Exhibit,Appendix: SAN DIEGO COUNTY WATER AUTHORITY VS. METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA et al

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                                Bingham McCutchen LLP
JAMES J. DRAGNA (SBN 91492)

COLIN C. WEST (SBN 184095) ELECTRONICALLY
THOMAS S. HIXSON (SBN 193033)
thomas. hixson@bingham.com F ILE D
Three Embarcadero Center Superior Court of California,
San Francisco, CA 94111-4067 County of San Francisco
Telephone: 415.393.2000 DEC 16 2013
Facsimile: 415.393.2286 Clerk of the Court
BY: JUDITH NUNEZ
Morrison & Foerster LLP Depuly Cle
SOMNATH RAJ CHATTERJEE (SBN 177019)
425 Market Street

San Francisco, CA 94105-2482
Telephone: 415.268.7000
Facsimile: 415.268.7522

MARCIA SCULLY (SBN 80648)

SYDNEY B. BENNION (SBN 106749)

HEATHER C. BEATTY (SBN 161907)

JOHN SCHLOTTERBECK (SBN 169263)

The Metropolitan Water District of Southern California
700 North Alameda Street

Los Angeles, CA 90012-2944

Telephone: 213.217.6000

Facsimile: 213.217.6980

Attorneys for Respondent and Defendant
Metropolitan Water District of Southern California EXEMPT FROM FILING FEES
[GOVERNMENT CODE § 6103]

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO
SAN DIEGO COUNTY WATER No. CPF-10-510830; No. CPF 12-512466
AUTHORITY,
a an EXHIBITS 1 - 5 TO RESPONDENT
Petitioner and Plaintiff, AND DEFENDANT METROPOLITAN
WATER DISTRICT OF SOUTHERN
v. CALIFORNIA’S REQUEST FOR
JUDICIAL NOTICE FOR PURPOSES
METROPOLITAN WATER DISTRICT OF OF THE FINAL HEARING

SOUTHERN CALIFORNIA; et al.,

Date: Di ber 17, 2013
Respondents and Defendants. Time: 10-00 am,

Dept. 304
Judge: Hon. Curtis E. A. Karnow

Actions Filed: June 11, 2010; June 8, 2012
Trial Date: December 17, 2013

EXHIBITS I -5 TO MWD’S REQUEST FOR JUDICIAL NOTICE
FOR PURPOSES OF THE FINAL HEARINGExhibit |THE METROPOLITAN WATER DISTRICT ACT

TABLE OF CONTENTS

Part 1 INTRODUCTORY PROVISIONS

Chapter i
Chapter 2
Chapter 3

Short Title
Definitions
General Provisions

Part 2 FORMATION

Chapter 1
Chapter 2
Chapter 3
Chapter 4

Territory and purposes
Ordinance of incorporation
Formation election
Establishment of district

Part 3 INTERNAL ORGANIZATION

Chapter 1
Chapter 2

Board of directors
Officers and employees

Part 4 POWERS AND PURPOSES

Chapter 1
Chapter Z
Chapter 2.5
Chapter 2.6
Chapter 3

Chapter 5

Part 5 BONDS AND OTHER EVIDENCES OF INDEBTEDNESS

Chapter 1

Powers generally

Water

Hydroelectric power

Electric power

Property

Contracts [Public Contracts C, 21566 et. seq.]
Controversies

Bonds requiring approval of voters

Article 1 Initiation of proceedings
Article 2 Bond Election
Article 3 Issuance and sale of bonds

Chapter 1.5

Substitute bondsChapter 1.6 Revenue bonds 235

Chapter 1.7 Electric revenue bonds 239.5
Chapter 2 Bonds for repair or replacement of damaged

or demolished works 240
Chapter3 Bonds primarily supported by annexation charges 250
Article 1 General procedure 250
Article Z Alternative procedure 260
Chapter4 Bond anticipation notes 285
Chapter5 Refunding of bonds 290
Chapter6 Bonds as legal investments 295

Chapter 6.5 Variable Rate Obligations 295.1
Chapter 7 Short-term revenue certificates 296
Part 6 TAXES 300
ChapterI General procedure 300
Article 1 Definitions 300
Article 2 Procedure 305
Chapter 2 Payment in lieu of taxes 331
Part 7 CHANGES IN ORGANIZATION 350
Chapter! | Amnexation of territory 350
Article 1 Annexation of public agencies 350
Article 2 Automatic annexation of territory in a city 360
Article 3 Annexation of territory with consent of the board 370
Article 4 Change in boundaries 380
Article 5 Conflict of city and agency annexations 396
Article 6 Modification of special tax levies 405
Chapter 2 Exclusion of territory , 450
Chapter3 Exchange of territory 455

Part 8 REPEAL 350Part 1. Introductory Provisions

CHAPTER 1
SHORT TITLE
Sec. 1. [Title]

This act shall be known and may be cited as the "Metropolitan Water District Act."

CASE NOTES
The Metropolitan Water District Act is a general law.
City of Pasadena v. Chamberlain, 204 Cal. 653, 658-659, 269 Pac. 636 (1928).

A tnetropalitan water district is ¢ quasi-municipal corporation and, not being an assessment district, it may
impose general taxes without opportunity for hearing as to benefits.

City of Pasadena v. Chamberlain, 204 Cal. 653, 661-664, 269 Pac. 630 (1928).

