2010-024-PPW Job No. 09-06 SJ Water AgreementRESOLUTION 2010-024
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER/EXECUTIVE DIRECTOR
TO EXECUTE A PROFESSIONAL DESIGN AND CONSTCRUTION SERVICES
AGREEMENT WITH SAN JOSE WATER COMPANY
TO PROVIDE WATER SERVICES FOR
PPW JOB NO. 09-06 -LOS GATOS LH3RARY PROJECT
WHEREAS, the 2009-10 Capital Improvement Program budget includes funding
for the for PPW Job No.09-06 Los Gatos Library Project; and
WHEREAS, water service is needed for both domestic and fire usage for this project;
and
WHEREAS, it is necessary for the Town Council/Redevelopment Agency to secure the
services of San Jose Water Company to provide design and construction service for the Los Gatos Library
Project.
NOW, THEREFORE, BE IT RESOLVED that the Town Council/Redevelopment
Agency of the Town of Los Gatos hereby approves the attached Agreement (Exhibit A) with San Jase
Water Company to provide design and construction services in connection with the Los Gatos Library
Project in an amount not to exceed $331,600.
BE IT FURTHER RESOLVED that the Town Manager/Executive Director is hereby
authorized and directed to execute said agreement on behalf of the Town Council/Redevelopment
Agency.
PASSED AND ADOPTED at a regular meeting of the Town Council/Redevelopment
Agency of the Town of Los Gatos, California, held on the 16th day of February, .2010 by the following
vote:
COUNCIL/AGENCY MEMBERS
AYES: Joe Pirzynski, Steve Rice, Barbara Spector, Mike Wasserman, Mayor Diane McNutt
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
~~~~ Mc~~
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CL ~ MINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
EXHIBIT A
San Jose
Wator
Company
'110 W. Taylor Street
Snn Jose, CA 95110-2131
January 27, 2010
I~.evin Rohani, P.E,
Town Engineer '
Town of Los Gatos
Packs & Public Worlcs Department
41 Miles Avenue
Los Gatos, CA 95030
REFERENCE;
Dear Mr. Rohani:
Los Gatos Library
Villa Avenue
San Jose Water Company
Water 5erviees Administration
1265 S. Bascom Ave•, San Jose, CA 951.28
Facsimile; 408-279-7889'
Writer's Direct Dial; 408-279-7874
As requested, our Engineering Department has prepai:ed final plans artd a final estimate of
cost to relocate and install water facilities for your project as indicated below. fur plans and cast
estimate are subject to review and revision after 30 days.
The total estimated cost is $331,600. The $15,000 engineering deposit we received will
be credited against this total if you sign our agreement and have us proceed with construction
within six months from the date of this letter. Please review our final plans that are enclosed for
your information. The following table is a brealcdown of our estimated casts. They are based on
a normal construction sequence of underground utilities (i,e., water facilities construction to
follow sanitary and storm lines, -with joint trench for PG&E, etc. to fallow water), Additional
costs will be incurred if joint trench is present prior to our installation.
440' -16" DICL Pipe $225,530
30' - 6" DICL Pipe 13,710
3 - 6" Fire 1'-Iydrant Installations 46,080
1 - 6" Private Fire Protection Service 13,270
2 -2" General Metered Services w/regulators 15;610
Raise to Grade (1) Valve Box 2,830
Retirement of Existing Facilities ~ 1 X730
Retirement of Existing Services 7,860
Federal & State Tax Gross-Up 4,980
TO'I`AL $331,600
Kevin Rohani
January 27, 2010
Page Two
Enclosed, in duplicate, is an agreement oavcring the worlc outlined above. If our proposal
is acceptable, and you wish us to process this job further, PLEASE. SIGN .BOTH COPIES OI+
TI3E AGREEMENT, l3UT LEAVIia UNDATED;, and return them to our South Bascom Avenue
address with your deposit in tlae amount •of ~3].G,600 (final estimate less engineering deposit).
Upon acceptance and execution of the agreement by this company, a signed original will be
rettuned to you, In addition, PLEASE SIGN, DATE, AND RETURN TO US TIDE COPY OF
TIIIS LETTER WITH YOUR ORIGINAL SIGNATURE AS YOUR
ACKNOWLEDGMENT OF' YOUR I+'URTPIER OBLIGATIONS TO ErrECTIVELY
COMPLETE THIS PROJECT. Also indicate where monthly billings should be sent.
Monthly billings for Private Fire Protection Service begin upon completion of the
installation. Monthly billings far General Metered Service commence upon installation. of the
meter. Copies of our rate schedules are enclosed for your information. Please keep in mind that it
is your responsibility to contact our Customer Service Department, at 408-2'79-'7900, when you
are ready to close-your account on the service being retired. Unless we. are contacted, you will
continue to receive a bill on this account and be liable for payment. To continue or cancel any
auto-payment processing, ebill, epayment transactions, or any other related programs associated
with your accounts, you also need to contact our Customer Service Department.
