Res 2023-038/Approving agreement providing for the City to sell potable treated water on a wholesale basis to the county line special utility district.

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to SMTXU that is authorized by this Agreement, unless the reduction or cessation is the result of a circumstance under Section 4.02 below, or is based upon a default by SMTXU. Article 3. Term, Default and Termination Section 3.01. Term. The initial term of this Agreement is two years (the "Initial Term") commencing on July 1, 2023 (the "Effective Date"). This Agreement may be renewed or extended for additional renewal terms only with the mutual consent of the parties. This Agreement shall automatically terminate at the expiration of the Initial Term unless CLSUD provides written notice requesting a renewal or extension to SMTXU at least six (6) months before the expiration of the Initial Term, and SMTXU grants a renewal or extension following approval by the San Marcos City Council. Section 3.02. Default; Termination. The failure or refusal of a party to comply with any term, provision, or covenant of this Agreement will constitute a default by that party. This Agreement may be terminated by either party upon a default by the other party that is not cured in accordance with this Section. In the event of a default by a party, the other party will give the defaulting party written notice of default, and, if the defaulting party fails to cure or remedy the default within 30 days following receipt of notice, then the non -defaulting party shall have the unilateral right, but not the obligation, to terminate this Agreement immediately without further notice to the defaulting party. SMTXU may suspend the supply of Treated Water under this Agreement without terminating this Agreement if CLSUD fails to pay any amount billed by SMTXU under Section 2.02 of this Agreement, unless CLSUD has notified SMTXU in writing of a bona fide dispute concerning the bill prior to the deadline in SMTXU's billing notice. Article 4. Miscellaneous Provisions Section 4.01. Regulatory Compliance. The obligations of CLSUD and the SMTXU under this Agreement are subject to all applicable federal, state and local laws and regulations currently in effect and as amended or modified from time to time (the "Laws and Regulations"). SMTXU is responsible for compliance with the Laws and Regulations that apply to the SWTP and its facilities and portion of the water transmission line on its property, in its easements or within its territorial limits. CLSUD is responsible for compliance with the Laws and Regulations that apply to its facilities and portion of the water transmission line on its property, in its easements or within its territorial limits. Section 4.02. Force Majeure. If SMTXU should be prevented, wholly or in part, from transporting and delivering water to CLSUD under this Agreement by reason of an act of God, unavoidable accident, acts of the public enemy, strikes, floods, fires, governmental restraint, breaks in SMTXT's pipelines or storage facilities, damage to the SWTP or other treatment facilities or water distribution facilities, shortages in water supply to SMTXU, or reduction, interruption or loss of sources of water available to SMTXU relied upon to supply water under this Agreement, or for any other cause beyond SMTXU's reasonable control, then the obligation of SMTXU to deliver water to CLSUD shall be discontinued during the continuance of such force majeure and CLSUD's payment obligations shall be reduced proportionally to the reduction or discontinuance of delivered Treated Water. No damages shall be recoverable from SMTXU by 4 Version 2023.02.15