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HomeMy WebLinkAboutCC RESO 10,562RESOLUTION NO. 10,562 RESOLUTION APPROVING JOINT POWERS AGREEMENT CREATING THE SWEETWATER AUTHORITY WHEREAS, the City of National City and the South Bay Irrigation District have heretofore entered into the "Joint Powers Agreement of 1969", and WHEREAS, the City of National City and the South. Bay Irrigation District have instituted an eminent domain action in the Superior Court to acquire the properties of the California -American Water Company -South Bay Division - Sweetwater District, and WHEREAS, the City of National City and the South Bay Irrigation District desire to provide for the most efficient operation of said properties in public ownership, and WHEREAS, the City of National City and the South Bay Irrigation District desire to fund the acquisition of the Water properties in question through a district -wide revenue bond pro- posal; NOW, THEREFORE, BE IT RESOLVED that the Mayor is authorized and directed to execute and the City Clerk to attest to that certain agreement entitled the "Joint Powers AGreement of 1972" between the South Bay Irrigation District and the City of National City creating the Sweetwater Authority, a copy of which is attached hereto and marked Exhibit "A", and incorpor- ated herein by this reference. PASSED AND ADOPTED this 1st day of February, 1972. ATTEST: CITY CLERK JOINT POWERS AGREEMENT OF 1972 BETWEEN THE SOUTH BAY IRRIGATION DISTRICT AND THE CITY OF NATIONAL CITY CREATING THE SWEETWATER AUTHORITY TABLE OF CONTENTS Section No. Title Page Recitals 1 Section 1. Purposes of Agreement and Common Powers to be Exercised 2 Section 2. Sweetwater Authority 3 Section 3. Powers 11 Section 4. Fiscal Year 13 Section 5. Official Bonds 14 Section 6. Payments and Advances 15 Section 7. Acquisition of Sweetwater System - Bond Election 16 Section 8. Litigation Expense 18 Section 9. Repayment of Acquisition Expenses 20 Section 10. San Diego County Water Authority 21 Section 11. Term, Amendments, Termination 24 Section 12. No Franchise Charges 27 Section 13. Wells in National City 28 Section 14. Severability 29 Section 15. Joint Powers Agreement of 1969 30 Execution 31 JOINT POWERS AGREEMENT OF 1972 BETWEEN THE SOUTH BAY IRRIGATION DISTRICT AND THE CITY OF NATIONAL CITY CREATING THE SWEETWATER AUTHORITY THIS AGREEMENT, dated February 1 , 1972, is made and entered into by and between the SOUTH BAY IRRIGATION DISTRICT (hereinafter sometimes referred to as "SOUTH BAY"), an irrigation district organized and existing under the Irrigation District Law of the State of California (Division 11 of the Water Code), and the CITY OF NATIONAL CITY (hereinafter sometimes referred to as "NATIONAL CITY"), a municipal corporation organized and existing under the laws of the State of California (Title 4 of the Government Code). RECITALS SOUTH BAY and NATIONAL CITY and the residents in each of them are served by the water supply and distribution system owned by the California -American Water Company, which system is known as the Sweetwater District of the San Diego Bay Division (hereinafter some- times referred to as "Sweetwater System"). SOUTH BAY and NATIONAL CITY are in the process of acquiring the Sweetwater System by means 'of an eminent domain proceeding (San Diego Superior Court No. 306441). SOUTH BAY and NATIONAL CITY find that it would be in the best interests of each public agency and the residents of each of them to create the "SWEETWATER AUTHORITY" to acquire, own, operate, manage, maintain, and improve the Sweetwater System so that their residents will he supplied with water at the lowest possible cost consistent with sound economy, prudent management and the security and payment of the principal and interest of the revenue bonds. NOW, THEREFORE, SOUTH BAY AND NATIONAL CITY, FOR AND IN CONSIDERATION OF THEIR MUTUAL PROMISES AND AGREEMENTS HEREIN CON- TAINED, DO AGREE AS FOLLOWS: SECTION 1. Purposes of Agreement and Common Powers to be Exercised This Agreement is made pursuant to the provisions of Article 1, Chapter 5, Division 7, Title 1 of the Government Code of the State of California (commencing with Section 6500, herein- after sometimes called "Act") relating to the joint exercise of powers common to public agencies, in this case being SOUTH BAY and NATIONAL CITY, each of which is authorized to contract with the other pursuant thereto. The purposes of this Agreement are to create the SWEETWATER AUTHORITY, to provide for the acquisition, ownership, financing, operation, management, maintenance, repair and improvement of the Sweetwater System, and the construction