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HomeMy WebLinkAboutResolution 2017-033 Approving Mayor to sign the NWRRDS IGA MARANA RESOLUTION NO, 2017-033 RELATING TO UTILITIES; APPROVING AND AUTHORIZING THE MAYOR, TO SIGN THE NOR rrHWEST RECHARGE, RECOVERY, AND DELIVERY SYSTEM INTERGOVERNMENTAL AGREEMENT WHEREAS the Metropolitan Domestic Water Improvement District,, the Town of Marana, and the Town of Oro Valley currently store water underground or utilize groundwater savings facilities in the north Marana area; and WHEREAS, to utilize this water, the staffs of the three entities have developed the Northwest Recharge, Recovery, and Delivery System (NWRRDS) to transport water from north Marana to meet current and future water demands in the north area of the Tucson Basin; and WHEREAS the NWRRDS will reduce groundwater withdrawals and allow for aquil'er recovery in the north area of the Tucson Basin; and WHEREAS the staffs of the three entities have jointly prepared the proposed Northwest Recharge, Recovery, and Delivery System Intergovernmental Agreement (the NWRRDS IGA), which sets forth the activities and responsibilities of the three entities during planning, design, construction, operation and maintenance of the NWRRDS for a period of 50 years; and --4 WHEREAS the Town Council -finds that the proposed NWRRDS IGA is in the best interests of the Town and its residents and landowners. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MAR-ANA, ARIZONA, AS FOLLOWS: SECTION I. The Northwest Recharge, Recovery, and Delivery System Intergovernmental Agreement (the NWRRDS IGA) 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 Town's Manager and staff are hereby directed and authorized to undertake all other and -further tasks required or beneficial to carry out the terms, obligations, and o�jectives of the NWRRDS IGA. 00051918.DOCX/I Marana Resolution Na.2017-033 11/18/2016 12:12 I'M PASSED ANIS ADOPTED BY THE MAYOR AND COUNCIL OF THE OWN OF MARANA, ARIZONA, this 18t" day of April, 2017. r Mayor Ed Honea ATTEST. APPROVED AS TO FORM.- Jo lyn . n ns��n, Town Clerk Yr k has y, Tow tney MARANA AZ ESTABLISHED 1977 00051918.[--)()CX/I Marana RCSOIuticm No.2017-033 - 2 - 11/18/2016 12:12 PM NORTHWEST RECHARGE, RECOVERY, AND DELIVERY SYSTEM (NWRRDS) INTERGOVERNMENTAL AGREEMENT The Parties to this Northwest Recharge, Recovery, and Delivery System (NWRRDS) . Intergovernmental Agreement ("Agreement") are the Metropolitan Domestic Water Improvement District, an Arizona domestic water improvement district ("MDWID"); the Town of Marana, an Arizona municipal corporation ("Marana"); and the Town of Gro Valley, an Arizona municipal corporation ("Oro Valley"). RECITALS A. Each of the Parties has stored water underground or has utilized a groundwater savings facility for later recovery and use as provided by Arizona law. B. Each Party desires to recover the water stored underground or credited through a groundwater savings facility and utilize that water as provided by Arizona law. C. Each Party desires to work together with the other Parties in good faith to recover and deliver renewable water to foster water resource stability regionally and in each Party's respective service area. D. To allow for the transportation and use of the recovered water, each of the Parties desires to participate in the design, construction, operation, and maintenance of the NWRRDS in the manner described in this Agreement. E. MDWID has stored water underground at certain recharge facilities and desires to recover that water from recovery wells pursuant to Arizona law. F. MD WID further desires to deliver the recovered water to the NWRRDS, which will transport the water to the herb Johnson Reservoir, which will be MDWID's Point of Entry. G. Marana desires to recover its water stored underground at the Lower Santa Cruz Replenishment Project or through a groundwater savings facility, deliver the recovered water through the Marana Airport water system to the NWRRDS, and transport its water to the Marana Water Service Area. H. Oro Valley desires to recover the water stored underground at the Lower Santa Cruz Replenishment Project, the Avra Valley Recharge Project and the BKW Farms Ground Water Savings Facility, deliver the recovered water to the NWRRDS, and transport the water to the Oro Valley Water Service Area. I. Pursuant to A.R.S. § 11-952, the Parties have the right to enter into agreements and contracts with other public agencies to further their common interests. EXHIBIT A End Unkj mn doctuno t lxxWty mnv.100306390 1 AGREEMENT In consideration of the premises and mutual covenants and agreements herein set forth, the Parties agree as follows: 1. DEFINITIONS: As used in this Agreement, the following terms, when capitalized, have the meanings indicated: 1.1. "ADWR"" means the Arizona Department of Water.Resources. 1.2. "Allocated Capacity" means the amount of Operating Capacity in acre feet (AF) allocated to each Party as specifically set forth in Exhibit B. 1.3. "Annual Report" means a summary of all expenditures incurred throughout the year, a reconciliation based on each Party's usage and calendar year payments and the quantity of metered water delivered to each Party compared to the Party's requested annual delivery. 1.4. "Authorized Representative" means an individual, as set forth in Section 6.1, Who Will serve on the NWRRDS Committee and render decisions on behalf of a Party on matters, including, but not limited to, approval of contractual change orders, annual operating costs, annual delivery orders and any other matters that the NW RRD S Committee has authority to determine. 1.5. "Booster Station" means a facility located along the N S pipeline that will pump the water to allow the water to reach its higher elevation destinations). 1.6. "Central Arizona Project" or"CAP" means the water delivery works of the CAP including, but not limited to, the CAP canal, its turnout structures, pumping plants, and associated measuring devices. 1.7. "Construction Insurance" means the insurance coverage applicable to Design and Construction Work for the NWRRDS, procured and maintained as provided in Section 15 and Exhibit D. 1.8. "Design and Construction Work" means all work associated with constructing, expanding or improving the NWRRDS, including but not limited to, all planning, engineering, design, permitting, construction, reconstruction, contract preparation, purchasing, supervision, inspection, accounting, software development and implementation, testing and start-up for the NWRRDS prior to the In-Service Date, and for cancellation of the NWRRDS if the Parties decide not to complete it. 1.9. "Design and Construction Costs" means the costs of performing Design and Construction Work, as described in Section 7. 1.10. "Force Maj eure Event" means any event beyond the reasonable control of a Party, including but not limited to failure of or threatened failure of facilities, 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. 1.11. "Herb Johnson Reservoir" means the 5,000,000 gallon reservoir owned by MDWID located near Shannon Road and Linda Vista Blvd. 1.12. "In-Service Date' means the date on which the Operating Agent determines the NWRRDS to be operational at its then current designed capacity. 1.13. "N S" or"Northwest Recharge, Recovery, and Delivery System" means the water delivery system., which is composed of, but not limited to, a pipeline, certain land rights, certain well sites, and the forebay site, all as described on Exhibit A. 1.14. "NWRRDS Committee" means a committee established pursuant to Section 5 of this Agreement. 1.15. "Operating Agent" means the Party responsible for the performance of Design and Construction Work and Operations and Maintenance Work in accordance with this Agreement. 1.16. "Operating Capacity" means the annual amount of water in AF that can be transported through the NWRRDS. 1.17. "Operating Insurance" means insurance coverage applicable to Operations and Maintenance Work for the NWRRDS, to be procured and maintained in accordance with Section 15 and Exhibit E. 1.18. "Operations and Maintenance Costs" means the costs of performing Operations and Maintenance Work as described in Sections 8 and 9 and Exhibit C. 1.19. "Operations and Maintenance Work" means the work occurring after the In- Service Date associated with operations and maintenance of the NWRRDS and administering the terms of this Agreement. 1.20. "Parties" shall mean collectively, MDWID, Marana, and Oro Valley. Each may be referred to as a "Party". 