N Water Storage District Board of Directors Regular Meeting

Board Meeting

JUNE

November 2017 AGENDA NORTH KERN WATER STORAGE DISTRICT BOARD OF DIRECTORS REGULAR MEETING

33380 Cawelo Avenue Bakersfield, CA 93308

Tuesday, June 18, 2019 - 7:00 a.m.

CALL TO ORDER PUBLIC COMMENT

1. Board Meeting Minutes A. Approve Minutes of May 21, 2019 Regular Board Meeting B. Approve Minutes of June 13, 2019 Special Board Meeting

2. General Informational Items A. Kern River Watermaster Report B. Kern River Watershed Coalition Authority* C. Kern Groundwater Authority * D. District Groundwater Levels F. District Exchange Balances G. Operations Report

3. Financial Matters A. Approve Treasurer's Report 1. NKWSD 2. RRID B. Monthly Financial Statements C. Water Sales D. Accounts Receivable E. Approve Accounts Payable

4. Consulting District Engineer A. High Speed Rail* B. Poso Creek RWMG* C. Status of Grants* D. Water Delivery Improvements*

5. Budget and Personnel Committee

6. Engineering Committee A. Authorize Execution of Easement to Pacific Gas and Electric Company B. Approve First Amendment to Utility Agreement 1.0 with California Rail Builders for the High Speed Rail CP-4 Project C. Approve Task Order with GEI Consultants for Engineering Support for the High Speed Rail CP-4 Project D. Reject Bid for Water Delivery Improvement Project E. Approve Waiving Competitive Bidding Requirements for an Emergency Project at the Calloway-CVC BNSF Railroad Crossing Location (Resolution) F. Approve Automated Demand Response Program Agreement with Polaris Energy Services

7. Groundwater Committee A. Approve Documents with Respect to Management of “White Areas” for the Sustainable Groundwater Management Act B. Approve Task Order with GEI Consultants for Rosedale Ranch ID Management Area Plan Development C. Sustainable Groundwater Management Act Status Report – June 2019

8. Produced Water Ad Hoc Committee

9. Negotiating Committee A. Approve Agreement with Kern County Water Agency for Lake Isabella Dam Safety Remediation Project Repayment

10. Counsel of District

11. Rosedale Ranch Improvement District A. SGMA Planning Study*

12. General Manager's Report*

OTHER BUSINESS

13. Closed Session Matters:

A. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION (Govt. Code Section 54956.9(a))

(i) North Kern Water Storage District v. City of Bakersfield (VCSC #56-2011-00408712-CU-CO-VTA) (ii) Appeal of Regional Board General Order (R5-2013-0120) for Tulare Lake Basin to State Water Resources Control Board (re. Irrigated Lands Regulatory Program)

B. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Govt. Code Section 54956.9(b))

C. PERSONNEL MATTERS (Govt. Code Section 54957)

D. CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Govt. Code Section 54956.8)—use of District facilities for various potential water management programs; negotiator, Richard Diamond

14. Adjournment

BOARD OF DIRECTORS North Kern Water Storage District Minutes of the Meeting of May 21, 2019

A Meeting of the Board of Directors of North Kern Water Storage District was held at the District Office, 33380 Cawelo Avenue starting at 7:00 a.m., on May 21, 2019.

President Andrew declared a quorum was present and called the meeting to order. The following Directors were present: Kevin Andrew, Winn Glende, Carole Fornoff and Joel Ackerknecht. Others present: Richard Diamond (General Manager), Ram Venkatesan (District Engineer), Fernando Rizo (O&M Superintendent), Heather Williams (Hydrographer), Christy Castaneda (Administrative Assistant) and Erica Celedon (Accounting Clerk) of North Kern Water Storage District, Scott Kuney (District Counsel), Ron Eid and Larry Rodriguez (GEI – Consulting Engineers). Guests included Lawrence O’Leary (Mottech Water Solutions), George Capello (Grimmway), Preston Britain (Pacific Resources) and Dave Dorrance (Sun World). Absent from today’s meeting was Director Mendes.

President Andrew called the meeting to order at 7:02 a.m. and opened the floor for public comments.

At this time, General Manager Diamond addressed the Board and asked to add agenda item 6D–Ken Schmidt & Associates Groundwater Modeling

(19-57) Upon motion of Director Ackerknecht, seconded by Director Fornoff and unanimously carried, to approve adding agenda item 6D – Ken Schmidt & Associates Groundwater Modeling. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

At this time, Lawrence O’Leary of Mottech Water Solutions addressed the Board and gave a brief discussion of what they offer, i.e. SCADA for growers and water management.

(19-58) Upon motion of Director Ackerknecht, seconded by Director Fornoff and unanimously carried, to approve the minutes from the April 16, 2019 Regular Board meeting. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

Watermaster – Mr. Munn reported that the Isabella remediation Phase II project construction and blasting continues.

The Bureau of Reclamation released the contract for repayment of the dam safety modifications for a 60 day public review process on January 2, 2019. It was completed in March without any comment. The USBR has partially signed contracts and resolutions.

The May B120 median forecast predicts 170% April – July runoff. Weather modification operations ended on April 30, 2019.

Kern River Watershed Coalition Authority – General Manager Diamond stated there was no update at this time.

Kern Groundwater Authority – President Andrew stated that the Authority continues to work with the Kern County Water Agency to capture all white lands.

Operations Report – O&M Superintendent Rizo reported on District operations stating that the District’s share of Isabella storage is estimated at 76,000 AF. Kern River natural inflow is averaging 4,500 cfs. The outflow is averaging 3,200 cfs. The District Kern River demand is 950 cfs.

CRC produced water of 14 cfs has been diverted to the 9-2 spreading pond in anticipation of a possible spreading operation to Poso Creek. Califia Farms continues to pump into the Lerdo Canal.

Financial Matters –

(19-59) Upon motion of Director Glende, seconded by Director Fornoff and unanimously carried, to receive and file the Treasurer’s Report for the North Kern Water Storage District for the month of April as printed. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

(RR19-60) Upon motion of Director Glende, seconded by Director Fornoff and unanimously carried, to receive and file the Treasurer’s Report for the Rosedale Ranch Improvement District for the month of April as printed. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

The Financial Statement, Summary of Water Sales, Deposits and the Accounts Receivable report for the month of April were reviewed and accepted as printed.

(19-61) Upon motion of Director Fornoff, seconded by Director Glende and unanimously carried, to approve for payment the Accounts Payable for the North Kern Water Storage District for the month of April as printed. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

(RR19-62) Upon motion of Director Fornoff, seconded by Director Glende and unanimously carried, to approve for payment the Accounts Payable for the Rosedale Ranch Improvement District for the month of April as printed. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

Consulting District Engineer – Consulting District Engineer Ron Eid reported:

A. High-Speed Rail Authority: Mr. Eid mentioned GEI reviewed the 100% design plan specifications for the 9-26 canal conflict. GEI is working on an amendment with California Rail Builders to increase the reimbursable amount going forward.

B. Poso Creek RWMG: Mr. Eid stated there was no public meeting this month. Work on the Plan update continues.

C. Grants for Projects:

GEI has prepared two grant proposals to the Bureau of Reclamation. Both were due in March. These grants involve additional canal lining of the Calloway Canal, deep well instrumentation and drilling, and equipping three new wells and connecting those and other existing wells to the Friant-Kern Canal. The District was awarded an amount of $750,000 for construction of replacement wells and additional well connections to the Friant–Kern Canal. Environmental work has been moving forward and archeological surveys are also completed to support this award. The Bureau is currently working on drafting a contract for this award. We also previously received notice that the District was awarded an amount of $75,000 to fund the SCADA software and Land IQ ET improvements. The Bureau is currently working on drafting a contract for this award.

D. Water Delivery Improvements: Calloway Canal Lining portion and Well Instrumentation is completed. GEI continues to provide support to ProUsys to purchase and install equipment. The RFP Draft bid documents are out for bid. Budget and Personnel Committee –

(19-63) Upon motion of Director Glende, seconded by Director Ackerknecht and unanimously carried, to authorize Valley Republic Bank insured cash sweep program for the rate stabilization fund. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

Engineering Committee –

(19-64) Upon motion of Director Ackerknecht, seconded by Director Glende and unanimously carried, to approve the letter of agreement with the Bureau of Reclamation for preparation of a five year Warren Act contract and supporting the resolution. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

(19-65) Upon motion of Director Fornoff, seconded by Director Ackerknecht and unanimously carried, to approve amendment a Task Order with GEI Consultants for Environmental Compliance Support Services for the return capacity improvements project in an amount not-to-exceed $29,200. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

(19-66) Upon motion of Director Glende, seconded by Director Ackerknecht and unanimously carried, to approve a Task Order with GEI Consultants for technical support to the Districts general counsel not-to-exceed $50,000. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

(19-67) Upon motion of Director Glende, seconded by Director Ackerknecht and unanimously carried, to approve the proposal by Kenneth D. Schmidt and Associates in an amount not-to-exceed $31,840. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

Groundwater Ad Hoc Committee – General Manager Diamond stated the District should have a revised GSP draft by June 7, 2019. Staff will coordinate a Special Board Meeting on June 13, 2019 to discuss the GSP draft.

Produced Water Ad Hoc Committee – No Report at this Time

Negotiating Committee – No Report at this Time

Counsel of District –

(19-68) Upon motion of Director Ackerknecht, seconded by Director Glende and unanimously carried, to approve a CEQA Notice of Exemption for Contract Between the United States of America, North Kern Water Storage District, and Buena Vista Water Storage District Providing for the Repayment of Funds Expended for Federally Performed Isabella Dam Safety Modification Project, Contract No. 18-WC-20-5245. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

Rosedale Ranch –

(19-69) Upon motion of Director Fornoff, seconded by Director Ackerknecht and unanimously carried, to Approve Landowner Water Banking Program Agreement with Affentranger Farms. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

General Manager’s Report – At this time, General Manager Diamond mentioned he was working on an amended agreement with Daniel Waterhouse for use of land for groundwater recharge purposes.

The President publicly stated that the legal authorities for holding Closed Session at today’s Board Meeting are the following sections of the California Government Code:

A. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION (Govt. Code Section 54956.9(a))

B. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Govt. Code Section 54956.9(b))

C. PERSONNEL MATTERS (Govt. Code Section 54957)

D. CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Govt. Code Section 54956.8)—use of District facilities for various potential water management programs; negotiator, Richard Diamond

The above legal grounds were determined to exist based on advice of counsel, and discussion of such matters in an Open Session would cause prejudice to the District. The Board went into Closed Session at 8:55 a.m. The Board reconvened back into open session at 9:37 a.m. and it was noted no reportable actions were taken in closed session.

(19-70) Upon motion of Director Ackerknecht, seconded by Director Glende and unanimously carried to adjourn the meeting at 9:37 a.m. (Ayes: Andrew, Ackerknecht, Fornoff & Glende, Noes: None, Absent: Mendes, Abstain: None)

Respectfully Submitted,

Richard Diamond, General Manager

Approved by Board June 18, 2019

Kevin Andrew, President

BOARD OF DIRECTORS North Kern Water Storage District Minutes of the Special Meeting of June 13, 2019

A Special Meeting of the Board of Directors of North Kern Water Storage District was held at the District Office, 33380 Cawelo Avenue starting at 12:00 p.m., on June 13, 2019.

President Andrew declared a quorum was present and called the meeting to order. The following Directors were present: Kevin Andrew, Winn Glende, Mike Mendes, Joel Ackerknecht and Carole Fornoff. Others present: Richard Diamond (General Manager), Ram Venkatesan (District Engineer), Heather Williams (Hydrographer), Marinelle Duarosan (Controller), Scott Kuney (District Counsel) Ron Eid (GEI – Consulting Engineers). Guests present: Larry Rodriguez and Michelle Rickler (GEI).

President Andrew called the meeting to order at 12:02 p.m. and opened the floor for public comments. At this time, there was none.

The President publicly stated that the legal authorities for holding Closed Session at today’s Board Meeting are the following sections of the California Government Code:

A. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION (Govt. Code Section 54956.9(a))

B. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Govt. Code Section 54956.9(b))

C. PERSONNEL MATTERS (Govt. Code Section 54957)

D. CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Govt. Code Section 54956.8)—use of District facilities for various potential water management programs; negotiator, Richard Diamond

The above legal grounds were determined to exist based on advice of counsel, and discussion of such matters in an Open Session would cause prejudice to the District. The Board went into Closed Session at 12:06 p.m. The Board reconvened back into open session at 2:15 p.m.

