstanding allocations contingent on availability of federal funds.
$83,000.00

PRIOR AMOUNT ENCUMBERED FOR THIS

AGREEMENT
$ 0.00
OTS ACCOUNTING OFFICER’S SIGNATURE DATE SIGNED TOTAL AMOUNT ENCUMBERED TO DATE $83,000.00

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State of California – Office of Traffic Safety

GRANT AGREEMENT
Schedule A

GRANT NUMBER
PT27047

1. PROBLEM STATEMENT

Describe the city, county, or jurisdiction this grant will impact.

This grant will impact the City of El Cajon in the County of San Diego, State of California. The City Of El Cajon is comprised of approximately 14.5 square miles with a US Census population of 103,291 (2024 census) which has grown from the previous year. El Cajon is part of the greater San Diego metropolitan area.

El Cajon is one of the most demographically diverse cities in the region with a substantial immigrant and refugee population. The diverse population includes a large portion of refugees from Iraq, Syria, Afghanistan, the Dominican Republic, and some African countries. El Cajon is home to the second largest population of Iraqi Chaldeans in the United States. An estimated 30% of the city’s population identify as immigrants.

El Cajon has several major thoroughfares within the east county region including the Interstate 8 freeway, Jamacha Road, Second Street, Washington Avenue, Avocado Avenue, and Fletcher Parkway; all of which see significant traffic and serve to connect El Cajon with neighboring communities.

Describe the problem(s) to be addressed, supported by current and relevant crash data. (most recent calendar year data/stats).

The City of El Cajon has witnessed a trend of rising or consistent numbers in various crash categories over recent years. According to the O.T.S. Crash Ranking Results, EL Cajon falls within the "B" Group based on it's population. Despite the reduction in pedestrian-related injuries in 2021, pedestrian safety remains a significant concern. Internal records reveal increase in pedestrian fatalities since 2013, even during lockdowns when pedestrian fatalities remained high. Records from the El Cajon Police Department's Traffic Division indicate a high number of traffic-related pedestrian fatalities, with five fatalities in the 2023 calendar year compared to two in 2022. In 2024, we experienced a total of seven fatality related crashes resulting in eight deaths. In the 2025 calendar year we experienced a total of eight fatalities from crashes, five pedestrians, one motorcyclist, one driver, and one subject riding a motorized scooter.

In 2025, significant cases included a Watson homicide case involving the death of a motorcycle driver and serious injury to the juvenile passenger on the motorcycle. The party most at fault was found to be under the influence of a combination of narcotics and alcoholic beverages. Efforts in this case secured an 11-year 8- month prison sentence for the DUI driver. DUI crashes continue to be a concern with a total of 67 DUI related crashes resulting in 50 reported injuries in the 2025 calendar year. As an agency, we arrested 134 DUI drivers in 2025.

Additional significant cases involved a vehicle versus two pedestrians resulting in the death of one pedestrian, a vehicle versus large delivery truck case resulting from a street racing incident which caused the death of a young adult male driving at excessive speed, and a vehicle versus 12-year old hit-and-run, resulting in the later arrest and pending prosecution of the hit-and-run driver. In the 2025 calendar year, El Cajon documented 734 crash reports including 514 injury related crashes, which resulted in a total of 722 parties reporting injuries. Amongst those statistics are 148 misdemeanor hit-and-run crashes and 36 felony hit-and-run crashes. The highest primary crash factors remain steady as speed related offenses, right-of- way violations, with DUI, and other PCF crash, tying for third highest PCF. Although 2025 saw 55 fewer reported crashes, there was an increase of 54 more reported injuries from the previous year.

In 2024, the El Cajon Police Department documented 789 crashes with 477 of those involving injury and a total of 668 parties reporting injuries. As an agency, ECPD effected 152 DUI arrests in the 2024 calendar year with 73 DUI related crashes and 48 DUI related injuries. There were a total of 245 hit-and-run crashes, 191 misdemeanor crashes and the remaining 54 involving felony hit-and-run. In 2024, there were seven fatality-related crashes resulting in eight deaths. Five of the fatality crashes involved vehicles versus

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pedestrians, two fatality crashes were vehicle versus motorcycle, and one crash involved a vehicle versus parked vehicles.

In 2025, the Traffic Division noted an increasing trend in E-Bike and E-Scooter-related crashes as these devices appear to be growing in numbers with students traveling to and from school. This is an on-going point of concern with many neighboring agencies in the greater San Diego area. We also experienced one E-Scooter-related fatality involving an adult rider without a helmet who passed away within one week of the crash due to crash related injuries.

The OTS STEP grant has played a crucial role in enabling the El Cajon Police Department to carry out proactive enforcement details. These initiatives have focused on addressing known issues, such as pedestrian-bicycle safety, impaired driving, pedestrian enforcement, and motorcycle safety. Given continued trends and statistical rankings, we strongly believe that this grant should be awarded to El Cajon. Our primary focus will be on addressing key crash factors, including speed and right-of-way violations, enhancing motorcycle safety, and improving pedestrian safety. We are committed to educating both school- aged children and adults on a wide range of traffic safety issues, with a particular emphasis on pedestrian safety and general traffic safety. It is an additional goal to continue to educate the users of E-Bikes and E- Scooters and to address illegal use of E-Motorcycles on public Roadways.

It is worth highlighting that alcohol and drug impairment have proven to be significant factors in many of our serious crashes. In 2021, the number of drivers under the age of 21 who had been drinking increased by eight. Additionally, alcohol-related crashes rose from 48 to 73. In 2025, Impairment is also suspected to be a factor in four other fatal crashes, although these cases involve only one person each and will not result in prosecution due to the drivers being deceased. DUI-related crashes continue to be a significant factor in documented crashes and fatality crashes.

Define the target population the grant intends to serve and how they are affected by the problem(s).

The El Cajon Police Department’s mission is to serve all residents of El Cajon in a fair and equitable manner. The City of El Cajon boasts an ethnically and linguistically diverse population within approximately

14.5 square miles with the center of the city mainly comprised of high density housing. Many residents in El Cajon are refugees from the Middle East, Afghanistan, Haiti, and Syria. El Cajon hosts the second highest population of Iraqi Chaldeans in the United States. As a whole, many residents of El Cajon experience financial challenges, including our refugee populations. El Cajon’s average household income is lower than surrounding cities, leading to less resources for our residents to include our unhoused populations and populations residing in board-and-care facilities, or similar facilities. All of these factors combine resulting in high pedestrian traffic based on a lack of resources, or access to transport, and also ethnic traditions of traveling by foot. Many of these factors contribute to our high vehicle-versus-pedestrian percentage of fatality crashes. As a whole, all of these populations benefit from proactive enforcement operations, which help to reduce serious and fatality crashes. These details also result in continued contact between the Police Department and our population, lending to educational opportunities for vehicle drivers, bicyclists, and pedestrians throughout the city.

2. PERFORMANCE MEASURES
A. Goals:

1. Reduce the number of persons killed in traffic crashes.

2. Reduce the number of persons injured in traffic crashes.

3. Reduce the number of pedestrians killed in traffic crashes.

4. Reduce the number of pedestrians injured in traffic crashes.

5. Reduce the number of bicyclists killed in traffic crashes.

6. Reduce the number of bicyclists injured in traffic crashes.

7. Reduce the number of persons killed in alcohol-involved crashes.

8. Reduce the number of persons injured in alcohol-involved crashes.

9. Reduce the number of persons killed in drug-involved crashes.

10. Reduce the number of persons injured in drug-involved crashes.

11. Reduce the number of persons killed in alcohol/drug combo-involved crashes.

12. Reduce the number of persons injured in alcohol/drug combo-involved crashes.

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13. Reduce the number of motorcyclists killed in traffic crashes.

14. Reduce the number of motorcyclists injured in traffic crashes.

15. Reduce hit & run fatal crashes.

16. Reduce hit & run injury crashes.

17. Reduce nighttime (2100 - 0259 hours) fatal crashes.

18. Reduce nighttime (2100 - 0259 hours) injury crashes.

B. Objectives: Target Number

1. Issue a news release announcing the kick-off of the grant by December 31st. The kick-off news releases and media advisories, alerts, and materials must be emailed to the OTS Public Information Officer at [email protected], and copied to your OTS Coordinator, for approval 7 days prior to the issuance date of the release.
1 2. Participate and report data (as required) in the following campaigns; Quarter 1:

National Pedestrian Safety Month, National Walk to School Day, National Teen Driver Safety Week, NHTSA Winter Mobilization; Quarter 3: National Distracted Driving Awareness Month, National Motorcycle Safety Month, National Bicycle Safety Month, National Click it or Ticket Mobilization; Quarter 4: National Speed Prevention Campaigns, NHTSA Summer Mobilization, National Child Passenger Safety Week, and California's Pedestrian Safety Month.
12 3. Develop (by December 31) and/or maintain a “DUI BOLO” program to notify patrol and traffic officers to be on the lookout for identified repeat DUI offenders with a suspended or revoked license as a result of DUI convictions. Updated DUI BOLOs should be distributed to patrol and traffic officers monthly. Report on the outcomes of the “DUI BOLO” program.
12 4. Send law enforcement personnel to the NHTSA Standardized Field Sobriety Testing (SFST) (minimum 16 hours) POST-certified training. 2 5. Send law enforcement personnel to the NHTSA Advanced Roadside Impaired Driving Enforcement (ARIDE) 16 hour POST-certified training. 2 6. Send law enforcement personnel to the Drug Recognition Expert (DRE) training (classroom and field training must be completed).
1 7. Conduct DUI/DL Checkpoints. A minimum of 1 checkpoint should be conducted during the NHTSA Winter Mobilization and 1 during the Summer Mobilization. To enhance the overall deterrent effect and promote high visibility, it is recommended the grantee issue an advance press release and conduct social media activity for each checkpoint. For combination DUI/DL checkpoints, departments should issue press releases that mention DL's will be checked at the DUI/DL checkpoint. Signs for DUI/DL checkpoints should read "DUI/Driver's License Checkpoint Ahead." OTS does not fund or support independent DL checkpoints. Only on an exception basis and with OTS pre-approval will OTS fund checkpoints that begin prior to 1800 hours. When possible, DUI/DL Checkpoint screeners should be DRE- or ARIDE-trained.
2 8. Conduct DUI Saturation Patrol operation(s). 5

9. Conduct Traffic Enforcement operation(s), including but not limited to, primary crash factor violations.
2 10. Conduct highly publicized Distracted Driving enforcement operation(s) targeting drivers using hand held cell phones and texting.
2 11. Conduct highly publicized Motorcycle Safety enforcement operation(s) in areas or during events with a high number of motorcycle incidents or crashes resulting from unsafe speed, DUI, following too closely, unsafe lane changes, improper turning, and other primary crash factor violations by motorcyclists and other drivers. 2 12. Conduct highly publicized pedestrian and/or bicycle enforcement operation(s) in areas or during events with a high number of pedestrian and/or bicycle crashes resulting from violations made by pedestrians, bicyclists, and drivers. 3 13. Conduct Traffic Safety educational presentation(s) with an effort to reach community members. Note: Presentation(s) may include topics such as distracted driving, DUI, speed, bicycle and pedestrian safety, seat belts and child passenger safety.
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14. Send law enforcement personnel to DUI Checkpoint Planning and Management training.
1 3. METHOD OF PROCEDURE
A. Phase 1 – Program Preparation (1st Quarter of Grant Year) • The department will develop operational plans to implement the “best practice” strategies outlined in the objectives section.
• Conduct all training needed to implement the program, in the first quarter. • Purchase all grant related supplies and materials to implement the program, in the first quarter. • Items with a unit cost of $5,000 more (including tax and shipping) must comply with the Buy America Act.
• In order to develop/maintain the “DUI BOLOs,” research will be conducted to identify repeat DUI offenders with a suspended or revoked license as a result of DUI convictions. The DUI BOLO may include the driver’s name, last known address, DOB, description, current license status, and the number of times suspended or revoked for DUI. DUI BOLOs should be updated and distributed to traffic and patrol officers at least monthly. • Implementation of the STEP grant activities will be accomplished by deploying personnel at high crash locations.