1.21. "Point of Entry" means the point where water transported through the NWRRDS exits the NWRRDS for delivery to the applicable Party in compliance with applicable drinking water standards. The Point of Entry for 3 each Party is located approximately fifty (50) feet south of the reservoirs and is specifically located at the valve downstream from the meter to measure deliveries to each Party, as described on Exhibit A. 1.22. "Source" means the point(s) where a Party's water is received by the NWRRDS for delivery to the Party's Point of Entry. The Source for each Party is set forth in Exhibit A. 1.23. "Third Party Liability" means any liability arising from a claim brought by a third party not a Party to this Agreement in relation to the Design and Construction work, operations and Maintenance work, or the NWRRDS. 2. TERM ANIS WITHDRAWAL. 2.1. This Agreement shall become effective upon recordation with the Pima County Recorder("Effective Date") and shall remain in effect through June30, 2075, unless earlier terminated in accordance with the terms of this Agreement. on or before June 30, 2070, the Parties shall commence negotiations in good faith to address the renewal of the Agreement. 2.2. The Parties may terminate this Agreement at any time by written agreement of all Parties. 2.3. Upon.expiration or termination of this Agreement, ownership of the NWRRDS shall remain with MDWID. Each remaining Party shall share in all costs for decommissioning of the infrastructure not owned by MDWID and payment of any expenses remaining under this Agreement in proportion to the Party's Authorized Capacity percentages as set forth in Exhibit B. 2.4. Upon ninety (90) days' written notice, a Party may withdraw from.this Agreement subject to the following and Sections 2.5 and 2.6. 2.4.1. Subsequent to a Party's withdrawal under this section, the remaining Parties shall have the option to assume the withdrawn Party's Allocated Capacity and future obligations related thereto (except as provided by Section 2.5) as agreed to by the Parties without compensation to the withdrawing Party; provided, that if the Parties cannot agree to a new allocation of the withdrawn Party's Allocated Capacity within thirty (30) days, the withdrawn Party's Allocated Capacity and future obligations shall be either reallocated in the ratio of each remaining Party's Allocated Capacity in the NWRRDS to the sum of all the remaining Parties' Allocated Capacity in the NWRRDS or will not be allocated to any remaining Party, as determined by the NWRRDS Committee. Exhibit B shall be revised to reflect the effect of any withdrawal. 2.4.2. Notwithstanding anything to the contrary in this Agreement, (i) if a Party, at the sole discretion of the Party, withdraws from this Agreement prior to the award of construction contract for the Design and Construction. 4 Work of the NWRRDS, the Party shall be responsible for any and all additional costs related to the revised and modified design of the NWRRDS to reflect the change in capacity and any other changes to the design made necessary at that time by the Withdrawal; and (ii) if a Party withdraws from this Agreement after the award of construction contract for the Design and Construction Work of the NWRRDS, the withdrawing Party shall be responsible for its share of all Design and Construction Costs and other costs due from such Party prior to the effective date of the withdrawal regardless of its withdrawal from.this Agreement. 2.5. Each Party shall remain bound by the terms and conditions set forth in Section 16.7 following either withdrawal from participation in or termination of this Agreement. This Section 2.5 shall survive expiration or termination of this Agreement. 2.6. A Party withdrawing from this Agreement pursuant to Section 2.4 shall be obligated to pay for its share of all costs due from such Party during the period in which it participated in this Agreement even if such costs or expenses are allocated after the effective date of the Party's withdrawal. 3. OWNERSHIP OF NORTHWEST RECHARGE, RECOVERY, AND DELIVERY SYSTEM 3.1. MDWID shall own all title, interest and rights to the Northwest Recharge, Recovery, and Delivery System, excluding each Party's contractual right to its Allocated Capacity in the N WRRD S and each Party's other rights and obligations in relation to the NWRRDS. The Allocated Capacity rights of Oro Valley and Marana are intangible assets with the ability to capitalize and depreciate independently by Oro Valley and Marana in accordance with the Government Accounting Standards Board at the time of the approval of this Agreement. MDWID will only capitalize and depreciate MDWID's contributed portion to the NWRRD S. 4. ALLOCATED CAPACITY 4.1. Each Party shall have the contractual right to its Allocated Capacity in the NWRRDS as set forth in Exhibit B. Exhibit B shall be revised by the Operating Agent to reflect any changes in Allocated Capacity during the term of this Agreement in accordance with the terms of this Agreement. 4.2. This Agreement entitles each Party to use certain segments of the NWRRDS based on proportional capacity as described further in Exhibit B at any time after the In-Service Date for receipt of water into the NWRRDS at the Party's Source and delivery from the NWRRDS at the Party's Point of Entry, subject to the conditions specified in this Agreement. 4.3. Subject to Sections 4.4, 4.5, 16.2 and 16.3 and the provisions of this Section 4.3, a Party may make available to a Party or non-party, a portion, or all, of its 5 Allocated Capacity; provided, that, if a Party withdraws from or otherwise ceases to be a Party to this Agreement for any reason, the lease or other conveyance shall also terminate. Any lease or other similar conveyance of a Party's Allocated Capacity shall include language making such agreement immediately terminate upon a Party's withdrawal or other termination of its participation under this Agreement. 4.4. Notwithstanding anything to the contrary in this Agreement, any lease or other similar conveyance shall be subject to the Party seeking to make all or part of its Allocated Capacity available to another party offering such capacity to the following parties in the following priority: (a) other Parties to this Agreement; (b) other local water providers in the Tucson metropolitan area; and (c) other third parties. 4.5. Any further sublease or other similar conveyance by a Party described in Subsection (b) or (c) of Section 4.4 shall be subject to prior approval by the NWRRDS Committee. 4.6. In the event of a conflict between the terms and conditions of a lease, assignment or conveyance of interest and this Agreement, this Agreement shall control. 4.7: The Parties are not obligated to use their Allocated Capacity, but must continue to pay the Base Usage Rate per acre foot of the parties Allocated Capacity as required under the agreed-upon methodology in Exhibit C even if the Party's Allocated Capacity is not used. 4.8. Each Party shall be responsible for the design, construction and maintenance of its own infrastructure after the Point of Entry, which is not part of the NWRRDS infrastructure required to deliver its water to its service area, including, but not limited to, all source delivery points and delivery systems. 5. OPERATING AGENT DUTIES 5.1.General Duties 5.1.1. The Operating Agent shall be MDWID; if MDWID assigns its rights in this Agreement to another entity (including ownership of the NWRRDS), the Operating Agent shall be determined by a vote of the remaining Parties and new assignees pursuant to Section 6.5 within thirty (30) days of the effective date of the assignment/transfer by MDWID. In the event that only one of the original Parties remain, then that remaining single party shall have first right of refusal to become the Operating Agent. 5.1.2. The Operating Agent shall administer and monitor the NWRRDS in accordance with all applicable laws. The Operating Agent shall conduct all duties under this Agreement in accordance with industry standards and shall provide to all Parties the information required under this Agreement in 6 accordance ,with the timeframes required under this Agreement and with such level of detail as to allow each Party to fulfill its obligations under this Agreement. 5.1.3. The Operating Agent shall act as agent for the Parties and on its own behalf to administer the Design and Construction work as well as the Operations and Maintenance work of the NWRRDS and perform other functions consistent with the purpose and terms of this Agreement not otherwise provided for herein. The Operating Agent shall perform its duties and responsibilities in accordance with Section 5.2 and 5.3 below(as applicable). 