(19-71) Upon motion of Director Glende, seconded by Director Ackerknecht and unanimously carried to adjourn the meeting at 2:15 p.m. (Ayes: Andrew, Mendes, Glende, Ackerknecht & Fornoff, Noes: None, Absent: None, Abstain: None)

Respectfully Submitted,

Richard Diamond, General Manager

Approved by Board June 18, 2019

Kevin Andrew, President

NORTH KERN WATER STORAGE DISTRICT AVERAGE MONTHLY GROUNDWATER LEVELS BY TOWNSHIP

200

220

240

260

280 feet

in 300 TOWNSHIP LEGEND

T 26 (North) Actual Water 320 T 26 (North) Interpolated T27 (Central) Actual 340 Depth of T27 (Central) Interpolated 360 T28 (South) Actual T28 (South) Interpolated 380

400

420

440

460 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr

DISTRICT DEEP WELL PRODUCTION Ac‐Ft 25000

20000

15000

10000 Groundwater Pumped Ac‐Ft

5000

0 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr NORTH KERN WATER STORAGE DISTRICT EXCHANGE BALANCES AS OF MAY 31, 2019

NK to Others = 252,508 AF Others to NK = 32,721 AF

Bob Neufeld Cawelo WD Pacific Ag. Resources 317 Delano Earlimart ID (19,265) 562 39,038 Buena Vista SSJMUD 21,652 13,115

Suburban Land Improvement 1,845 District 4 Kern Delta 15,477 4,998 West Kern WD 5,375 Kern Tulare WD Semitropic WSD 30,807 24,180

Homer LLC 8,895 Shafter Wasco ID Wonderful Orchards City of 52,195 34,050 Bakersfield 32,721 NORTH KERN WATER STORAGE DISTRICT EXCHANGE BALANCES AS OF MAY 31, 2019 NORTH KERN WATER STORAGE DISTRICT MONTHLY EXCHANGE QUANTITIES FOR 2019 (QUANTITIES IN AF)

12000

9000

6000

Stored

3000

0 Jan‐19 Feb‐19 Mar‐19 Apr‐19 May‐19 Jun‐19 Jul‐19 Aug‐19 Sep‐19 Oct‐19 Nov‐19 Dec‐19

Feet EXCHANGE PARTNER MAY YTD ‐ (3000) TO FROM TO FROM Acre Shafter‐Wasco ID 16 1,248 30 13,924 Homer LLC 2,138 Recovered Kern Tulare WD 1,782 (6000) Delano Earlimart ID 14,600 Wonderful 256 2,511 SSJMUD 8,780 Pac. Ag 48 48 (9000) Cawelo 10,261 11,211 Suburban 138 138 Neufeld 11 11

TOTAL 11,241 (12000) 10,277 1,701 43,932

P.O. Box 81435 33380 Cawelo Avenue Bakersfield, CA 93380-1435 Bakersfield, CA 93308-9575 Administration Water Orders and Operations Telephone: 661-393-2696 Telephone: 661-393-3361 Facsimile: 661-393-6884 www.northkernwsd.com

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: BOARD OF DIRECTORS

FROM: Heather Williams

RE: Operations Report

Operations

1. Lake Isabella storage levels are estimated at 316,000 AF. The District’s share of storage is estimated to be 70,000 AF. Natural Inflow is averaging 5,900 CFS and the regulated Outflow is averaging 5,100 CFS. The District’s Kern River demand is averaging 1,025 CFS. 2. The District is continuing to receive Extension Contract water from the City of Bakersfield in the amount of 90 CFS per day. This water continues to be delivered at the Head of the Calloway Canal. Friant deliveries remain at zero. 3. District spreading has averaged 350 CFS daily. Private land spreading continues within the RRID totaling 12 CFS. Additional spreading includes Wonderful 21 CFS, Neufeld 2 CFS and the Suburban lands, off of the CT-1, totaling 15 CFS. Paul Farm Mgmt. has finished installing their sub-surface piping for spreading. They have ordered water and have started testing their system. 4. The 14 CFS flow of CRC produced water continues to be diverted to the 9-2 spreading pond. Califia continues with their 1 CFS into the Lerdo.

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: ENGINEERING COMMITTEE Directors Mendes and Andrew, Alternate Ackerknecht

FROM: Richard Diamond and Ram Venkatesan

RE: Authorize Execution of an Easement to Pacific Gas and Electric Company

RECOMMENDED MOTION:

“Authorize the General Manager to execute an easement to Pacific Gas and Electric Company to provide power to Shafter-Wasco Irrigation District’s deep well on the west side of Calloway Canal south of Kimberlina Road.”

DISCUSSION:

Pacific Gas and Electric Company (“PG&E”) has requested an easement to construct, operate and maintain an electric power line that will provide power to Shafer Wasco Irrigation District’s new deep well on the west side of the Calloway Canal south of Kimberlina Road as shown on Exhibit “A”. PG&E is currently working on the design drawings and easement document and will forward these to staff and legal counsel for review. Staff recommends the execution of an easement to PG&E subject to staff and legal counsel review and approval.

Attachments:

Exhibit “A” – Proposed Location of the Power Line

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: ENGINEERING COMMITTEE Directors Mendes and Andrew, Alternate Ackerknecht

FROM: Richard Diamond and Ram Venkatesan

RE: Approve First Amendment to Utility Agreement 1.0 with California Rail Builders for the High Speed Rail CP-4 Project

RECOMMENDED MOTION:

“Authorize the General Manager to execute the first amendment to the Utility Agreement 1.0 with California Rail Builders for the High Speed Rail CP-4 Project.”

DISCUSSION:

The District entered into a Utility Agreement 1.0 (“UA 1.0”) in 2017 with California Rail Builders (“CRB”) for the High Speed Rail (“HSR”) CP-4 project that reimburses the cost incurred by the District and its consultants for participating in design activities associated with the relocation of District facilities that are necessary to accommodate the HSR project. The total reimbursement amount authorized under UA 1.0 is $100,000. However, the budget expended by GEI and the District to date is approximately $205,000. CRB has reimbursed all the costs incurred to date. Given the UA 1.0 work is to continue, CRB is requiring an amendment to UA 1.0 to increase the total reimbursement amount to $300,000. No other changes are made to the existing agreement.

Staff recommends Board approval for the General Manager to execute the amendment to UA 1.0.

Attachments:

Exhibit “A” – First Amendment to UA 1.0

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: ENGINEERING COMMITTEE Directors Mendes and Andrew, Alternate Ackerknecht

FROM: Richard Diamond and Ram Venkatesan

RE: Approve Task Order with GEI Consultants for Engineering Support for the High Speed Rail CP-4 Project

RECOMMENDED MOTION:

“Authorize the General Manager to execute Task Order 19-7 with GEI Consultants for providing engineering support for the High Speed Rail CP-4 Project for budget amount not-to-exceed $80,000.”

DISCUSSION:

GEI Consultants (“GEI”) provides engineering support to District staff on matters related to design activities associated with the relocation of District facilities that are necessary to accommodate the High Speed Rail (“HSR”) project. GEI was providing the necessary engineering support based on the previously approved Task Order 18-9. Since the budget authorized on the prior task order has been exhausted, staff requested a new task order from GEI (Exhibit “A”) to replenish the budget so they can continue to provide the necessary engineering support. Costs expended by GEI for providing the engineering support will be fully reimbursed by California Rail Builders (“CRB”).

Staff recommends Board approval for the General Manager to execute a task order with GEI Consultants for providing engineering support for the High Speed Rail CP-4 Project for a budget amount not-to-exceed $80,000.

Attachments:

Exhibit “A” – Task Order from GEI Consultants

May 22, 2019 Geotechnical

Environmental Ram Venkatesan, PE Water Resources District Engineer Ecological North Kern Water Storage District (661) 393-2696 (office) (661) 302-3530 (cell) (661) 393-6884 (fax) [email protected]

PROFESSIONAL SERVICES AGREEMENT BETWEEN GEI CONSULTANTS, INC., AND NORTH KERN WATER STORAGE DISTRICT For The California High Speed Rail Project - Engineering Support Services for NKWSD’s Utility Agreement 1.0

TASK ORDER NO. 19-07 (ADD ON TO 18-09 AND (ADD ON TO 02-2017))

This Task Order defines a Scope of Services, Schedule, and Budget for work to be completed by GEI Consultants, Inc. for North Kern Water Storage District (North Kern) per the terms and conditions of the Professional Services Agreement dated November 16th, 2017. This add-on task order includes activities to be performed in calendar years 2019 and 2020.

SCOPE OF SERVICES

This Task Order will provide for GEI’s response to your District’s requests for engineering assistance related to relocation of District facilities that conflict with the California High- Speed Rail Alignment. District facility relocations shall be performed pursuant to Utility Agreement(s) between the California High-Speed Rail Authority, Facility Owner, and the Authority’s Contractor.

GEI’s role is to provide engineering support at the request of the District, that is in accordance with the Authority Master Agreement HSR 16-15 and each Utility Agreement with the Authority. GEI will perform the scope of work assigned by the District that is in the District’s interests to complete the District’s Scope of Work under the Utility Agreement.

The District’s Scope of Work as stated in the Utility Agreement includes: The District (Facility Owner) will coordinate with Authority and Authority’s Contractor and participate in

www.geiconsultants.com GEI Consultants, Inc. 5001 California Avenue, Suite 120 Bakersfield CA, 93312 (661) 327-7601 Fax: (661) 327-0173 partnering meetings, negotiation of project specific Utility Agreements and participate in pre- design activities associated with the Relocation or any other Rearrangement of Facilities that are necessary to accommodate or permit construction of the HSR Project. There are currently 8 conflicts identified.

Specifically, Facility Owner’s work under this Utility Agreement 1.0 includes, but is not limited to, the following tasks that are numbered to correspond with invoicing expenses:

1) Partnering and Pre-Design Phase: • Participate in Initial Kickoff Meeting. • Participate in recurring coordination/partnering meetings. • Review proposed Utility Agreements for each conflict; define scope of work, budget and schedule.

2) Design Phase • Participation in development of exploration plan. • Oversight of field discovery efforts (survey, pothole/exploration work, etc.). • Provide available “as-builts” for the conflicts. • Provide Facility Owner design standards. • Provide and review any specific design parameters for each conflict. (Flows, min. depths, etc.) • Review and respond to design-related Requests for Information (RFI’s are numbered and require a response within a given time limit). • Coordination with impacted landowners to determine “new” Point of Service. • Attend conflict design site meetings (4 meetings +/-). • Review 25% Plans and Specifications for each conflict. • Review 60% Plans and Specifications for each conflict. • Review 90% Plans and Specifications for each conflict. • Review Final Plans and Specifications for each conflict. • Provide a Construction Authorization document for each conflict.

3) Submittals: • Submittals will be transmitted as decided between California Rail Builders & Facility Owner and their appropriate subcontractors.

4) Reimbursement Phase: • Preparation of invoices and maintenance of financial records.

www.geiconsultants.com GEI Consultants, Inc. 5001 California Avenue, Suite 120 Bakersfield CA, 93312 (661) 327-7601 Fax: (661) 327-0173 SCHEDULE

This is the second add-on to the Task Order intended to cover activities related to providing engineering services in calendar-years 2017, 2018 and 2019; it is to extend GEI services into 2020. The schedule for completion of any given assignment will be coordinated with the District’s Engineer.

BUDGET

The budget expended to date by GEI to NK is approaching $180,000; the expenditures submitted by NKWSD to CRB/HSR under this UA was at $205,000 indicating NKWSD incurred about $25,000. Given that CRB/HSR requested NKWSD to raise their authorized amount to $300,000 under this UA, the ratio of past NKWSD expenses to GEI was used estimate the add-on for GEI services. Given the Utility Agreement work is to continue 2020, it is recommended to add-on $80,000 in budget for this Add-On modification to increase the authorized budget to $260,000. This budget is intended to be utilized responding to District requests for engineering assistance; it is not a cost estimate for a pre- determined scope of work. Billing for all work completed under this Task Order will be in accordance with the terms of the Professional Services Agreement, based on GEI’s 2019 and 2020 Fee Schedule, and expenses billed at cost. The cost is to be tracked using a unique GEI project number. The total budget amount shall not be exceeded without written authorization from the District.

AUTHORIZATION

This Task Order is authorized and made an attachment to the above-identified Professional Services Agreement through the signatures below.

Authorized by: Accepted by: NORTH KERN WATER STORAGE GEI CONSULTANTS, INC. DISTRICT

By: ______By: ______

Date: ______Date: __5______/24/2019

ACCOUNTING CODES

All work will be billed under a newly-assigned GEI Project Number and titled “HSR- NKWSD Engineering Services”. Separate task numbers can be assigned under the Project number to track the effort and costs for separate requests/assignments. ______www.geiconsultants.com GEI Consultants, Inc. 5001 California Avenue, Suite 120 Bakersfield CA, 93312 (661) 327-7601 Fax: (661) 327-0173

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: ENGINEERING COMMITTEE Directors Mendes and Andrew, Alternate Ackerknecht

FROM: Richard Diamond and Ram Venkatesan

RE: Reject Bid for the Water Delivery Improvements Project

RECOMMENDED MOTION:

“Authorize the General Manager to reject the bid from A-C Electric Company and direct staff to rebid the Water Delivery Improvements project.”

