HomeMy WebLinkAbout6 Glenshire Water system acquisition Agenda Item #
DONNER
PublicDistrict
Memorandum
To: Board of Directors
From: Peter Holzmeister
Date: December 12, 2001
Subject: Glenshire water system acquisition
A) We have been moving along with acquisition of the Glenshire water system. As you
know, portions of Glenshire service area and outside our current District boundary, but
within our sphere of influence. We cannot provide water service to the areas outside our
District boundary without approval from LAFCo.
There are two types of authority that LAFCo can give to allow us to serve the Glenshire
area: (1) we can receive authority to serve an area outside our jurisdictional boundary or
(2) we can annex the area into our District. In the long-term we would want the territory
in our District boundary. But the annexation process can take several months to
complete. We would like to begin serving water in Glenshire as soon as possible to
begin developing the plans to construct the facilities necessary to solve the water
problems. Therefore, we would like LAFCo to permit us to serve Glenshire on out-of-
jurisdictional-boundary basis while we simultaneously make formal application for
annexation.
Attached is a resolution for your consideration which initiates the application to LAFCo
for authority to serve water in Glenshire pending completion of the annexation process.
RECOMMENDATION: I recommend that the Board adopt the resolution requesting
approval from Nevada Local Agency Formation Commission to provide service outside
the District's jurisdictional boundaries, thus permitting the District to provide water
service in the territory currently served by Glenshire Mutual Water Company
B) Attached is the latest draft of an agreement by which we would acquire the assets of
the Glenshire Mutual Water Company and become the water purveyor in its service
area. We have also attached a map of the area that we would serve.
RECOMMENDATION: I recommend that the Board approve the Agreement between the
District and Glenshire Mutual Water Company.
RESOLUTION 2001--
Requesting Approval From Nevada Local Agency Formation Commission to
Provide Service Outside the District's Jurisdictional Boundaries, Thus Permitting
the District to Provide Water Service in the Territory Currently Served by
Glenshire Mutual Water Company
WHEREAS the Glenshire Mutual Water Company (Company) has experiences problems
with water quality and water quantity in its wells; and
WHEREAS Company has determined that the cost to resolve these problems on its own
far exceeds the cost of allowing the Truckee Donner Public Utility District to become the
water purveyor within the current service territory of Company; and
WHEREAS the Glenshire Mutual Water Company has asked that District become the
water service provider in its service territory; and
WHERAS Company and District have negotiated an agreement under the terms of
which customers in the Glenshire service territory will bear the cost of all improvements
needed to solve the water quality and supply problems by means of a transference of
assets from Company to District and by agreeing to a surcharge on the monthly water
bills for a period of twenty (20) years sufficient to cover all costs of necessary
improvements; and
WHERAS the current jurisdictional boundaries of District include approximately the
western one-third (1/3) of the service territory of Company, but the remaining two-thirds
(2/3) of the service territory of Company are outside the jurisdictional territory of District;
and
WHEREAS the area outside District's jurisdictional boundary that is within the Company
service territory is within District's sphere of influence; and
WHEREAS District intends to apply to Nevada LAFCo for annexation of the portions of
Company's service territory that are outside the District's jurisdictional territory; and
WHEREAS the District needs to proceed immediately to make system improvements in
order to resolve the water quality and supply problems such, that waiting for completion
of the annexation process will result in hardship on the customers with the service
territory of Company;
NOW THEREFORE BE IT RESOLVD BY THE BOARD OF DIRECTORS OF
TRUCKEE DONNER PUBLIC UTILITY DISTRICT that
1. It petitions Nevada Local Agency Formation Commission to permit District to provide
water service in the Glenshire service area as further defined on the map attached
hereto as Exhibit A
2. It certifies that the District will proceed immediately to make formal application to
Nevada LAFCo for annexation of those portions of Company's service territory not
currently in its jurisdictional boundary
PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held
within the district on the 19th day of December 2001 by the following roll call vote:
AYES:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
By
ATTEST:
Peter L. Holzmeister, Clerk of the Board
DRAFT
(Option B, Glenshire assets to District, No rebates to shareholders)
AGREEMENT FOR THE ACQUISITION OF THE GLENSHIRE WATER SYSTEM BY THE
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
RECITALS
1. Glenshire Mutual Water Company (hereinafter referred to as Company) owns and operates a
domestic water system serving approximately 1350 service connections in the Glenshire service
area located in the eastern portion of the Town of Truckee.
