‘Term Sheet 1. Term: The term of the Agreement is 30 years from when the Reuse System Improvement Projects are complete and able to provide service. 2. Reuse System Improvements: a. Cape Coral Improvement: i. Construct a reclaimed water pressurized main across the Caloosahatchee River downstream of the new pump station (“Point of Connection”) with a maximum capacity of 12 million gallons per day (“MGD"). ii, Responsible for all operating and maintenance costs of its reclaimed water distribution system to the Point of Connection. b. Fort Myers Improvement: i, Upgrade the South AWWTP to produce, at a minimum, public access reclaimed water that meets the requirements of Chapters 62-610 and 62-600, F.A.C. ii. Construct a pump station and metering device (“Supply Meter”) with sufficient pressure to deliver water to Cape Coral’s Everest Water Reclamation Facility at 100 PSI with a maximum capacity of 12 MGD. iii, Responsible for all maintenance and repairs from its South AWWTP to the Point of Connection, including the Supply Meter. c, Completion Date: January 15,2023 or upon completion of the Parties’ Reuse System Improvements, whichever is earlier. d. Construction Status Reports: The Parties agree to provide 6-month status reports about their respective Reuse System Improvements. e. Failure to Timely Complete Reuse System Improvement: i, In the event a Party has not completed its Reuse System Improvements by the Completion Date, that Party shall be in breach. ii, Such Party is required to make monthly payments to the performing Party in the amount necessary to either: (@) service the performing Party's debt; or (b) to reimburse any cash-funded costs for their Reuse System Improvements. iii, These monthly payments shall be made until the non-performing Party completes its Reuse System Improvements or fully reimburses the performing Party for costs incurred. 3. Reclaimed Water Rate: a. $0.95 per thousand gallons (“Rate”) that Cape Coral uses for any other purpose than disposal and $0.00 for any reclaimed water that it disposes. b. The Rate may be increased by an annual rate index adjustment equal to seventy-five percent (75%) of the annual change in the “U.S. Bureau of Labor Statistics,Consumer Price Index-All Urban Consumers, U.S. City Average, Services,” as published in the month of April immediately preceding the October 1* adjustment date or three percent (3%), whichever is less. On or prior to July 1* of each year, FORT MYERS shall notify CAPE CORAL of any increase/decrease to the Rate. c. No earlier than 2027, if there are state or federal statutory or regulatory changes in water quality standards that impact the cost to Fort Myers of providing reclaimed water, and or to Cape Coral disposing of reclaimed water, the Parties shall jointly select and engage a qualified consultant to conduct a cost of service study to recalculate the Rate. i. The purpose of the recalculated Rate is to maintain an even benefit to both Parties of this Agreement. ii, Any change in the Rate shall take effect on October | of the same year. Reclaimed Water Quantities: a. Cape Coral shall accept a maximum of 12 MGD of reclaimed water from Fort Myers. b. Beginning on the Completion Date, Cape Coral agrees to purchase at the then-current Rate and accept, a minimum of 1,277,500,000 gallons (the equivalent of 6 MGD over a seven-month period) of reclaimed water from Fort Myers, regardless of whether Cape Coral uses or disposes of the water. c. Following conclusion of the 20" year of service, Fort Myers may reduce that amount to 1,064,583,333 gallons (the equivalent of $ MGD over a seven-month period) for the remaining 10 years. Reclaimed Water Quality: a, The Fort Myers reclaimed water will be the same quality as delivered to Fort Myers’ retail customers, and will meet all requirements under Part III of Chapter 62-610 and Chapter 62-600, F.A.C. b. In the event of any noncompliance with DEP requirements, Fort Myers will notify Cape Coral within 24 hours. ©. If deficient or substandard reclaimed water enters Cape Coral’s distribution system, Cape Coral will divert such water to its injection wells for up to 72 hours until such time as the interconnect pipeline is flushed and cleared for the renewed acceptance of compliant public access reclaimed water. Cape Coral will not be required to receive or accept noncompliant reclaimed water for more than 72 hours. 4. Cape Coral will provide notice to Fort Myers within 24 hours of discovery of substandard water quality, and Fort Myers will be responsible for correcting the cause, as well as for ensuring that all deficient or substandard reclaimed water is removed and flushed from Fort Myers’ reclaimed water system up to the Point of Connection.