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12/06/2010 percentage cutback or Santa Clara's percentage cutback, or both, is smaller than the highest percentage cutback of any other Wholesale Customers, the Weighted Shortage Allocation (in mgd) of San Jose or Santa Clara, or both, will be reduced so that the percentage reduction of each is no smaller than that of the Wholesale Customers' otherwise highest Weighted Percentage Cutback. The amount of allocation (in mgd) removed from San Jose and/or Santa Clara will be reallocated among the remaining Wholesale Customers in proportion to the Weighted Shortage Allocation of each. Section 2.2.5 Step Five: Adjustment for Minimum and Maximum. Cutbacks. Using the Adjusted Weighted Purchase Cutbacks, either a 10% minimum cutback or maximum cutback, as defined below, is applied to any agency whose Adjusted Weighted Purchase Cutback falls outside this range: - A minimum 10% cutback is applied to the individual agency Adjusted Weighted Allocation, with the reapportioned water being placed in the hardship bank for allocation to East Palo Alto. A maximum cutback of the average cutback plus 20% (e,g.15% average cutback results in a maximum cutback of 15% + 20% = 35 %) is applied to the individual agency Adjusted Weighted Allocation, with the water necessary to meet that level being subtracted in proportion to each Wholesale Customer's Adjusted Weighted Allocation from all remaining agencies, except those at agencies subject to the minimum cutback above. The result is the Adjusted Minimum / Maximum Purchase Cutback, expressed as a percentage. Section 2.2.6 Step Six: Adjustment to Provide Sufficient Supply for East Palo Alto In order to provide for sufficient water supply for water customers served by the City of East Palo Alto (EPA), the maximum Final Purchase Cutback applied at any given time to EPA will be equal to 50% of the Overall Average Wholesale Customer Reduction. The water needed to accormnodate the guaranteed maximum cutback to EPA will be provided in two ways: - First, water from the hardship bank provided by the 10% minimum cutback will be first added to the EPA Adjusted Weighted Purchase Allocation, and Second, the balance of water needed for EPA will be deducted on a prorated basis from those agencies with a pre- drought residential per capita water use greater than 55 gallons per capita per day (as documented in the most recent BAWSCA Annual Survey) in proportion to each agency's Min. /Max. Adjusted Allocation and who are not subject to the minimum and maximum reductions already applied per Section 2.2.5 The result is the Allocation with EPA Adjustment, expressed as an mgd. -4- 2560M.1 #15067 MUFF # 802