2. Company is experiencing high levels of arsenic in its domestic water supply wells. In addition,
its well capacity is not sufficient to serve the projected build-out of its service territory, and there is
not an adequate supply of high quality water in its groundwater basin to allow development of
additional source.
3. Truckee Donner Public Utility District (hereinafter referred to as District) owns and operates a
public utility domestic water system serving approximately 8,500 service connections in the
re�af-t#e-Town of Truckee and portions of Placer County. District's service territory is
immediately adjacent to that of Company.
4. Company has asked that District acquire all of the assets of4he-watee-aystem of Company as
described below in paragraph 1 and assume responsibility for serving domestic water in the
territory of Company.
5 Company understands and intends that those customers to whom the Company has provided
water service prior to District's acquisition of Company's assets and service responsibility will
bear the costs associated with system improvements required for District to provide water service
and for Company's system to be brought into a condition acceptable to Distract These costs will
be borne through a transfer of Company's assets to District and through the water rates imposed
by District on those customers.
NOW THEREFORE DISTRICT AGREES TO ACQUIRE THE-ANAT-ER-SY-STEM ALL ASSETS
OF COMPANY BUT NOT COMPANY ITSELF, AND COMPANY AGREES TO CONVEY ITS
WATER SYSTEM AND OTHER ASSETS TO DISTRICT, T044€-EXTEN -�-I"=.'�= T—Sc
N_THE I�R9RE�nGc ran nccGrc �H� ^?n�G z cv Gn AS FURTHER DESCRIBED
AS FOLLOWS:
1. Acquisition of water-systemCompany assets:
District will acquire and Company will convey to District on the terms and subject to the conditions
of this Agreement, the assets of Company which consist of all cash: or bank balances in
Company's possession, all accounts receivable, all operative rights, water wells, storage tanks,
pump stations, distribution and transmission pipelines, services, and connection lines and all
appurtenances related thereto, rights-of-way- and easements-assoesated-with he—watter--system,
land, equipment, vehicles and inventory owned by Company and-usad and use#u f E#e eperatian
ofae de Testis water-syste as further described in Exhibit A.
It is expressly understood that the named assets which are to be conveyed hereunder are
conveyed "as is", and Company makes no representation of any kind, whether express, implied
or otherwise as to their condition or serviceability. District acknowledges that it has conducted a
due diligence process and understands the as is condition of the assets of company. District also
recognizes an encroachment violation at the Strand tank site.
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it is exoFessly understocci and agreed that District will not acauire Company niirsuan' to 'his
Aar eerne rt. but only Company s assets and certain oel I ations as further described
not de haoie for any other obligations or liabilities of Company and Company soecific
and covenants to pay ant claims obloations or liabilities ^reseal, owing
due unless soecificaliv exceQted by the terms of the Agreement.
2. Responsibili tiesy of Distriict-Parties:
A-'. Responsibilities of District
1_District will take possession of the water system, and own and maintain it and
become responsible for providing potable water supply to the service territory
territory
Of COMD2nv, including Glenshire/Devonshire, Meadows, Kent Drive, Royal
Crest extension, Filly Lane, and Cambridge 1, 11 and III as described on the
map attached as Exhibit B,
-2, District will construct the facilities necessary to connect the Glenshire water
system to District's system at Districts sole expense, and District will
establish a water rate s-urchafge-applicable to customers within the service
area described in the map contained in Exhibit B which includes a rate
component which will permit recover these actual costs.