5.2.Design and Construction Work Duties 5.2.1. The operating Agent, up to the Points of Entry, shall: 5.2.1.1. Complete all Design and Construction Work, including managing all bids and procurement in accordance with applicable law. 5.2.1.2. Obtain all permits, licenses, approvals, contracts and insurance as required to perform and complete all Design and Construction work. 5.2.1.3. Manage the bidding process for all Design and Construction Work including the award of all Design and Construction work. 5.2.1.4. Provide bidding and contract documents to the NWRRDS Committee for review. 5.2.1.4.1. Comments on the bidding and contract documents shall be discussed during regularly scheduled meetings during the design, construction, and operation of the NWRRDS and approved as set forth in Section 6.7. 5.2.1.5. Enter into and, following execution, administer all contracts associated with the NWRRDS (not including leases or other similar conveyances described in Section 4) subject to Section 6.7. 5.2.1.6. Approve change orders in accordance with this subsection. 5.2.1.6.1. All change orders shall be discussed during regularly scheduled meetings during the design, construction, and operation of the NWRRDS. The meetings shall be attended by a representative of each Party appointed by the Authorized Representative for that Party. The frequency of the meetings shall be determined by the representatives of the Parties. 5.2.1.6.2. The Operating Agent may authorize change orders if the increased cost of the change order is less than five percent (5%) of the total contract price. 7 5.2.1.6.3. If the increased cost of a change order (or design amendment) is greater than five percent (5%) of the total contract price, the operating Agent, if feasible, shall provide notice of the change order to the other Parties in advance of the meeting where the change order will be considered. The Operating Agent shall authorize such change orders if the change order is approved by those representatives of the Parties in attendance at the meeting where the change order is considered (provided that a Party may provide written approval of or objection to the change order in lieu of attendance at the meeting). 5.2.1.6.4. Notwithstanding subsection 5.2.1.6.3, if the operating Agent determines that a change order involves a safety issue, an emergency or that allowing time for consideration of the change order at a meeting would cause a significant increase in costs associated with the change order, the operating Agent may authorize the change order prior to the meeting. 5.2.1.7. At each meeting of the NWRRDS Committee, supply the NWRRDS Committee with information on any matters which may substantially affect the design or construction of the NWRRDS. 5.2.1.8. obtain and maintain all required regulatory permits and approvals. 5.2.1.9. Follow generally accepted accounting principles and standard engineering practices. 5.2.1.10. Prior to each construction phase of the NWRRDS, the operating Agent shall provide a proposed budget for that phase to the other Parties. The budget shall include each Party's estimated share of the costs. Each budget shall be submitted to the NWRRDS Committee for approval. 5.2.2. The operating Agent shall maintain records, documents, plans and information directly or indirectly pertinent to the performance of Design and Construction Work and operations and Maintenance Work under this- Agreement hinAgreement in accordance With applicable Arizona records retention schedules. The Parties shall have access to all records for the purpose of inspection, audit and copying during normal business hours for as long as the records are maintained. 5.2.3. Notwithstanding anything to the contrary in this Agreement, if the Operating Agent determines that any issue during the construction of the NWRRDS involves a safety issue or an emergency, as determined by the Operating Agent in its reasonable discretion, the Operating Agent may take 8 action to address such issue. Such action will be reported to the Authorized Representative for each Party in a timely manner. 5.2.4. The Parties agree that any development projects submitted for review within Marana or Oro Valley within the vicinity of proposed facilities or pipelines associated with the NWRRDS project will be provided to the Operating Agent for the purposes of identifying necessary easements or rights-of-way necessary to preserve and protect the NWRRDS project. 5.3.OPERATIONS AND MAINTENANCE 'WORD DUTIES, 5.3.1. The Operating Agent shall: 5.3.1.1. Once construction of the NWRRDS is complete and water deliveries commence, conduct all Operations and Maintenance work in accordance with regulatory requirements, industry standards and the terms of this Agreement, subject to payment by the Parties. 5.3.1.2. Obtain all permits, licenses, approvals, contracts and insurance as required to perform and conduct all Operations and Maintenance Work. 5.3.1.3. Manage procurement and bids for the Operations and Maintenance work in accordance with applicable law. 5.3.1.4. Provide administrative, technical, and ADEQ certified operational staff to the extent required to conduct operations of the NWRRDS. 5.3.1.5. Deliver each Party's water as described in Exhibit B in accordance with the operating procedures for the operations of the NWRRDS. However, any Party may request a change for operational reasons subject to agreement by the Operating Agent; provided that such change does not adversely impact other Parties to this Agreement. The Operating Agent shall have no responsibility to operate or maintain booster pump(s) owned or operated separately by a Party, other than to allow access to the NWRRDS of the applicable Party's water. 5.3.1.6. Provide cost and operational information to the NWRRDS Committee and/or any Party within ten(10) business days of a written request. 5.3.1.7. Conduct operations in accordance with all applicable federal, state and local regulatory requirements. 9 5.3.1.8. Provide each Party in a timely manner with water quality information to meet any ADEQ regulations and reporting in accordance with Section 13.2, and water accounting information to meet any required ADWR regulations and reporting in accordance with Section 12.5. 5.3.1.9. Prepare and revise necessary operating procedures for the operation of the NWRRDS. 5.3.2. The Operating Agent shall have the sole discretion in determining whether a curtailment or stoppage of water flows to the NWRRDS is required and/or made necessary by circumstances existing at any time (including, but not limited to, failure to meet primary drinking water quality standards, main breaks, and power outages). Operating Agent shall promptly notify each of the Parties of any curtailment or stoppage. Each Party will be responsible to provide the Operating Agent with up-to-date contact information for this notification. G. NWRRDS COMMITTEE. 6.1. Upon the complete execution and recording of this Agreement, a committee will be formed known as the NWRRDS Committee. Each Party shall have one Authorized Representative to act as a member of the NWRRDS Committee. The Authorized Representatives of the Parties shall be as follows: A. MDWID: General Manager of MDWID B. Oro Valley: Director of Oro Valley Water Utility C. Marana: Director of Town of Marana Water Department Each Authorized Representative shall also designate an alternate ("Alternate Representative") to act in the absence of the Authorized Representative. In the event that a Party's Authorized Representative and Alternate Representative cannot attend a meeting of the NWRRDS Committee, the Authorized Representative of the Party may provide in Writing the Party's proxy to another Party to this Agreement. 6.2. The chairman of the NWRRDS Committee shall be the Authorized Representative of the Operating Agent commencing on the Effective Date and continuing for three years after the In-Service Date. Thereafter, the position of chairman shall rotate on an annual basis in the order set forth above (i.e., Oro Valley, Marana, MDWID). The chairman shall be responsible for administrative functions of the meeting, but otherwise shall have the same rights and obligations of the other members of the NWRRDS Committee. 6.3. The NWRRDS Committee may, at its choosing, participate in the following: 10 6.3.1. Selection of the consultants for the Design and Construction Work. 6.3.2. Review of design prior to finalization for construction. 