California Code, Water Code - WAT § 13581

(a) If there is a failure to agree on terms and conditions of a recycled water supply agreement involving a retail water supplier that is a public agency within 180 days from the date of the receipt of a request for recycled water pursuant to subdivision (c) of Section 13580, a written statement pursuant to subdivision (c) of Section 13580.5, or a determination of availability pursuant to subdivision (d) of Section 13580.5, any party may request a formal mediation process.  The parties shall commence mediation within 60 days after the mediation request is made.  If the parties cannot agree on a mediator, the director shall appoint a mediator.  The mediator may recommend to the parties appropriate terms and conditions applicable to the service of recycled water.  The cost for the services of the mediator shall be divided equally among the parties to the mediation and shall not exceed twenty thousand dollars ($20,000).

(b) If the parties in mediation reach agreement, both parties together shall draft the contract for the recycled water service.  The parties shall sign the contract within 30 days.

(c) If the parties in mediation fail to reach agreement, the affected retail water supplier shall, within 30 days, by resolution or ordinance, adopt a rate for recycled water service.  The agency action shall be subject to validating proceedings pursuant to Chapter 9 (commencing with Section 860) of Part 2 of Title 10 of the Code of Civil Procedure, except that there shall not be a presumption in favor of the retail water supplier under the action taken to set the rate for recycled water service.  The mediator shall file a report with the superior court setting forth the recommendations provided to the parties regarding appropriate terms and conditions applicable to the service of recycled water.  Each party shall bear its own costs and attorney's fees.