3. District will abandon unused wells belonging to Gl&nsinireCompany using
methods approved by the California Department of Health Services and other
regulatory bodies having proper jurisdiction over the District pertaining to well
abandonment.
B. Responsibilities of Company
1, Company will assist District in obtaining any and all regulatory approvals o
permits necessary for District to provide water service in Company's service
territory.
2 Company hereby forever waives and releases any right to provide domestic
water service within the service territory being acquired by District herein.
subsequent to the close of escrow, Company further agrees and covenants
not to challenge District's right and ability to provide water service within
Company's service territory, District's right and title to Company assets
acquired pursuant to this Agree
3. Company will timely. tender possession of Company assets and perform
other obligations as set_forth herein
3. Payment:
Its the intent of Company and District that the Companys present customers will bear the costs
incurred bv District in the course of connectin Company's water system to District's
system.-br'ngina Company's eater system into compliance with applicable standards. abandoning
Company walls which will not be used bV District paying for employee benefits accrued by the
Company employees who will become employees of District and a share of trio costs involved in
the constructior of Dist ief facilities from which Company's customers vriil benent following the
execution of this Agreement The costs to be borne by Company's curt^mers will be offset by the
value of fhe disposable assets listed in Exhibit A as set forth belovv The precise mechanism for
A. Following are firmly established costs that will be borne by the Ccustomers of the
territory described in Exhibit B.
FIRM COSTS
1. Buy-in to well 334,000
2. Storage tanks
(New storage) 67,000
(Repair) 50,000
3, Truckee River Bridge crossing 51,000
4. Service line replacement 50,000
5. Accrued employee benefits 19,000
TOTAL FIRM COSTS 571,000
B. Following are estimates of construction costs required to connect the service territory
described in Exhibit B to the District water system.
CONSTRUCTION PROJECTS ESTIMATES
1. New 12-inch transmission line 1,170,000
2. Well upgrade(increase pump capacity) 200,000
3. Chlorination for well#20 100,000
4. Pump station at Featherstone 100,000
5. Pump station in Glenshire 100,000
6. Main line replacement at Cavalier Rise 100,000
7. Main line replacement at Regency Circle 100,000
8. Well abandonment 90,000
TOTAL ESTIMATED COSTS 1,960,000
Contingency 196,000
ESTIMATED TOTAL COSTS 2,727,000
It is recognized that these are cost estimates. Actual costs to construct the facilities,
perform the repairs and connect the service territory to the District water system may be greater
or less than the stated estimates. The District, being a Public agency, shall
establish a sussma water rate applicable to customers in Company's service territory, which
rate will coniain a component representing a charge for the items listed above so as to permit
District to recover the costs associated with these improvements and shall be—limit the
surGmaargegeapplication of this rate component such that it recovers only the actual costs incurred by
District.
C. Customers within the service territory described in Exhibit B shall be required to pay
the total firm costs and the actual costs required to construct the facilities and perform the
repairs listed as construction projects above and to connect District's water systems to
Company's water system. Company will payremit to District all cash on hand and the
District will finance the balance of the firm and actual construction--costs for a period of
twenty years at an interest rate that the District is able to acquire using its best efforts to
achieve the lowest possible rate. The surchargerate component established by the
District shall cover only the amount financed at the actual interest rate incurred for the
financing. The surohargerate component will be added to the other components of the
normal monthly water charge, and will remain as-a-surehargein effect as a component of
the water rate for these customers until the principal and interest payments are fully paid.
D District shall establish and maintain an interest bearino account to be known as the
Glenshire Water System Sinking Find Funds on deposit in said Sinkina Fund will be
applied by District to amortize +ham debt se vice disc ibed in Paragraph C above.
Amortiza ion shall be scheduled to reduce the principal and interest payments each Vear
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" ro� em� of`he debt and ,he rn^nt` l rate component on customer oils which
represents District's costs in intearating and operating Comcanys system shad be
reduced by the amount contributed by the Sinking Fund.
