2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA SANTA MARIA VALLEY WATER CONSERVATION DISTRICT, SANTA MARIA GROUNDWATER LITIGATION Lead Case No. CV 770214 Plaintiff, CONSOLIDATED FOR ALL PURPOSES) [Consolidated With Case Numbers: CV 784900; CV 785509; CV 785522; CV7 787150; CV 784921; CV 785511; CV 785936; CV 787151; CV 784926; CV7 785515; CV 786791; CV 787152; V. CITY OF SANTA MARIA, et al., Detendants. CV036410] 17 AND: RELATED CROSS-ACTIONS AND San Luis Obispo County Superior Court Case ACTIONS CONSOLIDATED FOR ALL Nos. 990738 and 990739 18 PURPOSES 19 20 21 22 23 24 25 26 27 28 [Assigned to. Judge Jack Komar for All Purposes] STIPULATION (JUNE 30, 2005 VERSION) SB3 375327 V1:006774.0076: 6/30/05 STIPULATION (06/30/05) TABLE OF CONTENTS 2 3 I. 4 5 6 II. 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 26 27 28 Page INTRODUCTION- ALL: MANAGEMENT AREAS. A. Parties and Jurisdiction B. Further Trial. C. Definitions. EXHIBITS 2 6 7 7 7 7 7 7 8 8 8 8 9 10 11 11 11 14 15 17 20 21 21 23 24 25 27 28 29 29 29 7 II. DECLARATION OF RIGHTS - ALL MANAGEMENT AREAS A. Recognition of] Priority ofOverlying Rights.. B. Prescriptive Rights C. Appropriative Rights. D. Developed Water Rights E. Rights to Storage Space F. Other Surface Water Rights. IV. PHYSICAL SOLUTION - ALL MANAGEMENT AREAS A. Authority B. F. Purposes and Objectives C. Basin Management Areas D. Groundwater Monitoring E. New Developed Water. Severe Water Shortage Response VALLEY MANAGEMENT AREA. A. Water Rights to Sources of Supply. B. Monitoring and Management. C. Response to Varying Conditions. 16 V. PHYSICAL SOLUTION: PROVISIONS SPECIFIC TO SANTA MARIA D. Management and. Administration ofthe Twitchell Project.. E. New Urban Uses - Santa Maria Valley Management Area.. VI. PHYSICAL SOLUTION: PROVISIONS SPECIFIC TO NIPOMO MESA MANAGEMENT AREA. Supplemental Water. B. Rights to Use Groundwater. C. NMMA Technical Group. E. New Urban Uses MANAGEMENT AREA. A. D. Potentially Severe and Severe Water Shortage Conditions 25 VII. PHYSICAL SOLUTION: PROVISIONS SPECIFICTO NORTHERN CITIES VIII. INJUNCTION - ALL MANAGEMENT AREAS. A. Use Only Pursuant to Stipulation. B. Injunction Against Transportation From the Basin.. -i- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 I 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. No Third Party Beneficiaries 29 30 30 31 31 31 31 31 32 32 32 33 33 33 34 34 34 35 35 2 IX. RESERVEDJURISDICTION - ALL: MANAGEMENT AREAS. A. Reserved Jurisdiction; Modifications, Cancellations, Amendments. B. Noticed Motion C. De Novo Nature of Proceeding D. Filing and Notice.. X. MISCELLANEOUS PROVISIONS - ALL MANAGEMENT AREAS. A. Unenforceable Terms B. Water Quality. C. Duty to Cooperate F. No Loss ofl Rights G. Intervention After. Judgment D. Stipulating Parties Under Public Utilities Commission Regulation E. Designation of Address, for Notice and Service. H. Stipulation and Judgment Binding on Successors, Assigns, etc. I. Costs.. J. Non-Stipulating Parties. K. Counterparts. L. Effective Date.. ii- STIPULATION (06/30/05) SB3 375327 v1:006774.0 0076: 6/30/05 1 I. 2 4 5 INTRODUCTION- = ALLMANAGEMENT AREAS The Stipulating Parties hereby stipulate and agree to entry of judgment containing the 3 terms and conditions ofthis Stipulation. A. Parties and Jurisdiction 1. Plaintiff and Cross-Defendant Santa Maria Valley Water Conservation District 6 ("District") is a water conservation district organized under California Water Code section 74000, 7 et seq. The District does not pump Groundwater from the Basin. 8 2. Defendants, Cross-Complainants and Cross-Defendants the City of Santa Maria 9 ("Santa Maria"), City of Guadalupe ("Guadalupe"), Southern California Water Company 10 ("SCWC"), Nipomo Community Services District ("NCSD"), Rural Water Company ("RWC"), 11 City of Arroyo Grande ("Arroyo Grande"), City of Pismo Beach ("Pismo Beach"), City of Grover 12 Beach ("Grover Beach") and Oceano Community Services District ("Oceano") rely, in part, on 13 Groundwater to provide public water service to customers within the Basin. 14 3. Cross-Defendant County of San Luis Obispo ("San Luis Obispo") is a subdivision 15 of the State of California. Cross-Defendant San Luis Obispo County Flood Control and Water 16 Conservation District ("SLO District") is a public entity organized pursuant to the laws of the 17 State of California. Neither San Luis Obispo nor SLO District pumps Groundwater from the 18 Basin. 19 21 4. 5. Cross-Defendant County of Santa Barbara ("Santa Barbara") is a subdivision of Numerous other Cross-Defendants and Cross-Complainants are Overlying 20 the State of California. Santa Barbara does not pump Groundwater from the Basin. 22 Owners. Many of these Overlying Owners pump Groundwater from the Basin, while others do 23 not currently exercise their Overlying Rights. Those Overlying Owners who are Stipulating 24 Parties are identified on Exhibit" "A". 25 6. This action presents an inter se adjudication of the claims alleged between and 26 among all Parties. This Court has jurisdiction over the subject matter of this action and over the 27 Parties herein. 28 111 -1- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 2 B. Further Trial The Stipulating Parties recognize that not all Parties have entered into this Stipulation and 3 that a trial will be necessary as to all non-Stipulating Parties. No Stipulating Party shall interfere 4 or oppose the effort of any other Stipulating Party in the preparation and conduct of any such 5 trial. All Stipulating Parties agree to cooperate and coordinate their efforts in any trial or hearing 6 necessary to obtain entry of a judgment containing the terms and conditions of this Stipulation. 7 No Stipulating Party shall have any obligation to contribute financially to any future trial. 8 9 10 11 31. 12 14 16 C. Definitions As used in this Stipulation, the following terms shall have the meanings herein set forth: 1. Annual or Year That period beginning January 1 and ending December 2. Annual Report = The report prepared and filed with the Court annually for 13 each Management Area. 3. 4. Appropriative Rights - The right to use surplus Native Groundwater for Available State Water Project Water - The amount of SWP Water an 15 reasonable and beneficial use. 17 Importer is entitled to receive in a given Year based upon the California Department of Water 18 Resources final Table A allocation. 19 21 5. 6. Basin - The groundwater basin described in the Phase I and II orders of the Developed Water - Groundwater derived from human intervention as of 20 Court, as modified, and presented in Exhibit "B". 22 the date of this Stipulation, which shall be limited to Twitchell Yield, Lopez Water, Return 23 Flows, and recharge resulting from storm water percolation ponds. 24 26 7. 8. Groundwater = Twitchell Yield, Lopez Water, Return Flows, storm water Importer(s) - Any Party who brings Imported Water into the Basin. At the 25 percolation, Native Groundwater and all other recharge percolating within the Basin. 27 date of this Stipulation, the Importers are Santa Maria, SCWC, Guadalupe, Pismo Beach, and 28 Oceano. -2- STIPULATION (06/30/05) SB3 375327V,0067740076: 6/30/05 9. Imported Water Water within the Basin, originating outside the Basin 2 that absent human intervention would not recharge or be used in the Basin. 3 10. Lopez Project - Lopez Dam and Reservoir located on Arroyo Grande 4 Creek, together with the associated water treatment plant, delivery pipeline and all associated 5 facilities, pursuant to State Water Resources Control Board permit No. 12814 (A-18375) and 6 pending application No. A-30826. 7 9 11. Lopez Water- Groundwater within the Basin derived from the operation of 12. Management Areas - The three areas within the Basin that have sufficient 8 the Lopez Project. 10 distinguishing characteristics to permit the water resources and facilities of each area to be 11 individually managed. The Management Areas are: the Northern Cities Management Area, the 12 Nipomo Mesa Management Area, and the Santa Maria Valley Management Area, as shown on 13 Exhibit "C". 14 13. Management Area Engineer = The individual(s) or consulting firm(s) that 15 are hired to prepare the Monitoring Plan(s) and Annual Report(s) for one or more of the 16 Management Areas. 17 19 21 14. Monitoring Parties - Those Parties responsible for conducting and funding 15. Monitoring Program = The data collection and analysis program to be con- 16. Native Groundwater Groundwater within the Basin, not derived from 18 each Monitoring Program. 20 ducted within each Management Area sufficient to allow the preparation of the Annual Report. 22 human intervention, that replenishes the Basin through precipitation, stream channel infiltration, 23 tributary runoff, or other natural processes. 24 26 17. New Developed Water - Groundwater derived from human intervention 18. New Urban Uses - Municipal and industrial use which may occur on land 25 through programs or projects implemented after the date oft this Stipulation. 27 that, as of. January 1, 2005, was located: 1) within the boundaries ofa a municipality or its sphere of 28 influence, or within the process ofinclusion in its sphere ofinfluence; or 2) within the certificated -3- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 service area ofa publicly regulated utility. The New Urban Use areas are identified in Exhibit 2 "D". New Urban Uses does not include the current DJ Farms development within Guadalupe 3 City limits (including Santa Barbara County APN113-080-18, 113-080-24). 4 6 19. Nipomo Mesa Management Area or NMMA - That Management Area 20. Nipomo Mesa Management Area Technical Group - The committee 5 shown on Exhibit "C". 