of additions and improvements thereto, for the supplying of water for domestic, irrigation, sanitation, industrial, fire protection, re- creation or any other public or private uses. Each public agency has in common the powers to acquire, own, finance, operate, manage, maintain, repair, improve, and construct such facilities for such purposes. The foregoing purposes will be accomplished and common powers exercised in the manner hereinafter set forth. (End of Section 1) -2- SECTION 2. Sweetwater Authority (A) Creation of Authority Pursuant to Sections 6506 and 6507 of the Act, there is hereby created a public entity to be known as the "SWEETWATER AUTHORITY". The SWEETWATER AUTHORITY shall be a public entity separate and apart from SOUTH BAY and NATIONAL CITY and a public agency within the meaning of Section 1.65 of Article XIII of the California Constitution. The boundaries of the SWEETWATER AUTHORITY shall be co- terminous with the boundaries of SOUTH BAY and NATIONAL CITY as they exist from time to time. The debts, liabilities, and obligations of the SWEETWATER AUTHORITY shall not con- stitute debts, liabilities or obligations of SOUTH BAY or NATIONAL CITY. (B) Governing Board The SWEETWATER AUTHORITY shall be administered by a Governing Board of seven (7) members, each serving in his individual capacity as a member of the Governing Board. Such Governing Board shall be called the "Governing Board of the SWEETWATER AUTHORITY". All voting power shall re- side in the Governing Board. Five (5) members of the Governing Board of the SWEETWATER AUTHORITY shall be appointed by the Board of Directors of SOUTH BAY. They shall be electors of -3- SOUTH BAY at the time of assuming such offices and at all times during their terms of office. They shall serve four (4) year terms; provided, however, the initial appointments shall be for staggered terms to assure continuity as follows: three initial members shall be appointed to four (4) year terms and two initial members shall be appointed to two (2) year terms. Any vacancy that occurs among the SOUTH BAY members of the Governing Board shall be filled by appointment by the Board of Directors of SOUTH BAY. Two (2) members of the Governing Board of the SWEETWATER AUTHORITY shall be appointed by the Mayor, subject to confirmation by the City Council, of NATIONAL CITY. They shall be electors of NATIONAL CITY at the time of assuming such offices and at all times during their terms of office. They shall serve four (4) year terms; provided, however, the initial appointments shall be for staggered terms to assure continuity as follows: one initial member shall be appointed for a two (2) year term and the other initial member for a four (4) year term. Any vacancy that occurs among the NATIONAL CITY members of the Governing Board shall be filled by appoint- ment by the Mayor, subject to confirmation by the City Council, of NATIONAL CITY. -4- The initial term of all members of the Governing Board of the SWEETWATER AUTHORITY shall be deemed to commence on the execution of this Agreement. (C) Meetings of the Governing Board (1) Regular -Meetings The Governing Board of the SWEETWATER AUTHORI,TY shall provide for its regular meetings. The date, hour and place of holding the regular meetings shall be fixed by Resolution of the Governing Board. A copy of such Resolution shall be filed with SOUTH BAY and NATIONAL CITY. (2) Ralph M. Brown Act All meetings of the Governing Board of the SWEETWATER AUTHORITY, including, without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (com- mencing with Section 54950 of the Government Code), as amended. (3) Minutes The Secretary of the SWEETWATER AUTHORITY shall cause to be kept minutes of the meetings of the Governing Board and shall, after each meeting, cause a copy of the minutes to be forwarded to each member -5- of the Governing Board and to SOUTH BAY and NATIONAL CITY. (4) Quorum A majority of the Governing Board of the SWEETWATER AUTHORITY shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time; pro- vided that the affirmative vote of at least four members of the Governing Board shall be required for any action of the Governing Board, other than adjournment. (D) Officers and Duties (1) Chairman The Governing Board of the SWEETWATER AUTHORITY shall elect one of its members as Chairman. The Chairman's term of office shall be two years and until his successor takes office. The Chairman of the Governing Board shall preside at its meetings and shall perform such other duties as are specified by the Governing Board. (2) Vice -Chairman The Governing Board of the SWEETWATER AUTHORITY shall elect