HomeMy WebLinkAboutResolution 2010-087 IGA with metropolitan water district for the purchase of long term storage creditsMARANA RESOLUTION N0.2010-87
RELATING TO UTILITIES; APPROVING AND AUTHORIZING THE MAYOR TO
EXECUTE A FIVE YEAR INTERGOVERNMENTAL AGREEMENT BETWEEN THE
TOWN OF MARANA AND METROPOLITAN DOMESTIC WATER IMPROVEMENT
DISTRICT FOR THE PURCHASE OF LONG TERM STORAGE CREDITS
WHEREAS the Town of Marana and Metropolitan Domestic Water Improvement
District (Metro) provide potable water to residents and businesses; and
WHEREAS the Town endeavors to purchase water annually equivalent to the volume of
water pumped; and
WHEREAS Metro is willing to sell Long Term Storage Credits on an annual basis to
supplement the Town's purchase of water from Central Arizona Project.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, ARIZONA, AS FOLLOWS:
SECTION 1. The "Agreement to Sell and Assign Central Arizona Project Long-Term
Storage Credits in the Tucson Active Management Area" attached as Exhibit A to and
incorporated by this reference in this resolution is hereby approved, and the Mayor is hereby
authorized to execute it for and on behalf of the Town of Marana.
SECTION 2. The various Town officers and employees are authorized and directed to
perform all acts necessary or desirable to give effect to this resolution.
PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF
MARANA, ARIZONA, this 14th day of September, 2010.
Mayor d Honea
A -rvrram.
AGREEMENT TO SELL AND ASSIGN
CENTRAL ARIZONA PROJECT LONG-TERM STORAGE CREDITS
IN THE TUCSON ACTIVE MANAGEMENT AREA
THIS AGREEMENT TO SELL AND ASSIGN LONG-TERM STORAGE
CREDITS IN THE TUCSON ACTIVE MANAGEMENT AREA (this "Agreement") is
entered into as of the ~ T day of September, 2010 ("Effective Date") by and between
the Town of Marana, an Arizona municipal corporation ("Town"), and Metropolitan
Domestic Water Improvement District, an Arizona municipal corporation ("District"),
(collectively referred to as the "Parties").
RECITALS
A. The purpose of this Agreement is to provide for cooperation between the
Town and District for the purpose of providing renewable water supplies to the Parties'
customers in accordance with the requirements of the Assured Water Supply program in
the Tucson Active Management Area ("Tucson AMA"), which will mutually benefit the
Town and District.
B. The Town seeks to acquire long-term storage credits ("LTSCs"), as
defined in A.R.S. § 45-802.01(11).
C. The District desires to sell, and the Town desires to acquire, a portion of
the District's Central Arizona Project ("CAP") Municipal and Industrial ("M&I")
Subcontract water that will be stored in the future, as LTSCs, on a best efforts basis
during the term of this Agreement.
D. Both the Town and District own and operate wells permitted by the
Arizona Department of Water Resources ("ADWR") as recovery wells that may recover
stored water within their service areas.
E. The District has entered into a subcontract with the Central Arizona Water
Conservation District ("CAWCD") in the amount of 13,460 acre-feet ("af') per year of
CAP M&I Subcontract water to be delivered through the CAP canal system.
F. The District holds Water Storage Permit No. 73-564896.01 to store up to
11,000 of per year at the Avra Valley Underground Storage Facility ("AV-USF"); and
holds Water Storage Permit No. 73-561366.03 to store up to 15,000 of per year at the
Lower Santa Cruz Underground Storage Facility ("LSC-USF").
G. The Town is a Designated Municipal Water Provider (DWR No. 26-
402254.000) in the Tucson AMA enrolled as a Member Service Area of the Central
Arizona Groundwater Replenishment District ("CAGRD").
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are. hereby acknowledged, the.. Parties hereto agree to the following
terms and conditions:
1.0 Incorporation of Recitals. The Recitals set forth above are true and correct
and are incorporated by reference as though fully set forth herein.
2.0 Order and Purchase of LTSCs. Pursuant to the terms and conditions of
this Agreement, District agrees to sell the Town at least 1,537.37 of of LTSCs in the
Tucson AMA each year during the term of this Agreement, in accordance with the terms
and conditions set forth below:
2.1 The District agrees that the Town shall have first priority to
purchase at least 1,537.37 of of LTSCs to be accrued by the District in the Tucson AMA
during the term of this Agreement.
