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HomeMy WebLinkAboutResolution 2001-110 agreement for the storage of CAP waterMARANA RESOLUTION NO. 2001-110 A RESOLUTION OF THE MAYOR AND COUNC/L OF THE TOWN OF MARANA, ARIZONA, ACCEPTING AND AUTHORIZING THE APPROVAL OF AN AGREEMENT BETWEEN THE CENTRAL ARIZONA WATER CONSERVATION DISTRICT AND THE TOWN OF MARANA FOR STORAGE OF CENTRAL ARIZONA PROJECT WATER AT THE AVRA VALLEY RECHARGE PROJECT AND THE LOWER SANTA CRUZ REPLENISHMENT PROJECT. WHEREAS, the Town of Marana, in order to maintain its Designation of Assured Water Supply, is required by the Arizona Department of Water Resources (ADWR) to recharge or directly use renewable resource water to offset the groundwater pumped each year; and WHEREAS, the Central Arizona Water Conservation District (CAWCD) has constructed and is responsible for operating the Avra Valley Recharge Project (AVRP) and CAWCD is responsible for operating the Lower Santa Cruz Replenishment Project (LSCRP); and WHEREAS, the Arizona Department of Water Resources has issued CAWCD a full-scale underground storage facility permit for the AVRP and a constructed underground storage facility permit for the LSCRP; and WHEREAS, the Town of Marana desires to store Central Arizona Project (CAP) water at the AVRP and LSCRP, and CAWCD agrees to make available unused storage capacity at the AVRP and LSCRP for such storage; and WHEREAS, the Town of Marana shall obtain a water storage permit fi:om ADWR authorizing it to store water at the AVRP and LSCRP; and WHEREAS, the estimated rate for water storage at the AVRP for 2001 is $21.30 per acre- foot and the estimated rate for water storage at the LSCRP for 2001 is $13.10 per acre-foot; and WHEREAS, the Mayor and Council find that it is in the best interest of the Town to enter into the Agreement with CAWCD for storage of water at the AVRP and LSCRP. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Marana, Arizona, accepting and authorizing the approval of the Agreement between the Town of Marana and the Central Arizona Water Conservation District providing for the storage of Central Arizona Project water at the Avra Valley Recharge Project and the Lower Santa Cruz Replenishment Project. Marana, Arizona Resolution No. 2001-110 Page I of 2 PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 18th day of September, 2001. ATTEST: ~-//Jo~c~/yn C. Entz C/ Town Clerk APPROVED AS TO FORM: As Town Attorney and not personally ~SUTTON, JR. Marana, Arizona Resolution No. 2001-110 Page 2 of 2 F. ANN RODRIG~ RECORDER FECORDED BY: V. DEPUTY RECORDER 7995 ROOE DO~T: 11657 PA . 2139 NO. OF PAGES: 13 SEQUENCE: 20012020817 10/18/2001 AG 16:13 SMARA TOWN OF MARANA ATTN: TOWN CLERK 13251 N LON ADAMS RD MARANA AZ 85653 MAIL AMOUNT PAID $ 12.00 AGREEMENT FOR STORAGE OF WATER AT THE A VRA VALLEY RECHARGE PROJECT 1. PARTIES: This Agreement is made and entered into the '-/Y11 day of ((J~ 2001, by and between the CENTRAL ARIZONA WATER CONSERVATION DISTRICT, hereinafter referred to as "CAWCD", and the TOWN OF MARANA, hereinafter referred to as the "Marana". 2. RECITALS: 2.1 CAWCD has constructed and is responsible for operating the Avra Valley Recharge Project ("AVRP"), which is located approximately one mile west of the CAP canal, near the Avra Valley Airport and the Santa Cruz River. 2.2 The Arizona Department of Water Resources has issued CAWCD a full-scale underground storage facility permit for the AVRP. The Permit authorizes the underground storage of 11,000 acre-feet of water annually at the AVRP. 2.6 Marana desires to store CAP water at the AVRP and CAWCD agrees to make available unused storage capacity at the A VRP for such storage, in accordance with the provisions of this Agreement. NOW, THEREFORE, in consideration of the foregoing, the payments to be paid by Marana, and the covenants and agreements contained in this Agreement, and other good and valuable consideration, CAWCD and Marana agree as follows: DEFINITIONS: 3.1 AVRP TURNOUT: The point on the BKW Water Delivery System at which CAP water is diverted from the BKW Water Delivery System into the AVRP. "-' 5 - ~ .r , ... 3. '.... .... 3.2 CENTRAL ARIZONA PROJECT (CAP): The water delivery works of the CAP including, but not limited to, the CAP canal, its turnout structures and associated measuring devices. 3.3 BKW WATER DELIVERY SYSTEM: The canal system, including pump stations, gates and measuring devices, owned by BKW Farms, Inc., which diverts water from the CAP canal at milepost 295.6 on the CAP canal. 3.4 MARANA WATER: CAP water scheduled by Marana under the terms of its CAP subcontract. 3.5 PARTY/PARTIES: Either one or both of the parties to this Agreement. 3.6 PERMIT: The Constructed Underground Storage Facility Permit issued by the Arizona Department of Water Resources for the A VRP facility, permit no. 71-564896. 3.7 UNCONTROLLABLE FORCES: Any cause beyond the control of the Party affected, including but not limited to, the failure of or threatened failure of facilities, reduction or discontinuance of water deliveries through the CAP, flood, earthquake, storm, fire, lightning, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, restraint by court order or public authority, and action or non-action by or failure to obtain the necessary authorizations or approvals from any governmental agency or authority not a Party to this Agreement, which by exercise of due diligence such Party could not reasonably have been expected to avoid and which by exercise of due diligence it shall be unable to overcome. Nothing contained herein shall be construed so as to require a Party to settle any strike or labor dispute in which it is involved. Any Party rendered unable to fulfill any of its obligations under this Agreement by reason of an Uncontrollable Force shall give prompt written notice of such fact to the other Party and shall exercise due diligence to remove such inability. 