7 formed to administer the relevant provisions of the Stipulation regarding the Nipomo Mesa 8 Management Area. 9 21. Northern Cities Management Area - That Management Area which is part 10 of Zone #3 of the San Luis Obispo County Flood Control and Water Conservation District as 11 shown on Exhibit "C". 12 13 Oceano. 14 16 18 20 22 24 26 22. Northern Cities Arroyo Grande, Pismo Beach, Grover Beach and 23. Northern Parties = The Northern Cities, the Overlying Owners within the 24. Overlying Right - The appurtenant right of an Overlying Owner to use 25. Overlying Owner(s) - Owners of land overlying the Basin who hold an 26. Party - Each Person in this consolidated action, whether a Stipulating 27. Person - Any natural person, firm, association, organization, joint venture, 28. Public Hearing A hearing after notice to all Parties and to any other 29. Return Flows - Groundwater derived from use and recharge within the 15 Northern Cities Management Area, San Luis Obispo and the SLO District. 17 Native Groundwater for overlying, reasonable and beneficial use. 19 Overlying Right. 21 Party or a non-Stipulating Party. 23 partnership, business, trust, corporation, or public entity. 25 person legally entitled to notice. 27 Basin of water delivered through State Water Project facilities. 28 111 -4- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 30. Santa Maria Valley Management Area - That Management Area shown on 31. Severe Water Shortage Conditions = Those conditions, as separately 2 Exhibit "C". 3 4 defined in a Severe Water Shortage Response Plan for each Management Area, that trigger 5 certain discretionary and mandatory responses by the Stipulating Parties upon order oft the Court. 7 responses for each Management Area that are to be implemented when Severe Water Shortage 6 32. Severe Water Shortage Response Plan = The discretionary and mandatory 8 Conditions exist. 9 33. State Water Project Water or SWP Water = Water imported through the 10 State of California State Water Resources Development System pursuant to Division 6, Part 6, 11 Chapter 8, of the California Water Code. 12 14 16 18 34. Stipulating Party = A Party that has signed this Stipulation, as listed in 35. Storage Space - The portion ofthe Basin capable of holding water for sub- 36. SWP Contract(s) - Those series of contracts that entitle the Importers to 37. Twitchell Management Authority or TMA - The committee formed to 13 Exhibit "A", ori its heirs, executors, administrators, trustees, successors, assigns, and agents. 15 sequent reasonable and beneficial uses. 17 use SWP facilities to bring Imported Water into the Basin. 19 administer the relevant provisions of the Stipulation regarding the Santa Maria Valley Manage- 20 ment Area. 21 23 38. Twitchell Participants Those Stipulating Parties holding rights to 39. Twitchell Project - Dam and reservoir authorized by Congress as the 22 Twitchell Yield. 24 "Santa Maria Project" on September 3, 1954 (Public Law 774, 83d Congress, ch. 1258, 2d 25 session, 68 Stat. 1190) and located on the Cuyama River, approximately six miles upstream from 26 its junction with the Sisquoc River, pursuant to that certain License For Diversion And Use of 27 Water, License No. 10416, issued by the State Water Resources Control Board. 28 111 -5- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 2 Project. 3 40. Twitchell Water - Groundwater derived from operation of the Twitchell 41. Twitchell Yield - The total amount of Groundwater allocated annually to 4 the Twitchell Participants. 5 II. EXHIBITS 6 7 9 11 12 Areas. 13 The following Exhibits are attached to this Stipulation and incorporated herein: 1. 2. 3. 4. Exhibit "A", list identifying the Stipulating Parties and the parcels of land Exhibit "B", Phase I and II Orders, as modified, and the attached map Exhibit "C", map of the Basin and boundaries of the three Management Exhibit "D", map identifying those lands as of January 1, 2005: 1) within 8 bound by the terms of this Stipulation. 10 depicting the Santa Maria Basin. 14 the boundaries ofai municipality or its sphere ofinfluence, or within the process ofinclusion in its 15 sphere ofinfluence; or 2) within the certificated service area of a publicly regulated utility; and a 16 list of selected parcels that are nearby these boundaries which are excluded from within these 17 areas. 18 20 22 24 26 5. 6. 7. 8. Exhibit "E", 2002 Settlement Agreement between the Northern Cities and Exhibit "F", the agreement among Santa Maria, SCWC and Guadalupe Exhibit "G", the Court's Order Concerning Electronic Service ofPleadings Exhibit "H", the form ofmemorandum ofa agreement to be recorded. 19 Northern Landowners. 21 regarding the Twitchell Project and the TMA. 23 and Electronic Posting of Discovery Documents dated June 27, 2000. 25 III. DECLARATION OF RIGHTS = ALLI MANAGEMENT AREAS The terms and conditions of this Stipulation set forth a physical solution concerning 27 Groundwater, SWP Water and Storage Space, consistent with common law water: rights priorities. 28 111 -6- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 2 A. Recognition of Priority of Overlying Rights Except as expressly modified by the settlement agreement among the Northern Parties 3 (Exhibit "E"), all Overlying Owners that are also Stipulating Parties have a prior and paramount 4 Overlying Right, whether or not yet exercised. 5 6 B. Prescriptive Rights As to the Stipulating Parties, no Party has proved prescriptive rights to any Native 7 Groundwater. Future use by the Stipulating Parties will not be adverse and will not ripen into a 8 prescriptiver right as between the Stipulating Parties. 9 10 C. Appropriative Rights Consistent with the specific provisions governing each Management Area, the Stipulating 11 Parties owning and exercising Appropriative Rights have the right to the reasonable and bene- 12 ficial use of Native Groundwater that is surplus to the reasonable and beneficial uses of the 13 Stipulating Parties that are Overlying Owners. New appropriative uses shall be subordinate to 14 existing appropriations and shall be prioritized on a first in time, first in right basis. 15 16 D. Developed Water Rights The Stipulating Parties owning Developed Water or New Developed Water have the right 17 to its reasonable and beneficial use, consistent with the specific provisions governing each 18 Management Area. The right to use. Developed Water is a right to use commingled Groundwater 19 and is not limited to the corpus oft that water. 20 21 E. Rights to Storage Space The Court shall reserve. jurisdiction over the use of the Storage Space, and any Party may 22 apply to the Court for the approval ofap project using Storage Space. The Court must approve any 23 project using Storage Space before any Party can claim a right to stored water from that project. 24 The Stipulating Parties agree that Groundwater derived from Developed Water is exempt from 25 the Court approval requirements oft this Paragraph. 26 27 F. Other Surface Water Rights Nothing in this Stipulation affects or otherwise alters common law riparian rights or any 28 surface water rights, unless expressly provided in this Stipulation. -7- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 IV. HYSICALSOLUTION - ALL MANAGEMENT AREAS 1 2 3 A. Authority Pursuant to Article X, section 2 of the California Constitution, the Stipulating Parties 4 agree that the Court has the authority to enter a judgment and physical solution containing the 5 terms and conditions of this Stipulation. Unless the Court imposes this physical solution, poten- 6 tial changes in water use could affect Basin adequacy and integrity. The Declaration of Rights is 7 ac component oft this physical solution. 8 9 B. Purposes and Objectives The terms and conditions of this Stipulation are intended to impose a physical solution 10 establishing a legal and practical means for ensuring the Basin's long-term sustainability. This 11 physical solution governs Groundwater, SWP Water and Storage Space, and is intended to ensure 12 that the Basin continues to be capable of supporting all existing and future reasonable and 13 beneficial uses. This physical solution is: 1)a fair and equitable basis for the allocation of water 14 rights in the Basin; 2) in furtherance of the mandates of the State Constitution and the water 15 policy of the State of California; and 3) a remedy that gives due consideration to applicable 16 common law rights and priorities to use Groundwater and Storage Space, without substantially 17 impairing any such right. 18 19 C. Basin Management Areas Development and use of Groundwater, SWP Water and Storage Space have historically 20 been financed and managed separately in three Management Areas. For example, only the 21 Northern Parties have paid for, managed, and benefited from the Lopez Project; whereas only 22 Santa Maria Valley parties have paid for, managed, and benefited from the Twitchell Project. In 23 contrast, the Nipomo Mesa parties have not been involved in the funding or management of either 24 the Twitchell or Lopez Projects. 25 The Stipulating Parties agree that Groundwater, SWP Water and Storage Space can be 26 more efficiently allocated and managed in three Management Areas, given the physical, geo- 27 graphical, political, economic, and historic conditions. The three Management Areas, as shown 28 on Exhibit "C," are as follows: Northern Cities Management Area; Nipomo Mesa Management -8- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 Area; and Santa Maria Valley Management Area. The Stipulating Parties intend that manage- 2 ment through three Management Areas will preserve the Basin'si integrity. 