Metrapolitan Water District v.. Whitsett, 215 Cal. 400, 407, 10 P.2d 751 (1932).

The Board of Directors of the Metropolitan Water District, as the governing body of such district, may be
vested by the Legislature with the power to levy taxes, without infringing Section 13 of Article XI of the California
Constitution.

City of Pasadena v. Chamberlain, 204 Cal. 653, 664-666, 269 Pac. 630 (1928)

A metropolitan water district is a public instrumentality of legislative creation and is subject to complete
legislative regulation and control, limited only by constitutional restrictions.

Metropotiton Water District v. Whitsett, 215 Cal. 400, 407, 10 P.2d 751 (1932).

‘The Prevailing Wage Act applies te a metropolitan water district, but does not apply to a city operaling
under a freeholders’ charter, since the construction of public improvements and payment of wages thereon are
municipal affairs.

Metropolitan Water District v. Whitsett, 215 Cal. 400, 10 P.2d 751 (1932).

The appointive Board of Directors of the Metropolitan Water District may be vested with power to levy
general ad valorem taxes.

In re Metropolitan Water District, 215 Cal. $82, 586, 11 P.2d 1095 (1932),

A metropolitan water district is not an “other public agency" within subsection 6 of section 170 of the Code
of Civil Procedure, disqualifying local judges in actions brought by the entities therein named, but such metropolitanwater district is a quasi-municipal corporation within the exception of such general municipal eotporations from the
disqualifying provisions of said subsection.

Metropolitan Water District v. Supertor Court, 2.Cal.2d 4, 6-8, 37 P.2d 1044 (1934).

Acmetropolitan-water district is a municipal corperation within.the meaning of Section’ | of Article XM,
California Constitution.

Metropolitan Water District v. County.of Riverside, 21-Cal.20-G40, 134. P:2d 249-1943),

Property ofa metropolitan water disiriet located wutside’of its boundaries which property was subject to
taxation at the time it was acquired bry the district is taxable by the younty ino whith the-property.is situated,

Meirapotitan Water Districtv, County of Riverside, 21 Cal.2d 040, 134 P.2d 249 (19439.CHAPTER 2
DEFINITIONS
Sec. 2. [Definitions Govern]

Uniess the context otherwise requires, the definitions of this chapter govern the
construction of this act.

Sec. 3. [Metropolitan Water District or District]

“Metropolitan water district" or "district" means a Metropolitan water district
incorporated under this act.

Sec. 4. [Board or Board of Directors]

“Board” and “board of directors" mean the directors appointed pursuant to Chapter i
(commencing with Section 50) of Part 3 of this act.

Sec. 5. [Public Agency]

“Public agency" means any city, municipal water district, municipal utility district, public
utility district, county water district, and county water authority.

Sec. 6. [Municipal Water District]

“Municipal water district" means any municipal water district incorporated under the
Municipal Water District Act of 1911.

Sec. 7, [Municipal Utility District]

“Municipal utility district” means any municipal utility district incorporated under the
Municipal Utility District Act.

Sec. 8. [Public Utility District]

"Public utility district" means any public utility district incorporated under the Public
Utility District Act.

Sec. 9, [County Water District]

“County water district" means any county water district incorporated under the County
Water District Act.Sec. 10. [County Water Authority]

"County water authority" means any county water authority incorporated under the
County Water Authority Act.

See. 11. [City]

"City" means any city, and any city and county, of the State of California, whether
organized under a frecholder's charier or under the provisions of general laws.

Sec. 12. [Member Public Agency]

"Member public agency" means any public agency, the area of which, in whole or in part,
is included within a metropolitan water district as a separate unit.Sec. 13. [Chief Executive Officer]

“Chief executive.officer* means:ihe mayor of any city and the presiding officer of the
governing body of any other public agency.

Added by Stts..1969, ch, 441,
CASE NOTES:

A member of the city council of @.eonstitusnt city may be appointed director of the'metropolitan water
district, representing the area of that city, as the owa.offices are not incompatible,

Peuple.v. Carter, \2-Cat. App.td 105, 110, 54 P.2d 1139 (1936),

‘Therequirenient of a city charter that a city councilman shall devate his whole tite to the duties of his
affice does not disqualify him from accepting appointhent as director af the Metropolitan Water Distici,

Péople v. Carter, 12. Cal, App. 2a. 105, 111, 54 P.2d 1139.(1936).

‘The mayor of a constituent city may. be appointed hy the council.as director-trom that city for the:
Metropolitan Water District, especially where the city charter. does not definitely make the-mayor the:chief executive
officer, buit-implies-that the council jiself ts the chief executive officer,

Péople v, Carter, 12 Cal, App.2d 105, 108-109, $4°P.2d 1139 -(1996),CHAPTER 3
GENERAL PROVISIONS
Sec. 15. [Severability of Portions of Act]

if any provision of this act is for any reason held to be unconstitutional, such decision
shall not affect the validity of the remainder of this act. The Legislature hereby declares that it
would have passed this act, and each provision of this act, irrespective of the fact that any one or
more other provisions of this act be declared unconstitutional.

Sec. 16. [Continuation of Former Act]

The provisions of this act, insofar as they are substantially the same as the provisions of
the Metropolitan Water District Act (Chapter 429, Statutes of 1927), shall be construed as
restatements and continuations of said act and not as new enactments, it being the intention of the
Legislature, by this act, to repeal and reenact the provisions of said act without making any
substantive changes therein.

