HomeMy WebLinkAboutResolution 2015-103 Approving a five year IGA with Metropolitan Domestic Water Improvement DistrictMARANA RESOLUTION NO. 2015 -103
RELATING TO UTILITIES; APPROVING AND AUTHORIZING THE MAYOR TO SIGN A
FIVE YEAR INTERGOVERNMENTAL AGREEMENT WITH THE METROPOLITAN
DOMESTIC WATER IMPROVEMENT DISTRICT FOR THE PURCHASE OF LONG TERM
WATER 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 has a volume of long term storage credits they are willing to sell on an
annual basis which will supplement the Town's purchase of water from Central Arizona Project;
and
WHEREAS the Town and Metro have just completed a mutually beneficial five -year
intergovernmental agreement for the Town's purchase of Metro long term storage credits,
approved by the adoption of Marana Resolution No. 2010 -87, and the Mayor and Council find
that entering into a new five -year intergovernmental agreement is in the best interests of the
Town and its citizens and businesses.
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 sign 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 C:OUNCU, 014 rI11F TOWN OF
MARANA, ARIZONA, this 15"' day of September, 2015.
z Mayor Ed Honea
ATTEST:
o,kelyn C Town Clerk
00043174, DOCX /I
Marana Resolution No. 2015 -103
APPROV
162 063 ►I1.1
9]912015 9:11 AM FJC
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 Z day of September, 2015 ( "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 -terra 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- 564596.0100 to store up
to 11,000 of per year at the Avra Valley Underground Storage Facility ( "AV- USF "); and
holds Water Storage Permit No. 73-561366.0300 to store up to 15,000 of per year at the
Lower Santa Cruz Underground Storage Facility ( "LSC- USF "); and holds Water Storage
Permit No. 73- 555750.0002 to store up to 14,316.66 of per year at the BKW Farms
Groundwater Savings Facility, and holds Long -Term Storage Account (Permit No. 70-
41113 0.0000).
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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 ") and holds Long -Term Storage
Account (Permit loo. 70- 411220.0000).
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 IncoKporation 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 up to 1,553.725 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 up to annually 1,553.725 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 31 't 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 2016,
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, up to 1,553.725
acre -feet of LTSCs for the Town's use early as calendar year 2017 unless additional
credits are transferred to the Town per Sections 2.5 and 2.6 . The method for calculating
the costs and credits to Marana for calendar year 2016 and each calendar year thereafter
are reflected on Schedule 1.
2.4 The price per acre -foot of CAP water stored for the Town during
the term of this Agreement shall be based upon the volume of CAP water ordered and
delivered and 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 water was
delivered to the District; plus (b) the District's operation and maintenance fee at the AV-
USF of $16.39 per acre -foot for 2016 with an annual increase of 3% in subsequent years,
or the applicable current fee for storage paid by the District at the LSC -USF and/or
BKw -G SF, plus (c) District administration costs in an amount equal to 1.02 for AV-
USFs and LSC -USF, and 1.03 for BKW --GSF multiplied by the sum of (a) + (b). These
costs are reflected on Schedule 1.
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2.5 CAP Reconciliation. If the CAWCD Board of Directors
determines the District overpaid on CAP deliveries, the District will confer with Town
what additional credits will be transferred to the Town equivalent to the Town's
proportional share of the District's order with the CAP Reconciliation decided by
CAWCD. If the CAWCD Board of Directors determines the District underpaid on CAP
deliveries, the District Will confer with the Town on what reduction in the number of
credits will be transferred to the Town equivalent to the Town's proportional share of the
District's order and the CAP Reconciliation. These costs and credit additions or
subtractions are reflected on Schedule 2.
2.6 If the Town desires to have CAP water stored at BKW's GSF, then
the District will increase the number of credits earned and transferred based on the In-
Lieu Rebate from BKW Farms, Inc. The credit addition calculation is reflected on
Schedule 2.
2.7 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, 2020 unless the Parties mutually agree in writing to
extend the term of this Agreement.
4.0 Water Stora e. All CAP M&I water stored by the District in the Tucson
AMA pursuant to subparagraph 2.3 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- 564896.0004)
and/or the LSC -USF (Permit No. 71-5613 66.0003) and/or the BKW -GSF (Permit No. 71-
53 813 3.0004), as those permits may be amended from time to tune.
5.0 ADWR and CAGRD Re ortin . The Town and District shall comply With
all applicable permitting and filing requirements of the ADWR, CAWCD and CA GRD,
on a timely basis. If necessary, the Parties shall cooperate to ensure timely compliance.
