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WA-ER E N E R G Y L I F E is I \' f .101 U F PUBLIC UTILITIES RIVERSIDE PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: OCTOBER 3, 2014 ITEM NO: 5 SUBJECT: FIRST AMENDMENT TO THE WELL RELOCATION AGREEMENT BETWEEN CITY OF RIVERSIDE PUBLIC UTILITIES AND OSR DEVELOPMENT, LLC ISSUE: The item for Board of Public Utilities consideration is approval of the First Amendment to the Well Relocation Agreement with OSR Development, LLC, dated September 30, 2013. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council approve the First Amendment to the Well Relocation Agreement with OSR Development, LLC, dated September 30, 2013. BACKGROUND: In 2012, OSR Development, LLC (OSR), as successor -in- interest to Hillwood Enterprises, L.P., approached the City of Riverside (City) with a proposal to develop the 35.56 -acre site known as the Raub Tract, an area generally bounded by Waterman Avenue, Orange Show Road, the Santa Ana River and the Atchison Topeka & Santa Fe Railway. The Raub Tract is the current site for five of the City's active production water Wells: Raub 4, Raub 5, Raub 6, Raub 7 and Raub 8. The City Council provided guidance on February 19, 2013 and on June 18, 2013, with direction to staff to negotiate on the development proposal. On September 20, 2013, the Board of Public Utilities approved the Well Relocation Agreement after staff finalized negotiations. Since the date of the Agreement, the City and OSR have developed the construction drawings and specifications for the agreed scope of Well Relocation, which include the relocations of Raub 4 and Raub 5 Wells. The City and OSR now desire to modify the Agreement to set forth the parties' agreement regarding the timing, allocation and funding for the costs for the Well Relocation Work and any requested additional work by the City, upon the terms and conditions set forth in the attached First Amendment to Well Relocation Agreement. The City and OSR currently anticipate that the Raub 4R Well will be complete no later than January 15, 2015 and delivered to the City for service. The Raub 5R Well is anticipated to start construction in April 2015, and be complete no later than November 15, 2015. FISCAL IMPACT: The fiscal impact to the City will remain unchanged as entered into the three agreements with OSR and maintaining the Ground Lease Agreement for 55 years (see attachment). If the City opts to terminate the agreements early, the City may be subject to reimbursement and other costs to OSR. Prepared by: Approved by: Approved by: Approved as to form. Kevin S. Milligan, Assistant General Manager/Water Girish Balachandran, Public Utilities General Manager Belinda J. Graham, Assistant City Manager Cristina Talley, Interim City Attorney