COST SHARE/REIMBURSEMENT AGREEMENT
BETWEEN SANTA CLARA VALLEY WATER AND THE CITY OF MERCED REGARDING EVALUATION OF 4S RANCH PROPERTY
This Cost Share Agreement (Agreement) is made as of ______ , 2022 (Effective Date) between Santa Clara Valley Water District hereinafter referred to as "Valley Water," and the City of Merced, hereinafter referred to as "Merced". Throughout this Agreement, Valley Water and Merced may be referred to together as the ""Parties", or each individually as a "Party".
RECITALS
A. WHEREAS, Valley Water develops, stores, manages, distributes, and delivers water for domestic, industrial and agricultural uses, as the primary water supply and grou ndwater management agency in Santa Clara County;
B. WHEREAS, Merced is a city duly formed and organized under State law; C. WHEREAS, the 4S Ranch is a property ("4S Ranch" or "Property") located within the County of Merced and includes Merced County APNs 049-220-015, 049-220-016, 049-220-017, 049-220-018, 049-220-019, 049-220-020, 049-200-005, 049-200-019,049-200-020, 049- 200-021,049-200-022,049-200-023,049-200-024,049-200-025, 065-030-004,049-240-016, and 049-240-017;
D. Whereas, the owner of 4S Ranch, Sandton Capital Partners, is in the process of preparing a feasibility report as to the use of the Property for a potential groundwater bank; E. WHEREAS, Valley Water and Merced have interest in exploring a partnership to potentially purchase the 4S Ranch and/or otherwise use the 4S Ranch for groundwater banking or water supply or water storage purposes;
F. WHEREAS, Valley Water intends to, with Merced's agreement and consent, retain consultant EKI Consulting, Inc. ("EKI") to perform a technical review analyzing the groundwater banking feasibility report prepared at the direction of the owner of 4S Ranch; G. WHEREAS, Valley Water intends to, with Merced's agreement and consent, retain consultant Westwater Research, LLC ("Westwater") to conduct due diligence support services, including but not limited to, analyzing the feasibility of using 4S Ranch for a groundwater bank, assessing the Property's water rights and applicable regulatory and environmental constraints; and,
H. WHEREAS, Valley Water and Merced believe there is mutual benefit to retaining EKI and Westwater to assist them in determining the viability of 4S Ranch for use as a groundwater bank or other water storage or water supply project and determining whether to consider partnering and attempting to purchase the Property, and therefore they agree to share equally in the costs of EKl's and WestWater's work in connection with the evaluation of the Property.
AGREEMENT PROVISIONS
NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained {00281046.1}
herein, Valley Water and Merced hereby agree as follows:
SECTION I
SCOPE OF WORK
1.1 Valley Water and Merced agree to share equally in the cost of EKl's work in connection with 4S Ranch up to a total not-to-exceed amount of Fifty Thousand Dollars ($50,000), or Twenty-Five Thousand Dollars ($25,000) per Party.
1.2 Valley Water and Merced agree to share equally in the cost of WestWater's work in connection with 4S Ranch up to a total not-to-exceed amount of Seventeen Thousand Four Hundred Eight Dollars ($17,480), or Eight Thousand Seven Hundred Forty Dollars ($8,740) per Party.
1.3 EKI and Westwater will bill Valley Water for their services as incurred. Valley Water shall be responsible for paying EKl's and WestWater's invoices in full, and Merced will be responsible for reimbursing Valley Water for payment of its 50% share of costs through payment to Valley Water.
1.4 The Parties agree that each shall have full right and license to view and use any and all 4S Ranch work product created by consultants EKI and Westwater ("Consultant Work Product") for their own purposes. Both parties will have an opportunity to review and comment on any Consultant Work Product. Both Valley Water and Merced may contact EKI or Westwater with inquiries relating to their work on 4S Ranch; provided, however, Merced will coordinate with Valley Water prior to initiating conversations with, or requesting additional work from, either consultant.
1.5 If either Party wishes to communicate with the other concerning any legal issue(s) or legal concern(s), the Parties agree that only their respective counsel shall communicate regarding such issue(s) or concern(s) and take care to avoid disclosing internal attorney-client privileged communications.
1.6 The term of this Agreement is from the Effective Date through the completion of the Scope of Work of both contracts, which is estimated to be completed by approximately December 31, 2022 or upon the date of receipt by Valley Water of payment in full by Merced in accordance with the terms of this Agreement, whichever is later, unless otherwise modified or extended by the Parties in writing.
