AGREEMENT FOR OPERATION OF GAGE
CANAL FACILITIES.
1 THIS AGREEMENT made and entered into this 9th day of
2 June, 1965, between the CITY OF RIVERSIDE, a municipal 3 corporation, and THE GAGE CANAL COMPANY, a corporation. 4 Section 1: The following definitions shall apply to
5 this agreement unless the context obviously calls or provides 6 for a different meaning:
7 a. "City" shall mean City of Riverside.
8 "Company" shall mean The Gage Canal Company.
9 c. "Judgment" shall mean that certain Judgnent in
10 Eminent Domain and Final Order of Condemnation entered in that 11 certain action No. 70785 in the Superior Court of the state of 12 callfornla, In and for the County of Riverside, entitled: "CIty 13 Of Riverside, a municipal corporation, Plaintiff, vs. The Gage 14 Canal Company, a corporation, et al., Defendants", Including all 15 exhibits made a part thereof.
16 d. "Shareholder" shall mean persons or entities owning 17 shares issued by The lage Canal. Company and the attendant right 18- to receive water pursuant thereto, but shall not mean the City 19 of Riverside unless specified.
e. "Contractual obligees" shall mean persons and
21 entitles specifically recognized in Exhibit "B" of the Stipulation 22 for Judgment in Eminent Domain and Final Order of Condemnation 23 and Judgment in Eminent Domain and Final Order of Condemnation 24 and shareholders and former shareholders or their qualified 25 successors in interest having rights to receive water pursuant 26 to agreement with the City of Riverside.
27 I. 'Service Area" shall mean the service area of The 28 Gage Canal Company as specified and described in Exhibit "D" 29 of the Stipulation for Judgment in Eninent Domain and Final 30 Order of Condemnation.
31 g. "Miners Inch" shall mean a rate of flow of 1/50th 32 of one cubie foot of water per second.
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1 n. "By Laws" shall mean the By Laws and Articles of
2 Incorporation of The Gage Canal Company as set forth in 3 Exh1b1t "''" of the Stipulation for Judgment in Eminent Domain 4 and Final Order of Condemnation.
5 1. "Canal" shall mean The Gage Canal Company canal
6 facility and canal rights of way as they exist on the date of 7 this agreement and as conveyed to the City of Riverside pursuant 8 to the Judgment.
Section 2: No provision, undertaking, condition or
10 obligation realted in this Agreement shall be construed to 1imit 1l or alter the duty of the City to deliver water through the con- 12 demned facilities to the persons or entities entitled to receive 13 the same in the manner and way and under the conditions specified 14 in the Judgment and as required by law.
15 Section 3: It 16 the purpose of this agreement to make 16 avallable to the City of Riverside the knowledgeable Irrigation 17 water production and distribution supervision, management, 18 operation and maintenance personnel and facilities and experience 19 of the Company for the purpose of carrying out the duties and 20 obligations of the City assumed and Imposed by law as a result 21 of the Judgment, for the benefit of the citizens of the City and 22 in particular for the benefit of the shareholders and contractual 23 obligees who possess water delivery and other contractual rights 24 which the City has assumed and which it recognizes. Subject to 25 the terms of the Judgment, it 1s the purpose of this agreement 26 to assure that all persons lawfully entitled to receive water 27 pursuant to the ownership of shares in The Gage Canal Company 28 on the date of the Judgment will be protected in their respective 29 rights to have and receive for use upon their lands irrigation 30 water delivered in the manrer to which they have become accustomed, 31 for so long as the water 1s put to beneficlal use on lands within 32 the Service Area.
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1 Section 4: In accordance with the terms of this agree- 2 ment the Company shall, as an independent contractor, supervise, 3 operate and maintain the real property, facilities and 4 fixtures condemned to the use of the City by the Judgment. In addition, the Company agrees to utilize and employ that property retained by the Company pursuant to the Judgment which is neces- 7 sary to the efficient operation, maintenance and administration 8 of the entire water production and distribution facility and the fulfillment of the terms of this agreement. Unless otherwise 10 specified by this agreement, the operation, maintenance and 11 adninistration of the above specified properties, for the purpose 12 specified in Section 3, shall be conducted in the same manner 13 and in accordance with the practices employed at the time of 14 the execution of this agreement; the same manner ana practices 15 shall Include but not be limited to accounting procedures, cost 16 computations and allocations, record keeping and f1l1ng, b1lling 17 and collecting, delivery of water, and payment of appropriate 18 taxes and expenses. The transfer of the right to receive water 19 from one parcel to another shall be only in accordance with City 20 approval.
21 Section 5: The Company acknowledges and agrees that
22 the performance of this agreement requires primary utilization 23 of the personnel and facilities of the Company and the Company 24 shall not engage in any new business enterprise without notice 25 to the City. The City shall have the option of cancelling this 26 agreement 1f the Company, after notice, engages in any activity 27 or enterprise detrimental or contrary or in conflict with the 28 performance of this agreement.
