Cadiz Page 1 of 1



 

Patton, Gail (Z.
From: Scott Slater [SSlater@bhfs.com]

Sent: Friday, April 17. 2009 11:30 AM

To: Cushman. Dennis

Cc: Stapleton, Maureen; Daniel

Subject: Cadiz

Attachments: 

Dennis:

As we discussed, enclosed with this e-mail, please ?nd a revised Program Summary for Cadiz. Since the
initial summary was prepared about two months ago, I have continued to meet with interested parties that
provided input in the structure of the project. We've taken input and shaped the project towards being more
ala carte. We've had Cadiz assume some additional responsibilities and we have managed to reduce the
over all cost of the project.

We hope that you will ?nd that it is extremely competitive and worth pursuing. If you think we can
advance our progress through a telephone conference or a meeting to walk through the summary and to
answer any questions that you may have, let's set something up. We do expect to be moving forward now
pretty quickly with a group of participants. We'd be pleased if SDCWA elected to be part of that group.

Best Regards,
Scott

Scott S. Slater

Brownstein Hyatt Farber Schreck, LLP
21 East Carrillo Street

Santa Barbara, CA 93101

SS1ater@bhfs.com

805.882.1420 Of?ce (Direct)
805.965.4333 Facsimile
805.882.1480 Pam Wilson (Assistant)

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4/20/2009

  

 

Cadiz Valley Groundwater Supply and Water
Storage Project Summary

A. The Project. The Cadiz Valley Groundwater Supply and Water Storage
Project is a comprehensive conjunctive use and wateraj? conservation program
that provides for the. (1) managed conservation rad sc heduled withdrawal
of groundwater from the aquifer system tha elies the Property and
imported water that is stored there for bseqil: withdrawal; (2)
conveyance of native and imported water through a nv eyance pipeline
that moves water between the Colorad River Aqueductz(CRA) and the
Property; (3) power distribution facilit'e (4) pumping plan?(s) on the
conveyance path, and (5) intake and facilit?les located at the f.

B. Groundwater. Up to 2, 500,000 acre- feet 01in be made available from
the Property for delivery to overlying beneficiali Lises (solar, agricultural, and
domestic use) and Water Pq?veyors (WP) over 61ny years at the rate of
50,000 afy in minimum blocks ,000 afy (Annual Qu ntIty)

The groundwater Withdraw?lalsi Will be conducted consistent with
established principles of grouhdwatergrganagement and the long- -term
sustainability of the underlying aquifer system.

Due regardyv be provided for the water supply requirements of all
overlying fes s; 

   

C. Storage. 33
a awry?
Upt 1, 00,0 000 acre et of?ava?Ilable dewatered storage capacity will
be ?na?g Sgand made ayallable under the initial Program.
this agh Sgiint, 150, 000 apre- -feet of the dewatered storage capacity
be initial reserved for first priority Carry- O?ver Storage Accounts,
ch may be chased in connection with the Annual Quantity Rights
and acgtiired concurrently with the purchase of the Annual Quantity
Rights
The minimum 'nerement of Carry- O-ver Storage that a WP may obtain
is 5,000 af s?orage account per each 5,000 acre- -feet of Annual
Quantity. The storage account may be used for storing unused Annual
Quantity and for the Put and Take of foreign water that may be
imported to the Property and stored there.
A WP that elects to purchase a Carry-Over Storage account at
inception will receive a quantity of water equivalent to the quantity of
Carry-Over Storage. This water will be assigned to their Carry-Over

account. ?Lb/(g
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88501765 10 Ch? 14? WA 4r)-

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 850,000 acre-feet of available storage will be reserved exclusively for
the storage of foreign water that may be imported to the Property.
Imported Water Storage Accounts will be made available in minimum
increments of 20,000 af and they may be purchased separate and
independent from any Annual Quantity or Carry-Over Storage.
5 
D. T__erm. 50 Years, subject to extensions. 

5 5775/51")
E. HM- AFO?WA/Go?gfc?quI/Waw. 

.W
Ann . Guantit Ri- ht: Units of 5,000 acre- f?eet of groundwater at
a per afy in 2009 dollars. 3' 

Assumes a $25 per acre- f-oot discount (in 2009 dollars) if the WP
complies with environmental stewardship principles 97 post

 
  
 

discount). 67501
. $975 per acre- ?foot adjusted annually subject to an agreed upon
index but no greater than 5 percent 5per annum, over any five {low 
year periodAdd?)!
First Priority Cara-Over Storage3Account. Units of 5, 000 acre- f-eet of

Carry- -Over Storage may be purchased at $7.5 million per account
($1,500 per af). At request of WP, Owner will finance 50 percent of the

initial purchaseIprice at 7 percent, over 30 years. WP will pay the
following costs: I f,

i -I 
. $20 per acre- -fOot annual fee for administration, management
and maintenance of CarI:y -O,ver Storage.
,No fee for accrue! to Carry- O-ver Storage and no fee other than
5 ~Feimbursement foF incremental power on delivery of native water
from Carry- O-ver StOrage.
$75 per? acre- f-oot for puts and $75 per acre- f-oot for takes of
imported water only, plus actual power, subject to a $25 per
aCre- -foot discount for puts for environmental stewardship.
. WP may pay the incremental cost of upsizing the conveyance
pipeline to deliver a quantity equivalent to the capacity of their
purchased? Carry- O?ver Storage Account on a firm basis at an

estimated cost of $12 million per 5,000 acre? ?feet of additional
pipeline capacity.



