March 26, 2021

VIA EMAIL:

RE: Public Records Act Request Received March 17, 2021, Providing Documents

Dear Mr. Fulmer,

This letter responds to your request for records under the California Public Records Act (Gov. §§ 6250 - 6276.48), received via email on March 17, 2021. You requested the following information:

Any and all contractual agreements, current and expired, between LACSD and the Arrowhead Lake Association (ALA).

In response to your request above, District staff have located and are providing the responsive documents listed below, via email attachments.

Agreements Between LACSD and ALA • 1997 MOU Regarding Watershed Cost Sharing • 2002 Agreement for Water Service • 2007 Agreement Regarding Protection of Beneficial Uses of Lake Arrowhead • 2008 Agreement to Install and Operate Groundwater Well No. 8 • 2012-2013, 2018 Reduced Fee Rental Agreement Weekdays & Off Season • 2015 Settlement and Mutual Release Agreement • 2019 S&T 7100 Evaluation ofApproaches to Determine Mixing and Assimilation ofReuse Effluent Project • 2020 Agreement Regarding Protection of Beneficial Uses of Lake Arrowhead

If you have any questions concerning this letter, please feel free to contact me at (909) 336 -7117 or [email protected].

Sincerely, 11'~---~~J Kathleen Field Executive Assistant

Cc: Catherine Cerri, General Manager

Email attachments

Water/Wastewater Systems P.O. Box 700 Lake Arrowhead, CA 92352 (909) 336-7100 (909) 337-3145 Fax MEMORANDUM OF UNDERSTANDING REGARDING WATERSHED MANAGEMENT COST SHARING BETWEEN LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT AND ARROWHEAD LAKE ASSOCIATION

' THIS ~MORANDUM OF UNDERSTANDING (M:OU) is entered into this Lf__.6day ~~ , 1997, by and between the Lake Arrowhead Comm -Se'es District, a public agency (DISTRICT) th whose fiscal year ends June 30 , and the Arrowhead Lake Association, a California non-profit corporation (ASSOCIATION), whose fiscal year ends st March 31 •

RECITALS

WHEREAS, the DISTRICT and the ASSOCIATION have a mutual primary interest in preserving the water quality and the water' supply associated with the Lake Arrowhead Watershed, and

WHEREAS, mfurtherance ofsaid interests, the DIS'IRICT and the ASSOCIATION des:ire to participate in a cost-sharing arrangement for certain water quality and water supply projects associated with the protection and management ofthe Lake Arrowhead Watershed.

NOW THEREFORE, the parties agree as follows: 1. ANNUAL BUDGET DEVELOPMENT . On or before February 1st ofeach year during the term ofthis MOU, representatives ofthe DISTRICT and ASSOCIATION shall jointly develop a watershed management budget (BUDGET), fully docrunenting the cost ofwatershed management water quality and supply activities (WATERSHED MANAGEMENT ACTMTIES) that are proposed to be performed by the DISTRICT and the ASSOCIATION during the upcoming BUDGET year. The BUDGET year is identified in Section (2) below. WATERSHED MANAGEMENT ACTMTIES are identified in Section (4) below. The BUDGET cost amounts for any given BUDGET year shall not exceed the maximum BUDGET cost amounts which are identified in Section (5) below.

2. BUDGET YEAR

The BUDGET year shall be 1:l}e period July 1st of a given year, to June 30th ofthe subsequent year, which is consistent with the DISTRICT fiscal year.

3. APPROVAL OF THE BUDGET BY THF, l)ISTRICT BOARD. OF DIRECTORS AND THE ASSOCIATION BOARD OF DIRECTORS

Each year during the term ofthis MOU, on or before the first day of their respective Fiscal Years, the DISTRICT Board ofDirectors and the ASSOCIATION Board ofDirectors will each respectively make a determination as to whether the DISTRICT and the ASSOCIATION approve the BUDGET for the upcoming BUDGET yeax-, The Budget, so approved, snail be reflected in the DISTRICT's and the ASSOCIATION's annual budget pursuant to the normal procedures for adoption ofthe DISTRICT's and the ASSOCIATION's annual budget.

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 2

. ·------4. WATERSHED MANAGEMENT ACTIVlffiS TO BE INCLUDED IN THE BUDGET

The DISTRICT and the ASSOCIATION agree that certain WATERSHED MANAGEMENT ACTMTIES are necessary to maintain the Lake Arrowhead Watershed as both a water supply and recreational water body. Such certain WATERSHED MANAGEMENT ACTIVITIES are identified in Exhibit 1 to this MOU. These certain WATERSHED MANAGEMENT ACTIVITIES are the only activities to be included in the BUDGET. No activities other than those included in Exhibit (1) shall be included in the BUDGET unless such activities are added to Exhibit (1) by an amendment to the MOU. Exhibit (1) a,lso sets forth the party that shall be responsible for performance ofspecific WATERSHED MANAGEMENT ACTIVITIES.

5. MAXIMUM BUDGET COSTAMOUNTS

The DISTRICT and the ASSOCIATION agree that the BUDGET for WATERSHED MANAGEMENT ACTIVITIES identified in Exhibit (1) shall not be exceeded, except for a COST OF LIVING INCREASE, as identified in Section (6) below. The maximum amount for any WATERSHED MANAGEMENT ACTIVITY shall be referred to as the MAXIMUM BUDGET COST AMOUNT for that activity. :MAXIMUM BUDGET COST AMOUNTS are identified in Exhibit (2) to this MOU. The MAXIMUM BUDGET COST AMOUNTS identified in Exhibit (2) shall be updated annually, based on a COST OF LIVING INCREASE, as identified 111 Section (6) below. No MAXIMUM BUDGET COST AMOUNT identified in the .annually updated Exhibit (2) shall be exceeded :in the BUDGET unless such MAXIMUM BUDGET COST AMOUNT is increased by an amendment to the MOU.

WATERSBEDMANAGEMENTCOSTSHAlUNGMOU JULY9, 1997 J>AGE3

------············--· ()

6. COST OF LIVING INCREASE

During February ofeach year during the term of this MOU, the MAXIMUM BUDGET COST AMOUNTS identified in Exhibit (2) shall be updated, based on a COST OF LIVING INCREASE. The COST OF LIVING INCREASE sball be based on the U.S. Department ofLabor, Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers, Percent Change for Los Angeles - Anaheim - Riverside, for the Year Ending the preceding January. Exhibit (2) shall be dated according to the month and year that it is updated in accordance with Section (5) and the updated Exhibit (2) sha11 replace the prior Exhibit (2).

7. PERCENTAGE OF COST SHARING BY THE DISTRICT AND THE ASSOCIATION

The DISTRICT agrees that certain of the WATERSHED MANAGEMENT ACTMTIES identified in this MOU would need to be performed by the DISTRICT were it to maintain the Lake Arrowhead Watershed exclusively as a potable water supply. The ASSOCIATION agrees that certain ofthe WATERSHED MANAGEMENT ACTIVITIES identified in this MOU would need to be performed by the ASSOCIATION were it to maintain. the Lake Arrowhead Watershed exclusively as a recreational water body. The DISTRICT and the ASSOCIATION agree to share the costs ofthe certain WATERSHED MANAGEMENT ACTIVITIES identified in this MOU equally. Therefore the DISTRICT and the ASSOCIATION shall each contribute fifty percent (50%) ofthe total amount of each BUDGET.

WATERSHED MANAGEM:ENT COST SHARING MOU JULY 9, 1997 PAGE 4 8. COSTS VARYING FROM THE AMllJNT ORIGINALLY BUDGETED~ APPROVAL OF BUDGET AMENDMENT BY THE DISTRICT AND TBE ASSOCIATION

In the event that during any applicable BUDGET year, the anticipated costs to be incurred for the WATERSHED MANAGEMENT ACTMTIES included in the BUDGET are substantially greater than the approved BUDGET, the DISTRICT and the ASSOCIATION may develop an amendment to the BUDGET (BUDGET AMENDMENT). The BUDGET AMENDMENT shall be submitted to the DISTRICT Board ofDirectors and the ASSOCIATION Board ofDirectors for approval. Any such BUDGET AMENDMENT request shall be made by either party within a reasonable period oftime and in a diligent manner as soon as the applicable party makes such discovery and shall not be postponed until the end of such BUDGET year. The DISTRlCT Board ofDirectors and the .ASSOCIATION Board of Directors shall then in good faith consider the BUDGET AMEND:MENT. The BUDGET AMENDMENT shall not, however, exceed fue MAXIMUM BUDGET COST AMOUNT without an amendment to the MOU. If a party proceeds with WATERSHED MANAGEMENT ACTMTIES that exceed the approved BUDGET prior to approval of a BUDGET AMENDMENT, said party understands that those costs shall not be covered under this MOU . unless the BUDGET AMENDMENT is approved.

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 5 9. PAYMENT

Each year's BUDGET shall identify costs associated with DISTRICT performance ofcertain W ATERSH{;D MAINTENANCE ACTMTIBS and ASSOCIATION performance ofcertain WATERSHED MANAGEMENT ACTMTIES for that BUDGET year. The BUDGET shall further identify the total net amount due to either the DISTRICT or the ASSOCIATION for WATERSHED MANAGEMENT ACTMTIES for that BUDGET year, once the fifty percent (50%) cost sharing for all activities is calculated. By August 1 ofeach year the DISTRICT and the ASSOCIATION shall each provide a full accounting ofthe actual costs incurred related to the BUDGET for the prior BUDGET year, and a final amount due to either the DISTRICT or the ASSOCIATION, as appropriate, shall be· · · · ·· determined. Such amount due shall be paid by September 1. Should the final amount due exceed the BUDGET amount, an appropriate BUDGET-Alv.lENDMENT must be made, as identified fu Section (7).

10. INDEPENDENT PROJECTS OF THE DISTRICT

All cons1:n,tction woi;~gp.ducted by the DISTRICT in the performance ofany ofthe WATERSHED MANAGEMENT ACTMTIES identified in this MOU shall be the sole and absolute responsibility ofthe DISTRICT. The ASSOCIATION shall not be responsible for any aspect ofthe WATERSHED MANAGEMENT ACTMTIES undertaken by the DISTRlCT. No WATERSHED MANAGEMENT ACTMTY performed by the DISTRICT in conjunction with this MOU shall be deemed to be a joint venture between the DISTRICT and the ASSOCIATION or deemed .. performed under the control, authority or direction ofthe ASSOCIATION. The ASSOCIATION shall not be deemed to be the owner ofany property, have any interest in any property, nor shall the ASSOCIATION take title to any facility or final product produced by the DISTRICT as the result ofthese activities.

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 6 11. INDEPENDENT PROJECTS OF THE ASSOCIATION

All construction work conducted by the ASSOCIATION in the performance of any ofthe WATERSHED MANAGEMENT ACTIVITIES identified in this MOU shall be the sole and absolute responsibility ofthe ASSOCIATION. The DISTRICT shall not be responsible for any aspect ofthe WATERSHED MANAGEMENT ACTIVITIES undertaken by the ASSOCIATION. No WATERSHED MANAGE1v.1ENT ACTMTYperformed by the ASSOCIATION in conjunction with thls MOU shall be deemed to be a joint venture between the DISTRICT and the ASSOCIATION or deemed performed under the control, authority or direction ofthe DISTRICT" nor shall such work be considered a public works project. The DISTRICT shall not be deemed to be the owner ofany property, have any interest in any property, nor shall the DISTRICT take title to any facility or final product produced by the ASSOCIATION as the result ofthese activities.

12. DISTRICT HOLD HARMLESS AND INDEMNIFICATION

The DISTRICT shall assume the defense of, indemnify and hold harmless, the ASSOCIATION and each ofits directors, employees or agents from and against any and all actions, damages, claims, losses, expenses or liability arising from or related to the DISTRICT's acts or omissions in performing or failing to perform the WATERSHED MANAGE1v.1ENT ACTMTIES which are the subject ofthis MOU.

WATERSHED MANAGEJ.Y.IENT COST SHARING MOU .JULY 9, 1997 PAGE 7 13. ASSOCIATION HOLD HARMLESS AND INDEMNIFICATION

The ASSOCIATION shall assume the defense of, :indemnity and hold harmless, the DISTRICT and each ofits directors, employees or agents from and aga:inst any and all actions, damages, claims, losses, expenses or liability arising from or related to the ASSOCIATION's acts or omissions :in performing or fail:ing to perform the WATERSHED MANAGEMENT ACTIVlTIES which are the subject ofthis MOU.

14. ATTORNEYS' FEES

In the event ofany controversy, claim or dispute between the parties which arises out ofor relates to this MOU or to the breach ofthe same, the prevailing party shall be entitled to recover from the losing party reasonable expenses, reasonable attorneys' fees and costs.

15. TERM

This MOU shall remain in effect until such time that either party wishes to rescind the MOU. The decision to rescind must be conveyed to the other party in writing prior to the beginning ofan upcoming Budget year. The MOU shall remain in effect through any BUDGET year in progress, once the BUDGET is approved.

16. AMENDMENT

Any amendment to this MOU shall be made in writing and must be signedby both parties.

WAT:ERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 8 LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT (A Public Agency)

•' .

By_._ ~~~f.t_,'---·✓ ~.. - Pre:fident ·

By .£v/ l t 0 Gener~oard~cretary

ARROWHEAD LAKE ASSOCIATION (A California Non-Profit Corporation)

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 9 EXIDBIT1

MOU REGARDING WATERSHED MANAGEMENT COST SHARING BETWEEN THE DISTRICT AND THE ASSOCIATION

WATERSHED MANAGEMENT ACTMTIES TO BE INCLUDED IN '.DIB MOU BllpGET

The following is a listing ofWATERSHED MANAGEMENT ACTMTIES to be included in the MOU BUDGET:

1. Lake Arrowhead Dam Permit Fees. 2. Repair, Maintenance and Construction ofErosion and/or Sediment Control Facilities. 3. Dredging ofInlets to Certain Lake Arrowhead Bays. 4. Repair and Maintenance ofLake Tower, Outlet System and Spillway. 5. Lake Surface Water Monitoring Program:

1. LAKE ARROWHEAD DAM PERMIT FEES

The following dam pemrit fee is included as a WATERSHED MANAGEMENT ACTMTY, since the fee would need to be paid by either the ])ISTRICT or the ASSOCIATION, were Lake Arrowhead used exclusively for water supply or recreational activities:

Division of Safety of Dams (.DSD) Annual Permit Fee. •

The DSD permit fee is paid by the ASSOCIATION'. The DSD permit is required by State law. The DSD inspects the dam and the outlet system in conjunction with the permitting process.

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 10 2. REPAIR, MAINTENANCE AND CONSTRUCTION OF EROSION AND/OR SEDIMENT CONTROL FACILITIES

Repair, mamtenance and construction of erosion and/or sediment control facilities is included as a WATERSHED MANAGEMENT ACTMTY, since such repair and maintenance would need to be performed by either the DISTRICT or the ASSOCIATION, were Lake Arrowhead used exclusively for water supply or recreational activities. Current facilities are:

a) Orchard Bay Sediinentation Basin b) Emerald Bay - West Sedimentation Basin c) Winter Harbor - East Sedimentation Basin d) Winter Harbor - West Sedimentation Basin e) Meadow Bay Sedimentation Basin

Repairs and maintenance of all erosion and/or sediment control facilities are performed by the ASSOCIATION. Repair and maintenance consists ofremoving sediment collected in the basins, repairing storm damaged basins and modifying basins as necessary due to storm activity..

Construction would include construction of any needed sedimentation basin or erosion control facility which would result in a more cost effective sediment and erosion control operation.

Construction of all erosion and/or sediment control facilities is performed by the ASSOCIATION. Construction costs exceeding the MAXIMUM BDPGET COST AMOUNT for this item, identified in Exhibit (2), will require either an amendment to Exhibit (2) in accordance with the MOU, or will require a cost sharing arrangement between the DISTRICT and the ASSOCIATION separate from this MOU.

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 11 3. DREDGING OF INLETS TO CERTAIN LAKE ARROWHEAD BAYS

Dredging ofthe following inlets to certain Lake Arrowhead Bays is included as a Watershed Management Activity, since the dredging would need to be performed by either the DISTRICT or the ASSOCIATION, were Lake Arrowhead used exclusively forwater supply or recreational activities:

a) Areas Dredged Annually: 1) OrchardBay 2) Blue Jay Bay 3) Burnt Mill Bay

b) Areas Dredged on an As Need Basis: 1) Village Bay · 2) Winter Harbor - East 3) Winter Harbor - West 4) Emerald Bay 5) North Bay - East 6) North Bay - Central 7) Rainbow Bay 8) Paradise Bay 9) ,Meadow Bay

Dredging is performed by the ASSOCIATION. Areas are dredged at the area ofinflow only, not the entire bay. Theses areas are dredged to remove sediment material from inlet areas and maintain adequate stream flow into Lake Arrowhead, as well as to maintain lake water quality and storage capacity. Dredging associated.with maintaining navigation and dock access is not included in the MOU.

WATERSHEDMANAGEME:NTCOSTSHARINGMOU JTJLY9,1997 FAGE12 '·

4. REPAIR AND MAINTENANCE OF LAKE TOWER, OUTLET SYSTEM AND SPil,LWAY

Repair and maintenance ofthe lake tower, outlet system and spillway is included as a Watershed Management Activity, since such repair and maintenance would need to be performed by either the DISTRICT or the ASSOCIATION, were Lake Arrowhead used exclusively for.water supply or recreational activities.

Repair and maintenance ofthe lake tower, outlet system and spillway· is performed by the ASSOCIATION. Such repair and maintenance includes:

a) Operation, repair and maintenance ofoutlet valves and valve operators, b) Repair and maintenance of access elevator, c) Operation, repair and maintenance ofspillway, and d) Repair and maintenance oftower and associated pipes, tunnel and outlet valve room.

