WATER TRANSPORTATION AGREEMENT FOR THE WESTSIDE REGIONAL PIPELINE PROJECT INCH

WATER TRANSPORTATION AGREEMENT FOR THE WESTSIDE REGIONAL PIPELINE PROJECT 30/24-INCH LINE BETWEEN WASHINGTON COUNTY WATER CONSERVANCY DISTRICT AND CITY OF ST. GEORGE DATED AS OF SEPTEMBER 1, 2002 Agreement.doc 867093/RJS/ETH/kli Water Transportation Agreement 30/24-Inch Line TABLE OF CONTENTS SECTION PAGE Recitals.............................................................................................................................................1 ARTICLE 1 Section 1.1. Section 1.2. Section 1.3. ARTICLE 2 Section 2.1. Section 2.2. ARTICLE 3 Section 3.1. Section 3.2. ARTICLE 4 Section 4.1. ARTICLE 5 Section 5.1. Section 5.2. Section 5.3. ARTICLE 6 Section 6.1. Section 6.2. Section 6.3. ARTICLE 7 Section 7.1. Section 7.2. Section 7.3. Section 7.4. SECTION 8 Section 8.1. Section 8.2. Section 8.3. Section 8.4. Section 8.5. DEFINITIONS; RULES OF CONSTRUCTION; AUTHORITY .............................1 Definitions ...................................................................................................1 References and Headings.............................................................................5 Authority ......................................................................................................5 TERM OF AGREEMENT .................................................................................5 Effective Date and Termination Date ..........................................................5 Replacement Agreements After Expiration of this Agreement ...................6 PROJECT CONSTRUCTION MANAGER; SCOPE OF THE PROJECT .......................................................................................................6 Project Construction Manager .....................................................................6 Project Description; Changes to the Project ................................................6 PROJECT OPERATIONS MANAGER...............................................................7 Project Operations........................................................................................7 COORDINATING COMMITTEE ......................................................................8 Membership and Quorum ............................................................................8 Voting; Notice of Meetings .........................................................................8 Coordinating Committee..............................................................................8 FUNDING OF THE PROJECT ..........................................................................9 District to Issue Bonds.................................................................................9 Payment of Bonds ........................................................................................9 No Obligation of the State or Others to Pay Bonds.....................................9 OWNERSHIP, TITLE, AND CAPACITY ENTITLEMENTS; SALE AND PURCHASE OF WATER TRANSPORTATION SERVICE ...........................9 District to Own and Sell Available Capacity...............................................9 Participants’ Entitlement Shares................................................................10 Sale and Purchase of Entitlement Share ....................................................10 Use of Entitlement Share ...........................................................................10 BUDGETS, BILLINGS AND PAYMENT .........................................................10 Monthly Participant Obligation .................................................................10 Monthly Billing by District........................................................................10 Annual Budget ...........................................................................................10 Changes to Annual Budget ........................................................................11 Billing of Amount Not Paid By Other Participants ...................................11 Water Transportation Agreement 30/24-Inch Line -i- SECTION Section 8.6. Section 8.7. Section 8.8. Section 8.9. Section 8.10. Section 8.11. Section 8.12 ARTICLE 9 Section 9.1. Section 9.2. ARTICLE 10 Section 10.1. ARTICLE 11 Section 11.1. Section 11.2. ARTICLE 12 Section 12.1. Section 12.2. Section 12.3. ARTICLE 13 Section 13.1. ARTICLE 14 Section 14.1. Section 14.2. ARTICLE 15 Section 15.1. Section 15.2. Section 15.3. Section 15.4. Section 15.5. Section 15.6. Section 15.7. ARTICLE 16 Section 16.1. Section 16.2. PAGE Delayed-Payment Charges.........................................................................11 Payment Disputes.......................................................................................11 Annual Adjustment ....................................................................................11 Notice of Participant’s Obligation .............................................................12 Collection of Certain Payments From Third Parties..................................12 Application of Payments by Defaulting Participants.................................12 Additional O&M Costs for Reserve and Project Additions ......................12 PROJECT ADDITIONS..................................................................................13 Project Additions with Participant Approval.............................................13 Project Additions without Participant Approval........................................13 INSURANCE ................................................................................................14 Insurance ....................................................................................................14 ACCOUNTING .............................................................................................14 District to Keep Project Records; Annual Audit .......................................14 Participant’s Annual Audit to District .......................................................14 INFORMATION TO BE MADE AVAILABLE ..................................................15 Information Available to Participants........................................................15 Opinion of Participant’s Counsel...............................................................15 Participant to Provide Information ............................................................15 DISPOSITION OR TERMINATION OF THE PROJECT .....................................15 Disposition or Termination of the Project .................................................15 PARTICIPANT’S COVENANTS .....................................................................16 General Covenants .....................................................................................16 Tax Exemption Covenants.........................................................................16 EVENT OF DEFAULT AND REMEDIES ........................................................17 Payment Default.........................................................................................17 Right to Recover Payments in Default ......................................................17 Transfer of Defaulting Participant’s Entitlement Share ............................17 District’s Right to Enforce Covenants .......................................................17 Limitation on Participant’s Remedies for District Default........................17 Restoration to Former Position ..................................................................17 No Implied Waiver ....................................................................................18 RELATIONSHIP TO AND COMPLIANCE WITH OTHER INSTRUMENTS ............................................................................................18 Participant’s Recognition of Certain Requirements on District .................................................................................................18 Defects in Other Agreements.....................................................................18 Water Transportation Agreement 30/24-Inch Line -ii- SECTION ARTICLE 17 Section 17.1. Section 17.2. ARTICLE 18 Section 18.1. ARTICLE 19 Section 19.1. Section 19.2. Section 19.3. Section 19.4. ARTICLE 20 Section 20.1. Section 20.2. Section 20.3. Section 20.4. Section 20.5. Section 20.6. Section 20.7. Section 20.8. PAGE NON-DEDICATION OF FACILITIES .............................................................18 Non-Dedication of District