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HomeMy WebLinkAbout04/03/2007 Blue Sheet Water Services Consulting Agreement TOWN COUNCIL MEETING INFORMATION TOWN OF MARANA MEETING DATE: April 3, 2007 AGENDA ITEM: 1.5 TO: MAYOR AND COUNCIL FROM: Frank Cassidy, Town Attorney SUBJECT: Resolution No. 2007-51: Relating to Water; approving and au- thorizing the Mayor to execute a Water Services Consulting Agreement with Southwest Desert Water Solutions, Inc., to assist the Town in acquiring needed water resources. DISCUSSION This consulting agreement is presented to the Council in connection with one of the water re- source alternatives discussed with the Town Council over the past few months in executive ses- sion. This agreement sets the general parameters for the Town's obligations relative to the ac- quisition of this particular confidential water resource alternative. This agreement would provide for the Town to place up to $200,000 in escrow for the confidential water resources in question, provided that the Town will have a feasibility period of at least 120 days during which it may back out of the acquisition at no cost. If confidential water resources are acquired pursuant to this agreement, the Town will pay the consultants $300 per acre-foot of water added to the Town's assured water supply inventory. RECOMMENDA TION Staff recommends adoption of Resolution No. 2007-51, approving and authorizing the execution of the consulting agreement with Southwest Desert Water Solutions, Inc. A TT ACHMENT(S) Consulting Agreement SUGGESTED MOTION I move to adopt Resolution No. 2007-51. {00004378.DOC /} FJC/cds 3/26/07 -.'"._."~-"'--"'--"""""""'__~.""'_","~~_~.c,..~,..,......, MARANA RESOLUTION NO. 2007-51 RELATING TO WATER; APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A WATER SERVICES CONSULTING AGREEMENT WITH SOUTHWEST DESERT WATER SOLUTIONS, INC., TO ASSIST THE TOWN IN ACQUIRING NEEDED WATER RESOURCES. WHEREAS the Mayor and Council desire to acquire a confidential water resource alterna- tive; and WHEREAS the Mayor and Council ofthe Town of Marana feel it is in the best interests of the public to execute a water services consulting agreement. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, that the water services consulting agreement between the Town of Maran a and Southwest Desert Water Solutions, Inc., attached to and incorporated by this reference in this resolution as Exhibit A is hereby approved, and the Mayor is hereby authorized to execute it for and on behalf of the Town of Marana. IT IS FURTHER RESOLVED that the Town's Manager and staff are hereby directed and au- thorized to undertake all other and further tasks required or beneficial to carry out the terms, obliga- tions, and objectives ofthe water services consulting agreement. PASSED and ADOPTED by the Mayor and Council ofthe Town of Marana, Arizona, this 3rd day of April, 2007. Mayor Ed Honea ATTEST: Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney {00004377.DOC /} FJC.'cds 3/26/07 --_......-...--....-~_o~_~.._...._.,~_""""-....""'_____~_...~,~,~"'_.,_,,,.,,..,"~, _"'. TITUS, BRUECKNER & BERRY DRAFT March 20, 2007 WATER SERVICES CONSULTING AGREEMENT This Agreement is made and entered into this _day of April, 2007 by and between the TOWN OF MARANA, an Arizona municipal corporation ("TOWN"), and Southwest Desert Water Solutions, Inc., an Arizona Corporation ("SDWS"). RECITALS A. The President of SDWS, Leonard Dueker, has presented confidential information about particular permanent water resources that can be made available to TOWN with the assistance of SDWS as more particularly described in the "Real Water For TOM Report" dated September 25, 2006, prepared by DCI, Inc. (the "CONFIDENTIAL WATER RESOURCES"). B. TOWN desires to retain SDWS to provide the following consulting services in connection with the CONFIDENTIAL WATER RESOURCES: 1. Assisting in securing an Assured Water Supply for the TOWN; 2. Assisting in securing approvals for newly acquired Assured Water Supplies pursuant to Arizona Revised Statutes and regional regulatory agencies; and 3. Assisting in amending the TOWN'S Assured Water Supply Provider Designation to include new water supplies acquired by SDWS on behalf of the TOWN. C. SDWS desires to provide such consulting services on the terms and conditions set forth in this Agreement. NOW, THEREFORE, the parties hereto agree as follows: 1. Scope of Agreement. SDWS shall use reasonable efforts in connection with providing consulting services under this Agreement, to the extent reasonably requested by TOWN, by assisting the TOWN in taking the steps necessary to qualify the CONFIDENTIAL WATER RESOURCES as an Assured Water Supply to include all of the following: a. Assisting the TOWN in obtaining a binding agreement that: 1. provides the TOWN the rights necessary to secure the CONFIDENTIAL WATER RESOURCES, {00004369.DOC I} SDWS/MARANA AGREEMENT - 1 - 3/20/20074:40 PM 11. requires the TOWN to deposit no more than $200,000 into escrow, and 111. grants the TOWN a feasibility period of at least 120 days during which the TOWN may cancel the agreement for any reason and receive a full refund of its escrow deposit. b. Assisting the TOWN in securing the CONFIDENTIAL WATER RESOURCES that will meet the requirements of an Assured Water Supply pursuant to Arizona Revised Statutes and the Arizona Groundwater Management Code. c. Assisting the TOWN in obtaining an approval of an application to amend the TOWN's designation as an Assured Water Provider, including review and approval, if needed, from both the Arizona Department of Water Resources and the Central Arizona Water Conservation District. 