Repair costs, or possible unit replacement costs, exceeding the MAXIMUM BUDGET COST AMOUNT for this item, identified in Exhibit (2),will require either an amendment to Exhibit (2) in accordance with the MOU, or will require a cost sharing arrangement between the DISTRICT and the ASSOCIATION separate from this MOU.

. WATERSHED MANAGEMENT COST SHARlNG MOU JULY 9, 1997 PAGE 13 I

5. LAKE SURFACE WATER MONITORING PROGRAM

The lake surface water 1nonitoring program is included as a Watershed Management Activity, since the monitoring would need to be perfonned by either the DISTRICT or the ASSOCIATION, were Lake Arrowhead used exclusively for water supply or recreational activities. The monitoring program is as follows: ·

a) Weekly Monitoring, Memorial Day to Labor Day: 1) Burnt'Mill Beach Club 2) Tavern Bay Beach Club

b) Monthly Monitoring, Six Months per Year: 1) Blue Jay Canyon Creek 2) Lower Burnt Mill Creek 3) Orchard Creek

c) Annual Monitoring: 1) · Meadow Bay 2) NorthBay

All surface water monitoring is performed by the DISTRICT.

Weekly monitoring consists oftesting for: 1) Total and Fecal Coliforms, each sample point, each week. 2) ,Fecal Streptococci / Enterococci, each sample point, each week. 3) General Minerals, rotated sampling point, one sample each,week.

WATERSHED MANAGEMENT COST $HARING MOU JULY 9, 1997 PAGE 14 Monthly monitoring consists of testing for: 1) Total and Fecal Coliforms, each sample point, each month. 2) Fecal Streptococci/ Enterococci, each sample point, each month. 3) General :Minerals, rotated sampling point, one sample each month. 4) MBAS, each sample point, each month.

Annual monitoring consists oftesting for: 1) Herbicides, EPA Method 5i5.1, each sample point, each year 2) Diquat, BPA Method 549.1, each sample point, each year.

WATERSHED MANAGEMENT COST SHARJNGMOU JULY9, 1997 P.,AGE 15 1;..,__ .

EXIllBIT2

MOU REGARDING WATERSHED MANAGEMENT COST SHARING BETWEEN THE DISTRICT AND THE ASSOCIATION

MAXIMUM BUDGET COST AMOUNTS FOR WATERSHED MANAGEMENTACTMTIES

The following is the identification ofthe MAXTh1lJM BUDGET COST AMOUNTS for the WATERSHED MANAGEMENT ACTIVITIES, and the basis for the maximum cost calculation.

Included in the development ofthe MAXIMUM BUDGET COST . AMOUNT is an estimated total cost amount and a contingency amount.

It should be noted that the BUDGET cost amount for any given year could be less than the maximum amounts listed below, but exceeding the MAXIMUM BUDGET COST AMOUNTS will require an amendment to this Exhibit in accordance with the MOU.

1. LAKE ARROWHEAD DAM PERMIT FEES

-The DSD Maximum Permit Fee Amount is currently $4,500. This permit fee may increase as a resttlt of State action. -·

In no case shall the MAXIMUM BUDGET COST AMOUNT exceed the amount on the invoice from the Department ofWater Resources for the Annual Dam Fee.

WATERSHED MANAGEMENT COST SHARJNG MOU JULY 9, 1997 PAGE 16 2. REPAIR,, MAINTENANCE AND CONSTRUCTION OF EROSION AND/OR SEDIMENT CONTROL FACILITIES

SEDIMENTATION AMOUNT OF MATERIAL COST BASIN REMOVED ANNUALLY (Estimated) (Estimated)

Orchard Bay 400 yds $ 6,400 Emerald Bay - West 275 yds $ 4,400 Winter Harbor - East 100 yds $ 1,606 Winter Harbor - West 150 yds $ 2,400 Meadow Bay 100 yds $ 1,600

Total 1,025 yds $16,400

Contingency Amount $·3,280

MAXIMUMBUDGETCOSTAMOUNT $19,680

A material removal cost of $16.00 per yd is used as the basis of estimating cost.

WATERSBED~AGEMENTCOSTSHARlNGMOU JOLY9,1997 PAGE17 3. DREDGING OF INLETS TO CERTAIN LAKE AJIBOWHEAD BAYS

BAY AMOUNT OF COST COST MATERIAL ANNUAL TRI- REMOVED ANNUAL (Estimated)

Orchard Bay 300 yds (annual) (1) $4,800 $ 4,800 Blue Jay Bay 1,000 yds (annual) (1) $16,000 $16,000 Burnt Mill Bay 400 yds (annual) (I) $6,400 $ 6,400

Village Bay 200yds (tri-ann) (2) $ 6,000 Winter Harbor - Bast 50yds (tri-ann) (2) $ 1,500 Winter Harbor - West 50yds (tri-ann) (2) $. 1,500 Emerald Bay 150 yds (tri-ann) (2) $ 4,500 North Bay - East 50yds (tri-ann) (1) $ 800 North Bay- Central 75yds (tri-ann) (2) $ 2,250 Rainbow Bay 75yds (tri-ann) (2) $ 2,250 Paradise Bay 50yds (tri-ann) (2) $ 1,500 Meadow Bay 50yds (tri-ann) (2) $ 1,500

Total 2,450yds $27,200 $49,000

Contingency Amount· $ 5,440 $ 9,800

.MAXIMUMBUDGETCOSTAMOUNT $32,64~ $58,800

J (1) A material removal cost of$16.00 per yd is used as the basis of .. estimating cost. ·

(2) A material removal cost of$30.00 per yd is used as the basis of· estimating cost.

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 18 4. REPAIR AND MAINTENANCE OF LAKE TO)VER~ ffiJTLET SYSTEM AND SPILLWAY

ACTMTY LABOR PARTS TOTAL COST COST COST

Operation, Repair And $ 500 $ 500 $ 1,000 Maintenance Of Outlet Valves And Valve Operators

Repair And Maintenance Of $ 1,100 (ALA) $5,000 $12,500 Access Elevator $ 6,400 (OTIS)

Operation, Repair And $1,300 $ 200 $ · 1,500 Maintenance Of Spillway

Repair .A11d Maintenance Of $ 500 $ 1,100 $ 1,600 Tower And Associated Pipes, Tunnel And Outlet Valve Room.

. Permit to Operate an Elevator (1) $ 170

Total $ 16,770

Contingency Anlount $ 3,354

MAXIMUMBUDGETCOSTAMODNT $20,124

(1) State of California Department ofIndustrial Relations Division of OSHA

WATERSHED MANAGEMENT COST SHARING MOU JULY 9, 1997 PAGE 19 •.'

5. LAKE SURFACE WATER MONITORING PROGRAM

MONITORING TYPE NO. COST TOTAL LOCATION PER PER COST YR ANALYSIS

BmntMill Beach Club Weekly 26 $ 52.12 $ 1,355.

Tavern Bay Beach Club Weekly 26 $ 52.12 $ 1,355.

Blue Jay Canyon Creek Monthly 12 $ 80.50 $ 966.

Lower Bumt Mill Creek Monthly 12 $ 80.50 $ 966.

Orchard Creek Monthly 12 $ 80.50 $ 966.

Meadow Bay Annual 1 $ 140.00 $ 140.

North Bay Annual 1 $ 140.00 $ 140.

Total $ 5,888.

Contingency Amount $ 500.

MAXIMUM BUDGET COST AMOUNT •. $ 6,388.

See Exhibit 1 for specific analyses to be performed for weekly, monthly and annual monitoring.

WATERSHED MANAGEMENT COST S}lAR[NG MOU JULY 9, 1997 PAGE 20 ARROWHEAD January 13, 2006 L·A·K·E ASSOCIATION {l'larvin Shaw Lake Arrowhead Community Services District P.O. Box 700, Lake Arrowhead, CA 92352

Dear Mr. Shaw,

The Arrowhead Lake Association has been notified by the State of California, Department of Water Resources, that the access elevator must1be made fully functional. At the request of ALA, the State performed a detailed inspection of the elevator and listed specific repairs that are required (attached).

Subsequently, ALA sought and received a quotation from Executive Elevators in the amount of$68,4:23.00 to effectuate the repairs required by the State. Other vendors were contacted but chose not to respond.

The Memorand1:1m of:Understanding (1'9.97,jf-,('l;(l)lJ} .includes the repair and maintenance of the elevator as a shared (50/50) expense between ALA and LACSD but limits annual costs to $12,500. Consumer Price Index allowances would increase this amount by 29.8% to $16,112.50. The MOU also makes provision for both entities to address unusual expenses accordingly. I would appreciate your Boards' consideration and approval of 50% of ALA's cost related to tbe above repairs. I will be presenting this matter to the ALA 13mird-on-january-2fr, 2006 for their consideration. With the approval of our respective Boards of Directors, I would anticipate initiation of repairs in February.

Thank you for your assistance,

~,,Gene,al Maaag~Q______ARROWHEAD LAKE ASSOCIATION A California Non-Profit Organization .

Cc: Kathy Courtner, LACSD Steve Scott, ALA

P.O. Box 1119 • Lake Arrowhead• California 92352 • 909/337-2595 U.S Department of Labor Statistics Consumer Price Index Series ID: CUURA421SA0 Los Angeles-Riverside-Orange County

!Year CPI %Change

Original Budget Amounts $ 12,500.00 1997 159.1 1998 161.0 1.2% $ 12,649.28 1999 164.2 2.0% $ 12,900.69 2000 167.9 2.3% $ 13,191.39 2001 174.2 3.8% $ 13,686.36 2002 178.9 2.7% $ 14,055.63 2003 185.2 3.5% $ 14,550.60 2004 188.5 1.8% $ 14,809.87 2005 195.4 3.7% $ 15,351.98 Total allowable expenses for elevator repair $ 111,195.79

Amounts paid for elevator: 97/98 2,168.00 99/00 4,982.00 00/01 11,080.00 01/02 7,369.00 25,599.00

Net excess of allowed over amount actually paid 85,596.79 AGREEME~T FOR WATER SERVICE

THIS AGREEMENT FOR WATER SERVICE ("Agreement") is entered between the Lake Arrowhead Community Services District, a public agency ("District") and the Arrowhead Lake Association, a California non­ profit corporation ("Customer"),

RECITALS

A. District is a public agency with the authority to provide water service to its customers within its Certificated Service Area.

B. Customer is the owner of a reserve strip, reserve strip addition and buffer zones surrounding Lake Arrowhead and abutting its snores, including Peninsula Park.

C. A dispute exists concerning whether Customer has certain riparian rights. This agreement shall not constitute admission that either party's position is correct. District shall provide water to Customer pursuant to the terms and conditions of this Agreement for an annual charge of one dollar ($ 1.00), and Customer shall not otherwise than pursuant to this agreement take water from Lake Arrowhead for any purpose.

. NOW THEREFORE, in consideration for performance of the covenants and conditions set forth herein, the parties agree as follows:

I. Service. Upon execution of this Agreement, Customer shall be permitted to receive water service ("Service") to the Peninsula Park ("Property") for the annual charge of one dollar ($1.00). The annual charge shall be paid by Customer to District on or before the anniversary date of the date of this Agreement. Customer shall be permitted to pump, or otherwise extract, the amount of water necessary for said .Service from that particular location along and in Lake Arrowhead as more particularly described in Exhibit "A." (a) Limitation On Amount Of Water. The amount of water pumped or extracted by Customer for Service shall not exceed the amount necessary to irrigate the Property in connection with its current use as a recreational park. In addition, the amount of water pumped or extracted shall be limited in accordance with the District's Rules And Regulations For Water And Wastewater Service irtcluding, without limitation, the District's water conservation program to promote water efficient landscaping and any drought or -water shortage stages that may be implemented.

2. Pumping and Extraction Facilities. Customer shall be solely responsible, at its sole cost and expense, for the construction, installation, operation, maintenance and repair of all facilities necessary for transmission of water ("Facilities") for Service to the Property. The Facilities · shall be located on Customer's real property. The Facilities and their location are more particularly described in Exhibit "A". Customer shall not alter the Facilities or their location without the prior written consent of District. District reserves the right to inspect and monitor the location and operation of the Facilities in order to determine compliance with this Agreement. In addition, District reserves the right to install and operate, at its cost and expense, a meter or similar device to monitor the amount of water extracted and transmitted by the Facilities. In connection therewith, Customer hereby grants District a license and right of way for ingress and egress over, along, and across any real property of Customer for the purpose of gaining access to the Facilities for said inspection and monitoring and to install and operate any metering device.

3. Acknowledgement·ofWater Rights.

(a) By entering into this Agreement, Customer aclmowledges and agrees that Customer, other than pursuant to the Service provided in this Agreement, shall not otherwise remove water from Lake Arrowhead for any purposes. In addition, Customer aclmowledges and agrees that except for the

2 (-

Service provided in this Agreement, no person other than District has any authority to remove water from Lake Arrowhead, and that Customer shall obtain its water service for all other applications and uses from District with respect to its facilities in District's service area.

(b) Nothing in this Agreement shall be construed as an admission or waiver of any type by either of the parties in regard to the nature and extent of the Water Rights. Nothing in this Agreement shall be construed as a waiver, release, relinquishment or dismissal of any claims, causes of action, or demands, known or unknown, actual or potential, as against either party in regard to the nature and extent of water rights.

4. District's Rules And Regulations - Special and Unique Circumstances.

(a) Application of Rules and Regulations. Service to the Property shall be subject to District's Rules And Regulations For Water And Wastewater Service, as amended from time to time. For example, and not by way of limitation, the Service shall be subject to: (i) restrictions on ~ater consumption due to water conservation measures that may be applicable generally to District's customers; and (ii) termination in the event of a violation of the Rules and Regulations. Except as otherwise specifically set forth in this Agreement, District may determine, in its discretion, to consider Service to the Property to be subject to those provisions of the Rules and Regulations addressing Exceptional Water Service, that is, untreated water deliveries. Except as otherwise provided in this Agreement, any restriction or termination of Service shall require mutual agreement. Failure of Customer to pay the annual charge as required in this Agreement shall subject Customer to collection and enforcement procedures for non-payment as provided for in the District's Rules and Regulations.

3 n

(b) Special and Unique Circumstances. It is aclmowledged and agreed that Service to the Property under this Agreement is only being provided to Customer due to the following special and unique circ.umstances surrounding: (i) the location of the Property and the means by which Service can be provided to the Property; and (ii) the nature of C~stomer as a California non-profit corporation that is operating as the management arm for the property owners-members within Arrowhead Woods who are the owners of Lake Arrowhead's lake bed and lakeshore and in particular, the identification of Customer as the Arrowhead Lake Association. As a result of the special and unique circumstances set forth herein: (i) the Property shall be permitted to receive Service under this Agreement and (ii) District may, in its discretion, adopt amendments and revisions to its Rules And Regulations For Water And Wastewater Service which may incorporate this Agreement and otherwise establish and document the fact the Service is being provided to the Property only as a result of these special and unique circumstances.

(c) No Service to Other Properties. Since Service is only being permitted due to the special and unique circumstances referenced in this Agreement, Customer shall not be entitled to receive any such water service to any other property on the same or similar terms and conditions as set forth in this Agreement.

5. Termination of Agre~ment. This Agreement may be terminated by District in the event of Customer's breach of any of the provisions of this Agreement. In addition, Service may be discontinued, or otherwise restricted, pursuant to the provisions of the Rules And Regulations For Water And Wastewater Service. For example, and not by way of limitation, the failure of Customer to pay the annual charge as required herein shall subject Customer to collection and enforcement procedures for non-payment as provided for in the District's Rules and Regulations. The provisions of this Section 5 are subject to the provisions of Section 4(a).

4 6. Indemnification. As a condition to the prov1s10n of Service to Customer, · Customer agrees to indemnify, defend, and .hold District hannless from and against all liability, claims, losses, actions, and expenses (including attorneys' fees), which may arise in connection with performance of this Agre~~er~.t and the provision of Service tq Customer through the construc-tion, installation, operation, maintenance and repair of all Facilities for Service to the Property ( except with respect to any equipment installed by District). This indemnification obligation includes, without limitation, any damages or other impacts on the Customer or the Property.

7. General Provisions.

(a) Incorporation of Recitals. The Recitals set forth in this Agreement are incorporated herein and made an operative part of this Agreement.

(b) Attorneys Fees. In the event of any controversy, claim, or dispute between the parties which arises out of, or relates to, this Agreement or to the breach of the same, the prevailing party shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs.

(c) Amendments. This Agreement may not be amended except by a subsequent writing which is signed by the parties:

(d) Successors and Assigns. Neither party shall assign or otherwise transfer any rights under, or interest in, this Agreement without the written consent of the other party, which consent shall not be umeasonably withheld. Unless specifically stated to the contrary in any consent, no assignment or transfer will release or discharge the assignor from any duty or responsibility under this Agreement.

(e) Severability. Any provision or part of this Agreement held to be void or unenforceable shall be deemed stricken, and all

5 r· I I

remaining provisions shall continue to be valid and binding upon the parties.

(f) Waiver. Non-enforcement of a provision by either party shall not constitute a waiver of that provision, nor shall it affect enfo~c~ability of that provision or the remainder of this Agreement.

6 I- J

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth below.