one of its members Vice -Chairman. The Vice -Chairman's term of office shall be two years and until his successor takes office. The Vice -Chairman -6- shall perform all the duties of the Chairman in the absence of the Chairman or in the event of the Chairman's inability to perform such duties. (3) Secretary The Secretary of the SWEETWATER AUTHORITY shall -be appointed by the Governing Boa-rd of the SWEETWATER AUTHORITY and shall serve at the pleasure of the Governing Board. The Secretary may but need not be a member of the Governing Board. The Secretary shall be responsible for the minutes and other records of the proceedings of the Governing Board and shall per- form such -other duties'as are specified by the Govern- ing Board. (4) Treasurer The Treasurer of the SWEETWATER AUTHORITY shall be the Treasurer of SOUTH BAY serving ex-officio as Treasurer of the SWEETWATER AUTHORITY. The resolution for the issuance of revenue bonds of the SWEETWATER AUTHORITY may provide for a trustee to receive, have custody of, and disburse SWEETWATER AUTHORITY funds. Subject to the applicable provisions of such a resolu- tion of issuance, the Treasurer shall have custody of all the money of the SWEETWATER AUTHORITY, from whatever source, and he shall: -7- (a) Receive and receipt for all money of the SWEETWATER AUTHORITY and place it in the SOUTH BAY treasury to the credit of the SWEETWATER AUTHORITY; (b) Be responsible upon his official bond for the safekeeping and disbursement of all SWEETWATER AUTHORITY money so held by him; (c) Pay, when due, out of money of the SWEET - WATER AUTHORITY so held by him, all sums payable on outstanding bonds and coupons of the AUTHORITY; (d) Pay any other sums due from the SWEETWATER AUTHORITY from AUTHORITY money, or any portion thereof, only upon warrants of the Controller of the SWEET - WATER AUTHORITY; (e) Verify and report in writing on the first day of July, October, January and April of each year to the SWEETWATER AUTHORITY and to SOUTH BAY and NATIONAL CITY the amount of money he holds for the AUTHORITY, the amount of receipts since his last report, and the amount paid out since his last report; and (f) Perform such other duties as are specified by the Governing Board. -8- (5) Controller The Controller of the SWEETWATER AUTHORITY shall be the duly appointed and acting Controller of SOUTH BAY serving ex-officio as Controller of the SWEETWATER AUTHORITY. The Controller shall establish and maintain such accounts, books and records as may be required by good accounting practice or by any provision of the resolution for issuance of bonds of the SWEETWATER AUTHORITY and he shall perform such other duties as are specified by the Governing Board. There shall be strict accountability of all funds and report of all receipts and disbursements. The accounts, books and records of the AUTHORITY shall be open to inspection at all reasonable times by representatives of SOUTH BAY or NATIONAL CITY. The Controller shall draw warrants to pay demands against the AUTHORITY when the demands have been approved by the Governing Board or the person or persons authorized to so approve by SOUTH BAY and NATIONAL CITY. The Controller shall, with the approval of the Governing Board, contract with a certified public accountant to make an annual audit of the accounts and records of the AUTHORITY. The minimum requirements of the audit shall be those prescribed by the State Controller for Special Districts -9- under Section 26909 of the Government Code and shall conform to generally accepted auditing standards. A report thereof shall be filed as public records with SOUTH BAY and NATIONAL CITY and also with the County Auditor of San Diego County. Such reports shall be filed within twelve months of the end of the fiscal year under examination. (6) Attorney The Attorney for the SWEETWATER AUTHORITY shall be the duly appointed and acting Attorney for SOUTH BAY (or his duly authorized deputy), serving ex-officio as Attorney for the SWEETWATER AUTHORITY. The Attorney for the AUTHORITY or his designated deputy shall attend all meetings of the Governing Board, but his absence shall not affect the validity of any meeting. The Attorney shall perform such other duties as are speci- fied by the Governing Board. (E) Rules The Governing Board may adopt, from time to time, such rules and regulations for the conduct of its meetings and affairs as may be required. (End of Section 2) -10- SECTION 3. Powers The SWEETWATER AUTHORITY shall have the powers common to SOUTH BAY and NATIONAL CITY set forth in Section 1, as limited by this Agreement. The SWEETWATER AUTHORITY, by and through its