Exhibit B: Title 8 - Chapter 8.32 Public Nuisances
8.32.100 – Illegal Commercial Cannabis Activities
All illegal commercial cannabis activities (including cultivation, manufacturing, processing, distribution, or retail sale of cannabis) conducted in violation of Article XIV o f Chapter 16.16 as provided in Title 16, shall be declared a public nuisance and the City may commence an action or actions or proceedings, for the abatement, removal, and enjoinment thereof, in any manner provided by the law . An enforcement officer may issue an administrative citation and fine to the responsible person(s) for said violation(s) as provided in Title 1 of the Hesperia Municipal Code and in accordance with Government Code Section 53069.4(a)(2)(C). The City is authorized to refer a case involving illegal commercial cannabis activity to the Attorney General.
Attachment 3
Exhibit C: Title 16 – Article XIV – Cannabis Related Uses and Prohibited Activities
16.16.445 - Definitions.
“Responsible Person” – means the property owner and each owner of the occupant business entity engaging in illegal commercial cannabis activity.
16.16.440 - Purpose and Intent
C. All illegal commercial cannabis activities (including cultivation, manufacturing, processing, distribution, or retail sale of cannabis) shall be declared a public nuisance.
D. Any violation of this section is declared to be a public nuisance and th e City may commence an action or actions or proceedings, for the abatement, removal, and enjoinment thereof, in any manner provided by the law .
E. An enforcement officer may issue an administrative citation and fine to the responsible person(s) for said violation(s) as provided in Title 1 of the Hesperia Municipal Code and in accordance with Government Code Section 53069.4(a)(2)(C ).
F. The City is authorized to refer a case involving illegal commercial cannabis activity to the Attorney General.
Attachment 4
RESOLUTION NO. 2024-09
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPERIA, CALIFORNIA, ADOPTING RESOLUTION NO. 2024-09, AMENDING THE CITY -WIDE ADMINISTRATIVE
BAIL SCHEDULE
WHEREAS, the administrative bail schedule was originally adopted via Resolution No. 2002-42; and
WHEREAS, the City of Hesperia is responsible for enforcement of the Hesperia Municipal Code in its entirety; and
WHEREAS, on April 16, 2024, the City Council heard and took action on Ordinance No. 2024- 04, whic h amends Title 1, Title 8, and Title 16 of the Hesperi a Municipal Code related to commercial cannabis enforcement; and
WHEREAS, Assembly Bill No. 1684 (“AB 1684”) was signed by Governo r Newsom in October 2023 and approved an act to am end Section 53069.4 of the Government Code that expands authorization for imm ediate impos ition of a dministrative fines or pe nalties for all un licensed commercial cannabis activity, including cultivation, manufacturing, processin g, distribu tion, or retail sale of cannabis; and
WHEREAS, unlicensed commercial cannabis activity is declared a public nuisance in Ordinance No. 2024-04; and
WHEREAS, AB 1684 prohibits administrative fines or penalties exceeding $1,000 per violation and $10,000 per day; and
WHEREAS, the Council wishes to amend the City-Wide Administrative Bail Schedule to comply with the new state law; and
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HESPERIA, AS FOLLOWS:
Section 1. In all respects, the facts as set forth in this resolution are true and correct.
Section 2. The fines for violations set forth in Exhibit “A” are hereby adopted and shall be applied to the specified services. The effective date of this r esolution shall be June 16, 2024.
Section 3. Interpretation of th is resolution may be made by the City Manager or designee.
When there are conflicts between fees, the lower fee shall be applied.
Section 4. If any section, sub -section, sentence, clause, or word in the resolution is held to be invalid by decision of any court of competent jurisdic tion or action of State legislation, such decision or legislation shall not affect the validity of the remaining portions of this resolution.
Adopt Resolution No.2024-09, amending the City-Wide Administrative Bail Schedule Section 5. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.