As noted o1i the drawing, it will be your responsibility to .install an approved Reduced
Pressure Principle (RPP) type baclcflaw prevention assembly on the 6" Private Fire Protection
Service. This assembly must be installed above ground immediately following the service
connection.. In addition, you will need to install an approved RPP type baclcflow prevention
assembly an each of-the new General Metered Services. Those assemblies must also be installed
above ground .immediately following. the meters. Any deviation from the locations indicated must
be approved in advance by our Baclcflow Prevention Department. We have enclosed a list of
approved .models for your information.
Note: If you plan to integrate your fire department connection (F'DC) into. the
Baclcflow prevention assembly, make sure the location is acceptable to the fire
departnent• It may be that the required location of the FDC differs from the•required
location of the backflow assembly, thereby making the integration infeasible.
The. RPP assemblies must be installed before we will allow water use through the services.
To initiate service you must contact our Baclcflow Prevention Department, at (408) 2797$'72,
who will perform a field inspection and test. Please provide them with 24-hour notice.
Also, San Jose Water Company recommends that a pressure regulator be installed on
private service lines that will prevent pressure in excess of 80 PSI from entering a structtue.
Although a pressure regulator will be installed in the meter box, the set pressure is established in
the field. Pressure at the meter may be as high as,120 PSI. Please contact your plumber regarding.
this matter. It will be your responsibility to connect your private piping to our service
connections,
Kevin Rohani
January 27, 2010
Page Three
So we can avoid .preliminary inspections, we would appreciate your written notice as to
when curb and gutter .and .lot line boundary stakes will be completed. No schedule can be
established for installation o:f the facilities until such preliminary work is completed.
Also, please furnish us the building address (e-mail submittal acceptable). Since you
already have a building permit, the building address is available at the local building department
in charge of your construction. The building address is needed. to produce the installation orders
that our contractor will need prior t'o the start of work.
Lastly, San Jose Water Company will need easements from the owner of the .property for
our facilities, and it will be your responsibility to provide, clear, grade, and stake these easements.
Please have a legal description and plat prepared for the areas indicated by blue shading on the
plan. You will need to submitthis description to us for approval -and preparatiozl of the easement
document. You will also need to hire the services of a tide company to close the easement
transaction, and to issue a policy of title insurance in the amount of $31,600 in the name of San
Jose Water~Company, a California corporation. We must receive a conformed recorded copy of
the right-af way before we can release this job to our Construction Department for scheduling. In
addition, please sign, date, and return the enclosed Encroachment Permission Letter to formalize
placement of our meters and meter boxes. ~ ''
Finally, please submit one copy of the RECORDED PARCEL MAP, APPROVED
IIYIPROVEMENT PLANS, and ,the APPROVED FIRE, SPRIIVKLi•;R UNDERGROUND
PIPING PLANS when available. Your job will not be released for scheduling without these
plans. Furtherzxzore, since our plans and estimate are based on an unrecorded snap and
unapproved plan, any changes made to these items due to recording and approval requirements
may result irz the need for us to re-engineer our installation. You will be responsible far the cost
of additional engineering and water facilities, if so required, and associated time delays.
In sunamazy, if you would like us to proceed with the installation, please provide us with
tlae following;
1) A check in the amount of $316,600.
2) A signed and dated copy of this letter that includes the address where
monthly billings should be sent.
3) Both copies of the enclosed agreement, signed,'but left undated.
4) Building Address.
5) Legal and Plat Description.
6) Encroachment Permission Letter.
7) Recorded Parcel Map.
.Kevin Rohani
January 27, 2p10
Page Four
8) Approved Improvement Plans,
9) Approved Fire Sprinkler Underground Piping Plans
A constttitction schedule is established by our Construction Department when they receive
the job package. The package is submitted to them by our Engineering Department
approximately 6 - 10 weeks after we have received the aforementioned items, depending upon
availability of labor and materials and permit approvals.
As a final note, please be aware •that you cannot make pressure tests of your piping against
.our facilities. If you are required to make pressure tests of your underground piping, please cap
the piping to perfoxm the test, and do not use our valuing to test against. T11is notification applies
to both the Private. Fire Protection Service and General Metered Service connections.
If you have any questions,. please contact this office at (408) 2797874.
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NB09-024 (I'inal)•doc
)/nclosures
cc; Chad Browning, Sandis
ACKNOWLEDGED AND AGREED
firm (Responsible Patty)
Signature
DAMES R. BARITEAU
Senior Water Services Representative
MONTHLY BILLINGS TO:
Name
Address
Print Nance City
Title Zip Code
Date Phone Number
SAN JOSE WATER COMPANY
FIRE MAIN EXTENSION, IIYDRANT
• AND/OR
PRIVATE FIRE PROTECTION .SERVICE
(may include work on general metered service]
AGREEMENT
TH1S AGREEMENT, made and entered into this ~ day of
20 , ~ by and between the person or persons listed in
paragraph l hereof, hereinafter collectively referred to as "Applicant," and SAN JOSE WATER
COMPANY, a California corporation, hereinafter referred to as "Utility,"
WITNESSETl:I
WHEREAS, Applicant is the Owner of certain real property situated in the County of
Santa Clara, State of California; and
• WHEREAS, Utility is presently legally operating and maintaining certain. water facilities
owned by ;Utility in an area in said County of Santa Clara, as more particularly .shown on that
certain map attached hereto marked Exhibit "A" and by this reference made a part hereof, said
facilities being hereinafter referred to as the "Old Facilities"; and .