6.0 Assi nnent of LTSCs Accrued by the District. Within thirty (30) days
after District receives annual notification fTom 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 assigtunent of the District's LTSCs
to the Town based upon of the amount of LTSCs identified by the Town per
subparagraph 2.2 herein.
7.0 Assi m of LTSCs Accrued by the District. Not later than
September 30 t1 of each calendar year, beginning in 2017, 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 (Pen No. 70- 411130.0000) to
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the Town's Long-Term Storage Account (Permit No. 70- 411220.0000). 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 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 30' of the calendar year following storage. The District shall assign to the Town
the Net Credits earned for the water ordered per subparagraph. 2.3.
8.2 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.
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 and to BIW -GSF, the District does
not warrant that CAP water Will be successfully delivered throughout the term of this
Agreement
10.0 Water Recovery The Parties acknowledge the need to construct recovery
wells to facilitate the recover y of water they have stored in the AV -USF and the LSC-
USF, and the BKW -GSF, which are located within the Town's service area. During the
teem of this agreement, the Parties agree to work together to locate any such wells that
might occur 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.
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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 immediately if, after
using its best efforts, the District is unable to procure the necessary CAP water to store
for LTS C as required by the terms of this Agreement.
12.0 Notices All notices or other communications required or provided to be
sent by either Party 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:
If to the Town of Marana: Marana water
Attn: Mr. John Kmiec
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. Joseph Olsen
P.0 Box 36870
Tucson, Arizona 85740
Fax No. 520- 575 -8454
13.0 Chan e of Address. Any address or name specified above may be
changed by notice given to the addressee by the other Party 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
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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 Party 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
p y
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.
1 6.0 Non- Disc6mination 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
relatin g g J to this Agreement shall be subject at all reasonable tunes to inspection and audit
by either Party 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.
18.0 Conflicts of Interest The Parties acknowledge that either the Town or the
District nay, 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 l aw 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 l aw, 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
p �'
interpretation of any part of this Agreement.
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23.0 Severabilit . 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 Party 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 Maj eure. Any prevention, delay, or stoppage due to Force Maj eure
shall excuse the erformance b Part for a period equal to any such prevention, delay,
� � a y
or stoppage.
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of
the date first written above.
TOWN OF MARANA, ARIZONA,
an Arizona municipal corporation
By:
Printed Name: Ld Ho he,�t..
Its: Mayor
Date: q1j 411s
Attest:
J P elyn B nson, Town Clerk
Approveds to Farm:
ryhlc Cag`sj#'y, Town Artfomey
METROPOLITAN DOMESTIC
WATER IMPROVEMENT DISTRICT,
an Arirmunicipa orporation
Printed Name:
410"- t
Its: Chairman of the Board
proved as to Form:
wis Roca Rothgerber, LLP
District Counsel
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Date:
Schedule No. 1
Recharge Costs for 2016 (Example A)
(MDWID to order and recharge 1,63 AF at AVRP -USF and assign to Marana
the net allowable by ADWR following deductions for "cut to the aquifer" and
evaporation, Recharge Cost Formula = Water ordered x (Price of CAP Capital
charge + CAP Delivery charge + Recharge O&M charge) + MDWID
Administrative Charge Factor for USF
For 2016 1 5 635.5 AF x ($23/AF + $161/AF + $16.3 91AF) x 1.02, or:
1.635.5 AF x $200.39/AF x 1.02, or
1,635.5 AF x $204.40AF = $334,296.20
Payable on the last day of each month in twelve equal annual installments of
$27,858.020
Recharge Costs for 2016 (Example B)
(MDWID to order and recharge 1,635.5 AF at LSC -USF and assign to Marana the
net allowable by ADWR following deductions for "cut to the aquifer" and
evaporation, Recharge Cost Formula = Water ordered x (Price of CAP Capital
charge + CAP Delivery charge + Recharge O&M charge) + MDWID
Administrative Charge Factor for U S F
For 2016 1,635.5 AF x ($23 /AF + $161 /AF + $15.00 /AF) x 1.02, or:
1.635.5 AF x $199.00 /AF x 1.02, or
1,635.5 AF x $202.98AF = $331,973.79
Payable on the last day of each month in twelve equal annual installments of
$27,664.480
Recharge Costs for 2016 (Example Q
(MDWID to order and recharge 1,635.5 AF at BKW --GSF and assign to Marana
the net allowable by ADWR following deductions for "cut to the aquifer" and
evaporation, Recharge Cost Formula = Water ordered x (Price of CAP Capital
charge + CAP Delivery charge) x MDWID Administrative Charge Factor for G S F
For 2016 L635.5 AF x ($23/AF + $161/AF) x l .03, or.
