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HomeMy WebLinkAboutResolution 2024-030 Approving and authorizing the Mayor to Sign Reconcilliation Agreements for Mandarina Water and Sewer Facilities MARANA RESOLUTION NO. 2024-030 RELATING TO WATER AND WASTEWATER; APPROVING AND AUTHORIZING THE MAYOR TO SIGN RECONCILIATION AGREEMENTS FOR CONSTRUCTION OF WATER AND SEWER FACILITIES UNDER PRIVATE CONTRACT WITH MANDARINA HOLDINGS, LLC FOR THE MANDARINA DEVELOPMENT WHEREAS the Town of Marana adopted Resolution No. 2021-11 on February 2, 2021,approving and authorizing the Mayor to sign agreements entitled"Town of Marana Agreement for Construction of Water Facilities Under Private Contract - Mandarina Offsite Water," recorded in the office of the Recorder of Pima County, Arizona, on February 5,2021,at Sequence No. 20210360145,and the"Town of Marana Agreement for Construction of Water Facilities Under Private Contract - Mandarina Offsite Sewer," recorded in the office of the Recorder of Pima County, Arizona, on February 5, 2021, at Sequence No. 20210360146; and WHEREAS the Town anticipates accepting the water and sewer infrastructure construction work in the near future; and WHEREAS the developer of Mandarina is now satisfied with the actual cost of the work and does not anticipate the cost will change even though the work has not yet been fully accepted by the Town; and WHEREAS the developer has submitted to the Town a revised equivalent demand unit (EDU) count for the development; and WHEREAS the actual cost of the water infrastructure construction work pursuant to the Mandarina Water Agreement was higher than contemplated when the Mandarina Water Agreement was entered into, and the actual cost of the sewer infrastructure construction work pursuant to the Mandarina Sewer Agreement was lower than the contemplated when the Mandarina Sewer Agreement was entered into; and WHEREAS Town staff has negotiated reconciliation agreements for construction of water facilities under private contract for the Mandarina offsite water and sewer infrastructure to increase the oversizing recovery charge payable pursuant to the terms of the Mandarina Water Agreement and to decrease the oversizing recovery charge payable pursuant to the terms of the Mandarina Sewer Agreement to reflect the actual cost of the water and sewer infrastructure construction work and the revised EDU count; and - 1 - Resolution No.2024-030 WHEREAS the Mayor and Council find that entering into the reconciliation agreements is in the best interests of the Town and its citizens. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, AS FOLLOWS: the Town of Marana Reconciliation Agreement for Construction of Water Facilities Under Private Contract - Mandarina Offsite Water and the Town of Marana Reconciliation Agreement for Construction of Sewer Facilities Under Private Contract - Mandarina Offsite Sewer, substantially in the same form attached to and incorporated by this reference in this resolution as Exhibits A and B, respectively, are hereby approved, the Mayor is hereby authorized and directed to sign them for and on behalf of the Town of Marana, and the Towri 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 objectives of the agreements. PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 2nd day of April, 2024. Mayor Ed Honea AT APPR D AS TO FORM: David L. Udall,Town Clerk Ja airall, Town Attorney 146 4. MARANA AZ. ESTABLISHED 197 7 -2- Resolution No.2024-030 20241030244 • AG 04/12/2024 10:16:43 AM Page: 1 of 3 Gabriella Cazares-Kelly Recorder OFFICIAL RECORDS OF PIMA COUNTY, AZ 111I i RIVIIiikeikV1.1011TIE 111 TOWN OF MARANA RECONCILIATION AGREEMENT FOR CONSTRUCTION OF WATER FACILITIES UNDER PRIVATE CONTRACT Mandarina Offsite Water THIS RECONCILIATION AGREEMENT(this "Reconciliation Agreement")is entered into by and between the TOWN OF MARANA,an Arizona municipal corporation (the "Town"), and MANDARINA HOLDINGS,LLC, an Arizona limited liability company (the "Developer"). The Town and the Devel- oper are sometimes collectively referred to as the "Parties,"each of which is sometimes individually referred to as a"Party." RECITALS A. The Parties entered into an agreement entitled "Town of Marana Agreement for Con- struction of Water Facilities under Private Contract— Mandarina Offsite Water," recorded in the office of the Recorder of Pima County, Arizona, on February 5, 2021, at Sequence No. 20210360145 (the "Mandarina Water Agreement"). B. Among other things, pursuant to Marana Town Code section 14-4-3 (C), paragraph 1.8 of the Mandarina Water Agreement established an "oversizing recovery charge" of$499.50 per equivalent demand unit ("EDU") based on the Developer's then-anticipated costs of the "Work," as that term is defined in paragraph 1.1 of the Mandarina Water Agreement, and based on the anticipated EDU count. C. As set forth in Recital H of the Mandarina Water Agreement,the anticipated cost of the Work at that time was $1,363,643.00. D. Pursuant to paragraph 1.8 of the Mandarina Water Agreement, the number of antici- pated EDU connections on the"Subject Property,"as that term is defined in Recital