Media Requirements
Issue a news release approved by the OTS PIO announcing the kick-off of the grant by December 31 and after the grant is signed and executed, but no sooner than October 1, the start of the grant year. The kick-off release must be approved by the OTS PIO. If you are unable to meet the December 31 deadline to issue a kick-off press release, communicate the reasons to your OTS grant coordinator and OTS PIO.

B. Phase 2 – Program Operations (Throughout Grant Year) Media Requirements

The following requirements are for all grant-related activities:
• Send all media advisories, alerts, videos, graphics, artwork, posters, radio/PSA/video scripts, storyboards, digital and/or print educational materials for grant-related activities to the OTS PIO at [email protected] for approval and copy your OTS grant coordinator. Optimum lead time would be 7 days before the scheduled release but at least 3 business days prior to the scheduled release date for review and approval is appreciated.
• Send all PowerPoint presentations, online presentations and trainings for grant-related activities to the OTS PIO at [email protected] for approval and copy your OTS grant coordinator. Certified training courses are EXEMPT from the approval process.
• The OTS PIO is responsible for the approval of the design and content of materials. The agency understands OTS PIO approval is not authorizing approval of budget expenditure or cost. Any cost approvals must come from the OTS grant coordinator. • Pre-approval is not required when using any OTS-supplied template for media advisories, news releases, social media graphics, videos or posts, or any other OTS-supplied educational material.

However, copy the OTS PIO at [email protected] and your OTS grant coordinator when any material is distributed to the media and public, such as a news release, educational material, or link to social media post.
• If an OTS-supplied template, educational material, social media graphic, post or video is substantially changed, the changes shall be sent to the OTS PIO at [email protected] for approval and copy your OTS grant coordinator.
• News releases, social media posts and alerts on platforms such as NextDoor and Nixle reporting immediate and time-sensitive grant activities (e.g. enforcement operations, day of event highlights or announcements, event invites) are EXEMPT from the OTS PIO approval process.

The OTS PIO and your OTS grant coordinator should still be notified when the grant-related activity is happening (e.g. car seat checks, bicycle rodeos, community presentations, DUI checkpoints, etc.).
• Enforcement activities such as warrant and probation sweeps, court stings, etc. that are embargoed or could impact operations by publicizing in advance are EXEMPT from the PIO approval process. However, announcements and results of activities should still be copied to the OTS PIO at [email protected] and your OTS grant coordinator with the embargoed date and time or with “INTERNAL ONLY: DO NOT RELEASE” message in subject line of email.

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• Any earned or paid media campaigns for TV, radio, digital or social media that are part of a specific grant objective, using OTS grant funds, or designed and developed using contractual services by a subgrantee, requires prior approval.
• Social media posts highlighting state or national traffic safety campaigns (Distracted Driving Month, Motorcycle Safety Awareness Month, etc.), enforcement operations (DUI checkpoints, etc.), or any other grant-related activity such as Bicycle rodeos, presentations, or events, are highly encouraged but do not require prior approval.
• Submit a draft or rough-cut of all digital, printed, recorded or video material (brochures, posters, scripts, artwork, trailer graphics, digital graphics, social posts connected to an earned or paid media campaign grant objective) to the OTS PIO at [email protected] and copy your OTS grant coordinator for approval prior to the production or duplication. • Use the following standard language in all press, media, and printed materials, space permitting:

Funding for this program was provided by a grant from the California Office of Traffic Safety, through the National Highway Traffic Safety Administration. • Space permitting, include the OTS logo on all grant-funded print materials, graphics and paid or earned social media campaign grant objective; consult the OTS PIO and copy your OTS grant coordinator for specifics, format-appropriate logos, or if space does not permit the use of the OTS logo.
• Email the OTS PIO at [email protected] and copy your OTS grant coordinator at least 21 days in advance, or when first confirmed, a short description of any significant grant-related traffic safety event or program, particularly events that are highly publicized beforehand with anticipated media coverage so the OTS has sufficient notice to arrange for attendance and/or participation in the event. If unable to attend, email the OTS PIO at [email protected] and your OTS grant coordinator brief highlights and/or results, including any media coverage (broadcast, digital, print) of the event within 7 days following significant grant-related event or program. The OTS PIO and your OTS grant coordinator should still be notified in advance when the grant-related activity is happening (e.g. car seat checks, bicycle rodeos, community presentations, DUI checkpoints, etc.).
• Any news releases, work plans, scripts, storyboards, artwork, graphics, videos or any educational or informational materials that received OTS PIO approval in a prior grant year must be resubmitted for approval in the current grant year.
• For additional guidance, refer to the OTS Grants Materials Approval Process Guidelines and FAQs .
• Email the OTS PIO at [email protected] or your OTS grant coordinator for consultation when changes from any of the above requirements might be warranted.

C. Phase 3 – Data Collection & Reporting (Throughout Grant Year)

1. Prepare and submit grant claim invoices (due January 30, April 30, July 30, and October 30)

2. Prepare and submit Quarterly Performance Reports (QPR) (due January 30, April 30, July 30, and October 30)
• Collect and report quarterly, appropriate data that supports the progress of goals and objectives. • Provide a brief list of activity conducted, procurement of grant-funded items, and significant media activities. Include status of grant-funded personnel, status of contracts, challenges, or special accomplishments.
• Provide a brief summary of quarterly accomplishments and explanations for objectives not completed or plans for upcoming activities.
• Collect, analyze and report statistical data relating to the grant goals and objectives.

4. METHOD OF EVALUATION
Using the data compiled during the grant, the Grant Director will complete the “Final Evaluation” section in the fourth/final Quarterly Performance Report (QPR). The Final Evaluation should provide a brief summary of the grant’s accomplishments, challenges and significant activities. This narrative should also include whether goals and objectives were met, exceeded, or an explanation of why objectives were not completed.

5. ADMINISTRATIVE SUPPORT
This program has full administrative support, and every effort will be made to continue the grant activities after grant conclusion.

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State of California – Office of Traffic Safety

GRANT AGREEMENT
Schedule B

GRANT NUMBER
PT27047

FUND NUMBER CATALOG

NUMBER (CFDA)

FUND DESCRIPTION TOTAL AMOUNT
164ID-27 20.608 Minimum Penalties for Repeat
Offenders for Driving While
Intoxicated
$45,000.00
402PT-27 20.600 State and Community Highway
Safety
$30,000.00
405e DDA-27 20.616 Distracted Driving Awareness $8,000.00

COST CATEGORY FUND
NUMBER

UNIT COST OR
RATE

UNITS TOTAL COST TO
GRANT
A. PERSONNEL COSTS

Straight Time
$0.00
Overtime
DUI/DL Checkpoints 164ID-27 $10,803.06 2 $21,606.00
DUI Saturation Patrols 164ID-27 $3,686.05 5 $18,430.00
Benefits - 164OT @ 4.14% 164ID-27 $40,036.37 1 $1,658.00 Traffic Enforcement 402PT-27 $4,269.67 2 $8,539.00
Motorcycle Safety Enforcement 402PT-27 $3,669.51 2 $7,339.00 Pedestrian and Bicycle Enforcement 402PT-27 $3,669.51 3 $11,009.00 Benefits- 402OT @ 4.14% 402PT-27 $26,886.88 1 $1,113.00 Distracted Driving Enforcement 405e DDA-
27 $3,840.99 2 $7,682.00
Benefits- 405OT @ 4.14% 405e DDA-
27 $7,681.97 1 $318.00
Category Sub-Total $77,694.00
B. TRAVEL EXPENSES
In State Travel 402PT-27 $2,000.00 1 $2,000.00
$0.00
Category Sub-Total $2,000.00
C. CONTRACTUAL SERVICES
$0.00
Category Sub-Total $0.00
D. EQUIPMENT
$0.00
Category Sub-Total $0.00
E. OTHER DIRECT COSTS
DUI Checkpoint Supplies 164ID-27 $1,146.12 1 $1,146.00
PAS Device/Calibration Supplies 164ID-27 $540.00 4 $2,160.00 Category Sub-Total $3,306.00
F. INDIRECT COSTS
$0.00
Category Sub-Total $0.00
GRANT TOTAL $83,000.00

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State of California – Office of Traffic Safety

GRANT AGREEMENT
Schedule B-1

GRANT NUMBER
PT27047

BUDGET NARRATIVE

PERSONNEL COSTS
DUI/DL Checkpoints - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

DUI Saturation Patrols - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

Benefits - 164OT @ 4.14% - Claimed amounts must reflect actual benefit costs for overtime hours charged to the grant.

Total Benefits: 4.14%
Traffic Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

Motorcycle Safety Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

Pedestrian and Bicycle Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

Benefits- 402OT @ 4.14% - Claimed amounts must reflect actual benefit costs for overtime hours charged to the grant.

Total Benefits: 4.14%
Distracted Driving Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

Benefits- 405OT @ 4.14% - Claimed amounts must reflect actual benefit costs for overtime hours charged to the grant.

Total Benefits: 4.14%

TRAVEL EXPENSES
In State Travel - Costs are included for appropriate staff to attend conferences and training events supporting the grant goals and objectives and/or traffic safety. Local mileage for grant activities and meetings is included. Anticipated travel may include the OTS Traffic Safety Law Enforcement Forum, OTS Traffic Safety Summit, GHSA Annual Meeting in Anaheim. All conferences, seminars or training not specifically identified in the Budget Narrative must be approved by OTS. All travel claimed must be at the agency approved rate. Per Diem may not be claimed for meals provided at conferences when registration fees are paid with OTS grant funds.

CONTRACTUAL SERVICES
-

EQUIPMENT
-

OTHER DIRECT COSTS
DUI Checkpoint Supplies - On-scene supplies needed to conduct sobriety checkpoints. Costs may include 28" traffic cones, MUTCD compliant traffic signs, MUTCD compliant high visibility vests (maximum of 10), traffic counters (maximum of 2), generator, gas for generators, lighting, reflective banners, electronic flares, PAS Device Supplies, PAS Calibration Supplies, heater, propane for heaters, fan, anti-fatigue mats, and canopies. Additional items may be purchased if approved by OTS. The cost of food and beverages will not be reimbursed.

PAS Device/Calibration Supplies - Preliminary alcohol screening device to detect the presence of alcohol in a person's breath and calibration supplies to ensure accuracy. Costs may include mouth pieces, gas and accessories.

INDIRECT COSTS
-

STATEMENTS/DISCLAIMERS
There will be no program income generated from this grant.

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Salaries may include wages, salaries, special compensations, or authorized absences such as annual leave and sick leave provided the cost for the individual employee is (a) reasonable for the services rendered, and (b) follows an appointment made in accordance with state or local laws and rules and meets federal requirements.

Any non-grant funded vacancies created by reassignment to a grant-funded position must be filled at the expense of the grantee agency.

Nothing in this agreement shall be interpreted as a requirement, formal or informal, that a particular law enforcement officer issue a specified or predetermined number of citations in pursuance of the goals and objectives here under.

The OTS grant funded activities must be separate from other grant funded program activities and maintained under separate accounting tracking codes (example: the same DUI checkpoint may not be funded by both the CHP Cannabis Tax Fund and the OTS).

Benefits for personnel costs can only be applied to straight time or overtime hours charged to the grant.