2.2 Except as provided in subparagraph 2.3 herein, the Town shall
elect the amount of LTSCs it wishes to purchase in any calendar year by notifying the
District by August 31St of the preceding calendar year. Failure to provide such notice
shall abrogate the District's obligations under this Agreement for the following year only.
2.3 The District shall be responsible for ordering and arranging for the
delivery and storage of CAP M&I water in the Tucson AMA. For calendar year 2011,
the District shall order and arrange for the delivery and storage of CAP M&I water, in
order to enable the assignment to the Town, after regulatory deductions, 1,537.37 acre-
feet of LTSCs for the Town's use in calendar year 2012. The costs to Marana for
calendar year 2011 and each calendar year thereafter are reflected on Schedule 1.
2.4 The price per acre-foot of LTSCs purchased by Town during the
term of this Agreement shall be based upon the following: (a) the annual purchase price
shall be the Capital and Delivery charges set forth in the Annual Rate Schedule adopted
by the CAWCD Board of Directors for M&I long-term subcontractors during the year in
which the CAP LTSC water was delivered to the District; plus (b) the District's operation
and maintenance fee at the AV-USF of $15 per acre-foot for 2011 and 2012 with an
annual increase of 3% in subsequent years, or comparable fee for storage at the LSC-
USF, plus (c) District administration costs in an amount equal to 1.02 multiplied by the
sum of (a) + (b). These costs are reflected on Schedule 1.
2.5 Payment from the Town for the annual LTSCs acquired from the
District shall be made in twelve equal installments due on the last day of each month of
each year in which CAP water is delivered to the District. The monthly payments shall
be based upon the amount of LTSCs requested by the Town pursuant to this Paragraph 2.
3.0 Term. The term of this Agreement will commence on the Effective Date
and will terminate on December 31, 2015 unless the Parties mutually agree in writing to
extend the term of this Agreement.
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4.0 Water Storage. All CAP M&I water stored by the District in the Tucson
AMA pursuant to subparagraph 21 of this Agreement, shall be stored in compliance with
the requirements of A.R.S. § 45-852.01(B) at the AV-USF (Permit No. 71-564896.0003)
and/or the LSC-USF (Permit No. 71-561366.0002), as those permits may be amended
from time to time.
5.0 ADWR and CAGRD Reporting. The Town and District shall comply with
all applicable permitting and filing requirements of the ADWR, CAWCD and CAGRD,
on a timely basis. If necessary, the Parties shall cooperate to ensure timely compliance.
6.0 Assignment of LTSCs Accrued by the District. Within thirty (30) days
after District receives annual notification from ADWR of the amount of LTSCs accrued
from the storage of CAP M&I water in the Tucson AMA, the District shall prepare for
the Town's execution, ADWR's form authorizing the assignment of the District's LTSCs
to the Town based upon of the amount of LTSCs identified in subparagraph 2.2 herein.
7.0 Assignment of LTSCs accrued by the District. Not later than
September 30a' of each calendar year, beginning in 2012, the Parties shall notify ADWR,
on a form provided by ADWR, of the assignment of LTSCs agreed upon by the Parties in
Section 2 of this Agreement, minus the regulatory deductions described in Section 8,
below, from the District's Long-Term Storage Account (Permit No. 70-411130) to the
Town's Long-Term Storage Account (Permit No. 70-411220.000). The Town will be
responsible for payment to ADWR of the LTSC transfer fee.
8.0 ADWR Determination of LTSC.
8.1 The Parties acknowledge that any LTSCs issued by ADWR for
CAP water stored by the District in the Tucson AMA will reflect reductions made by
ADWR in accordance with the requirements of A.R.S. § 45-852.01, historically in an
amount equivalent to six percent ("6%") of the gross water volume delivered into a
storage facility (the "Net Credits"). The Parties further acknowledge that the exact
amount of LTSCs earned by the District will not be known until after a final
determination is made by the Director of ADWR, which may occur after June 30th of the
calendar year following storage.