6.4. The operating Agent shall provide for the time, place and manner in which the NWRRDS Committee will conduct its meetings. Prior to the In-Service Date, the NWRRDS Committee shall meet at least monthly unless otherwise agreed.. Following the In-Service Date, the NWRRDS Committee shall meet at least quarterly unless otherwise agreed by the NWRRDS Committee. Notwithstanding the foregoing, any Party may request a meeting of the NWRRDS Committee at any time. 6.5. Each Party shall give written notice to the other Parties of the name of its Alternate Representative within thirty (30) days after execution of this Agreement. Notice of any change of Authorized Representative or Alternate Representative shall be provided in writing to the other Parties in accordance with the notice provisions of this Agreement. 6.6. Unless otherwise specified in this Agreement, NWRRDS Committee decisions shall be by vote of the Parties; provided, that if a vote solely concerns a part of the NWRRDS for which a Party does not participate or contribute, the Party shall not be entitled to vote. Each Party to this Agreement shall have one vote. Decisions must be authorized by a majority of the Parties present at the time of the vote. Such majority shall be determined on the basis of the entire number of Parties and not by the number of Authorized Representatives (or Alternative Representatives) present at a particular meeting. In the case of a tie, there shall be no alteration to the status quo. 6.7. Among other items, the NWRRDS Committee shall be provided with the following information and will vote on: 6.7.1. The final design, specifications and bid documents for the construction of the NWRRDS. 6.7.2. Concurrence of the final bid for the construction of the NWRRDS prior to governing body of the operating Agent awarding such work. 6.7.3. Annual operations and Maintenance Costs for each Party calculated in accordance with Exhibit C. 6.7.4. operating procedures prepared by operating Agent (if any). 6.7.5. other matters as set forth in this Agreement or as brought to the NWRRDS Committee by the operating Agent. 6.8. Each year on or before January 1 st, the operating Agent shall provide the Parties with an annual operating plan with initial estimates of the operations and Maintenance Costs for the following year and estimates of costs for the 1� Operations and Maintenance Work to be conducted during the following year. Within thirty (30) days of the submission of the plan, the NWRRDS Committee shall meet to vote on approval of the Operations and Maintenance Work set forth in the plan for the following year; provided, however, that no vote shall be required for Operations and Maintenance Work that must be completed in order to remain in compliance with any permits or other applicable laves, and the Operating Agent shall have the authority to take any such action that it reasonably determines is essential to maintaining compliance with such permit or law. 6.8.1. By March 31st (or other date determined by the NWRRDS Committee) of each year, the Operating Agent shall reconcile the Operations and Maintenance Costs for the prior calendar year and the NWIZRDS Committee shall determine whether to refund any overpayment or bill the Parties for any underpayment. 6.9. The NWRRDS Committee will vote on any planned Operations and Maintenance Work exceeding a total of$50,000.001"n a calendar year that is not included in the annual Operations and Maintenance Work plan described in Section 6.8 above. 6.10. Notwithstanding the submission of information to the NWRRDS Committee and the right to vote in accordance with the sections of this Section 6 above, the Operating Agent shall retain sole responsibility and authority for decisions during the design and construction of the NWRRDS and operating and maintenance practices, including maintenance scheduling and the selection of periods when maintenance will be done. 6.11. Each year, the NWRRDS Committee shall estimate future deliveries for the next five (5) years. The Parties are not restricted to the deliveries in each 5--year plan, rather this conjunctive management activity will efficiently utilize NWRRDS capacity. 6.12. Notwithstanding the provisions of Section 6.6 regarding a majority vote, prior to the initial commencement of Design and Construction Work activities that would result in financial obligation by the Parties, the NWRRDS Committee shall vote on whether to commence such Design and Construction Work. This initial, one-time determination to commence Design and Construction Work activities that would result in a financial obligation by the Parties shall require a unanimous vote of the Parties. 6.13. The NWRRDS Committee shall have no authority to amend this Agreement and any amendment will require the approval of each of the governing bodies of the Parties. 12 7e DESIGN AND CONSTRUCTION COSTS 7.1. Design and Construction Costs shall consist of, but not be limited to, the following direct costs: 7.1.1. Costs of contracts entered into by the Operating Agent, for equipment, material, labor, services and studies performed in connection with Design and Construction work. 7.1.2. Costs of structures and improvements, equipment, and temporary facilities for the NWRRDS. 7.1.3. Costs and expenses, including those of outside consultants and attorneys, incurred by the Operating Agent for acquiring construction and operating permits, design, certificates and licenses, for complying with environmental laws, rules and regulations, and the preparation of agreements relating to Design and Construction work executed with entities other than the Parties hereto. 7.1.4. Costs of direct labor, materials, supplies, apparatus, initial spare parts, power, supporting information technology software, and water in connection with Design and Construction work, including rental charges and specialty tools, machinery and equipment. 7.1.5. Costs of Construction Insurance. 7.1.6. Costs associated with any loss, damage or liability arising out of or caused by Design and Construction work which are not satisfied by Construction Insurance. 7.1.7. All federal, state or local taxes of any character imposed upon Design and Construction work. 7.1.8. Costs of work, services or expenses of Parties incurred in the performance of Design and Construction work if requested, authorized or approved by the Operating Agent. 7.1.9. Costs of relocating existing facilities necessitated by Design and Construction work. 7.1.10.Costs and expenses of enforcing or attempting to enforce the provisions of Construction Insurance policies, payment and performance bonds, contracts executed by Operating Agent and warranties applicable to the NWRRDS. 7.1.11. Costs and expenses associated with claims made by consultants or contractors. 1.3 7.2. Design and Construction Costs shall also include the following indirect costs incurred by the Operating Agent in performance of Design and Construction Work-. fringe benefit costs for labor and additional equipment costs. An administrative fee will be calculated and applied to each invoice to allow the Operating Agent to recover the cost of preparing and splitting invoices, sending out monthly statements, and collecting payments for the total Design and Construction Costs. S, OPERATIONS AND MAINTENANCE COSTS: 8.1. Except as set forth in Sections 8.3 and 8.4 below, to address Operations and Maintenance Costs, each Party will pay to MDwID a total usage rate (which may include a power charge if applicable to that Party) for each unit of water delivered from the Party's Source to the Party's Point of Entry. The total usage rate (which may include a power charge if applicable to that Party) will be calculated annually using the agreed-upon methodology as set forth in Exhibit C. 8.2. The Operating Agent shall provide, beginning with the year of the In-Service Date, the annual operations and Maintenance Costs no later than January 1st of each year for the subsequent fiscal year; provided, however, that a prorated amount will be provided for the first partial year and the estimated amount will be provided within seventy-five (75) days of the In-Service Date. 8.3. For any Operations and Maintenance Costs approved in advance by the NWRRDS Committee for the subsequent fiscal year in accordance with Section 6.8, the Parties shall pay for such amounts directly in accordance with their allocation percentages as set forth in Exhibit B (provided that the work is for a portion of the NwRRDS utilized by a Party). 