DISCUSSION:

Staff informed the Board in prior meetings regarding inviting bids to procure, install and commission the items related to the Phase 2 of the Water Delivery Improvements project. Bids for the Water Delivery Improvements project were publicly opened on May 29th, 2019 and despite five potential bidders expressing interest in the project the District received only one bid proposal from A-C Electric Company. GEI Consultants (GEI) and the District’s legal counsel reviewed the proposal for correctness and completeness. Exhibit “A” is the bid analysis and recommendation from GEI. As indicated in GEI’s recommendation the bid amount is approximately three times the Engineer’s estimate. Staff recommends that the Board authorize the General Manager to reject the bid from A-C Electric Company and direct staff to rebid the Water Delivery Improvements project.

Attachments:

Exhibit “A” – Bid Analysis and Recommendation from GEI

Geotechnical June 13, 2019 Environmental Board of Directors Water Resources North Kern Water Storage District Ecological 33380 Cawelo Extended Bakersfield, CA 93308

Members of the Board:

Re: Analysis and Recommendation to Reject the Bid North Kern Water Storage District Specifications No. NK-612 for Constructing the Water Delivery Improvements Project

GEI has reviewed the only bid proposal for the subject project which was received and opened at the District’s office on May 29, 2019. The project was advertised for sealed bids from May 1st through May 22nd, and bids were publicly opened. GEI’s analysis and recommendation to reject the bid is presented herein.

The proposal received is shown in detail on the attached bid abstract and is summarized as follows:

Bidder Bid Amount

A-C Electric Company $ 4,484,650.00

As part of the proposal evaluation process, GEI reviewed A-C Electric Company’s (A-C Electric) proposal to determine if they submitted a “responsive” bid. With regards to the evaluation of bid “responsiveness”, A-C Electric’s bid proposal documents were reviewed and determined that all required forms were submitted and appear to be properly completed. In this regard, A-C Electric’s bid proposal is in conformance with the bidding provisions of the Contract Documents and is a “responsive” bid.

However, as referenced in the attached bid abstract, the bid amount is approximately three times the Engineer’s estimate. In this regard, it is recommended to reject the bid received from A-C Electric.

Sincerely,

Sam Schaefer Enclosure

GEI Consultants, Inc. www.geiconsultants.com 5001 California Avenue, Suite 120 Bakersfield, CA 93309 661.327.7601 fax: 661.327.0173 North Kern Water Storage District Specifications No. NK-612 for Water Delivery Improvements Project Bid Abstract

Bids opened and read publicly after 2:00 p.m. May 29, 2019 at the office of the North Kern Water Storage District A-C Electric Company Engineer's estimate Box 81376 Bakersfield CA 93380 Estimated Item No. Description Unit Unit Price Total Price Unit Price Total Price Quantity BASE CONTRACT Project-Wide Items 1 Mobilization 1 LS$ 315,235.00 $ 315,235.00 $ 23,575.30 $ 23,575.30 2 Demobilization 1 LS$ 69,565.00 $ 69,565.00 $ 15,716.87 $ 15,716.87 3 Environmental Compliance and Permitting 1 LS$ 29,200.00 $ 29,200.00 $ 7,858.43 $ 7,858.43 Subtotal $ 414,000.00 $ 47,150.60 Production Wells $ - PLC - Furnish all labor, materials, and equipment to install and comply with all provisions to 4 1 LS$ 1,545,300.00 $ 1,545,300.00 $ 303,474.01 $ 303,474.01 complete all PLC work in accordance with contract document Radio - Furnish all labor, materials, and equipment to install and comply with all provisions to 5 1 LS$ 139,300.00 $ 139,300.00 $ 210,017.61 $ 210,017.61 complete all Radio work in accordance with contract document Instrumentation - Furnish all labor, materials, and equipment to install and comply with all 6 1 LS$ 1,255,800.00 $ 1,255,800.00 $ 390,650.04 $ 390,650.04 provisions to complete all instrumentation in accordance with contract document Electrical - Furnish all labor, materials, and equipment to install and comply with all provisions 7 to complete all electrical work including trenching, power monitors, CTs, conductors, and 1 LS$ 177,600.00 $ 177,600.00 $ 224,710.20 $ 224,710.20 conduits in accordance with contract document Testing - Conduct electrical, instrumentation, telemetry and PLC equipment testing in 8 1 LS$ 167,500.00 $ 167,500.00 $ 51,856.20 $ 51,856.20 accordance with contract document 9 Record Drawings 1 LS$ 37,200.00 $ 37,200.00 $ 11,523.60 $ 11,523.60 10 OMM (Operation, Maintenance, and Repair Manuals) 1 LS$ 16,200.00 $ 16,200.00 $ 2,880.90 $ 2,880.90 Subtotal $ 3,338,900.00 $ 1,195,112.56 Remote Terminal Units $ - PLC - Furnish all labor, materials, and equipment to install and comply with all provisions to 11 1 LS$ 390,600.00 $ 390,600.00 $ 88,057.38 $ 88,057.38 complete all PLC work in accordance with contract document Radio - Furnish all labor, materials, and equipment to install and comply with all provisions to 12 1 LS$ 37,600.00 $ 37,600.00 $ 62,227.44 $ 62,227.44 complete all Radio work in accordance with contract document Instrumentation - Furnish all labor, materials, and equipment to install and comply with all 13 1 LS$ 35,500.00 $ 35,500.00 $ 63,422.48 $ 63,422.48 provisions to complete all instrumentation in accordance with contract document Electrical - Furnish all labor, materials, and equipment to install and comply with all provisions 14 to complete all electrical work including trenching, conductors, conduits and Solar PV System 1 LS$ 54,700.00 $ 54,700.00 $ 62,056.72 $ 62,056.72 in accordance with contract document Testing - Conduct electrical, instrumentation, telemetry and PLC equipment testing in 15 1 LS$ 37,700.00 $ 37,700.00 $ 15,364.80 $ 15,364.80 accordance with contract document 16 Record Drawings 1 LS$ 12,400.00 $ 12,400.00 $ 3,414.40 $ 3,414.40 17 OMM (Operation, Maintenance, and Repair Manuals) 1 LS$ 12,400.00 $ 12,400.00 $ 853.60 $ 853.60

1 of 2 North Kern Water Storage District Specifications No. NK-612 for Water Delivery Improvements Project Bid Abstract

Subcontractors: W.M Lyles Co, Bid Bond Surety or Sureties: Great American Insurance Company

2 of 2

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: ENGINEERING COMMITTEE Directors Mendes and Andrew, Alternate Ackerknecht

FROM: Richard Diamond and Ram Venkatesan

RE: Approve Waiving Competitive Bidding Requirements for an Emergency Project at the Calloway-CVC Burlington North Santa Fe Railroad Crossing Location

RECOMMENDED MOTION:

“Adopt Resolution No: 19- xx to approve waiving competitive bidding requirements for an emergency project at the Calloway- CVC Burlington North Santa Fe railroad crossing location.”

DISCUSSION:

On May 23, 2019, a hole was discovered below the Burlington North Santa Fe’s (“BNSF”) southern track which is about fifteen feet above the District’s Calloway- CVC intertie pipeline crossing. BNSF staff performed remedial work under the tracks and released the tracks for restricted speed on May 24, 2019. Staff did a preliminary inspection of the hole and found no evidence of a leak from the District’s intertie pipeline. In order to conduct further investigation, staff believes that professional geotechnical consultants and other related professionals should be engaged immediately on an emergency basis. Exhibit “A” is the resolution waiving competitive bidding requirement for the emergency work. Staff recommends the Board adopt the resolution to approve waiving competitive bidding requirements for an emergency project at the Calloway- CVC Burlington North Santa Fe railroad crossing location.

Attachments:

Exhibit “A” – Resolution 19-xx Waiving Competitive Bidding Requirements for an Emergency Project at the Calloway- CVC Burlington North Santa Fe Railroad Crossing Location

BEFORE THE BOARD OF DIRECTORS OF NORTH KERN WATER STORAGE DISTRICT

IN THE MATTER OF: RESOLUTION NO. __-__

APPROVING AND AUTHORIZING FOREGOING AND WAIVING COMPETITIVE BIDDING REQUIREMENTS, AND REQUIRING THAT EMERGENCY WORK AND SERVICES BE PERFORMED AND COMPLETED WITHIN AND AROUND THE DISTRICT’S PIPELINE LICENSE AREA AND BURLINGTON NORTHERN SANTA FE’S RAILWAY FACILITIES IN KERN COUNTY, CALIFORNIA

WHEREAS, on May 23, 2019, a hole was discovered by a trespasser in an area immediately above the District’s intertie pipeline/interties canal crossing, which is located approximately fifteen (15) fee below or underneath the soil where the Burling Norther Santa Fe’s (“BNSF”) railway facilities and right-of-way in Bakersfield, California in the County of Kern (“Area”); and

WHEREAS, upon the discovery of the hole, BNSF undertook, performed, and completed immediate remedial work to address said hole and other related issues in the area of the effected site; and

WHEREAS, the District’s preliminary investigation indicates that: (1) the hole was not the result of any break, crack, wear, tear, and/or destruction to the intertie pipeline located beneath the railway, and (2) hold was not the result of any leakage and/or seepage of water originating from the intertie pipeline; and

WHEREAS, the District has taken reasonable steps to ensure the safety of the Area; and

WHEREAS, in order conduct a further investigation of the Area, the District has determined that professional geotechnical consultants and other related professionals need to be immediately retained, on an emergency basis, in order to further investigate the Area; and

WHEREAS, pursuant to Public Contract Code §§20586 and 22050 et seq., the District has determined that the competitive bidding process would not be in the best interests of the State or the District; and

WHEREAS, pursuant to Public Contract Code §§20586 and 22050 et seq., the District has determined that compliance with the competitive bidding process would be undesirable, impractical, or impossible in light of the subject incident and with respect to addressing other potentially existing issues that could and would pose harm to public health and safety; and

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors: 1. Determines that the foregoing recitals and findings are true and correct, and incorporates them herein by this reference; and

2. Finds and determines that, pursuant to Public Contract Code §§20586 and 22050 et seq., the instant matter constitutes an emergency, and the notice for bids to let contracts will not be given; and

3. Finds and determines that, pursuant to Public Contract Code §§20586 and 22050 et seq., the emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action contemplated and set forth herein is necessary to respond to the emergency;

4. Approves, authorizes, and directs, pursuant to Public Contract Code §§20586 and 22050 et seq., that the District and/or District’s legal counsel take any and all actions to investigate the Area on an emergency basis, including, but not limited to, procurement of necessary equipment, services, and supplies; and

5. Approves, authorizes and directs, pursuant to Public Contract Code §§20586 and 22050 et seq., that the District and/or District’s legal counsel to retain necessary professionals and/or consultants to investigate the Area and take such further actions that are necessary and proper; and

6. Pursuant to Public Contract Code §§20586 and 22050 et seq., the Board of Directors shall review the emergency action at every regularly scheduled meeting after adoption of the resolution until the action is terminated, to determine, whether there is a need to continue the action.

All of the foregoing, being on the motion of Director______and, seconded by Director______, was authorized by the following vote: AYES: NOES: ABSTAINING: ABSENT: I HEREBY CERTIFY that the foregoing resolution is the resolution of said District as duly passed and adopted by said Board of Directors on the ___ day of June 2019. WITNESS my hand and seal of the Board of Directors this ___ day of June 2019.

Secretary of the Board of Directors

[Seal]

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: ENGINEERING COMMITTEE Directors Mendes and Andrew, Alternate Ackerknecht

FROM: Richard Diamond and Ram Venkatesan

RE: Approve Automated Demand Response Program Agreement with Polaris Energy Services

RECOMMENDED MOTION:

“Authorize the General Manger to execute the Automated Demand Response Program Agreement with Polaris Energy Services.”

DISCUSSION:

Pacific Gas and Electric Company’s (“PG&E”) Automated Demand Response Program (“Auto- DR”) provides incentives to program participants for reducing electricity consumption when energy supplies are short. A program event is called when California Independent System Operator (“CAISO”) price for power increases above the event threshold. PG&E then notifies its participants asking them to reduce electricity consumption on program participating facilities.

Polaris Energy Services (“Polaris”) manages programs such as Auto-DR for consumers and helps track usage and incentives from PG&E to the consumers. Polaris did a review of the District’s deep well and lift pumps electricity usage and provided a report that about 34 facilites in the District qualify for this incentive program. Exhibit “A” provides the breakdown of the Auto DR incentives for signing up for the program ($100,000 Initial for NK and $180,000 after the first year).

In addition to the initial incentive through the Auto-DR Program, the District will be eligible for subsequent incentives through the Capacity Bidding Program (“CBP”) based on the District’s performance during an event (see Exhibit “B”). The proposed agreement with Polaris (Exhibit “C”) is for three years with an option to add/subtract/withdraw facilities from the program every month. Staff recommends that the Board authorize the General Manager to execute the Automated Demand Response Program Agreement with Polaris Energy Services.

Attachments:

Exhibit “A” – Auto DR Incentive Breakdown Exhibit “B” – CBP Incentive Breakdown Exhibit “C” – Auto-DR Agreement.