€. Cape Coral will not be liable to Fort Myers for any regulatory action, disposal costs, or other required mitigation actions resulting from Cape Coral not accepting reclaimed water during any time period when the interconnect is out of service due to quality issues extending beyond 72 hours. Payment of Invoices: a. Cape Coral shall pay its invoices within 30 days. b. Monthly fees shall not be charged to Cape Coral, but late payment fees shall be applied if payment is not made after 30 days of the invoice date per month, ¢. In the event of a payment dispute, Cape Coral shall pay the undisputed amount and Fort Myers will continue to provide reclaimed water to Cape Coral until such time as the dispute is resolved. Meters: a. Alll reclaimed water provided by Fort Myers shall flow through the Supply Meter at the Point of Connection. b. Cape Coral shall install a meter dedicated to measure Fort Myers’ flows to Cape Coral’s injection wells and meters at its wastewater treatment storage tanks and irrigation distribution system to measure reclaimed water received from Fort Myers that is being disposed of or used by Cape Coral. c. Each Party shall provide monthly meter readings of its meter(s) to the other Party. If there is more than a 10% differential between the meter readings, the City Managers or their designees shall meet to determine the cause. d. The Agreement provides for recalibration and testing provisions, and for reimbursements in the event that recalibration or testing reveals billing errors. Force Majeure/Interruption of Service: a. Fort Myers: i. Represents that it will have sufficient reclaimed water capacity to provide at least 6 MGD for the first 20 years and at least 5 MGD for the final 10 years to Cape Coral except for those events beyond Fort Myers’ control including mechanical failures, emergency repairs, and acts of God. fi, No liability to Cape Coral for any regulatory action, disposal costs, or other required mitigation actions resulting from the occurrence of events beyond Fort Myers’ control. iii, In the event of any service interruption, Fort Myers shall use best efforts to notify Cape Coral with 48 hours’ advance notice of service interruption in emergency situations and shall return to service as quickly as possible. b. Cape Coral:10. uM. 12. 13. i. Represents that it will have sufficient capacity to accept 12 MGD of reclaimed water except for those events beyond Cape Coral’s control including mechanical failures, emergency repairs, and acts of God. ii, No liability to Fort Myers for any regulatory action, disposal costs, or other required mitigation actions resulting from the occurrence of events beyond Cape Coral’s control. iii, In the event of any service interruption, Cape Coral shall use best efforts to notify Fort Myers with 48 hours’ advance notice of service interruption in emergency situations and shall retum to service as quickly as possible. Regulatory Changes that Impact Obligations: In the event additional regulatory requirements are imposed upon Fort Myers, Fort Myers shall immediately notify Cape Coral of the requirements and their effect on the provision of reclaimed water under the Agreement. In the event additional regulatory requirements alter Cape Coral’s ability to accept the reclaimed water, Cape Coral shall immediately notify Fort Myers of the requirements and their effect on the provision of reclaimed water under the Agreement. ‘Surface Water Discharges: a In conditions during which Fort Myers has flow at its South AWWTP above its rated capacity of 12 MGD, Cape Coral agrees to accept 12 MGD of reclaimed water from Fort Myers. In conditions in which Fort Myers flow is less than 12 MGD and would cause Cape Coral to utilize surface water discharge, Cape Coral will accept the amount of the flow from Fort Myers that would result in both entities utilizing surface water discharge. Surface Water Discharges Permits/Permit Cooperation: a ‘The Parties support respective DEP surface water discharge/NPDES permits as a secondary means of disposal for any water that cannot be stored, used, or disposed of by either Party during significant rain events. The Parties agree to cooperate and support each other in obtaining any necessary permits to effectuate the Agreement. ‘No Connection Fees: Cape Coral will not owe any impact fees or any other connection fees as a result of the Agreement. Total Maximum Daily Loads: Cape Coral will receive 20% of any TMDL credits that may be created due to Cape Coral accepting reclaimed water, rather than it being discharged into the Caloosahatchee River.14, Operational Protocol: The City Managers will adopt a written operational protocol that defines and outlines specified obligations under this Agreement. 15. Standard Terms: The Agreement contains standard indemnification, binding, assignment, relief, jurisdiction and venue, severability, waiver, and amendment provisions.