Facilities.........................................................18 No Implied Obligation to Provide Other Services.....................................18 LIABILITY OF PARTIES ...............................................................................19 Liability of Parties .....................................................................................19 ASSIGNMENT OF THE AGREEMENT, SALE OF PARTICIPANT’S SYSTEM ............................................................................19 Limitation on Assignment..........................................................................19 Limitation on Participant’s Disposition of Its Water System ....................19 Limitation on Participant’s Disposition of Entitlement Share...................19 Right of First Refusal of Other Participants ..............................................20 GENERAL AND MISCELLANEOUS PROVISIONS .........................................20 Notice and Computation of Time ..............................................................20 Governing Law ..........................................................................................20 Severability ................................................................................................20 No Third Party Beneficiaries .....................................................................20 Force Majeure ............................................................................................20 Amendments to Agreement .......................................................................21 Execution of Counterparts .........................................................................21 Binding Effect............................................................................................21 EXHIBIT A — ENTITLEMENT SHARE OF PARTICIPANTS EXHIBIT B — PROJECT DESCRIPTION Water Transportation Agreement 30/24-Inch Line -iii- WATER TRANSPORTATION AGREEMENT FOR THE WESTSIDE REGIONAL PIPELINE PROJECT THIS WATER TRANSPORTATION AGREEMENT is made and entered into as of September 1, 2002, by and between WASHINGTON COUNTY WATER CONSERVANCY DISTRICT, a water conservancy district organized and existing under the Utah Water Conservancy District Act and the City of St. George, a municipal corporation and a political subdivision of the State of Utah. RECITALS: WHEREAS, significant economic and population growth has occurred and is continuing in the County, creating additional demands for water transportation facilities to convey wholesale supplies of water from the facilities of the District to the water distribution utility systems operated by the Participants; WHEREAS, the District and the Participants have determined that the Project should be undertaken by the District and the water transportation capacity of the Project should be made available to the Participants under the terms of this Agreement in order to better enable the District and the Participants to provide adequate wholesale and retail water services, respectively, for the present and future needs of the residents of the County and the Participants; and WHEREAS, each of the Participants and the District is duly authorized by applicable law to execute, deliver and perform this Agreement and has taken all actions on its part necessary to cause this Agreement to be its legal, valid and binding obligation; NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, the District and the Participant agree as follows: ARTICLE 1 DEFINITIONS; RULES OF CONSTRUCTION; AUTHORITY Section 1.1. Definitions. As used herein and in the recitals hereto: Agreement means this Water Transportation Agreement between the District and the Participant, as supplemented and amended from time to time in accordance with its terms, and, as appropriate, any of the other Agreements. Agreements means, collectively, this Agreement and the other Water Transportation Agreements for the Project, substantially identical to this Agreement, between the District and Water Transportation Agreement 30/24-Inch Line the other Participants, as supplemented and amended from time to time in accordance with their terms. Annual Budget means the annual budget for the Project prepared by the District and approved by the Coordinating Committee as provided in Section 8.3. Authorized Officer means the Chairman or Vice Chairman of the Board or the SecretaryTreasurer or the General Manager of the District. Available Capacity means, at any point in time, the total water transportation capacity of the Project. Bond Counsel means legal counsel of nationally-recognized standing in matters pertaining to the tax-exempt status of interest on obligations issued by states and their political subdivisions. Board means the Board of Trustees of the District or such other governing body of the District as may be constituted pursuant to the Conservancy Act. Bond Documents means the bond resolution, trust indenture or other similar instrument under which any Bonds are issued and secured. Bonds means the bonds, notes or other obligations issued under the Bond Documents by the District to finance or refinance the Cost of Construction of the Project. Capacity Entitlement means, for each Participant, the product of its Entitlement Share and the Available Capacity. Conservancy Act means the Utah Water Conservancy District Act, Title 17A, Chapter 2, Part 14, Utah Code Annotated 1953, as amended. Contract Year means the 12-month period commencing at 12:00 a.m. on January 1 of each calendar year and ending at 11:59 p.m. on December 31 of the same calendar year, provided that the first Contract Year shall begin on the effective date of this Agreement and ending on December 31 of the same calendar year. Coordinating Committee means the committee of representatives of the District and the Participants organized under Article 5. Cost of Construction means all costs and expenses incurred by the District in planning, designing, acquiring, constructing, installing, placing in operation and financing the Project, regardless of whether such costs were incurred before or after the effective date of this Agreement. The Cost of Construction includes, but is not limited to: (1) Planning and development costs, engineering fees, contractors’ fees, costs of obtaining governmental and regulatory permits, licenses and approvals, costs of real Water Transportation Agreement 30/24-Inch Line -2- property and interests therein, labor, materials, equipment, supplies, training and testing costs, insurance premiums, legal and financing costs including costs of any necessary litigation in connection with the construction or financing of the Project, bond insurance fees, costs of purchasing insurance, or credit facilities for a debt service reserve or for Bond security or liquidity and other costs properly allocable to the acquisition, construction, maintenance, and placing in operation of the Project; (2) Interest accruing on the Bonds during the construction of the Project and for such additional period as the District may determine to be reasonably necessary; (3) Reimbursement of items of the Cost of Construction previously paid by the District or the Participants; (4) Working capital and other reserves as shall be necessary or desirable during the construction of the Project and for placing the Project in operation; (5) All costs relating to injury and damage claims not otherwise covered by insurance and arising out of the acquisition and construction of the Project; (6) Legally required or permitted federal, state and local taxes and payments in lieu of taxes incurred during acquisition and construction of the Project; and (7) All other costs incurred by the District and properly allocable to the acquisition and construction of the Project; provided, however, that general administration and overhead costs shall not constitute Costs of Construction. County means Washington County, Utah. Date of Firm Operation means the first date on which the Project is capable of operating reliably and continuously at its design capacity. Debt Service means the principal of and premium and interest on the Bonds. Debt Service also includes any amounts payable by the District under any interest rate swap or currency swap agreement, however denominated, relating to the Bonds, other than termination payments. District means the Washington County Water Conservancy District, a water conservancy district of the State of Utah organized and