North Kern Water Districct

PGE AutoDR Incentives will be dispersed as follows:

Total AutoDR Incentives = $450,000.00 60% payment = $270,000.00 Polaris Device Cost = $170,000.00 (34 devices X $5k) N. Kern WD 1st Payment = $75,000.00 (After commissioning/enablement is complete) N. Kern WD 2nd Payment = $25,000.00 (After 1yr in DR program not impacted by event performance) N. Kern Total AutoDR Incentive Payment = $100,000.00

 The remaining 40% AutoDR Incentives $180,000.00 is determined by PGE after 1 year of performance in Demand Response program.  Remaining Incentives will be paid out in the same ratio as the 60% payment above once the incentives are determined by PGE.

700 Van Ness Ave, Fresno, CA 93721 (559) 549-4993 Prepared For: Maile Morehart North Kern Water District Senior Account Manager Bakersfield, CA 805-550-0748 [email protected]

Polaris PG&E CBP Financial Analysis Number of N. Kern WD Meters Under Proposal 34 Term of agreement (months) 36

Polaris Program Option CBP Program

Revenue Expected Nomination Capacity Month Max Demand - kW - kW*** $/kW/Month Payment 0 June 23039 1921 $1.94 $3,727 1 July 23039 1405 $8.15 $11,451 2 August 23039 2,229 $11.27 $25,121 3 September 23039 2,290 $6.95 $15,916

Estimated annual payments to N. Kern Water District $56,214 Expected contract payments to N. Kern Water District $168,641

Equipment / Monitoring

Total Polaris Automation Controls (PAC) required 34 Additional Installed Monitoring Equipment: n/a Cost per PAC installation $1,000 Total PAC Costs $0

Program Summary: CBP Program Program Benefits:

Polaris Program Runs from May-October Online Monitoring and Visualization Monthly Nomination Demand Response Dispatch Coaching 1-4 Hour Max Dispatch Duration Penalty Absorption Through Payments 24 Hour Advanced Event Notification Remote Event Curtailment AutoDR Equipment Funds

CBP Program Event History* Year Total Events Total Hours 2018 1 2 Quoted payment is valid for 30 days * Event History reflects CBP for months June-October ** Assuming customer performs as expected in all events *** Demand kW estimated for each month using 2016 & 2017 & 2018 usage data, future payments will be determined by actual shed load kW*** Polaris PG&E CBP Detail Expected Nomination kW Expected Customer Payment

Pump SAID Peak kW Jun Jul Aug Sep Annual Jun Jul Aug Sep 8-21-005 895654402 280 64 42 97 91 $2,188 $125 $339 $1,091 $632 8-21-16 895654439 274 60 37 94 90 $2,104 $116 $302 $1,062 $623 8-05-011 895654756 292 77 56 98 104 $2,426 $149 $456 $1,099 $723 8-05-003 895654776 265 52 38 68 71 $1,675 $101 $313 $769 $492 8-9-9 895654908 280 107 113 107 101 $3,039 $208 $922 $1,209 $700 8-29-14 899972560 272 111 114 105 108 $3,071 $214 $927 $1,179 $750 8-29-39 897108225 90 23 14 40 18 $730 $44 $117 $447 $122 LP/CT2/SH 3981595113 39 10 8 7 9 $224 $19 $69 $73 $63 BPNK-2 BSTR 3981595302 62 12 12 12 13 $353 $23 $101 $139 $90 WELL 7 3981595593 73 15 14 12 15 $383 $29 $111 $139 $104 LP/9-22-CENT RES 3981595799 209 7 7 7 6 $185 $13 $58 $73 $41 SHOP/ FO-3 3981595934 27 8 10 10 8 $264 $16 $79 $110 $59 LP/9-00-119 RES 3981595966 93 22.75 14.3 19.5 17.55 $395 $97 $61 $83 $75 BPNK2 BSTR 3981595968 44 6.5 6.5 9.75 11.05 $187 $28 $28 $41 $47 99-0-18 5908035058 312 87.1 61.75 56.55 101.4 $1,326 $370 $262 $240 $431 99-2-24 5908035191 307 113.75 65.65 96.2 89.05 $1,305 $483 $279 $409 $378 99-0-035 5908035267 240 68.25 52 59.15 64.35 $1,020 $290 $221 $251 $273 99-0-026 5908035418 134 33.8 28.6 26.65 30.55 $570 $144 $122 $113 $130 SE SE 25 28 26 METER 0591 5908035419 7379 69.55 53.3 92.95 93.6 $1,315 $296 $227 $395 $398 99-2-8 5908035579 345 95.55 78 80.6 117.65 $1,466 $406 $332 $343 $500 88-0-27 5908035671 328 85.8 40.3 126.1 124.8 $1,394 $365 $171 $536 $530 99-0-032 5908035690 137 37.7 29.9 28.6 30.55 $582 $160 $127 $122 $130 27-28-26 5908035734 399 69.55 45.5 74.75 80.6 $1,696 $296 $193 $318 $343 99-2-6 5908035815 298 78.65 58.5 65 92.95 $1,267 $334 $249 $276 $395 99-4-6 5908035844 310 70.85 47.45 72.15 65.65 $1,318 $301 $202 $307 $279 8-0-13 9525882015 637 77.35 55.9 102.7 99.45 $2,707 $329 $238 $436 $423 8-0-26 9525882243 287 79.3 55.25 99.45 101.4 $1,220 $337 $235 $423 $431 8-00-085 9525882277 307 62.4 44.85 96.85 88.4 $1,305 $265 $191 $412 $376 88-00-062 9525882473 274 34.45 0 85.15 67.6 $1,165 $146 $0 $362 $287 8-0-29 9525882537 316 85.15 58.5 108.55 108.55 $1,343 $362 $249 $461 $461 8-00-059 9525882540 1114 117 81.25 146.25 145.6 $4,735 $497 $345 $622 $619 88-0-88 9525882547 207 27.3 24.05 50.05 50.05 $880 $116 $102 $213 $213 Polaris PG&E CBP Detail Expected Nomination kW Expected Customer Payment

Pump SAID Peak kW Jun Jul Aug Sep Annual Jun Jul Aug Sep SW NW 19 27 26 METER 6577 9525882788 257 53.3 37.7 76.05 76.05 $1,092 $227 $160 $323 $323 88-1-13 5908035751 7151 94.25 70.2 80.6 101.4 $1,473 $401 $298 $343 $431 AUTOMATED DEMAND RESPONSE (AUTO-DR) PROGRAM CUSTOMER PARTICIPATION AGREEMENT

This Customer Participation Agreement (“Agreement”) is made and entered into on (the “Effective Date”) between Polaris Energy Services, LLC. (“Polaris”), and ______North Kern Water____ District______(“Customer”). Polaris and Customer are defined herein each as a “Party” and collectively, as the “Parties” to this Agreement.

WHEREAS, Customer has designated Polaris as the Project Sponsor on the Pacific Gas & Electric Company (PG&E) PG&E 2016 Program Application “Customized Incentives and Automated Demand Response Incentive Program” Form.

NOW, THEREFORE, the Parties, intending to be legally bound, hereby agree as follows:

1. Term. This Agreement shall commence on the Effective Date and end on ______(the “Term”).

2. Program Description. PG&E’s automated demand response incentive program (the “Auto- DR Program”) is designed to provide designated incentive funds to subsidize hardware and software installation costs incurred by Customer in connection with system upgrades that enable Customer’s participation in the DR Program via automated load reduction strategies. Customers participating the Auto-DR Program are eligible for customized services that include: Project Management, Aggregator Services and Equipment Installation.

a. Project Management is comprised of services to Customer and are offered to ensure the successful implementation of the Auto-DR Measures (as defined on Attachment A). b. Aggregator Services are comprised of services to Customer and are designed to procure communications hardware and software from the Aggregator that will support the enablement of Customer in the Auto-DR Program. c. Equipment Installation incentive shall be for the reimbursement of costs associated with the design, procurement, and installation of the Auto-DR Measures.

PG&E Auto-DR incentive funds are paid on a first-come, first-served basis until funds are depleted.

3. Auto-DR Measures. a. Auto-DR Measures. Prior to the enablement of the Auto-DR Measures, Customer agrees to work with Polaris to perform a site survey in order to (i) conduct a pre-installation inspection to verify the existence of the operating technology, (ii) identify potential cost effective demand response strategies and implementation specifications, and (iii) analyze pre- installation energy usage. Based on the foregoing site survey, Polaris shall submit to Customer an Auto-DR Measure enablement plan in the form of Attachment A (the “Enablement Plan”), which identifies the Auto-DR Measures, estimated demand savings and project costs. Implementation. The Customer must complete the implementation of the Auto-DR Measures no later than 180 days after the Application is approved by PG&E.

Customer hereby acknowledges and agrees that all costs associated with the design, procurement and implementation of the Auto-DR Measures are the sole responsibility of Customer. Auto-DR Measures include equipment, hardware, software and services procured by Customer to automate load shed and exclude costs incurred by Polaris to fulfill its obligations under this agreement.

Copyright 2016 Polaris Energy Services, LLC Polaris, acting as the Project Sponsor, applies for Auto-DR Program incentive funds by submitting the PG&E 2016 Program Application “Customized Incentives and Automated Demand Response Incentive Program” (Attachment B). Customer further acknowledges that its Project Sponsor shall receive an incentive for the implementation of the Auto-DR Measures upon validation and approval of such measures by PG&E.

4. Site Access. Upon reasonable prior notice and during normal working hours, Customer agrees to grant Polaris, and its’ representatives access to Customer facilities in order to perform the pre-installation and post-installation site inspections in connection with the implementation of the Auto-DR Measures.

5. Customer Representations and Warranties. Customer represents and warrants as of the Effective Date and throughout the Term of the Agreement that: a. Customer is a PG&E customer with an active electrical 15-minute-interval meter and has electric capacity equal to or greater than 200 kW. b. Customer is enrolled in, or in the process of enrolling in the DR Program and upon installation of the Auto-DR Measures, Customer agrees to maintain and operate the Auto-DR Measures in a qualifying DR Program for thirty-six months following implementation of the Auto-DR Measures. c. Customer will comply with the PG&E rules and regulations governing the Auto-DR Program (the “Program Rules”) and further acknowledges and agrees that failure to abide by the Program Rules, including failure to maintain and operate the Auto-DR Measures in accordance with Section 5(b) hereof, may require Customer to refund to PG&E up to 40% of the Incentive Payments (as defined below). d. Customer has not already received incentives or services (excluding tax credits available under the Energy Policy Act of 2005) for the Auto-DR Measures and Customer agrees not to apply for or receive incentives or services for the Auto-DR Measures from another utility, state, or local program.

6. Payment Terms. a. Eligible Incentive Payments. Polaris will reimburse Customer or its third party contractors in proportion to the measures and costs specified in the Enablement Plan in the form of Attachment A (“Incentive Payments”); provided that total Incentive Payments for installed Auto-DR Measures shall not exceed 100% of the automated demand response project costs. If PG&E determines that Attachment A Measures do not qualify and PG&E lowers the load shed kW amount and incentives, then all parties (Customer, Polaris, third party contractors) will proportionally share in that lower incentive amount. Notwithstanding anything contained herein to the contrary, Customer may request in writing to Polaris that a portion of the Incentive Payment be made directly to a third party contractor that performed all or some of the on-site work in connection with the installation of the Auto-DR Measures; provided that in exchange for such payment, Customer hereby acknowledges that Polaris’ payment obligations pursuant to this Agreement are hereby fully and completely discharged and Customer absolutely and unconditionally hereby release, remises, discharges and holds harmless Polaris from any and all actions or causes of action, claims, liabilities, damages, controversies, judgments, rights and demands, whether existing or contingent, known or unknown, with respect to such payments. b. Payment Timing. Polaris shall make all payments associated with Customer’s participation in the Auto-DR Program to Customer or third party contractors within forty- five (45) days of Polaris’ receipt of total payment from PG&E. c. Tax Reporting. For incentive payments made to Customer or third party contractor of the PG&E Auto-DR Program by Polaris, Polaris will require participants to complete a W-9 form. A copy of the W-9 form is included in Attachment C, attached hereto. Based upon the W-9 information received, Polaris shall file an IRS Form 1099 for all non-corporate entities who receive payment from Polaris that exceeds $600 annually. For corporate entities, if requested by the program participant, Polaris shall report payments that exceed $600 annually.

7. CPUC Required Disclosure Statement. California consumers are not obligated to purchase any full fee service or other service not funded by the Auto-DR Program. The Auto- DR Program is funded by the California utility ratepayers and administered by PG&E under the auspices of the CPUC.

Los consumidores en California no están obligados a comprar servicios completos o adicionales que no estén cubiertos bajo este programa. Este programa está financiado por los usuarios de servicios públicos en California bajo la jurisdicción de la Comisión de Servicios Públicos de California (CPUC).