1 ~ ... - o 2 4. SCOPE OF SERVICES: This Agreement is limited to the transportation of Marana Water through the BKW Water Delivery System to the A VRP and storage of such water at the AVRP by CAWCD for the benefit of Marana. CAWCD shall deliver Marana Water, which is scheduled by Marana for storage at the A VRP, to the A VRP and CAWCD shall store such water underground at the AVRP for the benefit of Marana. 5. TERM OF AGREEMENT: This Agreement shall become effective when executed by both Parties and shall remain in effect for five years unless the Parties agree in writing to extend the term or unless it is sooner terminated or canceled in accordance with the provisions of this Agreement. 6. CONDITIONS RELATING TO STORAGE: 6.1 All storage of Marana Water at the AVRP shall be consistent with Arizona water law. 6.2 Marana shall obtain a water storage permit from ADWR authorizing it to store Marana Water at the A VRP. 6.3 CAWCD's storage of Marana Water at the AVRP shall, at all times, comply with the Permit. CAWCD shall be responsible for filing annual reports as required by the Permit. If the Permit is canceled or expires for any reason, Marana may terminate this Agreement. 7. PROCEDURE FOR SCHEDULING STORAGE CAPACITY: 7.1 As soon as practicable after the date of execution of this Agreement, Marana shall submit to CAWCD a proposed schedule indicating the amount of A VRP storage capacity it desires to use during the year in which this Agreement is executed. Thereafter, on or before October 1 of each year, Marana shall submit to CAWCD a proposed schedule indicating the amount of A VRP storage capacity Marana desires to use during the following year. 7.2 As soon as practicable after receipt of Marana's proposed schedule following the execution of this Agreement, CAWCD shall return to - .. 4 3 8. Marana the schedule, as adjusted by and acceptable to CAWCD, indicating the amount of A VRP storage capacity that is available to Marana for the year in which this Agreement is executed. Thereafter, on or before November 15 of each year, CAWCD shall return to Marana the schedule, as adjusted by and acceptable to CAWCD, indicating the amount of AVRP storage capacity that is available to Marana for the following year. WATER STORAGE RATE: 8.1 The estimated rate for water storage at the AVRP for 2001 is $21.30 per acre-foot. This rate consists of the following components: an estimated water transportation charge in the amount of $7.50 per acre-foot and an estimated operation and maintenance charge in the amount of $13.80 per acre-foot. The operation and maintenance component of the water storage rate consists of the costs of operating, maintaining and monitoring the facility, including but not limited to, basin maintenance, vegetation management, miscellaneous berm and facility repairs, water level monitoring, water quality sampling and lab analysis costs, and data management and reporting. The water transportation component of the water storage rate represents CAWCD's cost of transporting CAP water through the BKW Water Delivery System for delivery to the A VRP. The water storage rate is an estimated cost. The actual cost for 2001 may be higher or lower. At the end of 2001, and each year thereafter during the term of this Agreement, CAWCD will compute the actual cost of operating and maintaining the A VRP for the previous 12-month period. If the actual costs are higher than the estimated costs included in the water storage rate, CAWCD will bill Marana for the difference in proportion to the amount of the AVRP storage capacity utilized by Marana during the year. Marana shall pay CAWCD within 30 days of receipt of such bill. If the actual O&M costs are lower than the estimated costs, CAWCD will either, at Marana's election, pay ..., .. 'J- -L 1 4 Marana the difference in proportion to the amount of the AVRP capacity utilized by Marana during the year, or credit such amount to Marana's account for the following year. 8.2 The rate for water storage at the AVRP may be adjusted annually by CAWCD. Notice of the adjusted rate shall be provided to Marana by November 15 of the then current year. Such rate shall be effective January 1 of the following year and remain in effect until next adjusted. 8.3 Marana shall pay the rate for water storage, as described in Section 8.1, for each acre-foot of CAP water delivered to the A VRP on behalf of Marana, as measured at the AVRP Turnout. Payment of the rate for water storage, as described in Section 8.1, is not related to and is not contingent on Marana's accrual of long-term storage credits from water stored at the A VRP. 9. OPERATING AGENT: 9.1 CAWCD shall be responsible for operating the AVRP. 9.2 CAWCD shall retain sole responsibility and authority for decisions relating to the A VRP operating and maintenance practices, including maintenance scheduling and the selection of periods when maintenance will be done. 9.3 Whenever practicable, CAWCD shall inform Marana ninety (90) days in advance of any matter which may substantially affect the A VRP or the rights of Marana. 10. DESTRUCTION/RECONSTRUCTION OF THE AVRP: In the event of destruction of all or part of the AVRP, CAWCD may repair or reconstruct the AVRP, but CAWCD shall not be obligated to do so. If CAWCD elects not to repair or reconstruct the AVRP, Marana or CAWCD may terminate this Agreement. Notice of such termination shall be in writing and shall be effective ten (10) days receipt of notice. Provided, however, Marana shall remain obligated to pay CAWCD any amounts owing for water storage services provided under this Agreement before the date of termination. i .. 1 .. : .:. ... :: .. ~.J 5 11. WATER MEASUREMENT AND ACCOUNTING: 11.1 CAWCD shall base its accounting for water delivered to the AVRP on actual measurements, methods required by the Permit and/or generally accepted accounting and engineering practices. 11.2 CAWCD shall install and maintain a flow measurement system to measure the amount of water diverted from the CAP into the AVRP. CAWCD shall test and maintain the accuracy of this system within plus or minus 5 percent of actual flows. 