Governing Board, is hereby authorized, in its own name, to do all acts necessary, convenient or appropriate for the exercise of said common powers for the purposes set forth in Section 1 and to do any or all of the following: (a) To make and enter into contracts, including agreements necessary to comply with procedural require- ments in connection with any federal or state grants; (b) To employ agents and employees; (c) To acquire, construct, manage, maintain or operate any buildings, works or improvements; (d) To acquire, hold or dispose of property; (e) To incur debts, liabilities or obligations which do not constitute a debt, liability or obligation of SOUTH BAY or NATIONAL CITY; (f) To sue and be sued in its own name; (g) To receive gifts, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations and any governmental entity provided that any such gifts, contributions or donations are consented to by the AUTHORITY in each instance; (h) To issue revenue bonds pursuant to Section 6515 of -11- the Government Code of the State of California (Stats. 1971, c. 1603) and the Revenue Bond Law of 1941 (commencing with Government Code Section 54300), hereinafter sometimes referred to as the "Revenue Bond Law", and any other applicable laws of the State of California. (i) To fix the compensation paid to the Governing Board, Secretary, Treasurer, Controller and Attorney, pro- vided, however, the compensation of the Board members shall not exceed that authorized for Irrigation District Board members (see Water Code Section 21166) from time to time; (j) To fix the duties, compensation and other terms and conditions of employment of other officers and employees, all of whom shall serve at the pleasure of the Governing Board. (k) To adopt reasonable rules and regulations for the conduct of the enterprise and to prescribe, revise, and collect charges for services, facilities and water furnished. Such powers shall be exercised in the manner provided in the Act, and, except as expressly set forth herein, subject only to such restrictions upon the manner of exercising such powers as are imposed upon SOUTH BAY in the exercise of similar powers. (End of Section 3) -12- SECTION 4. Fiscal Year The Governing Board of the SWEETWATER AUTHORITY shall fix the fiscal year of the AUTHORITY. The fiscal year of the SWEETWATER AUTHORITY shall be January 1 to December 31 until changed by the Governing Board. (End of Section 4) -13- SECTION 5. Official Bonds The public officers (namely, the Controller and the Treasurer) herein designated as the persons responsible for any monies of the SWEETWATER AUTHORITY are hereby also designated as responsible for all other property of the SWEETWATER AUTHORITY. The Controller shall file an official bond in the amount of $10,000.00 and the Treasurer shall file an official bond in the amount of $10,000.00. Each member of the Governing Board shall file an official bond in the amount of $5,000.00. All bond premiums shall be paid by the SWEETWATER AUTHORITY. (End of Section 5) -14- SECTION 6. Payments and Advances SOUTH BAY and NATIONAL CITY may, in appropriate circum- stances or when required by this Agreement: (a) make contributions from their treasuries for the purposes set forth in this Agreement; (b) make payments of public funds to defray the cost of such purposes; (c) make advances of public funds for such purposes, such advances to be repaid as provided in this Agreement; or (d) use personnel, equipment or property in lieu of other contributions or advances. (End of Section 6) -15- SECTION 7. Acquisition of Sweetwater System - Bond Election SOUTH BAY and NATIONAL CITY shall prosecute the eminent domain proceeding (San Diego Superior Court No. 306441) to final judgment as provided in the Joint Powers Agreement of 1969. After the interlocutory condemnation judgment, SOUTH BAY and NATIONAL CITY shall proceed in accordance with Government Code Section 6515 (Stats. 1971, c. 1603) and, without limiting the generality of the foregoing, the SWEETWATER AUTHORITY shall adopt the resolution referred to in Article 3 (commencing with Government Code Section 54380) of the Revenue Bond Law to provide funds for the acquisition, improving' and financing of the Sweetwater System, including: the total acquisition cost, all legal fees, engineering and expert witness fees, and other costs and expenses of the eminent domain proceeding; costs of the revenue bond election and of the sale and issuance of the revenue bonds; bond reserve funds; working capital; the cost of construction of improvements thereto; and other costs and expenses incidental to or connected with such acquisition, construction and financing and authorized by the Revenue Bond Law of 1941 to be included in determining the amount of bonds to be issued. SOUTH BAY and NATIONAL CITY shall implement the resolution by eachconducting the revenue bond election in its own territory. The proposition authorizing the revenue bonds shall be deemed adopted if it receives the affirmative vote of a majority of all voters voting on the proposition within the SWEETWATER AUTHORITY. The election and bond proceedings shall be conducted pursuant to Govern- ment Code Section 6515 (Stats. 