3 4 D. Groundwater Monitoring 1. Monitoring Program. A Monitoring Program shall be established in each 5 of the three Management Areas to collect and analyze data regarding water supply and demand 6 conditions. Data collection and monitoring shall be sufficient to determine land and water uses in 7 the Basin, sources of supply to meet those uses, groundwater conditions including groundwater 8 levels and quality, the amount and disposition of Developed Water supplies, and the amount and 9 disposition of any other sources of water supply in the Basin. The Northern Cities Management 10 Area shall not be required to include in its Monitoring Program or Annual Reports quantification 11 of groundwater recharge from the Lopez Project or storm water percolation ponds, unless the 12 Court orders inclusion ofthis information. 13 Within one. hundred and eighty days after entry ofjudgment, representatives of the Moni- 14 toring Parties from each Management Area will present to the Court for its approval their 15 proposed Monitoring Program. The Management Area Engineers shall freely share available well 16 data, groundwater models, and other products and tools utilized in monitoring and analysis of 17 conditions in the three Management Areas, consistent with the confidentiality provisions of this 18 Stipulation. 19 Absent a Court order to the contrary, all Stipulating Parties shall make available relevant 20 information regarding groundwater elevations and water quality data necessary to implement the 21 Monitoring Program approved for their respective Management Area. The Monitoring Parties 22 shall coordinate with the Stipulating Parties to obtain any needed data on reasonable terms and 23 conditions. Metering may only be imposed on Stipulating Parties upon a Court order following a 24 showing that such data is necessary to monitor groundwater conditions in the Basin, and in the 25 case of an Overlying Owner, that Overlying Owner has failed to provide information comparable 26 to that provided by other Overlying Owners. The confidentiality of well data from individual 27 owners and operators will be preserved, absent a Court order or written consent. 28 111 -9- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 2. Monitoring Parties. The Monitoring Parties are as follows: 2 4 5 6 (a) Santa Maria Valley Management Area - The Twitchell Manage- (b) Northern Cities Management Area - The Northern Cities. (c) Nipomo Mesa Management Area - The NMMA Technical Group. 3. Annual Reports. Within one hundred and twenty days after each Year, the 3 ment. Authority. 7 Management Area Engineers will file an Annual Report with the Court. The Annual Report will 8 summarize the results of the Monitoring Program, changes in groundwater supplies, and any 9 threats to Groundwater supplies. The Annual Report shall also include a tabulation of Manage- 10 ment Area water use, including Imported Water availability and use, Return Flow entitlement and 11 use, other Developed Water availability and use, and Groundwater use. Any Stipulating Party 12 may object to the Monitoring Program, the reported results, or the Annual Report by motion. 13 4. Management Area Engineer. The Monitoring Parties may hire individuals 14 or consulting firms to assist in the preparation of the Monitoring Programs and the Annual 15 Reports. Except as provided below for the Santa Maria Valley Management Area, the Moni- 16 toring Parties, in their sole discretion, shall select, retain and replace the Management Area 17 Engineer. 18 19 21 E. New Developed Water 1. 2. Stipulating Parties in each Management Area may prepare and implement The Stipulating Parties that pay, or otherwise provide consideration, for 20 plans to develop, salvage or import additional water supplies. 22 New Developed Water are entitled to use it to the extent the New Developed Water augments the 23 water supplies in that Management Area. If more than one Stipulating Party finances or partici- 24 pates in generating New Developed Water, rights to the supply of New Developed Water shall be 25 proportional to each Stipulating Party's financial contribution or other consideration, or as other- 26 wise mutually agreed to by the participating Stipulating Parties. This paragraph does not apply to 27 Return Flows. 28 111 -10- STIPULATION (06/30/05) SB3 375327 VI:006774.0076: 6/30/05 3. The Stipulating Parties who desire to claim New Developed Water supplies 2 must bring a motion, and obtain an order from the Court, quantifying and allocating the rights to 3 the New Developed Water, before they have the prior right to the New Developed Water. 4 5 F. Severe Water Shortage Response This physical solution sets forth a Severe Water Shortage Plan for each Management Area 6 which is intended to provide an effective response to Severe Water Shortage Conditions that may 7 develop within each or all of the Management Areas. The specific Severe Water Shortage Plans 8 for each Management Area are incorporated herein and made aj part ofthe physical solution. 9 V. 10 11 PHYSICALSOLUTION: PROVISIONS SPECIFICTOSANTA MARIA VALLEY As supplemented by the provisions oft this Stipulation that apply to all Management Areas, MANAGEMENT AREA 12 the following terms govern rights to Groundwater, SWP Water and Storage Space in the Santa 13 Maria Valley Management Area. 14 15 A. Water Rights to Sources of Supply 1. Overlying Rights. The Stipulating Parties who are Overlying Owners 16 within the Santa Maria Valley Management Area each have the prior and paramount right to use 17 Native Groundwater. Subject to Paragraph V(C)(2)(b)(VI), all Overlying Rights are appurtenant 18 tot the overlying land and cannot be assigned or conveyed separate or apart from those lands. 19 2. Appropriative Rights. The Parties listed in Exhibit "A" are the owners of 20 Appropriative Rights exercised in the Santa Maria Valley Management Area. Each Appropriative 21 Right is limited to Native Groundwater that is surplus to reasonable and beneficial uses of the 22 Stipulating Parties that are Overlying Owners in the Santa Maria Valley Management Area. New 23 appropriative uses shall be subordinate to existing Appropriative Rights and shall be prioritized 24 onai first in time, first in right basis. 25 3. Developed Water. The Stipulating Parties owning Developed Water have 26 the right to its reasonable and beneficial use, subject only to the Severe Water Shortage Plan. On 27 an annual basis, the Stipulating Parties shall have the right to the reasonable and beneficial use of 28 Developed Water that is surplus to the reasonable and beneficial uses of the owners of that 11- STIPULATION (06/30/05) SB3 375327v:0067740076: 6/30/05 1 Developed Water. The right to use Developed Water is a right to use commingled Groundwater 2 and is not limited to the corpus oft that water. 4 Water shall be subject to Court order. 3 5 6 (a) New Developed Water. The ownership and use ofNew Developed (b) Twitchell Water. (i) Amount. The Twitchell Project annually provides a variable 7 amount of Developed Water that augments the Groundwater in the Santa Maria Valley Manage- 8 ment Area. Twitchell Yield is thirty-two thousand acre-feet per year ("afy"). 9 (ii) Division of Twitchell Kield. Twitchell Yield shall be 10 divided as follows: 80% to Santa Maria, SCWC and Guadalupe, and 20% to the Overlying 11 Owners within the District who are Stipulating Parties. 12 a. The Twitchell Yield allocated to Santa Maria, 13 SCWC and Guadalupe is suballocated pursuant to the agreement among Santa Maria, SCWC and 14 Guadalupe, as attached and incorporated herein as Exhibit "F". 15 b. The Twitchell Yield allocated to the Overlying 16 Owners who are Stipulating Parties within the District shall be equally allocated to each acre of 17 land within the District owned by these Stipulating Parties. Concurrently with the execution of 18 this Stipulation, each of these Stipulating Parties shall report their acreage of overlying land 19 within the District on a parcel specific basis. Within one hundred and twenty days of the effec- 20 tive date of this Stipulation, the Management Area Engineer shall create a list of all the Stipu- 21 lating Parties and their respective allocation of the Twitchell Yield. 22 24 (iii) Recapture of Twitchell Kield. The right to use Twitchell (iv) Transfer of Twitchell Kield. Twitchell Yield may be trans- 23 Yield is ai right to use commingled Groundwater and is not limited to the corpus oft that water. 25 ferred, temporarily or permanently, only between Stipulating Parties and the transfer market shall 26 be as open and competitive as practical. A memorandum of agreement summarizing each transfer 27 shall be filed with the Court and provided to the TMA. Any such memorandum of agreement 28 shall state the Parties to the transfer, the amount ofTwitchell Yield transferred, the price per acre- -12- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 foot, and the Party responsible for the financial obligation associated with the Twitchell Yield. 2 4 5 (v) Carryover. Any portion ofTwitchell Yield that is not used 3 ina ag given Year shall not be carried over into the following Year. (c) State Water Project Water. (i) Import and Use of State Water Project Water. Santa Maria, 6 SCWC and Guadalupe all have SWP Contracts. Santa Maria will import and use within the Santa 7 Maria Valley Management Area not less than 10,000 acre-feet each Year of Available SWP 8 Water, or the full amount of Available SWP Water ift the amount physically available is less than 9 10,000 acre-feet in a given Year under Santa Maria's SWP Contract. Guadalupe will import and 10 use within the Santa Maria Valley Management Area a minimum of 75% of its Available SWP 11 Water. SCWC will import and use within the Basin all its Available SWP Water. Santa Maria, 12 SCWC and Guadalupe will not voluntarily relinquish or terminate their current SWP Contracts, 13 and shall seek renewal oft these SWP Contracts. 