2. Term of Agreement. This Agreement shall commence as of the date hereof, and shall expire 30 months following the approval of this Agreement by the TOWN. Thereafter the term of this Agreement may be extended by the mutual written consent of the TOWN and SDWS. 3. Fee Structure. a. SDWS shall be compensated upon the earlier to occur of the following: (i) the TOWN's amended Assured Water Supply Provider Designation has been approved by the Arizona Department of Water Resources ("ADWR") to include the CONFIDENTIAL WATER RESOURCES acquired by the TOWN with the assistance of SDWS; or (ii) the Town's sale or exchange of the CONFIDENTIAL WATER RESOURCES acquired by the TOWN with the assistance of SDWS to another political subdivision (each, a "Compensation Event"). Within 30 days following a Compensation Event, the TOWN shall pay to SDWS, in cash or certified funds, compensation equal to the number of acre feet of CONFIDENTIAL WATER RESOURCES acquired by the Town with the assistance of SDWS for the benefit of the TOWN or sold or exchanged by the TOWN to another political subdivision, which number of acre feet is then multiplied by $300 per acre foot (e.g., 1,000 a/f @$300 per a/f = $300,000). b. With the prior written approval of the TOWN's Utilities Director, which consent shall not be unreasonably withheld, SDWS shall be authorized to enter into consulting agreements and/or retain various professionals in connection with this project, including but not limited to, legal, engineering, hydrogeology, environmental, real estate and other consultants and experts. The TOWN shall reimburse SDWS within 30 days following written request, for only actual fees and costs billed to SDWS by such professionals and consultants. The reimbursement of any {00004369.DOC I} SDWS/MARANA AGREEMENT - 2 - 3/20/20074:40 PM such expenses shall be in addition to, and not credited against, any other compensation that may be earned by SDWS pursuant to Section 3(a) above and shall be payable regardless of whether a Compensation Event is achieved. c. The TOWN shall bear and be responsible for all costs and expenses associated with the purchase price, transportation and delivery to the TOWN and use by the TOWN of any water from the CONFIDENTIAL WATER RESOURCES acquired by the TOWN with the assistance of SDWS, as well as any and all other expenses associated with the purification, treatment, or storage by recharge to the aquifer of any CONFIDENTIAL WATER RESOURCES to comply with all applicable federal, state, local, and municipal statutes and regulatory standards. The TOWN shall be responsible for all fees, costs and expenses, direct or indirect, related to securing an amendment to the Assured Water Supply Provider Designation. 4. Reporting. During the term of this Agreement SDWS shall report to the TOWN's Utilities Director, Brad DeSpain, or his designee, for coordination and approval of services described in this Agreement. 5. Other Employment. SDWS, its agents and employees, may be engaged by a third party to perform consulting or other services of any nature and description, including, but not limited to, services similar to those rendered pursuant to this Agreement. 6. Commitment to Purchase. During the term of this Agreement, the TOWN agrees that it shall fully cooperate with SDWS in securing an amendment to the Assured Water Supply Provider Designation by ADWR for the CONFIDENTIAL WATER RESOURCES acquired by the TOWN with the assistance of SDWS. Except as set forth in the following sentence and provided that SDWS has performed its obligations under this Agreement, the TOWN shall be immediately obligated to pay to SDWS an amount equal to $300 per acre foot multiplied by the amount of water from the CONFIDENTIAL WATER RESOURCES that has been made available to the TOWN for acquisition or purchase if either: (i) the TOWN does not accept or acquire the CONFIDENTIAL WATER RESOURCES for any reason or (ii) the TOWN's Assured Water Supply Provider Designation is not amended to include the CONFIDENTIAL WATER RESOURCES because the TOWN has acquired an additional water supply from another source. Notwithstanding the foregoing sentence, the TOWN shall not be obligated to pay SDWS if the TOWN does not acquire the CONFIDENTIAL WATER RESOURCES because the acquisition costs for such CONFIDENTIAL WATER RESOURCES exceeded 105% of the estimated land acquisition costs (which the parties hereto acknowledge is $54,530,000) as set forth in the "Real Water For TOM Report" dated September 25, 2006, prepared by DCI, Inc. {00004369.DOC I} SDWS/MARANA AGREEMENT - 3 - 3/20/20074:40 PM 7. Limitation on Liability. While SDWS has agreed to use reasonable efforts to assist in the securing of CONFIDENTIAL WATER RESOURCES for the TOWN, the TOWN acknowledges and agrees that SDWS provides no assurances or guarantees as to the amount of the CONFIDENTIAL WATER RESOURCES, if any, that may be made available to the TOWN. In no event shall SDWS be liable to the TOWN for any damages, including without limitation, consequential, incidental, punitive or exemplary damages incurred by the TOWN or any third party. Any fees or costs paid by the TOWN to SDWS pursuant to the terms of this Agreement which are related, directly or indirectly, to the CONFIDENTIAL WATER RESOURCES are not reimbursable by SDWS to the TOWN and the TOWN hereby releases SDWS from any duty or obligation to reimburse the TOWN for any such fees or expenses. 