DE. The assets listed on Exhibit A fall into two categories, those assets that will be
retained by District as necessary to provide service to the territory defined in Exhibit B,
and those assets that can be disposed of. The assets that can be disposed of have an
associated cash value for purposes of this Agreement as set forth in Exhibit C. District
has the option, in its sole discretion, of keeping said disposable assets by paying the
associated cash value into the Sinking Fund merit, or to sell
said assets according to the methods required by law, and using its best effort to sell said
assets at the highest price. If the-District decides to keep any of the real property or
assets, the appraised value will be placed in the sSinking (Fund. The net cash proceeds
derived from the sale of said assets shall be deposited in the Sinking Fund.
T#er�-st�a4L-tie-ee<_tabifshed-a�nte:est-bearing-assou nt-;a--be-knsw��-as-t4e-�ar+st�ire
Wet..;Sp,stefn-Si�lti+�g-FF�nd—FtFnds-on-depo-s+tis��aid-Sink+ng-Fktnd-w�{-be-app�ed-�y
8istr3c-rte-a+xar#f�e�t#ie-debt-se i�tise-described-in-Sestior�-3{G}-above-,4raert+aa`�ea--sRal{
h dul�d �- d thy-rr+nsipr�l-aae-+nte TM��t-payments-easla-yea;--t#reagt#e
__-
t£Frn 9f4he-debt,�montnlyS 6aargeY �Fst r.," h,Il h ll ha rcdused by
the-amount-ca+ntribated-fy the--Sinking-F-und:
EF. The Truckee River bridge crossing and capacity upgrade for District's Glenshire
Drive well which will be undertaken in order for District to serve the service area
described in Exhibit B may also benefit It otherproperties are-which may be annexed to
District t wa s;s`.e--at a later date. a„d_ sm. h ��tie`S
pA4�;e-a4:-- d ssr+bed-in-E*� bit-B-aad-Since these facilities will
have been paid for by the customers in Company's said--service area territor , said
properties which are annexed to the District and which benefit from these facilities will be
required to pay to District a contribution to the cost to construct theese facilities,4amely
bridge-.c This contribution will be in addition to any other fees,
charges or contributions that may be required to be paid to District as a condition of
annexing into District or receiving water service rrom District. Contributions so received
will be deposited in the Glenshire Water System Sinking Fund and applied to principal
and interest payments resulting in a reduction to the monthly surcharge.
FG. If Company adds additional customers between the time this agreement is executed
and the close of escrow, Company will pay to District the additional cost for source and
storage associated with each new customer.
4. Accounting statements and inspection of sCompany books and assets:
Within twenty (20) days of the execution of this Agreement the Company will provide to District, if
requested, a current trial balance statement satisfactory to District showing all customer funds
and deposits held by Company, and Company shall also permit District's agents or
representatives to review or audit, at any time prior to close of escrow, any of Company's books,
records, or accounts, equipment or other assets and to otherwise verify the status of Company's
outstanding obligations, customer credits, accruals, and accounts, equipment or other assets.
5. Conditions precedent to District's obligations to acquire:
District's acquisition of the water system is subject to receiving appropriate approval of the
shareholders of Company, from Nevada County Local Agency Formation Commission, and
approval from the California Department of Health Services of an amendment to District's water
operator's permit. District's acquisition of water system is also subject to completion of the
environmental review process set forth in the California Environmental Quality Act. District's
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acquisition of water system is contingent upon receipt of suitable funding to effectuate the
improvements set forth in Paragraph 3 above.
District shall bear all costs associated with applying to Nevada LAFCo and obtaining Nevada
LAFCo's approval t ly annexing the area described in
Exhibit B, including the cost of any litigation that may result from processing of the application.