Sec. 17. [Effect on Public Agencies of Inclusion Within District]

The inclusion in a metropolitan water district of the corporate area, in whole or in part, of
any public agency shall not destroy the identity or legal existence or impair the powers of any
such public agency notwithstanding the identity of purpose, or substantial identity of purpose, of
such metropolitan water district.

Sec. 18. [Fiscal Year]

The fiscal year of any metropolitan water district shall commence on the first day of July
of cach year and shall continue until the close of the 30th day of June of the year following.

Sec. 19. [References Applicable to Amendments]

Whenever reference is made to any portion of this act or of any other law of this state, the
reference applies to all amendments and additions heretofore or hereafter made.

Sec. 26. (Section, Article, Chapter, Part]

"Section," “article,” “chapter,” or "part" means a section, article, chapter, or part of this
act, unless some other statute is specifically mentioned.

Sec. 21. (Offices Continued}All persons who, at the time this act goes into effect, hold office under. any-of the laws
that are repealed by this act, which offices-are-continued by this act, contitue te-hold the offices
accorditig to their fermer tenure:

Sec. 22. [Actions or Proceedings Affected by Act]
No.action or proceeding which is commenced before this actiakes effect, and no right

which ig accrued, is affected by any provision of this act, but all procedure thereafter taken: in
such action or proceeding shall cenforn to the provisions-of this act'so far as possible.Part 2, Formation

CHAPTER 1
TERRITORY AND PURPOSES
See. 25. [Purposes]

Metropolitan water districts may be organized for the pumpose of developing, storing, and
distributing water for domestic and municipal purposes and may provide, generate, and deliver
electric power within or without the state for the purpose of developing, storing, and distributing
water for such district,

Aimended by Stats. 1978, ch. S48
Sec. 26. [Boundaries and Incorporation]

Districts may be formed of the territory included within the corporate boundaries of any
two or mare public agencies, which need not be contiguous, and may be incorporated and

organized and thereafter governed, maintained and operated pursuant to this act. Each such
district when so incorporated shall be a separate and independent political corporate entity.Part 3. Internal Organization

CHAPTER |
BOARD OF DIRECTORS
See. 50. [Powers]

All powers, privileges and duties vested in or imposed upon any district shall be
exercised and performed by and through a board of directors.

Sec. 51. [Appointment of Directors ~ Indefinite Term]

The board shall consist of at least one representative from each member public agency.
The representatives shall serve without compensation from the district. They shall, at the option
of the agency, cither be designated and appointed by the chief executive officer of the member
public agency with the consent and approval. of the governing body of the agency or be selected
by a majority vote of the governing body of the agency.

Amended by Stats. 1985, ch. 1531.
CASE NOTES

A member of the city council of a constituent city may be appointed director of the Metropolitan Water
District, representing the area of that city, as the two offices are not incompatible.

People v. Carter (1936) 12 Cal.App.2d 105, 110, 54 P.2d 1139.

The requirement of a city charter that a city councilman shall devote his whole time to the duties of his
office does not disqualify him from accepting appointment as director of the Metropolitan Water District.

People v. Carter (1936) 12 Cal-App.2d 105, 111, 54 P.2d 1139.

The mayor of a constituent city may be appointed by the council as director from that city for the
Metropolitan Water District, especially where the city charter does not definitely make the oayor the chief executive
officer, but implies that the council itself is the chief executive officer,

People v, Carter (1936) 12 Cal. App.2d 105, 108-109, $4 P.2d 1139.
Sec. 52. (First of two; Operative until January 1,2001) [Additional Directors]

(a) In addition to one representative, any member public agency may designate and
appoint several representatives not exceeding one additional representative for each full 3 percent
of the assessed valuation of property taxable for district purposes within the entire district that is
within such member public agency, in which event all such representatives present at a meetingof the board of directors when a vote is taken shall cast, or may abstain from casting, an equal
share of the total vote to which such member public agency is entitled.

{b) This section shall remain in effect only until January 1, 2001, and as of that date is
repealed, unless a later enacted state, that is enacted before January 1, 2001, deletes or extends
that date.

Amended by Stats. 1972, ch. 80; Stats. 1998 ch 781, operative until January 1, 2001,

See. 52. (Second of two; Operative January 1, 2001) [Additional Directors]

(a) In addition to one representative, any member public agency may designate and
approve several representatives not exceeding one additional representative for each full 5
percent of the assessed valuation of property taxable for district purposes within the entire district
that is within such member agency, in which event all such representatives present at a meeting
of the board of directors when a vote is taken shall cast, or may abstain from casting, an equal
share of the total vote to which such member public agency is entitled.

(b) This section shall become operative on January 1, 2001.
Amended by Stats. 1998 ch. 781, operative January 1, 2001,
Sec. 53. [Incumbent not Deprived of Office]

No incumbent representative shall be deprived of his office by reason of an increase in
the amount of the assessed valuation required to authorize the designation and appointment of
additional representatives, nor by reason of any decrease in the assessed valuation of the member
public agency which he represents occutring alter his assumption of office.