existing under the Conservancy Act, and its successors and assigns. Entitlement Share means the contractual entitlement of the District or one of the Participants to the Available Capacity of the Project under and subject to the terms and provisions of this Agreement. The Entitlement Share of each Participant and of the District is expressed as a percentage and is set forth on Exhibit A, except as such entitlement may be changed pursuant to the provisions of the Agreement. Water Transportation Agreement 30/24-Inch Line -3- Interlocal Act means the Interlocal Cooperation Act, Title 11, Chapter 13, Utah Code Annotated 1953, as amended. Metered Usage means, for each Month of each Contract Year, the Participant’s actual usage of the Available Capacity of the Project divided by the actual usage by all of the Participants and the District of the Available Capacity of the Project, in each case as metered by the District. Month means a calendar month. Monthly Costs means the sum of (1) Monthly Debt Service Costs and (2) Monthly O&M Costs. Monthly Debt Service Costs means, for each Month of a Contract Year, the amount required under the Bond Documents to be paid or deposited into any fund or account for Debt Service or for reserves for payment of Debt Service. Monthly O&M Costs means, for each Month of each Contract Year, all costs and expenses that are paid, incurred or accrued by the District with respect to the ownership, operation, maintenance and termination of, and repairs, renewals, replacements, additions, improvements, betterments and modifications to, the Project, and that are allocated among the Participants on the basis of their respective monthly amounts of usage of the Available Capacity of the Project (and not on the basis of their respective Entitlement Shares). Monthly O&M Costs shall include, without limitation, the following items: (1) All costs of operating and maintaining the Project, including working capital expenses of the District; (2) The amount which the District may be required to pay for the prevention or correction of any unusual loss or damage or for renewals, replacements, repairs, additions, improvements, modifications and betterments to the Project; (3) All costs relating to injury and damage claims not otherwise covered by insurance and arising out of the operation and maintenance of the Project; (4) Legally required or permitted federal, state or local taxes and payments in lieu of taxes incurred during the operation of the Project; (5) The costs of pumping water through the Project and the costs of operating, maintaining, repairing and replacing the pumps and pumping stations included in the Project; and (6) Any additional amount, other than Monthly Debt Service Costs, not specified in the other items of this definition that must be paid by the District during such Month with respect to the Project; provided, however, that general administrative and overhead expenses shall not be charged to the Project. Water Transportation Agreement 30/24-Inch Line -4- Operating Procedures means any procedures, policies, or plan regarding Project operations proposed by the Project Operations Manager and approved by the Coordinating Committee. Participant means the City of St. George, a municipal corporation and a political subdivision of the State of Utah. Participants means, collectively, the City of Ivins, the City of Santa Clara and the City of St. George. Project means that portion of the Westside Regional Pipeline Project, consisting of 30-inch and 24-inch diameter water transportation lines, a pump station, meters, and related facilities, equipment and improvements, as more fully described on Exhibit B, and any Project Additions. Project Additions means any improvements, additions or upgrades to the Project recommended by the District and approved by the Coordinating Committee pursuant to Section 9.1. Project Construction Manager means the District. Project Operations Manager means the District. Tax Exemption means the exclusion of interest on any Bond from gross income of its owner for federal income tax purposes. Westside Regional Pipeline Project means the water transportation project to deliver water from Quail Creek-Sand Hollow System for use in and by the Cities of St. George, Santa Clara, Washington and Ivins, consisting primarily of water pipelines, pump stations, valves, fittings, and related facilities, equipment and improvements. Section 1.2. References and Headings. References in this Agreement to Articles, Sections and Exhibits are references to the Articles and Sections of and Exhibits to this Agreement. The Article, Section and other headings, titles and captions in this Agreement are for convenience only and shall not influence the construction of this Agreement. Section 1.3. Authority. This Agreement is entered into pursuant to the authority contained in the Conservancy Act and the Interlocal Act. ARTICLE 2 TERM OF AGREEMENT Section 2.1. Effective Date and Termination Date. This Agreement shall become effective upon its execution and delivery by the Participant and the District and the execution Water Transportation Agreement 30/24-Inch Line -5- and delivery of all of the Agreements by all Participants and the District. This Agreement shall continue until the later of: (i) the date when the Project is terminated or the Project is disposed of; (ii) the date when the Bonds have been paid in full or provision for their payment has been made; or (iii) fifty years from the effective date of this Agreement. Section 2.2. Replacement Agreements After Expiration of this Agreement. If the Project remains in service at the time of the expiration of the term of this Agreement, the District agrees that it will offer to enter into replacement agreements with the Participants that will continue to provide to the Participants the right to receive water transportation services from the Project. Unless otherwise agreed to by the District and the Participants, any such replacement agreements will be on substantially the same terms and conditions as this Agreement. ARTICLE 3 PROJECT CONSTRUCTION MANAGER; SCOPE OF THE PROJECT Section 3.1. Project Construction Manager. The District shall serve as Project Construction Manager for the term of this Agreement. In such capacity, it shall be responsible for executing and carrying out the planning, design, acquisition and construction of the Project. The responsibilities of the Project Construction Manager include but are not limited to: (1) Supervising and managing all aspects of the acquisition and construction of the Project. (2) the Project. Letting all contracts and approving all subcontracts for the construction of (3) Preparing, maintaining and, as necessary, revising the construction budget for the Project. (4) Advising and consulting the Coordinating Committee with respect to the status of the construction of the Project at least monthly. (5) Upon completion of construction work and a final accounting, the Project Construction Manager shall prepare and submit to the Coordinating Committee a final breakdown of all of the Cost of Construction of the Project. The District agrees to discharge its responsibilities as Project Construction Manager in accordance with good or accepted practices in the water utility industry for facilities comparable to the Project. Section 3.2. Project Description; Changes to the Project. A description of the principal components of the Project is attached as Exhibit B to this Agreement. At any time or times, the Coordinating Committee may change the scope or components of the Project by adding or deleting additional properties, facilities, improvements or equipment, but only upon (i) the Water Transportation Agreement 30/24-Inch Line -6- recommendation of the District and (ii) the unanimous approval of the Coordinating Committee. In the event that any such change shall increase the Cost of Construction to exceed the amount available from the proceeds of the Bonds to pay such Cost of Construction or cause the estimated total of the Monthly O&M Expenses for any Contract Year (as estimated by the District) to increase by more than 5%, the change to the Project shall also require the approval of the City Council of each of the Participants. No change in the Project shall be made that would adversely affect the Tax-Exemption on the Bonds. ARTICLE 4 PROJECT OPERATIONS MANAGER Section 4.1. Project Operations. The District shall serve as Project