11.3 CAWCD shall determine evaporation losses representative of the conditions at or near the A VRP using the method indicated in the Permit or using actual measurements, when available. Any other losses in the A VRP shall be calculated using generally accepted engineering practices. 11.4 All losses that occur at the AVRP, other than by evaporation, will be calculated using generally accepted engineering practices and water level readings from the gages in the basins. 11.5 CAWCD shall prepare a monthly water accounting report of water stored at the A VRP for Marana. The report shall include the daily amount of water stored and the losses calculated as described in this Section. 11.6 CAWCD shall provide the Arizona Department of Water Resources with reports for the A VRP as required by the Permit. 11.7 The water accounting reports prepared pursuant to this Section shall be sent to Marana monthly and shall be retained by CAWCD for at 1 least three years. 1 , , 12. WATER QUALITY: -. ,...., Marana shall indemnify and hold harmless CAWCD against losses to third parties resulting from water quality degradation or harm to property caused 2 ~ by Marana's use of the AVRP, due to commingling of Marana Water with the . " :. ...... groundwater or water flowing above or below the surface of the Santa Cruz riverbed. Further, Marana waives any claim on its own behalf against 6 CAWCD for water quality degradation or harm to property arising from such commingling, unless such claim is intended to enforce the indemnification provision of this Section; provided, however, that Marana shall indemnify and hold harmless CAWCD only to the extent that indemnification is not provided to CAWCD by the State of Arizona pursuant to A.R.S. Section 45-898.01; and provided, further, however, that Marana's indemnification shall only extend to the percentage of degradation attributable to the water stored on behalf of Marana at the A VRP under the terms of this Agreement. Marana retains the right to claim over against any other entity, including CAWCD, storing water in the A VRP in the amount proportionate to such amount stored by those other entities. In no event shall CAWCD assume liability for water quality degradation resulting from the storage of water in the A VRP, solely due to its performance of obligations as the operating agent under this Agreement. 13. BILLING AND PAYMENTS: 13.1 On or before the 15th day of each month, CAWCD will submit a bill to Marana for water storage charges for A VRP capacity used by Marana during the previous month. Marana shall pay CAWCD within thirty (30) days of receipt of such bill. 13.2 If payment due under this Agreement remains unpaid more than sixty (60) days after its due date, CAWCD may terminate this Agreement effective upon written notice to Marana. In the event CAWCD terminates this Agreement, Marana shall remain obligated to pay any outstanding balance. 14. AUTHORIZATIONS AND APPROVALS: 1 1 Marana shall be responsible for obtaining, at it own expense, any permits, authorizations and approvals required for the underground storage and recovery of water in the A VRP or for Marana's performance under this Agreement. Marana shall keep CAWCD informed of its applications for such permits and authorizations. CAWCD will share information with Marana to assist Marana in its permit application. Marana shall also be :J: - ~ ii ... ::F 7 responsible for filing any annual reports or other documents necessary to maintain its right to store water at the AVRP. 15. LIABILITY: 15.1 Each Party shall assume liability for its own negligence and shall indemnify the other against any damages the non-negligent Party incurs as a result of the negligent Party's action or inaction. 15.2 CAWCD shall assume no liability to Marana for claims of damage resulting from CAWCD's decision to curtail or stop water flows to the AVRP site during storm or emergency conditions. 15.3 CAWCD shall assume no liability to Marana for quantities of recoverable or unrecoverable water stored underground or removed from underground storage; nor to replace water lost, misdirected or otherwise failing to reach the underlying aquifer. CAWCD, Marana and other entities storing water at the A VRP shall share in any deficiency resulting from such lost, misdirected or otherwise unstored water in proportion to the amount of the A VRP capacity it used at the time the deficiency accrued. 15.4 Liability, as described in Section 12, related to water stored in the A VRP by Marana prior to termination of this Agreement, shall remain with Marana after termination of this Agreement. This Section 15.4 shall survive expiration or termination of this Agreement, and remain in full force and effect. 15.5 In the event any third party institutes an action against CAWCD, Marana or other entities storing water at the A VRP for claims arising from the activities undertaken pursuant to this Agreement, the parties named in the action shall meet to determine the procurement of legal counsel and the steps to take to defend against the action. 16. INSURANCE: 16.1 During the term of this Agreement, unless otherwise agreed in writing by CAWCD, Marana shall procure and maintain in force or cause to be procured and maintained in force the following types of insurance: ~ . ... - ? 2 b 8 16.1.1 Commercial General Liability Insurance naming CAWCD as an additional insured, including bodily injury, personal injury, property damage, wrongful death, and contractual liability with a minimum limit of $1,000,000 per occurrence. 16.1.2 Business Automobile Liability Insurance with a minimum limit of $1,000,000. 16.1.3 Worker's Compensation as required by Arizona law and Employees' Liability Insurance limits of $1,000,000/$1,000,000/$1,000,000. 16.1.4 Commercial Umbrella Liability - combined single limit $4,000,000. 