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7.3.4 Accounting Treatment of Certain Capital Costs <br /> The cost of Project facilities to be owned by SBSA, described under Items <br /> 1, 2 and 10 in Attachment One,will be separately tracked and when the <br /> facilities are accepted, those costs will be treated for accounting purposes <br /> as capital assets and will thereby increase Redwood City's Net Assets in <br /> SBSA determined pursuant to Section 7.1 of the SBSA Joint Exercise of <br /> Powers Agreement. This will be accomplished either by awarding <br /> separate contracts, one of which covers only Facilities 1, 2 and 10, or by <br /> structuring the bid document so that the costs of Items 1, 2 and 10 can be <br /> segregated. The cost of Facilities 1, 2 and 10 will be entirely credited to <br /> City, rather than allocated among all members of SBSA. <br /> 7.4 Operating and Maintenance Costs <br /> 7.4.1 City will pay SBSA for Recycled Water produced and delivered at the <br /> Point of Delivery. City will pay SBSA amounts due within twenty (20) <br /> business days after receiving a monthly invoice from SBSA. City's <br /> payment will be determined each year in accordance with the provisions <br /> of the Cost Allocation and Budget Setting Methodology set forth in <br /> Attachment Nine. <br /> 8.0 TERM AND TERMINATION <br /> 8.1 Term <br /> The term of this Agreement will commence on the Effective Date,will extend at a <br /> minimum for the term of revenue bonds issued by City to finance construction of <br /> the Project, and will thereafter continue until terminated. <br /> -19- 1091374.7 <br />