WIIEREAS, Applicant desires to :have made available mains and/or appurtenances
needed to meet various local ftre protection requirements involving the relocating, removing or
abandoning of the Old Facilities and/or the installation of certain new water facilities,hereinafter
referred to as the "New Facilities" substantially as shown on that certain map attached hereto,
marked Exhibit A, to be installed in accordance with Utility's usual ,practices; and
WHEREAS, upon the terms and conditions herein set. forth Utility is willing to
accomplish. such work upon the New and Old Facilities, said facilities being hereinafter
sometimes referred to collectively as the "Total Facilities", provided that the actual total installed
cost of the same shall be .borne by .Applicant as more particularly set forth below; and
WHEREAS, Utility is willing to furnish water service through and by means thereof at
the rates and in accordance with the .rules of Utility now in force, or that may from time to time
hereafter be lawfully established; and •
WHEREAS, such work is not covered by Utility's Rule 1 S, a copy of which is attached
hereto as Exhibit "B"; and
V~IHEREAS, Utility Will supply only such water at such pressures as may be available
fz•om time to time as a result of its normal operations of its system;
NOW, THEREFORE, foz• and in consideration. of the mutual covenants, agreements,
terms and provisions herein contained, it is agreed as follows:
. 1.A~~plicant. The names' and addresses of tlae person ox persons herein collectively
referred to as "Applicant" axe as follows: •
Name: Town of Los Gatos
Address: 41 Miles Avenue
Los Gatos, CA 95030
2. Applicable )caz•zn. This agreement is entered into pursuant to the requirements
and in accordance with the form of agreement in effect and on file with the California Public
Utilities Commission (Commission). This Agreement does not, therefore, require ~peciiic
authorization of the. Commission to carry out its terms and conditions.
3. Applicant's Deposit. The estimated total installed cost of Total Facilities;
hereinafter referred to as the "Estimated Cost," is $33L600.00. 'Applicant leas advanced to Utility
an amount equal to the Estimated Cost, receipt of which amount is hereby acknowledged by
Utility.
The Estimated Cost shall incLudc any income tax component authorized by the
Comzrzission at the date of execution of this agreement.
4. Installztian of facilities. Utility agrees that it will, as soon as necessary
materials and labor are : available, .and necessary permits, franchises, licenses or other
governmental authorizations, easements aiid .right of way satisfactory to 17ti1ity have been
executed by Applicant and delivcxed to Utility, commence azid prosecute to completion. with all
reasonable diligence the. wozlc of installing the Total Facilities. Utility reserves the right to mare
such changes in design or materials as it may deem necessary. if such change results in a 10% or
greater increase in the Estimated Cast, Utility shall .give written notice to .Applicant of the
amount of such cost increase and Will demand an additional deposit to cover the increased cast.
if witl~iz~ ten (10) days of giving such notice of cost increase;- Applicant gives Utility written
notice to discontinue such work upon the Total Facilities, Utility shall discontinue the .same and
shall fozthwith refund to Applicant tl~.e unexpended poztion, if 'any, of Applicant's deposit. If
Applicant does not give Utility written notice to discontinue such work Within tan (10) days after
such notice of cost increase,. Utility may proceed with such work at its option; Within sixty (60)
days after Utility has ascertained its actual costs of installing the Total Facilities, it will provide
Applicant with a statement of the same showing in reasonable detail the costs incurred for
material, labor and other direct and indirect costs, overheads and total costs, or unit costs or
contract costs, whichever are appropriate. IC such actual construction •costs shall not have been
determined Within one hundred twenty (120) days after coz~zpletion of constzuction woxlc, a
2•
preliminary determination of actual costs shall be submitted, based upon the best available
information at that time. Upon completion of the work upon the Total Facilities, if the actual
total .installed cost thereof including applicable income taxes is greater or less than the total
amount deposited by Applicant hereunder, the difference shall forthwith be paid by Applicant to
Util%ty or refunded by Utility to Applicant as the case may be. It is expressly agreed that there
shall be included in said actual total installed cost any sums paid for materials used in such work
upon the Total Facilities by reason of price increases applicable to such materials. Subject to the
provisions . of this paragraph, no other refund will be. made to the Applicant, far any sums
deposited or to be deposited by the Applicant with the Utility hereunder,
5. Grades. If at the Applicant's request the New Facilities are installed in easements
or rights of way where final .grades have not been established or in streets whose grades have not
been brought to those established by public authority, Applicant, upon written .notice by Utility,
shall deposit with Utility forthwith the estimated cost, including applicable income taxes, as
determined by Utility, of relocating, raising ox Iawering the New Facilities upon establishment of
final grades. Adjustment of any difference between the amount so deposited and the actual cast
of relocating, raising or lowering the New Facilities shall be made within thirty {30) days after
Utility has ascertained such actual cost. Utility will refund the entire deposit including applicable
income taxes relating to such proposed relocation, raising or lowering when appropriate authority
determines that such displaceix~ents are not required.
