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17-185 San Jose Water Company, New Service to Existing Served Property Including, If Needed, Relocation of Existing Water Facilities (De Anze Blvd Medians - Phase I, Median Island Landscape, De Anza,.:Ill San Jose Water Company 1265 S. Bascom Ave . San Jose, CA 95128-3514 RECEIVED OCT O 4 2017 Writer's Direct Line: (408) 279-7887 Email : breanna.tollner@sjwater.com September 26 , 2017 PUBLIC WORKS DEPARTMENT John Raaymakers City of Cupertino 10300 Torre Ave Cupertino, CA 95014 REFERENCE: De Anza Boulevard Medians -Phase 1 Median Island Landscape De Anza Boulevard, Cupertino Dear Mr. Raaymakers: Enclosed , for your file , is the executed duplicate copy of the agreement with San Jose Water Company for the installation of water facilities to serve the above-referenced project. BKT:mmr FIP#l 7-149 Enc losure Water Services Representative AGREEMENT between City of Cupertino and San Jose Water Company SIO No . Lt2:Q Ot I Date Received [ tf -A(} -{ 7 '\ SAN JOSE W ATER COMPANY New Service to Existing Served Prop erty Including, If Needed, Relocation of Existing Water Facilities AGREEMENT THIS AGREEMENT, made and entered into this 2.-&, Cf-I.-_ day of .£·q terhb-e:k: , 20 17 , by and between the person or persons list+d in Paragraph 1 hereof, her inafter collectively referred to as "Applicant", and SAN JOSE WATER COMPANY, a corporation duly organized .and existing under and by virtue of the laws of the S~ate of California, hereinafter referred to as "Utility", WIT NE S SET H : WHEREAS, Applicant is the Owner of certain real property situated in th9 County of Santa Clara, State of California; and I WHEREAS, Utility is presently legally operating and maintaining certain water facilities owned by Utility in an area in said County of Santa Clara, as more particularly shown o~ that certain map attached her eto marked Exhibit "A" and by this reference made a part hereof, sal id facilities being hereinafter referred to as the "Old Facilities"; and I WH EREAS, Applicant has requested Utility to undertake certain construction work involving the relocat ing, removing or abandoning of the Old Facilities and/or the installation 01 certain new water facilities , hereinafter referred to as the "New Facilities", all as more particularly set forth on Exhibit "A" hereto; and / WHEREAS, such work is not covered by Utility's Rule 15 , a cop y o f which is attached hereto as Exhibit "B"; and . [ WHEREAS, Utility is willing to accomplish such work upon the New and p ld Facilities , said facilities being hereinafter sometimes referred to collectively as the "Total Facilities'i', provided that the actual total installed cost of the same shall be borne by Applicant as more particularl yf set fort h below; N O W, THEREFORE, for and in consideration of the mutual covenants , agr~ements , terms and provisions herein contained, it is agreed as follows: Form21 1. Applicant. The names and addresses of the person or persons, partnership or corporation herein collectively referred to as Applicant are as follows: Name: Address : City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 2. Applicable Form. This agreement is entered into pursuant to the requirements and in accordance with the form of agreement in effect and on file with the California Public Utilities Commission (Commission). This Agreement does not, therefore, require specific authorization of the Commission to carry out its terms and conditions. 3. Applicant's Deposit. T he estimated total installed cost of accomplishing work upon the Total Facilities, hereinafter referred to as the "Estimated Cost," is $10,908.00. Applicant has deposited with Utility an amount equal to the Estimated Cost, receipt of which is hereby acknowledged by Utility. The Estimated Cost shall include any income tax component authorized by the Commission at the date of execution of this agreement. 4. Installation of Facilities. Utility agrees that it will, as soon as necessary material and labor are available and necessary permits, licenses, other governmental authorizations, easements and rights of way in form satisfactory to Utility have been executed by Applicant and delivered to Utility, commence and prosecute to completion with all reasonable diligence the work upon the Total Facilities. Utility reserves the right to make such changes in design or materials as it may deem necessary. If such change results in a 10% or greater increase in the Estimated Cost, Utility shall give written notice to Applicant of the amount of such cos~ increase and will demand an additional deposit to cover the increased cost. If within ten (10) days of giving such notice of cost increase, Applicant gives Utility written notice to discontinue such work upon the Total Facilities or