16.2 Any insurance carried by CAWCD shall be excess and not contributory insurance to any insurance afforded hereunder. Marana shall submit satisfactory proof of insurance to CAWCD prior to use of the A VRP. Such proof of insurance shall be in the form of a certificate stating the coverage provided and that such insurance shall not be canceled until after thirty (30) days prior written notice thereof shall have been given to CAWCD. 16.3 With written approval of CAWCD, Marana may self-insure or combine the coverages required by this Agreement with coverages outside the scope of that required by this Agreement. 16.4 Required insurance coverages shall be written with deductibles and limits approved by CAWCD. CAWCD may, at any time, change the policy limits, add or eliminate coverages, and shall determine appropriate deductibles or retentions. 16.5 If Marana fails to acquire, provide or continue the insurance coverages required, CAWCD may terminate this Lease immediately upon written notice to Marana. 17. DEFAULT: 17.1 CAWCD and Marana shall pay all monies and carry out all other performances, duties and obligations agreed to be paid and/or ~ , ... - ..... ~ , ... 9 performed by them pursuant to this Agreement. A default by CAWCD or Marana in the covenants and obligations to be kept and performed by it shall be an act of default under this Agreement. 17.2 In the event of a default by CAWCD or Marana, then, within thirty (30) days following notice of such default by the non-defaulting party, the defaulting party shall remedy such default either by advancing the necessary funds and/or rendering the necessary performance. Such notice shall specify the existence and nature of such default. If such default is not remedied within the time specified, the non-defaulting party may terminate this Agreement upon 24 hours written notice. 18. UNCONTROLLABLE FORCES: Neither Party to this Agreement shall be considered in default in the performance of any of its obligations under this Agreement (other than obligations of Marana to pay costs and expenses) when a failure of performance is due to Uncontrollable Forces. Any Party rendered unable to fulfill any of its obligations under this Agreement by reason of an Uncontrollable Force shall give prompt written notice of such fact to the other party and shall exercise due diligence to remove such inability. If after the exercise of due diligence, a Party is unable to remove such inability, then either the Marana or CAWCD may terminate this Agreement. Notice of such termination shall be in writing and shall be effective thirty (30) days after receipt of notice. 19. RESOLUTION OF DISPUTES: 19.1 A Party having a dispute under this Agreement that cannot be resolved by the Parties, may submit the dispute to arbitration. Arbitration shall be subject to the following provisions: 19.1.1 Arbitration shall be binding only upon the consent of the Parties. 19.1.2 A Party wishing to submit a dispute to arbitration shall provide thirty (30) day written notice to the other Party of its intent to pursue arbitration and shall name one arbitrator at that time. 1 .i. :..1 '" -=-t 10 Within fifteen (15) days of receiving this notice, the other Party to the dispute shall name one arbitrator and give written notice to the other Party of its selection. The two selected arbitrators shall, within five (5) days of selection of the second arbitrator, jointly select a third arbitrator. 19.1.3 Within thirty (30) days from the selection of the third arbitrator, the arbitrators shall hold a hearing. Within thirty (30) days from the conclusion of the hearing, the arbitrators shall render a decision on the dispute. 19.1.4 Arbitration shall be subject to the Arizona Arbitration Act, Arizona Revised Statues, Title 12, Chapter 9, Article 1. In the event of a conflict between this Agreement and Act, the provisions of this Agreement shall prevail. 19.2 A Party that is dissatisfied with the results of non-binding arbitration may pursue any other legal or equitable remedy not expressly provided for in this Section 19 and available to resolve the dispute. 20. ACTION PENDING RESOLUTION OF DISPUTES: Pending the resolution of a dispute pursuant to Section 19, each Party shall proceed, to the extent legally permissible, in a manner consistent with this Agreement, and shall make payments required in accordance with the applicable provisions of this Agreement. Any amount paid by a Party pursuant to this Section 20 during the pendency of such dispute shall be subject to refund and adjustment upon a final resolution of any dispute involving an amount due. 21. GOVERNING LAW: ~ ! ~ ! This Agreement shall be governed by the laws of the State of Arizona. 22. BINDING OBLIGATIONS: All of the obligations set forth in the Agreement shall bind CAWCD and its successors and assigns. This Agreement shall not be assigned by Marana or accrue to Marana's successor, nor shall the A VRP capacity use rights hereunder of Marana be used by another party. This Agreement shall not be b 5 ~ . 11 assigned by CAWCD or accrue to CAWCD's successor without the express written consent of Marana. 23. NOTICES: 23.1 Notice, demand or request provided for in this Agreement shall be in writing and shall be deemed properly served, given or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below: Central Arizona Water Conservation District c/o General Manager P.O. Box 43020 Phoenix, AZ 85080-3020 The Town of Marana c/o Mayor 13251 N. Lon Adams Rd. Marana, AZ 85653 23.2 A Party may, at any time, by notice to the other Party, designate different or additional persons or different addresses for the giving of notices. 24. THIRD PARTY BENEFICIARIES: This Agreement shall not be construed to create rights in, or to grant remedies to, any third party as a beneficiary of this Agreement or of any duty, obligation or undertaking established herein. 