Operations Manager for the term of this Agreement. In such capacity, it shall be responsible for the operation, maintenance, repair, renewal and replacement of the Project. The responsibilities of the Project Operations Manager include but are not limited to: (1) Preparing and implementing Operating Procedures. (2) Operating and maintaining the Project in an efficient and economical manner in accordance with good or accepted practices in the water utility industry for facilities comparable to the Project. (3) Repairing or replacing any components of the Project that have become worn, obsolete or damaged so as to keep the Project and its component parts in good working order. (4) Preparing and submitting to the Coordinating Committee for its approval each Annual Budget as provided in Section 8.3. (5) Maintaining accurate books and accounting records with respect to the Project and the Monthly O&M Costs. (6) Maintaining metering equipment sufficient to reliably measure each Participant’s Metered Usage of the Project. (7) Providing reports to the Coordinating Committee, quarterly or as otherwise reasonably directed by the Coordinating Committee, regarding the Project, its costs and operations, and keeping the Coordinating Committee advised of changes in conditions or other developments that affecting the operation of the Project or the performance of the District’s responsibilities as Project Operations Manager. (8) Preparing all recommendations to the Coordinating Committee regarding Project operations and any Project Additions that the District deems necessary or desirable. Water Transportation Agreement 30/24-Inch Line -7- (9) Follow operating, scheduling, and dispatching practices and procedures which have been reviewed and approved by the Coordinating Committee. The District agrees to discharge its responsibilities as Project Operations Manager in substantially the same manner and with substantially the same standard of care that it utilizes in managing the operation of its other works and facilities and in accordance with good and accepted practices in the water utility industry. ARTICLE 5 COORDINATING COMMITTEE Section 5.1. Membership and Quorum. The District and the Participants hereby establish the Coordinating Committee, which shall be chaired by the District, and which shall consist of one voting representative from the District and from each of the Participants. A quorum of the Coordinating Committee shall consist of the representative of the District and three or more of the Participants representing a majority of the Entitlement Shares. Section 5.2. Voting; Notice of Meetings. (a) Each representative on the Coordinating Committee shall have one vote, and all decisions shall be made by a majority of the representatives present at the meeting, provided that, upon the request of any Participant, a weighted vote may be taken, with the District and each Participant voting its Entitlement Share, in which event the decision shall be made by a majority of the Entitlement Shares and at least half of the representatives present at the meeting. Any Participant that is in default under Article 15 of one of the Agreements shall not be entitled to vote on any matter during the period of such default. In addition to the unanimous votes required by Sections 3.2 and 9.1, a unanimous vote of all Participants shall be required to terminate the Project as provided in Section 13.1. (b) All Participants shall be provided with at least five days’ written notice of each meeting of the Coordinating Committee, except that such notice requirement shall not apply with respect to a meeting if waived for such meeting in writing by the representatives of all Participants. Section 5.3. Coordinating Committee. The Coordinating Committee shall: (1) Advise and consult with the Project Construction Manager and the Project Operations Manager. (2) Review, comment on and approve the budget for the Cost of Construction of the Project. (3) Manager. Approve any Operating Procedures proposed by the Project Operations Water Transportation Agreement 30/24-Inch Line -8- (4) Declare the Date of Firm Operation. (5) Review, modify and approve the annual budget of Monthly O&M Costs for each Contract Year prepared by the Project Operations Manager. ARTICLE 6 FUNDING OF THE PROJECT Section 6.1. District to Issue Bonds. The District will issue one or more series of Bonds to finance the Cost of Construction of the Project and to refund Bonds previously issued by the District. The issuance by the District before December 31, 2002, of one or more series of Bonds in an aggregate principal amount not exceeding $20,000,000, maturing in not more than twentyone years from their date or dates, and bearing interest at a fixed rate or rates not to exceed seven percent (7.00%) per annum, is hereby approved. Any other series of Bonds shall be issued only upon the approval by the Coordinating Committee of (a) the maximum principal amount, maximum interest rate and maximum final maturity date for such Bonds, (b) the purpose for which the Bonds are being issued. Section 6.2. Payment of Bonds. Each series of the Bonds shall be secured by the amounts paid and payable by the Participants in respect of Monthly Debt Service Costs and by such other amounts as may be provided in the Bond Documents. The Bonds may be additionally secured by such debt service reserve funds, credit enhancements and other security features as may be determined by the District to be reasonably necessary to market the bonds at the lowest achievable interest expense. Section 6.3. No Obligation of the State or Others to Pay Bonds. Neither the State of Utah nor any political subdivision thereof (other than the District) shall be obligated to pay the Bonds. Neither the faith and credit nor the taxing power of the State of Utah or any political subdivision thereof or any Participant is pledged to the payment of the Bonds. No Bondholder or receiver or trustee in connection with the payment of the Bonds shall have any right to compel the State of Utah, any political subdivision thereof or a Participant to exercise its appropriation or taxing powers. ARTICLE 7 OWNERSHIP, TITLE, AND CAPACITY ENTITLEMENTS; SALE AND PURCHASE OF WATER TRANSPORTATION SERVICE Section 7.1. District to Own and Sell Available Capacity. The District shall own the Project and shall sell a portion of the Available Capacity of the Project to the Participants pursuant to the terms of the Agreements. Water Transportation Agreement 30/24-Inch Line -9- Section 7.2. Participants’ Entitlement Shares. The District’s and each Participant’s Entitlement Share is set forth in Exhibit A. The District and each Participant shall have the right to use the Available Capacity of the Project to the extent of its Entitlement Share. Section 7.3. Sale and Purchase of Entitlement Share. From and after the Date of Firm Operation for the Project, the District shall sell, and the Participant shall purchase, its Entitlement Share of the Available Capacity of the Project in accordance with the provisions of this Agreement. Section 7.4. Use of Entitlement Share. From and after the Date of Firm Operation for the Project, the Participant shall be entitled to utilize the water transportation capacity of the Project, up to an amount obtained by multiplying its Entitlement Share by the Available Capacity for the Project. ARTICLE 8 BUDGETS, BILLINGS AND PAYMENT Section 8.1. Monthly Participant Obligation. Commencing the earlier of (1) November, 2003 (being the 1st month that occurs one year after the date of issuance of the Bonds) and (2) the month following the month in which the Date of Firm Operation occurs, the Participant shall be obligated to pay for each Month an amount equal to the sum of: (i) and (ii) the product of its Metered Usage of the Project for such Month and the Monthly O&M Costs. Section 8.2. Monthly Billing by District. On or before the 5th day of each Month beginning with the first Month of the first Contract Year, the District will deliver to the Participant a monthly billing statement showing the amount payable by the Participant for Monthly O&M Costs and Monthly Debt Service Costs for the next preceding month, together with any adjustments to previous billing statements and any additional payments or credits. The Participant agrees to pay the total amount shown on the billing statement by the last day of the same Month. Section 8.3. Annual Budget. On or before