B of the Man- darina Water Agreement, to the "Developer-Installed Facility," as defined in paragraph 1.1 of the Mandarina Water Agreement, was at that time 2,005 EDUs. Also pursuant to paragraph 1.8, the Parties determined that the Developer-Installed Facility would have "sufficient capacity to serve an additional 725 EDUs as a result of and upon completion of the Work and after connection to" the 2,005 EDUs on the Subject Property. E. Paragraph 1.8.6 of the Mandarina Water Agreement states that final construction quan- tities and amounts will be provided after construction of the Developer-Installed Facility is com- pleted; and paragraph 1.8.5 provides that if"the actual pipe capacity and/or the actual number of lots and size of meters used to develop the Subject Property results in a different EDU count, the number of EDUs required to pay the oversizing recovery charge" shall be adjusted and the over- sizing recovery charge shall be re-calculated accordingly. - 1 - 2/1/2024 F. The Town anticipates formally accepting the Work in the near future. The Developer is now satisfied with the actual cost of the Work and does not anticipate the actual cost of the Work will change even though the Work has not yet been formally accepted by the Town. G. The Developer has also submitted to the Town a revised EDU count for the Subject Property consisting of EDUs now currently planned for the development. H. The Parties at this time desire to reconcile the oversizing recovery charge payable to the Developer pursuant to the terms of the Mandarina Water Agreement to reflect the actual cost of the Work and the revised EDU count. A GREEMENT Now, THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth in the Mandarina Water Agreement and in this Reconciliation Agreement, the Parties hereby agree as follows: 1.Amendment of oversizing recovery charge. The Parties agree and acknowledge that the De- veloper's actual cost of completing the Work was $1,423,575.00 and that the EDU count for the Subject Property now consists of 1,924 EDUs. As a result, the number of additional EDUs that can reasonably be served by the oversized facility has increased to 806 EDUs. Accordingly, pur- suant to Marana Town Code section 14-4-3 (C), the oversizing recovery charge established under paragraph 1.8 of the Mandarina Water Agreement is hereby modified and increased to $521.46 per EDU for connections whose capacity is made possible as a result of the Work. 2. No further amendments to the oversizing recovery charge. In light of Recitals F and G, the Parties hereby agree that that no further amendments to the Mandarina Water Agreement shall be made related to the actual cost of the Work or to the oversizing recovery charge amount. 3. Confirmation of remaining terms of the Mandarina Water Agreement. Except as expressly modified by this Reconciliation Agreement, all other provisions and limitations set forth in the Mandarina Water Agreement, including without limitation those pertaining to the oversizing re- covery charge,remain in place and are unchanged by this Reconciliation Agreement. 4. Cancellation for conflict of interest. This Reconciliation Agreement is subject to A.R.S. § 38-511, which provides for cancellation in certain instances involving conflict of interest. [Signature Page Follows.] - 2 - 2/1/2024 . • IN WITNESS WHEREOF, the Parties have executed this Reconciliation Agreement as of the last date set forth below their respective signatures. THE"TowN": The "Developer": TOWN OF MARANA, an Arizona municipal MANDARINA HOLDINGS,LLC, an Arizona corporation limited liability company _ By: KDL INVESTMENTS, LLC, an Arizona??4( 771„..4_.„ limited liability company, its sole By: M ber Ed Hona.,,Mayor Date: 61/ 7/ Z62 4 By, a ag ATTEST: — Date: 111 David L. Udall, Town Clerk APt41, AS TO FORM: J. airall, own Attorney ipr S . e of Arizona ) ss County of I�Af1 op .) I The foregoing instrument was acknowledged before me on 02-1 i.5- g.02'/ by Karl N. Huish,the Manager of KDL INVESTMENTS,LLC,an Arizona limited liability company,the sole Member of MANDARINA HOLDINGS,LLC,an Arizona limited liability company,on behalf of MAN- DARINA HOLDINGS,LLC. (Seal) oei/14,063z.c . 'S, MEGAN LANDOWSKI 1 Notary Public '' . Commission Number 653978 Notary Public `0�''r* Expires:July 30,2027 k M: Coun - 3 - 2/1/2024 20241030243 AG 04/12/2024 10:16:43 AM Page: 1 of 3 Gabriella Caaares-Kelly Recorder OFFICIAL, RECORDS OF PIMA COUNTY, AZ Iilf P.,KVA Ind 16 !.