Sec. 54. [Appointment of Directors — Specified Term]

in lieu of the appointment of members to the board pursuant to Sections 51 or 52 for an
indefinite term at the pleasure of the appointing power, a member public agency may, by
ordinance, provide that each represcntative of that member public agency shall serve for a term
of four years commencing on the first day of January of an odd-numbered year, and thereafter (1)
until the expiration of his term, or (2) until his successor has been appointed and qualified, in
accordance with the following provisions:

(a) The term of office of an incumbent representative of a member public agency with
only one representative on the board on the effective date of such ordinance shall expire on the
hext succeeding 31st day of December of an even-numbered year following such effective date,
or thereafter when his successor has been appointed and qualified.(b) The appointing power of a member public agency which has more than one
representative on the board shall designate the term of each such representative so that to the
extent possible the term of an equal number of directors will expire on the next succeeding 31st
day of December of an even-numbered year following the effective date of such ordinance and on
the 31st day of December of the next succeeding evennumbered year, or thereafier when their
successors have been appointed and qualified.

{c) A person appointed to fill a vacancy shall hold office for the unexpired term of his
predecessor.

{d) Any director so appointed for a specified term may be removed by the appointing
power for cause.

(¢) The repeal of such ordinance shall not affect the term of an incumbent representative
appointed pursuant to such ordinance.

Amended by Stats. 1973, ch, $62.
Sec. 55. [Voting by Beard]

Each member of the board shall be entitled to vote on all questions, orders, resolutions
and ordinances coming before the board, and shall be entitled to cast one vote for each ten
million dollars ($10,000,000), or major fractional part thereof, of assessed valuation of property
taxable for district purposes in the member public agency represented by him as shown by the
assessment records of the county and evidenced by the certificate of the county auditor. However,
each member of the board shall have at least one vote, but no member public agency shall have
votes exceeding in number the total number of votes of all other member public agencies. As
used in this section, "major fractional part" means a fractional part larger than one-half.

Sec. 56. [Appointment to Board of Member of Public Agency Governing Body]

Any member of a governing body of a member public agency may be appointed by that
agency to the board of a district to serve as the agency's representative, except that in the case of
agencies with several such representatives a majority of the members of the governing body of
that agency may not be so appointed by that agency to serve as representatives on the board of the
district. Any director holding such dual offices shall not vote upon any contract between a district
and the member public agency he or she represents on the district's board,

Added by Stats. 1969, ch. 441; amended by Stats. 1995, ch. 27.

Sec. 57. [Vote Required for Board Action]The affirmative votes of members representing more than 30 percent of the total number
of votes of all the members shall be necessary and, except as otherwise expressly provided, shall
be sufficient to carry any order, resolution or ordinance coming before the board.

Amended by Stats. 1969, ch. 441,

Sec. 58. [Adjournment of Meetings]

Any meeting of the board may be adjourned or recessed from day to day or from time to
time, by vote of the directors present, irrespective of the number of directors present or the
number of votes represented at such meeting.

Amended by Stats. 1969, ch. 441.

Sec. 59, [Organizational Meeting]

The first meeting of the board shall convene at the time and place fixed by the chief
executive officer of the public agency initiating the incorporation proceedings, and immediately
upon convening, the board shall elect from its membership a chairman, a vice chairman, anda
secretary, who shall serve for a period of two years, or until their respective successors are
elected.

Amended by Stats. 1969, ch. 441.

Sec, 60. [Recall of Directors]

Every member of the board of a district formed pursuant to this act shall be subject to
recall by the voters of the public agency from which such member is appointed in accordance
with the recall provisions applicable to such public agency.

Amended by Stats. 1969, ch. 441.

Sec. 61. [Ordinances:, Resolutions and Orders]

The board may make and pass ordinances, resolutions and orders necessary for the
government and management of the affairs of the district, for the execution of the powers vested
in the district and for carrying into effect the provisions of this act.

Amended by Stats, 1969, ch. 441,

Sec. 62, [Action by Ordinance]

Any action required by this act to be done by resolution may be done, with equal validity,
by ordinance.Amended by Stats. 1969, ch. 441.
See. 63. [Roll Call on Ordinances]

On all ordinances the roll shall be called and the ayes and noes recorded. Resolutions and
orders may be adopted by viva voice, but on demand of any member the roll shall be called.

Amended by Stats. 1969, ch. 441.
See. 64. [Ordinances; introduction; Adoption}

No ordinance shall be adopted unless it shall have been introduced on a day previous to
the time of such adoption or unless it is adopted by unanimous vote of all the members of the
board present and there are directors present from not less than three-fourths of all the member
public agencies who represent not less than three-fourths of the total vote of the board. In lieu of
such previous introduction or unanimous vote any ordinance may be mailed by registered mail,
postage prepaid, to cach member of the board at least five days prior to the day upon which such
ordinance shall be presented for adoption.

Amended by Stats. 1969, ch. 441,
Sec. 65. [Ordinances - Effective Date]

An ordinance adopted by the board shall take effect 30 days following its adoption,
except that an ordinance ordering or otherwise relating to an election or to the issuance or sale of
bonds or to the levying or collection of taxes or the fixing of water rates shall take effect upon its
adoption. An ordinance necessary for the immediate preservation or protection of the property,
interests or welfare of the district, which contains a specific statement showing its urgency, and is
passed by three-fourths of the total vote of the board shall also take effect upon its adoption.

Amended by Stats. 1969, ch, 441.
Sec. 66. [Ordinances -- Referendum]

All ordinances except those which take effect upon their adoption as provided in Section
65 shall be subject to referendum in the manner provided by law for the legislative acts of boards
of supervisors of counties.