25. WAIVER: The waiver by either Party of a breach of any term, covenant or condition in this Agreement shall not be deemed a waiver of any other term, covenant or condition or any subsequent breach of the same or any other term covenant or condition of this Agreement. 26. HEADINGS: b 5 -- . Title and paragraph headings are for reference only and are not part of this Agreement. ... 5 12 27. ENTIRE AGREEMENT: The terms, covenants and conditions of this Agreement constitute the entire agreement between the Parties relative to the use of A VRP storage capacity, and no understandings or agreements not herein expressly set forth shall be binding upon them. This Agreement may not be modified or amended in any manner unless in writing and signed by both Parties. IN WITNESS WHEREOF, this Agreement is executed by the Parties hereto. By: ~< " ',- RIZONA WATER~ONSERVATION DISTRICT d Attest: THE TOWN OF MARANA ~\\'''''''''''' ~ Of M..q ,.~ ~~\\"m"",g.;~ S~/COR,(ORATi\.~~ ==cool= ~ %SEAL.I ;: ~ ~ ., ~ ~ ~llllm"\\~ ~ ~'~/Z "\~ ~ ~I/I"il\\\~ BY:~~ L Bo .y ..u.on, Jr., Mayor '\ ~ ~ o G:\gorey\marana avrp water storage agreement.wpd ? 1 13 F. ANN RODRIG~ RECORDER RECORDED BY: , DEPUTY RECORDER 7995 ROOE D~T: 11657 ~..: 2152 NO.- OF PAGES: 13 SEQUENCE: 20012020818 10/18/2001 AG 16:13 SMARA TOWN OF MARANA ATTN: TOWN CLERK 13251 N LON ADAMS RD MARANA AZ 85653 MAIL AMOUNT PAID $ 12.00 AGREEMENT FOR STORAGE OF WATER AT THE LOWER SANTA CRUZ REPLENISHMENT PROJECT 1. PARTIES: This Agreement is made and entered into the I-lift day of ()~ 2001, by and between the CENTRAL ARIZONA WATER CONSERVATION DISTRICT, hereinafter referred to as "CAWCD", and the TOWN OF MARANA, hereinafter referred to as "Marana". 2. RECITALS: 2.1 CAWCD is responsible for operating the Lower Santa Cruz Replenishment Project ("LSCRP"). The LSCRP is located in the Tucson Active Management Area, within the Town of Marana, north of the Avra Valley airport and southwest of the Santa Cruz River in Section 3 of Township 12 South, Range 11 East, Pima County, Arizona. The LSCRP is a state demonstration recharge project, and it was constructed with funds from Account A of the state water storage fund. 2.2 The Arizona Department of Water Resources has issued CAWCD a Constructed Underground Storage Facility permit for the LSCRP. The Permit authorizes the underground storage of a maximum of 30,000 acre- feet of water at the LSCRP. 2.3 Marana desires to store CAP water at the LSCRP and CAWCD agrees to make available unused storage capacity at the LSCRP for such storage, in accordance with the provisions of this Agreement. NOW THEREFORE, in consideration of the foregoing, the payments to be paid by Marana, and the covenants and agreements contained in this Agreement, and other good and valuable consideration, CAWCD and Marana agree as follows: L 1 z - 5 1 3. DEFINITIONS: As used in this Agreement, the following terms, when capitalized, have the following meanings: 3.1 BKW WATER DELIVERY SYSTEM: The canal system, including pump stations, gates and measuring devices, owned by BKW Farms, Inc., which diverts water from the CAP canal at milepost 295.5 on the CAP canal. 3.2 CENTRAL ARIZONA PROJECT (CAP): The water delivery works of the CAP including, but not limited to, the CAP canal, its turnout structures and associated measuring devices. 3.3 LSCRP TURNOUT: The point on the BKW Water Delivery System at which CAP water is diverted from the BKW Water Delivery System into the LSCRP. 3.4 MARANA WATER: CAP water scheduled by Marana under the terms of its CAP subcontract. 3.5 PARTY/PARTIES: Either one or both of the parties to this Agreement. 3.6 PERMIT: The Constructed Underground Storage Facility Permit issued by the Arizona Department of Water Resources for the LSCRP facility, permit no. 71-561366. 3.7 UNCONTROLLABLE FORCES: Any cause beyond the control of the Party affected, including but not limited to, the failure of or threatened failure of facilities, reduction or discontinuance of water deliveries through the CAP, flood, earthquake, storm, fire, lightning, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, restraint by court order or public authority, and action or non-action by or failure to obtain the necessary authorizations or approvals from any governmental agency or authority not a Party to this Agreement, which by exercise of due diligence, such Party could not reasonably have been expected to avoid and which, by exercise of due diligence, it shall be unable to overcome. Nothing contained herein shall be construed so as to require a Party to settle any strike or labor dispute in which it is involved. Any Party 1 i ! .,.;. ~ , ... 5 2 rendered unable to fulfill any of its obligations under this Agreement by reason of an Uncontrollable Force shall give prompt written notice of such fact to the other Party and shall exercise due diligence to remove such inability. 4. SCOPE OF SERVICES: This Agreement is limited to the transportation of CAP water through the BKW Water Delivery System to the LSCRP and storage of such water at the LSCRP by CAWCD for the benefit of Marana. CAWCD shall deliver CAP water, which is scheduled by Marana for storage at the LSCRP, to the LSCRP and CAWCD shall store such water underground at the LSCRP for the benefit of Marana. 5. TERM OF AGREEMENT: 6. This Agreement shall become effective when executed by both Parties and shall remain in effect for five years unless the Parties agree in writing to extend the term or unless it is sooner terminated or canceled in accordance with the terms of this Agreement. CONDITIONS RELATING TO STORAGE: 6.1 All storage of CAP water at the LSCRP shall be consistent with Arizona water law. 6.2 Marana shall obtain a water storage permit from ADWR authorizing it to store Marana Water at the LSCRP. 