14 15 (ii) Return Flows. a. Fixed Amount. The Return Flows available to each 16 Importer is fixed based on a percentage of the annual amount of SWP Water the Importer uses 17 within the Basin. The fixed percentage for each importer is as follows: (a) Santa Maria 65%; (b) 18 SCWC 45%; and (c) Guadalupe 45%. The percentage provided to SCWC and Guadalupe shall 19 be adjusted through a Court order if: a) either entity increases its use of water imported into the 20 Basin, b) the applicable method of wastewater treatment and discharge to the Basin is altered, or 21 c) good cause is shown. 22 b. Recapture. The right to use Return Flows does not 23 attach to the corpus of SWP water deliveries or the treated SWP wastewater discharged into the 24 Basin but is a right to use the commingled Groundwater. The Importer's right to Return Flows is 25 assignable in whole or inj part, subject to necessary accounting. 26 C. Quantification ofReturn Flows. Return Flows equal 27 the total amount of SWP Water used by the Importer in the prior five Years, divided by five, and 28 then multiplied by the Importer's percentage as provided in Paragraph V(A)(3)(C)t)(a) above. -13- STIPULATION (06/30/05) SB3 375327 v1:006774 0076: 6/30/05 1 3 4 d. Carryover. Any portion of Return Flows that is not 2 used in a given Year shall not be carried overi into the following Year. B. Monitoring and Management 1. Status of Management Ared. Current Groundwater and SWP Water sup- 5 plies are sustaining existing water uses. Changes in land and water use and demographic con- 6 ditions can be expected to occur, possibly resulting in changes in water supply or demand 7 requirements. 8 2. Need for Monitoring. Monitoring and reporting of changes in land and 9 water use and demographic conditions are necessary to ensure that water supplies continue to be 10 sufficient to support water uses. 11 12 3. Monitoring Program. (a) Annual Report: Content and Processing. 13 The Annual Report shall include an analysis of the relationship between projected water demands 14 and projected water supplies. 15 17 (i) The Annual Report shall be prepared and signed by the (ii) Within forty-five days of submission, the TMA shall hold a 16 Management Area Engineer, and shall be simultaneously submitted to the Court and the TMA. 18 noticed public hearing to take comments on and consider for adoption the Annual Report. No 19 later than forty-five days from the date of the public hearing, the TMA shall submit to the Court 20 itsI recommendations regarding the Annual Report. 21 (iii) Within one hundred and twenty days of the date of the 22 submission of the Annual Report to the Court, it shall conduct a noticed hearing on the Annual 23 Report. Any Party may submit comments on the Annual Report. After the hearing, the Court 24 shall accept the. Annual Report or direct its modification. 25 26 (b) Management Area Engineer (i) Absent the unanimous consent of the TMA, the Manage- 27 ment Area Engineer shall not concurrently be employed by any Party holding rights to use 28 Groundwater in the Santa Maria Valley Management Area. -14- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 (ii) The Management Area Engineer shall initially be the engin- 2 eering firm of Luhdorff & Scalmanini. Luhdorff & Scalmanini shall be the Management Area 3 Engineer for a minimum of the shorter of five years from the date of this Stipulation or the date 4 upon which Mr. Joseph Scalmanini discontinues full time work for that firm. 5 7 (iii) The TMA shall employ the following process to replace the 6 Management Area Engineer: a. The TMA shall solicit candidates for Management 8 Area Engineer through a public process. All submissions and candidate materials shall be avail- 9 able to any Party upon request. The TMA shall conduct its interview through a public process to 10 the extent practical, and include District and Overlying Owner representatives in the candidate 11 review process. 12 b. Once a short list of candidates (less than five) for 13 Management Area Engineer is obtained, the TMA shall hold a noticed public hearing to take 14 comments on and consider the candidates for Management Area Engineer. The TMA shall make 15 are reasonable effort to select the Management Area Engineer with a unanimous vote. Ifthe TMA 16 unanimously endorses a candidate, that nominee shall be recommended to the Court. Otherwise, 17 the short list ofc candidates shall be submitted. 19 Engineer following ai noticed hearing. 18 20 C. The Court shall appoint the Management Area 4. Funding. The TMA shall pay for the Monitoring Program for the Santa 21 Maria Valley Management Area, which includes the cost of the Management Area Engineer and 22 the Annual Report. The cost of the Monitoring Program shall be divided among the Twitchell 23 Participants on the same basis as the allocation of their Twitchell Yield. 24 25 C. Response to Varying Conditions 1. Early Response to Avoid Severe Water Shortage Conditions. If the Man- 26 agement Area Engineer determines that projected demands are expected to materially exceed 27 projected water supplies, then the Management Area Engineer may recommend programs and 28 projects to augment the Management Area's water supplies. The Stipulating Parties will collabo- -15- STIPULATION (06/30/05) SB: 375327 V1:006774.0076: 6/30/05 1 rate on a response based upon current conditions, but absent Severe Water Shortage Conditions, 2 implementation of programs and projects will not be mandated. 3 The Stipulating Parties may voluntarily participate in any recommended program or 4 project, either through financial or other contributions. The Stipulating Parties that contribute to 5 such aj program or project shall have a priority to the water supplies generated by that program or 6 project with Court approval. The Stipulating Parties agree to aggressively pursue New 7 Developed Water sources, including necessary funding. 8 9 2. Severe Water Shortage Conditions and Response. (a) Determination. Severe Water Shortage Conditions shall be found 10 to exist when the Management Area Engineer, based on the results of the ongoing Monitoring 11 Program, finds the following: 1) groundwater levels in the Management Area are in a condition of 12 chronic decline over a period ofnot less than five Years; 2) the groundwater decline has not been 13 caused by drought; 3) there has been a material increase in Groundwater use during the five-Year 14 period; and 4) monitoring wells indicate that groundwater levels in the Santa Maria Valley 15 Management Area are below the lowest recorded levels. 16 17 (b) Response. (i) If the Management Area Engineer determines that Severe 18 Water Shortage Conditions exist within the Santa Maria Valley Management Area, the Manage- 19 ment Area Engineer shall file and serve, as part of its Annual Report, findings and recommen- 20 dations to alleviate such shortage conditions or the adverse effects caused by such water shortage. 22 noticed hearing regarding the existence and appropriate response to the Severe Water Shortage 23 Conditions. If, after that hearing, the Court finds that Severe Water Shortage Conditions exist in 24 the Santa Maria Valley Management Area, the Court shall first order all use of Groundwater to be 25 limited to: (a) for Guadalupe, Santa Maria and SCWC, their Developed Water; (b) entitled 26 Stipulating Parties to their New Developed Water; and (c) for the Overlying Owners, the Native 27 Groundwater plus any Developed Water to which individual Overlying Owners are entitled. 21 (ii) Upon the filing of the Annual Report, the Court shall hold a 28 111 16- STIPULATION (06/30/05) SB3 375327 v1:006774.0 0076: 6/30/05 1 (i) The Court may also order Stipulating Parties to address 2 specific adverse effects caused by the Severe Water Shortage Conditions. The responses may 3 include, but are not limited to: (a) measures recommended in the Annual Report and the related 4 Court proceedings; and (b) other measures intended to address localized problems in the Santa 5 Maria Valley Management Area directly related to the Severe Water Shortage Conditions. 6 (iv) The Court may adjust the Groundwater use limitations 7 imposed on any Stipulating Party(ies) who implement programs or projects providing additional 8 water supplies within the Santa Maria Valley Management Area. 9 (v) If the Court finds that Management Area conditions have 10 deteriorated since it first found Severe Water Shortage Conditions, the Court may impose further 11 limitations on Groundwater use. If the Court imposes further limitations on Groundwater use, a 12 Stipulating Party shall be exempt from those limitations to the extent: (a) the Stipulating Party can 13 demonstrate that it has already implemented limitations in its Groundwater use, equivalent to 14 those ordered by the Court; or (b) the Stipulating Party can demonstrate that further limitations 15 would not avoid or reduce the deteriorating conditions. 16 (vi) During Severe Water Shortage Conditions, the Stipulating 17 Parties may make agreements for temporary transfer of rights to pump Native Groundwater, 18 voluntary fallowing, or the implementation of extraordinary conservation measures. Transfers of 19 Native Groundwater must benefit the Management Area and be approved by the Court. 20 21 D. Management and Administration of the Twitchell Project 1. Operational Parameters. All Twitchell Project operations (operation and 22 maintenance and capital projects) will be performed consistent with the following parameters 23 (Operational Parameters): 24 (a) Maximize recharge of the Santa Maria Valley Management Area 25 from Twitchell Water, including without limitation, the avoidance of impacts on recharge 26 resulting from ongoing accumulation of silt to the maximum extent practical. 27 (b) Operate the Twitchell Project in accordance with the requirements 28 of applicable law including, without limitation, the requirements of the Bureau of Reclamation -17- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 and Army Corps of Engineers. 