8. General Terms. a. Indemnification. Each party shall indemnify the other for any losses or damages brought or incurred, to the extent resulting from (i) any third party claims due to any bodily injury, death or damage to tangible personal property to the extent caused by the negligent acts or omissions of the indemnifying party or its employees in the performance of this Agreement, except to extent that the losses or damages arise from the other party’s negligence or willful misconduct and (ii) any material breach of the representations, warranties, covenants and obligations of the indemnifying Party under this Agreement. The indemnifying party will pay reasonable legal fees as incurred and such damages or costs as are finally awarded against the indemnified party or agreed to in settlement for such claim provided that the indemnified party gives the indemnifying party (i) prompt written notice of any such claim or threatened claim, (ii) sole control of the defense, negotiations and settlement of such claim, and (iii) full cooperation in any defense or settlement of the claim. b. Limitation on Liability. Polaris’ liability hereunder is limited to direct actual damages as the sole and exclusive remedy, and total damages shall not exceed the amounts paid to Polaris under this Agreement. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES. In no respect shall Polaris incur any liability, damages, or fines resulting from, but not limited to, direct, indirect, special, or consequential local, state and federal code violations or regulations, resulting from the implementation of any Auto-DR Measures. c. Compliance with Laws. Polaris agrees to comply with all federal, state, and municipal laws, ordinances, rules, orders, and regulations, which apply to its actions at the facility or to the project. d. Survival of Obligations. The respective obligations of the Parties under this Agreement that by their nature would continue beyond the termination, cancellation or expiration, shall survive any termination, cancellation or expiration, including, but not limited to, obligations to indemnify and covenant contained in Section 5(b) e. Notices. Any notices required pursuant to this agreement shall be served at the following addresses. Customer Polaris Energy Services, LLC

Name: Ram Venkatesan, PE Name: Maile Morehart Title: District Engineer Title: Senior Account Manager Company: North Kern Water District Company: Polaris Energy Services Address: 33380 Cawelo Ave. Address: 415 N. Ranch St Bakersfield, CA 93312 Visalia, CA 93291 Phone: (661) 393-2696 Phone: 559-360-4911 Email: [email protected]

IN WITNESS WHEREOF, Polaris and Customer have executed this agreement on the day and year first set forth above.

Customer

Signature: ______Date: ______

Print Name: ______Ram Venkatesan, PE

Polaris Energy Services, LLC

Signature: ______Date: ______

Print Name: ______Nic Stover, CEO Last Four SAID PUMP NAME 4756 8-05-011 4439 8-21-16 4402 8-21-005 4908 8-9-9 2560 8-29-14 8225 8-29-39 5058 99-0-18 5815 99-2-6 5734 27-28-26 2473 88-00-062 2547 88-0-88 5968 BPNK2 BSTR 2243 8-0-26 2277 8-00-085 SW NW 19 27 26 2788 METER 6577 5934 SHOP/ FO-3 5799 LP/9-22 CENT RES 5113 LP/CT2/SH 5966 LP/9-00-0119 RES 5302 BPNK2 BSTR 2015 8-0-13 2537 8-0-29 5593 WELL 7 4776 8-05-003 5267 9-0-035 5690 99-0-032 5418 99-0-026 5191 99-2-24 SE SE 25 28 26 5419 METER 0591 5844 99-4-6 5579 99-2-8 5671 88-0-27 5751 88-1-13 2540 8-00-059

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: GROUNDWATER COMMITTEE Directors Fornoff and Andrew, Alternate Mendes

FROM: Richard Diamond

RE: Approve Documents with Respect to Management of “White Areas” for the Sustainable Groundwater Management Act

RECOMMENDED MOTION:

“1. Adopt the “Sustainable Groundwater Management Act Management Agreement” (subject to necessary revisions for unique circumstances) and authorize management and staff to identify owners of White Lands in the vicinity of North Kern and work with the owners of those Lands to enter into this agreement; 2. Authorize execution of the “Sustainable Groundwater Management Act Jurisdiction Agreement” between the Kern Groundwater Authority and North Kern; 3. Authorize execution of the “Kern Groundwater Authority for the Tulare Lake Basin Portions of Kern County Second Amended and Restated Joint Powers Agreement”.”

DISCUSSION:

The attached memo from Young Wooldridge (Exhibit “A”) outlines Kern Groundwater Authority activities and agreements to address the lack of coverage of undistricted or “White” lands under SGMA (and the threat that the Kern Subbasin could be put into probationary status and subject to the jurisdiction of the State Water Resources Control Board), and recommends that the actions in the recommended motion above be taken by North Kern.

Attachments: Exhibit “A”: Memorandum from Young Wooldridge: “White Lands Management Update – Preparation for June Board Meeting (June 4, 2019)

THE LAW OFFICES OF

A Limited Liability Partnership • Est. 1939

MEMORANDUM

TO: Client Districts: Kern Groundwater Authority Members

FROM: Scott Kuney, Steve Torigiani, Alan Doud

DATE: June 4, 2019

RE: WHITE LANDS MANAGEMENT UPDATE—PREPARATION FOR JUNE BOARD MEETING

I. Background

Over the course of the past few weeks the Board of Directors of the Kern Groundwater Authority (KGA) has approved a number of agreements intended to be entered into by and among landowners, districts, and the KGA. These agreements represent the efforts of the KGA and its members to address the lack of coverage of undistricted or “White” Lands under the Sustainable Groundwater Management Act (Water Code § 10720 et seq.) (“SGMA”) in portions of the Kern Subbasin. If we do not achieve the coverage required under SGMA, the entire Kern Subbasin could be put into probationary status and subject to the jurisdiction of the State Water Resources Control Board and any enforcement measures it deems necessary.

II. Agreements and Action Items

Among the agreements and forms of agreements that the KGA board has approved are:

1. A letter from the KGA to all owners of White Lands, irrigated and non-irrigated, alike. (See Exhibit “A”.)

No Action Necessary

2. Related to Item 1 above, the “Sustainable Groundwater Management Act Management Agreement” (the “Management Agreement”), which provides for district-level, Chapter GSP coverage for White Lands. (See Exhibit “B”.)

Action Item: If your Board has not already done so, we recommend your Board (i) adopt this form of agreement (subject to necessary revisions for unique circumstances), and (ii) authorize management and staff to identify owners of White Lands in the vicinity of your district and work with the owners of those Lands to enter into this agreement.

3. The “Sustainable Groundwater Management Act Jurisdiction Agreement” (the “Jurisdiction Agreement”) between the KGA and a member District, pursuant to which the KGA provides SGMA jurisdiction to White Lands whose owners enter into a Management Agreement with the District . (See Exhibit “C”.)

Action Item: If your Board has not already done so, we recommend your Board authorize execution of this form of agreement. If the District enters into a Management Agreement or Agreements, the District will need to execute the Jurisdiction Agreement with the KGA.

4. An indemnification agreement between the KGA and the Kern County Water Agency (Agency), pursuant to which the KGA would indemnify the Agency as it pertains to the Agency’s role in extending SGMA jurisdiction to White Lands. (See Exhibit “D”.)

No Action Necessary

5. Second Amended and Restated KGA Joint Point Powers Agreement (“JPA”), which amends the JPA to provide for the Agency’s qualified provision of SGMA jurisdiction to cover White Lands whose owners enter into a Management Agreement. It also reflects the withdrawal of the County of Kern from the KGA. (See Exhibit “E”.)

Action Item: We recommend your Board authorize execution of the Second Amended and Restate KGA JPA. The signature block is on Page 16 of the JPA.

III. Additional Considerations

It is our opinion that the more uniform we are in our approach to the letter and all of the agreements referenced above, the more likely we are to be successful in complying with SGMA and preventing State Board intervention. To that end we strongly advise that you not negotiate any amendments to any of these Agreements except as might be absolutely necessary to conform the Agreement to the particular needs of the District or the Landowner.

Please note that all of these agreements have been carefully considered and drafted cooperatively by and among the KGA and its members, including the Agency, with the goal of ensuring that all indemnification obligations ultimately rest with owners of White Lands. Exhibit “A”

Form of Notice Letter and Attachment

May 31, 2019

Landowner

Re: Sustainable Groundwater Management Act Compliance and Coverage

Dear Landowner,

The Sustainable Groundwater Management Act (SGMA) went into effect on January 1, 2015 and requires the formation of Groundwater Sustainability Agencies (GSA) to sustainably manage all groundwater basins in California including the Kern Sub-Basin. SGMA authorizes public agencies with land use or water management authority to become a GSA and manage groundwater. If no agency or group of agencies elects to be a GSA for the entire basin, SGMA designates the county as the default GSA to manage groundwater sustainably for the unmanaged lands in the basin. If the county declines to act as the GSA, SGMA requires the unmanaged lands report groundwater pumping directly to the State Water Resources Control Board and pay applicable fees.

The Kern Groundwater Authority (KGA) was formed on April 26, 2017 by several public agencies, which included the County of Kern, through a joint power agreement (JPA). Pursuant to the JPA and SGMA requirements, each member district of the KGA is responsible for the management of the groundwater within its respective jurisdiction and the County was responsible for managing groundwater in the areas not otherwise included in the jurisdiction of a member district (“undistricted lands”).

On December 11, 2018, Kern County Board of Supervisors voted to withdraw from the KGA and stated that it would no longer manage groundwater in the undistricted lands of the Kern Sub-Basin. The County sent a notice of withdrawal to the KGA dated December 12, 2018. However, the County did not provide written notice to the affected landowners regarding its withdrawal from the KGA or of its decision to not provide SGMA coverage to those landowners not within the jurisdiction of a member district.

In response to the County’s withdrawal, the KGA and its members have been working diligently to provide a means for those undistricted lands to have SGMA coverage. Accordingly, the KGA and its member districts are allowing landowners in these areas the opportunity to sign up to be managed by neighboring KGA member districts. Landowners who do not sign up with KGA member districts will be removed from the KGA GSA boundary and will be designated as unmanaged by the State Water Board.

You are receiving this letter because your property, or a portion thereof, has been identified as unmanaged land due to the County’s action to withdraw from the KGA and by its decision to no longer provide SGMA management. This letter provides you notice that the opportunity to obtain coverage through the KGA will be closed on July 1, 2019. If you would like to avoid being designated as unmanaged by the State Water Board (see attachment 1 [State Water Board unmanaged notice]), please contact the KGA member closest to your property (see attachment 2 [Kern Basin Map]) and execute the necessary management documents by July 1, 2019. If you have questions regarding this notice, please contact Patty Poire at 661-479-7171.

Respectfully, Kern Groundwater Authority

DATE Mailing ID #: «Mailing_ID»

«OWNER_FIRST» «OWNER_LAST» «CO» «CARE_OF» «ADDRESS» «UNIT» «UNIT_NUMBER» «CITY», «STATE» «ZIP»«Dash»«ZIP4»

NOTICE OF GROUNDWATER EXTRACTION REPORTING UNDER THE SUSTAINABLE GROUNDWATER MANAGEMENT ACT (SGMA).

AVISO DE ENVIAR REPORTE(S) SOBRE EXTRACCIÓN DE AGUA SUBTERRÁNEA REQUERIDO POR LA LEY DE GESTIÓN SUSTENTABLE DEL AGUA SUBTERRÁNEA (SGMA)

This letter requires your immediate attention. This letter provides notice that you may be required to file one or more groundwater extraction reports with the State Water Resources Control Board (Board) pursuant to the Sustainable Groundwater Management Act (SGMA). Failure to file a required report may result in penalties of up to $500 per day.

Para obtener más información en español (formularios u otra información), nos puede llamar al (916) 322-6508 o enviar un mensaje a: [email protected].

Why you are receiving this notice

This Notice is being sent to persons who may own property or operate a public water supply system in an unmanaged area where groundwater was extracted on or after DATE through DATE. An unmanaged area is an area within a high- or medium-priority groundwater basin that is outside the jurisdiction of any groundwater sustainability agency (GSA) and not subject to an alternative or other exemption from SGMA requirements.

Data indicate that you own or are responsible for the parcel(s) or public water supply system(s) listed at the end of this notice. The Board has identified this parcel(s) or water supply system(s) as located within an unmanaged area. If you extract groundwater from an unmanaged area and you are not a small domestic user, SGMA requires that you file an annual groundwater extraction report for extractions made during the previous water year.

zAddressee - 2 - [zDate]

How to comply

Groundwater extraction reports must be filed with the Board through the online Groundwater Extraction Report website by December 15. You can access the website at www.waterboards.ca.gov/water_issues/programs/gmp/reporting.html. The filing fee for a groundwater extraction report is available at https://www.waterboards.ca.gov/water_issues/ programs/gmp/fees.html. Filing fees must be paid to the Board by DATE.

How to notify the Board if you believe you are not subject to SGMA reporting requirements

You can file an online form through the Groundwater Extraction Report website to notify the Board that you meet one of the following conditions:

• You do not own any of the parcels identified in the notice. • You do not own or operate a well. • You are a small domestic well user using less than two acre-feet for domestic purposes. • You plan to report extractions to the Division of Water Rights’ Groundwater Recordation Program.

If you are not required to report, you will not be charged a filing fee for submitting the form.

Late filing and failure to file a Report

If you are required to file a groundwater extraction report and file after December 15, you will incur a late fee of $100 plus an additional late fee of $100 for each 30-day period that the report is late, pursuant to Section 1040, Chapter 4.5, Division 3, Title 23, of the California Code of Regulations. Failure to file a required groundwater extraction report may result in penalties of up to $500 per day pursuant to Section 5107 of the Water Code.