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Appendix A to Part 1300—Certifications and Assurances for Highway Safety Grants (23 U.S.C. Chapter 4 or Section 1906, Public Law 109-59, as amended by Section 25024, Public Law 117- 58)

The officials named on the grant agreement, certify by way of signature on the grant agreement signature page, that the Grantee Agency complies with all applicable Federal statutes, regulations, and directives and State rules, guidelines, policies, and laws in effect with respect to the periods for which it receives grant funding.

Applicable provisions include, but are not limited to, the following:

GENERAL REQUIREMENTS
The State will comply with applicable statutes and regulations, including but not limited to:

• 23 U.S.C. Chapter 4—Highway Safety Act of 1966, as amended; • Sec. 1906, Public Law 109-59, as amended by Sec. 25024, Public Law 117-58; • 23 CFR part 1300—Uniform Procedures for State Highway Safety Grant Programs; • 2 CFR part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards;
• 2 CFR part 1201—Department of Transportation, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

NONDISCRIMINATION
(applies to subrecipients as well as States)

The State highway safety agency [and its subrecipients] will comply with all Federal statutes and implementing regulations relating to nondiscrimination (“Federal Nondiscrimination Authorities”). These include but are not limited to:

• Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin);
• 49 CFR part 21 (entitled Non-discrimination in Federally -Assisted Programs of the Department of Transportation—Effectuation of Title VI of the Civil Rights Act of 1964); • 28 CFR 50.3 (U.S. Department of Justice Guidelines for Enforcement of Title VI of the Civil Rights Act of 1964);
• The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects);
• Federal-Aid Highway Act of 1973, (23 U.S.C. 324 et seq.), and Title IX of the Education Amendments of 1972, as amended (20 U.S.C. 1681-1683 and 1685-1686) (prohibit discrimination on the basis of sex);
• Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794 et seq.), as amended, (prohibits discrimination on the basis of disability) and 49 CFR part 27; • The Age Discrimination Act of 1975, as amended, (42 U.S.C. 6101 et seq.), (prohibits discrimination on the basis of age);
• The Civil Rights Restoration Act of 1987, (Pub. L. 100-209), (broadens scope, coverage, and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the
Federal aid recipients, subrecipients and contractors, whether such programs or activities are Federally- funded or not);
• Titles II and III of the Americans with Disabilities Act (42 U.S.C. 12131-12189) (prohibits discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing) and 49 CFR parts 37 and 38

State of California – Office of Traffic Safety

GRANT AGREEMENT
Exhibit A

GRANT NUMBER
PT27047

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The preceding statutory and regulatory cites hereinafter are referred to as the “Acts” and “Regulations,” respectively.

GENERAL ASSURANCES

In accordance with the Acts, the Regulations, and other pertinent directives, circulars, policy, memoranda, and/or guidance, the Recipient hereby gives assurance that it will promptly take any measures necessary to ensure that:

“No person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity, for which the Recipient receives Federal financial assistance from DOT, including NHTSA.”

The Civil Rights Restoration Act of 1987 clarified the original intent of Congress, with respect to Title VI of the Civil Rights Act of 1964 and other non-discrimination requirements (the Age Discrimination Act of 1975, and Section 504 of the Rehabilitation Act of 1973), by restoring the broad, institutional-wide scope and coverage of these nondiscrimination statutes and requirements to include all programs and activities of the Recipient, so long as any portion of the program is Federally assisted.

SPECIFIC ASSURANCES

More specifically, and without limiting the above general Assurance, the Recipient agrees with and gives the following Assurances with respect to its Federally assisted Highway Safety Grant Program:

1. The Recipient agrees that each “activity,” “facility,” or “program,” as defined in 49 CFR part 21 will be (with regard to an “activity”) facilitated, or will be (with regard to a “facility”) operated, or will be (with regard to a “program”) conducted in compliance with all requirements imposed by, or pursuant to the Acts and the Regulations.

2. The Recipient will insert the following notification in all solicitations for bids, Requests For Proposals for work, or material subject to the Acts and the Regulations made in connection with all Highway Safety Grant Programs and, in adapted form, in all proposals for negotiated agreements regardless of funding source:
“The [name of Recipient], in accordance with the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 U.S.C 2000d to 2000d-4) and the Regulations, hereby notifies all bidders that it will affirmatively ensure that in any contract entered into pursuant to this advertisement, disadvantaged business enterprises will be afforded full and fair opportunity to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, or national origin in consideration for an award.”

3. The Recipient will insert the clauses of appendix A and E of this Assurance (also referred to as DOT order 1050.2A) [1] in every contract or agreement subject to the Acts and the Regulations.

4. The Recipient will insert the clauses of appendix B of DOT Order 1050.2A, as a covenant running with the land, in any deed from the United States effecting or recording a transfer of real property, structures, use, or improvements thereon or interest therein to a Recipient.

5. That where the Recipient receives Federal financial assistance to construct a facility, or part of a facility, the Assurance will extend to the entire facility and facilities operated in connection therewith.

6. That where the Recipient receives Federal financial assistance in the form of, or for the acquisition of, real property or an interest in real property, the Assurance will extend to rights to space on, over, or under such property.

7. That the Recipient will include the clauses set forth in appendix C and appendix D of this DOT Order 1050.2A, as a covenant running with the land, in any future deeds, leases, licenses, permits, or similar instruments entered into by the Recipient with other parties:
a. for the subsequent transfer of real property acquired or improved under the applicable activity, project, or program; and
b. for the construction or use of, or access to, space on, over, or under real property acquired or improved under the applicable activity, project, or program.

8. That this Assurance obligates the Recipient for the period during which Federal financial assistance is extended to the program, except where the Federal financial assistance is to provide, or is in the § 2 l .23(b) and (e) of

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form of, personal property, or real property, or interest therein, or structures or improvements thereon, in which case the Assurance obligates the Recipient, or any transferee for the longer of the following periods:
a. the period during which the property is used for a purpose for which the Federal financial assistance is extended, or for another purpose involving the provision of similar services or benefits; or
b. the period during which the Recipient retains ownership or possession of the property.

9. The Recipient will provide for such methods of administration for the program as are found by the Secretary of Transportation or the official to whom he/she delegates specific authority to give reasonable guarantee that it, other recipients, sub-recipients, sub- grantees, contractors, subcontractors, consultants, transferees, successors in interest, and other participants of Federal financial assistance under such program will comply with all requirements imposed or pursuant to the Acts, the Regulations, and this Assurance.

10. The Recipient agrees that the United States has a right to seek judicial enforcement with regard to any matter arising under the Acts, the Regulations, and this Assurance.

By signing this ASSURANCE, the State highway safety agency also agrees to comply (and require any sub- recipients, sub-grantees, contractors, successors, transferees, and/or assignees to comply) with all applicable provisions governing NHTSA's access to records, accounts, documents, information, facilities, and staff. You also recognize that you must comply with any program or compliance reviews, and/or complaint investigations conducted by NHTSA. You must keep records, reports, and submit the material for review upon request to NHTSA, or its designee in a timely, complete, and accurate way. Additionally, you must comply with all other reporting, data collection, and evaluation requirements, as prescribed by law or detailed in program guidance.

The State highway safety agency gives this ASSURANCE in consideration of and for obtaining any Federal grants, loans, contracts, agreements, property, and/or discounts, or other Federal-aid and Federal financial assistance extended after the date hereof to the recipients by the U.S. Department of Transportation under the Highway Safety Grant Program. This ASSURANCE is binding on the State highway safety agency, other recipients, sub-recipients, sub-grantees, contractors, subcontractors and their subcontractors', transferees, successors in interest, and any other participants in the Highway Safety Grant Program. The person(s) signing below is/are authorized to sign this ASSURANCE on behalf of the Recipient.

THE DRUG-FREE WORKPLACE ACT OF 1988 (41 U.S.C. 8103)

The Subgrantee will provide a drug-free workplace by:
a. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the grantee's workplace, and specifying the actions that will be taken against employees for violation of such prohibition; b. Establishing a drug-free awareness program to inform employees about:

1. The dangers of drug abuse in the workplace;

2. The grantee's policy of maintaining a drug-free workplace;

3. Any available drug counseling, rehabilitation, and employee assistance programs;

4. The penalties that may be imposed upon employees for drug violations occurring in the workplace;

5. Making it a requirement that each employee engaged in the performance of the grant be given a copy of the statement required by paragraph (a); c. Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the grant, the employee will—

1. Abide by the terms of the statement;

2. Notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than five days after such conviction; d. Notifying the agency within ten days after receiving notice under subparagraph (c)(2) from an employee or otherwise receiving actual notice of such conviction; e. Taking one of the following actions, within 30 days of receiving notice under subparagraph (c)(2), with respect to any employee who is so convicted—

1. Taking appropriate personnel action against such an employee, up to and including termination;

2. Requiring such employee to participate satisfactorily in a drug abuse assistance or

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rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency;
f. Making a good faith effort to continue to maintain a drug-free workplace through implementation of all of the paragraphs above.

POLITICAL ACTIVITY (HATCH ACT)
(applies to subrecipients as well as States)

The State will comply with provisions of the Hatch Act (5 U.S.C. 1501-1508), which limits the political activities of employees whose principal employment activities are funded in whole or in part with Federal funds.

CERTIFICATION REGARDING FEDERAL LOBBYING
(applies to subrecipients as well as States)

CERTIFICATION FOR CONTRACTS, GRANTS, LOANS, AND COOPERATIVE AGREEMENTS

The undersigned certifies, to the best of his or her knowledge and belief, that:

1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;

2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions;

3. The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, subgrants, and contracts under grant, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

RESTRICTION ON STATE LOBBYING
(applies to subrecipients as well as States)

None of the funds under this program will be used for any activity specifically designed to urge or influence a State or local legislator to favor or oppose the adoption of any specific legislative proposal pending before any State or local legislative body. Such activities include both direct and indirect (e.g., “grassroots”) lobbying activities, with one exception. This does not preclude a State official whose salary is supported with NHTSA funds from engaging in direct communications with State or local legislative officials, in accordance with customary State practice, even if such communications urge legislative officials to favor or oppose the adoption of a specific pending legislative proposal.

CERTIFICATION REGARDING DEBARMENT AND SUSPENSION
(applies to subrecipients as well as States)

INSTRUCTIONS FOR PRIMARY TIER PARTICIPANT CERTIFICATION (STATES)

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1. By signing and submitting this proposal, the prospective primary tier participant is providing the certification set out below and agrees to comply with the requirements of 2 CFR parts 180 and 1200.

2. The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective primary tier participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the prospective primary tier participant to furnish a certification or an explanation shall disqualify such person from participation in this transaction.

3. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the prospective primary tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default or may pursue suspension or debarment.

4. The prospective primary tier participant shall provide immediate written notice to the department or agency to which this proposal is submitted if at any time the prospective primary tier participant learns its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

5. The terms covered transaction, civil judgment, debarment, suspension, ineligible, participant, person, principal, and voluntarily excluded, as used in this clause, are defined in 2 CFR parts 180 and 1200. You may contact the department or agency to which this proposal is being submitted for assistance in obtaining a copy of those regulations.

6. The prospective primary tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction.

7. The prospective primary tier participant further agrees by submitting this proposal that it will include the clause titled “Instructions for Lower Tier Participant Certification” including the “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transaction,” provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions and will require lower tier participants to comply with 2 CFR parts 180 and 1200.

8. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart

9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any prospective lower tier participants, each participant may, but is not required to, check the System for Award Management Exclusions website
( https://www.sam.gov/).

9. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

10. Except for transactions authorized under paragraph 6 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate the transaction for cause or default.

CERTIFICATION REGARDING DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS—PRIMARY TIER

COVERED TRANSACTIONS

1. The prospective primary tier participant certifies to the best of its knowledge and belief, that it and

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its principals:
a. Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency;
b. Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; c. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and d. Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State, or local) terminated for cause or default.