8.4. For any emergency/urgent Operations and Maintenance Costs on the NwRRDS in excess of$250,000, the Parties shall pay Operating Agent as described in Section 9.3. 8.5. The Operating Agent will be responsible for reading meters monthly, keeping a record of actual deliveries to each Party and reconciling the delivered quantity of water to the requested annual delivery by the individual Parties at the end of each calendar year. All associated costs for reading, testing, and replacement of the meters will be incorporated into the annual calculation of operation and maintenance costs. The initial base usage rate is set forth in Exhibit C. 14 9. PAYMENT: 9.1. Design and Construction Costs 9.1.1. Each Party shall pay its share of the Design and Construction Costs on the basis set forth in Exhibit B. 9.1.2. within thirty (30) days of the Effective Date of this Agreement, each Party (other than MDWID) shall establish an escrow capital account (each, an "Escrow Capital Account") to address payment of each Party's share of the Design and Construction Costs. MD,'L]LIID shall be a signatory on each Escrow Capital Account with authority to withdraw funds at its discretion. During design, each Escrow Capital Account shall maintain a balance sufficient to cover each Party's share of the design costs. 9.1.3. At least thirty (30) days prior to the commencement of a new construction or expansion phase for which a budget is provided and approved as set forth in Section 5.2.1.10, each Party shall establish a balance in its Escrow Capital Account at least equal to its estimated share of the Design and Construction Costs for the next construction or expansion phase and also sufficient to pay for all administrative fees of the Operating Agent for processing invoices and payments. 9.1.4. The Operating Agent shall pay Design and Construction Costs as they become due and shall draw from each Party's Escrow Capital Account funds to reimburse the Operating Agent for the Party's share of the Design and Construction Costs and Operating Agent's administrative fees. 9.1.5. The Operating Agent shall provide a monthly statement to each Party specifying expenditures for the prior month for that Party, and the distribution of these expenditures to each participating Party. 9.1.6. If a Party's Escrow Capital Account balance is insufficient to reimburse the Operating Agent for that Party's appropriate share of the Design and Construction Costs, the Operating Agent shall, in writing, notify the Party, and the Party shall, within three (3) calendar days, directly reimburse the Operating Agent any amount paid by the Operating Agent that exceeded the available funds in that Party's Escrow Capital Account. Amounts that are 15 owed shall accrue interest at the statutory interest rate set forth in A.R.S. § 44-1201. 9.1.7. Each Party shall pay one-third of the cost of software, software maintenance and support, staff time for accounts payable processing, accounts receivable invoicing, protect accounting, tracking and recording, payment withdrawals, reporting, and ACPI or Wire transfer. 9.2. Operations and Maintenance Costs. 9.2.1. Except for items set forth in Section 8.3 and 8.4, which shall be due and payable as described in those sections and below, Operating Agent shall bill Parties monthly in advance based upon the Parties' agreed upon delivery orders for the year divided by 12 months for Operations and Maintenance costs as described in Section 8. Payments shall be due thirty (30) days from the date of the invoice. Should there be variations between the annual delivery order and actual deliveries to a Party for any reason other than system interruption, the Party will pay for their agreed upon unit cost. If there is a variation between the annual delivery order and actual deliveries due to system interruption, the amount the Party shall pay for the annual delivery order will be reduced to the amount actually delivered. Adjustments for actual expenses incurred for each year shall be reflected in a subsequent invoice submitted after the final annual delivery. 9.2.2. Parties shall pay such costs to the Operating Agent within thirty (30) days of the date of invoice. Disputed or undisputed invoices which are not paid when due shall thereafter bear an interest charge at the statutory interest rate set forth in A.R.S. § 44-1201. Any payment received shall first be applied to any interest charges owed and then to any amounts owed. 9.2.3. In the event any portion of any invoice is disputed, the disputed amount shall be paid under protest when due and, if payment is so made, shall be accompanied by a written statement indicating the basis for the protest. If the Parties cannot resolve the dispute, any Party to the dispute may submit the dispute to resolution pursuant to Section 17. 9.2.4. If any amounts due for Operations and Maintenance Costs are not paid within 60 days of the date of invoice, Operating Agent may interrupt access of the defaulting Party's water to the NWRRDS until the payment is made. 9.3. For projects subject to Section 8.4 above, within thirty(30) days of a request by Operating Agent, each Party shall establish a balance in its Escrow Capital Account at least equal to its estimated share of the project subject to Section 8.4 and also a sufficient amount to pay for all administrative fees of the Operating Agent for processing invoices and payments. 16 9.4. Each Party shall be responsible for its own debt financing and debt service in relation to payments for its Allocated Capacity and other obligations under this Agreement. This Agreement will serve as the basis for each Party's ability to acquire financing in accordance with its contractual rights to capacity in the NWRRDS. 10, TRANSPORTATION OF 'LATER: 10.1. Each Party will have the authority to transport water in the volumes set forth in Exhibit B through the NWRPDS from. that Party's Source to that Party's Point of Entry. 10.2. In consideration for the right to transport water as described in this Section 10 and the other considerations specified in this Agreement, each Party shall pay to NIDWID the amounts described in Exhibit C and Sections S and 9. 11. DELIVERY; REDUCTION IN CAPACITY 11.1. Parties shall schedule delivery of water, under a baseload scenario and without peaking, to the NWRRDS with the Operating Agent prior to November 1 of each calendar year and in accordance with operating procedures to be established by the operating Agent. 11.2. If the Operating Capacity of the N S is reduced for any reason, and the reduced capacity is insufficient to accommodate all of the needs of the Parties, then the reduced Operating Capacity will be reapportioned to the affected Parties based on'the percentage of each Party's Allocated Capacity. 12, WATER MEASUREMENT, ACCOUNTING AND REPORTING: 12.1. The Operating Agent shall base its accounting for water delivered to the NWRRDS on actual measurements, subject to Sections 12.4 and 12.5 below. 12.2. The operating Agent shall install and maintain a flow measurement system at each Party's Point of Entry. 12.3. All wells will be metered in accordance with ADWR requirements. 12.4. The operating Agent shall determine system losses in the N S. Losses in the NWRRDS shall be calculated using generally accepted engineering practices. 12.5. If the flow measurement system becomes unusable for any reason, the Operating Agent will base its calculations of water entering the NWRRDS on the amount of water for delivery to the NWRRDS determined to be included in water measurements at other measuring points upstream of the NWRRDS during the period the NWRRDS flow measurement system was not usable. Marana will deliver water production measurements to the Operating Agent pursuant to a separate agreement. 17 12.6. The Operating Agent shall prepare a monthly water accounting report of water for each Party. The report shall include the daily amount of water received at the Party's Source(s) and the losses calculated as described in this Section. 12.7. The water accounting reports prepared pursuant to this Section shall be retained by the Operating Agent for at least three (3) years and be made available for Parties' inspection at least quarterly. 12.8. Each Party will be provided all ADWR water accounting information prior to February 281h of each year for the previous calendar year. 13. WATER QUALITY: 13.1. The Operating Agent will be responsible for compliance with all water quality regulations for the water delivered from the NWRRDS to each Party's designated Point of Entry. 