29 Section 6: The Company agrees that no addltional shares 30 of the Company w111 be issued or requested; in that regard the 31 Company represents and warrants that on the date of the 32 execution of this agreement there are 14,055 shares of the -3-
1 Company outstanding. In addition, the Company will not enter 2 into any agreements that will disrupt or Impair the relation- 3 ship between the City, the Company, shareholders and contrac- 4 tual obligees, as established by the Judgment and this agreement.
Section 7: Unless otherwise specified in this agreement, 6 the City will exercise full rights of ownership and control over 7 the properties condemned to its use in accordance with estab- 8 lished law pursuant to the Judgnent; provided, however, there 9 shall be no City utilization or disposition of the condemned 10 properties, improvements or replacements which prevents or 11 obstructe the Company's performance of this agreement or interferes 12 with the rights of the shareholders or contractual obligees to 13 receive and flow water as recognized by the Judgment and this 14 agreement.
15 Section 8: The City agrees that any canal alteration 16 or covering done at City's Instigation shall be done at no 17 expense to the shareholders and accomplished in a manner that 18 W111 not interfere with or interrupt water delivery schedules. 19 Section 9: The Company shall supervise and patrol the 20 condemned properties for thé purpose of preventing trespass, 21 encroachment, damage or adverse possession and use by unauthor- 22 Ized persons. The Company shall report any damage or adverse 23 possession to the City immediately upon knowledge thereof, and 24 the Company shall take all steps within its powers to stop or 25 correct such damage or adverse possession.
26 Section 10: Public lability and property damage
liability for acts or omissions of the Company incident to the 28 operation and maintenance of the property of the Company and 29 the property condemned to the use of the City is the responsi- 30 bility of the Company and the Company shall indemnify and hold 31 the City harmless from any claim or demand against the City 32 resulting proximately from the operation and maintenance by the Company. The Company shall obtain and keep in force and effect -4-
1 publie liability and property damage Insurance indemnifying 2 the Company In minimum amounts of $500,000 each person, 3 $1,000,000' each accident and $200,000 property damage. 4 Section 11: Any secured or unsecured taxes lawfully
5 assessed against the properties condemned to the use of the 6 City, together with any and all water rights, pump or replenish- 7 ment taxes lawfully imposed which are attributable to the water rights or facillties utilized for carrying out the water pro- 9 duction and delivery obligations of the City as established by 10 this agreement and the Judgment will be paid by the City in 11 full, when due; an Itemized billing for such taxes paid w111 12 be submitted to the Company and the Company shall reimburse the 13 City within thirty days after receipt of b1ll1ng.
14 Section 12: The CIty shall have the right to utilize 15 any excess Canal flowage capacity that 1s not required to meet 16 delivery obligations to shareholders and contractual obligees 17 and in accordance with existing carrying rights agreements. The 18 City shall reimburse the Company for any reduction of payments from holders of carrying rights in the Canal resulting from an 20 Increase in the total flowage in the Canal caused by such City 21 use of excess Canal capacity.
22 Section 13: The water entitlement of the 450 shares of 23 East Riverside Water Company stock transferred to the City 24 shall be used to meet water delivery obligations represented by 25 the 600 shares of Company stock owned by the City and represented 26 by Certificate No. A-1997. The City w111 pay promptly all 27 assessments levied on the 450 shares by the East Riverside 28 Water Company and the Company shall reimburse the City for the 29 assessment payments within thirty days of billing.
30 Section 14: The CIty shall deliver or cause to be
31 delivered water upon request of the Company in accordance with 32 and responsive to that certain written agreement entered into -5-
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by and between the Company and the Riverside Water Company 2 dated November 14, 1949. The Company shall pay the City all 3 charges as specified and in accordance with said agreement. 4 Section 15: All capital improvements, additions and.
5 replacements necessary to fully exercise the water rights 6 condemned to the use of the City and necessary to the 7 Company's performance of this agreement shall be paid for by 8 the Company, installed only on former Gage properties condemned 9 to the City and shall be the property of the City. The 10 Company shall submit an annual capital expenditures budget for 11 approval by the City; costs of such improvements necessary to 12 efficient performance of this agreement shall be borne by all 13 shareholders, including the City, and/or contractual obligees 14 as operating expenses in accordance with previous practices 15 and existing agreements; except the City shall assume the 16 shareholders' allocation of expense for canal covering instigated by the City.
