SOLANO COUNTY WATER
August 19, 2024
Michael Heather, Assistant Public Works Director
City of Fairfield
250 East L Street
Fairfield, CA 94510
Execution Date:
Close Date: DcLA- 4- e- 3i/
Retention Schedule:
Destruction Date: Dee- eµ 6c'/' 3 Zr3 {
A- G- EN- C Y
Re: City of Fairfield' s 2024 SWP Water Transfer Letter of Understanding Dear Mr. Heather:
This letter of understanding (" LOU") documents and confirms the mutual agreement that has been reached between Solano County Water Agency (" Agency") and the City of Fairfield (" Fairfield") ( collectively the " Parties" and each a " Party"). This LOU specifies the ternis under which the Agency agrees to transfer approximately 2,000- acre feet ( AF) of Fairfield' s State Water Project (" SWP") Carryover water (" 2024 Transfer") to a State Water Contractor (" Contractor") outside of Solano County. The specific Contractor has not yet been identified but will be one of the many SWP contractors that are interested in purchasing the water from Fairfield. In consideration for the 2024 Transfer, Contractor will pay the Agency a minimum fee of $ 250. 00 per AF water transferred (" Transfer Fee"), for
a projected total of $ 500, 000, which the Agency will then remit to " Fairfield.
Notwithstanding the foregoing, the Parties may negotiate a higher fee with any such Contractors.
BACKGROUND AND PURPOSE
The Agency holds a contract with the Department of Water Resources (" DWR") to receive imported water deliveries from the SWP. Fairfield ( along with other agencies in Solano County) is a Member Agency of the Agency and pays the Agency to receive an allocation of SWP water under a separate contract.
As of the date of this LOU, the Agency and City have contacted several SWP contractors outside of Solano County that hold contracts to receive water deliveries from the SWP and. require more SWP water than their DWR allocation provides in 2024. Fairfield agrees to forego a portion of up to two -thousand - acre feet ( 2,000 AF) of the delivery of the 2024 SWP water to which it is entitled under the Fairfield Member Unit Contract and make that water available for transfer to Contractor under the terms and conditions set forth herein.
Pursuant to Fairfield' s request, the Agency will work with the selected Contractor and DWR to facilitate the 2024 Transfer. The basic parameters of the 2024 Transfer are as follows:
Fairfield will receive from the Agency a Transfer Fee of $ 250. 00 per AF, or other reasonably negotiated price, of SWP water transferred to Contractor in the 2024 water year. 810 Vaca Valley Parkway, Suite 203
Vacaville, CA 95688
707) 451- 6090
Fax ( 707) 451- 6099 7!
Sewa2. com
The amount of 2024 Transfer water is estimated to be up to 2, 000 AF, the final price shall be determined by multiplying the total number of acre fee transferred by the agreed - upon price per acre foot.
The Agency will serve as a " pass through" and facilitator of the 2024 Transfer, and will not receive any financial compensation, water, or other remuneration for these efforts.
TERMS AND CONDITIONS
1. Condition Precedent. DWR' s written approval of the 2024 Transfer between the Agency and the Contractor is a condition precedent to the Agency' s authorization to proceed under the LOU. DWR' s approval shall be provided in the form of an agreement between DWR, the Agency, and the Contractor (" Transfer Agreement").
2. Deliveries; to Contractor:. The Agency will request that DWR deliver to the Contractor up to 1, 000- acre feet of Fairfield' s 2024 Article 56 Carryover water from the SWP. Within thirty ( 30) days following the execution of the Transfer Agreement, the Contractor shall pay the Agency the Transfer Fee for each AF of 2024 Article 56 Carryover water made available by Fairfield, unless a different price is negotiated and agreed upon in writing by Fairfield, the Agency, and the Contractor. Provided all agreements are in place for the 2024 Transfer, the Agency shall pay 100% of the Transfer Fee received from the Contractor to Fairfield within ten ( 10) days of receipt.
3. Notice! ofExeiription. Because the 2024 Transfer will be delivered through existing facilities, without the construction of new facilities, Fairfield and the Agency agree that the 2024 Transfer is exempt from the California Environmental Quality Act ( CEQA) pursuant to Sections 15061( b)( 3) and 15301 of the State CEQA Guidelines. The Agency shall file a Notice of Exemption for the 2024 Transfer with the Clerk of the Board of Supervisors of Solano County, as well as the county in which the Contractor is located, and shall provide a copy to Fairfield.
4. Transaction Costs.. Fairfield and the Agency shall each be responsible for its own legal and consulting costs incurred in the preparation, review, and implementation of this LOU. Fairfield and the Agency each agree to cooperate with each other in the preparation, review, and execution of any additional agreements that may be necessary to implement the 2024 Transfer. Fairfieldshallnot be responsiblefor paymentof anychargesimposed by any agency, including the Agency, for the preparationand processingof the Transfer Agreement, or for the preparationand processingof suchother approvalsas maybe necessaryto implementthe 2024 Transfer. 5.
Costs of Defense. In the eventof anylegal action by a thirdparty to challengethis LOU or the 2024Transfer, Fairfield and the Agencyagree to cooperatein the defensethereof and to shareequally in the costsof suchdefense, utilizing counsel mutually acceptable to the Parties.
6. Force Majeure. In the event that an unavoidable event beyond the reasonable control of the Parties, including, but not limited to availability of SWP water, renders the performance of this LOU impossible or infeasible, the Parties hereto shall be excused from the performance thereof; provided, however, that the Agency shall first coordinate with D WR to determine whether alternate performance may be possible pursuant to an alternate schedule for completion of performance.
7. Authorijy. The undersigned representatives of Fairfield and the Agency hereby represent that they are authorized to execute the LOU for the Parties on whose behalf this LOU is executed.
8. Notice. Written notice may be provided by either Party to the other by first class mail, postage prepaid to the following addresses:
City of Fairfield - Public Works Department
1000 Webster Street, Yd Floor
Fairfield, CA 94533
Attention: Michael Hether, Assistant Public Works Director Solano County Water Agency
810 Vaca Valley Parkway, Suite 202
Fairfield, CA 95688
City of Fairfield
By; ! 2
David Gassaway, it Date
Solano County at { Agency
By 11,
Chris LWGeneral Manager Date