6. Applicant's. Agreements. Applicant agrees to use its best .efforts to assist Utility
to obtain any and all. permits or other governmental authorizations which may be required £'ar the
installation of the Total Facilities. If for any reason any additional easements are required for the
installation of'the Total Facilities, Applicant will cause the same to be procured in the name of
Utility if such is located on private property, and will cause evidence of such fact to be fuin7ished
to Utility or will cause such easements to be conveyed to Utility, as the case maybe. Applicant's
agreement in this paragraph 6 is in no way limited to those easements and rights of way provided
fox in paragraph ~ hereof
7. Ownership. The Total Facilities to be installed hereunder and all construction
work in connection therewith shall be and remain at all "times the property of Utility, and
Applicant shall have no right, title or interest whatsoever in or to the same.
8. Constz•tYCtion Delay. Utility.shall not be responsible for any delay in construction
resulting from any cause beyond its control, including, without limiting the generality of the
foregoing, any delay resulting from inability to obtain sufficient proper materials and supplies,
labor disturbances or shortages, or weather conditions, or inability to obtain necessary permits,
licenses, franchises or other governmental authorizations. In the event Utility is unable to obtain
sufficient materials to meet all construction requirements necessary to provide adequate seavice
to all its customers, it shall be entitled to allocate materials obtained by it to such construction
projects as in its sole discretion it deems most important to service needs of its customers, and
any delay in construction of the Facilities resulting from any such allocation of materials by
Utility shall be deemed to be a cause beyond its control and it .shall no.t beresponsible for such
delay.
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9. Notices, Any notice which may or shall be given by either party to the other shall
be deemed to have been duly given when. deposited in the United States. mail, registered or
certified, postage prepaid and addressed to the patty to whom such notice is given at the
following .addresses:
To Applicant: Town of Los Gatos
41 Miles Avenue
Los Gatos, CA 95D30
To Utility: San Jose Water Company
110 W. Taylor Street
San Jose,,CA 95110
Either party, by notice, may change the address- to which notice shall thereafter be
addressed,
10: Nattzrc of Obligation of .Applicant. if more than one persozz is named in
paragraph 1 hereof, the obligations of the persons executing this agreement as .Applicant shall be
joint and several obligations. Until Applicant shall, notify Utility in writing to the contrazy, all
refunds hereunder shall. be paid by Utility to:
Town of Los Gatos
41 Miles Avenue
Los. Gatos, CA 95430
without recourse.
11. Successors az~d Assigns. This agreement .shall. inure to the benefzt of and shall
bind. the respective heirs, executors, administrators, successors and assigns of the parties hereto..
12. Utility's Right to Offset. In the event Applicant shall become entitled to a
repayment or refund under the provisions or tlus Agreezxzent, Utility shall have the right at such
time to offset against the amount then due Applicant hereunder the. total amount of any
indebtedness then due or owing by Applicant to Utility,
13. Jurisdiction of Public Utilities Cozrz~niission. This agreement shall at all times.
be subject to such changes or modifications by the California Public Utilities Commission as said
Commission may froze time to time direct in the exexcise ofi its jurisdiction,
IN WI'T'NESS WI-IEREOF, the Parties hexeto have executed this agxeement in duplicate
the day and year first above wxitten.
APPLICANT
SAN JOSE WATER COMPANY
By I3y
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By
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EXHIBIT A
Rule No. 1 S
MAIN EXTENSIONS
A. Genexal Provisions .and Definitions
1. Applicability
a, All extensions of distribution mains, from the utility's basic production and transmission
system or existing distribution system, to serve new cLrstomers, except for those specifically
excluded below, shall .be made under the provisions of this rule unless specific authoxity is
first obtained from the Commission to deviate therefrom. Amain extension contract shall be
executed by the utility and the applicant or applicants for the main extension befoxe the utility
cozx~mences construction work on said extensions or, if constructed by applicant or
applicants, before the facilities comprising the main extension are transferred to the utility,
b, Extensions primarily for fire hydrant, pxivate. fire protection, resale, temporary, standby, or
supplemental service shall not be made under this Wile.
c. The utility may, but will not be required to, make extensions under this rule in easements or
rights,of way where final grades have not been established, ar where street grades have nat
been brought to those established by public authority, Tf extensions are .made when grades
have not been established and' there is a reasonable probability that the existing grade will be
cha.rxged, the utility shall require that the applicant or applicants far the main extension
deposit, at the time of execution of the main extension agreement, the estimated net cost of
relocating, raising or lowexing :facilities upon establishment of final grades. ..Adjustment of
any difference between the amount so deposited and the•actual cost of relocating, xaising ar
.lowering facilities sl~all be made within ten, days after the utility has ascertained such actual
cost. The net deposit representing actual cost is not subject to refund. The entire deposit
.related to the proposed .relocation, raising or lowering shall be refunded when such
displacements are determined by proper authority to be not requixed.
2. Limitation of Expansion
a. Whenever the outstanding advance contract balances reach ~;0 percent of total capital
(defined, for the purpose of this rule, as proprietary capital, or capital stock and surplus, plus
debt and advances for construction) the utility shall so notify-'the Commission within thirty
days. .
b. ~Nhenever 'the outstanding advance contract balances plus the advance ~on a proposed new
extension would exceed SO percent of total capital, .as defined in Section A.2.a. plus the
advance on~ the proposed new extension, the utility, shall .not make the proposed new
extension of distribution mains without authorization of the Cozxirnission. Such aixthorizatiori
may be .granted by a letter from the ixecutive Director of the Commission.
c. Whenever the outstanding advance contract balances reach the above level, the utility shall so
notify the Commission within thirty days.