the beginning of the first Contract Year (or as soon after such beginning as is practicable if the first Annual Budget cannot be adopted prior to such beginning) and on or before thirty (30) days prior to the beginning of each succeeding Contract Year, the District shall deliver to the Participants an Annual Budget prepared by the District and approved by the Coordinating Committee. Each Annual Budget shall show, for each Month of the following Contract Year the estimated Monthly O&M Costs and the actual or estimated Monthly Debt Service Costs. Water Transportation Agreement 30/24-Inch Line the product of its Entitlement Share and the Monthly Debt Service Costs, -10- Section 8.4. Changes to Annual Budget. At the end of each quarter during each Contract Year and at such other times as the Coordinating Committee shall deem desirable or as may be required by any change in facts and circumstances, the Coordinating Committee shall review the then-current Annual Budget. In the event such review indicates that the Annual Budget does not or will not substantially correspond with actual receipts or expenditures, or if at any time during such Contract Year there are, or the Coordinating Committee expects there will be, extraordinary receipts, credits or expenditures of costs which the Coordinating Committee determines will substantially affect such Annual Budget, the District shall prepare, adopt and mail to the Participant a revised Annual Budget incorporating adjustments to reflect such receipts, credits or expenditures which shall supersede the previous Annual Budget as a basis for the Participant’s monthly payments hereunder for the balance of that Contract Year. Section 8.5. Billing of Amount Not Paid By Other Participants. The Participant acknowledges and agrees that the provisions of Section 8.4 require that if any Participant fails to pay its share of the Monthly Costs of the Project, the District will amend the current Annual Budget to reflect such non-payment and the need to bill the amount of any such non-payment to all the Participants (including the non-paying Participant) proportional to the Participants’ respective Entitlement Shares. Any non-defaulting Participant that pays additional amounts as a result of a payment default by another Participant shall have the right to use its proportional share of the Capacity Entitlement of the defaulting Participant during the period of default. Section 8.6. Delayed-Payment Charges. If the Participant does not make timely payment in full of an amount due from it pursuant to Section 8.2, a delayed-payment charge will be imposed on the unpaid amount at a rate equal to the lesser of one percent per Month, compounded monthly, or the maximum rate lawfully payable by the Participant. If said due date is Saturday, Sunday or a legal holiday, the next following business day shall be the last day on which payment may be made without the addition of the delayed-payment charge. Section 8.7. Payment Disputes. In the event of any dispute as to any portion of any amount due from the Participant to the District pursuant to this Agreement, the Participant shall nevertheless pay the full amount of the disputed charges when due and shall give written notice of the dispute to the District not later than the 60 days after such bill was submitted. Such notice shall identify the disputed bill, state the amount in dispute and set forth a full statement of the grounds on which such dispute is based. No adjustment shall be considered or made for disputed charges unless notice is given as aforesaid. The Board shall give consideration to such dispute and shall advise the Participant with regard to its position relative thereto within 40 days following receipt of such written notice. Upon final determination (whether by agreement, adjudication or otherwise) of the correct amount, any difference between such correct amount and such full amount paid shall be accounted for on the statement next submitted to the Participant after such determination. Section 8.8. Annual Adjustment. On or before 180 days after the end of each Contract Year, the District will submit to the Participant a detailed statement of the total Monthly Costs of the Project for such Contract Year and the Participant’s share of each, together with any credits or adjustments to such amounts. If, on the basis of such statement, the total actual Monthly Costs allocable to the Participant exceed the amount that has been billed to and paid by the Water Transportation Agreement 30/24-Inch Line -11- Participant, the Participant shall promptly pay the District the amount of such excess. If, on the basis of such statement the total actual Monthly Costs allocable to the Participant are less than the amount that has been billed to and paid by Participant, the District shall include the amount of such underage as a credit on the next monthly statement or statements submitted to the Participant under Section 8.2. Section 8.9. Notice of Participant’s Obligation. The obligation of the Participant to make the payments under this Agreement is a several obligation and not a joint obligation with those of any other Participant. The Participant agrees to make such payments as an operating expense of the Participant’s water utility system and such payments shall be made solely from the revenues and other available funds of the Participant’s water utility system. Such payments shall constitute a cost of purchased water transportation service and an operating expense of the Participant’s water utility system. Such payments shall be made whether or not the Project is completed and whether or not the Project is operable or operating and notwithstanding the suspension, interruption, interference, reduction or curtailment of the water transportation capability of the Project in whole or in part for any reason whatsoever (including, without limitation, non-occurrence of any Date of Firm Operation, termination, sale, damage, destruction, condemnation, action by regulatory authority invalidating the Agreement or any other reasons of unavailability). The obligations of the Participant to make such payments shall not be subject to any reduction, whether by offset, counterclaim, or otherwise, and shall not be conditioned upon the performance of the Participant’s water utility under this or any other agreement, upon cash flow from impact fees, or upon any other event or condition. In no event shall this Agreement or the Participant’s payment obligations hereunder be deemed to constitute a debt secured by ad valorem property taxes levied by the Participant within the meaning of Article XIV, Section 3 of the Utah Constitution. Section 8.10. Collection of Certain Payments From Third Parties. The District shall use its best efforts to collect or cause to be collected (to the extent not credited or to be credited against the Cost of Construction) revenues and any other moneys receivable by it or credited to it from insurance proceeds, condemnation awards, damages in connection with the construction of the Project collected from contractors, subcontractors or others and proceeds from the sale or other disposition of surplus property, all related to the Project. Section 8.11. Application of Payments by Defaulting Participants. In the event of the failure of any Participant to make payments in accordance with its Agreement and the other Participants shall have made up the deficiency created by such failure, amounts thereafter paid to the District by such defaulting Participant for application to such past due payments including interest shall be credited upon the billing statements of such other Participants who made up said deficiencies in the next Month or Months as shall be appropriate. Section 8.12 Additional O&M Costs for Reserve and Project Additions. The Participant agrees that, with the approval of the Coordinating Committee, the District may establish additional reserve, contingency, self-insurance and/or working capital funds with respect to the Project and that such funds may be established and replenished from periodic billings to the Participants as a component of Monthly O&M Costs. The District shall also include in Monthly O&M Costs the Cost of Construction of any Project Addition that the District with the approval Water Transportation Agreement 30/24-Inch Line -12- of the Coordinating Committee has determined to fund through monthly billings to the Participants (rather