SECTION II
DUTIES
2.1 Valley Water and Merced shall adhere to the following procedures for the sharing of costs under this Agreement:
a. Valley Water shall be responsible for paying all invoices submitted to it by EKI or Westwater in a timely fashion and shall pay 100% of all amounts due directly to EKI or Westwater.
b. On or about a quarterly basis, Valley Water will send to Merced a copy of all invoices received from EKI and Westwater, as well as any payments made to EKI or Westwater, {00281046.1}
and Valley Water will request reimbursement from Merced for its 50% cost share. c. Merced shall reimburse or pay to Valley Water its 50% share of costs within thirty (30) days of its receipt of such (quarterly) payment request from Valley Water. d. Valley Water shall provide Merced, upon request, proof of all payments made by Valley Water to EKI and Westwater in connection with their work on 4S Ranch. e. In the event that Valley Water disputes any invoice or portion of an invoice received from EKI or Westwater for their work on 4S Ranch, and such invoice is reduced or otherwise adjusted, Valley Water shall promptly notify Merced of such event, and any reduction shall be shared equally by both Parties.
2.2 It is the intent of Valley Water and Merced to limit disclosure of Consultant Work Product and any other confidential work product, records, and materials ("Confidential Materials") to their respective employees, counsel, and consultants. Valley Water and Merced agree to maintain as confidential all Confidential Materials to the maximum extent allowable consistent with State law. Valley Water and Merced agree that, if either receives a Public Records Act request for potentially Confidential Materials, they will notify the other as soon as practicable to allow the party an opportunity to seek an injunction or other Court order prohibiting or limiting any such disclosure, and shall determine in good faith whether said records are exempt from the California Public Records Act (e.g., feasibility estimates and evaluations made relative to the acquisition of property under Government Code section 6254, subdivision (h); attorney-client privilege; etc.).
SECTION Ill
DEFENSE AND INDEMNIFICATION AGAINST THIRD-PARTY CLAIMS
3.1 Valley Water and Merced agree that each of the Parties hereto shall fully defend, indemnify and hold the other Party, including its officers, board members, employees, and agents, harmless from any and all third-party claim, expense or cost, damage, or liability arising out of any alleged negligent act or omission of the indemnifying Party, its officers, employees, or agents, under or in connection with or arising out of any work, authority, or jurisdiction delegated to such Party under this Agreement. No Party, nor any officer, board member, or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions of the other Party hereto, its officers, board members, employees, or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other Party under this Agreement.
SECTION IV
ADDITIONAL PROVISIONS
4.1 A Party's waiver of any term, condition or covenant, or breach of any term, condition, or covenant shall not be construed as a waiver of any other term, condition or covenant or breach of any other term, condition or covenant.
4.2 This Agreement contains the entire Agreement between Valley Water and Merced relating to the sharing or reimbursement of costs for work by consultants EKI and Westwater. Any prior agreements, promises, negotiations, or representations not expressly set forth in this {00281046.1}
Agreement are of no force or effect.
4.3 If any term, condition or covenant of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall be valid and binding on Valley Water and Merced.
4.4 This Agreement shall be governed and construed in accordance with the laws of the State of California.
4.5 This Agreement may be executed in counterparts and by electronic means and will be binding as executed.
4.6 All changes or extensions to this Agreement must be in writing in the form of an amendment approved by both Parties.
4. 7 This Agreement is entered into only for the benefit of the Parties executing this Agreement and not for the benefit of any other individual, entity, or person.
4.8 Either Valley Water or Merced may terminate this Agreement at any time upon thirty (30) days written notice prior to start of work by EKI or Westwater on 4S Ranch. Once EKl's work or WestWater's work has commenced, the Agreement can only be terminated upon mutual written consent and terms acceptable to both Parties.
4.9 None of the Parties is acting as the agent of the others in any respect hereunder, and the Parties are independent entities with respect to the terms and conditions of this Agreement.
Nothing contained in this Agreement or in any document executed in connection with this Agreement shall be construed as making any of the Parties joint venturers or partners.
4.10 Each of the undersigned individuals represent that they are authorized to execute this Agreement on behalf of their respective Party.
SECTION V
NOTICES
5.1 All notices and/or payment requests make pursuant to this Agreement may be delivered by United States first class mail, postage-paid or by electronic mail (email) addressed to the appropriate Party at the following addresses:
II I
To Valley Water: Santa Clara Valley Water District
5750 Almaden Expressway
San Jose, CA 95118
Attn: Andrew Garcia
tel: (408) 630-2817
email: [email protected]
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To Merced: City of Merced
678 West 18th Street
Merced, CA 95340
Attn: Stephanie Dietz
tel: (209) 388-8670
email: [email protected]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.
City of Merced Santa Clara Valley Water District
Signature: ___________ _ Signature: ___________ _
Stephanie R. Dietz Rick L. Callender, Esq.
City Manager Chief Executive Officer
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City Attorney
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