Rwle 1S -Revised JAn 09, 2004
~,P'~0~9`~' cc~l9~
A. Geza.eral Provisions and Definitions (cozltinued)
3. Definitions
a, A "bona-fide custozxrex," for the purposes of this rule,. shall be a customer (excluding any
customer formerly served at the same location) who has given satisfactory evidence that
service will be~ reasonably permanent to the property which has been improved with a
building of a permarzezit nature, and to which service has commenced. The provision of
service to a real estate developer or builder, during the construction or development period,
shall riot establish lum as a boric-fide customer,'
b. A "real estate developer" or "builder," for the purposes of this rule, shall include any
individual, association of individuals, pai-tnexslup, or corporation that divides a parcel of land
into- two or more portiions, or that engages in the construction and resale of individual
stzuctlzres on a continuing basis,
c. The "adjusted construction cost," for the purposes of this rule, shall be reasonable mad s11a11
not exceed tlae costs recorded in conformity with generally accepted water utility accoturzting
practices, and as specifically defined in the Uniform System of Accounts for Water Utilities
prescribed by the Commission fox installing facilities of adequate capacity for the service
requested. If the utility, at its option, should install facilities with a larger capacity or
resulting in a greater footage of extension than required for the service requested, the
"adjusted construction cost," far the purpose of this rule, shall be determined by the
application of an adjustment factor to actual construction cost of facilities installed. This
factor shall be the ratio of estimated cost of required facilities to estimated. cost of actual
facilities installed.
4, Ownership Design and' Construction of Facilities
a. Any facilities installed hereunder shall be the solve property of the utility. In those instances
in which title to certain portions of the installation, such as fire hydrazlts, will be held by a
political subdivision, such facilities shall not be included as a part of the. ruain extension
uzader this zule, and will neither be owned by the utility .nor subject 'to refund under the
pz•ovisions of Section C.2. ofthis rule.
b. The size; type, quality of materials, and their location shall be specified by the utility; and the
actual construction shall be done by the utility ox by a constructing agency acceptable to it:
Where the property of an applicant is'located adjacent to a right-of=way, exceeding 70 .feat in
width, foz° a stz•eet, highway; or other public purpose, regardless of the width of the traveled
way or pavement; ox on a freeway, waterway, or railroad right-of way, the utility may elect. to
install a main extension on the same side thereof as t11e property of the applicant, and the
estimated, and the adjusted construuction .costs in .such case shall be based upon such an
extez~.sion. .
A. General Provisions and Definitions (continued)
4. Ownership, Design, and Construction of Facilities, :(continued)
d. When an extension must comply with an ordinance, regulation, or specification of a public
authority, the estimated and adjusted construction costs of saki extension shall be based upon
the facilities required to comply therewith.
e. If the following provisiors for water conservation are included in local,building codes and/or
ordinances, the main extension contract shall contauz these provisions.
(l) All interior plumbing in new buildings shall meet the following requirements:
(a) Toilets shall not use more than '3 '/z gallons per flush, except that toilets and urinals
with flush valves .maybe hrstalled.
(b) Shower heads shall contain flaw controls which restrict flow to a maximum of
approximately 3 gallons per minute.
(c) Kitchen and. lavatory faucets shall have flow controls which restrict flow to a
maximum of approximately 2 gallons per minute, .
(2) All new parks, median strips, landscaped public areas and landscaped areas surrounding
condominiums, townhouses, apartments and industrial parks shall have awell-balanced
automatic irrigatioxi .system designed by a landscape architect or other competent person,
and shall be operated by electric time controller stations .set far early morning irrigation.
S. Estimates, Plans, and Specifications
a. Upoxi request by a potential applicant for a main extension of 100 feet or less, the utility shall
,prepare, without charge, a preliminary sketch and rough estux~ates ~of the cost of installation.
to be advanced by said applicant.
b. .Any applicant for a main extension requesting the utility to prepare detailed plans,
specifications, and cost estimates shall be required to deposit with the utility an amount egL7a1
to the estimated cost of preparation of such .material. The utility shall, upon request, make
available within 4S days after receipt of the deposit referzed to above, such plans,
specifications, and cost estimates of the proposed main extension. If the extension is~ to
include oversizing of facilities to be done at-the utility's expense, appropriate details shall be
set forth in the plans, specifications, and cost estimates.
c. In the event a main extension contract with the utility is executed within 1$0 days after the
utility furz~.ishes the detailed plans and specifications, the deposit shall become a part of the
advance, and shall be refunded in accordance with the terms of the main extension contract.
If .such contract is not so executed, the deposit to cover the cost of preparing plans,
specifications, .and cost estimates, shall be forfeited by the applicant for the main extension
and the amount of the forfeited deposit shall be credited to the account or accounts to which
the expense of preparing said material was charged.