fails to provide the additional required deposit, Utility shall discont inue the same and shall forthwith refund to Applicant the unexpended portion, if any, of Applica,1t's deposit. If Applicant does not give Utility written notice to discontinue such work within ten (10) days after such notice of cost increase, Utility may proceed with such work at its option. Within sixty ( 60) days after Utility has ascertained its actual costs of installing the New Facilities, it will provide Applicant with a statement of the same showing in reasonable detail the costs incurred for material, labor and other direct and indirect costs, overheads and total costs, or unit costs or contract costs, whichever are appropriate. If such actual construction costs shall not have been determined within one hundred twenty (120) days after completion of construction work, a preliminary determination of actual costs shall be submitted, based upon the best available information at that time. Upon completion of the work upon the T otal Facilities, if the actual total installed cost thereof including applicable income taxes is greater or less than the total amount deposited by Applicant hereunder, the difference shall forthwith be paid by Applicant to Utility or refunded by Utility to Applicant as the case may be. It is expressly agreed that the:i;e shall be included in said actual total installed cost any sums paid for materials used in such work upon the Total Facilities by reason of price increases applicable to such materials. Subject to the provisions of this paragraph, no other refund will be made to Applicant for any sums deposited or to be deposited by Applicant with Utility hereunder except pursuant to the terms of Paragraph 5. 2 Form21 5. Grades . If at the Applicant's reque~t the New Facilities are installed in easements or rights of way where final grades have not been established or in streets whose grad les have not been brought to those established by public authority, Applicant, upon written notice by u d lity, shall deposit with Utility forthwith the estimated cost, including applicable income taxes, as determf ed by Utility, of relocating, raising or lowering the New Facilities upon establishment of final grades. Adjustment of any difference between the amount so deposited and the actual cost of relocating, raisini or lowering the New Facilities shall be made within thirty (30) days after Utility has ascertained such a<!:tual cost. Utility will refund the entire deposit including applicable income taxes relating to such pro~osed relocation, raising or lowering when appropriate authority determines that such displacements are j ot required. 6. Applicant's Agreements. Applicant agrees to use its best efforts to assist Utility to obtain any and all permits, franchises or other governmental authorizations which may be required for the work upon the Total Facilities or the subsequent operation and maintenance of the \same. Applicant further agrees to convey or cause to be conveyed to Utility any and all easements at d rights of way which may be later determined to be necessary or reasonably appropriate for the woli upon the Total Facilities or for the installation of the New Facilities or the subsequent operation and ~aintenance of the same. Applicant's agreement in this paragraph 6 is in no way limited to those easements and rights of I way provided for in paragraph 4 hereof. Applicant further agrees to permit the abandonment in place of the Old Facilities. 7. Ownership. The New Facilities to be installed hereunder and all co nltruction work in connection therewith as well as such of the Old Facilities as are not abandoned in pla9e by Utility shall be and remain at all times the property of Utility, and Applicant shall have no right, title or interest whatsoever in or to the same. I 8. Construction Delay. Utility . shall not be responsible for any dela~ in construction resulting from any cause beyond its control, including, but without limiting the generality of the foregoing, any delay resulting from inability to obtain sufficient proper materials anll supplies, labor disturbances or shortages, or weather conditions. In the event Utility is unable to I obtain sufficient materials to meet all construction requirements necessary to provide adequate service to all of its customers, it shall be entitled to allocate materials obtained by it to such construction [projects as in its sole discretion it deems most important to the service needs of its customers, and any delay in the work upon the Total Facilities resulting from any such allocation of materials by Utility shall\ be deemed to be a cause beyond its control and it shall not be responsible for such delay. 