Lake Arrowhead Community Services District

DATED: / ~ · /9 - o -;_ By~ 11 /4J~ Ken Nelsen, Interim General Manager

Arrowhead Lake Association, Customer

BY~•..aaa,---=-~..a.Q..4-....:....!..-'--'-'~....µ:;.>«-=...-+-,<-- - Stacey McKa

7 November 16, 2007

AGREEMENT REGARDING PROTECTION OF BENEFICIAL USES OF LAKE ARROWHEAD

RECITALS

A. Lake Anowhead is an invaluable resource to the .community serving both as the water supply source for the Al.Towhead Woods community and as a recreational asset.

B. Several disputes have arisen over the years concerning the best way to preserve and manage Lake Arrowhead both as a water supply source and· as a recreational asset.

C. The Lake Anowhead Community Services District (LACSD) and the Arrowhead Lake Association (ALA) have a mutual interest in preserving the water quality and the water supply associated with the Lake Anowhead Watershed.

D. Both ALA and LACSD were involved in State Water Resources Control Board

( 11 SWRCB 11 ) Enforcement Hearing on Cease and Desist Order 262.31-18 and Administrative Civil Liability Complaint No. 262.5-40.

E. In order to proceyd in a cooperative mam1er through the SWRCB Enforcement Hearing, ALA and LAC SD entered in to Memorandum ofUnderstanding (MOU) which served a,s a settlement ofthe areas of contention.between ALA and LACSD. A fully executed copy ofthis settlement agreement is attached hereto as Exhibit 11 1. 11

Under Paragraph 5 ofthe MOU, ALA was required to withdraw its Notice ofIntent to Appear, all written testimony, all exhibits, and any other evidence or policy statements from the SWRCB Enforcement Hearing. ALA was fmiher required to support LACSD0 s position at the hearing. ALA fully perf01med these requirements.

G. At the conclusion ofthe Enforcement Hearing, the SWRCB issued Order 2006-01. Ainong other things, the Order defines LADSD's pre-1914 rights to divert water from Lake Arrowhead for domestic uses .

H. .Under Paragraph 4 ofthe MOU, ALA and LACSD agreed to work together to fonnulate a physical solution to enable LACSD to meet its obligations under the settlement agreement. I. In furtherance of the Settlement Agreements and the Parties' mutual interests, LACSD •and ALA also desire to participate in a cost-sharing anangement for certain water quality and ~ater supply projects. associated with the protection and management of the Lake Arrowhead Watershed.

SB,451761 vl:010853.0001 1 This Agreement is intended to describe the terms of such a physical solution, and toward that end outlines:

• Cost sharing projects and maintenance activities

• Lake draw limitations

• Watershed management activities

TERMS AND CONDITIONS Lake Arrowhead Community Services District ("LACSD") and Arrowhead Lake Association ("ALA") enter into the following Agreement ("Agreement") and agree to the following terms and conditions.

This agreement incorporates the MOU dated November 11, 2005, attached here as Exhibit 1. The two agreements shall be read together to best effectuate the intent and mutual goals of the parties. If such reconciliation is not possible, then the terms of the MOU shall prevail, except as provided in Paragraph 2, below, regarding withdrawal limitations and the calculation of long-term averages. Additionally, this agreement updates and supersedes the 1997 Memorandum ofUnderstanding as well as the agreement for the iITigation at Peninsula Park.

Lake Arrowhead Water Rights

1. ALA recognizes that LACSD is the owner of a valid pre-1914 right to divert water from Lake Arrowhead for consumptive purposes, and LACSD recognizes that ALA is the owner of a valid pre-1914 right to divert water to create Lake Arrowhead for recreational purposes.

Withdrawal Limitations

1. Without quantifying or otherwise limiting LACSD's pre-1914 right, and notwithstanding any right that has been or may in the future be acknowledged by the SWRCB, LACSD agrees that beginning in January 2008, LACSD will limit its diversions from the Lake to 1,566 acre-feet/year (afy) on a long-term average basis. For purposes ofthis Agreement, "long-term average" means a rolling average over a 10-year period beginning January 1, 2008. For the first ten years, until January 1, 2018, the diversions shall be averaged over the number ofyears that have accrued since January 1, 2008. This amount will be inclusive ofall withdrawals from the Lake by LACSD, whether for domestic or irrigation purposes

2. Interface between ALA and LACSD. From time to time ALA and LACSD will designate two representatives and the General Manager of each entity to meet to discuss the implementation ofthe Agreement.

A. The meetings shall be mutually agreed upon by the parties and shall occur at least

SB 451761 vl:010853.0001 2 twice a year.

B. Although the provisions ofBrown Act do not apply to the meetings and persons designated to attend the meetings, the time, place and agenda for such meetings shall be posted by LACSD in accordance with the requirements ofthe first paragraph of Government Code Section 54954.2(a). No other requirements ofthe Brown Act shall apply to the meetings.

C. Minutes ofthe meetings shall be kept and posted on both the LACSD and ALA websites. Preparation of such minutes shall be the responsibility ofLAC SD.

D. All recommendations from the meetings shall be advisory and shall be submitted to both the ALA and LACSD Board ofDirectors for any action outside this Agreement to be undertaken.

3. The persons designated to discuss implementation ofthe Agreement and the general public shall receive lake water withdrawal information that quantifies LACSD's withdrawals of lake water for the previous month.

4. If at any time during the year the level ofthe Lake reaches 5103, the Interface Committee shall meet within 15 days ofthe Lake reaching such level and shall review the LACSD's planned extractions of lake water (defined according to a monthly withdrawal schedule for the remainder ofthe year). LACSD agrees that ifthe level ofthe Lake reaches 5,103, LACSD's withdrawals shall be limited according to a mutually agreeable schedule that will take in to account the month ofthe year and whose goal will be to ensure that withdrawals for that year are limited to no more than 1,566 afy. The purpose and goal of such schedule will be to make every reasonable effort to prevent the Lake level from going below 5100.

Lake Level Maintenance 5. ALA and LACSD agree that their mutual goal is to maintain the level ofthe Lake above 5,100 feet (ALA datum).

6. LACSD has in place a medium-term solution (i.e., LACSD and Crestline Lake Arrowhead Water Agency agreement signed July 7, 2005) designed to accomplish the parties' mutual goal ofmaintaining the level ofthe Lake above 5, 100 feet. In order to accomplish this goal on a long-term basis, the parties will work together to formulate and implement a physical solution that creates a permanent and reliable source of supplemental water. An Integrated Water Rescores Plan will be funded by LACSD and be developed with input from ALA and the LACSD's Customers. LACSD will further use best efforts to formulate and implement measures including the exploration and utilization ofthe area's groundwater to achieve the goal of maintaining the level ofthe Lake above 5,100 feet.

SWRCB Compliance 7. LACSD is responsible for compliance with SWRCB Order 2006-0001 and nothing in this Agreement will preclude the LACSD from complying with the requirements ofthis Order.

SB 451761 vl :010853.0001 3 Future Proceedings I 8. ALA agrees that if the Lake is operated and managed in the manner expressed herein, ALA will not allege injury to recreational or downstream users or environmental interests.

9. ALA agrees to support LAC SD in any future proceedings in defense of the operations of Lake Arrowhead for municipal water supply purposes.

10. LACSD agrees to support ALA in any future proceedings in defense of the operations of Lake Arrowhead for recreational purposes.

11. If LACSD is in breach of this Agreement, ALA shall not be bound by any of its covenants herein concerning injury caused by LACSD 1s operations.

Enforcement

12. This Agreement shall be specifically enforceable in Superior Court for the County of Riverside. Specifically, the parties shall consent and submit to the jurisdiction of the Court maintaining continuing jurisdiction over the case City of Barstow, et al. vs. City of Adelanto, et al., Case No. 208568 for the purpose of administration and enforcement of this Agreement. Such submission shall be solely for the purpose of enforcement and administration of this Agreement. LACSD acknowledges that it is already subject to the jurisdiction of the Court in that case. The intent ofthis paragraph is not to give the Mojave Water Agency authority over this Agreement.

Watershed Management

13. Annual Budget Development

On or before February 1st of each year during the term of this Agreement, Management representatives of the LACSD and ALA shall jointly develop a watershed management budget (BUDGET), fully documenting the cost of watershed management water quality and supply activities (WATERSHED MANAGEMENT ACTIVITIES) that are proposed to be performed by the LACSD and the ALA during the upcoming BUDGET year. The BUDGET year is identified in Section (14) below. WATERSHED MANAGEMENT ACTIVITIES are identified in Section (16) below. The BUDGET cost amounts for any given BUDGET year shall not exceed the maximum BUDGET cost amounts which are identified in Section (17) below.

14. Budget Year

The BUDGET year shall be the period July 1st of a given year, to June 30th of the · subsequent year, which is consistent with the LACSD fiscal year.

15. Approval of the Budget by the LACSD Board of Directors and the ALA Board of Directors

SB 451761 vl:010853.0001 4 Each year during the term of this Agreement, on or before the first day of their respective Fiscal Years, the LACSD Board of Directors and the ALA Board of Directors will each respectively and individually make a determination as to whether they approve the BUDGET for the upcoming year. The BUDGET, so approved, shall be reflected in the LACSD and the ALA'S annual budget pursuant to the normal procedures for adoption of the LAC SD' S and the ALA'S annual budget.

16. Watershed Management Activities to be Included in the Budget

The LACSD and the ALA agree that certain WATERSHED MANAGEMENT ACTIVITIES are necessary to maintain the Lake Arrowhead Watershed as both a water supply and recreational water body. Such certain WATERSHED MANAGEMENT ACTIVITIES are identified in Exhibit 2 to this Agreement. These certain WATERSHED MANAGEMENT ACTIVITIES are the only activities to be included in the BUDGET. No activities other than those included in Exhibit (2) shall be included in the BUDGET unless such activities are added to Exhibit (2) by an amendment to the AGREEMENT. Exhibit (2) also sets forth the party that shall be responsible for performance of specific WATERSHED MANAGEMENT ACTIVITIES.

17. Maximum Budget Cost Amounts

The LACSD and the ALA agree that the BUDGET for WATERSHED MANAGEMENT ACTIVITIES identified in Exhibit (2) shall not be exceeded, except for a Cost of Living Increase, as identified in Section (18) below. The maximum amount for any WATERSHED MANAGEMENT ACTIVITY shall be referred to as the Maximum Budget Cost Amount for that activity. Maximum Budget Cost Amounts are identified in Exhibit (3) to this Agreement. No Maximum Budget Cost Amounts identified in the annually updated Exhibit (3) shall be exceeded in the BUDGET unless such Maximum Budget Cost Amounts is increased by an amendment to the Agreement.

18. Cost of Living Increase

During February of each year during the term of this Agreement, the Maximum Budget Cost Amounts are identified in Exhibit (3) shall be updated, based on a Cost of Living Increase. The Cost of Living Increase shall be based on the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers, Percent Change for Los Angeles - Anaheim - Riverside, for the Year Ending the precedi°ng January. Exhibit (3) shall be dated according to the month and year that it is updated in accordance with Section (17) and the updated Exhibit (3) shall replace the prior Exhibit (3).

19. Percentage of Cost Sharing by the LACSD and the ALA

The LACSD agrees that certain of the WATERSHED MANAGEMENT ACTIVITIES identified in this Agreement would need to be performed by LACSD were it to maintain the Lake Arrowhead Watershed exclusively as a potable water supply. ALA agrees that certain of the WATERSHED MANAGEMENT ACTIVITIES identified in this Agreement would need to be SB 451761 vl:010853.0001. 5 performed by ALA were it to maintain the Lake Arrowhead Watershed exclusively as a recreational water body. The LACSD and the ALA agree to share the costs of the certain WATERSHED MANAGEMENT ACTIVITIES identified in this Agreement equally. Therefore LACSD and ALA shall each contribute fifty percent (50%) ofthe total amount of each BUDGET, except as identified in section (15), above.

20. Cost Varying from the Amount Originally Budgeted - Approval of Budget Amendment by the LACSD and the ALA.

In the event that during any applicable BUDGET year, the anticipated costs to be incurred for the WATERSHED MANAGEMENT ACTIVITIES included in the BUDGET are substantially greater than the approved BUDGET, LACSD and ALA may develop an amendment to the BUDGET (BUDGET AMENDMENT). The BUDGET AMENDMENT shall be submitted to the LACSD Board of Directors and the ALA Board of Directors for approval. Any such BUDGET AMENDMENT request shall be made by either party within a reasonable period of time and in a diligent manner as soon as the applicable party makes such discovery and shall not be postponed until the end of such BUDGET year. The LACSD Board of Directors and the ALA Board of Directors shall then in good faith consider the BUDGET AMENDMENT. The BUDGET AMENDMENT shall not, however, exceed the MAXIMUM BUDGET COST AMOUNT without an amendment to the Agreement. If a party proceeds with WATERSHED MANAGEMENT ACTIVITIES that exceed the approved BUDGET prior to approval of a BUDGET AMENDMENT, said party understands that those costs may not be covered under this Agreement unless the BUDGET AMENDMENT is approved.

21. Payment

Each year's BUDGET shall identify costs associated with LACSD performance of certain WATERSHED MAINTENANCE ACTIVITIES and ALA performance of certain WATERSHED MANAGEMENT ACTIVITIES for that BUDGET year. The BUDGET shall ·further identify the total net amount due to either the LACSD or the ALA for WATERSHED MANAGEMENT ACTIVITIES for that BUDGET year, once the fifty percent (50%) cost sharing for all activities is calculated. By August ls' of each year the LACSD and the ALA shall each provide a full accounting of the actual costs incurred related to the BUDGET for the prior BUDGET year, and a final amount due to either the LACSD or the ALA, as appropriate, shall be determined. Such amount due shall be paid by September 151• Should the final amount due exceed the BUDGET amount, an appropriate BUDGET AMENDMENT must be made, as identified in Section (20).

22. Independent Projects of the LACSD

All construction work conducted by the LACSD in the performance of any of the WATERSHED MANAGEMENT ACTIVITIES identified in this Agreement shall be the sole and absolute responsibility of the LACSD. The ALA shall not be responsible for any aspect of the WATERSHED MANAGEMENT ACTIVITIES undertaken by the LACSD. No WATERSHED MANAGEMENT ACTIVITY performed by the LACSD in conjunction with this Agreement shall be deemed to be a joint venture between the LACSD and the ALA or deemed performed under the control, authority or direction of the ALA. The ALA shall not be deemed to be the owner of any property, have any interest in any property, nor shall the ALA take title to any

SB 451761 vl:010853.0001 6 facility or final product produced by the LACSD as the result ofthese activities.

23. Independent Projects of the ALA

All construction work conducted by the ALA in the performance of any of the WATERSHED MANAGEMENT ACTIVITIES identified in this Agreement and fully paid for with ALA funds shall be the sole and absolute responsibility ofthe ALA. The LACSD shall not be responsible for any aspect ofthe WATERSHED MANAGEMENT ACTIVITIES undertaken by the ALA. No WATERSHED MANAGEMENT ACTIVITY performed by the ALA in conjunction with this Agreement shall be deemed to be a joint venture between the LACSD and the ALA or deemed performed under the control, authority or direction of the LACSD, nor shall such work be considered a public works project. The LACSD shall not be deemed to be the owner of any property, have any interest in any property, nor shall LACSD take title to any facility or final product produced by the ALA as the result ofthese activities.

24. LACSD Hold Harmless and Indemnification

The LACSD shall assume the defense of, indemnify and hold harmless, the ALA and each of its directors, employees or agents from and against any and all actions, damages, claims, losses, expenses or liability arising from or related to LACSDS's acts or omissions in performing or failing to perform the WATERSHED MANAGEMENT ACTIVITIES which are the subject ofthis Agreement.

25. ALA Hold Harmless and Indemnification

The ALA shall assume the defense of, indemnity and hold Harmless, the LACSD and each of its directors, employees or agents from and against any and all actions, damages, claims, losses, expenses or liability arising from or related to the ALA's acts or omissions in performing or failing to perform the WATERSHED MANAGEMENT ACTIVITIES which are the subject of this Agreement.

Additional Terms

26. Term: The te1m of this Agreement shall be 20 years from the date of execution. At the end of the first 20 year period, and at the end of every subsequent 20 year period, the Agreement will automatically renew for an additional 20 year term unless one of the parties delivers a written intent to renegotiate the Agreement to the other party within 30 days after the expiration ofthe term.

27. Amendments: The Terms and Conditions of this Agreement shall be amendable only by mutual written consent ofthe Boards of each ofthe parties.

28. Severability: The Terms and Conditions of this Agreement shall be severable, and the invalidity for whatever reason of any specific term shall not affect any other term of the Agreement.

SB 451761 vl:0108S3.0001 7 Arrowhead Lake Association

~J roved as to Form: f ~~--~~

Lake Arrowhead Community Services District

By: ~ 0//J/- Date: //;{,7 /o 7 Approved as to Form:

SB 451761 vl:010853.0001 8 EXHIBIT 1

The attached Agreement was prepared by representativesoftheLakeArrowhead Community Services District (LAC SD) and representatives of the Arrowhea.d Lalce Association (ALA) a.nd subsequently ratified by their respective Boards ofDirectors.

Th~ LACSD took action to nitify the Agreement ina closed Board Meeting on Friday, November 4,2005 and the ALA took action to ratify the Agreement on Saturday~ November 5, ,2005. .

Affirrned this date at the offices ofthe Arrowhead Lake Association at 870 Highway 173, Lake Arrowhead, California 92352.