6.3 CAWCD's storage of Marana Water at the LSCRP shall, at all times, comply with the Permit. CAWCD shall be responsible for filing annual reports as required by the Permit. CAWCD shall promptly notify Marana of any changes or modifications to the Permit that would affect Marana's rights under this Agreement. If the Permit is canceled or expires for any reason, Marana may terminate this Agreement. PROCEDURE FOR SCHEDULING STORAGE CAPACITY 7.1 As soon as practicable after the date of execution of this Agreement, Marana shall submit to CAWCD a proposed schedule indicating the amount of LSCRP storage capacity it desires to use during the year in which this - :s ,. 6. ? 7. ]. 3 8. Agreement is executed. Thereafter, on or before October 1 of each year during the term of this Agreement, Marana shall submit to CAWCD a proposed schedule indicating the amount of LSCRP storage capacity Marana desires to use during the following year. 7.2 As soon as practicable after receipt of Marana's proposed schedule following the execution of this Agreement, CAWCD shall return to Marana the schedule, as adjusted by and acceptable to CAWCD, indicating the amount of LSCRP storage capacity that is available to Marana for the year in which this Agreement is executed. Thereafter, on or before November 15 of each year during the term of this Agreement, CAWCD shall return to Marana the schedule, as adjusted by and acceptable to CAWCD, indicating the amount of LSCRP storage capacity that is available to Marana for the following year. WATER STORAGE RATE: 8.1 The estimated rate for water storage at the LSCRP for 2001 is $13.10 per acre-foot. This rate consists of the following components: an estimated operation and maintenance charge in the amount of $4.10 per acre-foot and an estimated water transportation charge in the amount of $9.00 per acre- foot. The operation and maintenance component of the water storage rate consists of the costs of operating, maintaining and monitoring the facility, including, but not limited to: basin maintenance, vegetation management, miscellaneous berm and facility repairs, water level monitoring, water quality sampling and lab analysis costs, and data management and reporting. The water transportation component of the water storage rate represents CAWCD's cost of transporting CAP water through the BKW Water Delivery System for delivery to the LSCRP. The water storage rate is an estimated cost. The actual cost for 2001 may be higher or lower. At the end of 2001 and, if necessary, each year thereafter during the term of this Agreement, CAWCD will compute the actual costs of operating and maintaining the LSCRP for the previous 12-month period. If the actual costs are higher than :=i> i .. , ;- == 4 the estimated costs included in the water storage rate, CAWCD will bill Marana for the difference in proportion to the amount of the LSCRP storage capacity utilized by Marana during the year. Marana shall pay CAWCD within 30 days of receipt of such bill. If the actual costs are lower than the estimated costs, CAWCD will either, at Marana's election, pay Marana the difference in proportion to the amount of the LSCRP capacity utilized by Marana during the year, or credit such amount to Marana's account for the following year. 8.2 The rate for water storage at the LSCRP may be adjusted annually by CAWCD. Notice of the adjusted rate shall be provided to Marana by November 15 of the then current year. Such rate shall be effective January 1 of the following year and remain in effect until next adjusted. 8.3 Marana shall pay the rate for water storage, as described in Section 8.1, for each acre-foot of water delivered to the LSCRP on behalf of Marana, as measured at the LSCRP Turnout. Payment of the rate for water storage, as described in Section 8.1 is not related to and is not contingent on Marana's accrual of long-term storage credits from water stored at the LSCRP. 9. OPERATING AGENT: 9.1 CAWCD shall be responsible for operating the LSCRP. 9.2 CAWCD shall retain sole responsibility and authority for decisions relating to the LSCRP operating and maintenance practices, including maintenance scheduling and the selection of periods when maintenance will be done. 9.4 Whenever practicable, CAWCD shall inform Marana ninety (90) days in advance of any matter which may substantially affect the LSCRP or the rights of Marana. ~ , ... 1 b 10. DESTRUCTION/RECONSTRUCTION OF THE LSCRP: In the event of destruction of all or part of the LSCRP, CAWCD may repair or reconstruct the LSCRP, but CAWCD shall not be obligated to do so. If CAWCD elects not to repair or reconstruct the LSCRP, Marana or CAWCD may terminate this Agreement. Notice of such termination shall be in writing and shall be effective 2 5 ten (10) days after receipt of notice. Provided, however, Marana shall remain obligated to pay CAWCD any amounts owing for water storage services provided under this Agreement before the date of termination. 11. WATER MEASUREMENT AND ACCOUNTING: 11.1 CAWCD shall base its accounting for water delivered to the LSCRP on actual measurements, methods required by the Permit and/or generally accepted accounting and engineering practices. 11.2 CAWCD shall install and maintain a flow measurement system to measure the amount of water diverted from the CAP into the LSCRP. CAWCD shall test and maintain the accuracy of this system within plus or minus 5 percent of actual flows. 11.3 CAWCD shall determine evaporation losses representative of the conditions at or near the LSCRP using the method indicated in the Permit or using actual measurements, when available. Any other losses in the LSCRP shall be calculated using generally accepted engineering practices. 11.4 All losses that occur at the LSCRP, other than by evaporation, will be calculated using generally accepted engineering practices and water-level readings from the gages in the basins. 11.5 CAWCD shall prepare a monthly water accounting report of water stored at the LSCRP for Marana. The report shall include the daily amount of water stored and the losses calculated as described in this Section. 11.6 CAWCD shall provide the Arizona Department of Water Resources with water accounting reports for the LSCRP as required by the Permit. 