9. Notices. Any notice which may or shall be given by either party to the other shall be deemed to have been duly given when deposited in the United States mail, registered or certified, postage prep aid and addressed to the party to whom such notice is given at the following addresses: I Form21 To Applicant: City of Cupertino To Utility: 10300 Torre Avenue Cupertino, CA 95014 San Jose Water Company 110 W. Taylor Street San Jose, CA 95110 3 Either party, by notice, may ~hange the address to which notice shall thereafter be addressed. 10. Nature of Obligatio n of Applicant. If more than one person is named in paragraph I hereof, the obligations of the perso bs executing this agreement as Applicant shall be joint and several obligations. Until Applicant shall ~otify Utility in writing to the contrary, all refunds due under this agreement shall be paid by Utility to i City of Cupertino 10300 Torre Avenue Cupertino , CA 95014 without recourse. 11 . Successors and Assi ~ns. This agreement shall inure to the benefit of and shall bind the respective heirs, executors , administ~ators, successors and assigns of the parties hereto. 12. Utility's Right to Offset. In the event Applicant shall become entitled to a repayment or refund under the provisions of this ,4..greement, Utility shall have the right at such time to offset against the amount then due Applicant here\mder the total amount of any indebtedness then due or owing by Applicant to Utility . 13. Jurisdictio n of the Ti ublic Utilities Com m ission. This agreement shall at all times be subject to such changes or modificaf ons by the Public Utilities Commission of the State of California as said Commission may from time to t me direct in the exercise of its jurisdiction. IN WITNESS WHEREOF, ~e parties hereto have executed this agreement in duplicate the day and year first above written . APPLICANT By. -f .........__ t sz-::=;; , ·/-r ".'..<":":;; . . , ~r By: 4 Form21 cct.:.EL:.tAN 'R6 ::.:orcl!_._ ___ _ CCLELLAN ~D I ! . i e1 I i i. Cl ;;o b 1-------t-----~~ Created: Mon, Sep 11 , 2017 -----1 + ~ ~ -N- ~ -40' Install 1 -1" General Metered Service for street median irrigation > Ela} 1 8 8 -1 7 'ffl__ip f 21 D{CL I i ! I I i i i ! ! I i i i t BLoss r,.'VM: N I r· __ ...,_ __ ,__ ...... ------·+ r---t....--- I j 1 ;! § ~ ! i i i Note : De Anza Blvd -Street Median Irrigation ~il~ ,.-Q I PACIFICA DR + + I I I I. ~ e ~ ~ ~ I I Q (") i-----1.r ft m I I Scale 1":100' 250 ., _ ___J 40 250 p EXHIBIT"A'' A. General Provisions and Definitions 1. Applicability Rule No. 15 MAIN EXTENSIONS a. All extensions of distribution mains, from the utility's basic J roduction and transmission system or existing distribution system, to serve new customers, ~xcept for those specifically excluded below, shall be made under the provisions of this rule\ unless specific authority is first obtained from the Commission to deviate therefrom. A maim extension contract shall be executed by the utility and the applicant or applicants for the maid extension before the utility commences construction work on said extensions or, if cdnstructed by applicant or applicants, before the facilities comprising the main extension ar;[transferred to the utility. b. Extensions primarily for fire hydrant, private fire protection, re Jale, temporary, standby, or supplemental service shall not be made under this rule. \ . c. The utility may, but will not be required to, make extensions under this rule in easements or rights-of-way where final grades have not been established, or i here street grades have not been brought to those established by public authority. If extensions are made when grades have not been established and there is a reasonable probability thi t the existing grade will be changed, the utility shall require that the applicant or applicrulits for the main extension deposit, at the time of execution of the main extension agreemerit, the estimated net cost of relocating, raising or lowering facilities upon establishment of ~nal grades. Adjustment of any difference between the amount so deposited and the actual cost of relocating, raising or lowering facilities shall be made within ten days after the utility h as ascertained such actual cost. The net deposit representing actual cost is not subject to ~efund. The entire deposit related to the proposed relocation, raising or lowering shad be refunded when such displacements are determined by proper authority to be not requirJ d. 2. Limitation of Expansion a. Whenever the outstanding advance contract balances reach 4 1 0 percent of total capital ( defined, for the purpose of this rule, as proprietary capital, or ca~ital stock and surplus, plus debt and advances for construction) the utility shall so notify thJ Commission within thirty d~s. . I b. Whenever the outstanding advance contract balances plus the amvance on a proposed