Bruce Field,. President -Date L.ake Arrowhead Corrununity $ezyices District

C~rles . Klein, Presidemt Arrowhead Lake Association

SB 451761 vl:010853.0001 9 Lake Arrowhead Community ServicesDistrict ("LACSD") and Arrowhead Lake Association ("ALA.'') enter into the folio-wing Memorandum ofUnderstanding ("MOU"}and agree to the following tenns and conditions;

1. ALA recognizes that LACSD is the owner of a valid pre-1914 right to divert water from Lake Arrowhead for consumptive purposes, and LACSD recognizes that ALA is the owner ofa valid pre-1914 right to divert water to create Lake Arrowhead for recreational purposes. ·

2. Without quantifying or otherwiselimitingLACSD's pre-1914 right, and notwithstanding any right that may be acknowledged by the SWRCB, LACSD agrees that beginning in January 2007, LACSD will limit.its diversions from the Lake to 1,555 afy on a long-tenn average basis. This amount will be inclusive of all withdrawals from the Lake,whether for domestic or irrigation purposes. For purposes of this MOU, "long-tenn average" means a rolling average over a period ofthe previous ten (10) years. The amount of the "long-term average" may be adjusted upward.or downward by mutual agreement of LACSD and ALA based. on information that is collected and analyzed. LACSD agrees that ifthe level of the Lake reaches 5, 103,LACSD's withdrawals.shall be limited according to. a mutually agreeable schedule that will take in to account the mot1th of the year and whose goal will be to ensure that withdrawals for that year are limited to no more than 1,555 afy. ·

3. ALA and.LACSD agree that.their mutual goal is to.maintain the level.of the Lake ator above 5,IQ0 feet (ALA datum).

4. LACSD currently has in place a medium-term solution designed to accomplish the parties' mutual goal of maintaining the level ofthe Lake at or above 5,100 feet. In order to accomplish this goal on a Jong~term basis, the parties will work together to formulate and implement aphysical solution that creates a permanent and reliable source ofsupplemental water. In order to obtain a permanent and reliable source ofsupplemental water, LACSD will use best efforts to obtain an entitlement ofwater from State WaterProject Contractors. LACSD will further use best efforts to formulate and implement measures to achieve the goal of maintaining the level of the Lake at or above 5,100 ±bet.

5. ALA agrees t9 viithdraw its.Notice ofintent to Appear, all written testimony; all exhibits, and any other evidence or policy statements from the State Board Enforcement hearing ort Cease and Desist Order 262.31 ~ 18 and Administrative Civil Liability Complaint No. 2.62.5-40. ALAfurther agrees to support LACSD's position in the h~ariri.g. ·

SB 451761 vl:010853.0001 10 6. ALAagrees that ifthe Lake is operated and managed in the manner ex.pressed herein, ALA will not allege injury to downstream users or environmental interests.

7. This Agreement shall be specifically .enforceable in Superior Court for the County ofRiverside. Specifically, the parties shall consent and.submit to the jurisdictfon ofthe Court maintaining continuing jurisdiction over the case City of Barstow, et al. vs. City ofAdelanto, et al., Case No. 208568 for the purpose of administration and enforcement of this Agreement. Such submission shall be solely for the purpose of enforcement and administration ofthis Agreement. LACSD acknowledges that it is already subject to the jurisdiction ofthe Court in that case.

(The intent paragraph is not to give the Mojave Water Agency authority over this agreement.) .

RVPUB\INW\703065.1

SB 451761 vl:0108S3.0001 11 SB 451761 vl:010853.0001 12 EXHIBIT2

MOU REGARDING WATERSHED MANAGEMENT COST SHARING BETWEEN THE LACSD AND THE ALA

WATERSHED MANAGEMENT ACTIVITIES TO BE INCLUDED IN THE MOU BUDGET

The following is a listing of Watershed Management Activities to be included in the MOU BUDGET:

1. Monitoring Criteria 2. Lake Arrowhead Dam Permit Fees 3. Repair, Maintenance and Construction of Erosion and/or Sediment Control Facilities 4. Dredging of Inlets to Certain Lake Arrowhead Bays 5. Repair and Maintenance of Lake Tower, Outlet System and Spillway 6. Lake Surface Water Monitoring Program 7. Boat inspection program 8. Shared Structures 9. Ground water exchange

1. Monitoring Criteria

Inflow shall include Precipitation falling directly on the water surface of the Lake, plus the Runoff into the Lake resulting from the Precipitation on the watershed. Metered quantities of excess storm water flows transferred by gravity from Grass Valley Lake to Lake Arrowhead under the control ofALA shall be included when they occur.

Outflow shall include raw Water Supply extractions, Evaporation, and any Seepage losses into Papoose Lake. Raw water transferred from Lake Arrowhead to Grass Valley Lake for golf course irrigation shall be metered and accounted for separately. Outflow shall also include water Spilled from Lake Arrowhead over or through the Willow Creek Spillway, under the control of ALA.

Lake Level Measurements. Measurements of Lake level will be made at least daily by ALA at 8:00 am. LACSD will provide funding to ALA to upgrade the Lake level measuring system and equipment so that Lake level is continuously recorded.

Precipitation Measurements. Precipitation measurements will be obtained by LACSD from the San Bernardino County Flood Control LACSD, Water Resources Division, for every

SB 451761 vl:010853.0001 13 gauging station they monitor within the watershed. Information from LACSD gauging stations shall also be used. LACSD shall fund the installation by ALA of a recording rain gauge at the North Shore Marina.

Inflow From Grass Valley Lake Measurements. Measurement of the quantity of Inflow periodically flowing into Lake Arrowhead from Grass Valley Lake by gravity through the tunnel shall be independently made by LACSD at the discharge end of the tunnel and water spilled from Grass Valley over or through the Grass Valley Creek Spillway.

Withdrawal Measurements. LACSD shall be responsible for maintaining daily records of the quantities of water withdrawn from the Lake for domestic water supply, as well as any transfer to Grass Valley Lake for golf course irrigation, all in terms of acre-feet. LACSD shall provide such measurements to ALA

2. LAKE ARROWHEAD DAM PERMIT FEES

The following dam permit fee is included as a Watershed Management Activity, since the fee would need to be paid by either the LACSD or the ALA, were Lake Arrowhead used exclusively for water supply or recreational activities:

Division of Safety of Dams (DSD) Annual Permit Fee.

The DSD permit fee is paid by the ALA. The DSD permit is required by State law. The DSD inspects the dam and the outlet system in conjunction with the permitting process.

3. REPAIR, MAINTENANCE AND CONSTRUCTION OF EROSION AND/OR SEDIMENT CONTROL FACILITIES

Repair, maintenance and construction of erosion and/or sediment control facilities is included as a Watershed Management Activity, since such repair and maintenance would need to be performed by either the LACSD or the ALA, were Lake Arrowhead used exclusively for water supply or recreational activities. Current facilities are:

a. Orchard Bay Sedimentation Basin b. Emerald Bay - West Sedimentation Basin c. Winter Harbor - East Sedimentation Basin d. Winter Harbor - West Sedimentation Basin e. Meadow Bay Sedimentation Basin

Repairs and maintenance of all erosion and/or sediment control facilities are performed by the ALA. Repair and maintenance consists of removing sediment collected in the basins, repairing storm damaged basins and modifying basins as

SB 451761 vl:010853.0001 14 necessary due to storm activity.

Construction would include construction of any needed sedimentation basin or erosion control facility which would result in a more cost effective sediment and erosion control operation.

Construction of all erosion and/or sediment control facilities is performed by the ALA. Construction costs exceeding the Maximum Budget Cost Amount for this item, identified in Exhibit 3, will require either an amendment to Exhibit 3 in accordance with the MOU, or will require a cost sharing arrangement between the LACSD and the ALA separate from this MOU.

4. DREDGING OF INLETS TO CERTAIN LAKE ARROWHEAD BAYS

Dredging of inlets to Lake Arrowhead Bays as needed is included as a Watershed Management Activity, since the dredging would need to be performed by either the LACSD or the ALA, were Lake Arrowhead used exclusively for water supply or recreational activities:

Dredging is performed by the ALA. Areas are dredged at the area of inflow only, not the entire bay. These areas are dredged to remove sediment material from inlet areas and maintain adequate stream flow into Lake Arrowhead, as well as to maintain lake water quality and storage capacity. Dredging associated with maintaining navigation and dock access is not included in the MOU.

The LACSD shall assist the ALA in preparation and submittal of the appropriate applications to obtain necessary permits from State and Federal Agencies.

5. REPAIR AND MAINTENANCE OF LAKE TOWER, OUTLET SYSTEM AND SPILLWAY

Repair and maintenance of the Lake Tower, outlet system and spillway is included as a Watershed Management Activity, since such repair and maintenance would need to be performed by either the LACSD or the ALA, were Lake Arrowhead used exclusively for water supply or recreational activities.

Repair and maintenance of the Lake Tower, outlet system and spillway is performed by the ALA. Such repair and maintenance includes:

a) Operation, repair and maintenance of outlet valves and valve operators; b) Repair and maintenance of access elevator, specifically including annual maintenance contracts; c) Operation, repair and maintenance of spillway, and;

SB 451761 vl:010853.0001 15 d) Repair and maintenance oftower and associated pipes, tunnel and outlet valve room.

Repair costs, or possible unit replacement costs, exceeding the Maximum Budget Cost Amount for this item, identified in Exhibit (3), will require either an amendment to Exhibit (3) in accordance with the Agreement, or will require a cost sharing arrangement between the LACSD and the ALA separate from the Agreement.

6. LAKE SURFACE WATER MONITORING PROGRAM

The lake surface water monitoring program is included as a Watershed Management Activity, since the monitoring would need to be performed by either the LACSD or the ALA, were Lake Arrowhead used exclusively for water supply or recreational activities. The monitoring program is as follows:

a) Weekly Monitoring, Memorial Day to Labor Day: 1) Burnt Mill Beach Club 2) Tavern Bay Beach Club

b) Monthly Monitoring, Six Months per Year: 1) Blue Jay Canyon Creek 2) Lower Burnt Mill Creek 3) Orchard Creek c) .Annual Monitoring: 1) Meadow Bay 2) North Bay

All surface water monitoring is performed by the LACSD.

Weekly monitoring consists of testing for: 1) Total and Fecal Coli forms, each sample point, each week; 2) Fecal Streptococci/ Enterococci, each sample point, each week; 3) General Minerals, rotated sampling point, one sample each week.

Monthly monitoring consists of testing for: 1) Total and Fecal Coli forms, each sample point, each month; 2) Fecal Streptococci/ Enterococci, each sample point, each month; 3) General Minerals, rotated sampling point, one sample each month; 4) MBAS, each sample point, each month.

Annual monitoring consists of testing for: 1) Herbicides, BPA Methok 515.1, each sample point, each year; 2) Diquat, EPA Method 549.1, each sample point, each year.

SB 4S1761 vl:0108S3.0001 16 7. BOAT INSPECTION PROGRAM

The boat inspection program is included as an Operational Activity. The potential invasion ofthe zebra or quagga mussel poses a significant risk to the DISTRICT. The mussels clog water intake pipe and underwater screens. This plugs pumps and increases both maintenance and pumping costs. The monitoring program is as follows:

Daily boat ramp monitoring (May through September) (1) Verbal discussion with owner on the use location ofboat (2) Visual check ofboat and trailer (3) Inspection ofthe bilge of any out of state boat (4) Require high pressure cleaning ofboat

8. SHARED STRUCTURES

ALA and LACSD share the use of several structures for both walk ways and pipe supports. The organizations will share the maintenance and rehabilitation costs ofthese facilities.

9. GROUND WATER EXCHANGE

The LACSD will exchange raw ground water under the ALA's property for potable water on a two to one ratio. For example the LACSD will credit the ALA one half gallon of potable water delivered for every one gallon of ground water pumped from under its property.

The ALA may apply this credit to property owned and irrigated by the ALA at the time ofratification ofthis Agreement and to facilities owned by ALA including restrooms, offices, maintenance facilities, and member use facilities.

SB 451761 vl:010853.0001 17 EXHIBIT3

MOU REGARDING WATERSHED MANAGEMENT COST SHARING BETWEEN THE LACSD AND THE ALA

MAXIMUM BUDGET COST AMOUNTS FOR WATERSHED MANAGEMENT ACTIVITIES

The following is the identification of the Maximum Budget Cost Amounts for the Watershed Management Activities, and the basis for the maximum cost calculation.

Included in the development of the Maximum Budget Cost Amount are an estimated total cost amount and a contingency amount.

It should be noted that the BUDGET cost amount for any given year could be less then the maximum amounts listed below, but exceeding the Maximum Budget Cost Amounts will require an amendment to this Exhibit in accordance with the Agreement.

1. MONITORING CRITERIA

Change in Storage: Data for the monthly monitoring of Lake level changes and controlling the amount of water withdrawn from the Lake Arrowhead for water supply purposes shall be derived from actual measurements, as well as application of the basic Hydrologic Equation. LACSD needs 7 monitoring sites plus a site for a rain gauge. LACSD shall lease these sites including the right of access and egress from ALA at the rate of$ /000 per site per~- 1/Efl~ 1 This rate shall be adjusted annually pursuant to the CPI index referenced in paragraph 18 of i.12/ the terms and conditions ofthis Agreement. vr/C...., ~ !40/fj

2. LAKE ARROWHEAD DAM PROPERTIES

The DSD Maximum Permit Fee Amount is currently $26,500. This permit fee may increase as a result of State action.

In no case shall the Maximum Budget Cost Amount exceed the amount on the invoice from the Department of Water Resources for the Annual Dam Fee.

SB 451761 vl:010853.0001 18 3. REPAIR2 MAINTENANCE AND CONSTRUCTION OF EROSION AND/OR SEDIMENT CONTROL FACILITIES '.

SEDIMENTATION AMOUNT OF MATERIAL COST BASIN REMOVED ANNUALLY (Estimated) (Estimated)

Orchard Bay 400 yds $ 6,400 Emerald Bay - West 275 yds $4,400 Winter Harbor - East 100 yds $1,600 Winter Harbor - West 150 yds $2,400 Meadow Bay 100 yds $1,600

Total 1,025 yds $16,400

Contingency Amount $ 3,280

Maximum Budget Cost Amount $19,680

A material removal cost of $16.00 per yd is used as the basis of estimating cost.

4. DREDGING OF INLETS TO CERTAIN LAKE ARROWHEAD BAYS

BAY AMOUNT OF COST COST MATERIAL ANNUAL TRI- REMOVED ANNUAL (Estimated)

Orchard Bay 300 yds (annual) (1) $4,800 $4,800 Blue Jay Bay 1,000 yds (annual) (1) $16,000 $16,000 Burnt Mill Bay 400 yds (annual) (1) $ 6,400 $ 6,400 Village Bay 200 yds (tri-ann) (2) $ 6,000 Winter Harbor - East 50 yds (tri-ann) (2) $ 1,500 Winter Harbor - West 50 yds (tri-ann) (2) $ 1,500 Emerald Bay 150 yds (tri-ann) (2) $ 4,500 North Bay - East 50 yds (tri-ann) (1) $ 800 North Bay - Central 75 yds (tri-ann) (2) $ 2,250 Rainbow Bay 75 yds (tri-ann) (2) $ 2,250 Paradise Bay 50 yds (tri-ann) (2) $ 1,500 Meadow Bay 50 yds (tri-ann) (2) $ 1,500

Total 2,450 yds $27,200 $49,000

Contingency Amount $5,440 $9,800

SB 451761 vl :010853.0001 19 MAXIMUM BUDGET COST AMOUNT $32,640 58,800

A material removal cost of $16.00 per yd is used as the basis ofestimating cost. (1)

A material removal cost of $30.00 per yd is used as the basis of estimating cost. (2)

5. REPAIR AND MAINTENANCE OF LAKE TOWER, OUTLET SYSTEM AND SPILLWAY

ACTIVITY LABOR PARTS TOTAL COST COST COST

Operation, Repair and $ 500 $ 500 $ 1,000 Maintenance of Outlet Valves and Valve Operators

Repair and Maintenance Contract $ 7,500 $5,000 $12,500 For Access Elevator

Operation, Repair and $ 1,300 $ 200 $ 1,500 Maintenance of Spillway

Repair and Maintenance of $ 500 $ 1,100 $ 1,600 Tower and Associated Pipes, Tunnel and Outlet Valve Room

Permit to Operate an Elevator (1) $ 170

TOTAL $16,770

Contingency Amount $ 3,354

MAXIMUM BUDGET COST AMOUNT $20,124

(1) State of California Department of Industrial Relations Division of OSHA

SB 451761 vl:010853.0001 20 6. LAKE SURFACE WATER MONITORING PROGRAM

MONITORING TYPE #NR COST TOTAL LOCATION PER COST ANALYSIS

Burnt Mill Beach Club Weekly 26 $ 52.12 $ 1,355

Tavern Bay Beach Club Weekly 26 $ 52.12 $ 1,355

Blue Jay Canyon Creek Monthly 12 $ 80.50 $ 966

Lower Burnt Mill Creek Monthly 12 $ 80.50 $ 966

Orchard Creek Monthly 12 $ 80.50 $ 966

Meadow Bay Annual 1 $140 $ 140

North Bay Annual 1 $140 $ 140

Total $5,888

Contingency Amount $ 500

MAXIMUM BUDGET COST AMOUNT $ 6,388

See Exhibit 1 for specific analyses to be performed for weekly, monthly and annual monitoring.

7. BOAT INSPECTION PROGRAM

The boat inspection program is included as an Operational Activity. The potential invasion of the zebra or quagga mussel poses a significant risk to the DISTRICT. The mussels clog water intake pipe and underwater screens. This plugs pumps and increases both maintenance and pumping costs. The monitoring program is as follows:

Daily boat ramp monitoring (May through September) (1) Verbal discussion with owner on the use location ofboat (2) Visual check ofboat and trailer (3) Inspection ofthe bilge of any out of state boat (4) Require high pressure cleaning ofboat

MAXIMUM BUDGET COST AMOUNT $12,500

SB 451761 vl:010853.0001 21 8. SHAREDSTRUCTURES

The ALA and LACSD share several bridge structures that are used for transportation of water and for pedestrian traffic. The organizations shall share 50% of all costs related to the repair and Maintenance of these facilities. The Budget for the repair of the Structures will be submitted from ALA to LACSD by March 15 of any calendar year in which the work is to be performed.