ADOPTED AND APPROVED this 16th day of April, 2024
______________________________
Larry Bird, Mayor
ATTEST:
____________________________
Erin Baum
Assistant City Clerk
Exhibit A – City-Wide Bail Schedule
SECTION DESCRIPTION 1st 2nd 3rd
16.16.450 Prohibition of Non-Medical Commercial Cannabis Activities
$1,000.00 $1,000.00 $1,000.00
16.16.455A Outdoor Cultivation prohibited $1,000.00 $1,000.00 $1,000.00
16.16.455B Living Plants within private residence $1,000.00 $1,000.00 $1,000.00
16.16.455C Enclosed Locked Structure Required $1,000.00 $1,000.00 $1,000.00
16.16.455E Registration Req. – Personal Cannabis Cultivation $1,000.00 $1,000.00 $1,000.00
16.16.455F Owner Permission Required $1,000.00 $1,000.00 $1,000.00
16.16.460 Prohibition of Medical Commercial Cannabis
Activities
$1,000.00 $1,000.00 $1,000.00
Attachment 6
01071.0001/975322.1
City of Hesperia
STAFF REPORT
DATE: April 16, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Pam K. Lee, City Attorney
SUBJECT: Amendment to Title 16 [Development Code], Chapter 20 [General Regulations], Article V [General Performance Standards] by adding a new Section 16.20.1 61 related to completion and maintenance of public improvements prior to issuance of building permits and certificates of occupancy
RECOMMENDED ACTION
It is recommended that the City Council introduce and place on first reading Ordinance No. 2024- 06 adding a new Section 16.20.1 61 to Title 16 [Development Code], Chapter 20 [General Regulations], Article V [General Performance Standards] of the Hesperia Municipal Code regarding the completion and maintenance of public improvements prior to issuance of a building permit and certificate of occupancy.
BACKGROUND
The City’s Development Code, as described in Title 16 of the Hesperia Municipal Code, provides for development standards and regulations for all type s of development in the City. Typically, when a developer develops a property or constructs a project, they are required to comply with the City’s development standards and regulations. Oftentimes, the developer will be required to construct public improvements or pay a fee for construction of said public improvements, to the extent that those improvements are necessary, have a nexus, or are related to the proposed development. The developer will then construct those public improvements and dedicate them to the City upon completion. Thereafter, the public improvements will be accept ed and owned by the City.
Oftentimes, the completion of the public improvements may occur before the completion of the development project itself. In these instances, the developer is responsible for maintaining, and repairing, as necessary, the public improvements while the construction of their project is ongoing.
Currently, the Development Code, in Chapter 16.20, requires such maintenance and repair work for all streets related to the development project. However, other public improvements, such as water lines and sewer laterals, are not included. The proposed Development Code amendment will rectify this issue by requiring that other public improvements, such as water lines and sewer laterals, be maintained and repaired by the developer prior to the completion of the development project and the issuance of a certificate of occupancy.
ISSUES/ANALYSIS
The proposed development code amendment is as follows:
16.20.161 Issuance of Building Permits and Certificates of Occupancy
Staff Report to the Mayor and Council Members
Ordinance No. 2024-06
April 16, 2024
01071.0001/975322.1
A. Building Permit. No Building permit shall be issued until: (i) all public improvements have been fully completed, dedicated, and accepted, or if allowed, security has been posted as required herein; (ii) the City has accepted the developer’s offer to dedicate the improvements by approval of the final map(s); and (iii) necessary minimum improvements have been completed to provide public services and all weather access to the lot for which the building permit is being requested.
B. Damages; Repairs. Notwithstanding any acceptance of or notices of completion o f public improvements, all public improvements shall be maintained in good working condition prior to the issuance of any building permit or certificate of occupancy. Any damage to improvements associated with the development must be repaired or replaced by the contractor to the satisfaction of the City. Repairs and replacements include, but are not limited to, sidewalks and walkways, curbs, gutters, utilities, water service lines, and sewer laterals. No occupancy permit shall be issued to any owner or tenant until said improvements associated with the property or map have been fully completed.
ENVIRONMENTAL REVIEW
The proposed Development Code Amendment is exempt under the Califronia Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines which provides that CEQA only applies to projects that have the potential for causing a significant effect on the environment. Where, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment; the activity is not subject to CEQA.
The Development Code amendment does not relate to any one physical project and will not result in any physical change to the environment. Therefore, it can be seen with certainty that there is no possibility that the proposed Development Code amendment may have a significant adverse effect on the environment, and thus the adoption of the proposed Ordinance is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines.