new extension would exceed 50 percent of total capital, as defined \in Section A.2.a. plus the advance on the proposed new extension, the utility shall not make the proposed new extension of distribution mains without authorization of the Comriiission. Such authorization may be granted by a letter from the Executive Director of the Corrimission. c. Whenever the outstanding advance contract balances reach the ab J ve level, the utility shall so notify the Commission within thirty days. I Rule 15-Revised Jan 09, 2004 EXH\B\T"B'9 A. General Provisions and Definitions ( continued) 3. Definitions a. A "bona-fide customer," for the purposes of this rule, shall be a customer (excluding any customer formerly served at the same location) who has given satisfactory evidence that service will be reasonably permanent to the property which has been improved with a building of a permanent nature, and to which service has commenced. The provision of service to a real estate developer or builder, during the construction or development period, shall not establish him as a bona-fide customer. b. A "real estate developer" or "builder," for the purposes of this rule, shall include any individual, association of individuals, partnership, or corporation that divides a parcel of land into two or more portions, o~ that engages in the construction and resale of individual structures on a continuing basis. c. The "adjusted construction cost," for the purposes of this rule, shall be reasonable and shall not exceed the costs recorded in conformity with generally accepted water utility accounting practices, and as specifically defined in the Uniform System of Accounts for Water Utilities prescrib ed by the Commission for installing facilities of adequate capacity for the service requested. If the utility, at its option, should install facilities with a larger capacity or resulting in a greater footage of extension than required for the service requested, the "adjusted construction cost/ for the purpose of this rule, shall be determined by the application of an adjustment factor to actual construction cost of facilities installed. This factor shall be the ratio . of estimated cost of required facilities to estimated cost of actual facilities installed. 4. Ownership, Design, and Construction of Facilities a. Any facilities installed hereunder shall be the sole property of the utility. In those instances in which title to certain portions of the installation, such as fire hydrants, will be held by a political subdivision, such facilities shall not be included as a part of the main extension under this rule, and will neither be owned by the utility nor subject to refund under the provisi'ons of Section C.2. of this rule. b. The size, type, quality of materials, and their location shall be specified by the utility; and the actual construction shall be done by the utility or by a constructing agency acceptable to it. c. Where the property of an applicant is located adjacent to a right-of-way, exceeding 70 feet in width, for a street, highway, or other public purpose, regardless of the width of the traveled way or pavement; or on a freeway, waterway, or railroad right-of-way, the utility may elect to install a main extension on the same side thereof as the property of the applicant, and the estimated, and the adjusted construction costs in such case shall be based upon such an extension. 2 A. General Provisions and Definitions ( continued) 4. Ownership, Design, and Construction of Facilities (continued) d. When an extension must comply with an ordinance, regulation, or specification of a public authority, the estimated and adjusted construction costs of said extension s11all be based upon the facilities required to comply therewith. e. If the following provisions for water conservation are included in local bui~ding codes and/or ordinances, the main extension contract shall contain these provisions. (1) All interior plumbing in new buildings shall meet the following requirements: (a) Toilets shall not use more than 3 Yz gallons per flush, except that ~oilets and urinals with flush valves may be installed. (b) Shower heads shall contain flow controls which restrict flow to a maximum of approximately 3 gallons per minute. ( c) Kitchen and lavatory faucets shall have flow controls which r estrict flow to a maximum of approximately 2 gallons per minute. (2) All new parks, median strips, landscaped public areas and landscaped Jareas surrounding condominiums, townhouses, apartments and industrial parks shall have a well-balanced automatic irrigation system designed by a landscape architect or other bompetent person, and shall be operated by electric time controller stations set for early morning irrigation. 