13.2. The well owner will notify each Party's Operator in Direct Responsible Charge (Operator of Record) within 24 hours of any exceedance of a water quality standard at any of the wells delivering water to the NWRRDS. 13.3. Each Party waives any claim on its own behalf against the other Parties for water quality degradation arising from commingling of water. In no event shall the Operating Agent be liable for water quality degradation resulting from the transmission of water or other use of the NWRRDS. 13.4. All Parties will Work together to address contaminants of emerging concern, and if a new regulation results in the NWRRDS water no longer meeting primary drinking water quality standards, the Parties will work in good faith to arrive at a solution to meet primary drinking water standards. If new treatment processes are required, the Parties will be responsible for paying proportional costs associated With the construction, operation, and maintenance of the treatment facility. 14. AUTHORIZATIONS AND APPROVALS: 14.1. Each Party shall be responsible for obtaining, at its own expense, any authorizations and approvals required for its participation in the construction, reconstruction, operation, maintenance or use of the NWRRDS or its performance under this Agreement, and each Party shall keep the Operating Agent and Parties informed of its applications therefor and authorizations issued in connection therewith. 14.2. A Party's failure to make sufficient appropriations to contribute its share of costs in accordance with this agreement will be treated as a notice of termination by that Party. 18 1 S. INSURANCE 15.1. Unless otherwise specified by the NWRRDS Committee pursuant to Section 15.2, the operating Agent shall require any party performing Design and Construction Work or operations and Maintenance Work to procure and maintain in force during the performance of Design and Construction Work or Operations and Maintenance Work, as applicable, all required Construction Insurance or operating Insurance as set forth in Exhibit D and Exhibit E, respectively. Any required general liability policy required hereunder shall name the Parties as additional insureds. Proof of insurance satisfactory to the Operating Agent shall be submitted to the operating Agent before any Design and Construction Work or operations and Maintenance Work commences. 15.2. The NWRRDS Committee may, at any time, increase the policy limits and/or determine appropriate deductibles or retentions. Action by the NWRRDS Committee shall be by vote in accordance with Section 5. In the event the NWRRDS Committee is unable to agree upon any insurance matters, the Operating Agent, pending the resolution of such disagreement, may procure or cause to be procured, such policies of insurance as in its best judgment are necessary and required to protect the Parties. 15.3. MDWID, as the owner of the NWRRDS, shall include each Party as an additional insured on MDWID's Risk Management insurance policy during the term of this Agreement. 16. LIABILITY: 16.1. Except as provided in this Section 16 and subject to any right of indemnification provided in this Agreement, the costs of discharging all Third Party Liability imposed upon one or more of the Parties, for which payment is not made by Construction Insurance, operating Insurance, or other applicable insurance required by this Agreement, shall be allocated among the Parties pursuant to the allocations set forth in Exhibit B. 16.2. Any Party leasing or otherwise conveying an interest in its Allocated Capacity pursuant to Section 4.3 shall indemnify and hold harmless any Party not a party to the lease or other conveyance against any loss the non-contracting Party incurs as a result of complying with this Agreement in a manner that contradicts or conflicts with such lease or other conveyance. 16.3. Any Party leasing or otherwise conveying an interest in its Allocated Capacity shall 16.3.1. Remain liable for any and all obligations under this Agreement. 16.3.2. Indemnify and hold harmless all other Parties for losses resulting from actions or inactions of the party to which the Allocated Capacity is leased or otherwise conveyed. 19 16.3.3. Only request delivery to the Party's established delivery point or to a location that is within the infrastructure that the Party participated on the cost-share. 16.4. The Operating Agent, in its reasonable discretion as described in Section 5.3.2., may curtail or stop water flows through the NWRRD S at any time and shall not be liable to any Party or lessee or any other third party for claims or damage resulting from its decision to curtail or stop water flows through the NWRRDS. 16.5. The Operating Agent shall not be responsible for or required to replace water lost, misdirected or otherwise failing to reach a Party's Point of Entry. Each Party shall share in any deficiency resulting from such lost or misdirected water in proportion to the amount of each Party's Allocated Capacity at the time the deficiency accrued. 16.6. In the event any third party institutes an action against any Party(s) 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. 16.7. Any party withdrawing from this Agreement is responsible for financial impacts and damages attributable to its own conduct and actions even after the Party withdraws from the Agreement. 17. GOVERNING LAW; DISPUTES: 17.1. This Agreement shall be governed by the laws of the State of Arizona. 17.2. Any Party that brings a lawsuit against another Party or Parties for a dispute arising under this Agreement and that does not prevail, shall pay all fees and courts costs, including attorneys" fees, incurred by the other Party or Parties (as applicable) to this Agreement in,that lawsuit.,- 18. ACTIONS PENDING RESOLUTION OF DISPUTES: 15.1. Pending the resolution of a dispute pursuant to Section 17, the Operating Agent shall proceed with Resign and Construction work and/or Operations and Maintenance Work in a manner consistent with this Agreement and generally accepted accounting and engineering practices, and all Parties shall make the payments required to perform such Design and Construction work and/or Operations and Maintenance work in accordance with this Agreement. Amounts paid by the Parties pursuant to this Section 15 during the pendency of such dispute shall not be subject to refund except upon a final determination that the expenditures were not made in a manner consistent with this Agreement and generally accepted accounting and engineering practice. 20 19, FORCE MAJEUR.E EVENT 19.1. No Party shall be considered in default in the performance of any of its obligations under this Agreement (other than obligations of said Party to pay costs and expenses) when a failure of performance is due to a Force Majeure Event. 19.2. Any Party rendered unable to fulfill any of its obligations under this Agreement by reason of a Force Majeure Event shall give prompt written notice of such fact to the other Parties and shall exercise due diligence to overcome such Force Majeure Event. 20. BINDING OBLIGATIONS: 20.1. Except as described in Section 4.3, this Agreement may not be assigned or transferred by a Party, in whole or in part, without the prior consent of the other Parties. All of the obligations set forth in this Agreement shall bind the Parties and their successors and permitted assigns, and such obligations and all rights under this Agreement shall run with the Parties' interests in the NWRRDS. 21. NOTICES: 21.1. Except as set forth in Section 21.2, any 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: Town of oro Valley Water Utility: 11000 N. La Canada Dr. Oro Valley, Az 85737 Attn: Director of Oro Valley water Utility Town of Marana: Office of the Town Clerk 11555 W. Civic Center Dr. Marana, Az 8 5 6 5 3 Attn: Director of Town of Marana water Department Metropolitan Domestic Water Improvement District: 6265 N La Canada Drive Tucson Arizona, 85740 21 Attn: General Manager 21.2. Informal communications of a routine nature involving NYnZRDS Committee matters shall be made in such manner as the NWRRDS Committee shall arrange. 21.3. Any Party may, at any time, by notice to all other Parties, designate different or additional persons or different addresses for the giving of notices hereunder. 22. RELATIONSHIPS OF PARTIES: 22.1. Nothing herein contained shall be construed to create an association,joint venture, trust, or partnership among the Parties. Each Party shall be individually responsible for its own covenants, obligations and liabilities under this Agreement. 