Amended by Stats. 1969, ch. 441.

Sec. 67. [Delegation of Board Power}The exercise of any executive, administrative and ministerial powers may be delegated
and redelegated by the board to any of the offices created by this part or by the board.

Amended by Stats, 1969, ch. 441.
Sec. 68, [Meetings]

The board may fix the time and place or places at which its regular meetings shall be
held, and shall provide for the calling and holding of special meetings.

Amended by Stats, 1969, ch, 441,
Sec. 69. [Location of Offices}

The board may fix the location of the principal place of business of the district and the
location of all offices and departments maintained pursuant to this act.

Amended by Stats. 1969, ch. 441.
Sec. 70. [Business Administration}
The board may prescribe a system of business administration.
Amended by Stats. 1969, ch. 441,
Sec. 71. [Civil Service]
The board may prescribe a systern of civil service.
Amended by Stats. 1969, ch. 441.
Sec. 72. |[Audits, Claims]

The board may prescribe a method of auditing and allowing or rejecting claims and
demands.

Amended by Stats. 1969, ch, 441.
Sec. 73. [Delegation of Power to Employ]
The board may delegate to officers of the district the power to employ personnel.

Amended by Stats. 1969, ch. 441,Sec. 74, [Delegation of Power to Contract]

The board may delegate to officers of the district; under such conditions and restriétions
as shall be fixed by the board, the power to bind the district by contract.

Amended by Stats. 1969, ch. 441.
Sec. 75, (Providing for Administration of Affairs]

Ail matters and things necessary for the proper administration of the affairs of the district
which are not provided for in this act shall be provided for by the board.

Amended by Stats. 1969, ch. 441.
Sec. 76, [Retirement System]

The board may establish a retirement system for the officers and employees of the district
or may contract with the state pursuant to the Public Employees Retirement Law.

Added by Stats. 1969, ch. 441,
Sec. 77, (Change of Name]
The: board may by resolution change the namie of the district..A certified copy of the resolution
shall be recorded in the office of the recorder of every county wherein any portion of the area ‘of
the districtis located. and shall be filed with the Secretary of State and the county Clerk of every

such county.

Added by Stais, 1985, ch. 153.Part 4. Powers and Purposes

CHAPTER 1

POWERS GENERALLY

Sec. 120. (Express and Implied Powers]

A district may exercise the powers which are expressly granted by this act, together with
such powers as are reasonably implied from the act and necessary and proper to carry out the
objects and purposes of the district.

Sec. 121. [Perpetual Succession:, Seal]

A district may:

(a) Have perpetual succession

(b) Adopt a corporate seal and alter it at pleasure,

Sec, 122. [Contracts and Employment]
A district may:
(a) Enter into contracts, employ and retain personal services, and employ laborers.

(b) Create, establish, and maintain such offices and positions as shall be necessary and
convenient for the transaction of the business of the district.

(c) Elect, appoint and employ such officers, attorneys, agents and employees as shall be
found by the board to be necessary and convenient.

Sec, 123. [Borrowing, Limitation]

A district may borrow money and incur indebtedness and issue bonds or other evidence of
such indebtedness, except that no district shall incur indebtedness which, in the aggregate, shall
exceed 15 percent of the assessed valuation of all the taxable property included within the

district, as shown by the assessment records of the county or counties.

CASE NOTEA contract between the State and a metropolitan water district for a water supply from the State Water
Resources Development System was a coutract for the furnishing of continued water service in the future, payments
by the district being contingent upon performance of contractual duties by the State and aot incurred at the outset, so
the district did not incur an indebtedness in excess of that permitted by former Section 5(7) of the Metropolitan
Water District Act (now Sec, 123),

Metropolitan Water District v. Marquardt, 59 Cal.2d 159, 28 Cal. Rptr. 724 (1963).
Sec. 124, [Taxes, Levy and Limitation]

A district may levy and collect taxes on all property within the district for the purposes of
carrying on the operations and paying the obligations of the district, except that such taxes,
exclusive of any tax levied to meet the bonded indebtedness of such district and the interest
ihercon, exclusive of any tax levied to meet any obligation to the United States of America or to
any board, department or agency thereof, and exclusive of any tax levied to meet any obligation
to the state pursuant to Section 11652 of the Water Code, shall not exceed five cents ($0.05) en
each such one hundred dollars ($100) of assessed valuation. The term “tax levied to meet the
bonded indebtedness of such district and the interest thereon" as used in this section shall also
include, but shall not be limited to, any tax levied pursuant to Section 287 to pay the principal of,
or interest on, bond anticipation notes and any tax levied under the provisions of any resolution
or ordinance providing for the issuance of bonds of the district to pay, as the same shall become
due, the principal of any term bonds which under the provisions of such resolution or ordinance
are to be paid and retired by call or purchase before maturity with moneys set aside for that
purpose.

Amended by Stats. 1969, ch. 441,
CASE NOTE

An article in a conteact between the State and a metropolitan water district for a water supply from the State
Water Resources Development System which article is based upon Water Code Section 11652, requiring the district
to levy a tax to provide for all payments due under the contract, does not contravene former Section 5(8) of the
Metropolitan Water District Act, imposing a limit on taxation, as Section 11652 is a special provision relating only
to taxation to meet obligations from water contracts with state agencies, whereas said Section 5(8) is a general
provision relating to taxation by a district for all purposes and the special provision controls the general provision.