6. Opening of escrow:
District will open an escrow with California Land Title to effect the consummation of this
Agreement. Escrow shall close following the completion and satisfaction of all conditions
precedent to the acquisition, including but not limited to approval the shareholders of Company,
approval of Nevada County Local Agency Formation Commission, and on a date thereafter that
logically meshes with District billing cycles and which is a logical date for District to take over and
assume operation of the water system. District will strive to accomplish an escrow closing date
that is on or about January 1, 2002, if the required conditions and performances under this
Agreement are complied with and it is practical to do so.
7. Operating systems pending transfer:
From and after execution of this Agreement and until transfer of system after close of escrow,
Company warrants and agrees that theyit will continue to operate the system and provide utility
service in good and satisfactory manner, and will maintain and repair the system and all
components thereof in a good and responsible and workmanlike manner; and that theyit will not
incur any debts, liabilities obligations or encumbrances against the-water-systern-prGpest+esits
assets, or make modifications or alterations thereto beyond normal operational practices without
District's prior written approval.
8. Actions of parties to close escrow:
A. Company will, not later that three days prior to close of escrow, deposit all cash on hand into
escrow.
B. District shall pay all closing costs and shall submit all needed instructions to close escrow in
accordance with this agreement
C. All outstanding accounts payable, including taxes as defined by McClintock Accountancy,
incurred by Company as of the close of Escrow shall be paid by District.
9. Customer accounts, billings and records:
Company shall transfer to District the records of the amounts of all customer advance payments
or deposits, and all accounts receivable for services. District's records shall reflect customer
advance payments, and District shall bill for all accounts receivable. Company will supply to
District fifteen (15) days before close of escrow complete and current lists of customers, to be
used for billing purposes. At the time of transfer of billing responsibility to District, Company shall
turn over all of Company's customer accounts and billing records. Service to any new or added
connections by District after transfer will be on the terms and conditions applicable thereto under
District's rules, regulations and policies.
At the close of escrow, Company shall turn over and deliver to District as its property all of the
Company's operating records, maps, plans, drawings, specifications, warranties and other files,
correspondence and papers pertaining to water-systemCompany's assets.
10. Condition of water system:
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Company shall supply to District within fifteen (15) days after the execution of this Agreement the
following information on the water system, to enable District to ascertain the existing conditions of
the system:
A. All available as-built installation plans, drawings and specifications,
B. Maps showing the location of all pipelines, pumps, and appurtenant facilities (valves,
hydrants, etc.), and righ's-cf-way and easements for off-street locations so far as
these are known to or can be ascertained by the Company;
C. Size, type, material, and date of installation of all pumps, pipeline, and other
component parts and facilities so far as this information is known to or can be
ascertained by the Company.
D. Types and locations of all hydrants, and air vacs, blow-offs and other valves so far as
is known to or can be ascertained by the Company.
E. Meter history cards.
Such information, to the extent it is available, shall also include descriptions of any sub-standard
installations, deficiencies or facilities in the system known to the Company or its employees, that
could impair or affect the District's ability to continue to provide adequate and reliable water
service to the areas served by the water system. District acknowledges that Company may not
have available all information described in this paragraph and Company is only required to
provide such information that it has and in the condition that it exists.
11. Insurance:
Company agrees make its best effort to maintain in full force and effect all property damage,
liability and other insurance it had i€n effect on January 1, 2001, and to transfer such insurance to
District if requested at close of escrow, provided that the insurance premiums on any such
transferred coverage shall be pro-rated as of close of escrow.
12. Authorization:
Company warrants that the execution of this Agreement and conveyance of said water system
and properties has been duly and regularly authorized by the Board of Directors and the
stockholders of Company in accordance with applicable law. District warrants that the execution
of this Agreement and acceptance of the water system and properties has been duly and
regularly authorized by its Board of Directors at a meeting held in accordance with applicable law.
