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<br />6.2A <br />Page 2 <br /> <br />We expect the discussions and negotiations leading to a new agreement will be <br />complex and technical as regards both the water supply and the financial <br />provisions. <br /> <br />2. BAWSCA <br />BAWSCA was formed in the spring of 2003 by unanimous decisions of the <br />governing bodies of city and special district members. The State law that <br />authorized BAWSCA's formation was enacted in 2002, one of three landmark <br />pieces of legislation supported by the Bay Area Water Users Association (the non- <br />profit corporation that preceded SA WSCA and that played a leading role in the <br />negotiations that culminated in the 1984 water sales contract). These bills were <br />supported by the cities, water districts and other water suppliers now represented <br />on BAWSCA's board of directors and were voted for by the overwhelming majority <br />of State legislators. <br /> <br />3. BAWSCA Aqencies' Objectives <br />Some of the specific elements that contribute to each of these goals include: <br /> <br />a. Reliable SuPPlv <br />. Completion of the seismic rehabilitationlWSIP on time and on budget. <br />. Commitment to good system maintenance practices in the future. <br />. Equal treatment in delivery of water by San Francisco to customers inside <br />and outside of San Francisco in the event of a major system disruption. <br />. Management of the system by San Francisco so that generation of <br />hydroelectric power at Hetch Hetchy remains subordinate to providing a <br />reliable water supply to the Bay Area. <br />. Firm individual entitlements for each agency, with flexibility to trade water <br />entitlements, and water, among BAWSCA agencies. <br />. Ability for BAWSCA to "wheel" water from outside sources during drought. <br /> <br />b. High Quality <br />. A commitment by San Francisco to deliver potable water requiring no <br />additional treatment. <br />. Prompt notification of possible Safe Drinking Water Act violations or <br />changes in water quality affecting individual customers. <br /> <br />c. F air Price <br />. In general, agencies expressed desire to preserve the basic cost <br />allocation architecture of the existing Master Contract: <br />o Cost of water to be limited to facilities and services and benefit <br />wholesale customers (i.e., no in-City costs, no Hetch Hetchy power <br />costs, unless power revenues also shared.) <br />o Costs of regional facilities allocated between San Francisco and <br />wholesale customers on basis of relative usage. <br /> <br />Page 2 of 3 <br />