8.2 Any adjustments to the amount of LTSCs received by the District
from ADWR for CAP water storage in the Tucson AMA in excess of 6% shall be the sole
responsibility of the District and any additional reduction or loss of such LTSCs shall be
the District's sole risk and shall not affect the District's commitment to assign the full
amount of the Net Credits to the Town in any particular year during the term of this
Agreement.
8.3 ADWR's rejection and invalidation of an assignment of LTSCs to
the Town pursuant to A.R.S. § 45-854.01(C) shall not cause a reduction in the amount of
monies owed the District by the Town pursuant to the terms of this Agreement.
9.0 District's Warranties; Limitations.
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9.1 All applicable legal requirements and fees related to the storage of
CAP water in the Tucson AMA pursuant to this Agreement will have been or will be
satisfied by the District at the time of the assignment.
9.2 The District will have good and marketable title to the LTSCs, free
of any liens or encumbrances, at the time of assignment.
9.3 Because CAWCD controls all deliveries of CAP water to the
Tucson AMA, and to the AV-USF and the LSC-USF, the District does not warrant that
CAP water will be successfully delivered throughout the term of this Agreement
10.0 Water Recoverv. The Parties acknowledge the need to construct recovery
wells to facilitate the recovery of water they have stored in the AV-USF and the LSC-
USF, which are located within the Town's service area. During the term of this
agreement, the Parties agree to work together to locate any such wells outside of the area
of hydrologic impact in mutually acceptable locations within the Town's service area,
recognizing that the District and Town's primary obligation is to provide adequate and
efficient service to its customers.
11.0 Termination.
11.1 This Agreement may be terminated for any reason by either Party
upon one hundred and eighty (180) days written notice in accordance with the provisions
of Paragraph 12 herein; provided however, that the Parties will continue to honor any
contractual obligations entered into prior to the termination date, which obligations
extend longer than 180 days following the date of such notice.
11.2 This Agreement may be terminated. upon the effective date of a
statutory or regulatory change that results in the prohibition of this type of transaction.
11.3 The District may terminate this Agreement if, after using its best
efforts, the District is unable to procure the necessary CAP water to store for LTSC as
required by the terms of this Agreement.
12.0 Notices. All notices or other communications required or provided to be
sent by either Parry shall be in writing and shall be sent by United States Postal Service,
postage prepaid, return receipt requested; courier; any nationally recognized overnight
delivery service; facsimile transmission; or in person. Any such notice sent by registered
or certified mail return receipt requested shall be deemed to have been duly given and
received seventy-two (72) hours after the same is so addressed and mailed with postage
prepaid. Notices delivered by overnight service shall be deemed to have been given
twenty-four (24) hours after delivery of the same, charges prepaid, to U.S. Postal Service
or private courier. Notice hand-delivered by courier for same-day delivery shall be
deemed to have been given on the date of hand-delivery. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or delivered
upon confirmation of transmission thereof. Any notice or other document sent by any
other manner shall be effective only upon actual receipt thereof. All notices shall be
addressed to the Party at the address below;
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If to the Town of Marana: Utilities Department Director
Attn: Ms. Dorothy O'Brien
5100 W. Ina Road.
Tucson, Arizona 85743
Fax No.: 520-382-2590
With a copy to: Town Attorney
Attn: Mr. Frank Cassidy
11555 W. Civic Center Dr.
Marana, Arizona 85653
Fax No.: 520-382-1945
If to Metropolitan DWID: General Manager
Attn: Mr. Mark Stratton
P.O Box 36870
Tucson, Arizona 85740
Fax No. 520-575-8454
13.0 Change of Address. Any address or name specified above may be
changed by notice given to the addressee by the other Parry in accordance with this
Paragraph. The inability to deliver because of a changed address of which no notice was
given, or rejection or other refusal to accept any notice, shall be deemed to be the receipt
of the notice as of the date of such inability to deliver or rejection or refusal to accept.
Any notice to be given by any Parry hereto may be given by the counsel for such Party.
14.0 Additional Documents. Each of the Parties agrees to execute any and all
documents necessary to effectuate the intent and purposes of this Agreement.
15.0 Entire Agreement. 'This Agreement, together with any attachments or
other documents expressly referred to or incorporated by reference herein, contains the
entire Agreement of the Parties with respect to the subject matter herein, and constitutes
and embodies the full and complete understanding and agreement of the Parties hereto
with respect to the subject matter herein, and supersedes all prior understandings and
agreements, whether oral or in writing.