Metropolitan Water District v. Marquardt, 89 Cal.2d 159, 28 Cal. Rpte. 724 (1963)

Sec. 124.5. [Ad valorem Tax Limitation]

Subject only to the exception in this section and notwithstanding any other provision of
law, commencing with the 1990-91 fiscal year any ad valorem property tax levied by a district on
taxable property in the district, other than special taxes levied and collected pursuant to
annexation proceedings pursuant to Articles | (commencing with Section 350), 2 (commencing
with Section 360), 3 (commencing with Section 370), and 6 (commencing with Section 405) of
Chapter 1 of Part 7, shall not exceed the composite amount required to pay (1) the principal and
interest on general obligation bonded indebtedness of the district and (2) that portion of the
district's payment obligation under a water service contract with the state which is reasonablyallocable, as determined by the district, to the payment by the state of principal and interest on
bonds issued pursuant to the California Water Resources Development Bond Act as of the
effective date of this section and used to finance construction of facilities for the benefit of the
district. The restrictions contained in this section do not apply if the board of directors of the
district, following a hearing held to consider that issue, finds that a tax in excess of these
restrictions is essential to the fiscal integrity of the district, and written notice of the hearing is
filed with the offices of the Speaker of the Assembly and the President pro Tempore of the
Senate at east 10 days prior to that date of the hearing.

Added by Stats. 1984, ch. 271.
Sec. 125. [Investment of Surplus Money]

Investment of surplus moneys of a district is governed by Article 1 (commencing with
Section 53600) of Chapter 4, Part 1, Division 2, Title 5 of the Government Code.

Amended by Stats. 1969, ch. 441.
Sec. 125.5 Guidelines for intended use of unreserved fund balances.

On or before June 20, 2002, the board of directors of a district shall adopt a resolution
establishing guidelines for the intended use of unreserved fund balances. The guidelines shall
require that any disbursement of funds to member public agencies that represents a refund of
money paid for the purchases of water shall be distributed based upon cach member agency’s
purchase of water from the district during the previous fiscal year.

Added Stats. 2001 ch 632 §1 (SB350)
Sec. 126. [Dissemination of Information]

A district may disseminate information concerning the activities of the district, and
whenever it shall be found by two-thirds vote of the board to be necessary for the protection of
district rights and properties, the district may disseminate information concerning such rights and
properties, and concerning matters which, in the judgment of the board, may adversely affect
such rights and properties. Expenditures during any fiscal year for the purposes of this section
shall not exceed one-haif of one cent ($0.005) for each one hundred dollars ($100) of assessed
valuation of the district.

Sec, 126.5.[Proscription on Use of Public Money for Investigations Relating to Elected
Officials, Advocacy Groups, or Interested Persons: Right to Public Records}

(a) The Metropolitan Water District of Southern California and its member public
agencies may not expend any public money for contracting with any private entity or person to
undertake research or investigations with regard to the personal backgrounds or the statements ofeconomic interest of, or the campaign contributions made to, elected officials who vote on public
policies affecting the Metropolitan Water District of Southern California , or advocacy groups or
interested parties who may have matters pending before the board of the Metropolitan Water
District of Southern California or its member public agencies.

{b) Nothing in this section prevents any board member, officer, or employee of the
Metropolitan Water District of Southern California or of a member public agency of that district
from exercising the right to obtain public records pursuant to Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code,

Added by Stats. 1999, ch. 415

Sec. 126.7 [Establishment of Office of Ethics; Adoption of rules and penalties for
Violations]

(a) The Metropolitan Water District of Southern California shall establish and operate an
Office of Ethics and adopt rules relating to internal disclosure, lobbying, conflicts of interest,
contracts, campaign contributions, and ethics for application to its board members, officers, and
employees consistent with the intent and spirit of the laws and regulations of the Los Angeles
City Ethics Commission, the Fair Political Practices Commission, and the Los Angeles County
Metropolitan Transportation Authority.

(b) The rules described in subdivision (a) shall address, and seek to avoid potential
ethical abuses relating to, all of the following matters:

{1) The direct and indirect business relationships between board members,
contractors, and vendors, and between board members and officers or employees of member
public agencies.

(2) The solicitation of campaign contributions by board members, officers, or
employees and the receipt of contributions from bidders, contractors, or subcontractors.

(3) Public notice and approval procedures for contracts of fifty thousand dollars
($50,000) or more.

(ce) (1) The office shall operate as an independent entity that is not subject to political
influence and shall be staffed with professional, qualified persons.

(2) The office shall adopt the rules described in subdivision (a) for approval by
the board, educate the board, staff, contractors, and subcontractors concerning those rules, and
shall investigate complaints concerning the violation of those rules.

(3) The office shall adopt procedures for protecting the confidentiality of sources,
the job security of “whistie blowers,” and due process rights of the accused.({d) Subject fo paragraph (3) of subdivision (c), the office shall make available to the
public the results of the investigation that it undertakes.

(e) The office shall propose, and the board shall adopt, a schedule of penalties for
violations of the rules described in subdivision (a) by board members, officers, staff, or
contractors.