2. Where the prospective primary tier participant is unable to certify to any of the Statements in this certification, such prospective participant shall attach an explanation to this proposal.

INSTRUCTIONS FOR LOWER TIER PARTICIPANT CERTIFICATION

1. By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below and agrees to comply with the requirements of 2 CFR parts 180 and 1200.

2. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension or debarment.

3. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

4. The terms covered transaction, civil judgment, debarment, suspension, ineligible, participant, person, principal, and voluntarily excluded, as used in this clause, are defined in 2 CFR parts 180 and 1200. You may contact the person to whom this proposal is submitted for assistance in obtaining a copy of those regulations.

5. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated.

6. The prospective lower tier participant further agrees by submitting this proposal that it will include the clause titled “Instructions for Lower Tier Participant Certification” including the “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transaction,” without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions and will require lower tier participants to comply with 2 CFR parts 180 and 1200.

7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart

8. Nothing contained in the foregoing shall be construed to require establishment of a system of

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records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

9. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension or debarment.

CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION—LOWER TIER

COVERED TRANSACTIONS

1. The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency.

2. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

BUY AMERICA
(applies to subrecipients as well as States)

The State and each subrecipient will comply with the Buy America requirement (23 U.S.C. 313) when purchasing items using Federal funds. Buy America requires a State, or subrecipient, to purchase with Federal funds only steel, iron and manufactured products produced in the United States, unless the Secretary of Transportation determines that such domestically produced items would be inconsistent with the public interest, that such materials are not reasonably available and of a satisfactory quality, or that inclusion of domestic materials will increase the cost of the overall project contract by more than 25 percent. In order to use Federal funds to purchase foreign produced items, the State must submit a waiver request that provides an adequate basis and justification for approval by the Secretary of Transportation.

CERTIFICATION ON CONFLICT OF INTEREST
(applies to subrecipients as well as States)

GENERAL REQUIREMENTS
No employee, officer, or agent of a State or its subrecipient who is authorized in an official capacity to negotiate, make, accept, or approve, or to take part in negotiating, making, accepting, or approving any subaward, including contracts or subcontracts, in connection with this grant shall have, directly or indirectly, any financial or personal interest in any such subaward. Such a financial or personal interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or personal interest in or a tangible personal benefit from an entity considered for a subaward. Based on this policy:

1. The recipient shall maintain a written code or standards of conduct that provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents. a. The code or standards shall provide that the recipient's officers, employees, or agents may neither solicit nor accept gratuities, favors, or anything of monetary value from present or potential subawardees, including contractors or parties to subcontracts. b. The code or standards shall establish penalties, sanctions, or other disciplinary actions for violations, as permitted by State or local law or regulations.

2. The recipient shall maintain responsibility to enforce the requirements of the written code or standards of conduct.

DISCLOSURE REQUIREMENTS

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No State or its subrecipient, including its officers, employees, or agents, shall perform or continue to perform under a grant or cooperative agreement, whose objectivity may be impaired because of any related past, present, or currently planned interest, financial or otherwise, in organizations regulated by NHTSA or in organizations whose interests may be substantially affected by NHTSA activities. Based on this policy:

1. The recipient shall disclose any conflict of interest identified as soon as reasonably possible, making an immediate and full disclosure in writing to NHTSA. The disclosure shall include a description of the action which the recipient has taken or proposes to take to avoid or mitigate such conflict.

2. NHTSA will review the disclosure and may require additional relevant information from the recipient.

If a conflict of interest is found to exist, NHTSA may (a) terminate the award, or (b) determine that it is otherwise in the best interest of NHTSA to continue the award and include appropriate provisions to mitigate or avoid such conflict.

3. Conflicts of interest that require disclosure include all past, present, or currently planned organizational, financial, contractual, or other interest(s) with an organization regulated by NHTSA or with an organization whose interests may be substantially affected by NHTSA activities, and which are related to this award. The interest(s) that require disclosure include those of any recipient, affiliate, proposed consultant, proposed subcontractor, and key personnel of any of the above. Past interest shall be limited to within one year of the date of award. Key personnel shall include any person owning more than a 20 percent interest in a recipient, and the officers, employees or agents of a recipient who are responsible for making a decision or taking an action under an award where the decision or action can have an economic or other impact on the interests of a regulated or affected organization.

PROHIBITION ON USING GRANT FUNDS TO CHECK FOR HELMET USAGE (applies to subrecipients as well as States)

The State and each subrecipient will not use 23 U.S.C. Chapter 4 grant funds for programs to check helmet usage or to create checkpoints that specifically target motorcyclists.

POLICY ON SEAT BELT USE

In accordance with Executive Order 13043, Increasing Seat Belt Use in the United States, dated April 16, 1997, the Grantee is encouraged to adopt and enforce on-the-job seat belt use policies and programs for its employees when operating company-owned, rented, or personally-owned vehicles. The National Highway Traffic Safety Administration (NHTSA) is responsible for providing leadership and guidance in support of this Presidential initiative. For information and resources on traffic safety programs and policies for employers, please contact the Network of Employers for Traffic Safety (NETS), a public-private partnership dedicated to improving the traffic safety practices of employers and employees. You can download information on seat belt programs, costs of motor vehicle crashes to employers, and other traffic safety initiatives at www.trafficsafety.org. The NHTSA website ( www.nhtsa.gov) also provides information on statistics, campaigns, and program evaluations and references.

POLICY ON BANNING TEXT MESSAGING WHILE DRIVING

In accordance with Executive Order 13513, Federal Leadership On Reducing Text Messaging While Driving, and DOT Order 3902.10, Text Messaging While Driving, States are encouraged to adopt and enforce workplace safety policies to decrease crashes caused by distracted driving, including policies to ban text messaging while driving company-owned or rented vehicles, Government-owned, leased or rented vehicles, or privately-owned vehicles when on official Government business or when performing any work on or behalf of the Government. States are also encouraged to conduct workplace safety initiatives in a manner commensurate with the size of the business, such as establishment of new rules and programs or re- evaluation of existing programs to prohibit text messaging while driving, and education, awareness, and other outreach to employees about the safety risks associated with texting while driving.

City Council
Agenda Report
Agenda Item 6.

DATE: 07/28/2026
TO: Honorable Mayor and City Councilmembers
FROM: Nate Prescott, Senior Management Analyst
SUBJECT: Consideration to Approve Resolution of Intent to Establish a Downtown El Cajon Community Benefit District (CBD); Authorization for City Manager or Designee to vote “Yes” on the ballot; and Acceptance of the Management District Plan and the Engineer’s Report
RECOMMENDATION:

That the City Council:

Receives report and petition drive results;1.

2. Accepts the Management District Plan and the Engineer’s Report for the Proposed CBD.3.

BACKGROUND:

The Downtown El Cajon Property-Based Improvement District (PBID) was formed in 2011 to improve the economic well-being of businesses in downtown El Cajon. In 2024, the City Council adopted the Community Benefit District Ordinance to allow for the creation of a Community Benefit District in 2026-2027 in the event the PBID did not intend to renew the PBID.

The Downtown District, led by their governing board, the Downtown El Cajon Business Partners (DECBP), has a strong history of well attended events and activities in Downtown El Cajon, and with their 2025 hiring of New City America to manage and administrate the existing district, services have drastically increased and improved.

On April 23, 2026, the City Council heard a presentation from City Staff and DECBP Staff outlining this process to form a proposed new Downtown El Cajon Community Benefit District (“CBD”). DECBP initiated the first step to mail out petitions to form the CBD in late April.

Because the City owns land within the proposed CBD, the City Council voted on April 23, 2026 to authorize the City Manager or designee to vote “Yes” in the petition in support of the creation of the CBD.

Management District Plan
In order to form a community benefit district, there must be a Management District Plan (“MDP”) prepared. The MDP, which is referenced in the Resolution of Intent and attached in this agenda packet as Attachment 2, outlines the priorities and services of the proposed CBD. this agenda packet as Attachment 2, outlines the priorities and services of the proposed CBD.

The MDP outlines the extent of the proposed services, the proposed cost of the various services, and explains the assessment methodology applied to each property. Per State law, the MDP must also include a detailed engineer’s report prepared by a registered professional engineer in California that supports all the proposed assessments in the MDP. The engineer’s report is included as Attachment 3. The DECBP approved the MDP in 2026.

The MDP proposes services and cost breakdowns as follows:

Total Budget $793,225 Civil Sidewalks/Safety and Cleanliness $476,000 (rounded) Regular sidewalk and gutter sweeping
Periodic sidewalk steam cleaning
Beautification of the Downtown El Cajon CBD
Enhanced trash emptying (over and above city services)
Timely graffiti removal, within 72 hours as necessary
Maintenance of existing and new public spaces
Maintenance of the Prescott Promenade
Set up and take down of special events
Installation and maintenance of flowers throughout the Downtown El Cajon CBD (outside of medians)
Personnel to manage in-house or contracted maintenance and any security teams District Identity and Placemaking $119,000 (rounded) Website development and updating
Traditional events done by the GDECIA (new 501 c3)
Social media, public relations firm
Enhancing current City holiday and seasonal decorations Branding of Downtown El Cajon properties so a positive image is promoted to the public Activation of Prescott Promenade
Banner programs
Public art displays and promotion of the Rea Street Art District Public space design and improvements
Personnel to manage in-house or contracted public relations, website maintenance, or social media contractors
Administration/Program Management $174,000 (rounded) Staff and administrative costs, contracted or in-house
Directors and Officers and General Liability Insurance
Office-related expenses
Office and equipment rent
Financial reporting and accounting
Legal work
Contingency $24,225 (rounded) Delinquencies, City/County fees, reserves.

Petition and Balloting
In April 2026, DECBP mailed a petition to the affected property owners concerning the creation of the new CBD. As of July 28, 2026, DECBP will submit petitions to the City signed by property owners in the proposed CBD who will pay more than thirty percent of the assessments proposed to be levied in connection with such CBD as required by El Cajon Municipal Code section 2.90.100 which petitions will be on file with the City Clerk and available for public inspection.

Upon submission of the petition with the required number of signatures, the City Council may consider initiating proceedings to start the formation of the proposed CBD by approving the Resolution of Intent found in Attachment 1. If approved, the Resolution of Intent would set a noticed public hearing on September 15, 2026, and authorize the City Clerk to initiate the ballot process for the affected property owners. The property owners will have 45 days in which to return the ballots. The ballots will be mailed out by the City Clerk no later than July 30, 2026, and must be returned by the conclusion of the public hearing scheduled on September 15, 2026. At the public hearing, the City will tabulate the votes and determine if there is a majority protest against the imposition of the assessment in connection with the CBD, in which case the CBD will not be formed. A majority protest exists if the assessment ballots submitted, and not withdrawn, in opposition to the proposed assessment exceed the assessment ballots submitted, and not withdrawn, in its favor, weighting those assessment ballots by the amount of the proposed assessment to be imposed upon the identified parcel for which each assessment ballot was submitted. If no majority protest exists, then the Council could consider forming the CBD at that time.

It is important to note, however, that if the election to create the Community Benefit District fails, the current iteration of the PBID will expire on December 31, 2026, with no mechanism to replace it. As such, while the City would realize a savings of approximately $98,000 in assessment fees, it would also assume total responsibility for the maintenance of the now-former PBID district. The City would also have to determine if downtown events (i.e. car show, concerts, and Holiday Lights on Main) would be viable given current budget constraints.

City Owned Properties
Because the City of El Cajon owns land within the proposed CBD, if the Council approves the Resolution of Intent today, the City will also receive a ballot to consider approval of the formation of the CBD. The City would pay approximately 12.37% of the total assessment based on its ownership of properties. The increase in enhanced services that the proposed CBD would provide downtown would be much greater than what the City is able to provide on its own. The proposed services for the CBD would benefit the City, business owners, and its residents. Therefore, staff recommends that the City Council authorizes the City Manager, or designee, to vote yes on the ballots for any City-owned properties in the CBD in favor of the proposed CBD.