A. General 1rovisions and Definitions (continued)
5. Estimates, Plans, and Specifications (continued)
d. Wl~zen detailed plans, specifications, and cost estimates are requested, the applicant for a main
extension shall :Furnish a map to a suitable scale showing the street and lot layouts and, when
requested' by the utility, contours or other indication of the. relative elevation of the various
parts of the axea to be developed. If' changes axe made subsequent to the presentation of this
map by the applicant, and these changes requite additional expense in revising plans,
specifications, and cost estimates, this additional expense shall be borne by the applicant, not
subject to refund, and the additional expense thus recovered shall be credited to tl~:e account
or accounts to which the additional expense was charged.
6. Timing_and Adjustment of Advances
a. Unless the applicant for the main. extezzsian elects to arrange for the installation bf the
extension himself,. as perrriitted by Section C.l .e., the full amount of the required advance or
an acceptable surety bond must be provided to the utility at the. time of execution of the main
extension agreement..
b. 7f the applicant for a main extension posts a surety band in lieu of cash, such surety bond
must be replaced with. cash not less than ten calend~irr days bafare eonstnictnon is to
cozx~rnence; provided, however, that if special facilities are required primarily for the sez-vice
requested, the applicant for the extension may be required to deposit suffzciezzt cash to cover
the cost of such special facilities before they are ordered by the utility.
c, An applicant for a main extension who advances funds shall. be provided- with a statement of
actual construction cost and adjusted construction cost slaowing in reasonable detail the casts
incLtz-red far maternal, labor, any other direct and indirect costs, overheads, and total casts; or
Unit costs, or contract costs, whichever az•e appropriate.
d. Said statement shall be submitted within sixty days after the actual construction costs of the
installation Have been ascertained by the utility. In the event that the actual construction
costs for the- entire- installation shall not 'have. been determnned within 12d days after
completion of construction work, a prelimuzazy determination of actual and adjusted
construction costs shall be submitted, based upon the best available information at that time..
e. Any differences between the adjusted construction costs and the amount advanced shall be
showzr as a xevisior~r of the amount of advance and shall be payable within thirty days of date
of srrbrnission of statement.
7. Assignrrzent of Main Extension Contracts
Any contract entered- into under Sections B and C of this rule; or under similar provisions of
farmer rules,. maybe assigned, after settlerrzent of adjusted construction costs, after written notice.
to the utility by the holder of said contract as .shown by the utility's records. Such assignment
shall apply only to those refunds which become due more than thirty days after the date of receipt
' by the utility of the notice of assigzuxzent. The utility shall not be required to make any one
refund payment under sucla contract to more than a single assignee.
A, General Provisions and Definitions {continued)
8. Interpretations .and Deviations
In case of disagreement or dispute regarding the application of any provision of this rule, or in
circumstances where the application of this rule. appears uru~easonable to either party, the utility.,
applicant or applicants may refer the matter to the Cornmissian for. determination.
B, Extensions to Serve Individuals
1. Pam
Extensions of water mains to serve .new individual customers shall be paid for and contributed to
t11e utility by the individual customer requesting the main extension. Calculation of payment
shall be on the basis of a main not in excess of 6" in diameter, except where a larger main is
required by the special needs. of the new customer. The utility shall be responsible for installing
and paying for service pipes, meter boxes, and meters to serve the new individual customer;
provided, however, a Class C or Class D utility, or a Class A or Class B utility district or
subsidiary serving 2,000 or fewer connections, .may accept from individual customers amounts in
contribution as a~connection fee calculated pursuant to the Commission's Connection Fee Data
Form contained in the utility's tariffs.
2. Refunds
If subsequent applications far water service are connected directly to the main extension
contributed by the original individual customer, such subsequent applicants shall pay to the
utility an amount equal to the cast of 100 feet of the original extension. Such amounts shall be
immediately refunded by the utility to the initial customer who originally paid for and
contributed the main extension to the utility. Total payments to the initial customer by
.subsequent :applicants for water service who, are connected directly to the extension shall not
exceed the original cost of the extension. No refunds shall be made after a period of ten years
from completion of the main extension.
C. ,Extensions to Serve Subdivisions, Tracts, Housing Projects Industrial Develo menl:st Commercial
Buildings, or. Shopping_Centers
1, Advances
a. Unless the procedure outlined in Section C. l .c., is followed, an applicant fox a main extension
to serve a new subdivision, tract, housing project, .industrial development, commercial
building, or shopping center shall be xequired to advaa~.ce to the utility, before construction. is
commenced, the estimated reasonable cost'af the extension to be actually installed, frorr~ the
nearest utility facility .at least equal in size or capacity to the main required to serve :both the
new customers and a reasonable estimate of the potential customers who might be served
directly from the main extension. The costs of the extension shall include necessary service
stubs or service pipes, fittings, gates and housing therefore, and meter boxes, but shall not
include meters. To this shall be added the cost of fire hydrants when requested by ~ the
applicant for the main extension or required by public authority, whenever such hydrants are
to become the propexty of the utility.