(f) For any association of individuals or entities that includes board members, officers, or
employees of the Metropolitan Water District of Southern California or of a member public
agency of that district that is known by a name other than the Metropolitan Water District of
Southern California or the name of a member public agency of the district, the rules of cthics
shall prohibit any association structure or identification that is likely to mislead the public as to
the association’s true identity, its source of funding, or its purpose.

(g) Nothing in this section prohibits the Metropolitan Water District of Southern
California, a member public agency of that district, or a board member, officer, or employee of
the Metropolitan Water District of Southern California or of a member public agency of the
district, from participating in, or, providing funding in a clearly identifiable way for, an
association formed for the purpose of undertaking legitimate activities, including, but not limited
to, advocating on behalf of that association before a local agency, the Legislature, or the United
States Congress.

Added by Stats. 1999, ch. 415

Sec. 127. (Operative until January 1, 2010) [Annual Report on Allegations ef lmpreper
Activities by District]

(a} Commencing on or before February 1, 2000, and each February | thereafter, the
Metropolitan Water District of Southem California shail submit to the Legislature a report that
includes a description of the complaints and other communications submitted to the district from
member public agencies that allege unethical, unauthorized, or illegal activities by the district
against amy member public agency or the public, in the previous calendar year.

(b) The Metropolitan Water District of Southern California shall include in the report a
description of the actions taken by the district in response to the complaints and litigation.

(c) This section shall remain in effect only until January 1, 2010, and as of that date is
repealed, unless a later enacted statute, that is enacted before January 1, 2010, deletes or extends
that date.

Added by Stats. 1999, ch. 524; amended by Stats. 2004, ch 155,CHAPTER 2
WATER
Sec. 130. [General Powers to Provide Water Services]
A district may do ail of the following:
(a) Acquire water and water rights within or without the state.
(b) Develop, store, and transport water.

(c) Provide, sell, and deliver water at wholesale for municipal and domestic uses and
purposes.

(d) Fix the rates for water, and the amount of any water standby or availability service
charge or assessment. Any such water standby or availability service charge or assessment shall
be deemed to be amounts paid by the member public agency to the district on tax assessments.

(c) Acquire, construct, operate, and maintain any and all works, facilities, improvements,
and property necessary or convenient to the exercise of the powers granted by this section.

Amended by Stats. 1984, ch. 271.
Sec. 130.5 [Legislative Findings and Declarations Relating to Conservation]
(a) The Legislature finds and declares all of the following:

(1) The Metropolitan Water District of Southern California reports that
conservation provides 7 percent of its “water resource mix” for 1998, and conservation is
projected to provide 13 percent of its total water resources by 2020. Conservation, water
recycling, and groundwater recovery, combined, provide 12 percent of the district’s total water
resources for 1998 and those water resources are projected to increase to 25 percent of the
district's total water resources by 2020.

(2) It is the intent of the Legislature that the Metropolitan Water District of
Southern California expand water conservation, water recycling, and groundwater recovery
efforts.

(b) The Metropolitan Water District of Southern California shall place increased
emphasis on sustainable, environmentally sound, and cost-effective water conservation,
recycling, and groundwater storage and replenishment measures.(c) The Metropolitan Water District of Southern California shall hold an annual public
hearing, which may be held during a regularly scheduled meeting of the Board of Directors of the
Metropolitan Water District of Southern California during which the district shall review its
urban water management plan, adopted pursuant to Part 2.6 (commencing with Section 10610) of
Division 6 of the Water Code, for adequacy in achieving an increased emphasis on cost-effective
conservation, recycling, and groundwater recharge in accordance with this section. The Board of
Directors of the Metropolitan Water District of Southern California may modify any ongoing
program as necessary to meet that requirement consistent with the district’s urban water
management pian.

{d) The disirict shall invite to the hearings knowledgeable persons from the fields of
water conservation and sustainability, and shall consider factors of availability, water quality,
regional self-sufficiency, benefits for species and environment, the totality of life-cycle costs,
including avoided costs, and short- and long-term employment and economic benefits.

{e} On or before February 1, 2001, and on or before cach February 1 thereafter, the
Metropolitan Water District of Southern California shall prepare and submit to the Legislature a
report on its progress in achieving the goals of increased emphasis on cost-effective conservation,
recycling, and groundwater recharge in accordance with this section, and any recommendations
for actions with regard to policy or budget matters to facilitate the achievement of those goals.

(® Nothing in this section shall diminish the authority of the Metropolitan Water District
of Southern California pursuant to Section 25 or any other provision of this act, or otherwise
affect the purposes of the Metropolitan Water District of Southern California as described in
existing law.

Added Stats. 1999, ch. 415.

Sec. 130.7 {Programs of Groundwater Recharge and Replenishment, Watershed
Management, Habitat Restoration, and Environmentally Compatible Community
Development]

{a} The Metropolitan Water District of Southern California in cooperation with the
following entities, shall participate in considering programs of groundwater recharge and
replenishment, watershed management, habitat restoration, and environmentally compatible
community development utilizing the resource potential of the Los Angeles River, the San
Gabriel River, or other southern California rivers, including siorm water runoff from these rivers:

(1) Member public agencies whose boundaries include any part of the Los
Angeles River, the San Gabriel River, or any other river in southern California.

(2) The Water Replenishment District of Southem California.

(3) Local public water purveyors and other appropriate groundwater entities.(4) The County of Los Angeles.
(5) The United States Army Corps of Engineers.