11.7 The water accounting reports prepared pursuant to this Section shall be sent to Marana monthly and shall be retained by CAWCD for at least three years. 12. WATER QUALITY: 1 1 b Marana shall indemnify and hold harmless CAWCD,against all losses to third parties resulting from water quality degradation or harm to property caused by Marana's use of the LSCRP, due to the commingling of Marana Water with the groundwater or water flowing above or below the surface of the Santa Cruz L ], :J "',,: 6 riverbed. Further, Marana waives any claim on its own behalf against CAWCD for water quality degradation or harm to property arising from such commingling, unless such claim is intended to enforce the indemnification provision of this Section; provided, however, that Marana shall indemnify and hold harmless CAWCD only to the extent that indemnification is not provided to CAWCD by the State of Arizona pursuant to A.R.S. Section 45-898.01; and provided, further, however, that Marana's indemnification shall only extend to the percentage of degradation attributable to the water stored on behalf of Marana at the LSCRP under the terms of this Agreement. Marana retains the right to claim over against any other entity, including CAWCD, storing water in the LSCRP in the amount proportionate to such amount stored by those other entities. In no event shall CAWCD assume liability for water quality degradation resulting from the storage of water in the LSCRP, solely due to its performance of obligations as the operating agent under this Agreement. 13. BILLING AND PAYMENTS: 13.1 On or before the 15th day of each month, CAWCD will submit a bill to Marana for water storage charges for LSCRP storage capacity used by Marana during the previous month. Marana shall pay CAWCD within thirty (30) days of receipt of such bill. 13.2 If payment due under this Agreement remains unpaid more than sixty (60) days after its due date, CAWCD may terminate this Agreement effective upon written notice to Marana. In the event CAWCD terminates this Agreement, Marana shall remain obligated to pay any outstanding balance. 14. AUTHORIZATIONS AND APPROVALS: Marana shall be responsible for obtaining, at its own expense, any permits, authorizations and approvals required for the underground storage and recovery of water in the LSCRP or for Marana's performance under this Agreement. Marana shall keep CAWCD informed of its applications for such permits and authorizations. CAWCD will share information with Marana to assist Marana in its permit b 5 ,..." 1 === 7 application. Marana shall also be responsible for filing any annual reports or other documents necessary to maintain its right to store water at the LSCRP. 15. LIABILITY: 15.1 Each Party shall assume liability for its own negligence and shall indemnify the other against any damages the non-negligent Party incurs as a result of the negligent Party's action or inaction. 15.2 CAWCD shall assume no liability to Marana for claims of damage resulting from CAWCD's decision to curtail or stop water flows to the LSCRP site during storm or emergency conditions. 15.3 CAWCD shall assume no liability to Marana for quantities of recoverable or unrecoverable water stored underground or removed from underground storage; nor to replace water lost, misdirected or otherwise failing to reach the underlying aquifer. CAWCD, Marana and any other entities storing water at the LSCRP shall share in any deficiency resulting from such lost, misdirected or otherwise unstored water in proportion to the amount of the LSCRP capacity it used at the time the deficiency accrued. 15.4 Liability, as described in Section 12 related to water stored in the LSCRP by Marana prior to termination of this Agreement, shall remain with Marana after termination of this Agreement. This Section 15.4 shall survive expiration or termination of this Agreement, and remain in full force and effect. 15.5 In the event any third party institutes an action against CAWCD, Marana or other entities storing water at the LSCRP for claims arising from the activities undertaken pursuant to this Agreement, the parties named in the action shall meet to determine the procurement of legal counsel and the steps to take to defend against the action. 16. INSURANCE: 16.1 During the term of this Agreement, unless otherwise agreed in writing by CAWCD, Marana shall procure and maintain in force or cause to be procured and maintained in force the following types of insurance: ,.." : 8 16.1.1 Commercial General Liability Insurance naming CAWCD as an additional insured, including bodily injury, personal injury, property damage, wrongful death, and contractual liability with a minimum limit of $1,000,000 per occurrence. 16.1.2 Business Automobile Liability Insurance with a minimum limit of $1,000,000. 16.1.3 Worker's Compensation as required by Arizona State law and Employees' Liability Insurance limits of $1,000,000/$1,000,000/$1,000,000. 16.1.4. Commercial Umbrella Liability - combined single limit $4,000,000. 16.2 Any insurance carried by CAWCD shall be excess and not contributory insurance to any insurance afforded hereunder. Marana shall submit satisfactory proof of insurance to CAWCD prior to use of the LSCRP. Such proof of insurance shall be in the form of a certificate stating the coverage provided and that such insurance shall not be canceled until after thirty (30) days prior written notice thereof shall have been given to CAWCD. 16.3 With written approval of CAWCD, Marana may self-insure or combine the coverages required by this Agreement with coverages outside the scope of that required by this Agreement. 16.4 Required insurance coverages shall be written with deductibles and limits approved by CAWCD. CAWCD may, at any time, change the policy limits, add or eliminate coverages, and shall determine appropriate deductibles or retentions. 16.5 If Marana fails to acquire, provide or continue the insurance coverages required, CAWCD may terminate this Lease immediately upon written notice to Marana. 