9. WATEREXCHANGE

The LACSD will exchange raw ground water under the ALA's property for potable water on a two to one ratio. For example the LACSD will credit the ALA one half gallon of potable water delivered for every one gallon of ground water pumped from under its property.

The ALA may apply this credit to property owned and irrigated by the ALA at the time of ratification ofthis Agreement and to facilities owned by ALA including restrooms, offices, maintenance facilities, and member use facilities.

SB 4S1761 vl:010853.0001 22 AGREEMENT TO INSTALL AND OPERATE GROUNDWATER WELL NO. 8

THIS AGREEMENT ("Agreement>') is made and is effective as of March ~ 2008, by the LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT, a public agency ("District") and the ARROWHEAD LAKE ASSOCIATION, a California Nonprofit Corporation ("Owner"). District and Owner are sometimes collectively refened to herein as the "Parties."

RECITALS

A. The District and Owner are parties to that certain Agreement Regarding Protection of Beneficial Uses of Lake AlTowhead dated November 16, 2007 ("Beneficial Use Agreement") effective December 20, 2007, wherein the Owner granted the District the right to develop additional groundwater wells. The Agreement is incorporated herein by this reference.

B. Pursuant to the Agreement, the Distiict desires to install and operate a groundwater well at the Owner's Grass Valley Park, and it is the purpose of this Agreement to set fo1ih the tenns and conditions by which the District will unde1iake the work.

NOW, THEREFORE, the Paiiies agree as follows:

1. Installation and Operation of District Facilities. At its sole cost and expense, the District shall design, install, construct, operate, maintain ai1d repair WELL NO. 8 and appurtenant facilities ("Dist1ict Facilities") at the locations generally depicted on the Plat Maps marked Exhibit "A" and ''B" (the "Well Area"), which Exhibits are attached hereto and made a pmi hereof. The Distiict Facilities include, but are not limited to, the following:

a. Pipelines, valves and meters for the delivery of groundwater to the District's water distribution system; a11d

b. Subte1Ta11ean instrumentation and electrical power line to power the District's well pump.

2. Ingress and Egress. The Owner hereby grants the Distlict the 1ight of ingress a11d egress to the Well Area as generally depicted in Exhibit "B."

3. Indemnification. District will indemnify and hold Owner, its officers, directors, employees, members and assigns ( collectively "Owner Indemnities") harmless :from all claims, dema11ds, liability and/or expense (including, without limitation, attorney's fees) alising out of or encountered in connection with this Agreement a11d with the prosecution of work under it, whether such claims, demands, liability a11d/or expense m·e caused by District, its employees, contractors or subcontractors employed or engaged related to this Agreement or a11y services or products installed within the Well Area, excepting only such injury or hann as may be caused solely and exclusively by Owner's gross negligence or willful misconduct. Such hold harmless a11d indemnification provision IU1ming to the benefit of Owner Inde1m1ities shall also include, but not be limited to, Distiict's obligation, at District's sole cost and expense, for perfonna11ce of all activities in com1ection with the design, installation, construction, operation, maintenance and repair of the District Facilities ("Well Activities"), and shall inde1m1ify and hold the Owner hannless from and against any and all liability, claims, losses, actions and expenses (including attorney's fees), which may arise out of the performance of the Well Activities, including, without limitation, damages and injmies to personal or real property, whether owned by the Owner or third paities. Well Activities shall include, without limitation, the following tasks:

a. Surface and subsurface surveys;

b. Environmental and regulatory compliai1ce;

c. Well d1illing;

d. Survey, design, enginee1ing and construction ofDist1ict Facilities;

e. Operation and maintenance of the District Facilities; ai1d

f. Groundwater monito1ing ai1d reporting, including scheduled rep01ting to the Owner ai1d appropriate regulatory agencies of the ainounts and quality of groundwater extracted.

The Paiiies intend that the provisions of this paragraph shall survive the te1mination or expiration of this Agreement.

4. Project Scheduling and Constraints.

a. Requirements for Drilling: The District estimates that the drill rig will be placed on the Well Area dming the months of February and Mai·ch 2008 and drilling will be completed by April 2008. The Pa1iies agree to coordinate in good faith in the event that weather or other events necessitate a change in the estimated schedule. As required during drilling, the drilling area will be protected with mesh screening.

b. Requirements for Pipelines and Conduits: The Dist1ict estimates that pipeline and conduit work will be staiied in March 2008 and completed in Ap1il 2008. The Paiiies agree to coordinate in good faith in the event that weather or other events necessitate a chai1ge in the estimated schedule. Excavations shall be filled and/or covered each night. In all respects, pipeline and conduit placement activities shall be subject to the Owner's reasonable requirements and Owner shall not unreasonably interfere with Well Activities.

c. Constraints on Vehicular Use: Motor vehicles ai1d heavy construction and drilling vehicles shall not be used to transport materials or personnel over or across the Owner's prope1iy or to otherwise service the Well Area, other than for initial setup and post-d1illing removal. All transport activities shall be completed daily between 7:00 am and 7:00 pm, unless another time is agreed to by the Paiiies. In all respects, the well-

2 drilling activities shall be subject to the Owner's reasonable requirements and Owner shall not umeasonably interfere with Well Activities.

d. Work Area: Prior to construction and in consultation with the Owner, the Distiict shall cause the work area to be delineated with temporary fencing, flags and tape in a manner that is agreeable to the Owner.

e. Mobilization: The District and its contractors shall conduct all mobilization activities offsite and away from Owner's Grass Valley Park to minimize damage.

f. Duty to Protect Grass Valley Park. The District and its contractors shall take all steps necessary to protect the Grass Valley Park from damage caused by District and constmction vehicles, construction activities, diilling fluids, bo1ing and drilling cuttings, and stonnwater runoff and drainage. All drilling by-products shall be captured in leak-proof containers and lawfully disposed of off-site.

g. Completion of District Facilities: The District estimates that the cons1Tuction and installation of District Facilities shall be complete on or before May 1, 2008. The Parties agree to coordinate in good faith in the event that weather or other events necessitate a change in tl1e estimated schedule.

5. Restoration of the Owner's Property. The Dist1ict hereby agrees to promptly repair, replace and restore the Owner's real and personal prope1iy, whenever such prope1iy is damaged or otherwise disturbed by·District, to substantially the san1e condition it was in p1ior to such damage or disturbance, at the Distiict's sole cost and expense.

6. Termination. Unless sooner tenninated by mutual agreement of the Parties, this Agreement shall expire without fmiher notice upon the date the Beneficial Use Agreement te1111inates.

7. Amendment. This Agreement may be amended if in writing a11d executed by duly autho1ized representatives or both Pa1iies.

8. Attorneys' Fees. In the event that a11y action, suit or other proceeding is instituted to remedy, prevent or obtain relief from a breach of this Agreement, or aiising out of a breach of this Agreement, the prevailing party shall recover all of such party's attorneys' fees incU1red in each and every such action, suit or other proceeding, including any and all appeals or petitions. As used in this Agreement, attorneys' fees shall be deemed to mea11 the full and actual cost of a11y legal services actually perfonned in connection with the matters involved, calculated on the basis of the usual fees charged by the attorneys perfonning such services ai1d shall not be limited to "reasonable attorneys' fees" as defined in a11y statute or rule of coUlt.

3 IN WITNESS WHEREOF, the Paiiies have executed this Agreement to be effective on the date first above written.

"DISTRICT" LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT

Dated: ------

"OWNER" ARROWHEAD LAKE ASSOCIATION, a California Nonprofit Corporation

By ______Dated: ------President

By ______Secretary

4 EXHIBIT "A" LACSD GROUND WATER WELL #8

LEGEND

+ EXISTING WELL

PROPOSED WELL

WATER LINE

ANNANDALE TANK LL #6

~ WELL #2 ~WELL#3 ~( + ~ Lo.ke Ar-r-owheo.d

CoMMunlty Services District EXHIBIT "B" LACSD GROUND WATER WELL #8

ALA GRASS VALLEY LAKE PARK

WELL# 8

RES AL Q

\ \ '~ '\

GRASS VALLEY LAKE

Lo.ke Arrowheo.d

CoMMunlt y Services District REDUCED FEE RENTAL AGREEMENT weekdays & off season THE CLUBHOUSE AT BURNT MILL BEACH CLUB 27910 Lakes Edge Rd, Lake Arrowhead, CA 92352

PLEASE COMPLETE THE FOl,.LOilNG: Nature of event: Elecirf(),a TY{)JIJI og Non-profit Tax ID Number ~ S- 3 Z 7 l 920 Does your organization collect dues, charge for membership or assess your members? YES_ NOX Will you charge for anything at this event? YES_ NOX If so, what? ______Is the event open to the public? YES_ NO.2i_ Expected Attendance ___...S._.0...____~-- Will you be serving or allowing food and drink? YES...2( NO_ If yes, please detail uwfe ( and ,s:naclc

THE UNDERSIGNED AGREES TO: • Provide ALA with $1,000,000 liability insurance 30 days prior to the event. Policy must cove rental of the premises naming ALA as Additional Insured with no exclusions for the event. Insurance must include Social Host Liquor Liability coverage if alcohol will be served or sold. ~ 1n1ua1 • Provide ALA with a copy of your ABC permit if selling alcohol. (~ ) Initial • Save, defend and hold harmless and indemnify ALA against any and all damage and harm to persons and properties suffered by or asserted against ALA as well as any and all damages, injury, claims, demand costs, attorney fees, expenses, liens, actions and causes of action of every kind, nature and description whether known or unknown, suspected or unsuspected, for damage and harm to any and all p~r~o~ s )r property in any way caused by or arising directly out of the use by the undersigned of the rented premises. 1 initial • Clean, fold and stack all tables and chairs prior to taking leave of the premises. The key must be returned to ALA by the next day of business following your reservation . All trash and debris must be removed from the premises. ~ )initial

THE UNDERSIGNED ACKNOWLEDGES THAT: • A deposit of $500 is required . If approved, the total fee for rental will be $150, plus a $500 security deposil.~ rnmsJ • The deposit of $500 will be forfeited in the event of cancellation. ~ intuat • Receipt of $500 deposit, completed rental paperwork and proper Event Insurance will reserve your date. • Damages and /or cleanup will be deducted from the deposit. Damages and/or clean up exceeding the deposit will be the responsibility of the undersigned Renter and the requesting organizatioE]'f applicable). Additionally, excessive clean up and/or damages may result in suspension of future rental privileges. • ) 1niuai • ALA is not responsible for snow removal on road, parking lot or facility. iniuai • I have read the rules and other conditions for re(~~on )the reverse and understand that failure to comply may result in a loss of deposit and/or future rental privileges. ~ initial ALA Member Name (print) {Jf/4enlll {;em' Position in Organization (if applicable) 6111 Ph~~e # 909-33/o:jf()~~ Cell Phone #---,---~-=--#-----...-----t--+---- Ma1hng Address l!.a./!,t;.x_"J.l)0 Email ccerc, @ti &ocOJuJ)iaadc td, GJfV/ Arrowhead Woods Property Addr~ • Signature of ALA Member ~ d Date cJ. / ii:k/;20 uf

APPROVED BY Signature of ALA Representative Date

Membership verified ______Key released to______Returned.___ Insurance received ______Deposit Refunded or notice sent _____ Deposit Received ______Eligible for future rentals? Yes / No Balance Paid______Notes:

P.O. Box 1119, Lake Arrowhead, CA 92352 909.337.2595 www.ala-ca.org Revised: Jan 2018 REDUCED FEE RENTAL AGREEMENT BURNT MILL BEACH CLUB Non-Profit Fee Waiver 27910 Lakes Edge Rd, Lake Arrowhead, CA 92352

On behalf of TIAC 8 D , I am requesting the use of BURNT MILL BEACH CLUB for June 12 , 2012 (date}, between the hours of 12 : 00 to10 : 00 P: J!!or this non-profit organization, I further request a reduction/waiver in the standard rental fee.

PLEASE COMPLETE THE FOLLOWING: Nature of event: LACSD Regular Board Meeting Non-profit Tax ID Number_9s_-_3_2_1_1_9_2_0______Does your organization collect dues, charge for membership or assess your members? YES_ NO~ Will you charge for anything at this event? YES_ NO~ If so, what? ______Is the event open to the public? YES~ NO_ Expected Attendance 50 - i oo Will you be serving or allowing food and drink? YES_ NO ~ If yes, please detail______

THE UNDERSIGNED AGREES TO: • Provide ALA with $1,000,000 liability insurance covering rental of the premises naming ALA as Additional Insured with no exrJ1:on~ for this event. Insurance must include Social Host Liquor Liability coverage if alcohol will be served or sold. , initial • Provide ALA with a copy of your ABC permit if selling alcohol. (_) initial • Clean, fold and stack all tables and chairs prior to taking leave of the premises. The key must be returned to ALA by the next day of business following your reservation. All trash and debris must be removed from the premises. ~initial • Save, defend and hold harmless and indemnify ALA against any and all damage and harm to persons and properties suffered by or asserted against ALA as well as any and all damages, injury, claims, demand costs, attorney fees, expenses, liens, actions and causes of action of every kind, nature and description whether known or unknown, suspected or unsuspected, for damage and harm to any and all persons or property in any way caused by or arising directly out of the use by the undersigned of the rented premises.

THE UNDERSIGNED ACKNOWLEDGES THAT: • A deposit of $50 is required. If approved, the total fee for rental will be $150, plus a $250 security deposit. (_) initial • The deposit of $50 will be forfeited in the event of cancellation. (_) initial • Receipt of $50.00 deposit and completed rental paperwork will reserve your date . • Damages and /or cleanup will be deducted from the deposit. Damages and/or clean up exceeding the deposit will be the responsibility of the undersigned Renter and the requesting organization (if applicable). Additionally, excessive clean up and/or damages may result in suspension of future rental privileges. ~ initial • ALA is not responsible for snow removal on road, parking lot or facility. (;JJt_J initial • I have read the rules and other conditions for rental on the reverse and understand that failure to comply may result in a loss of deposit and/or future rental privileges. (__J initial

APPROVED BY Signature of ALA Representative Date

Membership verified ______Key released to______Returned___ Insurance received______Deposit Refunded or notice sent ____ _ Deposit Received ______Eligible for future rentals? Yes / No Balance Paid______Notes:

P.O. Box 1119, Lake Arrowhead, CA 92352 909.337.2595 www.ala-ca.org RULES AND RE

RENTAL DETAILS ...::ib.__ (initials) 1. Rental Hours: 8:00 AM-11 :00 PM. Prem 1 and cleaned completely by 11:00 PM. 2. Access to Facility: Rental is for date(s) ofreservation ONLY. No early entry for set up or "day after" cleanup. Special rates may be available for "day before" set up or "day after" clean up rental. Contact our rental coordinator. 3. Rental Fee: Weekend: $750/day (Friday, Saturday, Sunday); Weekday: $450/day (Monday through Thursday). 4. Renter Must Be a Member in Good Standing: All outstanding fees paid and have at least a General Membership. 5. Reservation: A reservation is secured only after $250 deposit is paid, liability insurance is received and all contract/agreements are signed and turned in. 6. Reservation May Be Cancelled: If full payment AND event insurance are not received 30 days prior to the event. 7. Event Insurance: $1,000,000 liability under the Renter's (Member's) name with the ALA named as the "Additional Insured" (with no exclusions) as follows: Arrowhead Lake Association, PO Box 1119, Lake Arrowhead, CA 92352. Insurance must include Social Host Liquor Liability coverage if alcohol will be served or sold.

SECURITY DEPOSIT ___ (initials) 1. $250.00: Cash or credit card. 2. Loss of Deposit: Examples of actions which will result in fees being subtracted from your security deposit (including but not limited to): Security alarm set off, trash left at the facility, the facility being left in disarray, not putting the tables and chairs back in their proper order and location, lost keys, use oftacks, staples, or other damage/marks to painted surfaces or floors, etc. Damages or misuse resulting in fees exceeding the $250 will be the responsibility of the renter and/or organization and collection of same will be pursued by ALA. • Any bags of trash left on site will be charged $10 per bag plus labor for clean up of scattered debris due to animals, weather, etc. Trash left at the Lakeside dumpsters will result in a complete forfeiture of security deposit. • $40 will be charged if tables an chairs are NOT put back into the storage closet in the same location and ord~ which they are fou ACCESS (lni1ia ls) l. Keys: You may pick up the key for the building the bus.iness day before your event. It must be returned to the ALA office on the first day of business after your event has taken place. • Failure to return the key will result in complete forfeiture of the $250 security deposit. 2. Security Alarm: Proper instructions for turning off and turning on the alarm system at the Burnt Mill Beach Club will be given when the key is picked up. Arrowhead Patrol can be reached at (909) 337-2023 ifproblems with the security system arise. Failure to properly turn off or turn on the system will consequently result in Arrowhead Patrol sending an employee out and charging a s1 · ely $15 to the ALA, which will be deducted from your secu~eposit for reimburse,

FACILITY (initials) 1. No Exclusive Use of the Beach: Arrowhead Lake Association members can use outside bathroom access, beach, etc. Only exclusive use ofthe building and its amenities is covered by the reservation. 2. No BBQ's Permitted. 3. Maximum Occupancy: 132 seated; 200 assembled (chairs only) 4. Decorating: Use tape ONLY. No double stick foam tape, tacks, pushpins, nails, staples, etc. on the walls or railings. Cork strips have been provided for you in various places; you must supply your own pins and/or tacks for use on the strips. Do not use abrasive substances that will scratch hardwood floors. No cat litter, sand, rocks, glitter, etc. 5. ALA is not Responsible: For ANY item left at the Burnt Mill Beach Club. 6. Noise: Any noise should be kept at a courteous level so as not to disturb surrounding residents. • No amplified music or public address system is permitted prior to 9 AM or after 10 PM due to the proximity of surrounding homes.