3 and best management practices. 2 4 5 (c) Operate the Twitchell Project in accordance with industry standards 2. Twitchell Project Manual. (a) The TMA will hire and pay for a professional engineering con- 6 sulting firm with expertise in dam and reservoir operations and maintenance, acceptable to the 7 District and the TMA, to develop an integrated operation and maintenance procedure manual 8 ("Twitchell Project Manual") and provide recommendations for capital and maintenance projects 9 that are consistent with the Operational Parameters. 11 regarding the content oft the Twitchell Project Manual. 13 District shall adopt a final Twitchell Project Manual. 10 12 14 (b) The District shall hold one or more public hearings to solicit input (c) Within eighteen months of entry of the judgment, the TMA and the (d) Any disagreement between the District and the TMA regarding the 15 content of the final Twitchell Project Manual shall be presented for Court review and determina- 16 tion pursuant to the judicial review provisions provided in this Stipulation. 17 (e) The District will exercise its discretionary authority to conduct all 18 its operation and maintenance activities for the Twitchell Project in accordance with the Twitchell 19 Project Manual. 20 21 3. Twitchell Project Funding. (a) District will maintain its current operation and maintenance (O&M) 22 assessments. These funds will be used for District staff salaries, property, equipment, rent, 23 expenses, and other day-to-day operations, and will be expended consistent with the Twitchell 24 Project Manual to the extent it is applicable. 25 (b) The TMA will separately fund, administer, construct and manage 26 any additional Twitchell Project expenses or projects, including Capital Improvement Projects 27 (see below) and O&M, (Extraordinary Project Operations) consistent with the Twitchell Project 28 Manual. The TMA and the District will make reasonable efforts to work cooperatively to imple- -18- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 ment Extraordinary Project Operations. 2 (c) Consistent with the provisions of this Paragraph V(D), the District 3 and the TMA shall be responsible for ensuring the ongoing operational integrity of the Twitchell 4 Project and the maintenance of the Twitchell Yield. The Stipulating Parties expect that this 5 ongoing responsibility may involve significant expenditures. Within 120 days of the effective 6 date of this Stipulation, and annually thereafter, the Twitchell Participants shall establish an 7 operating budget for the TMA to fund its responsibilities set forth in this Stipulation. For the first 8 five years following the PUC approval as provided below, the TMA's annual budget shall be 9 established at an amount between $500,000 to $700,000. Following the initial budgeting period, 10 the TMA shall set its budget in three- to five-year increments, as it deems necessary to meet its 11 obligations to preserve the Twitchell Yield. Any unused revenues shall be segregated into a 12 reserve account, for future funding needs of the Twitchell Project. The Stipulating Parties agree 13 to cooperate and coordinate their efforts to enable the TMA to fulfill its responsibilities as pro- 14 vided in this Stipulation. 15 16 4. Twitchell Management Authority. (a) The TMA shall be comprised of one representative of each of the 17 following parties: Santa Maria, Guadalupe, Southern California Water Company, the District, and 18 Overlying Landowners holding rights to Twitchell Yield. 19 (b) Only those parties holding an allocation ofTwitchell Yield shall be 20 voting members of the TMA. Voting shall be based on each party's proportionate allocation of 21 Twitchell Yield. 22 23 Operations. 24 (c) The TMA shall be responsible for all the Extraordinary Project (d) The TMA shall be responsible for developing proposals for Capital 25 Improvement Projects relating to the Twitchell Project. Capital Improvement Projects shall mean 26 projects involving the expenditure of funds for the improvement or enhancement ofthe Twitchell 27 Project, but shall not include normal operation, maintenance or repair activities. 28 111 - 19- STIPULATION (06/30/05) SB3 375327 v1:006774.0 0076: 6/30/05 1 (e) Upon the development of a proposal for a Capital Improvement 2 Project, the TMA shall, in cooperation with the District, hold one or more public hearings to 3 solicit input. 4 6 (f) Following the public hearing process, the TMA may vote on (g) The cost of TMA-sponsored Extraordinary Project Operations and 5 whether to implement the Capital Improvement Project. 7 Capital Improvement Projects shall be divided among Twitchell Participants on the same basis as 8 the allocation oft their Twitchell Yield. 9 (h) The District shall assume operation and maintenance responsibility 10 for any TMA sponsored Capital Improvement Project to the extent practical within the District's 11 day-to-day operations. 12 5. Regulatory Compliance. The TMA or the District shall provide advance 13 notice to the Court and all Parties of the initiation of any regulatory proceeding relating to the 14 Twitchell Project. 15 6. Existing Contracts. The Twitchell Reservoir Project will continue to be 16 governed by and subject to the terms and conditions of the December 1955 agreement between 17 the District and the Santa Barbara County Water Agency and nothing in this Stipulation is 18 intended to modify the rights or obligations provided in that agreement. To the extent that the 19 approval of Santa Barbara County Water Agency or the United States Bureau of Reclamation is 20 required in connection with the implementation oft this Stipulation, the Stipulating Parties agree to 21 work cooperatively to obtain such approval(s). 22 23 E. New Urban Uses - Santa Maria Valley Management Area 1. New Urban Uses shall obtain water service from the local public water 24 supplier. The local public water supplier shall provide water service on a reasonable and non- 25 discriminatory basis. 26 2. New municipal and industrial uses on land adjacent to or within one- 27 quarter mile of the boundary line depicted in Exhibit D shall comply with any applicable Cor- 28 porations Code provisions and negotiate in good faith to obtain water service from the local -20- STIPULATION (06/30/05) SB 375327 v1:006774. 0076: 6/30/05 1 public water supplier, before forming a mutual water company to provide water service. 2 3. No modification of land use authority. This Stipulation does not modify 3 the authority of the entity holding land use approval authority over the proposed New Urban 4 Uses. 5 4. New Urban Uses shall provide a source of supplemental water to offset the 6 water demand associated with that development. For the purposes of this section, supplemental 7 water shall include all sources of Developed Water, except: i) Twitchell Water, ii) storm water 8 percolation ponds existing as of the date of entry ofthe judgment, or iri) Overlying Owners' right 10 VI. PIYSICALSOLUTION: PROVISIONS SPECIFICTO NIPOMO MESA MAN- 9 to use of surplus Developed Water. AGEMENT. AREA 11 12 14 15 As supplemented by the provisions ofthis Stipulation that apply to all Management Areas, 13 the following terms shall apply to the Nipomo Mesa Management Area. A. Supplemental Water 1. MOU. NCSD has entered into a Memorandum of Understanding 16 ("MOU") with Santa Maria which contemplates the wholesale purchase and transmission from 17 Santa Maria to the NMMA of a certain amount of water each Year (the Nipomo Supplemental 18 Water"). All water delivered pursuant to the MOU for delivery by NCSD to its ratepayers shall 19 be applied within the NCSD or the NCSD's sphere of influence as it exists at the time of the 20 transmission of that water. 21 2. The NCSD agrees to purchase and transmit to the NMMA a minimum of 22 2,500 acre-feet of Nipomo Supplemental Water each Year. However, the NMMA Technical 23 Group may require NCSD in any given Year to purchase and transmit to the NMMA an amount 24 in excess of 2,500 acre-feet and up to the maximum amount of Nipomo Supplemental Water 25 which the NCSD is entitled to receive under the MOUifthe' Technical Group concludes that such 26 an amount is necessary to protect or sustain Groundwater supplies in the NMMA. The NMMA 27 Technical Group also may periodically reduce the required amount of Nipomo Supplemental 28 Water used in the NMMA sO long as it finds that groundwater supplies in the NMMA are not -21- STIPULATION (06/30/05) SB: 375327 v1:006774.0076: 6/30/05 1 endangered in any way or to any degree whatsoever by such ai reduction. 2 3. The Stipulating Parties agree to support (and, conversely, not to oppose in 3 any way or to encourage or assist any other Person or party in opposing or challenging) the imple- 4 mentation of the MOU, which includes environmental and regulatory permits and approvals, the 5 approval of a wholesale water supply agreement between Santa Maria and NCSD, and the 6 alignment and construction of a pipeline and related infrastructure necessary to deliver the 7 Nipomo Supplemental Water from Santa Maria to the NMMA ("Nipomo Supplemental Water 8 Project"). ConocoPhillips retains the right to object to or provide input on the alignment of any 9 pipelines associated with the Nipomo Supplemental Water Project if they might interfere with the 10 location of existing ConocoPhillips pipelines. The Stipulating Parties retain their rights to be 11 compensated for any interest or property acquired in implementing the Nipomo Supplemental 12 Water Project. 