13. Future rates and financing of improvements:
After the close of escrow District will charge the customers of Company according to the
customary rates, fees and charges as apply to all other customers of District, except that
customers in the service area described in Exhibit B shall also pay the monthly surohargerate
component as--described in Paragraph 3 above. All ex+sting—improved---lots with existing
connections to Company's water system shall be served by District without paying District's
connection and facilities fees. All vasaat-lots which do not have connections. and the owners of
which do not decide to become rate-paving customers of Company as set_forth below. t4at or
which connections are subsequently 2re-4uRt--upondesired shall be required to pay District's
connection and facilities fees-
Owners of vacant lots may choose to become rate-paying customers of Company, if said decision
is made prior to January 1, 2002. District will continue their status as a customer provided said
customer pays the usual monthly water rate, pus I�includino the rate component
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described in Paragraon 3 above. After the close of escrow said vacant lot owners will be
considered regular customers of District and would not be required to pay the District water
facility fee at the time of construction, provided the monthly charges have been paid in full during
the entire period leading up to the date of connecting to the District water system.
14. Litigation and undisclosed liabilities:
Company states to the best of its knowledge that it is neither presently engaged in any legal
action to recover money due it nor damages sustained by it nor is there, to the best of Company's
knowledge, any action at law or equity, before or by any federal, state, municipal, or other
governmental department, commission board, bureau, agency or instrumentality, or, other person_
pending,-or threatened against Company or relating to or affecting Company, its business, assets
or properties or any basis for such action, suit proceeding, claim, investigation, audit, inquiry or
hearing, except as disclosed below.
Company states to the best of its knowledge that, except as set forth in Company's financial
statements, there are no debts, liabilities or obligations, fixed or contingent to which Company, its
business or assets are subject, other than those incurred in the ordinary course of business
consistent with past practices. Company further warrants that it is not a party to nor are its assets
bound by any agreement not entered into in the ordinary course of business consistent with past
practices, any indenture, mortgage, deed of trust, lease or any agreement that is unusual in
nature, duration or amount, including, without limitation, any agreement requiring the performance
by Company of any obligation, calling for consideration of more than $1,000. Company warrants
that it is not a party to, nor is Company or any of its assets bound by, any agreement that is
materially adverse to the business, assets, prospects or financial condition of Company.
Company discloses that the water storage tank located at the Strand site is in violation of the
original use permit in that it encroaches four feet into the twenty-foot road setback.
Company further discloses that it has an obligation to contribute to maintenance of Juniper Hills
Homeowner Association for road maintenance to gain access to well 20 and Somerset and
Strand tanks. The quarterly fee is approximately$455.
15. Agreement shall not cause breach or violation:
Neither the entry into this Agreement nor the consummation of the transactions contemplated
hereby will result in or constitute any of the following:
A. A breach of any term of this aAgreement;
B. A default or any other event that would be a default, breach or violation of the Articles of
Incorporation or By-Laws of either party or of any lease, franchise, trust, or other agreement,
instrument, or arrangement to which the parties or their assets are bound;
C. An event that would permit any party to terminate any agreement or policy of insurance or to
accelerate the maturity of any indebtedness or other obligation of Company;
D. The creation or imposition of any lien, charge or encumbrance on any of the assets of
Company; or
E. The violation of any law, regulation, ordinance, judgment, order or decree applicable to or
affecting the parties in their business, assets or financial condition.
15. New transactions:
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Company shall not, prior to the close of escrow, do, or agree to do, any of the following acts
without the prior written consent of District: (a) enter into any contract, commitment or transaction
not in the usual and ordinary course of its business, consistent with past practices, (b) enter into
any contract, commitment or transaction in the usual and ordinary course of business involving an
amount exceeding one thousand dollars ($1,000) individually or two thousand dollars ($2,000) in
the aggregate, (c) make any capital expenditures in excess of five thousand dollars ($5,000) for
any single item or in the aggregate, or enter into any leases of capital equipment or property
under which the annual lease charge is in excess of one thousand dollars ($1,000).
