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7A The existing eontract which resulted from legal action in 1984 expires on June 30, 2009. Page 2 In anticipation, City Council on September 25, 2006, authorized BAWSCA to negotiate a Master Water Contract with San Francisco (Resolution No. 14734) and Chu Chang, current Community Development Services Director, was designated fio represent the City during these negotiations. Other member agencies taok similar action at that time. The BAWSCA negotiating team has been assertive in their attempts o�er the past three years to arrive at terrns and conditions to secure potable water of high quality, in reliabie supp�y, at a fair price effective as of July 1, 2409. Although al� of the initial objectives of the BAWSCA negotiating team were not achieved and some issues remain unaddressed by the provider, staff believes that terms and conditions are acceptable, workable, and provide some future flexibi[ity. The proposed Water Supply Agreement is fo�` 25 years with pro�ision for finio, 5-year extensions. Key terms of#he proposed agreement are as foliow. Water Supplv: « Reconfirms the wholesale agencies collective supply assurance of 184 million gallons per day (MGD) as well as the agencies' individual "supply guarantees." The supply guarantees are transferrab�e between agencies. • San Francisco agrees to deliver water that meets afl applicable drinking water standards. This has been the practice historically, but is now in the WSA. • San Francisco agrees to complete the Water Sys#em 4mprovement Program t1NSiP} by 2fl'�5 and requires the SFPUC to maintain the regional water system and submit reports on the status of the system. . • San Francisco agrees to operate the regional water system to give priority to water supply over electric power generation. This has been the practice since the 1987- 1992 drough#s, but is now pa�t o�the WSA. • During water shor#ages, a�aifable water wil! be div�ded between San Francisco and the wholesale cusfiomers as agreed to in the Interim VIlater Shortage Allocation Plan tIWSAP). How this water alloca�ion wil! be apportioned between wholesale cusfiomers is no# addressed by the WSA. Vllholesale cusfiomers will need #o either adop#the methodology of the IWSAP, or nego#iate an alternate mechanism. • Allows BAWSCA or individuai wholesale cus�omers to transport, or iiwheel" water through the regiona� water system during water shortage periods subject to water quality considerafiions. implementation of Interim Supply �imitation: • Implements the decision made by the SFPUC when it adopted the VI/SiP in conjunction with San Francisco's approval of the Program Environmental Impact Report �PEfR} of fihe WSIP with respect to the Interim Supply Limitafiion in effect unti! December 31, 2018. The Interim Supply Limit.ation limits water sales from San Francisco's watersheds to 81 MGD for San Francisco and 184 MGD for the wholesale customers for a total limitation of 265 MGD. The INSA requires San Francisco to decide �f it will increase the 184 MGD supply assurance by December 31, 2018. • San Francisco mus� decide how to divide up the wholesale customers 184 Interim Supply Limi�ation among the wholesale customers by Decerr�ber 2010. These allocations are separate and distinct from the 184 MGD supply assurance and the � individual supply guarantees.