(b) Nothing in this section affects the powers and purposes of the Water Replenishment
District of Southern California or any other groundwater management entity, the County of Los
Angeles, local public water purveyors, or the United States Army Corps of Engineers.

Added Stats 1999, ch. 415.

Sec. 131. [Sales to United States, State of California and Private Corporations and Public
Agencies]

{a} A district may provide, sell, and deliver water and water service to the United States
of America or to any board, department or agency thereof or to the State of California for any use
or purpose pursuant to contract therefor.

The contract may be for permanent service, but shall provide for the furnishing of the
water or water service upon terms and conditions and at rates which will apportion an equitable
share of the capital cost and operating expense of the district's works to the contractee, Every
contract shall provide that at the end of five years from the date of its execution and every three
years thereafter there shall be such readjustment of the contract, upon the demand of either party
thereto, cither upward or downward as to rates, as the board of directors of the district may find
to be just and reasonable in order to effectuate the cquitable apportionment of the capital costs
and operating expense.

{b) A district may provide, sell, and deliver water and water service, by a contract not to
exceed 50 years, to any private corporation or public agency, or combination thereof, for use in
connection with, or ancillary to, the generation of electric power at plants which are located
outside of the district but which generate power the major portion of which is used directly, or
indirectly through exchange, within the district, or for pumping, producing, treating, or
reclaiming water for use within the district. The contracts shall not aggregate more than 100,000
acre-feet of water frorn the Colorado River and more than 60,000 acre-feet of water from the
State Water Resources Development System in any one year during that period. Every contract
shail provide that agricultural waste water, brackish ground water, or other water not suitable for
domestic, municipal, or agricultural purposes shall be utilized for powerplant cooling to the
extent practicable, and if not immediately available, the waste or brackish water, as it becomes
available and to the extent practicable, shall replace the fresh water then being used for that
purpose, The water and water service shall be furnished by the district at charges not less than
those corporations or agencies would pay in general taxes to the district, the substantial
equivalent of what those corporations or agencies would pay, directly or indirectly, as a result of
a service charge or assessment imposed by and within the district, and the water rate of the
district applicable to the classification of water delivered to those plants if the plants were locatedwithin the district, and in the case of a public agency within the district, if the plants were located
within that agency. No contract shall be entered into pursuant to this subdivision to provide, sell,
and deliver water and water service for use within the service area of any agency which has a
contract with the State of California for a water supply under the State Water Resources
Development System without the prior written consent of that agency and the Director of Water
Resources of the State of California.

(c) All water contracted for under this section shall be deemed not to be surplus water
available for sale pursuant to Section 132. For purposes of this section the term "public agency"
shall mean a county, city, district, local agency, public authority or public corporation.

Amended by Stats. 1974, ch. 929 and Stats, 1984, ch. 271.

Note: Stats. 1974, ch. 929 also provides: 2. It is the intent of the Legislature, recognizing the need to
maintain, preserve, conserve and otherwise continue in existence open space lands outside the boundaries of the
Metropolitan Water District of Southern Califomia for the production of food and fiber, that in the enactment of this
act, the district shal! not be empowered, in the exercise of the authority granted by this act, to modify, alter, or affect
any priority to water for agricultural purposes ouiside the district's boundaries, or cause an increase in the district's
entitlement to water in excess of that to which the district would be entitled in the absence of such authority.

It is also the intent of the Legistaturc that nothing in this act cither affects existing water rights in the state or
gives the Metropolitan Water District of Southern California any additional powers or duties other than the authority
to provide, by contract, water outside its boundaries for use in connection with the generation of electric power.

Sec. 132. [Sale of Surplus Water]

(a) A district may provide, sell and deliver surplus water not needed or required for
domestic or municipal uses within the district for beneficial purposes, but shall give preference to
uses within the district. The supplying of surplus water shall be subject to the paramount right of
the district to discontinue that supply in whole or in part, and to take and hold, or to provide, sell
and deliver, that water for domestic or municipal uses within the district, upon one year's written
notice to the purchaser or user of that surplus water. The notice shall be given by the board
whenever the board determines and declares, by resolution adopted by a two-thirds vote, that the
water is needed or required for domestic or municipal uses within the district.

(b) For the purposes of this act, any water purchased at the uniform rate or rates
established by the district for domestic or municipal uses and used for beneficial purposes with
that district shall be deemed to be water for domestic or municipal uses and not surplus water.

Amended by Stats. 1999, ch. 46
Sec. 133. [Fixing ef Water Rates]

The board shal! fix the rate or rates at which water shall be sold. Such rates, in the

discretion of the board, may differ with reference to different sources from which water shall be
obtained by the district, The board, under conditions and on terms found and determined by theboard to be equitable, may fix rates for the sale and delivery to member public agencies of water
obtained by the district from one source of supply in substitution for water obtained by the
district from another and different source of supply, and may charge for such substitute water at
the rate fixed for the water for which it is so substituted.

Sec. 134, [Adequacy of Water Rates; Uniformity of Rates]

The Board, so far as practicable, shall fix such rate or rates for water as will result in
revenue which, together with revenue from any water stand-by or availability service charge or
assessment, will pay the operating expenses of the district, provide for repairs and maintenance,
provide for payment of the purchase price or other charges for property or services or other rights
acquired by the district, and provide for the payment of the interest and principal of the bonded
debt subject to the applicable provisions of this act author