13 4. NCSD and Santa Maria shall employ their best efforts to timely implement 14 the Nipomo Supplemental Water Project, subject to their quasi-judicial obligations specified for 15 administrative actions and in the California Environmental Quality Act. 16 5. The enforcement of the provisions of Paragraph VI(D) below is condi- 17 tioned upon the full implementation of the Nipomo Supplemental Water Project, including the 18 Yearly use of at least 2,500 acre-feet ofNipomo Supplemental Water (subject to the provisions of 19 Paragraph VI(A)(2) above) within the NMMA. In the event that Potentially Severe Water 20 Shortage Conditions or Severe Water Shortage Conditions are triggered as referenced in Para- 21 graph VI(D) before Nipomo Supplemental Water is used in the NMMA, NCSD, SCWC, 22 Woodlands and RWC agree to develop a well management plan that is acceptable to the NMMA 23 Technical Group, and which may include such steps as imposing conservation measures, seeking 24 sources of supplemental water to serve new customers, and declaring or obtaining approval to 25 declare a moratorium on the granting of further intent to serve or will serve letters. In the event 26 that it becomes apparent that the Nipomo Supplemental Water will not be fully capable ofbeing 27 delivered, any Stipulating Party may apply to the Court, pursuant to a noticed motion, for appro- 28 priate modifications to this portion of the Stipulation and the judgment entered based upon the -22- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 terms and conditions of this Stipulation, including declaring this Paragraph VI to be null and void, 2 and ofno legal or binding effect. 3 6. Once the Nipomo Supplemental Water is capable of being delivered, those 4 certain Stipulating Parties listed below shall purchase the following portions of the Nipomo 5 Supplemental Water Yearly: 6 7 8 9 10 11 NCSD- -66.68% SCWC-8.33% RWC-8.33% Woodlands Mutual Water Company - 16.66% B. Rights to Use Groundwater 1. ConocoPhillips and its successors-in-interest shall have the right to the 12 reasonable and beneficial use of Groundwater on the property it owns as of the date of this Stipu- 13 lation located in the NMMA ("ConocoPhillips Property") without limitation, except in the event 14 the mandatory action trigger point (Severe Water Shortage conditions) described in Paragraph 15 VI(D) (2) below is reached. Further, any public water supplier which provides water service to 16 the ConocoPhillips Property may exercise that right subject to the limitation described in Para- 17 graph VI(D)(2). 18 2. Overlying Owners that are Stipulating Parties that own land located in the 19 NMMA as of the date of this Stipulation shall have the right to the reasonable and beneficial use 20 of Groundwater on their property within the NMMA without limitation, except in the event the 21 mandatory action trigger point (Severe Water Shortage Conditions) described in Paragraph 22 VI(D)(2) below is reached. 23 3. The Woodlands Mutual Water Company shall not be subject to restriction 24 ini its reasonable and beneficial use of Groundwater, provided it is concurrently using or has made 25 arrangements for other NMMA parties to use within the NMMA, the Nipomo Supplemental 26 Water allocated to the Woodlands in Paragraph VI(A)(5). Otherwise, the Woodlands Mutual 27 Water Company shall be subject to reductions equivalent to those imposed on NCSD, RWC and 28 SCWC, as provided in Paragraph VI(D)(1-2). -23- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 111 2 3 C. NMMA Technical Group 1. The NMMA Technical Group shall include representatives appointed by 4 NCSD, SCWC, ConocoPhillips, Woodlands Mutual Water Company and an agricultural Over- 5 lying Owner who is also a Stipulating Party. 6 2. The NMMA Technical Group shall develop a Monitoring Program for the 7 NMMA ("NMMA Monitoring Program"), which shall be consistent with the Monitoring 8 Program described in Paragraph IV(D). The NMMA Monitoring Program shall also include the 9 setting of well elevation and water quality criteria that trigger the responses set forth in Paragraph 10 D below. The Stipulating Parties shall provide monitoring and other production data to the 11 NMMA Technical Group at no charge, to the extent that such data has been generated and is 12 readily available. The NMMA Technical Group shall adopt rules and regulations concerning 13 measuring devices and production reports that are, to the extent feasible, consistent with the 14 Monitoring Programs for other Management Areas. Ift the NMMA Technical Group is unable to 15 agree on any aspect ofthel NMMA Monitoring Program, the matter may be resolved by the Court 16 pursuant to ai noticed motion. 17 3. The NMMA Technical Group meetings shall be open to any Stipulating 18 Party. NMMA Technical Group files and records shall be available to any Stipulating Party upon 19 written request. Notices of the NMMA Technical Group meetings, as well as all its final work 20 product (documents) shall be posted to groups.yahoo.com/group/NipomoCommunity, 21 4. The NMMA Technical Group functions shall be funded by contribution 22 levels to be negotiated by NCSD, SCWC, RWC, ConocoPhillips, and Woodlands Mutual Water 23 Company. In-lieu contributions through engineering services may be provided, subject to agree- 24 ment by those parties. The budget of the NMMA Technical Group shall not exceed $75,000 per 25 year without prior approval oft the Court pursuant to a noticed motion. 26 5. Any final NMMA Technical Group actions shall be subject to de novo 27 Court review by motion. 28 111 -24- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 111 2 3 4 D. Potentially Severe and Severe Water Shortage Conditions 1. Caution trigger point (Potentially Severe Water Shortage Conditions) (a) Characteristics. The NMMA Technical Group shall develop 5 criteria for declaring the existence of Potentially Severe Water Shortage Conditions. These 6 criteria shall be approved by the Court and entered as a modification to this Stipulation or the 7 judgment to be entered based upon this Stipulation. Such criteria shall be designed to reflect that 8 water levels beneath the NMMA as a whole are at a point at which voluntary conservation 9 measures, augmentation of supply, or other steps may be desirable or necessary to avoid further 10 declines in water levels. 11 (b) Responses. If the NMMA Technical Group determines that Poten- 12 tially Severe Water Shortage Conditions have been reached, the Stipulating Parties shall coordi- 13 nate their efforts to implement voluntary conservation measures, adopt programs to increase the 14 supply of Nipomo Supplemental Water if available, use within the NMMA other sources of 15 Developed Water or New Developed Water, or implement other measures to reduce Groundwater 16 use. 17 18 2. Mandatory action trigger point (Severe Water Shortage Conditions) (a) Characteristics. The NMMA Technical Group shall develop the 19 criteria for declaring that the lowest historic water levels beneath the NMMA as a whole have 20 been reached or that conditions constituting seawater intrusion have been reached. These criteria 21 shall be approved by the Court and entered as a modification to this Stipulation or the judgment to 22 be entered based upon this Stipulation. 23 (b) Responses. As a first response, subparagraphs (i) through (iii) shall 24 be imposed concurrently upon order of the Court. The Court may also order the Stipulating 25 Parties to implement all or some portion oft the additional responses provided in subparagraph (iv) 26 below. 27 (i) For Overlying Owners other than Woodlands Mutual Water 28 Company and ConocoPhillips, a reduction in the use of Groundwater to no more than 110% of -25- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 the highest pooled amount previously collectively used by those Stipulating Parties in a Year, 2 prorated for any partial Year in which implementation shall occur, unless one or more of those 3 Stipulating Parties agrees to forego production for consideration received. Such forbearance shall 4 cause an equivalent reduction ini the pooled allowance. The base Year from which the calculation 5 of any reduction is to be made may include any prior single Year up to the Year in which the 6 Nipomo Supplemental Water is transmitted. The method of reducing pooled production to 110% 7 is to be prescribed by the NMMA Technical Group and approved by the Court. The quantifica- 8 tion of the pooled amount pursuant to this subsection shall be determined at the time the manda- 9 tory action trigger point (Severe Water Shortage Conditions) described in Paragraph VI(D)(2) is 10 reached. The NMMA Technical Group shall determine a technically responsible and consistent 11 method to determine the pooled amount and any individual's contribution to the pooled amount. 12 If the NMMA Technical Group cannot agree upon a technically responsible and consistent 13 method to determine the pooled amount, the matter may be determined by the Court pursuant to a 14 noticed motion. 15 (ii) ConocoPhillips shall reduce its Yearly Groundwater use to 16 no more than 110% of the highest amount it previously used in a single Year, unless it agrees in 17 writing to use less Groundwater for consideration received. The base Year from which the calcu- 18 lation of any reduction is to be made may include any prior single Year up to the Year in which 19 the Nipomo Supplemental Water is transmitted. ConocoPhillips shall have discretion in deter- 20 mining how reduction ofits Groundwater use is achieved. 21 (iii) NCSD, RWC, SCWC, and Woodlands (if applicable as 22 provided in Paragraph VI(B)(3) above) shall implement those mandatory conservation measures 23 prescribed by the NMMA Technical Group and approved by the Court. 