1998-141-RES WHEREAS, CITY COUNCIL DID HERETOFORE ONTHE 8TH DAY OF JUNE eretofore, on the 8th day of June,

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ARTICLE VI OPERATION AND MAINTENANCE Section 6.01. Operation and Maintenance. The City shall be solely responsible for operating and maintaining the Facilities in accordance with all Regulatory Requirements (cost initially paid by the City will be passed through the rate pursuant to Schedule 5). In addition, subject to Section 6.02, the City shall operate, maintain and repair the Facilities as necessary to permit the City to perform its obligations hereunder; including, without limitation, supplying up to eight (8) million gallons of Raw Water per day to the Supply Delivery Point. Section 6.02. Meters. (a) Inspections and Testing. (i) At least once every calendar quarter, at a time reasonably agreed to (in advance) by Panda, the City shall inspect and clean the Meters applicable to the Facilities and this Agreement, and shall test and verify their accuracy. The City shall notify Panda of the date and time of any inspection of such Meters at least seven (7) days in advance thereof. All inspections, cleanings, testing, repairing, replacing, adjusting or recalibrating of such Meters shall be done in a manner that is least disruptive to the operation of the Plant as reasonably practicable. Panda shall be entitled to be present at its own expense throughout any inspection, cleaning, testing, repairing, replacing, adjusting or recalibrating of such Meters. At all such inspections, such Meters shall immediately be repaired, replaced, adjusted or recalibrated as necessary to adjust such Meters into an accuracy of at least two percent (2%). Including as provided in paragraph (ii) below, the cost of the inspection, testing and, if applicable, the repair, replacement, adjustment or recalibration of such Meters hereunder shall be borne by the City and Panda on an equal basis. Any reasonable expense beyond normal inspection expenses shall be agreed to by the Parties before incurred. (ii) Panda may request that any or all of the Meters be inspected and tested in the event that Panda believes that such Meter(s) are inaccurate. The City shall use its commercially reasonable best efforts to schedule the inspection and test within seven (7) days after such request has been made, and the City shall promptly notify Panda of the date and time thereof. If any Meter being tested is found to have errors in excess of the permissible limit two percent (2%), such Meter shall immediately be repaired, replaced, adjusted or recalibrated as necessary to bring such Meter into an accuracy of at least two percent (2%). (b) Meter Readings. The City shall take monthly readings of the Meters on the fIrst business day of each calendar month. Panda shall be entitled to be present at its own expense at any such reading of the Meters. (c) Invoicing Corrections. In the event any inspection of Meters reflects an error greater than two percent (2%), Panda and the City shall reasonably determine the point in time the error developed and adjust applicable Invoices (hereinafter defmed) accordingly. If a point in time cannot be determined and a basis for adjustment is not agreed upon between the City and Panda within thirty (30) days of the inspection, adjustments to applicable Invoices (hereinafter defmed), shall be made on the basis that the error has applied to one-half (50%) of the time since the last determination of accuracy. Section 6.03. Coordination. The City shall use its best efforts to coordinate its maintenance program for the Facilities with the scheduled maintenance periods of Panda for the Plant so as to minimize any disruption to the operation of the Plant. The Parties agree to notify each other as promptly as practicable regarding their respective maintenance programs and schedules in order to facilitate this coordination. ARTICLE VII CHARGES AND INVOICING Section 7.01. Raw Water Charges. For the supply of Raw Water to the Supply Delivery Point, Panda will pay a Raw Water charge to the City for the actual Cost of Service to provide such Raw Water ("Cost of Service") where the Cost of Service would be computed as for any fIscal year of the City: .5- G:\A TTORNEY\Scott\Current Work\water agr. finaldoc5