than Bonds). ARTICLE 9 PROJECT ADDITIONS Section 9.1. Project Additions with Participant Approval. The District may from time to time recommend one or more Project Additions to the Coordinating Committee. In the event that the District determines that one or more improvements, additions or upgrades to the Project should be undertaken, the District will offer to the Participants to make such improvements, additions or upgrades part of the Project pursuant to, and for all purposes of, the Agreement. Any such improvements, additions or upgrades shall become a part of the Project if (and only if) unanimously agreed to by all the Participants within 90 days after such offer is first made by the District to the Participants. If so unanimously agreed to, then for all purposes of this Agreement: (1) The Project shall be deemed to include the Project Addition; (2) Available Capacity shall include any additional water transportation capacity available from the Project Addition; (3) Each Participant shall purchase its Entitlement Share of any increase in the Available Capacity of the Project; (4) Monthly O&M Costs shall include all such costs as are associated with the Project Addition; and (5) The costs of the Project Addition shall be funded by Bonds or monthly billings to the Participants, as determined by the District with the approval of the Coordinating Committee, in accordance with Section 8.12. Section 9.2. Project Additions without Participant Approval. In the event that the Participants do not unanimously agree to a Project Addition (including the addition of meters for the benefit of less than all of the Participants) becoming part of the Project in accordance with Section 9.1, then the District shall be entitled to proceed with the Project Addition at its own cost and expense and/or sell the water transportation capacity of the Project Addition to any other entity or entities (which may include one or more of the Participants) on such terms and conditions as the District shall choose; provided, however, that the District shall comply with the following terms and conditions prior to entering into any such sale: (1) The District shall first offer the additional capacity or service from such Project Addition to the Participants that agreed to the Project Addition under Section 9.1; and Water Transportation Agreement 30/24-Inch Line -13- (2) The District and any Participants or other entities that elect to purchase the additional capacity or service provided by the Project Addition shall enter into an agreement comparable to this Agreement to pay all costs associated with the Project Addition (including, without limitation, the costs of acquisition and construction, repair and replacement, debt service and operation and maintenance), such costs to be allocated, segregated and billed to the purchasers of such capacity or service in such a manner that the Participant shall not become obligated for any such costs under this Agreement. ARTICLE 10 INSURANCE Section 10.1. Insurance. The District shall maintain, or cause to be maintained, in force (the cost of which shall be part of the Cost of Construction or Monthly O&M Costs, as appropriate) insurance with responsible insurers with policies payable to the parties as their interest shall appear, against risk of direct physical loss, damage or destruction of the Project, at least to the extent that similar insurance is usually carried by utilities constructing and operating water transportation facilities of the nature of the water transportation facilities of the Project, including liability insurance and employers’ liability, all to the extent available at reasonable cost but in no case less than will satisfy all applicable requirements. ARTICLE 11 ACCOUNTING Section 11.1. District to Keep Project Records; Annual Audit. The District will keep or cause to be kept accurate records and accounts relating to the Project, the Participants’ Entitlement Shares and the Monthly Costs, in accordance with generally accepted accounting principles applicable to governmental units comparable to the District, separate and distinct from its other records and accounts. Said accounts shall be audited annually by a firm of independent certified public accountants. Such audit may, at the election of the District, be performed as a part of the annual general audit of the District. A copy of each annual audit, including all written comments and recommendations of such accountants, shall be furnished by the District to the Participant not later than 180 days after the end of each Contract Year. Section 11.2. Participant’s Annual Audit to District. The Participant shall furnish to the District, not later than 180 days after the termination of each fiscal year, a copy of its annual audit for such fiscal year, including all written recommendations and comments of the auditors making such audit. Water Transportation Agreement 30/24-Inch Line -14- ARTICLE 12 INFORMATION TO BE MADE AVAILABLE Section 12.1. Information Available to Participants. The District agrees that the following information shall be available for inspection by the Participants: (1) All books of account, records, documentation and contracts in the possession of the District relating to the construction and operation of the Project; (2) Project; and Copies of all operating and financial records and reports relating to the (3) Copies of policies of insurance carried pursuant to Section 10.1 shall be available for examination and audit by the Participant. Section 12.2. Opinion of Participant’s Counsel. The Participant shall, concurrently with the execution and delivery of this Agreement, cause its attorney or attorneys to deliver to the District an opinion to the effect that this Agreement has been duly authorized, executed, and delivered by the Participant and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms. Section 12.3. Participant to Provide Information. The Participant shall (at its expense) furnish to the District any information regarding the business and affairs of the Participant reasonably requested by the District for use in an official statement, offering memorandum or continuing disclosure statement relating to Bonds. The Participant shall (at its expense) also assist and cooperate in the preparation of any part of such official statement, offering memorandum or continuing disclosure statement relating to the Participant and its business and affairs and shall also take such action and obtain such legal, financial, accounting and other opinions, as the District shall reasonably request in connection with the issuance of such Bonds. ARTICLE 13 DISPOSITION OR TERMINATION OF THE PROJECT Section 13.1. Disposition or Termination of the Project. The District shall not sell or otherwise dispose of all or any portion of the Project without the consent of all Participants. This Section 13.1 shall not prohibit a merger or consolidation or sale of all or substantially all of the property of the District, provided that this Agreement is assumed by the surviving entity and continues in effect after any such merger, consolidation or sale. If all of the Agreements are terminated, the District shall convey its interests in the Project to the Participants as tenants in common in proportion to their Entitlement Shares, subject to any limitations in the Bond Documents. If the operation of the Project shall be terminated, the District shall use its best efforts to cause its interest in the Project to be economically salvaged, discontinued, disposed of Water Transportation Agreement 30/24-Inch Line -15- or sold in whole or in part, subject to any limitations in the Bond Documents and the District shall make accounting statements to the Participant of all costs and credits associated therewith. ARTICLE 14 PARTICIPANT’S COVENANTS Section 14.1. that it will: General Covenants. The Participant covenants and agrees with the District (1) operate and maintain its municipal water system in accordance with good utility practices; (2) cooperate with the District in the performance of their respective obligations under this Agreement; and (3) fix, charge and collect rents, rates, impact and other fees and charges for services, facilities, and commodities, sold, furnished, or supplied through its municipal water system sufficient to provide revenues adequate to timely (a) meet its obligations under this Agreement, (b) pay other amounts payable from or