18 Section 16: The fixed works, equipment and improvements condemned to the use of the City or constructed as provided in 20 Section 15 above, shall not be removed, abandoned, destroyed 21 or substantially altered without the city's consent. 22 Section 17: The Company shall not cause or permit
23 water to be delivered or flow except to the lands and facilities 24 of persons and entities lawfully entitled pursuant to the Judg- 25 ment or this agreement and who are not in default of any pay- 26 ment of any water rate, water tax, share assessment, or flowage 27 charge, except as may be authorized or directed by the City. 28 For the purpose of defining and limiting the responsibilities 29 Of the Company in performance of this agreement, the parties 30 agree that the shareholders' right to receive water, including 31 extra water, in the service area shall be the same as specified 32 in the Company's by-laws shareholder agreements and Company or
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1 practices as such rights existed and prevailed on July 1, 2 1964; provided, however, the Company agrees that the total 3 rate of flow and annual quantity of water, including extra 4 water, produced at the sources of supply for delivery to share- 5 holders shall not exceed a flow or amount in excess of the 6 sharcholders' proportional entitlement to the flowage and 7 water rights condemned to the City as such rights are presently 8 restricted and burdened or additionally restricted or burdened 9 by pending or future litigation. In the case of a dispute or 10 claim by the persons or entities specified in the Judgment or 11 this agreement, or in the case of dispute or claim of right to 12 receipt of water by persons or entities not specified in the 13 Judgment or this agreement, the City shall be solely responsible 14 for determining, resisting or compromising such dispute or claim. 15 If the quantity of water or rate of flow which the Company agrees 16 to produce for delivery to shareholders proves insufficient to 17 meet seasonal or peak demand requirements of the irrigation 18 shareholders in the service area, the City will make additional 19 water available at the cost of replacement and treatment from 20 alternate sources as available; or the Company at its election 21 and at its expense may contract for delivery of such make-up 22 water from the Western Municipal Water District of Riverside 23 County; the Company agrees that such additional water shall 24 not be made available to serve lands from which water stock or 25 rights to receive water have been severed or conveyed for use 26 or benefit outside the service area.
27 Section 18:
Subject only to the limitations of water
28 and flowage rights condemned to the City, the Company shall 29 deliver to the City upon demand all water not lawfully 30 committed to third persons or entities; in addition, the Company 31 shall deliver to the City at no cost all of the water entitle- 32 ment of the East Riverside Water Company not demanded by that -7-
1 company, together with all water salvaged from seepage and 2 evaporation as a result of canal covering. For the amount of 3 water delivered to the City equivalent to the total basic 4 water entitlement of all Gage Canal Company shares owned by 5 the City, the City shall reimburse the Company at the prevailing 6 water tax per share. For all other water delivered to the 7 City, the City shall reimburse the Company only the cost of 8 production, which payment shall be based on the average 9 unit cost of production for the previous fiscal period; the 10 cost of production shall include power, fuel, lubricating oil, 11 supplies, maintenance, repairs, labor, equipment, and 12 depreciation entirely attributable to the operation of the 13 water production equipment, but shall not include capital 14 expenditures. No pumping charge shall be paid by the City for 15 water delivered to the City pursuant to the City's ownership 16 of shares of the East Riverside Water Company. All water 17 demanded by the City shall be delivered at points along the 18 Canal system as designated by the City.
19 Section 19: The parties shall have free and immediate 20 access to the respective books and records of each other during 21 regular business hours and the Company and the City personnel 22 shall cooperate in providing the information requested. In the 23 course of fulfilling and carrying out the rights, duties and 24 obligations of the City as provided in the Judgment, shareholder 25 agreements, City ordinances and this agreement, the City will 26 from time to time appear as pledgee or encumbrancer on company 27 shares owned by other persons and entities; the Company agrees 28 to honor such procedure and to notify the City of any sale, 29 transfer or assignment of shares or water entitlement, and 30 the Company shall take no steps in furtherance of a transfer of shares or change in delivery of water without the knowledge 32 and consent of the City, where consent is required by the -8-
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1 Judgment, this or other agreement. In addition, the Company shall 2 not permit the transfer or relocation of water entitlement or place 3 of water delivery from one parcel of land to another without the 4 knowledge and consent of the City, regardless of whether or not 5 the City appears as pledgee or encumbrancer.
6 Section 20: Ihis agreement supercedes and cancells any 7 previous oral or written agreement between the City and Company 8 relating to operation and maintenance of the property, cost allocations or terms of delivery of and payment for water delivered 10 to the City by the Company.
11 Section 21: Ihis agreement shall not constitute an agency 12 or employment relationship and no Company personnel shall be con- 13 strued to be employees of the City of Riverside nor shall they be 14 entitled to any employee or retirement benefits of the City. The Company shall maintain workman's compensation coverage as required by law.
17 Section 22: In the event of the Company's failure to 18 perform any term or condition, the City shall serve notice of 19 breach upon the Company and the Company shall have ten days 20 within which to correct or perform. Failure to correct or perform 21 within the ten day period shall be cause for termination; the 22 City reserving the right to all legal remedies.
23 Section 23: The Company acknowledges that, in addition to 24 other considerations, the payment of One Dollar ($1.00) per year 25 to the Company by City constitutes full and adequate consideration. 26 CITY OF RIVERSIDE, anicipal corporation
27 u Mayor
28 Attest Slishecken Gity Clerk
29 THE GAGE CANAL, COMPANY, corporation
30 APPROVED AS. TO By. President
FORM:
31 on bart le seoretary
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