FISCAL IMPACT
There are no fiscal impacts identified with this action.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Proposed Ordinance No. 2024-06
01071.0001/975326.1
ORDINANCE NO. 2024-06
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
HESPERIA, CALIFORNIA, AMENDING PORTIONS OF
CHAPTER 16.20 OF THE HESPERIA MUNICIPAL CODE BY
ADDING SECTION 16.20.161 RELATING TO COMPLETION
AND MAINTENANCE OF PUBLIC IMPROVEMENTS PRIOR TO
ISSUANCE OF BUILDING PERMITS AND CERTIFICATES OF
OCCUPANCY
WHEREAS, pursuant to Article XI, Section 7 of the California Constitution, a city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws of the State; and WHEREAS, the provisions of this title are intended to elaborate upon, and otherwise augment standards, specifications and regulations relating to the maintenance of public improvements prior to the issuance of building permits and certificates of occupancy; and
WHEREAS, the City Council wishes to amend the Hesperia Municipal Code to clarify that the maintenance of public improvements prior to the issuance of building permits and certificates of occupancy includes all types of public improvements related to the development project, rather than just street improvements.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HESPERIA DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Recitals. All of the above recitals are true and correct and incorporated herein by reference as if set forth in full.
Section 2. Amendment. A new Section 16.20.161 to Chapter 16.20 of the Hesperia Municipal Code (under Title 16 [Development Code], Chapter 20 [General Regulations], Article V [General Performance Standards]) is hereby added as follows:
“16.20.161 Issuance of Building Permits and Certificates of Occupancy A. Building Permit. No Building permit shall be issued until: (i) all public improvements have been fully completed, dedicated, and accepted, or if allowed, security has been posted as required herein; (ii) the City has accepted the developer’s offer to dedic ate the improvements by approval of the final map(s); and (iii) necessary minimum improvements have been completed to provide public services and all weather access to the lot for which the building permit is being requested.
B. Damages; Repairs. Notwithstanding any acceptance of or notices of completion of public improvements, all public improvements shall be maintained in good working condition prior to the issuance of any building permit or certificate of occupancy. Any damage to improvements associated with the development must be repaired or replaced by the developer to the satisfaction of the City. Repairs and replacements include, but are not limited to, sidewalks and walkways, curbs, gutters, utilities,
01071.0001/975326.1 -2-
water service lines, and sewer laterals. No occupancy permit shall be issued to any owner or tenant until said improvements associated with the property or map have been fully completed.”
Section 3. Severability. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this ordinance or the application thereof to any person, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remainder of this ordinance.
The City Council hereby declares that it would have adopted this ordinance, and each and every section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsectio ns, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional by law.
Section 4. Certification. The City Clerk shall certify the adoption of this Ordinance and shall cause a copy of the same to be published in a manner prescribed by law.
APPROVED AND ADOPTED by the City Council of the City of Hesperia, California at a regular meeting held this 16th day of April, 2024.
Larry Bird, Mayor
ATTEST:
Erin Baum, Assistant City Clerk
City of Hesperia
STAFF REPORT
DATE: April 16, 2024
TO: Mayor and Council Members
Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works/City Engineer SUBJECT: Approval of a Letter of Intent by and between the City of Hesperia and Fenner Gap Mutual Water Company
RECOMMENDED ACTION
It is recommended that the City Council authorize the City Manager to approve a Letter of Intent (LOI) by and between the City of Hesperia and Fenner Gap Mutual Water Company.
BACKGROUND
The City of Hesperia is part of an adujicated water basin (City of Barstow et al, v. City of Adelanto et al) which is intended to remediate overdraft in the Mojave Basin Area by limiting the amount of water produced in specific subareas. The ajducation determines the Free Production Allowance (FPA), which is the maximum amount of water a producer may pump in one year without incurring a replacement or make -up obligation. As a result of the judgment, Hesperia Water District (District) incurs replacement water obligations in the Alto Subarea when verified production amounts exceed the FPA for the water year.
Historically, the City and District may meet these replacement water obligations by three mechanisms:
1) Assignment of carryover right or temporary transfer of unused FPA (i.e. lease) from interested water rights owners in the respective subarea at negotiated rates (this is a cost effective short- term option to meeting the production demands);
2) Purchase water from the Mojave Basin Area Watermaster (Watermaster) at the current per acre foot (AF) water rate which is derived from the State Water Project water rates; and/or 3) Purchase permanent water rights from interested parties in the Alto Subarea at negotiated rates (purchase provides a long-term solution, but is costly and difficult to acquire).
The Fenner Gap Mutual Water Company (FGMWC) has approached the City with a po tential fourth solution for the replacement water obligations by providing water from a currently undedicated water source to use toward groundwater basin replenishment . Using a new water supply from the Cadiz -Fenner Va lley Watershed, the Cad iz Water Project has discussed a regional plan with the City, as well as other public agencies in the surrounding areas, and asked that interested parties to sign an LOI to participate in the Mojave -San Bernardino One Water project.