22.2. All rights of the Parties are several, not joint. No Party shall be under the control or direction of or shall be deemed to control another Party. Except as expressly provided in this Agreement, no Party shall have the right or power to bind another Party without its express written consent. 23. THIRD PARTY BENEFICIARIES: 23.1. 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. 24. WAIVER.* 24.1. The waiver by any Party hereto of any breach of any term, covenant or condition herein contained 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 herein contained. 25. BEADINGS: 25.1. Title and paragraph headings herein are for reference only and are not part of this Agreement. 26. ENTIRE AGREEMENT: 26.1. The terms, covenants and conditions of this Agreement constitute the entire Agreement among the Parties 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 all of the Parties. 22 TOWN OF MARANA TOWN OF ORO VALLEY Ed I onea, Mayor Dr. Satish Hiremath, Mayor Date: Date: ATTEST ATTEST Town Clerk Michael Standish, Town Clerk Date: Date: METROPoLITIAN DOMESTIC WATER IMPROVEMENT DISTRICT Judy Scrivener, Chair of the Board Date: ATTEST Clerk of the Board INTERGOVERNMENTAL AGREEMENT DETERMINATION 23 The foregoing intergovernmental agreement among the METROPOLITAN DOMESTIC WATER IMPROVEMENT DISTRICT, the TOWN OF MARANA, and the TOWN OF ORO VALLEY has been reviewed pursuant to A.R.S. § 11-952 by the undersigned, who have determined that it is in proper form and is within the powers and authority granted under the laws of the State of Arizona to the Party to this intergovernmental agreement represented by the undersigned. METROPOLITAN DOMESTIC WATER TOWN OF MARANA: IMPROVEMENT DISTRICT: John Hinderaker Frank Cassidy Legal Counsel Town Attorney Date: Date: TOWN OF ORO VALLEY: Tobin Sidles Ciro Valley Legal Services Director Date: 24 EXHIBIT A [MAPS OF SYSTEM] System Overview 25 EXHIBIT A [MAPS OF SYSTEM] Preliminary Concept Site Layout POINT OF ENTRY -------------------------------- r minar Concept Site Layout). ............t... LL € � z f r{ E ,. P.- r � 13 x ufw= fet Hypochlorite storage and feed system � ly x x [.Po—int Valve begins individual R R party responsibility) ( ( V 6 W,"" .,. 8 00 0 co ......... . ....... ------------- a� -------------------------- ----------------- ..................... �r 27 EXHIBIT B [ALLOCATED CAPACITY] Entity Allocated Capacity Allocated Capacity (Acre-Feet per Year) (Percentage of Total) MDWID 400 38.46% Oro Valley 400 38.46% Marana 2,400 23.08% Total 105400 100% 28 EXHIBIT C [SYSTEM AND DELIVERY CHARGES] The unit delivery cost for delivery of recovered CAP water through the NwRRDS is estimated based on the 50-Year operation, Maintenance, and Life Cycle Costs study (westLand Resources, Inc., 2016). Year 2025 NwRRDS Summa of Costs and Rates Description Average $IAF Average $IAF Annual Annual Oro Valley oro Valley &MDWID &MDwID Marana Marana Estimated Fixed Maintenance $3169000 $295,000 Costs Taxes(assumed at 4%) $12,640 $11,800 Total $328,640 $3061800 Allocation(AF) 109400 109400 C.1 Base Usage Rate $31.60 $29.50 C.2 Estimated Power Rate $88.88 $0 C.3 Estimated Chemical Rate $13.17 $13.17 Total Usage Rate $133.65 $42.67 C.1. Each Party will pay the operating Agent a base rate for each unit of CAP water allocated to each Party, currently estimated at $31.60 per acre-foot (oro Valley and MDwID) and $29.50 per acre-foot (Marana). This rate is established for base load capacity using the fixed annual maintenance costs as identified in the westLand study, excluding electrical, chemical, and replacement costs (oro Valley and MDwID) and excluding electrical, well maintenance, chemical, and replacement costs (Marana), divided by the total allocated capacity of 10,400 acre-feet per year. C.2. Each Party (excluding Marana)will pay the operating Agent a power charge for each acre-foot of CAP water delivered to the Point of Entry for each Party. The current power charge is estimated at $88.88 per acre-foot, and is included as a component of the total usage rate. The cost of energy supply is based upon the current rate agreement between TRICO Electric Cooperative, Inc. and MDwID divided by 8,000 acre-feet of allocated capacity per year. Power costs will be calculated annually. C.3. Each party will pay the operating Agent a chemical charge for each acre-foot of CAP water delivered to the Point of Entry for each Party. The current chemical charge is estimated at $13.17 per acre-foot, and is included as a component of the total usage rate. The cost of chemicals is estimated using the estimated annual cost of chemicals divided by the total allocated capacity of 10,400 acre-feet per year. Chemical costs will be calculated annually. The Operating Agent will be responsible for reading the meter and billing the Parties for water delivered. Payments due will be invoiced monthly by the operating Agent. The methodology outlined in this Exhibit C will serve as the mechanism by which costs will be determined. Estimated annual costs will be updated in accordance with this Agreement. 29 EXHIBIT D [CONSTRUCTION INSURANCE REQUIREMENTS] D.1. General Terms. CONTRACTOR shall not commence work under the Construction Agreement until CONTRACTOR (i) has obtained at its expense all insurance required and (ii) has given Operating Agent a Certificate of Liability Insurance evidencing the type, amount, coverage, effective dates and dates of expiration of the required policies and identifying Parties as additional insureds, loss payees and certificate holders, as applicable. The insurance policies shall be issued by an insurance company acceptable to the Operating Agent and lawfully authorized to do business in the State of Arizona. All insurance policies required, other than Worker's Compensation and Employer's Liability, shall name all Parties as additional insureds and loss payees, as applicable, on a primary, non-contributory basis, irrespective of any such insurance that all Parties might carry on its their own behalf. All insurance policies required shall provide that the policies will not be subject to cancellation, termination or modification except after thirty (30) days prior written notice to the Operating Agent and shall provide for waiver of subrogation against all Parties. Such required coverage shall remain in effect until the later of(i) final payment for the work under the Construction Agreement or (ii) termination of the Construction Agreement. D.2. Coverage. The CONTRACTOR shall purchase and maintain the following coverage during the term of the Construction Agreement: D.2.1. Commercial General Liability for claims of damage for bodily injury, accidental death, property damage, premises/operations (including fire, theft, vandalism, falsework, temporary buildings and debris removal), exp losion/col lapse, independent contractors, products/completed operations, contractual liability, personal injury and advertising liability and underground special hazards(including(i) injury to or destruction of wire, conduits, gas, water and petroleum pipes, electric, telephone, telegraph and signal cables, sewers, drains or any apparatus in connection therewith or any other matter, below the surface of the ground, arising from and during the use of mechanical equipment for the purpose of excavating or drilling or boring in streets or highways or otherwise; or injury to or destruction of property at any time resulting therefrom and (ii) liability arising out of collapse of or structural injury to any building, street or structure due to excavation, tunneling, pile driving, or coffeework, or moving, shoring, underpinning, raising or demolition of any building or structure or removal or rebuilding of any structural support thereof), on an occurrence basis with limits of liability not less than the following: General Aggregate $29000,000 Each Occurrence $110005000 Fire Damage(any one fire) $50,000 Medical Expenses(any one person) $5,000 D.2.1.1. Automobile Liability for any Auto, Combined Single Limit (per occurrence) with$2,000,000 limits; D.2.1.2. 'Worker's Compensation and Employer's Liability at the current Arizona statutory minimums; D.2.1.3. Excess or Umbrella Liability Insurance. In the event CONTRACTOR does not have coverage with the above minimum limits, CONTRACTOR may obtain such coverage through an Excess or Umbrella Liability Policy. 