Resources to assist in completing the online Groundwater Extraction Report

Unmanaged Area Identification Map

The Board has developed an interactive map that shows the areas identified by the Board as unmanaged as of September 4, 2018. You will find more information and access to the map at www.waterboards.ca.gov/gmp.

Groundwater Extraction Report Guidance and FAQ

Guidance documents and answers to frequently asked questions are available online at www.waterboards.ca.gov/water_issues/programs/gmp/reporting.shtml.

Additional information

This notice is provided for your information and is not an order or final action of the Board. The Board will not consider the filing of a groundwater extraction report as an admission by you that the report is required or as a waiver of the procedures for reconsideration that are available to you, including the opportunity to file a petition for reconsideration of fees pursuant to section 1045 of Chapter 4.5, Division 3, Title 23, of the California Code of Regulations. zAddressee - 3 - [zDate]

If you have questions regarding this notice or need assistance completing the online groundwater extraction report, please contact Board staff by email at [email protected] or by phone at 916-322-6508.

Enclosures: Groundwater Extraction Report Quick Guide

The following Assessor’s Parcel Numbers (APN) prompted this letter:

«APN_1» «APN_2» «APN_3» «APN_4» «APN_4» «APN_5» «APN_6» «APN_7» «APN_8» «APN_9» «APN_10» «APN_11» «APN_12» «APN_13» «APN_14» «APN_15» «APN_16» «APN_17» «APN_18» «APN_19» «APN_20»

Exhibit “B”

Form of Sustainable Groundwater Management Act Management Agreement

Sustainable Groundwater Management Act Management Agreement with ______District

This Sustainable Groundwater Management Act Management Agreement with ______District (“Agreement”) is made and entered into this ___ day of ______, 2019, by and between the ______District, (“District”) and ______(“Landowners”). District and Landowner are sometimes each individually referred to herein as a “Party” and collectively as the “Parties.” RECITALS WHEREAS, Landowner is an individual, or authorized agent of an entity, owning real property in Kern County, California (“Landowner Land”) located outside of the District’s boundaries, which is described on Exhibit A and generally shown on Exhibit B, attached hereto and incorporated by reference. WHEREAS, District is a ______District comprising approximately ______acres situated in Kern County. WHEREAS, the Sustainable Groundwater Management Act (“SGMA”) provides that all basins designated as critically overdrafted high-priority basins shall be managed under a Groundwater Sustainability Plan (“GSP”) or a coordinated GSP by January 31, 2020. WHEREAS, the Landowner Land is overlying the Kern County Sub-basin (Basin Number 5-022.14, DWR Bulletin 118) within the San Joaquin Valley Groundwater Basin (“Basin”), a DWR designated high-priority and critically overdrafted basin and, therefore, the Basin, and all portions thereof, must be managed by a local agency under a GSP by January 31, 2020. WHEREAS, SGMA allows local agencies to become a groundwater sustainability agency (“GSA”) to engage in the sustainable management of groundwater pursuant to the provisions of SGMA. Private landowners, either individually or collectively, are not local agencies under SGMA, and therefore cannot be members of a GSA. WHEREAS, District is currently a member of the Kern Groundwater Authority (“KGA”), under which the District will work collaboratively with other interested local agencies to develop and implement a GSP to manage a portion of the Basin. WHEREAS, with respect to SGMA jurisdictional considerations, the Landowner Land is currently within the jurisdictional boundaries of the KGA. WHEREAS, the KGA is organizing its GSP in chapters that generally align with district boundaries and that prescribe the management actions to be taken by said districts to comport with the requirements of SGMA. Each chapter will be developed by one or more local agencies that are members of the KGA. In order to comply with SGMA, the KGA will facilitate the District’s GSP coverage for lands located in close proximity to their jurisdictional boundaries. WHEREAS, Landowner desires to be included in the chapter to be developed by the District (the “District’s GSP Chapter”) to afford GSP coverage to the Landowner Land. In this respect, Landowner is willing to provide local information and assistance to the development of the GSP that is ultimately adopted by the KGA that will manage the Landowner Land under SGMA. Thus, the Landowner enters into this Agreement for the purpose of enabling Landowner SGMA coverage for its land through the District’s GSP Chapter. WHEREAS, the Landowner will provide information for its respective real property and funding for the process for the District to include the Landowner Land within the District’s GSP Chapter. The approval of any GSP governing the Landowner Land will ultimately lie with the District, the KGA and the State of California, which will consider the completeness and effectiveness of the GSP to be developed under SGMA. Due to the mandated deadlines of SGMA and its associated regulations, the District will initiate proceedings to amend the area to be covered by District’s GSP Chapter to include Landowner Land, but must also concurrently continue preparation of the District’s GSP Chapter, and thus, the Landowner consents to be included in the District’s GSP Chapter as herein provided. To the extent the District incurs any additional cost to include Landowner Land in its GSP Chapter, such fees or costs shall be borne solely by the Landowner and paid promptly upon being invoiced by either the District or by such consultants directly. The GSP, after being approved and agreed to by the KGA and ultimately the State of California, shall be managed by the District and/or KGA. WHEREAS, the Landowner shall be independently responsible to provide information and funding at the request of the District to maintain and support the efforts to include the Landowner Land within the District’s GSP Chapter. WHEREAS, the Parties do not intend that the inclusion of the Landowner Land within the District’s GSP Chapter, or that this Agreement in any way provides Landowner Land with a right to any portion of the water supplies of the District. WHEREAS, the KGA has entered or will enter into Agreements to indemnify its members against liability from or related to the provision of KGA jurisdiction over Landowner Land. KGA and the District also have entered or will enter into agreements in which the District will indemnify the KGA for provision of jurisdiction to manage Landowner Land. This Agreement and the indemnity provided by the Landowner to the District is intended to include, either through direct indemnification, or otherwise by passing through the indemnification provided herein, the KGA and its members. NOW, THEREFORE, in consideration of the foregoing Recitals and the following terms and conditions, it is agreed by and between the Parties as follows: I. PURPOSE OF AGREEMENT The Parties enter into this Agreement solely for the purpose of providing the Landowner with a process to attempt to comply with SGMA through the inclusion of the Landowner Land within the District’s GSP Chapter. Neither the District nor any landowners within the District’s current boundaries are committing anything to the Landowner Land except for the inclusion of the Landowner Land within the District’s GSP Chapter, provided that all Landowners comply with the terms of this Agreement. This Agreement is intended to form the basis of the Parties’ understanding regarding the terms and conditions of including the Landowner Land within the District’s GSP Chapter, and their individual rights and responsibilities subsequent to such inclusion. II. TERMS AND CONDITIONS OF INCLUDING LANDOWNER LAND WITHIN THE DISTRICT’S GSP CHAPTER 1. Commitment to Include Landowner Land in District’s GSP Chapter. The District hereby agrees to make reasonable efforts to include the Landowner Land within the District’s GSP Chapter, and the Landowner hereby agrees for the Landowner Land to be included within the District’s GSP Chapter, and Landowner consents to jurisdiction of the District and the KGA to adopt and implement a GSP including the Landowner Land, provided that such inclusion is approved by all necessary governmental bodies and the Parties have complied with all provisions of this Agreement. In that regard, a condition precedent to this Agreement becoming and remaining effective is that KGA maintain SGMA jurisdiction over the Landowner Land. Landowner acknowledges that there might be additional reporting requirements, monetary charges, or compliance measures imposed upon Landowner in connection with SGMA by the California Department of Water Resources (“DWR”), the State Water Resources Control Board, the courts, or other agencies or bodies with the authority to enforce terms and conditions of SGMA separate from the District under this Agreement. Landowner acknowledges and agrees that the District has no duty under this Agreement to prevent such compliance measures from being imposed on Landowner.

2. Regulation Contingent on Funding. The District and the Landowner acknowledge that funding for the District’s efforts hereunder shall be provided on a long-term basis, if possible, through the development and subsequent payment by the Landowner of a land-based assessment and/or water charge as authorized by SGMA or other legally authorized fee or funding mechanism (“Charges”). Prior to the establishment of said Charges, the Landowner acknowledges and agrees that the District’s inclusion of the Landowner Land within the District’s GSP Chapter, and the District’s efforts to include the Landowner Lands within the District’s GSP Chapter pursuant to this Agreement, are contingent upon Landowner’s regular and timely payment of (1) the general administrative expenses of the District that are attributable to the District’s efforts hereunder, (2) the Landowner’s pro-rata share of costs for consultants retained by the District for the purposes of developing or implementing the District’s GSP Chapter, and (3) any administrative or other costs the District incurs in implementing SGMA and coordinating with the KGA (or other GSA’s) for SGMA purposes concerning the Landowner Land.

Upon final execution of this Agreement, District shall bill and Landowners shall pay the District $______per acre of Landowner Land as an initial payment to fund the District’s (and necessary consultants’) efforts made pursuant to this Agreement, and any other activities related to the GSP processes. 3. Determination of Funding Obligation. The amount of any additional payments required for Charges and/or services rendered by the District or others for the purposes of fulfilling the obligations set forth herein, or the formula for the calculation of such payments, and the method of such payments, shall be determined by the District, in consultation with the Landowner. Notwithstanding any provision of law, the Landowner consents to a fee, charge and/or assessment being levied on Landowner Land for such Charges.

4. Failure to Satisfy Funding Obligation & GSP Requirements. Landowner acknowledges and agrees that if, for any reason, the Landowner refuses or otherwise fails to remit any payment required hereunder, in the amount and using the method determined and requested by the District, or fails to comply with the requirements of the GSP and its management and regulation, (“Defaulted Landowner”) the District:

(a) shall be relieved of any and all obligation to proceed with including the Defaulted Landowner’s Land within the District’s GSP Chapter; and (b) shall be relieved of any and all obligation to provide the services and obligations enumerated in this Agreement to a Defaulted Landowner; and (c) may, in its sole and absolute discretion, seek to remove the Defaulted Landowner’s Land from the District’s GSP Chapter, at Defaulted Landowner’s expense, and in such event the Defaulted Landowner agrees to obtain regulation under SGMA by some other method separate and apart from the District pursuant to the terms for a withdrawing Landowner set forth in Paragraph 8 of this Agreement; and (d) shall have no obligation to reimburse Landowner for any Charges paid to date. 5. No Protest in Case of Removal of Defaulted Landowner Land; Duty to Cooperate. Landowner hereby agrees that, if the Landowner breaches the terms of this Agreement, including but not limited to, by refusing or failing to remit any payment required herein, following thirty (30) days written notice of alleged breach and Defaulted Landowner’s failure to timely cure such breach, the District, may in its sole and absolute discretion, seek to remove the Defaulted Landowner’s Land, at the Defaulted Landowner’s expense, from the District’s GSP Chapter, and if the District does so, the Landowners shall not lodge any protest, participate in any protest hearing, or act in any way to influence the outcome of the District’s decision, and District shall have no further obligation to Landowner to provide any services hereunder.

6. Disclaim Water Rights. Landowner expressly disclaims any right to any District water supplies (surface or groundwater) other than through any future negotiated purchase, transfer, or exchange any Landowner has obtained or may obtain wholly outside of this Agreement and not related to this Agreement. Landowner understands and agrees that as a result of the foregoing disclaimer, among other things, inclusion of the Landowner Land within the District’s GSP Chapter will not entitle the Landowner to receive any portion of the District’s water supply or other District assets. Landowner further understands and agrees the sole purpose of this Agreement is to provide the Landowner a process to obtain coverage by the KGA GSP, and thus, SGMA compliance for the Landowner by affording Landowner the benefit of inclusion within the District’s GSP Chapter. Any GSP must ultimately be approved and agreed to by the District and thereafter by the KGA and such GSP shall be solely managed and regulated by the KGA and/or the District, supported in part by information and funds provided by the Landowner. The Landowner further understands and agrees that any other benefits accruing to the Landowner Land and/or to Landowner as a result of this Agreement are purely incidental and shall not give rise to any expectation, entitlement, or right to District water supplies or assets of any kind, including, but not limited to, Kern River water, State Water Project water, Central Valley Project water, carryover supplies, supplies from any lake, river, stream, creek, manmade conveyance, or aquifer that the District purchases, acquires, transfers, exchanges, takes receipt of or otherwise controls, including groundwater supplies or any return flows that may enter the underground aquifer as a result of delivery within District of any of the foregoing water supplies, or any District banked supplies including banking losses of water management programs, or any other designation or classification of District water whatsoever, whether in existence at the time this Agreement is executed or created at some future time. Other than the reservations noted above, nothing in this Agreement is intended to limit current or future groundwater rights of the Landowner beyond that imposed by operation of law; provided, however, the Landowner recognizes that with no imported supplemental surface water supply presently available to Landowner Land, either provided directly by the District or other sources, or indirectly through the District’s project, and through the approved GSP, the Landowner’s ability to pump groundwater for use upon Landowner Land in the future may be limited.