1.635.5 AF x $184.001AF x 1.03, or
I,635.5 AF x $189.52AF = $309,959.96
Payable on the last day of each month in twelve equal annual installments of
$25,830.00.
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Recharge Credit Formula =Water Ordered x (1 — Percent of Evaporation Losses*
— Percent Cut to the Aquifer)
• Evaporation Loss values used below are only for illustration
Recharge Credit Example for AVRP-USF
For 2016 1 AF x (1 - 0.011) * (1 — 0.05), or
1,635.5 AF x 0.989 * 0.95 = 1 AF
Recharge Credit Example for LSC -USF
For 2016 1,635.5 AF x (1 - 0.012) * (1 — 0.05), or
1 AF x 0.988 * 0.95 = 1,535.08 AF
Recharge Credit Example for BKW- GSF
For 2016 1 AF x (1 - 0.00) * (1 — 0.05), or
1,635.5 AF x 0.95 = 1,553.725 AF
Recharge Costs for 2061 through 2020
Except for the annual 3% increase for operation and maintenance casts at the recharge
facilities, the Recharge Costs for the remaining years of this agreement shall he
calculated in the same manner as the prior years.
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Schedule No. 2
Calculation of Marana's Proportional Cost for MDWID's CAP order and Reconciliation
Credits Example:
Metro 2016
Order
11,912.0
2016 Deliveries
for
Marana
1,635.5
2016 Deliveries
for
Metro
1 0,276.5
Percent fo r
Marana
13.73
Delivery Cost on
2016 order
@$161/AIU4
$1,917,832.00
Reconciliation
Refund on 2016
Order
rr $6.821AF
$81,239.54
Delivery Cost for Delivery Cost for
Marana rr
$161/A]117 Metro @ $161 /A1117
$263 $1,654,516.50
Reconciliation.
Refund for
Marana
rr $6.82/AT
$11,154.11
Percent for
Marana
1 3.73
Reconciliation
Refund for Metro Percent for
rr $6.82 /A1147 Marana
$70,085.73 13.73
2016 Delivery Volume Equivalent to Marana Reconciliation
Refund
2016 Reconciliation Volume = 2016 Reconciliation Refund/2016
Storage Cost
2016 Reconciliation Volume = $11,154.111(CAP Water Capital Cost + CAP Actual Delivery Cost
+ AVRP Storage Cost) x Administrative Charge for USF
2016 Reconciliation Volume! $11,154.111($23/AF + $161/AF +$16.391AF) x 1.02
2016 Reconciliation Volume = $11,154.111($200.391AF) x 1.02
2016 Reconciliation Volume = $11,154.11 /$204.40 /.A F)
2016 Reconciliation
Volume = 5 4.5 7 AF
2016 Reconciliation Credits after Regulatory Deductions
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Equivalent to Volume Stored at AVR_P from Marana
Reconciliation Refund
2016 Reconciliation Credits to Marana = 'Volume Stored x (1 - % Evaporation) * (I
Cut to Aquifer %)
2015 Reconciliation Credits to Marana = 54.57 AF x (1- 0.011) * (1— 0.05)
2016 Reconciliation Credits to Marana = 54.57 AF x 0.989 * 0.95
2016 Reconciliation
Credits to Marana = 51.27 AF
Calculation for Additional Credits to Marana froze. In --Lieu Rebate at BKW -GSF
Example
In -Lieu Rebate fiom Marana GSF Storage =
Marana Stored Volume at BKW -GSF x
BKW -GSF In -Lieu Rebate
In -Lieu Rebate from Marana GSF Storage =
1,635.5 AF x $12 /AF
In -Lieu Rebate from Marana GSF Storage =
$ 19,626.00
Credits Earned from Marana GSF Storage =
In -Lieu Rebate from Marana GSF
Storage /[(Price of CAP Capital Charge +Price
of CAP Delivery Charge) x MDWID
Administrative Charge Factor for GSF]
Credits Earned from Marana GSF Storage =
$19,626.00 /[($23 /AF + $161/AF) x 1.03
Credits Earned from Marana GSF Storage =
$19,626.00 /($184 /AF x 1.03)
Credits Earned from Marana GSF Storage =
$19,626.00/($189.52/AF)
Credits Earned from Marana GSF Storage =
103.56 AF
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