1971, c. 1603) and the Revenue Bond -16- Law. Upon approval of the bond proposition by the voters, the SWEETWATER AUTHORITY shall sell sufficient bonds to pay the total cost of acquisition and to provide funds for the related needs set forth above. As soon as money is available therefrom, the SWEETWATER AUTHORITY shall pay or deposit (in proceeding No. 306441 or as otherwise provided by SOUTH BAY and NATIONAL CITY) the sum required to secure possession of the Sweetwater System pursuant to Code of Civil Procedure Section 1254 or other procedures authorized by law. When such payment or deposit is made, SOUTH BAY and NATIONAL CITY shall take such steps as are necessary to cause possession of the -Sweetwater System to vest in the SWEETWATER AUTHORITY. If any additional sum is required to be paid as a condition to the entry of the final order of condemnation, it shall be paid or deposited by the SWEETWATER AUTHORITY from the proceeds of the sale of the revenue bonds. SOUTH BAY and NATIONAL CITY shall take such steps as are necessary to cause title to the Sweetwater System to vest in the SWEETWATER AUTHORITY upon entry of the final order of condemnation. (End of Section 7) -17- SECTION 8. Litigation Expense SOUTH BAY and NATIONAL CITY shall each pay its own attorneys' fees in connection with the eminent domain proceeding (San Diego Superior Court No. 306441), subject to the right of re- imbursement from the-SWEETWATER-AUTHORITY as provided herein. All other expenses of proceeding No. 306441, including (without limitation) expert witness fees and court costs, shall be advanced by SOUTH BAY, subject to the right of reimbursement from the SWEETWATER AUTHORITY as provided herein. SOUTH BAY's share of such expenses shall be 73% and NATIONAL CITY's share shall be 27%. NATIONAL CITY shall ,pay to SOUTH BAY interest on NATIONAL CITY's share of such expenses advanced from the time of such ad- vances by SOUTH BAY to the date SOUTH BAY is reimbursed. The rate of interest on NATIONAL CITY's share of expenses advanced by SOUTH BAY shall be the average rate paid by the Southern California First National Bank, Bank of America, and Security Pacific National Bank for one year deposits by public agencies at the time of such ad- vances. In the event of abandonment of proceeding No. 306441 by both SOUTH BAY and NATIONAL CITY, abandonment costs payable to the condemnee shall be borne 73% by SOUTH BAY and 27% by NATIONAL CITY. SOUTH BAY shall advance all costs payable to the condemnee in the event of such abandonment. NATIONAL CITY shall reimburse SOUTH BAY for NATIONAL CITY's share of the expenses of proceeding No. 306441 -18- and NATIONAL CITY's share of abandonment costs advanced by SOUTH BAY plus interest thereon from the time of such advances to the date of reimbursement. The rate of interest shall be the average rate paid by the banks set forth above for one year de- posits by -public agencies at the time of such advances. Such re- imbursement shall be made in not more than five substantially equal annual payments, the first payment to be made one year after the date of the court order fixing abandonment costs. (End of Section 8) -19- SECTION 9. Repayment of Acquisition Expenses The SWEETWATER AUTHORITY shall repay to SOUTH BAY and NATIONAL CITY all expenses and advances made or incurred by SOUTH BAY and NATIONAL CITY pursuant to Sections 7 and 8 hereof and pursuant to Section 6 of the Joint Powers Agreement of 1969, with the exception of abandonment costs. Such repayment shall be made from the pro- ceeds of the sale of revenue bonds by the SWEETWATER AUTHORITY as soon after the sale as is convenient, but no later than six (6) months after entry of the final order of condemnation. (End of Section 9) -20- SECTION 10. San Diego County Water Authority SOUTH BAY and NATIONAL CITY hereby empower the SWEETWATER AUTHORITY (upon its acquisition of the Sweetwater System and during the term of the Agreement) to order, receive, sell and dis- tribute through the Sweetwater System (as it is constituted from time to time) for use