5. Estimates, Plans, and Specifications I a. Upon request by a potential applicant for a main extension of 100 feet or less, the utility shall prepare, without charge, a preliminary sketch and rough estimates of the bost of installation to be advanced by said applicant. b. Any applicant for a main extension requesting the utility t o prepare detailed plans, specifications, and cost estimates shall be required to deposit with the utility an amount equal to the estimated cost of preparation of such material. The utility shall, l.\POn request, make available within 45 days after receipt of the deposit referred to above, such plans, specifications, and cost estimates of the proposed main extension. If the extension is to include oversizing of facilities to be done at the utility's expense, appropriate details shall be set forth in the plans, specifications, and cost estimates. c. In the event a main exte~sion contract with the utility is executed withi~l 180 days after the utility furnishes the detailed plans and specifications, the deposit shall b come a part of the advance, and shall be refunded in accordance with the terms of the main extension contract. If such contract is not so executed, the deposit to cover the cost of preparing plans, specifications, and cost estimates, shall be forfeited by the applicant for lthe main extension and the amount of the forfeited deposit shall be credited to the account or accounts to which the expense of preparing said material was charged. 3 A. General Provisions and Definitions ( continued) 5. Estimates, Plans, and Specifications ( continued) d. When detailed plans, specifications, and cost estimates are requested, the applicant for a main extension shall furnish a map to a suitable scale showing the street and lot layouts and, when requested by the utility, contours or other indication of the relative elevation of the various parts of the area to be developed. If changes are made subsequent to the presentation of this map by the applicant, and these changes require additional expense in revising plans, specifications, and cost estimates, this additional expense shall be borne by the applicant, not subject to refund, and the additional expense thus recovered shall be credited to the account or accounts to which the additional expense was charged. 6. Timing and Adjustment of Advances a. Unless the applicant for the main extension elects to arrange for the installation of the extension himself, as permitted by Section C. l .c., the full amount of the required advance or an acceptable surety bond must be provided to the utility at the time of execution of the main extension agreement. b. If the applicant for a main extension posts a surety bond in lieu of cash, such surety bond must be replaced with cash not less than ten calendar days before construction is to commence; provided, however, that if special facilities are required primarily for the service requested, the applicant for the extension may be required to deposit sufficient cash to cover the cost of such special facilities before they are ordered by the utility. c. An applicant for a main extension who advances funds shall be provided with a statement of actual construction cost and adjusted construction cost showing in reasonable detail the costs incurred for material, labor, any other direct and indirect costs, overheads, and total costs; or unit costs; or contract costs, whichever are appropriate. d. Said statement shall be submitted within sixty days after the actual construction costs of the installation have been ascertained by the utility. In the event that the actual construction costs for the entire installation shall not have been determined within 120 days after completion of construction work, a preliminary determination of actual and adjusted construction costs shall be submitted, based upon the best available information at that time. e. Any differences between the adjusted construction costs and the amount advanced shall be shown as a revision of the amount of advance and shall be payable within thirty days of date of submission of statement. 7. Assignment of Main Extension Contracts Any contract entered into under Sections B and C of this rule, or under similar provisions of former rules, may be assigned, after settlement of adjusted construction costs, after written notice to the utility by the holder of said contract as shown by the utility's records. Such assignment shall apply only to those refunds which become due more than thirty days after the date of receipt by the utility of the notice of assignment. The utility shall not be required to make any one refund payment under such contract to more than a single assignee. 