16.0 Non-Discrimination. The Parties agree to be bound by applicable state
and federal laws, rules and regulations governing equal employment opportunity and
prohibiting discrimination.
17.0 Inspection and Audit. All books, accounts, reports, files and other records
relating to this Agreement shall be subject at all reasonable times to inspection and audit
by either Parry for five (5) years after completion of performance under this Agreement,
as required by A.R.S. § 35-214 and any successor statutes. Such records shall be
produced at the Arizona Attorney General's office or at the requesting party's principal
office within a reasonable time after request is made therefore.
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18.0 Conflicts of Interest. The Parties acknowledge that either the. Town or the
District may, pursuant to A.R.S. § 38-511 or any successor statute, within three (3) years
after execution of this Agreement, and without penalty or further obligation, cancel this
Agreement if any person significantly involved in initiating, negotiating, securing,
drafting or creating this Agreement on behalf of the Town or District is, at any time while
the Agreement or any extension of the Agreement is en effect, an employee or agent of
any other Party to the Agreement in any capacity or a consultant to any other Party of the
Agreement with respect to its subject matter.
19.0 Governing Law. The law of the State of Arizona shall govern this
Agreement's interpretation and enforcement.
20.0 Dispute Resolution. In the event that a dispute between or among the
Parties to this Agreement should arise, to the extent required by law, and subject to
applicable jurisdictional amounts, such dispute shall be resolved by arbitration pursuant
to the Arizona Uniform Rules of Procedures for Arbitration and A.R.S. § 12-1518.
21.0 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same
agreement.
22.0 Headings. The headings and titles to the paragraphs of this Agreement are
not a part of this Agreement and shall have no effect upon the construction or
interpretation of any part of this Agreement.
23.0 Severability. In the event any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.
24.0 Attorneys' Fees. If either Party hereto breaches any provision of this
Agreement, the breaching Party shall pay to the non-breaching Party all reasonable
attorneys' fees and other costs and expenses incurred by the non-breaching Parry in
enforcing this Agreement or preparing for legal or other proceedings regardless of
whether suit is instituted
25.0 Waiver. A waiver of any breach or default shall not be a waiver of any
other breach or default.
26.0 Force Majeure. Any prevention, delay, or stoppage due to Force Majeure
shall excuse the performance by a Party for a period equal to any such prevention, delay,
or stoppage.
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of
the date first written above.
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TOWN OF MARANA, ARIZONA,
an Arizona municipal c rporation
By: /~
Printed Name: Ed ~~~ea.
Its: Mayor
Date: ~` ~~^~~
Attest:
ocel ronson, Town Clerk
Approve to
~-
Ca dy, Town orney
METROPOLITAN DOMESTIC
WATER IMPROVEMENT DISTRICT,
an Arizona municipal corpo 'on
By:
Printed Name: Jcaw.P_t 17 '7a~, le
Its: Chairman of the Board
Approved as t Fo
c
Lewis oca, .A.
District C sel
Date: ~li~luat~
Schedule No. l
Recharge Costs for 2011 and 2012
(MDWID to order and recharge 1,635.5 AF and assign to Marana the net
allowable by ADWR following deductions for "cut to the aquifer" and
evaporation, but not less than 1,537.37 AF)Recharge Cost Formula =Water
Ordered x (Price of CAP Capital charge + CAP Delivery charge + Recharge
O&M charge) + MDWID Administrative Charge Factor
For 2011 1,635.5 AF x ($15/AF + $122/AF + $15/AF) x 1.02, or
and 2012:
1.635.5 AF x $152/AF x 1.02, or
1,635.5 AF x $155.04/AF = $253,567.92
Payable on the last day of each month in twelve equal annual installments of
$21,130.66.
Recharge Credit Formula =Water Ordered x (1 -Percent of Evaporation Losses -
Percent Cut to the Aquifer)
For 2011and 2012: 1,635.5 AF x (1 - 0.01- 0.05), or
1,635.5 AF x 0.94 = 1,537.37 AF
Recharge Costs for 2013 through 2015
Except for the annual 3% increase far operation and maintenance costs at the recharge
facilities, the Recharge Costs for the remaining years of this agreement shall be
calculated in the same manner as the prior years.
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