The City has historically paid approximately $80,000 per year for its portion of the assessments. The creation of the Community Benefit District will increase services provided by the District and the City's portion of the assessments will be $98,148.80. The intent of the District is to increase property values; if successful, this will have a positive impact on General Fund revenues.

CALIFORNIA ENVIRONMENTAL QUALITY ACT:

The proposed action is not subject to the California Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines section 15378(b)(5), as it is an organizational activity of government that will not result in direct or indirect physical changes in the environment. Any future actions directed by the City Council related to the PBID will be assessed in accordance with CEQA.

FISCAL IMPACT:

The creation of the Community Benefit District will increase the City’s portion of the assessment by an estimated $19,000 for a total cost of about $98,148.80, to be paid from the City Manager's 101112 account. Sufficient funds are included in the proposed FY 26-27 Annual Budget.

Prepared By: Nate Prescott, Senior Management Analyst
Reviewed By: Vince DiMaggio, Assistant City Manager
Approved By: Graham Mitchell, City Manager
Attachments
Resolution of Intent
Management District Plan
Engineer's Report
1 RESOLUTION NO. -26

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CAJON DECLARING

ITS INTENTION TO FORM THE DOWNTOWN EL CAJON COMMUNITY BENEFIT DISTRICT PURSUANT TO THE EL CAJON MUNICIPAL CODE CHAPTER 2.90 “COMMUNITY BENEFIT DISTRICTS”; SETTING A TIME AND PLACE FOR A PUBLIC HEARING IN CONNECTION THEREWITH; AND DIRECTING THE MAILING OF

BALLOTS TO IDENTIFIED PROPERTY OWNERS
WHEREAS, El Cajon Municipal Code Chapter 2.90 “Community Benefit Districts” (“Chapter 2.90”) incorporates most of the provisions of the Parking and Business Improvement District Law of 1994 (Streets & Highways Code Section 36600 et seq.) (the "PBID Law") and authorizes the City of El Cajon (“City”) to form Community Benefit Districts; and
WHEREAS, as of July 28, 2026, the City Council has received a petition (the "Petition") requesting the formation of a Community Benefit District to be designated the "Downtown El Cajon Community Benefit District" (the "CBD"); and WHEREAS, the Petition, which has been signed by property owners in the proposed CBD who will pay more than thirty percent of the assessments proposed to be levied in connection the CBD, meets all of the requirements of Section 36621 of the PBID Law, as modified by Chapter 2.90; and
WHEREAS, the amount of assessment attributable to property owned by the same property owner that exceeds twenty percent of the amount of all assessments proposed to be levied, was not included in determining whether the petition is signed by property owners who will pay more than thirty percent of the total amount of assessments proposed to be levied; and
WHEREAS, the Petition is on file in the Office of the City Clerk and available for public inspection as of July 28, 2026, and incorporated herein by reference; and WHEREAS, the City Council now desires to conduct proceedings to form the CBD.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EL CAJON AS FOLLOWS:

1. The foregoing recitals are true and correct and are the findings of the City Council.

2. The City Council hereby determines this action is exempt from the California Environmental Quality Act ("CEQA"), in accordance with State CEQA Guidelines section 15378(b)(2).
2 3. The City Council declares its intention to form the Downtown El Cajon Community Benefit District.

4. The boundaries of the Downtown El Cajon Community Benefit District are generally described as follows:

• The northern boundary of the proposed Downtown El Cajon CBD includes all parcels on Magnolia Avenue that border the Interstate 8 freeway and includes parcels 483-330-022 and 483-330-034 on the northeast side of the Downtown El Cajon CBD as well as parcel 482- 301-006, on the northwest corner.
• The western boundary of the proposed Downtown El Cajon CBD includes the parcels at the intersection of Marshall Avenue and Main Street, including the three corner parcels at that intersection. The three parcels at the intersection of Marshall Avenue and Main Street do NOT include the parcel at the northwest corner of the intersection, as it is a new car dealership which will not benefit from the services of the proposed Downtown El Cajon CBD. The three most western parcels of the Downtown El Cajon CBD shall include parcels 487- 121-041, 487- 281-028 and the entire Metropolitan Transit Station Trolley stop which includes parcels 487- 262-004, 487-262- 009 and 487-273-006.
• The southern boundary of the proposed Downtown El Cajon CBD includes the following parcels that includes the expansion parcels on both sides of El Cajon Boulevard, ending at the roundabout, ending at parcels 487- 321- 026 and 487-323-017. The southern boundary then continues on the south side of Douglas Avenue from parcel 487-342-029 continuing along the south side of Douglas ending at parcel 487-342-019 ending at the intersection of Douglas and Van Houten Avenues. The southern boundary then jogs southward along the east side of Van Houten Avenue ending at parcel 487- 331-009. The southern boundary continues along the south side of Lexington Avenue, running eastward to include all of the parcels on the south side of the street, ending at parcel 488 -241-041. The Downtown El Cajon CBD southern boundary then runs northward along the west side of Avocado Avenue and includes the parcels running eastward on the north side of Douglas Avenue including parcels ending at parcel 488- 233-047 at northwestern intersection of South Lincoln Avenue and Douglas Avenue. • The eastern boundary of the Downtown El Cajon CBD starts at the western side of the intersection of Lincoln Avenue and Main Street, parcel 488-233- 047 and crosses Main Street northward to include parcel 488-113-010. The eastern boundary of the Downtown El Cajon CBD then continues northward and includes parcel 488-113-024 and 488-024-025 and then runs northward 3 on the west side of Ballantyne Street including parcel 488- 040-002. The eastern boundary then runs northwest to include the eastern side of parcels 488-040-011, 488-040-014 on the west side of Connecticut Avenue. The eastern boundary then crosses northward to Wells Avenue including parcels at the northwestern intersection of Wells Avenue and Graves Avenue including parcels 488-010-013. The eastern boundary then continues in a northwestern direction including the eastern side of the parcels fronting Magnolia Avenue from parcel 488- 010-025 ending at parcel 483- 330-022 ending at the intersection of Interstate 8 and Magnolia Avenue. • A map of the proposed CBD boundaries and an appendix of all included parcels can be found in the Management District Plan.

5. The proposed activities of the CBD are briefly described as follows:

• Safety, petty criminal, and homeless/vacancy problems • Sidewalk cleanliness
• Increase tree trimming and replacement of damaged trees and landscaping • Install/improve decorative amenities such as street furniture, fixtures, equipment, and lighting
• Promote and enhance the brand image of Downtown El Cajon • Manage events in and around the Downtown El Cajon CBD, particularly at the Prescott Promenade
• Create a strong social media presence, and facilitate public relations for Downtown El Cajon businesses
• Promote public space development and placemaking

6. The activities of the CBD will be funded through an annual benefit assessment against lots and parcels of real property within the boundaries of the CBD.

The amount of the proposed assessment is $793,225.00 for the First Year (FY27).

7. The initial duration of the CBD is proposed to be 20 years.

8. No bonds will be issued in connection with the CBD.

9. For a complete description of the CBD, and its boundaries, activities, and proposed real property assessment, reference is made to the Management District Plan entitled the "Downtown El Cajon Community Benefit District Management District Plan" and dated April 23, 2026, and to the Engineer's Report entitled the "Downtown El Cajon Community Benefit District Assessment Engineer’s Report" prepared by Edward V.

Henning a California registered Professional Engineer and dated April 23, 2026, each of which is on f ile in the Office of the City Clerk, available for public inspection, and incorporated herein by reference.
4 10. On September 15, 2026 at 3:00 PM or as soon thereafter as the matter may be heard, in the City Council Chambers located at 200 Civic Center Way, El Cajon, CA, the City Council will hold a public hearing on the establishment of the CBD and the levy of assessments. At the public hearing, the City shall consider all objections or protests, if any, to the proposed assessment. At the public hearing, any person shall be permitted to present written or oral testimony. The public hearing may be continued from time to time.

11. The City Clerk is directed to mail notice of the public hearing, including an assessment ballot, to affected property owners in the manner required by Section 53753 of the Government Code and Article XIII D, Section 4 of the California Constitution.

12. Assessment ballots will be accepted and tabulated by the City in the manner set forth in the attached "Procedures for the Completion, Return, and Tabulation of Assessment Ballots", which is incorporated herein by reference and attached as Exhibit A.

13. A majority protest exists if the assessment ballots submitted, and not withdrawn, in opposition to the proposed assessment exceed the assessment ballots submitted, and not withdrawn, in its favor, weighting those assessment ballots by the amount of the proposed assessment to be imposed upon the identified parcel for which each assessment ballot was submitted. If there is a majority protest against the imposition of the assessment in connection with the CBD, the CBD will not be formed.

14. If the CBD is formed, funds may (at the sole discretion of the City Council) be advanced, pursuant to Chapter 2.90, from the City's general fund to permit the operation of the CBD prior to the City's collection of the assessment. Any such advance may not exceed the total anticipated assessment proceeds for the first year of the assessment. Any such advance will be recovered from assessment proceeds, along with interest calculated at the rate set by the State Controller for funds invested in the Local Agency Investment Fund. The duration of any such advance shall not exceed five years. 5 Exhibit A
CITY OF El CAJON PROCEDURES FOR THE COMPLETION, RETURN, AND

TABULATION OF ASSESSMENT BALLOTS
I. Completion of Ballots
• Who may complete a ballot
An assessment ballot may be completed by the owner of the parcel to be assessed. As used in these Procedures, the term "owner" includes the owner's authorized representative. If the owner of the parcel is a partnership, joint tenancy, or tenancy in common, a ballot may be completed by any of the general partners, joint tenants, or tenants in common. Except as set forth below, only one ballot may be completed for each parcel.
• Proportional assessment ballots
If a parcel has multiple owners, any owner may request a proportional assessment ballot.

If the ownership interest of the owner is not shown on the last equalized secured property tax assessment roll, such request must include evidence, satisfactory to the City, of the owner's proportional rights in the parcel. The City will provide the proportional ballot to the owner at the address shown on the assessment roll. Any request for a ballot to be mailed to another location must be made in writing and must include evidence, satisfactory to the City, of the identity of the person requesting the ballot. Each proportional ballot will be marked to show the date on which the ballot was provided, to identify it as a proportional ballot and to indicate the owner's proportional rights in the parcel. The City will keep a record of each proportional ballot provided to an owner. • Duplicate ballots
If an assessment ballot is lost, withdrawn, destroyed or never received, the City will mail or otherwise provide a duplicate ballot to the owner upon request. The duplicate ballot will be marked to show the date on which the ballot was mailed or provided and to identify it as a duplicate ballot or a duplicate proportional ballot. The same procedure applies to duplicate ballots or duplicate proportional ballots which are lost, withdrawn, destroyed, or never received.
• Marking and signing the ballot
To complete an assessment ballot, the owner of the parcel must (1) stamp or mark the appropriate box supporting or opposing the proposed assessment, and (2) sign, under penalty of perjury, the statement on the ballot that the person completing the ballot is the owner of the parcel or the owner's authorized representative. Only one box may be 6 stamped or marked on each ballot. Ballots must be completed in ink and include the original signature of the signer.
• Only assessment ballots provided by the City will be accepted The City will only accept ballots mailed or otherwise provided to owners by the City.

Photoduplicated, facsimile, and electronic copies of completed ballots will not be accepted. II.

II. Return of Ballots
• Who may return ballots
An assessment ballot may be returned by the owner of the parcel or by anyone authorized by the owner to return the ballot.
• Where to return ballots
Ballots may be mailed to the address indicated on the ballot.