4 A. General Provisions and Definitions ( continued) 8. Interpretations and Deviations I~ case of disagreement or di~pu!e regard_ing the application of any provisiof of this rule, or in c1rcumstances where the application of this rule appears unreasonable to either party, the utility, applicant or applicants may refer the matter to the Commission for determination. B. Extensions to Serve Individuals 1. Payment Extensions of water mains to serve new individual customers shall be paid fo t and contributed to the utility by the individual customer requesting the main extension. Calculation of payment shall be on the basis of a main not in excess of 6" in diameter, except whdre a larger main is required by the special needs of the new customer. The utility shall be respoh sible for installing and paying for service pipes, meter boxes, and meters to serve the new itl dividual customer; I provided, however, a Class C or Class D utility, or a Class A or Class r utility district or subsidiary serving 2,000 or fewer connections, may accept from individual customers amounts in contribution as a connection fee calculated pursuant to the Commission's C bnnection Fee Data Form contained in the utility's tariffs. 2. Refunds If subsequent applications for water service are connected directly to the main extension contributed by the original individual customer, such subsequent applicants shall pay to the ut ility an amount equal to the cost of 100 feet of the original extension. Sut h amounts shall be immediately refunded by the utility to the initial customer who origih ally paid for and I contributed the main extension to the utility. Total payments to the initial customer by subsequent applicants for water service who are connected directly to the / extension shall not exceed the original cost of the extension. No refunds shall be made after a period of ten years from completion of the main extension. C. Extensions to Serve Subdivisions, Tracts, Housing Projects, Industrial DeveloJ ments, Commercial Buildings, or Shopping Centers / 1. Advances a. Unless the procedure outlined in Section C. l .c. is followed, an applicant lfor a main extension to serve a new subdivision, tract, housing project, industrial devel©pment, commercial building, or shopping center shall be required to advance to the utility, ~efore construction is commenced, the estimated reasonable cost of the extension to be actually installed, from the nearest utility facility at least equal in size or capacity to the main requi~ed to serve both the new customers and a reasonable estimate of the potential customers y ho might be served directly from the main extension. The costs of the extension shall include necessary service stubs or service pipes, fittings, gates and housing therefore, and meter/ boxes, but shall not include meters. To this shall be added the cost of fire hydrants wlien requested by the applicant for the main extension or required by public authority, wheney er such hydrants are to become the property of the utility. 5 C. Extensions to Serve Subdivisions, Tracts, Housing Projects, Industrial Developments, Commercial Buildings, or Shopping Centers ( continued) 1. Advances ( continued) b. If special facilities consisting of items not covered by Section C. l .a. are required for the service requested and, when such facilities to be installed will supply both the main extension and other parts of the utility's system, at least 50 percent of the design capacity (in gallons, gpm, or other appropriate units) is required to supply the main extension, the cost of such special facilities may be included in the advance, subject to refund, as hereinafter provided, along with refunds of the advance of th~ cost of the extension facilities described in Section C. l .a. above. c. In lieu of providing the advances in accordance with Sections C. l .a. and C.1.b., the applicant for a main extension shall be permitted, if qualified in the judgment of the utility, to construct and install the facilities himself, or arrange for their installation pursuant to competitive bidding procedures initiated by him and limited to the qualified bidders. The cost, including the cost of inspection and supervision by the utility, shall be paid directly by applicant. The applicant shall provide the utility with a statement of actual construction cost in reasonable detail. The amount to be treated as an advance subject to refund shall be the lesser of (1) the actual cost, or (2) the price quoted in the utility's detailed cost estimate. The installation shall be in accordance with the plans and specifications submitted by the utility pursuant to Section A.5.b. d. If, in the opinion of the utility it appears that a proposed main extension will not, within a reasonable period, develop sufficient revenue to make the extension self-supporting, or if for some other reason it appears to the utility that a main