ANY FAILURE TO ABIDE BY RULES RELATED TO HOURS OF USAGE OR NOISE ,MAX RESULT IN COMPLETE FORFEITURE OF SECURITY DEPOSIT AND A BAN FROM FUTURE FACILITY USE. The unde · ledges that h s read the rules other conditions for rental above and understands that failure to comply ss of dep spension of future rental privileges.

Date 2 &2lffrI ► Revision 2/15/11 .,. .j " -~ = ,·4 ... 31-Jan-2012 ~EijmiF.lt~frrEP'QFi~OVE~t;E -· = ------~ ~ 'I PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF EVIDENCE ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT Alliant Insurance Services, Inc. AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE 100 Pine Street AFFORDED BY THE MEMORANDUM($) OF COVERAGE (MOC) BELOW. 11th Floor San Francisco, CA 94111 (415) 403-1400 THIS CERTIFICATE OF COVERAGE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER, AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. INSURED Lake Arrowhead Community Services District Member of CSRMA P.O. Box 700 Lake Arrowhead, CA 92352-0000 389

MEMORANDUM OF COVERAGE NUMBER PROGRAM AFFORDING COVERAGE CSL LACSD 11121 California Sanitation Risk Management Authority (C.S.R.M.A.)

COv'.ER.A'GES • -~-~ .'-"·-=- THIS IS TO CERTIFY THAT THE COVERAGE IS AFFORDED TO THE ABOVE NAMED MEMBER, AS PROVIDED BY THE MEMORANDUM(S) OF COVERAGE,- FOR THE COVERAGE PERIOD SHOWN BELOW, NOTHWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE COVERAGE AFFORDED BY THE PROGRAM DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDITIONS OF SUCH MEMORANDUM(S) OF COVERAGE. THE FOLLOWING COVERAGE IS IN EFFECT:

PUBLIC ENTITY LIABILITY IS DEFINED IN THE MEMORANDUM(S) OF COVERAGE ON FILE WITH THE ENTITY, AND COPIES ARE AVAILABLE ON REQUEST.

Type Of Coverage: EffectiveDate Expiration Date S.I.R. Deductible Llablllty Limit Per Public Entity Llabilltv lncludlmi: I I I I Occurrence ll"lAnor~I I l~h!Hh, ·- General Liability 31-Dec-2011 31-Dec-2012 - $50.000 I $1,000,000 Products/Completed Operations Contractu.aJ Uabilitv I I I

!Autwn.QhilA I l~hlllfv ·- Owned Automobiles 31-Dec-2011 31-Dec-201 2 $50.000 I $1,000,000 Non-Owned Automobiles Hired and Non-Own ed Auto I I I

DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLES/EXCLUSIONS ADDED BY ENDORSEMENTS/SPECIAL PROVISIONS THE HOLDER IS NAMED AS AN ADDITIONAL COVERED PARTY PER THE MEMORANDUM OF COVERAGE WITH RESPECTS TO THE RENTAL OF PREMISES AT THE BURNT MILL BEACH CLUB ON MONDAY, SEPTEMBER 17, 2012. FOR THE 2012 LACSD HOLIDAY DINNER AND EMPLOYEE RECOGNITION NIGHT.

CERTIFICAfliE ~ ,.,;;_ ~-- 1~ANCEULA Tl0N'' HOl::!IDER<.. -- - ·'.::"' . -· -- ---~ - ~ SHOULD ANY OF THE ABOVE DESCRBED MEMORANDUM(,) OF COVERAGE BE 17278 • 441 CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WLL BE DELIVERED IN Arrowhead Lake Association ACCORDANCE V'\1 TH THE MEMORANDUM(S)OF COVERAGE FROVISIONS. Burnt Mill Beach Club 2791 oLakes Edge Road Lake Arrowhead, CA 92352 AUTHORIZED REPRESENTATIVE -~~ CALIFORNIA SANITATION RISK MANAGEMENT AUTHORITY

ADDITIONAL COVERED PARTY ENDORSEMENT

This Endorsement forms a part of the Memorandum Of Coverage issued by the CALIFORNIA SANITATION RISK MANAGEMENT AUTHORITY.

ADDITIONAL COVERED PARTY: Burnt Mill Beach Club

CSRMA MEMBER ENTITY: Lake Arrowhead Community Services District

DESCRIPTION OF ACTIVITY: Rental of the Premises

DATE(S) OF ACTIVITY: September 17, 2012

LOCATION OF ACTIVITY: Burnt Mill Beach

MAXIMUM COVERAGE LIMIT: $1,000,000

DEDUCTIBLE: $50,000

The person or organization first named above is added as an ADDITIONAL COVERED PARTY pursuant to Section III(A), "Definitions" and Section VII, "Covered Parties." Coverage is provided through participation in a risk sharing joint powers authority, for general and automobile liability as defined in the Memorandum ofCoverage.

The coverage being provided by this Endorsement is limited to "occurrences" arising out of the activity or location described, and the time period indicated herein, and is subject to all the terms, conditions and exclusions of the Memorandum of Coverage. Pursuant to Section III (A), the person or entity named above is only an Additional Covered Party with respect to operations performed by or on behalf of the CSRMA MEMBER ENTITY, or facilities owned or used by the CSRMA MEMBER ENTITY.

Coverage is in effect for the DA TE(S) OF ACTIVITY indicated above and will not be cancelled or allowed to expire at a date other than the last date indicated except upon 30 days' written notice to the Additional Covered Party. RULES AND REGULATIONS - The Clubhouse at Burnt Mill Beach Club Reduced Fee

RENTAL DETAILS ~ ) (initials) 1. Rental Hours: 8:00 AM -11 :00 PM. Premises MUST be vacated and cleaned completely by 11 :00 PM . 2. Access to Facility: Rental is for date(s) of reservation ONLY. No early entry for set up or "day after" cleanup. Special rates may be available for "day before" set up or "day after'' clean up rental. Contact our rental coordinator. 3. Rental Fee: May-Oct.: $2,500/day (Fri., Sat., Sun .); $150/day (Monday through Thursday). Nov.-Apr.: $150/day 4. Renter Must Be a Member in Good Standing: All outstanding fees paid and have at least a General Membership. 5. Reservation: A reservation is secured after 50% of the non-refundable rental fee is paid and all contract/agreements are signed and turned in. 6. Reservation May Be Cancelled: If full payment AND event insurance are not received 30 days prior to the event. 7. Event Insurance: $1,000,000 liability under the Renter's (Member's) name with the ALA named as the "Additional Insured" (with no exclusions) as follows : Arrowhead Lake Association, PO Box 1119, Lake Arrowhead, CA 92352. Insurance must include Social Host Liquor Liability coverag e if alcohol will be served or sold.

CLEANING DEPOSIT ~ (initials) 1. $500.00: Cash or credit card payable at the time of reservation. 2. Loss of Deposit: Examples of actions which will result in fees being subtracted from your security deposit (including but not limited to) : Security alarm set off, trash left at the facility, the facility being left in disarray, not putting the tables and chairs back in their proper order and location, lost keys, use of tacks , staples, or other damage/marks to painted surfaces or floors, etc. Damages or misuse resulting in fees exceeding the $500 will be the responsibility of the renter and/or organization and collection of same will be pursued by ALA. • Any bags of trash left on site will be charged $10 per bag plus labor for clean-up of scattered debris due to animals, weather, etc. Trash left at the Lakeside dumpsters will result in a complete forfeiture of security deposit. • $40 will be charged if tables and chairs are NOT put back into the storage closet in the same location and order in which they are found.

ACCESS ~ (initials) 1. Keys : You may pick up the key for the building the business day before your event. It must be returned to the ALA office on the first day of business after your event has taken place. • Failure to return the key will result in complete forfeiture of the $500 security deposit. 2. Security Alarm: Proper instructions for turning off and turning on the alarm system at the Burnt Mill Beach Club will be given when the key is picked up. Arrowhead Patrol can be reached at (909) 337-2023 if problems with the security system arise. Failure to properly turn off or turn on the system will consequently result in Arrowhead Patrol sending an employee out and charging asmall fee of approximately $15 to the ALA, which will be deducted from your security deposit for reimbursement.

FACILITY ~~ J (initials) 1. NO U~ Beach: Arrowhead Lake Association members can use outside bathroom access, beach, etc. Only exclusive use of the building and its amenities is covered by the reservation. 2. No BBQ's Permitted without expressed written consent from ALA. 3. Maximum Occupancy: 132 seated; 200 assembled (chairs only) 4. Decorating: Use tape ONLY. No double stick foam tape , tacks, pushpins, nails, staples, etc. on the walls or railings. Cork strips have been provided for you in various places; you must supply your own pins and/or tacks for use on the strips. Do not use abrasive substances that will scratch hardwood floors. No cat litter, sand, rocks, glitter, etc. 5. ALA is not Responsible: For ANY item left at the Burnt Mill Beach Club. 6. Noise: Any noise should be kept at a courteous level so as not to disturb surrounding residents. • No amplified music or public address system is permitted prior to 9 AM or after 10 PM due to the proximity of surrounding homes.

ANY FAILURE TO ABIDE BY RULES RELATED TO HOURS OF USAGE OR NOISE MAY RESULT IN COMPLETE FORFEITURE OF SECURITY DEPOSIT AND A BAN FROM FUTURE FACILITY USE.

The undersigned acknowledges that he/she has read the rules and other conditions for rental above and understands that failure to comply may result in loss ~ osit, colle_ction action and/or suspension of future rental privileges.

Signature _ ~---4'-oe-\'"-"'.....i..:,,-....J..C=------

Revision January 201 8 SETTLEMENT AND MUTUAL RELEASE AGREEMENT

This Settlement and Mutual Release Agreement ("Agreement"), dated December _2__~ 2015, for reference purposes only, is entered into by and between the Lake Arrowhead Community Services District ("LACSD") and the Arrowhead Lake Association ("ALA"). LACSD and ALA are collectively referred to herein as the "Parties" or the "Settling Parties", and may be individually referred to as a "Party".

RECITALS

This Agreement is made with reference to the following facts:

1. LACSD and ALA entered in an agreement dated November 16, 2007 entitled Agreement Regarding Protection of Beneficial Uses of Lake Arrowhead ("Existing Agreement").

2. The Existing Agreement contains certain terms and conditions by which LACSD and ALA interact regarding the management and operation of Lake Arrowhead, including cost sharing projects in connection with certain watershed management activities.

3. The Existing Agreement requires the Parties to develop a watershed management budget each fiscal year for potential cost sharing of certain watershed management activities specifically identified in the Existing Agreement, as well as maximum budget amounts for each category of watershed management activity.

4. Pursuant to the Existing Agreement, the annual watershed management annual budget must be approved by the Board of Directors of ALA and LACSD.

5. The Parties have a difference of opinion regarding the amount of cost sharing obligations required by the Existing Agreement for fiscal years 2012-2013 and 2013-2014 ("Dispute").

6. The Parties now desire to fully and finally settle and resolve any and all rights, claims, disputes, causes of action and alleged claims which currently exist, or may exist in favor of the Parties, except as specifically set forth in this agreement, including, but not limited to, all claims arising out of or in any way connected to the Dispute.

7. This Agreement is intended only as a clarification of certain terms within the Existing Agreement, it is not intended to change the terms or the meaning of the terms of the Existing Agreement.

-1- SETTLEMENT AGREEMENT

The Parties, and each of them, agree as follows:

1. Recitals. The Recitals are incorporated into and are a part ofthis Agreement.

2. Effectiveness. The effectiveness of this Agreement shall be the date upon which the last of the Parties executes this Agreement ("Effective Date").

3. Settlement Terms. In consideration of this Agreement, and the mutual promises set forth herein, the Parties agree to undertake the following obligations:

(a) Settlement Payment. LACSD shall pay to ALA the amount of one hundred thousand dollars ($100,000) within thirty (30) days of the Effective Date ('Settlement Payment").

(b) Mutual Waiver of Fees and Costs. The parties do hereby mutually waive any and all existing claims for attorney's fees and court costs against the other arising out of or relating to the Dispute, except to the extent as may be incurred to enforce the provisions of this Agreement should enforcement become necessary.

4. Additional Settlement Terms. In consideration of this Agreement, and the mutual promises set forth herein, the Parties further agree to the following:

(a) Board Approval Required for Cost Share.

(i) In accordance with the terms in Section 15 of the Existing Agreement, the Parties confirm that beginning in fiscal year 2015-2016, and for every year thereafter during the term of the Existing Agreement, neither Party has any legal obligation to make any cost sharing payments for any watershed management activities pursuant to the Existing Agreement unless the Boards of Directors of LACSD and ALA first have taken action to approve the Budget and such watershed management activities or activity are included in the approved Budget. The term Budget has the same meaning as defined in Section 13 of the Existing Agreement.

-2- (ii) The LACSD and ALA Boards of Directors have until March 1, 2016 to approve a Budget, if any, for the 2015-2016 fiscal year.

(iii) For Budgets for Fiscal Years 2016-2017 and beyond, if a proposed Budget has been submitted by one Party to the other prior to February 1 before the commencement of each Fiscal Year and the other fails to take action on such proposed Budget by October 1 of such Fiscal Year, then such Budget shall be deemed approved by the Party that has not taken action. Notwithstanding the previous sentence, if a proposed Budget is not submitted by February 1 of each year, as contemplated by Section 13 of the Existing Agreement, the October 1 date shall be extended by the amount oftime between February 1 and the date it is submitted.

(iv) The LACSD and ALA Board of Directors may at any time amend the Budget to include additional or remove existing watershed management activities upon the mutual agreement ofthe Parties.

(v) Ifthe Parties fail to agree upon and approve a jointly created Budget or upon certain watershed management activities, then the Parties will work in good faith to resolve the dispute and approve a joint Budget. Ifafter such good faith efforts no agreement on a Budget can be reached, the Parties will engage a third party neutral mediator to facilitate an agreement.

(vi) The Parties shall have no obligation to pay the other Party for any cost sharing watershed management activity otherwise subject to cost share unless the Party requesting payment first provides the other Party with actual evidence and detail regarding the costs incurred, including any and all receipts for work performed and other evidence to demonstrate actual costs.

(b) Compliance with Laws.

(i) To the extent that ALA receives funds from LACSD for cost sharing watershed management activities pursuant to this Agreement and/or the Existing Agreement, ALA agrees to and warrants that it will comply with all applicable laws regarding the use of public funds for such project work. Such laws include,

-3- but are not limited to, compliance with prevailing wage and public bidding requirements for the use ofpublic funds.

(ii) If ALA fails to comply with applicable existing laws regarding the use of LACSD public funds for watershed management activity projects, ALA shall immediately return such funds to LACSD and shall indemnify, defend and hold harmless LACSD and its Directors, employees, agents, contractors, consultants and attorneys from any and all claims, demands, lawsuits, charges, complaints, liabilities, indemnities, actions, costs, debts, expenses, liens, losses, injuries, and damages of any kind or character to any person or property arising from, caused by, or relating to ALA's violation of any such laws in connection with the use of LACSD funds on cost sharing watershed management activities.

5. Mutual Release. In further consideration of this Agreement and in recognition of the benefits to be derived therefrom, except as to the rights, duties, and obligations of the Parties as set forth in this Agreement, the Parties hereby release, and fully and finally and forever discharge each other, and any and all related, affiliated and/or parent companies, and each of their managers, members, owners, officers, predecessors, successors, heirs, executors, administrators, assigns, agents, employees, representatives, lawyers, and all persons acting by, through, under, or in concert with them or any of them (hereinafter collectively called "Additional Releases") of and from any and all manner of actions or causes of action, in law or in equity, suits, debts, liens, liabilities, claims, demands, and damages of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called "Claims"), arising out of, or which could have been raised in, based upon, or related to the Dispute.

6. Waiver of Civil Code Section 1542. It is the intention of the Parties that the releases entered into as part of this Agreement shall be effective as a bar to all actions, causes of action, obligations, costs, expenses, attorney's fees, damages, losses, claims, liabilities and demands of any character, nature and kind, known or unknown, suspected or unsuspected, to be so barred; in furtherance of which intention the parties expressly waive any and all right and benefit conferred upon them by the provisions of Section 1542 of the California Civil Code, which reads as follows:

-4- A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

7. Each Party to Bear Own Costs and Fees. Each party to this Agreement shall bear its own attorney's fees and other costs that are in any way related to the Dispute, including the preparation, negotiation, and drafting ofthis Agreement.

8. Denial of Liability. The Parties agree and mutually acknowledge that this Agreement is for settlement purposes only. Neither this Agreement nor any action taken pursuant to this Agreement shall constitute any admission of any wrongdoing, fault, violation of law, or liability of any kind on the part of the Parties, or any admission by and of the Parties of any claim or allegations made in any action against such party. This Agreement is entered into, in substantial part, to avoid the fees and expenses of potential litigation of the Dispute.

9. No Assignment of Claim. The Parties hereby represent, warrant and agree that they will not and have not committed or permitted or agreed to any sale, encumbrance, hypothecation or transfer, whether by operation of law or otherwise, of any claim, right or cause of action to be released or discharged or which otherwise would have been affected pursuant to the provisions ofthis Agreement.