Ballots may also be delivered in person to the Office of the City Clerk located at 200 Civic Center Way, El Cajon, CA 92020 (prior to noon/12:00 p.m. on the date scheduled for the public hearing on the proposed assessment), or delivered to the City Clerk at the public hearing on the proposed assessment.

The City will not accept ballots returned to the City via email, facsimile machine, or other electronic method.
• When to return ballots
All returned ballots must be received by the City prior to the time the City Council closes the public input portion of the public hearing on the proposed assessment. The public input portion of the public hearing may be continued from time to time. • Withdrawal of assessment ballots
After returning an assessment ballot to the City, the person who signed the ballot may withdraw the ballot by submitting a written statement to the City directing the City to withdraw the ballot. Such statement must be received by the City prior to the close of the public input portion of the public hearing on the proposed assessment. When ballots for the assessment are tabulated, the City will segregate withdrawn ballots from all other returned ballots. The City will retain all withdrawn ballots and will indicate on the face of such withdrawn ballots that they have been withdrawn.

If any ballot has been withdrawn, the person withdrawing the ballot may request a duplicate ballot.
• Changes to assessment ballots
7 In order to change the contents of a ballot that has been submitted, the person who has signed that ballot may (1) request that such ballot be withdrawn, (2) request that a duplicate ballot be issued, and (3) return the duplicate ballot fully completed. Each of these steps must be completed according to the procedures set forth above.

III. Tabulation of Ballots
• Which assessment ballots will be counted
Only ballots which are completed and returned in compliance with these procedures will be counted. Ballots received by the City after the close of the public input portion of the public hearing on the proposed assessment will not be counted. Ballots which are not signed by the owner will not be counted. Ballots with no boxes marked, or with more than one box marked, will not be counted. Ballots withdrawn in accordance with these procedures will not be counted.

The City will keep a record of each proportional or duplicate ballot mailed or otherwise provided to an owner and will ensure that only one ballot is tabulated for the parcel (or for the owner in the case of proportional ballots).

The following rules will apply if more than one countable ballot for a parcel (or owner) has been returned. If a non- duplicate ballot has been returned, the City will count the non- duplicate ballot and disregard all duplicate ballots. If only duplicate ballots have been returned, the City will count the last duplicate ballot and disregard the earlier duplicate ballots. If an owner returns both a non- proportional ballot and a proportional ballot, the City will count the proportional ballot and disregard the non-proportional ballot. • When and where ballots will be tabulated
The tabulation of ballots will be performed, in view of those present, at the public hearing following the close of the public input portion of the public hearing. The public hearing may be continued from time to time for the purpose of tabulating ballots. Ballots will not be unsealed until the tabulation begins.
• How ballots will be tabulated
Ballots may be counted by hand, by computer or by any other tabulating device.

Ballots will be tabulated by adding the ballots submitted in opposition to the assessment and adding the ballots submitted in favor of the assessment. Ballots shall be weighted according to the proportional financial obligation of the affected property; provided, however, that proportional ballots shall be weighted in accordance with the respective ownership interests of each proportional ballot submitted. If one or more proportional ballots are returned for a parcel and a non- proportional ballot is returned for the parcel, the non-proportional ballot will either disregarded (if the same owner has returned a 8 proportional ballot) or treated as a proportional ballot (if the same owner has not returned a proportional ballot).
• Who will tabulate ballots
Ballots will be tabulated by an employee of the City or by some other impartial person designated by the City Council who does not have a vested interest in the outcome of the proposed assessment. The tabulator may be assisted by any of the staff and consultants of the City.
• Results of tabulation
The results of the tabulation will be announced following the completion of the tabulation and entered in the minutes of a City Council meeting. If ballots submitted in opposition to the proposed assessment exceed the ballots submitted in favor of the proposed assessment (as tabulated above), the assessment will not be imposed.

IV. Resolution of Disputes
In the event of a dispute regarding whether the signer of a ballot is the owner of the parcel to which the ballot applies, the City will make such determination from the last equalized assessment roll and any evidence of ownership submitted to the City prior to the conclusion of the public hearing. The City will be under no duty to obtain or consider any other evidence as to ownership of property and its determination of ownership will be final and conclusive.

In the event of a dispute regarding whether the signer of a ballot is an authorized representative of the owner of the parcel, the City may rely on the statement on the ballot signed under penalty of perjury that the person completing the ballot is the owner's authorized representative and any evidence submitted to the City prior to the conclusion of the public hearing. The City will be under no duty to obtain or consider any other evidence as to whether the signer of the ballot is an authorized representative of the owner and its determination will be final and conclusive.

V. Public Record
During and after tabulation, all ballots are public records.

VI. Further Information
For further information, contact Angela Cortez, City Clerk, at (619) 441-1763.

1 The Downtown El Cajon Community Benefit District (CBD) Management District Plan

Final Plan -
July 22, 2026

Prepared pursuant to the City of El Cajon’s Community Benefit Ordinance, Chapter 2.90 added to Title 2 of the El Cajon Municipal Code.

Prepared for:

The Downtown El Cajon Business Partners
the Greater Downtown El Cajon Improvement Association
Property Owners in Downtown El Cajon
City of El Cajon

Prepared by:

New City America, Inc.

Greater El Cajon Improvement Association

NEW·CITV

2 Table of Contents

Section Number

1. Management Downtown El Cajon CBD Plan Summary 3

2. Downtown El Cajon CBD Boundaries 10

3. Downtown El Cajon CBD Improvement and Activity Plan 15

4. Assessment Methodology 21

5. Downtown El Cajon CBD Rules, Regulations and Governance 31

6. Implementation Timetable 31

7. Assessment Roll of Properties Included 32

Attachment:

A. Engineer’s Report

3 Section 1
Management Downtown El Cajon CBD Plan Summary

The name of this (“CBD”) is the Downtown El Cajon Community Benefit District. The Downtown El Cajon CBD is being formed under the City of El Cajon’s Community Benefit Ordinance, Chapter

2.90, added to Title 2 of the El Cajon Municipal Code.

The levy of assessments on real property within the proposed Downtown El Cajon CBD will fund physical and maintenance improvements to individual properties, attract new customers, tenants, and increase business sales, resulting in stabilized rents for property owners throughout Downtown El Cajon. The assessments will fund maintenance, special events and activities, and other special benefits within the Downtown El Cajon CBD, revitalizing Downtown El Cajon and , creating jobs, attracting and retaining businesses, and reducing crime.

Downtown El Cajon CBD Steering Committee
For the past two decades, downtown stakeholders have worked to improve and enhance their experience and overall ambiance of working, visiting, shopping, and residing in Downtown El Cajon.

Since the initiation of work last Spring, the current Property Business Improvement District Board (formerly the Downtown El Cajon Business Partners, now the Greater Downtown El Cajon Improvement Association, GDECIA ), has worked diligently to outreach to property owners, simultaneously building a level of support for improvements to in Downtown El Cajon as well as commencing the expansion of the property assessment district – now known as the new Downtown El Cajon CB D. The Downtown El Cajon CBD Steering Committee has met multiple times, has reviewed multiple versions of a management plan and finalized the boundaries, services, costs, and terms at its January 2026 Board of Directors meeting.

During this process, the Board of Directors of the Greater Downtown El Cajon CBD and its staff shall hold meetings with property owners in large meeting sessions as well as one-on-one discussions to be held to explain the purpose of the Downtown El Cajon CBD.

How can a new CBD benefit property owners in Downtown El Cajon? In summary, a Downtown El Cajon CBD is a Special Benefits Assessment District whereby property owners vote, through a mail ballot procedure, to supplement their property tax bills to pay for and control the assessments they generate through the new CBD. The CBD will not replace current City services, but it can fund solutions to supplement City services in the areas , including:
• Safety, petty criminal, and homeless/vacancy problems • Sidewalk cleanliness
• Increase tree trimming and replacement of damaged trees and landscaping • Install/improve decorative amenities such as street furniture, fixtures, equipment, and lighting

4 • Promote and enhance the brand image of Downtown El Cajon • Manage events in and around the Downtown El Cajon CBD, particularly at the Prescott Promenade
• Create a strong social media presence and facilitate public relations for Downtown El Cajon businesses
• Promote public space development and placemaking

MOST IMPORTANTLY, THESE PROPERTY ASSESSMENT FUNDS WILL NOT REPLACE EXISTING CITY

SERVICES IN DOWNTOWN EL CAJON AND W ILL BE MANAGED BY THE PROPERTY AND BUSINESS OWNERS, AFTER THE DOWNTOWN EL CAJON CBD IS VOTED IN.

Special Benefit Budget Category Analysis
The Downtown El Cajon CBD Management District Plan gives the property owners greater flexibility in determining the type and frequency of special benefit services that will be allocated on a year-to-year basis.

The proposed Downtown El Cajon CBD, will fund special benefit services, over and above what the City of El Cajon is currently providing. Special benefits are supplemental to the general benefits paid for out of the City and County budgets. Those categories of special benefit services include the following:

All services listed below are special benefits and supplemental to current City services.

Year 1 – PROPOSED BUDGET (ASSESSMENT REVENUES/SPECIAL BENEFIT COSTS)

CIVIL SIDEWALKS - $ 472,000 (ROUNDED) 60%
Examples of this category of special benefit services and costs may include, but are not limited to:
• Regular sidewalk and gutter sweeping
• Periodic sidewalk steam cleaning
• Beautification of the Downtown El Cajon CBD
• Enhanced trash emptying (over and above city services) • Timely graffiti removal, within 72 hours as necessary • Maintenance of existing and new public spaces
• Maintenance of the Prescott Promenade
• Set up and take down of special events
• Installation and maintenance of flowers throughout the Downtown El Cajon CBD (outside of medians)
• Personnel to manage in-house or contracted maintenance and any security teams

5 DISTRICT IDENTITY AND PLACEMAKING – $118,000 (ROUNDED) 15% Examples of this category of special benefit services and costs may include, but are not limited to:
• Website development and updating
• Traditional events done by the GDECIA (new 501 c3)
• Social media, public relations firm
• Enhancing current City holiday and seasonal decorations • Branding of Downtown El Cajon properties so a positive image is promoted to the public • Activation of Prescott Promenade
• Banner programs
• Public art displays and promotion of the Rea Street Art District • Public space design and improvements
• Personnel to manage in -house or contracted public relations, website maintenance , or social media contractors

ADMINISTRATION/PROGRAM MANAGEMENT - $173,000 (ROUNDED) 22% Examples of this category of special benefit services and costs may include, but is not limited to:
• Staff and administrative costs, contracted or in-house • Directors and Officers and General Liability Insurance • Office-related expenses
• Office and equipment rent
• Financial reporting and accounting
• Legal work

CONTINGENCY/CITY AND COUNTY FEES/RESERVE - $23,305 (ROUNDED) 3% Examples of this category of special benefit services and costs include, but are not limited to:
• Delinquencies, City/County fees, reserves

The proposed improvements, maintenance, and activities that comprise the categories of special benefit services listed above are the same improvements, maintenance, and activities that comprise the categories of special benefit services for subsequent years.

Proposed First Year for the Downtown El Cajon CBD Budget * Category of Services Percentage of budget 1st Year Allocation Civil Sidewalks/Safety and Cleanliness 60% $472,000
District Identity and Placemaking 15% $118,000
Administration/Program Management 22% $173,000
Contingency/Fees/Reserve 3% $23,305
Total 1st year Budget 100% $786,305
*Numbers are rounded.