extension contract would place an excessive burden on customers, the utility may require nonrefundable contributions of plant facilities from developers in lieu of a main extension contract. If an applicant for a main extension contract who is asked to contribute the facilities believes such request to be unreasonable, such applicant may refer the matter to the Commission for determination, as provided for in Section A.8. of this rule. 2. Refunds a. The amount advanced under Sections C.l.a., C.l.b., and C.l.c. shall be subject to refund by the utility, in cash, without interest, to the party or parties entitled thereto as set forth in the following two paragraphs. The total amount so refunded shall not exceed the total of the amount advanced and for a period not to exceed 40 years after the date of the contract. b. Payment of refunds shall be made not later than June 30 of each year, beginning the year following execution of contract, or not later than 6 months after the contract anniversary date if on an anniversary date basis. 6 C. Extensions to Serve Subdivisions, Tracts, Housing Projects, Industrial Developl ents, Commercial Buildings, or Shopping Centers ( continued) ' 2. Refunds ( continued) c. Whenever costs of main extensions and/or special facilities have been advanced pursuant to Section C.l.a., C.l.b., or C.l.c., the utility shall annually refund to the contract holders an amount equal to 2-1/2 percent of the advances until the principal amourits of the contracts have been fully repaid. I Whenever costs of special facilities have been advanced pursuant to Sectiof,s C. l .b. or C. l .c., the amount so advanced shall be divided by the number of lots ( or living units, whichever is greater) which the special facilities are designed to serve, to obtain an aJ erage advance per lot ( or living unit) for special facilities. When another builder applies for J main extension to serve any lots for which the special facilities are to be used, the new !applicant shall, in addition to the costs of his proposed main extension, also advance an r1,1ount for special facilities. This amount shall be the average advance per lot for special fa f ilities for each lot to be used less 2-1/2 percent of the average advance for each year in which! refunds have been due and payable on the original contract, prorated to June 30, or the contr~ct anniversary date on a monthly basis. The amount advanced to the utility by the new applicant shall be immediately refunded to the holder of the original contract, which included the cost of the special ! facilities, and the original contract advance will be reduced accordingly. The utility will thenceforth refund 2- . 1/2 percent annually on each of the contract amounts, as determined abo~e, to the holders of the contracts. Advances and refunds based on additional builder participation will 1 e determined in a similar manner. In no case shall the refund on any contract exceed the amount advanced. 3. Termination of Main Extension Contracts I a. Any contract whose refunds are based on a percentage of the amounJ advanced may be purchased by the utility and terminated provided that the terms are mutua!lly agreed to by the parties or their assignees and Section C.3.c. and Section C.3.d. are complied with. The maximum price that may be paid by the utility to terminate a contract s~all be calculated by multiplying the remaining unrefunded contract balance times the app~opriate termination factor set out below. No contract that has been in effect for less than 10 years shall be terminated without prior Commission approval. 7 C. Extensions to Serve Subdivisions, Tracts, Housing Projects, Industrial Developments, Commercial Buildings, or Shopping Centers ( continued) 3. Termination of Main Extension Contracts (continued) Termination Factors Years Remaining Factor Years Remaining Factor Years Years Remaining Factor Remaining Factor 1 2 3 4 5 6 7 8 9 10 .8929 11 .5398 21 .3601 31 .2608 .8450 12 .5162 22 .3475 32 .2535 .8006 13 .4941 23 .3356 33 .2465 .7593 14 .4734 24 .3243 34 .2399 .7210 15 .4541 25 .3137 35 .2336 .6852 16 .4359 26 .3037 36 .2276 .6520 17 .4188 27 .2942 37 .2218 .6210 18 .4028 28 .2851 38 .2136 .5920 19 .3877 29 .2766 39 .2111 .5650 20 .3729 30 .2685 40 .2061 b. Any contract with refunds based upon percentage of revenues and entered into under Section C. of the former rule, may be purchased by the utility and terminated, provided the payment is not in excess of the estimated revenue refund multiplied by the termination factor in the following table, the terms are otherwise mutually agreed to by the parties or their assignees and Section C.3.c. and Section C.3.d. herein are complied with. The estimated revenue refund is the amount that would otherwise be refunded, at the current level