10. Integrated Agreement. This Agreement is the final and entire agreement between the Parties concerning the Dispute and supersedes all prior written and oral agreements and understandings of the Parties regarding the Dispute. This Agreement cannot be modified except by a written document signed by the Parties. None of the Parties are relying upon any other negotiations, discussions or agreements in connection with the resolution of the Dispute pursuant to this Agreement. This is a fully integrated agreement.

11. Warranty of Authorization. Any person executing this Agreement on behalf of any Party does hereby personally represent and warrant to the other Party that he/she/it has the authority to execute this Agreement on behalf of, and to fully bind, such Party.

-5- 12. Independent Representation by Counsel. The Parties represent and declare that in executing this Agreement they rely solely upon their own judgment, belief and knowledge, and the advice and recommendations of their own independently-selected counsel, concerning the nature, extent and duration of their rights and claims hereunder, and that, except as provided herein, they have not been influenced to any extent whatsoever in executing this Agreement, by any representations, statements or omission pertaining to any of the matters herein contained by any party or by any persons representing any party.

13. Governing Law. This Agreement shall in all respects be interpreted, enforced and governed by and under the laws of the State of California applicable to instruments, persons and transactions having legal contacts and relations solely within the State of California.

14. Construction. This Agreement has been jointly negotiated and drafted. The language of this Agreement shall be construed as a whole according to its fair meaning, and not strictly for or against any of the parties.

15. Headings. The headings of this Agreement are for convenience and ease of reference only and shall not be used to construe, interpret, expand, or limit the terms of this Agreement.

16. Execution in Counterparts. This Agreement may be executed in counterparts by the Parties and shall become effective and binding upon the Parties at such time as all of the signatories hereto have signed the original or a counterpart original of this Agreement. All counterparts so executed shall constitute one Agreement, binding upon all of the Parties hereto, notwithstanding that all of the Parties are not signatory to the original or the same counterpart.

17. Attorney's Fees. Should any Party hereto reasonably retain counsel for the purpose of enforcing or preventing the breach of any provision of this Agreement as set forth in the Agreement, including but not limited to, instituting or defending any action or proceeding to enforce any provision of this Agreement, for damages by reason of any alleged breach or any provision hereof, for declaration of such Parties' rights or obligations hereunder or for any other judicial remedy, then, if said matter is settled by arbitration or judicial determination, the prevailing party shall be entitled to be reimbursed by the losing party for all costs and expenses incurred thereby, including, but not limited to, reasonable attorneys', paralegals', experts' and accountants' fees.

-6- 18. Severability. If any portion ofthis Agreement is declared by a court of competent jurisdiction to be invalid, illegal, unconstitutional or unenforceable, such portion shall be deemed severed from this Agreement and the remaining parts shall remain in full force and effect as if no invalid or unenforceable provisions had been part ofthis Agreement.

19. Survivability of Covenants. All representations and agreements set forth in this Agreement shall be deemed continuing and shall survive the execution date of this Agreement.

20. Covenant to Take Further Actions Necessary. The Parties hereby agree to execute such other documents and to take such other action as may be reasonably necessary to further the purpose of this Agreement, with the parties to bear their own costs and attorney's fees for these additional actions.

21. No Third-Party Beneficiaries. Except for the rights of beneficiaries pursuant to the releases provided, there are no third-party beneficiaries to this Agreement and nothing herein shall confer any enforceable rights on non-signatory persons or entities.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

EXECUTION BY ALA

Dated: December i ~ 2015 Arrowhead Lake Association

By: _j----+------"· \ -'------"~=----=-=-=-----=- ·=3_- - T \ EXECUTION BY DISTRICT

Dated: December J5': 2015 Lake Arrowhead Community Services District

B~ --- General Manager

-7- Agreement No . ST 71 00

MEMORANDUM OF UNDERSTANDING BETWEEN THE LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT AND THE ARROWHEAD LAKE ASSOCIATION AND THE BUREAU OF RECLAMATION FOR THE

S&T 7100 EVALUATION OF APPROACHES TO DETERMINE MIXING AND ASSIMILATION OF REUSE EFFLUENT PROJECT

THIS MEMORANDUM OF UNDERSTANDING (MOU) for the S&T 7100 Evaluation of Approaches to Detennine Mixing and A imilation of Reuse Effluent 0 Project (Pr ~ect) is made and entered into thi 2"' day of :»,,-.~;f ,20 19, by the Lal e Arrov head ommunity ervices Di trict hereinafter refe1T~to a.. District and The Arrowhead Lake Association, hereinafter referred to as "Association" and The United States Department of the Interior, Bureau of Reclamation, hereinafter referred to as "Reclamation", and collectively referred to as "Partners".

1. PURPOSE AND BENEFIT

The Partners agree to work collaboratively to perform the S&T 7100 Evaluation of Approaches to Determine Mixing and Assimilation of Reuse Effluent project. The purpose of this study is to investigate the best modeling approach to simulate mixing and assimilation of reuse effluent, given a wide range of site specific reservoir conditions and a wide range of available modeling approaches. Reclamation will work with the University ofNevada, Las Vegas (UNLV) to complete research required for this project, which includes data collection from Lake Arrowhead.

This research benefits the public at large as it will propose further research to enhance the understanding at all levels of government ofhow recycled water can be integrated into existing potable water supplies. This research seeks to optimize water supply by proposing modeling of recycled water in existing reservoirs.

The California State Water Quality Control Board has recently developed regulations on Surface Water Augmentation, so some agencies may be interested in developing models to predict how contaminants will move through reservoirs and how they can estimate residence time. They will need models to show how the discharges will be diluted in the reservoirs.

Results from the research at Lake Arrowhead will be used to develop a manual to guide agencies in hydrodynamic modeling and mixing for reservoirs where re-use effluent is Agreeme nt No . ST7 1 00

being considered, which will help gain further understanding of reuse effluent concentration at existing or proposed potable water intakes. This project is anticipated to address the following question as it relates to other reservoirs for which mixing of reuse effluent is being considered:

In the event that reuse water will be discharged into a reservoir to help meet water supply needs, what is the most appropriate and verifiable modeling approach that can be used to determine environmental impacts and ultimately to set a limit, if any, on the amount of reuse water that could be discharged to the reservoir?

2. BACKGROUND

Lake Arrowhead Dam and reservoir were originally conceived as a project to supply irrigation water to the lowlands of the San Bernardino Valley. In 1891, the Arrowhead Reservoir Company was formed and commenced construction of the Little Bear Dam at the east end of Little Bear Valley, approximately 80 miles east of Los Angeles. The Arrowhead Reservoir and Power Company took over in 1905 with the goal of generating hydropower from the project. This company completed construction of the 200-foot­ high, 720-foot-long semi-hydraulic earth fill dam in 1921 and filled to capacity in 1923 creating the original Lake Arrowhead reservoir.

The Lake Arrowhead Community Services District (District) was created under the State of California's Community Services District Law in 1978 for the purpose of purchasing the privately-owned water system serving the Arrowhead community. The District expanded several times between 1978 and 1983 resulting in an expanded District boundary as it exists today.

Lake Arrowhead is owned and operated by the Arrowhead Lake Association (Association), a community corporation organized on July 2, 1974, for the specific purpose of providing nonprofit recreational facilities and activities on and around Lake Arrowhead, exclusively for the use and enjoyment of roughly 10,000 owners of residential property in Arrowhead Woods. The Association maintains relationships with Lake Arrowhead Community Services District, The State of California, San Bernardino County and other local business establishments.

3. AUTHORITY

This agreement is intended to facilitate cooperative efforts for research conducted by Reclamation and UNL V on Lake Arrowhead as part of the S&T 7100 Evaluation of Approaches to Determine Mixing and Assimilation of Reuse Effluent project. Reclamation's authorities to enter into this agreement are as follows:

SEC. 9509. Research Agreement Authority.

2 Agreement No . ST7100

The Secretary may enter into contracts, grants, or cooperative agreements, for periods not to exceed 5 years, to carry out research within the Bureau of Reclamation.

4. RESPONSIBILITIES

All work to be performed under this MOU shall be identified in the Statement of Work (Attachment A) agreed to by all parties. The SOW includes the description of tasks to be performed, responsibilities of the parties, a cost estimate, and a schedule.

Each party shall be solely liable for the negligent acts of its own employees. Reclamation is not held liable for the acts of contractors under its sovereign immunity. This would be the same for Financial Assistance.

5. TERMS OF AGREEMENT

This MOU shall remain in full force and effect for a period commencing upon the date of the last signature of the party hereto and extending to, but not exceeding September 30, 2020. This MOU may be modified, in writing, by mutual agreement of the parties. This MOU may be terminated for cause, by any party, 60-days from written notification by the party requesting termination.

6. IT IS MUTUALLY AGREED AND UNDERSTOOD BY AND BETWEEN THE PARTIES THAT:

6.1 This MOU is neither a fiscal nor a funds obligation document. Any endeavor involving reimbursement or contribution of funds between or among the parties to this MOU will be handled in accordance with applicable laws, regulations, and procedures including those for Government procurement and printing. Such endeavors, if any, will be outlined in separate agreements that shall be made in writing by representatives of the parties and shall be independently authorized by appropriate statutory authority. This MOU does not provide such authority, and specifically, this MOU does not establish authority for a noncompetitive award to the parties of any contract or other agreement.

6.2 Nothing in this MOU shall obligate the parties or the United States to any current or future expenditure of resources in the absence or in advance of the availability of appropriations from Congress.

6.3 This MOU in no way restricts the parties from participating in similar activities or arrangements with other public or private agencies, organizations, or individuals.

6.4 No member of, or Delegate to, Congress shall be admitted to any share or part of this MOU, or any benefits that may arise wherefrom; but this provision shall not be construed to extend to the MOU if made with a corporation for its general benefit.

3 Agreement No. ST7100

6.5 This MOU in no way grants the parties or any of its members any preferential treatment, exclusive use rights, or other privileges at or on Reclamation facilities, its lands or waters, over and/or above those which are accorded the general public.

6.6 The parties hereto agree to meet as necessary, to discuss all matters relevant to this MOU.

7.0 COORDINATION AND PROGRESS REPORTS

7.1 The need for progress reports, if any, shall be included in the SOW.

7.2 Work performed under this MOU is subject to examination and audit by the State Auditor General, the Federal Inspector General, and each Party for a period ofthree years after final payment of funds under this MOU.

8.0 KEY PERSONS FOR THIS MOU ARE

8.1 Bureau of Reclamation

Mr. Nathaniel Gee, Regional Engineer Bureau of Reclamation Lower Colorado Region, Bureau of Reclamation P.O. Box 61470 (LC-6000) Boulder City, NV 89006-1470 (702) 293-8438 [email protected]

Ms. Meghan Thiemann, Civil Engineer (Hydrologic) Lower Colorado Region, Bureau of Reclamation P.O. Box 61470 (LC-6233) Boulder City, NV 89006-14 70 (702) 293-8438 [email protected]

8.2 The Lake Arrowhead Community Services District

Mrs. Catherine Cerri, General Manager District Main Office 27307 Highway 189, Blue Jay, CA 92317 P.O. Box 700, Lake Arrowhead, CA 92352 (909) 336-7100 [email protected]

4 Agreement No. ST7100

Ms. Aida Hercules, District Engineer District Main Office 27307 Highway 189, Blue Jay, CA 92317 P.O. Box 700, Lake Arrowhead, CA 92352 (909) 336-7100 [email protected]

8.3 The Arrowhead Lake Association

Mr. Wayne Austin, General Manager 870 North State Highway 173, Lake Arrowhead, CA 92352 P.O. Box 1119, Lake Arrowhead, CA 92352-1119 (909)-337-2595 [email protected]

5 Agreement No. ST7100

IN WITNESS WHEREOF, the Partners have executed this MOU on the date and the year written below.

UNITED STATES DEPARTMENT OF THE INTERIOR BUREAU OF RECLAMATION LOWER COLORADO REGION

. {_£,e By: -----~---+--+------­ Mr. Nat~haniel Gee, Regional Engineer

Date: --+-I/~,i,.~/Zo""--=-L.../-4-f---- ­ r 1

THE LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT

Mrs. Catherine Cerri, General Manager

Date:_/-'-#-//4.__._tf -4---'/Zo~ /K_ _ _

6 Agreement No. ST7100

THE ARROWHEAD LAKE ASSOCIATION

By· ~ Mr. VI ~ er

Date:_ _,_/--=2-_...,_/---'-1-~_;;-'-/ --'='t?_ ____ I I

7 Agreement No. ST7100

ATTACHMENT A

Scope of Work

8 Agreement No . ST7100

ATTACHMENT A - SCOPE OF WORK

Work will be performed through September 30, 2020. The research is anticipated to answer the following question: What is the best modeling approach to simulate mixing and assimilation of reuse ejjluent, given a wide range ofsite specific reservoir conditions and a wide range of available modeling approaches? As each respective agency typically has a specific modeling approach and specific needs, this research seeks to suppo1t reservoir operational decision making regarding mixing of reuse effluent.

The total cost associated with this project, that is funded by Reclamation, is $415,500. No direct funding will be provided by the District or Association.

Tasks to be completed for this scope of work are listed below. These tasks will be completed by Reclamation and UNLV, with assistance from the District and Association in the form of access to Lake Arrowhead and knowledge of the site. The District and Association will provide Reclamation and UNLV access to Lake Arrowhead primarily for data collection. Access to the Lake may include use of a boat from the Association or negotiated use of the maintenance barge. Technical group meetings to discuss project progress and data collection will be held monthly in the form of conference calls.

1. Project Management. Project Management is necessary to ensure smooth execution of the research proposal deliverable. Reclamation is responsible for project management tasks.

2. Data Collection. Gather information about Lake Arrowhead, its outfall and intake design location, and operating conditions. Acquire or generate information required for modeling inputs including the lake's water balance, hydrodynamics, meteorology, energy budget, reservoir operating conditions, and water quality.

3. Establish the model approximations and simplifications needed. Define a representative but simplified set of conditions to replicate the Lake Arrowhead's situation, and then determine the spatial mesh and temporal step sizes for a coupled system based on the defined conditions.

4. Generate input files for each model. Generate required model input data files for Lake Arrowhead's bathymetry, water quality and hydrodynamic/meteorological, operational conditions.

5. Couple the models and conduct trial runs. Create a two-way coupling between the near­ field and far-field models and conduct trial runs of the coupled system based on the defined conditions.

6. Evaluate Trial Runs. Evaluate results of coupled system and adjust the coupling approach to make sure appropriate coefficients have been adopted and the coupling algorithm can work successfully under different conditions. Agreement No. ST7100

7. Conduct full scale modeling runs. Run the coupled system based on the generated/gathered input data from steps 3 through 8 and evaluate the results, looking for stability of model output and soundness of results (e.g. dilutions increasing further from the discharge and estimated travel times are within the expected range) and use the Monte Carlo technique.

8. Conduct spot field measurements to generate validation data. Design and perform field validation experiments using a rapidly measured water quality parameter, such as conductivity/temperature/depth (CTD), (or possibly chlorophyll a, turbidity) measurements in the reservoir.

9. Adjust input data per validation results - Compare the model outputs with obtained data from the field measurements and perform required adjustments to the model. Adjustments might include changes in grid size, variation in estimated turbulent eddy diffusivities, and changes in simplifying assumptions (for example, changing an estimate of three vertical grid cells immediately down-gradient of the discharge to five).

I 0. Run the model with adjusted data for scenarios observed during the field campaign. Again, use Monte Carlo techniques to generate probability distributions of input variables and probability distributions of dilutions and travel times to the drinking water intake.

11. Conduct additional scenario analysis if needed. After validation of the model, different scenario analyses need to be performed to simulate/evaluate the role of the lake as an environmental buffer to protect public health. Use a Monte Carlo technique for different scenanos.

12. Technical Reporting, Professional Publications and Published repo1ts to include:

a. Technical Memorandum, Report, or Manual summarizing findings and recommendations of research in electronic format only. b. Peer Review by Subject matter expert. Subject matter expert to provide ongoing peer review and oversight of research, make recommendations regarding hydrodynamic modeling, and other tasks. Internal peer review by Reclamation's Denver Technical Service Center will be conducted. c. Professional Publications, Publish Reports. Publish studies, reports, and data developed on behalf of, and in close coordination with, local partners, such as the City of San Diego.

These tasks will be completed according to the project schedule, below. Agreement No . ST7100

T a bl e 1 S&T 7100 P ro1ec. t S C h e d u I e Projected Completion Date Milestone and Brief Information

9/30/17 Select model & lake

6/30/20 Evaluate available lake data

12/31/18 Model approximations

12/31/18 Field validation

7/31/18 Met station install

5/10/19 Collect, evaluate data Year 1

9/30/18 Tracer study waiver application & review

9/30/18 Prep tracer study #1

I 0/15/18 Model input files

11/30/18 Trial model runs

10/27/18 1st tracer study

12/31/18 Evaluate tracer study results

1/31/19 Model & calibrate 1st tracer study

2/28/19 2nd tracer study

4/30/19 Evaluate 2nd tracer study and recalibrate model

6/30/19 Model scenario analysis

5/10/20 Collect, evaluate data Year 2

8/31/19 Scenario data visualizations

10/31/19 Expert review scenario analysis

1/31/20 Revise scenario analysis

3/1/20 Write 1st draft technical report

3/31/20 Expert review 1st draft report

5/15/20 Revise 1st draft report

6/30/20 Agency S&T review draft final report

7/31/20 UNL V revisions

8/31/20 Expert Review of UNL V revisions

9/30/20 Final revisions submit final report AGREEMENT REGARDING PROTECTION OF BENEFICIAL USES OF LAKE ARROWHEAD

RECITALS

A Lake Arrowhead is an invaluable resource to the community serving both as the water supply source for the Arrowhead Woods community and as a recreational asset.