7. No Voluntary Consent. Once the Landowner Land is included within the District’s GSP Chapter and the GSP is adopted by the KGA and approved by DWR, the Landowner hereby agrees not to consent to the inclusion of any portion of the Landowner Land within another chapter of the KGA GSP developed by any entity other than the District without the District’s express prior written consent. It is noted that District has the option as a KGA member district to withdraw from KGA and develop its own GSP.

8. Withdrawal of Landowner. Until the GSP is adopted by the KGA and approved by DWR, the Landowner may elect to withdraw from this Agreement and be excluded from the District’s GSP Chapter, and instead be included within another chapter of the KGA GSP developed by another member of the KGA or otherwise seek alternative lawful SGMA compliance, by providing written notice to the District. If Landowner elects to withdraw, then the Landowner shall be responsible for advance payment of all costs and obligations associated with the withdrawal, including but not limited to, any amendments or revisions of the District’s GSP Chapter or the KGA GSP required to maintain compliance with SGMA in the event of their withdrawal. The District may impose additional requirements upon any withdrawing Landowner, to ensure compliance with SGMA, the GSP Chapter or the KGA GSP, and to satisfy any financial obligations resulting from the withdrawal of such Landowner. Upon withdrawal, the Landowner shall arrange for the withdrawn lands to be covered by another chapter of the KGA GSP developed by another member of the KGA or otherwise seek alternative lawful SGMA compliance, so that such lands of the withdrawing Landowner would continue to be compliant with SGMA. Any withdrawal from the District’s GSP Chapter shall not be effective unless and until the withdrawing landowner has made such arrangements and the alternative means of SGMA compliance is effective for such lands of the withdrawing Landowner.

9. Covenant Not to Sue or Contest. In consideration of the District’s inclusion of Landowner Land into the District’s GSP Chapter, Landowners shall not (1) sue or take any judicial or administrative action against the District, the KGA, or any other KGA member for any claims related to the KGA GSP or SGMA, or (2) contest or challenge, directly or indirectly, the District GSP Chapter or KGA GSP, as adopted and as may be amended. The Landowner acknowledges and agrees that initiation of a lawsuit, judicial, or administrative action against the District, KGA, or other KGA members for claims related to the KGA GSP or SGMA will render the Landowner initiating the action a Defaulted Landowner (as defined by Section 4 of this Agreement).

10. Notice of Agreement. The Landowner agrees to provide a copy of this Agreement to each and every person who receives any interest in any portion of the Landowner Lands

11. Runs with the Land. The benefits and burdens of this Agreement are intended to attach to and run with the land particularly described in Exhibit A to this Agreement, are related to the direct benefit, use, maintenance and improvement of the Landowner Land, and shall be binding on and inure to the benefit of the Parties and their respective legal representatives, successors, heirs and assigns. It is the intent of the Landowner from the date of this Agreement, that the equitable servitudes, covenants, conditions, restrictions, assessments and other duties and obligations herein or in the District’s GSP Chapter (so long as such lands have not been withdrawn pursuant to Section 8 hereof) run with the land and shall be binding on any successors or assigns. All persons or entities claiming under the Parties, or who accept deeds, leases, easements or other grants of conveyances to any portion of the Landowner Land, agree that they shall be personally bound by all of the provisions of this Agreement, and shall conform to and observe the provisions of this Agreement and the District’s GSP Chapter and the KGA GSP. The Parties agree that a covenant evidencing this Agreement and its nature as attaching to and running with the land, shall be executed by the Landowner and recorded with the Clerk/Recorder of the County of Kern as a condition to the inclusion of the Landowner Lands within the District’s GSP Chapter and the KGA GSP.

12. Entire Agreement; Amendments or Modifications. The Parties agree that this Agreement contains the entire Agreement and understanding concerning the subject matter among the Parties and supersedes and replaces all prior negotiations of proposed agreements, written or oral, if any. This Agreement shall not be amended or modified except in writing, executed and agreed to by all of the Parties to this Agreement.

13. Effective Illegality. If any paragraph, sentence, clause, or phrase becomes illegal, null, or void for any reason or is held by any court of competent jurisdiction to be illegal, null, void, or against public policy, the remaining paragraphs, sentences, clauses, or phrases are not affected, and the Parties must negotiate an equitable adjustment of the affected provision with a view toward effecting the purpose of this Agreement.

14. Construction. Headings are used for convenience only and have no force or effect in the construction or interpretation of this Agreement. As used in this Agreement, the singular includes the plural and the masculine includes the feminine and neuter. This Agreement is a joint product of all Parties and is to be interpreted as such. This Agreement: (1) shall not be construed against the Party preparing it; (2) shall be construed as if the Parties had jointly prepared this Agreement; and (3) shall be deemed their joint work product. Each and every provision of this Agreement shall be construed as through the Parties participated equally in the drafting hereof, and, therefore, any uncertainty or ambiguity shall not be interpreted against any one Party. As a result of the foregoing, any rule of construction that a document is to be construed against the drafter shall not be applicable.

15. No Third-Party Rights. Nothing in this Agreement, whether expressed or implied, either is intended, or is to be construed, or otherwise interpreted as, conferring any rights or remedies on any third parties. Also, nothing in this Agreement gives any third parties any rights of subrogation against any Party.

16. Governing Law and Venue. This Agreement is entered into and performed in the State of California and is to be interpreted pursuant to the internal substantive law, and not the law of conflicts, of the State of California. Venue in any action brought under this Agreement shall be in the Superior Court of the County of Kern, State of California.

17. Indemnification. The Landowner (“Indemnifying Party”) shall protect, defend, indemnify and hold harmless the District, the KGA, and the KGA members along with their respective directors, officials, officers, managers, employees, contractors and agents (“Indemnified Party”) from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, attorneys’ fees and expenses) imposed upon, incurred by, or asserted against an Indemnified Party arising out of, resulting from, or in connection with (a) any indemnification obligation undertaken by the District under the KGA Indemnity with respect to the Landowner or the Landowner Land, or (b) any action taken or omitted to be taken by the Indemnifying Party under this Agreement, including but not limited to the following: (i) the actions or omissions by Landowner or Landowner’s affiliates, members, managers, employees, contractors and agents related to this Agreement, the KGA GSP, or SGMA; (ii) the Landowner or Landowner’s affiliates, members, managers, employees, contractors and agents’ violation of any applicable laws or regulations; (iii) the failure on the part of Landowner or Landowner’s affiliates to perform or comply with any of the terms of this Agreement, or (iv) the inclusion of the Landowner Land in the District’s GSP Chapter, provided, however, that such indemnity shall not extend to any such suit, claim, or damage to the extent caused solely by the negligent or wrongful acts or omissions of any Indemnified Party. The indemnification provisions in this section shall survive expiration or termination of this Agreement, and shall not be restricted to insurance proceeds, if any, received by the District or its directors, officials, officers, managers, employees, contractors and agents.

18. Effective Date and Term of Agreement. The effective date of this Agreement shall be the date last signed below. This Agreement shall remain in effect with respect to each particular Landowner unless and until such Landowner fails to perform according to the terms of this Agreement or such Landowner withdrawals from the Agreement pursuant to Section 8 hereof. This Agreement shall have no force or effect upon a determination that the performance of any provision of this Agreement will result or has resulted in the violation of state or federal law.

[signatures and property descriptions on following pages]

Landowner

______Signature

______Name and Title

______Date

EXHIBIT A [Property Descriptions] Property 1: Property 2:

EXHIBIT B [District Boundary Map]

EXHIBIT C Proof of Recordation of this Agreement

Exhibit “C”

Form of Sustainable Groundwater Management Act Jurisdiction Agreement

PROVISION OF JURISDICTION AGREEMENT REGARDING THE SUSTAINABLE GROUNDWATER MANAGEMENT ACT BETWEEN THE KERN GROUNDWATER AUTHORITY AND [MEMBER] This Sustainable Groundwater Management Act Jurisdiction Agreement (“Agreement”) between the Kern Groundwater Authority (“KGA”) and [Member] (“District”) is made and entered into this ____ day of ______, 2019. KGA and District are sometimes each individually referred to herein as a “Party” and collectively the “Parties.” RECITALS WHEREAS, on August 29, 2014, the California Legislature passed comprehensive groundwater legislation contained in SB 1168, SB 1319 and AB 1739. Collectively, those bills, as subsequently amended, enacted the “Sustainable Groundwater Management Act” (“SGMA”). Governor Brown signed the legislation on September 16, 2014 and it became effective on January 1, 2015; and WHEREAS, the KGA and the District overly portions of the Kern County subbasin (Basin Number 5-022.14, DWR Bulletin 118) within the San Joaquin Valley Groundwater Basin, a DWR designated high-priority and critically overdrafted basin; and WHEREAS, SGMA provides that all basins designated as critically overdrafted high-priority basins must be managed under a Groundwater Sustainability Plan (“GSP”) or a coordinated GSP by January 31, 2020; and WHEREAS, SGMA requires GSPs to be developed and implemented by Groundwater Sustainability Agencies (“GSAs”); and WHEREAS, on March 22, 2017, Kern County (the “County”), the District, and other local agencies formed the KGA, a joint powers authority (“JPA”), by executing an “AMENDED AND RESTATED JOINT POWERS AGREEMENT” pursuant to the Joint Exercise of Powers Act (Government Code Sections 6500, et seq.); and WHEREAS, on April 27, 2017, the KGA elected to be a GSA under SGMA in order to pursue groundwater management activities within the boundaries of participating members; and [WHEREAS, the District is a member of the Kern Groundwater Authority Groundwater Sustainability Agency (“KGA GSA); and] OR [WHEREAS, the District and the KGA formed the xxxx GSA; and] WHEREAS, the KGA is working collaboratively with its members to organize the KGA GSP in chapters, each of which will be developed by KGA members; and WHEREAS, within the KGA boundaries, certain areas are known as “undistricted lands.” Undistricted lands are areas of the basin not within the service area of a general KGA member; and

1 WHEREAS, under SGMA, groundwater management of undistricted lands is the County’s responsibility and, accordingly, was to be included in the County’s chapter of the KGA GSP; and WHEREAS, on December 11, 2018, the County’s Board of Supervisors voted to withdraw the County from the KGA and leave the undistricted lands without SGMA management; and WHEREAS, in order to maximize the SGMA management of undistricted lands, the District has identified specific undistricted lands, identified in Exhibit A, it may manage in its GSP chapter; and WHEREAS, in order to facilitate the District’s management of undistricted lands, the KGA may have to provide SGMA jurisdiction over the undistricted lands; and WHEREAS, the Parties have entered into this Agreement to set forth the terms governing the KGA’s lending of SGMA jurisdiction to the District. THEREFORE, in consideration of the mutual promises set forth below and to implement the goals described above, the Parties agree as follows: 1. Provision of SGMA Jurisdiction to the District. The KGA hereby agrees to provide SGMA jurisdiction to the District for the express purpose of enabling the District to incorporate the undistricted lands identified in Exhibit A into its chapter of the KGA GSP.

2. District’s Agreement with Undistricted Landowners. For any undistricted landowner whose lands are incorporated into the District’s GSP, the District agrees that it will enter into a separate agreement with the undistricted landowner whereby the landowner agrees to, at a minimum: (1) comply with the KGA GSP provisions; (2) not to sue or otherwise challenge the District, the KGA and/or KGA members on the development, adoption, or implementation of the GSP; and (3) indemnify the District from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, attorneys’ fees and expenses) imposed upon, incurred by, or asserted against the District arising out of, resulting from, or in connection with any action taken or omitted to be taken by the landowner under the agreement with the District.

3. District Indemnification of the KGA. The District hereby agrees to protect, defend, indemnify and hold harmless the KGA and its directors, officials, officers, managers, employees, contractors and agents from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, attorneys’ fees and expenses) imposed upon, incurred by, or asserted against the KGA arising out of, resulting from, or in connection with the District’s management of undistricted lands by virtue of the SGMA jurisdiction provided to the District under this Agreement. The Parties agree that the foregoing indemnification provision does not include and in no way obligates the District to defend the KGA from any claims, damages, losses, judgements, liabilities, expenses, or other costs, including litigation

2 costs and attorney’s fees directly caused by the KGA, or its officers’, directors’, employees’ or agents’ negligence or wrongful acts. 4. No Guarantee of Continued Jurisdiction. KGA SGMA jurisdiction is based on the jurisdictional service area of its existing general, associate, and cooperative members. To the extent the membership of the KGA is altered, the KGA jurisdiction may change. KGA does not guarantee and cannot guarantee the jurisdiction it provides pursuant to this Agreement will remain constant or unchanged. To the extent the jurisdiction contemplated in this Agreement is altered to the point that such jurisdiction is no longer sufficient for purposes of this Agreement, the Agreement shall terminate. Neither KGA, nor its members, shall be liable for any liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses that occur or are related to termination pursuant to this section.