24 (iv) If the Court finds that Management Area conditions have 25 deteriorated since it first found Severe Water Shortage Conditions, the Court may impose further 26 mandatory limitations on Groundwater use by NCSD, SCWC, RWC and the Woodlands. Manda- 27 tory measures designed to reduce water consumption, such as water reductions, water restrictions, 28 and rate increases for the purveyors, shall be considered. -26- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 111 2 (v) During Severe Water Shortage Conditions, the Stipulating 3 Parties may make agreements for temporary transfer of rights to pump Native Groundwater, 4 voluntary fallowing, or the implementation of extraordinary conservation measures. Transfer of 5 Native Groundwater must benefit the Management Area and be approved by the Court. 6 7 E. New Urban Uses 1. Within the sphere of influence or service area. New Urban Uses shall 8 obtain water service from the local public water supplier. The local public water supplier shall 9 provide water service on ai reasonable and non-discriminatory basis. 10 2. Outside the sphere ofinfluence or service area. New municipal and indus- 11 trial uses on land adjacent to or within one quarter mile oft the boundary line depicted in Exhibit D 12 shall comply with any applicable Corporations Code provisions, including good faith negotiations 13 with the local water purveyor(s), prior to forming a mutual water company to provide water 14 service. 15 3. The ConocoPhillips property, owned as of the date of this Stipulation and 16 located within the NMMA, is not in the sphere ofi influence or service area, nor is it in the process 17 of being included in the sphere of influence, of a municipality or within the certificated service 18 area ofa a publiclyr regulated utility as ofthe date of this Stipulation, nor is it adjacent to or in close 19 proximity to the sphere ofi influence ofa municipality or the certificated service area ofa publicly 20 regulated utility as of the date of this Stipulation, as those terms are used in Paragraphs VI(E)(1 21 and 2). 22 24 4. 5. No modification ofland use authority. This Stipulation does not modify the New Urban Uses as provided in Paragraph VI(E)(1) above and new muni- 23 authority ofthe entity holding land use approval authority over the proposed New Urban Uses. 25 cipal and industrial uses as provided in Paragraph VI(E)(2) above shall provide a source of 26 supplemental water, or a water resource development fee, to offset the water demand associated 27 with that development. For the purposes of this Paragraph, supplemental water shall include all 28 sources ofDeveloped Water or New Developed Water. -27- STIPULATION (06/30/05) SB3 375327V/.0067740076 6/30/05 1 VII. PIMSICALSOLUTION: PROVISIONS SPECIFICTO NORTHERNCITES MANAGEMENT AREA 2 3 5 7 These terms, supplemented by the provisions of this Stipulation that apply to all 4 Management Areas, govern water rights and resources in the Northern Cities Management Area. 6 Management Area will be conducted by the Northern Cities in the manner described above. 1. 2. Groundwater Monitoring. Groundwater monitoring in the Northern Cities Lopez Project. The Lopez Project will continue to be managed by the SLO 8 District. The Northern Cities and Landowners will continue to bear costs of the Lopez Reservoir 9 and no costs ofthe Twitchell Reservoir. 10 11 3. Independent Management Per Settlement Agreement. (a) Existing Groundwater, SWP Water and Storage Space in the 12 Northern Cities Management Area will continue to be allocated and independently managed by 13 the Northern Parties in accordance with the Northern Cities and Northern Landowners' 2002 14 Settlement Agreement (Exhibit "E") for the purpose of preserving the long-term integrity of water 15 supplies in the Northern Cities Management Area. That Settlement Agreement initially allocates 16 57% of the safe yield of groundwater in Zone 3 to the farmers and 43% to the cities; and it 17 provides inter alia that any increase or decrease in the safe yield will be shared by the cities and 18 landowners on a pro rata basis. That Settlement Agreement is reaffirmed as part of this Stipula- 19 tion and its terms are incorporated into this Stipulation, except that the provisions regarding con- 20 tinuing jurisdiction (7 4), groundwater monitoring, reporting, and the Technical Oversight 21 Committee (111 7-20) are canceled and superseded by the provisions of this Stipulation dealing 22 with those issues. 23 25 27 (b) Without the written agreement of each of the Northern Cities, no 24 party other than Northern Parties shall have any right to: (i) pump, store, or use Groundwater or surface water within the (ii) limit or interfere with the pumping, storage, management or 26 Northern Cities Management Area; or 28 usage of Groundwater or surface water by the Northern Parties within the Northern Cities -28- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 Management Area. 2 (c) For drought protection, conservation, or other management pur- 3 poses, the Northern Parties may engage in contractual transfers, leases, licenses, or sales of any of 4 their water rights, including voluntary fallowing programs. However, no Groundwater produced 5 within the Northern Cities Management Area may be transported outside of the Northern Cities 6 Management Area without the written agreement ofe each oft the Northern Cities. 7 4. Current and future deliveries of water within the spheres ofinfluence of the 8 Northern Cities as they exist on January 1, 2005 shall be considered existing uses and within the 9 Northern Cities Management Area. 10 VIII. INJUNCTION - ALL MANAGEMENT AREAS 11 12 A. Use Only Pursuant to Stipulation Each and every Stipulating Party, their officers, agents, employees, successors and 13 assigns, are enjoined and restrained from exercising the rights and obligations provided through 14 this Stipulation in a manner inconsistent with the express provisions oft this Stipulation. 15 16 B. Injunction Against Transportation From the Basin Except upon further order of the Court, each and every Stipulating Party and its officers, 17 agents, employees, successors and assigns, is enjoined and restrained from transporting Ground- 18 water to areas outside the Basin, except for those uses in existence as of the date of this Stipula- 19 tion; provided, however, that Groundwater may be delivered for use outside the Basin as long as 20 the wastewater generated by that use of water is discharged within the Basin, or agricultural 21 return flows resulting from that use return to the Basin. 22 23 C. No' Third Party Beneficiaries This Stipulation is intended to benefit the Stipulating Parties and no other Parties. Onlya 24 Stipulating Party may enforce the terms of this Stipulation or assert a right to any benefits of, or 25 enforce any obligations contained in this Stipulation. 26 111 27 111 28 111 -29- STIPULATION (06/30/05) SB3 375327 v1:006774.0 0076: 6/30/05 1 IX. RESERVED JURISDICTION ALL] MANAGEMENT AREAS 2 3 A. Reserved Jurisdiction; Modifications, Cancellations, Amendments Jurisdiction, power and authority are retained by and reserved to the Court as set forth in 4 this Paragraph. Nothing in the Court's reserved jurisdiction shall authorize modification, cancel- 5 lation or amendment ofthe rights provided under Paragraphs III; V(A, E); VI(A, B,D);VII(2,3); 6 VIII(A); IX(A, C); and X(A, D) of this Stipulation. Subject to this limitation, the Court shall 7 make such further or supplemental orders as may be necessary or appropriate regarding the 8 following: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 111 28 111 1. 2. 3. 4. 5. 6. 7. enforcement oft this Stipulation; claims regarding waste/unreasonable use of water; interpretation and enforcement oft the judgment; disputes between Stipulating Parties across Management Areal boundaries; consider the content or implementation ofal Monitoring Program; consider the content, conclusions, or recommendations contained in an consider Twitchell Project operations, including, but not limited to: i) the content of the Twitchell Project Manual; ii) TMA or District compliance with the Twitchell Project Manual; iii) decisions to implement Extraor- dinary Project Operations; or iv) the maintenance ofTwitchell Yield; claims of localized physical interference between the Stipulating Parties in exercising their rights pursuant to this Stipulation; provided, however, rights to use Groundwater under this Stipulation shall have equal status; modify, clarify, amend or amplify the judgment and the Northern Parties Settlement Agreement; Provided, however, that all of the foregoing shall Annual Report; 8. and 9. be consistent with the spirit and intent ofthis Stipulation. -30- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 2 B. Noticed Motion Any party that seeks the Court's exercise of reserved jurisdiction shall file a noticed 3 motion with the Court. Any noticed motion shall be made pursuant to the Court's Order Con- 4 cerning Electronic Service of Pleadings and Electronic Posting of Discovery Documents dated 5 June 27,2000, attached and incorporated as Exhibit "G". Any request for judicial review shall be 6 filed within sixty days of the act or omission giving rise to the claim. Upon a showing of good 7 cause, the Court may extend the sixty-day time limitation. 8 9 C. Del Novo Nature of Proceeding The Court shall exercise de novo review in all proceedings. The actions or decisions of 10 any Party, the Monitoring Parties, the TMA, or the Management Area Engineer shall have no 11 heightened evidentiary weight in any proceedings before the Court. 12 13 D. Filing and Notice As long as the Court's electronic filing system remains available, all Court filings shall be 14 made pursuant to Exhibit "G". If the Court's electronic filing system is eliminated and not 15 replaced, the Stipulating Parties shall promptly establish a substitute electronic filing system and 16 abide by the same rules as contained in the Court's Order. 