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<br />The City of San Marcos Facilities Service Contract <br /> <br />pursuant to subsection (A) of this Section, the City shall have the right to sever from the scope <br />of the Contract Services, and assume responsibility for itself providing, all Off-Site Residuals <br />Disposal Obligations. To exercise this option, the City shall deliver written notice thereof to the <br />Company. Upon any such election, the Service Fee shall be adjusted by subtracting the Off- <br />Site Residuals Disposal Element from the Fixed Component of the Base Fee for the remainder <br />of the Term of this Service Contract. The Company's reduced workscope and the City's <br />reduced Service Fee shall take effect 30 days following the date of such written notice. Any <br />such severance election shall have the effect of terminating the rights and obligations of the <br />parties under Sections 7.21 through 7.26 to the extent required to reflect such reduced <br />workscope, but not under any other provision of this Service Contract, which otherwise shall <br />remain in full force and effect. The obligations of the Company to perform the Residuals <br />Management Services shall remain in full force and effect except to the extent of the severance <br />effectuated by the operation of this subsection. <br />(D) Adiustment of Service Fee. Any payment or reimbursement of costs by, <br />or reduction of costs to, the City provided for in this Section shall be reflected in the <br />Extraordinary Items component of the Service Fee, and shall be payable or reimbursable on an <br />estimated monthly basis, subject to annual reconciliation and settlement as provided in <br />Section 11. 10. <br />(E) Applicable Law. Nothing herein shall relieve the Company of its <br />obligation to comply with Applicable Law with respect to its On-Site Residuals Handling <br />Obligations which remain the responsibility of the Company after any severance of Off-Site <br />Residuals Disposal Obligations made pursuant to this Section. <br />SECTION 7.26. CHANGES IN LAW AFFECTING OTHER CONTRACT <br />SERVICES. Nothing in this Section shall limit the Company's entitlement to relief upon the <br />occurrence of a Change in Law affecting any of the Contract Services other than the Facilities <br />Residuals Management Services, such as Change in Law affecting Effluent, odor or air <br />emissions from the Facilities. <br /> <br />56 <br />