5. Construction. Headings are used for convenience only and have no force or effect in the construction or interpretation of this Agreement. As used in this Agreement, the singular includes the plural and the masculine includes the feminine and neuter. This Agreement is a joint product of all Parties and is to be interpreted as such. This Agreement: (1) shall not be construed against the Party preparing it; (2) shall be construed as if the Parties had jointly prepared this Agreement; and (3) shall be deemed their joint work product. Each and every provision of this Agreement shall be construed as through the Parties participated equally in the drafting hereof, and, therefore, any uncertainty or ambiguity shall not be interpreted against any one Party. As a result of the foregoing, any rule of construction that a document is to be construed against the drafter shall not be applicable.

6. Effective Date and Term of Agreement. The effective date of this Agreement shall be the date last signed below. This Agreement shall remain in effect unless terminated by the unanimous consent of the Parties.

7. Complete Agreement. The Parties agree that this Agreement contains the entire Agreement and understanding concerning the subject matter among the Parties and supersedes and replaces all prior negotiations of proposed agreements, written or oral, if any. This Agreement shall not be amended or modified except in writing, executed and agreed to by both Parties to this Agreement.

8. No Third-Party Rights. Nothing in this Agreement, whether expressed or implied, either is intended, or is to be construed, or otherwise interpreted as, conferring any rights or remedies on any third parties. Also, nothing in this Agreement gives any third parties any rights of subrogation against any Party.

9. Governing Law and Venue. This Agreement is entered into and performed in the State of California and is to be interpreted pursuant to the internal substantive law, and not the law of conflicts, of the State of California. Venue in any action brought under this Agreement shall be in the Superior Court of the County of Kern, State of California.

3 IN WITNESS WHEREOF, the Parties hereto have caused their names to be affixed by their proper and respective representatives as of the day and year first above-written.

[signature blocks]

Exhibit A

Identity/Description of Undistricted Lands

4 Exhibit “D” KGA-Agency Indemnification Agreement

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Sustainable Groundwater Management Act (SGMA) Status Update June 2019

Kern Groundwater Authority (KGA)

KGA continues to work through various “Umbrella GSP” tasks, has provided the lead on addressing the management of remaining “white areas” (including sending informational letters to white land landowners in the Kern Subbasin) and on water budget development. Also see attached KGA Memorandum – Accomplishments and Forward Work Plan (May 22, 2019)(Exhibit “A”).

Groundwater Sustainability Plan (GSP) (must be submitted to State by January 31, 2020) 1. Preparation of North Kern GSP: North Kern is working with Shafter-Wasco ID on the preparation of a joint “Chapter” GSP under KGA. GEI Consultants is under contract for this effort and provided a partial administrative draft of the Chapter GSP in mid-April and submitted a second revised and more complete draft on June 13th.

2. Rosedale Ranch Improvement District (RRID): GEI has made significant progress on the “RRID SGMA Planning Report” and the Report was reviewed with the Board on June 13th. Based on this discussion it was determined that RRID will be handled as a separate “management area” in the North Kern-SWID GSP.

Communications

1. Landowner Advisory Committee: The most recent meeting of the Committee was held on April 30 with the discussion focused on potential SGMA management actions in North Kern. The next Committee meeting has been re-scheduled for June 24th.

“White Area” Management 1. District Counsel has provided a “White Lands Management Update” memorandum (including several recommended actions) that will be reviewed with the Board on June 18th.

Kern River Miller-Haggin Groundwater Group 1. Certain Kern River interests are working collaboratively on developing additional information to assist their implementation of SGMA. A summary of the work efforts of this group over the last year is being prepared and will be shared with the Board upon completion.

NORTH KERN WATER STORAGE DISTRICT

June 18, 2019

TO: NEGOTIATING COMMITTEE Directors Fornoff and Andrew, Alternate Mendes

FROM: Richard Diamond

RE: Approve Agreement with Kern County Water Agency for Lake Isabella Dam Safety Remediation Project Repayment

RECOMMENDED MOTION:

“Subject to modifications approved by District counsel, approve and authorize the President of the Board of Directors to execute the “Agreement by and Between North Kern Water Storage District and Kern County Water Agency Related to the Isabella Dam Safety Modification Project” confirming the Agency’s commitment to pay a portion of the Modification Project costs through Lake Isabella storage rental charges.”

DISCUSSION:

As the Board is aware, the District and other local agencies with interests in storage in Lake Isabella have been working with the United States (Corps of Engineers and Bureau of Reclamation with respect to the subject contract) since 2006 on efforts to remediate safety concerns regarding the facility and restore full conservation storage capacity. Remediation construction work was initiated last year (through the Isabella Dam Safety Modification Project (Project)) and in parallel North Kern and Buena Vista WSD (the primary contractors for storage) negotiated and recently executed a contract with the government describing the terms by which the contractors will repay the government for a portion of the costs (“local share”) of the Project pursuant to Federal law. North Kern has also prepared a CEQA “Notice of Exemption” to support the court “validation action” necessary to confirm both districts’ authority to enter into the repayment contract.

Pursuant to the repayment contract North Kern is responsible for 50% of the local share costs (Buena Vista is responsible for the other 50% of local share costs) and the City of Bakersfield (and through a sub-contract, Kern Delta) is responsible for 50% of North Kern’s cost commitment (or 25% of the total local costs). These arrangements are consistent with the 1962 Water Rights and Storage Agreement and the 1964 Storage Agreement between First Point Water Entities. The 1962 Agreement also allows the holder of the Kern River “lower river” right (now the Kern County Water Agency (Agency)) to rent a portion of First Point’s storage in Lake Negotiating Committee Approve Agreement with Kern County Water Agency for Lake Isabella Dam Safety Remediation Project Repayment June 18, 2019 Page 2 of 2

Isabella during periods when the right is entitled to water (generally in years when April-July River runoff is greater than about 125% of average levels).

After some discussion, the Agency has determined that they are comfortable including the local share costs for the Modification Project in the calculation of rental charges for the duration of the Project repayment contract (50 years). District counsel has drafted an agreement between North Kern and the Agency to codify our mutual understanding regarding rental charges and repayment costs (Exhibit “A”). The agreement also incorporates an example calculation (using 2012 storage and rental data) showing how repayment costs will be allocated to the lower river right.

Attachments:

Exhibit “A”: Agreement by and Between North Kern Water Storage District and Kern County Water Agency Related to the Isabella Dam Safety Modification Project DRAFT

Agreement by and Between North Kern Water Storage District and Kern County Water Agency Related to the Isabella Dam Safety Modification Project

THIS AGREEMENT is entered into this ___day of ______, 2019, between North Kern Water Storage District (“North Kern”) and Kern County Water Agency (“Agency”). WHEREAS, the Kern River Water Rights and Storage Agreement was entered into December 31, 1962, by and between North Kern, Buena Vista Water Storage District, Tulare Lake Basin Water Storage District and Hacienda Water District (herein referred to as the “1962 Agreement”); and WHEREAS, in September 2000, the Kern County Water Agency, a California special act district formed pursuant to the Kern County Water Agency Act (California Water Code Appendix, Chapter 99) (“Agency”), purchased an undivided interest in the Kern River Lower River (“Lower-River”) water rights, and other water rights and inventories, previously owned by Garces Water Company; and WHEREAS, the United States Army Corps of Engineers has determined that the Isabella Dam facilities require structural improvements in order to safely meet authorized project purposes and to reduce risk to the public and property from dam safety issues posed by floods, earthquakes, and seepage; and

WHEREAS, pursuant to the Reclamation Safety of Dams Act and the Water Resources Development Act of 1986 as stated in that certain “CONTRACT BETWEEN THE UNITED STATES OF AMERICA, NORTH KERN WATER STORAGE DISTRICT AND BUENA VISTA WATER STORAGE DISTRICT, PROVIDING FOR THE REPAYMENT OF FUNDS EXPENDED FOR FEDERALLY PERFORMED ISABELLA DAM SAFETY MODIFICATION PROJECT” (Contact No. 18-WC-20-5245, herein called the “Remediation Repayment Contract”) entered into by said parties, the United States Bureau of Reclamation (Reclamation), as the Contracting Officer, will collect from North Kern and Buena Vista Water Storage District (Buena Vista) the proportionate annual amount of the Repayment Obligation related to the modification of Isabella Dam facilities, all as specified in the Remediation Repayment Contract which the Agency has been provided a copy; and

WHEREAS, North Kern, Agency, City of Bakersfield, Kern Delta Water District and Buena Vista have entered into a Memorandum of Understanding dated June 19, 2018, regarding said Isabella Dam Safety Modification Project in regard to the Remediation Repayment Contract, stating, among other things, that the reimbursement among all the parties of the reimbursable costs to be paid the United States under the Remediation Repayment Contract will be allocated and reimbursed among the parties “in a manner consistent with the Parties existing agreements and procedures relating to Isabella Dam and Reservoir, unless the Parties mutually agree to a new or revised agreement providing for reimbursement”; and

WHEREAS, the parties to the Remediation Repayment Contract agree that it does not amend, modify or otherwise alter Contract No. 14-06-200-1360A between the United States and North Kern Water Storage District, Buena Vista Water Storage District, Tulare Lake Basin Water Storage District, and Hacienda Water District, dated October 23, 1964, as amended (herein called the “1964 Isabella Storage Agreement”).

DRAFT

NOW, THEREFORE, the parties agree as follows:

1. The Agency consents to North Kern entering into the Remediation Repayment Contract.

2. At such times as the Agency rents storage space in Isabella Reservoir from North Kern pursuant to Paragraph 9 of the 1962 Agreement, North Kern and the Agency shall instruct the Kern River Water Master in determining the cost of the Agency renting storage in Isabella Reservoir to include as part of the rental total cost the repayment to the United States of the Repayment Obligation under the Remediation Repayment Contract using the methodology provided in Paragraph 9(e) of the 1962 Agreement modified to include the total annual payment by North Kern and Buena Vista for repayment of the Repayment Obligation, without interest, for a term of 50 years or until the Repayment Obligation has been repaid to the United States as provided in the Remediation Repayment Contract. The Agency shall timely make such payments to North Kern as therein provided. An example calculation using 2012 storage data is provided in Exhibit “A” attached hereto and incorporated herein.

3. The Parties confirm that this Agreement does not amend, modify or otherwise alter the 1962 Agreement or the 1964 Isabella Storage Agreement, or any other agreements between the Parties or others.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.

NORTH KERN WATER STORAGE DISTRICT

By: ______President of the Board of Directors

Attest:

By: ______Secretary of the Board of Directors

KERN COUNTY WATER AGENCY

By: ______President of the Board of Directors

Attest:

By: ______Secretary of the Board of Directors

Exhibit "A"

KERN RIVER WATERMASTER ISABELLA RESERVOIR INTER-DISTRICT RENTAL CHARGES DAM SAFETY MODIFICATION (DSM) PROJECT (1) Pursuant to the "Agreement by and Between North Kern Water Storage District and Kern County Water Agency Related to the Isabella Dam Safety Modification Project" dated June xx, 2019 (and referenced Agreements), Paragraph 2

EXAMPLE COMPUTED YEAR: 2012

Acre-Foot Days of Irrigation Storage (2) Total Isabella - - - DSM Project Year NKWSD (3) BVWSD Total A.F.D. Repayment (4) 2008 31,959,978 14,678,042 46,638,020 $417,291 2009 28,560,569 14,744,641 43,305,210 $417,291 2010 38,044,976 23,958,936 62,003,912 $417,291 2011 60,400,699 21,104,961 81,505,660 $417,291 2012 28,279,514 11,870,551 40,150,065 $417,291 5-Year Totals 187,245,736 86,357,131 273,602,867 $2,086,455

= Total 5-Year Cost $2,086,455 $0.0076259 ------= ------= = ------Total 5-Year Use 273,602,867 DSM Project Rental Repayment Charge Per Acre-Foot Day

TOTAL 2012 HACIENDA WD Acre-Foot Storage Days = 1,910,867

TOTAL 2012 HACIENDA WD Share of 2012 DSM Project Storage Costs = $14,572.08

(1) DSM Rental Repayment Charges are additional to Rental Charges pursuant to 1962 Water Rights and Storage Agreement and will cease after 50 years, or until repaid.

(2) Pursuant to 1962 Water Rights and Storage Agreement (3) Includes Hacienda Water District Storage when such storage occurs.

(4) DSM Project Repayment Obligation - Calculated Annual Cost Total DSM Costs = $641,000,000 (a) Construction Irrigation Storage Allocation (Contract 18-WC-20-5245) = 21.7% SOD Act Reimbursement (Contract 18-WC-20-5245) = 15.0% (b) Total DSM Cost Allocation to Irrigation Storage = $20,864,550 Annual DSM Cost Allocation to Irrigation Storage (Total/50 year payment period) = $417,291 (c)

(a) Estimated cost as of June 2019. Upon completion of DSM Project this estimate will be replaced with actual costs (and calculations following will change). (b) Pursuant to "Reclamation Safety of Dams Act of November 2, 1978" (SOD) and "Water Resources Development Act of 1986" (WRDA) (c) Comprised of North Kern 68% ($283,757.88) and Buena Vista 32% ($133,533.12) (Contract 18-WC-20-5245, Exhibits A and B)