C. Extensions to Serve Subdivisions Tracts, Housing Pz~ojects, Industrial Developments, Commercial
Buildings, or Shopping Centers (continued)
1. Advances (continued)
b. If special facilities consisting of itelxls not covered by Section C.l.a. are .required for the
service requested and, when such facilities to be installed will .supply both the main extension
and other pa1-ts of the utility's systerw,, at least 50 percent,of the design capacity (in gallows,.
gpm, or othex appropxiate units) is required to supply the main extension, the cost o:f s~.~ch
special :facilities maybe included in the advance, subject to refiu~d, as hereinafter provided,
along with refunds of the advance of the cost of the extension facilities described in Section
C.1.a, above.
c. In lieu of providing the advances in accordance with Sections G1.a. and C.l .b., the applicant
for a main extension shall be permitted, if qualified in the judgment of the utility, to construct
and .install the facilities Himself, oz arrange for their installation pursuant to competitive
bidding procediues initiated by Him and liixuted fo the qualified bidders. The cost, including
the cost of inspection aaad supervision by the utility, shall be paid- directly by applicant. The
appli.catlt shall provide the utility with a statement of achxal construction cost in reasonable
detail. The anaaunt to be treated as an aclvance subject to refund shall be the lesser of (1) the
actual cost, or (2) the price quoted in the utility's detailed cost .estimate.. The installation sl~.all
be in accordance with the plans and specifications submitted by the utility pursuant to Section
A.S.b.
d. If, in the opinion of the utilty•it appears that a proposed main extension will not, within. a
reasonable period, develop sufficient revenue to make the extension self-supporting, or if for
sorne other reason it appears to the utility that a main extension contract would place an
excessive burden on customers, tl~e utility.may'require nonrefundable contributions of plant
facilities from developers in lieu of a main extension contract. '
If an applicant foi° a main. extension contract who is asked to contribute the facilities believes
such request to be unreasonable, such applicant may refer the matter to the Commission for
determination, as provided for in .Section A.8. of this rule;
2. Refunds
a. The amount advanced under Sections C.l.a.; C.l.b., asid C.l.o, shall be subject 'to reftiu~d by
the utility, in cash, without interest, to the party or patties entitled thereto as set forth in the
following t~vvo paragraphs. The total amount so refunded shall not exceed the total of the
amount .advanced and for a period not to exceed A 0 years after the date of the contract.
b. Payment of refunds shall be made not later than June 30 of each year, beginning tlxe .year
following execution. of contract, or not later than 6 months after the contract anniversary date
if on an anniversary date basis.
C, Extensions to Serve Subdivisions Tracts .Housing 'Projects Industrial Developments, Commercial
Buildings, or .Shopping Centers (continued)
2. Refiirids (continued)
c.. Whenever costs of main extensions and/or special facilities have been advanced pursuant to
Section C.l.a., C„l.b., or C.l.c., the utility shall annually refund to the contract holders an
amount equal to 2-1/2 percent of the advances until the principal :amounts of 'the contracts
have been fully repaid,
Whenever costs of special facilities have been advanced pursuant to Sections C.l .b. or C.l .c,,
the amount so advanced shall be :divided by the number of lots (or living units; whiehever'is
greater) which the special facilities are designed to serve, to obtain an average advance per
lot (or living unit) for special facilities. When another builder applies for a main extension to
serve any lots for which the special facilities are to be used, tyre new applicant shall, in
addition to the costs of his proposed .main extension, also advance an amount for special
.facilities. This amozuat shall be the average advance per lot for special facilities for each lot
to be. used less 21/2 percent of the average advance for each year in which refunds have been
due and payable on the original contract, prorated to June 30, or the contract anniversary date
on a monthly basis. .
The amount advanced to the utility by the .new applicant shall be immediately.refunded to the
holder o~ the original contract, which included the cost of the special facilities, and the
original contract advance wild be reduced accordingly, The utility will thenceforth refund 2-
1/~ percent annually on each of the contract amounts, as deterrriined above, to the holders of
the c.ozatzacts,
Advances and refunds based on additional builder participation will be detezmined in a
similar manner.
In no case shall the refund on any contract exceed the amount advanced.