of refunds, over the remainder of the twenty-year contract period or shorter period that would be required to extinguish the total refund obligation. It shall be determined by multiplying 22 percent of the average annual revenue per service for the immediately preceding calendar year by the number of bona fide customers at the proposed termination date, times the number of years or fractions thereof to the end of the twenty-year contract period or shorter period that would be required to refund the remaining contract balance. Termination Factors Years Years Remaining Factor Remaining Factor 1 .8929 11 .5398 2 .8450 12 .5162 3 .8006 13 .4941 4 .7593 14 .4734 5 .7210 15 .4541 6 .6852 16 .4359 7 .6520 17 .4188 8 .6210 18 .4028 9 .5920 19 .3877 10 .5650 8 C. Extensions to .Serve Subdivisions, Tracts, Housing Projects, Industrial Develo~ments, Commercial Bui ldings, or Shopping Centers ( continued) ' 3. Termination of Main Extension Contracts (continued) c. The utility shall furnish promptly to the Commission the following information in writing and shall obtain prior authorization by a formal application under Sections 816-830 of the Public Utilities Code if payment is to be made other than in cash: / (1) A copy of the main extension contract, together with data adequately describing the development for which the advance was made and the total adjuJted construction cost of the extension. f (2) The balance unpaid on the contract and the calculation of the n1iaximum termination price, as above defined, as of the date of termination and the tehns under which the obligation was terminated. (3) The name of the holder of the contract when terminated. d. Discounts obtained by the utility from contracts terminated under t~e provisions of this section shall be accounted for by credits to Ac. 265, Contributions in Ai<i of Construction. D. Extension Designed to Include Fire Protection 1. The cost of distribution mains designed to meet the fire flow requiremeni s set forth in Section VIII.l(a) of General Order No. 103 is to be advanced by the applicant. The utility shall refund this advance as provided in Sections B.2. and C.2. of this rule. / 2. Should distribution mains be designed to meet fire flow requirements in exicess of those set forth in Section VIII.l(a) of General Order No. 103, the increase in cost of ~he distribution mains necessary to meet such higher fire flow requirements shall be paid to the u~ility as a contribution · in aid of construction. 3. The cost of facilities other than hydrants and distribution mains required to provide supply, pressure, or storage primarily for fire protection purposes, or portions of shch facilities allocated in proportion to the capacity designed for fire protection purposes, shall bd paid to the utility as a contribution in aid of construction. I E. Income Tax Component of Contributions and Advances Provision I 1. Contributions in Aid of Construction (CIAC) and Advances for Construction (AIC) shall include, but are not limited to, cash, services, facilities, labor, property, and Jincome taxes thereon provided by a person or agency to the utility. The value of all contributions and advances shall be based on the utility's estimates. Contributions and advances shall con ~ist of two components for the purpose of recording transactions as follows: a. Income Tax Component, and b. The balance of the contribution or advance. 9 .. E. Income Tax Component of Contributions and Advances Provision ( continued) 2. Starting from January 1, 1997, the Income Tax Component shall be calculated by multiplying the following tax factors times the taxable portion of the contribution or advance: For Service Connection Component: ForCIAC For AIC 31.90% 32.50% 3. The tax factors are established by using Method 5 as set forth in Decision No. 87-09-026 in I.86- 11-019. 4. The formula to compute Method 5 includes the following factors: a. Corporate tax rate of: b. Franchise tax rate of: c. A discount rate of: d. A pre-tax rate of return of: 35.12% 9.30% 9.28% 9.81% 5. The Income Tax Component factor has been derived from the federal and state corporate income tax rates and will remain in effect until changes to those fates would increase or decrease the gross-up rate by five percentage points or more as reflected in Ordering Paragraph No. 7 of I.86- 11-019/D.86-09-026. When and if that occurs, the utility will file an advice letter showing the new rates and cancel out this sheet. 6. In the event that the Utility collects a gross-up using an incremental tax rate that is more than its incremental tax rate as determined on a taxable year basis, without consideration of a tax credit or tax loss carry forward, the difference between what was and what should have been collected will b e refunded to the Applicant. 10