17. Conduct of business in normal course:
Company shall carry on its business and activities diligently and in substantially the same manner
as they have been carried on in the past, through December 31, 2001, or until the close of
escrow, whichever shall occur later, and shall not make or institute any change in management,
accounting or operations that shall vary materially from the methods used by Company as of that
date of execution of this$Agreement.
18. Publicity:
The parties agree that all notices to third parties and all other public communications concerning
the transactions contemplated by this Agreement shall be jointly planned, coordinated, and
issued between them, and neither party shall act unilaterally in this regard without the prior written
approval of the other, such approval not to be unreasonably withheld or delayed. Nothing in this
paragraph shall prohibit or otherwise limit disclosures which may be required pursuant to
applicable statutes, including but not limited to, the California Public Records Act. Nothing in this
agreement shall limit the ability of the Board of Directors of Company to communicate with its
shareholders.
19. Employment of Glenshire Water System Staff:
District agrees to employee on a full-time basis Mark Thomas, Dennis Sanchez, and Barbara
Cahill, and on a part-time basis Karen Battler. Said employees will be initially employed by the
District as probationary employees and, upon successful completion of the District's probationary
period, shall be employed under the same terms and conditions as customarily apply to District
employees. District will recognize the accrued vacation and sick leave benefits. District will
recognize for purposes of future vacation accrual, an employment date of September 13, 1999 for
Mark Thomas, June 27, 2000 for Barbara Cahill, August 10,1992 for Dennis Sanchez and July
20, 1993 for Karen Sattler. The seniority date for said employees shall be the date they are
employed by District
20. Entire agreement:
This Agreement contains the entire agreement between the parties hereto, and supersedes all
negotiations or prior agreements, and there are no representations or warranties except as
expressly set forth or provided for in this Agreement. Time is of the essence for purposes of this
Agreement. Each party agrees to execute all further documents necessary to implement and
perform the terms and provisions of this Agreement.
21. Survival of warranties and representations:
The representations made herein will be correct and accurate in all material respects as of the
closing date, and shall survive the closing.
22. Notices:
All notices, requests, demands and other communications under this agreement shall be in
writing and shall be deemed to have been duly given on the date of service if served personally
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on the party to whom notice is to be given, or on the third day after mailing if mailed to the party to
whom notice is given, by first class mail registered or certified, postage prepaid, and properly
addressed as follows:
To District: Clerk of the Board
Truckee Donner Public Utility District
P.O. Box 309
Truckee, California 96160
To Company: Glenshire Mutual Water Company
14630 Glenshire Drive
Truckee, California 96161
23. Governing law:
This Agreement shall be governed and construed in accordance with California law.
24. Dispute resolution:
The parties agree that in any dispute or controversy that may arise after the effective date as a
result of the terms and conditions of the Agreement or relationship between District and Company
under this Agreement, if said dispute or controversy cannot be resolved by mutual agreement,
then and in that event the dispute or controversy shall be settled by arbitration in accordance with
the commercial arbitration rules of the American Arbitration Association, except that one
arbitrator, who shall be approved by both parties to this Agreement, shall hear and decide such
controversy or claim. Judgment upon the award rendered by the arbitrator may be entered in any
court of competent jurisdiction. Any and all arbitration hearings shall be held in Nevada County.
25. Severability:
If any term or provision of this Agreement, or the application thereof to any person or
circumstances, shall to any extent be invalid or unenforceable, the remainder of the Agreement,
or the application of such term or provision to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by law. The parties
acknowledge that the provisions of this Agreement were negotiated by both parties hereto, and
the language hereof shall not be interpreted for or against either party.
26 Third-Party Beneficiaries
It is expressly understood and intended by the parties to this Agreement that it shall be for the
mutual benefit of the parties hereto is not beino entered into for the benefit of any third party. and
that any benefit which m y accrue to any third pa ty as a result of this Agreement is purely
incidental in nature.
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