within SOUTH BAY and NATIONAL CITY, respectivel_ all water that SOUTH BAY and NATIONAL CITY, respectively, shall become entitled to purchase from the San Diego County Water Authority to the extent that the SWEETWATER AUTHORITY shall require the same. The SWEETWATER AUTHORITY does not by this Agreement acquire any interest in the San Diego. County Water,Authority water rights of SOUTH BAY or NATIONAL CITY other than the right to order, receive, sell and distribute said water in accordance with, and during the term of, this Agreement. The SWEETWATER AUTHORITY shall order such water directly from the San Diego Water Authority and shall pay the Water Authority for such water. The SWEETWATER AUTHORITY may order from the San Diego County Water Authority amounts of water up to the aggregate amounts available to SOUTH BAY and NATIONAL CITY. If the SOUTH BAY or NATIONAL CITY component of an order exceeds the amount of water available to either agency from the San Diego County Water Authority, then to the extent the other agency shall have unordered County Water Authority water entitlement available it shall be used and a like amount of local water available to the entitlement -short agency shall be released to the other agenc, in exchange therefor, at its request. If no request is made within -21- one year of a use, the right to the release of exchange water therefor shall terminate as to that individual use. Upon three (3) months written notice to the SWEETWATER AUTHORITY, SOUTH BAY and/or NATIONAL CITY may, at their option, charge the SWEETWATER AUTHORITY standby charges for the right to receive water from the San Diego County Water Authority. The SWEETWATER AUTHORITY shall pay such charges. Until all revenue bonds herein provided for and issued pursuant hereto, and the interest thereon, shall have been paid in full or adequate pro- vision for such payment shall have been made, the amounts of such standby charges shall not -exceed fifty percent (50%) of any Metro- politan Water District of Southern California and San Diego County Water Authority taxes for each fiscal year (July 1 to June 30) applicable to taxable property situated within the public agency (SOUTH BAY or NATIONAL CITY) making such standby charge. If a standby charge is made, sixty percent (60%) thereof shall be payable by the SWEETWATER AUTHORITY by December 1 and forty percent (40%) by May 1 of the fiscal year for which the charge is made or at such other times and in such installments as are necessary to correspond to the requirements of the Metropolitan Water District and the County Water Authority as to cash payments in lieu of taxes, as such requirements may be changed from time to time. SOUTH BAY and NATIONAL CITY agree to: remain members of the San Diego County Water Authority at all times during the term of -22- this Agreement; take any action necessary to protect their water rights and other rights as members of the Water Authority; perform such acts and execute such documents as may be necessary to accomplish the purposes of this Section. (End of Section 10) -23- SECTION 11. Term, Amendments, TeLmination This Agreement shall be effective when signed by SOUTH BAY and NATIONAL CITY, may be amended by mutual consent, and shall continue until terminated by mutual consent or by either SOUTH BAY or NATIONAL CITY upon one year's written notice; provided, however, this Agreement cannot be terminated until all revenue bonds herein provided for and issued pursuant hereto, and the interest thereon, shall have been paid in full or adequate provision for such payment shall have been made. If this Agreement is terminated as provided above, any property acquired as a result of the'joint exercise of powers shall be divided or distributed in accordance with the mutual agreement of the parties. After completion of the purpose of this Agreement, to -wit, upon termination thereof, any surplus money on hand shall be returned to the parties in proportion to the contributions made in acdordance with the mutual agreement of the parties. If SOUTH BAY and NATIONAL CITY cannot reach a mutual agree- ment in regard to such division and distribution of properties or money, then such division and distribution shall be settled by arbitration as hereinafter set forth. The matter shall be submitted to a board of three (3) arbitrators which shall be appointed, one by SOUTH BAY, one by NATIONAL CITY, and the third by the first two. The public agency desiring arbitration shall notify the other public agency by a written notice stating that it desires arbitration, -24- that it has appointed its nominee, and that it requests the