30 EXHIBIT E [OPERATING INSURANCE REQUIREMENTS] E.I. General Terms. At all times during the Term, the Operating Agent shall obtain and maintain, or cause to be obtained and maintained, Operating Insurance and shall pay all premiums with respect thereto as the same become due and payable. The Operating Insurance shall be provided and remain in effect for the Operation Period in annually(or other) renewable periods. E.2. Insurance Coverage. The Operating Agent shall obtain, pay for and maintain the insurance coverage listed below with respect to the performance of the Operation Services without any reimbursement obligation on the part of the Parties. The cost of the Operating Insurance is included in the base usage rate. E.I.L. Commercial General Liability for claims of damage for bodily injury, accidental death, property damage, prem isesloperations (including fire, theft, vandalism, falsework, temporary buildings and debris removal), explosion/co Ilapse, independent contractors, products/completed operations, contractual liability, personal injury and advertising liability and underground special hazards ('including (i) injury to or destruction of wire, conduits, gas, water and petroleum pipes, electric, telephone, telegraph and signal cables, sewers, drains or any apparatus in connection therewith or any other matter, below the surface of the ground, arising from and during the use of mechanical equipment for the purpose of excavating or drilling or boring in streets or highways or otherwise; or injury to or destruction of property at any time resulting therefrom and (ii) liability arising out of collapse of or structural injury to any building, street or structure due to excavation, tunneling, pile driving, or coffeework, or moving, shoring, underpinning, raising,or demolition of any building or structure or removal or rebuilding of any structural support thereof), on an occurrence basis with limits of liability not less than the following: General Aggregate $2,00o,00o Each Occurrence $I popo Fire Damage (any one fire) $509000 Medical Expenses (any one $5,000 person) E.2.2. Automobile Liability for any Auto, Combined Single Limit (per occurrence) with $2,000,000 limits; E.2.3. worker's Compensation and Employer's Liabilit at the current Arizona statutory minimums; E.2.4. Excess or Umbrella Liabi.lity Insurance. In the event Operating Agent does not have coverage with the above minimum limits, Operating Agent may obtain such coverage through an Excess or Umbrella Liability Policy. E.2.5. Operating Agent-owned E ui ment Insurance. Operating Agent-owned miscellaneous tools and equipment insurance covering physical damage to 31 owned, leased, rented, or borrowed equipment on the jobsite, including rental charges. E.3. Additional Insureds. The operating Agent shall name the Parties and their officers, officials, and employees, as additional insureds (the "Additional Insureds") on all policies required under Appendix E (other than with respect to the required workers' compensation and employer's liability coverage and operating Agent-owned equipment insurance). The operating Agent shall waive the subrogation rights of its various insurance carriers in favor of the Parties for all policies required under Section E.2 of this Appendix E. EA. Insurance Certificates. Insurance, and any renewal thereof, shall be evidenced by certificates of insurance issued or countersigned by a duly authorized representative of the issuer and delivered to the operating Agent in accordance with Section 15 (Insurance) of this Agreement. The certificates of insurance shall provide for 60 days' written notice to the operating Agent of cancellation, non-renewal or reduction in limits by the insurance company, except that 10 days' notice shall be provided in the event of nonpayment of premium. E.5. Non-Recourse Provision. All insurance policies shall provide that the insurers shall have no recourse against the Additional Insureds for payment of any premium or assessment and shall contain a severability of interest provision in regard to the Parties' liability policies. E.6. Deductibles and Self Insurance Retentions. Any of the policies of operating Insurance may provide that the amount payable in the event of any loss shall be reduced by a deductible amount to be paid by the operating Agent, which shall not exceed $100,000 unless otherwise approved in writing by the operating Agent. Alternatively, any of the policies of operating Insurance may provide for a self-insured retention by the Operating Agent in an amount not to exceed $100,000 unless otherwise approved in writing by the operating Agent. The operating Agent shall be a co-insurer to the extent of the amount deducted from the insurance monies paid in the event of any loss, or the amount of any self-insured. retention, and such deductible or self-insured retention amount shall be included as part of the insurance payment(s). Such deductibles and self- insured elfinsured retentions shall be in accordance with those that are commercially available. The cost of the applied deductible or retention shall be paid by the Parties. E.7. 5pecific Provisions for Commercial General Liability Insurance. Commercial general liability insurance, as required under subsection E.L I of this Appendix E, shall include premises-operations, blanket contractual, products, completed operations, personal injury and advertising injury, explosion, collapse, underground hazards, broad form property damage including completed operations, and independent contractors coverages. E.S. S ecific Provisions for Workers' Compensation Covera e. workers' compensation insurance shall be in accordance with the requirements of the laws of the State of Arizona, as amended from time to time. The required workers' compensation insurance shall include other states' coverage, voluntary compensation coverage, and federal longshoreman and harbor workers coverage. 32 E.9. Changes in Insurance Covera e. The operating Agent shall use.its best efforts to obtain such additional insurance as the Parties may request from time to time, and the costs of such additional insurance shall be a pass through cost to the Parties. E.10. Qualifications of Insurers. The operating Agent is required to obtain the insurance set forth herein with insurance companies that carry a Best's "A-VII" or equivalent rating. In addition, insurance may not be obtained or maintained with insurers that are prohibited from conducting business in the State of Arizona. 33 RESOLUTION NO. (R)17-14 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, AUTHORIZING AND APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE METROPOLITAN DOMESTIC WATER IMPROVEMENT DISTRICT THE, TOWN OF MARANA AND THE TOWN OF ORO VALLEY RELATING TO THE PARTNERSHIP FOR THE DESIGN, CONSTRUCTION, MANAGEMENT AND OPERATION AND MAINTENANCE OF THE NORTHWEST RECHARGE, RECOVERY AND DELIVERY SYSTEM WHEREAS, pLi scant to ARS § 11-952, the Town of oro Valley is authorized to enter Intergovernmental Agreements for jo int and cooperative action With other public agencies; and WHEREAS, PIWS pant to ARS § 9-511, et seq., the Town has the requisite statutory authority to acquire, own and maintain a Water utility for the benefit of the landowners Within and the Without the Town's corporate boundaries; and NVUE REAS, The Town of oro Valley Water Utility desires to recover the Central Arizona Project (CAP) Water stored underground at the Lower Santa Cruz Replenishment Project, Avra Valley Recharge Project and BKW Farms Ground Water Savings Facility, and to deliver the recovered Water to the NorthWest Recharge, Recovery and Delivery System (NWRRDS), and then transport the Water from the NWRRDS to the oro Valley Water Service Area; and WHEREAS, it is in the best interest of the Town to enter into the proposed Intergovernme nta I Agreement With The Metropolitan Domestic Water Improvement District and The Town of Marana to set forth the terns and conditions of the agreement. NOW, THEREFORE, BE IT RESOLVE,D by the Mayos~and Council of the Town of oro Valley, Arizona, that: SECTION 1. The Intergovernmental Agreement, attached hereto as Exhibit "A" and incorporated herein by this reference, between the Town of oro Valley and The Metropolitan Domestic Water Improvement District and The Town of Marana regarding the delivery of the Town's CAP Water is hereby authorized and approved. SECTION 2. The Mayor, the Water Utility Director and other administrative officials are hereby authorized to take such steps as necessary to execute and implement the terms of the agreement. PASSED AND ADOPTED by the Mayor and Town Council of the Town of oro Valley, Arizona, this 5ri' day of April, 2017. TOWN OF ORO VALLEY Dr. Satish 1. Hirerr�ath, Mayor ATTEST: APPROVED r, RM: aaw� , N ichae Standish, Yown Clerk Tobin Sidles Legal Services Director F Date: Date: EXHIBIT "A"