The FGMWC is a non -profit California mutual water company consisting of water providers participating in the Cadiz Water Project. The Cadiz Water Project is a water supply project that aims to transport water from the Cadiz and Fenner Valley, which is located approximately fifteen
Staff Report to the Mayor and Council Members - Approval of a Letter of Intent by and between the City of Hesperia and Fenner Gap Mutual Water Company
April 16, 2024
miles east of Amboy, California to the Greater Mojave Valley. Importantly, the Cadiz Water Project looks to capture and transport water that would otherwise be lost to evaporation and bring it to this region of San Bernardino County. The Cadiz Water Project will utilize the existing Northern Pipeline, which is a 220 mile pipeline that extends from the Fenner Valley west to Kern County and through Barstow, CA.
The Mojave-San Bernardino One Water project will eventually work together in the design, development, construction and operation of water infrastructure facilities necessary to utilize this water in the Mojave Basin Area.
ISSUES/ANALYSIS
The LOI will initiate Hesperia’s participation in the Mojave-San Bernardino One Water Project .
This project will be a collaborative effort by participating agencies in the design, development, construction, and operation of water infrastructure facilities necessary to ut ilize all potential sources of water to create water security, climate resiliency and equitable distribution of water resources in Mojave Basin and other connected regions in San Bernardino County.
By participating in the Mojave-San Bernardino One Water P roject, the LOI offers the good faith delivery of up to 75,000 acre-feet of water to the City of Hesperia.
FISCAL IMPACT
There is no fiscal impact at this time for authorizing the approval of a LOI by and between the City of Hesperia and FGMWC agreeing to participate in the Mojave-San Bernardino One Water Project. Should the project proceed, the City will work towards an agreement, and have a share of costs, which will be presented to the City Council /Board of Members of the Hesperia Water District at a future date for consideration.
ALTERNATIVES
1. Provide alternative direction to staff.
ATTACHMENTS
1. Letter of intent by and between the City of Hesperia and Fenner Gap Mutual Water Company
2. Exhibit A - Term Sheet for Purchase, Sale and Exchange of Water By and Between Fenner Gap Mutual Water Company and the City of Hesperia
Letter of Intent by and between the City of Hesperia
And Fenner Gap Mutual Water Company
RECITALS
a) The City of Hesperia is known as the Gateway to the High Desert with a population over 100,000 and one of the most desirable places to live in California’s Mojave Desert region.
b) The City of Hesperia obtains its water supply almost entirely from pumped groundwater from the Mojave River Groundwater Basin and is connected to the Mojave Water Agency’s Regional Recharge and Recovery (R3), a conjunctive use project that stores State Water Project (SWP) water underground in the local aquifer and has invested in recycling, storm water capture, water use efficiency and water retention programs to conserve and manage water supplies for the long term needs of its residents.
c) Fenner Gap Mutual Water Company (“ Fenner Gap ”) is a non -profit mutual benefit corporation formed in 2010 for purposes of managing and distributing 2.5 million acre- feet of groundwater resources from the Cadiz Water Conservation, Storage and Supply Project in the Cadiz Valley region of San Bernardino County (“Cadiz”) and is a member of Fenner Valley Water Authority.
d) Victor Valley Wastewater Reclamation Authority (VVWRA) is a Joint Powers Authority providing wastewater treatment, water recycling, and renewable green energy, and treats about 12 million gallons of wastewater per day, whose members include the City of Victorville, City of Hesperia, Town of Apple Valley, and San Bernardino County Special Districts 42 and 64.
e) Fenner Valley Water Authority is a Joint Powers Authority whose members include the County of San Bernardino, Fenner Gap and other public water agencies. f) Fenner Gap and Cadiz own and manage gro undwater resources in Mojave Desert watersheds adjacent to the regions served by VVWRA and 220 -miles of buried pipelines that can directly connect new waters supplies to groundwater recharge basins in the Mojave Groundwater Basin.
g) The Mojave-San Bernardino County One Water Project is collaboration among public water agencies in San Bernardino County to develop a regional, integrated and sustainably-managed water system that considers the current and future needs of all its users, meets human needs with environmental best practices, and makes cost-effective investments in infrastructure to preserve access and affordability for all.
Attachment 1
NOW THEREFORE, in consideration of the foregoing recitals, the Parties will exercise good faith and reasonable best efforts to co nvert this Letter of Intent (''LOI") into a final definitive public, private, partnership agreement (''Agreement'') in collaboration with other participating agencies.