1 .: i ;- 17. DEFAULT: .-.. r 17.1 Marana and CA WCD shall pay all monies and carry out all other performances, duties and obligations agreed to be paid and/or performed by them pursuant to this Agreement. A default by Marana or CAWCD in the 9 covenants and obligations to be kept and performed by it shall be an act of default under this Agreement. 17.2 In the event of a default by Marana or CAWCD, then, within thirty (30) days following notice of such default by the non-defaulting Party, the defaulting Party shall remedy such default either by advancing the necessary funds and/or rendering the necessary performance. Such notice shall specify the existence and nature of such default. If such default is not remedied within the time specified, the non-defaulting Party may terminate this Agreement upon 24 hours written notice. 18. UNCONTROLLABLE FORCES: Neither Party to this Agreement shall be considered in default in the performance of any of its obligations under this Agreement (other than obligations of Marana to pay costs and expenses) when a failure of performance is due to Uncontrollable Forces. Any Party rendered unable to fulfill any of its obligations under this Agreement by reason of an Uncontrollable Force shall give prompt written notice of such fact to the other party and shall exercise due diligence to remove such inability. If, after the exercise of due diligence, a Party is unable to remove such inability, then either Marana or CAWCD may terminate this Agreement. Notice of such termination shall be in writing and shall be effective thirty (30) days after receipt of notice. 19. RESOLUTION OF DISPUTES: 19.1 A Party having a dispute under this Agreement that cannot be resolved by the Parties, may submit the dispute to arbitration. Arbitration shall be subject to the following provisions: 19.1.1 Arbitration shall be binding only upon the consent of the Parties. 19.1.2 A Party wishing to submit a dispute to arbitration shall provide thirty (30) days written notice to the other Party of its intent to pursue arbitration and shall name one arbitrator at that time. Within fifteen (15) days of receiving this notice, the other Party to the dispute shall name one arbitrator and give written notice to the other Party of its ~ 1 1 r w c= 10 selection. The two selected arbitrators shall, within five (5) days of selection of the second arbitrator, jointly select a third arbitrator. 19.1.3 Within thirty (30) days from the selection of the third arbitrator, the arbitrators shall hold a hearing. Within thirty (30) days from the conclusion of the hearing, the arbitrators shall render a decision on the dispute. 19.1.4 Arbitration shall be subject to the Arizona Arbitration Act, Arizona Revised Statutes, Title 12, Chapter 9, Article 1. In the event of a conflict between this Agreement and the Act, the provisions of this Agreement shall prevail. 19.2 A Party that is dissatisfied with the results of non-binding arbitration may pursue any other legal or equitable remedy not expressly provided for in this Section 19 an available to resolve the dispute. 20. ACTION PENDING RESOLUTION OF DISPUTES: Pending the resolution of a dispute pursuant to Section 19, each Party shall proceed, to the extent legally permissible, in a manner consistent with this Agreement, and shall make payments required in accordance with the applicable provisions of this Agreement. Any amount paid by a Party pursuant to this Section 20 during the pendency of such dispute shall be subject to refund and adjustment upon a final resolution of any dispute involving an amount due. 21. GOVERNING LAW: This Agreement shall be governed by the laws of the State of Arizona. 22. BINDING OBLIGATIONS: All of the obligations set forth in this Agreement shall bind CAWCD and its successors and assigns. This Agreement shall not be assigned by Marana or accrue to Marana's successor, nor shall the LSCRP capacity use rights hereunder of Marana be used by another party. 23. NOTICES: 23.1 Notice, demand or request provided for in this Agreement shall be in writing and shall be deemed properly served, given or made if delivered in person b r ::::J< i .a 11 or sent by registered or certified mail, postage prepaid, to the persons specified below: Central Arizona Water Conservation District clo General Manager P.O. Box 43020 Phoenix, AZ 85080-3020 The Town of Marana clo Mayor 13251 N. Lon Adams Rd. Marana, AZ 85653 23.2 A party may, at any time, by notice to the other party, designate different or additional persons or different addresses for the giving of notices hereunder. 24. THIRD PARTY BENEFICIARIES: This Agreement shall not be construed to create rights in, or to grant remedies to, any third party as a beneficiary of this Agreement or of any duty, obligation or undertaking established herein. 25. WAIVER: The waiver by either Party of a breach of any term, covenant or condition in this Agreement shall not be deemed a waiver of any other term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition of this Agreement. 26. HEADINGS: Title and paragraph headings are for reference only and are not part of this Agreement. 28. ENTIRE AGREEMENT: 1 The terms, covenants and conditions of this Agreement constitute the entire Agreement between the Parties relative to the leasing of LSCRP capacity, and no understandings or agreements not herein expressly set forth shall be binding upon them. This Agreement may not be modified or amended in any manner unless in writing and signed by the parties. b ::J< .-. L .. ! 12 IN WITNESS WHEREOF, this Agreement is executed by the Parties hereto. """"""," ~"' OF~'~ ~~~\\""""'A ::: ~IcORPORAT;\-s ~ =S OCIO == S \SEAL_. S ~ ~ , S ~ ;"I"I"'\\~ ~ ~/~/Z. '\9....~ ."IIUll\\- \ CENT~ ARIZ2N~WA TER CONSERVATION DISTRICT ) ) <:::::J ~ .. \, By: THE TOWN OF MARANA ~/- I By' I - . S:bY utt n.-c. Mayor Attesl~uk fn~~ G:\gorey\marana Iscrp water storage agreement.wpd 13 ~ = 6 -= ,