 

 

IQuoted price assumes April 16 2009 steel prices do not increase more than 5% per annum prior to the purchase of
pipeline materials.

All fees and charges are subject to annual adjustment In accordance with an agreed upon index that does not
exceed 5% per annum over any ?ve year period

SB 501765 vi:0] 10810005

 

 Imgorted Water Storage Account. Units of 20,000 acre-feet at $7
million per account ($350 per acre-foot). At request, Owner will
finance 50 percent of purchase price at 7 percent interest only over 30
years. WP will pay the following costs:

0 $20 per acre- f?oot annual fee for administration, management
and maintenance.
0 $75 per acre- f-oot for puts and takes of imported water, (in

addition to actual power) subject to a $25 per acre- -foot discount
for puts for environmental stewardship. 

. WP will also either: contribute 50 percent of the firm capacity
capital costs per each 5,000 acre -feet of pipeline capital costs to
connect the Cadiz Pr0perty to the CRA for? ?space available?
capacity or in the alternative pay the actual incremental cost
of upsizing the conveyance pipeline up to a cUmulative
maximum of 300 cfs.

. Any WP contribution for ?space available? capacity will be used to
proportionately reduce the pipeline capacity costs for those 
holding ?rm capacity I .P

IQ 5'
F. Energy and Conveyance. FollowIng completion of environmental
review and ?nal agreements, Owner will cause the construction of a pipeline
to be sized commensurate with the cumulatiVe firm delivery requests to
reliably deliver between 50, 000- 200, 000 acre- -f00t per year (75- 3-00 cfs).
The pipeline will fconneCt the Cadiz Property to the CRA over a 200 foot right
of way it has SGCUCECI for 99 years through an agreement with the California
Arizona Railroad. WP willzf, bear all energy costs in moving imported water
from the CRA to the Cadiz Property and from the Property to the CRA. WP
will bear all costs and responSIbIlItyIfor energy and conveyance costs from
the delIverpromt at the CRA to its point of use. However, Owner will

exercise good ?faith and best efforts to assist WP in securing conveyance i( ?Ml?


appr?vals. To the extent Owner offers an ?in kind? contribution that reduces 
the cost?ol? conveying and exchanging water for the benefit of the WP, the in
rties will exercise best efforts to ne otiate equitable remuneration for the

   
 

 



G. EnvironmentalI'Review. Unless otherwise agreed by Owner and WP,
Owner will complete environmental review of the Project through the County
of San Bernardino with the County acting as Lead Agency. WP will be a
Responsible Agency or will designate one to address all environmental
impacts within its service area. The complete cost of environmental review
will be borne by the collectively and to the extent Cadiz reserves rights
in the Annual Quantities, by Cadiz. An amount equal to prorated share
of the estimated environmental review costs attributable to the

SB 501765 v] 10810005

IL .

 
 
   
  

from the Cadiz Property and

he CRA will be deposited into

of Preparation for

cons 
the tegnasggn?asitggatge agd withdrawal of water
0 an from the 
an . ropert to 
scrow account prior to the publicatio: of the Notic

the Project.

?m?J 

of State To the extent WP successfullyyafrrganges for the receipt

all of the capital costgrapts, bonds anld'lgstimu'l?us to pay some or

CRA, a commen the pipeline that will/c?onihefct the Property to the

Contributio Surat-e reduction will be ?rQade it?? their respective
ns towards pipeline conveyance and to that po'rti'ori of the cost of



its,

the Annual Quantity that is attributable thereto. 
1? ti: ..

I. Reservation of Discretion. These ,teigms will be reflected in a?st'atemeht

?n WR. Within sixty days of execution

a?ze and

 

of interest to be executed by Owner a
'llt?further summ


offthe statement of interest, Owner and ?WPgwi
re me these terms in a memorandum of understanding
described therein,

reflects their mutual agreement as to economic terms
w. However,

IhClUfimg the appropriate cost allpcation for environmental: revie
despite their agreemen each public agency, including
I review of a

on economy?icgterms,
WPIthat may undertake responsib?i?li??t?f?t?perform environmenta
prOJect contemplated by the MOLJ expr??sslx reserves their complete
discretion, without limitation to contigiogn the Project or to refuse

participationuktkm whims?

 

SB 501765 vl:Ol 10810005

 

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