+t w101i4+P WI I 1,0 0,14 ICI MA I! TOWN OF MARANA RECONCILIATION AGREEMENT FOR CONSTRUCTION OF SEWER FACILITIES UNDER PRIVATE CONTRACT Mandarina Offsite Sewer THIS RECONCILIATION AGREEMENT(this "Reconciliation Agreement") is entered into by and between the TOWN OF MARANA,an Arizona municipal corporation (the "Town"), and MANDARINA HOLDINGS,LLC, an Arizona limited liability company (the "Developer"). The Town and the Devel- oper are sometimes collectively referred to as the"Parties,"each of which is sometimes individually referred to as a"Party." RECITALS A. The Parties entered into an agreement entitled "Town of Marana Agreement for Con- struction of Sewer Facilities under Private Contract—Mandarina Offsite Sewer," recorded in the office of the Recorder of Pima County, Arizona, on February 5, 2021, at Sequence No. 20210360146 (the "Mandarina Sewer Agreement"). B. Among other things, pursuant to Marana Town Code section 14-4-3 (C), paragraph 1.8 of the Mandarina Sewer Agreement established an "oversizing recovery charge" of$416.89 per equivalent demand unit ("EDU")based on the Developer's then-anticipated costs of the "Work," as that term is defined in paragraph 1.1 of the Mandarina Sewer Agreement, and based on the then- anticipated EDU count. C. As set forth in Recital H of the Mandarina Sewer Agreement,the anticipated cost of the Work at that time was $2,054,036.00. D. Pursuant to paragraph 1.8 of the Mandarina Sewer Agreement, the number of antici- pated EDU connections on the"Subject Property,"as that term is defined in Recital B of the Man- darina Sewer Agreement,to the "Developer-Installed Facility," as defined in paragraph 1.1 of the Mandarina Sewer Agreement, was at that time 2,005 EDUs. Also pursuant to paragraph 1.8, the Parties determined that the Developer-Installed Facility would have "sufficient capacity to serve an additional 2,922 EDUs as a result of and upon completion of the Work and after connection to" the 2,005 EDUs on the Subject Property. E. Paragraph 1.8.6 of the Mandarina Sewer Agreement states that final construction quan- tities and amounts will be provided after construction of the Developer-Installed Facility is com- pleted; and paragraph 1.8.5 provides that if"the actual number of lots and size of meters used to develop the Subject Property results in a different EDU count, the number of EDUs required to pay the oversizing recovery charge" shall be adjusted and the oversizing recovery charge shall be re-calculated accordingly. - 1 - 2/1/2024 F. The Town anticipates formally accepting the Work in the near future. The Developer is now satisfied with the actual cost of the Work and does not anticipate the actual cost of the Work will change even though the Work has not yet been formally accepted by the Town. G. The Developer has also submitted to the Town a revised EDU count for the Subject Property consisting of EDUs now currently planned for the development. H. The Parties at this time desire to reconcile the oversizing recovery charge payable to the Developer pursuant to the terms of the Mandarina Sewer Agreement to reflect the actual cost of the Work and the revised EDU count. AGREEMENT Now,THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth in the Mandarina Sewer Agreement and in this Reconciliation Agreement, the Parties hereby agree as follows: 1.Amendment of oversizing recovery charge. The Parties agree and acknowledge that the De- veloper's actual cost of completing the Work was $1,630,676.45 and that the EDU count for the Subject Property now consists of 1,924 EDUs. As a result, the number of additional EDUs that can reasonably be served by the oversized facility has increased to 3,003 EDUs. Accordingly, pursuant to Marana Town Code section 14-4-3 (C), the oversizing recovery charge established under paragraph 1.8 of the Mandarina Sewer Agreement is hereby modified and decreased to $330.97 per EDU for connections whose capacity is made possible as a result of the Work. 2. No further amendments to the oversizing recovery charge. In light of Recitals F and G, the Parties hereby agree that that no further amendments to the Mandarina Sewer Agreement shall be made related to the actual cost of the Work or to the oversizing recovery charge amount. 3. Confirmation of remaining terms of the Mandarina Sewer Agreement. Except as expressly modified by this Reconciliation Agreement, all other provisions and limitations set forth in the Mandarina Sewer Agreement, including without limitation those pertaining to the oversizing re- covery charge, remain in place and are unchanged by this Reconciliation Agreement. 4. Cancellation for conflict of interest. This Reconciliation Agreement is subject to A.R.S. § 38-511, which provides for cancellation in certain instances involving conflict of interest. [Signature Page Follows.] - 2 - 2/1/2024 IN WITNESS WHEREOF, the Parties have executed this Reconciliation Agreement as of the last date set forth below their respective signatures. THE"TowN": The"Developer": TOWN OF MARANA, an rizona municipal MANDARINA HOLDINGS,LLC, an Arizona corporation limited liability company v By: KDL INVESTMENTS, LLC, an Arizona limited liability company, its sole By: M ber Ed Honea, Mayor Date: Woo zo 1.4 By: N uis arigger ATTEST: Date: 1*q David L. Udall, Town Clerk APPR AS TO F RM: J Fairall, Town Attorney ate of Arizona ) ss County of M e riGoPa) The foregoing instrument was acknowledged before me on 62/i5-/202'1 by Karl N. Huish,the Manager of KDL INVESTMENTS,LLC,an Arizona limited liability company,the sole Member of MANDARINA HOLDINGS,LLC,an Arizona limited liability company,on behalf of MAN- DARINA HOLDINGS,LLC. (Seal) MEGAN LANDOWSKI oVevytide324064,(= Notary Public 1/4.41nW.V= Commissres:ion Number July 30 2027 653978 Notary Public Expi , Mari a Coun - 3 - 2/1/2024