I I

6 For years subsequent to the first year, the budget will be similar to the proposed budget above.

METHOD OF FINANCING
The financing of the Downtown El Cajon CBD is based upon the levy of special assessments on real properties that receive special benefits from the improvements and activities based upon which Benefit Zone they are located within . See Section 4 for assessment methodology and compliance with Article XIII D of the California State Constitution . The five factors used to determine proportional costs to the parcels in the Downtown El Cajon CBD:
• Linear frontage, on all sides of the parcel (excluding alleys) • Lot square footage
• Building square footage
• Current and future residential condominiums
• Location within one of the two geographic benefit zones of the Downtown El Cajon CBD

Costs
The costs per parcel are based upon the five factors listed above. The Benefit Zones are determined by the anticipated special benefits that a parcel will receive based upon its proximity to the core of the Downtown El Cajon CBD along Main Street, as well as the frequency of special benefit services that the parcel will receive. All assessments must be proportional to the special benefits received.

First Year Annual Costs Per Benefit Zone

Property Variable

Benefit Zone 1

Benefit Zone 2

Building Square Footage $0.10 $0.09
Lot size (sq ft) $0.07 $0.06
Linear Frontage (ft) $4.00 $3.50
Residential Condos Unit Sq.

Ft.
$0.10 $0.09

In addition, other factors will be used to determine assessments based upon the anticipated benefit of the current land uses:
• Residential condominiums will be assessed for unit building square footage only. • Private parking structures or major retail parking lots may be lowered for their gross building square footage and/or lot size assessments unless they are open to the public in general, and that parking serves the needs of visitors other than direct customers. • All publicly owned and operated parcels will be assessed for linear frontage, lot size, and building square footage.

7 Data and Benefit Zones
There are 427 individual parcels owned by 300 property owners in the proposed Downtown El Cajon CBD. The data was obtained by San Diego County Tax Assessors, ParcelQuest, as well as verification from property owners in the Downtown El Cajon. The following data is used as the basis for the generation of the CBD assessments.

Property Data by Benefit Zone

Benefit
Zone
Building
Square Feet
Lot
Square Feet
Linear
Frontage
Residential
Condos/Apt
1 1,196,243 sq. ft 2,692,963 sq. ft. 24,377 linear feet 0 sq. ft. 2 909,719 sq. ft. 3,279,914 sq. ft. 25,204 linear feet 153,129 sq. ft.

Total 2,105,962 sq. ft 5,972,877 sq. ft 49,581 linear feet 153,129 sq. ft.

Boundaries
The proposed Downtown El Cajon CBD consists of approximately 44 square blocks (blocks vary in size on each side of both Main Street and Magnolia Street), consisting of 427 parcels (37 3 currently assessed) owned by 300 property owners. A list of all parcels included in the proposed DECCBD is shown as Appendix 1, attached to this Report with their respective San Diego County assessor parcel number. The boundary of the proposed DECCBD and parcels within it are shown on the map of the DECCB D attached as Appendix 2 to this Report, which shall govern for the purposes of identifying assessed parcels.

Benefit Zones There are two benefit zones in the proposed DECCBD.

Zone 1: Core Area:

In general, Zone 1 includes Main Street from the intersection of El Cajon Boulevard and Main Street on the west and Roanoke Street and Avocado Avenue on the east. Additionally, Zone 1 includes parcels from the intersection of Interstate 8 and Magnolia Aven ue on the north and all parcels fronting along Magnolia Avenue southward to the north side of the intersection of Lexington Avenue and Magnolia Avenue on the south.

Zone 2: All Other Areas
In general, Zone 2 includes the peripheral parcels of the Downtown El Cajon CBD that do not front along Main Street and Magnolia Avenue and are not included in Zone 1.

Downtown El Cajon CBD Formation
Under the local enabling ordinance, Downtown El Cajon CBD formation requires submission of petitions from private and public property owners in the proposed Downtown El Cajon CBD representing at least 30% of the total assessments to be paid into the first year of the Downtown El Cajon CBD.

I I

8 Once the City verifies the petitions totaling a minimum of 30%, ($235,892) of the first-year annual budget which is projected to be $7 86,305 in first -year annual assessments, the El Cajon City Council may adopt a Resolution of Intention to mail out ballots to all affected property owners .

The City will then hold a public hearing and tabulate the ballots. The Downtown El Cajon CBD will be formed if the weighted majority of all returned mail ballots support Downtown El Cajon CBD formation and when the City Council adopts a Resolution of Formation to levy the assessments on the benefiting parcels . The date for that public hearing has not been scheduled but it is assumed that it will be held in late June 2026, based upon the successful completion of the petition drive.

Term
Under the El Cajon local enabling ordinance, the Downtown El Cajon CBD may be established for up to 20 years and shall not exceed 20 years. State law and the local enabling ordinance permits this annual disestablishment of the Downtown El Cajon CBD based upon petition and vote of the property owners. The threshold needed to trigger the balloting for the formation of the Downtown El Cajon CBD is the same as the process for disestablishment of the Downtown El Cajon CBD.

Time and Manner for Collecting Assessments
The Downtown El Cajon CBD assessments will appear as a separate line item on annual property tax bills prepared by the San Diego County Tax Assessor. The assessments are collected at the same time and in the same manner as ad valorem property taxes paid to the County. The assessments have the same lien priority and penalties for delinquent payments as ad valorem property taxes. Any delinquent assessments owed for the first year will be added to the property tax roll for the following year together with any applicable interest and penalties. The “property owner” means any person shown as the owner/taxpayer on the last equalized assessment roll or otherwise known to be the owner/taxpayer by the City. Publicly owned properties of the City, County and MTS and ta x-exempt parcels shall not be collected by the County Tax Assessor, but rather by a manual billing by the City of El Cajon. The first assessments of the new Downtown El Cajon CBD will appear in December 2026 property tax bills.

Government Assessments
The Downtown El Cajon CBD Management Plan assumes that any public or tax -exempt parcels shall be assessed in proportion to their specific special benefit services. There are currently City, County and MTS properties in the proposed Downtown El Cajon CBD. The Civil Sidewalks, District Identity and Placemaking and Administrative special benefit services will provide a clean and an attractive working environment for th ose publicly owned and operated buildings in the core of the Downtown El Cajon CBD. This will allow the City and County to attract new employees and provide visitors with an additional benefit of dealing with City and County business as well as reap the benefits of a full-service business Downtown El Cajon CBD.

9 Governance
Pursuant to Section 366 50 of the California Streets and Highway Code, the Downtown El Cajon CBD Management Corporation or current Owners’ Association, (Management Corporation) will review Downtown El Cajon CBD budgets and policies annually within the limitations of the Management District Plan. The Management Corporation must file Annual Reports with the City of El Cajon and will oversee the day -to-day implementation of services as defined in the Management Downtown El Cajon CBD Plan. The current Management Corporation, the Greater Downtown El Cajon Improvement Association, shall continue to serve as the Management Corporation.

Disestablishment
Under the local enabling ordinance, the Downtown El Cajon CBD property owners will have an annual period in which to submit petitions to the City Council to disestablish the CBD. If the property owners vote by weighted majority to disestablish the Downtown El Cajon CBD, assessments will be removed from the parcels the following fiscal year. Unexpended surplus funds will be returned to property owners based upon a parcel’s percentage contribution to the previous fiscal year’s assessments.

Exemptions or Reductions in Rates
Under this Management Downtown El Cajon CBD Plan and consistent with Proposition 218 and Article XIII D of the State Constitution, no parcel receiving special benefits from the establishment of a property assessment Downtown El Cajon CBD is exempt from the full payment of the annual assessment.

10 Section 2
Downtown El Cajon CBD Boundaries

Boundaries
The proposed Downtown El Cajon CBD consists of approximately 44 square blocks (blocks vary in size on each side of both Main Street and Magnolia Street), consisting of 427 parcels owned by 300 property owners. See the Downtown El Cajon proposed CBD map in Section 2, pages 13 and 14, which shall govern for the purposes of identifying assessed parcels . The Downtown El Cajon CBD is generally bound by:

Benefit Zones There are two benefit zones in the proposed DECCBD.

Zone 1: Core Area:

Zone 2: All Other Areas
In general, Zone 2 includes the peripheral parcels of the Downtown El Cajon CBD that do not front along Main Street and Magnolia Avenue and are not included in Zone 1.

Downtown El Cajon CBD Boundary Rationale
The Downtown El Cajon CBD boundaries are comprised of parcels that highlight restaurants, retailers, services, office buildings, market rate and residential condominiums apartment units, hotels, industrial and civic buildings. Benefit Zone 1 properties fro nt along Main Street from Roanoke Street on the east to El Cajon Boulevard/Main Street intersection on the west. Benefit Zone 1 parcels represent the core of the Downtown El Cajon CBD and are expected, due to the nature of the land uses, to derive the greatest benefit from the establishment of the Downtown El Cajon Community Benefit Downtown El Cajon CBD.

Benefit Zone 2 parcels are to be found west of the intersection of El Cajon Boulevard and Main Street running westward up to the Metropolitan Transit System Station as well as parcels, that by and large, do not front along Magnolia Avenue north of Lexingto n Avenue on the south and Interstate 8 on the north. Benefit Zone 2 parcels will derive special benefits like Benefit Zone 1; however, the frequency of Benefit Zone 2 services shall be approximately 4 - 5 days per week as compared to 6 - 7 days a week for Benefit Zone 1 parcels.

Northern Boundary -
The northern boundary of the proposed Downtown El Cajon CBD includes all parcels on the border along the Interstate 8 freeway and includes parcels 483 -330-022 and 483 -330-034 on the

11 northeast side of the Downtown El Cajon CBD as well as parcel 482 -301-006, on the northwest corner. Please refer to the map on page 13 for a view of the Downtown El Cajon CBD. No Downtown El Cajon CBD special benefit services shall be provided north of the northern boundary of the Downtown El Cajon CBD which ends at the southern side of Interstate 8.

Western Boundary
The western boundary of the proposed Downtown El Cajon CBD includes the parcels at the intersection of Marshall Avenue and Main Street , including the three corner parcels at that intersection. The three parcels at the intersection of Marshall Avenue and Main Street do NOT include the parcel at the northwest corner of the intersection, as it is a new car dealership which will not benefit from the services of the proposed Downtown El Cajon CBD.

The three most western parcels of the Downtown El Cajon CBD shall include parcels 487-121-041, 487-281-028 and the entire Metropolitan Transit Station Trolley stop which includes parcels 487- 262-004, 487-262-009 and 487-273-006. No Downtown El Cajon CBD programs and services will be provided west of the western Downtown El Cajon CBD boundary.

Southern Boundary:

The southern boundary of the proposed Downtown El Cajon CBD includes the following parcels that includes the expansion parcels on both sides of El Cajon Boulevard, ending at the roundabout, ending at parcels 487-321-026 and 487-323-017. The soutthern boundary then continues on the south side of Douglas Avenue from parcel 487-342-029 continuing along the south side of Douglas ending at parcel 487-342-019 ending at the intersection of Douglas and Van Houten Avenues. The southern boundary then jogs southward along the east side of Van Houten Avenue ending at parcel 487-331-009. The southern boundary continues along the south side of Lexington Avenue, running eastward to include all of the parcels on the south side of the street, ending at parcel 488- 241-041. The Downtown El Cajon CBD southern boundary then runs northward along the west side of Avocado Avenue and includes the parcels running eastward on the north side of Douglas Avenue including parcels ending at parcel 488 -233-047 at northwestern intersectio n of South Lincoln Avenue and Douglas Avenue. No Downtown El Cajon CBD programs and services will be provided south of the southern Downtown El Cajon CBD boundary

Eastern Boundary:

The eastern boudary of the Downtown El Cajon CBD starts at the western side of the intesection of Lincoln Avenue and Main Street, parcel 488 -233-047 and crosses Main Street northward to include parcel 488-113-010. The eastern boundary of the Downtown El Cajon CBD then continues northward and includes parcel 488 -113-024 and 488 -024-025 and then runs northward on the west side of Ballantyne Street including parcel 488 -040-002. The eastern boundary then runs northwest to include the eastern side of parcels 488 -040-011, 488-040-014 on the west side of Connecticut Avenue. The eastern boundary then crosses northward to Wells Avenue including parcels at the northwestern intersection of Wells Avenue and Graves Avenue including parcels 488-010-013. The eastern boundary then continues in a northwestern direction includ ing the eastern side of the parcels fronting Magnolia Avenue from parcel 488 -010-025 ending at parcel 483-330-022 ending at the intersection of Interstate 8 and Magnolia Avenue. No Downtown El

12 Cajon CBD programs and services will be provided east of the eastern Downtown El Cajon CBD boundary.

Summary
A list of all parcels in the proposed Downtown El Cajon CBD are shown as Appendix 1, the report includes the San Diego County assessor parcel numbers and assessments per parcel. All identified assessed parcels within the above -described boundaries shall be assessed to fund supplemental special benefit programs, services and improvements as outlined in this Management Downtown El Cajon CBD Plan. All Downtown El Cajon CBD funded services, programs and improvements provided within the above -described boundaries shall confer special benefit to identified assessed parcels inside the Downtown El Cajon CBD boundaries and no services will be provided outside of the Downtown El Cajon CBD. The frequency of services to Bene fit Zone 1 and 2 are based upon the proportional benefits they will receive based upon their location in the Downtown El Cajon CBD.