3, Termination of Main Extension Contracts
a. Any contract whose refunds are based on a percentage of the amount advanced rmay be
purchased by the utility and terminated provided that the terms are mutually agxeed to by the
paz-ties or Their assignees and .Section C.3,c. and Section C.3.d. are corriplied. with. The
maximum price that m.ay be paid by the utility to terminate a contract shall be calculated by
multiplying the' remaining unrefunded contract balance times the appropriate termination
factor set out below. No contract that has been in effect for less than 7 0 years shall be
terminated without prior Commission approval. '
C. Extensions to Sezve Subdivisions, Tracts, lousing Projects, Industxial Developments, Commeroial
Buildings, or'Shooping Centers (continued)
3. Tezmination of Main Extension Contracts (continued)
Texmination Factors
Years Years Yeaxs Year
Remaining Factor Remaining Factor Rezxzainin~ Factor Remaining Factor
1 .8929 11 .5398 21 .3601 31 .2608
2 .8450 12 .5162 22 .3475 32 .25.35
3 .8006 13 .4941 23 .33.56 33 .2465
4 .7593. 14 .4734 24 .3243 34 .2399
5 .7210 15 .4.541 25 ,3137 3S .2336
6 .6852 16 .4359 26 .3'037 36 .227G
7 .6520 17 :4188 27 .2942 37 .2218
8 .62.10 1.8 .4028 28 ,2851 38 .2136
9 ..5920 19 .3877 29 .2766- 39 .2111
10 .5650 20 .3729 30 .2685 40 .2061
b. Any contract with refunds based upon pexcentage of revenues and entered into under Section
C~, of the former rule, may Ue purchased by flee utility and terminated, provided the payment
is 'nat in excess of the estimated revenue refund multiplied by the termination factor in the
following table, the terms are otherwise mutually agreed to by the parties or their assignees
and Section C.3.c. and Section. C.3.d. herein are complied with. The estimated revenue
refund is the arriount that would otherwise be refunded, at the current level of xefunds, over
the remainder of the twenty-year contract period or shorter period that would be required to
extinguish the total .refund obligation. Tt shall be determined by multiplying 22 percent of the
average. annual revenue pcr service for the iznrziediately .preceding calendar year by the
nuz7zber of bona foe customers at the proposed termination date, tunes the nuxrib.ez• of years or
fractions thereof to the end of the twenty-year contract period or shorter pexiad that would be
reclui.red to reftiuad the remaining contract balance.
Terminatio.xz Factors
Years Years
Remaining Factor ~ Remaining Factor
1 .892.9 11 .5398
2 .8450 12' .5162
3 ' .8006 13 .4941
4 .7593 14 .4734
S .7210 1 S .4541
6 .6852 16 .4359
7 .6520 17 .418:8
8 .6210 18 .4.028
9 .5920 19 .3877
10 .5650
s
C. Extensions to Serve Subdivisions Tracts Housing Projects Industrial Developments Commercial
Buildings, or Shopping Centers (continued)
3. Termination of lVlain Extension Contracts (continued)
a The utility :shall furnish promptly to the Commission the following information in waiting and
shall obtain prior authorization by a formal application~under Sections 81.6-830 of tl~e Public
Utilities Code if payment is to be made other than in cash:
(1) A copy of the main extension contract, together with data adequately describing the
development for which the advance was made and the total adjusted coxstruction cost
of t11e extension.
(2) The balance unpaid on the contract anal the calculation of the maximiun termination
price, as above defined, as of the date of termination and the terms under which the
obligation was ternundted. .
(3) The name of the holder of the contract when terminated.
d. Discounts obtained by the utility fxom contracts terminated under the provisions of this
section shall be accounted for by credits to Ac. 265, Contributions in Aid of Construction.
D. Extension Desi n~.Include hire Protection
1. The cost of distribution mains designed tb meet the fire flow requirements set forth in Section
VIII.1(a) of General Order No. 103 is to be advanced by the applicant. The utility shall refiind
this advance as provided in Sections 8.2. and C,2, of this rule.
2. Should distribution mains be designed to meet fire flow requirements in excess of those set forth
in Section VIII.1(a) of General: Order No. 103, the increase in cost of the distribution mains
necessary to meet such higher fire flow requirements shall be paid to the utility as a contribution
in aid of construction.
The cost of facilities other than hydrants and distribution mains required to provide supply,
pressure, or storage primarily for fire protection purposes, or portions of such facilities allocated
in proportion to the capacity designed for fire protection purposes, shall be paid to the utility as a
contribution in aid of construction.
E. Income Tax Component of Contributions and Advances Provision
l . Contributions in Aid of Constiliction (CIAC) and Advances for Constriction (AIC) shall include,
but are not limited to, cash, services, facilities, labor, property, and income taxes thereon
provided by a person or agency to the utility. The value of all contxibutions and advances shall
be based on the utility's estimates. Contributions and advances shall consist of two components
for the purpose of recording transactions as follows:
a. Income Tax Component, and
b. The balance of the contribution or advance,
E. Income Tax Component of Contributions and Advances Provision (contizzued)
2. Stazting :from 7anLUZZ•y 1, 1997,. the Income Tax Component shall be calculated by multiplying the
following tax factors times the taxable poztion of the contribution or advance:
For Service Connection Component:
For CIAC 31.90%
For AIC 32,50%
3, The tax factors are established by using Method 5 as set :Garth: in Decision No, 8'1-09-026 in I.86-
11-019.
4. The formula to compute Method 5 includes the following factors:
a. Corporate tax rate of: ~ 35.12%
b. Franchise tax rate of: 9.30%
a. A discount rate of: 9.28%
d. A pre-tax rate of retlun of: 9.81
5. The Income Tax Component factor has been derived from the federal and state cozporate income
tax rates and mill remain in effect until changes to those rates would increase or decrease the
gross-up-rate >ay five percentage points or more as reflected in Ordering Paragraph No. 7 of I.86-
11-019/D.86-09-026. When .and if that occurs, the utility will-file an advice letter showing the
new rates and .cancel out this. sheet.
6. In the event that the Utility collects a gross-up using an incremental-tax rate that is more than its
incremental tax rate as determined on a taxable year basis,. without consideration of`a tax credit
or tax loss carry forward, the diffezez~zce between what was and what sla.ould have been collected
will be refunded to the Applicant.
10