B. Several disputes have arisen over the years concerning the best way to preserve and manage Lake Arrowhead both as a water supply source and as a recreational asset.

C. The Lake Arrowhead Community Services District (LACSD) and the Arrowhead Lake Association (ALA) have a mutual interest in preserving the water quality and the water supply associated with the Lake Arrowhead Watershed.

D. Both ALA and LACSD were involved in State Water Resources Control Board ("SWRCB") Enforcement Hearing on Cease and Desist Order 262.31-18 and Ad mini strati ve Civil Liability Complaint No. 262.5-40, resulting in Order WR 2006-0001. Among other things, the Order defines LACSD's pre-1914 rights to divert water from Lake Arrowhead for domestic uses.

E. In order to proceed in a cooperative manner, ALA and LACSD entered into Memorandum of Understanding (MOU), dated November 5, 2005, which served as a settlement of the areas of contention between ALA and LAC SD and an Agreement Regarding Protection ofBeneficial Uses of Lake Arrowhead (Prior Agreement), dated November 16, 2007.

F. In furtherance ofthe Settlement Agreements and the Parties' mutual interests, LAC SD and ALA desire to participate in a cost-sharing arrangement for certain agreed upon costs associated with the protection and management of the Lake Arrowhead Watershed.

G. This Agreement is intended to update and supersede the MOU and Prior Agreement to reflect current conditions and reduce the administrative burden associated with those agreements.

TERMS AND CONDITIONS

Lake Arrowhead Community Services District ("LACSD") and Arrowhead Lake Association ("ALA") enter into the following Agreement ("Agreement") and agree to the following terms and conditions.

Lake Arrowhead Water Rights

ALA recognizes that LACSD is the owner of a valid pre-1914 right to divert water from Lake Arrowhead for consumptive purposes, and LACSD recognizes that ALA is the owner of a valid pre-1914 right to divert water to create Lake Arrowhead for recreational purposes.

1 Withdrawal Limitations

1. Without quantifying or otherwise limiting LACSois pre-1914 right, and notwithstanding any right that has been or may in the future be acknowledged by the SWRCB, LACSD agrees that beginning in January 2008, LACSD will limit its diversions from the Lake to 1,566 acre- feet/year (afy). This amount will be inclusive of all withdrawals from the Lake by LACSD, whether for domestic or irrigation purposes.

2. Interface between ALA and LACSD. ALA and LACSD will designate two representatives and the General Manager of each entity to meet to discuss the implementation of the Agreement.

A. The meetings shall be mutually agreed upon by the parties and shall occur at least twice a year or as agreed to by both parties.

B. Although the provisions of the Brown Act do not apply to the meetings and persons designated to attend the meetings, the time, place and agenda for such meetings shall be posted by LACSD in accordance with the requirements of the first paragraph of Government Code Section 54954.2(a). No other requirements ofthe Brown Act shall apply to the meetings.

C. Minutes ofthe meetings shall be kept and posted on both the LACSD and ALA websites. Preparation of such minutes shall be the responsibility of LACSD.

D. All recommendations from the meetings shall be advisory and shall be submitted to both the ALA and LACSD Board of Directors for any action outside this Agreement to be undertaken.

3. The persons designated to discuss implementation ofthe Agreement and the general public shall receive lake water withdrawal information that quantifies LACSD's withdrawals oflake water for the previous month.

4. If at any time during the year the level ofthe Lake reaches 5103, the Interface Committee shall determine, within 15 days of the Lake reaching such level, if a meeting is required to review LACSD's planned extractions of lake water ( defined according to a monthly withdrawal schedule for the remainder of the year). LACSD agrees that if the level of the Lake reaches 5,103, the Interface Committee will discuss ifLACSD's withdrawals shall be limited according to a mutually agreeable schedule that will take into account the month ofthe year. The purpose and goal ofsuch schedule will be to make every reasonable effort to prevent the Lake level from going below 5,100.

Lake Level Maintenance

5. ALA and LACSD agree that their mutual goal is to maintain the level of the Lake above 5,100 feet (ALA datum).

6. LACSD has enacted certain projects and programs designed to accomplish the Parties' mutual goal ofmaintaining the level of the Lake above 5,100 feet. These include water demand reduction

2 programs, automated meter reading systems, recycled water facilities, groundwater development and an agreement for State Water Project water. LACSD will use best efforts to pursue additional solutions that result in an integrated water portfolio. In order to accomplish this goal on a long­ term basis, the parties will work together to formulate and implement a physical solution that creates a permanent and reliable source of supplemental water.

SWRCB Compliance

7. LACSD is responsible for compliance with SWRCB Order 2006-0001 and nothing in this Agreement will preclude the LACSD from complying with the requirements of this Order.

Future Proceedings

8. ALA agrees that if the Lake is operated and managed in the manner expressed herein, ALA will not allege injury to recreational or downstream users or environmental interests.

9. ALA agrees to support LACSD in any future proceedings in defense of the operations of Lake Arrowhead for municipal water supply purposes.

10. LACSD agrees to support ALA in any future proceedings in defense of the operations ofLake Arrowhead for recreational purposes.

11. If LACSD is in breach of this Agreement, ALA shall not be bound by any of its covenants herein concerning injury caused by LACSD's operations.

Enforcement

12. This Agreement shall be specifical1y enforceable in Superior Court for the County ofRiverside. Specifically, the parties shall consent and submit to the jurisdiction of the Court maintaining continuing jurisdiction over the case City of Barstow, et al. vs. City of Adelanto, et al, Case No. 208568 for the purpose of administration and enforcement of this Agreement. Such submission shall be solely for the purpose of enforcement and administration of this Agreement. LAC SD acknowledges that it is already subject to the jurisdiction of the Court in that case. The intent of this paragraph is not to give the Mojave Water Agency authority over this Agreement.

Watershed Management

13. Cost Sharing by LACSD and ALA

LACSD agrees that certain costs identified in this Agreement would be borne by LACSD were it to maintain the Lake Arrowhead Watershed exclusively as a potable water supply. ALA agrees that certain costs identified in this Agreement would need to be performed by ALA were it to maintain the Lake Arrowhead Watershed exclusively as a recreational water body. LACSD and ALA agree to share certain costs as identified in Exhibit 1 ofthis Agreement beginning with costs incurred in Fiscal Year 2018/2019. 14. Independent Projects ofLACSD

3 All construction work conducted by LACSD in the performance of any watershed management activities shall be the sole and absolute responsibility ofLACSD. ALA shall not be responsible for any aspect ofwatershed management activities undertaken by LACSD. No watershed management activity performed by LACSD shall be deemed to be a joint venture between LACSD and ALA or deemed performed under the control, authority or direction of ALA ALA shall not be deemed to be the owner of any property, have any interest in any property, nor shall ALA take title to any facility or final product produced by LACSD as the result of these activities.

15. Independent Projects of ALA

All construction work conducted by ALA in the performance ofany ofthe watershed management activities and fully paid for with ALA funds shall be the sole and absolute responsibility of ALA. LAC SD shall not be responsible for any aspect ofthe watershed management activities undertaken by the ALA. No watershed management activity performed by ALA shall be deemed to be a joint venture between LACSD and ALA or deemed performed under the control, authority or direction ofLACSD, nor shall such work be considered a public works project. LACSD shall not be deemed to be the owner of any property, have any interest in any property, nor shall LACSD take title to any facility or final product produced by ALA as the result ofthese activities.

16. LACSD Hold Harmless and Indemnification

LAC SD shall assume the defense of, indemnify and hold harmless, ALA and each of its directors, employees or agents from and against any and all actions, damages, claims, losses, expenses or liability arising from or related to LACSDS's acts or omissions in performing or failing to perform watershed management activities. 17. ALA Hold Harmless and Indemnification

ALA shall assume the defense of, indemnity and hold harmless, LACSD and each of its directors, employees or agents from and against any and all actions, damages, claims, losses, expenses or liability arising from or related to ALA's acts or omissions in performing or failing to perform watershed management activities.

Additional Terms

18. Term: The term of this Agreement shall be 10 years from the date of execution. At the end of the first 10-year period, and at the end of every subsequent 10-year period, the Agreement will automatically renew for an additional 10-year term unless one of the parties delivers a written intent to renegotiate the Agreement to the other party within 30 days after the expiration of the term.

19. Amendments: The Terms and Conditions of this Agreement shall be amendable only by mutual written consent ofthe Boards of each ofthe parties.

20. Severability: The Terms and Conditions ofthis Agreement shall be severable, and the invalidity for whatever reason of any specific term shall not affect any other term of the Agreement.

4 This Agreement was prepared by representatives of Arrowhead Lake Association and Lake Arrowhead Community Services District. It was subsequently approved by their respective Board of Directors.

Name Name /1R61p~-,Jr Ctf!lttllt/dna q,,/" Title Title / JD ; 5 / 7,0 'Zo /~/; tf/;;tJ~.w:...... --- Date ' Datc 1 Arrowhead Lake Association Lake Arrowhead Community Services District

5 EXHIBIT 1

COST SHARING BETWEEN LACSD AND ALA

A. The following is a listing of watershed management activities to be included in the Cost Sharing agreement:

1. Lake Arrowhead Dam Permit Fees 2. Shared Structures 3. Ground water exchange

A.1. LAKE ARROWHEAD DAM PERMIT FEES

The following dam permit fee is included as a cost sharing expense, since the fee would need to be paid by either LACSD or ALA, were Lake Arrowhead used exclusively for water supply or recreational activities:

Division of Safety of Dams (DSOD) Annual Permit Fee.

The DSOD permit fee is paid by ALA. The DSOD permit is required by State law. The DSOD inspects the dam and the outlet system in conjunction with the permitting process.

ALA will provide a copy of the Dam Permit Fee invoice to LACSD. LACSD will reimburse ALA 75% of the cost of the Dam Permit Fee within 30 days ofreceipt of the invoice. The Dam Permit Fee is calculated in accordance with section 6307 of the California Water Code. Any additional costs assessed by the DSOD will not be included in the cost sharing.

A.2. SHARED STRUCTURES

ALA and LACSD share the use of several bridge structures for both pedestrian walk ways and pipe supports for the transportation ofwater. The organizations will share 50% ofthe maintenance and rehabilitation costs ofthese facilities. Any work must be approved in advance by both entities to be eligible for cost sharing.

A.3. GROUND WATER EXCHANGE

LACSD will exchange raw groundwater under the ALA's property for potable water on a two to one ratio. For example, LACSD will credit ALA one half gallon of potable water delivered for every one gallon of groundwater pumped from under its property.

ALA may apply this credit to property owned and irrigated by ALA and to facilities owned by ALA including restrooms, offices, maintenance facilities, and member use facilities.

6 In no way does this exchange eliminate ALA's required diligence to ensure that the water delivered to ALA facilities is used efficiently as this would be contrary to the Parties' mutual goal to maintain the level of the Lake above 5,100 feet.

B. The following is a listing of watershed management activities that will continue to be conducted by LACSD at their sole cost and expense, unless indicated below as a responsibility of ALA. It is in the best interest of both parties that LACSD continues to conduct these activities, the ceasing of which could result in a breach ofthis agreement. ALA will make best efforts to support these activities when required.

1. Monitoring Criteria 2. Lake Surface Water Monitoring Program

B.1. Monito1·ing Criteria

Change in Storage: Data for the monthly monitoring of Lake level changes and controlling the amount ofwater withdrawn from Lake Arrowhead for water supply purposes shall be derived from actual measurements.

Outflow ALA, at its own expense, shall be responsible for maintaining records of water spilled from Lake Arrowhead over the two Willow Creek Spillways, under the control of ALA These records shall include the time when each spillway opened and closed, as well as the resulting duration of time that each spillway was open. ALA will make this data available to LACSD at no cost for the purposes of reporting to the State.

Lake Level Measurements. Measurements of Lake level will be made at least daily by ALA at ALA's own expense. ALA shall be responsible at its own expense for maintaining daily records of the Lake level and will provide Lake level measurements to LACSD at least weekly. Daily measurement data will be made available to LAC SD at no cost upon request.

Precipitation Measurements. Precipitation measurements will be obtained by LACSD from the San Bernardino County Flood Control District and other sources. Information from LACSD gauging stations shall also be used.

Inflow from Grass Valley Lake Measurements. Metered quantities of excess storm water flows transferred by gravity from Grass Valley Lake to Lake Arrowhead under the control of ALA shall be included when they occur. Measurement of the quantity of inflow periodically flowing into Lake Arrowhead from Grass Valley Lake by gravity through the tunnel shall be independently made by LACSD at the discharge end of the tunnel.

Withdrawal Measurements. LACSD shall be responsible for maintaining daily records of the quantities of water withdrawn from the Lake for domestic water supply, as well as any transfer to Grass Valley Lake for golf course irrigation, which shall be metered and accounted for separately, all in terms of acre-feet. LACSD shall provide such measurements to ALA.

7 B.2. LAKE SURFACE WATER MONITORING PROGRAM

The lake surface water monitoring program would need to be performed by either LACSD or ALA, were Lake Arrowhead used exclusively for water supply or recreational activities. The monitoring program is as follows: a) Weekly Monitoring, Memorial Day to Labor Day: 1) Burnt Mill Beach Club 2) Tavern Bay Beach Club b) Monthly Monitoring, Six Months per Year: 1) Blue Jay Canyon Creek 2) Lower Burnt Mill Creek 3) Orchard Creek c) Annual Monitoring: 1) Meadow Bay 2) North Bay

All surface water monitoring is performed by LACSD.

Weekly monitoring consists of testing for: I) Total and Fecal Coli forms, each sample point, each week; 2) Fecal Streptococci/ Enterococci, each sample point, each week; 3) General Minerals, rotated sampling point, one sample each week.

Monthly monitoring consists of testing for: 1) Total and Fecal Coli forms, each sample point, each month; 2) Fecal Streptococci/ Enterococci, each sample point, each month; 3) General Minerals, rotated sampling point, one sample each month; 4) MBAS, each sample point, each month.

Annual monitoring consists of testing for: 1) Herbicides, EPA Methok 515 .1, each sample point, each year; 2) Diquat, EPA Method 549.1, each sample point, each year.

C. The following is a listing of watershed management activities that will continue to be conducted by ALA at their sole cost and expense. It is in the best interest of both parties that ALA continues to conduct these activities, the ceasing of which could result in a breach ofthis agreement. LACSD will make best efforts to support these activities when required.

1. Repair, Maintenance and Construction of Erosion and/or Sediment Control Facilities 2. Dredging of Inlets to Certain Lake Arrowhead Bays 3. Routine Repair and Maintenance of Lake Tower, Outlet System and Spillway 4. Boat Inspection program

8 C.1. REPAIR, MAINTENANCE AND CONSTRUCTION OF EROSION AND/OR SEDIMENT CONTROL FACILITIES

Repair, maintenance and construction of erosion and/or sediment control facilities would need to be performed by either LACSD or ALA, were Lake Arrowhead used exclusively for water supply or recreational activities.

Repairs and maintenance of all erosion and/or sediment control facilities are performed by ALA. Repair and maintenance consists of removing sediment collected in the basins, repairing storm damaged basins and modifying basins as necessary due to storm activity.

Construction would include construction of any needed sedimentation basin or erosion control facility which would result in a more cost-effective sediment and erosion control operation. Construction of all erosion and/or sediment control facilities is performed by ALA at its own cost and expense. LACSD shall not be responsible for paying for any of these activities.

C.2. DREDGING OF INLETS TO CERTAIN LAKE ARROWHEAD BAYS

Dredging of inlets to Lake Arrowhead Bays would need to be performed by either LACSD or ALA; were Lake Arrowhead used exclusively for water supply or recreational activities.

Dredging is performed by ALA at its own cost and expense to remove sediment material from inlet areas and maintain adequate stream flow into Lake Arrowhead, as well as to maintain lake water quality and storage capacity.

LACSD shall not be responsible for paying for any of these activities. LACSD shall assist ALA in preparation and submittal of the appropriate applications to obtain necessary permits from State and Federal Agencies.

C.3. REPAIR AND MAINTENANCE OF LAKE TOWER, OUTLET SYSTEM ANO SPILLWAY

Repair and maintenance of the Lake Tower, outlet system and spillway would need to be performed by either LACSD or ALA were Lake Arrowhead used exclusively for water supply or recreational activities.

Repair and maintenance of the Lake Tower, outlet system and spillway is performed by ALA at its own expense. LAC SD shall not be responsible for paying for any ofthese activities. Such repair and maintenance includes: a) Operation, routine repair and maintenance of outlet valves and valve operators; b) Routine repair and maintenance of access elevator, specifically including annual maintenance contracts; c) Operation, routine repair and maintenance of spillway, and; d) Routine repair and maintenance of tower and associated pipes, tunnel and outlet valve room.

9 Extraordinary repairs, replacement or upgrades of outlet valves, valve operators, access elevator, spillway, tower and associated pipes, tunnel and outlet valve room shall be outside the scope of this Agreement.

C.4. BOAT INSPECTION PROGRAM

The boat inspection program would need to be performed by either LACSD or ALA were Lake Arrowhead used exclusively for water supply or recreational activities. The potential invasion of zebra or quagga mussels poses a significant risk to LACSD. Invasive mussels clog water intake pipes and underwater screens. This plugs pumps and increases both maintenance and pumping costs. ALA is responsible for the monitoring program at its own expense as follows:

Daily boat ramp monitoring (May through September) (1) Verbal discussion with owner on the use location of boat (2) Visual check of boat and trailer (3) Inspection ofthe bilge of any out of state boat (4) Require high pressure cleaning of boat

10