constituting a charge and lien upon such revenues, and (c) pay the principal of and interest on all revenue bonds related to the Participant’s municipal water system and, to the extent being paid from revenues of such municipal water system, all general obligation bonds of the Participant now outstanding or hereafter issued for purposes related to its municipal water system. Section 14.2. Tax Exemption Covenants. In order to preserve and maintain the Tax Exemption of the Bonds, the Participant and the District covenant and agree, as follows: (1) The Participant shall not use or permit to be used any of its Capacity Entitlement in the Project acquired under this Water Transportation Agreement or operate its water utility system in any manner or for any purpose or take or omit to take any action which could, either alone or in conjunction with any other similar actions by the Participant or other Participants, result in a loss of the Tax Exemption on the Bonds theretofore issued or thereafter issuable by the District, pursuant to the provisions of the Internal Revenue Code of 1986, as amended, and applicable regulations and rulings thereunder. (2) At the time of the execution of this Water Transportation Agreement, the Participant has no contracts and has no current expectation of entering into any contracts under which any non-governmental entity agrees to purchase water service from the Participant on a basis different from that on which the Participant provides water service to the general public. Water Transportation Agreement 30/24-Inch Line -16- ARTICLE 15 EVENT OF DEFAULT AND REMEDIES Section 15.1. Payment Default. Failure of any Participant to pay any amount when due under this Agreement shall constitute a default on the part of the Participant and written notice of the default will be given promptly by the District to the Participant. Failure to give notice will not constitute a waiver by the District of the default. Section 15.2. Right to Recover Payments in Default. Notwithstanding the provisions of Section 8.5, in the event of any default referred to in Section 15.1, the Participant shall not be relieved of its liability for payment of the amounts in default and the District shall have the right to recover from the Participant any amount in default. In enforcement of any such right of recovery, the District may bring any suit, action, or proceeding in law or in equity, including mandamus and action for specific performance, as may be necessary or appropriate to enforce any covenant, agreement or obligation to make any payment for which provision is made in this Agreement against the Participant and, the District may, upon 30 days written notice to the Participant, cease and discontinue providing all or any portion of the Participant’s Entitlement Share. Section 15.3. Transfer of Defaulting Participant’s Entitlement Share. Following the discontinuance of service pursuant to Section 15.2, the District shall offer to transfer to all other Participants which are not in default a pro rata portion of the defaulting Participant’s Entitlement Share. The defaulting Participant shall remain liable to the District or the non-defaulting Participants, as the case may be, for the full amounts it would have been obligated to pay under its Agreement until such time as one or more of the non-defaulting Participants has agreed in writing to assume the obligations of the defaulting Participant under this Agreement. Section 15.4. District’s Right to Enforce Covenants. In the event of a failure of the Participant to fix, charge or collect rates or charges adequate to provide revenues sufficient to enable the Participant to pay all amounts due under this Agreement or in the event of any default by the Participant under any other covenant, agreement or obligation of this Agreement, the District may bring any suit, action, or proceeding in law or in equity, including mandamus, injunction and action for specific performance, as may be necessary or appropriate to enforce any covenant, agreement or obligation of this Agreement against the Participant. Section 15.5. Limitation on Participant’s Remedies for District Default. In the event of any default by the District under any covenant, agreement or obligation of this Agreement, the Participant’s remedy for such default shall be limited to mandamus, injunction, action for specific performance or any other available equitable remedy as may be necessary or appropriate. Section 15.6. Restoration to Former Position. In case any proceeding taken on account of any default shall have been discontinued or abandoned for any reason, the parties to such proceedings shall be restored to their former positions and rights hereunder, respectively, and all Water Transportation Agreement 30/24-Inch Line -17- rights, remedies, powers and duties of the District and the Participant shall continue as though no such proceedings had been taken. Section 15.7. No Implied Waiver. Any waiver at any time by either the District or the Participant of its rights with respect to any default of the other party hereto, or with respect to any other matter arising in connection with this Agreement, shall not be a waiver with respect to any subsequent default, right or matter. ARTICLE 16 RELATIONSHIP TO AND COMPLIANCE WITH OTHER INSTRUMENTS Section 16.1. Participant’s Recognition of Certain Requirements on District. The Participant acknowledges and agrees that the District, in undertaking the planning, financing, engineering, construction, acquisition, operation and maintenance of the Project must comply with the requirements of the Bond Documents and any required or necessary licenses, permits and regulatory approvals, and it is therefore agreed that this Agreement is made subject to the terms and provisions of the Bond Documents, and all such licenses, permits and regulatory approvals. Section 16.2. Defects in Other Agreements. The Participant recognizes and agrees that the District will enter into separate Agreements with the other Participants concurrently with execution and delivery of this Agreement. Any defect in, invalidity or unenforceability of or termination for default of any other Agreement shall not affect the validity or enforceability or the term of this Agreement. ARTICLE 17 NON-DEDICATION OF FACILITIES Section 17.1. Non-Dedication of District Facilities. This Agreement shall not be construed to grant to any Participant any rights of ownership in, possession of, or control over all or any part of the District’s water utility system and works. Each Participant acknowledges and agrees that, except for its Entitlement Share in the Project, this Agreement gives it no rights or privileges with respect to, and the District has not dedicated, any part of the District’s water utility system and works. Section 17.2. No Implied Obligation to Provide Other Services. In no event shall there be any obligation of the District to provide water transportation service to the Participant under this Agreement other than from the Available Capacity of the Project. Water Transportation Agreement 30/24-Inch Line -18- ARTICLE 18 LIABILITY OF PARTIES Section 18.1. Liability of Parties. The District and the Participant shall assume full responsibility and liability for the maintenance and operation of their respective properties and each shall indemnify and save harmless the other from all liability and expense on account of any and all damages, claims, or actions, including injury to or death of persons arising from any act or omission in connection with the installation, presence, maintenance and operation of the property and equipment of the indemnifying party and not caused in whole or in part by the negligence of the other party; provided that any liability which is incurred by the District through the operation and maintenance of the Project pursuant to the Agreement and not covered, or not covered sufficiently, by insurance shall be paid solely from the revenues of the District derived from or pursuant to the Agreement, and any payments made by the District to satisfy such liability shall become part of Monthly O&M Costs. ARTICLE 19 ASSIGNMENT OF THE AGREEMENT, SALE OF PARTICIPANT’S SYSTEM Section 19.1. Limitation on Assignment. This Agreement shall inure to the benefit of and shall be binding upon the respective successors and assigns of the parties to this Agreement; provided, however, that except as provided in Article 15 in the