The key terms of the Agreement are as follows:
Subject to the approval of and terms and conditions imposed upon the Parties by their respective governing boards, shareholders, member agencies and/or applicable law:
1. The City of Hesperia will participate in the Mojave-San Bernardino One Water Project and collaborate with other participating agencies in the design, development, construction, and operation of water infrastructure facilities necessary to utilize all potential sources of water to create water security, clim ate resiliency and equitable distribution of water resources in Mojave Basin and other connected regions in San Bernardino County.
2. The City of Hesperia will participate with Fenner Gap , VVWRA and other public agencies in coordinating the financial, technical, and managerial resources of all entities participating in the Mojave-San Bernardino One Water project to optimize and access maximum available financial resources.
3. Fenner Gap will make available groundwater resources from the Cadiz Water Conservation, Supply and Storage Project in Cadiz Valley to entities participating in Mojave-San Bernardino County One Water for purposes of groundwater replenishment, water supply reliability and ecosystem preservation.
4. Fenner Gap and the City of Hesperia will exercise good faith and reasonable efforts to enter into an Agreement for delivery of 75,000 acre-feet of groundwater supply for the benefit of the City of Hesperia on substantially similar terms and conditions as contained in the attached Exhibit A - Non-Binding Term Sheet.
Signatures
__________________________________________Date___________ City of Hesperia
__________________________________________Date___________ Susan P Kennedy, President
Fenner Gap Mutual Water Company
EXHIBIT A
Term Sheet for Purchase, Sale, and Exchange of Water
By and Between Fenner Gap Mutual Water Company and the City of Hesperia This term sheet (“Term Sheet”) is intended to be a summary of a proposed transaction and as such does not represent nor constitute a binding commitment by any person or entity named herein.
I. Parties
FGMWC Fenner Gap Mutual Water Company is a non -profit mutual benefit corporation established in 2010 pursuant to California Public Utilities Code Sections 2704 and 2705 for purposes of managing and distributing groundwater resources from the Cadiz Water Conservation, Storage and Supply Projec t in eastern San Bernardino County (“Water Project”).
City of Hesperia The City of Hesperia obtains its water supply almost entirely from pumped groundwater from the Mojave River Groundwater Basin, is connected to the Mojave Water Agency’s Regional Rechar ge and Recovery (R3) , a conjunctive use project that stores State Water Project (SWP) water underground in the local aquifer to ensure sustainable water supply for the region.
Cadiz Cadiz, Inc. is the owner of approximately forty-five thousand (45,000) acres of land in eastern Mojave Desert with permits to withdraw an average of 50,000 acre-feet per year (AFY) of conserved groundwater over a 50 -year period pursuant to a certified Final Environmental Impact Report (“Project FEIR”) and Groundwater Management, Monitoring and Mitigation Plan (“GMMMP”) approved by San Bernardino County.
Cadiz also holds rights-of-way for the construction of up to an eighty-four inch, 43- Mile Pipeline (“Southern Pipeline”) for the c onveyance of conserved water to the Colorado River Aqueduct (“CRA”) and owns a thirty-inch, 220-mile, existing buried pipeline originating at Cadiz with a terminus at Wheeler Ridge (“Northern Pipeline”).
San Bernardino
County
San Bernardino County is a political subdivision of the State of California (“County”), Responsible Agency under the California Environmental Quality Act (CEQA) pursuant to the Project FEIR with oversight and enforcement responsibilities for the Water Project pursuant Resolution No. 2012-176 adopted by the County approving the GMMMP. The County is also a Project Participant with reserved rights for delivery of 25,000 AF and other specified amounts of Project Water to eligible communities.
FVWA Fenner Valley Water Authority is a jo int powers agency between FGMWC , San Bernardino County (“County”) and Santa Margarita Water District whose purpose is to lease, maintain and own the facilities and associated appurtenances necessary to convey and deliver water from the Water Project (“Capi tal Facilities”) and provide oversight for operation of the Water Project in accordance with the GMMMP.
SMWD Santa Margarita Water District (“SMWD”) is a California Water District, a local agency of the State of California with broad powers under the Cali fornia Water District Act, Cal. Water Code §§ 34000 et seq. and Lead Agency under CEQA pursuant to the Project FEIR. SMWD also serves as the “designated entity” of FVWA under California Government Code Section 6509 and is a Project Participant.
Attachment 2
II. Water Project
Water Project “Water Project” means the Cadiz Valley Water Conservation, Recovery and Storage Project including all permits and rights pursuant to the Project FEIR and GMMMP approved by the County to deliver conserved groundwater from Cadiz for beneficial uses via the CRA, the Southern Pipeline and/or the Northern Pipeline . “Project Participants” means end users entitled to receive water from the Water Project.