other public agency to appoint its nominee. The other public agency shall, within thirty (30) days from the receipt of said notice, appoint its nominee. Within fifteen (15) days after the last public agency has appointed its nominee, the two nominees shall appoint the third. None of the arbitrators shall be a resident of or taxpayer in, or own property in, or have a place of business in, or be an officer or employee of, either public agency. The arbitra- tion board shall hold at least one hearing and at least ten (10) days before said hearing shall give each public agency written notice thereof. In making such a di‘tision of the Sweetwater System, the arbitrators shall: (1) distribute to SOUTH BAY that portion of the water distribution system within SOUTH BAY; (2) distribute to NATIONAL CITY that portion of the water distribution system within NATIONAL CITY; (3) distribute jointly to SOUTH BAY and NATIONAL CITY undivided interests in water production facilities, major transmission facilities, and the remaining portions of the Sweetwater System in reasonable proportion to their respective distribution requirements and systems; (4) provide for the administration of the jointly owned facilities by SOUTH BAY; (5) give consideration to good utility operating practices in making the division so that water service may be continued by SOUTH BAY and NATIONAL CITY in an efficient and economical manner. Each public agency shall be given an opportunity to be heard and to present evidence. Upon conclusion of the hearing or hearings -25- the arbitration board shall reduce their findings of fact, conclu- sions of law and the decision to writing, and shall sign the same and deliver one signed copy thereof to each public agency. Such decision shall be final and binding upon both public agencies. A majority finding shall govern if the arbitrators' determination is not unanimous. Each public agency shall pay its own expenses including the expenses of the arbitrator which it nominates. The expenses of the third arbitrator, and the administrative costs of the arbitration proceedings shall be shared equally. In all respects not inconsistent with the foregoing, the proceedings shall be in accordance with Title 9 of Part 3 of the California Code of Civil Procedure (as amended from time to time). (End of Section 11) -26- SECTION 12. No Franchise Charges Upon acquisition of the Sweetwater System, the SWEETWATER AUTHORITY shall have the exclusive right to supply water within SOUTH BAY and NATIONAL CITY and to operate, maintain, repair, con- struct and extend its water facilities therein for such purpose. Neither SOUTH BAY nor NATIONAL CITY shall levy a franchise charge against the SWEETWATER AUTHORITY. (End of Section 12) -27- SECTION 13. Wells In National City The SWEETWATER AUTHORITY shall not drill additional wells in NATIONAL CITY for the purpose of increasing production from the underground beyond the 1967 level of production without .the consent of NATIONAL CITY. (End of Section 13) -28- SECTION 14. Severability If any section, sub -section, sentence, clause or phrase of this Agreement, or the application thereof to either public agency or to any other person or circumstance, is for any reason held invalid, it shall be deemed severable and the validity of the remainder of the Agreement, or the application of such provi- sion to the other public agency or to any other person or circum- stance, shall not be affected thereby. Each public agency hereby declares that it would have entered into this Agreement, and each section, sub -section, sentence, clause and phrase thereof irrespec- tive of the fact that one or more sections, sub -sections, clauses or phrases, or the application thereof to either public agency or to any other person or circumstance, might be held invalid. (End of Section 14) -29- SECTION 15. Joint Powers Agreement of 1969 The Joint Powers Agreement of 1969, 1969, between SOUTH BAY and NATIONAL CITY is Agreement; provided, however, the to proceed jointly to acquire the dated January 28, superseded by this provision of the 1969 Agreement Sweetwater System by eminent domain shall remain in full force and effect. (End of Section 15) -30- IN WITNESS WHEREOF, the parties have caused this Joint Agreement of 1972 between SOUTH BAY IRRIGATION DISTRICT ; CITY OF NATIONAL CITY creating the SWEETWATER AUTHORITY signed by their respective officials heretofore duly rized by the legislative • bodies thereof. February 3, 1972 SOUTH BAY IRRIGATION DISTRICT .:ST: Secretary AL) U By /.21,60/22, L;4' President ia: February 1, 1972 CITY OF NATIONAL CITY 1 By %/ Mayor City Clerk d ) -31-