event of a default, neither this Agreement nor any interest herein shall be transferred or assigned by either party hereto except in compliance with this Agreement. Section 19.2. Limitation on Participant’s Disposition of Its Water System. The Participant agrees that it will not sell, lease or otherwise dispose of all or substantially all of its municipal water utility system except upon 90 days prior written notice to the District and upon compliance with the following conditions: (i) the Participant shall assign its rights and interests under this Agreement to one or more of the other Participants or, if none of the other Participants agree to such assignment, to the purchaser or lessee of the Participant’s water utility system, and the other Participants or such purchaser or lessee shall assume all obligations of the Participant under this Agreement; and (ii) the District shall determine that such sale, lease or other disposition will not adversely affect the value of this Agreement as security for the payment of the Bonds or the Tax Exemption on the Bonds. Section 19.3. Limitation on Participant’s Disposition of Entitlement Share. Subject to compliance with the terms of this Section and Sections 19.4 and 20.1, the Participant may sell, assign or dispose of any portion of its Entitlement Share or the water transportation rights attributable thereto with respect to the Project upon (1) 90 days’ prior written notice to the District and (2) the determination by the District that such sale, assignment or disposition (a) is on terms and conditions substantially similar to and consistent with those contained in this Agreement, and (b) will not adversely affect the Tax Exemption of the Bonds issued or to be issued by the District. No such sale, assignment or disposition of any Entitlement Share or water Water Transportation Agreement 30/24-Inch Line -19- transportation rights attributable thereto shall relieve the Participant from its primary obligation and liability under this Agreement. Section 19.4. Right of First Refusal of Other Participants. The Participant shall not sell, assign or dispose of all or any portion of its Entitlement Share to any entity that is not a Participant unless the Participant shall have offered to sell such portion to the other Participants on the same basis as it shall be able to sell such portion to such non-Participant. In order to give effect to this provision, the Participant agrees that if it has a portion or all of its Entitlement Share with respect to the Project available for sale, assignment or disposition, it shall first offer to sell, assign or dispose such amount to the other Participants on terms and conditions identical to those contained in this Agreement, provided, however, that nothing in this Article 19 limits the amount for which the Participant may sell, assign, or dispose of its Entitlement Share. ARTICLE 20 GENERAL AND MISCELLANEOUS PROVISIONS Section 20.1. Notice and Computation of Time. Any notice or demand by the Participant to the District under this Agreement shall be deemed properly given if mailed postage prepaid and addressed to the District at its principal office; any notice or demand by the District to the Participant under this Agreement shall be deemed properly given if mailed postage prepaid and addressed to the Participant at its principal office as designated in writing to the District. In computing any period of time from such notice, such period shall commence at noon on the date postmarked. The designations of the name and address to which any such notice or demand is directed may be changed at any time and from time to time by either party giving written notice as above provided. Section 20.2. of Utah. Governing Law. This Agreement shall be governed by the laws of the State Section 20.3. Severability. If any section, paragraph, or provision of this Agreement shall be finally adjudicated by a court of competent jurisdiction to be invalid, the remainder of this Agreement shall remain in full force and effect as though such section, paragraph or provision or any part thereof so adjudicated to be invalid had not been included herein. Section 20.4. No Third Party Beneficiaries. Except as to the holders of Bonds, this is not a third party beneficiary contract. Section 20.5. Force Majeure. No Participant shall be considered to be in default in performance of any of its obligations under this Agreement, except to make payments as specified herein, when a failure of performance shall be due to an uncontrollable force. The term “uncontrollable force” means any cause beyond the control of the Participant affected, including, but not restricted to, failure or threat of failure of facilities, flood, earthquake, storm, fire, lightning, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, and restraint by court or public authority and action or non-action Water Transportation Agreement 30/24-Inch Line -20- by, or failure to obtain the necessary authorizations or approvals from, any governmental agency or authority, which by exercise of due diligence and foresight such Participant could not reasonably have been expected to avoid and which by exercise of due diligence it shall be unable to overcome. Nothing contained herein shall be construed to require a Participant to settle any strike or labor dispute in which it may be involved. Any Participant rendered unable to fulfill any obligation under this Agreement by reason of uncontrollable force shall give prompt written notice of such fact to the District and shall exercise due diligence to remove such inability with all reasonable dispatch. Section 20.6. Amendments to Agreement. Except as otherwise specifically provided herein, revisions, amendments, supplements or other modifications to the Agreements may be made at any time or times upon the written and unanimous consent of all Participants with current voting rights as provided under Section 5.2. Section 20.7. Execution of Counterparts. This Water Transportation Agreement may be executed by the District and the Participant in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 20.8. Binding Effect. This Water Transportation Agreement shall inure to the benefit of and shall be binding upon the District, the Participant and each of their respective successors and assigns. Water Transportation Agreement 30/24-Inch Line -21- IN WITNESS WHEREOF, the parties hereto have caused this Water Transportation Agreement to be executed by their proper officers respectively, being thereunto duly authorized, and their respective corporate seals to be hereto affixed, as of the day and year first above written. WASHINGTON COUNTY WATER CONSERVANCY DISTRICT By Chairman ATTEST: ___________________________________ Secretary [SEAL] CITY OF ST. GEORGE By Mayor ATTEST AND COUNTERSIGN: ___________________________________ City Recorder [SEAL] Water Transportation Agreement 30/24-Inch Line -22- EXHIBIT A ENTITLEMENT SHARES OF PARTICIPANTS PARTICIPANT City of Ivins City of Santa Clara City of St. George Washington County Water Conservancy District ENTITLEMENT SHARE 30” AND 24” LINES 24.5% 7.6% 49.6% 18.3% TOTAL: 100.00% Water Transportation Agreement 30/24-Inch Line A-1 EXHIBIT B PROJECT DESCRIPTION (30-INCH AND 24-INCH PIPELINES PROJECT) The Project will consist of (1) a 30-inch pipeline connected to the 60-inch pipeline (that is a part of the Westside Regional Pipeline Project) at the Washington Fields Road east of Washington City and running across the Virgin River, following the west side of the Virgin River to Black Ridge, then following the east side of Black Ridge northwesterly to I-15, then under I-15 to the frontage road, then south past Black Ridge, then following Skyline Drive and Snow Canyon Parkway to Bluff Street and connecting to the following 24-inch pipeline and (2) a 24-inch pipeline connected to the foregoing 30-inch pipeline and running in a northwesterly direction along Snow Canyon Parkway to the Snow Canyon Road, then following the Snow Canyon Road north to the Snow Canyon storage tanks. The 30-inch pipeline portion of the Project includes approximately 42,000 feet of 30-inch pipe, two pump stations, valves, fittings, and related facilities, equipment and improvements. The 24-inch pipeline portion of the Project includes approximately 6,225 feet of 24-inch pipe, valves, fittings, and related facilities, equipment and improvements. Water Transportation Agreement 30/24-Inch Line B-1