17 X. MISCELLANEOUS PROVISIONS - ALL MANAGEMENT AREAS 18 19 A. Unenforceable Terms The Stipulating Parties agree that if any provision of this Stipulation or the judgment 20 entered based on this Stipulation is held to be invalid, void, or unenforceable, the remaining pro- 21 visions shall nevertheless continue in full force and effect; provided, however, any order which 22 invalidates, voids, deems unenforceable, or materially alters those Paragraphs enumerated in 23 Paragraph IX(A) or any of them, shall render the entirety of the Stipulation and the judgment 24 entered based on this Stipulation voidable and unenforceable, as to any Stipulating Party who 25 files and serves a motion to be released from the Stipulation and the judgment based upon the 26 Stipulation within sixty days of entry of that order, and whose motion is granted upon a showing 27 of good cause. 28 111 -31- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05 1 2 B. Water Ouality Nothing in the Stipulation shall be interpreted as relieving any Stipulating Party of its 3 responsibilities to comply with state or federal laws for the protection of water quality or the 4 provisions of any permits, standards, requirements, or orders promulgated thereunder. 5 6 C. Duty to Cooperate The Stipulating Parties agree not to oppose, or in any way encourage or assist any other 7 party in opposing or challenging, any action, approval, or proceeding necessary to obtain 8 approval of or make effective this Stipulation or the judgment to be entered on terms consistent 9 with this Stipulation. 10 11 D. Stipulating Parties Under Public Utilities Commission Regulation 1. To the extent allowed by law, SCWC and RWC shall comply with this 12 Stipulation, prior to obtaining California Public Utilities Commission ("PUC") approval. If the 13 PUC fails to approve SCWC's and RWC's participation or fails to provide approval of the neces- 14 sary rate adjustments sO that SCWC and RWC may meet their respective financial obligations, 15 including the participation in Developed Water projects, Monitoring Programs, TMA and as 16 otherwise provided in this Stipulation, shall render the entirety of the Stipulation and those terms 17 of any judgment based on this Stipulation invalid, void and unenforceable, as to any Stipulating 18 Party who files and serves a notice ofr rescission within sixty days ofi notice by SCWC or RWCof 19 ai finall PUC Order. 20 2. Any Party, ori its successors or assigns, agreeing to become a new customer 21 of SCWC or RWC, or an existing customer proposing to increase its water use through a change 22 in land use requiring a discretionary land use permit or other form of land use entitlement, that 23 has not executed reservation contracts for supplemental water as specified in Exhibit F will 24 provide the following, once approved by the PUC: 25 (a) Ifi in the Santa Maria Valley Management Area, a water resource 26 development fee as specified in Exhibit F or a source of supplemental water sufficient to offset 27 the consumptive demand associated with the new use as provided in Paragraph V(E); or 28 111 -32- STIPULATION (06/30/05) SB3 375327v1:0067740 0076: 6/30/05 1 3 (b) Ifin the NMMA, a water resource development fee, or a source of 2 supplemental water sufficient to offset the consumptive demand associated with the new use. 3. Any Person who is not engaged in a New Urban Use and who agrees to 4 become a customer of SCWC or RWC shall retain its right to contest the applicable water 5 resource development fee, should that fee ever become applicable to that Person. 6 7 E. Designation of Address, for Notice and Service Each Stipulating Party shall designate the name, address and e-mail address, if any, to be 8 used for purposes of all subsequent notices and service, either by its endorsement on the Stipula- 9 tion for entry ofjudgment or by a separate designation to be filed within thirty days after execu- 10 tion of this Stipulation. This designation may be changed from time to time by filing a written 11 notice with the Court. Any Stipulating Party desiring to be relieved of receiving notices may file 12 a waiver of notice on a form approved by the Court. The Court shall maintain at all times a 13 current list of Parties to whom notices are to be sent and their addresses for purposes of service. 14 The Court shall also maintain a full current list of names, addresses, and e-mail addresses ofall 15 Parties or their successors, as filed herein. Copies of such lists shall be available to any Person. 16 If no designation is made, a Stipulating Party's designee shall be deemed to be, in order of 17 priority: i) the Party's attorney of record; i) if the Party does not have an attorney of record, the 18 Party itself at the address specified. 19 20 F. NoLoss of] Rights Nothing in this Stipulation shall be interpreted to require or encourage any Stipulating 21 Party to use more water in any Year than is actually required. As between the Stipulating Parties, 22 failure to use all oft the water to which a Stipulating Party is entitled hereunder shall not, no matter 23 how long continued, be deemed or constitute an abandonment or forfeiture of such Stipulating 24 Party's rights, in whole or in part. 25 26 G. Intervention After Judgment Any Person who is not a Party or successor to a Party, who proposes to use Groundwater 27 or Storage Space, may seek to become a Party to the judgment through a petition for intervention. 28 The Court will consider an order confirming intervention following thirty days notice to the -33- STIPULATION (06/30/05) SB: 375327 v1:006774. 0076: 6/30/05 1 Parties. Thereafter, if approved by the Court, such intervenor shall then be a Party bound by the 2 judgment as provided by the Court. 3 4 H. Stipulation and Judgment Binding on Successors, Assigns, etc. The Stipulating Parties agree that all property owned by them within the Basin is subject 5 to this Stipulation and the judgment to be entered based upon the terms and conditions of this 6 Stipulation. This Stipulation and the judgment will be binding upon and inure to the benefit of 7 each Stipulating Party and their respective heirs, executors, administrators, trustees, successors, 8 assigns, and agents. This Stipulation and the judgment to be entered based the terms and condi- 9 tions oft this Stipulation shall not bind the Stipulating Parties that cease to own property within the 10 Basin, or cease to use Groundwater. As soon as practical after the effective date of this Stipula- 11 tion, ai memorandum of agreement referencing this Stipulation shall be recorded in Santa Barbara 12 and San Luis Obispo Counties by Santa Maria, in cooperation with the Northern Cities and 13 SCWC. The document to be recorded shall be in the format provided in Exhibit "H". 14 15 17 18 I. Costs No Stipulating Party shall recover any costs or attorneys fees from another Stipulating 16 Party incurred prior to the entry ofajudgment based on this Stipulation. J. Non-Stipulating Parties Iti is anticipated that the Court will enter a single judgment governing the rights of all 19 Parties in this matter. The Stipulating Parties enter into this Stipulation with the expectation that 20 the Court will enter, as a part of the judgment, the terms and conditions of this Stipulation. This 21 Stipulation shall not compromise, in any way, the Court's legal and equitable powers to enter a 22 single judgment that includes provisions applicable to the non-Stipulating Parties that may 23 impose differing rights and obligations than those applicable to the Stipulating Parties. As against 24 non-Stipulating Parties, each Stipulating Party expressly reserves and does not waive its right to 25 appeal any prior or subsequent ruling or order of the Court, and assert any and all claims and 26 defenses, including prescriptive claims. The Stipulating Parties agree they will not voluntarily 27 enter into a further settlement or stipulation with non-Stipulating Parties that provides those non- 28 Stipulating Parties with terms and conditions more beneficial than those provided to similarly -34- STIPULATION (06/30/05) SB3 375327 v1:006774. 0076: 6/30/05 1 situated Stipulating Parties. 2 3 K. Counterparts This Stipulation may be signed in any number of counterparts, including counterparts by 4 facsimile signature, each of which shall be deemed an original, but all of which shall together 5 constitute one and the same instrument. The original signature pages shall be filed with Court. 6 7 L. Effective Date This Stipulation shall be effective when signed by the Stipulating Parties listed on Exhibit 8 "A"and accepted by the Court. 9 Party 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Signature, title, and date Parcels Subject to Stipulation Attorney of Record Approved as to form: By: Date: 35- STIPULATION (06/30/05) SB3 375327 v1:006774.0 0076; 6/30/05 PROOF OF SERVICE 2 4 5 6 7 8 Iam a resident oft the State of California, over the age of eighteen years, and not a party to the within action. My business address is HATCH & PARENT, 21 E. Carrillo Street, Santa Pursuant to the Court's Order dated June 28, 2000, I, Gina Lane, did the following: Posted the following document at approximately 4:30 p.m. on June 30, 2005. 3 Barbara, California 93101. STIPULATION (JUNE 30, 2005 VERSION) service) on the current website's service list. Mailed a Notice of Availability to all parties (designating or defaulting to mail Iam readily familiar with the firm's practice of collection and processing correspondence for 9 mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on motion 10 ofthe party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Ideclare under penalty of perjury under the laws of the State of California that the above 12 is true and correct. Executed on June 30, 2005, at Santa Barbara, California. 6 Line GINA: M. LANE -36- STIPULATION (06/30/05) SB3 375327 V1:006774.0076: 6/30/05