8. Independent Contractor. This Agreement does not constitute an employment agreement between TOWN and SDWS or any SDWS employees, agents, representatives, contractors or professionals retained by SDWS. It is the parties' intention that SDWS, its employees, agents, representatives, contractors and professionals retained by SDWS shall be independent contractors and not employees of the TOWN. It is the parties' further intention that any employees, agents, representatives, contractors and professionals hired by SDWS shall be solely the employees, agents, representatives, contractors and professionals, respectively, of SDWS and shall not be employees, agents, representatives, contractors and professionals of the TOWN. 9. Confidentiality. To protect the TOWN from third-party bidders and other circumstances that could increase the price of the CONFIDENTIAL WATER RESOURCES, no information about the CONFIDENTIAL WATER RESOURCES shall be released to the public until the Town's execution of the binding agreement referenced in Section l(a) of this Agreement or termination of this Agreement. 10. Miscellaneous. a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona. b. Amendment and Waiver. No amendment, waiver or modification of this Agreement shall be valid unless in writing and duly executed by the party to be charged therewith. Waiver by either party hereto of any breach or default by the other party of any of the terms and provisions of this Agreement shall not operate as a waiver of any other breach or default, whether similar or to different from the breach or default waived. c. Severability. All agreements, provisions, representations, warranties and covenants contained herein are severable, and in the event that anyone or more of them shall be held to be invalid, illegal or unenforceable in any respect by any court of competent jurisdiction, the validity, legality and {00004369.00c I} SDWS/MARANA AGREEMENT - 4 - 3/20/20074:40 PM enforceability of the remaining provisions contained herein shall not in any way be affected hereby, and this Agreement shall be interpreted as if such invalid, illegal or unenforceable agreements, provisions or covenants were not contained herein. d. Gehder. Whenever the context required, the masculine shall include the feminine and neuter. e. Entire Agreement. This Agreement constitutes and embodies the full and complete understanding and agreement of the parties hereto provided, and supersedes all prior understandings or agreements, whether oral or in writing. f. Arbitration. All controversies which may arise between the parties concerning any transaction or the construction, performance, or breach of this Agreement or any other agreement between the parties, whether entered into prior, on or subsequent to the date hereof, shall be determined pursuant to the arbitration laws of the State of Arizona, before the American Arbitration Association and in accordance with its rules then in effect. The award of the arbitrators or the majority of the arbitrators, shall be final and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction. All parties hereto submit to the jurisdiction of the Superior Court of Pima County, Arizona and agree that the arbitration hearing shall be held in Pima County, Arizona. g. Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding on and enforceable by the parties and their respective successors and permitted assigns, as the case may be. Neither party shall have the right to assign its rights hereunder, without the prior written consent of the other party. h. Execution and Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument. . 1. Attorneys' Fees. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other party arising out of this Agreement, then in that event the prevailing party shall be entitled to have and recover from the other party all costs and expenses of the action or suit, including reasonable attorneys' fees and costs. {00004369.DOC I} SDWS/MARANA AGREEMENT - 5 - 3/20/20074:40 PM IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first written above. SOUTHWEST DESERT WATER SOLUTIONS, INC., an Arizona Corporation BY: Leonard Dueker, President TOWN OF MARANA an Arizona Municipal Corporation By: Mayor, Town of Maran a ATTEST: APPROVED AS TO FORM: Jocelyn Bronson, Town Clerk Frank Cassidy, Town Attorney {00004369.DOC I} SDWS/MARANA AGREEMENT - 6 - 3/20/20074:40 PM ._-'-~-'~""-'-"""'~--"""""'''''''''''''.''''"''~"'''~-"~~~~'''~-''-'-'