Project Water “Project Water” means groundwater produced and deliverable to end users from the Water Project, up to an average of fifty thousand (50,000) AFY and aggregating to two million, five hundred thousand (2,500,000) acre -feet cumulatively over the 50- year Water Project term.
Tier 1 Water “Tier 1 Water” means that amount of Project Water reserved for delivery to end users pursuant to water purchase agreements that include firm capacity rights for the use of Capital Facilities necessary to deliver Project Water to points of delivery designated by Project Participants.
Tier 2 Water “Tier 2 Water” means that amount of Project Water in excess of the total, aggregated amount of Project Water reserved for delivery to end users pursuant to all water purchase agreements cumulatively over the Water Project term.
Firm Pipeline
Capacity
Firm Pipeline Capacity means the right to transport Project Water through the Northern or Southern Pipeline or other facilities in accordance with the terms, conditions and procedures established by FGMWC and FVWA for all shareholders of FGMWC. FGMWC shareholders pay pro -rata fees for capital and operating expenses in accordance with take-or-pay water purchase agreements.
Space
Available
Pipeline
Capacity
Space Available Pipeline Capacity means the right to transport Project Water through the Northern or Southern Pipeline or other facilities on a space available basis. Project water would be delivered to designated points of delivery via Capital Facilities when space is otherwise not required to meet firm commitments for Project Water. Project Participants pay actual incremental cost to convey Tier 2 Water to designated points of delivery upon actual use of pipeline capacity.
Capital
Facilities
“Capital Facilities” means any and all facilities deemed necessary, advisabl e or appropriate to extract, convey or deliver Project Water to Project Participants, including facilities associated with the Southern Pipeline and the Northern Pipeline.
Third-Party
Financing
“Third-Pary Financing” means financing obtained from private and public sources to fund the design and construction costs of the Capital Facilities. Third-Party Financing arranged by FGMWC, FVWA and/or any joint financing authority formed by Project Participants will be secured and repaid from revenues generated by the Water Project.
III. Proposed Transaction
Tier 2 Water
Supply
Hesperia will purchase up to seventy-five thousand acre-feet (75,000 AF) of Tier 2 Water under terms and conditions to be agreed upon by the parties. Hesperia will assume responsibility and cost for transportation, delivery , storage and exchange of any purchased Tier 2 Water Supply.
Point of
Delivery and
Exchange
Project Water will made available for conveyance through Capital Facilities, including the Norther n or Southern Pipeline , at points of delivery designated by Hesperia, or via exchange, provided that in the event of an exchange, the Parties have identified a willing exchange partner and are in mutual agreement as to the terms of the delivery or exchange.
Price For Tier 2 Water Supply – Hesperia will be responsible for the actual incremental costs for extraction, conveyance, delivery, and/or exchange of Tier 2 water supply.
Hesperia will pay FGMWC for actual incremental costs to extract and convey Tier 2 Water to designated points of delivery upon actual use of Capital Facilities on a space available basis.
The parties shall agree to adjust the price of water under this Section in consideration for Hesperia participating in Third Party Financing for Capital Facilities.
Term The term of the Definitive Agreement will begin on the date of execution and terminate forty (40) years from Cadiz’ issuance of written notice of completion of construction for the segment of the Northern Pipeline necessary to convey Project Water to a point of delivery designated by Hesperia.
Reservation Fee FGMWC will provide Hesperia with a written invoice for reservation of Project Water upon execution of a Definitive Agreement. Hesperia shall pay Cadiz a reservation fee of twenty-five thousand dollars ($25,000) fully creditable against the purchase price within thirty (30) days of the receipt of the invoice.
IV. Conditions Precedent
Regulatory
Compliance
FGMWC, FVWA, Hesperia and/or Cadiz obtain all necessary permits for construction of Capital Facilities, conveyance, and delivery of Project Water to points of delivery designated by Hesperia.
Third-Party
Financing
FGMWC, FVWA and/or Cadiz obtain Third -Party Financing for construction of Capital Facilities on terms and conditions satisfactory to FGMWC, FVWA, Hesperia and Cadiz.
Exchange
Agreements
FGMWC, FVWA, Hesperia and/or Cadiz secure exchange agreements with public water agencies necessary to facilitate conveyance and delivery of Project Water on terms and conditions satisfactory to Hesperia and FGMWC in each party’s sole and complete discretion.