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15 Section 3
Downtown El Cajon CBD Improvement and Activity Plan

Explanation of Special Benefit Services

All of the improvements and activities detailed below are provided only to properties within the boundaries of the Downtown El Cajon CBD, as the improvements and activities will provide special benefits to the owners of these properties.

The City of El Cajon will continue to provide general benefit services in Downtown El Cajon Downtown El Cajon CBD which will include public safety programs, street sweeping, and tree trimming, etc. The frequency of these general benefits may change from year to year and time to time based upon budget constraints. However, Ci ty general benefits will not be withdrawn from Downtown El Cajon CBD unless they are withdrawn by an equal frequency City wide. The CBD funded special benefits will not replace City funded general benefits but rather will provide enhanced special benefits to parcel owners over and above the general benefits provided by the City of El Cajon.

All services funded by the assessments outlined in the Management District Plan are intended to directly benef it the propert ies within the Downtown El Cajon CBD to support increased commerce, business attraction and retention, to retain and increase commercial property rentals, attract new residential developments, enhance safety and cleanliness in Downtown El Cajon, improve its public identity, and eventually fund specialized beautification and enhanced services for the property owners, businesses, visitors and residents within the Downtown El Cajon CBD.

Special Benefit Budget Category Analysis
This Plan gives property owners greater flexibility in determining the type and frequency of special benefit services that will be allocated on a year -to-year basis. As El Cajon’s Downtown evolves, services that are needed one year may not be needed the next. Therefore, “bundles” or categories of special benefit funding have been created and divided into four broad categories – Civil Sidewalks, District Identity and Placemaking, Administration, and Contingency. The bundles are allocated funding percentages with the flexibility to prioritize or minimize a service within each bundle.

The bundles or categories of services and their percentages represent the service plan the Downtown El Cajon CBD property owners will be voting on when the Downtown El Cajon CBD comes up for a mail ballot later this spring.

The proposed “bundles” of special benefit services are listed below and are supplemental to current City services.

16 Year 1 – PROPOSED BUDGET (ASSESSMENT REVENUES/SPECIAL BENEFIT COSTS)

CIVIL SIDEWALKS - $ 472,000 (ROUNDED) 60%
Examples of this category of special benefit services and costs may include, but are not limited to:
• Regular sidewalk and gutter sweeping
• Periodic sidewalk steam cleaning
• Beautification of the Downtown El Cajon CBD
• Enhanced trash emptying (over and above city services) • Timely graffiti removal, within 72 hours as necessary • Maintenance of existing and new public spaces
• Maintenance of the Prescott Promenade
• Set up and take down of special events
• Installation and maintenance of flowers throughout the Downtown El Cajon CBD. (outside of medians)
• Personnel to manage in-house or contracted maintenance and any security teams.

DISTRICT IDENTITY AND PLACEMAKING – $118,000 (ROUNDED) 15% Examples of this category of special benefit services and costs may include, but are not limited to:
• Website development and updating
• Traditional events done by the DECIA (new 501c3)
• Social media, public relations firm
• Enhancing current City holiday and seasonal decorations • Branding of Downtown El Cajon properties so a positive image is promoted to the public • Activation of Prescott Promenade
• Banner programs
• Public art displays and promotion of the Rea Street Art Downtown El Cajon CBD; • Public space design and improvements
• Personnel to manage in -house or contracted public relations, web site maintenance or social media contractors.

ADMINISTRATION/PROGRAM MANAGEMENT - $173,000 (ROUNDED) 22% Examples of this category of special benefit services and costs may include, but is not limited to:
• Staff and administrative costs, contracted or in-house • Directors and Officers and General Liability Insurance • Office related expenses
• Office and equipment rent
• Financial reporting and accounting
• Legal work

CONTINGENCY/CITY AND COUNTY FEES/RESERVE - $23,305 (ROUNDED) 3% Examples of this category of special benefit services and costs include, but is not limited to:
• Delinquencies, City/County fees, reserves

17 PROPOSED FIRST YEAR DOWNTOWN EL CAJON DOWNTOWN EL CAJON CBD BUDGET*

Category of Services Percentage of budget 1st Year Allocation Civil Sidewalks/Safety and Cleanliness 60% $472,000
District Identity and Placemaking 15% $118,000
Administration 22% $173,000
Contingency/Reserve 3% $23,305
Total 1st year Budget 100% $786,305

*Numbers are Rounded

METHOD OF FINANCING
The financing of the Downtown El Cajon CBD is based upon the levy of special assessments upon real properties that receive special benefits from the improvements and activities based upon which Benefit Zone they are located within . See Section 4 for assessment methodology and compliance with Article XIII (d) of the California State Constitution . The five factors used to determine proportional costs to the parcels in the Downtown El Cajon CBD:

1. Linear frontage on all sides excluding alleys

2. Lot square footage

3. Building square footage

4. Current and future residential condominiums that currently exist or will be constructed

5. Location within one of the two geographic benefit zones of the Downtown El Cajon CBD

6. Possible reductions for lot size or building square footage if the parking lots or parking structures are used for customer use only and do not generate revenues to the property owner for after-hours parking needs.

In addition, other factors will be used to determine assessments based upon the anticipated benefit of the current land uses:

• Residential condominiums will be assessed for unit building square footage only. • Private parking structures or major retail parking lots may have their lot or building square footage reduced if they are used for customer parking only and are not open to the public in general. They would serve as benefit to their customers and tenants and are not being used to generate revenue in the off-hours. It will be up to each property owner to inform District management of any proposed reduction for such parking structures or lots. • All publicly owned and operated parcels will be assessed for linear frontage, lot size and building square footage unless otherwise specified in this plan.

I I

18 Data and Benefit Zones
There are 427 individual parcels owned by 300 property owners in the proposed Downtown El Cajon CBD. The data was obtained by San Diego County Assessors, ParcelQuest as well as verification from property owners in the Downtown El Cajon CBD. The following data is used as the basis for the generation of Downtown El Cajon CBD.

Property Data by Benefit Zone

Benefit
Zones
Building
Square Feet
Lot
Square Feet
Linear
Frontage
Residential
Condos/Apt
1 1,196,243 sq. ft 2,692,963 sq. ft. 24,377 linear feet 0 sq. ft. 2 909,719 sq. ft. 3,279,914 sq. ft. 25,204 linear feet 153,129 sq. ft.

Total 2,105,962 sq. ft 5,972,877 sq. ft 49,581 linear feet 153,129 sq. ft.

Costs
The costs per parcel are based upon the five factors listed on this page. The Benefit Zones are determined by the anticipated special benefits that a parcel will receive based upon its proximity to the core of the Downtown El Cajon CBD, as well as the freq uency of special benefit services that that parcel will receive. All assessments must be proportional to the special benefits received so we have agreed upon the following Benefit Zones.

Proposed First Year Downtown El Cajon Downtown El Cajon CBD Budget

First Year Annual Costs Per Benefit Zone -

Property Variable Benefit Zone 1 Benefit Zone 2
Building Square Footage $0.10 $0.09
Lot size $0.07 $0.06
Linear Frontage $4.00 $3.50
Residential Condos Unit Sq. Ft. $0.10 $0.09
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19 (A property owners’ annual assessment will be based upon the sum of the parcel(s) building square footage, lot size and linear frontage. That sum will constitute the property owners’ “weight” in the petition and balloting phase of the formation process).

Annual Assessment Cap
The Downtown El Cajon CBD budget and assessments may be subject to annual increases not to exceed 7% per year. Increases will be determined by the Owners’ Association /Downtown El Cajon CBD Management Corporation and will vary between 0% and 7% annually. Changes in land uses, the development of vacant parcels, the demolition of buildings, building improvements that increase square footages, and new building construction or residential condominium development, may alter the Downtown El Cajon CBD’s budget and individual property assessments. Linear frontage and parcel size are normally not altered in the redevelopment of a site. Changes to assessments are more likely to occur upon increases to building square footages.

Changes may also occur upon the conversion of single parcels to multiple parcels due to the construction of residential and/or commercial condominiums.

Bonds
The Downtown El Cajon CBD will not issue any bonds related to any program.

Operating Budget
A projected operating budget, based upon the local enabling ordinance, has a 20-year term and may be renewed after that term for another 20 years more. This Management District Plan has listed the maximum percentage of allowable annual increases based upon the current data within the Downtown El Cajon CBD, with the following assumptions:

• Assessments may be subject to annual increase , based upon the action of the Greater Downtown El Cajon Improvement Association Board, not to exceed 7% per year. • Changes in land use, demolition of existing buildings, and new development will occur and will change the improvements to that parcel, normally due to redevelopment of the site and the addition of new building square footage which shall be assessed based upon the provisions laid out in this Management District Plan.

The budget for specific programs listed may be reallocated within each budget category by up to 10% during the term of the Downtown El Cajon CBD. The Management Corporation Board may alter the budget based upon service needs and such changes shall be included in the Annual report and submitted to the El Cajon City Council for review and approval.

20 Five-Year Projection of Maximum Assessment for the
Downtown El Cajon CBD

Civil
Sidewalks
District
Identity Administration Contingency TOTAL
Y1 $ 472,000 $ 118,000 $ 173,000 $ 23,305 $ 786,305 Y2 $ 505,040 $ 126,260 $ 185,110 $ 24,936 $ 841,346 Y3 $ 540,393 $ 135,098 $ 198,068 $ 26,682 $ 900,241 Y4 $ 578,220 $ 144,555 $ 211,932 $ 28,550 $ 963,257 Y5 $ 618,696 $ 154,674 $ 226,768 $ 30,548 $ 1,030,685

Notes:
• Assumes a possible 7% maximum yearly increase on all budget items, if approved annually by the Downtown El Cajon CBD Management Corporation Board of Directors

• Any accrued interest or delinquent payments will be expended in the above categories.

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21 Section 4
Assessment Methodology

The proposed Downtown El Cajon CBD is a property -based special benefit assessment district being established pursuant to the El Cajon local enabling ordinance, Chapter 2.90 added to Title 2 of the El Cajon Municipal Code, as well as sub-sections of Section 36600 of the California Streets and Highway Code. Due to the special benefit nature of assessments levied within a CBD, program costs are to be distributed amongst all identified spe cially benefited properties based on the proportional amount of special program benefits each property is expected to derive from the assessments collected.

El Cajon City CouncilJuly 28, 2026

El Cajon City Council
July 28, 2026